Union slams Standard Chartered over hefty dividends

By Park Jae-hyuk

Standard Chartered (SC) Bank Korea's union condemned the bank's management for having sent a total 3.6 trillion won ($3 billion) to its U.K. headquarters since SC's acquisition of Korea First Bank in 2005.

Describing the outflow of cash as “exploitative colonization,” the union also called on Financial Supervisory Service (FSS) Governor Jeong Eun-bo to inspect the bank's management during their meeting earlier this week.

SC Bank Korea has paid 2.6 trillion won in dividends and an additional 1 trillion won in royalties since 2005, according to data from the bank workers' union. The combined amount exceeds the 3.4 trillion won that SC paid to acquire Korea First Bank.

In particular, the bank's board of directors decided this month to pay an 80 billion won interim dividend to its headquarters, as the nation's financial authorities lifted the dividend cap that had been imposed in January to bolster the financial soundness of banks amid the COVID-19 pandemic. The bank gave its headquarters 49 billion won in dividends for its 2020 earnings in March, when the dividend regulation was effective.

“The FSS sent a warning to the bank in 2014 for paying 150 billion won in dividends, despite its loss at that time,” the union said in a statement. “The executive compensations have also been raised despite the closure of bank branches and management's negligence in consumer protection.”

According to SC Bank Korea's regulatory filing, CEO Park Jong-bok was paid 863 million won during the first half of this year, up 8.3 percent from a year earlier. Three other executives were paid more than the CEO.

Its first-half net income, however, rose only 1.5 percent year-on-year to 184.8 billion won, as its second-quarter net profit dropped 7.1 percent from a year ago, in contrast to other domestic commercial banks that saw major gains in their net incomes.

In addition, the Financial Services Commission (FSC) gave the lowest grade to SC Bank Korea among 15 banks here for the second consecutive year in its evaluation of their reinvestments outside of the Seoul metropolitan area. The FSC took into account the number of branches they closed and their support for those who are facing financial difficulties from the COVID-19 pandemic.

SC Bank Korea declined to comment on the union's claim.

In response to the FSC's evaluation, the bank said it humbly accepts the results, adding that it will continue to do its best in the fields in which it is competent and for the development of local communities.