Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Average salary at major banks exceeds $80,000
ATMs set up by major Korean banks in Seoul / Newsis
By Anna J. Park
By Anna J. Park
The average annual salary of employees at five major local banks ― KB Kookmin, Shinhan, Hana, NongHyup and Woori ― has exceeded the 100-million-won ($80,500) mark, according to data submitted to ruling People Power Party lawmaker Rep. Yun Chang-hyun on Sunday.
KB Kookmin Bank's average annual salary topped the list with 110.7 million won, as of 2021, followed by Shinhan and Hana's 105 million won, Woori's 101.7 million won and NongHyup's 101.6 million won. More specifically, the average annual salary of the five major banks' upper-10-percent income bracket stood at nearly 200 million won, as KB Kookmin Bank's average was at 197 million won, followed by Hana's 195 million won, Shinhan's 192 million won, Woori's 185 million won and NongHyup's 178 million won.
The median annual salary of each of the five banks also exceeded the 100-million-won mark for KB Kookmin, Shinhan and Hana Banks, while both NongHyup and Woori Banks' median salaries fell slightly short of 100 million won.
Both KB Kookmin and Shinhan's median salaries stood at around 106 million won, and Hana's median salary stood at 100.4 million won, while NongHyup and Woori's median salaries stood at 96.7 million won and 96.3 million won, respectively.
Criticism rises over bank 'bonus parties' with earnings from interest profits
The banks' average salary for 2022 is likely to increase significantly from the figures of 2021, as the banks are expected to post all-time high earnings for last year, due mainly to rising interest rates. Financial information portal FnGuide recently estimated that four major financial groups' profits solely from interest earnings last year will be 65.9 trillion won, up 30.1 percent from 2021.
Shinhan Bank has decided to increase bonus payments by 361 percent of the basic salary in 2022, from the previous year's 300 percent. NongHyup Bank increased the rate to 400 percent for year 2022, from the previous year's 350 percent.
Given the significant rise in the lenders' earnings and their decision to increase bonus payments sharply for employees at the end of last year, the average salary of bank employees is expected to soar.
Voices of criticism have arisen, as it seems the lenders are holding bonus parties at the cost of the public and small business owners who've been bearing the pain from the rising interest rates. Main opposition Democratic Party lawmaker Kim Jong-min's office revealed that executives at four major banks received bonuses of 91.2 billion won for the period from January 2020 to May 2022.
While the executives of the lenders increased their share of pocketed money from the banks' interest-derived profits, the banks' social contributions have been declining since 2019. A total of 19 local banks spent an aggregated 1.06 trillion won in social campaigns or initiatives in 2021, which is a slight decrease from 2020's 1.09 trillion won and 2019's 1.13 trillion won.
“With increased profits, banks have been focusing on increasing salaries and bonus payments for company employees and executives,” Rep. Yun Chang-hyun criticized. “Instead of outwardly emphasizing ESG initiatives in word only, the banks should take concrete actions to return the profits back to the society,” he added.
“While households, corporations and mom-and-pop store owners are screaming out over the rapidly increased loan interest, banks are enjoying bonus parties from record-high earnings at the cost of people's suffering,” ruling party three-term lawmaker Kim Sang-hoon said during a party meeting last Thursday.
Financial authorities have also started mentioning the need for changes to banks' salary systems. Financial Supervisory Service (FSS) Governor Lee Bok-hyun recently pointed out that banks' salary and bonus systems are dependent on short-term performance, which should be ameliorated.
In addition, the financial authorities as well as some customers criticize local banks' operating hours, which have been shortened by one hour since the outbreak of COVID-19. They say banks have not taken appropriate measures to normalize their operating hours, causing major inconveniences to customers, while most other public and private places' operating hours have been normalized since social distancing was officially lifted in early 2022.