Why Korea's state-run banks are no longer seen as dream jobs

Korea Development Bank (KDB) headquarters in Yeouido, Seoul / Courtesy of KDB

Korea's state-run banks are seeing more employees leave as weakening wage competitiveness and relocation concerns weaken their appeal among young professionals, industry officials said Monday.

According to data from ALIO, the public disclosure system for state-run institutions, the turnover rate among male employees at Korea Development Bank (KDB) rose to 9 percent last year from 3 percent in 2021. The rate for female employees edged up to 1.6 percent from 1.5 percent.

Over the same period, male turnover at the Industrial Bank of Korea (IBK) climbed to 6.2 percent from 1.7 percent. At the Export-Import Bank of Korea (Korea Eximbank), the rate for men rose to 4.1 percent from 3.2 percent, while turnover among women jumped to 2.6 percent from 0.7 percent.

Average years of service have also declined across these lenders. KDB employees stayed an average of 185 months last year, down from 199 months in 2021. Similar declines were seen at Eximbank and IBK.

Industry officials said state-run banks no longer offer the same advantages they once held over commercial lenders, particularly in terms of salary competitiveness.

In 2025, the average salary at major policy banks stood at 115.9 million won ($78,000), about 4 million won lower than the average at the country's four largest commercial banks— KB Kookmin, Shinhan, Hana and Woori.

Policy banks once offered salaries comparable to, or even higher than, those at commercial lenders, but the gap has narrowed rapidly since around 2019.

This is largely because state-run banks are subject to government wage controls.

"With the pay gap with commercial banks widening, a sense of pride and responsibility that comes with working at a policy bank is no longer enough to offset the difference," a banking industry official said. "As a result, a growing number of young employees appear to be moving to commercial banks or securities firms."

Possible relocations outside Seoul are also cited as a major factor behind the growing departures among employees.

Ahead of the June 3 local elections, candidates in Daegu have floated relocating IBK to the city, seeking to appeal to voters with pledges to move the state-run bank's headquarters there. In 2022, a proposed relocation of KDB to Busan also prompted opposition from its employees, particularly younger workers.

Financial labor unions have strongly opposed such plans, arguing that relocating policy banks outside Seoul could disrupt operations and weaken competitiveness, given the need for close communication with businesses and financial agencies.