 |
| Citibank Korea employees walk around in its head office in Seoul, Monday. Yonhap |
By Lee Min-hyung
The union and top management of Citibank Korea are set to escalate their feud amid the lender's decision to shut down its consumer banking business here, with the former threatening to stage an "all-out" strike against any possibly ensuing personnel restructuring.
This came in response to Citi's recent decision to pull its consumer finance businesses ― such as loan, deposit and credit card services ― out of the Korean market. It remains undecided how the Korean subsidiary of the global banking group will put together a detailed exit strategy.
Citibank Korea will discuss the situation during an upcoming board of directors meeting slated for April 27.
But the lender's management is faced with strong union backlash even before initiating discussions on restructuring measures.
"If Citibank Korea pushes for the sale of or withdrawal from the retail banking business here, this will end up causing mass unemployment," a representative of the union said. "We are going to fight any such move to stabilize job security of employees and protect customers."
According to the union, Citibank Korea started restructuring its consumer banking business in 2012. The lender was operating 221 sales offices nationwide here in 2011, but more than 80 percent of them have since been shut down and only 39 offices are still in operation, the union said.
Earlier, Citibank Korea CEO Yoo Myung-soon said the lender will "take enough time" before initiating a specific exit strategy.
"Citibank Korea's management and board of directors will review all possible action plans carefully," she said.
It remains unclear whether the bank will completely close down its retail banking services, in which case large-scale layoffs are likely to ensue. The lender's retail banking service has a total of 939 employees here as of the end of 2020.
The latest decision from Citigroup reflects on its falling revenues in the Korean market. Citibank Korea's net profit declined by 32.8 percent in 2020 from a year earlier. The lender generated 14.8 billion won in its retail banking business here last year, down by more than 50 percent from the previous year. This is also a decline of around 80 percent when compared with 2018.
Citibank Korea, which started its business here in 2004, was mired in a series of rumors in 2014 and 2017 over its withdrawal from the Korean market. But with the group making an official announcement over the move this time, chances are Citibank Korea's management and union will escalate the dispute.
Citibank Korea plans to enhance its competitiveness in the corporate finance business following the pullout of the retail service, according to the Citibank Korea chief.
Citi's union also stepped up criticism against its global headquarters, saying that it has received 2.9 trillion won ($2.59 billion) from the Korean subsidiary in the name of dividends and service charges over the past decade, but Citibank Korea has not opened any public recruitment for new employees during the same period.
For Citibank Korea, the worst-case scenario is a shutdown of its retail business if the lender fails to find a potential buyer. In 2013, HSBC Korea closed all branch offices handling retail banking services here except for a Seoul office. Most of the firm's employees had to accept voluntary resignation after it failed to find a buyer for the unit.
The financial authorities here remain cautious before taking specific actions over the labor issue surrounding Citibank Korea, as they have yet to receive any specific notification as to how the lender will carry out restructuring.
Watchdogs such as the Financial Services Commission are in a position to keep a close watch and take appropriate measures in accordance with the legal framework in case any disputes erupt, particularly in the areas of labor and consumer protection.
