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| gettyimagesbank |
By Anna J. Park
Major commercial banks are expected to achieve record-high profits this year thanks to increasing interest rates and rising household loans. But the number of employees leaving banks is also forecast to rise to an all-time high.
This paradox is a result of various factors, ranging from the accelerated digitalization of banks that has led to a cut in both the number of workers and branches, voluntary retirement and Citibank Korea's withdrawal from retail financing.
Citibank Korea has been receiving applications for voluntary retirement since late last month, not only at its retail operations, but also at its corporate financing unit.
The bank will receive voluntary retirement applications up until this week and more than half of its 3,400 staff are expected to apply. Full-time employees who have worked at Citibank Korea for more than three years, but have more than five years left until retirement, will receive 90 percent of their base pay multiplied by the remaining years until they turn 60. Full-time workers who have less than five years left until retirement will get 100 percent of their base pay times the remaining years until they turn 60. The maximum voluntary retirement pay comes to 700 million won ($589,000).
SC Bank Korea also received about 500 applications for voluntary retirement last month and applicants who were chosen already left the bank at the end of last month. It was the highest number of voluntary retirees at the bank since 2015.
Some 800 employees left KB Kookmin Bank this year, which is about twice the number seen in 2018.
Shinhan Bank received applications for voluntary retirement in January and July of this year. Around 350 employees opted for voluntary retirement. The figure is also the highest at the bank since 2018.
The increase in voluntary retirements stems from an expansion in the scope of employees eligible for the program, as well as the size of compensation payments. Commercial banks are increasingly embracing mobile banking, which requires fewer staff. The trend is also encouraging banks to adopt voluntary retirement programs to cut costs. The all-time high earnings of banks have also enabled them to offer better financial rewards to workers to apply for voluntary retirement.
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