South Korea’s major commercial banks rewarded employees with significant pay raises last year. (Image courtesy of Yonhap)
SEOUL, Mar. 20 (Korea Bizwire) – South Korea’s major commercial banks rewarded employees with significant pay raises last year, despite continuing a cost-cutting drive that saw further reductions in staffing levels and branch networks across the country, according to financial filings.
An analysis by Yonhap News of the 2023 business reports disclosed by the nation’s four largest banks – KB Kookmin, Shinhan, Hana and Woori – reveals the average employee compensation surged to 116 million won in 2023, up 2.9 percent from 112.75 million won a year earlier.
KB Kookmin Bank, the flagship lender of the KB Financial Group, paid its staff the highest mean salary of 120 million won, followed by Hana Bank at 119 million won, Shinhan Bank at 113 million won and Woori Bank at 112 million won.
The raises, however, came as the big four continued trimming their payrolls. As of late 2023, they employed a combined 55,164 staff members, reflecting a 1.9 percent decrease of 1,084 employees from 56,248 at the end of 2021. The declines were driven by retirement programs and other workforce reductions.
In a parallel move to rein in costs, the banks’ physical branch networks contracted by 2 percent over the 12-month period. KB Kookmin underwent the steepest cuts, shuttering 59 branches to end 2022 with 797 nationwide, while Hana expanded modestly by adding four to reach 597.
The streamlining efforts are part of a broader push among South Korean lenders to boost profitability amid intensifying competition from financial technology upstarts and a challenging economic landscape.
A stark gender pay gap also persisted at the big four commercial banks, with male employees earning an average 133.75 million won – over 32 percent more than their female counterparts at 101.25 million won. The banks attributed the discrepancy to shorter tenure among women and a higher proportion of them in part-time roles.
M. H. Lee (mhlee@koreabizwire.com)
