Hana assures KEB independent management, job security for 5 years


Hana Financial Group and the hard-line labor union of the Korea Exchange Bank on Friday reached an 11th-hour compromise on how to manage KEB, taken over by Hana.

With the agreement, the KEB union leaders withdrew its plan to go into a general strike against Hana’s merger of their bank.

Under the agreement, the KEB brand will be maintained for five years ― separate from the group’s flagship Hana Bank ― as a new unit of Hana Financial. It means that the “practical merger” between KEB and Hana Bank will take place after 2016.

KEB employees are also expected to enjoy what financial officials viewed the currently high level of salaries over the next few years though the bank has become a unit of Hana Financial Group.

This is because the terms included the maintenance of KEB’s present payment system, which has been conducted under its previous biggest shareholder ― Lone Star Funds. The two sides also agreed not to slash salaries or welfare benefits.

Manpower restructuring from Hana management will also be banned under the pact.

Since late 2010, the union has continued to protest Hana’s acquisition of KEB from Lone Star Funds. It argued that Hana signed the takeover deal with a “stock manipulator and legally ineligible owner of KEB.”

But the union eventually accepted a package of proposal from the financial group, scrapping its demand to finalize the allegations that Lone Star’s acquisition of KEB in 2003 and the recent deal between Hana and the U.S.-based fund are originally invalid.

Some financial market observers said that the union’s protest was ultimately aimed at their job security.

“A point is that the (average) salary of KEB employees has been quite a lot higher than that of Hana Bank workers,” a commercial banker said.

The salaries for the KEB staff have been the upper level in the local financial industry while those for Hana Bank have stayed low.

An official of the Financial Supervisory Service criticized the union for dropping its one-year-long protest in less than a month after financial regulators approved the Hana-Lone Star deal.

“Some might have regarded them as patriots,” he said. “They should have gone on a strike several years before if they really wanted financial sovereign rights.”

Though more than 900 workers of KEB and the bank’s credit card affiliate have been dismissed by Lone Star since 2004, the remaining workers could maintain job security with the high income level.

Now, attention is being paid to who will be appointed to the post of Hana Financial chairman when incumbent chief Kim Seung-yu’s term expires at the end of March.

Despite the compromise, a group of lawmakers and professors are likely to call for the prosecution and the court to reveal possible faults of the Financial Services Commission, which took on the endorsement of the two deals of KEB in 2003 and 2012.

By Kim Yon-se (kys@heraldcorp.com)