South Korea's financial district of Yeouido, western Seoul. (Reuters-Yonhap)
South Korea’s five major banks cut over 1,570 jobs and shut down 238 brick-and-mortar branches last year, as the COVID-19 pandemic pushed them toward digitalization, industry data showed Wednesday.
According to data compiled by the Korea Federation of Banks, KB Kookmin, Shinhan, Hana, Woori and NH NongHyup shed a combined 238 offline branches and offices on-year to 3,546 as of end-December.
While local lenders have been steadily shutting down their brick-and-mortar operations, the figure gained fast momentum last year as the pandemic swept through the nation. They shut down a total of 24 branches and offices on-year in 2018 and 50 in 2019, in the same period, compared to the 238 last year.
With the cuts in offline operations came downsizing of their workforce.
The five banks shed a combined 1,570 jobs – including both executives and employees – to 67,561 on-year in 2020. The number of jobs lost tripled from 2019’s corresponding figure of 507.
Local banks throughout last year offered employees the option to accept early retirement to cut costs amid the prolonged pandemic. The early retirement applications covered wider age ranges and offered more money than in previous years, due to the circumstances.
Hana and NH NongHyup reportedly accepted early retirement applications from 500 and 490 of their employees last year alone, respectively. Early this year, KB Kookmin accepted early retirement applications from 800 employees, while Woori and Shinhan each saw some 460 and 220 employees respectively leave the workforce for the same reason in the cited period.
Meanwhile, the nation’s internet-only banks -- Kakao Bank and K bank -- gained 151 jobs on-year to 1,289 as of end-2020. With the planned launch of Korea's third internet-only bank, Toss Bank, later this year and growing demand for mobile services, their workforce is projected to expand further in 2021.
By Jung Min-kyung (firstname.lastname@example.org