4 Major Banks to Lose 7,570 Jobs Over 5 Years Due to Branch Mergers and Closures

Bae Jin-kyo, Justice Party member (Source=Yonhap News)

[Asia Economy Reporter Kim Hyo-jin] It has been revealed that the reduction of branches and other business offices due to the consolidation of major commercial banks' networks is accelerating job losses.

According to the 'Status of Branch Consolidation of the Four Major Commercial Banks (KB Kookmin, Shinhan, Hana, Woori)' submitted by the Financial Supervisory Service to Bae Jin-gyo, a member of the National Assembly's Political Affairs Committee from the Justice Party, the total number of branches nationwide for these banks decreased from 3,513 at the end of 2015 to 2,964 by the end of August this year, a reduction of 549 branches over 4 years and 8 months. Due to the impact of the non-face-to-face consumption culture accelerated by the COVID-19 pandemic, an additional 63 branches are expected to close by the end of this year.

By bank, Hana Bank closed 243 branches, decreasing from 853 to 610 during this period, and KB Kookmin Bank reduced 148 branches from 1,022 to 874. Woori Bank closed 94 branches, going from 842 to 748, and Shinhan Bank closed 64 branches, decreasing from 796 to 732.

The workforce of the four major banks shrank by 7,570 jobs, from 66,865 employees in 2015 to 59,295 as of August this year. According to the Korea Federation of Banks, the number of bank branches, which was 7,100 at the end of 2016, decreased to 6,591 by the end of June this year, with 117 branches closing in the first half of this year alone.

Assemblyman Bae pointed out, "Since banks provide financial services to the entire population, individual commercial banks should not excessively reduce offline services prioritizing profits alone. Even if some restructuring of bank branches occurs due to changing times, indiscriminate closure of branches by commercial banks could create blind spots in financial services for vulnerable groups, including the elderly who have difficulty accessing online financial services."

He added, "Financial authorities should ensure that the opinions of local residents in areas scheduled for branch closures are reflected during the 'Bank Branch Closure Impact Assessment' process to prevent blind spots in financial services for vulnerable groups caused by branch reductions, and also prepare supplementary measures to address the expansion of closures."