Increasingly Challenging... The Complex Calculations in Citibank's Withdrawal Battle

Yoom Young-soon, Bank President, "No Consideration of Asset Sales Without Employment Succession"
Union Opposition Intensifies, Raising Possibility of Large-Scale Strikes Later
Ruling Party Lawmakers Visit Citibank...Will Political Circles Also Speak Out?

Yoom Young-soon, President of Citibank Korea

[Asia Economy Reporter Song Seung-seop] The calculations of stakeholders surrounding the withdrawal of Korea Citibank from retail banking are becoming increasingly complicated. The clear differences in views between labor and management make it difficult to find common ground in negotiations, and recently, voices have begun to emerge even from the political sphere. There is even a forecast that if the Citibank withdrawal issue becomes more tangled, the situation could be prolonged.

According to the financial industry on the 16th, Yoo Myung-soon, CEO of Korea Citibank, recently told employees, "In pursuing an exit strategy, I once again emphasize that customer protection and the protection of employees' interests will be our top priority." This is interpreted as a message issued again following early this month, as anxiety about job security has grown among internal staff including the labor union. Yoo’s position is that "so far, no asset sale method without employment succession has been considered."

CEO Yoo must successfully implement domestic retail banking in line with Citigroup's global strategy changes, but the issue of employment succession and the resulting labor union opposition are obstacles. The labor union strongly opposes partial sales and asset sales as well. If an agreement with the union cannot be reached, internal resistance and large-scale strikes are inevitable. The problem is that it is not easy to meet the employment conditions of about 2,500 employees as much as possible. There is also a risk that the attractiveness of acquiring Citibank may decline.

The messages from CEO Yoo and the board of directors change moment by moment depending on the situation. At a meeting with field employees last month, CEO Yoo clearly stated the withdrawal principle of "prioritizing a full sale." However, after going through the board, if the situation is unfavorable, the direction shifted to considering ‘gradual abolition’ rather than partial sales. The liquidation scenario is a policy that causes significant job insecurity for many employees and is strongly opposed by the labor union.

Labor Union Secures Right to Strike, Political Sphere Raises Voices

The situation is equally complicated for the labor union, which is calling for a desperate fight. The union is gradually escalating its level of struggle by holding rallies to defend their right to survival and starting overnight sit-ins in front of the CEO’s office. On the 11th, they also passed a strike vote with a 99% approval rate, securing a legal right to strike. After completing a four-week nationwide tour by the 18th, they plan to launch full-scale struggles starting in July.

However, large-scale strikes are a cautious measure for the union as consumer damage would be significant. Among the approximately 3,300 full-time employees at Citibank, about 80% are union members. If existing customers suffer disruptions in using Citibank services due to strikes, there is a risk of backlash. A union official explained, "It is difficult to disclose detailed schedules such as internal struggle guidelines," but added, "Even if we proceed, we will prepare to ensure there is no harm to customers."

The political sphere has also begun to join the Citibank issue. Six lawmakers from the Democratic Party visited Citibank the day before, held a meeting with the union, and met with CEO Yoo. Lawmaker Ahn Ho-young publicly stated, "I requested that the process proceed through sufficient consultation with the union, and I received a positive response indicating that this would be done."