22,000 Bank Departures Received at Least 600 to 700 Million KRW Each

[Asia Economy Reporter Buaeri] At the end of last year, 2,200 employees left the five major commercial banks, each estimated to have received a retirement severance pay of at least 600 million to 700 million KRW.

According to the financial sector on the 12th, among the commercial banks that announced their performance last year, KB Kookmin Bank, Shinhan Bank, and Woori Bank reflected the costs of voluntary retirement in the fourth quarter.

They paid special retirement severance pay ranging from 340 million to 440 million KRW per person for voluntary retirement.

KB Kookmin Bank recorded 272.5 billion KRW as voluntary retirement costs in the fourth quarter of last year, with 713 confirmed retirees, which means an average payment of 382 million KRW per person.

Shinhan Bank reflected 133.6 billion KRW as voluntary retirement costs in its performance, with 388 voluntary retirees, averaging about 344 million KRW per person.

Woori Bank, which had 349 voluntary retirees early this year, accounted for 154.7 billion KRW in voluntary retirement costs in the fourth quarter of last year. The average amount per person was 443 million KRW.

However, Woori Bank explained that the cost was somewhat higher compared to other banks because most of the voluntary retirees were senior employees nearing retirement age.

Hana Bank plans to reflect voluntary retirement costs in its first-quarter performance.

Following the voluntary retirement applications received by each bank since the end of last year, it was found that about 2,200 people left the five major commercial banks.

The numbers were in order: KB Kookmin Bank (713), NH Nonghyup (493), Shinhan (388), Woori (349), and Hana (279).

Although there are differences by bank, retirees receive support including up to 36 months of average monthly wages based on years of service, several tens of millions of KRW for tuition and reemployment support, and health checkup costs.

The voluntary retirement costs reflected in the banks’ fourth-quarter performance only consider one-time costs related to voluntary retirement. Several hundred million KRW of statutory severance pay are excluded. Statutory severance pay is usually calculated by multiplying the average monthly wage over the last three months by years of service.

Last year, the average annual salary per person at major commercial banks was around 97 million to 112 million KRW, and the average years of service was about 16 years. This means the average monthly wage for bank employees with about 16 years of service was approximately 8.08 million to 9.33 million KRW.

Accordingly, when combining special retirement severance pay and statutory severance pay, those who left the banks early this year reportedly received a lump sum of at least 600 million to 700 million KRW per person.

An official from a commercial bank said, "Since the banks’ performance has been good, there are employees nowadays who wait for voluntary retirement, making it almost an annual event."