[1mm Financial Talk] Criticism of Yoon's Bank: "Just Make It a Public Institution"

[Asia Economy Reporter Bu Aeri] "If this is the case, just make us a public institution." This is a post anonymously uploaded by a bank employee on an online community after President Yoon Seok-yeol and Financial Supervisory Service (FSS) Governor Lee Bok-hyun strongly criticized the banking sector's 'bonus party.' As financial authorities and politicians continue to criticize banks, dissatisfaction among bank employees is growing.

On the 13th, during the Chief Secretary meeting, President Yoon said, "The public is suffering greatly due to the banks' high interest rates," and added, "Since banks have a public utility nature, profits should be returned as mutually beneficial financial benefits to those struggling, such as ordinary citizens, self-employed individuals, and small business owners. Please ensure that the banks' money celebrations do not create a sense of discord among the public."

President Yoon's remarks appear to be mindful of the recent public criticism toward banks that have implemented large-scale dividends, including high severance pay and bonuses. Governor Lee also followed suit by announcing plans to inspect the banks' bonus operation systems.

The four major financial holding companies recorded record-breaking earnings last year as the interest margin (difference between deposit and loan interest rates) widened during the high interest rate period. Last year, the interest income of the four major holdings reached 39.6735 trillion won. Banks that posted strong results paid bonuses amounting to 300-400% of the base salary to employees, and the severance pay given to voluntary retirees this year is known to be at least 600 to 700 million won per person.

In response to President Yoon's remarks, banks are showing signs of embarrassment. Their achievements such as social contributions and support for vulnerable borrowers are being forgotten, while they are being treated like 'loan sharks.' A representative from a commercial bank lamented, "Large corporations receive bonuses worth tens of millions of won without much fuss," and added, "Banks are also businesses, so I don't understand why receiving bonuses and severance pay according to labor-management agreed rules from the profits generated is being criticized to this extent."

In fact, the banking sector donates about 1 trillion won annually to social contribution funds, and the Korea Federation of Banks announced on the 27th of last month that it will raise 500 billion won over the next three years to support vulnerable groups. The reserves pointed out by President Yoon also exceed 5 trillion won as of last year in the four major banks alone. Another bank official said, "As banks are being targeted day after day, there is even suspicion that this has political intentions considering next year's general elections," and questioned, "Are bank employees not citizens too?"