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Unionized workers of the country's top five commercial lenders will receive bonuses of up to 300 percent of their base pay in addition to cash-equivalent mileages this year, sparking controversy over their interest margin-protected revenue model lacking innovation, market watchers said Tuesday.

Propelling the criticism is their practice of heavy, continued oligarchy-oriented profiteering amid overall high prices, high borrowing costs and stagnant economy. Over 90 percent of their net profits come from interest income.

Also under scrutiny is the nature of their government-licensed businesses, largely insulated from the consequences of poor management with taxpayers' money often sourced to help them weather crises.

Public frustration is mounting after KB Kookmin union workers demanded a bonus of 300 percent of their base pay, in addition to 10 million won ($6,839) in cash.

The bank's management rejected it, citing a one-off expense of over 862 billion won last year to compensate buyers of troubled equity-linked securities (ELS) tied to the Hang Seng China Enterprises Index (HSCEI).

The union declared the wage negotiation deadlocked and sought dispute mediation with the labor ministry-supervised National Labor Relations Commission (NLRC) on Dec. 27 of last year, threatening to strike.

The first round of mediation on Jan. 7 failed, followed by another unsuccessful attempt on Monday. The union could in theory proceed with a strike, the first since 2019.

Shinhan, Hana, Woori, and NH NongHyup have raised their wages by 2.8 percent this year, up from a 2 percent increase in 2023.

Their bonuses also rose this year.

Shinhan and Hana employees will receive 280 percent of their base pay, with cash incentives increased to up to 3 million won.

The banking sector's employee benefits expanded in 2024.

Employees with children in the first and second grades of elementary school can come in 30 minutes later to work.

Parents with children entering elementary school can start work at 10 a.m., and leave at 5 p.m. for about two months.

Bank of Korea (BOK) data showed that loan deposit interest rate differential reached 1.41 percentage points in November 2023, the widest since August 2023.

This resulted from lenders raising their surcharges, a widely criticized method to defend their profit margins, even as their borrowing costs decreased due to a BOK key rate cut.

Also at play was financial authorities' directive to curb the country's world-leading household debt growth,controlled by keeping the interest rate margins elevated.

The five lenders registered a combined 11.78 trillion won in net income in the first nine months of last year, up 4.06 percent from the same period a year ago.

Their employee salary averaged 112.65 million won last year.

KB Kookmin had the top salary at over 118.21 million won, followed by Hana at 115 million won, NH NongHyup at 110 million won, Woori at 109 million won, and Shinhan at 108 million won.