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Internet-only banks outperform legacy lenders in labor productivity

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A customer consults with a banker via video chat at a specialized digital branch of Woori Bank in Seoul, in this March 29 photo. Yonhap

By Lee Yeon-woo

K Bank and other internet-only banks are found to have outperformed the country's top five legacy lenders in labor productivity in the first half of the year, generating larger profits per capita, data showed Monday.

Even though commercial banks have made efforts to enhance productivity by reducing staff during the same period, their profit per employee still lagged behind those of internet-only banks.

According to management reports from each bank disclosed by the Korea Federation of Banks, as of June, K Bank boasted the highest profit per employee, registering 300 million won ($221,402). It was trailed by two other internet-only banks ― Toss Bank at 273 million won and KakaoBank at 253 million won.

Among the top five commercial banks, Hana Bank led the pack with its profit per employee at 219 million won. NH Nonghyup Bank followed with 188 million won; KB Kookmin Bank, 179 million won; Shinhan Bank, 177 million won; and Woori Bank with 159 million won.

This data suggests that the per capita profit of Woori Bank was roughly half that of K Bank.

Driven by aggressive voluntary retirement strategies, the five banks' productivity per employee saw a notable increase. The number of staff at the top five commercial banks decreased to 67,408 this June, marking a reduction of 820 employees compared to a year ago. This led Hana Bank to experience the most significant growth in profit per employee over the span of a year.

KB Kookmin Bank led this downsizing, with a reduction of 323 staff, followed by Woori Bank, which lost 203 employees. Shinhan Bank, NH Nonghyup Bank, and Hana Bank also saw staff reductions, shedding 149, 107, and 38 employees, respectively.

In contrast, the emerging internet-only banks, KakaoBank, Toss Bank, and K Bank, are on an upward trajectory. They expanded their teams by a respective 281, 154, and 64 members.

During the first six months of 2023, the top five commercial banks also closed 141 branches. This brought the number of branches down to 3,628 this June, a reduction from 3,770 year-on-year. KB Kookmin Bank took the lead by closing 69 branches.

Lee Yeon-woo


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