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Employees of the country's five largest commercial banks – KB Kookmin, Shinhan, Woori, Hana, and NH NongHyup – will be eligible for a voluntary retirement package that offers up to a 31 month lump-sum average monthly income, market watchers said Friday.
The annual program was introduced despite the banks' record profits last year. It is part of a corporate streamlining effort to reduce labor costs as they transition to digital banking, according to the banks. It came amid declining net interest margins due to monetary easing and an economic slowdown this year.
Net interest margin refers to the difference between the interest a lender earns from credit products such as loans and mortgages, and the interest it pays to holders of savings accounts and certificates of deposit.
The rollout is an extended application of the wage peak system for senior employees nearing retirement age.
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Woori Bank announced that employees born in 1969 or later, with at least 10 years of experience at the bank, will be eligible to apply for the package until Jan. 7, with departures set for Jan. 31.
Employees born in 1969 will receive 19 months of their average salary, while those born in 1970 or later will receive 31 months' pay.
The lender will cover job training and healthcare expenses, including annual physicals.
Parents of children born before Dec. 31, 2012, will be eligible to receive their university tuition.
"The leaving employees can seek new business opportunities with a generous retirement package," a Woori official said.
Hana Bank employees aged 40 and older with at least 15 years of experience at the bank can apply for the package through Jan. 6.
Their lump-sum payout will be between 24 and 31 months of their average salary, similar to last year's program.
Employees born between July 1 of 1969 and 1972 will be eligible to receive support for their children's tuition, medical expenses, and career transition assistance.
A human resources committee under the bank will review the eligibility of the applicants before they leave on Jan. 31.
NH NongHyup's program ended in November last year, followed by Shinhan and KB Kookmin in December.
