Banks seen as favoring dividends over job security

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Banks seen as favoring dividends over job security

Three in 10 employees at banks and nonlife insurers are irregular workers, and the proportion is even higher at foreign banks, the Democratic United Party (DUP) said yesterday.

Some 26.2 percent of employees at nonlife insurers, or 7,454 of 28,485 staff, are irregular workers, meaning they make up the largest proportion in the financial sector followed by banks, futures firms, brokerages and life insurers, according to a document the Financial Supervisory Service (FSS) submitted to DUP Representative Kim Gi-jun.

The figures are based on the data that banks and other financial industries submitted to the FSS for 2011.

Kim suggested the real share of irregular workers in the financial sector could be much higher as the report did not include employees staffing call centers?at banks and brokerage firms, most of whom work for subcontractors.

“If we consider these factors, the actual proportion of irregular workers at local banks would be over 30 percent rather than 26 percent,” he said.

Among the seven major banks in Korea, Citibank and Standard Chartered Korea had the biggest share of contract workers, who usually work on temporary contracts for lower wages than full-time employees.

Some 40.7 percent of Citibank’s 6,094 employees are irregular workers, compared to 33 percent at Standard Chartered Korea. The two foreign banks have taken flak from the public for paying out excessively high dividends to their shareholders without making enough social contributions in 2011.

Last year, Standard Chartered paid 33 percent of its revenue as dividends, while Citibank paid 19.8 percent.?Foreign shareholders control 100 percent stakes in both. Critics say that if they had paid lower dividends, they could have hired more regular workers to enhance job security.

By Kim Mi-ju []

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