Business down, pay up

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Business down, pay up

Amid controversy over high wages at local banks despite falling profits, a report showed yesterday that the average yearly pay of regular bank employees increased more than 20 percent over the past three years.

According to the Financial Consumer Agency yesterday, the average annual wage of regular employees at 11 local banks was 102 million won ($91,621) last year, up 23 percent from 83 million won in 2010. The average annual salary of all employees, including irregular workers, also jumped 18 percent from 71 million won to 84 million won over the same period.

Among banks, Hana Bank was found to have increased wages the most last year compared to two years ago. The consumer agency said wages of Hana Bank employees, including regular and irregular workers, jumped 44.9 percent from 2010 to 2012. Citibank followed with a 31.7 percent increase, Busan Bank at 26.7 percent and Woori Bank at 20.5 percent.

“Local banks have increased wages by two to four times more than the 5 percent average [annual] wage hike [at companies with more than 100 employees] stated by the labor ministry,” the agency said in a statement.

The smallest wage increase over the same period was seen at the Industrial Bank of Korea with 1.45 percent, followed by the Korea Development Bank at 4.4 percent and Jeonbuk Bank at 6.75 percent.

Meanwhile, the consumer agency’s report showed local banks weren’t as aggressive in hiring new employees as wages increased. Also, banks hired more irregular workers than regular ones.

According to the agency, data provided by the Financial Supervisory Service showed that 11 banks hired 639 regular employees and 2,673 irregular employees last year.

“The figure shows the quality of banks’ hiring was low,” said an official from the agency. “At the same time, their spending on regular employees increased significantly.”

Banks have been criticized for increasing the wages of their employees despite deteriorating business. Last month, FSS data showed that local banks’ net profit in the second quarter reached 1.1 trillion won, down 48 percent from the previous year’s 2.1 trillion won.

“The falling profit at banks comes as the economy at home and abroad has remained in a low-growth trend while banks have piled up bad loans with local companies’ businesses remaining weak,” the official said.

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