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Banks, insurance firms shed employees as profits drop

All News 11:17 October 03, 2016

SEOUL, Oct. 3 (Yonhap) -- South Korea's financial sector has been shedding employees as banks and insurance companies grapple with falling profitability and the decreased need for bank branches thanks to convenient online banking systems, data showed Monday.

A total of 132,170 were working for banks as of end-June, the lowest number in nearly 10 years, the Financial Supervisory Service (FSS) said.

The number of bankers rose to 139,840 in 2008, but it has since declined, as banks have gradually reduced the number of both their branches and staff in the wake of the widespread use of online and mobile banking over the past years, the financial watchdog said.

Banks, insurance firms shed employees as profits drop - 1

Banks reduced 1,450 employees in the first six months of this year, recruiting fewer staff and encouraging senior staff members to opt for early retirement plans with extra severance pay. The number of commercial bank branches slipped to 5,297 in June, cutting 115 from a year earlier, the FSS said.

Insurance companies have also kept streamlining their businesses.

A total of 59,444 employees were hired in the insurance sector in June, the lowest number in five years, as major industry players have suffered worsening profitability stemming from low interest rates.

"As the low interest rates are expected to last for a while, more insurance firms could tighten their belts down the road," an industry official said.

In contrast, securities firms reported 37,358 employees in June, newly hiring 2,043 from a year earlier, the FSS said.

The hike, however, is not a result of brisk business, because it came after brokerages firms carried out massive layoffs in 2013-14 during which they dismissed nearly 6,000 employees, it noted.


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