ID :
34065
Fri, 12/05/2008 - 10:36
Auther :
Shortlink :
https://www.oananews.org//node/34065
The shortlink copeid
S. Korean banks set to cut jobs amid turmoil
SEOUL, Dec. 5 (Yonhap) -- South Korea's top lender Kookmin Bank said Friday it is
mulling reducing its headcount through a voluntary retirement scheme, which
analysts say may set off a chain reaction of job cuts by other industry players.
The U.S.-sparked global credit squeeze has dealt a harsh blow to the local
banking sector, sending lenders scrambling to secure dollars in order to repay
maturing debts, roll them over or meet other needs.
"We are considering implementing a voluntary retirement program, but no specifics
have been decided yet," an official at Kookmin Bank said.
Kookmin's move would mark the first early retirement plan among local lenders in
the wake of the global credit crunch triggered by the collapse of U.S. investment
banking behemoth Lehman Brothers Holdings Inc.
Some foreign players have already implemented voluntary retirement programs or
plan to do so. SC First Bank Korea saw 190 employees leave the lender last month
and Citibank Korea Inc., the South Korean unit of the U.S.-based Citigroup, plans
to accept voluntary retirement applications soon.
Domestic banks are making efforts to revamp their operations. Shinhan Bank, the
country's No. 3 lender, plans to streamline operations at its headquarters and
consolidate its branches. South Korea's second-largest bank, Woori Bank, also
plans to decrease its credit card and investment banking units.
The move comes as South Korean lenders have been suffering from a dollar shortage
amid a slowing economy and a credit crunch. Banks have been increasingly
reluctant to extend loans, particularly to smaller firms, as fears have risen
over deteriorating profits and financial soundness.
In the aftermath of the 1997-98 Asian financial crisis, the local banking sector
underwent a painful restructuring process led by the government, which injected
over 86.9 trillion won (US$58.3 billion) of public funds into the industry.
A series of consolidations in the banking sector reduced the number of commercial
lenders to 18 from 33 prior to the crisis.
South Korea's top financial regulator said last week now is not the time for the
government to pour public funds into local banks, as the difficulties they face
do not warrant an overhaul.
Local banks have started selling subordinated bonds to bolster their falling
capital adequacy ratio, a key barometer of financial soundness.
sooyeon@yna.co.kr
(END)
mulling reducing its headcount through a voluntary retirement scheme, which
analysts say may set off a chain reaction of job cuts by other industry players.
The U.S.-sparked global credit squeeze has dealt a harsh blow to the local
banking sector, sending lenders scrambling to secure dollars in order to repay
maturing debts, roll them over or meet other needs.
"We are considering implementing a voluntary retirement program, but no specifics
have been decided yet," an official at Kookmin Bank said.
Kookmin's move would mark the first early retirement plan among local lenders in
the wake of the global credit crunch triggered by the collapse of U.S. investment
banking behemoth Lehman Brothers Holdings Inc.
Some foreign players have already implemented voluntary retirement programs or
plan to do so. SC First Bank Korea saw 190 employees leave the lender last month
and Citibank Korea Inc., the South Korean unit of the U.S.-based Citigroup, plans
to accept voluntary retirement applications soon.
Domestic banks are making efforts to revamp their operations. Shinhan Bank, the
country's No. 3 lender, plans to streamline operations at its headquarters and
consolidate its branches. South Korea's second-largest bank, Woori Bank, also
plans to decrease its credit card and investment banking units.
The move comes as South Korean lenders have been suffering from a dollar shortage
amid a slowing economy and a credit crunch. Banks have been increasingly
reluctant to extend loans, particularly to smaller firms, as fears have risen
over deteriorating profits and financial soundness.
In the aftermath of the 1997-98 Asian financial crisis, the local banking sector
underwent a painful restructuring process led by the government, which injected
over 86.9 trillion won (US$58.3 billion) of public funds into the industry.
A series of consolidations in the banking sector reduced the number of commercial
lenders to 18 from 33 prior to the crisis.
South Korea's top financial regulator said last week now is not the time for the
government to pour public funds into local banks, as the difficulties they face
do not warrant an overhaul.
Local banks have started selling subordinated bonds to bolster their falling
capital adequacy ratio, a key barometer of financial soundness.
sooyeon@yna.co.kr
(END)
