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[News Focus] KB Kookmin Bank’s fate this year to depend on strike scenario

Tension prevailed at KB Kookmin Bank on Monday in the face of an imminent general strike that may dampen the company’s growth momentum and possibly menace its recently recovered position as the nation’s leading commercial bank.

The bank’s labor union set out to stage a nationwide strike on Tuesday, as last-minute negotiations fell through on Monday afternoon amid prolonged conflict over the wage system. The walkout -- the first one in 19 years -- is expected to cripple operations at more than 1,050 bank branches across the country.

“I stand here with a heavy heart, a day before the general strike,” said CEO Hur Yin in a statement released shortly after failing to reach a consensus with labor union chief Park Hong-bae.

“I still believe that strike is not the answer to our incumbent conflicts.”

The latest labor-management meeting was a follow-up to an overnight bargaining session, according to officials.

Unionists said earlier that they intend to hold a maximum of four additional strikes during the upcoming years -- including one from Jan. 30 to Feb. 1, shortly ahead of the Lunar New Year holiday in early February.

“All mobile and internet banking systems will operate as usual, and offline visitors will be guided to nearby hub branches in case of function deadlocks,” said a bank representative.

Notices were also put up in all offline branches Monday, warning customers of a possible strike and related consequences.

But as the bank neither sent out mobile message nor posted an advanced notice on its webpage, concerns mounted that bank users may face chaos on the day of the strike.

A notice is posted at an offline branch of KB Kookmin Bank on Monday, warning customers of a possible general strike slated for the following day. (Yonhap)
A notice is posted at an offline branch of KB Kookmin Bank on Monday, warning customers of a possible general strike slated for the following day. (Yonhap)

KB Kookmin Bank is currently South Korea’s No. 1 bank in terms of profits, having recorded 2.08 trillion won ($1.86 billion) in accumulated net profits as of the third quarter of last year. Earlier, it outran former champion Shinhan Bank and reclaiming its previous title as the country’s leading bank.

“We have regained our pride as leading bank and should not let our customers down,” Hur said.

The bank is also the largest lender here, accounting for 11.5 trillion won of the nation’s household debt as of the end of last year.

At the heart of the labor-management dispute is the workers’ complaint against what they saw as the bank’s frugal payment of bonuses that fell short of favorable business outcomes.

Unionists especially pointed out that Shinhan and NH Nonghyup Bank have paid out 300 percent in bonus, lashing back at the bank’s earlier suggestion of 200 percent.

“The bank has recently agreeed on a 300 percent bonus, which includes overtime pay,” Hur said, dismissing the union’s protest.

The two sides also remained at odds over the rules concerning the introduction of the wage peak system.

While the union wanted the starting age for the wage peak system to be delayed by a year to 56, the management insisted that the priority was to unify the rules for senior and junior employees. Under the current rules, manager-level employees are to face their wage peak period 5.5 months sooner than rank-and-file employees.

Another controversy was the pay-band system, which freezes the base salary of employees who have failed to attain a promotion within a designated period of time. The disputed system has been in place for new employees since 2014.

The management has been calling for the expansion of the system to all employees, but unionists say it should be abolished altogether.

“The purpose of the pay-band system was never to cut down the salary of employees,” Hur said.

“It was a minimum action to control those who demotivate others through lax work attitude. Most of the employees will not be affected.”

Unionists, however, argued that the pay-band system will practically act as a salary ceiling for those who fail to gain a promotion amid the personnel congestion triggered by the reduction of offline branches.

By Bae Hyun-jung (