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In the nation's financial sector. Korean banks are expected to initiate restructuring
programs. that could cut bankers' salaries. and in some cases even cost them their jobs.
This comes. as Korea's major banks have seen their earnings shrink in recent months. in
the face of low interest rates. and looming credit risks. involving the nation's large
companies. Arirang's Hwang Ji-hye reports. Local banks
in Korea have recently seen their earnings drop, which could prompt them to take action.
The net profit of seven major local banks in Korea for the second quarter this year
is estimated at around one-and-a-half billion U.S. dollars,. according to financial information
provider FnGuide. That marks a huge drop from the same quarter
last year. and the previous quarter this year. The decline is due in part to an interest
rate that's been kept low for months, shrinking the banks' interest income,. and the credit
risks large conglomerates like STX Group are facing.
Some affiliates of the shipbuilding company have been undergoing a creditor-led restructuring
program. In times like these, the newly appointed presidents
of two local banks have emphasized the importance of restructuring programs.
"The low growth and low interest rate policy has been in place for a long period of time,
prompting concerns about profitability and financial health. We have to overcome this
crisis."
"We need to become a small but strong and efficient company. This is more than empty
words for us. It should be a challenge that we must overcome."
KB Financial Group and Hana Bank are planning to significantly cut the salaries of their
board members. They have yet to determine the exact amount
of the cut,. but many local banks are expected to follow in their footsteps.
The Financial Supervisory Service has also ordered the banks to close branches that have
posted losses. But if all these measures fail to help the
banks improve their performance,,. experts say. the banks may have to start cutting staff.
Hwang Ji-hye, Arirang News.