Korea Exchange Bank in emergency mode

Korea Exchange Bank is to initiate an emergency management system amid pressure by its sluggish business performance and deadlocked merger with Hana Bank.

In addition to their pledge to focus on sales activities, the bank president and executive members decided to return part of their wages as a show of determination.

During an executive workshop held on Saturday in Yongin, Gyeonggi Province, KEB president Kim Han-jo declared the launch of the emergency management system, officials said Sunday.

“(The bank’s executive board) will increase the total number of clients by 10 percent and the number of active accounts by 2 million units within this year,” Kim said in the resolution.

The president and board members pledged to return 20 percent and 10 percent of their wages, respectively, until their management targets are achieved.

“The key purpose (of the emergency system) was to raise crisis awareness of our current situation,” KEB officials said in a press release.

Earlier this month, the court ordered the suspension of the disputed KEB-Hana bank integration until June, upholding the KEB labor union’s claim that the process was coercive.

The bank faced further distress as its 2014 business performance came out as the lowest among local banks. It was also the only bank that saw a decrease in its yearly net profit last year.

KEB thus came under pressure to reach a deal with the labor union and take all means necessary to make progress in the drawn-out merger.

“KEB, with its lower-than-expected performance, may be outrun by Busan Bank or other competitors,” Hana Financial Group chairman Kim told reporters earlier this month.

“It is crucial that the merger take place in due time for KEB to improve its current situation.”

As the chairman added that he will not directly communicate with the KEB union for the time being, the task was placed on the KEB management.

By Bae Hyun-jung (tellme@heraldcorp.com)