Job loss in finance industry hits 5-year high

As low inflation and growth pummeled profit, South Korea's finance industry has shed the largest number of jobs in five years, a statistics agency said Wednesday.

There were 840,000 jobs on a monthly average in the local finance and insurance sectors in the January-November period, down 2.8 percent from the same period a year earlier, according to Statistics Korea.

The figure translates to a loss of 24,000 jobs over the one-year period, marking the steepest fall since 55,000 jobs were erased off the market in 2009 in the face of the global financial crisis.

The portion of finance industry jobs in the local job market also fell to the lowest level in more than five years, accounting for 3.13 percent of all jobs in November, the smallest since 3.12 percent in July 2009.

Job losses reflect the troubles of the finance industry, which has not been churning out the needed profit as interest rates run low and stock trading remains tepid.

The industry that generated 6.5 percent of the country's gross domestic product in 2008 saw the share fall to 6.4 percent in 2011 and 5.5 percent in 2012. The figure further slipped to 5.4 percent in the first three quarters of 2014, according the agency's data.

In efforts to cut costs, financial companies have been downsizing their organization and laying off employees. Small brokerage houses that have failed to post gains were put up for sale but have not found buyers.

A recent survey by the Korea Development Institute showed that 70.6 percent of CEOs at 34 brokerage houses said only 20-40 securities firms out of more than 60 in the industry will remain in business in the next few years.

Banks have also been moving to shutter their brick-and-mortar branches and shift to digital banking to slim down overhead costs.

Some 270 branches were closed down last year, while major lenders such as Kookmin, Nonghyup and Shinhan plan to close down more branches this year.

Life insurers have laid off their employees in efforts to stay afloat, with big players Samsung, Hanwha and Kyobo as well as smaller players such as Mirae Asset and ING taking part in the move. (Yonhap)