Financial industry union set to strike

Tens of thousands of South Korean financial workers are expected to go on strike for the first time in 14 years this week to protest what they call government interference in the local financial sector, dismissing repeated appeals by authorities to cancel the walkout.

"We expect some 50,000 of around 100,000 union members at local banks and state-run financial firms to take part in the strike," Lee Ji-seop, a public relations official of the umbrella labor group Korea Finance Industry Union, said by phone Tuesday. 

"While there were talks with the president and other senior government officials, there have been no changes in circumstances," he said.

Attempts by the government, including President Park Geun-hye and Finance Minister Choi Kyung-hwan, to prevent the strike have been in vain with no tangible agreement reached.

The union was to outline the details of its one-day strike scheduled for Wednesday at a press conference later in the day.

Financial workers last week voted in favor of the strike with an overwhelming 91 percent approval, reflecting disenchantment with the authorities' handling of recent controversial issues.

The umbrella union has taken issue with the financial watchdog's weaker-than-expected punishment of the management of KB Financial Group, which had been mired in irregularities stemming from inner strife. It is also protesting the early integration of Hana Financial Group affiliates Hana Bank and Korea Exchange Bank, which is strongly opposed by the latter's union.

Under the supervision of then-Financial Services Commission Chairman Kim Seok-dong, KEB's labor union had signed a post-takeover deal with Hana Financial that guarantees KEB's independence until 2017. Hana Financial, however, recently announced the beginning of the official process to integrate the two banks, citing the need to maximize synergy amid growing industry competition.

The union is also addressing concerns of its public sector members. State-run financial firms have recently been compelled to slim down benefits under a government initiative aimed at "normalizing" these institutions.

The strike comes at a time when the financial industry is battling sagging profits and market saturation.

Low interest rates and regulations on financial service fees have eroded profits at local lenders. Growing demand for mobile banking has also weakened demand for face-to-face channels.

Many banks have shut brick-and-mortar branches and shifted to digital banking. Some lenders have also slimmed down their workforce to cut costs.

According to industry data, the number of branches operated by nine local banks, including foreign players such as Standard Chartered and Citibank, reached 5,101 as of end-July, down 5 percent from 5,370 as of end-June last year.

The on-year change marks the biggest fall since the Asian financial crisis when the number of bank branches slumped 12.8 percent on massive restructurings. (Yonhap)