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Bankers Step Up to Share Financial Pain

Posted October. 23, 2008 09:46,   


In the wake of the government’s announcement to inject liquidity into the banking sector, domestic banks announced yesterday that they will cut executive salaries to share the financial pain and help the flagging economy.

The heads of 18 lenders met at the Bankers’ Association building in central Seoul, and issued a joint statement expressing their determination to do their share in stabilizing the financial market.

“We feel deeply regretful and responsible for the situation. To share the pain with the public, we will take voluntary pay cuts and encourage our employees to voluntarily freeze their wages. We will also seek measures to support financially strapped companies,” said the statement.

They also promised to try to roll over loans of small and medium-size companies set to mature at the end of June next year and reduce mortgage interest rates.

Kookmin Bank, Industrial Bank of Korea and Hana Bank have announced executive pay cuts of five to 15 percent. Woori Bank and the National Agricultural Cooperative Federation will cut pay 10 percent for their executives and consolidate branches to reduce costs.

At the meeting were Korea Federation of Banks Chairman Yoo Ji-chang and 18 bank CEOs, including Korea Development Bank Gov. Min Euoo-sung; Industrial Bank of Korea President Yun Yong-ro; Kookmin Bank President Kang Chung-won; Woori Bank President Lee Jong-hwi; and Hana Bank President Kim Jung-tae.

In a separate move, the Korean Financial Industry Union said in a statement, “The pay cut plan for executives is a condescending move and the epitome of hypocrisy. Bank heads and executives must disclose their stock options and bonuses first.”

crystal@donga.com tesomiom@donga.com