Major foreign banks have actively increased staff at their operations in South Korea to offset growing uncertainty in their business in China, grappling with a growth slowdown, given the relatively vibrant financial market of Asia’s fourth-largest economy.
According to the Financial Supervisory Service (FSS) on Wednesday, total employees at the Korean operations of 35 foreign banks stood at 3,010 as of the end of 2023, up 67 in a year and 134 in two years.
The number of employees at their Korean operations lately started bouncing back for the first time since 2017 when foreign banks' combined employee numbers reached 3,039 and they started streamlining their Korean businesses.
Payroll employees of the Korean operations of JP Morgan Chase & Co., the first foreign bank to open a Korean branch, reached 200 as of end-2023, doubling from 2010 when its Korean employees exceeded 100 for the first time.
French multinational bank BNP Paribas, which first tapped the Korean financial market in 1976, added 13 employees last year, elevating the number of employees at its Korean office to its largest-ever 142.
“Given the very conservative culture of the banking industry, their aggressive recruitment is a rare move,” said an official in the banking industry.
Industry observers attribute the recent trend to the growing risk in China’s financial sector taking a hit from the challenges facing the world’s No. 2 economy amid the ongoing real estate crisis, leading foreign banks to look beyond China to find better deals elsewhere, like in Korea.
“We recently hired people for risk management and compliance,” said an official from a foreign bank in Seoul. “Sales and risk management had been considered a one-person job at foreign banks’ Korean branches operated by only a small team. By separating the two tasks, the bank is set to bolster its sales activity in Korea.”
(Graphics by Sunny Park) RECORD PROFITS
Foreign banks saw record earnings in the relatively robust Korean financial market last year, rationalizing their decision to expand their Korean businesses.
Excluding Credit Suisse suffering massive losses, the total net profit of foreign banks’ Korean operations hit 1.56 trillion won ($1.1 billion) in 2023, up 6% from the prior year.
It was the highest-ever result since the FSS started announcing related data.
Of all, the Korean operations of HSBC Holdings plc reaped the largest 263.4 billion won in net profit last year, followed by Japan’s MUFG Mitsubishi UFJ Bank with 141.1 billion won.
China Construction Bank and Bank of America also joined the list of top earners in Korea last year.
A financial industry official projected that foreign banks will continue to expand their Korean business barring a major adverse event in the global economy.
Reflecting this trend, the Korean financial regulators should amend regulations and improve infrastructure to invigorate the country’s financial industry, the official added.
The world's largest cooperative financial institution Crédit Agricole Group, Development Bank of Singapore, Dutch bank ING and China Construction Bank also bumped up their Seoul staff to record-high levels last year.
Of the total 35 foreign banks operating in Korea, only six banks, including MUFG, Yamaguchi Bank and loss-making Credit Suisse, cut Korean payrolls last year.
