The status of Korea's state-run banks, once regarded as "dream workplaces," is being shaken. As turnover rates climb rapidly, a salary reversal with commercial banks and concerns over regional relocation are accelerating employee departures.
KDB Male Turnover Triples Since 2021
The male turnover rate at Korea Development Bank (KDB) reached 9.0 percent last year, according to the public institution management information system ALIO on Monday.
The figure has tripled in four years from 3.0 percent in 2021. Over the same period, the female turnover rate edged up only slightly, from 1.5 percent to 1.6 percent.
A similar pattern was observed at Industrial Bank of Korea (IBK). The male turnover rate rose from 1.7 percent in 2021 to 6.2 percent last year, while the female rate increased marginally from 1.0 percent to 1.3 percent.
The Export-Import Bank of Korea was no exception. Its male turnover rate rose from 3.2 percent to 4.1 percent, and the female rate climbed from 0.7 percent to 2.6 percent. These figures include retirees at the mandatory retirement age as well as voluntary departures.
Average tenure has also declined noticeably. The average tenure of regular KDB employees fell by 14 months, from 199 months in 2021 to 185 months last year. Export-Import Bank's average tenure shortened from 155 months to 151 months, while IBK's figure dropped from 209 months to 195 months.
Salary Reversal and Relocation Concerns Create Dual Pressure
Industry officials point to the widening salary gap between state-run and commercial banks as the primary cause.
In the past, average salaries at state-run banks exceeded those at commercial banks, but the gap narrowed rapidly after 2019 and has since reversed.
The average salary for regular employees at the three state-run banks—KDB, IBK, and the Export-Import Bank—stood at 115.94 million won last year. That is about 4 million won lower than the approximately 120 million won average at major commercial banks.
The gap is particularly pronounced at IBK. Its average total compensation for employees last year was 97 million won, about 23 million won lower than commercial banks.
Another structural limitation cited is that while state-run banks compete for talent in the same financial sector job market as commercial banks, their status as public institutions subjects them to a total wage bill ceiling that caps salary increases.
The possibility of regional relocation is another source of anxiety. Discussions on relocating state-run banks have recently reignited, heightening internal unease. When KDB's proposed relocation to Busan was pushed forward in 2023, a wave of departures, particularly among younger employees, was observed.
The Korean Financial Industry Union recently stated that "finance is an industry where network effects and economies of scale are maximized, and the concentration of capital and information ensures innovation and efficiency," making clear its opposition to the regional relocation of state-run banks.
