Woori, KB seek to heal internal divides, eliminate favors for retirees

By Yi Whan-woo

Major commercial banks are pushing to heal internal divides through teambuilding gatherings and other relevant activities, as they continue to speed up internal regulatory overhauls, bank officials said Monday.

The banks are also seeking to eliminate favors given to businesses run by their former employees, as such favors were often behind financial irregularities.

Woori Bank has widely been known for its internal divide, which persisted following a merger between Commercial Bank of Korea and Hanil Bank in 1999.

The merger was crucial for the company to grow as the country’s fourth-largest lender. But internally, it deepened a factional conflict between those who originally worked for Commercial Bank of Korea and those from Hanil Bank.

The conflict has been especially tense during the appointment processes for new leaders of Woori Bank and other affiliates.

Against this backdrop, the company in January deleted decades-old data regarding their employees, both former and current, on where they worked before Woori Bank was created.

“It took 26 years to delete the data, and the action taken by the company is seen as a crucial step toward internal reconciliation and harmony,” a PR official of Woori Bank said.

In January, the company hosted a meeting at which the leaders of the groups of former employees of Commercial Bank of Korea and Hanil Bank agreed to merge their two factions.

In addition, Woori Bank held a team-building gathering for employees who entered the company after the 1999 merger to ensure solidarity.

Banks have become increasingly cautious about signing business deals with worker factions as well as business entities run by retired co-workers or superiors because this could undermine transparency and objectiveness.

Industry officials said banks are benchmarking state-run lenders, such as Korea Development Bank and the Industrial Bank of Korea, to sever unfair business ties with such factions in the coming years.

All four major commercial banks, including KB Kookmin, Shinhan and Hana — have been favoring companies that were created through investments by groups of their respective former employees.

Since 2020, KB Kookmin Bank signed deals amounting to 23.64 billion won ($16.57 million) with a company invested by more than 4,180 of its former employees. The projects involved hiring security guards, phone banking assistants and other positions that are “closely connected with daily business,” according to industry officials.

In the case of Hana, a company owned by a group of its former employees posted steep sales growth — from 39.8 billion won in 2019 to 52.1 billion won in 2022 and 67.8 billion won in 2023. The growth was made possible as it increasingly clinched projects from the bank.