Citibank Korea offers tempting voluntary retirement scheme to speed up retail biz sale

[Photo by Han Joo-hyung]

Citibank Korea, Citi Group¡¯s Korean subsidiary, has moved to expedite its exit from retail business in the country by offering tempting incentives for voluntary retirement to speed up sale stagnated by labor cost.

According to multiple sources from the banking industry on Monday, Citibank Korea specified a voluntary retirement scheme to its regular staff who have worked for the bank for three years or more and employees on unlimited labor contract.

Employees with more than five years left until their official retirement can pick up a special severance pay covering 90 percent of their monthly salary until retirement. Those with five years left till retirement age can be compensated with double the monthly salary. A severance check can be maximum 700 million won ($59,256).

Tuition subsidy of 10 million won will be offered up to two children plus career change support service and free medical checkups for the retirees and their spouses for three years.

Citibank Korea plans to propose the scheme at negotiation table with its labor union next week.

The package is the most generous voluntary retirement offering. Local banks generally cover up to 36 months of monthly pay as retirement pay.

Once the labor hurdle is removed through the early retirement scheme, Citibank Korea expects it can speed up sale process.

The bank originally planned to come up with a final exit plan after board approval in July but had to put back the announcement twice to after August and September because the candidates needed more time for due diligence. One of the pending issues that the bank and the potential buyers have not reached agreement was job security of the current employees at Citibank Korea.

The potential buyers are hoping to carry out negotiations on the sale of Citibank Korea¡¯s wealth management and credit card units after the lender first restructure the organization including staff streamlining.

The labor union plans to hold a two-day union briefing session on Wednesday and Thursday before negotiations with management.

[¨Ï Maeil Business Newspaper & mk.co.kr, All rights reserved]