StanChart to close 43 Korea branches amidst strike

Nearly half of the lenders’ 6,500 employees here had a walkout to protest against a proposed incentive-based compensation system.

Standard Chartered Plc's Korean unit said it would temporarily close about a tenth of its branches as the worst labor dispute involving a foreign bank in the nation in more than five years enters into its third week.

Standard Chartered First Bank Korea Ltd. is closing 43 branches out of a total 392 in the country from Monday, the Seoul-based lender said in a statement on its website. About half of its 6,500 employees staged a walkout from June 27 to protest against a proposed incentive-based compensation system.

The strike comes as London-based Standard Chartered, which entered South Korea in 2005, struggles to attract more borrowers in Asia's fourth-largest economy. South Korea accounted for about 11 percent of Standard Chartered's $16 billion in revenue last year, according to data compiled by Bloomberg.

"The differences between the company and us aren't narrowing," union spokesman Bae Kwang Jin said by telephone on Monday. Workers will continue striking until the company withdraws the plan, Bae said. The new salary structure would create excessive competition, the union has said.

The bank will continue talks with the workers for "smooth resolution" of the dispute and will try to minimize inconvenience for customers, Joo Hee Sun, a spokeswoman for Standard Chartered, said by telephone.

Citigroup Inc.'s South Korean banking unit shut about a third of its 253 branches in December 2005 due to a strike following the acquisition of a local lender.

View the full story in San Francisco Chronicle.