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RETAIL BANKING | Tony Chua, Korea
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StanChart Korea unit employees on strike

The protest of about 3,000 union members against a scheme determining compensation based on individual performance comes as the lender struggles to compete with local rivals.

Workers at Standard Chartered Plc (STAN)’s South Korean banking unit plan to go on strike on Monday in the worst labor dispute involving foreign banks in the Asian nation in more than five years.

About half the employees at Seoul-based Standard Chartered First Bank Korea Ltd. will protest against a plan that would determine compensation based on individual performance, union spokesman Bae Kwang Jin said by telephone in Seoul.

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. The local unit is also awaiting a decision on the penalty it may need to pay after Korean regulators said it violated rules barring lenders from trading in platinum.

“Management appears to want to boost the bank’s efficiency after failing to expand market share,” said Hwang Seok Kyu, a banking analyst at Seoul-based Kyobo Securities Co. “If the strike drags on, that would be a bigger setback for the bank. It’s already not faring well in the fierce competition among Korean lenders.”

The bank will operate all branches with the staff not participating in the strike, trying to ensure basic services won’t be affected, Lee Ji Won, a Seoul-based spokeswoman at SC First Bank, said by telephone on Monday.

About 3,000 union members employed by the local unit plan to walk off the job “indefinitely,” Bae said on June 16. SC First Bank employed about 6,500 people and had 409 branches nationwide as of March 31, according to a regulatory filing.

View the full story in Bloomberg

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