Unionized workers at Citibank Korea Inc. carried out the announced one-day walkout yesterday, demanding that the bank remove discriminatory practices against former employees of KorAm Bank.
The lender's labor union said 2,900 union members, about two-thirds of the bank's entire staff, joined the walkout. A third of its 253 nationwide branches were closed as a one-day strike by unionized employees disrupted operations.
The Financial Supervisory Service said 166 out of Citibank's 253 branches opened yesterday with 86 of them operating normally. The watchdog said it dispatched 64 inspectors to 32 key branches to minimize the impact of the strike on customers.
The U.S.-based financial giant Citigroup has been striving to cope with the uneasy relations with the labor union of KorAm Bank which it took over November last year. Both sides have held 17 rounds of negotiations since Aug. 16, but failed to narrow their differences.
Critics say foreign financial institutions have failed to localize their management style so far. The lack of understanding for the local market has left them mired in tough post-integration issues such as labor disputes, distracting them from business operations and marketing strategies.
Competition between foreign and domestic lenders is intensifying as the low interest rate environment has forced them to reduce operating costs. As a result of the government's draconian real estate policy measures, lenders also find it difficult to increase their assets as the demand for household loans has plunged.
To better compete with dominant local players such as Kookmin, Woori and Shinhan banks, Citi would need to improve its corporate image tarnished by frequent labor disputes, industry analysts say.
Citibank Korea Chief Executive Ha Yung-ku said on Monday that the bank has no layoff plans. The bank would focus on the cultural and emotional integration of the two organizations based on the combined systems and policies built for the past year, he added.
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