ID :
196141
Wed, 07/20/2011 - 16:50
Auther :
Shortlink :
https://oananews.org//node/196141
The shortlink copeid
Moody's changes SC First Bank rating to 'negative'
SEOUL, July 20 (Yonhap) -- Moody's Investor Service on Wednesday downgraded its rating of SC First Bank from stable to negative, citing concerns over an ongoing labor strike.
Unionists at the South Korean unit of Standard Chartered Plc. have staged a walkout since June 27 to protest a management plan to adopt a performance-based salary system. It's the longest work stoppage in local banking history.
"The outlook change reflects our concerns over the potential impact on the bank's franchise if the current strike -- in which over 40 percent of its employees are participating -- continues for a few or several more weeks," said Choi Young-il, a vice president at the credit appraiser.
Choi said Moody's will assess the impact of the strike on the bank's franchise and how its relationship with the labor union will develop over the next few quarters, but added that the lender's liquidity condition has remained in a good position so far.
Close to 1 trillion won (US$947 million) in deposits is estimated to have been withdrawn from the country's sixth-largest lender since the start of the walkout, which prompted the financial watchdog to order SC First Bank to ramp up its liquidity management to minimize the impact of a bank run sparked by the prolonged strike.
SC First Bank is the first lender in South Korea to seek to introduce a performance-based pay system, sparking vehement opposition from its labor union, which claims the new pay scheme is merely aimed at reducing labor costs.
Out of 6,500 bank employees, half are union members, and the labor union estimates that about 2,900 of them have been staging a rally at a resort in Sokcho, 213 kilometers east of Seoul.
Standard Chartered took over Korea First Bank for 3.4 trillion won in April 2005 and renamed it SC First Bank in September the same year. It was the largest-ever takeover by the British banking giant.
Unionists at the South Korean unit of Standard Chartered Plc. have staged a walkout since June 27 to protest a management plan to adopt a performance-based salary system. It's the longest work stoppage in local banking history.
"The outlook change reflects our concerns over the potential impact on the bank's franchise if the current strike -- in which over 40 percent of its employees are participating -- continues for a few or several more weeks," said Choi Young-il, a vice president at the credit appraiser.
Choi said Moody's will assess the impact of the strike on the bank's franchise and how its relationship with the labor union will develop over the next few quarters, but added that the lender's liquidity condition has remained in a good position so far.
Close to 1 trillion won (US$947 million) in deposits is estimated to have been withdrawn from the country's sixth-largest lender since the start of the walkout, which prompted the financial watchdog to order SC First Bank to ramp up its liquidity management to minimize the impact of a bank run sparked by the prolonged strike.
SC First Bank is the first lender in South Korea to seek to introduce a performance-based pay system, sparking vehement opposition from its labor union, which claims the new pay scheme is merely aimed at reducing labor costs.
Out of 6,500 bank employees, half are union members, and the labor union estimates that about 2,900 of them have been staging a rally at a resort in Sokcho, 213 kilometers east of Seoul.
Standard Chartered took over Korea First Bank for 3.4 trillion won in April 2005 and renamed it SC First Bank in September the same year. It was the largest-ever takeover by the British banking giant.
