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End in sight for Korean bank strike

End in sight for Korean bank strike

(South Korea) Workers at South Korea’s Chohung Bank have agreed to return to work after a four-day strike that seriously disrupted the state-owned bank’s operations. The stand-off came about after the South Korean government approved a deal to sell its 80 percent stake in the bank to Shinhan Financial Group – a decision that saw some 6000 unionised workers strike over fears it would lead to job losses.

After protracted stop-start talks over the past few days, the unions and government and bank representatives reached a compromise that guarantees no job losses for the next three years.

However, a task force will look at consolidating the firms two years later. Chohung will also retain a level of autonomy by keeping its name and appointing a chief executive officer from within the firm.

The end of the saga is a relief for the Korean government, and in particular the Bank of Korea, which was forced to inject two trillion won by repo into the bank to plug the gap left by thousands of customer withdrawals.

The sale of Chohung is part of the country’s plan to sell off banks it was forced to nationalise as a result of the Asian financial crisis of 1997/98.

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