Bank of Hope (CEO Kevin Kim), the largest Korean-American bank by assets, held a press conference at its Los Angeles headquarters on October 23 to announce a reorganization and plans to cut 13% of its workforce. Given that the bank had 1,460 employees as of September 30, that’s approximately 190 layoffs.
The bank also announced plans to close a total of nine branches that are either undersized or redundant in close proximity. This includes two branches in Los Angeles. Specific branch names and closure dates were not disclosed at the press conference.
Branch closures are subject to regulatory approval and require a 60-day notice to customers using the branches. The bank stated that it will make further announcements but has not yet asked the regulator about the branch closings.
The bank says the restructuring is aimed at improving profitability and enhancing expertise while realigning the workforce in areas of overlap due to the bank’s geographically dispersed organization. The bank expects the move to save $40 million in annualized costs. The layoffs are expected to cost $12 million in the fourth quarter of this year.
Furthermore, the bank has reorganized its operating structure into four major segments organized by product and business, departing from its previous regional divisions of West and East. The new structure comprises four segments: retail banking, commercial banking, corporate & institutional banking, and fee-based business. The fee-based business group will collaborate with the other three organizations to strengthen “relationship”-based business, marking a shift from the previous revenue structure that prioritized lending, the bank added.
Referring to the restructuring as a BTS (Built to Succeed) project, CEO Kevin Kim said, “The banking industry has faced a challenging business environment recently,” and added, “This reorganization is not a reaction to that but rather a means to improve structural efficiency. It does not imply that the bank’s business conditions have deteriorated.”
By centralizing and simplifying the organization and unifying business lines, the intention is to proactively prepare for a downturn while increasing efficiency and profitability.
Senior leadership changes have also been made. Initially, Chief Administrative Officer Daniel Kim will assume the role of Head of Retail Banking on an interim basis. The bank has identified and interviewed candidates for the role and plans to make an announcement in the coming days.
Eastern Regional President Kyu Kim was named Chief Commercial Banking Officer (CCBO). Jason Kim will serve as Chief Business Banking Officer (CBO), focusing on small business banking and SBA within Commercial Banking. Corporate Banking will continue to be led by Craig Campbell, who is currently the Chief Corporate Banking Officer.
The Commission-based Business division will be led by Chief Product Officer Michael Hayashida.
BY HOONSIK WOO [woo.hoonsik@koreadaily.com]
