StanChart Korean unit chief hopes for quick end to strike

SEOUL, July 25 (Reuters) - The chief of Standard Chartered's Korean unit said he hoped for a resolution this week to an ongoing labor dispute which has forced the bank to shut some branches and become the longest-running strike in the local banking sector.

Richard Hill, chief executive of SC First Bank Korea, expressed his "deepest regret" at a press conference on Monday for the inconvenience the action had caused customers and stakeholders, bowing for several seconds in a traditional gesture of apology.

The bank has given in to a key union demand to discuss a planned performance-based salary scheme, backing away from plans to kickstart the scheme next year.

But talks broke off over other issues such as early retirement and measures for dealing with underperforming employees.

"I think the union will know the best thing to do is to come back to the negotiation table," Hill said.

Hill's optimistic comments came as some union members have stepped up their struggle, flying to London to protest in front of Standard Chartered headquarters and meet group CEO Peter Sands.

"The clear message (from the head office) will be to go back to Korea and talk," Hill added.

The industrial action, which has entered its fifth week, involves around 2,700 employees and has forced the bank to suspend operations at 42 branches.

Hill said the bank had no plans to close additional branches.

Standard Chartered's $3.3 billion investment in South Korea in 2005, its biggest-ever acquisition, made the country one of the Asia-focused bank's key markets but it has faced a highly competitive environment crammed with homegrown players.

Korea is the second biggest-consumer banking market for Standard Chartered by revenue but the operation generated just 6 percent of the bank's 2010 pre tax profit.

Hill reiterated the bank's determination to switch from the current seniority-based pay scheme to a merit-based one, which would make SC First Bank the first Korean bank to adopt such a system.

"It is important to be able to reward our staff according to the bank's growth," he said. (Reporting by Ju-min Park; Editing by Jonathan Hopfner)