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Survey on Staff View of the Changed Bank

Survey on Staff View of the Changed Bank. Aug. 2005. Table of Content. Ch 1. Survey Overview.

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Survey on Staff View of the Changed Bank

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  1. Survey on Staff View of the Changed Bank Aug. 2005

  2. Table of Content Ch 1.Survey Overview IV. Feedback and Satisfaction Level on the Reorganization 27 1. Satisfaction Level on Reorganization 27 2. Satisfaction Level on Biz Process at Reshuffled HO Dept. 28 3. Perception on Reorganization : Dept. Heads Mostly from Legacy Citi Staff 29 4. Beneficiaries & Victims of Integration 30 V. Satisfaction Level on the New IPA System 31 1. Satisfaction Level About New IPA System 31 2. New IPA System and Concerns of Deteriorating Work Environment 35 3. Drawbacks of New IPA System 36 4. Proper Timing of IPA System Integration 37 VI. Satisfaction Level on the Title Integration Policy 38 1. Satisfaction Level on the Title Integration Policy 38 2. Problems of The Title Integration Plan 40 3. Considerations of the Title Integration 41 VII. Evaluation of Citigroup Management 421. Evaluation of Citigroup Five Point Plan(PPP) 42 2. Citigroup Aspires to Be Known As 45 3. Wax Removal Project 48 4. Matters with Regard to the Management and Executives 51 VIII. Opinion on Personnel Management 56 1. Job Rotation 56 2. Workload and Overtime Working System 57 3. External Mid-Career 59 4. Training System 60 5. Intentions of Leaving CKI 62 6. Honorary Retirement and Future Desired Term of Service 63 I. Purpose of Survey 3II. Major Points of Survey 4 III. Survey Design 5 IV. Characteristics of Respondents 7 Ch 2. Analysis on Survey Result I. Major Indicators of Ex KorAm Staff Sentiment to the Changed Bank 1. Major Indicators 9 2. Diagram of Staff Satisfaction about the Integrated CKI 10 II. Opinion on Competitiveness of CKI 11 1. Opinion on the CKI Chances for Success in the Local Market 11 2. Opinion on the CKI Chances for Success 12 3. What is Good After the Bank Integration 13 4. Improvement vs. Deterioration of CKI Competitiveness After Integration 14 5. Feedback on Migration to Citigroup IT System 15 6. Ex KorAm Customer Reaction to the Integration of the Bank 16 7. Satisfaction About Campaign and Promotion After Integration 18 8. Workload Before Vs. After the Integration 20 9. Feedback on Citibank Matrix Organization 21 10. Labor Union Opinion on CKI Independent Management 22 11. Urgent Challenges of CKI 23 III. Opinion on Current Personnel Policy & Satisfaction Level 24 1. Level of Satisfaction with Current Personnel Policy 24 2. Fair Criteria for Maximization of Synergy Effects 26 Chapter 3. Conclusion

  3. Chapter1 Survey Overview

  4. I. Purpose of Survey • The survey is aimed at finding out how each regular ex KorAm staff feel about the integration of KorAm and Citi bank and the resulting change to the bank policy and providing basic information that the management can refer to reflect staff opinions and sentiment in the future operation of the bank. Gallup Information to be used • To shape opinions on current financial environment and change • To reflect staff opinion/sentiment in the management activity • To suggest appropriate future direction for the bank Target information • Staff opinion on CKI competitiveness • Staff satisfaction about HR policy • Staff opinion on current reorganization • Staff satisfaction about new individual performance appraisal system • Satisfaction about title integration policy • Satisfaction about the bank management • Satisfaction about personnel management

  5. II. Major Points of Survey CKI competitiveness • The survey looks at the level of satisfaction about the following subjects: • Customer reaction • Satisfaction level about campaign/promotion • Change in workload after integration • Feedback on citibank matrix organization • Overall satisfaction • Chances for success in local financial market • What is good and bad after the bank integration • Feedback on the integrated IT system HR policy • Satisfaction about the promotion policy after integration • Opinion on the cancellation of promotion conducted after integration • Percentage of promotion for maximum synergy effect • Standard for fair promotion Corporate reorganization • Opinion on new staffing according to reorganization • Satisfaction about handling of business by HO units • Opinion on fairness of reorganization • Benefited the most vs. suffered the most due to the integration Individual performance appraisal • Satisfaction level about the individual performance appraisal (IPA) system integration proposal • Adverse impact of the new IPA system on working condition • The most serious issue with new IPA system • Appropriate timing for IPA system integration Title integration policy • Satisfaction about title integration proposal • Issues with title integration • Matters to be considered for title integration Management activity • Staff awareness and implementation of Citigroup five point plan • Citigroup five point plan with the best progress vs. the worst • Awareness/implementation of Our Shared Responsibility • & The most important responsibility out of three responsibilities • Staff awareness/necessity of Wax Removal Project • The most serious issue with the management/evaluation on executives Personnel management • Appropriate way for personnel rotation shift & satisfaction about overtime work and workload • Opinions on plan for mid career professionals recruitment • Feedback on current trainings

  6. III. Survey Design 1. Sample Design Type Content Subject Regular ex KorAm staff Sample size 1,434 persons [Copies of survey distributed: 2,000 → Response rate: 71.7%] Maximum acceptable error 95% confidence level +/ - 1.87% Sampling method Purposive quota sampling based on location/job/level Sample collection Self-filled questionnaire was sent through CKI internal courier Survey period Jul. 1st, 2005 ~ Jul. 13th (13 days)

  7. 2. Execution 3. Data Processing Distribution of questionnaire EDITING • Questionnaire was distributed through internal courier • Error and omission validation Filling in questionnaire CODING • Self-filled questionnaire was completed • Raw data coding Collection of questionnaire PUNCHING • Completed questionnaire was collected through internal courier • Entering the coded to system DATA PROCESSING + • Processing via SPSS/ PC

  8. IV. Characteristics of Respondents Before weighting After weighting Type # of Cases % Type # of Cases % Total 1,434 100.0 Total 1,434 100.0 Dept. Br. HO department Branch No response 426 1006 2 29.7 70.2 0.1 Dept. Br. HO department Branch No response 408 1024 2 28.4 71.4 0.1 Job group Ilban IT Samu No response 1151 50 229 4 80.3 3.5 16.0 0.3 Job group Ilban IT Samu No response 1129 37 264 4 78.7 2.6 18.4 0.3 Level 2 level or above 3level 4level 5level No response 71 219 617 506 21 5.0 15.3 43.0 35.3 1.5 Level 2 level or above 3level 4level 5level No response 82 228 562 541 21 5.7 15.9 39.2 37.7 1.5 Gender Male Female 995 439 69.4 30.6 Gender Male Female 969 465 67.6 32.4 Marriage status Married Single No response 1129 297 8 78.7 20.7 0.6 Marriage status Married Single No response 1111 315 8 77.5 22.0 0.5 Tenure 5 years or less 5~9years 10~14years 15~19years 20years or more No response 199 529 369 218 72 47 13.9 36.9 25.7 15.2 5.0 3.3 Tenure 5 years or less 5~9years 10~14years 15~19years 20years or more No response 220 522 352 215 78 46 15.4 36.4 24.6 15.0 5.4 3.2 Note ) To enhance accuracy of the survey, weight was assigned to response data based on actual staff percentage by job group * and level.

  9. Chapter2 Analysis on Survey Result

  10. I. Major Indicators of Ex KorAm Staff Sentiment to the Changed Bank 1. Major Indicators Points out of total score of 100 16.81(points) 31.89 9.34 12.8 20.39 22.70 27.04 Top-three rate (Percentage of ‘neutral+positive’ answers) Top-two Top-two 6.9% Top-two 1.6% 1.8% Top-two 1.2% Top-two Top-two Top-two 0.9% 0.1% 0.3% Major indicators Overall satisfaction about the integrated Citibank Korea Chances for Success in the Local market Satisfaction About promotion After the integration Satisfaction About reorganization And re staffing Satisfaction about New IPA system Satisfaction about Title integration proposal Feedback on Citigroup 5 point plan Note ) shows the rate of positive answers. • Ex KorAm regular staff shows very low level of satisfaction about the integrated CKI. • Satisfaction level is particularly low in the area of promotion and reorganization/re staffing. It suggests that the bank will have to go through pain as integration is undertaken. This issue should be taken seriously for the long term viability of the bank.

  11. 2. Diagram of Staff Satisfaction about the Integrated CKI Attitude for individual policy Overall satisfaction & attitude Behavior Satisfaction About promotion 9.34(points) Note1) .125*** .182*** Satisfaction about reorganization/re staffing 12.8(points) CKI’s chances for Success in the Local market 31.89 points .118*** .190*** .119*** Satisfaction about New IPA 20.39 (points) .133*** Note2) R=0.414*** .161*** Overall satisfaction about the integrated Citibank Korea 16.81(points) Intention to leave CKI 33.4(points) .130*** R=0.209** Satisfaction about Title integration 22.70 (points) .119*** Feedback on Citigroup 5 point plan 27.04 (points) .105*** Note1) The figures are influence coefficient (β value) which is standardized to measure level of influence of each item. Note2) The figures are Pearson correlation coefficients which show relationship between two measured items. Note3)**indicates statistical significance with 95% confidence level and *** suggests statistical significance with 99% confidence level. • It was found that overall satisfaction about the integrated CKI was heavily affected by how much satisfied staff are with the five areas.In particular, ‘promotion after integration’ and ‘reorganization/re staffing’ proved to have the greatest impact on how staff feel about the integrated bank • With satisfaction about the integrated bank at such a low level, the bank is expected to experience turmoil as it undertake specific process for integration and cultural integration according to its roadmap • It was found that staff satisfaction level about the integrated CKI has strong correlation with their actual withdrawal from the bank or intention to do so

  12. II. Opinion On Competitiveness of CKI 1. Overall Satisfaction about the Integrated Bank • 89.3% of the respondents shows dissatisfaction about the integrated bank. Level of dissatisfaction was particularly high among HO and Ilban staff. Satisfied 0.8% ▣ Satisfaction level about the integrated bank (N=1,434) Out of total score of 100 : 16.81 Very unsatisfied 43.5% Unsatisfied 45.9% Average 9.1% Very satisfied 0.1% ＊ Why unsatisfied? (N=1,411) ＊ Why satisfied? (N=13) • Inappropriate system and financial products to local sentiment 38.9% • Unfair HR policy 28.7% • Unbalanced corporate reorganization 13.1% • Bleak career future 11.1% • Opportunity to learn advanced financial techniques 37.5% • Sense of pride as member of Citigroup 31.5% • Expectation for career development 14.5% Note1) Reasons for satisfaction/dissatisfaction that were cited by only a few were not shown here (hereinafter ‘all’’). Note2) All the cited reasons are shown except for the no response case indicated in ‘Characteristics of Respondents’ (hereinafter ‘all’). ＊ Satisfaction level of each respondent group about the integrated bank

  13. 2. Opinion on the CKI Chance for Success in the Local Financial Market • The number of staffs who view the future of CKI negatively was ten times as many as those who have positive • expectation.  Negative view is particularly prevalent among HO department staff and Ilban/IT staff. Large 6.5% ▣ CKI chances for success (N=1,434) Out of total score of 100 : 31.89 None 16.3% Small 46.8% Average 29.5% Very large 0.4% ＊ Opinion of each respondent group on CKI chances for success

  14. 3. What Is Good After the Bank Integration • 77.62% of respondents answered that they didn’t feel that the bank is any better than other banks because of • the integration. 20.2% of respondents who answered that the bank improved after integration cited ‘deposit product’. ▣ Do you feel that the bank is better after integration? (N=1,434) No opinion/no response 2.2% ＊ Improvement after the integration (N=290) • FX • Brand power • IT system, etc. Yes 20.2% No 77.6% Deposit Credit card Investment Loan FCY derivative Others Majority answer • Branch staff (23.3%) • Samu (22.0%) • Staff of level 2 or higher (28.6%)By comparison, IT staff represents • low percentage (8.3%)

  15. 4. Improvement vs. Deterioration of CKI Competitiveness After the Integration • Respondents answered that the integration decreased competitiveness of the bank more than it enhanced. Improvement: The biggest improvement was made in the area of financial products, followed by brand value/recognition. Deterioration: The worst deterioration was observed in the area of staff morale, followed by IT system and sales environment. Has the integration contributed to competitiveness? Has the integration hurt competitiveness? Yes No No opinion/response ＊ Factors for/against the integrated bank’s competitiveness (%) Financial products Branch value recognition Welfare Salary & incentive IT system Excellent management /management policy Sales environment Morale Others

  16. 5. Feedback on Migration to Citigroup IT system • Negative view on migration to Citibank IT system was prevalent (Percentage of negative opinions: 87.4%). HO department and Ilban staff are found to be more skeptical than others ▣ Feedback on the Citigroup IT system that the bank migrated to after the integration (N=1,434) advanced 0.3% Out of total score of 100 : 12.23 No opinion/ response 1.0% Old system that will adversely affect the bank competitiveness 62.7% Old system 24.6% Average 11.2% Very advanced 0.1% ＊ Opinion of each respondent group on the switch to Citibank IT system

  17. 6. Ex KorAm Customer Reaction to the Integration of the Bank ① Customer Reaction • A few staff answered that customers view favorably the integration because of brand value. But 65.7% of the surveyed staff cited negative opinion of customers. The biggest reason for negative opinion: CKI policy is not appropriate for local condition’ ▣ Customer feedback on the integration (N=1,434) Positive 3.6% Out of total score of 100 : 28.27 No opinion/ response 0.9% Very skeptical 24.4% Skeptical 41.3% Average 29.6% Very positive 0.2% ＊ Why skeptical? (N=1,367) ＊ Why positive? (N=55) • Inappropriate policy for local condition 11.3% • Unnecessary procedures newly put in place 6.6% • Marketing policy only concerned about profit 5.6% • Uncomfortable with dealing with foreign bank 4.1% • Slow customer service and business 3.4% • Slow decision making 2.7% • Feeling resistant to foreign capital 2.2% • Customers just do not feel any improvement 2.1% • Brand value 45.0% • No concern about the bank going bankrupt 9.2% • Having expectation for a global bank and feeling safe when trusting asset with the bank 7.0% • Expectation for advanced financial technique 6.8% • Feeling proud of doing business with Citibank 5.2% Majority group • HO department • 3-4 level staff － Note) The above result may be different from actual customer response since the answers were received from ex KorAm staff based on their experience dealing with customers, not directly received from customers.

  18. ② Why Is Customer Complaint Surging? • 77.5% of respondents answered ‘Products unfair or inconvenient to customers’. ▣ Why increase in customer complaints? (N=1,434) Reasonable product -Difficult to understand Why customers complain Customers are not Yet familiar to Advanced financial Technique and products Not enough time Or energy spent on explaining products Unfair or inconvenient products Others Majority group － • Samu • IT • Ilban • 3-4 level • Branch staff －

  19. 7. Satisfaction About Campaign and Promotion After the Integration ① Satisfaction Level About Campaign/Promotion • For every 10 respondents, 8 staff (79.4%) showed dissatisfaction about campaign and promotion that have been • consistently conducted since the integration. Satisfied 0.9% ▣ How satisfied are you with campaign and promotion? (N=1,434) Out of total score of 100 : 20.08 No opinion/ response 0.8% Very unsatisfied 40.2% Unsatisfied 39.2% Average 18.8% Very satisfied 0.1% ＊ Why unsatisfied? (N=1,406) ＊ Why satisfied? (N=13) • Campaigns/promotions are necessary, but too many at the same time 41.8% • Not very competitive and thus 26.2% • Excessive workload due to campaign and promotion 24.4% • Incentive pay is encouraging staff 6(46.9%) • Campaigns and promotions contributed to the success of CKI localization 3(21.3%) ＊ Satisfaction level of each respondent group about campaign/promotion

  20. ② Why the Bank Need Consistent Campaign and Promotion? (Staff opinion) • Absolute majority of ex KorAm staff chose ‘short term achievement of the management’ as the reason behind • consistent campaign and promotion (92.7%). ▣ Why constant campaign/promotion? (N=1,434) • For long term achievement of the bank • To recapture lost customers due to the merger, etc. For short term achievement Of the management To transform the local banking industry With advanced Financial technique To motivate staff To provide excellent Financial products For customers Others

  21. 8. Workload Before Vs. After the Integration • 75.6% of respondents said that workload had increased after the integration. The lower one’s job level is, the more workload increase was experienced. By job group, higher percentage of ‘IT’ • staffs reported increase in workload than any other staff. ▣ Workload before vs. after the integration (N=1,434) Decreased to a degree 4.1% The same 18.0% Increased to a degree 35.1% Dramatically increased 40.5% Dramatically decreased 1.6% ＊ Workload of each respondent group before vs. after the integration ＊ Reason for workload increase (Staff opinion) (N=1,084) • Too many reports 19.3% • Unnecessary reports 10.0% • Human resource shortage 7.4% • Too many unmeaning business processes and formality 7.3% • Campaign 4.7% • Adherence to Citigroup policy while conducting business 3.2% • Increase in Compliance related work 3.2% • Too many unnecessary matters to be concerned about 3.0% • Manual operation increase 2.3% • Integration related work 2.3% • IT system change 2.2% • Too fragmented organization 1.8%

  22. 9. Feedback on Citibank Matrix Organization • 58.5% of respondents admitted that Citibank Matrix organization is effective, but maintained that the organization • is not appropriate to local condition.  Total percentage of staff who answered the organization is not appropriate to local condition stands at 96.3%. ▣ How do you assess Citibank Matrix organization? (N=1,434) Effective to manage a large organization and appropriate to domestic circumstance Effective for a large organization But not appropriate to domestic circumstance Ineffective for a large organization and not appropriate to domestic circumstance Relatively majority group • Female • Branch staff • Samu staff • 2 level of higher staff － • Male • HO department staff • Ilban staff • 4 level staff

  23. 10. Labor Union Opinion on CKI Independent Management • Absolute majority of the respondents (96.8%) sided with the labor union’s argument for independent management. Most of them cited ‘cultural difference, sales environment difference’ as reasons. ▣ Opinion on independent management (N=1,434) CKI management must be handled by Citigroup 2.4% No opinion/response 0.8% ＊ Why is independent management necessary? (N=1,389) • To conduct sales in a way that suits local condition 19.7% • Global management is not well received in Korea 13.4% • To make fast decision which reflects local circumstance 13.1% • To enhance competitiveness of the bank 3.4% • To adapt to local sales environment 2.5% • To accommodate existing system and local sentiment 2.3% • Localization 2.3% • Localized management has more chances for success 2.2% • Cultural difference 2.2% CKI Management must be independent 96.8%

  24. 11. Urgent Challenges of CKI • ‘Change of executives into those who are more reliable’ > ‘Presentation of vision based on trust between labor • and management’ > ‘Withdrawal of recent personnel policy’ ▣ Challenges of CKI (N=1,434) (%) Change of the management into more reliable ones Presentation of future vision based on labor-management trust Withdrawal of recent personnel policy Actual job security Implementation of programs to overcome cultural difference Prohibition of use of English as an official language Reasonable level and title matching Independent management Wage rise and better Welfare and benefits Others Majority group • Ilban • L 3 • or higher 이상 • Ilban • L 3 • or higher － • L 4 • or lower • Samu • Branches • L 2 • or higher • H/O • Depts 부서 • L 3 • IT － • L 5 • Samu － Note) ‘Most’ refers to the answer chosen first by respondents, and ‘Most+Next’ refers to answer chosen first and second by respondents (others - ‘All’) .

  25. III. Opinion on Current Personnel Policy and Level of Satisfaction 1. Level of Satisfaction with Current Personnel Policy ① Level of Satisfaction with April 20 Promotions • It is found that employees were very dissatisfied with the recent promotions. In particular, many felt that this was • aimed at having a control over the organization. < Results of April 20 Promotions > • Not including 134 other dedicated staffs and Samu staff • * Excluding promotion of Head of Depts. into higher level • Ratio of legacy KorAm vs. legacy Citi: 약 3.5 : 1 ( ) refers to those promoted only in Hobong step if applying legacy KorAm • policy based on management’s proposal. Satisfied 0.1% Out of total score of 100 : 9.34 No opinion/ No response 0.3% Very unsatisfied 69.5% Unsatisfied 23.7% Neutral 6.2% Very satisfied 0.2% ＊ Reasons for satisfaction (N=4) ＊ Main reasons for dissatisfaction (N=1,426) • It was the promotion based on capability and performance. • It was the reasonable promotion that does not hamper organizational integration. • It was the promotion that lead to control of the organization by Citi. 63.2% • It was the promotion that undermines harmony between both organizations. 17.6% • It was not the promotion based on capability and performance. 8.3% • It was the promotion that do not have clear standards. 6.3% • Ot was the typical factionalism type promotion. 3.3%

  26. ② Opinion on Union’s Request for Withdrawal of April 20 • Employees fully agreed with Union’s request for withdrawal of April 20. ＊ Main reasons for Union’s request (N=22) • Exclusive authority of the management • Basic logic of capital ▣ Opinion on Union’s Request for Withdrawal of April 20 Promotions (N=1,434) The request for the Union is not appropriate. 1.6% No opinion/no response 0.9% ＊ Main reasons for agreement with Union’s request (N=1,398) • For smooth organizational integration 7.1% • Unfair promotion 6.4% • The ratio of the promoted should be proportionate to number of staff of each organization. 5.5% • For control of the organization by Citi 5.2% • Not based on capability and performance 3.5% • For development of the organization 3.0% • Equity 2.5% The request on promotions from the Union should be accepted. 97.5% Note) Responses with low share are not presented.

  27. 2. Fair Criteria For Maximization Of Synergy Effects • More than the majority of the respondents (55.5%) answered that 3:1 or 3.5:1 would be an appropriate promotion ratio • of (L)KorAm to (L)Citi. ▣ Appropriate Promotion Ratio Of (L)KorAm To (L)City(N=1,434) • Male/Ilban workers tend to respond a higher ratio of (L) KorAm to (L) Citi. No Opinion/ Response 1:1 2:1 3:1 3.5:1 4:1 (including bigger than 4:1) ▣ Desirable Promotion Criteria (N=1,434) • Workers of HO depts and those with L 4 or lower emphasize the promotion in proportion to the number of workers of the two organizations while workers of branches and Samu status underscore promotion considering fairness of job levels & duties. Promotion in proportion to the number of workers of the two organizations Promotion considering fairness of job levels & duties Promotion based on job competence Others

  28. IV. Feedback and Satisfaction Level on the Reorganization 1. Satisfaction Level on Reorganization • Regarding the recent reorganization and consequent staff repositioning, an absolute majority of respondents (89.8%) showed dissatisfaction. Negative response signified the repositioning problem as lopsided or favoring Legacy Citi staff to an unreasonable extent. < Reorganization > ▣ Satisfaction Level on Reorganization (N=1,434) No Opinion/ No Response 0.6% Out of total score of 100 : 12.80 Very Unsatisfied 58.2% Unsatisfied 31.7% Neutral 9.5% Satisfied 0.1% ＊ Reasons for Dissatisfaction (N=1,425) ＊ Reasons for Satisfaction (N=1) • HR decision in favor of Legacy Citi staff 61.1% • Personnel positioning without verification of credentials 14.2% • HR decision neglecting the equal opportunity principle 9.7% • Too much weights on English competency 9.3% • Segregation of biz process in detail

  29. 2. Satisfaction Level on Biz Process at Reshuffled HO Dept. • No less than 90% of respondents showed dissatisfaction regarding HO Dept. process. Most frequently mentioned comments include: “Concerned dept. tends to deny ownership and pass the buck to others”; and • “Difficult to clarify the dept. in full responsibility”. The negative findings presumably come from negligence in internal promotion (communication) over the reorganization and hardship for swift adjustment to changes. ▣ Satisfaction Level on Biz Process at Reshuffled HO Dept. (N=1,434) Very Satisfied 0.1% Satisfied 0.1% No Opinion/No Response1.2% ＊ Dissatisfactory Factors (N=1,415) Neutral 7.4% • Tend to pass the responsibility to other related dept 29.5% • Hard to clarify a dept in full charge 24.6% • Hard to clarify a staff in full charge 19.3% • Job responsibilities of each Dept. not clear 17.7% • Collaboration is hardly expected due to Dept workload 2.9% • Others 6.0% Dissatisfied 31.1% Very Dissatisfied 60.2% 11.77 (Out of total score of 100) • Regardless of which dept. the respondents belong, they mostly expressed dissatisfaction. • By job group, Ilban staff stood out in the dissatisfaction sentiment.

  30. 3. Perception on Reorganization: Dept. Heads Mostly fromLegacy Citi Staff • The Category Represents the Most Significant Dissatisfaction of Respondents (Accounting for 97.5%). < A Majority of Dept Heads ComprisesLegacy Citi Staff > Awareness • HO Dept., Tech staff,and high ranking staffshowing higher • awareness No Opinion/ No Response 3.7% Unaware 5.5% Aware 90.8% Opinion on the Issue Very Reasonable 0.2% • Company-wide Highlights : An absolute majority • from all levels see it as very unreasonable. No Opinion/ No Response 1.4% Very Unreasonable(Only for the benefit of Legacy Citi staff) 84.6% Unreasonable 12.9% Neutral 0.9% Reasonable 0.2%

  31. 4. Beneficiaries & Victims of Integration • Legacy KorAm regular workers deem Legacy Citi staff in high ranking as the most benefited, while recognizing both labor union members and high ranking staff from Legacy KorAm as the suffered. ▣ Beneficiaries and Victims of Integration (N=1,434) (%) Customer Management Legacy KorAm Union Member Legacy CitiUnion Member Legacy CitiHigh Ranking Staff (Jibaein level or higher) Legacy KorAmHigh Ranking Staff • Respondents tend to believe that the level they represent is the hardest-hit (the most suffered).

  32. V. Satisfaction Level on the New IPA System 1. Satisfaction Level About New IPA System < Summary of New IPA Conversion Proposal > Performance Grading Method Officer The individual and supervisor jointly set the goals (main job responsibilities), And evaluate according to whether or not/achievement level Staff* (Including Contractor) Evaluation is performed according to the various performance items that are defined in the Work Performance Evaluation Table * Including Level Q of Legacy Citibank Evaluation Standard Legacy KorAm Bank : S(Superior), A(Excellent), B(Average), C(Bad), D(Very Bad) CKI Evaluation Standard 1 Far Exceeded Expectations The obtained results significantly surpassed all expected results 2 Exceeded Expectations The obtained results frequently surpassed all expected results 3 Met Expectations The obtained results were in line with expected results 4 Partially Met Expectations The obtained results were generally in line with expected results with a few exceptions 5 Did not Meet Expectations For the most part, the obtained results were not in line with expected results 6 Unranked Actual service period is within 6 months (Continued on the Next Page)

  33. Distribution Chart Legacy KorAm : S: within 10%, S+A: within 50%, S+A+B: within 90%, D : ‘Very Bad’ in Work Performance Evaluation or BSC Evaluation Score of Less than 60 CKI Evaluation Grade Distribution Ratio (Guide line) • Considering the management environment, contribution level etc., the CEO can apply the total distribution percentage and individual evaluation grade separately • 6 : Excluded from evaluation 10% 30% 1 90% 95% 2 100% 3 4 5 Performance Evaluation (Officer) • Legacy KorAm • Competency Evaluation (20~30%) • Performance Evaluation (70~80%) CKI Performance Score Card (100%) Leadership Evaluation (Item for Adjustment) • Leadership Evaluation • - For Dept. Head, Branch Manager, Team Leader and higher staffs, conduct (top-down+bottom-up) evaluation • Other Officers conduct bottom-up evaluation • - Leadership evaluation is an element that influences the evaluation results in accordance with performance score card (Continued on the Next Page)

  34. Division Head Head/Team Leader Other Officers Staffs Branch Manager Regional Div. Head Officer Staff OO / BSM Population HQ Branch * 비 고 GCG/GCIB O&T Officer (In principle) Division • CO : CO • CE : CE • Other officer : Division • OO(BSM): • entirely OO(BSM) Evaluation by job group (Ilban/Samu, etc.) Staff “ Division Evaluators (Assessors) and Checkers CKI Remarks HQ Each Group Head (CEO 1 down  CEO Division Head  Each Group Head (CEO 1down) Dept./Team Head  Division Head Dept./Team Head  Division Head Branch* (GCG/ GCIB) Div. Head  Group Head (CEO 1down) Branch Manager Div. Head CO, CE are the head of the responsible Division (Officer)Branch ManagerDiv. Head (O&T)* Branch Ops Dept. Head  O&T Div. Head • In case there are changes in organization of the branch, changes may be made accordingly • If necessary, the CEO can separately assign the evaluators and checkers (Continued on the Next Page)

  35. Approx. 80% of Respondents Showed Dissatisfaction Pointing “Possibility of Assessor’s Judgmental Evaluation” as the Most Serious Concern. Very Satisfied 0.1% ▣ Satisfaction Level on New IPA System (N=1,434) Out of total Score of 100 : 20.39 Very Unsatisfied 40.0% Unsatisfied 38.6% Neutral 19.2% No Opinion/ No Response 1.0% Satisfied 1.2% ＊ Dissatisfaction Reasons (N=1,402) • High possibility of subjective assessment by evaluators and checkers 54.0% • Conflict and discord among employees can intensify 17.1% • Job insecurity can escalate 11.1% • Disruption within organization can be caused 9.2% • Distribution curve by grade(level)is unreasonable 3.7% • Promotion can hardly be expected in the future 1.9% • HO staffs, Ilban/Tech, and Level 3 and 4 staffs, amongst others, showed relatively low satisfaction level.

  36. 2. New IPA System and Concerns of Deteriorating Work Environment • A majority (90.3% of respondents) expects the New IPA System to worsen the working environment. ▣ Response (N=1,434) Will not harm the working environment 5.2% No Opinion/ No Response 4.5% ＊ Reasons Behind (N=1,295) Deteriorate the working Environment 90.3% As a layer of top ranking Shrinks and lower Ranking expands, motivation can be affected Change of distribution ratio by level, prior to establishment of promotion policies, surely marginalizes staffs from promotion opportunities Currently, Level 5 (= D) Is capped at 5%. This, combined with ‘Waiting list for layoff system”, will Undermine job Security. (For those on the Waiting list, app.30% of Annual salary is Granted.) For labor members in Level 3+, automatic step promotion system is to be introduced by year-end. Yet, at the time of system implementation, Differential step promotion System will remain. • Compared with others, Level 4 and Ilban staffs tend more to assume that the New IPA System will aggravate the working environment.

  37. 3. Drawbacks of New IPA System • Among the most popular reasons for dissatisfaction are: “High possibility for assessor’s discretionary judgment”, • And “Difficulty of objective evaluation”. Another concern is unbalanced evaluation of the two bank staffs. ▣ Drawbacks of New IPA System (N=1,434) (%) Proportionately unbalanced Staff evaluation Between the two banks Evaluation by assessor Or checker at their Sole discretions Objective evaluation Is difficult Top tier ratio Shrinks or Low tier expands Evaluation focuses on seniority or candidates for promotion Gender Discrimination evaluation Majority Group • Male • HO Dept. • Ilban • Level 3-4 • Tech staff • Level 2+ • Samu • Tech staff － －

  38. 4. Proper Timing of IPA System Integration • In the face of overall resistance to the New IPA System, optimum timing for integration of the two banks’ IPA System • was proposed as “after a new balanced and justifiable reorganization is complete (55.4%)”, which is followed by • “after job rotation of the two banks’ staffs is launched (21.5%)”, and “after integration of employment principles and • overall HR policies (19.7%)”. ▣ Proper Timing for IPA System Integration (N=1,434) After a new proportionately-balanced Reorganization After launch of job rotation Of the two banks’ staffs After integration of Employment principles And overall HR policies After System Integration Anytime will work Majority Group • Ilban • Level 4-5 • Male • Branch staff • Ilban • Level 2+ • Female • HO Dept. staff • Tech － －

  39. VI. Satisfaction Level on the Title Integration Policy 1. Satisfaction Level on the Title Integration Policy < The Bank’s Title Integration Policy of Executives and Staffs of the Combined Bank (As of April 21, 2005) > For Legacy KorAm Bank, the current titles are to be used, but,  As of the implementation date, those who directly report to senior EVP among those with title EVP shall be titled Deputy EVP, and may be titled EVP for the rest of the term. As for Level 1 or 2 Ilban staffs but not “head” of a unit, they shall be titled Dept. Head. As for Level 4 Ilban & step 8 and higher staffs, they shall be titled Soosuk. <Continued on the Next Page>

  40. Survey result shows that 73.3% of Legacy KorAm regular employees are dissatisfied with the title integration policy. • HO Dept. staffs, Ilban/Tech personnel, and high ranking officers tend to show higher dissatisfaction. • Most popular reasons for dissatisfaction include; “the policy disregards differences in ranking system between the two organizations and staff sentiment(morale)”; and “the unfair policy is disadvantageous for Legacy KorAm”. ▣ Satisfaction Level on the Title Integration Policy (N=1,434) Satisfied 1.6% Out of total score of 100 : 22.7 Very Dissatisfied 36.9% Dissatisfied 36.4% Neutral 24.0% No Response 0.8% Very Satisfied 0.2% ＊ Dissatisfaction Reasons (N=1,397) ＊ Satisfaction Level by Respondent Grouping Ignoring ranking of the two organizations and staff sentiment Not proportionate (Disfavoring Legacy KorAm) Does not factor in experienceand seniority Majority Group • Branch • Samu • HO Dept.

  41. 2. Problems of the Title Integration Plan • Most highlighted problems in due order include: “Organization segmentation is unjustly in favor of Legacy Citi staff, • and the title integration policy was applied after promotion announcement (36.4%)”, and “Level ‘W’ under Legacy Citi system ranks • higher than the highest ranking of Legacy KorAm (21.8%)”. ▣ Problems (N=1,434) Favoring Legacy Citi// Integrated titles were applied After promotion announcement Legacy Citi Level “W” ranks higher than the highest level of Legacy KorAm Title integration plan influences position(level) integration Legacy Citi staffs still use former titles No procedures of collecting staff opinion Too many Dept. Heads in title Majority Group • HO Dept. • Level 3/5 • Branch • Higher in ranking (Level 2+) • HO Dept. • Lower in ranking

  42. 3. Considerations of the Title Integration • For considerations to be made in the title integration, respondents mostly suggest “Definition of Levels and • the employee sentiment”, which is followed by “Bank service period (seniority factor)”, and “Job performance capability”. ▣ Suggested Considerations (N=1,434) Level difference between the two organizations and employee sentiment Bank Service Period (Seniority Factor) Job Performance Ability Average Age by Level Majority Group • Branch • Lower in ranking • HO Dept. • Lower in ranking

  43. VII. Evaluation of Citigroup Management 1. Evaluation of Citigroup Five Point Plan (FPP) ① Awareness of Citigroup FPP • One out of three legacy KorAm regular employees is aware of Citigroup FPP. • Employees working at branches, and higher-level employees showed higher awareness, especially L2 or higher (73.6%). ▣ Awareness of Citigroup FPP (N=1,434) Converted into 100 as full score Score of 48.3 Did not know at all 9.5% Did not know for the most part 23.0% Knew very well 2.3% Knew for the most part 30.6% Neutral 34.2% ＊ Citigroup FPP Expanded Training We need to instill in our employees an appreciation for our legacy, platform, opportunities, and Shared Responsibilities, and give them the tools to accomplish our goals. ＊ Awareness of Citigroup FPP by Group of Respondents Enhanced Focus on Talent & Development We need to deepen our commitment to building and developing our talent and help our managers reach their potential. Balanced Perf. Appraisal We need to strengthen the performance appraisal and compensation process to consistently reinforce our Shared Responsibilities – thereby maintaining and balancing our focus on superior performance. Improved Communication We need to present a clear and consistent message of Citigroup’s goal and Shared Responsibilities, celebrate our values and history, and enhance our communication. Strengthen Controls We need to strengthen our independent controls and the control environment throughout the Company to support the businesses in their efforts to grow responsibly, minimize mistakes, and to ensure that when mistakes occur, they are handled appropriately.

  44. ② Evaluation of Implementation of Citigroup FPP • 7 out of 10 legacy KorAm regular employees responded that Citigroup FPP is not working well. • Reasons for not working well are ‘No practical action plans’, ‘Lack of communication’, ‘Only for show-off,’ etc. Working well 1.5% ▣ Evaluation of Implementation of Citigroup FPP (N=1,434) Converted into 100 as full score Score of 27.0 Not working at all 23.0% Working very well 0.1% Not working 46.4% Neutral 27.9% ＊ Reasons for Citigroup FPP not working well (N=996) ＊ Result by Group of Respondents • No practical action plans 6.3% • Lack of communication 3.7% • Only for show-off 3.6% • Only strengthening internal control 3.5% • No interest 3.2% • Lack of explanation to employees and resultant lack of common understanding 2.9% • Applicable to only some employees 2.8% • Plan only for Citi, not for harmony and integration of the two organizations 2.2% • Not realistic plan 2.2% • Organizational integration should be the first 2.1% • Unfair personnel management 2.0% • No specific and detailed programs 2.0%

  45. ③ Citigroup FPP with the best progress and worst progress • The plan showing the best implementation progress was ‘Strengthened Controls,’ while the plan showing the worst • progress was ‘Improved Communication.’ ▣ Citigroup FPP with the best progress and worst progress (N=1,434) Best Progress Worst Progress Enhanced Training Enhanced Focus on Talent & Development Balanced Perf. Appraisal and Compensation Improved Communication Strengthened Controls Nothing Special

  46. 2. Citigroup Aspires to Be Known As ① Awareness of “Citigroup Aspires to Be Known As” • 37.0% of legacy KorAm regular employees responded that they knew “Our Shared Responsibilities” that Citigroup wants to achieve. • Employees working at branches, and higher-level employees showed higher awareness, especially L2 or higher (70.1%). ▣ Awareness of “Our Shared Responsibilities’ that Citigroup aspires (N=1,434) Did not Know at all 10.4% Converted into 100 as full score Score of 50.3 Did not know for the most part 18.7% Knew very well 3.7% Knew for the most part 33.3% Neutral 33.7% ＊ “Our Shared Responsibilities” that Citigroup aspires’ ＊Awareness of “Our Shared Responsibilities” by Group of Respondents Responsibility to our clients We must put our clients first, provide superior advice, products and services, and always act with the highest level of integrity. Responsibility to each other We must provide outstanding people the best opportunities to realize their potential. We must treat our teammates with respect, champion our remarkable diversity, share the responsibility for our successes, and accept accountability for our failures. Responsibility to our franchise We must put Citigroup’s long-term interests ahead of each unit’s short-term gains, and provide superior results for our shareholders. We must respect the local culture and take an active role in the communities Where we work and live. We must honor those who came before us and extend our legacy for those who will come after us.

  47. ② Evaluation of Implementation of “Our Shared Responsibilities” • 7 out of 10 legacy KorAm regular employees (70.3%) said that “Our Shared Responsibilities” are not working well. ▣ Evaluation of Implementation of “Our Shared Responsibilities” (N=1,434) Working well 1.8% Converted into 100 as full score : Score of 22.9 Working very well 0.1% Not working at all 39.2% Not working 31.1% Neutral 27.3% ＊ Evaluation Result by Group of Respondents

  48. ③ Most Important Responsibility vs Most Problematic Responsibility • Most Important Responsibility: ‘Responsibility to our client’ • Most Problematic Responsibility: ‘Responsibility to each other’ ▣ Most Important Responsibility vs Most Problematic Responsibilityamong Shared Responsibilities (N=1,434) Majority group Most important responsibility Most Problematic Responsibility Majority group • Ilban/IT • Level 3 or higher • Ilban • Level 3 or higher Responsibility to our client • Samu • Lower level • IT/Samu • Level 5 Responsibility To each other Responsibility to our franchise - • Level 4 or lower

  49. 3. Wax Removal Project ① Awareness of Wax Removal Project • 9 out of 10 legacy KorAm regular employees (88.0%) responded that they have heard about the Wax Removal Project • that is recommendedby Citigroup Management Committee. ＊ Wax Removal Project ▣ Awareness of Wax Removal Project (N=1,434) • It is an ‘anti-bureaucracy initiative’ designed to strip away policies and bureaucracies that inhibit our ability to serve our customers and make everyday processes difficult for employees. Policies and bureaucracies have a tendency to continue to accumulate, like layers of wax on a floor. The Project is to strip away policies or procedures that have outlived their usefulness and hamper our ability to serve our customers but continued to exist. Since employees and executives are most affected by wax in their daily work, they should play a critical role in dismantling unnecessary bureaucracies and streamline policies and processes. Never heard 11.7% Definition of ‘Wax Removal Project’ by Bob Willumstad, Citigroup President and COO Heard 88.0%

  50. ② Sharing of Necessity of Wax Removal Project • More than half of legacy KorAm employees share the necessity of Wax Removal Project. • Higher level employees showed higher tendency of sharing the necessity of Wax Removal Project. ▣ Understanding of Necessity of Wax Removal Project (N=1,434) Converted into 100 as full score Score of 60.4 Do not share 10.1% Do not share at all 12.0% Fully share 18.9% Neutral 20.9% Share 37.4% ＊ Reasons for not sharing necessity of Wax Removal Project (N=616) ＊ Degree of Sharing Necessity of Wax Removal Project by Group of Respondents • Only formality 6.0% • Is not effective 5.7% • Not sure whether employees’ opinion is reflected 4.5% • Unnecessarily increase workload 3.0% • Too early to implement it 2.2% • Doubtful whether it can be actually implemented 2.0% • The management, just do not implement unnecessary policies or bureaucracies. 1.5% • Is far from the reality of the integrated bank 1.5% • Do not know what is Wax Removal Project 1.4% • Citigroup itself is a bureaucratic organization. 1.4% • Citigroup’s internal controls and policies are Wax 1.4%

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