Back to School for 43-year-old JPMorgan Banker as Koreans Flee Financeby and
Korea financial jobs are shrinking faster than in global peers
Former bankers start new careers in technology, health-care
It isn’t easy quitting a lucrative job at JPMorgan Chase & Co. to become a middle-aged college freshman.
David Lim mulled the idea for seven years before he finally left the bank’s South Korea unit in February, heading back to school to start a new career as a physical therapist. For the 43-year-old father of one, the country’s shrinking financial industry and booming health-care sector made the decision to pursue his passion a little less daunting.
“Because Korea is aging fast, people are growing more and more health conscious,” said Lim, who left his role in banking sales at JPMorgan to join the health sciences program at the University of Otago in New Zealand. After graduation, he plans to eventually start his own business in Korea.
Lim is among a growing number of bankers turning to stronger segments of Korea’s job market as the nation’s financial industry grapples with weak profitability, tepid economic growth and rising corporate defaults. Financial-sector employment shrank by 3.3 percent in the year through October 2015, versus gains of at least 1.9 percent over similar periods in Hong Kong, New York and the U.K.
Employment in Korea’s health-care and technology industries, meanwhile, has been rising amid strong demand from a graying society and President Park Geun-hye’s campaign to create new growth engines in Asia’s fourth-largest economy. The shift is also visible in the nation’s $1.3 trillion stock market, with shares of health-care and technology companies leading gains among 11 industry groups this year.
“I have a positive view on the IT and health-care sectors in the long-term,” said Lee Kyoung Min, a Seoul-based analyst at Daishin Securities Co. “They are probably two of the few industries that can actually grow in today’s economy.”
Korean health-care businesses are booming as the nation ages. The health and social work segment of gross domestic product expanded by 8.1 percent in the second quarter, versus 3.3 percent for the economy as a whole. On the employment side, health-care jobs climbed 1.3 percent in the 12 months through October 2015, according to the latest government data available. The proportion of Koreans aged 65 and above will more than triple by 2060 to 40 percent of the population, according to Statistics Korea.
The nation’s changing demographics helped convince Lee Jung Ha, a 49-year-old former head of currency trading at Woori Investment & Securities (now part of NH Investment & Securities Co.), to leave his two-decade career in finance and start a nursing home near Seoul.
It’s an industry with “steady growth,” said Lee, who studied for months to pass a nursing-care test and completed a year of field training before opening his facility -- Life Is Beautiful -- in August. “Sometimes I miss the trading room, but I am more excited with this new path.”
Eunice Kim, a former trading analyst at ING Bank in Seoul, found her new career in the technology industry. After leaving ING in 2011, Kim worked at her family’s electronics manufacturing business until it was purchased last year. She joined a U.K.-based technology startup in May to run its Korea operations, drawn to the company’s flexible working hours and the potential for a big payday if the firm succeeds.
“If things go well, there may be buying interest from U.S. tech companies,” said Kim, 35, who declined to name her current employer because she’s not authorized to speak to media. “This will be a great opportunity for me both financially and professionally.”
Korea’s technology industry has been a standout in the nation’s job market, expanding 6.4 percent in the year through October 2015 thanks in part to President Park’s efforts to build a “creative economy” fueled by high-tech entrepreneurs. The government announced plans this month to invest 15.3 trillion won ($13.9 billion) in areas such as software engineering, cloud computing, artificial intelligence and smart cars next year.
For shareholders of Korea’s technology and health-care companies, 2016 has been a banner year. Companies in the two sectors have climbed 21 percent and 26 percent, respectively, based on a market-capitalization-weighted average of their returns. That compares with a 4.5 percent increase in the benchmark Kospi index and a 5 percent gain in financial stocks this year through Thursday. The Kospi added 0.2 percent on Friday.
Gaining exposure to high-flying industries doesn’t come cheap. Korea’s health-care stocks are valued at an average 102 times reported earnings, while tech shares command a multiple of 61 -- almost six times higher than that of financial companies.
Still, there are good reasons for financial firms to trade at a discount. Per-share earnings for companies in the MSCI Korea Financials Index dropped by about 5 percent over the past year as record-low benchmark borrowing costs squeezed banks’ net-interest margins, while the delinquency rate on Korean bank loans rose to the highest in 13 months in July.
Bankers who left the business see benefits beyond just being part of a faster-growing industry. Lim was attracted to the long “occupational lifespan” of physical therapists, who can perform the job into their 60s and beyond. Lee, the former Woori trader, achieved a long-time dream of running his own business, while Kim was able to escape what she called a “young men’s club” on the trading floors of big banks.
“I have no regrets about leaving,” Kim said. “I enjoy my work and I feel fulfilled every day.”