
Monetary Supervisory Service (FSS) Gov. Lee Bok-hyun speaks at a press briefing on the outcomes of the 2024 common inspections of economic holding teams and banks on the FSS headquarters in Seoul, Tuesday. Yonhap
The Monetary Supervisory Service (FSS) uncovered a complete of 482 instances of inappropriate loans amounting to 387.5 billion gained ($265 million) at Woori Financial institution, KB Kookmin Financial institution and NH NongHyup Financial institution, the monetary watchdog stated Tuesday.
The FSS introduced the outcomes of its 2024 common inspections of economic holding teams and banks, revealing that Woori Financial institution had 101 instances of improper loans totaling 233.4 billion gained, whereas Kookmin Financial institution and NongHyup Financial institution had 291 instances amounting to 89.2 billion gained and 90 instances totaling 64.9 billion gained, respectively.
Of the 233.4 billion gained at Woori Financial institution, 73 billion gained was discovered to have been improperly loaned to relations and associates of Son Tae-seung, former chairman of Woori Monetary Group. This determine represents a further 38 billion gained on prime of the beforehand reported 35 billion gained.
“The outdated governance construction of the banking sector and the incidence of large-scale monetary scandals have as soon as once more highlighted critical inner management deficiencies,” FSS Gov. Lee Bok-hyun stated throughout a press briefing.
“Financial institution executives and staff have been discovered to use financial institution assets for [their] personal pursuits and particular teams, partaking in improper loans and different unlawful or unethical enterprise practices with out hesitation.”
Woori Financial institution has been beneath investigation by the prosecution for granting improper loans to firms and particular person companies linked to Son from April 2020 to January of final yr.
Along with the beforehand recognized 35 billion gained in suspicious loans linked to Son, one other 38 billion gained was uncovered in the course of the FSS inspection.
Of the loans, 45.1 billion gained, accounting for 61.8 %, have been issued after the present administration took workplace, and 33.8 billion gained, or 46.3 %, has already was nonperforming loans.
Based on the monetary watchdog, Woori Monetary Chairman Yim Jong-yong and former Woori Financial institution CEO Cho Byung-kyu have been conscious of those improper loans, however did not report them to monetary authorities for 5 months. In consequence, the FSS inspection and prosecution investigation have been delayed.

Workers are seen at Woori Financial institution’s headquarters in Seoul, Aug. 27, when prosecutors have been conducting a raid in reference to improper loans prolonged to relations and associates of former Woori Monetary Chairman Son Tae-seung. Korea Occasions file
Moreover, the newly uncovered 160.4 billion gained in improper loans at Woori Financial institution concerned instances the place former and present headquarters and department managers accepted company loans unrelated to enterprise functions for short-term efficiency positive aspects.
Of those loans, 122.9 billion gained, or 76.6 %, has was nonperforming loans.
Consideration is now centered on how the outcomes of this inspection will affect Woori Monetary Group’s ongoing acquisition of Tongyang Life and ABL Life. If the FSS lowers Woori’s administration evaluation ranking from the present Stage 2 to Stage 3 or under primarily based on the most recent findings, the acquisition of the 2 life insurance coverage firms may change into unfeasible.
Lee vowed to swiftly finalize the administration evaluation outcomes and submit them to the Monetary Providers Fee (FSC), the nation’s prime monetary regulator, this month.
„We’re working to derive the administration evaluation outcomes individually from the sanction course of. If we are able to notify the FSC of our findings by February, the fee will be capable to decide by March,“ Lee stated.
In the meantime, at Kookmin Financial institution, a complete of 89.2 billion gained in improper loans have been recognized. Circumstances embrace a group chief at a department aiding builders and brokers in orchestrating fraudulent loans. This concerned deciding on faux debtors primarily based on fraudulent gross sales contracts and inspiring them to alter their enterprise kind to sectors the place acquiring loans was simpler.
The FSS identified that there was proof of financial kickbacks and leisure being obtained in reference to a few of these loans.
Equally, at NongHyup Financial institution, department managers and group leaders have been caught colluding with brokers and debtors to inflate appraisal values utilizing fraudulent gross sales contracts, leading to 64.9 billion gained in improper loans.
The FSS additionally confirmed that they accepted 130 million gained in kickbacks from debtors in reference to sure loans.
“The choice-making construction centered round monetary holding group chairmen was firmly established, and a hierarchical, top-down organizational tradition of strict compliance prevailed. In consequence, inner controls and different oversight mechanisms struggled to operate successfully,” Lee stated.
The watchdog reported the suspected felony actions associated to large-scale improper loans to regulation enforcement authorities.
It additionally plans to impose strict sanctions on the illegal practices on the three banks and would require all monetary holding teams and banks to submit self-assessment plans for overview.