[Exclusive] Famous Soon Kim, Citi Bank President Who Flew to the US... Final Stages of 'Consumer Protection Measures' Negotiations

Yu Haeng-jang Attends Citigroup Global CEO Meeting
Financial Consumer Protection Measures Expected This Month
Financial Authorities Official: "Final Practical Discussions Underway"

Yoomyungsoon, President of Citibank Korea

[Asia Economy reporters Kim Jin-ho and Song Seung-seop] It is observed that negotiations on consumer protection measures by Citibank Korea, which has begun withdrawing from retail banking, have reached the final stages. It is highly likely that Yoo Myung-soon, CEO of Citibank Korea, personally visited Citigroup headquarters in the United States, received group directives on key issues, and returned to Korea. Financial authorities also intend to conclude the negotiations within this year, drawing attention to what measures will be proposed to protect loan borrowers.

According to the financial sector on the 15th, it was confirmed that last week Yoo Myung-soon attended the global CEO meeting held annually at Citigroup headquarters in New York, USA. Although participation via video conference was possible considering the COVID-19 situation, Yoo personally departed on the 5th and returned late on the 10th.

At the meeting, heads of each country’s operations explained or reported on the status and important issues of their domestic businesses and then received group-level instructions and advice. In Yoo’s case, since voluntary retirement related to the liquidation of domestic consumer finance and negotiations on consumer protection measures are the most important issues, it is highly likely that she reported directly.

Currently, voluntary retirement applications at Citibank have been initially announced only to consumer finance employees. Since the company did not strongly exercise veto power, most applicants received approval notices. Additional announcements for other departments will be made twice more. However, actual retirement is expected to take place early next year after the company’s final decision.

Financial Authorities Speed Up Negotiations... Will Measures Be Released This Month?

The consumer protection measures under discussion with financial authorities are reported to have been concretized in draft form. Citibank was considering a plan to change loans maturing to customers into a method of repaying principal and interest over 10 years in installments. For personal business owners and small and medium enterprise loans (Soho loans), operating funds would be converted into ‘5-year maturity installment loans,’ and lump-sum maturity loans would be refinanced as ‘3-year extensions followed by installment loan refinancing.’

However, criticism arose that since financial consumers must repay the principal, the monthly interest payments would increase. On the 2nd, the Nocho side held a press conference in front of the Financial Supervisory Service in Yeongdeungpo-gu, Seoul, claiming, "After the first plan failed, we heard that Citibank is preparing a 3-year maturity extension plan for personal credit loans."

Financial authorities also plan to finalize consumer protection measures as soon as possible. They intend to accelerate related negotiations to alleviate the anxiety of loan borrowers and others. A senior official from the Financial Supervisory Service said, "Final practical discussions are currently underway regarding Citibank’s consumer protection measures," adding, "We plan to complete this within this month." The Financial Services Commission also stated that it will complete procedures as quickly as possible once the consumer protection measures are received from the Financial Supervisory Service. A Financial Services Commission official said, "We plan to review as soon as the report comes from the Financial Supervisory Service."

Meanwhile, if financial authorities accept the consumer protection measures and a large-scale voluntary retirement is implemented early next year, it is expected that Citibank’s liquidation process will effectively enter its final stage.