'300 Billion Embezzlement' Gyeongnam Bank Decides to Reclaim 3 Years of Employee Bonuses

Decrease in Profit Due to Reflection of Embezzlement Net Loss in Financial Statements

BNK Gyeongnam Bank recently decided to reclaim three years' worth of performance bonuses from all employees. This decision comes as the bank's financial statements showed a significant decrease in profits following a 300 billion KRW embezzlement incident involving an executive last year. The labor union has reportedly expressed opposition to this move.

On the 1st, Gyeongnam Bank held a board meeting and resolved to reclaim certain items of performance bonuses (profit-sharing system, organizational performance bonuses, IB organizational performance bonuses) paid to employees from 2021 through last year.

The bank explained that this unavoidable decision was due to the 300 billion KRW embezzlement related to real estate project financing (PF) funds that occurred last year. After the embezzlement incident, the board revised the financial statements for 2021 to 2023 in March to reflect the loss. With a net loss of 44.1 billion KRW recorded in the financial statements, profits significantly decreased compared to before, making it inevitable to reclaim previously paid performance bonuses proportionally.

The target for the performance bonus reclamation includes approximately 2,200 employees of Gyeongnam Bank, with the amount to be reclaimed estimated to be around 1 to 2 million KRW per person. It has been confirmed that the reclamation process for about 100 employees affiliated with BNK Financial Group, whose bonuses are already linked to performance, was completed this year.

Gyeongnam Bank plans to begin the reclamation process as soon as the Financial Supervisory Service completes its ongoing audit of the financial statements, with the timing expected to be as early as the end of this year or the beginning of next year.

The board believes that when figures such as net income change due to the revision of financial statements, the company must fulfill the civil law obligation of 'returning unjust enrichment.' Legal reviews also indicated that if the company fails to recover the overpaid performance bonuses, it could constitute breach of trust.

Upon learning of this policy, the Gyeongnam Bank labor union immediately opposed it. They reportedly informed union members that reclamation without union agreement is unacceptable and that they plan to take legal action.

A bank official said, "We understand the union's position, but this is legally unavoidable and necessary from the bank's perspective of social responsibility."