Samsung, Hyundai Motor, and Others Designated as Financial Complex Corporate Groups... Same as Last Year

Hanwha·Mirae Asset·Kyobo·DB·Daou Kiwoom

Seven financial groups, including Samsung, Hanwha, Mirae Asset, Kyobo, Hyundai Motor, DB, and Daou Kiwoom, have been designated as financial conglomerates this year. This system was established to effectively manage and supervise financial and managerial risks such as risk transfer, risk concentration, and internal transactions that may occur at the financial group level.

On the 10th, the Financial Services Commission held its 13th regular meeting and designated seven financial groups that met all the requirements under the "Act on the Supervision of Financial Conglomerates" as financial conglomerates for 2024.

If a group operates two or more financial businesses among deposit-taking, insurance, and securities, has at least one company licensed or registered by the Financial Services Commission, and has total assets of 5 trillion won or more, it is subject to designation. However, groups with total assets in non-core businesses below 5 trillion won are excluded.

Once designated as a financial conglomerate, the group must select a representative financial company considering the equity relationships, total assets, and capital of its affiliated financial companies. This must be reported to the Financial Supervisory Service within one month. The group is required to regularly inspect and evaluate risks at the group level, establish and comply with internal control and risk management policies and standards. It also has the obligation to disclose and report to financial authorities on the group's ownership and governance structure, internal control and risk management, capital adequacy, internal transactions, and risk concentration to protect financial consumers.

The Financial Supervisory Service evaluates additional risks for designated groups annually, notifies the results, and the groups must reflect the risk-weighted capital based on the evaluation results to calculate their capital adequacy ratio. Risk status and management practices must be evaluated every three years (Risk Management Practice Evaluation).

The Financial Services Commission stated, "Through this designation, we expect that financial conglomerates will establish an autonomous risk management system that recognizes and manages risks at the group level on their own."