Kim Byunghwan: "Woori Financial's Unfair Loans Are Very Serious...Current Management Also Responsible"

Regarding Household Loan Management, "Policy Effects Appear"
Preparing Additional Regulations if Household Loans Increase
4th Internet Bank Approval Process to Proceed in November

Kim Byung-hwan, Chairman of the Financial Services Commission, stated that the allegations of improper loans involving relatives of Son Tae-seung, former chairman of Woori Financial Group, have damaged the trust of the entire financial sector, and that the current management also bears responsibility. However, since an inspection by the Financial Supervisory Service is ongoing, he expressed a position of waiting for the inspection results first. Regarding household loan management, he noted that policy effects have appeared since September, but added that monitoring will be continuously strengthened and additional regulatory measures will be introduced depending on the situation.

On the 13th, Chairman Kim held his first press briefing since taking office at the Government Seoul Office and evaluated the allegations of improper loans involving relatives of the former chairman of Woori Financial Group in this manner. This is the first time Chairman Kim has expressed a specific stance on the matter.

He said, "Incidents such as embezzlement and improper loans have repeatedly occurred within the financial sector, leading to a decline in trust," and added, "We take the Woori Financial matter seriously, and I believe the current management also feels a deep sense of responsibility regarding the financial accident." He continued, "The Financial Supervisory Service has conducted an inspection, and I understand that a regular inspection is also scheduled soon," and added, "Regarding the course of action, I think it is a matter for Woori Financial’s board of directors and shareholders’ meeting to decide."

He emphasized that the introduction of a responsibility structure will serve as an opportunity for the entire financial sector to undergo a thorough transformation. He said that financial companies’ failure to properly implement internal controls has undermined consumer trust, stating, “Management that values and pays attention to shareholders includes internal control measures, and financial companies must improve in this regard.”

Kim Byung-hwan, Chairman of the Financial Services Commission, is holding a meeting with the press corps on the afternoon of the 12th at the Joint Briefing Room of the Government Seoul Office in Jongno, Seoul. [Photo by Financial Services Commission]

Chairman Kim said that targeted regulations on real estate in the metropolitan area and the second phase of the stress test on the Debt Service Ratio (DSR) system have had some effect. He said, “Looking at the increase in household loans in September, it rose by 1.1 trillion won over five business days, which is about half compared to last month,” adding, “We need to observe the situation for the remaining period, but the first week of September shows effects.” He further stated, “If the slowdown in the increase continues, we will consider additional measures depending on the situation.”

Regarding real estate project financing (PF), he expressed expectations for a smooth landing of the PF market, saying that the scale of projects with concerns about insolvency was evaluated within the expected range based on business feasibility assessments. He said, “There were concerns that losses might be so large as to affect financial companies or construction firms, but I expect a smooth landing without major impact,” and regarding projects with insolvency concerns, he said swift restructuring and light auctions will be pursued, while normal projects will be supported to proceed quickly.

Chairman Kim announced that the approval process for the fourth internet bank will begin in November. He said that a competitiveness evaluation of existing internet banks is currently underway, and based on the results, screening criteria will be established by November at the latest to proceed with preliminary approval applications and other procedures. Additionally, regarding the recent merger between Doosan Robotics and Bobcat, he revealed plans to improve the method of calculating the merger price, and expressed his intention to launch the Virtual Asset Committee within this month to address various issues related to virtual assets.