FSS to Begin Preliminary Inspection Tomorrow on Woori Financial and Banks for 'Unfair Loans'

Preliminary Inspections from the 24th, Regular Inspections in Early October
Regarding the 'Son Tae-seung Relatives' Improper Loan Case'

The Financial Supervisory Service (FSS) is set to commence a preliminary inspection of Woori Financial Group and Woori Bank, which are under suspicion of 'improper loans.'

According to sources in the financial sector and financial authorities on the 23rd, the FSS will conduct a preliminary inspection of Woori Financial Group and Woori Bank starting from the 24th, followed by a regular inspection in early next month. Initially, the FSS had planned to conduct the regular inspection of Woori Financial Group and Woori Bank next year. However, due to the seriousness of the case involving improper loans linked to former Woori Financial Chairman Sohn Tae-seung's relatives, including the arrest of Sohn’s brother-in-law by prosecutors, the inspection schedule was moved forward.

The prosecution conducted a search and seizure at the Woori Bank headquarters in Jung-gu, Seoul, on the 27th of last month regarding the improper loans amounting to 35 billion won involving relatives of former Woori Financial Group Chairman Sohn Tae-seung. Photo by Kang Jin-hyung aymsdream@

The FSS plans to thoroughly examine the group and bank operations, as well as affiliated companies, focusing intensively on loan handling and internal control systems related to the improper loan allegations involving former Chairman Sohn’s relatives. According to the FSS, Woori Bank executed loans amounting to 61.6 billion KRW over the past four years to corporate and individual business borrowers connected to former Chairman Sohn’s relatives, of which 35 billion KRW was identified as improper loans.

The FSS will also review the appropriateness of Woori Financial’s acquisition of insurance companies. On the 28th of last month, Woori Financial held a board meeting to resolve the acquisition of Tongyang Life Insurance and ABL Life Insurance and signed a Stock Purchase Agreement (SPA) with a Chinese multilateral insurance group. If the management evaluation from the regular inspection results in a grade of 3 or lower, it may become difficult to incorporate these subsidiaries.