Lee Bok-hyun, Governor of the Financial Supervisory Service, stated regarding the improper loans involving relatives of the chairman of Woori Financial Group, "(Former Chairman Sohn Tae-seung) confirmed that illegal loans similar to those occurred during the tenure of the current Chairman (Lim Jong-ryong) and the current CEO (Jo Byung-kyu)."
On the afternoon of the 28th, after the 'Bank Holding Company Board Chairpersons Meeting' held at the Korea Federation of Banks in Jung-gu, Seoul, Governor Lee told reporters, "We will respond with a zero-tolerance policy toward illegal acts or corruption," adding, "We will check whether such illegal loans were reported to the board, whether the board's control functions operated, and if not, why they did not operate. The inspection results will be announced next month."
Lee Bok-hyun, Governor of the Financial Supervisory Service, is entering the Bankers' Hall in Myeong-dong, Seoul, on the 28th to attend a meeting between the FSS Governor and the chairpersons of bank holding company boards. Photo by Heo Young-han
On the same day, Governor Lee also emphasized that the policy of managing household loans will continue even as the base interest rate enters a lowering phase. He said, "We are conducting a sober self-reflection on the economic outlook following the GDP shock in the third quarter," and added, "Unlike countries that injected fiscal funds to overcome COVID-19, our country adopted a method of lending cheap funds to the public, but with high interest rates, it is suppressing the overall consumption capacity of the economy."
He further explained, "For this reason alone, we cannot tolerate a rapid expansion of household loans. Although secondary, it is also related to some real estate in the metropolitan area, so the strict management policy on household debt will not change even after next month."
Earlier, Governor Lee held a regular meeting with the chairpersons of the boards of eight bank holding companies, reiterating the need to improve a management culture focused on short-term performance and to establish an organizational culture centered on compliance awareness and just rewards and punishments. He also mentioned the need to strengthen the board's supervisory and check functions over management and to solidify the internal control system through the implementation of accountability structures. In particular, regarding internal control, he referred to the allegations of improper loans involving relatives of former Chairman Sohn and stated that improvement measures must be prepared.
The board chairpersons attending the meeting expressed agreement with Governor Lee's views and responded that they would focus more on securing sustainable growth engines based on future-oriented mid- to long-term strategies and innovation efforts. They also stated that, as the top of governance, the board would faithfully fulfill its supervisory and check roles to lead the sound and proper growth of bank holding companies.
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