The Financial Supervisory Service's Disciplinary Review Result for Woori Financial Group Expected After March

Interim Briefing on Financial Holding Company Inspections Scheduled for February 4
Opening Remarks to Be Delivered by Lee Bokhyun

The Financial Supervisory Service's (FSS) inspection results for Woori Financial Group and Woori Bank are expected to be released after the first quarter. The FSS will announce the inspection details for Woori Financial, KB Financial, and NH Financial on February 4. This announcement will serve as an interim briefing, explaining the types and details of regulatory violations by financial companies.

According to financial authorities on the 24th, the FSS Bank Inspection Division 1 will hold an interim briefing on February 4 regarding the inspections of Woori Financial Group and Woori Bank. FSS Governor Lee Bok-hyun will deliver opening remarks, and Deputy Director Park Chung-hyun, in charge of banks, will conduct the briefing.

Previously, the FSS planned to announce the "2024 Inspection Results of Major Financial Holding Companies and Banks" in January, but the announcement was postponed due to the National Assembly's internal investigation and government work report schedules.

An FSS official explained, "The inspection announcement scheduled for February is an interim briefing to explain the nature of the violations, not the final sanctions," adding, "The final inspection of Woori Financial Group and Woori Bank is likely to be completed after the first quarter."

Im Jong-ryong, Chairman of Woori Financial Group, is appearing as a witness at the National Assembly inspection of the Financial Services Commission and the Korea Development Bank conducted by the Political Affairs Committee, responding to lawmakers' questions. Photo by Hyunmin Kim kimhyun81@

The sanctioning process for financial companies goes through the FSS Inspection Division, the FSS Sanctions Review Committee, and the Financial Services Commission. The Inspection Division drafts disciplinary opinions, and the Sanctions Review Committee, directly under the FSS Governor, determines the level of discipline. If a severe sanction is imposed, the disciplinary case is submitted to the Financial Services Commission. Considering that the February announcement is an interim briefing, the Sanctions Review Committee is expected to decide on sanctions no earlier than the end of March. If a severe sanction is imposed, more time will be required until the final disciplinary action.

Attention is also focused on the management evaluation ratings derived after the FSS's regular inspections. These ratings affect the financial authorities' approval of Woori Financial's acquisition and merger (M&A) of Dongyang and ABL Life. Woori Financial submitted an application for subsidiary incorporation approval to the Financial Services Commission on the 16th. Accordingly, the FSS is conducting the approval review. Although the legal review period is 60 days, it may be extended depending on circumstances.

Meanwhile, this briefing is also interpreted as an opportunity to gauge the inspection direction of the FSS Bank Inspection Division for this year. Governor Lee Bok-hyun has consistently emphasized internal control issues of financial companies throughout his tenure. Especially from this year, with the introduction of the accountability structure to financial holding companies and banks, executives such as CEOs may be sanctioned in the event of financial accidents. The FSS plans to announce this year's work plan and the inspection themes of the Bank Inspection Division following the interim briefing.