Financial Services Commission to Hold Closed-Door Meeting with Financial Associations on the 28th
Shifting from Interest Margin Profiteering to Productive Finance
Kwon Daeyoung, Vice Chairman of the Financial Services Commission, is attending the Legislation and Judiciary Subcommittee of the Political Affairs Committee held at the National Assembly on the 21st. 2025.7.21 Photo by Kim Hyunmin
Financial authorities have urgently summoned the heads of all major financial industry associations for a closed-door meeting. This move comes in response to President Lee Jaemyung's warning to the domestic financial sector regarding so-called "interest margin profiteering." During the meeting, participants are expected to review ways to shift the current loan-centered business model toward "productive finance," such as advanced industries, venture capital, and alternative investments.
According to the Financial Services Commission on July 27, Vice Chairman Kwon Daeyoung is scheduled to hold an emergency breakfast meeting on July 28 with the heads of the Korea Federation of Banks, Korea Life Insurance Association, General Insurance Association of Korea, Credit Finance Association, and Korea Financial Investment Association. The meeting is expected to discuss measures to promote corporate investment and revitalize the capital market in each sector.
The reason for convening this unscheduled emergency meeting in the financial sector is President Lee's direct and sharp criticism of financial holding companies that have recorded all-time high profits. On July 24, during a meeting with senior aides, President Lee stated, "Rather than clinging to easy interest margin profiteering such as mortgage loans, please also focus on expanding investments," and added, "That way, the pie of the national economy can grow, and financial institutions can also develop and grow in a sound manner."
The four major financial groups?KB, Shinhan, Hana, and Woori?recorded more than 10 trillion won in net profits in the first half of this year alone. Both interest income and non-interest income increased simultaneously, resulting in the highest net profit ever. Despite a low interest rate environment, the four major financial groups' interest income for the first half reached 21.0924 trillion won, up 281.8 billion won (1.4%) from 20.8106 trillion won in the same period last year.
It is known that the Financial Services Commission will use the closed-door meeting to encourage the active participation of the financial sector in establishing the "100 trillion won advanced industry fund," a core presidential pledge. Previously, the government had outlined a roadmap to enhance the competitiveness of advanced industries such as artificial intelligence (AI), biotechnology, and aerospace through a 100 trillion won fund in which both the public and private sectors participate.
The financial sector is expected to propose improvements to the risk-weighted assets (RWA) weighting system to facilitate expanded venture investment. Under the current system, it is difficult to actively engage in corporate investment as required by the government. Financial authorities are considering institutional reforms, including the revision of RWA weightings, in response to industry demands.
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