Suhyup Bank Denies Allegations of Preferential Loans to Deutsche Motors: "Not True"

Sh Suhyup Bank has stated that recent media reports regarding preferential loans to Deutsche Motors are not true.

On August 6, JTBC and Newstapa reported that, following the appointment of Chairman Noh Dongjin to the National Federation of Fisheries Cooperatives in 2023, Suhyup Bank and nationwide Suhyup branches extended loans totaling over 60 billion KRW to Deutsche Motors and its affiliates. According to the reports, Suhyup Bank granted a 10 billion KRW loan to Deutsche Motors without collateral or payment guarantees.

In a statement released the same day, Suhyup Bank explained, "The 10 billion KRW loan to Deutsche Motors was approved in accordance with our delegated decision-making regulations, following sequential resolutions by the Credit Review Council and the Credit Review Committee, and was processed properly."

The bank further stated that, based on the credit review, Deutsche Motors was classified as a high-quality borrower, corresponding to an external audit grade 3 under Suhyup Bank's credit rating system (within the top 23% of loans with grade 3 or higher among externally audited loans), making it fully eligible for consideration for an unsecured loan.

The bank added, "Not only at our bank, but also across the banking sector, it is common practice to provide unsecured loans to financially sound listed companies." They continued, "According to Deutsche Autoworld's 2023 audit report, around September 2023, which coincides with the timing of our loan, four commercial banks and one regional bank collectively extended 47 billion KRW in new loans. In addition, there have been numerous cases of increased lending from other first-tier banks to date."

Regarding allegations that there was no precedent for approving loans despite judicial risks associated with the actual major shareholder (former Deutsche Motors Chairman Kwon Osoo), the bank clarified, "According to our review documents, at the time of the loan, Kwon Osoo had stepped down from management and was only a major shareholder." The bank added, "After reviewing the indictment related to stock price manipulation, we acknowledged that the negative public image from the lawsuit could cause some volatility in business performance. However, considering BMW's strong market position, we judged that the impact of the lawsuit's outcome would be limited, and therefore approved the loan."

In response to other allegations, such as approving loans at lower interest rates compared to other banks or lending to companies with no prior business relationship, the bank stated, "The loan to Deutsche Financial was secured by a deposit from Deutsche Auto, and according to our regulations, deposit-secured loans apply a maximum additional interest rate of 1.5% above the deposit rate, making it a 'low interest rate loan.'" The bank further clarified, "Deutsche Financial previously received a 3 billion KRW loan from us in September 2021."