Appraisers' Association: "Market Order Collapsing Due to Kookmin Bank's Illegal Appraisals"

Operation of "Valuation Department" Without Ministry Authorization
Association Claims Criminal Penalties Apply

The Korea Association of Property Appraisers announced that it held the "2nd Protest Rally Condemning Illegal Invasion of the Appraisal Market by Kookmin Bank" in front of the KB Kookmin Bank headquarters in Yeouido, Seoul, on the morning of the 14th. The association argued that Kookmin Bank's direct employment of appraisers to operate its "Valuation Department" constitutes a clear case of illegal appraisal activities.

According to the Act on Appraisal and Appraisers, appraisers are only permitted to conduct appraisal work if they are affiliated with an appraisal corporation or an appraisal office authorized by the Minister of Land, Infrastructure and Transport. However, Kookmin Bank, without being authorized as an appraisal corporation, has been conducting collateral appraisals through its internal department. The association stated, "This is a violation of Article 49, Item 2 of the Appraisal Act, and is subject to criminal penalties of up to three years in prison or a fine of up to 30 million won."

The Korea Association of Property Appraisers held the "2nd Protest Rally Against Illegal Invasion of the Appraisal Market by KB Kookmin Bank through Employed Property Appraisers" on the morning of the 14th in front of KB Kookmin Bank in Yeouido, Seoul. Korea Association of Property Appraisers

The association pointed out, "Other professionals such as lawyers and certified public accountants are also only allowed to work if they are affiliated with a corporation or office registered or authorized by the relevant ministry or local government. Kookmin Bank cannot be the sole exception."

The Ministry of Land, Infrastructure and Transport also recently responded to the association’s inquiry by stating, "When a bank employs appraisers to evaluate collateral, this constitutes appraisal activity under the Appraisal Act and is a violation of Article 5, Paragraph 2 of the Act." The National Assembly has also repeatedly raised concerns over the past several years that banks' in-house appraisals may be in violation of the law.

The association criticized Kookmin Bank for rapidly expanding its in-house appraisal operations, claiming that this is disrupting market order. The total value of Kookmin Bank's in-house appraisals grew nearly threefold from 26 trillion won in 2022 to 75 trillion won this year. In contrast, the number of cases commissioned to officially authorized appraisal corporations for a fee has decreased, while the number of free "desktop consultations" has increased, placing a greater burden on appraisal corporations.

The 2nd KB Kookmin Bank Employment Protest Rally Condemning Illegal Invasion of the Appraisal Market through Appraisers, held in front of KB Kookmin Bank in Yeouido, Seoul. Korea Association of Appraisal Professionals

Yang Gilsu, president of the association, stated, "We are not raising issues with all collateral evaluations conducted by Kookmin Bank. The problem lies with the 1% of appraisals conducted in-house by directly employed appraisers." He added, "The bank's claim that using external appraisals would lead to higher loan interest rates is simply not true."

Yang further emphasized, "Violations of the Appraisal Act are clearly illegal and must be stopped immediately. Including this issue as a discussion topic in the task force currently being promoted by the financial authorities is nothing but a stalling tactic to overlook Kookmin Bank's illegal activities."