[2025 Audit] KDB Extended 21 Trillion Won in New Credit to Companies Violating Accounting Standards Over 10 Years

Industrial Bank of Korea Also Extended 2 Trillion Won
"State-Run Banks Must Enforce Stricter Screening"

It has been revealed that Korea Development Bank extended new credit totaling 21 trillion won to companies that violated accounting standards over the past ten years.

Headquarters of Korea Development Bank, Yeouido, Yeongdeungpo-gu, Seoul. Korea Development Bank

According to data submitted by the Financial Supervisory Service to Assemblyman Choo Kyungho of the National Assembly’s Political Affairs Committee on October 16, Korea Development Bank granted a total of 2.1839 trillion won in new credit to 89 companies that were found to have violated accounting standards in audits conducted by the Financial Supervisory Service from 2015 through the end of August this year.

The volume of new credit extended by Korea Development Bank peaked at approximately 9 trillion won in 2016 and has since declined.

In 2022, the bank extended 370.9 billion won in new credit to four companies, and in 2023, it extended 492 billion won to another four companies. There were no new loans in 2023 and this year.

As of the end of August, 129 companies held outstanding credit balances from Korea Development Bank, totaling 24.8832 trillion won.

Industrial Bank of Korea also extended new credit totaling 2.0401 trillion won to 144 companies that violated accounting standards during the same period.

Excluding loan extensions, the volume of new credit reached its highest point in 2020 at 476.6 billion won, and has remained in the 200 billion won range annually since 2021.

As of the end of August, 37 companies held outstanding credit balances from Industrial Bank of Korea, totaling 927.2 billion won.

Assemblyman Choo Kyungho stated, "If state-run banks continue to extend credit to companies that violate accounting standards, it could undermine trust in the financial markets," adding, "Korea Development Bank and Industrial Bank of Korea must establish even stricter management standards for companies at risk of insolvency."