NongHyup Bank Faces Mounting Losses from Non-Agricultural Loans, Multi-Trillion Won in Bad Debt

Special Loans Reach 4.18 Trillion Won, Up 400 Billion in One Year
Loan Loss Write-Offs for Farmers Account for Only 5%
Seo Samsuk: "Risk Management and Credit Evaluation Must Be Reviewed"

Seosamsuk, Democratic Party of Korea lawmaker.

NongHyup Bank, one of the nation’s five major commercial banks and the leading financial institution for farmers, has been criticized for incurring multi-trillion won losses due to loans primarily extended to non-agricultural borrowers.

According to an analysis of data submitted by NongHyup Bank to the National Assembly audit, conducted by Seo Samsuk, a Democratic Party of Korea lawmaker representing Yeongam, Muan, and Shinan in South Jeolla Province, as of September this year, the volume of NongHyup Bank’s special loans stood at 268,821 cases, totaling 4.1832 trillion won. This marks an increase of 408.6 billion won compared to the previous year.

During the same period, the amount written off by NongHyup Bank as irrecoverable bad debt reached 404.5 billion won across 33,646 cases. Of this, only 801 cases (2%) and 18.4 billion won (5%) were related to loans to farmers, while loans to non-agricultural borrowers accounted for more than 90% of the total losses.

In particular, Company A, which borrowed 270 billion won for the construction of a fashion town complex, defaulted in 2024, resulting in a loss of 106 billion won. This is cited as a representative example of how corporate-focused lending has led to direct losses to the assets of cooperative members.

Seo pointed out, “The growth base of NongHyup Bank lies in the assets of cooperative members and farmers, but in reality, loans are concentrated on non-agricultural borrowers rather than farmers,” adding, “NongHyup Bank is being transformed into a structure no different from an ordinary commercial bank, rather than remaining a bank for farmers.”

Seo further emphasized, “With bad debt write-offs due to non-agricultural loans reaching hundreds of billions of won, NongHyup Bank must conduct a comprehensive review of its internal risk management and credit evaluation systems,” and stressed, “There is an urgent need to restructure the loan system and establish measures to resolve non-performing loans in order to protect the assets of cooperative members.”