[2025 National Audit] FSS Chief: "One-Third of Saemaul Geumgo Branches Need to Be Consolidated"

Saemaul Geumgo’s Non-Performing Loan Ratio at 10.7%
Issue of Unified Supervisory Authority Remains
"Resolution Requires Strong Inter-Ministerial Consultation"

Lee Chanjin, Governor of the Financial Supervisory Service, listens to questions from lawmakers during a comprehensive audit of the Financial Services Commission and the Financial Supervisory Service at the National Assembly in Yeouido, Seoul, on October 27, 2025. Photo by Kim Hyunmin

Lee Chanjin, Governor of the Financial Supervisory Service, stated on October 27 that “one-third of Saemaul Geumgo branches need to be consolidated” due to the institution’s insolvency issues.

During the National Assembly’s Political Affairs Committee audit that afternoon, Democratic Party lawmaker Heo Young pointed out mismanagement at Saemaul Geumgo and raised concerns about the need to unify supervisory authority. In response, Governor Lee commented, “If the consolidation is further delayed, there is a serious risk that it could escalate into a systemic risk.”

On this day, Assemblyman Heo questioned Governor Lee, saying, “Saemaul Geumgo is a financial institution, but its non-performing loan ratio is the highest at 10.7%, and it does not even disclose this information properly. Will you transfer supervisory authority to the financial authorities to ensure proper oversight?”

The non-performing loan ratio refers to the percentage of loans that are overdue by more than three months, indicating the proportion of total loans that are at risk of default. According to Assemblyman Heo’s office, as of the end of June, Saemaul Geumgo’s non-performing loan ratio stood at 10.7%. This is significantly higher than commercial banks such as Woori Bank (0.32%), KakaoBank (0.54%), and Busan Bank (1.04%), and is also much more severe compared to other mutual financial institutions like the National Credit Union Federation of Korea (8.53%) and the National Agricultural Cooperative Federation (5.38%).

According to Article 74 of the current Saemaul Geumgo Act, the Minister of the Interior and Safety supervises Saemaul Geumgo’s credit and insurance operations in ‘consultation’ with the Financial Services Commission. Unlike other mutual financial institutions such as the National Agricultural Cooperative Federation, National Credit Union Federation of Korea, and National Federation of Fisheries Cooperatives, which are directly supervised by financial authorities, the Financial Supervisory Service does not have direct authority to inspect Saemaul Geumgo unless requested by the Ministry of the Interior and Safety. As a result, concerns about inadequate supervision have persisted.

Regarding this, Governor Lee stated, “The issue of transferring supervisory authority must be resolved through strong inter-ministerial consultation,” and added, “If supervision is unified, we will carry out our responsibilities diligently.”