Shinhan and Hana Bank Request Fifth Extension for KIKO Compensation Plan

"Board Replacement, More Time Needed Due to COVID-19"
Signs of Prolonged Resolution of KIKO Crisis

[Asia Economy Reporter Kim Min-young] Banks that have received compensation requests related to the foreign exchange derivative product KIKO are expected to delay their decisions to accept the compensation proposals once again.

According to the financial sector on the 6th, Hana Bank plans to request the Financial Supervisory Service (FSS) to extend the deadline for responding to whether it will accept the FSS's KIKO dispute mediation proposal.

A Hana Bank official cited the reason for the extension request as "the board members have changed, so more time is needed for review." This is the fifth extension request from the banking sector.

Shinhan Bank is also reportedly planning to request an extension from the FSS within the day. DGB Daegu Bank is also saying that due to COVID-19 and other reasons, there is insufficient time for review.

In December last year, the FSS Dispute Mediation Committee decided that six banks that sold the KIKO product must compensate four companies for 15-41% of their actual losses. According to the compensation proposal, Shinhan Bank must compensate 15 billion KRW, Hana Bank 1.8 billion KRW, and Daegu Bank 1.1 billion KRW to the affected companies.

Although it has been almost five months since the FSS dispute mediation results were announced, signs indicate that the resolution of this issue will be prolonged.

Previously, KDB Industrial Bank (2.8 billion KRW) and Korea Citibank (600 million KRW) decided not to accept the compensation proposal. These banks judged that the Dispute Mediation Committee's finding of a breach of the duty to explain could be legally disputed based on the facts. However, Citibank decided to independently review the 39 additional companies subject to compensation and consider appropriate compensation.

Only Woori Bank accepted the FSS mediation and has completed compensation of 4.2 billion KRW.

This content was produced with the assistance of AI translation services.