Yoon Jong-won’s First Year in Office: Promises on COVID Loan Support and Fund Accident Prevention

Establishment of COVID-19 Soft Landing Support Program Including Deferred Interest Installments, Loan Repayment Deferrals, and Loan Interest Rate Reductions

[Asia Economy Reporter Park Sun-mi]"There were difficulties due to past issues such as anti-money laundering and private equity fund problems coming to the surface. Labor-management relations were also challenging to resolve constructively."

This was the reflection shared by Yoon Jong-won, President of Industrial Bank of Korea (IBK), during a non-face-to-face press conference on the 18th, marking his first anniversary in office. It can be interpreted that President Yoon felt a significant burden over the past year in resolving private equity fund issues and labor relations. IBK is currently showing differences in stance with the Victims' Countermeasure Committee and the labor union regarding compensation for the Discovery Fund sold between 2017 and 2019, as well as the labor union recommended director system.

President Yoon stated, "This year, we will focus our capabilities on preventing recurrence of fund accidents, supporting small and medium-sized enterprises (SMEs) and small business owners in overcoming the COVID-19 crisis and the New Deal, and digitalization."

First, regarding the Discovery Fund accident, he clearly expressed the position to proceed with loss compensation through the Financial Supervisory Service's Dispute Mediation Committee procedures. President Yoon said, "For private settlements not to constitute breach of fiduciary duty, it is important to secure objectivity regarding the scope of responsibility between parties," adding, "We plan to proceed with loss compensation through the Financial Supervisory Service's Dispute Mediation Committee procedures, which guarantee objectivity, to minimize customer damage."

Measures to prevent recurrence of the Discovery Fund accident have also been established. President Yoon explained, "To prevent recurrence, we separated and made independent the Financial Consumer Protection Group, established a customer-centered asset management control tower, reorganized the organization, and strengthened internal control procedures," adding, "We improved the entire process of product selection, sales, and post-management to block incomplete sales, and plan to introduce a voice bot recording system early next month."

Last year, IBK supplied approximately KRW 25 trillion in new funds to SMEs and small business owners, while simultaneously supporting repayment burden relief through interest deferrals and maturity extensions. This year, the bank plans to further support SMEs and small business owners in overcoming the COVID-19 crisis. He stated, "For companies whose interest and principal deferrals are ending, we plan to operate a COVID-19 soft landing support program that includes installment payment of deferred interest, loan repayment deferrals, and loan interest rate reductions to ease repayment burdens," and added, "We will also strengthen support for financial structure stabilization and business restructuring for a leap forward in the post-COVID era."

Furthermore, alongside promoting ESG (Environmental, Social, and Governance) management, IBK plans to supply KRW 20 trillion in loans and KRW 5 trillion in investments to New Deal companies over the next five years, and support digital and green transition consulting for more than 1,000 SMEs. The bank also intends to discover and nurture 500 innovative startup companies this year and next, and expand the achievements of ‘IBK First Lab,’ which collaborates with fintech to introduce artificial intelligence (AI), big data, and other technologies into finance.

However, while expressing the intention to restore labor-management relations by jointly seeking improvement measures with the labor union to resolve the voluntary retirement issue, President Yoon drew a clear line stating that the laborer recommended director system or labor director system is a matter with both expectations and concerns, and can only be promoted with accompanying amendments to related laws. He also clarified that there are no plans for IBK’s transition to a holding company in the near future.

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