"I Will Prepare Fundamental Reform Measures" ... BNK Financial Expresses Regret Over 'Gyeongnam Bank Fund Embezzlement'

BNK Financial Group held an emergency management meeting with executives from all its subsidiaries in response to the embezzlement incident involving real estate project financing (PF) loan funds at its subsidiary, Kyongnam Bank, and expressed regret over the matter.

BNK Financial Chairman Bindaein, during the emergency meeting regarding the Kyongnam Bank fund embezzlement incident, urged a thorough review of processes across all operations within the entire group that could potentially be vulnerable to similar incidents and stated the intention to establish fundamental reform measures to prevent recurrence.

Chairman Bin emphasized that this incident is a critical matter involving customer trust, expressed deep regret, and showed determination for swift resolution. He ordered Kyongnam Bank to prepare stringent self-help measures to prevent recurrence and indicated that if these measures prove insufficient, the group would consider extraordinary measures at the group level.

Emergency meeting of executives from all affiliates of BNK Financial Group.

Chairman Bin stressed, “Taking this incident as an opportunity, the holding company must not neglect its fundamental role and responsibility as a control tower, including supporting the normalization of the Kyongnam Bank situation and reviewing the internal control systems across the group companies.”

He continued, “We will actively cooperate with the ongoing investigation by regulatory authorities and humbly accept the results. We will also re-examine the internal control processes of all group subsidiaries from the ground up and prepare fundamental reform measures as soon as possible to restore customer trust and normalize the situation.”

The Financial Supervisory Service announced on the 2nd that a manager in the Investment Finance Department at Kyongnam Bank’s Seoul branch is suspected of embezzling and misappropriating 56.2 billion KRW over 15 years, including repayment funds for real estate PF.

The Financial Supervisory Service stated that it will hold Kyongnam Bank accountable not only for the illegal and improper actions of the individual employee who committed the embezzlement crime but also for the bank’s near-total failure of internal controls related to this financial accident.

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