[Exclusive] "Shouting Innovation" Yet 3 Out of 10 Saemaeul Geumgo Branches Merged Opaquely

Despite Promised Comprehensive Reform,
Branches Still Operate Independently
Insufficient Communication of Key Information to Members

A Saemaeul Geumgo branch in downtown Seoul. Photo by Yonhap News

Concerns have been raised that the merger process of Saemaeul Geumgo is still being conducted in an opaque manner. Although the institution promised comprehensive reform after experiencing a bank run crisis in 2023, critics say that many branches continue to operate in a haphazard way.

According to data submitted by the Ministry of the Interior and Safety and the Saemaeul Geumgo Federation to Assemblyman Heo Young of the National Assembly’s Political Affairs Committee on October 9, among the 32 Saemaeul Geumgo branches that merged over the past three years (from 2022 to August 2025), 10 branches only notified members of the merger meeting by posting an announcement on the building.

This means that unless members visited the Saemaeul Geumgo branch in person, they would hardly be aware that a general meeting was being held. In fact, participation rates were also low: on average, only 4.8% of members attended the meetings, and excluding five workplace-based branches, the attendance rate fell to just 2%. Furthermore, in 22 out of the 32 cases, the merger results were also announced only by posting notices on the building’s bulletin board.

In July, when the Korea Ginseng Corporation Wonju Plant Saemaeul Geumgo underwent a merger, members discovered that the meeting they were summoned to was actually a merger meeting. Until that point, they had received no information about any employee misconduct or financial problems. An audit by the Federation revealed that an employee at the branch had falsified documents to make the financial statements appear profitable, when in fact the branch was already in a state of capital erosion. It was only after members at the meeting asked, "Why are we merging?" that the truth was disclosed.

There was also insufficient notification for non-member customers. For those who are not members, the only way to find out about a merger is through a notice regarding the transfer of personal information. Cooperative financial institutions such as Saemaeul Geumgo, credit unions, and agricultural cooperatives have both member shareholders and general customers. As of last year, 36% (92.514 trillion won) of Saemaeul Geumgo’s deposits and 72% (131.5944 trillion won) of its loans were held by general customers rather than members, highlighting the need for separate guidelines for these customers.

Problems with poor management at Saemaeul Geumgo also persist. Of the 32 merged branches, only 4 were voluntary mergers, while the remaining 28 were due to financial distress. Among these, 16 branches were already in a state of capital erosion, with a Bank for International Settlements (BIS) capital adequacy ratio of 0% or less.

Assemblyman Heo commented, "Saemaeul Geumgo is too focused on covering up issues of financial soundness and internal controls, neglecting consideration for customers. Regulations must be improved to ensure sufficient information is provided and transparent procedures are guaranteed during the merger process."