by Ryu Hyunseok
Published 02 Sep.2024 21:45(KST)
The Financial Supervisory Service (FSS) is expected to begin a regular inspection of Woori Financial Group and Woori Bank in early next month.
According to sources in the financial sector and financial authorities on the 2nd, the FSS sent a prior notification letter regarding the regular inspection to Woori Financial Group and Woori Bank this afternoon.
This regular inspection of Woori Financial Group and Woori Bank by the FSS is the first in about three years since the end of 2021. Initially, Woori Financial Group and Woori Bank were not included in this year's regular inspection targets by the FSS. However, it is known that the schedule was moved up to conduct the inspection ahead of next year.
Currently, the FSS is also conducting regular inspections of KB Financial Group and Kookmin Bank. It is unusual for simultaneous regular inspections to be conducted on two major financial groups.
Because of this, the intensity of the FSS's upcoming regular inspection of Woori Financial Group and Woori Bank is expected to be quite rigorous.
The FSS plans to examine the overall operations of the holding company and the bank, focusing intensively on loan handling and internal control systems, including allegations of improper loans involving relatives of former Chairman Sohn.
The FSS revealed that Woori Bank executed loans totaling approximately 61.6 billion KRW over the past four years to corporations or borrowers related to former Chairman Sohn's relatives. Among these, 35 billion KRW is suspected to be improper loans that did not follow standard criteria and procedures.
It is also expected that the FSS will review the adequacy of capital ratios related to the insurance company mergers and acquisitions (M&A) that Woori Financial Group has been actively pursuing.
On the 28th of last month, Woori Financial Group held a board meeting to resolve the acquisition of Dongyang Life Insurance and ABL Life Insurance and signed a stock purchase agreement (SPA) with the Chinese multilateral insurance group.
Additionally, the FSS will begin on-site inspections this week of Woori Financial Savings Bank, Woori Capital, and Woori Card concerning allegations of improper loans involving former Chairman Sohn's relatives.
The FSS reports that loans of approximately 700 million KRW were executed at Woori Financial Savings Bank, 1.2 billion KRW at Woori Capital, and 200 million KRW at Woori Card.
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