South Korea to tighten bank oversight after loan scandals

South Korea’s Financial Supervisory Service (FSS) said it will tighten oversight of banks and take action against weak internal controls and risk management. The regulator found that Woori Bank, KB, and NH Nonghyup extended improper loans totalling KRW387bn (USD264m). Woori Bank accounted for KRW233bn, including KRW70bn lent to relatives of a former chairman of its parent firm. More than 70% of these loans were classified as soured. KB and NH Nonghyup issued KRW89.2bn and KRW64.9bn in inappropriate loans, respectively. One bank allegedly concealed a KRW100bn loss by manipulating trading data. The FSS said it will implement stricter supervisory measures, crack down on legal violations, and push banks to strengthen risk management and customer protections.