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Photo = Yonhap news |
[Alpha Biz= Paul Lee] Despite recording the highest-ever losses due to embezzlement and breach of duty last year, South Korea's banking sector managed to recover only 7% of the total stolen funds, according to recent data. The low recovery rate is attributed to the large scale of individual fraud cases and the fact that much of the stolen money has already been spent.
According to data obtained by Rep. Kim Jae-seop of the People Power Party, a member of the National Assembly’s Political Affairs Committee, from the Financial Supervisory Service, 15 banks—including major commercial, regional, and state-run banks such as KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup, BNK Kyongnam and Busan, iM, Jeju, Jeonbuk, Gwangju, Korea Development Bank, IBK, Korea Eximbank, and SC First Bank—reported a total of 187.709 billion KRW in financial losses due to misconduct in 2024. Of this, only 13.447 billion KRW (7.2%) was recovered.
Looking at a five-year span (2020–2024), the total amount lost due to embezzlement and other financial crimes was 384.321 billion KRW, but only 38.144 billion KRW—just 9.9%—was recovered.
The recovery rate has been steadily declining: 15% in 2020, 55.5% in 2021, dropping to 3.9% in 2022, 3.8% in 2023, and 7.2% in 2024—remaining in the single digits for three consecutive years.
In some cases, none of the stolen funds have been recovered. For example, Busan Bank suffered losses of 718 million KRW from financial misconduct in 2023 but has yet to recover a single won. In 2022, it managed to recover only 6.4 million KRW out of 1.493 billion KRW in losses, a recovery rate of just 0.04%.
These figures have raised concerns about the effectiveness of internal controls and recovery systems in the banking sector.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
