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Photo = Yonhap news |
[Alpha Biz= Paul Lee] The Financial Supervisory Service (FSS) has launched a regular inspection of Shinhan Financial Group and its subsidiary Shinhan Bank for the first time in two years.
According to financial authorities on Monday, the FSS began a five-day preliminary inspection of Shinhan Financial Group and Shinhan Bank, starting that day, and will commence a full regular inspection on April 28.
This will be the first regular inspection of Shinhan Financial Group and Shinhan Bank since April 2023.
The FSS had been preparing to inspect Shinhan in the first half of this year, but brought forward the timeline in light of a recent series of improper lending incidents within the banking sector.
The upcoming inspection will focus on improper lending incidents, the banks’ internal controls, and overall corporate governance.
Previously, the FSS uncovered that Woori Bank issued 73 billion KRW (approx. $54 million) in improper loans to relatives of former Woori Financial Group Chairman Sohn Tae-seung. At state-run Industrial Bank of Korea, another improper loan case amounting to 88.2 billion KRW (approx. $65 million) was identified.
Shinhan Bank is also under scrutiny. One employee was recently arrested on bribery charges related to issuing improper loans. Additionally, an employee from the Apgujeong branch was accused of embezzling 1.7 billion KRW (approx. $1.25 million) between December 2021 and July 2023. In February, Shinhan Bank also disclosed a fraud case involving an external party, which led to losses of around 2 billion KRW (approx. $1.5 million).
The FSS will also assess whether the CEO succession process at Shinhan complies with the Financial Corporate Governance Best Practice Guidelines.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
