This year, KB Kookmin Bank, Jeonbuk Bank and Kbank will undergo regular inspections by the Financial Supervisory Service. With consumer protection flagged in advance, tighter enforcement than before is expected.
According to the financial sector on the 22nd, the Financial Supervisory Service (FSS) this year selected KB Kookmin Bank, Jeonbuk Bank and Kbank for regular inspections of the banking sector and is expected to proceed sequentially, starting with Jeonbuk Bank in the first half. In its business plan for this year, the Financial Supervisory Service (FSS) said it would establish a supervisory framework that puts financial consumers first and separately organize a "consumer protection inspection team" during regular inspections of financial firms.
Typically, the Financial Supervisory Service (FSS) forms three to five inspection teams for regular bank inspections—covering credit, internal control, IT systems, and a general unit that reviews overall management soundness—but this year it will separately organize a team dedicated solely to consumer protection.
The consumer protection inspection team is expected to examine the entire process from the sale of financial products to post-management and check compliance with relevant laws, including the Financial Consumer Protection Act and the Personal Debtor Protection Act. An official at the Financial Supervisory Service (FSS) said, "The intent is to bring consumer protection issues onto the main table of regular inspections," adding, "We plan to convey to the financial sector, during the regular inspection process, the matters raised by the authorities and ensure improvements."
Alongside this, in line with the government's tighter stance on household debt management, related indicators and basic soundness items such as profitability and liquidity are also expected to be closely reviewed. Governance issues are also forecast to come to the fore during the regular inspection process.
Jeonbuk Bank last year appointed Park Chun-won, CEO of JB Woori Capital, as the new bank chief after former bank president Baek Jong-il gave up seeking another term amid controversy over profiteering from high interest rates. However, during the selection process, it became known that Park, during her time as CEO of JB Woori Capital, had been questioned as a reference witness by the special counsel over allegations tied to the "Kim Keon-hee butler gate," sparking concerns about legal risk and other noise.
KB Kookmin Bank also faces a potential variable as the expiration of KB Financial Group Chairman Yang Jong-hee's term approaches in Nov., which could coincide with the reappointment process and the regular inspection. In this context, this year's regular inspections are expected to, together with the financial authorities' governance advancement task force (TF), have the effect of pressuring the banking sector to voluntarily improve governance.