The four major commercial banks, including KB Kookmin, Shinhan, Hana, and Woori, will file suit to contest the Korea Fair Trade Commission's penalty surcharge imposed for alleged collusion on the loan-to-value (LTV; loan to value ratio) for collateral loans.
According to the financial sector on the 20th, the four banks filed an administrative lawsuit in court that day against the Korea Fair Trade Commission (FTC)'s penalty surcharge decision. With the deadline to file the administrative suit falling on the 23rd, all four banks are said to have submitted their complaints that day.
Earlier in Jan., the Korea Fair Trade Commission (FTC) decided to issue a corrective order and impose a 272.014 billion won penalty surcharge, saying the four banks colluded on LTV to restrict competition. According to the FTC's investigation, working-level officials at the four banks exchanged 736 to 7,500 items of each bank's LTV information from Mar. 2022 to Mar. 2024.
Based on this information, the banks judged that if the LTV for real estate of certain regions or types was higher than other banks, loan recovery would become difficult, and they lowered the LTV. Conversely, if the LTV was lower than other banks, they determined their sales competitiveness would weaken and raised the LTV.
The banks countered that it was merely an information exchange and not collusion, and that there were no undue gains. A banking industry official said, "Setting a lower LTV means giving up opportunities to make money," and added, "It is hard to understand the claim that customers were harmed because fewer loans were issued."