Industrial Bank of Korea (IBK) President Jang Min-young said on the 12th that she expects "the issue of about 83 billion won in unpaid allowances for employees will be resolved before long."
Jang said this at a press briefing held on the morning of the 12th at the Conrad Seoul in Yeouido, saying, "We are following internal procedures at the Financial Services Commission after the labor-management agreement."
Earlier, Industrial Bank of Korea (IBK) labor and management reached a tentative agreement in Feb. to make a lump-sum payment of 83 billion won in unpaid allowances. It came about three weeks after the union began a campaign to block Jang from reporting to work. Due to the aggregate wage cap system, Industrial Bank of Korea (IBK) employees had not received overtime pay for years since the COVID-19 pandemic. The unpaid allowance per employee is known to be about 6 million won.
Jang also said regarding Industrial Bank of Korea (IBK)'s equity among long-overdue loans held by Sangnoksu (Sangnoksu First Securitization Specialty Company), a private bad-debt processing firm, "We have already implicitly agreed to transfer (sell) it," adding, "There is no particular need to hold it, so we will resolve it promptly."
Sangnoksu is a special purpose company (SPC) established in Oct. 2003 with the participation of 10 financial institutions to clean up bad debts of credit delinquents during the credit card crisis. Equity stakes are held by Shinhan Card at 30%; Hana Bank, Industrial Bank of Korea (IBK), and Woori Card at 10% each; and KB Kookmin Bank and KB Kookmin Card at 5.3% and 4.7%, respectively. The remaining shares are held by three lending companies at 10% each.
After it emerged that, based on these equity stakes, financial companies received 42 billion won in dividends over the past five years, President Lee Jae-myung criticized it, saying, "I didn't know such primitive predatory finance was still brazenly surviving and tightening the noose on ordinary people." Shortly thereafter, Shinhan Card, Woori Bank, and Industrial Bank of Korea (IBK) each decided to sell their claims.
The issue of the credit rating system also came up. Jang said, "If there are borrowers with credit ratings of A and B, and both repaid interest on time for three years, financial consumers with lower credit ratings end up bearing more interest," adding, "If they used the same loans, those with lower credit would feel at a disadvantage. We should review that and consider applying interest rates by amount." She added, "There could also be measures to give more benefits when funds are repaid faithfully."
Jang also said, "Currently, if payments are in arrears for more than three months, we grant relief of up to 60%, but I think we should expand that scope in the case of small loans."