Logo Woori Bank (Woori Bank)

Logo Woori Bank (Woori Bank)

Foreign subsidiaries of Woori Bank received the most sanctions last year among South Korea’s four major commercial banks, according to DART, the financial monitoring service’s electronic disclosure committee, on Wednesday.

In 2022, Woori Bank, which operates 11 overseas branches, received a total of six sanctions: two in China, two in Indonesia, one in Russia and one in India.

China’s financial watchdog issued a warning and a 200,000 yuan ($29,000) fine to Woori Bank China in April last year for errors in its balance of international payments report and statistical report. .

The Beijing branch of Woori Bank was also fined 900,000 yuan for insufficient review of personal business loans.

Bank Woori Saudara was the first to be penalized among Woori’s foreign subsidiaries last year. In January, he was fined 60 million rupees ($4,000) by Indonesia’s financial watchdog for an error in a regular report.

An additional fine of 4 million rupees was imposed on Woori Bank in Indonesia for delay in providing information relating to the capital increase.

In July last year, Woori Bank Russia was fined 1 million rubles by the Central Bank of the Russian Federation for violating the rules of trading foreign exchange positions.

Moreover, in September last year, the Indian branch of Woori Bank was fined 5.91 million rupees ($72,000) by the Reserve Bank of India for charging an interest rate lower than the notified rate for term deposits.

“Woori Bank’s wider network of global branches appears to have resulted in a higher number of sanctions imposed,” an industry official said on condition of anonymity, adding that a larger presence is subject to increased regulatory scrutiny. .

Woori’s rivals across the city operate a smaller number of overseas branches – Shihan with 10, Hana with 10 and KB Kookmin with six.

Besides Woori, overseas subsidiaries of Hana Bank and KB Kookmin Bank also received a penalty each last year, DART said.

The Ho Chi Minh branch of KB Kookmin Bank was fined 160 million dong ($6,800) by the State Bank of Vietnam in May last year after it was discovered that the Korean bank did not had not checked whether it had obtained the approval of the financial authorities before transferring the interest earned abroad. offshore loans.

In September last year, Hana Bank China was also fined 15.76 million yuan by the state financial watchdog for insufficient foreign currency payment guarantees.

As local banks seek to expand their overseas presence, especially in light of the saturation of the Korean banking market, industry insiders see that Korean commercial banks will need to restructure in order to avoid such sanctions in the future. .

There were 204 overseas branches of domestic banks at the end of 2021, a year-on-year increase of seven, according to the FSS.

Of these overseas branches, 141 were in Asia, accounting for 69.1% of the total.

The net profit of overseas branches of local banks in 2021 also jumped to $1.1 billion from $446 million in 2020.

Local banks recorded the largest increase in net profit in Cambodia ($290 million), followed by Hong Kong ($214 million) and Vietnam ($172 million).

Woori Bank’s best-performing subsidiary is in Vietnam, where it made a net profit of 41.3 billion won ($33.5 million). It also made a net profit of 44 billion won in Cambodia. This is a 28% increase compared to the same period in 2021.

In Korea, Woori Bank posted a cumulative net profit of 214.4 billion won in the third quarter of last year.

By Song Seung-hyun (ssh@heraldcorp.com)

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