Bank ATMs installed in a building in Seoul on June 28, 2024YONHAP
Losses from financial incidents at Korea's four major commercial banks have totaled nearly 550 billion won ($394 million) over the past decade. This has raised fresh concerns over persistent weaknesses in internal controls as fraud, embezzlement and breach-of-trust cases continue to recur despite repeated pledges to prevent them.
A total of 281 financial incidents occurred at Korea's four major banks — KB Kookmin, Shinhan, Hana and Woori — between 2017 and July this year, according to data submitted by the Financial Supervisory Service to Rep. Park Sung-hoon of the People Power Party, a member of the National Assembly's National Policy Committee, on Thursday. The cumulative value of the incidents during the period reached 549.5 billion won.
The year-by-year totals stood at 5.5 billion won in 2020 and 5.3 billion won in 2021 before surging to 89.5 billion won in 2022. It appeared to ease temporarily to 4.7 billion won in 2023 but soared again to 121.2 billion won in 2024. In 2025, the figure hit a record 231.9 billion won.
Another 30 incidents had already been reported as of July this year, involving 23.7 billion won.
Woori Bank ranked far ahead of its peers in terms of the cumulative amount involved. Its 70 incidents over the past decade cost the bank 284.3 billion won, accounting for more than half of the total at the four major banks. A major incident at its Indonesian subsidiary, among other cases, contributed to 115.6 billion won in financial incidents at the bank last year alone.
KB Kookmin Bank followed with 142.2 billion won across 73 incidents, while Hana Bank recorded 82.2 billion won across 77 incidents and Shinhan Bank 40.8 billion won across 61 incidents.
By type, cases of fraud stemming from inadequate loan screening accounted for more than half of the total amount, at 303.6 billion won across 149 cases. Banks commonly became targets of fraud after failing to thoroughly verify collateral values or the authenticity of documents during the loan review process.
Breach of trust in the course of business followed, accounting for 155.4 billion won across 30 cases, while embezzlement and misappropriation totaled 90.1 billion won across 90 cases. Theft and robbery accounted for 430 million won across 12 cases.
An employee organizes 50,000 won ($35) bills at Hana Bank in Jung District, central Seoul.NEWS1
The cases demonstrate significant gaps in commercial banks' internal controls.
An employee at one bank embezzled a total of 3.7 billion won by using their own accounts and those of acquaintances to make so-called unfunded cash deposits, in which deposits were entered into the bank's computer system without any actual cash being deposited, or by directly taking cash held by the bank.
An employee at another bank committed a breach of trust involving 2.3 billion won by improperly approving loans to acquaintances after arbitrarily raising their credit ratings.
Large-scale fraudulent loans involving outside parties have also recently hit commercial banks.
KB Kookmin, Shinhan, Woori and the Industrial Bank of Korea disclosed on Aug. 12 that they had been hit by external loan fraud involving a real estate developer and fraudulent buyers who allegedly conspired to obtain loans through deception. The case, which the police are currently investigating, involves losses totaling 49 billion won.
The repeated incidents have sparked criticism that many could have been prevented if rigorous internal control systems — covering everything from loan screening and follow-up management to cross-checking — had functioned properly.
"The constant recurrence of embezzlement, breach of trust and fraud at commercial banks, which should be the safest guardians of the public's valuable assets, is a serious problem that undermines trust in Korea's entire financial system," Rep. Park said.
"Financial authorities must no longer stop at perfunctory inspections but must hold the banks and their executives and employees strictly accountable for repeated financial incidents and swiftly introduce effective measures to strengthen internal controls and prevent recurrences.”
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
