According to the data released by a Bareunmirae Party lawmaker, foreign governments imposed sanctions or penalties on overseas branches or subsidiaries of local lenders from January 2015 to June this year on 59 occasions.
Of the banks, KEB Hana -- one of the big four commercial banks here -- was involved in the most cases, facing 19 sanctions or penalties.
|KEB Hana Bank headquarters in central Seoul (Yonhap)|
Hana Bank China, the lender’s Chinese subsidiary, was fined 1 million yuan ($141,000) by the Shanghai municipal government in April for “poor monitoring of its loan business.” Its Indonesian subsidiary, in the same month, was slapped with a fine equivalent to 8.5 million won in Korean won for breaching the Indonesian government’s reporting procedures on new businesses or products.
A spokesperson at KEB Hana cited the bank’s extensive overseas network behind the figures. The lender currently manages 12 subsidiaries and more than 100 branches overseas.
“(The number of sanctions) could be due to the size of our overseas network,” a KEB Hana spokesman told The Korea Herald.
“Financial institutions are expanding their global network because of the saturated local market, which require much caution in the process.”
Shinhan Bank, KEB Hana’s industry rival, was ranked No. 2 in terms of receiving most sanctions, with a total of 14 cases in the same period. The state-run Industrial Bank of Korea came at No. 3 with nine cases.
“Amid local financial institutions’ active overseas expansion, receiving sanctions from foreign governments is like building a wall in the act of foray -- we need to bolster the system and provide necessary education for the institutions to further prevent such cases.” lawmaker Yoo Ui-dong, who compiled the data, said.
By Jung Min-kyung (email@example.com)