IBK staff issued ₩88.2B in improper loans — and the bank sat on the finding

On 26 March 2025, Industrial Bank of Korea CEO Kim Sung-tae issued a formal apology, a day after the Financial Supervisory Service disclosed ₩88.2 billion in improper loans uncovered during a routine audit. The watchdog found more than 20 individuals — including current and former IBK employees and affiliated parties — had systematically issued 51 improper loans between June 2017 and July 2024, with total exposure reaching ₩78.5 billion.

The FSS also accused IBK of attempting to conceal or downplay the misconduct internally and failing to report it to authorities, despite the bank becoming aware through its own internal investigation the previous year. As of the end of February, the balance of improper loans stood at ₩53.5 billion, with 17.8% already classified as non-performing and the default amount expected to rise further.

Kim attributed the scandal to weak internal controls, gaps in work processes and an unhealthy organizational culture, and convened executives to formulate corrective measures. IBK is creating a database of employees' relatives to eliminate conflicts of interest, requiring dual compliance confirmations from both the responsible employee and loan reviewer on every issuance, and setting up a dedicated internal unit to oversee approved loans.

Further reforms include an external expert overseeing internal whistleblowing, an audit advisory panel of internal and external specialists, an independent whistleblowing channel with safeguards against retaliation, and a 'Revitalization Committee' to institutionalize the changes.

More than 20 insiders issued 51 improper loans over seven years, and none of the bank's own controls caught them until a regulator's routine audit did.

Sales and credit review were not separated in practice; the fix mandates dual confirmations and a dedicated oversight unit.

The bank's first response to its own internal findings was to keep them internal — the regulator called it concealment.

Separating sales from credit review is a control, not a formality — when both roles answer to the same branch, the exceptions pile up quietly for years.

Kim vowed to restore trust through rigorous oversight and strengthened safeguards; the improper-loan balance of ₩53.5 billion was expected to default further.