Reputation of BNK Financial Group Damaged as Employee Embezzles 300 Billion Won
SEOUL – In a shocking turn of events, Lee (50), an employee of BNK Gyeongnam Bank, was found to have embezzled approximately 300 billion won. The renowned global credit rating agency, Standard & Poor’s (S&P), expressed concerns over the impact this incident would have on the reputation of BNK Financial Group, the parent company of BNK Gyeongnam Bank.
According to S&P, “The internal control and reputational risks of BNK Financial Group have widened due to the theft committed by Kyongnam Bank employees. Weaknesses in the internal monitoring and control system may further burden the risk evaluation of the affiliated group.”
The Financial Supervisory Service had previously revealed that Mr. Lee, an employee of the Investment Finance Department, stole a staggering amount of 298.8 billion won. The theft resulted in a net loss of 59.5 billion won for Kyongnam Bank.
S&P highlighted several issues in their assessment, stating that “real estate project financing loans were not closely scrutinized, and reporting to financial authorities was delayed even after the incident was acknowledged. The lack of separation of duties for the employee in question, who had been handling lending and management work for the same department for 15 years, further compounded the problem.”
Despite these setbacks, S&P believes that the impact on BNK Financial Group’s business capabilities will be limited. “The group’s solid customer base will continue to support stable sales,” stated S&P. They added that the financial loss from the incident is within a tolerable range for the group.
Furthermore, S&P revealed that the theft-related loss of 59.5 billion won represents only about 5% of the group’s pre-tax profit last year. BNK Financial Group has already incorporated this loss into their financial statements for last year and the second quarter of this year. S&P anticipates that the group’s own recovery efforts will result in a smaller actual loss than initially estimated, with the potential to recover approximately 30 billion won.
Despite the alarming nature of the incident, BNK Financial Group remains determined to maintain stability and regain trust from their stakeholders.
Reporter: Kang Shin
▲ A gold bar found in the home of Lee (50), embezzled about 300 billion won by BNK Gyeongnam Bank. Standard & Poor’s (S&P), a global credit rating agency provided by the Seoul Central District Prosecutors Office, assessed that the reputation of its parent group, BNK Financial Group, was damaged in relation to the unprecedented theft of BNK Kyongnam Bank of 300 billion and won.
S&P said on the 22nd, “BNK Financial Group’s internal control and reputational risks are widening due to theft by Kyongnam Bank employees,” and “weaknesses in the internal monitoring and control system may add to the burden on risk evaluation -affiliated group. .” revealed.
Previously, the Financial Supervisory Service announced that, as a result of an investigation into the Gyeongnam Bank theft incident, it was confirmed that the amount of the theft by Mr. Lee (50), an employee of the Investment Finance Department, won 298.8 billion. Kyongnam Bank’s net loss due to theft was calculated to be 59.5 billion won.
S&P said, “It appears that real estate project financing (PF) loans were not closely scrutinized, and reporting to the financial authorities was delayed even after the circumstances of the financial event were acknowledged. “The employee in question had been doing lending work and subsequent management work in the same department for around 15 years, so there was no proper separation of duties,” he pointed out.
However, it is expected that this theft incident will not have a significant impact on BNK Financial Group’s business capabilities. S&P said, “BNK Financial’s solid customer base will continue to support stable sales. “The group’s financial loss due to the theft incident is at a tolerable level.”
He continued, “The extent of the theft-related loss (KRW 59.5 billion) is equivalent to about 5% of the group’s pre-tax profit last year. “BNK Financial Group retrospectively reflected the loss last month in its financial statements for last year and the second quarter of this year,” he said. He also said, “Considering the group’s own recovery efforts, the actual amount of the loss will be less than originally expected,” and “the group will be able to recover about 30 billion won or more.”
Reporter Kang Shin
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