Bulletin: Woori Bank's Embezzling Case Raises Internal-Control Risk

HONG KONG (S&P Global Ratings) May 3, 2022--The arrest of an employee for suspected embezzlement at Woori Bank points to increasing risks on the bank's internal control and reputation. We believe the incident is less likely to materially damage the Korean bank's established franchise and ability to conduct business. We expect financial losses related to the embezzlement will likely be manageable. Woori Bank recently accused an employee of embezzling a significant amount of about Korean won (KRW) 61.5 billion in total. The allegedly stolen funds were contract deposits that Woori Bank has held since 2010 related to an Iranian company's failed acquisition deal in Korea. The amount is equivalent to about 2% of the bank's annual pretax profit in 2021

...May 3, 2022 HONG KONG (S&P Global Ratings) May 3, 2022--The arrest of an employee for suspected embezzlement at Woori Bank points to increasing risks on the bank's internal control and reputation. We believe the incident is less likely to materially damage the Korean bank's established franchise and ability to conduct business. We expect financial losses related to the embezzlement will likely be manageable. Woori Bank recently accused an employee of embezzling a significant amount of about Korean won (KRW) 61.5 billion in total. The allegedly stolen funds were contract deposits that Woori Bank has held since 2010 related to an Iranian company's failed acquisition deal in Korea. The amount is equivalent to about 2% of the bank's annual pretax profit in 2021 or about 0.3% of its shareholders' equity as of end-2021. The ratings (A+/Stable/A-1) could come under pressure if the incident develops and significantly threatens the stability of the bank's management and governance or hurts the bank's...

Bulletin