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JB Financial Group |
[Alpha Biz= Reporter Kim Sangjin] JB Financial Group Fined 19 Million KRW by Financial Supervisory Service for Report Submission Violations and Poor PF Risk Management
On the 7th, the Financial Supervisory Service (FSS) announced a penalty of 19 million KRW and a management advisory to JB Financial Group for failing to comply with the obligation to submit business reports and for inadequate risk management of real estate project financing (PF).
According to the FSS's disciplinary announcement, JB Financial Group did not submit certain items in its business reports for 16 quarterly reporting periods during the inspection period. Additionally, the company failed to report the semi-annual status of inter-subsidiary delegated tasks within one month of the end of each half-year period, particularly regarding delegated loan operations. There were also discrepancies found in the reports that were submitted.
JB Financial Group violated the reporting obligation for inter-subsidiary delegated tasks. From November 11 to 19, 2019, JB Financial made minor changes to the delegation content by adding loan introduction tasks to the main task of loan recruitment under the delegation contracts between subsidiaries A, B (delegators), and C (delegatee). For example, C's mobile application was used to introduce loan products from A and B. These changes were not reported within one month after the end of each half-year period.
Moreover, JB Financial Group showed poor risk management concerning real estate PF loans handled by its subsidiaries. The group inadequately managed asset classifications, specifically for real estate PF loans classified as "substandard," which led to the provisioning of collective rather than individual bad debt allowances, posing a risk of under-provisioning.
Additionally, the FSS pointed out deficiencies in the internal control system and staff. The compliance officer team was small and lacked expertise. The FSS recommended that JB Financial Group pay more attention to managing its pool of outside director candidates, evaluation systems, and the continuous management of CEO candidates.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
