KB Kookmin Bank Discloses $2.6M Loan Fraud as Shinhan, Woori, IBK Losses Balloon

KB Kookmin Bank, the banking arm of KB Financial Group, disclosed on August 12 that it uncovered a financial accident worth roughly 3.578 billion won caused by fraud involving outside parties. According to the disclosure, the scheme ran from September 2023 to December 2024 and came to light after a branch filed a routine report on significant business matters. The bank has not yet finalized how much it expects to lose from the case.

KB Kookmin Bank said it believes developers and fictitious property buyers colluded to defraud the bank through fraudulent loan applications. Investigators are now looking into people connected to the scheme, and the bank said the episode is under a separate criminal probe by authorities.

The disclosure landed on the same day Shinhan Bank sharply revised its own fraud-related loss upward, to about 17.34 billion won. Shinhan's case has been growing steadily: it was first disclosed at roughly 2.96 billion won last December, then raised to about 6.97 billion won in June, and has now nearly tripled again. Shinhan said it is cooperating with a police investigation and working to recover funds by selling collateral and taking steps to protect its claims.

Woori Bank also raised its disclosed loss the same day, from about 4.08 billion won to roughly 9.86 billion won, while extending the period covered by the fraud from a matter of days in August 2024 to a stretch running through April 2025. Woori said the case centers on a real-estate-related outside party who submitted forged documents, and that its review turned up additional cases using the same method.

IBK, the state-run industrial bank, similarly widened its disclosed loss from about 4.79 billion won to roughly 18.22 billion won, extending the fraud period from late 2024 through October 2025. IBK said it is continuing its own investigation and plans to pursue criminal complaints and other legal action once any unlawful conduct by outside parties is confirmed.

Taken together, the four banks' disclosed fraud losses now add up to roughly 49 billion won. Because Shinhan, Woori and IBK all revised their figures upward mid-investigation, analysts say the pattern raises fresh questions about the adequacy of banks' loan screening and internal-control systems. Industry watchers caution that the publicly disclosed amounts are not final losses, since actual damage will depend on the outcome of investigations and how much banks recover through collateral sales and other measures.