Banks, brokerages, insurers spent W2.4tr in entertainment expenses over last five years

(123rf)

South Korea’s financial sector, including banks, brokerage houses and insurers, spent a staggering 2.4 trillion won ($1.78 billion) on entertaining clients over the past five years, data showed Tuesday.

From 2019 through the first half of this year, banks, brokerages and insurance companies spent 957.8 billion won, 1.13 trillion won and 308.5 billion won, respectively, on entertainment expenses, according to Financial Supervisory Service data submitted to Rep. Kim Hyun-jung of the main opposition Democratic Party of Korea.

The five largest banks accounted for over 64.7 percent of total entertainment expenses by banks.

Rep. Kim voiced concern over mounting criticism aimed at the financial institutions following a series of reported cases of embezzlement, improper loans and other financial mishaps. “Given that the financial sector’s profits are fundamentally based on customer fees, it is important to strictly examine whether entertainment expenses are being used excessively or improperly."

Earlier in February, the FSS conducted on-site investigations into seven major securities firms, including Mirae Asset Securities, Korea Investment & Securities, NH Investment & Securities and Meritz Securities. The investigation revealed that a KB Kookmin Bank employee received golf outings from various brokerages for more than 15 times between January 2021 and June 2022. The employee was suspended from his post for three months in June 2023 for breaking the bank's integrity code.

Kim called for stronger oversight by financial watchdogs, as entertainment expenses continue to increase every year. “As there is a leeway for illegal activities, financial authorities need to signal that it will actively intervene and also come up with regulations, and not leave the matter to individual companies’ discretion.”

By Ahn Sung-mi(sahn@heraldcorp.com)