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Photo = Fair Trade Commission |
[Alpha Biz= Paul Lee] Seoul, South Korea – April 22, 2025 – The Korea Fair Trade Commission (KFTC) is expected to impose increased fines on the country’s four major banks following the conclusion of a reinvestigation into alleged collusion involving loan-to-value (LTV) ratios for mortgage lending.
According to financial industry sources, the KFTC on April 18 sent review reports to KB Kookmin Bank, Woori Bank, Shinhan Bank, and Hana Bank, outlining its findings and intentions to sanction the institutions for anti-competitive behavior.
The banks are accused of sharing approximately 7,500 sets of LTV data and aligning their mortgage lending conditions to similar levels. LTV ratios determine the maximum loan amount a bank will provide based on property value, and sharing such information could restrict market competition by standardizing loan conditions.
The banks, however, deny the allegations, claiming that the information exchange did not amount to collusion and resulted in no unfair profits. They argue that there were still notable differences in LTV ratios among the banks even after the data exchange, indicating that competition remained intact.
The KFTC had originally planned to reach a conclusion in November 2024, after holding two plenary sessions, but postponed its decision to conduct further fact-finding and ordered a reinvestigation.
If sanctions are finalized, this case will mark the first application of the revised Monopoly Regulation and Fair Trade Act, which introduced “information exchange collusion” as a punishable offense in 2020.
In its initial review, the KFTC calculated potential fines based solely on new mortgage issuances. However, the updated investigation includes loan renewals, which significantly increases the related revenue figures used to determine the fine.
Given the severity of the alleged violations, and the expanded revenue base, fines could exceed previous estimates in the hundreds of billions of won (several hundred million USD).
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
