OK Financial faces double-edged sword of official recognition as conglomerate

The Korea Times

The Korea Times

Finance

Thu, November 30, 2023 | 07:18

Companies

OK Financial faces double-edged sword of official recognition as conglomerate

Posted : 2022-04-30 09:31

Updated : 2022-05-02 14:36

The signboards of Rush & Cash, a private money lending brand, which belongs to OK Financial Group, and the group's second-tier banking brand, OK Savings Bank, are seen on a building in Seoul in this file photo taken in June 2021. Korea Times file

By Yi Whan-woo

OK Financial Group has grown into a conglomerate that is large enough to be listed on the Fair Trade Commission's (FTC) corporate watch list, which sources say will help improve the group's negative image ― an image that is heavily associated with the private money lending business.

Yet, at the same time, being on the list is expected in some ways to put the brakes on the group's vision to accelerate growth and expand into every possible financial sector.

The company's vision is based on the premise that fewer regulatory barriers would prompt the firm to expand.

However, now that is on the watch list, it will be subject to tougher filing regulations concerning anti-trust practices, and accordingly, will have to act more responsibly.

The group was added to the watch list, which was updated by the FTC, April 27, after the company initially started as a private money lender over 20 years ago.

The FTC list is comprised of large business groups with assets of 5 trillion won ($3.9 billion), including global brands such as Samsung, SK, Hyundai Motor Group and LG.

The assets of OK Financial Group amounted to 5.22 trillion won as of 2021.

In addition, the number of subsidiaries reached 15 after its chairman, Choi Yoon, started in the private money lending business and then expanded to other services, including second-tier banking business.

The majority of OK Financial Group's 15 subsidiaries are largely still involved in the private money lending business.

"On the occasion of FTC's designation of the company onto the watch list, we will pursue a form of management that is more transparent and ethical," OK Financial Group said. "We will also be faithful in our social responsibility as a financial services firm dedicated to regular citizens."

Concerning its private money lending arms, the group said it has been contemplating on "clearing them up," noting that such a move will be a part of the measures necessary to "transform into a comprehensive financial services provider."

Against this backdrop, a source said that being on the FTC list may be helpful in "shaking off the tag of being the country's leading private money lender."

The source went on to say that joining the list "is not something that should be welcomed in every instance," arguing that, for years, the FTC list has been seen as associated with "outdated regulations that dent the competence of the targeted companies."

"Being on the list means being burdened with more regulations, and this will be the reality faced by OK Financial Group from now on," the source added.

yistory@koreatimes.co.kr