South Korea’s Woori Bank, one of the country’s largest financial institutions, has disclosed a credit fraud scandal involving its Indonesian subsidiary, PT Bank Woori Saudara Indonesia (SDRA), which centers around a local medium-sized export company and involves a total credit value of US$78.5 million (Rp1.28 trillion).

“Bank Woori Saudara has confirmed the fraud allegations involving an Indonesian company it conducted business with,” Woori Bank stated in an official announcement on its website dated June 2, 2025, as reported by Business Korea.

The case emerged after Woori Bank identified suspicious transactions during an internal review, raising concerns about the adequacy of internal control procedures. The Indonesian export firm reportedly submitted letters of credit containing inaccurate information to Bank Woori Saudara, raising red flags for possible fraudulent guarantees of export payments.

Although the total loss is still being assessed, Woori Bank acted swiftly by dispatching representatives from its global unit to Indonesia. Their goal is to evaluate the situation and secure the outstanding debt to limit financial damage.

The implicated company has informed the bank of its willingness to repay the debt. It has also provided documentation outlining its financial capability and proposed payment schedule.

“We will cooperate closely with the local authorities to ensure the matter is addressed in accordance with the law,” a Woori Bank spokesperson stated.

According to Bank Woori Saudara’s financial report as of March 31, 2025, total credit disbursement reached Rp47.94 trillion, marking a slight increase of 3.56 percent compared to Rp46.29 trillion in the same period last year.

Loan loss provisions rose sharply to Rp864.83 billion in March 2025, up 15.38 percent from Rp749.56 billion in March 2024. Gross non-performing loan (NPL) ratio also climbed to 2.26 percent, an increase of 62 basis points from 1.64percent a year earlier. Meanwhile, the net NPL ratio stood at 1.56 percent, up from 0.91 percent.

Despite the incident, Bank Woori Saudara recorded a net interest income of Rp433.53 billion in Q1 2025, a 10.13 percent year-on-year increase. Net profit also rose slightly by 2.1 percent to Rp154.33 billion.

The ongoing investigation and recovery efforts are expected to test the bank's risk management resilience, particularly in its overseas operations.