South Korea’s Financial Supervisory Service (FSS), the country’s financial regulator, began a regular inspection of KB Financial Group and KB Kookmin Bank on the 7th, the first such review since August 2024. About 20 inspectors are examining both entities, with on-site work expected to continue until mid-to-late October because the Chuseok holiday falls during the inspection period. The review is the first regular examination of a financial institution in the second half of this year and follows the FSS’s decision to shorten its inspection cycle from three years to two. A separate consumer protection inspection team formed this year will assess the design, review, sale and post-sale management of financial products, including compliance with the Financial Consumer Protection Act and the Individual Debtor Protection Act. Investigators will pay particular attention to high-risk products after KB Kookmin Bank was previously flagged over the misselling of approximately 8 trillion won ($6.0 billion) in Hong Kong H-Index equity-linked securities, as well as 89.2 billion won ($66.4 million) in improper loans across 291 cases. The inspection will also review the transparency of KB Financial’s chairman selection process, board independence, internal controls, credit procedures, information security, capital soundness, loan-loss reserves and loan-asset classifications. The FSS may revisit allegations that KB Kookmin Bank indirectly provided approximately 700 billion won ($520.8 million) to strengthen the soundness indicators of Bank Bukopin, now KB Bank, its Indonesian subsidiary. The inspection’s findings could influence confidence in the next chairman selection process and the group’s management, while the robustness of KB’s internal controls remains a central issue.