Financial Holding CEOs Cry Out "Crisis, Change, Innovation"

5 Major Financial Holding Company Chairmen's New Year Address Keywords
Triple Challenges of Economic Slowdown, Low Interest Rates, and Loan Regulations... Tech Companies Also Entering, Threatening Survival
Reset and Renewal, Preparing for the Worst-Case Scenario

[Asia Economy Reporters Haeyoung Kwon, Minyoung Kim] 'Crisis', 'Survival', 'Change', 'Innovation'.

These are the key management keywords for the financial sector this year, presented by the chairpersons of the five major financial holding companies in their New Year's addresses. Amid expectations that the financial sector will face a more challenging year than ever due to the 'triple hardship' of global economic slowdown, low interest rates, and loan regulations, along with the accelerated entry of IT companies into finance, domestic financial holding company chairpersons have called for strong changes and innovations to survive the crisis.

On the 2nd, KB Financial Group Chairman Yoon Jong-kyu stated, "The crisis is intensifying due to the global economic recession, instability in international financial markets, and the entrenchment of the 'three lows' phenomenon of low interest rates, low growth, and low inflation in the domestic economy. We are also facing new competition and threats as tech companies actively enter the financial industry." He emphasized, "Whether we become a market-leading 'leader' or fall behind as a 'follower' depends on how we overcome and utilize the crisis."

Shinhan Financial Group Chairman Cho Yong-byeong said, "In the era of the Fourth Industrial Revolution, to become an agent that leads change rather than an object led by change, we must transcend the boundaries of finance." He urged, "Let us break away from our internal perspectives and collaborate with various domestic and international companies such as fintech and big tech, and attempt the fusion of knowledge beyond industries through broad industry-academic and public-private cooperation." He presented 'Ilryu Shinhan' as this year's management keyword, which means pursuing a greater ideal of 'first-class' rather than just being number one. The methodology of Ilryu Shinhan emphasizes customer trust, openness in digital strategy, mergers and acquisitions (M&A), talent acquisition, and innovative finance supporting innovative ventures and small and medium enterprises.

Hana Financial Group Chairman Kim Jung-tae proposed 'reset' and 'rebuild', stating that the success formula of the past decade cannot guarantee growth and survival in the coming decade. He said, "Starbucks, now participating as a partner in a cryptocurrency exchange, is no longer just a coffee company but a 'bank without regulation.' Technological advances are significantly breaking down industry boundaries." He expressed, "We must create new business models and processes for the group to generate social value for the joy of all, not just customers."

The unified emphasis on change by the financial holding company chairpersons is rooted in a sense of crisis due to the worsening financial business conditions. This year, a decline in net interest margin (NIM) due to falling interest rates, an increase in potential bad debts due to economic downturn, and a slowdown in loan asset growth due to loan regulations are expected. The combined net profit forecast for this year for the four major financial holding companies?Shinhan, KB, Hana, and Woori Financial?is 11.4196 trillion won, a 2.47% decrease compared to last year's annual estimate of 11.7094 trillion won.

Woori Financial Group Chairman Sohn Tae-seung said, "With prolonged external uncertainties and the continuation of the 'three lows' phenomenon of low growth, low interest rates, and low inflation, the domestic and international economies are simultaneously in recession, making the environment surrounding the financial sector challenging again this year," urging a 'renewed determination.' NH Nonghyup Financial Group Chairman Kim Kwang-soo also emphasized, "Although no year has had perfect management conditions, this year is particularly unusual, so we must prepare for the worst. Let us redesign Nonghyup Financial to achieve a harmonious balance between profitability and soundness, and to meet the changing management environment and our era's mission."

Additionally, the financial holding company chairpersons stressed the restoration of financial consumer trust, as banks have recently suffered from the fallout of overseas interest rate-linked derivative-linked securities (DLS) investor losses this year.

This content was produced with the assistance of AI translation services.