[New Year's Message] Park Jung-rim and Kim Sung-hyun, KB Securities Presidents, "Strengthening Profit-Centered Management System"

[Asia Economy Reporter Oh Ju-yeon] On the 2nd, KB Securities CEOs Park Jung-rim and Kim Sung-hyun announced in their New Year's address that they will strengthen the profit-centered management system through enhancing business competitiveness and improving operational structure efficiency. They emphasized further strengthening asset management sales competitiveness and thoroughly reinforcing consumer protection such as preventing incomplete sales to enhance the competitiveness of the Wealth Management (WM) division, while achieving a meaningful leap in the corporate-related IB business, which has recently expanded its performance in the IB division. Below is the full text of the New Year's address.

◆ New Year's Address 2020

The year 2020, marking the start of a new decade, has begun with hope. In the new year of 2020, the Year of the Rat, let all KB Securities employees gather their passionate enthusiasm and start new challenges together.

This year, amid high uncertainty in domestic and international economic outlooks, we face a more challenging situation than ever, requiring us to overcome it through effective market response and management efficiency via innovation.

In the capital market, we must create investment performance by effectively responding to market issues such as the continued low-interest-rate environment. In the asset management market, we must devote ourselves to enhancing customer-centric competitiveness through seeking customer-centered investment solutions and digital innovation. Additionally, by pooling company-wide capabilities, we must further solidify areas of competitive advantage and secure a leading position in the securities industry by catching up with competitors and proactively advancing business in areas of competitive weakness and new business sectors.

In this environment, we must become the protagonists of the new decade through a 'strong KB Securities' possessing business competitiveness that provides optimal investment solutions to customers and an 'innovative KB Securities' with flexible and agile organizational capabilities. To this end, I ask all employees not to be complacent with their current positions but to approach their work with an attitude of infinite pursuit (無限追求), seeing through every task they start without pause, and to achieve the targeted results through meticulous implementation of the established management plans.

For 2020, we have set the company-wide management strategy direction as 'Strengthening a profit-centered management system through enhancing business competitiveness and improving operational structure efficiency.' We will not only continue to strengthen business competitiveness but also review the operational structure efficiency of business departments and supporting management systems to further reinforce a profit-centered management system.

To this end, we will focus on ① strengthening core and new business competitiveness and profitability, ② enhancing business competitiveness and efficiency based on digital technology, and ③ strengthening the foundation for sustainable growth through establishing an efficient management system.

First, regarding 'strengthening core and new business competitiveness and profitability,' please expand market dominance in businesses where competitiveness has already been secured, and carefully implement catch-up strategies to identify and improve causes of underperformance in weaker businesses. In particular, please strengthen profitability-centered analysis and evaluation systems by business to ensure efficiency and soundness of the business structure.

The WM division must further strengthen asset management sales competitiveness to firmly establish itself as the 2nd tier in WM AuM. The newly established Investment Solution Center and IPS Headquarters should fulfill their important role of systematically supplying competitive and stable financial investment products through active response to the low-interest-rate environment. WM sales should quickly internalize portfolio-centered asset management sales and the newly introduced ODS sales system to enhance efficient and advanced asset management sales capabilities.

Also, to secure competitiveness in non-face-to-face channels, M-able Land Tribe must achieve meaningful results amid fierce competition through innovative customer experience improvements and prime services. Especially in the WM business, the most important thing is building long-term trust relationships with customers. To this end, please thoroughly enhance consumer protection, including improving customer returns through customer-centered sales systems and preventing incomplete sales.

The S&T division should continue generating profits through its strength in bond management capabilities and elevate overseas bond management, proprietary asset management, and ELS hedge management capabilities to the industry's highest level to ensure stable profit generation even in various financial market conditions. Furthermore, due to anticipated difficulties from regulatory issues, please maintain sales competitiveness in derivatives trading through meticulous responses while fulfilling the role as a Product Factory.

The IB division should continuously pursue profitability expansion plans for DCM, growth investment, real estate, and structured-related businesses where competitiveness has been secured, and achieve meaningful results and leaps in corporate-related IB businesses such as ECM, acquisition finance, and issuance business, which have recently expanded their performance. Also, thorough preparation for new businesses related to public REITs and BDC should allow KB Securities IB to demonstrate its status both internally and externally by preempting the market.

The Wholesale division requires revolutionary changes in all aspects, including work processes, sales methods, and performance, to enter the normal track early. Please restore the reputation of KB Securities corporate sales by providing optimal solutions and services to institutional and corporate clients.

Additionally, regarding the OCIO operation business, a new fund management method for institutions, please secure systematic business capabilities centered on the newly established Investment Solution Center. For the global business, please create meaningful results in establishing a global matrix system and expanding overseas networks for mid- to long-term growth and business portfolio diversification.

Secondly, we must effectively promote 'enhancing business competitiveness and efficiency through digital technology utilization.' Digital technology is a crucial competitive factor that enables deeper analysis of customers' financial needs and more convenient services. This year, please focus on applying the accumulated digital capabilities to business process workflows by business to lead to practical business competitiveness enhancement.

To this end, I ask the Digital Innovation Headquarters and M-able Land Tribe to efficiently promote work through strategic linkage and close cooperation, and to ensure thorough support for non-face-to-face customer acquisition, successful establishment of the prime service model, and effective support of asset management sales through the introduction of the ODS sales system.

Furthermore, I ask the entire company to discover and promote tasks to accelerate digital-based work innovation, such as improving existing work processes, and substantially enhancing work efficiency using RPA and chatbots to build a smart work environment.

Finally, we will deeply pursue 'strengthening the foundation for sustainable growth through establishing an efficient management system.' The company continues efforts to allocate human resources efficiently by reorganizing the head office and branch organizational structures and implementing the personnel TO system. Along with promoting the enlargement and specialization (such as corporate sales) of WM sales channels, we plan to improve organizational efficiency through personnel redeployment.

Additionally, we will strengthen organizational culture improvement activities to raise employees' pride and focus on creating an agile KB Securities work culture through spreading a horizontal organizational culture and improving work methods. However, I ask executives and department heads to take the lead in change and demonstrate innovative leadership so that these organizational culture changes translate into tangible results and become internalized.

Along with this, I especially emphasize that all KB Securities employees prioritize customer-centered work execution as the highest value. Please meticulously check compliance with relevant regulations at all stages, including policy establishment, service development, work improvement, and sales promotion, to prevent operational risks and inefficiencies.

2020 is not only the start of a new decade but also an important time for KB Securities to achieve not only external growth as Korea's top financial investment company but also to build competitive organizational capabilities. By revitalizing our dynamic DNA and leveraging the consolidated strength based on experience and maturity, if all departments of the company take the initiative and proceed ahead of others with the attitude of 'Seonjeokjein (先則制人)'?meaning that if you act first, you can control others?I believe KB Securities can leap toward the top position in the industry.

Let us all always take pride in the name KB and as KB Securities professionals with the industry's best expertise and excellence, and face challenges together.

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