Joint or Sole... Kakao Bank Takes a Breather Ahead of Leadership Reshuffle

No Absolute Insistence on Co-CEOs Atmosphere
Challenge of Balancing Identities Between Financial Companies and ICT Firms

Democratic Party leader Lee Hae-chan and Lee Yong-woo, the 7th talent recruit of the Democratic Party and co-CEO of KakaoBank, are taking a commemorative photo at the talent recruitment event held at the National Assembly in Yeouido, Seoul, on the afternoon of the 12th. From left to right in the photo are Representative Seol Hoon, leader Lee Hae-chan, KakaoBank co-CEO Lee Yong-woo, and Representative Park Kwang-on. (Photo by Yonhap News)

[Asia Economy Reporter Kim Hyo-jin] Whether to maintain the co-CEO system or transition to a sole CEO system under Yoon Ho-young. Kakao Bank Korea (Kakao Bank) appears to be taking a breather ahead of restructuring its management system following the political recruitment of co-CEO Lee Yong-woo.

According to financial circles on the 20th, Lee, who was recently selected as the Democratic Party's '7th recruitment talent' and has expressed his intention to resign from Kakao Bank, is currently in the final stages of handing over his duties, focusing on minimizing the gap caused by his departure. A Kakao Bank official said, "It will take a little more time to finalize Lee's resignation," adding, "As usual, he is processing remaining tasks while concurrently using his annual leave."

Kakao Bank is expected to make a decision regarding its future management structure through a board meeting after the Lunar New Year holiday. If Kakao Bank decides to maintain the co-CEO system, it must hold a nomination committee meeting before the shareholders' meeting scheduled for the end of March to appoint Lee's successor. If the co-CEO system is not maintained, co-CEO Yoon will lead Kakao Bank as the sole CEO. Yoon's term lasts until January next year.

Inside Kakao Bank, there is reportedly a growing sentiment that "there is no need to insist on the co-CEO system just because it has been that way so far." Given that Kakao Bank has a stronger ICT company profile compared to traditional banks, the logic is that management efficiency could be maximized if co-CEO Yoon holds full authority.

Co-CEO Yoon has worked to integrate information and communication technology into finance, based on his experience as head of ERGO Daum Direct's management planning team, head of Daum Communications' management support division, and vice president of Kakao Mobile Bank's task force team (TFT). The fact that Kakao Bank turned profitable within two years of its launch and surpassed 11 million customers is largely seen as a result of not being trapped by the organizational logic of a 'financial company,' but rather embracing its identity as an internet-only bank.

On the other hand, there are voices saying that for the second half of this year’s initial public offering (IPO) and other purposes, the financial company image symbolized by co-CEO Lee should be made clearer. Lee, a former research fellow at Hyundai Research Institute, entered the financial industry as an executive director at Dongwon Securities and has nearly 20 years of experience as a 'finance man,' having served as head of strategic planning at Korea Investment Holdings, head of asset management at Korea Investment & Securities, and chief investment officer at Korea Investment Trust Management. A financial industry insider said, "There seems to be significant internal debate over whether Kakao Bank is a bank or an ICT company."

Another key factor is the judgment of Korea Investment Financial, the second-largest shareholder. Originally, Korea Investment Financial was the major shareholder of Kakao Bank, but in November last year, based on the Internet-only Bank Special Act, Kakao became the major shareholder. Currently, Kakao holds 34%, Korea Investment Financial holds 5% minus one share, and Korea Investment Financial’s subsidiary, Korea Investment Value Asset Management, holds 29% of the shares.

Meanwhile, following the resignation of former Korea Investment Financial vice chairman Kim Joo-won from Kakao Bank’s inside director position in December last year, and the departure of co-CEO Lee, who is also from Korea Investment Financial, there is analysis that the link between Kakao Bank and Korea Investment Financial will somewhat loosen. Although Korea Investment Financial has stepped down to the second-largest shareholder, it still holds significant influence, and given the high symbolic value of the 'Korea Investment Financial-Kakao synergy,' there is also a view that it will somehow remain involved in management.

Co-CEO Yoon Ho-young

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