"Organizational Stability First"... 'Troubleshooter' Kwon Kwang-seok, Will He Untangle the Knots Between Woori Financial and Authorities? (Comprehensive)

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[Asia Economy Reporter Kwon Haeyoung] Kwon Kwangseok, CEO of the National Credit Guarantee Federation of Saemaul Geumgo, has been appointed as the next CEO of Woori Bank. The financial sector views this as a 'surprise.' Kwon is considered free from responsibility for the derivative-linked fund (DLF) scandal that shook Woori Bank and is praised for having a solid network across the financial sector, government, and National Assembly through his extensive external work experience. It is analyzed that the outside directors appointed Kwon as the next CEO to improve the uncomfortable relationship with financial authorities. Attention is also focused on whether the Son Taesung-Kwon Kwangseok administration will sail smoothly as the bank and holding company CEOs are separated.

On the 12th, Kwon said in a phone interview with Asia Economy, "Woori Bank's current 'triangular axis' of system, customer trust, and mutual trust and confidence among employees has collapsed," adding, "The top priority is to restore trust and confidence among employees and stabilize the organization. We must comfort frontline employees who interact with customers, care well for customers, and become a bank that helps customers to return to normal management."

When asked about efforts to improve relations with financial authorities, he was cautious but said, "I will do my best." He added, "Having been away from the organization for two years, I can view things objectively," and "If there are misunderstandings or mental barriers, I will ask for understanding."

One reason for Kwon's appointment is seen as improving relations with financial authorities. Kwon is an external figure who had been away from Woori Bank for two years, and his wide network, affability, and breakthrough ability built through public relations and government liaison work are cited as strengths. Initially, Kim Junggi, head of Woori Bank’s division who had worked closely with Chairman Son, was considered the leading candidate for the next CEO, but some outside directors, including those from IMM Private Equity, opposed this, leading to Kwon’s appointment. Concerns arose that appointing someone close to Chairman Son as CEO, following Son’s challenge to the heavy disciplinary action over the DLF scandal through administrative litigation to extend his term, could further strain relations with financial authorities. It is also rumored that financial authorities preferred Kwon as the next CEO. Ultimately, the consensus inside and outside Woori Financial Group is that Kwon was appointed as a 'troubleshooter' to manage the broken organization and improve communication and relations with financial authorities.

The financial sector is paying attention to the future dynamics between Chairman Son and Kwon. Woori Financial Group relies heavily on the bank, which accounts for 90% of the group’s total assets and profits. Since the holding company’s launch in January last year, the group has expanded its affiliates through mergers and acquisitions (M&A), but acquisitions of securities and insurance companies remain, so the holding company structure is far from complete. The choice of a dual role for the holding company chairman and bank CEO by Woori Financial Group’s board at the start of last year was based on this background.

Currently, both stabilizing the bank organization and completing the holding company structure are major tasks for Woori Financial Group. It is expected that Chairman Son will focus on strengthening the holding company system, while Kwon will concentrate on stabilizing the bank organization, working in harmony. However, some cautiously raise concerns that the chairman and CEO might check and balance each other, potentially causing discord. Regarding this, Kwon told reporters on the day, "There is absolutely no problem with (Chairman Son). When I was executive vice president of the IB Group, Chairman Son was the boss. We helped each other a lot when we were in the global group."

Meanwhile, Woori Financial Group’s Executive Candidate Recommendation Committee recommended CEO candidates for six subsidiaries. Kim Jongdeuk, current executive vice president of Woori Bank’s Treasury Market Group, was newly appointed CEO of Woori Investment & Securities; Cho Soohyung, current executive vice president of Woori Bank’s Consumer Brand Group, was appointed CEO of Woori Credit Information; and Ko Youngbae, current managing director of Woori Bank’s Trust and Pension Group, was newly appointed to Woori Fund Service.

Chairman Son has significantly strengthened the Woori Financial Group organization. The number of vice presidents at the holding company increased from two to six, and managing directors and senior managing directors from three to eight. The Strategy, Public Relations & Brand, and Financial Consumer Protection departments were newly established. Since completing the holding company system through diversification of affiliates is urgent, efforts will be focused on building the holding company system through future M&A activities.

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