Hana Bank Strengthens Outside Directors with Former Government Officials... Will Other Banks Follow? (Comprehensive)

13 Outside Directors of 5 Major Commercial Banks with Upcoming Term Expiration
Hana Bank Recommends Former Officials Nam Gi-myeong and Yoo Jae-hoon... Half of 6 Are Former Bureaucrats

Nam Gi-myeong, Head of the Preparatory Task Force for the High-ranking Officials' Crime Investigation Office (Gong-su-cheo) under the Prime Minister's Office (Former Commissioner of the Ministry of Government Legislation)

[Asia Economy Reporter Kim Min-young] As half of the external directors of the five major commercial banks reach the end of their terms this month, Hana Bank has significantly reinforced its board with former government officials. Nam Ki-myung, head of the Preparatory Task Force for the High-ranking Officials' Crime Investigation Office (HOCI) under the Prime Minister's Office, and Yoo Jae-hoon, former president of the Korea Securities Depository, were newly recommended as external directors. Previously dominated overwhelmingly by professors and finance professionals from the private sector, Hana Bank's external directors now have influential former government officials making up half of the board following these new appointments. This has led to speculation that other banks, which have suffered harsh trials due to hiring irregularities and financial accidents, might also follow the practice of recruiting powerful former government officials as external directors to serve as shields.

According to the financial sector on the 5th, Hana Bank recently recommended Nam and Yoo as new external director candidates. Born in 1952 in Yeongdong, Chungbuk, Nam entered public service by passing the 18th Administrative Examination. He mainly served at the Ministry of Government Legislation and was the Minister of Government Legislation (ministerial level) from April 2007 to February 2008 during the late Roh Moo-hyun administration. Because of this, he is known as a 'pro-Roh (pro-Roh Moo-hyun) figure.'

Nam, who served as a distinguished professor at Chungnam National University Law School from 2011 until last year, made a spectacular comeback early last month when he was appointed head of the Preparatory Task Force for the establishment of the HOCI under the Prime Minister's Office.

On the 3rd, the headquarters of Hana Bank in Jung-gu, Seoul, displayed the brand name "Hana Bank" without "KEB." Hana Bank announced that from this day forward, it will change its brand name from KEB Hana Bank to "Hana Bank" and embark on a new start as the New Hana Bank preparing for the next 10 years. Photo by Kim Hyun-min kimhyun81@

Yoo, the former president, is also a former government official. He passed the 26th Administrative Examination and held positions such as Director of International Cooperation and Director of Bank Supervision during the Financial Supervisory Commission era. He served as spokesperson for the Financial Services Commission in 2008 and as Director General of the Treasury Bureau at the Ministry of Strategy and Finance in 2009. He is one senior to Eun Sung-soo, the current Financial Services Commission chairman (27th Administrative Examination). Nam and Yoo will be officially appointed at the bank's shareholders' meeting on the 19th.

With Nam and Yoo recommended as new external directors, Hana Bank's external board, which previously consisted of four private sector members and one former government official, is now composed of three private sector members and three former government officials. Some speculate that this move is intended to place influential figures from the current government on the board to block external pressures. Incidentally, Hana Bank, along with Woori Bank, was recently sanctioned by financial authorities for incomplete sales of derivative-linked funds (DLF), receiving a six-month ban on new private fund sales and a fine amounting to 16.78 billion KRW.

Hwang Deok-nam, an external director of Hana Bank who recommended Nam, stated, "Considering the trend of increased emphasis on consumer protection and soundness management in the financial sector, along with strengthened legal and administrative regulations, we believe Nam has accumulated rich experience and know-how in related fields and can greatly contribute to Hana Bank's stable growth and development." Hana Bank maintains that the head of the HOCI Preparatory Task Force is not a public official, so there is no disqualification for appointment as an external director. The bank said, "We invited experts in law and finance to strengthen consumer protection and related areas."

Meanwhile, more than half (52%) of the external directors of the five major banks have terms ending at this year's shareholders' meetings. Only one person has reached the maximum term limit (5 or 6 years) and is subject to mandatory replacement, but this year, attention is focused on whether external directors eligible for reappointment will be replaced. Generally, reappointment is common unless term limits apply, but due to major financial accidents such as the large-scale losses from DLF and the suspension of redemptions at Lime Asset Management, the importance of internal controls in banks has increased, leading to expectations that many will be replaced. In the case of Hana Bank, existing external directors Ko Young-il and Hwang Deok-nam were recommended for a one-year renewal, but Kim Nam-soo, who completed a three-year term, will step down without renewal.

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