Son Byunghwan Appointed as NongHyup Bank President, Challenges Include Performance Management and Global Business

NongHyup Financial to Hold Executive Nomination Committee Meeting on 20th
Scheduled for Appointment at Shareholders' Meeting on 24th

[Asia Economy Reporter Kwon Haeyoung] Son Byunghwan, Vice President of NongHyup Financial Group, has been nominated as the next president of NongHyup Bank. If Son, known as a 'strategy and planning expert,' is confirmed as the final candidate on the 20th, he will assume the position of NongHyup Bank president. Starting with executive appointments at the end of this month, Son faces numerous challenges, including defending performance amid difficult internal and external management environments and achieving results in the underperforming global business compared to other banks.

According to financial circles on the 18th, NongHyup Financial Group will hold an Executive Candidate Recommendation Committee meeting on the 20th to conduct qualification verification and interviews for Vice President Son. If selected as the final candidate, the agenda for appointing the new NongHyup Bank president will be approved at the extraordinary shareholders' meeting on the 24th.

Son's first task upon taking office is expected to be building the Son Byunghwan administration through executive appointments.

With Son's appointment, the vice president position at NongHyup Financial Group will become vacant, and it is possible that an executive vice president from NongHyup Bank will move to fill it. Considering there are two vice presidents at NongHyup Financial Group and the timing is early in the year, it is more likely that an executive from NongHyup Bank or other affiliates will transfer to the financial group's vice president position rather than one vice president holding concurrent roles. Additionally, the executive vice president position, who is also the Chief Digital Officer (CDO) of NongHyup Bank, is currently vacant. With two out of fourteen executive vice president positions potentially vacant, follow-up appointments are expected. There is also a possibility of work adjustments among executive vice presidents.

A NongHyup Financial official said, "Once NongHyup Central completes representative appointments for each division by the end of this month, executive appointments for each affiliate will be coordinated. Although executive appointments are made at the group level, since bank executives need to work closely with the nominated Son, the intentions of the next president are likely to be reflected."

Given that Son is a digital finance expert, appointments for the digital executive vice president position are also drawing attention. Son has a deep understanding of digital transformation tasks, having introduced open API?the foundation of open banking?in 2015, the first among domestic banks, while serving as head of the Smart Finance Department at NongHyup Bank.

Since the inauguration of Lee Seonghee as the new president of NongHyup Central last month, a large-scale reshuffle of the management team has taken place, making the task of stabilizing the unsettled atmosphere and organization a challenge.

Son faces the burden of a challenging management environment. The benchmark interest rate has dropped to 0.75%, and the COVID-19 pandemic has rapidly cooled the economy, which was already losing momentum. Although NongHyup Bank's consolidated net profit steadily increased from 652.1 billion KRW in 2017 to 1.2226 trillion KRW in 2018 and 1.5171 trillion KRW in 2019 through loan asset expansion and interest income growth, net profit is expected to decline this year. Minimizing losses through loan soundness management, in addition to the decrease in interest income due to the decline in net interest margin (NIM), poses a greater challenge.

Building overseas business infrastructure, which is weaker compared to other commercial banks, is another knot Son must untie. NongHyup Bank generates revenue in locations such as New York, USA, Vietnam, and Cambodia, but the scale is at the initial stage, amounting to several billion KRW annually. Given that Son served as head of the NongHyup Future Management Research Institute at NongHyup Central, which acts as a think tank for overseas business, attention is focused on whether he can produce tangible results.

A financial industry official said, "Son is a strategy and planning expert who has experience across banks, financial groups, and NongHyup Central, skilled at drawing the big picture and possessing expertise in digital and global areas. Amid worsening internal and external conditions surrounding banking this year, it will be interesting to see how he overcomes these challenges."

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