Card Company CEOs with Terms Ending This Year Face 'Performance' as Key to Renewal

CEO Terms Expire at Four Card Companies This Year-End
Shinhan, KB Kookmin, Woori, and BC Cards
Performance and Crisis Management Crucial Amid Challenging Internal and External Conditions Including COVID-19

[Asia Economy Reporter Ki Ha-young] As the terms of the heads of credit card companies expire en masse at the end of this year, attention is focused on whether large-scale personnel changes will occur. It is expected that not only performance but also crisis management due to the prolonged COVID-19 pandemic and achievements in digital transformation as a future growth engine will influence their tenure.

According to the credit card industry on the 3rd, the terms of CEOs of 4 out of the 8 major credit card companies will expire at the end of this year. The terms of Lim Young-jin, President of Shinhan Card; Lee Dong-cheol, President of KB Kookmin Card; Jung Won-jae, President of Woori Card; and Lee Dong-myeon, President of BC Card will expire by December. Except for Lee Dong-myeon of BC Card, who is likely to be reappointed as he took office in March this year, all CEOs of financial holding company-affiliated credit card companies have completed the guaranteed three-year (2+1) term in the financial sector. Jang Kyung-hoon, President of Hana Card, who took office in March 2019, is scheduled to complete his term in March next year.

President Lim, who has led Shinhan Card since 2017, succeeded in maintaining profitability despite adverse internal and external conditions such as reduced merchant fees. In the first half of this year, he recorded a net profit of 302.5 billion KRW, maintaining the industry's top position. This is an 11.5% increase compared to the same period last year. President Lim diversified the business portfolio by expanding installment finance, leasing, long-term rental brokerage fees, and new financial products. He is also accelerating entry into new businesses based on big data, led by hyper-personalized services.

President Lee Dong-cheol also achieved performance improvement for KB Kookmin Card through business diversification such as overseas expansion and automobile installment finance. KB Kookmin Card recorded a net profit of 163.8 billion KRW in the first half of this year, up 12.1% from the same period last year. Notably, KB Kookmin Card surpassed Samsung Card in credit sales market share in the first quarter of this year, ranking second for the first time in nine years. This is the first time since it spun off from Kookmin Bank in 2011. The company is also accelerating digital transformation by introducing a next-generation system.

President Jung also posted remarkable results. Woori Card’s net profit in the first half of this year was 79.7 billion KRW, a sharp increase of 19.9% compared to the same period last year. President Jung achieved this performance improvement with the "Card-ui Jeongseok" series. The "Card-ui Jeongseok" series, also called the Jung Won-jae card, was directly overseen by President Jung from planning and marketing to plate design. Since its launch in April 2018, the series recently surpassed 7.2 million issued cards. President Jung is focusing on digital business by expanding and reorganizing a separate organization called the ‘Digital Group’ to accelerate digital projects such as data exchanges and MyData services.

In the case of President Lee Dong-myeon, BC Card was the only one among the eight credit card companies to see a decline in performance in the first half of this year. BC Card’s net profit was 53.8 billion KRW, down 31.6% from the same period last year. The company’s business structure, heavily focused on payment agency services, was significantly affected by COVID-19. Additionally, the company explained that depreciation expenses occurred due to large-scale investments such as the introduction of a next-generation system and the purchase of the Euljiro building. Since President Lee has only been in office for six months, it is expected that he will need to improve performance from these structural aspects and show results in the digital sector, which is a future growth area.

The decision on whether each credit card company CEO will be reappointed is expected to be made in the second half of this year by the financial holding companies and their parent company, KT. KB Financial Group, which has started the appointment process first, has included President Lee’s name as a candidate for KB Financial Group chairman. Since President Lee mainly handled strategic planning at KB Financial Group, depending on the outcome of this year’s KB Financial Group chairman appointment, there is a possibility that he may take on a different role within the group.

An industry insider said, "As the COVID-19 pandemic prolongs, performance management related to it will affect the reappointment of each CEO," adding, "Since the business environment surrounding credit card companies is changing due to the entry of big tech companies into the financial sector, digital transformation and business performance will also be important."

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