By the End of This Year, CEO Terms Expire at Four Card Companies... Reappointment Hinges on 'Performance' (Comprehensive)

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 managed by CMS 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, among the eight major credit card companies, the terms of CEOs of four companies 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, expire in December. Except for Lee Dong-myeon of BC Card, who was appointed CEO in March this year and is likely to be reappointed, 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, who took office as CEO of Hana Card in March 2019, is approaching the end of his term in March next year.

Lim Young-jin of Shinhan Defends 'Industry No.1', Lee Dong-cheol of KB Kookmin Rises to 'No.2' After 9 Years

President Lim, who has led Shinhan Card since 2017, succeeded in maintaining profitability despite adverse internal and external conditions such as the reduction of merchant fees. In the first half of this year, Shinhan Card recorded a net profit of 302.5 billion KRW, maintaining its position as the industry leader. This figure represents 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 is credited with bringing a new wind to KB Kookmin Card. He improved KB Kookmin Card’s performance through business diversification such as overseas expansion and expansion of automobile installment finance. KB Kookmin Card recorded a net profit of 163.8 billion KRW in the first half of this year, a 12.1% increase 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, rising to second place for the first time in nine years since its spin-off from Kookmin Bank in 2011. The company is also accelerating digital transformation by introducing a next-generation system.

Jung Won-jae of Woori Hits with 'Card-ui Jeongseok', Lee Dong-myeon of BC Faces Performance Improvement Challenge

President Jung also delivered remarkable performance. Woori Card’s net profit in the first half of this year surged 19.9% year-on-year to 79.7 billion KRW. President Jung achieved this improvement with the 'Card-ui Jeongseok' series. The 'Card-ui Jeongseok' series, launched in April 2018, is also called the Jung Won-jae card because President Jung personally oversaw all product development processes from planning and marketing to plate design. Recently, the number of issued cards surpassed 7.2 million. The company 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 contrast, President Lee Dong-myeon was the only CEO among the eight credit card companies whose performance declined in the first half of this year. BC Card’s net profit fell 31.6% year-on-year to 53.8 billion KRW. 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 a structural perspective and demonstrate results in the digital sector, which is a future growth engine.

Reappointment Decisions... Will Emerge After Each Financial Holding Company’s Personnel Moves

The reappointment of each credit card CEO is expected to be decided in the second half of this year by the financial holding companies and the parent company KT. Since affiliate personnel decisions are made last, the fate of credit card CEOs will likely become clear around the end of the year after each financial holding company’s personnel decisions. KB Financial Group, which has already started the selection process, has President Lee’s name listed as a candidate for KB Financial Group chairman. Since President Lee mainly handled strategic planning at KB Financial Group, there is a possibility that he may take on a different role within the group depending on the outcome of this year’s chairman appointment. The reappointment of Presidents Lim and Jung is also expected to be determined based on the holding companies’ personnel decisions.

An industry insider said, "As the COVID-19 pandemic prolongs, performance management related to it will affect the reappointment of each CEO. 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.