Hana Financial Group Narrows Next Chairman Candidates to 4... Will Kim Jung-tae Be Able to Serve Another Term?

Hwechuwi to Decide Final Candidate Group at Meeting on 15th
Final Candidates Confirmed After In-depth Interviews and Procedures

"Including Candidates for Organizational Stability of Hana Financial Group"

[Asia Economy Reporter Kiho Sung] As the term of Kim Jung-tae, Chairman of Hana Financial Group, expires next month, the process of selecting the next chairman has begun in earnest. The Hana Financial Group Chairman Candidate Recommendation Committee (Chairman Recommendation Committee) has finalized the shortlist of final candidates for the next chairman. In the financial sector, there is growing weight on the possibility of reappointment as Chairman Kim is included in the shortlist.

According to Hana Financial on the 16th, the Chairman Recommendation Committee held a meeting the previous day and, after a thorough in-depth evaluation, finalized a total of four candidates for the CEO chairman shortlist: three internal and one external.

The internal candidates include Chairman Kim, Vice Chairman Ham Young-joo of Hana Financial, and Vice President Park Sung-ho of Hana Bank, while the external candidate is former Korea Citibank President Park Jin-hoe, making effective competition possible. The Chairman Recommendation Committee had previously selected a long list of 14 candidates (9 internal, 5 external) after appointing a search firm in January.

To conduct a thorough verification of the candidates, the committee evaluated each candidate based on detailed evaluation criteria pre-established by the committee, including vision and mid-to-long-term management strategy, corporate spirit, career, expertise, global mindset, and network, and then selected the final four candidates.

Yoon Sung-bok, Chairman of the Hana Financial Chairman Recommendation Committee, stated, “In accordance with the CEO chairman succession plan and candidate recommendation procedures, we have fairly and transparently finalized the final candidate group, and the committee included candidates aimed at ensuring organizational stability of Hana Financial Group in the selection of the final candidates.”

The committee plans to finalize the next CEO chairman candidate after going through in-depth interviews and other procedures with the final candidates.

Weight Given to Chairman Kim Jung-tae’s Reappointment Possibility

This Chairman Recommendation Committee is somewhat delayed compared to previous cases. In 2018, the first meeting was held on December 22, 2017, and the final candidate was decided on January 22 of the following year. However, even if the schedule is delayed, there is expected to be no major problem in selecting the final candidate by the shareholders' meeting scheduled for mid-March. In fact, in 2015, the committee held its first meeting on February 6 and finalized the candidate on February 23 of the same month.

In the financial sector, a scenario is gaining traction that Chairman Kim will be reappointed and serve as chairman for the next year, as the COVID-19 situation is expected to enter a stabilization phase. According to Hana Financial’s 'Governance Best Practices,' there is no limit on the number of reappointments, only an age limit of 'up to 70 years old.' Chairman Kim is 69 this year and can extend his term by one more year. Chairman Kim has consistently expressed his intention not to seek reappointment.

The intentions of foreign shareholders are also a variable. Foreign ownership of Hana Financial stands at 67.20%. If the committee recommends a candidate with significant legal risks, it cannot be ruled out that ISS, an overseas proxy advisory firm, may recommend opposition.

Hana Financial’s strong performance is also a factor increasing Chairman Kim’s chances of reappointment. Despite the adverse conditions of COVID-19 last year, Hana Financial posted a net profit of 2.6372 trillion KRW, up 10.3% from the previous year (2019), thanks to the strong performance of non-banking sectors and diversification of the group’s business portfolio. This is the highest performance since the holding company was launched in 2005 and marks four consecutive years of net profits exceeding 2 trillion KRW since 2017.

The remaining variable is the negative view of the financial authorities and public opinion toward a long-term management system. Previously, Chairman Kim clashed with the Financial Supervisory Service (FSS) during his third reappointment in 2018. At that time, the FSS pointed out that it was unfair for the incumbent chairman to participate in the committee and requested a postponement of the next chairman candidate selection schedule, but the committee proceeded as planned and selected Chairman Kim as the final candidate.

A financial sector official said, “Even if Chairman Kim succeeds in reappointment, his term will end with a one-year extension,” adding, “Although the financial authorities are concerned about a long-term management system, since Chairman Kim’s term is not long, they are not expected to strongly oppose it.”

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