Promising but Financial Sector Officials... Interest in 'Post Kim Jeongtae'

Financial Firms Achieve Record Performance Despite COVID-19
Attention on CEO Positions as Terms Expire

Kim Jung-tae, Chairman of Hana Financial Group

[Asia Economy Reporter Kiho Sung] Financial companies have achieved record-high performance even amid the COVID-19 situation, drawing attention to whether CEOs whose terms are expiring will be renewed. This year, with no large-scale incidents such as private equity fund scandals and most organizations having been reorganized last year, the prevailing view is that most CEOs will be reappointed. However, factors such as age-related governance norms, disciplinary repercussions, and the presidential election mean that changes cannot be ruled out.

According to the financial sector on the 10th, the most closely watched CEO term expiration by the end of this year or early next year is at Hana Financial Group. Among the five major financial holding companies, Hana Financial is the only one whose chairman’s term is expiring.

Chairman Kim Jung-tae’s term lasts until March next year. According to the current articles of incorporation, reappointment is not possible. Hana Financial’s internal governance rules stipulate that the chairman cannot exceed the age of 70. Although the articles of incorporation could be amended to allow reappointment, Chairman Kim clearly drew a line when asked by reporters at a meeting between the Financial Supervisory Service chief and financial holding company chairpersons on the 3rd whether he planned to seek reappointment, responding, "No."

Heo In, President of KB Kookmin Bank

The Chairman Candidate Recommendation Committee (Chairman CRC) for Hana Financial appointed outside director Heo Yoon as chairman in June and began managing the candidate pool according to the CEO succession plan. Vice Chairmen Ham Young-joo and Ji Sung-kyu, as well as Hana Bank President Park Sung-ho, are considered candidates for the next chairman.

At KB Financial Group, the terms of CEOs at eight affiliates, including KB Kookmin Bank President Heo In, are expiring. It is widely expected that the CEO Candidate Recommendation Committee (CCRC) will convene next month to proceed with appointments. The key issue is whether the outline of the ‘post-Yoon Jong-kyu’ era will emerge. Chairman Yoon’s term runs until November 2023. How the structure is shaped through this personnel move is crucial. In the case of President Heo, cautious forecasts suggest a fourth term. KB Kookmin Bank’s articles of incorporation do not have separate provisions on reappointment. If Heo succeeds in a fourth term, it will be the first case in the bank’s history.

Kwon Kwang-seok, President of Woori Bank

At Woori Financial Group, attention is focused on whether Woori Bank President Kwon Kwang-seok’s term will be extended. President Kwon was unusually appointed for a one-year term upon his first appointment last year and extended for another year this year. The financial sector is predicting reappointment, as he demonstrated breakthrough capability by achieving record-high performance and smoothly managing the private equity fund scandal.

At NH Nonghyup Financial Group, focus is on the possibility of reappointment for CEO Jung Young-chae of NH Investment & Securities. Since his appointment in 2018, CEO Jung has led the company to four consecutive years of record performance. This year, the company joined the ‘1 trillion won club’ in cumulative operating profit by the third quarter, a first among domestic securities firms. However, disciplinary action related to the Optimus scandal that surfaced last year has not yet been finalized, posing an obstacle. CEO Jung stated at this year’s National Assembly audit that he "has no thoughts about reappointment."

Shinhan Financial Group is the only major financial holding company without personnel issues. Chairman Cho Yong-byeong reappointed most executives last year, promising two-year terms.

A financial sector official explained, "The upcoming year-end and early-year personnel moves are attracting attention because they could influence financial sector governance one to two years from now," adding, "Also, due to the presidential election as a major variable, unexpected changes such as the replacement of financial holding company heads could occur, which is why this personnel move is receiving more focus."

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