Next Spring, 70% of Financial Sector Directors' Terms End... Which Financial Leaders Face Reappointment?

52 Inside and Outside Directors of 5 Major Financial Holding Companies
37 (71.1%) to Complete Their Terms by March Next Year
Attention on Whether Political Figures Will Fill Vacancies
Chairmen Challenge Reappointment After Removing Legal Risks
Various Speculations Surrounding Bank Presidents' Positions

[Asia Economy Reporters Seungseop Song, Eunju Lee] Next spring, up to 70% of the board members of major financial groups are expected to change. This is due to the expiration of the terms of financial company heads and a significant number of outside directors who have served multiple terms. Attention is focused on whether the chairpersons of financial holding companies and the presidents of their affiliated banks will succeed in their reappointments and whether many new faces will appear in the financial sector.

37 out of 52 members’ terms expire... Who will fill the vacancies?

According to the Financial Supervisory Service and disclosures from each company as of the semiannual period on the 20th, the total number of inside and outside directors of the five major financial holding companies?KB, Shinhan, Hana, Woori, and NH Nonghyup Financial?is 52, of which 37 directors (71.1%) will have their terms expire before March next year. Shinhan Financial Group has the highest number with 12 out of 14 directors, and Hana Financial Group also has 9 out of 10 directors listed on the expected replacement list. KB Financial has 6, Woori Financial 5, and NH Financial 5.

In the financial sector, directors whose terms expire are usually reappointed according to regulations if there are no issues. However, each group has its own reappointment restrictions, so some replacements are certain. At KB Financial, where reappointment beyond five years is not allowed, three directors will be replaced; at Shinhan Financial and Hana Financial, which have a six-year limit, one and four directors will be replaced respectively. In the case of Woori Financial, since the authority of outside directors was transferred to the major shareholders after privatization, most are expected to remain unless there is an unexpected event.

The key question is who will fill the vacancies. Since this is the first director appointment after the new administration took office, there is speculation that individuals connected to the political sphere will be appointed. After the Moon Jae-in administration began in May 2017, many outside directors classified as pro-Moon (친문) were appointed. For example, Park Byung-dae, an outside director at Shinhan Financial, was a classmate of former President Moon at the Judicial Research and Training Institute, and Sunwoo Seok-ho, an outside director at KB Financial, was a high school classmate of Jang Ha-sung, then Blue House Policy Chief, and co-authored a paper with him.

Jo Yong-byeong and Sohn Tae-seung shake off legal risks and challenge reappointment

The reappointment or replacement of financial leaders is also a matter of interest. At financial holding companies, the terms of Jo Yong-byeong, chairman of Shinhan Financial Group; Sohn Tae-seung, chairman of Woori Financial Group; and Kim Ji-wan, chairman of BNK Financial Group, expire in March next year, while Sohn Byung-hwan, chairman of NH Financial Group, will see his term end at the end of December. Regarding key affiliates, Park Seong-ho, president of Hana Bank, will finish his term at the end of March next year, and Jin Ok-dong, president of Shinhan Bank, and Kwon Jun-hak, president of NH Nonghyup Bank, will finish theirs at the end of December.

Many analyses suggest that Chairman Jo has a green light to challenge a third term after resolving his biggest obstacle, legal risks. The Supreme Court confirmed his acquittal on June 30 regarding allegations of hiring irregularities during his time as Shinhan Bank president. In terms of performance, he successfully incorporated Shinhan EZ Insurance as a wholly owned subsidiary, and third-quarter net profits are expected to surpass those of KB Financial, indicating a smooth situation.

Chairman Sohn Tae-seung is in a similar position. Although he received a disciplinary warning from the Financial Supervisory Service related to overseas interest rate-linked derivative-linked funds (DLF), he won consecutive victories in the first and second trials of the subsequent cancellation lawsuits. Net profit surged 97.9% to 2.5879 trillion won last year and is expected to exceed 3 trillion won this year. Compared to other financial holding company chairpersons, he is relatively young, born in 1959, and has ample room before reaching the reappointment age limit of 70.

Chairman Sohn Byung-hwan’s reappointment depends on the chairman recommendation committee. NH Nonghyup Financial is 100% owned by the Nonghyup Central Association. Chairman Sohn has accumulated practical and managerial experience moving between NH Nonghyup Bank and the Central Association and is the first internally promoted chairman since the founding chairman Shin Choong-sik.

Kim Ji-wan, who took office in 2017 and succeeded in reappointment in 2020, is practically unable to be reappointed again. Born in 1946, he is the oldest among chairpersons, and BNK Financial’s internal regulations limit chairperson reappointment to once.

Various speculations surround bank president positions

There are various predictions regarding the future of Jin Ok-dong, president of Shinhan Bank. Having led Shinhan Bank for three years since his appointment in 2019, it is expected that his future will be decided around the end of this year. Along with speculation about simultaneous reappointment with Chairman Jo Yong-byeong, there is also a strong possibility of moving to the vice-chairman position of the holding company. A financial sector insider hinted, "Ultimately, since the holding company chairman effectively appoints the Shinhan Bank president, the next chairman’s personnel decisions will practically determine Jin’s future."

Park Seong-ho, president of Hana Bank, was a surprising appointment when he took office last year. With experience as president of Hana Bank Indonesia and global business experience, he is classified as an ‘overseas expert’ inside and outside the company. Since Park was selected by former Chairman Kim Jung-tae, the financial sector expects that the intentions of newly appointed Chairman Ham Young-joo will influence Park’s future.

Regarding Kwon Jun-hak, president of NH Nonghyup Bank, the prevailing view is that reappointment is unlikely. Traditionally, NH Nonghyup Financial considers regional balance when deciding bank president appointments. Except for former president Lee Dae-hoon, there have been almost no cases of approved reappointments. A financial sector insider said, "President Kwon has extensive experience in major departments of Nonghyup Bank and strong internal control, but this competitiveness might be a reason the Central Association does not consider reappointment."

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