[1mm Financial Talk] Kang Seok-hoon: Despite "Reviewing Worst-Case Scenario," San-eun Faces Organizational Instability

Kang Seok-hoon, President of Korea Development Bank

[Asia Economy Reporter Bu Aeri] Amid ongoing financial market instability, including recent liquidity tightening triggered by Legoland-related issues, Kang Seok-hoon, Chairman of KDB Industrial Bank, has initiated internal measures urging to "consider even the worst-case scenarios." However, organizational management remains challenging as internal conflicts persist following the headquarters' relocation to Busan.

According to financial circles on the 8th, an internal bulletin titled "Chairman's Request" was posted on the intranet accessible only to Industrial Bank employees. Summarizing Chairman Kang's remarks from the executive meeting on the 4th, the post stated, "Due to a combination of domestic and external factors, market conditions have deteriorated since the second half of the year, and the severe situation of our economy is expected to continue into next year. It is necessary to closely monitor the operational status, liquidity, and funding demands of major affiliates and proactively prepare for the upcoming crisis."

Chairman Kang requested, "When conducting integrated crisis situation analyses, please include simulations of worst-case scenarios where special bonds such as Industrial Finance Bonds (San-geum-chae) and other special or unique bonds fail to be absorbed by the market." He also noted that due to Korea Electric Power Corporation's massive deficit, high exchange rates, and HMM's stock price decline, defending the year-end capital adequacy ratio (BIS ratio) at 13% would be difficult, emphasizing, "The Risk Management Department and Planning Division, along with related departments, must closely collaborate and make every effort to improve the BIS ratio."

Furthermore, Chairman Kang added, "Market liquidity contraction is expected to continue next year, and KDB Industrial Bank's capacity to supply funds will likely be limited due to a decline in the BIS ratio. Therefore, when establishing next year's business plans, they must be based on the principle of 'selection and concentration,' focusing on KDB's core business."

However, internal conditions at KDB Industrial Bank are as challenging as the difficult market environment. The chairman's directive, which essentially declared a state of emergency, received numerous critical comments from employees. Since the launch of the Yoon Seok-yeol administration, the 'Busan relocation' of KDB has become more tangible, and with Chairman Kang prioritizing the move to Busan, employee resentment has grown. The KDB labor union has been protesting against the Busan relocation for over 150 days. More than 100 employees have left KDB this year alone. Not only is there opposition to Chairman Kang, but the overall organizational atmosphere is also depressed.

One KDB employee pointed out, "All capabilities and focus are being poured solely into the Busan relocation, which is contradictory." Another employee criticized, "Currently, KDB's talented personnel are leaving one after another, and the organization is permeated with a sense of defeatism and lethargy. (Chairman Kang and others) need to wake up."

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