Has the Era of Long-Term Rule Ended... Financial Holding CEOs Face Real Reshuffle

Shinhan, Woori, NH Nonghyup, BNK Financial Leadership Changes

[Asia Economy Reporter Yu Je-hoon] The era of long-term rule by CEOs of domestic bank-affiliated financial holding companies is coming to an end. This is because CEOs who had been considering reappointment amid repeated pressure from authorities have chosen to step down or retire early. While some view this as a drastic measure resulting from CEOs’ reckless attempts at reappointment, others criticize it as a return to new officialdom (Shingwanchi, 新官治).

According to the financial sector on the 20th, CEOs of four bank-affiliated financial holding companies?Shinhan, Woori, NH Nonghyup, and BNK Financial Group?have recently declared their retirement or were forced out mid-term. This means that leadership changes have become a reality in half of the eight domestic bank-affiliated financial holding companies (KB, Shinhan, Hana, Woori, NH Nonghyup, BNK, JB, DGB).

The prelude was sounded by BNK Financial Group. After allegations related to his children surfaced during last year’s National Assembly audit, former Chairman Kim Ji-wan resigned mid-term. Kim was an alumnus of Busan Commercial High School like the late former President Roh Moo-hyun and served as an economic advisor in Moon Jae-in’s presidential campaign in 2012. Former Busan Bank President Bin Dae-in has been appointed as the new chairman of BNK Financial Group.

The signal for the full-scale replacement was fired by Shinhan Financial Group. At Shinhan Financial Group, Chairman Cho Yong-byeong suddenly declared his retirement, and former Shinhan Bank President Jin Ok-dong was appointed as the next CEO and chairman. In the financial sector, Cho’s intention for a third term was relatively clear, and there were few obstacles in terms of performance, so this was regarded as a “surprise.” He cited the Lime scandal and said, “I thought someone should take overall responsibility” as the reason for his retirement.

Subsequently, at NH Nonghyup Financial Group, former Chairman Son Byung-hwan, who was expected to seek reappointment, stepped down, and former State Affairs Coordination Office Director Lee Seok-jun, who was part of President Yoon Seok-yeol’s campaign team, took the new chairman position. The crowning touch was at Woori Financial Group. After a prolonged standoff with authorities, Chairman Son Tae-seung announced on the 18th that he would give up reappointment and retire.

Since the 2010s, long-term rule by CEOs in the financial sector has become a kind of “new normal.” In particular, former Hana Financial Group Chairman Kim Jung-tae succeeded in an unprecedented four consecutive terms, leading Hana Financial Group, one of the four major domestic financial holding companies, for 10 years (2012?2022). The industry points out that the weakening of financial authorities’ “officialdom” compared to the past influenced this long-term rule. During the Lee Myung-bak administration, issues arose from collusion with political power such as the “four financial emperors,” and during the Park Geun-hye administration, the “Seo Geumhoe” was problematic. In response, the Moon Jae-in administration enforced a principle of non-intervention in private financial sector personnel, but this is criticized for having led to “internal governance” by financial companies instead.

A financial sector official said, “The previous administration’s decision not to intervene in private financial company personnel and to let go of officialdom ironically had the adverse effect of strengthening financial power,” adding, “While conglomerate chairmen take minimal gestures such as stepping back when causing social controversies, financial holding company CEOs chose long-term rule despite various financial accidents, which is evidence of this.”

However, there are also considerable criticisms that the recent wave of financial holding company chairmen declaring retirement under pressure from authorities is a return to new officialdom. A commercial bank official said, “The problem is not reappointment itself but that CEOs did not take responsibility despite various financial accidents,” and warned, “A return to new officialdom could be a misstep that repeats past bad practices.”

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