36-Year Shinhan Man Heo Young-taek Instills 'Science-Oriented' Management DNA at A Capital

Rational Number Management Essential for Profit and Financial Indicators
Shake Off Potential Insolvency and Make a Fresh Start with a Light Body
Balance Interest Income and Investment Income

"Finance is the character of numbers."

Huh Young-taek, CEO of A Capital, prefers a 'science-oriented' management style. He believes that all company indicators, such as profitability and soundness, must ultimately be proven by numbers. CEO Huh said, "Emphasizing numbers does not simply mean making a lot of money," adding, "In the finance industry, where trust is paramount, it means managing the essential numbers rationally."

Veteran financial industry expert Huh, who spent 36 years at Shinhan Financial Group, took the helm as a savior for A Capital in early last month. A graduate of Korea University’s Business Administration, Huh joined Shinhan Bank in 1987 and served as head of Shinhan Vietnam Bank, CEO of Shinhan Capital, and Chief Marketing Officer (CMO) of Shinhan Financial Group’s Group Management Division. He was a key strategist and finance expert within Shinhan Financial.

Heo Young-taek, CEO of A Capital, is explaining his management philosophy in an interview with Asia Economy.
[Photo by Heo Young-han]

Typically, when moving to a new organization, CEO Huh pursues major innovations within 3 to 6 months. His philosophy is that without change, there can be no progress. The first initiative he pushed at A Capital was to clean up potential non-performing assets. He believes that decisively addressing these issues increases market trust. CEO Huh explained, "During the JT Capital (now A Capital) era, several real estate project financing (PF) deals in corporate finance resulted in considerable losses," adding, "It would have been better to continue the business by setting aside reserves, but that was not done." He indicated that the potential non-performing assets will be addressed through a Big Bath (large-scale loss recognition), which may make last year’s performance appear poor numerically.

Currently, the capital industry is struggling due to rising funding costs from high interest rates and concerns over real estate PF defaults following Taeyoung Construction’s workout (corporate restructuring). A Capital also faced ups and downs last year due to deteriorating management and labor-management conflicts. However, in August last year, labor and management agreed on company normalization and began a large-scale corporate restructuring, seeking change. CEO Huh said, "In the capital industry, exposure related to Taeyoung Construction and non-performing loans related to self-employed loans are hot topics," adding, "A Capital has almost no related risks, so it can seize opportunities during this period."

CEO Huh plans to diversify A Capital’s business portfolio. He identifies three main revenue streams for capital companies: interest income, investment income, and fee income. While interest and fee income are relatively short-term revenue sources, investment income is a mid- to long-term source.

He emphasized that capital companies must have capabilities not only in retail and corporate finance but also in investment banking (IB). Among these, venture investment is key. When CEO Huh took office at Shinhan Capital in 2019, the first department he established was for early-stage startup investments. At that time, Shinhan Capital’s venture investment assets under management (AUM) reached about 500 billion KRW, exceeding many venture capital (VC) firms. Shinhan Capital, which previously earned less than 100 billion KRW annually, rapidly rose to become a core affiliate with net income approaching 300 billion KRW thanks to CEO Huh’s restructuring. He said, "Most global innovations, such as AI and secondary batteries, come from ventures," adding, "We will initially focus on interest income but gradually expand the portfolio toward venture investments to maintain balance."

This year, CEO Huh plans to closely monitor market conditions such as base rate cuts and management of non-performing companies, targeting niche markets like the non-performing loan (NPL) market. He also intends to readjust assets by selling existing long-term mortgage loans and acquiring more profitable assets.

CEO Huh is also focusing on communication with employees. From his first week, he has held meals and tea times with staff to listen to their concerns. He said, "I deeply felt the employees’ sincere desire to become a better company," adding, "I will mobilize all the know-how I have accumulated in the financial industry to create a company where they can work with pride."

Heo Young-taek, CEO of A Capital, is being interviewed by Asia Economy.
[Photo by Heo Young-han]

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