The Race for the Next Financial Group Chairmen Begins... What Are the Key Points to Watch?

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The race for the next chairmen of major financial holding companies has officially begun. With the terms of the chairmen at three major financial holding companies-Shinhan Financial Group, Woori Financial Group, and BNK Financial Group-set to expire early next year, Shinhan Financial Group has taken the lead in initiating the process to select its next chairman. While there is strong internal anticipation for reappointment at all three companies, this marks the first round of appointments for financial sector leaders since the current administration took office. Furthermore, the Financial Supervisory Service has announced plans to strengthen its verification process for the reappointment of financial holding company CEOs, suggesting that the screening criteria will be more stringent than in the past. As a result, fierce competition is expected both inside and outside the financial sector.

According to the financial industry on September 29, the terms set to expire in March next year are those of Shinhan Financial Group, Woori Financial Group, and BNK Financial Group. The term of Jin Okdong, chairman of Shinhan Financial Group, ends on March 26, 2025, while the terms of Lim Jongryong, chairman of Woori Financial Group, and Bin Daein, chairman of BNK Financial Group, both end on March 31, 2025. Among these, Shinhan Financial Group was the first to take action. On September 26, the Chairman Candidate Recommendation Committee of Shinhan Financial Group held a meeting and announced the commencement of the management succession process to select candidates for the next chairman and CEO.

Kwak Sookeun, chairman of the Shinhan Financial Group Chairman Candidate Recommendation Committee, stated, "With the initiation of the group’s management succession process, we plan to narrow down the pool of candidates through in-depth discussions moving forward," adding, "We will conduct the process transparently, based on independence and fairness."

According to the Financial Supervisory Service's "Best Practices for the Governance of Bank Holding Companies and Banks," the management succession process must begin at least three months prior to the expiration of the term. Accordingly, not only Shinhan Financial Group but also Woori Financial Group and BNK Financial Group are expected to begin their succession processes in the fourth quarter of this year.

All three companies have high internal expectations for the reappointment of their current chairmen. In particular, Shinhan Financial Group recorded a record-high net profit of 4.5175 trillion won last year, and in the first half of this year, it achieved a net profit exceeding 3 trillion won. Shinhan Bank also reclaimed its position as the leading bank for the first time in six years, based on last year’s record performance. Overseas performance is also strong. With double-digit growth rates in countries such as Vietnam and Indonesia, some in the industry predict that Shinhan Financial Group’s net profit will surpass 6 trillion won this year. This stable growth in performance is seen as clear evidence of Chairman Jin Okdong’s successful management.

However, failures in internal control are expected to be a burden. On October 11 last year, Shinhan Investment Corp. disclosed that it had incurred a loss of approximately 130 billion won from August 2 to October 2 due to futures trading on the exchange that deviated from its role as a liquidity provider for exchange-traded funds (ETFs). As a result, two executives at Shinhan Investment Corp. were dismissed from their positions.

Lim Jongryong, chairman of Woori Financial Group, is also regarded as having achieved the necessary results for reappointment. Since taking office, he has incorporated securities and insurance companies, establishing a comprehensive financial group encompassing banking, securities, insurance, credit card, and capital businesses. The group’s performance has been solid, with net profit surpassing 3 trillion won for the first time last year. Kim Eungap, a researcher at Kiwoom Securities, analyzed, "Woori Financial Group benefited not only from a reduction in one-off costs but also from improved non-interest income and increased interest income. Although the non-banking sector’s share is low, it contributed to performance improvement, and the insurance sector’s results will be reflected from the third quarter."

However, weaknesses in internal control remain a concern. After Chairman Lim took office, an employee at Woori Bank’s Changwon branch forged loan documents and embezzled approximately 17.8 billion won over 35 instances. In addition, during a regular inspection by the Financial Supervisory Service in February this year, improper loans totaling 233.4 billion won were uncovered, including an illegal loan of 73 billion won related to a relative of former Woori Financial Group chairman Sohn Taeseung. As a result, in March, the Financial Supervisory Service downgraded Woori Financial Group’s management evaluation rating by three levels and ordered 11 management cautions and 10 improvement measures.

Bin Daein, chairman of BNK Financial Group, has been recognized for leading the organization stably since taking office in 2023. In his first year, 2023, the group recorded a net profit of 639.8 billion won, and in 2024, achieved a record-high performance of 802.8 billion won, a 26% increase from the previous year. The group’s enterprise value, which is on par with major commercial banks, also raises expectations for his reappointment.

However, concerns about a regional economic slowdown and rising defaults on loans to small and medium-sized enterprises have led to a decline in asset quality indicators. BNK Financial Group’s delinquency rate, which had remained in the 0% range until last year, rose to 1.12% in the first quarter and 1.39% in the second quarter of this year. The group’s non-performing loan (NPL) coverage ratio has also fallen below 100% since the first quarter of this year, meaning the amount of non-performing loans exceeds the loan loss reserves.

Given that the Financial Supervisory Service announced in May this year its intention to initiate the management succession process for financial holding company CEOs earlier and to strengthen verification for long-term reappointments of financial holding company chairmen, it is highly likely that the standards for reappointment screening will become even more stringent.

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An official in the financial sector commented, "Excluding regional financial groups, the performance and visible achievements provide sufficient grounds for reappointment," but added, "Given the Financial Supervisory Service’s stricter screening criteria and the tradition of leadership changes in the financial sector when a new government takes office, it is difficult to guarantee reappointment."

Meanwhile, aside from the three companies whose terms are ending this time, the terms of Yang Jonghee, chairman of KB Financial Group, will expire in November 2026; Lee Chanwoo, chairman of NH Nonghyup Financial Group, in February 2027; Ham Youngjoo, chairman of Hana Financial Group, in March 2028; and Kim Kihong, chairman of JB Financial Group, in March 2028. Hwang Byungwoo, chairman of iM Financial Group, has concurrently served as bank president but will step down from that role and serve only as holding company chairman. Accordingly, the succession process to appoint the next president of iM Bank has begun. Chairman Hwang’s term as bank president runs until December this year, and his term as holding company chairman runs until March 2027.

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