4 Major Financial CEOs, This Year's Keywords: 'Crisis and Pivot Preparation'

4 Major Financial CEOs Deliver New Year's Addresses
Call for Risk Management and Expansion of Growth Engines

[Asia Economy Reporter Yu Je-hoon] The keywords for this year's financial industry, as presented in the New Year's messages by the CEOs of Korea's four major financial holding companies (KB, Shinhan, Hana, Woori), are summarized as 'crisis' and 'change.' Amid various adverse factors such as high interest rates, inflation, exchange rates, and real estate market downturns, risk management to prepare for crises, new growth engines to overcome them, and digital transformation were identified as key tasks.

According to the financial sector on the 2nd, Ham Young-joo, Chairman of Hana Financial Group, explained the crisis facing the financial sector by comparing it to the 'Maginot Line' that France built during the interwar period to prepare for Germany's invasion. The Maginot Line was considered an impregnable fortress at the time, but Germany bypassed it with a blitzkrieg after the outbreak of World War II and occupied France.

Chairman Ham said, "The crisis we face is becoming increasingly complex and diverse, but it seems we do not really feel it," adding, "Despite repeated serious crisis warnings, we have continuously achieved remarkable growth, but this cognitive dissonance may cause us to overlook the imminent crisis and overestimate ourselves."

Heads of financial authorities also unanimously named 'financial market stability' as the top priority this year. Lee Bok-hyun, Governor of the Financial Supervisory Service, set the goal of stabilizing the financial system in his New Year's message, stating, "We will thoroughly focus on preemptive management by intensively inspecting risks in real estate project financing (PF) and overseas alternative investments to enhance loss absorption capacity."

Accordingly, financial holding company CEOs also emphasized the need for 'risk management' to prepare for crises. Yoon Jong-kyu, Chairman of KB Financial Group, said, "In difficult times, what matters is not growing bigger but building the stamina to endure harsh winters and ice ages," urging resilience and adding, "Growth that solidifies fundamentals is more important than immediate profits." Sohn Tae-seung, Chairman of Woori Financial Group, also stressed, "Until the first half of the year, we must focus more than ever on asset soundness, capital ratios, and liquidity management to appropriately reserve strength," and added, "There are concerns about an illusion of soundness due to the extension of COVID-19 financial support, so it is necessary to strengthen potential risk management."

Securing new growth engines for a leap after the crisis and digital transformation were also presented as major tasks. Cho Yong-byeong, Chairman of Shinhan Financial Group, mentioned 'Byeonjiksaeng Jeongjiksa (變卽生 停卽死 - meaning 'change means life, stagnation means death'),' calling for ▲ data-based personalized finance ▲ world-class capital markets and global competitiveness ▲ strengthening ESG (environment, social, governance) and digital competitiveness. Chairman Ham also expressed a strong willingness to actively pursue partnerships and investments in non-financial sectors such as mobility, healthcare, and virtual assets, including M&A in non-bank sectors like insurance, cards, and asset management.

Chairman Sohn presented portfolio expansion, a key task for Woori Financial Group, as a major agenda. He said, "Until the first half of the year, we will focus on solid management, but we must also prepare the growth engine pivot to immediately seize upcoming opportunities," adding, "We will accelerate the expansion of the non-bank business portfolio, including securities, insurance, and venture capital (VC), which was postponed last year due to market instability."