7 Major Bank CEOs Including Suhyup Bank Facing Year-End Term Expiry... Renewal or Replacement?

Starting with Sh Suhyup Bank, the terms of office for CEOs of major domestic banks are expiring from the end of the year to the beginning of the next year, drawing public attention to the subsequent appointments. According to the financial authorities' "Best Practices on the Governance of Bank Holding Companies and Banks," which mandates that the succession process should begin three months before the current CEO's term expires, the appointment process is expected to accelerate from this month.

According to the financial sector on the 14th, Suhyup Bank will fully activate the CEO Recommendation Committee (CEO Committee) as early as November 14, or at the latest from the 16th, ahead of CEO Kang Sin-sook's term expiration on November 17. The Suhyup Bank CEO Committee consists of five members: three outside directors recommended by the Minister of Strategy and Finance, the Minister of Oceans and Fisheries, and the Chairman of the Financial Services Commission, and two members recommended by the Chairman of the National Federation of Fisheries Cooperatives. A final candidate must be selected with the consent of at least four members.

Since it is still early in the selection race, no candidates have confirmed their intention to run yet, but CEO Kang is highly likely to seek reappointment. Kang is the first female CEO in Suhyup Bank's history and achieved record-breaking performance in her first year in office. The net profit growth rate was 16.0%, surpassing major commercial and regional banks. However, in terms of portfolio expansion such as mergers and acquisitions (M&A) of asset management and capital companies, which were strategic moves for transitioning to a financial holding company, no significant achievements were made. Among past Suhyup Bank CEOs, only former CEO Jang Byung-gu has been reappointed.

As a competitor, Park Yang-su, Vice President and Chief Risk Officer (CRO) of Suhyup Bank's Risk Management Group, is mentioned. Vice President Park joined the National Federation of Fisheries Cooperatives in 1995 and has served as RM Branch Manager of Gangnam Corporate Finance Headquarters, Head of Jeonnam Regional Finance Headquarters, and Head of the Western Metropolitan Headquarters. A Suhyup Bank official said, "Once the CEO Committee schedule is set during the week, the committee chair will be elected, and it will be decided whether to proceed by soliciting CEO candidates or by recommendation," adding, "All candidates are still cautious at this point."

Except for Suhyup Bank, the terms of other bank CEOs are concentrated at the end of the year. Among the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup), the focus is on the future of KB Kookmin Bank CEO Lee Jae-geun, who is the only one currently serving a second term. CEO Lee successfully secured reappointment by receiving an additional one-year term under KB Financial Group Chairman Yang Jong-hee after completing his initial two-year term.

CEO Lee is evaluated to have delivered results, such as increasing operating profit by about 14.9% in the first half despite the provision issues caused by the Hong Kong H-Share Index (HSCEI) based equity-linked securities (ELS) loss incident earlier this year. Given that former CEO Heo In and others have served three consecutive terms, there is a possibility of an additional term. However, some note that this appointment is the second personnel decision since Chairman Yang Jong-hee's administration began, which is a point worth attention. A financial sector official said, "If Chairman Yang's first appointment emphasized 'stability,' the second appointment might emphasize 'change.'"

Shinhan Bank CEO Jung Sang-hyuk, who has been serving the remaining term of the late CEO Han Yong-gu since February last year, is receiving positive evaluations for contributing to organizational stabilization after the sudden leadership change and reclaiming the leading bank position with a net profit of 2.0535 trillion won in the first half, a 22.2% increase compared to the previous year. Similarly, for first-term CEO Lee Seung-yeol of Hana Bank, there is an interpretation that his term, which expires in March next year, may be linked to the future of Hana Financial Group Chairman Ham Young-joo.

For some bank CEOs, internal control issues may pose obstacles. Woori Bank CEO Cho Byung-kyu, who is serving the remaining term of former CEO Lee Won-duk, may be affected by incidents such as the embezzlement of 17 billion won by a deputy-level employee at the Gimhae branch and the fraudulent loans involving relatives of former Woori Financial Group Chairman Sohn Tae-seung. The same applies to NH Nonghyup Bank CEO Lee Seok-yong, who experienced a breach of trust incident involving about 6 billion won. Recently, Kang Ho-dong, Chairman of the National Agricultural Cooperative Federation, also sent a message stating that the reappointment of CEOs of affiliates responsible for financial accidents would be restricted.

Attention is also focused on the future of Hwang Byung-woo, CEO of iM Bank, which recently transitioned to a commercial bank. CEO Hwang concurrently serves as Chairman of DGB Financial Group. The industry expects Chairman Hwang to conclude his concurrent CEO role by the end of the year and appoint a new CEO. A local financial official said, "Currently, no candidates are being discussed, but typically, internal personnel have been selected," adding, "If a new CEO is appointed, they will face the challenge of responding to the performance decline following the transition to a commercial bank."

Park Jong-bok, CEO of SC First Bank, whose term expires in early January next year, has served four consecutive terms, and given SC Group's tendency not to replace CEOs without significant issues, many expect his reappointment to proceed smoothly. An SC First Bank official said, "The Executive Nomination Committee will be held by the fourth quarter at the latest," adding, "Currently, neither reappointment nor new candidates are being discussed."