Bank Sector CEO Succession Process Kicks Off After Chuseok Holiday

The race to appoint the next chief executive officers (CEOs) of major commercial banks is expected to intensify after the Chuseok holiday.

On the 24th, approximately 14,426 ATMs have been removed from banks over about six years from 2018 to June this year, with ATMs of commercial banks installed on a street in Seoul. Banks are rapidly withdrawing ATMs citing maintenance costs such as ATM management and heating and cooling expenses. Photo by Jo Yongjun jun21@

According to the financial sector on the 16th, Shinhan Financial Group began operating its Subsidiary CEO Candidate Recommendation Committee (Sajeongwi) on the 10th. This marks the start of the succession process for subsidiary CEOs, including Shin Sang-hyuk, CEO of Shinhan Bank, whose term expires at the end of the year.

On the 23rd, sh Suhyup Bank plans to conduct interviews with six candidates for the bank president position. The current president, Kang Shin-sook, will complete her term in November. Similarly, the race to appoint the next presidents at KB Kookmin, Hana, Woori, and NH Nonghyup Banks, whose presidents’ terms also expire at year-end, is expected to accelerate.

The reason banks are rushing to appoint their next presidents is due to the "Best Practices for Bank Governance" issued by financial authorities. According to these best practices, each financial company must begin the management succession process at least three months before the CEO’s term expires. Considering that most presidents’ terms end at year-end, late September is the optimal time to start the succession process.

Currently, among the five major commercial bank presidents, Lee Jae-geun of KB Kookmin Bank is serving his second term, while Shin Sang-hyuk of Shinhan Bank, Lee Seung-yeol of Hana Bank, Cho Byung-kyu of Woori Bank, and Lee Seok-yong of NH Nonghyup Bank are serving their first terms. The financial sector believes that whether these presidents will be reappointed will ultimately depend on financial accidents and leadership changes.

An industry insider said, "(The current presidents) were affected by losses from the Hong Kong H-Share Index (Hang Seng China Enterprises Index, HSCEI)-based equity-linked securities (ELS) incident, but overall their performance was relatively good," adding, "However, some presidents may not escape the impact of successive financial accidents."

In this context, attention is focused on Woori Financial Group and Woori Bank, which are currently facing difficulties due to the recent scandal involving improper loans by relatives of former Chairman Sohn Tae-seung. The controversy has escalated to the point where not only the bank president but also the chairman’s position is being questioned amid delays in reporting.

Kim Byung-hwan, Chairman of the Financial Services Commission, recently stated at a press briefing, "I believe the current management feels a deep sense of responsibility regarding the financial accidents," and added, "Decisions regarding the management’s positions will be made by Woori Financial Group’s board of directors and shareholders’ meeting."