Regional Financial Three Companies Also in Race to Appoint Bank Presidents by Early Next Year

Following major commercial banks, the three regional financial holding companies (BNK, JB, DGB) will also kick off the full-scale race to appoint the heads of their flagship banks from the end of this month through early next year. In the case of DGB Financial, which converted iM Bank into a commercial bank, attention is focused on whether Chairman Hwang Byung-woo will step down from his concurrent position as bank president. For BNK Financial, there is interest in whether the aftermath of the large-scale embezzlement incident at Gyeongnam Bank last year will have an impact.

According to the financial sector on the 25th, DGB Financial will hold the iM Bank (formerly DGB Daegu Bank) Executive Candidate Recommendation Committee on the 27th to begin the formal process of appointing the bank president. This follows the Financial Supervisory Service’s "Model Code of Corporate Governance for Financial Holding Companies," which requires succession procedures to be initiated three months before the expiration of the incumbent’s term for holding company chairpersons or bank presidents.

Currently, iM Bank’s president is concurrently held by Hwang Byung-woo, chairman of DGB Financial. Chairman Hwang was nominated as president of DGB Daegu Bank at the end of 2022 by the nomination committee and has served as bank president since the following year. After former chairman Kim Tae-oh decided to step down, Hwang became the youngest holding company chairman in April and has held both chairman and president positions concurrently. According to internal regulations, the bank president serves a two-year term, which can be renewed annually thereafter.

The key point to watch is whether Chairman Hwang’s concurrent holding of both positions will continue. Typically, the roles of holding company chairman and bank president are separated, but it has only been about four months since iM Bank transitioned into a commercial bank. Since Chairman Hwang’s appointment, iM Bank has been preparing for the transition to a commercial bank starting in 2023 and received approval from the Financial Services Commission for the transition in May.

A financial sector official said, "iM Bank has not yet fully established itself as a commercial bank," adding, "It is expected that there will be no major changes to the governance structure." A DGB Financial official also added, "It does not seem to be a situation where recruiting an external candidate is necessary at this time."

The terms of Ko Byung-il and Baek Jong-il, presidents of JB Financial’s two bank subsidiaries, Gwangju Bank and Jeonbuk Bank, respectively, will also end at the end of this year. Both banks have shown clear performance improvements this year. As of the first half of the year, Gwangju Bank posted a net income of 161.1 billion KRW, up 13.7% year-on-year, while Jeonbuk Bank recorded 112.7 billion KRW, up 10%. Since both presidents are serving their first terms, there is also an assessment that the prospects for reappointment are positive.

BNK Financial’s bank subsidiaries, Busan Bank and Gyeongnam Bank, have incumbent presidents Bang Sung-bin and Ye Kyung-tak, whose terms end in March next year, so the race to appoint new presidents is expected to begin around the end of this year at the earliest. Although there was a negative incident involving project financing (PF) loan embezzlement at Gyeongnam Bank, it occurred during the tenure of the previous chairman and president. Since both current presidents started their terms alongside Chairman Bin Dae-in, it is anticipated that there will be no major changes.