5 Major Bank CEOs' Reappointment Outlook... Overall 'Clear' with Woori and NongHyup 'Cloudy'

As the terms of the heads of the five major commercial banks expire at the end of this year, the prospects for their reappointments are showing different trends. While KB Kookmin, Shinhan, and Hana Banks are seeing green lights on the path to reappointment, the possibility of leadership changes is emerging at Woori and NH Nonghyup Banks, which have experienced consecutive internal control incidents.

According to the financial sector on the 22nd, the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) are currently in the process of selecting their next CEOs ahead of the expiration of their bank presidents' terms at the end of this year. Among the heads of the five major banks, except for Lee Jae-geun of KB Kookmin Bank who is attempting a third term, the others are all serving their first terms.

First, the bank presidents with a "clear" outlook for reappointment include Jung Sang-hyuk of Shinhan Bank and Lee Seung-yeol of Hana Bank. President Jung Sang-hyuk appeared as a relief pitcher succeeding the late Han Yong-gu, who resigned last year due to health issues, and is credited with contributing to organizational stabilization. Under Jung Sang-hyuk's leadership, Shinhan Bank recorded a cumulative net profit of 3.1028 trillion won in the third quarter, a 19.4% increase compared to the same period last year, marking an all-time high performance.

President Lee Seung-yeol also delivered remarkable results. Under Lee Seung-yeol's leadership, Hana Bank ranked first in net profit among banks last year and posted a cumulative net profit of 2.7808 trillion won in the third quarter. During the tenures of Presidents Jung Sang-hyuk and Lee Seung-yeol, no significant large-scale financial accidents occurred.

President Lee Jae-geun is also highly rated for the possibility of reappointment. Although the cumulative net profit as of the third quarter decreased by 8.3% year-on-year to 2.6179 trillion won due to losses from Hong Kong H-Share Index (HSCEI)-based equity-linked securities (ELS) this year, he was praised for his relatively smooth response to the Hong Kong ELS issue. Especially, in the context of former U.S. President Donald Trump's re-election and the resulting increased uncertainty, stable leadership is expected to play a significant role. The predecessor, former President Heo In, also served an additional one-year reappointment term on top of a 2+1 year term.

On the other hand, the bank presidents with a "cloudy" outlook for reappointment include Cho Byung-kyu of Woori Bank and Lee Seok-yong of NH Nonghyup Bank. Both presidents share the commonality of having experienced multiple internal control incidents. Cho Byung-kyu, who has led Woori Bank since July last year following the resignation of former President Lee Won-duk, faces four financial accidents this year and the scandal involving improper loans to relatives of former Woori Financial Group Chairman Sohn Tae-seung, which are considered Achilles' heels.

In particular, President Cho Byung-kyu is under comprehensive pressure from investigative and supervisory authorities. On the 19th, Woori Bank's headquarters, including Cho Byung-kyu's office, was included in additional search and seizure targets, and he himself was booked as a suspect on charges of failing to immediately report to financial authorities the illegal loan process after becoming aware of it following his inauguration (violation of the reporting obligation under Article 12 of the Act on the Aggravated Punishment of Specific Economic Crimes).

Woori Financial Group is holding a regular board meeting today. Attention is focused on whether a series of decisions regarding President Cho Byung-kyu's position will be made at this meeting. A financial sector official said, "Investigative and supervisory authorities are targeting the current management, including President Cho Byung-kyu and Chairman Lim Jong-ryong, so the board is reportedly wavering."

President Lee Seok-yong also faced difficulties due to six financial accidents this year. The newly appointed Kang Ho-dong, Chairman of the Nonghyup Central Association, declared that internal control issues would be a major criterion for judgment, which is a fixed factor. Chairman Kang stated that affiliates with major accidents would hold the CEO accountable and restrict reappointment. A banking sector official said, "It is rare for NH Nonghyup Bank presidents to be reappointed historically."