Chairman and President Both Former Non-Bank CEOs
KB Financial Has Many CFO CEOs
Yang Jong-hee Regime Fully Launched
Lee Hwan-joo, CEO of KB Life Insurance, has been selected as the next candidate for KB Kookmin Bank president. If he receives final approval at next month's shareholders' meeting, he will become the first case in KB Financial Group where a CEO of a non-bank affiliate directly assumes the position of bank president. Although KB Financial Group Chairman Yang Jong-hee also served as CEO of KB Insurance, a non-bank affiliate, he subsequently served as vice chairman of KB Financial Group.
On the 28th, KB Financial Group announced that its affiliate CEO candidate recommendation committee (Daechuwi) held a meeting the previous day and unanimously recommended CEO Lee Hwan-joo as the next candidate for KB Kookmin Bank president.
Both Holding Company Chairman and Bank President Are Former Non-Bank Affiliate CEOs
It is being discussed as a unique case in the financial sector that a person who has served as CEO of a non-bank affiliate at KB Financial Group has been appointed not only as the holding company chairman but also as the bank president. Among the five major domestic financial holding companies (KB, Shinhan, Hana, Woori, NH Nonghyup), KB Financial Group is the only one where both the holding company chairman and the bank president come from non-bank affiliates. There is even talk that in the future, to become chairman or president at KB Financial Group, one must have experience not only in banking but also in non-bank sectors.
While Lee Hwan-joo was selected as the next bank president candidate partly due to his strong performance at KB Life Insurance, another reason is the financial sector's focus on targeting the aging population as a future growth area. As the bank's core revenue source, the loan business, stagnates and net interest margin (NIM) declines amid a low interest rate environment, there has been strong internal demand to appoint an expert familiar with non-banking businesses to achieve management efficiency.
In other financial groups, Lee Seung-yeol, CEO of Hana Bank, was CEO of Hana Life Insurance just before his inauguration in January this year. Former Hana Financial Group Chairman Kim Jung-tae, who rose to chairman after serving as Hana Bank president, also served as CEO of Hana Daetoo Securities, showing that Hana Financial Group has cases where bank insiders with non-bank affiliate CEO experience have been appointed.
A senior banking official said, "Shinhan Financial Group still has a strong tradition centered on banking, and Woori Financial Group's non-bank affiliates are too small compared to the bank, so it will be difficult for a non-bank affiliate CEO to become bank president."
Many CEOs at KB Financial Group Are Finance Experts
Lee Hwan-joo is also a finance expert with extensive field experience. He joined KB Kookmin Bank in 1991 and served as branch manager of Gangnam Kyobo Sageori Branch, Star Tower Branch, head of sales planning department, head of foreign exchange business division, executive vice president of personal customer group, and deputy head of management planning group. In 2021, he moved to KB Financial Group and took on the role of executive vice president and chief financial officer (CFO). He is regarded as a finance expert who has held key positions across the group.
There have been many cases where finance experts have served as bank presidents before this candidate. Current President Lee Jae-geun also worked in financial planning at KB Financial Group, served as CFO, and was part of the management planning group overseeing finance at KB Kookmin Bank. KB Financial Group Chairman Yang Jong-hee is also known as a finance expert. Former KB Financial Group Chairman Yoon Jong-kyu was also a finance expert.
With expectations that next year’s operating environment for banks will be challenging due to interest rate cuts and global economic slowdown, the selection of finance expert Lee as the candidate is seen as no coincidence. Additionally, since KB Financial Group recently emphasized capital efficiency as the top management agenda for next year during its investor relations (IR) meeting, Lee, as the group’s finance expert, is considered the right person for the role.
The candidate recommendation committee stated, "Lee is a leader capable of simultaneously driving organizational stability and change. He can pursue solid growth steadily and lead improvements in corporate and shareholder value through capital and cost efficiency-focused structural reforms."
KB Financial Group’s Yang Jong-hee Regime Takes Full Swing
Inside and outside the bank, there is analysis that Lee’s selection as KB Kookmin Bank president was significantly influenced by Yang Jong-hee, chairman of KB Financial Group. Yang, who took office in November last year, is from a non-bank background. Since Yang broke the tacit rule that holding company chairmen must come from bank presidents to become chairman, it is interpreted that this approach also influenced the appointment of the KB Kookmin Bank president. Furthermore, Lee has a close connection with Yang, who was the head of the holding company’s finance team and the board secretariat chief when KB Financial Group was launched in 2008.
The candidate recommendation committee explained, "The recommendation of Lee Hwan-joo is the first case of a KB Financial Group affiliate CEO becoming a bank president, reflecting KB Financial Group’s personnel philosophy to maximize synergy between banks and non-banks. There is also a consensus that the management, who have demonstrated outstanding performance across the holding company, bank, and non-bank sectors, should lead the largest affiliate, the bank, ensuring both organizational stability and progress."
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