[1mm Financial Talk] Savings Bank Central Association Board Meeting in a Week... Reappointment Rumors 'Solsol'

Board Likely to Approve Presidential Election Agenda on the 20th
Delaying the Vote Could Extend Leadership Gap by Over a Month
"No News of Financial Services Commission Nominee or Third Candidate... Reappointment Most Likely"

As the board meeting of the Korea Federation of Savings Banks is scheduled for the 20th of this month, attention is focused on whether discussions on the election of the next president will take place and be approved. Industry insiders suggest that the current president, Oh Hwa-kyung, is likely to be reappointed. There are no unofficial reports of the Financial Services Commission recommending a candidate from its ranks to the federation's board, and with no clear competitor to President Oh, if the board approves the agenda for the next president's election, the formation of the Election Management Committee and the Presidential Recommendation Committee is expected to accelerate.

According to industry sources on the 12th, the federation will hold a closed board meeting at 3 p.m. on the 20th at its headquarters in Mapo-gu, Seoul. Although the agenda has not been finalized, there is a strong expectation inside and outside the federation that the agenda for the next president's election will be raised. The federation's board currently has 12 directors, and an agenda is approved if a majority of the total members attend and a majority of those present (at least 4) vote in favor. A federation official said, "This is a monthly board meeting, and the agenda is undecided," withholding further comment.

If the agenda is approved at the board meeting, the formation of the federation's Election Management Committee and Presidential Recommendation Committee is expected to gain momentum. Since the board meeting is scheduled after the current president's term expires on February 16, even if the agenda is approved, it cannot be considered particularly early. However, the industry values the fact that the federation has begun to take steps to minimize leadership gaps.

According to the industry, it takes about 30 to 40 days from the board's approval of the election agenda to the presidential election. If the agenda is approved at the board meeting on the 20th, the next president could be elected as early as the end of next month. By convention, even after the term expires, the president continues to serve until the next president is elected, but the president's authority weakens. Even if the board approves the agenda, a leadership gap of at least six weeks will occur. If the approval is delayed, the gap will extend by another month, increasing the burden on the federation's board. This is why the industry interprets the likelihood of agenda approval at this board meeting as high.

Additionally, the delay in the Financial Services Commission's candidate recommendation has led the federation's board to judge that it cannot wait any longer, which is another reason the agenda approval for the next president is more likely at this meeting. There is also a view that the unofficial signals from the Financial Services Commission have been conveyed to the board members, possibly prompting a faster election process. So far, there have been no clear rumors about candidates recommended by the Financial Services Commission. The commission maintains a principled stance that departments responsible for personnel, planning, and policy do not intervene in the federation president's appointment.

The prevailing opinion is that the likelihood of a third candidate emerging besides President Oh and the Financial Services Commission's candidate is low. At the end of last year, rumors about candidates such as Lim Jin-gu, chairman of Fairway Asset Management (formerly CEO of SBI Savings Bank), and Shin Hong-seop, former president of KB Savings Bank, have subsided, making it more difficult for other hopefuls to step forward. The industry's favorable evaluation of President Oh's crisis management skills, including handling non-performing loans and maintaining soundness indicators, also acts as a deterrent to the emergence of a third candidate. Unless a Financial Services Commission-recommended candidate emerges before the board approves the agenda, there is little disagreement that no one will realistically challenge President Oh.

A senior official at a major Seoul-based savings bank, A Savings Bank, said, "Since the end of last year, rumors about hopeful candidates in the industry have completely disappeared. Even if there is a new figure who wants to run, the atmosphere now makes it harder to declare candidacy."

Both the industry and labor unions have voiced a unified call for the federation's board to promptly approve the agenda for the next president's election. A senior official at another major Seoul savings bank, B Savings Bank, said, "It is obvious that federation personnel have informed the authorities about the board meeting and the possibility of agenda approval, but even a week before the meeting, no candidates from the Financial Services Commission have been mentioned. The federation will likely decide to proceed with some procedure rather than wait indefinitely for a candidate recommended by the commission."

A senior labor union official in the industry said, "If the agenda is approved at the federation's board meeting, the weight will be on the current president (President Oh) being reappointed rather than on a Financial Services Commission-recommended candidate or a third candidate."

The federation president election is decided by a vote at the general meeting based on the principle of 'one vote per member company' among 79 member companies. The quorum for election is a majority attendance of member companies, with at least two-thirds of attending members voting in favor.