No Challengers by Savings Bank Association President Candidate Deadline... Chairman Oh Hwa-kyung Likely to Run Unopposed

Candidate Registration Closes on the 17th: No Government or Private Challengers
President Oh's Overwhelming Victory Over Government-Backed Candidate Influences Race
Federation Announces "Official Voting Procedures to Proceed," Speculation Subsides

As the registration for candidates in the next (20th) president election of the Korea Federation of Savings Banks closes on the 17th, it was confirmed that no challengers besides the current president Oh Hwa-kyung had registered as of the previous evening. The possibility of a candidate recommended by financial authorities appearing to overturn the situation is slim, indicating that President Oh is likely to run unopposed and secure re-election.

According to the financial sector, the Federation will close candidate registration for the next president election at 6 p.m. today. Although the candidate recommendation, registration, and voting procedures remain, if no new candidates emerge, President Oh is expected to be re-elected.

Since the Federation announced on the 20th of last month that it would proceed with the election schedule without endorsing any specific candidate, it is reported that candidates from government backgrounds have declined to run. There has been no news of candidates recommended by the authorities entering the race either. The Financial Services Commission (FSC) has drawn a clear line, stating it will not directly intervene in the election considering conflicts of interest with its jurisdiction. An FSC official said, "Neither the Federation nor any financial industry association president elections under our jurisdiction are interfered with by our department."

The Federation president election is conducted by a direct vote, one vote per each of the 79 savings banks. A candidate must secure two-thirds of the votes to win. It is interpreted that President Oh’s overwhelming victory by a 'double score' against former Korea Exchange Market Surveillance Committee Chairman Lee Hae-seon, who also came from a government background, three years ago has influenced candidate registration this time. In that election three years ago, 78 out of 79 member savings banks participated, with President Oh receiving 53 votes, more than twice the 25 votes for Lee.

Given that the savings bank sector suffered losses last year and is in crisis, the industry consensus is that the Federation president should be elected as soon as possible to fill the leadership vacuum. The Financial Supervisory Service (FSS) will announce the '2024 Savings Banks and Mutual Finance Cooperatives Business Performance' on the 21st. The Federation president vote will take place on the 31st. The next president will assume office immediately after the supervisory authorities’ 'loss announcement' and will bear the heavy responsibility of revitalizing the sector.

If President Oh is re-elected (for the 19th and 20th terms), he will become the first president in 36 years to succeed in re-election. Among the 16 past presidents, only two?former presidents Choi Byung-il (2nd and 3rd terms) and Myung Dong-geun (5th and 6th terms)?have served consecutive terms.

The industry expects President Oh to focus on strengthening the overall soundness of the sector after re-election. Previously, President Oh mentioned that his top priorities include addressing real estate project financing (PF), selling distressed assets related to bridge loans, and supporting low- to mid-interest loans for ordinary citizens. Strengthening soundness aligns with the Federation’s founding purpose. The Federation is a non-profit special corporation established under Article 25 of the Mutual Savings Banks Act. It performs public interest tasks such as supporting vulnerable and delinquent borrowers and consulting for self-employed individuals.

Since February 2022, President Oh has been recognized for focusing on resolving urgent issues as the 19th president, including blocking risks of mass withdrawals (bank runs) from real estate PF deposits. Until recently, he has been dedicated to enhancing sector soundness by promoting the establishment of a specialized non-performing loan (NPL) company within the Federation. If re-elected, he is expected to focus on operating the NPL company and accelerating the sale speed of real estate PF auctions and public sales as requested by financial supervisory authorities.