Two new chiefs at Korea’s largest financial groups face challenges

Shinhan Financial Group Chairman Jin Ok-dong [Photo provided by Shinhan Financial Group]

Shinhan Financial Group Chairman Jin Ok-dong and Woori Financial Group Chairman Lim Jong-ryong will celebrate their 100th day in office this week and face challenges to reclaim their leadership in the sector and to replenish the non-banking portfolio that was lost through a privatization process.

Shinhan Financial Group, which slipped to the second largest financial holding company after KB Financial Group in the first quarter of this year, faces the daunting task of reclaiming the leading position. Since taking office, Jin, known to have deep networks in Japan, has played a significant role in restoring Japan-Korea relations at the private sector level.

Woori Financial Group, on the other hand, lost its core non-banking affiliates, such as securities and insurance, in the privatization process and now needs to replenish its non-banking portfolio through mergers and acquisitions. Lim, a former financial bureaucrat, has been praised for spearheading mutual growth with its customers.

Jin’s performance in the first 100 days has been favorably assessed by the financial community. He has made concerted efforts to restore bilateral ties with Japan at the private level under the Yoon Suk Yeol administration. In April, he held his first overseas investor relations event in Japan to seek support for the recovery of bilateral trade. He also established Shinhan Futures Lab Japan during his tenure as head of Shinhan Bank to facilitate the mutual expansion of startups from both countries.

Furthermore, Jin plans to attend the Korea-Japan Industrial Cooperation Forum next month to promote economic exchanges between the two countries. Jin is actively involved in ESG finance, emphasizing the importance of aligning finance with ESG principles. He has collaborated with international organizations such as the International Finance Corp. and the United Nations Environment Program. Additionally, he has implemented proactive win-win financing measures, such as reducing interest rates for all loan customers.

Woori Financial Group Chairman Lim Jong-ryong [Photo provided by Woori Financial Group]

Lim has been praised for his judgment based on his extensive public and private experience. Woori Financial Group is regaining its industry leadership under his tenure, with increasing prominence on certain issues. He has been particularly focused on win-win finance, introducing the ‘Win-Win Finance 3-3 Package,’ which provides customers with benefits worth 205 billion won ($156.2 million) annually.

However, there are significant challenges ahead for both Jin and Lim. They have completed only 9 percent of their three-year terms, leaving them with 91 percent of their time to tackle various tasks. Jin must focus on reclaiming Shinhan Financial Group’s position as the leading bank. While the company was the top financial holding company last year with a preliminary net profit of 4.64 trillion won, it slipped in the first quarter with a net profit of 1.3 trillion won.

Lim faces a significant challenge involving M&As with securities and insurance companies. During his tenure as chairman of the Financial Services Commission, Lim advocated for the privatization of Woori Financial Group and the separation of its non-banking affiliates to facilitate a smooth sale. While this decision was appropriate at the time, the increased importance of non-bank affiliates has now become a major hurdle for Lim.

Critics argue that Lim, with experience in both the public and private sectors, has intensified control over private financial companies. Although Woori Financial Group’s proactive approach to mutual growth with customers has received positive feedback, it is still perceived by some as a government-owned bank. The new succession program implemented by Lim is seen as both an achievement and a risk. Concerns arise that if the appointed candidate underperforms, it could reopen internal divisions between commercial and Korean banks.