Major Korean banks prepare to choose new leaders

[Photo by Yonhap]

Korea’s five major commercial banks will begin their leadership selection processes this week at the earliest, as the terms of their current CEOs expire at the end of 2024.

According to industry sources on Sunday, Shinhan Financial Group will start the process this week to select new chief executive officers for its banks and key affiliates. The Financial Supervisory Service’s guidelines on the governance of holding companies require the recommendation of new candidates for financial holding company chairmen and bank CEOs to begin three months before their terms expire.

KB Financial Group, Hana Financial Group, and NH Nonghyup Financial Group stated that their leadership decision committees will begin operations next week. Woori Financial Group, however, is struggling to set a timetable due to disruptions involving improper loans connected to former chairman Sohn Tae-seung’s relatives.

At Shinhan Financial, the terms of Shinhan Bank CEO Jung Sang-hyuk, Shinhancard Co. President Moon Dong-kwon, and Shinhan Life Insurance Co. CEO Lee Young-jong will expire at the end of 2024. The spotlight is currently on whether Jung, who has worked closely with Shinhan Financial Group CEO Jin Ok-dong, will be reappointed. There is also speculation about the future roles of the Shinhancard and Shinhan Life CEOs, whether they will stay or move to the holding company.

For KB Financial Group’s part, KB Kookmin Bank CEO Lee Jae-keun is seeking to be reappointed for a second time. Although internal evaluations of his performance are positive, the massive losses from the Hang Seng China Enterprises Index-linked equity-linked securities (ELS) products remain a concern. The reappointment of longtime KB Securities Co. CEO Kim Sung-hyun is also under consideration, alongside the upcoming expiration of KB Kookmin Card CEO Lee Chang-kwon’s term.

Meanwhile, Hana Financial is focused on whether Hana Bank CEO Lee Seung-lyul will be reappointed, with a strong first-half performance and the need for management stability seen as positive factors.

At NH Nonghyup Financial Group, there is interest in whether NH Nonghyup Bank President Lee Seok-yong will be reappointed. Unlike at other banks, reappointments are rare at Nonghyup, but internal evaluations of Lee have been favorable.

For Woori Financial Group, the terms of Woori Bank CEO Cho Byung-kyu and other affiliate heads will expire at the end of 2024. But the group faces complications due to a 10 billion won ($7.5 million) embezzlement scandal and suspicions of concealed improper loans involving former chairman Sohn’s relatives. With a board meeting scheduled for later in September, it is speculated that the decision process could begin around then.