The surprise nomination of Lee Jae-keun, a division head at KB Financial Group, as the group's next chairman reflected concern that the country's largest financial group could fall behind rivals within a few years unless it changes now. Another factor was that while KB leads on net profit and asset quality at the holding-company level, the picture looks different when its affiliates are compared one by one. The industry is now watching whether KB's unconventional pick will set off a broader generational shift across the financial sector.
The chairman nomination committee at KB Financial Group evaluated candidates on five criteria — work experience and expertise, leadership, integrity, alignment with KB Financial's vision and values, and sound management over both the short and long term — according to financial industry sources on the 13th.
Sources inside and outside KB Financial say the committee placed its emphasis on strengthening core competitiveness and securing future growth engines. KB Financial Group posted a record 5.843 trillion won ($4.2 billion) in profit last year. While the group is well balanced overall, there was a sense that it still has a long way to go in specific areas, according to those sources.
KB indeed does not hold the top spot in any of its main business lines — banking, securities, insurance, credit cards or capital finance. KB Kookmin Bank posted first-half net profit of 2.2254 trillion won, trailing Shinhan Bank's 2.4585 trillion won. That reinforced the view that the group needs to rebuild its underlying growth and competitiveness under Lee, who previously served as the youngest chief executive in the bank's history. Lee is said to have scored highly in the candidate presentations. "Given how fast the financial sector is changing, the committee appears to have concluded that it needed a chairman born in 1966 at the forefront to drive change," a financial industry official said.
The sector is indeed shifting quickly as on-chain finance and digital assets take hold. The need to respond to a "money move" driven by the steady expansion of capital markets is another factor. Both internal and external assessments point to the artificial intelligence transition as a further reason a bold generational change was needed. Some read the exclusion of KB Kookmin Bank Chief Executive Lee Hwan-joo from the shortlist as an extension of the same reasoning.
Some in the industry say the nomination committee acts independently, noting that KB also made an unconventional choice in its previous chairman selection. At the time, Vice Chairman Hur In, who had studied law at Seoul National University a year behind then-President Yoon Suk-yeol, was widely seen as the likely successor, but the committee ultimately recommended Yang Jong-hee. "My understanding is that the outcome was decided in the interview process," said an industry official familiar with KB Financial. "They looked at individual capability."
With KB Financial putting change and innovation front and center, attention is also turning to year-end personnel decisions. Bank chief Lee, born in 1964, completes his two-year term this December. Others whose terms expire at year-end include KB Securities wealth management head Lee Hong-gu, KB Insurance Chief Executive Koo Bon-wook, KB Kookmin Card Chief Executive Kim Jae-kwan and KB Life Insurance Chief Executive Chung Moon-chul. KB Asset Management, KB Capital and KB Real Estate Trust are also up for review, raising the prospect of a wide-ranging reshuffle.
A reorganization at the holding company also looks unavoidable. KB Financial operates under three division heads — Lee Jae-keun, future strategy division head Lee Chang-kwon and CIB market division head Kim Sung-hyun. With Lee moving up to chairman, follow-on appointments at the division-head level are expected. Among holding-company executives overseeing areas such as strategy and finance, 19 see their terms expire at the end of this year.
Some observers say KB's choice could influence year-end appointments of bank chief executives at other financial groups. The terms of Shinhan Bank's Jung Sang-hyuk, Hana Bank's Lee Ho-sung, Woori Bank's Jung Jin-wan and NH NongHyup Bank's Kang Tae-young all end on Dec. 31. "The industry expected the incumbent chairman to win another term on the back of strong earnings, and now that assumption has been broken, the rest of this year's personnel moves in the sector are much harder to predict," a financial industry official said.
