[Who Selects the Bank CEOs]③Strong Earnings Offer No Assurance...Will Over Half of the Big Five Bank Chiefs Change?

Five Major Bank CEOs Facing Term Expiry at Year-End... Selection Process Heats Up
KB Generational Shift, Shinhan Third Term Bid, and Hana's Reappointment Precedent as Key Variables

With the terms of more than 70 CEOs of major financial holding company subsidiaries set to expire by the end of the year, attention is focusing on the fate of the heads of the five major commercial banks. Despite record-breaking earnings, there is an increasingly uncertain outlook for their reappointment, as regulators are calling for governance reform and each holding company is preparing its own personnel policy. In the financial industry, there are predictions that the scope of replacements could be larger than expected.

According to the financial sector on September 29, the terms of the CEOs of KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, and NH Nonghyup Bank will all expire at the end of the year. Among the five major bank CEOs, only Shin Sanghuk of Shinhan Bank is serving his second term, making a bid for a third, while the remaining CEOs await decisions on their first reappointments. Lee Chanjin, Governor of the Financial Supervisory Service, has summoned the heads of holding companies and has called for subsidiary CEO selections to be based on capability, excluding internal factions and personal relationships. As a result, attention is focused on whether the incumbent bank CEOs will be granted another term.

KB Kookmin Bank is attracting the most attention. KB Financial Group has chosen Lee Jaekeun, Head of Global Business, as its next chairman instead of reappointing current chairman Yang Jonghee, raising the possibility of personnel reshuffles among subsidiary CEOs as well. The subsequent appointments, including that of Lee Hwanju, the current KB Kookmin Bank CEO, are expected to support the new chairman’s management vision. It is also notable that incoming chairman Lee was born in 1966, making him two years younger than CEO Lee (born in 1964). Since the incoming chairman has mentioned “a generational shift for a younger KB,” there is interest in how much this generational shift will actually be reflected in personnel moves.

At Shinhan Bank, there is interest in whether CEO Shin Sanghuk will secure a third term. The financial authorities have expressed a negative stance on long-term reappointments of financial holding company chairmen, and have even considered legislating a ban on three consecutive terms. As a result, the financial sector is closely watching CEO Shin’s bid for a third term. However, there are also views that extending the terms of the holding company chairman and the bank CEO should not be viewed in the same light, so Shinhan Financial’s decision is drawing attention.

Hana Bank CEO Lee Hosung is receiving positive managerial evaluations. However, it is a variable that since the tenure of current Hana Financial Group Chairman Ham Youngjoo, no bank CEO has succeeded in earning a consecutive term at Hana Bank.

Woori Bank, on the other hand, is expected to place more weight on continuity. Since Lim Jongryong, Chairman of Woori Financial Group, has successfully secured a second term, there are analyses that Jeong Jinwan, CEO of Woori Bank, could also be empowered in terms of management continuity. In addition, since CEO Jeong was born in 1968, he is relatively less swept up in the trend toward generational change. Compared to CEOs Lee Hwanju, Shin Sanghuk, and Lee Hosung, who were all born in 1964, and Kang Taeyoung of Nonghyup Bank, who was born in 1966, he is the youngest among the five major bank CEOs. However, as Woori Bank’s net profit in the first half declined by 12% compared to the same period the previous year, the third-quarter results are cited as a major variable determining CEO Jeong’s reappointment.

CEO Kang is also at a crossroads between reappointment and replacement. At Nonghyup Bank, reappointments have been rare except for former CEO Lee Daehun, and as the term of Lee Chanwoo, Chairman of NH Nonghyup Financial Group, ends in February next year, it is expected that a decision on the CEO position could be made in conjunction with that timeline.

“Based solely on performance, there’s little reason why the incumbent CEOs should not be reappointed, but this year there are many variables beyond business results to consider,” said one industry official. “There are even projections that the scope of changes could be larger than expected, with more than half of the five major bank CEOs being replaced.”

This content was produced with the assistance of AI translation services.