Bo-eun leads the digital content team. She has covered foreign affairs, North Korea, tech, economy and gender issues at The Korea Times. She did a short stint at the South China Morning Post in Hong Kong, where she obtained a new perspective on news production and life. Small sources of joy for her are lounging in the sun, having a good latte and swimming.
Will new IBK chief seek transformation into financial group?
By Kim Bo-eun
Industrial Bank of Korea (IBK) CEO Yoon Jong-won
By Kim Bo-eun
Yoon tasked with boosting earnings, stock price
It has been over a decade since the Industrial Bank of Korea (IBK) has sought to launch a holding company to make IBK a financial group. Attention is growing over whether its new chief Yoon Jong-won can take on the challenge, after his inauguration speech last week.
At the ceremony in late January, Yoon pledged to "make IBK a top-notch financial group with global competitiveness."
IBK has eight affiliates including a brokerage unit, investment firm and savings bank. Yet due to the absence of a holding company, the affiliates have been limited from creating synergy amongst themselves.
IBK accounts for 85 percent of all of the earnings generated by the bank and subsidiaries. This compares with the figures of major financial groups, for which the bank accounts for approximately 70 percent on average.
Without a holding company, the bank is limited from expanding non-banking affiliates. According to related regulations, IBK can only invest 20 percent of its equity capital in its subsidiaries. A financial holding group can invest up to 130 percent of its equity capital in subsidiaries.
In the meantime, IBK has continued efforts to expand its overseas presence. Last year, the lender launched a subsidiary in Indonesia after integrating with the Southeast Asian country's Bank Agris that it acquired earlier in the year.
The bank has plans to upgrade IBK outlets in Vietnam and Myanmar to subsidiaries as well.
It is IBK's goal to have 165 offices, branches and subsidiaries in 20 countries by 2025. It currently operates 46 subsidiaries, nine branches and two offices in 12 countries.
But as a state-run lender, IBK faces challenges in transforming into a holding company. The Ministry of Economy and Finance holds 53.2 percent of IBK's shares.
The Financial Services Commission chief Eun Sung-soo said in October the feat would take time.
IBK reviewed the matter in 2012 and 2013, but has not taken any concrete steps since. The government is known to be unenthusiastic about the plan.
There are views that Yoon, who served as presidential economic affairs secretary, may hold more leverage over the matter than former IBK chiefs who were appointed from within the lender.
An IBK official was cautious in speaking on the topic.
"(The new CEO's remarks) do not mean that IBK will immediately push forward with the plan. Besides, regulations would need to be amended to enable the switch," the official said.
Yoon is also tasked with bringing up the bank's earnings and stock price. IBK said Monday it posted 1.63 trillion won in net profit last year, a 7.8 percent fall from 2018.
IBK's stock price has also dropped over the past year, dipping to an all-time low of 10,500 won per share on Feb. 3, from 14,750 won on April 5, 2019.