COVER STORY KB leadership change raises prospect of generational shift across financial sector
KB Financial Group Vice Chairman Lee Jae-keun, nominated as the group’s next chairman, speaks to reporters in the lobby of the group’s headquarters in Yeouido, Seoul, Monday. Yonhap
Lee Jae-keun cites professional capability, not age, in appointing subsidiary CEOs
KB Financial Group’s surprise decision to choose Vice Chairman Lee Jae-keun as its next leader instead of extending incumbent Chairman Yang Jong-hee’s term is expected to trigger a sweeping overhaul of its subsidiaries’ management, industry officials said Monday.
The move has also fueled speculation over whether the push for generational change will spread to other major financial holding companies. With 54 subsidiary CEOs across the country’s five major financial groups facing term expirations by the end of this year, a major wave of executive reshuffles is expected.
On Friday, KB Financial’s chairman recommendation committee officially nominated Lee as the final candidate for the chairmanship. Because Yang was widely anticipated to secure a second term following record-breaking financial results, market observers view the outcome as a dramatic leadership shift.
Yang was born in 1961, while Lee was born in 1966, making the latter five years younger. Explaining its rationale, the committee noted, “This is a critical juncture to execute bold institutional reforms and generational renewal to enhance our core competitiveness and unlock future growth engines.”
KB Financial, by prioritizing structural transformation over continuity based on past results, is expected to carry out substantial changes across its subsidiaries.
By the end of December, the terms of 10 subsidiary heads will expire, including KB Kookmin Bank CEO Lee Hwan-ju and KB Securities CEO Lee Hong-ku.
These outgoing subsidiary CEOs were born between 1964 and 1972, with several being older than the incoming chairman, including Kookmin Bank’s Lee.
“With the holding company formally committing to a generational shift, subsidiary CEOs will find it difficult to avoid the ripple effects of this restructuring,” a financial sector insider said.
The incoming chairman himself emphasized that competence would remain the primary standard in the upcoming subsidiary executive appointments, implying a departure from age-based promotions.
“Generational change isn’t strictly about chronological age,” he told reporters on his way to the office, Monday. “Rather than focusing on age, we will evaluate candidates based on their professional capability, expertise, communication with team members and ability to inspire genuine dedication across the organization.”
This wave of personnel renewal driven by KB Financial is highly likely to influence year-end reshuffles at rival financial groups.
KB's decision has come as financial regulators are pushing for corporate governance reforms centered on board independence and transparent CEO selection frameworks. The Lee Jae Myung administration has criticized financial group heads serving multiple terms for creating an "corrupt inner circle," saying the boards of the groups have not properly checked incumbent CEOs and chairmen. It even moved to change relevant regulations to prevent a financial group chairperson from serving more than two terms — a move that has been put on hold.
Against this backdrop, factors such as strategic growth vision and leadership renewal are emerging as key criteria for CEOs who seek multiple terms, alongside past operating performance.
Besides KB, at the other four major financial groups — Shinhan, Hana, Woori and NH NongHyup — 44 subsidiary leaders are reaching the end of their terms this year.
Hana Financial has 13 outgoing CEOs, followed by Shinhan Financial and Woori Financial with 12 each and NH NongHyup Financial with seven.
Notably, the terms of all five major bank heads expire simultaneously at year-end — Kookmin Bank’s Lee, Shinhan Bank CEO Jung Sang-hyuk, Hana Bank CEO Lee Ho-sung, Woori Bank CEO Jung Jin-wan and NongHyup Bank CEO Kang Tae-young. Among them, Jung is the only one who had previously secured an extension of his term.
All eyes are now on whether the four groups, like KB, will also embrace generational change as a key personnel criterion.
At Shinhan Financial, the 12 CEOs nearing term expirations were born between 1964 and 1977. Hana Financial’s 13 outgoing leaders fall between 1963 and 1971, while Woori Financial and NH NongHyup Financial cover birth years of 1963-1970 and 1965-1970, respectively.