KB Aims at Top 10 in Asia by 2013
‘Leading Financial Group Will Take Initiative in Reshaping Industry’
By Kim Jae-kyoung
Staff Reporter
Hwang Young-key, chairman and CEO of KB Financial Group, is known as a ``gladiator'' in the local financial market for his positive drive combined with aggressive management style characterized by ``change'' and ``innovation.''
Together with his management philosophy and extensive experience, what has set him apart from his peers in the industry is his ``guts feeling.'' He knows when to move forward and step back to be a winner in the market, which is well manifested in his track record.
Against this backdrop, when he was nominated as CEO of the financial holding company in July, local media made headlines with the news that Hwang's comeback would lead to a series of merger & acquisition (M&A), causing a ``big bang'' in the financial market.
Even after the financial malaise created by Wall Street crisis has swept through the financial markets, he remains adamant that he will push ahead with his vision and strategy by riding out all the financial and economic storms.
In a recent phone interview with The Korea Times, Hwang said, ``I don't think we need to change our strategy because the surrounding environments are becoming against us.''
``Our strategy is still good. But now timing is the issue. We should be more cautious when we put our strategy into action depending on the future development of the market,'' he added.
In a launching ceremony for KB Financial on Sept. 29, Hwang unveiled his ambitious vision and strategy to transform the holding company into a leading financial group in Asia.
``KB will seek to take the initiative in reshaping the local financial industry and to solidify its leading position, with the goal of becoming a top 10 financial group in Asia and top 50 in the world by 2013 through both organic growth and M&A,'' he said.
``We will pursue aggressive M&A both in the banking and non-banking sectors to become the nation's number one financial group within three years,'' he added.
He pointed out that M&A is one of the key reasons why Kookmin Bank, the flagship firm of the financial group, transformed itself into a financial holding company and expansion through M&A in the banking sector is an important strategy to stay a market leader.
Looking Beyond Local Market
His aggressive and bold move indicates that he is looking well beyond the local market.
During an earlier press conference, he said, ``KB is pursuing M&A with rival financial groups in a bid to transform KB into a world-class financial group.''
``Self-propelled organic growth in a small market has limitations. We would like to change the landscape of the local financial industry through M&A with large financial firms rather than grow step by step by acquiring small insurers or securities firms,'' he said.
``Koomin Bank is the largest lender in Korea but is hardly recognized by financial markets in Central Asia, Southeastern Asia and China, as well as New York, London and Singapore,'' he added. ``It is urgent to create a bank and asset management firm representing Korea and to nurture it as the growth engine for the financial industry.''
Hwang is considering pursuing ``merger of equals'' with its rival financial groups Shinhan and Hana, as well as the Industrial Bank of Korea (IBK) and Woori Financial.
The merger of equals happens when two firms, often of about the same size, agree to go forward as a single new company rather than remain separately owned and operated. Both firms' stocks are surrendered and new company stock is issued in its place.
Strategic Direction
In order to achieve its vision of becoming top 10 in Asia and top 50 in the world, KB Financial has come up with three key strategic directions based on its numerous competitive strengths.
KB's key strengths lie in areas of extensive retail network, large customer base and high customer satisfaction, top class online channel, capital power, strong operations and brand power, and sophisticated internal control and risk management.
Based on these, KB seeks to solidify its position as the leading financial group in domestic market. Second, it will focus on strengthening ability to provide comprehensive financial services. Finally, it aims to successfully establish an overseas operating platform and network.
``As a global financial group, KB Financial will make the utmost efforts to enhance the competitiveness of our banking sector and set up infrastructure to maximize synergy for balanced growth between banking and non-banking sectors,'' a KB Financial executive said.
``At the same time, we will strive to establish a comprehensive financial service system and expand overseas business to become the model financial group in the market,'' he added.
Creation of Synergy
KB Financial was established under long-term development plan and an expansive stock transition from its major subsidiaries in order to meet the ever changing demands of the financial market, such as rapid globalization, decreased in profitability of traditional banking services, new market regulations, such as Capital Market Integration Act, and the increased need for comprehensive financial services in the market.
KB Financial Group is pursuing a comprehensive financial services provider by strengthening both banking and non-banking sector in a balanced manner to bring the greatest satisfaction for its customers.
Kookmin Bank, the nation's largest lender, has already established itself as an industry leader in the field of risk management and has been diligent in its efforts to solidify what was already considered by many to be the nation's premier risk management system.
On December 28, 2007, Kookmin became the first bank in Korea to meet the requirements of the New Basel Capital Accord (Basel II), and received regulatory approval for the use of the internal-ratings-based (IRB) approach.
The approval has given the bank a significant advantage over its competitors in maintaining high asset quality.
In 2007, the Korea Productivity Center selected Kookmin as the top provider of customer service for the 2nd consecutive year, and the bank was also ranked first in the Korea Management Association Consultant's customer satisfaction survey, firmly establishing Kookmin as not only the largest bank in Korea, but also the friendliest.
In addition to Kookmin Bank, KB Financial currently comprised of seven other subsidiaries ― KB Real Estate Trust, KB Investment, KB Credit Information, KB Data System, KB Asset Management, KB Futures and KB Investment Securities.
With the launching of KB Financial, each subsidiary will focus on enhancing their expertise, as well as, developing an expanded system on mutual cooperation that will produce the level of synergy befitting a comprehensive financial group.
Through the expansion of its non-bank affiliated operations, enhanced competitiveness, and multiple financial service offerings, KB Financial seeks to increase customer satisfaction and create synergy through maximization of corporate brand value ultimately contributing to the growth of Korea's financial industry.