Euh Yoon-dae changing KB culture

Executives’ performances disclosed; chairman courting key customers

By Kim Jae-won

KB Financial Group Chairman Euh Yoon-dae has made performance details of the corporation’s executives available to all employees. The information pertains to all nine affiliates including its flagship Kookmin Bank.

Although the names of the executives are not disclosed, a shock wave is rippling through Korea’s leading financial services firm as details of ninety executives’ actions included deposits they attracted and loans they agreed were published.

The initiative is the first of its kind by the firm, and is part of the 65-year-old former Korea University president’s moves to stimulate senior staff to sell products more aggressively.

Industry watchers say Euh’s move has already jolted the executives into action. There is an added reason for them to work harder as the chairman himself is out to court customers.

KB officials say that Euh posted one of the best records during the September-to-December period. The chairman told reporters last month that he met the heads of 15 conglomerates, though not Samsung Electronics’s Lee Kun-hee, and sold them KB products.

Euh has stressed the importance of sales since he took the helm of KB Financial in July 2010. He met all 2,000 Kookmin Bank branch managers nationwide with the lender’s CEO Min Byong-deok last year to encourage the frontline employees to thrive in the business “war.”

He also has played golf with “VVIP” customers to encourage them to continue to do business with the firm, according to a KB spokesman. Employees have welcomed his business strategies and expect the company to rebound this year under his strong leadership.

“I’ve heard that Chairman Euh himself meets customers and sells financial products to them. I was impressed with that,” said a Kookmin official.

He said he now appreciates Euh’s ability to manage the group.

“At first, I doubted whether he could manage KB because he had no experience of leading a financial company. Now I am confident that his leadership will see KB recover from previous poor performances,” he added.

KB Financial posted the worst figures among the four biggest financial groups due to its large reserves for bad loans and expenses for early retirement compensation, which marked about 600 billion won.

Euh also completed slimming down KB’s manpower in the fourth quarter of 2010. About 3,200 employees applied for an early retirement program, which provided up to three years’ salary in compensation.

Financial experts say that KB may grow steadily this year. “The local banking industry will grow robust this year. KB Financial is expected to fare well,” said Jeon Hyo-chan, a research fellow from Samsung Economic Research Institute.

“KB Financial ran an early retirement program in a strategic move to boost its competitiveness,” he added.