Value context and insight. lkm@koreatimes.co.kr
CEO WATCH JB chairman's leadership in spotlight amid pandemic
JB Financial Group Chairman Kim Ki-hong. Korea Times file
By Lee Kyung-min
By Lee Kyung-min
JB Financial Group Chairman Kim Ki-hong is in the spotlight for his “unrivaled” business acumen following outstanding earnings results amid the COVID-19 pandemic.
The regional financial group has set a target of 354 billion won ($288 million) in net profit for this year, a figure that would see the group's earnings hit a record high for the second consecutive year.
The goal seems attainable given strong earnings figures over the past year, backed by Kim's management decisions since March 2019, when he became group chairman.
Under his leadership, the group's departments were streamlined, while 30 percent of managerial staff were put back into sales work. This was designed to remind the senior group that the true meaning of holding a title should be associated with their ability to make money.
The efforts, among others, led to a 96.5 billion won net profit in the first quarter, up 4.3 percent from a year earlier.
The better-than-expected figure beat the market consensus that the group's net profit would fall short of 90 billion won, in line with concerns that the COVID-19 pandemic would wipe out the lending business, the core source of growth of financial firms.
Its main competitor BNK Financial Group logged a 137.7 billion won net profit in the same period, down 22 percent from the year before. The industry leader's poor performance was driven by its two main bank subsidiaries' over 20 percent year-on-year fall in net profit.
JB Financial's earnings in the first three months are the continuation of its solid performance in 2019, when it reported 341.9 billion won in net profit, up 41.6 percent from the year before.
The year-on-year growth in net profit aside, JB was the only group that reported over 2 percent in net interest margin (NIM), a figure none of its larger Seoul-based competitors achieved. NIM is considered one indicator of a bank's profitability and growth.
JB Financial's profitability measured by return on equity (ROE) and return on assets (ROA) was 10.18 percent and 0.77 percent in 2019, respectively.
Also fueling this year's profit expectation is Kim's proven record as head of the group's asset management subsidiary that saw an eightfold increase in assets under management from 2014 to 2018.
The subsidiary had 698.1 billion won in assets in 2014 before Kim was named its head. But after years of arranging in-person meetings to attract local and global institutional investors, its assets soared to over 5.5 trillion won by the end of 2018, shortly before he was named group chairman.
Kim served as a Financial Supervisory Service (FSS) deputy governor in 1999. He also worked at the Korea Institute of Public Finance and the Korea Insurance Development institute.