Will KB group's Yoon Jong-kyoo serve third term?

By Kim Bo-eun

KB Financial Group Chairman Yoon Jong-kyoo

Attention is growing as KB Financial Group Chairman Yoon Jong-kyoo has been forwarded as one of the candidates for the group's next chief. Views are widespread that Yoon will likely secure another term, based on his performance.

The financial group's committee on recommending candidates for the chairman position will narrow down the pool of candidates to four by Aug. 28. The final candidate will be forwarded at a shareholders' meeting on Sept. 25.

Yoon became KB Financial Group's chairman in November 2014, and is serving his second term, which will come to an end on Nov. 20.

Among his recent achievements is the takeover of Prudential Life Insurance Company of Korea, strengthening its life insurance unit.

The chairman has also led KB's overseas expansion in recent years. KB had lagged significantly behind other financial groups in the scale of its overseas business.

Under Yoon, KB set up a new overseas business division to oversee each affiliate's overseas operations and enhance cooperation among affiliates in foreign markets.

KB Kookmin Bank is set to become the largest shareholder of Indonesia's Bank Bukopin. The takeover is part of KB Kookmin Bank's plan to expand its business in Indonesia, as local authorities have made the acquisition of Indonesian lenders a prerequisite for foreign banks to do business there.

In April, KB acquired Prasac Mircrofinance, Cambodia's top microfinance deposit-taking institution.

KB also formed an alliance with U.S. investment firm Carlyle Group in June to utilize the respective strengths of their domestic and global networks to collaborate on new investment opportunities both here and abroad.

Strengthening non-banking affiliates and scaling up overseas business is a common strategy of financial groups here which seek to find new opportunities as banks face tougher circumstances amid low interest rates.

KB also beat Shinhan group in second-quarter earnings, with its net profit coming to 981.8 billion won, driven by earnings from non-banking units such as KB Securities. KB and Shinhan as the top two financial groups have been engaging in a battle for the top spot.

KB's committee has stated willingness to incorporate environment, social and governance (ESG) values into management, as well as leadership capabilities amid the COVID-19 pandemic as the key qualities they seek in the next chairman.

Under Yoon's leadership, KB set up an ESG committee and has pledged to boost ESG investments to 50 trillion won by 2030, from the current 20 trillion won. It also stated it would seek to contribute to cutting carbon emissions by 25 percent.

KB's committee has also underlined leadership capabilities for a digital transition as an essential factor.

Yoon set up a digital innovation division in December 2018, and tapped KB Kookmin Bank CEO Hur Yin as chief.

KB's affiliates have undertaken new digital initiatives. KB Kookmin Bank introduced a digital bank branch with no staff, as well as a service through which customers can withdraw funds using their palm print, without having to bring a bankbook.

The other candidates for the chairman position are KB Kookmin Bank CEO Hur Yin, KB Insurance CEO Yang Jong-hee and KB Kookmin Card CEO Lee Dong-cheol.

To be selected by KB's committee as the final candidate, the candidate needs to obtain more than two thirds of votes from committee members.

But because it appears likely that Yoon will keep his position, KB's union has protested the process, claiming it is merely a formality and that the other candidates are props to assist Yoon's reappointment.

If Yoon succeeds in serving another term, he will have served as chairman of KB Financial Group for nine years by the end of his third term.

A factor that may pose uncertainty is the group's earnings for the third quarter. However, the final decision will likely be made by shareholders before earnings for the third quarter are released.