KB set to extend terms of non-banking leaders

From left are KB Securities co-CEOs Park Jeong-rim, Kim Sung-hyun and KB Insurance CEO Kim Ki-hwan. Yonhap

By Lee Min-hyung

KB Financial Group is set to extend the terms of its CEOs at key non-banking affiliates during the year-end reshuffle of top management, for their contribution to the group's stable earnings growth despite pandemic uncertainties.

The nation's largest financial holding firm by market capitalization recently announced it would carry out a leadership reshuffle at KB Kookmin Bank for the first time in four years. With the group nominating Lee Jae-keun, who is in his mid-50s and considered to be a relatively young leader in the nation's financial industry, there were rumors that the group was pursuing a large-scale generational shift in the upcoming reshuffle slated for mid-December.

KB Financial Group operates a total of 13 affiliates and the tenures of nine leaders at eight subsidiaries will be up by the end of 2021.

But the heads of the group's cash-cow non-banking arms will retain their positions in recognition of the critical roles they played to help expand the group's non-banking revenue.

All eyes are particularly on KB Securities co-CEOs Park Jeong-rim and Kim Sung-hyun, who have run the securities arm of the group for three years, during which the affiliate achieved outstanding earnings growth. KB Securities saw its operating profit surge 65.1 percent year-on-year in the third quarter to 729.5 billion won.

The securities firm's group-wide earnings contribution has been increasing each year. The affiliate is one of KB's most influential non-banking arms and accounted for 14.4 percent of the group's total net profit during the first three quarters combined, up 11.8 percent from a year earlier.

Even if Park is still facing a regulatory risk due to the firm's involvement in the nationwide financial fiasco surrounding Lime Asset Management, financial regulators have delayed making a final decision on whether to reprimand the co-CEO, enabling Park to continue her leadership.

“A generational shift is emerging as a key phrase ahead of the year-end leadership reshuffle, but existing leaders who have led clear earnings growth will be able to keep their top positions,” a financial industry source said.

KB Insurance CEO Kim Ki-hwan will also retain his post until his two-year term finishes at the end of 2022. The non-life insurance arm achieved a major rebound after Kim took office. He focused on aggressive asset management as a key strategy to drive the earnings rebound. The company generated 359.1 billion won in operating profit in the first three quarters combined, up 76.8 percent from the previous year.