Cho Yong-byoung nominated as next KFB leader

Cho Yong-byoung, former chairman of Shinhan Financial Group, is nominated as the next leader of Korea Federation of Banks, Thursday. Courtesy of Shinhan Financial Group

Cho Yong-byoung, former chairman of Shinhan Financial Group, has been chosen as the next leader of the Korea Federation of Banks (KFB), Thursday.

This marks the first time in 30 years that someone from one of the four major banks has been appointed as the chairman of the lenders' lobby group. It is also the first time for an alumnus of Shinhan to hold this position.

"Based on his broad understanding of the finance industry and extraordinary insight, Cho was evaluated as the one to solve imminent issues and contribute to the development of the banking industry," the KFB said in the statement.

The board members of the KFB unanimously voted for Cho, after carefully discussing each candidate's qualifications, it added.

The competition garnered attention as it featured former KB Chairman Lim Young-rok, with his background as a financial bureaucrat, competing against private sector candidates. Historically, most KFB chairmen have come from the government sector. Cho would be the fifth chairman from the private sector.

The nomination appears to have resonated positively within the industry.

The finance industry, particularly the banking sector, faces challenges amid government criticisms of the banking industry for monopoly and lack of innovation. The main opposition party is even advocating for the adoption of a "windfall tax," arguing that the industry has unfairly profited from high-interest rates at the expense of the struggling public.

Cho is anticipated to effectively communicate the industry's position to the financial authorities. During his time at Shinhan, he was recognized for maintaining a friendly relationship with them.

Despite being a strong candidate for a third term as Shinhan chairman, Cho unexpectedly resigned last December, in line with the financial authorities' push for changes in financial leadership. His move created a trend where other chairmen, previously serving consecutive terms, were beginning to step down from their roles.

Furthermore, Cho is acclaimed for his remarkable career progression, having climbed through the ranks of the system to become the chairman of a financial holding company.

Cho's immediate challenge will be to restore customer trust in the wake of widespread employee embezzlement incidents in banks across the country. Another crucial task is to redesign the bank's profit system by expanding non-interest income streams.

After today's board meeting, the current KFB Chairman, Kim Kwang-soo, expressed his regrets.

"During my 3-year tenure, I focused on the financial regulations and relationships with the financial customers, but it seems this was not well-recognized in society," Kim told reporters. "It weighs heavily on my heart. I feel sorry for leaving this burden for my successor."

"However, I believe the incoming chairman, with experience and leadership, will be able to wisely resolve these challenges."

The formal appointment of Cho as chairman will require approval from the KFB's 23 regular member firms. The general meeting of employees, where this decision would be finalized, is scheduled for Nov. 27.

Last week, the KFB chose six candidates, including Cho. The list included Lim and Yoon Jong-kyoo of KB Financial Group, Son Byung-hwan of NongHyup Financial Group, Cho Joon-hee of Industrial Bank of Korea (IBK) and Park Jin-hei of Citibank Korea. Following the announcement, Yoon declined the nomination.