Financial group heads feared to face pressure to resign under new administration
From left are KB Financial Group Chairman Yang Jong-hee, Shinhan Financial Group Chairman Jin Ok-dong, Hana Financial Group Chairman Ham Young-joo and Woori Financial Group Chairman Yim Jong-yong. Courtesy of each company
With leadership changes at financial holding companies frequently occurring with presidential transitions, the pattern is likely to continue after the upcoming June 3 election, according to industry officials, Friday.
There is a widespread view within the financial sector that, regardless of whether Democratic Party of Korea candidate Lee Jae-myung or People Power Party candidate Kim Moon-soo wins, heads of financial holding companies appointed during the previous Yoon Suk Yeol administration are likely to face pressure to step down.
In particular, with Lee leading in various opinion polls, the financial division of his campaign is reportedly led by figures who are former labor union leaders from the financial sector.
This has fueled speculation that the positions of current financial holding company chairpersons could be unsettled under the new administration.
Attention is especially focused on whether or not those whose terms expire next year will be able to be reappointed.
According to the industry officials, Shinhan Financial Group Chairman Jin Ok-dong and Woori Financial Group Chairman Yim Jong-yong will conclude their terms in March 2026, while KB Financial Group Chairman Yang Jong-hee is set to finish his term in November 2026.
During the Yoon administration, all five major financial holding company chairpersons were replaced.
Hana Financial Group Chairman Ham Young-joo assumed his position shortly after the presidential election held in March 2022. Then, in January 2023, Lee Seok-jun began his tenure as chairman at NH NongHyup Financial Group, while both Jin and Yim started their terms in March.
In August of the same year, Yoon Jong-kyu stepped down as chairman of KB Financial Group. Although he was rumored to be considering a fourth term, he decided to resign amid overt pressure from financial authorities, which sparked controversy over external influences affecting the selection of financial holding company chairpersons.
The industry expects this trend to continue under the next administration.
"The replacement of financial holding company chairpersons during presidential transitions has become almost customary," a banking industry official said. "The policy direction and personnel approach of the next administration will be key variables."
Woori Financial Group Chairman Yim Jong-yong responds to reporters' questions at Woori Bank’s headquarters in Seoul, March 24, 2023, following his appointment to the position. Yonhap
In particular, Woori's Lim is facing growing skepticism regarding his reappointment, as his 2023 appointment already sparked controversy over perceived government intervention in the financial sector, due to his background as a former Financial Services Commission (FSC) chairman.
Industrial Bank of Korea (IBK) CEO Kim Sung-tae, meanwhile, will also complete his term in January next year. Given the nature of policy banks, his chances for reappointment are even slimmer.
Unlike commercial banks, where the board of directors selects candidates for leadership positions, policy banks like IBK follow a system in which the FSC recommends candidates and the president appoints the heads.