Survival Is Key Word for Bank Chieftains
KB Financial CEO Hwang Stands Out by Vowing to Go for M&A
By Yoon Ja-young
Staff Reporter
CEOs of local banks have shown a strong will to survive in 2009, which is expected to be tough for lenders, by bolstering soundness and enhancing effectiveness in their New Year speech to employees. The head of the country's biggest lender, however, sounded slightly different.
Kookmin Bank (KB) CEO Kang Chung-won emphasized profitability and cutting costs. ``To overcome the financial crisis, we should focus on improving net interest margins and creating non-interest income as well as making efforts for stable and effective financing and management,'' Kang said.
He also called for improving risk management. ``We shall cut social costs by accelerating workout programs on firms that need restructuring or pre-workout programs on firms that are likely to survive.''
While Kang's tone of speech was similar to speeches of other bank CEOs who picked fiscal soundness and profitability as key priorities, KB Financial Group Chairman and CEO Hwang Young-key was a little different. His keyword for 2009 was M&A. ``Financial market conditions will be very difficult in 2009, and financial companies are likely to survive via M&As,'' Hwang said in a New Year speech. ``KB Financial Group won't be an exception in the M&A industry spree.''
Since his inauguration as the head of the country's biggest financial business, Hwang has shown his commitment to M&As. Kang, meanwhile, has emphasized stability in management.
``Our CEO just suggested sticking to the principles of bank management in his New Year speech, while Hwang suggested M&As as a strategy for the group,'' explained a bank spokesman.
Shinhan Bank to Slim Down
Shinhan Bank President and CEO Shin Sang-hoon stressed that the bank needs restructuring, expecting the business environment to be tougher than ever, with economic recovery far ahead. ``Nobody can be sure that there won't be expulsions or restructuring in the local financial industry as happened in overseas markets,'' Shin said. He called for employees to strengthen their will to survive the difficult times.
``Many businesses will suffer sluggish sales and liquidity problems, and banks' soundness and capital adequacy are likely to worsen due to business bankruptcies.'' The bank is planning a major overhaul in its headquarters' structure and slimming down some sectors while bolstering others. ``While we should be focusing our energy on areas that needs investment, not a penny should be wasted.''
Woori to Bolster Sales
Woori Bank President & CEO Lee Chong-hwi showed a strong determination to bolster sales.
Lee said 2008 was a difficult year for banks and Woori was no exception. Its fiscal soundness, net profit, and BIS ratio worsened. Lee, however, said there was some good news for the bank, including being picked as the best bank in the country by The Banker magazine.
``2009 will see an unprecedented global financial crisis and economic recession. Neither the country nor Woori Bank will be excluded,'' he said, stressing strengthening liquidity. ``We should improve the loan to deposit ratio by increasing deposits and strengthening our capability for foreign exchange liquidity, where there should be no weak point.''
He also called for enhancing profitability and soundness in asset management, as well as cutting costs and enhancing effectiveness. He said the bank would see a paradigm shift in sales. The bank, which marks its 110th anniversary this year, aims to achieve over 1 trillion won in net profit by bolstering sales.
Hana to Focus on Risk Management
Hana Financial Group Chairman Kim Seung-yu said the main task for the group is to enhance risk culture. ``It is needless to stress that the core of the financial industry is risk management.''
He said the Titanic tragedy could have been avoided had it heeded the warning of a ship ahead of it. ``We should improve risk detection through learning and training, and continue to build up a risk-sensitive mind.''
Kim asked employees to keep in mind that a small crack in the system could expand risk and demolish the group's assets and fame in a day.
He also called for customer-oriented strategies, citing customers' growing discontent over fund and derivative products. Hana Bank, which had a difficult time in 2008, is likely to focus on managing fiscal soundness and enhance effectiveness, rather than aggressive expansion.
IBK to Help Small Businesses
Yun Yong-ro, chairman and president of the Industrial Bank of Korea (IBK), emphasized the bank's role as a financier of small businesses.
``We cannot but shudder watching financial companies, boasting 150 years of history, close down due to a moment's negligence,'' said Yun, who successfully became a bank CEO after thirty years as a ranking government official.
He added that while the bank is in a relatively stable situation thanks to the governmental capital increase, it should remain alert. ``Let's change the way we work and our corporate culture. We should focus on customer satisfaction.''
The CEO emphasized its role in financing small businesses. ``We have reason enough to be proud of our role as a main financier of small businesses. There are many promising businesses with world-class technology experiencing difficulties due to a temporary liquidity trap.'' He said the bank should help such businesses overcome the crisis and become globally competitive.