By Lee Hyo-sik
Staff Reporter
New KB Financial Group Chairman Kang Chung-won faces a number of daunting tasks in turning the nation's largest financial holding company into a globally competitive financial institution.
First, Kang has to deal with controversy surrounding the selection process, with his rivals calling it unfair and biased.
Financial regulators are also reportedly unhappy with Kang as the new KB Financial chairman, saying he has been running Kookmin Bank as his own private company by taking advantage of the dispersed ownership structure. Kang's election, however, indicates that the government respects the autonomy of the private company, analysts said.
Many KB employees welcomed Kang's chairmanship which will contribute to continuity and stability in their organization and management, they said.
After being named chairman, Kang expects the new KB president to be picked soon, vowing to dedicate himself to the development of the financial group without any preoccupations and to serve out his three-year tenure.
He will likely continue to face pressure from outside for overhauling KB Financial's corporate governance structure, including reshuffling its board of directors.
Kang also has to find ways to solidify the domestic banking leadership through an extensive customer base and sales networks.
The chairman also needs to strengthen KB's non-banking sector to attain balanced growth and maximize synergy among its subsidiaries, as well as to provide comprehensive financial services, with Kookmin Bank accounting for more than 95 percent of total revenue.
On Thursday, an ad-hoc recommendation committee, consisting of KB Financial external directors, announced that Kang was picked unanimously as the group's second chairman after interviewing him for two hours.
The committee had initially planned to interview two more candidates - Korea Asset Management Corp. CEO Lee Chul-hwi and former Samsung Economic Research Institute senior executive Kim Byung-ki. But the two withdrew their bid Tuesday, leaving Kang the sole contender for the helm of Korea's largest financial holding firm.
Lee and Kim reportedly decided to pull out of the running, realizing that they would be unlikely to win the race, given Kang's close ties with some of the recommendation committee members.
Some industry watchers had speculated Kang might not appear at the interview. But he showed up and the recommendation committee gave him the green light.
When the board of directors approves the committee's decision Friday, Kang, who has been an acting chairman since September when former Chairman Hwang Young-key stepped down over investment losses while at the helm of Woori Bank, will become the second chairman of KB Financial.
However, he has a lot of work to do in order to increase the financial group's assets to 600 trillion won by 2013 and turn it into one of the top 10 financial groups in Asia and top 50 in the world under the group's latest blueprint.
High on his domestic agenda is to acquire Korea Exchange Bank (KEB). Hana Financial Group, Korea Development Bank and other local lenders have also shown interest in the nation's fifth largest bank, controlled by U.S. private equity fund, Lone Star Funds. Kang also has to steer KB to make inroads into foreign markets. Kookmin Bank signed a contract with Lone Star in 2006 to purchase a majority stake from the private equity fund. But the deal failed because of a prosecution investigation into Lone Star's alleged violation of laws in 2003. But Kang wants a second chance, saying the group has been preparing to purchase KEB for the past three years, vowing to make it part of the KB family.