KB Financial chief making changes
By Kim Jae-won
Staff reporter
KB Financial Group’s new chairman Euh Yoon-dae made another headline on the finance pages Monday as he formally announced that he has moved his main office from Myeong-dong to Yeouido where the group’s flagship Kookmin Bank is headquartered.
His move sends two messages to the market. One is that he will try to spend more time with bank executives and employees because of the significance of the bank, which accounts for more than 90 percent of the group’s total revenue. The other is that the move hints that he will spearhead the organizational reform that he declared during his inauguration speech.
No matter which was his intention, one thing obvious is that Euh is seeking to usher in a new era by relocating to the Yeouido office. KB said that this move is aimed at reconciling the fractured relationship between the financial group and Kookmin Bank.
“KB Financial Group and Kookmin Bank did not have a good relationship before. Former group chairman Hwang Young-key and former Kookmin CEO Kang Chung-won had conflicting attitudes on business,” said a senior manager of Kookmin Bank on condition of anonymity.
“They were apart from each other. Hwang was in KB’s Myeong-dong office, while Kang stayed at Kookmin’s Yeouido office.”
The two different main offices actually results from the lender’s history of mergers and acquisitions. The Myeong-dong site had been the main office of the original Kookmin Bank, while Yeouido was the headquarters of the Housing & Commercial Bank, which merged with Kookmin in December 2001.
“It may be good for him to stay at Yeouido to meet more employees and executives because Kookmin Bank occupies about 90 percent of the group’s total business,” the senior manager added.
It seems like Euh will fully use the conveniences to his benefit. The former Korea University president visited the union’s office, which is based in Yeouido on July 14, just one day after his inauguration.
He also visited the Yeouido branch last week to meet and encourage employees and had meetings with executives of two small companies on the island.
Euh’s gesture for reconciliation and cooperation is not limited to only within the group. He distributed Korean rice cakes to the other 50 financial firms in Yeouido including the Korea Exchange Bank on Monday to ask for cooperation with KB. It appears that he even intends to spread KB’s new changes to outside the firm.
It is a Korean custom to distribute rice cake to neighbors when someone moves to a new town and hopes to form good relationships.
The 65-year-old professor-turned-businessman also plans to break down the walls between him and other employees and customers with various outdoor activities, such as mountain climbing and golf on the weekends.
A native of Jinhae, South Gyeongsang, Euh is set to appoint the head of Kookmin Bank, a position which has remained vacant after former CEO Kang Chung-won bowed out a week ago.
Euh sent a letter to 1,400 randomly selected employees. The letter asked their opinion on who would be the most fit to fill the role of the bank’s presidency among 12 candidates, mostly Kookmin Bank’s executive vice presidents and the group’s executives.
Employees said they are pleased to be taking part in the process of selecting their new chief executive.
“I think it is a good idea though I am not included in the blessed 1,400 employees,” an employee of Kookmin Bank said, asking for anonymity.
“Euh tries to listen to the ideas of the employees. It is a big change in the banking industry, which usually has a conservative office culture with strict hierarchy.”
Kookmin also announced Tuesday to raise its deposit interest rates by up to a 0.5 percentage point per annum, the biggest increase among local commercial lenders.
Customers welcomed Euh’s efforts and expressed hope that his leadership will provide improved banking services for them.
“I definitely applaud his approach to dealing with the employees and customers,” Lim Soo-hyang, a Kookmin Bank customer and a housewife who lives in Singil-dong, Yeongdeungpo District, said.
“I hope this change will result in better services for customers.”