This is the first in a two-part series on challenges facing Yun Yong-ro as the first CEO of the Korea Exchange Bank after Hana Financial bought it from Lone Star, the Texas-based private equity fund. ― ED.
By Kim Jae-won
What is the biggest challenge facing Korea Exchange Bank (KEB) Chief Executive Officer Yun Yong-ro in his new capacity?
There may be many that compete for his attention but his success or failure will come down to two tasks ― whether he can bridge the gap between him and his new employees, and the differences between Hana and Lone Star, KEB’s former owner.
KEB employees still have elitist elements, considering the lender’s past as a specialist in foreign exchange and the main credit bank for big firms at the height of the country’s export-oriented miraculous economic expansion.
Hana has grown under the charismatic leadership of Kim Seung-yu, who has relinquished his top post as chairman to Kim Jung-tae, the Hana Bank president.
The two organizations had very different beginnings so it is up to Yun to bring them together for post-merger integration, despite a five-year grace period agreed to by Hana and KEB.
Yun can rely on his experience as a former chief of the Industrial Bank of Korea, a state-controlled bank that he invigorated to enable it to compete head-to-head with commercial lenders.
His ability to coordinate, tested and honed through his bureaucratic career peaking in his stint as vice finance minister, should be an asset.
“But his sense of humor will, above all, be the key,” a source said.
Yun’s dry humor serves him well as an icebreaker in conversations and meetings. Hana patriarch Kim chose Yun, meaning he has won the former’s trust. Now, winning KEB employees’ trust is his next task.
At an organizational level, Yun needs to help KEB break with the eight-year reign of Lone Star, a Texas-based private equity fund.
Lone Star bought KEB to sell it at a profit at the earliest possible date so it was often criticized for making future-oriented investments.
Under Lone Star’s rule, KEB made a great deal of profit not because of its good products or excellent business decisions but because of generally favorable business conditions.
If this Lone Star culture has been instilled in the KEB workforce, Yun should do away with it as soon as possible so they will be able to start from a clean slate.
Yun has made a good start but the jury is still out on determining whether he has made the right start.
He has promised various training programs as well as investing in educating employees to make sustainable development the goal in the future.
Experts say it is the first step of the bureaucrat-turned-banker’s reformation plans for the nation’s sixth-largest bank.
“I will restart education programs and let employees listen to lectures,” said the 57-year-old CEO during a luncheon meeting with reporters last week.
“There were no education programs under Lone Star’s leadership. The private equity company did not provide business classes to employees nor invest in training because its goal was to sell the bank.”
Yun said that KEB employees even forgot how to manage education programs. He took the example of a senior official at the bank who said it was the first time for him to design such a program.
The CEO hinted that he would renovate the bank’s training center in Singal, Gyeonggi Province saying it was too small ― it can hold a maximum 210 people.
Renovating the training center was one of main requirements which the lender’s trade union asked of former CEO Larry Klane last summer. Klane promised KEB union leaders he would do so and provide education chances for the staff but didn’t.