CEO Watch NongHyup Bank CEO urged to spur digitization
NongHyup Bank CEO Son Byung-hwan
By Lee Kyung-min
Newly appointed NongHyup Bank CEO Son Byung-hwan is expected to exercise superb leadership and management capabilities to steer the company through a difficult economic environment, compounded by organizational discord brought on by a power struggle between the bank's holding group and its owner.
Son, who took office on March 26, will be required to lead a strong digitization drive to shed the bank's negative reputation as a “latecomer,” a feasible task given his previous experience as the bank's smart finance division head and corporate strategist. Global business expansion is another key task.
The former vice president of NongHyup Financial Group, the bank's holding company, began his two year term starting March 26 after the group's shareholders meeting approved the appointment.
The primary task will be to align his business priorities with low interest rates, coupled with the economic fallout from the spread of the new coronavirus ― COVID 19.
A major change is inevitable to revise the bank's growth objective identified as “Beyond 1.5 plus,” whereby the bank sought to record over 1.5 trillion won ($1.2 billion) in net profit in 2020.
The grand objective announced in January was largely reflective of the bank's outstanding performance over the past few years.
The bank reported over 1.51 trillion won in net profit in 2019, following 1.22 trillion won in 2018 and 652.1 billion won in 2017.
The outlook for corporate earnings in 2020 will be much gloomier given the central bank lowered the key rate to 0.75 percent amid virus spread, which also weighs heavily on overall business conditions across the economy.
His performance will inevitably draw comparison with his predecessor Lee Dae-houn whose third term was cut short by his sudden resignation in early March.
Lee was the first ever NongHyup official that clinched a third term, widely recognized for his performance illustrated by record-breaking net profits during his term.
The lingering sense of division left by Lee's departure will be another test of Son's leadership, because Lee was essentially pushed out alongside other heads of the financial group's key subsidiaries.
The group-wide reshuffle was carried out in less than a month after National Agricultural Cooperative Federation (NACF) Chairman Lee Sung-hee was elected Jan. 31.
Most of the heads of the financial group, wholly owned by NACF, were dismissed as the new chairman sought to appoint new figures at the top, in what he said was a legitimate course of action given the agricultural federation is the group's sole shareholder.
Equally important is the bank's initiative of digitization and global expansion.
Son is expected to enhance the bank's online platform, a prerequisite for efficient cooperation with budding fintechs.
A closer cooperation with its overseas counterparts will be needed to facilitate its plan to set up branches in five countries including China, Hong Kong, India, Vietnam and Australia within the next three years.