KB to Lead Mega Bank Merger

Kookmin Bank CEO Kang says KB will lead the emergence of mega banks for the global presence of Korean banks

President Kang Chung-won of Kookmin Bank stressed that the bank should lead the formation of a mega bank in Korea when the nation’s banking industry is ready for a second jump in its development. He made the statement at a morning meeting of the bank’s staff on April 2 at the bank’s head office in Yeouido, Seoul, breaking the long silence he has maintained since last December when he withdrew his name despite being named chairman of KB Financial Holding by the shareholders, the mother company of KB Financial Group, after its former chairman Hwang Young-key resigned.
He said everyone at the bank should do their best to overcome the current problems facing the bank in order to pave the way to be a global leading bank. “We have to fight and win the struggle that takes 10 years and smile at the end.”
Banking sources said Kang’s speech on the emergence of a mega bank in Korea awakened the talk on mega banks and it may have coincided with the appointment of Choi Joong-kyung as a new senior Presidential secretary for economics at Cheong Wa Dae. Choi is a close associate of former Minister of Finance Kang Man-soo, an advisor to President Lee Myung-bak. Both are known to have been proponents of mega banks so that they would rank among the top 30 banks in the world in terms of capital.
Kang said the bank should strive to secure both stability and high profit levels at the same time with the “wisdom to catch two rabbits at the same time.” He said the bank should manage the net interest margin very well this year, but also try to manage housing and corporate loans well for better balance in its loan portfolio.
Kang recalled that the bank’s operation last year maintained its position as the largest retail bank in the country with a substantial expansion in its overseas presence.
He said much like the IMF crisis, the recent unrest in the global financial market has forced KB to experience difficult times while presenting it with new challenges. For the bank, 2009 was the year the bank implemented the ‘New START Management’ strategy in an attempt to improve the organization’s overall make up. “Simultaneously, the entire staff at KB worked diligently to cultivate new opportunities and strengthen our core businesses,” he said.
Furthermore, 2009 saw KB rank first in the National Consumer Satisfaction Index (NCSI) for the fourth consecutive year, firmly cementing the bank’s reputation for quality in customer service. There were other honors as well, such as KB’s fourth consecutive CSR Award; the South Korean House of the Year award at the Asia Risk Awards; top prize at Chosun Ilbo’s Environmental Management Awards; and being selected as Korea’s Best Employer. All in all, it was a year that further solidified Kookmin Bank’s standard of excellence in a number of key areas. At the same time, KB provided unstinting support to small and medium enterprises and microfinance applicants and was at the forefront in the development of future growth engines, such as low-carbon, green growth businesses.
“For 2010, we expect a number of new policies and laws to be put in place as measures to prevent the recurrence of financial turmoil. That will also mean greater competition among financial institutions, both domestic and foreign. As such, Kookmin Bank’s strategic objective for 2010 is to strengthen our status as a leading bank through change and innovation, and everyone at Kookmin Bank will work in unison to accomplish this mission,” Chairman Kang said.
2010 is a crucial year for KB in its quest to maintain its top ranking in the industry for a full decade. “We will respond proactively to changes expected in the market place, such as international restrictions and restructurings, while actively participating in the restoration of Korea’s economic health through job creation, financial stabilization for the working class, and continued support for green-growth businesses. In addition, we plan on increasing the bank’s role in generating synergy within the financial group to bring about steady and balanced growth for KB Financial Group and encourage healthy competition throughout the industry,” he said.
“For the New Year, Kookmin Bank will maintain our dedication to fulfilling social responsibilities while bolstering our position as the standard-bearer of the Korean financial industry. We promise to continue our growth as a trustworthy name befitting the expectations of our shareholders and customers. Thank you for your continued loyalty and support, and we sincerely hope that you and your family enjoy health and happiness in the New Year.” nw

President Kang Chung-won of Kookmin Bank.