Daring Vision for KB Holding Co.

Chairman-designate Euh unveils his plan to bolster Kookmin Bank to be a global mega bank

Chairman-designate Euh Yoon-dae of KB Financial Holding Co. said he will try to make Kookmin Bank a mega bank through mergers and acquisitions so that it can play a larger role in the international financial market.
Euh, who currently heads the Korea Brand Promotion Committee as a confidante of President Lee Myung-bak, and who is also a former chancellor of Korea University, told reporters following the announcement of his designation as the CEO to head the financial holding company that he will go for M&As with either Woori Bank or Korea Development Bank (KDB) to make KB bigger and more powerful so that it can compete better with its international rivals. He also said he will push for personnel as well as organizational reforms at KB Financial Holding. He is a graduate of Korea University, a couple of years behind President Lee.
He said he is well qualified to run a financial institution, having served as an outside director three times in the past ― twice for KDB and once for Hana Financial Holding. He also was a member of the Financial Services Commission and chairman of the National Wealth Fund Management Committee. In addition, he was in charge of the sales subcommittee of the Public Fund Management Committee handling the sales of Jeju Bank and Seoul Bank, gaining valuable experience in financial restructuring.
Euh said he will also seek to change the current situation on the collection of overseas business information to the extent that the financial institutions will be the ones to provide the information to other businesses, which is the opposite of the way it currently operates. Businesses collect the information now faster and in greater quantities these days than financial institutions.
He will also try to make banks more competitive by leading them to strengthen their overseas operations, since there is little room for growth at home, and have them secure personnel trained to handle their overseas operations.
They should also have strong governance systems in order to expand their overseas operations along with strong leadership in order to sustain their long-term strategies, he said.
He pointed out that Nokia of Finland is a dominant IT firm in its homeland, which is why the famous cell phone maker has been able to dominate the global IT market. Likewise, a Korean firm should be a dominant one at home in order to compete successfully in the overseas market. A domestic bank has to be big at home to go abroad. Santander Bank in Spain is a dominant bank in its homeland and has been successful in its overseas operations.
He said KB and Woori Bank would do well as partners as they can mutually supplement each other’s weak spots. He said he doesn’t have any intention to acquire Korea Exchange Bank, as KDB would be a better takeover target in terms of synergy for KB.
He said KDB would have failed to run Lehman Brothers successfully had it taken over the financial firm, as not many employees would have stayed with the firm to the point that KDB would have been unable to run it properly. He said KDB was not ready to take over the firm.
Euh also said not anyone can run a bank as its CEO because the position requires a great degree of experience and the next CEO of KB should be chosen by this criteria. Someone with extensive banking experience both inside and outside of the bank should be chosen to head KB.
But, he said, it is also important to train talented employees to promote them to key positions in the bank they work for including top executive positions, so that CEOs can be promoted from within.
“It is particularly so when a new chairman of a financial group is looking for means to boost rational operation and effective management of its affiliates, thus CEOs promoted from inside would come in handy in those situations,” he said.
The former university chancellor said he would not enter politics nor join the government in the future, saying that he will remain in the private sector because he believes significant change will come in a year or so and he wants to be a player in the change.
Euh said he always believed that implementation is more important than a plan. When he actually takes over the helm of KB Holding, he will turn the company around, changing its existing systems. nw

Chairman-designate Euh Yoon-dae of KB Financial Holding Co.