Huge Overhaul at KB Financial Group

Chmn. Euh to reform the financial group by splitting credit card unit from Kookmin Bank to save costs and boost profits

Chairman Euh Yoon-dae of KB Holding Co. plans to overhaul the KB Financial Group, especially Kookmin Bank, by gradually trimming down the number of its employees and at the same time holding down personnel expenses. Vice President Min Byung-dok has been promoted to become the next president of Kookmin Bank and Lim Young-rok, vice minister of the Strategy and Finance Ministry, has been named CEO of KB Holding Co. They will be formally inaugurated with the approval of the shareholders in their upcoming meeting.
Both KB financial and Woori financial groups sustained losses in the second quarter while both Shinhan and Hana financial groups recorded excellent performance results during the same period. The mismanaged risk management has been cited for the poor results for both financial groups, while better financial risk management has been singled out for the very good performance results for both Hana and Shinhan.
Chairman Euh wants to remold the financial group so that it can again be profitable and will start off by splitting off KB Card, the group’s credit card unit, from Kookmin Bank. Former president Kang Chung-won kept the credit card operation under Kookmin Bank, but Euh wants to make the credit card division an independent unit as soon as the new president agrees to the move.
Euh wants to give the credit card firm the right to set its own budget, marketing plans and public relations and feels that it would take about seven to eight months to finish the job of freeing the unit from the bank to operate independently.
The chairman also launched a task force to study the direction of overhaul of the financial group. It will examine the business lines of Kookmin Bank and other affiliates in detail and it will inform the CEOs of each affiliate the problems they found so they can take actions to either supplement or revise them.
The task force is made up of some 100 staff picked from various sectors of the financial group, which employs some 20,000. Some say the task force is too big, but Euh feels that that the group will not have trouble operating although that many personnel were taken away from their jobs, including those with the bank, the largest in Korea.
The task force will be in operation until the end of this year, although the period can be extended if necessary for six months or even for another year if the need arises.
Vice President Park Dong-chang of KB Holding Co. is head of the task force and is expected to play a key role in directing the activities of the force when everything is settled around him, since he has just been named to the job.
The new president for Kookmin Bank will have the full authority to appoint all six vice presidents, as the positions have been vacated with all of them tendering their resignations upon the naming of the new president, according to the tradition of the bank. But Euh wants to go over the list of the new vice presidents before they are announced officially.
The chairman felt that the appointment of the new Kookmin Bank CEO and President of KB Holding Co. have been well received by the financial community. President-designate Min has been known as a virtuous executive who treats everyone with courtesy and is not a hard-nosed leader, while KB Holding Co. President-designate Lim has been a career public official with a wide-ranging knowledge of the international finance and was once assigned to work in the Ministry of Knowledge Economy. Euh said he has been meeting branch managers, beginning with the 30 women branch managers in Seoul and the 50 around the country as part of his plan to overhaul the bank in consultation with President-designate Min who is awaiting the approval of shareholders at the upcoming meeting for his official appointment. nw

(From left) Chairman Euh Yoon-dae at the podium leads a launching of the Kookmin Financial Group’s task force to reform the group affiliates including Kookmin Bank on July 27.; President Lim Young-rok of KB Financial Holdings Co. Vice President Kim Wang-ki of KB Financial Holdings Co.