The unexpected selection of Lee Jae-keun, a division head at KB Financial Group, as the next chairman has fueled expectations of a wider-than-usual year-end reshuffle at the country's largest financial holding company. Nine chief executives of major affiliates, including Kookmin Bank President Lee Hwan-joo, see their terms end in December, and a large number of holding company executives are also up for reassignment.
Lee is set to be formally named chairman at an extraordinary shareholders meeting on Nov. 20, following a recommendation from the chairman nomination committee and the board on Oct. 2, according to financial industry sources on the 14th. Organizational changes and affiliate CEO appointments under the new chairman are expected to begin in earnest as early as late November. KB Financial has typically convened its affiliate CEO nomination committee in mid-December to recommend candidates for affiliate heads whose terms are expiring.
The biggest question in this year's reshuffle is the future of Kookmin Bank President Lee Hwan-joo. Born in 1964, the bank chief is two years older than Lee Jae-keun, who was born in 1966, and his two-year term ends this December. A first extension is possible, but because the nomination committee cited generational change as a key factor in its choice of chairman, that could also become a variable in the bank president's future.
Other executives approaching the end of their terms include Lee Hong-koo, head of KB Securities' wealth management division; Koo Bon-wook, chief executive of KB Insurance; Kim Jae-kwan of KB Kookmin Card; Chung Moon-chul of KB Life Insurance; Kim Young-sung of KB Asset Management; Bin Joong-il of KB Capital; Sung Chae-hyun of KB Real Estate Trust; Yoon Beop-ryul of KB Investment; and Park Chan-yong of KB Data Systems.
A restructuring of the holding company is also unavoidable. KB Financial currently operates under a three-division structure led by Lee Jae-keun, Lee Chang-kwon, head of the future strategy division, and Kim Sung-hyun, head of the CIB market division. With Lee moving to the chairmanship, follow-up appointments at the division head level are expected. Among holding company executives overseeing areas such as strategy and finance, 19 see their terms end at the end of this year. Chairman Yang Jong-hee also carried out a sweeping overhaul shortly after taking office in November 2023, replacing six of the eight CEOs whose terms had expired and abolishing the vice chairman posts created under former Chairman Yoon Jong-kyoo.
Yang's failure to win reappointment, meanwhile, has been widely seen as a surprise both inside and outside KB. It was his first bid for a second term, and he oversaw record earnings during his tenure. It also stands in contrast to the recent successful reappointments of the chairmen of Hana, Shinhan and Woori financial groups. A KB Financial official said people inside the group were startled by the outcome, adding that Lee Jae-keun had prepared well and that the nomination committee appears to have thought highly of his management abilities.
The committee is seen as having placed more weight on future growth strategy than on current earnings. KB Financial posted net profit of 5.843 trillion won ($4.2 billion) last year, retaining its position as the top financial holding company, but its individual affiliates trail the leaders in their respective sectors. Kookmin Bank's net profit of 2.2254 trillion won in the first half of this year lagged Shinhan Bank's 2.4585 trillion won, while KB Securities' net profit of 801 billion won was about one-third of Mirae Asset's 2.9052 trillion won. The choice is read as reflecting a judgment that the group needs to strengthen banking competitiveness under Lee, a former bank president, while finding a breakthrough in future businesses such as capital markets.
Some also see the outcome as evidence of independent judgment by the board. An official involved with the nomination committee said the committee is an independent body, and that members reached their own conclusions after in-depth interviews, with Lee's career record earning strong marks.
That reading is reinforced by past chairman selections at KB that also defied expectations. In 2023, then-Vice Chairman Hur Yun, a former Kookmin Bank president, was seen as the front-runner, but the committee chose Yang Jong-hee, then also a vice chairman, as its nominee.
The decision could ripple into year-end appointments of bank chiefs at other financial holding companies. Along with Lee Hwan-joo, Shinhan Bank President Chung Sang-hyuk, Hana Bank President Lee Ho-sung, Woori Bank President Chung Jin-wan and NH NongHyup Bank President Kang Tae-young all see their terms end on Dec. 31. Chung Sang-hyuk has already served one extension, while the other three are in their first terms. One financial industry official said the industry had assumed an incumbent chairman with strong earnings would naturally be reappointed, and that the collapse of that assumption has made the rest of this year's appointments across the sector hard to predict.
