Newly Inaugurated Finance Minister May Affect Leadership Changes in Banks

With the inauguration of Lee Hun-jai as deputy prime minister and minister of finance and economy, there will be big leadership changes in major financial institutions.

Those who had worked closely with him are highly likely to rise to top positions. Some expect, however, that Mr. Lee will apply strict and objective principles to personnel decisions.

Many financial institutions, including seven banks, have outgoing presidents whose tenures end this year. Among them are Yoon Byung-chul, Chairman and CEO, Jun Kwang-woo and Min Euoo-sung, Vice Chairmen of the Woori Financial Group, and Lee Duk-hoon, President and CEO of Woori Bank, as well as presidents of Kyongnambank, Kwangjubank and Jeonbukbank. KorAm bank will have a new president in May, Shinhan in September, and Kookmin in October. The president seat of Kiupbank is vacant for the time being.

Since President Roh Moo-hyun abolished the chief economic advisor system that had had a huge influence on leadership appointments in the banking sector, the government has not had much say in personnel.

“Things have changed with Lee’s taking office,” said a senior bank official. “The Blue House may have guaranteed he would hold sway over appointments.”

Most of the bank leaders whose tenures expire this year took office when Lee was chairman of the Financial Supervisory Commission, and have some kind of relationship with him.

Much attention is paid to how his influence would be displayed in the leadership appointment of Kiupbank and Woori Financial Group.

Currently, there are 17 candidates for the seat of Kiupbank president, including the former deputy director the Financial Supervisory Service Chung Ki-hong, who reportedly has strong ties with Lee.

Many candidates for the top seat of Woori Financial Group are also connected to him directly or indirectly.

One bank official said that Lee may oppose appointing those who were responsible for soaring household debt and credit card problems or those who are not competent in management, regardless of whether they have a relationship with him.

Joong-Hyun Park Chi-Young Shin sanjuck@donga.com higgledy@donga.com