Chairman of KB Financial Group and President of Kookmin Bank Yoon Jong-kyoo won the “most attention” amongst executives of 17 banks in Korea, according to written questionnaires answered by the heads of the 17 banks and compiled by local media at the end of last year.
The attention is focused in different areas: the president of Kookmin Bank with the largest number of customers among the banks in Korea. After an incident shook the bank, it plowed forward successfully, the local daily said after analyzing the questionnaires.
The banks that received the most attention were Shinhan Bank, Hana Bank and Korea Exchange Bank, which are to be merged soon, which is expected to produce synergy.
In the questionnaires, many bank presidents didn’t project optimism for the coming year, with 10 of them saying that the economy would be about the same as 2014, and three bank heads saying the banking environment would be worse this year than last.
The greatest danger to the banks this year will be corporate defaults, due to poor economic conditions sweeping the nation in 2015, which are expected to hit hard small businesses owned by individuals and SMEs in particular. Small business owners worried most about the sluggish economic conditions that could lead to bankruptcy. Five bank heads said SMEs would also be hurt by the poor economic conditions.
Eleven of the bank heads said their banks would focus on SMEs so that they can weather the poor business conditions well this year and still grow. They will provide loans to those small firms as much as they can so that they can keep themselves going. SMEs are included among the major industrial areas that the banks want to foster and grow this year. Most banks concluded that the SMEs still are one of the areas with many risks, but is still worth extending loans to make profits.
The heads of the 17 banks in their answers to the questionnaires cited corporate defaults due to poor economic conditions as the largest risk that they may face this year, followed by the sluggish economies of many EU member nations, a probably increase in U.S. bank interest rates, household loan defaults, government regulations and low interest rates at home.
The banks also picked SMEs as the most explorative area for their profits this year — although the risk may be greater than other areas — followed by credit lending to individual borrowers, the service sector, the fishery and maritime shipping sectors, credit card business and management of individual assets.
They felt that household loans would be a hard area to make a profit due to tough government regulations to avoid defaults of household loans, while the corporate loan sector would be hard for banks to achieve profits due to the narrow interest rate margins.
The personnel management system at KB Financial Group has become a center of attention now that Chairman Yoon Jong-kyoo, a career man Kookmin Bank, has now been named to run the group, sources close to the financial group said recently.
For years, the top jobs at the financial group went to to outsiders, under what they call the “parachute personnel system,” usually with highly-placed persons in financial circles pulling the strings to give “their men” top jobs at state-owned firms.
The new chairman feels that he will have to show that his leadership is not easily shaken by bureaucratic stonewalling, as well as union meddling in personnel matters.
Chairman Yoon soon be testes early over whether or not to push for a new personnel system in the selection of the next president for Kookmin Bank, the largest affiliate of the financial group.
