Chairman Lim Young-rok of gives his speech at his inaugural as
chairman of the KB Financial Group on June 12. (Photo: KB Financial Group)
Chairman Lim Young-rok at his inauguration ceremony on June 12 said he would like to run the KB Financial Group like “rain falling in a time of need” to serve the people and its customers.
The group will manage the financial assets of its customers safely and protect customer information to the best of its ability as a financial company should, the new chairman continued, to the extent that it will be customer friendly and trustworthy.
He said the environment for banking operations has worsened and the company has to go back to basics and focus on what they do best to prepare for the group’s future growth during his three years in office, as approved at the shareholders meeting on the morning of June 12.
He also said he will make sure that the system for risk control is well in place, much like defense is a key in both soccer and baseball to make a strong team.
Lim said he will make sure that bad assets are cleaned up as the banking environment continues to deteriorate and the bank will strengthen risk management for credit lending in a bid to minimize losses.
He said he will try his best to introduce creative challenges and seek the dynamic growth of the group by boosting productivity and effectiveness.
He said some areas have a smaller profit compared to investments and he knows those areas as he found out while serving as president for the past three years, listening to what went on in the group’s operations.
But he ruled out structural reform for the sake of reducing the number of personnel.
Lim also showed an interest in taking over some of the companies affiliated with Woori Financial Group, especially Woori Investment and Securities Co., which is on the verge of privatization indirectly. He said KB Financial Group’s main business is banking, and he will try to expand the non-banking business in diverse ways. He said retail banking is the sector that should be focused on for expansion, insinuating that the sector is not what it used to be in the past. Kookmin Bank still leads in the sector over rival banks, but other banks are closing the gap every year, even though KB holds 140 trillion won in personal loans. The bank has been busy introducing new loan products with segregated interest rates.
The group has to tighten its risk management, but also needs to expand its financial operations from banking, which takes up nearly 70 percent the group’s total earnings. The group’s Q1 earnings amounted to 411.5 billion won with the banking sector accounting for 296 billion won and the non-banking sector contributing only 30 percent of the group’s total earnings, compared with some 40 percent for Shinhan Financial Group. This is the reason Lim might go all out to get hold of Woori Investment and Securities to boost the group’ non-banking sector earnings.
As far as overseas operations are concerned, he will assess the soundness of the operations amid a worsening financial environment overseas in many areas and try to reduce risks, adding that uncertainties in global finances have caused increased risks.
The new chairman said he will assess the performance records of the heads of each affiliate and then make personnel moves for the stable growth of the group.
He said he will try to spur in-house communication further, especially with labor union leaders, for harmony between management and the union.