Lee Jae-geun named KB Financial Group's next chairman candidate

Born in 1966, five years younger than incumbent Yang Jong-hee

Youngest-ever Kookmin Bank chief seen as insider with fast-track record

Year-end reshuffle at subsidiaries also in focus

Lee Jae-geun, head of KB Financial Group's global, wealth management and SME division [KB Financial Group]
Lee Jae-geun, head of KB Financial Group's global, wealth management and SME division [KB Financial Group]

KB Financial Group has chosen Lee Jae-geun, 60, head of its global, wealth management and SME division, as its next chairman candidate, passing over incumbent Chairman Yang Jong-hee, 65. The decision defied widespread expectations in the financial industry that Yang would win a second term, with the group opting for a generational shift even as it posted record earnings.

KB Financial's chairman candidate recommendation committee met Friday and announced it had nominated Lee for the top post.

Committee Chairman Jo Hwa-jun said the group had reached "a point where bold change and a generational shift are needed to strengthen its core competitiveness and secure future growth engines, rather than resting on its current strong performance," adding that Lee was chosen as "the right person to lead that change."

Lee was born in 1966, making him five years younger than Yang. Both men are career insiders who have held key positions at KB Kookmin Bank and KB Financial Group, but Lee has long been regarded as a fast-tracker among his peers — he was appointed the industry's youngest-ever bank chief in 2022.

Up until the announcement, the financial industry had widely expected Yang to be reappointed. He had been credited with diversifying the group's business portfolio over the past three years, enabling balanced growth across core subsidiaries including its banking, securities and insurance arms.

On that foundation, KB Financial's cumulative net profit for the first half of this year approached 3.9 trillion won ($2.91 billion), setting an all-time record. The group also reduced its reliance on banking operations, lifting the non-banking segment's profit contribution to above 40 percent. It expanded inclusive finance initiatives and moved proactively to develop a KB Financial Town in North Jeolla Province's innovation city, lending momentum to balanced regional development.

Even so, the committee concluded that new leadership was needed to navigate the restructuring of the financial industry and a full-scale shift in money flows. It described Lee as "a chairman candidate with the capabilities to lead KB Financial's future and sustainable growth."

Lee is understood to have been highly regarded for overhauling KB Kookmin Bank's earnings structure during his tenure as its chief, laying the groundwork for the bank to post a record net profit last year and reclaim its position as the country's top lender.

"It appears the committee chose change out of concern that complacency with current results could allow rivals to close the gap," a financial industry official said. "This was an outcome the market did not see coming."

The appointment is expected to set the tone for year-end executive reshuffles at major KB subsidiaries, including KB Kookmin Bank, with attention focused on whether the push for change and generational renewal will carry through.

The timing of the process has also drawn attention, as the candidate recommendation procedure was completed ahead of the Financial Services Commission's planned announcement of governance improvement guidelines for financial holding companies. The committee said it "launched the process early in accordance with a succession plan that had been transparently established in advance," adding that it applied objective verification criteria to enhance the overall credibility and fairness of the succession process.

Some in the financial industry have raised the possibility of a link between the appointment and an unscheduled tax audit of KB Kookmin Bank by the Seoul Regional Tax Office that began last month. However, those inside and outside KB Financial maintain that the committee based its decision on the need for future growth and generational change, independent of Yang's management record, and that no outside influence was involved.


attom@heraldcorp.com