Two candidates emerge for Sh Suhyup Bank chief post as ethics review looms over regulator pick

Two-way race for next Suhyup Bank chief: Shin Hak-ki, Lee Hyung-joo emerge as front-runners

Sitting financial regulator's bid triggers post-retirement employment review

Restrictions on handling certain duties could clash with bank chief's core responsibilities

A two-way race is taking shape for the next president of Sh Suhyup Bank, with incumbent President Shin Hak-ki and Korea Financial Intelligence Unit Director Lee Hyung-joo emerging as the leading contenders. The involvement of a sitting senior financial regulator in the selection process has raised new questions about post-retirement employment screening and potential conflicts of interest.

According to financial industry sources Friday, the bank's CEO candidate recommendation committee completed document screening of all applicants on Sept. 9 and confirmed all six as interview candidates. Internal candidates include Shin, the current president, and former deputy presidents Jeong Cheol-gyun and Park Yang-su. External candidates are Lee, the KoFIU director; Lee Hyung-seung, an outside director at BNK Securities; and Kang Cheol-seung, a former professor at Chung-Ang University.

Industry sources have identified Shin and Lee as the most likely picks.

Shin is credited with laying the groundwork for a financial holding company conversion during his tenure by pursuing acquisitions of non-banking affiliates. The bank's total assets surpassed 70 trillion won for the first time this June, up from 57.8 trillion won ($42.2 billion) at the end of 2024. On the non-banking front, Shin completed the acquisition of Trinity Asset Management, marking Suhyup's first merger and acquisition in its 63-year history. The bank is also considering acquiring Sangsangin Investment & Securities and a capital finance company.

Lee's appeal lies in his extensive experience across financial policy as a career financial bureaucrat. He entered public service through the 39th administrative examination and has served as head of the Financial Services Commission's financial policy division, director general of the financial industry bureau, director general of the financial policy bureau, and standing commissioner. If selected, Lee would become the first FSC alumnus to lead Suhyup Bank.

Sh Suhyup Bank President Shin Hak-ki (left) and Korea Financial Intelligence Unit Director Lee Hyung-joo. [Provided by Sh Suhyup Bank and the Financial Services Commission]

However, Lee's status as a sitting official means post-retirement employment screening and conflict-of-interest rules could complicate his candidacy. As a member of the Senior Executive Service, the KoFIU director is subject to a three-year post-retirement employment restriction. If a close connection is found between the duties of the agency where the official served during the five years before retirement and the prospective employer, the relevant public officials ethics committee must conduct a review.

Industry observers note that KoFIU directly supervises and inspects Suhyup Bank's anti-money laundering operations, which could be enough to establish a work-related connection. KoFIU issued a prior notice to Suhyup Bank in March imposing a fine of 1 billion won and has been carrying out follow-up procedures since.

Even if employment is approved, the scope of duties Lee could perform after taking office may pose an additional issue. Under the Public Officials Ethics Act, an official may be barred for two years after retirement from handling certain matters they directly processed before leaving office, as well as certain matters their former agency handles with the employing institution. Since the bank president is responsible for overseeing internal anti-money laundering controls, those restrictions could conflict with core duties of the role.

Regarding this, the public officials ethics committee is expected to weigh the degree of the candidate's involvement and any grounds for exemption from the employment approval requirement before making a final determination.

Meanwhile, the recommendation committee is scheduled to conduct interviews Monday before deciding on a final candidate Tuesday. The five-member panel comprises three nominees recommended by the Ministry of Economy and Finance, the Financial Services Commission and the Ministry of Oceans and Fisheries, along with two representatives from the National Federation of Fisheries Cooperatives. At least four of the five committee members must agree on the next president. The appointment will be finalized following approval by the board of directors and a shareholders meeting next month.

forest@heraldcorp.com