Why KB Financial Chairman Yang Jong-hee Failed to Secure a Second Term Despite Record Earnings

[Financial News] Yang Jong-hee, chairman of KB Financial Group, failed to secure a second term despite the company posting its highest-ever earnings. As the financial sector reacts to the unexpected outcome, attention is turning again to Yang’s recent activities. His successive visits to key members of the National Policy Committee have prompted speculation that he may have been acting with uncertainty over his reappointment in mind.
According to financial-sector sources on the 11th, the KB Financial Group chairman candidate recommendation committee selected Jae-Geun Lee, a division head at KB Financial Group, as the final candidate for the next chairman. The decision followed in-depth interviews and a final vote after the committee narrowed the candidate pool to three on August 27: Yang, Lee, and former Woori Bank President Kwon Kwang-seok.
The financial sector has viewed Yang’s failure to secure a second term as an unexpected result. During his tenure, he delivered clear results in terms of earnings. In 2024, the first year of Yang’s initial term, KB Financial Group posted net income of 5.0782 trillion won, entering the “5 trillion won club” for the first time. Last year, it set another record with 5.843 trillion won in net income. In the first half of this year, it also posted 3.8846 trillion won in net income, its highest-ever first-half performance.
Moreover, Jin Ok-dong, chairman of Shinhan Financial Group, and Jong-ryong Yim, chairman of Woori Financial Group, both succeeded in securing second terms in March this year. This led to predictions that Yang would also be reappointed without any surprises.
However, Yang’s failure to secure a second term has prompted assessments that the financial authorities’ and the National Assembly’s determination to reform corporate governance has effectively come to the surface. The financial authorities have been considering governance improvements aimed at checking long-term reappointments of financial holding-company chairmen and strengthening the independence of boards and chairman candidate recommendation committees. As a result, the direction of the proposed reforms had been cited as a key variable in the selection of KB Financial Group’s next chairman.
Against this backdrop, Yang’s recent visits to key figures on the National Policy Committee have drawn renewed attention. On August 31, Yang held a private meeting with National Policy Committee Chairman Yoo Dong-soo at the National Assembly in Yeouido, Seoul. He also visited the office of Park Sang-hyuk of the Democratic Party of Korea, the ruling party’s committee secretary, and made successive contacts with lawmakers belonging to the National Policy Committee in the second half of the current parliamentary term.
KB Financial Group explained at the time that the visits were customary courtesy calls following the formation of the committee for the second half of the parliamentary term. However, because they took place shortly after the committee finalized the three candidates on the 27th of the previous month, many in the financial sector said it was difficult to view Yang’s actions as entirely separate from the reappointment process. His activities also drew attention because legislative amendments would be necessary to implement the corporate-governance reforms being pursued by the financial authorities.
The committee said it conducted a comprehensive assessment based on various criteria, including work experience and expertise, leadership, integrity, the sharing of the group’s vision and values, and efforts toward sound management over the short and long term.
[email protected] Seo Ji-yoon Reporter