“After Yang Jong-hee’s Surprise Replacement...” KB Securities and Asset Management CEO Appointments Under Close Watch [fnMarketWatch]

[Financial News] Yang Jong-hee’s failure to secure another term as chair of KB Financial Group has introduced a new variable into CEO appointments at financial investment affiliates, including KB Securities and KB Asset Management. Although the focus had been on reappointments based on performance, Jae-Geun Lee, a KB Financial Group division head, has been selected as the next chair. As a result, the capital-markets leadership lineup formed under Yang’s administration will also be subject to the new chair’s judgment, industry observers say.
According to financial and investment banking industry sources on the 14th, KB Financial Group plans to begin appointing affiliate CEOs at the end of the year, after the Jae-Geun Lee administration launches in November. Attention in the financial investment industry is focused on KB Securities and KB Asset Management, the group’s two key nonbanking businesses.
The prevailing assessment is that the biggest variable in this round of appointments is the change in chairmanship, rather than performance.
A senior financial investment industry official said, “By choosing Lee over Yang, the chairmanship candidate recommendation committee effectively sent a message emphasizing ‘bold change and generational renewal.’ As a result, it has become difficult to assume that the existing formula for reappointing affiliate CEOs will remain unchanged.”
KB Securities, in particular, is regarded as a barometer of the group’s capital-markets strategy. At the end of last year, Sunghyun Kim stepped down as head of the investment banking division, while Kang Jin-doo was newly appointed as CEO and Lee Hong-gu was reappointed as head of the wealth management division. Since Kang is in his first year as CEO, the key issue to watch is not simply whether the CEO will be replaced, but how the new chair will define the securities unit’s role and management structure.
KB Asset Management is also entering the personnel review cycle. Although Kim Young-sung was reappointed at the end of last year, a key variable under the new chair will be how the group connects its asset-management businesses—including wealth management, retirement pensions and exchange-traded funds—with the asset manager. Some observers also suggest that the securities and asset-management businesses could be repositioned within the group’s broader asset-management and capital-markets strategies, rather than managed separately.
The investment banking industry viewed these appointments as the process of building the first “capital-markets leadership lineup” under the Jae-Geun Lee administration. Had Yang been reappointed, stable personnel decisions based on performance were expected. But with a change in chairmanship, the starting point for the appointments itself has changed, industry sources said.
A senior financial industry official noted, “Since generational change emerged as a central theme from the chair-selection process onward, it will be difficult to assess affiliate appointments solely according to the existing reappointment formula. For the securities and asset-management businesses, what roles they will play in the new chair’s envisioned nonbanking strategy will become as important as their performance.”
The official added, “The key question surrounding the year-end appointments is already becoming a hot-button issue: Will Yang Jong-hee’s replacement end with the chairmanship alone, or will it lead to a reshuffling of the leadership lineup at the group’s capital-markets affiliates? As the first personnel decisions under the Jae-Geun Lee administration turn toward the securities and asset-management businesses, industry interest is also growing significantly.”


[email protected] Reporter Kim Kyung-ah Reporter