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Photo: IBK Industrial Bank of Korea |
[Alpha Biz= Paul Lee] With less than a month remaining in the term of Kim Seong-tae, President of IBK Industrial Bank of Korea (IBK), the financial sector is closely watching the selection process for his successor. Speculation ranges from Kim’s potential reappointment to internal promotions and external appointments, though any choice is expected to provoke debate. As the Financial Services Commission (FSC) submits final candidates to the President, the outcome remains uncertain.
According to sources in the financial sector, Kim’s term ends on January 2. A decision regarding the next president is expected to emerge by the end of this month, but it remains too early to confirm whether Kim will be reappointed or replaced. As a state-owned bank, IBK does not use an executive candidate recommendation committee; instead, appointments follow the FSC nomination and presidential approval process, which is largely opaque and influenced by political and policy considerations.
Since taking office in January 2023, Kim has received recognition for notable achievements. IBK has supplied KRW 2.5 trillion in venture capital to innovative ventures and startups through November 2024, with over 30 companies completing listing procedures. The bank has also advanced its overseas operations, obtaining a local banking license from Poland’s Financial Supervision Authority (KNF) in November, establishing a foothold in the European market. During Kim’s first year, interest income increased 6.5% year-on-year, operating profit rose 4.7% in 2023, and cumulative net profit through the third quarter of this year reached a record KRW 2.2597 trillion.
These accomplishments have sparked speculation about Kim’s reappointment. However, no internally appointed IBK president has ever successfully secured a second term. To date, only former presidents Jung Woo-chan and Kang Kwon-seok—both external appointees—have been reappointed, making Kim’s potential reappointment a break from established precedent.
Internal control issues may also complicate reappointment discussions. Until July of last year, IBK uncovered improper loans totaling approximately KRW 88 billion over a seven-year period, raising concerns over the bank’s internal controls. In addition, delinquency rates have risen: as of the third quarter, the one-month-plus delinquency rate stood at 1.0%, and the non-performing loan ratio at 1.35%, up 0.14 and 0.04 percentage points year-on-year, respectively. Financial industry observers note that “regardless of performance, the risks associated with internal control issues could make reappointment a difficult decision.”
Consequently, an internal candidate may also be considered for the next president, following recent examples at the Korea Development Bank and the Export-Import Bank of Korea, both of which appointed internal executives to lead. Leading internal candidates include Kim Hyung-il, IBK Senior Executive Vice President; Seo Jeong-hak, CEO of IBK Investment & Securities; and Yang Chun-geun, former CEO of IBK Pension Insurance. However, promoting from within carries the potential burden of perceived accountability for past internal control shortcomings.
알파경제 Paul Lee 특파원(hoondork1977@alphabiz.co.kr)
