KB chief hopes successor transforms group into 'Samsung of finance'

KB Financial Group's outgoing chair, Yoon Jong-kyoo, said Monday that he hopes his successor will realize his unattained goal to grow the group as a top-10 financial firm in the world.

"I previously said I want to turn the group into the 'Samsung of finance,' but now that I look back, I feel a lot of regret when thinking about how much progress we've made (on global stage)," Yoon said at a press conference held at the group’s headquarters in Seoul. He will step down on Nov. 20.

"As a leading financial group in Korea, we should ideally be within the top 10 or 20, especially considering the size of our country's economy. However, the fact that KB Financial Group is ranked around 60th among global financial firms makes me feel ashamed," he added.

The British financial publication the Banker annually releases rankings of the world's financial groups. KB Financial Group was ranked 60th last year.

"Yang Jong-hee (the final candidate for the chair position and current vice chair of KB Financial Group), in his role as vice chairman overseeing global and insurance business, possesses a deep understanding of the field. I believe he will make progress more swiftly than I did," Yoon said.

Yoon also emphasized that KB Financial Group regards Indonesia as a "second mother market," signifying its status as the most significant market after that of its home country, Korea. He said this is why the group is putting all-out efforts into normalizing Bank KB Bukopin, its Indonesian subsidiary.

"Bank KB Bukopin's digital system upgrading process will be completed by June next year, and it might take a little longer to deal with all the bad debt," he added.

According to the group, Bank KB Bukopin aims to turn around by 2025. The Indonesian bank has been experiencing a continuous upward trend in its accumulated net losses, which rose from 43.4 billion won ($32.5 million) in 2020 to 272.5 billion won in 2021, and further escalated to a significant 802.1 billion won last year.

Along with emphasizing the financial group's efforts, Yoon also talked about policy changes that should take place to boost Korean financial groups overall.

Chairman Yoon said that there are certain disadvantages in the fee structure in Korea compared to foreign financial institutions.

"When I meet with investors abroad, they are surprised by the fact that KB Financial Group has 37 million accounts operating. This indicates that there are many customers who have multiple accounts because there are no account maintenance fees in Korea," Yoon explained.

This issue needs to be addressed in collaboration with the financial authorities as it becomes burdensome and wasteful to manage accounts that are not used, according to Yoon.

"According to our research, introducing account maintenance fees alone would result in a 10 percent increase in our non-interest income," he added.

In August, Yoon decided not to seek a fourth term. At the time, Yoon said he made the decision for the group's "new future and transformation." The incumbent chair has held the post since 2014.