Korea Federation of Banks to announce next chairman candidates Friday

The selection process for the next chairman of the Korea Federation of Banks has formally begun, with the federation set to announce a longlist of candidates Friday.

The federation and its member banks held the first meeting of the chairman candidate recommendation committee via video conference at 8 a.m. Tuesday, according to financial industry sources.

As the inaugural session, the meeting focused primarily on the federation's briefing of the selection procedure. Under the process, member banks nominate candidates, the committee narrows the field through screening, and a final candidate is then put to a general membership vote for formal appointment.

The federation will convene the second committee meeting Friday, at which the longlist is expected to be announced.

In the private sector, former KB Financial Group Chairman Yoon Jong-kyoo and former SC First Bank President Park Jong-bok are widely mentioned as leading contenders. Yoon is credited with swiftly resolving a governance crisis at KB Financial and steering the group to the top of the domestic banking industry. Park has spent more than 30 years in banking since the First Bank era and holds the title of longest-serving bank chief in the country.

While private-sector figures are gaining momentum, the possibility of a dark-horse candidate emerging from government or political circles cannot be ruled out. Those currently mentioned from the public sector include former Financial Services Commission Chairman Eun Sung-soo, former Industrial Bank of Korea President Yoon Jong-won and NH NongHyup Financial Group Chairman Lee Chan-woo.

During the 2020 selection, former Democratic Party of Korea lawmaker Min Byung-doo, who had served as chairman of the National Assembly's Political Affairs Committee, entered the race and made the longlist. Both Yoon Jong-won and Lee Chan-woo are veteran officials from the Ministry of Economy and Finance.

However, Eun has recently told those around him that the position "does not apply to him," signaling he is effectively not interested in running.

The pivotal factor is expected to be how the heads of state-owned banks cast their votes. The government and political circles have frequently used state-owned banks as a channel to signal their preferred candidates, which is why industry watchers regard the state bank chiefs' leanings as a key variable in this selection.

"Given that a pool of candidates has taken shape, the likelihood of a completely new name being put forward out of nowhere is not high," a senior financial industry official said. "But the state-owned banks will hold the casting vote when it comes to trimming the longlist."

The next chairman will also inherit a formidable set of challenges. Financial regulators are pressing banks to expand credit supply under the banners of inclusive finance and productive finance, while tightening governance-related regulations in the name of transparency. The incoming chairman will need to navigate government policy priorities while fulfilling the federation's broader role of championing the financial industry.

Selection processes for the next heads of the Korea Life Insurance Association and the General Insurance Association of Korea are also expected to get under way soon. The life insurance body is currently led by Kim Cheol-ju, a former Ministry of Economy and Finance official, while the non-life insurance association is headed by Lee Byeong-rae, who previously served at the Finance Ministry and the Financial Services Commission. Their terms expire in early December and late December, respectively.