The new chairman of beleaguered KB Financial Group Co. vowed Friday to earn a new reputation for the country's second-largest banking group by restoring consumer confidence and diversifying its business portfolio. 

"KB Financial had led the South Korean financial industry a decade ago, but we failed to keep up with the market trend and allowed our competitors to take over our position," Yoon Jong-kyoo said in his inauguration ceremony.

"I will reorganize the company to improve retail banking business and strengthen our competitiveness in commercial banking and investment banking businesses."

He said he will set up a corporate culture in which each employee can work autonomously and help improve the group's competitive edge in face-to-face service.

After being endorsed at a shareholders' meeting earlier in the day, Yoon began his three-year term as the chairman of the country's second-ranked banking group by asset. He also serves as the president of the flagship Kookmin Bank, the No. 2 commercial bank in the country.

Yoon, 59, started his career at the Korea Exchange Bank in 1973 and became an accountant in the early 1990s. He was recruited by a former Kookmin Bank president in 2002 to work as the bank's deputy president.

After stepping down from the bank post in 2004 due to an accounting mishap, Yoon returned to KB Financial as the chief financial officer in 2010. He was picked as the new chief of KB Financial on Oct. 22, ending a months-long internal power struggle between the former leaders of the banking group's holding company and the bank over an expensive computational system change.

Former KB Financial Chairman Lim Young-rok and Kookmin Bank President Lee Kun-ho exchanged insults with each other, and the internal feud became very much public as financial authorities slapped punishments on the leaders, culminating with their resignations.

The incident sparked a heated debate about South Korea's financial banking system, which oddly couples a flagship bank that accounts for nearly 70 percent of the group's total assets and profits with the holding company that wields greater authority in principle only.

"It is a fact that there has been subtle conflict between the holding company and its banking affiliate. I thought it'd be better that I lead Kookmin Bank concurrently to iron out the problem,"

Yoon said at the shareholders meeting. "It's the best option to normalizing KB Financial and restoring the reputation of Kookmin Bank."

He also expressed a strong will to acquire LIG Insurance Co., saying that he will "cordially" ask the financial regulator to speed up the decision on the takeover.

"If we bring in the insurance business, we will have many chances to create synergy with the bank, credit card and life insurance businesses," Yoon said. "LIG Insurance has a good consumer network, and its car insurance business isn't bad."

His comments came after recent news reports that the Financial Services Commission is considering not approving the takeover due to the recent feud within the banking group.

Shares of KB Financial fell 0.88 percent to finish at 39,400 won (US$35) on the Seoul bourse on Friday, with the benchmark KOSPI edging up 0.35 percent. Yoon was inaugurated after the market closed. (Yonhap)