NH Financial Group welcomed Kim Yong-hwan as the new chairman on Wednesday, but it appeared to have done so with a rather heavy heart.
The new chief not only has to prove himself a capable successor to Yim Jong-yong ― who became chairman of the Financial Services Commission ― but is also facing allegations that he had illicit ties with the disputed Keangnam Enterprises.
Hit by the sudden exit of its much-reputed leader, NH Financial initially welcomed the nomination of Kim, who had served in key financial posts including president of the Export-Import Bank of Korea.
But the group was soon perplexed as his name popped up in the ongoing Sung Woan-jong graft scandal.
Kim Yong-hwan. (Yonhap)
The pressure was especially heavy on NH Financial, which had been involved in consecutive financial scandals in recent years ― ranging from the breakdown of its computing system to a massive customer information leak.
“I will lead (NH Financial Group) to be a stable and durable financial company,” Kim said at his inauguration ceremony on Wednesday.
He hinted that the agriculture cooperative-based banking group may have expanded exponentially, but its content and capacity had not yet caught up with the size of the business.
“Overseas expansion is no longer a choice but a must as our conventional sources of revenue have reached their limit,” he said, pledging to make the most of his past experience as Korea Eximbank chief.
Last year, NH Financial recorded a net profit of 768.5 billion won ($720 million), which was up 162.3 percent from the previous year but still short of the yearly target of 905 billion won. Also, its total return on assets was 0.28 percent, falling below the industry average of 0.36 percent.
Despite Kim’s ambitious plans, the board of directors remains anxious about the new leadership.
Kim’s name was mentioned during the recent prosecutorial probe on Keangnam Enterprises, as Korea Eximbank drastically extended the credit security limit for the company during his tenure as president.
The state-run bank is expected to suffer a financial loss of 200 billion won or more as Keangnam Enterprises has been delisted for insolvency.
Kim was also recorded to have met with the deceased Keangnam chairman Sung Woan-jong, whose note led to the allegations that several high-ranking government officials took bribes from him.
The new NH Financial chief, however, denied having any personal ties with the disputed company or its deceased chief.
“It was quite common for Korea Eximbank to grant a credit security limit of that level at the time,” he told reporters, claiming that the credit approval was within business protocol.
“It was only last year that the regulations were changed to limit credit ceilings in proportion to the amount of approved loans.”
Though the given disputes seemed to subside, Kim could nevertheless be summoned for questioning.
Another heavy burden for the new NH Financial chief is to outshine the halo of his predecessor Yim, who had overcome the prejudices against former government officials and improved the group’s structure.
It was also under Yim’s leadership that the agriculture-backed banking group took over Woori Financial’s brokerage houses and suddenly rose to be the nation’s fourth-largest financial unit.
Born in Boryeong, South Chungcheong Province, in 1952, Kim graduated from Sungkyunkwan University with a degree in economics. He joined the civil services by passing the state exam in 1979.
By Bae Hyun-jung (firstname.lastname@example.org)