Standard Chartered Bank Korea CEO Park Jong-bok (SC Bank Korea)
Standard Chartered Bank Korea’s incumbent CEO Park Jong-bok was recently reappointed for a third term, but the weight on his shoulders is likely to remain heavy over the lender’s localization and dividends.
For Park, who will begin his third term Jan. 8, one major task is to find a balance between the lender’s identity as a foreign bank operating in South Korea amid rivalry with local banking groups.
Though it is still officially called Standard Chartered Bank Korea, Park changed the Korean name of the wholly owned subsidiary of the London-based lender to SC Cheil Bank in 2016. The decision, which salutes SC Bank’s roots as Korea First Bank or Cheil Bank before Standard Chartered acquired the local lender in 2005, was seen as a step toward localization.
But while the rebranding has been considered a success, the lender is facing criticism for its lack of participation in state-run projects.
In May, the financial authorities slashed SC Bank and Citibank Korea’s credit lines for a special state-backed loan program designed to support small-business owners and the self-employed. The program aims to help such people by extending government-funded low-interest loans.
Government support for the program operated by SC Bank was cut back by 3.3 billion won ($2.7 million) to 500 million won, which was then redistributed to local lenders including KB Kookmin, Shinhan and NH NongHyup. It extended loans worth some 10 billion won through the program, compared with NH NongHyup’s 305.7 billion won as of mid-May.
The bank will also have to deal with the continued criticism over the size of its dividend payouts to its parent company in London.
It paid a total 655 billion won in dividends last year, nearly double the net profit it posted last year, which came to 314.4 billion won, to its parent company in London.
Overall, SC Bank sent 42.5 percent of the combined net profit it earned from 2015 to 2019, amounting to 972 billion won to its parent company throughout the cited period, according to Financial Supervisory Service data released in April.
Park is set to serve a total of nine years as chief of SC Bank, as a result of the lender’s shareholders’ and board’s decision announced Thursday.
By Jung Min-kyung (email@example.com