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| Shinhan Financial Group Chairman Cho Yong-byoung, second from right, Shinhan Bank CEO Wi Sung-ho, second from left, and Shinhan Card CEO Lim Young-jin, left, check out a startup's financial technology at the group's event in Seoul, Sept. 28. Courtesy of Shinhan Financial Group |
Cho, Wi to compete for group chairman in late 2019
By Park Hyong-ki
Shinhan Financial Group has made its key subsidiaries "younger and faster" by replacing chief executives of seven Shinhan companies with those in their 50s for the digital age, according to the holding company.
On Dec. 21, group Chairman Cho Yong-byoung held a board meeting and decided to nominate the new chief executives, including Jin Ok-dong for Shinhan Bank and Kim Byung-cheol for Shinhan Investment.
This means Shinhan Bank CEO Wi Sung-ho and Shinhan Investment CEO Kim Hyung-jin are out.
The nominees will take office if their nominations get approval at a shareholders' meeting slated for March.
The announcement has been unexpected as it was supposed to come out early 2019 given their terms expire in March.
All sorts of theories and speculations are surfacing since Cho sacked Wi, with some suggesting Wi wasn't part of Cho's inner circle, but part of former group chief Han Dong-woo's.
Wi was once considered a potential candidate who could compete with Cho for the group chairmanship two years ago, which could have made Cho uncomfortable in their relations.
Also, Wi was implicated in a political scandal in which Shinhan Bank allegedly gave 300 million won to former President Lee Myung-bak's brother Sang-deuk to congratulate the former president on his election victory.
This may have pushed Cho to replace Wi, as the chairman has also been implicated in a scandal involving the group's hiring irregularities. The double scandal would put Shinhan in a difficult position.
Wi's replacement with Jin, who is close to Cho, is said to be backed by Shinhan Bank falling behind KB Kookmin Bank and KEB Hana Bank in terms of profit.
Kim Hyung-jin was replaced because of his age. He was 60 years old, and the latest reshuffle was aimed at making Shinhan younger for the new generation.
Cho told the press after the board meeting, "The replacements were for the future generation," noting that it chose "change over maintaining stability."
This was also in line with the group's vision to become a full-fledged "digitally smart" company by 2020.
To achieve this, Cho added the group will further seek to acquire human resources outside Shinhan for new growth.
This is why the board nominated Kim Byung-cheol for Shinhan Investment CEO and Cheong Mun-kuk for Shinhan Life Insurance CEO.
Kim used to work at Tongyang Securities' investment banking unit (now Yuanta Securities) before joining Shinhan Financial Group in 2012.
Cheong was the chief executive of Orange Life, formerly ING Life. Shinhan Life and Orange are expected to be merged after the group completes its acquisition of Orange.
Chairman Cho has another year left in his contract.
He added Wi and Kim Hyung-jin will be in the group's "human resources pool" with whom Cho will compete for the group chairmanship in late 2019.
Four chief executives, including Shinhan Card CEO Lim Young-jin and Shinhan Alternative Investment Management CEO Kim Hee-song, were able to extend their contracts for another two years.
The replacements have brought down the average age of the group's chief executives to 57, previously from 60, the holding company said.
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