[비즈한국] The Nomination Committee of NH NongHyup Financial Group announced that it held a meeting last December and nominated Lee Chan-woo, former Senior Deputy Governor of the Financial Supervisory Service (FSS), as the next chairman. A former bureaucrat, candidate Lee previously served as Director of Comprehensive Policy at the Ministry of Economy and Finance, Director General of Economic Policy, and Assistant Minister. Candidate Lee is scheduled to undergo final vetting on January 24. If approved, he will be named the final candidate in February and officially appointed as Representative Director and Chairman at an extraordinary general meeting of shareholders.
Expectations Were for Former Chairman Lee Seok-joon’s 'Reappointment'...
Until the middle of last year, the financial sector widely expected the reappointment of former NH NongHyup Financial Group Chairman Lee Seok-joon. The reasoning was that the former chairman was well-positioned in his relationship with the Yoon Suk-yeol administration. Lee served as Minister of the Office for Government Policy Coordination during the Park Geun-hye administration and also worked on Yoon Suk-yeol’s presidential campaign.
Former Chairman Lee Seok-joon also delivered strong performance. Since taking office as chairman in January 2023, NH NongHyup Financial Group's net profit rose 23.37% from 2.0603 trillion won in 2022 to 2.5419 trillion won in 2023. In the first three quarters of 2024, the group recorded a net profit of 2.627 trillion won, already surpassing its total profit for 2023.
However, it is known that former Chairman Lee Seok-joon did not have a smooth relationship with Kang Ho-dong, Chairman of the National Agricultural Cooperative Federation (NongHyup). The National Agricultural Cooperative Federation holds a 100% stake in NH NongHyup Financial Group. Realistically, it is a structure where the financial group cannot afford to ignore the federation.
The conflict had surfaced previously. Early last year, Chairman Kang Ho-dong recommended Yoo Chan-hyung, former Vice Chairman of the National Agricultural Cooperative Federation, as the representative for NH Investment & Securities005940. Former Vice Chairman Yoo worked on Chairman Kang’s campaign during last year’s election. However, former Chairman Lee Seok-joon insisted that the NH Investment & Securities nomination committee should appoint a representative independently. Ultimately, Yoon Byung-woon, former Vice President of NH Investment & Securities, was appointed. During the National Assembly Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee audit last October, Chairman Kang Ho-dong clarified the appointment, stating, "It was more about presenting the views of the National Agricultural Cooperative Federation rather than a conflict (with NH NongHyup Financial Group)."
Financial authorities had maintained an atmosphere of supporting former Chairman Lee Seok-joon, even exerting subtle pressure regarding the federation's intervention in the financial group's management. FSS Governor Lee Bok-hyun said last March, "While credit and economic businesses (at NongHyup) are separated, there is room for concern about whether risks are clearly distinguished. We must examine whether there is any possibility of shaking the rational corporate governance system related to the separation of banking and commerce or internal controls."
However, the FSS’s attitude has subtly shifted recently, showing a nuance that the influence of the National Agricultural Cooperative Federation on NH NongHyup Financial Group must be acknowledged to some extent. Regarding the appointment of the chairman last December, Governor Lee Bok-hyun stated, "We have communicated extensively with the National Agricultural Cooperative Federation, and they have agreed to share our perspective on risk management. I believe they will appoint someone who balances financial expertise with affection for farmers."
The FSS is widely considered to have lost significant influence following President Yoon Suk-yeol's emergency martial law declaration. Governor Lee Bok-hyun was once called President Yoon's closest confidant, but with the impeachment motion passed by the National Assembly, his position is no longer secure. Even without impeachment, the governor has less than six months left in his term, which ends in June 2025.
Ultimately, former Chairman Lee Seok-joon failed to secure reappointment. He left the group on December 31, 2024, his final day in office. Currently, Vice President Lee Jae-ho is serving as acting chairman.
Is the Relationship with Chairman Kang Ho-dong a Variable?
Traditionally, most chairmen of NH NongHyup Financial Group have been former bureaucrats. Out of the seven past chairmen, only the first, Shin Chung-sik, and the sixth, Son Byung-hwan, were internal NongHyup figures. A staff member who worked at a NongHyup affiliate hinted, "Although NongHyup is not a public enterprise, it receives so many projects from the government that it looks like one. It is better to maintain a smooth relationship with the government because a lack of cooperation could significantly impact NongHyup’s performance."
However, appointing a figure too closely tied to the Yoon Suk-yeol administration could be a burden for the financial group. If the Constitutional Court upholds the president’s impeachment, an early presidential election is expected. A regime change could occur as early as the first half of this year.
Some analysts suggest that the selection of Lee Chan-woo as the next chairman reflects the recent political climate. Candidate Lee is the younger brother of former Democratic Party lawmaker Lee Yong-woo. He served as an administrator in the Policy Planning and Civil Affairs offices at the Blue House during the Kim Dae-jung administration. He was appointed Assistant Minister of Strategy and Finance during the Park Geun-hye administration and became Senior Deputy Governor of the FSS during the Moon Jae-in administration. He is evaluated as a figure who can appeal to both liberal and conservative camps.
Nevertheless, like former Chairman Lee Seok-joon, Lee Chan-woo’s relationship with Chairman Kang Ho-dong may act as a variable in future management. Most of the recently appointed CEOs of NH NongHyup Financial Group subsidiaries are known to be close to Chairman Kang.
For instance, the recently appointed Kang Tae-young (CEO of NH NongHyup Bank), Song Chun-soo (CEO of NH NongHyup Property & Casualty Insurance), and Park Byung-hee (CEO of NH NongHyup Life Insurance) are all from the Gyeongsang region. In particular, Song Chun-soo hails from Hapcheon, South Gyeongsang Province, which is the same hometown as Chairman Kang. It is reported that not only these CEOs but many who have recently taken key positions in NongHyup affiliates have close ties to the chairman.
There is also discomfort in political circles regarding Chairman Kang’s personnel choices. During the National Assembly audit last October, People Power Party lawmaker Park Duk-hyum pointed out to Chairman Kang, "Media reports suggest this is a re-employment window for Kang Ho-dong’s campaign team." Chairman Kang responded, "Rather than specifically a campaign team, they are people who shared my vision during the election period and helped me in various ways, both explicitly and implicitly."
BizHankook inquired with NH NongHyup Financial Group about its relationship with political circles and Chairman Kang Ho-dong, but a representative stated, "We have no separate comment."