[비즈한국] The terms of KB Securities’ co-CEOs, Kim Sung-hyun and Lee Hong-goo, are set to expire on December 31 of this year. Naturally, the financial sector is focusing on who will be the next representative of KB Securities. KB Financial Group Chairman Yang Jong-hee105560, who holds the reins, has implemented personnel reshuffles that seem to prioritize reform since taking office. This has sparked significant interest in whether the current CEOs of KB Securities will be reappointed. In particular, eyes are on CEO Kim Sung-hyun, who has held his position for seven years.
KB Securities is currently managed under a co-CEO system with Kim Sung-hyun and Lee Hong-goo. Kim oversees the Investment Banking (IB) division, while Lee manages the Wealth Management (WM) division. Both CEOs' terms end on December 31 this year. CEO Kim took office in 2019, while CEO Lee took office in 2024. In a sense, Kim is a long-serving CEO.
KB Securities announced on the 30th that its net profit for the third quarter of this year was 160.7 billion won. This is a 7.56% decrease compared to the 173.1 billion won recorded in the third quarter of last year. KB Financial Group explained, "While brokerage revenue increased significantly due to the bullish domestic and international stock markets, earnings were impacted by factors such as preemptive provisions set aside for real estate project financing (PF) sites."
Although the fourth quarter remains, current trends suggest that this year's annual net profit is likely to be lower than last year's. While KB Securities' net profit for the first three quarters of last year was 552.6 billion won, its net profit for the first three quarters of this year was 502.4 billion won, a 9.08% decrease year-on-year. This stands in contrast to the rising net profits of competitors like Korea Investment & Securities and NH Investment & Securities005940.
As KB Financial Group explained, considering the preemptive set-aside of provisions, KB Securities' management performance cannot be viewed as entirely poor. In fact, total revenue for KB Securities increased by 10.86% from 8.0476 trillion won in the first three quarters of last year to 8.9513 trillion won in the same period this year. Because of this, rumors of the reappointment of CEOs Kim Sung-hyun and Lee Hong-goo are circulating in the securities industry.
The variable is Chairman Yang Jong-hee of KB Financial Group. Chairman Yang chairs the 'Subsidiary CEO Candidate Recommendation Committee' within the KB Financial Group board of directors. He is in a position to exert immense influence over the appointment of CEOs for KB Financial Group subsidiaries. Since taking office in November 2023, Chairman Yang has displayed a personnel management style that prioritizes reform over stability. Shortly after taking office, at the end of 2023, he replaced six CEOs at KB Insurance, KB Asset Management, KB Capital, KB Real Estate Trust, KB Savings Bank, and the WM division of KB Securities. At the end of last year, he also appointed new CEOs for key subsidiaries, Kookmin Bank and KB Kookmin Card. Fortunately, CEOs Kim Sung-hyun and Lee Hong-goo were reappointed at that time.
If Chairman Yang Jong-hee pursues reform-driven personnel changes again this year, the reappointment of Kim and Lee cannot be guaranteed. In particular, Kim Sung-hyun held the position of KB Securities CEO even before Chairman Yang took office as KB Financial Group Chairman. For this reason, some assess that it is difficult to consider CEO Kim as one of "Chairman Yang’s people." CEO Kim was born in 1963, and most current CEOs in the securities industry are younger than him.
While KB Securities' revenue has increased, the decline in net profit provides grounds for holding management accountable for performance. A securities industry official commented, "If you look closely at KB Securities' performance this year, it's not actually bad, but it draws comparison because some other firms hit the jackpot. Given that KB Financial has undergone major personnel reshuffles over the past few years and younger CEOs are emerging at other firms, the reappointment of CEOs Kim Sung-hyun and Lee Hong-goo cannot be guaranteed."
Although the schedule for appointing the next KB Securities representative has not been officially announced, the financial sector expects the outline to be revealed by mid-December. A financial industry official stated, "In the case of last year, it took quite a while due to the Kookmin Bank president appointment, but this year it is expected to take relatively less time as there is no Kookmin Bank president appointment."