With KB Financial Group’s next chairman candidate pool narrowed to three, some observers say the likelihood of incumbent Yang Jong-hee (양종희) being reappointed has increased. Ruling party-government discussions that had sought to directly limit long-term reappointments of financial holding company chairmen by law also appear to have shifted toward strengthening voting procedures at chairman nomination committees.

On Aug. 27, KB Financial’s chairman nomination committee said it selected three finalists after conducting in-depth interviews with six candidates for the next chairman. The shortlist consists of former Woori Bank chief Kwon Kwang-seok (권광석), KB Financial Chairman Yang, and KB Financial division head Lee Jae-geun (이재근).

That narrows the race to two internal candidates and one external candidate. The initial pool also included KB Financial division head Lee Chang-kwon, KB Kookmin Bank CEO Lee Hwan-ju, and one external candidate who requested anonymity, but they did not pass the first round on Thursday. The committee will hold a second in-depth interview with the three on Sept. 11 and then finalize one candidate.

In the financial sector, some assessments say Yang’s reappointment chances have risen further after the incumbent made the shortlist. Above all, his performance during his term supports that view.

KB Financial posted net profit of 5.08 trillion won in 2024, the first year of Yang’s tenure, and then recorded a record 5.84 trillion won last year. It also posted net profit of 3.88 trillion won in the first half of this year, up 13.1 percent from a year earlier, setting another record for a half-year period.

Attention is also on recent institutional changes surrounding financial holding company governance. Ruling party-government discussions on improving governance are converging more on strengthening the board’s responsibility in the reappointment process than on directly limiting a chairman’s term by law.

Among measures currently being discussed, it has been reported that voting thresholds at the nomination committee would be raised to 75 percent for a reappointment and unanimity for a third term. A plan to legally restrict a third term is being reviewed as an alternative through a special resolution at the committee, after controversy was raised over possible unconstitutionality and overseas legislative cases.

For Yang, this appointment would be his first bid for reappointment, making it less directly related to the currently discussed unanimity requirement for a third term. Rather, KB Financial has reportedly already been operating procedures comparable to the strengthened voting measures being reviewed by the government, such as making unanimous consent by all committee members a principle when selecting the final candidate. It also explained that this succession process began earlier than before to secure time for candidate vetting, and focused on narrowing information gaps among candidates by providing internal materials to external candidates.

Ultimately, whether Yang is reappointed is increasingly likely to be decided by the remaining vetting process rather than by institutional changes. Record earnings and stable group management are strengths, but additional variables cannot be ruled out as the government’s interest in financial holding company governance has increased.

A key variable is a special tax audit currently under way by the National Tax Service into KB Kookmin Bank.

A special tax audit currently under way by the National Tax Service into KB Kookmin Bank is also one of the variables. The Seoul Regional Tax Office’s Investigation Bureau 4 has secured Kookmin Bank accounting materials and launched a non-regular tax audit. The audit is scheduled to continue through the end of this year, and the specific reason for the audit has not been confirmed.

With Yang included in the three-candidate field on Thursday, whether the audit’s results later lead to an issue of management responsibility remains a variable on his path to reappointment.

Cho Hwa-jun (조화준), the chairman of the nomination committee, said, "This management succession process is being carried out transparently based on fair and objective standards." He added, "We will do our best through the end so that the best qualified person whom all stakeholders can trust can be appointed as the next chairman."