CEO Min seeks to invigorate Kookmin

KB Kookmin Bank CEO Min Byong-deok talks to The Korea Times during a recent interview at his office in Yeouido, Seoul.

KB chief sees turnaround for BCC in coming years

The rap sheet on KB Kookmin Bank was simple: A big, but boring bank that punches below its weight and gets routinely beaten by quicker rivals in new markets. The company’s response to its reputation problem was to hire a CEO who raps.

The KB Kookmin Bank, the central business unit of the KB Financial Group, has been undergoing dramatic changes in recent years, displaying more organizational efficiency and improved pace and purpose in its business decisions.

Much of this has been credited to CEO Min Byong-deok, a 57-year-old lifelong banker out to prove that even an old corporate dog like KB Kookmin could thrive by learning some new tricks.

In a recent interview with The Korea Times, Min expressed pride in the innovation he has initiated since taking the management helm in July 2010.

While his main goal obviously was to make the bank more profitable and better prepared for the long-term future, he also invested Herculean efforts to give the KB brand a younger and cooler image. If that required him to rap in front of college students in Seoul’s hippest leisure district, then so be it.

“It was during one of our corporate promotion efforts that took place in front of Hongik University. I took the stage and performed in a rap competition dubbed `I’m a Rapper.’ A banker should always be ready to be a versatile, ‘all-around’ player to satisfy customers and potential customers of all ages and that’s who I am trying to be,’’ he said.

If only kids today preferred martial arts like the Bruce Lee-loving generations before them. The lanky Min, who is over 1.8-meters tall, has practiced taekwondo for more than four decades and is a licensed instructor. But as a CEO, he clearly gets more out of his awkward beats than polished kicks.

Musical performances are just one of the many activities KB has been pushing as it accelerates its efforts to reach out to the younger generation of consumers. It has opened 41 branches around university campuses in Seoul and other major cities, naming them “KB Rock Star’’ and tailoring services to target students.

The efforts clearly paid off as one college survey distinguished Min as the country’s most respectful CEO.
“KB Kookmin has been a bank popular among those over 40. However, we are encouraged to see more and more young people coming through those doors,’’ Min said.

But transforming KB Kookmin from an aging industry mammoth to an up-and-coming juggernaut may take more than massaging the egos of young people. Revamping the image will be only cosmetic if KB Kookmin fails to realize global aspirations and Min is aware of this.

Currently, KB Kookmin has 12 business units in 10 countries, but Min says three more foreign branches will be added to the list this year. The contribution of overseas businesses is barely visible in KB Kookmin’s income sheet now, but Min claims that the proportion will double digits after the next few years.

The global businesses of Korean banks have been anything but, as they were nearly entirely dependent on providing financial services to Korean firms operating in foreign locations. Min has a thirst for bigger things and vows to compete toe-to-toe with local banks over customers.

“Localization is a key strategy in our efforts to go global,’’ he said.
“I had lunch with the CEO of HSBC Korea today, and he said most of the group’s profit is generated from its global businesses thanks to its successful localization strategies that apply differentiated approaches to different markets. That is our role model right there.’’

Min said KB Kookmin will focus on hiring and training international talent, who will be a larger part of the group’s business in both the immediate and long-term futures. The bank has hired a group of MBAs with tentacles ready to reach into global finance centers like London, New York, Singapore and Hong Kong.

Employees in Korea will be required to be global citizens as well. The bank is providing classes that cover more than 20 foreign languages, and more than 500 of its employees have applied for the program.

Min has already showed international business savvy. One case was his handling of the Bank Center Credit (BCC), the sixth-largest bank in Kazakhstan that was acquired by KB Kookmin in 2008.

BCC had been a basket case for KB Kookmin profit wise and its huge losses also factored in the disgraceful departure of former KB Kookmin CEO Kang Chung-won. But after a ruthless reformation process choreographed by Min, the bank is now back to money-making form.

BCC posted a net profit of 925 million Kazakhstani tenge, or $6.25 million, in the first three months of 2011, for when the latest financial figures are available. KB Kookmin officials say the business at BCC remains to be on the way up.

“BCC is getting better and better. It turned around last year and will be normalized in three to four years. I changed the leadership at the bank and sent Seo Kwi-yeol, our risk-management specialist, to direct the bank, and I think everything is starting to click,’’ Min said.

“BCC will be a stepping stone for the Commonwealth of Independent States (CIS) countries. The region has big growth potential thanks to their abundant natural resources tempting investment from many Korean companies.’’

Min admitted that KB Kookmin’s globalization efforts will be far from smooth and the biggest obstacles he sees are government regulations against foreign financial players. For instance, China does not allow Korean banks to run credit card businesses, while Indonesian authorities ban foreign banks from having more than a 50 percent stake in local lenders.

While Min is eager to expand beyond borders, he remained coy about whether the KB group will ever enter the race to acquire the state-owned Woori Financial Group, which competes closely with KB for the title of the country’s largest business group.

The Financial Services Commission (FSC) is seeking to sell the government’s 57 percent stake in Woori, which was rescued by taxpayers in the fallout of the late-1990s Asian financial crisis. The regulator previously attempted to sell Woori last year and in 2010, but failed to do so due to lack of investor interest.

Authorities will prefer Woori to be taken over by a Korean financial provider and industry observers wonder if maybe KB is the best fit. <Korea Times/Kim Jae-won>

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