With Kbank CEO Choi Woo-hyung's term set to expire on the 31st of this month, there is strong sentiment inside Kbank that Choi will stay on for another term. Some also say stable leadership is needed as Kbank is preparing for an initial public offering (IPO) next year.
According to the financial sector on the 18th, Kbank convened its Executive Candidate Recommendation Committee (nominating committee) in September and is proceeding with the process to appoint the next CEO. Even though Choi's term is about to end, the nominating committee has not taken any position on selecting the next CEO.
This contrasts with when Choi was appointed in December 2023 to succeed former CEO Seo Ho-sung. At the time, the nominating committee said it selected Choi as the final candidate about three weeks before Seo's term expired. Choi then took office as CEO on Dec. 29 of the same year through an extraordinary shareholders meeting at Kbank.
Kbank filed a preliminary listing review with the Korea Exchange (KRX) in November for a main board listing. This is Kbank's third attempt at an IPO, and under its contract with financial investors (FI), it must complete the listing by July next year. If the listing fails again, FI could exercise a drag-along claim or a put option for early redemption, potentially shaking the entire corporations.
Kbank posted a net profit of 128.1 billion won last year, a sharp increase from the previous year (12.8 billion won). Its cumulative net profit for the third quarter this year was 103.4 billion won, maintaining the 100 billion won range for the second consecutive year.
A risk factor is its high reliance on Upbit. Kbank's share of Upbit deposits fell from 53% at the end of 2021 to about 16% now, but Kbank still paid 58.9 billion won in interest expense to Upbit in the first half of this year alone. That is about 68% of first-half operating profit (85.4 billion won). Looking only at the first quarter, operating profit was 15.6 billion won, while interest expense to Upbit was more than double that at 31.7 billion won.
Another potential headwind for Kbank is that Dunamu, which operates Upbit, is in the process of merging with NAVER. The real-name account partnership between Dunamu and Kbank runs until October next year, but once the merger between NAVER and Dunamu is completed, the real-name account partnership could end.
A financial industry official said, "After the merger, Dunamu could build its own deposit and withdrawal network through the Naver Pay system, or switch its partner bank to a commercial bank closely tied to Naver."