Vice Chairman Baek Jong-il of JB Financial Group stepped down from the vice chair post and moved into an advisory role just nine days into his new term this year, prompting various interpretations.
According to the financial industry on the 15th, JB Financial Group decided not to appoint a successor to former Vice Chairman Baek. JB Financial Group abolished the vice chairman system in 2023 under Lee Bok-hyun's tenure as head of the Financial Supervisory Service, then revived it after two years, only to scrap it again in less than 10 days.
A JB Financial official said, "Even before being appointed, former Vice Chairman Baek felt burdened by talk of being the 'chairman's right-hand' and the 'No. 2 in the group,' and declined the vice chair position. After discussions, it was decided that he would step down from the vice chair and, as an adviser, handle external affairs."
In the financial sector, the substantive reason for the resignation is seen as pressure from the financial authorities, which have taken issue with financial holding companies' governance. The eight major financial holding companies—KB, Shinhan, Hana, Woori, NH NongHyup, iM, BNK, and including JB Financial—abolished the vice chair posts en masse at the end of 2023. That came right after the former Financial Supervisory Service (FSS) chief pointed out that "the vice chairman system at financial holding companies is run in a closed manner, blocking the elevation of newcomers and external appointments."
The Lee Jae-myung administration is also continuing to question governance, including by reviewing how governance is operated at the eight major financial holding companies. The financial authorities view the current management as forming boards with friendly figures to entrench themselves for the long term. A financial industry official said, "Although it happened under the previous administration, reviving the vice chair post probably did not sit well with the financial authorities."
There is also an opinion that former Vice Chairman Baek's "Cambodia risk" influenced the resignation. From 2021 to 2022, former Vice Chairman Baek served as president of Phnom Penh Commercial Bank (PPCB), a local Cambodian subsidiary under JB Financial.
During the period when former Vice Chairman Baek was president, Phnom Penh Commercial Bank became embroiled in controversy after it emerged that roughly 100 billion won in deposits were transacted with Prince Group, which had faced various crime allegations, including human trafficking. JB Financial said, "Former Vice Chairman Baek's resignation is unrelated to the Cambodia matter."