KB leader stress performance

Yoon Jong-kyoo

KB Financial Group Chairman Yoon Jong-kyoo called for the need to foster a performance-oriented culture at a time when management and the labor group are locked in a fierce dispute over merit-based pay.

Yoon spoke to employees during an event commemorating the eighth anniversary of the country’s top financial group on Thursday.

“We need to install a culture in which treatment is based on one’s competency and achievements,” Yoon said. “When high-caliber talent receives fair rewards it can bring healthy competition and serve as a great motivation.”

Last week, the labor union launched a strike to protest the government’s move to expand a performance-based salary program to include junior-level employees.

Of the four major banks - KB Kookmin, Shinhan, Woori and KEB Hana - KB has had the highest turnout rate as some 1,500 workers participated. Hana and Woori had some 500 employees participate while Shinhan saw less than 50 attending the Sept. 23 walkout at the World Cup Stadium.

Analysts say that Yoon’s remarks are intended to reaffirm management intention to move forward with its merit-based salary initiative.

The chairman also emphasized a strong bond within the group as KB, the second largest financial group by assets, is on track to acquire Hyundai Securities.

“We need to act as a team,” he said. “There is a growing need for cooperation among corporate investment business, wealth management and joint branches,” Yoon said. “We need to build trust not only with existing affiliates but also a new member, Hyundai Securities.”

The M&A deal, due to be completed by the end of this year, will give birth to the third-largest securities firm, with assets of 3.9 trillion won ($3.54 billion).

The new company is aimed at becoming a so-called universal banking model that provides a comprehensive set of financial products and services.

The targeted areas include wealth management and corporate and investment banking, lines of business where financiers in Korea have struggled to gain momentum.

Instead of combining Hyundai Securities with KB Investment & Securities, the financial group decided to turn Hyundai into a wholly-owned affiliate.

Yoon also said that he will extend the exchange of personnel resources across affiliates.

But the road toward full-fledged cooperation between KB and Hyundai appears rough since the Hyundai Securities union has clashed with KB management.

Just two years ago, the group suffered a severe internal conflict due to a computer-system overhaul. The dispute resulted in the resignation of then-KB Financial Group Chairman Lim Yong-rok and KB Kookmin Bank President Lee Kun-ho.

The two fought over switching the bank’s main computer system. Yoon took the helm after the trouble as both chairman of the financial group and head of KB Kookmin Bank.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]