New KB Financial Chairman slams company inefficiency

Vows to bring group back into shape as cost-to-income ratio rose to 54% last year.

KB Financial Group Inc. Chairman Euh Yoon Dae said South Korea’s largest financial-services company has too many employees and inefficient management, and repeated a pledge to cut costs and introduce new services.

“KB is suffering from an excessive workforce and rising wages, while bad-loan risks increase,” Euh said in prepared remarks for his inaugural speech to shareholders in Seoul on Tuesday. “It’s like a patient suffering from obesity. The company needs a fundamental change and it’s time to treat the diseases hurting its competitiveness.”

Euh, who begins his three-year term as chairman today, aims to boost KB Financial’s stock value by at least 30 percent as he cuts costs, shifts workers from the head office in Seoul to branches and increases fee income with services including mobile banking. He takes the post 10 months after Hwang Young Key resigned on Sept. 29 under government pressure to take responsibility for investment losses at former employer, Woori Finance Holdings Co.

View the full story in Business Week.