(2nd LD) Aide to S. Korean president tapped to head KB Financial

(ATTN: UPDATES with additional remarks by the chairman-nominee in paras 9-11)
SEOUL, June 15 (Yonhap) -- KB Financial Group Inc., South Korea's No. 1 financial
services company, nominated a close aide to President Lee Myung-bak as its new
chairman on Tuesday, paving the way for its push to grow larger through
takeovers.
The group said an inhouse committee picked Euh Yoon-dae, 65, for the group's
chairman. Euh, one of President Lee Myung-bak's confidants, currently heads a
presidential council on enhancing the country's national image.
Three candidates -- Euh; Lee Chol-hwi, CEO of state-run debt clearer Korea Asset
Management Corp.; and Lee Hwa-eon, former head of Daegu Bank -- had vied for the
group's top post.
The recommendation is subject to approval by the board on Thursday and an
emergency shareholders' meeting next month.
Before being picked to head the presidential committee, Euh served as president
of Korea University, one of South Korea's prestigious universities, between 2003
and 2006. He also was a former monetary policy member at the Bank of Korea in the
early 1990s.
After receiving the nomination, Euh said local financial firms should accelerate
their push for growing bigger through mergers and acquisitions amid intense
discussion worldwide over stricter regulations on bank growth.
"South Korea needs to nurture competitive financial firms so as to become one of
the world's top 50 players," he said.
Euh has expressed his support for nurturing KB Financial Group as a larger
financial firm through takeovers amid market talks that he is in favor of a
merger with Woori Finance.
He, however, said he was not interested in building a mere "mega bank."
"It is important to increase the bank's profits by rationalizing its management,"
Euh told reporters.
"(Building) a mega bank is not an immediate issue of interest. What is important
is how helpful it (M&A) will be in diversifying the bank's portfolio," he added.
The nomination came about six months after Kang Chung-won, president of the
group's bank unit, offered to step down from the group's chairmanship amid
intense scrutiny by the financial regulator into alleged wrongdoing by the
group's outside directors.
In September 2009, former chairman Hwang Young-key resigned after the financial
watchdog punished him for inflicting investment losses on Woori Bank while
serving as the president of the state bank.
The government has been under criticism for exerting influence on internal
affairs of a private company by "forcing" the former chairman-nominee Kang out of
his post.
The recommendation comes at a critical time for KB Financial as the local bank
sector is set to face a wave of takeovers later this year. The government is
seeking to privatize Woori Finance Holdings Co. and Lone Star Funds has resumed
the process of selling Korea Exchange Bank.
sooyeon@yna.co.kr
(END)

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