KB Financial's board OKs nomination of new head

KB Financial Group Inc., South Korea's No. 1 financial services company, said Thursday its board of directors approved the nomination of a close aide to President Lee Myung-bak as its new chairman.

The green light came two days after the group's inhouse committee picked Euh Yoon-dae, 65, for the group's chairman. Euh currently heads a presidential council on enhancing the country's national image.

At an emergency meeting, the board approved the appointment of Euh and decided to put the matter to a vote by shareholders slated to meet on July 13, the group said.

Market watchers say his nomination would pave the way for the group's push to grow larger through takeovers.

Known as a staunch supporter of a "megabank," Euh said takeovers are needed to nurture KB Financial Group as a large financial firm.

After being tapped to head the group, Euh said he has an interest in buying Woori Bank rather than Korea Exchange Bank, controlled by U.S. buyout fund Lone Star Funds. He also expressed his interest in taking over the state-run Korea Development Bank.

Woori Bank is the flagship unit of Woori Finance Holdings Co., which the government is seeking to privatize.

Some market watchers are casting doubt about the creation of a megabank, saying that the possible deal may raise fears about increased government influence over a private company's management.

KB Financial shares were trading 0.2 percent lower at 49,650 won after taking a hit from Euh's remarks for two straight sessions.//Yonhap

Park Sae-jin swatchsjp@ajunews.com