Dear employees of KB Financial Group,

Honorable Chairman of the Board Kyung-Jae Lee and the Board Members, President Jung-Won Kang of KB Bank who displayed outstanding leadership for KB Financial Group, and distinguished guests, I'm greatly honored to be here as Chairman of KB Financial Group, and humbled by the grave responsibility to be the captain of a leading financial institution in Korea with proud history and tradition at this critical juncture.

Taking this opportunity, I would like to express my gratitude to our shareholders and customers for their steady support and trust for the KB Group. I would also like to appreciate the strong dedication of 27,000 employees who have endeavored for KB Financial Group, and would like to ask them to continue their united effort to build a promising future for the company.

Dear employees,

You are probably well aware of the fact that we are now, indeed, at a critical crossroads. Since the global financial crisis, the domestic financial industry has faced tougher competition and lower profits, bound by structural limitations.

In the process, the gap between financial institutions -- those who have steadily continued their efforts to streamline their organizations with restructuring, and those who have failed to do so -- has become wider and wider in terms of competitiveness and profitability.

Unfortunately, what I've seen in reports and learnt over the past weeks since being designated a nominee for the position of CEO indicates that KB Financial Group is showing symptoms of an obese patient .

It is burdened with an aged and high-cost labor force which is larger than that of competitors, and is exposed to potential risks from non-performing loans given the steadily growing risks in some industries. 

I asked my staff to present this worrisome status of affairs in the extraordinary general meeting of the Board of Directors held last week, and all employees of the group will soon be notified of the details. One can find the solution to a problem only by knowing the exact cause. Surgical intervention may be necessary in some cases if that is essential for recovery. To root out the causes for KB Financial Group's ailments, all employees need to draw on their wisdom and undertake strenuous efforts for the common goal.  

As you may know, General Motors, a leading US company for 100 years, collapsed last year. The reason was obvious: it failed to take actions and address its high-cost structure of operations, and neglected all the warning signs calling for critical surgical operations and reforms.  

To refrain from following in their footsteps, KB Financial Group must face the stark reality and challenging business environment. We need to cure the affected areas that weaken our competitive advantages Fundamental treatment is also required to improve underlying conditions.  

In this sense, we are now at the point where we must have a resolute determination to change ourselves. Even at this very moment, customers are quickly moving for higher returns and better services amid maturing markets and aging society. To meet their financial needs, companies must put customer interests first in every single decision they make and equip themselves with extensive competitiveness across all financial and capital markets with advanced insurance, pension, and asset management services, as well as creative banking products and services.  

Leading companies in Korea are advancing into the global market, making increasing contributions to national wealth.  

However, they work with foreign banks, not local banks, for the financial services they need while doing business overseas.  

Local banks were not even eligible for guarantee payment when Korea was awarded the contract for the nuclear power plant in the United Arab Emirates, not least because none of them had a global status. Instead, foreign banks enjoyed the hundreds of millions of dollars in fees. They are also taking away daily treasury management and FX services for overseas transactions of major local companies such as Samsung, LG, and SK.

Hyundai and Kia Motors make tens of billions of dollars in revenue a year, but the retail banking service and the profits from their business all go to foreign banks.  

Unfortunately, we can't hear the name KB Financial Group mentioned in any market around the world or see it standing by any leading local company from Korea. How can we imagine attaining the vision of leading the Asian financial market as a global financial leader, if we refuse to take drastic measures? I'm sure you should know better what choices and decisions we need to make and how much extra effort we must make here.  

Dear employees of KB Financial Group, During the global financial crisis, the domestic financial industry was blamed as well for its contributing role. But even at this moment, they are failing to upgrade and globalize themselves to a level expected by the public. As the largest financial group in Korea, KB should feel a grave responsibility for the current circumstances and must renew its resolve.

Fortunately, KB Financial Group has the largest retail banking base with 26 million customers in Korea and a strong network of 1,200 sales points nationwide. A wide brand awareness and the highest NCSI(National Customer Satisfaction Index) for 4 consecutive years are an encouraging message that the public and customers still trust KB. I have no doubt that KB Financial Group can continue to enhance its sales power and capabilities for customer service based on these strengths. In the mean time, KB Financial Group will faithfully uphold the "back to basics" principle in its operations.

I will now present 4 strategic directions KB Financial Group must assume to reclaim the status as a leading financial group in Korea and to make the leap forward to join the ranks of global banks.

First, I will maximize operation efficiency.  

The ailing conditions of KB Financial Group are well displayed by its cost-to-income ratio which increased from 42% in 2005 to 54% in 2009, indicating an aggravated financial condition. It is in stark contrast to that of Santander of Spain, a bank often mentioned as an example of global success, which rose from 54% to the current 42%, and also to some of the domestic banks that made significant improvement in their numbers.

It is a worrying and disgraceful portrait of where we are now. Taking the cost-to-income ratio as the most critical index we must work together to improve the current conditions. I'm urging you to face the cause and take action now to cure ourselves of inefficient operation that is holding us back. To that end, First, I will streamline the structure of the labor force for higher productivity.

Also, after going through some internal agreement process, I'll adopt measures to reduce selling and administrative expenses of all subsidiaries within the group until KB gets back into good shape. In addition, as a rather aggressive measure, I will do my best to increase operating revenue by developing innovative products and services and reinforcing sales power. They may include creating synergy effects with cross-selling between subsidiaries and developing convergence products and agencies to maximize efficiency of operations as a whole.  

In the same vein, I will also spare no effort to make our intangible assets more competitive. Employees will be able to upgrade their capabilities with increased opportunities for development and training at home and abroad, supported by the company efforts to lay the foundation for developing global human resources. I will take the lead to create a new corporate culture tailored to the strategic directions of the group,  and to inject vitality into the organization. Extra efforts will be made to enhance the brand image of 'KB,' one of the group's important strategic assets, as a leading bank. KB Financial Group also needs to reinforce its risk management system to match the global level, to maximize efficiency of operations. Failure to make preemptive responses to growing defaults, variable interest rates, and regulatory changes will mean a huge blow to the entire group even if it achieves a higher rate of operation efficiency.  

Therefore, I will ensure that the group has more sophisticated risk management system while integrating some redundant functions across the group. And at the same time, I would also like to ask you to pay special attention to operation risk management to prevent financial incidents resulting from moral hazard. The efforts for higher efficiency will turn KB Financial Group into a sound and resilient company that can match global financial institutions.

Second, I will lay the foundation for a sustainable growth by diversifying businesses.

The current business structure with heavy dependence on the banking business can have limitations in terms of sustainable growth and dealing with changes of customer and market demand. To expand its sustainable growth base and reinforce customer service capabilities in non-banking businesses, and to ultimately secure competitive advantages against advanced financial institutions in local and global markets, we need to move toward diversification at a proper level.  

Each subsidiary will be required to achieve self-sustaining growth in line with its capabilities and industry environments. However, to actively respond to changes in business environment, I will stay flexible in terms of potential merger and acquisition opportunities, so as not to block the pursuit of KB Financial Group to grow into a comprehensive financial institution. The decision should be based on the potential growth of the stockholders' value. By sector, I would like to urge the banking business to reinforce its competitive advantage in retail banking, while strengthening service capabilities at home and abroad for large companies with sound credit conditions and institutional investors, thereby supporting the entire group with a stable base for growth.  

The credit card business, a strong engine for profit, will be spun off from the bank to be utilized as a point for business diversification of the group, and will be nurtured into one of the leading companies in the industry.  

The securities business will be developed into a leading investment firm to contribute to generating synergy for the entire group by implementing self-sustaining growth strategies and seeking appropriate merger and acquisition opportunities.  

The life insurance business will expand its scope, moving beyond the label of "bankassurance-focused insurer."  

As for the asset management business, given its high growth potential and expected synergy effect with other subsidiaries, it will grow into a key strategic business of the group. Other subsidiaries including real estate trust, futures, investment, credit information, and data systems, will enjoy active support and synergy effects on the group level to reinforce their market power in each industry.  

I believe business diversification should be based on  pursuing maximum value for shareholders. The group will seek to build a basis for sustainable growth, not merely quantitative growth, by establishing an overarching sales strategy aimed at enhancing both the quality and quantity of financial services delivered to customers and upgrading their competitiveness.

Third, I will lead the group in satisfying the ever-changing needs of customers.

The efforts will also contribute to creating new profit sources. With the rapid development of communications technologies and trend of convergence, it is imperative to identify new services and meet customer needs to lay the groundwork for becoming a leading financial group In this regard, KB Financial Group has led the financial industry with advanced information and technology strategies, and especially for past three years, we have designed a new grand IT system to continue to preemptively respond to new trends including the mobile transaction business fueled by the emergence of smart phones.

I will make sure the group can stay ahead in offering differentiated and smart financial services to customers through strategic partnerships with telecommunication service providers. I will pay attention to green growth as well on the financial side. Building on the progress already achieved by the bank, I will do my best to enhance the group's corporate image as an environment-friendly and sustainable company, and to reinforce company capabilities in this promising sector so that KB Financial Group can secure a leading position.  

Given the increasing demand for microfinance service since the financial crisis, the group will positively review the feasibility as a way to diversify profit sources and facilitate the efforts to build a comprehensive financial service system.

In addition to smart finance, green finance, and micro finance, KB Financial Group will fulfill its social responsibilities by serving the needs of the market and customers.

Last but not least, KB Financial Group will take the lead in advancing the financial industry of Korea.

To that end, it will enhance its global competitiveness. To lead and achieve sustainable growth of the domestic financial industry which is dealing with saturated market conditions and whose competitiveness is not strong in the global market, the group needs to expand its business into the Asian financial market which has high growth potential and where we can enjoy competitive advantages. 

With the growing importance of the Asian financial market over the past few years, there has been increasingly fierce rivalry among advanced companies trying to gain an upper hand in the market. Leading global banks are aggressively entering emerging markets particularly in Asia, and those in China, India, Brazil, Russia, and other emerging countries are stepping up their efforts in consolidation and globalization.  

If KB Financial Group does not act now, we might find ourselves in a very serious situation in terms of our chances in the global competition. I will review and realign the group's existing global strategies as quickly as possible. In addition to expanding global sales networks, the group will dedicate itself to developing global human resources to drive the efforts.

Dear employees of KB Financial Group, 

By effectively implementing the four strategies mentioned, our group will in time emerge as a sound and resilient company with strong competitiveness at home and abroad, and as an undoubted leading financial group in Korea.

Dear employees of KB Financial Group,  

I am standing at this podium today with the same determination that Xiang Yu of the Chu State must have felt when he abandoned his ships and all provisions before going into battle with a "do-or-die" attitude.

Here is my promise to you: That I will commit myself to laying the cornerstone for advancing KB Financial Group and the Korean financial industry, with all my heart and all my experience that I have accumulated so far as a finance and business expert. All the past memories full of challenges and hardships will be remembered in history as precious efforts to take the Korean financial industry to the next level.  

Now let's start our journey together to creating a better tomorrow for our shareholders, customers, KB employees and the domestic financial industry, by building a whole new KB Financial Group.

Let's vitalize our organization with renewed confidence in ourselves. Join me in turning KB Financial Group into a great workplace and a partner in your life. We can build our own success story at KB, encouraging each other with a can-do spirit. Let us build a new corporate culture of entrepreneurship, of learning from failures and never giving up.

Dear employees, 

My life has always been guided by the motto of "putting public good before personal interest." I promise you that I will strive to be a leader with an open mind, leading by example and driving innovation and changes, and I will be there with you on the historic journey to developing this company into a global financial group.

Dear employees of KB Financial Group, 

We are pioneers who will open a new chapter in the history of KB Financial Group and the Korean financial industry, with all our passion and affection for this company. Let us build it together.

Thank you.