Yang Jong-hee, the vice chairman and candidate for the next chairman of KB Financial Group, a prominent South Korean banking conglomerate, arrives at the group's headquarters in Seoul on Monday. (Yonhap)

Yang Jong-hee, the final candidate for the chairman position and current vice chairman of KB Financial Group, on Monday vowed to prioritize revitalizing the group's money-losing Indonesian subsidiary.

He picked Bank KB Bukopin as one of the three critical tasks he would resolve if he takes the top seat of the Korean banking conglomerate in November.

"Even within our domestic market, the process of acquiring troubled companies and restoring them requires time. When undertaking similar process overseas, there are additional procedural complexities," he said to local reporters during his Monday morning commute to KB Financial Group's headquarters in Yeouido, Seoul.

The Indonesian bank has witnessed a continuous increase in its accumulated net losses, rising from 43.4 billion won ($32.6 million) in 2020 to 272.5 billion won in 2021 and further surging to a significant 802.1 billion won last year.

The group had previously set a target for the Indonesian unit to become profitable by 2025. If Yang is appointed as chairman as planned, this would mean that he will need to oversee the revitalization of the Indonesian unit within his three-year term.

Yang was officially named the top candidate for the forthcoming chairman role on Friday afternoon, with his formal appointment set to occur during the group's shareholders meeting scheduled for Nov. 20.

Addressing the Indonesian unit's challenges, he also said that the group is currently actively enhancing Bank KB Bukopin’s corporate governance structure to make sure that the unit can focus on taking cost-saving measures.

"Time will be needed to deploy new personnel to our branches and implement IT systems and associated infrastructure,” he added.

Founded in 1970, Bank KB Bukopin currently operates 412 retail branches across Indonesia, primarily serving consumers and small enterprises. KB Kookmin Bank pledged to bring its risk management and digital banking expertise as the majority shareholder when it acquired the Indonesian bank in 2018.

In addition to address the challenges faced by the Indonesian unit, he reaffirmed his commitment to tackling issues that may arise from changes in leadership and increased delinquency rates.

Amid recent revelations that eroded clients' trust in the group, Yang bowed and offered his apologies.

In August, South Korean financial authorities found that 10 out of 17 employees within KB Kookmin Bank's brokerage services division engaged in unfair trading practices. These employees purchased stocks ahead of public disclosures by leveraging information related to upcoming listings.

"Financial institutions are built on trust, and I am sincerely regretful and sorry about the unfortunate incidents that have occurred," he said.

He also emphasized his commitment to promoting strict adherence to rules through active investment in the digital sector.

When further questioned about the group's digital strategy, he highlighted the group's offline channels as a distinctive asset.

"KB possesses a valuable asset in face-to-face channels compared to companies like Kakao (Bank). I am committed to maximizing the synergy between our in-person and online channels," he said.

Addressing concerns about being the first internal candidate without experience as a KB Kookmin Bank CEO, he said it wouldn't be a problem.

"After being appointed as vice chairman, I gained insights into the entire group, including the bank. Furthermore, I have worked at the bank for approximately 20 years," he added.

When asked about his view on the mergers and acquisitions plan aimed at strengthening the group's non-banking sector, Yang took a cautious stance.

"KB already has a well-rounded portfolio," he said. "M&As should not be primary objectives in themselves. We will evaluate them based on their potential to enhance KB's corporate value, " he said.

Regarding the future of the vice chairman position, he said, "The vice chairman position was established to train the next chairman, so I will have to discuss its continuation with the board."

The vice chairman position was instituted in 2020 as part of a succession planning initiative under the leadership of KB Financial Group's current chairman, Yoon Jong-kyoo.