KEB Hana Bank, the core affiliate of the banking group, said Thursday that it has appointed Ji Sung-kyoo, vice president of global business, as its new CEO, replacing Ham Young-joo, who had served two consecutive terms.

The move indicated a thaw in tension between the bank and the financial watchdog over the reappointment of its embattled chief.

The commercial bank had stood at odds with the Financial Supervisory Service concerning the reappointment of Ham for the third time. While the FSS had expressed disapproval over Ham, currently indicted and under trial for alleged involvement in a hiring scandal, the bank had stressed his managerial achievements throughout previous terms.

“It is our job as financial regulator to demand that (KEB Hana Bank) double check on the potential legal risks,” FSS Gov. Yoon Suk-heun told reporters Wednesday.

The governor’s comment came just a day after Kim Dong-sung, deputy governor in charge of bank supervision, met with the bank’s nonexecutive directors in an apparent bid to pressure the bank to exclude Ham from leadership appointment.

However, Ham pulled out of the race at the eleventh hour, leaving Ji as the sole candidate for the post.

Ji joined the bank in 1991 after graduating from Yonsei University. He has served in the departments for global strategies and management, and also led the Chinese branch. Ji will be formally named to be post after a shareholders meeting on March 21.

The feud between the bank and regulator traces back to early last year, when newly appointed FSS Gov. Choe Heung-sik was forced to step down amid disputes that he was involved in hiring irregularities during his years as Hana Financial Holding president.

The sudden scandal involving Choe and his consequent resignation triggered speculation that Hana Financial Group Chairman Kim Jung-tai had leaked information on the matter as Choe had sought to deter his appointment to a third term.

By Bae Hyun-jung (tellme@heraldcorp.com)