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Thu, February 3, 2022 | 04:43
Companies
Woori seeks to boost non-banking via Lotte Card acquisition
Posted : 2019-10-03 17:22
Updated : 2019-10-03 18:04
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Woori Financial Group Chairman Sohn Tae-seung
Woori Financial Group Chairman Sohn Tae-seung
By Lee Kyung-min

Woori Financial Group is expected to boost its credit card operations after acquiring Lotte Card in a consortium with MBK Partners, according to industry officials, Thursday.

The Financial Services Commission said the consortium was eligible to push forward with the deal, allowing MBK Partners to hold a 60 percent stake in Lotte Card and Woori Bank 20 percent.

With the possibility of Woori Bank securing a controlling stake in Lotte after buying shares from the private equity fund, this is a step closer to achieving the corporate initiative to strengthen its non-banking business outlined by group Chairman Sohn Tae-seung last year.

He said at the bank's shareholders' meeting in December that he would push for mergers and acquisitions as part of efforts to better compete with four other financial groups.

The aggressive push was to boost the performance after Woori Bank returned to its holding company status in January, a mission accomplished under his leadership about four years after it abandoned it.

To land more customers, Woori is expected to intensify sales promotions at its bank branches to boost Lotte Card subscriptions, while users of both cards may be allowed to use mileage and points interchangeably at partner stores of both firms.

"While the merger will help boost corporate profit, nothing concrete has been discussed to push forward with the plan at this point," a Woori official said.

The much-attainable merger between Woori Card and Lotte Card is unnerving the remaining six card issuers as it would mean a major shakeup in an industry long dominated by the big four ― Shinhan, Samsung, KB Kookmin and Hyundai.

A united Woori and Lotte, the sixth- and fifth-largest industry players, respectively, each with about 9 percent of the market, will closely trail Shinhan, the industry leader with over 22 percent.

Samsung and KB Kookmin have 18 percent and 17.3 percent, respectively. Hyundai has 15.6 percent.

Much synergy is expected, given the two card issuers do not have overlapping customer bases.

Woori has a strong base of bank customers, while Lotte is backed by a corporate market base as do Hyundai and Samsung.

Hyundai's major customers are drivers whose auto financing is paid with the card, while Samsung and Hyundai rely considerably on the groups' subsidiaries for customers.

Lotte offers discounts and benefits that can be used at its department stores, retail chains and duty free shops.


Emaillkm@koreatimes.co.kr Article ListMore articles by this reporter



 
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