By Choi Kyong-ae
The government will make its fifth bid to sell a controlling stake in Woori Bank as it strives to recover public funds injected into the bank and privatize it, the Financial Services Commission (FSC) said Monday.
"We will draw up a new plan by next month to sell a majority stake in Woori Bank after conducting a feasibility study this month. But we have yet to make a detailed plan for the stake sale," an FSC official in charge of the Woori deal said.
Instead of delivering a controlling stake to a single investor, the financial authorities are reportedly considering selling a small portion of Woori stocks to multiple investors.
But analysts said there may be another failure to sell the Woori stake because the banking industry is becoming less attractive to draw investors due to deteriorating business environments.
"Investors, international or domestic, will find few reasons to invest in Woori Bank. Declining rates are squeezing net interest margins further and soaring household loans may deal a blow to banks if borrowers fail to repay the debts on rate increases," Hana Daetwoo Securities analyst Han Jeong-tae said.
If the government places Woori stocks in the market at extremely discounted prices, investors, particularly Chinese ones, may show interest in bargain hunting. But a fire sale could draw criticism because the government bailed out the bank following the 1997-98 financial crisis, Han said.
"It's taxpayers' money, after all."
Kim In, an analyst at Eugene Investment & Securities, said companies have no reasons to invest in a small portion of Woori stocks. An acquisition by a new owner will help change the landscape of a bank and buoy the stock prices.
Monday, Woori Bank has fallen 3.3 percent this year to 9,670 won. The broader Korea Composite Stock Price Index has risen 7.3 percent to 2,055.16.
Woori Finance was established in 2001 after the government bailed out five financial firms following the crisis. The state-run Korea Deposit Insurance Corp. (KDIC) has held a majority Woori stake while trying to sell it to help retrieve public funds since 2011.
In the previous attempt last year, the Public Fund Oversight Committee, an FSC unit which manages the Woori deal, put a 56.97 percent stake up for sale ― 30 percent to one single bidder with the managerial rights to the bank and the remaining 26.97 percent to institutional and individual investors.
Currently, the KDIC owns a 51.04 percent stake in Woori Bank which absorbed Woori Finance Holdings in November last year. Last year, retail investors bought a 5.93 percent stake in the country's third-biggest bank by assets.
The government will make its fifth bid to sell a controlling stake in Woori Bank as it strives to recover public funds injected into the bank and privatize it, the Financial Services Commission (FSC) said Monday.
"We will draw up a new plan by next month to sell a majority stake in Woori Bank after conducting a feasibility study this month. But we have yet to make a detailed plan for the stake sale," an FSC official in charge of the Woori deal said.
Instead of delivering a controlling stake to a single investor, the financial authorities are reportedly considering selling a small portion of Woori stocks to multiple investors.
But analysts said there may be another failure to sell the Woori stake because the banking industry is becoming less attractive to draw investors due to deteriorating business environments.
"Investors, international or domestic, will find few reasons to invest in Woori Bank. Declining rates are squeezing net interest margins further and soaring household loans may deal a blow to banks if borrowers fail to repay the debts on rate increases," Hana Daetwoo Securities analyst Han Jeong-tae said.
If the government places Woori stocks in the market at extremely discounted prices, investors, particularly Chinese ones, may show interest in bargain hunting. But a fire sale could draw criticism because the government bailed out the bank following the 1997-98 financial crisis, Han said.
"It's taxpayers' money, after all."
Kim In, an analyst at Eugene Investment & Securities, said companies have no reasons to invest in a small portion of Woori stocks. An acquisition by a new owner will help change the landscape of a bank and buoy the stock prices.
Monday, Woori Bank has fallen 3.3 percent this year to 9,670 won. The broader Korea Composite Stock Price Index has risen 7.3 percent to 2,055.16.
Woori Finance was established in 2001 after the government bailed out five financial firms following the crisis. The state-run Korea Deposit Insurance Corp. (KDIC) has held a majority Woori stake while trying to sell it to help retrieve public funds since 2011.
In the previous attempt last year, the Public Fund Oversight Committee, an FSC unit which manages the Woori deal, put a 56.97 percent stake up for sale ― 30 percent to one single bidder with the managerial rights to the bank and the remaining 26.97 percent to institutional and individual investors.
Currently, the KDIC owns a 51.04 percent stake in Woori Bank which absorbed Woori Finance Holdings in November last year. Last year, retail investors bought a 5.93 percent stake in the country's third-biggest bank by assets.
