Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Woori set to expand non-banking portfolio through Daol acquisition
Woori Financial Group headquarters in Seoul / Yonhap
By Lee Min-hyung
By Lee Min-hyung
Woori Financial Group is set to expand its non-banking portfolio through the possible acquisition of Daol Investment.
The deal is valued at more than 200 billion won ($158.7 million) though nothing specific has been confirmed yet. Woori and Daol have yet to sign any legally binding documents but both sides are expected to discuss further details soon ― such as its sales price.
Under the deal, Daol Investment will sell a 52 percent stake for roughly over 200 billion won. Daol Investment is a first-generation venture capital firm established in 1981, having invested in mega-hit startups including Viva Republica ― the operator of Toss ― and Woowa Brothers, a food delivery app owner.
If Woori succeeds in taking over the investment firm, it will be able to tighten its non-banking portfolio. The financial holding firm is one of Korea's four major banking groups, but its lack of full-fledged non-banking businesses has long been cited as its biggest weakness compared with its competitors.
Woori operates diverse financial businesses but lacks key non-banking businesses such as securities and insurance firms. Consequently, the group has for years underscored the necessity of acquiring existing players in these areas as well as building more stable revenue structures.
“We need to strengthen our revenue streams by improving the market status of our key affiliates, particularly during this period of market uncertainties,” Woori Financial Group Chairman Son Tae-seung said in his New Year speech. “Woori will speed up its penetration into the non-banking sector this year after having put off the plan last year due to market instability.”
The remark reflects Woori's prolonged bid to take over a mid-tier securities firm, as the brokerage business is a lucrative non-banking source of revenue for the group's major competitors. But Woori was not aggressive in its drive in 2022 when the stock market took an abrupt turn for the worse and uncertainties surrounding the macroeconomic environment here and abroad reached their peak due to the U.S. Federal Reserve's ultra-hawkish turn.
It remains to be seen whether Woori will be able to finalize the acquisition of the Daol affiliate, but the financial holding firm is known to be the strongest candidate. Both sides have only said they are “in positive talks” over the deal, but have not signed any letter of intent, nor has Woori been picked as a preferred bidder for the deal.