Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Hana, Woori expected to focus on M&As in 2nd half
The logo of Hana Financial Group is seen at the entrance of the group's headquarters in central Seoul in this photo taken on May 26. Newsis
By Yi Whan-woo
Big 4 banking groups seek strategic overhaul in 2nd half
By Yi Whan-woo
Hana Financial Group and Woori Financial Group are anticipated to accelerate their respective bids to acquire non-banking businesses in the second half of the year as they both look to diversify their portfolios, according to industry sources, Tuesday.
Hana said it is working to finalize its schedule by next month for its strategic meeting for the latter half of the year. Woori plans to hold its meeting on July 14.
The two have been eyeing M&As in order to enhance their competitiveness in the finance industry against two bigger rivals ― KB and Shinhan ― and fintech companies, which have been emerging rapidly in the industry amid the digital transformation.
Regarding Hana, Chairman Ham Young-joo has been repeatedly addressing the need for M&As in five areas: life insurance, non-life insurance, credit card, wealth management and car financing, since taking office in March 2022.
Woori established a foothold in the venture capital business early this year by acquiring a majority stake in Daol Investment. Furthermore, under the leadership of Chairman Yim Jong-yong who took office in March, it is interested in buying a securities firm.
The logo of Woori Financial Group and its flagship affiliate Woori Bank are seen outside the group's headquarters in this undated file photo. Yonhap
Hana, the country's third-largest banking group with 14 affiliates, already has business arms in the five aforementioned areas.
However, they have only small presences in the market compared to the group's flagship affiliate, Hana Bank, making it tough for the company to catch up with KB and Shinhan in terms of yearly net earnings.
Hana reported a record net profit of 3.62 trillion won last year, but it still lags behind KB and Shinhan, which each reported net profits of more than 4 trillion won for the second consecutive year since 2021.
Under the circumstances, market observers speculate that Hana may cover issues concerning companies that are up for sale in life insurance, non-life insurance, credit card, wealth management and vehicle financing, during its upcoming strategic meeting.
The companies include KDB Life Insurance, ABL Life, Tong Yang Life Insurance, Lotte Insurance and Lotte Card.
Woori, the smallest of the four major banking groups, relies on 90 percent of its net earnings coming from its banking arm. Accordingly, it has been pushing to diversify its business after it was fully privatized in 2022, ending 23 years of state-led ownership.
It is especially interested in brokerage houses because it is the only financial group without such a business.
Market observers speculate that Woori wants to acquire a medium-sized securities firm, with potential candidates such as Yuanta Securities, SK Securities, Kyobo Securities and eBEST Investment & Securities all being up for sale.
Meanwhile, KB is scheduled to hold its strategic meeting for the second half on July 14. Shinhan is going to hold a five-day-long forum on corporate culture beginning on July 3, with strategy-related issues for the remainder of 2023 being among the topics to be discussed.
KB is anticipated to focus on new growth engines, innovation in banking platforms and resilience.
Shinhan Financial Group is expected to check on its major tasks, such as digitization and risk management, which were addressed by Jin Ok-dong after he took office as group chairman in March.