Sohn vows to expand business through M&As

Woori Financial Group Chairman and Woori Bank CEO Sohn Tae-seung speaks at a shareholders’ meeting at the bank’s headquarters in Seoul, Dec. 28. / Courtesy of Woori Bank

By Lee Kyung-min

• Published Dec 28, 2018 4:59 PM KST
• Updated Dec 28, 2018 7:20 PM KST

Woori to turn into holding company on Jan. 11

By Lee Kyung-min

Woori Financial Group Chairman Sohn Tae-seung said Friday that he would push for mergers and acquisitions (M&As) to compete with other financial groups.

His remarks came after Woori Bank shareholders approved a plan to turn the lender into a financial holding company, Friday. The decision came four years after it had been disbanded in November 2014.

“It took four years for Woori Bank, whose status changed to a bank from a holding company due to the previous government’s push toward privatization, to obtain approval from the government to return to the earlier state,” Sohn, who doubles as Woori Bank CEO, said at the shareholders’ meeting.

“Upon returning to a holding company, the business portfolio that had largely prioritized banks will be diversified to create new financial services. This will serve as a great opportunity for us to leap forward, maximizing the corporate potential through M&As.”

Under the approval, Woori will turn into a holding company on Jan. 11.

The bank’s current stocks will be delisted upon listing of the holding company on the Korea Exchange (KRX), Feb. 13.

The approval came over a month after the Financial Services Commission (FSC) gave a green light to Woori Bank’s governance proposal to transform itself into a holding company, Nov. 7, about four months after it submitted the proposal in July.

The holding company is expected to restructure the group organization to reorient the current business portfolio by increasing capital held by non-bank subsidiaries.

Up to six subsidiaries will be created to handle asset management, securities, insurance and real estate investment trust (REIT), a more sophisticated type of financial service.

The success of the plan will be determined by a revised business portfolio that must be designed to ensure stable operation, a task that requires a clear vision, tight and thorough management as well as apt corporate streamlining by 2020. Then he will no longer be able to hold both positions, meaning his management control in the firm may decline.

Meanwhile, following the approval, Korea will have five holding companies again, with competition expected to become much fiercer to secure the top.

In September, KB Financial Group with 477.7 trillion won ($427 million) remains at the top for the second consecutive year followed by Shinhan Financial Group with 457.7 trillion won.

In June, Hana Financial Group had 373 trillion won, while NongHyup Financial Group had 404 trillion won.

Woori Financial Group had 376.3 trillion won in September.

The holding company will become fully privatized if Korea Deposit Insurance Corp. (KDIC) sells off the bank’s 18 percent stake.