Woori Bank Seeks Privatization This Year
By Kim Jae-won
Staff Reporter
Woori Bank is facing a big change as the government plans to privatize the state-run lender this year. Still, the bank is eager to continue its 111-year history under the leadership of chief executive Lee Chong-hwi.
Woori surprised investors, customers, and even employees of the lender with incredible gains last year. It marked a net profit of 953.8 billion won in 2009, more than three times that of the previous year, when it reached 234.0 billion won.
The strong performance was due to improvement both in profitability and financial soundness. Its Return on Assets (ROA) ration, a barometer of a bank's profitability, reached 0.41 percent, up 0.3 percent from the previous year.
Woori hopes to maintain this trend with its 2010 motto, "Jump With Strong Growth." It set its target growth rate at 7 percent. The lender also hopes to make sustainable growth with balanced development not only in banking, but also in its other business areas, such as credit cards, pension and foreign exchange.
But certainly, the biggest change awaiting the state-run lender is privatization. The government sold 7 percent of its stake in Woori Financial Group, the parent firm of the group, last year. Regulators also pointed out that Woori's privatization is one of the main objectives for the year.
Chin Dong-soo, commissioner of the Financial Services Commission, said the privatization of Woori Financial will be completed this year, in an interview with a local economic daily.
Woori is focusing on maximizing its value to keep its identity and continue to lead the industry amid the privatization process.
"Our goal is to maximize our company value through privatization," said Lee Chong-hwi, the lender's CEO, in a New Year's announcement earlier this year.
"We should show our ability through financial indicators such as profitability, liquidity, and productivity."
Overseas Outreach
Woori vows to expand its overseas market in 2010. So far, the lender has a total of 50 overseas offices in 15 countries worldwide.
Last year, it opened three branches in China, and offices in Indonesia, the United Arab Emirates, Malaysia, and Brazil.
The bank also plans to add a new office in Indonesia in the first half of the year, and open two branches in China in the second half.
The strategy for the overseas market is advancing. It has focused on Korean companies and individuals in the area, but is trying to reach out to local counterparts as well.
The key globalization strategy of Woori Bank is to employ a customized approach for each market in order to establish stable profit models.
The lender said profitability and stability will be the top priorities when expanding its overseas businesses and that its main goal is to gain a strong base for raising capital by securing new customer deposits and opening new credit lines.
Social Responsibility
Woori does not sacrifice its social responsibility for profit. Woori Smile Microcredit Bank was set up last December, and has provided 171 million won in loans to 27 beneficiaries so far. The bank plans to open branches in Gwangju and Masan in South Gyeongsang Province next month and to expand microcredit services through nationwide channels.