Woori Financial takes over Aju Capital

By Lee Min-hyung

Woori Financial Group will acquire a 74-percent stake in Aju Capital valued at around 570 billion won ($52.77 million), in a move to enhance the group's non-banking business, the company said Friday.

The board of the financial holding firm decided to take over the stake from Well to Sea Investment, a local private equity firm, but Woori did not disclose the exact value of the deal.

The move is in line with Woori's group-wide efforts to diversify its portfolio and focus more on non-banking areas in order to reduce its heavy reliance on the banking sector. As of the end of June, Woori Bank accounted for 88 percent of Woori Financial's total net profit.

The deal will also allow Woori to acquire Aju Savings Bank, a 100-percent subsidiary of Aju Capital. Woori Financial is the only company which has not operated the capital leasing and savings bank businesses among the nation's five major financial holding firms.

Aju Capital's total assets reached 7.54 trillion won as of the end of June, falling far behind that of other major capital leasing firms ― such as KB Capital, Shinhan Capital and Hana Capital ― but Woori's acquisition of Aju Capital is considered essential if the lender wants to cut its reliance on its cash cow banking business and diversify its portfolio.

Woori Financial did not disclose the details of the timeline for the takeover, but it plans to finalize the process no later than the end of the year.

Woori's next target for acquisition is a securities firm. The company has repeatedly expressed its willingness to take over a securities company which is seen as a core business in the non-banking sector.

Expectations are the company will jump into the race if a mid-tier brokerage company is put up for sale, as the securities business can generate massive synergy with the banking sector.

Woori is also eyeing acquisitions of insurers at a time when other top-tier financial holding firms are operating life and non-life insurance business. In March, Woori also joined the competition for the acquisition of Prudential Life, but lost out to KB Financial Group.