Woori Financial Group to extend $59 bil. to support AI, bio industries

Woori Financial Group Chairman Yim Jong-yong speaks during a press conference at the bank headquarters in Seoul, Monday. Yonhap

Woori Financial Group plans to invest 80 trillion won ($59 billion) over the next five years to expand lending for artificial intelligence (AI) and other high-tech ventures, innovative small businesses and low-income and low-credit retail borrowers, the group said Monday.

This is part of the group's Future Co-growth Initiative. The largest private-sector financial investment seeks to prioritize long-term, sustainable investment, moving away from household mortgage lending, which has long been criticized as the "easiest" way of generating revenue.

Woori is the first private-sector investor to commit 10 trillion won for the Lee Jae Myung administration-led 150 trillion won National Growth Fund. Woori's contribution constitutes 13 percent of the 75 trillion won to be funded by the private sector.

The financial group also plans to spend 1 trillion won in venture capital through its investment subsidiary, supporting budding high-tech startups from the launch of their business through to their initial public offering (IPO).

It plans to lower borrowing costs for 550,000 people, including small business owners and low-credit borrowers. It has also set up an anti-voice phishing department to better protect consumers.

“Our goal and vision outlined today is not only for the group, but for the country’s financial system,” Woori Financial Group Chairman Yim Jong-yong said during a press conference at the bank's headquarters in Seoul.

“Woori Financial has played a key role in the modernization of Korea over the past 126 years and will continue to take the lead in building a future-oriented financial system, contributing to the country’s economic recovery and long-term growth," he said.

Woori will spend 73 trillion won on what it has termed “productive financing” and 7 trillion won on “inclusive finance.”

The core objective of the productive financing drive is reorienting capital to foster industrial innovation, technology ventures and advancing national strategic growth priorities.

This drive will push the group’s corporate loan growth to 10 percent, up from the current 4 percent. The share of corporate loans in the group’s lending portfolio will be raised in turn to 60 percent, up from 50 percent.

Woori will allocate 16 trillion worth of loans to assist high-potential tech firms based in urban areas away from Seoul, in an effort to foster balanced national development.

The group plans to significantly expand its inclusive finance program. The number of low-interest rate products for vulnerable borrowers will be increased. Its small business support centers nationwide will also be expanded.

The group is also creating a new consumer protection department under Yim's direct supervision.

Woori also plans to maintain its Common Equity Tier 1 (CET1) ratio at 12.5 percent by this year. The ratio measures a financial institution's highest-quality capital, or core equity, relative to its risk-weighted assets.

The group also plans to implement a major AI-driven transformation of its internal management systems.

Woori is using AI when assessing and granting corporate lending, mostly involving document processing, credit screening, data verification and post-lending customer management.