The Korea Herald


No. 1 financial group broken up for sale

Eight of 14 Woori Financial units meet potential acquirers

By Kim Yon-se

Published : Dec. 26, 2013 - 21:20

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Woori Financial Group, Korea’s first holding firm-owned financial services company, has embarked on a full-scale process to dispose of its businesses within a year.

Under policymakers’ full-fledged action scheme to retrieve taxpayers’ money by selling the state-funded Woori’s 14 units one by one, the group started the process of minimizing any negative effects that would affect bidding prices.

Woori Financial has secured the No. 1 position by total assets in the market over the past few years after establishing the holding firm structure in 2001.

The group has led the development of the local industry involving banking, securities, insurance and credit cards along with three competitors ― KB Financial, Shinhan Financial and Hana Financial.

As the initial step, eight of its 14 business units would likely be absorbed into several acquirers ― which the government selected as preferred bidders earlier this month ― by the second quarter of 2014.

The eight units included Woori Investment & Securities, Kyongnam Bank in South Gyeongsang Province, Kwangju Bank in South Jeolla Province and Woori Aviva Life Insurance.

NongHyup Financial Group has been picked as the preferred negotiator for three of the group’s units ― securities, life insurance and the savings bank.

KB Financial Group is the preferred bidder for the group’s credit service unit while Kiwoom Securities won the bidding for the asset management unit.

Financial authorities plan to launch the auction process for the core units ― Woori Finance Holdings and Woori Bank ― in early 2014.

In June, the authorities publicized an undated project to privatize Woori Financial Group, which features three separate auctions by dividing its 14 units into three packages.

The first package for the group consists of two provincial banks, the second is the securities unit plus five other sectors and the third is the flagship bank unit plus five other sectors, said the Financial Services Commission.

The first batch is composed of Kyongnam Bank and Kwangju Bank. The two units take up 14.6 percent of Woori Financial in terms of assets.

The second sale package is expected to draw extraordinary interest among potential bidders as it comprises the lucrative stock brokerage unit Woori Investment & Securities. It is the No. 1 player based on assets and the No. 2 based on equity capital in the domestic securities sector.

The third package features the core unit Woori Bank, the second-largest lender in the nation with assets of 266 trillion ($230 billion) won, which account for 75 percent of the group’s total assets.

By Kim Yon-se