Standing Upright
on World Stage

Woori Bank CEO Hwang says tougher competition at home will make banks stronger

"We will build on what we have now, not expanding market share this year,"said Chairman & CEO of Woori Financial Group Hwang Young-gi, who also is President & CEO of Woori Bank.
What he meant is Woori Bank will sell beneficiary certificates and expand the credit card business with customers the bank secured through an aggressive marketing of mortgage loans last year. He continued that he will push the employees of the bank to work hard to make Woori first-class financial institution
in the country. Woori Bank has been the subject of criticism from its competitors that it used lower interest rates as its main weapon to secure customers for its housing mortgage loans last year. The bank also expanded its loans for SMEs for a greater share in the market, taking away customers from other rival banks calling the move an effort to recover its lost ground.
The Commercial Bank of Korea and the Hanil Bank, which merged to become Woori Bank dominated the bank loan market with a 35 percent share in 1985, while other banks except Kookmin Bank can only muster a single digit market share. But Woori Bank's share including that of Peace Bank, which the bank acquired later, amounted to only 13 percent in 2005. Shinhan and Hana banks chipped away at Woori Bank's share, while Woori was engrossed with consolidating its asset growth. Woori blamed the two banks for lowering interest rates to woo customers away and now Woori has become the subject of the blame.
President Hwang is proud that the legacy of his leadership at Woori would be that he implanted the mind for limitless competition in the financial market. The Woori CEO recalled that before he came to Woori, the bank's employees were used to the idea that the banking business was run by regulations and therefore, banks have to be cautious in making next moves. But "things have changed, they now think that it's dog-eat-dog competition in which a bank can lose its customers, if it is not alert,"President Hwang said.
Hwang is optimistic about the banking industry's future because the heated competition in the country would make them stronger and finally become world-class banks. He pointed to such banks as UBS, Credit Swiss, ABN Amro and ING, which are big players in the global financial market, although they are based in small countries. He believes that the tough competition at their home countries have made them what they are today, big players in the wholesale financial market. UBS, in particular, is the top investment bank nudging aside such behemoths as Citi, JP Morgan, and BOA, among others.
He also cited the heated rivalry between LG Electronics and Samsung Electronics, which made them global players and have been able to recover the losses incurred due to the fierce competition at their home market from operations in overseas market.
Woori, Hwang said, took customers away from its rivals with lowered interest rates only in the past two years. He said Woori has to take back its customers that it saved from going insolvent over a number of times as their main bank, but lost to rival banks.
The battle among banks has just began, the Woori Bank chief said, adding that his bank would come out ahead of others and stand upright on the world stage if the bank survives from the battle.
He also said financial regulations should be revised to the level of advanced countries to fit the special national characteristics of the Korean people, predicting that strong banks will grow stronger in about a decade from the time the banking regulations are upgraded.
He said Korean people have the knack to become talented bankers, pointing to how well domestic banks have been doing with derivative financial products. Hwang remarked that the Korean people made "go stop"a simple card game with simple rules as interesting as mahjong just to show that how creative the Koreans in building the national economy in a phenomenal manner in such a short period of time.
Woori Bank's total assets amounted to 177.8 trillion won as of the end of September last year with 107.8 trillion won in capital and 1,024.2 trillion won in loans outstanding. Its ROA amounted to 1.19 percent and ROE 16.42 percent. Its employees totaled 10,660 manning 822 branches and outlets. nw

Chairman & CEO of Woori Financial Group Hwang Young-gi