IB, Key Growth Area

Woori Financial Group Chairman Park strong on propping up IB sector, overseas expansion

Chairman Park Byung-won of the Woori Financial Group said recently that many in the financial community are doubtful whether the government intends to privatize the Woori Financial Group or not since there has been no progress in that direction in the past three years. He said he met many financial biz leaders since he took over the current job in April, doffing off his government career as the vice finance-economy minister. There were outcries of "parachute"personnel move in the banking community when he was named to take over the top management of the financial group whose assets are worth 212 trillion won. The word in local parlance means a personnel move involving a high-ranking former government official being named to head a biz entity with the help of the government.
At a media conference he had recently, he said the government should make clear how it will divest its stake in the financial group since many financial people suspect if the government has a true intention to privatize the group. He urged the government to sell the 23 percent of the government stake in the financial group as early as possible as planned.
The former vice finance-economy minister said he doesn't think the government would want to sell 5 percent of the stake each time over 5 or 6 time. He thinks that it should sell them all at once, rather than give the market an impression that there would be a steady flow of shares into the stock market.
Park is for the government selling a bigger portion of its stake than has been planned and earlier the better. He also stressed that the government should draw up a roadmap for divestiture of the remaining stake, which will transfer the right of a majority shareholder so long as the government doesn't want to sell it at a premium. What is more critical is the government should get the right price for its remaining shares, when the stock market doesn't think the government would release the remaining shares in at lease from 5 to 10 years.
The chairman is against the National Pension Service taking over part of the stake in the financial group only for long-term investment purposes, not participate in management.
Park said NPS's moves to purchase bonds and stocks are good for boosting its income, but only if its investment in stocks would be for a long-term one to be welcomed by the financial community. He said if NPS purchases from 5 to 10 percent of the Woori Bank, the stock market would welcome the move, but not if it wants to participate in management, adding, "I am not sure how the financial community would react."Its up to NPS to decide how much investment it wants to make, he said, to get a good reaction from the stock market.
On his strategy for sound management of the financial group, he said he would like to strengthen its non-banking sector and overseas operations, in addition to fostering the IB sector to raise the synergy among the group's affiliates. He would like to take advantage of Woori Bank's strength in corporate banking service and Woori Securities and Investment's dominance in its business area to build up its IB sector.
The chairman is cautious about the group expanding its consumer financing in the face of curb loan operators"high interest rates becoming a social issue lately. He only said the entire banking community is concerned that so many people have had to seek curb loans, not having enough credit to borrow from banks on time when they need funds. He said the group has been serious about the issue of its expanding the consumer banking services.
Its been about 100 days since he took over the management of the financial group and the financial market wonders how he will run the group.
In the meantime, the Woori Bank will set up 30 branches in China by 2010 mainly to secure yuan deposits from Chinese customers, the bank announced recently. The bank plans to set up branches in the cities where Korean businesses are located including Beijing and Shanghai and will launch its private banking service aimed at rich native citizens and Korean businesspeople engaged in business in China. Woori Bank also plans to provide 1 trillion won in loans to innovative-type SMEs on special discounted interest rates, down by 0.2 percent from ordinary rates, along with business consultations. The bank will also give counseling to women CEOs on marketing and networking, especially on tax, legal and real estate matters. The bank will also run educational facilities such as coaching school and charming school for employees of firms managed by women CEOs
Woori Bank, with the registration of its local subsidiary in China this year, aims to put itself in an advantageous position in the retail banking sector in the neighboring country, based on its strategy for avoiding various local regulations for the operation of its wholly-owned local subsidiary. nw

Chairman Park Byung-won of Woori Financial Group