Nonghyup's
Transformation Begins

NH Financial Holdings to spin off various divisions as independent affiliates

Nonghyup's financial services division warrants full treatment as a national commercial bank, not as just part of the farmers'cooperative organization dedicated to the welfare of farmers around the country, with financial assets reaching 169 trillion won and the expansion of its financial services.
This year, NH Finance, headed by President Chung Yong-keun, will create offshoots of the different financial businesses, such as the investment banking, credit card and insurance divisions, as independent affiliates.
To launch the project, Nonghyup (new Chairman Choi Won-byung) will use the first two initials of its English spelling to tentatively rename the financial holding company NH Financial Holding Co.
In December last year, the National Agricultural Cooperatives Federation reorganized as a holding company. Under the reorganization plan, the insurance unit will be the first offshoot after further strengthening its business capacity.
Tentatively named 'NH Insurance,'it will operate insurance centers in the 16 regional headquarters of NH with each center given the right to supervise all of NH Insurance's business in their given regions. The scale of the mutual aid-provider team at the centers will be reinforced greatly from now.
The credit card business is scheduled to become an independent affiliate with a reinforced staff within the next several years with the tentative name 'NH Card.'They will set up an affiliate credit card operation in Seoul first for experimental purposes and then expand nationwide if the experiment proves a success.
NH's plan to spin off its credit card operation will be helped by similar moves by commercial banks such as Kookmin and Hana in order to make their credit card operations independent.
The IB sector will also be spun off as an independent affiliate following its reorganization and will move into another building this year. All of the 270 officers and staff will move into the IB Center building, now nearing completion in Seoul. NH officials said within three years, the insurance, credit card and IB units will all be affiliated as independent corporations and financial holding companies. Under Nonghyup's revised rules, insurance, credit card and IB operations will become independent affiliates in that order, they said.
The NH Finance Division will have the consumer and corporate customer sections to step up the work of expanding deposit accounts. Nonghyup will also continue to push to reach the targets that were scheduled for last year, including the takeover of a capital company to beef up its consumer finance operation. NH will also step up its efforts to launch overseas operations this year, which it also aimed to achieve last year, by setting up branches in strategic financial centers.
The financial assets of Nonghyup zoomed to 169 trillion won from 130 trillion won in only three years. At the end of 2005, it totaled 140 trillion won, and by the end of 2006 it had reached 157 trillion won. Nonghyup's financial operations have become strong enough to compete with national commercial banks. nw

New Chairman Choi Won-byung of Nonghyup.

President Chung Yong-keun of NH Finance.