Soundness, Balance Key Factors

New Woori Bank head unveils management strategy as shareholders approve his appointment

Woori Bank President Lee Chong-hwi said Woori Bank will avoid heated competition with rival banks and will instead work hard to maintain order in the financial community when he manages the commercial bank.
His remarks came amid shrinking net interest margins at lenders due to intensified competition. Interest income is the key source of profit for banks, and the net interest margin has been on a downward spiral lately as banks rushed to sell high-interest rate deposits while low-cost deposits decreased.
He said the bank will be in the center of the privatization and M&A trend of financial institutions, stressing that personnel policies will be balanced, not condoning the formation of groups and circles among employees in the bank. What he said was considered to mean that Woori will try to take over a financial institution if needed, rather than be the subject of a takeover by another financial institution.
During a media conference at the Bankers Association building on June 9,
Lee said the growth of a bank should be pushed when profit and soundness are not endangered. He said Woori, as a leading bank in Korea, will work for the soundness of its operations and to secure a proper margin between lending and deposit interest rates. Lee was officially approved as president and CEO of Woori Bank at the bank's shareholders'meeting on June 26 as recommended by the Financial Services Commission, the bank said. Lee has become the first Woori Bank employee to be named to head the bank in the six years of the bank's operation following mergers with the Commercial Bank of Korea and Hanil Bank.
The new Woori Bank head also said the exploratory work for new growth areas would take a long time to reap fruit, but will be worthwhile to continue with the effort. He also plans to expand the bank's non-interest earnings from the current 25 percent of total profit to the 30 to 40 percent level in the future by introducing new complex financial products connected with insurance and securities industries in the market at a proper time.
The new CEO, however, said he will have a close look at the credit card operation, which has been raising concerns and will take actions on problematic areas. He will also have a close look at overseas operations by region and operational sectors and draw up basic strategies by region and product before moving full speed ahead.
Lee also promised that he would see that the bank's operation is balanced, not favoring particular sectors. The bank will not borrow foreign funds or lend at risky rates, and will not seek to attract deposits at high interest rates that will put the bank's profit in harm's way, worsening NIM.
He said the personnel policies regarding top managers will always be made with the creation of synergy in mind, ruling out the mathematical balance among the new employees hired after the merger and 36 percent of the current employees who began to work for the bank after the merger.
On the possible merger of the bank with other financial institution, Lee said he will always work hard to ensure that the banking industry would be reorganized with Woori in the center of any move.
He also will always make sure that Woori Bank would be a leading profit generator in the Woori Financial Group at the forefront of the search for new growth engines and financial markets "like the oldest brother of a family"with its share of the group's annual profits amounting to from 70 to 80 percent of the total.
" 'Our country's Woori Bank'will be the slogan for the bank to continue to keep its native image. The number of staff at the head office will be kept down unless new markets or new growth engines are found,"President Lee said. nw

President Lee Chong-hwi of Woori Bank.

Woori Bank's head office building in Seoul.