Doubling Assets in Three Years

Woori Financial Group Chmn. Lee to go for M&As at home and abroad to beef up group's operations

Chairman Lee Pal-seung of Woori Financial Group, said he will steer the group to being counted among the 30 largest financial groups in the world in three years with total assets of 600 trillion won.
During his first meeting with the press on June 30 following his inauguration as chairman, he said he will do his best to have Woori play a key role in the transformation of the financial industry in the country.
The chairman said his group will seek M&A opportunities with financial companies both at home and abroad, although the group faces privatization. Nonetheless, the group will do what it can to become a global financial group through M&As, since its growth alone would not enable it to achieve the target.
The new chairman also said he will see that overseas advancement will be led by the group, instead of by its affiliates, meaning that a number of subsidiaries will be set up in emerging markets around the world.
The group will study the strategies employed by such financial institutions
as Uni-Credit of Italy and Santander Bank of Spain as models for its overseas advancement.
Financial sources said the chairman intentionally avoided saying that those M&As will be sought after the group's privatization to boost the value of the group's affiliates by leading M&As during the process of its privatization.
Lee's strategy also coincides with that of the group's former chairman Park Byung-won, who now is the Presidential secretary in charge of economic affairs at Cheong Wa Dae, the presidential office. The former chairman often called for making Woori Bank a mega bank.
Lee also said the group will increase its stakes in its affiliates such as Woori Investment and Securities and Woori Financial to expand the profits of non-banking affiliates of the group. Lee said the group has to expand the profits of its non-banking affiliates as the sector accounts for only 20 percent of the group's net income with Woori Bank contributing the balance.
Currently, the group's stake in Woori Investment and Securities come to only 35 percent and 50 percent in Woori Finance, a major reason that the non-banking sector's profit contribution to the group is low.
The chairman said he is concerned with the fall in the ratio of its own capital based on the BIS (Bank of International Settlement), increases in housing loans and project financing.
He said he will also try to bring down the deposits vs. loans ratio to 80 to 90 percent from the current 130 percent and also look into speeding up the rate of increase of assets.
Lee said the group should be able to expand its profits from overseas operations, which now stands at 3 percent of the total.
Woori Investment and Securities will be pushed to secure capital up to international standards so that it will be a global financial investment company. Woori CS Asset Management will diversify its product offerings in order to cope with changes in demand for assets in line with the trend for low interest rates and an aging society through strengthened marketing and management capacities.
Woori Aviba Life Insurance will expand its life insurance business and bancassurance while other affiliates including Woori Financial, Woori F&I and Woori FIS will be managed to offer integrated financial services second to none in the country.
The new chairman said he is proud of the group's growth since its launch in 2001 with assets expanding to 300 trillion won and annual net profit of over 2 trillion won.
"It is a fine financial group that is made up of banks, securities, asset management, insurance and consumer financing. A truly magnificent financial group in the country,"he said.
However, there is still a lot of room for improvement, he said, pointing out that the non-banking sector only accounts for 10 percent of the group's total profit, not yet able to create its own value. He said efforts to create synergy among affiliates have yet to be expanded with overlapping investments and business areas. nw

Chairman Lee Pal-seung of Woori Financial Group.