Occasion to Renew Determination

Financial Group to spin off credit card operation and to lead mega-mergers of financial institutions

Chairman Lee Pal-seung of Woori Financial Group said he plans to turn the group’s operations more aggressive by spinning off its credit card division in the fall, while expanding its overseas operations to a 15 percent share of the group’s annual sales from the current 4.5 percent.
On the occasion of the group’s 9th anniversary on April 2, Lee told a local daily that the spinoff would be made in the fall following the completion of preparations for the move in such areas as accounting and operations as an independent entity.
The credit card operation merged with Woori Bank in 2002 during the credit card crisis with its operations on the verge of going belly-up like other credit card firms.
The financial group has decided to spin off the credit card division to expand its operations to boost its profits by making quicker management decisions.
Lee said the time has come to split the credit card sector from the banking sector as its share of the credit card market has grown to 8 percent, large enough to stand alone, while making the group’s portfolio more appropriate.
The chairman also said the group will spur its overseas operations to find new growth engines with the domestic financial market getting too crowded, so that overseas operations would account for 15 percent of the group’s annual sales within three to five years.
He said Woori Bank will first enter Chennai, India, where Hyundai Motor has plants and then to Sao Paolo, Brazil, where Samsung Electronics and LG Electronics, among others, have extensive operations. Woori Bank has been in touch with the financial authorities in those countries to obtain licenses to set up wholly-owned local subsidiaries.
He said Woori Bank plans to truly localize its operations in foreign countries by hiring local personnel in key positions so that they would be able to help Woori Bank make a deep penetration into the local financial market. He said other Korean banks’ overseas operations concentrated in such countries as the United States, Japan and China have so far been limited to serving Korean firms operating overseas and Korean residents, although not very extensively. Woori Bank, Lee said, will show how it should be done to become truly part of a local financial market.
With regard to the management of funds, he said the group is expected to get about 3 trillion won in new deposits out of 35 trillion won that will be deposited with financial institutions this year. “We are in the middle of mapping out strategies on the operation of the funds,” he said.
Woori officials said the two core deposit products would be the regular deposit accounts and the regular deposits with points earned from credit cards added.
They said they don’t expect to see big borrowers emerging this year, except an uptick in demand for loan increases when Samsung Life goes up for its initial public offering. The potential bidders would have to borrow funds to finance their bidding deposits and Woori Bank is ready for those niche fund markets.
Woori Financial Group announced that it entered into an MOU with the National Bank of Abu Dhabi for mutual cooperation at the Intercontinental Hotel in Abu Dhabi on March 8.
This contract includes the discussion on cooperation in the financial service area between the UAE and Korea as well as the provision of information to understand the possibility of cooperation. Chairman Lee of Woori Financial Group, and Nasser Alsowaidi, chairman of the Abu Dhabi Bank, attended the meeting and discussed how to expand their relationship in the financial services area between the two countries.
The MOU meeting was achieved during the “Korea-Abu Dhabi Investment Forum” period sponsored by both the Ministry of Knowledge Economy and the Abu Dhabi Economic Development Department. This result is expected to contribute to the invigoration of mutual economic exchanges between Korea and the Abu Dhabi government, especially considering the recent contract for the UAE nuclear power plant won by a Korean-led consortium.
Woori Financial Group intends to enhance its global competitiveness through this strategic alliance with Abu Dhabi Bank. Woori Bank, one of its affiliated companies, is operating the head office in Dubai, which will contribute to the expansion of businesses in the Middle East markets. In addition, Woori Investment & Securities will create new business opportunities especially in asset management and corporate finance for Korean companies entering the market.
The Abu Dhabi Bank in which the Abu Dhabi Investment Council, a government-affiliated organization, purchased 70.5 percent of shares, offers comprehensive financial services including corporate financing, private financing, Islamic financing, lease and private banking services. It is one of the leading banks in Abu Dhabi with total assets of approximately 52 trillion won.
An official of the Woori Financial Group said, “Since the contract for the nuclear power plant between Korea and the UAE last year, economic exchange between the two countries is expected to grow. We believe that we will play a key role in invigorating financial services between the two nations in the future.” nw

Chairman Lee Pal-seung of Woori Financial Group.