Woori Goes Ahead with Overseas Expansion

Financial group takes over Hanmi Bank from Korean residents in Los Angeles

Woori Financial Group secured a 51-percent stake in the Los Angeles-based Korean-American Bank run by Korean expatriates to expand its operations in the United States through the bank’s branches in the western part of the country. It was the first M&A deal by a Korean bank in the United States since the 2008 financial crisis, Woori officials said.
The financial group said an agreement to take over the stake with Han-Mi Financial Corp. (HFC), the majority stakeholder of the California bank was signed on May 28. Woori paid $210 million to take over the 51 percent stake in the bank, the Woori officials said.
The officials said they arrived at the share price that Woori paid in consideration of the possible non-performing loans the bank might incur in the days ahead. HFC posted a $49.5 million loss for the first quarter. They said the total payment for the stake could increase to $240 million if Woori were to assume the forfeited shares by shareholders when the bank issues new shares to increase its capital.
The takeover deal may be concluded either in July or August when the U.S. financial authorities gives official approval for the deal. HFC, set up in 1982, has 27 branches in California with assets valued at $3.018 billion. Woori already has the Woori America Bank, a wholly-owned subsidiary in the eastern part of the United States and its acquisition of Han-Mi Bank will strengthen its operations along the west coast of the United States.
Woori will not merge its new bank with Woori America Bank and will continue to run it independently in a bid to expand synergy between the two banks through a new strategy. Woori plans to install a local banker with an in-depth knowledge of the local financial industry to manage its subsidiary, as Woori’s strategy is focused on the local customers in balance with its operations in Korea.
Woori Bank, a major affiliate of Woori Financial Group, secured approval from the Financial Services Commission on its plans to set up a branch in Chennai, India, and establish a wholly-owned subsidiary in Sao Paolo, Brazil, and the bank also plans to establish a presence in Russia.
Some in the financial community said the move has been inappropriate in consideration of the fact that Woori is in the process of being auctioned off to a private financial firm or a consortium in a government plan to privatize the financial group. Yet, some others said the move has been appropriate in the face of the fact that the domestic financial sector is too crowded with not much room for growth, and there is a balance of Woori’s portfolios at home and overseas, ensuring the bank’s future growth resources, boosting the financial group’s value.
In the meantime, Woori Financial Group announced that it entered into an MOU with the National Bank of Abu Dhabi for mutual cooperation and signed the document at the Intercontinental Hotel in Abu Dhabi on March 8.
This contract includes 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. Lee Pal-sung, chairman of Woori Financial Group, and Nasser Alsowaidi, chairman of the National Bank of Abu Dhabi, attended the meeting and discussed how to expand the relationship in the financial services area between the two countries.?
The MOU meeting was set up during the “Korea-Abu Dhabi Investment Forum,” sponsored by both the Ministry of Knowledge Economy and the Abu Dhabi Economic Development Department. This is expected to contribute to the invigoration of mutual economic exchanges between Korea and the Abu Dhabi Government.
Woori Financial Group intends to enhance its global competitiveness through this strategic alliance with The National Bank of Abu Dhabi. 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 Eastern markets. In addition, Woori Investment & Securities will create new business opportunities, especially in asset management and corporate finance, for Korean companies to enter the markets.
The Abu Dhabi Bank, in which the Abu Dhabi Investment Council, the Abu Dhabi government-affiliated organization, owns 70.5 percent of shares, offers comprehensive financial services including corporate financing, private financing, Islamic financing, leasing, 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 Woori Financial Group said, “Since the contract for the nuclear power plants 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-sung of Woori Financial Group.