Focus on Growth, Privatization and Overseas
Woori Financial Chmn. Lee has three objectives to ensure group's future
Chairman Lee Pal-seung has three major objectives in running Woori Financial Group including growth, privatization and overseas advancement.
During a recent interview with local media, the veteran banking executive, who has spent over 40 years in the financial industry, said the group ought to boost its overseas assets to 15 percent of total assets by 2015. The group will continue to push for its growth, privatization, and the expansion of its global network. Lee said Korean financial institutions should take advantage of the current financial crisis gripping the world and map out strategies for further growth and make Korea a global financial force.
"We should act now or the chance may never come again. Such conglomerates as Samsung, LG, and Hyundai have no reason to borrow from Korean financial institutions as they can take out loans from foreign banks on their own credit. This is the reason why Korean financial institutions look at middle-level and small Korean companies to give loans, which shows why many savings banks provided project financings to those companies with some of them turning sour," Chairman Lee said.
"The world economy is in a low-growth and low-profit period, and this is the right time for Korean financial firms to go abroad for business," he said.
Lee said Indonesia, Thailand and China are some of the foreign countries where Korean banks should launch their operations. Europe and North America are the regions where Korean banks can conduct M&As jointly with local financial institutions and turn over management to indigenous partners. Korean financial firms should also set up local subsidiaries as a means to penetrate foreign financial markets and serve local customers, since having branches to service Korean business firms and Korean residents in foreign countries has limits. Korean financial firms operating abroad should cater to the local community to build their operations because if they do, they can get help from host governments during financial crises.
The chairman also said Woori Financial Group has been mapping out strategies to conduct M&As abroad and the time is now to make moves as there are many financial firms in trouble, but still have good growth potential. "As I announced at the beginning of this year, Woori Financial targets to be among the top 50 financial groups in the world and top 10 financial groups in Asia in the near future. I will try to boost our overseas assets to 15 percent of the total by 2015 before my tenure is up," he said.
The sovereign credit rating of a number of major countries including the United States and Japan have been lowered, with the EU at risk. The situation was expected three years ago as the G-20 Summit agreed to boost the world economy by expanding liquidity in each of their countries and also to prevent protectionism in world trade. They increased the liquidity as if spreading cash from a helicopter, creating the debt crises. Lee said he is sure the crisis can be overcome, as they knew well it would come and have the means to set it aside.
As to strategies for the group's growth, the top executive said he will strengthen the non-banking side including credit card, securities, and insurance. The credit card operation needs a unique marketing plan tailored for the business, unlike banks. As such, Lee said the group will separate the credit card business from Woori Bank and let it become an independent firm and grow to become a cash cow for the group. "We will also go for expanding capital of Woori Securities to be large enough for the company to be able to perform the role of investment bank in line with government policies to develop the financial sector in Korea," Lee said.
Lee is a traditional banker who started his banking career in 1967 as a clerk in the now defunct Hanil Bank. When he was manager for the bank's Namdaemun Branch, he led it to be a bank branch with the largest deposits in Korea. In 1997, he was promoted to the youngest branch manager when he was 53 years old. He was made president of Hanbit Securities in 1999, and in 2002 he became president of Woori Investment and Securities, managing the company to a profit five years in a row.
Lee took over the Woori Financial Group as chairman in 2008 and succeeded in keeping the job for another term in February this year. nw
Chairman Lee Pal-seung of Woori Financial Group.
Photo on courtesy of Woori Financial