Chairman Lee Soon-woo of Woori Financial Group

Woori Bank shares may be sold off to as many bidders as there are in an open bidding as recommended by the Korea Financial Research Institute.

The institute held a policy discussion at the Korea Banker’s Building in Seoul on the best way to privatize the bank, the last remaining affiliate of the Woori Financial Group, which has been in the process of breaking up by through the sale of its affiliates to private investors in open biddings.

The institute said the majority of participants in the discussion favored the split sale of stakes in the bank as no single bidder has bid for a dominant share of the bank’s stocks.

Financial sources presumed that the recommendation would be taken up by the bank as they believe the idea came from the government and was given to the institute to discuss it and such ideas or policy frames given to the institute to study usually end up in government policies.

The government has been trying to sell a 33 percent stake in the bank of its 56.97 percent share in blocks held by the Korea Depositary Insurance Corp., a government-run company, to a buyer who wants to take over the bank.

But the government realized that no single investor is on the horizon to spend from 3 to 4 trillion won to purchase a stake in blocks and has decided to turn to open biddings to sell the shares to individual or corporate investors in small numbers.

In the open biddings, the highest bidder gets the number of shares they want to buy and the rest of the shares will be split among the next highest bidders in order of bid price.

If this bidding style is a success, there will be many shareholders with their number of shares ranging from 5 percent to 10 percent. An official of the institute said this type of bidding would not go against the government policy to privatize the bank as it will be able to sell the government’s shares to as many investors whose interest in buying Woori Bank shares vary and can sell the government’s shares of the bank to private investors.

But some quarters of the financial community criticize that this type of bidding results in Woori Bank having no dominant stakeholders, which would invite government intervention in the bank’s management. They recommended a “call option” type of bidding which would give more shares to a dominant stakeholder to be able to run the bank with more power.

The government plans to finalize the sale of its holdings in Kwangju Bank and Kyungnam Bank as soon as the parliament approves a special law that will exempt 650 billion won in taxes in connection with the sales of those banks’ shares and then move on to the sale of its shareholdings in Woori Bank.

The sale of its Woori Bank shares targeted for this month may be delayed further as it is unclear whether the parliament would take up the bill during its extraordinary meetings this month or in June.

Woori Bank, since July 2007, has been able to expand its social service with some 1,000 branches and other banking outlets taking up diverse voluntary social services.

The social services rendered by the bank’s nationwide units have become more effective since 2010 with the regional headquarters managing the social contribution work under its control, the bank said.

Each regional banking unit has been operating a “Woori People Sharing Place” to support the regional societies under which all 1,000 banking branches and other outlets under the management of the 32 regional headquarters of the bank have ties with children’s social welfare centers and welfare facilities.

Economically disadvantaged families, handicapped persons, boys and girls providing for their families, old people living alone, children with not enough food, multicultural families, and other socially dislocated people have been the subjects of the Woori Bank’s local units’ support.