Chairman Yim Jong-ryong of NH Financial Group.

Chairman Yim Jong-ryong of NH Financial Group plans to merge Woori Investment and Securities with NH Securities at the end of this year, while Woori Alibaba Life Insurance Co. will be taken over by NH Life Insurance Co. in the first half of next year.

Chairman Yim, during a media conference on the occasion of his first year anniversary as the top manager of the financial group, said the group is ready to take over a hedge fund in order to expand its operation areas.

He said the newly-merged securities firm will be named NH Wootu Securities. At the end of last year, the government decided to allow domestic securities firms to enter the hedge fund business to encourage their M&A activities.

NH Wootu Securities will also strengthen its corporate business sector, while the individual customers will remain with NH Bank, which will expand its retirement consultation services in cooperation with the NACF’s farm and animal husbandry sectors. The new securities firm will reduce the number of its outlets from 131 to around 80 in order to beef up the size of the branch offices.

Woori Alibaba Life Insurance will be merged with NH Life Insurance after strengthening its operation in the first half of next year while Woori Savings Bank will change its name to NH Savings Bank and cut its non-performing liabilities to 10 percent from 12 percent.

Chairman Yim said NH Financial would look for an asset management firm for take over, although it has NH-CA Asset Management, because the group needs an asset management vehicle to take overall care of the group’s 200 trillion won in assets. 

Chairman Yim said NH Financial has become one of the four largest financial groups in Korea with its merger with Woori Investment and Securities. The group aims to expand its total assets to 420 trillion won by 2020 with an annual net profit of 2 trillion won, 40 percent of which will come from the non-banking sector in the target year.

Yim has been credited for the merger of Woori Investment and Securities, the largest financial deal that the group has ever made in its history, putting to rest concerns that a former treasury official can do well in leading the financial group like NH Financial.

He also has received excellent marks for his job of managing the holding company system linking NACF, NH Financial Holding, and the other affiliates. He also has been given credit for improving the financial conditions of NH financial affiliates, especially NH Bank whose default ratio has been reduced to 1.06 percent from 1.32 percent, with its non-performing asset ratio also improving to 1.95 percent from 2.3 percent.

A major problem that NH Bank should take care of is the default of its loans provided to STX Group, which the bank covered up with the loan loss provision of 470 billion won, which pushed the net profit down to 300 billion won.

This year, too, the bank should put up at least the same amount for the loan loss provision as it did last year. The bank’s net profit fell to 3 billion won in the first quarter.

Chairman Yim said the bank should return to normal by the end of this year after taking charge of its loans to the defaulted group.