The sale of government’s stake in Woori Bank is likely to speed up with the Financial Services Commission (FSC) holding expert-level talks on the sale of shares directly with Abu Dhabi Investment Corp. and Kuwait Investment Agency, among state wealth funds of a number of countries in the Middle East.
The FSC will launch an expert team to negotiate the deal to unload government shares in the bank soon and will likely name Lee Myung-soon, the deputy director of FSC, as its head.
The FSC said Vice Chairman Chung Chan-woo toured Abu Dhabi, Kuwait and Saudi Arabia from Aug. 30 to Sept. 3 to check on the possibility of the sale of government stakes in Woori Bank, and got good assurances from the officials of the state wealth funds of the three rich Arab states that they will study the matter.
The government plans to sell 30 to 40 percent of the 48.07 percent stake in Woori Bank held by the Korea Deposit Insurance Corp. in the form of the sale of management rights or majority shareholder shares, and then sell the remaining 18.07 percent later.
The crux of the plan is to privatize the bank first and then boost its value as a private bank, and then sell the remaining stakes in the bank later at a higher price. It looks as though the government prefers to sell its stakes in the form of a majority stake sale rather than a management rights sale.
The FSC will set up an expert-level team jointly with the Korea Deposit Insurance Corp. to be led by Deputy Director Lee Myung-soon to negotiate the sale to state wealth funds of Middle East countries and Deputy Director Lee will be named officially before the month is over.
The FSC officials said the special team will hold talks with the state wealth funds, and if a substantial agreement is reached in the talks, the Public Fund Committee will discuss the progress of the talks and make the sale of government stakes in Woori Bank official.
In the meantime, Woori Bank announced its “24.365 Reform Project” in which all the officers and staff of the bank will work 24 hours a day for 365 days — figuratively — for the privatization of the bank and make it a strong financial institution.
The bank will strengthen its overseas operation to boost its income from overseas to 10 percent of the bank’s total annual earnings from the current 6 percent from next year, which was announced by President Lee Kwang-goo when he took over the top management role of the bank at the end of last year.
He said the bank is on the verge of privatization, with the government to unload its 48.7 percent stakes in the bank as soon as possible.
President Lee said the bank cannot relax its strategy to make its overseas operation strong, although it is on the brink of privatization. The bank will expand its investments in bonds and social overhead capital overseas and focus on selling its products through automation equipment, non face-to-face channels and other strategic products to expand its excellent quality assets and push for localization of their overseas units.
Woori Bank at the end of last year got approval from the financial authorities in Indonesia for the merger of Sodara Bank, a local bank acquired by Woori Bank and the Woori Bank branch in Jakarta, Indonesia, After taking over Sodara Bank in Indonesia in December, last year, Woori Bank got the approval to merge it with the Woori Bank branch in Indonesia. The bank has now 185 branches and other outlets in 18 foreign countries and plans to expand the number to 200 this year and to 300 under a medium-term strategy for its overseas operation designed to boost the overseas earnings share to 10 percent of the bank’s total earnings from six percent now.
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A view of the Woori Bank headquarters building in Seoul.(Photos:Woori Bank)
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