Chairman-designate Sohn Tae-seung of Woori Financial Group. (Photo: Woori bank)

Woori Bank president Sohn Tae-seung has been appointed to lead Woori Financial Group as its chairman, when it is revived early in 2019, five years after its dissolution.

Woori Bank held an interim board meeting on Nov. 8 and announced that the board has decided to allow Sohn, who was appointed as the bank’s president in December 2017, to double as chairman of the newly established holding company.

Under a plan adopted by the board, Sohn will lead both the bank and its holding company until the bank’s general shareholders’ meeting in March 2020. At that point the two posts will be separated. The board has appointed Sohn chairman of Woori Financial Group without setting up a separate committee for the nomination of executives.

The board’s decision to allow Sohn to lead the two organizations at the same time was based on its judgment that there is a need for the Woori Bank president to lead the holding company in the initial period after its establishment.

Even after the launch of the holding company, Woori Bank’s importance is absolute within the financial group. This makes it inevitable that the bank plays a pivotal role in the management of the entire group.

Furthermore, cooperation between the bank and the holding company is important until the pending issues, such as bringing Woori Card and Woori Investment Co. under the control of the holding company, are resolved.

The board of Woori Bank also decided to fill the holding company’s board with outside directors recommended by the bank’s current major shareholders. Currently, Woori Bank has five outside directors recommended by oligopolistic shareholders such as IMM PE, Tongyang Life Insurance, Hanwha Life Insurance, Kiwoom Securities and Korea Investment & Securities.

The term of outside directors of the holding company is two years. Woori Bank president Sohn will be officially appointed as Woori Financial Group chairman at a shareholders’ meeting scheduled for Dec. 28.

Sohn was appointed to lead the bank unexpectedly following the abrupt resignation of his predecessor Lee Kwang-koo due to his involvement in recruitment irregularities. Woori Financial Group was launched as Korea’s first financial holding company in 2001, but disappeared into history when it merged with Woori Bank in Nov. 2014.

The Chairman-designate met the press following his designation and said he will try to run the holding company system as stably as he can so that the Woori Financial Group when it is officially launched will be a leading financial group in the country.

Among the important tasks facing the new chairman include managing Woori Bank to be subject to the domestic grade laws and also have the Woori Card and Woori Investment Bank to be the direct affiliates of the holding company, not the affiliates of the affiliates.

Financial sources said the board of directors decision to have its chairman to simultaneously to serve as the president of the bank was related to the need for close consultations and cooperation between the holding company and the bank over such matters as conducting M&As, among others, but he will take his hands off from the bank after a year from the launch of the holding company.

The board will meet again on Nov. 23 to decide on the matters to be taken up at the shareholders meeting coming up on Dec. 28. Chairman-designate Sohn will be officially approved to serve both as the chairman of the financial holding company and as the president of Woori Bank until March, 2020.

With 23 subsidiaries and affiliates at home and abroad, the group will make an official comeback in Feb. 2019, and join other major holding companies such as KB, Shinhan and Hana.

This will come after Woori relists its shares here and its American depository receipt shares in January 2019.

As Sohn will run the financial group, he will have more capacity and freedom to seek and acquire other firms as a means to build the nonbanking business.

The bank has indicated the group will pursue acquisitions of brokerages and investment banks that could be later merged with Woori Investment Bank.

As a financial holding company, it will be able to buy and invest in equities of bigger assets, as the law allows it to spend up to 130 percent of capital for equity investments and acquisitions.

A bank is only allowed up to 20 percent, which is the reason why a financial holding company is assiduously sought for its reemergence as a fund totaling around 9 trillion won would be able for investment through a holding company.

Its other acquisition interests include real estate and asset management, which will be able to generate synergy with investment banking, Woori said. However, before it starts looking for targets, the bank said reorganization tasks remained.

Woori Bank’s key shareholders include the state-run Korea Deposit Insurance Corp. and the National Pension Service. Foreign investors hold 27 percent of the bank, which is seeking to increase this to a similar level of other financial holding companies ― 70 percent on average.