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Woori Financial purchases two asset managers

To move beyond bank, group is on spree for non-bank financials

Apr 09,2019
Woori Financial Group has acquired Tong Yang Asset Management and ABL Global Asset Management in an effort to strengthen the holding company on the non-banking side.

The deal marks the first buyout since Woori Financial Group was established in January.

Woori reformed its structure in part to build its capabilities outside of basic banking.

The bank has generated more than 90 percent of the group’s net profits and holds more than 90 percent of its assets.

Sohn Tae-seung, CEO of Woori Bank and group chairman, reiterated that the company is on the lookout for non-banking acquisition targets like asset management and securities companies.

Of all types of institutions, asset managers were at the top of the list, Sohn noted.

A source at Woori Financial Group cited higher profitability and rising demand for asset management as reasons for the purchase.

“The asset management industry has stable annual returns on equity of over 10 percent,” the source said, “We expect steady growth and the anticipated rise in demand for asset management with the rapidly aging demographics.”

Founded in 2000, the companies are considered mid-sized players in their business. Tong Yang Asset Management ranks 13 and ABL Global Asset Management 29 by assets under management.

Woori Financial Group is also on track to buy Kukje Asset Trust, a real estate trust management company based in Seoul.

It signed a memorandum of understanding to acquire a controlling stake last week, and the two parties will conclude a formal sales agreement after Woori finishes due diligence.

As is the case of asset management sector, the real estate trust industry also enjoys high profitability and rising demand, according to the group.

“The real estate trust business records an annual growth rate of 10 percent and a return on equity ratio of around 20 percent,” a source at the group said. “The industry is compatible with the existing affiliates in expanding business and creating synergy.”

Sohn indicated that the latest moves represent only a part of its expansion strategy.

“Starting with the acquisition of asset managers, Woori will continue to bolster its business portfolio by expanding into non-banking sectors, such as real estate trust, consumer finance, securities and insurance,” he said in a statement released on Monday.

The holding company has six affiliates: Woori Bank, Woori Credit Information, Woori Private Equity Asset Management, Woori FIS, Woori Finance Research Institute and Woori Fund Service.

Woori Card and Woori Investment Bank remain subsidiaries of the banking unit and be placed under the new holding company as separate affiliates, according to Woori Bank.


BY PARK EUN-JEE [park.eunjee@joongang.co.kr]


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