KB Financial covets 57% Woori stakeThe Park Geun-hye administration’s financial landscape is expected to undergo a big change with its aggressive push to privatize Woori Financial Group after efforts to find Woori Financial a new owner went up in smoke under the previous administration.
According to industry sources, the government will market Woori Financial during the second half of the year at the earliest, and KB Financial Group is expected to be the most aggressive bidder for the government’s 57 percent stake.
If KB Financial purchases Woori, its total assets of more than 600 trillion won ($538 billion) would make it the largest financial group in Korea and among the 50 largest in the world.
Other changes in the financial landscape will occur with the upcoming appointments of new chairmen for KB Financial and Woori Financial Group. The new chairman of Woori Financial will likely be announced today and the government, when screening nominations, has prioritized selecting someone with the will to privatize Woori.
“We have selected former Woori Bank President Lee Chong-hwi and current President Lee Soon-woo as our two finalists because we thought there should be a leader that knows well the internal structure so the task of privatization can be completed smoothly,” said a high-level government official.
According to sources, KB Financial sees the Woori Financial merger and acquisition as an opportunity to make up for past disappointments. In early 2000 when KB Financial successfully merged Kookmin Bank and the Korea Housing & Commercial Bank, it was the industry leader. However, after failing in its bid for Choheung Bank and Korea Exchange Bank, and its inability to develop its nonbanking business like securities and insurance, KB Financial became the country’s fourth-largest financial institution by assets.
“Acquiring Woori Financial is what everyone is hoping will happen,” said Lee Kyung-jae, head of the board of directors of KB Financial. “All bidders will have in mind an aggressive plan to purchase Woori.”
An official on the special chairman nominating committee at KB Financial said, “We decided to select the new chairman based on five criteria: the ability to promote external negotiations, understanding of international finance, corporate leadership, expertise and morality.“The ability to promote external negotiations would mean the new chairman’s ability to communicate well with the government to promote an M&A with Woori Financial.”
By Lee Sang-ryeol, Lee Tae-kyung [email@example.com]
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