Nonghyup gets green light on Woori

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Nonghyup gets green light on Woori

Korean financial authorities yesterday officially approved NH Nonghyup Financial Group’s acquisition of three subsidiaries of Woori Financial Group.

The Financial Services Commission said it gave its blessing to the acquisition of Woori Investment and Securities, Woori Aviva Life Insurance and Woori FG Savings Bank and their inclusion as subsidiaries of Nonghyup. Woori Futures will also be an affiliate.

The acquisition is part of the second phase of the ongoing privatization of Woori Financial Group.

Nonghyup is scheduled to take over 75.42 million shares of Woori Investment and Securities, 14.57 million shares of Woori Aviva and 10.32 million shares of the savings bank by the end of the month.

Nonghyup Chairman Yim Jong-yong will speak about the group’s plan for the new family members next week.

With the approval, the number of Nonghyup subsidiaries increases from seven to 10, and the group’s total assets are estimated to rise to 290.2 trillion won ($283.37 billion) from 254.5 trillion won.

Woori Investment and Securities, which is expected to help enhance Nonghyup’s securities unit, will start using Nonghyup’s corporate image from next week as part of efforts to quickly merge with the group.

At the earliest, NH Nonghyup Securities and Woori Investment and Securities are likely to integrate fully at the end of this year.

A possible new name is NH Wootoo Securities, according to insiders.

The marriage between the two will create the country’s largest securities company.

The total number of employees of the new securities company would be about 3,200, and it will have assets of about 4.3 trillion won.

Both securities units recently streamlined their operations.

About 400 employees of Woori’s securities arm and 190 from Nonghyup’s have applied for early retirement.

Woori’s securities firm’s value is currently 10 percent of the group’s total assets.

“With the acquisition, the proportion of Nonghyup Bank’s share of the group’s business decrease to 67 percent from 77 percent, contributing to stabilizing the group’s business portfolio,” said a group official.

However, stock prices of both securities firms dipped yesterday.

The group will complete the necessary acquisition procedures by June 27.

After three unsuccessful attempts to privatize the country’s largest financial group, the FSC last year decided to split the group into three blocs and sell them separately.

Woori’s 14 subsidiaries were divided into regional banks, brokerage units and Woori Bank.

The group was established in 2001 as the country’s first financial group. The government formed the group by merging five struggling banks after the 1997 Asian financial crisis in order to strengthen financial industry competitiveness.

The state-run Korea Deposit Insurance Corporation holds nearly 57 percent of shares in the group, while the National Pension Service owns 5 percent and others, including the Capital Group, hold 38 percent. The government’s 57 percent ownership stake is estimated to be worth 5.5 trillion won.

Last month, Woori Financial Group was split into Woori Financial Group, KJB Financial Group and KNB Financial Group.

KJB refers to Kwangju Bank and KNB to Kyongnam Bank.

All three groups were relisted on the stock market May 22.

By song su-hyun[ssh@joongang.co.kr]

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