Business Expansion Expected
Woori Bank is applying for regulatory approval on June 19 to adopt a holding company system. The proposed holding company is expected to be established within this year. If the scheme is implemented as planned, the bank returns to a holding company system four years after it abolished it due to privatization.
According to investment banking (IB) industry sources on June 18, Woori Bank will hold a regular board of directors’ meeting on June 19 to approve the adoption of a holding company system. Following the meeting, it will submit a reorganization plan to the Financial Services Commission (FSC).
When Woori Bank receives approval from the FSC, it will hold an extraordinary meeting of shareholders to vote for the transition into a holding company. The convocation of a general meeting of stockholders takes 45 days so it needs to obtain approval by mid-November to launch the holding company within this year. When the conversion is complete, the holding company will get listed early next year.
Market experts say that the change is forecast to spark a round of mergers and acquisitions in the financial industry. This is because Woori Bank will see its capital increase from the current 700 billion won (US$634.64 million) to over 7 trillion won (US$6.35 billion) when it becomes a holding company. Under the Banking Act, a bank cannot invest more than 20 percent of its equity in other companies. Yet a financial holding company is not a subject to such a restriction. After Woori Bank adopts a holding company structure, it is expected to take over securities and asset management firms.