Woori Financial Takes over Woori Card from Woori Bank

Woori Bank will sell a 4 percent stake in its parent Woori Financial Group Inc. to Fubon Life Insurance of Taiwan.

Woori Bank, a major South Korean commercial lender, will sell a 4 percent stake in its parent Woori Financial Group Inc. to a strategic investor. The bank acquired a 5.8 percent stake in Woori Financial earlier this month in exchange for handing over its stake in Woori Card to the parent company.

Woori Financial announced on Sept. 25 that its commercial banking subsidiary Woori Bank will sell a 4 percent stake in it to Fubon Life Insurance, the insurance unit of Taiwan's Fubon Financial Holding, through a block deal before the stock market opens on Sept. 26.

Woori Bank acquired the 5.8 stake in its parent company, which is valued at 12,350 won (US$10.30) per share, plus 600 billion won (US$500.50 million) cash in return for handing over a 100 percent stake in Woori Card to Woori Financial on Sept. 10.

However, Woori Bank had to sell off the stake within six months. Under the current Financial Holding Company Act in South Korea, banks are banned from owning a stake in a financial holding company and are required to sell the stake within six months after acquiring it. The latest deal is expected to address the overhang issue which has dragged down the price of Woori Financial shares.

A Woori Financial official said, “With the latest deal, we can now attract foreign long-term investors. Woori Financial, which was officially launched this year, has won investors’ trust by improving business performance and raised expectations for a further rise in corporate value as it can expand its business in the non-banking sector in the future.”

Woori Bank will also focus on selling the remaining 1.8 percent stake in Woori Financial. The bank has to sell it by early March next year. Woori Financial is seeking ways to draw investment from sovereign wealth funds in Middle East and is planning to hold an IR for medium and long-term investors in Europe and North America in October. Based on these, the group hopes to sell the remaining stake as soon as possible.

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