Woori Financial Holdings chairman Lee Pal-sung's New Year’s address on January 2
“Both the absolute majority of market participants and the Korean government are well aware of the necessity of the goal,” chairman Lee said, adding, “Our shots at it in 2010 and 2011, though not that successful, were meaningful.” He went on to say that his company, despite unfavorable market conditions, is ready and willing to make another attempt this year in the framework of current law and regulations.
According to Lee, Woori Finance’s trump card in achieving the goal is to grow its non-banking sector and make a fundamental corporate structural reform. In this context, he revealed that the disposal of distressed assets and the spin-off of the credit card arm need to be wrapped up before the end of 2012, allowing its non-banking business units to make some improvements in terms of profitability and market presence.
“This year, credit risks on small and mid-size enterprise (SME) and households are likely to increase, and therefore we will strengthen our preemptive risk management. I’m convinced this will help other sectors that are lagging behind our rivals, make themselves more competitive down the road,” he said.
The chairman went on, “In particular, the credit card business is different from the traditional banking business in nature. We will have to get the task of incorporation done successfully because that is the way to enhance cooperation.”
During his speech, he also emphasized the need for global market penetration. “As is well known, the domestic market is saturated, limiting further growth. Woori Financial Group, taking the 72nd spot worldwide, is by no means a global player, and I believe that now is the time for us to expand overseas by concentrating more on the management of foreign assets and liabilities, and dealing better with global financial uncertainties and volatility.”
Meanwhile, Woori Bank President Lee Sun-woo announced in a recent interview that the bank will lend more assistance to local SMEs in order to help them in such fast-deteriorating business environments. “The financial industry of a country can thrive only when its business world flourishes. I will continue to listen to entrepreneurs and strive to be of assistance,” he stated. The president referred to a lending rate cut, business consulting support, and borrowing structure diversification as some of the concrete measures, as well as an additional bank charge reduction for individual customers.
He was rather conservative about the business outlook for this year. “Our growth target is set at 7%, and there is no guarantee as of now that we will attain it with ease. Our net profit is likely to decrease a little from the all-time high two trillion won of 2011,” he said, adding, “Our focus this year is laid on the improvement of asset soundness. We will uproot wrong practices such as credit concentration so as to enhance our risk management capabilities.”
When it comes to the household loan rate, he predicts a slight year-on-year decline due to the reform of the interest rate structure, characterized by the introduction of the Korea Inter-bank Offered Rate (KORIBOR). “We are mulling over providing savings bank products through our branches. Relevant decisions will be made with prudence following discussions with financial authorities,” he added in regards to the sales activities of savings banks.