Woori hungry for more savings banks acquisitions

The lender plans to buy one to two additional savings banks to tap microcredit finance business.

Woori Financial Group said on Monday it plans to acquire more savings banks to diversify its business into microcredit finance. 

“We will acquire one to two additional savings banks,” Chairman Lee Pal-seung said in a speech during the inauguration ceremony of Woori FG Savings Bank in Samseong-dong, southern Seoul.

Woori FG Savings Bank was formerly Samhwa Mutual Savings Bank, which was bought by Woori Financial, the nation’s second biggest banking group by assets, after the savings bank was suspended for six months by the Financial Services Commission in January because of inadequate capital. 

“Woori Financial is currently focused on large corporate, small and mid-sized companies and households but by acquiring savings banks, we will be able to cover all types of customers by providing microcredit finance services.”

Large conglomerates and SMEs account for 60 percent to 70 percent of Woori Financial’s business while the rest is the retail sector. 

Lee said there should not have been concerns about large banking groups acquiring troubled savings banks. “The savings bank industry has total assets of around 70 trillion won ($62.8 billion) but Woori Financial’s savings bank unit’s assets grow to around 2 trillion ($1.82 billion) to 3 trillion ($2.72 billion) won, it would only account for around 3 to 5 percent of the total market share. A savings bank similarly sized to Samhwa Mutual Savings Bank or even bigger can also be acquired.”

View the full story in JoongAng Daily.