Settings

ⓕ font-size

  • -2
  • -1
  • 0
  • +1
  • +2

Woori Financial considers acquiring venture capital

  • Facebook share button
  • Twitter share button
  • Kakao share button
  • Mail share button
  • Link share button
By Anna J. Park

Woori Financial Group headquarters in central Seoul / Courtesy of Woori Financial Group /
Woori Financial Group headquarters in central Seoul / Courtesy of Woori Financial Group /
As Woori Financial Group is the only financial group out of the country's top five ― alongside Shinhan, Hana, KB and NongHyup ― without its own brokerage unit, the group has been aiming to acquire a securities firm to maximize its profit structure.

However, as the brokerage sector is enjoying an unprecedented boom amid excessive liquidity and investors' aggressive entry into the stock market, Woori's plan to purchase a brokerage company has become less likely to be realized due to a lack of brokerage firms up for sale. It also doesn't appear that any securities firms would be in the market for an M&A in the near future.

From that standpoint, market insiders of the financial industry have been estimating Woori has shifted its strategy to acquire venture capital firms as a more feasible and realistic "Plan B" option to diversify its business platforms.

Not only is Woori the only major financial giant without a brokerage unit, but it also is the only major financial group that does not have a VC affiliate under its control. The banking group's affiliates Woori Bank, Woori Investment Bank and Woori Private Equity Asset Management have been operating their own venture capital departments.

Yet Woori's need for such an exclusive arm still exists, especially given that Shinhan Financial Group acquired Doosan's unit Neoplux in September. KB Financial Group owns KB Investment as its arm, while Hana Financial Group has Hana Ventures and NH Group has NH Venture Investment.

Leading financial groups have operated these affiliates, as they could yield unexpected substantial profits along with creating synergy by bringing in necessary tech-related innovations to the groups themselves. Making active investments in various local innovative tech companies in materials, components, equipment and new energy are also in line with the government's medium- and long-term plan to boost these industries.

Woori Financial Group's official did not deny the possibility of a future acquisition of a venture company, but said the group currently has no specific plans.

"In terms of medium- and long-term plans, Woori Financial Group is seeking to diversify its profit structures by expanding non-bank areas, such as brokerage, insurance and venture capital," the official said by telephone. "It's true that the group is considering a possible M&A of brokerage, insurance and venture firms in the long-term perspective, but nothing's decided as of now. In addition, not many are on the market for sale."

Woori Financial Group used to have a top-tier brokerage arm until 2014, when it sold its stake to NH group due to the government's plan to retrieve public funds poured into debt-ridden financial institutions back in 2002. With the selling, Woori Financial Group was broken down to simply Woori Bank. After four years, Woori Financial Group was reborn again in 2019 as an attempt to complete privatization of the group by 2022. The state-run Korea Deposit Insurance Corporation still owns 17.25 percent of Woori group shares.


Park Ji-won annajpark@koreatimes.co.kr


X
CLOSE

Top 10 Stories

go top LETTER