Woori Card moving to stand alone again

Woori Financial Group’s project to launch a stand-alone credit card operation is drawing interest as financial regulators move to sell dominant shares of the state-owned group.

The financial group is scheduled to convene a board meeting this month to approve its plan to separate Woori Card from Woori Bank.

Though Woori Card had been an independent subsidiary of the group, the card issuer was taken over by Woori Bank in the wake of the 2002-2003 credit card fiasco.

Woori Financial made the project public on the stock market last April.

A review for the Financial Services Commission’s endorsement process is to follow, where a key issue could be the regulator’s coming policy over the privatization of Woori Financial.

“We had the target of launching the card business this December. But it is uncertain in the present stage,” a Woori spokesman said Wednesday.

Regulatory officials had put priority on selling the public funds-injected financial group, taking a wait-and-see or skeptical position on the group’s credit card spin-off plan.

But as the government-led privatization project has continued to face a bumpy road, there is a possibility that the FSC will give a nod to the group’s movement to expand the credit card business.

Apart from Woori Financial’s business plan, regulators plan to minimize unfavorable factors for the privatization through the coming on-site probe into the group’s headquarters, slated for late September or October.

The Financial Supervisory Service, an executive arm of the FSC, has started a preliminary inquiry on the financial group by instructing it to submit a variety of documents.

Among the nation’s four major financial groups, Woori is the last one subject to a regulatory investigation for this year.

The FSS conducted probes into KB Financial and Shinhan Financial in the first half and has also been inspecting Hana Financial.

Last year, Hana Financial Group spun off the Hana SK Card and launched new marketing activities in partnerships with several SK Group affiliates.

Last March, KB Financial Group launched the stand-alone credit card firm after the money-spinning unit was merged into the bank in 2003.

KB Kookmin Card is vying for second place in the local credit card market along with Samsung Card and Hyundai Card.

Shinhan Card, a subsidiary of Shinhan Financial Group, secured the No. 1 position after acquiring formerly debt-ridden LG Card.

According to industry sources, the National Agricultural Cooperative Federation and Korea Exchange Bank are also said to be mulling spin-offs.

The state-controlled Korea Development Bank and Korea Post are reportedly considering tapping into the card business, too.

By Kim Yon-se (kys@heraldcorp.com)