Woori bid to buy U.S. lender fails

Woori Finance Holdings Co.’s deal to buy a Los Angeles-based bank has fallen through due to regulatory hurdles, sources said Thursday, casting a shadow on its ambition to strengthen its footing in the United States.

In May last year, Woori Finance, Korea’s No. 2 banking group, agreed to buy a controlling stake in Hanmi Bank, the flagship of Hanmi Financial Corp., for $240 million in a bid to expand its presence in the world’s largest economy.

“Woori Finance and Hanmi Bank terminated the deal after Woori America Bank failed to meet a set of management guidelines needed to win U.S. regulatory approval,” said a high-ranking official at the banking group.

Woori America Bank is the wholly owned American unit of Woori Bank, the flagship of state-owned Woori Finance.

The official said Woori Finance will strive to qualify for the regulatory guidelines as early as possible, without giving a specific timeline. The banking group’s strategy to boost its profile in western America remains unchanged, he added.

Meanwhile, Woori Finance and Hanmi Financial forged a strategic alliance agreement on Wednesday, which will allow the two financial groups to cooperate across a number of areas, including international trade finance and VIP customer services.

“The business alliance between Hanmi and Woori, which is one of Korea’s largest financial institutions, should benefit both parties in our mutual efforts to expand our ongoing business relationship,”

Hanmi President and CEO J.S. Yoo said in a press release.

Shares of Woori Finance were trading at 13,000 won (US$12) as of 10:40 a.m., down 1.52 percent from Wednesday’s close.

The state-owned banking group is also facing hurdles to its privatization after the country’s top financial regulator said it is undesirable for KDB Financial Group Inc., another policy lender and a prospective buyer, to acquire the government’s 56.97 percent stake in Woori Finance. 

(Yonhap News)