Three financial firms owned by Woori Financial Group are expected to draw popularity in the mergers and acquisitions market, as financial authorities are set to resume the policy to privatize the state-funded group through a “split-sale” method this year.
When the privatization process is revitalized, possibly eye-catching subsidiaries of Woori Financial could be Woori Investment & Securities, Kyongnam Bank and Kwangju Bank, according to officials in the bank industry.
Their forecast comes as the Financial Services Commission is reportedly considering shifting its position to sell Woori Financial’s subsidiaries separately, from its earlier plan to push for a block deal.
A bank executive predicted that the possible sale plan on a split basis will be divided into three major parts: sale of the flagship Woori Bank, sale of the brokerage unit (Woori Investment & Securities) and sale of the two provincial banks (Kyongnam and Kwangju).
Under the scenario, big financial groups such as KB Financial and KDB Financial will likely vie for Woori Bank. The powerful investors could also seek to take over only Woori Investment & Securities in a bid to bolster the lucrative investment banking sector.
Separately, financial authorities may try to raise the sale price of South Gyeongsang Province-based Kyongnam Bank and South Jeolla Province-based Kwangju Bank by inducing heated competition among investors which seek to expand regional business channels.
The FSC had failed to woo appropriate investors with huge funds several times under the earlier plan for a block deal, as the authorities sought to retrieve taxpayers’ money that had been injected into Woori Financial.
The FSC is scheduled to report its revised plan to the presidential transition team on Tuesday, but details over the revision are likely to be fine-tuned by the coming Park Geun-hye administration.
In addition, the government’s recent decision to exclude KDB Financial Group from the list of public corporations has paved the way for the lender to speed up its privatization.
A year ago, the Finance Ministry took the state-run financial group off the yearly list of public agencies. But the government’s policy, which has essentially allowed KDB Financial to push for a stake sale, is drawing mixed reactions from the market.
The plan includes a 30 percent stake sale by 2013 and the remaining 40 percent by 2014. The Korea Finance Corp. is the majority shareholder of KDB Financial.
By Kim Yon-se (
kys@heraldcorp.com)
