FSC seeks new sell-off options for Woori Bank

Financial Services Commission chairman Yim Jong-yong said on Thursday that the sell-off method for the state-run Woori Bank should be more diverse.

“The sell-off method must be diversified, unlike the old system that merely involves bridging the buyer and Woori for a certain amount of premium ― this is not desirable,” Yim said at a press luncheon in central Seoul.

After diversifying the sell-off option on market-based research, the agenda should be put to public discussion, Yim added.

The regulator pointed out that the four-time failure of Woori Bank’s sell-off has backfired, and led to degrading of Woori Bank’s market value and the continued negative preconceptions of the sell-off.

Underscoring that the Woori sell-off is open to all buyers, local or foreign, Yim confirmed that FSC Public Funds Management Committee Chairman Park Sang-yong is currently on a business trip to the Middle East. Park has arranged meetings with the Middle Eastern funds, to find out their market demands, Yim added.

“The Woori privatization will be strictly based on market demand,” he said.

In addition to the sell-off method, Yim attributed the repeated failure of the Woori sell-off to the bank’s relatively high bad loan slate.

“(For a successful sell-off,) Woori Bank’s undervalued share price must go up,” Yim said. “The share price should go up to at least 14,800 won ($13.50) per share to secure the principal,” he added.

Later that day, Woori Bank closed at 10,300 won per share, down 200 won, or 1.9 percent.

The FSC chief stressed that Woori’s current share price is not high enough even in the price-to-book ratio. He judged that Woori is facing market skepticism for its “relatively high insolvent loan rate and the non-performing loan rate.”

“Its bad loan slate is something that the bank itself should clench its fists and strive to come clean of,” Yim said.

By Chung Joo-won (joowonc@heraldcorp.com)