[비즈한국] Woori Financial Group is investing across the board to expand its business footprint. Following its entry into the mergers and acquisitions (M&A) arena to acquire securities and insurance firms to bolster its non-banking sector, the group has also expanded into the budget phone (MVNO) business and the fourth internet-only bank. Attention is focused on whether Woori Financial, which is diversifying its business to enhance competitiveness, can narrow the gap with its peers and achieve tangible results.
Denial of 'Hanyang Securities001750 Acquisition Rumors', Market Keeps Watch for Additional Deals
Just two months after announcing the merger of Korea Foss Securities and Woori Investment Bank, Woori Financial has once again emerged as a potential candidate in a securities firm acquisition race. This time, it is Hanyang Securities, considered a 'hidden champion' in the sector. On the 15th, Hanyang Securities acknowledged the sale rumors, stating, "Our largest shareholder, the Hanyang Academy educational foundation, is pursuing the sale of its stake." However, Woori Financial stated on the same day that the acquisition of Hanyang Securities was "baseless" and that it had never pursued such a deal.
Although the company immediately denied the acquisition rumors, the market remains vigilant due to the scarcity of securities firms for sale in the M&A market. During the announcement of the Foss Securities merger last May, Woori Financial expressed its intent for further M&A, stating, "We will review additional M&A opportunities if a competitive target that aligns with the group's securities strategy emerges." Furthermore, as Woori Financial builds its vision to specialize in corporate finance (IB) and digital services, it has already secured digital capabilities through Foss Securities, which operates a 'fund supermarket' platform with 280,000 customers. This has led to speculation that the group may have had its eyes on Hanyang Securities, where the IB sector is a core revenue driver.
Woori Financial is pursuing M&As in multiple directions, including a foray into the insurance market. On June 27, the company announced, "We have signed a non-binding memorandum of understanding with the major shareholders of Tongyang Life Insurance082640 and ABL Life Insurance and are discussing their acquisition." However, the group seems cautious about overpaying. The day after announcing its intent to acquire the life insurers (June 28), the company revealed it would abandon its bid to acquire a stake in Lotte Insurance000400. In October 2023, it had also announced a review of the acquisition of Sangsangin Savings Bank, only to announce its withdrawal one month later.
Consequently, Woori Financial has been the most frequent issuer of "request for disclosure" notices among the four major financial holding companies (KB, Shinhan, Hana, and Woori) over the past five years. From 2019 to 2024, Woori Financial posted a total of 11 such notices, including those requested by and responded to the Korea Exchange. This is a notable figure compared to KB Financial's two notices, and zero for Shinhan and Hana Financial during the same period. A request for disclosure is a process for companies to verify rumors or reports that may affect stock prices; once requested by the exchange, a listed company must respond within one business day. These are often used to clarify large-scale corporate investments, M&As, or share disposals.
Budget Phone Business Upgraded from 'Team' to 'Department' for Full-scale Preparation
Subsidiaries are also pursuing new businesses and investments. In June, Woori Bank formalized its entry into the Mobile Virtual Network Operator (MVNO) business by partnering with LG Uplus. It is the first financial firm to enter the sector since the Financial Services Commission recognized KB Kookmin Bank’s MVNO business, 'Liiv M', as a permissible ancillary banking service on April 12.
A Woori Bank official stated, "To oversee the budget phone business, the existing 'MVNO Business Team' was upgraded to the 'Mobile Business Platform Department' following an organizational restructuring." Regarding the use of offline branches such as bank tellers, the official added, "We are still preparing for the business, so it is difficult to disclose detailed contents, but we are preparing for a non-face-to-face centered service."
In May, Woori Bank also became the first commercial bank to express its intent to invest in a fourth internet-only bank. It joined a consortium led by Korea Credit Data (KCD), which is preparing an internet bank targeting small business owners. KCD, which operates the small business management service 'Cashnote,' has a history with Woori Bank, having been selected for its startup incubation program in 2016 and receiving financial support. Additionally, on the 11th, Woori Card submitted a letter of intent to invest in the consortium, marking the second Woori Financial affiliate to join.
However, it is expected to take time for Woori Financial, currently ranked fourth among the four major holding companies, to narrow the gap with others through these new businesses. This is because its entries into these sectors are focused on small to medium-sized companies. In the securities industry, the group is undergoing a merger review by financial authorities for Foss Securities and Woori Investment Bank, aiming for a Q3 launch. Once merged, it will rank 18th in terms of equity (around 1.2 trillion won). For other holding companies, the gap is significant: as of the end of 2023, KB Securities ranked 5th (6.1572 trillion won), Hana Securities ranked 6th (5.7525 trillion won), and Shinhan Securities ranked 8th (5.2633 trillion won). This is why Woori Financial has set a '10-year horizon' for entering the top 10.
The life insurance market is dominated by a 'big three' system (Kyobo Life, Samsung Life, Hanwha Life) with a 50% market share, while 19 small and medium-sized/foreign firms share the rest. Tongyang Life and ABL Life, which Woori Financial is discussing for acquisition, are small to medium-sized firms; Tongyang Life's market share in insurance premiums is 4.3% (as of February), and ABL Life's is 2.5% (as of 2023). The structure makes it difficult to rise to the top tier of the industry in a short period.
Attention is also focused on whether sanctions against the core subsidiary, Woori Bank, due to financial accidents will impact its entry into new businesses. If a company receives severe disciplinary action of 'institutional warning' or higher, it cannot receive licenses or permits from financial authorities for one year. In January, Woori Bank received an institutional warning and fines for unauthorized use of personal information and violation of real-name verification obligations. Furthermore, sanctions regarding a 10 billion won embezzlement case remain pending. However, a financial industry official noted, "As M&As and investments are conducted at the group level, the impact is likely not significant."