Woori Finance hunts for more savings banks

The lender seeks to merge them with Samhwa to nurture a consolidated savings bank with an asset size of up to US$2.7bn.

Woori Finance Holdings Co., South Korea's second-biggest banking group by assets, is seeking to buy one or two more savings banks after taking over a suspended savings bank last month, a high-ranking group official said Monday.

The state-run banking group is set to launch a new savings bank unit named Woori Finance Savings Bank this month after being selected last month to take over ailing Samhwa Mutual Savings Bank, whose operations were suspended by the financial watchdog in January.

"Woori Finance will seek to buy more savings banks and merge them with Samhwa in order to nurture a (consolidated) savings bank with an asset size of up to 2 or 3 trillion won (US$2.7 billion)," a high-ranking Woori Finance official said.

The Financial Services Commission (FSC), the financial regulator, is widening efforts to consolidate troubled savings banks and weed out unviable ones in order to restructure the savings bank sector, which is reeling from growing defaults on property-related loans.

The latest comments by the Woori Finance official came after the group chairman's push to beef up its savings bank operations in order to create a synergy with the banking group.

"The assets of Samhwa reached only 700 to 800 billion won ... and Woori Finance plans to buy one or two more savings banks that have a similar asset size," Chairman Lee Pal-Seung has previously said.

View the full story in Yonhap News.