Woori to Sell Brokerage, Assets to NH Financial for $1 Billion

Woori Finance (053000) Holdings Co. agreed to sell stakes in its brokerage unit and two other assets to NH Financial Group Inc. for 1.04 trillion won ($1 billion) as part of the privatization of South Korea’s biggest banking group.

The board decided today to sell the 38 percent stake in Woori Investment & Securities Co., the nation’s biggest brokerage by assets, for 946.7 billion won by June, according to a regulatory filing. The Seoul-based company will also sell its savings bank for 56.5 billion won and its 52 percent holding in a life insurer for 35.3 billion won.

Woori Finance, formed from a bailout more than a decade ago, is offloading units to help the government recoup public funds. Closely held NH Financial was named as the preferred bidder for the package of assets in December. Buying Woori Investment (005940) may allow the Seoul-based firm to shift away from banking at a time when profits in that industry are declining.

Shares of Woori Finance fell 2 percent to 12,350 won today in Seoul, compared with the benchmark Kospi index’s 0.6 percent drop. Woori Investment lost 0.9 percent to 9,250 won.

The total sale will amount to 1.07 trillion won, with Woori Finance to be paid 1.04 trillion won and the remainder to go to Aviva Plc, which is selling its 47 percent stake in the life insurer, two people with knowledge of the matter said earlier today.

Book Value

The 38 percent stake in the brokerage had a book value of 953.2 billion won and holdings in the two other firms were worth 90 billion won in total as of December, filings show.

Woori Finance sold its capital unit to KB Financial Group Inc. last month. Kiwoom Securities Co. purchased its asset management arm and its distressed-asset trading unit was sold to Daishin Securities Co.

Woori is waiting for lawmakers to pass a bill enabling the sale of its two regional lenders. In December, BS Financial Group Inc. was named as the preferred bidder for Kyongnam Bank and JB Financial Group Co. was chosen to bid for Kwangju Bank.

The government wants to disclose a detailed plan by June for the sale of Woori Bank, the nation’s second-biggest lender by assets, Financial Services Commission Chairman Shin Je Yoon has said.

Park Sang Yong, chairman of the Public Fund Oversight Committee, which is overseeing the privatization, said last month that South Korea is open to all options for that sale.

To contact the reporter on this story: Seonjin Cha in Seoul at scha2@bloomberg.net

To contact the editors responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net Russell Ward, Darren Boey

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