South Korea’s Government Aims to Sell Woori Bank by End of 2014

South Korea’s government aims to sell Woori Finance Holdings Co.’s main banking unit by the end of 2014 after it failed three times to offload its 57 percent stake in the country’s biggest financial group by assets.

“We will try to designate a new owner of Woori Bank” by the end of next year, Financial Services Commission Chairman Shin Je Yoon told reporters on June 1, according to pool reports e-mailed from the state agency yesterday. Authorities are open to an option to sell Woori Finance’s units “in pieces,” he said.

The government is reviving plans to sell its 5.5 trillion won ($4.9 billion) stake in Woori Finance after it received no bidders for its stake in the company last year in the third sale attempt since 2010. The Public Fund Oversight Committee, which oversees sales of state assets, is studying all possible options to sell Woori Finance and will announce details by the end of this month, Shin said.

Woori Finance was created in 2001 as a holding company for lenders rescued by the government following the Asian financial crisis in 1997-1998, as part of a push to make the banking industry more competitive. The holding company contains Woori Bank, Kwangju Bank, Kyongnam Bank, and Woori Credit Card, according to Bloomberg data.

BS Financial Group Inc., whose units include Busan Bank, is interested in acquiring Woori Finance’s Kyongnam Bank unit, Moon Kyung Ho, general manager of BS Financial’s strategy planning division, said in an interview with Bloomberg News in May.

The government may sell provincial banks owned by Woori Finance to the bidders who offer “the highest price,” Shin said.

Shares of Woori Finance fell 2.1 percent to 11,950 won on May 31, paring their gains for the year to 1.3 percent. That still exceeds the 0.2 percent advance in the benchmark Kospi index in the same period.

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