Woori Financial to Resume Sale of Remaining Shares Soon... Aiming for 'Complete Privatization' by 2022 (Comprehensive)

Government Begins Preliminary Work for Remaining Stake Sale
Creating Favorable Environment for Stake Sale Including Stock Price Increase

[Asia Economy Reporter Kim Jin-ho] The complete privatization (share sale) of Woori Financial Group is expected to accelerate in the second half of this year. This is due to a favorable environment for the stock price, driven by domestic and international interest rate hikes, second-quarter earnings, and interim dividend prospects. Accordingly, there are expectations that the Korea Deposit Insurance Corporation's remaining stake (15.25%) could be sold as early as September.

According to the financial sector on the 20th, the KDIC plans to sell all remaining shares in 2 to 3 rounds from the second half of this year through the end of next year, following the "Woori Financial sale roadmap." After the 2% sale in April and the lifting of the lock-up period on the remaining shares held by KDIC on the 10th, it is reported that preliminary work for additional share sales is currently underway.

The government intends to first promote the sale of the remaining shares to existing major shareholders such as IMM Private Equity. At the same time, it plans to seek new investors interested in investing. A financial sector official said, "KDIC is steadily conducting preliminary demand surveys (tapping) for the share sale," adding, "Considering the government's privatization roadmap, there is talk that additional sales could take place as early as September."

The necessity of cooperation with overseas investment banks (IBs) also increases the likelihood of a sale in September. Since it is essential to attract new investors who can acquire large stakes in a way that minimizes impact on the stock price, KDIC is maintaining close cooperation with overseas IBs. However, as overseas IBs tend to be less active during the July-August vacation season, additional sales are expected to occur no earlier than September.

The share sale process for Woori Financial's privatization had been sluggish over the past two years amid the COVID-19 situation. However, various conditions, including the stock price, have rapidly improved this year, raising market expectations significantly.

Woori Financial's stock price was 11,300 KRW as of the previous trading day, up 18.9% compared to 9,510 KRW on January 4 this year. It is approaching the KDIC's principal recovery price (about 12,000 KRW). With growing signals of interest rate hikes in Korea and the U.S., the bank stock Woori Financial has considerable room for further gains in the second half of the year.

Additionally, the second-quarter earnings and the possibility of an interim dividend announcement on the 21st are also seen as positive factors for the stock price. According to financial information provider FnGuide, Woori Financial's second-quarter net profit is expected to be 662.8 billion KRW, significantly exceeding market consensus. Expectations for an interim dividend are also rising amid record-breaking strong performance. In fact, Hyundai Motor Securities recently raised its target stock price to 14,500 KRW, forecasting this year as the "turnaround year" for Woori Financial's performance.

Another financial sector official said, "(The sale of remaining shares) involves many factors to consider comprehensively, such as supply and demand, but the rise in stock price is definitely a favorable environmental factor."

This content was produced with the assistance of AI translation services.