Financial Services Commission to Conclude Woori Financial M&A as Early as May

Approval for Woori Financial Group's M&A Expected to Take at Least One Month
Final Decision Likely by May, Depending on Management Evaluation Rating
Financial Authorities Emphasize Thorough Review Over Expedited Process

Whether Woori Financial Group will acquire an insurance company is expected to be decided as early as early May. If the Financial Services Commission receives Woori Financial Group's management evaluation rating in March, it is anticipated that a conclusion will be reached by the end of May, considering the additional review period.

According to financial authorities on the 12th, the Financial Services Commission estimates that it will take at least one month to decide whether Woori Financial Group will acquire the insurance company. If the Financial Supervisory Service delivers the management evaluation rating to the Financial Services Commission as planned within this month, the approval decision could be made by early May.

An official familiar with Woori Financial Group's mergers and acquisitions (M&A) process said, "Once the Financial Supervisory Service delivers the management evaluation rating to the Financial Services Commission, about a month is needed to decide on approval," adding, "Considering the characteristics of financial company M&As, the financial authorities may request additional documents from Woori Financial, so the actual approval process might take a little longer."

Woori Financial Group submitted an application to the Financial Supervisory Service on January 15 to incorporate Dongyang Life and ABL Life as subsidiaries. The Financial Supervisory Service plans to determine the management evaluation rating by March. Afterwards, the Financial Services Commission will make the final decision on Woori Financial Group's M&A.

According to the Financial Holding Company Supervision Regulations, a financial holding company must receive a management evaluation rating of grade 2 or higher to incorporate a subsidiary. However, Article 10 of the Financial Holding Company Supervision Regulations by the Financial Supervisory Service states that 'even if the rating is below grade 2, if the Financial Supervisory Service recognizes that the company can achieve grade 2 or higher through capital increase or disposal of non-performing assets, the management condition is considered sound.'

Also, according to Article 16, Paragraph 3 of the Financial Holding Company Act, the Financial Services Commission may approve the incorporation of a subsidiary by a financial holding company with conditions such as improvement of management soundness. Woori Financial received a grade 3 rating when it acquired LG Investment & Securities in 2004. At that time, the financial authorities approved the incorporation of the subsidiary.

However, the Financial Services Commission has repeatedly emphasized that it will not rush and will review the M&A approval according to laws and procedures. This means they will not expedite the schedule considering the terms of Woori Financial Group's M&A contract.

In the M&A process, Woori Financial Group signed a contract stipulating that if it fails to complete the insurance company acquisition within 12 months and the multi-party insurance cancels the contract, the deposit equivalent to 10% of the total acquisition price (approximately 1.55 trillion KRW) can be forfeited. Since Woori Financial Group signed the stock purchase agreement with Dongyang Life and ABL Life on August 28 last year, it must obtain approval from the financial authorities by August. If the Financial Supervisory Service completes the management evaluation by March, there should be no scheduling issues.

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