Dram Man: Woori At It Again

Tuesday, January 24, 2006

Woori At It Again

For some time Woori Bank has been under fire for its name. "Woori" means "our", and "our bank", especially considering Korean social and linguistic habits, can create much confusion. Well now the bank is selling its self as a "Native Bank", and as you can tell selling patriotism. The bank's president froths with nationalistic fervor unseen since the first signs of the Hwang disaster:

Hwang Young-key, the head of Woori Finance Holdings and its flagship Woori Bank, defined a native bank as a "bank in which Koreans have more than a 50-percent stake and that is managed by Koreans." "Other banks," he said proudly, "although they are managed by Koreans, are not native banks because the majority of their shares are owned by foreigners."

Mr. Hwang, in a speech to employees last month, added fuel to the fire. "When a customer pays a service fee to our bank," he said, "88 percent of the fee goes back to Koreans, but the same fee paid to other banks flows overseas based on the foreign investors' shares in the banks."

Mr. Hwang made his point even more clearly in a speech to his senior bank managers on Jan. 14. "The problems caused by the increasing share of foreign capital in the local financial market have come into focus, highlighting the importance of the presence and social obligation of native banks in the nation's economy," he said in a statement issued by Woori the day after that speech.

"The ownership and management of our bank qualifies us as a native bank, but we must fulfill our obligation of helping the economy," the statement quoted Mr. Hwang as saying.

One could say this is a publicity stunt, what bothers me however is Woori is the last large bank owned by the Korean government. Is this a position held by the government? What kind of sign does this send as they encourage finance companies to buy into the "hub" idea? We also have to point out the obvious, the only reason why Woori is a "native bank" is its management balance sheet is so bad that its was the ugly girl at the foreign acquisition ball. I mean who could forget a few years ago when Woori was giddy as a school girl when HSBC looked at her?

Dram Man

Tuesday, January 24, 2006

Woori At It Again

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