Woori's privatization momentum picks up steam on stock growth

Woori's privatization momentum picks up steam on stock growth

By Anna J. Park

Woori Financial Group’s stock price is showing upward movement, reflecting investors’ positive expectations over its favorable performance in the third quarter.

The financial group’s stock finished at 11,800 won ($10.44), a 0.84 percent drop from the previous session. The stock price hit a 52-week high of 12,050 won at 9:10 a.m. Thursday during the session, yet it fell slightly during the rest of the day’s trading, finishing at 11,800 won.

Although the stock got a little bearish during Thursday’s session, its price has been on a gradual upward trend, despite fluctuations, increasing by nearly 20 percent during the past three months. Market analysts believe that the financial group’s solid performance outlook is reflected in the rising price.

“The second quarter’s net profit is expected to be a lot higher than the market consensus, as Woori Financial Group is estimated to log 681 billion won of quarterly net profit, a 378 percent increase from the same quarter last year,” said Choi Jung-wook, analyst at Hana Financial Investment, explaining that its net interest margin (NIM) is forecast to grow further.

“The entire net profit for this year is expected to be around 2.1 trillion won, a 57.3 percent jump from the previous year,” the analyst said.

The stock’s dividends per share is also expected to double to around 700 won per share, which is nearly double that of last year’s 360 won per share. The expected dividend rate ― the ratio that shows how much a company pays out in dividends relative to its stock price ― exceeds 6 percent.

Market watchers also believe the financial giant could acquire a brokerage company after the third quarter, in order to expand its non-banking business portfolio.

With such a rosy outlook, the state-run Korea Deposit Insurance Corporation (KDIC) is expected to sell Woori Financial Group equities that it has owned for decades this summer, as part of the government’s plan to complete the privatization of the financial giant by 2022.

Despite the KDIC’s block sale of 2 percent of Woori Financial shares in April, the state-run organization still owns 15.25 percent of the financial group’s shares. According to the government’s roadmap, the KDIC plans to sell the entire amount of its shares in Woori Financial by next year.

The government injected a whopping 12.7 trillion won into the financial group to save it from the Asian financial crisis in the late 1990s. While nearly 90 percent of the public money has been retrieved during the past two decades, the remaining amount ― 1.3 trillion won ― is expected to be collected through selling the KDIC’s Woori shares.

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