Election results could also be boon to KDB privatization, secondary banking sector


The ruling Saenuri Party’s winning of a majority in the National Assembly is expected to accelerate economic policymakers’ project for sale of public funds-injected Woori Financial Group.

There had been predictions that the stalled plan for Woori Financial privatization would not be feasible during the incumbent Lee Myung-bak administration.

Financial regulators seemingly welcomed the results of the April 11 parliamentary elections.

“For the finance sector, the policies of the governing party mostly coincide with those of financial regulators,” said an official of the Financial Services Commission.

FSC chairman Kim Seok-dong recently expressed his willingness to revitalize the Woori sale project in close coordination with the Public Fund Oversight Committee.

The six members of the PFOC, under the wing of the FSC, have discussed a variety of scenarios and preliminary steps before they unveil a fresh sale plan.

This marked the first time that the oversight committee has officially reviewed the Woori sale project since the new members were appointed to the post in September 2011.

Several months ago, some members of the National Policy Committee of the National Assembly called for the state-run Korea Deposit Insurance Corp. to report to the Assembly measures to recoup taxpayers’ money by accelerating the sale of the group.

Financial authorities had to suspend the sale twice ― in the second half of 2010 and the first half of 2011 ― as they failed to attract competitive investors.

The bidding price, which was projected to be too high, was one of the major hurdles under current laws.

The election outcome is also likely to be medicine for the nation’s other privatization plan to sell KDB Financial Group.

KDB Financial chairman Kang Man-soo has unveiled his policy to push for privatization via the group’s planned listing, or pushing for an initial public offering on the stock market.

The National Assembly should first approve the IPO process for the state-controlled financial firm.

The Saenuri Party’s victory is expected to give the nod to KDB’s project for the bourse listing in the coming months.

Early this year, Kang said the state-run financial group will sell 10 percent of the shares held by the government by the end of 2012. Public officials have already mapped out step-by-step procedures to sell government-stake in KDB Financial by 2014.

The FSC is also poised to take additional disciplinary action on the secondary banking sector.

Analysts forecast a group of debt-saddled savings banks will likely suffer business suspension by regulators later this month.

By Kim Yon-se (kys@heraldcorp.com)