Woori Financial Group Receives Grade 3 in Management Evaluation
Only 0.1 Points Lower Than 2021’s Grade 2
Summary of Legal and Administrative Conditions for Exception Approval
FSS to Submit Opinions to FSC by March
Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), stated that he will convey the FSS's opinions, including exceptions for insurance company acquisitions, to the Financial Services Commission (FSC) regarding the 3rd-grade result of Woori Financial Group's management evaluation.
On the morning of the 19th, Governor Lee held a press conference at the FSS office in Seoul and said, "We will promptly report the FSS's review opinions so that the FSC can make a balanced judgment regarding the approval of Woori Financial Group's subsidiary incorporation and related matters."
The FSS notified Woori Financial Group the day before that its comprehensive management evaluation grade was lowered from grade 2 to grade 3. This information was also conveyed to the FSC.
Governor Lee explained, "Woori Financial Group's grade is close to the 2021 management evaluation grade, with a difference of about 0.1 points," adding, "There was a concern that even minor downward factors could cause the grade to drop."
He said, "The approval for Woori Financial Group's subsidiary incorporation should be processed swiftly," and added, "We plan to deliver the FSS's opinions to the FSC within March."
The FSS is currently conducting a review for the approval of Woori Financial Group's subsidiary incorporation based on the management evaluation results. On January 15, Woori Financial Group submitted an application for subsidiary incorporation approval to the FSC, which then requested the FSS to conduct the incorporation review.
To verify the legal requirements for incorporation approval, the FSS conducted fact-finding inquiries, including management evaluation grades, with the Fair Trade Commission and the relevant inspection departments. Additionally, the FSS is reviewing supplementary materials submitted by Woori Financial Group, such as internal control improvement plans.
In principle, if a financial holding company's management evaluation result is below grade 2, acquiring subsidiaries is difficult. However, Article 10 of the FSS's Financial Holding Company Supervision Regulations states that "even if the grade is below 2, if the FSS recognizes that the company can correspond to grade 2 or higher through capital increase, disposal of non-performing assets, etc., the management condition is considered sound."
Governor Lee added, "Since I will participate as one of the financial commissioners in the FSC plenary meeting, I will assist to ensure that there is no conflict with the FSC's decision," and "I will also consider the development of Woori Financial Group and the insurance industry market."
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