[Financial Microscope] "Dedicated Exclusively to New Corporate Business"... Woori Bank Corporate Group's Most Trusted Team

Dedicated SME Lending Organization 'BIZ Prime Center'
Exclusively Focused on New Business... Consolidating Manpower
Sales Targets Lowered as Part of Strengthened Internal Controls
Confidence That the BIZ Prime Center Can Drive Performance

Banking operations are largely divided into retail and corporate sectors. In terms of scale, the retail sector, which handles products such as mortgage loans, accounts for a larger portion. However, a bank's true business capabilities are determined in the corporate sector. For this reason, corporate lending is often referred to as an invisible battleground. Woori Bank stands out in the field of corporate lending, earning recognition for leading the market in every aspect, including corporate lending strategies, manpower, and risk management.

First Specialized Branch in the Banking Sector: "Focusing Exclusively on New Business"

In 2023, Woori Bank's Corporate Group established a new strategy for corporate lending. This decision was based on the recognition that the existing system?where branch managers both manage existing clients and handle new business?had its limitations. As part of this initiative, the 'BIZ Prime Center' was created. The first branch opened in July 2023 in the Banwol·Siwha National Industrial Complex (in western Gyeonggi Province), followed by additional branches in the same year in the Namdong National Industrial Complex (Incheon), and the Changwon·Noksan National Industrial Complexes (Changwon and western Busan). This year, the Dogok BIZPrime Center and others were added, expanding the number of centers to 12 over two years.

The BIZ Prime Center is dedicated solely to new business. It assigns veteran corporate relationship managers (RMs) and private bankers (PBs) to these centers. Each center employs between three and ten RM branch managers with proven track records, supported by high-performing RMs who focus exclusively on acquiring new corporate lending clients. A Woori Bank official stated, "Many of the most capable new hires are recruited into the Corporate Group's BIZ Prime Center as they gain experience. Conversely, some high-performing employees who are eager for promotion also volunteer to become RMs at the BIZ Prime Center."

The results have been remarkable. The first branch, Banwol·Siwha, secured 260 new corporate clients within its first year. As of April this year, it had acquired 63 new companies. The transaction volume reportedly surpassed KRW 100 billion. The strategy of deploying RMs directly into industrial complexes, where companies are concentrated, to provide rapid corporate finance support has proven effective.

Within Woori Bank, the role of the BIZ Prime Center has become even more significant. This year, the center is responsible for driving the bank's overall performance. With the implementation of the third phase of the stress-based Debt Service Ratio (DSR) on July 1, the burden of household lending has increased, making the operations of the Corporate Group more important.

When looking at corporate loans across banks, most rely heavily on large corporations. Last month, 71% of the increase in corporate lending by domestic banks (KRW 6.0695 trillion) went to large corporations. During the same period, loans to small and medium-sized enterprises (excluding individual business owners) increased by KRW 1.3856 trillion compared to the previous month. This is less than half the increase recorded in the same period last year (KRW 3.3481 trillion). This underscores the growing importance of the BIZ Prime Center, which is dedicated exclusively to new business with SMEs.

As Woori Bank began to show results in new business across major regions nationwide, Industrial Bank of Korea (IBK) also adopted a similar approach. IBK launched "Strategic Sales Centers" under its "outreach sales" strategy and is currently supporting quality SMEs through eight branches. Shinhan Bank has also established the "Shinhan SOL Cluster" to support specialized industries such as semiconductors.

Sales Handled by BIZ Prime Center, Internal Controls Strengthened at Woori Bank

Considering Woori Bank's internal control policies, the burden on the BIZ Prime Center has increased further. President Jung Jinwan has reduced the sales targets assigned to regular employees?including credit card and loan targets?by about 30% compared to previous years as part of efforts to strengthen internal controls. This means the sales burden on the BIZ Prime Center has grown accordingly.

In fact, President Jung reportedly responded to concerns about a potential decline in sales by stating, "As long as the branch managers and RMs at the Corporate Group's specialized branches perform well, sales will be fine." This demonstrates the high level of trust placed in the BIZ Prime Center.

In response, the Corporate Group has already begun to shift its strategy. Based on the sales capabilities of the BIZ Prime Center, the bank plans to significantly reduce its proportion of real estate leasing business this year. Instead, it will expand corporate lending in manufacturing sectors such as advanced industries. The rationale is that increasing loans to new growth industries?which drive growth and create jobs?will have a greater ripple effect on the overall economy. Such a move would not be possible without strong confidence in corporate lending operations.

Looking at the breakdown of corporate lending by industry at major banks, real estate leasing accounts for less than 30%. In contrast, Woori Bank's share reached as high as 35% during real estate booms. A senior Woori Bank official explained, "If we reduce the proportion of real estate loans too quickly, leasing companies would be severely impacted, so we plan to gradually bring it down to the low 30% range. Since the government is also supporting advanced strategic industries, we plan to expand SME loans to new growth manufacturing sectors such as semiconductors, defense, and advanced machinery, in proportion to the reduction in leasing business."

In particular, the bank is actively preparing loan programs that take into account the entire manufacturing ecosystem, such as linked loans for large corporations and SMEs. Through this year's organizational restructuring, Woori Bank's Corporate Group now covers both large corporations and SMEs. The senior official added, "Since large corporations and SMEs have different interests and perspectives, they used to compete for loans. However, by reorganizing into a single group, we can now provide more efficient financial support, including financial programs targeting both large corporations and their vendors."