Woori Financial Group, South Korea’s fourth-largest financial conglomerate, is set to bolster its wealth management services for affluent clients, as confirmed by its chairman. This decision comes amidst increasing controversies surrounding local banks’ involvement in high-risk financial product sales. Chairman Yim Jong-yong, in a recent address to bankers at Woori Financial’s private banking center in Seoul’s upscale Gangnam district, underscored the centrality of trust and reliability in banking services.
The group’s dedicated wealth management center, named Two Chairs Exclusive (TCE) Center in Gangnam, caters to super-rich clients, each possessing assets over 1 billion won ($750,000). This center alone manages funds approximately worth 1 trillion won.
Yim announced an ambitious plan to widen the financial group’s footprint in the wealth management sector both domestically and internationally. This move aims to position Woori Bank on par with its larger rivals. Over the next three years, Woori Bank plans to establish 10 wealth management-focused banks throughout Korea, including in Seoul, Busan, and Daegu. This expansion is notable against the backdrop of a trend towards digitalization and the closure of traditional brick-and-mortar banks.
Despite the Korean financial industry currently being mired in a misselling controversy with equity-linked securities (ELS), Yim emphasized the importance of rebuilding client trust. He noted that Woori Bank, unlike five other banks under the Financial Supervisory Service’s (FSS) scrutiny, is not a major seller of the controversial HSCEI-tied ELS products.
Yim highlighted that following a lesson learned from its previous negligent sale of high-risk derivative-linked funds (DLFs), Woori Bank has implemented stringent guidelines to limit its sale of HSCEI ELS products to only 5% of its total equity-linked trust (ELT) sales. He called on private bankers to uphold high moral standards and robust internal control guidelines to maintain credibility in the face of industry challenges.
