Woori Bank confirmed plans to convert itself into a holding company by early 2019.
The South Korean bank said in a filing that the move aims to help improve management efficiency and diversify its business portfolio.
The establishment of a holding company will allow the lender to bypass regulations preventing local banks from investing more than 20% of their assets into other units, Yonhap News Agency reported. By converting itself into a holding company, Woori Bank will be able to invest in other businesses, such as securities, asset management and real estate trust, which could raise its value.
Woori Bank's holding company plan requires approval from its board of directors, the Financial Services Commission and shareholders, including the government, which still owns an 18.5% stake in the once nationalized bank.
Meanwhile, Financial Services Commission Chairman Choi Jong-ku said the government will sell its stake in Woori Bank after the bank's planned conversion to a holding company structure, Yonhap News Agency reported. Woori Bank may set up a holding company in six or seven months, Choi added.
The company is the only commercial bank in the country that has not transformed itself into a holding firm due to delays in the government's plan to sell and privatize the lender.