New Woori Bank leader expands sales unit
Woori Bank is moving to enhance its sales capability under the new leadership of CEO Lee Won-duk, conducting a major organizational reshuffle with a focus on expanding commission revenues.
Lee took office as the new leader of the banking arm of Woori Financial Group last week. With the banking arm elevating the status of key sales units recently, expectations are that the lender will engage in more aggressive sales expansion under the twoyear tenure of Lee.
The strategy is aimed at maximizing the lender’s profitability this year, after the group completed its long-awaited privatization in November. The reshuffle was centered on promoting three unit-level divisions of real estate finance, foreign exchange, and investment product strategy into groups.
The decision reflects Lee’s strong willingness to reap more commission profits from the key sales groups. Woori’s commission revenue reached 979.3 billion won in 2021, up 2.8 percent from the previous year, but this still falls behind its rivals such as KB and Shinhan.
Woori expects the strategy to help it reduce reliance on loan-to-deposit margins on a longer-term viewpoint. Lee’s predecessor Kwon Kwang-seok also sought to strengthen non-interest revenues during his term.
With President-elect Yoon Suk-yeol considering mandating commercial banks to notify customers of their deposit and loan interest details each month, banks are speeding up their searches for fresh revenue areas and ways to reap more commission-related earnings.
Even if nothing has been confirmed over when the regulation will take effect, this is widely expected to come as a bane to banks, as the introduction of the rule would restrict their sales activities in the lucrative lending business.
“Banks will have to remain more aggressive in finding new revenue areas down the road, as the interest-focused profit structure is expected to emerge as a major target for criticism from the incoming administration, even if there is nothing wrong with the business model,” an industry source said.
Lenders will, therefore, put more efforts in cutting unnecessary costs by such measures as shutting down less lucrative sales offices, while at the same time increasing investment in emerging areas such as digital platforms which are seeing their influence on the gradual rise, the source added.