Woori Financial acquires Korea Foss Securities to offer brokerage services

Woori Financial Group Inc., South Korea’s fourth-largest financial services group, has acquired Korea Foss Securities Co., paving the way for its reentry into the domestic brokerage services market a decade after it pulled out of it.

Woori Financial approved the acquisition at a board meeting on Friday.

Korea Foss Securities will be merged with Woori Investment Bank to create Korea’s 18th-largest securities firm in terms of capital, company officials said.

Woori has been the only financial services firm among financial majors in Korea without a brokerage service unit in the last 10 years.

Back in 2014, it sold then Woori Investment & Securities Co. to NongHyup Financial Group, which renamed it NH Investment & Securities Co.

Woori said its new brokerage entity will launch in the third quarter after obtaining necessary approvals from the Financial Services Commission.

In recent years, Woori Financial Group has been pursuing an acquisition of a local brokerage firm to strengthen its non-banking business.

Established as Fund Online Korea in 2013, Korea Foss Securities is Korea’s largest online fund platform, offering some 3,700 financial products with 280,000 clients and 6.5 trillion won ($ 4.8 billion) in client funds. It sells financial products through its Fund Supermarket platform.

Woori acquired Korea Foss Securities from Korea Securities Finance Corp., which owns a 51.68% stake in the online brokerage firm. The deal’s value wasn't revealed.

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Woori Financial said it will foster the merged entity as a leading brokerage and investment bank.

"With this acquisition, we will offer a variety of financial services from venture capital, banking, securities, asset management, PE (private equity) and F&I (finance and insurance)," said Lee Jung-soo, vice president of strategy at Woori Financial Group.

“With our groupwide support, we may also seek additional M&As to grow our new brokerage unit into one of the top 10 investment banking units within a decade,” he said.

Woori has been pursuing non-organic growth through M&As, including the acquisition of Daol Investment Co., a domestic venture capital firm, last year.

Woori Financial Group Chief Executive and Chairman Yim Jong-yong said in January that the group will bolster its private banking services to improve profitability.

Write to Bo-Hyung Kim at kph21c@hankyung.com

In-Soo Nam edited this article.