Woori Financial Group: 15min chart triggers KDJ Golden Cross, bullish Marubozu signal.

Woori Financial Group's 15-minute chart has recently exhibited a KDJ Golden Cross, accompanied by a Bullish Marubozu pattern on May 2, 2023, at 13:45. This technical indicator suggests that the momentum of the stock price is shifting in favor of an upward trajectory, with potential for further gains. The dominance of buyers in the market indicates a strong bullish momentum that is likely to persist.

Woori Financial Group Inc., South Korea’s fourth-largest financial services provider, has received conditional approval from the country’s top financial regulator, the Financial Services Commission (FSC), to acquire Tongyang Life Insurance Co. and ABL Life Insurance Co. [1]. This acquisition will significantly expand Woori’s footprint in the non-banking sector and bring the financial group’s total assets closer to 600 trillion won ($427 billion).

The FSC gave the green light after an eight-month review following Woori’s signing of a share purchase agreement in a 1.55 trillion won deal with China’s Dajia Insurance Group Co. last August. The deal marks a key step in Woori’s broader strategy to diversify its portfolio from a heavy reliance on its core banking operations into the non-banking business [1].

The conditional approval comes with three requirements: strengthened internal audit and controls, improved corporate governance, and a restructured financial framework. Despite regulatory headwinds, including a downgrade in Woori’s management rating by the Financial Supervisory Service (FSS), the FSC has conditionally approved the deal [1].

The acquisition of Tongyang and ABL Life Insurance is expected to push Woori Financial Group into the upper echelons of Korea’s financial sector by asset size. With Woori Financial’s assets standing at 525 trillion won at the end of last year, plus Tongyang Life and ABL Life together bringing about 52 trillion won in assets, the deal will significantly boost the group’s overall asset value [1].

The move also marks a full-circle moment for Woori Chief Executive and Chairman Yim Jong-yong, who took the helm at the financial group in March 2023. A decade ago, as chairman of domestic rival NH Financial Group, Yim orchestrated the acquisition of Woori Investment & Securities Co. – the crown jewel of Woori at the time – helping NH become one of Korea’s most diversified financial groups [1].

Woori Financial Group is expected to strengthen its non-banking business by seeking synergy with Woori Investment & Securities Co., which launched on Aug. 1, 2024. The brokerage unit was created after merging the online fund sales platform Korea Foss Securities Co., which Woori acquired last May, with Woori Investment Bank [1].

The acquisition of Tongyang and ABL Life Insurance is expected to increase Woori Financial Group’s net profit by more than 400 billion won per year. This acquisition is part of Woori Financial Group's strategy to narrow the gap with other financial holdings and actively invest abroad by utilizing stable insurance assets [2].

The financial sector believes that Woori Financial Group will use the assets introduced through insurance companies for various investments, including infrastructure projects with domestic and foreign private equity funds (PCFs) that seek a 10% annual return. Additionally, Woori Financial Group plans to improve its internal control and capital soundness by investing 100 billion won in the establishment of internal control infrastructure for the group over the next five years [2].

References:
[1] https://www.kedglobal.com/newsView/ked202505020003
[2] https://www.mk.co.kr/en/economy/11307597