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Details on Woori Finance sale plan due this month

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(Globalpost/GlobalPost)

SEOUL, June 13 (Yonhap) -- South Korea plans to unveil a road map to resume the sale of Woori Finance Holdings Co. in late June, including separate sales of the group's several affiliates, the top financial regulator said Thursday.

Shin Je-yoon, the chairman of the Financial Services Commission (FSC), said that the government plans to lay out details about the privatization of the state-invested Woori Finance on June 26.

"The government is seeking to sell the group's smaller banks or securities unit first (when it privatizes the group)," Shin said.

The chairman told lawmakers on Wednesday that the financial watchdog is considering first selling the group's two smaller banks -- Kwangju and Kyongnam -- and then selling a slimmed-down holding company, along with the main banking unit Woori Bank.

The government currently holds a 56.97 percent stake in Woori Finance after it injected 12.8 trillion won (US$11.32 billion) to save the group from near bankruptcy in the aftermath of the 1997-98 Asian financial crisis.

The sale of Woori Finance was pushed by the government of former President Lee Myung-bak, but the privatization move fell through in 2010 and 2011 due to a lack of proper buyers.

"We will first resolve issues surrounding the sale of Woori Finance, and improve the surveillance system and financial policies," Shin said. "After that, we will announce a feasible vision for the country's financial sector in the second half of the year."

Shin added the country's economy is challenged by Japan's economic stimulus actions dubbed "Abenomics," which refers to a mixture of aggressive monetary and fiscal policies preached by Japan's Prime Minister Shinzo Abe.

"When Abenomics succeeds, it will weigh down on the global sales of local exporters," Shin said. "Even if Abenomics becomes a failure, it will still dent the financial market as it sparks an outflow of the Japanese capital."

Shin also highlighted that South Korea is in a low-growth phase and faces rapid population aging, which are feared to eat into the growth potential down the road.

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