S.Korea Woori Investment Eyes European Bank

South Korean brokerage Woori Investment & Securities said on Friday it was looking at about 20 European investment banks for a potential stake purchase or acquisition worth less than 2 trillion won ($1.84 billion).

Korea, Korean Flag
Korea, Korean Flag

European banks are seen as less vulnerable to the subprime mortgage meltdown than their U.S. rivals and affordable for Woori, with the global credit crunch lowering their valuations to attractive levels, an official at Woori Investment's strategy team said.

"As we are aiming to boost investment banking, we are analyzing the business structures of target companies," an official at Woori Investment's strategy team told Reuters by telephone. "The value of a possible deal could come under 2 trillion won, below our own market cap."

He asked not to be named because of the sensitivity of the matter.

The country's No. 4 brokerage by market value may buy the management rights of a small European bank or just a stake in a large player if a target bank is reluctant to relinquish management, the official said.

"Now looks like a good time to look at (European banks) because of discount factors," he said, adding that the brokerage house had not been approached about a deal by any potential targets.

The comment comes after Woori Finance Holdings Chairman Lee Pal-seung was reported by Yonhap and other local media on Friday to have said the brokerage unit was considering buying a European investment bank.

The parent holding company is also interested in local U.S. banks for which valuations have come down sharply, but has ruled out a possible deal with Lehman Brothers, one of the victims of the subprime crisis.

Shares at Woori Investment rose 3.7 percent to 19,400 won in the Asian session, in line with outperforming domestic brokerage stocks in the steady broader market.