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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] The National Pension Service (NPS) has selected Woori Bank as the preferred bidder to serve as its foreign exchange (FX) custodian bank, responsible for managing cash flows and accounts tied to overseas investment assets totaling KRW 886 trillion.
According to the NPS on May 7, Woori Bank was named the top-priority negotiating partner following a proposal review process initiated after the tender announcement in March. The selection marks the first such appointment in five years since 2021. The NPS plans to finalize the contract in June after completing due diligence and technical negotiations.
Under the mandate, the FX custodian bank will operate under a three-year base contract, with the possibility of annual extensions for up to two additional years, allowing for a maximum term of five years. During this period, Woori Bank will handle core treasury operations for the NPS’s overseas assets, including foreign currency receipts and disbursements, account opening and closure, and bulk FX transactions.
To encourage broader participation from capable domestic banks, the NPS eased bidding restrictions during the selection process. Previously, financial groups were limited to performing no more than two roles among primary banking, FX custody, fund administration, and custody services. This requirement was relaxed to enhance competition.
The move comes amid the rapid expansion of the NPS’s overseas investments. As of end-February, the pension fund’s total assets under management stood at KRW 1,610 trillion, with approximately 55%—or KRW 886 trillion—allocated to foreign assets. With more than half of the fund effectively managed in foreign currencies, the NPS emphasized the importance of selecting a partner with strong capabilities in managing FX liquidity and operations.
Key evaluation criteria included Woori Bank’s financial stability, operational capabilities, and experience in managing foreign currency funds.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
