Woori Bank's London Trading Center has completed its first derivatives transaction with a local company. The center provided a £70 million loan along with an interest rate swap to mitigate interest rate fluctuation risks, hedging the associated risks directly in the London financial market.
On September 29, Woori Bank announced that the London Trading Center collaborated with its London branch to offer a £70 million loan to a local company, simultaneously executing an interest rate swap of the same amount.
The interest rate swap converts the interest burden of a variable-rate loan into a fixed rate. The borrowing company can reduce the uncertainty of interest burdens due to rate fluctuations through this transaction.
Woori Bank hedged the risks associated with the transaction by managing its own trading book in the London financial market. This marks the first instance among domestic commercial banks of hedging derivatives transactions with local companies through its own book management.
To facilitate this, Woori Bank enhanced its integrated trading system, previously operated from its headquarters, into a global operating model that can be utilized locally in London. The bank has also established a foundation to present competitive transaction prices in the local market by securing multiple global banks as trading counterparts.
Woori Bank plans to expand its derivatives services and diversify its trading targets, having established a trading system that directly utilizes local market liquidity, moving beyond remote support centered at its headquarters.
Lee Sung-min, head of Woori Bank's London Trading Center, stated, “The London Trading Center serves as a hub connecting the abundant liquidity of the local market with corporate financial needs. We will enhance our competitive pricing and traders' market responsiveness to expand cooperation with various trading counterparts and broaden the range of derivatives we offer.”
* This article has been translated by AI.
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