Woori Bank hedges a UK borrower's 70 million pound swap on its own London book
Woori Bank says it is the first Korean commercial bank to hedge a UK client's swap on its own London book, with a 70 million pound trade. It shows Woori can now carry UK rate risk in London, though winning that business on price will take repeat deals.
The Investor · Invest desk
What happened
- The swap came with a 70 million pound loan from Woori's London branch, both signed on Sept. 29 and sized to match, fixing the borrower's floating rate.
- Until now Woori supported overseas derivatives trades remotely through Seoul, according to the Korea Herald, and it now manages the positions in London.
- To run the book locally, the bank upgraded its headquarters integrated trading system into a global operating model that can be deployed in London.
- Woori's London trading center opened in June last year to find new revenue and covers proprietary FX, securities and derivatives plus client hedging.
Why it matters
- What's now possible capability Woori can now offer a London borrower a loan and its fixed-rate swap as one package, with both legs priced and managed in London.
- Who's exposed exposure The London center now carries market risk on its own book, so a badly timed hedge on a UK client swap shows up as a London profit or loss.
- What it sets up precedent If the first-mover claim holds, any other Korean commercial bank in London that wants to sell a hedged loan will need its own local book and bank trading lines to match Woori.
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Korean banks added 600 billion won in household loans in September against 10.7 trillion won for companiesConfirmed2 publishers
A floating-to-fixed swap moves interest rate risk from the borrower [3] to the bank that writes the swap. In this trade that bank was Woori's London trading center, which took the position onto its own book and then hedged it in the London market [4]. The loan and the swap were both 70 million pounds [2], so the swap fixes the rate on the whole loan [15]. Woori did not name the borrower or publish the swap's pricing [8]. The claim to be the first Korean commercial bank to hedge such a trade locally on an in-house book is also the bank's own [5].
The center opened in June last year to find new revenue [10]. Its first derivatives deal with a British company came on Sept. 29 [1][2], about 15 months later [16], and the bank says it had been building the local trading setup since the center's preparatory stage [7].
Repeat volume is one outcome: Woori says it plans to broaden its derivatives offerings and widen its network of counterparties [12]. A showcase is another, with one hedged loan for one borrower and little after it. The third is growth at thin margins. Woori hedges these swaps in the London market, where it has trading relationships with international banks for liquidity and pricing [4][11]. The rate it quotes a client therefore starts from the rate those banks quote Woori.
I think the evidence supports the capability and not yet the competition. This swap was sold alongside Woori's own loan, sized to match it [2]. The borrower had an obvious reason to hedge with its lender. A swap for a UK company that borrows from another bank would be hedge business won on price alone. Lee Sung-min, head of the London Trading Center, describes a pricing business. "The London Trading Center serves as a hub connecting local market liquidity with corporate financing needs," he said [13]. "We will strengthen our pricing competitiveness and traders' ability to respond to market conditions while expanding our partnerships and derivatives offerings," Lee said [14].
Suppose Woori's next London swaps go to companies that borrow elsewhere. Then Korean lenders are competing directly for UK hedging, and this view is wrong. If the swaps keep arriving attached to Woori loans of matching size, the London book is a better way to serve Woori's own borrowers.
What to watch
- Whether Woori reports a count of London derivatives trades, or a revenue figure for the London trading center, in its results.
- Whether another Korean commercial bank in London says it books and hedges UK client swaps on its own local book.
Information, not investment advice. This story is general information about companies and markets, drawn from cited reporting. It is not a recommendation to buy, sell or hold any security; check the cited sources before acting.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence45
- Adoption15
- Hype gap+15
- Incentives60
- Confidence55
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
Woori Bank said on the 5th that its London trading center completed its first derivatives transaction with a British company, a deal worth 70 million pounds.
- [2]
The London trading center worked with the bank's London branch to extend a 70 million pound loan to the local company on Sept. 29 and executed an interest rate swap of the same size.
- [3]
An interest rate swap converts a floating rate into a fixed rate, allowing a company with a floating-rate loan to reduce its exposure to future interest rate swings.
- [4]
The London trading center took the resulting interest rate risk onto its own trading book and hedged the exposure directly in the local financial market.
- [5]
Woori said it was the first South Korean commercial bank to manage and hedge such a transaction locally using an in-house book.
- [6]
Woori Bank upgraded the integrated trading system used at its headquarters into a global operating model that can also be deployed in London.
- [7]
The bank said it had been building local trading infrastructure since the preparatory stage of establishing the London trading center.
- [8]
Woori's announcement identifies the borrower only as a British (local) company and does not give the swap's fixed rate or margin.
- [9]
The deal marks a shift from supporting overseas derivatives transactions remotely through Seoul to managing positions directly in London.
- [10]
The London trading center was set up in June last year to secure new revenue sources; it handles proprietary foreign exchange, securities and derivatives operations, plus client business such as currency exchange and hedging.
- [11]
Woori established trading relationships with international banks to secure liquidity and competitive pricing.
- [12]
Woori plans to broaden its derivatives offerings and expand its network of counterparties.
- [13]
"The London Trading Center serves as a hub connecting local market liquidity with corporate financing needs," said Lee Sung-min, head of Woori Bank's London Trading Center.
- [14]
"We will strengthen our pricing competitiveness and traders' ability to respond to market conditions while expanding our partnerships and derivatives offerings."
- [15]
The swap's notional equals the loan principal, so the swap fixes the rate on 100% of the loan.
- [16]
The first corporate derivatives trade came about 15 months after the London trading center was set up.
Sources
2 independent publishers whose own reporting we read for this story.
- en.sedaily.comWoori Bank's London Center Seals First Derivatives Deal With U.K. Firm
1 article · October 5, 2026
- koreaherald.comWoori executes first derivatives deal through London hub
1 article · October 4, 2026
Topics and entities
Topics
- Interest rate swaps
- Korean banks abroad