Woori Bank completed a transaction to directly trade and settle Korean government bonds with an overseas financial institution using an international central securities depository (ICSD). It is the first case of a domestic bank concluding an actual trade with a foreign investor since offshore settlement via ICSD was allowed for local financial institutions in January.

Woori Bank said on Wednesday it concluded a Korean government bond trade and settlement via ICSD with an overseas financial institution, along with related foreign exchange (FX) transactions.

ICSD is an international securities settlement network used by global investors when trading overseas securities. Foreign investors can trade Korean government bonds without appointing a separate custodian or opening individual accounts by using a "government bond omnibus account" that ICSD has opened at the Korea Securities Depository.

In the transaction, Woori Bank linked won currency exchange and FX and derivatives trades to manage exchange-rate fluctuation risks, along with supplying Korean government bonds. Earlier in the first half, it identified investment demand from overseas financial institutions and built an internal system linking customer identification (KYC), government bond sales, and execution of FX and derivatives trades.

Choi Jun-gi (최준기), deputy head of Woori Bank's money market sales department, said it was meaningful that a domestic bank used a global payment network to directly supply Korean government bonds to overseas institutional investors and link FX trades. He said the bank would expand package sales combining Korean government bonds with FX and currency hedging for global financial institutions.