Woori Financial Group Reports H1 Net Profit of 1.4 Trillion Won, Surpassing Last Year's Annual Performance (Comprehensive)

Q2 Net Profit Also 752.6 Billion Won 'Earnings Surprise'

[Asia Economy Reporter Jin-ho Kim] Woori Financial Group announced on the 21st that it achieved a net profit of 1.4197 trillion KRW in the first half of the year, surpassing the entire previous year's annual performance within just half a year. This net profit far exceeded market expectations, marking what is being called an 'earnings surprise.'

Woori Financial explained that this result was due to the full-scale effect of the holding company conversion through synergy expansion among subsidiaries, continuous improvement of the revenue structure, and active efforts in soundness and cost management. The net profit for the second quarter recorded 752.6 billion KRW, significantly exceeding market expectations.

The net operating income, which combines interest income and non-interest income, exceeded 2 trillion KRW for the first time ever in a single quarter during the second quarter, reaching 4.0439 trillion KRW in the first half. Loans grew by 4.4% compared to the end of the previous year, centered on small and medium-sized enterprises, and core low-cost deposits increased by 10.6% compared to the end of the previous year, improving the revenue structure. As a result, interest income increased by 13.0% year-on-year to 3.3226 trillion KRW. Non-interest income rose by 54.1% year-on-year to 721.3 billion KRW, driven by a turnaround in asset management sales, strong performance in the securities sector, and the inclusion effect of subsidiaries such as capital.

Asset soundness is being managed at historically low levels, with a non-performing loan (NPL) ratio of 0.37% and a delinquency rate of 0.26%, despite concerns over soundness due to COVID-19.

The group's selling and administrative expense ratio improved by 6.6 percentage points to 45.9% compared to 52.5% in the same period last year, through active cost management and recovery of operating income.

A Woori Financial Group official stated, "The first half results were achieved based on solid profit-generating capabilities rather than one-time effects, and this trend is expected to continue." He added, "As a result of a risk management-focused business culture, asset soundness has already reached the industry's highest level, and in June, the global credit rating agency S&P upgraded Woori Bank's long-term credit rating."

He continued, "Although uncertainties related to COVID-19 have not been completely resolved, we will continue to make efforts to enhance shareholder value, including this interim dividend."

The consolidated net profit by major subsidiaries was 1.2793 trillion KRW for Woori Bank, 121.4 billion KRW for Woori Card, 82.5 billion KRW for Woori Financial Capital, and 44.0 billion KRW for Woori Comprehensive Financial.

During the conference call held after the earnings announcement, Woori Financial Group announced its first interim dividend since converting to a holding company. Seong-wook Lee, Executive Director of Finance at Woori Financial Group, explained, "Last year, the financial authorities limited the payout ratio to 20%, so this time we are conducting an additional interim dividend." When asked whether interim dividends would continue in the future, he replied, "We plan to raise the payout ratio to around 30% in the long term and will carefully review whether to continue interim dividends at the end of the year."

Regarding mergers and acquisitions (M&A) issues, he said, "We are prioritizing the securities sector, which is the most urgent and has the greatest synergy effect." On the earnings outlook for the second half, he said, "Since Woori Bank's portfolio has a high correlation with the direction of the base interest rate, a rapid increase in profitability is expected if the Bank of Korea raises the base rate." He added, "We expect an interest income increase effect of 175 billion KRW when the interest rate rises by 0.25 percentage points."

This content was produced with the assistance of AI translation services.