[Click eStock] "Woori Jonggeum, High Earnings Growth Expected Based on Position Within Holding Company"

Korea Investment & Securities Report

[Asia Economy Reporter Minji Lee] On the 17th, Korea Investment & Securities forecasted that Woori Financial Group is expected to continue growing based on its position within the holding company.

Woori Financial Group's net profit last year was 79.9 billion KRW, growing at an average annual rate of 34% over the past three years. Non-interest income was 49.4 billion KRW, a 43% increase compared to the previous year. This was thanks to a 42.9 billion KRW profit from IB (Investment Banking) related activities, which grew by 41%. In 2019, the CIB (Corporate & Investment Banking) division was established to create group synergies in the IB business, and together with the existing corporate finance and structured finance divisions, it has driven an increase in total IB fees. Since IB fees account for 90% of non-interest income, strengthening IB personnel and capital is expected to be a key pillar in improving overall performance.

Baek Doosan, a researcher at Korea Investment & Securities, said, “The structural growth of the financial and securities businesses, which has driven Woori Financial Group’s growth, and the emphasis on non-bank businesses at the Woori Financial Group holding company level remain valid,” adding, “It is worth paying attention to Woori Financial Group, which is expected to continue high growth in performance going forward.”

Based on its equity capital, which has increased to 600 billion KRW, Woori Financial Group realized an increase in interest income centered on short-term finance activation and long-term, high-quality loans. As a result, last year’s interest income was 108.3 billion KRW, a 38% increase compared to the previous year. Of this, interest income from loans was 29.3 billion KRW, a 6% increase compared to the previous period, as the average loan balance increased mainly through high-yield long-term PF (Project Financing) loans, and the net interest margin (NIM) improved significantly.

Woori Financial Group continues to invest based on its position within the holding company. According to the holding company’s non-bank business strategy, Woori Financial Group’s role is the most important. This is because it is the subsidiary where the most effective synergy can be created with the bank in the IB and Wealth Management (WM) sectors. Researcher Baek Doosan analyzed, “Regardless of whether Woori Financial Group holding company pursues mergers and acquisitions of securities firms, investments in personnel and systems for Woori Financial Group will continue,” adding, “Through a 100 billion KRW paid-in capital increase and personnel reinforcement in November 2020, Woori Financial Group’s sales capabilities and profitability have greatly improved.”

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