Jo Byung-kyu, Woori Bank President: "Strong Fundamentals in Corporate Loans... Actively Supporting Small and Strong Enterprises"

[Bank President New Year Interview]
Corporate Loan Balance to Expand to 237.9 Trillion Won by 2027
"No Issues with Soundness Management"

Jo Byung-kyu, President of Woori Bank, commented on the corporate loan competition in the banking sector, stating, "Woori Bank has solidly built a foundation for soundness through growth focused on high-quality assets," and added, "It will not lead to a deterioration in soundness as much as concerns suggest."

In a recent written New Year interview with Asia Economy, President Jo said, "(To address concerns about soundness) we will strengthen screening centered on repayment ability and actively support small and medium-sized enterprises with new growth industries and technological capabilities," expressing this stance.

Regarding the domestic economy and interest rate outlook for this year, he said, "Due to the impact of high interest rates, the domestic demand recovery will slow down, but with an increase in global trade volume and the semiconductor industry, our main industry, entering a recovery cycle, the economic growth rate is expected to be around 2.1%," and added, "As for interest rates, I expect two cuts in the second half of this year, lowering the rate to around 3.00% by the end of the year."

On the possibility of expanding potential non-performing loans due to prolonged high interest rates, he stated, "Looking at recent trends in delinquency rates of commercial banks and the secondary financial sector, I believe concerns have somewhat materialized," and noted, "The financial authorities' stance on expanding loss absorption capacity is expected to continue for the time being."

Last year, Woori Financial Group declared the restoration of its corporate finance reputation and presented a vision to expand corporate loan balances to KRW 237.9 trillion by 2027, aiming to become the number one in the banking sector. However, recently, concerns about asset deterioration in corporate loans across the financial sector have been increasing due to the prolonged high interest rates.

President Jo emphasized that Woori Bank's growth strategy centered on high-quality assets poses no problems in managing soundness, stating, "We are continuously monitoring industries sensitive and vulnerable to economic cycles such as shipping, shipbuilding, and construction," and added, "For companies needing support in credit assistance and corporate improvement, dedicated departments are establishing support plans and responding accordingly."

He also mentioned, "Since March last year, we have been operating a dedicated task force team (TFT) to focus on managing sectors with high delinquency rates," and said, "We will continue to support smooth restructuring with solutions tailored to borrowers' situations by utilizing programs such as the New Start Fund, Individual Business Owner 119 Program, and our own pre-workout program."

On the other hand, he expects the increase in household loans to slow down somewhat compared to last year. The domestic housing market is expected to show a gradual recovery, but due to the base effect of various policies last year (such as 50-year maturity mortgage loans and special BoGeumjari loans) and the authorities tightening loans through measures like the introduction of the Debt Service Ratio (DSR), lending is being constrained.

Regarding household debt management, he said, "It is natural for household debt to increase as the economy grows, but the rapid pace of increase compared to other countries and the fact that it has grown excessively relative to nominal GDP are points to be cautious about," and emphasized, "While ensuring sufficient funding supply to real demand borrowers, it is necessary to control the overall loan growth rate within the nominal GDP growth rate."

President Jo also stated regarding this year's management policy, "This year, we have set the management goals as focusing on core businesses and leading future finance," and added, "We plan to concentrate our capabilities on our core businesses and grow together with our customers to become a bank that can lead future finance."

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