Woori Financial, 2Q Net Profit 'Record High' 931.4 Billion KRW... Targets CET1 12.5% Next Year

Woori Financial Group recorded its highest quarterly performance ever in the second quarter. Woori Financial Group, the first among bank holding companies to announce a value-up plan, promised to achieve a Common Equity Tier 1 (CET1) ratio of 12.5% ahead of schedule by next year and to raise it to above 13% in the mid to long term, increasing the total shareholder return ratio to 50%.

Woori Financial Group disclosed on the 25th that it posted a net profit of 1.7554 trillion KRW in the first half of this year, a 14% increase compared to the same period last year. The net profit for the second quarter was 931.4 billion KRW, marking the highest quarterly performance ever.

Specifically, interest income was 4.3951 trillion KRW, slightly down from 4.413 trillion KRW the previous year, but non-interest income surged 45% year-on-year to 885.4 billion KRW, driving profit growth. In particular, fee income increased by 26% year-on-year due to the expansion of the bank’s corporate finance and global investment banking (IB) businesses, as well as the enhanced operational capabilities of subsidiaries in the card and leasing sectors.

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Loan loss provisions increased by 80 billion KRW in the second quarter related to real estate project financing (PF), but overall loan loss costs decreased by 5% year-on-year to 775.7 billion KRW, demonstrating strengthened loss absorption capacity. The non-performing loan (NPL) ratio slightly declined compared to the end of last year, standing at 0.56% for the group and 0.23% for the bank.

The group’s CET1 ratio rose by about 10 basis points (1bp = 0.01%) quarter-on-quarter despite conditions such as exchange rate increases, and the group’s selling and administrative expense ratio fell below 40% for the first time since the holding company was established, reaching 39.9%.

Accordingly, Woori Financial Group’s board of directors decided on a dividend of 180 KRW per share for the second quarter.

Meanwhile, Woori Financial Group became the first domestic bank holding company to announce a corporate value enhancement (value-up) plan. The group set its mid-to-long-term value-up goals as "enhancing shareholder return capability based on CET1," presenting targets of ▲sustainable return on equity (ROE) of 10% ▲CET1 of 13% ▲total shareholder return ratio of 50%.

The core of the value-up plan, the total shareholder return ratio, is mapped out to expand up to 40% when CET1 is between 12.5% and 13.0%, and up to 50% when CET1 exceeds 13%. In particular, Woori Financial Group aims to achieve CET1 of 12.5% ahead of schedule by next year to accelerate shareholder returns.

A Woori Financial Group official said, "Woori Financial Group has strived to enhance shareholder value by demonstrating a high level of ROE within the industry and securing growth engines such as M&A in the non-bank sector, achieving the highest dividend yield in the industry. Having secured momentum for becoming the top financial group through various infrastructure improvements and the establishment of a value-up plan, we will deliver results that exceed market expectations going forward."

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