'Enhancing Shareholder Value' Woori Financial Purchases 1.24% Stake Held by KODIT → Cancellation

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Woori Financial Group plans to enhance shareholder value by canceling 9,357,960 treasury shares it intends to purchase from the Korea Deposit Insurance Corporation (KDIC), while also acquiring the online securities firm Korea POS Securities as part of its efforts to transform into a comprehensive financial group. This move is interpreted as a proactive effort to address the undervaluation amid the government's policy initiatives to resolve the 'Korea Discount.'

According to financial industry sources on the 6th, Woori Financial plans to purchase and cancel the 1.24% stake held by KDIC within this year. The stock purchase agreement was signed with KDIC in October last year, and once the purchase timing is confirmed, Woori Financial will proceed with the cancellation process step-by-step after making a public disclosure in accordance with procedures.

The 1.24% stake in Woori Financial held by KDIC is valued at approximately 138 billion KRW based on the closing price of 14,750 KRW on the 5th. Woori Financial had previously acquired the remaining 4.5% stake held by KDIC last year, and upon completion of this repurchase, it will achieve full privatization.

In particular, completing the treasury share cancellation within this year is expected to increase the value per share due to the reduction in the number of issued shares. This can improve earnings per share (EPS) as well as return on equity (ROE). On the 5th, following the announcement of the new year's work plan, Lee Bok-hyun, Governor of the Financial Supervisory Service, commented at a press briefing regarding financial companies' shareholder return policies, stating, "(The FSS) should not intervene," but added, "Appropriate dividends or treasury share cancellations are necessary. It is right to cancel treasury shares at an appropriate time rather than holding them excessively long."

Alongside the treasury share cancellation, Woori Financial is also actively considering a merger and acquisition (M&A) of the online securities firm Korea POS Securities. It is reported that Woori Financial will explain the related plans at the board meeting scheduled for the 6th and officially announce them through an earnings conference call. Among the top five financial holding companies, Woori Financial is the only one without an affiliated securities firm. Therefore, acquiring a securities company has been regarded as one of the key tasks to become a comprehensive financial group since Chairman Lim Jong-ryong took office last year.

Korea POS Securities is a small securities firm with a capital of only 69.9 billion KRW but holds licenses for investment trading, brokerage, and trust services. If the merger is successful, synergies with Woori Comprehensive Financial Group can be expected without the need for new licensing procedures. Woori Comprehensive Financial Group increased its capital from 500 billion KRW through a paid-in capital increase last year to about 1.1 trillion KRW. The decision on whether to proceed with the acquisition of POS Securities is expected to be finalized at the shareholders' meeting next month after approval by the board of directors.

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