[Click eStock] "Woori Financial Group, Shareholder Return Rate Expected to Increase by 2025"

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NH Investment & Securities forecasted on the 14th that Woori Financial Group's non-interest income and shareholder return ratio will expand by 2025. The investment opinion 'Buy' and the target price of 20,000 KRW were maintained.

Jung Joon-seop, a researcher at NH Investment & Securities, stated, "Currently, due to uncertainties surrounding the acquisition of insurance companies and limited capacity for expanding shareholder returns, the company is undervalued compared to its peers, but starting next year, these undervaluation factors are expected to be gradually resolved."

Researcher Jung pointed out the future tasks as ① securing non-interest income to offset weak interest income during the interest rate decline cycle and ② improving capital ratios (CET1 and common equity tier 1 ratio) to expand shareholder returns.

First, the proportion of non-interest income is expected to gradually improve from next year onward. Researcher Jung predicted, "Since Woori Investment & Securities is in its early stages, it will be difficult to make a significant contribution to earnings this year, but from 2025 onward, its contribution will expand."

He added, "Although the acquisition of the life insurance company is still uncertain, it is expected that the acquisition decision will be confirmed around November, and if successful, it will clearly contribute to non-interest income after 2025."

Secondly, the shareholder return ratio is expected to expand to 35-40% next year. Last year's shareholder return ratio was around 35%. Researcher Jung diagnosed, "To expand the shareholder return ratio to 40%, the CET1 ratio, which was 12.0% at the end of June, must exceed 12.5% in the future. Although it will be difficult this year, achieving 12.5% next year is possible through reduced loan growth and management of risk-weighted assets (RWA)."

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