Thanks to boosts in interest earnings by 205.6 billion won to 5.565,1 tln won compared to preceding year while non-interest earnings rose to 1.464 tln won with NPL coming to 0.51 percent the lowest in its history
Chairman Sohn Tae-seung of Woori Financial Group. (Photo: WFG)
Woori Bank recorded one of its best-ever operating profits last year, totaling 2.019 trillion won in net profit in 2018, up 33.5 percent YoY, the bank announced on Feb. 11.
The bank said its 2.29 trillion won operating profit for 2006 remained the largest operating profit in the bank’s history, but the figure includes a one-time profit from the sale of the bank’s investments in the stakes of other companies.
The bank said its net interest margin (NIM)stood at 0.52 percent up slightly 0.05 percentage point, and if the card is included the NIM gets boosted to 1.99 percent, while ROE stood at 9.62 percent and ROA 0.63 percent for the year.
The bank’s interest earnings came to 5.651 trillion won in 2018, an increase of 205.6 billion won from the preceding year. The non-interest earnings amounted to 1.464 trillion won, down 16.5 percent YoY due mostly to the reductions in fee income from the credit card, foreign exchange and derivative sectors. The NPL came to 0.51 percent, the lowest in the bank’s operational history.
The loans in default also notched 0.031 percent, which is considered a stable level, with the NPL coverage ratio improved to 118.4 percent. That is an indication that it is capable of absorbing the losses from the loan defaults in the days ahead.
In the meantime, KRX announced that the shares of Woori Financial Holdings will be listed on the stock market from Feb. 13, while shares of Woori Bank will be removed, as it is a major affiliate of Woori Financial Holdings.
Woori Financial Group will aggressively pursue acquisitions of nonbanking firms such as asset management, real estate management and mutual savings banks to beef up its size and scale to compete with other groups, said Sohn Tae-seung, the group chairman. Woori has restored its financial holding company structure.
Sohn is also the chief executive of Woori Bank. “As we held the event on Monday, the group will begin discussing internally and approach targets to begin deals Tuesday.” the chairman said at a press conference in Seoul. Given the nature of the deals, Sohn said the group cannot disclose the names of the targets.
But strategically, it will seek to acquire those nonbanks by itself, while going after big nonbank assets with other investors. They will seek to "jointly invest" in equities of big targets.
This is because the group does not want to affect its double-digit capital adequacy ratio, Sohn noted.
“For now, the group will make small deals in the beginning, and gradually make bigger deals.” he said.
Its acquisition plan is part of efforts to “reorganize and rebuild” the group's business portfolio by focusing on boosting its nonbanks.
“Our weakness is that we do not have a strong nonbank. Woori Bank is the only strong subsidiary of the group.” Sohn said.
The reorganization of the group's portfolio will include relocating Woori Card and Woori Investment Bank whose shares are wholly owned by Woori Bank to put them under the group’s direct control in line with the regulations.
The group’s other key tasks will be further making inroads into new overseas markets in Southeast Asia by strengthening its investment banking, digital banking and asset management amid market saturation at home.
“We will still be aggressive at home marketing our services. But we are going to focus more on venturing overseas.” Sohn said.
To this end, the chairman said the group has set up new divisions concentrating on those four key strategic initiatives - investment banking, digital banking, asset management and global business.