Chairman Sohn Tae-seung of Woori Financial Group. (Photo: WFG)

Woori Financial Group said on Oct. 29 that its net profit for the first three quarters of 2019 came to 1.665,7 trillion won, the largest in its history, excluding one-time profits, up 12.5 percent year-on-year.

The group said credit for the large cumulative net profit is attributed to stout management, as key decisions were made during the a low interest period and dismal a state of operations in the wealth management sector.

In the meantime, the group said some 6.6 trillion won in financial support went to reform-growth corporations so far this year, the group said on Nov. 1.

They said the Reform Financial Promotion Council examined the activities of the reform finance and discussed the future moves. The council was launched in May to deal with providing systematic support to reform-growth business firms headed by Chairman Sohn Tae-sung.

The council has been engaged in such key issues as credit support provision, reform of credit support system, support for investments, and support for fintech. In the area of credit support, the group provided 6.6 trillion won worth of credit, around 22 percent of the targeted amount for this year; in the area of technology finance, 5.7 trillion won worth have been provided with Woori Bank providing its support to the business firms turning out materials, parts and equipment; In the area of credit provision system reform, the bankwill launch a platform this month to provide online loans in cooperation with Fintech. The clients won’t have to visit bank outlets to take out loans, as they can do it online.

Korea’s Woori Financial Group reported its second-quarter net income increased 7.2 percent from the previous quarter, keeping up the solid growth that has been seen since it transitioned into a full-fledged holding structure at the beginning of the year.

In a regulatory filing on July 13, the company said its consolidated net profit for the April-June period was 610.3 billion won ($518 million), up 7.2 percent from the previous quarter. Operating income gained 5.0 percent on quarter to 876 billion won while revenue added 5.2 percent to 1.82 trillion won. Shares of Woori Financial Group closed Monday unchanged at 13,800 won in Seoul.

For the January-June period, the company posted 1.18 trillion won in net profit, a record-high on normalized basis. Operating profit was 1.7 trillion won and revenue reached 3.5 trillion won for the period.

It is the company’s first release of half-year results since it turned into a holding entity in January this year. The finance conglomerate attributed its solid performance to rising prime asset ratios and low-cost deposits as well as growth in non-interest incomes supported by strong performance in wealth management.

Interest income for the first half reached 2.9 trillion won, with loan sales to small and medium-sized enterprises added 6.0 percent from the end of last year.

Woori Financial Group (WF) plans to acquire a 100% stake in Woori Card for KRW598.4bn in cash, and buy a 59.8% stake in Woori Investment Bank from Woori Bank for KRW392.8bn.

The market had anticipated that these two second-tier subsidiaries would become first-tier subsidiaries of Woori Financial Group. The resulting stock dilution (EPS -5.8%, BVPS -3.1%) has been mostly priced in, in our view.

Woori Bank has to sell Woori Financial Group shares within six months, and it should not be difficult to find potential buyers at home and abroad, including strategic and financial investors.

This will help diminish the burden of newly issued shares and the overhang issue and should provide a stock catalyst.