Sohn Tae-seung, chairman of Woori Financial Group. (Photo: Woori Financial Group)

Woori Financial Group surpassed its annual business performance of 2020 for the first half of the year since its transition to a holding company, recording an earnings surprise.

On Aug. 21, Woori Financial Group said it posted net profit of 1,419.7 billion won in the first half of this year.

This eclipsed last year’s annual net profit of 1,307.3 billion won, breaking through the milestone of 2020 in the first half of 2021.

In the second quarter of 2021, the financial group also set a new quarterly record for net profit of 752.6 billion won.

This exceeded Woori Financial Group’s second-quarter net profit forecast of 631.8 billion won by FnGuide.

Synergies among group affiliates drove the earnings surprise. The results are attributable to more synergies among group affiliates, which Woori Financial Group generated in its third year, an improvement in the group’s profit generation structure and its strong soundness and cost management efforts, financial experts say.

Combining interest and non-interest income, the group’s net operating income exceeded two trillion won in one quarter for the first time in the group’s history, standing at 4,043.9 billion won in the first half alone.

Its loans grew 4.4 percent year on year. They were given mainly to small and medium-sized companies, while its key low-cost deposits grew 10.6 percent year-on-year, improving the company’s profit structure, enjoying a 13 percent increase in interest profit from the same period of last year.

Its non-interest profit rose 54.1 percent on-year to 721.3 billion won in 2021, thanks to strong sales in the asset management and securities sectors, which made strong turnarounds, and the effects of incorporating companies as subsidiaries such as Woori Capital.

Woori Financial Group chalked up strong asset soundness indicators, too. Despite concerns over the group’s financial soundness caused by the aftermaths of the novel coronavirus, the financial group recorded a NPL ratio of 0.37 percent and a delinquency rate of 0.26 percent, both at the lowest-ever level. Its sound asset ratio and NPL coverage ratio stayed at 88.5 percent and 163.0 percent, respectively.

The group’s selling general & administrative expenses ratio hit 45.9 percent, down 6.6 percentage points from 52.5 percent in the same period of last year.

This is because the group stepped up its efforts in order to manage costs better and make a recovery for operating profit, in order to start producing the tangible results of company-wide management efficiency activities.

Its consolidated net profits by major subsidiaries were 1279.3 billion won for Woori Bank, 121.4 billion won for Woori Card, 82.5 billion won for Woori Financial Capital and 44 billion won for Woori Investment Bank.

“Our business results in the first half of this year were yielded based on strong profit generation, rather than one-time effects,” a Woori Financial Group official said.

“We will continue this way down the road. As a result of promoting a risk management-oriented sales culture, we elevated our asset soundness to the highest level in the financial industry. In June, S&P, a global credit rating agency, also raised Woori Bank’s long-term credit ratings.”

“Uncertainties from the COVID-19 have not been completely cleared but we will continue to make efforts to raise shareholder value in the future including the payment of interim dividends,” the official said.

Meanwhile, announcing its business performance, Woori Financial Group added that it is also putting a spur to implementing digital innovation and environmental, social, and governance (ESG) management.

Woori Financial Group announced on July 12 that it has declared its ESG vision and mid- to long-term ESG management strategy through a resolution by the ESG Management Committee under the board of directors in a group management strategy workshop on July 9.

The financial group made differentiated digital achievements such as the Woori WON platform that increases customer convenience and the launch of the first 100-percent non-face-to-face mortgage product in the banking sector.

It also plans to speed up the fulfillment of ESG management tasks through its new ESG vision “Good Finance for the Next.”