Woori Financial Group Announces Its Net Profit of 911.3 Billion Won in Q1

Chairman Lim Jong-yong of Woori Financial Group. (Photo: Woori Financial Group)

Woori Financial Group announced on April 24 that it earned a net profit of 911.3 billion won in the first quarter (January-March) of 2023.

This is almost 2 times the 480 billion won earned in the fourth quarter of 2022 and an increase of 8.59 percent (72.1 billion won) from the same period a year earlier (839.2 billion won).

Net operating income, which combines interest income and non-interest income, increased 7.58 percent year-on-year to 2,550.5 billion won.

In particular, Woori Financial Group’s interest income inflated 11.63 percent to 2,218.8 billion won over the same period, driven by an increase in corporate loans (up 4.9 percent year-on-year) and the impact of last year's interest rate hike.

On the other hand, non-interest income, such as fees and incomes from the sale of financial products related to securities and foreign exchange derivatives, descended by 13.39 percent to 317 billion won from the same period last year (383 billion won).

While fee income declined due to increased market volatility caused by a global liquidity crisis and the appreciation of foreign exchange rates, its main fee income from CIB, wealth management among others, maintained a solid growth trend.

The financial group’s SG&A expense ratio continued to improve to 40.4 percent, down four percent from 44.4 percent in the fourth quarter of 2022 due to company-wide cost efficiency efforts including the active management of SG&A expenses through channel efficiency.

Woori Financial Group’s bad debt expense amounted to 261.4 billion won, an increase of approximately 95.3 billion won from the same period of the previous year, due to a higher delinquency rate.

But its non-performing loan (NPL) ratio, which refers to loans overdue for more than three months, remained stable at 0.35 percent.

In particular, Woori Financial Group’s common equity ratio reached 12.1 percent in the first quarter, exceeding 12 percent for the first time. A common equity capital ratio is one of the BIS (Bank for International Settlements) capital ratios and is a key indicator of a financial institution’s loss-absorbing capacity in times of crisis.

“This is attributable to our efforts to steadily implement a capital management plan announced in February, despite the exchange rate appreciation of about 40 won since the beginning of 2023 and the acquisition of a venture capital firm,” a Woori Financial Group official explained.

As part of its shareholder return policy, Woori Financial Group amended its articles of incorporation to introduce quarterly dividends at a general shareholders’ meeting in April and announced the acquisition and cancellation of 8.5 million shares of treasury stocks worth 100 billion won on May 21.

In addition, Woori Financial Group has been fulfilling its social role. It announced various support measures for the marginalized through the Woori Mutual Financial 3-3 Package in April.

Its major subsidiaries’ net profits were 859.5 billion for Woori Bank, 45.8 billion won for Woori Card, 39.3 billion won for Woori Financial Capital and eight billion won for Woori Investment Bank.