Woori Financial Group reported a decline in net profit for the first quarter, standing out as the only major South Korean banking group to do so. The company’s recent earnings report highlights that its overseas operations significantly impacted overall earnings during this period.
For the January-March period, Woori Financial Group’s net profit reached 603.8 billion won ($405 million), marking a 2.1 percent decrease compared to the previous year.
This Q1 performance fell more than 20 percent below the market’s consensus estimate, especially noteworthy as other prominent South Korean banking groups achieved record-high earnings.
The financial group attributed this profit decline primarily to substantial one-off provisions, approximately 100 billion won, linked to its overseas operations. Additionally, reduced gains from securities and foreign exchange, influenced by heightened market volatility from the Middle East conflict, contributed to the lower earnings.
Despite the dip, Woori Financial expects an earnings recovery, emphasizing that the decline was driven by temporary external factors.
In a positive development, the group’s interest income increased by 2.3 percent year-on-year to 2.3 trillion won. Non-interest income also saw a robust jump of 26.7 percent, reaching 454.6 billion won.
Within the non-interest income segment, fee income achieved a record high of 576.8 billion won, largely boosted by a rally in the stock market.
With its common equity Tier 1 (CET1) ratio climbing to a record 13.6 percent, surpassing its annual target of 13 percent, Woori Financial Group is set to accelerate investments in risk capital and enhance its support for productive financing initiatives.
Leveraging this strengthened capital buffer, Woori Financial plans to intensify efforts to boost the competitiveness of its nonbank subsidiaries, including its valuable securities and insurance units.
A strategic capital increase of about 1 trillion won is planned for its brokerage arm, Woori Investment & Securities, aimed at bolstering its capabilities within the dynamic capital market.
Furthermore, Tongyang Life Insurance, a recent acquisition by the group, is slated to become a wholly owned subsidiary through a comprehensive share exchange with the holding company.
Woori Financial announced its first-quarter dividend at 220 won per share, a 10 percent increase from the prior year. This payout will benefit from a tax-exempt status, a new policy introduced earlier this year.
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