• Net Income: KRW3,086 billion, a 23.1% increase year-over-year.
• Return on Equity (ROE): Increased by 1 percentage point year-over-year.
• Cost Income Ratio: Improved to 42.8%.
• Net Operating Revenue: KRW10,440.5 billion, up 6.1% year-over-year.
• Credit Cost: KRW1,716.3 billion, a 9.4% decrease year-over-year.
• Common Equity Tier 1 (CET1) Ratio: 12.08%, a 13 basis point increase quarter-over-quarter.
• Year-End Dividend: KRW660 per share, total dividends for the year KRW1,201, a 20% increase year-over-year.
• Loan Growth: Woori Bank's loans totaled KRW333 trillion, a 7.2% increase year-over-year.
• Non-Interest Income: KRW1,554 billion, a 41.9% increase year-over-year.
• SG&A Expenses: KRW4.459 trillion, down 0.6% year-over-year.
• NPL Coverage Ratio: 153% for the group and 247% for the bank.
• Share Buyback and Cancellation: KRW150 billion announced for 2025.

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Release Date: February 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Woori Financial Group Inc (NYSE:WF) reported a 23.1% increase in net income for 2024, reaching KRW3,086 billion, demonstrating strong profit-generating capabilities.
• The group's return on equity (ROE) increased by 1 percentage point year-over-year, indicating improved capital allocation efficiency.
• Non-interest income saw a significant growth of 41.9% year-over-year, driven by core fee income and group-wide synergies.
• The group's credit cost decreased by 9.4% year-over-year, reflecting effective loan loss management and provisioning strategies.
• Woori Financial Group Inc (NYSE:WF) announced a total dividend of KRW1,201 per share for 2024, marking a 20% increase from the previous year, highlighting a commitment to shareholder returns.

Negative Points

• The group's net interest margin (NIM) declined by 12 basis points year-over-year, affected by rate cuts from the Bank of Korea and declining market rates.
• Despite strong performance, uncertainties in Korea and abroad pose challenges, with concerns about weak domestic demand recovery and export slowdowns.
• The group's CET1 ratio was impacted by a sharp increase in the USD/KRW exchange rate, causing a 40 basis point decline in Q4.
• The non-banking business faced increased credit costs due to economic slowdown and real estate project finance restructuring.
• The group anticipates challenges in maintaining non-interest income growth in 2025 due to increased financial condition uncertainties.

Q & A Highlights

Q: Some majority shareholders have shown signs of selling their stake. Are there any concerns about overhang issues? A: (Sung-Wook Lee, CFO) The overhang issue from KDIC has been resolved. IMM PE sold their remaining stake due to the fund's closure, and we do not expect further sales from other controlling shareholders. Therefore, we believe any overhang issues have been addressed.

Q: Regarding the dividend policy, will the quarterly dividend be applicable after transferring the capital surplus? A: (Sung-Wook Lee, CFO) The transfer of capital surplus will be approved at the General Shareholders' Meeting in March. It will apply to the year-end dividend of 2025 and onwards. Our quarterly dividend policy will remain at 50% of the previous year's dividend, with potential adjustments based on market conditions.

Q: What is the exposure and asset quality classification for completed guarantee land trust businesses? A: (Jang Geun Park, CRO) We have 18 remaining projects, down from the previous quarter. We have provisioned KRW210 billion, ensuring sufficient coverage. The FSS recommendations have been addressed, and the impact on our capital ratio is minimal.

Q: What is the timeline for achieving the 12.5% CET1 ratio, and how much capital surplus will be converted to non-taxable dividends? A: (Sung-Wook Lee, CFO) We aim for balanced growth within a 4% nominal growth rate, with capital ratio improvements expected quarterly. We plan to convert around KRW3 trillion to non-taxable dividends, providing room for payouts over the next three to four years.

Q: How will Woori Financial manage challenges in 2025, including weaker NIM and higher credit costs? A: (Sung-Wook Lee, CFO) We expect interest income to improve slightly due to lower funding costs. Non-interest income growth will continue, supported by our securities arm. Credit costs are expected to decrease, particularly in the banking sector, despite a challenging environment.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.