Eliminating Uncertainty through Proactive Cost Reflection, Demonstrating Strong Asset Soundness
Expecting Benefits from Strengthened Sales Capabilities, Active Cost Management, and Subsidiary Incorporation This Year
[Asia Economy Reporter Kwangho Lee] Woori Financial Group announced on the 5th through its earnings report that its consolidated net profit for last year was 1.3073 trillion KRW. This is a 20.18% decrease compared to the previous year (1.8722 trillion KRW).
A Woori Financial official explained, "The lower-than-expected net profit in the fourth quarter of last year was due to recognizing various cost factors, including proactive provisioning for COVID-19."
Woori Financial's annual interest income last year was 5.9985 trillion KRW, an increase of 1.78% (104.8 billion KRW) from the previous year, but non-interest income decreased by 21.42% (224.2 billion KRW) to 822.4 billion KRW. The net operating income, which combines interest and non-interest income, remained at about 6.8 trillion KRW, maintaining the previous year's level.
They stated that despite two cuts in the Bank of Korea's base rate, they maintained operating income at the previous year's level through asset growth focused on corporate loans and improvement in the revenue structure, including an increase in low-cost core deposits.
Credit quality indicators improved. This is seen as the result of a risk-centered business culture that has been continuously promoted over the past three years.
The non-performing loan (NPL) ratio and delinquency rate recorded 0.42% and 0.27%, respectively, while the sound asset ratio and NPL coverage ratio were 87.5% and 151.9%, respectively.
Based on these improvements in credit quality, they proactively set aside loan loss provisions in preparation for the prolonged COVID-19 pandemic and sufficiently reflected costs related to private equity funds in advance to eliminate future uncertainties.
Last year, Woori Financial's return on equity (ROE) was 5.87%, and return on assets (ROA) was 0.40%.
By subsidiary, the major affiliate Woori Bank recorded a net profit of 1.3632 trillion KRW last year, a decrease of 9.45% (142.3 billion KRW) from the previous year.
The bank's NPL ratio was 0.42%, and the delinquency rate was 0.27%, showing continuous improvement in asset soundness indicators, reaching the industry's lowest level.
Additionally, Woori Card earned a net profit of 120.2 billion KRW, and Woori Comprehensive Financial Services earned 62.9 billion KRW.
A Woori Financial official said, "Last year was a year of steady growth and improved soundness, with proactive cost provisioning to prepare for the future," adding, "This year will be a year to secure momentum for medium- to long-term development based on a solidified group governance structure in the third year of the holding company transition, not only through a full-scale earnings turnaround with profitability recovery by strengthening sales capabilities and active cost management."
In particular, they emphasized, "We will accelerate the company's core strategy of 'digital innovation' throughout the organization," and added, "We declared 2021 as the inaugural year of Environmental, Social, and Governance (ESG) management, steadily laying the foundation for sustainable management to prepare for the post-COVID era."
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