Q3 Net Profit of 778.6 Billion KRW, Highest Quarterly Performance
[Asia Economy Reporter Jin-ho Kim] Woori Financial Group has once again set a record high with a cumulative net profit of 2.2 trillion KRW for the third quarter. The diversification of profit-generating capabilities, including strong non-interest income, was a key factor behind the earnings surprise.
Woori Financial Group announced on the 25th that it achieved a cumulative net profit of 2.1983 trillion KRW for the third quarter. The third-quarter net profit was also 778.6 billion KRW, marking the highest quarterly performance since the transition to a holding company, renewing the record for the second consecutive quarter. Woori Financial explained that this was the result of a continuous strategy to expand the revenue base and successful management of asset quality and costs since the holding company transition.
The net operating income, combining interest income and non-interest income, reached 6.1804 trillion KRW for the third quarter cumulative, a 20.6% increase compared to the same period last year. Interest income improved to 5.0885 trillion KRW due to loan growth centered on small and medium-sized enterprises and an increase in core low-cost deposits, enhancing the revenue structure. Non-interest income also led strong performance by recording 1.0919 trillion KRW, a 57.2% increase from the same period last year.
In terms of asset quality, despite temporary concerns over economic slowdown due to strengthened quarantine measures in the third quarter, the non-performing loan (NPL) ratio was managed very stably at 0.31%, and the delinquency ratio was 0.24%. The high-quality asset ratio and NPL coverage ratio were recorded at 89.2% and 177.5%, respectively.
A Woori Financial Group official stated, "Although the NIM improvement trend temporarily stalled in the third quarter, balanced growth in interest and non-interest income and proactive management of loan loss provisions led to a record high performance exceeding 2 trillion KRW within just three quarters."
The consolidated net profits by major subsidiaries were 1.9867 trillion KRW for Woori Bank, 174.6 billion KRW for Woori Card, 128.7 billion KRW for Woori Financial Capital, and 66.5 billion KRW for Woori Comprehensive Financial.
Meanwhile, during the conference call held immediately after the earnings announcement, Seong-wook Lee, Executive Director of Finance at Woori Financial Group, said, "We plan to increase the dividend payout ratio in the mid to long term," adding, "We are continuously reviewing shareholder return policies within the scope of capital adequacy." It is reported that Woori Financial aims for a long-term dividend payout ratio of about 30%.
Regarding the sale of Woori Financial shares held by the Korea Deposit Insurance Corporation, he explained, "If the share sale is successfully completed and investors acquiring more than 4% emerge, the number of subsidiaries will increase," adding, "An increase in the number of subsidiaries will enhance board diversity and stabilize governance."
On growth strategy, he emphasized, "We expect the overall group growth rate to be 6-7% while maintaining a common stock ratio of 11%," and added, "Due to household loan regulations in the banking sector, its proportion will be kept low, while the non-bank and global sectors will have a higher proportion to drive growth."
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