Woori Financial Group Approaching the Era of 3 Trillion KRW Annual Net Profit

2Q Also Expected to Achieve Record Quarterly Earnings

[Asia Economy Reporter Minwoo Lee] Woori Financial Group is expected to achieve its highest quarterly performance in the second quarter of this year. With the benchmark interest rate anticipated to steadily rise throughout the year, the net interest margin (NIM) is expected to increase, potentially ushering in an era of annual net profits exceeding 3 trillion KRW.

On the 25th, BNK Investment & Securities forecasted that Woori Financial Group would post record-breaking results this year. Strong performance is expected starting from the second quarter. The net income attributable to controlling shareholders is projected to increase by 16.1% year-on-year to 874.1 billion KRW, marking the highest quarterly profit ever.

This is attributed to the continued significant growth in interest income. Interest income for the second quarter of this year is expected to rise by 22.9% year-on-year to 2.0933 trillion KRW. Kim In, a researcher at BNK Investment & Securities, explained, "As won-denominated loans, mainly corporate loans, continue to grow, the quarterly NIM is expected to increase by 8 basis points (bp, 1bp = 0.01%) compared to the previous quarter. Additionally, the increase of one business day also contributed to profit expansion."

Furthermore, despite the stock market decline and the sharp rise in bond yields, fee income remains solid. Compared to other commercial banks, the impact of securities gains and losses is not significant, so the decrease in non-interest income is expected to be limited to 0.5% year-on-year. Although digital-related expenses will increase, the low growth rate of labor costs is expected to continue, leading to a downward stabilization of selling and administrative expenses.

Record-high performance is also expected for the entire year. It is forecasted to achieve 3.157 trillion KRW, a 22.0% increase from last year’s record net income attributable to controlling shareholders of 2.588 trillion KRW. Kim In of BNK Investment & Securities predicted, "Despite conservative provisioning amid sound asset quality, interest income will significantly increase due to an annual NIM rise of 21bp."