[Click eStock] "Woori Financial Group, Active Shareholder Returns... Buying Opportunity"

[Asia Economy Reporter Son Sunhee] Daishin Securities announced on the 17th that it maintains a target price of 18,000 KRW and a 'Buy' investment rating for Woori Financial Group. Although there has been some recent stock price adjustment, it was rather seen as a buying opportunity.

Park Hyejin, a researcher at Daishin Securities, said, "The outlook for margin and loan growth in 2023 can only be viewed conservatively, and recent remarks regarding the bank's public interest have negatively affected the stock price," but added, "Considering that the company is reviewing an active shareholder return policy and has raised the dividend payout ratio without artificially damaging profits, it is judged that the company has done its best."

She continued, "At the current stock price level, the dividend yield for 2022 proposed by Woori Financial Group is quite high at 9.4%. If it gives confidence that the future dividend per share (DPS) will not be reduced, the recent stock price adjustment is a good opportunity to buy excellent stocks," she emphasized.

Last year, the bank's net interest margin (NIM) reached 1.68% at the end of the fourth quarter. This is an increase of 26 basis points (bp) compared to the previous year. Woori Financial Group forecasts that the annual NIM guidance for this year will be in the high 1.6% range, improving by 8 to 9 bp compared to last year's annual NIM (1.59%).

Bank won-denominated loans are expected to grow in the 2% range. The decline in unsecured loans is easing, and secured loans are expected to contract until the first half of the year. However, with real estate regulations being relaxed, there is a possibility of gradual recovery in the second half.

Regarding the recent government criticism of the banking industry's oligopoly system, Researcher Park said, "The banking industry is a licensed industry and the oligopoly system is appropriate, so there is a public obligation," but added, "On the other hand, since the total number of shareholders in the banking sector exceeds one million, profitability cannot be overlooked." She further stated, "Looking at past cases, policies such as fee reductions or expanding the scope of safe conversion loans by converting them to fixed rates may emerge. Accordingly, the possibility of profitability damage cannot be ruled out, but we are watching the financial sector's measures in any case."