Business Context and Reporting Period
This Form 6-K, filed on March 18, 2021, summarizes the 2020 Business Report for Woori Financial Group Inc., a Korean financial holding company. The report covers the fiscal year ended December 31, 2020. The group operates through a diversified portfolio including Woori Bank, Woori Card, Woori Investment Bank, and various asset management and trust subsidiaries. Financial statements are prepared in accordance with Korean IFRS.
Key Financial Metrics (Fiscal Year 2020)
| Metric | 2020 Value | Unit |
|---|---|---|
| Operating Income | 2,080,394 | Millions of Won |
| Net Income (Consolidated) | 1,515,249 | Millions of Won |
| Net Income (Attributable to Owners) | 1,307,266 | Millions of Won |
| Earnings Per Share (Basic/Diluted) | 1,742 | Won |
| Total Assets | 399,081,017 | Millions of Won |
| Total Liabilities | 372,355,172 | Millions of Won |
| Total Equity | 26,725,845 | Millions of Won |
| Group BIS Capital Adequacy Ratio | 13.84 | % |
| Non-Performing Loan (NPL) Ratio | 0.38 | % |
| Return on Assets (ROA) | 0.40 | % |
| Return on Equity (ROE) | 6.80 | % |
Material Changes vs. Prior Period
- Profitability Decline: Net income attributable to owners decreased by approximately 30.2% from 1.87 trillion Won in 2019 to 1.31 trillion Won in 2020. Operating income fell from 2.80 trillion Won to 2.08 trillion Won.
- Increased Credit Costs: Impairment losses due to credit loss more than doubled, rising from 374 billion Won in 2019 to 784 billion Won in 2020, reflecting the economic impact of the pandemic.
- Asset Growth: Total assets increased by 10.2% to 399 trillion Won, driven by a 9.0% increase in loans and other financial assets at amortized cost.
- Capital Strength: The Group BIS Capital Adequacy Ratio improved significantly from 11.89% in 2019 to 13.84% in 2020.
- Asset Quality: The NPL ratio improved slightly from 0.40% to 0.38%, while the coverage ratio for substandard loans increased from 133.6% to 153.8%.
Outlook, Risks, and Management Commentary
- Dividend Proposal: Management proposed a cash dividend of 360 Won per share for FY2020, representing a payout ratio of 19.89%. This is subject to shareholder approval at the Annual General Meeting.
- Liquidity Position: The Group maintained strong liquidity with a Won Liquidity Ratio of 509.5% and a Foreign Currency Liquidity Ratio of 139.3% (for Woori Investment Bank). Woori Bank's Liquidity Coverage Ratio was 92.07%, compliant with temporary regulatory easing (85% threshold) due to COVID-19.
- Regulatory Environment: The filing notes temporary easing of financial regulations in response to COVID-19, specifically regarding liquidity coverage ratios for banks until March 2021.
- Corporate Structure: The group continued to integrate subsidiaries, including the integration of Woori Financial Capital and Woori Savings Bank (formerly Aju Capital and Aju Savings Bank) in late 2020.
Investor Verification Checklist
- Dividend Approval: Verify the outcome of the Annual General Meeting regarding the proposed 360 Won per share dividend.
- Credit Loss Trajectory: Monitor future quarters for the sustainability of the elevated impairment losses (784 billion Won) and their impact on net interest margins.
- Capital Adequacy: Confirm the maintenance of the BIS ratio above regulatory minimums as the temporary COVID-19 liquidity easing measures expire.
- Subsidiary Performance: Review individual performance of key subsidiaries, particularly Woori Bank (ROE 5.83%) and Woori Card (ROE 5.29%), which showed declines in ROE compared to 2019.
- Shareholder Structure: Note that the Korea Deposit Insurance Corporation (KDIC) remains the largest shareholder with a 17.25% stake.