Business Context and Reporting Period
This Form 6-K filing by Woori Financial Group Inc. (Woori) serves as a convocation notice for the Annual General Meeting of Shareholders scheduled for March 25, 2020. The filing includes unaudited consolidated and separate financial statements for the fiscal year ended December 31, 2019. The company is a major South Korean financial group headquartered in Seoul.
Key Financial Metrics (Fiscal Year 2019)
Financial data is presented in Korean Won (KRW) in millions, unless otherwise noted.
- Revenue: Net interest income was 5,893,706 million KRW. Net fees and commissions income was 1,102,628 million KRW. Total operating income was 2,799,976 million KRW.
- Profit: Net income for the year was 2,037,596 million KRW. Net income attributable to shareholders was 1,872,207 million KRW. Basic and diluted earnings per share were 2,727 KRW.
- Cash Flow: Net cash provided by operating activities was 2,666,009 million KRW. Net cash used in investing activities was (9,680,588) million KRW. Net cash provided by financing activities was 6,249,467 million KRW.
- Balance Sheet: Total assets increased to 361,980,724 million KRW from 340,447,183 million KRW in 2018. Total equity was 25,492,332 million KRW.
- Debt and Liquidity: Cash and cash equivalents totaled 6,392,566 million KRW. Total borrowings were 18,998,920 million KRW, and debentures were 30,858,055 million KRW. Deposits due to customers were 264,685,578 million KRW.
- Impairment: Impairment losses due to credit loss were 374,244 million KRW.
Material Changes Versus Prior Period
- Net Income: Net income decreased slightly from 2,051,649 million KRW in 2018 to 2,037,596 million KRW in 2019.
- Operating Income: Operating income increased from 2,759,301 million KRW in 2018 to 2,799,976 million KRW in 2019.
- Asset Growth: Total assets grew by approximately 21.5 trillion KRW, driven largely by an increase in loans and other financial assets at amortized cost (from 282.5 trillion to 293.7 trillion KRW) and financial assets at FVTOCI (from 18.1 trillion to 27.7 trillion KRW).
- Non-Operating Items: Non-operating income turned negative in 2019 at (76,927) million KRW, compared to positive 45,571 million KRW in 2018, primarily due to a significant increase in the share of profits from joint ventures and associates (83,997 million KRW vs 3,019 million KRW) being offset by other non-operating expenses.
- Hybrid Securities: The balance of hybrid securities decreased significantly from 3,161,963 million KRW in 2018 to 997,544 million KRW in 2019 due to redemptions and reclassifications.
Guidance, Outlook, and Governance Matters
The filing does not contain forward-looking financial guidance or management commentary regarding future market conditions. However, it details significant governance and structural changes to be voted on at the Annual General Meeting:
- Director Appointments: Shareholders are asked to appoint four directors: Dennis Chan (Outside Director), Hong-Tae Kim (Non-Standing Director), Won-Duk Lee (Standing Director), and Tae-Seung Son (Standing Director/CEO). Terms vary from one to three years.
- Articles of Incorporation Amendments: Proposed amendments include the mandatory electronic registration of share and bond certificates, replacing physical issuance. This aligns with regulatory changes in Korea.
- Compensation: The total compensation limit for directors for 2020 is proposed at 3.2 billion KRW, unchanged from 2019. Actual total compensation in 2019 was 1.04 billion KRW.
- Unusual Items: The financial statements are unaudited and subject to change. The filing notes that audited reports will be submitted in a future Form 6-K.
Investor Verification Checklist
- Verify the final audited financial statements for FY2019 when filed, as the current figures are unaudited.
- Confirm the outcome of the director elections, specifically the appointment of Dennis Chan as an outside director.
- Monitor the implementation of the electronic registration of shares and bonds as per the amended Articles of Incorporation.
- Review the future Form 6-K for the detailed audit reports and any adjustments to the regulatory reserve for credit loss.
- Assess the impact of the significant decrease in hybrid securities on the company's capital structure and liquidity.