Business Context and Reporting Period
This Form 6-K filing by Woori Financial Group Inc. (Woori Bank) serves as a convocation notice for the Annual General Meeting of Shareholders scheduled for March 27, 2015. The filing includes the Consolidated and Separate Financial Statements for the fiscal year ended December 31, 2014. The reporting period covers the full year 2014, with comparative data provided for 2013.
Key Financial Metrics (FY 2014)
Revenue and Profit (Consolidated):
- Net Interest Income: 4,493,018 million KRW (flat vs. 2013).
- Net Fees and Commissions Income: 917,015 million KRW (down from 926,501 million KRW).
- Operating Income: 897,708 million KRW (up from 239,567 million KRW).
- Net Income (Continuing Operations): 546,200 million KRW (up from 252,571 million KRW).
- Net Income (Total): 1,207,969 million KRW (significant turnaround from a loss of 713,435 million KRW in 2013, driven by discontinued operations).
- Net Income Attributable to Owners: 1,213,980 million KRW.
- Earnings Per Share (Basic/Diluted): 1,621 KRW (vs. loss of 704 KRW in 2013).
Balance Sheet (Consolidated as of Dec 31, 2014):
- Total Assets: 270,157,219 million KRW (down from 340,690,382 million KRW in 2013 due to disposal of subsidiaries).
- Total Liabilities: 252,063,794 million KRW.
- Total Equity: 18,093,425 million KRW.
- Cash and Cash Equivalents: 5,962,861 million KRW.
- Loans and Receivables: 223,370,135 million KRW.
- Deposits due to Customers: 188,516,465 million KRW.
- Debentures: 24,795,904 million KRW.
Cash Flow (Consolidated):
- Net Cash Used in Operating Activities: 281,244 million KRW (improved from net cash used of 2,997,949 million KRW in 2013).
- Net Cash Used in Investing Activities: 1,141,012 million KRW.
- Net Cash Provided by Financing Activities: 311,427 million KRW.
Material Changes vs. Prior Period
- Discontinued Operations: The 2014 net income includes a gain of 661,769 million KRW from discontinued operations, compared to a loss of 966,006 million KRW in 2013. This is the primary driver of the year-over-year profit swing.
- Asset Reduction: Total assets decreased by approximately 70.5 trillion KRW. This reduction is largely attributed to the disposal of subsidiaries and the spin-off of the credit card division, which were classified as "disposal groups held for sale" or "distribution to owners" in 2013 but are absent in 2014.
- Impairment Losses: Impairment losses due to credit loss decreased significantly to 1,096,940 million KRW in 2014 from 2,277,260 million KRW in 2013.
- Equity Structure: Hybrid securities increased from 498,407 million KRW in 2013 to 2,538,823 million KRW in 2014, reflecting new issuances and the merger with Woori Financial Holdings.
- Non-Controlling Interests: Non-controlling interests dropped drastically from 5,029,136 million KRW in 2013 to 109,924 million KRW in 2014, consistent with the disposal of subsidiaries.
Guidance, Outlook, and Corporate Actions
Annual General Meeting Agenda:
- Approval of financial statements for FY 2014.
- Appointment of 2 directors (Soo-Kyung Chung, Joon-Ki Kim) and 6 outside directors.
- Appointment of Audit Committee members.
- Approval of the maximum limit on directors' compensation (set at 3 billion KRW for 2015, same as 2014).
Dividend Plan:
- The filing proposes a cash dividend of 500 KRW per common share (10.0% yield), totaling 336,635 million KRW.
- Dividends on hybrid securities are also proposed.
Corporate Restructuring:
- The 2014 financials reflect the completion of the merger between Woori Bank and Woori Financial Holdings.
- The spin-off of the credit card division and the disposal of other subsidiaries (including the Indonesia Woori Bank merger with Saudara Bank) have been finalized, removing these entities from the consolidated scope.
Risks and Contingencies:
- Credit Risk: Regulatory reserve for credit loss was 1,800,387 million KRW as of Dec 31, 2014.
- Market Risk: The bank holds significant financial assets at fair value through profit or loss (4,554,180 million KRW) and available-for-sale assets (18,810,845 million KRW), exposing it to market volatility.
Investor Verification Checklist
- Discontinued Operations Impact: Verify the sustainability of earnings by analyzing the 661,769 million KRW gain from discontinued operations, as this masks the underlying performance of continuing operations.
- Asset Quality: Review the specific composition of the 1,096,940 million KRW in credit impairment losses and the adequacy of the 1.8 trillion KRW regulatory reserve.
- Capital Adequacy: Assess the impact of the 2.5 trillion KRW in hybrid securities on the bank's capital structure and dividend obligations.
- Dividend Payout: Confirm the final approval of the 500 KRW per share dividend at the March 27, 2015 meeting.
- Post-Spin-off Performance: Evaluate the standalone performance of the bank following the credit card division spin-off and subsidiary disposals.