Woori Finance Holdings Co., Ltd. - Form 6-K Summary
Business Context and Reporting Period
This Form 6-K, filed on March 31, 2014, summarizes the 2013 Business Report for Woori Finance Holdings Co., Ltd. (Woori Finance Holdings), a Korean financial holding company. The company operates through a diverse group of subsidiaries including Woori Bank, Woori Investment & Securities, Woori Aviva Life Insurance, and Woori Card. The reporting period covers the fiscal year ended December 31, 2013, with significant updates regarding the privatization and sale of subsidiaries occurring in early 2014.
Key Financial Metrics (Fiscal Year 2013)
Financial data is presented in millions of Won (KRW) unless otherwise noted. The company reported a net loss for 2013, primarily driven by discontinued operations related to the privatization process.
| Metric | 2013 (Consolidated) | 2012 (Consolidated) |
|---|---|---|
| Net Income | (713,435) | 1,847,679 |
| Net Income Attributable to Owners | (537,688) | 1,633,341 |
| Operating Income | 239,567 | 1,549,507 |
| Total Assets | 340,690,382 | 327,101,814 |
| Total Liabilities | 317,813,613 | 304,068,738 |
| Total Equity | 22,876,769 | 23,033,076 |
| Dividend Payout | 0 | 201,503 |
Note: The 2013 net loss includes a loss of 966,006 million Won from discontinued operations. Continuing operations generated a net income of 252,571 million Won.
Material Changes and Strategic Developments
- Privatization and Asset Sales: The company is undergoing a government-led privatization plan involving the segregation of subsidiaries into three groups (regional banks, investment/securities, and Woori Bank group) for sale.
- Woori Financial: Sold to KB Financial Group; transaction completed on March 20, 2014.
- Woori Asset Management: Sale to Kiwoom Securities agreed upon in February 2014.
- Regional Banks: Spin-off of Kwangju Bank and Kyongnam Bank approved in January 2014.
- Discontinued Operations: Operations of regional banks and several non-banking subsidiaries were classified as discontinued operations in 2013 due to the pending privatization.
- Subsidiary Restructuring: Woori Card was spun off from Woori Bank to become a wholly-owned subsidiary in April 2013. Kumho Investment Bank was acquired in 2013 and renamed Woori Investment Bank.
- Dividends: No cash dividends were paid in 2013 due to the net loss, compared to 250 Won per share in 2012.
Outlook, Risks, and Contingencies
The company's future financial performance is heavily contingent upon the successful completion of the privatization and sale of its subsidiaries. The classification of significant assets as "held for sale" or "discontinued operations" introduces volatility to reported earnings. The company faces risks associated with the timing and final valuation of these asset sales. Additionally, the company is subject to standard banking risks including credit risk, market risk, and liquidity risk, with a BIS ratio of 13.01% as of 2013 (Basel III basis).
Key Facts for Investor Verification
- Completion of Sales: Verify the final closing dates and proceeds for the sales of Woori Financial, Woori Asset Management, and the regional banks (Kwangju and Kyongnam).
- Discontinued Operations Impact: Assess the long-term impact of removing these subsidiaries from the consolidated financial statements on future revenue and earnings stability.
- Capital Structure: Monitor changes in the company's capital structure and debt levels following the receipt of proceeds from asset sales.
- Regulatory Approval: Confirm that all necessary regulatory approvals for the privatization plan and subsidiary spin-offs have been finalized.
- Accounting Standards: Note that financial statements are prepared under Korean IFRS, which may differ from US GAAP.