Woori Finance Holdings Co., Ltd. - Form 6-K Summary
Business Context and Reporting Period
This Form 6-K, filed on May 15, 2013, reports the First Quarter (1Q) 2013 business and financial results for Woori Finance Holdings Co., Ltd., a South Korean financial holding company. The company operates through a diversified portfolio of subsidiaries including Woori Bank, Woori Investment & Securities, Woori Aviva Life Insurance, and Woori Financial. Financial statements are prepared in accordance with Korean IFRS.
Key Financial Metrics (Consolidated)
| Metric | 2013 1Q | 2012 Full Year | Unit |
|---|---|---|---|
| Total Assets | 327,612,484 | 327,101,814 | Millions KRW |
| Net Income (Total) | 251,027 | 1,797,875 | Millions KRW |
| Net Income (Attributable to Owners) | 209,963 | 1,583,580 | Millions KRW |
| Operating Income | 343,887 | 2,228,571 | Millions KRW |
| Net Interest Income | 1,684,885 | 7,267,103 | Millions KRW |
| Impairment Losses on Credit Losses | (552,609) | (2,121,102) | Millions KRW |
| Shareholders' Equity | 23,040,589 | 23,003,208 | Millions KRW |
| Earnings Per Share (Won) | 251 | 1,931 | Won |
Material Changes vs. Prior Period
- Profitability: Net income attributable to owners for 1Q 2013 was 209.96 billion KRW, a significant decrease compared to the full-year 2012 figure of 1.58 trillion KRW. On a sequential basis, 1Q 2013 net income (209.96 billion) was lower than 1Q 2012 (664.82 billion).
- Asset Growth: Total consolidated assets increased slightly to 327.6 trillion KRW in 1Q 2013 from 327.1 trillion KRW at the end of 2012.
- Impairment Charges: Impairment losses on credit losses decreased significantly to 552.6 billion KRW in 1Q 2013 compared to 2.12 trillion KRW for the full year 2012, though they remain a material expense.
- Capital Structure: Shareholders' equity remained relatively stable, increasing marginally by 37 billion KRW year-over-year.
Outlook, Risks, and Recent Developments
- Strategic Acquisitions: The company is planning to acquire a controlling stake in Kumho Investment Bank by purchasing unsubscribed shares from a rights offering. Success depends on acquiring at least 30% equity and receiving regulatory approval.
- Subsidiary Expansion: Woori FG Savings Bank acquired assets and liabilities from Solomon Savings Bank in September 2012 to expand its network in the Seoul metropolitan area. Woori Finance Research Institute was established in December 2012 as a wholly-owned subsidiary to serve as a "think tank."
- Corporate Governance: Following the March 22, 2013 shareholders' meeting, the Board of Directors includes Pal Seung Lee as Chairman and CEO. The board comprises several non-standing directors with backgrounds in law, economics, and public administration.
- Risk Factors: The filing notes that financial information is prepared under Korean IFRS, which differs from US GAAP. The company's main income source is dividends from subsidiaries, making it dependent on their performance.
Investor Verification Checklist
- Verify the status and regulatory approval timeline for the proposed acquisition of Kumho Investment Bank.
- Review the detailed breakdown of the 552.6 billion KRW impairment losses on credit losses to assess asset quality trends.
- Confirm the impact of the spin-off of Woori Card (incorporated April 1, 2013) on future revenue recognition and consolidation.
- Monitor the performance of Woori FG Savings Bank following its recent asset acquisitions.
- Check the latest credit ratings (currently AAA for debentures by KIS and NICE as of Feb 2013) for any changes.