Woori Financial Group Inc. - 2023 Business Report Summary (Form 6-K)
Business Context and Reporting Period
This Form 6-K, filed on March 14, 2024, summarizes the 2023 Business Report for Woori Financial Group Inc., a Korean financial holding company. The report covers the fiscal year ended December 31, 2023. Financial data is prepared in accordance with Korean IFRS (K-IFRS). The Group consists of 179 consolidated subsidiaries, including Woori Bank, Woori Card, and Woori Investment Bank.
Key Financial Metrics (Fiscal Year 2023)
- Revenue: Operating income was KRW 3,499 billion (down from KRW 4,431 billion in 2022). Net interest income increased to KRW 8,743 billion.
- Profit: Net income attributable to owners was KRW 2,506 billion (down from KRW 3,142 billion in 2022). Earnings per share were KRW 3,230.
- Cash Flow & Liquidity: Total assets reached KRW 498.0 trillion. The Group's Won Liquidity Ratio was 1,372.1%. The Liquidity Coverage Ratio (LCR) for Woori Bank was 101.26%.
- Capital & Debt: Total equity was KRW 33.4 trillion. The Group BIS Capital Adequacy Ratio was 15.81%. Total liabilities were KRW 464.6 trillion, with deposits comprising the majority of funding sources (68.98%).
- Asset Quality: The Non-Performing Loan (NPL) ratio was 0.36%. The coverage ratio for substandard and below loans was 220.1%.
Material Changes vs. Prior Period
- Profitability Decline: Net income decreased by approximately 20% year-over-year, primarily driven by a significant increase in impairment losses due to credit loss (KRW 1,895 billion in 2023 vs. KRW 885 billion in 2022) and higher general and administrative expenses.
- Capital Structure: The number of issued common shares increased to 751.9 million (from 728.1 million in 2022) due to comprehensive stock exchanges with Woori Investment Bank and Woori Venture Partners. Treasury shares were canceled, reducing the share count by 8.6 million in October 2023.
- Shareholder Composition: The Employee Stock Ownership Association became the largest shareholder (5.85%), surpassing the Korea Deposit Insurance Corporation (KDIC), whose stake was reduced to 1.3% by the end of 2022 and further addressed in 2023.
- Dividend Policy: The Group introduced a Total Shareholder Return (TSR) policy, paying interim dividends and repurchasing/canceling treasury shares for the first time since becoming a holding company.
Guidance, Outlook, and Risks
- Shareholder Returns: Management resolved to pay a year-end dividend of KRW 640 per share, aiming for a TSR of approximately 33.8% for 2023. The policy targets a TSR of 35% or above when the CET1 ratio is 13.0% or higher.
- Strategic Focus: The Group is promoting selective growth based on Return on Risk Weighted Assets (RoRWA) and enhancing asset portfolios with low-risk, high-return assets.
- Risks & Contingencies: The filing notes that 2023 capital adequacy figures are estimates subject to change. The Group faces risks related to strengthening capital regulations and the competitive landscape. Impairment losses remain a significant variable affecting net income.
- ESG Initiatives: The Group obtained an 'AAA' rating from MSCI ESG assessment and validated its carbon emission reduction targets with the SBTi.
Key Facts for Investor Verification
- Verify the final approval of the KRW 640 per share year-end dividend at the Annual General Meeting of Shareholders.
- Monitor the final audited BIS Capital Adequacy Ratio, as the reported 15.81% is an estimate.
- Track the execution of the plan to acquire and cancel the remaining KDIC stake (1.2%) as resolved in March 2024.
- Assess the impact of rising interest rates on net interest income versus the increasing trend in credit impairment losses.
- Confirm the integration progress of Woori Investment Bank and Woori Venture Partners as wholly-owned subsidiaries following the August 2023 stock exchanges.