Woori Financial Group Inc. - 2021 Business Report Summary (Form 6-K)
Business Context and Reporting Period
This Form 6-K, filed on March 17, 2022, summarizes the 2021 Business Report for Woori Financial Group Inc. (Woori), a Korean financial holding company. The report covers the fiscal year ended December 31, 2021. Financial data is prepared in accordance with Korean IFRS (K-IFRS). The group consists of Woori Bank, Woori Card, Woori Investment Bank, and various asset management and trust subsidiaries.
Key Financial Metrics (Fiscal Year 2021)
| Metric | 2021 Value | Unit |
|---|---|---|
| Operating Income | 3,660 | Billion KRW |
| Net Income (Consolidated) | 2,807 | Billion KRW |
| Net Income (Attributable to Owners) | 2,588 | Billion KRW |
| Total Assets | 447,184 | Billion KRW |
| Total Equity | 28,850 | Billion KRW |
| Group BIS Capital Adequacy Ratio | 15.05 | % |
| Return on Assets (ROA) | 0.66 | % |
| Return on Equity (ROE) | 11.48 | % |
| Non-Performing Loan (NPL) Ratio | 0.27 | % |
| Cash Dividend Payout Ratio | 25.29 | % |
Material Changes vs. Prior Period
- Profitability Surge: Net income attributable to owners increased significantly to KRW 2.59 trillion in 2021, up from KRW 1.31 trillion in 2020. Operating income rose to KRW 3.66 trillion from KRW 2.08 trillion.
- Asset Growth: Total assets grew to KRW 447.2 trillion, an increase from KRW 399.1 trillion in 2020. Loans and other financial assets at amortized cost increased to KRW 361.9 trillion.
- Capital Strength: The Group BIS Capital Adequacy Ratio improved to 15.05% in 2021, up from 13.84% in 2020, driven by the full adoption of the Internal Rating Based (IRB) approach.
- Asset Quality Improvement: The NPL ratio decreased to 0.27% from 0.38% in 2020. The coverage ratio for substandard and below loans improved to 192.2% from 153.8%.
- Shareholder Structure: The Employee Stock Ownership Association became the largest shareholder (9.82%) in December 2021, replacing the Korea Deposit Insurance Corporation (KDIC) following KDIC's partial stake sales.
Guidance, Outlook, and Management Commentary
- Dividend Policy: Management plans to gradually increase the dividend payout ratio to around 30% in the mid-to-long term. In 2021, the company paid interim dividends for the first time since its establishment.
- ESG Initiatives: The company joined the Science Based Targets initiative (SBTi) and obtained an 'AA' rating from MSCI's ESG assessment. A Board ESG Management Committee was established in March 2021.
- Regulatory Environment: The company noted that liquidity coverage ratio requirements for banks were temporarily reduced due to COVID-19 regulations until March 2022.
- Strategic Acquisitions: In 2021, the group completed the integration of Woori Financial Capital as a wholly-owned subsidiary and launched the integrated car finance platform "Woori WON Car."
Investor Verification Checklist
- Accounting Standards: Verify the impact of K-IFRS differences compared to U.S. GAAP, particularly regarding financial asset classification and impairment losses.
- Capital Adequacy Methodology: Confirm the transition to the full Internal Rating Based (IRB) approach for 2021 capital adequacy calculations and its effect on risk-weighted assets.
- Dividend Finalization: Note that the year-end dividend amount for FY2021 was subject to approval at the annual general meeting of shareholders.
- Shareholder Changes: Monitor the ongoing reduction of the Korea Deposit Insurance Corporation's stake and the resulting shift in control dynamics.
- Subsidiary Performance: Review individual subsidiary metrics (e.g., Woori Bank vs. Woori Card) as profitability and asset quality ratios vary significantly across the group.