Woori Financial Group Inc. - Form 6-K Summary (Period Ended June 30, 2019)
Business Context and Reporting Period
This Form 6-K, filed on August 14, 2019, summarizes the first-half (1H) 2019 business and financial results of Woori Financial Group Inc. The Group was established on January 11, 2019, via a comprehensive stock transfer of Woori Bank and five other subsidiaries, and listed on the Korea Exchange (KRX) on February 13, 2019. The financial statements are prepared in accordance with Korean IFRS (K-IFRS).
Key Financial Metrics
- Revenue: Operating income for 1H 2019 was KRW 1,710.4 billion. Net interest income was KRW 2,931.1 billion, and net fees and commissions income was KRW 560.1 billion.
- Profit: Net income attributable to owners was KRW 1,179.7 billion. Total net income (including non-controlling interests) was KRW 1,272.0 billion.
- Profitability: Return on Assets (ROA) was 0.68% (excluding non-controlling interests) and 0.73% (including). Return on Equity (ROE) was 12.50% (excluding) and 13.48% (including).
- Balance Sheet: Total assets reached KRW 359.4 trillion. Total liabilities were KRW 336.6 trillion, and total equity was KRW 22.8 trillion.
- Liquidity and Capital: The Group's BIS Capital Adequacy Ratio was 11.10%. Woori Bank's Liquidity Coverage Ratio (LCR) was 105.36%.
- Asset Quality: The Non-Performing Loan (NPL) ratio was 0.44%. Substandard and below loans totaled KRW 1,240 billion.
Material Changes vs. Prior Period
Comparisons to the prior year (2018) are limited as the Group was established in January 2019. However, the filing provides comparative data for the underlying consolidated entities:
- Operating Income: Decreased to KRW 1,710.4 billion in 1H 2019 from KRW 1,807.7 billion in 1H 2018.
- Net Income: Decreased to KRW 1,272.0 billion in 1H 2019 from KRW 1,316.3 billion in 1H 2018.
- Asset Growth: Total assets increased from KRW 340.4 trillion at the end of 2018 to KRW 359.4 trillion in 1H 2019.
- Impairment: The Group recorded impairment losses due to credit loss of KRW 136.5 billion in 1H 2019, compared to a gain of KRW 28.4 billion in 1H 2018.
Guidance, Outlook, and Risks
The filing does not contain specific forward-looking guidance or management commentary regarding future earnings projections. Key risks and contingencies noted include:
- Accounting Standards: Financial information is prepared under K-IFRS, which differs in certain respects from U.S. GAAP.
- Capital Adequacy: The 1H 2019 capital adequacy ratios are preliminary and subject to change.
- Asset Quality: While NPL ratios remain low (0.44%), the coverage ratio for substandard loans is 131.6%.
- Corporate Structure: The Group underwent significant restructuring in 2019, moving Woori Investment Bank and Woori Card to first-tier subsidiaries and acquiring several asset management firms.
Investor Verification Checklist
- Verify the impact of K-IFRS accounting standards on reported figures compared to U.S. GAAP.
- Confirm the finalization of preliminary capital adequacy ratios (BIS and LCR) for the full year.
- Monitor the trend in impairment losses, which shifted from a gain in 1H 2018 to a loss in 1H 2019.
- Review the integration progress of newly acquired subsidiaries (e.g., Tongyang Asset Management, Woori Investment Bank).
- Check the stability of the largest shareholder, Korea Deposit Insurance Corporation (KDIC), which holds 18.32% of shares.