Business Context and Reporting Period
This Form 6-K filing by Woori Financial Group Inc. (Woori Bank) serves as a convocation notice for the Annual General Meeting of Shareholders scheduled for March 27, 2019. The filing includes unaudited consolidated and separate financial statements for the fiscal year ended December 31, 2018, prepared in accordance with K-IFRS 1109. Comparative data for 2017 is presented but was not retrospectively restated for K-IFRS 1109 adoption.
Key Financial Metrics (Consolidated)
| Metric (KRW Millions) | 2018 | 2017 |
|---|---|---|
| Total Assets | 340,447,183 | 316,295,461 |
| Net Interest Income | 5,650,951 | 5,220,650 |
| Operating Income | 2,759,301 | 2,156,742 |
| Net Income | 2,051,649 | 1,530,088 |
| Net Income (After Regulatory Reserve) | 2,010,774 | 1,389,822 |
| Impairment Losses (Credit Loss) | (329,574) | (785,133) |
| Cash and Cash Equivalents (End of Period) | 6,712,623 | 6,908,286 |
| Deposits Due to Customers | 248,690,939 | 234,695,084 |
| Total Equity | 21,953,044 | 20,564,900 |
Material Changes vs. Prior Period
- Profitability Growth: Net income increased by approximately 34% year-over-year, driven by a significant reduction in impairment losses due to credit loss (down from 785 billion KRW in 2017 to 330 billion KRW in 2018).
- Asset Expansion: Total assets grew by roughly 7.6% to 340.4 trillion KRW, with loans and other financial assets at amortized cost increasing by 15.3 trillion KRW.
- Accounting Standard Change: The 2018 financials reflect the adoption of K-IFRS 1109. This resulted in a cumulative effect adjustment to equity of (215 billion KRW) at the beginning of 2018. Comparative 2017 figures are not restated, limiting direct line-item comparability for certain asset classifications (e.g., FVTPL vs. AFS/HTM).
- Fee Income Decline: Net fees and commissions income remained relatively flat, with gross fees and commissions income declining from 2.07 trillion KRW in 2017 to 1.68 trillion KRW in 2018, offset by a reduction in related expenses.
Guidance, Outlook, and Corporate Actions
- Annual General Meeting: The filing announces the AGM to approve 2018 financial statements and appoint a standing director.
- Director Appointment: Jung-Sik Oh is nominated as a standing director and an audit committee member (non-outside director) for a term ending March 2020. He has no reported relationship with the majority shareholder or transactions with the company in the past three years.
- Compensation: The maximum limit on directors' compensation is proposed to remain at 3.2 billion KRW for 2019, consistent with 2018.
- Regulatory Reserves: The regulatory reserve for credit loss stood at 2.58 trillion KRW as of December 31, 2018. Net income after this provision was 2.01 trillion KRW.
- Unusual Items: The filing notes a net loss on valuation of equity securities at FVTOCI of 30.9 billion KRW and a remeasurement loss on the net defined benefit liability of 71.4 billion KRW included in other comprehensive loss.
Investor Verification Checklist
- Audit Status: Verify the final audited financial statements, as the figures in this filing are unaudited and subject to change.
- K-IFRS 1109 Impact: Confirm the full impact of the accounting standard change on asset classification and credit loss provisioning in the final audit report.
- Regulatory Reserve: Review the specific calculation and future requirements for the regulatory reserve for credit loss (2.58 trillion KRW) to understand its effect on distributable earnings.
- Director Background: Verify the qualifications and independence of the newly appointed standing director, Jung-Sik Oh, particularly regarding his prior roles at KB Capital and Citibank.
- Cash Flow Volatility: Note the significant swing in net cash provided by operating activities, which turned positive (9.1 trillion KRW) in 2018 after being negative (1.9 trillion KRW) in 2017, largely due to changes in financial assets and liabilities.