Woori Financial Group Inc. (Woori Bank) - Form 6-K Summary
Business Context and Reporting Period
This Form 6-K, filed on November 14, 2018, summarizes the business and financial results of Woori Bank for the third quarter ended September 30, 2018. The bank operates under Korean IFRS (K-IFRS) and is a major financial institution in South Korea with a global network exceeding 410 locations. The reporting period covers consolidated and separate financial statements, operational performance, and corporate governance updates.
Key Financial Metrics (3Q 2018)
| Metric | Value (KRW) | Unit |
|---|---|---|
| Net Income (Consolidated) | 1,920,852 | Millions |
| Net Income Attributable to Owners | 1,903,406 | Millions |
| Operating Income | 2,573,529 | Millions |
| Total Assets | 329,801,636 | Millions |
| Total Deposits | 237,359,059 | Millions |
| Total Loans | 224,730,019 | Millions |
| Capital Adequacy Ratio (BIS) | 15.87 | % |
| Liquidity Coverage Ratio (LCR) | 102.77 | % |
| Earnings Per Share (Basic) | 2,661 | Won |
Material Changes vs. Prior Period
- Profitability Surge: Net income attributable to owners increased significantly to KRW 1.90 trillion in 3Q 2018, compared to KRW 1.38 trillion in 3Q 2017. This represents a year-over-year increase of approximately 38%.
- Asset Quality Improvement: The sub-standard and below loan ratio improved markedly to 0.46% in 3Q 2018, down from 0.83% in 2017 and 0.98% in 2016. Corporate sub-standard loans decreased from 1.37% to 0.65%.
- Balance Sheet Growth: Total assets grew to KRW 329.8 trillion, an increase from KRW 316.3 trillion in 2017. Total deposits rose to KRW 237.4 trillion from KRW 234.7 trillion.
- Impairment Reduction: Impairment losses due to credit loss decreased substantially to KRW 55.4 billion in 3Q 2018, compared to KRW 501.0 billion in 3Q 2017.
Outlook, Risks, and Management Commentary
- Strategic Developments: The bank implemented a new core banking system ("WINI") in May 2018 and expanded its global footprint by acquiring WB Finance in Cambodia in June 2018, bringing its global network to 410 locations.
- Liquidity Position: The bank maintains a strong liquidity position with a Liquidity Coverage Ratio (LCR) of 102.77% and a Foreign Currency LCR of 110.02%, both exceeding regulatory minimums.
- Capital Strength: The Capital Adequacy Ratio stands at 15.87%, well above regulatory requirements, indicating robust capital buffers.
- Dividends: No cash dividends were declared for the 3Q 2018 period. The filing notes that 2017 figures included interim dividends.
- Risks: While specific forward-looking risk factors are not detailed in this summary section, the bank monitors credit risk closely, as evidenced by the significant improvement in non-performing loan ratios. The filing notes that financial information is prepared under K-IFRS, which differs in certain respects from US GAAP.
Key Facts for Investor Verification
- Accounting Standards: Verify the impact of K-IFRS vs. US GAAP on financial metrics, particularly regarding financial asset classifications (FVTPL, FVTOCI) and impairment models.
- Shareholder Structure: The Korea Deposit Insurance Corporation (KDIC) remains the largest shareholder with 18.43% ownership, having reduced its stake from over 50% in 2015 through privatization efforts.
- Related Party Transactions: Review extensions of credit to major shareholders, including KRW 750 billion in loans to KDIC and KRW 100 billion to Woori Card.
- Subsidiary Performance: Assess the contribution of 62 consolidated subsidiaries, including Woori Card and Woori Investment Bank, to the overall consolidated results.
- Regulatory Compliance: Confirm ongoing compliance with Basel III requirements and local Korean banking regulations regarding capital and liquidity ratios.