Woori Financial Group Inc. (Woori Bank) - Form 6-K Summary
Business Context and Reporting Period
This Form 6-K, filed on November 14, 2017, reports the consolidated and separate financial results for Woori Bank for the third quarter ended September 30, 2017. The bank operates under Korean IFRS standards. The reporting period covers the nine months ended September 30, 2017, with comparative data provided for the same period in 2016 and full-year 2016.
Key Financial Metrics
| Metric | 3Q 2017 (Consolidated) | 3Q 2016 (Consolidated) | Unit |
|---|---|---|---|
| Net Income | 1,392,441 | 1,117,179 | Millions of Won |
| Net Income Attributable to Owners | 1,378,507 | 1,105,915 | Millions of Won |
| Operating Income | 1,801,916 | 1,389,221 | Millions of Won |
| Total Assets | 317,875,162 | 310,682,727 | Millions of Won |
| Total Deposits | 226,344,233 | 221,020,411 | Millions of Won |
| Total Loans | 266,972,072 | 258,392,633 | Millions of Won |
| Capital Adequacy Ratio (BIS) | 15.20% | 15.29% | Percentage |
| Liquidity Coverage Ratio (LCR) | 102.29% | 109.61% | Percentage |
| Earnings Per Share (Basic) | 1,855 | 1,421 | Won |
Material Changes vs. Prior Period
- Profitability Growth: Net income attributable to owners increased by approximately 24.7% year-over-year (from 1.11 trillion Won in 3Q 2016 to 1.38 trillion Won in 3Q 2017). Operating income rose by 29.6%.
- Asset Expansion: Total assets grew by 2.3% to 317.9 trillion Won, driven by increases in loans and receivables and held-to-maturity financial assets.
- Asset Quality Improvement: The sub-standard and below loan ratio improved significantly, dropping from 0.98% in 2016 to 0.73% in 3Q 2017. The overall delinquency ratio decreased to 0.38% from 0.46%.
- Dividend Policy: The cash dividend payout ratio for 3Q 2017 was 4.88%, significantly lower than the 21.35% recorded in the full year 2016, reflecting the interim nature of the quarterly dividend (100 Won per share).
Outlook, Risks, and Management Commentary
- Strategic Developments: The bank continues to expand its digital footprint, having launched "SORi," the first voice recognition AI banking service in Korea, in March 2017. It also expanded its overseas network with new branches in India and Poland.
- Shareholder Structure: The Korea Deposit Insurance Corporation (KDIC) continued to reduce its stake, holding 18.52% as of September 30, 2017, down from 23.37% at the beginning of the period. This reflects ongoing privatization efforts.
- Liquidity and Capital: The bank maintains a strong capital position with a BIS ratio of 15.20%, well above regulatory requirements. The Liquidity Coverage Ratio (LCR) stands at 102.29%, exceeding the minimum requirement.
- Risks: The filing notes that financial information is prepared under Korean IFRS, which differs from US GAAP. The bank faces standard banking risks including credit risk, market risk, and liquidity risk, though asset quality metrics show improvement.
Key Facts for Investor Verification
- Accounting Standards: Verify the impact of Korean IFRS vs. US GAAP on reported earnings and asset valuations.
- Dividend Yield: Confirm the annualized dividend yield based on the quarterly payout of 100 Won per share versus the full-year historical payouts.
- Non-Performing Loans (NPLs): Monitor the trend of the sub-standard loan ratio (0.73%) to ensure continued improvement in asset quality.
- Capital Adequacy: Track the BIS Capital Adequacy Ratio (15.20%) against Basel III requirements and peer benchmarks.
- Shareholder Dilution/Privatization: Observe the continued reduction of KDIC's ownership stake and the potential impact on future governance or capital raising.