Business Context and Reporting Period
This Form 6-K filing by Woori Financial Group Inc. (Woori Bank), dated March 6, 2017, serves as a convocation notice for the Annual General Meeting of Shareholders scheduled for March 24, 2017. The filing includes the audited consolidated and separate financial statements for the fiscal year ended December 31, 2016, and proposes amendments to the Articles of Incorporation regarding the composition of the Audit Committee.
Key Financial Metrics (Fiscal Year 2016)
Financial data is presented in Korean Won (KRW) in millions, unless otherwise noted.
| Metric | 2016 | 2015 |
|---|---|---|
| Net Interest Income | 5,019,544 | 4,761,900 |
| Net Fees and Commissions Income | 937,131 | 976,796 |
| Operating Income | 1,574,206 | 1,351,586 |
| Net Income | 1,277,533 | 1,075,392 |
| Net Income (After Regulatory Reserve) | 1,094,594 | 576,282 |
| Total Assets | 310,682,727 | 291,859,072 |
| Total Equity | 20,545,953 | 19,309,915 |
| Cash and Cash Equivalents | 7,591,324 | 6,644,055 |
| Loans and Receivables | 258,392,633 | 244,842,062 |
| Deposits due to Customers | 221,020,411 | 209,141,826 |
| Net Cash from Operating Activities | 4,905,285 | (383,906) |
| Basic EPS (KRW) | 1,567 | 1,301 |
Material Changes vs. Prior Period
- Profitability Growth: Net income increased by approximately 18.8% year-over-year, driven by higher net interest income and a significant reduction in impairment losses on credit loss (decreased from 966,646 million KRW in 2015 to 834,076 million KRW in 2016).
- Asset Expansion: Total assets grew by roughly 6.4% to 310.7 trillion KRW, with loans and receivables increasing by 13.5 trillion KRW.
- Cash Flow Improvement: Net cash provided by operating activities swung from a negative 383.9 billion KRW in 2015 to a positive 4.9 trillion KRW in 2016, largely due to changes in operating assets and liabilities, specifically a smaller net increase in loans and a larger increase in deposits compared to the prior year.
- Dividend Increase: The proposed cash dividend per share increased from 250 KRW (5.0% yield) in 2015 to 400 KRW (8.0% yield) for 2016.
Guidance, Outlook, and Governance
The filing does not contain forward-looking financial guidance or management commentary regarding future market conditions. However, it outlines specific governance actions to be voted upon at the Annual General Meeting:
- Management Appointments: Approval of Kwang-Goo Lee as President & CEO and Standing Director, and Jung-Sik Oh as a Standing Director and Audit Committee member (non-outside director).
- Articles of Incorporation Amendment: A proposed change to Article 42 regarding the Audit Committee. The amendment changes the requirement from "shall have" one or more standing Audit Committee members to "may have" such members, cited as an improvement to Audit Committee operations. This amendment is proposed to become effective June 30, 2017.
- Compensation: Approval of the maximum limit on directors' compensation, maintained at 3.2 billion KRW for 2017, consistent with 2016.
Investor Verification Checklist
- Regulatory Reserve Impact: Verify the impact of the regulatory reserve for credit loss (2,255,252 million KRW as of Dec 31, 2016) on distributable earnings versus reported net income.
- Asset Quality: Review the detailed breakdown of the 834 billion KRW impairment losses on credit loss to assess loan portfolio health.
- Hybrid Securities: Confirm the terms and classification of the 3.57 trillion KRW in hybrid securities included in equity.
- Dividend Payout: Validate the final dividend declaration and payment schedule following the AGM vote.
- Corporate Governance: Monitor the implementation of the Audit Committee amendment effective June 30, 2017.