Woori Financial Group Inc. (Woori Bank) - Form 6-K Summary
Business Context and Reporting Period
This Form 6-K, filed on March 30, 2016, summarizes the 2015 Business Report for Woori Bank (the "Bank"). The Bank is a major financial institution in the Republic of Korea, operating under Korean IFRS. The reporting period covers the fiscal year ended December 31, 2015. A significant corporate event during the prior year was the merger of Woori Finance Holdings into Woori Bank on November 1, 2014, which altered the consolidated structure and share capital.
Key Financial Metrics (Fiscal Year 2015)
| Metric | 2015 Value | Unit |
|---|---|---|
| Net Income (Consolidated) | 1,075,392 | Millions of Won |
| Net Income Attributable to Owners | 1,059,157 | Millions of Won |
| Operating Income | 1,351,586 | Millions of Won |
| Total Assets | 291,859,072 | Millions of Won |
| Total Deposits | 209,141,826 | Millions of Won |
| Total Loans | 203,109,346 | Millions of Won |
| Capital Adequacy Ratio (Basel III) | 13.66 | % |
| Liquidity Coverage Ratio | 106.67 | % |
| Earnings Per Share (Basic) | 1,301 | Won |
| Cash Dividend Per Share | 500 | Won |
Material Changes vs. Prior Period
- Profitability: Consolidated net income decreased to KRW 1.075 trillion in 2015 from KRW 1.208 trillion in 2014. This decline is partially attributed to the absence of income from discontinued operations in 2015, which contributed KRW 661.8 billion in 2014.
- Asset Growth: Total assets increased by approximately 8% to KRW 291.9 trillion, driven by growth in loans and receivables.
- Asset Quality: The sub-standard and below loan ratio improved significantly, dropping from 2.10% in 2014 to 1.47% in 2015. The delinquency ratio also decreased from 0.88% to 0.82%.
- Capital Structure: Following the 2014 merger, the Bank retired 278,371 shares in October 2015. The Korea Deposit Insurance Corporation (KDIC) remains the largest shareholder with a 51.06% stake.
- Cost of Funds: The average interest rate on local currency deposits decreased from 2.22% in 2014 to 1.70% in 2015, reflecting a lower interest rate environment.
Outlook, Risks, and Management Commentary
- Strategic Initiatives: The Bank continued to expand its digital footprint, launching "WiBee Bank" (a mobile-only bank) in May 2015 and the "Woori-Samsung Pay Service" in August 2015. It also expanded overseas with the launch of WiBee Bank Cambodia.
- Capital Adequacy: The Bank maintained a capital adequacy ratio of 13.66% under Basel III standards. Management notes that excluding five newly included subsidiaries post-merger, the ratio would have been 15.15%.
- Risks and Contingencies: The filing highlights exposure to credit risk, with total loans exceeding KRW 203 trillion. While asset quality metrics improved, the Bank maintains provisions for credit losses. The Bank is subject to regulatory changes in Korea and international markets, including Basel III implementation.
- Dividends: The Bank paid a cash dividend of KRW 500 per share in 2015, resulting in a payout ratio of 31.8% and a yield of 5.5%.
Key Facts for Investor Verification
- Accounting Standards: Financial data is prepared under Korean IFRS (K-IFRS), which may differ from U.S. GAAP.
- Discontinued Operations: The 2014 net income figure includes significant gains from discontinued operations (KRW 661.8 billion); 2015 figures do not include such items, making year-over-year net income comparisons require adjustment.
- Shareholder Structure: The Korea Deposit Insurance Corporation holds a controlling interest (51.06%), which may influence corporate governance and strategic decisions.
- Merger Impact: The 2014 merger with Woori Finance Holdings fundamentally changed the consolidated entity; 2013 comparative figures have been restated to reflect the merged entity.
- Asset Quality Exclusions: The reported sub-standard loan ratio of 1.47% includes four shipbuilders; excluding them, the ratio is 1.24%. Investors should verify the specific exposure to the shipbuilding sector.