Business Context and Reporting Period
This Form 6-K filing by Woori Financial Group Inc. (Woori Bank), dated March 12, 2015, submits the independent audit reports for the fiscal year ended December 31, 2014. The filing covers both consolidated and non-consolidated financial statements. A significant structural change occurred on November 1, 2014, when Woori Finance Holdings Co., Ltd. merged into Woori Bank, affecting the comparability of FY 2013 figures which are based on the pre-merger holding company structure.
Key Financial Metrics (Consolidated)
Units: KRW (Korean Won)
| Item | FY 2014 | FY 2013 |
|---|---|---|
| Revenue | 17,584,425,271,654 | 19,486,806,017,233 |
| Operating Income | 897,709,374,021 | 239,565,674,004 |
| Income Before Tax | 834,395,134,026 | 287,664,906,507 |
| Net Income | 1,207,969,578,926 | -713,437,130,629 |
| Total Assets | 270,157,218,887,548 | 340,690,382,815,526 |
| Total Liabilities | 252,063,793,538,302 | 317,813,613,734,789 |
| Total Shareholders' Equity | 18,093,425,349,246 | 22,876,769,080,737 |
Non-Consolidated Net Income: 646,298,336,263 KRW (FY 2014) vs. 394,332,924,907 KRW (FY 2013).
Capitalization: Shareholders' Equity to Capital Stock ratio was 531.8% in FY 2014 compared to 442.9% in FY 2013.
Material Changes vs. Prior Period
- Profitability Turnaround: Consolidated Net Income swung from a loss of approximately 713 billion KRW in FY 2013 to a profit of approximately 1.21 trillion KRW in FY 2014. Operating Income more than tripled from 240 billion KRW to 898 billion KRW.
- Revenue Decline: Total revenue decreased by approximately 9.8% year-over-year, dropping from 19.49 trillion KRW to 17.58 trillion KRW.
- Balance Sheet Contraction: Total Assets decreased significantly by approximately 70.5 trillion KRW (20.7%), and Total Liabilities decreased by approximately 65.7 trillion KRW (20.7%). This contraction is attributed to the merger of Woori Finance Holdings into Woori Bank, which eliminated intercompany balances.
- Subsidiary Count: The number of consolidated subsidiaries dropped from 173 in FY 2013 to 78 in FY 2014 due to the merger.
Guidance, Outlook, and Risks
The filing text does not provide specific forward-looking guidance, management commentary on future outlook, or a detailed discussion of risks and contingencies beyond the submission of the audit reports. The independent auditor issued an Unqualified Opinion for both the consolidated and non-consolidated financial statements.
Investor Verification Checklist
- Merger Impact: Verify the specific accounting adjustments made regarding the November 1, 2014 merger of Woori Finance Holdings to understand the asset/liability reduction.
- Revenue Composition: Analyze the breakdown of the 9.8% revenue decline to determine if it stems from interest rate spreads, fee income, or fair value adjustments.
- Non-Controlling Interests: Note the difference between Consolidated Net Income (1.21 trillion KRW) and Income Attributable to Controlling Interests (1.21 trillion KRW) to assess the impact of non-controlling interests.
- Capital Adequacy: Confirm the regulatory capital ratios given the significant change in the equity-to-capital-stock metric.