Woori Finance Holdings Co., Ltd. - Form 6-K Summary
Business Context and Reporting Period
This Form 6-K, filed on November 14, 2013, reports the Summary of the 2013 Third Quarter (3Q) Business Report for Woori Finance Holdings Co., Ltd. (Woori). The company is a financial holding company headquartered in Seoul, Korea, with operations spanning banking, securities, insurance, and asset management. The reporting period covers the nine months ended September 30, 2013. Financial statements are prepared in accordance with Korean IFRS.
Key Financial Metrics (Consolidated)
Financial data is presented in millions of Won (KRW) unless otherwise noted.
- Net Income: 524,992 (9 months ended Sept 30, 2013) vs. 1,797,875 (Full Year 2012). Net income attributable to owners was 407,841.
- Operating Income: 751,455 (9 months 2013) vs. 2,228,571 (Full Year 2012).
- Total Assets: 332,803,114 (Sept 30, 2013) vs. 327,101,814 (Dec 31, 2012).
- Total Equity: 23,785,848 (Sept 30, 2013) vs. 23,033,076 (Dec 31, 2012).
- Loans and Receivables: 257,011,286 (Sept 30, 2013).
- Deposits: 208,401,510 (Sept 30, 2013).
- Impairment Losses on Credit Losses: 1,992,883 (9 months 2013), a significant expense impacting profitability.
- Earnings Per Share (EPS): 479 Won (9 months 2013) vs. 1,931 Won (Full Year 2012).
- BIS Ratio: 12.71% (Preliminary 3Q 2013).
Material Changes and Operational Developments
Several significant structural and operational changes occurred during the period:
- Spin-off of Woori Card: In April 2013, the credit card business was spun off from Woori Bank to become a wholly-owned subsidiary (Woori Card) to enhance competitiveness.
- Acquisition of Kumho Investment Bank: In June 2013, Woori acquired a 41.6% equity stake in Kumho Investment Bank, renaming it Woori Investment Bank in October 2013.
- Establishment of Research Institute: Woori Finance Research Institute was established as a separate legal entity in December 2012 to serve as a "think tank."
- Privatization Plan: In June 2013, the Public Funds Oversight Committee announced a privatization plan to segregate subsidiaries into three groups (regional banks, investment/securities, and Woori Bank) for potential sale. The Korea Deposit Insurance Corporation (KDIC), the majority shareholder, initiated sale processes for Kwangju Bank and Kyongnam Bank in July 2013, and the investment/securities group in August 2013.
- Management Change: Soon-Woo Lee was appointed Chairman and CEO in June 2013.
Outlook, Risks, and Contingencies
The filing highlights significant strategic risks and contingencies related to the ongoing privatization and restructuring of the group. The sale of equity interests in regional banks and the investment/securities group introduces uncertainty regarding future ownership structures and operational control. Additionally, the group faces credit risk exposure, evidenced by high impairment losses (1,992,883 million Won) and significant sub-standard loan exposures, particularly in the shipbuilding sector. The filing notes that 2013 3Q financial figures reflect amendments to Korean IFRS regarding consolidation scope and employee benefits, which may affect comparability with prior periods.
Investor Verification Checklist
- Verify the status and timeline of the privatization plan and the sale processes for Kwangju Bank, Kyongnam Bank, and the investment/securities group.
- Review the detailed composition of the 1,992,883 million Won impairment losses on credit losses and the specific exposure to the shipbuilding industry.
- Confirm the impact of the Woori Card spin-off on consolidated revenue streams and fee income classification.
- Assess the integration progress and asset quality stabilization of the newly acquired Woori Investment Bank (formerly Kumho).
- Monitor the BIS ratio and capital adequacy levels in light of the restructuring and potential divestitures.