Woori Finance Holdings Co., Ltd. - Form 6-K Summary
Business Context and Reporting Period
This Form 6-K, filed on November 29, 2011, summarizes the 2011 Third Quarter (3Q) business report for Woori Finance Holdings Co., Ltd. (Woori Finance Holdings). The company operates as a financial holding company under the Financial Holding Company Act, with primary income derived from dividends paid by its subsidiaries. The reporting period covers the nine months ended September 30, 2011. Financial statements are prepared in accordance with Korean IFRS.
Key Financial Metrics
Consolidated Results (Nine Months Ended Sept 30, 2011):
- Total Assets: KRW 313,784,488 million (up from KRW 291,177,315 million in 2010).
- Total Net Income: KRW 2,012,071 million (up from KRW 1,516,716 million in 2010).
- Net Income Attributable to Shareholders: KRW 1,780,458 million.
- Earnings Per Share (EPS): KRW 2,209 (up from KRW 1,531 in 2010).
- Net Interest Income: KRW 5,397,899 million.
- Net Fee Income: KRW 913,552 million.
- Impairment on Credit Loss: KRW 1,685,883 million (decreased from KRW 2,030,787 million in 2010).
Separate Basis Results (Parent Company Only):
- Total Assets: KRW 17,775,882 million.
- Total Net Income: KRW 359,436 million.
- Dividend Income: KRW 516,008 million.
- Debt Ratio: 27.32% (Liabilities/Equity).
- Current Ratio: 882.44%.
Liquidity and Capital:
- Consolidated Total Capital: KRW 21,202,491 million.
- BIS Ratio (Consolidated): 12.36% (Estimated).
- Cash and Due from Banks (Consolidated): KRW 4,338,839 million.
Material Changes vs. Prior Period
- Profitability Growth: Consolidated net income attributable to shareholders increased by approximately 44% year-over-year, driven by higher net interest income and gains on financial assets.
- Asset Expansion: Total consolidated assets grew by roughly 7.8% compared to the same period in 2010.
- Reduced Credit Losses: Impairment on credit losses decreased by approximately 17% compared to the prior year, indicating improved asset quality or provisioning adjustments.
- Commission Revenue: On a separate basis, commission profit increased to KRW 44,691 million from KRW 31,417 million in 2010, reflecting new brand usage fee arrangements.
Outlook, Risks, and Recent Developments
Recent Developments:
- Acquisition of Samhwa Mutual Savings Bank: On February 18, 2011, Woori Finance Holdings was selected as the preferred bidder to purchase assets and assume liabilities of Samhwa Mutual Savings Bank. A new subsidiary, Woori Financial Group Savings Bank Co., Ltd., was established and began operations on March 25, 2011.
- Subsidiary Consolidation: Kwangju Bank and Kyongnam Bank became wholly-owned subsidiaries in October 2011.
Risks and Contingencies:
- Credit Exposure: The filing details the 30 largest exposures by borrower, with significant exposure to major Korean corporations (e.g., Samsung Electronics, Hyundai Heavy Industries) and government-related entities (e.g., Korea Finance Corporation). Total exposure to the top 30 borrowers is KRW 294,041 hundred million.
- Sub-Standard Loans: The 20 largest loan exposures classified as sub-standard or below total KRW 24,524 hundred million, with loan loss reserves of KRW 16,041 hundred million. Key industries include Real Estate, Construction, and Manufacturing.
- Accounting Standards: Financial information is prepared under Korean IFRS, which differs in certain respects from US GAAP.
Key Facts for Investor Verification
- Ownership Structure: The Korea Deposit Insurance Corporation (KDIC) is the largest shareholder, holding 56.97% of common stock as of September 30, 2011.
- Dividend History: In 2010, the company paid a cash dividend of KRW 250 per share (15.63% payout ratio). No stock dividends were paid.
- Stock Performance: Domestic stock price (KRW) ranged from a high of 15,400 to a low of 8,500 between April and September 2011. ADRs on NYSE ranged from $42.37 to $22.19 in the same period.
- Capital Adequacy: The estimated consolidated BIS ratio of 12.36% indicates compliance with regulatory capital requirements.
- Auditor Opinion: Deloitte Anjin LLC issued an unqualified opinion on the consolidated financial statements for the period.