Woori Financial Group Inc. — FY2023 Form 20-F
Business context and reporting period. This is an audited annual report for the year ended December 31, 2023, filed April 29, 2024—not a standalone fourth-quarter earnings release. Woori is a Korean financial holding company whose main business is banking, alongside credit cards, capital, investment banking and other financial services. Financial statements are consolidated and prepared under IFRS as issued by the IASB. Unless otherwise noted, amounts below are in billions of Korean won (₩bn).
Key financial metrics
| Metric | FY2022 / Dec. 31, 2022 | FY2023 / Dec. 31, 2023 | Change |
|---|---|---|---|
| Interest income | ₩14,655bn | ₩20,642bn | +40.9% |
| Interest expense | ₩5,958bn | ₩11,899bn | +99.7% |
| Net interest income | ₩8,697bn | ₩8,743bn | +0.5% |
| Net interest margin | 1.96% | 1.92% | Down 4 bps |
| Net income before tax | ₩4,548bn | ₩3,517bn | −22.7% |
| Net income | ₩3,369bn | ₩2,627bn | −22.0% |
| Net income attributable to owners | ₩3,187bn | ₩2,506bn | −21.4% |
| Impairment losses due to credit loss | ₩885bn | ₩1,895bn | +114.1% |
| Total assets | ₩480,474bn | ₩498,005bn | +3.6% |
| Total loans, net | ₩343,919bn | ₩358,578bn | +4.3% |
| Customer deposits | ₩342,105bn | ₩357,784bn | +4.6% |
| Total equity | ₩31,627bn | ₩33,397bn | +5.6% |
| Allowance for credit losses | ₩2,334bn | ₩2,975bn | +27.5% |
The filing does not provide a clear conventional consolidated revenue figure in the presented text. It reports net interest income and non-interest income components instead.
Cash flow, margins and asset quality
- Net cash from operating activities was ₩1,622bn in 2023, versus ₩18,624bn in 2022. Investing activities used ₩2,254bn and financing activities used ₩2,860bn; cash and cash equivalents fell by ₩3,663bn to ₩30,557bn. These cash-flow totals are affected by banking balance-sheet movements and should not be read like industrial-company operating cash flow.
- Net interest income was nearly flat despite sharply higher interest income, as funding costs rose: average deposit cost increased from 1.27% to 2.63%, while the net interest spread narrowed from 1.90% to 1.81%.
- Non-performing loans rose to ₩1,252bn from ₩1,016bn; the NPL ratio increased to 0.35% from 0.29%. Impaired loans increased to ₩2,521bn from ₩1,683bn.
- Corporate impaired loans rose to ₩1,625bn from ₩940bn. Consumer impaired loans were ₩642bn; the credit-card NPL ratio rose to 0.90% from 0.84%, and net credit-card charge-offs increased to ₩272bn from ₩167bn.
- Capital remained above stated regulatory minimums at year-end: group CET1 11.99%, Tier 1 14.08% and total capital 15.81%. Woori Bank’s corresponding ratios were 13.17%, 14.05% and 16.04%. A 1.0% countercyclical buffer was scheduled to apply from May 2024.
- Woori Bank’s 30-day liquidity coverage ratio was 101.2% at year-end; the disclosed minimum was temporarily 95% through June 2024. Customer deposits supplied 81.5% of group funding, and about 95% of deposits had maturities of one year or less or were payable on demand.
Material changes and management commentary
- Higher rates lifted average yields on interest-earning assets to 4.54% from 3.30%, but average funding costs also rose, compressing the spread and slightly lowering the NIM.
- Credit-loss impairment expense more than doubled as management increased provisions in response to economic uncertainty and potential deterioration in borrowers’ repayment capacity. The allowance for credit losses rose to ₩2,975bn.
- Loans to small- and medium-sized enterprises grew to ₩130,553bn, or 36.2% of total loans. Won-denominated SME charge-offs rose to ₩330bn from ₩117bn. Consumer loans totaled ₩147,137bn, while credit-card receivables rose to ₩12,532bn.
- Net financial-instrument gains rose to ₩655bn from ₩291bn, with material reversals in trading results across currency and interest-rate derivatives. Net fees and commissions were nearly unchanged at ₩1,720bn.
- Full-year dividends for 2023 were ₩1,000 per common share, including interim dividends; the reported total cash dividends were ₩747bn. The board announced a further quarterly dividend of ₩180 per share for the first quarter of 2024.
- No formal numerical earnings guidance is provided. Management says the Korean and global economic outlook remains uncertain and emphasizes asset quality, risk controls, digital investment, revenue diversification and selective expansion.
Risks, contingencies and unusual items
- Credit risks include rising SME and consumer delinquencies, high household debt, weakening property values and exposures to construction, real-estate development, shipping and other stressed sectors. Woori disclosed ₩6,785bn of loans to construction companies and ₩3,414bn to real-estate developers.
- Funding is concentrated in short-term deposits; withdrawals or reduced rollover could require more expensive funding. Interest-rate, foreign-exchange, securities-valuation and global liquidity volatility may also affect earnings and capital.
- Woori Bank’s internal controls and compliance remain in focus. A former employee’s embezzlement was assessed at approximately ₩70.8bn. Separately, regulators imposed a ₩177m administrative fine and ₩309m surcharge over overseas wire transfers, ordered three branches to suspend certain foreign-exchange operations for six months, and issued an institutional warning. Related investigations and court proceedings remained unresolved in part.
- Woori Bank faces a lawsuit by Bank Mellat seeking return of approximately ₩20.2bn in frozen funds, plus interest and damages. The filing says the outcome cannot be predicted.
- The report describes reimbursements and additional provisions related to customer losses in certain funds, but the 2023 provision amount is not clearly stated in the presented text. Earlier fund-sale matters also resulted in customer reimbursements, fines and sales restrictions.
- Off-balance-sheet exposures included ₩13,793bn of guarantees and ₩126,829bn of loan commitments at year-end; provisions for possible losses on guarantees and commitments were ₩216bn. Woori Asset Trust also had 43 responsible-completion project-finance commitments, with associated PF loans of ₩2,276bn; the filing says potential additional losses were not recognized because likelihood and amount could not be reliably estimated.
- Sanctions, cyber incidents, employee misconduct, regulatory changes and government-directed financial-support programs are additional risks. The report identifies geopolitical and Korean economic uncertainty but does not provide a quantified forecast of their financial effects.
Most important facts for investors to verify
- Confirm the reported 2023 profit decline and whether higher credit provisions persist; examine the underlying audited statements and allowance assumptions.
- Track NPL and impaired-loan trends, charge-offs, restructured credit-card balances, and exposures to SMEs, property-related sectors and overseas borrowers.
- Verify deposit stability, liquidity ratios, funding costs and capital headroom after the May 2024 countercyclical buffer and other regulatory requirements.
- Monitor outcomes and potential costs of the overseas-transfer investigations, fund-related customer claims, the Bank Mellat lawsuit and responsible-completion PF commitments.
- Check subsequent dividend declarations, treasury-share changes and any post-year-end subsidiary ownership changes; distinguish 2023 year-end figures from developments disclosed after year-end.