Woori Financial Group Inc. - 2022 Third Quarter Summary
Business Context and Reporting Period
This Form 6-K filing covers the third quarter of 2022 (ended September 30, 2022) for Woori Financial Group Inc., a Korean financial holding company. The financial statements are prepared in accordance with Korean IFRS (K-IFRS). The group consists of 163 consolidated subsidiaries, including Woori Bank, Woori Card, and Woori Investment Bank.
Key Financial Metrics
| Metric | 2022 3Q (YTD) | 2021 (YTD) | Unit |
|---|---|---|---|
| Operating Income | 3,703 | 3,660 | Billion KRW |
| Net Income (Total) | 2,793 | 2,807 | Billion KRW |
| Net Income (Controlling Interest) | 2,662 | 2,588 | Billion KRW |
| Net Interest Income | 6,348 | 6,986 | Billion KRW |
| Impairment Losses (Credit) | (622) | (537) | Billion KRW |
| Total Assets | 502,069 | 447,184 | Million KRW |
| Total Equity | 31,128 | 28,850 | Million KRW |
| ROA (Group, incl. NCI) | 0.78% | 0.66% | % |
| ROE (Group, incl. NCI) | 13.87% | 11.48% | % |
| BIS Capital Adequacy Ratio | 14.30% | 15.05% | % |
| NPL Ratio | 0.27% | 0.27% | % |
Material Changes vs. Prior Period
- Profitability: Net income attributable to controlling interests increased by approximately 2.9% year-over-year to 2.66 trillion KRW, driven by higher operating income despite increased impairment losses.
- Asset Growth: Total assets grew by 12.3% to 502.1 trillion KRW, primarily due to an increase in loans and other financial assets at amortized cost (up to 393.3 trillion KRW).
- Interest Income: Net interest income decreased by 9.1% compared to the prior year, reflecting a lower average interest rate on loans (3.44% in 2022 vs. 2.79% in 2021) and changes in funding costs.
- Capital Adequacy: The Group's BIS ratio declined to 14.30% from 15.05% in 2021, though it remains well above regulatory requirements. Woori Bank's ratio stood at 15.18%.
- Asset Quality: The Non-Performing Loan (NPL) ratio remained stable at 0.27%. However, impairment losses due to credit loss increased significantly to 622 billion KRW from 537 billion KRW in the prior year.
Outlook, Risks, and Commentary
The filing does not contain explicit forward-looking guidance or management commentary regarding future earnings projections. However, the following risks and items are noted:
- Liquidity: The Group's Won Liquidity Ratio is robust at 9,246.1%. Woori Bank's Liquidity Coverage Ratio (LCR) is 97.22%, exceeding the 90% requirement for the period.
- Regulatory Compliance: Capital adequacy and liquidity ratios for significant subsidiaries (Woori Bank, Woori Card, etc.) remain compliant with Financial Supervisory Service standards.
- Accounting Standards: Financial data is based on K-IFRS, which differs in certain respects from U.S. GAAP. 2022 3Q capital adequacy figures are noted as estimates subject to change.
- Shareholder Structure: The Employee Stock Ownership Association of Woori Financial Group remains the largest shareholder with 5.55% ownership as of September 30, 2022.
Investor Verification Checklist
- Verify the impact of rising interest rates on future net interest margins, given the decline in net interest income YTD.
- Monitor the trend in impairment losses, which increased by 15.8% YTD, to assess credit risk exposure.
- Confirm the final audited capital adequacy ratios, as the 2022 3Q figures are currently estimates.
- Review the specific composition of "Other financial liabilities" which increased significantly to 32.7 trillion KRW.
- Check for any updates on the sale of shares by the Korea Deposit Insurance Corporation (KDIC) or changes in major shareholder holdings.