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| Statement |
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| Furthermore, in order to improve the dividend process, the group for its 2023 year-end dividend has set the dividend reference date to February 29 after the dividend amount has been determined, thereby enhancing the predictability of dividends |
| Based on our enhanced loss absorption capabilities in 2024, we will strengthen our fundamental competitiveness and intergroup synergies to further solidify our performance improvements |
| This year, based on our recovered performance, we will continue to improve shareholder value as described earlier and fulfill our social responsibility as a financial institution |
| The recently discussed corporate value program aimed at resolving the undervaluation of the stock market is also expected to greatly contribute to this trend of expanding shareholder return and provide momentum for valuation recovery of value stocks that are undervalued in the market |
| In addition, core fee income each quarter is recording a mid KRW400 billion level, representing a solid growth trend |
| As the supervisory authorities measures to strengthen capital regulations such as the imposition of stress buffer capital are scheduled to be implemented in the future, the Group plans to manage its capital ratio at a level above the CET1 ratio of 12%, and we will further strive to improve our capital adequacy through solid financial performance and thorough risk management |
| When excluding these one-off factors, the Group continues to maintain solid profit generating capabilities |
| On the corporate loan side, the large corporate loan demand was very strong, with high quality SME loan growth, also very solid, leading to corporate loans posting KRW170 trillion, up by 8% Y-o-Y |
| And when adding the provisioning of KRW96 billion related to Taeyoung E&C, which recently filed for a debt workout, the total of additional credit costs recognized stands at approximately KRW525 billion, putting the group at a stronger position to respond to future economic conditions |
| The bank will become a leader in the asset management market by creating an upgraded product lineup and portfolio enhancing sales capabilities by increasing the channel specialized in asset management and utilizing its existing robust product risk management system |
| This year, Woori Financial Group, based on its upgraded profit generating capability and stabilized asset soundness, plans to initiate a full scale earnings turnaround also, so that the profits generated in this way can be more faithfully returned to shareholders |
| Through growth center on new quality growth companies and prime companies, we will improve our quality of the portfolio and also with regard to high risk assets, including CRE assets |
| The group has kept recurring expenses outside of future core businesses flat and while also continuing to rationalize channels and personnel such company-wide cost saving efforts will be strengthened further going forward |
| When excluding the 100 billion share buyback and cancellation conducted during the year, Woori Financial Group total shareholder return rate is 33.7%, which is a significant increase versus the previous year |
| Now, Woori Financial Group as was mentioned has been very much focused on preemptive provisioning and we have been strengthening our loss absorption capacity and the NPL coverage ratio as of the end of fourth quarter 2023 is 229.2% |
| This includes the support we will extend to cooperative finance, and when excluding this amount, non-interest income grew 10% YoY |
| So the LTV ratio is average 40% and in terms of loan preservation or recovering credit, it’s quite satisfactory |
| As a result of actively dealing with future uncertainties, the Group MPL ratio is 0.35%, and the MPL coverage ratio, which is an indicator of loss absorption capabilities, is 229%, the highest level to date |
| As intergroup synergies are realized in full, the fee income contribution of non-bank subsidiaries such as credit card trust and capital business has grown a lot versus the early days of the holding companies |
| On the Group credit cost, including, for the fourth quarter, KRW802.2 billion, for the full year of 2023, the Group provisioned KRW1,880.7 billion, which is around two times higher year-over-year, which we believe represents sufficient loss absorption capabilities |
| By achieving our management plan targets, we will restore our 2024 dividend per share to the level at or above 2022 [ph] levels and continue to further increase in the future |
| The total loans of the bank as of the end of 2023 totaled KRW311 trillion, which is a 5.1% increase year-over-year |
| And therefore this is KRW229 billion that was set aside for reserves, and in addition to that KRW96 billion related to the debt workout company and KRW200 billion to strengthen loss absorption capacity in vulnerable sectors such as real estate PF |
| On the other hand, retail loans was KRW136 trillion, an increase of 1.9% Y-o-Y as growth was driven by real demand mortgage loans due to the effects of the government’s household debt management policy |
| We will continue to focus our efforts on improving our funding cost and defend our margins |
| In particular for the group’s capital management, we plan to actively manage risk weighted assets by enhancing our portfolio with a focus on low risk, high return quality prime assets and selective asset growth |
| This year, the group will diligently execute its role as a liquidity supplier in light of the economic situation |
| However, Woori Financial Group has proactively reexamine the group’s risk factors and strengthened its loss absorbing capacity at an early stage, thereby securing sufficient capacity for future risk management |
| And also in terms of vulnerabilities and some of these subsidiaries portfolio, we will be focusing on inducing a soft landing and by establishing a regular response system for each risk factor such as interest rates and exchange rates; we’ll strengthen the group’s crisis response capabilities and also including ICT risk and digital risk and other operational risk |
| Park Jang-Geun Good afternoon |
| Statement |
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| Considering the risk of default in real estate PF loans and the rising delinquency rate in the non-banking side, concerns about the soundness of the market are likely to persist for some time |
| These proactive measures resulted in a decline in net income, but this is only temporary |
| And thus, we expect the backdrop will be challenging from a profitability perspective |
| Following the steep rise in interest rates, the higher for longer environment has led to increasing concerns by the market on the quality of high risk assets such as real estate project finance and loans to vulnerable borrowers |
| And last but not least, in 2024, I would like to mention our direction in 2024, the unstable financial market and the high risk interest rate situation is to persist |
| In 2023, Woori Financial Group’s net income was KRW2,516.7 billion, representing a 19.9% decrease year-over-year |
| The group’s 2023 noninterest income was KRW1,094.8 billion, a decrease of 4.7% Y-o-Y |
| Amid a high interest rate environment, the portion of low-cost core deposits increased significantly – decreased significantly, resulting in a continued increase in funding cost, which was one of the main drivers behind the weaker margins |
| In addition, the cost income ratio recorded 43.5%, a decrease of 0.9 percent point year-over-year, maintaining a three-year continuous and consecutive decline |
| However, if you refer to the increase, it is at the lowest level in each relative industry |
| And in the fourth quarter, the net interest income was KRW2,142.6 billion, a 2% decrease Q-o-Q |
| The NIM of the bank and the group fell three basis points and two basis points, respectively, versus 2022 |
| The group’s SG&A in 2023 was KRW4,443.9 billion, and although inflationary pressure continued, the SG&A was down by 1.9% year-over-year |
| Though inflationary pressure continued, it decreased 1.9% year-over-year |
| While additional provisions to expand loss absorption capacity and cooperative finance programs resulted in decline in profitability, the aforementioned result was possible due to our strengthened efforts to enhance capital adequacy, including active risk weighted asset management |
| The decline in net income was due to mainly one-off factors such as preemptive provisions by changing the credit cost calculation components, strengthening the loss absorption capabilities of vulnerable areas within the non-bank subsidiaries, and expenses related to corporate and finance programs |
| As the top line growth will be challenging, we believe it is important to focus on cost management in the current conditions |
| And we’re seeing high interest rates and market instability is continuing on and therefore delinquency rate did increase slightly |
| The Group also signed a stock transfer framework agreement with KDIC and resolved related overhang risks |
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