Woori Financial Group (316140) Q2 2024 earnings summary

Executive summary

• Net income for H1 2024 reached KRW 1.7554 trillion, up 14.1% year-over-year, with Q2 net income at KRW 931.4 billion, the highest quarterly result ever and above market consensus.

• ROE improved to 10.8%–11.10%, and the cost-to-income (C/I) ratio dropped to 39.9%, falling below 40% for the first time since the group's establishment.

• The group announced a quarterly dividend of KRW 180 per share, maintaining its shareholder return policy.

• Completed the merger of Woori Investment & Securities, re-entering the securities business after 10 years, and set out a mid- to long-term value-up plan targeting a 50% total shareholder return ratio.

• Maintained robust risk management and capital adequacy, with a BIS capital ratio of 15.93% and CET1 ratio of 12.04% as of June 2024.

Financial highlights

• Net operating revenue for H1 2024 was KRW 5.28 trillion, up 5.1% year-over-year; Q2 net operating revenue rose 7.2% sequentially.

• Non-interest income surged 45.1% year-over-year to KRW 885.4 billion, driven by fee income growth from corporate finance and subsidiaries.

• Credit cost for H1 2024 was KRW 775.7 billion, down 5.2% year-over-year, but up sequentially in Q2 due to additional provisioning for real estate PF.

• Fees and commissions grew 25.6% YoY to KRW 1.058 trillion, driven by both banking and non-banking operations.

• SG&A expenses rose 2.1% YoY to KRW 2.101 trillion.

Outlook and guidance

• Targeting sustainable ROE of 10%, CET1 ratio of 13%, and 50% total shareholder return in the mid to long term.

• CET1 ratio target set at 12.2% by year-end 2024 and 12.5% by 2025, with flexible growth management and RWA optimization.

• Plans to expand non-bank portfolio via M&A, focusing on insurance and launching Woori Investment & Securities in August.

• Global business contribution targeted to rise to 25%, with focus on Southeast Asia and selective market exits.

• Continued focus on risk management, cost efficiency, and ESG leadership.