Woori Financial Group posted an earnings shock that fell short of the market's first-quarter outlook this year, yielding its spot among the big four financial holding companies to NH NongHyup Financial Group. While Woori Financial faltered amid rising one-off expense and delays in business diversification, NongHyup Financial captured fourth place as affiliates including NH Investment & Securities delivered solid results. Woori Bank, the group's core affiliate, also fell behind NongHyup Bank in their competition.
Tongyang Life Insurance, which Chairman Yim Jong-ryong acquired to diversify the group's portfolio, saw its net profit cut in half and failed to contribute to group results.
According to the financial sector on the 29th, Woori Bank's first-quarter net profit this year was 522.0 billion won, down 17.8% from a year earlier. The decline reflected large one-off expense, including 138.0 billion won in overseas subsidiary provision and 183.0 billion won in voluntary retirement expense. NH NongHyup Bank earned 557.7 billion won in net profit in the first quarter, ranking fourth after Shinhan, Hana and KB Kookmin.
The gap was wider at the group level. NongHyup Financial earned 868.8 billion won in net profit in the first quarter this year, 265.0 billion won more than Woori Financial's 603.8 billion won in the same period.
A Woori Bank official said, "The bank reflected voluntary retirement expense in the first quarter this year, and a one-off provision of 138.0 billion won at the Indonesia subsidiary, Bank Saudara Indonesia, reduced net profit. Excluding one-off factors, results are expected to improve from the second quarter."
Woori Financial once held third place among financial holding companies after KB and Shinhan. It later ceded third to Hana Financial Group after selling affiliates, including Woori Investment & Securities (now NH Investment & Securities), during privatization. Woori Financial moved to diversify its business by acquiring a securities firm and an insurer, but in the first quarter this year even surrendered fourth place to NongHyup Financial and slipped to fifth.
Tongyang and ABL Life Insurance, where Chairman Yim Jong-ryong led mergers and acquisitions (M&A), have yet to generate synergy with the group. Tongyang Life Insurance's first-quarter net profit was 25.0 billion won, down 45.8% from 46.1 billion won a year earlier. Investment gains were 8.7 billion won, an 84% drop from 54.6 billion won a year earlier. ABL Life Insurance also posted 12.1 billion won in net profit, down 30.9% from a year ago.
Tongyang Life Insurance's profitability indicators also deteriorated. The annualized premium equivalent (APE), which reflects new policy sales, was 139.2 billion won in the first quarter, down 24.5% from 184.4 billion won a year earlier. Protection APE also fell 35.3% to 118.3 billion won. The contractual service margin (CSM) balance, a gauge of future profitability, was 2.5108 trillion won, down 10% from the third quarter of last year.
A financial industry official said, "After Tongyang Life Insurance posted a record performance in 2024, it was acquired by Woori Financial last year," adding, "There are aspects that fall short of the profitability expected at the time of the acquisition. As most life insurers worry about slowing growth, it will not be easy for Tongyang Life Insurance to improve results for the time being."