Woori Bank is expected to post about 850 billion won in net profit for the second quarter of this year (April–June). In the first quarter, results were weak due to one-off factors such as provisions set aside by overseas subsidiaries, but in the second quarter they appear to have recovered to last year's level.
According to the investment banking (IB) industry on the 2nd, Woori Bank's second-quarter net profit is expected to be around 850 billion won, up about 60% from the previous quarter (531.2 billion won).
This is a 9% decrease from the same period a year earlier (934.6 billion won). Woori Bank is said to have seen some decline in results as it set aside a provision amid the impact of JoongAng Group and its affiliates entering corporate rehabilitation proceedings (formerly court receivership) and a workout. Woori Bank's JoongAng Group-related exposure is 111 billion won. Excluding this, net profit is estimated to be in the 900 billion won range, similar to the same period a year earlier.
In the first quarter, Woori Bank recorded negative growth due to a provision set aside by its Indonesian subsidiary, Woori Saudara Bank, and the disposal of nonperforming asset. Since last year, Woori Bank has been improving its fundamentals by reducing the share of real estate loans to small and midsize corporations with high default risk and loans to rental business operators, which led to weaker results. After completing its restructuring this year and moving to aggressive corporate sales, corporate credit is said to have increased by about 8 trillion won in the first half alone. For the full year, an increase of 12 trillion won in corporate credit is expected.
Last year, during the process of improving the Common Equity Tier 1 (CET1) ratio, the outstanding loan balance to corporations fell by 5.1617 trillion won. CET1 is a soundness indicator that shows a financial company's ability to respond to crises. The financial authorities recommend a CET1 of 12% or higher for financial holding companies, but in effect want it maintained at 13% or higher.
At the end of 2024, Woori Financial Group's CET1 ratio was 12.13%, below the financial authorities' benchmark. In response, Woori Financial raised its CET1 ratio through restructuring efforts such as disposing of nonperforming asset, reducing corporate loans, and selling assets. As of the first quarter, Woori Financial's CET1 ratio is 13.6%.
Woori Bank is credited with playing a key role in improving the CET1 ratio by strengthening its management of risk-weighted assets (RWA). RWA is the value calculated by applying risk-based weights to the assets held by a bank, and it serves as the basis for calculating the CET1 ratio. When RWA increases, the capital ratio falls accordingly. In the first quarter of this year, RWAs at major banks such as KB Kookmin, Shinhan, and Hana rose sharply from a year earlier, but only Woori Bank kept them at about the same level as the same period a year earlier.