Woori Financial Group(316140) said on the 24th that net profit for the second quarter this year was 1.0046 trillion won, up 7.4% from a year earlier.
It was the second-largest quarterly figure on record after the third quarter last year (1.244 trillion won). Woori Financial Group said it was the largest ever for a second quarter. Net profit rose 66.2% from the first quarter this year (64.3 billion won). In the first quarter, net profit fell 2.1% year over year due to factors including provision buildup at overseas banking subsidiaries.
Cumulative net profit for the first half was 1.609 trillion won, up 3.7% from a year earlier. A Woori Financial Group official, regarding the first-half results, said, "Despite instability in the Middle East and increased exchange-rate volatility, the contribution from the nonbank institutional sector expanded, making the results of our transition into a comprehensive financial group visible."
In particular, as net profit at nonbank affiliates such as securities, card, and capital increased significantly, the contribution of the nonbank institutional sector to first-half net profit expanded to 22.3%, more than triple last year's 6.9%. Woori Investment & Securities posted first-half net profit of 24.7 billion won, up 44.2% from 17.1 billion won a year earlier, while Woori Card (94.5 billion won) and Woori Financial Capital (76.9 billion won) rose 24.2% and 14.1%, respectively.
Tongyang Life Insurance(082640) (on a standalone basis), acquired last year, recorded total net profit of 91.9 billion won in the first half. Helped by growth in the nonbank institutional sector, second-quarter noninterest income rose 19.4% to 629 billion won. Interest income also increased 3.3% to 2.336 trillion won.
With both interest income and noninterest income increasing, first-half net operating income (interest income + noninterest income) reached a record 5.7227 trillion won. Second-quarter net interest margin (NIM) at Woori Financial Group (bank and card) and Woori Bank was 1.75% and 1.51%, respectively, up 0.04 percentage point (p) and 0.06 p from a year earlier.
The group's substandard-and-below loan ratio was 0.73% at the end of the second quarter, up 0.02 percentage point from 0.71% a year earlier. The loan arrears ratio at the bank rose from 0.40% to 0.43%, while the card unit fell from 1.83% to 1.81%.
The NPL coverage ratio (allowance for credit losses balance/substandard-and-below loans), which gauges the group's loss-absorbing capacity, was 112.9% at the end of the second quarter, down from 127.0% a year earlier. Woori Financial Group's common equity capital ratio at the end of the second quarter was 13.7%, up 0.1 percentage point from the previous quarter (13.6%).
It said it maintained a level above the mid- to long-term target of 13% in a stable manner. Woori Bank, the group's core subsidiary, recorded net profit of 842.1 billion won in the second quarter. The bank said net profit rose 58% from the first quarter by sharply reducing selling, general, and administrative expenses and credit costs. However, on a first-half cumulative basis, it was 1.373 trillion won, down 11.9% from last year's 1.5577 trillion won.
On the day, Woori Financial Group's board set the second-quarter dividend at 220 won per share, the same as the previous quarter. The quarterly dividend will be paid as a tax-exempt dividend. In addition, it decided to conduct an additional 150 billion won share buyback and cancellation in the second half. As a result, the annual share buyback and cancellation will total 350 billion won this year, the largest since the group's launch, the group said.