Woori Financial (WF) - 2025 Q1 - Quarterly Report

Independent Auditors' Review Report This report presents the auditors' conclusion on the condensed consolidated interim financial statements, affirming their fair presentation in accordance with K-IFRS No.1034, without expressing an audit opinion Management's Responsibility Management is responsible for preparing and fairly presenting the condensed consolidated interim financial statements in accordance with Korean International Financial Reporting Standards (K-IFRS) No.1034 Interim Financial Reporting, ensuring they are free from material misstatement - Management is responsible for the preparation and fair presentation of these condensed consolidated interim financial statements in accordance with Korean International Financial Reporting Standards ("K-IFRS") No.1034 Interim Financial Reporting[4] Auditors' Review Responsibility The auditors' responsibility is to issue a report based on their review, which is substantially less in scope than an audit, consequently, they do not express an audit opinion but provide a conclusion based on their review procedures - Auditors' responsibility is to issue a report on these condensed consolidated interim financial statements based on their review[5] - A review is substantially less in scope than an audit and consequently does not enable auditors to obtain assurance that they would become aware of all significant matters that might be identified in an audit, accordingly, auditors do not express an audit opinion[6] Conclusion Based on their review, the auditors found nothing that causes them to believe the accompanying condensed consolidated interim financial statements are not presented fairly in all material respects, in accordance with K-IFRS No.1034 Interim Financial Reporting - Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements referred to above are not present fairly in all material respects, in accordance with K-IFRS No.1034 Interim Financial Reporting[7] Other Matters The auditors noted that the consolidated statement of financial position as of December 31, 2024, presented for comparative purposes, is consistent with the previously audited annual statements which received an unqualified opinion, they also cautioned that review procedures in Korea may differ from those in other countries and that the report has not been updated for subsequent events - The consolidated statement of financial position of the Group as of December 31, 2024, presented for comparative purposes, is not different from that audited by us from which it was derived in all material respects, and received an unqualified opinion[8] - The procedures and practices utilized in the Republic of Korea to review such condensed consolidated interim financial statements may differ from those generally accepted and applied in other countries[9] - The review report has not been updated to reflect the impact of any subsequent events or circumstances that may occur between the review report date (May 15, 2025) and the time of reading the report[9] Consolidated Interim Statements of Financial Position This statement provides a snapshot of the Group's assets, liabilities, and equity, highlighting changes in financial position between reporting periods Financial Position Overview As of March 31, 2025, Woori Financial Group's total assets increased by 1.32% to 532,696,264 million Won, primarily driven by growth in loans and other financial assets, total liabilities rose by 1.49% to 497,173,262 million Won, mainly due to increased deposits and other financial liabilities, total equity experienced a slight decrease of 1.03% Consolidated Financial Position (Korean Won in millions) | Metric (Korean Won in millions) | March 31, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :------------------------------ | :------------- | :---------------- | :---------------- | :--------- | | Total assets | 532,696,264 | 525,753,320 | 6,942,944 | 1.32% | | Total liabilities | 497,173,262 | 489,858,051 | 7,315,211 | 1.49% | | Total equity | 35,523,002 | 35,895,269 | (372,267) | -1.03% | - Loans and other financial assets at amortized cost increased by 11,024,337 million Won (2.77%) from 398,471,816 million Won as of December 31, 2024, to 409,496,153 million Won as of March 31, 2025[14] - Other financial liabilities significantly increased by 7,946,019 million Won (24.59%) from 32,314,051 million Won as of December 31, 2024, to 40,260,070 million Won as of March 31, 2025[14] Consolidated Interim Statements of Comprehensive Income This statement details the Group's financial performance, including net income and other comprehensive income, over a specific interim period Income Performance Overview For Q1 2025, Woori Financial Group's net income decreased by 22.0% to 654,556 million Won, and total comprehensive income fell by 25.5% to 622,333 million Won, compared to Q1 2024, this decline was primarily driven by a substantial decrease in net gain on financial instruments at FVTPL, increased general and administrative expenses, and higher impairment losses Consolidated Income Performance (Korean Won in millions) | Metric (Korean Won in millions) | Q1 2025 | Q1 2024 | Change (Absolute) | Change (%) | | :------------------------------ | :---------- | :---------- | :---------------- | :--------- | | Net interest income | 2,251,991 | 2,198,203 | 53,788 | 2.45% | | Net fees and commissions income | 511,434 | 502,931 | 8,503 | 1.69% | | Net gain on FVTPL | 202,368 | 515,607 | (313,239) | -60.75% | | Impairment losses | (435,501) | (366,512) | (68,989) | 18.82% | | General & admin expense | (1,306,172) | (1,031,667) | (274,505) | 26.61% | | Operating income | 869,263 | 1,150,689 | (281,426) | -24.46% | | Net income | 654,556 | 838,911 | (184,355) | -21.98% | | Total comprehensive income | 622,333 | 835,099 | (212,766) | -25.48% | | Basic & diluted EPS (Won) | 781 | 1,056 | (275) | -26.04% | - Net gain on financial instruments at FVTPL decreased significantly by 60.75% from 515,607 million Won in Q1 2024 to 202,368 million Won in Q1 2025[16] - General and administrative expenses increased by 26.61% from 1,031,667 million Won in Q1 2024 to 1,306,172 million Won in Q1 2025[16] Consolidated Interim Statements of Changes in Equity This statement tracks the movements in the Group's equity components, including net income, other comprehensive income, and transactions with owners Equity Changes Overview Total equity for Woori Financial Group decreased by 1.04% from 35,895,269 million Won at January 1, 2025, to 35,523,002 million Won at March 31, 2025, this was primarily due to the redemption of hybrid securities and dividend payments, partially offset by net income and positive revaluation of financial instruments at FVTOCI Consolidated Equity Changes (Korean Won in millions) | Metric (Korean Won in millions) | January 1, 2025 | March 31, 2025 | Change (Absolute) | Change (%) | | :------------------------------ | :-------------- | :------------- | :---------------- | :--------- | | Total equity | 35,895,269 | 35,523,002 | (372,267) | -1.04% | | Owners' equity | 34,096,836 | 33,727,777 | (369,059) | -1.08% | | Non-controlling interests | 1,798,433 | 1,795,225 | (3,208) | -0.18% | - Hybrid securities decreased by 399,092 million Won due to redemption during the three-month period ended March 31, 2025[19] - Dividends to common stocks amounted to 488,076 million Won and dividends to hybrid securities were 39,506 million Won for the three-month period ended March 31, 2025[19] - Net gain on valuation of financial instruments at FVTOCI was 78,514 million Won for Q1 2025, a significant improvement from a net loss of 74,906 million Won in Q1 2024[19] Consolidated Interim Statements of Cash Flows This statement summarizes the cash inflows and outflows from operating, investing, and financing activities, reflecting changes in the Group's liquidity Cash Flow Performance Overview In Q1 2025, Woori Financial Group reported a net cash outflow from operating activities of 409,969 million Won, an 85.7% increase in outflow compared to Q1 2024, net cash inflow from investing activities significantly decreased by 84.2% to 391,532 million Won, while net cash outflow from financing activities increased by 37.7% to 1,692,365 million Won, primarily due to hybrid securities redemption and debenture redemptions Consolidated Cash Flow Performance (Korean Won in millions) | Cash Flow Activity (Korean Won in millions) | Q1 2025 | Q1 2024 | Change (Absolute) | Change (%) | | :------------------------------------------ | :----------- | :----------- | :---------------- | :--------- | | Net cash outflow from operating activities | (409,969) | (220,739) | (189,230) | 85.72% | | Net cash inflow from investing activities | 391,532 | 2,474,314 | (2,082,782) | -84.18% | | Net cash outflow from financing activities | (1,692,365) | (1,229,005) | (463,360) | 37.70% | | Net increase(decrease) in cash & equiv. | (1,673,612) | 1,377,666 | (3,051,278) | -221.48% | | Cash & cash equivalents, end of period | 25,607,511 | 31,934,284 | (6,326,773) | -19.81% | - Loans and other financial assets at amortized cost saw a significant cash outflow of 11,084,919 million Won in Q1 2025, compared to 5,154,266 million Won in Q1 2024, contributing to the increased operating cash outflow[21] - Redemption of hybrid securities in Q1 2025 amounted to 400,000 million Won, contributing to the increased net cash outflow from financing activities[22] - Acquisition of securities at amortized cost increased substantially from 259,142 million Won in Q1 2024 to 1,005,252 million Won in Q1 2025[22] Notes to the Consolidated Interim Financial Statements These notes provide detailed explanations and supplementary information to the interim financial statements, clarifying accounting policies, estimates, and specific financial items 1. GENERAL This section outlines the corporate structure of Woori Financial Group, including its establishment, stock listings, and a history of significant acquisitions and changes in subsidiary ownership, it also lists the Group's consolidated subsidiaries and entities not consolidated despite majority ownership, along with summarized financial data for major subsidiaries and financial support provided to structured entities - Woori Financial Group Inc. was established on January 11, 2019, as a financial holding company, with its stocks listed on the Korea Exchange and American Depository Shares (ADS) traded on the NYSE since February 13, 2019[24] - The Group completed several key acquisitions and ownership adjustments, including making Woori Asset Management Corp. a wholly-owned subsidiary by March 29, 2024, and Woori Investment Bank Co., Ltd. and Woori Venture Partners Co., Ltd. wholly-owned subsidiaries by August 8, 2023[32][33] Major Subsidiaries (March 31, 2025) | Subsidiary Name | Main Business | Ownership (%) | Location | | :---------------------------------- | :----------------------- | :------------ | :------- | | Woori Bank | Bank | 100.0 | Korea | | Woori Card Co., Ltd. | Finance | 100.0 | Korea | | Woori Financial Capital Co., Ltd. | Finance | 100.0 | Korea | | Woori Investment Securities Co., Ltd. | Securities brokerage | 99.5 | Korea | | Woori Asset Trust Co., Ltd. | Real estate trust | 99.6 | Korea | | Woori Savings Bank | Mutual saving bank | 100.0 | Korea | | Woori Financial F&I Co., Ltd. | Finance | 100.0 | Korea | | Woori Asset Management Corp. | Finance | 100.0 | Korea | | Woori Venture Partners | Other financial services | 100.0 | Korea | - The Group provides credit facilities of 2,175,093 million Won and purchase commitments of 2,707,483 million Won to consolidated structured entities as of March 31, 2025[60] - Net income attributable to non-controlling interests was 37,865 million Won for Q1 2025, with Woori Bank's hybrid securities distribution accounting for 36,457 million Won of this[62] 2. BASIS OF PREPARATION AND MATERIAL ACCOUNTING POLICIES The interim financial statements are condensed and prepared in accordance with K-IFRS 1034, new amendments to K-IFRS 1021 (Foreign Exchange Rates) are effective from January 1, 2025, with no significant impact, amendments to K-IFRS 1109 and 1107 (Financial Instruments) are effective from January 1, 2026, and their impact is currently under review, income tax expense for the interim period is recognized based on the estimated weighted average annual income tax rate - The Group's condensed consolidated interim financial statements are prepared in applying K-IFRS 1034 Interim Financial Reporting[66] - Amendments to K-IFRS 1021 The Effects of Changes in Foreign Exchange Rates are applied for annual periods beginning on or after January 1, 2025, and do not have a significant impact on the financial statements[67][69] - Amendments to K-IFRS 1109 Financial Instruments and K-IFRS 1107 Financial Instruments: Disclosures are effective for annual periods beginning on or after January 1, 2026, and the Group is reviewing their impact[68][69] - Income tax expense for the interim period is recognized based on management's best estimate of the weighted average annual income tax rate expected for the full financial year[71] 3. MATERIAL ACCOUNTING ESTIMATES AND ASSUMPTIONS The Group continuously evaluates material accounting estimates and assumptions based on historical experience and future expectations, significant judgments and key sources of estimation uncertainty for interim financial statements are consistent with those made for the annual consolidated financial statements for the year ended December 31, 2024 - Material accounting estimates and assumptions are continuously evaluated based on historical experience and expectations of future events that are considered reasonably probable[72] - The significant judgments made by management in applying the accounting policies and key sources of estimation uncertainty for the preparation of interim financial statements are consistent with those made for the annual consolidated financial statements for the year ended December 31, 2024[74] 4. RISK MANAGEMENT Woori Financial Group manages various risks including credit, market, liquidity, and operational risks through a structured organization comprising a Risk Management Committee, Chief Risk Officer (CRO), and Risk Management Department - The Group is exposed to various risks including credit risk, market risk, liquidity risk, and operational risk, managed by a Risk Management Committee, Chief Risk Officer (CRO), and Risk Management Department[75][76][77] - Credit risk is managed by assessing counterparty default risk using credit rating models and establishing appropriate credit lines per obligor, company, or industry[79][80] - Expected credit losses are measured using a three-stage classification based on credit risk increase, incorporating forward-looking macroeconomic variables such as GDP growth rate, consumer price index, and unemployment rate[81][87][88] - Market risk for trading positions is measured using the standard approach and internal model approach (Woori Bank), while non-trading activities' interest rate risk is managed through ΔNII and ΔEVE in accordance with IRRBB[111][113] - Liquidity risk is managed by identifying maturity gaps and maintaining the gap ratio at or below the target limit through various cash flow analyses[118] - Operational risk capital is measured using the Basel III standardized approach, which calculates required capital by multiplying the Business Indicator Component (BIC) with the Internal Loss Multiplier (ILM)[126] 5. OPERATING SEGMENTS The Group's reporting segments include banking, credit card, capital, investment securities, and other sectors, with performance evaluated by the Chief Operation Decision Maker (CODM), for Q1 2025, the banking sector remained the largest contributor to net interest income and operating income, while domestic operations generated the majority of operating profit - The Group's reporting segments consist of banking, credit card, capital, investment securities, and other sectors, with performance periodically reviewed by management[131] Net Income (Loss) by Segment (Q1 2025 vs Q1 2024, Korean Won in millions) | Segment (Korean Won in millions) | Q1 2025 | Q1 2024 | Change (Absolute) | Change (%) | | :------------------------------- | :---------- | :---------- | :---------------- | :--------- | | Banking | 635,218 | 791,989 | (156,771) | -19.80% | | Credit card | 33,178 | 29,295 | 3,883 | 13.25% | | Capital | 30,630 | 32,964 | (2,334) | -7.08% | | Investment securities | 1,287 | 12,631 | (11,344) | -89.81% | | Others | 1,392,819 | 1,184,317 | 208,502 | 17.61% | - Domestic operations generated 741,900 million Won in operating profit in Q1 2025, significantly higher than foreign operations at 127,363 million Won[141] - Major non-current assets were predominantly domestic (6,077,332 million Won) compared to foreign (587,088 million Won) as of March 31, 2025[141] 6. STATEMENTS OF CASH FLOWS This section provides a breakdown of cash and cash equivalents, including restricted amounts, as of March 31, 2025, cash and cash equivalents totaled 25,607,511 million Won, with 11,174,760 million Won being restricted, primarily for reserve deposits Cash and Cash Equivalents (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | | :------------------ | :------------- | :---------------- | | Cash | 2,623,255 | 1,661,517 | | Foreign currencies | 757,073 | 812,026 | | Demand deposits | 22,148,135 | 24,634,075 | | Fixed deposits | 79,048 | 173,505 | | Total | 25,607,511 | 27,281,123 | - Restricted cash and cash equivalents amounted to 11,174,760 million Won as of March 31, 2025, primarily for reserve deposits under the BOK Act and other reserve deposits[143] 7. FINANCIAL ASSETS AT FVTPL Financial assets at fair value through profit or loss (FVTPL) decreased by 5.32% to 23,861,998 million Won as of March 31, 2025, from 25,202,672 million Won at December 31, 2024, this change was primarily driven by a decrease in derivative assets, partially offset by an increase in beneficiary certificates Financial Assets at FVTPL (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :----------------------- | :------------- | :---------------- | :---------------- | :--------- | | Total FVTPL Assets | 23,861,998 | 25,202,672 | (1,340,674) | -5.32% | | Debt securities | 6,745,233 | 6,801,288 | (56,055) | -0.82% | | Beneficiary certificates | 4,993,063 | 4,563,102 | 429,961 | 9.42% | | Derivative assets | 8,189,086 | 10,094,532 | (1,905,446) | -18.88% | - Derivative assets decreased by 18.88% from December 31, 2024, to March 31, 2025[144] - Beneficiary certificates increased by 9.42% over the same period[144] 8. FINANCIAL ASSETS AT FVTOCI Financial assets at fair value through other comprehensive income (FVTOCI) decreased by 1.80% to 43,011,641 million Won as of March 31, 2025, from 43,797,745 million Won at December 31, 2024, this was mainly due to a decrease in debt securities, partially offset by an increase in equity securities, the Group also disposed of some equity securities designated as FVTOCI during the period Financial Assets at FVTOCI (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :------------------ | :------------- | :---------------- | :---------------- | :--------- | | Total FVTOCI Assets | 43,011,641 | 43,797,745 | (786,104) | -1.80% | | Debt securities | 42,096,518 | 42,922,671 | (826,153) | -1.92% | | Equity securities | 915,123 | 875,074 | 40,049 | 4.58% | - Equity securities designated as FVTOCI for strategic business partnership purposes increased by 42,533 million Won (5.55%) to 809,433 million Won as of March 31, 2025[146] - The Group sold equity securities designated as financial assets at FVTOCI with fair values of 42 million Won and cumulative losses of 1,353 million Won during the three-month period ended March 31, 2025[151] 9. SECURITIES AT AMORTIZED COST Securities at amortized cost decreased by 0.72% to 19,064,424 million Won as of March 31, 2025, from 19,203,177 million Won at December 31, 2024, this was primarily due to a decrease in corporate bonds and foreign currency-denominated bonds, partially offset by an increase in Korean treasury and government agencies securities Securities at Amortized Cost (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :---------------------------------- | :------------- | :---------------- | :---------------- | :--------- | | Total Securities at Amortized Cost | 19,064,424 | 19,203,177 | (138,753) | -0.72% | | Korean treasury and government agencies | 8,253,814 | 7,646,463 | 607,351 | 7.94% | | Corporates | 5,392,605 | 5,997,996 | (605,391) | -10.09% | | Bond denominated in foreign currencies | 1,404,242 | 1,555,470 | (151,228) | -9.72% | - The allowance for credit losses on securities at amortized cost slightly decreased from (10,763) million Won at December 31, 2024, to (10,669) million Won at March 31, 2025[152] - Acquisitions of securities at amortized cost amounted to 1,005,252 million Won, while disposals/recoveries were 1,167,209 million Won during Q1 2025[155] 10. LOANS AND OTHER FINANCIAL ASSETS AT AMORTIZED COST Loans and other financial assets at amortized cost increased by 2.77% to 409,496,153 million Won as of March 31, 2025, this growth was primarily driven by a significant increase in 'other financial assets' and bonds purchased under resale agreements, while loans in local currency saw a decrease, the allowance for credit losses on loans also increased during the period Loans and Other Financial Assets at Amortized Cost (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :-------------------------------------- | :------------- | :---------------- | :---------------- | :--------- | | Total Loans & Other Financial Assets | 409,496,153 | 398,471,816 | 11,024,337 | 2.77% | | Loans | 387,731,914 | 386,069,294 | 1,662,620 | 0.43% | | Other financial assets | 19,192,869 | 9,771,918 | 9,420,951 | 96.41% | | Loans in local currency | 312,626,375 | 315,597,374 | (2,970,999) | -0.94% | | Bonds purchased under resale agreements | 15,759,115 | 10,551,018 | 5,208,097 | 49.36% | - Other financial assets nearly doubled, increasing by 96.41% to 19,192,869 million Won, largely due to a rise in receivables[158][171] - The allowance for credit losses on loans increased from (3,357,625) million Won at December 31, 2024, to (3,494,252) million Won at March 31, 2025[165] - Restricted due from banks decreased from 1,579,481 million Won at December 31, 2024, to 1,519,693 million Won at March 31, 2025[159] 11. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES This section details the fair value measurement of financial instruments using a three-level hierarchy, as of March 31, 2025, total financial assets measured at fair value were 67,056,059 million Won, with Level 2 inputs being the most significant, the sensitivity analysis indicates that changes in unobservable inputs, such as volatility and discount rates, can significantly impact fair value measurements, particularly for equity securities and derivatives - The fair value hierarchy gives the highest priority to Level 1 (quoted prices in active markets), followed by Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)[175] Fair Value Hierarchy of Financial Assets (March 31, 2025, Korean Won in millions) | Category | Level 1 | Level 2 | Level 3 | Total | | :-------------------------------------- | :----------- | :----------- | :---------- | :----------- | | Financial assets at FVTPL | 4,911,130 | 13,163,941 | 5,786,927 | 23,861,998 | | Financial assets at FVTOCI | 15,787,997 | 26,650,954 | 572,690 | 43,011,641 | | Derivative assets (designated for hedging) | — | 182,420 | — | 182,420 | | Total Financial Assets | 20,699,127 | 39,997,315 | 6,359,617 | 67,056,059 | - For Level 3 financial instruments, a favorable change in unobservable inputs could increase net income by 23,654 million Won and other comprehensive income by 51,939 million Won as of March 31, 2025[191] - Valuation methods for Level 3 instruments include the DCF model, FCFE, Comparable Company Analysis, and option models, using inputs like discount rate, volatility, and stock prices[181] 12. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES The Group holds investments in numerous joint ventures and associates, primarily in financial services, with varying ownership percentages, as of March 31, 2025, the carrying value of these investments was 1,748,778 million Won, showing a slight decrease from December 31, 2024, changes in carrying value reflect share of profits/losses, acquisitions, disposals, and dividends - The Group can participate in decision-making bodies and exercise significant influence over financial and operational policies of its associates, even without majority shareholding[206] Carrying Value of Investments in Associates (Korean Won in millions) | Metric | January 1, 2025 | March 31, 2025 | Change (Absolute) | Change (%) | | :------------------------------------ | :-------------- | :------------- | :---------------- | :--------- | | Total Carrying Value of Investments | 1,748,810 | 1,748,778 | (32) | -0.00% | | K BANK Co., Ltd. | 262,250 | 260,543 | (1,707) | -0.65% | | LOTTE CARD Co., Ltd. | 575,580 | 573,056 | (2,524) | -0.44% | | Woori Asset Global Partnership Fund No.5 | 54,977 | 55,095 | 118 | 0.21% | - Several new associates were added in Q1 2025, including Woori Future Energy Private Special Asset Investment Trust(General) No.1 and Capstone Special Restructuring Private Investment Trust No.4[207] - The Group recognized a share of profits (losses) of 9,985 million Won from associates in Q1 2025[208] 13. OTHER ASSETS Other assets totaled 4,639,544 million Won as of March 31, 2025, a slight increase from 4,605,363 million Won at December 31, 2024, lease assets constitute the largest component, followed by prepaid expenses and advance payments Other Assets (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :------------------ | :------------- | :---------------- | :---------------- | :--------- | | Total Other Assets | 4,639,544 | 4,605,363 | 34,181 | 0.74% | | Lease assets | 3,907,253 | 3,965,839 | (58,586) | -1.48% | | Prepaid expenses | 415,310 | 359,638 | 55,672 | 15.48% | | Advance payments | 197,781 | 194,881 | 2,900 | 1.49% | 14. FINANCIAL LIABILITIES AT FVTPL Total financial liabilities at FVTPL decreased by 14.06% to 8,504,791 million Won as of March 31, 2025, from 9,896,597 million Won at December 31, 2024, this reduction was primarily driven by a decrease in derivative liabilities, financial liabilities designated to be measured at FVTPL increased, with changes in fair value due to credit risk recognized in other comprehensive income Financial Liabilities at FVTPL (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :------------------------------------------ | :------------- | :---------------- | :---------------- | :--------- | | Total FVTPL Liabilities | 8,504,791 | 9,896,597 | (1,391,806) | -14.06% | | Financial instruments at FVTPL | 7,936,971 | 9,348,781 | (1,411,810) | -15.10% | | Financial liabilities designated at FVTPL | 567,820 | 547,816 | 20,004 | 3.65% | | Derivative liabilities | 7,626,865 | 9,092,098 | (1,465,233) | -16.12% | - Derivative liabilities decreased by 16.12% in Q1 2025[216] - Financial liabilities designated to be measured at FVTPL increased by 3.65% to 567,820 million Won[216] - Changes in fair value due to credit risk reflected in financial liabilities designated to be measured at FVTPL resulted in a loss of (35) million Won in Q1 2025, recognized in other comprehensive income[216][217] 15. DEPOSITS DUE TO CUSTOMERS Deposits due to customers increased by 0.45% to 368,475,940 million Won as of March 31, 2025, from 366,821,156 million Won at December 31, 2024, this growth was primarily driven by increases in notice deposits and deposits at termination in local currency, partially offset by a decrease in foreign currency deposits Deposits Due to Customers (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :---------------------------- | :------------- | :---------------- | :---------------- | :--------- | | Total Deposits | 368,475,940 | 366,821,156 | 1,654,784 | 0.45% | | Notice Deposit | 116,452,302 | 115,527,487 | 924,815 | 0.80% | | Deposits at termination | 177,718,261 | 175,380,553 | 2,337,708 | 1.33% | | Deposits in foreign currencies | 49,127,208 | 50,988,673 | (1,861,465) | -3.65% | - Deposits at termination increased by 1.33% in Q1 2025[218] - Deposits in foreign currencies decreased by 3.65% in Q1 2025[218] 16. BORROWINGS AND DEBENTURES Total borrowings increased by 0.87% to 30,378,783 million Won, while debentures decreased by 2.59% to 46,952,728 million Won as of March 31, 2025, compared to December 31, 2024, changes in borrowings were driven by increases in local currency borrowings from the BOK and foreign currency bonds sold under repurchase agreements Borrowings (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :-------------------------------------- | :------------- | :---------------- | :---------------- | :--------- | | Total Borrowings | 30,378,783 | 30,117,031 | 261,752 | 0.87% | | Borrowings from The BOK | 2,209,307 | 1,981,928 | 227,379 | 11.47% | | Bonds sold under repurchase agreements | 1,821,999 | 1,530,767 | 291,232 | 19.02% | Debentures (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :-------------- | :------------- | :---------------- | :---------------- | :--------- | | Total Debentures | 46,952,728 | 48,207,103 | (1,254,375) | -2.59% | | Ordinary bonds | 40,644,106 | 41,665,997 | (1,021,891) | -2.45% | - Borrowings from The BOK increased by 11.47% in Q1 2025[219] - Ordinary bonds decreased by 2.45% in Q1 2025[220] 17. PROVISIONS Total provisions remained relatively stable at 612,004 million Won as of March 31, 2025, compared to 611,428 million Won at December 31, 2024, this includes provisions for asset retirement obligations, guarantees, unused loan commitments, and other provisions such as litigation and loss compensation, the Group recognized specific provisions for incomplete sales of Derivative Linked Fund (DLF) and estimated compensation for prepayment arising from delayed fund redemption Provisions (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :------------------------------ | :------------- | :---------------- | :---------------- | :--------- | | Total Provisions | 612,004 | 611,428 | 576 | 0.09% | | Asset retirement obligation | 104,908 | 97,772 | 7,136 | 7.30% | | Provisions for guarantees | 68,761 | 71,470 | (2,709) | -3.79% | | Provisions for unused loan commitments | 133,103 | 137,562 | (4,459) | -3.24% | | Other provisions | 305,232 | 304,624 | 608 | 0.20% | - Provisions for guarantees decreased by 3.79% in Q1 2025[221] - Other provisions include 246,486 million Won for estimated compensation related to prepayment arising from delayed fund redemption and dispute settlement, and 502 million Won for equity-linked securities customer loss compensation as of March 31, 2025[231] - The asset retirement obligation increased by 7.30% to 104,908 million Won in Q1 2025, estimated based on average lease period and recovery costs[221][228] 18. NET DEFINED BENEFIT LIABILITY(ASSET) The Group's net defined benefit liability shifted from a net asset of (140,685) million Won at December 31, 2024, to a net liability of 37,704 million Won as of March 31, 2025, this change was primarily due to a decrease in the fair value of plan assets and an increase in the present value of defined benefit obligations, the Group is exposed to various risks through its defined benefit plan, including asset volatility and inflation risk Net Defined Benefit Liability (Asset) (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | Change (Absolute) | | :---------------------------------- | :------------- | :---------------- | :---------------- | | Present value of defined benefit obligation | 1,845,135 | 1,751,605 | 93,530 | | Fair value of plan assets | (1,807,431) | (1,892,290) | 84,859 | | Net defined benefit liabilities (assets) | 37,704 | (140,685) | 178,389 | - The Group is exposed to risks such as volatility of asset returns, decreases in high-quality corporate bond returns, and inflation risk related to its defined benefit plan[233] - Costs recognized in net income related to the defined benefit plan were 36,183 million Won in Q1 2025, an increase from 32,118 million Won in Q1 2024[234] 19. OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES Total other financial liabilities and other liabilities increased by 24.07% to 41,087,785 million Won as of March 31, 2025, from 33,110,549 million Won at December 31, 2024, this significant increase was mainly driven by a rise in accounts payable and other miscellaneous financial liabilities, partially offset by a decrease in domestic exchange settlement credits Other Financial Liabilities and Other Liabilities (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :-------------------------------- | :------------- | :---------------- | :---------------- | :--------- | | Total Other Liabilities | 41,087,785 | 33,110,549 | 7,977,236 | 24.09% | | Accounts payable | 17,078,986 | 7,250,633 | 9,828,353 | 135.55% | | Domestic exchange settlement credits | 2,224,346 | 7,592,473 | (5,368,127) | -70.70% | | Other miscellaneous financial liabilities | 8,370,547 | 3,857,393 | 4,513,154 | 117.01% | - Accounts payable increased by 135.55% and other miscellaneous financial liabilities increased by 117.01% in Q1 2025[235] - Domestic exchange settlement credits decreased by 70.70% in Q1 2025[235] 20. DERIVATIVES The Group utilizes various derivative instruments for trading and hedging purposes, including interest rate, currency, and equity derivatives, as of March 31, 2025, total derivative assets were 8,371,506 million Won and total derivative liabilities were 7,712,483 million Won, the Group employs fair value hedges, cash flow hedges, and hedges of net investment in foreign operations to manage market risks Derivative Assets and Liabilities (March 31, 2025, Korean Won in millions) | Category | Assets | Liabilities | | :-------------------------------------- | :---------- | :---------- | | Derivatives for trading | 8,189,086 | 7,626,865 | | Derivatives for cash flow hedge | 175,021 | 37 | | Derivatives for fair value hedge | 7,399 | 85,581 | | Total Derivatives | 8,371,506 | 7,712,483 | - Fair value hedges are applied to fixed interest rate foreign currency denominated debentures and foreign currency loans to mitigate fair value volatility from market interest rate fluctuations[238] - Cash flow hedges are used to mitigate cash flow fluctuation risks from variable interest rate debentures and foreign currency debentures due to changes in market interest rates and foreign exchange rates[243] - Hedges of net investment in foreign operations address foreign currency exposure from net investments in subsidiaries like Woori America Bank, using USD denominated foreign currency bonds as hedging instruments[248][250] - In Q1 2025, fair value hedges resulted in 3,655 million Won in hedge ineffectiveness recognized in profit or loss[258] 21. DEFERRED DAY 1 PROFITS OR LOSSES Deferred day 1 profits or losses represent the difference between the transaction price and fair value of financial instruments when some valuation variables are unobservable, for Q1 2025, the beginning balance of 28 million Won was fully recognized in losses, resulting in an ending balance of zero Deferred Day 1 Profits or Losses (Korean Won in millions) | Metric | Q1 2025 | Q1 2024 | | :-------------------------- | :------ | :------ | | Beginning balance | 28 | 7,848 | | Amounts recognized in losses | (28) | (5,879) | | Ending balance | — | 1,969 | - The entire deferred day 1 profit or loss of 28 million Won was recognized as a loss in Q1 2025[260] 22. EQUITY As of March 31, 2025, total equity was 35,523,002 million Won, a slight decrease from December 31, 2024, this section details the components of equity, including capital stock, hybrid securities, capital surplus, capital adjustments, accumulated other comprehensive income, and retained earnings, along with regulatory reserves and treasury stock movements Equity Components (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :-------------------------------- | :------------- | :---------------- | :---------------- | :--------- | | Total Equity | 35,523,002 | 35,895,269 | (372,267) | -1.04% | | Capital stock | 3,802,676 | 3,802,676 | — | 0.00% | | Hybrid securities | 3,411,343 | 3,810,435 | (399,092) | -10.47% | | Capital surplus | 934,100 | 934,100 | — | 0.00% | | Capital adjustments | (1,708,906) | (1,734,555) | 25,649 | -1.48% | | Accumulated other comprehensive income | 306,045 | 333,670 | (27,625) | -8.28% | | Retained earnings | 26,982,519 | 26,950,510 | 32,009 | 0.12% | | Non-controlling interests | 1,795,225 | 1,798,433 | (3,208) | -0.18% | - Hybrid securities decreased by 10.47% due to redemption during the period[262][264] - The regulatory reserve for credit losses in retained earnings increased by 62,572 million Won to 2,731,414 million Won as of March 31, 2025[269] - Treasury stocks increased from 3,082,276 shares (35,517 million Won) to 4,632,276 shares (61,158 million Won) in Q1 2025 due to acquisitions[269] 23. DIVIDENDS The Group declared a quarterly dividend of 200 Won per share (totaling 147,428 million Won) on April 25, 2025, to be paid on May 30, 2025, with a record date of May 10, 2025, for the fiscal year ended December 31, 2024, dividends were 660 Won per share, totaling 490,075 million Won - A quarterly dividend of 200 Won per share (totaling 147,428 million Won) was declared on April 25, 2025, with the record date set as of May 10, 2025, and payment on May 30, 2025[312] - Dividends per share for the fiscal year ending December 31, 2024, were 660 Won (totaling 490,075 million Won), approved at the general shareholders' meeting on March 26, 2025[270] 24. NET INTEREST INCOME Net interest income for Q1 2025 increased by 2.45% to 2,251,991 million Won compared to Q1 2024, while total interest income decreased, a larger decrease in interest expense contributed to the net increase Interest Income and Expense (Korean Won in millions) | Category | Q1 2025 | Q1 2024 | Change (Absolute) | Change (%) | | :----------------------- | :---------- | :---------- | :---------------- | :--------- | | Total Interest income | 5,305,169 | 5,469,501 | (164,332) | -3.00% | | Total Interest expense | (3,053,178) | (3,271,298) | 218,120 | -6.67% | | Net interest income | 2,251,991 | 2,198,203 | 53,788 | 2.45% | - Interest on loans decreased from 4,741,811 million Won in Q1 2024 to 4,589,095 million Won in Q1 2025[271] - Interest on deposits due to customers decreased by 6.86% to 2,208,418 million Won in Q1 2025[271] 25. NET FEES AND COMMISSIONS INCOME Net fees and commissions income for Q1 2025 increased by 1.69% to 511,434 million Won compared to Q1 2024, this was driven by an increase in total fees and commissions income, particularly from lease-related fees and credit card commissions, while total expenses also rose Fees and Commissions Income and Expense (Korean Won in millions) | Category | Q1 2025 | Q1 2024 | Change (Absolute) | Change (%) | | :-------------------------------- | :-------- | :-------- | :---------------- | :--------- | | Total Fees and commissions income | 708,971 | 689,674 | 19,297 | 2.80% | | Total Fees and commissions expense | (197,537) | (186,743) | (10,794) | 5.78% | | Net fees and commissions income | 511,434 | 502,931 | 8,503 | 1.69% | - Fees and commission received related to lease increased by 16.36% to 239,363 million Won in Q1 2025[272] - Fees and commission received on credit card increased by 6.57% to 160,616 million Won in Q1 2025[272] 26. DIVIDEND INCOME Dividend income for Q1 2025 increased by 4.55% to 69,824 million Won compared to Q1 2024, this growth was primarily from dividend income related to financial assets at FVTPL and FVTOCI Dividend Income (Korean Won in millions) | Category | Q1 2025 | Q1 2024 | Change (Absolute) | Change (%) | | :-------------------------------------- | :------ | :------ | :---------------- | :--------- | | Total Dividend income | 69,824 | 66,782 | 3,042 | 4.55% | | Dividend income related to FVTPL | 55,279 | 54,365 | 914 | 1.68% | | Dividend income related to FVTOCI | 14,545 | 12,417 | 2,128 | 17.14% | - Dividend income recognized from equity securities at FVTOCI increased by 17.14% in Q1 2025[273] 27. NET GAIN OR LOSS ON FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS MANDATORILY MEASURED AT FAIR VALUE Net gain on financial instruments at FVTPL significantly decreased by 60.75% to 202,368 million Won in Q1 2025 compared to Q1 2024, this was primarily due to a substantial decrease in gains from derivatives held for trading, particularly interest rate and currency derivatives Net Gain or Loss on Financial Instruments at FVTPL (Korean Won in millions) | Category | Q1 2025 | Q1 2024 | Change (Absolute) | Change (%) | | :-------------------------------------- | :-------- | :-------- | :---------------- | :--------- | | Total Net gain on FVTPL | 202,368 | 515,607 | (313,239) | -60.75% | | Net gain (loss) on FVTPL Securities | 210,340 | (110,617) | 320,957 | -290.15% | | Net gain (loss) on FVTPL Loans | 1,140 | 758 | 382 | 50.40% | | Net gain (loss) on Derivatives (Trading) | 4,885 | 625,524 | (620,639) | -99.22% | - Net gain from derivatives held for trading plummeted by 99.22% in Q1 2025, from 625,524 million Won to 4,885 million Won[274] - Gains on transactions and valuation of interest rate derivatives decreased from 796,469 million Won in Q1 2024 to 356,578 million Won in Q1 2025, while losses increased[274] 28. NET GAIN OR LOSS ON FINANCIAL ASSETS AT FVTOCI Net gain on financial assets at FVTOCI increased by 62.41% to 33,257 million Won in Q1 2025 compared to Q1 2024, primarily from gains on transactions of securities Net Gain or Loss on Financial Assets at FVTOCI (Korean Won in millions) | Category | Q1 2025 | Q1 2024 | Change (Absolute) | Change (%) | | :-------------------------------------- | :------ | :------ | :---------------- | :--------- | | Net gain on FVTOCI Financial Assets | 33,257 | 20,476 | 12,781 | 62.41% | | Gain (Loss) on transactions of securities | 33,257 | 20,476 | 12,781 | 62.41% | 29. REVERSAL OF (PROVISION FOR) IMPAIRMENT LOSSES DUE TO CREDIT LOSS Total impairment losses due to credit loss increased by 18.82% to (435,501) million Won in Q1 2025 compared to Q1 2024, this was mainly driven by higher provisions for impairment loss on loans and other financial assets at amortized cost Reversal of (Provision for) Impairment Losses (Korean Won in millions) | Category | Q1 2025 | Q1 2024 | Change (Absolute) | Change (%) | | :------------------------------------------ | :---------- | :---------- | :---------------- | :--------- | | Total Impairment Losses | (435,501) | (366,512) | (68,989) | 18.82% | | Provision for impairment loss on loans & other financial assets at amortized cost | (441,886) | (363,428) | (78,458) | 21.59% | | Reversal (provision) for guarantees | 2,619 | (2,447) | 5,066 | -207.03% | - Provision for impairment loss due to credit loss on loan and other financial assets at amortized cost increased by 21.59% in Q1 2025[277] - Reversal (provision) for guarantees shifted from a provision of (2,447) million Won in Q1 2024 to a reversal of 2,619 million Won in Q1 2025[277] 30. GENERAL AND ADMINISTRATIVE EXPENSES AND OTHER NET OPERATING INCOME (EXPENSES) General and administrative expenses increased by 26.61% to 1,306,172 million Won in Q1 2025 compared to Q1 2024, primarily due to higher employee benefits and other general and administrative expenses, other net operating expenses also increased, driven by losses on foreign exchange transactions and contributions to funds, despite a significant increase in gains on foreign exchange transactions General and Administrative Expenses (Korean Won in millions) | Category | Q1 2025 | Q1 2024 | Change (Absolute) | Change (%) | | :-------------------------------- | :---------- | :---------- | :---------------- | :--------- | | Total General & Administrative Expenses | 1,306,172 | 1,031,667 | 274,505 | 26.61% | | Employee benefits | 830,367 | 636,514 | 193,853 | 30.46% | | Other general and administrative expenses | 332,858 | 265,269 | 67,589 | 25.48% | Other Net Operating Income (Expenses) (Korean Won in millions) | Category | Q1 2025 | Q1 2024 | Change (Absolute) | Change (%) | | :-------------------------------------- | :-------- | :-------- | :---------------- | :--------- | | Total Other Operating Income | 445,110 | 227,653 | 217,457 | 95.52% | | Total Other Operating Expenses | (922,853) | (1,028,903) | 106,050 | -10.31% | | Net Other Operating Expense | (477,743) | (801,250) | 323,507 | -40.37% | | Gains on transactions of foreign exchange | 288,336 | 68,254 | 220,082 | 322.47% | | Losses on transactions of foreign exchange | (317,375) | (469,650) | 152,275 | -32.42% | - Employee benefits increased by 30.46% in Q1 2025, largely due to higher termination benefits[278] - Gains on transactions of foreign exchange increased by 322.47% in Q1 2025, while losses on foreign exchange transactions decreased by 32.42%[278][279] - The carrying amount of liabilities related to performance condition share-based payments was 65,342 million Won as of March 31, 2025[283] 31. NON-OPERATING INCOME (EXPENSES) Non-operating income and expenses resulted in a net expense of (4,668) million Won in Q1 2025, an improvement from (6,732) million Won in Q1 2024, this was driven by an increase in other non-operating income and a decrease in other non-operating expenses, despite a decrease in net gains from joint ventures and associates Non-Operating Income (Expenses) (Korean Won in millions) | Category | Q1 2025 | Q1 2024 | Change (Absolute) | Change (%) | | :------------------------------------------ | :-------- | :-------- | :---------------- | :--------- | | Net Non-operating income and expense | (4,668) | (6,732) | 2,064 | -30.66% | | Share of gain of joint ventures and associates | 10,035 | 5,509 | 4,526 | 82.16% | | Other non-operating income | 23,179 | 11,746 | 11,433 | 97.34% | | Other non-operating expenses | (37,882) | (23,987) | (13,895) | 57.93% | - Share of gain of joint ventures and associates increased by 82.16% to 10,035 million Won in Q1 2025[284] - Other non-operating income nearly doubled, increasing by 97.34% to 23,179 million Won, while other non-operating expenses increased by 57.93%[284] 32. INCOME TAX EXPENSE Income tax expense for Q1 2025 decreased by 31.14% to 210,039 million Won compared to Q1 2024, this reduction was primarily due to a decrease in current tax expense and a shift from deferred tax expense to deferred tax income, the weighted average annual effective tax rate decreased from 26.7% to 24.3% Income Tax Expense (Korean Won in millions) | Category | Q1 2025 | Q1 2024 | Change (Absolute) | Change (%) | | :------------------------ | :-------- | :-------- | :---------------- | :--------- | | Total Income tax expense | 210,039 | 305,046 | (95,007) | -31.14% | | Current tax expense | 244,246 | 196,100 | 48,146 | 24.55% | | Deferred tax expense | (34,207) | 108,946 | (143,153) | -131.40% | - Deferred tax expense shifted to a deferred tax income of (34,207) million Won in Q1 2025, a significant change from an expense of 108,946 million Won in Q1 2024[285] - The weighted average annual effective tax rate decreased from 26.7% in Q1 2024 to 24.3% in Q1 2025[285] 33. EARNINGS PER SHARE ("EPS") Basic and diluted earnings per share (EPS) for Q1 2025 decreased by 26.04% to 781 Won compared to 1,056 Won in Q1 2024, this decline reflects a decrease in net income attributable to common shareholders, despite a slight decrease in the weighted average number of common shares outstanding Basic EPS Calculation (Korean Won in millions, except EPS and shares) | Metric | Q1 2025 | Q1 2024 | Change (Absolute) | Change (%) | | :---------------------------------------- | :-------- | :-------- | :---------------- | :--------- | | Net income attributable to common shareholders | 577,185 | 788,742 | (211,557) | -26.82% | | Weighted average common shares (million) | 739 | 747 | (8) | -1.07% | | Basic EPS (Won) | 781 | 1,056 | (275) | -26.04% | - Net income attributable to common shareholders decreased by 26.82% in Q1 2025[287] - The weighted average number of common shares outstanding decreased slightly by 1.07% to 739 million shares[287] - Diluted EPS is equal to basic EPS because there is no dilution effect for the three-month periods ended March 31, 2025 and 2024[287] 34. CONTINGENT LIABILITIES AND COMMITMENTS As of March 31, 2025, Woori Financial Group's total guarantees remained stable at 16,569,506 million Won, with confirmed guarantees being the largest component, loan commitments increased to 136,176,990 million Won, the Group is also involved in 902 litigation cases with a total value of 865,009 million Won and has various other commitments, including those related to trust business and asset securitization Guarantees (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :------------------------ | :------------- | :---------------- | :---------------- | :--------- | | Total Guarantees | 16,569,506 | 16,611,262 | (41,756) | -0.25% | | Confirmed guarantees | 11,117,784 | 11,091,285 | 26,499 | 0.24% | | Unconfirmed guarantees | 4,896,947 | 4,938,937 | (41,990) | -0.85% | Loan Commitments and Other Commitments (Korean Won in millions) | Category | March 31, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :-------------------- | :------------- | :---------------- | :---------------- | :--------- | | Loan commitments | 136,176,990 | 133,863,588 | 2,313,402 | 1.73% | | Other commitments | 7,246,535 | 6,564,353 | 682,182 | 10.39% | - The Group is a defendant in 902 litigation cases with a total litigation value of 865,009 million Won as of March 31, 2025, with provisions for litigations amounting to 23,098 million Won[291] - The Group has obligations related to guaranteed completion with trust business, with an initial PF Commitment Limit of 507,668 million Won as of March 31, 2025[294] 35. RELATED PARTY TRANSACTIONS This section details the Group's transactions with related parties, including associates and key management, as of March 31, 2025, significant balances of loans, deposits, and other liabilities were held with associates, the Group also provides guarantees and commitments to related parties and discloses compensation for key management Assets and Liabilities with Related Parties (March 31, 2025, Korean Won in millions) | Related Party (Associate) | Account Title | March 31, 2025 | December 31, 2024 | | :------------------------ | :-------------------- | :------------- | :---------------- | | LOTTE CARD Co. Ltd. | Loans | 14,665 | 27,913 | | | Deposits due to customers | 26,194 | 20,207 | | K BANK Co., Ltd. | Other liabilities | 165,574 | 193,719 | | Godo Kaisha Oceanos 1 | Loans | 24,299 | 38,770 | - Guarantees provided to related parties amounted to 498,300 million Won for LOTTE CARD Co. Ltd. (unused loan commitment) as of March 31, 2025[307] - Commitments with related parties include 990,000 million Won for Samsung Together Korea IPPF private securities investment trust 3 [Equity-FoFs] (securities purchase commitment)[309] Compensation for Key Management (Korean Won in millions) | Category | Q1 2025 | Q1 2024 | Change (Absolute) | Change (%) | | :-------------------------- | :------ | :------ | :---------------- | :--------- | | Total Compensation | 8,214 | 8,852 | (638)