Woori Financial (WF)2024-02-06 18:08Summary of Woori Financial Group FY2023 Earnings Conference Call Company Overview - Company: Woori Financial Group Inc. (NYSE: WF) - Date of Call: February 6, 2024 Key Financial Performance - Net Income: KRW 2,516.7 billion, a decrease of 19.9% year-over-year due to one-off factors including preemptive provisions and corporate expenses [4][36] - SG&A Expenses: KRW 4,443.9 billion, a decrease of 1.9% year-over-year despite inflationary pressures [6][18] - Cost-Income Ratio: 43.5%, a decrease of 0.9 percentage points year-over-year, indicating stable operational efficiency [6][19] - Credit Cost: Totaled KRW 1,880.7 billion for 2023, approximately double the previous year, reflecting proactive risk management [7][21] - MPL Ratio: 0.35% with a coverage ratio of 229%, the highest level to date, indicating strong loss absorption capabilities [8][22] - CET1 Ratio: Expected to be 11.9%, a 0.3% increase from the previous year, demonstrating prudent risk management [9][23] Revenue and Income Sources - Net Interest Income: KRW 8,742.5 billion, stable compared to the prior year, but with a 2% decrease in Q4 [11][12] - Non-Interest Income: KRW 1,094.8 billion, a decrease of 4.7% year-over-year, but core fee income showed a solid growth trend [15][16] Loan and Asset Management - Total Loans: KRW 311 trillion, a 5.1% increase year-over-year, with corporate loans growing by 8% [13][14] - Real Estate Project Finance Loans: Total of KRW 3.4 trillion, with proactive evaluations and risk management strategies in place [42][43] Capital Management and Shareholder Returns - Dividends: Year-end dividend of KRW 641 per share, with a total shareholder return rate of 33.7% [9][27] - Shareholder Return Policy: Plans to increase total shareholder return to 35% when CET1 ratio is above 13% [31][29] - Future Plans: Focus on enhancing capital adequacy and managing risk-weighted assets to support shareholder returns [32][33] Risk Management Insights - Delinquency Rates: Slight increases in delinquency rates for Woori Bank (0.26%) and Woori Card (1.22%), but still among the lowest in the industry [39] - Proactive Risk Management: Emphasis on preemptive provisioning and strengthening loss absorption capacity, particularly in vulnerable sectors [40][41] Strategic Outlook - 2024 Focus: Emphasis on asset soundness and capital adequacy, with plans to improve portfolio quality and manage high-risk assets [45] - Market Conditions: Anticipation of continued high interest rates and market instability, necessitating a robust risk management framework [45] Additional Notes - Corporate Value Program: Aimed at addressing stock market undervaluation and enhancing shareholder returns [32] - Future Dividend Plans: Aiming to restore dividends to 2022 levels and increase in the future [34] This summary encapsulates the key points discussed during the earnings call, highlighting Woori Financial Group's financial performance, strategic initiatives, and risk management efforts.