WF — Woori Financial Group Inc.

Woori Financial Group Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

• Net Income: KRW 3,141.3 billion, up 1.8% YoY.
• Return on Equity (ROE): Maintained at 9.1%.
• Net Operating Revenue: KRW 10,957.4 billion, a 5% increase YoY.
• Net Interest Margin (NIM): Woori Bank's NIM at 1.46%, group NIM at 1.73%, with slight improvements of 2 and 3 basis points, respectively.
• Credit Cost: KRW 2,086.2 billion, with a credit cost ratio of 0.53%. Excluding one-off costs, the ratio was 0.42%.
• CET1 Ratio: Ended 2025 at 12.9%, exceeding the target of 12.5%, up 77 basis points from 2024.
• Dividends: Year-end dividend of KRW 760 per share, total annual dividend increased by 13.3% YoY to KRW 1,361.

2. Strategic Updates and Business Highlights:

• Completed the acquisition of an insurance company, enhancing the group's business portfolio and enabling synergies in wealth management and investment banking.
• Launched MTS Group, securing a final license for the securities business, contributing to diversified revenue sources.
• Noninterest income reached a record KRW 1,926.6 billion, up 24% YoY, driven by strong fee income and insurance contributions.
• Focused on asset quality management and prudent risk-weighted asset (RWA) management, with plans to support productive sectors of the economy, including AI and semiconductors.

3. Forward Guidance and Outlook:

• For 2026, the group targets a 5% growth in total assets and aims to maintain NIM at least at the current level.
• Noninterest income is expected to grow by around 20%, supported by the insurance acquisition and securities business contributions.
• Credit costs are projected to decrease by approximately KRW 420 billion, targeting a normalized credit cost ratio of around 0.40%.
• Plans to achieve a CET1 ratio of 13% ahead of schedule, with potential additional share buybacks in the second half of 2026 if targets are met.

4. Bad News, Challenges, or Points of Concern:

• Despite overall growth, corporate loan demand has been sluggish, particularly in the SME sector, leading to a flat loan book YoY.
• The credit cost ratio reflects ongoing economic uncertainties and high market rates, which could pose risks to asset quality.
• Increased SG&A expenses due to investments in the insurance and securities businesses, with a cost/income ratio of 45.7% indicating pressure on profitability.
• The competitive landscape remains challenging, particularly in the securities sector, where capital increases may be necessary to support growth.

5. Notable Q&A Insights:

• CFO Kwak Seong-Min addressed concerns about the dividend policy, confirming a target of 10% DPS growth for 2026, with a consistent approach to quarterly and year-end dividends.
• Clarified that while capital increases for the securities business are under consideration, they are expected to be gradual and will not adversely impact the CET1 ratio.
• Emphasized the importance of maintaining asset quality and managing credit costs amid economic headwinds, with a focus on prudent lending practices.
• The group is committed to enhancing shareholder returns through nontaxable dividends and share buybacks, aiming to solidify its position as a leading financial dividend stock.

Overall, Woori Financial Group demonstrated stable performance in 2025, with strategic initiatives aimed at enhancing growth and shareholder value, despite facing challenges in loan demand and rising costs.