WF — Woori Financial Group Inc.

Woori Financial Group Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Net Income: KRW 603.8 billion, flat year-over-year, slightly below market expectations due to various one-off costs and market volatility.
• Running Basis Income: Approximately KRW 900 billion, indicating potential recovery once market conditions stabilize.
• CET1 Ratio: Reached a record 13.6%, up 71 basis points year-to-date, reflecting strong capital management.
• Quarterly Dividend: Increased by 10% year-over-year to KRW 221 per share, nontaxable for individual investors.
• Net Operating Revenue: KRW 2.7577 trillion, a 5.6% increase year-over-year, driven by diverse revenue sources.
• NIM (Net Interest Margin): Improved to 1.51%, up 2 basis points quarter-on-quarter and 7 basis points year-over-year.

2. Strategic Updates and Business Highlights:

• Nonbank Subsidiaries: Contribution to profits rose significantly from 9% to 25% year-over-year, with a 185% increase in income from these sectors.
• Capital Injection: KRW 1 trillion planned for Woori Investment & Securities to enhance its market position and support growth in capital-based investment banking.
• Insurance Business Integration: Tongyang Life is being turned into a wholly owned subsidiary to streamline operations and improve competitiveness.
• Focus on Corporate Finance: Continued support for sectors like semiconductors and bio, with corporate loans growing by 2% to KRW 184 trillion.

3. Forward Guidance and Outlook:

• NIM Expectations: Anticipated to maintain or improve slightly from 1.46% for the year, despite potential regulatory impacts.
• Credit Cost Ratio: Expected to stabilize around 40 bps for 2026, with a target for a 20% reduction in overall credit costs.
• Shareholder Returns: Commitment to maintaining a high dividend payout ratio and potential for additional treasury stock buybacks in the second half of the year.

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

• Earnings Underperformance: Net income fell short of expectations due to ERP-related costs, one-off provisions, and market volatility.
• Market Volatility Risks: External factors such as geopolitical tensions and rising oil prices may impact asset quality and lending conditions.
• High SG&A Costs: SG&A expenses rose by 9% year-over-year, with ERP costs contributing significantly, leading to a cost-to-income ratio of 45%.
• Asset Quality Management: Concerns over potential deterioration in asset quality due to external economic pressures, necessitating ongoing risk management efforts.

5. Notable Q&A Insights:

• Tongyang Life Integration: Management emphasized the importance of this move for operational efficiency and enhanced earnings capacity.
• CET1 Ratio Impact: Capital injections into subsidiaries will have minimal immediate impact on the CET1 ratio, with expectations for future improvements as profitability increases.
• Kbank Equity: Woori holds a 9.2% stake in Kbank, with plans to evaluate whether to retain or dispose of shares post-lockup, which could positively affect capital ratios.
• RoRWA Focus: The securities business is expected to see a significant increase in risk-weighted assets, with a goal to align RoRWA with banking operations.

This summary encapsulates the key takeaways from Woori Financial Group's Q1 2026 earnings call, highlighting financial performance, strategic initiatives, future outlook, and challenges faced by the organization.