In This Article:
Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Woori Financial Group Inc (NYSE:WF) reported a net income of KRW615.6 billion for Q1 2025, demonstrating solid revenue-generating capabilities despite market volatility.
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The group's net operating revenue increased by 2.4% year-over-year and 6.6% quarter-over-quarter, reaching KRW2,609.5 billion.
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Efforts to optimize the portfolio and diversify revenue sources have resulted in stable growth in non-interest income, driven by core fee income.
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The group's preliminary CET1 ratio improved to 12.42%, a 30 basis point increase from the end of the previous year, showing progress towards achieving a 12.5% CET1 ratio.
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Woori Financial Group Inc (NYSE:WF) announced a quarterly dividend of KRW200 per share, an 11% increase year-over-year, and is executing a share buyback and cancellation program totaling KRW150 billion.
Negative Points
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Net income came in below market expectations due to conservative provisioning and non-regular items such as costs related to the ERP and investments for future growth.
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Credit costs increased by 18.8% year-over-year to KRW435.5 billion, driven by challenging internal and external business environments.
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The group's SG&A expenses rose by 26.6% year-over-year, with a cost-to-income ratio of 43.6%, influenced by one-off factors including early retirement program costs.
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The bank's loan portfolio showed a slight 1% decrease versus the end of the year, with retail loans remaining flat due to government household debt management policies.
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Concerns over economic recession and market volatility persist, with potential impacts from prolonged high exchange rates and US reciprocal tariff policies.
Q & A Highlights
Q: Can you elaborate on the factors that led to the net income being below market expectations? A: Lee Sung-Wook, CFO: The net income for the first quarter of 2025 was KRW615.6 billion. This was impacted by conservative provisioning due to concerns about future economic downturns and non-regular items such as costs related to the ERP conducted at the beginning of the year. Despite these, the group's fundamentals remain solid with an ROE of 9.5%.
Q: How did the group's net operating revenue perform in the first quarter? A: Lee Sung-Wook, CFO: The net operating revenue increased by 2.4% year-over-year and 6.6% quarter-over-quarter to KRW2,609.5 billion. This growth was driven by solid interest income and efforts to strengthen non-interest businesses and diversify revenue sources across all affiliates.