Woori Financial Group announced that its net profit for the first half of this year totaled 1,538.6 billion won.
This is a 12.7 percent decrease from 176.19 billion won in the first half of last year.
Woori Financial Group explained that the decrease in net profit in the first half of the year was due to a one-time factor, provisioning.
“Due to continued uncertainties in macroeconomic indicators such as exchange rates, Woori Financial Group proactively set aside 263 billion won in additional loan loss provisions and 54 billion won in other provisions related to private equity funds that had been postponed for buybacks,” said a Woori Financial Group official during a conference call.
“These proactive measures to respond to risks led to a decline in net income in the second quarter, but this was a temporary phenomenon.”
Woori Financial Group’s net operating income, which combines interest income and non-interest income, increased 2.8 percent year on year to 5,023.7 billion won.
Interest income amounted to 4,413 billion won in the first half of the year, up 7.5 percent from 4,103.3 billion won in the same period of last year, driven by solid growth in corporate loans, despite a drop in banking margins due to higher funding costs.
On the other hand, its non-interest income in the first half of the year amounted to 610.7 billion won, down 22 percent from the same period of last year.
According to Woori Financial Group, this was due to lower profits from the non-banking sector, IB, and the real estate business due to an economic downturn.
Woori Financial Group’s SG&A expense ratio reached 40.8 percent. This is within the group's annual target of 45 percent.
“At a time when top-line growth is limited, the importance of cost management is more important than ever,” the official said. “Excluding digital IT and sales activity costs for future growth, Woori Financial Group is actively promoting cost management efforts at the group level.”
Woori Financial Group emphasized that it would continue to focus on its financial soundness management.
Key asset quality indicators such as the group's delinquency rate deteriorated in the first half of the year.
The group’s non-performing loan (NPL) ratio increased by 0.05 percentage points to 0.36 percent in the second quarter of this year from the previous quarter (0.31 percent).
Woori Financial Group’s net interest margin (NIM) stood at 1.85 percent during the same period, down 0.06 percentage points from 1.91 percent in the previous quarter.
The NIM of Woori Bank hit 1.59 percent in the second quarter of this year, down 0.06 percentage points from 1.65 percent in the previous quarter.
Woori Bank’s consolidated net profit was KRW 1.472 billion won in the first half of the year, down 5.3 percent from 1,554.5 billion won in the same period of 2022.
Woori Card posted consolidated net income of 81.9 billion won in the first half of the year, down 38.7 percent from 134 billion won a year earlier.
That of Woori Financial Capital came in at 71.3 billion won, while Woori Investment Bank posted 12.2 billion won in net income.