Woori Financial Q1 Net Profit Slips 2.09% on Middle East Risks Despite Strong Fee Growth

Woori Financial Group said its first-quarter net profit edged down as a currency shock tied to Middle East risks weighed on results, despite a sharp rise in noninterest income.

Woori Financial said April 24 that first-quarter net profit totaled 603.8 billion won, down 2.09% from a year earlier. 
 
Net interest income rose 2.3% to 2.3032 trillion won, supported by growth in corporate finance and a steady net interest margin. The bank’s NIM increased to 1.51% in the first quarter from 1.49% in the fourth quarter of last year, up 0.02 percentage points.

Noninterest income climbed 26.7% to 454.6 billion won as the contribution from nonbank units such as securities and insurance expanded. Fee income hit a quarterly record of 576.8 billion won. 

Woori Financial said profit was pressured as gains related to securities and foreign exchange fell in the wake of the Middle East war, and as one-off provisions tied to overseas units were reflected in results. 

A Woori Financial official said securities- and FX-related gains declined and the group set aside provisions of about 100 billion won for Indonesia’s Bank Woori Saudara, adding that the factors were temporary and driven by external conditions. The official said the company expects a recovery as recent market indicators stabilize.

The group’s ratio of substandard or lower loans rose to 0.68% at the end of the first quarter from 0.63% at the end of last year. The bank’s delinquency rate was 0.38% and the card delinquency rate was 1.80%, up 0.04 percentage points and 0.27 percentage points, respectively. Woori Financial’s common equity Tier 1 ratio stood at a record 13.6% at the end of the first quarter, up 0.7 percentage points from the end of last year.

Affiliate Woori Card posted first-quarter net profit of 43.9 billion won, up 33.8% from a year earlier. Woori Financial Capital earned 40.0 billion won, up 30.7%.

Tongyang Life Insurance, acquired last year, reported net profit of 25.0 billion won. Woori Investment & Securities said net profit surged 976.9% on a stronger stock market. 

A Woori Financial official said efforts to strengthen capital adequacy and diversify earnings are translating into market confidence, adding that the group plans to expand shareholder returns as profit contributions from nonbank units gain momentum.

Separately, Woori Financial’s board on April 24 approved a first-quarter dividend of 220 won per share, up 10% from a year earlier. The dividend will be paid tax-free.