Woori Bank (WF) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.The power of a changing earnings pict ...

Financial Performance and Ratios - As of December 31, 2024, the total amount of assets provided as collateral for secured borrowings was ₩24,133 billion[80]. - The common equity Tier I capital adequacy ratio was 12.13%, exceeding the minimum requirement of 9.0%[88]. - The capital adequacy ratios for Woori Bank were 13.05% for common equity Tier I, 13.91% for Tier I, and 15.85% for combined Tier I and Tier II, all exceeding regulatory requirements[88]. - Approximately 95.1% of customer deposits had maturities of one year or less or were payable on demand as of December 31, 2024[85]. - The total book value of debt securities held in the trading and investment securities portfolio was ₩12,215 billion as of December 31, 2024[87]. Loan Performance and Risks - Non-performing loans to overseas borrowers increased from ₩304 billion as of December 31, 2023, to ₩447 billion as of December 31, 2024[83]. - Labor union unrest may disrupt operations and hinder future organizational changes and acquisitions[86]. - The company faces risks from potential legal claims and regulatory actions, which could expose it to monetary damages and reputational harm[106]. - The company is subject to evolving cybersecurity risks, with significant reliance on information technology systems for daily operations[105]. - The company may experience customer attrition or decreased net interest margins due to competitive strategies and government regulations affecting interest rates[113]. Government Regulations and Economic Environment - The Bank of Korea raised its policy rate to 3.50% from April 2022 through January 2023, then lowered it to 2.75% in February 2025[82]. - The Financial Consumer Protection Act, effective March 25, 2021, imposes stricter distribution guidelines and increased liability for customer losses, potentially increasing compliance costs for the company[112]. - The net interest spreads for Korean banks, including the company, have increased significantly due to rising interest rates, but may face pressure from new government regulations aimed at reducing these spreads[114]. - The Korean government announced a financial support program in December 2023, providing approximately ₩2 trillion in liquidity support to small business owners[117]. - The company faces risks from unfavorable economic developments in Korea, including potential declines in consumer confidence and spending due to rising interest rates[122]. International Operations and Sanctions - In 2024, the company generated total fee revenue of ₩340,000 from humanitarian trade activities involving the Central Bank of Iran (CBI), with net income before tax also amounting to ₩340,000[95]. - The company reported total fee revenue of ₩170,000 from telegraphic transfer services related to trade transactions with Iranian parties, with net income before tax also estimated at ₩170,000[95]. - The company maintains a limited number of deposit accounts for an Iranian financial institution subject to OFAC sanctions, which generated no fee revenues in 2024[95]. - The company has taken actions to negotiate repayment terms in Rubles to comply with sanctions, and has prepared response plans for potential additional sanctions against Russia[100]. - The company has been cooperating with an investigation regarding compliance with U.S. sanctions, which concluded with a cautionary letter from OFAC in December 2020[99]. Shareholder and Market Information - Major shareholders, including IMM Private Equity, sold an aggregate of 40,560,000 shares of common stock in block transactions between March 2024 and January 2025[130]. - The Korean government may impose restrictions on converting and remitting dividends in U.S. dollars during emergency circumstances, affecting shareholder returns[144]. - Ownership of common stock is restricted under Korean law, with a limit of 10.0% for single shareholders and 4.0% for non-financial business group companies[134]. - Non-Korean holders may face capital gains tax of up to 22.0% on realized gains if certain conditions are met, impacting investment returns[132]. - The KRX KOSPI Market, where the common stock is listed, is more volatile than U.S. markets, which may affect the market value of the stock[141]. Corporate Structure and Acquisitions - Woori Finance Holdings was established as a new financial holding company on January 11, 2019, through a comprehensive stock transfer, with shareholders receiving one share of the new company for each share of Woori Bank[166]. - In December 2014, the KDIC sold 40,143,022 shares of Woori Bank's common stock, representing 5.9% of its outstanding common stock, as part of the privatization plan[164]. - In June 2013, the Korean government announced a plan to privatize Woori Finance Holdings and its subsidiaries, which included the segregation of entities into three groups[157]. - Woori Finance Holdings merged with Woori Bank in November 2014, with Woori Bank remaining as the surviving entity[161]. - In August 2019, Woori Financial Group acquired a 73% equity interest in Woori Asset Management Corp., which became a consolidated subsidiary[174].

Financial Data and Key Metrics Changes - In Q1 2025, Woori Financial Group's net income was KRW 615.6 billion, which was below market expectations due to conservative provisioning and one-off costs [3][4] - The group's net operating revenue increased by 2.4% year-over-year and 6.6% quarter-over-quarter to KRW 2,609.5 billion [5] - The return on equity (ROE) stood at 9.5% [4] - The credit cost was KRW 435.5 billion, representing an 18.8% year-over-year increase [6] - The preliminary CET1 ratio improved by 30 basis points to 12.42% [8][23] Business Line Data and Key Metrics Changes - Interest income remained stable at KRW 252 billion, while net interest income increased by 2% year-over-year to KRW 357.5 billion [10][14] - Core fee income reached KRW 511.4 billion, driven by growth in wealth management efforts [15] - The bank's loan portfolio totaled KRW 330 trillion, showing a slight 1% decrease from the end of the previous year [12] - Retail loans remained stable at KRW 144 trillion, in line with government policies on household debt management [13] Market Data and Key Metrics Changes - The bank's net interest margin (NIM) was 1.44%, with the group's NIM, including credit card business, at 1.70%, reflecting a 4 basis point increase from the previous quarter [10] - The economic environment remains challenging, with higher delinquency and non-performing loan (NPL) ratios due to uncertainties in the Korean economy [7] Company Strategy and Development Direction - The company aims to achieve a CET1 ratio of 12.5% within the year, focusing on asset rebalancing and risk management [9][23] - Woori Financial Group is actively managing high-risk and distressed assets to stabilize credit costs [7] - The group is diversifying revenue sources and strengthening noninterest businesses to enhance profitability [5][15] - Plans to enter the insurance business are underway, with expectations of annual profit increases of KRW 300 billion to KRW 400 billion post-acquisition [30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging internal and external business environment, emphasizing the need for proactive risk management [4][21] - The company is prepared for potential impacts from prolonged high exchange rates and U.S. tariff policies [21][28] - Future growth is expected to be cautious, with a focus on maintaining asset soundness and capital adequacy [14][32] Other Important Information - The Board of Directors approved a Q1 dividend of KRW 200 per share, an 11% increase year-over-year [9][24] - The group is executing a share buyback program totaling KRW 150 billion [24] Q&A Session Summary Question: Concerns about capital policy and RWA allocation - Management acknowledged the need for balanced growth between bank and nonbank sectors and emphasized focusing on high-growth potential companies to improve capital ratios [35][38] Question: Performance of digital investments and targets - The company reported an MAU of 8.5 million for its super app, aiming to increase it to 9 million by year-end [44][45] Question: Impact of life insurance acquisition on capital ratio - Management stated that while the impact of the acquisition is still being assessed, they do not expect a significant negative effect on capital ratios [48][51] Question: Credit cost ratio awareness and improvement plans - Management acknowledged the higher credit cost ratio compared to peers and indicated that active measures are being taken to manage and improve it [56][61] Question: NIM trends and expectations - The company expects NIM to remain stable despite potential rate cuts, with a focus on increasing core assets [78][80] Question: Budget Telecom service expectations - The new service aims to attract younger customers and enhance existing customer activation through bundled offerings [82][84]

Financial Performance - Net income for 2024 reached 3,171,469 million Korean Won, a significant increase of 20.8% from 2,626,894 million in 2023[26]. - Total comprehensive income for 2024 was 3,554,188 million Korean Won, up from 3,290,431 million in 2023, marking an increase of 8.0%[26]. - Basic and diluted earnings per share improved to 3,950 Korean Won in 2024, compared to 3,230 Korean Won in 2023, an increase of 22.3%[26]. - Operating income increased to 4,255,190 million Korean Won in 2024, up from 3,499,029 million in 2023, representing a growth of 21.6%[25]. - Interest income increased to 22,013,341 million Korean Won in 2024, up from 20,641,554 million in 2023, representing an increase of 6.6%[25]. - Net interest income rose to 8,886,336 million Korean Won in 2024, compared to 8,742,540 million in 2023, reflecting a growth of 1.6%[25]. - Fees and commissions income rose to 2,874,216 million Korean Won in 2024, compared to 2,565,814 million in 2023, an increase of 12.0%[25]. - The net gain on financial instruments at FVTPL significantly increased to 1,492,783 million Korean Won in 2024, compared to 488,486 million in 2023, a growth of 205.5%[25]. Assets and Liabilities - Total assets increased to KRW 525,753,320 million as of December 31, 2024, up from KRW 498,004,936 million in 2023, representing a growth of approximately 5.6%[23]. - Total liabilities reached KRW 489,858,051 million in 2024, an increase from KRW 464,607,446 million in 2023, indicating a growth of around 5.4%[23]. - Loans and other financial assets at amortized cost rose to KRW 398,471,816 million in 2024, compared to KRW 373,148,148 million in 2023, marking an increase of about 6.8%[23]. - Financial assets at fair value through other comprehensive income (FVTOCI) grew to KRW 43,797,745 million in 2024, up from KRW 37,891,495 million in 2023, reflecting a rise of approximately 15.5%[23]. - The Group's financial liabilities at fair value through profit or loss (FVTPL) increased to KRW 9,896,597 million in 2024, up from KRW 6,138,313 million in 2023, indicating a significant rise of about 61.5%[23]. - The total cash and cash equivalents at the end of 2024 were 27,281,123 million Won, down from 30,556,618 million Won at the end of 2023, a decrease of about 10.0%[30]. Equity and Retained Earnings - The Group's total equity rose to KRW 35,895,269 million in 2024, compared to KRW 33,397,490 million in 2023, reflecting an increase of approximately 7.5%[23]. - Retained earnings increased to KRW 26,950,510 million in 2024, compared to KRW 24,986,470 million in 2023, showing a growth of approximately 7.9%[23]. - The total equity attributable to owners increased to 26,950,510 million Korean Won by the end of 2024, up from 24,986,470 million in 2023, reflecting a growth of 7.9%[27]. Cash Flow and Investments - Cash outflow from investing activities in 2024 was (34,299) million Won, a significant improvement from (2,254,141) million Won in 2023[30]. - The company issued debentures amounting to 41,067,565 million Won in 2024, compared to 31,101,841 million Won in 2023, reflecting a rise of approximately 32.1%[30]. - The company reported a net cash inflow from financing activities of 1,245,341 million Won in 2024, contrasting with a net outflow of (2,860,177) million Won in 2023[30]. - The total dividend paid in 2024 was (878,330) million Won, slightly down from (978,376) million Won in 2023, indicating a decrease of about 10.2%[30]. Ownership and Subsidiaries - Woori Financial Group Inc. fully owns Woori Bank, Woori Card Co., Ltd., Woori Financial Capital Co., Ltd., and several other subsidiaries, maintaining 100% ownership across most entities as of December 31, 2024[43]. - The acquisition of Woori Asset Management Corp. was completed in March 2024, making it a wholly-owned subsidiary[41]. - Woori Asset Trust Co., Ltd. increased its ownership percentage from 95.3% in 2023 to 99.6% in 2024, indicating a strategic consolidation in real estate trust services[43]. - PT Bank Woori Saudara Indonesia's ownership rose from 84.2% in 2023 to 90.8% in 2024, reflecting Woori Financial Group's commitment to expanding its presence in Indonesia[44]. - Woori Bank China Limited and Woori Bank Vietnam Limited maintain 100% ownership, reinforcing Woori Financial Group's strong foothold in key Asian markets[44]. Risk Management and Credit Losses - The allowance for credit losses for loans was recognized at KRW 3,357,625 million as of December 31, 2024[9]. - Impairment losses due to credit loss decreased to 1,716,295 million Korean Won in 2024 from 1,894,916 million in 2023, a reduction of 9.4%[25]. - The Group recognizes expected credit losses for financial assets at amortized cost and debt instruments measured at FVTOCI, with loss allowance based on 12-month expected credit loss or lifetime expected credit loss depending on credit risk changes[169]. Accounting and Reporting - The Group's accounting records are maintained in Korean Won and prepared in accordance with K-IFRS, ensuring compliance with international standards[79]. - The Group recognizes revenue based on transaction price allocated to the performance obligation when it performs that obligation to the customer[127]. - Financial assets are classified into categories based on business models, affecting how they are measured and reported[143]. - The Group's consolidated financial statements are presented in Korean Won, with foreign currency transactions translated at prevailing exchange rates[138].

Core Viewpoint - The investment rating for Woori Financial Group Inc. has been downgraded to a Hold from a previous Buy due to changes in shareholder structure [1]. Group 1: Company Overview - Woori Financial Group Inc. is listed on both NYSE and KOSDAQ, with the ticker symbol WF and 316140:KS respectively [1]. - The company is part of a research service focused on value investing in Asia, particularly targeting stocks with significant discrepancies between market price and intrinsic value [1][2]. Group 2: Investment Strategy - The investment strategy emphasizes deep value balance sheet bargains, such as net cash stocks and low price-to-book (P/B) stocks, as well as wide moat stocks that represent high-quality businesses [1][2]. - The research service provides monthly updates and watch lists for value investors seeking opportunities in the Asian market, especially in Hong Kong [2].

Financial Performance - Net income for the three-month period ended September 30, 2024, was 916,978 million Won, a slight decrease from 918,116 million Won in the same period of 2023[20]. - Total comprehensive income for the nine-month period ended September 30, 2024, reached 2,849,156 million Won, compared to 3,028,535 million Won in the previous year[22]. - Operating income for the nine-month period ended September 30, 2024, was 3,581,030 million Won, an increase from 3,365,684 million Won in 2023[20]. - Net income attributable to owners for the nine-month period was 2,717,398 million Won, compared to 2,531,928 million Won in the same period last year[22]. - The company reported a net income of 2,659,867 million Won for the nine-month period ended September 30, 2024, reflecting a growth compared to the previous year[26]. - The net income for the nine-month period ended September 30, 2024, was 3,971,270 million Won, compared to 4,019,007 million Won in 2023, indicating a decline of about 1.2%[126]. Asset and Liability Management - Total assets increased to 543,705,197 million Korean Won as of September 30, 2024, up from 498,004,936 million Korean Won at the end of 2023, representing an increase of approximately 9.4%[17]. - Total liabilities increased to 507,502,792 million Korean Won, up from 464,607,446 million Korean Won, reflecting a growth of about 9.2%[17]. - The Group's total equity increased to 36,202,405 million Korean Won, compared to 33,397,490 million Korean Won, marking an increase of approximately 8.5%[17]. - Cash and cash equivalents at the end of the period rose to 33,485,919 million Korean Won from 25,891,826 million Korean Won, marking an increase of approximately 29.8%[30]. - The total liabilities as of September 30, 2024, were 509,936,575 million Won, compared to 455,094,511 million Won in 2023, indicating an increase of around 12%[126]. Credit and Risk Management - The Group's maximum exposure to credit risk is 635,862,118 million Won, an increase from 587,417,741 million Won as of December 31, 2023[89]. - The allowance for expected credit losses is calculated using Probability of Default (PD) and Loss Given Default (LGD) models, reflecting forward-looking information[87]. - The Group assesses credit risk using indicators such as days past due and credit rating changes, with significant increases noted for corporate exposures when more than 30 days past due[85]. - The total credit risk exposure across various industries as of September 30, 2024, was 635,862,118 million Korean Won, compared to 587,417,741 million Korean Won at the end of 2023, indicating an increase of about 8.2%[95]. - The total amount of loan commitments was 132,734,551 million KRW, with 126,702,026 million KRW rated above appropriate credit rating[100]. Investment and Securities - Financial assets at fair value through profit or loss (FVTPL) reached 22,124,297 million Korean Won, up from 21,544,756 million Korean Won, indicating a growth of 2.7%[17]. - The total amount of financial assets at fair value through other comprehensive income (FVTOCI) decreased to 36,699,049 million Won as of September 30, 2024, down from 37,891,495 million Won at the end of 2023, reflecting a decline of approximately 3.1%[134]. - The Group's financial assets at FVTOCI totaled 35,640,402 million Won as of September 30, 2024, with a loss allowance of 26,984 million Won[96]. - The total financial assets at FVTPL amounted to 5,364,501 million Korean Won, with a net income of 47,984 million Korean Won for the nine-month period[185]. Operational Highlights - The Group's operational risk management system has been established to comply with Basel III regulations implemented in 2023[120]. - The Group measures operational risk capital using the Basel III standardized approach, which involves the Business Indicator Component (BIC) and Internal Loss Multiplier (ILM)[121]. - The total cash flow from fair value risk hedge derivatives as of September 30, 2024, is 82,844 million Korean Won[117]. - The Group's reporting segments include banking, credit card, capital, investment securities, and other sectors, which are regularly reviewed for performance evaluation[123]. Subsidiary Performance - Woori Bank reported total assets of 501,761,489 million KRW and liabilities of 472,838,104 million KRW[54]. - Woori Card Co., Ltd. reported total assets of 16,965,431 million KRW and a net income of 140,204 million KRW for the same period[54]. - Woori Financial Capital Co., Ltd. had total assets of 12,930,618 million KRW and a net income of 115,656 million KRW[54]. - Woori Investment Securities Co., Ltd. reported total assets of 7,813,525 million KRW and a net income of 9,481 million KRW[54]. Equity and Dividends - Dividends to common stocks totaled 745,218 million Won for the nine-month period ended September 30, 2024[26]. - The share of gain from associates for the nine-month period ended September 30, 2024, was 4,844,705 million Won, compared to 4,861,533 million Won in 2023, showing a slight decrease of about 0.35%[125]. - The Group's total interest income for the nine-month period ended September 30, 2024 was 6,628,558 million Won, reflecting a robust income generation capability[199].

Financial Data and Key Metrics Changes - As of Q3 2024, Woori Financial Group's cumulative net income increased by 9.1% year-on-year, reaching KRW2.6591 trillion, surpassing last year's total annual performance by approximately KRW150 billion in just three quarters [3] - The Group's net income for Q3 stood at KRW903.6 billion, representing a slight decrease versus the previous quarter but remaining above the KRW900 billion level for two consecutive quarters [3] - The Group's ROE came in at 10.82%, and the cost-to-income ratio remained below 40% for the second consecutive quarter, demonstrating effective cost management [4] Business Line Data and Key Metrics Changes - The Group's cumulative net operating revenue grew 6.6% year-on-year to KRW7.9927 trillion, with quarterly results at KRW2.7122 trillion, consistent with the previous quarter [5] - The bank's NIM for Q3 was 1.40%, and the Group's NIM, including the card business, was 1.67%, both declining by 7 basis points versus the previous quarter [7] - Cumulative non-interest income up to Q3 was KRW1.3781 trillion, a 53.2% year-on-year increase, driven by favorable market conditions and significant profit growth from marketable securities [11] Market Data and Key Metrics Changes - Total loans of the bank stood at KRW340 trillion as of September 2024, a 5% increase from the end of June, with corporate loans increasing by 4.3% and household loans growing by 6.2% [9] - Total deposits as of September 2024 reached KRW327 trillion, a 5.5% increase from June, although growth in core deposits was weak due to high demand for time deposits [10] Company Strategy and Development Direction - The Group is focusing on improving its capital ratio, aiming for a CET1 ratio of 12.5% by early 2025, while managing asset growth and prioritizing shareholder returns [15][16] - Woori Financial Group is strengthening its non-bank businesses, including the merger of Woori Investment Bank and F&I Securities to relaunch Woori Investment Securities [12] Management's Comments on Operating Environment and Future Outlook - Management noted that the financial markets are stabilizing, but uncertainties remain due to geopolitical risks and potential economic slowdowns [10] - The Group plans to actively manage assets and capital to defend NIM and maintain profitability amid anticipated interest rate cuts [23] Other Important Information - The Board approved a cash dividend of KRW181 per share, reflecting the Group's commitment to returning value to shareholders [4][15] - The Group's cumulative credit costs amounted to KRW1.2546 trillion, with a credit cost ratio of 0.44%, indicating a rise in current credit costs due to sluggish domestic demand [6][14] Q&A Session Summary Question: CET1 ratio stability and future guidance - The CET1 ratio remained flat at 12% due to forex impacts and increased weighted assets, with a target of 12.2% by year-end [18][19] Question: NIM outlook for Q4 and dividend distribution - NIM for Q3 was 1.40%, with expectations to maintain similar levels in Q4 through active management [23][24] Question: Investment in securities and application development schedule - The launch of MTS services is planned by year-end, with an integrated super app expected by the first quarter of next year [26] Question: Credit cost projections - Ordinary credit costs are projected to remain at current levels, with potential gradual improvement next year [28] Question: Core deposits targets and measures - The Group aims to increase core deposits significantly, with a target of KRW300 trillion to KRW100 trillion in the future [30][31] Question: C/I ratio targets and insurance acquisition concerns - The C/I ratio is expected to be around 40% next year, with ongoing efforts to manage expenses and improve efficiency [36][37]

Group 1 - Woori Financial Group is a Korea-based financial holding company that includes Woori Bank, Woori Card, Woori Investment Bank, and Woori Private Equity as its core subsidiaries [1] - The company has undergone significant changes since its takeover and recapitalization by the Korean government [1]

Company Overview - Woori Bank is based in Seoul and operates in the Finance sector, with a year-to-date share price change of 16.41% [3] - The current dividend payout is $0.3 per share, resulting in a dividend yield of 3.45%, which is lower than the Banks - Foreign industry's yield of 3.86% and significantly higher than the S&P 500's yield of 1.56% [3] Dividend Performance - The annualized dividend of Woori Bank is $1.21, reflecting an increase of 89.7% from the previous year [4] - Over the past five years, the company has increased its dividend three times, with an average annual increase of 0.01% [4] - The current payout ratio is 16%, indicating that Woori Bank paid out 16% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Woori Bank's earnings in 2024 is $8.21 per share, with an expected increase of 10.65% from the previous year [5] Investment Considerations - Woori Bank is considered a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [7]

Company Overview - Woori Bank is based in Seoul and operates in the Finance sector, with shares experiencing a price change of 18.1% this year [3] - The current dividend payout is $0.3 per share, resulting in a dividend yield of 3.4%, which is lower than the Banks - Foreign industry's yield of 3.85% and higher than the S&P 500's yield of 1.58% [3] Dividend Analysis - The annualized dividend of Woori Bank is $1.21, reflecting an increase of 89.7% from the previous year [4] - Over the past five years, the bank has increased its dividend three times year-over-year, with an average annual increase of 0.01% [4] - The current payout ratio is 16%, indicating that Woori Bank paid out 16% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Woori Bank's earnings in 2024 is $8.21 per share, which represents a year-over-year earnings growth rate of 10.65% [5] Investment Considerations - Woori Bank is considered a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [7] - The bank's dividend appeal is enhanced by the potential tax advantages and reduced overall portfolio risk associated with dividend-paying stocks [6]