Woori Financial Group Inc (WF) 2025 Q1 法說會逐字稿

Good afternoon. I am Han Hong Seong, Head of IR at Woori Financial Group. Let me first begin by thanking everyone for taking time to participate in this earnings call for Woori Financial Group. On today's call, we have Group CFO, Yihong Group; CDO, Ouk Il-Jin; and Group CRO, Park Jang-Geun.

午安.我是友利金融集團投資人關係主管韓洪成。首先，我要感謝大家抽空參加友利金融集團的收益電話會議。參加今天電話會議的有：一弘集團財務長、首席數據長 Ouk Il-Jin 和集團首席風險長 Park Jang-Geun。

On today's call, the group CFO, Lee Sung-Wook will give a presentation on the earnings performance, after which we will have a Q&A session.

在今天的電話會議上，集團財務長李成旭將就獲利表現進行演講，之後我們將進行問答環節。

Please note that the earnings call is being conducted with simultaneous interpretation for our overseas investors. Now, let us start our presentation on Woori Financial Group's earnings for the first quarter of 2025.

請注意，本次收益電話會議將為我們的海外投資者提供同聲傳譯。現在，讓我們開始介紹友利金融集團2025年第一季的收益。

Good afternoon. This is Lee Sung-Wook, the CFO of Woori Financial Group. Let me go over the first quarter performance for 2025. Please turn to Page 3 of the presentation material that has been disclosed on our website.

午安.我是友利金融集團財務長李成旭。讓我來回顧一下2025年第一季的表現。請翻到我們網站上已經揭露的簡報資料第3頁。

First, let me talk about net income. In the first quarter of 2025 Woori Financial Group's net income was KRW615.6 billion. Amid uncertainties in Korea and abroad, leading to volatility in the financial markets, we will still be able to prove our solid revenue generating capabilities on the top line.

首先我來談談淨收入。2025年第一季度，友利金融集團淨收入為6,156億韓元。在韓國和國外的不確定性導致金融市場動盪的情況下，我們仍然能夠證明我們強大的創收能力。

However, on the cost side, due to conservative provisioning, due to concerns about future downturns in the economy and non-regular items such as costs related to the ERP conducted at the beginning of the year, and investments for future growth resulted in net income coming in below market expectations.

然而，在成本方面，由於撥備保守，對未來經濟下滑的擔憂以及年初進行的ERP相關成本等非常規項目以及對未來成長的投資，導致淨利潤低於市場預期。

When excluding this one-off costs, the group's fundamentals are still solid, and the group's ROE is 9.5%. Next, let me discuss the group's net operating revenue. First quarter net operating revenue increased 2.4% YOY and 6.6% quarter-over-quarter to KRW2,609.5 billion.

剔除此一次性成本後，集團基本面依然穩健，集團淨資產收益率為 9.5%。接下來我來談談集團的營業淨收入。第一季淨營業收入年增 2.4%，季增 6.6%，達到 26,095 億韓元。

To optimize our portfolio, the group has been rebalancing assets and engaging in efforts to improving profitability from last year, which has resulted in solid interest income. Efforts to strengthen non-interest businesses and diversify revenue sources across all bank and non-bank affiliates within the group resulted in stable growth and non-interest income driven by core fee income.

為了優化我們的投資組合，該集團從去年開始一直在重新平衡資產並努力提高獲利能力，從而獲得了可觀的利息收入。集團致力於加強非利息業務，並實現集團內所有銀行和非銀行附屬機構的收入來源多元化，從而實現了穩定的增長，並由核心費用收入推動非利息收入的增長。

Next, let me go over the credit cost. Credit cost was KRW435.5 billion, representing a YOY increase of 18.8%. Issues such as US reciprocal tariffs and uncertainties about the Korean economy created a challenging internal external business environment which has led to higher delinquency and NPL ratios.

接下來，讓我來介紹一下信用成本。信貸成本為4,355億韓元，年增18.8%。美國互惠關稅以及韓國經濟的不確定性等問題，造成了充滿挑戰的內部外部商業環境，導致拖欠率和不良貸款率上升。

However, we are monitoring the market more closely and have been taking pre-emptive measures such as actively managing high risk and potential distressed assets to manage credit costs at a stable level. The credit cost ratio was 0.46%, but when excluding one-off additional provisions of KRW63 billion the normal credit cost ratio is 0.39%.

然而，我們正在更加密切地監測市場，並採取了先發製人的措施，例如積極管理高風險和潛在的不良資產，以將信貸成本管理在穩定的水平。信貸成本率為0.46%，但如果不包括630億韓元的一次性追加準備金，則正常的信貸成本率為0.39%。

Next, let me discuss the capital ratios and also quarterly dividends. As of the March end, the group's preliminary CET1 ratio is 12.42%, which is a 30 basis points increase from the end of last year. Amid an unfavorable business environment such as [a weak won], our company-wide efforts from last year to rebalance assets to actively manage our risk graded assets has improved our capital ratio.

接下來，讓我討論一下資本比率和季度股息。截至3月底，該集團初步的CET1比率為12.42%，較去年年底上升30個基點。在韓元疲軟等不利的商業環境下，我們從去年開始在全公司範圍內努力重新平衡資產，積極管理風險等級資產，從而提高了我們的資本充足率。

This is an example of the strong commitment that the group has to achieve a 12.5% CET1 ratio within the year, and we are focusing all group capabilities to achieve this goal. In addition, at the BOD today, the Board decided on a Q1 dividend of KRW 200 per share, which represents an 11% increase on a YOY basis. In addition, the dividend record date will be May 10th as notified during the group's quarterly dividend procedures adopted in the General Shareholders Meeting.

這是集團堅定承諾在年內實現 12.5% 的 CET1 比率的一個例子，我們正在集中集團的所有能力來實現這一目標。此外，在今天的董事會上，董事會決定第一季股息為每股 200 韓元，年增 11%。此外，股息記錄日期將為 5 月 10 日，該日期是根據股東大會通過的集團季度股息程序通知的。

Next, let me delve into more detail about our earnings by area. Please turn to page 4. First, let me go over our net operating revenue and NIM. The group's Q1 net operating revenue was KRW2,609.5 billion, up by 6.6% quarter-over-quarter. Interest income was similar to that of the previous quarter at KRW2,252billion. The bank's quarter one NIM was 1.44%, and the group's NIM including the credit card business, was 1.70%, which represents an increase of 4 basis points from the previous quarter.

接下來，讓我更詳細地介紹我們各地區的收入。請翻到第 4 頁。首先，讓我介紹一下我們的營業淨收入和淨利差。該集團第一季淨營業收入為26,095億韓元，較上季成長6.6%。利息收入與上一季持平，為2.252兆韓元。該行第一季淨利差為1.44%，包含信用卡業務的集團淨利差為1.70%，較上一季增加4個基點。

The BOK cut rates last February and market rates fed, leading to a decrease in funding cost as costs on time deposits stabilized and core deposits grew. This improved our margins. In addition, we also believe that the US reciprocal tariffs are expected to create trade disputes and a downturn in the economy, and we believe the current cut rate cycle will continue, and we are trying to have more -- management to put out an efforts to grow our core deposits to actively defend any downward pressure on NIM.

韓國央行去年 2 月降息，市場利率上升，導致定期存款成本穩定、核心存款增加，融資成本下降。這提高了我們的利潤率。此外，我們也認為，美國的互惠關稅預計將引發貿易爭端和經濟下滑，我們認為當前的降息週期將持續下去，我們正在努力讓管理層加大努力，增加核心存款，積極抵禦淨息差的任何下行壓力。

Next, let me discuss the bank's loan portfolio. As of March, end Woori Bank's total of KRW330 trillion, showing a slight 1% decrease versus the end of the year. For corporate loans, large corporates continue to have strong demand for credit, and the portfolio improved focus on high quality SMEs. Resulting in a book of 183%.

接下來，我來討論銀行的貸款組合。截至3月底，友利銀行資產總額為330兆韓元，較年底略有下降1%。對於企業貸款，大型企業信貸需求持續旺盛，貸款組合更重視優質中小企業。最終成書率為 183%。

On the retail loans, the government's household debt management policy continued, and retail loans totaled KRW144 trillion somewhere to the end of last year. Going forward in line with the economic development, we will diligently fulfill its role and fulfill -- focus on new growth industries and secured loans backed by guaranteed certificates.

在零售貸款方面，政府的家庭債務管理政策仍在繼續，截至去年底，零售貸款總額約為144兆韓元。今後，我們將順應經濟發展情勢，認真履行職責，並專注於支持新興成長產業和擔保憑證類擔保貸款。

In addition, for retail loans, we will focus on real demand with the scope within our business plan. And achieve growth within nominal GDP growth. Recognizing uncertainties in Korea and abroad, we will put top priority on asset soundness and capital adequacy to achieve profitable growth.

此外，對於零售貸款，我們將專注於實際需求，並在業務計劃的範圍內。並實現名目GDP成長範圍內的成長。認識到韓國和國外的不確定性，我們將把資產健全性和資本充足率放在首位，以實現獲利成長。

Next is the net interest income. Net interest income in the first quarter was KRW357.5 billion, an increase of 2% YOY. In particular, quarter fee income posted KRW511.4 billion driven by the growth of the bank's wealth management efforts and efforts to diversify. Quarter fee income surpassed KRW500 billion mark again showing stable trends as we expect volatility in the markets to continue, we will continue efforts to increase our non-interest income by diversity. Our non-bank business and maximizing synergies between banks and non-bank operations.

接下來是淨利息收入。第一季淨利息收入為3575億韓元，年增2%。尤其是，受該行財富管理力度加大和業務多元化努力的推動，季度費用收入達到 5,114 億韓元。季度費用收入再次突破5000億韓元大關，呈現穩定趨勢，由於我們預期市場波動將持續，我們將繼續努力透過多元化增加非利息收入。我們的非銀行業務以及最大化銀行和非銀行業務之間的協同效應。

Next, let us move on to expenses. Please look at page 5. This is the group's SG&A. In the first quarter, the SG&A was KRW1,306.2 billion, which was an increase of 26.6% YOY, and the cost to income ratio was 43.6%. The increase was driven by one-off factors including Woori Bank's early retirement program cost of KRW169 billion which took place at the beginning of the year, and costs related to increasing the sales capabilities of the securities arm launched last year and investments in digital and IT such as U1 Banking and Securities mobile trading system.

接下來，讓我們談談費用。請查看第 5 頁。這是集團的銷售、一般及行政費用 (SG&A)。第一季度，銷售、一般及行政費用為13062億韓元，年增26.6%，成本收入比為43.6%。成長主要是由一次性因素推動的，包括友利銀行年初實施的 1,690 億韓元提前退休計畫成本、去年成立的證券部門銷售能力提升相關成本以及對 U1 銀行和證券行動交易系統等數位和 IT 的投資。

Going forward, the group will continue to actively support. Investments for future growth such as strengthening digital and IT competitiveness and enhancing the brand value of the group. But at the same time, it will cut back on general expenses that are not related to sales and achieve cost efficiencies across the organizations such as optimizing resources and channels.

今後，集團將繼續積極支持。為未來成長的投資，例如加強數位和 IT 競爭力以及提升集團的品牌價值。但同時，它將削減與銷售無關的一般開支，並實現整個組織的成本效率，例如優化資源和管道。

Next is credit costs and asset quality. In the first quarter of 2025, the group's credit costs amounted to KRW435.5 billion, down 5.8% QoQ and up 18.8% year-on-year. This quarter, the group completed provisioning for the full exposure to issues currently in the spotlight including those two debtors who have recently filed for corporate rehabilitation by allocating approximately KRW39 billion in additional provisions, and we also booked pre-emptive provisions of KRW24 billion during the review of completion guarantee trust projects, resulting in approximately KRW63 billion in one-off credit costs.

其次是信貸成本和資產品質。2025年第一季度，該集團信貸成本為4,355億韓元，較上季下降5.8%，較去年同期成長18.8%。本季度，集團完成了對目前備受關注的問題（包括最近申請企業重組的兩家債務人）全部敞口的撥備，額外撥備約390億韓元，並且在完成擔保信託項目審查期間計提了240億韓元的優先撥備，一次性信貸成本約為630億韓元。

Excluding these one-off factors, the group's credit cost ratio is being stably managed at around 0.39%. Although market interest rates are on a downward trend, concerns over economic recession are intensifying due to various internal and external issues, so as the quality concerns are expected to persist for some time.

剔除這些一次性因素，集團的信貸成本率穩定在0.39%左右。儘管市場利率處於下坡趨勢，但由於各種內部和外部問題，對經濟衰退的擔憂正在加劇，因此品質擔憂預計還會持續一段時間。

Woori Financial Group is maintaining a strong ratio of prime corporate loan assets at 86% through enhanced risk management capabilities. Furthermore, the ratio of loan loss and regulatory reserves to total loans is also being managed at an elevated 1.6% level, ensuring sufficient loss absorption capacity.

友利金融集團透過強化風險管理能力，將優質企業貸款資產比例維持在86%的強勁水準。此外，貸款損失及監管準備金佔貸款總額的比率也控制在1.6%的高位，確保有足夠的損失吸收能力。

As for real estate PF exposure, it has decreased by approximately KRW200 billion from the previous quarter to KRW3.3 trillion, excluding health guarantees, it stands at approximately KRW2 trillion. Which is 0.5% of total loans, and thanks to our pre-emptive management efforts, the additional provision burden remains limited.

至於房地產公積金曝險，較上一季減少約2,000億韓元至3.3兆韓元，不含健康保障，則約2兆韓元。這佔貸款總額的0.5%，而且由於我們採取了預防性管理措施，額外的撥備負擔仍然有限。

Woori Financial Group will remain fully prepared for potential impacts from prolonged high exchange rates and US reciprocal tariff policies. We will proactively inspect risk factors across the group, focusing on managing vulnerable areas and closely monitor key market variables like interest rates and exchange rates responding actively to changes.

友利金融集團將做好充分準備，以應對長期高匯率和美國互惠關稅政策可能帶來的影響。我們將主動排除集團內的風險因素，並專注於管理薄弱環節，密切關注利率、匯率等關鍵市場變量，並積極應對變化。

Moving on, I will elaborate on the capital adequacy and shareholder return policies. Please refer to page 6 of the materials. As of the end of March 2025, the group's preliminary CET1 ratio stands at 12.42%, improved by approximately 30 basis points from 12.13% at the end of the previous year. Despite the challenging financial environment, the group significantly improved its capital ratio through comprehensive measures, including solid profit growth, optimal portfolio composition, taking into account risk weighted assets.

接下來，我將詳細說明資本適足率和股東回報政策。請參閱材料第6頁。截至2025年3月底，該集團的初步CET1比率為12.42%，較上年末的12.13%提高了約30個基點。儘管面臨嚴峻的金融環境，集團仍透過穩健的利潤成長、優化投資組合結構、考慮風險加權資產等綜合措施，顯著提高了資本充足率。

And thorough management of exchange rate sensitive assets such as foreign currency holdings and currency derivatives. With this, Woori Financial Group is approaching its goal of achieving a 12.5% CET1 ratio ahead of schedule in 2025, making progress not only in enhancing the group's loss absorption capacity but also in establishing a stable foundation for shareholder returns.

並對外幣持有量、貨幣衍生性商品等匯率敏感資產進行徹底的管理。由此，友利金融集團提前接近2025年實現12.5%的CET1比率的目標，不僅在提升集團的損失吸收能力方面取得了進展，而且在為股東回報奠定了穩定的基礎方面也取得了進展。

Meanwhile today, Woori Financial Group's Board of Directors resolved a quarterly dividend of KRW200 per share in line with the company's quarterly dividend policy of paying out 50% of the previous year's annual dividend evenly across each quarter, and the record date under our enhanced quarterly dividend procedure is set for May 10th.

同時，今天，友利金融集團董事會決議派發每股200韓元的季度股息，這符合公司每季度平均派發上一年度股息50%的季度股息政策，而我們加強季度股息程序下的記錄日期定為5月10日。

The group also announced at the beginning of the year a share buyback and cancellation program totaling KRW150 billion, an increase of 10% compared to the previous year, and it's currently in the process of executing the buyback. Going forward, the group will continue to faithfully implement its shareholder return policy based on it's -- on the CET1 ratio and do its utmost to fulfill its commitments to the market.

該集團還在年初宣布了總額為1500億韓元的股票回購和註銷計劃，比前一年增加10%，目前正在執行回購計劃。未來，集團將繼續忠實履行以普通一級資本比率為基礎的股東回報政策，並竭盡全力履行對市場的承諾。

Let's move on to page 7. To prepare for the large scale and prolonged impact of macroeconomic uncertainty and market volatility arising from recent developments such as the imposition of reciprocal tariffs by the US, Woori Financial Group has formed a group-wide TFT.

讓我們翻到第 7 頁。為了因應美國徵收對等關稅等近期事態發展所帶來的宏觀經濟不確定性和市場波動的大規模和長期影響，友利金融集團成立了全集團TFT。

Through this task force, we aim to respond swiftly to market conditions and ensure thorough risk management. Please refer to the materials on page 7. Woori Financial will conduct in-depth analysis of tariff impacts by industry and sector as well as overall market conditions. And based on this, we'll continue to carry out asset rebalancing in response to changes in the financial environment.

透過這個工作小組，我們的目標是迅速回應市場狀況並確保徹底的風險管理。請參閱第7頁的資料。友利金融將對各產業、各部門的關稅影響以及整體市場狀況進行深入分析。並在此基礎上，根據金融環境的變化，持續進行資產再平衡。

We will restructure our portfolio to focus on high quality assets and emerging growth industries while reducing low margin or potentially distressed loans to improve both profitability and asset down. In addition, the group is operating a group level of reciprocal tariff impact support TFT, providing customized support to companies affected by tariffs and preparing support measures for small businesses vulnerable to high exchange rates and economic downturns.

我們將重組投資組合，專注於高品質資產和新興成長產業，同時減少低利潤率或潛在不良貸款，以提高獲利能力並減少資產。此外，該集團正在經營集團層面的互惠關稅影響支持TFT，為受關稅影響的企業提供客製化支持，並為容易受到高匯率和經濟衰退影響的小型企業制定支持措施。

By stabilizing the financial market and protecting customers, we aim to minimize the shocks from reciprocal tariffs. With the possibility of prolonged high exchange rates and market volatility in mind, we will strengthen our foreign currency liquidity management and enhance credit risk controls for affected industries and high-risk assets to actively respond to economic downturns.

透過穩定金融市場和保護客戶，我們的目標是最大限度地減少互惠關稅的衝擊。考慮到匯率高位運作和市場波動的可能性，我們將加強外幣流動性管理，加強受影響產業和高風險資產的信用風險管控，並積極應對經濟下行風險。

We will especially maintain constant monitoring of risk by country where the group operates to prevent overseas shocks from spilling over into domestic markets. Regarding capital ratios, we will focus on improving RWA vulnerabilities through asset rebalancing and strengthen our management of exchange rate sensitive assets by reducing exposure to currency derivatives and overseas FRNs.

特別是，我們將持續監控集團業務所在國家的風險，以防止海外衝擊蔓延至國內市場。在資本充足率方面，我們將重點放在透過資產再平衡來改善風險加權資產的脆弱性，並透過減少貨幣衍生性商品和海外浮動利率票據的曝險來加強對匯率敏感資產的管理。

Alongside asset rebalancing and risk management to maintain a solid financial structure, Woori Financial Group also places great importance on business diversification to provide profit growth and improve stability. Woori Investment Securities obtained its official brokerage license in March and launched its MTS platform, completing preparations for full scale operations. Furthermore, the relocation of all IB units within the group to Yeouido will further boost synergy.

除了資產再平衡和風險管理以維持穩固的財務結構外，友利金融集團也非常重視業務多元化，以實現利潤成長並提高穩定性。友利投資證券於3月取得正式經紀許可證，並上線MTS平台，完成全面營運的準備。此外，集團內所有 IB 部門遷至汝矣島將進一步增強綜效。

In terms of entering the insurance business, which has drawn significant investor attention, we submitted an application for a subsidiary acquisition approval this past January, and it is currently under review by the Financial Services Commission. Upon completion of the acquisition, although the final financial impact may vary, we expect minimal effect on the group's capital ratio and anticipate annual profit increases of KRW300 billion to KRW400 billion and approximately a 1percentage point improvement in ROE.

在進入備受投資者關注的保險業務方面，我們於今年1月提交了子公司收購批准申請，目前正在接受金融服務委員會的審查。收購完成後，雖然最終的財務影響可能有所不同，但我們預計對集團資本比率的影響微乎其微，並預計年利潤將增加 3000 億至 4000 億韓元，ROE 將提高約 1 個百分點。

Through these comprehensive response plans, with the Financial Group will faithfully fulfill its core financial role, thereby contributing to market stabilization and ensuring strong customer protection. We will also continue to enhance our CET1 ratio to further strengthen the group's loss absorption capacity and establish a solid foundation for stable shareholder returns.

透過這些全面的應對計劃，金融集團將忠實履行其核心金融職責，從而促進市場穩定並確保強有力的客戶保護。我們也將持續提高CET1比率，以進一步增強集團的損失吸收能力，並為穩定的股東回報奠定堅實的基礎。

This quarter, despite internal and external uncertainties, Woori Financial Group has demonstrated solid earnings capacity and stable risk management capabilities. We will actively respond to the challenging financial environment, including interest rates, exchange rates, and the real economy by further focusing on the managing -- on managing our capital ratio and enhancing long-term corporate value.

本季度，儘管存在內部和外部不確定性，但友利金融集團仍展現出穩健的獲利能力和穩定的風險管理能力。我們將進一步專注於管理資本比率和提高長期企業價值，並積極應對利率、匯率和實體經濟等充滿挑戰的金融環境。

And in addition, we will take the lead in supporting struggling businesses, fulfilling our social responsibility as a financial group, and this concludes with the Financial Group's 2025 Q1 earnings presentation.

此外，我們將帶頭支持陷入困境的企業，履行我們作為金融集團的社會責任，這一切都將在金融集團 2025 年第一季的收益報告中結束。

Thank you.

謝謝。

Statements in English on this transcript were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

本記錄中的英文陳述是由現場翻譯人員宣讀的。翻譯由贊助此活動的公司提供。