Woori Finance Holdings Co., Ltd. Q4 FY2024 earnings call

• Net income improved amid uncertain environment, ROE increased 1 percentage point, and cost/income ratio was 42.8%.
• Net operating revenue grew due to solid loan growth and significant noninterest income growth.
• Asset growth: Woori Bank's loans totaled KRW 333 trillion, with corporate loans up 9.0% and retail loans up 5.9%.
• Noninterest income rose 41.9% driven by core fee income.
• SG&A was KRW 4,459 billion, up 0.6% YOY, cost/income ratio 42.8%.
• Credit cost decreased, NPL coverage ratios high.
• Focus on capital adequacy, aiming for 12.5% CET1 ratio by 2025.
• Progress in Corporate Value Enhancement Plan including securities, insurance entry, ESG, and IR initiatives.

Net income in 2024 was KRW 3,086 billion, a 23.1% year-over-year increase. Net operating revenue grew 6.1% to KRW 10,440.5 billion. Credit cost in 2024 was KRW 1,716.3 billion, a 9.4% year-over-year decrease. As of the end of 2024, the group's preliminary CET1 ratio was 12.08%, a 13 basis point increase quarter-over-quarter. The Board decided on a KRW 661 per share year-end dividend, with total dividends for the year at KRW 1,200, a 20% year-over-year increase in DPS.

• Target to achieve a CET1 ratio of 12.5% by 2025.
• Plan to introduce nontaxable dividends to expand tangible shareholder return.
• Gradually increase share buybacks and cancellations.
• Focus on capital ratio improvement, risk-weighted asset management, and diversifying profit portfolio via insurance acquisition.

• Uncertainties in Korea and abroad, including weak domestic demand, slow exports, and potential rate cuts.
• Exchange rate fluctuations impacting capital ratio.
• Credit risk in nonbanking business.
• Regulatory uncertainties and market volatility.

Q: Concern about majority shareholder selling stakes and overhang issues.

A: KDIC overhang issue solved, IMM PE sold out remaining stake, no expected additional sales from other controlling shareholders, overhang issues addressed.

Q: About dividend transfer, quarterly dividend, and impact of insurance M&A on capital ratio.

A: Retained earnings transfer needs AGM approval, quarterly dividend policy 50% of previous year, insurance acquisition expected to diversify profit portfolio with minimal impact on capital adequacy.

Q: Exposure and classification of completed guarantee land trust and impact on capital ratio.

A: Completed guarantee land trust businesses managed with sufficient provisioning, minimal impact on capital ratio as RWA calculation already reflected.

Q: Pace to reach CET1 12.5% and nontaxable dividend conversion.

A: CET1 ratio to increase quarterly with balanced RWA growth, retained earnings transfer around KRW 3 trillion, nontaxable dividend conversion plan in progress.

Q: Shareholder return policy, structural positioning, NIM, growth rate.

A: TSR target over 35%, structural positioning awaiting FSS approval, NIM to be defended via rebalancing, growth rate within nominal economic growth rate.

Q: Outlook for 2025 challenges, NIM, credit cost.

A: 2025 challenging but foresee improvements in interest income, noninterest income growth momentum continues, credit cost to decline on bank and nonbank sides.

Q: Change in OCI, asset rebalancing measures.

A: Asset rebalancing involved reducing low-margin, high-risk assets, replacement with lower-risk assets, leading to CET1 ratio improvement by 33 bps, OCI impact from exchange rate and asset translation.