Woori Financial Group was the only major South Korean banking group to post a decline in net profit in the first quarter, as its overseas operations weighed on earnings, the company’s earnings report showed Friday.
The group posted a net profit of 603.8 billion won ($405 million) in the January-March period, down 2.1 percent from a year earlier.
The figure came in more than 20 percent below the market consensus estimate. All other banking groups logged record-high earnings.
Woori Financial attributed the decline to the recognition of one-off provisions related to its overseas operations worth roughly 100 billion won, as well as reduced gains from securities and foreign exchange amid heightened market volatility stemming from the Middle East conflict.
It further noted that the earnings are expected to recover, as temporary external factors drove the decline.
Meanwhile, its interest income rose 2.3 percent on-year to 2.3 trillion won, while non-interest income jumped 26.7 percent to 454.6 billion won.
Within noninterest income, fee income reached a record high of 576.8 billion won, riding on the stock market rally.
With the common equity Tier 1 ratio rising to a record high of 13.6 percent, surpassing its annual target of 13 percent, the group plans to accelerate investments in risk capital and expand its support for the productive financing agenda.
Backed by an improved capital buffer, Woori Financial said it would step up efforts to enhance the competitiveness of its nonbank subsidiaries, including securities and insurance units.
It plans to inject around 1 trillion won into its brokerage arm Woori Investment & Securities through a capital increase to bolster capabilities in the capital market.
The group's newly acquired insurer Tongyang Life Insurance will become a wholly owned subsidiary through a comprehensive share exchange with the holding company.
Woori Financial set its first-quarter dividend at 220 won per share, up 10 percent from a year earlier. The payout will be tax-exempt, following its introduction earlier this year.
By Im Eun-byel (silverstar@heraldcorp.com)
