Woori Financial (WF) 21 Jul 212021 Q2 Earnings call transcript

Good afternoon. I am Dong Su, Head of the IR Department at Woori Financial Group.

Let me extend my deepest gratitude to everyone who is participating in this earnings call today. On today's conference call, we have the CFO, Mr. [indiscernible] and also the CRO, Mr. Mr. CTO, and Saga; Chang [indiscernible] because keep have to understand COVID-XX, attendees to please the we a tried of minimum. a Today, we after session. have performance, on presentation Q&A will start which with we a our will

simultaneous addition, interpretant In have for overseas investors our ongoing. we

XXXX first Let Woori on half start Financial presentation us the Group.

Financial I am the and Financial Woori Head CFO afternoon. at Group. Good of [indiscernible] Division

Woori First, first half the this call let for me thank XXXX everyone Financial for who is participating on Group. of

me gratitude this In support shareholders for and addition, Financial and my for would earnings to to half I calls going shareholders be on for walk in materials, group. and this the conducting communication through in order strengthen will abroad, available are the Woori presentation refer our take other trust our of opportunity participants XXXX the to company. market Group, and conference website. X in first to that, which Page performance Korea investors with from express like quarter you your Please let forward. our With

me the net over let go income. First,

only The months. was year's trillion. uncertainties KRWX.XXX full Amid exceed the a performance able COVID-XX to situation, year in due XXXX prolonged group last first was global half to X

XXX.X% The soundness generation transition first and for group. performance and efforts the year-over-year was stable active the holding due by half to profit asset after stronger up capabilities company cost saving

quarter highest XXXX, income the KRWXXX quarter was first quarter the billion. net second the a the to represented date. For basis, performance On

However, this a once again nearly high. quarter a increase, was XX.X% Q-o-Q

and billion. interest KRWX.XXX income The noninterest half trillion, was operating year-over-year. first net Net group's up Next operating KRWX.XXX KRWXXX trillion, was income revenue. is net revenue was XX.X%

momentum deposit to of Woori solid For bank's interest the loan drive and in group growth core the improvements structure. profit the subsidiary income, continues and main

subsidiaries addition, the the increase generation taken has income level. profit on between next the capabilities synergy to noninterest company after holding transition side, In

trillion exceeded company, the In first the to XX% with X.X% time terms establishing has operating net quarterly trillion it since post higher and KRWX of holding KRWX.XXX Y-o-Y. Q-o-Q profit for higher

through cost. cost such you let credit the side, SG&A walk and as Next, me

For The When totaled X.X%. the increase main it SG&A, these the company bank. only Y-o-Y savings companies, trillion, X.X% are Y-o-Y. of was newly the first half, an included and our excluding increase capital group drivers KRWX.XXX around

of -- As saving points a saving improvement of cost was result an the the ratio group-wide first efforts, for Y-o-Y. group's cost XX.X%, percent X.X income half

was if led The group first cost in X.XX%, cost X.X our best half the reversals excluded, one-off was even this points the A billion, showing the indicators normal are percent asset to ratio at level is some but event the X.XX%, credit also credit KRWXXX history. industries that shipping credit and and in Y-o-Y. recovery cost lower provisions, group's and ratio shipbuilding the was key

in to group's over go me area. X the presentation. Please Page business the turn let Next, of by detail

I First, [indiscernible] walk you will through NIM. the income interest

group income by totaled interest up billion half first or XX% The net KRWXXX Y-o-Y. KRWX.XXX trillion,

in percent the points X.XX%, would the The quickly an business was of though X.XX% improvement rates an credit market second percent and X.X%, card NIM Q-o-Q. rose bank-only NIM Q-o-Q points in XXXX, in was continues quarter X.XX of group Even the increase led loan NIM to and so the slowed, points core second quarter deposits Q-o-Q, has enhanced versus lending an increased rates has the end repricing to XX.X% somewhat improvement improve. percent of of which X.XX% NIM

last end during assets growth totaled portfolio. X.X% touch our trillion, in of to addition, trillion period. approximately by SME Bank as the year. billion, KRWXXX loans KRWXXX of mainly loan let next Household versus KRWXX of upon asset In trillion, me or June increase up an loans the corporate loans at X.X% reach year the X.X% versus end last and stood same of KRWXXX grew

able to planning adequacy extended, Woori capital on bank was and even is growth. In support was above its though financial the is control target loans Bank's that The June maintain assets second been concentrate of X% XXXX, XX.X% maintained a consistently finance stable more being first as to of showing COVID-XX to our a grew end. of half asset of end XX%, the level than asset percentage and our level. very has bank half, Since soundness the The at ones. March

in to billion newly subsidiary acquired noninterest income, of in, earnest. of the group's by the banking mid which improving capital group's performance the the business, the Next Amid first the at quarter. significantly performance synergy a high noninterest the year-on-year. group's KRWXXX which upper billion, grew and record kick range Particularly, is half, the on in a this the of to by and company, quarter card started a quarterly core at noninterest income holding KRWXXX Q-o-Q. QX income KRWXXX followed sales business was since the decrease income stood fee the establishment income. which noninterest a is Meanwhile, second XX.X% second X.X% stands posted In of ever billion is

the income profits exclude currency However, the billion, sale continues. amounting of QX when we bonds, upward one-off the foreign from of KRWXXX factors including trend noninterest

capital is X. refer to Page Next and adequacy. Please expenses on

As aforementioned, trillion, at SG&A the a group's KRWXX billion year-on-year. KRWX.XXX increase expense is which stood

the particularly utilizations order to from Woori execute Financial intensive and to to However, efforts cost expenses. cut all limited capital [indiscernible] the the included savings Currently, was approximately business, across subsidiaries SG&A when increase excluding impact Y-o-Y. to in Group coming Bank

to year growth, investments group's digital the bring levels. IT While compared the down for be X% bold by ratio XX% in in CI last we for and engaging this target will is to sustainable year approximately to

cost. Moving X.XX X.XX%. of Group economic scale percentage executed future period year cost previous on preemptive to positioning was KRWXXX cost same credit ratio Credit XX.X% credit improving reflecting the the was decreased to when points decreased credit billion half compared large first significantly outlook, Y-o-Y. the cost year-on-year, in to

to As quarter, due there certain reversal was earnings improvement mentioned factor. earlier, in second sectors a

cost stable credit reversal ratio this factor, one-off stands X.XX% managed very being even is if at However, levels. and we at exclude

on the and year. of end ratio rating was the ratio Bank's compared asset end is rating an is of June X.XX% of global impact is upgraded Woori NPL the agency, delinquency fact group's credit the Recently, X.XX%, coverage stable credit the A+. of and ratio to that continuously This were long-term the our previous the recognition to as managed in external June, considered prolonged from being XX, and S&P, which respectively, quality NPL despite improving A of XXX.X%, fashion a COVID-XX. As

on capital and Next, policy. let dividend elaborate me adequacy

of of once of the method X%. the As receives such expected its areas ratings only CETX improve more retail. confirmed the ratio expected the and the disclosed on the X. in for the ratings-based individual further ratio in announcement to date approval, XX.X%. internal than final performance and group's And dividend capital internal by July the restriction certain business Currently, market group's of June, approach in end record posted implementing past company is dividend the the expectations June, the the is dividend financial lifting interim exceeding authorities payout company Considering ratio, as dividend

decided. we be of dividend the that amount Board dividend the as soon it As is we time, to Directors as this information the at exact meeting disclose held, the will but decides is disclose cannot on yet

to plans in company payout Korea Furthermore, mid- within reviewing the the business the mentioned the of raise XX% mentioned reports, return ratio within is in policies term. shareholder to and various adequacy to possibility disclosures the scope the General recently of rate maintaining As long the dividend Bank the Shareholders' the and the of Meeting capital raising of base year.

Please and impact Let hike soundness. base profitability on rate our the me the refer elaborate of Page X. on to

increase. and proportion months the of of for which accounts proportion loans of accounted of the for As end mortgage if the for by KRWXXX is the rate the we with XX.X%, that Taking is and future. the to duration are by XX%. portfolio XX% to base rapidly the the account year expected interest a which are we to the approximately highly which CD after Woori linked Bank's X high the June, for of XX group raise. is is variable approximately expect raised Among raised in income loans, base Interest rate of base increase rate, has interest Bank's base the floating bp, our with correlation correlated X assets rate And loan when rates, expect of XX.X%. income income loans, the linked standard interest to rate within the is loans, billion approximately rate increase Woori the

rate has in original companies. rates a On insolvency market The the point hand, asset are possibility we the possible past this end to been there its concentration concentrated specific rebalanced industry portfolio of at companies concerns see of in company hike, XX.X% of to thus, rise large from loans time, other about XXXX. with as corporations June that has proportion at some base been and continuously of the of and of rapid as interest the the The of minimize risk. in has end reduced XXXX XX.X% the the and

addition, Woori This any license XX.X% the In to of rating of rate credit Financial asset the XX.X% to the end S&P's Group's the of for cyclical achievements in year. of sectors be the half have was of XXXX. of from deterioration above-mentioned very presentation proportion to earnings June as at first and reduced concludes led loans the expected limited. interest the XXXX to end due upgrade These to

[Operator Instructions].

Jin-Sang. Securities, will question first Motor the So be Kim from Hyundai Mr.

questions. few I your capital of to a ask would terms In policy, like

believe I has do direction. the that CFO basic So the upon touched

in of X would uplift of However, the say you terms of that did there be point. the impact an IRB that, around and

more but application, actually when be addition And where your to However, introduced? in in you introduction, actually policy this in of terms you maneuver. not will to think XXX% introduced, think that do meaning terms give capital of could might take It place? you be that, do room will

it taking aspects to dividends. actually dividends? this did paying something regular? be Is possibility a that to that provide possible there quarterly place? addition, in would say you terms what maybe be your shareholder each expand interim out policy what would and about your forward those In So you that And this policy Is for be of that also would of you and your around, shareholder will would time you return areas? could be going area in divide in return stance growth be your

about I the can answer do CFO, and questions. that long capital asked believe policy. a is This have maybe questions I your you range of our Yes.

are now approval. right In application, are for that is terms at we the expectation. looking time September-ish line, IRB a and the looking Realistically, currently of authorities

we will by of So capital as of do percent point. the that time, our at increase believe September, overall be to X able that end around

or something terms interim will something whether dividends, that In we it we interim have basis And dividends, limit review end for are at we that year of this have that pay be year. this around will will the is did the out the on XX%. to we around, that why is to of a a able do regular something

So as have with of now, share will we to definitive we anything able will that not be you.

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Next we Joon have Yuanta form Jeong. Securities. Mr. Tae

what in And we Securities. I have. Yuanta what I like the kind see to would I would can And seeing that would understand understand second performance. solid the that it be from Jeong effect like Joon and half, like in Tae to And first the half. of are reversal I'm would

connection that was believe I smooth. as not So

So question I would to ask repeat like Would to question? you time. one to repeat your the you like more

would I of the on credit to I the have satisfactory, to we like also of quite So kind provisions was the CCR? into see half, cost in what that impact would able ratio second look understand was and that if that reversal

In already KRWXX increase in our have the income. first in net an our seen income and half, KRWXXX mentioned, as I we've in billion overall billion

So quarter. second will we we the that an first to in increase be the KRWXX billion quarter, by believe seeing compared

September, second believe we the without the approximately have the revenue similar continue And the bank fourth Net half, quarter, in that there in have in fourth of there And on. based will trending. first So method. net the interest half. that nonordinary case on continue third in change levels. it we early capital the of believe assets increase. with in KRWXX expected is financial in losses markets, operating by of quarter, will be believe billion of lot on we we revenue, will equity income And the noninterest in the that the the and retirements, interest do the in And there will are And continue also end current major quarter. that income we are are on a expenses that quantity we events a executed in expecting

in So expenses outlook. the be some there volatility may

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will it question, question. be from a be Won will For HSBC, the asking Jaewoong next

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Well, CFO. the this is

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benchmark of a interest think a to improvements as -- later a result do the that rate that, overall our at the at as So income place. time, particularly hike we if later a

the would and more However, we in have on during our as in the half, mentioned assets terms also of capital presentation this focus our on be adequacy. our second

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Mr. [indiscernible] Moving Stanley, on Morgan from

I was to well digital -- slide. into also to mortgage In can Woori the And we referring see see, you of -- going the last that the I that would of is XX%. your know credit loans, WM case Group, out like banks and refer businesses. loans as I as online Financial

this Group in of kind would or or and Financial to actions responses strategy competitive place different in So like landscape, of Woori you I the do planned. understand have what

to So provide with charge digital the we answers. have regard to Mr. the in business CTO, [indiscernible] that, of

the the I in Group, am very of [indiscernible] question. you CTO. digital much charge of Thank your Woori Financial business for

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the on line. From so Seo Mr. Kiwoom Securities, have Young-Soo we

Kiwoom from Securities. Young-Soo Seo I'm

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So understand concerns I would be there like some may here. to

So understand to Group, Woori going I how are Financial would like you to respond. for

you So for a how product? and will And to said that active digital with aggressive commissions, regard And you instance, business. when will be you to launching be in very are and you going respond? the fees

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in loans cannot increase cap, all, will many So pricing this quite rates. limited. you that you financial means meet go the to meaning that from get it all once is institutions supply And

but If continue at you this, to is on. look demand

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regulations the supply. So than the would household a or loan to greater by government lead demand

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that loan now, one marketplace play. of market, the place of be it's enhancing even can it's it loans. of restructuring in but already That's business, if competition. it is that bettering or first, second, So well, can about, efficiency you the And function the restructuring at a function in look

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it be a to see rates. an would comparison the So bit to interest to difficult apples apples

rather more a marketplace, functionality the platform focused will I restructuring of more on that but So be this of be believe the of not bettering will loans.

call we the we maybe last like up the CFO. we And So Woori just up like could And would the that, due would conference comments to Q&A Financial wrap to to wrap with earnings session. have from some time, Group. for

of of pre-COVID earnings. in our performance the Despite as QX QX concerns in with continuing are we XXXX's resurgence did regarding surpassing COVID-XX, we

on cost one-off some to factors, efforts and soundness is management. rather effects of not or the the performance group's As a improve profitability, aforementioned, but dependent result this

sustainable. shareholders We addition, make And expect ways. return every this performance in to to be the our in profits effort we various upswing to will

our do will to of in best the all aspects. exceed results investors that expectations We generate

employees the best. will for do you all the very and much executives So your Thank attention. our