Woori Financial Group’s Earnings Call: Mixed Results and Strategic Expansion

Woori Finance ((WF)) has held its Q2 earnings call. Read on for the main highlights of the call.

The recent earnings call for Woori Financial Group painted a mixed picture of the company’s performance. While there were notable achievements in revenue growth, capital ratio improvement, and business expansion, challenges such as decreased net income, increased SG&A expenses, and higher credit costs highlighted underlying pressures and uncertainties. Overall, the highlights and lowlights appeared balanced, reflecting the complex environment the company operates in.

Steady Net Operating Revenue Growth

Woori Financial Group demonstrated resilience in a challenging business environment, with net operating revenue for the first half of 2025 reaching KRW 5,400.1 billion. This represents a 2.3% year-on-year increase, showcasing the group’s ability to maintain steady growth despite market adversities.

Significant Improvement in CET1 Ratio

The group’s Common Equity Tier 1 (CET1) ratio saw a significant improvement, reaching 12.76% as of June 2025. This marks an increase of approximately 60 basis points from the end of the previous year and exceeds the 12.5% threshold for the first time in the group’s history, underscoring robust capital management.

Diversification and Expansion of Business Portfolio

Woori Financial Group expanded its business portfolio by including Tongyang Life and ABL Life as affiliates. This strategic move aims to enhance their comprehensive financial services lineup and maximize synergies across the group, reflecting a focus on diversification and growth.

Increase in Noninterest Income

Noninterest income surged by approximately 47% from the previous quarter, reaching KRW 527.3 million. This growth was primarily driven by core fee income in the Wealth Management segment, highlighting the group’s successful efforts in diversifying revenue streams.

MTS Platform Launch and Brokerage Expansion

The launch of a new Mobile Trading System (MTS) platform and the receipt of final approval for investment trading business marked significant strides in strengthening Woori’s competitiveness in the securities arm, indicating a strategic push towards digital innovation and market expansion.

Decrease in Net Income

Net income for the first half of 2025 was KRW 1,551.3 billion, reflecting an 11.6% year-on-year decrease. This decline was attributed to one-off expenses and an economic slowdown, highlighting the financial pressures faced by the group.

Increase in SG&A Expenses

SG&A expenses rose by 18% year-on-year, resulting in a cost-to-income ratio of 42.8%. This increase was driven by early retirement costs and investments in digital and IT capabilities, indicating a strategic focus on modernization despite short-term cost pressures.

Higher Credit Costs

Credit costs increased to KRW 944.5 billion for the first half of 2025, with a second-quarter rise of 16.9% from the previous quarter. This reflects preemptive provisions and economic uncertainties, underscoring the challenges in maintaining credit quality.

Forward-Looking Guidance

Looking ahead, Woori Financial Group’s CFO, Sung-Wook Lee, provided guidance for the remainder of 2025. The group aims to maintain a CET1 ratio over 12.5% and potentially reach 13%, supported by expected stabilization of credit costs and strategic efforts to enhance operational efficiency and capital management. Despite a reported decrease in net income due to one-off expenses, the group remains optimistic about its financial performance, focusing on stable interest income and rising noninterest income driven by capital market activities.

In summary, Woori Financial Group’s earnings call highlighted a balanced performance with both achievements and challenges. The company’s strategic initiatives in business expansion, revenue diversification, and capital management were notable, despite facing pressures from increased expenses and economic uncertainties. The forward-looking guidance suggests a cautious yet optimistic outlook for the remainder of 2025, with a focus on maintaining financial stability and growth.