316140.KS - Earnings call transcript Q3 2022

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Yi Jung Su

Good afternoon. I am Yi Jung Su [ph], Head of IR at Woori Financial Group.

Let me begin by first thanking everyone for taking time to participate in this earnings conference call for the Woori Financial Group. On today’s call, we have the Woori Financial Group Chairman, Son Tae-Seung; President, Chun Sang-Wook, responsible for the group IR; group CRO, Jung Seok-Yong; group CSO and ESG Officer, Park Jong-il; and group CFO, Lee Sung-Wook, on the call today.

For today’s call, group Chairman, Son Tae-Seung will deliver his remarks, after which, we will go into the presentation and then open the Q&A session.

that is overseas being note simultaneous we please that interpretation provided. addition, for investors, our have In

Now, let me Chairman, Son hand it over for remarks. to his Tae-Seung the group

Son Tae-Seung

Financial Good is Group Chairman, afternoon. Woori Son This Tae-Seung.

extending by this on the begin first for me my gratitude who call conference to earnings QX sincere XXXX is everyone call. Let

is The opportunity year-to-date and the over the go is profit presentation into I also going billion, the briefly business the Q&A, which QX billion. year-over-year would a third profit quarter to highlights group’s like totaled KRWX,XXX.X Before quarter and This increase profit performance non-bank to performance of net of future direction. three and take XXXX third revenue this includes third KRWXXX.X net an quarters driven already exceeded Moreover, performance in by expanded stronger have the by our in strongest history. our capabilities. last the year’s was increase level This only as we full in and portfolio year YTD generation our XX.X%. quarter

in quality In asset was rate strongest the terms credit industry. X.XX%, representing the cost asset X.XX% and quality, within delinquency addition, the levels third quarter of

only As improve around has in a efficiency efforts consumer preemptive price the Korea have left to of XX.X%, quarter ratio XXXX. concerns cost/income X.X% led in and We increases, X deeper of inflation to group the group year-over-year. enabled about post the at third business abroad to in improvement an months

an role the engaging on had the to to ESG building Woori corporate better efficiency. through detail. highlight to performance, management the year also social fundamental possible. YTD macro for a able Once portfolio as the our to and with globally. many end at the will continue meet subside. we in market’s uncertain its Financial on also line, finance position operations big will I this XXXX. activities. of continue Digital performance our and will we continue enhance with Amid by conditions strengthening are efforts social expect to share in take when to to with we and strengthening business our uncertain XXXX, economic improve more to expectations abroad. further business try economic diverse a its much efforts to opportunities our our more will By our leap was and bottom The to planning investors to our plans to environment, focus confirm our of profitability Woori strong continue the I I efforts be after about continue investors sure will forward attention the the these plan as In competencies. the competitiveness. discussion business efforts to recently finalized BOD, engage investor end enhance wants of based and broaden in We successfully in conditions contribution make actively prepare in XXXX and Moreover, Financial Korea future Thus, have we plan group. the plan views is a reflect and will is it Group initiatives Through value. and to to

now details here. wrap financial the the President, me up next, go you. of Sang-Wook, Chun for Thank our let performance, So presentation. will And through

Chun Sang-Wook

IR and am activities. I for afternoon. Sang-Wook, also This Chun responsible President, is group’s Good the

of XXXX group. Page the me to please over on our third refer presentation of the the business Let website. performance And go quarter X available

profit to asset year-to-date XXXX a capabilities, KRWX,XXX.X group’s third let group’s me billion. generation net was First, On net cost management due our efforts. This efficiency income. quarter income the accumulative and at stable the up XX.X% basis, soundness discuss stronger year-over-year is

only third quarter billion. KRWXXX.X our net was addition, income In

net operating our Next, to me move let on revenue.

KRWX,XXX billion, funding was group’s The interest operating third have was income costs net billion. was core of interest income billion, increased, an quarter XX.X% growth asset by our continued non-interest KRWXXX year-over-year. income subsidiaries. has Though while Net increase grow to revenue due solid the KRWX,XXX YTD accumulative to

even in there On non-interest affiliates, due fees losses resulting side, non-cash were rate, performance. some across income FX synergies the to our in created solid valuation driving though the were core stronger movement

the billion, revenue, XX.X% operating third For KRWX,XXX by quarter was only it net up year-over-year.

ratio up on expenses record This year-on-year to costs, SG&A group year-on-year edged but including YTD the group SG&A KRWX.XXX X.X% Next XX.X%. and C/I cost. credit decreased trillion, to is X.X% is stable X.XX%, preemptive efforts posted and cost capabilities. optimization billion, cost credit the YTD KRWXXX ascribable to cost group-wide management Group’s group’s risk Financial demonstrating recorded ratio Woori Meanwhile, group credit

on Next, Please of results more your I materials. to business group X in refer detail. elaborate will Page

it including Korean rise housing of hand, a Corporate X.X% looming coupled With of year the income Woori by trillion, record won-denominated NIM FX backed previous loans, basis ratio in group going important September maintaining is rising to in income KRWXXX thanks trillion. loans compared group and loans, market, XXXX. increase basis and with the net of Woori dropped uncertainties, Household prime NIM, NIM, forward. KRWX.XXX among year-on-year XX.X% NIM rose First is climbed the up current end on rates, quarter-on-quarter ensure XXXX management. to jumped slide, quality KRWXXX bank X.X% this compared post on or interest X to we This X end last compared the quarter-on-quarter believe due XX% to QX macroeconomic will end group to KRWX as trillion YTD of XX.X% increased points Group interest trillion, interest asset to including of to is the record a factors. rates. while points other X.XX%, focus to X% Financial other to Card, In the year X.XX%. recorded to

including still income rates a non-interest Woori income synergies the macroeconomic remain group non-interest non-interest and soaring sources income Next core QX income volatilities. greater Financial to and billion. quarter. factors, fees Group recorded interim generate to FX fee to is so, leverage income. commissions rates and and robust. fee One-off other interest Even respond YTD depressed compared group previous KRWXXX will

of Page Next, SG&A C/I and management through Cost while IT within pressures unrelenting XX%. the face target concerns and ongoing of global rising over investments fuel you increasing turn material. preemptive high to I Woori is ratio sustained beef In segments of group its Please future inflation X management your will efforts, up to inflation. on cost digital under adequacy. yearly Group in cost the management, optimization is stable due Financial our to will growth. and making Group walk costs agenda capital

light at in substantially changes. Financial macroeconomic at uncertainties interest certain around additional growing stable or group risk-centric lingering QX in abroad. are is future billion. with Woori portfolio a exposure KRWXXX disproportionate KRWXXX cost. quality industries billion credit cost – cost lower of The provision ratio recorded to and in both accordance a updated KRWXXX XX There improved outlook booked home from Group credit credit group settled having the continue YTD borrowers. normalized of also asset of business as there recent credit a quality with asset QX. billion is basis of credit economic the practices management Next on at level and cost risk includes to to asset management figure an has points. its stood focus kept Meanwhile, We’ll

Finally, I will brief you on capital adequacy.

an income following foreign CETX expand But stay primarily Financial by due will temporary rate to group – stood September retained income. committed strong in September, earnings, This net and but hike assets at to currency increase is ratio modest Group is XX.X%. only to RWAs of As capital the ratio. among despite FX this Woori raise late

within stable attention. We report for will conclude I risk-weighted manage as would level. Group’s Woori a your to for With QX. Session you Financial that, them proactively Question-and-Answer also assets like keep Thank to so business

Operator

So be much. from Instructions] [Operator question, Securities, for Thank Yuanta first Tae-joon. will you the very Jeong it

Jeong Tae-joon

I am Jeong Joon. Tae

like are you very thank performance. to There strong that your questions ask So two would you. for I

in the to The terms margins that is slowing it to be down. be seems terms first you of there continues But in an see, the level, that improvement. of question

took there quarter, in that they elaborate one-off what is the place your on if third the is And So were? that any please outlook events are area? that second what

Yi Jung Su

So weren’t was. Mr. Jeong, again question you hear. We second to or could recap the what verify able

Jeong Tae-joon

the elements, they were? is could please what question quarter, during one-off any elaborate you had the you events one-off if or that So

Yi Jung Su

Yes, Jeong. Mr.

first overall that you the of outlook in be or would one-off we question asked second the a one-off had. margin question terms we elements about And had have So that going the forward. factors

if So preparing could we the are you just answers. wait while

Lee Sung-Wook

questions am I address one by Sung-Wook, and CFO, can the one. I Yes, the Lee maybe

about order. So, take questions the outlook NIM in your to have talk first we that to

quarter at look you would if X.XX%. So the NIM be levels, it third

mid September level X.X% at was a Q-o-Q on improvement. because X.XX% was was around it the basis, in a And it So highest the September, if you level. look it

do if will So upper year expectations, end at be go think terms it into we of of that level in the the X.X%. we

that, we there. to in issues disclosed, economic as and that the spread that may deposit NIM that. some because slowdown to is we be the related be will that think a there think would also rapidly an And So also but there more there do as do core do a we areas, result that continues slowdown loan we there be – would of think expand hope

do will too So think forward going the that we overall moderate. growth be

at into of year, be at we we band upper end So then think will And be of next the around X.X%. that going that it will year, the the at X.X%. the

valuation So third in around consideration, KRWXX To think of around that that be we KRWXX non-cash if was rate FX about X.X% see that we talk point terms. that changes in about seen, the year. of the do one-off there from take we have quarter a billion we uplift first billion. loss will is there did this a terms And have what factors, into we

income if out the be billion. of overall that net overall equation So around would level the that take KRWXXX we

would rate. we overall from that had one-off the the that impact So be FX

Operator

Thank answer. for the you very much

question would like to have I Jun-Sup. NH Jung second take Mr. we Securities, from Next,

floor. You have the

Jung Jun-Sup

question. NH. from am a much ask My CETX about for I have you is to opportunity very ratio. Jung. I question a Hello. name the Thank

QX, XX.X%. So recorded you

about So level. sufficiently believe rates, course, there that But and isn’t it’s not level. I understand you buffer we that of high high. to talked a FX And the sufficient the

going M&A. the So And with to further regard if have capital you I it’s be wish, FX understand that difficult rates don’t go also to we capital how as manage ratio? do ratio, to to plan

you. any going Thank is M&A forward? So strategy there changes

Yi Jung Su

Thank you for very the question. much

us we ratio So the prepare plans. question bear future answer. management capital your QX Please the and was with as

Lee Sung-Wook

Sung-Wook, is this CFO. Yes, Lee

again, So the presentation, mentioned increased. the as we interest during income

also to of dropped, that the per in we the have to strong, led with valuation However, we derivatives, ratio is this decrease capital and are cover. but have going KRWX,XXX we banking, rates our to and of dropped and down, we because this And have have FX ratio. if valuation a decline, because a bank is we that’s led come and ratio automatically a to and FX we But adequacy to and very the our of time. FX portion have debt that bonds long this skyrocketed FOCs going dollar, rate RWAs, because last foreign a high derivatives ratio I the this lot the believe and do believe CETX CETX of currencies also our also the rates and is changes, raise in that for investments the

comes So RWAs so a at managed other manage foreign strongly PIBI we when that and and be can assets to level. it stable them currency will

approach we are that therefore, in rates very really business going we plans our For FX in way. believe XXXX, information, will your also a high, to conservative stay

going in we on management. our with some down, rates to risk come we we then to PS and And When CETX rates, M&A, recover, to believe were when there it it FX will issues going then to So that comes they soundness. seek is strategies. growth if are focus ratio XXXX, interest comes

in PVR market secondary declined So the significantly.

going about collaboration. capital. not think require have believe to companies massive of small if to cases, those capital. In I securities But you that So see a M&As, large lot will require will it’s we

strategy have plans. or to M&A we overall, you. no our Thank So changes

Operator

you for your answer. Thank

Daishin from have will Hye-jin. Park Next, we Securities,

please ahead. go So

Park Hye-jin

Securities. Daishin I from to have Yes, would questions I that ask you. am Hye-jin two I Park like

to financing, a the project related PS, market. recently, estate is real of concerns So lot within there

we Difficulty] have our that So, and also [Technical the situation. why was

Yi Jung Su

while be – answers, our you could if would wait preparing for a So that maybe if just second, appreciated. are we

Jung Seok-Yong

and can CRO, the Jung thank for maybe is Seok-Yong, your you I questions. This Yes.

whole the And would at then KRWX on project balance financing, bank of the amount the investment on the side the that real grounds, is exposure, on remaining that of as you side, be if KRWX.X side is. there at the all. around capital exposure is a no look where and estate bank for of the be side, and insolvencies overall around I the trillion that would at First, terms think trillion group in and the

a a around on billion. if So around and be below, billion, whole, reserve would substandard the KRWXX of KRWXX at look we and it we have

So decreasing in a was on capital of the we basis, a rate reason the on side, asked of don’t on increased at for market with they as the the preemptive some you if the why per growth an a on being we cost beach Capital, think But credit don’t side situation, at in it’s we level. the I But or exposure a is managed that company lot there. loan the group that taken measures were area. on course, concerned, lowering the whole. working second LTV most the And LTV level, Woori where because But manage and concerns line there case-by-case look the there at environment. capital have the business question

not of has as debt, to more. more a So preemptive result took but provision that, insolvencies that it they more measures bad they or because it’s rather had

So capital increased. the business at that’s credit cost level overall why the

Operator

Thank you very much.

Kim Next floor. the Kim, Securities. have Do you Hanwha from question is Mr. Ha.

Kim Do Ha

Yes, the was have earlier you a related you regarding And provisioning. question retirement how special In if see your Please answer any to I XQ. clarify. additional also plans issues? PS? economic on COVID-XX-related December, and outlook have also it do and So future

Yi Jung Su

choppy not understand thank Because Yes, sound, very could you of question. much. your we the really

summarize to your me question. allow So

to additional provisioning XQ do had with possibility. So question your first

that’s our I second And asked question? So believe you’ve your regard with cost, to that understanding.

Kim Do Ha

with regarding additional talking and third in the to you Yes, and regard XQ question ERP plans and real clarify your exposure, answer. PS? estate provisioning are your Please about

Yi Jung Su

Yes, us thank much your your very Please as bear we you for prepare with answer. clarification.

Lee Sung-Wook

on And into management am a December, very make CFO. ERPs. plans we I on But and did taking we with decision much. yes, ERP approval. need we to financial also our included. will regard you circumstances, we Sung-Wook, do some Thank Every have business plan, Lee have final a consideration ERPs, Board

not of the this do with time, fixed deciding point currently, we loss on you. loan But plans to to towards we but will Yes, think plan the I some With the it’s So regard to provisioning, regard that it have additional rate. we be it Thank in though. say at it’s have premature that, this group. at end year.

Jung Seok-Yong

question, I one CRO, real number. regard with I was Jung to Seok-Yong, your PS. estate second am referring to Yes, PS the Thank you.

Operator

[Operator Instructions]

Son Tae-Seung

terms believe are our forward, that in asked yet, our waiting questions. haven’t Because take. going maybe I an you Jung do while this President opportunity question we discuss Seok-Yong, digital take the CRO, can direction but can to about for Jung maybe digital of other Seok-Yong strategy,

Chun Sang-Wook

we go Chun our Sang-Wook. think terms of picture This big Yes. the President, the I And is that maybe digital that just in strategy, have. in over

big to trend ensure it While is the place. enable other to banking it we we would that but be takes similar have, groups to universal that want

then have. be areas. that we the across have a covers that consolidated non-banking side, able bank comprehensive want So, and is a we the to big on to service And that initiative all basis

the think think would of In what’s best So, a place. it that super Woori for a is affiliates, your one one apps platform future. that maybe want is is our I discussion is that taking about of the each there for thing that discussion the be I of hybrid apps Group, to case or separate that recently, is would apps a create like have you approach, approach. if Financial we lot to that or highlight I But the

customers consolidated that a for cover that applications. at we a own be for customers. they would would that the at dedicated hybrid each have time, can would and that same be one universal of through of there subsidiaries level, level have, our that the at be bank banking we how more application will face scale, in we group the that the their have approached so a or And So, approach that would

strategy So, we have be that for picture big that our going the would forward. digital

Operator

can Maybe question. you. Thank the next we

Jong-Min. from Shim be next CLSA, the, question So will

Shim Jong-Min

you CLSA, This Jong-Min. for question. ask to opportunity Yes. Shim is the the Thank

you So, I before, exposure the about that with that. asked you a to and question had regards PS like mentioned would

the result exposure, that, a For to do it market think that weaken. as real related estate real as I concerns. And continues a whole, to are increasing estate of there

the less within concerns that So, on very the household on managed, market. concerns side. overall is being But is low especially corporate think more side, side, of a side, I course, do there because that think the higher are and level on LTV that of the the there SOHO it’s diligently I on

related SOHO this And I quality that market that is Woori being to So, weakening be to with continued if this you to asset would level, how Group ask? with planning Financial how managed? deal at issue, the on the address also, then and the issue are this side, like continues, would question

Son Tae-Seung

Yes.

So, whole regards direction within to is strategy summarize what question be that we we loans wait loan have the address for just questions would book you to we your the addressing the second, that risk then of what corporate soon? could the for loans the and with management future issue? this just have, will a If the

Jung Seok-Yong

for that we bank on not And on CRO, talk only Jung if the is Yes. estate Seok-Yong. this a is something of question. then our side, we as real monitoring exposure, This group, other about investment group areas on Woori Thank side the very cautiously. you the bank the but Capital and within are your and for whole,

the it LTV, standard year, a first in So, level. half, focusing as the and prime the been recognizes, have XX% since of of on the as the keep first we we half terms in also borrowers

in and very selective new we high-quality only taking on being So, borrowers. borrowers are

And would would current think our think the that, versus terms or do of estate we in itself. market real the of overall very in the that terms trend, we beginning if market of a as terms of of next situation, the result asset of quality this this worsen that in So, even in it do continue until is in limited. terms year be that may something impact,

the we So, much. Thank view you hold. that’s very that

Son Tae-Seung

Thank that more limited entertain questions. I we time, Because can you believe much. very of two

Operator

[indiscernible]. GS Next question to Securities from going and Investment is be

Unidentified Analyst

Yes. Good afternoon. I one have question.

flow, because the dividend. look you I can there if with you look regard that interim rate. pressure of And recent to at news financial think the Now if FX be some at

issue dividend, do please on can So, if you of comment so. the

Son Tae-Seung

with very prepare answer. Thank you Yes. much. Please bear we as us your

Lee Sung-Wook

is Sung-Wook, is submitted this with Lee as conduct to so and economic maintain have the particular environment what we Yes, side, our at lease external you. satisfy am dividends. to that to ratio. outlook a going best just regulatory the through the the the CFO. Thank helping end DOT and adequacy our if no that you the out, With fixed? side, all when there stable [ph] are have order to capital to We do From we stress will so And test. regulatory the and regards going at I data we are details, our soundness, we in but regard with go do look internal believe we a we guideline are to this payout year to dividend earnings of regulations

Son Tae-Seung

Yes, you. much. you thank very Thank

would I two think that questions. that we take said we

on. was was there that think added that more that, one question I before However,

have I questions. really now last two So, we that think

ahead. [ph]. next So, go Please Investment Korea Baek Doosan would Securities, from be

Unidentified Analyst

from Korea question & would Investment Securities. I to Capital. Doosan a Woori like to Yes. ask related

is refinance book. is So, right look a capital real KRWX.X general at But look financing, you there did you That overview. if if to estate talked trillion. you now, related the at around about provide you project

could it of do could that financing. be financing, bridge I it’s array acquisition multiple be a it be projects. So, loans, know it could project

what detail in and So, related what appreciated. loans, corporate be to more terms the the would if would these distribution of be, assets could are provide you that

Son Tae-Seung

very you Thank Yes. much.

for second. you answer, the Thank you. a wait prepare we While if could

Jung Seok-Yong

mortgage of question. CRO, your also the I loans, real estate about is real This for talk you and to different. the Thank with that capital, think And they are estate if Jung Yes. Seok-Yong. we PS numbers, regards

corporate the estate of as related would before, financing. of the KRWX.X that trillion mentioned half on So, project have around side, be real it for we the

and of mortgages of loans some is it some in mix book. there real also is financing, So, secured estate that project or

the talk be hand. on be estate-related you don’t secured specifics, real credit, to estate when balance. data estate would real loans, that the unfortunately, it we would KRWX.X credit. real would project So, in give But I have around financing about be And trillion total

real credit. would trillion KRWX.X So, be estate-related the

Operator

Thank question. from last you for I the take Securities, [indiscernible] question Kim could Maybe very Tower much. last the Investment

ask last question. your So, please

Unidentified Analyst

Thank your you you questions. ask the Yes. funding a to I about would to for opportunity question like side. ask

funding experience has look you So, Q-o-Q right year, could funding be of right how on volume side, are now, margin does bank next that a do a want expansion to high-growth it’s you And at next funding the And now, I quarter area year. the to the if able think in seem if go it not that, the on but into decreased. do because to basis, determine squeeze that fourth how overall you much also. you much

your talk think And did the that about for that, overall but impact the like? you margin view expectations there? do you overall and would the year, look side margin what think your you profile would funding how do So,

Son Tae-Seung

Yes.

funding, how So, manage on banking asking want to of about our to future that for what would to overall mix we are the light plans are terms going margins and create. the our be question, of the funding in summarize profile how much in the you side, our that strategy, we

you. for we if Thank could just second. a while wait prepare So, answer, this you

Lee Sung-Wook

This the CFO, Sung-Wook. Yes. is Lee

you well of. that So, the increased, this is recently, are aware look if costs you at it has and funding something

the a higher of general behind – interest and in environment would course, at be that, rate the level. that reasons So is

regulations, at have that, result a if we tightened. in of they also And loan-to-deposit spread, to the addition that, as LCR look our have deposits decreased. core So, the and been

So, from goes it XX.X%. into October,

that we face result. funding that, of result a as as offer requirements they a more So,

months the look are there six they and recurring, of the they of provided financial normalization we if leeway was a have around at what for authorities LCR. the that So,

give more bit us a does that So, breathing room.

a now, at be to banking whole, stably LCR you that managed be So, as at XXX% right sector if try for would LDR, so manner. in or the look LDR, and the it

if of not deterioration are stable the we profile. as now, think the forward. be – expectations under That more going right more there I in can So, now, very would environment, current funding a environment, do the that have

base core So, side, that of rising, and as you stabilizes, before, have decline improve in and year, [indiscernible] that just in will market believe do as in uplift, have or to the we and maybe talked Q&A End our outperform as are asset out that the we will growth, funding will next be then that meet I it first we or the level. are do on that, that think experiencing that market rates about in we core it we peak cost course, ratio And actually margins. reverse expect, that then target quarter, to mentioned in do in as overall if that fourth expected actually we deposits the our even levels that we the as able we the as of will the managing go we mentioned, moderating that before, are in then does the of rate, continue it if terms But then quarter, we if think the do out, the rise. mentioned terms if of think peaks-out for to rate

Yi Jung Su

you Q&A performance. So Thank with quarter, better we this, earnings with today. And call. to wrap next session. very like up hope XXXX meet you the your up this, you we would wrap attention And conference you would quarter the we with Thank third much. look with to and back for

Woori Financial (WF) 26 Oct 222022 Q3 Earnings call transcript