Woori Financial Group (316140) Q1 2026 earnings summary

Executive summary

• Q1 2026 consolidated net income ranged from KRW 603.8 billion to KRW 639.4 billion, with stable profitability despite market volatility and one-off provisions.

• Non-bank subsidiaries' profit contribution more than doubled year-over-year, rising from 8.8% to as high as 25%, driven by insurance acquisition and strong subsidiary performance.

• CET1 ratio reached 13.6%, up 71 bps year-to-date and 115 bps year-over-year, supporting asset growth and shareholder returns.

• Group completed the acquisition and consolidation of Tongyang Life as a wholly-owned subsidiary to streamline governance and boost insurance competitiveness.

• Total assets reached KRW 612.6 trillion, up from KRW 601.5 trillion at the end of 2025.

Financial highlights

• Net operating revenue reached KRW 2.76 trillion, up 5.6% year-over-year, with non-interest income up 26.7% to KRW 455 billion.

• Interest income grew 2.3% year-over-year to KRW 2.3 trillion; core fee income hit a quarterly record at KRW 576.8 billion, up 13% year-over-year.

• Bank NIM was 1.51%, up 2 bps quarter-on-quarter and 7 bps year-over-year; group NIM including card business was 1.76%.

• SG&A expense increased 9% year-over-year to KRW 1.02 trillion, with a cost-to-income ratio of 45%.

• Credit cost ratio annualized at 0.53%, with one-off provisions impacting results; excluding one-offs, credit cost was KRW 390 billion.

Outlook and guidance

• NIM is expected to remain above last year's 1.46%, with continued asset rebalancing and core deposit growth, though regulatory risks may emerge in the second half.

• Credit cost ratio is guided at around 40 bps for 2026, with total credit cost targeted to be 20% lower than last year.

• Shareholder return policy includes a 10% annual DPS increase, ongoing treasury stock buybacks, and improved visibility on additional buybacks in 2H26.

• Focus on balanced growth across banking, securities, and insurance, with ongoing digital transformation and ESG initiatives.

• Management remains cautious on external risks, including global economic uncertainty and credit quality.