This article first appeared on GuruFocus .
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Net Income:KRW603.8 billion, flat year-over-year.
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Net Operating Revenue:KRW2.7577 trillion, a 5.6% increase year-over-year.
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Interest Income:KRW2.3032 trillion, a 2.3% increase year-over-year.
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Noninterest Income:KRW454.6 billion, a 26.7% increase year-over-year.
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Core Fee Income:KRW576.8 billion, a 13% increase year-over-year.
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SG&A Expense:KRW1.4228 trillion, a 9% increase year-over-year.
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Credit Cost:KRW526.8 billion, a 20% increase year-over-year.
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CET1 Ratio:13.6%, an increase of 71 basis points year-to-date.
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Quarterly Dividend:KRW221 per share, a 10% increase year-over-year.
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Bank Loan Total:KRW338 trillion, a 1.2% increase year-to-date.
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Corporate Loan Growth:2% increase, driven by strategic industries.
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Household Loans:Flat at KRW151 trillion.
Release Date: April 24, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Woori Financial Group Inc ( NYSE:WF ) reported a Q1 2026 net income of KRW603.8 billion, maintaining a flat year-over-year performance driven by solid growth in Corporate Finance and a five-quarter uptrend in the bank's NIM.
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The group's CET1 ratio reached a historical high of 13.6%, increasing 71 basis points year-to-date, providing a strong foundation for sustainable growth and shareholder returns.
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A quarterly dividend payout of KRW221 per share was announced, marking a 10% increase year-over-year, with the full amount being nontaxable.
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Nonbank subsidiaries, including card capital insurance securities, saw income growth of 185% year-on-year, increasing their contribution to the group's profit from 9% to 25%.
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The group plans additional share buyback and cancellation in the second half of the year, aligning with their corporate value enhancement plan.
Negative Points
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Net income underperformed market expectations due to ERP costs, one-off provisioning related to local subsidiaries, FX loss, and downsized gains from securities.
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SG&A expenses increased by 9% year-over-year, driven by ERP-related costs, insurance company expenses, and an education tax hike.
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Credit costs rose by 20% year-over-year, with a one-off large-scale provision impacting the bank's overseas subsidiary.
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The group's Q1 2026 credit cost ratio was relatively high at 53 bps, with concerns about geopolitical risks and potential impacts on asset quality.
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The group's earnings underperformed expectations, particularly in the SG&A line item, raising concerns about cost management efficiency.
Q & A Highlights
Q: What is the purpose of turning Tongyang Life into a wholly owned subsidiary, and why was this timing chosen? A: Lee Jung-Soo, Vice President of Strategy Unit, explained that the decision to make Tongyang Life a wholly owned subsidiary is aimed at strengthening the insurance business and retaining 100% of its earnings within the group. This move provides flexibility in business management and is seen as essential for driving synergies and improving capabilities.
Q: Why did Woori Financial Group's earnings underperform expectations, particularly in SG&A expenses? A: Lee Jung-Soo noted that SG&A expenses increased due to ERP-related costs, insurance, and education tax impacts. The group is focusing on cost efficiency, including branch consolidation and digital investments, to improve the cost structure and address the higher CI ratio compared to peers.
Q: What is the annual NIM guideline, and does the CCR guideline include Q1 one-offs? A: Kwak Sung-Min, CFO, stated that the NIM has been on an uptrend due to market rate increases and funding efficiency. The annual NIM is expected to be around 1.46% or higher. The CCR guideline of 40 bps includes Q1 one-offs, and the group aims to maintain this level through preemptive risk management.
Q: What impact will the capital injection into the securities company have on the CET1 ratio? A: Kwak Sung-Min explained that the capital injection itself will not impact the CET1 ratio. However, increased RWA allocation to the securities business may temporarily affect the ratio until profit increases offset this. The group expects the P&L increase to eventually contribute positively to the CET1 ratio.
Q: How will the capital injection and share exchange affect the group's shareholder return policy? A: Kwak Sung-Min confirmed that the current shareholder return policy, including a 10% annual DPS increase and treasury stock purchases, will continue. The capital injection and share exchange are not expected to significantly impact the CET1 ratio, allowing the group to maintain its commitments to shareholders.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
