WF — Woori Financial Group Inc.

Summary of Woori Financial Group Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Net Income: Q2 2026 net income reached KRW 1.0046 trillion, a 66% increase quarter-over-quarter (Q-o-Q), surpassing market expectations and regaining the KRW 1 trillion level. Year-to-date (YTD) net income for the first half of 2026 is KRW 1.609 trillion, up 3.7% year-over-year (Y-o-Y).
• Return on Equity (ROE): Common equity ROE was reported at 9.0%, improving to 10.3% when excluding one-off items.
• Net Operating Revenue: Increased 6.0% Y-o-Y to a record KRW 5,722.7 billion, with Q2 revenue up 7.5% Q-o-Q to KRW 2.965 trillion.
• Cost-to-Income Ratio (CI): Maintained at 42.8%, reflecting effective cost management despite structural increases.
• Credit Costs: Total credit costs for the first half were KRW 966 billion, with Q2 costs down 16.7% Q-o-Q to KRW 439.2 billion.

2. Strategic Updates and Business Highlights

• Diversification of Income: Non-interest income rose 20% Y-o-Y, driven by strong capital market performance, with fee income exceeding KRW 700 billion for the first time in a quarter.
• Shareholder Returns: The Board approved a KRW 150 billion share buyback and cancellation for H2 2026, totaling KRW 350 billion for the year, marking the largest buyback program in the company’s history. A cash dividend of KRW 220 per share was also declared.
• Productive Finance Commitment: The group expanded its commitment to productive finance by an additional KRW 10 trillion, aiming to support strategic industries and enhance long-term growth.
• Tongyang Life Acquisition: The transition to a wholly-owned subsidiary is expected to enhance the competitiveness of the insurance business and improve capital adequacy.

3. Forward Guidance and Outlook

• Earnings Growth: The company aims to maintain quarterly earnings above KRW 1 trillion, with a focus on enhancing core business drivers and expanding non-bank contributions.
• Credit Cost Management: Targeting a reduction in credit costs by 15% for the full year, with a goal to maintain the credit cost ratio in the low 40 bps range.
• NIM Stability: Anticipates that NIM will remain stable despite rising market interest rates, supported by strategic asset management and a focus on core deposits.

4. Challenges and Points of Concern

• NPL Increase: The group reported an increase in non-performing loans (NPLs), primarily related to exposure to the Tongyang Group, which has raised concerns about asset quality.
• Market Pressures: Rising exchange rates and interest rates present challenges, with potential impacts on profitability and loan origination strategies.
• Competitive Landscape: The group faces competitive pressures in the securities and retail sectors, necessitating ongoing investment in infrastructure and customer acquisition.

5. Notable Q&A Insights

• Securities Business Development: The CFO outlined plans to enhance the brokerage and retail network, emphasizing the need for strategic partnerships and licensing to improve profitability.
• Risk Management: The group is focused on stringent risk management practices, particularly in light of the economic environment and potential vulnerabilities among borrowers.
• Digital Assets: The group is exploring opportunities in digital assets, including stablecoins, and is preparing to adapt to regulatory changes in this space.
• Total Shareholder Return (TSR): The CFO indicated that while achieving a TSR of 50% this year may be challenging, they expect to meet or exceed this target based on current performance and non-taxable dividends.

Overall, Woori Financial Group demonstrated strong financial performance in Q2 2026, with strategic initiatives aimed at diversifying income and enhancing shareholder returns, while also navigating challenges related to asset quality and market conditions.