20-F: Woori Financial Group Reports 2024 Financial Results, Highlights Strategic Initiatives

Woori Financial Group's 20-F filing details its financial performance for 2024, strategic initiatives, and risk management practices.

Summary

• Woori Financial Group's 20-F filing provides a comprehensive overview of the company's financial status and activities.
• The cumulative depreciation amount as of December 31, 2023 and 2024 is 1,471 million Won and 2,357 million Won, respectively.
• The regulatory reserve for credit losses in retained earnings amounted to 2,839,475 million Won and 2,392,542 million Won as of December 31, 2023 and 2024, respectively.
• Woori Bank issued hybrid securities amounting to 1,546,447 million Won and 1,645,947 million Won as of December 31, 2023 and 2024, respectively.
• Intangible asset amortization cost was 14,664 million Won, 22,349 million Won and 28,509 million Won for the years ended December 31, 2022, 2023 and 2024 respectively.
• Lease depreciation cost was 388,895 million Won, 462,394 million Won and 587,148 million Won for the years ended December 31, 2022, 2023 and 2024, respectively.
• The applicable income tax rate in 2023 and 2024 ranged from 9.9% to 26.4% depending on the tax basis.
• The accumulated profit on debentures on foreign currency amounted to 124,647 million Won, and the accumulated loss on debentures on local currency amounted to 4,659 million Won, as of December 31, 2024.
• The Group provided Korean Won settlement services for trading transaction settlement between Korea and Iran, investigated by U.S. prosecutors.
• The financial guarantee amount was 3,661,656 million Won and 4,156,790 million Won as of December 31, 2023 and 2024, respectively.

Sentiment

Score: 6

Explanation: The document is largely factual, presenting financial data and operational details. The sentiment is neutral, with both positive and negative aspects discussed.

Positives

• The group recognized gains of 171,095 million Won in 2023 and 204,822 million Won in 2024 from financial assets and liabilities.
• The non-controlling interests decreased in accordance with paid-in capital increase and stock retirement and additional acquisition of minority interests during the year ended December 31, 2024.
• The non-controlling interests were recognized in accordance with merger with Korea Foss Securities Co., Ltd. during the year ended December 31, 2024.

Negatives

• Woori Financial Group subsidiary Woori Bank provided Korean Won settlement services for trading transaction settlement between Korea and Iran, investigated by U.S. prosecutors.
• The Russia Ukraine conflict has been escalated in February 2022, and international sanctions were imposed on Russia. As of December 31, 2024, the Group expects such conflict and sanctions would have financial impacts on the business of AO Woori Bank, one of the subsidiaries, in the future.

Risks

• The Russia Ukraine conflict has been escalated in February 2022, and international sanctions were imposed on Russia. As of December 31, 2024, the Group expects such conflict and sanctions would have financial impacts on the business of AO Woori Bank, one of the subsidiaries, in the future.
• The Group provided Korean Won settlement services for trading transaction settlement between Korea and Iran, investigated by U.S. prosecutors.

Future Outlook

The document mentions the Group expects such conflict and sanctions would have financial impacts on the business of AO Woori Bank, one of the subsidiaries, in the future. However, the Group cannot reasonably predict the financial impacts.

Industry Context

The document provides insight into the competitive landscape of the Korean financial market, highlighting the presence of both domestic and foreign players, as well as the increasing influence of fintech companies.

Comparison to Industry Standards

• The document mentions that Woori Bank had the third-largest deposit base among Korean commercial banks.
• The document mentions that Woori Card's market share based on transaction volume was approximately 8.2%, which ranked Woori Card as the sixth largest credit card issuer in Korea, according to the Financial Statistics Information System.

Legal Proceedings

• The Group provided Korean Won settlement services for trading transaction settlement between Korea and Iran, investigated by U.S. prosecutors (federal prosecutors, New York state prosecutors) and New York State Department of Financial Services for violations of U.S. sanctions against Iran, Sudan, Syria and Cuba.
• In June 2022, the Group reversed the provision related to the investigation of the U.S. Prosecutors, which have not been completed yet, in consideration of the opinion of an independent legal expert that the probability of sanctions by the U.S. Prosecutors in this case is low.
• In September 2023, Bank Mellat, a sanctioned Iranian bank, filed a lawsuit against Woori Bank in the Seoul Central District Court, demanding that Woori Bank return approximately 20.2 billion (which Woori Bank had frozen pursuant to U.S. sanctions against Iran), as well as interest and damages.
• In August 2024, the Seoul Central District Court ruled against Bank Mellat. Although Bank Mellat appealed such decision, the Seoul High Court denied the appeal in January 2025. Bank Mellat then re-appealed the case to the Supreme Court, but such case was ultimately dismissed without further review in April 2025.
• In April 2025, the Seoul Southern District Prosecutors Office commenced investigations that have since resulted in the indictments of those involved, including Mr. Son.

Related Party Transactions

• As of December 31, 2024, we had an aggregate amount of 3,523 million in outstanding assets, including loans, from transactions with our key management personnel, which includes our executive officers and directors, as well as the executive officers and directors of our major subsidiaries and the chief executive officers of our other subsidiaries.

Stakeholder Impact

• The document provides information relevant to shareholders, employees, customers, suppliers, and creditors, detailing the company's financial performance, risk management, and strategic direction.

Next Steps

• The Company will continue to take appropriate actions in response to such notices.
• Woori Card intends to strengthen its credit risk management systems to manage such risks.
• We intend to continue to fully cooperate with the Financial Supervisory Service in its audits and investigations and take any remedial measures as necessary.
• We intend to continue to develop new sources of fee income as part of our business strategy, including through our current investment banking, asset management, asset trust and lending businesses, as well as through mergers with, or acquisition of, non-banking businesses which we may decide to pursue.
• We intend to continue to focus on the development and training of our core professionals.
• We intend to strengthen and improve our internal controls system by implementing various measures that would minimize our operational risks, in particular those stemming from employee misconduct.
• We intend to strengthen our governance structure relating to cybersecurity in accordance with such revised regulations.

Key Dates

Keywords

financial results, financial metrics, risk management, Woori Financial Group, financial performance, financial statements, capital adequacy, credit risk, AO Woori Bank, hybrid securities, financial liabilities, financial assets, depreciation, amortization, sanctions, Iran, Russia, Korea