Woori Financial Group Inc. (NYSE:WF) Q4 2022 Earnings Conference Call February 8, 2023 2:00 AM ET

Company Participants

Sang-Wook Chun - President

Sung-Wook Lee - CFO

Jung Seok-Yong - Chief Revenue Officer

Conference Call Participants

Park Hye-jin - Daishin Securities

Jung Jun-Sup - NH Securities

Kim Do Ha - Hanwha Securities

Baek Doosan - Korea Investment & Securities

Shim Jong-Min - CLSA

Unidentified Company Representative

Good afternoon. I am [indiscernible], Head of IR at Woori Financial Group and I will be moderating the conference call from this quarter. Let me first begin by thanking everyone for taking time to participate in this earnings call for Woori Financial Group. On today's call, we have President, Chun Sang-Wook, who also oversees the Group IR function; Group CRO, Jung Seok-Young; Group CFO, Lee Sung-Wook; and Group CDO, Ouk Il-Jin.

Today's call will start with a presentation from President Chun Sang-Wook on the earnings highlights. After which, we will have a presentation on the group's capital management and shareholder return policies. After that, we will have the Q&A session. Please note that this call is being simultaneously interpreted for overseas investors.

With that, let us begin the earnings presentation for Woori Financial Group for 2022.

Sang-Wook Chun

Good afternoon. This is Woori Financial Group President, Chun Sang-Wook. I will now present the fiscal year 2022 performance of the group.

Please turn to Page 3 of the material that is available on our website. First, let me discuss the net income. For the full year of 2022, Woori Financial Group's net income was KRW3,169 billion. This is a 33.7% increase year-over-year. This healthy performance is the result of stronger profit generation capabilities, stable management of our [indiscernible] and cost control efforts. For the fourth quarter of 2022 alone, our net income was KRW508 billion.

Next moving on to net operating revenue. The 2022 group net operating revenue was KRW9,846 billion, an increase of 18% Y-o-Y. Net interest income was KRW8,697 billion, while non-interest income was KRW1,149 billion. Due to efforts to improve our profit structure and provided by IR benchmark rate, group interest income grew consistently quarter-over-quarter. In addition, despite market uncertainties, non-interest income showed solid performance driven by core fee income as our subsidiaries focused on their core operations.

Moving on to expenses like SG&A and credit costs. The Group's 2022 SG&A was KRW4,535 billion, representing an increase of 9.3% Y-o-Y, but the cost income ratio was 44.4%, which is a 3.1% point decrease versus the previous year. Groupwide efforts to control costs have been leading to the improvement in our cost income ratio. In spite of concerns of an economic recession, we have proven our stable risk management capabilities. The Group's 2022 credit cost was KRW848 billion and the credit cost ratio was 0.25%.