A Record HI Performance

Woori Financial Group records surprising net profit in H1 with Woori Bank setting the pace

Woori Financial Group recently announced that it achieved a record performance of 1.50 trillion won in net profit in the first half of 2007, an increase of 50% compared to the same period in 2006. Operating profit also increased 47.3% to 2.17 trillion won. Net profit generated in the second quarter was 617.3 billion won.
The Group's total assets reached 264.3 trillion won as of the end of June, an increase of 15.1 trillion won compared to the end of previous year, a result of focusing on attracting valuable assets and customers.
The backgrounds of the Group's excellent operating performance are as follows:
- Stable growth in core earning sources such as interest income and fee income
- Improvement of asset quality ratio such as delinquency ratio and NPL coverage ratio
- Increase of deposits and trading commission of Woori Investment & Securities thanks to a bullish stock market
- High growth in credit card business
Details of the performances in the second quarter are as follows:
With regard to the profitability, net profit decreased to 617.3 billion won during the period from 887.0 billion won in the first quarter. However, considering gains of disposal of LG Card shares amounting 500 billion in 1Q, the Group achieved stable growth in core earning sources such as interest income and fee income in substance. The improvement of core earning sources mainly resulted from stable growth in assets, interest income, banking service, brokerage and beneficiary certificate.
For asset quality, non-performing loan ratio decreased 0.2%p over the same period in 2006 to 0.9% backed by thorough risk management, despite the loans increased 6.9% in 2Q. Moreover, other asset quality ratios such as the delinquency ratio and the NPL coverage ratio also improved constantly.
In the non-banking businesses, Woori Investment & Securities has contributed to the growth thanks to the bullish stock market. Deposits have increased to 93 trillion won as of the end of June from 72 trillion won at the end of 2006, and net profit in Q2 also sharply increased more than doubled the result in 1Q. Especially, newly launched financial product 'Octo'that provides integrated financial benefits raised the funds over 4 trillion won just in three months.
Moreover, assets in the credit card sector approached 2.8 trillion won and the market share also increased to 2.8 trillion won. Growth in assets and market share is expected to continue through the launching of a new kind of credit card.
A Woori Group official said, "The noticeable improvements of core earning sources are especially meaningful in our Q2 operating results. Stable growth in core earning sources is expected to contribute to upgrading our corporate value, resolving underperformed stock price and propelling the privatization by our executives."Meanwhile, Woori Bank also achieved recordable performances in the first half of the year.
Net profit was 1.34 trillion won in the first half of the year, an increase of 487.9 billion won, or 57.5% from the same period in 2006. Operating profit also increased 645.4 billion won, or 58.1%, to 1.76 trillion won. Total assets were 196 trillion won at the end of June, an increase of 9 trillion won compared to the end of 2006.
The delinquency ratio and non-performing loan ratio was 0.69% and 0.83%, respectively. The NPL coverage ratio was 168%. The bank also accomplished a ROA of 1.60%, ROE of 23.11%, sales and administration ratio of 41.0% and net NPL ratio of 0.36%. All of financial ratios have fulfilled the 5 standards of MOU contract with Korea Deposit Insurance Corporation.
An official of Woori Bank said, "We will focus on valuable and strong growth-potential businesses including credit card, IB, beneficiary certificate and retirement pension in the second half of the year. We will also strive to accomplish excellent performances through efficiently operating risk management system against economic uncertainties."Woori Investment & Securities recorded a net profit of 131.3 billion won in Q2 backed by a bullish stock market and sales growth of 'Octo,'and Kyongnam Bank achieved a record net profit of 100.7 billion won in the same period aided by the increase of beneficiary certificates sales and non-interest income. Kwangju Bank also posted a net profit of 69.3 billion won from stable asset growth and the improvement of its bad loan ratio. As a result, most of our subsidiaries showed qualitative and quantitative growth during the second quarter. nw

Chairman Park Byung-won of the Woori Financial Group.