Realized KRW532.4 billion in Net Income in 1H 2010

- Up 38.2% YoY in net income in 1H
- Up approximately KRW6 trillion QoQ in total assets to KRW331.3 trillion
- Marked KRW40.6 billion deficit in net income in 2Q due to proactive restructuring

Woori Financial Group announced on 4th that its net income marked KRW532.4 billion in the first half of the year, an increase of 38.2%, or KRW147.0 billion, over the same period of the previous year due to the increase of doubtful expenses despite income growth before allowance reserves by 43.9%. Meanwhile, net income in the second quarter recorded KRW40.6 billion deficit mainly due to preemptive allowance reserves from proactive restructuring. Contribution to allowance for doubtful accounts in 2Q increased 97.3% QoQ to KRW1.166 trillion.

Total assets of the Group increased KRW5.9 trillion QoQ to KRW331.3 trillion at the end of the first half of the year.

ROA and ROE of the Group marked 0.4% and 7.7%, respectively, and BIS ratio and equity capital ratio recorded 12.2% (E) and 8.5% (E). BIS ratio and equity capital ratio of the bank sector showed 14.4% (E) and 10.7% (E), respectively.

As for asset quality, delinquency ratio improved 0.06% QoQ to 0.82%, in which delinquency ratio particularly improved 0.29% QoQ to 1.16%. However, substandard & below ratio increased 1.0%p QoQ to 3.0% due mainly to conservative approach to asset control and proactive corporate restructuring efforts.

Interest income boosted 15.5% YoY to KRW3.2187 trillion and cumulated NIM in 1H also increased 0.49%p YoY to 2.36%. Meanwhile, interest income in 2Q recorded KRW1.6134 trillion, up 0.6% QoQ, despite NIM declined 0.12%p QoQ to 0.23% in the same period due to the downturn of interest rates on CDs. Commission income grew 2.6% QoQ to KRW434.0 billion in 2Q.

An official of Woori Financial Group said, “We are expecting better operating results, as allowance for doubtful accounts will decrease and more incomes from the disposal of shares of Hynix and Daewoo International will be also anticipated in the second half of the year.”

Woori Bank, our key subsidiary, achieved net operating revenue of KRW3.0751 trillion and net income of KRW483.0 billion in the first half of the year. Net operating revenue and net income increased KRW691.1 billion and KRW144.2 billion, respectively.

In the second quarter, the bank marked KRW23.2 billion in net income due to the reserves of allowance for doubtful accounts of KRW934.2 billion, which was attributable to preemptive corporate restructuring. NIM and ROA improved 0.48%p and 0.14%p YoY to 2.26% and 0.43%, respectively. Meanwhile, substandard & below ratio increased 1.23%p YoY to 3.03%.

An official of Woori Bank said, “In the second half of the year, burdens of reserving allowances will be further eased, and we will focus our capabilities on major four strategies: expansion of loyal customers, development of new growth engines, improvement of asset quality and customer-oriented business.”
Kwanju Bank and Kyongnam Bank recorded KRW75.7 billion and KRW60 billion in net income in 1H, respectively. Woori Investment & Securities and Woori Financial also achieved KRW162.4 billion and KRW11.3 billion in the same period, respectively.

Kyongnam Bank marked KRW11.8 billion deficits in net income in 2Q by reserving more than KRW100.0 billion allowances for doubtful accounts due to financial turmoil in relation to real estate project financing. However, the bank realized net income of KRW60 billion during the first half of the year backed by achieving KRW71.8 billion in net income in 1Q.