**Yurri Financial, net profit decreases while capital ratio hits a record high... Growth momentum in the non-banking sector draws attention**

Woori Financial Group’s net profit decreased in the first quarter of this year, but its capital strength has actually improved, showing a coexistence of slowing profitability and structural enhancement.

On the 24th, Woori Financial Group announced that its net profit for the first quarter of 2026 was 6.038 trillion won, a 2.1% decrease year-over-year. This figure is far below the market expectation of approximately 8.15 trillion won. Although the performance on the surface did not meet expectations, a closer look reveals that both interest income and non-interest income from its core businesses increased. First-quarter interest income was 23.03k trillion won, up 2.3%; non-interest income reached 4.546 trillion won, a 26.7% increase. Notably, the bank’s net interest margin (NIM—an indicator measuring the profitability difference between loan and deposit rates) rose from 1.49% in the fourth quarter of last year to 1.51% in the first quarter of this year, indicating that its earnings base has been somewhat stabilized amid changing interest rate environments.

The main reasons for the net profit decline are temporary expenses and external variables. Due to the Middle East conflict, securities and exchange rate-related gains decreased, and a one-time provision for overseas subsidiaries of Woori Bank was also recorded at about 1 trillion won. Additionally, with reputation retirement expenses reaching 1.83 trillion won in the first quarter, selling, general, and administrative expenses increased to 14.23k trillion won, a 9.0% year-over-year rise. Loan loss provisions also increased to 526.8 billion won, up 20.9%. Loan loss provisions are expenses set aside in advance to cover potential loan defaults; when the economy slows or borrowers with fragile financial positions face increased debt burdens, these expenses tend to rise. The company emphasized that this downturn is due to temporary external factors and explained that performance is expected to recover once market indicators stabilize.

However, indicators of resilience show divergence. The group’s non-performing loan ratio, reflecting asset quality, increased from 0.63% at the end of last year to 0.68% at the end of the first quarter of this year; the bank’s overdue rate was 0.38%, and credit card overdue rate was 1.80%, both rising. The increase in overdue rates indicates that household and corporate repayment capacities have weakened somewhat, which is a key concern in the financial sector. On the other hand, capital strength has significantly improved. Woori Financial’s common equity Tier 1 capital adequacy ratio (CET1—an indicator of core capital that absorbs losses) at the end of the first quarter was 13.6%, up 0.7 percentage points from the end of last year, reaching a record high. For financial holding companies, a higher ratio means a stronger ability to withstand crises, providing more room for dividend payouts or expanded investments. Woori Financial emphasized that this exceeds its medium- to long-term target of 13%, based on this context.

Expansion in the non-bank sector is also viewed as a key trend in this performance. Woori Card’s net profit in the first quarter was 43.9 billion won, a 33.8% increase year-over-year; Woori Financial Capital reached 40 billion won, up 30.7%. The acquisition of Toyo Life last year generated a net profit of 25 billion won, while Woori Investment & Securities benefited from stock market gains, recording 14 billion won, a 976.9% increase. Woori Financial plans to promote a future capital increase of about 10 trillion won for Woori Investment & Securities and intends to fully incorporate Toyo Life as a subsidiary through a comprehensive stock swap. It is estimated that if Woori Investment & Securities’ total capital expands to around 22 trillion won, it would rank approximately 11th in the industry and could play a core role in risk capital investments and corporate financial support within the group. Making Toyo Life, an insurance company, a 100% subsidiary would allow profits to stay entirely within the group, further strengthening the non-bank investment portfolio.

Shareholder return policies have also been expanded. Woori Financial’s board of directors decided to set the first-quarter dividend at 220 won per share, a 10% increase from last year, and this dividend will be paid tax-free. Although the performance itself did not meet expectations, this move is interpreted as an effort to enhance shareholder returns, given the improved capital adequacy. Overall, the first-quarter results show that despite pressures from expenses and signs of weakening resilience, the rising capital ratio and structural expansion in the non-bank sector are progressing simultaneously. If this trend can be sustained and external variables and bad asset management stabilize in the future, Woori Financial may be able to shift away from a bank-centric revenue structure toward a more diversified financial group system.