Bulletin: Woori Bank's Capitalization Can Withstand Parent's Nonbanking Expansion Plans

HONG KONG (S&P Global Ratings) April 24, 2023--Woori Bank is likely to maintain adequate capitalization over the next two years. This is despite the parent's potential expansion in the nonbanking space. We do not expect any potential acquisition by Woori Financial Group Inc. (WFG; not rated) to be large enough to materially weaken the capitalization of the group and its dominant operating subsidiary, Korea-based Woori Bank (A+/Stable/A-1). The group is likely to pursue inorganic growth in segments such as securities and insurance. We project annual loan growth of about 4% for Woori Bank over the next two years. This is considering the bank's focus on risk control, and subdued loan demand amid increased borrowing costs. This, together with the bank's

...April 24, 2023 HONG KONG (S&P Global Ratings) April 24, 2023--Woori Bank is likely to maintain adequate capitalization over the next two years. This is despite the parent's potential expansion in the nonbanking space. We do not expect any potential acquisition by Woori Financial Group Inc. (WFG; not rated) to be large enough to materially weaken the capitalization of the group and its dominant operating subsidiary, Korea-based Woori Bank (A+/Stable/A-1). The group is likely to pursue inorganic growth in segments such as securities and insurance. We project annual loan growth of about 4% for Woori Bank over the next two years. This is considering the bank's focus on risk control, and subdued loan demand amid increased borrowing costs. This, together with the bank's steady profit generation, will likely underpin its adequate capital buffers, in our view. Meanwhile, Woori Bank's adequate underwriting and risk management are likely to help it navigate tough operating conditions in the coming...

Bulletin