...Woori Bank's enhanced credit risk management will likely contain some pressure on asset quality and credit costs amid rising domestic interest rates. The bank will likely continue to focus on small and midsize enterprise (SME) loans, backed by collateral or guarantees. The bank also strengthened its underwriting standards, such as the ratio of debt servicing to income for household borrowers, in line with regulatory requirements. Additional provisions set aside during the pandemic will provide a buffer against some asset quality deterioration. We expect the bank's asset quality and credit costs to remain comparable with those of major domestic commercial banking peers. Woori Bank will likely maintain adequate capitalization despite the parent group's potential nonbanking acquisitions. The bank's parent, Woori Financial Group Inc. (WFG), is unlikely to seek excessive growth via mergers and acquisitions over the next two years, in our view. This is given the group's focus on maintaining sufficient...
