Woori Financial Capital Co. Ltd.

The stable outlook on WFC reflects our view that the parent group will maintain an adequate capitalization and risk profile over the next 18-24 months. This is despite potential nonbanking business acquisitions by WFG. We expect the group's moderate asset growth to support its capitalization. In our view, the group will provide strong support to WFC under any foreseeable circumstance over the next two years, if needed. This stems from the company's core importance to the group. Our ratings on WFC will therefore move in line with the group's stand-alone creditworthiness. We may lower the ratings on WFC if: (1) the group's capitalization weakens, pushing the risk-adjusted capital (RAC) ratio sustainably below 7%, potentially due to aggressive inorganic growth in

...Woori Financial Capital Co. Ltd. (WFC) will remain integral to its parent, Woori Financial Group Inc. (WFG). This reflects the company's crucial role in the group's efforts to diversify business structure and revenue streams. WFC specializes in auto and corporate financing, which offer cross-selling benefits to Woori Bank and other nonbank affiliates within the group. We assess WFC as a core nonbank subsidiary of WFG and equalize the ratings with the group stand-alone credit profile of 'a-'. We expect WFC to maintain its solid business presence in the installment financing market, especially in auto financing. Our view considers the company's business know-how stemming from its long operating history, partnerships with various auto manufacturers, as well as established brand reputation. WFC was the fifth largest in terms of assets among installment finance and leasing companies in Korea as of end-June 2024. Its diversified business portfolio across auto, corporate, and retail financing...

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