Woori Financial Targets Shareholder Return Ratio of at Least 50% Next Year ... “No Additional Capital Contributions for Insurer Merger” [Earnings Call]

[Financial News] Woori Financial Group is pursuing a plan to raise its nominal total shareholder return ratio to at least 50% next year. It plans to maintain its existing commitment to increase dividends per share (DPS) by 10% annually, while using its increased capital capacity for growth and shareholder returns. It also said the planned merger of Dongyang Life Insurance and ABL Life Insurance, targeted for next October, would proceed without additional capital contributions from the holding company.
Woori Financial Chief Financial Officer (CFO) Kwak Seong-min said on the third-quarter earnings conference call held on the 23rd, “I believe the nominal total shareholder return ratio should be 50% or higher next year,” adding, “We will work out the details as we draw up next year’s financial plan.”
The group also reaffirmed its existing value-up plan to increase dividends per share by 10% each year. CFO Kwak said, “We will continue to honor our plan to increase dividends per share by 10% annually,” adding, “We plan to keep implementing it through measures such as improving return on equity (ROE) in the non-banking segment and reducing the number of shares issued.”
Tax-exempt dividends will also continue. Woori Financial said that 5.2 trillion won in resources for tax-exempt dividends would remain after the third- and fourth-quarter dividends, enough to sustain the current dividend policy for the next three to four years. Before those resources are exhausted, it plans to reassess in 2028 how much can be distributed tax-free and consider securing additional resources.
Woori Financial is also discussing ways to improve its existing value-up plan. CFO Kwak said, “Once the improvement plan is decided following board discussions, we plan to unveil it when we announce our annual results next February,” adding, “We should be able to start implementing next year the overarching principle of using our higher capital ratio for shareholder returns as well.”
Woori Financial said it aims to improve financial stability and management efficiency during the merger of Dongyang Life Insurance and ABL Life Insurance without additional capital contributions from the holding company.
CFO Kwak said, “We are preparing for the financial integration on the assumption that, after the insurers merge, the holding company will not have to inject capital into them to cover their financial costs.”
Woori Financial is proceeding with plans to integrate the financial, information technology (IT) and human resources systems, with October 1 next year set as the merger date. Once Dongyang Life Insurance and ABL Life Insurance complete their merger, they will become a life insurer ranked among the industry’s top five.
The operating system will also be shifted to an AI-centered model. The group plans to improve efficiency by incorporating AI into operations across the business, including underwriting and sales.
Woori Financial said, “We are working on the merger in a way that will give the combined insurer the most efficient financial structure,” adding, “We will transform its operating systems around AI to build an efficient and financially stable company.”
The sale of ABL Life Insurance’s Yeouido headquarters is likely to be completed by year-end. Woori Financial said, “If discussions with the preferred bidder are completed as planned, the sale is likely to close by the end of this year.”
[email protected] Lee Hyun-jung Reporter