管理層發言
Good afternoon. I am Han Hong Sung, the Head of IR at Woori Financial Group. Let me first begin by thanking everyone for taking time to participate on this earnings call for the Woori Financial Group. On today's call, we have the Group CFO, Kwak Seong-Min; the Group CTO, Oak Il-Jin; and the Group CRO, Park Jang-Geun. We will first start with the Group CFO, Kwak Seong-Min's presentation on the earnings performance and then also present the corporate value enhancement plan, after which we will have a Q&A session. Please note that the call is being conducted with simultaneous interpretation for our overseas investors. Now let us start our presentation on the earnings for the full year of 2025.
Good afternoon. This is Kwak Seong-Min, the CFO of Woori Financial Group. Let me go over the 2025 full year performance. Please turn to Page 2 of the material, which is available on our website. The group's 2025 net income was KRW 3,141.3 billion, representing a year-over-year increase of 1.8%. The ROE was similar to last year at 9.1%. Amid uncertainties in the financial market regarding interest rates and FX rates and concern about a slowdown, balanced top-line growth and the insurance acquisition enabled the group to record a record high net operating revenue and stable profits. In particular, we set sizable reserves for future loss factors, including payoff projects with a completion guarantee of trust company and adjusted uncertainties such as fully provisioning against LTV-related fines, further solidifying the group's fundamentals. In addition, we completed the insurance acquisition without any negative impact on our capital ratios and established a growth foundation for the securities business by acquiring the final license and launching MTS Group, completing the portfolio as a comprehensive financial group.
Using this, we are starting to generate group synergies such as investment banking joint underwriting, open integrated wealth management branches, and expanding bancassurance operations. Another noteworthy achievement of 2025 is the significant improvement in our capital ratios. As of 2025 end, the tentative group CET1 ratio is 12.9%, up 77 basis points versus 2024 and exceeding the 2025 target of 12.5%. Across higher macro volatility, the insurance acquisition, and the higher year-end dividends, the group will still be able to improve its capital ratio through asset rebalancing to stabilize our financial structure, and we are able to demonstrate our strong capital management capabilities to the market. Based on this, the Board of Directors today has decided on year-end dividends of KRW 760 and share buybacks and cancellations of KRW 200 billion. Next, let me provide more detail about specific areas.
Please turn to Page 3 of the material. First, let me go over net operating revenue and NIM. The 2025 net operating revenue was 5% year-over-year at KRW 10,957.4 billion. Due to stable profit generation from a more diversified revenue sources and the inclusion of the insurance business, we posted a record high performance. Interest income for the year was KRW 9,030.8 billion, and top-line growth was moderate, but NIM improved quarter-over-quarter throughout the year, which led to better asset quality and growth. On noninterest income, we recorded a record level of fee income and balanced growth across securities, FX trading, and insurance income, which led to a jump of 24% year-over-year at KRW 1,926.6 billion. In addition, Woori Bank's 2025 NIM was 1.46%, and the group NIM, including the credit card business, was 1.73%, each representing an increase of 2 and 3 basis points, respectively.
Though there were two base cut rates during the year, NIM grew on the back of asset origination focused on profitability and asset quality and funding cost efficiencies. The recent movement in the equity market has led to money movements and market rates are rising, which is creating a more challenging funding environment. But the group will continue to expand its core deposit base, rebalance its portfolio to focus on profitable, high-quality assets and actively manage ALM to secure stable margins in the future. Next, let me go over the loan book. As of 2025 end, the bank's loans totaled KRW 334 trillion, flat year-over-year and around 1% higher quarter-over-quarter. In terms of corporate loans, they slightly declined versus 2024 end at KRW 180 trillion. Loan demand from large corporates was strong throughout the year, but the decrease came from the efforts to decrease SME sector business exposures and actively rebalancing assets to focus on new growth and high-quality companies.
On the retail side, the portfolio grew around 0.5% quarter-over-quarter or 4% year-over-year to KRW 150 trillion, mainly driven by real demand such as policy mortgages. Last year, against an uncertain business environment, including a weak one, the group was able to achieve profitable growth via prudent RWA management with a focus on capital adequacy. This year, as discussed in our future core growth project planned last September, we will leverage the group's corporate finance competitiveness to increase financial support for more productive areas of the economy. In addition, for retail loans, fully reflecting the government's policy stance, we will focus on the real demand to manage our assets in a stable manner. Next, let me talk about the group's noninterest income area. In 2025, noninterest income was KRW 1,926.6 billion, a record high level and a large increase of 24% year-over-year.
In particular, core fee income showed balanced growth across bank and nonbank businesses, totaling more than KRW 500 billion each quarter. In addition, against increased market volatility in interest rates and FX rates, the insurance income contribution from the comprehensive financial group portfolio provided more stability to our noninterest income profile. Leveraging this portfolio, we will strengthen the core competitiveness of our nonbank subsidiaries, such as our securities and insurance business and generate stronger synergies across businesses in areas like wealth management, investment banking, and also asset management to gradually expand our noninterest income contribution. Next, let me go over expenses and costs. Please turn to Page 4 of the presentation. So to discuss SG&A, in 2025, SG&A totaled KRW 5,180.5 billion. When excluding the ERP and the insurance business, it grew 10.8% year-over-year, representing a cost/income ratio of 45.7%.
During the year, the group spent to strengthen its business portfolio by building out the securities infrastructure and acquiring the insurance business. In addition, there were other upfront costs such as ordinary wage labor costs. We believe these investments for portfolio expansion were essential for sustainable future growth, and we will look at the cost increase from ordinary wage as a one-off expense, which we will try to minimize the impact by increasing future productivity. In addition, going forward, we will continue to engage in general cost-saving efforts like leveraging AI-based operation efficiencies to lower costs and achieve our mid- to long-term CI ratio target of below 40%. Next, let me move on to credit cost and asset quality. In 2025, the credit cost was KRW 2,086.2 billion, and the credit cost ratio was 0.53%. Although the base rate was cut, market rates have remained high and any concern about a slower economy continues.
The group recognized around KRW 430 billion in one-off credit cost, including preemptive provisioning related to completion guarantee of trust company projects and strengthened its loss absorption capabilities. So when excluding these one-off factors, the group's credit cost ratio was 0.42%. For the past two to three years, we have preemptively managed weak assets such as real estate project finance and completed an asset cleanup of the nonbank side, including the previous merchant banking business, savings bank, and asset trust. Thus, we expect any additional costs to be limited. And this year, we are targeting a credit cost that is 20% or around KRW 420 billion lower on a year-over-year basis. In addition, for Woori Bank, the corporate prime asset ratio stands at 84.1%. It is increasing loans to new growth sector manufacturing companies and continues to rebalance assets with a focus on asset quality.
Quality indicators are recently improved, but since uncertainties still persist, we will focus more on asset quality management based on preemptive buffers created last year to maintain the credit cost ratio within the 40 basis point range. Next, let me go over capital adequacy and shareholder return. Please turn to Page 5. The 2025 year-end tentative group CET1 ratio is 12.9%. When we launched in 2019, the group started with a CET1 ratio of 8.4%, and it has improved each and every year. In 2025, even though we had a large M&A, i.e., the insurance acquisition, solid profit growth and asset rebalancing, a reduction in FX-sensitive assets and RoRWA linked KPI systems resulted in a significant reduction of 80 basis points year-over-year. Thus, we have been able to achieve our promise of reaching a CET1 ratio of 12.5% and prove our commitment to enhance our corporate value. At the Board of Directors today, in light of the 2025 financial performance and our shareholder return policy, the Board decided on a year-end dividend of KRW 760 per share and a KRW 200 billion share buyback and cancellation.
The full year total dividend per share increased 13.3% year-over-year to KRW 1,361, which meets the qualifications of a high dividend company. In particular, the year-end dividend will also be in the form of a nontaxable dividend, the first of its kind from a bank-led financial holding company. The KRW 200 billion share buyback and cancellation also increases a 33.3% increase year-over-year, and the group's total TSR ratio, including nontaxable dividends, will stand at 39.8%. Other details of our shareholder return will be discussed when we present our 2026 corporate value enhancement plan in more detail. Next, I will go over the productive finance strategies of the future co-growth project announced in September. For the next five years, we plan to provide support of about KRW 73 trillion, excluding inclusive finance of KRW 7 trillion. KRW 17 trillion will be allocated to investments, including the National Growth Fund, and KRW 56 trillion will be supplied as loans to advanced strategic industries such as AI, semiconductors, and defense.
To secure growth momentum, we are operating the Advanced Strategic Industry Financial Committee as a task force. And recently, with Hanwha Group, we signed a financial support agreement for building an advanced strategic industry ecosystem, which shows that we are already delivering meaningful results. We are also leveraging our competitiveness in corporate finance and network to preempt high-quality clients and efficiently expand funding support. To this end, with the financial authorities’ capital regulation rationalization policy and by promoting the group's internal efforts such as asset rebalancing, we plan to secure sufficient capital headroom. Also, we will establish an AI-based risk management system that encompasses the entire process from loan review to post-loan management to build a strong growth foundation without undermining capital ratios and asset quality. That was the end of the 2025 annual earnings presentation. We will now move on to the next section.
Today, Woori Financial Group disclosed the 2026 corporate value enhancement plan on KRX. Kwak Seong-Min, CFO, will continue to go over the main elements of the 2026 corporate value enhancement plan.
Today, we announced the corporate value enhancement plan to review the progress made in 2025 and share with the market our new strategies for 2026. The value enhancement plan has incorporated feedback from the market and shareholders. And after thorough discussion, it has been reported to the Board of Directors to be announced today. We especially thought long and hard about how to effectively use the significantly improved capital ratios as basis for growth and shareholder return. So let me go through the material on our corporate value enhancement program, which has also been distributed today through the disclosure. I will first go over the financial indicators for 2025. Please refer to Page 4. ROE, thanks to balanced top-line growth and the acquisition of the insurance company, was maintained above 9%. However, as the cleanup at nonbank subsidiaries caused ROE to slightly decline. The CET1 ratio, despite the acquisition of insurance, LTV penalties, and higher shareholder return, is expected to annually improve by 77 bps to 12.9% to comfortably exceed the 2025 target of 12.5%.
Annual DPS for this year should increase by 13.3% year-over-year to KRW 1,361, which is similar to high dividend company levels. Of this amount, the year-end dividend of KRW 760 is nontaxable. When considered, the dividend payout reaches 35%, which is top notch in the industry. The size of share buyback and cancellation has also increased by 9.7% since 2024 to KRW 150 billion. The 2025 TSR of Woori Financial Group, when considering nontaxable dividends, reaches 39.8%. Page 5 is on nonfinancial indicators. In 2024, we launched the securities companies. And in 2025, we successfully incorporated the insurance company, thereby completing the group business portfolio. Synergy is the fundamental reason why we exist as a financial group. Based on the completed portfolio, wealth management, CIB, capital markets, and other key areas will be the focus as we concentrate our efforts to create synergies.
Meanwhile, for financial consumer protection, we are the first financial group in Korea to appoint a dedicated Chief Consumer Officer to take the lead in delivering social value. Also advancing the CEO succession program and establishing a new decision-making support process for the Board of Directors to protect shareholder interests are some examples of our efforts to improve corporate governance, which is the key focus in today's capital markets. I'll now move on to the 2026 corporate value enhancement plan on Page 6. In 2026, we plan to achieve a CET1 ratio of 13% ahead of schedule and then maintain it stably at around 13.2% or higher. While continuing the RoRWA-based asset rebalancing efforts, quarterly flexible RWA management and selective resource allocation across sectors and businesses, these are some sophisticated and strategic efforts we are making to manage the CET1 ratio. In addition, we will be disposing idle real estate held by the bank and insurance company to reduce RWA.
We will also be deploying diverse methods to efficiently manage and use real estate from a financial perspective to enhance capital ratios. Regarding the pioneering future co-growth project, assuming approximately KRW 80 trillion of productive and inclusive financial support across five years, we expect about 40 bps annual impact on our capital ratios. We believe this impact is fully manageable by strengthening the RWA management process, quality enhancement of investment and loan portfolios, and utilizing the lending capacity secured from the rationalization of capital regulations. By executing the future co-growth project in a balanced manner within the scope of rigorous capital management, we will work to achieve harmony between capital stability and mid-long-term growth. I will move on to Page 7 on the group's sustainable ROE enhancement strategy. As repeatedly mentioned, for this year, based on the group's complete portfolio, we will focus on cementing the competitiveness of each subsidiary within their respective sectors.
The three pillars: Bank, securities, and insurance will start to generate synergy in earnest, which should boost nonbank profit contribution to about 20%. With the continuous capital injection plan, the securities firm will elevate its position in the industry. For insurance, given the business environment, we will prioritize financial stability and focus on laying the foundation for mid- long-term profit. The asset management arm will launch a productive finance-related fund and with the transfer of LDI insurance funds should realize economies of scale and climb the industry rankings. Also on top of traditional methods such as cross-selling and client referral, we are planning to implement diverse synergy strategies such as CIB joint underwriting, wealth management integrated centers, and strengthening LDI. In addition, by transforming into productive finance centered around advanced strategic industries, we aim to secure growth momentum.
We will move beyond the traditional interest income-driven profit structure and invest in innovative companies to share its profits. Also, we will move the pillar of financial support from household and real estate to corporate finance in order to contribute to the recovery of dynamism in the Korean economy. Also with large-scale transformation into an AI-based management system, corporate loans, wealth management, customer consultations, internal control, and other key areas will experience elevated productivity, thereby structurally improving ROE and achieving quality growth at the same time. Lastly, I'll go over the shareholder return policy on Page 8. Traditionally, Woori Financial Group has shown a high dividend payout and a competitive dividend yield, making us one of the leading financial dividend stocks. We will solidify our competitiveness as a dividend stock while diversifying shareholder return methods to lead the expansion of the investor base in the Korea's capital market.
First, we will introduce nontaxable dividends from year-end 2025. The related resources as of year-end 2025 are around KRW 6.3 trillion, which we expect to use across five years. The nontaxable dividends will boost dividend payout by around six percentage points. For retail individual shareholders, the real impact will be an 18.2% increase of dividend income. In both 2024 and 2025, dividend payout was at least 25% and total dividend payment increased by more than 10%. As such, the company effectively satisfies high dividend stock requirements pursuant to the act and restriction on special cases concerning taxation. We will continue to increase EPS every year by at least 10%. The share buyback and cancellation policy has been gradually expanding since its first introduction in 2023. However, it was still about mid-4% of profits. We fully understand that the impact of treasury stock policy is maximized when the PBR is below 1x.
Therefore, we will increase the buyback and cancellation portion to about 10% in a speedy manner. Today, we announced share buyback and cancellation of KRW 200 billion, which is a 33.3% increase from the previous year. If we expect the CET1 ratio to exceed 13% this year, we are planning to implement additional buyback and cancellation in the second half. In the future, if the CET1 is maintained stably at over 13.2%, we will review exercising a balanced shareholder buyback and cancellation program twice a year once each half. To ensure that we remain a flagship financial dividend stock, we will stay one step ahead of competitors and implement diverse measures to strengthen shareholder return sincerely. Lastly, in 2025, we acquired an insurance company to complete our nonbank portfolio to become a comprehensive financial group. Company-wide efforts, including all of our employees have led to the highest improvement of the CET1 ratio in the industry to reach almost 13%.
Thanks to these achievements, we have received strong interest from investors from home and abroad, and have been positively recognized by the market. Our share prices outperformed the KOSPI, and market cap has more than doubled since early 2025. In 2026, Woori Financial Group will move beyond the period of management and maintenance to take a leap forward to enter a period of great transformation. While combining core competitiveness and group synergy to advance as a complete comprehensive financial group, we will leverage our key strength, which is corporate finance to deliver the great transformation towards productive finance. In addition, we will continue to communicate with the market and carry on differentiated efforts as a leading financial dividend stock. This will conclude the earnings presentation of Woori Financial Group for 2025. Thank you.
Yes. Thank you very much. Now we will start the Q&A session. So today, the first question will come from Hanwha Investment Securities, Kim Do Ha.
分析師問答
So for 2026, for this year in terms of your margin and growth in terms of your profits, if you could provide some guidance on that and in terms of the overall direction and why you believe that this would be possible, that would be appreciated. And in addition, for the dividend, I do believe it's larger than market expectations. And I do think that the competitive outlook is also good. However, I don't think I can fully understand your dividend policy. So going forward, with regards to your corporate value up plan. If you look at Page 8 of the presentation, right now for 2026, is the target to increase your DPS by 10%. If that is so, then in terms of your quarterly dividend for each quarter and also in terms of the year-end dividend, what would be the breakdown? Would it be similar to what you have done to date? Or do you actually believe that there will be any changes? If you could explain that in more detail, that would be appreciated also.
Yes. Thank you for your question. And if you give us a minute, then we will try to prepare your answer.
Yes, this is Kwak Seong-Min, the CFO, and I would like to address your question. Looking ahead to 2025, there has been a significant improvement in our CET1 ratio, which has led us to adopt a stance of moderate growth. Additionally, we have observed a slowdown in household debt growth as per government policy, with only a 0.2% increase in Korean won loans. For 2026, we aim to maintain risk-weighted assets for Korean won loans at around 0.5%. Our business plan anticipates approximately 5% growth, factoring in nominal GDP growth and inclusive financing, while our 2024 plans projected around 3%. On the corporate side, the growth of corporate loans has been slower due to asset rebalancing, which has also affected retail growth. Therefore, for 2026, we aim to secure a total asset growth of 5% year-over-year. Regarding our margins, we expect to see an increase in NIM over four consecutive quarters, totaling around 2 basis points for the full year.
Our research institute forecasts a rate cut by the Bank of Korea (BOK) this year, which we consider a foundational assumption. We anticipate slightly weaker margins in 2026 based on our business plan. However, with market rates staying high, we believe NIM could maintain its current level if rates do not decline. Our efforts to enhance profitability through core deposit growth may even lead to slight upside potential beyond our current projections. We have focused significantly on noninterest income, which has experienced considerable growth. We foresee similar growth this year, estimating around 20%, particularly due to the acquisition of an insurance company. With a recently obtained license for our securities business, expected contributions from the nonbank side will also rise, with a projected 18% increase in noninterest income for 2026. For SG&A expenses in 2025, we've seen increases primarily due to the insurance acquisition and the boosted IT investments associated with the securities firm.
While we do not expect a dramatic decrease annually, we will manage other costs prudently, including branch numbers and headcount, aligning with both our current business plan and long-term strategies. Our intention is to achieve a CI ratio of 40%, and we will pursue initiatives to realize this by 2026. As for credit costs in 2026, our target is to maintain a normalized credit cost ratio of around 40%, which aligns with a decrease of approximately KRW 420 billion or 20% overall. Regarding dividends, in 2024 and 2025, we have increased total dividends by 10% annually. We aim to sustain a similar target for dividends going forward, including a focus on achieving a 10% DPS. To reach this, a 10% increase in net income would facilitate that target, making it feasible. Our dividend policy will remain consistent, with equal distributions across the first three quarters and a year-end dividend determined by our capital ratio.
For 2026, we are estimating a year-end dividend of KRW 1,361 per share, based on a CET1 ratio comfortably exceeding 13%. Our goal remains to maintain our existing approach to dividends, ensuring we meet market commitments while addressing customer needs regarding our capital ratios. We will uphold this stance through 2026.
And we'll move on to the next question from KIS, Baek Doosan.
I am Baek Doosan from KIS, and I also have a question regarding dividends. You talked about the nontaxable dividends and the relevant resources amount to KRW 6.3 trillion. Last year, we brought in around KRW 3 trillion. So I would like to know how the size of the resources increased.
Thank you for the question. I'm Kwak Seong-Min, CFO. And let me answer your question. In 2025, in our corporate value up plan at the shareholder meeting in 2025 March, we transferred KRW 3 trillion of capital surplus to retained earnings. So that is all publicly available information. But lesser-known is that is another aspect of the shareholder meeting agenda. So four years ago, in 2021, we transferred KRW 4 trillion from capital surplus to retained earnings. And the reason we did that back then was because in 2019, the financial group was relaunched. And according to the IFRS accounting standards, we relaunched the financial group with share exchange. And so the separate and consolidated financial statements need to be integrated. And unlike the competitors, the capital structure of the separate and consolidated financial structure was there. But in reality, there was no reason for it to be different.
It was only because of accounting standards. And as you know, the resources will come from the separate financial statements according to commercial code, not the consolidated financial statements. So in conclusion, we had an unreasonable situation at that time where we needed to normalize the situation. So in 2021, KRW 4 trillion of capital surplus was transferred to retained earnings, and then we increased the payable resources. And then from three years ago, since we have been making efforts to increase the dividends. So out of the KRW 4 trillion, KRW 700 billion we already used. So we have about KRW 3.3 trillion as outstanding balance. So to make sure we satisfy all of the legal requirements and the tax requirements to ensure that we do not have any issues that pop up in the future, this we received legal interpretation and tax interpretation that we can use this resource for nontaxable dividends.
So out of the KRW 4 trillion, we still have KRW 3.3 trillion. And then in 2025 March, we put in KRW 3 trillion. So total KRW 6.3 trillion is the available resources. So after KRW 5,580 dividends, we believe that around KRW 5.7 trillion will remain. In 2026, we will be using the KRW 5.7 trillion for the quarterly dividends and all of the dividends. So it will all be nontaxable. So in 2025, the nontaxable dividend was only for the year-end dividend. So the impact would have been relatively small. But from 2026 onwards, the quarterly dividend will also be nontaxable. So the actual impact will increase in 2026.
Yes. The next question will come from Daishin Securities, Park Hye-jin.
This is Park Hye-jin from Daishin Securities. I would like to ask about the KRW 189 billion nonoperating loss and request a breakdown of that information. Additionally, in your corporate value enhancement plan, I believe that the contribution from the nonbank side is around 20%. What is your outlook for this? It appears that the brokerage side is experiencing a more favorable environment, which could lead to an acceleration in the realization of your mid- to long-term plans. If you could discuss the overall business outlook, including your nonbanking business, I would appreciate it.
Yes. Thank you for your question. If you give us some time, we will answer.
Yes, regarding nonoperating income and the overall situation, I believe this has been mentioned before. In terms of the bad bank, we contributed KRW 50 billion. Additionally, with respect to the LTV fine, we have approximately KRW 52 billion as a deduction. This amount is fully provisioned for, and we have allocated funds for other provisions as well. We have taken necessary measures so it is entirely accounted for. We understand that our competitors might have different legal interpretations, but we have chosen to fully provision rather than recognize partially. If we consider their viewpoints on these fines and how the litigation unfolds, we see the potential for a reversal, which might create some upside for us. On the securities front, regarding any rights offerings, that topic has been raised, and there have been media reports. Currently, our total capital base is about KRW 2.2 trillion.
Unlike our insurance business strategy, we aim to grow our securities business independently. In the mid- to long term, to become a major investment bank and a significant player in securities, we anticipate necessary capital increases. Considering licensing periods and other factors, we believe this is essential. This matter is currently under review. Looking at the company overall, we are planning to develop a mid- to long-term capital management strategy and will gradually implement any needed increases. We will outline a business plan for this purpose and work towards achieving it.
We will move on to the next question from NH Investment Securities, Jung Jun-Sup.
I am Jung Jun-Sup Jun from NH Securities. I have a question regarding CET1 ratio, and it improved significantly this year. In 2026, you are working to achieve 13% ahead of schedule. So you talked about the shareholder buyback, and I think it's up to June. So I think you are looking to conduct the share buyback program in the second half. When do you think that will actually happen? When do you think you can actually achieve 13%? If you have the guidance for CET1 in the second half, I think I'll get a better idea of the size of the share buyback. And can you also give us more color on the different strategies that you have? For example, you'll be disposing of the marketable securities? Or are there plans to have a paid-in capital increase and so on?
Thank you for the question. And just give us one minute while we prepare the answer.
I am CFO, Kwak Seong-Min. As of the end of 2025, our CET1 ratio was reported at 12.9%, which are preliminary figures. We are nearing 13% currently. For 2026, although I expressed some caution earlier, we believe we can confidently reach 13%. We expect to achieve this in the first half, and our financial business plan reflects that assumption. The government is enhancing the institutional framework to promote productive finance, which should support our efforts. Additionally, we are working on internal initiatives and developing plans for 2026. While it's too early to disclose those plans, we are making various efforts, including the disposal of idle real estate under our corporate value enhancement plan, to ensure an early attainment of 13%. If all goes well, we are optimistic about surpassing 13% in the first half. This is why the KRW 200 billion we announced pertains to a four-month trust contract running from February to June, during which purchases will occur, and we plan to cancel those shares by the end of June. Further details can be found in our disclosures. If we anticipate the CET1 to exceed 13%, we can consider additional shareholder buybacks in the second half. We have a realistic strategy in place, and during the Q1 or first half earnings call, we hope to share positive updates on this matter.
So the next question will be from HSBC, Won Jaewoong.
Thank you for your strong performance amidst a challenging environment. And with regards to TSR, also, it does seem that you have given a lot of thought about this and have come up with a detailed plan. So thank you for that. However, in terms of the news reports, because it's already out and also because there's a question, this is a question that inevitably, I think I have to ask. If you look at the news reports; on the security side, right now, there is talk about a KRW 1 trillion capital increase each and every year so that you would be able to fill in your capital base. So in terms of the CET1 ratio, you said that it would not have an impact there. However, if you do make a KRW 1 trillion contribution in terms of the CET1 ratio targets that you have, is it possible to do so without impacting your CET1? So how should we look at these two numbers because I think that we would need a bit more comfort about this issue?
And second, I think that if you look at ABL, if you look at their core capital ratio, maybe it's around 30% or 40% right now. And in the case of Tongyang also, it's being maintained at around 53%. So for Tier 1, if this is something that is introduced, then I do think that you will actually have to take more additional action. So this also would it not have an impact on your CET1 ratio? If you could elaborate a bit more about that, that would also be appreciated.
Yes, thank you very much. And while we prepare, if you could just wait for a minute.
Yes. On the security side and the capital increases, I do understand that there was an article by a press outlet. So we did talk to them about that. But I do think that it was over exaggerated somewhat. So in terms of the article in itself, I think that you should just understand it's a news article. And in terms of our organic growth, we want to grow our overall securities firm. And according to that strategy, on a step-by-step basis, of course, there will be a capital increase. In terms of that, that's the principle that we have. So from this year, whether it will start this year or whether it will start next year is something that we're still reviewing. Once we have made a determination and according to the size, then it could be subject to disclosure, maybe not. But we will fluidly communicate with the market so the market can recognize the situation and be aware of it. And as mentioned before, right now, it's not only being designated as a mega IB because, of course, that would be something that we would be pursuing under the process that we want.
There is a preliminary license that is required. There's a two-year grace period. So as mentioned before, it's KRW 1.2 trillion. So even if it goes to KRW 2 trillion, KRW 3 trillion, going step by step, there are time requirements that you need to fulfill. So according to that and according to the government's overall rules, we need to follow that process. So it's not a short-term situation. It's more of a midterm type of situation and the capital increases cannot help but take place in a gradual manner because of that. And therefore, once the capital increases are decided, then through our IR department or other outlets, we will try to communicate as much as possible. And I did mention that it would not hit the CET1 ratio. And what that's making is that the action in itself does not have an impact on our CET1 ratio at the holding company level. However, if the securities company does engage in S&T businesses or investment banking businesses, as they utilize that capital, of course, there will be asset growth that will take place.
And because the asset growth would increase our RWA, we do think that the impact of that from the capital increase that they do enjoy, we do think that they would be able to engage in activities that would offset the increase in the RWA from the profitability that they enjoy from doing so. So at the end of the day, we do think that there would not be an impact on the CET1 ratio in itself. And I think that if they are able to generate an ROE, then that should not be a situation that would be negative at the group level. And on the insurance side, it's not the K-ICS ratio, but there is going to be a core capital ratio or maybe Tier 1 ratio that's going to be introduced. In terms of the timing of that, it's not in '26, but it's 2027. And at the government level also, they are trying to look into avenues that give maybe a brief period until 2030, so that it would not impact the insurance company's operations.
So because it's not a disclose factor yet, I can't go into the details because the K-ICS ratio in itself is official while other numbers are not. But I think that internally, if you look at the situation, we are preparing for this. And at the insurance company level also, of course, from 2027, they will be managing their core capital ratio. So for the 50% ratio in itself, we do think that as of now, as of the end of '25, if we do our own calculations, we actually are comfortably above that in our insurance businesses. So in terms of this core capital ratio, as of now, I don't think that there would be any request that we would have to make for an exemption or a delay. Even with what we have right now in terms of the operations, both companies, we do believe we'll be able to maintain a ratio that would be above the required amount.
Thank you for that. We do not have any further questions at the moment. For this quarter, we have also received questions on our website, especially regarding shareholder return. But I think our presentation today regarding our corporate value enhancement plan and the Q&A session have supplied sufficient information on that topic. So we will not go through the individual questions right now. If there are no further questions, we will end the Q&A session here. This will conclude the annual earnings call for 2025 of Woori Financial Group. Thank you for your time today.