이 기사는 2022년 04월 15일 08:04 thebell 에 표출된 기사입니다.

South Korea’s Woori Financial Group has yet to achieve tangible results in its overseas business amid efforts to diversify the business portfolio.

Woori Financial Group’s overseas business is led by its flagship unit Woori Bank, which accounts for more than 90% of the group’s overseas business networks. Woori Bank headquarters directly opened branches and offices abroad and launched overseas subsidiaries in Europe, North America, South America and Southeast Asia.

The group’s non-banking affiliates, however, have few overseas business networks. Woori Card and Woori Asset Management are expanding their overseas networks, but they are still smaller in size than Woori Bank’s.

Among non-banking affiliates, Woori Card is the most active in overseas business. The card company is expanding its sales network through its Myanmar subsidiary Tutu Finance-WCI Myanmar. Woori Asset Management has one overseas office.

Woori Card began its overseas business in 2016. The company received approval from the Myanmar government to begin operations as a micro finance institute in October 2016 and established Tutu Finance Myanmar in December.

Woori Card continued to inject money into the local subsidiary through loans and capital increase to help it secure a profitable business model in the early stage of the business there. Its Myanmar subsidiary’s capital stock increased from 8.5 billion won ($6.94 million) in 2018 to 19.7 billion won in 2019 and has been maintained at the level until now.

The total assets, which stood at 12.6 billion won in 2018, have continued to grow to reach 29.7 billion won in 2019 and 34.7 billion won in 2020.

Stalled growth

Woori Card’s overseas business showed stalled growth last year. Its total assets decreased to 30.4 billion won in 2021 along with total liabilities and equity.

The decline in size resulted in poor profitability. The Myanmar subsidiary’s revenue increased from 1.7 billion won in 2018 to 5.9 billion won in 2019 and 9.6 billion won in 2020. Last year, its revenue decreased to 7.9 billion won.

The local subsidiary recorded a net loss of 400 million won in 2018 and swung to a net profit of 2.7 billion won in 2019. Its net profit continued to grow to 3.6 billion won in 2020, but plummeted to 1.2 billion won in 2021.

Its net profit margin, which peaked at 45.9% in 2019, fell to 37.81% in 2020 and 15.74% in 2021. Its return on assets rose from 9.15% in 2019 to 10.4% in 2020, but fell to 4.08% in 2021. The return on equity increased from 12.21% to 13.51%, but plunged to 5.42% in the same period. (Reporting by Seul-bong Go)