WF

• Overall Profitability & Structural Improvement

  • Q2 2026 net income reached 1.0046 trillion won, up 66% QOQ, returning to the 1 trillion won quarterly level; 1H 2026 year-to-date net income hit 1.609 trillion won, up 3.7% YOY
  • Excluding one-off items (including actuarial assumption changes at the insurance subsidiary), common equity ROE was 10.3%, with a reported ROE of 9.0%
  • Half-year net operating revenue grew 6.0% YOY to a record 5.7227 trillion won, with both interest and non-interest income hitting all-time highs; Q2 net operating revenue grew 7.5% QOQ to 2.965 trillion won
  • Non-interest income grew 20% YOY, becoming the primary driver of earnings growth, with quarterly non-interest income exceeding 700 billion won for the first time, driven by wealth management and CIB fee growth

• Cost Management

  • 1H 2026 SG&A expenses totaled 2.6328 trillion won, holding the cost-to-income ratio steady at 42.8% YOY despite structural cost increases from insurance consolidation, securities infrastructure buildout, and higher education tax
  • Q2 2026 SG&A fell 15% QOQ; excluding one-off voluntary retirement expenses, SG&A still declined 2.4% QOQ, continuing a downward trend
  • The group is investing in AI transformation and securities infrastructure while pursuing workforce and channel optimization to hit a medium-to-long-term cost-to-income target of the low 40% range

• Credit Cost & Risk Management

  • 1H 2026 group credit costs totaled 966.1 billion won, up slightly YOY, but Q2 2026 credit costs fell 16.7% QOQ to 439.2 billion won, continuing a downward trend
  • Excluding one-off factors, 1H 2026 recurring credit cost ratio was 39 bps, stable below last year's level; 85% of corporate loans are prime-rated as of end-June 2026, with total loan loss and regulatory reserves equal to ~1.5% of total loans, providing sufficient loss-absorbing capacity

• Capital & Shareholder Returns

  • Preliminary CET1 ratio reached 13.71% as of end-June 2026, up 11 bps QOQ, one of the highest in the industry despite high exchange rates and strong loan growth
  • The Board approved a 221 won per share non-taxable Q2 cash dividend, and an additional 150 billion won share buyback and cancellation for H2 2026, bringing 2026 total buybacks to 350 billion won (the largest in company history, more than double 2025's 150 billion won program)
  • The group has met its prior commitments: CET1 exceeded 13% and total share buyback cancellation will exceed 10% this year; management is considering making semi-annual buybacks a regular program

• Strategic Initiatives

  • The group expanded its productive and inclusive finance commitment by an additional 10 trillion won, bringing total 5-year future shared growth projects to 90 trillion won, with 9.4 trillion won earmarked for productive finance and 600 billion won for inclusive finance

• Full-year 2026 guidance is maintained to reduce total credit costs by 15% YOY and bring the annual credit cost ratio to the low 40 bps range
• The CET1 ratio is targeted to be maintained at the mid-to-high 13% range in the medium term, supported by policy changes that lower RWA burdens for productive finance
• Management expects to meet the 50% total shareholder return (TSR) target for 2026 on a non-taxable dividend basis, with clearer visibility to be provided with Q3 2026 earnings
• The group targets to gradually achieve stable quarterly net income of over 1 trillion won, with a medium-term goal of reaching 1.2 trillion won per quarter
• The medium-to-long-term cost-to-income ratio target of the low 40% range is maintained
• Future early retirement programs (if any) are expected to continue to be recognized in Q1 for the near term, with longer-term timing subject to mid-long-term workforce and branch optimization plans

Core Banking Segment

Net interest income for the first half of 2026 grew 3.2% YOY, supported by 4% high growth in corporate finance from expanded productive finance and ALM optimization that lifted net interest margin (NIM) by 7 bps YOY. Q2 2026 NIM held steady at 1.51% QOQ. As of end-June 2026, total loans reached 344 trillion won, growing 1.9%: corporate loans grew 2.8% driven by large corporates and high-quality SMEs in advanced strategic industries, while household loans are managed within target ranges per government policy.

Non-Bank Segments (Insurance, Securities, Asset Management, Credit Card)

Non-bank contribution to group net income increased from 6.9% YOY to 22.3% in 1H 2026, more than tripling year-over-year. The group completed a 1 trillion won capital injection into its securities subsidiary in May 2026, and received approval to make Dongyang Life a wholly owned subsidiary. Non-interest income across all non-bank and banking segments hit a record 1,263.1 billion won for 1H 2026 and 628.9 billion won for Q2 2026, representing 18.6% of total net operating revenue. Fee and commission income grew 23.7% YOY to 1,278.8 billion won for 1H 2026, with Q2 2026 fee income exceeding 700 billion won for the first time ever, driven by wealth management and securities investment banking growth.

• Rising market interest rates and exchange rate volatility create funding cost pressure and potential trading/valuation losses
• July policy rate hikes have increased the importance of risk management, requiring closer monitoring of vulnerable borrowers to preserve asset quality
• Interest rate competition for productive finance could pressure margins, though management notes portfolio rebalancing and policy guarantees mitigate this concern
• External macro risks including persistent inflationary pressure from Middle East geopolitical tensions and stock market volatility impact CET1 ratio stability
• The securities subsidiary currently lacks a large retail sales network and key licenses (e.g., derivatives) relative to competitors, limiting near-term retail profitability
• The recently acquired Dongyang Life requires capital adequacy improvements and channel restructuring before it can contribute meaningfully to group earnings

Q: What are your mid-to-long-term plans to grow the securities subsidiary's retail brokerage business, and how will the 1 trillion won capital increase be used? When will total capital reach 3 trillion won?

A: The securities subsidiary started from zero retail base in 2024, and has already delivered 10 billion won YOY net revenue growth to 26.6 billion won. Management will continue opening new complex branches in key areas (Gangnam, Yeouido, Gwangju) to grow customer count and AUM, and targets to secure a derivatives license by 2027 to enable synergies with S&T businesses. 800 billion won of the capital increase has already been allocated to the high-growth IB business, which has seen 38 billion won operating revenue growth to 45 billion won. Capital increases will continue phase-by-phase to improve ROE, with growing the securities business as a group priority.

Q: What is the impact of the Jumam Group workout exposure on NPLs and provisioning, and what is your 2026 full-year credit cost ratio target?

A: The group has 130 billion won in total exposure to six Jumam Group workout applicants, with most of the bank's exposure secured by first-lien real estate collateral. The group already provisioned 44 billion won for this exposure in Q2 2026, which was the main driver of Q2 NPL increases, with no large unexpected write-backs in the quarter. Management maintains the full-year 2026 target of a low 40 bps credit cost ratio and 15% YOY reduction in total credit costs, achieved via selective lending focused on productive advanced industries to control asset quality.

Q: Why has NIM remained stable amid rising rates and expanded productive/inclusive finance? Is there margin pressure from these initiatives?

A: NIM held steady at 1.51% QOQ in Q2 2026 because management pre-emptively increased longer-term deposits in April-May ahead of expected policy rate hikes, reducing shorter-term deposits by 15 trillion won to delay funding cost increases. A larger share of Woori's loans are linked to CD rates, so rising market rates pass through to loan income faster than funding costs, creating a positive structural impact on NIM. Management notes productive finance expansion is primarily portfolio rebalancing (shifting from lower-margin existing assets to advanced industries), not just adding low-interest assets; many productive finance loans have policy guarantees that lower credit risk and capital burdens, and the business creates synergies with fee-based services that support overall profitability.

Q: What is the trajectory for hitting the 50% TSR target, and will it be achieved this year?

A: 2026 will deliver 221 won equal quarterly dividends, meeting the prior commitment of 10%+ DPS growth, with total share buybacks reaching 350 billion won this year, pushing cumulative buyback cancellation over 10%. On a non-taxable dividend basis (a unique advantage for Woori among peers), management expects TSR will exceed the 50% target in 2026, though final figures depend on year-end net income and CET1 performance. Clearer guidance will be provided with Q3 2026 earnings.