Woori Card has shown significant improvement in its asset soundness indicators following strategic management of bad debts at the end of last year. According to the financial sector on March 5, 2025, Woori Card reported a delinquency rate of 1.44%, which marks a 0.22 percentage point increase from the previous year’s 1.22%. To counteract rising delinquency rates, the company focused on cleaning up bad assets, which played a key role in their defensive measures.
During this period of adjustment, Woori Card faced increased write-offs, amounting to 496.2 billion won, reflecting 11.2% growth from the previous year. Meanwhile, the delinquency rate had surged throughout the year; it was recorded at 1.46% in the first quarter, climbing to 1.73% and then to 1.78% by the third quarter. By the end of the fourth quarter, Woori Card managed to reduce the rate down to 1.22%, showing effectiveness in their asset management efforts.
They also reported stability at the fourth quarter's end with their Non-Performing Loans (NPL) ratio dropping from 1.17% to 1.09%, which is just slightly up from 0.99% at the end of the previous year. Despite the increase, Woori Card's strategy of focusing on high-risk assets proved beneficial.
The distribution of card loans within Woori Card’s total credit card assets stood at 31.6% at the end of last year, which suggests vulnerability due to their high reliance on credit loans. For comparison, Shinhan Card and KB Kookmin Card's ratios were at 19.0% and 24.78%, respectively. This is significant as the company sought to manage its assets more effectively, counterbalancing high-risk portfolios.
One of the main components of their strategy involved addressing the estimated losses linked to credit card assets, which are heavily represented within the NPL segment. The anticipated loss from these assets rose sharply by 53% from 1 trillion won at the end of 2023 to approximately 1.53 trillion won by mid-last year. Nonetheless, through liquidation efforts by the fourth quarter, this amount was successfully reduced to 560 billion won.
This restructuring and cleanup resulted in increased loss provisions for the company; the annual loan loss provisions surged from 197.5 billion won in 2020, rising to 443.7 billion won by 2023. Yet, the growth of operational profits offset the shrinking margins, with the net profit for Woori Card at 148 billion won last year— translating to a 32.8% increase compared to previous results.
Woori Card’s significant contribution to the overall financial performance of Woori Financial Group was noteworthy, especially considering their relatively small asset proportion of about 2% within the group. While other subsidiaries like Woori Asset Trust and Woori Asset Management only managed to achieve net profits of 18 billion won and 118 billion won, respectively, Woori Card led with its strong profit margins.
Looking forward, Woori Card aims to reinforce its risk management through careful monitoring and increased asset management centered around prime assets. An official from Woori Card commented on their plans, stating, "Last year, the economic downturn and domestic economic uncertainty led to slight increases in the NPL ratio and delinquency rate compared to the end of 2023. We are focused on increasing prime assets and managing risks with precision to establish analytics-driven management systems moving forward."
This commitment to asset quality and diligent risk management will be pivotal as Woori Card navigates the post-pandemic economic recovery and seeks to establish stability within its financial indicators for the years to come.