Woori Financial Group said Monday that its third-quarter net profit dropped 1.13 percent on-year to 479.8 billion won ($425 million), but was above market expectations amid coronavirus woes.

Local brokerages had projected an average 468.7 billion won for Woori’s third-quarter net profit.

The figure was calculated based on the respective sizes of the stakes Woori holds in its units. Under the premise that Woori holds 100 percent stake in all of its units, the figure would amount to 521.32 billion won.

While its net profit for the July-September period fell due to reduced gains from equity ties with affiliates compared to a year earlier. Its operating profit gained 2.4 percent to 674.9 billion won in the same period.

Sales dropped 41.5 percent on-year to 4.27 trillion won in the cited period.

On-quarter, the banking group’s net profit more than tripled, increasing by 238 percent in the July-September period despite the ongoing coronavirus woes. Woori said it was bolstered by its efforts to improve its revenue model and successful mergers and acquisitions following its rebranding into a holding entity last year.

The firm’s second-quarter net profit was hit by the COVID-19 pandemic and came to 142 billion won at the time. Some 160 billion won it had to set aside to deal with the misselling of private equity funds earlier in the year had affected its performance as well.

It maintained a stable level of asset quality, with its nonperforming loan ratio --the ratio of nonperforming loans in the firm’s portfolio to the outstanding loans it holds -- coming at 0.4 percent. The ratio is at the industry average at the moment, with KB Financial Group and Hana Financial Group’s corresponding figures standing at 0.41 percent.

Its net interest margin only declined 0.01 percentage point on-quarter to 1.57 percent in the same period, with its BIS ratio climbing 1.5 percentage point to 14.2 percent from the end of the second quarter. The bank cited early adoption of the new Basel 3 reform behind the stability.

By subsidiary, flagship banking unit Woori Bank’s third-quarter net profit jumped 175 percent on-quarter to 480.7 billion won, boosted by its non-interest income of 199 billion won.

Woori Financial Group’s performance and portfolio is projected to be further strengthened by its decision last week to buy a controlling stake in nonbanking lender Aju Capital for 572.4 billion won. It would purchase it from private equity firm Well to Sea Investment. Aju Capital is the sixth-largest installment lender here by total assets.

“As uncertainties stemming from the coronavirus continues to linger in the financial sector, Woori will continue to focus on upgrading its fundamentals and bolstering cooperation among different parts of the portfolio,” a Woori Financial official said.

By Jung Min-kyung (mkjung@heraldcorp.com)