FINANCIAL HEALTH AND RISK MANAGEMENT OF WOORI BANK BANGLADESH

Abstract

Woori Bank is a part of the Woori Financial Group, The bank’s headquartered in Seoul, South Korea. It was establish in 1899. Woori Bank is the first South Korean bank to support non-Internet Explorer web browsers for online banking in Korea. Woori Bank has operations in Bangladesh and registered as “Woori Bank Bangladesh”. I experienced Woori bank’s culture, work environment only for 3 months as an intern. In this report I try to figure out the financial health and risks of “Woori bank Bangladesh”. Financial ratio analysis is one of the most popular tools of measuring financial health of any organization. I also use some ratios to come out with a conclusion of Woori bank Bangladesh’s financial health. In this report, I use profitability, liquidity, efficiency, financial leverage and asset turnover ratios as my measurement tools. And I also use CAMLES rating system. CAMELS is an international rating system that used to rate financial institutions based of capital adequacy, assets, managements, earnings, liquidity and sensitivity. If we interpret Woori bank’s financial health based on profitability we can say the bank is in positive direction. But the bank’s financial health is not constant. Not only in profitability but also in liquidity and financial leverage, the bank’s performance is same. In 2020 and 2021 COVID 19 could a cause of this misbalance situation but before the pandemic the health was also inconstant.

From financial ratios exploration and CAMELS rating we can say the financial health of Woori bank Bangladesh is in good position but there is huge space for improvement. The asset and liability maturity has a mismatch in Woori bank’s report. The bank has rate sensitive assets with maturity up to 10 years. But rate sensitive liabilities maturity not more than 5 years. And in short run the bank using more short term liabilities than short term assets. With 5 years gap ratio calculation, it is identified that 4 years gap ratio is negative and only 1 year’s result is positive. A gap ratio, which will close to zero is always better. Woori bank Bangladesh needs more refinancing. But the fluctuation of interest rate is a cause of this misbalance. For Woori bank Bangladesh, investment and financing decisions come from the head office. Woori bank has investment for long run but in short run the bank may face liquidity risk. And for refinancing interest rate risk also present for the bank. Woori bank is concern about Credit Risk. The bank has CRM department. And the team trying to have safe credit system. Although all the banks now a days depends on technology based banking but as Woori bank is a multinational bank, they are mostly dependent on technology and IT department. Day by day cybercrime is spreading like air, so Woori bank has cyber risk. That’s why Woori bank Global is planning for more powerful IT department. And I think Woori Bank Bangladesh should be more careful more managing the common risks that the local banks facing in Bangladesh. In this short time, I may not be able to have a proper interpretation of Woori Bank Bangladesh financial health and all the risks that a bank faces, so more research can lead an impeccable outcome