S&P Global Ratings expects Korea-based Woori Bank to gradually bounce back from reputational damage caused by internal control issues and improperly extended loans.

The bank continues to have a strong franchise and customer base, which should provide stability, S&P said in a Friday release.

Woori Bank and parent Woori Financial Group (KRX:316140) are carrying out measures to boost governance and oversight, including an ethics management office and stricter lending rules.

The lender's preliminary 2024 results point to stable operations and greater profitability, with net income rising 21.3% to 3 trillion won, the rating agency said.

S&P expects the bank's profitability to modestly decline due to lower interest rates and tighter net interest margins, but moderate loan growth should anchor its capital levels.

The rating agency does not expect growth to be excessive despite the group's plan to expand operations, which should allow for tapered increases in shareholders' returns amid an improved common equity tier 1 capital ratio.