Woori Bank 2013 annual report
Leading beyond 115 years
Work as One, Smile for All Contents
Work as one
Woori Bank's 115th Anniversary
Message from the CEO
Woori Financial Group’s Holding Structure
Financial Highlights
Board of Directors & Management
Corporate Governance
News Highlights
Woori Bank’s Awards 2013
smile for All
Risk Management
Ethical Management
Consumer Protection
-Cham(responsible) Finance
Smart Banking
Corporate Banking
SME Banking
Institutional Banking
Investment Banking
Consumer Banking
Real Estate Finance
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032
034
042
044
046
050
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058
062
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Pension & Trust Business
Wealth Management(WM)
Global Business
International Trade Business
Financial Market Business
Social Contribution Activities
Woori Smile Microcredit
Employee Satisfaction
Financial Review
Management’s Discussion and Analysis
Woori Finance Holdings Co., Ltd. and
Subsidiaries Consolidated Statements of Financial Position
Independent Auditors’ Report
Investor Information
Organization
Global Network
With 115 years of history and tradition,
Woori Bank is working together to become a leader as
‘a safe bank’ by accelerating asset clean-up based on
thorough risk management & promoting soundness originated by
the compliance-driven mindset of employees,
‘a vibrant bank’ by giving fast, convenient, and up-to-date
customer oriented services, ‘a unifying bank’ by
joining employees forces with leadership & integrity
for customer satisfaction, ‘a pioneering bank’ by providing
customized global banking services beyond boundaries,
and ‘a sharing bank’ by promoting ‘warm-heartedness
in the society’ for everlasting sustainability.
Woori Bank has shared every moment with our customers for 115 years.
Despite numerous difficulties and challenges,
Woori Bank stood firm and secure for over a century.
Because customers have always been supporting us,
recognizing the genuine value of our bank,
running and sharing every moment together,
Woori Bank will always be with you
side-by-side serving you for the next 100 years.
Woori Bankhas been with our customersfor 115 years199719601956194519101899 sInCe 1899
“115 years have passed, generating values every year and overcoming daily challenges.”
Starting from “Daehan Cheonil Bank”(meaning ‘number one bank under the sky’) to
Woori Bank(meaning ‘our bank’) as of now, our bank has been the leading bank in the
Korean banking sector for over 115 years, contributing to the development of Korean
history and finance. Woori Bank will continue to take the lead in developing Korea’s
wealth and economy for the next centuries to come.
20132012200320011999 “Daehan Cheonil Bank” is founded as
Korea’s first bank in the modern era.
(The Commercial Bank of Korea)
Establishment of Korea’s first bank head office,
“Gwangtong-gwan” (Currently Jongno Branch)
Daehan Cheonil Bank renamed
“Joseon Sangeup Bank”
(The Commercial Bank of Korea).
k
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Joseon Trust Company and
The Commercial & Industrial Bank of Korea merged
to launch “Korea Industrial Bank”(Hanil Bank)
Becomes the first bank to be listed on
the Korean Stock Exchange
Establishment of
“Joseon Trust Company“
(Hanil Bank)
Joseon Sangeup Bank renamed
“The Commercial Bank of Korea”
Korea Industrial Bank renamed
“Hanil Bank”
“Peace Bank of Korea” launched
1899
1909
1910
1911
1919
1932
1945
1950
1954
1956
1960
1988
1992
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1997
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Korea liberated from Japan’s
colonial rule
The Banking Act enacted,
the Korean War(North vs. South) broke out
Seoul Olympics held
Real-name financial (transaction)
system adopted
Korea applies to the IMF for
a rescue package during the
financial crisis
Japan colonizes Korea
March 1st protests against Japanese colonization
spark the “Independence Movement”
Korea’s first modern constitution established
1899
1997
The Commercial Bank of Korea and
Hanil Bank merged to launch
“Hanvit Bank”
Peace Bank of Korea(commercial banking segment) merged with Hanvit Bank
“Woori Financial Group” launched
“Woori Financial Information System” launched
Bank’s name and CI changed to Woori Finance Holdings and
listed on the Korean Stock Exchange
Woori Finance Holdings
listed on the New York
Stock Exchange (NYSE)
“Woori Private Equity” launched
Woori Bank’s 47th President & CEO
Lee, Soon Woo appointed
“Woori Finance Research Institute” launched
Woori Smart Branch opened
“Woori Card” launched
“Woori Investment Bank” launched
Woori Bank Brazil opened
Woori Financial Group’s 6th Chairman & CEO
Lee, Soon Woo appointed and
Woori Bank’s 48th President & CEO
Lee, Soon Woo reappointed
1950
1954
1956
1960
1988
1992
1993
1997
1999
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2011
2012
2013
IMF receivership comes to an end
Korea-Japan World Cup held
1999
2013
What does Woori Bank achieve and ‘work as one’ to maximize customers satisfaction? Safety
Vitality
unity
pioneering
Sharing
Woori Bank ‘work as one’ to breathe every moment with our customers. We prioritize
customer centered values and our roles of being the longest running No. 1 bank and a
bank acting as a role model in developing the Korean economy. Key phrases to describe
Woori Bank are: ‘A Guardian that Leads in Safety’, ‘A Tech-Savvy Player that Leads in
Vitality’, ‘A Woori Family Creator through Unity of Hearts’, ‘A Global Explorer that Leads in
Pioneering’, and ‘A Promoter of Cham(responsible) Finance guided by Sharing and Love’.
Each and every employee at Woori Bank will always be beside our valuable customers,
supporting, running, laughing, sharing each and every moment together.
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2013 ANNUAL REPORTWork as OneWork as One 010
woori bankWhat does Woori Bank achieve and ‘work as one’ to maximize customers satisfaction?Woori Bank ‘work as one’ to breath every moment with our customers. We prioritize customer centered values and our roles of being a socially responsible bank. Key phrases to describe Woori Bank are: ‘A Mother like Guardian that Leads in Safety’, ‘A Tech-Savvy Player that Leads in Vitality’, ‘A Woori Family Creator through Unity of Hearts’, ‘A Global Explorer that Leads in Pioneering’, and ‘A Promoter of Cham(responsible) Finance guided by Sharing and Love’. Each and every employee at Woori Bank will always be beside our valuable customers, supporting, running, laughing, sharing each and every moment together. Safety
Vitality
unity
pioneering
Sharing
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2013 ANNUAL REPORTWork as One A Guardian that Leads in Safety
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woori bank Woori Bank’s asset management service safely guards and reinforces the growth of customer assets like the sensitivity of a
mother who carefully looks after her newborn baby. Our bank’s long journey of protecting or cleaning-up assets through
advanced risk management has continued for centuries to serve as a nest in nurturing our customers’ assets like the comfort
of one’s home. An ethical mindset has been embodied among all employees as they trust one another to make our bank a
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sustainable and sound bank.
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2013 ANNUAL REPORT
A Tech-Savvy Player that Leads in Vitality
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Woori Bank provides fast, easy, and convenient smart banking services, passionately bracing for and readying ourselves
to vibrantly greet our customers at anytime and from anywhere. Woori Bank approaches our customers right on the
spot to build stronger rapport and friendship compared to our peers. Above all, well acknowledging that customer
accessibility maximization is the key to strengthening our new growth engine, Woori Bank serves exceptional smart
banking services of speed and convenience for everyone.
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2013 ANNUAL REPORT
A Creator of Woori Family through Unity of Hearts
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woori bank Believing that no barriers are insurmountable despite hardships in life, Woori Bank has all level of managers at the
forefront with unyielding leadership, colleagues that support them wholeheartedly, and all employees who are ready
to unite into one heart and soul. We genuinely have a corporate culture that prioritize the leaders’ commitment towards
number one customer satisfaction and colleagues’ collective spirits in overcoming any obstacles to sustain growth. Woori
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Bank where everyone is united is home to a bigger and wider path forward.
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2013 ANNUAL REPORT
A Global Explorer that Leads in Pioneering
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A Global Explorer that Leads in Pioneering
Woori Bank challenges prejudice and thinks outside the common boundaries, opening up a new door of opportunities beyond
any boundaries. This stance will be reaffirmed by pioneering in the global banking sector, and leading to a more creative path
in strengthening global finance. Cherishing the 115 year history in being the 1st bank founded within Korea and steadily
strengthening international presence, our bank will continue to be a leading bank worldwide with the ability to seek for a new
world of convergence, adapting to the dynamic changes and improving the shortcomings of the current banking legacy.
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2013 ANNUAL REPORT
A Promoter of Cham(responsible) Finance guided by
Sharing and Love
020
woori bank A Promoter of Cham(responsible) Finance guided by
Sharing and Love
Believing that a genuine heart communicates itself to the core, and prioritizing social roles & values of finance over other
objectives, Woori Bank continues to lead the social norm in sincerely understanding and sharing with our community.
To make the world a place of warmheartedness, our bank opened ‘Consumer Protection Center’ for the 1st time in Korea
and encouraged our bank to be reborn as a more socially responsible bank. All employees consider ‘Cham(responsible)
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Finance’ as a basic principle in daily operations to better deliver the bank-wide customer oriented products and services.
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2013 ANNUAL REPORT
Message from the Ceo
Woori Bank will be fully united and bring the organizational
capacities to the fore to turn around such uncertainties and
crises for the better, thus making a great leap forward.
022
woori bank Distinguished customers,
I would like to extend my sincere appreciation to all our customers for
giving Woori Bank your trust and commitment for over 115 years.
2013 was a challenging period as the national economy of Korea entered
into an uncertain economic phase of low growth and low profitability.
Like all banks in Korea, Woori Bank achieved positive growth in assets
but limited growth in profitability. Our bank’s total assets continued
a comfortably high level of growth to KRW 265 trillion, an increase of
approximately KRW 4 trillion.
However, due to the continued drop of Net Interest Margin (NIM) caused
by the Bank of Korea’s benchmark interest rate going down, and setting
aside higher credit costs under the restructuring of large enterprises, our
bank’s net income stood at a mere KRW 465 billion.
As a consequence, the BIS ratio as an indicator for capital adequacy was
at a favorable level of 15.52%, but profitability and financial soundness
indicators plummeted year-on-year with 0.22% for ROA, 2.93% for ROE
and 2.99% for NPL.
In the coming years, we will strengthen our risk management system to
ensure that our bank’s soundness improves to one of the highest levels
among domestic banks, we will also improve our business model and
cost to income structure to enhance profitability, and finally, we will
accelerate in improving our asset quality by promptly concluding the
ongoing clean-up of the balance sheet.
Distinguished customers,
The financial environment in 2014 is not likely to turn around anytime
soon. Despite the gradual recovery in the pipeline at home and
abroad, the NIM is not expected to improve dramatically. The financial
environment is not exactly rosy, especially due to delays in the turnaround
of failing companies and higher financial burdens originated from
household debts. However, Woori Bank being the longest running
Korean bank of experiencing all the highs and lows of Korea’s remarkable
development for over 115 years, and furthermore, having 16,000 dedicated
employees working fully united to bring our organizational capacities
to the forefront, our bank will turn around such future uncertainties and
crises into new opportunities, and thereby take a great leap forward for
another 100 years.
While continuously maintaining substantial growth driven by high-
networth assets, and generating balanced growth in all business
portfolios, a stable profit base will be secured with an adequate NIM and
higher non-interest income generated from various types of commissions
& fees.
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2013 ANNUAL REPORTWork as One
We will push ourselves harder in securing future growth engines for
sustainable growth by discovering new projects in promising areas
and continuously expanding our global networks in better serving our
customers worldwide.
Asset soundness will be dramatically boosted by operating an optimal
risk management system that prevent our bank from acquiring to-be-
problematic non-performing assets, and efforts will be accelerated to
normalize corporate restructuring assets and loan workouts.
Woori Bank will strengthen our support in providing microcredit in
conjunction with the Miso(Smile) Credit Financial Foundation and
moreover, we will contribute to stabilizing the livelihood of our citizens
by fulfilling our role as a general treasury bank in managing the National
Housing Fund. Woori Bank will continue to actively engage in achieving
sustainable growth by involving in a more in -depth and greater variety of
social contribution activities.
Having inherited our 115-year history on the basis of our customers’ love
and support, Woori Bank will stand in the forefront of fulfilling our role as
the longest running representative bank of Cham(responsible) Finance
this year. Our bank will furthermore fully establish ourselves as the iconic
bank in Korea, leading the financial sector with the best possible products
and services.
Woori Bank will strive to achieve a greater level of customer satisfaction
and happiness.
We will guarantee our utmost commitment by achieving the
management goal of becoming ‘Korea’s most reliable bank’ and with the
vision of becoming ‘Korea’s number one bank.’
I sincerely wish you good health and happiness in the Year
of the Horse in 2014.
Thank you.
lee, Soon Woo
President and Chief Executive Officer
024
woori bank 025
2013 ANNUAL REPORTWork as One Woori Financial Group's Holding Structure
priV atization oF Woori FinanCial Group in
proGreSS
As of June 26, 2013, the Korean government, through the
Public Fund Oversight Committee (the “PFOC”) have deliber-
ated and determined for privatization of Woori Finance Hold-
ings (WFH) and its subsidiaries. The PFOC will proceed with
the spin off and the sale process through which WFH and its
subsidiaries will be split into three groups, Regional Bank unit
including Kwangju Bank and Kyongnam Bank, Brokerage unit
including Woori Investment & Securities, and Woori Bank unit
including Woori Bank and other subsidiaries.
Category
Subsidiaries
Regional Bank unit
Kwangju Bank and Kyongnam Bank
Brokerage unit
Woori Investment & Securities, Woori Financial,
Woori F&I, Woori Asset Management, Woori Aviva
Life Insurance and Woori FG Savings Bank
Woori Bank unit
Woori Bank and its subsidiaries
In accordance with the PFOC’s plan, the Group announced
the sale of shares of the Brokerage unit on August 16, 2013.
On December 6, 2013, the Group selected the preferred
potential buyers for Woori Financial and Woori F&I of the Bro-
kerage unit. In addition, on December 24, 2013, the Group
selected the preferred potential buyers for Woori Investment
& Securities, Woori Asset Management, Woori Aviva Life Insur-
ance and Woori FG Savings Bank.
On February 24, 2014, WFH made agreements for the sale of
Woori Financial and Woori Asset Management with KB Finan-
cial Group and Kiwoom Securities, respectively. On April 7,
2014, WFH made agreements for the sale of Woori F&I with
Daishin Securities. In addition, on April 14, 2014, WFH made
agreements for the sale of Woori Investment & Securities,
Woori Aviva Life Insurance and Woori FG Savings Bank with
NongHyup Financial Group.
Meanwhile, the board of directors of WFH approved a plan
to spin off Kyongnam Bank and Kwangju Bank on August 27,
2013. On January 28, 2014, the extraordinary shareholders’
meeting of WFH approved the spin off and it is scheduled to
be effective on May 1, 2014.
Woori Finance Holdings Co., Ltd.
100%
Woori Bank
Woori Bank’S ContriBution to tHe Group’S
ConSoliDateD total aSSetS
As of end-2013
Others
26.6%
Woori Bank
73.4%
Woori Card Co. Ltd.
Woori Investment Bank Co. Ltd.
Woori FIS Co. Ltd.
(Woori Finance Information System)
Woori Private Equity Co. Ltd.
Woori Finance Research Institute Co. Ltd.
Kwangju Bank Co. Ltd.
Kyongnam Bank Co. Ltd.
Woori Investment & Securities Co. Ltd.
Woori Aviva Life Insurance Co. Ltd.
Woori FG Savings Bank Co. Ltd.
Woori Financial Co. Ltd.
Woori Asset Management Co. Ltd.
Woori F&I Co. Ltd.
100%
41.64%
100%
100%
100%
100%
100%
37.85%
51.58%
100%
52.02%
100%
100%
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woori bank Financial Highlights
Woori Bank
net inCoMe
(Unit: KRW billion)
465
2,069
1,448
465
total aSSetS
(Unit: KRW billion)
249,985
roa
(Unit: %)
0.22
249,985
248,547
243,806
0.59
0.49
0.22
2011
2012
2013
2011
2012
2013
2011
2012
2013
* Net Income(Attributable to Shareholder)
roe
(Unit: %)
2.93
BiS ratio / tier i ratio
(Unit: %)
SG&a ratio
(Unit: %)
15.52/12.68 51.30
7.93
6.89
2.93
Basel
Ⅲ
15.52
12.68
Basel
Ⅱ
14.70
11.35
13.78
10.74
51.30
45.32
41.07
2011
2012
2013
2011
2012
2013
2011
2012
2013
027
2013 ANNUAL REPORTWork as One Board of Directors & Management
CHieF exeCutiVe oFFiCer (Woori FinanCial Group & Woori Bank)
Lee, Soon Woo
Chairman of WOORI FINANCIAL GROUP
President of WOORI BANK
• Deputy President / Director
• Executive Vice President, Consumer Banking Business Unit, Woori Bank
• Executive Vice President, Management Support Unit, Woori Bank
• Head, Corporate Financial Division, Hanvit Bank
• Business Management Course for CEOs, Korea University
• B.A. in Law, Sungkyunkwan University
Lee, Dong Gun
Deputy President / Director
• Executive Vice President , Credit Support Unit, Woori Bank
• Executive Vice President, Operation & Support Unit, Woori Bank
• Managing Director, Channel Support Division, Woori Bank
• Senior Relationship Manager, GangnamJungang Corporate Banking Center , Woori Bank
• M.A. in Economics, Yonsei University
• B.A. in Business Administration, Yeungnam University
Kim, Yong Woo
Standing Audit Committee Member / Director
• 2nd Deputy Secretary General, The Board of Audit and Inspection of Korea
• Deputy Director, The Board of Audit and Inspection of Korea
• Passed the 23rd National Administrative Examination
• M.A. in Public Administration, Syracuse University
• B.A. in Economics, Yonsei University
StanDinG DireCtorS (Woori Bank)
028
woori bank outSiDe DireCtorS (Woori FinanCial Group)
Park, Young Soo
Chairman of the Board
• Current) Representative Attorney, Gangnam Law Firm
• Current) Chairman of Special Committee to Investigate Local
Government Tax Waste, KoreanBar Association
• Director of Seoul High Prosecutor’s Office
• Director of Central Investigation Department, Supreme
Prosecutors’ Office
• Ph.D., Dankuk University
• B.A. in Liberal Arts and Sciences, Seoul National University
Chai , Hee Yul
•
Current) Professor, Economics, Kyonggi University
•
Dean of Academic Affairs, Konggi University
•
Non-standing Commissioner, Financial Services Commission
•
Deputy Researcher, Korea Institute of Finance
•
Ph.D., University Paris 10, France
•
M.A. in Economics, Seoul National University
outSiDe DireCtorS (Woori FinanCial Group & Woori Bank)
Oh, Sang Keun
Chairman of the Board
• Current) Professor of Economics, Dong-A University
• Executive Director, Korean Economic Association
• Ph.D. in Economics, University of Wisconsin-Madison
• M.A. in Economics, Seoul National University
• B.A. in Economics, Sungkyunkwan University
Choi, Kang Shik
• Current) Professor of Economics, School of Business, and Dean,
School of Undergraduate Studies, Yonsei University
• Executive Director, Korean Economic Association
• Director, Labor Trends Analysis Team, Korea Labor Institute
• Ph.D. in Economics, Yale University
• M.A. in Economics, Yonsei University
• B.A. in Economics, Yonsei University
exeCutiVe ViCe preSiDent (Woori Bank)
Lim, Seong Yeal
• Current) Executive Director, Dept. of Planning and Coordination,
Korea Deposit Insurance Corporation
• Executive Director, Dept. of Risk Management, Korea Deposit Insurance Corporation
• Director, Dept. of Fund Management, Korea Deposit Insurance Corporation
• M.A. in Public Administration, Graduate School of Seoul National University
• B.A. in Economics, Seoul National University
Chang, Min
• Senior Research Fellow / Director,
Research Coordination Division, Korea Institute of Finance
• Adviser of the Chairman, Financial Services Commission
• Senior Manager, Policy Coordination Supervisory Team,
Policy Planning & Coordination Department, Bank of Korea
• Ph.D. in Economics, Michigan State University
• B.A. in Economics, Seoul National University
Lee, Kwang Goo
Consumer Banking Business Unit
Park, Tae Yong
Global Business Unit
Kwon, Ki Hyung
Institutional Banking Business Unit
Lee, Yong Guan
Small & Medium Corporate Banking
Business Unit
Yu, Ku Hyun
Real Estate Finance Business Unit
Nam, Ki Myung
Finance & Management Planning Unit
Jung, Ki Hwa
Human Resources Unit
Jeong, Won Jai
Corporate Banking Business Unit
Park, Ki Suk
Risk Management Unit
Chae,Woo Seok
Credit Support Unit
029
2013 ANNUAL REPORTWork as One Corporate Governance
orGanization oF tHe BoarD oF DireCtorS
As of the end of March 2014, Woori Bank’s Board of Directors consisted of 7 executive
directors: three standing directors and four outside directors, appointed to increase the
relevant expertise and independence of the Board. The four outside directors were se-
lected based on their experience in the fields of finance, management, law, accounting
and public relations; many are also well-known public figures. They support and monitor
the Bank’s strategic decision-making and overall business affairs on a regular basis.
Major aCtiVitieS For 2013
The Board held 18 meetings in 2013 to discuss a total of 66 pending issues and 59 brief-
ings for decision-making and deliberation, and the overall attendance rate of outside
directors was 95%.
Directors from various fields collected information from the Bank through internal and
external activities, and then offered site-oriented advice based on these activities
and their expertise. This made a significant contribution to improving management. The
directors who were experts in economics and law managed the Board by discussions
and feedbacks. In so doing, they promoted effective bank management and maximized
shareholder value In 2013, the Board found consensus in the quarterly management
records at each meeting, and held general discussions and communication regarding
various matters.
The agenda of theses various meetings included: reports on the submission of plans
for the implementation of the Memorandum of Understanding(MOU) signed with the
Financial Supervisory Service(FSS); the results and details of the MOU implementa-
tion with Korea Deposit Insurance Corporation(KDIC); plans to issue foreign currency-
denominated bonds; comprehensive briefings regarding major loans; briefings on NPLs;
a review of the orders implemented by the Board of Directors, as well as a discussion
concerning the outcome of the reviews and a rundown of the activities of the various
committees under the Board of Directors. At the December meeting, the Board also con-
firmed its 2014 draft management plan, following in-depth discussions on several issues
facing the Bank amid continuing market changes.
Type of Meeting
No. of Agenda
Issues
No. of
Briefings
Major Issues
Holding regular shareholders’ meeting, operating the Board of Directors/ Board of Direc-
tors’ Management Committee, discussing corporate governance issues, setting and imple-
menting management plans and strategies(launching and realigning divisions)
Approving and modifying the settlement of financial statements, reporting and planning
financial records, briefing on results and actions for reviewing
the MOU, planning for issuing bonds (including foreign currency bonds), and managing
credit limits
Briefing comprehensively on major loans, investing in private equity funds, selling off
NPLs, briefing on the status of NPLs, Appraising the commitments of investment compa-
nies to invest, dealing with audit and internal control issues, and managing and support-
ing special guarantee contributions of institutions for SMEs
Carrying out performance evaluations / compensation, appointing staff, and addressing
issues related to labor-management relations
Shareholders’ Meeting, BOD and
Corporate Governance, etc
Accounting/
Financial Management
Portfolio &
Risk Management/ Investment/
Audit & Inspection/
Gov’t Regulation
HR/Organizational
Management
Others
Total
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28
7
1
5
25
66
14
8
15
9
13
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woori bank
CoMMitteeS unDer tHe BoarD oF DireCtorS
To support the efficient operation of the Board of Directors, Woori Bank has established
the Board Governance Committee, Board Risk Management Committee, Board Audit
Committee, Board Compensation Committee, and Board Audit Committee Member
Recommendation Committee
The Committee actively supports the Board of Directors by studying/reviewing the overall function &
operation of the Board and also by deciding/examining management schemes regarding handover &
training issues. The Committee also acts as the Outside Director Candidate Recommendation Commit-
tee, pursuant to Article 22-3 of the Bank Act.
The Committee decides on risk-related policies and strategies in response to the changes in the finan-
cial environment. The Committee meets at least quarterly and on an ad hoc basis to deliberate on risk
management strategies and policies, risk tolerance levels and transactions or exposures, and thereby
discern, measure and monitor overall risks in a timely manner.
The Committee establishes and executes internal audit plans, implements outcome evaluations, and
implements ex-post audit measures to improve the already adequate internal control system and effec-
tively evaluate management performance measures.
The Committee is independent from the Bank’s management, and is in charge of establishing compen-
sation policies, and monitoring the design and operation of the Bank’s performance-based compensa-
tion systems.
Board Governance
Committee
Board Risk Management
Committee
Board Audit
Committee
Board Compensation
Committee
Board Audit Committee Member
Recommendation Committee
The Committee recommends candidates for the Audit Committee.
planS For 2014
In 2014, the Board will make significant contributions to the Bank’s management by
discussing major issues at regular meetings. By end-March 2014, the Board of Directors
had already met seven times, with agendas that included such issues as, the approval of
financial statements as of year-end 2013. After March, the Board meetings will continue
to focus on issues such as the analysis of management performance and the 2015 man-
agement plan. Meetings will also be held on an ad hoc basis whenever needed, dealing
with issues such as management goals, organization and financing.
In 2014, Woori Bank will serve as a reliable partner bank that excels and grows through
transparent and efficient management innovation.
031
2013 ANNUAL REPORTWork as One news Highlights
(2013.05.01~2014.04.30)
Woori Bank Hansae Basketball Team
Win the Honor of Triple Crown
20 Million Customer Acquired for the
First Time in the Bank’s 115-year History
Nothing is impossible for those who try
their best. The Hansae Basketball Team
which used to be the weakest with the
lowest ranking for four seasons straight has
gained the title of ‘triple crown.’ The team
won in the 2012-13 Women’s Professional
Basketball league along with the title of un-
disputed champion, after winning the 2013
Asia Women’s Basketball Championship.
With the last achievement in particular, the
team has reaffirmed its number one posi-
tion in Asia’s Women’s Professional Basket-
ball beyond Korea.
Prior to the season’s opening, the team
completely reshuffled its coaching group
to make Wi, Sung Woo the new manager
(head coach) and Chun, Joo Won and Park,
Sung Bae the new assistant coaches. This
helped the team turn around and rebuild
its prestige as a big name in the women’s
professional basketball league. With inten-
sive training and the players’ robust com-
mitment to shed the notoriety of being at
the bottom of the rankings, the Bank team
succeeded in achieving the biggest turn-
around in the records of women’s profes-
sional basketball.
Starting with the victory prior to the recent
opening at the 2013-14 Women’s Profes-
sional Basketball, the team has maintained
its exclusive top ranking seven times. By
transforming from a losing team to a top
winning one, the team’s winning spree will
continue.
032
The year 2013 was a challenging year for
all. The financial sector, in particular, had
to undergo a major downturn amid harsh
challenges from home and abroad. Despite
the difficulties, however, Woori Bank came
to flourish with robustness and confidence
all thanks to customers’ unyielding trust
and love, and succeeded in ‘acquiring 20
million customers’ last September.
Woori Bank’s ‘Aga (Baby) Sarang (Love)
Project’ for parents who are focusing on
childcare and child raising, the ‘School At-
tack’ system for students who study hard,
and the ‘Smart Branch’ for IT device-savvy
youngsters are some examples of custom-
ized services catering to diverse styles and
needs of customers. This led to ‘acquiring
20 million customers’ for the first time in
the Bank’s 115 year history.
Lee, Soon Woo Appointed as 48th Presi-
dent & CEO of Woori Bank and 6th
Chairman & CEO of Woori Financial
Group
The inauguration ceremony for Chairman
& CEO of Woori Financial Group, and Presi-
dent & CEO of Woori Bank, Lee, Soon Woo
was held in the presence of about 600 em-
ployees from affiliates of the Woori Finan-
cial Group on the 4th floor of the main hall
of Woori Bank’s head office at Hoehyon-
dong. Chairman Lee was awarded the dual
titles of the 6th President of Woori Financial
Group, and the 48th President and CEO of
Woori Bank.
During the ceremony, he said, “I feel a
heavy responsibility to successfully carry
out Woori Financial Group’s privatization
and other numerous pending agenda. I
will do the utmost for a new breakthrough
for the Group’s future and development
through successful privatization, a long-
sought-after project within, by enhancing
the Group’s value.”
To this end, he announced three manage-
ment keywords of innovation in organi-
zations, efficiency in management, and
privatization. Accordingly, four strategic
directions were proposed as action plans:
establishing an advanced governance
structure and securing competitiveness in
affiliates; intensifying competencies in prof-
it making; making privatization successful;
and leading the way for ‘creative finance’
and practicing CSR-driven practices.
Lastly, he underlined his commitment by
saying, “Creative supporting measures for
shared growth of SMEs, ordinary citizens
and financial institutions and banks will be
eagerly sought and promptly initiated. I will
ensure that the Group becomes number
one financial group that is trusted by the
market and customers with its evolving
progress and renewed commitment.”
Reaffirming the Presence as a Repre-
sentative Bank in Small Loan Finance
Woori Bank was re-selected as a general
treasury bank of the National Housing
Fund, and is the only bank that has ad-
opted ‘profit-sharing mortgage’ the gov-
ernment introduced among commercial
banks. As such, the Bank’s prestige as a
woori bank representative in Small Loan Finance was
reaffirmed.
Having been re-selected as a general
treasury bank of the National Housing
Fund in 2013, following 2008, the Bank
could expand its profit base by attracting
new customers as the only bank to cover
entrepreneur loans. It could also intensify
marketing aligned with the Ministry of
Land. Woori Bank is to manage funds of
the National Housing Fund for the next five
years whose total assets are worth KRW
89.1 trillion including savings for subscrip-
tion, housing bonds and loans services for
housing funds.
Moreover, ‘profit-sharing mortgage’ has
successfully landed, which was adopted by
the government as a pilot project to ease
tensions in the housing market and stabilize
the markets for house leasing or monthly
housing rental market. The program re-
quires stringent loan reviews and adequate
information to prevent incomplete sales,
however, Woori Bank proudly handled it
exclusively as the general treasury bank of
the National Housing Fund. The Ministry of
Land, Infrastructure and Transport decided
to implement the program driven by the
successful closing of the deal that attracted
the designated openings of 5,000 people
within 54 minutes from the start of online
application. This, once again, proved Woori
Bank’s prestige as an iconic Small Loan Fi-
nancing Bank.
Designated as an ‘Entrusted Bank for
Stock Assets’ and a ‘Bank for Foreign
Currency Reserves’ for the National
Pension Fund
Woori Bank paved the way to a higher posi-
tion as a global leading bank by being desig-
nated as ‘an entrusted bank for stock assets’
and a ‘bank for foreign currency reserves’ for
the National Pension Fund, which ranks third
in the world in its field.
First of all, Woori Bank was designated as an
entrusted bank for the National Pension Fund
last September. The fund’s asset portfolios
mostly cover stocks, bonds and alternative
assets, and its stock investments amount to
KRW 75 trillion. Having served as an entrusted
bank for the fund for its bonds and alterna-
tive assets, Woori Bank can now cover all the
asset portfolios for the fund, and build up
expertise.
In October, the Bank was selected as a ‘trea-
sury bank for foreign currency reserves’ for
the National Pension Fund to exclusively
cover its foreign currency transactions for the
next three years. It is the first time that the
fund designated our bank as its foreign cur-
rency reserves bank. As such, our bank will set
up an additional foreign currency transaction
system, and cover investment transactions for
the fund’s overseas business equity, buildings
and derivatives for three years up to July 2017.
Accordingly, the fund will open up a foreign
currency account worth KRW 300 million in
the Bank and begin overseas investment and
transactions. The fund plans to expand the
amounts of overseas stocks, bonds and alter-
native investments, so the foreign currency
investments are expected to soar to USD 1~2
billion in time.
Discovering New Growth Engines by
Tapping into Overseas Markets
Woori Bank actively taps into overseas mar-
kets to overcome the sluggish growth and
lower profits in the domestic market. It is
a strategy to explore new growth engines
and enhance corporate value by advancing
abroad. Woori Bank Brazil opened in Janu-
ary in 2013, making it the 6th overseas sub-
sidiary for pur bank, which now operates
our overseas sales network in all BRICs. The
Sydney branch made its official opening
as Woori Bank acquired an official license
for the first time for a Korean bank, in April.
Woori Bank opened its branch in Weihai
in July for the first time as a foreign bank,
which is the Bank’s 16th network in China.
A plan is underway to acquire Saudara
Bank, a local Indonesian bank to dominate
Southeast Asia which enjoys rapid growth.
Our bank’s overseas subsidiary in Vietnam
will be in place by the end of 2014, which
is to be headquartered in Ho Chi Minh. As
such, Woori Bank is keenly concentrating
our capacities on making the global net-
work stronger.
Overseas network expansion will continue,
especially targeting profitability, growth
potentials, strategic needs and market un-
derstanding. The proportion of overseas
sales revenue will be raised to 15% by the
end of next year from the current 5%, to
achieve the goal of becoming one of ‘Asia’s
Top 10 Banks’ by 2016.
033
2013 ANNUAL REPORTWork as One 115 years
of history tells
同心同力
‘Dong Sim Dong Ryeok ((
)’: The four Chinese characters refer to a mindset
of unity and solidarity to share virtues with the same heart. It shows Woori Bank’s
strong commitment to move forward by gathering our will together against possible
challenges and setbacks.
Despite the ever-challenging economic environment, once Woori Bank gathers our
forces together in the attitude of ‘Dong Sim Dong Ryeok’ among employees we will
better serve as a ‘trustworthy bank’ whose values and roles are highly recognized
as having no fear against all odds. Undoubtedly, there is no obstacle that we cannot
overcome.
We have witnessed numerous difficulties for the past 115 years. And yet, customers’
unyielding love continued on to date. Woori Bank will be an empowering bank that
leads the national economy and finance, while making progress along with our society.
‘Dong Sim Dong Ryeok’ will encourage us to ‘run and laugh together’, have our genuine
values recognized, and create a brighter future for us as ‘Korea’s No.1 bank.’
+82-2-2002-3000, or visit our website at www.wooribank.com
034
woori bank Woori Bank’s Awards 2013
Ranking 1st in the banking sector of the
Korean Standard-Service Quality Index
(KS-SQI) for 3 consecutive years
[Korean Standards Association]
Platium Prize of LACP
Annual Report Competition
[League of American
Communications Professionals]
Gold Prize of ARC
[Annual Report Competion]
iTouch Package designated as
Most Valuable Product of
2013 THE PROUD 100 Products of Korea
[Korea Management Association Consulting (KMAC)]
‘TWO CHAIRS’
- Grand Prize in PB Finance of 2013 Korea
Luxury Brand Award
[JoongAng Daily]
Danggeun (of course) Easy Banking
- Grand Prize in Banking Sector of the 2nd
Mobile Brand Awards [Maeil Business News-
paper, MBN Maeil Broadcasting]
Danggeun (of course) Easy Banking
- Grand Prize in Power Banking Sector in the
2013 DT Brand Power
[Digital Times, Korea Branding Association]
Prize in the 2013 Leading Counter-
party Bank for Korea
[The Asian Banker]
Money Today
Grand Prize in 2013 “thebell” Risk
Manager Awards (Financial Supervisory
Service (FSS) Presidential Award)
[Money Today, the bell]
Special Award in Fund Trader Sector in the 2013
Korea Fund Awards
[KG Zeroin]
Prize in the Banking Sector of Excellent Fund Trad-
ers of the 12th Korea Fund Awards
[Maeil Economic Newspaper]
Grand Prize in the Finance Sector for six
years in the 2013 Customer Delight Award
[Korea Economic Daily]
Prize in the Banking Sector of Best Fund Traders
of the 2013 Korea Fund Awards
Lifelong Happiness Wealth Management
– Grand Prize in the 2013 Korea Luxury Brand Award
[Korea Economic Daily]
2013 Plaque of Commendation for Outstanding
Corporate Customers in Securities Agency Service
[Korea Securities Depository]
035
2013 ANNUAL REPORT Work as One As our valuable customers, your dreams and plans for the future make us what we are today.
Know-how in secure asset management, vibrant services of speed and convenience, unity-
driven forces of all employees that overcome any obstacles, creative pioneering solutions
on a global basis, and sharing our love by providing Cham(responsible) Finance to our
neighbors in need – each of these Woori Bank values crystalize into a pleasurable experience
of satisfying each and every one of our customers. It is the world of ‘Woori(meaning ‘us’)’
envisioned by Woori Bank.
Smile for All 038
woori bankWhat services are being offered at Woori Bank to give joy to our customers?As our customers, your dreams and plans for the future make us what we are today. Know-how in secure asset management, vibrant site operation, unity-driven driving force, creative pioneering solutions on a global basis and sharing with neighbors – each of these Woori Bank values crystalize into a pleasurable experience for each and every customer.It is the world of ‘Woori’ envisioned by Woori Bank. 039
2013 ANNUAL REPORTSmile for All Banking World of Safety
“Hoping to receive safe and reliable banking
services in securing my valuable assets”
040
woori bank “Woori Bank is at the forefront of thoroughly managing risks
to ensure safe asset management for our customers.”
We will secure asset quality by implementing thorough risk management, and provide
compliance driven responsible services with strong ethical mindset to protect valuable
assets and wealth of our customers while enabling higher retums. Accordingly, Woori
A Safe Banking World
Bank, being the longest running reliable bank for over 115 years will maintain sustainable
growth by protecting and contributing to sound development of of customers’ wealth and
happiness for another 100 years.
041
2013 ANNUAL REPORTSmile for All risk Management
Risk management has become essential to strengthen the competitiveness of financial
institutions experiencing the 1997 financial crisis and Lehman Brothers’ collapse. Based on
the know-how accumulated through undergoing past crises, Woori Bank adopted the Risk
Adjusted Performance Measurement (RAPM) for the first time in the Korean banking indus-
try in 2002. Advanced risk management systems were put effectively in place to successful-
ly introduce Basel II and III. Believing that profit sources are derived from fundamental risk
management, Woori Bank will solidify its presence as a leading bank through risk manage-
ment cases from major global banks and then implementing Woori Bank distinctive top-
tier risk management.
key pointS in riSk ManaGeMent
in 2013
In 2013, the Risk Management Unit car-
ried out risk management policies, aim-
ing to minimize potential risks against
uncertain economic situations at home
and abroad, ranging from the global
economic recession to the slowdown in
the domestic real estate market and in-
crease in household debt. The industry-
specific portfolio management guideline
was revised, reflecting industry-specific
outlooks to align high-networth asset
driven portfolios. Improved early warn-
ing systems helped our bank detect
any signs of insolvency in an earlier
phase and minimized the asset quality
deterioration preemptively. Seeking to
respond quickly to the low-growth era,
the corporate credit assessment models
centered on stability indicators were
improved continuously. Moreover, inte-
grated trading systems were established
to efficiently manage counterparty credit
risks in derivative transactions.
Revising the Portfolio Handling Stan-
dard
Woori Bank has Korea’s top level cor-
porate bank ing competencies by
overcoming crises for many years and
establishing an advanced corporate as-
set oriented risk management system.
Seeking preemptive risk management
for industries with potential risks, all of
Korean industries were classified accord-
ing to the differing degree of potential
risks. Then, measures including interest
rate approval authorization were tight-
ened to a higher degree and imposition
of expected losses were weighted higher
in a phase-in basis to minimize negative
restriction of ongoing business opera-
tions. At the same time, regulatory blind
spots were removed to raise efficacy of
control for high-risk industries. Moreover,
the portfolio guideline for each credit
rating was set, enabling our bank to
push forward in targeting high-networth
asset-driven portfolio policies.
Establishing a Risk Management Sys-
tem for Insolvency Prevention
Since uncertainties continue in the fi-
nancial environment and profitability of
enterprises are expected to drop, we are
implementing early risk removal credit
policies or systems to lower insolvent
risk and maintain mid to long-term fi-
nancial strength. Woori Bank recognizes
insolvency signals of corporate assets in
an earlier phase, and operates the early
warning system equipped with sound
follow-up management guidelines. In
2013, indicators representing insolvency
signs were renewed where recent eco-
nomic situations were reflected, thus
improving the predictability and dis-
tinctiveness of the systems to a higher
level. Moreover, follow-up management
systems for borrowers with signs of insol-
vency were developed, thus minimizing
the further possibilities of deteriorating
into actual insolvencies.
Aiming to enhance crisis response capa-
bilities against industries with potential
risks, the number of industries subject to
monitoring under industry-specific con-
tingency plans was scaled up, and coun-
042
woori bank termeasure responses were strength-
ened in each critical phase. As a result,
efficient and feasible responses can be
better implemented in each phase.
Improving Credit Assessment Models
for Large Enterprises/External Auditing
and Non-external Auditing Enterprises
Managing an efficient credit assess-
ment model is important in assessing
borrower-specific risks prior to executing
loans, and in deciding which borrower is
eligible for loans. Woori Bank improved
credit assessment models for large enter-
prises/external auditing and non-external
auditing enterprises in order to quickly
respond to the era of low growth. Among
credit assessment indicators, aspects in
judging growth potentials and activeness
were reduced, while elements in judging
stability was expanded. Improvements
were made to reflect the differences in
accounting standards with the adoption
of the International Financing Reporting
Standards (IFRS). Woori Bank will continue
to maintain and manage timely credit as-
sessment models catering to changes in
the financial environment.
Intensifying Counterparty Credit Risk
Management in Derivative Transac-
tions
Woori Bank established the integrated
trading system for the first time as a bank
in Korea that connects front, middle and
back offices. As a result, credit risk man-
agement was intensified against counter-
parties in derivative transactions. Timely
risk management was made possible
where the number exceeding the ceilings
for derivative transactions was reduced
for general customers. The amount of
credit risk exposure monitored, especially,
managing counterparty credit risks, was
reduced by acquiring collaterals. Woori
Bank won the Grand Prize (FSS president)
of the thebell Magazine’s ‘2013 Risk Man-
ager Awards’ the most prestigious ac-
knowledgement in risk management for
our bank’s excellence in this field.
Major planS For riSk ManaGe-
Ment in 2014
In 2014, uncertainties are expected to
continue at home and abroad including
the tapering of quantitative easing in
the U.S., increase in household debt and
lower growth rates of SMEs. Accordingly,
asset quality will be enhanced to proac-
tively control bad-debt expenses. Specifi-
cally, insolvency risks will be shut off at
an earlier phase by identifying potentially
insolvent assets with an upgraded early
warning system. Inflow of low-networth
assets will be minimized through ad-
equate credit assessments of companies
under reviews. Stress-test methodolo-
gies will be improved to check financial
soundness in extreme crises, and appro-
priate responses will be established for
enhancing current operation. Our Asset
& Liability Structure will be improved to
comply with the liquidity management
ratios including the Liquidity Coverage
Ratio (LCR) and the Net Stable Funding
Ratio (NSFR), which are to be introduced
in 2015 and 2018, respectively. Operat-
ing risks will be diagnosed by assessing
changes in the external environment,
including issues exposed to the media,
and so potential risks will be examined in
a timely basis to devise active measures
in achieving effective risk
management.
043
2013 ANNUAL REPORTSmile for All ethical Management
Due to the various negative compliance related incidences surfacing in the banking sector,
there has been a stronger voice in tightening internal control and strengthening responsi-
bilities of our employees. Woori Bank devised and practices the ‘Woori Code of Ethics,’ which
are the principles involved in making proper decisions or actions and all staff are required
to abide by these principles, along with ‘principle-driven management’, and ‘Job-specific
Guidelines’, To prevent the leakage of personal information, staff training and reviews were
introduced. For all employees, the ‘Ethical Compliance Practices‘ manual, ‘Self-Check on Eth-
ical Compliance’ and ‘Check and Clean Day’ were made available. These brought more at-
tention to ethical management, and Woori Bank contributed to the national economy and
social development by fulfilling social responsibilities despite the challenging situations. As
a result, Woori Bank will continue to advance further as an exemplary ethical player.
044
woori bank reVieW oF 2013
In 2013, Woori Bank strived to ensure
that employees could recognize and
practice the concept of ethical man-
agement. They were encouraged to
apply the ‘Code of Ethics’ through con-
tinued internal control and intensified
employee training. An event titled ‘My
Commitment for Compliance and Sound
Business’ took place to intensify the
awareness on practicing principle-based
business through legal compliance, pre-
venting financial accidents and bolster-
ing the awareness of legal compliance.
An award ceremony for outstanding
employees in ethical management and
compliance monitoring was held to raise
awareness of ethical compliance and
boost morale through incentives. More-
over, our bank made improvements in
legal on-site difficulties by operating ‘119
(the Korean version of 911) site-oriented
legal services’ so that ethical manage-
ment could further solidify in our bank.
Application of the Code of Ethics
Various programs have been up and run-
ning to raise awareness regarding the
Code of Ethics among employees, and
to ensure they keep actions in line with
our ethics amid legal and institutional
changes. By facilitating employees’ re-
porting and having the freedom to blow
the whistle regarding ethical manage-
ment such as money and entertainment
exchange, Woori Bank operates the
reporting and whistleblower protection
systems necessary to practice ethical
management and prevent related inci-
dents from happening again. The Ethical
Management Support Council is held on
a monthly basis, which has led to seek
for excellent cases of practicing the Code
of Ethics. Monitoring based on diverse
channels to effectively dissipate and em-
ploy principle-based management has
taken place.
planS For 2014
In 2014, Woori Bank will set up a leading
system to support internal control for
branches, protect consumer’s right and
extend legal services.
To this end, a window-specific legal case
handbook will be published for easy ac-
cess to legal cases on sites. The consent
form for disclosing personal information
will be improved to clarify the agree-
ment procedure. Incomplete sales will
be shut off by making the screening of
terms and agreements and products
more stringent for the rights of consum-
ers. Internal control training centered on
incidences will be intensified, while the
internal reporting procedure is changed
and improved by upgrading anti-money
laundering systems. Suspicious transac-
tion screening indicators will be devel-
oped and applied more extensively to
our systems.
Strengthening the Field Support System
We have extended active support for
field management to shut off possible
legal risks.
With the 119 (the Korean version of 911)
site-oriented legal services in place, our
bank provides legal assistance from in-
house lawyers to any staff member
requiring legal help in civic, criminal and
household matters.
A bulletin board is available for the staff
to propose any ideas on legal advice
and submit requests for improvement.
In this way, the submitted ideas can be
reflected in our bank’s systems.
This enables a strengthened utilization of
regulations, while making them practical
and conducive to work.
Providing Various Ethical Management
Training Materials and Conducting Re-
lated Training
We encouraged our staff to practice
autonomous ethical management
through practical training such as the
‘100 Questions and Answers on Ethical
Management‘, and the distributed ‘Ethical
Compliance Practices‘ manual.
It is a specific course offered through
case analyses. Ad hoc training was in-
tensified for the staff members who
required additional support in better
understanding ethical management, in-
cluding new hires.
Issues governed by
Compliance Dept.
Personal Credit Information
Legal
Anti-Money Laundering
Compliance
Ethical
045
2013 ANNUAL REPORTSmile for All Customer protection
Woori Bank’s core values are putting customer’s happiness first, pioneering and challenging
itself for creating a better future, leading the way in creating a healthy financial order, and fos-
tering talents first.
Among them, our CEO puts ‘customer happiness’ on top of the agenda. He emphasized the sig-
nificance of protecting customers during management strategy meetings and during his New
Year’s speech. For the first time in the banking sector, the Consumer Protection Center was
formed as an independent unit to protect consumers. Various activities take place to spread
and implement such genuine customer caring philosophies throughout the organization.
046
woori bank The Consumer Protection Center con-
sists of three teams: the Consumer Pro-
tection Team that sets basic policies for
consumer protection and devises action
plans; Cham (responsible) Finance Imple-
menting Team that prevents consumer
damage while empowering their rights
by exploring and improving unreason-
able practices continuously and the Om-
budsman Team which registers customer
complaints, promptly and fairly handling
them.
Woori Bank’s Consumer Protection
Center reaffirms the Bank’s leading
presence in the financial market in
consumer protection.
Woori Bank launched the Consumer
Protection Center for the first time in
the banking industry in November 2010,
which was headed by the Deputy Presi-
dent, an independent division exclu-
sively in charge of consumer protection
without any impact from marketing. It
has a total of 33 employees, which is the
largest scale in Korea. Its fulfillment of
CSR and genuine consumer protection
activities were fully recognized, winning
the Grand Prize in the comprehensive
sector at the First Consumer Protection
Awards presented by Korea Economic
Daily, one of Korea’s top economic media
in 2012.
The year 2013 witnessed Woori Bank’s
passionate engagement in consumer
protection.
The ‘Consumer Protection Index’ was
adopted to be stringently aligned with
performance evaluation for areas lacking
in consumer protection upon evaluat-
ing business units (KPI). The ‘Consumer
Protection Window’ was launched, while
rooms of branch heads turned into ‘Con-
sumer Protection Consulting Rooms.’ It
was to better address customer com-
plaints promptly in branches as custom-
er contact points. The Consumer Protec-
tion Center paid visits to 298 branches to
enhance the mindset for consumer pro-
tection and prevent any complaints, and
conducted training accordingly. Along
with the employee training, a video clip
titled ‘Damage of e-Banking Scams and
Preventions’ was produced to training
consumers and protect them from such
scams. The video is played on Woori
Bank’s website and in branches, prevent-
ing potential fraud damage, and improv-
ing customer convenience through 56
projects to improve ‘Cham (responsible)
Finance and institutions.’
Approval of the Consumer Protection
Center upon product development was
put in place to promptly resolve custom-
er damage and reflect consumers’ views,
while incomplete sales are minimized by
establishing a product sales process.
planS For 2014
Numerous changes are expected in con-
sumer protection in 2014: enactment of
the Financial Consumer Protection Act,
and separation/independence of the
Financial Consumer Protection Agency
from the Financial Supervisory Service.
Woori Bank plans to implement 10 proj-
ects in four areas for an early response.
First, it is to enhance a customer-centric
mindset among employees.
‘The Charter on Consumer Protection’
will be prescribed, serving as the basis
for setting policy directions in promoting
consumer protection. The Charter covers
consumer right protection, product de-
velopment, product sales and develop-
ment of professional competencies for
employees.
Customer happiness managers standing
at the forefront of consumer protection
on sites will be organized in the name of
‘Cham (genuine) Forum.’ This will drive
more voluntary and proactive consumer
protection activities and this year, visits
will be made to sites for educating com-
plaint prevention.
Next, we will improve the performance
evaluation system.
Upon evaluation of branches and de-
partments of the head office, the impact
of consumer protection will be revised
upwards and reflected on significantly.
Measures will take place so that prior
reporting of complaints and compensa-
tion for customer damage can improve,
resolving customer complaints promptly
and damage can be compensated ade-
quately. Programs to minimize customer
inconveniences are expected to be
developed and operated by resorting to
fundamentals of consumer protection.
047
2013 ANNUAL REPORTSmile for All Banking World of Vibrancy
“Hoping to receive accessible and vibrant
banking services closest to my needs”
048
woori bank “Providing easy and convenient smart banking services
is essential in fulfilling the needs of our customers any-
time and anywhere.”
Woori Bank reaches out to our customers by providing advanced smart bank-
ing systems Moreover, our bank reinforces on-site business accessibilities to
establish rapport and friendship so that the needs of our customers can be
quickly identified and innovative customer oriented solutions can be offered
A Safe Banking World
instantly.
Aiming to become a more vibrant bank with higher accessibility by utilizing
advanced smart banking or on-site business visits, Woori Bank continues to ex-
pand our presence to all walks of life domestic or abroad.
s
m
i
l
e
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A
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049
2013 ANNUAL REPORT
Smart Banking
Smart Banking Business Division is the highest-level division of future banking services at
Woori Bank and our bank enables access to financial services for customers anytime, any-
where, through various medium. The division is in charge of strategy setup for smart bank-
ing, as well as the exploration of new markets.
Seeking to make a rapid response to the smart banking market that demonstrates ex-
ponential growth in particular, the Smart Channel Strategy Department was formed. In
December 2013, the Customer Marketing Center was brought under it for the sake of inte-
grated marketing in accordance with the organizational reshuffle and expansion plan.
As of 2013-end, 11.37 million customers have subscribed to and utilized Internet Banking
& Smart Banking services. Along with 7,000 ATMs that enable the convenient subscription
and usage of Woori Bank products for retail and corporate customers, we created ‘a bank
that is always close to customers’ by securing state-of-the-art technologies utilized in smart
phones and the Internet.
Total Number of Customers Subscribed to
Smart Banking
(Unit: million)
48.5%
6.64
4.47
2012
2013
reVieW oF 2013
Smart Banking Business Division opened
new Internet banking services in April
2013 so that anyone can access them re-
gardless of their OS type, thus providing
convenient smart banking services to
customers. As a result of implementing
the iTouch loan service, enabling loan
extensions via Internet/smart banking
anytime anywhere without having to vis-
it a branch, the service ranked first in the
M/S in non-face-to-face product sales
as of the end of 2013. Meanwhile, smart
payment programs and ATM services
for Onnuri Gift Certificates for traditional
markets were in place, contributing to a
reinvigoration in these markets.
New Internet Banking Service
Aiming to provide non-discriminatory
banking services to anyone, Woori Bank
upgraded its Internet banking service
in April 2013. For the visually impaired,
voice recognition service for Internet
banking transactions including inquiries
and transfers is now available. For those
who cannot use the mouse effectively,
keyboard-based financial transactions
are now enabled. As such, the Bank re-
aligned banking services to be non-dis-
criminatory in access and convenience.
Moreover, online banking was upgraded
to be accessible via any device on any
browser. As a result, Woori Bank proudly
acquired the Web Accessibility Certifica-
tion Mark in all sectors of Internet bank-
ing including corporate banking for the
first time in the banking sector on April
10, 2013.
Taking the Lead in the Smart Banking
Market
At a time when the number of smart-
phone users exceeds 37 million, custom-
ers demand faster and more convenient
services. In 2013, wide-ranging loan ser-
vices were offered that require no visit to
branches, including apartment loans and
housing loans. Along with the launch of
‘Woori Global Banking’ for foreign cus-
tomers whose number is on the uphill,
‘One Touch Notice’ service to provide
various banking information is available
to cater to diverse customer needs. The
‘One Touch Notice’ gained high populari-
ty among customers since its subscribers
surpassed 550,000 within 70 days from
its launch. Woori Bank is definitely lead-
ing the smart banking market by ranking
first in smart banking subscription rate
(34%) vis-à-vis the number of total cus-
tomers, and winning various awards with
its smart app.
Opening Preemptive Security Service
for Customer Protection
Woori Bank offers the most secure bank-
ing services to customers with preemp-
tive security services. On September
050
woori bank Total Subscription Rates of Smart Banking
(Unit: %)
8.7%
33.7
25.0
2012
2013
26, 2013, the e-banking fraud preven-
tion service made its successful debut,
enabling the Bank to make immediate
responses to new types of e-banking
scams. ‘One Touch Service’ for transfer
to only designated accounts is the first
attempt in the banking sector in Korea.
The Financial Ser vices Commission
benchmarked the model for its soon-to-
be-launched ‘new account designation
service’ to be applied throughout the
banking sector. As such, the leading
edge security services of Woori Bank are
available to all.
Leading the Market in the e-Corporate
Banking
Woori Bank provides pioneering services
in e-corporate banking which befits its
leadership in corporate banking. Focus-
ing on providing customized and spe-
cialized services in 2013, the WIN-CMS
(Woori Internet-Cash Management Ser-
vice) and Woori ERP (Enterprise Resource
Planning) were upgraded to reflect
customer needs. Moreover, the Bank also
provided business district analysis within
the ‘Woori Win Square’, a multi-purpose
service for the self-employed. ‘WIN-CMS
for Taxation Support’ for small-scale mer-
chants was launched, while a function
to audit the usage records of corporate
cards was installed within the WIN-CMS.
The ‘Labor Cost Payment Service’ also
came into being for construction labor-
ers so that their labor wages can be
securely paid without delays. As such,
Woori Bank steadily maintains its com-
petitiveness in the e-corporate banking
sector by developing and upgrading
new services.
planS For 2014
In 2014, the Smart Banking Business Divi-
sion’s targets are to provide the very best
banking services that satisfy customers
and are available via all devices and envi-
ronments.
1) To provide most convenient and ac-
cessible smart banking services by re-
establishing smart banking systems, and
securely protect customer assets through
various e-banking security services in-
cluding prevention of phishing and pre-
vention of fraudulent transfers through
the analysis of transaction patterns
2) To provide customer-satisfying bank-
ing services by developing on/offline
combined new non-face-to-face market-
ing techniques and CRM services
3) To continuously explore new business
models by converging with other indus-
tries to explore new markets
Woori Bank will become the number one
bank which provides best smart banking
services with customer satisfying ser-
vices and products at all times.
051
2013 ANNUAL REPORTSmile for All Corporate Banking
Corporate Banking Business Unit is in charge of services for corporate customers, including
a group of Korea’s top large enterprises such as Samsung, LG and POSCO.
Total Assets of Corporate Banking-end 2013
Corporate Banking Business Unit caters to the diverse financial needs of corporate custom-
ers in a timely manner by managing the branch heads of each company as Corporate Bank-
ing specialists who enabled Woori Bank to be number one in Korean Corporate Banking.
The unit also manages heads of Corporate Banking Centers in charge of catering to affili-
ates of corporate clients and partner companies, and operating retail business for employ-
ees, while operating the IB Division to cover project financing.
As of 2013-end, we provided exceptional services to the largest groups of large enterprises
in Korea. Corporate Banking Business Unit feels confident in having provided the best
financial services to our corporate customers so that they were able to become global play-
ers for the past 115 years. Greater efforts have been made to extend more of our expertise
to a larger number of customers.
reVieW oF 2013
In 2013, Corporate Banking Business Unit
strove to satisfy the financial needs of
large enterprise customers.
Currently, various financial needs are
explored and the relationships with
the largest corporate customers are
strengthened through Woori Diamond
Club, a meeting of the heads of the
country’s largest multinationals.
New product development continued
apace for companies to enjoy shared
growth, and a culture of cooperation has
been spread as corporate social respon-
sibilities and roles gain a greater spot-
light.
As of 2013-end, the unit posted total
assets of KRW 16.8 trillion, Operating
Income of KRW 572.7 billion and an ex-
port/import volume of USD 278.5 billion.
Continuously Strengthening Relation-
ships
As corporate customers grow into
global players, their financial needs have
promptly and diversely changed.
Woori Diamond Club, a meeting of the
heads of the country’s largest multination-
als, has been up and running since 2003.
The club’s 11th anniversary marks a time
to strengthen our relationships with our
corporate customers, and provide services
to respond to changes in the environment
by identifying the financial needs of our
customers in a timely manner.
Extending Support for Large Enter-
prises/SMEs
At a time when CSR(Corporate Social Re-
sponsibility) is emphasized, Woori Bank
signed cooperation agreements with
large enterprise customers, and devel-
oped product packages to extend funds
to SMEs with low interest rates. Through
the Partnership Loan for Large Enter-
prises and Partnership Guarantee Loan
for Large Enterprises launched in August
2008, funds worth KRW 665.7 billion
have been extended to 743 companies
in total, as of 2013-end. Serving the larg-
est number of large enterprise custom-
ers in Korea, we utilize a broad customer
network and contribute to the shared
growth of large enterprises and SMEs.
Developing Products to Improve Fi-
nancial Soundness
With the adoption of the IFRS, compa-
nies are required to record bills bought
in foreign currencies as debts, implying
that exporters with a large volume of
such bills would be subject to poorer
financial soundness. As such, we devel-
oped a customized product for export-
ing customers by buying out export
account receivables D/A(Document
against Acceptance) for high-networth
large enterprises and overseas subsidiar-
ies in main debtor groups on a Non-Re-
course Condition (before acceptance of
the shipping document and fix maturity
date by the importer). With this in place,
corporate customers can avoid record-
ing the liability for bills bought account
(resulting from the adoption of the IFRS),
and improve their financial soundness.
planS For 2014
The Corporate Banking Business Unit
plans to achieve qualitative growth
through customized business for each
specific category. Category-specific
052
woori bank Woori Bank is the major creditor bank of 16 large enterprises-2014. April
(Total number of large enterprises under major creditor bank manage-
ment: 42)
markets will be made distinctive, syner-
gies will accelerate, fee business will be
bolstered and risks will be efficiently
managed to achieve the goal. Optimized
financial services will be provided for
companies based on category-specific
factors and investment plans. Moreover,
synergies will be maximized by exploring
high-performing partner companies and
expanding retail transactions for em-
ployees. Non-interest income will scale
up by arranging and involving more in
IB, including infrastructure finance and
acquisition finance as well as intensive
sales in niche markets on F/X, e-banking
and derivative transactions. Assets will
be cleaned up by shutting off the influx
of low profit generating assets, and
financial soundness will be enhanced
through risk management on the basis
of perceiving risk signals.
053
2013 ANNUAL REPORTSmile for All SMe Banking
SME Banking Business Unit is in charge of financial services for corporate customers, espe-
cially SME customers. The work scope of this unit includes the supervision of SME business
strategies, the exploration of new markets and the management of specialized personnel.
As of the end of 2013, there were approximately 890,000 SME customers, whose total assets
under management amounted to KRW 67.8 trillion.
Woori Bank provides competitive products, diverse financial and non-financial services to
better satisfy SME customers. The SME RM (Relationship Manager) system, a channel of SME
banking pool specialists, is available to provide the best financial services in corporate bank-
ing. Along with Corporate Banking Business Unit and Consumer Banking Business Unit, SME
Banking Unit significantly contributes to higher performance for the Bank, attracting SME
partners of large enterprises that use Woori Bank and also SMEs’ employees.
In 2013, in particular, the SME Support Center was formed within the SME Banking Business
Unit to support financially struggling SMEs in a greater scale amid the unstable economic
environment both domestically and abroad.
Total Number of SME Customers
9.2%
891,367
816,119
2012
2013
Total Assets of SME Banking
(Unit: trillion)
20%
67.8
56.5
2012
2013
054
woori bank reVieW oF 2013
The SME Banking Unit led marketing
strategies focusing on attracting new
high-networth SMEs and securing their
retention. As in 2012, key categories
were targeted such as policy financing,
guarantee secured loans and loans for
equipment in 2013. For higher satisfac-
tion and service levels for SME custom-
ers, the existing preferential system was
expanded along with a greater focus
on training and developing specialized
workforce for SME banking.
Intensive Search for High-yield SMEs
and Prevention of Churn
The Woori Love for Company Loan
launched in February 2013 garnered an
unbelievable record of KRW 7.9 trillion
for its balance at the end of 2013, target-
ing high-networth SMEs and offering
competitive interest rates and preferen-
tial ceilings. The SME Banking Business
Unit provided wide-ranging marketing
data on high-networth SMEs on sites
and launched new programs for preven-
tion of churn, especially targeting part-
ner companies of high-networth large
enterprises and SMEs selected in foster-
ing programs of a government agency.
The number of high-networth customers
in the level of BBB and above increased
from 194,569 at the 2012 year end by
34,107 to 228,678 at the 2013 year end.
Targeted Marketing on Strategic Cat-
egories
As a result of the SME Banking Business
Unit’s focus on policy financing and col-
lateral secured loans, the balance for
each increased by KRW 894 billion and
KRW 1,016.2 billion respectively, in 2013
year-on-year.
The unit signed new agreements worth
KRW 783 billion with eight local govern-
ments and public institutions in 2013,
bolstered competitiveness in interest rate
for policy financing for on-site support,
and conducted various practical training,
seeking to scale up policy financing. The
balance for on-lending loans targeting
high-networth SMEs among policy fi-
nancing products showed an outstanding
performance of an increase of over 370%,
that is, KRW 903.4 billion year-on-year.
Upgraded Preferential Service and De-
velopment of Specialized Workforce
In 2013, the SME Banking Business Unit
launched the ‘Woori Honors Forum’, a
preferential system for customers to offer
diverse non-financial services to more cus-
tomers. A total of 140 SMEs are selected
and supported as members, while the
number of members for the existing Woori
Best Members was raised 218 to 627.
First-rate banking services are available
to customers through continuous selec-
tion and training of SME RMs special-
ized in SME banking. As of the end of
2013, 948 SME RMs are working in 806
branches along with a reserved pool of
601 RMs.
SME Consulting and Project Scale-up
Woori Bank’s corporate consulting ser-
vices have the longest history in the do-
mestic banking sector. Since their launch
in 2001, about 1,200 projects have been
successfully completed. In 2013, 127
consulting projects took place, signifi-
cantly contributing to sales and operat-
ing income of the SMEs involved.
In 2013, the SME Banking Business Unit
signed 10 cooperation agreements with
major government agencies and local
governments to better support SMEs.
The SME Support Center was established
within the unit as the Bank strived to ex-
pand support for SMEs in need of help,
including small merchants.
planS For 2014
In 2014, the SME Banking Business Unit
plans to launch products, and new cus-
tomer preferential and management
programs. This will attract new custom-
ers, especially high-networth SMEs and
prevent customer attrition. Profitability
will be bolstered through various initia-
tives: offering customized products to
expand auxiliary transactions including
FX in export/import for the existing cus-
tomers in loan transactions, intensifying
relevant management programs, and of-
fering consulting services directly linked
to higher business performance. In order
to make the asset structure sounder,
Woori Bank intends to spotlight the
stepping-up of guarantee secured loans
and settlement loans, and run compre-
hensive management programs to avoid
non-performing loans.
055
2013 ANNUAL REPORTSmile for All
institutional Banking
Institutional Banking Business Unit is in charge of financial services for the central govern-
ment, local governments and public agencies.
Total Deposits of Institutional Banking
-end 2013
Institutional Banking Business Unit is in charge of financial services and strategies for insti-
tutional customers. The unit is equipped with the Institutional Sales Strategy Department,
to cater to the central government, local governments and public agencies, and the Public
Fund Sales Department, to manage the municipal and provincial treasuries of local govern-
ments.
Moreover, Institutional Banking Business Unit provides topnotch financial services to insti-
tutional customers by being the only unit in the banking sector to utilize specialists in insti-
tutional operations.
As of 2013, our institutional customers included the Seoul Metropolitan Government and
its 25 district offices, the Korea Rail Corporation and the Korea Student Aid Foundation. The
presence of such customers proves to endorse our position as Korea’s largest primary bank
for public agencies.
reVieW oF 2013
In 2013, the Institutional Banking Busi-
ness Unit laid the foundation for Woori
Bank to progress as a global leading
bank by being designated as an en-
trusted bank for stock assets and a bank
for foreign currency reserves for the Na-
tional Pension Fund, which ranks third in
the world as a pension fund. Woori Bank
actively sought new growth engines by
attracting new institutional projects. For
instance, new projects for the new gov-
ernment were explored, the Bank was
selected in the bidding for bank opera-
tors at the Gimpo International Airport
and also won the bid as a bank commis-
sioned for exchanging principle and in-
terest for the Korea Securities Depository.
As of 2013-end, Institutional Banking
Business Unit operated deposits totaling
KRW 19.1 trillion and loans worth KRW
1.6 trillion, while managing the number
of new institutional customers (101 cus-
tomers) in 2012.
Designated as an ‘Entrusted Bank for
Stock Assets’ and a ‘Bank for Foreign
Currency Reserves’ for the National
Pension Fund
The National Pension Fund’s asset portfo-
lios mostly cover stocks, bonds and alter-
native assets, and last September Woori
Bank was selected as an entrusted bank
for managing the fund’s stock invest-
ments amounting to KRW 75 trillion. In
October, the Bank was selected as a gen-
eral treasury bank for foreign currency
reserves for the National Pension Fund
to exclusively cover its foreign currency
transactions for the next three years from
July 2014 to July 2017.
Hunting for New Projects from the
New Government
Woori Bank was selected as ‘an exclusive
bank for R&D projects’ initiated by the
government. The business agreement for
the exclusive bank stance to commer-
cialize R&D projects was sealed in May in
the presence of heads of agencies relat-
ed to the Ministry of Trade, Industry and
Energy (MOTIE). In September, the Bank
was chosen as one of the treasury banks
for the Real-time Cash Management Sys-
tem (RCMS) managing R&D funds worth
about KRW 2.7 trillion for the MOTIE.
A business agreement was also signed
with Korea Foundation for the Promo-
tion of Private Schools. The Bank now
manages SPC accounts for 19 university
dormitories as the Bank partakes in the
program of ‘halving dorm fees’, a project
under one of the new government’s
pledges. Woori Bank could also pave the
way for customer expansion covering re-
lated companies and students after new
dormitories are constructed.
Search for New Growth Engines by Ini-
tiating New Projects
Institutional Banking Business Unit not
only provides banking services for institu-
tional customers but also offers business
opportunities aligned with new projects
of institutions for SMEs and individuals. In
2013, the Bank attracted many new proj-
ects: being selected as ‘an entrusted bank
for funds for startups’ of Korea Institute
of Start-up and Entrepreneurship Devel-
opment under the Small and Medium
Business Administration; taking part in
the subcontract management system for
the Public Procurement Service; signing a
056
woori bank business agreement on the e-settlement
service in the Internet bidding for Korea
Asset Management Corporation.
planS For 2014
The year 2014 is a critical year for the
Institutional Banking Business Unit since
attention must be on re-winning the bid
to be a treasury bank for district offices of
the Seoul Metropolitan Government. It
will mark 100th anniversary for the Bank
to have served as a treasury bank for the
city government. By being re-selected
as the treasury bank for the district of-
fices based on the know-how in stable
management for the city government,
Woori Bank will further intensify ties with
the Seoul Metropolitan Government and
institutions under it. The Bank will also
steadily explore related projects to be
favorable to local residents with benefi-
ciary banking services.
In 2014, public institutions’ transfer to
local areas will be underway, so Woori
Bank will secure its business network
nationwide by launching new branches
in each ‘innovation city,’ focusing on insti-
tutional banking business that leads the
trend in the age of decentralization.
Major Institutional Customers of Institutional Banking
• Local Government
• Public Agency
057
2013 ANNUAL REPORTSmile for All investment Banking
IB Business Unit (currently IB Division) launched in January 2002 was reshuffled under Corpo-
rate Banking Business Unit in 2012, playing a leading role to date in the domestic IB market.
IB Division provides a variety of IB services including syndicated loans (M&A, SOC, etc.), se-
curity investments (collective investment securities, equity-linked securities, etc.),and the
granting of credit.
With the longest history in Corporate Banking among domestic banks, Woori Bank lever-
ages strong ties with corporate customers, offering them customized financial structures
that cater to the needs of the project funds they pursue.
For the first time as a Korean bank, Woori Global Market Asia Ltd. was established in October
2006, specializing in overseas IB investment in Hong Kong. As such, Woori Bank has proac-
tively tapped into overseas IB markets by scaling up the capital stock in October 2013.
Total Assets of Investment Banking-end 2013
Others
1.0%
Loans
43.3%
Securities
18.4%
Off-balace
sheet items
37.3%
058
woori bank reVieW oF 2013
The global economic circumstances that
were aggravated due to the financial
crisis in the Eurozone started to turn
around with the gradual recovery of the
real economy driven by low interest rates
and quantitative easing in advanced
countries. In Korea, major annual macro-
economic indicators show a positive
sign. Nevertheless, industrial risks have
deepened in construction, shipbuilding,
maritime and steel, while marginal com-
panies step up in numbers. As such, the
IB Division carried out selective business
initiatives, considering stability and prof-
itability. Specifically, cooperative ties with
financial institutions, government agen-
cies and enterprises was concentrated
more, while outstanding performance
was achieved in infrastructure finance
including power generation/energy and
SOC thanks to intensive business man-
agement.
As a result, the division holds KRW 11.6
trillion for the assets under management
(including off-balance sheet assets). The
proactive management of low-profit
assets and potentially insolvent assets
enabled the rebalancing of asset port-
folios, and raised asset soundness. The
profitability of the assets held rose, by
increasing the volume of loans in KRW,
especially in cases of high-profit projects.
Investment Banking Organization
investment Banking Division
Besides the interest income which has
been regularly generated, high networth
loans and securities previously invested
have been recovered, resulting in size-
able amounts of dividends and profits
on sales.
planS For 2014
In 2014, the global economy is expected
to turn around by phase, but instability is
still rampant in the global financial market
due to tapering in quantitative easing in
the U.S. which results in currency crises
in emerging countries, and risks in soft
landing for the Chinese economy. Korean
economy is evaluated as a fundamentally
robust one, but is vulnerable to the eco-
nomic and financial environments due
to its high dependency on export and
proneness to external factors.
In the IB Market, transactions in infra-
structure finance will still flourish includ-
ing restrictions for marginal companies,
M&A for tapping into new projects,
power generation/energy to improve
the power demand and supply and SOC
to secure social infrastructure. In particu-
lar, the recent government measures to
make public corporations’ management
more efficient through asset sell-off and
debt reduction are expected to scale up
the IB market.
IB Division will continue to make finan-
cial arrangements for, and take part in,
infrastructure finance including power
generation/energy and SOC, and M&A
based on thorough and considerate
feasibility reviews as well as conventional
business domains including credit exten-
sions for high-networth corporate cus-
tomers. Moreover, in aiming to explore
new markets for IB, fee income will scale
up by participation in alternative energy
projects including offshore wind power
and financial arrangements for projects
where new environmental technologies
are applied. Overseas IB business will
flourish as the Bank jointly takes part in
overseas business aligned with policy
finance institutions, arranges the issu-
ance of foreign currency bonds of high-
networth companies through the Hong
Kong IB whose capital stock was raised
in 2013, and explores and takes part in
high-networth SOC projects and syndi-
cations.
The IB Division will contribute the ut-
most endeavors under the slogan, ‘Cre-
ativity, Passion, Right into Business Sites.’
The goal is to become Korea’s iconic
investment bank driven by the Commer-
cial and Investment Bank (CIB) model, an
alternative to the American style ‘invest-
ment bank’ through the convergence
of corporate banking and investment
banking.
Investment Banking Dept.
Project Finance Dept.
Woori Global Markets Asia Ltd. HK
IB Strategy
Corporate Finance
Shipping & Aviation
M&A
Principal Investment
Real Estate PF
ABS
SOC
Power & Energy
059
2013 ANNUAL REPORTSmile for All A Unifying Bank
“Hoping to be served with a Unity of
Hearts in overcoming any future obstacles”
060
woori bank “We seek a wise path for creating a family-like banking
where leaders and colleagues work closely, side-by-side
with united mind and soul”
It is critical for leaders to take the reins when times are bad. What is just as im-
portant is the unity among colleagues. Once all employees gather their forces
together into ‘unity of hearts,’ there is no barrier they cannot overcome.
A Safe Banking World
All of us at Woori Bank will have our hearts converged into one as we “run and
laugh together” with our customers to overcome any obstacles and achieve
number one customer satisfaction.
061
2013 ANNUAL REPORTSmile for All Consumer Banking
Consumer Banking Business Unit is Woori Bank’s highest-level department in Consumer
Banking that offers financial products and services to retail customers.
It is in charge of conducting overall business strategies for retail customers, finding new
markets, managing the Consumer Banking Business Unit and setting business channel
strategies. We run a separate Division within the Consumer Banking Business Unit for
wealth management that require more specialized services.
As of 2013-end, we offer our top-notch products and services to about 19 million custom-
ers in 989 branches. The Consumer Banking Business Unit strives to offer as many products
and services possible to our current and future customers by continuously tapping into
new markets and engaging in CRM(Customer Relationship Management) activities.
Total Deposits of Consumer Banking
(Unit: KRW trillion)
11.4%
73.7
66.1
2012
2013
reVieW oF 2013
With a greater number of new custom-
ers at Consumer Banking Business Unit,
about 1.15 million new customers joined
Woori Bank. Agreements have been
signed with high schools on school
banking school cards in order to secure
future customers. This is a way to attract
not only high school students but also
parents and teachers.
Seeking to cater to increasing customer
needs, portable branch mobile devices
have been adopted and are now up and
running. These are to provide convenient
services by visiting where customers are,
regardless of time and space. Branches
specialized for office workers and those
specialized in microcredit are open to
reflect diverse customer needs as the
financial environment transforms.
‘School Attack’ Targeting High Schools
At a time when business operations tar-
geting students as customer prospects
062
are subject to heated competitions,
Woori Bank adopted a program to at-
tract high schools (i.e. schools, students,
parents and faculty) for the attraction
of new and potential customers. ID stu-
dent cards are issued that can be used
as check cards for students through an
agreement with the high schools.
Under the ‘School Attack’ program that
began in 2013, Woori Bank issued stu-
dent ID cards available as check cards for
142,152 students in 259 schools as of the
end of 2013. The Bank opened new pay-
ment accounts so that they can safely
and conveniently manage their allow-
ances. Special lectures on finance have
been offered for students and parents
in high schools. The Bank also helped
set up IT-based smart/safe campuses
through agreements with high schools,
thus contributing to a stronger social
safety network.
Adopting and Operating Portable
Branch Mobile Devices
‘Portable Branches’ are cutting-edge
banking devices which create a branch
environment anytime, anywhere via
the LTE telecommunication network so
direct visits can be made to where cus-
tomers are to offer the same services as
in other branches. The pilot program be-
gan in April 2013, and now 30 portable
branches are up and running as of the
end of 2013, and the number will go up
to 40 in the first quarter of 2014. They are
likely to significantly contribute to busi-
ness activities that approach customers
to meet their specific needs, and lead
the rapidly changing financial market
through continued expansion.
Optimization of the Channel Network
Amid the evolving financial environ-
ment, branches have been selected in
districts with new growth potentials, and
low-yield and low-presence branches
woori bank Total Loans of Consumer Banking
(Unit: KRW trillion)
7.9%
73.4
68.0
2012
2013
have been transferred or relocated.
The Bank has opened 989 branches as
of the end of 2013: that includes 21 new,
25 integrated and 17 relocated ones. A
basis to attract new customers is in place
through an efficient branch network.
The ‘9 to 7 Branch’ is in operation as a
specialized branch for office workers
to enhance their financial accessibility.
Meanwhile, ‘Woori Hope Sharing Center
Sanggye Branch’, a branch exclusively for
microcredit, and 38 windows exclusively
for microcredit services are now open.
Non-face-to-face channels have scaled
up, and unmanned automation systems
are available for better customer satisfac-
tion with 233 new ones, so as of the end
of 2013, 2,166 systems are available, and
224 old ones were replaced.
planS For 2014
In 2014, Consumer Banking Business Unit
plans to concentrate on attracting new
customers to maintain a stable growth
momentum despite the continuum of
low growth and low interest rates, and
the highly competitive business environ-
ment.
While inducing future customers includ-
ing infants, children and high school
students, the Bank will provide products
and services to attract employees of
high-yield enterprises through the is-
suance of employee ID cards. A plan
for business alliance with military units,
police stations, schools and hospitals will
take place to attract their employees as
new customers.
Top priority will be also be on securing
profits by continuously attracting the
flow of funds with increases in settle-
ment accounts for transfers of utilities
fees, telecom fees and apartment ex-
penses.
Nationwide Branch Network-end 2013
(989 Branches)
Kangwon
(11)
Chungbuk
(15)
Gyeongbuk
(23)
Daegu
(28)
Ulsan
(9)
Busan
(56)
Gyeonggi
(220)
Inchon
(41)
Seoul
(470)
Chungnam
(23)
Sejong
(4)
Daejeon
(23)
Jeonbuk
(12)
Gwangju
(14)
Jeonnam
(10)
Jeju
(3)
063
2013 ANNUAL REPORTSmile for All real estate Finance
Real Estate Finance Business Unit is in charge of real estate finance and National Housing
Funds for the Bank.
For systematic and professional management of real estate finance, the unit had been pro-
moted into the Real Estate Finance Business Unit from the Housing Finance Division within
the Consumer Banking Business Unit.
We also manage the National Housing Fund of the Ministry of Land, Infrastructure and
Transport as a general treasury bank.
We try and cater to various customer needs by providing products served from Woori Bank
account products from our bank, and also products provided by National Housing Fund ac-
count available for our low-income consumers.
M/S of Demand-side Housing Subscription
Loans -end 2013
49.7%
The National Housing Fund Loans
(Woori Bank)
(Unit: KRW trillion)
3.9%
48.0
46.2
2012
2013
064
woori bank reVieW oF 2013
The Real Estate Finance Business Unit
dominantly ranked 1st in the M/S of the
National Housing Funds.
Excellence in the business, not only in
2013, but also for the past five years, has
put us in the spotlight to be re-elected
as a general treasury bank for the Nation-
al Housing Fund. This would enhance
our capability in providing a greater di-
versity of real estate finance products to
our customers. We also made preemp-
tive responses to the financial environ-
ment even in the elongated real estate
economic downturn leading the efforts
to generate the demand for real estate
finance in Korea with new products and
services.
Re-elected as a General Treasury Bank
of the National Housing Fund
The National Housing Fund project is
important in broadening the options of
products for consumers (including the
socially vulnerable), of real estate finance.
Woori Bank has taken the lead in seam-
lessly procuring and executing funds as
a general treasury bank of the National
Housing Fund.
As of 2013-end, Woori Bank had a market
share of 49.7% in loans for subscribers
and 30.1% in savings for housing sub-
scriptions. Throughout 2013, 1.32 million
new customers braced themselves for a
dream to own a house with savings for
housing subscriptions.
After a fierce competition, Woori Bank
was consequently reelected as a general
treasury bank to manage funds worth
KRW 89 trillion. Beginning in 2013, we
laid the foundation for more custom-
ers to use the products of the National
Housing Fund for the next five years.
Stably managing real estate finance-
related assets
At a time when the negative real estate
market has been elongated and the
housing-related assets of customers and
the Bank are under threat, we are funda-
mentally driven to preemptively better
manage the current uncertain situation.
We strove to enhance the fundamentals
of loan assets, while reducing risks, by ac-
tively inducing non-deferred installment
loan repayments, instead of deferring
balloon repayments in a lump sum.
In 2013, the amount of guarantee-
secured mortgage loans increased by
KRW 4.6 trillion compared to 2012. In do-
ing so, we managed real estate finance
assets in consideration of soundness and
profitability even under the economic
downturn.
Leading the Domestic Real Estate Fi-
nance Market
The Real Estate Finance Business Unit
spearheaded its efforts to develop prod-
ucts and reform the system in order to
make preemptive responses to changes
in the financial market in 2013.
We are actively engaged in supporting
the soft landing of household debts and
the house-poor, which are spotlighted
as social issues. This is done for the first
time in the Korean financial sector, by
conducting a rental scheme following
trust services. In order to make preemp-
tive responses to the financial environ-
ment where the demand for small
houses is rising amid increases in one to
two strong households, we contributed
to facilitating the supply of city-type resi-
dential housing, by proposing various
deregulatory measures to the Ministry of
Land, Infrastructure and Transport.
planS For 2014
2014 is expected to witness a sluggish
real estate market and low interest
rates trend in the financial market. Thus,
competitions over interest rates among
banks in the real estate finance market
will become fiercer, while the profit-
ability of banks in the real estate finance
asset sector weakens. Despite such
challenges in the financial environment,
we will make qualitative improvements
in the assets on end, while leading real
estate finance with a variety of product
portfolios.
The Real Estate Finance Unit will con-
tinue to dominate the market share by
ranking the 1st in the National Housing
Fund. We will strive to attract new loans
for subscribers and savings for housing
subscriptions, including rental deposit
loans and first-buyer housing loans.
Moreover, we will actively support real
estate welfare projects for citizens and
make continuous efforts to facilitate
national housing in a righteous leading
way through our seasoned experience
in financing/operating funds and IT
systems. We will also jump on the band-
wagon of the government’s real estate
finance measures, while actively plan-
ning to extend funds to those who want
to purchase their own houses by secur-
ing optimal profitability and a lowest-risk
asset structure. This will enable our busi-
ness unit to expand mortgage loans to
KRW 3.5 trillion, which will play a robust
role in attracting Consumer Banking as-
sets in times of economic downturn.
065
2013 ANNUAL REPORTSmile for All pension & trust Business
Pension & Trust Business Division oversees Woori Bank’s trust and pension services. As the
retirement pension market has been expanding, the Pension & Trust Business Division was
launched in 2009 to support the efficient management of the retirement life of our retail
customers. From the initial stage of adopting the retirement pension system, distinctive
customized services have been provided through comprehensive retirement pension
consulting. We lead the retirement pension market through multifaceted efforts: provid-
ing optimal products suitable for our customers’ investment tendencies; having seasoned
investment specialists available; extending customized optimal products through specific
processes; and providing total financial services.
As of 2013, the amount of retirement pension assets stood at KRW 7.52 trillion, while 26,681
companies and 1,111,265 employees enjoyed Woori Bank’s retirement pension services.
reVieW oF 2013
In order to guarantee a stable retirement
life for the workforce and prepare for
shifting trends in the labor market (such
as a rapid aging population), we con-
ducted customer-oriented business with
a long-term perspective.
We launched the ‘Happy Life Lifetime
Bankbook’ for the retirement pension
of subscribers. The product enables
subscribers to conveniently access their
retirement annuities as they accumulate
their pensions, allowing them to check
their bankbook to see how their funds
are managed. We developed and man-
age a ‘Maturity Designated Time Deposit’,
which enables customers to designate
their individualized maturity, depending
on their financial schedule. The ‘System
for Installment Buying of Fund’, is also up
and running, whereby retirement ben-
efits that are paid in a lump sum upon
retirement pension subscriptions, are
divided into installments to be invested
in funds.
Our retirement pension systems were
upgraded to reflect the major amend-
ments in the Employee Retirement
Income Security Act. We also ensure
that all product sales are appropriate, by
providing updates and notifications to
subscribers through the Bank’s ‘Happy
Call System’.
Moreover, differentiated services are of-
fered as we extend training through the
additional development of the ‘Retire-
ment Pension Training Management
System’.
In 2013, the amount of retirement pen-
sion assets stood at KRW 7.52 trillion, up
KRW 1.49 trillion from the previous year.
The number of retirement pension sub-
scribed companies increased by 3,546,
that is, 15.3% to 26,681 as of December-
end, 2013. The number of subscribed
employees increased by 163,044, that is,
17.2%, to 1,111,265 year-on-year.
planS For 2014
Having recognized retirement pensions
as core growth industries of the future,
we are engaged in active marketing.
We do so by responding to market
changes to secure a stable customer
base and long-term profitability so we
can dominate the retirement pension
market early on. In 2014, the Pension &
Trust Business Division plans to expand
its status in the retirement pension
market by establishing a foundation for
sustainable growth and strengthening
its business competency for continuous
growth. To this end, we plan to intensify
distinctive, customer group-specific mar-
keting and ex-post management thereof,
expanding our competitiveness in asset
management services, and efficiently
supporting business operations for asset
management. We will lay the founda-
tion for sustainable growth and lead
the retirement pension market that will
be driven by an abundant specialized
workforce, supportive training systems,
various customized products and up-to-
date management expertise.
066
woori bank Total Assets of Retirement Pension
(Unit: KRW Trillion)
24.7%
7.52
6.03
Total Number of Companies Subscribed to
Total Number of Employees Subscribed to
Retirement Pension
15.3%
26,681
23,135
Retirement Pension
17.2%
1,111,265
948,221
2012
2013
2012
2013
2012
2013
067
2013 ANNUAL REPORTSmile for All Wealth Management(WM)
WM Division, under Consumer Banking Business Unit, is in charge of managing & encom-
passing Private Banking(PB) services and targeting High Net worth (HNW) customers. The
WM Division consists of WM Strategy Department providing strategies for Private Banking
services as well as supporting business operations thereof, Affiliation Product Department
managing Woori Bank’s funds and bancassurance, and WM Advisory Center offering con-
sulting on taxation, real estate and legal matters.
As of 2013, a total of 416 private bankers presented Korea’s top-notch services in com-
prehensive asset management and consulting services under an independent Private
Banking(PB) brand of ‘Two Chairs’ to 150,000 HNW customers.
Total Number of WM Customers
(Unit: million)
24.7%
148
130
2012
2013
Total Deposits of Wealth Management
(Unit: KRW trillion)
5.6%
45.6
40.0
2012
2013
068
woori bank reVieW oF 2013
The WM Division initiated globalizing
PB services, leveraging its overseas
network. The Advisory Team as Korea’s
superior advisory unit was expanded
to serve as independent units of the PB
Advisory Centers. Catering to the aging
trend, ‘100 Years of Age Research Team’
was formed, while developing exclusive
product packages and fostering experts.
As a result, the Bank won the ‘Korea
Premium Brand Award’ for four consecu-
tive years, and the Grand Prize of The
Customer-Loving Brand Awards for two
years. Despite the challenging financial
environment at home and abroad such
as continuum of low interest rate, U.S.’
tapering of quantitative easing and in-
stability in emerging countries, the WM
Division showcases the annual average
growth of 11% from 2008, and in 2013,
about 15,000 new HNW customers
joined Woori Bank.
Providing Systematic and Scientific
Financial Planning Services
There was a complete overhaul and up-
grade of the existing financial planning
system for a new system setup in 2013.
The new financial planning system was
designed to produce customized pro-
posals for customers to understand their
optimal solutions most easily and conve-
niently through scientific analysis of data.
The data subject to analysis include cus-
tomers’ transaction information, diverse
financial data, customer tendency analy-
sis and proposal of investment strategies
in consideration of financial market sce-
narios. Woori Bank is equipped with the
most advanced systems and will con-
tinue to provide the most scientific and
rational asset management solutions for
customers.
Globalizing Private Banking (PB) Services
As of 2013, Woori Bank provides custom-
ized Private Banking (PB) services, cater-
ing to customer needs in approximately
400 PB branches as well as seven PB cen-
ters. The Bank provides asset manage-
ment consulting services and real estate
seminars for local potential customers le-
veraging overseas networks. PB services
will also be globalized along with the
Bank’s expansion of overseas networks.
Intensifying Service Competitiveness
in PB Advisory Centers
Private Banking advisory centers, with
more than 20 specialists in taxation, real
estate, overseas study, migration and
investment, are located in every major
Korean city. Consulting services regard-
ing donation/inheritance, succession
of family businesses and taxation are
available, along with total services for
real estate investments, market outlooks,
overseas investments and study abroad
programs. Woori Bank’s advisory centers
are now established as Korea’s number
one financial consulting service.
Launching ‘100 Years of Age Research
Team’ in Preparation for the Aging
Trend
Woori Bank launched the ‘100 Years
of Age Research Team‘ in July 2012 in
preparation for the shift to an aging
population. The team conducts R&D on
processes and products to prepare in
advance for the financial demands of
the elderly population, which is likely to
increase in scale. The Bank launched a
product package exclusively for retirees
to prepare them for a stable post-retire-
ment life in 2012, and ‘Life-long Partner
Bankbook’ enabling dual management of
wages and pensions in 2013. In the ‘100
Years of Age Elderly Partners’, experts ca-
tering to comprehensive post-retirement
life style are selected and trained to be
available to provide appropriate services
in all branches.
Fostering Specialized Private Bankers
Continuously
Woori Bank also operates the PB Acad-
emy, with the industry’s best curriculum
for fostering competitive private bankers
since 2009. The Academy has had 155
graduates through six generations up to
2012. In 2013, the courses were aligned
and expanded into the bank-wide ‘As-
set Management Specialist’ courses,
continuously fostering 40 graduates a
year. The four-month courses consist of
CFP fostering those to be trained on the
financial knowledge required for wealth
management, and other courses to pro-
mote character buildup and manners re-
quired in providing services suitable for
HNW customers as private bankers. Oth-
er courses are competency-specific ones
divided into beginners, intermediate and
advanced levels in the PB Academy to
continuously enhance competencies.
Woori Bank’s Private Bankers as superb
asset management specialists will always
provide top class comprehensive asset
management services.
planS For 2014
In 2014, platforms for comprehensive
asset management for PB customers
will be solidified. Best PB specialists and
financial planning systems will provide
optimized asset management solutions
to customers. The PB Advisory Centers
that scaled up in 2013 will offer special-
ized consulting services in taxation,
real estate and legal affairs. The Bank’s
platforms for comprehensive asset man-
agement will evolve into ‘family office
services’ that encompass individuals, en-
terprises and families not only in invest-
ment strategies on financial products
but also in household business succes-
sion, real estate asset management, legal
consulting, and successions/inheritance,
thus serving as a genuine partner that
offers satisfaction to customers well-
being.
069
2013 ANNUAL REPORTSmile for All A Pioneering Bank
“Hoping to Enjoy a Pioneering Life with
extensive Global Banking Services”
070
woori bank “Woori Bank will become the mecca of banking beyond
boundaries and will continue to explore and implement
new banking solutions worldwide.”
We are living in a world where the rapidly changing global environment re-
quires us to overcome current obstacles and deliver innovative banking solu-
tions. Woori Bank strives to develop optimal solutions through the process
involving seasoned specialists along with the development of financial prod-
ucts befitting customers’ investment attributes. Woori Bank will firmly secure
A Safe Banking World
traditional business sectors, while seeking new banking ways to develop new
entrepreneurship. Our adventurous spirit will drive the bank to tap into new
markets and overcome the limitations of current financial systems and take
the lead in exploring a new financial solution.
071
2013 ANNUAL REPORTSmile for All Global Business
Woori Bank initiates the expansion of overseas assets and the portion of income through
optimized business for the local environment for each overseas branch. As of December
2013, advancement was made in 17 countries with 64 overseas networks including 17
branches, 6 subsidiaries (44 branches under subsidiaries) and 3 offices. The networks will
steadily broaden, centering especially on emerging countries with growth potential.
Worldwide Network (64 Networks in 17 Countries)
Zao
Woori
Bank
Russia
London
Woori
Bank
China
Gaeseong
Dubai
Bahrain
Shanghai
Dhaka(4)
Hanoi
Chennai
Yangon
Singapore
Hong Kong
Ho Chi Minh
Kuala Lumpur
Woori
Global
Markets
Asia Ltd.
HK
Seoul
Tokyo
P.T Bank
Woori
Indonesia
Sydney
LA
New York
Woori
America
Bank
Head Office
Overseas Branch (14) & Sub-Branch (3)
Overseas Representative Office (3)
Overseas Subsidiary (6)
Woori
Bank Brasil
(Brazil)
Major Highlights of Global Business -end 2013
Net Income
NPL Ratio
Delinquency Rate
Liquidity Ratio
072
woori bank reVieW oF 2013
Financial Performance
In 2013, despite the prolonged global
economic downturn and fiercer inter-
bank competition, global business per-
formance reached total assets of USD
12.6 billion, loans of 6 billion and operat-
ing income of USD 277 million. It was
due to a boost in business centered on
high-yield assets, restructuring of asset
portfolios and intensified fee business. As
a result of timely liquidity management
for foreign currencies against the taper-
ing of quantitative easing in the U.S., the
liquidity rate for overseas branches was
maintained at 121%, 7%p from the end
of December, 2012.
Stronger Overseas Networks
Star ting with the opening of Ruko
Union Sub-Branch in PT. Bank Woori
Indonesia in January 2013, Woori Bank
opened the Sydney branch in Australia,
Weihai Branch in China and Uttara Sub-
Branch in Bangladesh. This expanded
the tapping into emerging countries in
Southeast Asia showing a rapid growth
momentum. Woori Bank’s 64 global
networks in 17 countries, as of the end
of 2013, serve as the springboard for
customers to make inroads into overseas
markets, offering advanced banking
services. The Bank acquired the approval
from Bank Indonesia on the 33% equity
acquisition of Saudara Bank in Indonesia
as of the end of December, 2013. Local
networks in Indonesia are likely to in-
crease thanks to the merger of Saudara
Bank and PT. Bank Woori Indonesia. The
Bank is fully committed to completing
the ‘Pan-Asian Belt’ covering an area
from China through the Middle East to
Southeast Asia, driven by the expansion
of promising Southeast Asian networks.
Intensified Management of Overseas
Financial Institutions
The Global Business Unit focused on expand-
ing the financing volume through stron-
ger relationships with overseas financial
institutions as major financing sources,
to allow for the U.S. tapering of quantita-
tive easing. In addition, MOUs signed
with prestigious overseas financial insti-
tutions enabled the expansion of global
business opportunities.
In 2013, strategic business alliances
were settled with flagship banks, that is,
Banco Bradesco, ANZ and Emirates NBD
in countries where the Bank has already
advanced or is expected to advance (i.e.
Brazil, Australia and the UAE). This facili-
tated a stable establishment of newly-
formed overseas branches and creation
of new business opportunities.
planS For 2014
The Global Business Unit establishes the
basis for long-term growth by fostering
local personnel to set up an optimal
local business base, and developing IT
systems of global standards.
Seeking to deliver profit diversification,
the unit focuses on specialized business
for each overseas branch, development
of localized products and scale-up of
fee business. Synergies are generated
through intensified aligned business for
target customers among domestic and
overseas branches. Potentially insolvent
loan monitoring and overseas loan re-
views will be made more intensive for
the sake of sound management. Liquid-
ity management will also take place
against the U.S. tapering of quantitative
easing as the Bank seeks for continued
growth based on stability.
073
2013 ANNUAL REPORTSmile for All international trade Business
International Trade Business Division is the highest-level division in charge of foreign
exchange and trade related services for both retail/ corporate customers in Korea and for-
eigners. The unit is engaged in setting and supporting Woori Bank’s FX and trade related
marketing strategies and operates the International Trade Service Center, a BPR(Business
Process Reengineering)-specific department to help customers accomplish banking tasks
promptly and efficiently.
The Foreign Investment Support Team in charge of consulting for foreign investment was
made independent in a unit titled Seoul Global Investment Center so that increases in for-
eign investment can be quickly responded to.
The unit achieved export/import of USD 322.6 billion along with FX/remittance transfers of
USD 106.4 billion in 2013. Based on Woori Bank’s Corporate Banking expertise accumulated
over the past 115 years through transactions with the largest number of large enterprises,
Woori Bank provides consulting on export/import financing and investment.
Total Volume of Export & Import
(Unit: USD billion)
9.2%
322.6
294.4
2012
2013
reVieW oF 2013
In 2013, International Trade Business Di-
vision scaled up competitiveness in ex-
port/import and FX/remittance transfers
by fostering FX specialists and strength-
ening services. This led to increases in
export/import performance of USD 28
billion and increases in FX/remittance
transfers of USD 16.3 billion compared to
2012.
Woori Bank enhanced convenience in
accessing financial services for foreign
workers in Korea by expanding special-
ized business channels exclusively for
them and securing non-face-to-face
marketing channels. Woori Bank was
designated as the first bank managing
foreign currency reserves for the National
Pension Fund, one of the top four in the
world. The Bank reaffirmed its prestige as
a frontier in the FX market, disseminating
KRW clearing systems, so as to ensure
that KRW becomes a global currency.
Stronger Competitiveness in Export/
Import Banking and Money Exchange/
Remittance
Leveraging our strength from being Ko-
rea’s No.1 bank in Corporate Banking, we
achieved export/import volume records
of USD 322.6 billion in 2013, taking up
the market share of 25.6% among Korea’s
top eight banks.
This was a direct result of our seasoned
expertise in corporate financing and in
the development of a specialized work-
force for the past 115 years.
Woori Bank proactively responded to the
new FX market, covering wage remit-
tances of foreign workers, foreigners’ in-
vestment in domestic capital, and set up
money exchange centers in areas highly
frequented by tourists from home and
abroad. As a result, the volume for money
exchange/remittance recorded USD
106.4 billion, that is, 26.3% of the M/S.
Expansion of Channels Specialized for
Foreign Workers
In 2013, the International Trade Business
Division bolstered customer contact
points for FX catering to the customer
needs of foreign workers, while raising
convenience in transactions by flexibly
operating service hours. FX services are
even available on the weekends in areas
with a high population of foreigners in
such locations as Hyehwa-dong, Gwang-
hi-dong, Changshin-dong and Uijeongbu.
Operating hours are stretched to night-
time during a period with a high volume
of foreign customers in Pocheon in the
northern part of Gyeonggi Province.
Wongok-dong in Ansan in the southern
part of Gyeonggi Province even has an
FX Remittance Center open to provide
specialized services for foreign workers.
As a part of efforts to expand non-face-
to-face channels for foreign customers,
consulting desks within the call center
074
woori bank exclusive for foreigners scaled up: the
mere consulting has been expanded
to phone-based overseas remittance
service for foreign customers. As the
nationalities of foreign workers diversi-
fied, available languages for consulting
services was raised from three to seven.
Designated as a Bank for Foreign Cur-
rency Reserves for the National Pen-
sion Fund and Leading International
Transactions in KRW
Woori Bank was designated as a bank
for foreign currency reserves for the
National Pension Fund by partaking in
its bidding, starting from the latter half
of 2014. As a bank for foreign currency
reserves for the National Pension Fund,
one of the top four pension funds in the
world, Woori Bank will conduct such op-
erations as foreign currency remittances,
foreign currency deposit/withdrawal
and cash management service. Driven
by the know-how as Korea’s first bank for
foreign currency reserves for the pension
fund, Woori Bank’s FX transactions with
prestigious pension funds of home and
abroad are expected to flourish.
Moreover, the KRW Clearing Service is up
and running among countries for trade
settlement transactions in KRW. Due
to the expansion of trade with China,
Woori Bank launched international off-
bound settlement services for foreign
currencies in KRW and Chinese Yuan, thus
spearheading the efforts to make KRW
a global currency. As of the end of 2013,
Woori Bank held the highest number of
depositary accounts among overseas
financial institutions in KRW, while it led
to facilitate international transactions of
KRW that befit the trade volume of Korea.
planS For 2014
In 2014, the International Trade Business
Division aims to foster specialists in inter-
national trade and improve the quality
of support for it. Distinctive customer-
specific services will be provided in
export/import banking services and
money transfer/remittance as in 2013,
thus expanding the M/S. Services and
channels will be further reinforced to
cater to foreigners’ higher demand for
money exchange/remittance.
Based on the know-how accumulated by
conducting operations as a bank for for-
eign currency reserves for the National
Pension Fund, new high-yield customers
will be attracted. Therefore, Woori Bank
will reaffirm its presence as a leading
bank in FX.
New profit sources on FX will continu-
ously be explored by aligning with medi-
cal tourism projects for foreigners, facili-
tating escrow accounts and inducing
foreign direct investment.
075
2013 ANNUAL REPORTSmile for All
Financial Market Business
Financial Market Business Unit overseas the bank’s treasury, FX, derivatives, and se-
curities investment businesses.
The unit is comprised of four departments. Treasury Department manages the bank-
wide Liquidity Trading Department trades currencies and derivatives, Securities
Trading Department trades bonds and equities. Settlement Support Department
performs the back office and settlement duties.
Active in a wide range of derivatives including interest rates, currencies, equities and
commodities, Trading Department is a solid market leader among Korean banks.
076
woori bank reVieW oF 2013
In 2013, the Financial Market Business
Division focused on profitability and
liquidity The division managed NIM by
optimizing the loan-deposit ratio and
issuing low-cost financial bonds. Bracing
for the possible uncertainties in market
liquidity as a result of the Feds tapering
expectation, the Bank enhanced funding
stability by continuously borrowing cross
currencies and issuing private bonds.
As a result, the Bank’s liquidity ratios in
domestic and foreign currencies are well
above the regulatory guidelines.
We also strengthened our competi-
tiveness in FX and derivatives trading
through diversification of trading prod-
ucts and increased activities, including
running of 24 hour night desk on com-
modity derivatives.
Optimized Liquidity Management
In 2013, the Financial Market Business
Division successfully issued KRW 3.78
trillion and KRW 0.85 trillion in senior
and subordinated bonds, respectively.
In addition, the division issued KRW 0.7
trillion in hybrid bonds,contributing to
the stable BIS ratio. In the midst of North
Korea missile launches and Feds tapering
plans, the division increased medium-
term borrowings and private bonds to
prepare for possible foreign currency
liquidity risk and rising interest rate envi-
ronment.
Liquidity Ratios
The Bank continued to issue private
bonds in cross-foreign currencies such as
JPY and THB.
This contributed to stable management
of liquidity for foreign currencies by di-
versifying financing markets and means.
Throughout the year, the bank main-
tained from USD 1.5 to 2.5 billion in li-
quidity buffer to withstand three months
liquidity crisis in an event combined
market and bank crisis should arise.
As of the end of 2013, this financing ac-
tivities resulted in the KRW liquidity ratio
of 121and FC liquidity ratio of 126%.
Strengthening Competitiveness in FX
Trading and Derivatives
In 2013, the Financial Market Business
Unit strove to strengthen its competi-
tiveness against market volatility.
In FX Trading, Woori Bank has strength-
ened a fully diversified portfolio of for-
eign currency derivatives, including the
Mexican Peso (MXN), South African Rand
(ZAR), Polish Zloty (PLN), Russian Ruble
(RUB) and Chinese Yuan (CNY ), aside
from other major currencies like the USD,
JPY and EUR. As such, we made a proac-
tive response to market volatility and
diversified profit sources.
Moreover, we strengthened derivative
trading by leveraging arbitrage trading
through the preemptive operation of po-
sitions. This was achieved by forecasting
market variables, such as domestic and
international policies, and fluctuations in
demand and supply.
Providing 24 hours Customer Services
for Commodity Derivatives
The Night Desk for commodity de-
rivatives is up and running. We provide
products to hedge risks 24 hours for cus-
tomers exposed to the price fluctuations
of raw materials.
planS For 2014
In 2014, the Financial Market Business
Division will continue to focus on liq-
uity management and profitability. The
Bank plans to issue private bonds before
interest rate rises, while increasing the
duration for KRW financing for sound
liquidity management. Profitability will
mananged through controlling in the
volume of low yield short-term assets,
and increasing of low-cost FC financing
means such as FC deposits.
Moreover, utmost attention will be on
stable funding ahead of the Bank’s priva-
tization and Basel III implementation.
In trading, strategies will be diversified
ranging from FX, arbitrage trading on
derivatives to hedge trading on cur-
rencies and interest rates. The goal is to
complete the project to expand the FX
and derivative profit base and establish
an integrated trading system for the Fi-
nancial Market Business Division.
155
145
135
125
115
105
95
146.7
126.7
110.5
109.3
121.6
105.2
KRW Liquidity Ratio (%)
FC Liquidity Ratio (%)
126.5
118.3
125.9
120.8
Dec-11
Jun-12
Dec-12
Jun-13
Dec-13
077
2013 ANNUAL REPORTSmile for All A Sharing Bank
“Hoping for social convergence driven banking
that embodies the values of sharing”
078
woori bank “Woori Bank will walk at the forefront in establishing a
warm-hearted banking culture that embraces our society.”
Woori Bank will sincerely reinforce a responsible banking practices. Warm-heart-
ed banking is not merely a means to enhance or practice corporate image for a
short period of time. It is a mission and direction we should continuously initiate.
Differentiated services will be offered through mutual trust with customers. Our
bank will implement the ‘Boom-up’ program, a fundamental one to intensify the
bank-wide execution capability under the leadership of ‘Consumer Protection
A Safe Banking World
Center’ for the first time in the Korean banking industries. Woori Bank will strive
to ensure that all employees can embody ‘warm-hearted banking’ as a basic prin-
ciple in daily operations, and enable our customers to enjoy experiencing our
responsible products and services.
079
2013 ANNUAL REPORTSmile for All Social Contribution activities
Woori Bank has been aligned with the growth of the country, society and customers for the
past 115 years. Despite colonialism and economic troubles, the Bank has practiced the spirit
of sharing as a native bank of Korea.
At a time when social roles and responsibilities in banking are spotlighted, humanity, hap-
piness and hopefulness as three missions will be carried out. Diverse social contribution
activities unfold under the goals to realize the vision of ‘sharing love, and sharing in finance
that fosters dreams and hopes.’
Woori Bank’s social contributions are not merely one-time events: employees’ act of sharing
goes on continuously and practically.
080
woori bank Major SoCial ContriButionS oF
Woori Bank
Woori Happiness Society Program
For sponsoring the underprivileged in
community, Woori Bank practices the
‘Woori Happiness Society Program.’ It is
a regular and continuous community-
focused volunteering program by sign-
ing sisterhood ties with social welfare
centers in community and community
childcare centers.
Besides such hands-on volunteering
activities, children having difficulties in
participating in exterior activities during
summer and winter holidays are invited
to skating competitions and summer
camps. In January, a skating competition
was held between community child-
care centers in the Seoul Plaza installed
by Woori Bank in front of the City Hall
building. In August, 300 children were
invited to a two-day and one-night sum-
mer camp for such activities as sphere
observation, making T-shirts symbolizing
hopefulness and offering of scholarships.
In October 2013, the One Company One
Village harvesting took place, so agricul-
tural produce that employees harvested
were given to 91 community childcare
centers and 84 social welfare centers
nationwide with which the Bank had
signed sisterhood ties.
Hosting the Sports Festival for the Dis-
abled
In order to facilitate the disabled to ex-
ercise more in their daily life and create
a location where the disabled and the
able-bodied can jointly play recreational
sports together, we hold annual rope
jumping events. The staff at Woori Bank
(including the CEO and the disabled),
form a team for such sports events. Their
success as a team has broken down walls
and forged social integration.
Building on these successes, we will con-
tinue to hold Sports Festival for the Dis-
abled as a responsible bank of sharing.
Conducting ‘One Company, One Vil-
lage’ Sponsorship Program
Our ‘One Company, One Village’ spon-
sorship program encourages the active
exchange and shared growth between
urban and rural regions. The program
marked its 9th anniversary in April 2014
by supporting Yubyeolnan(Unusual/
Peculiar) Village in Anseong City, in Ko-
rea’s Gyeonggi Province. We offer sup-
port in the way of volunteering during
harvests, creating markets for the direct
sale of agricultural products, rural village
experiences for our staff and custom-
ers, village refurbishment and income-
generating activities in rural villages.
We also forged the ‘One Company One
Fishing Village’ program with Mongsan-
ri in South Chungcheong Province, and
the ‘One Company One Mountain’ pro-
gram with Namsan Mountain in Seoul
for environmental preservation and
natural protection. To pay tribute to our
heritage, we have signed a contract to
protect Hongyuneung under our ‘One
Company One Cultural Property’ pro-
gram. Hongyuneung is a Historic Site
No.207 and a UNESCO-designated World
Cultural Heritage site. It is the tomb of
Korea’s Emperor Gojong, and also of King
Sunjong, who paved the way for Daehan
Cheonil Bank, the forerunner of Woori
Bank, to be established, sponsoring it
with imperial funds so that a national
bank could take root. We regularly con-
duct activities to protect Hongyuneung,
and include a tribute ceremony as part
of our new recruiting orientation, so as
to enhance their appreciation of our
company history.
During every opening ceremony, the
CEO and the management take part
in a commitment event to practice
‘Cham(responsible) Keumyung(finance)’
by paying tribute to the deceased there.
Woori Art Contest
In 2013, the Woori Art Contest cel-
ebrated its 19th anniversary, as Korea’s
top art contest for artistically inclined
children and youth, and a total of 35,000
kindergarden, elementary, middle and
high school students took part. We also
invited children from the earthquake-hit
Sichuan Province in China to exert their
artistic talents.
We are also active in promoting educa-
tional and social programs such as chil-
dren’s classes in economics and financial
training for the underprivileged.
The children’s class of economics includes
a field trip to the Woori Bank Museum
and given the opportunity to open a new
account, so that the children can enjoy a
hands-on, money-based experience.
081
2013 ANNUAL REPORTSmile for All On December 7, 2013, ‘a joint wedding
ceremony for multiracial couples’ was
organized at the auditorium of the head
office of Woori Financial Group.
A total of 10 multicultural couples from
Vietnam, the Philippines, Japan and
China tied the knot. Chairman of Woori
Financial Group and president of Woori
Multicultural Scholarship Foundation Lee
Soon-woo officiated the event with the
presence of 300 guests including their
families, relatives and others.
Chairman Lee said during his congratula-
tory speech, “I hope that the newly wed
have a happy home, and we will con-
tinuously support multicultural families
to settle stably in Korea as members of
the society through diverse programs.”
Woori Financial Group will pour in more
efforts to make the world a happy place
for everyone including the underprivi-
leged driven by self-esteem and a sense
of accountability as a global financial
leader. The Group also does the utmost to
fulfill its social corporate responsibilities.
Woori FinanCial Group initiat-
inG VariouS SHarinG aCtiVitieS
For MultiCultural FaMilieS
Woori Financial Group put down KRW
20 billion from all its affiliates in January
2012 to launch a non-profit foundation
of the Woori Multicultural Scholarship
Foundation (President Lee Soon-woo).
The foundation is engaged in wide-
ranging programs to contribute to the
development of talent among children
of multicultural families and also to so-
cial cohesion. Examples are scholarships
for multicultural students, support for
customized education programs, sup-
port for educational facilities and welfare
service.
Since its launch, the foundation has
doled out scholarships worth KRW 890
million to 1,506 students for six times,
ranging from elementary school stu-
dents supposedly fostering hopes and
dreams to college students. Economic
and financial training sessions are offered
to multicultural families and their chil-
dren to support their economic activities
by enhancing their economic knowl-
edge. Training on finance and money
management, meanwhile, is available for
married immigrant women.
082
woori bank Woori Smile Microcredit
Woori Bank is engaged in Microcredit
(Miso-credit) to spearhead the efforts in
practicing socially responsible banking
by supporting the financially struggling
and the socially vulnerable & neglected
customers.
Woori Bank’s Miso-credit is a Korean-style
Microcredit that helps those who can-
not access institutional financial funds,
and also helps companies in starting up
businesses or managing their funds on a
non-collateral/guarantee basis.
Woori Bank led the founding of the
Woori Smile Microcredit Bank with
contributions from affiliates of Woori
Financial Group that contributed KRW 10
billion a year for five years.
The purpose of This Bank is to support
those with low incomes and limited
credit to be financially self-sufficient,
thus enhancing the stability and comfort
of their lives.
This Bank has prestigious figures in the
religious, academic and social welfare
sectors as outside executive directors,
in order to observe fairness. It has 9
branches nationwide with 29 employees
to enable the active support of citizens.
Major traCk reCorDS oF Woori
SMile MiCroCreDit Bank
By extending support for the financially
vulnerable, the socially neglected and
those who lack financial access, we
extended Microcredit worth KRW 379
billion in 2013, leading the way in prac-
ticing socially responsible financing.
Microcredit services were presented with
several products: ‘Woori New Hope Seed’
for low-credit lowincome customers; and
‘Transit Loan’ whereby citizens suffering
from high-interest rate loans could make
the transition to low-interest loans.
We extended approximately KRW 52.9
billion to 3,868 cases until 2013 through
Microcredit services.
In 2013, its business goal is ‘Microcredit
that makes citizens smile.’ Through
Microcredit services which approach
customers and development of custom-
ized products, there was a tremendous
increase in the Microcredit extensions.
Woori Bank extended approximately
KRW 15.6 billion to 1,354 cases in 2013
through Microcredit services (3,868 cases
worth KRW 52.9 billion in accumulation).
It was not a mere voluntary activity: sup-
port has been given so that recipients
can become self-sufficient through con-
sulting, microcredit events in the forms
of visiting, consulting and extending a
helping hand on sites.
key proDuCtS
Business Start-up Loan: A loan for
small-scale registered entrepreneurs to
start a new business.
Working Capital Loan: A loan for indi-
vidual entrepreneurs (who have already
been in business for over a year at an es-
tablished site) to purchase products, raw
materials,etc.
Loan for Unregistered Entrepreneurs:
A loan for small-scale unregistered entre-
preneurs to do business
Loan for Traditional Market Merchants
for Self-Sufficiency: A loan for small-
scale merchants, such as the self-em-
ployed in traditional flee markets
Single Parent and Multi-cultural Family
Support Fund: A loan for single-parent
and heads or spouses of multi-cultural
families that came recommended by a
social welfare center to do business
The 2014 goal for the Woori Smile Micro-
credit Bank is ‘Microcredit that smiles
with dreams and hopes.’
We plan to expand support by exploring
low income industries with high vulner-
ability and to sign agreements with tra-
ditional market merchant councils and
associations. Meanwhile, we will secure
exclusive channels for better accessibility
to Microcredit.
Lastly, we will stand at the forefront to
share the genuine role and directions
of Microcredit, cohere with society, and
spread these roles and directions by ex-
ploring and promoting the best practices,
imbuing confidence among recipients.
2013 ANNUAL REPORT
083
083
2013 ANNUAL REPORTSmile for All employee Satisfaction
We believe that a work life where the
staff is happy and satisfied is the founda-
tion that will provide the top services
to customers. As such, we launched the
Staff Satisfaction Center in 2007, devel-
oping and operating various programs
to enhance our staff members’ satisfac-
tion in their work place. Our advanced
labor-management culture is a bench-
mark model in the banking sector and
throughout the society.
Ma jor aC tiVitieS For Woori
Bank’S eMployee SatiSF aCtion
anD laBor-Mana GeMent rela-
tionS
In 2014, we operated dynamic and inter-
esting programs for employee satisfac-
tion.
By supporting not only workshop pro-
grams where the staff participated, but
also various pastime activities, we ca-
tered to the cultural needs of our staff
and endeavored to assist them in the
formation of networks. The ‘Woori Fam-
ily Energy Up’ project was designed to
facilitate the psychological stability of
individuals, which has been positively
acclaimed by employees, and also to
induce improvement in family relations.
The project was to achieve both com-
munication and fun elements among
employees. Utmost efforts are made to
practice Woori Bank’s belief that hap-
piness in staff’s family drives the Bank’s
competitiveness.
‘Great Fun! Woori Tong Tong Craft Studio’
‘Great Fun! Woori Tong Tong Craft Studio’
is a fun program of Woori Bank. It is a
new fun program renewed from Woori
Bank’s iconic workshop program, ‘Let’s
Go! Empathy Expedition Fun Program’
that was available for the past two years.
Team spirit boosting programs were
strengthened this time on top of the
existing survival game, rafting, ATV expe-
rience and walking on beautiful boule-
vards. It is a program carried on for two
years, and a total of 6,200 participants
have joined in the iconic fun program
that transformed the corporate culture
in workshops at Woori Bank.
‘2014 Art is Tasteful, Pleasing Five Senses’
This is a cultural program to enable
employees and their families to enjoy a
richer, more leisurely life by giving them
a cultural appreciation of art, musicals
and classical music and satisfying their
thirst for such cultural life. In 2012, they
watched Mamma Mia!, a well-known
musical, listened to the lecture of art
critic Lee, Ju Heon, and visited the exhi-
bition of Louvre Museum. In 2013, they
watched Turandot, a world-renowned
opera, and went to a special exhibition
of Van Gogh along with a lecture. They
can now enjoy a more vibrant and in-
teresting work life, thanks to the various
cultural programs that enable efficient
and satisfying leisure time and thereby
boost their interest in culture and the
arts. In 2014, more interesting and fruitful
cultural programs will be available. At a
084
woori bank time when the quality of life is ever more
spotlighted, ‘2014 Art is Tasteful, Pleasing
Five Senses’ is Woori Bank’s iconic cultural
voucher program that fully reflects this
current trend.
Wide-ranging Family Care Programs
Recognizing that the concept of family
was confined to employees’ children, it
was broadened to cover not only chil-
dren but also their parents and spouses.
For the past three years, employees
and their families amounting to 8,000
people took part in the ‘Family Weekend
Journey.’ A program for communication
and healing among employees and
their children was offered along with a
surprise school visit program to boost
children’s morale. Another new program
was ‘Family Trip with Love for Parents’ to
rethink the concept of filial piety for par-
ents. Such endeavors drove Woori Bank
to establish itself as a company that does
the best for family happiness through all-
round family care.
eStaBliSHinG an aDVanCeD la-
Bor-ManaGeMent Culture tHat
CreateS ValueS
We formed and operated a labor-man-
agement task force team to enhance the
HR/training systems, as well as a joint
labor-management training, in order
to facilitate the official communication
channel between the two groups and
strengthen professional competencies in
their relations.
As a result of encouraging the chan-
n e l s , w e h e l d t h e ’ Wo o r i Fa m i l y
Hanmadang(get together as ‘One’) Festi-
val’, joint labor-management workshops
and the 2013 Q1 Labor-Management
Council meeting.
Fruitful results were borne from the joint
program to strengthen the competency
in the labor-management relations:
benchmarking the HR system of over-
seas financial institutions for the labor-
management; and conducting ‘Joongang
Economy HR Training Institute’, a master
course for the labor union. Moreover,
we formed a joint labor-management
task force to improve the HR/ training
systems, thus spearheading the efforts
to establish a harmonious culture of the
labor-management.
planS For 2014
Believing that staff satisfaction leads to
customer satisfaction, various staff mem-
ber satisfaction programs and labor-
management harmony models, are
sought after.
We will continue to develop programs
conducive to form self-realization, while
satisfy the various interests of our staff
who seek a better life. The quality of
customer service and the value of Woori
Bank will drastically improve whenever
our staff is satisfied. In order to satisfy
every staff members’ happiness (which
will ultimately lead to customer happi-
ness), we will stand in the forefront and
ensure the timely realization of our staff’s
satisfaction and the harmonious labor-
management.
085
2013 ANNUAL REPORTSmile for All 087 Management’s Discussion and Analysis
092 Woori Finance Holdings Co., Ltd. and Subsidiaries Consolidated Statements of Financial Position
095 Independent Auditors’ Report
MANAGEMENT’S DISCUSSION AND ANALYSIS
AS OF DECEMBER 31, 2013 AND 2012 AND JANUARY 1, 2012
The term ‘the Bank’, as used in this MD&A, refers to Woori Bank, unless otherwise indicated.
Summary of Management Performance
2013 was a year of difficulties in the overall management environment for banks due to domestic and overseas economic slowdown and corporate defaults amid
the continuum of uncertainties in the global market, especially, in the U.S. and China. The Bank’s total assets carried on a continued growth up to KRW 249,985
billion, up KRW 1,438 billion from the previous year, but the 2013 net income decreased KRW 1,031 billion to KRW 466 billion. This was primarily due to
a drop in the net interest margin, reduced gain on sell-off of marketable securities amid the low growth and interest rate in the domestic economy, and higher
bad debts expenses as a result of restructuring in large enterprises. 2014 is expected to witness a steady turnaround in the economy at home and abroad, but the
financial environment is unlikely to be all that rosy due to delays in turning insolvent companies around, and increases in household debt burdens. Nevertheless,
the Bank will secure a stable profit base by focusing on substantial growth driven by high-yield assets, maintaining the net interest margin at an appropriately
high level and increasing non-interest income including various fees.
Management Performance
Summarized Consolidated Income Statement
(Unit: KRW Billion)
Operating income
Net interest income
Net fee income
SG&A Expense
Other operating income (expense)
Non-operating income
Income before income tax
Income tax expense
Profit from continuing operations
Profit from discontinued operations
Net income
Net income attributable to shareholder
Net income attributable to the non-controlling interest
2013
464
4,420
813
2,679
-2,090
53
517
81
436
30
466
465
1
2012
1,451
4,774
837
2,591
-1,569
53
1,504
261
1,243
253
1,496
1,496
0
Amount
-987
-354
-24
88
-521
-
-987
-180
-807
-223
-1,030
Change
(%)
-68.0
-7.4
-2.9
3.4
-33.2
-
-65.6
-69.0
-64.9
-88.1
-68.9
The Bank’s net income amounted to KRW 466 billion, down 68.9% from the previous year in 2013. This is mostly attributable to several factors: a drop in
interest income of KRW 354 billion due to a continued cut in a Net Interest Margin (NIM) amid the low growth and interest rate; shrinkage in gain on sell-off of
marketable securities; and the intensive accumulation of reserves against uncertainties on the economic recovery.
2013 ANNUAL REPORT
087
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
Interest Income and Expenses
(Unit: KRW Billion)
Interest Income
Interest on Loans
Interest on Securities
Other Interest Income
Interest Expense
Interest on Depository Liabilities
Interest on Borrowings
Interest on Debentures Issued
Other Interest Expense
Net Interest Income
2013
9,130
8,003
964
163
4,710
3,646
692
237
135
4,420
2012
10,511
9,029
1,308
174
5,737
4,507
812
312
106
4,774
Amount
-1,381
-1,026
-344
-11
-1,027
-861
-120
-75
29
-354
Change
(%)
-13.1
-11.4
-26.3
-6.3
-17.9
-19.1
-14.8
-24.0
27.4
-7.4
The Bank’s 2013 interest income was KRW 4,420 billion, down 7.4% from the previous year. Due to a decreasing trend of the market interest rate, interest
income and expense alike went down year-on-year. A drop in interest income resulted from interest rate deduction of loans denominated in domestic currencies,
amid increases in new loans to high networth SMEs and public agencies.
The Bank will implement intensive measures to effectively manage profitability and minimize NIM deductions by raising low-cost deposits, improving asset and
liability structure, diversifying our portfolios in financing and acquiring assets.
Impairment Losses (for Loans, Other Receivables, Guarantees and Unused Commitments)
(Unit: KRW Billion)
On Loans
Bad Debt Expenses
Reversal of Provision for Loan Losses and Receivables
On Provisions
Loan Loss Provisions
Reversal of Provision
Total
2013
1,998
2,024
26
81
95
14
2012
1,656
1,698
42
-6
73
79
2,079
1,650
Amount
342
326
-16
87
22
-65
429
Change
(%)
20.7
19.2
-38.1
-1.450.0
30.1
-82.3
26.0
The Bank’s impairment losses in 2013 stood at KRW 2,079 billion, up 26.0% from the previous year. This is attributable to increases in NPLs caused by
deterioration of the asset quality of troubled corporates amid the prolonged economic slowdown at home and abroad, and increases in bad debt expenses amid
pre-emptive corporate restructuring.
088
woori bank MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
SG&A Expenses
(Unit: KRW Billion)
Salaries
Salaries for Temporary Employees
Retirement Benefits and Termination Benefits
Depreciation
General Administrative Expenses
Rental Expenses
Computer & Software
Others
Total
2013
1,563
1,399
164
131
985
213
242
530
2012
1,487
1,343
144
129
975
204
242
529
2,679
2,591
Amount
76
56
20
2
10
9
-
1
88
Change
(%)
5.1
4.2
13.9
1.6
1.0
4.4
-
0.2
3.4
The Bank’s SG&A expenses reached KRW 2,679 billion, up 3.4% year-on-year, nevertheless, the Bank maintains a low level of SG&A ratio (51.3%) compared
to other major commercial banks in Korea. Utmost efforts will be implemented to manage adequate SG&A expenses by maintaining a conservative level of
salaries, continuing to cut down other expenses, and improving efficiencies in total bank management.
Non-Operating Income
(Unit: KRW Billion)
Non-Operating Income
Gain on Valuation of Investment for Associates
Gain on Disposal of Investment in Associates
Rental Income
Other Operating Income
Non-Operating Expense
Donations
Depreciation in Real Estate Properties
Others
Total Non-Operating Income
2013
170
31
20
16
103
117
48
3
66
53
2012
157
39
25
16
77
104
63
3
38
53
Amount
13
-8
-5
-
26
13
-15
-
28
-
The Bank’s non-operating income in 2013 recorded KRW 53 billion, the same amount as the previous year.
Change
(%)
8.3
-20.5
-20.0
-
33.8
12.5
-23.8
-
73.7
-
089
2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
Summarized Consolidated Financial Statements
(Unit: KRW Billion)
Assets
Cash and Cash Equivalents
Financial Assets
Loans and Bonds Receivable
Investment Assets of Related Companies
Other Assets
Liabilities
Depository Liabilities
Borrowings
Bonds Issued
Other Liabilities
Shareholders’ Equity
2013
249,985
5,472
33,335
207,361
546
3,271
231,634
175,209
17,264
16,089
23,072
18,350
2012
248,547
4,594
39,819
200,208
550
3,376
229,952
169,216
17,447
17,842
25,447
18,595
Amount
1,438
878
-6,484
7,153
-4
-105
1,682
5,993
-183
-1,753
-2,375
-245
Change
(%)
0.6
19.1
-16.3
3.6
-0.7
-3.1
0.7
3.5
-1.0
-9.8
-9.3
-1.3
The Bank’s total assets in 2013 increased to KRW 249,985 billion, up 0.6% or KRW 1,438 billion from the previous year. Despite the spin-off of the credit
card division leading to reduction in assets, it was compensated by increases in loans in KRW. As for total liabilities, bond issuance dropped KRW 1,753 billion
and other liabilities decreased KRW 2,375 billion. However, depository liabilities went up by KRW 5,993 billion, thus increasing total liabilities by KRW
1,682 billion or 0.7% year-on-year. As for total shareholders’ equity, new capital securities worth KRW 700 billion were issued during the same period, but
shareholders’ equity dropped due to the spin-off of the credit card division, cutting the total volume by 1.3% or KRW 245 billion.
Loans/Depository Liabilities
(Unit: KRW Billion)
Loans
Loans in Local Currency
Loans in Foreign Currencies
Domestic Usance Bills
Credit Card Receivables
Bills Bought in Foreign Currency
Others
(Provisions for Bad Debts)
Depository Liabilities
Depository Liabilities in Local Currency
CD
Other Deposits
Depository Liabilities in Foreign Currencies
(Present Value Discount Account)
2013
186,478
155,918
9,996
4,958
5
4,235
14,525
-3,159
175,209
159,670
3,297
-
12,284
-42
2012
175,985
144,616
9,505
4,893
4,117
4,129
11,691
-2,966
169,216
152,558
1,144
4,459
11,065
-10
Amount
10,493
11,302
491
65
-4,112
106
2,834
193
5,993
7,112
2,153
-4,459
1,219
32
Change
(%)
6.0
7.8
5.2
1.3
-99.9
2.6
24.2
6.5
3.5
4.7
188.2
-100.0
11.0
320.0
The Bank’s loans in 2013 went up KRW 10,493 billion, that is, 6.0% from the previous year. This is mainly because loans in KRW went up 7.8%, or KRW
11,302 billion due to scale-up of new loans to high networth SMEs, and public agencies, but credit card receivables, as a result of the spin-off, went down by
KRW 4,112 billion.
090
woori bank MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
Asset Quality
(Unit: %)
NPL Ratio
NPL Coverage Ratio
Delinquency Rate
2013
2.99
82.27
1.14
2012
1.66
146.92
1.20
Change (%p)
1.33
△64.65
△0.06
The volume of NPLs increased in 2013 due to asset quality deterioration of corporates such as STX Group and Ssangyong Engineering & Construction.
Moreover, as more stringent loan classification standards were applied (guided by FSS) especially in shipbuilding industries than the previous year, the NPL ratio
increased to 2.99%, up 1.33%p from the previous year, and the NPL Coverage ratio decreased.
Capital Adequacy
(Unit: KRW Billion)
BIS Equity Capital
Risk Weighted Assets (RWA)
BIS Ratio
Tier 1
2013
20,382
131,313
15.52%
12.68%
2012
20,504
139,532
14.70%
11.35%
Change
△122
△8,219
0.82%p
1.33%p
The credit card division spin-off dropped both shareholders’ equity and Risk Weighted Assets (RWA). BIS Equity Capital dropped KRW 122 billion year-on-year
due to additional issuance of hybrid Tier 1, while RWA decreased KRW 8,219 billion year-on-year, raising the BIS ratio by 0.82%p year-on-year to 15.52%, and
thus improving the overall capital adequacy level.
Key Performance Indicators
(Unit: %)
Return on Assets (ROA)
Return on Equity (ROE)
Net Interest Spread (NIS) in KRW
Net Interest Margin (NIM)
2013
0.22
2.93
2.24
1.82
2012
0.49
6.89
2.85
2.35
Change (%p)
△0.27
△3.96
△0.61
△0.53
The environment for managing banks in 2013 faltered with weaker profitability and asset quality due to delays in economic improvement at home and abroad.
Income plummeted as a result of shrinkage in interest income, reduction of gains from selling of securities, and accumulation of reserves under the application
of more stringent asset quality standards. As a result, the Return on Assets (ROA) and Return on Equity (ROE) dropped 0.27%p and 3.96%p, respectively from
the previous year. Moreover, Net Interest Margin (NIM) dropped 0.53% year-on-year to 1.82% as a result of interest income reduction caused by low interest
rate environment and spin-off of credit card division.
091
2013 ANNUAL REPORT WOORI FINANCE HOLDINGS CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2013 AND 2012 AND JANUARY 1, 2012
WOORI FINANCE HOLDINGS CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2013 AND 2012 AND JANUARY 1, 2012
December
31, 2013
December
31, 2012
(Korean Won in millions)
January 1,
2012
ASSETS
Cash and cash equivalents
Financial assets at fair value through profit or loss
Available-for-sale financial assets
Held-to-maturity financial assets
Loans and receivables
Investments in joint ventures and associates
Investment properties
Premises and equipment
Intangible assets and goodwill
Assets held for sale
Current tax assets
Deferred tax assets
Derivative assets
Other assets
Disposal group held for sale (Note 1)
Disposal group held for distribution to owners (Note 2)
Total assets
LIABILITIES
Financial liabilities at fair value through profit or loss
Deposits due to customers
Borrowings
Debentures
Provisions
Net defined benefit liability
Current tax liabilities
Deferred tax liabilities
Derivative liabilities
Other financial liabilities
Other liabilities
Liabilities directly associated with disposal group held for sale (Note 1)
Liabilities directly associated with disposal group held for distribution to
owners (Note 2)
Total liabilities
EQUITY
5,477,649
4,806,197
17,085,448
12,038,820
211,912,373
617,570
340,620
2,536,441
268,926
587
143,101
155,256
131,410
178,886
34,684,805
50,312,293
340,690,382
5,778,390
27,352,216
18,888,923
18,684,801
250,275,551
1,037,930
491,685
3,185,543
433,407
83,347
38,667
155,439
281,069
414,846
-
-
327,101,814
6,417,964
26,844,973
19,698,348
20,036,128
235,317,520
928,233
498,999
3,134,472
447,891
56,243
57,512
79,505
326,840
377,062
-
-
314,221,690
2,507,248
175,323,644
18,231,511
21,677,674
684,799
71,602
9,980
49,105
1,785
19,914,947
411,278
32,047,626
10,985,765
9,621,546
204,209,580 197,378,565
34,667,740
29,265,833
892,308
119,704
274,257
270,033
33,493
19,023,665
570,038
-
33,479,716
27,959,969
863,658
166,296
178,791
134,481
38,000
25,544,410
508,072
-
46,882,414
317,813,613
-
304,068,738 292,117,182
-
Owners’ equity:
Capital stock
Hybrid securities
Capital surplus
Other equity
Retained earnings
Equity directly associated with disposal group held for sale
Equity directly associated with disposal group held for distribution to
owners
Non-controlling interests
Total equity
Total liabilities and equity
17,847,633
4,030,077
498,407
176,502
(35,367)
13,112,690
29,820
18,695,919
4,030,077
498,407
174,044
112,013
13,881,378
-
17,555,085
4,030,077
309,010
175,768
563,074
12,477,156
-
35,504
5,029,136
22,876,769
340,690,382
-
4,337,157
23,033,076
327,101,814
-
4,549,423
22,104,508
314,221,690
092
woori bank
WOORI FINANCE HOLDINGS CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
WOORI FINANCE HOLDINGS CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
2013
2012
(Korean Won in millions, except per share data)
Interest income
Interest expense
Net interest income
Fees and commissions income
Fees and commissions expense
Net fees and commissions income
Dividend income
Net gain (loss) on financial instruments at fair value through profit or loss
Net gain (loss) on available-for-sale financial assets
Impairment losses due to credit loss
Other net operating expenses
Operating income
Share of profits (losses) of joint ventures and associates
Other net non-operating income
Non-operating income
Net income before income tax expense
Income tax expense
Net income from continuing operations
Net income (loss) from discontinued operations
Net income (loss)
Remeasurement of the net defined benefit liability
Items that will not be reclassified to profit or loss
Loss on available-for-sale financial assets
Share of other comprehensive income (loss) of joint ventures and associates
Loss on foreign currency translation of foreign operations
Gain (loss) on valuation of cash flow hedge
Items that may be reclassified to profit or loss
Other comprehensive loss, net of tax
Total comprehensive income (loss)
Net income attributable to:
Net income (loss) attributable to owners
Income from continuing operations
Income (loss) from discontinued operations (Note 1, 2)
Net income (loss) attributable to non-controlling interests
Income from continuing operations
Income (loss) from discontinued operations (Note 1, 2)
Total comprehensive income attributable to:
Comprehensive income (loss) attributable to owners
Comprehensive income (loss) attributable to non-controlling interests
Basic and diluted earnings (losses) from continuing and discontinued
operations per share
Basic and diluted earnings from continuing operations
per share
9,493,383
(5,001,361)
4,492,022
1,565,224
(638,723)
926,501
87,641
123,900
(85,242)
(2,277,260)
(3,027,995)
239,567
(1,277)
49,377
48,100
10,891,241
(6,043,341)
4,847,900
1,686,885
(497,535)
1,189,350
101,063
(364,894)
533,148
(1,799,029)
(2,958,031)
1,549,507
44,515
43,898
88,413
287,667
1,637,920
(35,096)
(356,840)
252,571
(966,006)
(713,435)
9,217
9,217
(50,953)
(6,375)
(59,824)
(2,412)
(119,564)
(110,347)
(823,782)
(537,688)
162,011
(699,699)
(175,747)
90,560
(266,307)
(623,695)
(200,087)
(704)
165
1,281,080
566,599
1,847,679
(51,297)
(51,297)
(349,481)
56,855
(107,509)
13,091
(387,044)
(438,341)
1,409,338
1,633,341
1,164,431
468,910
214,338
116,649
97,689
1,176,805
232,533
1,993
1,411
093
2013 ANNUAL REPORT
- 1 -
Note 1) Disposal group held for sale and net income (loss) from discontinued operations
In accordance with Public Funds Oversight Committee’s plan of the privitisation of Woori Finance Holdings Co.,
Ltd. on 26 June 2013, the Parent company announced the sales plan of Woori Investment Securities Co., Ltd,
Woori Financial Co., Ltd., Woori F&I Co., Ltd., Woori Asset Management Co., Ltd., Woori Aviva Life
Insurance and Woori Savings Bank on August 16, 2013. During December 2013, the Parent company selected
the preferred potential buyers, and the negotiation to reach at the final agreement for the deal is still ongoing at
the end of 2013. Therefore, the Parent company classified the related assets and liabilities of Woori Investment
Securities Co., Ltd, Woori Financial Co., Ltd., Woori F&I Co., Ltd., Woori Asset Management Co., Ltd., Woori
Aviva Life Insurance and Woori Savings Bank into disposal group held for sale and presented net income (loss)
from discontinued operations as at the end of 2013. In addition, the comparative consolidated states of
comprehensive income for the year ended December 31, 2012 was restated accordingly.
The Group measured a disposal group as held for sale at the lower of its carrying amount and the net fair value
and the impairment loss on disposal group held for sale was recognized 793,108 million Won and was included
in income (loss) from discontinued operations of comprehensive income for the year ended December 31, 2013.
Note 2) Disposal group held for distribution to owners and net income (loss) from discontinued
operations
In accordance with Public Funds Oversight Committee’s plan of the privitisation of Woori Finance Holdings
Co., Ltd. on 26 June 2013, the Board of Directors of the Parent company approved the plan of demerger of
Kyongnam Bank Co., Ltd. and Kwangju Bank Co., Ltd. on August 27, 2013. The demerger is to take place
through distributing of the shares of newly established holding companies, which are receiving the investments
in Kyongnam Bank Co., Ltd. and Kwangju Bank Co., Ltd., to the shareholders of the Parent company and it is
scheduled to be effective on May 1, 2014 in accordance with the plan. Therefore, the Parent company classified
the related assets and liabilities of Kyongnam Bank Co., Ltd. and Kwangju Bank Co., Ltd. into disposal group
held for distribution to owners as at the end of 2013.
The impairment loss on disposal group held for distribution to owners is recognized 40,658 million Won the
year ended December 31, 2013.
094
woori bank
INDEPENDENT AUDITORS’ REPORT
Deloitte Anjin LLC
9Fl., One IFC,
10, Gukjegeumyung-ro,
Youngdeungpo-gu, Seoul
150-945, Korea
Tel : +82 (2) 6676 1000
Fax: +82 (2) 6674 2114
www.deloitteanjin.co.kr
INDEPENDENT AUDITORS’ REPORT
(cid:3)
English Translation of a Report Originally Issued in Korean
(cid:3)
To the Shareholder and the Board of Directors of
Woori Bank
We have audited the accompanying consolidated financial statements of Woori Bank and its subsidiaries (the
“Group”). The financial statements consist of the consolidated statements of financial position as of December
31, 2013 and December 31, 2012 and January 1, 2012, respectively, and the related consolidated statements of
comprehensive income, changes in equity and cash flows, all expressed in Korean won, for the years ended
December 31, 2013 and 2012, respectively. The Group’s management is responsible for the preparation and fair
presentation of the consolidated financial statements and our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the Republic of Korea.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of the Group as of December 31, 2013 and December 31, 2012 and January 1, 2012, respectively, and
the results of its operations and its cash flows for the years ended December 31, 2013 and 2012, respectively, in
conformity with Korean International Financial Reporting Standards (“K-IFRS”).
Accounting principles and auditing standards and their application in practice vary among countries. The
accompanying consolidated financial statements are not intended to present the financial position, results of
operations and cash flows in accordance with accounting principles and practices generally accepted in countries
other than the Republic of Korea. In addition, the procedures and practices utilized in the Republic of Korea to
audit such financial statements may differ from those generally accepted and applied in other countries.
Accordingly, this report and the accompanying consolidated financial statements are for use by those
knowledgeable about Korean accounting procedures and auditing standards and their application in practice.
As the other matter that does not have any impact on our audit opinion, as described in Note 2, the Group
applied the new accounting standards, which have been adopted for 2013, including K-IFRS 1110 –
“Consolidated Financial Statements”, retrospectively, and therefore the accompanying comparative consolidated
financial statements were restated, accordingly.
March 3, 2014
Notice to Readers
This report is effective as of March 3, 2014, the auditors’ report date. Certain subsequent events or
circumstances may have occurred between this auditors’ report date and the time the report is read. Such events
or circumstances could significantly affect the accompanying consolidated financial statements and may result in
modifications to the auditors’ report.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”),
its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities.
DTTL (also referred to as “Deloitte Global”) does not provide services to clients.
Please see www.deloitte.com/abou t for a more detailed description of DTTL and its member firms.
Member of Deloitte Touche Tohmatsu Limited
095
2013 ANNUAL REPORT WOORI BANK AND SUBSIDIARIES
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012, AND JANUARY 1, 2012
AND FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
The accompanying consolidated financial statements including all footnote disclosures were
prepared by and are the responsibility of the management of the Group.
Soon Woo Lee
Chairman and Chief Executive Officer
096
woori bank WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2013 AND 2012 AND JANUARY 1, 2012
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2013 AND 2012 AND JANUARY 1, 2012
ASSETS
Cash and cash equivalents (Note 6)
Financial assets at fair value through profit or
loss (Notes 7, 11 and 19)
Available-for-sale financial assets
(Notes 8, 11 and 19)
Held-to-maturity financial assets
(Notes 9, 11 and 19)
Loans and receivables
(Notes 10, 11 and 19, 45)
Investments in associates (Note 13)
Investment properties (Note 14)
Premises and equipment, net (Note 15)
Intangible assets, net (Note 16)
Other assets (Note 17)
Current tax assets (Note 42)
Deferred tax assets (Note 42)
Derivative assets (Notes 11 and 26)
Assets held-for-sale (Note 18)
Total assets
LIABILITIES
Financial liabilities at fair value through profit
or loss (Notes 11 and 20)
Deposits due to customers
(Notes 11, 21 and 45)
Borrowings (Notes 11and 22)
Debentures (Notes 11 and 22)
Provisions (Note 23)
Net defined benefit liabilities (Note 24)
Current tax liabilities
Other financial liabilities (Notes 11 and 25)
Other liabilities (Notes 25 and 45)
Deferred tax liabilities
Derivative liabilities (Notes 11 and 26)
Total liabilities
(Continued)
Korean Won
December 31, 2013 December 31, 2012 January 1, 2012
(In millions)
5,472,425
4,593,736
5,390,108
4,398,132
10,989,236
12,498,726
16,897,731
14,488,547
14,682,791
12,038,820
14,341,506
15,400,425
207,360,680
546,188
333,834
2,369,213
76,016
161,258
136,713
61,764
131,410
587
249,984,771
200,208,325
550,332
346,182
2,385,680
108,920
178,592
2,354
82,580
269,414
1,239
248,546,643
192,048,328
376,337
349,459
2,345,960
147,387
225,532
3,082
8,927
326,413
2,258
243,805,733
2,631,037
3,468,696
3,509,566
175,209,309
17,264,362
16,088,973
618,225
39,370
8,889
19,401,628
322,932
45,274
4,441
231,634,440
169,216,255
17,446,930
17,841,978
579,441
65,937
136,517
20,771,744
383,678
16,699
23,827
229,951,702
165,453,124
19,175,674
19,811,813
585,384
22,227
206,366
16,281,271
444,551
135,441
25,582
225,650,999
097
2013 ANNUAL REPORT WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (CONTINUED)
AS OF DECEMBER 31, 2013 AND DECEMBER 31, 2012
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2013 AND DECEMBER 31, 2012 (CONTINUED)
EQUITY
OWNER’S EQUITY
Capital stock (Note 28)
Hybrid equity securities (Note 28)
Capital surplus (Note 28)
Other equity (Note 29)
Retained earnings (Note 30)
(Regulatory reserve for credit loss as of
December 31, 2013, December 31, 2012 and
January 1, 2012 is (cid:2936)1,384,199 million,
(cid:2936)1,123,866 million and nil, respectively
Unreserved regulatory reserve for credit loss
as of December 31, 2013, December 31, 2012
and January 1, 2012 is nil
Regulatory reserve for credit loss to be
reversed (reserved) as of December 31, 2013,
December 31, 2012 and January 1, 2012 is
(cid:2936)133,862 million, (cid:2936) (-)260,333million and
(cid:2936) (-)1,123,866 million, respectively
Planned reversal(provision) of regulatory
reserve for credit loss as of December 31,
2013, December 31, 2012 and January 1, 2012
is (cid:2936)133,862 million, (cid:2936) (-)260,333million
and (cid:2936) (-)1,123,866 million, respectively)
(Note 31)
NON-CONTROLLING INTERESTS
Total equity
Total liabilities and equity
Korean Won
December 31, 2013 December 31, 2012 January 1, 2012
(In millions)
2,983,452
2,380,797
734,671
5,483
3,829,783
1,681,807
812,016
68,570
3,829,783
1,681,807
812,016
524,202
12,239,195
18,343,598
6,733
18,350,331
249,984,771
12,195,154
18,587,330
11,298,984
18,146,792
7,611
18,594,941
248,546,643
7,942
18,154,734
243,805,733
See accompanying notes to consolidated financial statements.
098
woori bank
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
OPERATING INCOME
Net interest income (Notes 33 and 45):
Interest income
Interest expense
Net fees and commissions income (Notes 34 and 45):
Fees and commissions income
Fees and commissions expense
Dividend income (Notes 35 and 45)
Korean Won
2013
2012
(In millions,
except for income per share amount)
9,130,333
(4,710,456)
4,419,877
10,510,967
(5,736,548)
4,774,419
974,560
(161,395)
813,165
79,904
984,435
(147,316)
837,119
91,513
Gain (loss) on financial instruments at fair value through
profit or loss (Note 36)
122,179
(360,939)
Gain (loss) on available-for-sale financial assets
(Note 37)
(80,165)
548,674
Impairment losses for loans, other receivables, guarantees
and unused commitments (Notes 39 and 45)
(2,079,608)
(1,649,251)
General and administrative expenses (Note 40) :
(2,679,026)
(2,590,787)
Net other operating income (expenses) (Notes 40 and 45)
NON-OPERATING INCOME
Share of profits (losses) of associates (Notes 13 and 41):
Other non-operating income (Note 41)
(131,894)
464,432
(199,296)
1,451,452
2,340
51,056
53,396
27,426
25,696
53,122
NET INCOME BEFORE INCOME TAX EXPENSE
517,828
1,504,574
INCOME TAX EXPENSE (Note 42)
(81,030)
(260,713)
PROFIT FROM CONTINUING OPERATIONS
PROFIT FROM DISCONTINUED OPERATIONS (Note 46)
NET INCOME (Note 31)
(Net income after the provision(reversal) of regulatory
reserve for credit loss for the years ended December 31,
2013 and 2012 are (cid:2936)600,136 million and (cid:2936)1,236,584
million, respectively)
(Continued)
436,798
29,476
1,243,861
253,056
466,274
1,496,917
099
2013 ANNUAL REPORT
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (CONTINUED)
Net income attributable to the owner
Profit from continuing operations
Profit from discontinued operations
Net income attributable to the non-controlling interests
Profit from continuing operations
Profit from discontinued operations
OTHER COMPREHENSIVE INCOME (LOSS),
NET OF TAX
Items that are not reclassified as profit or loss
Re-measurement of defined benefit plans
Items that are reclassified as profit or loss
Loss on valuation of available-for-sale financial assets
Share of other comprehensive income (loss) on investments
in associates
Loss on overseas business translation
Gain on valuation of cash flow hedge
TOTAL COMPREHENSIVE INCOME
Comprehensive income attribute to the owner
Comprehensive income attribute to the non-controlling
interests
NET INCOME PER SHARE:
(In Korean Won) (Note 43)
Continuing and discontinued operations
Basic earnings per common share
Diluted earnings per common share
Continuing operations
Basic earnings per common share
Diluted earnings per common share
Korean Won
2013
2012
(In millions,
except for income per share amount)
435,790
29,476
465,266
1,008
-
1,008
6,877
(20,167)
1,055
(54,185)
1,447
(64,973)
401,301
402,180
1,243,190
253,056
1,496,246
671
-
671
(48,826)
(334,889)
1,210
(75,114)
983
(456,636)
1,040,281
1,040,613
(879)
(332)
539
516
490
470
1,895
1,795
1,532
1,465
See accompanying notes to consolidated financial statements.
100
woori bank
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
Other equity
(Unit: Korean Won in millions)
Capital
stock
3,829,783
Hybrid
equity
securities
1,681,807
-
3,829,783
-
-
-
1,681,807
-
-
Capital
surplus
812,016
-
812,016
-
-
Gain (loss) on
valuation of
available-for-
sale financial
assets
543,428
Gain (loss)
on
valuation of
cash flow
risk hedge
(2,430)
Gain (loss)
on overseas
business
translation
(1,120)
(763)
542,665
-
-
-
(2,430)
-
-
-
(1,120)
-
-
-
-
-
(334,889)
-
-
-
-
-
-
-
3,829,783
-
-
-
-
-
1,681,807
3,829,783
-
-
1,681,807
-
-
-
-
-
-
-
812,016
812,016
-
-
-
-
-
-
-
207,776
207,776
-
-
-
-
-
-
-
-
-
-
(5,370)
-
-
-
-
698,990
-
2,380,797
-
-
-
-
-
(77,345)
734,671
-
-
-
-
-
(14,797)
187,609
(846,331)
2,983,452
-
-
983
-
-
(1,447)
(1,447)
-
-
-
-
-
1,447
-
-
-
-
-
(74,112)
-
-
-
(75,232)
(75,232)
-
-
-
-
(52,299)
-
-
-
-
(127,531)
Share of
other
comprehensive
loss of
associates
Re-
measurement
component of
defined
benefit
(1,491)
-
(1,491)
-
-
-
1,210
-
-
-
-
(281)
(281)
-
-
-
1,055
-
-
-
-
-
774
-
(13,420)
(13,420)
-
-
-
-
-
-
(48,826)
-
(62,246)
(62,246)
-
-
-
-
-
-
6,657
-
220
(55,369)
Others
(2)
Retained
earnings
11,256,207
Total owner’s
equity
18,118,198
-
(2)
-
-
42,777
11,298,984
(600,075)
1,496,246
28,594
18,146,792
(600,075)
1,496,246
Non-
controlling
interests
7,942
-
7,942
-
671
Total
equity
18,126,140
28,594
18,154,734
(600,075)
1,496,917
-
-
1
-
-
1
-
-
-
-
-
-
-
-
-
-
-
-
-
(334,889)
-
(334,889)
-
-
-
-
(1)
12,195,154
1,210
(74,111)
983
(48,826)
-
18,587,330
-
(1,002)
-
-
-
7,611
1,210
(75,113)
983
(48,826)
-
18,594,941
12,195,154
(309,478)
465,266
18,587,330
(309,478)
465,266
7,611
-
1,008
18,594,941
(309,478)
466,274
-
(5,370)
-
(5,370)
-
-
-
-
-
(111,747)
12,239,195
1,055
(52,299)
1,447
6,657
698,990
(1,050,000)
18,343,598
-
(1,886)
-
-
-
-
6,733
1,055
(54,185)
1,447
6,657
698,990
(1,050,000)
18,350,331
January 1, 2012
Effect of changes in accounting
policy
January 1, 2012 (Restated)
Dividends
Net income
Valuation of available-for-sale
financial assets
Valuation of investments in
associates
Translation of overseas business
Cash flow hedge
Actuarial loss and others
Others
Balance as of December 31, 2012
January 1, 2013
Dividends
Net income
Valuation of available-for-sale
financial assets
Valuation of investments in
associates
Translation of overseas business
Cash flow hedge
Actuarial gain
Issuance of hybrid equity securities
Credit card division spin-off
Balance as of December 31, 2013
See accompanying notes to consolidated financial statements
101
2013 ANNUAL REPORT
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
Adjustment to net income:
Interest income
Interest expense
Dividend income
Income tax expense
Additions of expenses not involving cash outflows:
Loss on available-for-sale financial assets
Impairment loss for loans, other receivables, guarantees
and unused commitments
Retirement benefits
Loss on derivatives for hedging
Loss on fair value hedged items
Loss on investments in associates
Loss on disposals of investments in associates
Loss on disposals of premises and equipment, intangible
assets and investment properties
Depreciation and amortization of premises and
equipment, intangible assets and investment properties
Impairment loss on premises and equipment, intangible
assets and investment properties
Loss on other provisions
Deductions of revenue not involving cash inflows:
Gain on available-for-sale financial assets
Gain on derivatives for hedging
Gain on fair value hedged items
Gain on valuation of investments in associates
Gain on disposals of investments in associates
Gain on disposals of premises and equipment, intangible
assets and investment properties
Reversal of impairment loss on premises and equipment,
intangible assets and other assets
Gain on other provisions
Korean Won
2013
2012
(In millions)
466,274 (cid:71)
1,496,917
(9,352,343)
4,741,108
(84,140)
90,441
(4,604,934)
(11,487,893)
5,853,428
(94,847)
341,504
(5,387,808)
79,138
2,106,423
109,059
119,776
13,505
28,730
4,464
642
135,547
943
31,577
2,629,804
-
11,487
127,558
31,070
19,974
8,717
46
100
198,952
-
1,798,296
88,505
49,956
43,817
11,389
167
346
135,406
1,942
26,509
2,156,333
552,788
39,232
43,879
38,815
25,102
1,549
356
3,141
704,862
(Continued)
102
woori bank
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (CONTINUED)
Changes in operating assets and liabilities:
Financial instruments at fair value through profit or loss
Loans and receivables
Other assets
Deposits due to customers
Provisions
Other financial liabilities
Other liabilities
Interest income received
Interest expense paid
Dividend received
Income taxes paid
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash in-flows from investing activities:
Disposals of available-for-sale financial assets
Repayment of held-to-maturity financial assets
Disposals of investments in associates
Disposals of investment properties
Disposals of premises and equipment
Disposals of intangible assets
Disposals of assets held-for-sale
Increase in hedging derivative contract
Cash out-flows from investing activities:
Acquisitions of available-for-sale financial assets
Acquisitions of held-to-maturity financial assets
Acquisitions of investments in associates
Acquisitions of premises and equipment
Acquisitions of intangible assets
Decrease in hedging derivative contracts
Cash out-flows from credit card division spin-off
Net cash provided by (used in) investing activities
(Continued)
Korean Won
2013
2012
(In millions)
5,753,435
(12,931,478)
15,445
5,983,537
(132,974)
(697,766)
13,771
(1,996,030)
9,291,048
(5,026,518)
84,051
(357,914)
286,829
20,561,098
5,620,597
77,397
5,212
12,547
3,233
7,258
2,830
26,290,172
22,942,791
3,485,227
-
76,606
18,713
3,467
375,175
26,901,979
(611,807)
1,469,108
(9,255,181)
33,956
3,760,354
(143,743)
4,477,279
(12,817)
328,956
11,553,329
(5,870,170)
94,848
(444,888)
3,222,655
17,389,744
9,795,378
15,171
-
7,539
566
1,725
-
27,210,123
17,518,312
9,024,781
59,918
131,850
9,423
1,936
-
26,746,220
463,903
103
2013 ANNUAL REPORT
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (CONTINUED)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash in-flows from financing activities:
Increase in borrowings
Issuance of debentures
Issuance of hybrid equity securities
Cash out-flows from financing activities:
Repayment of borrowings
Repayment of debentures
Dividends paid
Net cash provided by (used in) financing activities
Korean Won
2013
2012
(In millions)
4,708,252
6,024,668
698,990
11,431,910
4,891,147
4,940,464
304,428
10,136,039
1,295,871
3,977,649
5,390,611
-
9,368,260
5,707,281
7,367,677
609,251
13,684,209
(4,315,949)
EFFECTS OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS
(92,204)
(166,981)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
878,689
(796,372)
CASH AND CASH EQUIVALENTS, BEGINNING OF THE
YEAR (Note 6)
4,593,736
5,390,108
CASH AND CASH EQUIVALENTS, END OF THE YEAR
(Note 6)
5,472,425
4,593,736
See accompanying notes to consolidated financial statements.
104
woori bank
WOORI BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
WOORI BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
I. GENERAL
(1) The Parent Company
Woori Bank (hereafter referred to as, the “Bank” or the “Company” or the “Parent Company ”), which is the
parent company in accordance with Korean International Financial Reporting Standards (“K-IFRS”) 1110 –
Consolidated Financial Statements was established in 1899 and is engaged in the commercial banking business
under the Banking Law, trust business under the Financial Investment Services and Capital Market Act and
foreign exchange business with approval from the Bank of Korea (“BOK”) and the Ministry of Finance and
Economy (“MOFE”).
On March 27, 2001, Korea Deposit Insurance Corporation (“KDIC”) established Woori Finance Holdings Co.,
Ltd. (“WFH”). The Bank is a wholly owned subsidiary of WFH as of December 31, 2013. The Bank’s common
stock amount, expressed in Korean Won (the “KRW” or “(cid:2936)”), to (cid:2936)2,983,452 million and the Bank’s common
shares issued and outstanding as of December 31, 2013 are 597 million shares. The head office of the Group is
located in Seoul, Korea. The Bank has 989 branches and offices in the Republic of Korea (“Korea”), and 17
branches and offices overseas.
(2) Subsidiaries
1) The consolidated financial statements for the Bank and its subsidiaries (the “Group”) include the following
subsidiaries (Unit: Korean Won in millions, USD in thousands, RUB in 100 millions, IDR in millions, BRL
in millions):
Subsidiaries
Location
Capital stock
December 31, 2013
Main
Business
Number of
shares owned
Percentage of
ownership
(%)
Financial
statements
as of
Woori Credit Information
Co., Ltd.
Woori America Bank
PT. Bank Woori Indonesia
Woori Global Market Asia
Limited
Korea
U.S.A
Indonesia
KRW
USD 122,500
IDR 170,000
Banking
Banking
5,000 Credit information
China
Woori Bank China Limited
Russia
ZAO Woori Bank
Woori Brazil Bank
Brazil
Korea BTL Infrastructure Fund Korea
Korea
Woori Fund Service Co., Ltd.
Hong Kong USD 100,000
USD 308,810
14.5
RUB
BRL
7,709
KRW 644,300 Financial service
3,000 Financial service
KRW
Banking
Banking
Banking
Banking
1,008,000
24,500,000
1,618
78,000,000
-
57,999,999
77,094,000
128,858,939
600,000
100.0 December 31
100.0 December 31
95.2 December 31
100.0 December 31
100.0 December 31
100.0 December 31
100.0 December 31
100.0 December 31
100.0 December 31
Subsidiaries
Location
Capital stock
December 31, 2012
Main
Business
Number of
shares owned
Percentage
of ownership
(%)
Financial
statements
as of
Korea
U.S.A
Indonesia
KRW
USD 122,500
IDR 170,000
Banking
Banking
5,000 Credit information
1,008,000
24,500,000
1,618
100.0 December 31
100.0 December 31
95.2 December 31
Woori Credit Information
Co., Ltd.
Woori America Bank
PT. Bank Woori Indonesia
Woori Global Market Asia
Limited
China
Woori Bank China Limited
Russia
ZAO Woori Bank
Brazil
Woori Brazil Bank
Korea BTL Infrastructure Fund Korea
Korea
Woori Fund Service Co., Ltd.
Hong Kong USD 50,000
USD 308,810
RUB
5
BRL 40,000
KRW 576,700
3,000
KRW
Banking
Banking
Banking
Banking
Financial service
Financial service
39,000,000
-
19,999,999
39,999,999
115,332,541
600,000
100.0 December 31
100.0 December 31
100.0 December 31
100.0 December 31
100.0 December 31
100.0 December 31
105
2013 ANNUAL REPORT
- 2 -
2) For structured entities in accordance with K-IFRS 1110 and K-IFRS 1112, entities on which the Group has
control, when the Group is exposed, or has rights, to variable returns for its involvement with the entities
and has the ability to affect those returns through its power over the entities, are included in the
consolidation scope.
Details of special purposes entities (“SPEs”) under the consolidation scope as of December 31, 2013 are as
follows:
Structured entities for asset securitization(*1)
Kumho Trust 1st Co., Ltd.
Subsidiaries
Woori IB Global Bond Co., Ltd.
Asiana Saigon Inc.
An-Dong Raja 1st Co., Ltd.
KAMCO Value Recreation 1st Securitization Specialty LLC.
Hermes STX LLC.
BWL 1st Co., LLC.
Consus 8th Co., LLC.
Woori Pungsan Inc.
Pyeongtaek Ocean Sand Inc.
Deogi Dream 4th Co., Ltd.
Guam Emerald LLC.
Jeonju iwant LLC.
Wonju iwant LLC.
Height 3rd Co., LLC.
W-synergy 1st Co., Ltd.
Money Trust by Trust Business Act(*2)
Woori Bank Principal Guaranteed Trust and Woori Bank Principal
and Interest Guaranteed Trust
Structured entities for investing in securities
Haeoreum Short-term Bond 15th
G5 Pro Short-term 13th
G6 First Class Mid-term E-20
G15 First Class Mid-term C-1
D First Class Mid-term C-151
Woori Milestone Private Real Estate Fund 1st
Consus Sakhalin Real Estate Investment Trust 1st
Woori Partner Plus Private Equity Securities 4th
Hyundai Platinum Private Equity Securities W-2
KTB Safe Private Investment Trust 77 th
Woori Partner Plus Private Equity Securities 12th
KDB Private Equity Securities Investment Trust WB 5th
Shinhan BNPP Corporate Private Investment Trust 27th
Yurie WB Private Investment Trust 6 th
Kyobo Axa Tomorrow Private Trust 25th
Mirae Asset Triumph Private Securities 15th
Yurie WB Private Investment Trust 6 th
Meritz Prime Private Trust 93 th
Kyobo Axa Tomorrow Private Trust 26th
Mirae Asset Triumph Private Securities 17th
Hanwha Private Investment Trust 57 th
Hyundai Platinum Private Equity Securities W-3rd
Phoenix Sky Private Equity Securities 15 th
Samsung Plus Private Equity Securities 24th
HDC Hanwha Private Investment Trust 10 th
ING lion Private Equity Securities 47th
Meritz Prime Private Trust 95 th
LS leading solution Private Equity Securities 126th
Shinhan BNPP Corporate Private Equity Securities 32nd
Hyundai advantage Private Equity Securities 17th
Mirae asset triumph Private Equity Securities 21st
HDC Hanwha Private Investment Trust 11 th
Location
Main
business
Percentage of
ownership (%)
Financial
statements
as of
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Asset
Securitization
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
0.0
December 31
0.0
0.0
0.0
15.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
Trust
0.0
December 31
Securities
investment
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
100.0
100.0
100.0
100.0
100.0
94.8
75.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
106
woori bank
- 3 -
Subsidiaries
Woori Partner Plus Private Equity Securities 13th
Hi-good choice Equity Securities Investment Trust 8th
Samsung alpha club multi long-short Private 2nd
Truston Equity Securities Investment Trust 13th
Phoenix Sky Private Equity Securities 16 th
Hanwha Private Investment Trust 65 th
Hanwha Private Equity Securities 67 th
Main
business
(cid:2790)(cid:1659)
(cid:2790)(cid:1659)
(cid:2790)(cid:1659)
(cid:2790)
(cid:2790)(cid:1659)
(cid:2790)(cid:1659)
(cid:2790)(cid:1659)
Percentage of
ownership (%)
Financial
statements
as of
100.0
100.0
100.0
100.0
100.0
100.0
100.0
December 31
December 31
December 31
December 31
December 31
December 31
December 31
Location
Korea
Korea
Korea
Korea
Korea
Korea
Korea
(*1) It is determined that the Group controls the entity after considering facts and circumstances, such as the Group’s power
over the entity’s related business activities, the Group’s exposure to variable returns from its involvement with the entity,
and the Group’s ability to affect the returns through its power over the entity, even if the Group has less than 50%
ownership of the entity.
(*2) The entity is a money trust that was established in accordance with the Trust Business Act. It is determined that the
Group controls the trust after considering facts and circumstances, such as the Group’s power over the trust’s related
business activities, the Group’s exposure to variable returns from the its involvement with the trust, and the Group’s
ability to affect the returns through its power over the trust.
107
2013 ANNUAL REPORT
- 4 -
Details of special purposes entities (“SPEs”) under the consolidation scope as of December 31, 2013 are as
follows:
Structured entities for asset securitization(*1)
Kumho Trust 1st Co., Ltd.
Subsidiaries
Woori IB Global Bond Co., Ltd.
Asiana Saigon Inc.
An-Dong Raja 1st Co., Ltd.
KAMCO Value Recreation 1st Securitization Specialty LLC.
IB Global 1st LLC.
Hermes STX LLC.
BWL 1st Co., LLC.
Consus 8th Co., LLC.
Woori Pungsan Inc.
Pyeongtaek Ocean Sand Inc.
Deogi Dream Fourth Co., Ltd.
Guam Emerald LLC.
Jeonju iwant LLC.
Wonju iwant LLC.
Height 3rd Co., LLC.
Money Trust by Trust Business Act(*2)
Woori Bank Principal Guaranteed Trust and Woori Bank
Principal and Interest Guaranteed Trust
Structured entities for investing in securities
Haeoreum Short-term Bond 15th
G5 Pro Short-term 13th
G6 First Class Mid-term E-20
G15 First Class Mid-term C-1
D First Class Mid-term C-151
Woori Milestone Private Real Estate Fund 1st
Consus Sakhalin Real Estate Investment Trust 1st
Woori Partner Plus Private Equity Securities 4th
Woori Partner Plus Private Equity Securities 9th
Hanwha Smart Private Trust 50th
Samsung Plus Private Investment Trust 20th
KDB Private Equity Securities Investment Trust WB 3rd
Shinhan BNPP Corporate Private Investment Trust 17th
Woori Partner Plus Private Equity Securities 10th
Yurie WB Private Investment Trust 4 th
Samsung Plus Private Investment Trust 21st
KDB Private Equity Securities Investment Trust WB 4th
Kyobo Axa Tomorrow Private Trust 13th
Say Private Investment Trust WB 1st
Hanwha Private Investment Trust 32 nd
Eugene Pride Private Trust 28th
Hyundai Advantage Private Trust 15th
Woori Smart Investor Private Investment Trust 2 nd
Hana USB Power Private Equity Securities 5th
Mirae Asset Korea Blue Chips Private Trust 3rd
HDC New Star Private Equity Securities 15th
LS Leading Solution Private Equity Securities 118th
Hyundai Platinum Private Equity Securities W-1
Hana USB Power Private Equity Securities 15th
Phoenix Sky Private Equity Securities 11th
Woori Partner Plus Private Equity Securities 11th
Mirae Asset Triumph Private Securities 9th
Kyobo Axa Tomorrow Private Trust 15th
Meritz Prime Private Equity Securities 79th
HDC New Star Private Equity Securities 17 th
Hyundai Advantage Private Trust 16 th
Phoenix private placement Investment Trust 13 th
Hanwha Private Investment Trust 43 rd
(cid:1659)
Location
Main
business
Percentage of
ownership (%)
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Asset
Securitization
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
Trust
Securities
investment
(cid:2790)(cid:1659)
(cid:2790)(cid:1659)
(cid:2790)(cid:1659)
(cid:2790)(cid:1659)
(cid:2790)(cid:1659)
(cid:2790)(cid:1659)
(cid:2790)(cid:1659)
(cid:2790)(cid:1659)
(cid:2790)
(cid:2790)
(cid:2790)(cid:1659)
(cid:2790)
(cid:2790)(cid:1659)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
(cid:2790)
0.0
0.0
0.0
0.0
15.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
100.0
100.0
100.0
100.0
100.0
94.8
75.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Financial
statements
as of
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
October 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
108
woori bank
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(*1) It is determined that the Group controls the entity after considering facts and circumstances, such as the Group’s
power over the entity’s related business activities, the Group’s exposure to variable returns from its involvement with
the entity, and the Group’s ability to affect the returns through its power over the entity, even if the Group has less
than 50% ownership of the entity.
(*2) The entity is a money trust that was established in accordance with the Trust Business Act. It is determined that the
Group controls the trust after considering facts and circumstances, such as the Group’s power over the trust’s related
business activities, the Group’s exposure to variable returns from the its involvement with the trust, and the Group’s
ability to affect the returns through its power over the trust.
The following companies have been excluded from the consolidation scope despite being in current ownership of
majority of equity on December 31, 2013 and 2012:
Golden Bridge Sidus FNH Video
SPEs (*)
Golden Bridge NHN Online Private Equity Investment
Heungkuk High Class Private Investment Trust 377 th
Location
Korea
Korea
Korea
Main
business
Securities
investment
(cid:2790)
(cid:2790)
Percentage of
ownership (%)
58.8
60.0
51.3
(*) The Group has the majority ownership of these SPEs, but has no power over the investees’ relevant
activities. As a result, it is deemed that the Group has no control over the SPEs.
109
2013 ANNUAL REPORT
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3) Details of SPEs newly included in the consolidation scope for the years ended December 31, 2013 and 2012
Reasons
The structured entity is established for asset
securitization. It is determined that the Group
controls the entity after considering facts and
circumstances, such as the Group’s power over
the entity’s related business activities, the
Group’s exposure to variable returns from the
its involvement with the entity, and the Group’s
ability to affect the returns through its power
over the entity.
These structured entities are established for
investments in securities. It is determined that
the Group controls these investees because it is
exposed to variable returns from its
involvement with the investees and has ability
to affect those returns through its power.
are as follows:
< For the year ended in December 31, 2013 >
W-synergy 1st Co., Ltd.
SPEs
Woori Smart Investor Private Investment Trust 4th
Truston Private Equity Securities 12th
Hyundai Platinum Private Equity Securities W-2nd
KTB Safe Private Equity Securities 77th
Woori Partner Plus Private Equity Securities 12th
KDB Private Equity Securities Investment Trust WB 5th (Bond)
Shinhan BNPP Corporate Private Investment Trust 27th (Bond)
Yurie WB Private Investment Trust 5 th (Bond)
Kyobo Axa Tomorrow Private Trust 25th
Mirae Asset Triumph Private Securities 15th
Yurie WB Private Investment Trust 6 th (Bond)
Meritz Prime Private Equity Securities 93 rd
Kyobo Axa Tomorrow Private Trust 26th
Mirae Asset Triumph Private Securities 17th
Hanwha Private Investment Trust 57 th
Hyundai Platinum Private Equity Securities W-3rd
Phoenix private placement Investment Trust 15th
Samsung Plus Private Equity Securities 24th
HDC Private Equity Securities Investment Trust 10th
ING lion Private Equity Securities 47th
Meritz Prime Private Equity Securities 95th
LS leading solution Private Equity Securities 126th
Shinhan BNPP Corporate Private Equity Securities 32th
Hyundai advantage Private Equity Securities 17th
Mirae asset triumph Private Equity Securities 21th
HDC Private Equity Securities Investment Trust 11th
Woori Partner Plus Private Equity Securities 13th
Hi-good choice Equity Securities Investment Trust 8th
Samsung alpha club multi long-short Private 2nd
Truston Equity Securities Investment Trust 13th
Phoenix private placement Investment Trust 16th
Hanwha Private Equity Securities Investment Trust 65th
Hanwha Private Equity Securities Investment Trust 67th (Bond)
110
woori bank Reasons
These structured entities are established for asset
securitization and funded by the Group due to the
impairment of securitization assets. It is
determined that the Group controls these investees
because it is exposed to variable returns from its
involvement with the investees and has ability to
affect those returns through its power.
These structured entities are established for
investments in securities. It is determined that the
Group controls these investees because it is
exposed to variable returns from its involvement
with the investees and has ability to affect those
returns through its power.
- 7 -
< For the year ended in December 31, 2012 >
SPEs
Deogi Dream Fourth Co., Ltd.
Guam Emerald LLC.
Jeonju iwant LLC.(cid:3)
Wonju iwant LLC.(cid:3)
Height 3rd Co., LLC.
(cid:3)
(cid:3)
Samsung Plus Private Investment Trust 20th
Dongbu Premium Private Investment Trust 7th
Woori Partner Plus Private Equity Securities 10th
Shinhan BNPP Corporate Private Investment Trust 17th
KDB Private Equity Securities Investment Trust WB 3rd (Bond)
Woori Smart Investor Private Investment Trust 1st
Yurie WB Private Investment Trust 4 th (Bond)
Samsung Plus Private Investment Trust 21th
KDB Private Equity Securities Investment Trust WB 4th (Bond)
Kyobo Axa Tomorrow Private Trust 13th (Bond)
Say Private Investment Trust WB 1st
Hanwha Private Investment Trust 32 nd
Eugene Pride Private Trust 28th
Woori Smart Investor Private Investment Trust 2nd
Hyundai Advantage Private Trust 15th
Consus Private Investment Trust 64 th
Hana USB Power Private Equity Securities 5th
Mirae Asset Korea Blue Chips Private Trust 3rd
HDC New Star Private Equity Securities 15th
LS Leading Solution Private Equity Securities 118th
Hana USB Power Private Equity Securities 15th
Hyundai Platinum Private Equity Securities W-1st
Phoenix Sky Private Equity Securities 11th
Woori Partner Plus Private Equity Securities 11th
Mirae Asset Triumph Private Securities 9th (Bond)
Kyobo Axa Tomorrow Private Trust 15th (Bond)
Meritz Prime Private Equity Securities 79 th (Bond)
HDC New Star Private Equity Securities 17th (Balanced)
Hyundai Advantage Private Trust 16th
Phoenix private placement Investment Trust 13th
Hanwha Private Investment Trust 43 rd
(cid:1659)
111
2013 ANNUAL REPORT
- 8 -
4) Details of SPEs excluded from the consolidation scope for the years ended December 31, 2013 and 2012 are
Reasons
Expiration of a contract that bears risk to the
management of SPEs or termination of the
securitization schedule
Disposal and repayment of beneficiary
certificates (*)
as follows:
< For the year ended in December 31, 2013 >
IB Global 1st LLC.
SPEs
Samsung Plus Private Investment Trust 20th
KDB Private Equity Securities Investment Trust WB 3rd (Bond)
Shinhan BNPP Corporate Private Investment Trust 17th
Woori Partner Plus Private Equity Securities 10th
Yurie WB Private Investment Trust 4 th (Bond)
Samsung Plus Private Investment Trust 21st
KDB Private Equity Securities Investment Trust WB 4th (Bond)
Kyobo Axa Tomorrow Private Trust 13th (Bond)
Say Private Investment Trust WB 1st
Hanwha Private Investment Trust 32 nd
Eugene Pride Private Trust 28th
Hyundai Advantage Private Trust 15th
Woori Smart Investor Private Investment Trust 2nd
Hana USB Power Private Equity Securities 5th
Mirae Asset Korea Blue Chips Private Trust 3 rd
HDC New Star Private Equity Securities 15th
LS Leading Solution Private Equity Securities 118th
HDC New Star Private Equity Securities 17th (Balanced)
Hyundai Advantage Private Trust 16th
Woori Smart Investor Private Investment Trust 4 th
Truston Private Equity Securities 12th
Hana USB Power Private Equity Securities 15th
Hyundai Platinum Private Equity Securities W-1st
Phoenix Sky Private Equity Securities 11th
Woori Partner Plus Private Equity Securities 11th
Meritz Prime Private Equity Securities 79th
Mirae Asset Triumph Private Securities 9th
Kyobo Axa Tomorrow Private Equity Securities 15th
Woori Partner Plus Private Equity Securities 9th
Phoenix private placement Investment Trust 13th
Hanwha Private Investment Trust 43rd
Hanwha Smart Private Trust 50th (Bond)
(*) 7,908 million Korean Won are reflected in profit and loss in relation with the exclusion from the
consolidation scope due to disposal and repayment of beneficiary certificate.
Reasons
Expiration of a contract that bears risk to the
management of SPEs or termination of the
securitization schedule
Although it possessed the majority of the equity, the
Group cannot influence these investees’ relevant
activities. Therefore, it has been determined that
the Group has no power or control.
Disposal and repayment of beneficiary certificates
(cid:1659)
Real DW 2nd Co., Ltd.
SPEs
Golden Bridge Sidus FNH Video
Golden Bridge NHN Online Private Equity Investment
Woori CS Ocean Bridge 7th
Woori Milestone Private Real Estate Fund 1st
Woori Partner Plus Private Equity Securities 7th
Midas Private investment Trust W-3rd
Allianz Blue Ocean Private Trust 5th
Yurie WB Private Investment Trust 3rd (Bond)
KDB Private Equity Securities Investment Trust WB 2nd (Bond)
Samsung Plus Private Investment Trust 13th
Woori Frontier Alpha Private Equity 8th
Kyobo Axa Long Short Private Trust 2nd
Hanwha Smart Private Trust 43rd (Bond)
Eugene Pride Private Trust 21st (Bond)
112
woori bank - 9 -
Reasons
SPEs
Consus Private Securities Investment Trust 54th
Hanhwa Quant Long Short Private Equity 3rd
Hyundai Advantage Private Trust 14th
Mirae Asset Maps Blue Chips Private Trust 2nd
Dongbu Premium Private Investment Trust 7th
Woori Smart Investor Private Investment Trust 1st
Woori Partner Plus Private Equity Securities 8th
Meritz Prime Private Trust 42nd (Bond)
Consus Private Securities Investment Trust 64th
(cid:1659)
5) Summarized statements of financial position as of December 31, 2013 and December 31, 2012, respectively,
and comprehensive income statements for the years ended December 31, 2013 and December 31, 2012,
respectively, of subsidiaries whose financial information is included on the consolidated financial
statements, are as follows (Unit: Korean Won in millions):
< December 31, 2013 >
Subsidiaries
Woori Credit Information Co., Ltd.
Woori America Bank
PT. Bank Woori Indonesia
Woori Global Market Asia Limited
Woori Bank China Limited
ZAO Woori Bank
Woori Brazil Bank
Korea BTL Infrastructure Fund
Woori Fund Service Co., Ltd.
Woori Bank Principal and Interest
Assets
31,414
1,228,163
666,804
184,475
3,414,199
201,035
143,993
651,973
2,694
Liabilities
5,037
1,073,273
526,192
79,933
2,994,515
146,248
109,940
255
532
Equity
26,377
154,890
140,612
104,542
419,684
54,787
34,053
651,718
2,162
Revenue
35,154
48,707
350,165
7,276
247,721
11,722
7,689
33,747
5,035
Net income
(loss)
1,912
27,939
20,896
2,291
10,258
3,037
(127)
30,687
(270)
Total
comprehensive
income (loss)
2,118
24,532
(18,214)
1,150
3,677
(114)
(4,522)
30,687
(270)
Guaranteed Trust
SPEs under consolidation
Beneficiary certificates under
consolidation
< December 31, 2012 >
1,389,082
573,737
1,361,177
1,053,530
27,905
(479,793)
51,640
41,619
(293)
(58,662)
(293)
(65,385)
2,142,185
30,885
2,111,300
47,273
32,678
29,816
Subsidiaries
Woori Credit Information Co., Ltd.
Woori America Bank
PT. Bank Woori Indonesia
Woori Global Market Asia Limited
Woori Bank China Limited
ZAO Woori Bank
Woori Brazil Bank
Korea BTL Infrastructure Fund
Woori Fund Service Co., Ltd.
Woori Bank Principal and
1,078,995
662,720
181,104
3,036,392
214,258
22,336
584,144
2,952
Assets
Liabilities
Equity
30,917
4,137
948,637
503,895
130,798
2,620,385
190,941
1,810
226
520
26,780
130,358
158,825
50,306
416,007
23,317
20,526
583,918
2,432
Net income
(loss)
Total
comprehensive
income (loss)
2,963
(6,555)
(5,842)
(2,699)
(16,862)
2,180
(5,470)
28,122
75
2,963
3,253
16,133
1,082
14,838
2,631
(424)
28,122
75
Revenue
36,624
47,805
82,658
8,100
207,135
10,960
1,321
30,756
4,592
Interest Guaranteed Trust
SPEs under consolidation
Beneficiary certificates under
consolidation
1,359,282
717,865
1,359,282
1,131,759
-
(413,894)
71,618
37,862
-
(85,344)
-
(85,752)
2,136,045
92,238
2,043,807
75,298
56,221
54,986
113
2013 ANNUAL REPORT
- 10 -
6) The structured entities where the Group has financial interests on involvement, such as:
- Structured entity for the securitization of financial assets
The structured entity is established for the purpose of securitization of project financing loans, corporate
bonds, and other financial assets. The Group is involved with the structured entity through providing
with credit facility over asset-backed commercial papers issued by the entity, originating loans directly
to the structured entity, or purchasing 100% of the subordinated debts issued by the structured entity.
- Security investments structured entity
The structured entity is established for the purpose of investments in securities. The Group acquires
beneficiary certificates through its contribution of fund to the structured entity, and it is exposed to the
risk that it may not be able to recover its fund depending on the result of investment performance of
asset managers of the structured entity.
- Money trust under the Trust Business Act
The Group provides with financial guarantee of principal and interest or principal only to some of its
trust products. Due to the financial guarantees, the Group may be obliged to supplement when the
principal and interest or principal of the trust product sold is short of the guaranteed amount depending
on the result of investment performance of the trust product.
7) The details of the limitations with regard to the transfer of assets or the redemption of liabilities within the
Group are provided below.
Some subsidiaries are regulated by the rules of the jurisdictions in which they were incorporated with regard
to funding or management of deposits. Also, there is a limitation consisting in the fact that they must have
pre-approval from their regulators in case of remittance of earnings to the Parent Company
8) The Group has entered into various agreements with structured entities such as asset securitization vehicles,
structured finance and investment funds. The Group has no controlling power over those structured entities,
which is determined in accordance with K-IFRS 1110. As therefore, those structured entities are not
consolidated to the Group. They are classified as three categories, asset securitization vehicles, structured
finance and investment fund, based on nature and purpose of their investments and risk exposed to the
Group.
Asset securitization vehicle issues asset-backed securities and redeems the principal and interest or
distributes dividends on asset-backed securities with profits from collecting cash flows or sale of securitized
assets. The Group, as a secondary guarantor, provides purchase commitments for its asset-backed securities
or guarantees to such asset securitization vehicle and recognizes commission income or interest incomes
related to the commitment or guarantees. As therefore, the Group would be exposed to risks to purchase or
pay-back asset-backed securities issued by the vehicles when a primary guarantor fails to provide the
financing asset securitization vehicles.
Structured finance includes investments in project financing on real estates, social overhead capital (“SOC”),
infrastructure and shipping finance. They are formed as special purpose entity by funding through equity
investments and loans from various investors. Investment decisions are made by the Group based on
business outlook of such projects. In relation to such investments, the Group recognizes interest incomes on
loans, gains or losses on valuation of equity investments or dividend income. The structured finance is
secured by additional funding agreement, guarantee or credit facilities. However, the structured financing
project would fail to return the capital of equity investments or principal of loans to the Group if it is
discontinued or did not achieve business outcome.
Investment funds include trusts and private equity funds. A trust is formed by contributions from various
investors, operated by a manager engaged to the trust and distributed proceeds from sales of investments to
the investors. A private equity fund is established in order to acquire ownership interests in a portfolio
company with exit strategy after implementing financial and operational restructuring of the company. The
Group recognizes unrealized gains or losses on change in value of investments in proposition of ownership
interests in investments. The Group would be exposed to risks of loss when the value of portfolio investment
is decreased.
114
woori bank - 11 -
Total asset of the unconsolidated structured entities, carrying value of the related items recorded, maximum
exposure to risks, and loss recognized for the year ended December 31, 2013 are as follows (Unit: Korean
Won in millions):
(cid:71)
(cid:71)
Total asset of the unconsolidated structured entities
Assets recognized in the consolidated financial statements
related to the unconsolidated structured entities
Loans and receivables(cid:71)
(Provision for credit loss)
AFS financial assets
HTM financial assets
Investments in associates
Derivative assets
Liabilities recognized in the consolidated financial
statements related to the unconsolidated structured
entities
Other liabilities (Provision)
Maximum exposure to risks(cid:71)
Investments
Purchase agreements
Credit facilities
Other agreements
Loss recognised on unconsolidated structured entities(cid:71)
December 31, 2013(cid:71)
Asset
Securitization
vehicle
7,819,335
Structured
Finance
22,969,448
(cid:71)
Investment
Funds
4,063,207
451,950
90,500
(221)
-
361,576
-
95
17,901
17,901
2,394,611
451,950
511,280
1,309,881
121,500
-
2,579,950
2,592,627
(218,591)
155,246
-
-
50,668
1,321
1,321
3,228,200
2,579,949
-
365,958
282,293
22,142
855,225
-
-
582,389
-
272,836
-
12
12
909,825
855,225
-
54,600
-
3,747
The maximum exposure to risks includes the asset recognized in the financial statement of the Group,
purchase agreements, credit facilities and other agreements related to the unconsolidated structured entities.
115
2013 ANNUAL REPORT
- 12 -
2. SUMMARY OF SIGNIFICANT BASIS OF PREPARATION AND ACCOUNTING POLICIES
The Group has adopted Korean International Financial Reporting Standards (―K-IFRS‖) for the annual periods
beginning on January 1, 2011.
The Group‘s consolidated financial statements have been prepared based on the historical cost method except for
specific non-current assets and certain financial assets or liabilities reported at fair value. The historical cost is
generally measured by fair value of acquired assets.
The consolidated financial statements of the Group were approved by the board of directors on February 28,
2014.
(1) The Group has newly adopted the following new standards and interpretations that made changes in
accounting policies.
Amendments to K-IFRS 1001 „Presentation of Financial Statements‟
The amendments of K-IFRS 1001 relate to the separate presentation of other comprehensive income items
that would not be reclassified as net income subsequently or would be reclassified as net income under
specific circumstances. The amendments have effect on the presentation of consolidated financial
statements and no effects on the financial position and financial performance. The Group applied the
amendments retrospectively and restated the comparative consolidated financial statements.
Amendments to K-IFRS 1019 „Employee Benefits‟
The amendments to K-IFRS 1019 relate to the elimination of the ‗corridor approach‘ permitted under the
previous version of K-IFRS 1019. Accordingly, the actuarial gains or losses are recognized in other
comprehensive income immediately. The amendments replace the expected return on plan assets with a net
interest cost based on the net defined benefit asset or liability. The expected return on plan assets is
included in the net interest on the net defined benefit liability (asset). The past service costs incurred under
changes of plans are recognized at the earlier of the dates when the plan amendment or curtailment occurs
and when the entity recognizes related restructuring costs or termination benefits.
The Group applied the amendments retrospectively and restated the comparative consolidated financial
statements.
As a result, other equity decreased by ￦13,420million and ￦62,246 million and retained earnings
increased by ￦13,420million and ￦62,246 million in the consolidated statements of financial position as
of January 1, 2012 and December 31, 2012, respectively. Net income increased by ￦48,826 million and
other comprehensive income decreased by ￦48,826 million in the comparative consolidated statement of
comprehensive income for the year ended December 31, 2012.
Amendments to K-IFRS 1107 „Financial Instruments: Disclosures‟
The amendments to K-IFRS 1107 are mainly focusing on presentation of the offset between financial assets
and financial liabilities. Irrespective of whether they meet the offset requirement of financial assets and
financial liabilities in accordance with K-IFRS 1032, the amendments to K-IFRS 1107 require disclosing
offsetting agreements and related information which are legally enforced by master netting agreements or
similar agreements. The Group does not hold the offset financial instruments in accordance with K-IFRS
1032 and does not have a master netting arrangement or similar agreements, therefore the amendments
have no significant effect on the Group‘s consolidated financial statements.
Enactment of K-IFRS 1110 „Consolidated Financial Statements‟
K-IFRS 1110 replaces the requirements and guidance in K-IFRS 1027 and K-IFRS 2012 relating to the
consolidated financial statements.
116
woori bank
- 13 -
K-IFRS 1110 uses the concept of ‗control‘ as the determining factor in assessing whether an investee is a
subsidiary. Under K-IFRS 10, an investor controls an investee when the investor is exposed, or has right, to
variable returns from its involvement with the investee and has the ability to affect those returns through its
power over the investee. Extensive application guidance is provided to assist in the determination as to
whether an investor has power over an investee in complex scenarios.
In accordance with transitional provision of K-IFRS 1110, the financial statements for earlier comparative
periods are restated, to ensure conformity with the conclusion of K-IFRS 1110, unless it is impracticable to
do so. At the date of initial application, a reporting entity that has no change in consolidation is not required
to make adjustments to the previous accounting policy.
After reviewing the changes in scope of consolidation resulted from the adoption of K-IFRS 1110, the
Group determined that Principle Guaranteed Trust and five structured entities, including Deogi Dream
Fourth Co., Ltd., became included in the scope of consolidation. As the Group is a trustee of Principal
Guaranteed Trust, trustee holds power, and when entrusted property does not reach its principal, it is
exposed to the significant variable returns to losses. Since it has the ability to influence such benefit, it
satisfies the definition of in K-IFRS 1110, and the five structured entities are under the case in which the
Group directly provides credit due to the lack of securitization of non-performing assets. As a provider of
credit-related activities, it holds power and is exposed to significant variable returns. Since it has influence
over the benefits, it satisfies the definition of control in K-IFRS 1110. In addition, the Group concluded that
due to the adoption of K-IFRS 1110, Golden Bridge Sidus FNH Video and two other structured entities,
which were originally consolidated through the original standard K-IFRS 2012 „Consolidation: Special
Purpose Entities‟ have been excluded from the scope of consolidation. Since the Group does not have
power over the three structured entities including Golden Bride Sidus FNH Video, it does not meet the
definition of control in K-IFRS 1110.
1) Newly consolidated entities in adoption of K-IFRS 1110 are as follows.
Company
Woori Bank Principal Guaranteed Trust
Deogi Dream Fourth Co., Ltd.
Guam Emerald LLC.
Jeonju iwant LLC.
Wonju iwant LLC.
Heights 3rd Co., Ltd.
Location
Korea
Korea
Korea
Korea
Korea
Korea
Main business
Trust
Asset Securitization
Asset Securitization
Asset Securitization
Asset Securitization
Asset Securitization
Percentage of
ownership (%)
-
-
-
-
-
-
2) Deconsolidated entities in adoption of K-IFRS 1110 are as follows.
Company
Golden Bridge Sidus FNH Video
Golden Bridge NHN Online Private Equity
Investment
Woori CS Ocean Bridge 7th
Location
Korea
Main
business
Securities investment
Percentage of
ownership (%)
58.8
Korea
Korea
Securities investment
Securities investment
60.0
61.1
Enactment of K-IFRS 1111 „Joint Arrangement‟
K-IFRS 1111 classifies joint arrangements of which two or more parties have joint control into two types,
joint operations and joint ventures depending on the rights and obligations of the parties to the
arrangements. A joint operation is a joint arrangement whereby the parties have rights to the joint assets,
and obligations for the joint liabilities. A joint venture is a joint arrangement whereby the parties have
rights to the net assets of the arrangement. In case of joint operation, joint operator accounts for its share of
the joint assets, liabilities, revenues, and expenses. In case of joint venture, joint venture account for its
investment using equity method. The adoption of the enactment has no effect on the Group‘s consolidated
financial statements.
117
2013 ANNUAL REPORT
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Enactment of K-IFRS 1112 „Disclosure of Interest in Other Entities‟
The enactment of K-IFRS 1112 establishes disclosures requirements for entities that have an interest in a
subsidiary, a joint arrangement, an associate or an unconsolidated structured entity. The standard requires
that the nature of, and risks associated with, its interests in other entities, the effects of those interests on its
consolidated financial position, comprehensive income and cash flows. The adoption of the enactment has
no significant effect on the Group‘s consolidated financial statements.
Enactment of K-IFRS 1113 „Fair Value Measurement‟
The enactment of K-IFRS 1113 establishes a single source of guidance for fair value measurements and
disclosures about fair value measurements. K-IFRS 1113 defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. When measuring fair value, an entity uses the assumptions that market
participants would use when pricing the asset or liability under current market conditions. The standard
explains that a fair value measurement requires an entity to determine the following the particular asset or
liability being measured, the market in which an orderly transaction would take place for the asset or
liability, the appropriate valuation technique(s) used when measuring fair value. The standard requires
extensive disclosures related to fair value measurement. The adoption of the enactment has no significant
effect on the Group‘s consolidated financial statements.
The effect from the implementation of new accounting standards on the consolidated financial statements
are as followings (Unit: Korean Won in millions):
a. Consolidated statements of financial position
Cash and cash equivalents
Financial assets at fair value through profit or loss
Available-for-sale financial assets
Held-to-maturity financial assets
Loans and receivables
Investments in associates
Investment Properties
Premises and equipment
Intangible assets
Other assets
Current tax assets
Deferred tax assets
Derivative assets
Assets held-for-sale
Total assets
Financial liabilities at fair value through profit or loss
Deposits due to customers
Borrowings
Debentures
Provisions
Current tax liabilities
Other financial liabilities
Other liabilities
Deferred tax liabilities
Derivative liabilities
Total liabilities
Owner‘s equity:
Non-controlling interests
Total equity
Reported
4,593,150
9,855,553
14,484,530
14,341,506
200,049,106
550,332
346,182
2,385,680
108,920
178,460
1,882
82,397
269,414
1,239
247,248,351
3,468,696
168,007,679
17,445,898
17,841,978
645,378
136,517
20,721,110
383,677
7,697
23,827
228,682,457
18,558,283
7,611
18,565,894
December 31, 2012
Adjustment
586
1,133,683
4,017
-
159,219
-
-
-
-
132
472
183
-
-
1,298,292
-
1,208,576
1,032
-
-
-
50,634
1
9,002
-
1,269,245
29,047
-
29,047
Restated
4,593,736
10,989,236
14,488,547
14,341,506
200,208,325
550,332
346,182
2,385,680
108,920
178,592
2,354
82,580
269,414
1,239
248,546,643
3,468,696
169,216,255
17,446,930
17,841,978
645,378
136,517
20,771,744
383,678
16,699
23,827
229,951,702
18,587,330
7,611
18,594,941
Total liabilities and equity
247,248,351
1,298,292
248,546,643
118
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January 1, 2012
Reported
Adjustment
Restated
Cash and cash equivalents
Financial assets at fair value through profit or loss
Available-for-sale financial assets
Held-to-maturity financial assets
Loans and receivables
Investments in associates
Investment Properties
Premises and equipment
Intangible assets
Other assets
Current tax assets
Deferred tax assets
Derivative assets
Assets held-for-sale
Total assets
Financial liabilities at fair value through profit or loss
Deposits due to customers
Borrowings
Debentures
Provisions
Current tax liabilities
Other financial liabilities
Other liabilities
Deferred tax liabilities
Derivative liabilities
Total liabilities
Owner‘s equity:
Non-controlling interests
Total equity
5,389,267
11,317,845
14,670,607
15,400,425
191,909,032
376,337
349,459
2,345,960
147,387
225,530
2,393
9,249
326,413
2,258
242,472,162
3,509,566
164,092,476
19,174,642
19,811,813
607,612
206,367
16,346,969
444,549
126,446
25,582
224,346,022
18,118,198
7,942
18,126,140
841
1,180,881
12,184
-
139,296
-
-
-
-
2
689
(322)
-
-
1,333,571
-
1,360,648
1,032
-
(1)
(1)
(65,698)
2
8,995
-
1,304,977
28,594
-
28,594
5,390,108
12,498,726
14,682,791
15,400,425
192,048,328
376,337
349,459
2,345,960
147,387
225,532
3,082
8,927
326,413
2,258
243,805,733
3,509,566
165,453,124
19,175,674
19,811,813
607,611
206,366
16,281,271
444,551
135,441
25,582
225,650,999
18,146,792
7,942
18,154,734
Total liabilities and equity
242,472,162
1,333,571
243,805,733
119
2013 ANNUAL REPORT
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b. Consolidated income statement
OPERATING INCOME
Net interest income :
Interest income
Interest expense
Net fees and commissions income :
Fees and commissions income
Fees and commissions expense
For the year ended December 31, 2012
Adjustment
Reported
Restated (*)
11,436,460
(5,824,506)
5,611,954
1,040,633
(541,886)
498,747
51,433
(28,922)
22,511
(14,034)
(188)
(14,222)
11,487,893
(5,853,428)
5,634,465
1,026,599
(542,074)
484,525
Dividend income
94,847
-
94,847
Gain (loss) on financial instruments at fair value through
profit or loss
(355,739)
(5,200)
(360,939)
Gain on available-for-sale financial assets
552,325
463
552,788
Impairment losses for loans, other receivables, guarantees
and unused commitments
(1,797,702)
(594)
(1,798,296)
General and administrative expenses
(2,727,640)
64,415
(2,663,225)
Net other operating income (expenses)
NON-OPERATING INCOME
(177,835)
1,698,957
76,328
(2,250)
65,123
(1,987)
(180,085)
1,764,080
74,341
NET INCOME BEFORE INCOME TAX EXPENSE
1,775,285
63,136
1,838,421
INCOME TAX EXPENSE
(326,710)
(14,794)
(341,504)
NET INCOME
1,448,575
48,342
1,496,917
Net income attributable to the owner
Net income attributable to the non-controlling interests
1,447,904
671
48,342
-
1,496,246
671
(*) Profit or loss from discontinued operations is included.
120
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c. Consolidated statements of cash flows
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
Adjustment to net income:
Interest income
Interest expense
Dividend income
Income tax expense
Additions of expenses not involving cash outflows:
Impairment losses for loans, other receivables, guarantees
and unused commitments
Retirement benefits
Loss on derivatives for hedging
Loss on fair value hedged items
Loss on valuation of investments in associates
Loss on disposals of investments in associates
Loss on disposals of premises and equipment, intangible
assets and investment properties
Depreciation and amortization of premises and equipment,
intangible assets and investment properties
Impairment loss on premises and equipment, intangible
assets and investment properties
Provisions
Deductions of revenues not involving cash inflows:
Gain on available-for-sale financial assets
Gain on derivatives for hedging
Gain on fair value hedged items
Gain on valuation of investments in associates
Gain on disposals of investments in associates
Gain on disposals of premises and equipment, intangible
assets and investment properties
Reversal of impairment loss on premises and equipment,
intangible assets and investment properties
Provisions
Changes in operating assets and liabilities:
Financial instruments at fair value through profit or loss
Loans and receivables
Other assets
Deposits due to customers
Provisions
Other financial liabilities
Other liabilities
Interest income received
Interest expense paid
Dividend received
Income taxes paid
Net cash provided by operating activities
For the year ended December 31, 2012
Reported
Adjustment
Restated (*)
1,448,575
48,342
1,496,917
(11,436,325)
5,824,506
(94,847)
326,711
(5,379,955)
1,797,702
152,920
49,956
43,817
11,389
167
346
135,406
1,942
27,652
2,221,297
552,325
39,232
43,879
38,815
25,102
1,549
2,342
3,141
706,385
1,421,421
(9,338,842)
33,735
3,912,425
(143,743)
4,487,718
(12,642)
360,072
11,499,254
(5,917,345)
94,848
(444,888)
3,175,473
(51,568)
28,922
-
14,793
(7,853)
594
(64,415)
-
-
-
-
-
-
-
(1,143)
(64,964)
463
-
-
-
-
-
(1,986)
-
(1,523)
47,687
83,661
221
(152,071)
-
(10,439)
(175)
(31,116)
54,075
47,175
-
-
47,182
(11,487,893)
5,853,428
(94,847)
341,504
(5,387,808)
1,798,296
88,505
49,956
43,817
11,389
167
346
135,406
1,942
26,509
2,156,333
552,788
39,232
43,879
38,815
25,102
1,549
356
3,141
704,862
1,469,108
(9,255,181)
33,956
3,760,354
(143,743)
4,477,279
(12,817)
328,956
11,553,329
(5,870,170)
94,848
(444,888)
3,222,655
121
2013 ANNUAL REPORT
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For the year ended December 31, 2012
Reported
Adjustment
Restated (*)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash in-flows from investing activities:
Disposals of available-for-sale financial assets
Disposals of held-to-maturity financial assets
Disposals of investments in associates
Disposals of premises and equipment
Disposals of intangible assets
Disposals of assets held-for-sale
Cash out-flows from investing activities:
Acquisitions of available-for-sale financial assets
Acquisitions of held-to-maturity financial assets
Acquisitions of investments in associates
Acquisitions of premises and equipment
Acquisitions of intangible assets
Decrease in hedging derivatives
Net cash provided by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash in-flows from financing activities:
Issue of borrowings
Issue of debentures
Increase in hedging derivatives
Cash out-flows from financing activities:
Repayment of borrowings
Repayment of debentures
Decrease in hedging derivatives
Dividends paid
Net cash used in financing activities
17,389,744
9,795,378
15,171
7,539
566
1,725
27,210,123
17,518,312
9,024,781
59,918
131,850
9,423
1,708
26,745,992
464,131
3,977,649
5,390,611
91,397
9,459,657
5,707,281
7,367,677
44,187
609,251
13,728,396
(4,268,739)
-
-
-
-
-
-
-
-
-
-
-
-
228
228
(228)
-
-
(91,397)
(91,397)
-
-
(44,187)
-
(44,187)
(47,210)
17,389,744
9,795,378
15,171
7,539
566
1,725
27,210,123
17,518,312
9,024,781
59,918
131,850
9,423
1,936
26,746,220
463,903
3,977,649
5,390,611
-
9,368,260
5,707,281
7,367,677
-
609,251
13,684,209
(4,315,949)
EFFECTS OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS
(166,981)
-
(166,981)
NET DECREASE IN CASH AND CASH EQUIVALENTS
(796,116)
(256)
(796,372)
CASH AND CASH EQUIVALENTS, BEGINNING OF
THE YEAR
5,389,267
CASH AND CASH EQUIVALENTS, END OF THE YEAR
4,593,151
841
585
5,390,108
4,593,736
(2) The Group has not applied the following K-IFRSs that have been issued but are not yet effective:
Amendments to K-IFRS 1032 „Financial Instruments: Presentation‟
The amendments to K-IFRS 1032 clarify the requirement for the offset presentation of financial assets and
financial liabilities. The right to offset is unconditional to future events and can be exercised always during
the contract periods. The right to offset is executable even in the case of default or insolvency. The
amendments to K-IFRS 1032 are effective for the annual periods beginning on or after January 1, 2014.
Amendments to K-IFRS 1039 – Financial Instruments: Recognition and Measurement
The amendments to K-IFRS 1039 allows the continuation of hedge accounting when a derivative is novated
to a clearing counterparty or entity acting in a similar capacity and certain conditions are met. The
amendments to K-IFRS 1039 are effective for annual periods beginning on or after January 1, 2014.
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Amendments to K-IFRS 1110, K-IFRS 1112 and K-IFRS 1027 Investment Entities
The amendments introduce an exception to the principle under K-IFRS 1110 that all subsidiaries shall be
consolidated and require a reporting entity that meets the definition of an investment entity not to
consolidate its subsidiaries but instead to measure its subsidiaries at fair value through profit or loss in its
consolidated and separate financial statements. In addition, consequential amendments have been made to
K-IFRS 1112 and K-IFRS 1027 to introduce new disclosure requirements for investment entities. The
investment entities amendments are effective for annual periods beginning on or after January 1, 2014.
K-IFRS 2121 Levies
K-IFRS 2121 defines a levy as a payment to a government for which an entity receives no specific goods or
services. The interpretation requires that a liability is recognized when the obligating event occurs. The
obligating event is the activity that triggers payment of the levy and is typically specified in the legislation
that imposes the levy. The interpretation is effective for annual periods beginning on or after January 1,
2014.
The list above does not include some other amendments such as the Amendments to K-IFRS 1036 relating
to recoverable amount disclosures for non-financial assets that are effective from January 1, 2014 with
earlier application permitted.
The Group is in the process of evaluating the impact on the financial statements upon the application of
new and revised K-IFRSs that have been issued but are not yet effective.
(3) Others
1) Change in presentation of employee benefits in general and administrative expenses
Certain fringe benefits, which were considered as short term employee benefits and previously included in
other general and administrative expenses, are separately presented as an item of salaries in general and
administrative expenses. The impact from the reclassification is incorporated in the comparative other
general and administrative expenses. Such changes in presentation of employee benefits have no effect on
the net assets and net income of the Group.
The changes in presentation of consolidated financial statements for the year ended December 31, 2012, are
as follows (Unit: Korean Won in millions):
Employee benefits
Depreciation and amortization
Other general and administrative expenses
Reported
Adjustment
Restated (*)
1,247,956
131,970
1,347,714
2,727,640
259,185
-
(259,185)
-
1,507,141
131,970
1,088,529
2,727,640
(*) The effects of the application of K-IFRS 1019 „Employee Benefits‟ are not included but profit and loss
from discontinued operations is included above.
2) Net income for financial assets and financial liabilities designated at ‗fair value through profit or loss‘
(―FVTPL‖)
The Group has reclassified ￦ 329,005 million from financial liabilities held for trading (equity derivative
liabilities) to financial liabilities designated at FVTPL (equity compound financial instruments) that are
shown in Note 20 in order to facilitate the comparison between financial statements. As a result of the
reclassification, loss from financial liabilities designated at FVTPL (compound financial instruments)
increased by ￦ 34,991 million and loss from financial liabilities held for trading (loss from equity
derivatives) decreased by ￦ 34,991 million for the year ended December 31, 2012, that is shown in Note
36. The reclassification has no impact on the net assets and net income of the Group as of December 31,
2012 and for the year ended in December 31, 2012.
123
2013 ANNUAL REPORT
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(4) Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
(including structured entities) controlled by the Company (and its subsidiaries). Control is achieved where
the Company 1) has the power over the investee, 2) is exposed, or has rights, to variable returns from its
involvement with the investee, and 3) has the ability to use its power to affect its returns. The Company
reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the
investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of
the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether
or not the Company's voting rights in an investee are sufficient to give it power, including:
• The size of the Company's holding of voting rights relative to the size and dispersion of holdings of the
other vote holders,
• Potential voting rights held by the Company, other vote holders or other parties
• Rights arising from other contractual arrangements
• Any additional facts and circumstances that indicate that the Company has, or does not have, the current
ability to direct the relevant activities at the time that decisions need to be made, including voting
patterns at previous shareholders' meetings.
Income and expenses of subsidiaries acquired or disposed of during the year are included in the
consolidated statement of comprehensive income from the date the Company gains control until the date
when the Company ceases to control the subsidiary. Profit or loss and each component of other
comprehensive income are attributed to the owner of the Company and to the non-controlling interests.
Total comprehensive income of subsidiaries is attributed to the owner of the Company and to the non-
controlling interests even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with the Group‘s accounting policies.
All intra-group transactions and, related assets and liabilities, income and expenses are eliminated in full on
consolidation.
Changes in the Group‘s ownership interests in subsidiaries that do not result in the Group losing control
over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group‘s interests
and the non-controlling interests are adjusted to reflect the changes in their relative interests in the
subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and
the fair value of the consideration paid or received is recognized directly in equity and attributed to the
owner of the Company.
When the Group loses control of a subsidiary, a gain or loss on disposal is calculated as the difference
between (i) the aggregate of the fair value of the consideration received and the fair value of any retained
interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the
subsidiary and any non-controlling interests. When assets of the subsidiary are carried at revalued amounts
or fair values and the related cumulative gain or loss has been recognized in other comprehensive income
and accumulated in equity, the amounts previously recognized in other comprehensive income and
accumulated in equity are accounted for as if the Company had directly disposed of the relevant assets (i.e.
reclassified to profit or loss or transferred directly to retained earnings). The fair value of any investment
retained in the former subsidiary at the date when control is lost is recognized as the fair value on initial
recognition for subsequent accounting under K-IFRS 1039 Financial Instruments: Recognition and
Measurement or, when applicable, the cost on initial recognition of an investment in an associate or a joint
venture.
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in
a business combination is measured at fair value, which is calculated as the sum of the fair values of the
assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and
the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs
are generally recognized in profit or loss as incurred.
124
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At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their
fair value at the acquisition date, except that:
- Deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are
recognized and measured in accordance with K-IFRS 1012 Income Taxes and K-IFRS 1019 Employee
Benefits respectively;
- Liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-
based payment arrangements of the Group entered into to replace share-based payment arrangements of
the acquiree are measured in accordance with K-IFRS 1102 Share-based Payment at the acquisition
date; and
- Assets (or disposal groups) that are classified as held for sale in accordance with K-IFRS 1105 Non-
current Assets Held for Sale and Discontinued Operations are measured in accordance with that
standard.
Goodwill is measured as the excess of the sum of: a) the consideration transferred, b) the amount of any
non-controlling interests in the acquiree, and c) the fair value of the acquirer's previously held equity
interest in the acquiree (if any); over the net of the acquisition-date amounts of the identifiable assets
acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the
identifiable assets acquired and liabilities assumed exceeds the sum of: a) the consideration transferred, b)
the amount of any non-controlling interests in the acquiree, and c) the fair value of the acquirer's previously
held interest in the acquiree (if any); the excess is recognized immediately in profit or loss as a bargain
purchase gain.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate
share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at
the non-controlling interests' proportionate share of the recognized amounts of the acquiree's identifiable
net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of
non-controlling interests are measured at fair value or, when applicable, on the basis specified in another K-
IFRS.
When the consideration transferred by the Group in a business combination includes assets or liabilities
resulting from a contingent consideration arrangement, the contingent consideration is measured at its
acquisition-date fair value and included as part of the consideration transferred in a business combination.
Changes in the fair value of the contingent consideration that qualify as measurement period adjustments
are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period
adjustments are adjustments that arise from additional information obtained during the ‗measurement
period‘ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed
at the acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify
as measurement period adjustments depends on how the contingent consideration is classified. Contingent
consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent
settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability
is remeasured at subsequent reporting dates in accordance with K-IFRS 1039 Financial Instruments:
Recognition and Measurement, or K-IFRS 1037 Provisions, Contingent Liabilities and Contingent Assets,
as appropriate, with the corresponding gain or loss being recognized in profit or loss.
When a business combination is achieved in stages, the Group's previously held equity interest in the
acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Company obtains control)
and the resulting gain or loss, if any, is recognized in profit or loss. Amounts arising from interests in the
acquiree prior to the acquisition date that have previously been recognized in other comprehensive income
are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in
which the combination occurs, the Group reports provisional amounts for the items for which the
accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see
above), or additional assets or liabilities are recognized, to reflect new information obtained about facts and
circumstances that existed at the acquisition date that, if known, would have affected the amounts
recognized at that date.
125
2013 ANNUAL REPORT
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(5)
Investments in associates
An associate is an entity over which the Group has significant influence. Significant influence is the power
to participate in the financial and operating policy decisions of the investee but is not control or joint
control over those policies.
The results and assets and liabilities of associates are incorporated in these consolidated financial
statements using the equity method of accounting, except when the investment is classified as held for sale,
in which case it is accounted for in accordance with K-IFRS 1105 Non-current Assets Held for Sale and
Discontinued Operations. Under the equity method, an investment in an associate is initially recognized in
the consolidated statement of financial position at cost and adjusted thereafter to recognize the Group's
share of the profit or loss and other comprehensive income of the associate. When the Group's share of
losses of an associate exceeds the Group's interest in that associate (which includes any long-term interests
that, in substance, form part of the Group's net investment in the associate), the Group discontinues
recognizing its share of further losses. Additional losses are recognized only to the extent that the Group
has incurred legal or constructive obligations or made payments on behalf of the associate.
Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets,
liabilities and contingent liabilities of an associate recognized at the date of acquisition is recognized as
goodwill, which is included within the carrying amount of the investment. Any excess of the Group‘s share
of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition,
after reassessment, is recognized immediately in profit or loss.
Upon disposal of an associate that results in the Group losing significant influence over that associate, any
retained investment is measured at fair value at that date and the fair value is regarded as its fair value on
initial recognition as a financial asset in accordance with K-IFRS 1039. The difference between the
previous carrying amount of the associate attributable to the retained interest and its fair value is included
in the determination of the gain or loss on disposal of the associate. In addition, the Group accounts for all
amounts previously recognized in other comprehensive income in relation to that associate on the same
basis we would be required if that associate had directly disposed of the related assets or liabilities.
Therefore, if a gain or loss previously recognized in other comprehensive income by that associate would
be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the
gain or loss from equity to profit or loss (as reclassification adjustment) when it loses significant influence
over that associate.
When the Group reduces its ownership interest in an associate but the Group continues to use the equity
method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been
recognized in other comprehensive income relating to that reduction in ownership interest if that gain or
loss would be reclassified to profit or loss on the disposal of the related assets or liabilities. In addition, the
Group applies K-IFRS 5 to a portion of investment in an associate that meets the criteria to be classified as
held for sale.
The requirements of K-IFRS 1039 Financial Instruments: Recognition and Measurement are applied to
determine whether it is necessary to recognize any impairment loss with respect to the Group‘s investment
in an associate. When necessary, the entire carrying amount of the investment (including goodwill) is tested
for impairment in accordance with K-IFRS 1036 Impairment of Assets by comparing its recoverable
amount (higher of value in use and fair value less costs to sell) with its carrying amount, any impairment
loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is
recognized in accordance with K-IFRS 1036 to the extent that the recoverable amount of the investment
subsequently increases.
When a group entity transacts with an associate of the Group, profits and losses resulting from the
transactions with the associate are recognized in the Group's consolidated financial statements only to the
extent of interests in the associate that are not related to the Group.
(6) Segment reporting
An operating segment is the level of business activity at which management reports to chief operating
decision maker, for decision making purposes. In addition, the chief operating decision maker is
responsible for evaluating the resources distributed to and the performance of an operating segment.
126
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(7) Accounting for foreign currencies translations
1) Functional currency and presentation currency
The individual financial statements of each entity in the Group are presented in the currency of the primary
economic environment in which the entity operates (―functional currency‖). The consolidated financial
statements are expressed in Korean Won.
2) Translation of foreign currency transactions and balances at the end of reporting period
In preparing the financial statements of the individual entities, transactions in currencies other than the
entity‘s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the
dates of the transactions. At the end of each reporting period, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items that
qualify as hedging instruments in a cash flow hedge and form part of the Group‘s net investment in a
foreign operation are recognized in equity.
The Group is recognizing amortization and exchange rate variation effect as gains or losses of current
period and the variation on the fair value as other comprehensive income or loss, respectively, both of
which are effect of monetary securities of foreign currencies classified as available-for-sale financial
instruments. And the Group is recognizing the variation on fair value and exchange rate variation effect of
non-monetary securities of foreign currencies classified as available-for-sale financial asset, as other
comprehensive income or loss.
3) Foreign currencies translation
Financial position and operating results of the Group are translated into the Group‘s reporting currency as
follows:
Statement of consolidated
financial position
Statement of consolidated
comprehensive income
Description
The assets and liabilities are translated at the exchange rate prevailing at
the end of the reporting period. Equity is translated at exchange rate at
the time of acquisition.
The statement of consolidated comprehensive income is translated at the
average exchange rates for the period, unless exchange rates fluctuated
significantly during that period, in which case the exchange rates at the
dates of the transactions are used.
(8) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, demand deposits and short-term, highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value.
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(9) Financial assets and financial liabilities
1) Classification of financial assets
Financial assets are classified into the following categories depending on the nature and purpose of
possession: financial assets at FVTPL, loans and receivables, available-for-sale (―AFS‖) financial assets,
and held-to-maturity (―HTM‖) investments.
a) Financial assets at FVTPL
Financial assets are classified at FVTPL when the financial asset is either held for trading or designated at
FVTPL. A financial asset is classified as held for trading if it meets one of the following criteria:
– acquired or incurred principally to sell or repurchase during a short period of time;
– part of a portfolio of identified financial instruments that are managed together and for which there is
evidence of a recent actual pattern of short-term profit-taking; or
– a derivative (except for a derivative that is a financial guarantee contract or a designated and effective
hedging instrument).
A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial
recognition if:
– such designation eliminates or significantly reduces a recognition or measurement inconsistency that
would otherwise arise;
– the financial asset forms part of a group of financial assets or financial liabilities or both, which is
managed and its performance is evaluated on a fair value basis, in accordance with the Group's
documented risk management or investment strategy, and information about the grouping is provided
internally on that basis; or
– it forms part of a contract containing one or more embedded derivatives, and in accordance with K-
IFRS 1039 “Financial Instruments: Recognition and Measurement”, permits the entire hybrid
(combined) contract to be designated as at FVTPL.
Financial assets at FVTPL are recognized at fair value and gains and losses from the assets are recognized
in net income as they arise.
b) AFS financial assets
AFS financial assets are those non-derivatives financial assets that are either designated as AFS financial
assets or are not classified as ‗financial assets at FVTPL‘, ‗HTM investments‘ or ‗loans and receivables‘
c) HTM financial assets
Non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the
Group has the positive intent and ability to hold to maturity are classified as HTM financial assets.
d) Loans and receivables
Non-derivative financial assets with fixed or determinable repayments that are not quoted in an active
market are classified as loans and receivables, except those that are classified as AFS or as held-for-trading,
or designated as at FVTPL.
2) Classification of financial liabilities
Financial liabilities are classified as either financial liabilities at FVTPL or other financial liabilities
measured at amortized cost.
a) Financial liabilities at FVTPL
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Financial liabilities are classified at FVTPL when the financial liabilities is either held for trading or
designated as at FVTPL. A financial liability is classified as held for trading if it meets one of the following
criteria:
– acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
– part of a portfolio of identified financial instruments that are managed together and for which there is
evidence of a recent actual pattern of short-term profit-taking; or
– a derivative (except for a derivative that is a financial guarantee contract or a designated and effective
hedging instrument).
A financial liability other than a financial liability held for trading may be designated as at FVTPL upon
initial recognition if:
– such designation eliminates or significantly reduces a recognition or measurement inconsistency that
would otherwise arise;
– the financial asset forms part of a group of financial assets or financial liabilities or both, which is
managed and its performance is evaluated on a fair value basis, in accordance with the Group's
documented risk management or investment strategy, and information about the grouping is provided
internally on that basis; or
– it forms part of a contract containing one or more embedded derivatives, and K-IFRS 1039 ―Financial
Instruments: Recognition and Measurement‖ permits the entire hybrid (combined) contract to be
designated as at FVTPL.
b) Financial liabilities measured at amortized costs
Financial liabilities that are not classified as at FVTPL are measured at amortized costs. Deposits and debt
securities that are not designated as at FVTPL are classified as financial liabilities measured at amortized
costs.
3) Recognition and Measurement
Standard trading transaction of a financial asset is recognized at the date of transaction when the Group
becomes a party to the contractual provisions of the asset. All types of financial instruments, except
financial assets/liabilities at FVTPL, are measured at fair value at initial recognition plus transaction costs
that are directly attributable to the acquisition (issuance). Financial assets/liabilities at FVTPL are initially
recognized at fair value and transaction costs directly attributable to the acquisition (issuance) are
recognized in the consolidated statements of comprehensive income.
Financial assets/liabilities at FVTPL and AFS financial assets are subsequently measured at fair value.
HTM financial assets, loans and receivables, and other financial liabilities are measured at amortized costs
using the effective interest method.
Interest income and expense in accordance with financial assets and liabilities are recognized in net income
on an accrual basis using the effective interest method.
Gains or losses arising from changes in the fair value of the financial assets/liabilities at FVTPL are
presented in the consolidated statements of comprehensive income during the period in which they arise.
Changes in the fair value of AFS financial assets are measured in other comprehensive income.
Dividends income of financial assets at FVTPL and AFS financial assets is recognized in net income when
the Group‘s right to receive the dividend is established.
AFS financial assets recognize cumulative fair value adjustment, which is previously recognized in the
equity, in net income when disposing of assets or recognizing impairment loss.
4) Derecognition of financial assets and liabilities
The Group derecognizes a financial asset when the contractual right to the cash flows from the asset is
expired, or when it transfers the financial asset and substantially all the risks and rewards of ownership of
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the asset to another company. If the Group neither transfers nor retains substantially all the risks and
rewards of ownership and continues to control the transferred asset, the Group recognizes its retained
interest in the asset and an associated liability for amounts it may have to pay. If the Group retains
substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to
recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the asset‘s carrying amount and
the sum of the consideration received and receivable and the cumulated gain or loss that had been
recognized in other comprehensive income and accumulated in equity is recognized in profit or loss.
On derecognition of a financial assets other than in its entirety (e.g. when the Group retains an option to
repurchase part of a transferred asset, or it retains a residual interest and such an retained interest indicates
that the transferor has neither transferred nor retained substantially all the risks and rewards of ownership
and has retained control of the transferred asset), the Group allocates the previous carrying amount of the
financial asset between the part it continues to recognize under continuing involvement, and the part it no
longer recognizes on the basis of the relative fair value of those parts on the date of the transfer. The
difference between the carrying amount allocated to the part that is no longer recognized and the sum of the
consideration received for the part that is no longer recognized and any cumulative gain or loss allocated to
it that had been recognized in other comprehensive income is recognized in profit or loss. A cumulative
gain or loss that had been recognized in other comprehensive income is allocated between the part that
continues to be recognized and the part that is no longer recognized on the basis of the relative fair value of
those parts.
The Group derecognizes the financial liability, when Group's obligations are discharged, canceled or
expired. The difference between paid cost and the carrying amount of financial liabilities is recorded in
profit or loss.
(10) Offsetting financial instruments
Financial assets and liabilities are presented net in the consolidated statements of financial position when the
Group has an enforceable legal right to set off and an intention to settle on a net basis or to realize an asset and
settle the liability.
(11) Impairment of financial assets
1) Assets carried at amortized costs
The Group assesses at the end of each reporting period whether there is any objective evidence that a
financial asset (or a group of financial assets) is impaired. A financial asset (or a group of financial assets)
is regarded as impaired when there is objective evidence of impairment loss as a result of one or more
events (hereinafter the ―loss event‖) that occurred after the initial recognition and the loss event has an
impact on the estimated future cash flows of the financial asset.
The criteria used to determine whether there is objective evidence of impairment include:
– significant financial difficulty of the issuer or obligor;
– a breach of contract, such as a default or delinquency in interest or principal payments;
– the lender, for economic or legal reasons relating to the borrower's financial difficulty, granting to the
borrower a concession that the lender would not otherwise consider;
– it becoming probability that the borrower will enter bankruptcy or financial re-organization;
– the disappearance of an active market for the financial asset due to financial difficulties; or
– observable data indicating that there is a measurable decrease in the estimated future cash flows of a
group of financial assets after initial recognition, although the decrease in the estimated future cash
flows of individual financial assets included in the group is not identifiable.
For individually significant financial assets, the Group assesses whether objective evidence of impairment
exists individually, and it assesses for impairment of financial assets that are not significant on an
individual or collective basis. If there is no objective evidence of impairment exists for financial assets
individually assessed, the Group includes the asset in a group of financial assets with similar credit risk
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characteristics and collectively assesses them for impairment. Assets for which the Group recognizes
impairment based on an individual assessment or impairment loss is continuously recognized are not
subject to a collective impairment assessment.
The amount of impairment loss is measured as the difference between the asset‘s carrying amount and the
present value of estimated future cash flows (excluding future credit loss that are not yet incurred), which is
discounted at the financial asset‘s original effective interest rate. The amount of loss is reduced directly
from the asset‘s carrying value or by using a provision account, and it is recognized in net income.
For loans and receivables or HTM financial assets with the variable interest rate, the current effective
interest rate, which is determined under the contract, is used to measure impairment loss.
Whether collateral inflow is probable or not, the present value of the estimated future cash flows of
collateralized financial asset is calculated as the cash flows, which may arise from collateral inflow, less
costs of acquiring and selling collateral.
Future cash flows for a group of financial assets that are collectively assessed for impairment are estimated
based on the historical loss experience of assets having credit risk characteristics, similar to those in the
group of financial assets. If the historical loss experience is not enough or not existed, similar corporation‘s
comparable historical loss experience of a group of financial assets is used. The effects of current
conditions that do not have an impact in the historical loss experience period are reflected, and the
historical loss experience is adjusted based on the current observable data in order to remove the effects of
conditions that currently do not exist but existed in the historical loss experience period.
For a collective assessment on impairment, financial assets are classified based on similar credit risk
characteristics (i.e. based on the assessment of credit risk or grading process, considering asset type,
industry, geographical location, collateral type, past-due status, and other relevant elements) indicating the
debtor‘s ability to pay all amounts of debt under the contractual terms. These characteristics are relevant to
the estimation of future cash flows for groups of such assets as being indicative of the debtors‘ ability to
pay all amounts due according to the contractual terms of the assets being evaluated.
When estimating the changes in future cash flows, observable data (i.e. an impairment loss arising from a
pool of assets, an unemployment rate indicating the loss and its parameter, asset price, product price, or
payment status) needs to be consistently reflected. The methodology and assumptions used for estimating
future cash flows are reviewed regularly to reduce the difference between loss estimates and actual loss
experience.
When the amount of impairment loss decreases subsequently and the decrease is related to an event
occurred after the impairment is recognized (i.e. an improvement in the debtor‘s credit rating), the
previously recognized impairment loss is reversed directly from or by adjusting the provision account. The
reversed amount is recognized in net income for the current period.
2) AFS financial assets
The Group assesses at the end of each reporting period whether there is objective evidence that the Group‘s
financial asset (or a group of financial assets) is impaired. For debt securities, the Group uses the criteria
refer to (9)-1) above.
For equity investments classified as AFS financial assets, a significant or prolonged decline in the fair value
below the cost is considered objective evidence of impairment. When the fair value of an AFS financial
asset is decreased below its acquisition cost which is considered an objective evidence of impairment, the
cumulative loss, amounting to the difference between the acquisition cost and the current fair value, is
removed from other comprehensive income and recognized as an impairment loss in net income. For AFS
equity instruments, impairment losses recognized on equity instruments are not reversed through net
income. Meanwhile, when the fair value of AFS debt instrument increases in a subsequent period and the
evidence is objectively related to an event occurred after recognizing the impairment loss, the impairment
loss is reversed and recognized in net income.
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(12) Investment properties
The Group classifies the property held to earn rental or capital gain purpose as investment property. The
investment property is measured at its cost at the initial recognition plus transaction costs arising at acquisition
and after recognition, and is presented at cost less accumulated depreciation and accumulated impairment loss as
carrying value.
Subsequent costs are included in the carrying amount of the asset or recognized as a separate asset if it is
probable that future economic benefits associated with the assets will flow into the Group and the cost of an asset
can be measured reliably. Routine maintenance and repairs are expensed as incurred.
While land is not depreciated, all other investment properties is depreciated based on the respective assets‘
estimated useful lives using the straight-line method. The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for
on a prospective basis.
(13) Premises and equipment
Premises and equipment are stated at cost less subsequent accumulated depreciation and accumulated
impairment losses. The cost of an item of premises and equipment is directly attributable to their purchase or
construction, which includes any costs directly attributable to bringing the asset to the location and condition
necessary for it to be capable of operating in the manner intended by management. It also includes the initial
estimate of the costs of dismantling and removing the item and restoring the site on which it is located.
Subsequent costs to replace part of the premises and equipment are included in the carrying amount of the asset
or recognized as a separate asset if it is probable that the future economic benefits associated with the assets will
flow into the Group and the cost of an asset can be measured reliably. The carrying amount of the replaced part
is eliminated from the books. Routine maintenance and repairs are expensed as incurred.
Premises and equipment are depreciated on a straight-line basis on the estimated economic useful lives as
follows:
Classification
Buildings used for business purpose
Structures in leased office
Movable properties for business purposes
Leased assets
Useful life
40 years
5 years
5 years
Of the same kind or with similar useful lives
The Group reviews the depreciation method, the estimated useful lives and residual values of fixed assets at the
end of each annual reporting period. If expectations differ from previous estimates, the changes are accounted
for as a change in an accounting estimate. When the carrying amount of a fixed asset exceeds the estimated
recoverable amount, the carrying amount of such asset is reduced to the recoverable amount.
(14) Intangible assets
1) Goodwill
Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets
acquired, liabilities and contingent liabilities assumed at the date of acquisition is recognized as goodwill.
Such goodwill is classified as intangible assets.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more
frequently when there is any indication that the unit may be impaired. If the recoverable amount of the
cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit and then to the other assets of the unit on a pro-rata
basis based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is
recognized directly in net income in the consolidated statements of comprehensive income. An impairment
loss recognized for goodwill is not reversed in subsequent periods.
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On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the
determination of the gain or loss on disposal.
2) Development costs, patents and other intangible assets
Intangible assets are stated at the manufacturing cost or acquisition cost plus additional incidental expenses
less accumulated amortization and accumulated impairment losses.
Expenditures incurred in conjunction with development of new products or technology, in which the
elements of costs can be individually identified and future economic benefits are probably expected, are
capitalized as development costs under intangible assets. If the Group donates assets, such as buildings, to
the government and is given a right to use or benefit from the assets, the donated assets are recorded as
beneficial donated assets under intangible assets.
Intangible assets are amortized using the straight-line method over the estimated useful lives, which are five
years for development costs, contractual contact period for the beneficial donated assets, ten years for
patents and five years for other intangible assets.
The estimated useful life and amortization method are reviewed at the end of each reporting period. If
expectations differ from previous estimates, the changes are accounted for as a change in an accounting
estimate.
Intangible assets, including goodwill and membership, with indefinite useful lives are tested for impairment
annually. All other assets are tested for impairment when there is an objective indication that the carrying
amount may not be recoverable, and if the indication exists, the Group estimates the recoverable amount.
(15) Impairment of non-monetary assets
Impairment loss is recognized carrying amount exceeding recoverable amount, recoverable amount is the higher
of value in use and net fair value less costs to sell.
For impairment testing purposes, assets are allocated to each of the Group‘s cash-generating units (―CGU‖).
Non-monetary assets, except for goodwill impaired, are reviewed in subsequent periods for potential recovery of
value and reversal of impairment previously recognized, at the end of each reporting period.
(16) Lease
A lease is classified as a financial lease, if it transfers substantially all the risks and rewards incidental to
ownership with the lessee. Assets held under finance leases are initially recognized as assets of the Group at their
fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The
corresponding liability to the lessor is included in the consolidated statements of financial position as a finance
lease obligation. Lease obligation deducting related financial cost is recognized as a financial lease liability.
Interest factor included in financial cost is reflected in the consolidated statements of comprehensive income to
achieve a constant rate of interest on the remaining balance of the liability.
All other leases are classified as operating leases and are not recognized as an asset in the consolidated
statements of financial position. Operating lease payments are recognized as expenses amortized over the lease
period using the straight-line method after deducting any incentives from the lessor.
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(17) Derivative instruments and hedging activities
Derivatives are initially recognized at fair value at the date the derivative contract is entered into, and they are
subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is
recognized in net income immediately unless the derivative is designated and effective as a hedging instrument.
The Group designates certain hedging instrument to:
– hedge of the exposure to changes in fair value of a recognized asset or liability or an unrecognized firm
commitment (fair value hedge);
– hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a
recognized asset or liability or a highly probable forecast transaction (cash flow hedge); and
– hedge of a net investment in a foreign operation.
At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument
and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge
transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether
the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item.
The fair value of derivatives that are designated and qualified as hedges is disclosed at Note 26.
a) Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognized
in net income immediately, together with any changes in the fair value of the hedged asset or liability that
are attributable to the hedged risk. Hedge accounting is discontinued when the Group revokes the hedging
relationship, when the hedging instrument no longer qualifies for hedge accounting and the fair value
adjustment to the carrying amount of the hedged item is amortized to net income from that date to maturity
using the effective interest method.
b) Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is
recognized immediately in net income. Amounts previously recognized in other comprehensive income and
accumulated in equity are reclassified to net income in the periods when the hedged item is recognized in
net income.
Hedge accounting is discontinued when the hedging instrument expires or is sold, or it no longer qualifies
for hedge accounting, and any gain or loss accumulated in equity at that time remains in equity and is
recognized when the forecast transaction is ultimately recognized in net income. When a forecasted
transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately
in net income.
c) Hedge of a net investment in foreign operations
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain
or loss on the hedging instrument relating to the effective portion of the hedge is recognized in equity while
the gain or loss relating to the ineffective portion is recognized immediately in net income. The cumulated
gain and loss in other comprehensive income is reclassified from equity to net income on the disposal or
partial disposal of the foreign operations.
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(18) Non-current assets (or disposal groups) held for sale
The Group classifies a non-current asset (or disposal group) as held for sale if its carrying amount will be
recovered principally through a sale transaction rather than through continuing use. The Group measures a non-
current asset (or disposal group) classified as held for sale at the lower of its carrying amount and fair value less
costs to sell.
(19) Compound financial instruments
When the Group is authorized to issue compound financial instruments, the main contract and the embedded
derivative financial instruments are recognized separately or the whole compound financial instruments is
designated at financial instruments at FVTPL.
An embedded derivative is separated from the host contract and accounted for as a derivative if, and only, if the
economic characteristics and risks of the embedded derivative are not closely related to those of the host contract
and a separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative and the hybrid (combined) instrument is not measured at fair value with changes in fair value
recognized in profit or loss.
After initial recognition, a host contract with debt securities is measured at amortized cost while an embedded
derivative is measured at fair value with changes in fair value recognized in profit or loss.
When the all of criteria to be classified in a financial asset or a financial liability which are explained above (6)-1)
and (6)-2) are met, the whole compound financial instrument is designated as at FVTPL. After initial recognition,
the whole compound financial instrument is measured at fair value with changes in fair value recognized in profit or loss.
(20) Provisions
The Group recognizes provisions if it has a present or contractual obligations as a result of a past event, it is
probable that an outflow of resources will be required to settle the obligation, and the amount of the obligation is
reliably estimated. Provisions are not recognized for future operating losses.
The Group recognizes provisions related to the unused portion of point rewards earned by credit card customers,
payment guarantees and litigations.
Where the Group is required to restore a leased property that is used as a branch, to an agreed condition after the
contractual term expires, the present value of expected amounts to be used to dispose, decommission or repair
the facilities is recognized as an asset retirement obligation.
Where there are a number of similar obligations, the probability that an outflow will be required in settlement is
determined by considering the obligations as a whole. Although the likelihood of outflow for any one item may
be small, if it is probable that some outflow of resources will be needed to settle the obligations as a whole, a
provision is recognized.
Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that
the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation.
The amount recognized as a provision is the present value of the best estimate of the consideration required to
settle the present obligation at the end of the reporting period. The discount rate used in calculating the present
value is the pre-tax discount rate taken into accounts the inherent risks and time value of the obligation, in the
market.
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(21) Equity capital
The Group recognizes common stock as equity and redeemable preferred stocks as a liability. Direct expenses
related to the issuance of new shares or options are recognized as a deduction from equity, net of any tax effects.
If the Group reacquires its own equity instruments, those instruments (―treasury shares‖) are presented as a
deduction from total equity. The gain or loss on the purchase, sale, issue, or cancellation of treasury shares is not
recognized in net income but recognized directly in equity.
(22) Financial guarantee contracts
A financial guarantee contract refers to the contract that requires the issuer to pay the specified amounts to
reimburse the holder for a loss because the specified debtor fails to make payment when due under original or
revised contractual terms of debt instruments. The financial guarantee contract is measured on initial recognition
at the fair value, and the fair value is amortized over the financial guarantee contractual term.
After initial recognition, financial guarantee contract is measured at the higher of:
– the present value of expected payment amount due to the financial guarantee contract; and
– initially recognized amount of financial guarantee contract less recognized accumulated amortization in
accordance with K-IFRS 1018 ‗Revenue.‘
(23) Interest income and expense recognition
The Group recognizes interest income and expenses from HTM financial assets measured at amortized cost,
loans and receivables, and other financial liabilities on an accrual basis using the effective interest method.
Effective interest method is the method of calculating the amortized cost of financial assets or liabilities and
allocating the interest income or expense over the relevant period. The effective interest rate reconciles the
expected future cash in and out through the expected life of financial instruments or shorter period if appropriate,
and net carrying value of financial assets or liabilities. When calculating the effective interest rate, the group
estimates future cash flows considering all contractual terms of the financial instruments such as prepayment
option, except the loss on future credit risk. Also, the effective interest rate calculation reflects commission,
points (only responsible for the effective interest rate) that are paid or earned between contracting parties,
transaction costs, and other premiums and discounts.
(24) Dividends
Dividends are recognized as liabilities when it is approved by the shareholder.
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(25) Employee benefits
1) Short-term employee benefits
The Group recognizes the undiscounted amount of short-term employee benefits expecting payment in
exchange for services when the employee renders the services. The Group, also, recognizes relevant
liabilities and expenses for the accumulating compensated absence when the services that increase the
future paid-leave right are rendered. Expenses and liabilities for the accumulated absence are also
recognized in consideration of constructive obligation when the Group pays a bonus.
2) Retirement benefits
The Group operates both defined benefit plan and defined contribution plan.
Contributions to defined contribution retirement benefit plans are recognized as an expense when
employees have rendered service entitling them to the contributions.
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the Projected
Unit Credit Method, with actuarial valuations being carried out at the end of each reporting period.
Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if
applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of
financial position with a charge or credit recognized in other comprehensive income in the period in which
they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained
earnings and will not be reclassified to profit or loss. Past service cost is recognized in profit or loss in the
period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the
period to the net defined benefit liability or asset. Defined benefit costs are composed of service cost
(including current service cost, past service cost, as well as gains and losses on curtailments and
settlements), net interest expense (income), and remeasurement.
The Group presents the service cost and net interest expense (income) components in profit or loss, and the
remeasurement component in other comprehensive income. Curtailment gains and losses are accounted for
as past service costs.
The retirement benefit obligation recognized in the consolidated statement of financial position represents
the actual deficit or surplus in the Group‘s defined benefit plans. Any surplus resulting from this calculation
is limited to the present value of any economic benefits available in the form of refunds from the plans or
reductions in future contributions to the plans. A liability for a termination benefit is recognized at the
earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity
recognizes any related restructuring costs.
3) Termination benefits
Termination benefits are paid when employment is involuntarily terminated by the Group before the normal
retirement date or an employee accepts voluntary retirement in exchange for benefits. The Group
recognizes termination benefits when employment is terminated based on detailed formal plans or
voluntary retirement is encouraged, providing termination benefits. Termination benefits are discounted at
present value when they are due more than 12 months after the reporting date.
4) Profit-sharing and bonus plan
The Group recognizes profit-sharing and bonus as provisions and expenses by considering profits related to
shareholders of the Group after adjusting a specific sum of amounts. The Group recognizes obligations
related to contracts and past practice as provisions.
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(26) Income tax expense
Income tax expense represents the sum of the tax currently payable and deferred tax. Income tax is recognized in
net income except to the extent that it relates to items recognized in other comprehensive income or directly in
equity. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax
effect is included in the accounting for the business combination.
Current tax expenses are calculated based on the basis of tax laws that have been enacted by the reporting date or
substantively enacted in the countries where the Group operates and generates taxable income.
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the
consolidated financial statements and the corresponding tax bases used in the computation of taxable profit.
However, the Group does not recognize deferred tax arising on the initial recognition of an asset or a liability in
a transaction that is not a business combination and that, at the time of the transaction, affects neither accounting
profit nor taxable profit. Deferred taxes are determined using tax rates and laws that have been enacted by the
reporting date —the date when the relevant deferred tax assets are realized and the deferred tax liabilities are
settled— or substantially enacted.
Deferred tax assets are recognized if future taxable profits are probable so that the temporary differences can be
used.
Deferred tax liabilities are provided on temporary differences arising on investments in subsidiaries and
associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it
is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred taxes assets and liabilities relate to income taxes levied by
the same taxation authority on either the taxable entity or different taxable entities where there is an intention
either to settle the balances on a net basis or to realize the asset and settle the liability simultaneously.
(27) Origination fees and costs
The commission, which is part of the effective interest rate of loans, is accounted for deferred origination fees.
Incremental cost related to the acquisition or disposal is accounted for deferred origination costs, and it is
amortized on the effective interest method and included in interest revenues on loans.
(28) Loan sales
When the Group disposes of loans based on valuations performed by a third party independent specialist
(institution) using a reasonable and rational method, the difference between the book value and the selling price
is recognized as gains and losses on disposal.
(29) Earnings per share (―EPS‖)
Basic earnings per share is calculated by dividing net income from the statement of comprehensive income by
the weighted average number of outstanding common shares, and diluted EPS is calculated by adjusted earnings
and number of shares for the effects of all dilutive potential common shares.
138
woori bank
- 1 -
2. SUMMARY OF SIGNIFICANT BASIS OF PREPARATION AND ACCOUNTING POLICIES
– PLEASE REFER TO THE FULL VERSION OF INDEPENDENT AUDITORS’ REPORT
3. SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS
– PLEASE REFER TO THE FULL VERSION OF INDEPENDENT AUDITORS’ REPORT
4.
RISK MANAGEMENT
- PLEASE REFER TO THE FULL VERSION OF INDEPENDENT AUDITORS’ REPORT
- 52 -
5. OPERATING SEGMENTS
The Group‘s reporting segments comprise the following customers: consumer banking, corporate banking,
investment banking, capital market, and headquarters and others. The reportable segments are classified based on
the target customers for whom the service is being provided:
Consumer banking
Corporate banking
Investment banking
Capital market
Headquarter and others
Details of products and services
Loans/deposits and financial services for consumer
Loans/deposits and export/import, financial services for corporations
Domestic/foreign investment, structured finance, M&A, Equity & fund
investment related business, venture advisory related tasks, real estate
SOC development practices, etc.
Fund management, investment securities and derivatives business
Sector does not correspond to the above operating segments.
Segment operating income, which differs from financial operating income, is evaluated by the Group in deciding
how to allocate resources and in assessing performance. Income tax of the Group is allocated to each segment
proportionally by ratio of income before tax of each segment because this is not directly attributable to the
operating segments.
The details of assets and liabilities by each segment are as follows (Unit: Korean Won in millions):
December 31, 2013
Consumer
banking
Corporate
banking
Assets
74,305,224 89,900,968
Liabilities 45,336,744 135,083,652
Consumer
banking
Corporate
banking
71,919,601 84,989,581
Assets
Liabilities 41,262,437 129,294,513
Capital
market
Investment
banking
7,038,975 10,778,521 71,605,985 253,629,673 (3,644,902) 249,984,771
1,276,016 231,634,440
105,146 10,006,252 39,826,630 230,358,424
Headquarters
and others
Sub-total
Total
Inter-
segment
transactions
December 31, 2012
Capital
market
Investment
banking
8,016,568 20,548,977 66,505,665 251,980,392 (3,433,749) 248,546,643
229,951,702
111,792 18,346,591 39,778,177 228,793,510
Headquarters
and others
Sub-total
1,158,192
Total
Inter-
segment
transactions
139
2013 ANNUAL REPORT
- 53 -
The details of operating income by each segment are as follows (Unit: Korean Won in millions):
Net interest income
Interest income
Interest expense
Inter-segment
Non-interest income
Non-interest income
Non-interest expense
Inter-segment
Other expenses
Administrative
expenses
Impairment losses on
credit loss and others
Operating income (loss)
Non-operating income
(loss)
Net income before
income tax expense
Income tax expense
Profit from continuing
operations
Profit from discontinued
operations
Net income
Net interest income
Interest income
Interest expense
Inter-segment
Non-interest income
Non-interest income
Non-interest expense
Inter-segment
Other expenses
Administrative
expenses
Impairment losses on
credit loss and others
Operating income (loss)
Non-operating income
(loss)
Net income before
income tax expense
Income tax expense
Net income
Consumer
banking
Corporate
banking
Investment
banking
Capital
market
Headquarters
and others
Sub-total
Inter-segment
transaction
Total
For the year ended December 31, 2013
3,233,552
(1,653,013)
(75,167)
1,505,372
3,832,239
(2,282,674)
397,485
1,947,050
256,860
(717)
(236,489)
19,654
82,649
(29,121)
6,618
60,146
1,636,867
(1,030,149)
(92,447)
514,271
9,042,167
(4,995,674)
-
4,046,493
88,166
285,218
-
373,384
9,130,333
(4,710,456)
-
4,419,877
645,404
(244,085)
14,346
415,665
518,355
(100,033)
25,445
443,767
401,904
(334,021)
-
67,883
4,849,598
(4,856,921)
-
(7,323)
2,564,816
(2,340,018)
(39,791)
185,007
8,980,077
(7,875,078)
-
1,104,999
148,916
(498,961)
-
(350,045)
9,128,993
(8,374,039)
-
754,954
(1,643,064)
(831,660)
(17,458)
(21,744)
(184,046)
(2,697,972)
18,946
(2,679,026)
(118,827)
(1,761,891)
(1,582,714)
(2,414,374)
(138,548)
(156,006)
(17,812)
(39,556)
(109,315)
(293,361)
(1,967,216)
(4,665,188)
(64,157)
(45,211)
(2,031,373)
(4,710,399)
159,146
(23,557)
(68,469)
13,267
405,917
486,304
(21,872)
464,432
(14,340)
(10,787)
38,464
34,367
817,752
865,456
(812,060)
53,396
144,806
(35,043)
(34,344)
8,311
(30,005)
7,261
47,634
(11,527)
1,223,669
(296,128)
1,351,760
(327,126)
(833,932)
246,096
517,828
(81,030)
109,763
(26,033)
(22,744)
36,107
927,541
1,024,634
(587,836)
436,798
-
109,763
-
(26,033)
-
(22,744)
-
36,107
29,476
957,017
29,476
1,054,110
-
(587,836)
29,476
466,274
Consumer
banking
Corporate
banking
Investment
banking
Capital
market
Headquarters
and others
Sub-total
Inter-segment
transaction
Total
For the year ended December 31, 2012
4,090,920
(1,855,733)
(134,749)
2,100,438
4,688,083
(2,820,879)
534,033
2,401,237
337,363
(72)
(331,460)
5,831
288,608
(167,983)
(32,769)
87,856
1,803,651
(1,270,969)
(35,055)
497,627
11,208,625
(6,115,636)
-
5,092,989
279,268
262,208
-
541,476
11,487,893
(5,853,428)
-
5,634,465
687,246
(472,581)
13,573
228,238
972,849
(525,046)
20,515
468,318
340,024
(250,453)
-
89,571
5,759,911
(5,777,549)
-
(17,638)
2,264,746
(1,788,927)
(34,088)
441,731
10,024,776
(8,814,556)
-
1,210,220
(123,967)
(464,706)
-
(588,673)
9,900,809
(9,279,262)
-
621,547
(1,673,720)
(811,068)
(18,278)
(23,521)
(140,655)
(2,667,242)
4,017
(2,663,225)
(118,449)
(1,792,169)
(1,484,228)
(2,295,296)
(77,748)
(96,026)
(64,678)
(88,199)
(174,145)
(314,800)
(1,919,248)
(4,586,490)
90,541
94,558
(1,828,707)
(4,491,932)
536,507
574,259
(624)
(17,981)
624,558
1,716,719
47,361
1,764,080
(18,788)
(2,849)
24,355
-
55,537
58,255
16,086
74,341
517,719
(125,288)
392,431
571,410
(138,281)
433,129
23,731
(5,743)
17,988
(17,981)
4,352
(13,629)
680,095
(164,583)
515,512
1,774,974
(429,543)
1,345,431
63,447
88,039
151,486
1,838,421
(341,504)
1,496,917
140
woori bank
- 54 -
Information on financial products and services
The financial products of the Group are classified as interest, non-interest and other goods; however, since this
classification has already been reflected in the component of the operating segments above. Therefore, revenue
from external customers is not separately disclosed.
Information on geographical areas
Details of the geographical revenue from external customers and non-current assets are as follows (Unit: Korean
Won in millions);
Revenue from external customers(cid:1659)
For the ended December 31, 2012
2013
17,395,174
864,152
18,259,326
2012 (*)
20,834,791
553,911
21,388,702
Non-current assets
December 31,
2013
3,297,041
28,210
3,325,251
December 31,
2012
3,359,216
31,898
3,391,114
Domestic
Overseas
(*) Revenue classified as profit from discontinued operations are included.
Revenue from external customers consists of interest income and non-interest income. Non-current assets consist
of investments in associates, investment properties, premises and equipment, and intangible assets.
6. CASH AND CASH EQUIVALENTS
(1) Details of cash and cash equivalents are as follows (Unit: Korean Won in millions):
Cash and checks
Foreign currencies
Demand deposits
Fixed deposits
December 31, 2013
2,227,816
511,487
2,068,864
664,258
5,472,425
December 31, 2012
2,551,530
522,257
1,079,105
440,844
4,593,736
(2) Material transactions not involving cash inflows and outflows are as follows (Unit: Korean Won in
millions):
Changes in other comprehensive income (loss) due to
valuation of AFS financial assets
Changes in other comprehensive income of
investment in associates
Changes in other comprehensive income of
overseas business translation
Changes in other comprehensive income (loss) due to
re-measurement
Changes due to the credit card division spin-off
Changes in investments in associates due to equity swap
Changes in accrued dividends of hybrid equity securities
2013
2012
(5,370)
(334,889)
1,055
1,210
(52,299)
(74,110)
6,657
674,825
54,534
5,050
(48,826)
-
75,290
(9,176)
141
2013 ANNUAL REPORT
- 55 -
7.
FINANCIAL ASSETS AT FVTPL
(1) Details of financial assets at trading securities are as follows (Unit: Korean Won in millions):
December 31, 2013
December 31, 2012
Securities in local currency:
Korean treasury and government agencies
Financial institutions
Corporates
Equity securities
Beneficiary certificates
CP
Loaned securities
Derivatives instruments assets:
Interest rate derivatives
Currency derivatives
Equity derivatives
Other derivatives
Other financial assets (CMA CP)
Gold banking assets
574,016
1,019,007
378,718
194,151
12,500
-
33,084
2,211,476
1,007,819
1,112,025
54,749
2,764
2,177,357
-
9,299
4,398,132
593,244
2,117,764
438,670
287,297
64,230
2,876,291
26,165
6,403,661
1,573,332
1,297,208
57,918
5,028
2,933,486
1,646,507
5,582
10,989,236
(2) Structured notes of financial assets at FVTPL are as follows (Unit: Korean Won in millions):
Structured notes relating to
credit risk:
Synthetic CDO
Structured notes relating to
credit risk:
Synthetic CDO
Face value
Carrying value
Potential Risk
December 31, 2013
-
- Credit risk of underlying assets
Face value
Carrying value
Potential Risk
December 31, 2012
32,133
- Credit risk of underlying assets
142
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- 56 -
8. AFS FINANCIAL ASSETS
(1) Details of AFS financial assets are as follows (Unit: Korean Won in millions):
December 31, 2013
December 31, 2012
AFS financial assets in local currency:
Debt securities:
Korean treasury and government agencies
Financial institutions
Corporates
Others
Equity securities:
Listed stock
Unlisted stock
Capital contributions
Beneficiary certificates
Other securities
AFS financial assets in foreign currencies:
Debt securities
Equity securities
2,640,757
6,512,037
2,701,669
316
11,854,779
478,198
701,094
255,215
3,043,186
4,477,693
5,083
16,337,555
228,529
91,613
320,142
2,365,203
5,503,457
2,330,567
316
10,199,543
444,653
759,145
238,055
2,455,482
3,897,335
-
14,096,878
262,302
108,954
371,256
Loaned securities
240,034
16,897,731
20,413
14,488,547
143
2013 ANNUAL REPORT
- 57 -
(2) Details of unrealized gains or losses on AFS financial assets are as follows (Unit: Korean Won in millions):
AFS financial assets in local currency:
Debt securities:
Korean treasury and government
agencies
Financial institutions
Corporates
Others
Sub-total
Equity securities:
Listed stock
Unlisted stock
Capital contributions
Beneficiary certificates
Sub-total
Other securities
Sub-total
AFS financial assets in foreign currencies:
Debt securities
Equity securities
Sub-total
Loaned securities
Total
AFS financial assets in local currency:
Debt securities:
Korean treasury and government
agencies
Financial institutions
Corporates
Others
Sub-total
Equity securities:
Listed stock
Unlisted stock
Capital contributions
Beneficiary certificates
Sub-total
Sub-total
AFS financial assets in foreign currencies:
Debt securities
Equity securities
Sub-total
Loaned securities
Total
Amortized
cost
Gross
unrealized gains
Gross
unrealized losses
Fair
value
December 31, 2013
2,649,705
6,508,988
2,713,063
316
11,872,072
418,904
568,982
257,470
2,986,333
4,231,689
4,985
16,108,746
229,158
72,423
301,581
239,899
16,650,226
6,158
4,345
18,703
-
29,206
64,440
136,809
13,572
59,192
274,013
98
303,317
124
27,231
27,355
313
330,985
(15,106)
(1,296)
(30,097)
-
(46,499)
(5,146)
(4,697)
(15,827)
(2,339)
(28,009)
-
(74,508)
(753)
(8,041)
(8,794)
2,640,757
6,512,037
2,701,669
316
11,854,779
478,198
701,094
255,215
3,043,186
4,477,693
5,083
16,337,555
228,529
91,613
320,142
(178)
(83,480)
240,034
16,897,731
Amortized
cost
Gross
unrealized gains
Gross
unrealized losses
Fair
value
December 31, 2012
2,345,127
5,488,669
2,315,031
316
10,149,143
412,834
584,008
255,448
2,445,523
3,697,813
13,846,956
262,257
85,308
347,565
19,930
14,214,451
21,543
16,146
30,286
-
67,975
32,255
184,430
2,416
15,470
234,571
302,546
260
30,725
30,985
483
334,014
(1,467)
(1,358)
(14,750)
-
(17,575)
(436)
(9,293)
(19,809)
(5,511)
(35,049)
(52,624)
(215)
(7,079)
(7,294)
2,365,203
5,503,457
2,330,567
316
10,199,543
444,653
759,145
238,055
2,455,482
3,897,335
14,096,878
262,302
108,954
371,256
-
(59,918)
20,413
14,488,547
144
woori bank
- 58 -
(3) Structured notes of AFS financial assets are as follows (Unit: Korean Won in millions):
Structured notes relating to credit risk:
Cash CDO
Synthetic CDO
Structured notes relating to credit risk:
Cash CDO
Synthetic CDO
Face value
Carrying value
Potential Risk
December 31, 2013
138,045
-
138,045
- Credit risk of underlying assets
- Credit risk of underlying assets
-
Face value
Carrying value
Potential Risk
December 31, 2012
140,112
21,422
161,534
- Credit risk of underlying assets
- Credit risk of underlying assets
-
9. HTM FINANCIAL ASSETS
(1) Details of HTM financial assets are as follows (Unit: Korean Won in millions):
In local currency:
Korean treasury and government agencies
Financial institutions
Corporates
In foreign currencies:
Debt securities
December 31, 2013
December 31, 2012
4,728,909
2,155,965
5,131,162
12,016,036
5,527,699
3,242,394
5,534,920
14,305,013
22,784
12,038,820
36,493
14,341,506
(2) Details of unrealized gains or losses on HTM financial assets are as follows (Unit: Korean Won in millions):
In local currency:
Korean treasury and
government agencies
Financial institutions
Corporates
Sub-total
In foreign currencies:
Debt securities
Total
In local currency:
Korean treasury and
government agencies
Financial institutions
Corporates
Sub-total
In foreign currencies:
Debt securities
Total
Amortized
cost
Gross
unrealized gains
Gross
unrealized losses
Fair
value
December 31, 2013
4,728,909
2,155,965
5,131,162
12,016,036
22,784
12,038,820
58,237
8,012
65,107
131,356
-
131,356
(16,900)
(593)
(6,361)
(23,854)
4,770,246
2,163,384
5,189,908
12,123,538
-
(23,854)
22,784
12,146,322
Amortized
cost
Gross
unrealized gains
Gross
unrealized losses
Fair
value
December 31, 2012
5,527,699
3,242,394
5,534,920
14,305,013
36,493
14,341,506
99,011
14,190
96,855
210,056
-
210,056
(5,691)
(300)
(3,139)
(9,130)
5,621,019
3,256,284
5,628,636
14,505,939
-
(9,130)
36,493
14,542,432
145
2013 ANNUAL REPORT
- 59 -
10. LOANS AND RECEIVABLES
(1) Details of loans and receivables are as follows (Unit: Korean Won in millions):
Due from banks
Loans
Other loan and receivables
December 31, 2013
10,187,337
186,478,454
10,694,889
207,360,680
December 31, 2012
10,084,461
175,984,800
14,139,064
200,208,325
(2) Details of due from banks are as follows (Unit: Korean Won in millions):
December 31, 2013
December 31, 2012
Due from banks in local currency:
Due from the BOK
Due from depository institutions
Due from non-depository financial
institutions
Due from the Korea Exchange
Others
Provisions for credit losses
Due from banks in foreign currencies:
Due from banks on demand
Due from banks on time
Others
Provisions for credit losses
8,304,869
13
16,751
880
7,945
(1,978)
8,328,480
920,713
439,595
500,566
(2,017)
1,858,857
10,187,337
8,624,062
4,388
21,426
167
8,355
(1,943)
8,656,455
610,699
408,417
410,571
(1,681)
1,428,006
10,084,461
(3) Details of restricted due from banks are as follows (Unit: Korean Won in millions):
Financial institution
Due from banks in local currency:
BOK
Korea Exchange
Korea Exchange Bank and others
Due from banks in foreign currencies:
BOK
Bank of Japan and others
Central bank of Japan and others
Central bank of China and others
Korea Investment & Securities
Co., Ltd. and others
December 31,
2013
December 31,
2012
Reason of restriction
8,304,869
250
7,708
8,312,827
701,238
158,058
395,573
60,042
2,925
1,317,836
9,630,663
8,624,062 Reserve deposits on BOK Act and others
250 Joint compensation fund for loss incurred
8,118 Litigation reserves and others
8,632,430
458,990 Reserve deposits on BOK Act and others
44,442 Reserve deposits in foreign branches and others
360,800 Reserve deposits in foreign subsidiary and others
62,762 Installation deposits of financial institution and
others
- Collateral for overseas future trading
926,994
9,559,424
146
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- 60 -
(4) Details of loans are as follows (Unit: Korean Won in millions):
Loans in local currency
Loans in foreign currencies
Domestic banker’s usance
Credit card accounts
Bills bought in foreign currencies
Bills bought in local currency
Factoring receivables
Advances for customers
Privately placed bonds
Loans for debt- equity swap
Backed loans
Call loans
Bonds purchased under repurchase agreements
Other loans
Deferred loan origination fees and costs
Present value discount
Fair value hedging adjustment
Provisions for credit losses
December 31, 2013
155,917,926
9,995,683
4,958,522
5,122
4,234,937
90,859
175,447
54,645
497,196
498
310,748
8,090,655
4,980,889
50,728
294,955
(21,496)
142
(3,159,002)
186,478,454
December 31, 2012
144,616,560
9,505,325
4,892,884
4,117,401
4,128,832
551,901
156,246
125,841
788,503
498
369,606
5,215,330
4,230,934
42,147
229,311
(20,772)
248
(2,965,995)
175,984,800
(5) Details of other loans and receivables are as follows (Unit: Korean Won in millions):
Accounts receivables
Accrued income
Guarantee deposits
Other assets (*)
Present value discount of other assets
Provisions for credit losses
December 31, 2013
8,265,877
880,452
1,022,932
918,097
(49,471)
(342,998)
10,694,889
December 31, 2012
11,432,805
970,842
1,003,640
1,071,728
(53,231)
(286,720)
14,139,064
(*) As of December 31, 2013, other assets include (cid:2936) 237,229 million of receivable from other financial
institutions, conforming to the agreement of financial institution council. On the other hand, as of
December 31, 2013, (cid:2936) 7,030 million to be paid by is accounted for as other financial liabilities and
other operating income and other operating expenses were recorded respectively for the related amounts
(Notes 25 and 40).
147
2013 ANNUAL REPORT
- 61 -
(6) Changes in the provisions for credit losses on loans and receivables are as follows (Unit: Korean Won in
millions):
Beginning balance
Provisions for credit losses
Recoveries of written-off loans
Charge-off
Sales of loans and receivables
Unwinding effect
Others
Credit card division spin-off
Ending balance
Beginning balance
Provisions for credit losses
Recoveries of written-off loans
Charge-off
Sales of loans and receivables
Unwinding effect
Others
Ending balance
Consumers
(258,884)
(161,475)
(28,132)
124,192
4,058
20,251
10
-
(299,980)
Consumers
(191,447)
(171,031)
(40,997)
122,316
8,522
13,725
28
(258,884)
For the year ended December 31, 2013
Others
Credit cards
(308,134)
(118,173)
(22,747)
(49,829)
(6,134)
39,346
-
114
249
107,332
(13)
Corporates
(2,571,148)
(1,786,956)
(155,405)
1,378,521
124,315
115,256
50,098
-
(2,845,319)
-
445
147
293
(3,882)
277
(360,683)
For the year ended December 31, 2012
Others
Credit cards
(383,436)
(119,484)
(22,238)
(143,965)
(32)
(31,498)
843
175,984
963
-
311
296
95,470
479
(308,134)
(118,173)
Corporates
(2,657,257)
(1,462,452)
(145,140)
1,514,708
120,764
71,754
(13,525)
(2,571,148)
Total
(3,256,339)
(2,021,007)
(189,671)
1,542,504
128,520
135,914
46,475
107,609
(3,505,995)
Total
(3,351,624)
(1,799,686)
(217,667)
1,813,851
130,249
86,086
82,452
(3,256,339)
(7) Changes in deferred loan origination fees and costs are as follows (Unit: Korean Won in millions):
Deferred loan origination fees
Deferred loan origination costs
Deferred loan origination fees
Deferred loan origination costs
Balance at
January 1, 2013
(36,220)
265,531
229,311
Balance at
January 1, 2012
(48,563)
202,694
154,131
For the year ended December 31, 2013
Increase
Decrease
(10,375)
199,563
189,188
20,511
(144,055)
(123,544)
Balance at
December 31, 2013
(26,084)
321,039
294,955
For the year ended December 31, 2012
Increase
Decrease
(22,396)
181,999
159,603
34,739
(119,162)
(84,423)
Balance at
December 31, 2012
(36,220)
265,531
229,311
148
woori bank
- 62 -
11. THE FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The Group classified and discloses fair value of the financial instruments into the following three-level hierarchy:
(cid:31)
(cid:31)
(cid:31)
Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets
for identical assets or liabilities.
Level 2: fair value measurements are those derived from inputs that are observable for the asset or
liability, either directly (i.e. prices) or indirectly (i.e. derived from prices). Other than quoted prices
included within Level 1
Level 3: fair value measurements are those derived from valuation technique that include inputs for the
asset or liability that are not based on observable market data (unobservable inputs).
(1) Fair value hierarchy of financial assets and liabilities measured at current fair value is as follows (Korean
Won in millions):
Level 1 (*2)
Level 2 (*2)
Level 3
Total
December 31, 2013
Financial assets:
Financial assets at FVTPL:
Financial assets held for trading:
Securities in local currency:
Korean treasury and government agencies
Financial institutions
Corporates
Equity securities
Beneficiary certificate
Loaned securities
Derivatives instruments assets (*1):
Interest rate derivatives
Currency derivatives
Equity derivatives
Other derivatives
Gold banking assets
AFS financial assets:
AFS financial assets in local currency:
Debt securities:
Korean treasury and government agencies
Financial institutions
Corporates
Others
Equity securities:
Listed stock
Unlisted stock
Capital contributions
Beneficiary certificates
Other securities
AFS financial assets in foreign currencies:
Debt securities
Equity securities
Loaned securities
518,848
-
-
194,151
-
33,084
746,083
-
-
4
-
4
9,299
755,386
2,535,915
-
-
-
2,535,915
469,468
-
-
-
469,468
-
3,005,383
55,168
1,019,007
378,718
-
12,500
-
1,465,393
1,110,961
1,102,538
2,081
2,764
2,218,344
-
3,683,737
104,842
6,512,037
2,701,669
316
9,318,864
-
-
-
2,692,904
2,692,904
-
12,011,768
-
-
-
-
-
-
-
28,244
9,487
52,688
-
90,419
-
90,419
-
-
-
-
-
8,730
701,094
255,215
350,282
1,315,321
5,083
1,320,404
574,016
1,019,007
378,718
194,151
12,500
33,084
2,211,476
1,139,205
1,112,025
54,773
2,764
2,308,767
9,299
4,529,542
2,640,757
6,512,037
2,701,669
316
11,854,779
478,198
701,094
255,215
3,043,186
4,477,693
5,083
16,337,555
21,467
433
21,900
207,062
-
207,062
-
91,180
91,180
228,529
91,613
320,142
240,034
3,267,317
-
12,218,830
-
1,411,584
240,034
16,897,731
149
2013 ANNUAL REPORT
Financial liabilities:
Financial liabilities at FVTPL:
Financial liabilities at trading securities:
Gold banking liabilities
Derivatives instruments liabilities (*1):
Interest rate derivatives
Currency derivatives
Equity derivatives
Other derivatives
Financial liability designated at FVTPL:
Compound financial instrument
Debentures in local currency
Debentures in foreign currencies
- 63 -
Level 1 (*2)
Level 2 (*2)
Level 3
Total
December 31, 2013
9,254
-
-
-
460
-
460
9,714
-
-
-
-
9,714
-
-
1,026,495
1,032,206
17,264
2,912
2,078,877
2,078,877
6,097
125,529
57,630
189,256
2,268,133
-
-
10,098
-
11,221
-
21,319
21,319
336,312
-
-
336,312
357,631
9,254
-
1,036,593
1,032,206
28,945
2,912
2,100,656
2,109,910
342,409
125,529
57,630
525,568
2,635,478
(*1) Derivatives classified as financial assets and liabilities at FVTPL are included in derivative assets and
liabilities.
(*2) There have been no transfers between Level 1 and Level 2 financial assets and liabilities measured at
fair value for the years ended December 31, 2013 and 2012. The Group recognizes transfers between
levels at the end of reporting period when events or conditions change.
Level 1 (*2)
Level 2 (*2)
Level 3
Total
December 31, 2012
Financial assets:
Financial assets at FVTPL:
Financial assets held for trading:
Securities in local currency:
Korean treasury and government agencies
Financial institutions
Corporates
Equity securities
Beneficiary certificate
CP
Loaned securities
Derivatives instruments assets (*1):
Interest rate derivatives
Currency derivatives
Equity derivatives
Commodity derivatives
Other financial assets (CMA CP)
Gold banking assets
AFS financial assets:
AFS financial assets in local currency:
Debt securities:
Korean treasury and government agencies
Financial institutions
Corporates
Others
Equity securities:
Listed stock
Unlisted stock
Capital contributions
Beneficiary certificates
592,907
-
-
287,297
-
-
26,165
906,369
-
-
319
-
319
-
5,582
912,270
2,361,133
-
-
-
2,361,133
347,648
-
-
-
347,648
2,708,781
337
2,117,764
438,670
-
64,230
2,876,291
-
5,497,292
1,840,802
1,299,152
8,393
5,028
3,153,375
1,646,507
-
10,297,174
4,070
5,503,457
2,330,567
316
7,838,410
-
-
-
2,295,203
2,295,203
10,133,613
-
-
-
-
-
-
-
-
-
-
49,206
-
49,206
-
-
49,206
-
-
-
-
-
97,005
759,145
238,055
160,279
1,254,484
1,254,484
593,244
2,117,764
438,670
287,297
64,230
2,876,291
26,165
6,403,661
1,840,802
1,299,152
57,918
5,028
3,202,900
1,646,507
5,582
11,258,650
2,365,203
5,503,457
2,330,567
316
10,199,543
444,653
759,145
238,055
2,455,482
3,897,335
14,096,878
150
woori bank
AFS financial assets in foreign currencies:
Debt securities
Equity securities
Loaned securities
Financial liabilities:
Financial liabilities at FVTPL:
Financial liabilities at trading securities:
Gold banking liabilities
Derivatives instruments liabilities (*1):
Interest rate derivatives
Currency derivatives
Equity derivatives
Other derivatives
Financial liability designated at FVTPL:
Compound financial instrument
Debentures in local currency
Debentures in foreign currencies
- 64 -
Level 1 (*2)
Level 2 (*2)
Level 3
Total
December 31, 2012
19,143
1,541
20,684
243,159
-
243,159
-
107,413
107,413
262,302
108,954
371,256
20,413
2,749,878
-
10,376,772
-
1,361,897
20,413
14,488,547
5,582
-
-
-
-
-
-
5,582
-
-
-
-
5,582
-
-
1,626,852
1,167,901
35,905
5,323
2,835,981
2,835,981
-
227,920
87,534
315,454
3,151,435
-
-
58
-
6,443
-
6,501
6,501
329,005
-
-
329,005
335,506
5,582
-
1,626,910
1,167,901
42,348
5,323
2,842,482
2,848,064
329,005
227,920
87,534
644,459
3,492,523
(*1) Derivatives classified as financial assets and liabilities at FVTPL are included in derivative assets and
liabilities.
(*2) There have been no transfers between Level 1 and Level 2 financial assets and liabilities measured at
fair value for the years ended December 31, 2013 and 2012. The Group recognizes transfers between
levels at the end of reporting period when events or conditions change.
The amounts of equity securities carried at cost which do not have a quoted market price in an active
market and cannot be measured reliably at fair value are (cid:2936) 23,676 million and (cid:2936)36,864 million as of
December 31, 2013 and December 31, 2012, respectively. These securities are not actively traded or quoted
equity instruments which were invested to special purposed entity such as asset securitization specialty and
are classified into level 3 of unlisted stock and capital contributions. They are carried at cost because it is
practically difficult to get financial information for valuation and expected cash flows of the unlisted equity
securities cannot be measured reliably. The Group has no plan to sell these financial instruments in the near
future.
Financial assets’ carrying amount and related gains on disposal of financial assets carried at cost which do
not have a quoted market price in an active market and cannot be measured reliably at fair value are follows
(Unit: Korean Won in millions):
(cid:71)
Carrying amount
Gain on transaction
For the year ended December 31
2013
2012
1,195
1,943
11,752
5,384
Financial assets and liabilities at FVTPL, AFS financial assets, held-for-trading financial assets and
liabilities and derivative assets and liabilities are recognized at fair value. Fair value is the amount that
would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market
participants at the measurement date.
Financial instruments are measured at fair value using a quoted market price in active markets. If there is
no active market for a financial instrument, the Group establishes the fair value using valuation techniques.
Fair value measurement methods for each type of financial instruments are as follows:
151
2013 ANNUAL REPORT
- 65 -
Debt securities
Equity securities
Derivatives
Compound financial
instruments
Debentures
Fair value measurement technique
The fair value is measured by discounting the projected cash
flows of debt securities by applying the market discount rate
that has been applied to a proxy company that has similar credit
rating to the issuers of the securities
Among DCF (Discounted Cash Flow) Model, FCFE (Free Cash
Flow to Equity) Model, Comparable Company Analysis,
Dividend Discount Model, Risk-adjusted Rate of Return
Method, and Net Asset Value Method, one or two methods are
used given the characteristic of the subject of fair value
measurement.
The in-house developed model which is based on the models that
are used by market participants in the valuation of general OTC
derivative products, such as options, interest rate swaps, and
currency swap that are based on inputs observable in the
market.
However, for some complicated financial instruments of which
valuation should be based on some assumptions since some
significant or all inputs to be used in the model are not
observable in the market, the in-house derived model which is
developed from the general valuation models, such as Finite
Difference Method (“FDM”) or Monte Carlo Simulation.
Compound financial instrument are mostly equity linked
securities. The fair value of the securities are measured by
discounting the weighted average cash flow of future
underlying stock price scenarios generated by Monte-Carlo
simulation by a proper discount rate. To generate the scenarios,
estimation of an expected rate of return of the underlying stock,
a variability of the stock price, and a correlation among the
stocks when the numbers of underlying stocks are more than 2
is needed. The variability of the stock price and the correlation
among the stocks are estimated based on historical stock prices.
The fair value is measured by discounting the projected cash
flows of a debenture by applying the market discount rate that
is reflecting credit rating of the Group.
Input variables
Risk free market
rate of return and
credit spread
Risk free market
rate of return,
market risk
premium,
corporate beta
Risk-free market
rate, forward rate,
volatility, foreign
exchange rate,
stock prices, etc.
Volatility of stock
price and
correlation
Risk free market
rate of return and
forward rate
Measurement techniques of the financial assets and financial liabilities of level 3 that are recorded at fair
value and significant, unobservable inputs are as follows:(cid:71)
Derivative assets
Derivative liabilities
Compound financial
instrument
Equity security
Fair value in
December 31, 2013
Fair value
measurement technique
90,419 Option valuation model
and others
21,319 Option valuation model
and others
336,312 Monte Carlo
Simulation
External appraised
value and others
1,411,584
Significant unobservable
Input variable
Correlation
Historical variability
Credit risk adjustment ratio
Correlation
Historical variability
Correlation
Historical variability
Expected growth rate
Range
-1~1
0%~70%
0%~100%
-1~1
0%~70%
-1~1
0%~70%
0%~1%
Fair value of financial assets and liabilities classified into Level 3 uses external evaluation or value that is
independently appraised by the Group. Non-observable inputs used in measuring fair value are calculated
from the internal system and adequacy of those inputs is reviewed at all times. Investment Valuation
Committee is responsible for reviewing of external assessments, deciding of valuation methods and review
of appropriateness of methodology. And the agenda of Investment Valuation Committee is reported to and
approved by Risk Management Committee. Valuation methods are verified annually by focusing on large
amount.
152
woori bank
- 66 -
(2) Changes in financial assets and liabilities classified into level 3 are as follows (Unit: Korean Won in
millions):
Transfer into/out of level 3 for the year ended December 31, 2013
Net
Income
(loss)
Other
comprehensive
income (loss)
Transfer to or
from
level 3 (*6)
Disposals/
Settlements
Purchases/
Issuances
December
31, 2013
January 1,
2013
Financial assets:
Financial assets at FVTPL:
Financial assets held for
trading:
Derivative assets:
Interest rate derivatives (*1)
Currency derivatives (*2)
Equity derivatives
AFS financial assets:
Listed stock in local currency
(*3)
Unlisted stock in local
currency(*4)
Capital contributions in local
currency
Beneficiary certificates in
local currency (*4)
Others in local currency
Equity securities in foreign
currencies
Financial liabilities:
Financial liabilities at FVTPL:
Derivative liabilities:
Interest rate derivatives (*1)
Currency derivatives (*5)
Equity derivatives (*1)
Financial liabilities at FVTPL
Compound financial
instruments
-
-
49,206
49,206
3,379
-
(9,759)
(6,380)
-
-
-
-
(550)
-
13,241
12,691
188
-
-
188
25,227
9,487
-
34,714
28,244
9,487
52,688
90,419
97,005
(34,654)
9,721
22,668
(19,173)
(66,873)
8,730
759,145
(49,757)
(23,483)
97,628
(82,214)
(225)
701,094
238,055
8,077
14,820
48,330
(54,067)
-
255,215
160,279
1,254,484
(3,674)
(80,008)
-
1,254,484
-
(80,008)
6,113
7,171
418
7,589
58,862
227,488
(4,405)
(159,859)
133,107
66,045
350,282
1,315,321
4,665
232,153
-
(159,859)
-
66,045
5,083
1,320,404
107,413
1,361,897
3,082
(76,926)
(4,275)
3,314
3,517
235,670
(18,557)
(178,416)
-
66,045
91,180
1,411,584
58
-
6,443
6,501
5,558
604
3,076
9,238
329,005
335,506
7,998
17,236
-
-
-
-
-
-
860
-
-
860
(1,031)
-
-
(1,031)
4,653
(604)
1,702
5,751
10,098
-
11,221
21,319
256,120
256,980
(256,811)
(257,842)
-
5,751
336,312
357,631
(*1) The derivative assets and liabilities were transferred into level 3 from level 2 upon the changes of fair
value measurement method of the assets and liabilities by using the valuation techniques that include
unobservable inputs from previously using valuation techniques that include inputs other than quoted
prices included within Level 1 that are observable for the asset or liability.
(*2) The derivative assets were transferred into level 3 from level 2 upon the changes of fair value
measurement method of the assets by using the valuation techniques that include significant unobservable
inputs.
(*3) The AFS assets were transferred out of level 3 upon the change of the fair value measurement method of
the assets by using quoted prices in the active market from previously using the external valuation
specialists.
(*4) AFS financial assets were transferred into or out of level 3 upon the changes in the degree of subjectivity
and uncertainty used to measure fair values for the AFS financial assets.
153
2013 ANNUAL REPORT
- 67 -
(*5) The derivative liabilities were transferred into level 2 from level 3 upon the change of the fair value
measurement of the liabilities by using the valuation techniques that include inputs other than quoted
prices included within Level 1 that are observable for the asset or liability from previously the valuation
techniques based on unobservable inputs.
(*6) The Group recognizes transfers between levels at the end of reporting period within which events or
conditions change.
Out of the amounts recognized in net income for the year ended December 31, 2013, amounts related to assets
and liabilities that the Group currently holds are recognized as net losses of (cid:2936) 101,827 million, which are
included in gain or loss on financial instruments at FVTPL and gain or loss on AFS financial assets in the
statements of comprehensive income.
Transfer into/out of level 3 for the year ended December 31, 2012
Transfer to
or from
level 3
Other
comprehensive
income (loss)
Disposals/
Settlements
Purchases/
Issuances
Net
income
December
31, 2012
January 1,
2012
Financial assets:
Financial assets at FVTPL:
Financial assets held for trading:
Derivative assets:
Equity derivatives
AFS financial assets:
Listed stock in local currency (*1)
Unlisted stock in local currency
Capital contributions in local
currency
Beneficiary certificates in local
currency (*2)
Equity securities in foreign
currencies
Financial liabilities:
Financial liabilities at FVTPL:
Derivative liabilities:
Interest rate derivatives
Equity derivatives
Financial liabilities at FVTPL
Compound financial instrument
31,191
18,015
-
-
-
-
49,206
477,635
747,675
367,269
(138)
(370,282)
24,539
87,924
29,208
(466,199)
(42,139)
658
-
97,005
759,145
252,002
(2,323)
(16,720)
31,484
(26,388)
-
238,055
225,536
1,702,848
74,767
439,575
(37,287)
(399,750)
14,137
162,753
(121,592)
(656,318)
4,718
5,376
160,279
1,254,484
136,067
1,838,915
(6,771)
432,804
(4,167)
(403,917)
5,224
167,977
(22,940)
(679,258)
-
5,376
107,413
1,361,897
43
10,158
10,201
232
(2,813)
(2,581)
273,449
283,650
29,138
26,557
-
-
-
-
-
-
195
195
(217)
(1,097)
(1,314)
84,353
84,548
(57,935)
(59,249)
-
-
-
-
-
58
6,443
6,501
329,005
335,506
(*1) The AFS assets were transferred into level 3 from level 1 upon the change of the fair value measurement
method of the assets by using the external valuation specialists from previously using quoted prices in the
active market.
(*2) The AFS financial assets were transferred into level 3 from level 2 upon the changes of fair value
measurement method of the assets by using the valuation techniques that include unobservable inputs
from valuation techniques that include inputs other than quoted prices included within Level 1 that are
observable for the asset or liability. The Group recognizes transfers between levels at the end of reporting
period within which events or conditions change.
Out of the amounts recognized in net income for the year ended December 31, 2012, amounts related to assets
and liabilities that the Group currently holds are recognized as net gain of (cid:2936)61,608 million, which are
included in gain or loss on financial instruments at FVTPL and gain or loss on AFS financial assets in the
statements of comprehensive income.
154
woori bank
- 68 -
(3) The following table shows the sensitivity of level 3 fair values to reasonably possible alternative
assumptions.
The sensitivity analysis of the financial instruments has been performed by classifying with favorable and
unfavorable changes based on how changes in unobservable assumptions have effects on the fluctuations of
financial instruments’ value. When the fair value of a financial instrument is affected by more than one
unobservable assumption, the below table reflects the most favorable or the most unfavorable changes
which result from varying the assumptions individually. There are two types of level 3 financial
instruments which should be done through sensitivity analysis. Some instruments, such as equity
derivatives and interest rate derivatives, that fair value changes are recognized as current income. Others,
such as equity securities, debt securities, and beneficiary certificates that fair value changes are recognized
as other comprehensive income. And equity securities, of which fair value level is classified level 3,
measured at cost are excluded from sensitivity analysis.
The following table shows the sensitivity analysis to disclose the effect of reasonably possible alternative
assumptions on the fair value of a level 3 financial instruments for as of December 31, 2013 and December
31, 2012 (Unit: Korean Won in millions):
December 31, 2013
Net income (loss)
Other comprehensive income (loss)
Favorable
Unfavorable
Favorable
Unfavorable
Financial assets:
Financial assets held-for-trading:
Derivative assets (*1)
AFS financial assets:
Equity securities (*2)
Beneficiary certificates (*3)
Other securities (*3)
Financial liabilities:
Financial liabilities held-for-trading:
Derivative liabilities (*1)
Financial liabilities at FVTPL
Compound financial instrument (*1)
Financial assets:
Financial assets held-for-trading:
Derivative assets (*1)
AFS financial assets:
Equity securities (*2)
Beneficiary certificates (*3)
Financial liabilities:
Financial liabilities held-for-trading:
Derivative liabilities (*1)
Financial liabilities at FVTPL
Compound financial instrument (*1)
December 31, 2012
Net income (loss)
Other comprehensive income (loss)
Favorable
Unfavorable
Favorable
Unfavorable
18,827
(12,342)
-
-
-
-
-
18,827
3,975
3,024
6,999
-
-
-
-
(12,342)
(3,992)
(2,982)
(6,974)
64,129
5,851
130
70,110
70,110
-
-
-
9,241
-
-
-
9,241
3,550
5,900
9,450
(9,083)
-
-
-
(9,083)
(3,662)
(6,180)
(9,842)
-
116,488
1,953
118,441
118,441
-
-
-
-
(26,894)
(5,642)
(128)
(32,664)
(32,664)
-
-
-
-
(47,998)
(1,896)
(49,894)
(49,894)
-
-
-
(*1) Fair value changes of equity derivatives and financial assets designed at FVTPL are calculated by
increasing or decreasing historical fluctuation rate of stock price and correlation by 10%. The
historical fluctuation rate of stock price and correlation are major unobservable variables. Fair value
changes of interest rate-linked and currency-linked derivatives are calculated by increasing or
decreasing historical fluctuation rate of interest rate and credit risk adjustment by 10%.
155
2013 ANNUAL REPORT
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(*2) Fair value changes of equity securities are calculated by increasing or decreasing growth rate (0~1%)
and discount rate or liquidation value (-1~1%) and discount rate. The growth rate, discount rate, and
liquidation value are major unobservable variables.
(*3) Fair value changes of beneficiary certificates are calculated by increasing or decreasing price
fluctuation of trust property and discount rate by 1%, respectively. The price fluctuation of trust
property and discount rate are major unobservable variables.
(4) Fair value and carrying amount of financial assets and liabilities that are recorded at amortized cost are as
follows (Unit: Korean Won in millions):
Financial assets:
HTM financial assets
Korean treasury and government agencies
Financial institutions debt securities and others
Loans and receivables
Financial liabilities:
Deposits due to customers
Borrowings
Debentures
Other financial liabilities
Financial assets:
HTM financial assets
Korean treasury and government agencies
Financial institutions debt securities and others
Loans and receivables
Financial liabilities:
Deposits due to customers
Borrowings
Debentures
Other financial liabilities
December 31, 2013
Fair value
Level 2
Level 3
Carrying
Value
2,087,786
7,376,076
9,463,862
-
-
-
-
207,580,684
4,728,909
7,309,911
12,038,820
207,360,680
Level 1
2,682,460
-
2,682,460
-
-
-
-
-
175,169,966
17,270,399
16,963,469
19,399,034
-
-
-
-
175,209,309
17,264,362
16,088,973
19,401,628
December 31, 2012
Fair value
Value
Level 3
Carrying
Value
1,929,491
8,921,413
10,850,904
-
-
-
-
202,139,877
5,527,699
8,813,807
14,341,506
200,208,325
169,300,346
17,479,730
18,875,761
20,771,932
-
-
-
-
169,216,255
17,446,930
17,841,978
20,771,744
Level 1
3,691,528
-
3,691,528
-
-
-
-
-
-
Financial instruments are measured at fair value using a quoted market price in active markets. If there is
no active market for a financial instrument, the Group measures fair value of the financial instruments
using valuation techniques. Fair value measurement techniques and input variable for each type of financial
instruments that are recorded at amortized cost are as follows:
(cid:71)
Debt securities
Loans and receivables
Deposits due to customers,
borrowings and
debentures
Fair value measurement technique
The fair value is measured by discounting the projected cash flows
of debt securities by applying the market discount rate that has
been applied to a proxy company that has similar credit rating to
the issuers of the securities.
The fair value is measured by discounting the projected cash flows
of loan products by applying the market discount rate that has
been applied to a proxy company that has similar credit rating to
the debtor.
The fair value is measured by discounting the projected cash flows
of debt products by applying the market discount rate that is
reflecting credit rating of the Group.
Input variables
Risk free market rate
of return and credit
spread
Risk free market rate
of return, credit
spread and
prepayment ratio
Risk free market rate
of return and
forward rate
156
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12. TRANSFER OF FINANCIAL INSTRUMENTS AND OFFSETTING
(1) Transferred financial assets that do not meet the condition for derecognition.
1) Bonds Sold Under Repurchase Agreements
The financial instruments that were disposed but the Group agreed to repurchase at the fixed amounts at the
same time, so that they did not meet the conditions of derecognition, are as follows(Unit: Korean Won in
millions):
Transfer assets
AFS financial assets
HTM financial assets
Liabilities
Bonds Sold Under Repurchase Agreements
2) Loaned securities
December 31,
2013
December 31,
2012
126,589
651,582
778,171
513,442
291,504
943,694
1,235,198
890,367
When the Group loans its securities to outside parties, the legal ownerships of the securities are transferred,
however, they should be returned at the end of lending period therefore the Group does not derecognize
them from the consolidated financial statements as it owns majority of risks and benefits from the securities
continuously regardless of the transfer of legal ownership.
Financial assets at
Equity securities listed stock
FVTPL:
AFS financial assets
Debt securities Korean treasury
and government agencies
December 31,
2013
December 31,
2012
Loaned to
33,084
240,034
273,118
26,165
20,413
46,578
Samsung securities
Co., Ltd. and others
Korea securities
depository
157
2013 ANNUAL REPORT - 71 -
(2) Derecognized financial instrument through disposals, on which the Group has continuous involvement
The book value, fair value of, and maximum exposure to loss from the financial assets that were
derecognized from the consolidated financial statements of the Group through disposals, but the Group still
have continuous involvements are as follows (Unit: Korean Won in millions)
KAMCO tenth Asset
Securitization Specialty
(“KAMCO specialty”)
Conditional disposal of loans to
KAMCO (*)
Type of continuous
involvement
Acquisition of subordinated
bonds of KAMCO specialty
Guarantee against loss on
transferred assets by the Group
KAMCO specialty
Type of continuous
involvement
Acquisition of subordinated
bonds of KAMCO specialty
Conditional disposal of loans to
Guarantee against loss on
KAMCO (*)
transferred assets by the Group
December 31, 2013
Book value of
continuous
participation
Fair value of
continuous
participation
Maximum
exposure to
loss
1,746
-
1,851
-
1,746
709
December 31, 2012
Book value of
continuous
participation
Fair value of
continuous
participation
Maximum
exposure on
loss
1,746
-
1,930
-
1,746
709
(*) The transferred assets are not settled yet. Therefore the cash flow upon the settlement is not
determinable as of December 31, 2013. And the maximum exposure to loss represents the carrying
amounts of the assets at the date when they were transferred to KAMCO. The Group derecognized the
transferred assets although the Group retains and continues to retain substantially all such risks and
rewards by applying the transition exemptions in K-IFRS 1101.
(3) Financial assets and liabilities subject to offsetting, enforceable master netting agreements and similar
agreements are as follows (Unit: Korean Won in millions):
The Group has both domestic exchange receivables and domestic exchange payables which satisfy
offsetting criteria of K-IFRS 1032. And the domestic exchange receivables (payables) are offset by
domestic exchange payables (receivables) and recorded as loans and receivables or other financial
liabilities in the consolidated statements of financial position.
Certain financial assets and liabilities of the Group is subject to an enforceable master netting arrangement
or similar agreement, under the circumstances of the counter-party’s default, insolvency or bankruptcy,
These financial assets and liabilities includes derivative assets, derivative liabilities, receivable spot
exchange and payable spot exchange which do not satisfy the offsetting criteria of K-IFRS 1032.
In accordance with the collateral arrangements, cash collateral, which do not satisfy the offsetting criteria
of K-IFRS 1032, can be offset with the net amount of derivatives assets, derivative liabilities, receivable
spot exchange and payable spot exchange under the circumstances of the counter-party’s default,
insolvency or bankruptcy.
The Group has bonds sold under repurchase agreements which accounted as secured borrowings and bonds
purchased under repurchase agreements which accounted as secured loans. The Group under the repurchase
agreements has offsetting right only upon the counter-party’s default, insolvency or bankruptcy, thus the
repurchase agreements are applied by the TBMA/ISMA Global Master Repurchase Agreement of which do
not satisfy the offsetting criteria of K-IFRS 1032. The Group disclosed bonds sold (purchased) under
repurchase agreements as borrowings (loans and receivables).
158
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The details of the Group’s recognized financial assets and liabilities subject to enforceable master netting
arrangement or similar agreements as of December 31, 2013 and December 31, 2012, are as follows (Unit:
Korean Won in millions):
Gross amounts of
recognized
financial
liabilities off-set
in the statement
of financial
position
December 31, 2013
Net amounts
of financial
assets
presented in
the statement
of financial
statement
Non-offsetting amounts
in the statement
of financial position
Master
netting
arrangement
and others
Cash
collateral
received
-
-
2,255,988
7,297,634
8,960,106
121,043
Gross
amounts of
recognized
financial
assets
2,255,988
7,297,634
Net
amounts
472,473
-
4,980,889
23,805,554
(cid:1659) 38,340,065
-
23,222,175
23,222,175
4,980,889
583,379
4,980,889
-
15,117,890 13,940,995
-
-
-
583,379
121,043 1,055,852
2,088,469
342,409
7,298,804
-
-
-
2,088,469
342,409
7,298,804
8,970,132
513,442
25,988,995
(cid:3) 36,232,119
-
23,222,175
23,222,175
513,442
2,766,820
13,009,944
513,442
2,746,297
12,229,871
759,550
-
-
-
20,523
780,073
-
-
-
-
Financial assets:
Derivative assets and others (*1)
Receivable spot exchange (*2)
Bonds purchased under resale
agreements
Domestic exchanges receivable (*3)
Financial liabilities:
Derivative liabilities and others (*1)
Compound financial instrument
Payable spot exchange (*4)
Bonds sold under repurchase
agreements
Domestic exchanges payable
Financial assets:
Derivative assets and others (*1)
Receivable spot exchange (*2)
Bonds purchased under resale
agreements
Domestic exchanges receivable (*3)
Financial liabilities:
Derivative liabilities and others (*1)
compound financial instrument
Payable spot exchange (*4)
Bonds sold under repurchase
agreements
Domestic exchanges payable
Gross
amounts of
recognized
financial
assets
3,009,053
10,309,605
4,230,934
28,588,503
(cid:1659) 46,138,095
2,819,907
329,005
10,309,364
890,367
27,763,020
(cid:1659) 42,111,663
Gross amounts of
recognized
financial
liabilities off-set
in the statement
of financial
position
December 31, 2012
Net amounts
of financial
assets
presented in
the statement
of financial
statement
Non-offsetting amounts
in the statement
of financial position
Master
netting
arrangement
and others
Cash
collateral
received
-
-
3,009,053
10,309,605
12,736,161
111,587
Net
amounts
470,910
-
-
27,703,689
27,703,689
4,230,934
884,814
18,434,406
4,230,934
-
16,967,095
-
-
-
884,814
111,587 1,355,724
-
-
-
2,819,907
329,005
10,309,364
12,699,901
-
27,703,689
27,703,689
890,367
59,331
14,407,974
890,367
59,331
13,649,599
758,375
-
-
-
-
758,375
-
-
-
-
(*1) Derivatives assets and liabilities are including derivatives held-for-trading and derivatives held-for-hedging.
(*2) Receivable spot exchanges are included in receivables of loans and receivables.
(*3) Domestic exchanges receivables are included in other financial assets of loans and receivables.
(*4) Payable spot exchanges are included in accounts payable of other financial liabilities.
159
2013 ANNUAL REPORT
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13. INVESTMENTS IN ASSOCIATES
(1)
Investments in associates are as follows (Unit: Korean Won in millions):
December 31, 2013
Associates
Location
Korea
Kumho Tires Co., Ltd. (*1) (*7)
Woori Blackstone Korea Opportunity
Private Equity Fund 1st
Korea
Woori Service Networks Co., Ltd. (*3) Korea
Korea
Woori Private Equity Fund
Korea Credit Bureau Co., Ltd. (*2)
Korea Finance Security Co., Ltd. (*3)
United PF 1st Corporate Financial
Korea
Korea
Capital
stock
739,100
314,500
500
172,600
10,000
6,000
Korea
1,081,400
Main
business
Manufacturing
Securities
investment
Freight & staffing
Securities
investment
Credit information
Security service
Securities
investment
Percentage
of
ownership
(%)
Number of
shares
owned
18,497,105
Financial
statements
as of
12.5 December 31
67,446,424,658
4,704
21.4 December 31
4.9 November 30
49,931
144,000
183,870
28.9 December 31
7.2 December 31
15.3 November 30
190,650
17.7 December 31
Stability (*2)
Chin Hung International Inc.
(*3)(*6)(*7)
Phoenix Digital Tech Co., Ltd. (*4)
Poonglim Industrial Co., Ltd. (*8)
Ansang Tech Co., Ltd. (*5)
STX Engine Co., Ltd. (*1)(*5)(*7)
Samho International Co., Ltd.
(*1)(*5)(*7)
Force TEC Co., Ltd. (*5)
Hana Engineering & Construction Co.,
Ltd. (*5)
(cid:71)
Korea
Korea
Korea
Korea
Korea
Korea
Korea
47,300
2,000
69,200
300
123,000
Construction
Manufacturing
Construction
Manufacturing
Manufacturing
75,900
76,700
Construction
Freight & staffing
25,010,400
73,160
4,146,800
21,800
7,379,600
1,190,000
34,144,788
Korea
3,900
Construction
177,874
26.8 November 30
18.3 December 31
29.9 September 30
23.0
15.0
-
-
-
7.8
22.6
22.2
-
-
Associates
Kumho Tires Co., Ltd. (*1) (*7)
Woori Blackstone Korea Opportunity Private
Equity Fund 1st
Woori Service Networks Co., Ltd. (*3)
Woori Private Equity Fund
Korea Credit Bureau Co., Ltd. (*2)
Korea Finance Security Co., Ltd. (*3)
United PF 1st Corporate Financial Stability (*2)
Chin Hung International Inc. (*3)(*6)(*7)
Phoenix Digital Tech Co., Ltd. (*4)
Poonglim Industrial Co., Ltd. (*8)
December 31, 2012
Number of shares
owned
22,514,800
Percentage of
ownership (%)
17.8
Financial statements
as of
December 31
90,297,987,131
4,704
53,286
144,000
183,870
190,650
125,052,000
73,160
4,316,176
21.4
4.9
28.9
7.2
15.3
17.7
27.9
18.3
31.6
December 31
November 30
December 31
December 31
November 30
December 31
November 30
December 31
-
(*1) The Group has significant influence in the creditors' council.
(*2) The Group can participate in the decision making body and exercise significant influence over Korea Credit Bureau Co.,
Ltd. and the United PF 1st Corporate Financial Stability through business partnerships.
(*3) The significant business of Woori Service Network and Korea Finance Security is transacted mostly with the Group.
As the financial statements as of December 31, 2013 of Korea Finance Security are not available, the Group applied
the equity method by using the financial statements as of November 30, 2013 and adjusted for the effects of significant
transactions or events that occurred between the date of those financial statements and the date of the consolidated
financial statements.
(*4) The Group’s ownership ratio in the entity based on the shares that have voting rights is 25.1%, therefore it is concluded
that the Group has significant influence over the entity.
(*5) The Group is holding the interest through debt for equity swap during the current period. In addition, the carrying
values of investments in Ansang Tech and Hana Construction are nil as at the end of 2013.
(*6) Due to the capital reduction of Chin Hung International Inc., which was performed during the current fiscal year, the
number of shares owned by the Group diminished to 25,010,400 from 125,052,000.
(*7) The investments in associates that have quoted market prices are Kumho Tire (Current year: KRW 11,500, Previous
year: KRW 13,000), Chin Hung International Inc. (Current year: KRW 1,610, Previous year: KRW 648), STX Engine
(Current year: KRW 4,600, Previous year: Not applicable), and Samho Co., Ltd. (Current year: KRW 3,300, Previous
year: Not applicable)
(*8) As the financial statements as of December 31, 2013 are not available, the Group applied the equity method by using
the financial statements as of September 30, 2013 and adjusted for the effects of significant transactions or events that
occurred between the date of those financial statements and the date of the consolidated financial statements.
160
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(2) The entities excluded from associates, although their percentage of ownership is higher than 20% as of
December 31, 2013 and 2012 are as follows:
(As of December 31, 2013)
Associate
Vogo 2-2 Special Purpose Entity (*1)
LIG E&C Co., Ltd. (*2)
Orient Shipyard Co., Ltd. (*2)
GinsengK Co., Ltd. (*2)
Pi City Co., Ltd (*2)
Number of shares
owned
24,548,281,071
755,946
465,050
2,107,432
871,631
Percentage of
ownership
36.4%
22.8%
23.0%
20.2%
21.1%
(*1) Even though the Group’s ownership ratio in the entity is more than 20% as a limited partner, it is
determined that the Group does not have significant influence over the entity since the Group cannot
exercise significant influence in the decision making bodies, such as the investment committee, thus it
has been excluded from the investments in associates.
(*2) Even though the Group’s ownership ratio in the entity is more than 20%, it does not have significant
influence over the entities due to the fact that the entities are going through workout process under
receivership, thus they have been excluded from the investments in associates.
(As of December 31, 2012)
Associate
Vogo 2-2 Special Purpose Entity (*)
Number of shares
owned
24,187,282,362
Percentage of
ownership
34.6%
(*) Even though the Group’s ownership ratio in the entity is more than 20% as a limited partner, it is
determined that the Group does not have significant influence over the entity since the Group cannot
exercise significant influence in the decision making bodies, such as the investment committee, thus it
has been excluded from the investments in associates.
161
2013 ANNUAL REPORT - 75 -
(3) Changes in carrying value of investments in associates accounted for using the equity method are as
follows (Unit: Korean Won in millions):
For the year ended December 31, 2013
Acquisition
cost
93,003 156,029
January 1,
2013
Gain (loss)
on
valuation Acquisitions
-
20,380
Disposals
and others Dividends Capital
(2,330)
(29,378)
-
Other
changes
(4,600)
December
31,
2013
140,101
67,446
99,125
24
49,931
129
15,151
3,600
3,031
758
4,244
191,617 201,364
56,223
559
14,477
-
-
-
550,332
60,275
538
13,916
47,008
7,492
34
535,642
5,918
14
3,424
316
122
2,366
(10,156)
(3,364)
(16,680)
-
-
-
2,340
-
-
-
-
-
-
-
-
-
47,008
7,492
34
54,534
(22,851)
(6,360)
-
-
(3,354)
(7)
-
-
(1,123)
-
-
-
-
-
(554)
-
-
-
(56,137)
-
(55)
-
-
-
-
-
-
-
(6,422)
-
-
-
919
3,925
1
-
-
-
1,392
-
-
-
-
-
-
(1,086)
-
5,835
-
-
-
149
75,832
136
14,098
3,347
4,311
203,730
45,900
1,120
3,079
47,008
7,492
34
546,188
For the year ended December 31, 2012
Acquisition
cost
113,204
January 1,
2012
111,357
Gain (loss)
on
valuation Acquisitions
-
16,646
Disposals
and others Dividends Capital
3,324
-
-
Other
changes
24,702
December
31,
2012
156,029
90,298
76,828
9,883
16,301
(1,403)
(2,484)
-
24
53,286
3,600
98
32,475
3,012
38
(7,286)
283
758
3,468
831
-
-
-
-
-
(11,222)
-
(7)
-
-
-
1,184
(264)
-
(55)
-
-
-
-
-
-
191,617
60,275
538
14,477
528,077
149,099
-
-
-
376,337
8,815
(4,103)
2,319
-
27,426
43,617
60,275
538
14,477
135,208
-
-
-
-
(12,625)
-
-
-
-
(2,546)
-
51
(2,698)
-
1,597
(167)
-
400
-
24,935
99,125
129
15,151
3,031
4,244
201,364
56,223
559
14,477
550,332
Investee
Kumho Tires Co., Ltd.
Woori Blackstone Korea
Opportunity Private Equity
Fund 1
Woori Service Networks
Co., Ltd.
Woori Private Equity Fund
Korea Credit Bureau
Co., Ltd.
Korea Finance Security
Co., Ltd.
United PF 1st Corporate
Financial Stability
Chin Hung International Inc.
Phoenix Digital Tech Co., Ltd.
Poonglim Industrial Co., Ltd.
STX Engine Co., Ltd.
Samho International Co., Ltd.
Force TEC Co., Ltd.
Investee
Kumho Tires Co., Ltd.
Woori Blackstone Korea
Opportunity Private Equity
Fund 1
Woori Service Networks
Co., Ltd.
Woori Private Equity Fund
Korea Credit Bureau Co., Ltd.
Korea Finance Security Co.,
Ltd.
United PF 1st Corporate
Financial Stability
Chin Hung International Inc.
Phoenix Digital Tech Co., Ltd.
Poonglim Industrial Co., Ltd.
162
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(4) Condensed financial information related to most of investments in associates accounted for using the equity
method is as follows (Unit: Korean Won in millions):
Investee
Kumho Tires Co., Ltd.
Woori Blackstone Korea Opportunity
Private Equity Fund
Woori Service Networks Co., Ltd.
Woori Private Equity Fund
Korea Credit Bureau Co., Ltd.
Korea Finance Security Co., Ltd.
United PF 1st Corporate Financial Stability
Phoenix Digital Tech Co., Ltd.
Chin Hung International Inc.
Poonglim Industrial Co., Ltd.
STX Engine Co., Ltd.
Samho International Co., Ltd.
Investee
Kumho Tires Co., Ltd.
Woori Blackstone Korea Opportunity
Private Equity Fund
Woori Service Networks Co., Ltd.
Woori Private Equity Fund
Korea Credit Bureau Co., Ltd.
Korea Finance Security Co., Ltd.
United PF 1st Corporate Financial Stability
Phoenix Digital Tech Co., Ltd.
Chin Hung International Inc.
Poonglim Industrial Co., Ltd.
As of and for the year ended December 31, 2013
Assets
4,516,507
Liabilities
3,453,028
Operating
revenue
3,676,336
Net income
(Net loss)
110,580
354,993
4,485
52,623
63,043
31,113
1,159,220
23,159
551,443
545,000
1,975,978
680,075
894
1,736
3,880
16,542
2,985
10,294
17,044
459,171
472,549
1,726,903
565,878
13,794
14,131
872
51,571
45,003
152,315
33,409
403,977
164,734
542,281
646,868
27,620
1,061
11,864
4,909
6,356
13,567
(251)
(14,915)
(54,314)
(560,405)
8,399
As of and for the year ended December 31, 2012
Assets
4,782,299
Liabilities
3,893,931
Operating
revenue
4,047,691
Net income
(Net loss)
120,584
463,839
4,383
1,522,818
55,944
29,363
1,153,268
24,435
581,766
556,432
1,687
1,774
1,453,866
13,834
1,666
17,685
21,388
456,016
634,856
51,321
12,874
210,079
47,660
42,196
98,873
18,497
480,238
348,420
44,918
1,140
(25,189)
5,019
5,703
48,241
7,328
(62,617)
(862,251)
163
2013 ANNUAL REPORT
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(5) Adjustments to calculate carrying value of most of investments in associates out of their net asset are as
follows(Unit: Korean Won in millions) :
Investee
Kumho Tires Co., Ltd.(*)
Woori Blackstone Korea Opportunity
Private Equity Fund
Woori Service Networks Co., Ltd.
Woori Private Equity Fund
Korea Credit Bureau Co., Ltd.
Korea Finance Security Co., Ltd.
United PF 1st Corporate Financial Stability
Phoenix Digital Tech Co., Ltd.
Chin Hung International Inc. (*)
Poonglim Industrial Co., Ltd.
STX Engine Co., Ltd.
Samho International Co., Ltd.
Net assets
1,063,479
354,099
2,749
48,743
46,501
28,128
1,148,926
6,115
92,272
72,451
249,075
114,197
Investee
Kumho Tires Co., Ltd.(*)
Woori Blackstone Korea Opportunity
Private Equity Fund
Woori Service Networks Co., Ltd.
Woori Private Equity Fund
Korea Credit Bureau Co., Ltd.
Korea Finance Security Co., Ltd.
United PF 1st Corporate Financial Stability
Phoenix Digital Tech Co., Ltd.
Chin Hung International Inc. (*)
Poonglim Industrial Co., Ltd.
Net assets
888,368
462,152
2,609
68,952
42,110
27,697
1,135,583
3,047
125,750
(78,424)
December 31, 2013
Percentage
of
Ownership
12.5%
Share in net
assets
128,248
Good
will
15,125
Internal
transaction
and others
Carrying value
of investments
in associates
(3,272)
140,101
21.4%
4.9%
28.9%
7.2%
15.3%
17.7%
18.3%
26.8%
29.9%
15.0%
7.8%
75,949
136
14,098
3,347
4,311
203,730
1,120
24,541
(35,275)
32,080
8,952
(cid:3) -
-
-
-
-
-
-
21,359
38,354
14,928
-
(117)
-
-
-
-
-
-
-
-
-
(1,460)
75,832
136
14,098
3,347
4,311
203,730
1,120
45,900
3,079
47,008
7,492
Percentage
of
Ownership
17.8%
December 31, 2012
Share in net
assets
137,619
Good
will
18,410
21.4%
4.9%
28.9%
7.2%
15.3%
17.7%
18.3%
27.9%
32.4%
99,125
-
129
-
15,151
-
3,031
-
4,244
-
201,364
-
559
-
21,359
34,864
(25,445) 39,922
Internal
transaction
and others
Carrying value
of investments
in associates
-
-
-
-
-
-
-
-
-
-
156,029
99,125
129
15,151
3,031
4,244
201,364
559
56,223
14,477
(*) The net asset amount is after considering preferred stocks.
164
woori bank
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14. INVESTMENT PROPERTIES
(1)
Investment properties are as follows (Unit: Korean Won in millions):
Acquisition cost
Accumulated depreciation
Net carrying value
December 31,
2013
December 31,
2012
348,268
(14,434)
333,834
357,347
(11,165)
346,182
(2) Changes in investment properties are as follows (Unit: Korean Won in millions):
Beginning balance of net carrying amount
Disposals
Depreciation
Impairment loss (reversal)
Classified to assets held-for-sale
Foreign currencies translation adjustments
Transfers from Premises and equipment
Ending balance of net carrying value
For the years ended December 31
2013
2012
346,182
(5,212)
(3,414)
(117)
(3,594)
(11)
-
333,834
349,459
-
(3,437)
80
-
(65)
145
346,182
(3) Fair value of investment properties as of December 31, 2013 are as follows (Unit: Korean Won in millions):
The fair value of investment property based on an assessment that was independently performed by
external appraisal agencies as of December 31, 2013, is classified as level 3 in the fair value hierarchy.
Classification
Woori Finance Sangam
Center and other
The latest
revaluation date
Land
Building
Total
March 31, 2013
270,661
70,073
340,734
(4) For the years ended December 31, 2013 and 2012, revenue occurred from investment properties is
(cid:2936)14,416 million and (cid:2936)13,468 million, and the operating expenses directly related to the investment
properties that generate rented fee amount to (cid:2936)1,223 million and (cid:2936)1,426 million, respectively.
165
2013 ANNUAL REPORT
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15. PREMISES AND EQUIPMENT
(1) Details of premises and equipment are as follows (Unit: Korean Won in millions):
Land
Building
Acquisition cost
Accumulated depreciation
Net carrying value
1,512,066
-
1,512,066
794,510
(91,945)
702,565
Land
Building
Acquisition cost
Accumulated depreciation
Net carrying value
1,517,728
-
1,517,728
772,646
(68,084)
704,562
December 31, 2013
Properties for
business use
397,715
(301,377)
96,338
Structures in
leased office
339,924
(281,711)
58,213
Construction
in progress
31
-
31
December 31, 2012
Properties for
business use
393,929
(291,259)
102,670
Structures in
leased office
317,088
(260,048)
57,040
Construction
in progress
3,680
-
3,680
Total
3,044,246
(675,033)
2,369,213
Total
3,005,071
(619,391)
2,385,680
(2) Details of changes in premises and equipment are as follows (Unit: Korean Won in millions):
Beginning balance
Foreign currencies translation
adjustment
Acquisitions
Disposals
Depreciation (*)
Classified to assets held-for-sale
Other transfers
Others
Credit card division spin-off
Ending balance
Beginning balance
Foreign currencies translation
adjustment
Acquisitions
Disposals
Depreciation (*)
Classified to assets held- for-sale
Other transfers
Others
Ending balance
For the year ended December 31, 2013
Land
Building
1,517,728
704,562
Properties for
business use
102,670
Structures in
leased office
Construction
in progress
Total
57,040
3,680
2,385,680
(29)
618
(2,809)
-
(955)
-
-
(2,487)
1,512,066
(242)
18,683
(353)
(24,329)
(1,834)
6,920
-
(842)
702,565
(530)
33,130
(1,826)
(35,615)
-
-
-
(1,491)
96,338
53
20,899
(981)
(28,044)
-
-
9,568
(322)
58,213
(4)
3,276
(1)
-
-
(6,920)
-
-
31
(752)
76,606
(5,970)
(87,988)
(2,789)
-
9,568
(5,142)
2,369,213
For the year ended December 31, 2012
Land
Building
1,519,991
692,259
Properties for
business use
87,410
Structures in
leased office
43,468
Construction
in progress
Total
2,832
2,345,960
(95)
2,742
(3,925)
-
(937)
(48)
-
1,517,728
(246)
30,708
(838)
(24,041)
290
6,430
-
704,562
(842)
54,203
(384)
(38,115)
-
269
129
102,670
(445)
35,362
(1,530)
(23,248)
-
-
3,433
57,040
(37)
8,835
-
-
-
(7,950)
-
3,680
(1,665)
131,850
(6,677)
(85,404)
(647)
(1,299)
3,562
2,385,680
(*) (cid:2936)279 million and (cid:2936)1,030 million are included in depreciation classified into profit and loss from
discontinued operations for the years ended December 31, 2013 and 2012, respectively.
166
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16. INTANGIBLE ASSETS
(1) Details of intangible assets are as follows (Unit: Korean Won in millions):
Development
costs
Software
Industrial
property rights
December 31, 2013
Core
deposits
Others
Membership
deposits (*)
Total
Cost of purchases or
appraised value
Accumulated depreciation
Accumulated impairment
losses
Net carrying value
18,463
(13,235)
-
5,228
824
(539)
-
285
397
(164)
-
233
3,107
(3,107)
347,126
(289,089)
13,601
-
383,518
(306,134)
-
-
-
58,037
(1,368)
12,233
(1,368)
76,016
Development
costs
Software
Industrial
property rights
December 31, 2012
Core
deposits
Others
Membership
deposits (*)
Total
Cost of purchases or
appraised value
Accumulated depreciation
Accumulated impairment
losses
Net carrying value
14,619
(12,697)
-
1,922
789
(427)
-
362
287
(121)
-
166
3,153
(2,917)
346,617
(251,466)
12,427
-
377,892
(267,628)
-
236
-
95,151
(1,344)
11,083
(1,344)
108,920
(*) Membership deposits include golf clubs and condominium membership deposits and their useful life cannot
be measured. The Group has recognized impairment loss for the membership deposits since the recoverable
amount is lower than the carrying amount.
(2) Details of changes in intangible assets are as follows (Unit: Korean Won in millions):
For the year ended December 31, 2013
Beginning balance
Foreign currencies translation adjustments
Acquisitions
Depreciation (*1)
Impairment loss
(Reversal of impairment loss) (*2)
Disposals
Credit card division spin-off
Ending balance
Beginning balance
Foreign currencies translation adjustment
Acquisitions
Depreciation (*1)
Impairment loss
(Reversal of impairment loss) (*2)
Disposals
Transfers
Ending balance
Development
costs
1,922
-
5,264
(976)
-
(982)
-
5,228
Development
costs
3,173
(1)
76
(1,326)
-
-
-
1,922
Software
362
-
34
(111)
Industrial
property rights
166
-
120
(50)
Core
deposits Others
236 95,151
(79)
6
-
9,915
(242) (42,766)
Membership
deposits
11,083
(50)
3,380
-
-
-
-
285
-
-
(3)
233
-
-
(754)
-
-
(3,430)
- 58,037
(780)
(616)
(784)
12,233
For the year ended December 31, 2012
Software
468
-
23
(129)
Industrial
property rights
150
1
48
(33)
Core
deposits Others
131,301
594
(26)
-
(213)
7,722
(332) (44,745)
Membership
deposits
11,701
(168)
1,554
-
-
-
-
362
-
-
-
166
-
-
-
236
-
(66)
1,152
95,151
(1,661)
(343)
-
11,083
(*1) Depreciation of (cid:2936)521 million and (cid:2936)2,012million are included in profit from discontinued operations for
the years ended December 31, 2013 and 2012, respectively.
(*2) Impairment loss of (cid:2936)6 million and (cid:2936)620 million are included in profit from discontinued operations for
the years ended December 31, 2013 and 2012, respectively.
Total
108,920
(123)
18,713
(44,145)
(780)
(2,352)
(4,217)
76,016
Total
147,387
(407)
9,423
(46,565)
(1,661)
(409)
1,152
108,920
167
2013 ANNUAL REPORT
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17. OTHER ASSETS
Details of other assets are as follows (Unit: Korean Won in millions):
Suspense receivables:
Prepaid expenses:
Prepaid expenses in local currency
Prepaid expenses in foreign currencies
Unearned interest of prepaid expenses
Others
Supplies and others
Non-operative assets:
Non-operative real properties
December 31, 2013 December 31, 2012
407
-
151,418
6,043
-
157,461
165,522
8,346
153
174,021
3,467
3,576
329
161,257
588
178,592
18. ASSETS HELD-FOR-SALE
In accordance with K-IFRS 1105 ‘Non-current assets held- for-sale and discontinued operations’, the Group
reclassified certain assets into assets held-for-sale. Assets held-for-sale of (cid:2936)587 million and (cid:2936)1,239 million,
respectively, are recorded as of December 31, 2013 and December 31, 2012.
168
woori bank
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19. ASSETS SUBJECT TO LIEN AND ASSETS ACQUIRED THROUGH A FORECLOSURE
(1) Details of assets subject to lien are as follows (Unit: Korean Won in millions):
Due from banks
Financial assets at
FVTPL
Financial institutions debt
securities and others
AFS financial assets
Korean treasury and
Collateral given to
Samsung Securities
and others
Hanhwa Securities
and others
Nomura Securities
December 31, 2013
Amount
Reason for collateral
Margin deposit for future or
8,242
option
176,298 Substitute securities and others
Bonds sold under repurchase
government agencies bonds
and others
126,589
agreements (*)
Financial institutions debt
securities and others
HTM financial assets Korean treasury and
BOK and others
Nomura Securities
2,284,954
and others
Bonds sold under repurchase
Limitation on total loan exposure
government agencies bonds
and others
651,582
agreements (*)
Korean treasury and
government agencies bonds
and others
BOK and others
2,728,492
5,976,157
and others
Limitation on total loan exposure
Due from banks
Financial assets at
FVTPL
Financial institutions debt
securities and others
Collateral given to
Goldman Sox and
others
Merrill Lynch and
others
AFS financial assets
Korean treasury and
Nomura Securities
December 31, 2012
Amount
Reason for collateral
Deposits for futures margin and
5,989
others
353,818 Substitute securities and others
Bonds sold under repurchase
government agencies bond
and others
291,504
agreements (*)
Financial institutions debt
securities and others
HTM financial assets Korean treasury and
BOK and others
Nomura Securities
1,334,106
and others
Bonds sold under repurchase
Limitation on total loan exposure
government agencies bonds
and others
943,694
agreements (*)
Korean treasury and
government agencies bonds
and others
Loans
BOK and others
Postal Savings Bank
of China
Limitation on total loan exposure
3,867,577
and others
87,069 Collateral for borrowings
6,883,757
(*) Debt securities sold under the agreements that the seller repurchases at the agreed price or the sales price
plus additional amounts at specified rate. These debt securities are not derecognized from the consolidated
statements of financial position of the Group. The buyers of these debt securities has right to sell and
pledge without constraints. As these debt securities are not derecognized, the related transferred amounts
are recorded as liabilities, which are debt securities sold under repurchase agreement.
(2) There are no assets acquired through a foreclosure as of December 31, 2013 and December 31, 2012.
169
2013 ANNUAL REPORT
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(3) Details of loaned securities as of December 31, 2013 and December 31, 2012 are as follows (Unit: Korean
Won in millions):
Financial assets at
Korean treasury and government
FVTPL
AFS financial
assets
agencies securities
Korean treasury and
government agencies bonds
December 31,
2013
December 31,
2012
Loaned to
33,084
26,165 Samsung Securities and other
240,034
273,118
20,413 Korea Securities Depository
46,578
Loaned securities are loans of specific securities to borrowers who agree to return a like quantity of the same
security. As the Group does not derecognize these securities, there are no liabilities related to loaned securities.
(4) Collaterals held that can be disposed of and re-subject to lien regardless of defaults
Fair value of the collaterals held that can be disposed of and re-subject to lien regardless of defaults as of
December 31, 2013 and December 31, 2012 is as follows (Unit: Korean Won in millions):
Fair value of
collateral
4,830,746
Fair value of
collateral
4,173,360
December 31, 2013
Fair value of the collaterals held,
disposed of and re-subject to lien
December 31, 2012
Fair value of the collaterals held,
disposed of and re-subject to lien
-
-
Securities
Securities
170
woori bank
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20. FINANCIAL LIABILITIES AT FVTPL
(1) Financial liabilities at FVTPL are as follows (Unit: Korean Won in millions):
Financial liabilities held-for-trading
Financial liabilities designated at FVTPL
December 31, 2013 December 31, 2012
2,105,469
525,568
2,631,037
2,824,237
644,459
3,468,696
(2) Details of financial liability held-for-trading are as follows (Unit: Korean Won in millions):
Derivative liabilities:
Interest rate derivatives
Currency derivatives
Stock derivatives
Other derivatives
Deposits
Gold banking liabilities
December 31, 2013 December 31, 2012
1,033,924
1,032,206
27,173
2,912
2,096,215
9,254
2,105,469
1,612,423
1,167,901
33,008
5,323
2,818,655
5,582
2,824,237
(3) Details of financial liabilities designated at FVTPL are as follows (Unit: Korean Won in millions):
Compound financial instrument
Equity
Debentures:
Debentures in local currency
Debentures in foreign currencies
December 31, 2013 December 31, 2012
342,409
125,529
57,630
525,568
329,005
227,920
87,534
644,459
Compound financial instruments are designated as at FVTPL as the instruments contain one or more
embedded derivatives and be permitted the entire compound financial instruments to be designated as at
FVTPL in accordance with K-IFRS 1039 “Financial Instruments: Recognition and Measurement.”
A portion of liabilities which do not meet the definition of financial liabilities held-for-trading is designated
as financial instrument at FVTPL by using fair value option to eliminate or significantly reduce a
measurement or recognition inconsistency that would otherwise arise from recognizing assets and liabilities
on a different basis.
(4) Credit risk adjustments to financial liabilities designated at FVTPL are as follows (Unit: Korean Won in
millions):
Financial liabilities designated at FVTPL
Changes in fair value for credit risk adjustments
Accumulated changes in credit risk adjustments
December 31, 2013 December 31, 2012
525,568
(2,850)
(43,531)
644,459
(23,142)
(49,612)
(5) Differences of financial liabilities at FVTPL’s carrying amount and face amount at maturity are as follows
(Unit: Korean Won in millions):
Carrying amount
Face amount at maturity
December 31, 2013 December 31, 2012
525,568
644,271
(118,703)
644,459
771,776
(127,317)
171
2013 ANNUAL REPORT
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21. DEPOSITS DUE TO CUSTOMERS (“ DEPOSITS ”)
(1) Details of deposits by interest type are as follows (Unit: Korean Won in millions):
December 31, 2013 December 31, 2012
Deposits in local currency:
Deposits on demand:
Interest bearing
Non-interest bearing
Money Trusts
Deposits at termination
Mutual installment
3,166,059
8,547,421
1,236,844
146,666,672
53,189
159,670,185
2,534,985
8,155,043
1,209,474
140,593,204
64,959
152,557,665
Certificate of deposits
3,297,551
1,144,569
Other deposits:
Deposits on notes payable
Deposits on CMA
Deposits in foreign currencies:
Interest bearing
Non-interest bearing
-
-
-
10,978,023
1,305,859
12,283,882
2,940,580
1,518,282
4,458,862
10,071,993
993,043
11,065,036
Present value discount
(42,309)
175,209,309
(9,877)
169,216,255
(2) Details of deposits by customers are as follows (Unit: Korean Won in millions):
Individuals
Corporation
Banks
Government agencies
Other financial institution
Government
Non-profit corporation
Educational organization
Foreign corporation
Others
Present value discount
December 31, 2013 December 31, 2012
63,811,119
56,701,458
17,192,049
15,826,903
8,548,496
1,197,202
4,194,506
2,525,956
1,159,035
4,094,894
(42,309)
175,209,309
56,502,905
54,495,562
21,490,959
14,142,852
8,126,173
3,049,390
4,280,027
2,642,535
1,522,774
2,972,955
(9,877)
169,216,255
172
woori bank
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22. BORROWINGS AND DEBENTURES
(1) Details of borrowings as are as follows (Unit: Korean Won in millions):
December 31, 2013
Lender
Interest rate (%)
Amount
Borrowings in local currency:
Borrowings from the BOK
Borrowing from government funds
Others
BOK
Small & medium Business
Corporation and others
Seoul Metropolitan
Government and others
Borrowings in foreign currencies
Offshore borrowings in foreign
Bank of Communication and
others
Toronto Dominion Bank SG
currencies
Call-money
Bonds sold under repurchase agreements Others
Others
Bills sold
Asset-backed debt
Others
Present value discount
Banks and others
0.5 ~ 1.0
0.0 ~ 3.5
0.0 ~ 3.8
0.0 ~ 12.0
0.8
0.0 ~ 5.5
1.4 ~ 21.2
0.0 ~ 2.7
2.9 ~ 3.2
513,841
1,790,146
2,769,875
5,073,862
6,225,236
21,106
4,871,976
513,442
111,096
448,500
(856)
17,264,362
December 31, 2012
Lender
Interest rate (%)
Amount
Borrowings in local currency:
Borrowings from the BOK
Borrowing from government funds
Others
BOK
Small & medium Business
Corporation and others
Seoul Metropolitan
Government and others
Borrowings in foreign currencies
Call-money
Bonds sold under repurchase agreements Others
Others
Bills sold
Asset-backed debt
Others
Present value discount
Commerz Bank AG and other
Banks and others
1.3
0.0 ~ 3.5
0.0 ~ 3.8
0.0 ~ 10.5
0.2 ~ 4.4
1.5 ~ 21.2
0.0 ~ 3.5
2.7 ~ 4.8
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
519,965
1,843,071
2,145,854
4,508,890
6,966,540
4,505,094
890,367
82,624
494,600
(1,185)
17,446,930
173
2013 ANNUAL REPORT
- 87 -
(2) Details of other monetary organizations’ borrowings are as follows (Unit: Korean Won in millions):
BOK
General bank
Others
December 31, 2013
Borrowings in local currency
Borrowings in foreign currencies
Call-money
Bonds sold under repurchase
agreements
513,841
-
963
-
514,804
-
6,237,056
1,804,513
31,659
8,073,228
BOK
General bank
Others
December 31, 2012
Borrowings in local currency
Borrowings in foreign currencies
Call-money
Bonds sold under repurchase
agreements
519,965
-
-
-
519,965
-
6,961,979
572,094
32,133
7,566,206
(3) Details of debentures are as follows (Unit: Korean Won in millions):
-
-
3,066,500
Total
513,841
6,237,056
4,871,976
459,512
3,526,012
491,171
12,114,044
-
-
3,933,000
Total
519,965
6,961,979
4,505,094
856,009
4,789,009
888,142
12,875,180
Carrying value of bond:
Ordinary bonds
Subordinated bonds
Discount on bonds
December 31, 2013
December 31, 2012
Interest rate
(%)
0.8 ~ 10.5
3.4 ~ 10.3
Amount
9,979,212
6,160,786
16,139,998
(51,025)
16,088,973
Interest rate
(%)
1.3 ~ 10.5 (cid:1659)
3.4 ~ 10.3 (cid:1659)
Amount
12,497,440
5,380,317
17,877,757
(cid:1659) (cid:1659)
(cid:1659) (cid:1659)
(35,779)
17,841,978
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23. PROVISIONS
(1) Details of provisions are as follows (Unit: Korean Won in millions):
Provisions for guarantees (*)
Provisions for unused commitments
Provision for credit card point
Other provision
Asset retirement obligation
December 31, 2013
501,662
68,363
-
26,441
21,759
618,225
December 31, 2012
405,729
139,970
6,416
13,899
13,427
579,441
(*) Provisions for guarantees include provision for financial guarantee of (cid:2936) 123,227 million and
(cid:2936) 95,049 million as of December 31, 2013 and December 31, 2012, respectively.
(2) Changes in provision except asset retirement obligation and retirement benefit obligation are as follows
(Unit: Korean Won in millions):
For the year ended December 31, 2013
Provision for
credit card
point
Other
provisions
Beginning balance
Provisions provided (*)
Provisions used
Others
Reversal of unused amount
Foreign currencies translation
adjustments
Credit card division spin off
Ending balance
Beginning balance
Provisions provided (*)
Provisions used
Others
Reversal of unused amount
Foreign currencies translation
adjustments
Ending balance
Provision for
guarantees
405,729
95,400
(40,506)
43,467
(1,998)
(53)
(377)
501,662
Provision for
guarantees
437,557
51,870
(41,202)
34,426
(77,087)
165
405,729
Provision for
unused
commitments
139,970
1,825
(54)
-
(9,811)
(101)
(63,466)
68,363
Provision for
unused
commitments
116,444
26,370
(150)
-
(2,543)
(151)
139,970
6,416
6,173
(5,157)
-
-
-
(7,432)
-
13,899
24,652
(1,894)
-
-
48
(10,264)
26,441
701
27,078
(21,363)
-
-
-
6,416
19,603
18
(3,051)
-
(2,671)
-
13,899
Total
566,014
128,050
(47,611)
43,467
(11,809)
(106)
(81,539)
596,466
Total
574,305
105,336
(65,766)
34,426
(82,301)
14
566,014
For the year ended December 31, 2012
Provision for
credit card
point
Other
provisions
(*) For the years ended December 31, 2013 and 2012, (cid:2936) 10,343 million and (cid:2936) 32,227 million, which are
classified as profit from discontinued operations, are included in provisions provided account,
respectively.
(3) Changes in asset retirement obligation are as follows (Unit: Korean Won in millions):
Beginning balance
Provisions provided
Provisions used
Discount rate adjustment
Amortization
Equity spin-off of credit card
Ending balance
For the years ended December 31
2012
2013
13,427
909
(397)
8,659
38
(877)
21,759
11,080
1,561
(847)
1,605
28
-
13,427
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24. RETIREMENT BENEFIT OBLIGATION
(1) The Group’s defined benefit plan characteristics are as follows:
Employees and directors with one or more years of service are entitled to receive a payment upon
termination of their employment, based on their length of service and rate of pay at the time of termination.
The assets of the plans are measured at their fair value at the end of reporting date. Plan liabilities are
measured using the projected unit method, which takes account of projected earnings increases, using
actuarial assumptions that give the best estimate of the future cash flows that will arise under the plan
liabilities.
(2) The Group exposed to various risks through defined benefit retirement pension plan, and the most
significant risks are as follows:
Volatility of asset The defined benefit obligation was estimated with an interest rate calculated
based on blue chip corporate bonds earnings. A deficit may occur if the rate of
return of plan assets falls short of the interest rate. The plan assets include
equity instruments and are exposed to volatility and risks.
(cid:71)
Decrease in
profitability of
blue chip bonds
A decrease in profitability of blue chip bonds will be offset by some increase in
the value of debt securities that the employee benefit plan owns but will bring
an increase in the defined benefit liabilities.
Risk of inflation Most defined benefit obligations are related to inflation rate; the higher the
inflation rate is, the higher the level of liabilities. Therefore, deficit occurs in
the system if an inflation rate increases. However, some plan assets are not
influenced by (fixed rate obligation instruments) or slightly influenced by
(equity instruments) an inflation rate.
(3) Details of defined benefit obligation are as follows (Unit: Korean Won in millions):
Present value of defined benefit obligation
Fair value of plan assets
Net defined benefit liabilities
December 31,
2013
December 31,
2012
471,214
(431,844)
39,370
384,098
(318,161)
65,937
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(4) Changes in the present value of defined benefit obligation for the years ended December 31, 2013 and 2012
are as follows (Unit: Korean Won in millions):
Beginning balance
Service cost (*1)
Interest cost
Actuarial loss (gain) (*2)
Adjustment due to foreign currencies
translation
Retirement benefit paid
Past service cost
Loss on the curtailment or settlement
Others
Ending balance
For the years ended December 31
2013
2012
384,098
108,925
14,255
(10,085)
2,742
(24,870)
-
(3,985)
134
471,214
234,663
89,374
10,734
62,301
2
(11,084)
232
(2,097)
(27)
384,098
(*1) Current service cost included in discontinued operations profit or loss is recorded for (cid:2936)1,274 million
and (cid:2936) 1,614 million as of December 31, 2013 and December 31, 2012, respectively.
(*2) All the changes about actuarial gains and losses are resulted from the effects of changes in actuarial
assumptions about financial variables.
(5) Changes in plan assets for the years ended December 31, 2013 and 2012 are as follows (Unit: Korean Won
in millions):
Beginning balance
Interest income
Return on plan assets (excluding
amounts included in interest, above)
Employer’s contributions
Retirement benefit paid
Curtailment or settlement
Others
Ending balance
For the years ended December 31
2013
2012
318,161
13,861
(1,303)
124,695
(18,630)
(3,725)
(1,215)
431,844
212,436
11,793
(2,113)
105,591
(7,107)
(2,055)
(384)
318,161
The Group’s plan assets are deposited to other financial institutions by investing financial products such
as retirement pension. For the next fiscal period, the expected contributions by the Group are (cid:2936) 103,548
million.
(6) The significant actuarial assumptions used in defined benefit obligation assessment are as follows (Unit:
Korean Won in millions)
Discount rate
Future wage growth rate
December 31, 2013
4.28%
5.72%
December 31, 2012
3.82%
5.66%
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(7) Details of plan assets are as follows (Unit: Korean Won in millions):
Time deposits
Others
December 31, 2013
394,561
37,283
431,844
December 31, 2012
300,180
17,981
318,161
(8) The sensitivity of actuarial assumptions used in assessment of defined benefit obligation is as follows (Unit:
Korean Won in millions):
Discount rate
Future wage growth rate
Increase by 1% point
Decrease by 1% point
Increase by 1% point
Decrease by 1% point
December 31,
2013
December 31,
2012
(43,196)
50,652
51,133
(44,336)
(37,442)
44,120
44,367
(38,301)
The sensitivity analysis indicates the change in the amounts of defined benefit obligation when each
assumption changes without change in the remaining assumptions. The sensitivity of defined benefit
obligations is determined by the same methods as the projected unit credit method used in calculating net
defined benefit liability recognized in the statements of financial position.
(cid:71)
(9) Details of maturity analysis of retirement benefit paid, which is not discounted are as follows (Unit: Korean
Won in millions):
(cid:71)
Less than 1 year
1~2 years
2~5 years
5~10 years
Over 10 years
December 31,
2013
December 31,
2012
3,295
14,742
77,327
98,156
273,380
1,014
10,421
55,095
81,817
231,325
(10) Retirement benefit measured cost with respect to the defined contribution are as follows (Unit: Korean
Won in millions):
Severance benefits-defined contribution (*)
For the years ended December 31
2013
2,716
2012
2,196
(*) For the years ended December 31, 2013 and 2012, (cid:2936) 3 million and (cid:2936)14 million, respectively, which
are classified as profit and loss from discontinued operations, are included in the severance benefits-
defined contribution.
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25. OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES
Other financial liabilities and other liabilities are as follows (Unit: Korean Won in millions):
December 31, 2013 December 31, 2012
Other financial liabilities:
Accounts payable
Accrued expenses
Other financial liabilities (*)
Difference on discount for the present
value of the other financial liabilities
Borrowing from trust accounts
Deposits received
Agency business revenue
Domestic exchanges payable
Foreign exchanges remittances
Others on credit cards
Agency and others
Other liabilities:
Unearned income
Other miscellaneous liabilities
8,008,826
2,211,467
27,458
(2,651)
3,361,478
297,232
406,576
2,869,720
650,429
323
1,570,770
19,401,628
77,429
245,503
322,932
19,724,560
11,277,781
2,544,245
119,855
(1,428)
3,496,294
270,176
341,430
161,620
876,165
112,394
1,573,212
20,771,744
154,573
229,105
383,678
21,155,422
(*) In accordance with the creditor financial institutions committee agreement, the Group is to carry out a
payment of (cid:2936) 7,030 million to other creditor financial institutions, that is included here (Notes 10 and
40).
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26. DERIVATIVES
(1) Derivative assets and derivative liabilities are as follows (Unit: Korean Won in millions):
December 31, 2013
Assets
Notional
amount
For fair value
hedge
For
trading
For fair value
hedge
Liabilities
For cash flow
hedge
For
trading
Interest rate:
Futures
Swaps
Long options
Short options
Currency:
Futures
Forwards
Swaps
Long options
Short options
Equity:
Futures
Long options
Short options
Others:
31,722
122,337,394
737,963
2,722,963
(cid:1659)(cid:1659)
(cid:1659)(cid:1659)
1,404,267
28,550,832
19,642,395
642,132
644,770
(cid:1659)(cid:1659)
(cid:1659)(cid:1659)
54,126
464,827
1,065,422
(cid:1659)(cid:1659)
(cid:1659)(cid:1659)
-
131,386
-
-
-
-
-
-
-
-
24
-
-
996,464
11,355
-
-
346,554
713,975
51,496
-
-
54,749
-
Futures
Forwards
Swaps
Short options
660
12,607
160,429
8,346
178,480,855
-
-
-
-
131,410
-
268
2,496
-
2,177,357
-
13
-
-
-
-
-
-
-
-
-
1,772
-
-
-
-
1,785
-
2,656
-
-
-
1,025,354
-
8,570
-
-
-
-
-
-
-
-
-
368,681
655,134
-
8,391
-
-
27,173
-
-
-
-
2,656
-
507
2,356
49
2,096,215
December 31, 2012
Assets
Notional
amount
For fair value
hedge
For cash flow
hedge
For
trading
For fair value
hedge
Liabilities
For cash flow
hedge
For
trading
Interest rate:
Futures
Swaps
Long options
Short options
Currency:
Futures
Forwards
Swaps
Long options
Short options
Equity:
Futures
Long options
Short options
Others:
Forwards
Swaps
Long options
Short options
152,098
144,343,001
1,755,000
1,532,297
(cid:1659) (cid:1659)
(cid:1659) (cid:1659)
1,459,974
43,172,343
20,834,992
1,146,439
1,144,362
(cid:1659) (cid:1659)
(cid:1659) (cid:1659)
34,593
637,892
824,431
(cid:1659) (cid:1659)
(cid:1659) (cid:1659)
14,897
56,388
164,638
180,594
217,453,939
-
267,470
-
-
-
-
-
-
-
-
-
-
-
-
-
-
267,470
-
-
-
-
-
1,547,622
25,710
-
-
-
1,944
-
-
-
451,040
674,963
171,205
-
-
-
-
-
57,918
-
-
-
-
-
1,944
139
3,042
1,847
-
2,933,486
-
6,158
-
-
(cid:1659)(cid:1659)
(cid:1659)(cid:1659)
-
-
-
-
-
(cid:1659)(cid:1659)
(cid:1659)(cid:1659)
-
-
9,340
(cid:1659)(cid:1659)
(cid:1659)(cid:1659)
-
-
-
-
15,498
-
8,329
-
-
-
1,591,187
-
21,236
-
-
-
-
-
-
-
-
-
461,480
686,458
-
19,963
-
-
33,008
-
-
-
-
8,329
285
2,964
-
2,074
2,818,655
The above disclosure includes all derivatives regardless of the financial instrument categories. Derivatives held-
for- trading purpose classified into financial assets or liabilities at FVTPL (Notes 7 and 20) and derivatives for
hedging are stated as in a separate line item of the consolidated statements of financial position.
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The amounts of credit value adjustment (“CVA”) for the derivative assets are as follows (Unit: Korean Won in
millions):
Fair value of derivative assets
Derivative assets before CVA
Credit value adjustment
Fair value of derivative liabilities
Derivative liabilities before DVA
Debt value adjustment
December 31, 2013
December 31, 2012
2,389,145
(80,378)
2,308,767
2,101,584
(928)
2,100,656
3,397,920
(195,020)
3,202,900
2,842,482
-
2,842,482
(2) Gains or losses on valuation of derivatives are as follows (Unit: Korean Won in millions):
Purpose of fair value hedge
Hedged item
Gain on fair value hedges
Loss on fair value hedges
Hedging instrument
Gain on derivatives
Loss on derivatives
For the year ended
December 31, 2013
For the year ended
December 31, 2012
127,558
(13,505)
114,053
11,487
(119,776)
(108,289)
(cid:3)
43,879
(43,817)
62
39,232
(49,956)
(10,724)
27. DAY 1 PROFITS AND LOSSES
Changes in deferred day 1 profits and losses are as follows (Unit: Korean Won in millions):
Beginning balance
New transactions
Amounts recognized in net income
Ending balance
For the years ended December 31
2013
2012
3,178
6,999
(3,921)
6,256
4,570
1,817
(3,209)
3,178
Although no observable elements were available in active market to determine fair value of the financial
instruments, valuation techniques were utilized to determine fair value of such instruments. These financial
instruments are recorded at their fair values at the time of purchase even though there were differences noted on
the transaction price and fair value obtained from valuation techniques. The table above shows the differences
yet to be recognized in net income.
181
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28. CAPITAL STOCK, HYBRID EQUITY SECURITIES AND CAPITAL SURPLUS
(1) Capital stock, hybrid securities and capital surplus are as follows (Unit: Korean Won in millions):
Capital stock:
Common stock
Preferred stock
Hybrid equity securities
Capital surplus:
Capital in excess of par value
Other capital surplus
December 31, 2013 December 31, 2012
2,983,452
-
2,380,797
269,535
465,136
6,098,920
3,479,783
350,000
1,681,807
346,880
465,136
6,323,606
(2) The number of authorized shares is as follows (Unit: Korean Won in millions):
Authorized shares of capital stock
Par value
Issued shares of
Common stock
Preferred stock
December 31, 2013
3,000,000,000 shares
(cid:2936)
5,000
596,690,380 shares
shares
-
December 31, 2012
3,000,000,000 shares
(cid:2936)
5,000
695,956,580 shares
70,000,000 shares
(3) Changes in the number of issued shares are as follows (Unit: Number of stock):
Beginning
Credit card division spin-off
Convertible preferred stock
Ending
For the year ended December 31, 2013
Preferred stock
Common stock
70,000,000
695,956,580
(15,469,070)
(153,797,130)
(54,530,930)
54,530,930
-
596,690,380
(4) Hybrid equity securities classified as equity are as follows (Unit: Korean Won in millions):
(cid:71)
Issue date
Maturity
2008. 6. 20. 2038. 6. 20.
2009. 3. 31.
2039. 3. 31.
2013.4. 25. 2043.4. 25.
2013.11.13. 2043.11.13.
2037. 5. 2.
2007. 5. 2.
Interest
rates (%)
7.7
6.7
4.4
5.7
6.2
December 31,
2013
December 31,
2012
254,632
499,999
499,288
199,702
927,176
2,380,797
254,632
499,999
-
-
927,176
1,681,807
Local currency
Foreign currency
(cid:71)
The Group can exercise its right to early repayment after five or ten years after issuing hybrid equity
securities, and at the date of maturity, the contractual agreements allow the Group to indefinitely extend the
maturity date with the same contractual terms. If the Group makes a resolution not to pay the dividends of
common share at general meeting of shareholder, the Group is exonerated from interest payment on the
hybrid equity securities.
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(5) Details of capital surplus are as follows (Unit: Korean Won in millions):
Capital in excess of
Increase by issuance of preferred stock and
par value
common stock issue cost
Other capital surplus Increase by acquisition of banking segment of
formerly Peace Bank
Gain on disposal of subsidiary stock (formerly
December 31,
2013
December 31,
2012
269,535
346,880
31,903
31,903
Woori Investment Trust Management Co., Ltd.)
17,392
17,392
Loss on disposal of subsidiary stock (formerly
Woori Investment Securities Co., Ltd.)
Increase by merger with formerly Woori
Investment Bank Co., Ltd.
Increase by merger with formerly Woori Card
Increase by additional acquisition of interests in
P.T. Bank Woori Indonesia
(55,369)
(55,369)
138,682
330,395
2,133
465,136
734,671
138,682
330,395
2,133
465,136
812,016
29. OTHER EQUITY
Changes in other equity are as follows (Unit: Korean Won in millions):
For the year ended December 31, 2013
Beginning
balance
Increase (decrease)
on valuation (*)
Adjustments
(*)
Income tax
effect
Ending
balance
Gain (loss) on valuation of
AFS securities
Share of other comprehensive
gain (loss) on associates
Gain (loss) on valuation of cash
flow hedge
Gain (loss) on overseas business
translation and others
Re-measurement elements of
net defined benefit liability
207,776
(281)
(1,447)
(75,232)
(62,246)
68,570
17,778
(40,683)
2,738
187,609
1,392
636
(68,728)
9,007
(39,915)
-
811
-
(337)
-
774
-
16,429
(127,531)
-
(39,872)
(2,130)
16,700
(55,369)
5,483
Gain (loss) on valuation of AFS
securities
Share of other comprehensive
gain (loss) on associates
Gain (loss) on valuation of cash
flow hedge
Gain (loss) on overseas
(1,491)
(2,430)
business translation and others
(1,122)
Remeasurement elements of net
defined benefit liability
(13,420)
524,202
For the year ended December 31, 2012
Beginning
balance
Increase (decrease)
on valuation (*)
Adjustments
(*)
Income tax
effect
Ending
balance
542,665
74,826
(516,633)
106,918
207,776
1,597
983
(99,522)
(64,414)
(86,530)
-
-
-
(387)
(281)
-
(1,447)
25,412
(75,232)
-
(516,633)
15,588
147,531
(62,246)
68,570
(*) For the change in gain (loss) on valuation of AFS financial assets, increase(decrease) on valuation
represents the change from the valuation for the period, and reclassification adjustments show disposal
or recognition of impairment losses on AFS financial assets.
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30. RETAINED EARNINGS
(1) Changes in retained earnings are as follows (Unit: Korean Won in millions):
Legal
reserve
Legal reserve
Other legal reserve
December 31, 2013
1,434,455
72,878
1,507,333
December 31, 2012
1,406,364
63,016
1,469,380
Voluntary
reserve
Business rationalization reserve
Reserve for financial structure
8,000
8,000
improvement
Additional reserve
Regulatory reserve for credit loss
Revaluation reserve
Other voluntary reserve
Retained earnings before appropriation
1) Legal reserve
235,400
7,914,544
1,384,199
761,650
11,800
10,315,593
416,269
12,239,195
235,400
7,176,544
1,123,866
761,650
9,900
9,315,360
1,410,414
12,195,154
In accordance with the Act of Banking Law, legal reserve are appropriated at least one tenth of the
earnings after tax on every dividend declaration, not exceeding the paid in capital. This reserve may not
be used other than for offsetting a deficit or transferring to capital.
2) Other legal reserve
Other legal reserves were appropriated in the branches located in Japan, Vietnam and Bangladesh
according to the Banking laws of Japan, Vietnam and Bangladesh, and may be used to offset any deficit
incurred in those branches.
3) Business rationalization reserve
Pursuant to the Tax Exemption and Reduction Control Law, the Group was previously required to
appropriate, as a reserve for business rationalization, amounts equal to tax reductions arising from tax
exemptions and tax credits up to December 31, 2001. The requirement was no longer effective from
2002.
4) Reserve for financial structure improvement
In 2002, the Finance Supervisory Services recommended banks in Korea to appropriate at least ten
percent of net income after accumulated deficit for financial structure improvement, until simple capital
ratio equals 5.5 percent. This reserve is not available for payment of cash dividends; however, it can be
used to reduce a deficit or be transferred to capital.
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5) Additional reserve and other voluntary reserve
Additional reserve and other voluntary reserve were appropriated for capital adequacy and other
management purpose.
6) Regulatory reserve for credit loss
In accordance with Article 29 of the Regulation on Supervision of Banking Business (“RSBB”), if
provisions for credit loss under K-IFRS for the accounting purpose are lower than provisions under
RSBB, the Group discloses such short fall amount as regulatory reserve for credit loss.
(cid:26)(cid:12) Revaluation reserve(cid:3)
Revaluation reserve is the amount of limited dividends set by the board of directors to be the recognized
as complementary capital when the gain or loss occurred in the property revaluation by adopting K-
IFRS.
(cid:3)
(2) The changes in retained earnings for the years ended December 31, 2013 and December 31, 2012 are as
follows (Unit: Korean Won in millions):
Beginning balance
Net income attributable to shareholder
Dividend and others
Others
Credit card division spin-off
Ending balance
For the years ended December 31
2013
12,195,154
465,266
(309,478)
-
(111,747)
12,239,195
2012
11,298,984
1,496,246
(600,075)
(1)
-
12,195,154
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31. REGULATORY RESERVE FOR CREDIT LOSS
In accordance with Article 29 of the Regulation on Supervision of Banking Business (“RSBB”), if the estimated
provisions for credit loss under K-IFRS for the accounting purpose are lower than those in accordance with the
provisions under RSBB, the Group shall disclose the difference as the planned regulatory reserve for credit loss.
(1) Balance of the planned regulatory reserve for credit loss is as follows (Unit: Korean Won in millions):
Beginning
Planned reversal of regulatory reserve
(reverse) for credit loss
Ending
December 31,
2013
1,384,199
December 31,
2012
1,123,866
(133,862)
1,250,337
260,333
1,384,199
(2) Planned reserves provided, adjusted net income after the planned reserves provided and adjusted earnings
per share after the planned reserves provided are as follows (Unit: Korean Won in millions, except for
earnings per share amount):
Net income
Planned reversal of regulatory reserve
(reverse) for credit loss
Adjusted net income after the planned
reserves provided
Adjusted earnings per share after the planned
reserves provided
For the year ended
December 31, 2013
466,274
For the year ended
December 31, 2012
1,496,917
(133,862)
600,136
759
260,333
1,236,584
1,522
32. DIVIDENDS
Details of dividends and propensity to dividend are as follows (Unit: Korean Won in millions except for per
share amount):
Shares outstanding (million)
Par value (Won)
Capital stock
Number of shares issued (million)
Dividend per share (Won)
Total dividend
Dividend ratio per share
Net income
Dividend ratio by net income (*)
December 31, 2013
December 31, 2012
Common stock
Common
stock
Preferred
stock (*)
597
5,000
2,983,452
597
275
164,000
5.5%
466,274
35.2%
696
5,000
3,479,783
696
169
117,306
3.4%
1,496,917
7.8%
70
5,000
350,000
70
800
56,000
16.0%
1,496,917
3.7%
(*) Payout ratio of common stock after reflecting planned regulatory reserve for credit loss for the year
ended December 31, 2013 is 27.3%. And payout ratio of common stock and preferred stock after
reflecting planned regulatory reserve for credit loss for the year ended December 31, 2012 are 9.5%
and 4.5%, respectively.
186
woori bank
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33. NET INTEREST INCOME
Net interest income is calculated by deducting interest expenses from interest income and its detail is as follows:
(1) Interest income recognized is as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2013
For the year ended
December 31, 2012
Financial asset at FVTPL:
Interest of securities:
Securities in local currency
Interest of other assets
Sub-total
AFS financial asset:
Interest of securities in local currency:
Interest of government bonds
Interest of finance debentures
Interest of debentures
Interest of beneficiary certificate
Interest of other securities
Interest of securities in foreign currencies
Sub-total
HTM financial asset:
Interest of securities in local currency:
Interest of government bonds
Interest of finance debentures
Interest of debentures
Interest of securities in foreign currencies
Sub-total
Loans and receivables:
Interest on due from banks:
Interest on due from banks in local currency
Interest on due from banks in foreign currencies
Sub-total
Interest of loans:
Interest on loans in local currency
Interest on loans in foreign currencies
Interest on domestic usance bills
Interest on off-shore loans
Interest on inter-bank loans
Interest on call loans
Interest on bills bought
Interest on foreign currencies
Interest on payment for acceptances and guarantees
Interest on bonds purchased under repurchase
agreements
Interest on privately placed bonds
Interest of other loans
Sub-total
Interest of other assets
Sub-total
Total
95,837
11,548
107,385
110,198
170,812
85,920
-
-
6,288
373,218
208,472
72,413
200,817
1,813
483,515
75,627
36,156
111,783
7,245,640
356,136
51,684
606
7,561
72,692
3,255
87,493
4,458
103,182
48,697
21,374
8,002,778
51,654
8,166,215
9,130,333
245,537
76,601
322,138
130,800
149,090
89,697
555
1
7,279
377,422
237,566
135,326
232,188
3,466
608,546
54,407
45,195
99,602
8,118,828
411,106
55,711
615
22,119
68,718
12,257
130,811
2,277
127,230
67,422
11,575
9,028,669
74,590
9,202,861
10,510,967
Interest income accrued from impaired loan is (cid:2936)135,914 million and (cid:2936)86,086 million for the years ended
December 31, 2013 and December 31, 2012, respectively.
187
2013 ANNUAL REPORT
- 101 -
(2) Interest expenses recognized are as follows (Unit: Korean Won in millions):
Interest of deposits:
Interest on demand deposits in local currency
Interest on money trust
Interest on saving deposits in local currency
Interest on mutual installment
Interest on certificate of deposits
Interest on other deposits
Interest on deposits in foreign currencies
Sub-total
Interest of borrowings:
Interest on borrowings in local currency
Interest on borrowings in foreign currencies
Interest on call money
Interest on bonds sold under repurchase
agreements
Interest on bills sold
Sub-total
Interest of debentures:
Interest on debentures in local currency
Interest on debentures in foreign currencies
Others
Sub-total
Total
For the year ended
December 31, 2013
For the year ended
December 31, 2012
38,230
17,116
3,390,511
2,217
64,789
25,355
108,126
3,646,344
131,616
49,686
36,475
17,156
2,328
237,261
481,809
210,443
692,252
134,599
4,710,456
26,894
30,827
4,161,808
2,762
24,275
149,259
110,891
4,506,716
131,194
93,312
60,532
24,480
2,429
311,947
588,953
223,266
812,219
105,666
5,736,548
188
woori bank - 102 -
34. NET FEES AND COMMISSIONS INCOME
(cid:71)
Net fees and commissions income is calculated by deducting fees and commissions expenses from fees and
commissions income and their details are as follows:
(1) Details of fees and commissions income occurred is as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2013
For the year ended
December 31, 2012
Commission received:
Commission received in local currency
Commission received in foreign currencies
Sub-total
Commission fees
Commission received on project financing
Commission received on credit card:
Credit card in foreign currencies
Debit card
Sub-total
CMA management charges
Commission received on securities
Other commission received
Commission received on trust business
Total
569,091
176,921
746,012
91,312
12,697
185
844
1,029
789
62,716
24,310
35,695
974,560
542,604
192,072
734,676
110,491
23,510
136
764
900
4,451
62,925
15,989
31,493
984,435
(2) Details of fees and commissions expenses occurred are as follows (Unit: Korean Won in millions):
Commission expenses:
Commission expenses in local currency
Commission expenses in foreign currencies
Sub-total
Commission expenses on credit card:
Debit card
Sub-total
Commission expenses on securities
Commission expenses on other
Commission expenses on trust business
Total
For the year ended
December 31, 2013
For the year ended
December 31, 2012
79,768
29,947
109,715
962
962
76
48,651
1,991
161,395
62,136
28,510
90,646
832
832
72
53,966
1,800
147,316
35. DIVIDEND INCOME
Details of dividend income recognized are as follows (Unit: Korean Won in millions):
Financial assets at FVTPL:
Dividend income in local currency
AFS financial assets:
Dividend in local currency
Dividend in foreign currencies
Sub-total
Total
For the year ended
December 31, 2013
For the year ended
December 31, 2012
7,249
6,031
60,398
12,257
72,655
79,904
81,814
3,668
85,482
91,513
189
2013 ANNUAL REPORT
- 103 -
36. GAINS OR LOSSES RELATED TO FINANCIAL ASSETS AT FVTPL
(1) Details of gains or losses related to financial assets at FVTPL are as follows (Unit: Korean Won in
millions):
Gains and losses on financial assets held for trading
Gains and losses on financial assets designated at FVTPL
Total
For the year ended
December 31, 2013
127,595
(5,416)
122,179
For the year ended
December 31, 2012
(325,875)
(35,064)
(360,939)
(2) Details of gains or losses on financial assets held-for-trading are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2013
For the year ended
December 31, 2012
Gain (loss) on securities:
Gain on disposals of securities in local currency
Loss on disposals of securities in local currency
Sub-total
Gain on transactions of securities in local currency
Loss on transactions of securities in local currency
Gain on transactions of securities in foreign currencies
Sub-total
Gain on valuation of securities in local currency
Loss on valuation of securities in local currency
Sub-total
Gain (loss) on securities sub-total
Gain (loss) on derivatives (for trading):
Gain on transactions and valuation of derivatives:
Gain on interest rates derivatives
Loss on interest rates derivatives
Sub-total
Gain on currencies derivatives
Loss on currencies derivatives
Sub-total
Gain on equity derivatives
Loss on equity derivatives
Sub-total
Gain on other derivatives
Loss on other derivatives
Sub-total
Gain (loss) on derivatives sub-total
Gain (loss) on other financial instruments:
Gain on transactions of other financial instruments
Loss on transactions of other financial instruments
Sub-total
Gain on valuation of other financial instruments
Loss on valuation of other financial instruments
Sub-total
Gain on other financial instruments sub-total
Total
190
322
(1,570)
(1,248)
43,657
(56,937)
171
(13,109)
6,961
(30,187)
(23,226)
(37,583)
1,288,476
(1,287,114)
1,362
3,574,930
(3,400,446)
174,484
59,175
(70,642)
(11,467)
14,044
(13,408)
636
165,015
829
(350)
479
6,296
(6,612)
(316)
163
127,595
438
(643)
(205)
82,171
(47,598)
258
34,831
19,881
(22,736)
(2,855)
31,771
1,123,851
(1,152,436)
(28,585)
4,172,713
(4,523,494)
(350,781)
88,315
(66,399)
21,916
46,858
(47,670)
(812)
(358,262)
1,193
(619)
574
1,304
(1,262)
42
616
(325,875)
woori bank
- 104 -
(3) Details of gains or losses of financial instrument at FVTPL are as follows (Unit: Korean Won in millions):
Gain (loss) on compound financial instrument:
Loss on disposals of compound financial instrument
Loss on valuation of compound financial instrument
Sub-total
Gain (loss) on other financial instruments:
Gain on disposals of other financial instruments
Gain (loss) on valuation of other financial instruments
Sub-total
Total
For the year ended
December 31, 2013
For the year ended
December 31, 2012
(7,842)
(625)
(8,467)
-
3,051
3,051
(5,416)
(12,665)
(22,326)
(34,991)
-
(73)
(73)
(35,064)
37. GAINS OR LOSSES ON AFS FINANCIAL ASSETS
Details of gains or losses on AFS financial assets recognized are as follows (Unit: Korean Won in millions):
Gain on transaction of securities:
Gain on redemptions of securities in local currency
Gain on redemptions of securities in foreign currency
Gain on transactions of securities in local currency
Gain on transactions of securities in foreign currencies
Sub-total
Impairment loss:
Securities in local currency
Securities in foreign currencies
Sub-total
Total
For the year ended
December 31, 2013
For the year ended
December 31, 2012
43
-
46,006
15,315
61,364
(139,224)
(2,305)
(141,529)
(80,165)
76
-
646,147
514
646,737
(92,017)
(6,046)
(98,063)
548,674
38. GAIN (LOSS) ON HTM FINANCIAL ASSETS
There is no gain or loss on HTM financial assets for the years ended December 31, 2013 and December 31, 2012,
respectively. In addition, details of interest income of HTM financial assets are stated in note 33.
191
2013 ANNUAL REPORT - 105 -
39. IMPAIRMENT LOSS FOR LOANS, OTHER RECEIVABLES, GUARANTEES AND UNUSED
COMMITMENTS
Impairment losses for loans, other receivables, guarantees and unused commitments are as follows (Unit: Korean
Won in millions):
Loans:
Bad debt expenses
Reversal of provision for loan losses
and receivables
Sub-total
Guarantees:
Provision for guarantees
Reversal of provision for guarantees
Total
Commitments:
Provision for unused commitments
Reversal of provision for unused
commitments
Total
Sub-total
Total
For the year ended
December 31, 2013
For the year ended
December 31, 2012
(2,023,824)
(1,698,226)
25,462
(1,998,362)
42,436
(1,655,790)
(95,400)
1,998
(93,402)
(51,870)
77,087
25,217
-
(21,221)
12,156
12,156
(81,246)
(2,079,608)
2,543
(18,678)
6,539
(1,649,251)
192
woori bank
- 106 -
40. GENERAL AND ADMINISTRATIVE EXPENSES AND NET OTHER OPERATING INCOME
(EXPENSE)
(1) Details of general and administrative expenses are as follows (Unit: Korean Won in millions):
Salaries
Short-term salaries
Short-term salaries- employee benefits
Severance benefits-defined benefit
Severance benefits- defined contribution
Termination
Sub-total
Depreciation
Other general and
administrative
expenses
Reimburse
Travel
Operating promotion expenses
Rent
Maintenance
Advertising expenses
Taxes and dues
Insurance
Computer related expenses
Service fees
Communications
Printings
Water, light and heating
Supplies
Vehicle maintenance
Other expenses
Others
Sub-total
For the year ended
December 31, 2013
For the year ended
December 31, 2012
1,021,498
321,630
86,892
2,182
54,897
1,487,099
1,074,633
325,198
107,785
2,713
53,016
1,563,345
131,333
14,699
6,243
42,012
212,801
12,627
40,926
101,390
3,299
242,257
198,112
36,783
9,227
15,007
6,257
10,826
305
31,577
984,348
128,928
16,048
7,142
47,971
204,514
13,034
35,638
102,367
3,126
241,156
189,962
39,500
10,711
14,536
6,668
10,878
524
30,985
974,760
Total
2,679,026
2,590,787
193
2013 ANNUAL REPORT - 107 -
(2) Details of net other operating income (expenses) recognized are as follows (Unit: Korean Won in millions):
Other operating income
Other operation expenses
For the year ended
December 31, 2013
3,039,497
(3,171,391)
(131,894)
For the year ended
December 31, 2012
2,648,575
(2,847,871)
(199,296)
(3) Details of other operating income recognized are as follows (Unit: Korean Won in millions):
Gain on transactions of foreign exchange
Gain on derivatives (for hedging)
Gain on fair value hedging derivatives
Gain on disposals of loans
Gain on trusts
Others (*)
Total
For the year ended
December 31, 2013
2,536,678
11,487
127,558
95,139
246
268,389
3,039,497
For the year ended
December 31, 2012
2,394,423
39,232
43,879
75,135
1,161
94,745
2,648,575
(*) As of December 31, 2013, (cid:2936)215,845 million that the Group is to receive from other financial
institutions is included in accordance with the agreement of financial institutions council (Notes 10 and
25).
(4) Details of other operating expenses are as follows (Unit: Korean Won in millions):
Loss on transactions of foreign exchange
Loss on derivatives (for hedging)
Loss on fair value hedging derivatives
Deposit insurance premium
Contribution to miscellaneous funds
Export bond insurance fees
Loss on disposals of loans
Other expenses (*)
Total
For the year ended
December 31, 2013
2,400,182
119,776
13,505
234,763
326,626
109
22,255
54,175
3,171,391
For the year ended
December 31, 2012
1,996,863
49,956
43,817
220,941
310,300
136
127,656
98,202
2,847,871
(*) Expenses related to (cid:2936)35,085 million which the Group is to carry out a payment to other creditor
financial institutions is included in accordance with the creditor financial institutions committee
agreement (Notes 10 and 25).
194
woori bank
- 108 -
41. NON-OPERATING INCOME (EXPENSES)
(1) Details of gain (loss) on valuation of investments in associates are as follows (Unit: Korean Won in
millions):
Gain on valuation of investments in associates
Loss on valuation of investments in associates
Total
For the year ended
December 31, 2013
31,070
(28,730)
2,340
For the year ended
December 31, 2012
38,815
(11,389)
27,426
(2) Details of other non-operating income (expenses) are as follows (Unit: Korean Won in millions):
Other non-operating income
Other non-operating expenses
Total
For the year ended
December 31, 2013
138,778
(87,722)
51,056
For the year ended
December 31, 2012
117,768
(92,072)
25,696
(3) Details of other non-operating income are as follows (Unit: Korean Won in millions):
Gain on disposal of investments in associates
Rental fee income
Gain on transactions of other assets
Reversal of impairment of other assets
Gain on restoration
Others
Total
For the year ended
December 31, 2013
19,974
16,368
8,717
46
100
93,573
138,778
For the year ended
December 31, 2012
25,102
16,019
1,549
356
224
74,518
117,768
(4) Details of other non-operating expenses are as follows (Unit: Korean Won in millions):
Loss on disposal of investments in subsidiaries
and associates
Loss on disposals of other assets
Loss on valuation of other assets
Donation
Loss on restoration
Depreciation of investment properties
Interest expenses of rent leasehold deposits
Expenses on collecting of charge-offs special
bonds
Others
Total
For the year ended
December 31, 2013
For the year ended
December 31, 2012
4,464
642
937
47,774
714
3,414
1,954
4,347
23,476
87,722
167
346
1,322
63,163
528
3,437
2,551
4,499
16,059
92,072
195
2013 ANNUAL REPORT
- 109 -
42. INCOME TAX EXPENSE
(1) Details of income tax expense are as follows (Unit: Korean Won in millions):
Current income tax payable
Adjustment recognized in the period for current tax of prior periods
Changes in deferred income taxes due to temporary differences
Changes in deferred income taxes directly in equity
Others
Income tax expense
Income tax expense from continuing operations
Income tax expense from discontinued operations
For the years ended December 31
2013
2012
60,942
(7,502)
25,051
12,046
(96)
90,441
81,030
9,411
411,199
(23,811)
(192,395)
146,511
-
341,504
260,713
80,791
(2)
Income tax reconciled from net income is as follows (Unit: Korean Won in millions):
For the years ended December 31
Net income before income tax
Income from continuing operations before income
taxes
Income before income taxes from discontinued
operations
Tax calculated at statutory tax rate (*)
Adjustments:
Effect of non-taxable income
Effect of non-deductible expenses
Consolidated tax return
Adjustment recognized in the period for current tax of
prior periods
Others
Income tax expense
Income tax expense from continuing operations
Income tax expense from discontinued operations
Effective tax rate from continuing operations
Effective tax rate from discontinued operations
2013
556,715
517,828
38,887
134,263
(29,303)
11,963
(15,969)
(7,502)
(3,011)
90,441
81,030
9,411
15.6%
24.2%
2012
1,838,421
1,504,574
333,847
444,436
(60,296)
28,301
(40,631)
(23,811)
(6,495)
341,504
260,713
80,791
17.3%
24.2%
(*) 2013 tax rates: The corporate tax rate is 11 percent up to (cid:2936)200 million, 22 % over (cid:2936)200 million to
(cid:2936)20 billion and 24.2 % over (cid:2936)20 billion.
196
woori bank
- 110 -
(3) Changes in cumulative temporary differences for the years ended December 31, 2013 and 2012 are as
follows (Unit: Korean Won in millions):
Gain (loss) on valuation of financial assets at FVTPL
Gain (loss) on valuation of investments in associates
Gain (loss) on valuation of derivatives
Gain (loss) on valuation of compound financial
instrument
Accrued income
Depreciation and amortization
Provisions for credit losses
Write-off of loans
Deferred loan origination costs and fees
Accrued expenses
Retirement benefit obligation
Plan assets
Provisions for guarantees
Other provision
Loss (gain) on valuation of debentures
Provision for advanced depreciation
Gain (loss) on valuation of AFS securities
Gain (loss) on overseas business translation
Others
Net deferred tax assets (liabilities)
Gain (loss) on valuation of financial assets at FVTPL
Gain (loss) on valuation of investments in associates
Gain (loss) on valuation of derivatives
Gain (loss) on valuation of compound financial
instrument
Accrued income
Depreciation and amortization
Provisions for credit losses
Write-off of loans
Deferred loan origination costs and fees
Accrued expenses
Retirement benefit obligation
Plan assets
Provisions for guarantees
Other provision
Loss (gain) on valuation of debentures
Provision for advanced depreciation
Gain (loss) on valuation of AFS securities
Gain (loss) on overseas business translation
Other capital surplus
Others
Net deferred tax assets (liabilities)
For the year ended December 31, 2013
Beginning
balance
215,863
34,483
(72,737)
Piecemeal
9,253
-
-
(1,748)
(67,383)
(973)
(13,590)
8,439
(55,887)
39,535
76,702
(64,201)
75,382
37,969
70,759
(20,878)
(69,530)
24,287
(150,611)
65,881
-
-
(128)
-
-
-
-
(493)
465
(91)
(19,641)
-
-
4,654
-
(18,359)
(24,340)
Recognized as
income(loss)
2,089
51,148
35,745
(1,351)
1,697
707
(58,427)
(417)
(15,946)
(4,347)
23,912
(32,522)
16,044
4,322
(35,875)
-
-
-
(23,876)
(37,097)
Recognized as
other
comprehensive
income(loss)
-
(337)
-
-
-
-
-
-
-
-
(2,130)
-
-
-
-
-
(1,916)
16,429
-
12,046
For the year ended December 31, 2012
Ending
balance
227,205
85,294
(36,992)
(3,099)
(65,686)
(394)
(72,017)
8,022
(71,833)
35,188
97,991
(96,258)
91,335
22,650
34,884
(20,878)
(66,792)
40,716
(192,846)
16,490
Beginning
balance
213,203
26,341
(147,836)
Recognized as
income(loss)
2,660
8,529
75,099
(7,395)
(64,657)
(4,337)
(14,490)
9,092
(37,645)
39,998
42,634
(42,634)
60,156
32,714
75,702
(20,878)
(173,688)
(1,125)
(511)
(111,158)
(126,514)
5,647
(2,726)
3,364
900
(653)
(18,242)
(463)
18,480
(21,567)
15,226
5,255
(4,943)
-
-
-
-
(40,682)
45,884
Recognized as
other
comprehensive
income(loss)
Ending
balance
-
(387)
-
-
-
-
-
-
-
-
15,588
-
-
-
-
-
104,158
25,412
511
1,229
146,511
215,863
34,483
(72,737)
(1,748)
(67,383)
(973)
(13,590)
8,439
(55,887)
39,535
76,702
(64,201)
75,382
37,969
70,759
(20,878)
(69,530)
24,287
-
(150,611)
65,881
197
2013 ANNUAL REPORT
- 111 -
(4) Unrealizable temporary differences are as follows (Unit: Korean Won in millions):
Temporary differences on hybrid equity securities
Others
Total
December 31, 2013
(2,588,862)
6,365
(2,582,497)
December 31, 2012
(1,889,873)
6,365
(1,883,508)
(5) Details of deferred tax relating to items that are recognized directly in equity are as follows (Unit: Korean
Won in millions):
Gain (loss) on valuation of AFS securities
Gain(loss) on valuation of investments in associates
Gain (loss) on overseas business translation
Actuarial loss
Total
December 31, 2013
(66,793)
(247)
40,715
17,743
(8,582)
December 31, 2012
(69,531)
90
24,286
19,873
(25,282)
(6) Current tax assets and liabilities are as follows (Unit: Korean Won in millions):
Current tax assets
Current tax liabilities
December 31, 2013
136,713
8,889
December 31, 2012
2,354
136,517
(7) Deferred tax assets and liabilities are as follows (Unit: Korean Won in millions):
Deferred tax assets
Deferred tax liabilities
Net deferred tax liabilities
December 31, 2013
61,764
(45,274)
16,490
December 31, 2012
82,580
(16,699)
65,881
198
woori bank
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43. EARNINGS PER SHARE (“EPS”)
(1) Basic EPS is calculated by dividing net income by weighted average number of common shares outstanding
(Unit: Korean Won in millions, except for per share data)
Net income attributable to common shares:
Net income attributable to the controlling equity
Dividend on preferred stock
Dividend on hybrid equity securities
Profit used in calculation of continuing operations income
Profit used in calculation of discontinued operations income
Weighted average number of common shares outstanding
Basic EPS
Continuing operations
Discontinued operations
For the year ended
December 31, 2013
For the year ended
December 31, 2012
465,266
-
(136,172)
329,094
299,618
29,476
611
539
490
49
1,496,246
(56,000)
(121,022)
1,319,224
1,066,168
253,056
696
1,895
1,532
363
(2) Diluted EPS is calculated by reflecting the dilution effect to net income (Unit: Korean Won in millions,
except for per share amounts)
Diluted net income:
Net income attributable to common shares
Dilution effect of convertible preferred stock
Profit used in calculation of continuing
operations income
Profit used in calculation of discontinued
operations income
Weighted average number of share for
diluted EPS (million shares)
Weighted average number of common
shares outstanding (million shares)
Convertible preferred stock (million shares)
Diluted EPS
Continuing operations
Discontinued operations
For the year ended
December 31, 2013
For the year ended
December 31, 2012
329,094
-
329,094
299,618
29,476
638
611
27
516
470
46
1,319,224
56,000
1,375,224
1,122,168
253,056
766
696
70
1,795
1,465
330
Diluted EPS is calculated by adjusting the assumption that all of dilutive potential common shares are converted
to common shares, used for the weighted average number of share calculation. The dilutive potential common
shares are convertible preferred stock, and to calculate diluted EPS, it is assumed that convertible preferred
stocks convert to common shares and the relate dividend is added to net income on common shares. In addition,
it is assumed that convertible preferred stocks are converted to common shares during the year ended December
31, 2013. There was no dividend on preferred stock as of December 31, 2013.
199
2013 ANNUAL REPORT
- 113 -
44. CONTINGENT LIABILITIES AND COMMITMENTS
(1) Details of guarantees which the Group has provided to others are as follows (Unit: Korean Won in
millions):
Confirmed guarantees:
Guarantees for loans
Acceptances
Guarantees in acceptances of imported goods
Other confirmed guarantees
Unconfirmed guarantees:
Local letters of credit
Letters of credit
Other unconfirmed guarantees
December 31,
2013
December 31,
2012
144,967
837,129
151,327
7,982,961
9,116,384
661,612
4,655,998
1,779,210
7,096,820
89,725
572,353
110,171
8,412,324
9,184,573
773,385
5,428,310
2,368,781
8,570,476
Commercial paper purchase commitments and
others
1,924,176
18,137,380
1,956,447
19,711,496
(2) Details of loan commitments and the other commitments which the Group provided for others are as
follows (Unit: Korean Won in millions):
Loan commitments in local currency
Loan commitments in foreign currencies
Securities purchase contract
Non-recourse endorsement notes
December 31,
2013
41,849,043
23,195,943
1,442,603
-
66,487,589
December 31,
2012
64,368,276
21,857,955
1,394,165
4,812,500
92,432,896
(3) Details of guarantees and the related provisions for guarantees are as follows (Unit: Korean Won in
millions):
Confirmed guarantees
Unconfirmed guarantees
Commercial paper purchase commitments
and others
December 31,
2013
9,116,384
7,096,820
December 31,
2012
9,184,573
8,570,476
1,924,176
18,137,380
1,956,447
19,711,496
Provisions for guarantees
Ratio of provisions to total guarantees
501,662
2.77%
405,729
2.06%
200
woori bank
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(4) Both the Group and Woori Card Co., Ltd., which is the newly established credit card company by spin-off
from the Group during the current fiscal year, are responsible for the remaining liabilities that arose from
the conditions existing before the spin-off date (as of March 31, 2013).
(5) Litigation case
The Group has filed and faced lawsuits as follows (Unit: Korean Won in millions):
Number of cases
Amount of litigation
Provisions for litigations
Number of cases
Amount of litigation
Provisions for litigations
December 31, 2013
As plaintiff (*)
84 case
1,185,147
As defendant
311 case
441,370
20,498
December 31, 2012
As plaintiff (*)
397 case
1,374,529
As defendant
335 case
538,672
10,203
(*) The minor lawsuits in relation to the collection or management of loans are excluded from the number
of cases.
The domestic banks refused to refund the cost to put up collateral security to the customers which were
determined and mediated by Korean Consumer Agency. In this regard, the Group was filed 68 lawsuits as of
December 31, 2013 and further more lawsuits are expected. The expected outflow of resources of the Group is
not likely to be high therefore the Group has not set up any provision for these litigations.
(6) For the year ended December 31, 2013, the Supreme Court ruled about ‘Ordinary wages.’ The Group
reviewed the impact of the rule on the consolidated financial statements of the Group as of December 31,
2013. The Group believed that the rule has no impact on the consolidated financial statements of the Group,
therefore it has not set up any provision related to ‘ordinary wage.’
201
2013 ANNUAL REPORT
- 115 -
45. RELATED PARTY TRANSACTIONS
Related parties of the Group and assets and liabilities recognized and major transactions with related parties
during the current and prior period are as follows:
(1) The related parties of the Group as of December 31, 2013 are as follows:
Ultimate controlling
party (Government
related entity)
Parent
Associates
Others
Korea Deposit Insurance Corporation (“KDIC”)
Related parties
Woori Finance Holdings Co., Ltd. (“WFH”)
Kumho Tires Co., Ltd., Woori Blackstone Korea Opportunity Private Equity Fund 1, Woori
Private Equity Fund, United PF 1st Corporate Financial Stability, Ansang Tech Co., Ltd., Samho
International Co., Ltd., Woori Service Networks Co., Ltd., Force TEC Co., Ltd., Hana
Engineering & Construction Co., Ltd., Phoenix Digital Tech Co., Ltd., Chin Hung International
Inc., Korea Credit Bureau Co., Ltd., Poonglim Industrial Co., Ltd., Korea Finance Security Co.,
Ltd., STX Engine Co,. Ltd.
Kyongnam Bank, Kyongnam Bank Principal Guaranteed Trust, Kyongnam Bank Principal and
Interest Guaranteed Trust, Kwangju Bank, Kwangju Bank Principal Guaranteed Trust, Kwangju
Bank Principal and Interest Guaranteed Trust, Woori Investment Bank, WR Co., Ltd., DKT CO.,
LTD., MARS Second Private Equity Fund, Woori Investment Advisory Co., Ltd., (Beijing),
Seoul Lakeside CC Inc., Woori Finance Research Institute, WFH Savings Bank, Woori FIS Co.,
Ltd., Woori New Alpha fund, Woori Renaissance Holdings Co., Ltd., Woori Futures, Woori
Aviva Life Insurance Co., Ltd., Woori Asset Management Co., Ltd., Woori F&I Co., Ltd., Woori
EL Co., Ltd., Woori Asset Management Co., Ltd,, Woori Giant First Co., LLC., Woori Card,
Woori Columbus 1 Special Purpose Entity, Woori Investment & Securities Principal Guaranteed
Trust, Woori Investment & Securities Co., Ltd., Woori Financial Co., Ltd., Woori Private
Equity Company, Ltd, UP Chemical Co., Ltd., Chungdo Woori Century Security Co., Ltd.,
Kofc Woori Growth Champ Private Equity Fund, LG Investment Holding B.V.(Amsterdam)
GG, Sahn Eagles LLC, Two Eagles LLC, Woori Absolute Asia Global Opportunity Fund, Woori
Absolute Partners PTE LTD., Woori Absolute Return Investment Strategies Fund, Woori CBV
Securities Corporation, Woori Investment Asia PTE LTD., Woori Investment Securities (H.K.)
LTD., Woori Investment Securities America INC., Woori Investment Securities Int'l LTD.,
Woori Korindo Securities Indonesia, Woori Heritage Long-short PEF 1st and 19 beneficiary
certificates, Hybrid 1st Specialty Inc. and 68 SPCs.
202
woori bank
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(2) Assets and liabilities from transactions with related parties are as follows (Unit: Korean Won in millions):
Related party
Ultimate controlling party
(Government related
entity)
KDIC
Parent
(cid:1659)
WFH
Associates
Kumho Tires Co., Ltd.
Accounts
Other assets
Deposits
Other liabilities
Loans
Other assets
Deposits
Other liabilities
Loans
Provision for credit loss
Other assets
Deposits
Other liabilities
Korea Credit Bureau
Co., Ltd.
Woori Private Equity
Fund and subsidiaries
Korea Finance Security
Co., Ltd.
Loans
Deposits
Other liabilities
Other assets
Deposits
Other liabilities
Loans
Deposits
Other liabilities
Woori Service Networks
Co., Ltd.
Loans
Provision for credit loss
Deposits
Other liabilities
United PF 1st Corporate
Financial Stability
Deposits
Other liabilities
Chin Hung
International Inc.
Poonglim Industrial
Co., Ltd.
Phoenix Digital Tech
Co., Ltd.
Ansang Tech Co., Ltd.
Samho International
Co., Ltd.
Force TEC Co., Ltd.,
Hana Engineering &
Construction Co., Ltd.
Loans
Provision for credit loss
Deposits
Other liabilities
Loans
Provision for credit loss
Deposits
Other liabilities
Loans
Provision for credit loss
Deposits
Other liabilities
Loans
Provision for credit loss
Other assets
Loans
Provision for credit loss
Deposits
Other liabilities
Loans
Provision for credit loss
Deposits
Loans
Provision for credit loss
Deposits
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
December 31,
2013
December 31,
2012
790,701
807,163
3,898
-
134,830
72,670
25,826
356,764
(35,944)
45,669
57,855
90
-
4,029
101
5
5,559
2
-
4,070
15
-
-
2,642
50
38
-
45,994
(39,639)
1,073
1
36,874
(266)
15,508
39
1,209
(72)
495
11
223
(142)
10
51,896
(33,024)
149,685
89
46,421
(27,035)
297
169
(169)
903
610,872
344,653
2,182
241
20,829
206,137
167,849
399,282
(33,510)
49,397
58,298
61
2
2,003
22
9
1,678
3
60
4,225
20
19
(1)
1,645
207
9,003
72
37,788
(30,315)
988
4
43,394
(416)
4,558
70
1,502
(296)
8
-
-
-
-
-
-
-
-
-
-
-
-
-
-
203
2013 ANNUAL REPORT
Related party
STX Engine Co,. Ltd.
Woori Investment &
Securities Co., Ltd.
and subsidiaries
Kyongnam Bank and
subsidiaries
Kwangju Bank and
subsidiaries
Woori F&I Co., Ltd.
and subsidiaries
Woori Private Equity
and subsidiaries
(cid:1659)
Other subsidiaries of
WFH
(cid:1659)
- 117 -
Accounts
Loans
Provision for credit loss
Deposits
Other liabilities
Loans
Provision for credit loss
Other assets
Deposits
Borrowings
Other liabilities
Other assets
Deposits
Borrowings
Other liabilities
Loans
Other assets
Deposits
Borrowings
Other liabilities
Loans
Provision for credit loss
Other assets
Deposits
Other liabilities
Loans
Provision for credit loss
Other assets
Deposits
Borrowings
Other liabilities
Loans
Provision for credit loss
Other assets
Deposits
Borrowings
Other liabilities
Associates of
Woori F&I Co., Ltd. Other liabilities
Deposits
Associates of
Woori Private Equity
Woori Aviva Life
Insurance Co., Ltd.
Loans
Provision for credit loss
Deposits
Other liabilities
Loans
Provision for credit loss
Deposits
Other liabilities
December 31,
2013
December 31,
2012
104,557
(10,935)
6,023
99
-
-
-
329,921
8,162
142,711
135,861
8,029
-
131,127
229
12,693
24,566
27,851
5,681
-
-
5
41,758
277
-
-
-
8,103
-
30
50,000
(367)
16,819
85,121
1,000
39,149
846
-
-
-
26,014
275
-
-
6,807
241
-
-
-
-
1,523
(472)
5,976
1,404,084
7,555
131,166
105,707
6,286
167
171,415
229
11,971
8,801
26,021
4,155
73
(1)
5
50,444
340
20,050
(1,443)
16,527
19,187
1,000
10,748
50,682
(286)
509
33,292
-
49,704
23,459
16
11,696
(149)
14,505
187
399
(5)
132
280
Associates(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
Others
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
204
woori bank
- 118 -
(3) Details of money transactions with related parties are as follows (Unit: Korean Won in millions):
For the year ended December 31, 2013
Related party
Associates
Others
Loan (*1)
Borrowing (*2)
Increase
Decrease
Increase
Decrease
Capital contribution
in cash
92,136
213
(158,050)
(20,213)
-
5,869
-
(5,090)
-
-
For the year ended December 31, 2012
Related party
Associates
Others
Loan (*1)
Borrowing (*2)
Increase
Decrease
Increase
Decrease
Capital contribution
in cash
128,375
1,498
(512,729)
(1,498)
-
-
-
(8,036)
-
-
(*1) The amounts do not include short term financial instruments transaction such as call loans and others.
(*2) The amounts do not include deposits due to customer and short term financial instruments transaction
such as call money and others.
(4) Gain or loss from transactions with related parties are as follows (Unit: Korean Won in millions):
Related party
KDIC
Ultimate controlling
party
(Government related
entity)
Accounts
Interest income
Interest expenses
Reversal of provision for
credit loss
Parent
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
Associates
WFH
Kumho Tires Co., Ltd.
.
Fees income
Other income
Interest expenses
Fees expenses
Other expenses
Interest income
Fees income
Other income
Interest expenses
Bad debt expenses
For the years ended December 31
2013
26,000
7,967
(65)
25
1,627
5,844
44,156
264
1,008
6
3,488
408
2012
30,544
4,301
(281)
-
2,273
10,983
48,987
183
1,011
7
22,661
114
(Reversal of provision for
credit loss)
2,433
(17,957)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
Korea Finance Security
Co., Ltd.
Interest expenses
Reversal of provision for
Korea Credit Bureau
Co., Ltd.
Woori Service
Networks Co., Ltd.
credit loss
Interest expenses
Other income
Interest expenses
Reversal of provision for
credit loss
United PF 1st Corporate
Financial Stability
Interest expenses
Woori Private Equity
Fund
Fees income
Interest expenses
99
-
112
22
69
(1)
34
11
44
110
(1)
70
15
60
-
73
21
49
Chin Hung International
Inc.
Fees income
Interest expenses
Bad debt expenses
1
98
9,324
1
44
30,315
205
2013 ANNUAL REPORT
- 119 -
Associates
Poonglim Industrial Co.,
Related party
Ltd.
Phoenix Digital Tech
Co., Ltd.
Accounts
Interest expenses
Bad debt expenses (Reversal
of provision for credit loss)
Interest expenses
Reversal of provision for
credit loss
Ansang Tech Co., Ltd.
Bad debt expenses
Samho International
Co., Ltd.
Interest expenses
Reversal of provision for
Force TEC Co., Ltd.
credit loss
Interest expenses
Bad debt expenses
Hana Engineering &
Reversal of provision for
Construction Co., Ltd.
credit loss
STX Engine Co,. Ltd.
Others
Other subsidiaries of
WFH
Interest expenses
Bad debt expenses
Interest income
Fees income
Other income
Interest expenses
Fees expenses
Bad debt expenses
For the years ended December 31
2013
2012
75
(150)
11
(224)
142
747
(10,268)
2
26,273
(158)
49
9,946
2,739
83,332
9,011
1,258
-
137
416
-
(3,307)
-
-
-
-
-
-
-
-
2,413
3,657
7,600
849
75
(Reversal of provision for
credit loss)
Other expenses
(1,361)
211,651
57
224,999
Kyongnam Bank and
subsidiaries
Woori Investment &
Securities Co., Ltd.
and subsidiaries
Woori Private Equity
and subsidiaries
Kwangju Bank and
subsidiaries
Woori F&I Co., Ltd.
and subsidiaries
Fees income
Other income
Interest expenses
Other expenses
Fees income
Other income
Interest expenses
Fees expenses
Bad debt expenses
(Reversal of provision for
credit loss)
Other expenses
Interest income
Fees income
Other income
Interest expenses
Bad debt expenses
(Reversal of provision for
credit loss)
Other expenses
Interest income
Fees income
Other income
Interest expenses
Other expenses
Fees income
Interest expenses
Reversal of provision for
credit loss
Other expenses
174
6,550
-
4,500
658
8,919
15,138
-
(326)
15,665
-
-
-
117
(1)
-
7
-
257
1,309
32
56
404
(1)
-
172
22,341
13
23,081
306
4,948
30,797
-
131
13,306
110
1
1,873
626
1,279
4,799
7
47
207
1,030
282
54
1,146
(1)
31
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
206
woori bank
- 120 -
(cid:1659)
Others(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
(cid:1659)
Related party
Accounts
For the years ended December 31
2013
2012
Associates of Woori
F&I Co., Ltd.
Fees income
Interest expenses
Associates of Woori
Private Equity
Interest expenses
Bad debt expenses
Associates of Woori
Investment &
Securities Co., Ltd.
Woori Aviva Life
Insurance Co., Ltd.
(Reversal of provision for
credit loss)
Reversal of provision for
credit loss
Fees income
Other income
Interest expenses
Bad debt expenses
(Reversal of provision for
credit loss)
1
-
540
(149)
-
38
77
43
(5)
-
377
286
36
(10)
15,590
148
-
2
(5) Guarantees provided to the related parties are as follows (Unit: Korean Won in millions):
KDIC
Kumho Tires Co., Ltd.
Chin Hung International Inc.
Phoenix Digital Tech Co., Ltd.
Woori Investment & Securities
Co., Ltd.
Woori Card Co., Ltd.
STX Engine Co,. Ltd.
Warranty
Loan commitment
Loan commitment in foreign currencies
Import credit in foreign currencies
Loan commitment
Import credit in foreign currencies
Loan commitment
Loan commitment(cid:71)
Loan commitment(cid:71)
Loan commitment
Loan commitment
December 31,
2013
2,000,000
208
12,832
113,453
-
40,620
3,771
280,000
500,000
38,147
December 31,
2012
2,000,000
2,777
13,922
71,890
85
40,825
4,994
289,279
-
-
For the guarantee provided to the related parties, the Group recognized provisions for guarantees amounting
to (cid:2936) 1,355 million and (cid:2936)437 million, respectively, as of December 31, 2013 and December 31, 2012.
(6) Details of compensation to key management are as follows (Unit: Korean Won in millions):
Salaries
Severance and retirement benefits
For the years ended December 31
2013
2012
3,351
59
2,370
97
The key management represents non-executive directors and executive director. As of December 31, 2013
and December 31, 2012, loans from transactions with key management amount to (cid:2936)269(cid:71)million, and
(cid:2936)519 million, respectively. And allowance for these loans and bad debt expenses is nil. In addition, as of
December 31, 2013 and December 31 2012, the liability recognized from transactions with key
management amounts to (cid:2936)1,346 million and (cid:2936)1,639 million, respectively.
207
2013 ANNUAL REPORT
- 121 -
46. CREDIT CARD DIVISION SPIN-OFF
(1) As of September 16, 2011, the board of directors of WFH and the Group decided to spin-off the Group’s
credit card division and established a new credit card company to be a subsidiary of WFH to enhance the
competiveness in credit card business. The Group had acquired authorization about the spin-off and the
operation of credit card business from Financial Services Commission on February 22, 2013.
The shareholder of the Bank will receive 100% of the newly issued shares of the credit card company in
proportion to its ownership in the Bank as of the spin-off date. The business segments of the Bank, other
than credit card operation segment, will continue to exist after the spin-off. Both the Bank and the newly
established credit card company are responsible for the liabilities that arose from the conditions existing
before the spin-off date.
In addition, assets and liabilities that were directly or indirectly owned by the credit card company before
the spin-off will be transferred to the new company as a separate entity. Particularly, the non-identifiable
assets and liabilities subject to transfer will be decided based on the reasonable basis of the spin-off policy.
Details of such spin off are summarized as follows:
(cid:71)
Transaction structure: Equity spin-off
Spin-off company:
Spin-off schedule:
Woori Bank(cid:71)(the surviving company)
Woori Card(cid:71)(the new company)
Date of the general meeting of shareholder for
approval of the spin-off
Date of spin-off
Date of registration for spin-off
January 25, 2013
March 31, 2013
April 1, 2013
(2) Details of assets and liabilities transferred from the Group to Woori Card are as follows (Unit: Korean Won
in millions):
Cash and cash equivalents
AFS financial assets
Loans and receivables (*)
Investment in associates
Premises and equipment
Intangible assets
Deferred tax assets
Other assets
Debentures
Provisions
Current tax liabilities
Other financial liabilities
Other liabilities
Accumulated other comprehensive income
April 1, 2013
375,175
62,177
3,750,221
521
5,142
4,217
24,340
2,781
4,224,574
2,699,537
83,053
-
320,050
71,934
3,174,574
14,578
December 31, 2012
-
62,203
4,329,138
521
5,245
4,745
22,571
90
4,424,513
2,699,369
77,185
80,201
478,573
68,850
3,404,178
14,157
(*) As of December 31, 2012, loans and receivables include (cid:2936)287 million of profit and loss resulting from
intra-group transactions.
208
woori bank
- 122 -
(3) For the years ended December 31, 2013 and 2012, the summarized financial information of the credit card
operating segment is as follows (Unit: Korean Won in millions):
OPERATING INCOME:
Net interest income
Interest income
Interest expenses
Net fee and commission income
Fee and commission income
Fee and commission expenses
Dividend income
Gain on AFS financial assets
Impairment losses for loans, other receivables,
guarantees and unused commitments
General and administrative expenses
Other operating income (expenses)
Net other non-operating income
NET INCOME BEFORE INCOME TAX EXPENSE
For the years ended December 31
2013
2012
31,035
312,628
222,010
(30,652)
191,358
11,708
(130,664)
(118,956)
4,236
1,027
(26,815)
(18,536)
(1,279)
7,852
38,887
976,926
(116,880)
860,046
42,164
(394,758)
(352,594)
3,334
4,114
(149,045)
(72,438)
19,211
21,219
333,847
INCOME TAX EXPENSE
(9,411)
(80,791)
Profit from discontinued operations
29,476
253,056
(4) Cash flows related to discontinued operations are as follows (Unit: Korean Won in millions):
Cash Flows from operating activities
Cash Flows from investing activities
Cash Flows from financing activities
For the year
ended December 31, 2013
374,127
1,048
-
For the year
ended December 31, 2012
(843,146)
3,146
840,000
209
2013 ANNUAL REPORT
- 123 -
47. EVENTS AFTER THE REPORTING PERIOD
The Group acquired 33 percent of the shares of PT Bank Himpunan Saudara, a local bank in Indonesia. The
Group has a plan to merge PT Bank Himpunan Saudara and PT Bank Woori Indonesia that is already a
subsidiary of the Group.
48.
TRUST ACCOUNTS
The financial information of the trust accounts have been prepared in accordance with K-IFRS 5004 'trust
agent's trust account' and detailed enforcement rules of regulations on supervision of financial corporation,
which are based on capital market and financial investment business.
(1) Trust accounts of the Group are as follows (Unit: Korean Won in millions):
As of and for the year ended
December 31, 2013
Total assets
Trust
29,413,864
Operating revenue
25,906,917
As of and for the year ended
December 31, 2012
Total assets
763,020
Operating revenue
679,009
(2) Significant transactions between the Group and trust accounts are as follows (Unit: Korean Won in
millions):
1) Receivables/Payables
Receivables
Trust fees receivables
Payables
Borrowings from trust accounts
Accrued interest expenses on
borrowings from trust accounts
December 31, 2013
December 31, 2012
17,077
3,130,738
-
3,130,738
15,655
2,984,379
8,575
2,992,954
2)
Revenue/Expense
Revenue:
Trust fees
Intermediate termination fees
Expense:
Interest expenses on borrowings
from trust accounts
For the year
ended December
31, 2013
For the year
ended December 31,
2012
36,199
1
36,200
40,217
12
40,229
93,628
80,185
210
woori bank
- 124 -
(3) Trust accounts guaranteeing the repayment of principal and Trust accounts guaranteeing a fixed rate of
return on, and the repayment of principal
1) The carrying value of trust accounts with agreement to guarantee the principal amount or the fixed
dividend and the amount that should be covered by the inherent account were as follows (Unit:
Korean Won in millions):
Monetary trusts
December 31, 2013 December 31, 2012
Trust accounts guaranteeing
the repayment of principal
Old-age Pension Trusts
Personal Pension Trusts
Pension Trusts
Retirement Trusts
New Personal Pension Trusts
New Old-age Pension Trusts
Trust accounts guaranteeing
a fixed rate of return on,
and the repayment of
principal
Development Trusts
Unspecified Money Trusts
6,369
540,912
572,095
82,417
9,373
5,360
1,216,526
19
857
876
1,217,402
7,052
564,723
507,573
90,963
10,093
6,184
1,186,588
24
874
898
1,187,486
2) As of December 31, 2013 and December 31, 2012, the amounts that the Group has to pay by the
capital guaranteed contract or the consequences of management for the principal guaranteed
agreements are as follows (Unit: Korean Won in millions):
Liabilities for the account
(subsidy for trust account adjustment)
10
4
2013
December 31
2012
December 31
211
2013 ANNUAL REPORT
investor information
WOORI FINANCIAL GROUP
Stock information
13,150
11,350
14,000
13,000
12,000
11,000
10,000
9,000
8,000
7,000
13,500
13,300
11,800
11,600
10,800
10,600
9,800
Jan.13
Mar.13
May.13
Jul.13
Sep.13
Nov.13
Jan.13
Mar.1
Shareholders
Total
Foreigners Stake Trend
Main Shareholders
24.2%
20.7%
20.8%
1. Korea Deposit Insurance Corporation 57.0%
2. National Pension Service 7.9%
3. Capital World Growth and Income Fund 1.9%
2011
2012
2013
KOREA DEPOSIT INSURANCE CORPORATION 57.0%
●
●
●
●
FOREIGNER 20.8%
INSTITUTION (DOMESTIC) 17.1%
INDIVIDUAL (DOMESTIC) 5.1%
paid-in Capital
KRW 4,030 billion as of December 31, 2013
information availability
http://www.woorifg.com
number of Common Shares
transfer agent and registrar Common Stock
806,015,340 shares as of December 31, 2013
Securities listings
Korea Stock Exchange: 053000.KS (Common Stock)
New York Stock Exchange: WF (American Depositary Shares)
available Filings
Form 20-F: Annual Reports
Form 6-K: Quarterly Reports, Proxy Statements,
and other material announcements
Korea Securities Depository
23 Yeouinaru Road 4, Yeongdeungpo-gu,
Seoul 150-884, Korea
Tel: +82-2-3774-3430
Fax: +82-2-3774-3433~5
American Depositary Shares
Citibank, N.A.
388 Greenwich Street, New York, NY 10013
Tel: +1-212-816-6859 Fax: +1-212-816-6865
190
190
WOORI BANK
woori bank organization Chart
WOORI FINANCIAL GROUP
General Shareholders’ Meeting
Management Committee
Strategy & Planning Dept.
Board of Directors
Business Development and
Compensation Committee
Chairman
Vice Chairman
Group Management Council
Risk Management Committee
Financial Management Dept.
Audit Committee
Synergy Promotion Dept.
Standing Directors Committee
Ethics Committee
Management Support Dept.
Outside Directors
Recommendation Committee
Public Relations Dept.
MOU Evaluation Committee
Audit Committee Member Candidate
Recommendation Committee
Risk Management Dept.
IT Planning Dept.
Compliance
Officer
Compliance
Dept.
Audit & Management Inspection Dept.
2013 ANNUAL REPORT
191
191
2013 ANNUAL REPORT organization Chart
WOORI BANK
ConSUMer
BAnKIng
BUSIneSS
UnIT
CorPorATe
BAnKIng
BUSIneSS
UnIT
SMALL &
MeDIUM
CorPorATe
BAnKIng
BUSIneSS
UnIT
InSTITUTIon-
AL BAnKIng
BUSIneSS
UnIT
reAL eSTATe
FInAnCe
BUSIneSS UnIT
gLoBAL
BUSIneSS
UnIT
WeALTH
MAnAge-
MenT DIvI-
SIon
InveSTMenT
InveSTMenT
BAnKIng
BAnKIng
DIvISIon
DIvISIon
FInAnCIAL
MArKeT
BUSIneSS
DIvISIon
Consumer
Banking
Strategy Dept.
Wealth
Management
Strategy Dept.
Sales
Support
Dept.
Affiliation
Product Dept.
Channel
Development
Dept.
Wealth
Management
Advisory Center
Corporate
Banking
Product &
Marketing Dept.
Investment
Banking Dept.
Project Finance
Dept.
Small & Medium
Corporate
Banking
Strategy Dept.
Small & Medium
Corporate
Banking
Support Center
Institutional
Sales Strategy
Dept.
real estate
Finance Dept.
International
Banking Dept.
Treasury Dept.
Public
Fund
Sales Dept.
Housing Fund
Dept.
Trading Dept.
Securities
Trading Dept.
Settlement
Support Dept.
ManagEMEnt coMMittEE
Loan coMMittEE
DEputy pREsiDEnt
pREsiDEnt & chiEf
ExEcutivE officER
BoaRD of DiREctoRs
gEnERaL
shaREhoLDERs MEEting
ExEcutivE Risk
ManagEMEnt coMMittEE
192
woori bank custoMER
saLEs cEntER
BRanch
coRpoRatE Banking cEntER
FInAnCe &
MAnAge-
MenT
PLAnnIng
UnIT
HUMAn
reSoUrCeS
UnIT
rISK
MAnAge-
MenT
UnIT
CreDIT
SUPPorT
UnIT
InTernATInAL
TrADe
BUSIneSS
DIvISIon
SMArT BAnK-
Ing BUSIneSS
DIvISIon
PenSIon &
TrUST
BUSIneSS
DIvISIon
MArKeTIng
SUPPorT
DIvISIon
CorPorATe
reSTrUCTUr-
Ing DIvISIon
oPerATIon &
SUPPorT
DIvISIon
IT SUPPorT
CenTer
International
Trade Business
Dept.
Smart Channel
Strategy Dept.
Trust Dept.
Synergy
Promotion
Dept
Strategy &
Control Tower
Dept.
Human
resources Dept.
risk
Management
Dept.
Loan Policy
Dept.
Corporate
restoration
Dept.
general Affairs
Dept.
IT Support
Dept.
International
Trade Service
Center
electronic Bank-
ing Business
Dept.
retirement
Pension Business
Dept.
Product
engineering
Dept.
Finance &
Planning Dept.
Human
resources
Development
Dept.
Loan review
Dept.
retail Credit
Analysis &
Approval Dept.
Corporate
restructuring
Dept.
Loan Service
Center
IT Compliance
Dept.
Customer
Marketing
Center
Custody
Agent Dept
Accounting
Dept.
employee
Satisfaction
Center
SMe Credit
Analysis &
Approval Dept.
Large Corporate
Credit Analysis &
Approval Dept.
Credit
Management &
Collection Dept.
Corporate
recovery Dept.
Deposit Service
Center
Security
Control Dept.
Public relations
Dept.
Consumer
Protection
Center
Compliance
Dept.
Audit Dept.
Audit &
Management
Inspection Dept.
coMpLiancE officER
stanDing auDit coMMittEE
BoaRD coMpEnsation
coMMittEE
BoaRD Risk
ManagEMEnt coMMittEE
BoaRD auDit coMMittEE
BoaRD govERnancE
coMMittEE
193
2013 ANNUAL REPORT Global network
WOORI BANK
hEaD officE
51, Sogong-ro(Hoehyon-dong 1-ga),
Jung-gu, Seoul 100-792, Korea
Phone: +82-2-2002-3000
Swift: HVBKKRSE
ovERsEas BRanch
new York Agency
245, Park Ave. 43rd Floor,
New York, NY 10167, USA
Phone: +1-212-949-1900
Fax: +1-212-490-7146
Swift: HVBKUS33
LA Br.
3360, West Olympic Blvd. Suite 300,
Los Angeles, CA 90019, USA
Phone: +1-213-620-0747~8
Fax: +1-213-627-5438
Swift: HVBKUS6L
London Br.
9th Floor, 71 Fenchurch Street,
London, EC3M 4HD, UK
Phone: +44-207-680-0680
Fax: +44-207-481-8044
Swift: HVBKGB2L
Tokyo Br.
Mitsui OSK Building,
2-1-1 Toranomon, Minato-ku,
Tokyo 105-0001, Japan
Phone: +81-3-3589-2351
Fax: +81-3-3589-2359
Hong Kong Br.
Suite 1401, Two Pacific Place,
88 Queensway, Hong Kong
Phone: +852-2521-8016
Fax: +852-2526-7458
Singapore Br.
10 Marina Boulevard #13-05 MBFC Tower 2,
Singapore 018983 Singapore
Phone: +65-6223-5854~6
Fax: +65-6422-2000
Shanghai Br.
23F, LJZ Plaza,1600 Century Avenue,
Pudong New Area, Shanghai, 200122, China
Phone: +86-21-5081-9556
Fax: +86-21-5081-9557
Bahrain Br.
P.O. Box 1151, 4th Floor, Entrance 1, Manama
Centre Building, Manama, Bahrain
Phone: +973-17-223503
Fax: +973-17-224429
Hanoi Br.
11th Fl., Office Tower, Daeha Business Center 360
Kim Ma St., Ba Dinh Dist. Hanoi, Vietnam
Phone: +84-4-8315281
Fax: +84-4-8315271
Dhaka Br.
Suvastu Imam Square (1st & 4th Fl.) 65 Gulshan
Avenue, Dhaka - 1212, Bangladesh
Phone: +880-2-881-3270~3
Fax: +880-2-881-3274/3241
194
Ssvar Customer Service Center
Dhaka Export Processing Zone(Old Area),
Ganakbari, Ssvar, Dhaka-1349, Bangladesh
Phone: +880-2-778-8030
Fax: +880-2-881-3274/3241
Woori Bank Chittangong Sub-Branch
World Trade Center Chittagon(2nd Floor) Plopt
No.102-103, Agrabad Commercial Area,
Chittagong, Bangladesh
Phone: +880-0931-728221~4
Fax: +880-0931-728225
Woori Bank Uttara Sub-Branch
Paradise Tower(Ground Floor) Plot 11, Sector 3, Uttara
Model Town,Uttara, Dhaka 1230, Bangladesh
Phone: +88-02-896-2125
Fax: +880-2-896-2129
gaeseong Br.
Gaesong Industrial District Phase 1, 25 - 1 Business
Support Center, 1st Floor 103
1st Floor, Bongdong-Ri, Gaeseong, Hwanghae-Do,
North Korea
Phone: +001-8585-2300~2
Fax: +001-8585-2303
Hochiminh City Br.
2 Floor, Kumho Asiana Plaza Saigon,
39 Le Duan St., Dist 1, HCMC, Vietnam
Phone: +84-8-3821-9839
Fax: +84-8-3821-9838
Chennai Br.
6th Floor, EA Chambers, No. 49, 50L,
Whites Road, Royapettah, Chennai 600 014, India
Phone: +91-44-3346-6900
Fax: +91-44-3346-6995
Sydney Br.
Suite 25.03, Level 25, 363 George Street
Sydney NSW 2000 Australia
Phone: +61-2-8222-2200
Fax: +61-2-8222-2299
suBsiDiaRy
U.S.A
Woori America Bank
1250 Broadway New York,
NY 10001, USA
Phone: +1-212-244-3000
Fax: +1-212-736-5929
Woori America Bank, Broadway Br.
1250 Broadway New York,
NY 10001, USA
Phone: +1-212-244-1500
Fax: +1-212-736-5929
Woori America Bank, Flushing Br.
136-88 39th Avenue Flushing New York,
NY 11354, USA
Phone: +1-718-886-1988
Fax: +1-718-762-6898
Woori America Bank, Fort Lee Br.
2053 Lemoine Avenue Fort Lee,
NJ 07024, USA
Phone: +1-201-363-9300
Fax: +1-201-302-0452
Woori America Bank, Woodside Br.
43-22 50th St.,
Woodside, NY 11377, USA
Phone: +1-718-429-1900
Fax: +1-718-429-2084
Woori America Bank, ridgefield Br.
321 Broad Avenue #104 Ridgefield,
NJ 07657, USA
Phone: +1-201-941-9999
Fax: +1-201-941-4419
Woori America Bank, Palisades Park Br.
225 Broad Avenue Palisades Park,
NJ 07650, USA
Phone: +1-201-346-0055
Fax: +1-201-346-0075
Woori America Bank, Closter Br.
234 Closter Dock Road Closter,
NJ 07624, USA
Phone: +1-201-784-7012
Fax: +1-201-784-7013
Woori America Bank, elkins Park Br.
7300 Old York Rd Elkins Park,
PA 19027, USA
Phone: +1-215-782-1100
Fax: +1-215-782-1500
Woori America Bank, Annandale Br.
Seoul Plaza 4231 Markeham St,.
Suite F Annandale, VA 22003, USA
Phone: +1-703-256-7633
Fax: +1-703-256-7511
Woori America Bank, Bayside Br.
215-10 Northern Blvd. Bayside,
NY 11361, USA
Phone: +1-718-224-3800
Fax: +1-718-224-3828
Woori America Bank, Wheaton Br.
11925 Georgia Ave.
Wheaton, MD 20902(Wheaton Park Shopping
Center), USA
Phone: +1-301-933-1175
Fax: +1-301-933-1560
Woori America Bank, Wilshire Br.
3540 Wilshire Blvd. Unit 104,
Los Angeles, CA 90010, USA
Phone: +1-213-382-8700
Fax: +1-213-382-8787
Woori America Bank, olympic Br.
3360, West Olympic Blvd. Suite 100,
LA, CA90019, USA
Phone: +1-213-738-1100
Fax: +1-213-738-1101
Woori America Bank, Fullerton Br.
5731 Beach Blvd.,
Buena Park, CA 90621, USA
Phone: +1-714-521-3100
Fax: +1-714-521-3101
Woori America Bank, garden grove Br.
10120 Garden Grove Blvd.,
Suite 151Garden Grove, CA 92844, USA
Phone: +1-714-534-6300
Fax: +1-714-534-6301
Woori America Bank, Centreville Br.
13830 A-12 Braddock Road,
Centreville, VA 20121, USA
Phone: +1-703-988-9555
Fax: +1-703-988-9554
woori bank
CHInA
Woori Bank (China) Ltd.
1F~2F, Tower A, Tianyuangang Centre,C2, North
Road, East Third Ring Road, Chaoyang District,
Beijing,100027, China
Phone: +86-10-8412-3000
Fax: +86-10-8440-0698
Woori Bank (China) Ltd.,
Head office Business Department
1F, Tower A, Tianyuangang Centre, C2, North
Road, East Third Ring Road, Chaoyang District,
Beijing, 100027, China
Phone: +86-10-8441-7771
Fax: +86-10-8446-4631
Woori Bank (China) Ltd., Beijing Br.
1F, West Tower, Twin Towers, B-12 Jianguomenwai
Avenue, Chaoyang District, Beijing,
100022, China
Phone: +86-10-8453-8880
Fax: +86-10-8453-8881
Woori Bank (China) Ltd., Shanghai Br.
Drum Building 1-2F, LJZ -Plaza,1600 Century Avenue,
Pudong New Area, Shanghai, 200122, China
Phone: +86-21-5081-0707
Fax: +86-21-5081-2484
Woori Bank (China) Ltd., Shenzhen Br.
B0105, B0210 Rongchao Landmark, 4028 Jintian
Road, Futian District, Shenzhen, 518035 China
Phone: +86-755-3338-1234
Fax: +86-755-3338-7227
Woori Bank (China) Ltd., Suzhou Br.
101B, Sovereign Building, #8 Suhua Road Suzhou
Industrial Park, Jiangsu, 215021 China
Phone: +86-512-6295-0777
Fax: +86-512-6295-2141
Woori Bank (China) Ltd., TianJin Br.
No. 1 Building, Aocheng Commercial Square,
Binshui West Road, Nankai District, Tianjin,
300381, China
Phone: +86-22-2338-8008
Fax: +86-22-2392-5905
Woori Bank (China) Ltd., Shanghai Puxi Sub-Br.
S115-S119, 1F Maxdo center NO.8 Xingyi Rd.
Changning District Shanghai, 200336, China
Phone: +86-21-6235-1717
Fax: +86-21-6235-1036
Woori Bank (China) Ltd., Beijing Wangjing Sub-Br.
1F, No 10, Furong Street, Chaoyang District,
Beijing, 100102, China
Phone: +86-10-8471-8866
Fax: +86-10-8471-5245
Woori Bank (China) Ltd., Shanghai
Wuzhonglu Sub-Br.
1C, Liaoshen Building, 1068 Wuzhong Rd Minhang
District, Shanghai, 201103 China
Phone: +86-21-6446-7887
Fax: +86-21-6446-1200
Woori Bank (China) Ltd., Shenzhen Futian Sub-Br.
Room 107, 201, Daqing Building, NO. 6027, Shen Nan
Road, Futian District, Shenzhen, 518040 China
Phone: +86-755-8826-9000
Fax: +86-755-8826-9038
Woori Bank (China) Ltd., Shanghai
Jinxiujiangnan Sub-Br.
1F, 188 South Jinhui Road, Minhang District,
Shanghai, 200237, China
Phone: +86-21-3432-1116
Fax: +86-21-3432-1112
Woori Bank (China) Ltd., Beijing Shunyi Sub-Br.
1F,Tower A, AMB Building, 2, Cangshang St, Shunyi
District, Beijing 101300, China
Phone: +86-10-8945-2220
Fax: +86-10-8949-3560
PT Bank Woori Indonesia ruko Union Sub-Branch
Ruko Union Block A no.6, Lippo Cikarang Rt02/R+09
Cikarang Selatan Kab Bekasi, Indonesia
Phone: +62-21-8990-9797
Fax: +62-21-8990-3007
Woori Bank (China) Ltd., DaLian Br.
2F-218 YOMA IFC, No.128 Jinma Road, Dalian
Development Area, Dalian, 116600, China
Phone: +86-411-8765-8000
Fax: +86-411-8765-8515
Woori Bank (China) Ltd., Zhangjiagang Sub-Br.
B104/B205 Huachang Oriental Plaza, 11 Renmin East
Road, Zhangjiagang, Jiangsu 215600, China
Phone: +86-512-5636-6696
Fax: +86-512-5636-6697
Woori Bank (China) Ltd., Chengdu Br.
1F-3F, Ping'an Fortune Center, No.1 Renmin South
Road, Chengdu, Sichuan, 610044 China
Phone: +86-28-6557-2366
Fax: +86-28-6357-2369
Swift: HVBKCNBJ
Woori Bank (China) Ltd.
Weihai Br.
No.106-1~3, Attached Qingdao Mid-Road, Weihai,
Shandong Province, China, 264200
Phone: +86-31-599-6000
Fax: +86-31-597-0030
InDoneSIA
P.T.Bank Woori Indonesia
16th Fl., Jakarta Stock Exchange Bldg., JL. Jend
Sudirman Kav.52-53, Jakarta 12190, Indonesia
Phone: +62-21-515-1919
Fax: +62-21-515-1477
Swift: HVBKIDJA
Tangerang Sub-Branch office
Ruko Pinangsia Blok H No.1 Lippo
Karawaci-Tangerang 15139, Indonesia
Phone: +62-21-5577-2345
Fax: +62-21-5577-6363
Swift: HVBKIDJA
Cikarang Sub-Branch office
Cikarang Commercial Center Block A1 ~ A2, Jl
Cibarusah KM.40 No.2, Desa Pasir Sari Kec. Cikarang
Selatan 17550, Indonesia
Phone: +62-21-8983-5270
Fax: +62-21- 8983-5271
Swift: HVBKIDJA
Cibubur Sub-Branch office
Cibubr Time Square Blok B1/1 JL Alternatif Cibubur
Km.3 Kelurahan Jatikarya, Bekasi, Indonesia
Phone: +62-21-8430-5050
Fax: +62-21-8430-5353
Swift: HVBKIDJA
Krakatau Posco Sub-Branch office
Jl. Afrika No.2 Krakatau Industrial Krakatau Steel,
Chilegon, Banten 42435, Indonesia
Phone: +62-25-436-9755
Fax: +62-25-436-9759
Swift: HVBKIDJA
PT Bank Woori Indonesia Bekasi Sub-Branch
JL. Niaga raya, Block P no.22C, Kompleks Perumahan
Kemang Pratama, Bakasi, Jawa Barat, Indonesia
Phone: +62-21-8240-4282
Fax: +62-21-8240-2284
Swift: HVBKIDJA
PT Bank Woori Indonesia Sadagnd Sub-Branch
Sadang Terminal Sauare, Lantai. Desar no.07,08,25,
JL. Raya Sadang - Purwakarta, Kel. Ciwangi Kec.
Bungursari, Kab, Purwakarta Jawa Barat 41181
Kecamatan Bungursari, Kabupaten Purwakarta, Jawa
Barat,41181
Phone: +62-26-4822-0180
Fax: +62-26-4822-0181
Hong Kong
Woori global Market Asia Limited
Rooms 1905-1908, 19/F, Gloucester Tower, The
Landmark,15 Queen’s Road Central, Hong Kong
Phone: +852-3763-0888
Fax: +852-3763-0808
rUSSIA
Zao Woori Bank
8th floor, Lotte Plaza, 8, Novinsky Boulevard,
Moscow, 121099, Russia
Phone: +7-495-783-9787
Fax: +7-495-783-9788
Zao Woori Bank Saint-Petersburg Br.
1st Floor, Atlantic City, 126 Savushkina Street,
Saint-Petersburg, 197374, Russia
Phone: +7-812-327-9787
Fax: +7-812-327-9789
BrAZIL(BrASIL)
Woori Bank Brasil
Avenida Nacoes Unidas, 14,171, Crystal Tower,
Conj.803, Vila Gertrudes, 04794-000,
Sao Paulo-SP, Brasil
Phone: +55-11-2309-4740
Fax: +55-11-3511-3300
ovERsEas officE
MALAYSIA
Woori Bank Kuala Lumpur representative office
Suite 3A-2, Level 3A, Menara IMC, 8, Jalan Sultan
Ismail, 50250, Kuala Lumpur, Malaysia
Phone: +603-2078-0688
Fax: +603-2072-0688
UAe
Woori Bank Dubai representative office
1102A, Level 11, The Gate Building, East Wing DIFC,
P.O Box 506760 Dubai, UAE
Phone: +971-4-325-8365
Fax: +971-4-325-8366
MYAnMAr
Woori Bank Yangon, Myanmar
No. 0307, 3rd Floor, Sakura Tower, 339 Bogyoke
Aung Sand Road, Kyauktada Township, Yangon
Myanmar
Phone: +95-94-2530-9391
195
2013 ANNUAL REPORT 196
woori bankWoori Bank will have its genuine values recognized as a trustworthy bank by “running and laughing together” with everyone. ContaCt inForM ation
Directed by
Kim, Eun Kyung (Christine)
IR Manager, tel: 82-2-2002-3186,
ekk@wooribank.com
Choi, Won Woo
IR Manager, tel: 82-2-2002-4731,
wwchoi@wooribank.com
Created by
Lucre Inc.
Kim, Hyun Soo
Art Director, tel: 82-2-542-6725,
www.lucrebeyond.com
Photo by
ROUND TABLE
Han, Ze Hun
Photographer, tel: 82-2-3288-6005,
www.roundtableic.com
Woori Bank will have its genuine values recognized as a trustworthy bank by “running and laughing together” with everyone.