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Strength
in our valueS
Woori Bank 2014 annual report
24 365
ContentS
01
Woori Story
Message from the CEO
Company Structure
Financial Highlights
33
43
Board Of Directors & Management
Corporate Governance
News Highlights
Customer Story
Woori Bank’s Awards 2014
BECoMiNG tHE WorLD BESt to LEAD
Global Business
International Trade Business
Financial Market Business
ProViDiNG oPPortUNitiES to GroW
Smart Banking
Corporate Banking
SME Banking
Institutional Banking
Investment Banking
57
69
79
89
012
016
017
018
020
022
024
032
036
038
040
046
048
050
052
055
ENHANCiNG oPENNESS to SErVE
Real Estate Finance
Pension & Trust Business
Wealth Management (WM)
Consumer Banking
iMProViNG rELiABiLity to SECUrE
Risk Management
Ethical Management
Consumer Protection
BUiLDiNG iNtEGrity to SHArE
Social Contribution Activities
Woori Smile Microcredit
Employee Satisfaction
FiNANCiAL rEViEW
Management’s Discussion and Analysis
Independent Auditors’ Report
Organization Chart
Global Network
060
062
064
066
072
075
077
082
084
086
091
099
202
204
Strength
in our valueS
Being the longest running Korean bank for
Our customers are provided with the most
over 116 years, Woori Bank went through
convenient and safest financial services;
numerous global or domestic difficulties
we take the lead in developing Korea’s
and challenges, and thus has shared every
wealth and economy, while actively
moment with our customers for the past
supporting citizens and enterprises.
116 years.
In order to respond to the changes in the
Because our 20 million customers have
financial environment, Woori Bank will stand
always supported us, Woori Bank has been
firm as a ‘strong bank’ and will always be
the leading bank in the Korean banking
there for our customers, contributing to the
industry.
continuous development of customer
wealth and the Korean economy.
World best
We have been expanding our global
business and now operate in more than
18 countries and offer services in more
than 184 networks worldwide.
opportunity
We provide opportunities for various
companies to compete more successfully
in the global economy by supporting
initiatives to help them acquire the necessary
knowledge and skills.
openness
We always try to provide
transparency for all of our customers
and be there for them. We also help
customers to manage their finances
with great care by being accessible
24 hours a day, 365 days a year.
reliability
We focus on identifying and
creating products and services to
help households build their wealth,
improve their credit,
and increase their assets,
for financial stability.
integrity
Being a good corporate citizen
and operating with integrity is
the key in maintaining our business
for over 100 years.
By fulfilling our social responsibilities,
we help in developing economies and
building communities nationwide.
012
MeSSage froM
the Ceo
Woori Bank Annual Report 2014 013
I would like to express my sincere appreciation to all of our customers for their
continued support and commitment to Woori Bank.
In 2014, despite changes in the financial sector and stronger inter-bank competition,
Woori Bank continued to progress towards our goal of privatization.
In the first half of the year, we successfully sold subsidiaries such as two Regional
Banks(Kwangju Bank and Kyongnam Bank) and six Non-Banks(Woori Investment
& Securities, Woori Aviva Life Insurance, Woori FG Savings Bank, Woori Asset
Management, Woori Financial, Woori F&I). In the second half of the year, we enhanced
efficiency by merging Woori Finance Holdings(WFH) with and into Woori Bank. We
have thereby centered in on the longest running banking business (the 1st bank to be
established in Korea and running for more 116 years) under the name 'Woori (meaning
'our') Bank'.
As the management goal for 2015 is ‘enhancing Woori Bank’s corporate value’ we
will successfully implement the next phase of the privatization process by receiving
recognition for our strong competitive stature in the financial market. We will also
return our gratitude to our customers, shareholders, and the nation by providing
exceptional customer services.
In 2014, Woori Bank’s total assets continued to see a high level of growth, totaling
KRW 270 trillion – an increase of approximately KRW 15 trillion when excluding
assets(or liabilities) from the subsidiaries that were reclassified into disposal group
held for sale or for distribution to owners as of December 31, 2013. As a result
of strengthening our personal relationships with each and every one of our 20
million customers, we were able to achieve an increase of more than 1 million new
customers. This is the biggest increase amongst all Korean commercial banks.
We also achieved a remarkable milestone last year, having served as the treasury
bank for the Seoul Metropolitan Government for more than 100 years, consecutively.
Moreover, through a competitive bidding process we were selected as the bank
operators at Gimpo International Airport and Incheon International Airport, thereby
reaffirming customer trust and commitment to Woori Bank in Korea.
As for the global competitiveness, Woori Bank was the first Korean bank to acquire
a local bank in Indonesia – Saudara Bank. As of the end of 2014, Woori Bank’s 184
overseas networks in 18 countries stand as the largest overseas network among
Korean commercial banks. Woori Bank, as the leading international bank among
Korean banks, will continue to strengthen our global presence and become one of
‘Asia’s Top 10, Global Top 50’ banks.
However, the continuum of the low interest rate environment and low growth in
the global economy inevitably caused the Net Interest Margin (NIM) to decline
continuously. This resulted in insufficient maximization of earnings compared to our
quantitative growth. On the other hand, soundness indicators, such as NPL ratio and
delinquency rates, were improved significantly and we will continue to improve our
asset quality throughout this year to a similar level as our competitors.
Strength in Our ValueS 014
We will not only strengthen our competitiveness by preparing for a prolonged low
interest-rate environment in 2015, but also plan ahead for the volatility of exchange
rates and oil prices caused by economic or political uncertainties of major countries.
Furthermore, with the government encouraging lenders to prepare for a paradigm
shift in the FinTech(finance technology) sector, it is prime time for us to converge with
information technology and provide fast, easy and safe Fintech-oriented banking
services by utilizing mobile payment, wire transfers, personal asset management and
cloud funding, and etc.
We will prepare ourselves and step ahead of our competitors in order to lead the
financial market in 2015.
First, we will make every effort to act as the main artery of the financial sector, ensuring
that only clean blood circulates throughout all corners of the Korean economy.
In order to support financing of SMEs and help them to achieve sustainable growth,
we will provide accurate evaluations of technology financing. We will thoroughly
examine the potential outlook of these technology-oriented companies instead of
conducting limited loan reviews by examining financial statements only. We will take
the lead in technology financing and relationship-based banking that invests in the
future competitiveness of companies. We will also lead the way in stabilizing the
livelihood of citizens and will support them during hard times by appointing dedicated
members of staff to be in charge of small-loan finance, at all branches.
Next, we will cultivate innovative markets for FinTech and Internet Banking.
At the end of 2014, Woori Bank was the 1st Korean commercial bank to establish
an independent FinTech Business Department. The year 2015 being the first year of
the ‘smart digital bank’, we will make every effort to become an innovative bank that
promptly meets the diverse needs of financial consumers in the convergence between
different businesses. We will also become a leading financial institution that rapidly
responds to changes in the financial environment.
Lastly, with the mindset of always being there for our customers 24 hours a day,
365 days a year, and with the determination made by all of our employees to
strengthen our innovativeness and capabilities, Woori Bank will implement ‘24·365
Innovation Project’ and thereby offer top-notch innovative products and services
to our customers. We will become ‘a strong bank’ by achieving an eye-catching
performance that will re-emphasize our significance as the 1st to be established and
the longest bank running in Korea.
Through these efforts, we will enhance the corporate value of Woori Bank and
successfully implement the privatization process.
Building upon a 116-year history, Woori Bank will always remain committed to serving
our customers and shareholders. All of our employees will work together to place our
customers’ and shareholders’ happiness or satisfaction as our top priority.
I wish you good health and happiness in the Year of the Sheep, 2015.
Thank you.
Lee, Kwang Goo
President and CEO of Woori Bank
Woori Bank Annual Report 2014 015
Woori Bank will implement ‘24·365 Innovation Project’ and
offer top-notch innovative products and services to our
customers. We will become ‘a strong bank’ by achieving
an eye-catching performance that will re-emphasize our
significance as the 1st to be established and the longest
bank running in Korea.
Strength in Our ValueS 016
CoMpany
StruCture
PriVAtizAtioN oF Woori BANK iN ProGrESS
As of 26th Jun. 2013, spin-off and sale processes of the subsidiaries of Woori Finance Holdings (WFH) took place in 2014, according
to Woori Finance Holding’s Privatization Plan, approved by the Public Fund Oversight Committee (the “PFOC”). The spin-off of two
Regional banks (Kwangju Bank and Kyongnam Bank) were completed on 1st May 2014, while the sale of six Non-Banks (Woori Invest-
ment & Securities, Woori Aviva Life Insurance, Woori FG Savings Bank, Woori Asset Management, Woori Financial and Woori F&I) were
completed in consecutive order between March and June of 2014.
At the final stage of Woori Bank’s privatization plan, as per PFOC’s announcement made on 23rd Jun. 2014 to merge WFH with Woori
Bank, WFH merged with and into Woori Bank on 1st Nov. 2014. Woori Bank was then newly listed on 19th Nov. 2014.
On 28th Nov. 2014, Korea Deposit Insurance Corporation (KDIC) executed the bid on its 56.97% ownership of Woori Bank by dividing
the bid into two forms: the management control of shares (30%) and the minority shares (26.97%).
Successful bids were only carried out regarding the sale of minority shares, and as a result, the KDIC’s 56.97% ownership of shares
decreased from 56.97% to 51.04%.
Meanwhile, further discussion about Woori Bank’s Privatization Plan will be finalized and announced later on by the PFOC.
PrESENt StAtUS oF Woori BANK’S SUBSiDiAriES AFtEr MErGiNG WitH WFH
Woori
Bank
Domestic
Woori
Card
Woori Investment
Bank
Woori
FIS
Woori Finance
Research Institute
Woori Credit
Information
Woori Fund
Service
100%
58.15%
100%
100%
100%
100%
Woori
PE
100%
International
Woori America
Bank
Woori Bank
(China) Ltd
PT Bank Woori
Saudara Indonesia
1906 Tbk
Woori Global
Market Asia
Limited
Zao
Woori Bank
Woori Bank
Brasil
Woori Finance
Cambodia Plc
100%
100%
74.02%
100%
100%
100%
100%
Major ShareholderS of Woori Bank
(As of Dec. 2014)
Name of shareholder
Number of shares owned
Percentage of ownership
Korea Deposit Insurance Corporation
National Pension Service
Employee Stock Ownership Association*
Capital World Growth and Income Fund
Korea Investment Management Co., Ltd. (private equity fund)
* Employee Stock Ownership Association is in the form of union member account.
345,142,556
48,263,870
27,020,600
12,625,314
10,622,314
51.04%
7.14%
4.00%
1.87%
1.57%
Woori Bank Annual Report 2014 017
finanCial
highlightS
KrW LoANS
(Unit: KRW trillion)
Total Assets
KRW Loans
DEPoSitS
(Unit: KRW trillion)
Total Liabilities
Deposits
CrEDit CoSt
(Unit: KRW billion)
3
1
0
2
4
1
0
2
3
1
0
2
4
1
0
2
3
1
0
2
4
1
0
2
270.2
167.3
340.7
156
317.8
175.3
252.1
188.5
2,277
1,097
7.2%
7.5%
51.8%
NEt iNCoME
(Unit: KRW billion)
roA / roE
(Unit: %)
BiS CAPitAL
(Unit: %)
* Excluding one-off factors related to the sale and the
spin off of subsidiaries
Tier 1
BIS
* Basel III basis
1) Excluding risk weighted assets of 5 subsidiaries
3
1
0
2
4
1
0
2
3
1
0
2
4
1
0
2
3
1
0
2
4
1
0
2
1,214
ROA
0.14
0.21
-538
ROE
2.56
3.55
325.6%
15.52
15.71)
14.25
11.81)
12.68
10.69
* Woori Bank consolidated basis (K-IFRS)
** Due to the merger between Woori Finance Holdings and Woori Bank(Nov.1, 2014), the consolidated F/S of Woori Bank have been stated based on the consolidated F/S of
Woori Finance Holdings.
Strength in Our ValueS 018
Board of direCtorS &
ManageMent
Chung, Soo Kyung
Lee, Kwang Goo
Lee, Dong Gun
Woori Bank Annual Report 2014 019
StandinG directorS
Lee, Kwang Goo
49th President & Chief Executive Officer
Lee, Dong Gun
Deputy President / Director
• Executive Vice President, Consumer Banking Business
Unit, Woori Bank
• Executive Vice President, Finance & Management
Planning Unit, Woori Bank
• Head, Gwangjin-Seongdong Sales Center, Woori Bank
• General Manager, Consumer Banking Products &
Marketing Dept., Woori Bank
• Chief Executive, Woori Global Markets Asia Ltd.
(Hong Kong)
• General Manager, Card Strategy Dept., Woori Bank
• General Manager, Consumer Banking Marketing
Dept., Woori Bank
• B.A. in Business Administration, Sogang University
• Executive Vice President, Credit Support Unit,
Woori Bank
• Executive Vice President, Operation & Support Unit,
Woori Bank
• Managing Director (CIO), Channel Support Division,
Woori Bank
• Head, Gangnamjungang Corporate Banking Center,
Woori Bank
• General Manager, International Trade Business
Division, Woori Bank
• M.A. in Financial Economics, Graduate School of
Economics, Yonsei University
• B.A. in Business Administration, Yeungnam University
Chung, Soo Kyung
Standing Audit Committee Member / Director
• Local Government Dispute Mediation Committee
Member, Ministry of Security and Public Administration
• Financial disputes settlement member, Financial
Supervisory Service
• Financial consumer panel member, Financial
Supervisory Service
• Deputy Executive Director, Korean Bar Association
• Registered as Lawyer/Attorney
• Registered as Certified Public Tax Account and
Patent Attorney
• B.A. in English Language and Literature,
Sungkyunkwan University
outSide directorS
Hong, Il Hwa
• Current) Standing Advisor, Women’s Newspaper
Women & People
• Outside Director, Korea Development Bank(KDB)
• President, Korea-Romania Friendship Society
• M.A. in Public Policy, Kookmin University
Graduate School of Public Administration
• B.A. in Economics, Kookmin University
Chun, He Suk
• Current) Professor of Economics, Cheongju
University
• Vice President, Merrill Lynch, New York,
Investment Advisory Company
• Acting General Manager, New York Branch,
Kookmin Bank
• M.A. in Business Administration/Ph.D. in Economics,
George Washington Univ.
• B.A. in Biology, Yonsei University
Oh, Sang Keun
• 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
• Ph.D. in Economics, Yale University
• M.A. in Economics, Yonsei University
• B.A. in Economics, Yonsei University
Jung, Han Gi
• Current) Visiting Professor of Liberal Arts, Hoseo
University
• CEO/President, Eugene Asset Management
• Corporate Business Head (Managing Director),
NH Investment & Securities
• Entered the Bank of Seoul and Trust Company /
General Manager, Dong Hwa Bank
• M.A. in Business Administration, Graduate School of
Business, Sogang University
• B.A. in Political Science, Sogang University
Koh, Sung Soo
• Current) President and Professor of Konkuk
University Graduate School of Real Estate
• Research Fellow, Korea Institute of Finance
• M.A./Ph.D. in Economics, Cornell Graduate School
• M.A. in Business Administration, Columbia
University
• B.A. in Business Administration, Yonsei University
non-StandinG director
executive vice preSident
Kim, Joon Ki
• Current) Dept. Head of Human Resources
and Administration, Korea Deposit Insurance
Corporation
• Dept Head of Savings Bank Normalization, Korea
Deposit Insurance Corporation
• Dept. Head of Risk Management II, Korea Deposit
Insurance Corporation
• B.A. in Business Administration, Korea University
Kim, Seung Gyu
Management Support Unit
Jeong, Won Jai
Corporate Banking Business
Unit
Kim, Ok Joung
Risk Management Unit
Sohn, Tae Seung
Global Business Unit
Kwon, Ki Hyung
Institutional Banking Business Unit
Nam, Ki Myung
Consumer Banking Business Unit
Chae,Woo Seok
Small & Medium Corporate Banking
Business Unit
Park, Ki Suk
Finance & Management Planning
Unit
Yoo, Jum Seung
Human Resources Unit
Lee, Dong Bin
Credit Support Unit
Kim, Jong Won
Real Estate Finance Business Unit
Strength in Our ValueS 020
Corporate governanCe
At the end of March 2015, Woori Bank’s Board of Directors
consisted of 10 executive directors: three standing directors,
bank management and maximized shareholder value, by operat-
ing the Board based on free discussions with experts in various
one non-standing director and six outside directors, who were
fields, including economics and law.
appointed to increase the relevant expertise and independence
At the quarterly meeting in 2014, there was consensus among
of the Board. The six outside directors and one non-standing
the board in regards to the quarterly management records and
director were selected based on their experience in the fields
they made regular inspections of the group’s management. The
of finance, management, law, accounting and public relations;
major agenda of discussions included: reports on the submission
many are also well-known public figures. They support, as well
as monitor, Woori Bank’s strategic decision-making and overall
of plans for the implementation of the Memorandum of Under-
standing (MOU) signed with the Financial Supervisory Service
business affairs on a regular basis.
(FSS); the results and details of the MOU implementation with
Korea Deposit Insurance Corporation (KDIC); plans to issue
revieW of 2014
The Board held 26 meetings in 2014 to discuss a total of 66
foreign currency-denominated bonds; comprehensive briefings
regarding major loans; briefings on NPLs; reviews of the orders
pending issues and 55 briefings for decision-making and delib-
implemented by the Board of Directors, as well as discussions
eration, and the overall attendance rate of outside directors was
concerning the outcome of reviews and a rundown of the activi-
91%.
Directors from various fields collected information through in-
ternal and external activities, and then offered real-world advice
ties of various committees under the Board of Directors. At the
December meeting, the Board also held in-depth discussions
about major issues facing Woori Bank, amid continuing market
by utilizing their expertise to contribute significantly to improving
changes, such as the confirmation of the Bank’s 2015 draft man-
management. This photo shows that they promoted effective
agement plan.
Woori Bank Annual Report 2014 021
Type of Meeting
No. of Agenda
Issues
No. of
Briefings
Major Issues
Shareholders’ Meeting, BOD and
Corporate Governance, etc.
29
12
Accounting/ Financial Management
Portfolio & Risk Management/
Investment/Audit & Inspection/
Gov. Regulation
HR/Organizational Management
Others
Total
9
1
3
24
66
8
14
7
14
55
Holding regular shareholder meetings, operating the Board of Directors/ Board of
Directors’ Management Committee, discussing corporate governance issues, estab-
lishing and implementing management plans and strategies (launching and realigning
divisions)
Approving and modifying the settlement of financial statements, reporting and plan-
ning financial records, briefing on results and actions for reviewing the MOU, planning
for issuing bonds (including foreign currency bonds) and managing credit limits
Comprehensive briefing on major loans, investing in private equity funds, selling off
NPLs, briefing on the status of NPLs, appraising the commitments of investment
companies to invest, handle audit and internal control issues and manage and sup-
port special contributions of guarantee institutions for SMEs
Carrying out performance evaluations/ compensation, appointing dismissing employ-
ees excluding the BOD and addressing issues related to labor-management relations
coMMitteeS under the Board of directorS
In order to ensure the efficient operation of the Board of Direc-
audit plans, makes outcome evaluations, implements follow-
up measures and provides improvement plans to evaluate and
tors, Woori Bank has established the Board of Governance Com-
enhance the appropriateness of the internal control system and
mittee, the Board Risk Management Committee, the Board Audit
management performance measures.
Committee, the Board Compensation Committee and the Board
Audit Committee Member Recommendation Committee.
Board of Governance Committee
The Board of Governance Committee actively supports the ac-
tivities of the Board of Directors by studying and reviewing the
overall function and operation of the Board, as well as establish-
ing and reviewing the succession and training plans of the man-
agement team including directors. In addition to this, the Com-
mittee acts as the Outside Director Candidate Recommendation
Committee, as stipulated in Article 22-3 of the Bank Act.
Board Risk Management Committee
The Board Risk Management Committee makes decisions about
risk-related policies and strategies in response to changes in the
financial environment. The Committee meets at least once every
quarter, or on an ad hoc basis to deliberate on risk manage-
ment strategies and policies, risk tolerance levels and exposures,
thereby discerning, measuring and monitoring the overall risks
arising from the Bank’s management, or various transactions in a
timely manner.
Board Audit Committee
The Board Audit Committee establishes and executes internal
Board Compensation Committee
The Board Compensation Committee monitors the design and
operation of the Bank’s performance-based compensation sys-
tems and is in charge of independently establishing compensa-
tion policies.
Board Audit Committee Member Recommendation Committee
The Board Audit Committee Member Recommendation Commit-
tee recommends candidates for the Board Audit Committee.
planS for 2015
In 2015, Woori Bank will make significant improvements to its
management by discussing major agenda items at the Board
meetings. At the end of March 2015, the Board of Directors had
already met six times. After April, the quarterly Board meetings
will continue to focus on agenda items such as the analysis of
management performances and the 2016 draft management
plan, with ad hoc meetings also being held whenever needed to
deal with agenda items related to various matters, such as man-
agement goals, organization and financing. In 2015, Woori Bank
will act as a reliable partner bank that excels and grows through
transparent and efficient management innovation.
Strength in Our ValueS 022
neWS highlightS
1. Lee, Kwang Goo Appointed as the President & CEo of
Woori Bank
On December 30, 2014, the inauguration ceremony for President &
CEO of Woori Bank, Lee, Kwang Goo, was held in the presence of
about 600 employees at Woori Bank’s head office at Jung-gu, Seoul.
During the ceremony, he said, “We will continue to build on our tradi-
tion and history as Korea’s longest operating reliable bank and do
our utmost for successful privatization, by becoming a bank that
greatly contributes to our customers and the national economy. To
achieve this, we will increase our support to SMEs and take the lead
in supporting small loan finance to stabilize household debts, acting
entering into emerging
markets. By 2016, the
proportion of overseas
sales revenue will be
increased to 10% from
t h e c u r r e n t 6 % , t o
achieve the goal of be-
coming one of ‘Asia’s
To p 10 B a n k s’ a n d
r a n k i n g a m o n g t h e
‘Global Top 50 Banks’
as a financial institution that revitalizes the economy.” To this end, he
by 2016.
announced three management goals of completing privatization suc-
cessfully, establishing an advanced governance structure and leading
innovation in the financial industry. He also promised to accomplish
privatization and become the number one bank by implementing the
‘ 24 H o u r/ 3 6 5 D a y
3. reselected as the treasury Bank for Seoul Metropolitan
City
Woori Bank was reselected as the treasury bank for the Seoul Met-
B a n k Im p rove m e nt
ropolitan City for a period of four years from 1st January 2015 to 31st
Project’, as well as
December 2018. Since the designated period for Woori Bank as
ensuring stable risk
the current treasury bank for Seoul Metropolitan City ended on 31st
m a n a g e m e n t a n d
December 2014, four banks in totalincluding: Woori Bank, Kookmin
i n c r e a s i n g o p e r a t-
Bank, Shinhan Bank and Hana Bank, participated in the public bid-
ing revenue through
ding that began in January 2014. After forming a Deliberation Com-
thorough customer
mittee to Designate a City Treasury Bank, Woori Bank was chosen as
management.
the next treasury bank for the Seoul Metropolitan City, thereby signing
2. reaffirming its Status as the #1 Korean Bank by
Diversifying overseas Expansion
The year 2014 was dedicated to the first year of the implementa-
tion of the overseas expansion strategy for Woori Bank, as a new
breakthrough to overcome sluggish growth and lower profits in the
domestic market. During the year, Woori Bank reinforced its status
as the number one Korean bank through international diversification,
being the first Korean bank to open a branch in Dubai and an office in
Vladivostok, Russia. Also, overseas network expansion will continue
through M&As, such as acquiring a 33% stake in Indonesia’s Saudara
Bank (Jan 28th) and acquiring a 100% stake in Cambodia’s Malis (July
29th), while also actively expanding the existing network, such as an
overseas sub-branch in Indonesia (Feb 14th), the Tianjin Dongmalu
sub-branch in China (June 26th) and the Irvine branch in the U.S. (Oct
6th). In 2015, Woori Bank’s overseas expansion will continue focusing
on the merger with Saudara Bank, expanding local networks, es-
tablishing additional branches in India and reviewing the feasibility of
an agreement to handle treasury bank issues on 24th April, 2014. In
order to ensure a fair and transparent review, the Deliberation Com-
mittee consisted of 12 persons, including financial and IT experts,
professors and CPAs. They reviewed 18 items in five areas, including
“management capability for treasury bank issues”, “convenience of
use for citizens” and “contribution to local communities and coopera-
tive projects with the Seoul Metropolitan City”, where Woori Bank
achieved the highest score. By being reselected as the treasury bank,
Woori Bank will be responsible for managing the Seoul Metropolitan
City’s budget of KRW 26 trillion for four years starting from 2015, and
act continuously as
the treasury bank for
Seoul Metropolitan
City, as it has for 100
years, since 1915.
Woori Bank Annual Report 2014 023
4. Launched Korea’s First Product Package for Sharing,
‘Woori Hope Sharing Package’
In order to promote the spirit of sharing through small donations,
Woori Bank launched ‘Woori Hope Sharing Package’ consisting of a
bankbook, installment savings plan and a credit card. As a financial
product package exclusively for sharing, the ‘Woori Hope Sharing
Package’ was launched as part of the ‘Improvement Measures for
Promoting the Spirit of Sharing’, chosen as the government’s first pri-
ority task at the National Policy Coordination Meeting held in March
by the Prime Minister, with Woori Bank independently launching the
product through a business agreement with the Ministry of Health
and Welfare. All of the interest and points donated by subscribing for
various products, will be delivered to the socially vulnerable (who do
not receive government welfare benefits) through the Korea National
ball team at the 2014
Incheon Asian Games,
where our main play-
e r s, Im You ng-H e e,
Park Hye-Jin and Yang
Ji- H e e, c o ntr ib u te d
to them winning the
team’s first gold medal
in 20 years. The gold
medal redeemed the
Korean national basketball team’s honor from China, while also rais-
ing the honor of Hansae Basketball Team. Meanwhile, the team won
eleven consecutive games after the 2014-2015 Women’s Professional
Basketball league’s opening game recently to speed towards a third
Council on Social Welfare, a donation organization affiliated to the
straight win, including setting a new record for consecutive wins.
Ministry of Health and Welfare by law. The customers who partici-
pated in donations can get tax deductions automatically during the
year-end tax adjustment. Starting with Korea’s first product for public
i n te r e s t to p ro m ote
the spirit of sharing,
6. Woori Bank’s Successful Merger with Woori Finance
Holdings
On 3rd November 2014, Woori Bank started operations after being in-
‘Woori Hope Sharing
tegrated with Woori Finance Holdings (WFH), which was possible be-
Package’, Woori Bank
cause of successfully carrying out WFH’s privatization, such as selling
will take the lead in
off the regional bank unit and the brokerage unit. As a result of WFH
spreading the spirit of
merging with Woori Bank on 1st November, WFH, which was estab-
sharing in our society
lished as Korea’s first financial holding company in 2001 faded into
by launching a variety
history after 14 years. Meanwhile, Woori Bank will continue to grow its
of financial products
brand value and build on its long running history and tradition of 116
for sharing.
years, by continuing to exist as Woori Bank through the merger. In line
5. Woori Bank Hansae Basketball team’s Second Straight
Win at the Women’s Professional Basketball Championship
and Won a Gold Medal at the incheon Asian Games
The Hansae Basketball Team won the Women’s Professional Basket-
ball championship two years in a row, receiving the title of triple crown
by winning last year’s league along with the title of undisputed cham-
pion, after winning the 2013 Asia Women’s Basketball Championship.
In particular, despite intensive checks from its competitors, the team
achieved outstanding results that bested other teams, such as nine
consecutive wins after the opening game, to show off their reputa-
tion as a famous basketball team. Also, the manager, Wi Sung-Woo,
and coach, Jeon Ju-Won, led the Korean women’s national basket-
with the integration with WFH, Woori Bank carried out a reshuffle and
incorporated the function and staff of the holding company, such as
setting up the ‘Management Support Unit’ to be responsible for man-
aging the privatization and the bank’s affiliates. The merger with WFH
increased Woori Bank’s total assets to approximately KRW 250 trillion,
m a k i n g i t a l e ad i n g
bank with stable fund-
ing to aid the privatiza-
tion process.
Strength in Our ValueS CUSTOMER
STORY
Daenong Bio Farming
Association
1 Woori Bank
haS alWayS
Been there
for CuStoMerS.
Woori Bank has always been there for customers during the past 116 years
and we will continue to help customers in the future.
Achieved No.1 market
share by contributing to
making sprout vegetables
popular in Korea.
025
Contributed to healthy meals at home by developing various food
products that taste good and are nutritious.
Woori Bank has Been a Big help to our customers.
“Duringthemostdifficulttimeinmylife,WooriBank
gavemeavaluableopportunitythatenabledmeto
developfurther.Iwillalwaysbethankfulforthisand
willrememberitfortherestofmylife.”
CEO of Daenong Bio Farming Association
Hwang, Sung Hun / A Customer of Yangjaebuk Branch
Cultivating sprout vegetables and babyleaf vegetables, which are
environmentally-friendly and chemical-free products - no chemical
fertilizers or agricultural pesticides are used.
Strength in Our ValueS CUSTOMER
STORY
2
Dongyang Industrial
Co., Ltd
Ranked No.1 as automobile parts manufacturer
in charge of casting, processing and assembling
automobile parts.
Woori Bank
BuildS truSting
relationShipS
With CuStoMerS.
As a reliable bank, Woori Bank builds close relationships by visiting customers
face-to-face to provide a greater level of happiness and satisfaction for customers.
027
Woori Bank has Built a trusting relationship
With us for 30 years
“Ithinkthemostimportantthinginarelationship
istrustbetweenoneanother.Iwasdeeplytouched
byhowWooriBank’semployeestriedtohelpout
bypayingvisitsinperson.”
CEO of Dongyang Industrial Co., Ltd.
Chun, Mal Sun / A Customer of Changwon Branch
Achieved continuous growth
through strenuous effort and
perseverance.
Provided top-notch quality
based on trust.
Strength in Our ValueS CUSTOMER
STORY
3
ThE REDFACE
Produced and sold about 1,000 types of products
as Korea’s first outdoor mountain climbing
clothing brand with a history of 50 years.
Woori Bank helpS
Corporate to
groW and develop.
Woori Bank has secured leadership in the development and growth of companies by
creating new and more convenient financial conditions for them. We will provide financial
services to as many customers as possible.
029
Woori Bank is a financial partner that can Be trusted.
“Wewereabletoachievewhatwehavesofarbecause
ofthesupportthatWooriBankgaveusatatime
wheninneedofhelp.IamgratefulthatWooriBank
wasthereforusasatrustingpartner.”
Yoo, Young Sun / A Customer of Seocho-gu Office Branch
CEO of THE REDFACE
Delivered products to about 400 stores
across the nation on a daily basis.
Strengthened competitiveness through continuous research
to find solutions to new challenges.
Strength in Our ValueS CUSTOMER
STORY
4
OKF
Woori Bank
takeS the lead
in the overSeaS
expanSion.
Woori Bank is proud of providing 1st quality financial services to our
customers which encouraged our customers to become global companies, and we
will do our best to provide exceptional services based on the knowledge we have ac-
cumulated over time.
A global company specializing in beverage and food
that produces about 700 types of products,
including fruit juices, coconut drinks and sodas.
031
Aloe Vera King is the only Korean beverage that is
being sold in about 155 countries.
Woori Bank provides Big help to exporting companies.
“IthinkWooriBankistheonlybankthat
setsagoodexampleforexportcompanies.
Iappreciatethespecialconsiderationsmade
bytheBankforexportcompaniesandlook
forwardtomaintainingagoodpartnership
inthefuture.”
CEO of OKF
Lee, Sang Shin / A Customer of Korea Trade World Center Branch
Produce only the best quality aloe from the U.S,
Mexico and Thailand.
Strength in Our ValueS Woori Bank’S
aWardS 2014
• Financial Supervisory Service
Prize in the Small Loan Finance Awards
• Ministry of Science, ICT and Future Planning
Grand Prize in the Private Sector of the ‘Smart Work Best Practice
Contest’
• Korea’s Network for Social Enterprise
Achievement Award for the Revitalization of Social Enterprise
• Hosted by the Technology & Finance Center
Grand Prize in the Technology & Finance Contest of Susongdong
Daelim Banking Center, Credit Support Unit
• Thebell
Prize in Thebell Risk Awards
• Seoul Metropolitan Fire & Disaster Headquarters
Grand Prize in the 7th Outstanding Workplace for Safety Management
• AsianInvestor
Best Onshore Custodian 2014
• The Asian Banker
Prize in the 2014 Best Korean Bank of Cash Management for Second Consecutive Year
• Ministry of Gender Equality and Family
Minister Commendation for Implementing Family Policies and Creating Family Culture
• The Korea Economic Daily
Grand Prize in the PB Service Sector of the 2014 Korea Luxury Brand Award
• Maeil Business Newspaper
Grand Prize in the Banking Sector of the 13th Korean Fund Awards
• NEWSPIM
Awarded the National Policy Committee Chairman Award for the CIB Sector: Boryeong
LNG Terminal Construction Project in the 2014
NEWSPIM Capital Market Awards
• The Korea Economic Daily
Dedicated to the Hall of Fame for Grand Prize in the Customer
Satisfaction Management Awards (Financial Sector)
• League of American Communications Professionals
Gold Prize of LACP Annual Report Competition
Ranked 79th among the Top 100 Worldwide
• Annual Report Competition
Gold Prize of ARC
Young-sun-ban-bo refers to always taking a step ahead of others if you want to suc-
ceed. Our efforts to become more innovative, change in advance, and be ready for
competition a step ahead of others will act as a huge competitiveness in better serving
our customers for another 100 years.
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036
gloBal
BuSineSS
As of December 2014, as a result of the
merger with Saudara Bank, Woori Bank
had entered into 18 countries with 184
overseas networks, including 14 branches
(5 sub branches affiliated with larger
branches), 7 subsidiaries (163 branches
of subsidiaries) and 2 representative
offices.
By establishing the largest global
network of all Korean banks, we aim to
continue providing the growth potential
for overseas expansion, as well as
enable steady growth by implementing
differentiated business strategies for each
overseas network.
rEViEW oF 2014
In 2014, despite a prolonged global economic
downturn and fierce interbank competition,
Woori Bank’s global business performance
reached total assets of USD 14.7 billion (a
16.5% year-on-year increase), loans of USD 7.54
billion (20.0% year-on-year increase) and operat-
ing income of USD 280 million. This was a result
of a boost in business that was centered on
high-quality assets, the strengthening of local-
ized business, the restructuring of asset portfo-
lios and an intensified fee business.
Expansion of Overseas Networks
On 30th December 2014, PT Bank Woori Indo-
nesia merged with Saudara Bank in Indone-
sia, which increased expansion into emerging
markets based on experience and knowledge
gained during the acquisition process and in-
creased inroads into overseas markets through
M&As. Besides focusing only on banking ser-
vices, we also diversified our business to include
microfinance, savings bank and installment fi-
nance, such as acquiring ‘Malis’, a microfinance
company in Cambodia in July 2014. We are
conducting market research and fostering spe-
cialists for new market entries into Central and
South America as well as Africa.
Major Highlights of Global Business
-end 2014
Net Income
(Unit: USD million)
NPL Ratio
(Unit: %)
122.7
1.23
0.90
114.64
Delinquency Rate
(Unit: %)
Liquidity Ratio
(Unit: %)
Woori Bank Annual Report 2014 037
Development of Competitive Products and
Services
global business opportunities. In 2014, strate-
gic business alliances were made with flagship
In order to provide diverse products and ser-
vices, Woori Bank has expanded the head
office’s competitive products, which include
mortgage loans, MMDA and revolving deposits
for local markets. For retail customers, we offer
a variety of services, including mortgage loans,
installment finance, credit loans, credit cards
and internet banking services. We also provide
one-stop financial services from the early stage
of entering into a new overseas market for local
customers through close cooperation between
the head office and overseas branches.
banks in countries where the Bank is expected
to advance (i.e. IS Bank in Turkey). This ex-
panded our overseas branches and created new
business opportunities.
PLANS For 2015
The Global Business Unit establishes the basis
for long-term growth by fostering local person-
nel to set up an optimal local business base,
and develops IT systems of global standard.
Seeking to deliver profit diversification, the unit
focuses on specialized business for each over-
seas branch, development of localized products
Fortified Management of Overseas Financial
Institutions
and a scaling-up of the fee business. Synergies
are generated through intensifying business for
The Global Business Unit focused on expanding
the financing volume through stronger relation-
ships with overseas financial institutions as ma-
jor financing sources, to prepare for changes in
the financial environment, such as the prediction
of interest rate increases in the U.S. In addition,
MOUs were signed with prestigious overseas
financial institutions enabling the expansion of
target customers among domestic and overseas
branches. Woori Bank will increase overseas
profit from the current level of 6.8% to 10% by
2016, to become a leading bank that competes
directly against prominent banks in the world
with customer-oriented products and services.
New Market Entries of Global
Business
M&A with Saudara Bank in Indonesia
- PT. Bank Himpunan Saudara,
Tbk (a listed company in Indonesia),
115 networks
Acquision of Microfinance company in
Cambodia
- Malis Finance PLC, 5 networks
Worldwide Branch Network (184 Networks in 18 Countries)
Woori
America
Bank
New York
LA
London
Woori Bank
Brasil
Head Office
Overseas Branch (14) & Sub-Branch (5)
Overseas Representative Office (2)
Overseas Subsidiary (7)
Zao
Woori
Bank
Woori Bank
(China) Ltd
Bahrain
Dubai
Dhaka(5)
Gaeseong
Seoul
Tokyo
Hong Kong
Hanoi
Woori
Global Market
Asia Limited
Chennai
Yangon
Ho Chi Minh
Kuala Lumpur
Woori Finance
Cambodia Plc
Singapore
PT Bank
Woori Saudara
Indonesia
1906 Tbk
Sydney
Strength in Our ValueS 038
international
trade BuSineSS
Woori Bank’s International Trade
Business Division is in charge of
foreign exchange related services
for both consumer/corporate banking
customers in Korea and overseas.
The unit is engaged in establishing
and supporting Woori Bank’s
FX-related marketing strategies, while
also operating the International Trade
Service Center, BPR (Business Process
Reengineering), a specific department
that handles banking tasks promptly
and efficiently. Based on Woori Bank’s
expertise that has accumulated
over the past 116 years through
transactions with the largest number
of large enterprises, Woori Bank will
provide high-quality consulting on
domestic and overseas export/import
financing and overseas investment.
rEViEW oF 2014
In 2014, the International Trade Business Divi-
sion scaled up competitiveness in the export/
import business and FX/remittance transfers by
fostering FX specialists and strengthening ser-
vices. This led to gaining the No. 1 market share
position in export performance and foreign cur-
rency money exchange performance with USD
199 billion and USD 3.7 billion, respectively.
Woori Bank expanded its sales channel exclu-
sively for foreign workers to cover not only Seoul
metropolitan area, but also Gyeongsang-do
region, and secured non-face-to-face marketing
channels to enhance convenience in accessing
financial services for foreign workers in Korea.
Woori Bank reinforced its status as a frontier
in the FX market, by being designated as the
treasury bank of managing foreign currency re-
serves for the National Pension Fund, one of the
top four pension funds in the world. Also, Woori
Bank took the lead in establishing the yuan trade
settlement scheme through signing an agree-
ment to promote won-yuan settlements with the
Bank of Communications in China.
Stronger Competitiveness in Export/Import
Banking and FX Money Exchange/Remit-
tance
Leveraging our strength from being Korea’s No.1
bank in corporate banking, we achieved export/
import volume records of USD 313.2 billion in
2014, taking up a market share of 26.4% out
of Korea’s top eight banks. Export performance
achieved a market share of 30.8% with USD
199 billion, to achieve No.1 market share among
Woori Bank Annual Report 2014 039
Korea’s top eight banks. Also, Woori Bank’s
yuan trade settlement schemes that are on the
foreign currency money exchange volume re-
increase. As part of these efforts, we launched a
corded USD 3.7 billion to gain the No.1 market
global deposit product package for yuan, as well
share among Korea’s top eight banks, by set-
as training specialists on yuan trade settlements,
ting up money exchange centers(especially as
and provided marketing support services for
a foreign currency money exchange operator in
yuan trade settlements. We will establish good
Gimpo int'l airport) in areas highly frequented by
cooperative relationships with the government in
tourists from home and abroad, and proactively
line with the market expansion, ensuring prompt
responding to the FX market resulting from the
response to changes.
increasing number of foreigners coming to Ko-
rea. By actively responding to the new market
for foreigners, such as covering wage remittance
for foreign workers and foreigners’ investment
in domestic capital, remittance volume was re-
corded at USD 477 million.
Expansion of Channels and Services
Specialized for Foreign Workers
PLANS For 2015
In 2015, the International Trade Business Divi-
sion aims to foster specialists in international
trade and improve the quality of support as
well as provide distinctive customer-specific
services in export/import banking services and
foreign currency money exchange/remittance as
in 2014, to expand our market share. In order
In 2014, the International Trade Business Division
to meet foreigners’ higher demands for money
raised the convenience of transactions through
exchange/remittance, services and channels will
flexible operating service hours and bolstering
be further reinforced. Based on the knowledge
customer contact points for FX catering to the
accumulated by conducting operations as a
customer needs of foreign workers. FX services
treasury bank for foreign currency reserves for
are even available on the weekends in the 8
the National Pension Fund, we will reaffirm our
branches selected in the Seoul metropolitan
status as a leading bank in FX by attracting new
area with a high population of foreign workers;
high net worth customers, while also doing our
in particular, an FX Remittance Center, which
best to establish yuan trade settlement schemes
exclusively provides specialized services to for-
that meet the increasing demands of customers
eign workers, operates in Wongok-dong, Ansan.
for yuan trade settlements.
totAL VoLUME oF
ExPort & iMPort
(Unit: USD billion)
3
1
0
2
4
1
0
2
6
.
2
2
3
313.2
For foreign workers residing in the Yeongnam
area, the Oedongsandan Branch in Gyeongju
is open on weekends to provide services, while
the Gimhae FX Remittance Center also provides
specialized services for foreigners in the Gimhae
area. As a result of an alliance with the Human
Resources Development Service of Korea, we
provide total FX services for our foreign custom-
ers, including overseas remittances of departure
guarantee insurance and dormant insurance
claims.
Dominance in the Yuan Trade Settlement
Market
In June 2014, Woori Bank signed an agreement
for won-yuan settlements with Bank of Commu-
nications in China, striving to dominate the won-
Strength in Our ValueS 040
finanCial
Market BuSineSS
The Financial Market Business
Division consists of the Treasury
Department that manages bank-wide
liquidity, the Trading Department
that handles F/X Dealing, marketable
securities and financial derivatives
and, the Settlement Support
Department that performs the back
office duties. In particular, we are a
solid market leader among Korean
banks in terms of trading derivative
products, such as forwards, swaps
and options based on a wide range
of underlying assets, including
interest rates, foreign exchanges,
equities and commodities.
rEViEW oF 2014
The Financial Market Business Division is the
primary body that overseas funding and financial
market activities such as FX, securities, com-
modities, and derivatives trades. The division
efficiently balances assets and liabilities through
these activities to continually improve profitability
while maintaining sound liquidity. In 2014, the
division focused on improving NIM by maintain-
ing optimal loan-deposit ratio, liquidity position
and low-cost fundings. Bracing for the possible
decrease of the BIS ratio due to Woori Financial
Group’s privatization, we enhanced the capital
ratio by issuing contingent capital securities in
both domestic and foreign currencies. The for-
eign currency contingent capital issue in the first
half of the year was the first of its kind for Korean
banks and paved the way for others to follow.
Through these measures, the Bank’s liquidity
ratios in domestic and foreign currencies are
well above the regulatory guidelines, as well as
Woori Bank Annual Report 2014 041
strengthening BIS ratio. We also strengthened
• Expaning into new funding markets and
our competitiveness in FX and derivatives trad-
diversifiying funding means to improve
ing through expanding trading currencies and
funding stability
provided various hedging services to assist our
customers with their risk management.
Optimized Liquidity Management
• Issuance of senior bonds and contingent
capital securities in domestic and foreign
currencies
In the second half of 2014, Woori Bank was
the 1st Korean bank to issue yuan-denominated
bonds Kimchi Bonds. This groundbreaking 200
million yuan Kimchi bond, along with HKD 3.88
million of private placement bonds and EUR 13
million of P-Notes are significant in that they
diversify our funding currencies, reduce dollar
dependence, and increase stability of foreign
In 2014, the Financial Market Business Division
currency liquidity. dollar dependence. We also
contributed to the stable BIS ratio, by issuing
achieved stable management of foreign curren-
KRW 7.1 trillion in senior bonds, KRW 0.16
cy reserves by managing liqudity buffer above
trillion in domestic currency contingent capital
the regulatory guidelines set by the Financial
securities and USD 1 billion in foreign currency
Supervisory Service.
contingent capital securities at lower interest
rates compared to other banks. Especially the
foreign currency contingent capital securities
was the trailblazer for Korean banks by being
the 1st ever Korean bank to successfully issue
them under the new Basel III standards. In or-
der to prepare for a possible BIS ratio decrease
from Woori Financial Group’s privatization pro-
cess, we raised 0.7% of the Bank’s BIS ratio by
issuing USD 1 billion in foreign currency contin-
gent capital securities.
• Compliance to regulatory guidelines
As of the end of 2014, Woori Bank was well
above the regulatory ratio set by domestic fi-
nancial supervisor through proactively manag-
ing surplus liquidity to achieve 123.10% do-
mestic currency liquidity ratio, 121.29% foreign
currency liquidity ratio and 253.66% medium
and long-term foreign currency funding ratio.
Liquidity Ratios
(Unit: %)
Liquidity Ratio (KRW)
Liquidity Ratio (FC)
121.58
105.20
126.71
109.25
125.86
120.75
127.89
124.99
131.66
128.57
138.63
117.66
123.10
121.29
Dec-11
Dec-12
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
155
145
135
125
115
105
95
Strength in Our ValueS 042
Strengthened Competitiveness in F/X and
Derivative Tradings
PLANS For 2015
In 2015, the Financial Market Business Division
In 2014, the Financial Market Business Division
will maintain the Liquidity Coverage Ratio (LCR)
focused on strengthening our competitiveness
at an optimum level by managing high-quality
in volatile market and changing market environ-
liquid assets and controlling net cash flows.
In order to effectively manage liquidity, we will
diversify funding maturities, and reducing financ-
ing costs by increasing CD issuance. In addition
to liquidity, we will continue to diversity trading
strategies in foreign exchange, derivative arbi-
trage, and hedging on currencies and interest
rates to increase profitability on trading activities.
We also plan to achieve the No.1 market share
in foreign exchange and derivative transactions
with large enterprises and major government
agencies. Moreover, we will be the first Korean
bank to structure options on European stock in-
dexes and commoditiesto provide hedging tools
to securities and insurance companies. This is
expected to increase our non-interest profits.
ment.
• F/X Trading
In foreign currency trades, Woori Bank has
strengthened trading activities in Mexican
Peso, South African Rand, Polish Zloty, Rus-
sian Ruble, and Chinese Yuan, diversifying
portfolio of trading currencies. Also, we were
selected as a market maker in the won-yuan
direct dealing market by the Bank of Korea and
the Ministry of Strategy and Finance, in addi-
tion to be the first Korean bank to successfully
trade won-yuan forwards.
• Derivatives
In derivative markets, we strengthened deriva-
tive trading and profitability by increasing arbi-
trage transactions and taking positions through
forecasting market variables, such as domestic
and international policies and fluctuations in
demand and supply. We also launched our FX
SOS system to our SME customers. This sys-
tem provides real-time consultation services on
foreign exchange, including market conditions,
outlooks and risk management.
Woori Bank Annual Report 2014 i
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providing
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total Number of SME Customers
963,968
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046
SMart
Banking
The Smart Banking Business Division is
in charge of establishing Woori Bank’s
strategy for smart banking, as well as
the exploration of new markets. In order
to make a prompt response to the smart
banking market that demonstrates
exponential growth, while also achieving
market dominance in the electronic
payment/remittance market in alliance
with ICT companies, the Smart Banking
Business Department and the FinTech
Business Department was formed within
the division. As of the end of 2014,
13.81 million customers have subscribed
to using Internet Banking and Smart
Banking services. Along with about 7,100
ATMs and by utilizing state-of-the-art
technologies through smart phones and
the internet, we strive to become a bank
that is always close to customers.
rEViEW oF 2014
In 2014, the Smart Banking Business Division
opened new smart banking services, so that we
can provide convenient smart banking services
to customers. We also launched ‘Woori Mobile
Bankbook’, an innovative way of making trans-
actions without a bankbook, which is the first
of its kind in the financial industry. In addition
to this, we improved customer convenience by
providing various services, including the ‘Smart
Manager’ services, exclusively for managing
online customers and convergence services of
non-face-to-face channels and branches. We
strove to secure the future financial market by
playing a leading role in launching the ‘Bank
Wallet Kakao’, being implemented jointly by the
banking sector in the rapidly growing mobile
payments market.
Providing New Smart Banking Services
Aiming to provide better financial services to
customers, Woori Bank upgraded its smart
banking services. The access stages of transac-
tions were reduced from five to three stages to
improve the convenience of users, which also
provided better User Interface (UI) and User Ex-
perience (UX). Moreover, we complied with mo-
bile accessibility guidelines and provided a new
form of banking transactions, including inquiries
and transfers through a security keypad to se-
nior customers who prefer traditional banking
services, as well as ensuring socially vulnerable
groups such as the disabled have access to
convenient smart banking services.
Exceeded KrW 10 trillion of sales for
non-face-to-face products
As of the end of December (Unit: KRW trillion)
10.4
(No.1 M/S)
No.1 M/S iN SMArt
BANKiNG SUBSCriPtioN
rAtE AND UtiLizAtioN
rAtE AMoNG BANK-
WiDE CUStoMErS
As of the end of December 2014
(Unit: %)
Subscription Rate
Utilization Rate
42
25
Woori Bank Annual Report 2014 10.4
047
Leading the Smart Banking Market
Expanding the Future Financial Market
At a time when the number of smartphone users
In order to respond to the increasing size of
in Korea exceeds 40 million, customers demand
mobile payment services, Woori Bank played a
faster and more convenient services. After 46
leading role in the launch of ‘Bank Wallet Kakao’
years of providing banking services through
services that were implemented jointly in the
branches since August 1977, Woori Bank was
financial sector. We also strove to expand the
the first Korea’s financial industry to launch the
mobile payments market by launching exclusive
‘Woori Mobile Bankbook’ in 2014, an innova-
products, in alliance with Daum Kakao, and con-
tive way of receiving services through smart
ducting joint marketing activities. Meanwhile, we
phones without the need to visit branches with
are continuously seeking cooperation the leading
a bankbook. The existing electronic bankbook
companies in domestic and foreign ICT markets
only provided services such as lowering interest
and global FinTech companies to prepare for the
rates and updating bankbooks offline, as ad-
ditional services to financial products exclusively
for smartphones. However, the ‘Woori Mobile
Bankbook’ set a new paradigm that enabled
customers to check their own bankbook details
easily, as well as make withdrawals from ATMs.
As a result, in December 2014, we received the
Grand Prize in the Private Sector of the ‘Smart
Work Best Practice Contest’ hosted by the
Ministry of Science, ICT and Future Planning, in
recognition of the excellence of the service.
Increasing Customer Convenience via the
Omni-Channel Strategy
future market.
PLANS For 2015
In 2015, the Smart Banking Business Division’s
targets are to secure the competitiveness of fu-
ture channels to dominate the FinTech industry
as a new momentum for growth and to establish
smart work processes for improving channel ef-
ficiency. In order to strengthen profitability and
manage risks, we aim to provide the safest and
most convenient security services by proactively
targeting e-commerce companies and expand-
ing the ratio of transactions through non-face-
to-face channels. Moreover, Woori Bank will
Woori Bank improved customer convenience
achieve future growth by designing the future
by providing omni-channel customer services
vision of financial IT, including reinforcing market-
that integrate the services of branches and non-
ing capabilities through big data, as well as pro-
face-to-face channels, instead of multi-channel
viding high value to customers by continuously
services that were provided separately through
giving them access to better smart financial ser-
branches and non-face-to-face channels. Due to
vices.
the increasing use of non-face-to-face channels
these days, we provided the ‘Smart Manager’
services, which began in June, to enhance the
convenience of non-face-to-face customers.
Meanwhile, branches started services for the
‘Convenient Issuance of Digital Certificates’ in
November. In order to expand the convenience
of use for customers, we also started the ‘Smart
Loan Consultation’ services in February where
customers can get loan advice without having
to visit branches after making an application
through the internet and smart banking services
and agreeing to the provision of personal infor-
mation, as well as the implementation of ‘Smart
Convenient Loans’ that enable the extension of
loans without having to visit a branch.
Strength in Our ValueS 048
Corporate
Banking
The Corporate Banking Business Unit
is in charge of services for corporate
customers, including Korea’s top large
enterprises, such as Samsung, LG
and POSCO, to cater to the diverse
financial needs of corporate customers
in a timely manner. As a result of
providing exceptional services to the
highest number of large enterprises in
Korea, Woori Bank’s Corporate Banking
Business Unit prides itself in having
provided the best financial services to our
corporate customers, which has enabled
them to become global players during the
past 116 years. We will strive to provide
our expertise to a larger number of
customers.
rEViEW oF 2014
In 2014, the Corporate Banking Business Unit
strove to satisfy the financial needs of large en-
terprise customers. Woori Bank is currently ex-
ploring various financial needs through the ‘Woori
Diamond Club’, a meeting of the CEOs of large
Korean enterprises, while also strengthening the
relationship with large enterprise customers. As
of 2014-end, the Corporate Banking Business
Unit (including Corporate Finance Center and IB)
posted total assets of KRW 31.1 trillion, net in-
come of KRW 103.5 billion and an export/import
volume of USD 2,500.
Continuously Strengthening Relationships
As corporate customers developed into global
players, their financial needs have changed rap-
idly and have become more diverse. Woori Bank
currently runs the ‘Woori Diamond Club’, a meet-
ing of the CEOs of large Korean enterprises that
have been up and running since 2003. The club’s
12th anniversary marks a time to strengthen our
relationships with our corporate customers, as
well as provide services to respond to changes
in the environment by identifying the financial
needs of our customers in a timely manner.
total Assets of Corporate Banking
-end 2014
(Unit: KRW trillion)
31.1
total Credits of Main Debtor Groups
in 2014 (excluding management/
financial improvement)
(Unit: KRW trillion)
26.2
total Credit Exposure of
Main Debtor Groups
-end 2014
(Unit: KRW trillion)
37.4
Woori Bank Annual Report 2014 049
Developing Products to Improve Financial
Security
With the adoption of the IFRS in 2012, 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 sub-
ject to poorer financial soundness. As such, we
developed a customized product for exporting
customers by buying out export account receiv-
ables D/A (Document against Acceptance) for
high-net-worth, large enterprises and overseas
subsidiaries in main debtor groups on a Non-
Recourse Condition (before acceptance of the
shipping document and the fixing of the maturity
date by the importer). With this in place, corpo-
rate customers can avoid having to record the
liability for bills bought on account (resulting from
the adoption of the IFRS), and can also improve
their financial security.
PLANS For 2015
In 2015, the Corporate Banking Business Unit
plans to achieve qualitative growth through cus-
tomized business for each specific category.
We will achieve this goal by implementing cat-
Extending Support for Large Enterprises/
SMEs
At a time when CSR (Corporate Social Re-
egory specific marketing, accelerating syner-
sponsibility) is emphasized, Woori Bank signed
gies, strengthening fee business and efficiently
cooperation agreements with large enterprise
managing risks. Optimized financial services will
customers, and developed product packages
be provided for companies based on category-
to extend funds to SMEs with low interest rates.
specific factors and investment plans. Moreover,
As of 2014-end, we have extended funds worth
synergy will be maximized by exploring high-
KRW 161.9 billion to 381 companies through
performing partner companies and expanding
the Partnership Loan for Large Enterprises and
retail transactions for employees. Non-interest
the Partnership Guarantee Loan for Large En-
income will scale up by arranging and involving
terprises launched in August 2008, and we have
more in IB, including infrastructure finance and
also reduced cost of financing for SMEs by pro-
acquisition finance as well as intensive sales in
viding the SMEs Partnership Loan (launched in
niche markets with F/X, e-banking and derivative
May 2013). Serving the highest number of large
transactions. Assets soundness will be improved
enterprise customers in Korea, we utilize a
broad customer network to contribute to the
by shutting off the influx of low profit generat-
ing assets, and financial soundness will be en-
shared growth of large enterprises and SMEs.
hanced through risk management on the basis
of perceiving risk signals.
Woori Bank is the major creditor bank
of 16 large enterprises
(Total number of large enterprises under main
creditor bank management: 41)
31.1
37.4
Strength in Our ValueS 050
SMe
Banking
The SME Banking Business Unit is in
charge of financial services for corporate
customers, especially SME customers.
At the end of 2014 there were
approximately 960,000 SME customers,
whose total loans under management
amounted to KRW 70.3 trillion. Woori
Bank provides competitive products,
and 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
banking.
totAL NUMBEr oF SME
CUStoMErS
8.1%
3
1
0
2
4
1
0
2
7
6
3
,
1
9
8
963,968
totAL LoANS oF SME
BANKiNG
(Unit: KRW trillion)
3.7%
3
1
0
2
4
1
0
2
8
.
7
6
70.3
rEViEW oF 2014
In 2014, the SME Banking Unit achieved notice-
able results, such as increasing the total number
of SME customers to around 70,000 and in-
creasing the total loans of SME banking by KRW
2.5trillion. The SME Banking Unit led marketing
strategies that focused on attracting new high-
net-worth SMEs and securing their retention. As
in 2013, key categories were targeted, such as
policy financing, guarantee secured loans and
loans for equipment in 2014. For higher satis-
faction and service levels for SME customers,
various preferential programs were implemented
with a greater focus on training and developing a
specialized workforce for SME banking.
Implementing Marketing Activities to Target
High-yield SMEs
As in 2013, the SME Banking Business Unit pro-
vided wide-ranging marketing data on high-yield
SMEs and partner companies of large enter-
prises to help attract high-net worth customers
to branches in 2014. In January 2014, we also
launched the ‘High-yield Enterprise Master Loan’
to strengthen competitiveness, which involved
offering competitive interest rates and preferen-
tial ceilings for high-yield SMEs, to achieve an
impressive sales record of KRW 6.8 trillion for
its balance at the end of 2014. As a result of the
SME Banking Business Unit’s continuous efforts
to increase high-yield assets, the number of
high-yield SMEs of the level of BBB and above
increased from 228,678 at the 2013 year end by
26,883 to 255,561 at the 2014 year end.
Focusing Marketing on Industrial Complexes
In order to intensively attract enterprise custom-
ers located in industrial areas, the SME Banking
Business Unit expanded the target scope by re-
modeling the ‘Woori Industrial Complex Loan’, a
specialized product for enterprises residing in in-
dustrial complexes, while also provided market-
ing data about these enterprises at branches. As
a result of intensive marketing activities target-
ing industrial complexes, the balance of ‘Woori
Industrial Complex Loan’ increased from KRW
Woori Bank Annual Report 2014 051
468.2 billion at the end of 2013 by KRW 536.2
ogy Enterprises’ in August 2014 and the ‘Woori
billion to KRW 1,004.4 billion at the end of 2014.
Creative Enterprise Partner Loan’ in October
2014.
Vitalizing Policy Financing & Guaranteed
Loans
In 2014, the SME Banking Business Unit fo-
cused on policy financing and guaranteed
Preventing Customer Turnover & Supporting
Consulting Services
In order to continuously increase assets, despite
loans, so that the balance for each increased
intensive competition with other banks, the SME
by KRW 1,007.1 billion and KRW 265.4 billion,
Banking Business Unit newly implemented the
respectively. In order to increase policy financ-
‘Early Bird Customer Retention’ program, pre-
ing, the SME Banking Business Unit signed new
venting the loss of existing customers to other
agreements with local governments and public
banks. The program proactively identified the
institutions, and also conducted various train-
ing programs and provided on-site support by
needs and complaints of customers before the
existing loans expired, so that customers whose
bolstering competitiveness in interest rate for
expiry date was coming up did not go to other
policy financing. In particular, the balance of indi-
banks. Woori Bank has been providing corpo-
rect loans (on-lending loans) targeting high-yield
rate consulting services for the longest time out
SMEs among policy financing products, showed
of all Korean banks. In 2014, we contributed
an outstanding improvement with an increase
to the increase of sales and operating profits of
of KRW 1,028.6 billion year-on-year. In order to
corporate customers through 65 consulting proj-
increase guaranteed loans, in July 2014, we
ects conducted. The Corporate Consulting Team
launched and sold the ‘Woori Group Purchasing
within the SME Banking Business Unit provides
Guaranteed Loan’ as an exclusive agreement
various types of consulting services for improv-
through the Korea Credit Guarantee Fund and
ing the corporate values of corporate custom-
joint development works.
ers, including consulting on management, CFO,
family business succession and operation.
Providing Diverse and Specialized Products
In 2014, the SME Banking Business Unit
PLANS For 2015
launched diverse specialized products, including
In 2015, the SME Banking Business Unit plans
the ‘High-yield Enterprise Master Loan’, a pref-
to continuously increase high-yield assets, by
erential product for high-yield SMEs to increase
launching new specialized products for the main
SME banking loans, and the ‘Woori Group Pur-
chasing Guaranteed Loan’, a product of exclu-
target groups to attract new customers and by
providing competitive interest rates for existing
sive agreement in alliance with the Korea Credit
corporate customers to prevent their turnover.
Guarantee Fund. In order to strengthen the
In the end, taking into consideration the active
Bank’s profitability by taking measures against
overseas expansion of SMEs recently, the SME
reduced loan-deposit margins due to now com-
mon low-interest rates, we launched the ‘Woori
Banking Business Unit plans to strengthen re-
lationships with existing customers and attract
Export Promotion Finance’ and the ‘Exporting
new customers through a new overseas expan-
Company Master Loan’, which are specialized
sion program that utilizes the Bank’s overseas
products targeting export/import companies that
network.
conduct many FX transactions. In line with the
government’s policy on vitalizing technology fi-
nancing, we strengthened our support for SMEs
with outstanding technology, by launching the
‘Woori Creative Loan for Outstanding Technol-
Strength in Our ValueS 052
inStitutional
Banking
totAL DEPoSitS oF
iNStitUtioNAL
BANKiNG
-END 2014
(Unit: KRW trillion)
6.8%
3
1
0
2
4
1
0
2
.
1
9
1
20.4
The Institutional Banking Business Unit
is divided into the Institutional Sales
Strategy Department, to cater to the
central government, local governments
and public institutions, and the Public
Fund Sales Department, to manage the
municipal and provincial treasuries of
local governments. Moreover, we are
the only bank to utilize specialists in
institutional operations (institutional RM)
to provide first rate financial services
to institutional customers. As of 2014,
our institutional customers include the
Seoul Metropolitan Government and its
25 district offices, the Ministry of Land,
Infrastructure and Transport,
the National Health Insurance Corporation
and the Korean Railroad Corporation.
The presence of such customers reaffirms
our position as Korea’s largest primary
bank for public institutions.
rEViEW oF 2014
The Institutional Banking Business Unit has left
a mark on history by being a treasury bank for
major public institutions for 100 years, by being
reselected as the Seoul Metropolitan Govern-
ment’s treasury bank, as well as acting as the
treasury bank for 24 district offices. During a
period of 100 years as the Seoul Metropolitan
Government’s treasury bank, Woori Bank has
become a leading financial institution for local
residents by contributing to regional develop-
ment and expanding the scope of transactions
with the central government, local governments
and major public institutions, including affiliated
institutions of the Seoul Metropolitan Govern-
ment. In line with the government’s policies,
Woori Bank provided specialized services for
the governmental agencies’ planned relocation
to the provinces, to attract 34 institutions out of
102 institutions that completed the selection of
its transaction bank as of 2014, with plans to
attract more institutions as relocation continues
until 2016. As of the end of 2014, the Institution-
al Banking Business Unit operated total deposits
of KRW 20.4 trillion and total loans worth KRW
3.2 trillion, while maintaining relationships with
about 3,700 institutional customers.
Woori Bank Annual Report 2014 053
Making History as the Seoul Metropolitan
Government’s Treasury Bank for 100 Years
borne from being the treasury bank for 100
years. Moreover, we were able to develop world-
Since the treasury agreement signed with
Gyeongseongbu (Seoul) in 1915, Woori Bank
has done a remarkable job in acting as the
Seoul Metropolitan Government’s treasury bank
for 100 years, by collecting tax revenue and by
managing the payment of annual expenditures.
In 1988, we started the first comprehensive
management system for revenues and expendi-
tures, and established the OCR Center in 1991,
class management capability as a treasury bank
by establishing the ETAX system in 2001, the
annual expenditure e-banking system in 2004,
the revenue e-banking system and the compre-
hensive management system for treasury bank
affairs in 2011. Based on the advanced treasury
management system and high-quality specialists
in the relevant fields, Woori Bank has become a
“Partner of Seoul Hope” that contributes to the
Seoul Metropolitan Government’s tax and finan-
cial management tasks, the convenient tax pay-
ment of citizens and the development of local
communities.
Seeking New Projects from the New
Government
In order to seek new governmental projects
where financial institutions can make contribu-
tions and support the R&D projects initiated by
the government, Woori Bank has set up a R&D
Team within the Institutional Banking Business
Unit, to conduct R&D projects together with the
Ministry of Trade, Industry and Energy (MOTIE)
since 2013. We have continuously maintained a
business agreement with the Korea Foundation
for the Promotion of Private Schools, while also
participating in the program for ‘Halving Dormi-
tory Fees’ pledged by the new government.
Moreover, we continuously conduct cooperative
projects with the Korea Institute of Startup &
Entrepreneurship Development to support the
startup enterprises of the Small and Medium
Business Administration, thereby establishing
the self-reliance foundation for startup entre-
preneurs and SMEs through the 2014 Korea
Startup League.
Strength in Our ValueS 054
Searching for New Growth Engines By
Initiating New Projects
PLANS For 2015
In 2015, the Institutional Banking Business Unit
The Institutional Banking Business Unit not only
continuously searched for new projects and
provides banking services for institutional cus-
joint projects, and actively participated in new
tomers, but also offers business opportunities
projects initiated by the government, to provide
aligned with new projects undertaken by institu-
financial services that help establish the self-
tions for SMEs and individuals. In particular, we
reliance foundation of SMEs. Moreover, we reaf-
were National Pension Service’s only bank to be
firmed cooperation with the Seoul Metropolitan
selected for foreign currency control in 2013, to
Government and its affiliated institutions by
promptly provide foreign exchange and secu-
being reselected as the Seoul Metropolitan Gov-
rity trading services. In addition, we have been
ernment’s treasury bank, being able to provide
selected for Korea Electric Power Corporation
financial services that help with joint projects and
(KEPCO), KCA, Korea East-West Power and
individuals. Also, when the relocation of public
BIFC that moved to the Innovation City, while
institutions begins in full scale, we will focus
also assisting in providing financial services for
SMEs through an agreement with the Korea In-
stitutional Complex Corporation.
on institutional banking business through the
nation-wide network to help usher in an era of
decentralization, by setting up branches in new
‘Innovation Cities’.
Major institutional Customers of institutional Banking
• Local Government
• Public Agency
Woori Bank Annual Report 2014 055
inveStMent
Banking
The IB Business Unit provides a variety
of IB services, including syndicated loans
(M&A, SOC, etc.), securities investments
(stocks, collective investment securities,
equity-linked securities, etc.) and the
granting of credit. We offer customized
financial structures that cater to the
needs of the project funds that our
corporate customers pursue based on
strong relationships with them. For the
first time as a Korean bank, Woori Global
Market Asia Ltd., specializing in overseas
IB investment in Hong Kong, was
established in October 2006. As such,
Woori Bank has proactively tapped into
overseas IB markets by scaling up capital
in October 2013.
rEViEW oF 2014
In October 2014, the global economic situation
was aggravated due to the financial crisis enter-
ing into a recovery phase, with quantitative eas-
ing in the U.S. and the volatility of global equity
and bond markets going back to previous levels
seen before the financial crisis.
Implementing Selective Business Initiatives
In Korea, major annual macro-economic indica-
tors show positive signs. Nevertheless, recovery
is slow in industries like construction, shipbuild-
ing, maritime and steel, while marginal business-
es are increasingly proactive. As such, the IB
Business Division carried out selective business
initiatives that take stability and profitability into
consideration.
First, we made efforts to forge cooperative ties
with financial institutions, government agencies
and enterprises, while achieving outstanding
Strength in Our ValueS 056
performances in relevant fields by focusing sales
PLANS For 2015
capacity on power generation/energy and M&A.
As a result, as of the end of 2014, the division
holds KRW 11 trillion in total assets (includ-
ing off-balance sheet assets). We raised asset
soundness by continuously implementing port-
folio rebalancing through active management of
low-profit assets and potentially insolvent assets.
Moreover, we improved profitability by increas-
ing the volume of loans for high-profit projects,
so that large profits in the form of from dividends
and sales were recovered from high-yield invest-
ment assets that have been previously invested.
In 2015, the IB Business Division will focus its
capacity on power generation/energy and M&A
to strengthen its competitiveness in the IB mar-
ket where competition is growing. We will also
proactively take part in overseas projects, in ad-
dition to existing projects focusing on domestic
markets, to enhance profitability and acquire
high-yield assets. In addition to overseas proj-
ects in alliance with policy finance institutions,
we will utilize the Bank’s overseas network,
including the overseas office in Hong Kong, to
vitalize overseas IB businesses by searching and
participating in high-yield SOC projects and syn-
dications.
total Assets of investment Banking
-end 2014
(Unit: KRW trillion)
11.0
Loans
40%
Off-balace
sheet items
41 %
Securities
19%
investment Banking organization
investment Banking
Division
Investment
Banking Dept.
Project
Finance Dept.
Woori Global Mar-
kets Asia Ltd. HK
IB Strategy
Corporate Finance
Shipping & Aviation
M&A
Principal Investment
ABS
SOC
Power & Energy
Overseas Sales
Sales Support
Woori Bank Annual Report 2014 03
enhanCing
openneSS
to Serve
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V
E
total Number of Customers
More than 20 million
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060
real eState
finanCe
For systematic and professional
management of real estate financing,
the Housing Finance Division has been
transformed into the Real Estate Finance
Business Unit. Also, the unit manages the
National Housing Fund of the Ministry of
Land, Infrastructure and Transport as a
general treasury bank. We strive to satisfy
the diverse needs of our customers by
providing products that build on Woori
Bank accounts, as well as the National
Housing Fund products that are available
for those on a low-income.
Demand-side Housing Subscription
Loans
(Unit: %)
39.7
(No.1 M/S)
rEViEW oF 2014
In 2014, the Real Estate Finance Business Unit
ranked 1st in M/S amongst national housing
funds. In recognition of excellent performance
over the past 6 years, we have been providing
a variety of real estate finance products to our
customers as a general treasury bank for the
National Housing Fund. We also made a pre-
emptive response to the prolonged recession
in the real estate market and led the market in
generating demand for real estate financing by
searching for new markets.
Being Selected as the Lead Agency for
Standard PF Loan
The Standard PF Loan is a product package
consisting of the ‘Intermediate-term Loan’ and
the ‘Baro Dream Loan’, a non-recourse ac-
counts receivable loan that supports construc-
tion expenses of subcontractors. By satisfying
the needs of individuals for housing, SME sub-
contractors and large enterprise construction
companies, the Standard PF Loan has become
a representative product in the PF real estate
finance market.
Expanding Our Customer Base as a General
Treasury Bank of the National Housing Fund
The National Housing Fund project is important
in broadening the options for consumer prod-
ucts (including products for the socially vulner-
able) of real estate financing. Woori Bank has
taken the lead in seamlessly procuring and ex-
Woori Bank Annual Report 2014 061
ecuting funds as a general treasury bank of the
National Housing Fund. As of the end of 2014,
Woori Bank had a market share of 39.7% in
loans for subscribers and a market share of 27%
in savings for housing subscriptions. Through-
out 2014, 1.15 million new customers prepared
themselves to fulfill their dream to own a house
using savings for housing purchases. Woori
Bank will strive to establish a system where
more customers can get access to the National
Housing Fund.
Leading the Domestic Real Estate Finance
Market
In 2014, the Real Estate Finance Business Unit
led in developing products and reforming the
PLANS For 2015
system in order to make preemptive responses
to changes in the financial market. We are ac-
tively engaged in supporting the soft landing of
household debts and the house-poor and en-
suring housing market stabilization, by launching
the ‘Safe House Rental Loan’, a new concept of
loans for rental deposit that can take care of the
tenants’ concerns about rental deposits and re-
duce the burden of raising large sums of money
all at once, and the ‘My House Didimdol Loan’,
integrating the money for purchasing from the
National Housing Fund (including for first-time
buyers) and the preferential type of Korea Hous-
ing Finance Corporation’s Bogeumjari loans. We
also contributed to the government’s housing
finance support policies and in ensuring housing
market stabilization by being the only bank to
support the ‘Shared Mortgage’, which adopts a
new advanced financial engineering tool.
In 2015, we will continue to dominate market
share by ranking 1st in the National Housing
Fund. We will strive to attract new loans for sub-
scribers 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 way through our accumulated expe-
rience in financing and operating funds. We will
also actively take part in the government’s real
estate finance measures, and actively support
extending funds to those who want to purchase
their own houses by securing optimal profitability
and an asset structure with the lowest risk. This
will enable us to expand mortgage loans to KRW
4 trillion, to play a leading role in attracting con-
sumer banking assets even in times of economic
downturn.
HoUSiNG SUBSCriPtioN
SAViNG
(Unit: %)
0.5%
3
1
0
2
4
1
0
2
.
5
6
2
27
Strength in Our ValueS 062
penSion & truSt
BuSineSS
As the retirement pension market has
been expanding, the Pension & Trust
Business Division was launched in 2009
to support the efficient management
of retirement resources for retail
customers. From the initial stage of
adopting the retirement pension system,
we provided differentiated customized
services through comprehensive
retirement pension consulting. We
lead the retirement pension market by
providing total financial services, which
offer customized optimal products
that suit our customers’ investment
tendencies through advanced processes
with seasoned investment specialists
available.
rEViEW oF 2014
In order to guarantee a stable retirement for the
workforce and prepare for changes in the labor
market, such as a rapidly aging population,
Woori Bank has been fostering customer-orient-
ed businesses with a long-term perspective.
Fostering Customer-Oriented Businesses
We provide the ‘Happy Life Retirement Pension
Newsletter’ once a month to companies and
workforces that subscribed, which covers major
issues and recent trends for retirement pen-
sions, information on asset management and di-
verse information. We launched the ‘Happy Life
Lifetime Bankbook for Retirement Pensions for
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
being managed. We developed and managed a
‘Maturity Designated Time Deposit’, which en-
ables customers to designate their individualized
maturity, depending on their financial plans and
needs.
Woori Bank Annual Report 2014 063
Our retirement pension systems were upgraded
to reflect the major amendments in the Em-
ployee Retirement Income Security Act. We also
offer a variety of services, including providing
updates and notifications to subscribers through
the ‘Welcome Letter’, conducting follow-up
through the Bank’s ‘Happy Call System’ and
providing educational support through the ‘Re-
tirement Pension Training Management System’.
PLANS For 2015
Having recognized retirement pensions as core
growth industries of the future, we are engaged
in active marketing. We do this by responding
to market changes to secure a stable customer
base and long-term profitability so that we can
dominate the retirement pension market early
on. In 2015, the Pension & Trust Business Divi-
sion plans to establish a foundation for sustain-
In 2014, the amount of retirement pension as-
sets stood at KRW 9,643.9 billion, up KRW
able growth by conducting customer-specific
marketing, while also strengthening business
2,121.9 billion from the previous year. The num-
competency to improve profitability and secure
ber of companies subscribed to retirement pen-
continuous growth as part of its efforts for quali-
sions increased by 1,330 from the previous year
tative improvement of trust management. We will
to 28,011, showing an increase of 5.0% as of
continuously focus on enhancing the efficiency
the end of December, 2014. Also, the number
of sales channels. Based on an abundant spe-
of subscribed employees increased by 115,135,
cialized workforce, supportive training systems,
which is an increase of 10.4% to 1,226,400
diverse customized products and up-to-date
year-on-year.
management expertise, we will lead the retire-
ment pension market.
totAL ASSEtS oF
rEtirEMENt PENSioN
(Unit: KRW billion)
totAL NUMBEr oF
CoMPANiES
SUBSCriBED to
rEtirEMENt PENSioN
totAL NUMBEr oF
EMPLoyEES SUBSCriBED
to rEtirEMENt
PENSioN
28.2%
5.0%
10.4%
3
1
0
2
4
1
0
2
3
1
0
2
4
1
0
2
3
1
0
2
4
1
0
2
0
2
2
,
5
7
96,439
1
8
6
,
6
2
28,011
5
6
2
,
1
1
1
,
1
1,226,400
Strength in Our ValueS 064
Wealth
ManageMent(WM)
The Wealth Management (WM)
Division is in charge of overseeing
Private Banking (PB) services
that target High Net Worth (HNW)
customers. The WM Division consists
of the WM Strategy Department;
it establishes and implements
business strategies for PB services,
and manages Woori Bank’s affiliated
products (funds, bancassurance),
developing asset management
products and leading the retirement
market. As of 2014, we provide
Korea’s first-rate services in
comprehensive asset management
and consulting services to around
130,000 HNW customers through an
independent PB brand.
rEViEW oF 2014
In 2014, the WM Division hired and trained
about 180 new specialists as part of its ef-
forts in developing PB specialists. In order to
strengthen the asset management capacity of all
employees, we established a permanent training
system, online and offline, to provide training for
new products in a timely manner.
As a result, we achieved huge growth in the
fund and bancassurance markets, while around
10,000 new HNW customers started transac-
tions with Woori Bank. In recognition of these
results, we had the honor of winning the ‘Korea
Premium Brand Award’ for five consecutive
years and the ‘Customer-Preference Brand
Award’ for three years in a row.
Providing Systematic and Scientific
Financial Planning Services
In 2014, Woori Bank established a compre-
hensive asset management system to provide
customized investment strategies for analyzing
customers’ transaction information and their
investment trends, thereby we are able to eas-
ily and conveniently find optimal solutions for
customers. In recognition of the high interest on
retirement incomes, we also provide diagnostic
tools and consulting to prepare for retirement
based on expected retirement income.
totAL NUMBEr oF WM
CUStoMErS
(Unit: thousand)
3
1
0
2
4
1
0
2
10%
2
2
1
132
totAL DEPoSitS oF
WEALtH MANAGEMENt
BANKiNG
(Unit: KRW trillion)
3
1
0
2
4
1
0
2
2.4%
6
.
4
3
37.0
Woori Bank Annual Report 2014 065
Globalizing Private Banking (PB) Services
Woori Bank provides customized Private Bank-
ing (PB) services, catering to customer needs
in around 580 PB branches. The Bank provides
asset management consulting services and
seminars on taxation and real estate for potential
local customers, leveraging overseas networks.
PB services will also be globalized along with the
Bank’s expansion of overseas networks.
Launching ‘100 Years of Age Research
Team’ in Preparation for the Aging Trend
Fostering Specialized Private Bankers
In order to foster competitive private bankers,
Woori Bank launched the ‘100 Years of Age
Research Team’ in July 2012 in preparation for
Woori Bank operates PB Academy courses
according to different needs. Moreover, more
the advent of an aging population. The team
detailed training is provided for around 580 PBs
conducts R&D on processes and products to
prepare in advance for the financial demands of
the elderly population, which is likely to increase
across the nation by holding PB seminars for
self-control training and operating the PB Lead-
ers Club. We also provide training through UC
in scale. The Bank launched products exclusive-
video training programs on a daily basis, includ-
ly for retirees in 2014, including the ‘100 Years
ing affiliated products (funds, bancassurance),
of Shinyoung Youth Fund Series’ and the ‘100
taxation and real estate, to establish a cafeteria-
Years of Woori Youth Card’. We also continu-
type training system where the user can choose
ously provided retirement consulting services to
and listen to the training that is required.
senior customers, by producing retirement plan-
ning guidebooks and providing retirement train-
ing to employees of our corporate customers.
PLANS For 2015
In 2015, the WB Division aimed to become the
leading bank in comprehensive asset manage-
ment by placing the Asset Management Product
Development Team, which was divided into an-
other division, and the Customer Advisory Cen-
ter, which provides advisory services on taxa-
tion, real estate and legal affairs, under the same
unit. It is expected to become easier and more
convenient to promptly offer high-yield custom-
ized products for PB customers and provide a
comprehensive advisory service that meets the
needs of PB customers. By utilizing the com-
panies’ strengths to the maximum, we plan to
attract around 10,000 HNW customers next
year by implementing the Bank’s customized PB
strategies built upon the foundation of the bank’s
existing customers.
Strength in Our ValueS 066
ConSuMer
Banking
The Consumer Banking Business Unit is
in charge of conducting overall business
strategies for individual consumers,
finding new markets, managing the
retail organization, establishing business
channel strategies and setting business
strategies for universities and hospitals.
We run a separate division within the
Consumer Banking Business Unit for
wealth management that requires more
specialized services. We also work
towards improving customer satisfaction
with better products and services, by
continuously searching for new markets
and conducting CRM (Customer
Relationship Management) activities.
rEViEW oF 2014
In 2014, Woori Bank recorded growth of more
than 1 million new customers for three consecu-
tive years, exceeding 20 million individuals, while
also continuously developing differentiated and
innovative products. We provide first-rate finan-
cial products and services for different stages of
the customer life cycle through the Bank’s rep-
resentative projects for attracting new custom-
ers, including the Baby Project, School Project
and Company Project, contributing greatly to
retaining infants, students and office workers as
customers. We also participate in the govern-
ment’s projects for sharing growth, and this has
been done by launching the ‘Woori Happiness
Sharing’ product package, a nation-wide small
donation account, to provide the benefits of high
interest rates and tax reductions for customers
and the Bank while attracting new custom-
ers, including public officials and office work-
ers. Meanwhile, in order to meet the increasing
needs of customers, we increased the number
of portable branches to provide convenient ser-
vices to customers without limitations related to
time or space.
totAL DEPoSitS oF
CoNSUMEr BANKiNG
(Unit: KRW trillion)
5.2%
3
1
0
2
4
1
0
2
.
7
3
7
77.5
totAL LoANS oF
CoNSUMEr BANKiNG
(Unit: KRW trillion)
12.3%
3
1
0
2
4
1
0
2
4
.
3
7
82.3
Woori Bank Annual Report 2014 067
Nationwide Branch Network
-end 2014
(993 Branches)
Gangwon
(11)
Chungbuk
(16)
Gyeongbuk
(23)
Daegu
(29)
Ulsan
(10)
Busan
(56)
Gyeongnam
(29)
Gyeonggi
(220)
Inchon
(41)
Seoul
(463)
Chungnam
(24)
Sejong
(6)
Daejeon
(23)
Jeonbuk
(13)
Gwangju
(14)
Jeonnam
(12)
Jeju
(3)
Implementing the Company Project for
Attracting High-yield Companies and
Employees
In order to provide marketing tools that can help
retain customers at branches, and attract new
and potential customers, Woori Bank was the
first in the financial industry to implement the
Company Project based on the ID cards of of-
fice workers. The Company Project enables the
Developing the ‘Woori Happiness Sharing’
Product Package Aligned with the
Government’s Policies for Spreading
a Culture of Sharing
In 2014, Woori Bank proactively developed
the ‘Woori Happiness Sharing’ product pack-
age aligned with the government’s policies for
spreading a culture of sharing. The package
integrates “high interest rates, tax reduction
retention of all financial transactions of compa-
and donation” into one, by providing high inter-
nies and employees by providing a system for
est rates depending on the amount of card use
managing absenteeism and tardiness, as well as
and tax reductions for small donations made.
entrance and exit, including the services provid-
Starting with the Ministry of Health and Welfare
ed in alliance between Woori Card (ID employee
in March 2014, the Bank signed business agree-
card) and security companies (absenteeism and
ments with a total of 62 institutions as of the end
tardiness/entrance and exit control services).
of 2014, including local governments and public
Starting from May 2014, the project attracted
institutions. As a result, we attracted 200,000
2,176 companies, 30,000 employee cards and
installment savings accounts and 180,000 credit
50,000 salary accounts. Among the companies
cards from public officials and office workers in
enrolled, the bank paid for the rental costs of
government agencies and public institutions,
readers for absenteeism and tardiness/entrance
thereby creating a stepping stone for vitalizing
and exit services, to reduce the burden of costs
transactions with local governments and public
on companies, while also exploring new markets
institutions that were formerly customers of other
by attracting the employees of those companies
banks. In the future, we will increase the number
with salary accounts. Currently, the patent is
of public officials and employees attracted from
pending for BM, which will provide distinctive
government agencies and public institutions by
services as well as establish the infrastructure for
remodeling products, while signing business
security services for corporate customers in the
agreements with new and potential customers in
future.
government agencies and public institutions.
Strength in Our ValueS 068
Adopting and Operating the Portable Branch
Moving Devices
PLANS For 2015
In 2015, despite the continuum of low growth
Portable branches are cutting-edge banking
and low interest rates and the highly competitive
devices which create a branch environment
anytime, anywhere via the LTE telecommunica-
tion network, so that direct visits can be made
business environment, the Consumer Banking
Business Unit plans to concentrate on attract-
ing new customers and expanding the existing
to where customers are so as to offer the same
customer base to maintain a stable growth mo-
services as that of branches. The pilot pro-
mentum. Through a variety of projects targeting
gram began in April 2013, and now 50 portable
youth culture in alliance with YG Entertainment,
branches are up and running, as of the end of
we plan to increase the number of new custom-
2014. They are likely to significantly contribute
ers and attract new and existing customers as
to business activities that help customers meet
important customers through cross-selling. We
their specific needs, and lead the rapidly chang-
will also strive to secure profits by continuously
ing financial market through continued expan-
attracting the flow of funds with increases in
settlement accounts for transfers of apartment
management expenses, salaries and utility
charges.
sion.
Optimizing of the Channel Network
Amid the evolving financial environment,
branches have been selected in districts with
new growth potentials, such as ‘Innovation Cit-
ies’ and industrial complexes, and low-yield and
low-presence branches have been transferred
or relocated. The Bank operates 993 branches,
as of the end of 2014, including 29 new, 25 in-
tegrated and 15 relocated branches, thereby es-
tablishing a basis for creating profits through an
efficient branch network. In order to strengthen
non-face-to-face channels and provide better
customer satisfaction, we set up 190 new un-
manned automation systems, so as of the end
of 2014, a total of 2,166 systems are available
and 186 old ones were replaced.
Woori Bank Annual Report 2014 04
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072
riSk
ManageMent
Risk management has become essential
to strengthen the competitiveness of
financial institutions. Based on the know-
how accumulated through past crises,
Woori Bank adopted the Risk Adjusted
Performance Measurement (RAPM)
for the first time in the Korean banking
sector in 2002, to establish advanced risk
management systems by successfully
introducing the Basel II and III protocols.
Believing that profit sources are a result
of effective risk management, Woori Bank
will solidify its presence as a leading
bank through implementing top-tier risk
management.
Prediction of default rate within one
year after falling to ‘warning’ level
(Unit: %)
15%
63
Prediction of insolvent borrowers
3 months in advance
(Unit: %)
6.6%
83.1
rEViEW oF 2014
Aiming to become a clean bank through asset
quality improvement, the Risk Management Unit
carried out risk management policies by taking
into consideration uncertain economic situations
at home and abroad, including the tapering of
quantitative easing (QE) in the U.S. and the in-
crease in household debts and SME credit risk.
In order to minimize asset quality deterioration
preemptively and reflect credit portfolio policies
in performance evaluation, we established new
indicators of ‘improvement factors for high-net-
worth assets’. We also upgraded the early warn-
ing system for detecting potential insolvency at
an earlier phase, to improve discrimination and
efficiency. We periodically send out letters about
major issues regarding on-site risk manage-
ment and establish communication channels
to listen to on-site opinions. Besides these, the
total exposure management method, which
sets limits and estimates the borrower’s financial
statements based on future growth values, has
received recognition domestically and interna-
tionally to win the best prize at the 5th ‘thebell
Risk Manager Awards’. Meanwhile, we received
the best prize in the 5th ‘thebell Risk Manager
Awards’ in recognition of excellence.
Woori Bank Annual Report 2014 073
Improving the Performance Management of
RAPM
Upgrading the Early Warning System for
Insolvency Prevention
Woori Bank has the best corporate banking ca-
Since uncertainties continue in the financial envi-
pacity in Korea. We strove to preemptively estab-
ronment and profitability of enterprises are get-
lish a risk management system for corporate as-
ting worse, it is essential to develop a device for
sets by learning from past crises. As part of our
preventing insolvency risk at an earlier phase.
efforts to minimize potential insolvency by improv-
Therefore, Woori Bank established an early warn-
ing portfolio structure, we established and oper-
ing system for identifying signs of insolvency in
ated new standards to evaluate branches, ac-
corporate assets at an earlier time and managed
cording to the level of improvements shown in
appropriate post management systems. In 2014,
high-net-worth assets. Sound evaluations are ex-
indicators representing insolvency signs were re-
pected to be given as the ratio of high-net-worth
newed to reflect recent economic conditions,
assets increase. As a result, high-net-worth assets
thus improving the predictability and distinctive-
have increased in 2014, as shown below.
ness of the systems to a higher level. Moreover,
With the purpose of preemptively managing in-
dustries with potential risks, we have classified
Korean industries according to the level of poten-
tial risk. We also applied measures in different
follow-up management systems for borrowers
with signs of insolvency were developed, thus
minimizing the further possibilities of deterioration
into actual insolvency.
stages and minimized the restriction of business,
Aiming to enhance crisis response capabilities
including tightening interest rate approval autho-
rization and imposing expected losses. Mean-
while, we raised the efficacy of control for high-
against industries with potential risks, the number
of industries subject to monitoring under indus-
try-specific contingency plans was scaled up,
risk industries to remove regulatory blind-spots.
and countermeasure responses were strength-
We will actively carry out high-net-worth asset-
ened in each critical phase. As a result, efficient
driven portfolio policies continuously in the future.
and feasible responses can be better implement-
ed in each phase.
Category
High net worth assets
(EL ratio of less than 0.5%)
Low net worth assets
(EL ratio of exceeding 0.5%)
As of the end of
2013
As of the end of
June 2014
As of the end of
September 2014
42.8
22.7
45.5
19.9
48.5
12.3
Strength in Our ValueS 074
Establishing Communication Channels at
the Business Site
PLANS For 2015
In 2015, Woori Bank will actively enhance the
In order to establish and apply efficient risk
bank’s values by improving the portfolio structure
management policies, it is essential to commu-
of high-net-worth assets to respond promptly
nicate with the business site. As such, the Risk
to uncertainties arising from environmental
Management Department sends out letters with
changes. Accordingly, we will establish on-site
easy explanations about major risk manage-
oriented risk management systems by continu-
ment issues that are associated with branches,
ously communicating with the business site,
including enterprise credit evaluation and Risk
such as receiving feedback about credit evalu-
Adjusted Performance Measurement (RAPM),
ation models, providing operational risk analysis
and actively reflects the feedback from the site
for each branch and making regular visits to
into risk management policies.
high-risk branches. We will also increase the KPI
scores to increase high-net-worth assets, while
strengthening the regulation on high-risk assets
to improve asset quality. As such, we will comply
with the optimal Liquidity Coverage Ratio (LCR)
by taking into consideration profitability and
capital adequacy, according to the supervisory
authorities’ implementation of the Basel III liquid-
ity coverage ratio (LCR).
Receiving the Best Prize in the 5th ‘thebell
Risk Manager Awards’
Woori Bank was the first in the banking sector
to actually adopt and apply a system that pro-
vides exposure limits based on future cash flow
(total exposure limit management). This provides
exposure limits to each enterprise by looking at
the company’s future growth values (cash flows
from operating activities) as their future repay-
ment, while countermeasure plans are provided
systematically for exceeding the limit, including
notification to related credit analysis and approv-
al departments, receiving of repayment plans,
review of whether or not repayment plans have
been carried out and reported to the manage-
ment. For the total exposure management sys-
tem, Woori Bank won the Best Prize of the ‘2014
thebell Risk Manager Awards’ (October 30,
2014, hosted by: Moneytoday thebell), which is
the most prestigious award in risk management
for the Bank’s excellence in this field.
Woori Bank Annual Report 2014 075
ethiCal
ManageMent
In order to ensure transparent and rational
implementation of duties, Woori Bank
is aiming to become a reliable bank for
customers through differentiated ethical
management systems and ethical training
programs for employees. We also devised
the ‘Woori Code of Ethics’, which are
the principles involved in making proper
decisions or acting correctly, and all
employees are required to abide by these
principles, along with the ‘Fair Trade
Compliance Program’. As a result, Woori
Bank has created a corporate culture of
compliance where ethical management
and fair trade are implemented through
customer protection and upgraded
services.
rEViEW oF 2014
In 2014, Woori Bank strove to ensure that
employees could recognize and practice the
concept of ethical management. They were en-
couraged to apply the ‘Code of Ethics’ through
continued internal control and intensified em-
ployee training. An event titled ‘My Commitment
to Compliance and Sound Business’ took place
to intensify the awareness on practicing princi-
ple-based business through legal compliance,
preventing financial incidents and bolstering the
awareness of legal compliance. An award cere-
mony for outstanding employees in ethical man-
agement and compliance monitoring was held
to raise awareness of ethical compliance and
boost morale through incentives. Moreover, the
Bank operated the ‘119 (the Korean version of
911) Legal Services’, a legal portal system that
Strength in Our ValueS issues governed by
Compliance Dept.
1. Compliance / Ethical
2. Legal advisory
3. Anti-Money Laundering
4. Monitoring
5. Litigation
076
provides help with resolving legal difficulties that
arise on-site, and published a compliance guide-
line according to duties, so that ethical manage-
board available through legal advisory services,
to be immediately reflected in the Bank’s sys-
tems. This enables strengthened utilization of
ment can be further solidified in the Bank.
regulations, while making them practical and
conducive to work.
Practicing the Code of Ethics
Various programs have been developed to raise
awareness and keep actions in line with the
Code of Ethics among employees. By facilitating
Preventing Incomplete Sales in Advance
through Financial Incident Prevention and
Best Practice Training
a whistle-blowing system and protecting whistle
First, we strengthened the review of clauses and
blowers, as well as reporting on money received
new products in advance of the perspective of
and entertainment exchanges, Woori Bank
protecting the rights of financial consumers to
practices ethical management and prevents re-
lated incidents from happening again. In order
prevent incomplete sales, while continuously
conducting training for all employees by provid-
to effectively spread ethical management and
ing processes and reviews of compliance in
establish business management following such
addition to product transparency. We also ap-
principles, we have monitoring that is based on
pointed a Head Auditing Officer to conduct a
diverse channels, while the ‘On-site Ethical Man-
monthly review of legal compliance matters at all
agement Compliance’, the ‘Ethical Management
branches as a preventive measure and provide
Self-check’ and the ‘Check & Clean Day’ were
internal control training on best practices, so that
held on a monthly basis to strengthen the ethical
we can prevent incomplete sales and customer
mindset of employees. We also prevented unfair
complaints from arising. Second, we distributed
trade actions and established a sound culture
the ‘On-site Ethical Management Compliance’,
of signing contracts for our partner companies
a monthly training magazine for practicing ethi-
through a Clean Contract System.
cal management, to all branches, and strove to
Providing Site-oriented Legal Advisory
Services
raise awareness of ethical management by pub-
lishing the ‘Ethical Compliance Lessons Learned
From Best Practices’ every quarter.
In order to eliminate possible legal risks, we have
extended active support for field management.
PLANS For 2015
With the 119 (the Korean version of 911) Legal
In 2015, Woori Bank will provide proactive and
Services in place, Woori Bank provides legal
assistance from in-house lawyers for any em-
ployee requiring legal help in civic, criminal and
permanent compliance monitoring and estab-
lish prompt and convenient profit-oriented legal
services and an anti-money laundering man-
household matters. Also, we receive employee
agement system, thereby reestablishing and
suggestionsfor improvement through a bulletin
securing its compliance monitoring system. This
enables the Bank to reaffirm its position as a
leading bank without incidents and be the No. 1
bank in compliance. Moreover, we will contrib-
ute to social development by fulfilling our social
responsibilities for all stakeholders, including
customers, shareholders, employees, and the
nation and society, based on our trustworthy
ethical finance.
Woori Bank Annual Report 2014 077
ConSuMer
proteCtion
Woori Bank’s core values are putting
customer’s happiness first, pioneering
and challenging itself to create a better
future, leading the way in creating a
healthy financial order and fostering human
resources. Among our many values, we
put ‘customer happiness’ at the top of the
agenda. Based on this philosophy, Woori
Bank was the first among Korean financial
institutions to establish a Consumer
Protection Center, an independent unit
formed exclusively to protect consumers,
where 37 persons were hired as part of
the largest exclusive workforce in the
industry. By actively carrying out consumer
protection activities and fulfilling corporate
social responsibilities, we have secured
our position as the leading Korean bank
in consumer protection.
rEViEW oF 2014
The Consumer Protection Center establishes
the basic policies for consumer protection and
devises action plans, while also preventing con-
sumer damage claims to enhance consumer
rights by exploring and improving unreasonable
practices. We also promptly and fairly handle
damage claims by receiving complaints from
customers. Various activities are being imple-
mented in terms of requests for help and com-
plaints received from branches, such as consult-
ing with relevant divisions for resolution.
Strengthening Financial Consumer
Protection and Promoting a Culture of
Protection
In 2014, we improved customer convenience
through the improvement of unreasonable prac-
tices and advanced financial consumer protec-
tion, removing unnecessary waste factors by
enhancing work efficiency and provided on-site
Strength in Our ValueS 078
support to customers and employees. In order
Care System’. Woori Bank plans to promote
to promote a customer-oriented mindset for em-
ployees, we enacted the ‘Financial Consumer
Protection Charter’, which is the basis of Woori
such a culture in the financial environment, so
that consumer convenience and rights are en-
hanced through continuous implementation and
Bank’s policy direction for financial consumer
improvement of consumer-oriented systems.
protection. We protected consumer rights, devel-
oped products and sold them, resolved damage
Woori Bank’s Customer Information Protection
claims and developed the professional capabilities
For the purpose of strengthening customer infor-
of employees on-site.
We also strengthened financial consumer pro-
tection by adopting a prior consultation system
to reflect consumer views starting from the prod-
mation protection in 2014, Woori Bank promoted
the Customer Information Security Division, to
strengthen the security of management and tech-
nologies for consumer information protection and
to make the utmost effort to prevent the leakage of
uct development stage, promptly resolved the
customer information.
damage claims made, and minimized incomplete
sales by establishing a product sales process.
Developing Active Consumer Protection
Activities
Customer happiness managers standing at the
forefront of consumer protection on-site were or-
ganized under the name of ‘Cham (Responsible)
Forum’. They held training to prevent complaints
• Acquisition of the ISMS (Information Security Man-
agement System) certificate for the Korea Internet
Security Agency’s information protection manage-
ment system under the Ministry of Science, ICT
and Future Planning
• Establishment of customer information leakage
prevention system (DLP: Data Loss Prevention)
• Prevention of the use of general portable storage
devices by introducing the security USB and es-
tablishment of approval system for documents
by visiting 287 branches. Moreover, measures
taken outside
were taken so that prior reporting of complaints
and compensation for customer damage claims
• Implementation of the real-name system with mask-
ing(*) so that personal (customer) information can-
were improved, enabling customer complaints
not be identified when printed out from the personal
to be resolved promptly and damages to be
computer
compensated adequately. These programs mini-
• Establishment of a system that prevents fraudulent
mized customer inconveniences and allowed us
transfers through internet banking services
to stay in line with the fundamentals of consumer
• Provision of information security training programs
protection.
twice a year for all employees
PLANS For 2015
In 2015, in order to respond to the policy direc-
tion of ‘creating a consumer-oriented financial
environment’, we plan to actively carry out
projects that aim to ‘strengthen financial con-
sumer protection’. By adopting the ‘Complaint
Prevention ABC System’ as the standard for
preventing complaints on-site and establishing a
support and cooperation system, we will resolve
consumer complaints in advance. We also plan
to create a financial environment that values
the opinions of consumers by strengthening
monitoring before and after the development of
products by operating the new ‘Woori Product
Woori Bank Annual Report 2014 05
Building
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082
SoCial ContriBution
aCtivitieS
During the past 116 years, despite
colonialism and economic troubles,
as a native bank of Korea, Woori Bank
has practiced the spirit of sharing.
At a time when social roles and
responsibilities in the banking sector
are spotlighted, humanity, happiness
and hopefulness, as our three missions,
will be at the core of everything we do.
Diverse social contribution activities
unfold under the goals to realize the
vision of ‘sharing love and sharing in
finance fosters dreams and hopes’.
SoCiAL CoNtriBUtioN ACtiVitiES
oF Woori BANK
‘Woori Happy Society’ Program
To sponsor the underprivileged in local commu-
nities, Woori Bank practices the ‘Woori Happy
Society’ program. It is a regular and continuous
community-focused volunteering program that
creates sisterly ties with social welfare centers
in community and community childcare centers.
Besides such hands-on volunteering activities,
children having difficulties in participating in out-
door activities during summer and winter holi-
days are invited to take part in skating competi-
tions and summer camps. In January, a skating
competition was held for community childcare
centers in Seoul Plaza, run by Woori Bank in
front of City Hall. Twice every year, we operate
the ‘Woori Dream Tree Scholarship’ system for
children from community childcare centers. In
2014, around 320 children received scholar-
ships. Also, we regularly support 87 community
childcare centers and 110 social welfare centers
through our head office.
‘One Company, One Village’ Sponsorship
Program
Woori Bank conducts the ‘One Company, One
Village’ sponsorship program, which encour-
ages active exchanges to achieve shared growth
between urban and rural regions. The program
marked its 10th anniversary in April 2015 by
supporting ‘Yubyeolnan (Unusual/Peculiar) Vil-
lage’ in Anseong City, in Korea’s Gyeonggi Prov-
ince. We offer support in the form of volunteering
Woori Bank Annual Report 2014 083
during harvests, creating markets for the direct
quire emergency relief, along with the treatment
sales of agricultural products, rural village experi-
of nutritional deficiency.
ences for our employees and customers, village
refurbishment and income-generating activities
in rural villages. We also forged the ‘One Com-
pany, One Fishing Village’ program with Mong-
san-ri in South Chungcheong Province, and the
‘One Company, One Mountain’ program with
Namsan Mountain in Seoul for environmental
preservation and natural protection. To pay trib-
ute to our heritage, we have signed a contract to
protect Hongyuneung under the ‘One Company,
One Cultural Property’ program. Hongyuneung
is nationalhistoric 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 the
Daehan Cheonil Bank, the forerunner of Woori
Bank, to be established, sponsoring it with im-
Love Blood Donation Event
Since 2006, Woori Bank has been holding the
‘Love Blood Donation Campaign’ to help out in
July and August when there is a lack of blood
donations, with the 9th anniversary marked in
2014. During the campaign period, employ-
ees voluntarily held blood donation relays at
all branches, including the head office, Woori
Finance Sangam Center and Woori W Tower. In
particular, all of the employees who participated
in the blood donation gave their blood donation
certificates to the children of low-income house-
holds, suffering from rare diseases such as leu-
kemia and childhood cancer.
perial funds so that a national bank could take
root. We regularly conduct activities to protect
Accumulation of the ‘Woori Love Fund’ and
the ‘Woori Children’s Love Fund’
Hongyuneung, and include a tribute ceremony
as part of our new recruiting orientation, so as to
enhance their appreciation of company history.
During every New Year’s kick-off ceremony, the
CEO and the management take part in a com-
mitment event to practice ‘Cham (responsible)
Keumyung (finance)’, to pay tribute to the de-
ceased there.
Employees’ Volunteer Activities Together
with Families
As part of social contribution programs, we also
invite the families of employees to take part in
volunteering activities. Our employees and their
families visit the rural village that has a sisterly
tie through the ‘One Company, One Village’
program, where they weed sweet potato fields,
while also doing volunteering work by reproduc-
ing the scene of the King’s royal visit during the
Choseon Dynasty at Changdeokgung Palace. In
2014, we held the Hope T(-shirt) Drawing Cam-
paign together with the Korea Disaster Relief As-
sociation. Through the campaign, our employ-
ees made the Hope T(-shirt) with their children
during the summer holidays to deliver them to
the children of climate-disaster refugees who re-
Woori Bank’s employees are actively participat-
ing in promoting the culture of donation. They
voluntarily accumulate part of their monthly
salaries in the ‘Woori Love Fund’ and the ‘Woori
Children’s Love Fund’. By utilizing the ‘Woori
Love Fund’, we implemented the Together Woori
Love Support System, which explores and sup-
ports 120 outstanding social contribution pro-
grams annually. As for the ‘Woori Children’s Love
Fund’, it practices the love of our employees
through social contribution activities for children,
such as helping out poorly-fed children. Starting
from October 2010, we opened the ‘Woori Love
e-Sharing’ where customers can make dona-
tions when they make transfers through internet
banking, to take the lead in promoting the cul-
ture of small donations.
In order to establish the corporate culture of
‘Sharing and Volunteering’, Woori Bank plans to
continuously carry out diverse social contribution
activities. Moreover, we will directly and continu-
ously conduct various activities for sharing, to
ensure they are not a one-time event.
Strength in Our ValueS 084
Woori SMile
MiCroCredit
Woori Bank is engaged in Microcredit
to spearhead the efforts in practicing
socially responsible banking by
supporting the financially struggling
and socially vulnerable and neglected
customers. In 2009, Woori Bank led in
the contribution of KRW 10 billion
per year, totaling KRW 50 billion over
five years, together with WFH and its
affiliates, to establish and operate the
Woori Microcredit Foundation.
The foundation appointed famous people
from the religious, academic and social
welfare circles as outside directors,
ensuring the fairness of the project and
the support of citizens. There are nine
branches across the nation with 28
employees.
ACtiVE iMPLEMENtAtioN oF SoCiAL
rESPoNSiBiLity FiNANCE
Major Performance of Microcredit
Foundation
By extending support to the financially vulner-
able, the socially neglected and those who
lack financial access, we extended Microcredit
worth KRW 379 billion in 2013, leading the way
in practicing socially responsible financing. Mi-
crocredit services were presented with several
products: ‘Woori New Hope Seed’ for low-credit
low-income customers; and ‘Transit Loan’,
whereby citizens suffering from high-interest rate
loans could make the transition to low-interest
loans.
Through Microcredit services, Woori Bank ex-
tended approximately KRW 74.2 billion of credit
in 5,601 cases through 2014. In 2014, pursuing
the business goal of ‘Microcredit that makes citi-
zens smile’, we achieved a tremendous increase
in the Microcredit extensions, by approaching
customers and developing customized prod-
ucts. Woori Bank extended approximately KRW
21.2 billion of credit in 1,733 cases through
2014 (5,601 cases worth KRW 74.2 billion in to-
tal). It was not a mere voluntary activity: support
has been given so that recipients can become
self-sufficient through consulting and microcredit
events in the form of visiting, consulting and ex-
tending a helping hand on-site.
Woori Bank Annual Report 2014 085
Woori Smile Microcredit’s
Major Figures
(Unit: cases)
5,601
74.2
(Unit: KRW billion)
Microcredit Foundation’s Key Products
• Business Start-up Loan: A loan for small-scale
registered entrepreneurs to start a new business
• Working Capital Loan: A loan for individual en-
trepreneurs (who have already been in business
for over six months) to purchase products, raw
materials, etc.
• Loan for Facility Improvement Funding: A loan
for individual entrepreneurs (who have already
been in business for over six months) to im-
prove the facility of business sites.
Microcredit that Helps Achieve
Self-Sufficiency
We plan to expand support by exploring low-
income industries with high vulnerability and sign
agreements with traditional market merchant
councils and associations. Meanwhile, we will
secure exclusive channels for better accessibility
to Microcredit. In addition, we will take the lead
in promoting and sharing the genuine role and
purpose of Microcredit, together with society,
and spread these roles and directions by explor-
ing and facilitating best practices, to raise confi-
• Sunshine Loans for University Students and
dence among recipients.
Young People: A loan for emergency funding
for youngsters and university students who are
under 29 years old (under 31 years old for men
who served in the military).
Woori Bank will establish a foundation for the
self-sufficiency of low-credit low-income people
through Microcredit services, ensuring the stabi-
lization of livelihoods and improving their welfare.
• Loan for Deposit on Rental Housing: A loan
for people residing (or planning to reside) at
national rental housing (Land & Housing Cor-
poration)
• Loan for Successful Employment: A loan for
successful job seeker though successful em-
ployment package (Ministry of Employment
and Labor)
Strength in Our ValueS 086
eMployee
SatiSfaCtion
Woori Bank believes that a work life
where employees are happy and satisfied
is the foundation for providing the best
services to customers. As such, we
launched the Employee Satisfaction
Center in 2007, developing and
operating various programs to enhance
our employees’ satisfaction in their
workplace. As a result, we continuously
improved employee satisfaction levels at
work, so that we could become a vibrant
and happy bank with the mindset that we
can make our customers happy based on
owner awareness.
FACiLitAtiNG ProGrAMS
For ENHANCiNG EMPLoyEES’
SAtiSFACtioN LEVEL
The Project to Raise Employee Energy
We operated dynamic and interesting programs
to improve employee satisfaction. By supporting
not only workshops where employees partici-
pated, but also various pastime activities, we
catered to the cultural needs of our employees
and endeavored to assist them in the forma-
tion of networks. The ‘Woori Family Energy Up’
program was designed to facilitate the psycho-
logical stability of individuals, which has been
positively acclaimed by employees, and also to
induce improvement in family relations. The pro-
gram was to help improve communication and
increase excitement among employees. Efforts
are being made to practice Woori Bank’s belief
that happiness within employees’ families drives
the Bank’s competitiveness.
Travel Sketch Programs with Themes
Since July 2011, travel sketch programs have
been conducted as a representative family care
program, based on the concept that ‘employees’
satisfaction comes from a happy family’. On the
fourth Saturday of every month, we held a nature
experience program for each season where our
employees have fun with their children. Starting
with the ice fishing and strawberry picking expe-
rience programs held in January 2014, we held
various different programs 11 times throughout
the year, which ended with snow sledging in De-
cember. These programs have high participation
Woori Bank Annual Report 2014 087
rates from employees every month and many of
our employees look forward to them. By spend-
ing happy time with their families, our employees
reflect on the importance of family, something
that might have been overlooked due to con-
centrating on work.
Free Rental of the Wedding Hall at Head
Office’s Auditorium
Woori Bank provides free rental of the wedding
hall at the head office’s auditorium to our em-
ployees. Also, we provide a high-spec waiting
room for the bride and the pyebaek (a traditional
ceremony to pay respect to the newly-wedded
couple’s family) room through redecoration,
and also provide the CEO’s vehicle as the wed-
ding car. Based on this support, a total of 179
Present Status of Support in 2014
In order to increase concentration on work and
facilitate a corporate culture by resolving various
psychological problems involving our employ-
ees’ and their children and families, we help to
make reservations and pay for expenses for
psychological and legal issues associated with
employees and their families. Besides external
consultation services, we also have psychologi-
cal specialist at the Bank who carry out psycho-
logical tests, give psychological consultations
and hold small-scale lectures at branches. Also,
we seek ways to lower our employees’ stress
levels by providing daily meditation and herb
healing experiences once in the first half of the
year and again in the second half of the year.
couples got married at the head office’s wedding
‘Great Fun! Woori Tong Tong Craft Studio’
hall between 2012 and 2013, while 165 couples
got married in 2014. For 2015, we have already
received reservations for over 100 weddings,
which shows its popularity among our employ-
ees. The free rental of the wedding hall at the
head office’s auditorium not only reduces wed-
ding costs for staff, but also enhances their pride
in the Bank.
Team spirit boosting programs were strength-
ened this time on top of the existing survival
game, which included rafting, an ATV experience
and walking on beautiful boulevards. It is a pro-
gram that has been running for three years, and
a total of about 9,000 participants have joined in
the iconic fun program that has transformed the
corporate culture in workshops at Woori Bank.
By improving communication among employees
through fun workshops, we have created syn-
ergies in cooperation between employees and
enhanced work efficiency through this represen-
tative fun-filled program.
Strength in Our ValueS 088
‘Art is Tasteful, Pleasing Five Senses’
A Healthy and Vibrant Corporate Culture
This is a cultural program to enable employees
Woori Bank promoted systematic and continu-
and their families to enjoy a richer, more leisurely
ous health management of our employees by
life by giving them a cultural appreciation of art,
conducting comprehensive health check-up and
musicals and classical music and satisfying their
blood checks once every year. We also support
craving for a cultural life. Between 2012 and
the use of condominium across the nation, so
2014, we received a great response from our em-
that employees can enjoy lots of leisure time to-
ployees with collective viewing of the opera Little
gether with their families.
Prince and the musical Wicked. Employees can
now enjoy a more vibrant and interesting work
life, thanks to various cultural programs that pro-
vide a convenient and satisfying cultural life.
PC-Shutdown for Work Hour Normalization
Woori Daycare Center
Woori Bank complies with the government’s
policies for overcoming low birth rates, by ac-
tively supporting our employees who are work-
ing moms through Woori Daycare Center’s
In order to improve the working conditions with
Happiness Branch (located in Mapo-gu, Seoul)
lots of night overtime at the Bank, we intro-
and Sarang Branch (located in Seongdong-gu,
duced the Working Hour Normalization System
Seoul). In the future, we will not only create a
in 2013, and strove to establish the system in
corporate culture that actively promotes child-
2014. By setting the PC-Shutdown time to 7
birth by establishing additional daycare centers,
p.m., employees have fun after work and spend
but will also work towards reducing the burden
more time at home. There is improvement in
of raising children for working moms.
work efficiency and higher concentration at the
workplace due to a lack of unnecessary night
overtime.
PLANS AFtEr 2015
Woori Bank will do its utmost to make sure all of
our employees are happy and also bring happi-
ness to our customers.
Woori Bank Annual Report 2014 06
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MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
stRength in ouR Values
091
091
This Management Discussion & Analysis (MD&A) and accompanying financial statements comply with Korean International Financial Reporting Standards
(“K-IFRS” consolidated financial statements). On November 1, 2014, Woori Bank merged with its parent company, Woori Finance Holdings(WFH). The merger
between Woori Bank and Woori Finance Holdings is a business combination under common control and it did not result in any change of economic substance.
Therefore, the comparative consolidated financial statements presented are the consolidated financial statements of Woori Finance Holdings as of and for the
year ending December 31, 2013. The term ‘the Bank’, as used in this MD&A, refers to Woori Bank, unless otherwise indicated.
Summary of Management Performance
As of May 1, 2014, the Bank proceeded with the spin-off of its two Regional Banks (Kwangju Bank and Kyongnam Bank) in accordance with the government’s
privatization plan. Also, the sale process was completed in consecutive order between March and June of 2014, with the sale of its six Non- Banks (Woori
Investment & Securities, Woori Aviva Life Insurance, Woori FG Savings Bank, Woori Asset Management, Woori Financial, Woori F&I). On November 1, 2014,
the Bank merged with Woori Finance Holdings.
The Bank’s total assets decreased from KRW 340,689 billion (2013-end) to KRW 270,157 billion (2014-end). However, this was primarily due to the spin-off of
two Regional Banks and the sale of six Non-Banks. Nevertheless, when excluding assets(or liabilities) from the subsidiaries that were reclassified into disposal
group held for sale or for distribution to owners as of December 31, 2013, the Bank has secured strong future growth by increasing approximately 15 trillion in
total assets year on year.
The Bank’s net income (attributable to controlling interests) in 2014 reached KRW 1,214 billion up KRW 1,751 billion from the previous year. This was partly
due to the impact of the reversal of deferred tax liability recognized in 2013 (from the spin-off of two Regional Banks) as a result of the amendment of the Tax
Reduction and Exemption Control Act of Korea (May 14, 2014). However, the main reason of net income increase originated from the huge decrease in bad
debts expense compared to the previous year.
The continuum of low domestic consumption and low growth in the global market led to a continuous decrease of Net Interest Margin (NIM), so quantitative
growth could not lead to maximized operating income. However, asset quality indicators, such as NPL ratio and delinquency rates, had greatly improved from
the previous year.
Externally, 2014 was a memorable year for the Bank by merging with its holding company according to the scheduled privatization process, after selling off
two Regional Banks and six Non-Banks. Internally, the Bank focused on increasing the portion of high net worth assets and improving its soundness. To ensure
sustainable growth under the current trends of low growth, low interest rates and low margins, the Bank will make every effort to achieve stable internal growth
and improve asset quality by diversifying revenue streams.
Strength in Our ValueS 092
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
Management Performance
Summarized Consolidated Income Statement
(Unit: KRW Billion)
Operating incomes
Net interest incomes
Net fees and commissions income
Impairment losses due to credit loss
General and administrative expenses
Others
Non-operating incomes (losses)
Net income before income tax expense
Income tax expenses
Net income from continuing operations
Net Income from discontinued operations
Net incomes (Losses)
Net incomes (losses) attributable to owners
Net incomes (losses) attributable to non-controlling interests
2014
898
4,493
917
-1,097
-2,959
-456
-63
834
288
546
662
1,208
1,214
-6
2013
240
4,492
926
-2,277
-2,902
1
48
287
35
252
-966
-713
-537
-176
Amount
658
1
-9
1,180
56
-457
-111
548
253
295
1,627
1,922
1,751
170
Change
(%)
274.1
0
-1
-51.8
1.9
-45700
-231.3
190.3
722.9
117.1
-168.4
-269.5
-326.1
-96.5
In 2014, the Bank’s net income (attributable to the owners) increased KRW 1,751 billion to KRW 1,214 billion up from the previous year’s loss of KRW 537
billion.
Despite a cut in Net Interest Margin (NIM), amid the continuum of the low growth environment, the Net Interest Income (NII) increased slightly compared to the
previous year by achieving adequate asset growth and expanding the Bank’s credit card business. However, the net fees and commission income slightly dropped
due to the increase in payment of credit card fees generated by strengthening the Bank’s credit card business.
Impairment losses due to credit loss decreased from KRW 2,277 billion to KRW 1,097 billion; a drop of approximately 51.8% from the previous year. On the
other hand, a significant increase was realized in net income with KRW 778 billion for net income (loss) from discontinued operations. This included the reversal
of income taxes involving the spin-off of two Regional Banks.
Having completed the merger with its holding company to enhance efficiency, the Bank will continuously improve mid to long term profitability by improving
cost efficiency and minimizing the increase of allowances for credit losses.
Woori Bank Annual Report 2014
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
Interest Income and Expenses
(Unit: KRW Billion)
Interest incomes
Interest on loans
Interest on securities
Interest of other receivables
Interest expenses
Interest on deposits due to customers
Interest on debentures
Interest on borrowings
Interest expense on others
Net interest incomes
2014
9,211
8,183
873
155
4,718
3,451
885
252
130
4,493
2013
9,493
8,350
969
174
5,001
3,650
960
254
137
4,492
Amount
-282
-167
-96
-19
-283
-199
-75
-2
-7
1
093
Change
(%)
-3.0
-2.0
-9.9
-10.9
-5.7
-5.5
-7.8
-0.8
-5.1
0
The Bank’s loans increased KRW 11,234 billion over the previous year, but due to a decreasing trend of the market interest rate, interest on loans decreased
KRW 167 billion.
Also, interest expenses decreased KRW 283 billion due to the reduction of purchasing costs, including the increase in low cost funding and the repayment of
high interest borrowings and debentures. Overall, the income from interests was similar to the previous year at KRW 4,493 billion. The Bank will improve the
efficiency of funding structure by increasing low interest deposits and debentures while implementing other profit driven funding strategies to promote stable
mid-to long-term growth.
Impairment Losses Due to Credit Loss
(Unit: KRW Billion)
Provision due to credit loss
Reversal of provision on guarantee
Reversal of provision on loan commitment
Total
2014
1,116
14
33
1,097
2013
2,199
93
15
2,277
Amount
-1,083
-79
18
-1,180
Change
(%)
-49.2
-84.9
120.1
-51.8
The Bank’s provision, due to credit loss in 2013, stood at KRW 2,199 billion due to large amounts of NPLs caused by the economic downturn of shipbuilding and
construction industries. However, the amount decreased KRW 1,083 billion to KRW 1,116 billion over the previous year, which is attributable to strengthening
pre-emptive risk management in preventing additional generation of NPLs and effectively managing these exposures after loan execution. Exposures on major
insolvent enterprises that occurred from the previous period had mostly been actualized. Furthermore, efforts made to prevent executing additional overdue or
to be problematic loans and receivables, as well as effectively managing current non-performing assets through strengthened risk management, are expected to
continuously reduce the Bank’s bad debts expense in the future.
Strength in Our ValueS 094
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
General and Administrative Expenses
(Unit: KRW Billion)
Employee benefits
Short term employee benefits
Retirement benefits and redundancy payments
Depreciation
General and administrative expenses
Rent
Service charges
Others
Total
2014
1,749
1,557
192
224
986
266
215
505
2013
1,714
1,533
181
233
955
231
206
518
2,959
2,902
Amount
35
24
11
-9
31
35
9
-13
57
Change
(%)
2.0
1.6
6.1
-3.9
3.2
15.2
4.3
-2.5
2.0
In 2014, the Bank’s general and administrative expenses increased 2.0% year on year or increased KRW 57 billion to reach KRW 2,959 billion. Employee
benefits increased KRW 35 billion, but when excluding the cost of KRW 15 billion involving the costs of voluntary resignation, the actual amount is KRW 20
billion. Utmost efforts will be implemented to manage adequate general and administrative expenses by maintaining a conservative level of personnel expenses,
continuing to cut down other expenses, and improving efficiencies in total bank management.
Non-operating Incomes (Expenses)
(Unit: KRW Billion)
Non-operating incomes
Share of profits (losses) of joint ventures and associates
Gains (Losses) on disposal of premises and equipment and other assets
Rental fee income
Other non-operating incomes
Non-operating expenses
Donations
Depreciation on investment properties
Other non-operating expenses
Total non-operating incomes
2014
171
37
33
8
93
234
53
4
177
-63
2013
174
30
29
6
109
126
52
4
70
48
Amount
-3
7
4
2
-16
108
1
0
107
-111
Change
(%)
-1.7
23.3
13.8
33.3
-14.7
85.7
1.9
0
152.9
-231.3
The Bank’s non-operating incomes decreased KRW 111 billion year-on-year. This was due to the increase of other non-operating expenses originating from
donation and etc.
.
Woori Bank Annual Report 2014 MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
Financial Position
Summarized Consolidated Financial Statements
(Unit: KRW Billion)
Assets
Cash and cash equivalents
Securities
Loans and receivables
Investments in joint ventures and associates
Disposal group held for sale/Disposal group held for distribution
to owners
Other assets
Liabilities
Deposits due to customers
Borrowings
Debentures
Liabilities directly associated with disposal group held for sale/
Liabilities directly associated with disposal group held for distri-
bution to owners
Other liabilities
Total equity
2014
270,157
5,965
36,408
223,370
648
-
3,766
252,064
188,516
17,707
24,796
-
21,045
18,093
2013
340,689
5,478
33,930
211,912
618
84,996
3,755
317,813
175,323
18,231
21,677
78,930
23,652
22,876
Amount
-70,532
487
2,478
11,458
30
-84,996
11
-65,749
13,193
-524
3,119
-78,930
-2,607
-4,783
095
Change
(%)
-20.7
8.9
7.3
5.4
4.9
-100.0
0.29
-20.7
7.5
-2.9
14.4
-100.0
-11.0
-20.9
As of 2014-end, the Bank’s total assets and total liabilities decreased to KRW 270,157 billion and KRW 252,064 billion down KRW 70,532 billion and KRW
65,749 billion, respectively. However, taking into consideration that the amounts dropped due to the sale of six Non-Banks(KRW 84,996 billion) and the spin-
off of two Regional Banks(KRW 78,930 billion), the Bank’s assets actually increased by about KRW 14,464 billion and the Bank’s liabilities increased KRW
13,180 billion.
Total loans increased from KRW 190,699 billion to KRW 204,818 billion, an increase of KRW 14,119 billion year on year. As a result of lowering interest rates
and easing government regulations, household loans increased by KRW 8,610 billion, and there was an increase in new loans for high net worth SMEs as well.
Deposits due to customers increased KRW 13,193 billion from the previous year driven by stable growth of time deposits, while debentures increased KRW
3,119 billion from the previous year.
Total equity recorded KRW 18,093 billion, which was down KRW 4,783 from the previous year. Despite certain positive factors, like the net income of KRW
1,208 billion achieved in 2014, decrease in equity inevitably occurred due to the spin-off of two Regional Banks (KRW 3,352 billion) and the selling of six
Non-Banks(KRW 1,900 billion).
Strength in Our ValueS 096
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
Loans/Deposits Due to Customers
(Unit: KRW Billion)
Loans
Loans in Local Currency
Loans in Foreign Currencies
Domestic banker‘s letter of credit
Credit card accounts
Bills Bought in Foreign Currencies
Other loans
(Provision for loan losses)
Deposits due to customers
Deposits in local currency
Certificate of deposits
Other Deposits
Deposits in foreign currencies
(Present value discount)
2014
204,818
167,261
11,281
5,712
5,113
5,552
12,508
-2,609
188,516
172,597
740
1,281
13,902
-5
2013
190,699
156,027
9,996
4,958
4,209
4,235
14,611
-3,337
175,323
158,568
3,297
1,236
12,264
-42
Amount
14,119
11,234
1,285
754
904
1,317
-2,103
728
13,193
14,029
-2,557
45
1,638
37
Change
(%)
7.4
7.2
12.9
15.2
21.5
31.1
-14.4
-21.8
7.5
8.8
-77.5
3.6
13.4
-88.1
The Bank’s loans in KRW in 2014 went up KRW 11,234 billion from the previous year. This was mainly due to scale-up of new loans to high net worth SMEs
and public agencies, as well as a huge increase in private housing loans resulting from the government’s deregulation and falling interest rates.
As a result of efforts made in increasing businesses involving corporate and institutional clients, the Bank recorded a high growth rate with an annual average of
9.4% for deposits during the past several years. Deposits due to customers increased KRW 13,193 billion from the previous year. This is attributable to funding
through time deposits in KRW, which increased KRW 15,566 billion from the previous year due to the increase in customers’ demand for safe assets and aligning
with the Bank’s management of loan-deposit ratio and liquidity. The Bank will establish a more stable funding structure by reducing the ratio of short-term
deposits due to customers, or in other words, reducing certificate of deposits, etc.
Woori Bank Annual Report 2014 MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
097
Asset Quality
(Unit: KRW Billion, % ,%p)
Non-Performing Loan (NPL) Ratio
Delinquency Rate
NPL Coverage Ratio (A/B)
Loan Loss Provision & Capital Reserve for Credit Loss : Classified as NPL (A)
NPL (B)
* Note: Separate financial statements
2014
2.10
0.88
97.16
3,907
4,021
2013
2.99
1.14
82.27
4,408
5,359
Change
-0.89
-0.26
14.89
-501
-1,338
As a result of efforts made in reducing non-performing assets and improving asset quality, key indicators for asset quality, including NPL ratio and delinquency
rate, dropped 0.89%p and 0.26%p, respectively, to record 2.10% and 0.88% each with a huge improvement made from the previous year. The balance of NPL
was KRW 4,021 billion, down KRW 1,338 billion from the previous year, while the NPL coverage ratio significantly improved from the previous year from
82.27% to 97.16%.
The Bank will greatly improve its asset quality in the future through proactive measures taken, such as continuously decreasing the exposure to risk-driven
cyclical industries and insolvent enterprises and moreover, preventing the inflow of to-be-problematic loans in the future.
Capital Adequacy
(Unit: KRW Billion, % ,%p)
BIS Equity Capital
Risk Weighted Assets (RWA)
BIS Ratio
Tier 1 Capital Ratio
2014
20,857
146,323
14.25
10.69
2013
20,382
131,313
15.52
12.68
Change
475
15,010
-1.27
-1.99
The BIS equity capital increased KRW 475 billion from the previous year. Although there was a spin-off of two Regional Banks, Woori Bank issued Basel III
compliant US$ 1 billion of subordinated debt in foreign currency(as the 1st Bank in Korea to do so) as well as issuing KRW 160 billion of hybrid securities
in domestic currency. On the other hand, the risk weighted assets increased KRW 15,010 billion due to incorporating subsidiaries such as Woori Card, Woori
Investment Bank, and etc. resulting from the merger with Woori Finance Holdings(WFH). The merger with WFH and the inclusion of Woori Card, Woori
Investment Bank, and others resulted in an inevitable drop of the BIS ratio by 1.27% to 14.25%. The Bank will make every effort to improve the BIS ratio by
actively lowering the risk weighted assets and by strengthening equity capital. Equity capital will be increased by achieving net income of more than KRW 1
trillion from increasing fee incomes, and decreasing bad debts expenses, as well as reducing general and administrative expenses.
Strength in Our ValueS 098
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
Liquidity Ratio
(Unit: %, %p)
Liquidity Ratio in Local Currency
Liquidity Ratio in Foreign Currency
Fixed Assets Ratio for Business Purposes
2014
123.10
121.29
14.57
2013
120.75
125.86
14.73
Change (%p)
2.35
-4.57
-0.16
The Bank’s liquidity ratio in local currency improved from 120.75% to 123.10%, but the liquidity ratio in foreign currency dropped 4.57% to 121.29%. Currently
liquidity indicators are sufficiently above supervision standards and show stable financing and management structure. The Bank will respond proactively to the
changes in domestic & foreign market conditions and safely manage the liquidity ratio within a comforting zone, and will also thoroughly manage asset and
liability.
Profitability
(Unit: %, %p)
Return on Assets (ROA)
Return on Equity (ROE)
Net Interest Margin (Bank+Card)
Net Interest Margin (Bank)
2014
0.21
3.55
1.97
1.56
2013
0.14
2.56
2.10
1.73
Change (%p)
0.07
0.99
-0.13
-0.17
*ROA, ROE: Excluding one-off factors related to the sale and the spin-off of subsidiaries
Although fee incomes decreased and the competition between banks intensified in 2014, the Bank dramatically decreased credit costs and thus ROA and ROE
slightly increased to 0.21% and 3.55%, respectively. The Net Interest Margin (Bank+Card) inevitably decreased 0.13%p to 1.97% from the previous year due to
the decrease in margins originated by focusing on high net worth customers and due to the lowering of benchmark interest rates on Aug. and Oct. 2014. Although
undergoing the low interest rate environment, the Bank will proactively make every effort to improve its profitability by improving efficiency in the management
or organizational structure, implementing appropriate margins according to customer classifications, decreasing the costs of funding(perhaps by refunding the
current high interest debentures), and increasing low cost deposits for sustainable future growth.
Woori Bank Annual Report 2014 099
INDEPENDENT AUDITORS’ REPORT
INDEPENDENT AUDITORS’ REPORT
English Translation of Independent Auditors’ Report Originally Issued in Korean on March 6, 2015
To the Shareholders and the Board of Directors of
Woori Bank:
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated financial statements of Woori Bank and subsidiaries
(the “Group”), which comprise the consolidated statements of financial position as of December 31,
2014 and 2013, respectively, and the consolidated statements of comprehensive income, consolidated
statements of changes in stockholders’ equity and consolidated statements of cash flows, all expressed
in Korean Won, for the years ended, and a summary of significant accounting policies and other
explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with Korean International Financial Reporting Standards (“K-IFRS”) and for
such internal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an audit opinion on these consolidated financial statements based on
our audit. We conducted our audit in accordance with Korean Auditing Standards. Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free from material misstatement,
whether due to fraud or error.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the consolidated financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the consolidated financial statements in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Strength in Our ValueS
100
n
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may differ fro
Ltd. (the
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. The merger
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dated
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March 6
, 2015
No
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ders
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circumst
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may resu
ort is effectiv
tances may h
ch events or
ult in modific
ve as of Mar
have occurred
circumstanc
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rch 6, 2015, t
d between th
ces could sign
No
e auditors’ re
the auditors’
he auditors’ r
nificantly aff
otice to Read
eport.
report date.
report date an
ffect the cons
ders
Certain subs
nd the time th
olidated fina
sequent even
the auditors’
ancial statem
nts or
report is
ments and
This rep
circumst
read. Suc
may resu
ort is effectiv
tances may h
ch events or
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ve as of Mar
have occurred
circumstanc
cations to the
rch 6, 2015, t
d between th
ces could sign
e auditors’ re
the auditors’
he auditors’ r
nificantly aff
eport.
report date.
report date an
ffect the cons
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nd the time th
olidated fina
sequent even
the auditors’
ancial statem
nts or
report is
ments and
Woori Bank Annual Report 2014 101
WOORI BANK AND SUBSIDIARIES
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2014 AND 2013
AS OF DECEMBER 31, 2014 AND 2013
ASSETS
Cash and cash equivalents (Note 6)
Financial assets at fair value through profit or loss
(Notes 4,7,11,12,18 and 26)
Available-for-sale financial assets (Notes 4,8,11,12 and 18)
Held-to-maturity financial assets (Notes 4,9,11,12 and 18)
Loans and receivables (Notes 4,10,11,12,44 and 45)
Investments in joint ventures and associates (Note 13)
Investment properties (Note 14)
Premises and equipment (Notes 15,17 and 18)
Intangible assets and goodwill (Note 16)
Assets held for sale (Note 17)
Current tax assets (Note 42)
Deferred tax assets (Note 42)
Derivative assets (Notes 7,11,12 and 26)
Other assets (Notes 19 and 45)
Disposal group held for sale (Note 47)
Disposal group held for distribution to owners (Note 48)
Total assets
LIABILITIES
Financial liabilities at fair value through profit or loss
(Notes 4,11,12,20 and 26)
Deposits due to customers (Notes 4,11,21 and 45)
Borrowings (Notes 4,11,12 and 22)
Debentures (Notes 4,11 and 22)
Provisions (Notes 23 and 44)
Net defined benefit liability (Note 24)
Current tax liabilities (Note 42)
Deferred tax liabilities (Note 42)
Derivative liabilities (Notes 4,11,12 and 26)
Other financial liabilities (Notes 4,11,12 and 25)
Other liabilities (Notes 25 and 45)
Liabilities directly associated with disposal group held for sale (Note 47)
Liabilities directly associated with disposal group held for distribution to
owners (Note 48)
Total liabilities
(Continued)
December 31,
December 31,
2014
2013
(Korean Won in millions)
5,962,861
5,477,649
4,554,180
18,810,845
13,044,448
223,370,135
648,436
357,550
2,501,102
295,728
8,013
4,845
257,858
196,061
145,157
-
-
270,157,219
2,675,354
188,516,465
17,707,595
24,795,904
692,009
75,591
298,762
21,757
-
16,889,687
390,670
-
-
252,063,794
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
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
46,882,414
317,813,613
Strength in Our ValueS
102
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2014 AND 2013 (CONTINUED)
AS OF DECEMBER 31, 2014 AND 2013 (CONTINUED)
EQUITY
Owners’ equity:
Capital stock (Note 28)
Hybrid securities (Note 29)
Capital surplus (Note 28)
Other equity (Note 30)
Retained earnings (Notes 31and 32)
(Regulatory reserve for credit loss as of December 31, 2014 and 2013
is 1,800,387 million Won and 1,685,623 million Won, respectively
Unreserved regulatory reserve for credit loss as of December 31,
2014 and 2013 is nil
Regulatory reserve for credit loss to be reserved (reversed) as of
December 31, 2014 and 2013 is (-)44,245 million Won and 114,764
million Won, respectively
Planned provision (reversal) of regulatory reserve for credit loss as of
December 31, 2014 and 2013 is (-)44,245 million Won and 114,764
million Won, respectively)
Equity directly associated with disposal group held for sale (Note 30)
Equity directly associated with disposal group held for distribution to
owners (Note 30)
Non-controlling interests
Total equity
Total liabilities and equity
December 31,
December 31,
2014
2013
(Korean Won in millions)
17,983,501
3,381,392
2,538,823
291,066
(2,393,138)
17,847,633
4,030,077
498,407
176,502
(35,367)
14,165,358
-
-
109,924
18,093,425
270,157,219
13,112,690
29,820
35,504
5,029,136
22,876,769
340,690,382
See notes to consolidated financial statements.
Woori Bank Annual Report 2014
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
103
Interest income
Interest expense
Net interest income (Notes 34 and 45)
Fees and commissions income
Fees and commissions expense
Net fees and commissions income (Notes 35 and 45)
Dividend income (Note 36)
Net gain on financial instruments at fair value through profit or loss
(Note 37)
Net loss on available-for-sale financial assets (Note 38)
Impairment losses due to credit loss (Notes 39 and 45)
General and administrative expenses (Note 40)
Other net operating expenses (Notes 40 and 45)
Operating income
Share of losses of joint ventures and associates (Note 13)
Other net non-operating income
Non-operating income (loss)
Net income before income tax expense
Income tax expense (Note 42)
Net income from continuing operations
Net income (loss) from discontinued operations (Notes 47 and 48)
Net income (loss)
(Net income after the provision(reversal) of regulatory reserve for
credit loss for the years ended December 31, 2014 and 2013 are
1,252,214 million Won and (-)828,199 million Won, respectively)
(Note 32)
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 loss of joint ventures and associates
Gain (loss) on foreign currency translation of foreign operations
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
Net loss attributable to non-controlling interests
Income from continuing operations
Loss from discontinued operations
2014
2013
(Korean Won in millions,
except for per share data)
9,211,240
(4,718,222)
4,493,018
9,493,383
(5,001,361)
4,492,022
1,598,015
(681,000)
917,015
96,812
189,912
(68,924)
(1,096,940)
(2,958,919)
(674,266)
897,708
(67,980)
4,667
(63,313)
834,395
(288,195)
546,200
661,769
1,565,224
(638,723)
926,501
87,641
123,900
(85,242)
(2,277,260)
(2,902,172)
(125,823)
239,567
(1,277)
49,377
48,100
287,667
(35,096)
252,571
(966,006)
1,207,969
(713,435)
(51,650)
(51,650)
(75,586)
(1,604)
48,393
(27,150)
(55,947)
(107,597)
1,100,372
1,213,980
435,289
778,691
(6,011)
110,911
(116,922)
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)
Total comprehensive income attributable to:
Comprehensive income (loss) attributable to owners
Comprehensive loss attributable to non-controlling interests
Basic and diluted earnings (losses) from continuing and
discontinued operations per share (In Korean Won) (Note 43)
Basic and diluted earnings from continuing operations
per share (In Korean Won) (Note 43)
1,192,191
(91,819)
(623,695)
(200,087)
1,621
536
(704)
165
See notes to consolidated financial statements.
Strength in Our ValueS
104
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
Capital
stock
Hybrid
securities
Capital
surplus
4,030,077
-
-
498,407
-
-
174,044
-
-
January 1, 2013
Net loss
Dividends
Changes in equities of
Retained
earnings
Other
equity
(Korean Won in millions)
112,013
-
-
13,881,378
(537,688)
(201,503)
Controlling
interests
Non-
controlling
interests
Total
equity
18,695,919
(537,688)
(201,503)
4,337,157
(175,747)
(21,319)
23,033,076
(713,435)
(222,822)
and Woori Finance Holdings
-
1,880,798
178,058
(178,060)
consolidated subsidiaries
Changes in investments in
consolidated subsidiaries
Loss on valuation of available-
for-sale financial assets
Changes in equity of joint
ventures and associates
Foreign currency translation of
foreign operations
Cash flow hedge
Remeasurement of the net
defined benefit liability
Changes in other equity
Amortization of consolidated
subsidiaries’ stock discount
Dividends to hybrid securities
Issuance of hybrid securities in
consolidated subsidiaries
December 31, 2013
January 1, 2014
Net income (loss)
Dividends
Changes due to the Spin-off
Merger between Woori Bank
Merger between Indonesia
Woori Bank and Saudara
Bank
Changes in capital surplus of
consolidated subsidiaries
Issuance of capital stocks in
consolidated subsidiaries
Acquisition of treasury stock
Disposal of consolidated
subsidiaries
Gain (loss) on valuation of
available-for-sale financial
assets
Changes in equity of joint
ventures and associates
Foreign currency translation of
foreign operations
Cash flow hedge
Remeasurement of the net
defined benefit liability
Issuance of hybrid securities
Dividends to hybrid securities
Redemption of hybrid
securities in consolidated
subsidiaries
Changes in other equity
December 31, 2014
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(259)
2,717
-
-
-
-
-
-
-
-
-
-
(33,782)
(6,375)
(51,999)
(765)
6,915
3,852
98
-
-
-
-
-
-
-
-
-
(259)
(280)
(539)
2,717
81,370
84,087
(33,782)
(17,171)
(50,953)
(6,375)
(51,999)
(765)
6,915
3,852
-
(6,375)
(7,825)
(1,647)
2,302
1,612
(59,824)
(2,412)
9,217
5,464
(98)
(29,399)
-
(29,399)
-
(154,869)
-
(184,268)
-
4,030,077
-
498,407
-
176,502
-
29,957
-
13,112,690
-
17,847,633
985,553
5,029,136
985,553
22,876,769
4,030,077
-
-
(648,685)
498,407
-
-
-
176,502
-
-
(68,106)
29,957
-
-
(2,238,228)
13,112,690
1,213,980
-
(110,405)
17,847,633
1,213,980
-
(3,065,424)
5,029,136
(6,011)
(8,042)
(286,564)
22,876,769
1,207,969
(8,042)
(3,351,988)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
159,618
-
21,724
(23)
-
-
(17,110)
-
-
(37,580)
-
-
-
-
-
-
-
-
-
86,537
(2,974)
28,856
(18,220)
(63,426)
-
-
-
-
-
-
-
-
-
-
-
-
(764)
-
(50,129)
1,880,796
(1,880,798)
(2)
21,724
49,134
70,858
(23)
572
549
(17,110)
(37,580)
17,391
-
281
(37,580)
-
(1,900,347)
(1,900,347)
86,537
(97,181)
(10,644)
(2,974)
1,370
(1,604)
28,856
(18,220)
(64,190)
159,618
(50,129)
19,537
(8,851)
48,393
(27,071)
(683)
-
(116,721)
(64,873)
159,618
(166,850)
-
-
3,381,392 2,538,823
-
-
-
21
291,066
-
-
(2,393,138)
(1)
(13)
14,165,358
(1)
8
17,983,501
(702,994)
976
109,924
(702,995)
984
18,093,425
See notes to consolidated financial statements.
Woori Bank Annual Report 2014
105
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
Cash flows from operating activities:
Net income (loss)
Adjustments:
Income tax expense
Interest income
Interest expense
Dividend income
Impairment losses due to credit loss
Loss on available-for-sale financial assets
Share of losses of investments in joint ventures and associates
Loss on foreign exchange translation
Loss on transaction of derivatives / valuation of derivatives
Loss on fair value hedged items
Provisions
Retirement benefits
Depreciation and amortization
Loss on disposal of investments in joint ventures and associates
Loss on disposal of premises and equipment and other assets
Impairment loss on premises and equipment and other assets
Impairment loss on assets held for sale
Impairment loss on disposal group held for sale and disposal group held for
distribution to owners
Loss on disposal of disposal group held for sale
Gain on valuation of financial instruments at fair value through profit or loss
Share of profits of investments in joint ventures and associates
Gain on foreign exchange translation
Gain on transaction of derivatives / valuation of derivatives
Gain on fair value hedged items
Reversal of provisions
Gain on disposal of investments in joint ventures and associates
Gain on disposal of premises and equipment and other assets
Reversal of impairment loss on premises and equipment and other assets
Gain on disposal of group held for sale
Gain on disposal of assets held for sale
Reversal of impairment loss on assets held for sale
Reversal of impairment loss on disposal group held for sale and disposal
group held for distribution to owners
Changes in operating assets and liabilities:
Financial instruments at fair value through profit or loss
Loans and receivables
Other assets
Deposits due to customers
Provision for guarantee and loan commitment
Net defined benefit liability
Other financial liabilities
Other liabilities
Cash received from (paid for) operating activities:
Interest income received
Interest expense paid
Dividends received
Income tax paid
Net cash used in operating activities
(Continued)
2014
2013
(Korean Won in millions)
1,207,969
(713,435)
(145,981)
(10,285,933)
5,207,289
(135,127)
1,202,152
93,639
123,038
82,077
22,253
87,476
81,073
132,768
247,216
1,788
2,788
2,320
2,420
7,728
46,782
(34,830)
(55,674)
(39,485)
(85,975)
(23,317)
(744)
(31,899)
(1,134)
(533)
(159,794)
(1,039)
(337)
622,656
(12,837,884)
6,622,744
(151,494)
2,706,389
95,729
43,488
55,228
121,713
13,505
85,732
167,910
300,453
4,946
5,158
60,692
-
833,766
-
(43,058)
(64,005)
(50,135)
(18,801)
(128,361)
(10,972)
(19,974)
(13,052)
(3,051)
-
-
-
(259)
-
1,547,502
(15,439,044)
(92,867)
14,052,504
(106,780)
(276,638)
(1,933,627)
(16,183)
2,413,710
(17,106,848)
54,493
9,705,237
(98,270)
(158,487)
(1,147,373)
38,359
10,171,063 12,918,030
(6,974,736)
(5,210,976)
151,051
155,164
(479,002)
(117,589)
(2,997,949)
281,244
Strength in Our ValueS
106
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (CONTINUED)
Cash flows from investing activities:
Net cash provided by disposal of subsidiaries (Note 47)
Net cash provided by the merger of Saudara bank (Note 51)
Disposal of available-for-sale financial assets
Redemption of held-to-maturity financial assets
Disposal of investments in joint ventures and associates
Disposal of investment properties
Disposal of premises and equipment
Disposal of intangible assets
Disposal of assets held for sale
Net decrease of derivatives for risk hedge
Acquisition of available-for-sale financial assets
Acquisition of held-to-maturity financial assets
Acquisition of investments in joint ventures and associates
Acquisition of investment properties
Acquisition of premises and equipment
Acquisition of intangible assets
Acquisition of assets held for sale
Net increase of derivatives for risk hedge
Net cash used in investing activities
Cash flows from financing activities:
Net increase in borrowings
Issuance of debentures
Issuance of hybrid securities
Increase of paid in capital in subsidiaries
Issuance of hybrid securities in subsidiaries
Decrease due to the Spin-off
Net decrease in borrowings
Repayment of debentures
Dividends paid
Acquisition of treasury stock
Expenses on stock issued
Dividends paid on hybrid securities
Dividends paid on non-controlling interests
Dividends paid on hybrid securities of subsidiaries
Redemption of non-controlling hybrid securities
Other decrease in non-controlling interests, net
Net cash provided by financing activities
2014
2013
(Korean Won in millions)
1,193,584
81,100
26,865,684
4,823,630
235,778
-
36,364
88,197
29,857
-
(28,527,400)
(5,658,655)
(67,431)
(18)
(140,639)
(86,910)
-
(14,153)
(1,141,012)
-
18,229,052
159,618
1,121
-
(792,949)
(927,711)
(15,448,663)
-
(37,580)
(3)
(60,780)
(8,042)
(98,522)
(702,995)
(1,119)
311,427
-
-
26,449,831
6,768,916
106,438
6,583
18,478
8,660
54,611
14,632
(29,152,120)
(4,250,044)
(144,644)
(513)
(159,437)
(107,092)
(7,266)
-
(392,967)
3,113,963
10,501,447
-
80,273
985,553
-
-
(10,084,216)
(201,503)
-
-
(29,398)
-
(147,498)
-
(38,643)
4,179,978
Net increase (decrease) in cash and cash equivalents
(548,341)
789,062
Cash and cash equivalents, beginning of the period
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents, end of the period
Cash and cash equivalents directly associated with disposal group
held for sale
Cash and cash equivalents directly associated with disposal group
held for distribution to owners
Cash and cash equivalents on consolidated statement of financial position
See notes to consolidated financial statements
6,472,459
38,743
5,962,861
5,778,390
(94,993)
6,472,459
-
(303,202)
-
5,962,861
(691,608)
5,477,649
Woori Bank Annual Report 2014
107
WOORI BANK AND SUBSIDIARIES
WOORI BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
1. GENERAL
(1) Summary of the parent company
Woori Bank (hereinafter referred to the “Bank”), which is a controlling entity 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 June 24, 2002, Woori Finance Holdings Co., Ltd. listed its common shares on the Korea Exchange through
public offering. In addition, on September 29, 2003, the company registered with the Securities and Exchange
Commission in the United States of America and, on the same day, listed its American Depositary Shares on the
New York Stock Exchange.
Previously, Woori Finance Holdings Co., Ltd., the former holding company of Woori Financial Group,
established on March 27, 2001 held a 100% ownership of the Bank. Effective November 1, 2014, Woori Finance
Holdings Co., Ltd. completed its merger (the “Merger”) with and into Woori Bank, its wholly-owned subsidiary,
as contemplated by the merger agreement (the “Merger Agreement”) dated July 28, 2014, by and between Woori
Finance Holdings and Woori Bank. Pursuant to the Merger Agreement, for each outstanding common share of
Woori Finance Holdings, one new common share of Woori Bank, par value 5,000 Korean Won, was issued to
shareholders recorded in the shareholder register of Woori Finance Holdings. Accordingly, the shares of the
Bank, 597 million shares, prior to the merger, was reduced to nil in accordance with capital reduction procedure,
and then, in accordance with the merger ratio, the Bank newly issued 676 million shares. As a result, as of
December 31, 2014, the common stock of the Bank amounts, expressed in Korean Won (the “KRW” or “million
Won”), to 3,381,392 million Won. As Woori Finance Holdings was merged into the Bank, the Bank, which is
the existing company, succeeded such rights and obligations as a listed company on Korea Exchange and New
York Stock Exchange.
As a result of such merger, the Bank incorporated Woori Card Co., Ltd., Woori Investment Bank Co., Ltd.,
Woori FIS Co., Ltd., Woori Private Equity Co., Ltd., and Woori Finance Research Institute Co., Ltd. within its
consolidation scope.
The head office of the Bank is located in 51, Sogong-ro, Jung Gu, Seoul, Korea. The Bank has 993 branches and
offices in Korea, and 21 branches and offices overseas as of December 31, 2014.
(2) The consolidated financial statements for Woori Bank and its subsidiaries (the “Group”) include the
following subsidiaries:
Subsidiaries
Woori Bank:
Kyongnam Bank (*1)
Kwangju Bank (*1)
Woori FIS Co., Ltd.
Woori F&I (*1)
Woori Investment &Securities (*1)
Woori Asset Management (*1)
Woori Private Equity Co., Ltd.
Woori Financial (*1)
Main business
Finance
〃
〃
System software
development &
maintenance
Finance
〃
〃
〃
〃
Percentage of ownership (%)
December 31,
2013
December 31,
2014
-
-
100.0
-
-
-
100.0
-
100.0
100.0
100.0
100.0
37.9
100.0
100.0
52.0
Strength in Our ValueS
108
Subsidiaries
Woori FG Savings Bank (*1)
Woori Finance Research Institute
Woori Card Co., Ltd.
Woori Credit Information Co., Ltd.
Woori America Bank
Woori Global Market Asia Limited
Woori Bank (China) Limited
ZAO Woori Bank
PT. Bank Woori Indonesia (*6)
Indonesia Woori Saudara Bank (*6)
Woori Brazil Bank
Korea BTL Infrastructure Fund (*9)
Woori Fund Service Co., Ltd.
Woori Finance Cambodia (*10)
Kumho Trust First Co., Ltd. (*2)
Asiana Saigon Inc. (*2)
An-Dong Raja First Co., Ltd. (*2)
Consus Eighth Co., LLC (*2)
KAMCO Value Recreation First Securitization Specialty
Co., Ltd. (*2)
Woori IB Global Bond Co., Ltd. (*2)
Hermes STX Co., Ltd. (*2)
BWL First Co., LLC (*2)
Woori Poongsan Co., Ltd. (*2)
Pyeongtaek Ocean Sand Inc. (*2)
W synergy First Co., Ltd. (*4)
Deogi Dream Fourth Co., Ltd. (*2)
Guam Emerald Ocean View Inc. (*4)
Jeonju Iwon Ltd. (*2)
Wonju I one Inc. (*2)
Newyear Eighth Co., Ltd. (*2)
Jilrian First Co., Ltd. (*2)
Heitz Third Co., Ltd. (*2)
Principle Guaranteed Trust (*3)
Principle and Interest Guaranteed Trust(*3)
Woori Bank and
Woori Private Equity Co., Ltd.:
Woori Private Equity Fund (*8)(*11)
Woori Investment Bank Co., Ltd. (*7)
Kyongnam Bank:
Consus Sixth Co., LLC (*1)
Principle Guaranteed Trust (*1)
Principle and Interest Guaranteed Trust (*1)
Kwangju Bank:
Hybrid First Specialty Inc. (*1)
KAMCO Value Recreation Second Securitization Specialty
Inc. (*1)
Principle Guaranteed Trust (*1)
Principle and Interest Guaranteed Trust (*1)
Woori F&I Co., Ltd.:
Woori AMC Co., Ltd. (*1)
Woori F&I Seventh Asset Securitization Specialty (*1)
Woori F&I Tenth Asset Securitization Specialty (*1)
Woori F&I Thirteenth Asset Securitization Specialty (*1)
Woori SB Tenth Asset Securitization Specialty (*1)
- 2 -
Main business
Finance
Other service business
Finance
Credit information
Finance
〃
〃
〃
〃
〃
〃
〃
〃
〃
Asset securitization
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
Trust
〃
Other financial
business
Other credit finance
business
Asset securitization
Trust
〃
Asset securitization
〃
Trust
〃
Other financial
business
Asset securitization
〃
〃
〃
Percentage of ownership (%)
December 31,
2014
December 31,
2013
-
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
74.0
100.0
99.9
100.0
100.0
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
0.0
31.9
59.5
-
-
-
-
-
-
-
-
-
-
-
-
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
95.2
-
100.0
100.0
100.0
-
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
0.0
61.0
42.8
0.0
0.0
0.0
0.0
15.0
0.0
0.0
100.0
100.0
100.0
94.6
50.0+1share
Woori Bank Annual Report 2014
109
Subsidiaries
Woori F&I Sixteenth Asset Securitization Specialty (*1)
Woori EA Third Asset Securitization Specialty (*1)
Woori EA Fifth Asset Securitization Specialty (*1)
Woori F&I Seventeenth Asset Securitization Specialty (*1)
Woori EA Eighth Asset Securitization Specialty (*1)
WR Investment America, LLC (*1)
Woori F&I Eighteenth Asset Securitization Specialty (*1)
Woori EA Tenth Asset Securitization Specialty (*1)
Woori F&I Nineteenth Asset Securitization Specialty (*1)
Woori F&I Twentieth Asset Securitization Specialty (*1)
Woori F&I Twenty first Asset Securitization Specialty (*1)
Woori F&I Twenty second Asset Securitization Specialty (*1)
Woori F&I Twenty third Asset Securitization Specialty (*1)
Woori F&I Twenty fourth Asset Securitization Specialty (*1)
Woori F&I Twenty fifth Asset Securitization Specialty (*1)
Woori EA Twelfth Asset Securitization Specialty (*1)
Woori EA Thirteenth Asset Securitization Specialty (*1)
Woori EA Fourteenth Asset Securitization Specialty (*1)
Woori EA Fifteenth Asset Securitization Specialty (*1)
Woori EA Eighteenth Asset Securitization Specialty (*1)
Woori F&I Twenty sixth Asset Securitization Specialty (*1)
Woori F&I Twenty seventh Asset Securitization Specialty
(*1)
Woori F&I Twenty eighth Asset Securitization Specialty (*1)
Woori F&I Twenty ninth Asset Securitization Specialty (*1)
Woori F&I Thirtieth Asset Securitization Specialty (*1)
Woori F&I Thirty first Asset Securitization Specialty (*1)
Woori F&I Thirty second Asset Securitization Specialty (*1)
Woori F&I Thirty third Asset Securitization Specialty (*1)
Woori F&I Thirty fourth Asset Securitization Specialty (*1)
Woori F&I Thirty fifth Asset Securitization Specialty (*1)
Woori F&I Thirty sixth Asset Securitization Specialty (*1)
Woori F&I Thirty seventh Asset Securitization Specialty (*1)
Woori F&I Thirty eighth Asset Securitization Specialty (*1)
Woori F&I Thirty ninth Asset Securitization Specialty (*1)
Woori F&I Fortieth Asset Securitization Specialty (*1)
FS 1312 Asset Securitization Specialty (*1)
Woori Investment & Securities Co., Ltd.:
Woori Futures Co., Ltd. (*1)
Woori Investment Asia PTE, Ltd. (*1)
Woori Absolute Global Opportunity Fund (*1)
LG Investments Holding B.V. (*1)
Woori Investment Securities (H.K.)Ltd. (*1)
Woori Investment Securities Int’l Ltd. (*1)
Woori Investment Securities America, Inc. (*1)
Woori CBV Securities Corporation (*1)
MARS Second Private Equity Fund (*1)
Woori Absolute Partners PTE, Ltd. (*1)
Woori Korindo Securities Indonesia (*1)
Woori Absolute Return Investment Strategies Fund (*1)
KoFC Woori Growth Champ Private Equity Fund (*1)
Woori Investment advisory Co., Ltd. (Beijing) (*1)
IBS eleventh Co., Ltd. (*1)
Alphen Rose Second Co., Ltd. (*1)
- 3 -
Main business
Asset securitization
〃
〃
〃
〃
Administration of
NPL
Asset securitization
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
Futures trading
Investments
Securities investments
〃
Securities business
Securities investments
〃
Securities business
Other financial
business
Securities investments
〃
〃
Other financial
business
Securities investments
〃
〃
Percentage of ownership (%)
December 31,
2014
December 31,
2013
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100.0
70.0
70.0
100.0
51.0
100.0
100.0
51.0
100.0
60.0
100.0
100.0
100.0
100.0
100.0
70.0
70.0
70.0
70.0
67.0
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
49.0
8.9
100.0
60.0
100.0
27.3
95.1
0.0
0.0
Strength in Our ValueS
110
Principle Guaranteed Trust (*1)
Subsidiaries
Woori Private Equity Fund:
Woori EL Co., Ltd.
Main business
Trust
Percentage of ownership (%)
December 31,
2014
December 31,
2013
-
0.0
Other financial
business
100.0
KoFC Woori Growth Champ Private Equity Fund:
Woori Giant First Co., Ltd. (*1)
Woori Investment Bank:
HUB First Co., Ltd. (*4)
HUB Second Co., Ltd. (*4)
HUB Third Co., Ltd. (*4)
Two Eagles KIB LLC (*4)
Woori Private Equity Co., Ltd. and TWO Eagles KIB LLC:
Two Eagles LLC (*4)
Woori PE and My Asset Manhattan Private REIT First:
Sahn Eagles LLC (*4)
Woori Bank and Woori Investment Bank:
Woori CS Ocean Bridge 15th and 43 beneficiary certificates
for the rest (*5)
Asset securitization
Asset securitization
Asset securitization
〃
Other service business
Other service business
Other financial
business
Beneficiary
certificates
-
-
-
-
-
-
-
-
100.0
100.0
0.0
0.0
0.0
100.0
55.0
60.0
-
(*1) Deconsolidated through spin-off or disposal during the year ended December 31, 2014.
(*2) The entity is a structured entity that is established for securitization of financial assets. It is determined that the
Group controls the entity, even though the Group has less than 50% ownership of 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.
(*3) 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, even though the Group has less than 50% ownership of 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.
(*4) Deconsolidated through liquidation during the year ended December 31, 2014.
(*5) The entity is a structured entity that is established for the purpose of investments in securities. 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.
(*6) Indonesia Woori Bank, which was a subsidiary of the Bank, merged with Saudara Bank during the year ended
December 31, 2014, and then changed its name into Indonesia Woori Saudara Bank.
(*7) During the year ended December 31, 2014, the Group participated in the additional common stock issuance of
Woori Investment Bank, and therefore its ownership ratio of the company has increased.
(*8) During the year ended December 31, 2014, due to the spin-off or disposal of the subsidiaries, which was previously
holding the shares of Woori Private Equity Fund, the Group’s ownership ratio of the company has decreased.
(*9) During the year ended December 31, 2014, due to the change in Financial Investment Services and Capital Markets
Act in Korea, new investors have participated in the company; as such the ownership ratio of the Bank has
decreased.
(*10) During the year ended December 31, 2014, the Group acquired over 50% ownership of the entity, and therefore the
entity has been consolidated.
(*11) The Group controls Woori Private Equity Fund as general partner; as such the company has been consolidated.
- 4 -
Woori Bank Annual Report 2014
111
(3) As of December 31, 2014, and 2013, despite having more than a 50% ownership stake, the Group has not
consolidated the following companies as the Group do not have the ability to control following subsidiaries:
Companies
Golden Bridge NHN Online Private Equity Investment (*)
Heungkuk High Class Private Investment Trust 377th (*)
Location
Korea
Korea
Main business
Securities investments
Securities investments
Percentage of
ownership (%)
60.0
51.3
(*) The Group owns the majority ownership of these SPEs, but has no power on the investees’ relevant
activities. As a result, it is deemed that the Group has no control over the SPEs.
(4) The summarized financial information before the elimination of intercompany transactions of the main
subsidiaries whose financial information were prepared under K-IFRS for the Group’s consolidated
financial statements is as follows (Unit: Korean Won in millions):
As of and for the year ended December 31, 2014
Assets
246,580
80,292
3,682
5,732,039
1,001,542
33,500
1,338,415
Liabilities
211,671
37,442
467
4,543,180
861,209
6,049
1,170,884
1,735,356
1,390,103
274,132
3,844,399
254,716
164,282
669,818
9,070
11,930
164,246
3,397,735
218,122
131,319
262
426
6,716
Operating
revenue
289,485
4,387
6,619
1,203,131
84,282
32,412
49,945
85,851
6,319
205,273
12,982
18,468
35,136
4,895
1,790
1,452,201
1,423,694
64,736
Net income
(loss)
attributable to
owners
Comprehensive
income (loss)
attributable to
owners
(1,285)
2,087
91
89,107
4,536
2,198
5,587
14,563
759
8,887
4,418
1,647
31,750
(415)
266
603
(4,564)
2,144
94
105,438
8,642
2,082
12,641
17,589
5,345
26,980
(18,193)
(1,090)
31,750
(415)
615
603
434,845
882,984
34,734
(22,798)
(100,951)
3,789,630
800,013
69,543
22,465
45,040
Woori FIS
Woori Private Equity
Woori Finance Research
Institute
Woori Card
Woori Investment &
Securities
Woori Credit Information
Woori America Bank
Indonesia Woori Saudara
Bank
Woori Global Market Asia
Limited
Woori Bank (China) Limited
ZAO Woori Bank
Woori Brazil Bank
Korea BTL Infrastructure
Fund
Woori Fund Service
Woori Finance Cambodia
Money trust under the Trust
Business Act
Structured entity for the
securitization of financial
assets
Security investments
structured entity
- 5 -
Strength in Our ValueS
112
Kyongnam Bank
Kwangju Bank
Woori FIS
Woori F&I
Woori Investment &
Securities
Woori Asset Management
Woori Private Equity
Woori Financial
Woori FG Savings Bank
Woori Finance Research
Institute
Woori Card
Woori Investment Bank
Woori Credit Information
Woori America Bank
Indonesia Woori Saudara
Bank
Woori Global Market Asia
Limited
Woori Bank (China)
Limited
ZAO Woori Bank
Woori Brazil Bank
Korea BTL Infrastructure
Fund
Woori Fund Service
Money trust under the Trust
Business Act
Structured entity for the
securitization of financial
assets
Security investments
structured entity
As of and for the year ended December 31, 2013
Net income (loss)
attributable to
owners
Comprehensive
income (loss)
attributable to
owners
126,871
67,873
(3,634)
48,878
14,508
4,137
1,691
52,876
(32,644)
689
53,875
(95,596)
2,118
24,532
(18,214)
1,150
3,677
(114)
(4,522)
30,687
(270)
(293)
(65,385)
29,816
Assets
31,714,227
18,872,965
332,223
1,641,240
29,981,804
85,169
89,945
3,939,851
822,887
3,739
4,679,202
867,279
31,414
1,228,163
Liabilities
29,453,944
17,428,695
294,588
1,335,712
26,534,352
17,205
49,135
3,527,585
699,287
540
3,575,328
798,660
5,037
1,073,273
Operating
revenue
1,698,639
1,007,156
311,660
184,406
4,027,395
31,527
5,008
338,010
84,875
6,656
800,352
141,320
35,154
48,707
666,804
526,192
350,165
184,475
79,933
7,276
3,414,199
201,035
143,993
651,973
2,694
2,994,515
146,248
109,940
255
532
247,721
11,722
7,689
33,747
5,035
1,389,082
1,361,177
51,640
130,181
61,030
(2,054)
49,115
47,975
4,179
1,776
54,143
(33,515)
611
47,998
(96,649)
1,912
27,939
20,896
2,291
10,258
3,037
(127)
30,687
(270)
(293)
573,737
1,053,530
41,619
(58,662)
2,142,185
30,885
47,273
32,678
- 6 -
Woori Bank Annual Report 2014
113
(5) The financial support that the Group provides to consolidated structured entities is as follows:
- 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.
(6) 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 the limitation that they must have pre-approval
from their regulators in case of remittance of earnings to the Bank.
(7) The Group has entered into various agreements with structured entities such as asset securitization vehicles,
structured finance and investment funds, and monetary funds. Where it is determined in accordance with K-
IFRS 1110 that the Group has no controlling power over such structured entities, the entities are not
consolidated. The nature of interests, which the Group retains, and the risks, to which the Group is exposed,
of the unconsolidated structured entities are as follows:
The interests to unconsolidated structured entities, which the Group retains, are classified to asset
securitization vehicles, structured finance and investment fund, based on the nature and the purpose of the
structured entities.
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 purchases or pays 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.
- 7 -
Strength in Our ValueS 114
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.
Total assets of the unconsolidated structured entities, the carrying value of the related items recorded, the
maximum exposure to risks, and the loss recognized as of and for the year ended December 31, 2014 and
2013 are as follows (Unit: Korean Won in millions):
December 31, 2014
Asset
securitization
vehicle
8,701,441
Structured
finance
39,770,040
Investment
funds
7,174,629
613,105
185,946
190,303
-
236,807
-
49
70,638
70,638
2,295,445
613,105
340,560
1,341,780
-
-
2,484,397
2,293,115
-
153,606
-
-
37,676
564
564
3,016,797
2,484,395
-
470,590
61,812
6,661
926,993
-
-
586,035
-
340,958
-
-
-
926,993
926,993
-
-
-
36,961
December 31, 2013
Asset
securitization
vehicle
46,802,368
Structured
finance
29,994,406
Investment
funds
13,346,997
1,364,866
157,638
344,555
304,999
557,579
-
95
19,622
19,622
3,637,323
1,364,772
799,180
1,337,881
135,490
3,576
3,178,522
2,949,141
-
178,713
-
-
50,668
1,321
1,321
3,931,181
3,127,854
-
367,531
435,796
69,078
1,719,104
3,613
-
1,177,660
-
537,831
-
12
12
1,780,019
1,719,105
-
54,600
6,314
24,760
Total asset of the unconsolidated structured entities
Assets recognized in the consolidated financial statements
related to the unconsolidated structured entities
Loans and receivables
Financial assets at fair value through profit or loss
Available-for-sale financial assets
Held-to-maturity financial assets
Investments in joint ventures and associates
Derivative assets
Liabilities recognized in the consolidated financial
statements related to the unconsolidated structured entities
Other liabilities (including provisions)
The maximum exposure to risks
Investments
Purchase agreements
Credit facilities
Other agreements
Loss recognized on unconsolidated structured entities
Total asset of the unconsolidated structured entities
Assets recognized in the consolidated financial statements
related to the unconsolidated structured entities
Loans and receivables
Financial assets at fair value through profit or loss
Available-for-sale financial assets
Held-to-maturity financial assets
Investments in joint ventures and associates
Derivative assets
Liabilities recognized in the consolidated financial
statements related to the unconsolidated structured entities
Other liabilities (including provisions)
The maximum exposure to risks
Investments
Purchase agreements
Credit facilities
Other agreements
Loss recognized on unconsolidated structured entities
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115
(8) Subsidiaries of which non-controlling interests are significant to the Group’s consolidated financial
statements are as follows (Unit: Korean Won in millions):
1) Accumulated non-controlling interests at the end of the period
Woori Investment & Securities (*)
Woori Financial (*)
Woori Investment Bank
Indonesia Woori Saudara Bank
Korea BTL Infrastructure Fund
December 31, 2014
December 31, 2013
-
-
60,121
56,828
1,024
1,925,263
188,464
42,818
-
-
(*) Deconsolidated due to the Group’s disposal of the subsidiary for the year ended December 31, 2014.
As at the end of 2013, the accumulated non-controlling interest from hybrid securities issued by the
subsidiaries amounted to 2,870,356 million Won.
2) Net income attributable to non-controlling interests
Woori Investment & Securities (*)
Woori Financial (*)
Woori Investment Bank
Indonesia Woori Saudara Bank
Korea BTL Infrastructure Fund
For the year ended
December 31, 2014
For the year ended
December 31, 2013
(125,724)
-
2,215
702
48
(313,928)
28,925
(56,408)
-
-
(*) Deconsolidated due to the Group’s disposal of the subsidiary for the year ended December 31, 2014.
For the years ended December 31, 2014 and 2013, the net income which was attributed to non-
controlling interests due to hybrid securities issued by the subsidiaries amounted to 116,721 million
Won and 154,869 million Won, respectively.
3) Dividends to non-controlling interests
Woori Investment & Securities (*)
Woori Financial (*)
Korea BTL Infrastructure Fund
For the year ended
December 31, 2014
For the year ended
December 31, 2013
8,029
-
13
15,115
6,084
-
(*) Deconsolidated due to the Group’s disposal of the subsidiary for the year ended December 31, 2014.
4) Change of non-controlling interest due to merger
Indonesia Woori Bank, which was a subsidiary of the Bank, merged with Saudara Bank during the year
ended December 31, 2014, and then changed its name into Indonesia Woori Saudara Bank. Due to the
merger, the Bank’s ownership ratio of the company decreased from 95.2% to 74.0%. At the same time, the
non-controlling interests increased by 49,134 million Won, and the increase was recognized as the decrease
of equity attributable to the owner of the Bank (Note 51).
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Strength in Our ValueS
116
2.
SIGNIFICANT BASIS OF PREPARATION AND ACCOUNTING POLICIES
(1) Basis of presentation
The Group’s consolidated financial statements are prepared in accordance with Korean International Financial
Reporting Standards (“K-IFRS”).
The significant accounting policies that have been applied for the preparation of the consolidated financial
statements for the year ended on December 31, 2014 are described below, and the significant accounting policies
are the same as the accounting policies applied for the preparation of the previous year’s consolidated financial
statements, except the impacts from the adoptions of accounting standards or interpretations which are explained
below.
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 March 6, 2015.
1) The Group has newly adopted the following new standards and interpretations that affected the Group’s
accounting policies.
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 must not be conditional upon the occurrence of future events and can
be exercised anytime during the contract periods. The right to offset is executable even in the case of
default or insolvency. As the Group does not have any financial assets and financial liabilities that qualify
for offset based on the criteria set out in the amendments and concluded that the application of the
amendments has no significant impact on the Group’s consolidated financial statements.
Amendments to K-IFRS 1110, 1112, and 1027 – Investment Entities
Investment Entities introduced an exception to the principle in K-IFRS 1110 Consolidated financial
statement that all subsidiaries shall be consolidated. The amendments define an investment entity and
require a parent that is an investment entity to measure its investment in particular subsidiaries at fair value
through profit or loss instead of consolidating those subsidiaries in its consolidated financial statements.
Also, the new disclosure requirements for investment entities in accordance with the amendments of K-
IFRS 1110 have been introduced by consequential amendments to K-IFRS 1112 Disclosure of Interests in
Other Entities and K-IFRS 1027 Separate Financial Statements. The adoption of the amendments has no
significant impact on the Group’s consolidated financial statements.
Amendments to K-IFRS 1036 – Impairment of Assets
The amendments introduced disclosure requirements of recoverable amount when the recoverable amount
of an asset or CGU is measured at fair value less costs of disposal. The application of these amendments
has no impact on the disclosure in the Group’s consolidated financial statements.
Amendments to K-IFRS 1039 – Financial Instruments: Recognition and Measurement
The amendments permits the Group to use hedge accounting when, as a consequence of laws or regulations
or the introduction of laws or regulations, the original counterparty to the hedging instrument is replaced by
a central counterparty or an entity which is acting as counterparty in order to effect clearing by a central
counterparty. The adoption of the amendments has no significant impact on the consolidated financial
statements.
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Woori Bank Annual Report 2014 117
Enactment of K-IFRS 2121 – Levies
The enactment defines that the obligating event giving rise to the recognition of a liability to pay a levy is
the activity that triggers the payment of the levy in accordance with the related legislation. The enactment
has no significant impact on the Group’s consolidated financial statements.
2) The Group has not applied the following K-IFRSs that have been issued but are not yet effective:
Amendments to K-IFRS 1019 – Employee Benefits
If the amount of the contributions is independent from the numbers of years of service, the Group is
permitted to recognize such contributions as a reduction in the service cost in the period in which the
related service is rendered. The amendments are effective for the annual periods beginning on or after July
1, 2014. The Group anticipates that the amendments and enactments listed above may not have significant
impact on the Group’s consolidated financial statements.
Amendments to K-IFRS 1016 – Property, plant and Equipment
The amendments to K-IFRS 1016 prohibit the Group from using a revenue-based depreciation method for
items of property, plant and equipment. The amendments are effective for the annual periods beginning on
or after January 1, 2016.
Amendments to K-IFRS 1038 – Intangible Assets
The amendments to IAS 38 introduce a rebuttable presumption that revenue is not an appropriate basis for
amortization of an intangible asset unless the intangible asset is expressed as a measure of revenue, or it
can be demonstrated that revenue and the consumption of the economic benefits of the intangible asset are
highly correlated. The amendments are effective for the annual periods beginning on or after January 1,
2016.
Amendments to K-IFRS 1111 – Accounting for Acquisitions of Interests in Joint Operations
The amendments to K-IFRS 1111 provides guidance on how to account for the acquisition of joint
operation that constitutes a business as defined in K-IFRS 1103 Business Combinations. A joint operator is
also required to disclose the relevant information required by K-IFRS 1103 and other standards for business
combinations. The amendments to K-IFRS 1111 are effective for the annual periods beginning on or after
January 1, 2016.
Annual Improvements to K-IFRS 2010-2012
The amendments to K-IFRS 1102 Share-based payment (i) changes the definitions of ‘vesting condition’
and ‘market condition’; and (ii) add definition for ‘performance condition’ and ‘service condition’ which
were previously included within the definition of ‘vesting condition’. The amendments to K-IFRS 1103
clarify the classification and measurement of the contingent consideration in business combination. The
amendments to K-IFRS 1108 Operating Segments clarify that a reconciliation of the total of the reportable
segments’ assets should only be provided if the segment assets are regularly provided to the chief operating
decision maker. The amendments are effective for the annual periods beginning on or after July 1, 2014.
Annual Improvements to K-IFRS 2011-2013
The amendments to K-IFRS 1103 clarify the scope of the portfolio exception for measuring the fair values
of the group of financial assets and financial liabilities on a net basis includes all contracts that are within
the scope the standard does not apply to the accounting for the formation of all types of joint arrangement
in the financial statements of the joint arrangement itself. The amendments to K-IFRS 1113 Fair values
Measurements and K-IFRS 1040 Investment Properties exist and these amendments are effective to the
annual periods beginning on or after July 1, 2014.
The Group is reviewing the impact from the amendments listed above on the Group’s consolidated
financial statements.
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Strength in Our ValueS 118
(2) Basis of consolidated financial statement presentation
The consolidated financial statements incorporate the financial statements of the Bank and entities (including
structured entities) controlled by the Bank (and its subsidiaries, that is the Group). Control is achieved where the
Group 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 Group 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 Group 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 Group considers all relevant facts and circumstances in assessing whether or not the Bank's
voting rights in an investee are sufficient to give it power, including:
• The size of the Group's holding of voting rights relative to the size and dispersion of holdings of the other
vote holders,
• Potential voting rights held by the Group, other vote holders or other parties
• Rights arising from other contractual arrangements
• Any additional facts and circumstances that indicate that the Group 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 Group gains control until the date when the Group ceases
to control the subsidiary. Profit or loss and each component of other comprehensive income are attributed to the
owner of the Group and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed
to the owner of the Group and to the non-controlling interests even if this results in the non-controlling interests
having a deficit balance.
Where 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 Group.
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 Group 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.
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Woori Bank Annual Report 2014 119
(3) Business Combinations
Acquisitions of subsidiaries and 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 acquisition-
date fair values of the assets transferred by the Group, liabilities assumed 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 net income as incurred.
At the acquisition date, the acquiree’s identifiable assets, liabilities and contingent liabilities that meet the
condition for recognition under K-IFRS 1103 are recognized at their fair value, except that:
• deferred tax assets or liabilities and assets or liabilities 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
• non-current 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 at the lower of their
previous carrying amounts and fair value less costs to sell.
Any excess of the sum of the consideration transferred, the amount of any non-controlling interest in the
acquiree and the fair value of the Group’s previously held equity interest (if any) in the acquiree over the net of
identifiable assets and liabilities assumed of the acquiree at the acquisition date is recognized as goodwill which
is included in intangible assets.
If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the
sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value
of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognized immediately in
net income 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 at fair value at the acquisition date (i.e. the date when the Group obtains control) and the resulting
gain or loss, if any, is recognized in net income. Amounts arising from changes in value of interests in the
acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are
reclassified to net income where such treatment would be appropriate if that interest were disposed of.
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Strength in Our ValueS 120
In case where i) a common entity ultimately controls over all participating entities, or businesses, in business
combination transaction, prior to and after the transaction continuously, and ii) the control is not temporary, the
transaction meets the definition of “business combination under common control” and it is deemed that the
transaction only results in the changes in legal substance, not economic substance, from the perspective of the
ultimate controlling party. Thus, in such transactions, the acquirer recognizes the assets and liabilities of the
acquiree on its financial statements at the book values as recognized in the ultimate controlling party’s
consolidated financial statements, and the difference between the book value of consideration transferred to and
the book value of net assets transferred in is recognized as equity.
(4)
Investments in joint ventures and associates
An associate is an entity over which the Group has significant influence. Significant influence is the power to
participate in making decision on the financial and operating policy of the investee but is not control or joint
control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights
to net assets relating to the arrangement. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the
parties sharing control.
The net income of current period and the financial results of the joint ventures and 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 the joint ventures and
associates is initially recognized in the consolidated statements of financial position at cost and adjusted
thereafter to recognize the Group's share of the net assets of the joint ventures and associates and any impairment.
When the Group's share of losses of the joint ventures and associates exceeds the Group's interest 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 joint ventures
and associates.
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 the joint ventures and associates 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 is recognized immediately in net income.
Upon a loss of significant influence over the joint ventures and associates, the Group discontinues the use of the
equity method and measures at fair value of any investment that the Group retains in the former joint ventures
and associates from the date when the Group loses significant influence. The fair value of the investment is
regarded as its fair value on initial recognition as a financial asset in accordance with K-IFRS 1039 Financial
Instruments; Recognition and Measurement. The Group recognized differences between the carrying amount and
fair value in net income and it is included in determination of the gain or loss on disposal of joint ventures and
associates. The Group accounts for all amounts recognized in other comprehensive income in relation to that
joint ventures and associates on the same basis as would be required if the joint ventures and associates had
directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognized in other
comprehensive income by an associate would be reclassified to net income on the disposal of the related assets
or liabilities, the Group reclassifies the gain or loss from equity to net income as a reclassification adjustment.
When the Group’s ownership of interest in an associate or a joint venture decreases but the Group continues to
maintain significant influence over an associate or a joint venture, 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
decrease in ownership interest if the gain or loss would be reclassified to profit or loss on the disposal of the
related assets or liabilities. Meanwhile, if interest on associate or joint venture meets the definition of non-
current asset held for sale, it is accounted for in accordance with K-IFRS 1105.
The requirements of K-IFRS 1039 Financial Instruments: Recognition and Measurement to determine whether
there has been a loss event are applied to identify whether it is necessary to recognize any impairment loss with
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Woori Bank Annual Report 2014 121
respect to the Group’s investment in the joint ventures and associates. When necessary, the entire carrying
amount of the investment (including goodwill) is tested for impairment in accordance with K-IFRS 1036
Impairment of Assets as a single asset 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 is not allocated to any asset
(including goodwill), which 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.
The Group continues to use the equity method when an investment in an associate becomes an investment in a
joint venture or an investment in a joint venture becomes an investment in an associate. There is no
remeasurement to fair value upon such changes in ownership interests.
When a subsidiary transacts with an associate or a joint venture of the Group, profits and losses resulting from
the transactions with the associate or joint venture are recognized in the Group's consolidated financial
statements only to the extent of interests in the associate or joint venture that are not related to the Group.
(5)
Investment in Joint operation
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have
rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the
contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant
activities require the unanimous consent of the parties sharing control.
When the Group operates as a joint operator, it recognizes in relation to its interest in a joint operation:
(a) its assets, including its share of any assets held jointly;
(b) its liabilities, including its share of any liabilities incurred jointly;
(c) its revenue from the sale of its share of the output arising from the joint operation;
(d) its share of the revenue from the sale of the output by the joint operation; and
(e) its expenses, including its share of any expenses incurred jointly.
The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in
accordance with the IFRSs applicable to the particular assets, liabilities, revenues and expenses.
When the Group enters into a transaction with a joint operation in which it is a joint operator, such as a sale or
contribution of assets, it is conducting the transaction with the other parties to the joint operation and, as such,
the Group recognizes gains and losses resulting from such a transaction only to the extent of the other parties’
interests in the joint operation.
When the Group enters into a transaction with a joint operation in which it is a joint operator, such as a purchase
of assets, it does not recognize its share of the gains and losses until it resells those assets to a third party.
(6) Revenue recognition
1) Interest income
Interest income is recognized when earned. Interest income on financial assets that are classified as loans
and receivables, available-for-sale or held-to-maturity is determined using the effective interest method.
The effective interest method is a method of calculating the amortized cost of a financial asset (or group of
financial assets) and of allocating the interest income over the expected life of the asset. The effective
interest rate is the rate that exactly discounts estimated future cash flows to the instrument's initial carrying
amount. Calculation of the effective interest rate takes into account fees payable or receivable that is an
integral part of the instrument's yield, premiums or discounts on acquisition or issue, early redemption fees
and transaction costs. All contractual terms of a financial instrument are considered when estimating future
cash flows.
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Strength in Our ValueS 122
2) Loan origination fees and costs
The commission fees earned on loans, 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.
3) Fees and commissions income
Commitment and utilization fees are determined as a percentage of the outstanding facility. If it is unlikely
that a specific lending arrangement will be entered into, such fees are taken to net income over the life of
the facility otherwise they are deferred and included in the effective interest rate on the advance.
Fees in respect of services are recognized as the right to consideration accrues through the provision of the
service to the customer. The arrangements are generally contractual and the cost of providing the service is
incurred as the service is rendered. The price is usually fixed and determinable.
Credit card fees include commission received from merchants for processing credit card transaction and
annual fees received from credit card holders. Revenue from the commission is accrued to net income when
the service performed and annual fee is deferred and recognized as income over the period of the service
provided.
4) Trust fees and compensation related to trust accounts
The Group receives fees for its management of unconsolidated trust assets, which are recognized on an
accrual basis when the management services are provided and earned. The Group also is entitled to receive
performance-based fees for certain trust accounts. These performance-based fees are recognized at the end
of the performance period. In addition, a certain trust account which the Group guarantees to repay the
principals and minimum interests of the trust account to its beneficiaries shall be included in the
consolidated financial statements. The Group recognizes incomes when earned and expenses when interests
to be paid to beneficiaries are accrued.
(7) Accounting for foreign currencies
The Group’s consolidated financial statements are presented in Korean Won, which is the functional currency of
the Bank. At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies
are translated to the functional currency at its prevailing exchange rates at the date. Foreign exchange differences
on monetary items that qualify as hedging instruments in a cash flow hedge or that form part of net investment in
foreign operations are recognized in equity.
A monetary available-for-sale (“AFS”) financial asset is treated as if it were carried at amortized cost in the
foreign currency. Accordingly, for such financial assets, exchange differences resulting from retranslating
amortized cost are recognized in net income.
Non-monetary items denominated in foreign currencies that are stated at fair value are translated into Korean
Won at foreign exchange rates at the dates the values were determined. Translation differences arising on non-
monetary items measured at fair value are recognized in net income except for differences arising on non-
monetary AFS financial assets, for example equity shares, which are included in the AFS reserve in equity unless
the asset is the hedged item in a fair value hedge.
The Group identifies the most appropriate functional currency for each foreign operation based on the foreign
operation’s activities. If Korean Won is not the foreign operation’s functional currency, its assets and liabilities,
including goodwill and fair value adjustments arising on acquisition, are translated into Korean Won at foreign
exchange rates at the end of each reporting date while the revenues and expenses are translated into Korean Won
at average exchange rates for the period unless these do not approximate to the foreign exchange rates at the
dates of the transactions. Foreign exchange differences arising on the translation of a foreign operation are
recognized directly in equity and included in net income on its disposal.
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Woori Bank Annual Report 2014
123
(8) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, demand deposits, interest-earning deposits with original
maturities of up to 90 days of acquisition date and highly liquid investment assets that are readily convertible to
known amounts of cash and subject to an insignificant risk of changes in value.
(9) Financial assets and financial liabilities
1) Financial assets
A regular way purchase or sale of financial assets is recognized or derecognized on the trade or settlement
date. A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose term
requires delivery of the asset within the time frame established generally by regulation or convention in the
marketplace concerned.
On initial recognition, financial assets are classified into held-for-trading, designated as at fair value
through profit or loss (“FVTPL”), AFS financial assets, held-to-maturity (“HTM”) investments and loans
and receivables.
Held-for-trading:
A financial asset is classified as held-for-trading if it is acquired principally for sale in the near term, or
forms part of a portfolio of financial instruments that are managed together and for which there is evidence
of short-term profit taking, or it is a derivative (not in a qualifying hedge relationship). Held-for-trading
financial assets are recognized at fair value with transaction costs being recognized in net income.
Subsequently they are measured at fair value. Gains and losses on held-for-trading financial assets are
recognized in net income as they arise.
Designated as at FVTPL:
Financial assets may be designated as at FVTPL only if such designation (a) eliminates or significantly
reduces a measurement or recognition inconsistency; (b) applies to a group of financial assets, financial
liabilities or both, which is managed and performance is evaluated on a fair value basis; or (c) is related to a
contract containing one or more embedded derivative that would be required to be separated from the host
contract.
Financial assets designated by the Group on initial recognition as at FVTPL are recognized at fair value,
with transaction costs recognized in net income, and are subsequently measured at fair value. Gains and
losses on financial assets that are designated as at FVTPL are recognized in net income as they arise.
AFS financial assets:
Financial assets that are not classified as HTM; held-for-trading; designated as at FVTPL; or loans and
receivables, are classified as AFS. Financial assets can be designated as AFS on initial recognition. AFS
financial assets are initially recognized at fair value plus directly related transaction costs. They are
subsequently measured at fair value. Unquoted equity investments whose fair value cannot be measured
reliably are carried at cost and classified as AFS financial assets. Impairment losses in monetary and non-
monetary AFS financial assets and dividends on non-monetary financial assets are recognized in net
income. Interest revenue on monetary financial assets is calculated using the effective interest method.
Other changes in the fair value of AFS financial assets and any related tax are reported in a separate
component of shareholders' equity until disposal, when the cumulative gain or loss is recognized in net
income.
HTM investments:
A financial asset may be classified as a HTM investment only if it has fixed or determinable payments, a
fixed maturity, and the Group has the positive intention and ability to hold the financial asset to maturity.
HTM investments are initially recognized at fair value plus directly related transaction costs. They are
subsequently measured at amortized cost using the effective interest method less any impairment losses.
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,
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Strength in Our ValueS 124
or designated as at FVTPL. Loans and receivables are initially recognized at fair value plus directly related
transaction costs. They are subsequently measured at amortized cost using the effective interest method less
any impairment losses. Interest income is recognized using the effective interest method, except for the
short-term receivables to which the present value discount is not meaningful.
2) Financial liabilities
On initial recognition financial liabilities are classified into held-for-trading; designated as at FVTPL; or
amortized cost.
Held-for-trading:
A financial liability is classified as held-for-trading if it is incurred principally for repurchase in the near
term, or forms part of a portfolio of financial instruments that are managed together and for which there is
evidence of short-term profit taking, or it is a derivative (not in a qualifying hedge relationship). Held-for-
trading financial liabilities are recognized at fair value with transaction costs being recognized in net
income. Subsequently, they are measured at fair value. Gains and losses are recognized in net income as
they arise.
Designated as at FVTPL:
Financial liabilities may be designated as at FVTPL only if such designation (a) eliminates or significantly
reduces a measurement or recognition inconsistency; (b) applies to a group of financial liabilities or both
that the Group manages and evaluates on a fair value basis; or (c) relates to an instrument that contains an
embedded derivative which is not evidently closely related to the host contract. Financial liabilities that the
Group designates on initial recognition as being at FVTPL are recognized at fair value, with transaction
costs being recognized in net income, and are subsequently measured at fair value. Gains and losses on
financial liabilities that are designated as at FVTPL are recognized in net income as they arise.
Amortized cost:
All other financial liabilities are measured at amortized cost using the effective interest method.
3) Reclassifications
Held-for-trading and AFS financial assets that meet the definition of loans and receivables (non-derivative
financial assets with fixed or determinable payments that are not quoted in an active market) may be
reclassified to loans and receivables if the Group has the intention and ability to hold the financial asset for
the foreseeable future or until maturity. The Group typically regards the foreseeable future as twelve
months from the date of reclassification. Reclassifications are made at fair value. This fair value becomes
the asset's new cost or amortized cost as appropriate. Gains and losses recognized up to the date of
reclassification are not reversed.
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
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
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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.
5) Fair value of financial assets and liabilities
Financial instruments classified as held-for-trading or designated as at FVTPL and financial assets
classified as AFS are recognized in the financial statements at fair value. All derivatives are measured at
fair value.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in and orderly
transaction between market participants at the measurement date. Fair values are determined from quoted
prices in active markets for identical financial assets or financial liabilities where these are available. The
Group characterizes active markets as those in which transactions for the asset or liability take place with
sufficient frequency and volume to provide pricing information on an ongoing basis.
Where a financial instrument is not in active market characterized by low transaction volumes, price
quotations which vary substantially among market participants, or in which minimal information is released
publicly, fair values are established using valuation techniques rely on alternative market data or internally
developed models using significant inputs that are generally readily observable from objective sources.
Market data includes prices of financial instruments with similar maturities and characteristics, duration,
interest rate yield curves, and measures of volatility. The amount determined to be fair value may
incorporate the management of the Group’s own assumptions (including assumptions that the Group
believes market participants would use in valuing the financial instruments and assumptions relating to
appropriate risk adjustments for nonperformance and lack of marketability).
The valuation techniques used to estimate the fair value of the financial instruments include market
approach and income approach, each of which involves a significant degree of judgment. Under the market
approach, fair value is determined by reference to a recent transaction involving the financial instruments or
by reference to observable valuation measures for comparable companies or assets.
Under the income approach, fair value is determined by converting future amounts (e.g., cash flows or
earnings) to a single present amount (discounted) using current market expectations about the future
amounts. In determining value under this approach, the Group makes assumptions regarding, among other
things, revenues, operating income, depreciation and amortization, capital expenditures, income taxes,
working capital needs, and terminal value of the financial investments. These valuation techniques involve
a degree of estimation, the extent of which depends on the instrument’s complexity and the availability of
market-based data.
The following are descriptions of valuation methodologies used by the Group to measure various financial
instruments at fair value.
Financial assets at FVTPL and AFS financial assets:
The fair value of the securities included in financial assets at FVTPL and AFS financial assets are
recognized in the consolidated statements of financial position based on quoted market prices, where
available. For debt securities traded in the OTC market, the Group generally determines fair value based on
prices obtained from independent pricing services. Specifically, with respect to independent pricing
services, the Group obtains three prices per instrument from reputable independent pricing services in
Korea, such as Korea Asset Pricing (an affiliate of Fitch Ratings), KIS Pricing (an affiliate of Moody’s
Investors Service) and NICE Pricing Service, and generally uses the lowest of the prices obtained from
such services without further adjustment. For non-marketable equity securities, the Group obtains prices
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Strength in Our ValueS 126
from Korea Asset Pricing. The Group validates prices received from such independent pricing services
using a variety of means, including verification of the qualification of the independent pricing services,
corroboration of the pricing by comparing the prices among the independent pricing services and by
reference to other available market data, and review of the pricing model and assumptions used by the
independent pricing services by the Group’s personnel who are familiar with market-related conditions.
Derivative assets and liabilities:
Quoted market prices are used for the Group’s exchange-traded derivatives, such as certain interest rate
futures and option contracts. All of the Group’s derivatives are traded in OTC markets where quoted
market prices are not readily available are valued using internal valuation techniques. Valuation techniques
and inputs to internally developed models depend on the type of derivative and nature of the underlying
rate, price or index upon which the derivative’s value is based. If the model inputs for certain derivatives
are not observable in a liquid market, significant judgments on the level of inputs used for valuation
techniques are required.
Valuation Adjustments:
By using derivatives, the Group is exposed to credit risk if counterparties to the derivative contracts do not
perform as expected. If counterparty fails to perform, counterparty credit risk is equal to the amount
reported as a derivative asset in the consolidated statements of financial position. The amounts reported as a
derivative asset are derivative contracts in a gain position. Few of the Group’s derivatives are listed on an
exchange. The majority of derivative positions are valued using internally developed models that use as
their basis observable market inputs. Therefore, an adjustment is necessary to reflect the credit quality of
each counterparty to arrive at fair value. Counterparty credit risk adjustments are applied to derivative
assets, such as OTC derivative instruments, when the market inputs used in valuation models may not be
indicative of the creditworthiness of the counterparty. Adjustments are also made when valuing financial
liabilities to reflect the Group’s own credit standing.
The adjustment is based on probability of default of a counterparty and loss given default. The adjustment
also takes into account contractual factors designed to reduce the Group’s credit exposure to each
counterparty. To the extent derivative assets (liabilities) are subject to master netting arrangements, the
exposure used to calculate the credit risk adjustment is net of derivatives in a loss (gain) position with the
same counterparty and cash collateral received (paid).
6) Impairment of the financial assets
The Group assesses at the end of each reporting date whether there is any objective evidence that a
financial asset or group of financial assets classified as AFS, HTM or loans and receivables is impaired. A
financial asset or portfolio of financial assets is impaired and an impairment loss incurred if there is
objective evidence of impairment as result of one or more events that occurred after the initial recognition
asset and that event (or events) has an impact on the estimated future cash flows of the financial asset.
Financial assets carried at amortized cost:
If there is objective evidence that an impairment loss on a financial asset or group of financial assets
classified as HTM investments or as loans and receivables has been incurred, the Group measures the
amount of the loss as the difference between the carrying amount of the asset or group of assets and the
present value of estimated future cash flows from the asset or group of assets discounted at the effective
interest rate of the instrument at initial recognition. For collateralized loans and receivables, estimated
future cash flows include cash flows that may result from foreclosure less the costs of obtaining and selling
the collateral.
Impairment losses are assessed individually for financial assets that are individually significant and
assessed either individually or collectively for assets that are not individually significant. In making
collective assessment of impairment, financial assets are grouped into portfolios on the basis of similar risk
characteristics. Future cash flows from these portfolios are estimated on the basis of the contractual cash
flows and historical loss experience for assets with similar credit risk characteristics. Historical loss
experience is adjusted, on the basis of observable data, to reflect current conditions not affecting the period
of historical experience.
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Woori Bank Annual Report 2014 127
Impairment losses are recognized in net income and the carrying amount of the financial asset or group of
financial assets reduced by establishing a provision for impairment losses. If, in a subsequent period, the
amount of the impairment loss reduces and the reduction can be ascribed to an event after the impairment
was recognized, the previously recognized loss is reversed by adjusting the provision. Once an impairment
loss has been recognized on a financial asset or group of financial assets, interest income is recognized on
the carrying amount using the rate of interest at which estimated future cash flows were discounted in
measuring impairment.
It is not the Group’s usual practice to write-off the asset at the time an impairment loss is recognized.
Impaired loans and receivables are written off (i.e. the impairment provision is applied in writing down the
loan's carrying value in full) when the Group concludes that there is no longer any realistic prospect of
recovery of part or the entire loan. Amounts recovered after a loan has been written off are reflected to the
provision for the period in which they are received.
Financial assets carried at fair value:
When a decline in the fair value of a financial asset classified as AFS has been recognized directly in other
comprehensive income and there is objective evidence that the asset is impaired, the cumulative loss is
removed from other comprehensive income and recognized in net income. The loss is measured as the
difference between the amortized cost of the financial asset and its current fair value. Impairment losses on
AFS equity instruments are not reversed through net income, but those on AFS debt instruments are
reversed, if there is a decrease in the cumulative impairment loss that is objectively related to a subsequent
event.
(10) Offsetting financial instruments
Financial assets and liabilities are presented in 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 simultaneously.
(11) Investment properties
The Group classifies a property held to earn rentals and/or for capital appreciation as an investment property.
Investment properties are measured initially at cost, including transaction costs, less subsequent depreciation and
impairment.
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 are 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 change in estimate accounted for
on a prospective basis.
An investment property is derecognized from the consolidated financial statements on disposal or when it is
permanently withdrawn from use and no future economic benefits are expected even from its disposal. The gain
or loss on derecognition of an investment property is calculated as the difference between the net disposal
proceeds and the carrying amount of the property and is recognized in profit or loss in the period of the
derecognition.
(12) 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.
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Strength in Our ValueS 128
Subsequent costs to replace part of the premises and equipment are recognized in carrying amount of
an asset or as an 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. Routine maintenance and
repairs are expensed as incurred.
While land is not depreciated, for all other premises and equipment, depreciation is charged to net income on a
straight-line basis on the estimated economic useful lives as follows:
Buildings used for business purpose
Structures in leased office
Properties for business purpose
Leased assets
Useful life
35 to 57 years
4 to 5 years
4 to 5 years
Useful lives of the same kind or
similar other premises and equipment
The Group reassesses the depreciation method, the estimated useful lives and residual values of premises and
equipment 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. 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.
(13) Intangible assets and goodwill
Intangible assets are stated at the manufacturing cost or acquisition cost plus additional incidental expenses less
accumulated amortization and accumulated impairment losses. The Group’s software and industrial property
right (trademark) are amortized over five years using the straight-line method. 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.
Patents
Development costs
Software and others
Useful life
10 years
5 years
4 to 5 years
In addition, when an indicator that intangible assets are impaired is noted, and the carrying amount of the asset
exceeds the estimated recoverable amount of the asset, the carrying amount of the asset is reduced to its
recoverable amount immediately.
Goodwill acquired in a business combination is included in intangible assets. Goodwill is not amortized but
tested for impairment annually to the extent of reporting unit and when there is any indication of impairment.
Goodwill acquired is allocated to each of the Group’s cash-generating units (“CGU”) expected to benefit from
the synergies of the combination. A CGU to which goodwill has been allocated is tested for impairment annually,
or more frequently when there is indication that the CGU may be impaired. If the recoverable amount of the
CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the CGU and then to the other assets of the CGU on a pro-rata basis based on the carrying
amount of each asset in the CGU. 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.
(14) Impairment of non-monetary assets
Intangible assets with indefinite useful lives or intangible assets that are not yet available for use are tested for
impairment annually, regardless of whether or not there is any indication of impairment. 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. Recoverable amount is the higher of value
in use and net fair value less costs to sell. If the recoverable amount of an asset is estimated to be less than its
carrying amount, the carrying amount of the asset is reduced to its recoverable amount and such impairment loss
is recognized immediately in net income.
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129
(15) Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee. All other leases are classified as operating leases.
1) As a lessor
Amounts due from lessees under finance leases are recognized as receivables at the amount of the Group’s
net investment in the leases being the minimum lease payments and any unguaranteed residual value
discount interest rate implicit in the lease. Finance lease income is allocated to accounting periods so as to
reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.
Rental income from operating leases is recognized on a straight-line basis over the term of the relevant
lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying
amount of the leased asset and recognized on a straight-line basis over the lease term. Operating lease
assets are included within premise and equipment and depreciated over their useful lives.
2) As a 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 payments are apportioned between finance expenses and reduction of the lease obligation
so as to achieve a constant rate of interest on the remaining balance of the liability. Contingent rentals
arising under finance leases are recognized as expenses in the periods in which they are incurred.
Operating lease payments are recognized as an expense on a straight-line basis over the lease term, except
where another systematic basis is more representative of the time pattern in which economic benefits from
the leased asset are consumed. Contingent rentals arising under operating leases are recognized as expenses
in the period in which they are incurred.
(16) Derivative instruments
Derivative instruments are classified as forward, futures, option, and swap, depending on the types of
transactions and are classified as either trading or hedging if they are qualified for hedge accounting. Derivatives
are initially recognized at fair value at the date the derivative contract is entered into and are subsequently
measured 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.
A derivative embedded in a contract is accounted for as a stand-alone derivative if its economic characteristics
are not closely related to the economic characteristics of the host contract; unless the entire contract is measured
at fair value with changes in fair value recognized in net income.
The Group designates certain hedging instruments to (a) hedge of the exposure to changes in fair value of a
recognized asset or liability or an unrecognized firm commitment (fair value hedge); (b) 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 forecasted transaction (cash flow hedge); and (c) 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.
1) Fair value hedge
Changes in the fair value of derivatives that are designated and qualified 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
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the hedging relationship or when the hedging instrument is no longer qualified for hedge accounting. 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.
2) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualified 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 when the hedged item is recognized in net
income.
Hedge accounting is discontinued when the hedging instrument is expired or sold, or it is no longer
qualified for hedge accounting, and any cumulative gain or loss in other comprehensive income remains in
equity until 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.
3) Net investment hedge
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. The
effective portion of changes in the fair value of the hedging instrument is recognized in equity while the
ineffective portion is recognized immediately in net income. The cumulated gain and loss in other
comprehensive income is reclassified from equity to profit or loss on the disposal or partial disposal of the
foreign operations.
(17) Assets (or Disposal group) 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. For this, the non-current
asset (or disposal group) must be available for immediate sale in its present condition subject only to terms that
are usual and customary for sales of such assets (or disposal groups) and its sale must be highly probable. For the
sale to be highly probable, the appropriate level of management must be committed to a plan to sell the asset (or
disposal group), and an active programme to locate a buyer and complete the plan must have been initiated. In
addition, the sale should be expected to qualify for recognition as a completed sale within one year from the date
of classification.
When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and
liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of
whether the Group will retain a non-controlling interest in its former subsidiary after the sale.
When the Group is committed to a sale plan involving disposal of an investment, or a portion of an investment,
in an associate or joint venture, the investment or the portion of the investment that will be disposed of is
classified as held for sale when the criteria described above are met, and the Group discontinues the use of the
equity method in relation to the portion that is classified a held for sale. Any retained portion of an investment in
an associate or a joint venture that has not been classified as held for sale continues to be accounted for using the
equity method. The Group discontinues the use of the equity method at the time of disposal when the disposal
results in the Group losing significant influence over the associate or joint venture.
After the disposal takes place, the Group accounts for any retained interest in the associate or joint venture in
accordance with K-IFRS 1039 Financial Instruments: Recognition and Measurement unless the retained interest
continues to be an associate or a joint venture, in which case the Group uses the equity method.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous
carrying amount and fair value less costs to sell.
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Woori Bank Annual Report 2014 131
(18) Disposal group held for distribution to owners
A disposal group is classified as held for distribution to owners when the Group is committed to distribute the
disposal group to the owners. For this to be the case the assets must be available for immediate distribution in
their present condition and the distribution must be highly probable. For the distribution to be highly probable,
actions to complete the distribution must have been initiated and should be expected to be completed within one
year from the date of classification.
When a subsidiary is determined as held for distribution to owners and that will result in the loss of control, all
the assets and liabilities of the subsidiary shall be classified as held for distribution to owners regardless of
retaining the non-controlling interest of the subsidiary.
The Group measures disposal group classified as held for distribution to owners at the lower of its carrying
amount and fair value less costs to distribute.
(19) Provisions
The Group recognizes provision if it has a present or contractual obligations as a result of the 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. Provision is not recognized for the future operating losses.
The Group recognizes provision related to the unused portion of point rewards earned by credit card customers,
payment guarantees, loan commitment 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.
(20) Capital and compound financial instruments
The Group classifies a financial instrument that it issues as a financial liability or an equity instrument in
accordance with the substance of the contractual arrangement. An instrument is classified as a liability if it is a
contractual obligation to deliver cash or another financial asset, or to exchange financial assets or financial
liabilities on potentially unfavorable terms. An instrument is classified as equity if it evidences a residual interest
in the assets of the Group after the deduction of liabilities. The components of a compound financial instrument
issued by the Group are classified and accounted for separately as financial liabilities or equity as appropriate.
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.
(21) Financial guarantee contracts
Under a financial guarantee contract, the Group, in return for a fee, undertakes to meet a customer’s obligations
under the terms of a debt instrument if the customer fails to do so.
A financial guarantee is recognized as a liability; initially at fair value and, if not designated as at FVTPL,
subsequently at the higher of its initial value less cumulative amortization and any provision under the contract
measured in accordance with provision policy. Amortization is calculated so as to recognize fees receivable in
net income over the period of the guarantee.
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Strength in Our ValueS 132
(22) Employee benefits and pensions
The Group recognizes the undiscounted amount of short-term employee benefits expecting payment in exchange
for the services, when employee renders services. Also, the Group recognizes expenses and liabilities in the case
of accumulating compensated absences, when the employees render service that increases their entitlement to
future compensated absences. Though the Group may have no legal obligation to pay a bonus, considering some
cases, the Group has a practice of paying bonuses. In such cases, the Group has a constructive obligation, and
thus recognizes expenses and liabilities when the employees render service.
The Group is operating defined contribution retirement pension plans and defined benefit retirement pension
plans. Contributions to defined contribution retirement pension plans are recognized as an expense when
employees have rendered service entitling them to the contributions. For defined benefit retirement pension 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.
Liabilities for termination benefits are recognized at the earlier of either 1) when the Group has become not able
to cancel its proposal for termination benefits, or 2) when the Group has recognized the cost of restructuring that
accompanies the payment of termination benefits.
(23) Income taxes
Income tax expense represents the sum of the tax currently payable and deferred tax. Current income tax expense
approximates taxes to be paid or refunded for the current period and deferred income tax expense is provided on
an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences,
including operating losses and tax credit carryforwards, and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the carrying values of assets and
liabilities for financial reporting purposes and their tax bases. Deferred income tax benefit or expense is then
recognized for the change in deferred tax assets or liabilities between periods. Deferred tax assets and liabilities
are measured at the tax rates on the date of enactment or substantive enactment that are expected to apply in the
period in which the liability is settled or the asset realized. Deferred tax assets, including the carryforwards of
unused tax losses, are recognized to the extent it is probable that the deferred tax assets will be realized.
Deferred income tax assets and liabilities are offset if, and only if the Group has a legally enforceable right to
offset current tax assets against current tax liabilities, and the deferred tax assets and liabilities relate to income
taxes levied by the same taxation authority on either the taxable entity or different taxable entities which intend
either to settle current tax liabilities and assets on a net basis.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset
to be recovered.
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Woori Bank Annual Report 2014 133
Deferred liabilities are not recognized if the temporary difference arises from goodwill. Deferred tax assets or
liabilities are not recognized if they arise from the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in
other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized
in other comprehensive income or directly in equity respectively.
(24) Earnings per share (“EPS”)
Basic EPS is calculated by earnings subtracting the dividends paid to holders of preferred stock and hybrid
securities from the net income attributable to ordinary shareholders from the statements of comprehensive
income and dividing by the weighted average number of common shares outstanding. Diluted EPS is calculated
by adjusting the earnings and number of shares for the effects of all dilutive potential common shares.
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
5. OPERATING SEGMENTS
In evaluating the results of the Group and allocating resources, the Group’s Chief Operation Decision Maker (the
“CODM”) utilizes the information per types of customers. This financial information of the segments is
regularly reviewed by the CODM to make decisions about resources to be allocated to each segment and
evaluate its performance.
(1) Segment by types of customers
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. Meanwhile, during the year ended at December 31,
2014, the spin-off of Kyongnam Bank and Kwangju Bank was completed and the disposals of Woori Investment
& Securities Co., Ltd, Woori Financial, Woori F&I, Woori Asset Management, and Woori Savings Bank were
closed in accordance with the progress of the privatization of Woori Finance Holdings Co., Ltd. Accordingly, the
composition of operating segments has changed, and the Group restated the comparative operating segment
information for the year ended and as of December 31, 2013.
• Consumer banking: Loans/deposits and financial services for consumer, etc.
• Corporate banking: Loans/deposits and export/import, financial services for corporations, etc.
• Investment banking: Domestic/foreign investment, structured finance, M&A, Equity & fund investment
related business, venture advisory related tasks, real estate SOC development practices etc.
• Capital market: Fund management, investment securities and derivatives business, etc.; and
• Headquarter and others: Segments that are not belong to above operating segments
1) The details of assets and liabilities by each segment are as follows (Unit: Korean Won in millions):
Corporate
banking
Assets
96,644,808
Liabilities 47,625,472 145,999,344
Consumer
banking
83,582,893
Investment
banking
6,411,016
136,603
Capital
market
6,076,739
4,957,708
Others
Sub-total
82,415,399 275,130,855
51,283,487 250,002,614
Inter-segment
transaction
(4,973,636) 270,157,219
2,061,180 252,063,794
Total
December 31, 2014
December 31, 2013
- 27 -
Strength in Our ValueS
Deferred liabilities are not recognized if the temporary difference arises from goodwill. Deferred tax assets or
liabilities are not recognized if they arise from the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in
other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized
in other comprehensive income or directly in equity respectively.
(24) Earnings per share (“EPS”)
Basic EPS is calculated by earnings subtracting the dividends paid to holders of preferred stock and hybrid
securities from the net income attributable to ordinary shareholders from the statements of comprehensive
income and dividing by the weighted average number of common shares outstanding. Diluted EPS is calculated
by adjusting the earnings and number of shares for the effects of all dilutive potential common shares.
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
In evaluating the results of the Group and allocating resources, the Group’s Chief Operation Decision Maker (the
“CODM”) utilizes the information per types of customers. This financial information of the segments is
regularly reviewed by the CODM to make decisions about resources to be allocated to each segment and
5. OPERATING SEGMENTS
evaluate its performance.
(1) Segment by types of customers
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. Meanwhile, during the year ended at December 31,
2014, the spin-off of Kyongnam Bank and Kwangju Bank was completed and the disposals of Woori Investment
& Securities Co., Ltd, Woori Financial, Woori F&I, Woori Asset Management, and Woori Savings Bank were
closed in accordance with the progress of the privatization of Woori Finance Holdings Co., Ltd. Accordingly, the
composition of operating segments has changed, and the Group restated the comparative operating segment
information for the year ended and as of December 31, 2013.
134
• Consumer banking: Loans/deposits and financial services for consumer, etc.
• Corporate banking: Loans/deposits and export/import, financial services for corporations, etc.
• Investment banking: Domestic/foreign investment, structured finance, M&A, Equity & fund investment
related business, venture advisory related tasks, real estate SOC development practices etc.
• Capital market: Fund management, investment securities and derivatives business, etc.; and
• Headquarter and others: Segments that are not belong to above operating segments
1) The details of assets and liabilities by each segment are as follows (Unit: Korean Won in millions):
Corporate
banking
96,644,808
Assets
Liabilities 47,625,472 145,999,344
Consumer
banking
83,582,893
Investment
banking
6,411,016
136,603
Capital
market
6,076,739
4,957,708
Others
Sub-total
82,415,399 275,130,855
51,283,487 250,002,614
Inter-segment
transaction
(4,973,636) 270,157,219
2,061,180 252,063,794
Total
December 31, 2014
Corporate
banking
Assets
89,900,968
Liabilities 45,336,744 135,083,652
Consumer
banking
74,305,224
Investment
banking
7,038,975
105,146
Capital
market
10,778,521
10,006,252
- 27 -
Sub-total
Others
95,589,309 277,612,997
48,783,007 239,314,801
Inter-segment
transaction
(21,919,713) 255,693,284
(431,228) 238,883,573
Total (*)
December 31, 2013
(*) The amounts exclude assets and liabilities from the subsidiaries that were reclassified into disposal group held
for sale and disposal groups held for distribution to owners as of December 31, 2013.
- 28 -
Woori Bank Annual Report 2014
135
2) The details of operating income by each segment are as follows (Unit: Korean Won in millions):
For the year ended December 31, 2014
Corporate
Consumer
banking
banking
1,741,700
1,392,354
3,032,488
3,636,838
(1,591,087) (2,191,770)
296,632
453,799
438,879
(14,483)
29,403
(1,759,431) (1,522,783)
(835,051)
(1,700,025)
(49,047)
493,762
724,288
(250,450)
19,924
Investment
banking
1,178
199,629
(23)
(198,428)
65,919
348,363
(282,444)
-
(175,002)
(14,385)
Capital
market
28,884
26,076
(100)
2,908
(8,059)
3,969,660
(3,977,719)
-
(10,273)
(16,437)
Others
835,588
1,987,901
(1,100,248)
(52,065)
348,495
2,951,569
(2,553,747)
(49,327)
(800,128)
(626,874)
Sub-total
3,999,704
8,882,932
(4,883,228)
-
1,353,916
8,432,759
(7,078,843)
-
(4,267,617)
(3,192,772)
Inter-
segment
transaction
493,314
328,308
165,006
-
(941,404)
(284,209)
(657,195)
-
259,795
233,853
Continuing
operation
(*)
4,493,018
9,211,240
(4,718,222)
-
412,512
8,148,550
(7,736,038)
-
(4,007,822)
(2,958,919)
(59,406)
126,685
(15,444)
(687,732)
672,716
(3,309)
(160,617)
(107,905)
39,967
6,164
10,552
(20,562)
(173,254)
383,955
1,585,917
(1,074,845)
1,086,003
1,586,569
25,942
(188,295)
(1,649,882)
(1,048,903)
897,708
(63,313)
111,241
(26,920)
669,407
(153,867)
(67,938)
16,441
(10,010)
2,422
1,969,872
(126,271)
2,672,572
(288,195)
(1,838,177)
-
834,395
(288,195)
84,321
515,540
(51,497)
(7,588)
1,843,601
2,384,377
(1,838,177)
546,200
For the year ended December 31, 2013
Consumer
banking
1,505,372
3,233,552
(1,653,013)
(75,167)
415,665
645,404
(244,085)
14,346
(1,761,891)
(1,643,064)
Corporate
banking
1,947,049
3,832,238
(2,282,674)
397,485
443,767
518,355
(100,033)
25,445
(2,414,374)
(831,660)
Investment
banking
19,654
256,860
(717)
(236,489)
67,883
401,904
(334,021)
-
(156,006)
(17,458)
Capital
market
60,146
82,649
(29,121)
6,618
(7,323)
4,849,598
(4,856,921)
-
(39,556)
(21,744)
Others
670,436
1,925,391
(1,162,508)
(92,447)
527,591
3,522,324
(2,954,942)
(39,791)
(853,418)
(585,650)
Sub-total
4,202,657
9,330,690
(5,128,033)
-
1,447,583
9,937,585
(8,490,002)
-
(5,225,245)
(3,099,576)
Inter-
segment
transaction
289,365
162,693
126,672
-
(575,124)
(100,430)
(474,694)
-
100,331
197,405
Continuing
operation
(*)
4,492,022
9,493,383
(5,001,361)
-
872,459
9,837,155
(8,964,696)
-
(5,124,914)
(2,902,171)
(118,827) (1,582,714)
(23,558)
159,146
(10,787)
(14,340)
(138,548)
(68,469)
38,464
(17,812)
13,267
34,367
(267,768)
344,609
1,662,180
(2,125,669)
424,995
1,709,884
(97,074)
(185,428)
(1,661,784)
(2,222,743)
239,567
48,100
144,806
(35,043)
(34,345)
8,311
(30,005)
7,261
47,634
(11,527)
2,006,789
(485,643)
2,134,879
(516,641)
(1,847,212)
481,545
287,667
(35,096)
109,763
(26,034)
(22,744)
36,107
1,521,146
1,618,238
(1,365,667)
252,571
Net Interest income
Interest income
Interest expense
Inter-segment
Net non-interest income
Non-interest income
Non-interest expense
Inter-segment
Other expense
Administrative expense
Impairment losses on
credit loss and others
Operating income
Non-operating income
Net income before income
tax expense
Income tax expense
Net income from
continuing operations
Net Interest income
Interest income
Interest expense
Inter-segment
Net non-interest income
Non-interest income
Non-interest expense
Inter-segment
Other expense
Administrative expense
Impairment losses on
credit loss and others
Operating income
Non-operating income
Net income before income
tax expense
Income tax expense
Net income from
continuing operations
(*) The amounts exclude income or loss from the subsidiaries that were reclassified into disposal group held for sale
and disposal groups held for distribution to owners for the years ended December 31, 2014 and 2013.
(2)
Information on products and services
The products of the Group are classified as interest-bearing products such as loans, deposits and debt securities
and non-interest bearing products such as loan commitment, credit commitment, equity securities, and credit
card service. This classification of products has been reflected in the segment information presenting interest
income and non-interest income.
- 29 -
Strength in Our ValueS
136
(3)
Information on geographical areas
Of the Group’s revenue (interest income and non-interest income) from services, revenue from the domestic
customers for the years ended December 31, 2014 and 2013 amounted to 16,800,282 million Won and
18,466,386 million Won, respectively, and revenue from the foreign customers amounted to 559,508 million
Won and 864,152 million Won, respectively (including the profit and losses that are reclassified to the
discontinued operations). Of the Group’s non-current assets (investments in joint ventures and associates,
investment properties, premises and equipment and intangible assets), non-current assets attributed to domestic
subsidiaries as of December 31, 2014 and 2013 are 3,591,351 million Won and 3,730,455 million Won,
respectively, and foreign subsidiaries are 211,465 million Won and 33,102 million Won, respectively.
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
Total
December 31, 2014
2,597,984
585,728
2,017,798
761,351
5,962,861
December 31, 2013
2,218,818
511,487
2,083,087
664,257
5,477,649
(2) Significant 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 loss of investment in associates
Changes in other comprehensive income (loss) of overseas
business translation
Changes in other comprehensive income (loss) due to
remeasurement of the net defined benefit liability
Changes in investments in associates due to equity swap
and others
Changes in unpaid dividends of hybrid equity securities
2014
2013
86,537
(2,974)
(33,782)
(6,375)
28,856
(51,999)
(63,426)
6,915
176,661
7,547
20,517
7,372
- 30 -
Woori Bank Annual Report 2014
137
7.
FINANCIAL ASSETS AT FVTPL
.
(1) Financial assets at FVTPL consist of as follows (Unit: Korean Won in millions):
Financial assets held for trading
Financial assets designated at FVTPL
Total
December 31, 2014 December 31, 2013
4,792,305
13,892
4,806,197
4,536,918
17,262
4,554,180
(2) Financial assets held for trading are as follows (Unit: Korean Won in millions):
Deposits:
Deposits indexed to gold prices
13,816
9,299
December 31, 2014 December 31, 2013
Securities:
Debt securities
Korean treasury and government agencies
Financial institutions
Corporates
Equity securities
Beneficiary certificates
CMA securities
Others
Derivatives instruments assets
Sub-total
Total
668,886
927,121
620,312
99,988
48,291
32,300
14,737
2,411,635
2,111,467
4,536,918
574,016
1,019,008
409,272
196,072
166,623
200,500
33,084
2,598,575
2,184,431
4,792,305
(3) Financial assets designated at FVTPL as follows (Unit: Korean Won in millions):
Equity-linked securities
Debt securities
Equity securities
Total
December 31, 2014 December 31, 2013
-
2,676
11,216
13,892
6,066
-
11,196
17,262
- 31 -
Strength in Our ValueS
138
8. AFS FINANCIAL ASSETS
AFS financial assets are as follows (Unit: Korean Won in millions):
Debt securities:
Korean treasury and government agencies
Financial institutions
Corporates
Asset-backed securities
Foreign currency bonds
Sub-total
Equity securities
Beneficiary certificates
Loaned securities
Others
Total
Debt securities:
Korean treasury and government agencies
Financial institutions
Corporates
Asset-backed securities
Foreign currency bonds
Sub-total
Equity securities
Beneficiary certificates
Loaned securities
Others
Total
December 31, 2014
Unrealized
gains
Unrealized
losses
Fair value
32,963
34,471
64,522
-
-
131,956
432,068
20,689
1,982
17,308
604,003
(124)
(357)
-
(13,572)
(66,761)
(80,814)
(126,422)
-
(12)
-
(207,248)
3,171,580
6,731,461
2,827,250
157,741
298,900
13,186,932
1,421,374
3,452,611
686,096
63,832
18,810,845
December 31, 2013
Unrealized
gains
Unrealized
losses
Fair value
6,168
4,376
11,902
6,807
129
29,382
272,288
59,966
313
119
362,068
(15,105)
(1,296)
(4,806)
(25,291)
(752)
(47,250)
(36,327)
(2,339)
(178)
-
(86,094)
2,680,849
6,512,068
2,433,661
273,014
229,587
12,129,179
1,615,475
3,065,280
240,034
35,480
17,085,448
Book value
3,138,741
6,697,347
2,762,728
171,313
365,661
13,135,790
1,115,728
3,431,922
684,126
46,524
18,414,090
Book value
2,689,786
6,508,988
2,426,565
291,498
230,210
12,147,047
1,379,514
3,007,653
239,899
35,361
16,809,474
- 32 -
Woori Bank Annual Report 2014
139
9. HTM FINANCIAL ASSETS
HTM financial assets are as follows (Unit: Korean Won in millions):
Korean treasury and government agencies
Financial institutions
Corporates
Foreign currency bonds
Total
Korean treasury and government agencies
Financial institutions
Corporates
Foreign currency bonds
Total
December 31, 2014
Unrealized
gains
Unrealized
losses
Fair value
82,979
37,400
106,092
-
226,471
(37)
(175)
(2,946)
-
(3,158)
4,211,286
4,426,817
4,573,443
56,215
13,267,761
December 31, 2013
Unrealized
gains
Unrealized
losses
Fair value
58,237
8,013
65,108
-
131,358
(16,900)
(593)
(6,361)
-
(23,854)
4,770,246
2,163,385
5,189,909
22,784
12,146,324
Book value
4,128,344
4,389,592
4,470,297
56,215
13,044,448
Book value
4,728,909
2,155,965
5,131,162
22,784
12,038,820
10. LOANS AND RECEIVABLES
(1) Loans and receivables are as follows (Unit: Korean Won in millions):
Due from banks
Loans
Other receivables
Total
December 31, 2014 December 31, 2013
10,208,117
190,699,210
11,005,046
211,912,373
11,100,572
204,818,820
7,450,743
223,370,135
(2) Due from banks are as follows (Unit: Korean Won in millions):
Due from banks in local currency:
Due from the Bank of Korea
Due from depository banks
Due from non-depository
Due from the Korea Exchange
Others
Allowance for credit losses
Sub-total
Due from banks in foreign currencies:
Due from banks on demand
Due from banks on time
Others
Allowance for credit losses
Sub-total
Total
December 31, 2014 December 31, 2013
9,120,180
1,000
277,337
1,580
182,750
(2,305)
9,580,542
312,022
712,972
497,454
(2,418)
1,520,030
11,100,572
8,304,869
4,127
22,418
880
18,744
(1,978)
8,349,060
920,713
439,595
500,766
(2,017)
1,859,057
10,208,117
- 33 -
Strength in Our ValueS
140
(3) Details of restricted due from banks are as follows (Unit: Korean Won in millions):
Financial institution
Counterparty
December 31,
2014
Reason of restriction
Due from banks in local currency:
Due from the Bank of Korea
Others
The Bank of Korea
NH Investment & Securities
Co., Ltd. and others
Due from banks in foreign currencies:
Due from banks on demand
Others
The Bank of Korea and others
The Central Bank of China
and others
9,120,180 Reverse deposits on BOK Act
Treasury stock trust contracts
182,750
9,302,930
and others
Reverse deposits on BOK Act
296,447
and others
469,974 Reserve deposits and others
766,421
10,069,351
Financial institution
Counterparty
December 31,
2013 (*)
Reason of restriction
Due from banks in local currency:
Due from the Bank of Korea
Due from depository banks
Due from non-depository
Due from the Korea Exchange
Others
The Bank of Korea
Shinhan Bank and others
Mutual savings bank
Korea securities finance
Corporation and others
Shinhan Investment Corp. and
others
9,581,701 Reverse deposits on BOK Act
625,693 Pledged right and others
20,524 Mutual savings bank act
Deposits for futures and options
584,617
transactions and others
18,446 Collateral for derivatives
10,830,981
Due from banks in foreign currencies:
Due from banks on demand
Due from banks on time
Others
The Bank of Korea and others
China Construction Bank
Corporation and others
The Central Bank of China
and others
Reverse deposits on BOK Act
941,284
and others
Required under Chinese
regulatory purpose
7,809
391,026 Reserve deposits and others
1,340,119
12,171,100
(*) The amounts incorporate the restricted due from banks from the subsidiaries that were reclassified into
disposal group held for sale and disposal groups held for distribution to owners.
(4) Loans are as follows (Unit: Korean Won in millions):
Loans in local currency
Loans in foreign currencies
Domestic banker’s letter of credit
Credit card accounts
Bills bought in foreign currencies
Bills bought in local currency
Factoring receivables
Advances for customers on guarantees
Privately placed bonds
Loans to be converted to equity securities
Securitized loans
Call loans
Bonds purchased under resale agreements
Loan origination costs and fees
Others
Present value discount
Allowance for credit losses
Total
December 31, 2014 December 31, 2013
156,027,839
9,996,738
4,958,522
4,209,156
4,234,937
186,159
176,449
54,645
506,669
498
310,748
8,092,405
4,980,889
294,854
30,870
(24,995)
(3,337,173)
190,699,210
167,261,592
11,281,016
5,712,049
5,113,684
5,552,421
258,707
92,205
52,619
346,284
498
295,506
4,174,735
6,891,629
367,898
44,378
(16,913)
(2,609,488)
204,818,820
- 34 -
Woori Bank Annual Report 2014
141
(5) Other receivables are as follows (Unit: Korean Won in millions):
CMA accounts
Receivables
Accrued income
Telex and telephone subscription rights and
refundable deposits
Other debtors
Allowance for credit losses
Total
December 31, 2014
186,000
4,662,557
885,141
December 31, 2013
107,100
8,397,838
892,135
1,075,068
981,672
(339,695)
7,450,743
1,045,064
869,373
(306,464)
11,005,046
(6) Changes in allowance for possible credit losses on loans and receivables are as follows (Unit: Korean Won
in millions):
Beginning balance
Net provision
Recoveries of written-off loans
Charge-off
Sales of loans and receivables
Unwinding effect
Others
Ending balance
Beginning balance
Net provision
Recoveries of written-off loans
Charge-off
Sales of loans and receivables
Unwinding effect
Classified into disposal group
held for sale
Classified into disposal group
held for distribution to owners
Others
Ending balance
Consumers
(295,904)
(150,292)
(7,976)
115,339
5,833
16,666
(10,101)
(326,435)
Consumers
(327,168)
(238,400)
(41,847)
179,911
8,038
21,200
For the year ended December 31, 2014
Others
(453,557)
(15,937)
-
627
5,676
223
92,704
(370,264)
Credit card
(105,613)
(158,603)
(27,920)
162,691
-
336
(8)
(129,117)
Corporates
(2,792,558)
(791,339)
(66,627)
1,173,434
140,174
137,951
70,875
(2,128,090)
For the year ended December 31, 2013
Others
(432,778)
(68,288)
891
2,034
147
499
Credit card
(127,771)
(137,174)
(25,836)
172,257
14
530
Corporates
(2,983,860)
(2,178,951)
(168,799)
1,625,220
152,792
140,863
Total
(3,647,632)
(1,116,171)
(102,523)
1,452,091
151,683
155,176
153,470
(2,953,906)
Total
(3,871,577)
(2,622,813)
(235,591)
1,979,422
160,991
163,092
74,896
92,503
-
40,178
207,577
10,531
16,935
(295,904)
467,581
60,093
(2,792,558)
12,071
296
(105,613)
7,686
(3,926)
(453,557)
497,869
73,398
(3,647,632)
- 35 -
Strength in Our ValueS
142
11. THE FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
(1) The fair value hierarchy
The fair value hierarchy is determined by the levels of judgment involved in estimating fair values of financial
assets and liabilities. The specific financial instruments characteristics and market condition such as volume of
transactions and transparency are reflected to the market observable inputs. The fair value hierarchy gives the
highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities. The Group
maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value
of its financial assets and financial liabilities. Fair value is measured based on the perspective of a market
participant. As such, even when market assumptions are not readily available, the Group’s own assumptions
reflect those that market participants would use for measuring the assets or liabilities at the measurement date.
The fair value measurement is described in the one of the following three levels used to classify fair value
measurements:
•
Level 1—fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities. The types of financial assets or liabilities generally included in Level 1 are
publicly traded equity securities and derivatives.
•
•
Level 2— fair value measurements are those derived from inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived
from prices). The types of financial assets or liabilities generally included in Level 2 are debt securities
not traded in active markets and derivatives traded in OTC but not required significant judgment.
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). The types of
financial assets or liabilities generally included in Level 3 are non-public securities and derivatives and
debt securities of which valuation techniques require significant judgments and subjectivity.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the
level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value
measurement. The Group’s assessment of the significance of a particular input to a fair value measurement in its
entirety requires judgment and consideration of factors specific to the asset or liability.
- 36 -
Woori Bank Annual Report 2014
143
(2) Fair value hierarchy of financial assets and liabilities measured at fair value are as follows (Unit: Korean
Won in millions):
December 31, 2014
Fair value in
active market
(Level 1) (*1)
Observable
market data
(Level 2) (*1)
Other valuation
technique
(Level 3) (*2)
Financial assets:
Financial assets held for trading
Deposits
Debt securities
Equity securities
Beneficiary certificates
CMA securities
Loaned securities
Derivatives instruments assets
Sub-total
Financial assets designed at FVTPL
Equity-linked securities
Equity securities
Sub-total
AFS financial assets
Debt securities
Equity securities
Beneficiary certificates
Loaned securities
Others
Derivative assets
Sub-total
Total
Financial liabilities:
Financial liabilities held for trading
Deposits
Derivative liabilities
Sub-total
Financial liabilities designated at FVTPL
Equity-linked securities
Debentures
Sub-total
Total
13,816
587,593
99,988
-
-
14,737
56
716,190
-
629
629
2,731,782
389,456
-
475,748
-
3,596,986
-
4,313,805
13,927
5,819
19,746
-
-
-
19,746
-
1,628,726
-
48,291
32,300
-
2,062,137
3,771,454
-
-
-
10,455,150
-
3,096,917
210,348
49,591
13,812,006
184,115
17,767,575
-
2,092,325
2,092,325
315
159,264
159,579
2,251,904
-
-
-
-
-
-
49,274
49,274
6,066
10,567
16,633
-
1,031,918
355,694
-
14,241
1,401,853
11,946
1,479,706
-
41,711
41,711
361,993
-
361,993
403,704
Total
13,816
2,216,319
99,988
48,291
32,300
14,737
2,111,467
4,536,918
6,066
11,196
17,262
13,186,932
1,421,374
3,452,611
686,096
63,832
18,810,845
196,061
23,561,086
13,927
2,139,855
2,153,782
362,308
159,264
521,572
2,675,354
- 37 -
Strength in Our ValueS
144
December 31, 2013
Fair value
in active
market
(Level 1)
(*1)
Observable
market data
(Level 2)
(*1)
Other
valuation
technique
(Level 3)
(*2)
Total
Classified
into
disposal
group held
for sale
Classified into
disposal group
held for
distribution to
owners
9,299
1,590,218
798,102
1,259,784
-
2,084,811
8,156
5,750,370
783,806
12,852,552
92,559
64,909
200,500
3,086,527
2,452,686
19,533,539
-
793,105
- 14,442,770
890,661
-
1,324,693
-
200,500
-
5,177,523
6,185
307,782
2,768,624
313,967 25,597,876
783,806
12,207,889
684,525
1,148,471
-
5,144,439
545,330
20,514,460
-
-
-
637
-
637
149,185
332,404
-
-
61,696
543,285
408,120
-
2,676
10,579
-
421,375
557,305
332,404
2,676
11,216
61,696
965,297
525,855
-
-
-
61,696
587,551
-
232,585
10,064
9,599
-
-
38,863
291,111
31,450
332,404
-
-
-
363,854
Total
9,299
2,002,296
196,072
166,623
200,500
33,084
2,184,431
4,792,305
-
-
2,676
11,216
-
13,892
3,184,651
481,878
-
240,034
69,946
3,976,509
12,094,876
33,644
2,742,061
-
80,667
14,951,248
1,843,889
562,941
-
102,914
9,050 15,288,577
2,359,411
3,305,002
240,034
253,527
2,518,794 21,446,551
508,237
441,039
56,040
-
97,830
1,103,146
2,651,161
302,897
183,682
-
120,217
3,257,957
12,129,179
1,615,475
3,065,280
240,034
35,480
17,085,448
-
9,727,516
128,081
35,156,153
14,608
142,689
3,268,744 48,152,413
11,279
22,216,436
-
3,912,922
131,410
22,023,055
9,254
1,115,987
5,576
1,130,817
-
-
2,514,838
2,514,838
-
-
253,419
253,419
9,254
1,115,987
2,773,833
3,899,074
-
1,115,987
645,824
1,761,811
-
-
31,962
31,962
9,254
-
2,096,047
2,105,301
-
-
-
2,897,882
183,159
3,081,041
5,587,261
-
5,587,261
8,485,143
183,159
8,668,302
8,266,355
-
8,266,355
-
-
-
218,788
183,159
401,947
Financial assets:
Financial assets held for trading
Deposits
Debt securities
Equity securities
Beneficiary certificates
CMA securities
Loaned securities
Derivatives instruments assets
Sub-total
Financial assets designed at FVTPL
Equity-linked securities
Asset-backed securities
Debt securities
Equity securities
Beneficiary certificates
Sub-total
AFS financial assets
Debt securities
Equity securities
Beneficiary certificates
Loaned securities
Others
Sub-total
Derivative assets
Total
Financial liabilities:
Financial liabilities held for trading
Deposits
Borrowings
Derivative liabilities
Sub-total
Financial liabilities designated at FVTPL
Equity-linked securities
Debentures
Sub-total
Derivatives Liabilities
Total
-
1,130,817
19,962
5,615,841
-
19,962
5,840,680 12,587,338
2,257
10,030,423
15,920
47,882
1,785
2,509,033
(*1) There is no transferred between level 1 and level 2 of financial assets and liabilities measured at fair value. The Group
recognizes transfers between the levels at the end of reporting period within which events or conditions change.
(*2) Certain AFS unquoted equity securities were measured at cost as of December 31, 2014 and 2013, that are amounting to 41,022
million Won and 197,350 million Won, respectively. These unquoted equity instruments mostly represent minority investments
in special purposed entity vehicles such as asset securitization structures. They are measured at cost because (a) observable
inputs of financial information to measure fair value was not available to obtain, or (b) there is a significant variance in likely
estimated cash flows or (c) the probabilities for the various estimated cash flows could not be measured reliably. In addition,
there were no indicators of impairments in these investments and the Group has no intention to dispose these investments in the
foreseeable future.
Financial assets and liabilities designated at FVTPL, held-for-trading financial assets and liabilities, AFS
financial assets, 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.
- 38 -
Woori Bank Annual Report 2014
145
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 determines the fair value using alternative assumptions and
developing fair value measurement methods. Alternative assumptions and fair value measurement methods for
each type of financial instruments are as follows:
Debt securities
Equity securities
Derivatives Product
Alternative assumptions
Risk-free market rate, credit spread
Risk-free market rate, Market Risk
Premium, Beta
Risk-free market rate, Forward Rate,
Volatility, Foreign Exchange Rate,
Stock Prices, etc.
Fair value measurement methods
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, more than one method is 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.
Financial Instruments
The fair value of security linked to stock prices or
linked to stock prices or
derivatives
derivatives is measured by the models such as DCF
model, FDM, or Monte Carlo Simulation given the
natures of the securities or underlying assets.
Debenture
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.
Values of underlying assets, Risk-free
market rate, Market rate, Dividend
and convenience yield, Correlation,
Volatility, Credit spread, and
Foreign Exchange rate
Risk-free market rate, Forward rate
Valuation methods of financial assets and liabilities measured at fair value and classified into Level 3 and
significant but unobservable inputs are as follows:
Measurement methods
Inputs
Derivatives assets
Option pricing model and others
Derivatives liabilities
Option pricing model and others
Equity-linked securities and
derivative-linked securities
Equity Securities
Monte Carlo Simulation and others
External valuation price and others
Correlation Coefficient
Historical Volatility
Credit risk-adjusted rate
Correlation Coefficient
Historical Volatility
Correlation Coefficient
Historical Volatility
Expected growth rate and others
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 is measured by the Group using its own
valuation techniques or using external specialists. Unobservable inputs used in the fair value measurements are
produced by the internal system of the Group and the appropriateness of inputs is reviewed regularly.
- 39 -
Strength in Our ValueS
146
(3) Changes in financial assets and liabilities classified into level 3 are as follows (Unit: Korean Won in
millions):
January 1,
2014
Net
Income
(loss) (*1)
Other
comprehensive
income (loss)
Purchases/
Issuances
Disposals/
Settlements
Transfer to or
from level 3
(*5)
Decrease due
to the spin-off
or disposals
December
31, 2014
For the year ended December 31, 2014
Financial assets:
Financial assets held for
trading
Derivatives instruments
assets
Others
Sub-total
Financial assets designed at
FVTPL
Equity-linked securities
Debt securities
Equity securities
Sub-total
AFS financial assets
Debt securities(*2)
Equity securities (*3)
Beneficiary certificates (*2)
Others (*2)
Sub-total
307,782
6,185
313,967
41,776
(724)
41,052
408,120
2,676
10,579
421,375
(337)
26
(12)
(323)
-
-
-
-
-
-
-
9,050
1,843,889
562,941
102,914
2,518,794
(6,048)
(137,631)
16,033
(2,439)
(130,085)
-
6,063
3,164
(1,134)
8,093
1,244
-
1,244
(108,345)
(4,433)
(112,778)
324,205
-
-
324,205
-
106,654
41,214
12,898
160,766
(82,468)
(2,702)
-
(85,170)
-
(114,450)
(66,126)
-
(180,576)
-
-
-
-
-
-
-
(193,183)
(1,028)
(194,211)
49,274
-
49,274
(643,454)
-
-
(643,454)
6,066
-
10,567
16,633
1,825
(551)
(1,935)
(70,000)
(70,661)
(4,827)
-
(672,056) 1,031,918
355,694
(199,597)
14,241
(27,998)
(904,478) 1,401,853
Derivative assets
Total
14,608
3,268,744
3,497
(85,859)
-
8,093
-
486,215
(6,159)
(384,683)
-
(70,661)
11,946
(1,742,143) 1,479,706
-
Financial liabilities:
Financial liabilities held for
trading
Derivative liabilities
Financial liabilities designated
at FVTPL
Equity-linked securities (*4)
Total
253,419
6,783
4,050
4,596
(43,250)
-
(183,887)
41,711
5,587,261
5,840,680
19,031
25,814
-
4,050
2,205,033
2,209,629
(815,356)
(858,606)
(88,044)
(88,044)
(6,545,932)
(6,729,819)
361,993
403,704
- 40 -
Woori Bank Annual Report 2014
147
Transfer to or
from level 3
(*5)
December 31,
2013
(*7)
January 1,
2013
Net
Income
(loss) (*1)
For the year ended December 31, 2013
Other
comprehensive
income (loss)
Disposals/
Settlements
Purchases/
Issuances
Financial assets:
Financial assets held for trading
Derivatives instruments assets
(*6)
Others
Sub-total
Financial assets designed at
FVTPL
Equity-linked securities
Asset-backed securities
Debt securities
Equity securities
Sub-total
AFS financial assets
Debt securities
Equity securities (*3)
Beneficiary certificates (*2)
Others (*2)
Sub-total
301,017
-
301,017
127,807
(2,241)
125,566
593,129
46,990
5,305
11,121
656,545
43,372
-
73
840
44,285
13,733
1,916,779
386,581
130,245
2,447,338
(7,710)
(70,057)
(17,115)
(4,821)
(99,703)
Derivative assets (*6)
Total
-
3,404,900
-
70,148
Financial liabilities:
Financial liabilities held for
trading
Derivative liabilities (*6)
Financial liabilities designated
at FVTPL
Equity-linked securities
Total
159,248
97,570
4,797,434
4,956,682
227,218
324,788
-
-
-
-
-
-
-
-
3,027
(17,104)
18,113
1,577
5,613
-
5,613
-
-
-
31,213
-
31,213
(172,361)
(11,940)
(184,301)
20,106
20,366
40,472
285,796
-
-
1,912
287,708
-
253,824
115,498
4,666
373,988
-
692,909
(514,177)
(46,990)
(2,702)
(3,294)
(567,163)
-
-
-
-
-
-
(131,815)
(54,531)
(3,253)
(189,599)
-
(107,738)
114,395
(25,500)
(18,843)
-
(941,063)
14,608
36,237
307,782
6,185
313,967
408,120
-
2,676
10,579
421,375
9,050
1,843,889
562,941
102,914
2,518,794
14,608
3,268,744
33,807
(41,859)
4,653
253,419
4,758,507
4,792,314
(4,195,898)
(4,237,757)
-
4,653
5,587,261
5,840,680
(*1) The loss amounting to 172,484 million Won and 117,855 million Won for the year ended December 31 2014 and 2013,
respectively, which is from financial assets and liabilities that the Group holds as at the end of the year, has been
recognized in net gain (loss) on financial instruments at FVTPL and net gain (loss) on AFS financial assets in the
comprehensive income statements.
(*2) AFS financial assets were transferred from level 2 into level 3 or vice versa upon the changes in the degree of subjectivity
and uncertainty used to measure fair values, such as using quoted price in inactive market or values from external valuation
specialists, for the AFS financial assets.
(*3) AFS financial assets were transferred out of level 3 to level 1 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) Since the observable market data for equity-linked securities has been available, such securities were transferred out of
level 3 to level 2.
(*5) The Group recognizes transfers between levels at the end of reporting period within which events have occurred or
conditions have changed.
(*6) As the variables used for the valuation of interest rate and equity related derivatives were not observable in the market,
such derivatives were transferred into level 3 from level 2. In the case of currency related derivatives, the variables which
were unobservable in the market significantly impacted the valuation of such derivatives. As such, the derivatives were
transferred into level 3 from level 2.
(*7) As at the end of 2013, financial assets and liabilities, amounting to 1,662,501 million Won and 5,600,440 million Won,
respectively, that had been reclassified into disposal group held for sale and disposal groups held for distribution to owners,
were incorporated.
- 41 -
Strength in Our ValueS
148
(4) Sensitivity analysis on the unobservable inputs used for measuring level 3 financial instruments.
The sensitivity analysis of the financial instruments has been performed by classifying with favorable and
unfavorable changes based on how changes in unobservable assumptions would 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
resulted from varying the assumptions individually. The sensitivity analysis was performed for two types of level
3 financial instruments: (1) interest rate related derivatives, currency related derivatives, equity related
derivatives, and equity-linked securities of which fair value changes are recognized as net income; (2) equity
securities and beneficiary certificates of which fair value changes are recognized as other comprehensive income.
Equity securities classified as level 3 but measured at costs 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 the years ended December 31, 2014 and 2013.
(Unit: Korean Won in millions):
For the year ended December 31, 2014
Net income
(loss)
Other comprehensive
income (loss)
Favorable Unfavorable
For the year ended December 31, 2013
Net income
(loss)
income (loss)
Other comprehensive
Favorable Unfavorable Favorable Unfavorable
Favorable
Unfavorable
Financial assets:
Financial assets held for
trading
Derivatives instruments
assets (*1)(*2)
14,093
(6,471)
Financial assets designed
at FVTPL
Equity-linked securities
(*1)
AFS Financial Assets
Equity securities (*3)
Beneficiary certificates
(*4)
Others (*4)
Total
Financial liabilities:
Financial liabilities held
for trading
Derivative liabilities
(*1)(*2)
Financial liabilities
designated at FVTPL
Equity-linked securities
(*1)
Total
-
-
-
-
33,867
(45,614)
1,672
(321)
-
-
-
-
80,085
(39,055)
-
-
150,607
(60,481)
-
-
-
-
-
-
14,093
-
-
(6,471)
3,430
6,823
90,338
(3,243)
(2,858)
(45,156)
-
-
35,539
-
-
(45,935)
5,851
1,296
157,754
(5,642)
(647)
(66,770)
7,939
(7,222)
1,497
9,436
(1,483)
(9,205)
-
-
-
-
-
-
32,097
(36,434)
55,764
87,861
(34,133)
(70,567)
-
-
-
-
-
-
(*1) Fair value changes of equity related derivatives assets and liabilities and equity-linked securities are calculated by
increasing or decreasing historical fluctuation rate of stock price and correlation, which are major unobservable variables,
by 10%, respectively. In the case of interest rate and currency related derivative assets and liabilities, fair value changes are
calculated by increasing or decreasing volatility of interest rate and credit risk adjustment ratio, which are major
unobservable variables, by 10%, respectively.
(*2) Both derivative assets and liabilities for held for trading and hedging are included.
(*3) 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.
(*4) Fair value changes of beneficiary certificates and other securities are calculated by increasing or decreasing price
fluctuation of trust property or real estate which is underlying assets and discount rate by 1%. The price fluctuation of trust
property and discount rate are major unobservable variables.
- 42 -
Woori Bank Annual Report 2014
149
(5) Fair value and carrying amount of financial assets and liabilities that are recorded at amortized cost are as
follows (Unit: Korean Won in millions):
As of December 31, 2014
Fair value
Level 1
Level 2
Level 3
Total
Book
value
Financial assets:
Held-to-maturity financial assets 1,902,558
Loans and receivables
-
11,365,202
-
-
225,284,372
13,267,760
225,284,372
13,044,448
223,370,135
Financial liabilities:
Deposits due to customers
Borrowings
Debentures
Other financial liabilities
-
-
-
-
188,673,796
17,772,085
24,976,056
16,889,129
Fair value
-
-
-
-
188,673,796
17,772,085
24,976,056
16,889,129
188,516,465
17,707,595
24,795,904
16,889,687
As of December 31, 2013
Classified
into asset
group held
for sale
Book value
Classified into
asset group held
for distribution to
owners
Book value
Level 1
Level 2
Level 3
Total
Financial assets:
Held-to-maturity
financial assets
Loans and receivables
Financial liabilities:
4,276,844 12,069,195
-
-
16,346,039
266,158,950 266,158,950
-
3,025
11,738,411
4,124,084
41,057,781
12,038,820
211,912,373
Deposits due to customers
Borrowings
Debentures
Other financial liabilities
- 200,398,709
- 34,599,697
- 26,813,454
- 22,516,475
14,213,925 214,612,634
36,416,198
1,816,501
29,144,844
2,331,390
24,233,751
1,717,276
1,988,495
13,502,487
4,045,486
2,308,489
36,603,292
4,860,597
2,515,965
1,859,151
175,323,644
18,231,511
21,677,674
19,914,947
The fair values of financial instruments are measured using quoted market price in active markets. In case there
is no active market for financial instruments, the Group determines the fair value using alternative assumptions
through developing fair value measurement methods. Alternative assumptions and fair value measurement
methods for financial assets and liabilities that are measured at amortized costs are given as follows:
Debt securities
The fair value is measured by
Fair value measurement methods
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
Alternative assumptions
Risk-free market rate,
Credit spread
Loans and receivables
The fair value is measured by
Risk-free market rate,
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.
Deposit due to customers,
The fair value is measured by
Borrowings, and
Debentures
discounting the projected cash flows
of debt products by applying the
market discount rate that is reflecting
credit rating of the Group.
Credit spread,
Prepayment-rate
Risk-free market rate,
Forward rate
- 43 -
Strength in Our ValueS
150
12. DERECOGNITION AND OFFSET OF FINANCIAL INSTRUMENTS
(1) Derecognition of financial assets
1) 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 given as below:
Type of continuous
involvement
December 31, 2014
Book value of
continuous
participation
Fair value of
continuous
participation
Maximum
exposure to loss
Conditional disposal of loans
to KAMCO (*)
Post settlement
-
-
709
KAMCO tenth Asset
Securitization Specialty
(“KAMCO specialty”)
Conditional disposal of loans
Type of continuous
involvement
Acquisition of
subordinated bonds
December 31, 2013
Book value of
continuous
participation
Fair value of
continuous
participation
Maximum
exposure to loss
1,746
1,851
1,746
to KAMCO (*)
Post settlement
-
-
709
(*) KAMCO is still in the process of collecting cash flows related to the transferred assets and the maximum
exposure to loss represents the carrying amounts of the assets at the date when they were transferred to
KAMCO. Under previous K-GAAP, the Group derecognized the transferred assets although the Group retains
and continues to retain substantially all such risks and rewards and according to the transition exemptions in
IFRS 1101, the Group did not reassess the derecognition criteria for these transfers.
2) Transferred financial assets that are not derecognized in their entirety
a) Disposal of securities under repurchase agreement
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:
Property for transfer
Related liabilities
Financial assets at FVTPL
AFS financial assets
HTM financial assets
Total
Disposal of securities under
repurchase agreements
December 31,
2014
December 31,
2013
9,851
926,796
650,937
1,587,584
-
126,589
651,582
778,171
1,196,237
513,442
- 44 -
Woori Bank Annual Report 2014
151
b) Loaned securities
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
Korean treasury and
December 31,
2014
December 31,
2013
14,737
33,084
assets
government agencies bonds
Total
686,096
700,833
240,034
273,118
Loaned to
Samsung Securities Co.,
Ltd. and others
Korea Securities
Depository and others
The details of the transferred financial assets that are not derecognized in their entirety, such as disposal of
securities under repurchase agreement or loaned securities, are explained in Note 18.
(2) The offset with financial assets and liabilities
The Group possesses both the uncollected domestic exchange receivables and unpaid domestic exchange
payable, which satisfy offsetting criteria of K-IFRS 1032. Therefore, the total number of uncollected
domestic exchange receivables or unpaid domestic exchange payable has been countervailed with part of
unpaid domestic exchange payable or uncollected domestic exchange receivables, respectively, and has been
disclosed in loans and receivables or other financial liabilities of the Group’s statements of financial position
and loans and receivables, respectively.
The Group possesses the derivative assets, derivative liabilities, receivable spot exchange, and payable spot
exchange which do not satisfy the offsetting criteria of K-IFRS 1032, but provide the Group the right of,
under the circumstances of the trading party’s defaults, insolvency, or bankruptcy, the offsetting. Item such
as cash collateral cannot satisfy the offsetting criteria of K-IFRS 1032, but in accordance with the collateral
arrangements and under the circumstances of the trading party’s default, insolvency, or bankruptcy, the
derivative assets, derivative liabilities, receivable spot exchange, and the net amount of payable spot
exchange can be offset.
The Group has entered into a sale and repurchase agreements and accounted it as collateralized borrowing.
Also, the Group has entered into a purchase and resale agreement and accounted it as secured loans. The
repurchase and resale agreement can have the offsetting right only under the trading party’s default,
insolvency, or bankruptcy which do not satisfy the offsetting criteria of K-IFRS 1032, the Group recorded the
collateralized borrowings in borrowings and the secured loans in loans and receivables.
- 45 -
Strength in Our ValueS
152
As at the end of reporting periods, the financial instruments to be set off and may be covered by master
netting agreements and similar agreements are given as below:
Financial assets:
Derivative assets and others (*1)
Receivable spot exchange (*2)
Bonds purchased under resale
agreements (*2)
Domestic exchanges receivable
(*2)(*5)
Total
December 31, 2014
Gross
amounts of
recognized
financial
liabilities set
off
Net
amounts of
financial
assets
presented
Related amounts not set off
in the statement of financial
position
Financial
instruments
Cash
collateral
received
Net
amounts
16,228
-
2,300,067
3,619,768
5,413,119
37,142
469,574
-
6,891,629
6,891,629
-
-
Gross
amounts of
recognized
financial
assets
2,316,295
3,619,768
6,891,629
28,094,142
40,921,834
27,310,235
27,326,463
783,907
13,595,371
-
12,304,748
-
783,907
37,142 1,253,481
December 31, 2014
Gross
amounts of
recognized
financial
liabilities
Gross
amounts of
recognized
financial
assets set off
Net
amounts of
financial
liabilities
presented
Related amounts not set off
in the statement of financial
position
Financial
instruments
Cash
collateral
pledged
Net
amounts
Financial liabilities:
Derivative liabilities and others (*1)
Payable spot exchange (*3)
Bonds sold under repurchase
agreements (*4)
Domestic exchanges payable
2,478,924
3,616,169
1,196,237
16,228
-
2,462,696
3,616,169
5,396,870
41,229
640,766
-
1,196,237
1,196,237
-
-
(*3)(*5)
Total
30,636,705
37,928,035
27,310,235
27,326,463
3,326,470
10,601,572
3,147,053
9,740,160
-
41,229
179,417
820,183
Financial assets:
Derivative assets and others (*1)
Receivable spot exchange (*2)
Bonds purchased under resale
agreements (*2)
Domestic exchanges receivable
(*2)(*5)
Total
Gross
amounts of
recognized
financial
assets
2,259,165
7,179,446
4,980,889
Gross
amounts of
recognized
financial
liabilities set
off
-
-
-
December 31, 2013
Related amounts not set off
in the statement of financial
position
Financial
instruments
Cash
collateral
received
Net
amounts
8,998,345
121,042
319,224
Net amounts
of financial
assets
presented
2,259,165
7,179,446
4,980,889
4,980,889
-
-
23,808,051
38,227,551
23,222,175
23,222,175
585,876
15,005,376
-
13,979,234
-
121,042
585,876
905,100
December 31, 2013
Gross
amounts of
recognized
financial
liabilities
Gross
amounts of
recognized
financial
assets set off
Net amounts
of financial
liabilities
presented
Related amounts not set off
in the statement of financial
position
Financial
instruments
Cash
collateral
pledged
Net
amounts
Financial liabilities:
Derivative liabilities and others (*1)
Payable spot exchange (*3)
Bonds sold under repurchase
agreements (*4)
2,300,467
7,180,609
513,442
-
-
-
2,300,467
7,180,609
9,008,372
513,442
513,442
Domestic exchanges payable
(*3)(*5)
Total
25,992,000
35,986,518
23,222,175
23,222,175
2,769,825
12,764,343
2,746,298
12,268,112
-
-
-
-
472,704
-
23,527
496,231
- 46 -
Woori Bank Annual Report 2014
153
(*1) Includes derivatives held for trading, derivatives for hedging and equity linked securities related to derivatives
(*2) Are included in loans and receivables
(*3) Are included in other financial liabilities
(*4) Are included in borrowings
(*5) A portion of total financial assets and liabilities is presented at its net amount
13.
INVESTMENTS IN JOINT VENTURES AND ASSOCIATES
(1)
Investments in joint ventures and associates accounted for using the equity method of accounting are as
follows (Unit: Korean Won in millions):
Main business
Percentage of ownership (%)
December 31, 2014 December 31, 2013
Life insurance
-
51.6
Subsidiaries
Woori Finance Holdings: (*2)
Woori Aviva Life Insurance Co., Ltd. (*1)
Woori Bank, Kyongnam Bank, Kwangju Bank,
Woori Financial, Woori Investment & Securities
and Woori Private Equity Fund:
Woori Blackstone Korea
Opportunity Private Equity Fund I (*3)
Woori Bank, Kyongnam Bank and Kwangju Bank:
Korea Credit Bureau Co., Ltd. (*3)(*4)
Woori Bank, Woori Investment & Securities:
DKT (*1)
Woori Bank and Woori F&I :
KAMCO Fifth Asset Securitization
Specialty (*1)
Woori Bank and Woori Private Equity Fund:
Finance
Credit information
Manufacturing
Asset securitization
Phoenix Digital Tech Co., Ltd.
Semiconductor equipment
Woori Bank:
Korea Finance Security Co., Ltd. (*5)
Woori Service Networks Co., Ltd. (*5)
Kumho Tire Co., Inc. (*7)(*8)
United PF 1st Corporate Financial Stability
(*4)
Chin Hung International Inc. (*8)
Poonglim Industrial Co., Ltd.(*12)
Ansang Tech Co., Ltd. (*9)
Hana Construction Co., Ltd. (*9)
STX Engine Co., Ltd.(*7)
SamHo Co., Ltd. (*7)(*8)
Force TEC Co., Ltd. (*9)
Osung LST Co., Ltd. (*7)
STX Corporation (*7)
Woori Investment & Securities:
Woori New Alpha Fund (*1)
Woori F&I:
Woori SB Eleventh Asset Securitization
Specialty (*1)
Woori SB Twelfth Asset Securitization
Specialty (*1)
Woori BC Pegasus Asset Securitization
Specialty(*1)
Woori Stream Fourth Asset Securitization
Specialty (*1)
Woori EA First Asset Securitization
Specialty (*1)
Woori EA Second Asset Securitization
Specialty (*1)
Woori EA Sixth Asset Securitization
Specialty (*1)
Woori EA Seventh Asset Securitization
Specialty (*1)
Woori EA Ninth Asset Securitization
Specialty (*1)
Security service
Freight & staffing services
Manufacturing
Finance
Construction
〃
Manufacturing
Construction
Manufacturing
Construction
Freight & staffing services
Manufacturing
Wholesale of Non-
Specialized Goods
Investments
Asset securitization
〃
〃
〃
〃
〃
〃
〃
〃
- 47 -
26.4
7.2
-
-
44.8
15.3
4.9
14.2
17.7
26.8
30.7
23.0
22.2
15.0
7.8
34.4
11.1
15.0
-
-
-
-
-
-
-
-
-
-
44.6
9.0
28.2
49.0
63.1
15.3
4.9
12.5
17.7
26.8
29.9
23.0
22.2
15.0
7.8
22.6
-
-
70.0
45.0
40.0
30.0
40.0
40.0
40.0
40.0
45.0
40.0
Strength in Our ValueS
154
Subsidiaries
Main business
Percentage of ownership (%)
December 31, 2014 December 31, 2013
Woori EA Eleventh Asset Securitization
Specialty (*1)
Woori EA Sixteenth Asset Securitization
Specialty (*1)
Woori EA Seventeenth Asset Securitization
Specialty (*1)
WR Loan Inc.(*1)
KAMCO Sixth Asset Securitization
Specialty (*1)
KAMCO Seventh Asset Securitization
Specialty (*1)
Woori Fine First Asset Securitization
Specialty (*1)
Woori Fine Second Asset Securitization
Specialty (*1)
Woori Fine Third Asset Securitization
Specialty (*1)
Woori Fine Fourth Asset Securitization
Specialty (*1)
Woori HB Third Asset Securitization
Specialty (*1)
Woori EA Nineteenth Asset Securitization
Specialty (*1)
Woori KA First Asset Securitization
Specialty (*1)
Chungdo Woori Century Security Co., Ltd.
Asset securitization
〃
〃
Other financial business
Asset securitization
〃
〃
〃
〃
〃
〃
〃
〃
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(*1)
Woori Private Equity Fund:
Other financial business
Woori Renaissance Holdings (*10)
Other financial business
Woori Private Equity
Woori Columbus First PEF(*11)
Other financial business
MARS Second:
Seoul Lakeside Co., Ltd. (*1)
Hotel
51.6
1.9
-
45.0
30.0
45.0
49.0
45.0
45.0
45.0
45.0
45.0
45.0
40.0
40.0
45.0
49.5
51.6
2.0
47.5
(*1) During the year ended at December 31, 2014, Woori Aviva Life Insurance Co., Ltd., Kyongnam Bank, Kwangju
Bank, Woori Investment & Securities, and Woori F&I have been deconsolidated through spin-off or disposals. As
such the investments in joint ventures and associates that the deconsolidated subsidiaries were previously holding
are excluded from the above list at the end of 2014.
(*2) During the year ended December 31, 2014, Woori Finance Holdings was merged into the Bank.
(*3) During the year ended December 31, 2014, Kyongnam Bank, Kwangju Bank, Woori Financial, and Woori have
been deconsolidated through spin-off or disposals. Accordingly, the joint ownership of the Group in the entity has
decreased.
(*4) The Group can participate in decision making body and exercise significant influence over Korea Credit Bureau
Co., Ltd. and the United PF 1st Corporate Financial Stability through business partnerships.
(*5) The significant business of Woori Service Network and Korea Finance Security is transacted mostly with the
Group.
(*6) The significant transactions and events between the end of reporting date of the investees and the investors have
been properly addressed.
(*7) The Group can exercise significant influence through its position in the creditors' council.
(*8) The investment in associates that have quoted market prices are Kumho Tire (Current year: KRW 9,670, Previous
year: KRW 11,500), Chin Hung International (Current year: KRW 1,665, Previous year: KRW 1,610), and
Samho Co., Ltd. (Current year: KRW 13,150, Previous year: 3,300).
(*9) The carrying amounts of investments in Ansang Tech Co.,Ltd. , Hana Construction Co., Ltd. and Force TEC Co.,
Ltd. are nil as of December 31, 2014 and 2013, respectively.
(*10) The Group owns over 50% ownership of Woori Renaissance Holdings. However, it is applying the equity method
of accounting as the ownership and related contracts meet the definition of joint arrangement under K-IFRS 1111
Joint Arrangements.
(*11) As a general partner of Woori Columbus First PEF, the Group has significant influence over the entity’s
operational and financial policy making process, including participating in dividend or other distribution. As such,
the Group is applying the equity method of accounting.
(*12) Poonglim Industrial Co., Ltd. acquired its treasury stocks during the year ended December 31, 2014, and as such,
the ownership of the Group in the company increased.
- 48 -
Woori Bank Annual Report 2014
155
(2) Changes in the carrying value of investments in joint ventures and associates accounted for using the equity
method of accounting are as follows (Unit: Korean Won in millions):
Acquisition
cost
January 1,
2014
Share of
profits
(losses)
Acquisi-
tion
Disposal
and others
Dividends
Change in
Capital
Impairment
Other
changes
December 31,
2014
For the year ended December 31, 2014
Woori Blackstone
Korea Opportunity
First
Korea Credit Bureau
DKT
KAMCO Fifth Asset
Securitization
Specialty
Phoenix Digital Tech
Co., Ltd.
Korea Finance Security
Co., Ltd.
Woori Service Networks
Co., Ltd.
Kumho Tire Co., Inc.
United PF 1st Corporate
83,011
2,215
50,000
93,714
3,347
20,170
11,969
31
(595)
8,736
3,827
521
1,872
3,688
(3,008)
3,337
4,311
16
-
-
-
-
-
-
(1,727)
-
(19,575)
(4,348)
921
-
108
93,003
136
140,101
6
21,219
-
113,935
-
(50,007)
financial stability
191,617
203,730
(312)
Chin Hung International
Inc.
60,275
45,900
(17,158)
13,917
47,008
7,492
34
-
-
3,079
47,008
7,492
34
-
-
(3,079)
(44,422)
2,284
-
(3,806)
918
-
-
-
-
-
-
15,405
47,323
-
-
-
-
-
-
-
(4,642)
(3,520)
-
-
-
-
(55)
(12)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,013)
(588)
-
-
497
-
(251)
-
(294)
5
-
(4)
(881)
41
-
-
-
-
-
-
-
-
-
-
-
(28,370)
-
(6,441)
-
-
-
-
-
-
-
(916)
-
-
-
-
1,476
(34)
6,887
-
-
-
Poonglim Industrial Co.,
Ltd.
STX Engine Co., Ltd.
SamHo Co., Ltd.
Force TEC Co., Ltd.
Osung LST Co., Ltd.
STX Corporation
Indonesia Woori
Saudara Bank (*1)
Woori Renaissance
Holdings
Woori Columbus
First PEF
Woori Aviva Life
Insurance Co., Ltd.
Woori Blackstone
Korea Opportunity
First
Korea Credit Bureau
DKT
KAMCO Fifth Asset
Securitization
Specialty
Phoenix Digital Tech
Co., Ltd.
Korea Finance Security
Co., Ltd.
Woori Service Networks
Co., Ltd.
Kumho Tire Co., Inc.
United PF 1st Corporate
-
-
160
67,431
(66,992)
(640)
63,000
39,806
2,654
-
-
-
1,200
626,825
1,227
617,570
21
(32,581)
-
244,094
(84)
(146,454)
(80)
(4,307)
-
(1,900)
-
(35,399)
-
7,413
Acquisition
cost
January 1,
2013
Share of
profits
(losses)
Acquisi-
tion
Disposal
and others Dividends
Change in
Capital
Other
changes
Classification of
assets as held for
sales / distribute
to owners
December 31,
2013
For the year ended December 31, 2013
110,098
122,406
427
-
-
-
(12,438)
-
(110,395)
-
210,394
3,115
50,000
207,036
3,931
-
12,293
316
(1,739)
-
-
50,000
(47,664)
-
-
(12,868)
-
-
-
(2,330)
-
(4,600)
-
-
2,280
-
5,306
-
-
919
1
-
-
-
-
-
-
-
(18)
-
-
(65,065)
(900)
(30,371)
11
(8,708)
-
-
-
(1,086)
5,835
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(19,944)
(756)
(1,988)
(1,426)
-
-
-
-
-
-
-
-
-
-
-
-
(29,377)
-
-
(553)
-
-
-
-
-
-
-
-
-
(55)
(7)
-
-
-
-
-
-
-
-
-
-
-
12,590
16,579
(4,055)
1,872
1,859
(3,477)
3,337
4,244
122
108
113,204
129
156,028
14
20,380
financial stability
191,617
201,364
2,366
Chin Hung International
Inc.
60,275
56,223
(10,156)
Poonglim Industrial Co.,
Ltd.
STX Engine Co.,Ltd.
SamHo Co.,Ltd.
Force TEC Co., Ltd.
Woori New Alpha Fund
Woori SB Eleventh
Asset Securitization
Specialty
Woori SB Twelfth
Asset Securitization
Specialty
Woori BC Pegasus
Asset Securitization
Specialty (*2)
14,476
-
-
-
20,370
14,476
-
-
-
-
(16,680)
-
-
-
(426)
-
47,008
7,492
34
20,370
2,026
787
(31)
3,077
2,030
(42)
2,908
-
1,426
-
-
-
- 49 -
100,436
3,378
-
-
-
4,272
130
224,829
203,418
28,491
-
2,292
11,257
-
18,482
14,348
-
36,019
1,084
648,436
93,714
3,347
20,170
3,827
3,688
4,311
136
140,101
203,730
45,900
3,079
47,008
7,492
34
-
-
-
-
Strength in Our ValueS
156
Woori Stream Fourth
Asset Securitization
Specialty
Woori EA First Asset
Securitization
Specialty (*2)
Woori EA Second
Asset Securitization
Specialty (*2)
Woori EA Sixth Asset
Securitization
Specialty (*2)
Woori EA Seventh
Asset Securitization
Specialty
Woori EA Ninth
Asset Securitization
Specialty
Woori EA Eleventh
Asset Securitization
Specialty
Woori EA Sixteenth
Asset Securitization
Specialty
Woori EA
Seventeenth Asset
Securitization
Specialty
WR Loan Inc.
KAMCO Sixth Asset
Securitization
Specialty
KAMCO Seventh
Asset Securitization
Specialty
Woori Fine First
Asset Securitization
Specialty
Woori Fine Second
Asset Securitization
Specialty
Woori Fine Third
Asset Securitization
Specialty
Woori Fine Fourth
Asset Securitization
Specialty
Woori HB Third
Asset Securitization
Specialty(*2)
Woori EA Nineteenth
Asset Securitization
Specialty
Woori KA First Asset
Securitization
Specialty
Chungdo Woori
Century Security
Co., Ltd.
Woori Renaissance
Holdings
Woori Columbus
First PEF
Seoul Lakeside Co.,
Ltd.
Acquisition
cost
January 1,
2013
Share of
profits
(losses)
Acquisi-
tion
Disposal
and others Dividends
Change in
Capital
Other
changes
Classification of
assets as held for
sales / distribute
to owners
December 31,
2013
For the year ended December 31, 2013
1,250
787
627
400
400
400
-
-
-
315
(265)
(968)
1,611
2,324
(49)
400
1,383
581
9,905
14,170
10
5,400
4,902
(2,599)
4,950
5
4,583
31
(4,298)
9
1,448
6,499
(102)
390
198
(14)
397
11,400
9,760
5,040
5,106
2,059
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,695
10,845
-
-
277
7,695
265
10,845
234
233
(57)
400
406
3,010
4,500
4,500
2,889
8,187
9,199
1,262
63,000
38,800
1,006
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(60)
-
-
(432)
(841)
(1,830)
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,865)
(1,363)
(6)
-
-
(9,900)
(10,942)
-
-
-
-
-
-
-
-
(202)
-
-
(304)
(600)
-
-
-
-
-
-
(2)
(2)
-
-
-
77
-
-
(800)
(614)
(255)
265
968
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,843)
(1,123)
(12,350)
(2,303)
(285)
(40)
(1,163)
(184)
(318)
(6,963)
(7,970)
(11,108)
128
-
-
-
-
-
-
(2,816)
(7,389)
(10,538)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
39,806
1,227
-
617,570
1,200
-
162
1,200
(51)
(84)
198,450
146,317
1,125,974 1,037,930
5,899
20,517
-
144,644
-
(91,410)
-
(29,588)
-
(6,195)
-
(978)
(152,216)
(457,350)
(*1) During the year ended December 31, 2014, Indonesia Woori Bank merged with Saudara Bank, and changed its
name into Indonesia Woori Saudara Bank. Indonesia Woori Saudara Bank is a consolidated subsidiary as at the
end of 2014, therefore is excluded from the list of associates.
(*2) Where the book value of investment in joint venture or associate is nil, the additional loss are deducted from loans
that are provided to such associates or joint ventures.
- 50 -
Woori Bank Annual Report 2014
157
(3) Financial information relating to investments in joint ventures and associates accounted for using the
equity method of accounting is as follows (Unit: Korean Won in millions):
Woori Blackstone Korea Opportunity First
Korea Credit Bureau Co., Ltd.
Phoenix Digital Tech Co., Ltd.
Korea Finance Security Co., Ltd.
Woori Service Networks Co., Ltd.
Kumho Tire Co., Inc.
United PF 1st Corporate Financial Stability
Chin Hung International Inc.
Poonglim Industrial Co., Ltd.
STX Engine Co., Ltd.
SamHo Co., Ltd.
Osung LST Co., Ltd.
STX Corporation
Woori Renaissance Holdings Inc.
Woori Columbus First PEF
Woori Aviva Life Insurance Co., Ltd.
Woori Blackstone Korea Opportunity First
Korea Credit Bureau Co., Ltd.
DKT
KAMCO Fifth Asset Securitization Specialty
Phoenix Digital Tech Co., Ltd.
Korea Finance Security Co., Ltd.
Woori Service Networks Co., Ltd.
Kumho Tire Co., Inc.
United PF 1st Corporate Financial Stability
Chin Hung International Inc.
Poonglim Industrial Co., Ltd.
STX Engine Co., Ltd.
SamHo Co., Ltd.
Woori New Alpha Fund
Woori SB Eleventh Asset Securitization Specialty
Woori SB Twelfth Asset Securitization Specialty
Woori BC Pegasus Asset Securitization Specialty
Woori Stream Fourth Asset Securitization Specialty
Woori EA First Asset Securitization Specialty
Woori EA Second Asset Securitization Specialty
Woori EA Sixth Asset Securitization Specialty
Woori EA Seventh Asset Securitization Specialty
Woori EA Ninth Asset Securitization Specialty
Woori EA Eleventh Asset Securitization Specialty
Woori EA Sixteenth Asset Securitization Specialty
Woori EA Seventeenth Asset Securitization Specialty
WR Loan Inc.
KAMCO Sixth Asset Securitization Specialty
KAMCO Seventh Asset Securitization Specialty
Woori Fine First Asset Securitization Specialty
Woori Fine Second Asset Securitization Specialty
Woori Fine Third Asset Securitization Specialty
Woori Fine Fourth Asset Securitization Specialty
Woori HB Third Asset Securitization Specialty
Woori EA Nineteenth Asset Securitization Specialty
Woori KA First Asset Securitization Specialty
Chungdo Woori Century Security Co., Ltd.
Woori Renaissance Holdings Inc.
Woori Columbus First PEF
Seoul Lakeside Co., Ltd.
December 31, 2014
Assets
Liabilities
Operating
revenue
Net income
(loss)
380,622
54,716
27,400
30,990
4,250
4,590,346
1,187,406
522,749
447,617
1,088,209
654,477
172,100
1,158,788
88,605
56,936
Assets
4,466,178
354,993
63,043
486,983
69,708
23,159
31,113
4,485
4,516,507
1,159,220
551,443
545,000
1,975,978
680,075
26,868
1,689
4,978
5,024
1,541
8,835
5,849
11,587
4,910
10,072
29,087
49,278
37,049
1,257
2,612
422
761
37,410
32,863
47,690
541
31,447
33,344
23,458
100,501
63,835
238,870
873
7,805
26,187
3,108
1,625
3,323,743
40,240
495,523
417,688
1,083,907
510,878
101,265
1,040,746
23,536
602
48,887
46,111
9,650
47,398
14,394
3,414,009
105,369
552,668
157,123
386,058
860,851
86,351
1,184,480
6,876
1,540
45,351
114
(4,901)
5,527
770
130,010
(1,962)
(11,481)
(16,530)
(27,878)
30,025
(44,951)
407,231
(7,334)
(178)
December 31, 2013
Liabilities
Operating
revenue
Net income
(loss)
4,309,084
894
16,542
348,777
44,120
17,044
2,985
1,736
3,453,028
10,294
459,171
472,549
1,726,903
565,878
139
9
8
15,157
7
14,530
7,670
14,718
815
7,265
1,643
41,603
36,416
1,175
17
3
44
21,938
15,152
23,007
860
24,407
16,924
2,174
33,559
325
257,210
981,778
13,794
51,571
155,684
824
33,409
45,003
14,131
3,676,336
152,315
403,977
164,734
542,281
646,868
(89)
30
52
6,212
2,916
4,430
412
974
162
2,691
4,479
7,769
4,049
180
77
12
21,966
10,458
2,138
672
1,063
16,947
14,519
2,667
4,399
9,268
36,005
2,247
27,620
4,909
(12,227)
(8,275)
(251)
6,356
1,061
110,580
13,567
(14,915)
(54,314)
(560,405)
8,399
(609)
(70)
(104)
4,755
1,567
788
(661)
(2,421)
(110)
1,452
23
(8,662)
(9,552)
20
(226)
(31)
21,687
4,575
615
588
(142)
7,525
6,423
2,549
1,949
8,344
6,045
- 51 -
Strength in Our ValueS
158
(4) The entities that the Group has not applied equity method of accounting although the Group’s ownership
ratio is more than 20% as of December 31, 2014 and 2013, are as follows:
Vogo II-2 Investment Holdings Co., Ltd. (*1)
LIG engineering & construction Co., Ltd. (*2)
Orient shipyard Co., Ltd. (*2)
Jinsaeng K Co., Ltd. (*2)
PICITY Co., Ltd. (*2)
Gdsys Co., Ltd. (*2)
G2 Collection Co., Ltd. (*2)
Alkenz Co., Ltd. (*2)
SJ Development Co., Ltd. (*2)
Ilyang Construction Co., Ltd. (*2)
Ssangyong Engineering & Construction Co.,
Ltd. (*2)
Vogo II-2 Investment Holdings Co., Ltd. (*1)
LIG engineering & construction Co., Ltd. (*2)
Orient shipyard Co., Ltd. (*2)
Jinsaeng K Co, Ltd. (*2)
PICITY Co., Ltd. (*2)
As of December 31, 2014
Number of shares owned
24,794,201,938 shares
755,946 shares
465,050 shares
2,107,432 shares
871,631 shares
300,805 shares
12,574 shares
80,402 shares
70,529 shares
105,936 shares
Ownership (%)
36.4%
22.8%
23.0%
20.2%
21.1%
21.2%
28.9%
37.5%
26.5%
40.0%
2,957,728 shares
20.3%
As of December 31, 2013
Number of shares owned
24,548,281,071 shares
755,946 shares
465,050 shares
2,107,432 shares
871,631 shares
Ownership (%)
36.4%
22.8%
23.0%
20.2%
21.1%
(*1) Even though the Group’s ownership ratio of 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 investment committee, thus it has
been excluded from the investment in associates.
(*2) Even though the Group’s ownership ratio of the entity is more than 20%, it does not have significant
influence over the entity due to the fact that the entity is going through workout process under
receivership, thus it has been excluded from the investment in associates.
- 52 -
Woori Bank Annual Report 2014
159
(5) As of December 31, 2014 and 2013, the reconciliations from the net assets of associates based on the
ownership ratio of the Group to its corresponding book value of investment in joint ventures and associates
are as follow (Unit: Korean Won in millions except for ownership):
Total net
asset
Ownership
(%)
As of December 31, 2014
Net assets of
associates
(or joint
ventures)
Goodwill
Impairment
Intercompany
transaction
and others
Woori Blackstone Korea
Opportunity First
Korea Credit Bureau
Phoenix Digital Tech Co., Ltd.
Korea Finance Security Co., Ltd.
Woori Service Networks Co., Ltd.
Kumho Tire Co., Inc. (*1)
United PF 1st Corporate financial
stability
Chin Hung International Inc. (*1)
Poonglim Industrial Co., Ltd. (*1)
STX Engine Co., Ltd. (*1)
SamHo Co., Ltd.
Osung LST Co., Ltd. (*1)
STX Corporation (*1)
Woori Renaissance Holdings
Woori Columbus First PEF
379,749
46,911
1,213
27,882
2,625
1,228,329
1,147,166
26,650
(159,358)
(93,532)
143,599
(295,129)
117,709
65,069
56,334
26.4
7.2
44.8
15.3
4.9
14.2
17.7
26.8
30.7
15.0
7.8
11.1
15.0
51.6
1.9
100,248
3,378
543
4,272
130
173,820
203,418
7,132
(48,994)
(14,029)
11,257
(32,897)
17,639
33,576
1,082
-
-
45
-
-
48,459
-
21,359
-
-
-
51,379
24,610
-
6
-
-
(588)
-
-
-
-
-
-
-
-
-
(28,370)
(6,441)
-
As of December 31, 2013
188
-
-
-
-
2,550
-
-
48,994
16,321
-
-
469
8,884
(4)
Total net
asset
157,094
Ownership
(%)
51.6
Net assets of
associates
(or joint
ventures)
81,029
Woori Aviva Life Insurance Co., Ltd.
Woori Blackstone Korea
Opportunity First
Korea Credit Bureau
DKT
KAMCO Fifth Asset Securitization
354,099
46,501
138,206
Specialty (*2)
Phoenix Digital Tech Co., Ltd.
Korea Finance Security Co., Ltd.
Woori Service Networks Co., Ltd.
Kumho Tire Co., Inc. (*1)
United PF 1st Corporate financial
stability
Chin Hung International Inc. (*1)
Poonglim Industrial Co., Ltd.
STX Engine Co., Ltd.
SamHo Co., Ltd.
Woori New Alpha Fund
Woori SB Eleventh Asset
Securitization Specialty
Woori SB Twelfth Asset
Securitization Specialty
Woori BC Pegasus Asset
Securitization Specialty
Woori Stream Fourth Asset
Securitization Specialty
Woori EA First Asset Securitization
Specialty
Woori EA Second Asset
Securitization Specialty
Woori EA Sixth Asset Securitization
Specialty
Woori EA Seventh Asset
Securitization Specialty
Woori EA Ninth Asset Securitization
Specialty
Woori EA Eleventh Asset
Securitization Specialty (*2)
Woori EA Sixteenth Asset
Securitization Specialty
Woori EA Seventeenth Asset
Securitization Specialty
WR Loan Inc.
25,588
6,115
28,128
2,749
1,063,479
1,148,926
92,272
72,451
249,075
114,197
26,729
1,680
4,970
(10,133)
1,534
(5,695)
(1,821)
(3,131)
4,095
2,807
27,444
7,675
633
82
Goodwill
20,525
Difference
in fair value
8,841
-
-
-
-
-
11,539
-
45
-
-
15,125
-
21,359
38,354
14,928
-
1,234
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Intercompany
transaction
and others
-
1,028
62
-
(3)
-
-
-
(3,272)
-
-
-
-
(1,460)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
157,751
4,185
39,002
12,538
3,643
4,311
136
128,248
203,730
24,541
(35,275)
32,080
8,952
18,710
756
1,988
(3,040)
614
(2,278)
(728)
(1,252)
1,843
1,123
12,350
2,303
285
40
44.6
9.0
28.2
49.0
63.1
15.3
4.9
12.5
17.7
26.8
29.9
15.0
7.8
70.0
45.0
40.0
30.0
40.0
40.0
40.0
40.0
45.0
40.0
45.0
30.0
45.0
49.0
- 53 -
Book
value
100,436
3,378
-
4,272
130
224,829
203,418
28,491
-
2,292
11,257
18,482
14,348
36,019
1,084
Book
value
110,395
158,779
4,247
50,541
12,535
3,688
4,311
136
140,101
203,730
45,900
3,079
47,008
7,492
19,944
756
1,988
-
614
-
-
-
1,843
1,123
12,350
2,303
285
40
Strength in Our ValueS
160
As of December 31, 2013
Total net
asset
Ownership
(%)
Net assets of
associates
(or joint
ventures)
Difference
in fair value
Intercompany
transaction
and others
Book
value
Goodwill
KAMCO Sixth Asset Securitization
Specialty (*2)
KAMCO Seventh Asset
Securitization Specialty (*2)
Woori Fine First Asset Securitization
Specialty (*2)
Woori Fine Second Asset
Securitization Specialty
Woori Fine Third Asset
Securitization Specialty
Woori Fine Fourth Asset
Securitization Specialty
Woori HB Third Asset Securitization
Specialty
Woori EA Nineteenth Asset
Securitization Specialty
Woori KA First Asset Securitization
Specialty
Chungdo Woori Century Security
Co., Ltd. (*2)
Woori Renaissance Holdings
Woori Columbus First PEF
Seoul Lakeside Co., Ltd.
2,595
419
717
15,472
17,711
24,683
(319)
7,040
16,420
21,284
66,942
63,510
(18,340)
45.0
45.0
45.0
45.0
45.0
45.0
40.0
40.0
45.0
49.5
51.6
2.0
47.5
1,163
184
318
6,963
7,970
11,108
(128)
2,816
7,389
10,538
39,806
1,227
(8,712)
-
-
-
-
-
-
-
-
-
-
-
-
160,928
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,163
184
318
6,963
7,970
11,108
-
2,816
7,389
10,538
39,806
1,227
152,216
(*1) The net asset amount is after considering preferred stocks.
(*2) The equity method of accounting has been applied reflecting the ownership ratios of the first-tier and the second-tier
common stocks.
14.
INVESTMENT PROPERTIES
(1)
Investment properties are as follows (Unit: Korean Won in millions):
Acquisition cost
Accumulated depreciation
Net carrying value
December 31, 2014
December 31, 2013
381,668
(24,118)
357,550
359,832
(19,212)
340,620
(2) Changes in investment properties are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2014
For the year ended
December 31, 2013
Beginning balance
Acquisition
Disposal
Depreciation
Impairment loss (reversal)
Transfer
Classified to assets held for sale
Foreign currencies translation adjustments
Others
Classified into disposal group held for sale
Classified into disposal group held for
distribution to owners
Ending balance
340,620
-
-
(3,859)
-
21,760
-
31
(1,002)
-
-
357,550
491,685
513
(6,583)
(5,210)
(855)
(7,166)
(3,594)
(11)
(592)
(70,900)
(56,667)
340,620
(3) Fair value of investment properties is amounting to 394,159 million Won and 352,297 million Won as of
December 31, 2014 and 2013, respectively. The fair value of investment property, based on the assessment
that was independently performed by external appraisal agencies, is classified as level 3 on the fair value
hierarchy as of December 31, 2014 and 2013.
- 54 -
Woori Bank Annual Report 2014
161
(4) Rental fee earned from investment properties is amounting to million Won and 5,311 million Won and
4,135 million Won as of December 31, 2014 and 2013, respectively.
15. PREMISES AND EQUIPMENT
(1) Premises and equipment are as follows (Unit: Korean Won in millions):
Acquisition cost
Accumulated depreciation
Net carrying value
Land
1,514,698
-
1,514,698
Building
817,559
(111,035)
706,524
Acquisition cost
Accumulated depreciation
Net carrying value
Land
1,516,364
-
1,516,364
Building
797,672
(93,742)
703,930
December 31, 2014
Properties for
business use
920,222
(710,634)
209,588
Structures in
leased office
374,436
(304,251)
70,185
Construction
in progress Structures
20
(15)
5
102
-
102
Total
3,627,037
(1,125,935)
2,501,102
December 31, 2013
Properties for
business use
1,013,319
(757,637)
255,682
Structures in
leased office
344,776
(284,347)
60,429
Construction
in progress Structures
20
31
(15)
-
5
31
Total
3,672,182
(1,135,741)
2,536,441
(2) Changes in premises and equipment are as follows (Unit: Korean Won in millions):
For the year ended December 31, 2014
Beginning balance
Acquisition
Disposal
Depreciation
Classified to assets held
for sale
Foreign currencies
translation adjustment
Acquisition through
business combination
Transfer
Others
Ending balance
Land
1,516,364
1,206
(4)
-
Building
703,930
24,950
-
(23,390)
Properties for
business use
255,682
70,622
(31,245)
(88,873)
Structures in
leased office
60,429
30,183
(1,195)
(26,423)
Construction
in progress Structures
31
818
(314)
-
Total
5 2,536,441
127,779
-
(32,758)
-
(138,686)
-
(2,019)
(4,819)
46
39
10,719
(11,614)
-
1,514,698
9,880
(10,146)
6,080
706,524
(66)
197
3,081
-
190
209,588
-
410
196
-
6,585
70,185
-
(439)
6
-
-
102
-
-
(6,904)
253
23,882
-
(21,760)
-
-
12,855
5 2,501,102
Beginning balance
Acquisition
Disposal
Depreciation
Classified to assets held
Land
1,827,026
5,695
(4,527)
-
Building
945,103
35,097
(2,781)
(32,359)
For the year ended December 31, 2013
Properties for
business use
340,304
107,125
(4,791)
(125,631)
Structures in
leased office
68,729
28,902
(1,566)
(33,514)
Construction
in progress Structures
5
-
-
-
4,376
5,122
-
-
for sale
Foreign currencies
translation adjustment
Others
Classified into disposal
group held for sale
Classified into disposal
group held for
distribution to owners
Ending balance
(955)
(1,834)
(30)
3,318
(241)
9,627
-
(586)
2,803
-
47
9,697
-
(20)
(8,584)
(169,171)
(104,957)
(38,735)
(1,805)
(863)
(144,992)
1,516,364
(143,725)
703,930
(24,807)
255,682
(10,061)
60,429
-
31
- 55 -
Total
3,185,543
181,941
(13,665)
(191,504)
(2,789)
(830)
16,861
(315,531)
(323,585)
2,536,441
-
-
-
-
-
5
Strength in Our ValueS
162
16.
INTANGIBLE ASSETS AND GOODWILL
(1)
Intangible assets are as follows (Unit: Korean Won in millions):
Acquisition cost
Accumulated depreciation
Accumulated impairment losses
Net carrying value
December 31, 2014
Goodwill
107,541
-
-
107,541
Software
163,675
(115,854)
-
47,821
Industrial
rights
554
(226)
-
328
Development
cost
180,983
(125,646)
-
55,337
Others
409,972
(346,402)
(2,763)
60,807
Membership
deposit
27,366
-
(3,472)
23,894
Total
890,091
(588,128)
(6,235)
295,728
Acquisition cost
Accumulated depreciation
Accumulated impairment losses
Net carrying value
December 31, 2013
Core
deposit
3,107
(3,107)
-
-
Software
166,829
(111,531)
-
55,298
Industrial
rights
571
(284)
-
287
Development
cost
220,121
(129,692)
-
90,429
Others
401,006
(299,107)
(299)
101,600
Membership
deposit
25,742
-
(4,430)
21,312
Total
817,376
(543,721)
(4,729)
268,926
(2) Changes in intangible assets are as follows (Unit: Korean Won in millions):
Beginning balance
Acquisition
Disposal
Amortization
Impairment loss
Foreign currencies translation
adjustment
Others
Classified into disposal group
held for sale
Acquisition through business
Goodwill
-
1,418
-
-
-
Software
55,298
20,418
(10,839)
(16,923)
-
63
-
-
-
-
(133)
combination
Ending balance
106,060
107,541
-
47,821
For the year ended December 31, 2014
Industrial
rights
Development
cost
Membership
deposit
287
101
-
(72)
-
-
12
-
-
328
90,429
29,990
(36,092)
(21,167)
-
Others
101,600
17,809
(38,564)
(47,051)
127
21,312
1,925
(114)
-
(1,900)
Total
268,926
71,661
(85,609)
(85,213)
(1,773)
1
(6,848)
9
1,158
80
2,591
153
(3,087)
(976)
-
-
(1,109)
-
55,337
25,719
60,807
-
23,894
131,779
295,728
For the year ended December 31, 2013
Beginning balance
Acquisition
Disposal
Amortization
Impairment loss
Foreign currencies
translation
adjustment
Others
Classified into
disposal group
held for sale
Classified into
disposal group held
for distribution to
owners
Ending balance
Goodwill
131,779
-
-
-
(40,556)
Core
deposit
4,321
-
-
(855)
(3,471)
Software
45,240
28,533
(1,875)
(17,138)
-
-
1,467
(152)
-
-
(91,223)
-
-
5
-
-
-
-
Industrial
rights
184
173
-
(64)
-
-
-
-
Development
cost
77,369
43,289
(1,701)
(27,509)
-
Others
113,907
37,696
(754)
(57,436)
(299)
Membership
deposit
60,607
9,513
(3,156)
-
(4,660)
Total
433,407
119,204
(7,486)
(103,002)
(48,986)
-
39
(59)
22,446
(85)
1,702
(139)
25,654
(596)
(3,515)
(28,605)
(124,091)
(777)
55,298
(6)
287
(462)
90,429
(10,386)
101,600
(14,004)
21,312
(25,635)
268,926
- 56 -
Woori Bank Annual Report 2014
163
17. ASSETS HELD FOR SALE
Assets held for sale recognized are 8,013 million Won and 587 million Won as of December 31, 2014 and 2013,
respectively.
18. ASSETS SUBJECT TO LIEN AND ASSETS ACQUIRED THROUGH FORECLOSURES
(1) Assets subjected to lien are as follows (Unit: Korean Won in millions):
December 31, 2014
Collateral given to
Amount
Korea Investment
Reason for collateral
Margin deposit for future or
Securities and others
105,521
option and others
Due from banks
Financial assets at
FVTPL
Industrial and financial
debt securities and
others
Kiwoom Asset
Management and
others
Financial institutions debt
securities and others
AFS financial assets
Korean treasury and
government agencies
bonds
Financial institutions debt
securities and others
HTM financial assets Korean treasury and
Daewoo Securities and
others
BANCO BILBAO
VIZCAYA
ARGENARIA
Bank of Korea and
others
Related to bonds sold under
repurchase agreements (*2)
9,851
309,213 Collaterals for customer RP
926,796 Related to bonds sold under
repurchase agreements (*2)
2,064,586 Settlement risk and others
government agencies
bonds
Korean treasury and
government agencies
bonds and others
Nomura Securities Co.,
Ltd. and others
Related to bonds sold under
650,937
repurchase agreements (*2)
Bank of Korea and
others
Credit Counselling &
Recovery Service
3,063,448 Settlement risk and others
8,928 Leasehold rights and others
Total
7,139,280
Land and building
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
Korea Securities
Depository and
others
December 31, 2013
Amount (*1)
Reason for collateral
Margin deposit for future or
18,242
option and others
13,112,614 Collaterals for customer RP
government agencies
bonds
Financial institutions debt
securities and others
Nomura Securities Co.,
Ltd. and others
Bank of Korea and
others
211,629
Related to bonds sold under
repurchase agreements (*2)
2,336,541 Settlement risk and others
HTM financial assets Korean treasury and
government agencies
bonds
Korean treasury and
government agencies
bonds and others
Nomura Securities Co.,
Ltd. and others
893,123
Related to bonds sold under
repurchase agreements (*2)
Bank of Korea and
others
Shinhan Card Co., Ltd.
and others
Total
3,974,617 Settlement risk and others
18,491 Leasehold rights and others
20,565,257
Land and building
(*1) Including the amounts related to subsidiaries that are reclassified into disposal group held for sale and
disposal groups held for distribution to owners.
(*2) The assets are not derecognized as there are the repurchase agreements at predetermined price or
original sale price added with certain rate of return. Collaterals are provided, and the purchasers are
eligible to dispose or provide them as collateral. The Group recognizes the relevant amount as liability
(bond sold under repurchase agreements) due to derecognition.
- 57 -
Strength in Our ValueS
164
(2) The carrying amounts of buildings acquired through foreclosure are as follow (Unit: Korean Won in
millions):
Land
Building
December 31, 2014
December 31, 2013
189
-
-
329
(3) Loaned securities are as follows (Unit: Korean Won in millions):
Financial assets
at FVTPL
Korean treasury and
government agencies bonds
December 31,
2014
December 31,
2013 (*)
-
110,090
Loaned to
Korea Money Brokerage
Corp. and others
AFS financial
assets
Korean treasury and
government agencies
securities
Korean treasury and
14,737
35,880
government agencies bonds
Total
686,096
700,833
320,013
465,983
Samsung Securities Co.,
Ltd. and others
Korea Securities
Depository
(*) Including the amounts related to subsidiaries that are reclassified into disposal group held for sale and
disposal groups held for distribution to owners.
Loaned securities are lending of specific securities to borrowers who agree to return the same quantity of the
same security at the end of lending period. As the Group does not derecognize these securities, there are no
liabilities relates to loaned securities.
(4) Collaterals held that can be disposed and re-subjected to lien regardless of defaults of counterparties
Fair values of collaterals held can be disposed and re-subjected to lien regardless of defaults of counterparties as
of December 31, 2014 and 2013 are as follows (Unit: Korean Won in millions):
Securities
Fair values of collaterals
6,790,215
Fair values of collaterals were
disposed or re-subjected to lien
-
December 31, 2014
Securities
Fair values of collaterals
4,913,671
Fair values of collaterals were
disposed or re-subjected to lien
82,925
December 31, 2013 (*)
(*) Including the amounts related to subsidiaries that are reclassified into disposal group held for sale and
disposal groups held for distribution to owners.
- 58 -
Woori Bank Annual Report 2014
165
19. OTHER ASSETS
Other assets are as follows (Unit: Korean Won in millions):
Prepaid expenses
Advance payments
Non-operative assets
Others
Total
December 31, 2014
December 31, 2013
131,267
1,097
189
12,604
145,157
174,344
739
329
3,474
178,886
20. FINANCIAL LIABILITY AT FVTPL
(1) Financial liabilities at FVTPL consist of as follows (Unit: Korean Won in millions):
Financial liabilities held for trading
Financial liabilities designated at
FVTPL
Total
December 31, 2014
2,153,782
521,572
2,675,354
December 31, 2013
2,105,301
401,947
2,507,248
(2) Financial liabilities held for trading are as follows (Unit: Korean Won in millions):
Deposits due to Customers:
Gold banking liabilities
Derivative liabilities
Total
December 31, 2014
December 31, 2013
13,927
2,139,855
2,153,782
9,254
2,096,047
2,105,301
(3) Financial liabilities designated at FVTPL are as follows (Unit: Korean Won in millions):
December 31, 2014
December 31, 2013
Equity linked securities index:
Equity linked securities index in
short position
Debentures:
Debentures in local currency
Debentures in foreign currencies
Sub-total
Total
362,308
97,590
61,674
159,264
521,572
218,788
125,529
57,630
183,159
401,947
- 59 -
Strength in Our ValueS
166
(4) Credit risk adjustment to financial liabilities designated at FVTPL is as follows (Unit: Korean Won in
millions):
Financial liabilities designated at FVTPL
subject to credit risk adjustments
Credit risk adjustments
Accumulated changes in credit risk adjustments
December 31, 2014
December 31, 2013
521,572
(2,612)
(45,561)
401,947
(2,905)
2,422
Credit risk adjustments are applied to reflect the Group’s own credit risk when measuring derivative liabilities at
fair value. The methodology to determine the adjustment incorporates the Group’s credit spread as observed
through credit ratings.
(5) The differences between financial liabilities at FVTPL’s carrying amount and nominal amount at maturity
are as follows (Unit: Korean Won in millions):
Carrying amount
Nominal amount at maturity
December 31, 2014
521,572
623,461
(101,889)
December 31, 2013
401,947
520,650
(118,703)
21. DEPOSITS DUE TO CUSTOMERS
Deposits sorted by interest type are as follows (Unit: Korean Won in millions):
Deposits in local currency
Demand deposits
Time deposits
Mutual funds
Deposits on notes payables
Deposits on CMA
Certificate of deposits
Other deposits
Sub-total
Deposits in foreign currencies
Present value discount
Total
December 31, 2014
December 31, 2013
10,090,772
161,697,250
46,072
486,356
276,484
740,090
1,281,595
174,618,619
13,902,989
(5,143)
188,516,465
11,690,841
146,131,999
53,189
352,577
338,265
3,297,551
1,236,910
163,101,332
12,264,621
(42,309)
175,323,644
- 60 -
Woori Bank Annual Report 2014
167
22. BORROWINGS AND DEBENTURES
(1) Borrowings are as follows (Unit: Korean Won in millions):
December 31, 2014
Lenders
Interest rate (%)
Amount
Borrowings in local currency:
Borrowings from the Bank of Korea
Borrowings from government funds
The Bank of Korea
Small and Medium Business
Corporation and others
The Korea Development Bank and
others
0.5 ~ 1.0
803,317
0.0 ~ 3.5
1,680,175
0.0 ~ 3.8
4,229,396
6,712,888
Others
Sub-total
Borrowings in foreign currencies:
Borrowings in foreign currencies
Offshore borrowings in foreign
currencies
Sub-total
Bills sold
Call money
Bonds sold under repurchase
agreements
Present value discount
Total
The Export-Import Bank of Korea
0.0 ~ 3.7
7,921,772
Barclays Bank PLC
Others
Banks
Other financial institutions
0.5
0.0 ~ 2.6
0.0 ~ 3.9
1.3 ~ 10.6
17,375
7,939,147
87,692
1,771,733
1,196,237
(102)
17,707,595
December 31, 2013
Lenders
Interest rate (%)
Amount
Borrowings in local currency:
Borrowings from the Bank of Korea
Borrowings from government funds
The Bank of Korea
Small and Medium Business
Others
Sub-total
Borrowings in foreign currencies:
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 and
currencies
Sub-total
Bills sold
Call money
Bonds sold under repurchase
agreements
Present value discount
Total
others
Others
Banks
Other financial institutions
0.5 ~ 1.0
513,841
0.0 ~ 3.5
1,790,146
0.0 ~ 3.8
4,185,524
6,489,511
0.0 ~ 12.0
6,225,236
0.8
0.0 ~ 2.7
0.0 ~ 7.8
1.4 ~ 10.6
21,106
6,246,342
111,096
4,871,976
513,442
(856)
18,231,511
(2) Debentures are as follows (Unit: Korean Won in millions):
December 31, 2014
December 31, 2013
Interest rate
(%)
0.8 ~ 10.5
3.4 ~ 10.3
Face value of bond
Ordinary bonds
Subordinated bonds
Other bonds
Sub-total
Discounts on bond
Total
Interest rate
(%)
0.8~10.5
3.4~10.3
Amount
14,687,044
6,995,786
53,006
21,735,836
(58,162)
21,677,674
Amount
18,564,367
6,248,349
51,601
24,864,317
(68,413)
24,795,904
- 61 -
Strength in Our ValueS
168
23. PROVISIONS
(1) Provisions are as follows (Unit: Korean Won in millions):
Asset retirement obligation
Provision for guarantee (*1)
Provision for loan commitments
Provision for credit card points
Other provisions (*2)
Total
December 31, 2014
29,733
509,320
90,449
5,548
56,959
692,009
December 31, 2013
23,513
501,948
123,930
6,441
28,967
684,799
(*1) Provision for guarantee includes provision for financial guarantee of 159,149 million Won and 123,228
million Won as of December 31, 2014 and 2013, respectively.
(*2) Other provisions consist of provision for litigation, provision for loss recovery, and others.
(2) Changes in provisions except for asset retirement obligation are as follows (Unit: Korean Won in millions):
Beginning balance
Provisions provided
Provisions used
Reversal of unused amount
Others
Ending balance
Beginning balance
Provisions provided
Provisions used
Reversal of unused amount
Classified into disposal group
held for sale
Classified into disposal group
held for distribution to owners
Ending balance
Provision for
credit card
points
For the year ended December 31, 2014
Provision for
loan
commitments
123,930
2,613
30
(36,158)
34
90,449
6,441
12,507
(13,400)
-
-
5,548
Other
provisions
28,967
41,963
(26,208)
-
12,237
56,959
Provision for
credit card
points
For the year ended December 31, 2013
Provision for
loan
commitments
158,395
-
4,015
(13,216)
7,181
13,051
(13,018)
(14)
Other
provisions
254,538
72,656
(86,559)
(9,159)
Provision for
guarantees
501,948
46,191
(38,402)
(31,877)
31,460
509,320
Provision for
guarantees
421,520
96,164
1,470
(3,683)
Total
661,286
103,274
(77,980)
(68,035)
43,731
662,276
Total
841,634
181,871
(94,092)
(26,072)
(578)
(361)
-
(12,006)
(12,945)
(12,945)
501,948
(24,903)
123,930
(759)
6,441
(190,503)
28,967
(229,110)
661,286
(3) Changes in asset retirement obligation are as follows (Unit: Korean Won in millions):
Beginning balance
Provisions provided
Provisions used
Depreciation
Reversal of unused amount
Increase in restoration costs and others
Classified into disposal group held for sale
Classified into disposal group held for
distribution to owners
Ending balance
For the year ended
December 31, 2014
For the year ended
December 31, 2013
23,513
932
(746)
519
(143)
5,658
-
-
29,733
22,024
4,553
(1,532)
433
(1,800)
9,175
(4,619)
(4,721)
23,513
- 62 -
Woori Bank Annual Report 2014
169
24. NET DEFINED BENEFIT LIABILITY
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. The 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.
The Group is exposed to various risks through Defined Benefit Retirement Pension Plan and the major
significant risks are as follows:
Volatility of Asset
The defined benefit obligation was estimated with a discount rate which is calculated based on the yield of blue
chip corporate bonds in Korea. A deficit may occur if the rate of return on plan assets falls short of the discount
rate. The plan assets include equity instruments are exposed to the related volatility and risks.
Decrease in Yield of Blue Chip Bonds
A decrease in yield of blue chip bonds may result in increase in defined benefit liability although the increase in
the value of some debt securities in the defined benefit plan would set it off partially.
Risk of Inflation
Defined benefit obligations are correlated to the inflation rate; the higher the inflation rate is, the higher the level
of liabilities. As a result, a deficit may occur in the plan. However, the plan assets are less impacted since the
plan assets consist of mainly debt securities with fixed rates and equity instruments.
(1) The net defined benefit liability is as follows (Unit: Korean Won in millions):
Defined benefit obligation
Fair value of plan assets
Net defined benefit liability
December 31, 2014
683,961
(608,370)
75,591
December 31, 2013
509,849
(438,247)
71,602
(2) Changes in the carrying value of defined benefit obligation are as follows (Unit: Korean Won in millions):
Beginning balance
Current service cost
Interest cost
Remeasurements
Foreign currencies translation adjustments
Retirement benefit paid
Past service cost
Curtailment or settlement
Others
Classified into disposal group held for sale
Classified into disposal group held for
distribution to owners
Ending balance
For the year ended
December 31, 2014
509,849
118,651
20,016
72,990
(133)
(32,422)
-
(5,570)
580
-
For the year ended
December 31, 2013
562,285
160,216
21,352
(7,299)
2,742
(38,787)
470
(4,082)
2,542
(68,177)
-
683,961
(121,413)
509,849
- 63 -
Strength in Our ValueS
170
(3) Changes in the plan assets are as follows (Unit: Korean Won in millions):
Beginning balance
Interest income
Remeasurements
Employer’s contributions
Retirement benefit paid
Settlement
Others
Classified into disposal group held for sale
Classified into disposal group held for distribution
to owners
Ending balance
For the year ended
December 31, 2014
438,247
20,804
(5,504)
184,141
(22,849)
(5,525)
(944)
-
For the year ended
December 31, 2013
395,989
21,085
(2,489)
147,633
(28,615)
(3,725)
1,277
(60,348)
-
608,370
(32,560)
438,247
(4) Plan assets mainly consist of deposits that represent 100% and 91.48% of plan assets as of December 31,
2014 and 2013, respectively. Among plan assets, realized returns on plan assets amount to 15,300 million
Won and 18,596 million Won for the years ended December 31, 2014 and 2013, respectively.
(5) Current service cost, net interest expense, past service cost, loss on the curtailment or settlement and
remeasurements recognized in the consolidated statements of net income and total comprehensive income
are as follows (Unit: Korean Won in millions):
Current service cost
Net interest expense
Past service cost
Loss on the curtailment or settlement
Reclassification to discontinued operations
Cost recognized in net income
Remeasurements
Cost recognized in total comprehensive income
For the year ended
December 31, 2014
118,651
(788)
-
(45)
-
117,818
78,494
196,312
For the year ended
December 31, 2013
160,216
267
470
(357)
(40,681)
119,915
(4,810)
115,105
Retirement benefit service costs related to defined contribution plans are recognized 3,543 million Won and
2,967 million Won for the years ended December 31, 2014 and 2013, respectively.
(6) Key actuarial assumptions used in defined benefit liability assessment are as follows:
Discount rate
Future wage growth rate
Retirement rate
Mortality rate
December 31, 2014
3.29%
5.74%
Issued by Korea Insurance
Development Institute
Issued by Korea Insurance
Development Institute
December 31, 2013
4.28%
5.72%
Issued by Korea Insurance
Development Institute
Issued by Korea Insurance
Development Institute
(7) The sensitivity to actuarial assumptions used in the 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
Defined benefit obligation as of
December 31, 2014 December 31, 2013
(46,842)
54,152
54,684
(48,082)
(66,278)
76,296
76,040
(67,267)
- 64 -
Woori Bank Annual Report 2014
171
25. OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES
Other financial liabilities and other liabilities are as follows (Unit: Korean Won in millions):
December 31, 2014
December 31, 2013
Other financial liabilities:
Payables
Accrued expenses
Borrowings from trust accounts
Agency business revenue
Foreign exchange payables
Domestic exchange payables
Miscellaneous liabilities
Present value discount
Sub-total
Other liabilities:
Deferred Income
Other miscellaneous liabilities
Sub-total
Total
4,532,101
2,343,332
3,475,353
433,594
375,059
3,386,529
2,345,433
(1,714)
16,889,687
164,431
226,239
390,670
17,280,357
8,311,513
2,291,716
3,361,478
406,576
650,429
2,872,725
2,024,311
(3,801)
19,914,947
157,944
253,334
411,278
20,326,225
26. DERIVATIVES
(1) Derivative assets and derivative liabilities are as follows (Unit: Korean Won in millions):
December 31, 2014
Assets
Liabilities
Nominal
amount
Fair value
hedge
For trading
For trading
Interest rate:
Interest rate futures
Interest rate swap
Long interest rate options
Short interest rate options
21,640
106,014,214
1,658,180
1,788,180
-
182,990
-
-
-
1,097,849
11,985
-
-
1,140,917
-
10,638
Currency:
Currency futures
Currency forwards
Currency swaps
Long currency option
Short currency option
Stock:
Stock futures
Stock swaps
Long index option
Short index option
Others:
Other futures
Other swaps
Long option
Short option
Total
382,577
40,078,267
20,902,464
1,433,050
1,614,028
46,400
10,000
352,943
767,978
592
53,035
249,081
261,883
175,634,512
-
-
-
-
-
-
-
13,071
-
-
-
-
-
196,061
-
415,209
504,858
45,617
-
-
522
1,070
-
-
342,778
572,985
-
18,176
-
-
-
19,916
-
4,481
29,876
-
2,111,467
-
4,468
-
29,977
2,139,855
- 65 -
Strength in Our ValueS
172
December 31, 2013
Assets
Liabilities
Nominal
amount
Fair value
hedge
For
trading
Fair value
Hedge
For
trading
Interest rate:
Interest rate futures
Interest rate swap
Long interest rate options
Short interest rate options
31,722
122,337,393
737,963
2,722,963
-
131,386
-
-
-
996,279
11,355
-
-
353,456
713,975
51,497
-
-
-
55,105
-
-
-
13 1,025,354
-
8,570
-
-
-
-
-
-
-
-
-
-
1,772
-
375,259
655,198
-
8,392
-
22
-
20,340
1,416,265
28,984,290
19,653,370
642,132
644,770
54,126
10,000
273,511
1,065,422
-
-
-
-
-
-
-
24
-
660
12,607
160,430
8,346
178,755,970
-
-
-
-
131,410
-
268
2,496
-
2,184,431
-
-
-
-
-
507
2,356
49
1,785 2,096,047
Currency:
Currency futures
Currency forwards
Currency swaps
Long currency option
Short currency option
Stock:
Stock futures
Stock swaps
Long stock option
Short stock option
Others:
Other futures
Other forwards
Other swaps
Short option
Total
Derivatives held for trading purpose are classified into financial assets or liabilities at FVTPL and derivatives for
hedging are stated as a separate line item in the consolidated statements of financial position (see Notes 7 and
20).
(3) Gains or losses from valuation of financial instruments under hedge accounting are as follows (Unit:
Korean Won in millions):
Gains or losses from hedged items
Gains or losses from hedging instruments
For the year ended
December 31, 2014
For the year ended
December 31, 2013
(64,158)
63,442
114,053
(108,290)
27. DAY 1 PROFIT OR LOSS
Changes in details of deferred day 1 profits or losses are as follows (Unit: Korean Won in millions):
Beginning balance
Acquisitions
Amounts recognized in profits or losses
Classified into disposal group held for sale
Ending balance
For the year ended
December 31, 2014
For the year ended
December 31, 2013
6,256
13,367
(6,124)
-
13,499
65,267
100,110
(59,389)
(99,732)
6,256
In case some variables to measure fair values of financial instruments were not observable or available in the
market, valuation techniques were utilized to evaluate such financial instruments. Those financial instruments
were recorded at the fair value produced by the valuation techniques as at the time of acquisition, even though
there were difference noted between the transaction price and the fair value. The table above presents the
difference yet to be realized as profit or losses.
- 66 -
Woori Bank Annual Report 2014
173
28. CAPITAL STOCK AND CAPITAL SURPLUS
(1) The number of authorized shares and others are as follows:
Authorized shares of common stock
Par value
Issued shares of common stock
December 31, 2014
5,000,000,000 Shares
5,000 Won
676,278,371 Shares
December 31, 2013
2,400,000,000 shares
5,000 Won
806,015,340 shares
(2) Changes in numbers of issued shares of common stock are as follows (Unit: Shares):
Beginning balance
Changes due to the Spin-off
Ending balance
December 31, 2014
December 31, 2013
806,015,340
(129,736,969)
676,278,371
806,015,340
-
806,015,340
(3) Details of capital surplus are as follows (Unit: Korean Won in millions):
Capital in excess of par value
Other capital surplus
Total
December 31, 2014
December 31, 2013
269,533
21,533
291,066
109,025
67,477
176,502
29. HYBRID SECURITIES
The bond-type hybrid securities classified as owner’s equity are as follows (Unit: Korean Won in millions):
Issuance date
June 20, 2008
Maturity
June 20, 2038
November 22, 2011 November 22, 2041
March 8, 2012
April 25, 2013
March 8, 2042
April 25, 2043
November13, 2013 November 13, 2043
December 12, 2014 December 12, 2044
May 2, 2007
May 2, 2037
Local currency
Foreign currency
Issuance cost
Total
Annual interest
rate (%)
7.7
5.9
5.8
4.4
5.7
5.2
6.2
December
31, 2014
December
31, 2013
255,000
310,000
190,000
500,000
200,000
160,000
930,900
(7,077)
2,538,823
-
310,000
190,000
-
-
-
-
(1,593)
498,407
With respect to the hybrid securities issued, the contractual agreements allow the Group to indefinitely
extend the maturity date and defer the payment of interest. If the Group makes a resolution not to pay
dividends on common stock, and then, the Group is exonerated from interest payment on the hybrid
securities.
- 67 -
Strength in Our ValueS
174
30. OTHER EQUITY
(1) Details of other equity are as follows (Unit: Korean Won in millions):
Other comprehensive income:
Gain on available-for-sale financial assets
Share of other comprehensive income of joint
ventures and associates
Loss on foreign currency translation for foreign
operations
Remeasurement of the net defined benefit liability
Cash flow hedges
Sub-total
Treasury shares (*)
Other capital adjustments
Capital adjustments from the Spin-off (Note 48)
Capital adjustments from the merger with Woori
Finance Holdings
Others
Sub-total
Total
December 31, 2014
December 31, 2013
300,994
204,110
2,779
4,690
(107,721)
(119,375)
(10,371)
66,306
(37,594)
(2,185,666)
(178,060)
(58,124)
(2,421,850)
(2,393,138)
(117,793)
(59,877)
(8,359)
22,771
(14)
-
-
(58,124)
(58,124)
(35,367)
(*) As of December 31, 2013, the Group holds 2,000 shares (14 million Won) of its treasury shares,
through having acquired as a buyback of odd-lot share when exchanging the shares of Woori
Investment & Securities. As of December 31, 2014, the Group is holding 3,007,144 shares (37,594
million Won) through the following transactions in the year ended at December 31, 2014: acquisition
due to the spin-off of Kyongnam Bank and Kwangju Bank, 27,157 shares (345 million Won),
acquisition due to the treasury stock trust, 2,913,155 shares (36,429 million Won), and acquisition due
to the claims for stock repurchase from the shareholders who opposed to the merger, 64,832 shares (806
million Won).
- 68 -
Woori Bank Annual Report 2014
175
(2) Changes in the accumulated other comprehensive income are as follows (Unit: Korean Won in millions):
For the year ended December 31, 2014
Beginning
balance
(*)
Increase
(decrease) on
valuation
Re-
classification
adjustments
Income tax
effect
Changes
due to the
Spin-off
Ending
balance
279,398
354,856
(241,216)
(27,102)
(64,942)
300,994
5,753
(3,464)
(244)
734
(136,576)
2,186
37,094
(10,425)
-
-
2,779
(107,721)
(68,408)
7,928
88,095
(81,476)
(6,844)
265,258
(900)
(13,671)
(218,937)
18,950
2,296
(15,547)
12,459
(80)
(52,563)
(119,375)
(10,371)
66,306
Gain (loss) on available-for-
sale financial assets
Share of other
comprehensive income
(loss) of joint ventures
and associates
Gain (loss) on foreign
currency translation of
foreign operations
Remeasurement of the net
defined benefit liability
Cash flow hedges
Total
(*) The beginning balance incorporates the accumulated other comprehensive income from subsidiaries that
were reclassified into disposal group held for sale and disposal groups held for distribution to owners.
For the year ended December 31, 2013
Increase
(decrease)
on
valuation
Beginning
balance
Re-
classification
adjustments
Income
tax
effect
Classified
into
disposal
group held
for sale
Classified
into disposal
group held
for
distribution
to owners
Ending
balance
313,180
8,089
(17,110)
(24,761)
(28,923)
(46,365) 204,110
12,128
(7,269)
-
894
(3,662)
2,599
4,690
(84,577)
(70,728)
(10)
18,739
18,783
-
(117,793)
(75,323)
8,693
174,101
2,508
(650)
(68,050)
-
811
(16,309)
4,407
(926)
(1,647)
(592)
(15,426)
(29,820)
9,123
(861)
(35,504)
(59,877)
(8,359)
22,771
Gain (loss) on available-for-
sale financial assets
Share of other
comprehensive income
(loss) of joint ventures
and associates
Gain (loss) on foreign
currency translation of
foreign operations
Remeasurement of the net
defined benefit liability
Cash flow hedges
Total
- 69 -
Strength in Our ValueS
176
31. RETAINED EARNINGS
(1) Details of retained earnings are as follows (Unit: Korean Won in millions):
Legal reserve Legal reserve
Other legal reserve
Voluntary
reserve
Sub-total
Business rationalization reserve
Reserve for financial structure improvement
Additional reserve
Regulatory reserve for credit loss
Revaluation reserve
Other voluntary reserve
Sub-total
Retained earnings before appropriation
Total
i. Legal reserve
December 31, 2014 December 31, 2013
1,075,539
-
1,075,539
-
-
-
858
-
8,656,000
8,656,858
3,380,293
13,112,690
1,463,754
41,472
1,505,226
8,000
235,400
8,134,544
1,298,335
760,455
11,700
10,448,434
2,211,698
14,165,358
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.
ii. 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.
iii. Business rationalization reserve
Pursuant to the Tax Exemption and Reduction Control Law, the Bank 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.
iv. 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.
v. Additional reserve and other voluntary reserve
Additional reserve and other voluntary reserve were appropriated for capital adequacy and other
management purpose.
vi. 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 Bank discloses such short fall amount as regulatory reserve for credit loss.
vii. Revaluation reserve
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.
- 70 -
Woori Bank Annual Report 2014
177
(2) Changes in retained earnings are as follows (Unit: Korean Won in millions):
Beginning balance
Net income (loss) attributable to owners
Changes due to the Spin-off
Dividends on common stock
Dividends on hybrid securities
Others
Ending balance
For the years ended December 31
2014
13,112,690
1,213,980
(110,405)
-
(50,129)
(778)
14,165,358
2013
13,881,378
(537,688)
-
(201,503)
(29,399)
(98)
13,112,690
32. 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 the RSBB, the Bank 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 balance
Planned reversal of regulatory reserve
(reverse) for credit loss
Ending balance
For the years ended December 31
December 31, 2014
1,800,387
December 31, 2014
1,685,623
(44,245)
1,756,142
114,764
1,800,387
(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 (loss)
Provision (reversal) of regulatory
reserve for credit loss
Adjusted net income (loss) after the
provision (reversal) of regulatory
reserve
Adjusted EPS (or loss per share) after
the provision (reversal) of regulatory
reserve
For the years ended December 31
2013 (*2)
2014 (*1)
1,207,969
(713,435)
(44,245)
114,764
1,252,214
(828,199)
1,512
(1,256)
(*1) The amounts are calculated using the balance of regulatory reserve for credit loss of Woori Finance
Holdings as of January 1, 2014. If it was calculated using the balance of Woori Bank, the required
provision of regulatory reserve for credit loss amounted to 505,805 million Won, the adjusted net
income after provision of regulatory reserve amounted to 702,164 million Won, and the adjusted EPS
after the provision of regulatory reserve amounted to 746 Won, respectively.
(*2) If it was calculated solely based on the owner’s equity of Woori Finance Holdings, the net loss before
the provision of regulatory reserve amounted to 537,688 million Won, the required provision of
regulatory reserve for credit loss amounted to 135,077 million Won, the adjusted net loss after
provision of regulatory reserve amounted to 672,765 million Won, and the adjusted loss per share after
the provision of regulatory reserve amounted to 871 Won, respectively.
- 71 -
Strength in Our ValueS
178
33. DIVIDENDS
The Bank is to pay out 336,635 million Won (500 Won per share) as dividend for the year ended December 31,
2014, and it will be reviewed and approved at the shareholders’ meeting on March 27, 2015. As such, the
separate statement of financial position as of December 31, 2014 does not incorporate such unpaid dividend.
34. NET INTEREST INCOME
(1) Interest income recognized are as follows (Unit: Korean Won in millions):
Financial assets at FVTPL
AFS financial assets
HTM financial assets
Loans and receivables:
Interest on due from banks
Interest on loans
Interest of other receivables
Sub-total
Total
For the years ended December 31
2013
2014
70,653
359,986
441,626
104,633
8,183,844
50,498
8,338,975
9,211,240
109,202
376,933
483,515
120,041
8,349,900
53,792
8,523,733
9,493,383
(2)
Interest expense recognized are as follows (Unit: Korean Won in millions):
Interest on deposits due to customers
Interest on borrowings
Interest on debentures
Interest expense on others
Total
For the years ended December 31
2013
2014
3,450,786
251,804
885,365
130,267
4,718,222
3,649,810
253,752
960,529
137,270
5,001,361
- 72 -
Woori Bank Annual Report 2014
179
35. NET FEES AND COMMISSIONS INCOME
(1) Fees and commissions income recognized are as follows (Unit: Korean Won in millions):
Banking fees (*)
Guarantee fees
Fees from project financing
Credit card fees
CMA management fees
Brokerage fees
Others
Total
For the years ended December 31
2013
2014
641,332
75,997
12,717
746,811
-
61,472
59,686
1,598,015
671,257
91,312
12,697
668,910
789
62,933
57,326
1,565,224
(*) Banking fees include agency commission, fees income from electronic finance, fees income related to
loan, fees for import letter of credit dealing, commission received on foreign exchange and others.
(2) Fees and commissions expense incurred are as follows (Unit: Korean Won in millions):
Fees paid
Credit card commissions
Brokerage commissions
Others
Total
36. DIVIDEND INCOME
For the years ended December 31
2013
2014
115,480
555,496
168
9,856
681,000
117,268
511,776
210
9,469
638,723
Dividend income recognized are as follows (Unit: Korean Won in millions):
Dividend from financial assets at FVTPL
Dividend from AFS financial assets
Total
For the years ended December 31
2013
2014
3,178
93,634
96,812
7,283
80,358
87,641
- 73 -
Strength in Our ValueS
180
37. GAINS (LOSSES) ON 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 (losses) on financial assets held for trading
Gains (losses) of financial assets designated at FVTPL
Total
For the years ended December 31
2014
161,851
28,061
189,912
2013
129,972
(6,072)
123,900
(2) Gains (losses) on financial assets held for trading are as follows (Unit: Korean Won in millions):
Financial Assets
Securities
at FVTPL
Other financial
assets
Derivatives
(for trading)
Interest rates
derivatives
Currencies
derivatives
Equity
derivatives
Other
derivatives
Total
Gain on valuation
Gain on disposals
Loss on valuation
Loss on disposals
Sub-total
Gain on valuation
Gain on disposals
Loss on valuation
Loss on disposals
Sub-total
Total
Gain on transactions
and valuation
Loss on transactions
and valuation
Sub-total
Gain on transactions
and valuation
Loss on transactions
and valuation
Sub-total
Gain on transactions
and valuation
Loss on transactions
and valuation
Sub-total
Gain on transactions
and valuation
Loss on transactions
and valuation
Sub-total
Total
For the years ended December 31
2014
2013
27,122
37,158
(19,441)
(45,201)
(362)
3,878
763
(4,315)
(509)
(183)
(545)
7,151
53,783
(30,369)
(68,671)
(38,106)
6,296
812
(6,612)
(350)
146
(37,960)
1,220,496
1,282,013
(1,261,289)
(40,793)
(1,282,666)
(653)
2,681,812
3,642,244
(2,499,395)
182,417
(3,463,262)
178,982
61,840
45,758
(40,342)
21,498
(55,718)
(9,960)
50,883
18,201
(51,609)
(726)
162,396
161,851
(18,638)
(437)
167,932
129,972
- 74 -
Woori Bank Annual Report 2014
181
(3) Gains (losses) on financial assets designated at FVTPL are as follows (Unit: Korean Won in millions):
For the years ended December 31
2014
2013
Gain (loss) on compound financial instruments:
Gain (loss) on disposals of compound financial
instruments
Gain (loss) on valuation of compound financial
instruments
Sub-total
Gain (loss) on other financial instruments:
Gain (loss) on disposals of other financial
instruments
Gain (loss) on valuation of other financial
instruments
Sub-total
Gain on other financial instruments:
Gain on valuation of other financial instruments
Sub-total
Total
7,575
9,709
17,284
(123)
43
(80)
10,857
10,857
28,061
(7,842)
(625)
(8,467)
265
(920)
(655)
3,050
3,050
(6,072)
38. GAINS (LOSSES) ON AFS FINANCIAL ASSETS
Gains (losses) on AFS financial are as follows (Unit: Korean Won in millions):
Gains on redemption of securities
Gains on transaction of securities
Impairment losses on securities
Total
For the years ended December 31
2013
2014
90
171,747
(240,761)
(68,924)
43
59,355
(144,640)
(85,242)
39.
IMPAIRMENT LOSSES DUE TO CREDIT LOSS
Impairment losses on loans and receivables, guarantees and loan commitment recognized for credit loss are as
follows (Unit: Korean Won in millions):
Provision due to credit loss
Reversal of provision on guarantee
Reversal of provision on loan commitment
Total
For the years ended December 31
2014
2013
(1,116,171)
(14,314)
33,545
(1,096,940)
(2,199,362)
(93,311)
15,413
(2,277,260)
- 75 -
Strength in Our ValueS
182
40. OTHER NET OPERATING INCOMES (EXPENSES)
(1) Administrative expenses recognized are as follows (Unit: Korean Won in millions):
Employee benefits
Short term
employee benefits
Salaries
Others
Retirement benefit service costs
Redundancy payments
Sub-total
Depreciation and amortization
Other administrative
expenses
Rent
Taxes and dues
Service charges
IT expenses
Telephone and communication expenses
Operating promotion expenses
Advertising
Printing
Traveling expenses
Supplies
Insurance premium
Reimbursement
Maintenance
Water, light and heating
Vehicle maintenance
Others
Sub-total
Total
For the years ended December 31
2014
2013
1,196,332
360,158
121,361
70,459
1,748,310
223,899
266,369
101,753
215,448
106,386
58,102
44,382
51,944
10,712
7,702
6,908
5,899
18,937
14,050
15,163
10,860
52,095
986,710
2,958,919
1,186,568
346,141
122,882
58,215
1,713,806
232,737
231,422
113,469
206,314
104,690
56,319
44,963
56,269
9,596
6,848
6,806
4,428
16,568
13,139
15,039
11,817
57,942
955,629
2,902,172
(2) Other operating incomes recognized are as follows (Unit: Korean Won in millions):
Gains on transaction of foreign exchange
Gains on disposal of loans and receivables
Gains on transactions of derivatives
Gains on fair value hedged items
Others (*)
Total
For the years ended December 31
2014
2013
1,883,808
132,846
84,533
23,318
132,666
2,257,171
2,572,513
115,623
11,486
127,558
279,785
3,106,965
(*) As of December 31, 2014 and 2013, 102,541 million Won and 215,845 million Won that the Group is
to receive from other financial institutions are included in accordance with the agreement of financial
institutions council.
(3) Other operating expenses recognized are as follows (Unit: Korean Won in millions):
Losses on transaction of foreign exchange
KDIC deposit insurance fees
Contribution to miscellaneous funds
Losses on disposal of loans and receivables
Losses related to derivatives
Losses on fair value hedged items
Others (*)
Total
For the years ended December 31
2014
2013
1,902,316
259,140
338,386
30,480
21,091
87,476
292,548
2,931,437
2,439,398
236,845
326,626
22,528
119,776
13,505
74,110
3,232,788
(*) As of December 31, 2014 and 2013, 218,072 million Won and 35,085 million Won which the Group is
to carry out payments to other creditor financial institutions are included in accordance with the creditor
financial institutions committee agreement.
- 76 -
Woori Bank Annual Report 2014
183
41. OTHER NON-OPERATING INCOMES (EXPENSES)
(1) Details of gain or loss on valuation of investments in joint ventures and associates are as follows (Unit:
Korean Won in millions):
Gain on valuation
Loss on valuation
Impairment loss
Total
For the years ended December 31
2014
2013
37,427
(70,008)
(35,399)
(67,980)
30,182
(31,459)
-
(1,277)
(2) Other non-operating incomes and expenses recognized are as follows (Unit: Korean Won in millions):
Other non-operating incomes
Other non-operating expenses
Total
For the years ended December 31
2014
2013
134,355
(129,688)
4,667
145,131
(95,754)
49,377
(3) Other non-operating incomes recognized are as follows (Unit: Korean Won in millions):
Rental fee income
Gains on disposal of investment in joint
ventures and associates
Gains on disposal of premises and equipment
and other assets
Reversal of impairment loss on premises and
equipment and other assets
Others
Total
For the years ended December 31
2014
2013
8,058
31,414
1,398
533
92,952
134,355
6,101
19,974
9,509
46
109,501
145,131
(4) Other non-operating expenses recognized are as follows (Unit: Korean Won in millions):
For the years ended December 31
2014
2013
Depreciation on investment properties
Interest expenses of rent leasehold deposits
Losses on disposal of investment in joint ventures
and associates
Losses on disposal of premises and equipment
and other assets
Impairment losses on premises and equipment
and other assets
Donation
Others
Total
4,016
1,026
1,765
1,709
2,226
52,770
66,176
129,688
3,573
965
4,464
681
1,999
52,345
31,727
95,754
- 77 -
Strength in Our ValueS
184
42.
INCOME TAX EXPENSE
(1)
Income tax expenses are as follows (Unit: Korean Won in millions):
Current tax expense
Current tax expense in respect of the current year
Adjustments recognized in the current period in relation to
the current tax of prior periods
Sub-total
Deferred tax expense
Deferred tax expense (benefit) relating to the origination
and reversal of temporary differences
Deferred tax charged direct to equity
Sub-total
Income tax expense
Income tax expense for continuing operations
Income tax expense for discontinued operations
For the years ended December 31
2014
2013
514,819
(3,750)
511,069
(665,974)
8,923
(657,051)
(145,980)
288,195
(434,175)
170,478
(3,625)
166,853
457,450
(1,647)
455,803
622,656
35,096
587,560
(2)
Income tax expense (benefit) can be reconciled to net income (loss) before income tax expense as follows
(Unit: Korean Won in millions):
Net income (loss) before income tax expense
Income from continuing operations before income tax
Income (loss) from discontinued operations before
income tax
Tax calculated at statutory tax rate (*1)
Adjustments
Effect of income that is exempt from taxation
Effect of expense that is not deductible in determining
taxable profit
Effect from the recognition of loss carry-forward and net
taxable differences due to investments in subsidiaries
and joint ventures that has not been recognized in the
previous periods
Net taxable differences due to investments in
subsidiaries (*2)
Adjustments recognized in the current period in relation
to the current tax of prior periods
Others
Income tax expense (benefit)
Sub-total
Income tax expense for continuing operations
Income tax expense (benefit) for discontinued operations
Effective tax rate
Effective tax rate for continuing operations
Effective tax rate for discontinued operations (*3)
For the years ended December 31
2014
1,061,988
834,395
227,593
256,540
(45,528)
342,057
2013
(90,779)
287,667
(378,446)
(22,432)
(85,051)
57,713
-
669,595
(606,908)
(3,750)
(88,391)
(402,520)
(145,980)
288,195
(434,175)
34.54%
-
-
(3,625)
6,456
645,088
622,656
35,096
587,560
12.2%
-
(*1) Applicable income tax rate; 1) 11% for below 200 million Won, 2) 22% for from 200 million Won to
20 billion Won, 3) 24.2% for above 20 billion Won.
(*2) The impact of decease in the deferred tax liability, which was recognized as at the end of 2013, since
the expected income tax expense derived from the spin-off of Kyongnam Bank and Kwangju Bank was
exempted based on the change of Restriction of Special Tax Act in Korea effective from May 14, 2014.
(*3) The effective tax rate is not produced due to the income tax benefit and net loss before income tax
expense for the year ended December 31, 2014 and 2013, respectively.
- 78 -
Woori Bank Annual Report 2014
185
(3) Deferred tax assets and liabilities are as follows (Unit: Korean Won in millions):
For the year ended December 31, 2014
Beginning
balance
(*)
Merge and
Spin-off
Recognized as
income (loss)
Recognized as
other
comprehensive
income (loss)
Ending
balance
232,727
(76,852)
121,906
(37,264)
(65,697)
(69,615)
10,195
(71,812)
107,498
(99,906)
91,404
38,795
-
(75,228)
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,757)
190,183
-
422,910
(6,293)
(22,411)
(105,556)
(101,725)
975
21,156
(11,174)
(9,397)
10,187
(3,274)
(16,664)
24,898
(35,573)
(6,874)
(1,766)
-
115,766
-
-
-
-
-
19,270
5
-
-
-
(12,426)
(48,438)
(75,094)
(59,428)
6,921
(88,476)
151,666
(135,474)
84,530
37,029
-
24,355
(542,643)
(436,492)
10,376
6,619
508,757
657,051
23,510
8,923
-
236,101
Gain (loss) on financial assets at
FVTPL
Gain (loss) on available-for-sale
financial assets
Gain (loss) on valuation using the
equity method of accounting
Gain (loss) on valuation of
derivatives
Accrued income
Provision for loan losses
Loan and receivables written off
Loan origination costs and fees
Defined benefit liability
Deposits with employee
retirement insurance trust
Provision for guarantee
Other provision
Investments in joint ventures and
associates
Others
Assets as held for sale / Disposal
group held for distribution to
owners
Net deferred tax assets
(*) The beginning balance incorporates the deferred tax assets (liabilities) from subsidiaries that were
reclassified into disposal group held for sale and disposal groups held for distribution to owners.
For the year ended December 31, 2013
Beginning
balance
Recognized
as income
(loss)
Recognized as
other
comprehensive
income (loss)
Classified
into disposal
group held for
sale
Classified
into disposal
group held for
distribution to
owners
Ending
balance
Gain (loss) on financial assets at
FVTPL
238,074
25,061
-
(31,882)
1,474
232,727
Gain (loss) on available-for-sale
financial assets
(112,225)
10,338
Gain (loss) on valuation using the
equity method of accounting
Gain (loss) on valuation of
derivatives
Accrued income
Provision for loan losses
Loan and receivables written off
Loan origination costs and fees
Defined benefit liability
Deposits with employee
retirement insurance trust
Provision for guarantee
Other provision
Investments in joint ventures and
associates
Others
Net deferred tax assets
52,311
86,776
(58,273)
(153,398)
(7,842)
10,612
(73,259)
110,879
(93,912)
80,149
101,329
23,495
3,784
(61,499)
(85)
(23,926)
33,992
(44,330)
15,232
(5,749)
3,201
1,096
93
-
-
-
-
428
895
-
-
45,852
(24,018)
(76,852)
(20,651)
2,374
121,906
(2,721)
22,662
(274)
(332)
16,914
(12,949)
12,554
-
(3,867)
(74,643)
14,755
(34,582)
142
61,255
-
-
8,459
(24,852)
24,887
(3,977)
(52,918)
606,909
(22,510)
577,225
(37,264)
(65,697)
(69,615)
10,195
(71,812)
107,498
(99,906)
91,404
38,795
-
(75,228)
106,151
-
(73,487)
20,958
(508,758)
(10,134)
(455,803)
(23,508)
16,148
(1,647)
- 79 -
Strength in Our ValueS
186
(4) Unrealizable temporary differences are as follows (Unit: Korean Won in millions):
Deductible temporary differences
Unused tax losses
Taxable temporary differences
Total
December 31, 2014 December 31, 2013
120,120
12,562
(10,340,413)
(10,207,731)
174,200
283,523
(3,323,318)
(2,865,595)
(5) Deferred tax charged direct to equity is as follows (Unit: Korean Won in millions):
Loss on available-for-sale financial assets
Share of other comprehensive loss of jointly controlled
entities and associates
Gain on overseas business translation
Remeasurements
Loss on valuation of cash flow hedges
Total
December 31, 2014
(96,421)
December 31, 2013
(162,476)
782
34,424
37,674
-
(23,541)
(3,166)
43,429
25,982
(1,206)
(97,437)
(6) Current tax assets and liabilities are as follows (Unit: Korean Won in millions):
Current tax assets
Current tax liabilities
December 31, 2014
4,845
298,762
December 31, 2013
143,101
9,980
(7) Deferred tax assets and liabilities are as follows (Unit: Korean Won in millions):
Deferred tax assets
Deferred tax liabilities
Net deferred tax assets
43. EARNINGS PER SHARE (“EPS”)
December 31, 2014
257,858
21,757
236,101
December 31, 2013
155,256
49,105
106,151
Basic EPS is calculated by dividing net income by weighted average number of common shares outstanding
(Unit: Korean Won in millions except for EPS and number of shares):
Net income (loss) attributable to common shareholders
Dividends to hybrid securities
Net income (loss) attributable to common shareholders
Net income from continuing operations
Net income (loss) from discontinued operations
Weighted average number of common shares outstanding
Basic Earnings (loss) Per Share
Basic Earnings Per Share for continuing operations
Basic Earnings (loss) Per Share for discontinued operations
For the years ended December 31
2014
2013
1,213,980
(50,129)
1,163,851
385,160
778,691
718 million shares
1,621
536
1,085
(537,688)
(29,399)
(567,087)
132,612
(699,699)
806 million shares
(704)
165
(869)
Diluted EPS is equal to basic EPS because there is no dilution effect for the year ended December 31, 2014
and 2013.
- 80 -
Woori Bank Annual Report 2014
187
44. CONTINGENT LIABILITIES AND COMMITMENTS
(1) Details of guarantees are as follow (Unit: Korean Won in millions):
Confirmed guarantees
Guarantee for loans
Acceptances
Letters of guarantees
Other confirmed guarantees
Total
Unconfirmed guarantees
Local letter of credit
Letter of credit
Other unconfirmed guarantees
Total
CP purchase commitments and others
December 31, 2014
December 31, 2013 (*)
109,213
710,443
126,279
8,328,515
9,274,450
575,919
4,373,378
1,590,332
6,539,629
2,213,840
211,239
876,937
173,292
8,545,335
9,806,803
743,134
5,023,848
1,779,210
7,546,192
5,447,858
(*) Including the amounts related to subsidiaries that are reclassified into disposal group held for sale and
disposal groups held for distribution to owners.
(2) Details of loan commitments and others are as follow (Unit: Korean Won in millions):
Loan commitments
Other commitments
December 31, 2014
89,637,659
4,061,230
December 31, 2013 (*)
90,728,033
3,146,251
(*) Including the amounts related to subsidiaries that are reclassified into disposal group held for sale and
disposal groups held for distribution to owners.
(3) Litigation case
1) The Group had filed lawsuits as follows (Unit: Korean Won in millions except for number of cases):
December 31, 2014
December 31, 2013 (*)
Number of cases
Amount of litigation
Allowance for litigations
As plaintiff
516 cases
827,222
As defendant
298 cases
293,527
16,343
As plaintiff
337 cases
1,346,034
As defendant
475 cases
841,278
206,745
(*) Including the amounts related to subsidiaries that are reclassified into disposal group held for sale and
disposal groups held for distribution to owners.
2) Consumer Dispute Resolution Committee in Korea advised domestic banks that they should return the
mortgage placement cost which the banks had burdened to debtors when originating loans, but the banks,
including Woori Bank, declined such arbitration. In respect of the case, the Group has faced 44 cases of
lawsuits as of December 31, 2014, and it is expected that would follow additional lawsuits in the
foreseeable future. However, the Group has determined that it is not probable that an outflow of
resources due to the lawsuits, therefore it has not provided any provisions.
3) As of December 31, 2014, the Group (Woori Bank), along with other 13 financial institutions including
Seoul Guarantee Insurance, has filed a lawsuit against Samsung Group and its associates as defendant in
respect of the claim of return of guaranteed fund which was related to the filing of court administration
of Renault Samsung Motors. With respect to the lawsuit, on January 29, 2015, the supreme court of
Korea made final judgment that the plaintiff should pay the guaranteed fund to the Group and other
financial institutions. The amount that the Group is to be paid, 132,784 million Won, shall be recognized
as gain in the year ended at December 31, 2015, in accordance with K-IFRS 1037 Provisions, contingent
liabilities and contingent assets.
- 81 -
Strength in Our ValueS
188
45. RELATED PARTY TRANSACTIONS
Related parties of the Group and major transactions with the related parties for the years ended December 31,
2014 and 2013 are as follows:
(1) Related parties
Controlling party
(Government related entity)
Korea deposit insurance
corporation (KDIC)
Woori Renaissance Holdings,
Joint ventures and associates
Woori Blackstone Korea Opportunity Private Equity Fund I.,
Korea Credit Bureau Co., Ltd., Phoenix Digital Tech Co., Ltd.,
Korea Finance Security Co., Ltd.,
Woori Service Networks Co., Ltd., Kumho Tires Co., Ltd.,
United PF 1st Corporate Financial Stability,
Chin Hung International, Inc., Poonglim Co., Ltd.,
Ansang Tech Co., Ltd., Hana Construction Co., Ltd.,
STX Engine Co., Ltd., Samho International Co., Ltd.,
Force TEC Co., Ltd., Woori Columbus 1st Private Equity Fund,
STX Corporation, Osung LST Co., Ltd.
(2) Assets and liabilities from transactions with related parties are as follows (Unit: Korean Won in millions):
Related party
KDIC
Controlling party
(Government related
entity)
Joint ventures
Woori Aviva Life
Insurance Co., Ltd. (*)
Associates
Kumho Tires Co., Ltd.
Korea Credit Bureau
Co., Ltd.
Korea Finance Security
Co., Ltd.
Woori Service Networks
Co., Ltd.
A title of account
Loans
Provision for credit loss
Other assets
Deposits
Other liabilities
Loans
Provision for credit loss
Other assets
Deposits
Other liabilities
Loans
Provision for credit loss
Other assets
Deposits
Other liabilities
Loans
Other assets
Deposits
Other liabilities
Loans
Provision for credit loss
Deposits
Other liabilities
Loans
Provision for credit loss
Deposits
Other liabilities
December 31,
2014
December 31,
2013
314
(108)
691,101
1,157,232
12,252
-
-
-
-
-
334,948
(2,968)
-
80,978
87
2
-
3,215
19
46
(1)
2,738
12
26
(1)
3,169
115
16
(232)
1,214,695
1,259,529
9,093
688
(4)
339
6,834
475
383,117
(37,807)
71,650
58,472
580
2
1,256
4,264
106
59
-
4,070
15
42
-
2,642
71
United PF 1st Corporate
Financial Stability
Deposits
30
38
Woori Blackstone Korea
Opportunity Private
Equity Fund 1st
Other assets
626
32,198
- 82 -
Woori Bank Annual Report 2014
189
Related party
A title of account
Associates
Woori Columbus 1st
Private Equity Fund
Other assets
December 31,
2014
December 31,
2013
589
309
DKT (*)
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.
STX Engine Co., Ltd.
STX Corporation
Osung LST Co. ,Ltd.
Loans
Provision for credit loss
Other assets
Deposits
Other liabilities
Loans
Provision for credit loss
Deposits
Other liabilities
Loans
Provision for credit loss
Other assets
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
Other liabilities
Loans
Provision for credit loss
Deposits
Loans
Provision for credit loss
Other assets
Deposits
Other liabilities
Loans
Provision for credit loss
Deposits
Other liabilities
Loans
Provision for credit loss
Deposits
Other liabilities
-
-
-
-
-
42,929
(12,439)
7,615
11
24,999
(3,123)
1
20,878
12
3,768
(109)
306
6
38
(38)
-
43,251
(8,826)
132,190
205
24,258
(1,551)
139
11
169
(169)
49
163,374
(24,735)
27
3,701
63
182,195
(23,442)
25,823
18
5,639
(561)
5,133
14
55,252
(493)
93
300
10
46,122
(39,767)
1,073
1
36,874
(266)
-
15,508
39
1,213
(72)
495
11
223
(142)
10
52,528
(33,656)
149,685
89
46,483
(27,092)
297
-
169
(169)
903
104,662
(10,944)
-
6,023
114
-
-
-
-
-
-
-
-
(*) Excluded from the related party through disposal or spin-off of subsidiaries during the year ended
December 31, 2014.
- 83 -
Strength in Our ValueS
190
(3) Gain or loss from transactions with related parties are as follows (Unit: Korean Won in millions):
Related party
KDIC
Controlling party
(Government related
entity)
Joint ventures
Woori Aviva Life
Insurance Co., Ltd.
(*)
A title of account
Interest income
Interest expenses
Reversal of provision for
credit loss
Fees income
Other income
Interest expenses
Fees expenses
Other expenses
Reversal of provision for
credit loss
Woori Renaissance
Holdings
Interest expenses
Reversal of provision for
credit loss
Woori New Alpha
Fund (*)
Fees income
Associates
Kumho Tires Co., Ltd.
Korea Finance Security
Co., Ltd.
Interest income
Fees income
Interest expenses
Impairment losses due to
credit loss (Reversal of
provision for credit loss)
Other income
Interest expenses
Fees expenses
Impairment losses due to
credit loss
Korea Credit Bureau
Co., Ltd.
Interest expenses
Fees expenses
Woori Service
Networks Co., Ltd.
Other income
Interest expenses
Fees expenses
Other expenses
Impairment losses due to
credit loss (Reversal of
provision for credit loss)
United PF 1st
Corporate Financial
Stability
Interest expenses
Woori Blackstone
Korea Opportunity
Private Equity Fund
1st
Fees income
Other income
Other expenses
Woori Columbus 1st
Private Equity Fund
Fees income
DKT (*)
Interest income
Other income
Interest expenses
Reversal of provision for
credit loss
- 84 -
For the years ended
December 31
2014
26,577
17,920
(124)
-
-
-
-
-
-
-
-
-
732
6
218
2013
41,521
14,801
(65)
2,396
3,376
43
56
163
(5)
2
(144)
605
1,008
6
408
(33,020)
1,969
-
53
42
3
72
1,784
27
95
610
262
2
-
2,527
-
-
589
-
-
-
-
55
99
-
-
117
-
29
69
-
282
(1)
34
4,098
9,111
996
-
1,521
3,082
64
(123)
Woori Bank Annual Report 2014
191
Related party
A title of account
Associates
Chin Hung
International Inc.
Poonglim Industrial
Co., Ltd.
Phoenix Digital Tech
Co., Ltd.
Ansang Tech Co., Ltd.
Samho International
Co., Ltd.
Force TEC C Co., Ltd.
Fees income
Interest expenses
Impairment losses due to
credit loss (Reversal of
provision for credit loss)
Interest expenses
Impairment losses due to
credit loss (Reversal of
provision for credit loss)
Interest expenses
Impairment losses due to
credit loss (Reversal of
provision for credit loss)
Impairment losses due to
credit loss (Reversal of
provision for credit loss)
Fees income
Interest expenses
Reversal of provision for
credit loss
Interest expenses
Impairment losses due to
credit loss (Reversal of
provision for credit loss)
Hana Engineering &
Reversal of provision for
Construction Co., Ltd.
credit loss
STX Engine Co., Ltd.
STX Corporation
Osung LST Co. ,Ltd.
Interest income
Fees income
Interest expenses
Impairment losses due to
credit loss
Interest expenses
Reversal of provision for
credit loss
Interest income
Interest expenses
Reversal of provision for
credit loss
For the years ended
December 31
2014
2013
1
31
1
98
(27,328)
9,324
22
75
2,857
12
37
(104)
5
1,270
(150)
11
(224)
142
-
747
(24,793)
(10,268)
3
2
(25,532)
26,273
-
308
81
48
(158)
-
-
49
13,787
9,946
6
(146,680)
113
31
(4,819)
-
-
-
-
-
(*) Excluded from the related party through disposal or spin-off of subsidiaries during the year ended
December 31, 2014.
- 85 -
Strength in Our ValueS
192
(4) Guarantees provided to the related parties are as follows (Unit: Korean Won in millions):
KDIC
Kumho Tires Co., Inc.
1,500,386
-
2,000,684 Loan commitment
208 Loan commitment in foreign
December 31, 2014 December 31, 2013
Korea Finance Security Co., Ltd.
Korea Credit Bureau Co., Ltd.
Woori Service Networks Co., Ltd.
Chin Hung International Inc.
DKT Co., Ltd. (*)
Woori Blackstone Korea
Opportunity Private Equity Fund I
Phoenix Digital Tech Co., Ltd.
STX Engine Co., Ltd
SamHo Co., Ltd.
Force TEC Co., Ltd.
STX corporation
18,110
-
-
88,638
214
33
179
40,630
-
-
-
-
261
81,431
4,600
2,360
27,299
6,325
30,062
13,009
currency
18,255 Letter of credit
128 Endorsed notes
16,739 Commitments on loss sharing
113,453 Loan commitment
51 Loan commitment
33 Loan commitment
158 Loan commitment
40,630 Loan commitment
17,920 Loan commitment
5,662 Derivative commitment
15,565 Securities purchase contract
10,000 Contribution commitment
3,797 Loan commitment
21,213 Letter of credit
38,757 Loan commitment
1,930 Letter of credit
- Loan commitment
- Loan commitment
- Letter of credit and others
- Loan commitment
(*) Excluded from the related party through disposal or spin-off of subsidiaries during the year ended
December 31, 2014.
(5) Compensation for key management is as follows (Unit: Korean Won in millions):
Short term benefits
Severance payments
Total
For the years ended December 31
2013 (*)
2014
11,542
464
12,006
24,378
1,627
26,005
(*) As the scope of the compensation for key management disclosure has changed, the comparative
amounts are restated.
- 86 -
Woori Bank Annual Report 2014
193
46. TRUST ACCOUNTS
(1) Trust accounts of the Group are as follows (Unit: Korean Won in millions):
Total assets
Operating income
Trust accounts
December 31,
2014
31,225,968
December 31,
2013
52,811,488
For the year ended
December 31, 2014
For the year ended
December 31, 2013
1,457,407
751,425
(2) Receivables and payables from the transactions between the Group and trust accounts are as follows (Unit:
Korean Won in millions):
Receivables
Trust fees receivables
Payables
Borrowings from trust accounts
Accrued interest expenses on
borrowings from trust accounts
Total
December 31, 2014
December 31, 2013
17,956
2,949,097
-
2,949,097
27,120
3,233,699
303
3,234,002
(3) Significant transactions between the Group and trust accounts are as follows (Unit: Korean Won in
millions):
Revenue
Trust fees
Intermediate termination fees
Total
Expense
Interest expenses on borrowings
from trust accounts
For the years ended December 31
2014
2013
41,829
-
41,829
50,847
1,603
52,450
78,114
97,748
(4) Principal guaranteed trusts and principal and fixed rate of return guaranteed trusts.
1) The carrying value of principal guaranteed trusts and principal and fixed rate of return guaranteed trusts
are as follows (Unit: Korean Won in millions):
December 31, 2014
December 31, 2013
Principal guaranteed trusts
Old-age pension trusts
Personal pension trusts
Pension trusts
Retirement trusts
New personal pension trusts
New old-age pension trusts
Sub-total
Principal and fixed rate of return
guaranteed trusts
Development trusts
Unspecified money trusts
Sub-total
Total
5,619
528,680
640,275
75,847
8,897
3,859
1,263,177
19
857
876
1,264,053
6,815
565,665
624,538
86,477
10,624
5,360
1,299,479
19
879
898
1,300,377
- 87 -
Strength in Our ValueS
194
2) As of December 31, 2014 and 2013, the amounts that the Group has to pay by the capital guaranteed
contract or the operating results of the principal and return guaranteed trusts are as follows (Unit:
Korean Won in millions):
Liabilities for the account (subsidy
for trust account adjustment)
December 31, 2014
December 31, 2013
15
11
47. DISPOSAL GROUP HELD FOR SALE AND NET INCOME (LOSS) FROM DISCONTINUED
OPERATIONS
(1) Summary
In accordance with Public Funds Oversight Committee’s plan of the privatization of Woori Finance Holdings
Co., Ltd. on June 26, 2013, the Group reclassified 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 the related gains
or losses as net income (loss) from discontinued operations as at the end of 2013.
(2) As of December 31, 2013, details of assets and liabilities classified as disposal group asset held for sale are
as follows (Unit: Korean Won in millions):
December 31, 2013
Disposal group held for sale
Cash and cash equivalents
Financial assets at FVTPL
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
Current tax assets
Deferred tax assets
Derivative assets
Others
Total
Liabilities directly associated with Disposal group held for sale
Financial liabilities at FVTPL
Deposits due to customers
Borrowings
Debentures
Provisions
Provision for retirement
Current tax liabilities
Deferred tax liabilities
Derivative liabilities
Other financial liabilities
Other liabilities
Total
303,202
21,102,011
1,103,146
3,025
11,738,411
120,805
1,329
15,855
33,178
17,111
102,843
11,279
132,610
34,684,805
10,028,166
1,988,495
13,502,487
4,045,486
17,565
7,829
8,151
68,261
2,257
2,310,746
68,183
32,047,626
At the end of 2013, the Group measured fair value of the disposal group held for sale based on market approach
reflecting current market values of the businesses. Total net fair value was the amount that final bid price less
incidental cost for disposal, which was amounting to 3,311,175 million Won, was classified into level 1 in the
fair value hierarchy.
- 88 -
Woori Bank Annual Report 2014
195
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.
(3) Details of discontinued operations are as follows (Unit: Korean Won in millions):
For the years ended December 31
2014
2013
I.
Operating income
Net interest income
Interest income
Interest expense
Net fees and commissions income
Fees and commissions income
Fees and commissions expense
Dividend income
Net loss on financial instruments at fair value
through profit or loss
Net loss on available-for-sale financial assets
Impairment losses on credit loss
Other net operating expenses
II. Non-operating loss
Share of profits of joint ventures and associates
Other non-operating expenses
III. Net income before income tax expense
Income tax expense
IV.
Sub-total
V.
VI.
Impairment of assets held for sale
VII. Income tax benefit for Impairment
VIII. Gain on disposal of disposal group held for sale
IX.
X.
Income tax expense related to the gain on disposal
Income from discontinued operations
17,616
237,230
391,618
(154,388)
117,373
152,184
(34,811)
24,720
(32,104)
(19,146)
(23,753)
(286,704)
(3,120)
616
(3,736)
14,496
(117,878)
(103,382)
(7,469)
2,020
113,012
(26,667)
(22,486)
183,197
637,523
1,190,183
(552,660)
354,954
439,125
(84,171)
26,789
(114,652)
(262)
(147,924)
(573,231)
(34,213)
19,520
(53,733)
148,984
(150,633)
(1,649)
(793,108)
191,970
-
-
(602,787)
(4) Details of cash flows in 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 years ended December 31
2013
2014
326,023
(258,244)
143,289
(3,978,948)
105,717
3,906,802
- 89 -
Strength in Our ValueS
196
(5) During the year ended December 31, 2014, the Group disposed Woori Investment and Securities, Woori
Financial, Woori F&I, Woori Asset Management, Woori Aviva Life Insurance, and Woori Savings Bank
during the current year. The book values of net assets disposed are as follows (Unit: Korean Won in
millions):
Assets:
Cash and cash equivalents
Financial assets at FVTPL
Available-for-sale financial assets
Held-to-maturity financial assets
Loans and receivables
Investments in joint ventures and associates
Other assets
Total
Liabilities:
Financial liabilities at FVTPL
Deposits due to customers
Borrowings
Debentures
Other financial liabilities
Other liabilities
Total
Net-asset
Non-controlling interests
Gain on disposal of disposal group held-for-sale
Total amount of cash consideration
Cash and cash equivalents of the subsidiaries disposed
Net cash flow due to the disposal of the subsidiaries
Book Value
560,034
21,838,589
1,588,066
3,032
14,244,435
127,606
774,759
39,136,521
12,767,119
2,011,292
13,346,342
4,031,716
3,169,551
182,109
35,508,129
3,628,392
1,987,786
113,012
1,753,618
(560,034)
1,193,584
48. DISPOSAL GROUP HELD FOR DISTRIBUTION TO OWNERS AND NET INCOME (LOSS)
FROM DISCONTINUED OPERATIONS
(1) Summary
In accordance with Public Funds Oversight Committee’s plan of the privatization of Woori Finance Holdings
Co., Ltd. on June 26, 2013, the Board of Directors of the Woori Finance Holdings Co., Ltd. approved the plan of
demerger of Kyongnam Bank Co., Ltd. and Kwangju Bank Co., Ltd. on August 27, 2013. The demerger was to
take place through distributing of the shares of newly established holding companies, which were receiving the
shares in Kyongnam Bank Co., Ltd. and Kwangju Bank Co., Ltd., to the shareholders of the Woori Finance
Holdings. Therefore, the Group classified the related assets and liabilities of Kyongnam Bank Co., Ltd. and
Kwangju Bank Co., Ltd. into disposal group held for distribution to owners presented the related gains or losses
as net income (loss) from discontinued operations as at the end of 2013. On May 1, 2014, Kyongnam Bank and
Kwangju Bank were demerged in accordance with the plan.
- 90 -
Woori Bank Annual Report 2014
197
(2) As of December 31, 2013, details of assets and liabilities classified as disposal group held for distribution
to owners are as follows (Unit: Korean Won in millions)
December 31, 2013
Disposal group held for distribution to owners
Cash and cash equivalents
Financial assets at FVTPL
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
Current tax assets
Deferred tax assets
Other assets
Total
Liabilities directly associated with disposal group held for
distribution to owners
Financial liabilities at FVTPL
Deposits due to customers
Borrowings
Debentures
Provisions
Provision for retirement
Deferred tax liabilities
Derivative liabilities
Other financial liabilities
Other liabilities
Total
691,608
654,965
3,257,957
4,124,083
41,057,781
28,286
48,566
299,828
32,828
573
40,540
75,278
50,312,293
31,962
36,603,292
4,860,597
2,515,965
233,831
88,854
617,764
15,920
1,859,151
55,078
46,882,414
The Group measured disposal group held for distribution to owners at the lower of the its carrying value and fair
value less costs for distribution. In addition, the fair value of the disposal group held for distribution to owners
was measured based on both of market approach and income approach.
Fair value less cost to distribute of disposal group held for distribution to owners is amounting to 3,286,389
million Won and classified into level 3 due to the valuation technique(s) used when measuring the fair value and
the inputs used in the valuation technique that were not observable in the market. The impairment loss on
disposal group held for distribution to owners is recognized 40,658 million Won within the net income (loss)
from the discontinued operations for the year ended December 31, 2013.
A description of valuation techniques used for fair value measurement of disposal group held for distribution to
owners and significant unobservable input variables are as follows.
The Group considered both of market approach and income approach for the measurement of the fair value of
Kyongnam Bank Co., Ltd. and Kwangju Bank Co., Ltd. which were classified to disposal group held for
distribution to owners. Under the income approach, the discount cash flow method was applied and the present
value of projected cash flows for next 5 years and further periods, which were prepared based on the
assumptions incorporating the expected long-term growth rate for banking industry and inflation rates, was
calculated by applying the discount rates which represented the appropriate costs of capital for Kyongnam Bank
Co., Ltd. and Kwangju Bank Co., Ltd.. Meanwhile, under market approach, the market multiples that were
reflecting the market values of companies similar to Kyongnam Bank Co., Ltd. and Kwangju Bank Co., Ltd.
were considered (Comparable companies analysis). To measure the fair value of Kyongnam Bank Co., Ltd. and
Kwangju Bank Co., Ltd. the both methods were used comprehensively.
- 91 -
Strength in Our ValueS
198
The key assumptions used under the income approach are given as follows:
Projected period of cash flow (*1)
Perpetual growth rate
Discount rate (*2)
Kwangju Bank
5 years
2.5%
12.1%
Kyongnam Bank
5 years
2.5%
12.1%
(*1) The cash flow projections for Kyongnam Bank Co., Ltd. and Kwangju Bank Co., Ltd. are based on
various factors, such as historical financial information, market outlooks, long-term market growth rate,
interest rates, and inflation rates, also incorporating management’s latest budget and future operating
plans.
(*2) The discount rates used to discount the cash flows is based on the cost of capital assigned to Kyongnam
Bank Co., Ltd. and Kwangju Bank Co., Ltd. which are derived using a Capital Asset Pricing Model
(“CAPM”). The CAPM depends on inputs, such as risk-free rate and market risk premium to reflect the
inherent systematic risk of the business being evaluated.
(3) Details of discontinued operations are as follows (Unit: Korean Won in millions):
I.
Operating income
Net interest income
Interest income
Interest expense
Net fees and commissions income
Fees and commissions income
Fees and commissions expense
Dividend income
Net gain on financial instruments at fair value
through profit or loss
Net loss on available-for-sale financial assets
Impairment losses on credit loss
Other net operating expenses
II. Non-operating loss
Share of profits of joint ventures and associates
Other non-operating expenses
III. Net income before income tax expense
Income tax expense
IV.
Sub-total
V.
VI.
Impairment of assets held for sale
VII. Income tax benefit for Impairment
VIII. Income from discontinued operations
For the years ended December 31
2014
2013
108,896
348,396
683,075
(334,679)
53,182
77,030
(23,848)
13,595
22,119
(5,569)
(81,459)
(241,368)
(1,342)
-
(1,342)
107,554
576,701
684,255
-
-
684,255
320,297
1,085,595
2,154,318
(1,068,723)
150,739
225,422
(74,683)
37,064
93,595
(10,225)
(281,205)
(755,266)
(13,961)
2,274
(16,235)
306,336
(638,736)
(332,400)
(40,658)
9,839
(363,219)
(4) Details of cash flows in 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 years ended December 31
2014
2013
457,097
300,385
(754,823)
703,794
(160,948)
(760,591)
- 92 -
Woori Bank Annual Report 2014
199
(5) During the year ended December 31, 2014, the spin-off of Kyongnam Bank and Kwangju Bank was
completed, and the book values of net assets that were transferred due to the spin-off are as follows (Unit:
Korean Won in millions):
Assets:
Cash and cash equivalents
Financial assets at FVTPL
Available-for-sale financial assets
Held-to-maturity financial assets
Loans and receivables
Other assets
Total
Liabilities:
Financial liabilities at FVTPL
Deposits due to customers
Borrowings
Debentures
Provisions
Other liabilities
Total
Book value of Net assets
Changes due to the Spin-off
Controlling interests
Non-controlling interests
Book Value
792,949
835,053
3,140,294
3,968,947
41,459,234
583,663
50,780,140
34,645
38,152,435
4,628,746
2,078,716
183,096
2,350,516
47,428,154
3,351,986
3,065,422
286,564
49. PROMOTING PRIVATIZATION PLAN
Pursuant to the privatization plan of Woori Finance Holdings Co., Ltd., which was decided at the Public Fund
Oversight Committee (the “PFOC”) on June 26, 2013, the Group has disposed its subsidiaries. Kwangju Bank
and Kyongnam Bank were demerged as of May 1, 2014, and from March 2014 to June 2014, Woori Investment
& Securities, Woori Aviva Life Insurance, Woori Savings Bank, Woori Asset Management, Woori Financial and
Woori F&I were disposed in due order.
In respect of the final phase of the privatization which is with respect to the privatization of Woori Bank, PFOC
announced the plan that comprised the merger between Woori Finance Holdings Co., Ltd and Woori Bank and
the respective disposal of controlling interests (30% of ownership) and non-controlling interests (26.97% of
ownership) of Woori Bank after listing of its shares on the stock exchange newly. Pursuant to the plan, the Bank
merged with the Holding Company as of November 1, 2014, and completed its listing on Korean Stock
Exchange on November 19, 2014.
On November 28, 2014, KDIC commenced the auction procedure for the disposal of controlling interests and
non-controlling interests of the Bank. There was successful bid only for the non-controlling interests,
consequently KDIC’s ownership of the Bank decreased from 56.97% to 51.04%. It is expected that PFOC will
be announcing the amended privatization plan for Woori Bank in future.
- 93 -
Strength in Our ValueS
200
50. AGREEMENT ON THE IMPLEMENTATION OF A MANAGEMENT PLAN
(1) Since December 30, 2000, the Bank and the KDIC have entered into an agreement to implement
management plans. Under the agreements, the Bank is obligated to improve its respective financial ratios,
such as Bank of International Settlements (“BIS”) capital ratio, general and administrative ratio, non-
performing loan rate and adjusted operating income per person. If the Bank fails to make improvements,
the KDIC can enforce the Bank to increase or decrease its capital, pursue mergers, transfer of loans and
deposits, or close or sell parts of its business operations.
(2) In addition, on July 2, 2001, in order to establish efficient integrated structure of the Bank, the Bank and the
KDIC have entered into an agreement to implement management plans, which incorporate establishment of
corporate governance and business management system, improvement of short-term operational
performance, strengthening the Bank’s competitiveness and pursuance of privatization plan, meeting the
financial ratio objectives, and penalties in case the Bank not meeting such management plans.
51. BUSINESS COMBINATION
The major business acquisitions have occurred during the year ended at December 31, 2014, are as follows:
1) Merger between Woori Finance Holdings and the Bank
On November 1, 2014, the Bank (acquirer) merged with Woori Finance Holdings (acquiree) based on the
resolution of the board of directors on July 28, 2014, and the Bank became the existing entity and Woori
Finance Holdings was dissolved. The merger ratio was 1:1.0000000, and the shareholders of Woori
Finance Holdings received one common share of the Bank per one common share of the company as
compensation.
Accordingly, the shares of the Bank, 597 million shares, prior to the merger, was reduced to nil in
accordance with capital reduction procedure, and then, in accordance with the merger ratio, the Bank newly
issued 676 million shares.
Since the merger meets the definition of ‘business combination under common control’, the Bank
recognized the transferred assets and liabilities of Woori Finance Holdings at the book values as previously
recognized on the consolidated financial statements, and did not recognize any goodwill.
Details of the merger are described as follows:
Type
Companies involved in merger
New shares acquired due to merger
Schedule
Merger
Woori Bank (existing entity)
Woori Finance Holdings Co., Ltd. (non-existing entity)
676,278,371 shares of common stock
Date of merger:
Date of registration of merger:
Date for distribution of stocks :
Date for listing of stocks :
November 1, 2014
November 3, 2014
November 18, 2014
November 19, 2014
2) Acquisition of Saudara Bank
On December 30, 2014, Indonesia Woori Bank, which was a consolidated subsidiary of the Bank, merged
with Saudara Bank in accordance with the resolution of the shareholders’ meeting on November 7, 2014,
and the bank changed its name into Indonesia Woori Saudara Bank.
i. Summary of the acquiree
The Group acquired 33% ownership of Saudara Bank, which was a listed company in Indonesia, on
January 28, 2014. Through the merger between Indonesia Woori Bank and Saudara Bank on December 30,
2014, the Group consolidated the bank and the ownership ratio after the merger became 74%. From the
legal perspective, Saudara Bank was deemed as the existing entity; however, the transaction was accounted
- 94 -
Woori Bank Annual Report 2014
201
using the acquisition method under K-IFRS 1103 Business Combination as it was deemed that Indonesia
Woori Bank was the acquirer from the accounting perspective.
The Group promoted such transaction for the purpose of enhancing its retail operation in Indonesia.
ii. Merger ratio
Entity
Merger ratio
Acquirer
Indonesia Woori Bank
1
Acquiree
Saudara Bank
1,702,921.2
iii. Acquisition method (Unit: Korean Won in million)
I. Consideration
Fair value of the ownership interest held prior to
the acquisition (*1)
Fair value of additional consideration given (*2)
Fair value of non-controlling interest of Woori Indonesia Bank
Total amount of consideration
II. Identifiable assets and liabilities
Cash and Cash equivalents
Available for sale financial assets
Financial assets held to maturity
Loan and receivables
Property and equipment
Intangible assets
Other assets
Sub-total
Deposits
Borrowings
Debentures
Deferred tax liabilities
Other liabilities
Sub-total
Fair value of identifiable net asset
III. Non-controlling interest of Saudara Bank
IV.Goodwill(*3)
Amount
65,667
38,551
52,609
156,827
81,100
22,074
15,473
639,222
23,882
25,719
34,238
841,708
714,989
12,082
29,425
3,757
12,872
773,125
68,583
17,816
106,060
(*1) Right before the business combination, the 33% ownership interest in Saudara Bank, which was held
by the Bank and Indonesia Woori Bank, was remeasured at its fair value on December 30, 2014. The
Group recognized loss on disposal of investment in associate, amounted to 1,237 million Won, as a
result.
(*2) The Bank acquired additional shares of Saudara Bank, 373,954,147 shares, due to the claims for stock
repurchase from the shareholders of the bank who was opposing to the merger.
(*3) Goodwill was recognized on the rationale that the competitiveness of the Group will be reinforced
through the acquisition of local operation network in Indonesia.
iv. Expenses from acquisition
The Group recognized the expenses amounting to 1,446 million Won, such as legal fee, which occurred in
conjunction with the business combination as fees and commissions expense on the consolidated statements
of comprehensive income.
- 95 -
Strength in Our ValueS
202
Woori Bank annual Report 2014
Organization chart
10 Units 10 Divisions 56 Departments (as of Dec.8, 2014)
cuStoMer
SaleS center
Branch
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
ManageMent
DIvIsIon
InvestMent
InvestMent
BankIng
BankIng
DIvIsIon
DIvIsIon
FInanCIal
Market
BusIness
DIvIsIon
Int’l
traDe
BusIness
DIvIsIon
sMart
BankIng
BusIness
DIvIsIon
Consumer
Banking
Products &
Marketing
Dept.
Wealth
Management
strategy
Dept.
Corporate
Banking
Products &
Marketing
Dept.
Investment
Banking Dept.
small & Medium
Corporate
Banking Products
& Marketing
Dept.
Institutional
Banking
Products &
Marketing
Dept.
real estate
Finance Dept.
International
Banking Dept.
treasury Dept.
Int’l trade
Business Dept.
smart Banking
Business Dept.
sales
support
Dept.
Customer
advisory
Center
Project Finance
Dept.
Public Fund
sales Dept.
Housing Fund
Dept.
trading Dept.
Int’l trade
service Center
Fintech
Business Dept.
Channel
Development
Dept.
smart
Customer
Center
settlement
support Dept.
ICt support
Center
ManageMent Support unit
Deputy preSiDent/Director
strategy Business Dept.
Investor relation Dept.
secretary Dept.
preSiDent & chief
executive officer
BoarD of DirectorS
cuStoMer
corporate Banking center
stRength in ouR Values
203
FInanCe&
ManageMent
PlannIng
unIt
HuMan
resourCes
unIt
rIsk
Manage-
Ment
unIt
CreDIt
suPPort
unIt
PensIon
& trust
BusIness
DIvIsIon
MarketIng
suPPort
DIvIsIon
CorPorate
restruCtur-
Ing DIvIsIon
oPeratIon
& suPPort
DIvIsIon
CustoMer
InForMatIon
seCurIty
DIvIsIon
trust Dept.
synergy
Promotion
Dept.
strategy &
Control tower
Dept.
Human
resources
Dept.
risk
Management
Dept.
loan Policy
Dept.
Corporate
restoration
Dept.
general
affairs Dept.
Customer Infor-
mation security
Dept.
Public relations
Dept.
Consumer
Protection
Center
retirement
Pension Business
Dept.
Card Business
Dept.
Finance &
Planning
Dept.
Human
resources
Development
Dept.
loan review
Dept.
Custody agent
Dept.
accounting
Dept.
employee
satisfaction
Center
coMpliance officer
Compliance Dept.
BoarD auDit coMMittee
Corporate
restructuring
Dept.
loan
service Center
Deposit
service Center
security
Control Dept.
retail Credit
analysis &
approval
Dept.
sMe Credit
analysis &
approval
Dept.
large Corporate
Credit analysis &
approval Dept.
Credit
Management &
Collection Dept.
technology
Finance Center
StanDing auDit
coMMittee MeMBer
audit Dept.
204
Woori Bank annual Report 2014
Global network
Head OFFice
51, sogong-ro (203, hoehyeon-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, la, ca90019, 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, hongkong
Phone: 85-2-2521-8016
Fax: 85-2-2526-7458
·
·
singapore Br.
10 Marina Boulevard #13-05 MBFc tower 2, singapore
018983 singapore
Phone: 65-6422-2000
Fax: 65-6422-2001
·
·
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.
24F, Keangnam landmark 72, e6 Pham hung Road, tu
liem District. hanoi, Vietnam
Phone: 84-4-3831-5281
Fax: 84-4-3831-5271
·
·
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
·
·
•
DEPZ Customer Service Center
Dhaka export Processing Zone(old area), ganakbari,
ssvar, Dhaka-1349, Bangladesh
Phone: 880-2778-8030
Fax: 880-2881-3274/3241
·
·
•
Woori Bank Chittangong Sub-Branch
World trade center chittagon(2nd Floor) Plopt no.
102-103, agrabad commercial area, chittagong,
Bangladesh
Phone: 880-931-728221~4
Fax: 880-931-728225
·
·
•
Woori Bank Mirpur Sub-Branch
Padma Bhaban(First Floor), 1/9 Mirpur Road Pallabi,
Mirpur-12, Dhaka-1216, Bangladesh
Phone: 880-2902-1061~2
Fax: 880-2902-1064
·
·
•
Woori Bank, Narayanganj Sub-Branch
adamjee export Processing zone, shiddhirganj,
narayanganj-1431 Bangladesh
Phone: 880-2769-2031~34
Fax: 880-2769-2035
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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
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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
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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
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sydney Br.
suite 25.03, level 25, 363 george street sydney nsW
2000 australia
Phone: 61-2-8222-2200
Fax: 61-2-8222-2299
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woori Bank dubai Br.
1102a, level 11, the gate Building, east Wing, P.o. Box
506760, DiFc, Dubai, united arab emirates
Phone: 971- 4-325-8365
Fax: 971-4-325-8366
swift: hVBKaeaDXXX
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suBsidiaRY
u.s.a
woori america Bank
1250 Broadway newyork, ny 10001, usa
Phone: 1-212-244-3000
Fax: 1-212-736-5929
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woori america Bank, Broadway Br.
1250 Broadway newyork, ny 10001, usa
Phone: 1-212-244-1500
Fax: 1-212-736-5929
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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
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woori america Bank, Fort lee Br.
2053 lemoine avenue Fort lee, nJ 07024, usa
Phone: 1-201-363-9300
Fax: 1-201-302-0452
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woori america Bank, woodside Br.
43-22 50th st. Woodside, ny 11377, usa
Phone: 1-718-429-1900
Fax: 1-718-429-2084
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woori america Bank, Ridgefield Br.
321 Broad avenue #104 Ridgefield, nJ 07657, usa
•
Woori Bank Uttara Sub-Branch
Paradise tower(ground Floor) Plot 11, sector 3, uttara
Model town,uttara, Dhaka 1230, Bangladesh
Phone: 1-201-941-9999
Fax: 1-201-941-4419
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Phone: 880-2896-2125~6
Fax: 880-2896-2129
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woori america Bank, Palisades Park Br.
225 Broad avenue Palisades Park, nJ 07650, usa
Phone: 1-201-346-0055
Fax: 1-201-346-0075
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woori america Bank, closter Br.
234 closter Dock Road closter, nJ 07624, usa
Phone: 1-201-784-7012
Fax: 1-201-784-7013
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woori america Bank, elkins Park Br.
7300 old york Rd elkins Park, Pa 19027
Phone: 1-215-782-1100
Fax: 1-215-782-1500
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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
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woori america Bank, Bayside Br.
215-10 northern Blvd. Bayside, ny 11361, usa
Phone: 1-718-224-3800
Fax: 1-718-224-3828
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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
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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
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woori america Bank, Olympic Br.
3360, West olympic Blvd. suite #300, la,
ca 90019, usa
Phone: 1-213-738-1100
Fax: 1-213-738-1101
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woori america Bank, Fullerton Br.
5731 Beach Blvd., Buena Park, ca 90621, usa
Phone: 1-714-521-3100
Fax: 1-714-521-3101
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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
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woori america Bank, centreville Br.
13830 a-12 Braddock Road. centreville, Va 20121, usa
Phone: 1-703-988-9555
Fax: 1-703-988-9554
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woori america Bank, irvine Br.
14252 culver Dr. #g, irvine, ca 92604
Phone: 1-949-885-3760
Fax: 1-949-653-0943
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cHina
woori Bank (china) ltd.
26F, 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
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woori Bank (china) ltd. Head office business
department
1F~2F, 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
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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
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woori Bank (china) ltd. shanghai Br.
Drum Building 1-2F, lJZ -Plaza,1600 century avenue,
Pudong new area, shanghai, 200122, china
woori Bank (china) ltd. weihai Br.
no.106-1~3, attached Qingdao Mid-Road, Weihai,
shandong Province, china, 264200
Phone: 86-21-5081-0707
Fax: 86-21-5081-2484
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Phone: 86-31-599-6000
Fax: 86-31-597-0030
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woori Bank (china) ltd. shenzhen Br.
B0105, B0210 Rongchao landmark, 4028 Jintian Road,
Futian District, shenzhen, 518035 china
woori Bank (china)ltd.Tianjin dongmalu sub-Br
1-2F, tower c, yuding Plaza(Qixiang street), Dongma
Road, nankai District, tianjin, 300090, china
Phone: 86-755-3338-1234
Fax: 86-755-3338-7227
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Phone: 86-22-8776-9000
Fax: 86-22-8776-9901~2
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woori Bank (china) ltd. suzhou Br.
101B, sovereign Building, #8 suhua Road suzhou
industrial Park, Jiangsu, 215021 china
wooriBank(china)ltd. chongqing Br.
unitl, Floor l2-1, Ping an Fortune center, no. 25-2, West
Main street, Jiangbei District, chongqing 400023, china
Phone: 86-512-6295-0777
Fax: 86-512-6295-2141
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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
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woori Bank (china) ltd. shanghai Puxi sub-Br.
s115-s119, 1F Maxdo center no.8 Xingyi Rd. changning
District shanghai, 200336, china
Phone: 86-21-5208-1000
Fax: 86-21-6235-1036
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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
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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
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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
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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
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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
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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
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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
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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
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Phone: 86-23-6152-2222
Fax: 86-23-6152-2220
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indOnesia
PT Bank woori saudara indonesia 1906 Tbk
Jl. Diponegoro no 28, Bandung 40115, indonesia
Phone: 86-22-8783-1906
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Jakarta coporate Business center
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
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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
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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
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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
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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
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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
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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
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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
swift: hVBKiDJa
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stRength in ouR Values
205
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
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Russia
Zao woori Bank
8th floor, lotte Plaza, 8, novinsky Boulevard, Moscow,
121099, Russia
Phone: 7-495-783-9787
Fax: 7-495-783-9788
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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
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Zao Woori Bank vladivostok Representative
Office
Vladivostok Business-center office no. 614,
29, semenovskaya str. Vladivostok, 690091, Russia
Phone: 7-423-240-7014
Fax: 7-423-240-7015
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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
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caMBOdia
woori Finance cambodia Plc.
Building no. 119B, street271, sangkat Phsar Doem thkov
Khan chamkarmon, Phnom Penh.
Phone: 855-23-999-661
Fax: 855-23-999-663
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Russey Keo Branch
house no 1a, national Road 5, sangkat Kilomet lek6
Khan Russey Keo, Phnom Penh.
Phone: 855-23-999-664
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Pursenchey Branch
house no 6a, Russian Blvd, tangoun Village, sangkat
Kakb, Khan Pursenchey, Phnom Penh.
Phone: 855-23-999-803
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Kean svay Branch
house no. 330, national Road 1, toul tuaut village,
Korkey communce, kean svay district, Kandal province
Phone: 855-23-720-632
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Takhmao Branch
Building no. 31, street2, takhmao village, takhmao
commune, takhmao District, Kandal Province,
cambodia
Phone: 855-24-998-333
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OveRseas OFFice
MalaYsia
woori Bank Kuala lumpur Representative Office
unit 4129/4130, 41/F, Vista tower, the intermark 182
Jalan tun Razak, Kuala lumpur 50400, Malaysia
Phone: 60-3-2163-8288
Fax: 60-3-2163-9288
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uae
woori Bank Yangon, Myanmar Office
no. 0307, 3rd Floor, sakura tower, 339 Bogyoke aung
sand Road, Kyauktada township, yangon Myanmar
Phone: 95-94-2530-9391
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StANDiNG StroNG toGEtHEr
CoNtACt iNForMAtioN
Directed by
Eun Kyung(Christine) KIM,
Manager(IR Team) Investor Relations Team,
Financial Planning Dept.
Tel: 82-2-2002-3186
ekk@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
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51, Sogong-ro (203, Hoehyeon-dong 1-ga), Jung-gu, Seoul, 100-792, Korea Tel. +82-2-2002-3000 www.wooribank.com