WOORI BANK ANNUAL REPORT 2016
TURNING POSSIBILITY
INTO REALITY
Woori Bank is shaping the future of Korea’s financial industry as a leading global bank that grows alongside
customers in the global market through its continued innovation drive. In step with the rapidly changing
market environment, Woori Bank is lowering boundaries within the financial sector to offer unprecedented
and innovative financial services to our clients through cross-selling and bundled marketing. While
anticipating customer needs ahead of time, we stay one step ahead in our constant efforts to turn possibility
into reality. With the wings provided by our privatization, Woori Bank is now set to take the next step on its
successful journey.
In 2016, Woori Bank turned
possibilities into reality
The launch of our advanced mobile banking platform impressed
customers and generated a positive response in the market.
We then took the first steps into untapped global markets
ahead of our competitors. These moves resulted in outstanding
financial performance and improved fundamentals, bringing
about our long-cherished wish for privatization.
Woori Bank is shaping the future of Korea’s financial industry as a leading global bank that grows alongside
customers in the global market through its continued innovation drive. In step with the rapidly changing
market environment, Woori Bank is lowering boundaries within the financial sector to offer unprecedented
and innovative financial services to our clients through cross-selling and bundled marketing. While
anticipating customer needs ahead of time, we stay one step ahead in our constant efforts to turn possibility
into reality. With the wings provided by our privatization, Woori Bank is now set to take the next step on its
successful journey.
Successful
privatization
gave us the wings
to embrace
a brighter future.
2016 was a historical year for everyone at Woori Bank because our persistent endeavors
towards privatization finally paid off after 16 years of hard work. In 2017,
we are all set to take the world by surprise once again with another round of innovation.
We will continue striving to maximize value for our customers, shareholders and investors
and raise corporate value by developing innovative products aimed at global markets.
Privatization
A Better Tomorrow, A Stronger Bank
GROWTH
Customer-base expansion
PROFITABILITY
Profit-oriented business activities
SOUNDNESS
Exhaustive backdoor-locking
(adequate level of asset growth,
increased quality loans, reduced bad
assets, lower delinquency rate)
Woori Bank
Video Clip
(In other languages)
English/Chinese/Russian/
Bahasa Indonesia/Vietnamese
New growth engines
(business portfolios/wealth
EXPANSION OF
management/platforms/global/
FINANCIAL REACH
IB-industrial convergence)
New growth engines
NEW
PARADIGM
Innovation in
marketing and
corporate culture
Woori Bank
Video Clip
(In Korean)
Woori Bank is shaping the future of Korea’s financial industry as a leading global bank that grows alongside
customers in the global market through its continued innovation drive. In step with the rapidly changing
market environment, Woori Bank is lowering boundaries within the financial sector to offer unprecedented
and innovative financial services to our clients through cross-selling and bundled marketing. While
anticipating customer needs ahead of time, we stay one step ahead in our constant efforts to turn possibility
into reality. With the wings provided by our privatization, Woori Bank is now set to take the next step on its
successful journey.
Privatization
Ready to create new value in 2017
Our concerted efforts have successfully generated the industry’s best performance results in terms of profit-
ability, soundness and growth, ultimately leading to our successful privatization. Just as we started out 2017 on
a stronger note than ever before, we are now preparing for a new era for the bank.
Privatization Initiative: Strengthening our
Fundamentals
Improving profitability and growth
We have devoted our energy to enhancing our financial fundamen-
tals over the past several years. As a result, we recorded a jump in
earnings every quarter. In the third quarter of 2016, we posted KRW
1,105.9 billion in net income for the year to date, ensuring the high
levels of profitability required for privatization. Furthermore, the sub-
stantial improvements in our loan asset portfolios, as well as asset
size, significantly enhanced our profitability and growth.
Asset quality improvement
In anticipation of the changing financial environment, we moved
quickly in the field of risk management to stay ahead of the com-
petition, which significantly enhanced our asset quality. This back-
door-locking initiative and thorough risk management helped us
reduce bad debts by KRW 1.2 trillion, paving the way for successful
privatization.
Delinquency Ratio
BANK
(BANK+CARD )
0.82%
(0.84%)
0.46%
(0.48%)
Net Income
(Unit:KRW billion)
2016
2015
1,261
1,106
1,059
840
750
517
443
291
As of the end of 2015
As of the end of 2016
1Q
2Q
(Cum.)
3Q
(Cum.)
4Q
(Cum.)
004
Expected changes and benefits of privatization
Reorganization
Majority Shareholder Ownership
The successful privatization made Woori Bank the first financial insti-
tution in Korea to have several major shareholders, setting the tone
for new corporate governance in Korea’s financial sector. The Korea
Deposit Insurance Corporation (KDIC), which had held 51.06 per-
cent of all shares in Woori Bank, sold off 29.69 percent of its shares
in the bank to seven different investors: IMM PE (6.0%), Tongyang
Life Insurance (4.0%), Hanwha Life Insurance (4.0%), Korea Invest-
ment Securities (4.0%), Kiwoom Securities (4.0%), Eugene Asset
Management (4.0%) and Mirae Asset Global Investments (3.69%).
The seven major shareholders will keep each other in check and con-
tribute their financial expertise in different financial business areas to
generate greater synergies and help the firm achieve greater competi-
tiveness as a commercial bank through shareholder-friendly policies.
Termination of MOU between KDIC and Woori Bank
On December 16, 2016, the Public Funds Oversight Committee
(PFOC) resolved to end the MOU(Memorandum of Understanding)
between Korea Deposit Insurance Corporation and Woori Bank for
business normalization, setting the bank free of governmental control
to gain control over its business planning over the long term with
higher levels of management efficiency and autonomy. Now, the bank
can make market-oriented management decisions and bold invest-
ments in its future growth. Reduced inefficiency within the organiza-
tion will also allow us to heighten competitiveness without intervention
from the bank’s largest shareholders. Now that its stock is no longer
undervalued, the bank is poised to enhance corporate value.
Following its successful privatization, Woori Bank reshuffled its entire
organization in February 2017 to lay the foundation for preemptive
readiness in response to changing market environments and to po-
sition itself to grow into a stronger bank.
Greater autonomy for
responsible management at
each business division level
Reshuffling the
organization and
executive positions
Strengthening the
Wealth Management
organization’s capabilities
Increased operations in
non-interest income
Constant expansion of
core businesses of
global and smart finance
Expanding WM and trusts
business organizations
Concentrating on F/X,
trading (capital markets)
operations
Strategically reinforcing
global and smart financing
Enhancing efficiency in
back-office organizational
operations
Cost-saving, personnel
management and efficient
back-office operations
Shareholder Composition
37.0%
Minority Shareholders
4.4%
Employee Stock Ownership Association
7.5%
National Pension Service
(As of Jan. 31. 2017)
21.4%
Korea Deposit Insurance Corporation (KDIC)
29.7%
Major Shareholder Group
005
Woori Bank is shaping the future of Korea’s financial industry as a leading global bank that grows alongside
customers in the global market through its continued innovation drive. In step with the rapidly changing
market environment, Woori Bank is lowering boundaries within the financial sector to offer unprecedented
and innovative financial services to our clients through cross-selling and bundled marketing. While
anticipating customer needs ahead of time, we stay one step ahead in our constant efforts to turn possibility
into reality. With the wings provided by our privatization, Woori Bank is now set to take the next step on its
successful journey.
Woori Bank
continues improving
corporate value through
innovative marketing
strategies and evolving
fundamentals.
In 2016, Woori Bank achieved higher-than-expected net income as a result of its proven
profit-guaranteed marketing strategies. Ensuring the back door stayed locked dramatically
improved our NPL, delinquency and coverage ratios. Supported by the successful
privatization of Woori Bank, we are now well on our way to becoming a leading financial
institution through the constant expansion of our financial reach.
Stock Price Trends
Financial Highlights
Stock Price Trends
+44.6 %
Industry-leading
Stock Price Growth
in 2016
(Unit:KRW)
16,000
14,000
12,000
10,000
8,000
JAN-2016
APR-2016
JUL-2016
OCT-2016
JAN-2017
APR-2017
Woori Bank is shaping the future of Korea’s financial industry as a leading global bank that grows alongside
customers in the global market through its continued innovation drive. In step with the rapidly changing
market environment, Woori Bank is lowering boundaries within the financial sector to offer unprecedented
and innovative financial services to our clients through cross-selling and bundled marketing. While
anticipating customer needs ahead of time, we stay one step ahead in our constant efforts to turn possibility
into reality. With the wings provided by our privatization, Woori Bank is now set to take the next step on its
successful journey.
Financial Highlights
Financial Highlights
NET
INCOME
(Unit:KRW billion)
ASSETS
Loans in KRW
Total Assets
1,261
1,059
+19.1%
2016
2015
2014
(Unit:KRW trillion)
343.4
317.9
191.3
185.2
167.3
291.9
2015
2016
• Consolidated Basis(K-IFRS), Total Assets include Trust Account
INTEREST
INCOME
4,762
+5.4%
(Unit:KRW billion)
LIABILITIES
5,019
Deposits
Total Liabilities
(Unit:KRW trillion)
2016
2015
2014
221
290.1
209.1
272.5
188.5
252.1
2015
2016
• Consolidated Basis(K-IFRS)
NON-INTEREST
INCOME
706
+22.8%
(Unit:KRW billion)
CREDIT COST RATIO
(Unit:%)
867
0.54
0.36
2015
0.28
2016
2015
2016
2014
• Consolidated Basis (K-IFRS)
• Adjusted Credit Ratio (Incl. net gains from the disposal of loans and others)
Net Income(Continuing Operations) attributable to owners
008
ASSET QUALITY
(Unit:%)
CAPITAL ADEQUACY
(Unit:%)
NPL Ratio
Delinquency Ratio
NPL Coverage Ratio
BIS Ratio
Tier1 Ratio
CET1 Ratio
15.29
12.68
10.5
13.66
10.43
+23.97%
8.47
14.25
10.69
8.96
2.1
1.47
0.88
0.82
121.5
0.98
0.46
165
2014
2015
2016
• Consolidated Basis (K-IFRS)
97.2
PROFITABILITY (ROA & ROE)
(Unit:%)
Return on Equity (ROE)
Return on Asset(ROA)
3.55
0.21
2014
2015
2016
20141)
• Separate Basis(K-IFRS)
• Consolidated Basis(K-IFRS)
5.69
0.37
2015
Note 1) Excluding one-off factors related to the sale and the spin-off subsidiaries.
(Including one-off factors ROA 0.41 ROE 7.06 in 2014)
6.36
0.41
2016
009
Woori Bank is shaping the future of Korea’s financial industry as a leading global bank that grows alongside
customers in the global market through its continued innovation drive. In step with the rapidly changing
market environment, Woori Bank is lowering boundaries within the financial sector to offer unprecedented
and innovative financial services to our clients through cross-selling and bundled marketing. While
anticipating customer needs ahead of time, we stay one step ahead in our constant efforts to turn possibility
into reality. With the wings provided by our privatization, Woori Bank is now set to take the next step on its
successful journey.
Banking becomes
more enjoyable and
more convenient
with the WiBee Platform!
Creating a new paradigm
for daily finance.
Our blue bee mascot, WiBee, invites you to indulge in a joyful financial experience as you
handle your daily finances. The WiBee Platform has removed barriers between lifestyle
services and financial services, as it takes full advantage of Woori Bank’s FinTech infrastructure
to offer innovative financial services relating to marketing across different industries.
The WiBee Platform handily brings together mobile financial services, a mobile community
service, mileage points and open markets to meet customer needs and stay one step
ahead, while strengthening its services each and every day.
WiBee Platform
WIBEE BANK
Korea’s first mobile-only banking
service offering extensive financial
services, from deposits and loans to
foreign exchange and insurance
WIBEE MEMBERS
A mileage point scheme
based on 'Honey Money'
can be used just like cash
within the app.
WIBEE TALK
Strategically converging financial tips
and messenger services, WiBee talk
offers useful life & culture functionality,
including access to magazines
as well as foreign exchange and partial
payment services for consumers
WIBEE MARKET
A mobile-based open mar-
ket-type shopping mall that
offers 1% cash back on
all purchases via
‘Honey Money’
Scan me!
Woori Bank is shaping the future of Korea’s financial industry as a leading global bank that grows alongside
customers in the global market through its continued innovation drive. In step with the rapidly changing
market environment, Woori Bank is lowering boundaries within the financial sector to offer unprecedented
and innovative financial services to our clients through cross-selling and bundled marketing. While
anticipating customer needs ahead of time, we stay one step ahead in our constant efforts to turn possibility
into reality. With the wings provided by our privatization, Woori Bank is now set to take the next step on its
successful journey.
WiBee Platform
The First Comprehensive Financial Platform
in the Korean Financial Sector
Woori Bank’s WiBee Platform is a total financial service platform that was created to provide optimal products and
services that cater to the needs of customers as a proactive response to today’s ever-more-complicated digital fi-
nancial market environment. Launched in 2015, the WiBee service is quickly evolving into a smarter service.
The Evolution of WiBee Bank
Establishment of WiBee Market
Launched in 2015, WiBee Bank successfully took the lead in the
mid-range interest rate loan market when it became the first Korean
bank to introduce ‘WiBee Mobile Loan’ in alliance with the Seoul
Guarantee Insurance Company. Since then, we have also marketed
loan products that utilize FinTech and big data to serve the lending
needs of SOHO business owners. Drawing on the fast-growing
financial technology business, WiBee Bank is able to deliver innova-
tive product development and customer-oriented financial services.
WiBee Market is a mobile-based open market shopping mall run by
Woori Card Company that supports Woori Bank’s SME corporate
clients to create a mutually-beneficial partnership. At the same time,
it connects consumers with a generous mileage point policy that
offers up to four percent cash back on purchases via WiBee Honey
Money. WiBee Market is an innovative service that puts the custom-
er before everything else and brings together financial services with
an online market platform
Launch of WiBee Talk
WiBee Talk is the first mobile-based messenger service from a Ko-
rean financial institution. The service provides convenient messaging
functions including ‘Instant Erase’ and ‘Message Retrieval’ as well as
a ‘TalkTalk Money Wiring Service’ that transfers remittances within five
seconds. Additionally, it provides 20 types of lifestyle-related informa-
tion sources, such as TalkTalk Magazine, WiBee Gourmet Restaurant,
WiBee Fortune-telling service, and useful tips on applying for applying
for housing subscription savings plans. In 2016, the service was ex-
panded to the PC platform, thereby increasing accessibility and con-
venience for users.
Launch of WiBee Members
WiBee Members is a customer-oriented open membership service
that uses ‘WiBee Honey Money’. This easy-to-subscribe to service
considerably enhances customer access, while preferential benefits
and a practical mileage point service allows for differentiated finan-
cial services tailored to each individual’s lifestyle.
New Services in 2016
WiBee Cam This sticker photo camera app is exclusive to
WiBee Talk, giving users the chance to easily produce animated
GIF files, short videos and sticker photos for fun.
WiBee Talk Translator The WiBee Talk app also features a
translation function in 10 languages, including English, Chinese,
Japanese, Vietnamese and Russian, facilitating cross-border
communication with people from around the world.
WiBee Go Dutch Service While competing money transfer apps
are only accessible to individual app users, WiBee Talk allows
non-app users to make remittances using their mobile phone
numbers.
WiBee Club This is a community for WiBee Talk users, who can
utilize not only WiBee Talk’s powerful communication functions
but also its commercial functions, which are linked to the WiBee
Market service, offering a wide range of financial services.
012
WiBee Statistics in 2016 (As of the end of 2016)
WiBee Bank Sales Records
Loan products
Deposit Products
KRW 295 billion
KRW 462 billion
Number of Customers
WiBee Talk subscribers
WiBee Members subscribers
3.02 million
3.04 million
Global Service
Across 8 markets
Cambodia / Australia / Vietnam / Bangladesh
India / Hong Kong / Japan / Brazil
013
Woori Bank is shaping the future of Korea’s financial industry as a leading global bank that grows alongside
customers in the global market through its continued innovation drive. In step with the rapidly changing
market environment, Woori Bank is lowering boundaries within the financial sector to offer unprecedented
and innovative financial services to our clients through cross-selling and bundled marketing. While
anticipating customer needs ahead of time, we stay one step ahead in our constant efforts to turn possibility
into reality. With the wings provided by our privatization, Woori Bank is now set to take the next step on its
successful journey.
Woori Bank is
well on its way to
becoming a
leading global bank.
As it moves beyond the Korean market, Woori Bank is making unprecedented strides into
other markets around the world with confidence.
With 250 customer contact points worldwide—the largest overseas network in the Korean
banking sector—Woori Bank is active in its efforts to enter global markets on its way to
emerging as a leading global bank.
Going forward, we will reinforce customer-oriented service, expand our non-face-to-face
sales network, and continue effective risk management to compete at the same level as
the world’s biggest banks.
Global Resonance
New Markets in 2016
PHILIPPINES
Acquisition of a
Thrift bank
in the Philippines
(Oct. 2016)
VIETNAM
Establishment of
a subsidiary in
Vietnam
(Nov. 2016)
IRAN
First Korean bank
to enter Iran
(May 2016)
INDIA
Preliminary approval for
branches in Gurgaon and
Mumbai, India (Oct. 2016)
Woori Bank is shaping the future of Korea’s financial industry as a leading global bank that grows alongside
customers in the global market through its continued innovation drive. In step with the rapidly changing
market environment, Woori Bank is lowering boundaries within the financial sector to offer unprecedented
and innovative financial services to our clients through cross-selling and bundled marketing. While
anticipating customer needs ahead of time, we stay one step ahead in our constant efforts to turn possibility
into reality. With the wings provided by our privatization, Woori Bank is now set to take the next step on its
successful journey.
Global Resonance
Emerging as a Leading Global Bank
In 2016, Woori Bank successfully laid the foundation for its global expansion with an industry-leading global
network and operating profit growth rate as well as the nation’s fastest growing FinTech (WiBee) platform. With
our hardware ready for international expansion, we are now focusing on increasing our content with higher
product competitiveness on the global front. While introducing competitive products from our headquarters to
overseas customers, we are seeking cross-industry strategic alliances to further enhance product competitive-
ness at our overseas branches.
First Korean Bank to Enter Iran’s Financial Market
(May 2016)
Woori Bank Vietnam
(November 2016)
Woori Bank became the first Korean commercial bank to enter Iran’s
financial market in May 2016. Our business alliance with Bank Pas-
argad—the second largest financial institution in Iran—will give us
access to up-to-date developments in the local market and provide
a foothold for Woori Bank to offer our financial services alongside a
local partner. This will also constitute part of our ambitious Financial
Belt initiative in the Middle East, complementing our branch offices
in Dubai and Bahrain and help provide financial support to Korean
companies that are, or will become, active in the region’s markets.
Acquisition of a Thrift bank in the Philippines
(October 2016)
Our acquisition of Wealth Development Bank made us the first
foreign bank to acquire a Filipino bank since the Southeast Asian
country opened its financial markets to foreign entities. Following the
acquisition, Wealth Development Bank turned into a joint venture
between Woori Bank and the former owner, Vicsal Development
Corporation, at a ratio of 51:49. Today, in close partnership with
Vicsal, Woori Bank is ambitiously expanding its retail banking opera-
tions in the local market.
Woori Bank won approval to operate a subsidiary in Vietnam from
the State Bank of Vietnam in 2016. This adds to branch offices we
have already established in Hanoi and Ho Chi Minh City, facilitating
our plans to step up our retail marketing efforts in the local market.
First Korean Bank with a Global Network of
250 Customer Contact Points (December 2016)
Woori Bank’s aggressive global expansion initiatives have turned
out to be a rousing success, with its overseas network surging to a
total of 250 customer contact points as of 2016. This represents the
greatest number of overseas customer contact points for any Kore-
an commercial financial institution. Guided by the ambitious goal of
becoming one of Asia’s top 10—and the world’s top 50—financial
institutions in the near future, Woori Bank is constantly expanding
its network of local subsidiaries in the U.S., Indonesia, Vietnam, the
Philippines, Cambodia and Myanmar, while actively pursuing new
subsidiaries in the EU (one subsidiary in Germany and a represen-
tative office in Poland) as well as in Mexico for Latin American mar-
kets.
016
Growing Our Financial Services through a Global Network
With its 250 customer contact points internationally—the largest global network among Korean banks—Woori
Bank is making its globalization push the core competency in its drive to become a leading global financial in-
stitution.
250 Networks in 25 nations Worldwide
(As of the end of 2016)
10
Overseas subsidiaries
19
Overseas branches
250
Global networks
Russia
AO Woori Bank Russia
USA
Woori America Bank
China
Woori Bank China
Woori Bank
Brazil
Woori Bank Brasil
Myanmar
Woori Finance Myanmar
Cambodia
Woori Finance
Cambodia
Hong Kong
Woori Global Markets Asia Ltd HK
Vietnam
Woori Bank Vietnam
Philippines
Wealth Development Bank
Indonesia
P.T. Bank WooriSaudara Indonesia
Message from
the CEO
Woori Bank
Annual Report 2016
018
Let me begin by expressing my deepest gratitude to our
shareholders and customers for their unwavering support of and
commitment to Woori Bank.
Over the past year, we witnessed growing uncertainties in the global market, which suffered from
prolonged economic recession and widespread protectionist trends, as evidenced by the Brexit vote
and Trumponomics, as well as political instability in Korea, only adding to reduced domestic con-
sumer spending.
Nevertheless, everyone at Woori Bank worked harder than ever to finalize the bank’s privatization
after a number of setbacks during the last round of talks, which ultimately took 16 years to conclude.
The resultant rise in our corporate value will enable us to better serve our shareholders and custom-
ers as we move forward together.
We are particularly proud of our remarkable financial results from 2016, with all of our major indica-
tors—profitability, fiscal soundness and growth—significantly improving.
Despite the challenging business environment amid a time of protracted low-interest rate policies,
Woori Bank’s profitability surpassed its previous year’s net income just nine months into 2016 on the
back of our exceptional marketing and sales performance results.
With this improvement to the bank’s fiscal soundness indicators, such as our non-performing loan
(NPL) ratio, bad debt expenses and coverage ratios—all three of which had served as a drag on
performance for the past several years—Woori Bank is now poised to compete at the same level as
other world-leading banks.
In addition, the impressive growth in total assets, recording a KRW 25.5 trillion rise from 2015 to
reach KRW 343.4 trillion in 2016, also outpaced our competitors.
Woori Bank also topped the competition in terms of future growth drivers, which included advanced
FinTech infrastructure and an unsurpassed global network.
Staying one step ahead of other domestic banks, we successfully introduced four breakthrough plat-
forms—WiBee Bank, WiBee Talk, WiBee Members and WiBee Market—allowing us to play a leading
role in the innovation of Korea’s financial landscape.
On the global front, our strategic approach aimed at expanding our worldwide network through
South and Southeast Asian markets with high growth potential substantially paid off in 2016. This
was made especially evident after we launched a subsidiary in Vietnam in October and increased the
number of our overseas networks to 250, giving Woori Bank the largest overseas presence among
Korean banks. This also laid the groundwork for our ambitious goal of becoming one of Asia’s top
10—and the world’s top 50—financial institutions in the near future.
Our exceptional sales and marketing activities, as well as our strong commitment to the bank’s pri-
vatization efforts, garnered positive responses from markets. In that regard, we owe a tremendous
debt of gratitude to our shareholders and customers for their adamant support of our successful pri-
vatization over the past year.
Woori Bank
Annual Report 2016
019
However, we will not stand idly by and bask in the success of our privatization. Instead, we are start-
ing out 2017 on a stronger note as we prepare for a new era for the bank, and will be pushing for-
ward with the following five new growth engines in our attempt to extend our financial reach around
the world.
First, we will outpace rival banks in terms of our competitiveness through new business models and
a diversified profit portfolio. In doing so, we will closely communicate with major shareholders who
hold a decisive stake in the bank to generate synergies for maximizing our profitability.
Second, with 2017 serving as the first year to redouble our asset management capabilities, we are
determined to generate considerable results in bancassurance, funds, trusts, and Woori Bank’s four
major pension fund investments. At the same time, we will surge ahead in the market with custom-
ized portfolios and unrivaled customer yield-oriented sales activities.
Third, we plan on connecting our lifestyle platforms in the fields of retail, healthcare and education
to our WiBee platform through numerous business alliances, while also developing better-than-ever
products to stay ahead of our competitors with respect to maintaining an industry-leading financial
platform.
Fourth, we will pursue quantitative and qualitative growth in a balanced way internationally. In tan-
dem with our global network expansion, which is presently concentrated on emerging South and
Southeast Asian markets, we will continue our profit-oriented business operations through localized
marketing activities backed by our WiBee platform and credit card services, ensuring we remain Ko-
rea’s undisputed leader in the global market.
Woori Bank
Annual Report 2016
020
Finally, we will strategically tap into our vast base of quality corporate clients to reinforce our invest-
ment banking operations and connect alliance partners that are already active on the WiBee Market
to promote cross-industry convergence operations in pursuit of future growth drivers.
Looking ahead to 2017, Woori Bank is taking bold, confident strides into a brighter future as a rising
comprehensive financial service provider, one with 118 years of experience standing firmly behind it.
On behalf of everybody at Woori Bank, all of whom are doing their utmost to make the bank stron-
ger than ever before under a united spirit of reinventing the organization anew, I humbly ask for your
continued support as we draw closer to our goals.
I wish you and your family health and happiness.
Thank you.
President and CEO of Woori Bank
Lee Kwang Goo
Woori Bank
Annual Report 2016
021
Board of Directors & Management
Woori Bank
Annual Report 2016
022
Standing Directors
Lee, Kwang Goo
President & Chief Executive Officer
• 50th President & Chief Executive Officer
• 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 Officer, Woori Global Markets Asia Ltd. (Hong Kong)
• General Manager, Card Strategy Dept., Woori Bank
Park, Sang Yong
• Honorary Professor, Yonsei University
• Civilian Chair, Public Fund Oversight Committee
• Dean, School of Business, Yonsei University
• Ph.D. in Business Administration, New York University
• B.A. in Business Administration, Yonsei University
Tian, Zhiping
• Vice Managing Director, Beijing FUPU DAOHE Investment
Management Ltd.
• Managing Director and Director of ICBC (London) plc. and
ICBC’s Middle East Division
• Managing Director, Sichuan Sub-branch, Industrial and
Commercial Bank of China (ICBC)
• MBA, Southwestern University of Finance and Economics
• General Manager, Consumer Banking Marketing Dept., Woori Bank
• IMBA, University of Hong Kong
• B.A. in Business Administration, Sogang University
• B.A. in Economics & Governmental Administration,
Shanxi University of Finance & Economics
Oh, Jung Sik
Standing Audit Committee Member / Director
• CEO, KB Capital
• Vice President, Commercial Business Division, Citibank
• Managing Director, Risk & Planning Group, Citibank
• B.A. in International Economics, Seoul National University
Outside Directors
Ro, Sung Tae
• President, Hanwha Economic Research Institute
• President, Korea Economic Research Institute
• Ph.D. in Economics, Harvard University
• B.A. in Economics, Seoul National University
Shin, Sang Hoon
• President & CEO, Shinhan Financial Group
• President, Shinhan Bank
• MBA, Yonsei University
• B.A. in Business Administration, Sungkyunkwan University
Chang, Dong Woo
• CEO, IMM Investment
• Chief Partner, IMM Investment
• LLB, Hanyang University
Non-Standing Director
Choi, Kwang Woo
• Head, Office of Public Relations, Korea Deposit Insurance Corporation
• Head, Office of Fund Operations and Investment, Korea Deposit
Insurance Corporation
• Head, Office of Customer Value Management Support, Korea
Deposit Insurance Corporation
• M.A. in Business Administration, Korea University
• B.A. in Business Administration, Korea University
3
4
5
6
7
8
1
2
1. Lee, Kwang Goo
2. Ro, Sung Tae
3. Oh, Jung Sik
4. Shin, Sang Hoon
5. Park, Sang Yong
6. Tian, Zhiping
7. Chang, Dong Woo
8. Choi, Kwang Woo
Woori Bank
Annual Report 2016
023
Executive
Vice Presidents
Head, Business Unit
Nam, Ki Myung
Domestic Business Unit
(Head, Retail Banking Business Group)
Sohn, Tae Seung
Global Business Unit
(Head, Global Business Group)
Jeong, Won Jai
Business Support Unit
(Head, Human Resources Group)
Managing Directors
Lee, Dong Yeun
Small & Medium Corporate Banking Business
Group
Cheong, Chai Pong
Wealth Management Group
Lee, Chang Jae
Pension & Trust Business Group
Kim, Yeong Bae
International Trade Business Division
Lee, Jong In
Financial Market Business Group
Hong, Hyun Poong
Next Generation ICT System Building Division
Woori Bank
Annual Report 2016
024
Head, Business Group
Jang, An Ho
Corporate Banking Business Group
Cho, Woon Haeng
Institutional Banking Business Group
Kim, Hong Hee
Real Estate Finance Business Group
Kwon, Kwang Seok
Investment Banking Business Group
Cho, Jae Hyun
Smart Banking Business Group
Choi, Jung Hoon
Risk Management Group
Kim, Sun Kyu
Credit Support Group
Shin, Hyun Seok
Management & Finance Planning Group
Compliance Officer
Park, Seong Il
Cho, Gyu Song
Operation & Support Group
Heo, Jeong Jin
Information Security Division
Ha, Tae Joong
Corporate Restructuring Division
Lee, Won Duk
Future Strategy Division
Kim, Jeong Ki
External Relations Division
Lee, Dae Jin
Audit Department
Corporate Governance
As of the end of March 2017, Woori Bank’s Board of Directors (BOD) consisted of eight executive directors: two standing
directors, and one non-standing director and five outside directors who were appointed to increase the relevant expertise
and independence of the BOD. The five outside directors and one non-standing director were selected based on their
experience in the fields of finance, management, law, accounting and public relations. Many of them are also well-known
public figures. In their respective capacities, they support and monitor Woori Bank’s strategic decision-making process
and overall business affairs on a regular basis.
2016 in Review
The BOD held 17 meetings in 2016 to discuss a total
of 60 pending issues and 44 briefings which all re-
quired decisions to be made.
Directors from a variety of fields collected information
through internal and external activities, and then of-
fered real-world advice by utilizing their expertise to
contribute significantly to improving management.
As experts in economics, business administration,
accounting and law,directors contribute their expertise
and information gathered from years of experience in
the field to enhance the management efficiency of the
bank and increase shareholder value.
During regular quarterly meetings in 2016, the BOD
was informed of quarterly business results, reviewed
current issues, and deliberated on the bank’s man-
agement plans. Major agenda items of discussion in-
cluded comprehensive briefings regarding major loans;
briefings on NPLs; progress reviews and reports on
review results concerning the implementation of orders
handed down by the BOD; and a rundown of activities
at all the committees that fall under the BOD. At the
December meeting, the Board of Directors also held
in-depth discussions about major issues facing Woori
Bank amid constant market changes, as well as giving
final approval to the bank’s 2017 draft management
plan.
Woori Bank
Annual Report 2016
025
Committees
under the
Board of Directors
※Three previously independent
committees (i.e., Officer Candi-
date Recommendation Commit-
tee, Outside Director Candidate
Recommendation Committee,
Audit Committee Member Rec-
ommendation Committee) were
integrated into a single committee
(The Officer Candidate Recom-
mendation Committee) through
an amendment to the Articles of
Incorporation at the Extraordinary
General Meeting of shareholders
held on December 30, 2016.
In order to ensure the efficient operation of the Board
of Directors, Woori Bank has established a Board of
Directors Management Committee , Audit Committee,
Risk Management Committee, Compensation Com-
mittee, and Officer Candidate Recommendation Com-
mittee.
Board of Directors Management Committee
The Board of Directors Management Committee ac-
tively supports the activities of the BOD by studying
and reviewing its overall function and operation, while
also establishing and reviewing succession and training
plans of the management team, including directors.
Audit Committee
The Audit Committee establishes and executes internal
audit plans, makes outcome evaluations, carries out
follow-up measures, and provides improvement plans
to evaluate and enhance the appropriateness of the
internal control system and management performance
measures.
Risk Management Committee
The Risk Management Committee makes decisions
about risk-related policies and strategies in response
to changes in the financial environment. It meets at
least once every quarter, or on an ad hoc basis, to
deliberate on risk management strategies and policies,
risk tolerance levels and exposure, allowing it to pre-
dict measure and monitor overall risks arising from the
bank’s management or transactions in a timely man-
ner.
Compensation Committee
The Compensation Committee monitors the design
and operation of the bank’s performance-based com-
pensation systems and is in charge of independently
establishing compensation policies.
Officer Candidate Recommendation Committee
The Officer Candidate Recommendation Committee rec-
ommends candidates for the positions of President & CEO,
outside directors, and members of the Audit Committee.
2017 Plans
In 2017, Woori Bank will make significant improve-
ments to its management by discussing major agenda
items at BOD meetings. The quarterly BOD meetings
will continue to focus on agenda items such as carrying
out an analysis of management performance results
and reviewing the draft 2017 management plan, with
ad hoc meetings also being held whenever needed to
deal with agenda items related to various matters, such
as management goals, organization and financing. In
2017, Woori Bank will maintain its position as a reliable
banking partner that excels and grows through trans-
parent and efficient management innovation.
Type of Meeting
No. of
Agenda Issues
No. of
Briefings
Major Issues
Holding the general shareholders’ meeting, operating the BOD/Board of directors
management committee, developing and implementing corporate governance issues
and management plans/strategies (including set-up and revamp of business divi-
sions)
Approving and modifying the settlement of financial statements, reporting and plan-
ning financial records, providing briefings on results and actions for MOU reviews,
planning for bonds issuances (including foreign currency bonds), and managing
credit limits
Comprehensive briefings on major loans, briefing on the status of NPLs, audit & in-
ternal control issues
Carrying out performance evaluations/compensation reviews, appointing & dismiss-
ing employees (excluding BOD members), and addressing issues related to the La-
bor-Management Council
Shareholders’ Meeting,
BOD and Corporate Governance
Accounting/Financial Management
Portfolio & Risk Management/
Investment/Audit & Inspection/
Gov. Regulation
HR/Organizational Management
Others
Total
Woori Bank
Annual Report 2016
026
16
5
2
7
30
60
4
7
15
1
17
44
Company Structure
Privatization Project
The Public Fund Oversight Committee announced
on August 22, 2016 a set of confirmed measures to
privatize Woori Bank. According to the measures,
the Committee decided to sell a controlling stake in
the bank, held by the Korea Deposit Insurance Corp.
(KDIC). With a 51 percent stake in the bank, the KDIC
put a 30 percent stake of the bank (59 percent of
KDIC's total ownership) up for sale to a number of dif-
ferent investors, splitting the shares into 4 to 8 percent
chunks in open price bidding.
The KDIC’s public notification of the bid on August 24
kicked off the bank’s privatization procedure. Letters of
Intent(LOI) were received as of September 23, 2016. A
total of 18 investors submitted their letters of intent at
levels ranging from 82 to 119 percent of shares in total.
Of the eight investor bidding proposals totaling 33.7
percent received by November 11, 2016, the Public
Fund Oversight Committee selected 7 successful bid-
ders two days later, on November 13, concluding a
sale amounting to a 29.7 percent stake in the bank.
In a bid to secure greater private-oriented autonomous
management following Woori Bank’s successful pri-
vatization, the Committee drew from the effectiveness
of the MOU for a business normalization plan that had
been signed between KDIC and Woori Bank on De-
cember 16, 2016.
As a result, the bank now has an improved ownership
structure, with an increased number of major share-
holders to discuss and approve business plans.
Meanwhile, the government is planning to sell its re-
maining stake (21.37%), still held by the KDIC, through
close consultation with the Public Fund Oversight
Committee. This will be done in view of the upside
gains of the bank’s privatization and from the perspec-
tive of retrieving public fund investment returns.
Present Status of Woori Bank’s Subsidiaries
Domestic
Woori
Card
Woori
Investment Bank
(Merchant bank)
Woori
FIS
Woori
Finance Research
Institute
Woori
Credit Information
Woori
Fund Service
Woori
Private Equity
Asset Management
100%
58.15%
100%
100%
100%
100%
100%
International
Woori
America
Bank
100%
Woori
Global Markets
Asia Limited
(Hong Kong)
100%
Woori
Bank (China)
Ltd
AO
Woori Bank
(Russia)
Woori
Bank Brasil
(Brazil)
100%
100%
100%
Woori
Finance
Cambodia Plc
PT Bank
Woori Saudara
Indonesia
Woori
Finance
Myanmar Plc
100%
74.02%
100%
Wealth
Development
Bank
(Philippines)
51%
Woori
Bank Vietnam
100%
Woori Bank
Annual Report 2016
027
News Highlights
overseas investor relations events in Europe, the U.S. and
Japan on three separate occasions. Through a concerted
effort by Woori Bank’s employees to enhance profitability,
soundness and growth, the bank was able to post indus-
try-leading performance results in 2016, which in turn led
to its successful privatization.
Woori Bank is highly optimistic about the synergies that can
be generated from collaborating with major shareholders—
institutional investors with expertise in securities, insurance
and asset management—as it maintains its position as
Korea’s leading bank
ceived a very positive response from customers. In fact,
we offer our customers Honey Money mileage points
in proportion to their product subscriptions and trans-
action records with Woori Bank and Woori Card. For
instance, prime customers of Woori Bank are rewarded
with 3,000 Honey Money every quarter, while two per-
cent of every purchase with their WiBee Members Card
is put aside in the form of WiBee Honey Money mileage
points. In addition to financial benefits, the WiBee Mem-
bers program offers many benefits through a number of
partnerships with financial and non-financial businesses
as a “life platform.”
With more than three million subscribers to both WiBee
Talk and WiBee Members, Woori Bank continues to
reinforce connections with WiBee Bank and WiBee
Market, asserting itself as a leading Korean bank with
an innovative total financial platform.
After a number of challenges over the last 16 years, Woori
Bank finally succeeded in its privatization plan. The Fi-
nancial Services Commission divided and then sold the
29.7 percent stake held by the Korea Deposit Insurance
Corporation in Woori Bank to seven investors, including
Korea Investment & Securities, on December 1, 2016. This
success can be credited to the concerted effort made by
everyone at Woori Bank towards strengthening the bank’s
profitability and financial soundness.
In fact, net income grew from KRW 400 billion in 2014 to
surpass the KRW 1 trillion mark in 2015, with net income
surpassing KRW 1,126.1 billion for 2016. Financial sound-
ness, a long-time barrier to the bank’s substantial growth,
was also significantly enhanced through heightened risk
management with a focus on locking the back-door. The
improved quality of our loan portfolio also contributed to
record high levels of asset quality since the 2008 global
financial crisis.
President & CEO Lee Kwang-goo devoted himself to
promoting the bank’s value to overseas investors through
The number of subscribers to both Woori Bank’s WiBee
Talk and WiBee Members surpassed three million each
by the end of December 2016. As the first mobile mes-
senger service launched by a Korean financial institu-
tion, WiBee Talk saw its subscription base exceed three
million people in its first year. In addition, we secured
three million subscribers to our mobile-based total
membership service WiBee Members only five months
after it was launched in July 2016. In October of the
same year, the subscription procedures for all WiBee
Platform services were integrated into a single process
within WiBee Talk, giving members easy access to
other WiBee platforms like WiBee Members and WiBee
Market, all in promotion of the WiBee Platform.
Furthermore, WiBee Talk’s user-friendly services include
the Talk Talk Money Transfer Service, which makes
remittances as easy as typing in your PIN number, the
WiBee Talk Go Dutch Remittance Service, which allows
a user to wire money on the messenger platform with-
out opening the banking platform, and WiBee Club, a
social network-like mobile community.
WiBee Members is an integrated privilege program
for customers of Woori Bank and Woori Card, offering
WiBee Honey Money at the exchange rate of KRW 1
for 1 Honey Money in cash-back benefits pegged to
customers’ financial transaction records, and which can
also be withdrawn from an ATM.. This benefit has re-
Successful
Conclusion to
16-year
Privatization
Life Platform WiBee!
WiBee Talk and WiBee
Members Subscribers
Each Exceed 3 Million!
Woori Bank
Annual Report 2016
028
WiBee
(Former Woori Hansae)
Basketball Team
Wins the
Championship Four
Consecutive Years in
the Women's Korean
Basketball League
Preemptive
Prevention of
Insolvency through
Back-door Locking
Schemes
(Moneual, On Corporation,
Digitech Systems, Leaders’ City)
Woori Bank’s Hansae basketball team defeated KEB Hana
Bank’s team in the third round of the league final’s decid-
ing game to win the 2015/2016 Women’s Korean Basket-
ball League (WKBL) championship on March 20, 2016.
This marked the fourth championship win for Woori Bank’s
women’s basketball team. Woori Bank’s Hansae basket-
ball team is the number one organization in the league.
It has finished atop the standings in the regular season a
record nine times and has won the league championship
eight times since the launch of the WKBL in 1988.
On March 29, 2016, the team was renamed WiBee. On
the same day, they released a new emblem and mascot
at their new home, the Yisunsin Arena, moving from
Chuncheon to Asan. Opened in July 2012, Asan’s state-
of-the-art Yisunsin Arena can accommodate 3,200 fans.
The WiBee basketball team was still the undisputed
leader at the beginning of the 2016/2017 season. It
Since his inauguration, Woori Bank has been guided
by its CEO’s commitment to locking the back door to
enhance financial soundness.
As a result, the bank has strengthened its risk man-
agement and steered clear of large-scale insolvencies,
which has significantly improved its financial soundness.
One case in point was the notorious Moneual scandal,
which involved more than KRW 3 trillion in loan scams
and resulted in a KRW 670 billion loss to the Korean
banking sector. While most Korean banks extended
loans based only on paperwork that the company
submitted, and which turned out to be falsified export
bonds, Woori Bank had reasonable doubts about
Moneual’s excessively high sales growth and carried
out due diligence before extending additional loans.
Despite the fact that Woori Bank was Moneual’s main
creditor, the bank made the prudent decision to re-
trieve the entire amount it had lent Moneual (KRW 85
billion) after an exhaustive loan review and study of risk
management results. Later, this timely move ended up
saving Woori Bank from massive losses.
Another notable case had to do with On Corporation’s
default on KRW 170 billion in loans. As with Moneual,
Woori Bank also doubted On Corporation’s sales infla-
tion and excessively high operating profit, recalling the
entire loan it had granted to On Corporation (KRW 2.5
billion). More importantly, it was able to save itself from
potential risk exposure worth more than KRW 10 bil-
lion. Yet another important case was Digitech Systems,
which paid brokers so that it could take out a total of
opened with a seven-game winning streak on March
8, 2017, and became the first team to win 20 games in
the 2016/2017 season, suffering just one loss during an
impressive run. Backed by the full support of all Woori
Bank employees, the WiBee basketball team is aiming
to make greater achievements than ever before under
the excellent leadership of Coach Wi Seong-woo.
KRW 80 billion in illegal loans from Korean banks.
This was a prime example of where Woori Bank’s fol-
low-up checks on loans proved critical. Although Woori
Bank had already established financial ties to the parent
company, NP-Tech, we were among the first financial
institutions to realize corporate raiders’ engagement
in the management board at Digitech Systems, and
ultimately turned down the company’s request for new
loans worth KRW 5 billion, only to later recall the entire
existing loan (KRW 10 billion). Finally, with the most
recent financial scandal, which revolved around LCT
(Leaders’ City), Woori Bank turned down the borrow-
er’s request for KRW 200 billion in project financing and
KRW 500 billion in collective installment loans.
Through air-tight back-door locking procedures, Woori
Bank was able to reduce its bad debts by KRW 1.2
trillion, with the bad debt ratio decreasing by 0.6 per-
centage points, from 1.65 percent to 1.05 percent, in
2016, thus significantly enhancing asset quality.
Woori Bank
Annual Report 2016
029
Woori Bank
around the World:
Global Expansion
In 2016, Woori Bank concentrated on solidifying its
stance as a leading global bank. In fact, it was the first
commercial bank in Korea to open a branch outside
the country, which it did in Tokyo in November 1968.
Since then, the bank has consistently worked to ex-
pand into overseas markets.
As a result of this tenacity, and upon acquiring Indo-
nesia’s Saudara Bank, we became the first Korean
financial institution to acquire a bank listed on a market
outside of Korea in 2014. In 2015, we also became the
first Korean bank to open a 200th branch office over-
seas. In an effort to grow our network in the South and
Southeast Asian markets in 2016, regions where we
see high growth potential, we successfully launched a
local subsidiary in Vietnam and acquired a thrift bank
in the Philippines, Wealth Development Bank, while
also acquiring preliminary approval for branch offices
in Gurgaon and Mumbai, India, completing Korea’s
largest global network of 250 contact points in 25
countries.
In these new markets, we are poised to step up our
sales activities as we continue to expand our local sub-
sidiary networks in the U.S., China, Indonesia, Cam-
bodia and Myanmar. On top of quantitative growth, we
are quickly adopting localization strategies to enter lo-
cal credit card markets as we ensure qualitative growth
through retail sales activities such as bancassurance
and credit loans for full-time workers.
Furthermore, to strengthen our sales competencies in
EU markets, Woori Bank is planning to open a local
subsidiary in Germany and a representative office in
Poland. We are also keen to enter the Mexican market,
where many Korean companies have already estab-
lished a presence.
Based on these aggressive overseas expansion strat-
egies, we aim to raise the percentage of income from
global operations up to 30 percent by 2020, while
achieving our greater vision of becoming one of Asia’s
Top 10—and one of the world’s Top 50—financial insti-
tutions over the long term.
South Korean
Bank of the Year
2016 : The Banker
Woori Bank was named Bank of the Year 2016 in
South Korea by The Banker, a UK-based financial
magazine that selects the top banks from countries
around the world based on data submitted by 120 in-
ternational banks every year.
This is the first time in five years that Woori Bank won
the award. The Banker is a monthly magazine that has
been published by the Financial Times since 1926 and
is considered the world’s preeminent publication of its
kind, with 29,000 institutional and 90,000 individual
subscribers from 180 countries around the world.
The Banker singled out Woori Bank for its significant
improvements in its financial performance in view of
profitability and asset soundness, as well as the indus-
try’s first launch of advanced mobile platforms such as
WiBee Bank and the mobile messenger WiBee Talk,
both of which rely on the strengths of its innovative
FinTech know-how.
The UK magazine also recognized Woori Bank’s ag-
gressive international expansion efforts and localization
strategies that allowed for a timely advance into South
and Southeast Asian markets with high growth po-
tential, including Indonesia, Myanmar, Cambodia, the
Philippines and Vietnam. This award will provide Woori
Bank an opportunity to better publicize its improved
business results, its advanced management strate-
gies and marketing competitiveness so as to further
strengthen its position in the global financial world.
Woori Bank
Annual Report 2016
030
Woori Bank Awards 2016
The Banker
World Finance
The Asian Banker
The Asian Banker
LACP
The Maeil Business Daily
The Korea Economic Daily
The Korea Economic Daily
The Korea Economic Daily
The Korea Economic Daily
Asia Today
Infobank
Bank of the Year for 2016 in South Korea
World Finance Wealth Management Awards 2016 (The first bank in Korea to win the award)
Best Transaction Bank in South Korea
Best Cash Management Bank in South Korea (4 Consecutive years)
Platinum winner at the LACP’s 2015 Vision Awards’ Annual Report Competition
Grand Prize at the 21st Mail Business Daily Financial Product Awards
Grand Prize at the Korea Best Banker Awards
Best HR at the 1st Retirement Planning Service Awards
Grand Prize at the 2016 Korea Top Brand Awards
Hall of Fame in the Financial Sector at the Customer Satisfaction Management Awards
Top prize in the mobile financial category at the 2016 Asia Today Financial Awards
Best Bank at the Infobank Awards 2016
Korea’s Financial Services Commission
Korean Presidential Commendation for Merits in Financial Reform at Korea’s 1st Finance Day
awards ceremony
Korea’s Financial Supervisory Service
Best performer for one-company/one-academic financial education practice evaluation
Ministry of Strategy and Finance
2016 Ministerial commendation from the Ministry of Strategy and Finance for excellent per-
formance in establishing a Won-Yuan market
Ministry of Health and Welfare
Ministerial commendation at the 2016 Korea Sharing Awards
Ministry of Land, Infrastructure and Transportation
Korean Presidential Commendation for Merits in Housing Welfare
Joong-Ang Daily & Korean Association for
Research of Industrial Security
Grand Prize at the 1st Korea Industrial Security Awards 2016
Ministry of Trade, Industry and Energy
Ministerial Prize for Excellent Security Management in 2016
Woori Bank
Annual Report 2016
031
EXPLORING
OPPORTUNITIES
Who is discovering new value?
DISCOVERING
NEW VALUE
EXPLORING
OPPORTUNITIES
In meeting the needs of an ever-changing financial world, Woori
Bank creates connections between finance and markets to ex-
plore new opportunities. In today’s financial market environment,
which involves exposure to a variety of risks, we carry out con-
stant research on ways to reduce risks and maximize value and
benefits for our shareholders and customers.
WOORI BANK
DISCOVERING
NEW VALUE
Risk Management
Risk management has become essential in strengthening the competitiveness of financial institutions. Based on know-
how accumulated through past crises, Woori Bank adopted risk-adjusted performance measurement (RAPM) in 2002,
the first time this had been done in the Korean banking sector, to firmly establish advanced risk management systems by
successfully introducing the Basel II and III protocols. Believing that profit sources are a result of effective risk manage-
ment, Woori Bank will solidify its status as a leading bank through the implementation of top-tier risk management.
2016 in Review
Woori Bank
Annual Report 2016
036
To ensure the successful privatization of the bank in the
face of a fluctuating financial environment, Woori Bank’s
Risk Management group set proactive risk management
as its goal to emerge as a world-leading financial group.
It then concentrated on improving asset soundness to
strengthen the fundamentals of the bank.
Our particular focus was on taking preemptive measures
targeting high-risk assets to reduce credit risks—the big-
gest risk factor in banking operations—by de-qualifying
high-risk borrowers. As a result, asset quality has signifi-
cantly improved.
In addition, our non-performing loans (NPL) ratio (excluding
exposure to Korea’s four major shipbuilders) improved
from 1.24 percent at the end of 2015 to 0.91 percent a
year after, while the nominal delinquency ratio declined
from 0.82 percent in 2015 to 0.46 percent at the end of
2016. Our quality asset percentage also increased from
69.5 percent in 2015 to 75.5 percent at the end of 2016.
With a restructured operational risk management system
and improved stress test program in place, Woori Bank
saw considerable improvements in areas other than credit
risks in 2016, thereby enhancing the bank’s overall risk
management capability.
High net worth assets of BBB0 1) and above
As of the end of
2015
As of the end of
2016
(Unit:KRW)
Changes
Balance
Percentage
59.8 trillion
62.9 trillion
Up 3.1 trillion
69.5%
75.5%
+6%p
Note 1) BBB0 : Standard targets for calculation of BRR
Preemptive Action on Problem Loans
Risk Management
High-net-worth-assets
of BBB0 1) and above
75.5%
As of the end of 2016
+6%p
69.5%
As of the end of 2015
Note 1) BBB0 : Standard targets for
calculation of BRR
In 2016, Korea’s record-high household loan volume
and growing number of marginal borrowers in the wake
of worsening corporate profits called for intensive asset
quality control by banks.
For its part, Woori Bank concentrated its efforts on
controlling problem loans by taking preemptive steps to
target potential problem loans. The first step it took was
tightening its mortgage loan criteria to prevent insolven-
cies of household loans at source while also establishing
a process to look more closely into borrowers’ ability to
repay debts, which ultimately helped the bank abstain
from extending new credit to high-risk borrowers.
As with corporate borrowers, exposure to industries with
growing risks, such as shipbuilding, construction and
shipping, shrank by KRW 3.3 trillion over the previous
year—the largest decrease among Korean banks.
At the same time, we addressed our corporate account-
ing fraud monitoring system, which strengthened our
ability to verify corporate accounting fraud and insolvency.
We also bolstered our review process of problematic bor-
rowers by discovering blind spots in loan reviews through
an established system for constant monitoring of marginal
companies and reviewing of affiliates.
2017 Plans
Woori Bank’s Risk Management Group set as its main
goal for 2017 upgrading its risk management system to
make Woori Bank stronger than ever.
In addressing this aim, the first measure we are taking
is to establish a default diagnosis system, which is es-
sentially a big data-based risk management system. To
prevent insolvency, we are also initializing an insolvency
diagnosis dashboard that analyzes various structured
and unstructured data, such as the client lists of borrow-
ers, affiliates of borrowers, and news coverage so as to
pre-emptively detect warning signs concerning insolven-
cy prior to Woori Bank extending any loans.
In meeting the recent growth in the volume and value of
non-face-to-face (NFTF) transactions through advanced
financial technology, or FinTech, we are developing an
exclusive NFTF channel credit rating model to cater to
the needs of NFTF clients, while also working on a pro-
cess to pinpoint our highest performing clients.
Our efforts to remain fully prepared for risk-related reg-
ulatory reforms will continue in 2017. While developing
a standard approach measurement system to reinforce
our market risk calculation methodology, we plan on sig-
nificantly improving our asset-liability management (ALM)
system in response to upcoming interest rate risk regula-
We spent much of 2016 improving our risk management
system as well as our credit risk management system. To
begin, we restructured our operational risk management
system, which provided for higher convenience and effi-
ciency in our management of operational risks. In addi-
tion, the department's special mascot was used to make
our operational risk management more accessible and
convenient, thereby boosting operational risk manage-
ment effects at the branch office level. Plus, risk manage-
ment tips and countermeasures differentially applicable by
risk type and/or a branch office’s specific needs helped
raise employee understanding and awareness of opera-
tional risk management. The improved stress test system
also refined our stress test analysis capabilities, with the
resultant stress test findings reflected in developing risk
management strategies and business plans for 2017.
Furthermore, our risk management scope and coverage
also expanded in tandem with the growing size of our
overseas branch network. In an effort to avoid any con-
centration of capital at risk (CaR) exposure, we distributed
the Group’s total CaR to subsidiaries with asset sizes
exceeding KRW 1 trillion in China, Indonesia and the U.S.,
and concurrently verified the present status of risk man-
agement practices at overseas operations. Prior to any
cross-border mergers and acquisitions, we scrutinized all
risk factors associated with acquisition targets to minimize
our own risks arising from global expansion.
tions that are expected to be strengthened soon.
As part of our drive to bolster our credit risk manage-
ment capabilities, we will update the loss given default
(LGD) estimating system and retail credit rating model to
reflect the latest data. In step with the expansion of our
investment banking operations in pursuit of new growth
engines, an IB asset monitoring system is also set to be
completed in the first half of 2017.
Furthermore, in anticipation of the diversification of risk
factors in tandem with our expansion into overseas mar-
kets, we will spare no effort in supporting our local sub-
sidiaries to reinforce their risk management capabilities
and localize their risk management systems.
Woori Bank
Annual Report 2016
037
Retail Banking
The Retail Banking Business Group oversees marketing strategies for retail consumers, new market penetration, retail
marketing organization management, and strategy-building for marketing channels for university and hospital clients. In
our constant effort to develop new markets and manage customer relationships at the highest level, our prime concern
remains providing customized products and services to our clients.
In 2016, Woori Bank’s commitment to developing
innovative and differentiated financial products re-
mained consistent with its retail client base, which now
exceeds 21.6 million customers. The bank’s signature
programs for attracting new retail customers—Baby
Project, School Project and Company Project—were
further upgraded in 2016 to offer different financial
products and services according to different life stag-
es, from infants and students to workers, housewives
and seniors. As a proactive response to the bank ac-
count switching system that went into effect in 2016,
we concentrated on expanding the number of loyal
customers throughout the year. To that effect, we en-
tered into new contracts for Prime Power Loans (PPL)
with 35 corporate clients, thereby attracting new credit
loans for high-yield customers. We also extended new
loans based on Employee Stock Ownership Plans
(ESOP) for corporate clients that carried out Initial Pub-
lic Offerings (IPO).
Additionally, we continue to offer portable services for
customers through our Tablet Branch Office Service,
visiting customers at a time and place of their choice
to ensure the highest levels of satisfaction.
2016
2015
2016
2015
105.0
+10.4%
95.1
88.0
81.3
+8.2%
2016 in Review
Total Loans
of Retail Banking
(Unit:KRW trillion)
Total Deposits
of Retail Banking
(Unit:KRW trillion)
Woori Bank
Annual Report 2016
038
Total Retail Banking
Customers
(Unit:million people)
21.7
As of the end of 2016
+2.9%
21.1
As of the end of 2015
2017 Plans
Launch of Charity Donation Tie-in Products
In 2016, Woori Bank introduced a new product called
Woori Care Plus Package, which is helping the bank
attract new clients and increase transactions with
existing clients, while also allowing them to donate to
social causes. The bank offers a special preferential
interest rate for subscribers to this deposit plan only
when they agree to donate a portion of the additional
interest upon maturity to one of two charities, Child
Fund Korea or Good Neighbors Korea. The additional
option of a donation beneficiary was well received by
clients. In order to induce more clients to become loyal
to Woori Bank, prime interest rates were also specially
offered to new customers as well as to existing clients
who expanded their transaction volume with the bank.
As a result, the Woori Care Plus Package Deposit Plan
secured KRW 187.3 billion in 2016 through 13,151 de-
posit accounts and KRW 82.9 billion through 29,398
installment deposit accounts, significantly increasing
the number of high-performing clients.
Comprehensive Financial Services through
Branch in Branch (BIB) Operations
Woori Bank has begun offering cutting-edge compre-
hensive financial services through branch in branch
(BIB) operations since it signed a business alliance with
Korea’s No. 1 securities firm, Samsung Securities, in
March 2015.
In 2016, four more BIB outlets opened outside of bank
branches in addition to the existing three BIBs at Woori
Bank branches and one at a Samsung Securities’
branch. Providing more than just financial transaction
services, BIB outlets also function as sales and services
channels and therefore boost Woori Bank’s status in
dispensing advice and selling products.
In 2017, we will continue to develop new hybrid finan-
cial products in collaboration with Samsung Securities
and add new BIB outlets to develop synergy between
the banking and securities brokerage business as well
as marketing directed at individual high net worth cli-
ents.
Channel Network Optimization for Higher
Efficiency
In coping with all the changes occurring in the financial
market environment, Woori Bank is strategically proac-
tive when moving into areas with new growth potential,
such as Innovation Cities and industrial complexes,
while integrating and relocating certain low-profit, over-
lapping and low-profile branches. In 2016, we added
four new branch offices, integrated 66 branch offices
and relocated 16 branch offices. As a result, the rein-
forced efficiency in branch network operation helped
us improve profitability, with a total of 894 branch offic-
es in operation as of the end of 2016.
Retail marketing capabilities were also reinforced with
the introduction of the personalized branch service
established in 2015 to improve the competitiveness of
the sales organization through increased efficiency in
channel operations. As a result, a dual track was set
up in which financial centers focus on corporate clients
while personalized branches channel their marketing
resources towards retail customers.
At the same time, we streamlined teller windows from
the previous four channels down to two—a General
Product Sales & Service Team and a Total Banking
Service & Advisory Team—in a bid to reinforce the
efficiency of personnel management and strengthen
employee competencies. The resultant surplus per-
sonnel were reassigned to outbound marketing cam-
paigns, which led to heightened customer relationship
management and greater marketing activities to attract
new customers.
In anticipation of fierce competition amid the prolonged
low-growth and low-interest rate market environment
in 2017, the Retail Banking Business Group will con-
centrate on expanding its customer base. In addition
to business alliances with governmental agencies and
certain lifestyle-related businesses, we are stepping up
our marketing towards attracting new customers while
also striving to turn inactive customers into active cus-
tomers, especially among freshly employed graduates,
housewives, sole proprietorships, foreign residents
and retirees. On top of this, we will further expand
our life-cycle marketing initiatives, which offer differ-
ent products and services depending on one’s stage
in life, as we continue our event-oriented marketing
campaigns to preemptively respond to the expanded
scope of the bank account switching initiative sched-
uled for 2017.
Furthermore, we plan on running a pilot program for
a new channel strategy called Hub & Spoke to take
full advantage of marketing synergies by matching
regional headquarters with nearby branch offices and
area-based joint sales activities.
By deploying external sales experts to operational data
stores (ODS) introduced in 2016, as well as enhancing
process efficiency, we will further expand our sales
channels in 2017 while doing our best to attract new
customers.
Woori Bank
Annual Report 2016
039
Wealth Management
The Wealth Management (WM) Group is in charge of overseeing Private Banking (PB) services that target high net worth
(HNW) clients. As of the end of 2016, the WM Group consisted of three departments—the Wealth Management Strategy
Department, Wealth Management Business Department and Wealth Management Advisory Center—with 10 teams under
their supervision. A total of 645 private bankers and financial assistants work together to provide Korea’s best compre-
hensive asset management and consulting services to 166,076 HNW customers through an independent PB brand called
Two Chairs and through 632 sales channels nationwide.
WM Customer Base Expansion and
Specialized Advisory Services
After classifying clients that have more than KRW 50
million but less than KRW 100 million in deposits as sub-
HNW clients, Woori Bank then assigned asset managers
(AM) to serve this customer segment exclusively in 2016.
The resultant expansion of the WM customer base
and higher number of employees tasked with serving
these sub-HNW clients increased the number of private
banking (PB) clients (those with cash deposits of at least
KRW 100 million) by more than twofold, reaching 22,000
people by the end of 2016.
In December 2016, Woori Bank reshuffled its WM
business organization to reinforce its competitiveness
and added a WM Business Department that was
tasked with developing and marketing wealth manage-
ment products. The existing WM Strategy Department
also took on two new teams, the WM Platform Team,
which will develop non-face-to-face (NFTF) wealth
management platforms and a company-wide custom-
er return management system, and a Future Planning
Team that will offer clients customized retirement solu-
tions depending on their life cycle stage. These addi-
tions definitively strengthened our client-oriented WM
marketing capabilities.
In recognition of our outstanding strategies and ac-
complishments in wealth management, Woori Bank
became the first Korean financial institution to be
awarded a prize at the 2016 Wealth Management
Awards, hosted by World Finance, a U.K.-based glob-
al finance magazine.
2016 in Review
Woori Bank
Annual Report 2016
040
Fund product sales
increased in 2016
KRW 2.1 trillion
(The largest quantitative growth in
the recorded by the industry in Korea)
Total number of
WM customers
(Unit:1,000 people)
Total wealth management
banking deposits
(Unit:KRW trillion)
2017 Plans
Recruiting and Training WM Experts
In 2016, the WM Group invested in recruiting and train-
ing WM experts in order to reinforce its WM competen-
cies. As a result, 350 prospective PBs and FAs were
hired and subsequently received intensive training to
heighten their capabilities. In addition, the 645 existing
PBs received step-by-step training courses tailored to
their individual skillsets, while all employees received
online training in WM every morning to generate inter-
est in and broaden sales skills related to WM products.
Sizeable Growth and Profitability in Funds
& Bancassurance Sales
Sales of hybrid products through business alliances
achieved sizeable growth and profitability in 2016. Fund
product sales increased KRW 2.1 trillion from the pre-
vious year, the largest quantitative growth recorded by
the industry in Korea. Continuing with its remarkable in-
dustry-leading sales record in bancassurance in 2015,
our bancassurance sales and profitability robustly out-
performed all Korean competitors yet again in 2016.
Proven Capabilities in ISA Operations &
Introduction of a New PEF Sales Approach
The Wrap-ISA (individual savings account) that we
introduced in April 2016 topped all commercial banks
in terms of aggregate returns and annualized perfor-
mance for six months in a row. These remarkable re-
sults were all the more amazing considering that other
Korean banks took advantage of their financial group
structure through cross-selling with peer securities
subsidiaries. Despite the disadvantages associated
with developing competitive products without the sup-
port of a financial group structure, our stable perfor-
mance results in asset management also allowed for
industry-high returns.
Furthermore, we were the first Korean commercial
bank to adopt a new private equity fund (PEF) sales
model through seminars for customers where they
could give us firsthand suggestions and feedback in
the product planning stage. As a result of this innova-
tive initiative, we sold approximately KRW 2 trillion in
PEFs, the highest amount in the industry.
2016
2015
2016
2015
166.1
+21.4
47.6
+6.9
144.7
40.7
Woori Bank declared 2017 as the starting year for
client-oriented wealth management services. To that
end, we plan on solidifying our customer-oriented sales
platform, especially with respect to systems, products,
employee competencies, marketing and retirement
planning.
To begin with, we are adopting technologies to develop
a new customer-oriented total wealth management
platform and customer management system. We also
have a private equity fund planned in which clients and
sales staff at the branch office level can make their
voices heard in the product development stage. In a bid
to meet the most exacting needs of customers, we will
also introduce more hybrid products through enhanced
collaboration with securities firms and insurance com-
panies, while also bolstering our product competitive-
ness and global investment strategies through strategic
alliances with outstanding investment advisors and
leading global asset management companies.
To assist competency-building efforts among em-
ployees, we are planning to open an asset manage-
ment-specialized corporate university called Woori Asset
Management University (WAMU), which will offer system-
ic training programs to foster professional PB experts.
In terms of marketing, we are departing from traditional
marketing methodologies and instead expanding our
WM client base. At the same time, we are personaliz-
ing our WM channels through the use of outdoor sales
(ODS) devices.
Additionally, we are seeking strategic alliances with
service agencies that cater to senior citizens to rein-
force our retirement pension plan sales as we also ex-
pand the scope of our financial/non-financial services
required for retirement. We also plan on adding a re-
tirement plan platform specifically for our senior clients
to our NFTF channels so that we can offer one-on-one
WM services on top of non-financial services.
Woori Bank
Annual Report 2016
041
Pension & Trust Business
As the retirement pension market continues expanding, the Retirement Pension Business Department was launched in
2009 to support the efficient management of retirement resources for retail customers. From the initial stages of adopting
a retirement pension system, the Pension & Trust Business Group provided differentiated customized services through
comprehensive retirement pension consulting.
We lead Korea’s retirement pension market by offering comprehensive financial services. This includes optimal customized prod-
ucts that suit our customers’ investment tendencies through advanced processes and highly experienced investment specialists.
In order to guarantee a stable retirement for people
and also prepare for changes in the labor market,
such as a rapidly aging population, Woori Bank has
been fostering customer-oriented businesses with a
long-term perspective.
Customer-focused Marketing Activities
Woori Bank provides subscribers (both companies
and employees) with monthly newsletters on the lat-
est trends and current issues concerning retirement
pension funds, tips on asset management, and other
useful information. These same subscribers can also
access our new Happy Life Retirement Pension Life
Deposit plan, which allows for the more convenient
management and monitoring of individual pension fund
investments.
More recently, we introduced a New Retirement Pen-
sion System that reflects the latest developments in the
pension market. Our service scope further improved
with Welcome Letters for new subscribers and a
Happy Call System that handles customer services.
Additionally, our differentiated services include training
programs for our subscribers to help them understand
the operation of retirement pension funds.
As of the end of 2016, the retirement pension funds
under our management increased by KRW 1,655.3
billion from the previous year, reaching KRW 12,991
billion, with the number of subscribers amounting to
1,391,492 employees from 55,640 companies. In
2016, we paid special attention to promoting an un-
bundled service in which the Korean Workers’ Com-
pensation & Welfare Service serves as the operator
and Woori Bank serves as the asset manager. By the
end of 2016, 227,264 employees from 28,369 compa-
nies were subscribers to this service.
2016 in Review
Woori Bank
Annual Report 2016
042
No. of Companies
Subscribed to Woori’s
Retirement Pension Plan
(Unit:Companies)
No. of Employees
Subscribed to Woori’s
Retirement Pension Plan
(Unit:People)
2017 Plans
12,991
2016
+14.6%
Retirement Pension Assets
(Unit:KRW billion)
11,336
2015
58.54
2016
+10.3%
Risk-adjusted Operating Income
(Unit:KRW billion)
53.09
2015
2016
2015
55,640
+9.2%
50,971
•Including companies subscribed to the Korean Workers’ Compensation & Welfare Service
2016
2015
1,391,492
1,320,355
+5.4%
•Including employees of companies subscribed to the Korean Workers’ Compensation & Welfare Service
retirement pension market by drawing on our highly
experienced staff, our training support system, a wide
variety of products, specialized management capabil-
ities, and a differentiated retirement planning service
platform.
While Korea is transforming into a super-aged so-
ciety, Woori Bank is actively carrying out marketing
activities to secure a broad profit base and long-term
customers by making retirement pension a key growth
engine. This is being carried out by taking into consid-
eration the importance of the retirement market for the
banking sector. In order to strengthen our position as
a leader in the pension business, the Retirement Pen-
sion Business Department will secure a foundation for
growth in 2017 through customized marketing strat-
egies targeting specific customer groups, while im-
proving customer revenues through enhanced product
investment capabilities. With a focus on improving the
efficiency of our sales channels, the restructuring of our
retirement pension system and adoption of Business
Process Reengineering (BPR) will further enhance our
business capabilities. In the future, we aim to lead the
Woori Bank
Annual Report 2016
043
Corporate Banking
As of the end of 2016, Woori Bank had the largest number of corporate client transactions among all Korean banks. The
Corporate Banking Business Group provides optimal financial services that cater to the specific needs of our diverse cor-
porate clients, including some of the nation’s biggest corporate groups like Samsung, LG and POSCO. Spearheading our
corporate banking services at Woori Bank are the general managers that work at the Corporate Banking Headquarters.
All of these men and women are well versed in corporate banking and serve as the engine behind the bank’s impressive
growth to emerge as Korea’s leading corporate bank. At the same time, Corporate Banking general managers working at
banking centers are in charge of corporate clients, their affiliates and partner companies as well as retail banking for the
employees of these clients. We take tremendous pride in our 118 years of providing top-of-the-line financial services to
our corporate clients as we helped them grow into major global players, and will strive to offer our expertise to an even
larger number of customers in the future.
As of the end of 2016, the Corporate Banking Busi-
ness Group (including the Corporate Finance Center)
recorded total assets of KRW 26.5 trillion, an operating
income of KRW 704 billion, and an export/import fi-
nancing volume of USD 243.6 billion.
In 2016, the Corporate Banking Business Group main-
tained its No.1 market share in loans to main creditors,
thereby reaffirming that we are the undisputed leader
in corporate finance.
Woori Bank is currently exploring various financial op-
portunities through the Woori Diamond Club, a meet-
ing of CEOs from large Korean corporations, while also
strengthening the relationships we enjoy with large
corporate clients. In response to growing demand for
heightened corporate social responsibility, we are de-
veloping products that will facilitate mutual prosperity
among corporate partners and increase widespread
support for a cooperative culture.
2016 in Review
Operating income
(Unit:KRW billion)
704
(As of the end of 2016)
Woori Bank
Annual Report 2016
044
Total assets of corporate
banking operations
(As of the end of 2016)
KRW 26.5 trillion
Total credit exposure to
main debtor groups
(As of the end of 2016)
KRW 26.7 trillion
Continuously Strengthening Relationships
As our corporate customers have developed into
more important global entities, their financial needs
have changed rapidly and become more diverse. In
line with this, Woori Bank has operated the Woori
Diamond Club, a meeting of CEOs from large Korean
corporations, since 2003. This year marks the 14th
anniversary of the club and a time to strengthen our
relationships with our corporate customers, as well as
provide services that respond appropriately to changes
in the business environment by identifying the fi nancial
needs of our customers in a timely manner.
Extending Support for
Large Corporations/SMEs
At a time when corporate social responsibility (CSR) is
being particularly emphasized, Woori Bank has signed
cooperation agreements with large corporate custom-
ers and offers product packages to extend funds to
SMEs at low interest rates.
In 2008, we launched our ‘Win-Win Partnership Loan
for Suppliers of Large Corporations’, which, by the end
of 2016, had extended funds worth KRW 619.1 billion
to 2,368 companies. In addition, the ‘Win-Win Partner-
ship Loan’ that was developed in 2013 received a sys-
tem upgrade in 2015, with funds worth KRW 327.4 bil-
lion having been extended to 3,535 companies by the
end of 2016. As a bank that has cultivated meaningful
relationships with many large corporate customers,
we operate a partnership system through a variety of
customer networks aimed at reducing fi nancial costs
to SMEs, thereby contributing to the shared growth of
both large corporations and SMEs.
Developing and Supporting Customized
Financial Products
In step with rising demand for low-risk/high-return
investment products during a prolonged period of low
interest rates, we provided a corporate-oriented Struc-
tured Hybrid Deposit product to corporate clients that
want high-interest rate time deposits. In partnership
with the Export-Import Bank of Korea, we also mar-
keted export factoring without recourse for exporters,
non-letter-of-credit sales of export receivable fi nancing
with reduced risk when the importer refuses settle-
ment, and debt ratios on the financial statements of
exporters, thus stabilizing cross-border transactions
with effi cient fi nancial services for exporters.
Woori Bank was the main creditor bank of 13 large corporations as of 2016.
(Total number of large corporations under main creditor bank management: 39)
2017 Plans
Guided by the business goal in 2017 of readying
ourselves for a brighter future as an even more com-
petitive corporate banking institution, the Corporate
Banking Business Group is poised to carry out innova-
tive marketing practices in the fi rst year of privatization.
To that end we have come up with the following four
strategies.
First, we will explore new fi nancial products and mar-
kets to diversify revenue sources while also engaging
in profi t-oriented sales activities with a normal interest
rate/fee pricing policy.
Secondly, we will find a balance between adequate
growth of loans to well-performing large corporations
and eff ective risk management.
Thirdly, we will expand our all-in margin business activ-
ities through active transactions with business partners
and employees of large corporate clients.
Lastly, we will seek new revenue sources at the bank
level through cross-industry partnerships and joint
marketing.
Woori Bank
Annual Report 2016
045
SME Banking
The Small and Medium Corporate (SME) Banking Business Group oversees financial services to corporate clients, man-
aging KRW 75 trillion in loans extended to 1.38 million SOHO and SME clients as of the end of 2016. Woori Bank offers
a variety of financial/non-financial services as well as competitive products to SME clients to ensure the highest level of
customer satisfaction. More importantly, we foster and manage SME relationship managers (RM) who are versed in SME
finance and asset management to deliver Korea’s best financial services.
In 2016, asset quality significantly improved at Woori
Bank. In fact, the KRW 3.7 trillion reduction in po-
tentially insolvent assets raised the percentage of
performing assets to 74.2 percent, with the number of
SOHO and SME clients increasing by 90,000 over the
previous year.
While carrying on with the marketing strategy we es-
tablished in 2015, which focused on attracting and re-
taining high-yield SME clients in 2016, we continued to
direct our attention towards strategic targets through
technology financing, policy financing and guaran-
tee-secured loans. Another important strategy in 2016
had to do with cross-selling for customer lock-in and
maximization of profitability, while also introducing
diverse privilege benefits to enhance customer satis-
faction and the quality of services offered to our SME
clients. All the while, we also trained and fostered SME
financing experts.
Marketing Activities Targeting
High-Yield SME Clients
Throughout 2016, just as in 2015, the SME Banking
Business Group continued updating marketing infor-
mation on targets by key product and customer class
as well as for partner firms of large corporations to as-
sist branch offices with their campaigns to attract high-
yield corporate clients. In January 2016, we launched
High-yield Enterprise Master Loan II, High-yield En-
terprise Power Tech Loan and the SOHO Areumdri
Loan, all of which come with competitive interest rates
offered only to high-yield enterprises along with extra
credit limits. By the end of 2016, these three new loan
products accounted for a total of KRW 8.8 trillion in
sales. As a result of our consistent marketing efforts
to expand high-yield assets, the size of loans to high-
yield corporate clients rated BBB and above increased
by KRW 6.8 trillion at the end of 2016.
2016 in Review
Woori Bank
Annual Report 2016
046
Number of SOHO and
SME clients increasing in 2016
90,000
Reduction in potentially
insolvent assets
KRW 3.7 trillion
Percentage of performing
assets
74.2%
Concentration on Technology Financing & Re-
inforcing Growth Potential
In order to increase high-yield assets concentrated on
technology financing, our marketing focus remained on
securing an early mover advantage in the market in 2016,
just as it did in 2015, through marketing activities aimed at
corporate clients with advanced technologies and through
the provisioning of pre-approved lines of credit. Our newest
products launched especially for quality corporate clients
with advanced technologies include the High-yield Corpo-
rate Power Tech Loan and Tech Start-up Guarantee, both
of which have reinforced our product line-up for stronger
sales competitiveness. Moreover, our marketing efforts to
increase the volume and number of borrowers related to
technology financing resulted in a KRW 3.6 trillion increase
in value by the end of 2016, with a jump in the number of
borrowers amounting to 6,800. Additionally, an increase
in the number of corporate clients by 90,000, as well as
a KRW 2 trillion growth in low-cost deposits, significantly
contributed to our strong profitability and loan growth.
Retaining Customers & Offering
Top Consulting Services
As a means to hone our competitive edge in business
consulting ahead of anticipated fierce competition in the
financial sector and to meet the diverse needs of custom-
ers, we are actively implementing various programs that
feature preferential offers and consulting services. The
preferential benefits offered to membership clients and loy-
al customers who have carried out transactions with Woori
Bank for an extended period of time include expenditures
for family events and employee training. Thus, Woori Bank
has proven yet again that it is making strenuous efforts to
remain the most reliable financial partner for both individual
and corporate clients.
Woori Bank’s business consulting service draws on the
bank’s unparalleled experience in Korea’s financial sector, of-
fering a number of consulting programs to corporate clients
in the fields of business consulting, CFO consulting, family
business succession, and operations consulting. In 2016,
we carried out a total of 114 consulting projects for clients.
Diversified Special Products
In 2016, the SME Banking Business Group introduced a
wide range of specialized products, including the High-
yield Enterprise Master Loan II and the Woori Credit Card
Member Store Power Loan, a preferential product for
high-yield SOHOs and SMEs to increase SOHO and SME
banking loans.
In support of government policies, we also marketed the
Woori Value Added Tax Buyers’ Tax Payment Deposit to
attract new clients and low-cost deposits. For this same
purpose, we marketed our WiBees CVS Honey Deposit
product as a preferential product for sole proprietors in
the latter half of 2016. In step with governmental tech
financing prop-up measures, we diversified our product
line-up for SME clients that feature leading technologies.
This included the High-yield Enterprise Power Tech Loan
and Tech Start-up Guarantee, both of which balanced our
business competencies for corporate and sole proprietor
enterprise clients alike.
Promotion of Policy Financing &
Guaranteed Loans
In promotion of policy financing, the SME Banking Busi-
ness Group continually sought strategic alliances with
local governmental agencies and public organizations in
2016. We also strengthened the interest rate competi-
tiveness of policy financing and conducted job training
programs in order to reinforce sales competencies. Spe-
cifically, we launched two new products, one called the
S-Plus Start-up Support Loan, which is guaranteed by
the Korea Credit Guarantee Fund, and offers preferential
interest rates on guarantees and subsidies for guarantee
fees targeting high-yield SMEs in their early stages of op-
erations, as well as a second product called Tech Start-
up Loan, which is guaranteed by the Korea Technology
Finance Corporation, and is a preferential product for
SMEs with outstanding technological competencies. As
a result, our customer base for high-yield SME clients
grew substantially throughout 2016. In addition to cor-
porate clients, we also continued offering policy financ-
ing tailored to the needs of sole proprietary enterprises,
providing KRW 129.1 billion in SOHO Market Promotion
Funds and KRW 58.6 billion through the Seoul General
Business Stabilization Fund to further expand our cus-
tomer base with this customer segment.
2017 Plans
In 2017, the SME Banking Business Group will pur-
sue marketing activities to increase quality assets and
profitability while also retaining high-yield clients. Plans
are now in place to launch new products targeted at
different target clients so as to attract new customers.
Since the bank’s successful privatization at the end
of 2016, the SME Banking Business Group plans
to reinforce financial services that will lead to mutual
prosperity for the bank as well as for clients. We will
also continue to strengthen our competencies when
it comes to attracting high-yield clients and sales ex-
perts so we can expand our profit base through total
financial services, while bolstering FinTech-based SME
platform sales to further expand our financing to foster
SMEs that have competitive technologies.
Woori Bank
Annual Report 2016
047
Institutional Banking
The Institutional Banking Business Group consists of the Institutional Banking Product & Marketing Department, which
serves the central government, local governments and public institutions, and the Public Fund Sales Department, which
manages the municipal and provincial treasuries of local governments and the courts.
In fact, we are the only Korean bank that employs institutional banking specialists (institutional customer relationship
managers), all of whom provide first-rate financial services to institutional customers. As of 2016, our institutional cus-
tomers included the Seoul Metropolitan Government and its 24 district offices, the Ministry of Land, Infrastructure and
Transport, the Korea Land & Housing Corporation, and the Korea Railroad Corporation. Such an impressive list of cus-
tomers only reaffirms our position as the primary choice of bank by the largest number of public institutions.
2016 in Review
On top of the knowhow we have gained from our 101 years
of experience as Seoul Metropolitan Government’s treasury
bank, Woori Bank has also become a leading financial insti-
tution for residents around the country through our Institu-
tional Banking Business Group, which contributes to region-
al development and helps expand the scope of transactions
we carry out with the central government, local governments
and major public agencies.
In line with governmental policies, Woori Bank provides spe-
cialized services for government agencies and their planned
relocation to outlying regions, including Sejong-si. As of
2016, we have locked in 42 of 154 institutions that are to be
relocated outside of Seoul in our institutional customer base,
with plans to provide advanced financial services to all of
these institutional clients and their employees. As of the end
of 2016, the Institutional Banking Business Group managed
total deposits of KRW 24.7 trillion and total loans worth
KRW 1.2 trillion through transactions with 4,200 institutional
customers.
24.7
2016
+2.2
Total Deposits
(Unit:KRW trillion)
22.5
2015
Woori Bank
Annual Report 2016
048
Number of Institutional
customers
4,200
Major Institutional Customers
Seoul Metropolitan
Government & its 24 district offices,
Gwangmyeong City
Major public agencies
customers
• Korea Land & Housing Corporation
• National Pension Service
• Ministry of Land
• Infrastructure and Transport
• Korea Railroad Corporation
• Korea Institute for Advancement of
Technology
• Agency for Defense Development
• Korea Evaluation Institute of Indus-
trial Technology(KEIT)
• Korea Institute of Energy Technolo-
gy Evaluation & Planning
• Korea Electric Power Corporation
(KEPCO)
• Defense Acquisition Program Ad-
ministration
• National Health Insurance Service
• Korea Post
• Korea Institute of Startup & Entre-
preneurship Development
• Korea Creative Content Agency
2017 Plans
cash management system (RCMS) as well as R&D
fund management and expenditures to total financial
services to companies with successful R&D results.
Since renewing our contract as the exclusive bank for
international agreements and foreign exchange trans-
actions for the Defense Acquisition Program Admin-
istration, an executive branch of the Korean Govern-
ment, we will be providing a variety of financial support
measures for the payment and settlement of goods
purchased from overseas for the next three years.
Maximizing Synergies from New Business
Opportunities
The Institutional Banking Business Group not only
provides direct financial services to institutional cus-
tomers, but also discovers and offers business linkage
opportunities to SMEs and individuals involved in an
institution’s business. In 2016, we participated as a
financial partner in KEPCO’s School Project to elicit
students and parents from 2,000 schools where the
Korea Electric Power Corporation (KEPCO) is installing
solar power generation facilities.
Additionally, we are making use of our industry-first
mobile WiBee Platform to support the Human Re-
sources Development Service of Korea (HRD Korea) in
its initiative to alert customers of any dormant claims
with HRD Korea’s service. This has secured us a foot-
hold to access 560,000 foreign workers as prospective
customers.
Aiming for Another Century of Serving as
Seoul Metropolitan Government’s Treasury
Bank
Since signing a treasury management agreement with
Gyeongseongbu (Seoul) in 1915, Woori Bank has done
a formidable job as Seoul Metropolitan Government’s
treasury bank by not only collecting tax revenue, but
also by managing all annual expenditure payments.
In 1988, we launched Seoul Metropolitan Govern-
ment’s first comprehensive management system for
revenues and expenditures. Then, in 1991, we estab-
lished the OCR (Optical Character Recognition) Center,
epitomizing our century-long service as the city's mu-
nicipal treasury bank. Moreover, the introduction of our
ETAX system in 2001, an annual expenditure e-banking
system in 2004, and a revenue e-banking system and
an integrated treasury management system in 2011
equipped us with globally competitive treasury man-
agement capabilities. Based on our advanced treasury
management system and high-quality specialists in all
related fields, Woori Bank has become a stalwart part-
ner of Korea’s capital city, helping to handle Seoul Met-
ropolitan Government’s tax and financial management
tasks, providing a convenient tax payment system for
citizens, and helping develop local communities.
Supporting New Governmental and Public
Agency Projects
In order to effectively support public projects, we have
established a System Sales Team within the Institu-
tional Banking Products & Marketing Department. As
a result, we have earned the chance to participate as
the exclusive settlement bank for Korea Power Ex-
change’s project to upgrade the REC Trading System
to facilitate direct transactions and payment clearing
between the buyers and sellers of renewable energy.
In addition, we were selected as the exclusive bank for
managing the Ministry of Trade, Industry and Energy’s
R&D funds, thus providing extensive financial services
that now range from the management of the real-time
In 2017, the Institutional Banking Business Group is
preparing for the official selection process to be re-
named the treasury bank for the Seoul Metropolitan
Government and its sub-district offices for 2018. In ad-
dition, we are focused on enhancing the quality of our
services as a financial partner to institutional clients by
providing top-quality systems to ensure effective cap-
ital management for the government and other public
agencies and by exploring various alliance services
linked to a wide range of investment projects. Further-
more, we will seek to increase transactions with public
agencies that are being relocated to regional Innova-
tion Cities, while expanding our financial service line-
up to serve a greater number of employees at these
agencies.
Woori Bank
Annual Report 2016
049
Real Estate Finance
For systematic and professional management of real estate financing, the Housing Finance Division was enlarged into
the Real Estate Finance Business Group. The group also manages the Ministry of Land, Infrastructure and Transport’s
National Housing and Urban Fund 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 National Housing Fund products that are available for
low-income individuals/families.
2016 in Review
In 2016, the Real Estate Finance Business Group
ranked 1st in market share among all national hous-
ing and urban funds. Recognized for our excellent
performance over the past seven years, we have
been providing a variety of real estate finance prod-
ucts to our customers as a general treasury bank for
the National Housing and Urban Fund. In addition,
we preemptively responded to the prolonged reces-
sion in the real estate market and played a leading
role in generating demand for real estate financing by
seeking to discover new markets.
Increased Customer Base as a Managing
Trustee Bank for the National Housing and
Urban Fund
The National Housing and Urban Fund project is crit-
ical to broadening financing options for consumers
of housing finance, including low-income individuals/
families. As the managing trustee bank of the proj-
ect, Woori Bank acted as the leader in funding and
implementing the project. As of the end of 2016, the
bank claimed a market share of 43.1 percent in loans
Real Estate Finance Group
(As of the end of 2016)
Mortgage Loans (Unit:KRW billion)
Fund Demand-Side Loans (Unit:No. of Subscription)
Housing Subscription Savings Plans (Unit:No. of Subscription)
Woori Bank
Annual Report 2016
050
Results
Market Share
Rank
80,958
317,819
5,200,122
26.4%
43.1%
27%
2
1
1
Ranked first in
market share
Demand-side Housing
Subscription Loans
43.1%
Housing Subscription
Savings Plans
27%
2017 Plans
for subscribers and a market share of 27 percent in
savings for housing trust subscriptions. Throughout
the year, 990,000 new customers subscribed to the
Housing Subscription Savings Plan in preparation for
a future real estate purchase. We will continue working
hard to expand the benefits we offer to a greater num-
ber of customers and make National Housing and Ur-
ban Fund products more accessible than ever before.
we were the first Korean bank to introduce mo-
bile-based loan products, which were made available
in 2016 on the bank’s mobile-only banking platform,
WiBee Bank. As it turned out, the WiBee Jeonse (Key
Money) Loan and WiBee Installment Payment Loan
gained an early foothold in the real estate product
sales segment through non-face-to-face (NFTF) chan-
nels.
Leading Korea’s Housing Finance Market
In 2016, the Real Estate Finance Business Group was
a leader in developing products and reforming systems
so that it can more proactively respond to changes in
financial markets.
The Group channeled its R&D resources into develop-
ing Internet/mobile access to its real estate financial
products to increase customer convenience. In fact,
Woori Bank is determined to maintain its dominant
market share as part of the National Housing and
Urban Fund in 2017. To that end, we will devote time
to expanding our share of the loan market, where de-
mand is exploding, specifically targeting the Monthly
Rent Loan, Beotimmok Jeonse (Key Money) Loan ,
and Housing Subscription Total Savings Plan. Draw-
ing on our advanced IT system and accumulated
experience and knowhow from funding and operating
numerous housing fund projects, we are poised to
assume a leading role in supporting residential stabili-
zation projects for customers and promoting national
housing projects in a sound manner. Furthermore, we
will remain an ardent proponent of the government’s
housing finance measures, while extending practical
financial aid to those who wish to buy their own home
through our optimal profitability and minimal-risk asset
structure. At the same time, we will keep introducing
more mobile-only real estate financing products for
higher customer convenience, thereby cementing our
position as an early mover in NFTF channel-based real
estate financing. In this regard, we have plans to in-
crease our mortgage loan balance by KRW 3.5 trillion
in 2017 to contribute to asset growth in the bank’s re-
tail banking business despite the economic downturn.
Woori Bank
Annual Report 2016
051
EXPANDING
HORIZONS
Who is transcending boundaries? TRANSCENDING
BOUNDARIES
EXPANDING
HORIZONS
Woori Bank is proudly broadening the boundaries of finance. The
lines drawn between local and global, finance and technology,
and geographical locations are blurring. As a result, we are ready
to offer new solutions for the future of finance in pursuit of a bet-
ter tomorrow. Committed to a better future, Woori Bank embraces
the global market with innovative ideas.
WOORI BANK
TRANSCENDING
BOUNDARIES
Smart Banking
The Smart Banking Business Group is in charge of establishing Woori Bank’s strategy for smart banking as well as the
exploration of new markets. In order to ensure a prompt response to the smart banking market, which has demonstrated
exponential growth, while also achieving market dominance in the electronic payment/remittance market in alliance with
ICT companies, the Smart Banking Business Department, Platform Business Department, FinTech Business Department
and ICT Support Center all fall under the umbrella of the Group. As of the end of 2016, 15.63 million customers had sub-
scribed to Internet banking and smart banking services. Along with roughly 6,500 ATMs—and by utilizing state-of-the-art
technologies and networks on smartphones and the Internet—we strive to remain a bank that caters to the most exacting
needs of our customers.
2016 in Review
In 2016, Woori Bank’s Smart Banking Business Group
maintained its position as a leader in the emerging
digital finance market as we completed development
of the WiBee comprehensive finance platform with the
launch of the WiBee Talk service, the first messenger
service launched by a Korean financial institution, and
WiBee Market, a financial product shopping mall.
Through business partnerships with mobile platform
operators, Woori Bank introduced a variety of financial
services that make use of advanced technology and
services before the competition. Moreover, our custom-
er-oriented, on-demand services, which were facilitated
by the launch of our O2O service and loan process in-
novation, allowed the bank to sustain its market position
as a leader in the digital banking market.
No.1
NO.1 in sales among all non-face-to-face finance-related products in Korea
NO.1 ranked smart banking subscription and active usage rate
NO.1 market share in non-face-to-face sales channels
Woori Bank
Annual Report 2016
056
Korea’s First Comprehensive Financial Ser-
vice Platform
Maintaining Our Leadership in FinTech
through Strong Business Alliances
Ranked 1st in Market Share
in smart banking subscriptions
and active usage rate among
bank-wide clients
Following the successful launch in 2015 of WiBee
Bank, a mobile-only banking service, we added WiBee
Talk, WiBee Members and WiBee Market services to
create a complete platform for fi nancial services.
In response to the rapidly changing market environ-
ment due to the entry of FinTech businesses, Woori
Bank has been seeking new business opportunities in
conjunction with O2O platform operators.
No.1 Market Share
52.5%
subscription rate
(As of the end of 2016)
34.1%
active usage rate
(As of the end of 2016)
Introduced in January 2016, WiBee Talk quickly took
root in the market, with subscribers surpassing the two
million mark as of September 21, and surpassing the
three million threshold by the end of the year.
As Korea’s first financial mobile messenger service,
WiBee Talk off ers a wide array of fi nancial services that
draw on WiBee’s extensive finance platform. Among
these new products, the WiBee Talk Deposit plan
offers preferential benefits in connection with mobile
messenger services, while the WiBee Honey Market
Deposit plan links mileage points to WiBee Market ac-
counts. Furthermore, preferential foreign exchange fee
rates are available through the Foreign Exchange for
All service (in partnership with WiBee Bank) while the
TalkTalk Remittance service allows for one-click easy
money transfers. Additionally, the WiBee Talk service
was expanded to provide informative messages con-
cerning bank transactions to clients via text messages.
In the future, we plan on increasing the scope of this
alert service through alliances with parcel services and
credit card businesses.
In addition to the Woori Samsung Pay service
launched in 2015, we also established a number of
financial services products that include the WiBee
Designated Driver Service (for people who have con-
sumed more than the legal limit of alcohol and require
someone else to drive them and their vehicle home),
the Energy Seven (E7) Partnership Service, a cash
withdrawal service at convenience stores, an Automat-
ed Clearing House (ACH) payment system for Baedal
Minjok (a mobile-based delivery app service), and a
platform for e-note receivable discount brokerage ser-
vices for SMEs.
Moreover, our strategic alliance with several foreign
partners, including China’s Tencent platform, for simple
payment services helped grow our business domain
overseas.
More recently, the Woori FinTech Lab opened and
quickly discovered new business models through
collaborative initiatives with—and in support of—rising
FinTech start-ups in their nascent stages of business.
Woori FinTech Lab also hosted a FinTech Lab Demo
Day event for these businesses to provide greater op-
portunities for investment and business alliances.
Woori Bank
Annual Report 2016
057
Internet & smart banking
subscribers
KRW 15.6 million
No. 1 non-face-to-face
product sales market share
(As of the end of 2016)
KRW 18.2 trillion
Advanced On-Demand Financial Services
Woori Bank’s on-demand services, which take full
advantage of new technologies, continue to cater to
the diverse needs of our clients. In fact, we were the
first Korean bank to launch a pilot service using retinal
scans for financial transactions and a smart card ser-
vice that utilizes fingerprint scans through a business
alliance with the Public Procurement Service. We were
also the first Korean bank to integrate bioinformation
into our financial services with a voice-recognition typ-
ing function launched for the Woori Watch Banking in-
terface, a wearable banking service for smartwatches.
In addition, our Woori Quick Banking service, Smart
Security Card and Smart Quick Verification services
all utilize advanced technologies to comprehensively
enhance customer convenience with their verification
functions, while OutbounD Sales (ODS) were pro-
moted through the launch of our Tablet Branch Office
service. The back-to-back launch of O2O services,
including With Woori, Smart Name Cards, Smart
Notes, and our Non-Face-to-Face Reservation service,
considerably enhanced customer convenience, too.
At the same time, we drew on data scraping technol-
ogy like the Paperless Smart Lending service and the
Woori SOHO Smart Guarantee lending service, both
of which brought about innovation in paperless lending
procedures. On top of this, we constantly introduced
new products like WiBee Mobile Auto Loan and WiBee
Call Loan for Rentals through collaboration efforts with
mobile platform operators, outpacing our competitors
in non-face-to-face channel sales.
In 2017, Woori Bank is determined to respond swiftly
to ever-changing market conditions while enhancing
customer convenience so that we remain the leader in
digital financial markets.
In 2017, the Smart Banking Business Group plans on
expanding its platform network and developing new
content to upgrade the WiBee platform so as to solid-
ify its competitive edge in the field of smart financing
platforms.
To that end, the Group is developing new financial ser-
vices that integrate future technologies such as artificial
intelligence and biotechnology, while also strengthen-
ing platform operations through alliances with Korea’s
leading O2O operators as we continue to expand ACH
services for Chinese customers. By engaging in a big
data-based target marketing campaign and estab-
lishing a smart work system through digitalization, the
Group will also continue efforts to consolidate a solid
foundation for digital finance.
2017 Plans
Woori Bank
Annual Report 2016
058
Global Business
In 2016, Woori Bank completed laying the groundwork for expansion overseas, with its global network/operating profit
growth rate ranking No. 1 in Korea’s financial sector and spreading its the successful launch of its FinTech (WiBee) plat-
form to in eight countries—the largest number by of any Korean bank.
The acquisition of a local thrift bank in the Philippines and the establishment of a local subsidiary in Vietnam completed
an extensive overseas network of 19 branches, 10 local subsidiaries (with 228 branch offices), and 3 representative of-
fices. Through these 250 strategic contact points, our international experts played a pivotal role in developing the largest
global network among all Korean banks while also securing significant growth momentum through global expansion.
Coupled with localized and differentiated marketing strategies by region, these synergies generated USD 61 million in
year-on-year growth in operating profit, which totaled USD 380 million for 2016. Furthermore, we have strategically over-
come the physical challenges associated with overseas networks by launching our own FinTech platform, WiBee Bank,
throughout our Southeast Asian operations, specifically in Cambodia, Vietnam and Indonesia.
2016 in Review
Expanding Our Overseas Network
Woori Bank took a big step forward towards becoming
a leading global bank with the opening of its first over-
seas branch office in November 1968 in Tokyo, the first
time a Korean commercial bank established a network
abroad. Following the acquisition of Saudara Bank in
Indonesia in December 2014, we then became the
first foreign bank to acquire a local bank in the Philip-
pines when we invested in Wealth Development Bank
for a 51% stake in October 2016. In November 2016,
Woori Bank established a local subsidiary in Vietnam
which we will utilize to enhance our retail marketing
efforts for local customers in the country. Also in 2016,
we became the first Korean bank to advance into the
Iranian market through a business alliance with Bank
Pasargad, the second largest financial institution in
Iran, which will give us access to up-to-date develop-
ments in the local market and provide a foothold for
Woori Bank to offer our financial services alongside a
local partner.
Major Highlights Of Global
Business
Gross Operating Income
USD 380 million
NPL Ratio
0.68 %
(Excluding our exposure to Hanjin
shipping)
Liquidity Ratio
117.43 %
Through these M&A activities Woori Bank has been
able to establish the largest overseas network - 250
strategic contact points across 25 countries - among
all Korean banks, making Woori Bank the unrivaled
globalization leader in the Korean financial sector. On
top of that, with the completion of an ambitious New
Asian Financial Belt, we laid the foundation for Woori
Bank to make further inroads overseas. Today, we
have plans to enter Germany, Poland and Mexico in
the near future, and continue to spearhead the Korean
financial industry’s globalization efforts. Through these
bold international strategies, we aim to become one of
Asia’s top 10—and one of the world’s top 50—banks
in the future.
Woori Bank
Annual Report 2016
059
Increasing Overseas Product Competitive-
ness & Cross-Industry Alliances
Enhanced Management of Overseas Finan-
cial Institutions
Woori Bank is actively introducing strategic products
customized to local needs in the financial markets of
each country where it operates. Plus, our cross-in-
dustry strategic alliances allow for higher product
competitiveness at our overseas operations. In 2016,
we launched a number of off -shore-only products,
including global bills bought, while pursuing cross-bor-
der synergies through cross-industry alliances with
the Korea International Trade Association(KITA), Seoul
Guarantee Insurance(SGI), Hanwha Life, Lotte Shop-
ping, CGV, and Paris Baguette. In 2017, our goal is
to emerge as Korea’s leading global financial alliance
service provider through various partnerships with
overseas financial institutions, governmental agencies,
and domestic institutional clients.
The Global Business Group is working hard to secure
new lines of credit through stronger relationships with
top global financial institutions, while also taking the
lead in financing Korean companies that are active
overseas as well as sound corporate borrowers lo-
cally by increasing funding support to our overseas
branches. In pursuit of new business opportunities,
we are determined to expand our network and global
businesses as we preemptively prepare for potential
compliance issues arising from stricter international
regulations in the near future by strengthening our
anti-money laundering procedures against foreign
correspondent banks and introducing enhanced client
identification procedures.
Woori Bank
Annual Report 2016
060
Worldwide Branch Network
Head Office
Overseas Branch(14) & Sub-Branch (5)
Overseas Representative Office (3)
Overseas Representative Office (3)
Overseas Representative Office (3)
Overseas Representative Office (3)
Overseas Representative Office (3)
Overseas Subsidiary (10)
Overseas Subsidiary (10)
Overseas Subsidiary (10)
Overseas Subsidiary (10)
Overseas Subsidiary (10)
Overseas Subsidiary (10)
Overseas Subsidiary (10)
Overseas Subsidiary (10)
Overseas Subsidiary (10)
Overseas Subsidiary (10)
Overseas Subsidiary (10)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
Korean Desk/ GRM(Global Relationship Manager)
250 Networks in 25 nations
Worldwide
(As of the end of 2016)
250 Networks
Woori America
Bank(21)
Mexico (GRM)
Exploration of new markets overseas
Woori Bank
Brasil (Brazil)(1)
• First Korean bank to enter Iran in May 2016
• Acquisition of a thrift bank in the Philippines in October 2016
Acquisition of a thrift bank in the Philippines in October 2016
• Establishment of a subsidiary in Vietnam in November 2016
Establishment of a subsidiary in Vietnam in November 2016
Poland (GRM)
AO Woori Bank
Russia(3)
Turkey (Korean Desk)
Tehran
Woori Bank
China(21)
Woori Finance Myanmar(10)
Hong Kong
Seoul
Hanoi
Woori Global Markets Asia Ltd HK(1)
Yangon
Woori Bank Vietnam(1)
Woori Finance Cambodia(12)
Ho Chi Minh
Wealth Development Bank
(Philippines)(16)
P.T. Bank Woori
Saudara Indonesia(142)
Republic of South Africa (Korean Desk)
2017 Plans
In 2017, the Global Business Group plans to reinforce
profitability through special businesses and alliance
marketing, increase face-to-face/non-face-to-face
contact points via platform expansion and heighten
preemptive management of global risks.
While seeking to raise our profitability through en-
hanced cross-industry marketing and cross-selling
practices among branch offices at home and over-
seas, we plan to launch a credit card business in the
Southeast Asian market, starting in Vietnam, in order
to expand our local customer base. Along with special
projects customized for individual branch offi ce needs
in Indonesia, Vietnam, the Philippines and India, we
will concentrate our eff orts on developing the funda-
mentals required for revenue growth from all our global
operations.
Moreover, the Global Business Group will continue
broadening its network in highly profitable markets
throughout Southeast Asia and other new markets so
as to expand the network to 500 contact points world-
wide in the not-so-distant future as we also increase
our face-to-face and non-face-to-face business chan-
nels. To that end, we will work tireless to promote the
growth of our global mobile banking platform, Global
WiBee Bank, at our overseas branch offi ces and off er
a variety of benefits and services. At the same time,
our partnerships with FinTech businesses will allow us
to expand our customer-base through non-face-to-
face channels.
In order to reinforce our competencies for the preemp-
tive management of global risks, we will not only bol-
ster our overseas round-the-clock monitoring system
in collaboration with related departments to develop a
comprehensive global risk management system, but
will also establish a Global Compliance Council to im-
prove our anti-money laundering system overseas.
With the very best quality customer-oriented products
and services, we will remain Korea’s top bank in terms
of overseas market share in the short run, and aim to
become Asia’s leading bank in the long term, engaging
in direct competition with the world’s most prominent
banks.
Woori Bank
Annual Report 2016
061
International Trade Business
Woori Bank’s International Trade Business Division develops and supports marketing strategies for the bank’s foreign
exchange services. The Division also provides support to branch offices in a swift and efficient manner through the Inter-
national Trade Service Center (a business process reengineering-specialized unit). Additionally, it induces foreign direct
investment and related capital transactions through the Global Investment Center in Seoul. In an effort to strengthen our
foreign customer targeted marketing capabilities, we established a Foreign Customer Banking Business Department to
create synergies from diverse international trade & F/X operations and to maximize profits. By drawing on our years of ex-
perience and knowhow in dealing with the largest number of large corporations along with our abundant F/X specialists,
we will continue to provide industry-leading consulting services related to import and export finance and overseas invest-
ments to clients at home and abroad.
2016 in Review
In line with our goal of becoming a leading global bank,
we spent 2016 reinforcing the F/X competencies of
employees, thereby honing our competitiveness in im-
port/export financing, foreign exchange and remittance
operations. Backed by the USD 175 billion in export
financing and USD 120.9 billion in import financing, we
claimed a robust market share (export 39.4%, import
34.6%) the highest among Korea’s four major banks.
Currency exchange operations also generated USD
4.5 billion in transaction volume, representing a 31.2
percent market share, which also marked the highest
figure among Korea’s four major banks.
37.5%
Export/Import Financing
Total Market Share
(As of the end of 2016)
Woori Bank’s
International Trade Business
Results in 2016
26.7%
F/X & Remittances
Total Market Share
(As of the end of 2016)
•Among Korea's four major banks
Woori Bank
Annual Report 2016
062
Strategic Reorganization to Step Up
Marketing Efforts Aimed at Foreign Customers
Stronger F/X Competencies for Higher Export/
Import and F/X Remittance Competitiveness
Woori Bank continues to foster F/X experts with ad-
vanced training programs, expanding its network of
non-BPR branch offices to bolster the F/X competen-
cies of its entire workforce, and honing its competitive
edge in export/import and F/X & remittance operations.
As a result, our 2016 export/import performance results
totaled USD 295.9 billion, solidifying our market posi-
tion as the nation’s top corporate financing institution.
We also engaged in aggressive marketing campaigns
at international gateways like Gimpo International Air-
port, Incheon International Airport and Seoul Station’s
F/X Center. This helped us successfully secure a large
foreign customer base, with USD 4.5 billion in F/X
transaction volume.
With the goal of attracting two million foreign custom-
ers, Woori Bank’s International Trade Business Division
has mounted a number of campaigns to secure foreign
customers and stay ahead of the competition. Part of
this initiative has involved setting up a Foreign Custom-
er Banking Business Department to better serve these
new clients.
For the sake of foreign resident workers, we operate
eight special branches, including the Hyehwa-dong
branch, where Filipino is spoken, and the Gwang-
hee-dong branch, where Mongolian is spoken, are
now open on Sundays. We are also designating some
of our branch offices as overseas remittance-special-
ized locations as part of our marketing towards foreign
clients. Moreover, we offer foreign direct investment
consulting and other capital transaction services
through our global investment centers, while also pro-
viding segmented and accurate one-stop financial ser-
vices to foreign investors and related organizations on
legal affairs, taxation and other investment-related af-
fairs for inbound investments. In 2016, we opened the
Gangnam Global Investment Center and Jeju Global
Investment Center to complete a business line-up in
locales that have recently become more attractive for
foreign investors.
International Trade Business Organization
International Trade Business Division
International Trade Business Department
Foreign Customer Banking Business Department
International Trade Service Center (BPR Center)
Global
Investment
Center
Gangnam
Global
Investment
Center
Jeju
Global
Investment
Center
Wongokdong
Foreign
Exchange
Remittance
Center
Gimhae
Foreign
Exchange
Remittance
Center
International
Trade
Business
Team
International
Trade
Business
Support
Team
Foreign
Customer
Banking
Strategy
Team
Foreign
Customer
Banking
Business
Team
International
Trade Service
Team
Foreign
Exchange/
Export Team
Import/Foreign
Currency Loan
Team
Sanctions
Management
Team
Woori Bank
Annual Report 2016
063
Establishing an Early Foothold in the Won/
Yuan Trade Settlement Market
In 2011, Woori Bank became the world’s first bank
to complete an offshore Korean won-denominated
settlement system. At the same time, it arranged for
the won-denominated clearing of trade settlements
through a currency swap deal between Korea and Chi-
na, playing a vital role in leading the globalization of the
Korean won. With many major financial institutions now
subscribing to the Woori Clearing System, our transac-
tion volume has greatly expanded, reaching KRW 31.5
trillion in total trade settlement clearing (in KRW) as of
the end of 2016. After becoming the first Korean bank
to obtain approval for international yuan settlements
from Chinese authorities back in 2010, Woori Bank
then became the first financial institution to set up trade
settlements through won-yuan currency swaps and
now boasts the largest volume in this regard. We were
also the first Korean bank to commence a Korean won
clearance service in China, which contributed to the
promotion of Korean won-denominated transactions,
facilitating Chinese banks to opt for Korean won for
their trade business operations and deposit-taking ser-
vices in China.
In 2017, Woori Bank’s International Trade Business
Division will continue to reinforce its foreign exchange
operational competencies through expert training
and marketing campaigns. By harnessing multiple
synergies in the diverse domains of foreign customer
marketing as well as export/import financial services,
foreign exchange and remittances, we will maximize
profitability and expand our market share in interna-
tional trade business operations.
At the same time, we continue to attract new clients
based on our expertise and knowhow in the field of
foreign currency vault services for the National Pen-
sion Service and corporate banking services, all the
while maintaining a focus on profitable growth. We will
continue our endeavors towards becoming a leading
foreign exchange bank, which will serve as a stepping
stone to achieving our greater vision of becoming one
of Asia’s top 10 banks and one of the world’s top 50
banks in the near future.
Total Export & Import
Financing,
F/X & Remittances Volume
(As of the end of 2016)
Export/Import Financing
USD 295.9 billion
Foreign Exchange
USD 4.5billion
Remittances
USD151.3 billion
2017 Plans
Woori Bank
Annual Report 2016
064
Financial Market Business
The Financial Market Business Group consists of the Treasury Department, which manages bank-wide liquidity, the Trad-
ing Department, which handles F/X trading, marketable securities and financial derivatives, and the Settlement Support
Department, which performs back office duties. Woori Bank is 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 exchange, equities and commodities.
2016 in Review
As a result of these measures, the bank’s liquidity cov-
erage ratio (above 85%), liquidity ratio in foreign curren-
cy (above 85%), and medium- and long-term foreign
currency funding ratio (above 100%) were well above
regulatory guidelines in 2016, contributing to a 0.54
percent increase in our BIS ratio. We also strength-
ened our competitiveness in F/X and derivatives trad-
ing through diversified trading currencies and provided
various hedging services that are available through all
global trading hours to assist our customers with their
risk management strategies.
As the funding and investment body of Woori Bank,
the Financial Market Business Group focused on
improving efficiency in its funding and investment pro-
cedures throughout 2016, thereby efficiently balancing
assets and liabilities through these activities to continu-
ally improve profitability while maintaining sound liquidi-
ty levels.
These efforts contributed to higher NIM figures by
maintaining optimal loan-deposit ratios, liquidity man-
agement and low-cost funding. Bracing for a possible
decrease in BIS ratio that could arise from Woori
Bank’s privatization, we enhanced our capital ratio with
stable funding by issuing won-denominated contingent
convertible capital instruments (CoCos) in the first half
of the year. Of particular note was the perpetual foreign
currency contingent capital issue in the latter half of
the year, which was the first of its kind for any Korean
bank.
Woori Bank
Annual Report 2016
065
Optimized Liquidity Management
Compliance with Regulatory Guidelines
Issuance of senior bonds and contingent capi-
tal securities in domestic and foreign currencies
In 2016, the Financial Market Business Group estab-
lished proactive financing plans to issue KRW 5.19
trillion in won-denominated senior bonds, KRW 0.25
trillion in won-denominated CoCo bonds, and USD
500 million in foreign currency senior bonds and CoCo
bonds, respectively, at low interest rate. Most notably,
the F/C CoCo bond was issued as a perpetual F/C
CoCo bond (Tier 1)—the first in the domestic market—
and at record-low interest rates, backing up Woori
Bank’s prominent position in international financial
markets.
Stabilizing Foreign Currency Liquidity in
Preparation for Volatile Financial Markets
In 2016, we amended internal rules to allow the Trea-
sury Department to directly purchase foreign currency
bonds for liquidity control purposes and expanded our
investment targets to include foreign currency public
bonds, which are high-quality liquid assets in terms of
foreign currency liquidity coverage ratios (LCR). As a
result, the department was able to diversify its invest-
ment portfolio of surplus foreign currency capital and
stabilize foreign currency liquidity in the face of highly
volatile financial markets that reacted to events such as
Brexit, U.S. interest rate hikes, and the U.S. presidential
election.
As of the end of 2016, Woori Bank was well above the
regulatory ratio set by Korea’s Financial Supervisory
Service (FSS) as a result of proactively managing sur-
plus liquidity to achieve a 109.61 percent liquidity cov-
erage ratio, a 121.70 percent foreign currency liquidity
ratio, and a 224.17 percent medium- and long-term
foreign currency funding ratio.
Stronger Competitiveness in
F/X & Derivatives Sales
In 2016, the Financial Market Business Group swiftly
moved to prepare itself for increased volatility in finan-
cial markets, while reinforcing its marketing competi-
tiveness through new revenue generation.
F/X Trading
In foreign currency trading, Woori Bank strengthened
its trading activities in the MXN (Mexican peso), ZAR
(South African rand), PLN (Polish zloty), and RUB
(Russian ruble) markets, as well as in major currencies
such as the USD (US dollar), JPY (Japanese yen) and
EUR (Euro) as it diversified its revenue sources as part
of a proactive response to market changes.
In addition, we were selected as the market maker for
the won-yuan direct trading market after the market
opened in December 2014. We are especially proud
to be playing a leading role in the development of the
won-yuan trading market, receiving commendations in
2015 and 2016 for this accomplishment.
Woori Bank
Annual Report 2016
066
Derivatives
Securities
In derivatives markets, we strengthened the stability
of our derivatives trading taking versatile position in
anticipation of market variable developments, such as
domestic and international policy changes and fluctu-
ations in demand and supply. We also provided one-
on-one customized solutions and risk management
consulting services for F/X and derivatives trading by
having derivatives specialists visit SME clients in per-
son to provide direct support in areas in which they
lack risk management experience and know-how.
In the securities markets, we increased interest profits
and non-interest profits by efficiently managing bonds
and bond-type beneficiary certificates through an
analysis of monetary policies and bond markets, do-
mestically and internationally, as well as by diversifying
the source of non-interest profits through a variety of
items and a higher volume of bond lending transac-
tions traded as risk-free transactions that received a
commission.
2017 Plans
In 2017, the Financial Market Business Group will
prepare for regulatory changes slated for the year con-
cerning new foreign currency LCR and stress tests, as
well as a higher liquidity coverage ratio, by stabilizing
bank-wide liquidity management with high-quality liq-
uid assets, including public bonds in Korean won and
foreign currencies. With this preemptive move to man-
age liquidity, the Group will diversify won-denominated
funding durations by issuing bonds, while generating
savings related to its cost of funding by increasing re-
purchase agreement (RP) sales.
In the meantime, we will strategically diversify our trad-
ing portfolios to include arbitrage in foreign exchange
derivatives as well as hedging on foreign currencies
and interest rates to increase profits from foreign cur-
rency derivatives. Furthermore, in anticipation of rising
demand for risk hedging against the growing volatility
of global markets, we will provide timely customized
products so that we can consistently expand our
foreign exchange and derivatives transactions. All the
while, our sales task force team, which is made up of
a wide array of experts, will continue serving securities
firms, insurance firms, governmental agencies, and
other financial/public institution investors to attract ma-
jor new clients and increase non-interest profits.
Liquidity Ratios
Liquidity Ratio (Foreign Currency)
Liquidity Coverage Ratio (All Currency)
130
125.0
114.9
120
110
100
118.1
109.0
117.4
111.2
(Unit:%)
121.7
109.6
Mar-2016
Jun-2016
Sep-2016
Dec-2016
Woori Bank
Annual Report 2016
067
Investment Banking
Woori Bank’s Investment Banking (IB) Business Group is in charge of diverse investment tasks, including syndicated
loans (M&As, corporate finance), project financing (infrastructure projects, power generation energy projects), securities
investments (securities, mezzanine securities, collective investment securities, foreign currency bonds) and the granting
of credit. With the Investment Banking Department and the Project Finance Department under the IB Business Group,
we actively implement IB policies and solutions. In particular, we provide a customized financial structure that can meet a
project’s capital needs implemented by companies through a strong network and partnerships with our major corporate
clients. In addition, we actively explore not only the domestic but also the overseas IB market, having established Woori
Global Markets Asia Ltd. in October 2006, Korea’s first financial institution to specialize in overseas IB investments in
Hong Kong.
In 2016, we focused on improving asset quality
by substantially reducing problem assets, while
raising the percentage of quality assets to high-
er than 90 percent. In addition, our continued
growth in profitability achieved an increase of
more than KRW 200 billion in operating profits
over the past two years.
Through a fund with KRW 49 billion in assets, we
were the first Korean bank to invest in high-per-
forming corporations jointly with private equity
funds in 2016, and also to arrange aircraft financ-
ing in the Middle East worth USD 70 million, thus
taking advantage of a highly profitable investment
market.
At the same time, our inter-departmental cooper-
ation resulted in outstanding accomplishments. In
collaboration with the WM Strategy Department
and Trust Department, we carried out structured
financing on loans for Mirae Asset Global Invest-
ments, which in turn generated additional fee in-
come, expanded our market share of investment
vehicles, and increased overall customer satis-
faction.
2016 in Review
Total Assets of Investment
Banking Operations
(As of the end of 2016)
KRW 10.0 trillion
Woori Bank
Annual Report 2016
068
Investment Banking Operations in 2016
(Unit:KRW trillion)
Total Assets
Balance Sheet Assets
Loans
Securities
Others
Off-Balance Sheet Assets
Loan Agreements
Payment Guarantees
2016
10.0
6.4
3.8
2.6
0.0
3.6
2.4
0.4
%
100
64
3
26
0
36
24
4
2017 Plans
In responding to the intensifying competition of
the IB market, Woori Bank’s IB Business Group
will concentrate its resources on core businesses,
such as mergers & acquisitions, principal invest-
ments, and infrastructure financing. We will also
explore various new business opportunities that
have not been pursued as of yet to push the lim-
its of the domestic market in pursuit of future rev-
enue sources even as we actively seek out over-
seas business opportunities. More than anything
else, however, we will seek to eliminate existing
problem loans as soon as possible and strive to
prevent the emergence of new insolvent assets to
further enhance our asset soundness.
Investment Banking Organization
IB Business Group
Investment Banking Department
Project Finance Department
Woori Global Markets Asia Ltd. (Hong Kong)
IB Control &
Management
Team
M&A & Global
Finance
Team
Principal
Investment
Team
Corporate
Finance /Ship-
ping & Aviation
Team
Structured
Finance Team
Infrastructure
Finance Team
Power &
Energy Team
Business
Unit
Business
Support
Unit
Woori Bank
Annual Report 2016
069
BEYOND
FINANCE
Who is creating a better world?
CREATING
A BETTER
WORLD
BEYOND
FINANCE
Woori Bank’s commitment goes beyond the financial sector to
reach all of the communities we operate in. As a responsible cor-
porate citizen, we continue to share our growth with local com-
munities. Firmly rooted in our ethical management practices and
trust-based relations with stakeholders, we take pride in our con-
tributions to creating a better society for everyone with higher em-
ployee satisfaction and the provision of a secure and convenient
financial lifestyle for our customers.
WOORI BANK
CREATING
A BETTER
WORLD
Ethical Management
In order to survive in an era of global competition and achieve sustainable development, Woori Bank devised the Woori
Code of Ethics and Woori Code of Conduct to provide standards for employees and ensure that all corporate social re-
sponsibilities are carried out faithfully. Based on our high level of ethical finance provisions implemented through the
Woori Code of Ethics, we will contribute to social development by fulfilling our social responsibilities for all stakeholders,
from customers and shareholders to employees and society as a whole.
In 2016, we improved accessibility for employees to
our Code of Ethics by posting the 27 provisions on our
intranet so that everyone at Woori Bank is well-versed
in the bank’s ethics code. Woori Bank employees
renew their pledges to legal compliance and sound
business practices on an annual basis, while also con-
ducting monthly self-check ethics/compliance tests to
enhance their ethical/legal mindset. We also publicize
ethics- and compliance-related educational materials
on the bank’s intranet to serve as a reminder. Guided
by the most stringent business ethics principles as our
core principles, the bank continually monitors business
practices against legal compliance standards to evalu-
ate performance results from all branch offices. Woori
Bank’s annual awards for outstanding accomplish-
ments in ethical management and compliance moni-
toring are instrumental in raising employee awareness
about ethical compliance and motivate such practices
with incentives that are in line with our commitment to
remain a fully honest and ethical bank.
Legal Support for the Front Office
Woori Bank offers prompt legal service on demand
for emergency legal issues that arise at any of our
branches. The bank’s legal affairs portal site has
downloadable standard agreement forms that cover a
wide array of issues, allowing for time savings related
to legal reviews of agreement forms at branches. For
departments and teams in charge of new products
and new terms & conditions, we assign attorneys
who specialize in finance law to clear up any potential
legal issues that may arise in the process of launching
new products or when pursuing new business op-
portunities. Furthermore, our website has a separate
page providing answers to FAQs on legal affairs and a
collection of case studies (by type of business) to help
employees at branch offices better understand the
legal issues involved.
2016 in Review
Woori Bank
Annual Report 2016
074
Advanced Ethical Management Training
Programs for Higher Employee Ethical
Awareness
Ethics training has been enhanced with the introduc-
tion of a compulsory ethical and legal compliance
course within the standard employee training program
for new hires and those recently promoted, as well
as regular job competency training. Additionally, all
compliance officers from our headquarters and branch
offices are required to receive in-house group training
every year. Moreover, monthly Ethical & Compliance
Self-check and Check & Clean Day events allow em-
ployees to develop a deeper awareness of business
ethics and voluntary legal compliance measures. The
ethics training material referred to as On-Site Ethics &
Compliance Practices are distributed to all our opera-
tions, while the quarterly publication of Case Studies
on Ethics and Legal Compliance is instrumental in our
efforts to raise ethical awareness and integrity among
all employees.
Diverse Ethical Management Programs
Woori Bank has implemented a number of programs
to make sure employees are well-versed in our Code
of Ethics and that they translate these provisions into
action at work. To begin, the Woori Code of Ethics
and Woori Code of Conduct prohibit employees from
benefitting from any stakeholder interests, while the
Self-Reporting Program encourages employees and
non-employees alike to report on the giving or re-
ceiving of any and all gifts or benefits in exchange for
favors connected to their job position. We also have
a whistle-blowing program in place to report on any
unfairness or irregularities by employees, as well as an
ethical contracting system that mandates all involved
parties draw up contracts in a sound, transparent
manner. In addition, we have reporting systems for
marketable securities accounts and transaction re-
cords, ensuring that we comply with all laws and regu-
lations governing marketable securities trading as well
as the prohibition of insider trading.
2017 Plans
In 2017, Woori Bank will improve its internal control
and compliance program management system to
further enhance the efficiency of its internal control
of branch offices while also minimizing legal risks.
The internal control process will also be reformed to
strengthen on-site monitoring functions at branch
offices and back offices. In addition, we have plans to
establish an anti-money laundering risk management
system at our domestic and overseas operations that
will feature top-of-the-line monitoring capabilities. In or-
der to enhance ethics awareness and legal compliance
among employees, a variety of on and offline training
will be provided as we aim to reflect regulatory chang-
es in our corporate bylaws on a timely basis to prevent
financial incidents from occurring. As such, we strive
to remain a leading bank in compliance and business
ethics through systematic ethical practices and higher
levels of social responsibility for employees.
Woori Bank
Annual Report 2016
075
Employee Satisfaction
Woori Bank believes that a workplace where employees are happy is the foundation for providing the best services to
customers. This commitment took shape with the setup of the Employee Satisfaction Center in 2007. Since then, the
Center has been developing and offering diverse programs to enhance employee satisfaction while increasing the provi-
sion of healing and travel programs. These, we believe, enhance our employees’ sense of ownership in the bank thereby
enhancing the quality of customer services.
Programs for Higher Employee Satisfaction
Woori Bank has in place varied novel programs to height-
en employee satisfaction. Among the many programs that
Woori Bank introduced in 2016 to raise employee satisfac-
tions was the Woori Pop Star event, a talent show where
Woori Bank employees from across the nation show off
their varied talents. Today, we operate a number of pro-
grams that support employee hobbies and assist in their
social networking within the organization.
The two most popular programs are Oh! Happy Woori,
a family getaway initiative, and a psychological counsel-
ing program that helps employees deal with stress and
effectively address family issues. Together, they not only
help employees better understand each other and their
families, but also encourage them to deal effectively with
issues at work and life in line with the bank’s belief that
happy employees—and their families—constitute the
bank’s competitiveness.
• Oh! Happy Woori
Established under the belief that happy families lead to
happy employees, Oh! Happy Woori is the bank’s signa-
ture family-friendly program that provides employees the
chance to reconnect with family members and relieve
stress in a healthy way. In 2016, Oh! Happy Woori in-
cluded a night star-gazing event, a trip to Pocheon Herb
Island, a visit to Korea Job World—the largest job expe-
rience center for kids and teenagers in Korea, a country
house stay and an opportunity to experience taekwondo
firsthand at Kukkiwon, the World Taekwondo Head-
quarters. Later that same year, the bank also arranged
special programs for employees and their spouses, such
as an autumn trip to the south of the country and a win-
ter trip to the coastal city of Donghae. With the largest
number of applications from employees, this monthly
program has become the most popular employee satis-
faction program, giving participants a chance to spend
quality time with their families.
• Head Office Auditorium Becomes a Free
Venue for Weddings
Woori Bank rents out the auditorium at its head office
building for free as a venue that employees can use to
Woori Bank
Annual Report 2016
076
Number of couples married at
the Woori Bank's head office
building
160 couples
(As of the end of 2016)
host weddings. The spacious, ornately decorated layout
features a gorgeous bridal room and another separate
room to perform traditional wedding rites, while a great
many guests can enjoy specially prepared meals in the
renovated cafeteria. In 2015, we carried out renovations
to the auditorium to make it an even more luxurious
wedding venue. Another important benefit is that the
newlyweds are provided the bank president’s official car
as their wedding car. In the first two years Woori Bank
rented out the auditorium, from 2012 to 2013, a total
of 179 couples walked down the aisle. As this service
become more widely known within the organization, the
number of weddings grew, from 165 couples in 2014 to
189 couples in 2015. In 2016, 160 couples chose to tie
the knot in the auditorium. Not only does this free service
help employees save money, but also serves to increase
their pride as members of the Woori family.
Benefits Offered in 2016
Woori Bank subsidizes psychological and legal counseling
services for its employees and their family members in
the hopes that we can assist our employees to effectively
address their personal/family issues to create a worry-free
workplace and a vibrant corporate culture. On top of this,
we also have an in-house psychologist to provide counsel-
ing, run tests, and deliver lectures at branch offices upon
request from employees. Furthermore, we are constantly
seeking ways to help our employees deal with stress
through daily meditation, temple stay programs and herbal
healing programs.
• Workshop Support at the Branch Office Level
Zip-lining, glamping, yacht and ATV experiences, and
survival games are only a few of the outdoor activities
we provide so that employees at branch offices can
strengthen their ties with colleagues and the organization
as a whole. Every year, a growing number of employees
are applying to take advantage of this popular program.
This thoroughly enjoyable workshop facilitates across-
the-board communication within the organization and
generates synergies among employees. In light of the
CEO’s commitment to management by walking around
(MBWA), the Woori Town Hall Meeting program was
expanded in 2015 to the Regional Banking Headquar-
ters level so as to facilitate cross-departmental and even
cross-regional communication and mutual understanding
among employees. In 2016, the Woori Pop Star event
also provided a fun venue for employees from different
regional bases to become acquainted with one another.
• Appreciating the Arts
This culture-oriented program enriches the lives of em-
ployees and their family members through musicals,
operas and classical music performances. Introduced in
2012, Woori Bank first arranged a group viewing of the
opera version of The Little Prince. In 2014, participants
went to see the musical Wicked, in 2015 they saw
Dream Girls, and in 2016 employees were treated to the
musical 42nd Street. We continue offering cultural pro-
grams that have garnered positive responses from our
employees.
• Encouraging a Healthy Work-Life Balance
In a bid to improve working conditions for employees,
we instituted a program in 2013 to discourage employ-
ees from overworking. Since then, most of our branch
offices abide by this unofficial rule. As part of this initia-
tive, computers are set to automatically turn off at 7 p.m.
every day, forcing employees to leave the workplace and
relax or spend time with family. As a result, employees
aim to enhance productivity so they can finish everything
they need to get done before all the computers turn
off, thus eliminating any possibility of staying late at the
office. Going forward, we will continue listening to what
employees have to say and address any potential issues
concerning the automatic shutdown of computers in an
effort to heighten employee satisfaction.
• A Healthy and Vibrant Workplace
Woori Bank encourages all employees to receive com-
prehensive health and blood screening at least once
a year. Based on the findings, employees advised to
receive additional check-ups are entitled to the bank’s
Group Insurance Coverage and medical subsidies,
which helps ensure a healthy and vibrant workplace. The
bank also supports membership in a condo-sharing pro-
gram nationwide, allowing employee to enjoy time away
with family members at multiple destinations throughout
Korea.
• Woori Daycare Center
In support of the government’s policy to address the
falling birth rate, Woori Bank runs corporate daycare
centers in Seoul to assist our employees with childcare
issues. In addition to the two existing centers in Ma-
po-gu (Happiness Center) and Seongdong-gu (Love
Center), Woori Bank opened a third daycare center at
its head office in Jung-gu, Seoul in August 2016. We will
continue adding new day care centers in promotion of a
corporate culture that encourages childbirth, while also
helping parents balance the challenges of working full
time and raising a young child.
Woori Bank
Annual Report 2016
077
Consumer Protection
In line with our management principle of on-site management in which customers come first, we have made Customer
happiness, Pioneering for the future, Honesty & trust, and Putting talent first our core values, of which customer happi-
ness is the overriding value. Based on this management philosophy, we were the first Korean bank to establish a Con-
sumer Protection Division, an organization devoted solely to consumer rights protection, which strengthened our position
as a leading bank in consumer rights protection.
2016 in Review
The Financial Consumer Protection Center establishes
and implements complaint prevention plans after re-
flecting customer opinions and consumer protection
policy trends, while also promoting and advancing
consumer rights and interests through the continuous
improvement of systems and the correction of un-
sound practices. In addition, we deal with customer
complaint issues promptly and fairly. Moreover, branch
office support requests and problem-solving issues
are promptly handled after consulting with the relevant
departments.
Continued Decrease in Customer
Complaints
Through diverse incentives to motivate employees to
prevent customer complaints, we proactively support
self-driven complaint prevention drives at the sales
network level. Whenever we launch a new product, rel-
evant departments join forces to preview and deal with
any potential risks for customer complaints or viola-
tions of consumer rights. As a result of this tenacious-
ness, we saw the number of our customer complaints
decline for a fifth straight year in 2016. In recognition
of our constant system upgrading efforts in pursuit of
consumer rights protection, the Financial Supervisory
Service singled out Woori Bank in 2016 for Excellence
in the Financial Sector as part of its Financial Consum-
er Rights Protection Practice Review for 2015.
Woori Bank
Annual Report 2016
078
Customer-oriented Consumer Rights
Protection Practices
In order to reflect the voices of those working at custom-
er contact points, we invite our staff at branch offices
every quarter to submit their ideas for consumer rights
protection initiatives and also reflect suggestions made
by customers that are collected through diverse chan-
nels to prevent the recurrence of similar complaints.
As part of our commitment to voluntary and active
consumer rights protection activities, we are also
proud to promote our Charm Forum, a voluntary meet-
ing of customer relationship managers who spearhead
our consumer rights protection efforts at customer
contact points.
Heightening Prevention of Financial Fraud
In active response to the growing frequency of financial
fraud, such as voice phishing and pharming, as well
as mortgage fraud, we constantly publicize warnings
about such malfeasance and train our employees ac-
cordingly at branch offices. At the same time, tellers
are instructed to block withdrawals as soon as they
recognize any sign of financial fraud. Due to this vig-
ilance, there was a sharp increase in the prevention
of fraud and losses over the previous year. In fact, we
even received a citation from the Korean National Po-
lice Agency for cooperating in the arrests of numerous
people who had committed fraud.
2017 Plans
The Financial Consumer Protection Center set becom-
ing a stronger financial consumer rights protector as its
goal for 2017. To that effect, we will reinforce our com-
plaint prevention campaigns at branch offices, work
hard to promote consumer rights, and scrutinize new
products before marketing them to the public so as to
weed out any potential risks to customers. Additionally,
we will upgrade our financial fraud prevention proce-
dures yet again and further train employees to help
them bolster their competencies in preventing financial
fraud and ultimately protect all customer assets.
Information Security at Woori Bank
Woori Bank pursues continuous upgrades to its information security organization and heightens its administrative
and technological protection measures to eliminate customer information leakage at its source.
Increasing Staff at the Information
Security Organization
The Information Security Division hosts regular
Information Security Commission meetings to
discuss agenda related to IT security and inter-
nal controls for customer information protection
as well as system amendments.
In addition, our ICT Security Check Team con-
sists of highly skilled “white hats” (ethical infor-
mation security experts) to ensure our financial
service environment remains secure.
Administrative Protection Measures
In an effort to prohibit the misuse and abuse of
customer information, staff members in charge
of customer information inquiries have minimal
access to customer information—and only when
required. They also receive periodic training on
information security to raise awareness of per-
sonal information protection and the prevention
of information security incidents. When customer
information is provided for use by external par-
ties for business purposes, we scrutinize their
monitoring practices to prevent loss, theft, leak-
age, forgery, falsification or damage to customer
information.
Technological Security Measures
Woori Bank earned an information security manage-
ment system (ISMS) certificate from the Ministry of
Science, ICT and Future Planning’s Korea Internet
Security Agency (KISA) in October 2014. In June
2016, the bank was also awarded a Ministerial Prize
at the Ministry of Commerce, Industry and Energy’s
1st Annual Korea Industrial Security Awards.
That same year, we became the first Korean
financial institution to complete a system for
countering advanced persistent threats (APT) in
the trafficking of malicious code, which helped
to successfully insulate the bank against cyber-
attacks. Later, the application of state-of-the-art
FinTech security technology related to dynamic
app falsification prevention and obfuscation sys-
tems further reinforced the safety and stability of
our mobile-based services.
2017 Plans for Information Security
In addition to plans already in place to counter
cyber attacks, we are also working to complete
a system for detecting malicious code related
to security violations and incidents by internal
users. FinTech technology will also be applied
to enhance our advanced security systems.
Hacking simulation drills will allow us to thor-
oughly prepare ourselves against the potential
threat of cyber attacks. At the same time, we will
strengthen our security practice checks related
to new service platforms, including WiBee Bank.
Going forward, we will continue to maintain air-
tight protection of customer information and
maintain the high level of trust customers have in
the bank.
Woori Bank
Annual Report 2016
079
Social Contribution Activities
Since its foundation in 1899, Woori Bank has taken great pride in not only being only Korea’s first commercial bank, but
also the country’s first fully domestically-funded bank and a vital part of the development of the national economy over
the past 118 years. In modern society, where financial institutions are expected to fulfill their social roles and responsi-
bilities, we have three core values in place—humanity, happiness and hopefulness—and uphold all three through diverse
social contribution activities and sharing campaigns. By lending our financial acumen to social contribution initiatives, we
provide financial aid to SOHOs and underbanked clients in a variety of ways.
In recognition of these accomplishments, Korea’s Minister of Health & Welfare granted a commendation to Woori Bank at
the 2016 Korea Sharing Awards. Going forward, we will continue to develop and carry out activities to create heightened
social value through diverse social contribution activities.
HUMANITY
Humanity in Action with Local Communities
• The Woori Love Sharing Program
Since launching the Woori Bank Volunteer Corps
in July 2007, we have been engaged in a number
of social contribution activities through our national
branch network. Today, the bank’s signature com-
munity engagement initiative for the underprivileged
is the Woori Love Sharing Program. Under this pro-
gram, our 33 regional business headquarters select
social welfare centers that support underprivileged el-
derly citizens, infants and the disabled, create sister-
hood ties and provide regular volunteer services led
by employees. At the end of every year, the scope of
our support expands to include other social welfare
agencies through a wide range of social contribution
campaigns. We also review and share social contri-
bution activity best practices from each department
engaged in social contribution campaigns, as well as
the bank’s headquarters, to promote the spread of a
culture of sharing within the organization.
• Sponsoring Living Necessities for the Under-
privileged
It is with great joy that Woori Bank makes its
warm-hearted wishes a reality for people in the run-
up to important national holidays such as Lunar New
Year and Korean Thanksgiving. During the Lunar New
Year holidays in 2016, for example, we made dump-
lings with multicultural families at a social welfare cen-
ter for elderly people in Gwanak-gu, Seoul, delivering
dumplings along with living supplies to seniors who
Woori Bank
Annual Report 2016
080
are members of the center. Later that year, as Korean
Thanksgiving Day approached, our employees vol-
unteered their time to make Songpyeon (Korean tra-
ditional rice cakes) with residents of Myeonghwiwon
Social Welfare Center for the mentally challenged in
Ansan. The 2016 event was of particular significance
because Myeonghwiwon Ansan was established by
Lee Bang Ja, the wife of King Yeong Chin, who also
served as the second president of Korea Cheonil
Bank (the forerunner of Woori Bank), in promotion of
social welfare for the mentally challenged.
• Put Love First Blood Donation Campaign
Woori Bank’s Put Love First Blood Donation Cam-
paign, which is specifically aimed at helping children
from low-income families fight leukemia, a variety of
children’s cancers, and other hard-to-cure diseases
marked its 11th anniversary in 2016. During the cam-
paign, which we usually run in July and August when
the blood donation rate is relatively low across the
country, employees voluntarily participate in the blood
drive at our branch offices nationwide and present
their blood donation certificates to children most in
need and those suffering from rare diseases, as well
as subsidies for medical bills on behalf of Woori Bank.
HAPPINESS
Happiness through Sharing
• Woori Care Fund and Woori Children’s Care
Fund
Woori Bank regularly encourages employees to do-
nate voluntarily to good causes. In fact, most of our
employees make donations from their monthly pay-
checks to the Woori Care Fund and Woori Children’s
Care Fund. The Woori Care Fund finances our more
than 80 annual social contribution programs, while
the Woori Children’s Care Fund provides funding for
a number of activities for underprivileged children, as
well as providing food for underfed children.
• Sisterhood Ties with Local Childcare Centers
With strong sisterhood ties to local community centers
for children, Woori Bank hosts an annual skating com-
petition for children. In January 2016, we invited kids
from local community centers to a winter sports event at
the ice rink located in front of Seoul City Hall. That same
year, a total of 200 children benefited from the biannual
scholarships we offer to local community centers for
children through the Woori Bank Dream Support Schol-
arship program. Furthermore, we invited boys and girls
from rural villages, which often lack access to cultural/
social events, to visit Seoul and go sightseeing around
Gyeongbok Palace and some nearby museums.
HOPEFULNESS
Communication & Harmony for
Hopefulness
• Global Social Contribution Activities
As a responsible global financial institution, Woori
Bank makes use of its vast overseas network, which
includes 250 branches around the world, to effec-
tively deal with social issues that local communities
are faced with worldwide through social contribution
activities. In fact, we held a Sharing Hope Campaign
with new employees of the bank to help children of
climate change refugees in October and December
2016. We donated T-shirts that featured drawings
from our employees with the aim of delivering hope
as well as ready-to-use therapeutic foods for under-
nourished children who have been displaced. Our
Bangladesh branch was even involved in a waste
disposal campaign and environmental awareness
improvement project, both of which were meant to
address environmental issues in developing South
and Southeast Asian countries.
• Woori Multicultural Families Scholarship
Foundation
Woori Bank and the subsidiaries of the former Woori
Financial Group collectively established the Woori Mul-
ticultural Scholarship Foundation in 2012 as a way to
assist children from multicultural families. This founda-
tion also engages in various projects that help multicul-
tural families to plant firmer roots in Korean society. In
June 2016, we awarded scholarships to 400 children
from multicultural families and marriage migrants, pro-
viding relief from the economic burden of tuition fees,
while also providing education programs on econom-
ics, finance, and Korean culture in the hopes that we
can help them quickly and effectively adjust to Korean
society. Moreover, on the 5th Woori Wedding Day
event, we arranged joint wedding ceremonies for 10
multicultural couples who had not been able to have a
wedding ceremony due to a lack of funds.
Woori Bank
Annual Report 2016
081
Woori Smile Microcredit
Woori Bank is engaged in microcredit to spearhead efforts in practicing socially responsible banking by supporting financially
struggling, socially vulnerable and underbanked customers.
In 2009, Woori Bank led in the contribution of KRW 10 billion per year, totaling KRW 50 billion over five years, together with the
former Woori Financial Group and its affiliates, to establish and operate the Woori Microcredit Foundation. The foundation ap-
pointed well-known 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.
Woori Bank extended approximately KRW 17.9 billion
in credit in 1,778 loans throughout 2016.
Woori Bank is proud to make this support available so
that recipients can become self-sustainable through
one-on-one consulting/counselling and microcredit
events via visits aimed at providing counseling ser-
vices, offering microcredit services, holding special mi-
crofinance events at traditional markets, and extending
a helping hand at shorthanded workplaces.
Major Performance Results of the
Microcredit Foundation
By extending support to the financially vulnerable, the
socially neglected and those who lack financial access,
we extended microcredit worth KRW 279 billion in
2015, leading the way in practicing socially responsible
financing. Microcredit services were provided through
a range of different products: Woori New Hope Seed
for low-credit low-income customers as well as Tran-
sit Loan, which help the financially excluded transfer
high-interest loans to low-interest ones.
Through microcredit services, Woori Bank extended
a total of KRW 112.7 billion in credit via 9,338 loans
through 2016. To stay true to the goal of bolstering
customer self-sufficiency through microcredit assis-
tance, we saw a tremendous increase in the volume
of microcredit loans extended throughout the year by
approaching customers directly and developing cus-
tomized products.
Number of branches
9
Number of emplyees
28
Woori Bank
Annual Report 2016
082
Key Products of the Microcredit Foundation
• Business Start-up Loans
For registered entrepreneurs to start a new small
business
• Working Capital Loans
For individual entrepreneurs who have already been
in business for over six months to purchase prod-
ucts, raw materials, etc.
Woori Bank tops the 2016
Miso Microfinance Foundation
Performance Review of
five Korean banks & 'S' grade
S grade
(by Korea Inclusive Finance Agency)
• Facility Improvement Loans
For individual entrepreneurs who have already been
in business for over six months to improve business
site facilities.
• Sunshine Loans for University Students and
Young People
Emergency funding for young people and university
students who are under 29 years of age (under 31
for men who fulfilled their military duties).
Microcredit Financing 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 associ-
ations. 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 promote these roles and trends by exploring and
facilitating best practices, to raise confidence among
recipients.
Woori Bank will establish a foundation for the self-suffi-
ciency of low-credit low-income people through micro-
credit services, ensuring the stabilization of livelihoods
and improvement in living standards.
Woori Smile Microcredit’s
Cumulative Performance
(Unit:KRW billion)
(Unit:cases)
2016
2015
2014
2016
2015
2014
74.2
7,560
5,601
112.7
+38.5%
95
9,338
+66%
Woori Bank
Annual Report 2016
083
FINANCIAL
REVIEW
Management’s Discussion and Analysis
Independent Auditors' Repor
Financial Statements
085
094
096
Audit Report
Financial
Statements
MANAGEMENT’S DISCUSSION AND ANALYSIS
1. Overview
In 2016, challenging market environments abounded in the global economy in the aftermath of the Brexit referendum, spreading protectionism and nation-
alistic economic policies triggered by the presidential election of Donald Trump in the U.S. At the same time, trade friction with China over THAAD, steering
the shipbuilding and shipping industries and the resultant business restructuring, coupled with contracting domestic consumption over political instability,
adversely affected the domestic market environment.
Amid the overall economic slowdown and low-interest rate trends in the wake of base rate cuts in June 2016, Korea’s banking industry continued serving the
diverse financial needs of customers through consistent profit-oriented marketing strategies and expansion of low-cost deposits in pursuit of stable profitabil-
ity, while improving their financial soundness through effective risk management practices.
For its part, Woori Bank succeeded in its 16-year quest for privatization, providing an opportunity to move forward under a new vision.
The seven major shareholders-Tongyang Life, Kiwoom Securities, Korea Investment Securities, Hanwha Life Insurance, IMM PE, Eugene Asset management
and Mirae Asset Global Investments-have all purchased shares in the bank that range from 3.69 percent to 6.0 percent, totaling a 29.69 percent stake in
Woori Bank, from the Korea Deposit Insurance Corporation. Five of these companies have appointed outside directors to the bank. This has put Woori Bank
under a new corporate governance structure of several major oligopolistic shareholders with enhanced autonomy and accountability for management activi-
ties in line with the goal of a beginning a “A Better Tomorrow, A Stronger Bank.”
Financial performance results were also remarkable in all aspects of profitability, soundness and growth. Despite a continued challenging market environment
with prolonged low-interest rate trends, Woori Bank outperformed its record from the previous year in terms of net income in the first nine months of 2016
backed by outstanding marketing activities. On top of that, soundness significantly improved with all relative indicators pointing upwards-NPL ratio, bad debt
expense and delinquency ratio-thereby assuaging market concerns.
Woori Bank also excelled in generating future growth engines throughout 2016. The bank was the first in the industry to launch a mobile messenger service,
WiBee Talk, followed by WiBee Members and WiBee Market, to complete the four components of the WiBee platform inclusive of the existing WiBee Bank
service that it introduced the year before.
On the global front, the bank focused on markets with high growth potential, specifically Southeast Asian countries, to expand its global network. As a result,
the bank boasted 250 networks worldwide, the most among all Korean commercial banks, as of the end of the 2016, setting the stage the bank to become
one of Asia’s top 10-and the world’s top 50-financial institutions in the near future.
As it starts out 2017 on a stronger note, Woori Bank is poised to stride into a brighter future as a rising total financial service provider, with its 118 years of
history standing firmly behind it.
Through the development of new growth engines, we are determined to broaden our financial reach as a stronger bank with healthy fundamentals.
Woori Bank
Annual Report 2016
085
MANAGEMENT’S DISCUSSION AND ANALYSIS
Key Management Indicators
Profitability
Return on Assets (ROA)
Return on Equity (ROE)
Delinquency Ratio (Bank)
Asset Quality
NPL Ratio (Bank)
NPL Coverage Ratio(Bank)
Common Equity Tier 1 Ratio
Capital Adequacy
Tier 1 Capital Ratio
Total Equity Ratio
2016
(183rd term)
2015
(182nd term)
0.41
6.36
0.46
0.98
165.0
10.50
12.68
15.29
0.37
5.69
0.82
1.47
121.5
8.47
10.43
13.66
(Unit:%)
2014
(181st term)
0.21 Note 2)
3.55 Note 2)
0.88
2.10
97.2
8.96
10.69
14.25
Note 1) Profitability and capital adequacy figures are based on consolidated financial statements and asset quality figures are based on separate financial statements
Note 2) The above figures do not reflect the one-off factors arising from corporate sell-offs and/or spin-offs. In consideration of the one-off factors arising from the disposal and/or
spin-offs of subsidiaries in the 181st term, ROA and ROE stand at 0.41 percent and 7.06 percent, respectively.
2. Financial Position & Business Performance Results
A. Growth
Total assets
Loans and receivables
Loans in KRW
Loans in foreign currencies
Bills bought in foreign currencies
2016
(183rd term)
2015
(182nd term)
310.7
258.4
191.3
14.1
7.8
291.9
244.8
185.2
13.1
6.6
(Unit:KRW trillion)
Change
6.4%
5.6%
3.3%
7.6%
18.2%
Note) Based on the Korean version of International Financial Reporting Standards (K-IFRS) consolidated financial statements
As of the end of 2016, Woori Bank‘s total assets (consolidated basis) stood at KRW 310.7 trillion, up KRW 18.8 trillion, or 6.4 percent, from the previous
year. Loan assets rose by KRW 13.6 trillion, or 5.6 percent, year on year to reach KRW 258.4 trillion, with KRW 191.3 trillion of these extended in Korean
won (KRW). The won-denominated loan growth rate stood at 3.3 percent for this same period. This can be attributed to our asset growth strategy of improv-
ing asset quality through quality asset-oriented growth and lower risk-weighted assets to achieve an adequate level of capital adequacy.
Woori Bank
Annual Report 2016
086
MANAGEMENT’S DISCUSSION AND ANALYSIS
B. Profitability
(Unit:KRWmillion, %)
Operating profit
1. Net interest income
2. Net fees & commissions income
3. Dividend income
4. Net gain on financial instruments at fair value through profit or loss
5. Net gain (loss) on available-for-sale financial assets
6. Impairment losses due to credit loss
7. General and administrative expenses
8. Other net operating expenses
Non-operating income (loss)
Net income before income tax expense
Income tax expense
Net income from continuing operations
Net income (loss) from discontinued operations
Net income
1. Net income attributable to owners
(1) Income from continuing operations
(2) Income from discontinued operations
2. Net income attributable to non-controlling interests
(1) Income from continuing operations
(2) Income from discontinued operations
Note) Based on consolidated K-IFRS financial statements
2016
(183rd term)
1,574,206
5,019,544
937,131
184,510
114,387
(1,035)
(834,076)
(3,478,476)
(367,779)
(20,817)
1,553,389
275,856
1,277,533
-
1,277,533
1,261,266
1,261,266
-
16,267
16,267
-
2015
(182nd term)
1,351,586
4,761,900
976,796
102,923
240,342
(3,281)
(966,646)
(3,150,387)
(610,061)
100,360
1,451,946
376,554
1,075,392
-
1,075,392
1,059,157
1,059,157
-
16,235
16,235
-
2014
(181st term)
897,708
4,493,018
917,015
96,812
189,912
(68,924)
(1,096,940)
(2,958,919)
(674,266)
(63,313)
834,395
288,195
546,200
661,769
1,207,969
1,213,980
435,289
778,691
(6,011)
110,911
(116,922)
As of the end of 2016, Woori Bank‘s net income reached KRW 1,261.2 billion (consolidated, controlling interests).
Net interest income was up 5.4 percent year on year to stand at KRW 5,019.5 billion for 2016, thanks to the bank‘s profit-oriented marketing strategies and
low-cost deposit increase efforts in the face of a base rate cut by the Bank of Korea in June 2016. The drop in the net interest margin slowed starting in the
fourth quarter of the year and interest profits are expected to rise as the Korean central bank is predicted to raise market interest rates in the wake of the U.S.
central bank‘s rate hikes. Also, non-interest income surged by 22.8 percent from the previous year to KRW 867 billion in 2016. As the bank set its goal for
2017 at strengthening wealth management capabilities with strategies of catering to the rising demand of personalized wealth management advisory ser-
vices in tandem with the nation‘s aging society and growing single-person households, its efforts to take the lead in the wealth management market will lead
to growth in non-interest income.
Although general administrative expenses had a temporary rise in one-off costs, which was mainly due to the additional lay-off expenses, the expected
higher efficiency in personnel and channel operations and bank-wide cost-saving efforts will help us stabilize general administrative expenses at an adequate
level.
Woori Bank
Annual Report 2016
087
MANAGEMENT’S DISCUSSION AND ANALYSIS
C. Asset Quality
Non-performing loans
Non-performing loan ratio
NPL Coverage ratio Note 1)
Delinquency ratio Note 2)
2016
(183rd term)
Change
-9,888
-0.49
43.51%p
-0.36%p
Indicators
21,121
0.98
165.04%
0.46%
Indicators
31,009
1.47
121.53%
0.82%
(Unit:KRW 100 million)
2015
(182nd term)
Change
-9,207
-0.63
24.37%p
-0.06%p
2014
(181st term)
Indicators
40,216
2.10
97.16%
0.88%
Note 1) The NPL coverage ratio excluding loan loss provisions: 84.48% as of the end of 2016
Note 2) Delinquency ratio before account reconciliation
In 2016, Woori Bank‘s asset quality showed remarkable achievements.
Non-performing loans (NPL) have continued decreasing since 2015, with the NPL ratio dropping by 49 basis points year on year, from 2.10 percent in 2014
to 1.47 percent in 2015 and to 0.98 percent (0.91 percent if exposure to the three troubled Korean shipbuilders are excluded) in 2016. The NPL coverage ra-
tio continued improving over the same period, from 97.16 percent in 2014 to 121.53 percent in 2015 to 165.04 percent in 2016. This remarkable growth can
be attributed to our consistent effort towards quality corporate client-oriented asset growth and tight management of existing asset quality, while reducing the
volume of loans extended to businesses on our watchlist in specific industries, including shipping, shipbuilding, construction, and real estate development &
supply.
As a result of our asset quality improvement efforts, our delinquency ratio also significantly fell to 0.46 percent in 2016. Most notably, the substandard and
below loans also declined by 25.1 percent from the previous year in 2016, foretelling continued improvement in Woori Bank‘s loan asset quality. Woori Bank
will continue its efforts towards enhancing its asset quality at a stable level with a thorough back-door-locking approach in 2017 even amid unstable eco-
nomic conditions.
D. Capital Adequacy
Common Equity Tier 1 ratio(CET 1 retio)
Tier 1 capital ratio
Total capital ratio (BIS ratio)
2016
(183rd term)
2015
(182nd term)
10.50
12.68
15.29
8.47
10.43
13.66
(Unit:%)
Change
8.96
10.69
14.25
In 2016, Woori Bank achieved significant growth in capital adequacy equivalent to the increase it reported for asset quality. Capital ratios significantly im-
proved, exemplified by a 10.50 percent Common Equity Tier 1 ratio (CET 1 ratio), 12.68 percent Tier 1 capital ratio and 15.29 percent Total capital ratio (BIS
ratio). These figures meet the requirements of the Basel III guidelines, indicating that the bank‘s loss absorbing capacity (LAC) meets common standards.
These improvements are partially due to regulatory changes, which resulted in a revision to assessment guidelines like loan loss provisions being counted
as common equity and the approval of changed internal ratings-based approach (retail card assets) for credit risks under the Basel III guidelines, resulting in
a decrease in the risk-weighted asset of Woori Card. Going forward, Woori Card will continue its efforts to generate steady profits and control risk-weighted
assets to maintain its capital ratio at an adequate level.
Woori Bank
Annual Report 2016
088
MANAGEMENT’S DISCUSSION AND ANALYSIS
3. Liquidity, Sources & Applications of Fund
A. Liquidity Ratios
Liquidity Coverage Ratio (LCR) Note 1)
Foreign currency liquidity ratio
Before applying liquidity weight
After applying liquidity weight
(Unit:%)
2016
(183rd term)
2015
(182nd term)
2014
(181st term)
109.61
131.47
121.70
106.67
130.30
120.71
123.10
130.29
121.29
Note 1) The LCR figures differ by term due to regulatory revisions: Figures for the 183rd and 182nd terms represent LCRs, while those for the 181st term stand for liquidity ratio in KRW
* LCR (consolidated, including foreign currency) = high liquidity assets/monthly net cash outflows
(According to standards, LCR should remain higher than 80 percent, demanding an annual increase of 5 percent to surpass the 100 percent level as of 2019)
** Liquidity ratio in KRW (separated) = (maturity of one month or less) assets/liabilities (higher than 100 percent by financial supervisory standards)
In its liquidity management practices, Woori Bank fully abides by the new requirements (80% in 2015 and 85% in 2016) for the LCR—the new liquidity indicator
adopted in 2015. In tandem with stricter regulations, however, the bank will need a more sophisticated LCR management framework in consideration of profit-
ability. As a result, it is developing a Basel III liquidity regulatory ratio system for tight management of these indicators.
B. Sources of fund (Bank Account)
2016
(183rd term)
2015
(182nd term)
(Unit:KRW million, %)
2014
(181st term)
Average
balance
Interest
rate
%
Average
balance
Interest
rate
%
Average
balance
Interest
rate
Deposits in KRW
183,440,285
Certificates of Deposit
Funds
in KRW
Borrowings in KRW
Call Money in KRW
Others
Subtotal
3,466,223
6,709,080
1,159,188
18,532,241
213,307,017
Deposits in foreign currencies
14,838,684
Borrowings in foreign currencies
8,595,575
Call money in foreign currencies
1,401,294
Debentures in foreign currencies
3,950,614
Funds
in foreign
currencies
Others
Subtotal
Total capital
Provisions
Others
Subtotal
Others
Total
531,877
29,318,044
19,617,484
412,553
18,070,427
38,100,463
1.38
1.70
1.45
1.32
2.60
1.50
0.47
0.86
0.70
2.54
0.29
0.87
-
-
-
-
65.35 169,919,620
1.23
2.39
0.41
1,879,832
6,689,135
1,370,253
6.60
18,944,493
75.98 198,803,334
5.29
11,568,322
3.06
0.50
1.41
0.19
9,245,073
1,199,484
4,851,289
650,409
10.44
27,514,577
6.99
18,501,137
0.15
640,666
6.44
16,907,843
13.57
36,049,647
1.70
1.92
1.77
1.62
2.95
1.82
0.44
0.53
0.53
2.72
0.66
0.88
-
-
-
-
64.76 157,994,039
0.72
2.55
0.52
1,983,619
5,675,238
984,378
7.22
15,925,666
75.77 182,562,940
4.41
3.52
0.46
1.85
0.25
7,973,812
6,357,072
1,242,371
5,559,305
918,010
10.49
22,050,569
7.05
18,225,902
0.24
594,945
6.44
12,779,094
13.74
31,599,941
2.22
2.71
2.31
2.28
3.69
2.36
0.44
0.50
0.54
3.51
1.03
1.26
-
-
-
-
%
66.89
0.84
2.40
0.42
6.74
77.29
3.38
2.69
0.53
2.35
0.39
9.34
7.72
0.25
5.41
13.38
280,725,524
1.23 100.00 262,367,557
1.47 100.00 236,213,449
1.94 100.00
Note 1) Deposits in KRW = Deposits in KRW – Deposit checks & bills in process of collection – reverse deposits with BOK – inter-bank adjustment funds (call loans)
* Deposit checks & bills in process of collection = total checks and bills in process of collection – checks & bills on clearing for overdrafts – inter-bank adjustment funds (call money)
* Interests for calculating interest rates are the sum of interests on deposits and installment deposits and deposit insurance premiums.
Note 2) Deposits in foreign currencies = Deposits in foreign currencies + off-shore deposits in foreign currencies
Note 3) Foreign currency borrowings = Foreign currency borrowings + due to BOK in foreign currency + off-shore borrowings in foreign currencies
Note 4) Finance debentures issued in foreign currencies = Finance debentures issued in foreign currencies + offshore finance debentures issued in foreign currencies
Note 5) Based on K-IFRS financial statements
Note 6) Excluding merchant banking accounts
Woori Bank
Annual Report 2016
089
MANAGEMENT’S DISCUSSION AND ANALYSIS
C. Applications of Fund (Bank Account)
2016
(183rd term)
2015
(182nd term)
(Unit:KRW million, %)
2014
(181st term)
Average
balance
Interest
rate
%
Average
balance
Interest
rate
%
Average
balance
Interest
rate
%
Deposits in KRW
3,171,599
1.34
1.13
2,580,842
1.72
0.98
2,670,185
2.37
1.13
Marketable securities in KRW
33,880,119
2.58
12.07
32,994,958
2.79
12.58
31,496,840
3.40
13.33
Loans in KRW
189,079,324
3.10
67.35 176,631,188
3.42
67.32 161,296,709
4.18
68.28
Funds
in KRW
Advance payments on
acceptances and guarantees
Call loans in KRW
Privately placed bonds
Credit card receivables
Others
51,254
0.89
0.02
64,533
1.89
0.02
69,099
4.27
0.03
3,581,382
247,292
24
1.41
5.19
-
4,580,215
2.04
1.28
0.09
0.00
1.63
2,083,053
280,702
-
1.64
5.98
-
0.79
0.11
2,186,891
470,988
-
3,967,556
2.32
4.12
-
0.93
0.20
-
4,313,781
2.61
1.64
(3,073,009)
3.50
1.68
Allowance for doubtful accounts in KRW (1,925,177)
-
(0.69)
(2,482,955)
-
(0.95) 199,085,264
-
(1.30)
Subtotal
232,666,033
2.98
82.88 216,466,103
3.31
82.50
2,044,084
4.06
84.28
Deposits in foreign currencies
3,761,286
0.43
1.34
2,872,735
0.28
1.09
1,073,932
0.47
0.87
Marketable securities in
foreign currencies
1,752,884
1.13
0.62
1,375,146
1.51
0.52
12,364,024
0.85
0.45
Loans in foreign currencies
13,371,873
Funds
in foreign
currencies
Call loans in foreign currencies
Bills bought in foreign currencies
Others
Allowance for doubtful
accounts in foreign currencies
2,940,858
7,110,164
13,829
1.95
0.85
1.53
9.72
4.76
14,206,736
1.05
2.53
0.00
2,040,819
6,899,811
17,047
1.65
0.59
1.38
6.96
5.41
0.78
2.63
0.01
1,347,232
5,559,305
5,425,038
19,509
1.71
0.94
1.40
6.36
5.23
0.57
2.30
0.01
(312,211)
-
(0.11)
(191,224)
-
(0.07)
(239,896)
-
(0.10)
Subtotal
Cash
Property, plant and equipment for
business
Others
Subtotal
28,638,685
1.51
10.20
27,221,069
1.37
10.38
22,033,923
1.46
1,169,566
2,325,893
15,925,347
19,420,807
-
-
-
-
0.42
1,116,715
0.83
2,328,130
5.67
15,235,540
6.92
18,680,385
-
-
-
-
0.43
1,076,521
0.89
2,358,135
5.81
11,659,606
7.12
15,094,262
-
-
-
-
9.33
0.46
1.00
4.94
6.39
280,725,524
2.62 100.00 262,367,557
2.87 100.00 236,213,449
3.56 100.00
Others
Total
Note 1) Deposits in KRW = Deposits in KRW – reverse deposits with BOK
Note 2) Marketable securities in KRW = Marketable securities in KRW + Loaned securities in Won
* Interest for calculating interest rates = Securities interests (including dividend received) + Evaluation profit (net) + gain on redemption of securities (net) + excluding the portion of
gain from stock transactions (net) out of gains on sales of securities
Note 3) Loans in KRW = Loans in KRW + Checks & bills on clearing for overdrafts
* Interest for calculating interest rates = Interest on loans in KRW – Contribution to the Korea Credit Guarantee Fund
Note 4) Deposits in foreign currencies = Deposits in foreign currencies + offshore deposits in foreign currencies
Note 5) Interest on securities in foreign currency = Interest on securities in foreign currency + Loaned securities in foreign currency
* Interest for calculating interest rates = Securities interests (including dividend received) + Evaluation profit (net) + Gain on redemption of securities (net) + Excluding the portion of
gain from stock transactions (net) out of gains on sales of securities
Note 6) Loans in foreign currencies = Loans in foreign currencies + offshore loans in foreign currencies + inter-bank loans in foreign currencies + loans from foreign borrowings +
domestic import issuance bills
Note 7) Cash = Cash – total checks & bills in process of collection
Note 8) Property, plant and equipment for business = property, plant and equipment for business – accumulated depreciation
Note 9) Based on K-IFRS financial statements
Note 10) Excluding merchant banking accounts
Woori Bank
Annual Report 2016
090
MANAGEMENT’S DISCUSSION AND ANALYSIS
4. Other Issues Required for Informed Investment Decisions
A. Environmental Impacts
As a financial service provider, Woori Bank‘s banking and trusts businesses do not have an environmentally destructive impact. Therefore, the bank is not
currently paying, or is likely to pay in the future, any environmental remediation/restoration expenses. It has not been subject to, or likely to be subject to in the
future, administrative measures by the government or environmental authorities. Woori Bank, however, reports to the government on its greenhouse gas emis-
sions and energy consumption as a target management company on its buildings designated under Paragraph 5, Article 42 of the Framework Act on Low-Car-
bon, Green Growth.
Greenhouse Gas Emissions (tCO2eq)
Energy Consumption(TJ)
B. Risk Management
(1) Risk Management Policy Overview
2016
88,472
1,315
2015
91,322
1,360
2014
93,676
1,421
(A) Objective and Policies
①Objective : The risk management objective is to identify the sources of risks and measure the size and appropriateness to make and implement deci-
sions to avert or mitigate the risks, thereby enhancing the soundness of investment assets and holding assets.
②Policies : Risk management policies are purported at maintaining the overall asset quality of the bank at the optimal status by applying the risk amounts
to its assets by preemptively detecting the sound creditability and counterparty risks up until the point of asset holding through constant management
of credit lines based on the credit assessment of counterparties against credit ratings.
(B) Risk Management Organization
Board of Directors
President & CEO
Marketing Support
Risk Management Group
Risk Management Committee
Risk Management Council
Risk Management Department
Loan Review Department
① Risk Management Committee
②Risk Management Council
- Top Risk Management Decision-making Body
- Composition: three outside directors and one non-standing director
- Major Items for Resolution
- Setting the tone of risk management master plans
- Credit Line Approval and Capital Allocation
- Meeting Cycle: Quarterly
- Composition: Head of the Business Support Division (Chairman) and the
heads of the six Groups
- Major Items for Deliberation
- Reviewing risks of new products
- Determining internal interest rates guidelines
- Fund supply and demand programs (liquidity management)
- Meeting Cycle: Quarterly
(C) Risk Management Strategies & Procedures
① Strategies: While disposing of excess risks and taking an appropriate level of risks, we strategically pursue asset soundness and profitability by maxi-
mizing profit to risks.
② Procedures
- Risk recognition: Analyzing various risks possibly associated with the bank‘s business activities
- Risk measurement/assessment: Determining risk measurements by risk type, we measure risk size and determine if the size is appropriate by utilizing measurement sys-
tems
- Risk controlling: Controlling risks by determining the risks subject to daily, monthly and quarterly reports to avert/mitigate risks or maintain risks at appropriate levels
- Monitoring/Reporting risks: In proper response to risks, we continuously monitor risk levels and define the route, content and cycle of reporting.
(2) Credit Risk
Woori Bank
Annual Report 2016
091
MANAGEMENT’S DISCUSSION AND ANALYSIS
(A) Definition
Credit risk represents the possibility of financial losses incurred when the counterparty becomes insolvent or rejects transactions within the period provided
in the contract. The goals of credit risk management are to maintain the bank‘s credit risk exposure to a permissible degree and to optimize its rate of re-
turn considering such credit risk.
(B) Method
① Credit Line Management : Relying on aggregation management, total exposure management and portfolio management, we set and manage appropri-
ate credit lines by aggregation, corporate and industry.
- Aggregation management: By aggregating the exposures of borrowers who share credit risks, we put them under a single credit risk aggregation management system to
take into control the bank‘s exposure to credit risks.
- Total exposure management: In order to prevent a concentration of loans, we calculate corporate value based on its future cash flow and set the ceilings per borrower with-
in the limit of capability of repaying borrowings from revenue.
(3) Operational Risk
(A) Definition
Woori Bank defines the operational risk that could cause a negative effect on capital resulting from inadequate internal processes, labor work and systematic
problems or external factors.
(B) Operational Risk Management
In order to reinforce its foreign competition, reduce the amount of risk capital, enhance operational risk management capabilities and prevent any unexpected
occasions, Woori Bank has in place the operational risk management system it developed under Basel II since December 2005. The objectiveness of our
operational risk management system has been tested internally and by an independent third party. The advanced measurement approach also obtained the
approval for application from the Financial Supervisory Service in June 2009 and came in use as of June 30.
① Operational Risk Management
- Risk Self Assessment (RSA): Applying to the bank‘s entire business premises, the RSA refers to all procedures related to risk management activities, from distinguishing
material operational risks and assessing the controlling activities to coming up with countermeasures to eliminate/improve the risks.
- Key Risk Indicators (KRI): KRIs are used for determining and monitoring risks and tracking the operational risks.
- Loss data: Woori Bank has constructed a systemic framework of collecting and managing internal loss data on a bank-wide level under the operational risk management
system. It also receives external loss data from SAS Global Data and the Korea Operational Risk Data Exchange Committee for scenario analysis and risk identification.
- Scenario analysis: Operating risks characteristically lack of accumulated loss data, making it difficult to take a statistical approach. To measure such operations risks, we
predict potential loss amounts and frequencies of possible operational risk events based on various information, such as internal data, external data and opinions of our ex-
perts working at each department and branch.
- Business Continuity Plan (BCP): Woori Bank has in place business continuity plans for organizational structure, risk assessment, business impact analysis, alternate location
for recovery, and drills so that it can restore and regain core business parts in the event of cessation in its business operations due to unexpected factors like disasters and
calamities.
②Operational Risk Measurement
Woori Bank takes an advanced measurement approach and its consolidated subsidiaries take a basic indicator approach to measure operational risk
capital amounts.
- The basic indicator approach sets 15 percent of the bank‘s total income as operational risk capital.
- The advanced measurement approach takes 99.9 percentile value of annual total loss distribution induced from the integrated loss distribution approach that combines loss
data and scenarios to calculate operational risk capital. Based on the eight business domains and seven event types under Basel II, we add a back-office process, which is
common bank-wide, setting the 9X7 matric as the operational risk capital amount measuring unit in consideration of the four basic factors (internal data, external data, sce-
narios, business environment and internal control factors) for measuring operational risk capital.
- Woori bank does not rely on insurance policy to mitigate its operational risk capital amount.
(4) Market Risk
(A) Definition
Market risk refers to potential losses that incur from trading positions of a financial institution according to changes in market factors, such as interest rates, stock
prices and exchange rates. Market risks arise from changes in interest rates and exchange rates on unsettled financial instruments. Thus, all contracts are exposed
to a certain level of volatility according to interest rates, credit spread, exchange rates and equity securities prices.
Market risks can be classified as general market risks and individual risks. General market risks represent losses arising from price changes in relation to some events
that have an impact on all markets, such as interest rates, stock prices and exchange rates. Individual risks are losses from price changes related to individual events
of issuing securities, including bonds and stocks.
(B) Market Risk Management
Woori Bank
Annual Report 2016
092
MANAGEMENT’S DISCUSSION AND ANALYSIS
Market risk management entails the entire process of identifying the sources of risks by risk factor on trading to measure the size and assess the appropri-
ateness of the market risk sizes, then to make decisions to avert, share or mitigate risks.
We take both a standard approach and internal model to measure market risks. The standard approach is used for calculating individual risks of market risk cap-
ital charge, while the internal model is for calculating the general market risks of capital charge and for managing internal risks.
Relying on the internal model approved by the Financial Supervisory Service, Woori Bank uses the historical simulation method at a 99 percent confidence level,
once out of 10 days of holding, to measure Value at Risk (VaR) and calculate the market risk capital charge for calculating the BIS ratio. For internal control pur-
poses, the bank controls daily limits by measuring VaR at 99 percent confidence level per day. Model validation is carried out through daily back-testing of the
VaR measurement and actual profit/loss.
In addition to VaR, we perform monthly stress testing to measure the loss amount in the event of abnormal market situations, such as IMF borrowings or a
global financial crisis.
Market risk limits, including the VaR limits, loss limits and risk capital limits, are managed by Business Group, department/team and risk type and annually
set by the Risk Management Committee. Limits for the subordinate units, excluding the derivatives books, are set by position-related departments within the
given limits. Compliance to the limits are monitored by the Risk Management Departments independently from the working-level departments, and the moni-
toring reports are made to the Risk Management Council and Risk Management Committee on a regular basis.
(5) Liquidity Risk
(A) Definition
Liquidity risk management is aimed at preventing potential losses to a financial institution arising from a shortage of funds through effective management
of liquidity crunch due to disparity in maturity of assets and liabilities or unexpected outflow of funds. Therefore, derivatives products that involve the cash
flow off balance account, as well as all assets and liabilities appearing on financial statements, are subject to our liquidity risk management activities.
(B) Methods
① Funding/Application Status Analysis by Maturity (Maturity Gap Model)
In managing liquidity risk, we determine the maturity gaps and gap ratios from the cash flow statements by time groups (remaining maturities or contract
periods) by grouping assets and liabilities according to a different ALM chart of accounts. Based on the outcomes, we maintain the gap ratios within pre-
determined target ratios (limits).
Our daily ALM system allows for inquiring maturity classification reports by business group, while providing daily liquidity ratios to identify the liquidity risk
management indicators and status at related departments.
These maturity-based reports of each business group are available on the daily ALM system and we provide daily liquidity ratio reports to related depart-
ments (Financial Planning Department, Treasury Department and all business groups) to keep them up to date with liquidity risk management indicators
and status.
② Contingency Planning & Implementation
In effective response to capital outflow and funding risks arising from abrupt and unforeseeable changes in market environments, we prepare bank-wide
contingency plans to conduct regular monitoring on all issues with possible liquidity risks on a daily and weekly basis.
(6) Risk Management of Derivatives Products
Derivatives transactions are set to hedge any risks of loss in assets of holding, but they entail characteristic complexity and inherent risk factors. Therefore,
Woori Bank caps the transactions and losses to hedge excessive loss potentials by limiting the transaction volumes. Prior to any atypical transactions (hybrid
derivatives) or exotic derivatives transactions, when necessary, the Risk Management Department reviews potential risks in advance and then moves to
the Risk Management Council for deliberation. Additionally, we minimize potential risks of losses by dividing the job processes into front office, middle office
and back office so as to keep in check all procedures related to derivatives transactions.
Woori Bank
Annual Report 2016
093
INDEPENDENT AUDITORS' REPORT
Woori Bank
Annual Report 2016
094
Woori Bank
Annual Report 2016
095
WOORI BANK AND SUBSIDIARIES
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2016 AND 2015
AS OF DECEMBER 31, 2016 AND 2015
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 4,10,11,12,18 and 45)
Investments in joint ventures and associates (Note 13)
Investment properties (Note 14)
Premises and equipment (Notes 15 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 4,11,12 and 26)
Net defined benefit assets (Note 24)
Other assets (Notes 19 and 45)
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, 44 and 45)
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 4,11,12,25 and 45)
Other liabilities (Notes 25 and 45)
Total liabilities
(Continued)
December 31,
December 31,
2016
2015
(Korean Won in millions)
7,591,324
6,644,055
5,650,724
20,817,583
13,910,251
258,392,633
439,012
358,497
2,458,025
483,739
2,342
6,229
232,007
140,577
70,938
128,846
310,682,727
3,803,358
221,020,411
18,769,515
23,565,449
428,477
64,666
171,192
22,023
7,221
21,985,086
299,376
290,136,774
5,132,657
17,170,592
13,621,640
244,842,062
643,861
351,496
2,471,206
419,806
17,904
6,782
210,597
183,128
-
143,286
291,859,072
3,460,561
209,141,826
20,033,917
21,898,859
516,601
99,691
108,943
19,379
-
16,964,206
305,174
272,549,157
Woori Bank
Annual Report 2016
096
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2016 AND 2015 (CONTINUED)
EQUITY
Owners‘ equity:
Capital stock (Note 28)
Hybrid securities (Note 29)
Capital surplus (Note 28)
Other equity (Note 30)
Retained earnings (Notes 31 and 32)
(Regulatory reserve for credit loss as of December 31, 2016 and 2015
is 2,255,252 million Won and 1,756,142 million Won, respectively)
(Regulatory reserve for credit loss to be reserved (reversed) as of
December 31, 2016 and 2015 is 182,939 million Won and 499,110
million Won, respectively)
(Planned provision (reversal) of regulatory reserve for credit loss as
of December 31, 2016 and 2015 is 182,939 million Won and 499,110
million Won, respectively)
Non-controlling interests
Total equity
Total liabilities and equity
See accompanying notes
December 31,
December 31,
2016
2015
(Korean Won in millions)
20,386,160
3,381,392
3,574,896
286,331
(1,468,025)
19,188,472
3,381,392
3,334,002
294,259
(1,547,303)
14,611,566
159,793
20,545,953
310,682,727
13,726,122
121,443
19,309,915
291,859,072
Woori Bank
Annual Report 2016
097
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
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 on credit loss (Notes 39 and 45)
General and administrative expenses (Notes 40 and 45)
Net other operating expenses (Notes 40 and 45)
Operating income
Share of losses of joint ventures and associates (Note 13)
Net other non-operating income (expense)
Non-operating income (loss) (Note 41)
Net income before income tax expense
Income tax expense (Note 42)
Net income from continuing operations
Net income
2016
2015
(Korean Won in millions,
except for per share data)
8,512,312
(3,492,768)
5,019,544
1,865,470
(928,339)
937,131
184,510
114,387
(1,035)
(834,076)
(3,478,476)
(367,779)
1,574,206
(19,507)
(1,310)
(20,817)
8,698,235
(3,936,335)
4,761,900
1,757,340
(780,544)
976,796
102,923
240,342
(3,281)
(966,646)
(3,150,387)
(610,061)
1,351,586
(70,124)
170,484
100,360
1,553,389
1,451,946
(275,856)
(376,554)
1,277,533
1,075,392
(Net income after the provision of regulatory reserve for credit loss for the
years ended December 31, 2016 and 2015 are 1,094,594 million Won and
576,282 million Won, respectively) (Note 32)
1,277,533
1,075,392
Remeasurement of the net defined benefit liability
Items that will not be reclassified to profit or loss
Gain on available-for-sale financial assets
Share of other comprehensive gain (loss) of joint ventures and associates
Gain on foreign currency translation of foreign operations
Gain on valuation of cash flow hedge
Items that may be reclassified to profit or loss
Other comprehensive income , net of tax
Total comprehensive income
Net income attributable to:
Net income attributable to owners
Net income attributable to non-controlling interests
Total comprehensive income attributable to:
Comprehensive income attributable to owners
Comprehensive income attributable to non-controlling interests
Basic and diluted earnings from operations per share
(In Korean Won) (Note 43)
See accompanying notes
34,162
34,162
12,586
(7,937)
28,712
10,371
43,732
77,894
(78,267)
(78,267)
72,297
3,295
33,837
-
109,429
31,162
1,355,427
1,106,554
1,261,266
16,267
1,332,614
22,813
1,567
1,059,157
16,235
1,094,870
11,684
1,301
Woori Bank
Annual Report 2016
098
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, 2016 AND 2015
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
January 1, 2015
Net income
Dividends
Change in ownership interest of
investments in consolidated
subsidiaries and others
Gain (loss) on valuation of
available-for-sale financial
assets
Share of other comprehensive
income of joint ventures and
associates
Gain (loss) on foreign currencies
translation of foreign
operations
Remeasurement of the net
defined benefit liability
Dividends to hybrid securities
Issuance of hybrid securities
Retirement of treasury stock
Appropriation of merger losses
December 31, 2015
January 1, 2016
Net income
Dividends
Change in capital surplus of
consolidated subsidiaries
Changes in non-controlling
interests due to acquisition of
subsidiary
Gain on valuation of available-
for-sale financial assets
Share of other comprehensive
loss of joint ventures and
associates
Gain on foreign currencies
translation of foreign
operations
Remeasurement of the net
defined benefit liability
Gain on valuation of cash flow
hedge
Dividends to hybrid securities
Issuance of hybrid securities
Repayment of hybrid securities
December 31, 2016
Capital
stock
Hybrid
securities
Capital
surplus
Other
equity
Retained
earnings
Controlling
interests
(Korean Won in millions)
Non-
controlling
interests
Total
equity
3,381,392
-
-
2,538,823
-
-
291,066
-
-
(2,393,138)
-
-
14,165,358
1,059,157
(504,952)
17,983,501
1,059,157
(504,952)
109,924
16,235
(824)
18,093,425
1,075,392
(505,776)
-
-
-
-
-
-
-
-
3,193
-
-
-
-
73,691
3,295
36,932
-
-
-
-
3,193
660
3,853
73,691
(1,394)
72,297
3,295
-
3,295
36,932
(3,095)
33,837
-
-
-
-
-
3,381,392
3,381,392
-
-
-
-
795,179
-
-
3,334,002
3,334,002
-
-
-
-
-
-
-
294,259
294,259
-
-
(78,204)
-
-
3,481
806,640
(1,547,303)
-
(183,320)
-
(3,481)
(806,640)
13,726,122
(78,204)
(183,320)
795,179
-
-
19,188,472
(63)
-
-
-
-
121,443
(78,267)
(183,320)
795,179
-
-
19,309,915
(1,547,303)
-
-
13,726,122
1,261,266
(168,317)
19,188,472
1,261,266
(168,317)
121,443
16,267
(1,286)
19,309,915
1,277,533
(169,603)
-
-
-
-
-
-
-
-
-
-
-
-
(7,928)
7,930
-
-
-
-
-
-
12,296
(7,937)
22,436
34,182
-
-
-
-
-
-
2
-
12,296
-
2
16,823
290
16,823
12,586
(7,937)
-
(7,937)
22,436
34,182
6,276
28,712
(20)
34,162
-
-
-
-
3,381,392
-
-
549,904
(309,010)
3,574,896
-
-
-
-
286,331
10,371
-
-
-
(1,468,025)
-
(206,515)
-
(990)
14,611,566
10,371
(206,515)
549,904
(310,000)
20,386,160
-
-
-
-
159,793
10,371
(206,515)
549,904
(310,000)
20,545,953
See accompanying notes
Woori Bank
Annual Report 2016
099
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
Cash flows from operating activities:
Net income
Adjustments:
Income tax expense
Interest income
Interest expense
Dividend income
Additions of expenses not involving cash outflows:
Impairment losses on credit loss
Loss on available-for-sale financial assets
Loss on valuation of investments in subsidiaries and associates
Loss on transaction / valuation of derivative instruments (hedging)
Loss on hedged items (fair value hedge)
Provisions
Retirement benefits
Depreciation and amortization of premises and equipment, intangible assets and
investment properties
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
Deduction of revenues not involving cash inflows:
Gain on valuation of financial instruments at fair value through profit or loss
Gain on valuation of investments in subsidiaries and associates
Gain on transaction / valuation of derivative instruments (hedging)
Gain on hedged items (fair value hedge)
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
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
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 provided by (used in) operating activities
(Continued)
2016
2015
(Korean Won in millions)
1,277,533
1,075,392
275,856
(8,512,312)
3,492,768
(184,510)
(4,928,198)
376,554
(8,698,235)
3,936,335
(102,923)
(4,488,269)
834,076
1,035
56,264
98,981
475
34,774
152,609
252,031
15,060
9,718
1,936
1,456,959
75,690
36,757
130
99,302
1,396
23,457
1,885
3,581
242,198
(99,581)
(14,433,390)
219,323
11,878,628
34,376
(261,097)
5,158,055
(6,163)
2,490,151
8,511,349
(3,593,358)
184,674
(251,627)
4,905,285
966,646
3,281
111,487
20,982
56,532
72,062
132,131
240,764
10
2,707
2,990
1,609,592
55,773
41,363
59,003
25,235
854
61,653
6,814
539
251,234
(495,507)
(23,150,910)
1,922
20,620,287
(66,399)
(255,585)
1,205,411
(91,116)
(2,231,897)
8,692,851
(4,355,880)
100,368
(534,829)
(383,906)
Woori Bank
Annual Report 2016
100
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (CONTINUED)
Cash flows from investing activities:
Cash in-flows from investing activities:
Disposal of available-for-sale financial assets
Redemption of held-to-maturity financial assets
Disposal of investments in joint ventures and associates
Disposal of premises and equipment
Disposal of intangible assets
Disposal of assets held-for-sale
Cash in-flow related to derivatives for risk hedge
Cash out-flows from investing activities:
Net cash flows through business combination
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
Cash out-flow related to derivatives for risk hedge
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Cash in-flows from financing activities:
Increase in borrowings
Issuance of debentures
Issuance of hybrid securities
Change in ownership interest of subsidiaries
Cash out-flows from financing activities:
Decrease in borrowings
Repayment of debentures
Payment of dividends
Dividends paid on hybrid securities
Repayment of hybrid securities
Dividends paid on non-controlling interests
Net cash provided by (used in) financing activities
Net increase in cash and cash equivalents
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
See accompanying notes
2016
2015
(Korean Won in millions)
20,395,744
8,462,346
97,135
63
4,325
22,723
-
28,982,336
132,301
23,844,849
8,818,376
43,281
4,428
131,009
191,161
42,544
33,207,949
(4,225,613)
8,259,380
15,848,055
549,904
-
24,657,339
9,524,626
14,118,720
168,317
201,328
310,000
1,286
24,324,277
333,062
1,012,734
6,644,055
(65,465)
7,591,324
18,426,846
6,404,711
75,599
18,600
1,782
3,711
56,956
24,988,205
38,535
16,305,797
7,138,013
1,098
-
129,454
97,891
3,273
23,714,061
1,274,144
12,674,649
13,502,777
795,179
3,787
26,976,392
10,346,919
16,425,353
504,952
179,758
-
824
27,457,806
(481,414)
408,824
5,962,861
272,370
6,644,055
Woori Bank
Annual Report 2016
101
WOORI BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
WOORI BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
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 currencies exchange business with
approval from the Bank of Korea (―BOK‖) and the Ministry of Finance and Economy (―MOFE‖).
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 with and into Woori Bank, its wholly-owned subsidiary, as
contemplated by the merger agreement dated July 28, 2014, by and between Woori Finance Holdings Co., Ltd.
and Woori Bank. Accordingly, the shares of the Bank, 597 million shares, prior to the merger, were 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, 2015, the common stock of the Bank amounts,
expressed in Korean Won (the ―KRW‖ or ―Won‖), to 3,381,392 million Won.
During the year ended December 31, 2016, the Korea Deposit Insurance Corporation (“KDIC”), the majority
shareholder of the Bank, sold its 187 million shares in the Bank in accordance with the contract of ‗Disposal of
Woori Bank‘s shares to Oligopolistic Shareholders‖. As of December 31, 2016 and 2015, KDIC held 158
million shares (23.37% ownership interest) and 345 million shares (51.06% ownership interest), respectively, of
the Bank‘s shares issued.
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 holding 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.
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 Asset Management Co., Ltd., and Woori Finance Research Institute
Co., Ltd. as its subsidiaries.
The head office of the Bank is located in 51 Sogong-ro, Jung Gu, Seoul, Korea. The Bank has 894 branches and
offices in Korea, and 22 branches and offices overseas as of December 31, 2016.
(2) The consolidated financial statements for Woori Bank and its subsidiaries (the ―Group‖) include the
following subsidiaries:
Subsidiaries
Main business
Woori Bank:
Woori FIS Co., Ltd.
Woori Private Equity Asset
Management Co., Ltd. (*5)
Woori Finance Research Institute
Co., Ltd.
Woori Card Co., Ltd.
Woori Investment Bank Co., Ltd.
Woori Credit Information Co., Ltd.
System software development
& maintenance
Finance
Other service business
Finance
Other credit finance business
Credit information
Percentage of ownership
(%)
December
31, 2016
December
31, 2015
Financial
statements
as of
Location
100.0
100.0
100.0
100.0
58.2
100.0
100.0
Korea
December, 31
100.0
Korea
December, 31
100.0
100.0
58.2
100.0
Korea
Korea
Korea
Korea
December, 31
December, 31
December, 31
December, 31
Woori Bank
Annual Report 2016
102
Subsidiaries
Woori America Bank
Woori Global Markets Asia Limited
Woori Bank (China) Limited
ZAO Woori Bank
PT Bank Woori Saudara Indonesia 1906 Tbk
Woori Brazil Bank
Korea BTL Infrastructure Fund
Woori Fund Service Co., Ltd.
Woori Finance Cambodia
Woori Finance Myanmar
Wealth Development Bank (*6)
Woori Bank Vietnam Limited (*6)
Kumho Trust First Co., Ltd. (*1)
Asiana Saigon Inc. (*1)
An-Dong Raja First Co., Ltd. (*1)
Consus Eighth Co., LLC (*1)
KAMCO Value Recreation First Securitization
Specialty Co., Ltd. (*1)
Hermes STX Co., Ltd. (*1)
BWL First Co., LLC (*1)
Woori Poongsan Co., Ltd. (*1)
Deogi Dream Fourth Co., Ltd. (*1)
Jeonju Iwon Ltd. (*1)
Wonju I one Inc. (*1)
Heitz Third Co., Ltd. (*1)
Woorihansoop 1st Co., Ltd. (*1)
Electric Cable First Co., Ltd. (*1)
Woori International First Co., Ltd. (*1)
Woori HJ First Co., Ltd. (*1)
Samsung Plus Private Equity Investment
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
Trust 36th and 34 beneficiary certificates
for the rest (*2)
Principle Guaranteed Trust (*3)
Principle and Interest Guaranteed Trust (*3)
Woori Bank and Woori Private Equity Co.,
Securities investment
and others
Trust
〃
Ltd.:
Woori Private Equity Fund (*4)
Woori Private Equity Fund
Woori EL Co., Ltd.
Woori Investment Bank:
Other financial business
Other financial business
Dongwoo First Securitization Specialty Co.,
Ltd. (*1)
Woori Card Co., Ltd.
Asset securitization
TUTU Finance-WCI Myanmar Co.,Ltd. (*7)
Finance
Main business
Finance
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
Asset securitization
〃
〃
〃
Percentage of ownership
December
31, 2016
100.0
100.0
100.0
100.0
74.0
100.0
99.9
100.0
100.0
100.0
51.0
100.0
0.0
0.0
0.0
0.0
(%)
December
31, 2015
100.0
100.0
100.0
100.0
74.0
100.0
99.9
100.0
100.0
100.0
-
-
0.0
0.0
0.0
0.0
China
Russia
Location
U.S.A
Brazil
Korea
Korea
Financial
statements as of
December, 31
Hong Kong December, 31
December, 31
December, 31
Indonesia December, 31
December, 31
December, 31
December, 31
Cambodia December, 31
December, 31
Myanmar
Philippines December, 31
December, 31
December, 31
December, 31
December, 31
December, 31
Vietnam
Korea
Korea
Korea
Korea
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
100.0
5.0
100.0
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
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
December, 31
December, 31
December, 31
December, 31
December, 31
December, 31
December, 31
December, 31
December, 31
December, 31
December, 31
December, 31
December, 31
December, 31
December, 31
31.9
Korea
December, 31
100.0
Korea
December, 31
5.0
-
Korea
December, 31
Myanmar
December, 31
(*1) The entity was a structured entity for the purpose of asset securitization and was in scope for consolidation.
Although the Group was not a majority shareholder, the Group 1) had the power over the investee, 2) was exposed,
or had rights, to variable returns from its involvement with the investee, and 3) had the ability to use its power to
affect its returns.
(*2) The entity was a structured entity for the purpose of investment in securities and was in scope for consolidation,
considering that the Group 1) had the power over the investee, 2) was 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.
(*3) The entity was a money trust under the Financial Investment Services and Capital Markets Act and was in scope for
consolidation. Although the Group was not a majority shareholder, the Group 1) has the power over the investee, 2)
was 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.
(*4) The entity was in scope for consolidation since the Group has controlling power over the entity, as a general partner.
(*5) The entity, formerly, Woori Private Equity Co., Ltd., registered as the professional private equity fund investor
during the year ended December 31, 2016, and the entity changed its name into Woori Private Equity Asset
Management Co., Ltd.
(*6) The entities were included in scope for consolidation since the Group acquired their majority ownership interests
during the year ended December 31, 2016.
- 2 -
Woori Bank
Annual Report 2016
103
(*7) Woori Card Co., Ltd. acquired the entity‘s majority ownership interest during the year ended December 31, 2016.
(3) As of December 31, 2016, and 2015, despite having more than a 50% ownership interest, the Group has not
consolidated the following companies as the Group does not have the ability to control following
subsidiaries:
Subsidiaries
Golden Bridge NHN Online Private Equity Investment (*)
Mirae Asset Maps Clean Water Private Equity Investment Trust 7th (*)
Kiwoom Yonsei Private Equity Investment Trust (*)
Kiwoom Frontier Professional Investment Private Fund 6(Bond) (*)
Subsidiaries
Golden Bridge NHN Online Private Equity Investment (*)
Heungkuk High Class Private Equity Securities Investment Trust 377th (*)
Mirae Asset Maps Clean Water Private Equity Investment Trust 7th (*)
Kiwoom Yonsei Private Equity Investment Trust (*)
As of December 31, 2016
Location
Korea
Korea
Korea
Korea
Main
business
Securities Investment
Securities Investment
Securities Investment
Securities Investment
Percentage of
ownership (%)
60.0
59.7
88.9
50.0
As of December 31, 2015
Location
Korea
Korea
Korea
Korea
Main
business
Securities Investment
Securities Investment
Securities Investment
Securities Investment
Percentage of
ownership (%)
60.0
51.3
59.7
88.9
(*) The Group owns the majority ownership interest in these structured entities, but has no power on the investees‘
relevant activities. As results, it is deemed that the Group has no power or control on the structured entities.
Woori Bank
Annual Report 2016
104
- 3 -
(4) The summarized financial information before the elimination of intercompany transactions of the
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, 2016
Assets
Liabilities
Operating
revenue
Net income
(loss)
attributable to
owners
Comprehensive
income (loss)
attributable to
owners
141,329
105,821
244,783
1,048
Woori FIS
Woori Private Equity Asset
Management Co., Ltd
Woori Finance Research Institute
Woori Card
Woori Investment Bank
Woori Credit Information
Woori America Bank
Woori Global Markets Asia Limited
Woori Bank (China) Limited
ZAO Woori Bank
PT Bank Woori Saudara Indonesia
1906 Tbk
Woori Brazil Bank
Korea BTL Infrastructure Fund
Woori Fund Service
Woori Finance Cambodia
Woori Finance Myanmar
Wealth Development Bank
Woori Bank Vietnam Limited
Money trust under the Trust
Business Act
Structured entity for the
97,338
3,710
7,606,108
1,576,627
31,292
2,186,049
272,008
4,984,017
239,860
2,089,822
241,229
784,770
11,386
32,405
4,305
209,779
159,223
53,244
334
6,180,893
1,404,566
4,416
1,973,263
147,581
4,466,812
188,474
1,693,111
206,043
299
1,372
24,751
2,651
174,446
278
1,525,145
1,495,815
2,154
4,445
1,555,373
178,572
27,884
73,909
7,255
475,174
16,221
179,014
17,059
33,476
7,787
4,545
380
12,519
-
55,540
29,480
312
108
109,393
23,872
543
15,266
1,863
32,025
5,650
24,573
2,786
29,617
1,011
1,250
(613)
1,248
(346)
697
6,912
1,432
219
100
116,381
23,897
618
20,899
5,582
11,505
15,553
48,542
9,600
29,617
1,011
1,494
(569)
1,876
3,545
697
7,138
securitization of financial assets
487,431
895,824
Security investments structured
entity
4,397,163
1,898,977
137,896
56,605
61,535
As of and for the year ended December 31, 2015
Assets
Liabilities
Operating
revenue
Net income
(loss)
attributable to
owners
Comprehensive
income (loss)
attributable to
owners
161,778
127,701
260,657
1,421
(833)
Woori FIS
Woori Private Equity Asset
Management Co., Ltd
Woori Finance Research Institute
Woori Card
Woori Investment Bank
Woori Credit Information
Woori America Bank
Woori Global Markets Asia Limited
Woori Bank (China) Limited
ZAO Woori Bank
PT Bank Woori Saudara Indonesia
1906 Tbk
Woori Brazil Bank
Korea BTL Infrastructure Fund
Woori Fund Service
Woori Finance Cambodia
Woori Finance Myanmar
Money trust under the Trust
Business Act
Structured entity for the
89,365
3,605
6,604,059
1,206,156
33,957
1,701,191
245,246
4,016,968
261,026
1,770,900
106,239
739,502
9,818
22,767
2,252
45,491
328
5,295,225
1,057,992
6,691
1,509,304
126,401
3,511,268
225,194
1,417,952
80,653
279
815
16,607
29
1,477,657
1,449,024
securitization of financial assets
545,534
961,065
- 4 -
3,669
4,149
1,379,873
129,404
31,271
67,932
6,851
408,566
17,301
375,747
19,850
34,042
6,247
2,705
9
56,397
22,728
1,224
86
116,858
10,435
1,806
12,893
1,763
1,056
7,232
24,023
2,330
30,307
358
579
(117)
125
1,024
62
119,976
7,830
1,830
24,356
8,958
32,855
(762)
10,691
(7,377)
30,307
358
946
(166)
125
(13,685)
(6,662)
Woori Bank
Annual Report 2016
105
As of and for the year ended December 31, 2016
Assets
Liabilities
Operating
revenue
Net income
(loss)
attributable to
owners
Comprehensive
income (loss)
attributable to
owners
Security investments structured
entity
3,071,375
562,477
126,904
26,906
41,080
(5) The financial support that the Group provides to consolidated structured entities is as follows:
- Structured entity for 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.
- Structured entity for investment in securities
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 certain 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 Group.
(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. 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 such investors
including the Group based on business outlook of such projects. In relation to such investments, the Group
Woori Bank
Annual Report 2016
106
- 5 -
recognizes interest incomes on loans, gains or losses on valuation of equity investments or dividend income.
The structured finance is secured by additional funding agreement, guarantee or credit facilities. However,
the structured financing project would fail to return the capital of equity investments or principal of loans to
the Group if it is discontinued or did not achieve business outcome.
Investment funds include trusts and private equity funds. A trust is formed by contributions from various
investors, operated by a manager engaged to the trust and distributed proceeds from sales of investments to
the investors. A private equity fund is established in order to acquire ownership interests in a portfolio
company with exit strategy after implementing financial and operational restructuring of the company. The
Group recognizes unrealized gains or losses on change in value of investments in proposition of ownership
interests in investments. The Group would be exposed to risks of loss when the value of portfolio
investment is decreased.
Total assets of the unconsolidated structured entities, the carrying value of the related items recorded, the
maximum exposure to risks, and the loss recognized in conjunction with the unconsolidated structured
entities as of and for the year ended December 31, 2016 and 2015 are as follows (Unit: Korean Won in
millions):
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
Derivative liabilities
Other liabilities (including provisions)
The maximum exposure to risks
Investments
Purchase agreements
Credit facilities
Other commitments
Loss recognized on unconsolidated structured entities
December 31, 2016
Asset
securitization
vehicle
8,426,713
Structured
finance
61,324,862
Investment
funds
9,131,362
3,361,910
65,470
-
1,216,446
2,079,648
-
346
1,363
201
1,162
4,263,993
3,361,910
28,000
834,083
40,000
6,353
2,790,215
2,414,044
254,150
115,843
-
-
6,178
1,224
362
862
3,802,210
2,790,215
-
970,195
41,800
71,185
1,749,494
-
-
1,664,865
-
84,629
-
-
-
-
1,749,494
1,749,494
-
-
-
683
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Woori Bank
Annual Report 2016
107
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
Derivative liabilities
Other liabilities (including provisions)
The maximum exposure to risks
Investments
Purchase agreements
Credit facilities
Loss recognized on unconsolidated structured entities
December 31, 2015
Asset
securitization
vehicle
10,138,371
Structured
finance
48,198,653
Investment
Funds
7,611,232
4,219,809
148,811
-
1,649,949
2,420,870
-
179
3,688
126
3,562
5,250,850
4,219,809
74,000
957,041
2,205
2,879,310
2,439,207
274,175
133,455
-
-
32,473
728
-
728
3,877,161
2,879,310
48,000
949,851
47,942
963,747
26,976
-
654,705
-
282,066
-
-
-
-
963,747
963,747
-
-
-
(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 reporting period
Woori Investment Bank
PT Bank Woori Saudara Indonesia 1906 Tbk
Wealth Development Bank
December 31, 2016
73,986
70,249
16,983
December 31, 2015
64,013
58,880
-
2) Net income attributable to non-controlling interests
Woori Investment Bank
PT Bank Woori Saudara Indonesia 1906 Tbk
Wealth Development Bank
3) Dividends to non-controlling interests
For the year ended
December 31, 2016
9,990
6,383
611
For the year ended
December 31, 2015
4,353
6,241
-
PT Bank Woori Saudara Indonesia 1906 Tbk
For the year ended
December 31, 2016
1,242
For the year ended
December 31, 2015
778
Woori Bank
Annual Report 2016
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2.
SIGNIFICANT BASIS OF PREPARATION AND ACCOUNTING POLICIES
(1) Basis of presentation
The Group‘s consolidated financial statements are prepared in accordance with 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, 2016 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 February 8, 2017.
1) The Group has newly adopted the following amendment to K-IFRS that affected the Group‘s accounting
policies.
Amendments to K-IFRS 1001 – Presentation of Financial Statements
The amendments to K-IFRS 1001 clarify the concept of applying materiality in practice and restrict an entity
reducing the understandability of its financial statements by obscuring material information with immaterial
information or by aggregating material items that have different natures or functions. The adoption of the
amendments has no material 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 adoption of the amendments has no material impact on the
Group‘s consolidated financial statements.
Amendments to K-IFRS 1038 – Intangible Assets
The amendments to K-IFRS 1038 rebuts presumption that revenue is not an appropriate basis for the
amortization of an intangible assets, which the presumption can only be rebutted when the intangible asset
expressed as a measure of revenue or when it can be demonstrated that revenue and consumption of the
economic benefits of the intangible asset are highly correlated. The adoption of the amendments has no
material impact on the Group‘s consolidated financial statements.
Amendments to K-IFRS 1110 – Consolidated Financial Statements & K-IFRS 1112 – Disclosure of interests
in other entities & K-IFRS 1028 – Investment in associates
The amendments clarify that in applying the equity method of accounting to an associate or a joint venture
that is an investment entity, an investor may retain the fair value measurements that the associate or joint
venture used for its subsidiaries. The adoption of the amendments has no material impact on the Group‘s
consolidated financial statements.
Amendments to K-IFRS 1111 – Joint Arrangement
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 adoption of the amendments has no material impact on the Group‘s consolidated financial
statements.
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Other than the amendment stated above, there are several annual improvements in the current period, but the
application of the amendments has had no material effect 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 1007 – Statement of Cashflows
The amendments require that changes in liabilities arising from financial activities are disclosed. The
amendments are effective for annual periods beginning on or after January 1, 2017.
Amendments to K-IFRS 1012 – Income Taxes
The amendments clarify that unrealized losses on fixed-rate debt instruments measured at fair value and
measured at cost for tax purposes give rise to a deductible temporary difference regardless of whether the
holder expects to recover the carrying amount of the debt instrument by sale or by use and that the estimate
of probable future taxable profit may include the recovery of some of assets for more than their carrying
amount. When the Group assesses whether there will be sufficient taxable profit, the Group should compare
the deductible temporary differences with future taxable profit that excludes tax deductions resulting from the
reversal of those deductible temporary differences. The amendments are effective for annual periods
beginning on or after January 1, 2017.
Amendments to K-IFRS 1102 – Share-based Payment
The amendments include: 1) when measuring the fair value of share-based payment, the effects of vesting
and non-vesting conditions on the measurement of cash-settled share-based payment should be consistent
with the measurement of equity-settled share-based payment, 2) Share-based payment transaction in which
the Group settles the share-based payment arrangement net by withholding a specified portion of the equity
instruments per statutory tax withholding requirements would be classified as equity-settled in its entirety, if
otherwise would be classified as equity-settled without the net settlement feature, and 3) when a cash-settled
share-based payment changes to an equity-settled share-based payment because of modifications of the terms
and conditions, the original liability recognized is derecognized and the equity-settled share-based payment is
recognized at the modification date fair value. Any difference between the carrying amount of the liability at
the modification date and the amount recognized in equity at the same date would be recognized in profit and
loss immediately. The amendments are effective for annual periods beginning on or after January 1, 2018.
Enactment of K-IFRS 1109 – Financial Instruments
The amendments to K-IFRS 1109 contain the requirements for the classification and measurement of
financial assets and financial liabilities based on a business model whose objective is achieved both by
collecting contractual cash flows and selling financial assets and based on the contractual terms that give rise
on specified dates to cash flows, impairment methodology based on the expected credit losses, and broadened
types of instruments that qualify as hedging instruments and the types of risk components of non-financial
items that are eligible for hedge accounting and the change of the hedge effectiveness test. The amendments
are effective for annual periods beginning on or after 1 January 2018.
The Group is in the process of changing the related accounting systems to adopt K-IFRS 1109, however the
impact from the adoption on the Group‘s consolidated financial statements is yet to be analyzed. Meanwhile,
the typical financial impacts per each major requirements under the Standard that are expected to be
applicable are as follows:
Phase 1: Classification and measurement of financial assets and financial liabilities
All recognized financial assets that are currently within the scope of K-IFRS 1109 will be subsequently
measured either at amortized cost, fair value through other comprehensive income (FVOCI), or fair value
through Profit or Loss (FVTPL) under K-IFRS 1109 based on the business model and the nature of the
contractual cash flows. Specifically:
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The nature of
contractual cash flows
Objective is to collect the
contractual cash flows
Contractual cash flows
that are solely payment
of principal and interest
Measured at amortized
cost(*)
The business model
Objective is achieved
both by collecting the
contractual cash flows
and selling financial
assets
Measure at
FVOCI(*)
Objective is to sell
financial assets and so
on
Measure at FVTPL
Other than the above
Measure at FVTPL
Measure at FVTPL
Measure at FVTPL
(*) For eliminating or reducing accounting discrepancies an irrevocable election can be made at initial
recognition to measure the investment at FVTPL
In accordance with K-IFRS 1039, the Group holds Loans and receivables amounting to 258,392,633 million
Won, Held-to-maturity financial assets amounting to 13,910,251 million Won, Available-for-sale financial
assets amounting to 20,817,583 million Won and FVTPL amounting to 5,650,724 million Won as of
December 31, 2016.
In accordance with K-IFRS 1109, an entity may make an irrevocable election at initial recognition for
particular investments in equity instruments that would otherwise be measured at fair value through profit or
loss to present subsequent changes in fair value in other comprehensive income, and the amount amounts
should be recycled to profit or loss. In accordance with K-IFRS 1039, the Group holds equity investments that
are classified as Available-for-sale financial assets (except for the puttable instrument defined in K-IFRS 1032)
amounting to 1,161,292 million Won as of December 31, 2016.
One major change from K-IFRS 1039 relates to the presentation of changes in the fair value of a financial
liabilities designated as at FVTPL attributable to changes in the credit risk of that liability. Under K-IFRS
1109, such changes are presented in other comprehensive income, unless the presentation of the effect of the
change in the liability‘s credit risk in other comprehensive income would create or enlarge an accounting
mismatch in profit or loss. Changes in fair value attributable to a financial liability‘s credit risk are not
subsequently reclassified to profit or loss.
In case a Hybrid contract contains financial asset hosts, an entity shall recognize the entire hybrid contract as
financial asset, not separating the embedded derivative from the host.
In accordance with K-IFRS 1039, the Group holds financial liabilities designated as at FVTPL 766,880
million Won as of December 31, 2016.
Phase 2: Impairment methodology
The impairment model under K-IFRS 1109 reflects expected credit losses. Under the impairment approach in
K-IFRS 1109, it is no longer necessary for a credit event to have occurred before credit losses are recognized.
Instead, an entity always accounts for expected credit losses and changes in those expected credit losses. The
amount of expected credit losses should be updated at each reporting date to reflect changes in credit risk
since initial recognition.
In accordance with K-IFRS 1109, the allowance for doubtful receivables is measured at the amount equivalent
to the expected 12-month credit loss or the lifetime expected credit loss, depending on the degree of
deterioration of the credit risk after the initial recognition of the financial asset.
Stage
Allowance recognition
Stage 1
In case the exposure‘s
credit risk has not
increased significantly
since initial recognition
The Group recognizes
only 12-month expected
credit losses as a loss
Stage 2
In case the exposure
has suffered a
significant increase in
credit risk
Stage 3
In case the exposure
meets the accounting
definition of credit
impaired
The Group recognizes a loss allowance equal to
lifetime expected credit losses
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Meanwhile, K-IFRS 1109 requires that, an entity shall only recognize the cumulative changes in lifetime
expected credit losses since initial recognition as a loss allowance for purchased or originated credit-impaired
financial assets.
allowance
In accordance with K-IFRS 1039, the Group holds loans and receivables amounting to 260,419,729 million
Won and Allowance for credit losses amounting to 2,027,096 million Won as of December 31, 2016.
Phase 3: Hedge accounting
The general hedge accounting requirements of K-IFRS 1109 retain the three types of hedge accounting
mechanisms in K-IFRS 1039: Fair Value Hedge, Cash Flow Hedge, and Hedge of Net Investment in a Foreign
Operation. However, greater flexibility has been introduced to the types of transactions eligible for hedge
accounting, specifically broadening the types of instruments that qualify as hedging instruments and the types
of risk components of non-financial items that are eligible for hedge accounting. In addition, the effectiveness
test has been overhauled and replaced with the principle of an ‗economic relationship‘ Retrospective
assessment of hedge effectiveness is no longer required. Far more disclosure requirements about an entity‘s
risk management activities have been introduced.
Enactment of K-IFRS 1115 – Revenue from Contracts with Customers
The core principle under K-IFRS 1115 is that an entity should recognize revenue to depict the transfer of
promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. The enactment introduces a 5-step approach to
revenue recognition and measurement: 1) Identify the contract with a customer, 2) Identify the performance
obligations in the contract, 3) Determine the transaction price, 4) Allocate the transaction price to the
performance obligations in the contract, 5) Recognize revenue when (or as) the entity satisfies a performance
obligation. This standard will supersede K-IFRS 1011 - Construction Contracts, K-IFRS 1018- Revenue, K-
IFRS 2113 - Customer Loyalty Programmes, K-IFRS 2115-Agreements for the Construction of Real Estate,
K-IFRS 2118 - Transfers of Assets from Customers, and K-IFRS 2031-Revenue-Barter Transactions Involving
Advertising Services. The enactment is effective for annual periods beginning on or after 1 January 2018.
The Group is reviewing the impact from the amendments and the enactments listed above on the Group‘s
consolidated financial statements.
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(2) Basis of consolidated financial statement presentation
The consolidated financial statements incorporate the financial statements of the Bank and the 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 Group's
voting rights in an investee are sufficient to give it power, including:
• The relative size of the Group's holding of voting rights 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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113
(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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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.
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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
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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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 Group. 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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(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 3 months 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 Financial assets at fair value through profit or loss
(―FVTPL‖), AFS financial assets, held-to-maturity (―HTM‖) and loans and receivables.
a) Financial assets at FVTPL:
A financial asset is classified as held for trading if:
it has been acquired principally for the purpose of selling it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the Group manages
together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
A financial asset other than a financial asset held for trading or contingent consideration that may be paid
by an acquirer as part of a business combination may be designated as at FVTPL upon initial recognition if:
such designation eliminates or significantly reduces a measurement or recognition inconsistency that
would otherwise arise; or
the financial asset forms part of a group of financial assets or financial liabilities or both, which is
managed and its performance is evaluated on a fair value basis, in accordance with the Group's
documented risk management or investment strategy, and information about the grouping is provided
internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and K-IFRS 1039 Financial
Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to
be designated as at FVTPL.
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.
b) AFS financial assets:
Financial assets that are not classified as HTM, financial assets 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.
c) 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.
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d) Loans and receivables:
Non-derivative financial assets with fixed or determinable repayments that are not quoted in an active
market are classified as loans and receivables, except those that are classified as AFS or as held-for-trading,
or designated as at FVTPL. 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 financial liabilities at FVTPL (held for trading, and
financial liabilities designated as at FVTPL) and financial liabilities measured at amortized cost.
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.
A financial liability other than a financial liability held for trading may be designated as at FVTPL upon
initial recognition if:
such designation eliminates or significantly reduces a measurement or recognition inconsistency that
would otherwise arise; or
the financial liability forms part of a group of financial assets or financial liabilities or both, which is
managed and its performance is evaluated on a fair value basis, in accordance with the Group's
documented risk management or investment strategy, and information about the grouping is provided
internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and K-IFRS 1039 Financial
Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to
be designated as at FVTPL.
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.
All other financial liabilities, such as deposits due to customers, borrowings, and debentures, 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.
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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
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.
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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.
a) 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, and generally uses the lowest of the prices obtained from such services without further adjustment.
For non-marketable equity securities, the Group obtains prices from the independent pricing services. 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.
b) 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.
c) 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).
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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.
a) 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.
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.
b) 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.
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(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.
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.
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(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, such as goodwill and membership, 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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(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 others in other assets 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 depending on the purpose. 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.
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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
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) 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.
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(18) 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.
(19) 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 will be amortized, 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 in
net income over the period of the guarantee.
(20) 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.
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Woori Bank
Annual Report 2016
127
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.
(21) 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 carry forwards 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.
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.
(22) 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.
Woori Bank
Annual Report 2016
128
- 27 -
3.
SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS
The significant accounting estimates and assumptions are continually evaluated and are based on historical
experiences and various factors including expectations of future events that are considered to be reasonable.
Actual results can differ from those estimates based on such definitions. The accounting estimates and
assumptions, which involve potential significant risks that may materially impact the book values of assets and
liabilities on the Group‘s consolidated financial statements, are as follows:
(1)
Impairment of goodwill
The Group performs goodwill impairment test annually, or whenever there is any indicator that CGU may have
been impaired. Determining whether goodwill is impaired requires an estimation of the value in use of the CGU
to which goodwill has been allocated. The value in use calculation requires the management to estimate the
future cash flows expected to arise from the CGU and a suitable discount rate in order to calculate present value.
(2)
Income taxes
The Group is subject to income taxes in numerous jurisdictions, which requires significant judgment in
determining realization of deferred tax. Actual tax payment may be different from the provision estimate and
such difference may affect the income tax expense. There are various transactions and calculations for which the
ultimate tax determination is uncertain. Deferred tax assets relating to tax losses carried forward and deductible
temporary differences are recognized, only to the extent that it is probable that future taxable profit will be
available against which the tax losses carried forward and the deductible temporary differences can be utilized.
This assessment requires significant management estimates and judgments. Future taxable profit is estimated
based on, among other relevant factors, forecasted operating results, which are based on historical financial
performance. In the event the Group was to determine that it would be able to realize its deferred income tax
assets in the future at an amount different than their net recorded amount, the Group would make an adjustment
to the provision for income taxes at such time.
Under the Earnings Accumulation Tax (EAT) regime, the Group may incur additional tax burden depending on
its level of investment, payroll increase or cash dividends for the preceding three years from 2015. As such, there
exists uncertainty with regard to the estimation of such tax impact to the Group, which is measured by the
management given the level of expected investment, payroll increase and cash dividends.
(3) Valuation of Financial Instruments
Financial instruments classified as held-for trading or designated as at FVTPL and financial instruments
classified as AFS are recognized in the financial statements at fair value. All derivatives are measured at fair
value. Financial instruments, which are not traded in active market will have less objective fair value and require
broad judgment in liquidity, concentration, uncertainty in market factors and assumption in price determination
and other risks. The fair value of those assets is established by using valuation techniques.
As described in the significant accounting policies in Note 2-(9)-5), ‗ Fair value of financial assets and liabilities‘,
a range of valuation techniques, which include market approach and income approach and internally developed
models that incorporate various types of assumptions and variables, are used to determine the fair value of
financial instruments.
(4)
Impairment of loans
Impairment loss for loans and receivables carried at amortized cost is measured as the difference between such
assets‘ carrying value and the present value of estimated recoverable cash flows (not include any future loss
events that have not occurred) discounted by using the initial effective interest rate. After initial recognition,
when the estimated cash flow of the financial asset is affected by one or more loss events, it is determined that
the financial asset is impaired.
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129
The objective evidences that a financial asset is impaired incorporate below loss events:
1) Financial assets that are individually assessed
Past due
-
- Debt restructuring
-
Possible state of debtor‘s bankruptcy or liquidation
- Occurrence of significant impairment on securities
- Breach of limit or debt covenant
- Deterioration of operating performance
2) Financial assets that are not individually assessed
- Repayment status of debtor or observable macro-economic indexes
The Group first assesses whether objective evidence of impairment exists individually for financial assets that
are individually significant (individual evaluation of impairment), and individually or collectively for financial
assets that are not individually significant. If the Group determines that no objective evidence of impairment
exists for an individually assessed financial asset, it includes the asset in a group of financial assets with similar
credit risk characteristics and collectively assesses them for impairment (collective evaluation of impairment).
There are two components to the Group's loan impairment provisions (individual and collective).
Individual assessment of impairment losses are calculated by discounting the expected future cash flows of a
loan at its original effective interest rate and comparing the resultant present value with the loan‘s carrying
amount. This process normally encompasses management‘s best estimate, such as operating cash flow of debtor
and net realizable value of any collateral held and the timing of anticipated receipts.
Collective assessment of impairment losses are established on a portfolio basis using the methodology based on
historical loss experience. The methodology based on historical loss experience is used to estimate inherent
incurred loss on groups of assets for collective evaluation of impairment. Such methodology incorporates factors
such as type of product and debtors, credit rating, portfolio size, loss emergence period and recovery period and
applies probability of default on each assets (or pool of assets) and loss given default by type of collateral. Also,
consistent assumptions are applied to form a formula-based model in estimating inherent loss and to determine
factors on the basis of historical loss experience and current condition. The methodology and assumptions used
for estimating future cash flows are reviewed regularly to reduce any differences between loss estimates and
actual loss experience.
(5) Defined benefit plan
The Group operates defined benefit retirement pension plans. Defined benefit retirement pension plans are
measured through actuarial valuation and the Group estimates discount rate, future wage growth rate, mortality
ratio to produce actuarial valuation. Defined benefit retirement pension plans contain significant uncertainty in
these estimates due to its long-term characteristic.
Woori Bank
Annual Report 2016
130
- 29 -
4. RISK MANAGEMENT
The Group‘s operating activity is exposed to various financial risks. The Group is required to analyze and assess
the level of complex risks, and determine the permissible level of risks and manage such risks. The Group‘s risk
management procedures have been established to improve the quality of assets for holding or investment
purposes by making decisions as how to avoid or mitigate risks through the identification of the source of the
potential risks and their impact.
The Group has established an approach to manage the acceptable level of risks and reduce the excessive risks in
financial instruments in order to maximize the profit given risks present, for which the Group has implemented
processes for risk identification, assessment, control, and monitoring and reporting.
The risk is managed by the risk management department in accordance with the Group‘s risk management policy.
The Risk Management Committee makes decisions on the risk strategies such as the avoidance of concentration
on capital at risk and the establishment of acceptable level of risk.
(1) Credit risk
Credit risk represents the possibility of financial losses incurred when the counterparty fails to fulfill its
contractual obligations. The goals of credit risk management are to maintain the Group‘s credit risk exposure to
a permissible degree and to optimize its rate of return considering such credit risk.
1) Credit risk management
The Group considers the probability of failure in performing the obligation of its counterparties, credit
exposure to the counterparty, the related default risk and the rate of default loss. The Group uses the credit
rating model to assess the possibility of counterparty‘s default risk; and when assessing the obligor‘s credit
grade, the Group utilizes credit grades derived using statistical methods.
In order to manage credit risk limit, the Group establishes the appropriate credit line per obligor, company
or industry. It monitors obligor‘s credit line, total exposures and loan portfolios when approving the loan.
The Group mitigates credit risk resulting from the obligor‘s credit condition by using financial and physical
collateral, guarantees, netting agreements and credit derivatives. The Group has adopted the entrapment
method to mitigate its credit risk. Credit risk mitigation is reflected in qualifying financial collateral, trade
receivables, guarantees, residential and commercial real estate and other collaterals. The Group regularly
performs a revaluation of collateral reflecting such credit risk mitigation.
2) Maximum exposure to credit risk
The Group‘s maximum exposure to credit risk refers to net book value of financial assets net of allowances,
which shows the uncertainties of maximum changes of net value of financial assets attributable to a
particular risk without considering collateral and other credit enhancements obtained. However, the
maximum exposure is the fair value amount (recorded on the books) for derivatives, maximum contractual
obligation for payment guarantees and loan commitment for loan contracts.
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Woori Bank
Annual Report 2016
131
The maximum exposure to credit risk is as follows (Unit: Korean Won in millions):
December 31, 2016
December 31, 2015
Loans and receivables:
Korean treasury and government agencies
Banks
Corporates
Consumers
Sub-total
Financial assets at fair value through profit or loss
(―FVTPL‖):
Gold banking assets
Debt securities held for trading
Financial assets designated at FVTPL
Derivative assets for trading
Sub-total
Available-for-sale (―AFS‖) debt securities
Held-to-maturity (―HTM‖) securities
Derivative assets for hedging
Off-balance accounts :
Guarantees
Loan commitments
Sub-total
Total
a) Credit risk exposure by geographical areas
16,058,305
20,242,260
88,985,566
133,106,502
258,392,633
26,180
2,644,916
4,348
2,898,295
5,573,739
16,541,888
13,910,251
140,577
14,761,784
83,795,496
98,557,280
393,116,368
12,062,603
19,048,126
93,765,023
119,966,310
244,842,062
24,884
2,617,406
986
2,390,497
5,033,773
14,723,577
13,621,640
183,128
17,315,443
88,211,580
105,527,023
383,931,203
The following tables analyze credit risk exposure by geographical areas (Unit: Korean Won in millions):
Loans and receivables
Financial assets at FVTPL
AFS debt securities
HTM securities
Derivative assets
Off-balance accounts
Total
Loans and receivables
Financial assets at FVTPL
AFS debt securities
HTM securities
Derivative assets
Off-balance accounts
Total
Korea
241,380,250
5,205,849
16,155,290
13,758,863
74,166
96,245,092
372,819,510
China
4,286,018
6,525
13,845
-
-
737,513
5,043,901
Korea
231,685,404
4,664,382
14,427,447
13,525,799
91,022
103,454,192
367,848,246
China
2,808,255
11,794
38,094
-
-
607,685
3,465,828
December 31, 2016
UK
895,874
261,547
-
-
66,342
80,831
3,053,415 1,304,594
USA
2,792,088
-
137,861
20,336
-
103,130
Japan
323,470
81
-
-
-
23,250
346,801
Others (*)
Total
8,714,933 258,392,633
5,573,739
16,541,888
13,910,251
140,577
98,557,280
10,548,147 393,116,368
99,737
234,892
131,052
69
1,367,464
USA
2,606,044
-
96,443
15,112
-
88,552
December 31, 2015
UK
644,387
269,039
-
-
91,538
107,239
2,806,151 1,112,203
Japan
192,599
-
-
-
-
28,884
221,483
Total
Others (*)
6,905,373 244,842,062
5,033,773
14,723,577
13,621,640
183,128
1,240,471 105,527,023
383,931,203
8,477,292
88,558
161,593
80,729
568
(*) Others consist of financial assets in Indonesia, Vietnam, Panama, European countries and others.
Woori Bank
Annual Report 2016
132
- 31 -
b) Credit risk exposure by industries
The following tables analyze credit risk exposure by industries, which are service, manufacturing, finance
and insurance, construction, individuals and others in accordance with the Korea Standard Industrial
Classification Code (Unit: Korean Won in millions):
Service
Manufacturing
Finance and
insurance
Construction
Individuals
Others
Total
December 31, 2016
46,040,278
35,652,974
37,711,983
3,789,670
125,558,637
9,639,091
258,392,633
77,198
360,881
4,093,567
24,140
993
1,016,960
5,573,739
1,092,279
1,673,971
-
57,781
-
-
9,568,151
8,290,451
140,577
63,166
251,599
-
-
-
-
5,760,511
3,694,230
-
16,541,888
13,910,251
140,577
18,423,611
67,307,337
26,878,320
62,949,956
9,927,574
69,732,303
4,621,971
8,750,546
33,603,651
159,163,281
5,102,153
25,212,945
98,557,280
393,116,368
Service
Manufacturing
Finance and
insurance
Construction
Individuals
Others
Total
December 31, 2015
48,470,594
37,699,589
32,604,765
5,160,497 112,491,741
8,414,876 244,842,062
124,325
346,684
3,241,785
35,096
21
1,285,862
5,033,773
781,989
1,931,529
-
47,119
20,000
-
9,213,137
7,875,325
183,128
31,159
472,209
-
-
-
-
4,650,173
3,322,577
-
14,723,577
13,621,640
183,128
18,572,657
69,881,094
31,975,235
70,088,627
13,871,934
66,990,074
5,307,240
11,006,201
30,606,423
143,098,185
5,193,534 105,527,023
383,931,203
22,867,022
Loans and
receivables
Financial assets at
FVTPL
AFS debt
securities
HTM securities
Derivative assets
Off-balance
accounts
Total
Loans and
receivables
Financial assets at
FVTPL
AFS debt
securities
HTM securities
Derivative assets
Off-balance
accounts
Total
3) Credit risk of loans and receivables
The credit exposure of loans and receivables by customer and loan condition is as follows (Unit: Korean
Won in millions):
Korean treasury
and government
agencies
Banks
General
business
December 31, 2016
Corporates
Small and
medium sized
enterprise
Project
financing
and others
Sub-total
Consumers
Total
Loans and receivables
neither overdue nor
impaired
Loans and receivables
overdue but not
impaired
Impaired loans and
receivables
Gross loans and
receivables
Allowance for credit
losses
Total, net
16,062,399
20,258,860
49,815,352
31,520,617
7,142,440
88,478,409 132,195,005
256,994,673
-
-
-
-
48,294
57,245
-
105,539
765,829
871,368
1,404,568
429,955
208,372
2,042,895
510,793
2,553,688
16,062,399
20,258,860
51,268,214
32,007,817
7,350,812
90,626,843 133,471,627
260,419,729
4,094
16,058,305
16,600
20,242,260
1,156,000
50,112,214
424,142
31,583,675
61,135
7,289,677
1,641,277
365,125
88,985,566 133,106,502
2,027,096
258,392,633
- 32 -
Woori Bank
Annual Report 2016
133
Korean treasury
and government
agencies
Banks
General
business
December 31, 2015
Corporates
Small and
medium sized
enterprise
Project
financing
and others
Sub-total
Consumers
Total
12,065,749 19,062,673
53,282,955
31,665,220
7,618,968
92,567,143 118,888,052 242,583,617
-
-
682
66,770
91,406
-
158,176
900,313
1,059,171
2,331
2,005,366
506,793
585,684
3,097,843
577,157
3,677,331
12,065,749 19,065,686
55,355,091
32,263,419
8,204,652
95,823,162 120,365,522 247,320,119
3,146
17,560
12,062,603 19,048,126
1,393,401
53,961,690
516,891
31,746,528
147,847
8,056,805
2,058,139
2,478,057
93,765,023 119,966,310 244,842,062
399,212
Loans and receivables
neither overdue nor
impaired
Loans and receivables
overdue but not
impaired
Impaired loans and
receivables
Gross loans and
receivables
Allowance for credit
losses
Total, net
a) Credit quality of loans and receivables
The Group manages credit quality of its loans and receivables, (neither overdue nor impaired, net of
allowance) through an internal rating system. Segregation of credit quality is as follows (Unit: Korean Won
in millions):
Korean
treasury and
government
agencies
16,058,288 20,242,260
-
16,058,305 20,242,260
358,456
Banks
17
-
December 31, 2016
Corporates
General
business
41,461,420
7,941,871
49,403,291
18,003,674
Small and
medium sized
enterprise
18,755,963
12,550,282
31,306,245
25,493,006
Sub-total
Project
financing
and others
5,337,033 65,554,416 128,374,017 230,228,981
25,936,748
1,763,658 22,255,811
7,100,691 87,810,227 132,054,937 256,165,729
3,996,162 47,492,842 111,054,910 158,906,208
Consumers
3,680,920
Total
December 31, 2015
Corporates
Korean
treasury and
government
agencies
12,062,603 19,044,317 41,511,690 16,597,807 5,275,015 63,384,512 114,559,012 209,050,444
1,044 11,434,413 14,817,366 2,271,579 28,523,358 4,187,183 32,711,585
12,062,603 19,045,361 52,946,103 31,415,173 7,546,594 91,907,870 118,746,195 241,762,029
11,391 413,893 18,096,065 24,412,038 4,220,936 46,729,039 98,376,621 145,530,944
Small &
medium sized
enterprise
Project
financing
and others
General
business
Consumers
Sub-total
Banks
Total
-
Upper grade (*1)
Lower grade (*2)
Total
Value of collateral
Upper grade (*1)
Lower grade (*2)
Total
Value of collateral
(*1) AAA~BBB for Corporates, and 1~6 level for Consumers
(*2) BBB- ~C for Corporates, and 7~10 level for Consumers
Allowances for credit losses, for loans and receivables neither overdue nor impaired, amounting to 828,944
million Won and 821,588 million Won as of December 31, 2016 and 2015, respectively, which are deducted
from the loans and receivables above.
Woori Bank
Annual Report 2016
134
- 33 -
b) Aging analysis of loans and receivables
Aging analysis of loans and receivables (overdue but not impaired, net of allowance) is as follows (Unit:
Korean Won in millions):
Korean
treasury and
government
agencies
December 31, 2016
Corporates
Banks
General
business
Small &
medium sized
enterprise
-
-
-
-
-
-
-
-
-
-
45,255
1,553
337
47,145
7,021
41,329
8,933
2,123
52,385
45,304
Project
financing
and others Sub-total
86,584
-
10,486
-
2,460
-
99,530
-
Consumers
584,995
90,296
49,151
724,442
Total
671,579
100,782
51,611
823,972
-
52,325
546,164
598,489
Past due
Less than 30 days
30~59 days
60~89 days
Total
Value of
collateral (*)
Korean
treasury and
government
agencies
-
-
-
-
-
Past due
Less than 30 days
30~59 days
60~89 days
Total
Value of
collateral (*)
December 31, 2015
Corporates
General
business
Small &
medium sized
enterprise
Project
financing
and others Sub-total
Banks
92
120
222
434
52,157
3,902
9,537
65,596
58,854
16,584
4,969
80,407
111,011
20,486
14,506
146,003
Total
Consumers
827,348
716,245
119,495
98,889
54,058
39,330
854,464 1,000,901
-
4,340
63,749
68,089
644,073
712,162
-
-
-
-
-
(*) The value of collateral held is the recoverable amount used when calculating allowance for credit losses.
Allowances for credit losses, for loans and receivables that are overdue but not impaired, amounting to
47,396 million Won and 58,270 million Won as of December 31, 2016 and 2015, respectively, which
are deducted from the loans and receivables above.
c) Impaired loans and receivables
Impaired loans and receivables, net of allowance are as follows (Unit: Korean Won in millions):
Korean
treasury and
government
agencies
-
-
Korean
treasury and
government
agencies
-
-
Impaired loans
Value of
collateral (*)
Impaired loans
Value of
collateral (*)
December 31, 2016
Corporates
General
business
661,778
Small
&medium sized
enterprise
225,045
Project
financing
and others
188,986
Sub-total
1,075,809
Consumers
327,123
Total
1,402,932
482,680
236,954
42,166
761,800
250,583
1,012,383
Banks
-
-
December 31, 2015
Corporates
Banks
General
business
Small
&medium sized
enterprise
2,331
949,991
250,948
Project
financing
and others
510,211
Sub-total
1,711,150
Consumers
Total
365,651 2,079,132
-
840,461
285,873
174,918
1,301,252
294,725 1,595,977
(*) The value of collateral held is recoverable amount used when calculating allowance for credit losses.
Allowances for credit losses, for impaired loans and receivables amounting to 1,150,756 million Won and
1,598,199 million Won as of December 31, 2016 and 2015, respectively, are deducted from the impaired
loans and receivables above.
- 34 -
Woori Bank
Annual Report 2016
135
4) Credit quality of debt securities
The Group manages debt securities based on the external credit rating. Credit soundness of debt securities on
the basis of External Credit Assessment Institution (―ECAI‖)‘s rating is as follows (Unit: Korean Won in
millions):
December 31, 2016
Financial assets
at FVTPL (*)
AFS debt
securities
1,658,332
720,535
266,049
4,348
2,649,264
12,490,934
3,372,310
618,736
59,908
16,541,888
HTM securities
13,342,384
466,401
101,466
-
13,910,251
Total
27,491,650
4,559,246
986,251
64,256
33,101,403
December 31, 2015
Financial assets
at FVTPL (*)
AFS debt
securities
1,670,647
651,103
295,656
986
2,618,392
11,802,897
2,238,670
656,238
25,772
14,723,577
HTM securities
Total
13,158,286
380,541
82,813
-
13,621,640
26,631,830
3,270,314
1,034,707
26,758
30,963,609
AAA
AA- ~ AA+
BBB- ~ A+
Below BBB-
Total
AAA
AA- ~ AA+
BBB- ~ A+
Below BBB-
Total
(*)Financial assets at FVTPL comprise debt securities held for trading and financial assets designated at FVTPL.
Woori Bank
Annual Report 2016
136
- 35 -
(2) Market risk
Market risk is the possible risk of loss arising from trading activities and non-trading activities in the volatility of
market factors such as interest rates, stock prices and foreign exchange rates. Market risk occurs as a result of
changes in the interest rates and foreign exchange rates for financial instruments that are not yet settled, and all
contracts are exposed to a certain level of volatility according to changes in the interest rates, credit spreads,
foreign exchange rates and the price of equity securities.
1) Market risk management
For trading activities and non-trading activities, the Group avoids, bears, or mitigates risks by identifying
the underlying source of the risks, measuring parameters and evaluating their appropriateness.
On a yearly basis, the Risk Management Committee establishes a Value at Risk (―VaR‖, maximum losses)
limit, loss limit and risk capital limit by subsidiaries for its management purposes. The limit by investment
desk/dealer is independently managed to the extent of the limit given to subsidiaries and the limit by
investment and loss cut is managed by the risk management personnel with department.
The Group uses both a standard-based and an internal model-based approach to measure market risk. The
standard-based approach is used to calculate individual market risk of owned capital while the internal
model-based approach is used to calculate general capital market risk and it is used to measure internal risk
management measure. For the trading activities, the Risk Management department measures the VaR limit
by each department, risk factor and loss limit on a daily basis and reports regularly to the Risk Management
Committee.
2) Sensitivity analysis of market risk
The Group performs the sensitivity analyses both for trading and for non-trading activities.
For trading activities, the Group uses a VaR model that uses certain assumptions of possible fluctuations in
market condition and, by conducting simulations of gains and losses, under which the model estimates the
maximum losses that may occur. A VaR model predicts based on statistics of possible losses on the
portfolio at a certain period currently or in the future. It indicates the maximum expected loss with at least
99% credibility. In short, there exists a one percent possibility that the actual loss might exceed the
predicted loss generated from the VaR calculation. The actual results are periodically monitored to examine
the validity of the assumptions, variables, and factors that are used in VaR calculations. However, this
approach cannot prevent the loss when the market fluctuation exceeds expectation.
For the non-trading activities, interest rate Earning at Risk (―EaR‖) and interest rate VaR, which is based on
the simulations of the Net Interest Income (―NII‖) and Net Present Value (―NPV‖), are calculated for the
Bank, and the risks for all other subsidiaries are measured and managed by the interest rate EaR and the
interest rate VaR calculations based on the Bank for International Settlements (―BIS‖) Framework.
NII is a profit-based indicator for displaying the profit changes in short term due to the short-term interest
changes. It will be estimated as subtracting interest expenses of liabilities from the interest income of assets.
NPV is an indicator for displaying risks in economic view according to unfavorable changes related to
interest rate. It will be estimated as subtracting the present value of liabilities from the present value of
assets.
EaR shows the maximum profit-loss amount, which indicates the maximum deduction amount caused by
the unfavorable changes related to the interest rate of a certain period (i.e. 1 year). Interest rate VaR shows
the potential maximum loss generated by the unfavorable changes during a certain period of time in the
present or future.
- 36 -
Woori Bank
Annual Report 2016
137
a) Trading activities
The minimum, maximum and average Value at Risk (―VaR‖) for the year ended December 31, 2016 and
2015, respectively, and the VaR as of December 31, 2016 and 2015, respectively, are as follows (Unit:
Korean Won in millions):
Risk factor
Interest rate
Stock price
Foreign currencies
Commodity price
Diversification
Total VaR(*)
As of
December
31, 2016
3,250
4,191
4,396
152
(5,630)
6,359
For the year ended
December 31, 2016
Average Maximum Minimum
1,367
6,430
2,304
5,063
3,967
7,686
21
325
(4,034)
(10,385)
3,625
9,119
2,844
3,456
4,914
113
(5,355)
5,972
As of
December
31, 2015
2,907
3,186
3,997
117
(5,017)
5,190
(*) VaR= Value at Risk
b) Non-trading activities
For the year ended
December 31, 2015
Average Maximum Minimum
1,211
531
2,329
5
(411)
3,665
2,742
2,411
3,415
102
(3,858)
4,812
3,991
4,377
4,847
218
(6,910)
6,523
The NII and NPV are calculated for the assets and liabilities owned by the Bank and consolidated trusts,
respectively, by using the simulation method. The scenario responding to interest rate (―IR‖) changes are as
follows (Unit: Korean Won in millions):
Name of scenario
Base case
Base case (Prepay)
IR 100bp up
IR 100bp down
IR 200bp up
IR 200bp down
IR 300bp up
IR 300bp down
(*1) Net Interest Income
(*2) Net Portfolio Value
December 31, 2016
December 31, 2015
NII (*1)
NPV (*2)
NII (*1)
NPV (*2)
4,367,411
4,384,783
4,802,118
3,903,129
5,236,879
2,975,351
5,671,639
1,968,273
21,556,632
20,666,425
20,893,490
22,279,204
20,289,742
23,052,848
19,742,627
25,096,193
4,248,972
4,243,033
4,628,056
3,863,665
5,007,090
3,137,452
5,386,122
2,123,516
22,441,148
21,418,343
21,747,451
23,192,051
21,107,510
23,998,930
20,517,630
25,345,104
The interest EaR and VaR are calculated based on the BIS Framework of other subsidiaries other than the
Bank and consolidated trusts are as follows (Unit: Korean Won in millions):
December 31, 2016
EaR
188,381
VaR
110,335
December 31, 2015
EaR
153,717
VaR
80,086
The Group estimates and manages risks related to changes in interest rate due to the difference in the
maturities of interest-bearing assets and liabilities and discrepancies in the terms of interest rates. Cash
flows of principal amounts and interests from interest bearing assets and liabilities by re-pricing date are as
follows (Unit: Korean Won in millions):
Within 3
months
4 to 6
months
7 to 9
months
December 31, 2016
10 to 12
months
1 to 5
years
Over 5 years
Total
Asset:
Loans and receivables
AFS financial assets
HTM financial assets
Total
148,237,350
3,165,094
2,770,079
154,172,523
42,032,667
2,946,992
1,515,213
46,494,872
8,064,502
2,854,514
1,246,503
12,165,519
7,757,087
2,915,226
1,143,170
11,815,483
55,838,192
5,029,918
6,853,951
67,722,061
35,245,734 297,175,532
17,625,340
14,420,946
36,851,360 329,221,818
713,596
892,030
Liability:
Deposits due to
customers
Borrowings
Debentures
Total
100,051,821
13,772,710
2,109,235
115,933,766
36,614,529
1,044,748
2,077,681
39,736,958
25,028,378
491,330
860,455
26,380,163
25,017,836
368,431
1,545,943
26,932,210
34,513,004
2,816,565
14,613,799
51,943,368
40,737
421,677
4,143,773
4,606,187
221,266,305
18,915,461
25,350,886
265,532,652
Woori Bank
Annual Report 2016
138
- 37 -
Within 3
months
4 to 6
months
7 to 9
months
December 31, 2015
10 to 12
months
1 to 5
years
Over 5 years
Total
Asset:
Loans and receivables
AFS financial assets
HTM financial assets
Total
140,191,350
1,346,353
1,980,893
143,518,596
41,178,643
2,176,565
1,652,225
45,007,433
8,201,386
2,821,168
1,191,175
12,213,729
8,043,459
2,031,687
1,611,999
11,687,145
50,083,399
6,480,914
6,957,745
63,522,058
30,613,803
702,884
922,081
32,238,768
278,312,040
15,559,571
14,316,118
308,187,729
Liability:
Deposits due to
customers
Borrowings
Debentures
Total
96,907,809
13,631,363
3,056,172
113,595,344
31,975,594
1,601,846
1,142,939
34,720,379
21,386,037
900,149
747,728
23,033,914
28,539,885
498,146
2,028,080
31,066,111
30,592,054
3,088,516
12,197,477
45,878,047
26,732
499,110
4,584,085
5,109,927
209,428,111
20,219,130
23,756,481
253,403,722
- 38 -
Woori Bank
Annual Report 2016
139
3) Currency risk
Currency risk arises from monetary financial instruments denominated in foreign currencies other than the
functional currency. Therefore, no currency risk arises from non-monetary items or financial instruments
denominated in the functional currency.
Financial instruments in foreign currencies exposed to currency risk are as follows (Unit: USD in millions,
JPY in millions, CNY in millions, EUR in millions, and Korean Won in millions):
USD
JPY
December 31, 2016
CNY
EUR
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Others
Won
equivalent
Total
Won
equivalent
22,868
66
27,635,970
79,386
108,944
57
1,129,539
589
23,194
-
4,018,678
-
898
17
23,849
1,085,108
20,517
28,820,981
-
-
109,001
-
-
1,130,128
80
-
23,274
13,844
-
4,032,522
1,548
30
-
-
1,578
1,962,856
37,562
4,382,990
34,124
39,130,033
151,661
570
-
2,000,988
144,799
143,535
4,705,448
1,244,321
164,052
40,690,067
USD
JPY
December 31, 2016
CNY
EUR
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Others
Won
equivalent
Total
Won
equivalent
75
90,908
253
2,621
-
-
88
111,098
115,980
320,607
11,294
7,193
2,931
2,235
23,728
8,593
13,648,729
8,692,792
3,541,769
2,700,703
28,674,901
10,384,163
124,790
3,243
-
12,390
140,676
28,675
1,293,835
33,625
-
128,464
1,458,545
297,304
18,950
-
700
1,508
21,158
1,061
3,283,291
-
121,282
261,278
3,665,851
183,883
651
222
-
825,165
280,894
-
2,402,076
115,332
228,720
21,453,096
9,122,643
3,891,771
245
1,206
374
310,396
1,527,553
473,845
846,990
3,709,098
312,187
4,247,831
39,035,948
11,651,382
USD
JPY
December 31, 2015
CNY
EUR
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Others
Won
equivalent
Total
Won
equivalent
25,178
29,509,364
112,138
1,089,991
16,177
2,887,324
1,141
1,460,773
3,163,999
38,111,451
143
483
13
25,817
167,270
565,872
15,288
30,257,794
113
-
-
112,251
1,096
-
-
1,091,087
-
211
-
16,388
-
37,671
-
2,924,995
1
-
-
1,142
987
622
-
1,462,382
428
80,273
80,553
3,325,253
169,781
684,438
95,841
39,061,511
USD
JPY
December 31, 2015
CNY
EUR
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Others
Won
equivalent
Total
Won
equivalent
149
174,554
499
4,853
-
-
11,701
8,757
3,054
2,150
25,811
9,914
13,713,829
10,262,750
3,578,711
114,940
17,834
5,680
1,117,225
173,350
55,209
2,519,715
30,249,559
11,619,118
3,176
142,129
26,451
30,867
1,381,504
257,103
15,174
276
900
2,850
19,200
797
2,708,309
49,231
160,632
508,596
3,426,768
142,208
33
301
441
33
69
877
528
42,299
98,312
320,018
385,077
565,235
42,257
1,204,774
19,129,214
111,447 11,162,013
4,339,875
503,066
88,658
1,123,526
676,588
706,388
3,854,224
2,623,987 38,805,344
13,199,109
504,092
Asset:
Loans and receivables
Financial assets at
FVTPL
AFS financial assets
HTM financial assets
Total
Liability:
Financial liabilities at
FVTPL
Deposits due to
customer
Borrowings
Debentures
Other financial
liabilities
Total
Off-balance accounts
Asset:
Loans and receivables
Financial assets at
FVTPL
AFS financial assets
HTM financial assets
Total
Liability:
Financial liabilities at
FVTPL
Deposits due to
customer
Borrowings
Debentures
Other financial
liabilities
Total
Off-balance accounts
Woori Bank
Annual Report 2016
140
- 39 -
(3) Liquidity risk
Liquidity risk refers to the risk that the Group may encounter difficulties in meeting obligations from its
financial liabilities.
1) Liquidity risk management
Liquidity risk management is to prevent potential cash shortages as a result of mismatching the use of funds
(assets) and sources of funds (liabilities) or unexpected cash outflows. The financial liabilities that are
relevant to liquidity risk are incorporated within the scope of risk management. Derivatives instruments are
excluded from those financial liabilities as they reflect expected cash flows for a pre-determined period.
Assets and liabilities are grouped by account under Asset Liability Management (―ALM‖) in accordance
with the characteristics of the account. The Group manages liquidity risk by identifying maturity gap, and
then gap ratio through performing various cash flows analysis (i.e. based on remaining maturity and
contract period, etc.), while maintaining the gap ratio at or below the target limit.
2) Maturity analysis of non-derivative financial liabilities
a) Cash flows of principals and interests by remaining contractual maturities of non-derivative financial
liabilities are as follows (Unit: Korean Won in millions):
Within 3
months
4 to 6
months
December 31, 2016
10 to 12
months
7 to 9
months
1 to 5
years
Over 5
years
Total
Financial liabilities at
FVTPL
Deposits due to customers
Borrowings
Debentures
Other financial liabilities
Total
678,813
136,835,315
9,146,895
2,108,780
14,813,948
163,583,751
1,529
28,685,473
2,355,336
2,077,387
27,544
33,147,269
94
19,254,108
876,836
860,596
5,480
20,997,114
47
30,875,962
1,486,710
1,518,524
1,433
33,882,676
154,325
6,284,092
4,711,273
14,641,016
84,792
25,875,498
-
834,808
2,732,019 224,666,969
18,997,770
25,323,071
17,685,022
10,021,332 287,507,640
420,720
4,116,768
2,751,825
Within 3
months
4 to 6
months
December 31, 2015
10 to 12
months
7 to 9
months
1 to 5
years
Over 5
years
Total
Financial liabilities at
FVTPL
Deposits due to customers
Borrowings
Debentures
Other financial liabilities
Total
730,495
123,618,943
8,678,642
3,055,973
8,448,045
144,532,098
408
25,623,490
2,504,599
1,143,005
25,530
29,297,032
54
17,391,363
2,126,241
747,870
4,504
20,270,032
11,850
35,942,949
1,155,179
2,027,915
2,429
39,140,322
161,537
7,623,477
5,311,041
12,197,268
84,660
25,377,983
-
904,344
2,716,859 212,917,081
20,275,424
23,756,033
11,154,745
10,390,160 269,007,627
499,722
4,584,002
2,589,577
- 40 -
Woori Bank
Annual Report 2016
141
b) Cash flows of principals and interests by expected maturities of non-derivative financial liabilities are as
follows (Unit: Korean Won in millions):
Financial liabilities at
FVTPL
Deposits due to customers
Borrowings
Debentures
Other financial liabilities
Total
Financial liabilities at
FVTPL
Deposits due to customers
Borrowings
Debentures
Other financial liabilities
Total
Within 3
months
4 to 6
months
December 31, 2016
10 to 12
months
7 to 9
months
1 to 5
years
678,813
148,089,355
9,146,901
2,108,780
14,813,948
174,837,797
1,529
30,163,971
2,355,332
2,077,387
27,544
34,625,763
94
17,600,803
876,835
860,596
5,480
19,343,808
47
20,947,335
1,486,710
1,518,524
1,433
23,954,049
154,325
5,128,387
4,711,273
14,641,016
84,792
24,719,793
Over 5
years
-
2,331,993
420,719
4,116,768
2,751,825
9,621,305
Total
834,808
224,261,844
18,997,770
25,323,071
17,685,022
287,102,515
Within 3
months
4 to 6
months
December 31, 2015
10 to 12
months
7 to 9
months
1 to 5
years
Over 5
years
Total
730,495
129,716,295
8,678,664
3,055,973
8,454,338
150,635,765
408
27,884,256
2,504,588
1,143,005
25,530
31,557,787
54
16,876,865
2,126,234
747,870
4,504
19,755,527
11,850
28,164,198
1,155,176
2,027,915
2,429
31,361,568
161,537
6,506,300
5,311,041
12,197,268
84,660
24,260,806
-
3,384,994
499,722
4,584,002
2,589,577
11,058,295
904,344
212,532,908
20,275,425
23,756,033
11,161,038
268,629,748
3) Maturity analysis of derivative financial liabilities is as follows (Unit: Korean Won in millions):
Derivatives held for trading purpose are not managed in accordance with their contractual maturity, but the
Group holds such financial instruments with the purpose of disposing or redemption before their maturity. As
such, those derivatives are incorporated as ―within 3 months‖ in the table below. The cash flow from
derivatives held for hedge purpose is estimated at the amount after the offset of the cash inflow and outflow.
The cash flow by the maturity of derivative financial liabilities as of December 31, 2016 and 2015 as follow:
December 31, 2016
December 31, 2015
Within 3
months
3,009,977
2,580,827
4 to 6
months
7 to 9
months
10 to 12
months
1 to 5
years
Over 5
years
-
-
-
-
208
-
7,013
-
Total
3,017,198
2,580,827
-
-
4) Maturity analysis of off-balance accounts
The Group provides guarantees on behalf of customers. A financial guarantee represents an irrevocable
undertaking that the Group should meet a customer‘s obligations to third parties if the customer fails to do so.
Under a loan commitment, the Group agrees to make funds available to a customer in the future. Loan
commitments that are usually for a specified term may be unconditionally cancellable or may persist,
provided all conditions in the loan facility are satisfied or waived. Commitments to lend include commercial
standby facilities and credit lines, liquidity facilities to commercial paper conduits and utilized overdraft
facilities. The maximum limit to be paid by the Group in accordance with guarantees and loan commitment
only applies to principal amounts. There are contractual maturities for financial guarantees, such as
guarantees for debentures issued or loans, loan commitments, and other guarantees, however, under the terms
of the guarantees and loan commitments, funds should be paid upon demand from the counterparty. Details
of off-balance accounts are as follows (Unit: Korean Won in millions):
Guarantees
Loan commitments
December 31, 2016
December 31, 2015
14,761,784
83,795,496
17,315,443
88,211,580
Woori Bank
Annual Report 2016
142
- 41 -
(4) Operational risk
The Group defines the operational risk that could cause a negative effect on capital resulting from inadequate
internal process, labor work and systematic problem or external factors.
1) Operational risk management
The Group has been running the operational risk management system under Basel II. The Group developed
advanced measurement approached to quantify required capital for operational risk. This system is used for
reinforcement in foreign competitions, reducing the amount of risk capitals, managing the risk, and
precaution for any unexpected occasions. This system has been tested by the independent third party, and
this system approved by the Financial Supervisory Service.
2) Operational risk measurement
To quantify required capital for operational risk, the Group applies Advanced Measurement Approaches
(AMA) using of internal and external loss data, business environment and internal control factors (BEICFs),
and scenario analysis (SBA). For the operational risk management for its subsidiaries, the Group adopted
the Basic Indicator Approach.
(5) Capital management
The Group complies with the standard of capital adequacy provided by financial regulatory authorities. The
capital adequacy ratio is based on Basel III of Basel Committee on Banking Supervision and Basel III was
applied from the end of December, 2013. The capital adequacy ratio is calculated by dividing own capital by
asset (weighted with a risk premium – risk weighted assets) based on the consolidated financial statements of the
Group.
According to this regulation, the Group is required to meet the following new minimum requirements: 5.38%
and 4.5% Common Equity Tier 1 capital ratio, 6.88% and 6.00% Tier 1 capital ratio, and 8.88% and 8.00% total
capital ratio as of December 31, 2016 and December 31, 2015, respectively. When the Group excludes the five
subsidiaries (Woori Card Co., Ltd., Woori Investment Bank Co., Ltd., Woori FIS Co., Ltd., Woori Private
Equity Asset Management Co., Ltd. and Woori Finance Research Institute Co., Ltd.), from the calculation of the
capital adequacy ratios, then the common share capital ratio 11.38%, the basic capital ratio 13.76%, and the total
capital ratio 16.59%, as of December 31, 2016.The details are as following (Unit: Korean won in millions):
Tier 1 capital
Other Tier 1 capital
Tier 2 capital
Total risk-adjusted capital
Risk-weighted assets for credit risk
Risk-weighted assets for market risk
Risk-weighted assets for operational risk
Total risk-weighted assets
Common Equity Tier 1 ratio
Tier 1 capital ratio
Total capital ratio
December 31, 2016
December 31, 2015
15,714,480
3,275,496
3,910,513
22,900,489
138,018,500
2,277,809
9,431,814
149,728,123
10.50%
12.68%
15.29%
13,047,567
3,016,309
4,987,529
21,051,405
142,127,112
2,595,566
9,348,221
154,070,899
8.47%
10.43%
13.66%
- 42 -
Woori Bank
Annual Report 2016
143
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, credit card and headquarters and others. The reportable segments are
classified based on the target customers for whom the service is being provided.
• 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.
• Credit Card: Credit card, cash service and card loan, 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):
Consumer
banking
105,931,025
62,294,922
Corporate
banking
104,937,198
162,937,921
Investment
banking
6,337,634
55,785
Capital
market
8,111,230
7,287,850
Credit Card
7,606,108
6,180,893
Headquarter
and Others
82,840,235
51,137,220
Sub-total
315,763,430
289,894,591
Assets
Liabilities
December 31, 2016
Inter-segment
transaction
(5,080,703) 310,682,727
290,136,774
242,183
Total
Consumer
banking
95,612,964
46,049,309
Corporate
banking
107,313,193
170,127,944
Investment
banking
6,646,754
41,772
Capital
market
7,903,460
6,410,552
Credit Card
6,604,059
5,295,225
Headquarter
and Others
73,713,629 297,794,059
42,578,200 270,503,002
Sub-total
Inter-segment
transaction
Total
(5,934,987) 291,859,072
2,046,155 272,549,157
Assets
Liabilities
December 31, 2015
2) The details of operating income by each segment are as follows (Unit: Korean Won in millions):
For the year ended December 31, 2016
Consumer
banking
1,484,233
2,979,811
(1,023,290)
(472,288)
557,410
923,810
(405,912)
39,512
(1,875,579)
(1,788,672)
Corporate
banking
1,741,140
3,026,148
(1,780,990)
495,982
550,194
535,514
(32,873)
47,553
(1,476,190)
(966,878)
Investment
banking
14,613
153,160
(225)
(138,322)
160,885
605,026
(444,141)
-
(110,863)
(14,983)
Capital
market
48,826
19,575
(324)
29,575
4,033
7,590,087
(7,586,054)
-
(51,995)
(17,964)
Credit Card
428,095
556,681
(128,586)
-
79,713
986,147
(906,434)
-
(364,137)
(148,001)
Headquarter
and Others
713,678
1,492,148
(863,523)
85,053
302,800
4,563,280
(4,173,415)
(87,065)
(574,606)
(793,978)
(86,907)
166,064
(35,081)
130,983
(31,698)
99,285
(509,312)
815,144
(1,619)
813,525
(203,983)
609,542
(95,880)
64,635
46,559
111,194
(26,909)
84,285
(34,031)
864
(5,288)
(216,136)
143,671
(1,504)
(4,424)
1,071
(3,353)
142,167
(32,774)
109,393
219,372
441,872
55,291
497,163
16,475
513,638
Inter-
segment
transaction
588,959
284,789
304,170
-
(955,696)
(433,880)
(521,816)
-
308,693
252,001
Total
5,019,544
8,512,312
(3,492,768)
-
699,339
14,769,984
(14,070,645)
-
(4,144,677)
(3,478,475)
56,692
(58,044)
(79,175)
(666,202)
1,574,206
(20,817)
(137,219)
1,962
(135,257)
1,553,389
(275,856)
1,277,533
Sub-total
4,430,585
8,227,523
(3,796,938)
-
1,655,035
15,203,864
(13,548,829)
-
(4,453,370)
(3,730,476)
(722,894)
1,632,250
58,358
1,690,608
(277,818)
1,412,790
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
Woori Bank
Annual Report 2016
144
- 43 -
For the year ended December 31, 2015
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
Consumer
banking
1,289,088
2,850,985
(1,227,921)
(333,976)
554,957
886,057
(353,032)
21,932
(1,790,292)
(1,782,234)
Corporate
banking
1,699,913
3,255,796
(1,880,195)
324,312
513,686
503,321
(25,993)
36,358
(1,795,561)
(925,566)
Investment
banking
5,601
154,460
(18)
(148,841)
115,111
489,659
(374,548)
-
53,089
(14,933)
(8,058)
53,753
(19,113)
34,640
(8,383)
26,257
(869,995)
418,038
(2,189)
68,022
173,801
43,728
415,849
(98,886)
316,963
217,529
(52,642)
164,887
Capital
market
40,913
19,394
(81)
21,600
18,015
5,760,567
(5,742,552)
-
(44,187)
(16,945)
(27,242)
14,741
197
14,938
(3,615)
11,323
Credit Card
378,019
500,449
(122,430)
-
98,034
871,486
(773,452)
-
(321,265)
(124,362)
Headquarter
and Others
743,092
1,585,636
(979,449)
136,905
279,437
3,245,543
(2,907,816)
(58,290)
(470,592)
(553,539)
(196,903)
154,788
(5,150)
82,947
551,937
136,954
149,638
(32,780)
116,858
688,891
(136,891)
552,000
Sub-total
4,156,626
8,366,720
(4,210,094)
-
1,579,240
11,756,633
(10,177,393)
-
(4,368,808)
(3,417,579)
(951,229)
1,367,058
154,427
1,521,485
(333,197)
1,188,288
Inter-
segment
transaction
605,274
331,515
273,759
-
(947,937)
(366,953)
(580,984)
-
327,191
267,190
Total
4,761,900
8,698,235
(3,936,335)
-
631,303
11,389,680
(10,758,377)
-
(4,041,617)
(3,150,389)
60,001
(15,472)
(54,067)
(891,228)
1,351,586
100,360
(69,539)
(43,357)
(112,896)
1,451,946
(376,554)
1,075,392
(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.
(3)
Information on geographical areas
Among the Group‘s revenue (interest income and non-interest income) from services, revenue from the domestic
customers for the years ended December 31, 2016 and 2015 amounted to 22,265,508 million Won and
18,974,359 million Won, respectively, and revenue from the foreign customers amounted to 1,016,788 million
Won and 1,113,556 million Won, respectively. Among 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, 2016 and 2015 are 3,498,327 million Won and 3,666,276
million Won, respectively, and foreign subsidiaries are 240,946 million Won and 220,093 million Won,
respectively.
- 44 -
Woori Bank
Annual Report 2016
145
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, 2016
2,113,739
742,340
4,238,956
496,289
7,591,324
December 31, 2015
2,091,064
656,183
3,286,747
610,061
6,644,055
(2) Material transactions not involving cash inflows and outflows are as follows (Unit: Korean Won in
millions):
Changes in other comprehensive income due to valuation
of AFS financial assets
Changes in other comprehensive income (loss)
of investment in associates
Changes in other comprehensive income
of foreign operations translation
Changes in other comprehensive income related to
valuation of cash flow hedging
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 investments in associates
due to accounts transfer
Changes in unpaid dividends of hybrid equity securities
Changes in payables due to intangible assets
For the years ended December 31
2016
2015
12,586
(7,937)
28,712
10,371
34,162
-
(156,708)
5,187
-
72,297
3,295
33,837
-
(78,267)
83,002
-
3,562
125,446
Woori Bank
Annual Report 2016
146
- 45 -
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, 2016
5,633,724
17,000
5,650,724
December 31, 2015
5,120,062
12,595
5,132,657
(2) Financial assets held for trading are as follows (Unit: Korean Won in millions):
Deposits:
Gold banking assets
Securities:
Debt securities
Korean treasury and government agencies
Financial institutions
Corporates
Equity securities
Beneficiary certificates
Securities loaned
Derivatives assets
Sub-total
Total
December 31, 2016
December 31, 2015
26,180
24,884
519,337
1,444,459
681,120
35,983
23,891
4,459
2,709,249
2,898,295
5,633,724
798,397
1,175,303
643,706
62,945
14,017
10,313
2,704,681
2,390,497
5,120,062
(3) Financial assets designated at FVTPL as follows (Unit: Korean Won in millions):
Debt securities
Equity securities
Total
December 31, 2016
4,348
12,652
17,000
December 31, 2015
986
11,609
12,595
- 46 -
Woori Bank
Annual Report 2016
147
8. AVAILABLE FOR SALE FINANCIAL ASSETS
Details of AFS financial assets are as follows (Unit: Korean Won in millions):
Debt securities:
Korean treasury and government agencies
Financial institutions
Corporates
Asset-backed securities
Bond denominated in foreign currencies
Other debt securities
Sub-total
Equity securities
Beneficiary certificates
Securities loaned
Total
Debt securities:
Korean treasury and government agencies
Financial institutions
Corporates
Asset-backed securities
Bond denominated in foreign currencies
Other debt securities
Sub-total
Equity securities
Beneficiary certificates
Securities loaned
Others
Total
Amortized
cost
As of December 31, 2016
Unrealized
Unrealized
losses
gains
3,778,688
6,310,517
4,336,195
250,630
1,226,893
73,360
15,976,283
1,034,299
2,802,847
493,625
20,307,054
13,700
7,585
93,957
-
1,076
1,871
118,189
420,038
40,405
3,040
581,672
(3,758)
(3,904)
(20,966)
(1,427)
(16,105)
(3)
(46,163)
(724)
(21,170)
(3,086)
(71,143)
Amortized
cost
As of December 31, 2015
Unrealized
Unrealized
losses
gains
3,529,997
5,598,416
3,809,370
260,198
649,983
12,323
13,860,287
967,911
1,119,497
717,525
4,665
16,669,885
28,880
27,473
79,303
-
790
8,044
144,490
376,079
23,148
2,488
643
546,848
(88)
(64)
(692)
(1,541)
(12,853)
-
(15,238)
(6,283)
(24,617)
(3)
-
(46,141)
Fair value
3,788,630
6,314,198
4,409,186
249,203
1,211,864
75,228
16,048,309
1,453,613
2,822,082
493,579
20,817,583
Fair value
3,558,789
5,625,825
3,887,981
258,657
637,920
20,367
13,989,539
1,337,707
1,118,028
720,010
5,308
17,170,592
Woori Bank
Annual Report 2016
148
- 47 -
9. HELD TO MATURITY FINANCIAL ASSETS
Details of HTM financial assets are as follows (Unit: Korean Won in millions):
Amortized
cost
3,754,356
5,168,487
4,823,356
164,052
13,910,251
Amortized
cost
3,366,942
4,138,250
6,020,607
95,841
13,621,640
As of December 31, 2016
Unrealized
Unrealized
losses
gains
26,366
9,236
58,176
-
93,778
(6,391)
(4,940)
(7,093)
(428)
(18,852)
As of December 31, 2015
Unrealized
Unrealized
losses
gains
63,895
26,417
106,541
-
196,853
(131)
(153)
(4,460)
-
(4,744)
Fair value
3,774,331
5,172,783
4,874,439
163,624
13,985,177
Fair value
3,430,706
4,164,514
6,122,688
95,841
13,813,749
Korean treasury and government agencies
Financial institutions
Corporates
Bond denominated in foreign currencies
Total
Korean treasury and government agencies
Financial institutions
Corporates
Bond denominated in foreign currencies
Total
10. LOANS AND RECEIVABLES
(1) Details of loans and receivables are as follows (Unit: Korean Won in millions):
Due from banks
Loans
Other loan and receivables
Total
December 31, 2016 December 31, 2015
11,174,806
225,547,768
8,119,488
244,842,062
14,815,476
235,400,585
8,176,572
258,392,633
(2) Details of due from banks are as follows (Unit: Korean Won in millions):
December 31, 2016 December 31, 2015
Due from banks in local currency:
Due from the Bank of Korea (―BOK‖)
Due from the depository banks
Due from non-monetary financial
institutions
Due from the Korea Exchange
Others
Allowance for credit losses
Sub-total
Due from banks in foreign currencies:
Due from banks on demand
Time deposits
Others
Allowance for credit losses
Sub-total
Total
11,395,162
3
9,811
1,625
73,283
(2,798)
11,477,086
877,636
1,684,631
778,418
(2,295)
3,338,390
14,815,476
6,885,516
300,500
12,197
1,868
34,525
(2,063)
7,232,543
1,945,918
1,178,081
822,888
(4,624)
3,942,263
11,174,806
- 48 -
Woori Bank
Annual Report 2016
149
(3) Details of restricted due from banks are as follows (Unit: Korean Won in millions):
Financial institution
Counterparty
Due from banks in local currency:
Due from The Bank of Korea
The Bank of Korea
Others
the Korea Exchange and
others
Due from banks in foreign currencies:
Due from banks on demand
The Bank of Korea and others
Others
The People‘s Bank of China
and others
Financial institution
Counterparty
December 31,
2016
Reason of restriction
11,395,162 Reserve deposits under The
BOK Act
Central counter party KRW
margin and others
70,304
11,465,466
854,612
Reserve deposits under The
BOK Act and others
778,418 Deposit reserves and others
1,633,030
13,098,496
December 31,
2015
Reason of restriction
Due from banks in local currency:
Due from The Bank of Korea
Others
The Bank of Korea
6,885,516 Reverse deposits on The BOK
Samsung Securities Co., Ltd.
and others
Act
Reserve deposits of the futures
and options and others
34,525
6,920,041
Due from banks in foreign currencies:
Due from banks on demand
The Bank of Korea and others
Reserve deposits on The BOK
Others
The People‘s Bank of China
and others
1,944,976
Act and others
811,168 Reserve deposits and others
2,756,144
9,676,185
(4) Details of 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
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, 2016
191,309,481
14,101,839
3,754,030
6,673,765
7,758,575
414,451
96,763
25,197
328,405
252,690
2,985,077
8,854,753
458,639
251,635
(13,827)
(1,850,888)
235,400,585
December 31, 2015
185,154,851
13,104,820
4,805,433
6,099,219
6,647,918
134,645
149,688
44,242
330,889
309,990
2,758,156
7,583,743
435,005
45,622
(4,985)
(2,051,468)
225,547,768
Woori Bank
Annual Report 2016
150
- 49 -
(5) Details of other loan and receivables are as follows (Unit: Korean Won in millions):
CMA accounts
Receivables
Accrued income
Telex and telephone subscription rights and
refundable deposits
Other receivables
Allowance for credit losses
Total
December 31, 2016
190,000
5,417,676
1,080,489
December 31, 2015
213,000
5,648,159
971,179
1,019,577
639,945
(171,115)
8,176,572
1,056,309
650,743
(419,902)
8,119,488
(6) Changes in allowance for credit losses on loans and receivables are as follows (Unit: Korean Won in
millions):
Beginning balance
Net provision
Recoveries of loans previously
charged off
Charge-offs
Sales of loans and receivables
Unwinding effect
Others
Ending balance
Beginning balance
Net provision
Recoveries of loans previously
charged off
Charge-offs
Sales of loans and receivables
Unwinding effect
Others
Ending balance
Consumers
(203,433)
(73,356)
For the year ended December 31, 2016
Others
Credit card
(442,620)
(73,318)
Corporates
(1,686,194)
(536,359)
(145,810)
(207,730)
(53,679)
155,424
2,055
10,319
(1,188)
(163,858)
(192,183)
722,359
113,177
66,901
13,457
(1,498,842)
(44,393)
242,561
-
-
-
(155,372)
(19,233)
236,857
91,800
-
(2,510)
(209,024)
Consumers
(326,435)
(103,166)
(29,219)
240,541
2,518
12,514
(186)
(203,433)
For the year ended December 31, 2015
Others
Credit card
(370,264)
(129,117)
(83,994)
(180,563)
Corporates
(2,128,090)
(744,416)
(198,089)
1,139,102
138,055
99,854
7,390
(1,686,194)
(34,207)
198,077
-
-
-
(145,810)
-
592
866
-
10,180
(442,620)
Total
(2,478,057)
(890,763)
(309,488)
1,357,201
207,032
77,220
9,759
(2,027,096)
Total
(2,953,906)
(1,112,139)
(261,515)
1,578,312
141,439
112,368
17,384
(2,478,057)
- 50 -
Woori Bank
Annual Report 2016
151
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, and debt securities issued by governmental bodies.
• 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 over-the-count (―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.
Woori Bank
Annual Report 2016
152
- 51 -
(2) Fair value hierarchy of financial assets and liabilities measured at fair value are as follows (Unit: Korean
Won in millions):
Level 1 (*1)
Level 2 (*1)
Level 3 (*2)
Total
December 31, 2016
Financial assets:
Financial assets held for trading
Deposits
Debt securities
Equity securities
Beneficiary certificates
Securities loaned
Derivative assets
Sub-total
Financial assets designed at FVTPL
Debt securities
Equity securities
Sub-total
AFS financial assets
Debt securities
Equity securities
Beneficiary certificates
Securities loaned
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
Derivative liabilities
Total
26,180
370,636
35,983
-
4,459
3,233
440,491
-
-
-
2,288,917
428,678
-
391,279
3,108,874
-
3,549,365
-
2,274,280
-
23,891
-
2,871,909
5,170,080
-
-
-
13,759,392
-
2,291,571
102,300
16,153,263
140,478
21,463,821
26,501
1,750
28,251
-
2,974,703
2,974,703
-
-
-
197
92,974
93,171
-
28,251
7,221
3,075,095
-
-
-
-
-
23,153
23,153
4,348
12,652
17,000
-
1,024,935
530,511
-
1,555,446
99
1,595,698
-
33,524
33,524
673,709
-
673,709
-
707,233
26,180
2,644,916
35,983
23,891
4,459
2,898,295
5,633,724
4,348
12,652
17,000
16,048,309
1,453,613
2,822,082
493,579
20,817,583
140,577
26,608,884
26,501
3,009,977
3,036,478
673,906
92,974
766,880
7,221
3,810,579
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Woori Bank
Annual Report 2016
153
Financial assets:
Financial assets held for trading
Deposits
Debt securities
Equity securities
Beneficiary certificates
Securities loaned
Derivative assets
Sub-total
Financial assets designed at FVTPL
Debt securities
Equity securities
Sub-total
AFS financial assets
Debt securities
Equity securities
Beneficiary certificates
Securities loaned
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
Level 1 (*1)
Level 2 (*1)
Level 3 (*2)
Total
December 31, 2015
24,884
689,600
62,945
-
10,313
419
788,161
-
-
-
2,235,229
344,339
-
615,570
-
3,195,138
-
3,983,299
24,872
136,845
161,717
-
-
-
161,717
-
1,927,806
-
14,017
-
2,311,402
4,253,225
-
-
-
11,754,310
-
740,958
104,440
-
12,599,708
177,155
17,030,088
-
2,365,375
2,365,375
10,660
96,851
107,511
2,472,886
-
-
-
-
-
78,676
78,676
986
11,609
12,595
-
993,368
377,070
-
5,308
1,375,746
5,973
1,472,990
-
78,607
78,607
747,351
-
747,351
825,958
24,884
2,617,406
62,945
14,017
10,313
2,390,497
5,120,062
986
11,609
12,595
13,989,539
1,337,707
1,118,028
720,010
5,308
17,170,592
183,128
22,486,377
24,872
2,580,827
2,605,699
758,011
96,851
854,862
3,460,561
(*1) There was no transferred between level 1 and level 2 of financial assets and liabilities measured at fair value. The Group
recognizes transfers between levels at the end of reporting period in which events have occurred or conditions have changed.
(*2) Certain AFS financial assets were measured at cost as of December 31, 2016 and 2015, that are amounting to 43,202 million
Won and 42,451 million Won, respectively. These unquoted equity instruments mostly represent minority investments in
special purpose 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.
Certain financial assets are carried at cost, even though under K-IFRS it is required to be remeasured at their fair
value, since they do not have quoted market prices in an active market and cannot be measured reliably at fair
value. The carrying amount and loss from the disposal of the financial assets which have been carried at cost
amounts to 5,417 million Won and 5,197 million Won, respectively.
Financial assets and liabilities designated at FVTPL, financial assets and liabilities held for trading, 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.
Woori Bank
Annual Report 2016
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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
The fair value is measured by discounting the projected cash
Fair value measurement methods
Alternative assumptions
Risk-free market rate, credit spread
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
Equity securities
Among DCF (Discounted Cash Flow) Model, FCFE (Free Cash
Risk-free market rate, market risk
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.
premium, beta
Derivatives
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.
The fair value of security linked to stock prices or derivatives is
measured by the models such as DCF model, FDM, or Monte
Carlo Simulation given the natures of the securities or
underlying assets.
Financial Instruments
linked to stock
prices or
derivatives
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.
Risk-free market rate, forward rate,
volatility, foreign exchange rate,
stock prices, etc.
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:
Input variable
Range
Fair value
measurement
technique
Option valuation
model and others
Derivative
assets
Derivative
liabilities
Option valuation
model and others
Equity-linked
securities
Monte Carlo
Simulation and
others
Correlation
coefficient
Historical
volatility
Correlation
coefficient
Historical
volatility
Correlation
coefficient
Historical
volatility
Equity
securities
External appraisal
value and others
Expected growth
rate
Impact of changes in significant unobservable
inputs on fair value measurement
Volatility of fair value increases as correlation
0.305~0.980
increases
19.9%~40.8%
volatility increase
Volatility of fair value increases as historical
Volatility of fair value increases as correlation
0.305~0.980
increase
Volatility of fair value increase due to historical
19.9%~40.8%
volatility increase
Compound financial instrument‘s fair value
increases as both of historical volatility and
correlation increase when correlation
decreases
However, despite of increase of historical
volatility, the fair value of compound
financial instrument may decrease
Fair value increases as expected growth rate
0.017~0.716
10.4%~63.9%
0.0%~1.0%
increases
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.
- 54 -
Woori Bank
Annual Report 2016
155
(3) Changes in financial assets and liabilities classified into level 3 are as follows (Unit: Korean Won in
millions):
For the year ended December 31, 2016
January 1,
2016
Net
Income
(loss) (*1)
Other
comprehensive
income (loss)
Purchases/
Issuances
Disposals/
Settlements
Transfer to or
from level 3
(*2)
December
31, 2016
Financial assets:
Financial assets held for trading
Derivative assets (*3)
78,676
(29,117)
Financial assets designed at FVTPL
Debt securities
Equity securities
Sub-total
986
11,609
12,595
AFS financial assets:
Equity securities (*4)
Beneficiary certificates
Others
Sub-total
993,368
377,070
5,308
1,375,746
(161)
1,043
882
(6,986)
(868)
594
(7,260)
-
-
-
-
13,640
(39,506)
(540)
23,153
4,509
-
4,509
(986)
-
(986)
-
-
-
4,348
12,652
17,000
57,323
5,794
(643)
62,474
205,749
174,024
-
379,773
(205,348)
(25,509)
(5,259)
(236,116)
(19,171) 1,024,935
530,511
-
(19,171) 1,555,446
-
-
Derivative assets
Total
5,973
1,472,990
3,877
(31,618)
-
62,474
-
397,922
(9,751)
(286,359)
-
99
(19,711) 1,595,698
Financial liabilities:
Financial liabilities held for trading
Derivative liabilities
Financial liabilities designated at
FVTPL
Equity-linked securities
Total
78,607
(8,322)
747,351
825,958
71,079
62,757
-
-
-
1,155
(37,916)
-
1,155
(144,721)
(182,637)
-
-
-
33,524
673,709
707,233
(*1) The loss amounting to 94,238 million Won for the year ended December 31, 2016, which is from financial assets and
liabilities that the Group holds at the end of periods, was recognized in net gain (loss) on financial instruments at FVTPL
and net gain (loss) on AFS financial assets in the consolidated statement of comprehensive income.
(*2) The Group recognizes transfers between levels at the end of reporting period within which events have occurred or
conditions have changed.
(*3) As the variables used for the valuation of currency related derivatives were observable in the market, such derivatives were
transferred into level 2 from level 3.
(*4) AFS financial assets were transferred out of level 1 to level 3 upon the change of the fair value measurement method of the
assets by using market the external valuation specialists from previously using quoted prices in the active market, in the
opposite case, they were transferred out of level 3 to level 1.
Woori Bank
Annual Report 2016
156
- 55 -
For the year ended December 31, 2015
January 1,
2015
Net
Income
(loss) (*1)
Other
comprehensive
income (loss)
Purchases/
Issuances
Disposals/
Settlements
Transfer to or
from level 3
(*2)
December
31, 2015
Financial assets:
Financial assets held for trading
Derivatives instruments assets
(*3)
Financial assets designed at
FVTPL
Equity-linked securities
Debt securities
Equity securities
Sub-total
AFS financial assets
Equity securities (*4)
Beneficiary certificates
Others
Sub-total
Derivative assets
Total
Financial liabilities:
Financial liabilities held for
trading
Derivative liabilities (*3)
Financial liabilities designated at
FVTPL
Equity-linked securities (*5)
Total
49,274
71,703
6,066
-
10,567
16,633
1,031,918
355,694
14,241
1,401,853
11,946
1,479,706
-
(14)
1,042
1,028
(57,373)
3,905
(7,064)
(60,532)
7,375
19,574
41,711
58,565
361,993
403,704
(73,533)
(14,968)
-
-
-
-
-
105,290
(24,846)
1,370
81,814
-
81,814
-
-
-
(8,166)
(33,156)
(979)
78,676
-
1,000
-
1,000
105,930
121,613
-
227,543
-
220,377
(6,066)
-
-
(6,066)
(100,018)
(79,296)
(3,239)
(182,553)
(13,348)
(235,123)
-
-
-
-
-
986
11,609
12,595
(92,379)
-
-
993,368
377,070
5,308
(92,379) 1,375,746
-
5,973
(93,358) 1,472,990
4,008
(24,475)
(1,202)
78,607
764,005
768,013
(304,917)
(329,392)
(197)
(1,399)
747,351
825,958
(*1) The loss amounting to 2,854 million Won for the year ended December 31, 2015, which is from financial assets and
liabilities that the Group holds at the end of periods, was recognized in net gain (loss) on financial instruments at FVTPL
and net gain (loss) on AFS financial assets in the consolidated statement of comprehensive income.
(*2) The Group recognizes transfers between levels at the end of reporting period within which events have occurred or
conditions have changed.
(*3) As the variables used for the valuation of equity related derivatives and interest rate related derivatives were observable in
the market, such derivatives were transferred into level 2 from level 3.
(*4) AFS financial assets were transferred out of level 1 to level 3 upon the change of the fair value measurement method of the
assets by using market the external valuation specialists from previously using quoted prices in the active market, in the
opposite case, they were transferred out of level 3 to level 1.
(*5) Since the observable market data for equity-linked securities became available, such securities were transferred out of level
3 to level 2.
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Woori Bank
Annual Report 2016
157
(4) Sensitivity analysis through reasonable changes of the unobservable inputs used to measure Level 3 financial
instruments are as follows:
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 volatility on the
fair value of a level 3 financial instruments for the years ended December 31, 2016 and 2015. (Unit: Korean
Won in millions):
For the year ended December 31, 2016
Net income
(loss)
Favorable Unfavorable
Other comprehensive
income (loss)
Favorable Unfavorable
For the year ended December 31, 2015
Net income
(loss)
Favorable Unfavorable
Other comprehensive
income (loss)
Favorable Unfavorable
Financial assets:
Financial assets held for
trading
Derivatives instruments
assets (*1)(*2)
Financial assets designed
at FVTPL
Equity securities(*6)
AFS Financial Assets
Equity securities
(*3)(*4)
Beneficiary certificates
(*4)
Others (*5)
Total
Financial liabilities:
Financial liabilities held
for trading
Derivative liabilities
(*1)(*2)
Financial liabilities
designated at FVTPL
Equity-linked securities
(*1)
Total
861
(2,248)
707
(657)
-
-
-
-
10,674
(9,729)
793
(739)
-
-
-
-
-
-
-
1,568
-
31,412
(18,551)
-
-
37,648
(20,869)
-
-
(2,905)
2,903
-
34,315
(2,571)
-
(21,122)
-
-
11,467
-
-
(10,468)
4,102
80
41,830
(3,875)
(80)
(24,824)
4,892
(3,568)
905
5,797
(857)
(4,425)
-
-
-
-
-
-
13,469
(12,281)
2,289
15,758
(2,247)
(14,528)
-
-
-
-
-
-
(*1) Fair value changes of equity related derivatives assets and liabilities and equity-linked securities are calculated by
increasing or decreasing historical volatility of the stock price and correlation, which are major unobservable variables, by
10%, respectively. In the case of interest rate related derivative assets and liabilities, fair value changes are calculated by
increasing or decreasing the volatility of interest rate, 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) Among the equity securities, even if the sensitivity analysis of the capital contributions and beneficiary certificates is not
possible in practice, fair value changes of beneficiary certificates and other securities whose major unobservable variables
are composed of the real estate are calculated by increasing or decreasing price fluctuation of real estate which is
underlying assets and discount rate by 1%.
(*5) Fair value changes of 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 prices of trust property and real estates and discount rate are
major unobservable variables.
(*6) Changes of fair value are measured by increasing or decreasing the discount rate by 10%, which is major unobservable
variable, respectively.
Woori Bank
Annual Report 2016
158
- 57 -
(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):
Financial assets:
HTM financial assets
Loans and receivables
Financial liabilities:
Deposits due to customers
Borrowings
Debentures
Other financial liabilities
Financial assets:
HTM financial assets
Loans and receivables
Financial liabilities:
Deposits due to customers
Borrowings
Debentures
Other financial liabilities
As of December 31, 2016
Fair value
Level 1
Level 2
Level 3
Total
Book
value
741,880
-
13,243,297
-
-
259,565,952
13,985,177
259,565,952
13,910,251
258,392,633
-
-
-
-
221,001,466
18,785,325
24,004,668
21,984,171
-
-
-
-
221,001,466
18,785,325
24,004,668
21,984,171
221,020,411
18,769,515
23,565,449
21,985,086
As of December 31, 2015
Fair value
Level 1
Level 2
Level 3
Total
Book
value
1,045,022
-
12,768,727
-
-
248,253,422
13,813,749
248,253,422
13,621,640
244,842,062
-
-
-
-
208,133,241
20,084,789
22,288,472
16,961,987
-
-
-
-
208,133,241
20,084,789
22,288,472
16,961,987
209,141,826
20,033,917
21,898,859
16,964,206
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.
Loans and receivables
The fair value is measured by
discounting the projected cash flows
of loan products by applying the
market discount rate that has been
applied to a proxy company that has
similar credit rating to the debtor.
Alternative assumptions
Risk-free market rate and
credit spread
Risk-free market rate,
credit spread and
prepayment-rate
Deposit due to customers,
The fair value is measured by
Risk-free market rate and
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.
forward rate
- 58 -
Woori Bank
Annual Report 2016
159
12. DERECOGNITION AND OFFSET OF FINANCIAL INSTRUMENTS
(1) Derecognition of financial assets
1) Transferred financial assets that meet condition of derecognition
The book value, fair value of, and maximum exposure to loss from the financial assets that were
derecognized from the separate financial statements of the Group through disposals, but the Group still
have continuous involvements are as follows (Unit: Korean Won in millions):
Type of continuous
involvement
December 31, 2016
Book value of
continuous
participation
Fair value of
continuous
participation
Conditional disposal of loans
to KAMCO (*)
Post settlement
-
Type of continuous
involvement
December 31, 2015
Book value of
continuous
participation
Fair value of
continuous
participation
Conditional disposal of loans
to KAMCO (*)
Post settlement
-
Maximum
exposure to loss
701
Maximum
exposure to loss
701
-
-
(*) For ex-post settling up amount of the collateral is not fixed yet, expected cash flow cannot be
reliably measured as of December 31, 2016 and December 31, 2015, and the maximum exposure to
loss is disclosed at the transfer price. Though the transfer does not qualify for derecognition in
accordance with K-IFRS 1039 – Financial Instrument: Recognition and Measurement, the Group
derecognized the financial asset from the consolidated financial statements applying exception for
retrospective application of transactions before the date of transition to IFRSs in K-IFRS 1101 –
First-time Adoption of K-IFRS.
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:
Assets transferred
Related liabilities
AFS financial assets
HTM financial assets
Total
Disposal of securities under
repurchase agreements
December 31,
2016
2,546,683
7,133
2,553,816
December 31,
2015
603,274
139,340
742,614
2,004,905
671,629
Woori Bank
Annual Report 2016
160
- 59 -
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 and 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. The carrying amounts of securities loaned are
as follows (Unit: Korean Won in millions):
Financial assets at
Equity securities-listed stock
FVTPL
AFS financial
Korean treasury and
December 31,
2016
December 31,
2015
4,459
10,313
assets
government agencies bonds
Total
493,579
498,038
720,010
730,323
Loaned to
Samsung Securities Co.,
Ltd. and others
Korea Securities
Depository
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. The Group under the
repurchase agreements has offsetting right only upon the counter-party‘s default, insolvency or bankruptcy,
thus the repurchase agreements are applied by the TBMA/ISMA Global Master Repurchase Agreement of
which do not satisfy the offsetting criteria of K-IFRS 1032. The Group disclosed bonds sold (purchased)
under repurchase agreements as borrowings (loans and receivables).
- 60 -
Woori Bank
Annual Report 2016
161
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
Financial liabilities:
Derivative liabilities and others (*1)
Payable spot exchange (*3)
Bonds sold under repurchase
agreements (*4)
Domestic exchanges payable
(*3)(*5)
Total
Financial assets:
Derivative assets and others (*1)
Receivable spot exchange (*2)
Bonds purchased under resale
agreements (*2)
Domestic exchanges receivable
(*2)(*5)
Total
Financial liabilities:
Derivative liabilities and others (*1)
Payable spot exchange (*3)
Bonds sold under repurchase
agreements (*4)
Domestic exchanges payable
(*3)(*5)
Total
December 31, 2016
Gross
amounts of
recognized
financial
assets
Gross
amounts of
recognized
financial
assets set off
Net
amounts of
financial
assets
presented
Related amounts not set off
in the statement of financial
position
offsetting
agreement
Cash
collateral
received
Net
amounts
2,962,969
4,678,089
8,854,753
8,442
-
2,954,527
4,678,089
6,546,232
69,834 1,016,550
-
8,854,753
8,854,753
-
-
31,456,123
47,951,934
30,883,281
30,891,723
572,842
17,060,211
-
15,400,985
-
572,842
69,834 1,589,392
December 31, 2016
Gross
amounts of
recognized
financial
liabilities set
off
Net
amounts of
financial
liabilities
presented
Related amounts not set off
in the statement of financial
position
offsetting
agreement
Cash
collateral
pledged
Net
amounts
8,442
-
3,458,932
4,682,775
6,695,062
105,270 1,341,375
-
2,004,905
2,004,905
-
-
Gross
amounts of
recognized
financial
liabilities
3,467,374
4,682,775
2,004,905
39,345,524
49,500,578
30,883,281
30,891,723
8,462,243
18,608,855
6,161,151
14,861,118
- 2,301,092
105,270 3,642,467
December 31, 2015
Gross
amounts of
recognized
financial
assets
Gross
amounts of
recognized
financial
assets set off
Net
amounts of
financial
assets
presented
Related amounts not set off
in the statement of financial
position
offsetting
agreement
Cash
collateral
received
Net
amounts
2,573,107
4,344,109
7,583,743
8,857
-
2,564,250
4,344,109
5,615,376
53,162 1,239,821
-
7,583,743
7,583,743
-
-
29,980,302
44,481,261
29,467,000
29,475,857
513,302
15,005,404
-
13,199,119
-
513,302
53,162 1,753,123
December 31, 2015
Gross
amounts of
recognized
financial
liabilities
Gross
amounts of
recognized
financial
liabilities set
off
Net
amounts of
financial
liabilities
presented
Related amounts not set off
in the statement of financial
position
offsetting
agreement
Cash
collateral
pledged
Net
amounts
3,144,595
4,342,919
8,857
-
3,135,738
4,342,919
6,205,345
173,268
1,100,044
671,629
-
671,629
671,629
-
-
31,493,204
39,652,347
29,467,000
29,475,857
2,026,204
10,176,490
2,020,717
8,897,691
-
5,487
173,268 1,105,531
- 61 -
Woori Bank
Annual Report 2016
162
(*1) The items include derivatives held for trading, derivatives for hedging and equity linked securities.
(*2) The items are included in loans and receivables.
(*3) The items are included in other financial liabilities.
(*4) The items are included in borrowings.
(*5) Certain financial assets and liabilities are presented as net amounts.
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):
Subsidiaries
Main business
Percentage of ownership (%)
December 31,
December 31,
2015
2016
Financial statements
used as of
Woori Bank and Woori Private Equity Asset
Management Co., Ltd.:
Woori Blackstone Korea Opportunity
Private Equity Fund No.1
Woori Bank:
Kumho Tire Co., Inc. (*1)(*2)
Woori Service Networks Co., Ltd. (*4)
Korea Credit Bureau Co., Ltd. (*5)
Korea Finance Security Co., Ltd. (*4)
United PF 1st Corporate Financial Stability
(*5)
Chin Hung International Inc. (*2)
Poonglim Industrial Co., Ltd.
(*6)(*12)(*15)
STX Engine Co., Ltd. (*1)(*2)
Samho International Co., Ltd. (*1)(*2)
Force TEC Co., Ltd. (*6)
Hana Construction Co., Ltd. (*6)(*13)
STX Corporation
(*1) (*2) (*6) (*15) (*16)
Osung LST Co., Ltd. (*1)(*2)(*14)
Saman Corporation (*5)
Dongwoo C&C Co., Ltd. (*6)
SJCO Co., Ltd. (*6)
Ilyang construction Co., Ltd. (*13)
G2 Collection Co., Ltd. (*6)
The Base Enterprise Co., Ltd. (*6)(*10)
Heungjiwon Co., Ltd. (*6)(*10)
Kyesan Engineering Co., Ltd. (*6)(*10)
Good Software Lap Co., Ltd. (*6)(*10)
Wongwang Co., Ltd. (*6)(*10)
Sejin Construction Co., Ltd. (*6)(*9)
Deokwon Food Co., Ltd. (*6)(*10)
QTS Shipping Co., Ltd. (*6)(*9)
DAEA SNC Co. Ltd. (*6)(*9)
ARES-TECH Co.,Ltd. (*6)(*9)
2016KIF-IMM Woori Bank Technology
Venture Fund (*11)
K BANK Co.,Ltd. (*5)(*11)
Woori Growth Partnerships New Technology
Private Equity Fund(*11)
Woori Private Equity Fund:
Finance
Manufacturing
Freight & staffing services
Credit information
Security service
Finance
Construction
Construction
Manufacturing
Construction
Freight & staffing services
Construction
Wholesale of non-Specialized
Goods
Manufacturing
General Construction
Technology Service
Construction
Aggregate transportation and
Wholesale
Construction
Wholesale and retail sales
Manufacturing
Other printing
Construction
Service
Wholesale and real estate
Construction
Poultry processing and storage
Complex transportation
brokerage
Wholesale and retail sales
Electronic component
manufacturing
Other financial business
Finance
Other financial business
Woori Renaissance Holdings (*7)
Other financial business
Woori Private Equity Asset Management Co.,
Ltd.:
Woori Columbus First PEF (*8)
Other financial business
26.4
14.2
4.9
9.9
15.0
-
28.4
31.0
29.2
7.8
34.4
-
9.5
-
9.2
23.2
26.5
-
28.9
48.4
27.8
23.2
28.9
29.0
29.6
27.3
49.4
24.0
23.4
20.0
13.0
23.1
51.6
2.0
26.4
14.2
4.9
9.9
15.0
17.7
28.4
30.7
29.2
7.8
34.4
22.4
15.0
11.1
9.2
23.2
26.5
40.0
28.9
-
-
-
-
-
-
-
-
-
-
-
-
-
December 31
September 30(*3)
November 30(*3)
December 31
November 30(*3)
-
November 30(*3)
September 30(*3)
September 30(*3)
December 31
-
-
September 30(*3)
-
September 30(*3)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
December 31
November 30(*3)
December 31
51.6
December 31
1.9
December 31
(*1) The Group has significant influence over these entities through its position in the creditors' council which is the
decision making body regarding to financial and operational policies of associates.
(*2) The investments in associates that have quoted market prices are Kumho Tire Co., Ltd. (current year: KRW 8,480,
prior year: KRW 6,730), Chin Hung International Inc. (current year: KRW 2,090, prior year: KRW 2,300), STX
- 62 -
Woori Bank
Annual Report 2016
163
Engine Co., Ltd. (current year: KRW 6,630, prior year: KRW 6,800), Samho International Co., Ltd. (current year:
KRW 16,900, prior year: KRW 15,550), STX Corporation. (current year: KRW 1,660, prior year: KRW 3,435),
and Osung LST Co., Ltd. (prior year: KRW 795).
(*3) The significant transactions and events between the end of reporting period of the associates and the Group have
been properly incorporated.
(*4) Most of the significant business transactions of Woori Service Network Co., Ltd. and Korea Finance Security Co.,
Ltd. are with the Group.
(*5) The Group can participate in decision-making body and exercise significant influence over Korea Credit Bureau
Co., Ltd., Saman Corporation and K-Bank Co.,Ltd. through business partnerships. As the Group lost significant
influence over the United PF 1st Corporate Financial Stability during the year ended December 31, 2016, the
entity was excluded from the investment in associates.
(*6) The carrying value of investments in Poonglim Industrial Co., Ltd., STX Corporation, The Base Enterprise Co.,
Ltd., Heungjiwon Co., Ltd., Kyesan Engineering Co., Ltd, Good Software Lab Co., Ltd, Wongwang Co., Ltd,
Sejin Construction Co., Ltd, Deokwon Food Co., Ltd., QTS Shipping Co., Ltd., DAEA SNC Co., Ltd., and
ARES-TECH Co. Ltd. is nil as of December 31, 2016. The carrying value of investments in Hana Construction
Co., is nil as of December 31, 2015. The carrying value of investments in Force TEC Co., Ltd., Dongwoo C&C
Co., Ltd., SJCO Co., Ltd., G2 collection Co., Ltd. is nil as of December 31, 2016 and 2015, respectively.
(*7) The Group owns over 50% ownership of Woori Renaissance Holdings. However, the investment in this entity
was accounted for using equity method as the ownership and related contracts meet the definition of joint
arrangement under K-IFRS 1111 Joint Arrangements.
(*8) 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 making decision of dividend or other
distribution. As such, the investment in this entity was accounted for using equity method as of December 31,
2016 and 2015. Meanwhile, as of December 31, 2016, the principal investments in the associates were returned
and the Group has received the initial investment of 1,065 million Won, and is to maintain a 2.0% stake until its
liquidation based on the resolution of special meeting of investors.
(*9) Due to debt-equity swap which occurred during the year ended December 31, 2016, the entity is included in the
associates.
(*10) Even though the Group‘s ownership ratio of the entity is more than 20%, the entity does not have significant
influence over the entity due to the fact that the entity is going through workout process under receivership, and
thus the entity was excluded from the investment in associates. However, as the workout was completed during
the year ended December 31, 2016, the entity has been included in the investment in associates.
(*11) Due to capital contribution and others by the Group during the year ended December 31, 2016, the entities has
been included in the investment in associates.
(*12) Due to acquisition of treasury stock of Poonglim Industrial Co., Ltd. during the year ended December 31, 2016,
the percentage of ownership increased.
(*13) As the Group sold shares during the year ended December 31, 2016, the entity was excluded from the associates.
(*14) This entity was reclassified into assets held for sale and disposed of during the year ended December 31, 2016.
(*15) Equity method was suspended on the investee due to accumulated loss on equity method in excess of investments
in associates for the year ended December 31, 2016
(*16) As the Group did not participate in debt-equity swap of STX Corporation which occurred during the year ended
December 31, 2016 the ownership of the Group has decreased.
Woori Bank
Annual Report 2016
164
- 63 -
(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,
2016
Share of
profits
(losses)
Acquisi-
tion(*1)
Disposal
and
others(*2) Dividends
Change in
Capital
Impairment
December 31,
2016
For the year ended December 31, 2016
Woori Blackstone Korea
Opportunity Private Equity
Fund No.1
Kumho Tire Co., Inc.
Woori Service Networks
Co., Ltd.
Korea Credit Bureau
Co., Ltd.
Korea Finance Security
Co., Ltd.
United PF 1st Corporate
financial stability
Chin Hung International Inc.
Poonglim Industrial Co., Ltd.
STX Engine Co., Ltd.
Samho Co., Ltd.
STX Corporation
Osung LST Co., Ltd.
Saman Corporation
K-Growth crowd 2step Fund
Woori Growth Partnerships
New Technology Private
Equity Fund
2016KIF-IMM Woori Bank
Technology Venture Fund
K BANK Co., Ltd.
Woori Renaissance Holdings
Woori Columbus First PEF
Total
108
3,313
3,266
172,441
89,725
13,916
92,038
7,492
42,215
15,405
8,521
800
13,602
1,800
32,500
63,000
1,200
780,911
43,917
175,652
56,044
214,050
10,093
(13,172)
(37,036)
-
(13,812)
-
-
(546)
139
5,291
3,711
187,592
43,936
5,313
51,276
14,325
4,251
10,985
8,521
-
18
436
(281)
3,265
(996)
(2,378)
(6,665)
5,392
(4,222)
(2,903)
252
(13)
-
-
-
-
-
-
-
-
-
-
-
-
-
800
-
-
-
(12)
(135)
(54)
(190,857)
-
-
-
-
-
(6,909)
-
(787)
-
-
-
-
-
-
-
-
-
-
-
(640)
13,602
-
-
-
37,121
1,306
643,861
-
(1,589)
17,303
(43)
3,857
1,800
32,500
-
-
48,702
-
-
-
(1,065)
(236,654)
-
-
(2)
(198)
(14,213)
-
-
-
-
-
-
-
-
-
-
-
(1,173)
-
-
15,289
200,332
145
5,592
3,376
-
43,032
-
43,036
19,729
-
-
8,699
-
-
13,118
-
-
-
-
(1,173)
1,800
30,442
54,422
-
439,012
-
-
-
-
92
(2,935)
(1,575)
12
(29)
-
(74)
-
156
-
(469)
-
-
(5,368)
(*1) AFS financial assets decreased by 5,421 million Won due to transfers to investments in associates during the year
ended December 31, 2016.
(*2) The transfers from investments in associates to AFS financial assets amounted to 155,220 million Won and the
transfers from investments in associates to assets held for sale amounted to 6,909 million Won.
For the year ended December 31, 2015
Acquisi-
tion(*)
Disposal
and others Dividends
Change in
Capital
Impairment
Other
changes
December
31, 2015
Acquisition
Cost
January 1,
2015
Share of
profits
(losses)
81,608
175,652
100,436
224,829
9,266
(11,979)
Woori Blackstone Korea
Opportunity Private Equity
Fund No.1
Kumho Tire Co., Inc.
Woori Service Networks
Co., Ltd.
Korea Credit Bureau
Co., Ltd.
Korea Finance Security
Co., Ltd.
United PF 1st Corporate
financial stability
Chin Hung International Inc.
Poonglim Industrial Co., Ltd.
STX Engine Co., Ltd.
Samho Co., Ltd.
STX Corporation
Osung LST Co., Ltd.
Saman Corporation
Phoenix Digital Tech
Co., Ltd.
Woori Renaissance Holdings
Woori Columbus First PEF
Total
(37,367)
-
(16,291)
-
-
1,201
-
-
-
1,098
108
2,215
3,337
191,617
60,275
13,916
47,008
7,492
42,215
15,405
8,521
1,334
63,000
1,200
714,903
130
3,378
21
335
-
-
(12)
-
4,272
(425)
-
(81)
(55)
203,418
28,491
-
2,293
11,257
14,347
18,482
-
-
36,019
1,084
648,436
3,350
(14,489)
10,643
(3,901)
3,012
(10,673)
(4,322)
-
1,610
3,518
222
(13,812)
-
29,451
-
45,030
-
-
-
8,521
-
-
-
84,100
(19,176)
-
-
-
-
-
-
-
(1,610)
-
-
(58,234)
-
-
-
-
-
-
-
-
-
(2,416)
-
(18,774)
-
480
-
-
482
(1)
1,823
56
559
4
-
-
-
-
4,604
-
-
-
-
-
-
-
(22,473)
-
-
-
(33,839)
-
-
-
-
(56,312)
-
-
-
-
-
-
-
17,144
6,031
-
18
30,660
-
-
-
-
53,853
56,044
214,050
139
5,291
3,711
187,592
43,936
5,313
51,276
14,325
4,251
10,985
8,521
-
37,121
1,306
643,861
(*)
Investments in associates increased by 83,002 million Won due to transfers between accounts, such as loan-equity
swap occurred during the year ended December 31, 2015.
- 64 -
Woori Bank
Annual Report 2016
165
(3) Summary 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 Private Equity
Fund No.1
Kumho Tire Co., Inc.
Woori Service Networks Co., Ltd.
Korea Credit Bureau Co., Ltd.
Korea Finance Security Co., Ltd.
Chin Hung International Inc.
Poonglim Industrial Co., Ltd.
STX Engine Co., Ltd.
Samho Co., Ltd.
STX Corporation
Saman Corporation
Woori Growth Partnerships New Technology Private
Equity Fund
2016KIF-IMM Woori Bank Technology Venture
Fund
K BANK Co., Ltd.
Woori Renaissance Holdings Inc.
Woori Columbus First PEF
Woori Blackstone Korea Opportunity Private Equity
Fund No.1
Kumho Tire Co., Inc.
Woori Service Networks Co., Ltd.
Korea Credit Bureau Co., Ltd.
Korea Finance Security Co., Ltd.
United PF 1st Corporate Financial Stability
Chin Hung International Inc.
Poonglim Industrial Co., Ltd.
STX Engine Co., Ltd.
SamHo Co., Ltd.
STX Corporation
Osung LST Co., Ltd.
Saman Corporation
Woori Renaissance Holdings Inc.
Woori Columbus First PEF
December 31, 2016
Assets
Liabilities
Operating
revenue
Net income
(loss)
57,971
5,079,740
4,722
71,245
32,262
421,710
304,718
865,265
740,786
781,622
83,380
57,339
9,005
239,806
127,411
811
427
3,914,306
1,782
17,322
9,759
354,995
323,765
769,481
489,130
1,087,469
47,175
493
254
5,633
26,703
506
75,084
2,156,667
14,875
59,868
52,657
578,640
156,770
372,295
909,927
1,252,968
72,850
38,226
(53,328)
801
3,517
700
794
(15,135)
(22,978)
68,077
(378,782)
2,746
37
(2,177)
5
2,927
37,206
3,764
(250)
(12,222)
33,508
(450)
December 31, 2015
Assets
Liabilities
Operating
revenue
Net income
(loss)
212,171
5,197,002
4,577
63,960
30,195
1,088,325
516,305
352,683
958,468
709,109
1,232,014
125,859
80,970
95,421
68,466
414
3,926,952
1,772
13,076
5,457
30,390
446,412
331,801
834,499
526,379
1,181,593
42,981
49,334
28,218
562
49,264
3,039,519
14,661
53,184
50,932
117,579
624,110
206,904
417,125
892,871
1,236,168
38,767
114,592
12,013
12,158
35,099
(27,893)
824
2,005
1,890
18,911
(39,936)
13,185
36,615
39,664
(44,404)
(30,108)
(116,019)
6,813
11,570
Woori Bank
Annual Report 2016
166
- 65 -
(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, 2016 and 2015, are as follows:
Orient Shipyard Co., Ltd. (*)
Saenuel Co., Ltd. (*)
E Mirae Tech Co., Ltd. (*)
Jehin Trading Co., Ltd. (*)
NK Eng Co., Ltd. (*)
The season Co., Ltd. (*)
Yuil PESC Co., Ltd. (*)
Reading Doctors Co., Ltd. (*)
Youngdong Sea Food Co., Ltd. (*)
Sinseong Trading Co., Ltd. (*)
PREXCO Co., Ltd. (*)
Hyunwoo International Co., Ltd. (*)
As of December 31, 2016
Number of shares owned
465,050 shares
3,531 shares
7,696 shares
81,610 shares
697,033 shares
18,187 shares
8,642 shares
7,398 shares
12,106 shares
2,584 shares
919,972 shares
59,873 shares
Ownership (%)
23.0
37.4
41.0
27.3
23.1
30.1
24.0
35.4
24.0
27.2
28.1
25.9
(*) Even though the Group‘s ownership interest of the entity is more than 20% as a limited partner, 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, and thus the entity has been
excluded from the investment in associates.
As of December 31, 2015
Orient Shipyard Co., Ltd. (*)
The Base Enterprise Co., Ltd. (*)
Saenuel Co., Ltd. (*)
Heungjiwon Co., Ltd. (*)
E Mirae Tech Co., Ltd. (*)
Jehin Trading Co., Ltd. (*)
NK Eng Co., Ltd. (*)
The season Co., Ltd. (*)
Deokwon Food Co., Ltd. (*)
Yuil PESC Co., Ltd. (*)
Kyesan Engineering Co., Ltd. (*)
Good Software Lab Co., Ltd. (*)
DOWOO (*)
Reading Doctors Co., Ltd. (*)
Orient Star Logistics Co., Ltd. (*)
Wongwang Co., Ltd. (*)
Number of shares owned
465,050 shares
68,470 shares
3,531 shares
32,849 shares
7,696 shares
81,610 shares
697,033 shares
18,187 shares
14,300 shares
8,642 shares
60,581 shares
17,121 shares
13,477 shares
7,398 shares
17,293 shares
2,590 shares
Ownership (%)
23.0
48.4
37.4
27.8
41.0
27.3
23.1
30.1
27.3
24.0
23.2
28.9
41.9
35.4
22.3
29.0
(*) Even though the Group‘s ownership interest of the entity is more than 20% as a limited partner, 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, and thus the entity has been
excluded from the investment in associates.
- 66 -
Woori Bank
Annual Report 2016
167
(5) As of December 31, 2016 and 2015, 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, 2016
Net assets of
associates
(or joint
ventures)
cost-book
value
differential
Intercompany
transaction
and others
Book
value
Impairment
Woori Blackstone Korea
Opportunity Private Equity Fund
No.1
Kumho Tire Co., Inc. (*)
Woori Service Networks Co., Ltd.
Korea Credit Bureau
Korea Finance Security Co., Ltd.
Chin Hung International Inc. (*)
Poonglim Industrial Co., Ltd. (*)
STX Engine Co., Ltd.
SamHo Co., Ltd.
STX Corporation (*)
Saman Corporation
Woori Growth Partnerships New
Technology Private Equity Fund
2016KIF-IMM Woori Bank
Technology Venture Fund
K BANK Co.,Ltd.
Woori Renaissance Holdings
Woori Columbus First PEF
57,544
1,055,219
2,940
53,923
22,503
65,387
(111,156)
95,784
251,656
(250,018)
36,205
56,846
8,751
234,173
100,708
305
26.4
14.2
4.9
9.9
15.0
28.4
31.0
29.2
7.8
9.5
9.2
23.1
20.0
13.0
51.6
2.0
15,191
149,324
145
5,344
3,376
18,593
(34,463)
28,002
19,729
(23,633)
3,326
13,118
1,750
30,442
51,965
6
-
48,459
-
248
-
24,565
54,149
14,954
-
24,614
5,373
-
-
-
-
-
-
-
-
-
-
-
(21,062)
-
-
(27,904)
-
98
2,549
-
-
-
(126)
1,376
80
-
26,923
-
15,289
200,332
145
5,592
3,376
43,032
-
43,036
19,729
-
8,699
-
-
13,118
-
-
(6,441)
-
50
-
8,898
(6)
1,800
30,442
54,422
-
Total net
asset
Ownership
(%)
As of December 31, 2015
Net assets of
associates
(or joint
ventures)
cost-book
value
differential
Intercompany
transaction
and others
Book
value
Impairment
Woori Blackstone Korea
Opportunity Private Equity Fund
No.1
Kumho Tire Co., Inc. (*)
Woori Service Networks Co., Ltd.
Korea Credit Bureau
Korea Finance Security Co., Ltd.
United PF 1st Corporate financial
stability
Chin Hung International Inc. (*)
Poonglim Industrial Co., Ltd. (*)
STX Engine Co., Ltd. (*)
SamHo Co., Ltd.
STX Corporation
Osung LST Co., Ltd.
Saman Corporation
Woori Renaissance Holdings
Woori Columbus First PEF
211,757
1,152,161
2,805
50,884
24,738
1,057,935
68,132
(58,065)
123,969
182,730
50,421
82,878
31,636
67,203
67,904
26.4
14.2
4.9
9.9
15.0
17.7
28.4
30.7
29.2
7.8
15.0
11.1
9.2
51.6
1.9
(*) The net asset amount is after considering preferred stocks.
55,900
163,042
139
5,043
3,711
187,538
19,374
(17,837)
36,230
14,325
7,552
9,238
2,911
34,677
1,304
-
48,459
-
248
-
-
24,566
45,622
14,927
-
24,610
35,597
5,610
-
6
-
-
-
-
-
-
-
(22,472)
-
-
(28,370)
(33,839)
-
(6,441)
-
144
2,549
-
-
-
54
(4)
-
119
-
459
(11)
-
8,885
(4)
56,044
214,050
139
5,291
3,711
187,592
43,936
5,313
51,276
14,325
4,251
10,985
8,521
37,121
1,306
Woori Bank
Annual Report 2016
168
- 67 -
14.
INVESTMENT PROPERTIES
(1)
Investment properties are as follows (Unit: Korean Won in millions):
Acquisition cost
Accumulated depreciation
Net carrying value
December 31, 2016
December 31, 2015
387,675
(29,178)
358,497
376,192
(24,696)
351,496
(2) Changes in investment properties are as follows (Unit: Korean Won in millions):
Beginning balance
Acquisition
Depreciation
Transfer
Foreign currencies translation adjustments
Ending balance
For the year ended
December 31, 2016
For the year ended
December 31, 2015
351,496
4,428
(3,762)
6,314
21
358,497
357,550
-
(3,806)
(2,297)
49
351,496
(3) Fair value of investment properties is amounting to 382,370 million Won and 371,890 million Won as of
December 31, 2016 and 2015, 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, 2016 and 2015.
(4) Rental fee earned from investment properties is amounting to million Won and 5,027 million Won and
5,629 million Won as of December 31, 2016 and 2015, respectively.
- 68 -
Woori Bank
Annual Report 2016
169
15. PREMISES AND EQUIPMENT
(1) Premises and equipment are as follows (Unit: Korean Won in millions):
Acquisition cost
Accumulated depreciation
Net carrying value
Land
1,488,745
-
1,488,745
Building
855,332
(163,633)
691,699
Properties for
business use
1,010,141
(820,239)
189,902
Structures in
leased office
424,562
(355,604)
68,958
Construction
in progress
18,717
-
18,717
Structures
20
(16)
4
Total
3,797,517
(1,339,492)
2,458,025
December 31, 2016
Acquisition cost
Accumulated depreciation
Net carrying value
Land
1,493,628
-
1,493,628
Building
843,343
(139,326)
704,017
Properties for
business use
965,820
(772,529)
193,291
Structures in
leased office
405,801
(326,057)
79,744
Construction
in progress
522
-
522
Structures
20
(16)
4
Total
3,709,134
(1,237,928)
2,471,206
December 31, 2015
(2) Changes in premises and equipment are as follows (Unit: Korean Won in millions):
Beginning balance
Acquisition
Disposal
Depreciation
Classified to assets held
for sale
Foreign currencies
translation adjustment
Transfer
Acquisition through
business combination
Others
Ending balance
Beginning balance
Acquisition
Disposal
Depreciation
Classified to assets held
for sale
Foreign currencies
translation adjustment
Transfer
Others
Ending balance
Land
1,493,628
-
(30)
-
Building
704,017
15,939
(1,474)
(24,887)
(4,063)
(251)
625
(1,415)
516
(1,557)
For the year ended December 31, 2016
Properties for
business use
193,291
74,336
(233)
(82,445)
Structures in
leased office
79,744
19,615
(2,623)
(48,587)
Construction
in progress
522
21,231
(102)
-
Structures
4
-
-
-
Total
2,471,206
131,121
(4,462)
(155,919)
-
307
-
-
376
-
442
19,991
68,958
-
153
(3,087)
-
-
18,717
-
-
-
-
-
4
(4,314)
1,977
(6,059)
651
23,824
2,458,025
-
-
1,488,745
-
(604)
691,699
209
4,437
189,902
Land
1,514,698
2,628
(10,780)
-
Building
706,524
21,127
(648)
(24,846)
For the year ended December 31, 2015
Properties for
business use
209,588
69,230
(847)
(85,279)
Structures in
leased office
70,185
35,304
(2,000)
(36,740)
Construction
in progress
102
757
(313)
-
Structures
5
-
-
(1)
Total
2,501,102
129,046
(14,588)
(146,866)
(5,109)
(8,348)
-
(328)
(7,481)
-
1,493,628
(333)
9,778
763
704,017
265
-
334
193,291
-
515
-
12,480
79,744
-
(19)
-
(5)
522
-
-
-
-
4
(13,457)
100
2,297
13,572
2,471,206
Woori Bank
Annual Report 2016
170
- 69 -
16.
INTANGIBLE ASSETS AND GOODWILL
(1)
Intangible assets are as follows (Unit: Korean Won in millions):
Acquisition cost
Accumulated amortization
Accumulated impairment losses
Net carrying value
Goodwill
124,803
-
-
124,803
Software
185,202
(149,725)
-
35,477
Acquisition cost
Accumulated amortization
Accumulated impairment losses
Net carrying value
Goodwill
103,525
-
-
103,525
Software
170,709
(132,538)
-
38,171
December 31, 2016
Industrial
property
rights
714
(401)
-
313
Industrial
property
rights
651
(307)
-
344
Development
cost
299,031
(160,335)
-
138,696
Others
622,540
(458,088)
(88)
164,364
Membership
deposit
26,884
-
(6,798)
20,086
Total
1,259,174
(768,549)
(6,886)
483,739
December 31, 2015
Development
cost
193,020
(141,663)
-
51,357
Others
605,821
(400,714)
(3,338)
201,769
Membership
deposit
30,024
-
(5,384)
24,640
Total
1,103,750
(675,222)
(8,722)
419,806
(2) Changes in intangible assets are as follows (Unit: Korean Won in millions):
Beginning balance
Acquisition
Disposal
Amortization
Impairment loss
Foreign currencies translation
adjustment
Acquisition through business
combination
Others
Ending balance
Goodwill
103,525
-
-
-
-
Software
38,171
8,708
-
(15,795)
-
7,338
16
7,857
6,083
124,803
162
4,215
35,477
Beginning balance
Acquisition
Disposal
Amortization
Impairment loss
Foreign currencies translation
adjustment
Others
Ending balance
Goodwill
107,541
-
-
-
-
Software
47,821
7,347
(189)
(16,809)
-
(4,016)
-
103,525
1
-
38,171
For the year ended December 31, 2016
Industrial
property
rights
Development
cost
Membership
deposit
51,357
92,969
-
(18,657)
-
Others
201,769
30,842
(23)
(57,803)
3,230
24,640
2,306
(3,785)
-
(1,585)
Total
419,806
134,889
(3,808)
(92,350)
1,645
-
853
50
8,257
-
13,027
138,696
-
(14,504)
164,364
43
(1,583)
20,086
8,062
7,238
483,739
For the year ended December 31, 2015
Industrial
property
rights
Development
cost
Membership
deposit
55,337
16,751
(1,500)
(19,233)
-
Others
60,807
196,139
(12)
(53,969)
(9)
2
-
51,357
(476)
(711)
201,769
23,894
2,510
-
-
(1,911)
147
-
24,640
Total
295,728
222,843
(1,701)
(90,092)
(1,920)
(4,341)
(711)
419,806
344
64
-
(95)
-
-
-
-
313
328
96
-
(81)
-
1
-
344
17. ASSETS HELD FOR SALE
Assets held for sale are as follows (Unit: Korean Won in millions):
Premises and equipment
December 31, 2016
2,342
December 31, 2015
17,904
- 70 -
Woori Bank
Annual Report 2016
171
18. ASSETS SUBJECT TO LIEN AND ASSETS ACQUIRED THROUGH FORECLOSURES
(1) Assets subjected to lien are as follows (Unit: Korean Won in millions):
Loan and receivables Due from banks in local
currency
Due from banks in foreign
currencies
Industrial and financial debt
December 31, 2016
Collateral given to
Samsung Securities and
others
Korea Investment &
Securities and others
Yuanta Securities and
Amount
24,589
227,249
Reason for collateral
Margin deposit for futures
and options and others
Foreign margin deposit for
future or option and others
Substitute securities and
Financial assets at
FVTPL
securities and others
others
473,476
others
AFS financial assets Korean treasury and
Korea Securities
government agencies bonds
Depository and others
2,546,683
Related to bonds sold under
repurchase agreements (*)
Financial institutions debt
securities and others
HTM financial assets Korean treasury and
The BOK and others
Korea Securities
government agencies bonds
Depository and others
836,522 Settlement risk and others
Related to bonds sold under
repurchase agreements (*)
7,133
Korean treasury and
government agencies bonds
and others
Lands and buildings
Loan and receivables Due from banks in local
currency
Due from banks in foreign
currencies
Industrial and financial debt
Financial assets at
FVTPL
The BOK and others
Credit Counselling &
Recovery Service and
others
6,185,295 Settlement risk and others
6,310 Leasehold rights and others
Total
10,307,257
December 31, 2015
Collateral given to
Samsung Securities and
others
Korea Investment &
Securities and others
Yuanta Securities and
Amount
30,438
452,860
Reason for collateral
Margin deposit for futures
and options and others
Foreign margin deposit for
future or option and others
Substitute securities and
securities and others
others
220,897
others
AFS financial assets Korean treasury and
Banco Bilbao Vizcaya
government agencies bonds
Argentaria
603,274
Related to bonds sold under
repurchase agreements (*)
Financial institutions debt
securities and others
HTM financial assets Korean treasury and
The BOK and others
Nomura Securities and
government agencies bonds
others
3,595,581 Settlement risk and others
139,340
Related to bonds sold under
repurchase agreements (*)
Korean treasury and
government agencies bonds
and others
Lands and buildings
The BOK and others
Credit Counselling &
Recovery Service and
others
4,657,667 Settlement risk and others
6,468 Leasehold rights and others
Total
9,706,525
(*) The Group enters into the repurchase agreements at predetermined price or original sale price added with
certain rate of return after the disposal of securities. In this regards, the securities are provided as
collaterals, and the purchasers are eligible to dispose or provide them as collateral. Therefore, as such
securities have been transferred but have not been derecognized, the Group recognizes the relevant
amount as liability (bond sold under repurchase agreements).
(2) The carrying amounts of buildings acquired through foreclosure are as follow (Unit: Korean Won in
millions):
Land
Building
Properties for business use
Total
December 31, 2016
4,138
1,852
202
6,192
December 31, 2015
28
596
-
624
- 71 -
Woori Bank
Annual Report 2016
172
(3) Loaned securities are as follows (Unit: Korean Won in millions):
December 31,
2016
December 31,
2015
Financial assets
at FVTPL
AFS financial
assets
Equity securities-listed stock
Korean treasury and
government agencies bonds
Total
4,459
10,313
493,579
498,038
720,010
730,323
Loaned to
Samsung Securities Co.,
Ltd. and others
Korea Securities
Depository and others
Securities loaned 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 recognized through such transactions relates to securities loaned.
(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, 2016 and 2015 are as follows (Unit: Korean Won in millions):
Securities
Fair values of collaterals
8,746,101
Fair values of collaterals were
disposed or re-subjected to lien
-
December 31, 2016
Securities
Fair values of collaterals
7,661,656
Fair values of collaterals were
disposed or re-subjected to lien
-
December 31, 2015
19. OTHER ASSETS
Details of other assets are as follows (Unit: Korean Won in millions):
Prepaid expenses
Advance payments
Non-operative assets
Others
Total
December 31, 2016
111,445
1,944
6,192
9,265
128,846
December 31, 2015
124,080
1,008
624
17,574
143,286
- 72 -
Woori Bank
Annual Report 2016
173
20. FINANCIAL LIABILITY AT FVTPL
Financial liability at FVTPL is composed of financial liabilities held for trading and financial liabilities
designated 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, 2016
3,036,478
766,880
3,803,358
December 31, 2015
2,605,699
854,862
3,460,561
(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, 2016
December 31, 2015
26,501
3,009,977
3,036,478
24,872
2,580,827
2,605,699
(3) Financial liabilities designated at FVTPL are as follows (Unit: Korean Won in millions):
Equity linked securities index:
Equity-linked securities in short position
Debentures:
Debentures in local currency
Total
December 31, 2016
December 31, 2015
673,906
92,974
766,880
758,011
96,851
854,862
(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, 2016
December 31, 2015
766,880
(819)
(15,790)
854,862
(542)
(15,016)
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
Difference
December 31, 2016
766,880
902,375
(135,495)
December 31, 2015
854,862
1,086,365
(231,503)
Woori Bank
Annual Report 2016
174
- 73 -
21. DEPOSITS DUE TO CUSTOMERS
Details of deposits due to customers 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, 2016
December 31, 2015
9,491,680
183,723,369
37,128
943,446
203,013
3,836,430
1,360,176
199,595,242
21,453,096
(27,927)
221,020,411
9,728,839
175,598,522
40,888
687,579
235,089
2,435,087
1,304,348
190,030,352
19,129,214
(17,740)
209,141,826
22. BORROWINGS AND DEBENTURES
(1) Details of borrowings as are as follows (Unit: Korean Won in millions):
December 31, 2016
Lenders
Interest rate (%)
Amount
Borrowings in local currency:
Borrowings from The BOK
Borrowings from government funds
Others
Sub-total
Borrowings in foreign currencies:
The Bank of Korea
Small and Medium Business
Corporation and others
Seoul Metropolitan Government and
others
Borrowings in foreign currencies
The Export-Import Bank of Korea
Offshore borrowings in foreign
currencies
Sub-total
Bills sold
Call money
Bonds sold under repurchase
agreements
Present value discount
Total
and others
Wells Fargo
Others
Bank and others
Other financial institutions
0.5 ~ 0.8
1,598,553
0.0 ~ 3.5
1,534,807
0.0 ~ 3.8
3,922,878
7,056,238
0.0 ~ 5.2
7,737,237
1.4
0.0 ~ 1.6
0.0 ~ 5.1
0.0 ~ 4.5
18,128
7,755,365
26,895
1,926,779
2,004,905
(667)
18,769,515
- 74 -
Woori Bank
Annual Report 2016
175
Borrowings in local currency:
Borrowings from The Bank of
Korea
Borrowings from government funds
Others
Sub-total
Borrowings in foreign currencies:
December 31, 2015
Lenders
Interest rate (%)
Amount
The Bank of Korea
Small and Medium Business
Corporation and others
The Korea Development Bank and
others
0.5 ~ 0.8
1,475,991
0.0 ~ 3.5
1,535,953
0.0 ~ 4.9
4,508,662
7,520,606
Borrowings in foreign currencies
The Export-Import Bank of Korea
and others
0.0 ~ 4.6
9,733,694
Offshore borrowings in foreign
currencies
Sub-total
Bills sold
Call money
Bonds sold under repurchase
agreements
Present value discount
Total
Zuercher Kantonalbank and others
Others
Bank and others
Other financial institutions
0.3 ~ 0.9
0.0 ~ 2.6
0.0 ~ 5.2
0.8 ~ 4.5
32,947
9,766,641
37,501
2,039,051
671,629
(1,511)
20,033,917
(2) Debentures are as follows (Unit: Korean Won in millions):
Face value of bond(*)
Ordinary bonds
Subordinated bonds
Other bonds
Sub-total
Discounts on bond
Total
December 31, 2016
December 31, 2015
Interest rate
(%)
1.5 ~ 11.8
3.0 ~ 12.6
17.0
Interest rate
(%)
0.2 ~ 12.0
3.4 ~ 13.0
17.0
Amount
18,268,403
5,327,335
4,006
23,599,744
(34,295)
23,565,449
Amount
16,868,054
5,055,311
4,006
21,927,371
(28,512)
21,898,859
(*) Included debentures under fair value hedge relationships are 3,610,193 million Won and 3,148,073
million Won as of December 31, 2016 and 2015, respectively.
Woori Bank
Annual Report 2016
176
- 75 -
23. PROVISIONS
(1) Details of provisions are as follows (Unit: Korean Won in millions):
Asset retirement obligation
Provision for guarantee (*1)
Provision for loan commitments
Provisions for customer reward credits
Other provisions (*2)
Total
December 31, 2016
58,076
238,117
87,909
22,093
22,282
428,477
December 31, 2015
39,121
364,141
85,313
5,445
22,581
516,601
(*1) Provision for guarantee includes provision for financial guarantee of 67,557 million Won and 77,322
million Won as of December 31, 2016 and 2015, 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 and others
Reversal of unused amount
Foreign currencies translation
adjustments
Transfer(*)
Others
Ending balance
For the year ended December 31, 2016
Provision for
guarantees
364,141
4,281
(80,017)
(64,061)
Provision for
loan
commitments
85,313
8,502
22
(5,409)
-
-
13,773
238,117
-
-
(519)
87,909
Provisions for
customer reward
credits
5,445
23,525
(8,158)
-
-
503
778
22,093
Other
provisions
22,581
8,034
(11,323)
-
2,990
-
-
22,282
Total
477,480
44,342
(99,476)
(69,470)
2,990
503
14,032
370,401
(*) As the credits of the affiliates were transferred to the group, the relevant allowance for the provisions for
customer reward credits increased, for the year ended December 31, 2016.
Beginning balance
Provisions provided
Provisions used and others
Reversal of unused amount
Others
Ending balance
For the year ended December 31, 2015
Provision for
guarantees
509,320
19,714
(25,262)
(160,032)
20,401
364,141
Provision for
loan
commitments
90,449
9,801
41
(14,976)
(2)
85,313
Provisions for
customer reward
credits
5,548
16,301
(16,404)
-
-
5,445
Other
provisions
56,959
51,997
(86,308)
(43)
(24)
22,581
Total
662,276
97,813
(127,933)
(175,051)
20,375
477,480
(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
Ending balance
For the year ended
December 31, 2016
For the year ended
December 31, 2015
39,121
2,034
(1,279)
464
(1)
17,737
58,076
29,733
1,742
(1,316)
394
(179)
8,747
39,121
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Woori Bank
Annual Report 2016
177
24. NET DEFINED BENEFIT LIABILITY
The characteristics of the Group‘s defined benefit retirement pension plans characteristics are as follows:
Employees and directors with one or more years of service are entitled to receive a payment upon termination of
their employment, based on their length of service and rate of pay at the time of termination. The assets of the
plans are measured at their fair value at the end of reporting date. 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 most significant
risks are as follows:
Volatility of asset
The defined benefit obligation was estimated with an interest rate
calculated based on the yield of high quality corporate bonds. A
deficit may occur if the rate of return of plan assets falls short of
the interest rate.
Decrease in profitability of high
quality corporate bonds
A decrease in profitability of high quality corporate bonds will be
offset by some increase in the value of debt securities that the
employee benefit plan owns but will bring an increase in the
defined benefit liabilities.
Risk of inflation
Defined benefit obligations are related to inflation rate; the higher
the inflation rate is, the higher the level of liabilities. Therefore,
deficit occurs in the system if an inflation rate increases.
(1) Details of net defined benefit liability(asset) are as follows (Unit: Korean Won in millions):
Defined benefit obligation
Fair value of plan assets
Net defined benefit liability(asset)
December 31, 2016
984,381
(990,653)
(6,272)
December 31, 2015
901,219
(801,528)
99,691
(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
Curtailment or settlement
Others
Ending balance
For the year ended
December 31, 2016
901,219
153,660
24,326
(52,402)
80
(34,346)
(9,536)
1,380
984,381
For the year ended
December 31, 2015
683,961
132,710
21,377
97,730
(8)
(26,516)
(8,231)
196
901,219
Woori Bank
Annual Report 2016
178
- 77 -
(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
Curtailment or settlement
Others
Ending balance
For the year ended
December 31, 2016
801,528
25,038
(7,304)
226,752
(33,341)
(9,198)
(12,822)
990,653
For the year ended
December 31, 2015
608,370
21,965
(5,444)
229,069
(22,860)
(8,240)
(21,332)
801,528
(4) Plan assets wholly consist of time deposits as of December 31, 2016 and 2015, respectively. Among plan
assets, realized returns on plan assets amount to 17,734 million Won and 16,521 million Won for the year
ended December 31, 2016 and 2015, 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
Gain and Loss on the curtailment or settlement
Cost recognized in net income
Remeasurements
Cost recognized in total comprehensive income
For the year ended
December 31, 2016
153,660
(712)
(339)
152,609
(45,098)
107,511
For the year ended
December 31, 2015
132,710
(588)
9
132,131
103,174
235,305
Retirement benefit service costs related to defined contribution plans are recognized 3,747 million Won and
3,623 million Won for the years ended December 31, 2016 and 2015, respectively.
(6) Key actuarial assumptions used in defined benefit liability assessment are as follows:
Discount rate
Future wage growth rate
Mortality rate
Retirement rate
December 31, 2016
2.85%
6.05%
Issued by Korea Insurance
Development Institute
Experience rate for each
employment classification
December 31, 2015
2.83%
6.35%
Issued by Korea Insurance
Development Institute
Experience rate for each
employment classification
(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, 2016 December 31, 2015
(101,026)
118,879
117,975
(101,900)
(107,203)
125,395
124,766
(108,344)
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Woori Bank
Annual Report 2016
179
25. OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES
Other financial liabilities and other liabilities are as follows (Unit: Korean Won in millions):
December 31, 2016
December 31, 2015
Other financial liabilities:
Accounts payable
Accrued expenses
Borrowings from trust accounts
Agency business revenue
Foreign exchange payables
Domestic exchange payables
Other miscellaneous financial liabilities
Present value discount
Sub-total
Other liabilities:
Unearned income
Other miscellaneous liabilities
Sub-total
Total
5,626,661
2,055,936
3,329,683
331,159
702,968
8,480,765
1,458,747
(833)
21,985,086
171,050
128,326
299,376
22,284,462
5,586,031
1,901,204
4,476,396
415,776
708,267
2,082,472
1,795,256
(1,196)
16,964,206
171,649
133,525
305,174
17,269,380
26. DERIVATIVES
(1) Derivative assets and derivative liabilities are as follows (Unit: Korean Won in millions):
December 31, 2016
Assets
Notional
Amount
Fair value
Hedge
For trading
Liabilities
Fair value
hedge
For trading
Interest rate:
Interest rate futures
Interest rate swaps
Long interest rate option
Short interest rate option
54,785
118,582,511
860,000
1,035,000
-
139,832
-
-
Currency:
Currency futures
Currency forward
Currency swaps
Long currency option
Short currency option
Stock:
Stock futures
Stock swaps
Long stock option
Short stock option
Others:
Other futures
Other swaps
Long other option
Short other option
Total
493,733
62,539,094
39,782,049
1,120,949
907,211
926,392
15,000
3,007,969
4,460,233
5,105
7,918
8,307
64,352
233,870,608
-
-
-
-
-
-
-
745
-
-
-
-
-
140,577
-
470,057
21,172
-
-
1,265,852
1,022,969
42,126
-
-
92
73,261
-
-
2,645
121
-
2,898,295
-
7,013
-
-
-
-
-
-
-
-
-
-
208
-
-
-
-
7,221
-
509,686
-
21,863
-
1,015,380
1,221,959
-
8,589
-
88
-
228,900
-
2,331
-
1,181
3,009,977
Woori Bank
Annual Report 2016
180
- 79 -
December 31, 2015
Assets
Liabilities
Notional
Amount
Fair value
hedge
For trading
For trading
Interest rate:
Interest rate swaps
Long interest rate option
Short interest rate option
111,633,234
881,679
1,086,679
180,378
-
-
Currency:
Currency futures
Currency forward
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
Long other option
Short other option
Total
423,877
56,298,910
27,070,835
1,657,911
1,366,459
169,785
10,000
682,358
2,410,815
1,100
125
78,882
41,097
142,259
203,956,005
-
-
-
-
-
-
-
2,750
-
-
-
-
-
-
183,128
923,712
13,961
-
-
759,838
617,777
63,498
-
-
-
444
-
-
-
5,363
5,904
-
2,390,497
959,347
-
15,164
-
475,646
949,921
-
13,530
-
6
-
155,386
-
39
4,781
-
7,007
2,580,827
Derivatives held for trading purpose are classified into financial assets or liabilities at FVTPL (see Notes 7 and
20) and derivatives for hedging are stated as a separate line item in the consolidated statements of financial
position.
(2) Gains or losses from valuation of financial instruments under hedge accounting are as follows (Unit: Korean
Won in millions):
Losses from hedged items
Gains from hedging instruments
27. DEFERRED DAY 1 PROFIT OR LOSS
For the year ended
December 31, 2016
For the year ended
December 31, 2015
98,827
(98,851)
(31,297)
38,021
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
Ending balance
For the year ended
December 31, 2016
For the year ended
December 31, 2015
28,008
1,337
(15,923)
13,422
13,499
26,762
(12,253)
28,008
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.
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Woori Bank
Annual Report 2016
181
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
Capital stock
December 31, 2016
5,000,000,000 Shares
5,000 Won
676,000,000 Shares
3,381,392 million
Won
December 31, 2015
5,000,000,000 Shares
5,000 Won
676,000,000 Shares
3,381,392 million
Won
(2) Changes in numbers of issued shares of common stock are as follows (Unit: Shares):
Beginning balance
Retirement of treasury stock
Ending balance
December 31, 2016
December 31, 2015
676,000,000
-
676,000,000
676,278,371
(278,371)
676,000,000
(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, 2016
December 31, 2015
269,533
16,798
286,331
269,533
24,726
294,259
29. HYBRID SECURITIES
The bond-type hybrid securities classified as owner‘s equity are as follows (Unit: Korean Won in millions):
Issue date
Maturity
Interest rate (%)
June 20, 2008
November 22, 2011
March 8, 2012
April 25, 2013
November13, 2013
December 12, 2014
June 3, 2015
June 20, 2038
November 22, 2041
March 8, 2042
April 25, 2043
November 13, 2043
December 12, 2044
June 3, 2045
May 2, 2007
June 10, 2015
September 27,2016
May 2, 2037
June 10, 2045
September 27, 2046
7.7
5.9
5.8
4.4
5.7
5.2
4.4
6.2
5.0
4.5
Securities in local
currency
Securities in foreign
currencies
Issuance cost
Total
December
31, 2016
December
31, 2015
255,000
-
190,000
500,000
200,000
160,000
240,000
255,000
310,000
190,000
500,000
200,000
160,000
240,000
930,900
559,650
553,450
(14,104)
3,574,896
930,900
559,650
-
(11,548)
3,334,002
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.
Woori Bank
Annual Report 2016
182
- 81 -
30. OTHER EQUITY
(1) Details of other equity are as follows (Unit: Korean Won in millions):
Accumulated other comprehensive income:
Gain on valuation of AFS financial assets
Share of other comprehensive income of joint
ventures and associates
Loss on foreign currencies translation of foreign
operations
Remeasurement of the net defined benefit liability
Cash flow hedges
Sub-total
Treasury shares
Other capital adjustments
Total
December 31, 2016
December 31, 2015
386,981
(1,863)
(48,353)
(163,397)
-
173,368
(34,113)
(1,607,280)
(1,468,025)
374,685
6,074
(70,789)
(197,579)
(10,371)
102,020
(34,113)
(1,615,210)
(1,547,303)
(2) Changes in the accumulated other comprehensive income are as follows (Unit: Korean Won in millions):
Gain (loss) on valuation of 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
For the year ended December 31, 2016
Beginning
balance
Increase
(decrease) on
valuation
Reclassification
(*)
Income tax
effect
Ending
balance
374,685
114,617
(101,647)
(674)
386,981
6,074
(9,274)
(70,789)
30,368
-
-
1,337
(1,863)
(7,932)
(48,353)
(197,579)
(10,371)
102,020
45,096
10,371
191,178
-
-
(101,647)
(10,914)
-
(18,183)
(163,397)
-
173,368
For the year ended December 31, 2015
Increase
(decrease) on
valuation(*)
Reclassification
(*)
Income tax
effect
Ending
balance
Beginning
balance
Gain (loss) on valuation of 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
300,994
190,842
(101,439)
(15,712)
374,685
2,779
4,409
(107,721)
49,421
-
-
(1,114)
6,074
(12,489)
(70,789)
(119,375)
(10,371)
66,306
(102,467)
-
142,205
-
-
(101,439)
24,263
-
(5,052)
(197,579)
(10,371)
102,020
(*) For the change in gain (loss) on valuation of AFS financial assets, ―reclassification‖ is disposal
or recognition of impairment losses on AFS financial assets.
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Woori Bank
Annual Report 2016
183
31. RETAINED EARNINGS
(1) Details of retained earnings are as follows (Unit: Korean Won in millions):
Legal reserve Legal reserve
Other legal reserve
Sub-total
Voluntary
reserve
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, 2016
1,622,754
44,634
1,667,388
December 31, 2015
1,528,754
43,132
1,571,886
8,000
235,400
7,073,104
2,255,252
753,908
11,700
10,337,364
2,606,814
14,611,566
8,000
235,400
7,249,104
1,756,142
760,366
11,700
10,020,712
2,133,524
13,726,122
In accordance with the Banking Act, 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 Restriction of Special Taxation Act, the Group was previously required to appropriate, as
a reserve for business rationalization, amounts equal to tax reductions arising from tax exemptions and
tax credits up to December 31, 2001. The requirement was no longer effective from 2002.
iv. Reserve for financial structure improvement
From 2002 to 2014, 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
tangible common equity ratio equals 5.5 percent. But this reserve is not available for payment of cash
dividends; however, it can be used to reduce a deficit or be transferred to capital. The reserve and
appropriation is an Autonomous judgment matter of the Group since 2015.
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 Group discloses such shortfall 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.
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Woori Bank
Annual Report 2016
184
(2) Changes in retained earnings are as follows (Unit: Korean Won in millions):
Beginning balance
Net income attributable to owners
Dividends on common stock
Dividends on hybrid securities
Appreciation of merger losses
Repayment of hybrid securities
Retirement of treasury stock
Ending balance
For the years ended December 31
2016
13,726,122
1,261,266
(168,317)
(206,515)
-
(990)
-
14,611,566
2015
14,165,358
1,059,157
(504,952)
(183,320)
(806,640)
-
(3,481)
13,726,122
32. REGULATORY RESERVE FOR CREDIT LOSS
In accordance with Paragraph 1 and 2 of Article 29 of the Regulation on the 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 Group shall disclose the difference as the planned
regulatory reserve for credit loss.
(1) Balance of the planned regulatory reserve for credit loss is as follows (Unit: Korean Won in millions):
Beginning balance
Planned provision of regulatory reserve
for credit loss
Ending balance
For the years ended December 31
2016
2,255,252
182,939
2,438,191
2015
1,756,142
499,110
2,255,252
(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
Provision (reversal) of regulatory reserve for credit loss
Adjusted net income after the provision of regulatory reserve
Adjusted EPS after the provision of regulatory reserve
(Unit: Korean Won)
1,277,533
182,939
1,094,594
1,320
1,075,392
499,110
576,282
584
For the years ended December 31
2016
2015
33. DIVIDENDS
The Group‘s dividends for the year ended December 31, 2016 and 2015 are 400 Won and 250 Won per share,
respectively, and the total dividend amount to 269,308 million Won and 168,317 million Won, respectively. The
Group paid out 168,317 million Won (250 Won per share) as an interim dividend during the year ended
December 31, 2015.
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Woori Bank
Annual Report 2016
185
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
2015
2016
63,408
339,518
360,054
75,021
7,635,791
38,520
7,749,332
8,512,312
63,143
389,443
418,065
81,117
7,700,475
45,992
7,827,584
8,698,235
(2)
Interest expense recognized are as follows (Unit: Korean Won in millions):
Interest on deposits due to customers
Interest on borrowings
Interest on debentures
Other interest expense
Total
For the years ended December 31
2015
2016
2,547,142
215,240
619,255
111,131
3,492,768
2,888,529
216,743
707,772
123,291
3,936,335
Woori Bank
Annual Report 2016
186
- 85 -
35. NET FEES AND COMMISSIONS INCOME
(1) Fees and commissions income recognized are as follows (Unit: Korean Won in millions):
Fees and commissions received (*)
Fees and commissions received for provision of
guarantee
Fees and commissions received on project financing
Fees and commissions received on credit card
Fees and commissions received on securities
Other fees and commissions received
Total
For the years ended December 31
2016
660,556
66,549
20,213
954,502
70,928
92,722
1,865,470
2015
676,114
78,922
15,521
852,250
67,692
66,841
1,757,340
(*) Fees and commissions received include agency commissions, fee income from electronic finance, fee
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
2016
2015
162,170
760,913
739
4,517
928,339
133,909
643,524
615
2,496
780,544
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
2016
996
183,514
184,510
2015
1,217
101,706
102,923
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Annual Report 2016
187
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 on financial assets held for trading
Gains (losses) of financial assets designated at FVTPL
Total
For the years ended December 31
2016
185,786
(71,399)
114,387
2015
171,137
69,205
240,342
(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
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 of financial assets at FVTPL
Derivatives
(for trading)
Interest rates
derivatives
Gain on transactions
and valuation
Currencies
derivatives
Loss on transactions
and valuation
Sub-total
Gain on transactions
and valuation
Loss on transactions
and valuation
Sub-total
Equity
Gain on transactions
derivatives
and valuation
Loss on transactions
and valuation
Sub-total
Other
Gain on transactions
derivatives
and valuation
Loss on transactions
and valuation
Sub-total
Total of derivatives(for trading)
Total
For the years ended December 31
2016
2015
9,323
24,509
(12,681)
(11,524)
9,627
13,628
2,404
(14,033)
(1,644)
355
9,982
7,735
32,780
(13,663)
(22,771)
4,081
10,195
442
(10,189)
(208)
240
4,321
1,423,606
1,240,353
(1,401,582)
22,024
(1,251,673)
(11,320)
5,804,420
4,241,317
(5,683,357)
121,063
(3,987,856)
253,461
293,657
92,400
(259,280)
34,377
(166,528)
(74,128)
50,139
54,322
(51,799)
(1,660)
175,804
185,786
(55,519)
(1,197)
166,816
171,137
Woori Bank
Annual Report 2016
188
- 87 -
(3) Details of gains or losses on financial assets designated at FVTPL are as follows (Unit: Korean Won in
millions):
Gain (loss) on equity-linked securities
Gain (loss) on disposals of equity-linked securities
Gain on valuation of equity-linked securities
Sub-total
Gain (loss) on other securities:
Loss on disposals of other securities
Gain on valuation of other securities
Sub-total
Gain(loss) on other financial instruments:
Gain on valuation of other financial instruments
Total
For the years ended December 31
2015
2016
(24,165)
(52,007)
(76,172)
14
882
896
3,877
(71,399)
(22,363)
89,863
67,500
(62)
1,027
965
740
69,205
38. GAINS (LOSSES) ON AFS FINANCIAL ASSETS
Gains (losses) on AFS financial assets 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
2015
2016
721
47,985
(49,741)
(1,035)
1,089
130,457
(134,827)
(3,281)
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):
Impairment losses due to credit loss
Reversal of provision on guarantee
Provision for (reversal of provision on) loan commitment
Total
For the years ended December 31
2016
(890,763)
59,780
(3,093)
(834,076)
2015
(1,112,139)
140,318
5,175
(966,646)
- 88 -
Woori Bank
Annual Report 2016
189
40. OTHER NET OPERATING INCOMES (EXPENSES)
(1) Administrative expenses recognized are as follows (Unit: Korean Won in millions):
Employee benefits
Short term
employee benefits
Retirement benefit service costs
Termination
Salaries
Employee benefits
Sub-total
Depreciation and amortization
Other general
and administrative
expenses
Rent
Taxes and dues
Service charges
Computer and IT related
Telephone and communication
Operating promotion
Advertising
Printing
Traveling
Supplies
Insurance premium
Reimbursement
Maintenance
Water, light and heating
Vehicle maintenance
Others
Sub-total
Total
For the years ended December 31
2016
2015
1,323,007
466,585
156,356
179,286
2,125,234
248,269
311,992
102,531
244,543
83,978
63,699
48,115
76,153
9,502
11,681
6,827
8,092
26,846
16,470
15,006
9,987
69,551
1,104,973
3,478,476
1,262,786
381,283
135,754
73,119
1,852,942
236,958
295,871
103,580
233,860
100,026
60,880
46,638
58,914
10,249
9,601
6,822
7,236
23,779
14,565
15,205
10,400
62,861
1,060,487
3,150,387
(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
2016
2015
4,791,772
204,239
130
99,302
112,079
5,207,522
3,352,318
186,939
59,003
25,235
158,806
3,782,301
(*) Other income includes such incomes amounting to 74,700 million Won and 137,187 million Won for
the year ended December, 2016 and 2015, respectively, that the Group recognized for it is to receive
from other creditor financial institutions in accordance with the creditor financial institutions committee
agreement.
(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
2016
2015
4,706,055
298,804
295,601
4,265
98,981
475
171,120
5,575,301
3,429,638
266,031
343,703
43,266
20,982
56,532
232,210
4,392,362
(*) Other expense includes such expenses amounting to 109,063 million Won and 154,897 million Won for
the year ended December 31, 2016 and 2015, respectively, that the Group recognized for it is to carry
out a payment to other creditor financial institutions in accordance with the creditor financial
institutions committee agreement.
- 89 -
Woori Bank
Annual Report 2016
190
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
2016
2015
36,757
(55,091)
(1,173)
(19,507)
41,363
(55,176)
(56,311)
(70,124)
(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
2016
2015
132,272
(133,582)
`(1,310)
272,610
(102,126)
170,484
(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
2016
2015
7,291
23,457
1,885
3,581
96,058
132,272
8,225
61,653
6,814
539
195,379
272,610
(*) Other income includes such incomes amounting to 132,784 million Won for the year ended December
31, 2016 that the Group received in accordance with the final irrevocable verdict for the payment of
commitment (Note 44).
(4) Other non-operating expenses recognized are as follows (Unit: Korean Won in millions):
For the years ended December 31
2016
2015
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
3,762
496
15,060
9,718
1,936
43,939
58,671
133,582
3,806
688
10
2,707
2,990
46,266
45,659
102,126
- 90 -
Woori Bank
Annual Report 2016
191
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 directly to equity
Sub-total
Income tax expense
For the years ended December 31
2016
2015
332,996
(22,138)
310,858
(18,766)
(16,236)
(35,002)
275,856
362,552
(27,038)
335,514
44,884
(3,844)
41,040
376,554
(2)
Income tax expense can be reconciled to net income before income tax expense as follows (Unit: Korean
Won in millions):
Net income before income tax expense
Tax calculated at statutory tax rate (*)
Adjustments
Effect of income that is exempt from taxation
Effect of expense not deductible in determining taxable
profit
Adjustments recognized in the current period in relation to
the current tax of prior periods
Others
Sub-total
Income tax expense
Effective tax rate
For the years ended December 31
2016
1,553,389
375,458
2015
1,451,946
350,909
(75,166)
13,664
(22,138)
(15,962)
(99,602)
275,856
(56,247)
50,152
(27,038)
58,778
25,645
376,554
Effective tax rate for continuing operations
17.8%
25.9%
(*) The 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.
Woori Bank
Annual Report 2016
192
- 91 -
(3) Deferred tax charged direct to equity is as follows (Unit: Korean Won in millions):
Gain on financial assets at FVTPL
Gain (loss) on AFS 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
Others
Net deferred tax assets
Gain on financial assets at FVTPL
Loss on AFS financial assets
Gain (loss) on valuation using the
equity method of accounting
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
Others
Net deferred tax assets
For the year ended December 31, 2016
Beginning
balance
445,729
(121,536)
Recognized as
income (loss)
(18,524)
57
Recognized as
other
comprehensive
income (loss)
-
(666)
5,106
(39,774)
(82,148)
(50,504)
54,225
(103,912)
203,423
(187,044)
69,225
27,898
(29,470)
191,218
26,500
(4,079)
12,188
3,693
(310)
(4,190)
32,536
(39,277)
(28,087)
4,494
50,001
35,002
1,337
-
-
-
-
-
(10,914)
-
-
-
(5,993)
(16,236)
For the year ended December 31, 2015
Beginning
balance
422,910
(105,556)
Recognized as
income (loss)
22,819
94
Recognized as
other
comprehensive
income (loss)
-
(16,074)
21,156
(48,438)
(75,094)
(59,428)
6,921
(88,476)
151,666
(135,474)
84,530
37,029
24,355
236,101
(14,936)
8,664
(7,054)
8,924
47,304
(15,436)
26,912
(51,570)
(15,305)
(9,131)
(42,324)
(41,039)
(1,114)
-
-
-
-
-
24,845
-
-
-
(11,501)
(3,844)
Ending
balance
427,205
(122,145)
32,943
(43,853)
(69,960)
(46,811)
53,915
(108,102)
225,045
(226,321)
41,138
32,392
14,538
209,984
Ending
balance
445,729
(121,536)
5,106
(39,774)
(82,148)
(50,504)
54,225
(103,912)
203,423
(187,044)
69,225
27,898
(29,470)
191,218
- 92 -
Woori Bank
Annual Report 2016
193
(4) Unrealizable temporary differences are as follows (Unit: Korean Won in millions):
Deductible temporary differences
Unused tax losses
Taxable temporary differences
Total
December 31, 2016
224,452
192,138
(868,541)
(451,951)
December 31, 2015
224,452
233,687
(740,860)
(282,721)
(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 income (loss) of jointly
controlled entities and associates
Gain on foreign operations translation
Remeasurements
Total
December 31, 2016
(113,161)
December 31, 2015
(112,495)
950
16,930
51,661
(43,620)
(387)
22,923
62,575
(27,384)
(6) Current tax assets and liabilities are as follows (Unit: Korean Won in millions):
Current tax assets
Current tax liabilities
December 31, 2016
6,229
171,192
December 31, 2015
6,782
108,943
(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, 2016
232,007
22,023
209,984
December 31, 2015
210,597
19,379
191,218
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):
For the years ended December 31
2016
2015
Net income attributable to common shareholders
Dividends to hybrid securities
Net income attributable to common shareholders
Weighted average number of common shares outstanding
Basic Earnings Per Share
1,261,266
(206,515)
1,054,751
673 million shares
1,567
1,059,157
(183,320)
875,837
673 million shares
1,301
Diluted EPS is equal to basic EPS because there is no dilution effect for the year ended December 31, 2016
and 2015.
Woori Bank
Annual Report 2016
194
- 93 -
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, 2016
December 31, 2015
79,566
504,354
97,606
7,588,661
8,270,187
397,588
3,844,345
859,768
5,101,701
1,389,896
108,176
618,365
100,084
8,242,622
9,069,247
422,812
4,258,672
1,949,571
6,631,055
1,615,141
(2) Details of loan commitments and others are as follow (Unit: Korean Won in millions):
Loan commitments
Other commitments
(3) Litigation case
December 31, 2016
December 31, 2015
83,795,496
4,840,593
88,211,580
5,371,320
1) The Group had filed and faced lawsuits as follows (Unit: Korean Won in millions except for number of
cases):
Number of cases
Amount of litigation
Allowance for litigations
December 31, 2016
December 31, 2015
As plaintiff
88 cases
308,848
As defendant
175 cases
246,465
5,946
As plaintiff
130 cases
350,899
As defendant
269 cases
190,219
4,872
2) 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 Group recognized 132,784 million Won, as gain for the year ended December 31, 2015, in
accordance with K-IFRS 1037 Provisions, Contingent liabilities and Contingent assets.
(4) Other
The Group operates Korean Won currency settlement service as for commercial trade settlements between Korea
and Iran. In accordance with the submission request of information from U.S. prosecutors (U.S. Federal
Prosecutors and Prosecutors of the New York State), the Group is currently performing its own internal
investigation to confirm if the Group is meeting the requirements on sanction of U.S. Government in respect of
its service operation. As at the end of December 31, 2016, the Group believes that it cannot make reasonable
estimation due to possible results from such investigation.
- 94 -
Woori Bank
Annual Report 2016
195
45. RELATED PARTY TRANSACTIONS
Related parties of the Group and assets and liabilities recognized and major transactions with related parties
during the current and prior periods are as follows:
(1) Related parties
Corporation that have
significant influence
over the group (*)
KDIC
Related parties
Joint ventures
Woori Renaissance Holdings
Associates
Kumho Tires Co., Inc., Woori Blackstone Korea Opportunity Private Equity Fund No.1,
Korea Woori Service Networks Co., Ltd., Korea Credit Bureau Co., Ltd., Korea Finance
Security Co., Ltd., Chin Hung International Inc.,
Poonglim Industrial Co., Ltd., STX Engine Co., Ltd., Samho International Co., Ltd., Force
TEC Co., Ltd., STX Corporation, Woori Columbus 1st Private Equity Fund, 2016KIF-IMM
Woori Bank Technology Venture Fund, K BANK Co.,Ltd., and Others (Dongwoo C & C
Co., Ltd. and other 14 associates)
(*) During the year ended December 31, 2016, KDIC sold portion of its ownership interests in the Group, and
became the investor with significant influence over the Group.
(2) Assets and liabilities from transactions with related parties are as follows (Unit: Korean Won in millions):
Related party
KDIC
Corporation that have
significant influence
over the group
A title of account
Loans
Other assets
Deposits due to customers
Other liabilities
December 31,
2016
December 31,
2015
9
270,041
1,894,631
15,568
30
510,193
930,231
9,812
Joint ventures
Woori Renaissance
Other assets
-
2,416
Holdings
Associates
Kumho Tires Co., Ltd.
Loans
Allowance for credit loss
Deposits due to customers
Other liabilities
299,523
(715)
45,957
50
280,333
(553)
67,815
116
Woori Blackstone
Korea Opportunity
Private Equity Fund
No.1
Woori Service Networks
Co., Ltd.
Korea Credit Bureau
Co., Ltd.
Korea Finance Security
Co., Ltd.
United PF 1st Corporate
Financial Stability (*1)
Other assets
Other liabilities
Loans
Deposits due to customers
Other liabilities
Loans
Deposits due to customers
Other liabilities
Loans
Deposits due to customers
Other liabilities
Deposits due to customers
34
306
29
2,572
393
2
5,069
40
55
2,801
6
-
175
934
27
3,821
381
7
9,038
54
51
1,468
7
20
Chin Hung International
Inc.
Loans
Allowance for credit loss
4,320
(4,287)
5,499
(4,768)
- 95 -
Woori Bank
Annual Report 2016
196
Associates
Related party
Poonglim Industrial Co.,
Ltd.
STX Engine Co., Ltd.
Samho International Co.,
Ltd.
Force TEC Co., Ltd.
A title of account
Deposits due to customers
Other liabilities
Loans
Allowance for credit loss
Deposits due to customers
Other liabilities
Loans
Allowance for credit loss
Deposits due to customers
Other liabilities
Loans
Allowance for credit loss
Deposits due to customers
Other liabilities
Loans
Allowance for credit loss
Deposits due to customers
Other liabilities
Hana Engineering &
Construction Co., Ltd.
(*2)
Loans
Allowance for credit loss
Deposits due to customers
STX Corporation
Osung LST Co., Ltd.
(*2)
Loans
Allowance for credit loss
Deposits due to customers
Other liabilities
Loans
Allowance for credit loss
Deposits due to customers
Other liabilities
Ilyang Construction Co.,
Ltd. (*2)
Loans
Allowance for credit loss
Woori Columbus 1st
Private Equity Fund
Other assets
K BANK Co.,Ltd.
Other assets
Others (*3)
Loans
Allowance for credit loss
Other assets
Deposits due to customers
Other liabilities
December 31,
2016
December 31,
2015
14,047
279
-
-
283
-
107,974
(89,531)
13,260
588
37,327
(717)
82,917
216
-
-
-
-
-
-
-
144,035
(92,643)
14,412
90
-
-
-
-
-
-
-
325
619
(253)
8
4,460
60
1,378
223
1,557
(1,557)
7,906
5
120,706
(25,665)
5,167
608
43,484
(5,883)
96,281
990
28,562
(6,252)
355
1,207
71
(71)
38
151,829
(19,186)
13,643
221
5,639
(338)
983
2
838
(215)
546
-
-
-
-
-
-
(*1) As the Group lost significant influence over United PF 1st Corporate Financial Stability during the year ended
December 31, 2016, the entity was excluded from the investment in associates.
(*2) As the Group sold its ownership interests in the entities during the year ended December 31, 2016, these entities
were excluded from the investment in associates.
(*3) Others include Kyesan Engineering Co., Ltd., Good Software Lab Co., Ltd., Dongwoo C&C Co., Ltd.,
Heungjiwon Co., Ltd., Saman Corporation, Deokwon Food Co., Ltd. and QTS Shipping Co., Ltd., SJCO Co. Ltd.,
Woori Growth Partnerships New Technology Private Equity Fund, and DAEA SNC Co. Ltd.
- 96 -
Woori Bank
Annual Report 2016
197
(3) Gain or loss from transactions with related parties are as follows (Unit: Korean Won in millions):
Related party
KDIC
Corporation that have
significant influence
over the group
Associates
Kumho Tires Co., Ltd.
Woori Blackstone
Korea Opportunity
Private Equity Fund
No.1
Woori Service
Networks Co., Ltd.
A title of account
Interest income
Interest expenses
Impairment losses due to
credit loss
Interest income
Fees income
Interest expenses
Impairment losses due to
credit loss (reversal of
allowance for credit loss)
Fees income
Other income
Interest expenses
Fees expenses
Other expenses
Impairment losses due to
credit loss
Korea Credit Bureau
Co., Ltd.
Interest expenses
Fees expenses
Korea Finance Security
Co., Ltd.
Chin Hung
International Inc.
Poonglim Industrial
Co., Ltd.
STX Engine Co., Ltd.
Samho International
Co., Ltd.
Force TEC Co., Ltd.
Interest expenses
Fees expenses
Reversal of allowance for
credit loss
Interest income
Fees income
Interest expenses
Reversal of allowance for
credit loss
Interest expenses
Reversal of allowance for
credit loss
Interest income
Fees income
Interest expenses
Impairment losses due to
credit loss
Interest income
Fees income
Interest expenses
Reversal of allowance for
credit loss
Interest income
Impairment losses due to
credit loss (reversal of
allowance for credit loss)
- 97 -
For the years ended
December 31
2016
11,778
20,966
2015
22,237
23,584
-
2,430
6
68
162
1,364
29
49
985
222
-
138
1,915
10
110
-
240
1
28
(481)
2
29
2,698
6
205
(2,353)
1,437
28
83
821
228
2
74
1,690
39
93
(3)
807
1
35
(534)
11
(1,557)
(1,565)
1,348
58
97
1,358
67
46
63,866
20,524
916
5
525
1,015
3
981
(5,166)
(2,098)
153
-
249
5,900
Woori Bank
Annual Report 2016
198
Associates
Related party
Hana Engineering &
Construction Co., Ltd.
(*1)
STX Corporation
A title of account
Reversal of allowance for
credit loss
Interest income
Fees income
Interest expenses
Impairment losses due to
credit loss (reversal of
allowance for credit loss)
For the years ended
December 31
2016
2015
-
1,039
75
7
(98)
1,729
89
6
73,457
(4,060)
Osung LST Co., Ltd.
(*1)
Interest income
Interest expenses
Reversal of allowance for
credit loss
Woori Columbus 1st
Private Equity Fund
Fees income
Ilyang Construction
Impairment losses due to
Co., Ltd.(*1)
credit loss
K BANK Co.,Ltd.
Fees income
Other income
Others(*2)
Interest expenses
Impairment losses due to
credit loss
170
1
(338)
308
-
296
1,638
17
253
226
16
(223)
546
215
-
-
-
-
(*1) As the Group sold its ownership interests in the entities during the year ended December 31, 2016, these entities
were excluded from the investment in associates.
(*2) Others include Kyesan Engineering Co., Ltd., Good Software Lab Co., Ltd., Dongwoo C&C Co., Ltd., The Base
Enterprise Co., Ltd., Saman Corporation, Deokwon Food Co., Ltd., QTS Shipping Co., Ltd., Woori Growth
Partnerships New Technology Private Equity Fund and DAEA SNC Co., Ltd.
- 98 -
Woori Bank
Annual Report 2016
199
(4) Guarantees provided to the related parties are as follows (Unit: Korean Won in millions):
KDIC
Kumho Tires Co., Ltd.
Korea Finance Security Co., Ltd.
Korea Credit Bureau Co., Ltd.
Woori Service Networks Co., Ltd.
Chin Hung International Inc.
STX Engine Co., Ltd.
SamHo Co., Ltd.
Force TEC Co., Ltd.
STX corporation
December 31, 2016 December 31, 2015
1,500,000
24,187
126,435
205
33
171
40,904
63,103
685
30,083
-
24,316
71
1,500,470 Loan commitment
11,623 Letter of credit and others
143,756 Loan commitment
209 Loan commitment
28 Loan commitment
173 Loan commitment
40,847 Loan commitment
74,135 Letter of credit and others
13,019 Loan commitment
28,976 Loan commitment
5,954 Loan commitment
23,235 Letter of credit and others
9,131 Loan commitment
(*) For the guarantee provided to the related parties, the Group recognized provisions for guarantees amounting to
70,587 million Won and 10,122 million Won, respectively, as of December 31, 2016 and December 31, 2015.
(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
2015(*)
2016
9,523
424
9,947
10,288
473
10,761
(*) As the scope of the compensation for key management disclosure has changed, the comparative
amounts are restated.
Key management includes registered executives and non-registered executives. Outstanding assets and
liabilities from transactions with key management amount to 913 million Won and 4,204 million Won,
respectively, as of December 31, 2016. With respect to the assets, the Group has not recognized any
allowance, nor provision.
Woori Bank
Annual Report 2016
200
- 99 -
46. TRUST ACCOUNTS
(1) Trust accounts of the Group are as follows (Unit: Korean Won in millions):
Total assets
Operating income
December 31,
2016
38,807,666
December 31,
2015
34,135,580
For the year ended
December 31, 2016
751,691
For the year ended
December 31, 2015
784,155
Trust accounts
(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
December 31, 2016
December 31, 2015
23,667
18,704
Borrowings from trust accounts
2,687,776
3,794,847
(3) Significant transactions between the Group and trust accounts are as follows (Unit: Korean Won in
millions):
Revenue
Trust fees
Expense
Interest expenses on borrowings
from trust accounts
For the years ended December 31
2016
2015
78,616
45,012
51,322
60,329
(4) Principal guaranteed trusts and principal and fixed rate of return guaranteed trusts.
1) As of December 31, 2016 and 2015, the carrying of principal guaranteed trusts and principal and fixed
rate of return guaranteed trusts are as follows (Unit: Korean Won in millions):
December 31, 2016
December 31, 2015
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
4,513
532,959
741,759
53,773
8,536
2,919
1,344,459
19
787
806
1,345,265
5,235
523,544
681,868
64,921
8,540
3,376
1,287,484
19
782
801
1,288,285
2) As of December 31, 2016 and 2015, 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 Group account
(subsidy for trust account adjustment)
December 31, 2016
December 31, 2015
30
26
- 100 -
Woori Bank
Annual Report 2016
201
47. 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 of its subsidiaries. Kwangju Bank
and Kyongnam Bank were demerged as of May 1, 2014, and Woori Investment & Securities, Woori Aviva Life
Insurance, Woori Savings Bank, Woori Asset Management, Woori Financial and Woori F&I were disposed of in
due order during the period from March 2014 to June 2014,.
With respect to the privatization of Woori Bank, the PFOC announced a plan on the merger between Woori
Finance Holdings Co., Ltd (―Holding Company‖) and Woori Bank and on the disposal of controlling and non-
controlling interests (30% of ownership and 26.97% of ownership, respectively) of Woori Bank after newly
listing its shares on the stock exchange. Pursuant to the plan, the Group merged with the Holding Company as of
November 1, 2014, and was listed on Korea Stock Exchange on November 19, 2014.
On November 28, 2014, Korea Deposit Insurance Corporation (―KDIC‖) commenced the bidding to dispose of
controlling and non-controlling interests of the Group. With the successful bidding for non-controlling interests
only, KDIC‘s ownership of the Group decreased from 56.97% to 51.04%. Further, KDIC‘s ownership of the
Group was changed to 51.06% due to retirement of treasury stocks on October 2015.
On July 21, 2015, the PFOC, a deliberative body in charge of privatizing Woori Bank, held a meeting to discuss
the means to promote the privatization plan. PFOC thereby announced a plan to maximize the retrieval of public
fund that was initially invested and to sell the controlling shares to the investors (―oligopolistic shareholders‖), in
an effort to promote the early privatization and development of financial industry.
On October 2, 2015, Financial Services Commission (―FSC‖) announced the amendment on normalization of
business memorandum of understanding (―MOU‖) in an effort to promote corporate value through enhanced
managerial autonomy of the Group. FSC subsequently made amendments to the Enforcement Decree of the
Special Act on the Management of Public Funds on March 29, 2016.
In addition, on August 22, 2016, PFOC announced a plan to sell about 30% shares out of 51.06% shares held by
KDIC to multiple investors, ranging from 4 to 8% ownership each. Pursuant to the plan, the KDIC commenced
the bidding to dispose of its shares by putting up a public notice of sale on August 24, 2016. As of September 23,
2016, KDIC received letters of intent from eighteen potential investors, with an intent to hold shares ranging
from 82% to 119%. As a result of the bid, eight potential investors submitted bid letters for total of 33.7% shares.
On November 13, PFOC announced that seven selected buyers acquired total of 29.7% shares of the Group.
Upon successful privatization of the Group, PFOC, in an effort to ensure autonomous management of the private
sector (i.e., oligopolistic shareholders), released the Group from the MOU on December 16, 2016. Further, in
consideration with the benefits of privatization and the retrieval of public fund, the government will hold a
discussion with PFOC on its plan to sell the 23.7% of the remaining shares of the Group held by KDIC.
48. TERMINATION OF CONTRACT AND FOLLOW-UP AGREEMENT ON THE IMPLEMENTATION OF
A MANAGEMENT PLAN
Upon successful privatization, the MOU on management normalization between the Group and KDIC on
December 16, 2016 was terminated. The same parties instead signed a written agreement on disposal of shares of
the Group for the purpose of the appropriate public fund management. According to the agreement, KDIC has
the right to appoint one personnel from KDIC as a non-executive member of the board of directors of the Group,
as long as KDIC holds over 10% voting shares, or is the largest shareholder (disregarding National Pension
Service) holding more than 4% but less than 10% shares. Also, KDIC may claim inspection of the information
related to the minutes of the board of directors and agenda that may have significant impact on the residual
shares, as long as KDIC holds over 4% shares of the Group.
Woori Bank
Annual Report 2016
202
- 101 -
49. BUSINESS COMBINATION
(1) Acquisition of Woori Wealth Bank in Philippines
The Group acquired 51% interest ownership in Wealth Development Bank, a savings bank in Philippines, in
October 2016. As the residual shares of 49% is owned by Viscal group, which operates retail businesses, the
Group plans to expand its business operation through retail channels of Viscal group.
(2) Establishment of Woori Bank Vietnam Limited
The Group established Woori Bank Vietnam (capitalized at 3 trillion VND) in October, 2016, upon the approval
from Vietnam Central Bank and commenced its operation on January 3, 2017. The Group has operated two
branches in Hanoi and Ho Chi Minh and established a subsidiary in order to expand its retail banking business in
Vietnam.
(3) Acquisition method (Unit: Korean Won in millions)
Woori Wealth Bank
in Philippines
Woori Bank Vietnam
Limited
Total
I. Consideration
Cash and cash equivalents
II. Identifiable assets and liabilities
Cash and Cash equivalents
AFS financial assets
Loan and receivables
Property and equipment
Intangible assets
Other assets
Sub-total
Deposits
Allowance for credit losses
Tax liabilities
Other liabilities
Sub-total
Fair value of identifiable net asset
III. Non-controlling interest
IV. Goodwill
25,675
48,774
2,125
126,917
651
205
8,792
187,464
148,521
352
113
3,655
152,528
34,936
17,118
7,857
155,400
-
-
155,400
-
-
-
155,400
-
-
-
-
-
155,400
-
-
181,075
48,774
2,125
282,317
651
205
8,792
342,864
148,521
352
113
3,655
152,528
190,336
17,118
7,857
- 102 -
Woori Bank
Annual Report 2016
203
Organizational Chart
3 Unit 16 Groups 6 Divisions 62 Departments
Regional Banking Headquarters
Customer
Branch
Corporate Banking Headquarters
Domestic Business Unit
Global Business Unit
Business Support Unit
Retail
Banking
Business
Group
Corporate
Banking
Business
Group
Small &
Medium
Corporate
Banking
Business
Group
Institutional
Banking
Business
Group
Real Estate
Finance
Business
Group
Wealth
Management
Group
Pension
& Trust
Business
Group
Global
Business
Group
Investment
Banking
Business
Group
Financial
Market
Business
Group
Human
Resources
Group
Smart
Banking
Business
Group
Risk
Management
Group
Operation
& Support
Group
Credit
Support
Group
Management
& Finance
Planning
Group
International
Trade
Business
Division
Next
Generation
ICT System
Building
Division
Information
Security
Division
Corporate
Restructuring
Division
Future
Strategy
Division
External
Relations
Division
Retail Banking
Products &
Marketing
Department
Corporate
Banking
Products &
Marketing
Department
Small & Medium
Corporate
Banking Products
& Marketing
Department
Institutional
Banking
Products &
Marketing
Department
Real Estate
Finance
Department
Wealth
Management
Strategy
Department
Synergy &
Marketing
Support
Department
Card Business
Department
Trust
Department
Global Business
Strategy
Department
International
Trade Business
Department
Investment
Banking
Department
Business
Support
Department
Customer
Center
Public
Fund Sales
Department
Housing Fund
Department
Wealth
Management
Business
Department
Retirement
Pension
Business
Department
Global Business
Support
Department
Wealth
Management
Advisory Center
Custody Agent
Department
Project Finance
Department
Foreign
Customer
Banking
Business
Department
International
Trade Service
Center
President & CEO
Board of Directors
General Shareholders Meeting
Woori Bank
Annual Report 2016
204
Treasury
Department
Human
Smart Banking
Resources
Department
Business
Department
Next Generation
ICT System
Planning
Department
Risk
Management
Department
General Affairs
Department
Information
Security
Department
Loan Policy
Department
Corporate
Strategy &
Restoration
Control Tower
Department
Department
Future Strategy
Department
Consumer
Protection
Center
Trading
Department
Development
Human
Resources
Department
Platform
Business
Department
Next Generation
ICT System
Loan Review
Loan Service
Department
Center
Marketing
Department
Corporate
Restructuring
Finance &
Planning
Department
Department
Public
Relations
Department
Settlement
Support
Department
Employee
Satisfaction
FinTech
Business
Center
Department
Next Generation
ICT System
Analysis
Department
ICT Support
Center
Deposit Service
Center
Security Control
Department
Investor
Relations
Department
Accounting
Department
Retail Credit
Analysis &
Approval
Department
SME Credit
Analysis &
Approval
Department
Large
Corporate
Credit Analysis
& Approval
Credit
Management
& Collection
Department
Technology
Finance Center
Secretary Department
Compliance Officer
Audit Committee
Compliance Department
Standing Audit Committee Member/Director
Audit Department
Customer
Branch
International
Trade
Business
Division
Foreign
Banking
Business
Department
International
Trade Service
Center
Regional Banking Headquarters
Corporate Banking Headquarters
Domestic Business Unit
Global Business Unit
Business Support Unit
Retail
Banking
Business
Group
Corporate
Banking
Business
Group
Institutional
Real Estate
Banking
Business
Group
Finance
Business
Group
Wealth
Management
Group
Small &
Medium
Corporate
Banking
Business
Group
Pension
& Trust
Business
Group
Global
Business
Group
Investment
Banking
Business
Group
Financial
Market
Business
Group
Human
Resources
Group
Smart
Banking
Business
Group
Risk
Management
Group
Operation
& Support
Group
Credit
Support
Group
Management
& Finance
Planning
Group
Retail Banking
Products &
Marketing
Department
Corporate
Small & Medium
Institutional
Banking
Corporate
Banking
Real Estate
Products &
Banking Products
Products &
Marketing
Department
& Marketing
Department
Marketing
Department
Finance
Department
Wealth
Management
Strategy
Synergy &
Marketing
Support
Department
Department
Card Business
Trust
Department
Department
Global Business
International
Investment
Strategy
Trade Business
Banking
Department
Department
Department
Treasury
Department
Human
Resources
Department
Smart Banking
Business
Department
Next Generation
ICT System
Planning
Department
Risk
Management
Department
General Affairs
Department
Information
Security
Department
Loan Policy
Department
Corporate
Restoration
Department
Strategy &
Control Tower
Department
Future Strategy
Department
Consumer
Protection
Center
Next
Generation
ICT System
Building
Division
Information
Security
Division
Corporate
Restructuring
Division
Future
Strategy
Division
External
Relations
Division
Business
Support
Department
Customer
Center
Public
Fund Sales
Department
Housing Fund
Management
Department
Wealth
Business
Department
Wealth
Management
Advisory Center
Retirement
Pension
Business
Department
Custody Agent
Department
Global Business
Customer
Support
Department
Project Finance
Department
Trading
Department
Human
Resources
Development
Department
Platform
Business
Department
Next Generation
ICT System
Marketing
Department
Loan Review
Department
Loan Service
Center
Settlement
Support
Department
Employee
Satisfaction
Center
FinTech
Business
Department
Next Generation
ICT System
Analysis
Department
ICT Support
Center
Deposit Service
Center
Security Control
Department
Corporate
Restructuring
Department
Finance &
Planning
Department
Public
Relations
Department
Investor
Relations
Department
Accounting
Department
Retail Credit
Analysis &
Approval
Department
SME Credit
Analysis &
Approval
Department
Large
Corporate
Credit Analysis
& Approval
Credit
Management
& Collection
Department
Technology
Finance Center
President & CEO
Board of Directors
General Shareholders Meeting
Secretary Department
Compliance Officer
Audit Committee
Compliance Department
Standing Audit Committee Member/Director
Audit Department
Woori Bank
Annual Report 2016
205
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 BRANCHES
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 Branch
3360, West Olympic Blvd. Suite 300, LA,
CA90019, USA
· Phone: 1-213-620-0747~8
· Fax: 1-213-627-5438
· Swift: HVBKUS6L
London Branch
9th Floor, 71 Fenchurch Street, London,
EC3M 4BR,UK
· Phone: 44-207-680-0680
· Fax: 44-207-481-8044
· Swift: HVBKGB2L
Tokyo Branch
Shiodome City Center 10th Floor 5-2,
Higashi-Shimbashi 1-Chome, Minato-ku,
Tokyo, 105-7110, Japan
· Phone: 81-3-6891-5600
· Fax: 81-3-6891-2457
Hong Kong Branch
Suite 1401, Two Pacific Place, 88 Queensway,
Hongkong
· Phone: 85-2-2521-8016
· Fax: 85-2-2526-7458
Singapore Branch
10 Marina Boulevard #13-05 MBFC Tower 2,
Singapore 018983 Singapore
· Phone: 65-6422-2000
· Fax: 65-6422-2001
Bahrain Branch
P.O. Box 1151, 4th Floor, Entrance 1,
Manama Centre Building, Manama, Bahrain
· Phone: 973-17-223503
· Fax: 973-17-224429
Hanoi Branch
24F, Keangnam Landmark 72, E6 Pham Hung
Road, Tu Liem District. Hanoi, Vietnam
· Phone: 84-4-3831-5281
· Fax: 84-4-3831-5271
Woori Bank
Annual Report 2016
206
Dhaka Branch
Suvastu Imam Square (1st & 4th Fl.) 65 Gulshan
Avenue, Dhaka, 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 Uttara Sub-Branch
Paradise Tower(Ground Floor) Plot 11, Sector
3, Uttara Model Town,Uttara, Dhaka 1230,
Bangladesh
· Phone: 880-2896-2125~6
· Fax: 880-2896-2129
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
Gaeseong Branch
Gaesong Industrial District Phase 1, 25-1
Business Support Center, 1st Floor 103 1st
Floor, Bongdong-Ri, Gaeseong, Hwanghae-Do,
North Korea
· Phone: 001-8585-2300~2
· Fax: 001-8585-2303
Hochiminh City Branch
2 Floor, Kumho Asiana Plaza Saigon,
39 Le Duan St., Dist 1, HCMC, Vietnam
· Phone: 84-8-3821-9839
· Fax: 84-8-3821-9838
Chennai Branch
6th Floor, EA Chambers, No. 49 & 50L, Whites
Road, Royapettah, Chennai 600 014, India
· Phone: 91-44-3346-6900
· Fax: 91-44-3346-6995
Sydney Branch
Suite 25.03, Level 25, 363 George Street
Sydney NSW 2000 Australia
· Phone: 61-2-8222-2200
· Fax: 61-2-8222-2299
Dubai Branch
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
SUBSIDIARIES
U.S.A
Woori America Bank
330 5th Avenue, 3rd Floor, New York,
NY 10001, USA
· Phone: 1-212-244-3000
· Fax: 1-212-736-5929
Manhattan Branch
330 5th Avenue, 1st Floor, New York,
NY 10001, USA
· Phone: 1-212-244-1500
· Fax: 1-212-695-5593
Olympic Branch
3360, West Olympic Blvd. Suite #300, LA,
CA90019, USA
· Phone: 1-213-738-1100
· Fax: 1-213-738-1101
Fullerton Branch
5731 Beach Blvd., Buena Park, CA 90621, USA
· Phone: 1-714-521-3100
· Fax: 1-714-521-3101
Garden Grove Branch
10120 Garden Grove Blvd.,Suite 151Garden
Grove, CA 92844, USA
· Phone: 1-714-534-6300
· Fax: 1-714-534-6301
Flushing Branch
136-88 39th Avenue Flushing New York, NY
11354, USA
· Phone: 1-718-886-1988
· Fax: 1-718-762-6898
Centreville Branch
13830 Braddock Road. Centreville, VA 20121,
USA
· Phone: 1-703-988-9555
· Fax: 1-703-988-9554
Fort Lee Branch
2053 Lemoine Avenue Fort Lee, NJ 07024, USA
· Phone: 1-201-363-9300
· Fax: 1-201-302-0452
Irvine Branch
14252 Culver Dr. #G, Irvine, CA 92604, USA
· Phone: 1-949-885-3760
· Fax: 1-949-653-0943
Woodside Branch
43-22 50th St. Woodside, NY 11377, USA
· Phone: 1-718-429-1900
· Fax: 1-718-429-2084
Ridgefield Branch
321 Broad Avenue #104 Ridgefield, NJ 07657, USA
· Phone: 1-201-941-9999
· Fax: 1-201-941-4419
Palisades Park Branch
225 Broad Avenue Palisades Park, NJ 07650, USA
· Phone: 1-201-346-0055
· Fax: 1-201-346-0075
Closter Branch
234 Closter Dock Road Closter, NJ 07624, USA
· Phone: 1-201-784-7012
· Fax: 1-201-784-7013
Elkins Park Branch
7300 Old York Rd Elkins Park, PA 19027, USA
· Phone: 1-215-782-1100
· Fax: 1-215-782-1500
Annandale Branch
Seoul Plaza 4231 Markeham St, Annandale,VA
22003, USA
· Phone: 1-703-256-7633
· Fax: 1-703-256-7511
Bayside Branch
215-10 Northern Blvd. Bayside, NY 11361, USA
· Phone: 1-718-224-3800
· Fax: 1-718-224-3828
Ellicott City Branch
100352 Baltimore National Pike Ellicott City, MD
21042, USA
· Phone: 1-443-973-3690
· Fax: 1-410-461-1002
Wilshire Branch
3540 Wilshire Blvd. Unit 104, Los Angeles, CA
90010, USA
· Phone: 1-213-382-8700
· Fax: 1-213-382-8787
Torrance Branch
2390 Crenshaw Boulevard, Units C, Torrance
CA 90501,USA
· Phone: 1-310-974-1880
· Fax: 1-310-782-7004
Georgia LPO
2472 Pleasant Hill Rd. Duluth, GA30096, USA
· Phone: 1-404-904-9880
San Jose LPO
2328 Walsh Ave, Santa Clara CA 95051, USA
· Phone: 1-415-652-9476
Northern Branch
164-25 Northern Blvd. Flushing NY 11358, USA
· Phone: 1-929-362-3330
CHINA
Woori Bank (China) Ltd.
Floor11-12 Block A Building 13 District 4 Wang-
jing East
Park Chaoyang District Beijing China 100102
· Phone: 86-10-8412-3000
· Fax: 86-10-8441-7071
Woori Bank (China) Ltd. Head office
business department
Floor1 Block B Building 13 District 4 Wangjing
East Park
Chaoyang District Beijing China 100102
·Phone: 86-10-8441-7771
·Fax: 86-10-8446-4631
Beijing Branch
1F, West Tower, Twin Towers, B-12 Jianguomenwai
Avenue, Chaoyang District, Beijing, 100022, China
·Phone: 86-10-8453-8880
·Fax: 86-10-8453-8881
Shanghai Branch
Drum Building 1-2F, LJZ -Plaza,1600 Century Ave-
nue, Pudong New Area, Shanghai, 200122, China
· Phone: 86-21-5081-0707
·Fax: 86-21-5081-2484
Shenzhen Branch
B0105, B0210 Rongchao Landmark, 4028 Jintian
Road, Futian District, Shenzhen, 518035 China
·Phone: 86-755-3338-1234
·Fax: 86-755-3338-7227
Weihai Branch
No.106-1~3, Attached Qingdao Mid-Road,
Weihai, Shandong Province, China, 264200
· Phone: 86-631-599-6000
· Fax: 86-31-597-0030
Surabaya Branch
Kompleks Ruko 21, Jl. Raya, Gubeng No.68
E - Surabaya/60281
· Phone: 62-31-5041906
· Fax: 62-31-5047727
Suzhou Branch
101B, Sovereign Building, #8 Suhua Road
Suzhou Industrial Park, Jiangsu, 215021 China
·Phone: 86-512-6295-0777
·Fax: 86-512-6295-2141
Tianjin Dongmalu Sub-Branch
1-2F, Tower C, Yuding Plaza(Qixiang Street), Dong-
ma Road, Nankai District, Tianjin, 300090, China
· Phone: 86-22-8776-9000
· Fax: 86-22-8776-9901~2
Semarang Branch
Imam Bonjol Square Kav 4,Jl. Imam Bonjol
No.176 - Tasikmalaya/50132
· Phone: 62-24-3521906
· Fax: 62-24-3521900
TianJin Branch
No.1 Building, Aocheng Commercial Square,
Binshui West Road, Nankai District, Tianjin,
300381, China
·Phone: 86-22-2338-8008
·Fax: 86-22-2392-5905
Chongqing Branch
Unitl, Floor L2-1, Ping An Fortune Center,
No.25-2, West Main Street, Jiangbei District,
Chongqing 400023, China
· Phone: 86-23-6152-2222
· Fax: 86-23-6152-2220
Shanghai Puxi Sub-Branch
S115-S119, 1F Maxdo center No.8 Xingyi Rd.
Changning District Shanghai, 200336, China
·Phone: 86-21-5208-1000
·Fax: 86-21-6235-1036
Beijing Wangjing Sub-Branch
1F, No.10, Furong Street, Chaoyang District,
Beijing, 100102, China
· Phone: 86-10-8471-8866
· Fax: 86-10-8471-5245
Shanghai Wuzhonglu Sub-Branch
1C, Liaoshen Building, 1068 Wuzhong Rd
Minhang District, Shanghai, 201103 China
· Phone: 86-21-6446-7887
· Fax: 86-21-6446-1200
Shenzhen Futian Sub-Branch
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
Shanghai Jinxiujiangnan Sub-Branch
1F, 188 South Jinhui Road, Minhang District,
Shanghai, 200237, China
· Phone: 86-21-3432-1116
· Fax: 86-21-3432-1112
Beijing Shunyi Sub-Branch
1F,Tower A, AMB Building, 2, Cangshang St,
Shunyi District, Beijing 101300, China
· Phone: 86-10-8945-2220
· Fax: 86-10-8949-3560
DaLian Branch
2F-218 YOMA IFC, No.128 Jinma Road, Dalian
Development Area, Dalian, 116600, China
· Phone: 86-411-8765-8000
· Fax: 86-411-8765-8515
Zhangjiagang Sub-Branch
B104/B205 Huachang Oriental Plaza, 11 Ren-
min East Road, Zhangjiagang, Jiangsu 215600,
China
· Phone: 86-512-5636-6696
· Fax: 86-512-5636-6697
Chengdu Branch
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
Shanghai Lianyang Sub-Branch
No.52, Zendai Thumb Plaza lane 199, FangDian
Road, Pudong New District, Shanghai, 200135
China
· Phone: 86-21-6882-0608
· Fax: 86-21-6882-8821
Beijing Sanyuanqiao Sub-Branch
1F-05, 2F-09, Tower A, Tianyuangang Center,
C2, North Road, East Third Ring Road, Chaoy-
ang District, Beijing
100027. China
· Phone: 86-10-8440-7177
· Fax: 86-10-8441-7761/7790
Shenyang Branch
1F, 2F, Lotte North-Station Arcade, 9-8 Beiling
Street, Huanggu District, Shenyang City Liaoning
Province, China
· Phone: 86-24-8186-0808
· Fax: 86-24-8186-0801
INDONESIA
PT. Bank Woori Saudara Indonesia
Head Office
Jl. Diponegoro No.28 Bandung/40115
· Phone: 62-22-87831900/87831906
· Fax: 62-22-87831918
Corporate Branch
Gd. BEJ Tower 1 Lt. 16 Jl. Jend.Sudirman Kav.
52-53 Jakarta/12190
· Phone: 62-21-5151919
· Fax: 62-21-5151477
Wastukancana Branch
Jl. Wastukancana No.79 - Bandung/40116
· Phone: 62-22-4209940
· Fax: 62-22-4209941
Cirebon Branch
Jl. DR. Wahidin No.51 - Cirebon/45122
· Phone: 62-231-242006
· Fax: 62-231-242066
Bogor Branch
Jl. Pangkalan Raya No.8, Warung Jambu -
Bogor/16151
· Phone: 62-251-8377887
· Fax: 62-251-8377209
Surapati Core Branch
Jl. PHH. Mustofa No.39, Surapati Core Blok
F1 - Bandung/40192
· Phone: 62-22-87241326
· Fax: 62-22-87241327
Tasikmalaya Branch
Ruko Plaza Asia Blok A5-A6, Jl. HZ. Mustofa
No.326 -Tasikmalaya/46126
· Phone: 62-265-2351906
· Fax: 62-265-2352206
Yogyakarta Branch
Jl. Mangkubumi No.45 - Yogyakarta/55232
· Phone: 62-274-549280
· Fax: 62-274-549285
Denpasar Branch
0361-223099 Ruko Griya Alamanda blok 3-4,
Jl. Cok Agung Tresna Renon-Denpasar/80235
· Phone: 62-361-263755
· Fax: 62-361-223099
The Gedung Energy Branch
Gd The Energy Lot 11 A SCBD, Jl. Jendral
Sudirman Kav 52 - 53, Jakarta/12190
· Phone: 62-21-29951906
· Fax: 62-21-29951904
Ampera Branch
Jl. Ampera Raya No.20 Gd.Medco III/12560
· Phone: 62-21-7821756
· Fax: 62-21-7821642
Purwokerto Branch
Jl. Jenderal gatot Subroto No.78 Purwokerto -
Jawa Tengah/53116
· Phone: 62-281-622212
· Fax: 62-281-631616
Malang Branch
Jl. Letjen Sutoyo No.27 Malang- Jawa
Timur/56141
· Phone: 62-341-421906/7601906
· Fax: 62-341-408188
Solo Branch
Jl. Ronggo Warsito No. 53 Kota, Solo - Jawa
Tengah/57131
· Phone: 62-271-633600
· Fax: 62-271-633433
Tangerang Branch
Tangerang City Business Park Blok F/50 Jl.
Jend. Sudirman No.1 Tangerang/15118
· Phone: 62-21-29529226
· Fax: 62-21-29529227
Pelembang Branch
Jl. Basuki Rahmat No.886 A - Palem-
bang/30127
· Phone: 62-711-315828
· Fax: 62-711-315510
Sukabumi Branch
Jl. Jenderal Sudirman No.31-Sukabumi/43111
· Phone: 62-266-6251906
· Fax: 62-266-6249717
Pekalongan Branch
Jl. KH. Mansyur No.64, Perkalongan
· Phone: 62-285-4460505
· Fax: 62-285-4460506
Madiun Branch
Jl. Diponegoro No.110, Madiun
· Phone: 62-351-4773000
· Fax: 62-351-4773003
Jamber Branch
Jl. Gajah Made No. Ruko Gajah Mada Square
Block A2-3
· Phone: 62-331-421648
· Fax: 62-331-4350187
Kediri Branch
Jl. Brawijaya No. 25A Kota Kediri
· Phone: 62-354-4526726
· Fax: 62-3354-4526716
Buah Batu Sub-Branch
Jl. Buah Batu No.58 Bandung/40265
· Phone: 62-22-7322150
· Fax: 62-22-7319626
Kopo Mas Sub-Branch
Komp Ruko Mas J-9 Jl. Kopo Cirangrang/40225
· Phone: 62-22-5436802
· Fax: 62-22-5436803
Cimahi Sub-Branch
Jl. Raya Cibabat No.310 Cimahi/40213
· Phone: 62-22-6634656
· Fax: 62-22-6634657
Sukajadi Sub-Branch
Jl. Sukajadi No.248/40153
· Phone: 62-22-2042248
· Fax: 62-22-2041213
Soekarno Hatta Sub-Branch
Jl. Soekarno Hatta No.618 F/40286
· Phone: 62-22-7509905
· Fax: 62-22-7509902
Pemuda Sub-Branch
Ruko Graha Mas Blok AA No.3 Taman Berdikari
Sentosa Jl.Pemuda/13220
· Phone: 62-21-47862070
· Fax: 62-21-4711298
Subang Sub-Branch
Jl. Ahmad Yani No.36/41211
· Phone: 62-260-421014
· Fax: 62-260-421015
Sumedang Sub-Branch
Jl. Prabu Geusan Ulun No.76/45311
· Phone: 62-261-206527
· Fax: 62-261-206528
Tangerang Sub-Branch
Ruko Pinangsia Blok H No.1 Lippo Karawaci
Kel. Cibodas Tangerang/15139
· Phone: 62-21-55772345
· Fax: 62-21-5577636
Woori Bank
Annual Report 2016
207
Serang Sub-Branch
Jl. KH. Abdul fatah Hasan No.53 Kel. Cipare
Serang/42124
· Phone: 62-254-224142
· Fax: 62-254-224243
Depok Sub-Branch
Jl. Margonda Raya No.1 Rt 001/011 Kelurahan
Depok Kecamatan Pancoran Mas/16431
· Phone: 62-21-7522091
· Fax: 62-21-7522092
Patrol Sub-Branch
Jl. Raya Patrol Anjatan Blok Bunder
No.52/45256
· Phone: 62-234-5613627
· Fax: 62-234-611919
Salatiga Sub-Branch
Ruko Wijaya Square B5 Jl.Diponegoro No.110
Salatiga/50711
· Phone: 62-298-311828
· Fax: 62-298-312808
Sidoarjo Sub-Branch
Jl. KH. Mukmin No.11 Blok B-7 Sidoarjo/60281
· Phone: 62-31-8922842
· Fax: 62-31-8922841
Gianyar Sub-Branch
Jl. By.Pass Dharma Giri No.99/80511
· Phone: 62-361-8958295
· Fax: 62-361-8958194
Gresik Sub-Branch
Ruko KIG Jl. Tri Dharma Kav. A-14/61117
· Phone: 62-31-3981758
· Fax: 62-31-3981720
Rangkasbitung Sub-Branch
Jl. Raden Hardiwinangun Blok A No.9/42314
· Phone: 62-252-203612
· Fax: 62-252-203613
Tabanan Sub-Branch
Jl. Ngurah Rai No.73 Kediri/82121
· Phone: 62-361-814160
· Fax: 62-361-814281
Surabaya Barat Sub-Branch
Surya inti permata II Blok C-6 Jl. HR Muhammad
No.175 Surabaya/60266
· Phone: 62-31-7381606
· Fax: 62-31-7387007
Cikarang Sub-Branch
Cikarang Commercial Centre Blok A1-2, Jl.
Cibarusah KM. 40 No.2 Kampung pasir sari kec.
Cikarang Selatan/17550
· Phone: 62-21-89835720
· Fax: 62-21-89835721
Atrium Sub-Branch
Jl. KH. Hasyim ashari No.49 Cideng/10410
· Phone: 62-21-3451964
· Fax: 62-21-3451954
Kebon Jeruk Sub-Branch
Jl. Kelapa Dua Raya(RayaPanjang) No.2, Rt 008,
Rw 002 Kel. Kelapa Dua Kec. Kebon Jeruk/12130
· Phone: 62-21-53660160
· Fax: 62-21-53660164
Diponegoro Sub-Branch
Jl. Diponegoro No.28 Bandung/40251
· Phone: 62-22-87831928/87831909
· Fax: 62-22-87831919
Lembang Sub-Branch
Jl. Grand Hotel Lembang No.25 Band-
ung/40391
· Phone: 62-22-2784797
· Fax: 62-22-2784975
Cikarang Sub-Branch
Ruko Metro Boulevard Kav. A Jl. Niaga Raya No.10
Kawasan Industri Jabeka/17835
· Phone: 62-21-89836020/021-89837020
· Fax: 62-21-89835953
Majalengka Sub-Branch
Jl. KH. Abdul Halim No.447 Majalengka/45411
· Phone: 62-233-8285460
· Fax: 62-233-8285459
Kuningan Sub-Branch
Jl. Dewi Sartika No.4/45512
· Phone: 62-232-8880938
· Fax: 62-232-8880939
Indramayu Sub-Branch
Jl. DI. Panjaitan No.103/45212
· Phone: 62-234-276236
· Fax: 62-234-276237
Mojokerto Sub-Branch
Jl. Gajah Mada No.85B/60319
· Phone: 62-321-383444
· Fax: 62-321-383465
Cianjur Sub-Branch
Jl. Abdulah Bin Nuh No.15/43253
· Phone: 62-263-260941, 260943, 260945
· Fax: 62-263-280712
Pamulang Sub-Branch
Jl. Dr. Setiabudi No.71 Kav. 6 Pamulang
Timur/15417
· Phone: 62-21-7403205, 7443335
· Fax: 62-21-7402330
Sumber Sub-Branch
Jl. Dewi Sartika No.57 Sumber/45611
· Phone: 62-231-8330618
· Fax: 62-231-8330619
Bantul Sub-Branch
Jl. Jenderal Sudirman No.130 Kabupaten
Bantul/55713
· Phone: 62-274-367514
· Fax: 62-274-368787
Balaraja Sub-Branch
Komplek Ruko Balaraja Center Blok A No.2 Jl.
Raya Serang Km. 24 Talaga Sari Balaraja-tan-
gerang/15610
· Phone: 62-21-29015618
· Fax: 62-21-29015474
Ciledug Sub-Branch
Ruko Dian Plaza Jl. Raden Fatah No.8A Kelura-
han Sudirman Selatan,Ciledug/15225
· Phone: 62-21-7330545
· Fax: 62-21-7330706
Cibubur Sub-Branch
Cibubur Times Square Blok B1/1 Jl. Alternatif
Cibubur KM 3 Kel. Jatiraya, Kec. Jastisampurna
Bekasi/17435
· Phone: 62-21-84305050
· Fax: 62-21-84305353
Gunung Sabeulah Sub-Branch
Jl. Gunung Sabeulah Kel.Tawangsari Kec.
Tawang kota Tasikmalaya/46112
· Phone: 62-265-326147
· Fax: 62-265-331135
Purwakarta Sub-Branch
Jl. Basuki Rahmat No.94, Purwakarta/41114
· Phone: 62-264-8227474
· Fax: 62-264-8227475
Garut Sub-Branch
Jl. Ahmad Yani No.33/44117
· Phone: 62-262-544672
· Fax: 62-262-544670
Cikampek Sub-Branch
Jl. Terusan Sudirman No.6B(Sudirman Cen-
ter)/41373
· Phone: 62-264-8385171,72
· Fax: 62-264-8385088
Magelang Sub-Branch
Ruko Metro Square Blok F No.25/56172
· Phone: 62-293-326498-99
· Fax: 62-293-326356
Padalarang Sub-Branch
Jl. Raya Padalarang No.463 H/40553
· Phone: 62-22-6803940/41
· Fax: 62-22-6803935
Woori Bank
Annual Report 2016
208
Karawang Sub-Branch
Jl. Tuparev No.499 (Johar) Kab. Karawang
· Phone: 62-267-8454873-74
· Fax: 62-267-8454875
Soreang Raya Sub-Branch
Jl. Raya Soreang No.412/40900
· Phone: 62-22-5896880
· Fax: 62-22-5897444
Cibinong Sub-Branch
Jl. Raya Mayor Oking No.158 V/16918
· Phone: 62-21-87904397
· Fax: 62-21-87904443
Singaparna Sub-Branch
Jl. Raya Timur No.45 Singaparna/46416
· Phone: 62-265-543111-3
· Fax: 62-265-545074
Ciamis Sub-Branch
Jl. Letjen. Samuji Ruko No.35/46211
· Phone: 62-265-772221
· Fax: 62-265-777860
Sleman Sub-Branch
Jl. Magelang KM 12.8 No.200/55514
· Phone: 62-274-865922
· Fax: 62-274-866168
Losari Sub-Branch
Jl. Soekarno Hatta NO.77 Losari/45192
· Phone: 62-231-8832738-39
· Fax: 62-231-8832736
Bekasi Sub-Branch
Jl. Raya Narogong KM 12.5 No.23A/17151
· Phone: 62-21-82611045-46
· Fax: 62-21-82605356
Kudus Sub-Branch
Jl. Sunan Kudus No.5 a/509000
· Phone: 62-291-4249241
· Fax: 62-291-4246497
Pamanukan Sub-Branch
Jl. Eyang Tirtapraja No.54 Kab. Subang/41254
· Phone: 62-260-551773
· Fax: 62-260-551774
Majalaya Sub-Branch
Jl. Alun-alun utara/Jl. Tengah komp ruko perma-
ta majalaya Blok C6/40382
· Phone: 62-22-85963799
· Fax: 62-22-5959826
Pangalengan Sub-Branch
Jl. Raya Pintu Pangalengan KM-1/40378
· Phone: 62-22-5979222
· Fax: 62-22-5978690
Ujung Berung Sub-Branch
Komp Ruko Bandung Timur Plaza No. RA Jl.
A.H. Nasution Kav. 46A Ujung Berung/40612
· Phone: 62-22-7834128
· Fax: 62-22-7834153
Jemur Sari/Surabaya selatan Sub-Branch
Jl. Raya Jemursari No.15C Surabaya/60237
· Phone: 62-31-8480454
· Fax: 62-31-8480483
Luragung Sub-Branch
Jl. Siliwangi No.18 Kec Luragung, Kab Kunin-
gan/45581
· Phone: 62-232-870016
· Fax: 62-232-870020
Pangandaran Sub-Branch
Jl. Parapat, Desa Pangandaran, kec panganda-
ran kab ciamis/46396
· Phone: 62-265-630400, 630010
· Fax: 62-265-630800
Purwodadi Sub-Branch
Jl. Letjend. S. Parman No.13 Kel. Purwodadi
Kec. Purwodadi Jawa Tengah/58111
· Phone: 62-292-423399
· Fax: 62-292-423799
Leuwi Liang Sub-Branch
Jl. Raya Jasinga 11A Kel. Cibeber, Kec. Leuwil-
iang Kab Bogor/16640
· Phone: 62-251-8640297
· Fax: 62-251-8640299
Ciawi Sub-Branch
Jl. Perjuangan No.80 Kp.Karanganyar Rt. 04
Rw. 05 Desa Pakemitan Kec Ciawi Kab. Tasik-
malaya/46156
· Phone: 62-265-455163, 455167
· Fax: 62-265-455162
Cilacap Sub-Branch
Jl. Jend. A Yani No.46 Cilacap/53212
· Phone: 62-282-537929
· Fax: 62-282-535522
Jombang Sub-Branch
Jl. KH. Wahid Hasyim No.71 Kota Jombang-Ja-
wa Timur/61411
· Phone: 62-321-878906, 872906
· Fax: 62-321-860904
Cilegon Sub-Branch
Jl. Jend. A. yani Komp Cilegon green megablok
Blok D3 No.17 Cibeber - cilegon/42433
· Phone: 62-254-8484772
· Fax: 62-254-8484773
Banjar Sub-Branch
Jl. Letjen Soewarto No.92/46321
· Phone: 62-265-740557
· Fax: 62-265-740558
Boyolali Sub-Branch
Jl. Pandanaran No.179 B Kab.Boyolali/57313
· Phone: 62-276-323655
· Fax: 62-276-323650
Wonogiri Sub-Branch
Jalan Ahmad Yani No.66, Wonogiri
· Phone: 62-271-633600
· Fax: 62-271-633433
Martadinata Sub-Branch
Jl. RE Martadinata Pav 123 Bandung/40114
· Phone: 62-22-71070901
· Fax: 62-22-7107091
Kawali Sub-Branch
Jl. Siliwangi No.262, Desa Kawali mukti
· Phone: 62-265-791560
· Fax: 62-265-791580
Cimahi Cash-Office
Cijerah II blok V No.3 Cimahi
· Phone: 62-22-86065156
· Fax: 62-22-6075579
Suci Cash-Office
Jl. PHH. Mustofa No.35/40124
· Phone: 62-22-7279740
· Fax: 62-22-7276361
Melawai/Radio dalam Sub-Branch
Jl. Radio dalam raya No.4 Kel. Gandaria Utara
Kec. Kebayoran baru Jakarta selatan/12160
· Phone: 62-21-7211005
· Fax: 62-21-7210970
Singaraja Sub-Branch
Jl. Ngurah Rai No.16 Singaraja Kelurahan Kend-
ran Kecamatan Buleleng/81112
· Phone: 62-362-25098
· Fax: 62-362-26605
Manonjaya Sub-Branch
Jl. RTA. Prawira Adiningrat No.214 A Desa
Manonjaya kec. Manonjaya-Tasikmalaya
· Phone: 62-265-380510
· Fax: 62-265-380356
Surabaya Utara Sub-Branch
Jl. Kertajaya Indah No.9/F-105 Surabaya/60161
· Phone: 62-31-3572064
· Fax: 62-31-3537005
Batu Sub-Branch
Jl. Brantas No.49 Batu-Malang/65314
· Phone: 62-341-513709
· Fax: 62-341-513712
Palimanan Sub-Branch
Jl. Otto Iskandardinata No.503 Palimanan
· Phone: 62-231-343950
· Fax: 62-231-343955
Pelabuhan Ratu Sub-Branch
Jl. Surya Kencana No.198 Cibadak - Kabupaten
Sukabumi/43364
· Phone: 62-266-6441906
· Fax: 62-266-435511
Bekasi Sub-Branch
Annex Building Lt. 1 Jl. Afrika No.2 Krakatau
Posco Cilegon/42435
· Phone: 62-21-82404282
· Fax: 62-21-82401878
Wates Sub-Branch
Jl. Kolonel Sugiyono No.3-Wates
· Phone: 62-274-6657325
· Fax: 62-274-774338
Tanjung Priok Sub-Branch
Jl. Enggano No.58 C- Tanjung Priok jakarta
Utara/14310
· Phone: 62-21-4361667
· Fax: 62-21-4361668
Karangnunggal Sub-Branch
Jl. Raya Karangnunggal KP. Karangmekar RT/RW
03/09 Desa Hegarwangi Kec. Bantarkalong Kab.
· Phone: 62-265-258471~2
· Fax: 62-265-2584570
Cibatu Sub-Branch
Jalan Raya Cibatu - Limbangan Ruko Perum Bu-
nar Indah Blok C-29 No.15-17 Rt 06 Rw 04 Desa
Cibunar Kecamatan Cibatu Kabupaten Garut
· Phone: 62-262-467708
· Fax: 62-262-467707
Kepanjen Sub-Branch
Jl. Kawi Ruko B 7, Kepanjen
· Phone: 62-34-1379840
· Fax: 62-34-1379839
Pamekasan Sub-Branch
Jl. Kabupaten No.114
· Phone: 62-324-333905, 333906
· Fax: 62-324-333604
Kebumen Sub-Branch
Jl. Ahmad Yani No.20, Kubumen
· Phone: 62-281-6222212
· Fax: 62-281-631616
Mangga Dua Sub-Branch
Ruko Harco Mangga Dua Blok L. No.5
· Phone: 62-21-6120176
· Fax: 62-21-6120179
Kelapa Gading Sub-Branch
Jl. Boulevard Barat Ruko MOI Blok I No.15
· Phone: 62-21-29364053
· Fax: 62-21-29364054
Kayu Agung Sub-Branch
Jl. Letnan Muthtar Saleh, Kayuagung, Palem-
bang, South Sumatra
· Phone: 62-711-315828
· Fax: 62-711-315510
Klaten Sub-Branch
Jl. Pemuda No. 246 Klaten, solo
· Phone: 62-271-633600
· Fax: 62-271-633433
Parung Sub-Branch
Jl. Rayal Parung RT002/RW006, Kacamatan
Parung, Kabupaten Bogor
· Phone: 62-2151-861-9559
· Fax: 62-251-861-5455
Pasuruan Sub-Branch
Jl. Panglima Sudirman No.45 Ruko I, Pasuruan,
Malang
· Phone: 62-343-561-4700
· Fax: 62-343-561-4940
Pati Sub-Branch
Jl. Ir. Susato No.40 Pati, Jawa Tengah
· Phone: 62-24-352-1906
· Fax: 62-24-352-1900
Sumenep Sub-Brancch
JI. Trunouyo No. 244 Sumenep
· Phone: 62-328-6762234
· Fax: 62-328-6762242
Dalem Kaum Cash-Office
Jl. Dalem Kaum No.5 Bandung/40251
· Phone: 62-22-4211906
· Fax: 62-22-4206837
Batujajar Cash-Office
Jl. Batujajar No.324 Bandung
· Phone: 62-22-86861018/17/15
· Fax: 62-22-86861016
Cilegon Cash-Office
Annex Building Lt. 1 Jl. Afrika No.2 Krakatau
Posco Cilegon/42435
· Phone: 62-254-369755
· Fax: 62-254-369759
Ruko Union Cash-Office
Ruko Union Square Blok A No.6 Lippo Cikarang,
Cikarang Selatan
· Phone: 62-21-89909797
· Fax: 62-21-89903007
Sadang Cash-Office
Sadang Terminal Square No.07, 08, 25 Jl. Raya
Sadang Purwakarta/41181
· Phone: 62-264-8220180
· Fax: 62-264-8220181
Cilimus Cash-Office
Jalan Raya Cilimus RT 017/04, Desa Cilimus
Kecamatan Cilimus, Kabupaten Kuningan
· Phone: 62-232-615411
· Fax: 62-232-615412
Gading Serpong Cash-Office
Jl. Boulevard Raya Gading Sepong, Ruko
Alexandrite 3, No.21, Kabupaten Tangerang
· Phone: 62-21-5421-2159
· Fax: 62-21-5421-0975
Bojonergoro Cash-Office
Jl. Untung Suropati Ruko Adipura Block A-11
· Phone: 62-353-311271
· Fax: 62-353-311270
Surya Sumantri Cash-Office
· Phone: 62-22-2021760
· Fax: 62-22-20271073
Purbalingga Functional Office
Jl. Ahmad Yani No.42 Purbalingga
· Phone: 62-81-89553
· Fax: 62-81-892034
Sragen Functional Office
Jl. Sukowati No.156 Sragen
· Phone: 62-71-895015
· Fax: 62-71-895013
Jatinangor Cash-Office
Jl. Raya Jatinangor KM 20.5 KKBI IKOP-
IN/45363
· Phone: 62-22-7781587
· Fax: 62-22-7781563
Darmaraja Cash-Office
Jl. Raya Darmaraja No.253 desa Darmaraja, Kec
Darmaraja Kab.Sumedang/45372
· Phone: 62-262-429000, 429069, 428478
· Fax: 62-262-429070
Daan Mogot Cash-Office
Jl. Tampak Sirling No.12 Daan Mogot/11460
· Phone: 62-21-56944307
· Fax: 62-21-56944307
Fatmawati Cash-Office
Jl. Kesehatan Raya No.18B Rt 003 Rw 006 Kel
Bintaro Kec. Sanggrahan Jakarta selatan/12430
· Phone: 62-21-7374693
· Fax: 62-21-7374408
Cililitan Asabri Cash-Office
Jl. Mayjen Sutoyo No.11 Gedung PT Asabri
(persero) Jl. Cililitan - jakarta Timur/13630
· Phone: 62-21-80876494
· Fax: 62-21-80876381
Bekasi Cash-Office
Jl. Ir. H. Juanda No.111 Bekasi
· Phone: 62-21-88353901
· Fax: 62-21-88345693
Jatibarang Cash-Office
Jl. Letnan Joni No.178 Kec. Jatibarang - Kab
Indramayu/45273
· Phone: 62-234-352911
· Fax: 62-234-352910
Taman Topi Cash-Office
Jl. Gedong Sawah I No.1 A Pabaton Bogor/16121
· Phone: 62-251-8335714
· Fax: 62-251-8335721
Cikajang Functional Office
Jl. Raya Cikajang No.80 Garut
· Phone: 62-62-576094
· Fax: 62-62-576089
Juanda/ KK Tajur Cash-Office
Jl. Raya Tajur Ruko Galaxy No.59 H Bogo
· Phone: 62-251-7559203, 8384254
· Fax: 62-251-7559205
Kendal Cash-Office
Jl. Raya Utama No.9 weleri kenda
· Phone: 62-294-644704
· Fax: 62-294-644708
Ungaran Cash-Office
Ruko permata hijau No.1 Jl. MT Haryono No.16 Kel
Ungaran Kec Ungaran Barat Kab. Semarang/50511
· Phone: 62-24-76911017
· Fax: 62-24-76911001
Serang Cash-Office
Jl. Raya Serang- pandeglang KM 11 Lingkungan waru
Lor, Desa/kel. Kamanisa Kec Curug Kota serang/42117
· Phone: 62-254-222133
· Fax: 62-254-8494615
Wonosari Functional Office
Jl. KH. Agus Salim No.71A Wonosari - Kab
Gunungkidul
· Phone: 62-74-3950673
· Fax: 62-74-3950673
Dalem Kaum Functional Office
Jl. Dalem Kaum No.5 Bandung
· Phone: 62-33-4233810
· Fax: 62-22-4206837
HONG KONG
Woori Global Markets 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
Woori Bank
Annual Report 2016
209
Cebu Mambaling Branch
G/F Metro Store Mambaling, Cebu, N. Bacalso
Avenue corner F. Llamas Street, Basak San
Nicolas, Cebu City
· Phone: 63-32-414-4233
T agbilaran Banking Center
Ground Floor, No. 15 JS Torralba St., Poblacion
2, Tagbilaran City, Bohol
· Phone: 63-38-411-4860
· Fax: 63-38-501-9098
Iloilo Banking Center
Ground Floor, ACCE Bldg., Mabini Ledesma St.,
Liberation, Iloilo City
· Phone: 63-33-338-4419
· Fax: 63-33-338-4417
Cagayan De Oro Banking Center
Ground Floor, Jammin Lui Bldg., corner A. Velez
& Gomez Sts. Poblacion, Cagayan de Oro City,
Misamis Oriental
· Phone: 63-88-856-8974
· Fax: 63-88-856-8942
Davao Branch
Ground Floor, Door 8, 9 & 10 Grand MenSeng
Hotel Pichon St., 1-E Poblacion, Davao City,
Davao del Sur
· Phone: 63-82-225-3318
· Fax: 63-82-255-3319
VIETNAM
Woori Bank Vietnam
34F, Keangnam Landmark 72, E6 Pham Hung
Road, Tu Liem District. Hanoi, Vietnam
· Phone: 63-82-225-3318
· Fax: 84-04-7300-6806
OVERSEAS OFFICES
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: 84-04-7300-6802
· Fax: 60-3-2163-9288
MYANMAR
Woori Bank Yangon, Myanmar Office
No.115(A) First Floor), Pyay Road, 10 Miles,
Insein Township, Yangon, Myanmar
· Phone: 95-01-646951
IRAN
Woori Bank Iran Representative Office
1st Floor, No; 18, J St., Moghadas Ardebili St.,
Mahmodiyeh, Tehran, Iran
· Phone: 98-22-04-6975 / 98-90-3826-3169
AreyKshat Branch
#154, National Rd. 21 Preak Khsev Village,
Rokar Khpos Commune, S’ang District, Kandal
Province, Phnom Penh, Cambodia
· Phone: 855-2490-1455
PHILIPPINES
Wealth Development Bank
Taft Financial Center, Cardinal Rosales Avenue,
Cebu Business Park, Cebu City, Cebu
Steung Meanchey Branch
No.19A St, Monireth, Phumdomnak Thom,
Sangkat Stoeung Meanchey, Khan Meanchey,
Phnom Penh, Cambodia
· Phone: 855-23-901-345
Chom Chao Branch
No.4A, St, Veng Sreng, Chrey Koung Village,
Sangkat Chom Chao, Phnom Penh, Cambodia
· Phone: 855-23-901-355
MYANMAR
Woori Finance Myanmar Plc.
115/A, Pyay Road, Saw Bwar Gyee Kone
Ward(10 miles),
Insein Township Yangon, Myanmar
· Phone: 95-01-643798
North Okkalapa Branch
No. M(56), Thiriyadanar Wholesale Market
NorthOkkalapa Township, Yangon, Myanmar
· Phone: 95-99-6889-2300
Mingladon I Branch
115/A, Pyay Road, Saw Bwar Gyee Kone
Ward(10 miles),
Insein Township Yangon, Myanmar
· Phone: 95-01-643798
Mingaladon II Branch
4F, 115/A Pyay Road, Saw Bwar Gyee Kone
Ward(10miles), lnsein Township, Yangon Myan-
mar
· Phone: 95-01-643798
Nyaungdon Branch
Room No. 103, 1st Street, 5 Quarter, Nyaung-
don Township, Ayarwaddy, Myanmar
· Phone: 95-99-7674-7709
Taikkyi Branch
Room No.9, Natsinkone Road, Ohtan Ward,
Taikkyi Township, Yangon, Myanmar
· Phone: 95-9-7717-81028
Hmawbi I Branch
2F No(26) Tatkyee Kone village, Hmawbi Town-
ship, Yangon, Myanmar
· Phone: 95-9-9-74563586
Hmawbi II Branch
1F No(26) Tatkyee Kone village, Hmawbi Town-
ship, Yangon, Myanmar
· Phone: 95-9-97456395
Maubin I Branch
Plot No(34), No(396), Building 01, Yei Le road,
Ward 7, Maubine Township, Ayeyarwaddy,
Myanmar (2F)
· Phone: 95 9 9712 25895
Maubin II Branch
Plot No(34), No(396), Building 01, Yei Le road,
Ward 7, Maubine Township, Ayeyarwaddy,
Myanmar (1F)
· Phone: 95 9 9616 12763
Kawhmu Branch
No 192/B, Bogyoke St. South Wd Kawhmu
Townshop, Yangon
Alabang Branch
Unit 103, South Center Tower Condominium
2206 Market Street, Madrigal Business Par
Alabang, Muntinlupa City, Manila
· Phone: 63-32-415-5265
· Fax: 63-32-415-5266
Angeles Marquee Mall Branch
Ground Floor , Marquee Mall, Don Bonifacio St.,
Pulung Maragul Angeles City, Pampanga
· Phone: 63-45-624-0072
Legazpi Pacific Mall Branch
G/F Expansion II, Pacific Mall Legazpi, Landco
Business Park, F. Imperial Street Cor. Circumfer-
ential Road, Legazpi City 4500
· Phone: 63-52-480-0038
Lucena Pacific Mall Branch
Ground Floor L 1-26, Pacific Mall, M.L. Tagarao
St. Landco Business Park, Brgy. III , Lucena City,
Quezon
· Phone: 63-42-795-3771
· Fax: 63-42-795-3773
Taguig Market Market Branch
Ground Floor, Play Ground Zone, Metro Market
Market Mall, Mckinley Parkway, Fort Bonifacio
Global City, Taguig City
· Phone: 63-02-889-0275
· Fax: 63-02-887-4371
Cebu Ayala Branch
Ground Floor, Taft Financial Center, Cardinal
Rosales Avenue, Cebu Business Park, Brgy.
Luz, Cebu City
· Phone: 63-32-415-4888
· Fax: 63-32-415-5777
Cebu Ramos Branch
Ground Floor, Hilario Chu Bldg., No. 148 F.
Ramos St. Santa Cruz, Cebu City
· Phone: 63-32-412-6302
· Fax: 63-32-412-6353
Cebu Carbon Branch
Ground Floor, M.C. Briones & Plaridel Sts., Cebu
City
· Phone: 63-32-416-9077
· Fax: 63-32-416-9078
Cebu Mandaue Branch
Ground Floor, G/F Meritz Building, A.C. Cortes
Ave. Ibabao, Mandaue City, Cebu
· Phone: 63-32-343-8144
· Fax: 63-32-343-8143
Cebu Tabunok Branch
Ground Floor, AGSy Bldg., National Hi-Way,
Tabunok Talisay City, Cebu
· Phone: 63-32-272-2955
· Fax: 63-32-273-6870
Cebu Mandaue Pacific Mall Metro Branch
Ground Floor, Mandaue Pacific Mall Metro
National Highway corner M.B. Fernan Ave.
Estancia, Ibabao, Mandaue City, Metro Cebu
· Phone: 63-32-239-1072
· Fax: 63-32-239-1073
RUSSIA
AO Woori Bank
8th floor, Lotte Plaza, 8, Novinsky Boulevard,
Moscow, 121099, Russia
· Phone: 7-495-783-9787
· Fax: 7-495-783-9788
Saint-Petersburg Branch
1st Floor, Atlantic City, 126 Savushkina Street,
Saint-Petersburg, 197374, Russia
· Phone: 7-812-327-9787
· Fax: 7-812-327-9789
AO 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
BRAZIL
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
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
Russey Keo Branch
House No.1A, National Road 5, Sangkat Kilomet
Lek6 Khan Russey Keo, Phnom Penh.
· Phone: 855-23-999-664
Pursenchey Branch
House No.6A, Russian Blvd, Tangoun Village,
Sangkat Kakb, Khan Pursenchey, Phnom Penh.
· Phone: 855-23-999-803
Kean svay Branch
House No.330, National Road 1, Toul Tuaut
village, Korkey Communce, kean Svay district,
Kandal province
· Phone: 855-23-720-632
Takhmao Branch
Building No.31, Street2, Takhmao village,
Takhmao Commune, Takhmao District, Kandal
Province, Cambodia
· Phone: 855-24-998-333
PrekPhnov Branch
National highway 5, Kandal Village, Prek Phnov
commune, Phnom Penh, Cambodia
· Phone: 855-23-900-945
Ang Snoul Branch
#109, National road No.4, Village Bek Chan,
CommuneBek Chan, District Ang Snuol, Cam-
bodia
· Phone: 855-023-999-355
Phsar Depo Branch
#138D, St 215, Sangkat Veal Vong, Khan Prum-
pei Makara, Phnom Penh, Cambodia
· Phone: 855-23-900-455
Woori Bank
Annual Report 2016
210
Directed by Woori Bank
Investor Relations Dept.
IR officer. Kim, So Hee
banker.ksh@wooribank.com
Tel +82-2-2125-2316
www.wooribank.com
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EDGAR
(Disclosure Information)
51, Sogong-ro(203, Hoehyeon-dong 1-ga), Jung-gu, Seoul, 04632, Korea
Tel. +82-2-1599-2288 / +82-2-2002-3000(domestic)
www.wooribank.com