WOORI BANK
ANNUAL REPORT
2017
TogeTher for
Tomorrow
A Leading Bank
Shaping the Future
WOORI BANK ANNUAL REPORT 2017
Woori Overview
006
010
012
014
015
016
020
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
024
026
028
030
032
034
036
037
040
042
044
045
046
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social Responsibility
050
052
054
056
058
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
061
072
180
182
Management's Discussion and Analysis
Independent Auditors' Report
Organizational Chart
Global Network
In 2018, change and innovation will give new life to Woori Bank.
All of us will strive to become the number one comprehensive financial group.
At Woori Bank, we build a better tomorrow, working together as one team.
TogeTher for
Tomorrow
A LeAding BAnk ShAping the Future
We communicate and grow
under an innovative and
open corporate culture.
W e CHa n g e
1
Ch aN Ge
We Harmonize
We build trust and harmony
together with our customers
and our society.
2
haRmO Ny
3
S h aRe
We share common values
that encourage caring and
empathy for all
W e SHa r e
with Woori Bank
A l l
T o g eTh e r
Together we can take a powerful step to grow and become an all
new bank. We will realize the dream of becoming the number one
comprehensive financial group together with our customers through
change, harmony and sharing.
To gain the
trust of our
customers
We build
a strong foundation
to generate steady
profits and
sustainable
growth.
W e Cr e at e
a better tomorrow for our customers
We become
a holdings
company and
the number one
comprehensive
financial group.
We fulfill our
responsibility as a
corporate citizen.
We localize our
business further
and promote global
business
competencies.
We grow to
become a bank
capable of leading
the digital era.
with Woori Bank
F o r
T o m o r r o w
To build a wealthier future for our customers, we will implement
inclusive banking and be a financial services company that creates
a sustainable future.
006
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
006
message from the CeO
First of all, I would like to extend my warmest
gratitude to our valued shareholders and
customers for their continued support of
Woori Bank.
First of all, I would like to extend my warmest
In October 2017, Woori Bank beat all of its rivals
gratitude to our valued shareholders and cus-
in a competitive bid to select the primary bank
tomers for their continued support of Woori
for Korea’s National Pension Service (NPS). In
Bank.
January 2018, we were re-appointed as the
managing custodian bank of the National Hous-
In 2017, we saw uncertainty increase around
ing & Urban Fund. These successes also helped
the world. The United States hiked interest
expand Woori Bank’s brand recognition.
rates and extended trade protectionism, while
political controversies over the issue of the Ter-
I am deeply grateful to the shareholders for the
minal High Altitude Area Defense (THAAD) sys-
trust and support they have shown under such
tem affected Korea in various ways. We then
severe internal and external conditions, thus
witnessed the emergence of the fourth indus-
empowering Woori Bank to progress and attain
trial revolution leading to the launch of Inter-
stable growth. To repay the continued kind-
net-only banks and the more immediate possi-
ness demonstrated by our shareholders, we
bility of the technology sector offering financial
are committed to doing our best in every step
services. These circumstances have made the
we take.
market conditions under which we operate
extremely tough.
As a part of such efforts, Woori Bank recently
came up with its 2018 operating slogan, “Woori
In the face of such challenges, employees at
All Together, All New Woori.” The tagline sig-
Woori Bank have pooled their combined efforts
nifies our unified commitment to revamp the
to increase the Bank’s corporate value. We have
bank and build a whole new organization with
been rewarded with impressive achievements
the help of all employees acting as one based
for our efforts in all areas including profitabil-
on communication and harmony.
ity, growth, and integrity, which in turn have
brought us one step closer to our shareholders
and customers.
WOORI BANKANNUAL REPORT 2017 007
Employees at Woori Bank
have pooled their combined
efforts to increase our
corporate value.
007
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017 008
008
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
Woori Bank has come up with the following
five management strategies in order to ensure
more substantial growth, and to bring greater
satisfaction and happiness to our shareholders
and customers.
First, we will build a strong foundation to gener-
Second, we will localize our business further to
ate steady profits and sustainable growth. We
promote global business competence. Focus-
will achieve balanced growth in interest-bear-
ing mostly on Southeast Asia, where we enjoy
ing assets, while pursuing a constant increase
high profitability, we will expand the propor-
in non-interest income, especially in the area of
tion of loans in the region. At the same time,
asset management.
we will strengthen our network management
Management strategies
in order to ensure more
substantial growth, and to
bring greater satisfaction and
happiness to our shareholders
and customers.
capabilities so that we can achieve the two
goals of profitability and stability.
Third, we will grow to become a bank that is capa-
ble of leading the digital era. Digital transforma-
tion is the undisputed trend now, and Woori Bank
will fully use the know-how and skills we have
accumulated over the years to transform the
bank into a leader in digital banking.
WOORI BANKANNUAL REPORT 2017 009
Fourth, we will fulfill our responsibility as a cor-
porate citizen. By implementing what we call
bigger banking, which is mainly focused on
inclusive, productive and trustworthy bank-
ing, we will fulfill the banking sector’s collective
social responsibility and be a bank that grows
The year 2018 marks the 119th anniversary of
together with society.
Woori Bank. We have maintained a history of
over one hundred years, and we intend to grow
Lastly, we will successfully change into a hold-
for another century and beyond to become a
ings company to establish ourselves as Korea’s
financial brand that will be there for you always.
number-one comprehensive financial group. To
We appreciate the generous support and inter-
make this happen, our employees will work as
est from our shareholders and customers as we
one team with the same purpose and drive as
seek to realize this goal.
they seek to enhance Woori Bank’s corporate
value to the fullest and reward the unchanging
On a final note, from the bottom of my heart, I
support provided by shareholders.
wish all our shareholders and customers con-
tinued health and happiness.
Thank you.
Sohn Tae-Seung
President and CEO, Woori Bank
009
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017 010
Board of Directors
President &
Chief Executive Officer
Standing Director
Outside Director
Sohn, Tae Seung
Oh, Jung Sik
Ro, Sung Tae
Shin, Sang hoon
· Executive Vice President & Head,
Global Business Group,
Woori Bank
· Head, Global Business Unit,
Woori Bank
· LLM, Seoul National University
· CEO, KB Capital
· Vice President, Commercial
Business Division, Citibank
· Managing Director, Risk &
Planning Group, Citibank
· B.A. in International Economics,
· LLB, Sungkyunkwan University
Seoul National University
· President, Hanwha Economic
Research Institute
· President & CEO,
Shinhan Financial Group
· President, Korea Economic
Research Institute
· Ph.D. in Economics, Harvard
University
· B.A. in Economics, Seoul National
University
· President, Shinhan Bank
· MBA, Yonsei University
· B.A. in Business Administration,
Sungkyunkwan University
010
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017 011
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
011
Outside Director
Non-Standing Director
Park, Sang yong
Tian, Zhiping
Chang, Dong Woo
Bae, Chang Sik
· (Current) 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
· (Current) 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
· IMBA, University of Hong Kong
· B.A. in Economics & Governmental
Administration, Shanxi University
of Finance & Economics
· (Current) CEO, IMM Investment
· Chief Partner, IMM Investment
· LLB, Hanyang University
· (Current) Head of Human
Resources Development, KDIC
· Head of Settlement and Recovery
Planning 2, KDIC
· Completed, Program in Asian
Security Studies, Duke University
· BA in Trade, Hankuk University of
Foreign Studies
WOORI BANKANNUAL REPORT 2017 012
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
012
Corporate Governance
As of the end of March 2018, Woori Bank’s Board
As experts in the fields of economics, business
of Directors (BOD) consists of eight executive
administration, accounting and law, directors con-
directors: two standing directors, one non-stand-
tribute their expertise and information gathered
ing director and five outside directors who were
from years of experience in the field to enhance the
appointed to increase the relevant expertise and
management efficiency of the bank and increase
independence of the BOD. The five outside direc-
shareholder value.
tors 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 moni-
tor Woori Bank’s strategic decision-making process
and overall business affairs on a regular basis.
The BOD held 17 meetings in 2017 to discuss a total
2017 Performance
of 44 agenda issues and 42 briefings, all of which
required decisions to be made.
Directors in a variety of fields collected information
from internal and external research activities, and then
offered real-world advice by utilizing their expertise
to contribute significantly to improving management.
During regular quarterly meetings in 2017, the
BOD was informed of quarterly business results,
reviewed current issues, and deliberated on the
bank’s management plans. Major agenda items
of discussion included 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 commit-
tees 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 continued market changes,
as well as giving final approval to the bank’s 2018
draft management plan.
Board of Directors
① Sohn, Tae Seung President & Chief Executive Officer
② Oh, Jung Sik Standing Director
③ Ro, Sung Tae Outside Director
④ Shin, Sang Hoon Outside Director
⑤ Park, Sang Yong Outside Director
⑥ Tian, Zhiping Outside Director
⑦ Chang, Dong Woo Outside Director
⑧ Bae, Chang Sik Non-Standing Director
④ ⑤ ⑥ ⑦ ⑧
②
①
③
executive Vice Presidents
Jang, An Ho Retail Banking Business Group
Kim, Yeong Bae International Trade Business Group
Hong, Hyun Poong Digital Banking Business Group
Cho, Woon Haeng Business Support Unit / Human
Heo, Jeong Jin Institutional Banking Business Group
Cheong, Chai Pong Investment Banking Business Group
Resources Group
/ Information Security Division
Lee, Chang Jae Real Estate Finance Business Group
Park, Seong Il Compliance Officer
Lee, Dong Yeun Domestic Business Unit / Retail Banking Busi-
Kim, Jeong Ki Corporate Banking Business Group
Kim, Sun Kyu Credit Support Group
ness Group, Small & Medium Corporate Banking Business Group
managing Directors
Ha, Tae Joong Corporate Restructuring Division
Cho, Su Hyeong Consumer & Brand Group
Jeong, Jong Suk Wealth Management Group
Lee, Jong In Risk Management Group
Park, Hwa Jae Operation & Support Group
Park, Kyong Hoon Global Business Group
Lee, Won Duk Management & Finance Planning Group
Shin, Myung Hyuk Trust & Pension Business Group
Kim, Jong Deuk Financial Market Business Group
Choi, Hong Sik Next Generation ICT System Building Division
Choi, Dong Su Future Strategy Division
WOORI BANKANNUAL REPORT 2017 013
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
013
Governance Award
Best Company in Governance
(Board of Directors)
The Maeil Business Newspaper,
Daishin Economic
Research Institute
Committees under the Board of
In order to ensure the efficient operation of the
Directors
Board of Directors, Woori Bank has established a
Compensation Committee
The Compensation Committee monitors the design
Board of Directors Management Committee, an
and operation of the bank’s performance-based
Audit Committee, a Risk Management Committee,
compensation systems and is in charge of inde-
a Compensation Committee, and an Officer Candi-
pendently establishing compensation policies.
date Recommendation Committee.
Board of Directors Management Committee
The Board of Directors Management Commit-
Officer Candidate Recommendation
Committee
The Officer Candidate Recommendation Commit-
tee actively supports the activities of the BOD by
tee recommends candidates for the positions of
studying and reviewing its overall function and
President & CEO, outside directors, and members
operation, while also establishing and reviewing
of the Audit Committee.
succession and training plans relating to the man-
agement team, including those of directors.
Audit Committee
The Audit Committee establishes and executes
internal audit plans, makes outcome evaluations,
In 2018, Woori Bank will make significant improve-
2018 Plans
ments to its management by discussing major
carries out follow-up measures, and provides
agenda items at BOD meetings.
improvement plans to evaluate and enhance the
appropriateness of the internal control systems
and management performance evaluations.
Risk Management Committee
The Risk Management Committee makes deci-
sions 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 predict, measure, and monitor over-
all risks arising from the bank’s management and
transactions in a timely manner.
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 of the 2018 management plan, with ad hoc
meetings also being held whenever needed to deal
with agenda items related to diverse matters such
as management goals, organization and financing.
In 2018, Woori Bank will maintain its position as
a reliable banking partner that excels and grows
through transparent and efficient management
innovation.
Type of Meeting
No. of Agenda Issues
No. of Briefings
Major Issues
Shareholders’ Meeting, BOD and
Corporate Governance, etc.
Accounting/ Financial
Management
Portfolio & Risk Management/
Investment/Audit & Inspection/
Gov. Regulation
HR/Organizational Management
Others
Total
12
8
3
3
18
44
2
4
18
1
17
42
General shareholders’ meetings; corporate governance issues;
management plans and strategies (establishment and implementation)
Approval and revision of closing financial statements; reporting and
planning of financial results; bond issuance planning (including bonds in
foreign currency) and limit controls
Integrated report on major loans; status report on bad loans; audit and
internal control issues
Appointment and dismissal of Compliance Officers; appointment and
dismissal of persons responsible for major responsibilities; appointment
and dismissal of executive vice presidents and managing directors
WOORI BANKANNUAL REPORT 2017
014
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
014
Company Structure
On August 22, 2016, the Public Fund Oversight Committee (PFOC) of Korea announced a plan to sell Woori
Privatization of Woori Bank
Bank to oligopolistic shareholders. At the time, the state-run Korea Deposit Insurance Corporation (KDIC)
owned 51.06% of the bank’s stake, and the plan was to sell 30% of the KDIC stake (a bidding volume of 4~8%
per bidder) through bidding in Competitive Auction Scheme. In principle, the shares were sold to the highest
bidders, but, the PFOC also took into account factors other than bidding price considering the winning share-
holders’ potential influence on Woori Bank’s management. The KDIC launched this auction process of selling
its Woori Bank stake, starting with a public note of sale on August 24th, 2016. On September 23th, 2016, a total
of 18 investors submitted letters of intent with bidding volumes far exceeding the range from 82% to 119% out
of the KDIC’s target 30% stake. As the auction closed on November 11th, 2016, 8 potential investors submitted
bid letters for a total bidding volume of 33.7%. The PFOC successfully resolved to sell 29.7% stake to 7 selected
bidders. The PFOC’s long years of utmost effort to privatize became a reality, and it was necessary to guaran-
tee autonomous management by the private parties. As a result, on December 16th, 2016, the PFOC decided to
terminate the Memorandum of Understanding (MOU) between KDIC and Woori Bank, and actively encourage
market-driven autonomous management led by oligopolistic shareholders.
Meanwhile, out of 2.97% of the KDIC’s stake exempted from the sale and spared for call options for minority
stakeholders selected in 2014, 2.94% was exercised by the deadline of December 8th, 2017.
Accordingly, the remaining equity stake held by the KDIC decreased to 18.43% as of the end of 2017. Given the
need to recover public funds invested, the Korean government intends to continue in selling the remaining
stake as early as possible.
Domestic
Present Status of Woori Bank’s Subsidiaries
Woori Card
Co., Ltd.
100%
Woori
Investment
Bank Co.,
Ltd.
59.83%
Woori FIS
100%
Woori Finance
Research
Institute Co.,
Ltd.
100%
Woori Credit
Information
Co., Ltd.
100%
Woori Fund
Service Co.,
Ltd.
100%
Woori Private
Equity Asset
Management
Co., Ltd.
100%
International
Woori
America
Bank
(U.S.A.)
100%
Woori Global
Markets Asia
Limited
(Hong Kong)
100%
Woori
Bank China
Limited
(China)
100%
AO Woori
Bank
(Russia)
100%
Banco Woori
Bank do
Brazil S.A.
(Brazil)
100%
Woori
Finance
Cambodia Plc
(Cambodia)
100%
PT Bank
Woori
Saudara
Indonesia
(Indonesia)
79.88%
Woori
Finance
Myanmar
Co., Ltd.
(Myanmar)
100%
Woori Wealth
Development
Bank
(Philippines)
51%
Woori Bank
Vietnam
Limited
(Vietnam)
100%
WOORI BANKANNUAL REPORT 2017 015
Woori Bank awards
2017
The Bank of the Year 2017 Asia-Pacific
Best Transaction Bank Award, The Future of Finance Summit
Best Cash Management Bank, The Future of Finance Summit
2017 Presidential Commendation for Services in Social
Enterprise Incubation
Best Bank in Preventing Voice Phishing Damages, 2017 First Half
11th National Sustainable Management Award
Consumer’s Choice Star Brand Grand Prize in Integrated
Financial Membership
Minister’s Prize in Service, the 4th Korea Big Data Awards
Governance Award, Best Company in Governance
(Board of Directors)
Excellence in Banking Sector, the 4th Korea Retirement
Pension Award
Commendation by Minister of Trade, Industry and Energy
(for Promotion of Expert)
Grand Prize, Korea’s Best Banker
The Banker
Asian Banker
Asian Banker
Ministry of Employment and Labor
Financial Supervisory Service
Ministry of Strategy and Finance
Maekyung Media Group
Maeil Business Newspaper,
Ministry of Science and ICT
The Maeil Business Newspaper,
Daishin Economic Research Institute
Mercer Korea
Ministry of Trade, Industry and Energy
The Seoul Economic Daily
Seoul Metropolitan Government
2017 Business Supporting the Employment of Multicultural Families
Asia Today
Best Bank in Cutting Edge Banking, 2017 Asia Today Financial
Grand Prize
Money Today thebell
Grand Prize, 2017 Risk Manager Awards
(FSS [Financial Supervisory Service] Chairman’s Award,
awarded to one company out of all categories)
Chairman’s Award of the Korea Commission for Corporate
Partnership, the 4th CSV Awards
Excellence Prize, HK Wow TV Global Financial Grand Prize
2017 Customer Satisfaction + Awards (Hall of Fame in Banking)
Chief Information Security Officer(CISO) of the Year
The Korean Academic Society of
Business Administration
HK Wow TV
The Korean Economic Daily
Korea Forum of Chief Information
Officers, the Federation of Korean
Information Industries
015
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017
016
News highlights
Woori Bank Selected as the
Primary/Custodian Bank for the
National Pension Service
Woori Bank was selected as the primary and
custodian bank for securities assets by the
1
npS, the world’s third-largest pension fund in
rank gives a bank the power to choose the asset
category it will manage, be it securities, bonds or
alternative assets. The usual order of preference
is securities- bonds- alternative assets, and Woori
Bank was thus able to continue with its existing cus-
todian business. The position of custodian bank is
as attractive as that of primary bank. In this bid-
size with a total of krW 600 trillion in funds
ding, Woori Bank was highly rated for its decade-
Woori Bank was selected as the primary and cus-
todian bank of the National Pension Service (NPS)
that manages KRW 600 trillion, the world’s third
largest pension fund in size. On October 16, 2017,
the NPS announced that it had selected Woori
Bank as the preferred bidder to become the pri-
mary bank for the NPS banking business, which
includes pension premium collection, pension pay-
ment, and operational funds settlement. Korea’s
four major commercial banks competed in this cru-
cial bidding, and Woori Bank focused all its compe-
tencies on becoming the successful bidder with an
exclusive team to handle the NPS business. Woori
made thorough preparations not only in the pri-
mary banking business but also in information
long zero defect performance and experience in
handling business for securities, bonds, and alter-
native assets. The selection helped Woori Bank to
maintain its custodian banking market share and
become Korea’s number one bank.
Woori Bank’s WiBee Women’s Pro-
fessional Basketball Team Achieves
V9- Its 9th Championship and 5th
Consecutive Title
the team broke new ground by winning the cham-
pionship match for the fifth consecutive season in
2
projects and its mid- and long-term strategy.
the Women’s korean Basketball League
These efforts paid off, and Woori Bank became the
The WiBee women’s professional basketball team,
primary bank of the NPS, a position held by another
dubbed the ‘absolute power’ of the Korean wom-
bank for the past ten years. Becoming the primary
en’s basketball, emerged victorious in the 2016-
bank of the world’s third-largest pension fund pro-
2017 Women’s Korean Basketball League (WKBL).
moted Woori’s profile and brand image in and out-
On March 20, the team played its third and final
side Korea. Woori Bank was also selected as the
championship match against the Samsung Life
most preferred bidder to become the NPS cus-
Insurance team at the Yongin Gymnasium and
todian bank to maintain and manage the invest-
scored a thrilling come-from-behind victory, win-
ment assets of the NPS funds. The preferred bidder
ning in overtime with a score of 83-72 against its
016
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017
017
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
017
opponent. The committed drive of all players to
by expanding entry into Southeast Asian markets that
win the team’s fifth consecutive title at the cham-
offer high growth and profitability as well as by diver-
pionship could be seen in their overwhelming skills
sifying the bank’s business based on models custom-
and solid team synergy. With a record of 33-2 with a
ized for the local environment, such as through the
success rate of 0.943 percent in the regular season,
savings bank and credit finance models. Meanwhile,
the team achieved the highest winning rate among
existing local operations (in Indonesia, Myanmar,
all professional sports teams in Korea. In January
Cambodia and other countries) are scaling up their
2017, the team was already crowned the cham-
respective businesses, enlarging sales coverage with
pion of the season with a record of 24-1, yet its con-
new networks. Woori Bank also opened a local oper-
trol over games did not falter—it still managed to
ation in Vietnam in January 2017 and acquired Wealth
achieve a 9-1 record in the remaining ten games.
Development Bank in the Philippines, increasing local
The WiBee team has never stopped improving itself
business growth at a rapid pace.
season after season, although it has already been
crowned the most powerful team in the league.
Our cheers go out to the players who are still work-
ing as hard as ever to make history with a V10 – the
team’s 10th victory in the championship.
Expanding Our Global Presence,
Maintaining the Bank’s No. 1 Posi-
tion in Global Networks
enlarging the foundation for global and over-
seas business through entry into new markets,
localization, and network expansion
3
In 2017, Woori Bank cemented its position as a leading
global bank. By the end of the year, we have 301 over-
seas networks in 25 countries, including the newly
opened regional headquarters in Mumbai, India.
Woori Bank now has the largest overseas network
among Korean commercial banks. This was achieved
In terms of the bank’s inorganic growth strategy
through mergers and acquisitions, Woori Bank has
achieved outstanding results. The bank accumulated
know-how and useful experience in the process of
acquiring Saudara Bank in Indonesia in 2014. Taking
advantage of the knowledge gained, we pushing for-
ward with our entry into the Southeast Asian region.
The bank’s push into Europe also remains active,
with a new representative office opened in Katowice,
Poland in February 2017 and a local operation sched-
uled to open soon in Germany. Woori Bank is thus
building its European Financial Belt. The bank also
plans to further expand in Southeast Asia, which has
high growth potential, and to increase the number of
its global networks to over 500. We will launch new
businesses in these markets using best-selling prod-
ucts from Korea and our credit card business. We have
high hopes for the bank’s global business as it imple-
ments growth in volume and quality to realize its goal
of becoming one of Asia’s Top 10 and a Global Top 50
bank.
the No. 1 Position
in the Global Network
WOORI BANKANNUAL REPORT 2017 018
Woori Bank, Named the Bank of
the Year 2017 in the Asia-Pacific
Region by The Banker
Woori Bank saw its position and credibility in
the global arena go up as the Banker maga-
zine named it the Bank of the Year 2017 in the
4
Over 5-Million Subscribers to the
WiBee Platform
WiBee talk, a financial platform leading the
digital market, now has more than five million
5
subscribers
WiBee Talk, the first mobile messenger in the
Asia-pacific region
On November 30th, 2017, Woori Bank was named the
Bank of the Year in the Asia-Pacific region at The Banker
Awards 2017 hosted by the world-renowned The
Banker magazine. The Banker evaluated almost 1,000
banks from 120 countries from around the world and
selected the best bank from each country and region.
In 2016, Woori Bank, after having been named the Best
Bank of the Year in Korea, has now been selected as the
Bank of the Year in the Asia Pacific region. The Banker is
an international financial affairs publication founded in
1926, owned by the Financial Times. It is a highly presti-
gious magazine in the banking sector, which publishes
the list of the Top 1,000 World Banks every year, a list
most frequently quoted in the financial markets.
Korean banking sector, has over five million sub-
scribers now, only 600 days since its launch in 2016.
This means that the platform acquired an aver-
age of 5.3 new subscribers per minute and that its
diverse services catered to the daily needs of cus-
tomers. However, WiBee Talk is only one part of the
entire WiBee platform. There is also mobile WiBee
Bank, the first digital bank of its kind launched in
Korea in 2015; WiBee Members, an integrated plat-
form for membership management; and WiBee
Market, an open market online shopping mall.
Woori Bank successfully built the WiBee platform
in only about a year, stirring the digital scene in
the market. The bank has led digital innovation in
the financial sector, successively launching various
services and content such as WiBee Cam, WiBee
Woori Bank was well recognized for its global expan-
Honey Partner, real-time foreign language transla-
sion strategy to overcome the limited growth poten-
tion services, as well as SORi, and AI voice recog-
tial in the Korean market. Other aspects highly rated
nition banking functionality for WiBee Talk. Woori
included: intensive qualitative growth in each busi-
Bank has integrated the WiBee platform within its
ness area; the mobile WiBee Bank that demonstrated
278 overseas network customer contact points as
the bank’s competitive edge within a radically chang-
well, enhancing its retail finance reputation in each
ing financial environment; WiBee Talk, another mobile
local market. The creation of value in business is
platform pioneering the fin-tech market in Korea; and
moving rapidly onto the digital platform; a digital
continued enhancement of management performance
platform now correlates to the competitiveness of
based on improvements in financial services, profit-
a business. Accordingly, Woori Bank will lead the
ability, and integrity. This designation is the pinnacle of
digital market by creating an ecosystem within the
global recognition for Woori Bank’s strategy for proac-
WiBee platform in which people can start and end
tive overseas expansion and digital banking to secure
their day using WiBee Talk.
new growth engines. This award has provided another
firm foundation for the bank to secure its credibility and
status as a global bank.
018
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017 019
Presidential Commendation for
Services in Social Enterprise
Incubation: Exclusive Recipient in
the Financial Sector
Woori Bank was the exclusive recipient in the
korean financial sector of this commendation
7
awarded by the Ministry of employment and Labor
Designated as the Best Bank in
Preventing Voice Phishing Losses by
the Financial Supervisory Service
preventive actions against voice phishing pro-
mote our corporate value as a bank taking the
initiative in protecting customer assets
6
On September 9, 2017, Woori Bank received a letter
of recognition from the Financial Supervisory Ser-
In the 2017 Ceremony for the 10th Anniversary of Social
vice (FSS) of Korea, having been designated as the
Enterprises hosted by the Ministry of Employment and
Best Bank in Preventing Voice Phishing Losses. The
Labor, Woori Bank received the Presidential Commen-
FSS considered the scale of prevented voice phish-
dation for Services in Social Enterprise Incubation. This
ing scams, the number of arrests made against
government commendation is an award given biannu-
offenders in charge of fund withdrawals, the extent
ally since 2008 to promote awareness of social enter-
of the contribution made by bank employees and
prises as well as develop and spread best practices
many other factors during the first half of 2017 and
in this area. Those eligible for this award are the best
eventually sent out letters of appreciation to 23
social enterprises that have contributed to improv-
employees at 21 financial companies. To prevent
ing social cohesion and the quality of people’s lives,
financial fraud, Woori Bank has constantly refined its
employers and officers who have contributed to incu-
monitoring system and opened a new direct report-
bating social enterprises, and organizations or individ-
ing channel so that our employees can quickly com-
uals who have contributed to promoting social enter-
municate with the monitoring officer in the event of a
prises by way of financial support or management
large withdrawal. As a result, as of the end of Novem-
consulting. Woori Bank received this commendation
ber 2017, the bank has prevented 2,761 voice phish-
in recognition of the financial support and manage-
ing scams and prevented associated losses of KRW
ment consulting offered to social enterprises. Woori
15 billion. Woori Bank prevented assets amounting
Bank was the sole recipient of this commendation from
to KRW 10 billion from being misappropriated in the
the Korean financial sector. Since 2005, Woori Bank
shortest period (as of August) in the whole financial
has been offering consulting free-of-charge for social
sector and contributed to arresting about 200 voice
enterprises and supports customized loan products
phishing offenders who tried to withdraw money, for
developed specifically for them. In 2013, we concluded
which a total of 67 branch employees received a let-
a Business Agreement to Support the Ecosystem of
ter of appreciation from the police. As many of these
Social Enterprises with the Ministry of Employment
cases were covered by the media, our image as a
and Labor. The bank still strives to assist and promote
bank striving to protect customer assets received
social enterprises through business support and pur-
both internal and external media exposure, signifi-
chases. The role of social enterprises is increasingly
cantly promoting our corporate value. Woori Bank is
important today, and national interest in them has
committed to exerting its best efforts to respond to
been heightened. Woori Bank is committed to help-
increasingly sophisticated voice phishing scams and
ing social enterprises through diverse channels so that
to protect the precious assets of our customers.
they can improve social cohesion and the quality of
people’s lives in Korea.
019
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017 020
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
020
Financial highlights
Net Income
[ Wbn, U$mn in ( ) ]
2015
1,059
(988)
2016
1,261
(1,177)
2017
1,512
(1,411)
[ Wbn, U$mn in ( ) ]
Interest Income
[ Wbn, U$mn in ( ) ]
Non Interest Income
5,019
(4,685)
5,221
(4,873)
1,252
(1,169)
4,762
(4,445)
4,493
(4,194)
+
4.0%
+
5.4%
+
6.0%
2014
2015
2016
2017
706(659)
867(809)
+
44.4%
461(430)
+
53.1%
2014
+
22.8%
2015
2016
2017
* Consolidated Basis, Based on exchange rate of KRW1,071.4/USD as of Dec. 29 2017
Net Income(Continuing Operations) attributable to owners
Assets
[ Wtn, U$bn in ( ) ]
Loan in Local Currency
total Assets
7
1
0
2
6
1
0
2
5
1
0
2
4
1
0
2
(187)
200
(178)
191
(272)
185
(156)
167
(332)
356
(320)
343
(297)
318
7
1
0
2
6
1
0
2
5
1
0
2
4
1
0
2
* Consolidated Basis, Total Assets include Trust Account
Based on exchange rate of KRW1,071.4/USD as of Dec. 29 2017
(272)
297
Funding
[ Wtn, U$bn in ( ) ]
deposit
total Funding
(219)
235
(206)
221
(195)
209
(176)
189
(276)
296
(271)
290
(255)
273
(235)
252
WOORI BANKANNUAL REPORT 2017 021
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
021
[ Unit : % ]
Dividend
[ Unit : % ]
Profitability (ROA & ROE)
ROA
ROE
5.69
7.42
6.36
3.55
0.37
0.41
0.48
2014
2015
2015
2016
2016
2017
2017
0.21
2014
* Consolidated basis
* 2014: excluding one-off factors related to the sale and the spin-off subsidiaries
[ Unit : % ]
Asset Quality (NPL Ratio)
NPL Ratio (Bank)
NPL Ratio (excl. 4 shipbuilders*)
2.10
1.62
1.47
1.24
2014
2015
0.98
0.91
2016
0.83
0.80
2017
* 4 Shipbuilders : Sungdong, SPP, Daesun, STX
Credit Cost Ratio
[ Unit : % ]
2016
2017
400
600
* 2017 : including the interim dividend
21.35
26.71
(KRW)
Dividend per
Share
(%)
Payout Ratio
100(KRW)
[ Unit : % ]
Capital Adequacy
BIS Ratio
Tier1 Ratio
CET1 Ratio
13.66
10.43
8.47
2015
15.29
12.68
10.50
15.40
13.03
10.95
2016
2017
[ Unit : % ]
Credit-to-Income-Ratio
Cost-to-Income Ratio
Cost-to-Income Ratio(excluding ERP Expense)
0.52
0.45
0.37
0.34
2014
2015
2016
2017
57.6
53.9
2015
59.1
56.1
2016
54.6
2017
49.9
* Consolidated basis
Credit Cost Ratio = Credit cost/average Total Credit balance
* Cost-to-income ratio =
SG&A expense / (Interest Income + Non-Interest Income)
WOORI BANKANNUAL REPORT 2017
01
BuSineSS
OpeRATiOnS
With the 4th industrial revolution underway, the market conditions are
changing and evolving rapidly. Woori Bank will lead this new era, turning
challenges into opportunities, diversifying our bases for revenue, and
achieving stable growth. As we take our business to the next level based on
the trust of our customers and shareholders, we will make sure to repay their
trust with bigger profits and enhanced levels of satisfaction.
Reliable Financial Services
through Balanced Growth
No. of foreign
Customers
[unit : thousand people]
1,032
Branches
876
No. of SOHO
& SME Clients
[unit : million]
1.48
Total Customers
of Retail Banking
[unit : million people]
22.56
Loans in Local Currency
Deposits
Note) Consolidated Basis
+3.3%
185
191
%
+4.7
200
2015
2016
2017
[unit : krW trillion]
+5.7%
209
221
%
+6.2
235
Leaping Forward to Become a Leading Global Asset Management Bank
WM Distribution Channels
PB&FA
Bancassurance Sales/Income
Managing WM distribution
channels nationwide
Delivering comprehensive
asset management and
consulting services.
Enhancing Our position as the
leading bancassurance provider
707
721
No.1
Growing Our Financial Services
through a Global Network
With its 301 customer contact points internationally—the largest global network
among Korean banks—Woori Bank is making its globalization push the core compe-
tency in its drive to become a leading global financial institution
Head Office
Woori Global
Total Networks
Overseas Branches
301
Representative
Office
19
Overseas Subsidiaries
(278 Contact Points)
4
10
in the Expansion of
Fintech (in 7 Countries)
No.1
Net Profit of Global
Business
[unit:USD million]
143
Leading the 4th
Industrial Revolution
Digital Financial Platform
Big Data
+
AI
+
Block-chain
Feb.
Mar.
May
Sep.
Oct.
2017
WiBee
Talk
Real-time
translation
service
in 16+
languages
SORi
AI banking
service
with voice
recognition
function
Woori
Robo-alpha
AI-based
financial adviser,
providing financial
consultation to
customers
Wibee Bot
Pepper
Chatbot
service
First humanoid
robot used
in financial
services
024
retail Banking
037
global Business
026
Wealth Management
040
international trade Business
028
trust & pension Business
042
Financial Market Business
030
Corporate Banking
044
investment Banking
032
SMe Banking
045
digital Banking
034
institutional Banking
046
risk Management
036
real estate Finance
024
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 financial products
and services to our clients.
024024
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
In 2017, the number of Woori Bank retail customers is approximately 22.6 mil-
2017 Performance
lion, a number that drives us to do our best in developing innovative and differ-
entiated products. Woori Bank has implemented projects to ensure a broader
retail customer base including the Baby Project, the School Project, and the
Teens Future Dream Project, presenting diverse financial products and services
by life stage: products designed for infants, students, employees, homemakers
and senior citizens presented using targeted marketing by customer segment.
In addition to the launch of life-stage branded products, we aim to secure more
customers who use Woori Bank as their primary bank. This is why we have con-
cluded new prime power loan (PPL) agreements for the employees of businesses
with prime credit ratings and also handled loans related to employee stock own-
ership plans (ESOP) for companies going public with initial public offerings (IPO).
We have measures in place to enable customers to handle banking transac-
tions without the constraints of time or place: the Tablet Branch as a tool for
out-bounding banking services to reach out to customers, and the WiBee Smart
Branch allows automated WiBee Smart Kiosks to handle transactions. All of
these services are part of our commitment to put customer satisfaction first.
new product Lineup by Life Stage Brand Strategy, Aiming to
Attract new Customers and Make Woori the primary Banking
partner for existing Customers
In 2017, we launched new products and renovated our existing product line up
under our life-stage brand strategy so that we can attract new customers and
encourage existing customers to make Woori Bank their primary banking partner.
Our products are designed for target groups such as teenagers, college stu-
dents, employees, and senior citizens at retirement age. All our products are tai-
lored to match the generational needs and benefits preferred by each group.
The WiBee Friends Account and the School Card linked to it are offered to the
bank’s younger customers. As School Card usage increases, customers will be
eligible for account fee exemptions. If they refer a friend or buy a group prod-
uct, they will also be eligible for special interest rates. College students who
are interested in employment, credentials, and language learning may open a
WiBee Honey Youth Account and receive additional services as they earn certi-
fications, go to the movies, and travel. They can also enjoy free-of-charge trans-
fers when they pay their credit card or mobile phone bills.
The WiBee Super Primary Account is designed chiefly for full-time employees.
When customers use it as a primary account to transfer their salary, pension,
utility and credit card bills, transfer charges are waived (for all transfers to other
Woori Bank accounts; up to five transfers per month to accounts at other banks).
We also launched products for seniors who want to enjoy life after retirement. In
partnership with a Korean travel agency, Mode Tour, we released an installment
deposit product with high interest rates. The Woori Well-Rich 100 Plus Package is
a product that offers healthcare, spa, and other services when customers receive
pension benefits from any one of the four public Korean pension schemes.
We worked in collaboration with businesses from other industries such as G
Market, Auction, and Samsung Digital Plaza, as we take diverse customer needs
into account and offer useful financial services for everyday life.
Branch-in-Branch for Comprehensive Financial Services
To satisfy changing customer needs, Woori Bank concluded a partnership
agreement in March 2015 with Samsung Securities, Korea’s number one secu-
WOORI BANKANNUAL REPORT 2017 025025
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
Total Customers of
[Unit : 1,000 people]
Retail Banking
2016
21,973
2017
%
+2.7
22,561
Total Loans of
[Unit : KRW trillion]
Retail Banking
2016
105.0
%
2017
+3.8
109.0
[Unit : KRW trillion]
Total Deposits of Retail Banking
2016
2017
%
88.5
+0.6
88.0
%
96.8
+3.2
93.8
Deposits in KRW
(existing)
Deposits in KRW
(including trust)
025
rities firm and started branch-in-branch (BIB) operations. As of 2017, the bank
runs a total of seven BIB outlets.
The BIB is not just a financial transaction window; it plays the role of a sales and
services channel, which provides Woori Bank customers with additional con-
sulting and sales capabilities. In 2018, we plan to develop products in partner-
ship with Samsung Securities and establish more BIB operations to start mar-
keting activities for high net worth customers and sustain the synergy between
our banking and securities businesses.
Optimized and efficient Distribution Channel networks
Responding to the changing financial environment, Woori Bank quickly entered
into areas with new growth potential and established branches in newly devel-
oped or major commercial zones. The bank also merged or relocated branches
suffering from low profitability, those with overlapping geographical cover-
age, and strategically weak locations. While six new branches opened, 24 were
merged, and 16 were relocated; as of the end of 2017, a total of 876 branches are
in operation. Establishing an effective branch network improved our profitability.
To boost competitiveness in our sales organization through a highly effective
channel, the bank operates Exclusive Branches for Retail Banking. This special-
ized retail distribution channel strengthened our sales competencies in indi-
vidual retail business. With this move, we also built a distribution system under
which financial centers can concentrate on corporate business, and exclusive
branches can focus on retail.
We also wanted to reinforce the efficiency of workforce management and
improve the skills of all our employees. To that end, we reorganized our existing
windows, from the system of four basic windows to a two-team system com-
posed of a Deposit Team and a Total Consulting Team. The integration of teams
added efficiency to our human resources, and after this reorganization, we have
been able to use some of our people to take charge of outbound operations,
ultimately bolstering customer management and acquisition.
We now have a new kind of branch called the WiBee Smart Branch that makes
use of the WiBee Smart Kiosk, our new non-face-to-face digital channel. This
branch allows customers to handle banking transactions outside of business
hours, subscribe to savings or deposit products, handle a variety of registration
forms, pay utility bills, and use ATM functions.
In 2018, the Retail Banking Business Group plans to carry out a project to expand
2018 Plans
the scope of its target customers so that we can broaden our customer base amid
a slow-growth market and cut-throat sales environment. We will liaise with govern-
ment subsidy projects and partner with industries that are a part of everyday life.
Furthermore, we plan to launch marketing strategies targeted to appeal to custom-
ers in their 50s and 60s, in the face of very low birth rates and a quickly aging pop-
ulation. To make the plan more effective, we will extend our loyalty programs for
pension recipients and launch exclusive packages for customers in this age group.
While we aim to optimize branches based on the scale of local financial assets,
characteristics and customer base, we also plan to set up financial service chan-
nels in places where our customers require greater accessibility. For instance,
there are regions where financial services are few and far between as well as
new housing development project zones. By assigning our channels efficiently
to such locations, we will stand by our customers and fulfill our role as a respon-
sible banking institution.
WOORI BANKANNUAL REPORT 2017
026026
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
026
Wealth
management
The Wealth Management (WM) Group oversees
private banking (PB) services, focusing on
high-net-worth (HNW) customers and the
bank-wide asset management business. The
WM Group consists of 11 teams under three
departments (the WM Strategy Department,
WM Business Department, and WM Advisory
Center). As of the end of 2017, the WM Group
manages a total of 707 WM distribution
channels nationwide. 721 private bankers,
financial advisors (FAs), and sales professionals
deliver comprehensive asset management and
consulting services to around 179,000 HNW
customers. Our specialists work together
through an independent PB brand called Two
Chairs as they offer best-in-class services.
WM Group
WM Strategy
department
WM Business
department
WM Advisory
Center
WM Affairs Team
Fund Business
Team
Future Planning
Team
Bancassurance
Business Team
WM Platform
Team
Investment
Strategy Team
Investment
Product
Development
Team
ISA Trading Team
Asset
Management
Consulting
Center
Tax Consulting
Center
Real Estate
Investment
Support Center
2017 Performance
Outstanding performance in Affiliate products: Funds and
Bancassurance
In 2017, Woori Bank achieved growth in volume, ranking first in market share
measured by net fund value increase and number one in bancassurance sales/
income. Total fund value went up by KRW 1.7 trillion, showing the strongest
upturn among all competitors. As we held seminars for large companies and
institutional customers and released tailored products by customer segment,
private equity fund assets amounted to KRW 6.7 trillion in total. In the bancas-
surance sector, Woori Bank accounted for 32.9 percent of the total market share,
thus defending its undisputable number one status and enhancing its position
as the leading bancassurance provider.
Achieving the Highest Yield in Discretionary individual Savings
Accounts (iSA) in the Banking Sector; Yield-Oriented Sales
for Customers
ISA is a leading wealth accumulation scheme in which Woori Bank has shown
remarkable performance. We launched a discretionary ISA scheme in April 2016
and maintained the top position among all Korean commercial banks in terms
of nine-month cumulative yield (as of the end of 2017). While the market condi-
tions were rather unfavorable as other competitors collaborate with an affiliate
securities firm under the same holdings company, Woori Bank showcased excel-
lent asset management capabilities.
We also hosted an in-house Fund Returns Challenge to create a sales environ-
ment where our employees can take the initiative in developing good products
and consider customer profits a priority. We also added a portfolio evaluation
criterion to the fund returns index for customers and focused on generating sta-
ble profits through asset allocation.
Launch of Ai-Based Robot Advisor, Woori Robo-Alpha
In May 2017, Woori Bank officially launched a robot advisor program called
Woori Robo-Alpha. The Woori Robo-Alpha employs artificial intelligence (AI) to
suggest the best asset allocation portfolio based on customer information and
tendencies. Every three to four months, it reevaluates the portfolio and decides
whether or not rebalancing is necessary. The decision is sent out to customers
either by the bank’s in-house WiBee Talk messenger or via text messenger ser-
vices. The minimum subscription amount is set at KRW 100,000 so that anyone
take advantage of wealth management at an affordable price. The new program
is playing a big part in boosting our non-face-to-face digital channel growth.
Sales Cooperation Between SMe RM and pB/FA
Woori Bank has established a system of cooperation between small and
medium enterprise (SME) relationship managers (RMs) and PBs
The system is mainly about how to provide asset consulting to SMEs with loans
from the bank, and how to induce PB customers with loans at other banks to
switch to Woori Bank. We motivated our employees by including cooperation
as a criterion in performance appraisals as well as by offering joint awards/
rewards. Their efforts have turned many SME CEOs into Woori Bank customers,
who in turn played a huge role in increasing the number of PB customers.
Thanks to such enthusiastic sales efforts and management of designated
human resources, the number of PB customers (those who have more than KRW
100,000,000 in deposits) has gone up by approximately 13,000 in 2017.
WOORI BANKANNUAL REPORT 2017 027027
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
Total Number of
[Unit : 1,000 trillion]
WM Customers
2016
166.1
2017
+13.1
179.2
Total Deposits of Wealth
[Unit : KRW trillion]
Management Banking
2016
47.6
2017
+5.7
53.3
[Unit : KRW trillion]
Fund Sales Balance
FY16
FY17
%
+8.2
15,439
16,701
%
+14.5
79
69
Fund Sales
Balance
Fund Sales Fee
Revenue
027
WAMu: Woori Asset Management university: The First in-house
Training institute in the Korean Banking Sector to Foster experts
Woori Bank has taken the initiative in recruiting and fostering asset manage-
ment specialists. The Woori Asset Management University (WAMU), the first
in-house asset management training institute in the Korean banking sector,
offers a diverse asset management curriculum that covers everything from basic
theories to intensive coursework.
In 2017, we recruited 300 next-generation PBs and FAs. Having been trained through
WAMU programs to become field specialists as early as possible, they were soon
assigned to branches. WAMU also conducted customized training for 645 existing
PBs and FAs according to individual skill level. This is an example of how Woori Bank
is using its differentiated training system and fostering asset management experts.
Our 2018 vision is “Growth Based on Four Foundations; Leaping Forward to
2018 Plans
Become a Leading Asset Management Bank.” Our four foundations are sustain-
able growth, customers, profit, and digital/caring finance, based on which we
will carry out customer-centric sales.
First, we will build up our competencies focusing on channels and people so
that we can offer quality asset management services to customers. New exclu-
sive asset management branches will open to provide differentiated services.
At the same time, we will implement various asset management training pro-
grams to foster professional PBs, increase our PB pool, and establish a career
development program (CDP). We also offer an entirely new Master PB program.
Master PBs are the bank’s most competent employees who have demonstrated
the best possible performance in each field. They will be encouraged to transfer
their individual sales skills and know-how to boost the asset management com-
petencies of all our employees.
Second, our goal is to pass the 200,000 mark in the number of registered PB cus-
tomers and acquire 50,000 pension recipients from any of Korea’s four public pen-
sion schemes as customers. We will also launch special services and exclusive
products targeting SME CEOs, the families of our existing PB customers, and cus-
tomers in their 50s and 60s. Since Woori Bank is the primary banking partner of
the National Pension Service of Korea, we will pursue a partnership in order to add
more pension recipients to our clientele pool. We will strive to increase the number
of PB customers through retirement planning seminars and consulting services.
Third, we aim at quality growth in the partnership business, bolstering growth
in both volume and profitability. We have raised our profit goal by more than
KRW10 billion since 2017, and we will work with SMEs, global groups, and IB
groups to achieve this goal. Not only in bancassurance but also in the fund busi-
ness, our sales have a very strong profitability focus, and we will rank first in
market share in both sectors. We also plan to start a real estate consulting busi-
ness to find new sources of profit.
Finally, we will expand our non-face-to-face channel and contribute to wealth
accumulation and asset management for middle and lower-income customers.
The AI-based Woori Robo-Alpha will help all of our customers access and use
our asset management system with ease. By integrating the newest digital tech-
niques such as scrapping and big data, we will enable customized asset man-
agement for everyone on a 1:1 basis. Finally, we will introduce funds that provide
for community donations or funds for a cause and lead the ‘inclusive finance’ ini-
tiative included as part of the Korean government’s 100 Agenda Project.
WOORI BANKANNUAL REPORT 2017
028028
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
028
Trust &
Pension
Business
The Trust and Pension Business Group is
leading the market with successful business
models that continually meets customer asset
management needs, keeping up with a radically
changing market environment. As the sales of
trust products such as equity-linked trust (ELT)
2017 Performance
Trust Department
The Trust Department’s goal is to be “No. 1 in Generating Yield for Customers,
No. 1 Growth Rate and Creating a Cash Cow,” and has grown with a strategy
based on customization. To gain a competitive edge in the fast growing trust
business, we have built the “Trust Operation Platform” (a trust asset manage-
ment system), which allows our employees to upgrade their professional com-
petencies in asset management and investment portfolio planning.
As a result, we have promoted ELT, and ETF as core trust products. To expand
our business in the future, we have developed customer-focused investment
strategies by launching new products with timely market insight, and building
up our product line-up. With ELT, our sales result in 2017 reached KRW 8,569 bil-
lion, or 286% of our annual target. We then developed new products and diver-
sified underlying assets across diverse portfolios so that we can manage assets
according to market conditions and individual customer needs.
and the exchange-traded fund (ETF) grow,
Retirement pension Business Department
the Trust and Pension Business Group plays a
Since retirement pension schemes were introduced to the market, Woori Bank
leading role in pushing the bank’s overall non-
implemented a customer-centric strategy with a long-term perspective to help
interest income upward.
customers enjoy a stable retirement and to cope with labor market changes
There are experienced investment experts
utilizing advanced methods at Woori Bank,
based on which we can offer comprehensive
consulting services to customers; this is what
allows us to offer customized comprehensive
financial services in a growing retirement
pension market, including retirement planning
according to personal investment profiles
and efficient corporate retirement pension
management.
We have a broad range of experience in the
custody agent business gained from transactions
such as Korea’s rapidly aging society.
We publish a monthly ‘Happy Life Retirement Pension Newsletter’ which covers
major retirement pension issues, recent trends, asset management information,
and everyday life tips. For retirement pension customers who are still employed,
we provide information on retirement savings and asset management perfor-
mance through the Internet or mobile banking via the Happy Life Retirement
Pension Lifetime Account. These services enable our customers to manage the
retirement savings in their accounts with ease.
We have launched more aggressive marketing campaigns since July 2017 when
the eligibility for the Individual Retirement Pension (IRP) was expanded. As a
result, our IRP asset value has grown to KRW 1,594 billion as of the end of 2017.
Including this increase, our total retirement pension asset value has reached
KRW 15,003.5 billion, a KRW 2,012.5 billion increase from the previous year. The
with our diverse clientele consisting of 120
number of companies for which we manage retirement pensions is 27,151 as of
entities or so, including major institutional
the end of 2017. In the unbundled contract with the Korean Workers’ Compensa-
clients in Korea’s securities custody services
tion and Welfare Services (KWCWS), the KWCWS is in charge of operations, and
market as well as asset management companies.
Taking advantage of our experience, we will
provide custodian asset management services
that allow us to take preemptive action in the
face of market changes.
Woori Bank is in charge of asset management. In 2017, we saw an increase of
6,284 in the number of subscribed companies, with a total of 34,653 subscribers.
Custody Agent Department - Successful pension Fund Bidding,
Relationship with Lager Asset Managers
We have participated in two bids to select a custodian bank for the National Pen-
sion Service and the Ministry of Land, Infrastructure and Transport. In both bids,
we analyzed the institution’s needs proactively and presented differentiated
and customized proposals. In the end, Woori Bank was re-appointed as the cus-
todian bank for the two institutions, achieving a sweeping victory in both cases.
Our marketing targeted at insurance companies also turned two large insurers
into new customers. These achievements ensure we will see a steady increase
in our assets in custody.
WOORI BANKANNUAL REPORT 2017 029029
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
029
[Unit: KRW Trillion]
Money in Trust
%
14,119
+10.9
15,651
Retirement Pension
[Unit: KRW Trillion]
Assets
12.99
15.00
%
+15.5
2018 Plans
Trust Department
The 2018 business goal for the Trust & Pension Business Group is to ‘Dominate
the Trust & Pension Market.’ This goal means that we intend to become the num-
ber one bank in terms of increased trust market share. Accordingly, we plan to
differentiate marketing support and continue to improve and further develop
our core products.
With ELT, our core product, we will generate profits through balanced growth
between high-yield products and low-yield products, based on stable structure..
We also plan to promote ETFs as a key asset management product for customers.
To achieve our goals, we plan to have asset management functions in place to
cope with a variety of fluctuations in the financial market while making our prod-
ucts globally relevant. Hence, we will upgrade our trust asset management sys-
tem and risk management system.
Retirement pension Department
As Korea becomes a super-aged society, the importance of the retirement mar-
ket is increasingly highlighted in the banking industry. That is why Woori Bank
has selected retirement pensions as a core growth business and has decided
to carry out active marketing campaigns to secure a stable customer and profit
base over the long-term.
[Unit: KRW Trillion]
Assets under Custody
In 2018, the Retirement Pension Department will establish a foundation for
growth through distinctive marketing campaigns tailored for each target cus-
%
tomer group and become a leading retirement pension provider. We will rein-
force our product management competence to enhance yield for our custom-
129.54
+11.12
143.94
ers and promote efficiency in distribution channels. We will continue to lead the
retirement pension market using our expert human resource pool, training sup-
port system, diverse products, professional asset management competencies,
and a unique retirement planning service platform.
Custody Agent Department - increase in Asset Value by
Diversifying Customer Segments
Woori Bank has been in charge of the custody agency business for large pub-
lic funds. Based on such experience, we will launch marketing campaigns to
appeal to institutional customers that need to manage large-volume assets,
such as insurance companies and mutual aid associations. We will upgrade our
securities custody system and grow our expert human resource pool in order to
become a leader in the securities custody market.
[Unit: Number of Subscribers]
Retirement Pension
Trust Sales by Bank
[Unit: KRW Billion]
ELT Sales Volume
(Balance)
%
%
)
+324.2
(+215.7
2017
Trust Fee Revenue
Category
2016
2017
Charge(%)
Companies
55,640
61,804
11.1%
Employees
14.3%
* Including the number of subscribers liaised through the KWCWS
1,391,492
1,590,643
2016
2020
(1,390)
8,569
(4,388)
2016
85.9
%
+75.2
2017
150.5
Financial Review
2016
2017
WOORI BANKANNUAL REPORT 2017
030030
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
030
Corporate
Banking
The Corporate Banking Business Group
oversees services for corporate customers
including some of the biggest Korean corporate
groups such as Samsung, LG, and POSCO. As
of the end of 2017, Woori Bank has primary
banking partnerships with the largest number
of corporate clients among all Korean banks.
The two major forces driving the Corporate
Banking Business Group are our general
managers of corporate banking branch and
banking center. The general managers of
corporate banking branch have driven Woori
Bank to become the best in class in Korea,
the general managers of corporate banking
center have supported the affiliate and partner
companies of our corporate customers while
taking care of retail banking targeting officers
In 2017, the Corporate Banking Business Group maintained its number one market
2017 Performance
share in loans as the main creditor, producing results worthy of the title of Korea’s
strongest corporate banking service provider. Woori Bank also hosts the Woori Dia-
mond Club, a social gathering where the CEOs of our large corporate customers
meet. It serves as an effective channel for us to figure out different market needs in
advance and strengthen customer relations. As great emphasis is being placed on
corporate social responsibility today, we strive to develop products that will help
companies survive and prosper together and to build a financial culture through
which we can help each other.
As of the end of 2017, the Corporate Banking Business Group (including Corporate
Finance Centers) is managing a total of KRW 24.5 trillion in assets, with an operating
income of KRW 739.9 billion, and an export/import volume of USD 282.4 billion.
Strengthening Relationship on a Continual Basis
As our corporate customers turn into major global players, their financial needs
are changing in a rapid and diverse manner. In 2003, Woori Bank started the
Woori Diamond Club as a social gathering for the CEOs of our corporate cus-
and employees at associated firms. Thanks
tomers. Celebrating its 15th anniversary this year, the club acts as a channel for
to these competent managers, the Corporate
us to strengthen customer relationships and understand the financial needs of
Banking Business Group can satisfy the varying
our customers at the right time so that we can respond in advance to the rapidly
needs of our corporate clientele.
changing environment for financial services.
Our corporate customers have grown into
Supporting ‘Sangsaeng’ for Large Companies and SMes
major global players over the past 119 years,
The Korean word ‘sangsaeng’ refers to mutual life-giving symbiosis, as well as
and we are very proud to have been their chosen
helping and sharing prosperity with each other. As the emphasis on corporate
financial service provider. Today, we are doing
our best to offer the expertise we have gained
over the years to a wider customer base.
social responsibility grows, Woori Bank is committed to fulfilling its role as a cor-
porate citizen, offering sangsaeng product packages in which we enter into busi-
ness agreements with large corporate customers and provide loans with low
interest rates to SMEs. In 2008, we launched the Sangsaeng Loan for Partners of
Large Companies; as of the end of 2017, we have extended a total of KRW 570.8
billion in loans to 1,402 firms through this product. In 2013, we developed the
Woori Sangsaeng Partner Loan, a loan package for settlements, and upgraded
the relevant system later in 2015; as of the end of 2017, we offered a total of KRW
815.6 billion in loans to 5,010 companies. Woori Bank has the largest number of
big corporate customers in Korea, and this wide client network enables us to
manage a system of sangsaeng financing to encourage mutual aid, for exam-
ple by reducing financial costs for SMEs. We thus contribute to the co-prosperity
and growth of big companies and SMEs using our comprehensive network.
WOORI BANKANNUAL REPORT 2017 031
Business partnership with Different industries
To move beyond the traditional banking sector and develop a new business
model, we pursue diverse business partnerships with players from different sec-
tors. In 2017, Woori Bank used the WiBee mobile platform to promote joint mar-
keting campaigns with companies in diverse fields such as communications,
dining, distribution logistics, and leisure. These efforts led to mutually benefi-
cial relationships, resulting in increased sales for our partners and prospective
opportunities for Woori Bank. Such partnerships are now a new and exceptional
source of future profits.
The Corporate Banking Business Group’s business goal of ‘2018, the Four Ups for Big-
2018 Plans
ger Corporate Banking’ will build stronger growth in corporate banking by establish-
ing a new sales culture.
The first goal is to ramp up margins. To enhance margins, we will diversify our sources
of profit by developing new products and new markets. Our sales will be income-cen-
tric, with appropriate interest rates and fees.
The second is to ramp up volumes. We will pursue a balanced loan business, increas-
ing loans to major, profitable companies and applying suitable risk management
strategies.
The third is to ramp up partnerships. We will use our network of major corporate
clients and promote transactions with their partners, officers and employees, ulti-
mately to further expand our all-in margin business strategy.
The last is to ramp up innovation. We will continue to seek out partnerships and joint
marketing efforts with players from different sectors to generate new and innovative
profit sources.
Woori Bank is the main creditor bank of 13 of Korea’s largest
enterprises (2017)
Total number of large enterprises under main creditor bank management: 36
031031
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
Total Assets of
Corporate Banking
KRW
Trillion
24.5
Total Credit Exposure
to Main Debtor Groups
KRW
Billion
25,839
WOORI BANKANNUAL REPORT 2017 032032
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
032
Sme Banking
The Small and Medium Corporate Banking
(SME Banking) Business Group oversees
financial services for SME clients. As of the
end of 2017, it manages KRW 80.4 trillion in
loans and KRW 49.5 trillion in deposits for
1.48 million customers consisting of individual
entrepreneurs, SMEs, and high-potential
enterprises. To maintain satisfaction levels
among SME banking customers, we provide
competitive products and various financial
and non-financial services. Moreover, we foster
and manage SME relationship managers
(RMs), SOHO RMs and next-generation SME
RMs. These experts in SME financing and
We saw an increase of approximately 100,000 individual entrepreneurs, SMEs
2017 Performance
and high-potential enterprises amongst our clientele in 2017. Potentially
non-performing assets decreased by KRW 2.5 trillion, raising the performing
asset rate to 80.2% and drastically improving asset soundness.
Our marketing strategy concentrated on the acquisition of strong SMEs and
retention. In 2017, we followed up on our 2016 strategic targets such as tech-
nology financing, policy financing, and guaranteed loans. Simultaneously, we
stressed cross-selling in order to lock in customers and maximize profits. We
also implemented various loyalty programs in order to offer better services and
increase SME customer satisfaction. Another area of focus for us included train-
ing and fostering in-house SME experts.
Marketing Activities Targeting High-Yield SMe Clients
In 2017, we maintained our focus from the previous year to provide marketing
information to help branches appeal to high-yield SME clients such as by pro-
viding them with information on targets by product and customer and informa-
tion on the corporate partners of large companies. In April 2017, we launched
Woori CUBE Loan, which offers special benefits for growing businesses, includ-
ing preferential interest rates, fees, and credit lines. Product sales reached KRW
8.1 trillion as of the end of 2017. As the SME Banking Business Group pursued a
marketing strategy to promote high-yield assets, the size of loans to high-yield
corporate clients rated BBB and above grew by KRW 8.8 trillion by the end of 2017.
Concentration on Technology Financing & Reinforcing Growth
potential
asset management deliver top-notch financial
To acquire high-yield assets with a focus on technology financing, we pursued
services and content to our clients.
marketing that targets companies that utilize advanced technology with a strat-
egy of preemptive sales by allowing pre-approved credit lines. The Woori R&D
Plus Loan is a new product developed for companies that integrated advanced
technology, and this product allowed us to help companies with excellent R&D
performance endorsed by the Ministry of Industry, Commerce and Energy. To
offer technology financing to more businesses, we improved our tech credit
bureau (TCB) system and offered competitive interest rates. These efforts
resulted in an increase in both value and the number of borrowers compared
to the previous year (as of the end of 2017) by around KRW 3.5 trillion and 3,500
borrowers, respectively. In 2017, we also saw an increase of 100,000 customers
and KRW 2.3 trillion in low-cost deposits, which reinforced our profitability and
loan growth potential.
productive Financing and inclusive Financing in Action
To put productive financing in action, we broadened support for companies
with advanced technology (such as leaders of the fourth industrial revolution),
companies that create jobs, and start-up or venture companies. Our partnership
with credit guarantee organizations, local governments, and public institutions
continued throughout the year. Also, we strengthened interest rate competi-
tiveness through policy financing and provided diverse job training programs
to salespeople. Meanwhile, we increased our special contribution to the Korea
Credit Guarantee Fund and the Korea Technology Finance Corporation and
extended KRW 2.9 trillion in loans for letters of guarantee to new and promising
SMEs, companies that create jobs, and other SMEs. Our policy financing went to
not only our corporate accounts but also individual entrepreneurs: we offered
WOORI BANKANNUAL REPORT 2017 033033
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
SME Key Figures
People
Number of SOHO and SME Clients
Increasing in 2017
100,000
KRW Trillion
Reduction in Non-performing Assets
2.5
Percent
Percentage of Performing Assets
80.2
033
customized policy financing for the latter with special contributions to and con-
tracts with the Seoul Credit Guarantee Foundation and other regional credit
guarantee foundations. We also worked with Yellow Umbrella Mutual Aid to pro-
vide a stable social safety network and enter into contracts to provide inclusive
financing for small business owners and social enterprises.
Diversified Special products
Our new Woori CUBE Loan is a product with special benefits for growing SOHO
and SME businesses. The main purpose of this product is to expand loans to
individual entrepreneurs, SMEs, and enterprises with high potential. We then
remodeled our Woori Franchise Power Account Loan to create a more tailored
special product. The Woori R&D Plus Loan is a product released in line with the
government policy to support companies with good R&D performance based
on highly advanced technological competencies. Another product, the Woori
CUBE Account, was released together with bundled products, and we expect it
to bolster our sales competitiveness in the form of partnership marketing with a
range of associations and organizations. Our diverse product line-up provided
us with a good foundation for balanced asset growth between corporate and
individual businesses.
Retaining Customers & Offering Top notch Consulting Services
Amid the fierce competition among all banks, Woori Bank maintains customer
loyalty programs and supportive consulting services to meet the varying needs
of customers with a competitive leadership stance in the corporate consulting
area. Our loyalty programs offer benefits for member companies and long-term
customers, including support for family events (weddings, funerals, etc.) and
staff training. With these programs, Woori Bank is doing its best to fulfill its duty
as a true financial partner.
The corporate consulting services offered by Woori Bank are the ultimate cul-
mination of experience and expertise gained in the Korean banking sector. We
have assorted programs for companies that do business with us, covering man-
agement consulting, CFO consulting, family business succession consulting,
operations consulting, tax consulting, and many more. In 2017 alone, we com-
pleted a total of 110 consulting projects, demonstrating our competitive edge
in this area.
In 2018, the SME Banking Business Group plans to conduct marketing campaigns
2018 Plans
to increase its proportion of high-yield assets. The basis of this plan is produc-
tive financing, with a focus on manufacturers utilizing advanced technology
and companies in new growth industries. Most importantly, we will broaden the
special benefits provided to clients according to financial assets and industry
so that we can acquire new corporate accounts and clients in the start-up/ven-
ture sector. We will launch new special products make inclusive financing a pri-
ority, allowing customers and the bank to live and prosper together in the spirit
of sangsaeng. We plan to acquire additional high-yield customers and improve
the skills of our sales professionals, thus intensively expanding our foundation
for profit generation by providing comprehensive financial services. Finally, we
will take preemptive measures to manage potentially non-performing assets
and become the number one trusted bank in the SME banking sector.
WOORI BANKANNUAL REPORT 2017 034
Institutional
Banking
The Institutional Banking Business Group
consists of three departments. The Institutional
Banking Product & Marketing Department
caters to the needs of the central government,
local governments, and public institutions. The
Public Fund Sales Department manages the
municipal and provincial treasuries of local
governments and the courts. Finally, the newly
established National Pension Department
will take over and carry out business related
to Korea’s largest public pension, since Woori
Bank was selected as the primary bank for the
National Pension Service (NPS) that manages
the world’s third-largest pension scheme.
The Institutional Banking Business Group
is the first in the Korean banking sector to
establish an institutional banking specialist
pool (institutional customer RMs), providing
first-class financial services to institutional
customers. As of 2017, our institutional
customers include the Seoul Metropolitan
The Institutional Banking Business Group has a strong foundation built on Woori
2017 Performance
Bank’s expertise gained from 102 years of managing the Seoul Metropolitan
Government’s treasury. Based on such management know-how, we are broad-
ening our transactions with government institutions, local governments, and
major public agencies. Wherever our client institutions may be, we have reached
out to the local community through various corporate social responsibility pro-
grams and established Woori Bank as a financial institution that stands by local
communities.
In 2017, Woori Bank was selected as the primary banking partner by the National
Pension Service, the world’s third largest pension fund in size, and will be man-
aging a total of KRW 600 trillion of funds for three years starting in March 2018. In
2017, Woori Bank acted as the primary bank for 105 public institutions out of 330
Korean public institutions designated by the Ministry of Strategy and Finance.
As of the end of 2017, the Institutional Banking Business Group is managing a
total of KRW 27.5 trillion in deposits and KRW 0.8 trillion in loans as part of its
institutional business. In addition, we have built banking relationships with
4,500 institutions.
Supporting new Government and public Agency projects
In order to effectively support government policy and public projects, we
established the System Sales Team within the Institutional Banking Products
& Marketing Department to facilitate direct transactions and payment clearing
Government, the Ministry of Land, Infrastructure
between the buyers and sellers of renewable energy. As a result, Woori Bank is in
and Transport, the Korea Land & Housing
Corporation, the NPS, the Korea Railroad
Corporation, and many more. Our clientele
list positions us as the primary bank for the
largest number of public institutions in Korea.
charge of upgrading the Korea Power Exchange (KPX)’s REC Trading System and
is serving as the KPX’s dedicated settlement bank. We are also the designated
bank for managing the Ministry of Trade, Industry and Energy’s R&D funds. In this
function, we not only manage and disperse the R&D funds including the opera-
tion of a Real-time Cash Management System (RCMS) but also provide compre-
hensive financial services for successful R&D firms. In addition, Woori Bank is
solely in charge of international contracts and foreign exchange transactions for
the Defense Acquisition Program Administration (DAPA), and we offer various
financial services when settling the international purchase of goods for DAPA.
034034
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017 035035
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
035
Maximizing Synergy with new Business
The Institutional Banking Business Group does not only provide direct finan-
cial services to institutional customers but also discovers and offers business
opportunities to liaise with SMEs and individuals associated with the projects
undertaken by diverse institutions. In 2017, Woori Bank was selected as the pri-
mary banking partner for the Korea Environmental Preservation Association
(KEPA) and had the opportunity to provide financial services to local associa-
tions and KEPA member companies. We also worked with the Seoul Metropol-
itan Government, the Ministry of Environment, and other parties in our Clean
Woori Campaign to promote the use of electric vehicles. In this campaign, we
presented financial products specially designed for electric vehicles including
loans and a credit card, and had another opportunity to acquire new customers
through our efforts.
We intend to provide a system for effective cash management for government
2018 Plans
and public agencies and develop partnership services related to various bud-
get activities so that we can provide upgraded financial services on a different
level as a preferred banking partner for institutional customers. Furthermore,
as the primary bank for the largest number of institutions in Korea, we will seek
to broaden the range of our financial services so that more employees of public
agencies can do business with Woori Bank.
[Unit : KRW trillion]
Total Deposits
2016
24.7
2017
+2.8
27.5
Number of Institutional
Customers
Institutions
4,500
Major Public Agencies
National Pension Service
Korea Land & Housing
Corporation (LH)
Korea Housing Finance
Corporation (HF)
Ministry of Land, Infrastructure
and Transport
Defense Acquisition Program
Administration
Korea Railroad Corporation
Korea Electric Power
Corporation(KEPCO)
Korea Post
National Health Insurance
Service
Korea Creative Content Agency
Korea Evaluation Institute of
Industrial Technology(KEIT)
Korea Institute of Energy
Technology Evaluation & Planning
Korea Institute of Startup &
Entrepreneurship Development
Korea Institute for
Advancement of Technology
Agency for Defense
Development
WOORI BANKANNUAL REPORT 2017
036036
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
036
Real estate
Finance
In 2013, for the systematic and professional
In 2017, the Real Estate Finance Business Group once again became the undis-
2017 Performance
puted leader in NHUF market share. Woori Bank has been the managing cus-
todian bank of the NHUF for the past ten years, and a wide range of housing
finance product offers showcased the Bank’s distinguished business perfor-
mance. Consequently, Woori Bank was selected again as the managing custo-
dian bank for the NHUF in January 2018, as the bank in charge of business del-
egated by the NHUF for the next five years. We took preemptive steps to cope
with market fluctuations caused by government policy changes. We also took
the initiative to create demand for domestic housing finance products by devel-
oping new markets.
increased Customer Base as the Managing Custodian Bank
for the nHuF
The NHUF business is critical to broadening financing options for the demand-
management of real estate financing, Woori
side of housing finance, including for low-income individuals and families. As the
Bank enlarged the Housing Finance Division
into the Real Estate Finance Business Unit,
which was later renamed the Real Estate
Finance Business Group. The Group also
manages the Ministry of Land, Infrastructure
and Transport’s National Housing and Urban
Fund (NHUF) as the managing custodian
(formerly general treasury) bank. Our goal is
to satisfy the diverse needs of our customers—
hence we provide not only products that
build on Woori Bank accounts but also NHUF
products available for low-income individuals
and families.
[Unit : %]
Demand-side Housing Subscription Loans
44.7
43.1
40.9
2015
2016
2017
No. 1
Market
Share
[Unit : %]
Housing Subscription Savings Plans
28.0
2015
27.0
2016
26.0
2017
No. 1
Market
Share
[End of 2017]
Real Estate Finance Group
Category
Results
Market
share
Rank
[Unit: KRW billion]
Mortgage Loans
83,398.2
26.2%
[Unit: No. of subscription]
Loans to the Demand-side
302,195
40.9%
[Unit: No. of subscription]
Housing Subscription Savings
Plan
5,447,597
26.0%
2
1
1
managing custodian bank, Woori Bank is in charge of financing and dispersing
funds. As of the end of 2017, the bank accounted for a market share of 40.9 per-
cent in loans to the demand-side and a market share of 27 percent in housing
subscription savings plans. Throughout the year, one million new customers
subscribed to the housing subscription savings plan designed to enable them to
own a new house in the future. We will work hard to build a solid foundation for
this business so that a greater number of customers will be able to utilize NHUF
products through Woori Bank.
Leading Korea’s Housing Finance Market with a Total Real
estate information platform
In 2017, the Real Estate Finance Business Group developed products for both
face-to-face and non-face-to-face channels and a comprehensive real estate
information platform to proactively respond to changes in the financial environ-
ment. We also took the initiative in reforming regulations. Woori Bank focuses
on developing non-face-to-face real estate finance products for customer con-
venience. In January 2018, we launched WiBee Homes, our real estate informa-
tion platform that offers property information and loan consulting services. This
platform will enable us to continue leading the mobile real estate market.
We intend to maintain our number one position in terms of NHUF market share
2018 Plans
in 2018, and we will do our best as the managing custodian bank for the NHUF so
that customers can enjoy the funds’ benefits with greater ease. We will focus on
loan plans for the demand-side, which has shown a recent increase, including the
Jeonse (Key Money) Deposits, Monthly Rental Loan Plans and the Beotimmok
(Support) Jeonse Deposit Loan Plan. At the same time, we will focus on attract-
ing more customers to our housing subscription savings plans. Building on our
experiences, expertise, and IT system in financing and managing funds, we will
actively support housing welfare projects for low-income individuals and fami-
lies and take action to revitalize Korea’s national housing market and help make
it more transparent. We will also participate in government measures to support
housing funds for consumers with real demand and establish asset portfolios
that will ensure balanced asset growth, optimal profitability, and minimum risk.
To that end, we will expand mortgage loans by KRW 1.5 trillion in 2018 to serve as
a solid rock protecting the assets of Woori Bank customers. 2017 was the year of
building a stepping stone to dominate the real estate platform market. 2018 will
be the year in which we utilize our diverse and customized services to lead the
real estate finance market.
WOORI BANKANNUAL REPORT 2017
037037
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
Global
Business
In 2017, Woori Bank expanded its network
focusing on the Southeast Asian region, which
has high growth potential and profitability,
implemented a sales strategy tailored to local
markets, and built a unique financial platform.
As a result, Woori became the number one
player in the Korean banking sector in terms
of global network, net profit growth, and
the expansion of fintech services (in seven
countries). Based on these results, Woori
Bank now proudly represents innovation
and growth in the global business sector. The
bank’s network increased particularly in such
footholds as Indonesia and Vietnam, completing
its retail business infrastructure optimized
for Southeast Asia. With a new representative
office in Poland and regional headquarters in
India, we have established the largest global
network among all Korean banks, with a total
of 301 networks in 25 countries, preparing a
foundation for global growth.
In addition, based on a localized business
strategy in all overseas business units, we have
pursued growth both in volume and quality,
resulting in a net profit of USD 143 million, a
58.5 percent increase against the previous year.
We established a global smart banking platform
on a non-face-to-face basis to attract retail
customers. We also transcended the borders
between sectors and partnered with firms
that offer digital wallets, telecommunications,
and other services to offer simple settlements,
simple overseas remittances, payment
gateways and other services. By doing so, we
overcame the constraints of the face-to-face
channel and created a business model based on
digital convergence.
037
2017 Performance
expanding Our Overseas network (Channels)
Woori Bank started to go global by opening its first overseas branch in Novem-
ber 1968 in Tokyo, becoming the first Korean commercial bank to do so. Since
this first step, our interest in international markets has never faltered. In 2014,
we became the first Korean bank to acquire a foreign bank in Indonesia, sub-
sequently launching the Woori-Saudara Bank. In 2016, we became the first for-
eign bank in the Philippines to acquire a local bank when we acquired a stake
in a local Philippine savings bank, and we are expanding it with our partner, the
Vicsal Group, adding synergy to the business. In 2017, Woori Bank pursued a
strategy of organic growth in Southeast Asia where growth potential and prof-
itability are high and expanded its business coverage in Indonesia, Cambodia,
Myanmar, and the Philippines.
Woori Bank also opened a representative office in Poland, branches in Gurgaon
and Mumbai, and the new Indian regional headquarters. The Bank’s outstand-
ing performance reached new heights with 301 overseas networks in 25 coun-
tries, forming the largest international network of a Korean bank. In 2018, Woori
Bank will establish a new subsidiary in Germany to expand its global network
further and bolster business performance in the EU area. We also plan to enter
Mexico, a country where many Korean companies are doing business.
Strengthening Competitiveness of Overseas products and
Cross-sector partnerships (Business implementation)
Woori Bank is planning and launching strategic products tailored to each local
market, based on financial market trends by country. We also intend to promote
product competitiveness for overseas units by using cross-sector strategic part-
nerships (MOUs).
In 2017, we launched and sold various products exclusively designed for over-
seas markets, including bills bought without recourse, global confirmation, and
payment guarantees for global mutual aid societies. We pursued strategic part-
nerships with China’s An Bang Insurance, Vietnam Post Insurance Corporation,
local Indonesian insurers, as well as Korean insurers such as Hanhwa Life and
Seoul Guarantee Insurance. These alliances contributed to the growth of our
bancassurance business, product development, and the distribution of credit
guarantee loans, resulting in positive synergy for all parties.
In 2018, we plan to reinforce strategic cooperation not only with Korean institutions but
also with local financial and government institutions in the countries where we do busi-
ness. Our goal is to become a Korean bank that offers the best global financial services.
WOORI BANKANNUAL REPORT 2017 038
[Unit : USD million]
Net Profit
2016
90
[Unit : %]
NPL Ratio
2016
0.92
[Unit : %]
Liquidity Ratio
2016
117.3
038038
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
2017
%
+58.5
143
%p
Improvement
-0.16
2017
0.76
2017
%p
+3.8
121.1
expanding Business with Overseas Banks (F.i.)
Woori Bank is stepping up business partnerships and cooperation with lead-
ing global banks and provides support for Korean companies so that they can
become established as quickly as possible when they enter overseas markets.
By strengthening relationships with global banks, we secure stable credit lines,
support financing at international offices, and ultimately ensure financing for
promising Korean and local companies in overseas markets. We intend to move
a step ahead in terms of compliance control, which is becoming increasingly
rigorous all over the world, which is why we are implementing reinforced anti-
money laundering checks and customer verification processes with other banks
in foreign exchange transactions.
Strengthening Global Digital Competitiveness (Digital)
Woori Bank is promoting retail banking using the digital banking services com-
posed of our Internet banking, mobile banking, and consulting services. In 2017,
we extended our digital banking coverage by launching mobile banking ser-
vices for overseas branches as well as our subsidiaries in Vietnam and Indone-
sia. We also utilized the consulting services in our mobile banking platform to
bolster non-face-to-face marketing and sales functions. Our business strategy
is based on localization, overcoming the limitations of the face-to-face chan-
nel and expanding the foundation for retail finance. Simultaneously, we have
entered partnerships with fintech companies in order to provide services cus-
tomized for Southeast Asian markets. In Vietnam and Indonesia, we expanded
customer contact points through diverse offerings within digital banking, start-
ing with pre-paid recharge functions for mobile phones and payment gateway
services, as well as account deposits/withdrawals using partner platforms and
affiliated businesses.
In 2018, the Global Business Group will pursue balanced growth both in volume
2018 Plans
and quality based on risk management.
First of all, we will rebalance our asset portfolio, focusing on high-yield assets.
We will make active use of our IB Desk, introduce G-CMS, broaden the line-up
for global products, and reinforce localized business to accelerate qualitative
growth. By doing so, we will secure new global growth engines. We will expand
cross-sector partnerships with such parties as Seoul Guarantee Insurance
and seek more linked business opportunities between Korean and overseas
branches, ultimately enhancing profitability and growing our customer base.
WOORI BANKANNUAL REPORT 2017
039039
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
039
Global Networks
Total
Networks
Overseas
Branches
301
Representative
Office
19
Overseas
Subsidiaries
4
278 Contact Points
10
Woori Bank’s strategic gateway to going global is in Southeast Asia, namely
Indonesia, Vietnam and the Philippines. We will pursue a strategy of organic
growth in these markets and secure 500 networks in our global network. We will
also build a financial belt in Europe and America by developing new markets in
Germany and Mexico. We are preparing to enter these markets in various forms,
such as through microcredit and savings banks, based on the extent of develop-
ment and needs in the local financial sector.
Since many Southeast Asian countries are undergoing a radical digital transfor-
mation, we plan to build tablet branches, expand our agent banking business,
and introduce a biometrics-based mobile one-time password (OTP) to build up
our digital competitiveness. We will foster global loan screening specialists and
operate a regional screening center in Asia to manage risk preemptively, and
reinforce compliance by refining our anti-money laundering system.
In 2018, the Global Business Group will achieve quality growth, secure 500 net-
works in our global network, offer digital services to lead the fourth industrial
revolution, and manage risks while staying one step ahead. By doing so, we will
become a leading bank in all the markets in which we do business, bolster our
sales channels both online and offline, and localize our major subsidiaries. Our
short-term goal is to become the undisputed number one Korean bank in the
countries where we have a presence; our longer-term goal is to grow into a lead-
ing Asian and global bank that can compete against other prominent players in
the world’s banking sector.
New Global Market Development
Representative Office in Poland opened as a
bridgehead to enter the Eastern European
market. (February 2017)
In an aggressive move to enter
the Indian market, the Gurgaon Branch
was opened (January 2017)
Woori Bank Russia
poland
London
germany
Woori Bank China
turkey
iran
Bahrain
Qatar
Mumbai
dhaka
Woori Global Markets Asia
tokyo
Gurgaon
Woori Bank Vietnam
dubai
india Regional Headquarters Chennai
Woori Finance Myanmar Yangon
Woori Finance Cambodia
hong kong
Wealth Development Bank philippines
kuala Lumpur
Singapore
Bank Woori Saudara indonesia
new York
Woori America Bank
Los Angeles
Mexico
South Africa
Sydney
Woori Bank Brazil
Followed by the Mumbai Branch and
the Regional Headquarters. (July 2017).
Woori Bank subsidiary opened in Vietnam.
(January 2017)
A second branch in Brazil opened in
Bom Retiro to enhance coverage of the
Brazilian retail market. (May 2017)
WOORI BANKANNUAL REPORT 2017 040040
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
040
International
Trade
Business
In 2017, Woori Bank reported outstanding performance in export/import financ-
2017 Performance
ing, FX, and international remittances, clearly overshadowing its competitors
by taking advantage of competitive FX products, services, and the superior FX
competencies of our employees.
We handled USD 339.3 billion in export/import financing, USD 4.1 billion in FX
(cash basis), and USD 145.5 billion in international remittances. These results
ensured Woori Bank enjoyed the highest FX market share in all areas among
major commercial Korean banks. In terms of income, we achieved the highest
FX non-interest profits ever, amounting to KRW 323.9 billion or an increase of
KRW 2.8 billion compared to 2016.
In the new market of banking for foreign nationals, we have acquired over one
million customers already, having the largest number of foreign national cus-
tomers among all Korean commercial banks, which led to the first year of build-
The International Trade Business Group is in
ing a sustainable FX business model.
charge of establishing the marketing strategy
Woori Bank provides rapid money brokerage services by operating the Woori
for foreign exchange (FX) services, supporting
Clearing System (WCS), which is our FX settlement system with leading domes-
branch offices, and developing products across
Woori Bank. To offer speedy and efficient
support for FX operations, we manage the
International Trade Service Center, which is a
business process reengineering (BPR) center,
and the Global Investment Center, which is
responsible for foreign direct investment (FDI),
escrow, capital transactions and other services.
Recently, we established the Foreign Customer
Banking Business Department to serve the 2
tic and international financial institutions as its members. Using our superior
settlement infrastructure, we have served as the exclusive FX treasury bank for
the NPS, the world’s third-largest pension fund, since 2014. We have also acted
as the primary bank in charge of FX transactions for more than 120 public insti-
tutions, including Korean central and local governments, the Defense Acquisi-
tion Program Administration, and the Public Procurement Service. In April 2016,
Woori Bank was selected as the first South Korean bank to offer won currency
clearance services in China, handling the clearance and settlement in Korean
won, performing the job of a market maker, and eventually establishing our-
selves as the global transaction banking leader for the Korean won.
The International Trade Business Group’s outstanding business performance in
million foreign nationals in Korea, in order to
2017 is the result of implementing a successful business model geared toward
reinforce our targeted marketing efforts.
FX 4.0, which is about strengthening profitability and synergy according to our
The International Trade Business Group has
outstanding human resources who specialize
in FX as well as expertise gained from doing
business with the largest number of major
Korean companies and their subsidiaries.
Based on our expertise and people, we excel in
a wide range of businesses including domestic
and international export/import financing,
consulting for overseas investment, and retail.
By doing what we do, we generate non-interest
income for Woori Bank and enhance our bank’s
image as a global player.
four business goals of enhancing profitability, promoting employee competen-
cies, securing product competitiveness, and expanding strategic partnerships.
The Group will continue to concentrate on developing new growth engines and
improving business infrastructure.
Business Aimed at Foreign Customers
In 2017, the International Trade Business Group implemented a strategic gate-
way channel and foreign customer-friendly marketing to boost business related
to foreign nationals. As a result, we attracted 127,000 new foreign customers, a
big increase against the 107,000 we gained in 2016.
1. Channel expansion
The Foreign Customer Banking Business Department opened Foreign Customer
Banking Centers in Ansan and Gimhae to focus on marketing for foreign custom-
ers, and the most recent addition was made in Uijeongbu in June 2017. These
three centers are specialized branches for foreigners.
The Foreign Banking Centers hired foreign staff to make our customers feel
more comfortable, and also offer religious and cultural facilities including
prayer rooms. We also boosted convenience and banking accessibility for
foreign customers, for instance by expanding the operation of Sunday Banking
Branches (special branches that open on weekends) in some major residential
zones with a large foreign population.
2. Marketing for international Students Studying in Korea through
Strategic partnership
Woori Bank made agreements with several associations of international stu-
dents studying in Korea and related organizations to strengthen our business
WOORI BANKANNUAL REPORT 2017 041041
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
[Unit: USD billion, 10,000 people, %]
Results Of Business Performance
[Among the four major Korean banks]
041
competitiveness in terms of foreign customers. Since Chinese and Vietnamese
students represent the majority of international students studying in Korea, we
entered into a group agreement with their respective student associations. We
also partnered with the Korean Immigration Service Foundation that takes care
of civil affairs on behalf of the Ministry of Justice and acquired some students
as customers through this partnership. By doing so, we reinforced partnerships
with organizations that serve foreign nationals in Korea and laid the foundation
Category
Results
Market share
for becoming a more foreign-friendly bank.
Export financing
Import financing
Export/Import financing
FX (cash)
International remittances
No. of foreign customers
190.2
149.1
339.3
4.1
145.5
103.2
37.2
35.8
36.6
28.7
24.6
25.0
[Unit : KRW mrillion]
(FX) Non-Interest Income
expanded Capital Transactions
Despite the adverse external conditions in 2017, the International Trade Busi-
ness Group relied on the Global Investment Center in charge of capital trans-
actions marketing. The Center successfully managed to reinforce the Group’s
deal-sourcing channels and strategize channel expansion, resulting in invest-
ments of USD 2,987 million, the amount increasing more than 9 percent com-
pared to 2016.
We also operate 30 FDI Desks and special offices to handle capital transactions.
We liaise with major organizations such as law firms, PEFs and free economic
zone administrations to strengthen our deal-sourcing channels. In addition to
the Jeju and Yeoksam Offices under the Global Investment Center, we plan to
2017
open a strategic gateway office in the Gyeongin (Seoul-Incheon) area in order to
2016
295,835
+28,059
323,894
expand our start-up network of promising foreign investments in the future.
The International Trade Business Group will enhance the competencies of the
Global Investment Center in charge of capital transactions and consulting ser-
vices while expanding its deal-sourcing channels and gateway branches. Our
final goal is to secure maximum competitive edge in the capital transactions
market.
[Unit : USD million]
Major Successful FDI Cases
Acquisition of
cosmetics company C
1,250
Acquisition of
IT company S
680
PEF A acquisition of
a Korean company
360
PEF Q acquisition
of company K
180
Capital for listing of
a biotech company T
180
Capital increase for
Korean company Q
80
In 2018, the International Trade Business Group will actively use AI, blockchains,
2018 Plans
IoT and other new technologies of the fourth industrial revolution to develop
products and improve our internal processes. We will also move one step fur-
ther to achieve a digital transformation. By doing so, we will attain a dominant
position over our competitors in all areas including product and channel com-
petitiveness, cost, and risk management, while also enhancing customer sat-
isfaction and work efficiency. We will do our best to become a leading FX bank
that can keep up with the radically changing environment.
Our products, services, and systems will be improved to offer convenient and
appropriate products to our customers, and the number of dedicated branches
for foreign customers will also be expanded. We will provide the right products
in FDI and for our foreign customers, and we will pursue new growth engines. We
intend to become a bank that specializes in handling foreign customers.
In line with our efforts since 2017, we will strengthen partnerships with organi-
zations that serve foreign nationals. We plan to maintain our active support for
the financial voucher project for multicultural families. Our goal is to become
a trusted and friendly financial partner for foreign customers residing in Korea.
We plan to attract more capital transactions by expanding the designated
workforce for inbound capital transactions such as FDI as well as reinforc-
ing employee training and branch support. We will partner with branches and
establish professional consulting services to provide the best solutions for our
customers.
In 2018, the International Trade Business Group will quickly adapt to the chang-
ing environment, provide optimal FX services based on new technologies of the
fourth industrial revolution, and continue to do our best to boost customer sat-
isfaction.
WOORI BANKANNUAL REPORT 2017
042
Financial
market
Business
The Financial Market Business Group consists
of the Treasury Department, which manages
Woori Bank’s liquidity, the Trading Department,
which handles FX trading, marketable
securities, and financial derivatives, and
the Settlement Support Department, which
performs back office duties. Woori Bank is the
most competitive of all Korean commercial
banks in trading derivatives. We lead the
market, handling forwards, swaps and options
In charge of major funding and capital management for Woori Bank, the Finan-
2017 Performance
cial Market Business Group focused on improving profitability and maintaining
stable liquidity through efficient funding and capital management. We contrib-
uted to enhancing the Bank’s profitability by maintaining an optimal loan-to
deposit ratio (LDR), diversifying Korean won- and foreign currency-denominated
financing, and managing our bond portfolio. We also promoted our capital ade-
quacy and stability in financing by issuing perpetual foreign currency-denomi-
nated contingent convertible bonds (CoCos) in the first half and won-denomi-
nated CoCos (TierⅡ) in the second half.
Consequently, we complied with the Korean regulatory guidelines on liquidity in
2017 at a level well above the liquidity coverage ratio(LCR) (minimum 90%), the
foreign currency LCR (minimum 60%), and the mid- and long-term foreign cur-
rency financing ratio (minimum 100%). These results contributed to a 0.49 per-
cent increase in the bank-wide BIS ratio. We strengthened our competitiveness
in FX and derivatives trading by diversifying trading currencies and managing
positions. We also provide equity derivative services that are available through
all global trading hours so that our customers can be prepared for risks arising
from time zone differences.
based on a wide range of underlying assets
implementing Optimal Funds Management
including interest rates, foreign exchange,
equities, and commodities.
issuance of Senior Debt and CoCos in Won and Foreign Currencies
In 2017, the Financial Market Business Group established proactive financing
plans to issue KRW 8.34 trillion in won-denominated senior debt, KRW 0.25
trillion in won-denominated CoCos, and USD 700 million in foreign currency
senior debt, and USD 500 million in foreign currency-denominated CoCos, all
with competitive interest rates. Most notably, we took preemptive action and
expanded the issuing of mid- and long-term won-denominated senior bonds to
prepare for interest rate hikes. We successfully issued won- and foreign curren-
cy-denominated CoCos, boosting the bank-wide BIS ratio by around 0.49 per-
cent and building a stable foundation for business.
Successful Response to Tougher LCR Standards in July
The Treasury Department decided to take preemptive action to prevent the
potential decrease in the LCR due to tougher standards (minimum LCR of 90%)
implemented in July 2017. The Department increased retail deposits received
from individuals and SMEs that tend to show low run-off rate and issued bank
bonds, increasing high-quality liquid assets. As a result, we maintain the LCR at
102.07 and continued to manage liquidity in a stable fashion, at a higher ratio
than the regulatory guidelines, even after the standard was strengthened.
enhancing Stability with Diversified Financing of Foreign Currency
In December 2017, we set up a global certificate of deposit (CD) program that can
issue Yankee and Euro CDs at the same time. The new program diversified our
platforms for foreign currency financing and included overseas gateway offices
as well as our head office as the issuer, assisting in our global business growth.
042042
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017 Liquidity
[Unit : %]
Coverage Ratio
Liquidity Coverage Ratio
(All currencies including KRW)
Liquidity Coverage Ratio
(Foreign Currencies)
Mar.
2017
Jun.
2017
Sep.
2017
Dec.
2017
043
Complying with Korean Regulatory Guidelines
As of December 2017, we have complied with Korean regulatory guidelines
by maintaining 101.23% in the LCR, 103.77% in the foreign currency LCR, and
214.35% in the mid- and long-term foreign currency financing ratio.
Strengthening Competitiveness in FX and Derivatives Business
In 2017, the Financial Market Business Group strengthened its competencies to
proactively respond to the volatility of the financial market and strove to build
competitiveness through various measures, including creating profits from new
sources.
FX Dealing
112.57
79.3
In foreign currency dealing, we bolstered our currency forecast capability for
both domestic and international markets and realized outstanding trading prof-
its by taking anticipatory and proactive action in response to the fluctuations
in international financial markets. In 2017, we accounted for a higher portion of
market share (8.23% in USD/KRW, 17.01% in CNY/KRW), playing the role of a lead-
121.33
ing market maker in Korea.
Derivatives
94.15
102.29
In the derivatives market, we forecast the trend of market variables such as
Korean and international financial policies and changes in demand and supply,
which helped us manage our positions one step ahead and establish a secure
foundation for derivatives trading. We also offer FX/interest rate risk manage-
ment consulting and customized 1:1 solutions for SMEs that suffer from a lack of
experience and expertise in risk management.
108.79
Securities
101.23
103.77
In securities, we analyzed domestic and international monetary policies and
bond markets and efficiently managed bonds and bond-type beneficiary certif-
icates, increasing both interest and non-interest income. We also diversified our
sources of non-interest income by varying and increasing bond lending transac-
tions that receive risk-free charges.
In 2018, the Financial Market Business Group plans to steadily manage bank-
2018 Plans
wide liquidity based on thorough monitoring of money markets. In trading,
we will broaden both our FX and derivatives income by diversifying strategies,
such as arbitrage in FX/derivatives and foreign currency/interest rate hedging
in trading. The demand for risk hedging is expected to increase with growing
global volatility, and we intend to broaden FX/derivatives trading further by
offering the right product at the right time for all of our customers. We also have
a dedicated sales team of specialists for securities firms, insurers, government
agencies and other financial and public institutions. With the work of our dedi-
cated team, we will continue to acquire exceptional customers and increase our
non-interest income.
043043
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017
044044
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
044
Investment
Banking
2017 saw us building a stepping stone to expand into quality overseas IB mar-
2017 Performance
kets, taking advantage of Woori Bank’s international network and the new IB
Desks. At the same time, we steadily increased our income and realized sales-re-
lated profits of over KRW 200 billion for the third consecutive year.
We used our strong ties with high-performing PEs and companies to consistently
secure rights to arrange acquisition finance deals. We also increased high-qual-
ity assets by handling large-scale structured finance deals for blue-chip busi-
nesses and expanding aircraft financing. In securities investment, we recorded
impressive results as we recovered existing investments to realize large profits
on dividends and sales.
Woori Bank’s Investment Banking (IB)
Business Group is in charge of diverse areas of
investment, including acquisition finance (M&A),
securities investments (securities, mezzanine
securities, collective investment securities,
foreign currency bonds), corporate finance,
In 2018, the IB Business Group will focus on core business areas such as acqui-
2018 Plans
sition finance, securities investment, infrastructure finance, and structured
finance to achieve growth in quality and volume. To prepare a foundation to
generate future profits, we will continue to invest in growing domestic and inter-
national PEFs and participate in overseas projects through our global network,
overcoming the limitations of the Korean market. Above all, we will do our best
aircraft finance, project finance (infrastructure
to reinforce asset soundness and effectively .
projects, power generation energy projects),
and structured finance (asset-backed securities,
real estate structured finance). The IB Business
Group has the Investment Banking Department
and the Project Finance Department under its
umbrella to actively implement its business
strategies. In M&A, we provide customized
acquisition finance through a strong network we
have built with sound private equitys (PEs) and
leading companies both in and outside Korea. In
securities investment, we offer a combination of
investments and loans related to various projects
in real estate and infrastructure. In October
2006, we opened Woori Global Markets Asia Ltd.
in Hong Kong and became Korea’s first financial
institution to establish a unit to specialize in
overseas IB investment. Since June 2017, we have
opened IB Desks in Singapore and Sydney using
Woori Bank’s overseas branch network. We are
tapping into new opportunities overseas as well
as in domestic IB markets.
Total Assets of Investment
Banking Operations in 2017
[Unit: KRW trillion]
Balance Sheet Assets
Loans
(34%)
3.3
Securities
(28%)
2.8
(38
%
)
%
)
(62
6.1 3.8
Total Assets
(100%)
Off-balance Sheet Assets
Loan Agreements
9.9
Payment Guarantees
(4%)
(34%)
0.4
3.4
Investment Banking Organization
iB Business Group
investment Banking
department
project Finance
department
Woori global Markets Asia
Ltd. (hong kong)
IB Control & Management
Team
Structured Finance
Team
Business Unit
M&A & Global Finance
Team
Infrastructure Finance
Team
Business Support Unit
Principal Investment
Team
Power & Energy
Team
Corporate Finance
/Shipping & Aviation Team
WOORI BANKANNUAL REPORT 2017 Digital
Banking
The Digital Banking Business Group is in
charge of establishing Woori Bank’s digital
banking strategy and developing new markets.
In order to respond to the exponentially
growing smart banking markets ahead of
time and dominate them in alliance with ICT
companies, we operate a Digital Banking
Strategy Department, a Digital Banking
Business Department, a Platform Business
Department, and an ICT Support Center. As
of the end of 2017, 16.55 million Woori Bank
customers are using our Internet banking
and smart banking services. We provide
approximately 6,000 ATMs, utilize cutting-
edge technology (including smartphones and
the Internet) and networks to quickly identify
045
In 2017, the Digital Banking Business Group developed financial services with
2017 Performance
new technologies and reinforced the WiBee Platform to respond to develop-
ments associated with the fourth industrial revolution, providing convenient
smart banking services for our customers.
Financial Services with new Digital Technologies
Under the umbrella of the Digital Banking Business Group, we have newly estab-
lished the Digital Banking Strategy Department in April 2017 in the face of the
fourth industrial revolution. It is continuing to develop new business opportu-
nities using new technologies through cross-sector technological partnerships
with ICT companies.
As a result, we launched the Woori Home IoT Banking services in alliance with
Samsung Electronics’ Family Hub and KT’s GiGAGenie. Then there came the
pilot launch of Pepper, a humanoid robot with AI capabilities that was rolled out
at several branches for the first time in the financial sector.
WiBee Talk now has real-time translation services for 16 languages, and we also
launched voice translation services that allow both text-to-speech and speech-
to-text translations. We also started an AI-based consulting system called
WiBee Bot to provide real-time banking consulting services for our customers.
The Digital Banking Business Group strives to develop business models using
new technologies, build a big data platform, and develop financial services
based on blockchain technology.
Developing Financial Services for Customer Convenience
using Biometrics
We introduced SORi, a banking service using voice-recognition technology for
the first time in the financial sector, and embedded the function into our smart
banking services. We then expanded the application to WiBee Talk, WiBee Bank,
and Woori-Samsung Pay Services. We also applied biometric verification ser-
customer needs, provide products and services
vices using fingerprints and offered a simple face verification login function
045045
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
accordingly, and stand by our customers.
using facial recognition technology. By using these biometric technologies, we
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
took the initiative in providing convenient services for customers ahead of our
competitors.
Offering Omni-Channel Financial Services
We expanded omni-channel financial services, including a non-face-to-face
smart loan roll-over process, pre-registration of passcodes, a smart business
card, and other services to allow the continuation of financial services in both
online and offline environments. We also broadened the scope of services avail-
able via the online channel including our non-face-to-face identification verifi-
cation service, non-face-to-face reservation service, and the issuing of import-
ant financial documents via Internet banking.
In 2018, the Digital Banking Business Group will present innovative financial
2018 Plans
services based on new technologies and be ready for the fourth industrial rev-
olution as we implement Open Innovation through partnerships with ICT and
platform companies. We will strengthen our life-sharing platform through the
real estate platform WiBee Homes and the WiBee Talk Ver. 3.0. We plan to offer
convenient financial services by expanding the scope of our online banking ser-
vices. These customer-centric banking services and the expansion of platform
networks will establish Woori Bank as a leader in smart banking and a leader of
the digital banking market in the future.
WOORI BANKANNUAL REPORT 2017 046
Risk
management
Risk management is now essential for any
financial institution to survive and increase its
competitiveness. Woori Bank has gained a great
deal of know-how by overcoming a range of
crises in the past, based on which it introduced
the Risk Adjusted Performance Measurement
(RAPM) system in 2002, a first among Korean
banks. The bank also successfully implemented
the Basel II and the Basel III protocols to
establish an advanced risk management system.
Keenly recognizing that “risk management
is the source of profits,” Woori Bank will
continue to reinforce its position as a leading
bank through effective risk management in the
future.
046046
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
2017 Performance
Summary
Woori Bank intends to prepare a foundation and become a stronger bank by
improving risk management. Aiming to achieve advanced risk management and
make Woori Bank more robust, we have succeeded in taking risk management to
the next level by improving the relevant systems with cutting-edge technology.
We have rebuilt the asset liability management (ALM) system and completed the
development of a system for investment bank (IB) asset monitoring. Currently,
some of the work in progress includes developing a corporate diagnosis system,
improving the loss given default (LGD) estimation system, and improving the
credit scoring system for retail loans. In addition, we have continually enhanced
the quality of the bank’s assets through optimal portfolio management as well
as reinforced global risk management and prevention of potential insolvency.
Advanced Risk Management System using State-of-the-Art
Technology
In 2017, we focused on developing and improving the bank’s risk management
system with cutting-edge technology to promote advanced risk management
practices.
First, we have rebuilt our ALM system in response to reforms related to interest
rates and liquidity-related regulations. In system development, we have made
sure to integrate the ability to react immediately to potential changes in risk fac-
tors by establishing a daily calculation system of major indicators and adding a
range of simulation functions. The newly built IB asset monitoring system has
linked the front, middle and back offices, enabling highly detailed monitoring
of IB assets.
We are currently building a corporate diagnosis system (Big-Eye), integrating the
latest digital techniques of big data analysis into the bank’s risk management
system. This application of such advanced technology is unprecedented in the
Korean banking sector. The corporate diagnosis system will provide compre-
hensive information on corporate and default pattern analysis, which will, in
turn, make it easier to evaluate corporate credit risk and respond to solvency
issues at an earlier stage. This corporate diagnosis system is expected to be
completed within the first half of 2018 after a pilot test run and the addition of
any necessary improvements.
In our credit scoring system, we have improved the credit scoring system for
retail loans. In the initial phase for this improvement, we reviewed existing cate-
gories, checked whether new categories reflect new trends, and analyzed non-
face-to-face customer characteristics. This year, we will use the analysis results
of this initial preparatory stage and develop an additional credit scoring system
for loans with mid-range interest rates and pursue overall improvements to the
credit scoring system for retail loans.
Lastly, we have improved the LGD estimation system as a stepping stone for
improving risk management.
improvement to the Asset Management process in 2017
In 2017, gradual economic growth continued domestically. However, since there
were expectations about interest rate increases in Korea following the inter-
est rate hike in the United States, managing “marginal” firms and household
debts became even more important. Accordingly, Woori Bank concentrated
on risk management through portfolio rebalancing and prevention of potential
loan insolvency. We applied the return on risk weighted assets (RORWA) the-
ory in examining loans and allowed preferential treatment for businesses with
WOORI BANKANNUAL REPORT 2017 047047
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
Prime assets of BBB0*
[Unit : KRW trillion]
and above
%p
71.9
(81.3%)
+5.9
62.9
(75.7%)
59.8
(69.5%)
2015
2016
2017
* Standard targets for calculation of BRR
047
a good outlook to ensure the bank’s quality growth in consideration of capital
adequacy. We also have done our best in terms of prevention by implementing
themed reviews for businesses sensitive to economic conditions and exports,
corporate groups that share credit risks, companies with large loans, and other
debtors that require intensive risk management. As a result, our loan grade
structure improved each year, and high-quality assets accounted for over 80
percent of total loans by the end of 2017.
Simultaneously, in global risk management, the bank has actively offered sup-
port to strengthen internal risk management competence in overseas branches
so that they can back up the bank’s overall strategy to proactively expand its
global sales platform. For this purpose, the bank has conducted on-site reviews
of the local operations in Vietnam, China and Russia. We have also invited risk
management officers from the bank’s Indonesia operation to learn about the
bank’s advanced risk management techniques. We have produced and distrib-
uted training material for risk management officers in international branches as
part of continued efforts to boost understanding of risk management.
This year’s goal for the Risk Management Group is to establish a stepping stone
2018 Plans
for a new leap forward in risk management, and gradually build an efficient risk
management system to achieve this goal.
First, we will pursue balanced growth through portfolio improvement. We will
maintain capital adequacy and continue focusing on quality asset growth by
providing support for decision-making on loans and risk management strate-
gies that integrate RORWA. Despite the economic recovery in Korea, we expect
different levels of performance in each business area. Hence, we will strive to
achieve balanced growth: we will differentiate risk management by using a dif-
ferential asset growth strategy in each business area and reinforce the manage-
ment of large loans with concentration risks.
As the bank’s global business grows in volume, we will also seek quality growth
by re-establishing the global risk management system and strengthening risk
management capabilities according to the type of local operation. To cope with
the expansion of non-banking corporations, especially in Southeast Asia, we will
set up a customized risk management system for non-banking operations. As
diversification of our overseas operations continues, we plan to enhance our
risk management expertise accordingly: we will expand the risk management
system for derivative businesses at international branches and reinforce fol-
low-up management of assets traded by international branches in liaison with
the IB group.
To ensure the soundness of assets is improved, we will prevent loans from
becoming insolvent to the maximum degree possible: we will conduct a pre-in-
spection of marginal companies and those showing symptoms of insolvency,
diversify the targets subject to review, and intensively manage businesses sensi-
tive to economic conditions and exports.
Lastly, we plan to improve the bank’s risk management system in a range of
ways. We will upgrade our corporate diagnosis (Big-Eye) system and other man-
agement systems based on big-data, develop an credit scoring system for small-
loan financing to offer more financial support, proactively respond to regula-
tions by improving the LGD estimation system and using the new ALM system,
reinforce our expertise in stress testing, draw up a pilot recovery plan to insti-
tute a crisis response system, and further strengthen the bank’s crisis response
capabilities.
WOORI BANKANNUAL REPORT 2017
02
CORpORATe
SOCiAL
ReSpOnSiBiLiTY
Woori Bank strives to fulfill its responsibility as a corporate citizen to create a
world in which everyone is happy and a tomorrow in which everyone’s hopes
and dreams come true. We will manage our business based on sharing,
service, and sangsaeng (thriving together) and become a bank that achieves
sustainable growth together with our society.
Social Contribution in Action
Vision
Sharing Love and
Building Hopes and Dreams
through Finance
Mission
(3H)
Happiness
Humanity
Hopefulness
Implementation
Strategy
1
Fulfilling our corporate
social responsibility by
supporting SMEs and
microfinance
2
3
4
Implementing marketing
activities for the public
interest by reinforcing
cooperation with non-
profit organizations
Strengthening local
social contributions
through volunteer work
with our employees
Expanding the Woori
Care Fund and further
supporting social
welfare facilities
Woori Smile
Microcredit’s Cumula-
[unit:krW billion]
tive Performance
[unit: no. of volunteers]
Woori Volunteers
130.8
112.7
95
48,846
48,419
+427
18,833
2015
2016
2017
2008
2016
2017
*annual cumulative basis
people
+30,013
An increase
over the last
10 years
%
+159
Woori Bank will achieve sustainable growth
as a global company through fair and clean management.
Woori Bank Code of Ethics
1
We will provide our customers with joy and happiness.
2
3
4
We will offer the best value for our shareholders.
We will protect the dreams and the future of our employees.
We will fulfill our social responsibility and role as a
corporate citizen.
5
We will act based on honesty, integrity, and fairness, and
build a sound corporate culture.
Business Principles and Philosophy
Woori Bank 2017 CSR Awards
2017 Presidential
Commendation for
Services in Social
Enterprise Incubation
[Ministry of Employment and Labor]
Best Bank in Preventing
Voice Phishing Damages,
2017 First Half
11th National
Sustainable Management
Award
[Financial Supervisory Service]
[Ministry of Strategy and Finance]
2017 Business
Supporting the Employ-
ment of Multicultural
Families
[Seoul Metropolitan Government]
2017 Customer
Satisfaction +Awards
(Hall of Fame in
Banking)
[The Korean Economic Daily]
Chief Information
Security Officer
[Korea Forum of Chief Information
Officers, the Federation of Korean
Information Industries]
050
ethical Management
052
Consumer protection
054
employee Satisfaction
056
Social Contribution Activities
058
Woori Smile Microcredit
050
ethical management
To survive in an era of global competition and achieve sustainable development, Woori Bank has the Woori Code of
Ethics and the Woori Code of Conduct in place so that employees can refer to these standards and understand the
importance of corporate social responsibility and ethical management as they perform their day-to-day responsibilities.
We continuously operate various ‘action programs’ to help our officers and employees recognize the importance of
ethical management. For Woori Bank, our employees and society as a whole, as well as our customers and shareholders,
are important stakeholders. Based on the high level of ethical finance implemented through the Woori Code of Ethics,
we will fulfill our social responsibilities for all stakeholders and contribute to the advancement of society.
2017 Performance
In 2017, Woori Bank launched various ethics and compliance training programs so that all our
employees are able to understand and put the ideals of ethical management into practice.
Reinforcing ethics and Compliance Training
First, we implement a bimonthly Ethics/Compliance Self-Check Test so that the employees can
develop a detailed understanding of the Code of Ethics. Second, on We-Check Day, all officers and
employees must participate and participate in a voluntary ‘cyber pledge’ to examine the behav-
ioral standards applicable to each job rank. Third, we utilize the ‘Ethics and Compliance at Work’
section on the bank intranet to publish training materials on ethics and internal control online,
which our employees can use for their monthly compliance training and in the field. Finally, we
post a quarterly Ethics and Compliance Case Study on the intranet as a commentary on the Code
of Ethics and other regulations related to internal control.
050050
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017 051051
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
2018 Plans
051
Action programs for ethical Management
Woori Bank offers many programs to promote ethical management. The first is the Woori Hotline,
a channel through excellent practices can be commended and violations of the Code of Ethics by
employees can be reported. The Woori Hotline is a channel for receiving complaints from employ-
ees, partners, and other stakeholders. This is a program that encourages employees to comply
with laws, regulations, and the Code of Ethics.
Second, the Ethical Management Support Council serves as a meeting group to spread the idea
of ethical management and the practice of compliance. The Council holds meetings twice a year
chaired by the Compliance Officer. It discusses various agenda items, including how to uphold the
Code of Ethics and how to improve ethical management, and makes necessary decisions in this
regard. The Council coordinates the implementation of specific policies related to ethical man-
agement such as ‘action programs’ and training.
Third, Woori Bank has a Whistleblowing Program in place to report foul play by any of our employ-
ees as well as the Clean Contract System to encourage transparent and honorable agreements for
all providers and businesses participating in contracts and purchases. The Bank has various mea-
sures in place to make our goal of Clean Woori Bank a reality.
In 2018, Woori Bank aims to implement preemptive internal control measures and improve our
compliance monitoring system in order to eliminate fraud and other incidents. For a culture built
on transparent and ethical management, we will prepare a wide variety of training and programs.
First, we will make it mandatory for all employees to take an action pledge regarding the Code of
Ethics twice a year. This pledge will cover the crucial parts of our Code of Ethics including the pro-
hibition on improper solicitation and influence peddling, and it will serve to encourage the spirit of
integrity and fairness as part of ethical management.
Second, we will offer diverse ethics training for all executives and employees. While continuing
existing ethics and compliance training programs, we will also produce online educational pro-
grams on ethics and have our employees complete easy-to-understand programs based on dif-
ferent case studies.
Woori Bank is committed to pursuing sustainable development based on trusted and ethical
management in 2018, based on which we will further enhance our position as the leading bank in
Korea.
Woori Bank Code of ethics
1
2
3
4
5
We will provide our customers with joy and happiness.
We will offer the best value for our shareholders.
We will protect the dreams and the future of our employees.
We will fulfill our social responsibility and role as a corporate citizen.
We will act based on honesty, integrity, and fairness, and build a sound
corporate culture.
Employee Behavior Principle
2017 Performance
WOORI BANKANNUAL REPORT 2017 052052
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
052
Consumer Protection
Woori Bank has made Put Customers First in On-Site Management its bank-wide management principle.
Our core values are: customer happiness; future innovation; honesty and trust; and people first.
The most important of these is customer happiness. Based on this management philosophy, Woori Bank became
the first Korean bank to establish a consumer protection division. We take consumer protection seriously
and always put our customers first, thereby strengthening our position as a leader in this field.
2017 Performance
The Consumer Protection Center incorporated relevant policy trends and customer voices to
enhance complaint prevention and implement related action plans. We do our best to resolve
any problems and promote the rights and interests of consumers by identifying unsound prac-
tices and constantly improving bank-wide systems. We process any cases of inconvenience
or damage suffered by our customers in a speedy and fair manner. We conduct independent
research about our complaint handling process in order to make necessary changes. We also
implement proactive anti-fraud measures to protect the valuable assets of customers.
Continued Decrease in Complaints
The Consumer Protection Center implemented various projects to prevent and reduce com-
plaints. To come up with customized complaint reduction plans, we organized a team with staff
in charge of consumer protection from each regional headquarters and provided them with sup-
port to implement autonomous complaint prevention plans.
Before the development and launch of a product, we have a proactive verification process in place
in all relevant departments. As the process allows us to conduct a thorough inspection in advance,
we can remove any elements that may result in complaints and ensure that the interests of our cus-
tomers are not compromised. As a result, we saw a decrease in customer complaints for the fifth
consecutive year, and were rated ‘good’ in eight criteria in the Evaluation of Financial Consumer
Protection Practices conducted by the Financial Supervisory Service (FSS) of Korea.
WOORI BANKANNUAL REPORT 2017 053053
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
053
implementing Customer-Oriented Consumer
protection projects
To reinforce consumer protection, we continually listen to the opin-
ions of our customers on-site and organize contests to gather new
ideas related to consumer protection ideas from our branch employ-
ees. We use various channels to listen to the voices of customers and
2018 Plans
The Consumer Protection Center has two goals for 2018: to concen-
trate on our bank-wide competencies and establish a clean con-
sumer protection system, and to build a stepping stone towards
Woori Bank becoming a new comprehensive financial group.
use the results to improve or add to our business processes so that
To achieve these goals, we will take preemptive action to reduce
complaints of the same kind will not recur in the future.
The no. 1 Bank in preventing Financial Crimes
We used our various publicity channels to educate customers on
the prevention of voice phishing that involves the impersonation
of public officials or loan scams. We also offered continuous train-
ing and education programs for employees to strengthen bank-
wide competencies in responding to fraud. We then launched a new
Voice Phishing Direct Report Channel to provide immediate support
from the head office to networks. Thanks to these efforts, we were
selected by the FSS as the Best Bank in Preventing Voice Phishing
Damages in the first half of 2017. The award significantly enhanced
Woori Bank’s image as a financial company that is serious about pro-
tecting its customers’ assets.
Information Security at Woori Bank
complaints, based on policies established by the financial author-
ities and enhance employee training to further promote the rights
and interests of our consumers.
As branch offices serve as contact points for our customers, we will
reinforce support for complaint prevention on-site. In the event of
a product launch, we will thoroughly verify whether there are any
product elements that may be disadvantageous to our customers.
Finally, we will take the initiative in protecting the valuable assets
of customers by upgrading our anti-fraud system in a sophisticated
and powerful manner.
Woori Bank continually strengthens its information security orga-
When we are required to consign customer information for busi-
nization and enhances administrative and technical security mea-
ness purposes, we disclose the scope of responsibilities and the
sures to prevent any leakage of customer information.
consignee information on our website. We conduct a regular inspec-
Reinforcing the information Security Organization
The Head of the Information Security Division bears the responsibili-
tion of the handling of information and information protection train-
ing. Our management and supervision of consignees are always
thorough to ensure that customer information is not lost, stolen,
ties of the Chief Information Security Officer (CISO) and Chief Privacy
leaked, forged, falsified or damaged.
Officer (CPO), managing all the teams in charge of privacy (credit
information) protection. We regularly hold Information Security
Technical Security Measures
Committee meetings, which are chaired by our CISO and attended
by 15 department heads of Woori Bank who are in charge of infor-
mation security, IT operation and development, customer informa-
tion handling and other relevant responsibilities. The Committee
discusses agenda items that cover IT security issues, internal control
and process improvement for privacy protection, and other matters.
We also have an ICT security diagnosis team with information secu-
rity experts who serve as white hat hackers. This team analyzes and
evaluates vulnerabilities, conducts mock hacking, and conducts an
internal security review for newly launched services to ensure their
safety and security.
Taking Administrative protection Measures
To prevent the potential abuse and misuse of private information, we
allow only minimal access for employees so that they can only retrieve
information required to perform their jobs. We also reinforced internal
control for both the head office and branches through regular monitor-
ing. In addition, all our employees must attend bank-wide information
security training at least twice a year. We also make on-site visits to pro-
mote privacy information awareness and prevent security breaches.
In July 2017, Woori Bank obtained ISMS (Information Security Man-
agement System) designation from the Financial Security Institute
under the Ministry of Science, ICT and Future Planning, and we
renew our certification every year by passing strict standards. In
2017, Woori Bank applied cutting-edge security technology using a
dynamic app tampering prevention and obfuscation system, which
was a first among Korean banks. The new technological innovation
bolstered the security of our mobile app services against increas-
ingly intelligent and sophisticated external cyber violations.
2018 plans
The Information Security Division plans to build an integrated informa-
tion security management system that can ensure real-time integration,
analysis, and action against both internal and external cyber violation
threats. The Division will also introduce AI-based detection functionality
to strengthen and enhance the Fraud Detection System (FDS). We will also
conduct mock hacking drills to enable Woori Bank to be thoroughly ready
for any potential cyber-attacks and protect customer information. We will
always do our best in managing our systems and reinforcing security so
that our customers will find a trustworthy partner in Woori Bank.
WOORI BANKANNUAL REPORT 2017 054054
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
054
employee Satisfaction
Woori Bank believes that a workplace where employees are happy is a necessary foundation to be able to provide the best services to
our customers. This led to the setup of the Employee Satisfaction Center in 2007, and since then, the Center has been developing and
implementing diverse programs to improve employee satisfaction. We are expanding our programs to improve employee satisfaction
because we believe that satisfied employees feel a strong sense of ownership and voluntarily strive to make customers happy.
2017 Performance
implementing programs for Greater employee Satisfaction
Woori Bank offers original and interesting programs to boost employee satisfaction. In 2017,
we offered various programs to help employees meet their cultural needs and build networks.
Health for Mind & Body 365 is a program to help our employees take care of their physical and
mental health, and another offered program is the Special Lectures on Culture, which encour-
ages them to discover and enjoy new hobbies. Among our existing programs, we continue to
offer those that have been the most popular among our employees, including the family get-
away initiative Oh! Happy Woori and the psychological counseling program to help employees
deal with feelings of insecurity or with family issues. Through these efforts, we strive to not only
encourage communication and fun but also support our employees in resolving any personal
problems. We are doing our best to implement Woori Bank’s core belief, that the happiness of
our employees and their families is the core foundation of the bank’s competitiveness.
Oh! Happy Woori
Oh! Happy Woori is a family getaway program that began in July 2011 based on the idea that
happy families are the very source of employee satisfaction. Employees and their families can
participate in our seasonal experience programs to spend time with their families and refresh
themselves physically and mentally. Last year, the program offered such experiences as Under-
standing Constellations, visiting Pocheon Herb Island, Korea Job World, My Mother’s Family, and
Korea Job World & a Taekwondo Program at the Kukkiwon. For seasonal trrips, we offered the
programs Together for Spring Flowers and Together in Autumn, designed to offer happy expe-
WOORI BANKANNUAL REPORT 2017 055055
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
055
riences for our employees and their spouses, reinforcing employee
loyalty. Oh! Happy Woori events are held every month with a high
participation rate from our employees, and this has become the
most preferred and sought after program among all our offers. The
program allows our employees an opportunity to have a great time
with family and be reminded of how important family is—something
that can be easily neglected when people are too focused on work.
using the Head Office Auditorium as a Free Wedding Venue
Woori Bank rents out the auditorium at its head office building as a
wedding venue for employees, free of charge. The location has been
praised by our employees for its spaciousness, the ample amount
of time allowed for the ceremony, and its refined decorations. The
venue features a gorgeous bridal room, a separate room to perform
the traditional Korean wedding ceremony known as pyebaek, and a
A Day When Woori Meets Culture
This is a support program to encourage participation of cultural
activities by our employees and their families. Be it musicals, opera,
or classical music, the program responds to the cultural interests of
our staff and enriches their leisure time. First launched in 2012, the
program made a group purchase for performances like the Little
Prince (an opera), Wicked, Dream Girls, and 42nd Street (musicals).
In 2017, in order to further boost employee satisfaction, we contin-
ued to group ticket purchases for musical performances such as
The Bodyguard and Rebecca. We thus provided efficient and satis-
fying forms of support to allow our employees to return to work with
greater energy and in better spirits.
improving ‘pC-Off’ policies for Work-Life Balance
The Banking industry has characteristically imposed a work environ-
newly renovated cafeteria for the wedding banquet. The CEO’s offi-
ment that entailed overtime work at night. To improve such condi-
cial vehicle is also made available as the wedding getaway car. A total
tions, we introduced a work-life balance policy in 2013, which then
of 533 newlywed couples walked down the aisle in this auditorium
became established as a part of corporate culture at Woori Bank
between 2012 and 2015. Its popularity continued in 2016 and 2017,
as most offices and branches came to comply with the policy. The
with an additional 160 pairs and 180 couples getting married there
so-called ‘PC-Off’ deadline is at 19:00 to ensure employees have time
in each year respectively. The benefit of this free wedding venue offer
for leisure activities and family life. It also increased efficiency and
is twofold: it not only helps our employees save on wedding costs
focus at work, reducing unnecessary overtime where possible. In the
but also boosts the sense of pride our employees feel in Woori Bank.
first half of 2017, we introduced flexible work hours, and in the sec-
Benefits Offered in 2017
There are cases of employees who struggle psychologically due to
family issues. Woori Bank supports struggling employees and their
families by making reservations and paying for psychological and
legal counseling services so that our staff are able to focus on their
work with renewed energy. In addition to external counseling ser-
ond half, we improved the existing PC-Off policy for work-life balance
by introducing a PC-Shut-Down function. We will take the initiative
in realizing work and life balance for all our employees. We will con-
tinue our efforts to increase employee satisfaction with constant
on-site monitoring, feedback, and consequent improvement.
Building a Healthy and Vibrant Work Culture
Woori Bank offers annual medical check-ups and blood tests in order
chological tests, counseling visits, and lectures at branches. We also
to continually and systematically manage the health of our employ-
have experience programs to help employees manage stress and
ees. If any symptoms should be identified after a check-up, we sup-
recover mentally, such as one-day meditation courses, temple stays,
port affected employees with our group accident insurance and the
Financial Review
vices, we have an in-house counselor who offers, upon request, psy-
and healing herbal programs.
Branch Workshop Support
We offer team-building workshops for employees outside the head
office through outdoor activities, including zip-line rides, glamp-
ing, yacht rides, all-terrain vehicle (ATV) racing, and outdoor sur-
Coporate Fact Book
vival games. The high employee participation rate proves the pop-
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
ularity of these programs. By taking part in the workshops together,
employees create synergy as they get the opportunity to communi-
cate with each other freely and hence cooperate better at work after
the experience.
In 2016, we hosted the Woori Pop Star event, a talent show in which
employees could show off their talents and passion. In 2017, we orga-
nized the Woori Family Talk! Healing Concert in five cities (Daejon,
Changwon, Daegu, Gwangju, Busan) and created an atmosphere
of harmony for our employees. The Employee Satisfaction Center
thus launched various programs to make our employees happy and
boost sales competencies through communication.
bank’s medical fee subsidy scheme to create a healthy and active
work culture. Meanwhile, our employees and their families are enti-
tled to book and use the shared condominiums Woori Bank owns all
over the country. We also improved our rest and recreation center
operations, extending the business hours and opening on weekends
so that employees can use the center anytime. These benefits help
our employees build a vibrant work culture.
Woori Daycare Center
As part of the government’s policy to address the country’s low birth
rate and actively support working parents, Woori Bank runs a cor-
porate daycare centers in Seoul at Mapo-gu (Happiness Center),
Seongdong-gu (Love Center), and Jung-gu (Dodam Center, opened
at the Woori Bank head office building in August 2016). In addition
to the three existing centers, we opened the fourth center at Bun-
dang, Gyeonggi Province (Saesol Center) in March 2018. We will con-
tinue to open new daycare centers to promote a corporate culture
that encourages raising families and do our best to help working par-
ents cope with childcare challenges. Woori Bank would like to ensure
that all of our employees are happy and that our happy employees,
in turn, will make our customers happy.
WOORI BANKANNUAL REPORT 2017 056056
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
056
Social Contribution activities
Woori Bank has its root in the Daehan Cheonil Bank, a bank founded in 1899 by Emperor Kojong who used the imperial
family’s funds to protect the Korean economy. Proud of its roots as a bank built on national capital, Woori Bank has fulfilled
its responsibilities to contribute to national development for the past 119 years. Today, as great emphasis is placed on
the social roles and responsibilities of finance, we strive to realize our three core values of Humanity, Happiness, and
Hopefulness by serving and sharing with local communities. We also implement various corporate social responsibility
(CSR) programs including support for small business owners and financing for low-income individuals and families.
2017 Performance
Humanity: Humanity in Action with Local Communities
Woori[we] Love Sharing program: Woori Bank’s Signature CSR program
Since launching the Woori Bank Volunteer Corps in July 2007, we have been engaged in a number
of social contribution activities through our nationwide branch network. The Woori [We] Love
Sharing Program is our signature CSR program involving welfare facilities that have sisterhood
ties with 33 regional business headquarters. Our partners are mainly welfare institutions sup-
porting elderly citizens, infants, and the disabled, as well as local children’s centers. Woori Bank
employees regularly visit these facilities and do volunteer work.
At the end of each year, our support extends not only to the institutions under the Woori Love
Sharing program but also to other welfare facilities, supporting people who need help through
our year-end CSR Campaign. We share the best CSR practices put in place by offices and
branches to make our CSR activities dynamic and spread a heart-warming corporate culture.
Do-Touch: A CSR program using a non-Face-to-Face Channel
Woori Bank is the first Korean bank to perform CSR activities using a non-face-to-face channel. In
this new project that was held between May and August 2017, our customers had the chance to
WOORI BANKANNUAL REPORT 2017 057057
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
057
visit the Sweet Donations section on the WiBee Talk messenger app,
read the descriptions of our partner NGOs, and choose to donate KRW
1,000. Any customer using WiBee Talk could take part in this, and if
our customers added their own Honey-Money to the donation, Woori
Bank offered a matching grant. The donations were used to support
families going through financial crises and the children of low-income
families. Woori Bank is dedicated to launching various CSR programs
to enable hassle-free donations for all participants.
Sharing Daily necessities for the underprivileged
Hopefulness: inspiring Hope Through Communication
and Mutual prosperity
Global CSR Activities
Using more than 300 contact points around the globe, Woori Bank
conducts a variety of CSR activities and fulfills its social responsi-
bilities as a global financial company. In December 2017, our new-
est recruits participated in the Campaign to Share Hope with help
children who became climate refugees. There are children from
underdeveloped countries who have lost their homes due to climate
Woori Bank sends practical warm-hearted wishes to marginalized
change and natural disasters. We sent these children t-shirts with
neighborhoods so that they can enjoy holidays and the winter sea-
hand-drawn messages of hope as well as fortified food designed
son comfortably. For the Chuseok (Korean Thanksgiving) holidays,
to prevent malnutrition. We also funded mangrove planting in Ban-
we provided daily necessities for 3,730 elderly citizens in Seoul
gladesh, where forests are rapidly being destroyed due to climate
through the Seoul Association of Senior Welfare Centers in Mapo-gu.
change. Local students and residents worked with us to plant trees,
In November 2017, we worked with the Korean Association of Social
and it was an opportunity to once again understand the importance
Welfare Centers to make kimchi for the winter and distribute it to
of forests as a crucial source of oxygen.
about 2,300 low-income households. Woori Bank will keep working
to build a society where we live together with our neighbors on the
periphery.
Woori Multicultural Scholarship Foundation:
A Reliable partner for Multicultural Families
Happiness: pursuing Happiness Through Sharing
Woori Care Fund and Woori Children’s Care Fund
The Woori Multicultural Scholarship Foundation is a non-profit cor-
poration funded by Woori Bank and other affiliates of the Woori
Financial Group that was established in 2012. Its diverse projects
help multicultural families in Korea to overcome cultural and linguis-
Woori Bank strives to create a culture that encourages employees to donate
tic differences and comfortably integrate themselves into society.
voluntarily to good causes. The Woori Care Fund and the Woori Children’s
Care Fund are the result of these efforts, and they allow employees to directly
donate a regular amount from their monthly payroll.
Since its foundation, a total of 2,910 children from multicultural
families and immigrant spouses received around KRW 1.97 billion
in scholarships. In 2017, the Foundation aimed to expand Woori’s
The Woori Care Fund is used for our Woori Together in Love and Support
responsibilities and contribution as a corporate citizen and radically
scheme, which develops and funds 120 worthy CSR programs every year.
increased the number of beneficiaries and the amount of scholar-
The Woori Children’s Care Fund is spent to help CSR activities for chil-
ship money compared to the previous year by 36 percent and 250
dren suffering from hunger and other hardships. Woori Bank thus actively
percent respectively. In addition to tuition support, the Foundation
builds a culture of sharing among our employees.
We are committed to implementing sharing programs not as a one-off
promotion but as a contribution that has continual as well as immediate
effects. We intend to firmly establish a corporate culture based on sharing
offered educational programs on various subjects including financial
information, culture, and taekwondo. These programs are designed
to aid in the healthy upbringing of multicultural children and com-
fortable settlement of their families in Korean society.
and service, thus fulfilling our responsibilities as a good corporate citizen.
The Foundation also hosted Woori Wedding Day, a joint ceremony
for ten multicultural couples who could not afford a wedding cere-
mony. It also provided subsidies related to furniture purchases for
multicultural children so that they can study more efficiently, and
subsidized medical costs and cultural activities. The Foundation
intends to remain active in enhancing the quality of life and sense of
happiness enjoyed by multicultural families.
Sponsoring Children
The Woori Bank Woori Arts Contest boasts a long history and tradi-
tion, having been hosted 22 times so far. Preschool to high school
students can participate in this contest while their families can take
part in various other programs prepared for the day. The whole
event is designed to allow participants to have fun and make great
memories together.
In addition, the Woori Together Scholarships for Youth are given to
local children’s centers twice a year. 164 children received scholar-
ships in 2017 through this program. The Special Event for Children
from Islands and Remote Areas is a program that invites children to
Seoul from rural or fishing villages where social and cultural resources
may be relatively scarce. The event offers diverse experience pro-
grams including visits to the Gyeongbok Palace and museums.
WOORI BANKANNUAL REPORT 2017 058058
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
058
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 the launch of the Woori Smile
Microcredit Bank as a foundation, agreeing with the Woori Financial Group and its affiliates to raise a total of
KRW 50 billion in funds over a five-year period, contributing KRW 10 billion a year. The Smile Microcredit Bank appointed
well-known people from religious, academic, and social welfare circles as outside directors, ensuring fairness in all processes.
Ten branches are working with 22 employees across the nation to support low-income families and individuals.
Major performance Milestones by Smile Microcredit Bank
Active
Implementation of
Social Responsibility
Finance
Woori Bank has been leading socially responsible banking by offering microcredit loans worth
KRW 483.5 billion in 2017 for the financially struggling, socially vulnerable, and underbanked
people of our society. We support low-to-middle class people with our products. Woori Seed
of New Hope 2 is a product designed for low-income individuals with low credit rating scores.
Switch Loan is a product that allows low-income individuals struggling with debt on high interest
rates to switch to bank loans on lower interest rates.
Through the Smile Microcredit Bank business, Woori Bank made a total of 11,151 microcredit
loans worth KRW 130.8 billion by the end of 2017. The 2017 business objective was to have “Woori
Smile Microcredit Foundation support the financial independence of the people.” We strove to
radically increase microcredit performance by actively visiting the field and identifying potential
beneficiaries of our projects.
As a result, in 2017 we provided a total of 1,813 microcredit loans worth KRW 18.2 billion (cumu-
latively 11,151 loans or KRW 130.8 billion since its launch). Our projects are not just about giv-
ing out money—they are about helping our beneficiaries realize the dream of financial indepen-
dence. That is why we offer on-site consulting and microcredit services, microcredit events at
traditional markets, and volunteer work by Smile Volunteer Corps.
WOORI BANKANNUAL REPORT 2017 059
Key products of Smile Microcredit Bank
Loans for Startup Leasing: A small- or micro-business owner who has a business registration
can get a loan when renting a premise to start up their business.
Loans for Operating Capital: A sole proprietor who has been running a place of business for
more than six months is eligible to get this loan to purchase products, raw materials and other
items.
Loans for Facility improvement: A sole proprietor who has been running a place of business
for more than six months is eligible to get this loan to improve business facilities.
emergency Loan for Youth and College Students: Youth and college students aged 29 or under (31 in
case of men who have completed their mandatory military service) can apply for this emergency loan.
Smile Microcredit Making Your Dream of Financial independence Come True
We plan to conclude agreements with merchant societies at traditional markets, various associ-
ations, and other business-owner related organizations to identify vulnerable small businesses
and expand the scope of our support. To broaden the scope of financing for low-income indi-
viduals and families, we will further help local governments through their centers for compre-
hensive financial support and the centers for employment and welfare. We will also identify
and spread good microcredit practices so that beneficiaries can feel confident and realize their
dream of independence. By doing so, we will take the initiative in sharing and promoting the true
role of microcredit and how it can help people.
Woori Bank will enthusiastically continue these microcredit projects to help individuals and
families suffering from low credit ratings and low incomes. The ultimate goal is to help them
become financially independent and contribute to improving their security and welfare.
Woori Smile Microcredit’s Cumulative Performance
[Unit:KRW billion]
[Unit:cases]
2017
2016
2015
130.8
112.7
2017
2016
2015
95
11,151
9,338
7,560
059059
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017 060
03
FinAnCiAL
ReVieW
061
Management’s discussion and Analysis
072
independent Auditors’ report
060060
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017 061061
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
061
maNaGemeNT’S DISCUSSION aND aNaLySIS
1. Overview
In 2017, uncertainty around the world increased. The United States hiked interest rates and took up a hardened protectionist stance in trade,
while political controversies over the issue of the Terminal High Altitude Area Defense (THAAD) affected us in multiple ways. Then there was
the emergence of the fourth industrial revolution leading to the launch of Internet-only banks as well as the more immediate possibility of the
technology sector offering financial services. In other words, the market conditions have been extremely challenging this year. Amid such con-
ditions, Woori Bank has enhanced its financial performance over the past three years. As financial soundness indicators including our non-per-
forming loans (NPL) ratio and delinquency ratio radically improved each year, asset quality and capital adequacy indicators also demonstrated
a strong trend for the better, with the Common Equity Tier 1 ratio reaching 10.95%. This overall improvement enhanced our risk management
ability, which allowed us to exhibit outstanding business performance under the low-growth and low-interest-rate environment of the past few
years. Continuing our streak of great results from 2016, Woori Bank managed to surpass the previous year’s net income figures in 2017 after only
nine months.
Key Management Indicators
Category
Profitability
Capital Adequacy
Asset Quality
1)
Return on Assets (ROA)
1)
Return on Equity (ROE)
2)
Net Interest Margin (NIM)
1)
Total Equity Ratio (BIS Ratio)
1)
Common Equity Tier 1Ratio
2)
NPL Ratio (Bank)
2)
Delinquency Ratio
1) Based on consolidated financial statements
2) Based on separate financial statements
th
2017
term)
(184
0.48
7.42
1.47
15.40
10.95
0.83
0.34
rd
2016
term)
(183
0.41
6.36
1.41
15.29
10.50
0.98
0.46
(Unit: %)
nd
(182
2015
term)
0.37
5.69
1.41
13.66
8.47
1.47
0.82
In response to more rigorous regulations on household loans, we have pursued a balanced growth of assets involving household, SMEs, and
large companies, while we have continuously enhanced non-interest profits by reinforcing asset management competencies to meet customer
needs. In October 2017, Woori Bank beat rival banks and was selected as the primary bank for the National Pension Service (NPS). In January
2018, Woori Bank was also re-appointed as the managing custodian bank for the National Housing and Urban Funds (NHUF). Both results show
how Woori Bank’s business competencies are recognized and trusted.
As growth in the Korean financial market has remained stagnant, many domestic banks are accelerating entry into global markets. As of the
end of 2017, Woori Bank has over 300 contact points in its global network, the largest in scale among Korean commercial banks. In an effort to
add quality to growth in quantity, the bank is providing more loans in Southeast Asia and establishing new business models in consideration of
the characteristics of each region. We are currently reinforcing our global management competencies and building a global risk management
system through bank-wide cooperation so that we can efficiently manage our extensive network.
Through the development of digital financial technology such as big data, blockchain, and artificial intelligence (AI), it has become an immedi-
ate possibility for the technology sector to offer financial services. The emergence of Internet-only banks including K Bank and Kakao Bank is
posing a threat to traditional banking business methods. Under these circumstances, Woori Bank is enhancing its financial service environment
to be more user-centric, expanding banking product development based on new digital technologies, and making systematic efforts to adapt
to the fourth industrial revolution. In line with such efforts, the Digital Banking Business Group and the Digital Strategy Department were estab-
lished to develop and implement new digital technology-related businesses. Starting in 2017, Woori Bank plans to extend its digital ecosystem
to the global arena and strengthen bank-wide digital competencies by fostering expertise and ensuring systematic management.
Since Woori Bank declared an era of ‘bigger banking’ in 2017 to fulfill its social responsibility as a corporate citizen, its efforts to support financ-
ing for low-income customers and investment in innovative companies have continued to make its banking efforts inclusive, productive and
trustworthy. The bank is also pursuing various measures to expand business portfolios in the non-banking sector and establish a comprehen-
sive financial services group.
WOORI BANKANNUAL REPORT 2017
062062
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
062
2. Financial position & Business performance Results
A. Financial position & Business performance Results
(1) Growth
Account
Total Assets
Loans in KRW
Corporate loans
Household loans
Public and other loans
* Based on consolidated financial statements
th
2017
term)
(184
rd
2016
term)
(183
Change
(amount)
Change
(percentage)
(Unit: KRW billion)
316,295
200,213
89,666
106,814
3,733
310,683
191,309
84,502
102,570
4,237
5,612
8,904
5,164
4,244
(504)
1.8%
4.7%
6.1%
4.1%
(11.9%)
As of the end of 2017, Woori Bank’s total assets (consolidated basis) stands at KRW 316.3 trillion, a KRW 5.3 trillion (1.8%) increase from the pre-
vious year. The increase was mainly due to the year-on-year increase of loans in Korean won by KRW 8.9 trillion (4.7%), the bank’s key assets.
Corporate loans increased by KRW 5.2 trillion, and household loans increased by KRW 4.2 trillion, illustrating the portfolio’s balanced growth. In
2018, Woori Bank will keep pursuing a strategy of balanced asset growth in consideration of risk management and profitability.
(2) Profitability
Account
I.Operating profit
Net interest income
Non-interest income
Net fees & commissions income
Dividend income
Net gain (loss) on available-for-sale (AFS) financial assets
Other operating income
General and administrative expenses
Impairment losses due to credit loss
II.Non-operating gain (loss)
III. Net income before income tax expense
IV.Income tax expense
V.Net income
(1) Net income attributable to owners
(2) Net income attributable to non-controlling interests
* Based on consolidated financial statements
th
2017
term)
(184
(Unit: KRW billion)
Change
rd
2016
term)
(183
2,157
5,221
1,252
1,070
125
193
(136)
(3,531)
(785)
(207)
1,950
419
1,530
1,512
18
1,574
5,020
867
937
185
(1)
(254)
(3,478)
(834)
(21)
1,553
276
1,278
1,261
16
583
201
385
133
(60)
194
118
(53)
49
(186)
397
143
252
251
2
In 2017, Woori Bank’s net income reached KRW 1,512.1 billion (consolidated basis, controlling interests), achieving an increase of 19.9 percent
or KRW 250.8 billion in annual growth compared to its 2016 net income of KRW 1,261.3 billion. This means an increase of net income of nearly
20 percent for two consecutive years (19.1% in 2016, 19.9% in 2017). The increase resulted largely from 1) a stable increase in both interest and
non-interest income; 2) a continued decrease in bad debt expenses by businesses focused on sound assets; 3) appropriate sales and adminis-
trative expenses.
Net interest income reached KRW 5,221 billion for a four-percent increase over the previous year. Contributing factors included the first base
rate increase in six and a half years by the Bank of Korea (in November 2017), market rate increases based on expectations of the former, the
positive impact of our low-expense deposit increase (annual 9.9% growth) on NIM, and strong growth in loan focused on SMEs. Thanks to
impressive results in asset management products and foreign currency derivatives, our non-interest income showed notable growth, with an
increase of KRW 385 billion or a 44 percent increase from the previous year. Income from net fees and commissions, a main form of non-interest
income, increased by KRW 133 billion (14.2%) year-on-year. This is largely due to impressive performance from asset management products,
including the 82.9 percent year-on-year increase in trusts based on increased ELT sales. Although dividend income decreased by KRW 60 billion,
WOORI BANKANNUAL REPORT 2017
063
gains on AFS financial assets increased by KRW 194 billion year-on-year. The increase in foreign currency derivatives and other factors caused
other operating income to increase by KRW 118 billion over the previous year.
General and administrative expenses including personnel and non-personnel expenses were KRW 3,531 billion or an increase of KRW 53 bil-
lion year-on-year. Although Woori Bank implemented a large-scale voluntary early retirement program (ERP, covering a total of 1,012 persons
at a cost of KRW 299.6 billion) to improve its mid- and long-term expenses, its impact on general and administrative expenses was a 1.5 per-
cent increase over the previous year. If the impact of ERP were excluded, the equivalent figures would show a slight decrease. The general and
administrative expenses were adequately managed by reducing the number of branches and enhancing channel efficiency, as well as through
efficient human resources management. Impairment losses due to credit loss reached KRW 785 billion in 2017 (KRW 834 billion in 2016 and KRW
967 billion in 2015), a decrease of KRW 49 billion from the previous year. Despite the reserve of a large-scale allowance regarding Kumho Tire
Co., Inc. in the fourth quarter of 2017, our bad debt expenses decreased by 5.9 percent over the previous year, thanks to the continued improve-
ment of asset quality. Woori Bank has managed bad debt expenses by increasing quality credit assets and through continued monitoring and
preemptive control of industries under our watch category, such as shipbuilding, construction and marine transport, as well as through rigor-
ous risk management. In 2017, our annual bad debt expenses stood at around 34bp. Non-operating income in 2017 showed a loss of KRW 207
billion. This loss was a result of impairment losses due to the credit loss regarding Kumho Tire and the contribution of issuance costs for an out-
standing cashier’s check to the Korea Inclusive Finance Agency under the revised Microfinance Support Act.
2018 is expected to be another year in which the bank operates under a challenging financial environment, with a potential base interest rate
increase and intensifying trade wars around the world. Woori Bank plans to maintain a strategy of growth, keeping pace with national eco-
nomic growth, and focus on enhancing soundness and capital adequacy by reducing potentially delinquent assets in addition to pursuing
growth based on quality assets. Since current economic conditions make it difficult to increase net interest income, we will focus our compe-
tencies on non-interest income and endeavor to reduce costs by making human resources and channels more efficient, managing general and
administrative expenses on a stable level.
(Unit: KRW 100 million, %, %p)
(3) Asset Quality
Category
Non-performing loans (NPL)
NPL ratio
*
NPL coverage ratio
Delinquency ratio
th
2017
term)
(184
rd
2016
term)
(183
nd
2015
term)
(182
Indicators
Change
Indicators
Change
Indicators
18,542
0.83
87.7
0.34
(2,579)
(0.15)
3.2
(0.12)
21,121
(9,888)
31,009
0.98
84.5
0.46
(0.49)
14.3
(0.36)
1.47
70.2
0.82
* The amendment of the Detailed Enforcement Rules for the Regulations on Supervision of Banking Business (Schedule 7, as of December 14, 2016) and the Standards for Integrated
Management Disclosure for Financial Business (as of January 26, 2017) recognized bad debts reserve as capital, therefore excluding bad debt reserve from the total of allowances. The
calculation has been done based on the amended regulations. Before the amendment, the amount including the bad debt reserve would have been 165.0% (2016) and 183.8% (2017).
Woori Bank has shown outstanding increases in asset quality each year through preemptive risk management and continued back-door-lock-
ing. The NPL ratio has been reduced continually, from 1.47% in 2015 to 0.98% in 2016 and 0.83% in 2017. The NPL coverage ratio is increasing
annually, from 70.2% in 2015 to 84.5% in 2016 and 87.7% in 2017. With these results, the bank is thoroughly preparing for any additional losses
that it may incur. Corporate loans in 2017 reached KRW 112 trillion with an NPL ratio of 1.40 percent, against the 2016 results of KRW 110 tril-
lion and 1.62 percent. Despite the increase in the total loan amount, the NPL ratio decreased due to the inflow of sound businesses and strict
portfolio management. Household loans reached KRW 107 trillion in total with an NPL ratio of 0.24 percent, against the 2016 results of KRW 103
trillion and 0.28 percent. The same trend resurfaces: an increase in total loans and a decrease in the NPL ratio (NPL as defined by FSS). The man-
agement of asset quality led to a radical reduction in the bank-wide delinquency ratio, from 0.82% in 2015 to 0.46% in 2017 and 0.34% in 2017.
Since sufficient allowances have been reserved for debtors of debt restructuring in work-outs and corporate rehabilitation, the likelihood of
additional losses in NPL is very low. For these debts, normalization efforts continue while we will consider sales in case normalization is impos-
sible. Regarding industries with high risk, such as shipbuilding, construction, marine transportation, steel, and petrochemicals, our exposure
continues to decrease each year, and we monitor individual debtors in these industries. The situation is being managed so that we can take pre-
emptive action amid the uncertain financial conditions in and outside Korea.
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Risk Management
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Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
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Organizational Chart
Global Network
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WOORI BANKANNUAL REPORT 2017
064
(4) Capital Adequacy
Category
Common equity Tier 1 capital
Other Tier 1 capital
Tier 2 capital
Total risk-adjusted capital
Risk-weighted assets
Common equity Tier 1 ratio
Tier 1 capital ratio
Total capital ratio
th
2017
term)
(184
16,075
3,042
3,487
22,603
146,762
10.95%
13.03%
15.40%
rd
2016
term)
(183
15,715
3,276
3,911
22,901
149,728
10.50%
12.68%
15.29%
(Unit: KRW billion)
Change
+361
(234)
(424)
(297)
(2,966)
+0.45%p
+0.35%p
+0.11%p
In 2017, the Common Equity Tier 1 capital of Woori Bank (on a consolidated basis) reached KRW 16,075 billion, an increase of KRW 361 billion or
2.3 percent from the previous year. The Tier 2 capital was KRW 3,042 billion, an increase of KRW 234 billion year-on-year, which resulted from
the repayment of hybrid securities issued before the implementation of Basel III. Considering the issuance cost, Woori Bank plans to reduce the
scale of its hybrid securities on a continual basis. The Tier 2 capital amounted to KRW 3,487 billion or a decrease of KRW 424 billion year-on-year,
affected by such factors as the decrease in recognized subordinated debt issued before the implementation of Basel III and the falling exchange
rate over the previous year.
As of the end of 2017, the total risk-adjusted capital of Woori Bank reached KRW 22,603 billion, a decrease of KRW 297 billion from the previous year.
As of the end of 2017, risk-weighted assets (consolidated basis) amounted to 146,762 billion, a decrease of KRW 2,966 billion from the previous
year. This reduction is an outcome of the bank’s proactive efforts to enhance capital adequacy by expanding sound assets and reducing poten-
tially delinquent assets.
In 2017, Woori Bank achieved a common equity Tier 1 ratio of 10.95 percent, a Tier 1 capital ratio of 13.03 percent, and a total capital ratio of
15.40 percent, which translates into an increase of 0.45%p, 0.35%p, and 0.11%p respectively. Capital adequacy continues to improve, and
Woori Bank is committed to maintaining this trend by realizing profits and securing an adequate level of capital.
B. new Businesses & Suspended Businesses
Woori Bank implemented a new business venture in joining the bid for the banking and currency exchange business license at the new Termi-
nal 2 of Incheon International Airport. The number of passengers going through the new terminal annually is expected to top 18 million, which
will ensure a boost in publicity and profits from remittances and transfers. In May 2017, the bank’s board of directors decided that Woori Bank
would participate in the bidding for the banking/currency exchange business license in the new terminal. In June, the Incheon International
Airport Corporation made its selection, and we secured business rights at Terminal 2 until 2023 (with a 185㎡ branch, four currency exchange
booths, and four ATMs). The new Woori Bank branch opened for business with the official launch of Terminal 2 on January 18, 2018.
C. Business Rationalization
(1) Alteration and Reorganization of Business Groups
Woori Bank established a cooperative system among its business groups to create synergy, reorganized its organizational structure to rein-
force competitiveness in digital banking, and established new exclusive units to acquire future customers and implement bank-wide initiatives
to pursue innovation.
First, we introduced a ‘business unit’ for cross-business collaboration. To take active action within a changing financial environment, we have
regrouped closely related groups and units into domestic, global, and sales support business units for maximum organizational synergy.
Second, the Digital Banking Business Group and the Digital Strategy Department have been established to ensure a systematic response to
the fourth industrial revolution. They develop and implement businesses related to new digital technologies such as big data and blockchain.
The National Pension Department was added as an exclusive unit to ensure the provision of high-quality services as Woori Bank serves as the
primary bank for the NPS. Finally, the Management Innovation Department was established to bring innovation to the bank’s organizational
culture and change management.
064064
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Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
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WOORI BANKANNUAL REPORT 2017
065
(2) The Voluntary Early Retirement Program and Other Matters
Since 2005, Woori Bank has implemented a Job Change Support Program that serves as our amended and upgraded ERP program. The Job Change
Support Program aims to resolve the bottleneck in promotions and improve the bank’s human resource structure while allowing employees to
find new opportunities in the second chapter of their lives. In particular, the bank operates a center and various programs for employees who plan
to change jobs to provide systematic support for a new life after retirement. As of July 2017, job change support was given to a total of 1,012 employ-
ees, offering reemployment opportunities through job sharing and other programs and improving the bank-wide human resource structure.
D. Asset impairment Losses
Woori Bank recognized impairment losses whenever the book value of AFS securities and securities in equity method decreased by over 30
percent against their acquired values.
(Unit: KRW million)
Category
Item
Loss amount
Cause of loss
AFS securities
AFS securities
AFS securities
AFS securities
AFS securities
Hyundai Merchant Marine
Hyundai Cement
STX Heavy Industries
Dongbu Steel
Oriental Precision & Engineering
Securities in equity method
Kumho Tire
Securities in equity method
Chinhung International
Securities in equity method
Securities in equity method
STX
Saman
Securities in equity method
Poonglim Industrial
Securities in equity method
STX (unlisted)
* Based on separate standards of the bank
3. Liquidity, Sources & Applications of Fund
A. Liquidity
Category
1)
Integrated LCR
2)
Foreign currency LCR
High liquidity assets
Net cash outflows
Liquidity coverage ratio
High liquidity assets
Net cash outflows
Liquidity coverage ratio
The book value
of these assets
decreased by over
30% against their
acquired values.
8,987
6,787
4,289
1,306
1,176
76,720
37,551
7,525
7,267
4,250
635
(Unit: KRW billion, USD million)
th
2017
term)
(184
40,067
39,581
101.23%
3,193
3,077
103.77%
rd
2016
term)
(183
39,835
36,344
109.61%
-
-
-
nd
2015
term)
(182
35,591
33,365
106.67%
-
-
-
1) Consolidated basis. The figures are calculated based on the average balance of December for the 184th term; based on the balance as of the end of December for the 183rd and 182nd
terms.
2) Consolidated basis implemented from 2017 (as of 2017, the supervisory standard is 60%; it is expected to increase by 10%p annually, and hence will be 80% or more by 2019). The fig-
ures are calculated based on the average balance of December for the 184th term.
Woori Bank has managed liquidity in compliance with regulatory standards (80% in 2015, 85% in 2016, 90% in 2017, 95% in 2018, 100% or more
in 2019) under the new liquidity index or integrated LCR introduced in 2015. The December 2017 average balance stood at 101.23 percent,
over the regulatory standard (90%), with the ratio remaining stable. For foreign currency LCR applied since 2017, Woori Bank secured high liq-
uid assets including U.S. Treasury bonds, comfortably meeting the regulatory standards at 103.77 percent in December 2017 (the standards
are 60% for 2017, 70% for 2018, and 80% from 2019 onwards). To secure a stable structure of sourcing funds and properly manage a potential
asset-liability maturity mismatch, we have analyzed liquidity crisis scenarios and used the results to establish and implement bank-wide liquid-
ity risk management plans to control emergency funding, liquidity asset scale, balancing in sources of fund, and other relevant matters.
065065
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Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017
066066
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
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Digital Strategy
A Trust-worthy Partner
066
B. Sources of Fund
Item
Fund
Funds in
Deposits, installments
KRW
Certificates of deposit
Borrowings in KRW
Call money in KRW
Others
Subtotal
(Unit: KRW million, %)
2017(184
term)
th
2016(183
rd
term)
2015(182
term)
nd
Average
balance
Interest
rate
%
Average
balance
Interest
rate
%
Average
balance
Interest
rate
%
187,332,008
1.26
66.02
183,440,285
1.38
65.35
169,919,620
1.70
64.76
4,500,100
1.66
1.59
3,466,223
1.70
1.23
1,879,832
1.92
0.72
6,213,903
1.32
2.19
6,709,080
1.45
2.39
6,689,135
1.77
2.55
1,254,623
1.23
0.44
1,159,188
1.32
0.41
1,370,253
1.62
0.52
20,168,307
2.29
7.11
18,532,241
2.60
6.60
18,944,493
2.95
7.22
219,468,941
1.37
77.34
213,307,017
1.50
75.98
198,803,334
1.82
75.77
Funds in
Deposits in foreign currencies
14,338,927
0.51
5.05
14,838,684
0.47
5.29
11,568,322
0.44
4.41
foreign
Borrowings in foreign currencies
7,267,096
1.38
2.56
8,595,575
0.86
3.06
9,245,073
0.53
3.52
currencies
Call money in foreign currencies
980,001
1.14
0.35
1,401,294
0.70
0.50
1,199,484
0.53
0.46
Debentures in foreign currencies
3,649,805
3.11
1.29
3,950,614
2.54
1.41
4,851,289
2.72
1.85
Others
Subtotal
Others
Total capital
Provisions
Others
Subtotal
574,786
0.14
0.20
531,877
0.29
0.19
650,409
0.66
0.25
26,810,615
1.12
9.45
29,318,044
0.87
10.44
27,514,577
0.88
10.49
20,134,843
351,750
16,993,430
37,480,023
-
-
-
-
7.10
19,617,484
0.12
412,553
5.99
18,070,427
13.21
38,100,463
-
-
-
-
6.99
18,501,137
0.15
640,666
6.44
16,907,843
13.57
36,049,647
-
-
-
-
7.05
0.24
6.44
13.74
Total
283,759,580
1.16
100.00
280,725,524
1.23
100.00
262,367,557
1.47
100.00
1) Deposits in KRW = Deposits in KRW – Deposit checks & bills in the process of collection – reverse deposits with BOK – inter-bank adjustment funds (call loans)
* Deposit checks & bills in the process of collection = total checks and bills in the process of collection – checks & bills on clearing for overdrafts – inter-bank adjustment funds (call
money)
* Interest for calculating interest rates is the sum of interest on deposits and installment deposits and deposit insurance premiums.
2) Deposits in foreign currencies = Deposits in foreign currencies + off-shore deposits in foreign currencies
3) Borrowings in foreign currencies = Borrowings in foreign currencies + dues to BOK in foreign currencies + off-shore borrowings in foreign currencies
4) Debentures in foreign currencies = Debentures issued in foreign currencies + offshore debentures in foreign currencies
5) Based on K-IFRS financial statements
6) Excluding merchant banking accounts
The average fund balance sourced by Woori Bank in 2017 stood at KRW 284 trillion, an increase of KRW 3 trillion over the previous year. The
average funds in Korean won were KRW 219 trillion, mainly sourced by deposits from customers for the stable management of the loan-to-de-
posit ratio. As a result, deposits increased by KRW 4 trillion over the previous year, mainly in core liquidity deposits. To respond to increasingly
rigorous LCR standards, we expanded the issuance of senior debts, and other capital including debentures increased by KRW 2 trillion over the
previous year. In order to minimize the impact from the changed formula to calculate the loan-to-deposit ratio, the Bank plans to adjust fund-
ing and management portfolios according to market conditions and control profitability and the loan-to-deposit ratio at the same time. The
average balance of funds in foreign currencies (converted into KRW) decreased by KRW 2.5 trillion against the previous term due to the fall in
the exchange rate. In funding, we have reduced financing from the market (borrowings and debentures) and gradually increased deposits in
foreign currencies for stability.
Maturity of Major Financial Debts
Category
3 months or less
4 to 6 months
7 to 9 months
10 to 12 months
1 to 5 years
Over 5 years
Total
(Unit: KRW million)
Financial liabilities at
fair value through profit
and loss
Deposits from
customers
Borrowings
Debentures
Other financial
liabilities
Total
160,057
154,475
-
-
-
-
314,532
143,085,964
28,776,407
17,749,883
29,951,466
6,723,926
644,187
226,931,833
5,339,315
1,570,513
6,531,004
1,700,358
2,069,703
1,488,848
678,054
1,132,055
1,512,183
3,799,707
14,614,016
479,140
13,939,423
2,843,612
23,288,081
-
-
-
-
2,704,197
9,235,201
156,686,853
32,700,943
19,916,785
32,595,704
25,137,649
6,671,136
273,709,070
* Derivative financial liabilities and off-balance accounts (payment guarantees and commitments) are excluded.
WOORI BANKANNUAL REPORT 2017
067067
Woori Overview
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Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
C. Applications of Fund
Item
Applications
2017(184
term)
th
2016(183
rd
term)
067
(Unit: KRW million, % )
2015(182
term)
nd
Average
balance
Interest
rate
%
Average
balance
Interest
rate
%
Average
balance
Interest
rate
%
Funds in
Deposits in KRW
3,424,567
1.28
1.21
3,171,599
1.34
1.13
2,580,842
1.72
0.98
KRW
Marketable securities in in KRW
35,186,537
1.95
12.40
33,880,119
2.58
12.07
32,994,958
2.79
12.58
Loans in KRW
194,161,817
3.05
68.42
189,079,324
3.10
67.35
176,631,188
3.42
67.32
Advance payments on acceptance
and guarantees
Call loans in KRW
Privately placed bonds
Credit card receivables
Others
26,639
3.14
0.01
51,254
0.89
0.02
64,533
1.89
0.02
2,275,748
185,092
28
4,235,478
1.33
5.94
-
1.99
0.80
0.07
0.00
1.49
3,581,382
247,292
24
4,580,215
1.41
5.19
-
2.04
1.28
0.09
0.00
1.63
2,083,053
280,702
-
1.64
5.98
-
0.79
0.11
-
4,313,781
2.61
1.64
Allowance for doubtful accounts in KRW (-)
(1,284,188)
-
(0.45)
(1,925,177)
-
(0.69)
(2,482,955)
-
(0.95)
Subtotal
238,211,718
2.85
83.95
232,666,033
2.98
82.88
216,466,103
3.31
82.50
Funds in
Deposits in foreign currencies
3,791,184
foreign
Marketable securities in foreign currencies
2,735,707
currencies
Loans in foreign currencies
Call loans in foreign currencies
Bills bought in foreign currencies
Others
Allowance for doubtful accounts in
foreign currencies (-)
Subtotal
Others
Cash
Property, plant and equipment
for business
Others
Subtotal
0.67
1.07
2.51
1.33
1.88
2.50
1.34
0.96
3.80
0.88
2.61
0.02
3,761,286
1,752,884
13,371,873
2,940,858
7,110,164
13,829
0.43
1.13
1.95
0.85
1.53
9.72
1.34
0.62
4.76
1.05
2.53
0.00
2,872,735
1,375,146
14,206,736
2,040,819
6,899,811
17,047
0.28
1.51
1.65
0.59
1.38
6.96
1.09
0.52
5.41
0.78
2.63
0.01
10,790,442
2,506,588
7,417,500
48,472
(332,301)
-
(0.12)
(312,211)
-
(0.11)
(191,224)
-
(0.07)
28,638,685
1.51
10.20
27,221,069
1.37
10.38
26,957,590
1.85
1,201,343
2,352,466
15,036,463
18,590,272
-
-
-
-
9.50
0.42
1,169,566
0.83
2,325,893
5.30
6.55
15,925,347
19,420,807
-
-
-
-
0.42
0.83
1,116,715
2,328,130
5.67
6.92
15,235,540
18,680,385
-
-
-
-
0.43
0.89
5.81
7.12
Total
283,759,580
2.57
100.00
280,725,524
2.62
100.00
262,367,557
2.87
100.00
1) Deposits in KRW = Deposits in KRW – Reverse deposits with BOK
2) Marketable securities in KRW = Marketable securities in KRW + Loaned securities in KRW
* Interest for calculating interest rates = Securities interest (including dividend received) + Evaluation profit (net) + Gain on redemption of securities (net) + Portion excluding the gain
from stock transactions (net) out of gains on sales of securities
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
4) Deposits in foreign currencies = Deposits in foreign currencies + Offshore deposits in foreign currencies
5) Interest on securities in foreign currencies = Interest on securities in foreign currency + Loaned securities in foreign currencies
* Interest for calculating interest rates = Securities interests (including dividend received) + Evaluation profit (net) + Gain on redemption of securities (net) + Portion excluding the gain
from stock transactions (net) out of gains on sales of securities
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
7) Cash = Cash – Total checks & bills in the process of collection
8) Property, plant and equipment for business = Property, plant, and equipment for business – Accumulated depreciation
9) Based on K-IFRS financial statements
10) Excluding merchant banking accounts
The average fund balance managed by Woori Bank in 2017 stood at KRW 238.2 trillion, an increase of KRW 5.5 trillion over the previous year. This
result was due to an increase of loans in Korean won (KRW 5.1 trillion) and marketable securities in Korean won (KRW 1.3 trillion). Out of all loans
in Korean won, household loans increased by KRW 6.3 trillion, while corporate loans decreased by KRW 1.2 trillion.
Since the Bank of Korea decreased the base rate by 25bp, the interest rates for loans in KRW had decreased, but with the high expectations
for the base rate increase in the second half of 2017, the interest rate bounced back, decreasing profits from loans in Korean won by 5bp. Mar-
ketable securities in Korean won increased by KRW 1.3 trillion as high liquidity assets such as public and government bonds increased due to
toughened regulations by the supervisory authority. The LCD guidelines introduced in 2015 are 85 percent for 2016, 90 percent for 2017, and
95 percent for 2018. Assets in foreign currencies stood at KRW 27.0 trillion, a decrease of KRW 1.6 trillion since the previous year. This was due
to the decrease of loans in foreign currencies (KRW 2.6 trillion) and the increase of marketable securities in foreign currencies (KRW 1.0 trillion).
Woori Bank will control the applications of funds effectively so that the liquidity guidelines (for loan-to-deposit ratio, LCR, etc.) can be followed
properly.
WOORI BANKANNUAL REPORT 2017
068
4. Transactions out of Books
Category
th
2017
term)
(184
Payment guarantees
Confirmed guarantees
Unconfirmed guarantees
CP purchase commitments and others
Commitments
Loan agreements
Other agreements
6,875,021
4,526,593
1,458,101
80,760,325
4,546,090
(Unit: KRW million)
rd
2016
term)
(183
8,270,187
5,101,701
1,389,896
83,795,496
4,840,593
5. Other issues Required for informed investment Decisions
A. environmental impact and employees
(1) Environmental Impact
As a financial service provider, Woori Bank’s banking and trusts businesses do not have an environmentally destructive impact. Therefore, the
bank is neither currently paying nor is likely to have to pay any environmental restoration (“remediation”) or damage compensation expenses
in the future. It has not been and is not likely to be subject to administrative measures by the government or environmental authorities. Woori
Bank, however, has been designated as a company subject to premise control under Paragraph 5, Article 42 of the Framework Act on Low-Car-
bon, Green Growth. Accordingly, the Bank has reported to the government its greenhouse gas emissions and energy consumption as below.
Category
Greenhouse gas emissions (ton CO2)
Energy consumption (TJ)
2013
95,574
1,463
2014
93,676
1,421
2015
91,322
1,360
(Unit: KRW million)
2016
88,470
1,315
2017
88,121
1,349
(2) Employees and Other Matters
Woori Bank draws up a human resources plan based on changes in the management environment and bank-wide strategic directions. We pre-
emptively respond to expected mid- and long-term personnel shifts. While our continued recruitment and CDP control secure experts in cor-
porate business, our in-house training of human resources will help us become leaders in the global and fintech businesses. This is how Woori
Bank has built up the best human resource pool in the financial sector. Meanwhile, as of the end of 2017, our regular employees consist of busi-
ness unit and group heads (25%), managers (29%), and clerks or lower-level employees (46%), maintaining a pyramid HR structure. To build a
culture that pursues work-life-balance, we introduced flexible work hours in May 2017, which has helped us boost productivity and efficiency as
employees are able to work more flexible hours.
B. Derivatives and Risk Management policy
(1) Derivatives
Woori Bank trades derivatives mainly for corporate clients. Our corporate clients are exposed to risks including rises in interest rates and fluctu-
ations in the stock market and exchange rates. Accordingly, there is a need to hedge against any of these risks. While we offer diverse derivative
products to satisfy the hedging needs of corporate clients, we also offer products to hedge against the interest rate and foreign currency risks
incurring from our assets and liabilities. The trading balance of our derivatives transactions was KRW 200,645 billion in 2015, KRW 232,663 bil-
lion in 2016, and KRW 267,430 billion in 2017.
The following are Woori Bank’s major derivative instruments:
- Interest rate swaps, options, and futures related to interest rate risks
- Index futures and options related to stock market fluctuations
- Currency forwards, swaps, options, and futures related to currency risks
- Derivatives offered to clients who would like to avoid the price risks associated with raw materials
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(2) Risk Management Policy
1) Overview
(A) Objective
The objective of risk management is to identify the sources of risks and measure the scale and adequacy of the bank’s response to make and
implement decisions to avert or mitigate the risks, thereby enhancing the soundness of the bank’s investments and holdings.
(B) Risk Management Organization
Board of Directors
President & CEO
Risk Management Committee
Business Support Unit
Risk Management Council
Risk Management Group
Risk Management Department
Loan Review Department
① Risk Management Committee
② Risk Management Council
〮 Top decision-making body for risk management
〮 Organization: Three outside directors and one non-standing director
〮 Organization: Head of the Business Support Unit (chair), six heads of
business groups
〮 Major items for resolution
- Establishment of the basic risk management strategy
- Credit line approval and capital allocation
〮 Meeting cycle: Quarterly
〮 Major items for resolution
- Deliberation of risks regarding new products
- Decisions regarding the bank’s interest rate standards
- Sourcing plan for funds (liquidity management)
〮 Meeting cycle: Monthly and when necessary
(C) Risk Management Strategy & Procedures
① Strategy
While eliminating excess risks and managing an adequate level of risk, we maximize our profit to risk ratio, pursuing asset soundness and prof-
itability at the same time.
② Procedures
〮 Risk recognition: We analyze various sources of risks possibly associated with the bank’s business activities
〮 Risk measurement/assessment: We determine risk measurement methods by risk type and measure the scale of risks using our measuring
system, assessing the adequacy of the scale afterward.
〮 Risk control: We control risks in our daily, monthly and quarterly reports to avert/mitigate risks or maintain risks at adequate levels.
〮 Risk monitoring & reports: We continuously monitor risk levels and define the channels, content, and cycles of reporting to respond to risk sit-
uations properly.
2) Credit Risks
(A) Definition
Credit risk represents ‘the potential financial losses that can incur to the Bank when the counterparty becomes insolvent or rejects transac-
tions within the period provided in the contract.’ The goal of credit risk management is to maintain the bank’s credit risk exposure to a permis-
sible degree and to optimize its rate of return considering such credit risk.
(B) Management Methods
We manage credit lines, aggregation, total exposure, and portfolios so that we can calculate and control adequate credit lines by aggregation,
company, and industry as we handle loans.
① Aggregation management: We aggregate the exposures of borrowers who share credit risks and put them under a single credit risk aggrega-
tion management system to control the bank’s potential exposure to credit risks.
② Total exposure management: To prevent a concentration of loans, we calculate corporate value based on future cash flow and set the ceil-
ings per borrower within the borrower’s repayment capacity from operating revenues.
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(3) Operational Risks
(A) Definition
We define operational risks as the potential risks of loss that can result from inadequate internal processes, personnel and systematic factors,
as well as external factors.
(B) Operational Risk Management Method
To reinforce competitiveness, reduce the amount of risk capital, enhance operational risk management competencies, and prevent any unex-
pected incidents, Woori Bank has established an operational risk management system 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 mea-
surement approach was submitted to the Financial Supervisory Service (FSS) and obtained FSS approval in June 2009, coming into effect on
June 30.
① Operational Risk Management Tools
- Risk Self-Assessment (RSA): RSA refers to a series of risk management activities that allow self-identification and self-assessment of material
operational risks and related control activities, to enable the bank to respond with measures to eliminate or improve such risks.
- Key Risk Indicators (KRI): KRIs are used for identifying and monitoring risks and tracking operational risk trends.
- Loss data: Woori Bank has built a systemic framework for collecting and managing internal loss data on a bank-wide level under the opera-
tional risk management system. It also receives external loss data from SAS Global Data and the Korea Operational Risk Data Exchange Com-
mittee for scenario analysis and risk identification.
- Scenario analysis: Operating risks characteristically lack accumulated loss data, making it difficult to take a statistical approach. To measure
such operational risks, we forecast potential loss amounts and the annual frequency of operational risk events based on diverse information
sources such as internal data, external data, and the opinions of our experts working at each department and branch.
- Business Continuity Plan (BCP): Woori Bank has a set of business continuity plans in place for its organizational structure, risk assessment,
business impact analysis, an alternate location for continued business operations, and drills so that it can restore and continue core business
operations in the event of cessation of operations due to unexpected factors like disasters and calamities.
② Operational Risk Measurement
While Woori Bank applies an advanced method of measuring operational risk capital levels, its consolidated subsidiaries take a basic indicator
approach for measurement.
- The basic indicator approach sets 15 percent of the Bank’s total income as operational risk capital.
- The advanced measurement approach takes a 99.9 percentile value of annual total loss distribution induced from the integrated loss distri-
bution 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 added a back-office ‘support’ sector that is a common bank-wide function, setting a 9X7 matrix as the measur-
ing unit for operational risk capital. We calculate the operational risk capital in consideration of all four basic factors (internal data, external
data, scenarios, business environment, and internal control factors).
- Woori Bank does not rely on insurance to mitigate its operational risk capital.
4) Market Risk
(A) Definition
Market risks refer to potential losses that can 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 volatility
related to events that have an impact on all markets, such as interest rates, stock prices, and exchange rates. Individual risks are losses from
price volatility related to individual events by the issuer of bonds, stocks, and other securities.
(B) Market Risk Management
Market risk management refers to the entire process of identifying the sources of risks by risk factor on the trading sector, measuring the scale
of market risks, and assessing the adequacy of the scale in order to make decisions to avert, take or mitigate risks.
We use both a standard approach and an internal model to measure market risks. The standard approach is used for calculating individual risks of
market risk capital charge, while the internal model is for calculating the general market risks of capital charge and for managing internal risks.
WOORI BANKANNUAL REPORT 2017 071
Relying on an internal model approved by the FSS, Woori Bank uses the historical simulation method at a 99 percent confidence level, once
every 10 days, to measure Value at Risk (VaR) and calculate the market risk capital charge to compute the BIS ratio. For internal control pur-
poses, we control daily limits by measuring VaR at 99 percent confidence level per day. Model validation is carried out through daily back-test-
ing 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 bor-
rowings or a global financial crisis.
Market risk limits, including VaR limits, loss limits and risk capital limits, are managed by business groups, departments or teams, while the
Risk Management Committee sets the risk type and unit annually. Limits for subordinate units, excluding the derivatives books, are set by posi-
tion-related departments within given limits. Compliance with limits is monitored by the Risk Management Department independently from
working-level departments, and the monitoring reports are submitted 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, a goal that can be
achieved by the effective management of a liquidity crunch due to the disparity in the maturity of assets and liabilities or unexpected outflow
of funds. Therefore, derivative products that involve off-balance account cash flow, 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 cash flow statements by time group (remaining maturities or
contract periods), grouping assets and liabilities according to a different ALM chart of accounts. Based on the outcomes, we maintain the gap
ratios within predetermined target ratios (limits).
Our daily ALM system allows business groups to look up maturity classification reports while providing daily liquidity ratios for identifying
liquidity risk management indicators and status at related departments.
② Actions in Response to Basel III
We use the Basel III liquidity standards management system to calculate and control the liquidity coverage ratio (LCR) and net stable funding
ratio (NSFR) on a daily or monthly basis. We provide relevant information according to the disclosure standards imposed by the Basel Commit-
tee on Banking Supervision (BCBS).
③ Contingency Planning & Implementation
To effectively respond to capital outflow and funding risks arising from abrupt and unforeseeable changes in market environments, we have
prepared bank-wide contingency plans to conduct regular monitoring of various checkpoints related to liquidity risks on a daily or weekly basis.
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WOORI BANKANNUAL REPORT 2017 072
INDePeNDeNT aUDITORS’ RePORT
Deloitte Anjin LLC
9F., One IFC,
10, Gukjegeumyung-ro,
Youngdeungpo-gu, Seoul
07326, Korea
Tel: +82 (2) 6676 1000
Fax: +82 (2) 6674 2114
www.deloitteanjin.co.kr
INDEPENDENT AUDITORS’ REPORT
English Translation of a Report Originally Issued in Korean on March 14, 2018
To the Shareholders and the Board of Directors of Woori Bank
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated financial statements of Woori Bank and subsidiaries
(the “Group”). The financial statements consist of the consolidated statements of financial position as
of December 31, 2017 and the consolidated statements of comprehensive income for the years ended
December 31, 2017 and 2016, consolidated statements of changes in shareholders’ equity and
consolidated statements of cash flows, all expressed in Korean Won, for the years ended December 31,
2017 and 2016, respectively, and a summary of significant accounting policies and other explanatory
information.
Management’s Responsibility for the Consolidated Financial Statements
The Group’s management is responsible for the preparation and fair presentation of the accompanying
consolidated financial statements in accordance with Korean International Financial Reporting
Standards (“K-IFRS”) and for such internal control as management determines is necessary to enable
the preparation of consolidated financial statements that are free from material misstatement, whether
due to fraud or error.
Independent Auditors’ Responsibility
Our responsibility is to express an audit opinion on these consolidated financial statements based on our
audits. We conducted our audits in accordance with Korean Standards on Auditing (“KSAs”). Those
standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on the auditors’ judgment,
including the assessment of the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
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Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the
financial position of the Group as of December 31, 2017 and 2016, respectively, and its financial
performance and its cash flows for the years then ended in accordance with K-IFRS.
March 14, 2018
Notice to Readers
This report is effective as of March 14, 2018, the auditors’ report date. Certain subsequent events or
circumstances may have occurred between the auditors’ report date and the time the auditors’ report is
read. Such events or circumstances could significantly affect the consolidated financial statements and
may result in modifications to the auditors’ report.
WOORI BANKANNUAL REPORT 2017
074
WOORI BaNK aND SUBSIDIaRIeS
CONSOLIDaTeD STaTemeNTS OF FINaNCIaL POSITION
AS OF DECEMBER 31, 2017 AND 2016
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2017 AND 2016
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 4,6,11,12 and 22)
Debentures (Notes 4,6,11 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,
2017
2016
(Korean Won in millions)
6,908,286
7,591,324
5,843,077
15,352,950
16,749,296
267,106,204
417,051
371,301
2,477,545
518,599
48,624
4,722
280,130
59,272
-
158,404
316,295,461
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
3,427,909
234,695,084
14,784,706
27,869,651
410,470
43,264
232,600
22,681
67,754
13,892,461
283,981
295,730,561
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
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075
WOORI BaNK aND SUBSIDIaRIeS
CONSOLIDaTeD STaTemeNTS OF FINaNCIaL POSITION
AS OF DECEMBER 31, 2017 AND 2016 (CONTINUED)
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2017 AND 2016 (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, 2017 and 2016
is 2,438,191 million Won and 2,255,252 million Won, respectively
Regulatory reserve for credit loss to be reserved as of December 31,
2017 and 2016 is 140,266 million Won and 182,939 million Won,
respectively
Planned provision of regulatory reserve for credit loss as of
December 31, 2017 and 2016 is 140,266 million Won and 182,939
million Won, respectively)
Non-controlling interests
Total equity
Total liabilities and equity
See accompanying notes
December 31,
December 31,
2017
2016
(Korean Won in millions)
20,365,892
3,381,392
3,017,888
285,880
(1,939,274)
20,386,160
3,381,392
3,574,896
286,331
(1,468,025)
15,620,006
199,008
20,564,900
316,295,461
14,611,566
159,793
20,545,953
310,682,727
075075
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
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Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017
076076
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
076
WOORI BaNK aND SUBSIDIaRIeS
CONSOLIDaTeD STaTemeNTS OF COmPReheNSIVe INCOme
FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016
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
2017
2016
(Korean Won in millions,
except for per share data)
8,550,687
(3,330,037)
5,220,650
8,512,312
(3,492,768)
5,019,544
2,069,198
(998,732)
1,070,466
124,992
(104,827)
192,708
(785,133)
(3,530,801)
(31,313)
2,156,742
(101,514)
(105,722)
(207,236)
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)
1,949,506
1,553,389
(419,418)
(275,856)
(Net income after the provision of regulatory reserve for credit loss for
the years ended December 31, 2017 and 2016 are 1,389,822 million
Won and 1,094,594 million Won, respectively) (Note 32)
1,530,088
1,277,533
Remeasurement of the net defined benefit liability
Items that will not be reclassified to profit or loss
Gain (loss) on available-for-sale financial assets
Share of other comprehensive gain (loss) of joint ventures and associates
Gain (loss) on foreign currency translation of foreign operations
Gain on valuation of cash flow hedge
Equity related to non-current assets held for sale
Items that may be reclassified to profit or loss
Other comprehensive income , net of tax
10,497
10,497
(84,498)
612
(208,329)
777
4,145
(287,293)
(276,796)
34,162
34,162
12,586
(7,937)
28,712
10,371
-
43,732
77,894
Total comprehensive income
1,253,292
1,355,427
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
Net income per share (Note 43)
1,512,148
17,940
1,249,057
4,235
1,261,266
16,267
1,332,614
22,813
Basic and diluted earnings from operations per share
(In Korean Won)
1,999
1,567
See accompanying notes
WOORI BANKANNUAL REPORT 2017
077
WOORI BaNK aND SUBSIDIaRIeS
CONSOLIDaTeD STaTemeNTS OF ChaNGeS IN eQUITy
FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016
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
Redemption of hybrid
January 1, 2017
Net income
Dividends
Subsidiary capital increase
Gain(loss) on valuation of
available-for-sale financial
assets
Share of other comprehensive
gain of joint ventures and
associates
Loss on foreign currencies
translation of foreign
operations
Gain on valuation of cash flow
hedge
Remeasurement of the net
defined benefit liability
Equity related to non-current
assets held for sale
Dividends on hybrid securities
Issuance of hybrid securities
Redemption of hybrid
Capital
stock
Hybrid
securities
Capital
surplus
Other
Equity
Retained
earnings
Controlling
interests
(Korean Won in millions)
3,381,392 3,334,002
-
-
-
-
294,259 (1,547,303) 13,726,122 19,188,472
- 1,261,266 1,261,266
(168,317)
-
(168,317)
-
-
Non-
controlling
interests
Total
equity
121,443 19,309,915
16,267 1,277,533
(169,603)
(1,286)
-
(7,928)
7,930
-
-
-
12,296
-
-
-
2
-
2
-
16,823
16,823
12,296
290
12,586
-
(7,937)
-
(7,937)
-
(7,937)
-
-
-
-
-
22,436
34,182
-
-
22,436
6,276
28,712
34,182
(20)
34,162
10,371
-
-
-
(206,515)
-
10,371
(206,515)
549,904
-
-
-
10,371
(206,515)
549,904
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
549,904
securities
December 31, 2016
(309,010)
3,381,392 3,574,896
-
-
(310,000)
286,331 (1,468,025) 14,611,566 20,386,160
(990)
-
3,381,392 3,574,896
-
-
-
-
-
-
286,331 (1,468,025) 14,611,566 20,386,160
1,512,148 1,512,148
(336,636)
(451)
(336,636)
-
-
-
(451)
-
-
-
-
(310,000)
159,793 20,545,953
159,793 20,545,953
17,940 1,530,088
(338,190)
(1,554)
36,083
36,534
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
559,565
-
(85,051)
-
(85,051)
553
(84,498)
-
612
-
612
-
612
-
(194,347)
-
(194,347)
(13,982)
(208,329)
-
-
-
-
-
777
10,773
4,145
-
-
-
-
777
-
777
10,773
(276)
10,497
-
(167,072)
-
4,145
(167,072)
559,565
-
-
-
4,145
(167,072)
559,565
securities
December 31, 2017
- (1,116,573)
3,381,392 3,017,888
-
- (1,324,731)
285,880 (1,939,274) 15,620,006 20,365,892
(208,158)
- (1,324,731)
199,008 20,564,900
See accompanying notes
077077
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Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017
078
WOORI BaNK aND SUBSIDIaRIeS
CONSOLIDaTeD STaTemeNTS OF CaSh FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016
Cash flows from operating activities:
Net income
Adjustment to net income:
Income tax expense
Interest income
Interest expense
Dividend income
Additions of expenses not involving cash outflows:
Impairment losses due to credit loss
Loss on valuation of financial instruments at fair value through profit or loss
Loss on available-for-sale financial assets
Loss on investments in joint ventures and associates
Loss on transaction and valuation of derivatives instruments (hedging)
Loss on hedged items (fair value hedge)
Provisions
Retirement benefits
Depreciation and amortization
Loss on disposal of investments in joint ventures and associates
Loss on disposal of premises and equipment and other assets
Impairment loss on premises and equipment and other assets
Deduction of incomes not involving cash inflows:
Gain on valuation of financial instruments at fair value through profit or loss
Gain on available-for-sale financial assets
Gain on valuation of investments in joint ventures and associates
Gain on transaction and valuation of derivatives 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
(Continued)
2016
2017
(Korean Won in millions)
1,530,088
1,277,533
419,418
(8,550,687)
3,330,037
(124,992)
(4,926,224)
275,856
(8,512,312)
3,492,768
(184,510)
(4,928,198)
785,133
15,267
-
185,020
109,569
-
107,028
142,902
235,795
38,713
9,994
390
1,629,811
-
192,708
83,506
122
53,532
2,567
39,932
5,028
666
378,061
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
(583,068)
(9,647,563)
35,953
13,634,873
(122,711)
(46,789)
(7,966,786)
(27,550)
(4,723,641)
(99,581)
(14,433,390)
219,323
11,878,628
34,376
(261,097)
5,158,055
(6,163)
2,490,151
078078
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
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Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017
079
WOORI BaNK aND SUBSIDIaRIeS
CONSOLIDaTeD STaTemeNTS OF CaSh FLOWS
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (CONTINUED)
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
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 subsidiaries
Disposal of investment properties
Disposal of premises and equipment
Disposal of intangible assets
Disposal of assets held for sale
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 inflows from financing activities:
Increase in borrowings
Issuance of debentures
Issuance of hybrid securities
Capital increase of subsidiaries
Cash outflows from financing activities:
Decrease in borrowings
Repayment of debentures
Payment of dividends
Dividends paid on hybrid securities
Redemption of hybrid securities
Dividends paid on non-controlling interests
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
2017
2016
(Korean Won in millions)
8,570,715
(3,404,608)
127,343
(404,428)
(1,979,005)
8,511,349
(3,593,358)
184,674
(251,627)
4,905,285
24,912,752
8,587,092
70,180
203
418
7,428
1,188
24,808
33,604,069
-
19,674,346
11,521,065
143,161
9,872
162,245
195,929
13,742
31,720,360
1,883,709
9,057,999
18,438,221
559,565
35,841
28,091,626
12,692,883
13,620,520
336,636
177,730
1,323,400
1,554
28,152,723
(61,097)
(156,393)
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
Cash and cash equivalents, beginning of the period
7,591,324
6,644,055
Effects of exchange rate changes on cash and cash equivalents
(526,645)
(65,465)
Cash and cash equivalents, end of the period
6,908,286
7,591,324
See accompanying notes
079079
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Financial Market Business
Investment Banking
Digital Banking
Risk Management
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Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017
080
WOORI BaNK aND SUBSIDIaRIeS
NOTeS TO CONSOLIDaTeD FINaNCIaL STaTemeNTS
WOORI BANK AND SUBSIDIARIES
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016
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 Act, trust business
and foreign exchange business under the Financial Investment Services and Capital Market Act.
Previously, Woori Finance Holdings Co., Ltd., the former holding company of Woori Financial Group,
established on March 27, 2001 held a 100% ownership of the Bank. Effective November 1, 2014, Woori Finance
Holdings Co., Ltd. completed its merger (the “Merger”) with and into the 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, 2017, the common stock of the Bank amounts to 3,381,392 million Korean 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”. In addition to the sale, during the year ended December 31,
2017, KDIC sold additional 33 million shares. As of December 31, 2017 and 2016, KDIC held 125 million
shares and 158 million shares (18.43% and 23.37% 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 Woori Finance Holdings Co., Ltd. was merged into the Bank, the
Bank, which is the existing company, succeeded such rights and obligations as a listed company on the Korea
Exchange and 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 876 branches and
offices in Korea, and 23 branches and offices overseas as of December 31, 2017.
080080
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Woori Smile Microcredit
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Independent Auditors'
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Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
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119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
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WOORI BANKANNUAL REPORT 2017
081081
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Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
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Independent Auditors'
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Organizational Chart
Global Network
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Woori Bank overview
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119 Years of History
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Digital Strategy
A Trust-worthy Partner
081
- 2 -
(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.
Woori Finance Research Institute Co., Ltd.
Woori Card Co., Ltd.
Woori Investment Bank Co., Ltd. (*1)
Woori Credit Information Co., Ltd.
Woori America Bank
Woori Global Markets Asia Limited
Woori Bank China Limited
AO Woori Bank
PT Bank Woori Saudara Indonesia 1906
Tbk(*1)
Banco Woori Bank do Brasil S.A.
Korea BTL Infrastructure Fund
Woori Fund Service Co., Ltd.
Woori Finance Cambodia PLC.
Woori Finance Myanmar Co., Ltd.
Wealth Development Bank
Woori Bank Vietnam Limited
Kumho Trust First Co., Ltd. (*2)
Asiana Saigon Inc. (*2)
An-Dong Raja First Co., Ltd. (*6)
Consus Eighth Co., LLC (*2)
KAMCO Value Recreation First
Securitization Specialty Co., Ltd. (*2)
Hermes STX Co., Ltd. (*2)
BWL First Co., LLC (*2)
Woori Poongsan Co., Ltd. (*6)
Deogi Dream Fourth Co., Ltd. (*2)
Jeonju Iwon Ltd. (*2)
Wonju I one Inc. (*2)
Heitz Third Co., Ltd. (*2)
Woorihansoop 1st Co., Ltd. (*2)
Electric Cable First Co., Ltd (*2)
Woori International First Co., Ltd. (*2)
Woori HJ First Co., Ltd. (*2)
Woori WEBST 1st Co., Ltd. (*2)
HNLD 1st Inc.(*2)
Wibihansoop 1st Co., Ltd. (*2)
HNLD 1st Inc.(*2)
Uri QS 1st Co., Ltd (*2)
Uri Display 1st Co., Ltd.(*2)
Tiger Eyes 2nd Co., Ltd.(*2)
Woori Serveone 1st Co., Ltd. (*2)
HeungkukWoori Tech Company Private
Placement Investment Trust No.1 and 5
beneficiary certificates (*3)
Principle Guaranteed Trust (*4)
Principle and Interest Guaranteed Trust (*4)
Woori Bank and Woori Private Equity Asset
System software development
& maintenance
Finance
Other service business
Finance
Other credit finance business
Credit information
Finance
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
Asset securitization
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
Securities investment and
others
Trust
〃
Management Co., Ltd.:
Woori Private Equity Fund (*5)
Woori Private Equity Fund:
Woori EL Co., Ltd. (*5)
Other financial business
Other financial business
Percentage of ownership
(%)
December
31, 2017
December
31, 2016
Location
Financial
statements
as of
(2017)
100.0
100.0
Korea
December 31
100.0
100.0
100.0
59.8
100.0
100.0
100.0
100.0
100.0
79.9
100.0
99.9
100.0
100.0
100.0
51.0
100.0
0.0
0.0
-
0.0
15.0
0.0
0.0
-
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
-
0.0
0.0
-
-
100.0
100.0
100.0
58.2
100.0
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
15.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
-
-
-
-
-
-
-
-
December 31
Korea
December 31
Korea
December 31
Korea
December 31
Korea
December 31
Korea
December 31
U.S.A.
Hong Kong December 31
China
December 31
December 31
Russia
December 31
Indonesia
Brazil
December 31
Korea
December 31
Korea
December 31
Cambodia December 31
December 31
Myanmar
Philippines December 31
December 31
Vietnam
Korea
December 31
Korea
December 31
Korea
-
Korea
December 31
Korea
Korea
Korea
Korea
Korea
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
December 31
December 31
December 31
December 31
-
0.0
0.0
Korea
Korea
Korea
December 31
December 31
December 31
31.9
Korea
100.0
Korea
-
-
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- 3 -
Main business
Asset securitization
Asset securitization
〃
〃
Percentage of ownership
(%)
December
31, 2017
December
31, 2016
Location
Financial
statements
as of
(2017)
5.0
5.0
5.0
5.0
5.0
Korea
December 31
- Korea
December 31
- Korea
December 31
- Korea
December 31
Finance
100.0
100.0 Myanmar
December 31
Asset securitization
〃
0.5
0.5
- Korea
December 31
- Korea
December 31
Woori Investment Bank:
Subsidiaries
Dongwoo First Securitization Specialty Co.,
Ltd. (*2)
Seari First Securitization Specialty Co., Ltd.
(*2)
Namjong 1st Securitization Specialty Co.,
Ltd. (*2)
Bukgeum First Securitization Specialty Co.,
Ltd. (*2)
Woori Card Co., Ltd.:
TUTU Finance-WCI Myanmar Co., Ltd.
Woori Card one of 2017-1 Securitization
Specialty Co., Ltd. (*2)
Woori Card one of 2017-2 Securitization
Specialty Co., Ltd. (*2)
(*1) The ownership ratio has been increased, attributed to unequal capital increase of the subsidiary.
(*2) The entity was a structured entity for the purpose of asset securitization and was in scope for consolidation.
Although the Group is 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.
(*3) 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) had the ability to use its power to affect its returns.
(*4) 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) 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.
(*5) Due to liquidation of Woori Private Equity Asset Management Co., Ltd., the entity was excluded from
subsidiaries during the year ended December 31, 2017.
(*6) Due to liquidation for the years ended as of December 31, 2017, the entity was excluded from the scope for
consolidation.
(3) As of December 31, 2017 and 2016, 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 (*)
Hana Walmart Real Estate Investment Trust 41-1 (*)
IGIS Global Private Placement Real Estate Fund No. 148-1 (*)
IGIS Global Private Placement Real Estate Fund No. 148-2 (*)
As of December 31, 2017
Location
Korea
Korea
Korea
Korea
Korea
Korea
Main
Business
Securities Investment
Securities Investment
Securities Investment
Securities Investment
Securities Investment
Securities Investment
Percentage of
ownership (%)
60.0
59.7
88.9
90.1
75.0
75.0
(*) 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.
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) (*)
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
(*) 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.
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- 4 -
(4) The summarized financial information before the elimination of intercompany transactions of the
subsidiaries whose financial information was prepared under K-IFRS for the Group’s consolidated financial
statements is as follows (Unit: Korean Won in millions):
Woori FIS Co., Ltd.
Woori Private Equity Asset Management
Co., Ltd.
Woori Finance Research Institute Co., Ltd.
Woori Card Co., Ltd.
Woori Investment Bank Co., Ltd.
Woori Credit Information Co., Ltd.
Woori America Bank
Woori Global Markets Asia Limited
Woori Bank (China) Limited
AO Woori Bank
PT Bank Woori Saudara Indonesia 1906
Tbk
Banco Woori Bank do Brasil S.A.
Korea BTL Infrastructure Fund
Woori Fund Service Co., Ltd.
Woori Finance Cambodia PLC.
Woori Finance Myanmar Co., Ltd.
Wealth Development Bank
Woori Bank Vietnam Limited
Money trust under the FISCM Act (*)
Structured entity for the securitization of
financial assets
Structured entity for the investments in
securities
As of and for the year ended December 31, 2017
Assets
Liabilities
103,932
71,386
42,894
3,790
8,605,993
1,880,157
33,298
1,954,301
290,226
4,960,637
201,704
2,230,617
213,889
786,480
12,653
51,304
18,236
191,049
775,758
1,560,672
2,670
350
6,973,705
1,588,610
6,175
1,679,248
178,343
4,458,683
149,101
1,745,171
181,544
301
1,242
32,873
5,307
156,808
632,160
1,530,760
Operating
revenue
252,460
7,257
4,733
1,771,157
183,376
31,580
81,337
11,345
388,913
15,656
192,485
20,455
30,240
9,021
5,895
2,506
13,632
29,698
44,344
Net income
(loss)
attributable to
owners
Comprehensive
income (loss)
attributable to
owners
1,940
(2,963)
(4,114)
83
101,214
20,023
861
11,869
1,922
13,809
4,748
38,488
1,843
26,390
1,398
983
791
1,323
2,436
582
(4,074)
64
107,321
20,210
752
(16,833)
(12,544)
(15,252)
1,217
(18,689)
(2,840)
26,390
1,398
(473)
15
(1,093)
(15,347)
582
867,583
1,275,719
22,730
1,179
(2,800)
34,939
76
377
(475)
(38,592)
(*) FISCM Act: Financial Investment Services and Capital Markets Act
As of and for the year ended December 31, 2016
Assets
Liabilities
Net income
(loss)
attributable to
owners
Comprehensive
income (loss)
attributable to
owners
Operating
revenue
Woori FIS Co., Ltd.
Woori Private Equity Asset Management
Co., Ltd.
Woori Finance Research Institute Co.,
Ltd.
Woori Card Co., Ltd.
Woori Investment Bank Co., Ltd.
Woori Credit Information
Woori America Bank
Woori Global Markets Asia Limited
Woori Bank (China) Limited
AO Woori Bank
PT Bank Woori Saudara Indonesia 1906
Tbk
Banco Woori Bank do Brasil S.A.
Korea BTL Infrastructure Fund
Woori Fund Service Co., Ltd.
Woori Finance Cambodia PLC.
Woori Finance Myanmar Co., Ltd.
Wealth Development Bank
Woori Bank Vietnam Limited
Money trust under the FISCM Act (*)
141,329
105,821
244,783
1,048
97,338
53,244
2,154
312
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
1,525,145
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
1,495,815
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
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
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
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084
- 5 -
As of and for the year ended December 31, 2016
Assets
Liabilities
Net income
(loss)
attributable to
owners
Comprehensive
income (loss)
attributable to
owners
Operating
revenue
Structured entity for the securitization of
financial assets
Structured entity for the investments in
487,431
895,824
29,480
6,912
securities
4,397,163
1,898,977
137,896
56,605
7,138
61,535
(*) FISCM Act: Financial Investment Services and Capital Markets Act
(5) The financial support that the Group provides to consolidated structured entities is as follows:
- Structured entity for the securitization of financial assets
The structured entity is established for the purpose of securitization of project financing loans, corporate
bonds, and other financial assets. The Group is involved with the structured entity through providing
with credit facility over asset-backed commercial papers issued by the entity, originating loans directly
to the structured entity, or purchasing 100% of the subordinated debts issued by the structured entity.
- Structured entity for the investments 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 Financial Investment Services and Capital Markets Act
The Group provides with financial guarantee of principal and interest or principal only to some of its
trust products. Due to the financial guarantees, the Group may be obliged to supplement when the
principal and interest or principal of the trust product sold is short of the guaranteed amount depending
on the result of investment performance of the trust product.
(6) The details of the limitations with regard to the transfer of assets or the redemption of liabilities within the
Group are provided below.
Some subsidiaries are regulated by the rules of the jurisdictions, in which they were incorporated, with
regard to funding or management of deposits. Also, there is the limitation that they must have pre-approval
from their regulators in case of remittance of earnings to the 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 income 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.
WOORI BANKANNUAL REPORT 2017
085
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- 6 -
Structured finance includes investments in project financing on real estates, social overhead capital
(“SOC”), infrastructure and shipping finance. They are formed as special purpose entity by funding through
equity investments and loans from various investors. Investment decisions are made by the Group based on
business outlook of such projects. In relation to such investments, the Group recognizes interest income 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 December 31, 2017 and 2016 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 held for trading
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
Credit facilities
Loss recognized on unconsolidated structured entities
Total asset of the unconsolidated structured entities
Assets recognized in the consolidated financial statements related
to the unconsolidated structured entities
Loans and receivables
Financial assets held for trading
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
December 31, 2017
Asset
securitization
vehicle
7,295,601
Structured
finance
40,172,830
Investment
Funds
13,641,135
3,215,159
43,180
-
902,390
2,269,451
-
138
1,433
575
858
4,032,531
3,215,159
817,372
837
2,314,043
1,969,760
233,428
106,819
-
-
4,036
1,506
968
538
2,918,448
2,314,043
604,405
3,939
1,138,523
-
10,160
904,774
-
223,589
-
-
-
-
1,138,523
1,138,523
-
5,993
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
2,790,215
2,414,044
254,150
115,843
-
-
6,178
1,224
362
862
3,802,210
2,790,215
-
1,749,494
-
-
1,664,865
-
84,629
-
-
-
-
1,749,494
1,749,494
-
WOORI BANKANNUAL REPORT 2017
086
- 7 -
Credit facilities
Other commitments
Loss recognized on unconsolidated structured entities
December 31, 2016
Asset
securitization
vehicle
834,083
40,000
6,353
Structured
finance
970,195
41,800
71,185
Investment
Funds
-
-
683
(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, 2017
119,111
64,877
16,778
December 31, 2016
73,986
70,249
16,983
2) Net income attributable to non-controlling interests
Woori Investment Bank
PT Bank Woori Saudara Indonesia 1906 Tbk
Wealth Development Bank
8,370
8,882
648
9,990
6,383
611
For the year ended
December 31, 2017
For the year ended
December 31, 2016
3) Dividends to non-controlling interests
PT Bank Woori Saudara Indonesia 1906 Tbk
1,513
1,242
For the year ended
December 31, 2017
For the year ended
December 31, 2016
2. BASIS OF PREPARATION AND SIGNIFICANT 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 December 31, 2017 are described below, and the significant accounting policies
are the same as the accounting policies applied for the preparation of the previous year’s consolidated financial
statements, except the impacts from the adoptions of accounting standards or interpretations which are explained
below.
The Group’s consolidated financial statements have been prepared based on the historical cost method except for
specific non-current assets and certain financial assets or liabilities reported at fair value. The historical cost is
generally measured by fair value of acquired assets.
The consolidated financial statements of the Group were approved by the board of directors on March 2, 2018.
086086
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Ethical Management
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119 Years of History
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WOORI BANKANNUAL REPORT 2017
087
- 8 -
1) The Group has newly adopted the following amendment to K-IFRS that affected the Group’s accounting
policies.
Amendments to K-IFRS 1007 – Statement of Cash Flows
The amendments require an entity to provide disclosures that enable users of financial statements to evaluate
changes in liabilities arising from financing activities, including both cash and non-cash changes. Additional
disclosure required related to the first time application of these amendments in the current year are in note 6.
Consistent with the transition provisions of the amendments, the Group has not disclosed comparative
information for the prior period. Apart from the additional disclosure in note 6, the application of these
amendments has no material impact on the disclosures or the amounts recognized in the Group’s
consolidated financial statements.
Amendments to K-IFRS 1012 – Income Taxes
The amendments clarify that in evaluating the deferred tax assets arising from deductible temporary
difference of debt instruments measured at fair value, the carrying amount of an asset does not limit the
estimation of probable future taxable profits. The application of these amendments has no material impact on
the disclosures or the amounts recognized in the Group’s consolidated financial statements.
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:
Enactments to K-IFRS 1109 – Financial Instruments
The standards include the requirements for the classification and measurement of financial instruments based
on their 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, broadened types of instruments that qualify as hedging
instruments, the types of risk components of non-financial items that are eligible for hedge accounting and
the change in the hedge effectiveness test. This standards supersedes K-IFRS 1039 - Financial Instruments:
Recognition and Measurement, and will be applied for annual periods beginning on or after January 1, 2018.
In principle, K-IFRS 1109 must be applied retrospectively. However, there are certain exemptions to the
application of retroactive approach such as presenting comparative information on classification,
measurement and impairment of financial instruments. In addition, K-IFRS 1109 are applied prospectively
for hedge accounting with exceptions such as accounting for the time value of options.
The Group has completed the implementation of the design of the internal controls and/or financial reporting
processes related to the presentation of financial instruments in order to adopt K-IFRS 1109. The Group has
completed a financial impact analysis on the 2017 financial statements based on available information as of
year-end in order to determine the impact of adopting K-IFRS 1109 for the first time. The expected financial
impact of each key issue on the financial statement, is as follows.
a) Classification and Measurement of Financial Instruments
When K-IFRS 1109 is adopted, all recognized financial assets that in scope are subsequently measured at
either amortized cost, fair value through other comprehensive income (FVTOCI), or fair value through profit
or loss (FVTPL) as shown below, based on the business model for managing financial assets and based on
the nature of contractual cash flows arising from the financial assets. Also, when hybrid contracts contain
financial asset as its host contract, the embedded derivative will not be bifurcated as the whole hybrid
contract would be classified as a financial asset.
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- 9 -
Nature of
the contractual cash flow
Principal and Interest only Amortized Cost(*1)
Collection of the
contractual cashflow
Business Model
Collection of the contractual
cashflow and sale of asset
Sale of asset, others
FVTOCI(*1)
FVTPL
Other than the above
FVTPL(*2)
(*1) An irrevocable election is available to designate a financial asset to be classified as FVTPL, for the
purpose of eliminating or reducing accounting discrepancies.
(*2) For equity securities held for purposes other than short-term trading, an irrevocable election is
available to designate them as FVTOCI financial assets.
As the requirements to classify a financial asset as either amortized cost or FVTPL are more stringent in K-
IFRS 1109 than in K-IFRS 1039, the variability of net income may increase as the amount of FVTPL
financial assets is increased due to the adoption of K-IFRS 1109.
As of year-end the Group currently holds loans and receivables amounting to 267,106,204 million Won,
held-to-maturity financial assets amounting to 16,749,296 million Won, available-for-sale financial assets
amounting to 15,352,950 million Won, and FVTPL financial assets amounting to 2,727,303 million Won.
According to K-IFRS 1109, a financial asset may be measured at amortized cost only when its cashflows are
solely principal and interest on specified dates on the contract and when the purpose of holding such asset is
only to receive the contractual cashflows. As of year-end the Group holds loans and receivables amounting to
267,106,204 million Won and held-to-maturity financial assets amounting to 16,749,296 million Won which
are measured at amortized cost. This amount includes 51,653 million Won of hybrid contracts in which the
host contract, after separating the embedded derivatives, is a debt security.
The estimated impact on the classification and measurement of Group’s financial assets (except derivatives)
as of year-end is presented as follows. The following information is constructed from the accounting system
for financial instruments built for the purpose of adopting K-IFRS 1109.
Classification
per K-IFRS 1039
Classification
per K-IFRS 1109
Amount per
K-IFRS 1039
Amount per
K-IFRS 1109
(Unit : Korean Won in millions)
Accounts
Deposits
Deposits
Debt securities
Debt securities
Debt securities
Debt securities
Debt securities
Amortized cost
Loans and receivables
Financial assets at FVTPL FVTPL
Financial assets at FVTPL FVTPL
FVTPL
AFS financial assets
FVTOCI
AFS financial assets
AFS financial assets
Amortized cost
Held-to-maturity financial
assets
Amortized cost
Equity securities Financial assets at FVTPL FVTPL
FVTPL
Equity securities AFS financial assets
FVTOCI
Equity securities AFS financial assets
FVTPL
Loans
Amortized cost
Loans
Other financial
Loans and receivables
Loans and receivables
assets
Loans and receivables
Amortized cost
Total financial assets except derivatives
8,870,835
25,972
2,654,027
46,855
12,874,209
308,181
8,870,835
25,972
2,654,027
46,855
12,874,209
322,300
16,749,296
47,304
1,273,498
850,207
279,032
253,014,491
16,749,296
47,304
1,274,716
850,207
280,001
253,014,491
6,772,088
303,765,995
6,772,088
303,782,301
WOORI BANKANNUAL REPORT 2017
089
- 10 -
Among the financial assets measured at amortized cost, loans and receivables and held-to-maturity financial
assets amounting to 279,032 million Won and AFS financial assets amounting to 1,320,353 million Won
would be reclassified to FVTPL financial assets as a result of adopting K-IFRS 1109.
b) Classification and Measurement of Financial Liabilities
According to the K-IFRS 1109, the amount of changes in the fair value of financial liabilities measured at
FVTPL due to changes in credit risk is presented as part of other comprehensive income, and such amount is
not recycled subsequently in profit or loss. However, when recognizing the fair value changes in other
comprehensive income causes or magnifies accounting discrepancies, the amount is recognized in profit or
loss instead.
As of year-end the Group holds financial liabilities amounting to 295,386,968 million Won, and out of this
amount 251,796 million Won has been designated as FVTPL financial liabilities. In relation to these financial
liabilities, the increase in fair value amounting to 31,275 million Won has been recognized as losses in the
current period.
The results of the analysis conducted to determine the financial impact of applying K-IFRS 1109 on FVTPL
financial liabilities as of year-end show that the cumulative changes in fair value of FVTPL financial
liabilities as a result of changes in credit risk amounted to 133 million Won.
c) Impairment: Financial assets and Contract assets
K-IFRS 1109 requires the recognition of allowance for expected credit losses for debt instruments, lease
receivables, contract assets, loan commitments and financial guarantee contracts measured at either
amortized cost or FVTPL.
The allowance to be recognized under K-IFRS 1109 is the amount of expected 12-month credit loss or the
expected lifetime credit loss, according to the 3 stages of credit risk deterioration since initial recognition as
shown below.
Stage 1
Credit risk has not significantly
increased since initial
recognition(*)
Expected 12-month credit losses:
Expected credit losses due to
possible defaults on financial
instruments within 12-month
period from the year-end.
Allowance
for expected
credit losses
Stage 2
Credit risk has
significantly
increased since initial
recognition
Stage 3
Credit has been
impaired
Expected lifetime credit losses:
Expected credit losses from all possible
defaults during the expected lifetime of the
financial instruments.
(*) Credit risk may be considered to not have been significantly increased when credit risk is low at year-end.
Meanwhile, for financial assets already impaired at initial recognition, the allowance for expected credit
losses per K-IFRS 1109 is the amount of cumulative changes in the expected lifetime credit losses after its
initial recognition.
As of year-end the Group holds loans and receivables amounting to 267,106,204 million Won in accordance
with K-IFRS 1039. In relation to this am ount, the Group has recognized allowance for credit losses
amounting to 1,830,242 million Won.
The expected impact on the allowance for credit losses as of year-end using the Group’s system for
allowances is as follows.
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- 11 -
Allowance for credit losses
per K-IFRS 1039(A)
Allowance for credit losses
per K-IFRS 1109 (B)
Increases(B-A)
(Unit : Korean Won in millions)
2,458
-
-
-
1,827,785
183,247
66,115
2,079,605
3,092
9,331
4,253
5,078
2,075,752
192,376
104,887
2,385,438
634
9,331
4,253
5,078
247,967
9,129
38,772
305,833
Accounts
Deposits
Debt securities
AFS debt
securities
Held-to-maturity
debt securities
Loan receivables
and other
financial assets
Guarantees
Loan
commitments
Total
d) Hedge accounting
The requirements for hedge accounting in K-IFRS 1109 has become more lenient as compared to K-IFRS
1039. That is, more financial instruments may now be considered to be a hedged item and/or a hedging
instrument, the quantitative basis for evaluating high hedge effectiveness (80~125%) has been abolished, and
the retroactive assessment requirement has also been abolished. These allow the firms to concentrate on
hedging activities.
There are no significant impacts to the Group’s financial statements related to hedge accounting as a result of
adopting K-IFRS 1109.
Enactments to 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 amendments 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 enactsments are effective for annual periods beginning on
or after 1 January 2018.
Enactments to K-IFRS 1116—Leases
K-IFRS 16 introduces a comprehensive model for the identification of lease arrangements and accountings
treatments for both lessors and lessees. K-IFRS 16 will supersede the current lease guidance including K-
IFRS 1017 Leases and the related interpretations. The enactments are effective for annual periods beginning
on or after 1 January 2019.
K-IFRS 1116 distinguishes leases and service contracts on the basis of whether an identified asset is
controlled by a customer. Distinctions of operating leases and finance leases are removed for lessee
accounting, and is replaced by model where a right-of-use asset and corresponding liability have to be
recognized for all leases by lessees except for short-term leases and leases of low value assets.
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- 12 -
The right-of-use asset is initially measured at cost and subsequently measured at cost (subject to certain
exceptions) less accumulated depreciation and impairment losses, adjusted for any remeasurement of the
lease liability. The lease liability is initially measured at the present value of the lease payments that are not
paid at that date. Subsequently, the lease liability is adjusted for interest and lease payments, as well as the
impact of lease modifications, amongst others. Furthermore, the classification of cash flows will also be
affected as operating lease payments under K-IFRS 1017 are presented as operating cash flows; whereas
under the K-IFRS 1116 model, the lease payments will be split into a principal and an interest portion which
will be presented as financing and operating cash flows respectively.
In contrast to lessee accounting, K-IFRS 1116 substantially carries forward the lessor accounting
requirements in K-IFRS 1017, and continues to require a lessor to classify a lease either as an operating lease
or a finance lease. Furthermore, extensive disclosures are required by K-IFRS 1116.
In contrast, 1) for finance leases where the Group is a lessee and 2) in cases where the Group is a lessor, the
Group do not anticipate that the application of K-IFRS 1116 will have a significant impact on the amounts
recognized in the Group’s consolidated financial statements.
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.
Amendments to K-IFRS 1040—Transfers of Investment Property
The amendments clarify that a transfer to, or from, investment property necessitates an assessment of
whether a property meets, or has ceased to meet, the definition of investment property, supported by
observable evidence that a change in use has occurred. The amendments further clarify that situations other
than the ones listed in K-IFRS 1040 may evidence a change in use, and that a change in use is possible for
properties under construction (i.e. a change in use is not limited to completed properties).
The amendments are effective for annual periods beginning on or after January 1, 2018 with earlier
application permitted. Entities can apply the amendments either retrospectively (if this is possible without the
use of hindsight) or prospectively.
Enactments to K-IFRS 2122—Foreign Currency Transactions and Advance Consideration
The interpretation addresses how to determine the ‘date of transaction’ for the purpose of determining the
exchange rate to use on initial recognition of an asset, expense or income, when consideration for that item
has been paid or received in advance in a foreign currency which resulted in the recognition of a non-
monetary asset or non-monetary liability (e.g. a non-refundable deposit or deferred revenue).
The interpretation specifies that the date of transaction is the date on which the entity initially recognizes the
non-monetary asset on non-monetary liability arising from the payment or receipt of advance consideration.
If there are multiple payments or receipts in advance, the interpretation requires an entity to determine the
date of transaction for each payment or receipt of advance consideration.
The interpretation is effective for annual periods beginning on or after January 1, 2018 with earlier
application permitted. Entities can apply the interpretation either retrospectively or prospectively. Specific
transition provisions apply to prospective application.
WOORI BANKANNUAL REPORT 2017
092
- 13 -
Annual Improvements to K-IFRS 2014-2016 Cycle
The amendments include partial amendments to K-IFRS 1101 ‘First-time Adoption of K-IFRS’ and K-IFRS
1028 ‘Investments in Associates and Joint Ventures.’ Amendments to K-IFRS 1028 provide that an investment
company such as a venture capital investment vehicle may selectively designate each of its investment in
associates and/or joint ventures to be measured at FVTPL, and that such designation must be made at the time
of each investment’s initial recognition. In addition, when non-investment companies apply equity method to
investment in associates and/or joint ventures that are investment companies, these companies may apply the
same fair value measurement used by the said associates to value their own subsidiaries. This accounting
treatment may be selectively applied to each associate. These amendments should be applied retrospectively
and are available for early adoption.
The amendments are effective for annual periods beginning on or after 1 January 2018. The Group is neither a
venture capital investment vehicle nor is adopting K-IFRS for the first time, thus it is expected that the
amendments explained above will not affect the Group’s financial statements. Furthermore, the Group does not
own shares of an associate or a joint venture that are classified as investment companies.
The Group is in the process of evaluating the impact of the above-mentioned amendments in the consolidated
financial statements.
(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.
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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.
(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.
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- 15 -
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.
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.
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Upon a loss of significant influence over the joint ventures and associates, the Group discontinues the use of the
equity method and measures at fair value of any investment that the Group retains in the former joint ventures
and associates from the date when the Group loses significant influence. The fair value of the investment is
regarded as its fair value on initial recognition as a financial asset in accordance with K-IFRS 1039 Financial
Instruments; Recognition and Measurement. The Group recognized differences between the carrying amount and
fair value in net income and it is included in determination of the gain or loss on disposal of joint ventures and
associates. The Group accounts for all amounts recognized in other comprehensive income in relation to that
joint ventures and associates on the same basis as would be required if the joint ventures and associates had
directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognized in other
comprehensive income by an associate would be reclassified to net income on the disposal of the related assets
or liabilities, the Group reclassifies the gain or loss from equity to net income as a reclassification adjustment.
When the Group’s ownership of interest in an associate or a joint venture decreases but the Group continues to
maintain significant influence over an associate or a joint venture, the Group reclassifies to profit or loss the
proportion of the gain or loss that had previously been recognized in other comprehensive income relating to that
decrease in ownership interest if the gain or loss would be reclassified to profit or loss on the disposal of the
related assets or liabilities. Meanwhile, if interest on associate or joint venture meets the definition of non-
current asset held for sale, it is accounted for in accordance with K-IFRS 1105.
The requirements of K-IFRS 1039 Financial Instruments: Recognition and Measurement to determine whether
there has been a loss event are applied to identify whether it is necessary to recognize any impairment loss with
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.
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- 17 -
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 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.
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.
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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.
(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 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.
WOORI BANKANNUAL REPORT 2017
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- 19 -
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.
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.
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099
- 20 -
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.
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.
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- 21 -
5) Fair value of financial assets and liabilities
Financial instruments classified as held-for-trading or designated as at FVTPL and financial assets
classified as AFS are recognized in the financial statements at fair value. All derivatives are measured at
fair value.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in and orderly
transaction between market participants at the measurement date. Fair values are determined from quoted
prices in active markets for identical financial assets or financial liabilities where these are available. The
Group characterizes active markets as those in which transactions for the asset or liability take place with
sufficient frequency and volume to provide pricing information on an ongoing basis.
Where a financial instrument is not in active market characterized by low transaction volumes, price
quotations which vary substantially among market participants, or in which minimal information is released
publicly, fair values are established using valuation techniques rely on alternative market data or internally
developed models using significant inputs that are generally readily observable from objective sources.
Market data includes prices of financial instruments with similar maturities and characteristics, duration,
interest rate yield curves, and measures of volatility. The amount determined to be fair value may
incorporate the management of the Group’s own assumptions (including assumptions that the Group
believes market participants would use in valuing the financial instruments and assumptions relating to
appropriate risk adjustments for nonperformance and lack of marketability).
The valuation techniques used to estimate the fair value of the financial instruments include market
approach and income approach, each of which involves a significant degree of judgment. Under the market
approach, fair value is determined by reference to a recent transaction involving the financial instruments or
by reference to observable valuation measures for comparable companies or assets.
Under the income approach, fair value is determined by converting future amounts (e.g., cash flows or
earnings) to a single present amount (discounted) using current market expectations about the future
amounts. In determining value under this approach, the Group makes assumptions regarding, among other
things, revenues, operating income, depreciation and amortization, capital expenditures, income taxes,
working capital needs, and terminal value of the financial investments. These valuation techniques involve
a degree of estimation, the extent of which depends on the instrument’s complexity and the availability of
market-based data.
The following are descriptions of valuation methodologies used by the Group to measure various financial
instruments at fair value.
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.
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- 22 -
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).
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.
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- 23 -
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 (i.e., improvement in the credit quality of a debtor), 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.
(11) Investment properties
The Group classifies a property held to earn rentals and/or for capital appreciation as an investment property.
Investment properties are measured initially at cost, including transaction costs, less subsequent depreciation and
impairment.
Subsequent costs are included in the carrying amount of the asset or recognized as a separate asset if it is
probable that future economic benefits associated with the assets will flow into the Group and the cost of an asset
can be measured reliably. Routine maintenance and repairs are expensed as incurred.
While land is not depreciated, all other investment properties are depreciated based on the respective assets’
estimated useful lives using the straight-line method. The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for
on a prospective basis.
An investment property is derecognized from the consolidated financial statements on disposal or when it is
permanently withdrawn from use and no future economic benefits are expected even from its disposal. The gain
or loss on derecognition of an investment property is calculated as the difference between the net disposal
proceeds and the carrying amount of the property and is recognized in profit or loss in the period of the
derecognition.
(12) Premises and equipment
Premises and equipment are stated at cost less subsequent accumulated depreciation and accumulated
impairment losses. The cost of an item of premises and equipment is directly attributable to their purchase or
construction, which includes any costs directly attributable to bringing the asset to the location and condition
necessary for it to be capable of operating in the manner intended by management. It also includes the initial
estimate of the costs of dismantling and removing the item and restoring the site on which it is located.
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- 24 -
Subsequent costs to replace part of the premises and equipment are recognized in carrying amount of an asset or
as an asset if it is probable that the future economic benefits associated with the assets will flow into the Group
and the cost of an asset can be measured reliably. Routine maintenance and repairs are expensed as incurred.
While land is not depreciated, for all other premises and equipment, depreciation is charged to net income on a
straight-line basis on the estimated economic useful lives as follows:
Buildings used for business purpose
Structures in leased office
Properties for business purpose
Leased assets
Useful life
35 to 57 years
4 to 5 years
4 to 5 years
Useful lives of the same kind or
similar other premises and equipment
The Group reassesses the depreciation method, the estimated useful lives and residual values of premises and
equipment at the end of each reporting period. If expectations differ from previous estimates, the changes are
accounted for as a change in an accounting estimate. When the carrying amount of a fixed asset exceeds the
estimated recoverable amount, the carrying amount of such asset is reduced to the recoverable amount.
(13) Intangible assets and goodwill
Intangible assets are stated at the manufacturing cost or acquisition cost plus additional incidental expenses less
accumulated amortization and accumulated impairment losses. The Group’s software and industrial property
right (trademark) are amortized over five years using the straight-line method. The estimated useful life and
amortization method are reviewed at the end of each reporting period. If expectations differ from previous
estimates, the changes are accounted for as a change in an accounting estimate.
Industrial property rights
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.
WOORI BANKANNUAL REPORT 2017
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- 25 -
(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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- 26 -
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.
(17) Assets (or Disposal group) held for sale
The Group classifies a non-current asset (or disposal group) as held for sale if its carrying amount will be
recovered principally through a sale transaction rather than through continuing use. Non-current assets (and
disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair
value less costs to sell.
(18) 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.
(19) 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.
WOORI BANKANNUAL REPORT 2017
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- 27 -
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.
(20) 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.
(21) 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 consolidated 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 will not be reclassified to profit or loss. Past service
cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the
discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are
composed of service cost (including current service cost, past service cost, as well as gains and losses on
curtailments and settlements), net interest expense (income), and remeasurement.
The Group presents the service cost and net interest expense (income) components in profit or loss, and the
remeasurement component in other comprehensive income. Curtailment gains and losses are accounted for as
past service costs.
The retirement benefit obligation recognized in the consolidated statement of financial position represents the
actual deficit or surplus in the Group’s defined benefit plans. Any surplus resulting from this calculation is
limited to the present value of any economic benefits available in the form of refunds from the plans or
reductions in future contributions to the plans.
Liabilities for termination benefits are recognized at the earlier of either 1) when the Group has become not able
to cancel its proposal for termination benefits, or 2) when the Group has recognized the cost of restructuring that
accompanies the payment of termination benefits.
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- 28 -
(22) 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.
(23) 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.
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- 29 -
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)
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.
(2) 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.
(3)
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.
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
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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.
(4) 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.
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.
WOORI BANKANNUAL REPORT 2017
110
- 31 -
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.
The maximum exposure to credit risk is as follows (Unit: Korean Won in millions):
December 31, 2017
December 31, 2016
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
8,823,584
26,845,309
90,570,551
140,866,760
267,106,204
25,972
2,644,333
9,694
3,115,775
5,795,774
13,229,244
16,749,296
59,272
12,859,715
80,760,325
93,620,040
396,559,830
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
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Risk Management
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- 32 -
a) Credit risk exposure by geographical areas
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
December 31, 2017
UK
USA
Korea
China
250,678,479 4,104,912 2,823,247
-
-
5,551,870
-
12,407,602
-
16,606,692
-
16,590
91,603,852
25,039
376,865,085 4,689,301 3,210,680 1,353,599 406,929
Others (*)
Japan
1,094,988 381,890 8,022,688
92,012
148,955
618,252
-
78,872
-
42,682
-
1,222,412
66,974
10,034,236
151,131
63,732
2,937
52,259
529,193
172,570
-
-
-
Total
267,106,204
5,795,774
13,229,244
16,749,296
59,272
93,620,040
396,559,830
Korea
China
December 31, 2016
UK
USA
Japan
Others (*)
Total
241,380,250 4,286,018 2,792,088 895,874 323,470
81
-
-
-
23,250
8,714,933 258,392,633
5,573,739
5,205,849
234,892 16,541,888
16,155,290
131,052 13,910,251
13,758,863
140,577
74,166
96,245,092
1,367,464 98,557,280
372,819,510 5,043,901 3,053,415 1,304,594 346,801 10,548,147 393,116,368
- 261,547
-
-
66,342
80,831
6,525
13,845
-
-
737,513
137,861
20,336
-
103,130
99,737
69
(*) Others consist of financial assets in Indonesia, Vietnam, Panama, European countries and others.
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, 2017
47,192,641
34,502,509 38,260,051
3,574,746 133,094,287 10,481,970 267,106,204
100,766
83,239
4,640,068
15,073
1,040
955,588
5,795,774
707,737
1,348,754
-
37,719
7,331,774
- 10,962,149
59,272
-
153,534
296,214
-
-
-
-
4,998,480
4,142,179
-
13,229,244
16,749,296
59,272
16,892,926
66,242,824
21,427,378
9,841,379
56,050,845 71,094,693
3,842,479 36,928,554
7,882,046 170,023,881
4,687,324
93,620,040
25,265,541 396,559,830
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 16,541,888
3,694,230 13,910,251
140,577
-
18,423,611
67,307,337
26,878,320
9,927,574
62,949,956 69,732,303
4,621,971 33,603,651
5,102,153 98,557,280
8,750,546 159,163,281 25,212,945 393,116,368
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
WOORI BANKANNUAL REPORT 2017
112
- 33 -
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
Small and
medium sized
enterprise
Project
financing
and others Sub-total
Consumers
Total
December 31, 2017
Corporates
8,825,767 26,861,286 50,463,112
34,107,547 5,547,950 90,118,609 139,886,407 265,692,069
8
-
-
65,616
63,067
-
128,683
878,406
1,007,097
- 1,402,131
251,431
46,717 1,700,279
537,001
2,237,280
8,825,775 26,861,286 51,930,859
34,422,045 5,594,667 91,947,571 141,301,814 268,936,446
2,191
15,977 1,078,733
8,823,584 26,845,309 50,852,126
267,162
1,830,242
34,154,883 5,563,542 90,570,551 140,866,760 267,106,204
31,125 1,377,020
435,054
Korean treasury
and government
agencies
Banks
General
business
Small and
medium sized
enterprise
Project
financing
and others Sub-total
Consumers
Total
December 31, 2016
Corporates
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
16,600 1,156,000
16,058,305 20,242,260 50,112,214
424,142
2,027,096
31,583,675 7,289,677 88,985,566 133,106,502 258,392,633
61,135 1,641,277
365,125
Loans and receivables
neither overdue nor
impaired
Loans and receivables
overdue but not
impaired
Impaired loans and
receivables
Total
Allowance for credit
losses
Total, net
Loans and receivables
neither overdue nor
impaired
Loans and receivables
overdue but not
impaired
Impaired loans and
receivables
Total
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
December 31, 2017
Corporates
treasury and
government
agencies
8,823,576 26,845,309 43,613,460
6,565,274
8,823,576 26,845,309 50,178,734
General
business
Banks
-
-
Project
financing
and others Sub-total
Small and
medium sized
enterprise
23,191,627 4,623,750 71,428,837 135,893,496 242,991,218
10,767,062
3,835,030 22,065,902
33,958,689 5,522,286 89,659,709 139,728,526 265,057,120
898,536 18,230,872
Consumers
Total
1,409
483,469
19,868,185
29,600,362
2,642,674
52,111,221
114,441,637
167,037,736
Upper grade (*1)
Lower grade (*2)
Total
Value of
collateral(*3)
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- 34 -
Korean
December 31, 2016
Corporates
treasury and
government
agencies
16,058,288 20,242,260 41,461,420
7,941,871
16,058,305 20,242,260 49,403,291
General
business
Banks
17
-
Project
financing
and others Sub-total
Small and
medium sized
enterprise
18,755,963 5,337,033 65,554,416 128,374,017 230,228,981
12,550,282 1,763,658 22,255,811
3,680,920 25,936,748
31,306,245 7,100,691 87,810,227 132,054,937 256,165,729
Consumers
Total
-
358,456 18,003,674
25,493,006 3,996,162 47,492,842 111,054,910 158,906,208
Upper grade (*1)
Lower grade (*2)
Total
Value of
collateral(*3)
(*1) AAA~BBB for corporates, and 1~6 level for consumers
(*2) BBB- ~C for corporates, and 7~10 level for consumers
(*3) The value of collateral is the allocated collateral amount when estimating the allowance for credit losses.
Allowances for credit losses, for loans and receivables neither overdue nor impaired, amounting to 634,949
million Won and 828,944 million Won as of December 31, 2017 and 2016, respectively, which are deducted
from the loans and receivables above.
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
Banks
General
business
Small &
medium sized
enterprise
December 31, 2017
Corporates
59,560
3,702
928
64,190
48,002
6,550
4,935
59,487
Project
financing
and others Sub-total
-
-
-
-
107,562
10,252
5,863
123,677
Consumers
683,445
94,376
55,011
832,832
Total
791,015
104,628
60,874
956,517
4,619
46,513
-
51,132
619,867
670,999
December 31, 2016
Corporates
45,255
1,553
337
47,145
41,329
8,933
2,123
52,385
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
7,021
45,304
-
52,325
546,164
598,489
8
-
-
8
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Korean
treasury and
government
agencies
Banks
General
business
Small &
medium sized
enterprise
Past due
Less than 30 days
30~59 days
60~89 days
Total
Value of
collateral (*)
Past due
Less than 30 days
30~59 days
60~89 days
Total
Value of
collateral (*)
(*) The value of collateral is the allocated collateral amount when estimating the allowance for credit losses.
Allowances for credit losses, for loans and receivables that are overdue but not impaired, amounting to
50,580 million Won and 47,396 million Won as of December 31, 2017 and 2016, respectively, which are
deducted from the loans and receivables above.
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- 35 -
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
Impaired loans
Value of
collateral (*)
-
-
Korean
treasury and
government
agencies
Impaired loans
Value of
collateral (*)
-
-
December 31, 2017
Corporates
General
business
Banks
Small &
medium sized
enterprise
Project
financing
and others Sub-total
Consumers
Total
-
609,202
136,707
41,256
787,165
305,402 1,092,567
-
562,638
141,026
20,351
724,015
227,966
951,981
December 31, 2016
Corporates
General
business
Banks
Small &
medium sized
enterprise
Project
financing
and others Sub-total
Consumers
Total
-
661,778
225,045
188,986 1,075,809
327,123 1,402,932
-
482,680
236,954
42,166
761,800
250,583 1,012,383
(*) 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 1,144,713 million Won and
1,150,756 million Won as of December 31, 2017 and 2016, respectively, are deducted from the impaired
loans and receivables above.
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):
Financial assets at
FVTPL (*)
AFS debt
securities
HTM securities
December 31, 2017
1,685,099
722,923
236,311
9,694
2,654,027
9,897,689
2,386,567
876,482
68,506
13,229,244
15,806,327
888,547
52,188
2,234
16,749,296
Financial assets at
FVTPL (*)
AFS debt
securities
HTM securities
December 31, 2016
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
13,342,384
466,401
101,466
-
13,910,251
Total
27,389,115
3,998,037
1,164,981
80,434
32,632,567
Total
27,491,650
4,559,246
986,251
64,256
33,101,403
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
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- 36 -
(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 within the 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 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 consolidated trusts, 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.
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a) Trading activities
The minimum, maximum and average VaR for the years ended December 31, 2017 and 2016, respectively,
and the VaR as of December 31, 2017 and 2016, 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, 2017
4,183
909
4,750
-
(4,472)
5,370
For the year ended
December 31, 2017
Average Maximum Minimum
As of
December
31, 2016
For the year ended
December 31, 2016
3,799
2,863
5,051
31
(4,621)
7,123
4,918
4,419
6,636
188
(6,798)
9,363
2,467
909
4,061
-
(2,067)
5,370
Average
2,844
3,456
4,914
113
(5,355)
5,972
3,250
4,191
4,396
152
(5,630)
6,359
Maximum Minimum
1,367
2,304
3,967
21
(4,034)
3,625
6,430
5,063
7,686
325
(10,385)
9,119
b) Non-trading activities
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):
Base case
Base case (Prepay)
IR 100bp up
IR 100bp down
IR 200bp up
IR 200bp down
IR 300bp up
IR 300bp down
December 31, 2017
December 31, 2016
NII
4,916,138
4,916,015
5,361,546
4,386,437
5,806,723
3,452,590
6,251,897
2,254,609
NPV
23,472,792
23,163,942
22,886,122
24,127,559
22,372,208
24,830,482
21,929,189
26,633,807
NII
4,367,411
4,384,783
4,802,118
3,903,129
5,236,879
2,975,351
5,671,639
1,968,273
NPV
21,556,632
20,666,425
20,893,490
22,279,204
20,289,742
23,052,848
19,742,627
25,096,193
The interest EaR and VaR calculated based on the BIS Framework of subsidiaries other than the Bank and
consolidated trusts are as follows (Unit: Korean Won in millions):
December 31, 2017
EaR
VaR
December 31, 2016
EaR
VaR
255,679
130,821
188,381
110,335
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(both principal
and interest) from non-trading, interest bearing assets and liabilities, presented by each re-pricing date, are as
follows (Unit: Korean Won in millions):
Within 3
months
4 to 6
months
December 31, 2017
10 to 12
months
7 to 9
months
1 to 5
years
Over 5 years
Total
Asset:
Loans and receivables
AFS financial assets
HTM financial assets
Total
Liability:
Deposits due to
customers
Borrowings
Debentures
Total
161,653,892 41,671,530
2,500,103
2,161,467
6,411,841 54,150,998 26,272,958 297,775,378
601,735 13,866,019
2,367,762
345,868 17,284,095
1,687,362
166,090,779 46,333,100 11,064,295 10,466,965 67,749,792 27,220,561 328,925,492
7,614,159
2,016,711
1,433,425
2,150,708
2,286,179
4,229,000
9,369,794
106,815,564
9,865,249
1,955,902
118,636,715
37,750,367
1,056,579
2,452,240
41,259,186
25,117,556
412,966
1,018,563
26,549,085
27,585,458
437,431
1,752,847
29,775,736
37,518,878
2,709,010
19,770,538
59,998,426
91,246 234,879,069
14,961,062
479,827
2,869,766
29,819,856
3,440,839 279,659,987
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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
148,237,350 42,032,667
2,946,992
1,515,213
7,757,087 55,838,192 35,245,734 297,175,532
17,625,340
2,915,226
14,420,946
1,143,170
154,172,523 46,494,872 12,165,519 11,815,483 67,722,061 36,851,360 329,221,818
8,064,502
2,854,514
1,246,503
3,165,094
2,770,079
5,029,918
6,853,951
713,596
892,030
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
40,737 221,266,305
18,915,461
421,677
4,143,773
25,350,886
4,606,187 265,532,652
Asset:
Loans and receivables
AFS financial assets
HTM financial assets
Total
Liability:
Deposits due to
customers
Borrowings
Debentures
Total
3) Currency risk
Currency risk arises from the 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):
Asset:
Loans and receivables
Financial assets at
FVTPL
AFS financial assets
HTM financial assets
Total
Liability:
Financial liabilities at
FVTPL
Deposits due to
customers
Borrowings
Debentures
Other financial
liabilities
Total
USD
JPY
December 31, 2017
CNY
EUR
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Others
Won
equivalent
Total
Won
equivalent
23,000 24,642,900 126,944 1,204,843 25,224 4,127,936
1,156
1,479,351 3,937,733
35,392,763
32
1,966
111
34,303
2,105,972
118,868
25
-
-
238
-
-
25,109 26,902,043 126,969 1,205,081
-
319
-
-
52,259
-
25,543 4,180,195
27
-
-
1,183
34,583
590
-
104,892
302,801
78,175
1,514,524 4,423,601
174,016
2,461,622
197,043
38,225,444
USD
JPY
December 31, 2017
CNY
EUR
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Others
Won
equivalent
Total
Won
equivalent
41
43,423
79
752
-
-
19
24,878
69,977
139,030
13,744 14,725,686 195,176 1,852,440 21,865
-
700
7,080,118
3,714,411
21,056
-
2,218
-
6,604
3,467
3,578,142
-
114,555
883 1,129,802
315,685
247
-
-
2,396,826 23,682,896
242,874 7,659,733
375,749 4,204,715
2,392
2,562,740
1,802
16,125
26,248 28,126,378 213,598 2,027,291 24,367
1,199
33,624
8,687,009
153,043
319,127
8,108
294,950
3,987,647
196,261
129
165,189
1,278 1,635,554
519,843
406
588,625 3,764,547
3,647,051 39,450,921
9,899,126
176,886
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 27,635,970 108,944 1,129,539
23,194 4,018,678
1,548 1,962,856
4,382,990 39,130,033
66
898
17
589
-
-
23,849 28,820,981 109,001 1,130,128
79,386
1,085,108
20,517
57
-
-
-
80
-
-
13,844
-
23,274 4,032,522
30
-
-
37,562
570
-
1,578 2,000,988
34,124
151,661
144,799 1,244,321
164,052
143,535
4,705,448 40,690,067
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Asset:
Loans and receivables
Financial assets at
FVTPL
AFS financial assets
HTM financial assets
Total
WOORI BANKANNUAL REPORT 2017
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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
Liability:
Financial liabilities at
FVTPL
Deposits due to
customers
Borrowings
Debentures
Other financial
liabilities
Total
Off-balance accounts
(3)
Liquidity risk
75
90,908
253
2,621
-
-
88
111,098
115,980
320,607
11,294
7,193
2,931
13,648,729
8,692,792
3,541,769
124,790 1,293,835
33,625
-
3,243
-
18,950 3,283,291
-
121,282
-
700
651
222
-
825,165
280,894
-
2,402,076 21,453,096
115,332 9,122,643
228,720 3,891,771
2,235
23,728
8,593
2,700,703
28,674,901
10,384,163
12,390
128,464
140,676 1,458,545
297,304
28,675
1,508
261,278
21,158 3,665,851
183,883
1,061
245
310,396
1,206 1,527,553
473,845
374
846,990 4,247,831
3,709,098 39,035,948
312,187 11,651,382
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 the maturity gap
and such gap ratio through 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, 2017
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
Financial liabilities at
FVTPL
Deposits due to customers
Borrowings
Debentures
Other financial liabilities
Total
1,717
155,984
168,442
327,030
148,008,777 29,563,310 18,175,348 32,468,110 7,409,118 2,624,594 238,249,257
6,115,732 1,893,173 1,489,272 1,178,107 3,924,681
479,568 15,080,533
1,955,255 2,452,565 1,018,714 1,744,731 19,770,380 2,869,699 29,811,344
128,940 2,730,001 10,144,982
7,121,342
163,369,548 34,227,903 20,685,876 35,392,463 31,233,494 8,703,862 293,613,146
162,871
1,003
375
512
825
-
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
94
1,529
678,813
154,325
47
6,284,092
136,835,315 28,685,473 19,254,108 30,875,962
876,836 1,486,710
4,711,273
860,596 1,518,524 14,641,016
84,792
1,433
834,808
2,732,019 224,666,969
420,720 18,997,770
4,116,768 25,323,071
2,751,825 17,685,022
163,583,751 33,147,269 20,997,114 33,882,676 25,875,498 10,021,332 287,507,640
9,146,895 2,355,336
2,108,780 2,077,387
27,544
14,813,948
5,480
-
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b) Cash flows of principals and interests by expected maturities of non-derivative financial liabilities are as
follows (Unit: Korean Won in millions):
Within 3
months
4 to 6
months
December 31, 2017
10 to 12
months
7 to 9
months
1 to 5
years
Over 5
years
Total
Financial liabilities at
FVTPL
168,442
Deposits due to customers 159,146,602
6,115,732
Borrowings
1,955,255
Debentures
7,121,342
Other financial liabilities
174,507,373
Total
155,984
31,298,562
1,893,173
2,452,565
162,871
35,963,155
1,717
16,667,130
1,489,272
1,018,714
825
19,177,658
512
375
-
21,995,294 6,487,047 2,278,756
479,568
1,178,107 3,924,681
1,744,731 19,770,380 2,869,699
128,940 2,730,001
24,919,647 30,311,423 8,358,024
1,003
327,030
237,873,391
15,080,533
29,811,344
10,144,982
293,237,280
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
678,813
834,808
Deposits due to customers 148,089,355 30,163,971 17,600,803 20,947,335 5,128,387 2,331,993 224,261,844
420,719 18,997,770
876,835 1,486,710 4,711,273
Borrowings
860,596 1,518,524 14,641,016 4,116,768 25,323,071
Debentures
Other financial liabilities
84,792 2,751,825 17,685,022
174,837,797 34,625,763 19,343,808 23,954,049 24,719,793 9,621,305 287,102,515
Total
9,146,901 2,355,332
2,108,780 2,077,387
27,544
14,813,948
154,325
5,480
1,433
1,529
47
94
-
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, as 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 by the maturity of derivative financial liabilities as of December 31, 2017 and 2016 is as
follows:
December 31, 2017
December 31, 2016
Within 3
months
3,150,149
3,009,977
4 to 6
months
Remaining maturity
10 to 12
months
7 to 9
months
1 to 5
years
Over 5
years
-
-
-
-
381
208
67,373
7,013
Total
3,217,903
3,017,198
-
-
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 persist or may be unconditionally cancellable,
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, 2017
December 31, 2016
12,859,715
80,760,325
14,761,784
83,795,496
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(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 approaches 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 an 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 the above regulations, the Group is required to meet the following new minimum requirements:
6.25% and 5.38%, a minimum Tier 1 ratio of 7.75% and 6.88% and a minimum total regulatory capital of 9.75%
and 8.88% as of December 31, 2017 and 2016, respectively.
Details of the Bank’s capital adequacy ratio as of December 31, 2017 and 2016 are as follows (Unit: Korean won
in millions):
December 31, 2017
December 31, 2016
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
16,074,987
3,041,664
3,486,555
22,603,206
134,767,711
2,316,938
9,677,559
146,762,208
10.95%
13.03%
15.40%
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%
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- 42 -
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 type of customers. This financial information of the segments is regularly
audited by the CODM to make decisions about resources to be allocated to each segment and evaluate its
performance.
(1) Segment by type of customers
The Group’s reporting segments comprise the following customers: consumer banking, corporate banking,
investment banking, capital market, credit card market 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 retail and individual consumers, 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 in securities and derivatives, etc.
• Credit card: Credit card, cash service and card loan, etc.
• Headquarter and others: Segments that do not belong to above operating segments
The details of operating income by each segment are as follows (Unit: Korean Won in millions):
Net Interest income
Interest income
Interest expense
Inter-segment
Net non-interest income
Non-interest income
Non-interest expense
Inter-segment
Other income(expense)
Administrative expense
Impairment losses due to
credit loss and others
Operating income
Non-operating
income(expense)
Net income before income tax
expense
Income tax expense
Net income
Corporate
Consumer
banking
banking
1,795,377
1,702,939
3,149,625
2,964,813
(955,836) (1,681,652)
512,216
(490,850)
571,336
649,950
680,778
802,387
(170,268)
(253,961)
60,826
101,524
(1,906,561) (1,149,288)
(832,429)
(1,808,974)
For the year ended December 31, 2017
Capital
market
36,883
18,834
-
18,049
69,671
9,548,399
Credit Cards
463,603
599,550
(135,947)
-
73,537
1,163,575
Investment
Sub-total
banking
4,633,716
12,124
8,242,056
148,500
(3,608,340)
(243)
-
(136,133)
1,905,666
152,168
366,523
15,245,069
(214,355) (9,478,728) (1,090,038) (2,132,053) (13,339,403)
-
(4,443,080)
(3,788,625)
Headquarters
and others
622,790
1,360,734
(834,662)
96,718
389,004
2,683,407
(162,350)
(939,406)
(954,238)
-
(398,652)
(163,536)
-
14,662
(16,567)
-
(63,835)
(12,881)
Adjust-
Total
ments
5,220,650
586,934
8,550,687
308,631
(3,330,037)
278,303
-
-
(745,990)
1,159,676
(395,833) 14,849,236
(350,157) (13,689,560)
-
(4,223,584)
(3,530,801)
-
219,496
257,824
(97,587)
446,328
(316,859)
1,217,425
(50,954)
100,457
31,229
121,216
(235,116)
138,488
14,832
72,388
(654,455)
2,096,302
(38,328)
60,440
(692,783)
2,156,742
(98,510)
(3,153)
39,350
-
(5,219)
(112,734)
(180,266)
(26,970)
(207,236)
347,818
(84,172)
263,646
1,214,272
(296,634)
917,638
139,807
(33,834)
105,973
121,216
(29,335)
91,881
133,269
(32,055)
101,214
(40,346)
63,396
23,050
1,916,036
(412,634)
1,503,402
33,470
(6,784)
26,686
1,949,506
(419,418)
1,530,088
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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(expense)
Net income before income
tax expense
Income tax expense
Net income
- 43 -
For the year ended December 31, 2016
Capital
market
Investment
Corporate
Consumer
banking
banking
banking
48,826
14,613
1,741,140
1,484,233
19,575
153,160
3,026,148
2,979,811
(324)
(225)
(1,023,290) (1,780,990)
29,575
(138,322)
495,982
4,033
160,885
550,194
535,514
7,590,087
605,026
(32,873) (444,141) (7,586,054)
-
47,553
(51,995)
(17,964)
-
(1,875,579) (1,476,190) (110,863)
(14,983)
(1,788,672)
(472,288)
557,410
923,810
(405,912)
39,512
(966,878)
Headquarter
and Others
713,677
1,492,147
(863,523)
85,053
302,800
4,563,280
Sub-total
Credit Card
4,430,585
428,096
8,227,523
556,682
(3,796,938)
(128,586)
-
-
1,655,036
79,714
986,148
15,203,865
(906,434) (4,173,415) (13,548,829)
-
(87,065)
(4,453,370)
(574,606)
(3,730,476)
(793,978)
-
(364,137)
(148,001)
Adjust-
Total
ment
5,019,544
588,959
8,512,312
284,789
(3,492,768)
304,170
-
-
(955,696)
699,340
(433,880) 14,769,985
(521,816) (14,070,645)
-
(4,144,678)
(3,478,476)
-
308,692
252,000
(86,907)
166,064
(509,312)
815,144
(95,880)
64,635
(34,031)
864
(216,136)
143,673
219,372
441,871
(722,894)
1,632,251
56,692
(58,045)
(666,202)
1,574,206
(35,081)
(1,619)
46,559
(5,288)
(1,504)
55,291
58,358
(79,175)
(20,817)
130,983
(31,698)
99,285
813,525
(203,983)
609,542
111,194
(26,909)
84,285
(4,424)
1,071
(3,353)
142,169
(32,774)
109,395
497,162
16,476
513,638
1,690,609
(277,817)
1,412,792
(137,220)
1,961
(135,259)
1,553,389
(275,856)
1,277,533
(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, 2017 and 2016 amounted to 22,279,666 million Won and
22,265,508 million Won, respectively, and revenue from the foreign customers amounted to 1,120,257 million
Won and 1,016,789 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, 2017 and 2016 are 3,550,764 million Won and 3,498,327
million Won, respectively, and foreign subsidiaries are 233,732 million Won and 240,946 million Won,
respectively.
122122
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- 44 -
6. CASH AND CASH EQUIVALENTS
(1) Details of cash and cash equivalents are as follows (Unit: Korean Won in millions):
Cash
Foreign currencies
Demand deposits
Fixed deposits
Total
December 31, 2017
2,009,363
617,155
3,423,355
858,413
6,908,286
December 31, 2016
2,113,739
742,340
4,238,956
496,289
7,591,324
(2) Significant 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 (loss)
of foreign operations translation
Changes in other comprehensive income related to
valuation of cash flow hedging
Changes in other comprehensive income 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
For the years ended December 31
2017
2016
(84,498)
612
(208,329)
777
10,497
51,227
12,586
(7,937)
28,712
10,371
34,162
-
(62,571)
(10,658)
(156,708)
5,187
(3) Adjustments of liabilities from financing activities in current year are as follows (Unit: Korean Won in
millions):
For the year ended December 31, 2017
Not involving cash inflows and outflows
Variation of
gains on
valuation of
hedged
items
Foreign
Exchange
January
1,2017
18,769,515
23,565,449
42,334,964
Cash flow
(3,634,883)
4,817,701
1,182,818
(350,429)
(478,249)
(828,678)
-
(39,373)
(39,373)
Others
503
4,123
4,626
December
31,2017
14,784,706
27,869,651
42,654,357
Borrowings
Debentures
Total
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- 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, 2017 December 31, 2016
5,633,724
17,000
5,650,724
5,820,787
22,290
5,843,077
(2) Financial assets held for trading are as follows (Unit: Korean Won in millions):
Deposits:
Gold banking asset
Securities:
Debt securities
December 31, 2017 December 31, 2016
25,972
26,180
Korean treasury and government agencies
Financial institutions
Corporates
Equity securities
Beneficiary certificates
Securities loaned
Derivatives assets
Sub-total
Total
540,438
1,476,498
627,397
21,666
13,041
-
2,679,040
3,115,775
5,820,787
519,337
1,444,459
681,120
35,983
23,891
4,459
2,709,249
2,898,295
5,633,724
(3) Financial assets designated at FVTPL are as follows (Unit: Korean Won in millions):
Debt securities
Equity securities
Total
December 31, 2017 December 31, 2016
4,348
12,652
17,000
9,694
12,596
22,290
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- 46 -
8. AVAILABLE FOR SALE FINANCIAL ASSETS
Details of AFS financial assets are as follows (Unit: Korean Won in millions):
Debt securities:
As of December 31, 2017
Cumulative
Cumulative
losses on
gains on
valuation
valuation
Amortized
cost
Fair value
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
Total
2,338,760
5,225,921
2,727,016
309,518
2,449,954
35,154
13,086,323
982,393
697,655
169,988
14,936,359
1,193
1,504
3,851
-
3,100
21
9,669
430,921
18,701
664
459,955
(9,386)
(10,159)
(5,635)
(1,337)
(10,475)
(12)
2,330,567
5,217,266
2,725,232
308,181
2,442,579
35,163
(37,004) 13,058,988
1,411,078
(2,236)
712,628
(3,728)
170,256
(396)
(43,364) 15,352,950
As of December 31, 2016
Cumulative
Cumulative
losses on
gains on
valuation
valuation
Amortized
cost
Fair value
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)
3,788,630
6,314,198
4,409,186
249,203
1,211,864
75,228
(46,163) 16,048,309
1,453,613
(724)
2,822,082
(21,170)
(3,086)
493,579
(71,143) 20,817,583
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- 47 -
9. HELD TO MATURITY FINANCIAL ASSETS
Details of HTM financial assets are as follows (Unit: Korean Won in millions):
As of December 31, 2017
Cumulative
Cumulative
losses on
gains on
valuation
valuation
6,944
2,923
12,367
832
23,066
(15,266)
(15,067)
(25,326)
(1,024)
(56,683)
Amortized
cost
3,994,857
7,245,426
5,311,970
197,043
16,749,296
Fair value
3,986,535
7,233,282
5,299,011
196,851
16,715,679
As of December 31, 2016
Cumulative
Cumulative
losses on
gains on
valuation
valuation
Fair value
26,366
9,236
58,176
-
93,778
(6,391)
(4,940)
(7,093)
(428)
(18,852)
3,774,331
5,172,783
4,874,439
163,624
13,985,177
Amortized
cost
3,754,356
5,168,487
4,823,356
164,052
13,910,251
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 loans and receivables
Total
December 31, 2017 December 31, 2016
14,815,476
235,400,585
8,176,572
258,392,633
8,868,378
251,523,301
6,714,525
267,106,204
(2) Details of due from banks are as follows (Unit: Korean Won in millions):
December 31, 2017 December 31, 2016
Due from banks in local currency:
Due from The Bank of Korea (“BOK”)
Due from depository banks
Due from non-depository institutions
Due from the Korea Exchange
Others
Allowance for credit losses
Due from banks in foreign currencies:
Sub-total
Due from banks on demand
Due from banks on time
Others
Allowance for credit losses
Sub-total
Total
6,246,496
30,003
150
50,000
97,365
(1,541)
6,422,473
794,353
972,915
679,554
(917)
2,445,905
8,868,378
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
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- 48 -
(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 BOK
The BOK
December
31, 2017
Reason of restriction
Reserve deposits under The
6,246,496
BOK Act
Others
The Korea Exchange and
Central Counter Party KRW
others
Sub-total
94,394
6,340,890
margin and others
Due from banks in foreign currencies:
Due from banks on demand
The BOK and others
Others
The People’s Bank of China
and others
Sub-total
Total
Financial institution
Counterparty
Due from banks in local currency:
Due from The BOK
The BOK
787,520
Reserve deposits under The
BOK Act and others
Reserve deposits and others
367,108
1,154,628
7,495,518
December
31, 2016
Reason of restriction
Reserve deposits under The
11,395,162
BOK Act
Others
The Korea Exchange and
Central counter party KRW
others
Sub-total
70,304
11,465,466
margin and others
Due from banks in foreign currencies:
Due from banks on demand
The BOK and others
Others
The People’s Bank of China
and others
Sub-total
Total
854,612
Reserve deposits under The
BOK Act and others
Reserve deposits and others
778,418
1,633,030
13,098,496
(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, 2017 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
200,213,230
13,147,888
2,516,907
6,827,295
8,197,159
334,714
137,523
23,620
362,319
563,152
3,003,455
16,859,064
510,860
607,325
(10,988)
(1,770,222)
251,523,301
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(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 debtors
Allowance for credit losses
Total
December 31, 2017 December 31, 2016
190,000
5,417,676
1,080,489
135,000
4,459,318
1,026,273
984,620
166,877
(57,563)
6,714,525
1,019,577
639,945
(171,115)
8,176,572
(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
Consumers
(163,858)
(131,275)
Corporates
For the year ended December 31, 2017
Others
(209,024)
12,192
(155,372)
(203,968)
Credit card
(1,498,842)
(539,222)
Total
(2,027,096)
(862,273)
(45,060)
142,099
898
8,643
908
(187,645)
(84,413)
453,249
65,145
36,548
211,729
(1,355,806)
(51,366)
228,640
-
-
1
(182,065)
(68)
63,181
29,186
-
(193)
(104,726)
(180,907)
887,169
95,229
45,191
212,445
(1,830,242)
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)
(53,679)
155,424
2,055
10,319
(1,188)
(163,858)
Corporates
For the year ended December 31, 2016
Others
(442,620)
(73,318)
(145,810)
(207,730)
Credit card
(1,686,194)
(536,359)
Total
(2,478,057)
(890,763)
(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)
(309,488)
1,357,201
207,032
77,220
9,759
(2,027,096)
(*) Others are due to debt-equity swap, fluctuation of foreign currencies exchange rates, etc.
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.
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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, 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 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 inherent factors of the asset or liability.
(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, 2017
Financial assets:
Financial assets held for trading
Deposits
Debt securities
Equity securities
Beneficiary certificates
Derivative assets
Sub-total
Financial assets designated at FVTPL
Debt securities
Equity securities
Sub-total
AFS financial assets
Debt securities
Equity securities
Beneficiary certificates
Securities loaned
Sub-total
Derivative assets
Total
Financial liabilities:
Financial liabilities held for trading
Deposits
Derivative liabilities
Securities sold
Sub-total
Financial liabilities designated at
FVTPL
25,972
405,942
21,666
-
1,021
454,601
-
2,238,391
-
13,041
3,093,272
5,344,704
-
-
-
-
-
-
-
-
-
-
21,482
21,482
9,694
12,596
22,290
2,710,172
399,214
-
69,778
3,179,164
10,348,815
-
68,722
100,478
10,518,015
-
3,633,765
59,272
15,921,991
-
1,011,864
643,906
-
1,655,770
-
1,699,542
25,972
2,644,333
21,666
13,041
3,115,775
5,820,787
9,694
12,596
22,290
13,058,987
1,411,078
712,628
170,256
15,352,949
59,272
21,255,298
25,964
2,613
-
28,577
-
3,126,585
-
3,126,585
-
20,951
-
20,951
25,964
3,150,149
-
3,176,113
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Level 1 (*1) Level 2 (*1)
Level 3 (*2)
Total
December 31, 2017
-
-
-
-
91,739
91,739
-
28,577
67,754
3,286,078
160,057
-
160,057
-
181,008
160,057
91,739
251,796
67,754
3,495,663
Level 1 (*1) Level 2 (*1) Level 3 (*2)
Total
December 31, 2016
26,180
370,636
35,983
-
4,459
3,233
440,491
-
2,274,280
-
23,891
-
2,871,909
5,170,080
-
-
-
-
-
-
-
-
-
-
-
23,153
23,153
4,348
12,652
17,000
26,180
2,644,916
35,983
23,891
4,459
2,898,295
5,633,724
4,348
12,652
17,000
2,288,917 13,759,392
-
2,291,571
102,300
3,108,874 16,153,263
428,678
-
391,279
-
1,024,935
530,511
-
1,555,446
16,048,309
1,453,613
2,822,082
493,579
20,817,583
140,478
3,549,365 21,463,821
-
99
1,595,698
140,577
26,608,884
26,501
1,750
28,251
-
2,974,703
2,974,703
-
33,524
33,524
26,501
3,009,977
3,036,478
-
-
-
197
92,974
93,171
-
28,251
7,221
3,075,095
673,709
-
673,709
-
707,233
673,906
92,974
766,880
7,221
3,810,579
Equity-linked securities
Debentures
Sub-total
Derivative liabilities
Total
Financial assets:
Financial assets held for trading
Deposits
Debt securities
Equity securities
Beneficiary certificates
Securities loaned
Derivative assets
Sub-total
Financial assets designated at FVTPL
Debt securities
Equity securities
Sub-total
AFS financial assets
Debt securities
Equity securities
Beneficiary certificates
Securities loaned
Sub-total
Derivative assets
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
(*1) There is no transfer between level 1 and level 2 of financial assets and liabilities measured at fair value. The Group recognizes
transfers between the levels at the end of reporting period within which events or conditions change.
(*2) Certain AFS unquoted equity securities were measured at cost as of December 31, 2017 and 2016, that are amounting to 37,092
million Won and 43,202 million Won, respectively. These unquoted equity instruments mostly represent minority investments
in special purposed entity vehicles such as asset securitization structures. They are measured at cost because (a) observable
inputs of financial information to measure fair value was not available to obtain, or (b) there is a significant variance in likely
estimated cash flows or (c) the probabilities for the various estimated cash flows could not be measured reliably. In addition,
the Group has no intention to dispose these investments in the foreseeable future.
WOORI BANKANNUAL REPORT 2017
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- 52 -
Certain financial assets are carried at cost, even though under K-IFRS it is required to be subsequently measured
at their fair value, since they do not have quoted market prices in an active market and cannot be measured at fair
value reliably. The carrying amount of the financial assets which have been disposed for the year ended
December 31, 2017 is 1,266 million Won and the related gain from the disposals is 657 million Won.
Financial assets and liabilities designated at FVTPL, held-for-trading financial assets and liabilities, AFS
financial assets, and derivative assets and liabilities are recognized at fair value. Fair value is the amount that
would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market
participants at the measurement date.
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. Input variables and fair value measurement methods for each type
of financial instruments are as follows:
Fair value measurement methods
Input variables
Risk-free market rate, credit
spread
Risk-free market rate, market risk
premium, Beta, etc.
Risk-free market rate, forward
rate, volatility, foreign exchange
rate, stock prices, etc.
Debt securities
Equity securities and
Beneficiary
certificates
Derivatives
The fair value is measured by discounting the
projected cash flows of debt securities by
applying the market discount rate that has been
applied to a proxy company that has similar
credit rating to the issuers of the securities.
Among DCF (Discounted Cash Flow) Model,
FCFE (Free Cash Flow to Equity) Model,
Comparable Company Analysis, Dividend
Discount Model, Risk-adjusted Rate of Return
Method, and Net Asset Value Method, more
than one method is used given the characteristic
of the subject of fair value measurement.
The in-house developed model which is based on
the models that are used by market participants
in the valuation of general OTC derivative
products, such as options, interest rate swaps,
currency swap and currency forward 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.
Equity-linked securities 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.
Values of underlying assets, risk-
free market rate, market rate,
dividend and convenience yield,
volatility, correlation coefficient,
credit spread, and foreign
exchange rate
Debentures
The fair value is measured by discounting the
Risk-free market rate, forward rate
projected cash flows of a debenture by applying
the market discount rate that is reflecting credit
rating of the Group.
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Valuation methods of financial assets and liabilities measured at fair value and classified into Level 3 and
significant but unobservable inputs are as follows:
Fair value
measurement
technique
Derivative assets Option valuation
Input variable
Range
Correlation
model and others
coefficient
Volatility of
underlying asset
Derivative
liabilities
Option valuation
model and others
Correlation
coefficient
Volatility of
underlying asset
Equity linked
securities
Monte Carlo
Simulation and
others
Correlation
coefficient
Volatility of
underlying asset
Equity securities
and
Beneficiary
certificates
External appraisal
value and others
Expected growth
rate
Volatility of real
estate sale price
Discount rate of
lease cash flow
and others
0.900~0.980
12.1%~28.1%
0.900~0.980
12.1%~28.1%
0.363~0.694
6.8%~58.9%
0.0%~1.0%
0%
8.31%~8.54%
Impact of changes in significant
unobservable inputs on fair value
measurement
Variation of fair value increases as
correlation coefficient increases.
Variation of fair value increases as
volatility increases.
Variation of fair value increases as
correlation coefficient increases.
Variation of fair value increases as
volatility increases.
Equity linked securities’ variation of
fair value increases if both volatility
and correlation coefficient increase.
However when correlation coefficient
decreases, despite the increase in
volatility, the variation of fair value of
equity linked securities may decrease.
Fair value increases as expected
growth rate increases.
Fair value increases as sale price
Increases
Fair value increases as discount rate of
lease cash flow decreases
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.
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(3) Changes in financial assets and liabilities classified into level 3 are as follows (Unit: Korean Won in
millions):
January
1, 2017
Net
Income (loss)
(*1)
For the year ended December 31, 2017
Other
comprehensive
income
Purchases/
Issuances
Disposals/
Settlements
Transfer to or
out of level 3
(*2)
December
31, 2017
Financial assets:
Financial assets held for trading
Derivative assets
Financial assets designated at
FVTPL
Debt securities
Equity securities
Sub-total
AFS financial assets
Equity securities
Beneficiary certificates
Sub-total
Derivative assets
Total
Financial liabilities:
Financial liabilities held for trading
23,153
22,362
-
1,398
(25,431)
-
21,482
4,348
12,652
17,000
1,024,935
530,511
1,555,446
99
1,595,698
346
(56)
290
27,986
212
28,198
329
51,179
-
-
-
5,000
-
5,000
-
-
-
24,442
(4,321)
20,121
65,961
226,975
292,936
(131,460)
(109,471)
(240,931)
-
20,121
-
299,334
(428)
(266,790)
-
-
-
-
-
-
-
-
9,694
12,596
22,290
1,011,864
643,906
1,655,770
-
1,699,542
Derivative liabilities
33,524
24,866
-
500
(37,939)
-
20,951
Financial liabilities designated at
FVTPL
Equity-linked securities
Total
673,709
707,233
112,015
136,881
-
-
-
500
(625,667)
(663,606)
-
-
160,057
181,008
(*1) The losses which increase the financial liabilities are presented as positive amounts and the gains which decrease the
financial liabilities are presented as negative amounts. The loss amounting to 34,621 million Won for the year ended
December 31, 2017, which is from financial assets and liabilities that the Group holds, has been 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.
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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)
Financial assets designed at FVTPL
Debt securities
Equity securities
Sub-total
AFS financial assets:
Equity securities (*4)
Beneficiary certificates
Others
Sub-total
78,676
(29,117)
-
13,640
(39,506)
(540)
23,153
986
11,609
12,595
(161)
1,043
882
-
-
-
4,509
-
4,509
(986)
-
(986)
-
-
-
4,348
12,652
17,000
993,368
377,070
5,308
1,375,746
(6,986)
(868)
594
(7,260)
57,323 205,749
5,794 174,024
-
(643)
62,474 379,773
(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
78,607
(8,322)
-
1,155
(37,916)
-
33,524
Financial liabilities designated at
FVTPL
Equity-linked securities
Total
747,351
825,958
71,079
62,757
-
-
-
1,155
(144,721)
(182,637)
-
-
673,709
707,233
(*1) The losses which increase the financial liabilities are presented as positive amounts and the gains which decrease the
financial liabilities are presented as negative amounts. 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, has been 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.
(4) Sensitivity analysis on the unobservable inputs used for measuring level 3 financial instruments
The sensitivity analysis of the financial instruments has been performed by classifying with favorable and
unfavorable changes based on how changes in unobservable assumptions would have effects on the fluctuations
of financial instruments’ value. When the fair value of a financial instrument is affected by more than one
unobservable assumption, the below table reflects the most favorable or the most unfavorable changes which
resulted from varying the assumptions individually. The sensitivity analysis was performed for two types of
level 3 financial instruments: (1) debt securities, equity securities, 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.
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The following table presents the sensitivity analysis to disclose the effect of reasonably possible volatility on the
fair value of a level 3 financial instruments as of December 31, 2017 and 2016. (Unit: Korean Won in millions):
For the year ended December 31, 2017
Net income
(loss)
income (loss)
Other comprehensive
For the year ended December 31, 2016
Net income
(loss)
income (loss)
Other comprehensive
Favorable
Unfavorable Favorable
Unfavorable Favorable
Unfavorable Favorable
Unfavorable
Financial assets:
Financial assets held for
trading
Derivatives assets
(*1)(*2)
Financial assets designed
at FVTPL
Debt securities (*5)
Equity securities (*5)
AFS Financial assets
Equity securities
(*3)(*4)
Beneficiary certificates
(*4)
Total
Financial liabilities:
Financial liabilities held
for trading
Derivative liabilities
(*1)(*2)
Financial liabilities
designated at FVTPL
Equity-linked securities
(*1)
Total
1,234
(526)
265
670
(309)
(624)
-
-
2,169
-
-
(1,459)
-
-
-
-
-
-
861
(2,248)
-
707
-
(657)
-
-
-
-
-
-
28,583
(15,246)
-
-
31,412
(18,551)
1,861
30,444
(1,857)
(17,103)
-
1,568
-
(2,905)
2,903
34,315
(2,571)
(21,122)
5
(513)
-
-
4,892
(3,568)
-
8
13
(7)
(520)
-
-
-
-
905
5,797
(857)
(4,425)
-
-
-
-
-
(*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) Changes of fair value are measured by increasing or decreasing the discount rate by 10%, which is major unobservable
variable, respectively.
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(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, 2017
Fair value
Level 1
Level 2
Level 3
Total
1,206,292 15,509,387
16,715,679
-
- 265,570,649 265,570,649
-
Book
value
16,749,296
267,106,204
- 234,682,775
- 14,754,506
- 27,889,781
- 13,890,789
- 234,682,775
14,754,506
-
27,889,781
-
13,890,789
-
234,695,084
14,784,706
27,869,651
13,892,461
As of December 31, 2016
Fair value
Level 1
Level 2
Level 3
Total
741,880 13,243,297
13,985,177
-
- 259,565,952 259,565,952
-
Book
Value
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
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. Input variables and fair value measurement methods for
financial assets and liabilities that are measured at amortized costs are given as follows:
Debt securities
Fair value measurement technique
Input variables
The fair value is measured by
Risk-free market rate and
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.
credit spread
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.
Risk-free market rate,
credit spread and
prepayment-rate
Deposit due to customers,
borrowings, debentures,
and other financial
liabilities
The fair value is measured by
Risk-free market rate and
discounting the projected cash flows
of debt products by applying the
market discount rate that is reflecting
credit rating of the Group.
forward rate
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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 consolidated financial statements of the Group through disposals, but the Group
still have continuous involvements are given as follows (Unit: Korean Won in millions):
Type of continuous
involvement
December 31, 2017
Book value of
continuous
participation
Fair value of
continuous
participation
Maximum
exposure to loss
Conditional disposal of loans
to KAMCO (*)
Post settlement
-
-
-
(*) The post settlement had been settled up as of December 31, 2017, and there are no financial instruments which
meet the derecognition conditions but the group has continuous involvements.
Type of continuous
involvement
December 31, 2016
Book value of
continuous
participation
Fair value of
continuous
participation
Maximum
exposure to loss
Conditional disposal of loans
to KAMCO (*)
Post settlement
-
-
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 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 do not meet condition of derecognition
a) Disposal of securities under repurchase agreements
The financial instruments that were disposed but the Group agreed to repurchase at the fixed amounts at the
same time, so that they did not meet the conditions of derecognition, are as follows (Unit: Korean Won in
millions):
Assets transferred AFS financial assets
HTM financial assets
Total
December 31,
2017
9,998
5,436
15,434
December 31,
2016
2,546,683
7,133
2,553,816
Related liabilities Bonds sold under repurchase agreements
3,173
2,004,905
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b) Securities loaned
When the Group loans its securities to outside parties, the legal ownerships of the securities are transferred,
however, they should be returned at the end of lending period therefore the Group does not derecognize
them from the consolidated financial statements as it owns majority of risks and benefits from the securities
continuously regardless of the transfer of legal ownership. The carrying amounts of securities loaned are as
follows (Unit: Korean Won in millions):
Financial assets at
Korean equity securities
FVTPL
AFS financial
Korean treasury and
assets
government agencies and
others
Total
December 31,
2017
December 31,
2016
Loaned to
Samsung Securities Co.,
-
4,459
Ltd. and others
Korea Securities Finance
Corporation and others
170,256
170,256
493,579
498,038
The details of the transferred financial assets that are not derecognized in their entirety, such as disposal of
securities under repurchase agreement or securities loaned, are explained in Note 18.
(2) The offset of 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).
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As of December 31, 2017 and 2016, the financial instruments to be set off and may be covered by master
netting agreements and similar agreements are given as below (Unit: Korean Won in millions):
December 31, 2017
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 consolidated
statement of financial
position
Netting
agreements
and others
Cash
collateral
received
Net
amounts
2,992,476
3,767,726
1,710
-
2,990,766
3,767,726
5,787,448
174,415
796,629
16,859,064
-
16,859,064
16,859,064
-
-
39,050,227
-
62,669,493 38,987,064 23,682,429 22,646,512
38,985,354
64,873
-
174,415
64,873
861,502
Financial assets:
Derivative assets and others (*1)
Receivable spot exchange (*2)
Bonds purchased under resale
agreements (*2)
Domestic exchanges receivable
(*2)(*5)
Total
December 31, 2017
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 consolidated
statement of financial
position
Netting
agreements
and others
Cash
collateral
pledged
Net
amounts
Financial liabilities:
Derivative liabilities and others (*1)
Payable spot exchange (*3)
Bonds sold under repurchase
agreements (*4)
Domestic exchanges payable
(*3)(*5)
Total
3,160,217
3,723,886
1,710
-
3,158,507
3,723,886
5,866,682
157,750
857,961
3,173
-
3,173
3,173
-
-
40,284,515 38,985,354
47,171,791 38,987,064
1,299,161
8,184,727
1,293,931
7,163,786
-
157,750
5,230
863,191
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 consolidated
statement of financial
position
Netting
agreements
and others
Cash
collateral
received
Net
amounts
2,962,969
4,678,089
8,442
-
2,954,527
4,678,089
6,546,232
69,834
1,016,550
8,854,753
-
8,854,753
8,854,753
-
-
31,456,123 30,883,281
-
47,951,934 30,891,723 17,060,211 15,400,985
572,842
- 572,842
69,834 1,589,392
Financial assets:
Derivative assets and others (*1)
Receivable spot exchange (*2)
Bonds purchased under resale
agreements (*2)
Domestic exchanges receivable
(*2)(*5)
Total
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December 31, 2016
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 consolidated
statement of financial
position
Netting
agreements
and others
Cash
collateral
pledged
Net
amounts
3,467,374
4,682,775
8,442
-
3,458,932
4,682,775
6,695,062
105,270
1,341,375
2,004,905
-
2,004,905
2,004,905
-
-
39,345,524 30,883,281
6,161,151
49,500,578 30,891,723 18,608,855 14,861,118
8,462,243
- 2,301,092
105,270 3,642,467
Financial liabilities:
Derivative liabilities and others (*1)
Payable spot exchange (*3)
Bonds sold under repurchase
agreements (*4)
Domestic exchanges payable
(*3)(*5)
Total
(*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 at 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):
Joint ventures and Associates
Main business
Woori Bank and Woori Private Equity
Asset Management Co., Ltd.:
Woori Blackstone Korea
Percentage of
ownership (%)
December
31, 2017
December
31,2016
Financial
statements as of
December
31, 2017
Opportunity No.1 Private Equity Fund (*19)
Other finance business
-
26.4
-
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)
Chin Hung International Inc. (*2)(*9)
Poonglim Industrial Co., Ltd. (*6)(*12)(*14)
STX Engine Co., Ltd. (*1)(*2)(*20)
Samho International Co., Ltd. (*2)(*18)
Force TEC Co., Ltd. (*6)(*15)
STX Corporation (*1)(*2)(*6)(*13)
Saman Corporation (*5)
Dongwoo C & C Co., Ltd. (*6)
SJCO Co., Ltd. (*6)
G2 Collection Co., Ltd. (*6)
The Base Enterprise Co., Ltd. (*6)
Heungjiwon Co., Ltd. (*6)(*17)
Kyesan Engineering Co., Ltd. (*6)
Good Software Lap Co., Ltd. (*6)
Wongwang Co., Ltd. (*6)
Manufacturing
Freight & staffing
services
Credit information
Security service
Construction
Construction
Manufacturing
Construction
Freight & staffing
services
Wholesale of non-
specialized goods
General construction
Technology service
Construction
Aggregate
transportation and
wholesale
Wholesale and retail
sales
Manufacturing
Other printing
Construction
Service
Wholesale and real
estate
14.2
4.9
9.9
15.0
25.3
29.4
29.2
-
-
19.7
9.2
23.2
26.5
28.9
48.4
-
23.2
28.9
29.0
14.2
September 30 (*3)
4.9
9.9
15.0
28.4
31.0
29.2
7.8
34.4
November 30 (*3)
December 31
November 30 (*3)
November 30 (*3)
September 30 (*3)
-
-
-
9.5
September 30 (*3)
9.2
23.2
September 30 (*3)
-
26.5
28.9
48.4
27.8
23.2
28.9
29.0
-
-
-
-
-
-
-
WOORI BANKANNUAL REPORT 2017
141
- 62 -
Joint ventures and Associates
Sejin Construction Co., Ltd. (*6)
Deokwon Food Co., Ltd. (*6)(*17)
QTS Shipping Co., Ltd. (*6)
DAEA SNC Co., Ltd. (*6)
ARES-TECH Co., Ltd. (*6)
Reading Doctors Co., Ltd. (*6)(*10)
PREXCO Co., Ltd. (*6)(*10)
Hyunwoo International Co., Ltd. (*6)(*10)
Jiwon Plating Co., Ltd. (*6)(*16)
Cultizm Korea LTD Co., Ltd. (*6)(*16)
Gil Co.,Ltd. (*6)(*16)
NK Eng Co., Ltd. (*6)(*10)
Woori Growth Partnerships New Technology
Main business
Construction
Poultry processing and
storage
Complex transportation
brokerage
Wholesale and retail
sales
Electronic component
manufacturing
Other service business
Manufacturing
Manufacturing
Plating
Wholesale and retail
sales
Manufacturing
Manufacturing
Percentage of
ownership (%)
December
31, 2017
29.6
December
31,2016
29.6
Financial
statements as of
December
31, 2017
-
-
49.4
24.0
23.4
35.4
28.1
25.9
20.5
31.3
26.1
23.1
27.3
49.4
24.0
23.4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Private Equity Fund
Other financial business
23.1
23.1
December 31
2016KIF-IMM Woori Bank Technology Venture
Fund
K BANK Co., Ltd. (*5)
Smart Private Equity Fund No.2 (*11)
Woori Bank-Company K Korea Movie Asset
Fund (*11)
Well to Sea No. 3 Private Equity Fund (*11)
Woori Private Equity Fund:
Other financial business
Finance
Other financial business
Other financial business
Finance
20.0
13.0
20.0
25.0
50.0
20.0
13.0
-
December 31
November 30 (*3)
December 31
-
-
December 31
September 30 (*3)
Woori Renaissance Holdings (*7)
Other financial business
Woori Private Equity Asset Management Co.,
Ltd.,:
Woori Columbus 1st Private Equity Fund (*8)
Other financial business
Woori Investment Bank Co., Ltd.
Nomura-Rifa Private Real Estate Investment
-
-
51.6
2.0
-
-
Trust No.17 (*11)
Other financial business
25.0
-
December 31
(*1) The Group has significant influence on 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 period: KRW
4,425, previous year: KRW 8,480), Chin Hung International Inc. (current period: KRW 1,915, previous year: KRW
2,090), STX Engine Co., Ltd. (current period: KRW 9,150, previous year: KRW 6,630), Samho International Co.,
Ltd. (previous year: KRW 16,900), STX Corporation. (previous year: KRW 1,660).
(*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 associates are with the Group as of December 31, 2017 and 2016.
(*5) The Group can participate in decision-making body and exercise significant influence over associates through
business partnerships.
(*6) The carrying values of investments in Reading Doctors Co., Ltd., PREXCO Co., Ltd., Hyunwoo International Co.,
Ltd., Jiwon Plating Co., Ltd., Cultizm Korea LTD Co., Ltd., Gil Co., Ltd. and NK Eng Co., Ltd. are nil as of
December 31, 2017 and those of investments in Force TEC Co., Ltd., STX Corporation and Deokwon Food Co.,
Ltd. are nil as of December 31, 2016. Furthermore, those of investments in Poonglim Industrial Co., Ltd., Dongwoo
C&C Co., Ltd., SJCO Co., Ltd., G2 collection Co., Ltd., The Base Enterprise Co., Ltd., Heungjiwon Co., Ltd.,
Kyesan Engineering Co., Ltd., Good Software Lab Co., Ltd., Wongwang Co., Ltd., Sejin Construction Co., Ltd.,
QTS Shipping Co., Ltd., DAEA SNC Co., Ltd. and ARES-TECH Co., Ltd. are nil as of both December 31, 2017
and 2016.
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(*7) The Group owns over 50% ownership as of December 31, 2016. 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. As of December 31, 2017 the entity has been excluded from the range of
associates as liquidated.
(*8) As a general partner of Woori Columbus 1st Private Equity Fund, the Group had 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. The Woori Columbus 1st Private Equity Fund has been removed from the list of associated companies as it
was liquidated during the current period.
(*9) Due to consolidation of stocks and debt-equity swap, the Group’s number of holding shares and ownership ratio
have decreased.
(*10) Even though the Group’s ownership ratio of the entity was more than 20% as of December 31, 2016, the Group did
not have significant influence over the entity due to the fact that the entity was going through workout process under
receivership, and thus the entity was excluded from the investment in associates. However, as the workout process
was completed during the years ended December 31, 2017, it has been included in the investment in associates.
(*11) Due to capital contribution by the Group during the years ended December 31, 2017, the entities were included in
the investment in associates.
(*12) The Group has sold a part of shares of the associates so the number of shares holding has decreased during the years
ended December 31, 2017.
(*13) Due to debt-equity swap capital stock, the Group ownership ratio have increased during the years ended December
31, 2017.
(*14) As the carrying amounts of certain investments in associates had been reduced to zero, the Group discontinued the
use of the equity method in accounting for those investments, and unrecognized losses due to the restricted
application of equity method amount to 16,344 million Won and 612 million Won as of December 31, 2017 and
2016, respectively.
(*15) Not in scope for the associates, because the Group does not have significant influence over the entity due to the fact
that it is going through workout process under receivership as of December 31, 2017.
(*16) Due to debt-equity swap, the entity was included in the investment in associates during the years ended December
31, 2017.
(*17) As the Group sold its entire ownership interest of the entities, it was exclude from the investment in associates
during the years ended December 31, 2017.
(*18) The entity was sold after it was transferred to assets held for sale and was excluded from the investment in
associates.
(*19) It has been removed from the list of associated companies as it was liquidated during the current period.
(*20) The shares of STX Engine Co., Ltd. owned by the Group were reclassified as assets held for sale, as the creditor
financial institutions committee entered into a contract with UAMCO.,Ltd during the current period to sell STX
Engine Co., Ltd. shares.
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- 64 -
(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):
Acquisiti-
on cost
January 1,
2017
Share of
profits
(losses)
Acquisi-
tion (*1)
Disposal
and others
(*2)
Dividends
Change in
capital
Impair-
ment
Others
(*1)
December
31, 2017
For the year ended December 31, 2017
Woori Blackstone Korea
Opportunity No.1
Private Equity Fund
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.
Smart Private Equity Fund
No.2
Woori Bank-Company K
Well to Sea No.3 Private
Equity Fund
Woori Renaissance Holdings
Nomura-Rifa Private Real
Estate Investment Trust
No.17
(7,369)
-
(3,303)
-
-
-
1,545 (102,842)
-
-
-
-
-
41,053
-
-
175,652
15,289
200,332
(4,617)
(102)
108
145
3,313
3,266
5,592
3,376
21
371
197
89,725
43,032
13,916
92,038
7,492
42,215
8,521
-
43,036
19,729
-
8,699
(14,375)
(6,733)
(1,010)
2,021
(29,788)
(733)
-
-
8,546
-
(46,217)
(16,354)
-
-
13,602
13,118
(582)
15,729
(498)
1,800
32,500
1,800
30,442
-
(11,381)
(68)
5,040
12,892
3,000
3,000
-
-
(43)
3,000
102,500
-
-
54,422
80,894
(622)
102,500
-
(508)
-
-
-
-
-
-
-
-
-
-
(8)
(147)
(54)
-
-
-
-
-
-
-
-
-
-
-
-
(57,109)
-
-
-
1,535
-
4,191
(73)
417
26
(156)
-
(245)
-
-
(577)
-
-
-
- 98,933
-
-
-
158
5,816
3,519
(26,144) 45,101
-
-
-
-
-
-
-
(5,323)
-
(6,738)
6,733
-
-
27,772
-
-
-
6,947
1,254
-
-
-
-
-
-
-
-
-
27,611
-
6,840
27 31,735
2,932
-
-
2,957
-
3,309
182,309
-
939
-
1,000
592,148
-
439,012
13,389
192,760
(70,946)
(60,621)
6,663 (114,903)
11,697 417,051
(61)
1,000
-
-
-
Korea Movie Asset Fund
1,500
(*1) Changes in investments in joint ventures and associates due to debt-equity swap is 51,227 million Won.
(*2) The Investments in Associates reclassified as assets held for sale amount to 62,571 million Won, of which
16,354 million Won was disposed of during the current period.
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WOORI BANKANNUAL REPORT 2017
144
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
- 65 -
Acquisiti-
on 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
43,917
175,652
56,044
214,050
10,093
(13,172)
108
139
18
3,313
5,291
436
3,266
3,711
(281)
172,441
89,725
13,916
92,038
7,492
42,215
15,405
8,521
800
187,592
43,936
5,313
51,276
14,325
4,251
10,985
8,521
-
3,265
(996)
(2,378)
(6,665)
5,392
(4,222)
(2,903)
252
(13)
-
-
-
-
-
(37,036)
(13,812)
-
-
-
-
-
(12)
(135)
(54)
-
-
-
-
-
-
-
-
800
(190,857)
-
-
-
-
-
(6,909)
-
(787)
-
-
-
-
-
-
-
-
-
-
13,602
-
(640) 13,602
-
1,800
32,500
63,000
1,200
780,911
-
-
37,121
1,306
643,861
-
1,800
(1,589) 32,500
-
17,303
-
48,702
3,857
(43)
-
-
-
(1,065)
(236,654)
-
-
(2)
(198)
(14,213)
-
(546)
-
-
-
-
92
(2,935)
(1,575)
12
(29)
-
(74)
-
156
-
(469)
-
-
(5,368)
-
-
-
-
-
-
-
-
-
-
-
(1,173)
-
-
-
-
-
-
-
(1,173)
15,289
200,332
145
5,592
3,376
-
43,032
-
43,036
19,729
-
-
8,699
-
13,118
1,800
30,442
54,422
-
439,012
(*1) The transfers from AFS financial assets to investments in associates to investments in associates amounted to
5,421 million Won 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.
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(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):
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 Corporation
Saman Corporation
Woori Growth Partnerships New Technology Private
Equity Fund
2016KIF-IMM Woori Bank Technology Venture Fund
K BANK Co., Ltd.
Smart Private Equity Fund No.2
Woori Bank-Company K Korea Movie Asset Fund
Well to Sea No.3 Private Equity Fund
Nomura-Rifa Private Real Estate Investment Trust
December 31, 2017
Assets
5,105,107
4,982
75,504
33,915
341,284
241,063
595,348
98,435
Liabilities
3,928,327
1,780
19,323
10,461
259,454
309,925
543,458
69,929
Operating
revenue
2,136,569
14,887
68,750
55,610
513,285
107,360
1,371,272
76,135
120,133
32,815
1,244,270
14,711
11,830
5,068,424
485
380
1,001,121
51
2
4,534,957
1,024
6
19,231
1
16
131,488
Net income
(loss)
(61,748)
1,003
3,580
1,071
28,698
(29,812)
342,869
(6,096)
(3,199)
(1,515)
(74,403)
(340)
(172)
162,743
No.17
20,265
16,507
62
(242)
Woori Blackstone Korea
Opportunity No.1 Private Equity Fund
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 1st Private Equity Fund
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
427
3,914,306
1,782
17,322
9,759
354,995
323,765
769,481
489,130
1,087,469
47,175
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
57,339
493
37
(2,177)
9,005
239,806
127,411
811
254
5,633
26,703
506
5
2,927
37,206
3,764
(250)
(12,222)
33,508
(450)
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- 67 -
(4) The entities that the Group has not applied equity method of accounting although the Group’s ownership
interest is more than 20% as of December 31, 2017 and 2016, are as follows:
Orient Shipyard Co., Ltd. (*)
Saenuel Co., Ltd. (*)
E Mirae Tech Co., Ltd. (*)
Jehin Trading Co., Ltd. (*)
The season Co., Ltd. (*)
Yuil PESC Co., Ltd. (*)
Youngdong Sea Food Co., Ltd. (*)
Sinseong Trading Co., Ltd. (*)
CL Tech Co., Ltd. (*)
Force TEC Co., Ltd. (*)
Protronics Co., Ltd. (*)
Instern Co., Ltd. (*)
As of December 31, 2017
Number of shares owned
Ownership (%)
465,050
3,531
7,696
81,610
18,187
8,642
12,106
2,584
13,759
4,780,907
95,921
14,296
21.4%
37.4%
41.0%
27.3%
30.1%
24.0%
24.0%
27.2%
38.6%
25.8%
48.1%
20.1%
(*) Even though the Group’s ownership interest of the entity is more than 20%, the Group does not have
significant influence over the entity since it is going through work-out process under receivership,
thus it is excluded from the investment in associates.
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. (*)
Youngdong Sea Food Co., Ltd. (*)
Sinseong Trading Co., Ltd. (*)
Reading Doctors Co., Ltd. (*)
PREXCO Co., Ltd. (*)
Hyunwoo International Co., Ltd. (*)
As of December 31, 2016
Number of shares owned
Ownership (%)
465,050
3,531
7,696
81,610
697,033
18,187
8,642
12,106
2,584
7,398
919,972
59,873
23.0%
37.4%
41.0%
27.3%
23.1%
30.1%
24.0%
24.0%
27.2%
35.4%
28.1%
25.9%
(*) Even though the Group’s ownership interest of the entity is more than 20%, the Group does not have
significant influence over the entity since it is going through work-out process under receivership,
thus it is excluded from the investment in associates.
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(5) As of December 31, 2017 and 2016, 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 follows (Unit: Korean Won in millions except for ownership):
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 Corporation
Saman Corporation
Woori Growth Partnerships New
Technology Private Equity Fund
2016KIF-IMM Woori Bank
Technology Venture Fund
K BANK Co., Ltd.
Smart Private Equity Fund No.2
Woori Bank-Company K Korea
Movie Asset Fund
Well to Sea No.3 Private Equity
Fund (*)
Total net
asset
1,065,421
3,202
56,181
23,454
81,686
(168,154)
51,890
28,506
Ownership
(%)
14.2
4.9
9.9
15.0
25.3
29.4
19.7
9.2
Net assets of
associates
(or joint
ventures)
As of December 31, 2017
Cost-book
value
differential
and others
48,459
-
248
-
24,565
54,542
24,614
5,373
150,767
158
5,568
3,519
20,671
(49,446)
10,232
2,619
-
-
-
-
(20,504)
(27,904)
(6,738)
Impairment
(102,843)
119,648
23.1
27,611
32,435
243,149
14,660
20.0
13.0
20.0
6,487
31,535
2,932
11,828
25.0
2,957
Intercompany
transaction
and others
2,549
-
-
-
(136)
15,408
5
-
Book
value
98,932
158
5,816
3,519
45,100
-
6,947
1,254
-
27,611
353
200
-
6,840
31,735
2,932
-
2,957
(57)
182,309
-
939
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Nomura-Rifa Private Real
Estate Investment Trust No.17
3,758
364,909
50.0
25.0
182,366
939
(*) The net asset amount is after reflecting debt-equity swap and others.
Total net
asset
Ownership
(%)
As of December 31, 2016
Net assets of
associates
(or joint
ventures)
Cost-book
value
differential
and others
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 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
Woori Columbus 1st Private Equity
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
Fund
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)
-
-
-
-
(6,441)
-
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
50
-
8,898
1,800
30,442
54,422
(6)
-
(*) The net asset amount is after reflecting preferred stocks and others.
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148
- 69 -
14. INVESTMENT PROPERTIES
(1)
Investment properties are as follows (Unit: Korean Won in millions):
Acquisition cost
Accumulated depreciation
Net carrying value
December 31, 2017
December 31, 2016
404,741
(33,440)
371,301
387,675
(29,178)
358,497
(2) Changes in investment properties are as follows (Unit: Korean Won in millions):
Beginning balance
Acquisition
Disposal
Depreciation
Transfer
Classified to assets held for sale
Foreign currencies translation adjustments
Others
Ending balance
For the year ended
December 31, 2017
For the year ended
December 31, 2016
358,497
9,872
(458)
(3,902)
2,472
(371)
(324)
5,515
371,301
351,496
4,428
-
(3,762)
6,314
-
21
-
358,497
(3) Fair value of investment properties is amounting to 396,587 million Won and 382,370 million Won as of
December 31, 2017 and 2016, 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.
(4) Rental fee earned from investment properties is amounting to 4,579 million Won and 5,027 million Won
for the year ended December 31, 2017 and 2016, respectively.
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Total
- 70 -
15. PREMISES AND EQUIPMENT
(1) Details of premises and equipment are as follows (Unit: Korean Won in millions):
Acquisition cost
Accumulated depreciation
Net carrying value
Acquisition cost
Accumulated depreciation
Net carrying value
Land
1,487,278
-
1,487,278
Building
867,804
(186,958)
680,846
Land
1,488,745
-
1,488,745
Building
855,332
(163,633)
691,699
Properties for
business use
1,024,186
(844,114)
180,072
December 31, 2017
Structures in
leased office
429,665
(364,878)
64,787
Construction
in progress Structures
64,559
-
64,559
20 3,873,512
(17) (1,395,967)
3 2,477,545
Properties for
business use
1,010,141
(820,239)
189,902
December 31, 2016
Structures in
leased office
424,562
(355,604)
68,958
Construction
in progress Structures
Total
18,717
-
18,717
20 3,797,517
(16) (1,339,492)
4 2,458,025
(2) Details of changes in premises and equipment are as follows (Unit: Korean Won in millions):
For the year ended December 31, 2017
Beginning balance
Acquisition
Disposal
Depreciation
Classified from(to)
assets held for sale
Transfer
Foreign currencies
translation adjustment
Others
Ending balance
Beginning balance
Acquisition
Disposal
Depreciation
Classified to assets held
for sale
Transfer
Foreign currencies
translation adjustment
Acquisition through
business combination
Others
Ending balance
Properties for
business use
Land
1,488,745
Building
4,755
(1,840)
-
691,699
22,579
(2,593)
(26,156)
189,902
59,694
(442)
(74,223)
(2,693)
(196)
(1,059)
(2,134)
549
5,411
(1,493)
-
1,487,278
(1,393)
(97)
680,846
(2,023)
1,204
180,072
Structures in
leased office
68,958
23,420
(1,231)
(31,728)
-
-
(1,315)
6,683
64,787
Construction
in progress Structures
Total
18,717
51,797
-
-
-
(5,553)
(402)
-
64,559
4 2,458,025
162,245
-
(6,106)
-
(132,108)
(1)
-
-
(3,203)
(2,472)
(6,626)
-
-
7,790
3 2,477,545
For the year ended December 31, 2016
Land
1,493,628
-
(30)
-
Building
704,017
15,939
(1,474)
(24,887)
Properties for
business use
193,291
74,336
(233)
(82,445)
Structures in
leased office
79,744
19,615
(2,623)
(48,587)
522
21,231
(102)
-
Construction
in progress Structures
Total
(4,063)
(1,415)
(251)
(1,557)
625
516
-
-
307
-
-
1,488,745
-
(604)
691,699
209
4,437
189,902
-
-
-
(3,087)
376
153
442
19,991
68,958
-
-
18,717
4 2,471,206
131,121
-
(4,462)
-
(155,919)
-
-
-
-
(4,314)
(6,059)
1,977
651
-
-
23,824
4 2,458,025
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- 71 -
16. INTANGIBLE ASSETS AND GOODWILL
(1) Details of intangible assets are as follows (Unit: Korean Won in millions):
December 31, 2017
Acquisition cost
Accumulated amortization
Accumulated impairment losses
Net carrying value
Acquisition cost
Accumulated amortization
Accumulated impairment losses
Net carrying value
Industrial
property
rights
Goodwill Software
108,707 203,418
- (162,746)
-
108,707
-
40,672
Development
cost
413,296
(182,846) (516,467)
(137)
Others
634,150
-
230,450
117,546
1,063
(524)
-
539
Membership
deposit
27,337
-
(6,652)
20,685
Total
1,387,971
(862,583)
(6,789)
518,599
December 31, 2016
Industrial
property
rights
714
(401)
-
313
Development
cost
Others
299,031 622,540
(160,335) (458,088)
(88)
-
138,696 164,364
Membership
deposit
26,884
-
(6,798)
20,086
Total
1,259,174
(768,549)
(6,886)
483,739
Goodwill Software
124,803 185,202
- (149,725)
-
124,803
35,477
-
(2) Details of changes in intangible assets are as follows (Unit: Korean Won in millions):
Beginning balance
Acquisition
Disposal
Amortization (*)
Impairment losses
Transfer
Foreign currencies translation
adjustment
Others
Ending balance
For the year ended December 31, 2017
Industrial
property
rights
Development
cost
138,696
122,849
-
Others
164,364
22,531
(37)
(22,534) (60,869)
(78)
-
(7,987)
-
313
349
-
(123)
-
-
Membership
deposit
Total
20,086 483,739
1,867 157,423
(981)
(944)
(99,784)
-
(237)
(159)
-
-
35,477
9,722
-
Goodwill Software
124,803
105
-
-
-
-
-
7,987
(16,258)
(16,201)
-
108,707
(952)
4,696
40,672
-
-
539
(483)
(91)
(2,742)
(5,623)
230,450
117,546
(160)
(5)
(20,538)
(1,023)
20,685 518,599
(*) Amortization of other intangible assets amounting to 48,292 million Won is included in other operating
expenses.
For the year ended December 31, 2016
Industrial
property
rights
Development
cost
Beginning balance
Acquisition
Disposal
Amortization
Impairment losses
Foreign currencies translation
adjustment
Acquisition through business
combination
Others
Ending balance
Goodwill Software
38,171
103,525
-
8,708
-
-
-
-
-
(15,795)
7,338
16
7,857
6,083
124,803
162
4,215
35,477
344
64
-
(95)
-
-
-
-
313
Others
51,357 201,769
92,969
30,842
-
(18,657)
-
(23)
(57,803)
3,230
Membership
deposit
Total
24,640 419,806
2,306 134,889
(3,808)
(3,785)
(92,350)
-
1,645
(1,585)
-
853
50
8,257
-
13,027
-
(14,504)
138,696 164,364
8,062
43
(1,583)
7,238
20,086 483,739
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- 72 -
17. ASSETS HELD FOR SALE
Assets held for sale are as follows (Unit: Korean Won in millions):
December 31, 2017
December 31, 2016
Investments in subsidiaries and
associates
Premises and equipment
Total
46,217
2,407
48,624
-
2,342
2,342
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 on time in
Collateral given to
local currency
Due from banks in local
currency
Due from banks in foreign
currencies
Financial assets at
FVTPL
Financial institutions debt
securities and others
AFS financial assets
Corporate bonds
Korean treasury and
government agencies bonds
and others
HTM financial assets Korean treasury and
government agencies bonds
Financial institutions debt
securities and others
Land and building
Premises and
equipment
December 31, 2017
Amount
Reason for collateral
Collaterals for issuing letter
of guarantee and others
Margin deposit for futures
6,629
10,809
or option
Foreign margin deposit for
9,136
future or option and others
Substitute securities and
501,523
others
Related to bonds sold under
Bank of China and others
Samsung Securities Co.,
Ltd. and others
Korea Investment &
Securities Co., Ltd. and
others
Yuanta Securities Co.,
Ltd. and others
Korea Securities
Depository and others
9,998
repurchase agreements (*)
The BOK and others
Korea Securities
Depository
1,570,608
Settlement risk and others
Related to bonds sold under
5,436
repurchase agreements (*)
The BOK and others
Credit Counselling &
Recovery Service and
others
Total
7,605,292
Settlement risk and others
6,186
9,725,617
Leasehold rights and others
(*) 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).
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- 73 -
Loan and receivables Due from banks in local
currency
Due from banks in foreign
currencies
Financial assets at
FVTPL
Financial institutions debt
securities and others
AFS financial assets
Korean treasury and
Collateral given to
Samsung Securities Co.,
Ltd. and others
Korea Investment &
December 31, 2016
Amount
Reason for collateral
Margin deposit for futures
and options and others
24,589
Securities Co., Ltd. and
others
Yuanta Securities Co.,
Foreign margin deposit for
227,249
future or option and others
Substitute securities and
Ltd. and others
Korea Securities
473,476
others
Related to bonds sold under
government agencies bonds
Depository and others
2,546,683
repurchase agreements (*)
Financial institutions debt
securities and others
HTM financial assets Korean treasury and
The BOK and others
Korea Securities
836,522
Settlement risk and others
Related to bonds sold under
government agencies bonds
Depository and others
7,133
repurchase agreements (*)
Korean treasury and
government agencies bonds
and others
Land and Building
Premises and
equipment
The BOK and others
Credit Counselling &
Recovery Service and
others
Total
6,185,295
Settlement risk and others
6,310
10,307,257
Leasehold rights and others
(*) 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 follows (Unit: Korean Won in
millions):
Land
Buildings
Personal properties not used in
business
Total
December 31, 2017 December 31, 2016
332
44
4,138
1,852
-
376
202
6,192
(3) Securities loaned are as follows (Unit: Korean Won in millions):
Financial assets
at FVTPL
AFS financial
assets
Korean Equity securities
Korean treasury and government
agencies bonds and others
December
31, 2017
December
31, 2016
-
4,459
Total
170,256
170,256
493,579
498,038
Loaned to
Samsung Securities
Co., Ltd. and others
Korea Securities
Finance Corporation
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.
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(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, 2017 and 2016 are as follows (Unit: Korean Won in millions):
December 31, 2017
Securities
Securities
Fair values of collaterals
Fair values of collaterals were
disposed or re-subjected to lien
-
17,671,490
December 31, 2016
Fair values of collaterals
Fair values of collaterals were
disposed or re-subjected to lien
-
8,746,101
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, 2017
December 31, 2016
130,245
18,363
376
9,420
158,404
111,445
1,944
6,192
9,265
128,846
20. FINANCIAL LIABILITIES AT FVTPL
Financial liabilities at FVTPL are composed of financial liabilities held for trading and financial liabilities
designated at FVTPL.
(1) Financial liabilities at FVTPL are as follows (Unit: Korean Won in millions):
Financial liabilities held for trading
Financial liabilities designated at FVTPL
Total
December 31, 2017
3,176,113
251,796
3,427,909
December 31, 2016
3,036,478
766,880
3,803,358
(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, 2017
December 31, 2016
25,964
3,150,149
3,176,113
26,501
3,009,977
3,036,478
(3) Financial liabilities designated at FVTPL are as follows (Unit: Korean Won in millions):
December 31, 2017
December 31, 2016
Equity linked securities index:
Equity linked securities index in short position
Debentures:
Debentures in local currency
Total
160,057
91,739
251,796
673,906
92,974
766,880
WOORI BANKANNUAL REPORT 2017
154
- 75 -
(4) Credit risk adjustments to financial liabilities designated at FVTPL is as follows (Unit: Korean Won in
millions):
Financial liabilities designated at FVTPL subject
to credit risk adjustments
Changes in fair value for credit risk adjustments
Accumulated changes in fair value for credit risk
adjustments
For the year ended December 31
2017
2016
251,796
(254)
133
766,880
(8)
349
Credit risk adjustments are applied to reflect the Group’s own credit risk when measuring financial
liabilities designated at FVTPL 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
21. DEPOSITS DUE TO CUSTOMERS
December 31, 2017
251,796
255,408
(3,612)
December 31, 2016
766,880
902,375
(135,495)
Details of deposits due to customers by type are as follows (Unit: Korean Won in millions):
Deposits in local currency:
Deposits on demand
Deposits at termination
Mutual installment
Deposits on notes payables
Deposits on CMA
Certificate of deposits
Other deposits
Sub-total
Deposits in foreign currencies
Present value discount
Total
December 31, 2017
December 31, 2016
9,349,070
194,292,679
34,055
1,323,679
164,431
4,436,443
1,451,841
211,052,198
23,682,896
(40,010)
234,695,084
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
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22. BORROWINGS AND DEBENTURES
(1) Details of borrowings are as follows (Unit: Korean Won in millions):
Borrowings in local currency:
Borrowings from The BOK
Borrowings from government funds
Others
Sub-total
Borrowings in foreign currencies:
Borrowings in foreign currencies
Offshore borrowings in foreign
currencies
Sub-total
Bills sold
Call money
Bonds sold under repurchase
agreements
Present value discount
Total
December 31, 2017
Lenders
Interest rate (%)
Amount
The BOK
Small Enterprise And Market Service
and others
The Korea Development Bank and
others
0.5 ~ 0.8
1,404,087
0.0 ~ 2.9
1,723,340
0.0 ~ 3.2
3,957,421
7,084,848
The Export-Import BOK and others
0.0 ~ 6.8
6,996,551
Commonwealth Bank
Others
Bank and others
Other financial institutions
1.8
0.0 ~ 1.2
1.5 ~ 2.7
0.6 ~ 12.7
28,285
7,024,836
36,953
635,061
3,173
(165)
14,784,706
December 31, 2016
Lenders
Interest rate (%)
Amount
Borrowings in local currency:
Borrowings from the BOK
Borrowings from government funds
The BOK
Small and Medium Business
Corporation and others
Others
Seoul Metropolitan Government and
others
0.5 ~ 0.8
1,598,553
0.0 ~ 3.5
1,534,807
0.0 ~ 3.8
3,922,878
7,056,238
Sub-total
Borrowings in foreign currencies:
Borrowings in foreign currencies
Offshore borrowings in foreign
currencies
Sub-total
Bills sold
Call money
Bonds sold under repurchase
agreements
Present value discount
Total
The Export-Import BOK and others
0.0 ~ 5.2
7,737,237
Wells Fargo
Others
Bank and others
Other financial institutions
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
(2) Details of debentures are as follows (Unit: Korean Won in millions):
December 31, 2017
December 31, 2016
Interest rate
(%)
Amount
Interest rate
(%)
Face value of bond(*):
Ordinary bonds
Subordinated bonds
Other bonds
Sub-total
Discounts on bond
Total
1.5 ~ 5.8
3.4 ~ 12.6
1.6 ~ 17.0
22,468,908 1.5 ~ 11.8
4,781,301 3.0 ~ 12.6
17.0
649,615
27,899,824
(30,173)
27,869,651
Amount
18,268,403
5,327,335
4,006
23,599,744
(34,295)
23,565,449
(*) Included debentures under fair value hedge relationships are 3,102,386 million Won and 3,610,193
million Won as of December 31, 2017 and 2016, respectively. Also, debentures under cash flow hedge
amounting to 699,029 million Won are included as of December 31, 2017
WOORI BANKANNUAL REPORT 2017
156
- 77 -
23. PROVISIONS
(1) Details of provisions are as follows (Unit: Korean Won in millions):
Asset retirement obligation
Provision for guarantee (*1)
Provisions for unused commitments
Provisions for customer reward credits
Other provisions (*2)
Total
December 31, 2017 December 31, 2016
58,076
238,117
87,909
22,093
22,282
428,477
61,872
183,247
66,115
40,445
58,791
410,470
(*1) Provision for guarantee includes provision for financial guarantee of 71,697 million Won and 67,557
million Won as of December 31, 2017 and 2016, respectively.
(*2) Other provisions consist of provision for litigation 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, 2017
Provision for
guarantees
238,117
4,876
(24,898)
(60,300)
9
Provision for
unused
commitments
87,909
2,028
(68)
(23,744)
(10)
-
25,443
183,247
-
-
66,115
Provisions for
customer
reward credits
22,093
62,593
(84,979)
-
-
21,808
18,930
40,445
Other
provisions
22,282
42,042
(8,014)
(77)
(249)
-
2,807
58,791
Total
370,401
111,539
(117,959)
(84,121)
(250)
21,808
47,180
348,598
(*) According to contracts with the third parties, the Group ultimately will be reimbursed for which it has
paid out on behalf of customers, which has incurred through their customer loyalty programs. Therefore,
when such obligation incurs, the Group recognizes it as “transfer”, but there is no impact on the Group’s
expense.
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
unused
commitments
85,313
8,502
22
(5,409)
Provisions for
customer
reward credits
Other
provisions
Total
5,445
23,525
(8,158)
-
22,581 477,480
44,342
8,034
(99,476)
(11,323)
(69,470)
-
-
-
(519)
87,909
-
503
778
22,093
2,990
-
-
2,990
503
14,032
22,282 370,401
Provision for
guarantees
364,141
4,281
(80,017)
(64,061)
-
-
13,773
238,117
(*) As the credits of the affiliates were transferred to the Group, the allowance for the provisions for
customer reward credits increased, for the year ended December 31, 2016.
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(3) Changes in asset retirement obligation are as follows (Unit: Korean Won in millions):
Beginning balance
Provisions provided
Provisions used
Amortization
Reversal of unused amount
Increase in asset retirement expense and others
Ending balance
24. NET DEFINED BENEFIT LIABILITY(ASSET)
For the year ended
December 31, 2017
For the year ended
December 31, 2016
58,076
2,225
(1,283)
428
(733)
3,159
61,872
39,121
2,034
(1,279)
464
(1)
17,737
58,076
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 blue chip corporate bonds earnings. A deficit
may occur if the rate of return of plan assets falls short of the
interest rate.
Decrease in profitability of blue
chip bonds
A decrease in profitability of blue chip bonds will be offset by
some increase in the value of debt securities that the employee
benefit plan owns but will bring an increase in the defined benefit
obligation.
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, 2017
December 31, 2016
1,071,170
(1,027,906)
43,264
984,381
(990,653)
(6,272)
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(2) Changes in the carrying value of defined benefit obligation are as follows (Unit: Korean Won in millions):
Beginning balance
Current service cost
Interest expense
Remeasurements
Foreign currencies translation adjustments
Retirement benefit paid
Curtailment or liquidation
Others
Ending balance
For the year ended
December 31, 2017
For the year ended
December 31, 2016
984,381
146,750
26,629
(20,389)
(279)
(55,552)
(10,928)
558
1,071,170
901,219
153,660
24,326
(52,402)
80
(34,346)
(9,536)
1,380
984,381
(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 liquidation
Others
Ending balance
For the year ended
December 31, 2017
For the year ended
December 31, 2016
990,653
30,601
(14,125)
43,114
(51,877)
(11,052)
40,592
1,027,906
801,528
25,038
(7,304)
226,752
(33,341)
(9,198)
(12,822)
990,653
(4) Plan assets wholly consist of time deposits as of December 31, 2017 and 2016, respectively. Among plan
assets, realized returns on plan assets amount to 16,476 million Won and 17,734 million Won for the year
ended December 31, 2017 and 2016, respectively.
Meanwhile, the contribution expected to be paid in the subsequent accounting year amounts to 125,818
million Won.
(5) Current service cost, net interest income, loss (gain) on the curtailment or liquidation 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 income
Loss (gain) on the curtailment or liquidation
Cost recognized in net income
For the years ended
December 31, 2017
For the years ended
December 31, 2016
153,660
(712)
(339)
152,609
146,750
(3,972)
124
142,902
Remeasurements(*)
Cost recognized in total comprehensive income
(6,264)
136,638
(45,098)
107,511
(*) This is an amount before considering the tax effects.
Retirement benefit service costs related to defined contribution plans are recognized 3,946 million Won and
3,747 million Won for the years ended December 31, 2017 and 2016, respectively.
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(6) Key actuarial assumptions used in defined benefit liability(asset) assessment are as follows:
Discount rate
Future wage growth rate
Mortality rate
Retirement rate
December 31, 2017
3.18%
6.18%
Issued by Korea Insurance
Development Institute
Experience rate for each
employment classification
December 31, 2016
2.85%
6.05%
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
December 31, 2017 December 31, 2016
(107,203)
125,395
124,766
(108,344)
(116,405)
137,151
136,707
(117,765)
25. OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES
Other financial liabilities and other liabilities are as follows (Unit: Korean Won in millions):
December 31, 2017
December 31, 2016
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
4,692,320
2,049,861
3,271,817
344,591
590,667
1,309,646
1,635,156
(1,597)
13,892,461
180,664
103,317
283,981
14,176,442
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
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26. DERIVATIVES
(1) Derivative assets and derivative liabilities are as follows (Unit: Korean Won in millions):
December 31, 2017
For cash
flow
hedge
Assets
For fair
value
hedge
For
trading
For cash
flow
hedge
Liabilities
For fair
value
hedge
For
trading
Nominal
amount
Interest rate:
Futures
Swaps
Purchase options
Written options
75,845
130,197,378
630,000
795,000
Currency:
Futures
Forwards
Swaps
Purchase options
Written options
Equity:
Futures
Swaps
Purchase options
Written options
Others:
318,217
72,526,956
48,176,306
2,291,154
4,038,237
91,436
15,000
5,060,706
4,504,290
Futures
Swaps
Purchase options
Written options
Total
-
7,805
-
5,000
268,733,330
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
59,272 223,935
12,346
-
-
-
-
-
-
-
-
-
12,103 253,972
-
12,869
-
-
-
-
- 1,314,368
- 1,352,924
64,267
-
-
-
-
-
55,651
-
-
-
-
-
103
- 146,775
-
-
-
-
-
-
-
-
- 1,375,799
- 1,347,905
-
-
58,687
-
-
-
-
-
-
10
-
99,770
-
-
-
-
-
1,056
-
-
59,272 3,115,775
-
-
-
-
55,651
-
-
-
-
-
1,037
-
100
12,103 3,150,149
December 31, 2016
Assets
Liabilities
Notional
amount
For fair value
hedge
For trading
For fair value
hedge
For trading
Interest rate:
Futures
Swaps
Purchase options
Written options
Currency:
Futures
Forwards
Swaps
Purchase options
Written options
Equity:
Futures
Swaps
Purchase options
Written options
Others:
Futures
Swaps
Purchase options
Written options
Total
54,785
118,582,511
860,000
1,035,000
-
139,832
-
-
-
470,057
21,172
-
-
1,265,852
1,022,969
42,126
-
-
92
73,261
-
-
-
-
-
-
-
-
745
-
-
-
-
-
140,577
-
2,645
121
-
2,898,295
-
7,013
-
-
-
509,686
-
21,863
-
-
-
-
-
-
1,015,380
1,221,959
-
8,589
-
-
-
208
-
-
-
-
7,221
-
88
-
228,900
-
2,331
-
1,181
3,009,977
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
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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):
Gains from hedged items
Losses from hedging instruments
For the year ended December 31
2016
2017
110,152
(109,447)
98,827
(98,851)
Meanwhile, the maximum period that the Group is exposed to cash flow risk arising from the hedging
transaction discussed above will be terminated by February 2021.
Among gain (loss) on valuation of derivatives that was included in the accumulated other comprehensive
income, the amount has been reclassified to loss is 56,676 million Won, before reduction of income tax
effect during the year ended December 31, 2017.
27. DEFERRED DAY 1 PROFITS OR LOSSES
Changes in deferred day 1 profits or losses are as follows (Unit: Korean Won in millions):
Beginning balance
New transactions
Amounts recognized in profits or losses
Ending balance
For the year ended December 31
2016
2017
13,422
500
(6,506)
7,416
28,008
1,337
(15,923)
13,422
In case some variables to measure fair values of financial instruments are not observable or available in the
market, valuation techniques are utilized to evaluate such financial instruments. Those financial instruments are
recorded at the fair value produced by the valuation techniques as at the time of acquisition, even though there
are difference noted between the transaction price and the fair value. The table above presents the difference yet
to be realized as profit or losses.
28. CAPITAL STOCK AND CAPITAL SURPLUS
(1) The number of authorized shares and others are as follows:
December 31, 2017
Authorized shares of common stock
Par value
Issued shares of common stock
Capital stock
5,000,000,000 Shares
5,000 Won
676,000,000 Shares
3,381,392 million Won
December 31, 2016
5,000,000,000 Shares
5,000 Won
676,000,000 Shares
3,381,392 million Won
(2) There is no change to be disclosed in numbers of issued and outstanding shares of common stock for the year
ended December 31, 2017 and 2016.
(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, 2017
December 31, 2016
269,533
16,347
285,880
269,533
16,798
286,331
WOORI BANKANNUAL REPORT 2017
162
- 83 -
29. HYBRID SECURITIES
The bond-type hybrid securities classified as owner’s equity are as follows (Unit: Korean Won in millions):
Issue date
June 20, 2008
March 8, 2012
April 25, 2013
November 13, 2013 November 13, 2043
December 12, 2014 December 12, 2044
Maturity
June 20, 2038
March 8, 2042
April 25, 2043
June 3, 2015
May 2, 2007
June 10, 2015
September 27, 2016
May 16, 2017
June 3, 2045
May 2, 2037
June 10, 2045
-
-
Interest rate
(%)
7.7
5.8
4.4
5.7
5.2
4.4
6.2
5.0
4.5
5.3
Securities in local
currency
Securities in
foreign
currencies
Issuance cost
Total
December
31, 2017
December
31, 2016
255,000
190,000
500,000
200,000
160,000
240,000
930,900
559,650
553,450
-
(14,104)
3,017,888 3,574,896
255,000
-
500,000
200,000
160,000
240,000
-
559,650
553,450
562,700
(12,912)
The hybrid securities mentioned above are either without a maturity date or its maturity can be extended
indefinitely at the maturity date without change of terms. Further, if a resolution is passed not to pay
dividends on common stock, interest payments on the hybrid securities may be skipped.
30. OTHER EQUITY
(1) Details of other equity are as follows (Unit: Korean Won in millions):
Accumulated other comprehensive income:
Gain on valuation of available-for-sale financial
assets
Share of other comprehensive loss of joint ventures
and associates
Loss on foreign currency translation of foreign
operations
Remeasurement loss related to defined benefit plan
Gain on valuation of cash flow hedges
Equity related to non-current assets held for sale
Sub-total
Treasury shares
Other capital adjustments
Total
December 31, 2017
December 31, 2016
301,930
386,981
(1,251)
(1,863)
(242,700)
(152,624)
777
4,145
(89,723)
(34,113)
(1,815,438)
(1,939,274)
(48,353)
(163,397)
-
-
173,368
(34,113)
(1,607,280)
(1,468,025)
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(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
Loss on foreign currency
translation of foreign
operations
Remeasurement gain (loss)
related to defined benefit plan
Gain (loss) on valuation of cash
flow hedges
Transfer to non-current assets
held for sale
Total
For the year ended December 31, 2017
Beginning
balance
Increase
(decrease)(*)
Reclassif-
ication
adjustments(*)
Income tax
effect
Ending
balance
386,981
80,997
(164,803)
(1,245)
301,930
(1,863)
2,516
(48,353)
(193,272)
6,216
1,025
(163,397)
-
-
173,368
-
-
-
-
(1,904)
(1,251)
(1,075)
(242,700)
4,557
(152,624)
(248)
777
4,145
(98,373)
-
(164,803)
-
85
4,145
(89,723)
(*) For the change in gain (loss) on valuation of AFS financial assets, “increase (decrease)” represents
change due to the valuation during the period, and “reclassification adjustments” explains disposal or
recognition of impairment losses on AFS financial assets.
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 gain (loss)
related to defined benefit plan
Gain (loss) on valuation of cash
flow hedges
Total
For the year ended December 31, 2016
Beginning
balance
Increase
(decrease)(*)
Reclassif-
Ication
adjustments(*)
Income tax
effect
Ending
balance
374,685
114,617
(101,647)
(674)
386,981
6,074
(9,274)
(70,789)
30,368
(197,579)
45,096
(10,371)
102,020
10,371
191,178
1,337
(1,863)
(7,932)
(48,353)
(10,914)
(163,397)
-
-
-
-
(101,647)
(18,183)
-
-
173,368
(*) For the change in gain (loss) on valuation of AFS financial assets, “increase (decrease)” represents
change due to the valuation during the period, and “reclassification adjustments” explains disposal or
recognition of impairment losses on AFS financial assets.
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31. RETAINED EARNINGS
(1) Details of retained earnings are as follows (Unit: Korean Won in millions):
Legal reserve Earned surplus reserve
Other legal reserve
Voluntary
reserve
Sub-total
Business rationalization reserve
Reserve for financial structure improvement
Additional reserve
Regulatory reserve for credit loss
Revaluation reserve
Other voluntary reserve
Sub-total
Retained earnings before appropriation
Total
i. Earned surplus reserve
December 31, 2017 December 31, 2016
1,622,754
44,634
1,667,388
8,000
235,400
7,073,104
2,255,252
753,908
11,700
10,337,364
2,606,814
14,611,566
1,729,754
45,668
1,775,422
8,000
235,400
7,418,806
2,438,191
751,964
11,700
10,864,061
2,980,523
15,620,006
In accordance with the Banking Act, earned surplus 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
10 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
Additional reserve was 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 short fall amount as regulatory reserve for credit loss.
vii. Revaluation reserve
Revaluation reserve is the amount of limited dividends set by the board of directors to be the recognized as
complementary capital when the gain or loss occurred in the property revaluation by adopting K-IFRS.
WOORI BANKANNUAL REPORT 2017
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- 86 -
(2) Changes in retained earnings are as follows (Unit: Korean Won in millions):
Beginning balance
Net attributable to owners
Dividends on common stock
Dividends on hybrid securities
Repayment of hybrid securities
Ending balance
For the year ended December 31
2017
14,611,566
1,512,148
(336,636)
(167,072)
-
15,620,006
2016
13,726,122
1,261,266
(168,317)
(206,515)
(990)
14,611,566
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
December 31, 2017
2,438,191
December 31, 2016
2,255,252
140,266
2,578,457
182,939
2,438,191
(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 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)
For the years ended December 31
2017
2016
1,530,088
140,266
1,389,822
1,817
1,277,533
182,939
1,094,594
1,320
33. DIVIDENDS
The Bank’s dividends for the year ended December 31, 2017 and 2016 are 500 Won and 400 Won per share,
respectively, and total dividend payments amount to 336,636 million Won and 269,308 million Won,
respectively. Dividends for the current period will be brought up as an agenda in the annual shareholders’
meeting scheduled on March 23, 2018.
Meanwhile, the Bank paid out 67,328 million Won (100 Won per share) as an interim dividend during the year
ended December 31, 2017.
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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
2016
2017
53,348
239,030
307,965
83,325
7,835,957
31,062
7,950,344
8,550,687
63,408
339,518
360,054
75,021
7,635,791
38,520
7,749,332
8,512,312
(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
2016
2017
2,380,263
238,212
638,653
72,909
3,330,037
2,547,142
215,240
619,255
111,131
3,492,768
35. NET FEES AND COMMISSIONS INCOME
(1) Details of 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
2017
2016
673,582
660,556
65,779
13,394
1,072,423
80,872
163,148
2,069,198
66,549
20,213
954,502
70,928
92,722
1,865,470
(*) Fees and commissions received include fees income from agency commission, fees income from
electronic finance, fees income related to loan, fees for import letter of credit dealing, commission
received on foreign exchange and others.
(2) Details of fees and commissions expense incurred are as follows (Unit: Korean Won in millions):
Fees and commissions paid
Credit card commissions
Brokerage commissions
Others
Total
For the years ended December 31
2017
2016
164,834
828,363
558
4,977
998,732
162,170
760,913
739
4,517
928,339
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36. DIVIDEND INCOME
Details of 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
2017
446
124,546
124,992
2016
996
183,514
184,510
37. GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FVTPL
(1) Details of gains or losses related to financial instruments at FVTPL are as follows (Unit: Korean Won in
millions):
Gains on financial assets held for trading
Losses of financial assets designated at FVTPL
Total
For the years ended December 31
2017
6,123
(110,950)
(104,827)
2016
185,786
(71,399)
114,387
(2) Gains (losses) on financial instruments held for trading are as follows (Unit: Korean Won in millions):
Financial
Securities
instruments held
for trading
Gain on valuation
Gain on disposals
For the years ended December 31
2017
2,764
2016
9,323
Other financial
assets
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 instruments
held for trading
Derivatives
(for trading)
Interest rates
derivatives
Currencies
derivatives
Equity
derivatives
Gain on transactions
and valuation
Loss on transactions
and valuation
Sub-total
Gain on transactions
and valuation
Loss on transactions
and valuation
Sub-total
Gain on transactions
and valuation
Loss on transactions
and valuation
Sub-total
20,528
(13,757)
(6,466)
3,069
6,524
2,353
(7,885)
(619)
373
24,509
(12,681)
(11,524)
9,627
13,628
2,404
(14,033)
(1,644)
355
3,442
9,982
1,088,192
1,423,606
(1,043,312)
44,880
(1,401,582)
22,024
7,253,426
5,804,420
(7,408,741)
(155,315)
(5,683,357)
121,063
511,220
293,657
(397,462)
113,758
(259,280)
34,377
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Derivatives
(for trading)
Other
derivatives
Gain on transactions
and valuation
For the years ended December 31
4,056
50,139
Loss on transactions
and valuation
Sub-total
Total of derivatives(for trading)
Total
(4,698)
(642)
2,681
6,123
(51,799)
(1,660)
175,804
185,786
(3) Gains (losses) on financial instruments designated at FVTPL are as follows (Unit: Korean Won in
millions):
Loss on equity-linked securities
Loss on disposals of equity-linked securities
Loss on valuation of equity-linked securities
Sub-total
Gain on other securities:
Gain on disposals of other securities
Gain on valuation of other securities
Sub-total
Gain on other financial instruments:
Gain on valuation of other financial instruments
Total
For the years ended December 31
2017
2016
(79,965)
(32,511)
(112,476)
-
290
290
1,236
(110,950)
(24,165)
(52,007)
(76,172)
14
882
896
3,877
(71,399)
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
2016
2017
47
223,961
(31,300)
192,708
721
47,985
(49,741)
(1,035)
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
Reversal of provision on (provision for) loan
commitment
Total
For the years ended December 31
2017
(862,273)
55,424
21,716
(785,133)
2016
(890,763)
59,780
(3,093)
(833,076)
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40. GENERAL ADMINISTRATIVE EXPENSES AND OTHER NET OPERATING INCOME (EXPENSES)
(1) General and 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
2017
2016
1,317,826
559,562
146,848
299,562
2,323,798
183,601
313,080
111,248
198,828
70,936
65,015
43,850
68,942
8,633
13,064
6,795
8,548
27,516
16,081
14,165
9,902
46,799
1,023,402
3,530,801
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
(2) Other operating income recognized is as follows (Unit: Korean Won in millions):
Gains on transaction of foreign exchange
Gains on disposal of loans and receivables
Gains related to derivatives
Gains on fair value hedged items
Others (*)
Total
For the years ended December 31
2017
2016
3,391,095
205,490
122
53,532
86,159
3,736,398
4,791,772
204,239
130
99,302
112,079
5,207,522
(*) Other income includes such incomes amounting to 29,336 million Won and 74,700 million Won for the year ended
December, 2017 and 2016, 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
2017
2016
2,886,535
304,055
286,000
9,221
109,569
-
172,331
3,767,711
4,706,055
298,804
295,601
4,265
98,981
475
171,120
5,575,301
(*) For the year ended December 31, 2017 and 2016, other expense includes losses amounting to 5,237
million Won and 109,063 million Won respectively, which are related to the Group’s expected payments to
other creditor financial institutions in accordance with the creditor financial institutions committee
agreement. In addition, other expense for the year ended December 31, 2017 includes 48,292 million Won of
intangible asset amortization expense.
WOORI BANKANNUAL REPORT 2017
170
- 91 -
41. OTHER NON-OPERATING INCOME (EXPENSES)
(1) Details of gains or losses 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
2017
2016
83,506
(70,117)
(114,903)
(101,514)
36,757
(55,091)
(1,173)
(19,507)
(2) Other non-operating income and expenses recognized are as follows (Unit: Korean Won in millions):
Other non-operating income
Other non-operating expenses
Total
For the years ended December 31
2017
2016
84,361
(190,083)
(105,722)
132,272
(133,582)
(1,310)
(3) Other non-operating income 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
2017
2016
6,973
39,932
5,028
666
31,762
84,361
7,291
23,457
1,885
3,581
96,058
132,272
(4) Other non-operating expenses recognized are as follows (Unit: Korean Won in millions):
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
For the years ended December 31
2017
2016
3,902
459
38,713
9,994
390
98,132
38,493
190,083
3,762
496
15,060
9,718
1,936
43,939
58,671
133,582
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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 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
2017
2016
471,669
(5,209)
466,460
(47,464)
422
(47,042)
419,418
332,996
(22,138)
310,858
(18,766)
(16,236)
(35,002)
275,856
(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
2017
1,949,506
471,318
2016
1,553,389
375,458
(55,983)
(75,166)
22,254
13,664
(5,209)
(12,962)
(51,900)
419,418
21.5%
(22,138)
(15,962)
(99,602)
275,856
17.8%
(*) The applicable income tax rate; 1) 11% for below 200 million Won, 2) 22% for above 200 million Won
and below 20 billion Won, 3) 24.2% for above 20 billion Won.
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(3) Deferred tax charged direct to equity is as follows (Unit: Korean Won in millions):
For the year ended December 31, 2017
Recognized as
other
comprehensive
income
(expense)
Recognized as
income
(expense)
Ending
balance
72,945
(1,008)
479,065
Beginning
balance
407,128
32,859
(43,818)
(69,959)
(46,811)
53,915
(108,102)
225,045
(226,321)
41,138
32,392
(87,479)
209,987
(6,473)
33,806
8,972
(886)
(44,138)
(29,218)
54,533
(61,012)
(10,536)
12,761
16,289
47,043
(1,904)
(248)
-
-
-
-
4,656
-
-
-
(1,075)
421
24,482
(10,260)
(60,987)
(47,697)
9,777
(137,320)
284,234
(287,333)
30,602
45,153
(72,265)
257,451
Gain (loss) on 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
(*) Among the deferred tax assets and liabilities classified as ‘Others,’ the deferred tax asset arising from
accumulated deficit amounts to 15,652 million Won.
For the year ended December 31, 2016
Beginning
balance
Recognized as
income
(expense)
Recognized as
other
comprehensive
income
(expense)
Ending
balance
324,193
(18,467)
(666)
305,060
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)
32,943
(43,853)
(69,960)
(46,811)
53,915
(108,102)
225,045
(226,321)
41,138
32,392
14,538
209,984
Gain (loss) on financial assets
Gain 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
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(4) Unrealizable temporary differences are as follows (Unit: Korean Won in millions):
Deductible temporary differences
Unused tax losses
Taxable temporary differences
Total
December 31, 2017
126,818
96,135
(1,298,586)
(1,075,633)
December 31, 2016
59,803
192,138
(1,263,200)
(1,011,259)
(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 gain (loss) of joint ventures
and associates
Gain on foreign operations translation
Remeasurements
Loss on valuation of cash flow hedges
Total
December 31, 2017
(114,169)
December 31, 2016
(113,161)
(954)
15,855
56,317
(248)
(43,199)
950
16,930
51,661
-
(43,620)
(6) Current tax assets and liabilities are as follows (Unit: Korean Won in millions):
December 31, 2017
4,722
232,600
December 31, 2016
6,229
171,192
Current tax assets
Current tax liabilities
43. EARNINGS PER SHARE (“EPS”)
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
2017
2016
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 (Unit : Korean won)
1,512,148
(167,072)
1,345,076
673 million shares
1,999
1,261,266
(206,515)
1,054,751
673 million shares
1,567
Diluted EPS is equal to basic EPS because there is no dilution effect for the year ended December 31, 2017
and 2016.
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44. CONTINGENT LIABILITIES AND COMMITMENTS
(1) Details of guarantees are as follows (Unit: Korean Won in millions):
Confirmed guarantees
Guarantee for loans
Acceptances
Guarantees in acceptances of imported goods
Other confirmed guarantees
Total
Unconfirmed guarantees
Local letter of credit
Letter of credit
Other unconfirmed guarantees
Total
Commercial paper purchase commitments and others
December 31, 2017 December 31, 2016
157,299
320,519
108,238
6,288,965
6,875,021
383,117
3,637,787
505,689
4,526,593
1,458,101
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
(2) Details of loan commitments and others are as follows (Unit: Korean Won in millions):
Loan commitments
Other commitments
(3) Litigation case
December 31, 2017
80,760,325
4,546,090
December 31, 2016
83,795,496
4,840,593
The Group had filed lawsuits as follows (Unit: Korean Won in millions except for number of cases):
Number of cases
Amount of litigation
Provisions for litigations
(4) Other
December 31, 2017
December 31, 2016
As plaintiff
83 cases
413,267
As defendant As plaintiff
88 cases
308,848
155 cases
244,767
9,277
As defendant
175 cases
246,465
5,946
The Group provides clearance services for payments in Korean Won in order to facilitate trade transactions
between Korea and Iran. In connection with these services, the Group is currently being investigated by US
government agencies including US prosecutors(United States Attorney’s Office and New York State
Attorney General’s Office) as to whether the Group has violated United States laws by participating in
prohibited transactions involving countries sanctioned by the US. The Group has decided not to disclose the
required disclosures stated in K-IFRS 1037 ‘Provisions, Contingent Liabilities and Contingent Assets’ as
such information may adversely affect the current investigation against the Group.
45. RELATED PARTY TRANSACTIONS
Related parties of the Group as of December 31, 2017 and its assets and liabilities recognized as of December
31, 2017 and 2016 and major transactions with related parties for the years ended December 31, 2017 and 2016
are as follows:
(1) Related parties
Associates
Related parties
Kumho Tires 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, STX Corporation, 2016KIF-IMM Woori Bank Technology Venture
Fund, K BANK Co., Ltd., Well to Sea No. 3 Private Equity Fund, and Others (Dongwoo C & C
Co., Ltd. and other 22 associates)
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(2) Assets and liabilities from transactions with related parties are as follows (Unit: Korean Won in millions):
Related party
KDIC (*1)
Corporation that have
significant influence
over the Group
Associates
Kumho Tires Co., Inc.
A title of account
Loans
Other assets
Deposits due to customers
Other liabilities
Loans
Allowance for credit loss
Deposits due to customers
Other liabilities
December 31,
2017
December 31,
2016
-
-
-
-
170,917
(156,712)
666
50
9
270,041
1,894,631
15,568
299,523
(715)
45,957
50
Woori Blackstone Korea
Opportunity Private Equity
Fund No.1
Other assets
Other liabilities
Woori Service Networks Co.,
Ltd.
Loans
Deposits due to customers
Other liabilities
Korea Credit Bureau Co., Ltd. Loans
Associates
Korea Finance Security Co.,
Ltd.
Chin Hung International Inc.
Deposits due to customers
Other liabilities
Loans
Deposits due to customers
Other liabilities
Loans
Allowance for credit loss
Deposits due to customers
Other liabilities
-
-
45
1,311
357
6
5,586
54
56
2,854
7
34
306
29
2,572
393
2
5,069
40
55
2,801
6
408
(22)
46,220
1,658
4,320
(4,287)
14,047
279
Poonglim Industrial Co., Ltd.
Deposits due to customers
4
283
STX Engine Co., Ltd.
Samho International Co.,
Ltd.(*2)
STX Corporation
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
K BANK Co., Ltd.
Loans
Other assets
Well to Sea No.3 Private
Equity Fund (*3)
Others (*4)
Loans
Allowance for credit loss
Deposits due to customers
Other liabilities
Loans
Allowance for credit loss
Other assets
Deposits due to customers
Other liabilities
106,176
(88,734)
18,092
29
-
-
-
-
47,711
(31,210)
77,555
80
212
-
73,810
(39)
61
27
499
(471)
1
2,906
73
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
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(*1) As its ownership interest in the Group is lower than 20% as of December 31, 2017, it has been excluded from the
corporation that have significant influence over the Group.
(*2) As the Group sold its entire ownership interest of the entity, it is excluded from the investment in associates
during the years ended December 31, 2017.
(*3) Due to capital contribution by the Group during the years ended December 31, 2017, the entity was included in
the investment in associates.
(*4) Others include Saman Corporation, Kyesan Engineering Co., Ltd., Hyunwoo International Co., Ltd., DAEA SNC
Co., Ltd. and others as of December 31, 2017 and 2016.
(3) Gain or loss from transactions with related parties are as follows (Unit: Korean Won in millions):
Related party
Corporation that has
significant influence
over the group
KDIC(*1)
Associates
Kumho Tires Co., Inc.
Woori Blackstone Korea
Opportunity Private
Equity Fund No.1
Woori Service Networks
Co., Ltd.
A title of account
Interest income
Interest expenses
Interest income
Fees income
Interest expenses
Impairment losses due to
credit loss
Fees income
Other income
Interest expenses
Fees expenses
Other expenses
Korea Credit Bureau Co.,
Ltd.
Interest expenses
Fees expenses
Korea Finance Security Co.,
Ltd.
Interest expenses
Fees expenses
Chin Hung International Inc. Interest income
Poonglim Industrial Co.,
Ltd.
STX Engine Co., Ltd.
Samho International Co.,
Ltd. (*2)
Fees income
Interest expenses
Reversal of impairment
losses due to credit loss
Interest expenses
Reversal of impairment
losses due to credit loss
Interest income
Fees income
Interest expenses
Impairment losses due to
credit loss (reversal)
Interest income
Fees income
Interest expenses
Reversal of impairment
losses due to credit loss
Force TEC Co., Ltd. (*3)
Interest income
For the years ended
December 31
2017
-
15,331
2016
11,778
20,966
2,641
5
1
155,997
2,430
6
68
162
6,225
1,364
30
24
543
507
82
2,079
12
-
364
1
27
29
49
985
222
138
1,915
10
110
240
1
28
(4,265)
(481)
-
-
1,417
28
147
2
(1,557)
1,348
58
97
(797)
63,866
486
5
334
916
5
525
(717)
(5,166)
-
153
WOORI BANKANNUAL REPORT 2017
177
Related party
STX Corporation
Associates
Osung LST Co., Ltd. (*4)
- 98 -
A title of account
Interest income
Fees income
Interest expenses
Impairment losses due to
credit loss (reversal)
Interest income
Interest expenses
Reversal of allowance for
credit loss
Woori Columbus 1st Private
Fees income
Equity Fund
K BANK Co., Ltd. (*5)
Fees income
Other income
Well to Sea No.3
Private Equity Fund (*6)
Others (*7)
Interest incomes
Interest expenses
Impairment losses due to
credit loss
Interest expenses
Impairment losses due to
credit loss
For the years ended
December 31
2017
2016
219
30
4
1,039
75
7
(61,432)
73,457
-
-
-
272
-
1,051
982
4
39
13
218
170
1
(338)
308
296
1,638
-
-
-
17
253
(*1) As its ownership interest in the Group is lower than 20% as of December 31, 2017, it has been exclude from the
corporation that have significant influence over the Group.
(*2) As the Group sold its entire ownership interest of the entity, it is excluded from the investment in associates
during the years ended December 31, 2017.
(*3) The entity is not in scope for the associates, because the Group does not have significant influence over the entity
due to the fact that it is going through workout process under receivership as of December 31, 2017.
(*4) 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.
(*5) Due to capital contribution during the year ended December 31, 2016, the entity has been included in the
investment in associates.
(*6) Due to capital contribution by the Group during the year ended December 31, 2017, the entity was included in the
investment in associates.
(*7) Others include Saman Corporation, Kyesan Engineering Co., Ltd., Hyunwoo International Co., Ltd., DAEA SNC
Co., Ltd. and others as of December 31, 2017, and Saman Corporation, Kyesan Engineering Co., Ltd., Gachi
Staff Co., Ltd., QTS Shipping Co., Ltd., and others were included as of December 31, 2016, respectively.
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(4) Guarantees provided to the related parties are as follows (Unit: Korean Won in millions):
KDIC (*1)
Kumho Tires Co., Inc.
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. (*2)
STX corporation
December 31, 2017
December 31, 2016
-
1,500,000 Loan commitment
4,181
636
204
29
155
31,891
68,858
-
-
17,557
53
Letter of credit and others
24,187
126,435 Loan commitment
205 Loan commitment
33 Loan commitment
171 Loan commitment
40,904 Loan commitment
63,103 Letter of credit and others
685 Loan commitment
30,083 Loan commitment
24,316 Letter of credit and others
71 Loan commitment
Well to Sea No.3 Private Equity Fund
(*3)
236,190
-
Loan commitment
(*1) As its ownership interest in the Group is lower than 20% as of December 31, 2017, it has been exclude from the
corporation that have significant influence over the Group.
(*2) As the Group sold its entire ownership interest of the entities during the year ended December 31, 2017, they are
excluded from the investment in associates.
(*3) Due to capital contribution by the Group during the year ended December 31, 2017, the entity was included in
the investment in associates.
For the guarantee provided to the related parties, the Group recognized provisions for guarantees
amounting to 71,459 million Won and 70,587 million Won, as of December 31, 2017 and 2016,
respectively.
(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
2017
2016
12,024
472
12,496
9,523
424
9,947
Key management includes registered executives and non-registered executives. Outstanding assets and liabilities
from transactions with key management amount to 2,439 million Won and 6,309 million Won, respectively, as
of December 31, 2017. With respect to the assets, the Group has not recognized any allowance, nor provision.
46. TRUST ACCOUNTS
(1) Trust accounts of the Group are as follows (Unit: Korean Won in millions):
Total assets
Operating income
Trust accounts
December 31,
2017
43,895,511
December 31,
2016
38,807,666
For the year ended
December 31, 2017
1,029,501
For the year ended
December 31, 2016
751,691
(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
Deposits due to customers
Borrowings from trust accounts
Total
December 31, 2017
December 31, 2016
25,286
23,667
585,832
2,711,529
3,297,361
1,919,324
2,687,776
4,607,100
WOORI BANKANNUAL REPORT 2017
179
- 100 -
(3) Significant transactions between the Group and trust accounts are as follows (Unit: Korean Won in
millions):
Revenue
Trust fees
Expense
Interest expenses on deposits due
to customers
Interest expenses on borrowings
from trust accounts
Total
For the years ended December 31
2017
2016
141,999
78,616
17,768
31,956
49,724
47,604
45,012
92,616
(4) Principal guaranteed trusts and principal and fixed rate of return guaranteed trusts
1) As of December 31, 2017 and 2016, 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, 2017
December 31, 2016
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
4,058
530,556
791,920
50,035
8,563
2,467
1,387,599
19
801
820
1,388,419
4,513
532,959
741,759
53,773
8,536
2,919
1,344,459
19
787
806
1,345,265
2) As of December 31, 2017 and 2016, the amounts that the Group has to pay by the capital guaranteed
contract or the operating results of the principal and return guaranteed trusts are as follows (Unit:
Korean Won in millions):
Liabilities for the account
(subsidy for trust account adjustment)
December 31, 2017
December 31, 2016
32
30
179179
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017
180180
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
180
Organizational Chart
3 unit 18 Groups 4 Divisions 65 Departments
Regional Banking Headquarters
Customer
Branch
Domestic Business unit
Global Business 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
Trust &
Pension
Business
Group
Global
Business
Group
International
Trade
Business
Group
Investment
Banking
Business
Group
Financial
Market
Business
Group
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
Trust
Department
Global
Business
Strategy
Department
International
Trade
Business
Department
Investment
Banking
Department
Treasury
Department
Public
Fund Sales
Department
Housing Fund
Department
Wealth
Management
Business
Department
Retirement
Pension
Business
Department
Global
Business
Support
Department
National
Pension
Department
Wealth
Management
Advisory
Center
Custody Agent
Department
Foreign
Customer
Banking
Business
Department
International
Trade Service
Center
Project
Finance
Department
Trading
Department
Settlement
Support
Department
Marketing
Promotion
Department
Card Business
Department
Customer
Center
Board of Directors
Secretary Department
president & CeO
WOORI BANKANNUAL REPORT 2017 181181
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
181
Corporate Banking Headquarters
Business Support unit
Human
Resources
Group
Digital
Banking
Business
Group
Risk
Management
Group
Operation
& Support
Group
Credit
Support
Group
Management
& Finance
Planning
Group
Consumer
& Brand
Group
Next
Generation
ICT System
Building
Division
Next
Generation
ICT System
Integration
Center
Next Generation
ICT System
Acquisition
Support
Department
Next
Generation
ICT System
Analysis
Department
Next
Generation ICT
System Change
Management
Department
Human
Resources
Department
Digital
Banking
Strategy
Department
Human
Resources
Development
Department
Digital
Banking
Business
Department
Employee
Satisfaction
Center
Platform
Business
Department
ICT Support
Center
Compliance Officer
Compliance Department
Anti-Money Laundering Department
Information
Security
Division
Corporate
Restructuring
Division
Future
Strategy
Division
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
Loan Review
Department
Loan Service
Center
Deposit
Service
Center
Security
Control
Department
Corporate
Restructuring
Department
Finance &
Planning
Department
Management
Innovation
Department
Public
Relations
Department
Investor
Relations
Department
Accounting
Department
Retail Credit
Analysis &
Approval
Department
SME Credit
Analysis &
Approval
Department
Large
Corporate
Credit Analysis
& Approval
Department
Credit
Management
& Collection
Department
Innovation
Development
Center
Audit Committee
Standing Audit Committee Member/Director
Audit Department
WOORI BANKANNUAL REPORT 2017 182182
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
182
Global Network
(as of the end of April, 2018)
Head Office
51, Sogong-ro (203, Hoehyeon-dong 1-ga),
Jung-gu, Seoul, 100-792, Korea
Phone: +82-2-2002-3000
Swift: HVBKKRSE
Overseas Branch
1 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
2 LA Branch
3360, West Olympic Blvd. Suite 300, LA, CA90019, USA
Phone: 1-213-620-0747~8
Fax: 1-213-627-5438
Swift: HVBKUS6L
3 London Branch
9th Floor, 71 Fenchurch Street, London, EC3M 4BR,UK
Phone: 44-207-680-0680
Fax: 44-207-481-8044
Swift: HVBKGB2L
4 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
5 Hong Kong Branch
Suite 1401, Two Pacific Place, 88 Queensway, Hongkong
Phone: 85-2-2521-8016
Fax: 85-2-2526-7458
6 Singapore Branch
10 Marina Boulevard #13-05 MBFC Tower 2, Singapore
018983 Singapore
Phone: 65-6422-2000
Fax: 65-6422-2001
7 Bahrain Branch
P.O. Box 1151, 4th Floor, Entrance 1, Manama Centre
Building, Manama, Bahrain
Phone: 973-17-223503
Fax: 973-17-224429
8 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
9 DEPZ Customer Service Center
Dhaka Export Processing Zone(Old Area), Ganakbari,
Ssvar, Dhaka-1349, Bangladesh
Phone: 880-2778-8030
Fax: 880-2881-3274/3241
10 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
11 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
12 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
13 Woori Bank, Narayanganj Sub-Branch
Adamjee Export Processing zone, Shiddhirganj,
Narayanganj-1431 Bangladesh
Phone: 880-2769-2031~34
Fax: 880-2769-2035
14 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
15 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
16 Gurgaon Branch
1st Floor, Salcon Platina Building, MG Road, Sector-28,
Sikanderpur, Gurgaon-122001,Haryana, India
Phone: 91-12-43049700
Fax: 91-12-4304-6730
17 Mumbai Branch
Unit 601, 6th floor, Birla Centurion, Century Mills
Compound, Pandurang Budhkar Marg, Worli, Mumbai,
Maharashtra-400030, India
phone: 91-22-6263-8100
Fax: 86-10-8440-0698
18 Sydney Branch
Suite 25.03, Level 25, 363 George Street Sydney NSW
2000 Australia
Phone: 61-2-8222-2200
Fax: 61-2-8222-2299
19 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
Subsidiary
u.S.A
1 Woori America Bank
330 5th Avenue, 3rd Floor, New York, NY 10001, USA
Phone: 1-212-244-3000
Fax: 1-212-736-5929
2 Manhattan Branch
330 5th Avenue, 1st Floor, New York, NY 10001
Phone: 1-212-244-1500
Fax: 1-212-695-5593
3 Flushing Branch
136-88 39th Avenue Flushing New York, NY 11354, USA
Phone: 1-718-886-1988
Fax: 1-718-762-6898
4 Fort Lee Branch
2053 Lemoine Avenue Fort Lee, NJ 07024, USA
Phone: 1-201-363-9300
Fax: 1-201-302-0452
5 Woodside Branch
43-22 50th St. Woodside, NY 11377, USA
Phone: 1-718-429-1900
Fax: 1-718-429-2084
6 Ridgefield Branch
321 Broad Avenue #104 Ridgefield, NJ 07657, USA
Phone: 1-201-941-9999
Fax: 1-201-941-4419
7 Palisades Park Branch
225 Broad Avenue Palisades Park, NJ 07650, USA
Phone: 1-201-346-0055
Fax: 1-201-346-0075
8 Closter Branch
234 Closter Dock Road Closter, NJ 07624, USA
Phone: 1-201-784-7012
Fax: 1-201-784-7013
9 Elkins Park Branch
7300 Old York Rd Elkins Park, PA 19027
Phone: 1-215-782-1100
Fax: 1-215-782-1500
10 Annandale Branch
Seoul Plaza 4231 Markeham St, Annandale,
VA 22003, USA
Phone: 1-703-256-7633
Fax: 1-703-256-7511
11 Bayside Branch
215-10 Northern Blvd. Bayside, NY 11361, USA
Phone: 1-718-224-3800
Fax: 1-718-224-3828
12 Ellicott City Branch
100352 Baltimore National Pike Ellicott City,
MD 21042, USA
Phone: 1-443-973-3690
Fax: 1-410-461-1002
13 Wilshire Branch
3540 Wilshire Blvd. Unit 104, Los Angeles, CA 90010, USA
Phone: 1-213-382-8700
Fax: 1-213-382-8787
14 Olympic Branch
3360, West Olympic Blvd. Suite #300, LA, CA90019, USA
Phone: 1-213-738-1100
Fax: 1-213-738-1101
15 Fullerton Branch
5731 Beach Blvd., Buena Park, CA 90621, USA
Phone: 1-714-521-3100
Fax: 1-714-521-3101
16 Garden Grove Branch
10120 Garden Grove Blvd.,Suite 151Garden Grove, CA
92844, USA
Phone: 1-714-534-6300
Fax: 1-714-534-6301
17 Centreville Branch
13830 Braddock Road. Centreville, VA 20121, USA
Phone: 1-703-988-9555
Fax: 1-703-988-9554
18 Irvine Branch
14252 Culver Dr. #G, Irvine, CA 92604
Phone: 1-949-885-3760
Fax: 1-949-653-0943
19 Torrance Branch
2390 Crenshaw Boulevard, Units C, Torrance CA 90501 USA
Phone: 1-310-974-1880
Fax: 1-310-782-7004
20 Georgia LPO
2472 Pleasant Hill Rd. Duluth, GA30096, USA
Phone: 1-404-904-9880
21 San Jose LPO
2328 Walsh Ave, Santa Clara CA 95051 USA
Phone: 1-415-652-9476
22 Northern Branch
164-25 Northern Blvd. Flushing NY 11358, USA
Phone: 1-929-362-3330
WOORI BANKANNUAL REPORT 2017 (as of the end of April, 2018)
183183
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
183
China
1 Woori Bank (China) Ltd.
Floor11-12 Block A Building 13 District 4 Wangjing East
Park Chaoyang District Beijing China 100102
Phone: 86-10-8412-3000
Fax: 86-10-8441-7071
2 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
3 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
4 Shanghai Branch
Drum Building 1-2F, LJZ -Plaza,1600 Century Avenue,
Pudong New Area, Shanghai, 200122, China
Phone: 86-21-5081-0707
Fax: 86-21-5081-2484
5 Shenzhen Branch
B0105, B0210 Rongchao Landmark, 4028 Jintian Road,
Futian District, Shenzhen, 518035 China
Phone: 86-755-3338-1234
Fax: 86-755-3338-7227
6 Suzhou Branch
101B, Sovereign Building, #8 Suhua Road Suzhou
Industrial Park, Jiangsu, 215021 China
Phone: 86-512-6295-0777
Fax: 86-512-6295-2141
7 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
8 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
9 Beijing Wangjing Sub-Branch
1F, No.10, Furong Street, Chaoyang District, Beijing,
100102, China
Phone: 86-10-8471-8866
Fax: 86-10-8471-5245
10 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
11 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
12 Shanghai Jinxiujiangnan Sub-Branch
1F, 188 South Jinhui Road, Minhang District, Shanghai,
200237, China
Phone: 86-21-3432-1116
Fax: 86-21-3432-1112
13 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
14 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
15 Zhangjiagang Sub-Branch
B104/B205 Huachang Oriental Plaza, 11 Renmin East
Road, Zhangjiagang, Jiangsu 215600, China
Phone: 86-512-5636-6696
Fax: 86-512-5636-6697
16 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
17 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
18 Tianjin Dongmalu Sub-Branch
1-2F, Tower C, Yuding Plaza(Qixiang Street), Dongma
Road, Nankai District, Tianjin, 300090, China
Phone: 86-22-8776-9000
Fax: 86-22-8776-9901~2
19 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
20 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
21 Beijing Sanyuanqiao Sub-Branch
1F-05, 2F-09, Tower A, Tianyuangang Center, C2, North
Road, East Third Ring Road, Chaoyang District, Beijing
100027. China
Phone: 86-10-8440-7177
Fax: 86-10-8441-7761/7790
22 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
1 BankWoorisaudara Head Office
Jl. Diponegoro No.28 Bandung/40115
Phone: 62-22-87831900/87831906
Fax: 62-22-87831918
2 Coperate Branch
Gd. BEJ Tower 1 Lt. 16 Jl. Jend.Sudirman Kav. 52-53
Jakarta/12190
Phone: 62-21-5151919
Fax: 62-21-5151477
3 Wastukancana Branch
Jl. Wastukancana No.79 - Bandung/40116
Phone: 62-22-4209940
Fax: 62-22-4209941
4 Cirebon Branch
Jl. DR. Wahidin No.51 - Cirebon/45122
Phone: 62-231-242006
Fax: 62-231-242066
5 Bogor Branch
Jl. Pangkalan Raya No.8, Warung Jambu - Bogor/16151
Phone: 62-251-8377887
Fax: 62-251-8377209
6 Surapati Core Branch
Jl. PHH. Mustofa No.39, Surapati Core Blok
F1 - Bandung/40192
Phone: 62-22-87241326
Fax: 62-22-87241327
7 Surabaya Branch
Kompleks Ruko 21, Jl. Raya, Gubeng No.68
E - Surabaya/60281
Phone: 62-31-5041906
Fax: 62-31-5047727
8 Semarang Branch
Imam Bonjol Square Kav 4,Jl. Imam Bonjol
No.176 - Tasikmalaya/50132
Phone: 62-24-3521906
Fax: 62-24-3521900
9 Tasikmalaya Branch
Ruko Plaza Asia Blok A5-A6, Jl. HZ. Mustofa No.326 -
Tasikmalaya/46126
Phone: 62-265-2351906
Fax: 62-265-2352206
10 Yogyakarta Branch
Jl. Mangkubumi No.45 - Yogyakarta/55232
Phone: 62-274-549280
Fax: 62-274-549285
11 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
12 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
13 Ampera Branch
Jl. Ampera Raya No.20 Gd.Medco III/12560
Phone: 62-21-7821756
Fax: 62-21-7821642
14 Purwokerto Branch
Jl. Jenderal gatot Subroto No.78 Purwokerto - Jawa
Tengah/53116
Phone: 62-281-622212
Fax: 62-281-631616
15 Malang Branch
Jl. Letjen Sutoyo No.27 Malang- Jawa Timur/56141
Phone: 62-341-421906/7601906
Fax: 62-341-408188
16 Solo Branch
Jl. Ronggo Warsito No. 53 Kota, Solo - Jawa
Tengah/57131
Phone: 62-271-633600
Fax: 62-271-633433
17 Tangerang Branch
Tangerang City Business Park Blok F/50 Jl. Jend.
Sudirman No.1 Tangerang/15118
Phone: 62-21-29529226
Fax: 62-21-29529227
18 Pelembang Branch
Jl. Basuki Rahmat No.886 A - Palembang/30127
Phone: 62-711-315828
Fax: 62-711-315510
WOORI BANKANNUAL REPORT 2017 184
19 Sukabumi Branch
Jl. Jenderal Sudirman No.31-Sukabumi/43111
Phone: 62-266-6251906
Fax: 62-266-6249717
20 Pekalongan Branch
Jl. KH. Mansyur No.64, Perkalongan
Phone: 62-285-4460505
Fax: 62-285-4460506
21 Madiun Branch
Jl. Diponegoro No.110, Madiun
Phone: 62-351-4773000
Fax: 62-351-4773003
22 Jamber Branch
Jl. Gajah Made No. Ruko Gajah Mada Square Block A2-3
Phone: 62-331-421648
Fax: 62-331-4350187
23 Kediri Branch
Jl. Brawijaya No. 25A Kota Kediri
Phone: 62-354-4526726
Fax: 62-3354-4526716
24 Purwakarta Branch
Jl. Basuki Rahmat No. 94, Purwakarta/41114
Phone: 62264-8227475
25 Subang Branch
JL. Ahmad Yani No. 36/41211
Phone: 62260-421015
26 Karawaci Tangerang Branch
Ruko Pinangsia Blok H No. 1 Lippo Karawaci Kel.
Cibodas Tangerang/15139
Phone: 6221-5577636
27 Garut Branch
Jl. Ahmad Yani No.33/44117
Phone: 62262-544670
28 Buah Batu Sub-Branch
Jl. Buah Batu No.58 Bandung/40265
Phone: 62-22-7322150
Fax: 62-22-7319626
29 Kopo Mas Sub-Branch
Komp Ruko Mas J-9 Jl. Kopo Cirangrang/40225
Phone: 62-22-5436802
Fax: 62-22-5436803
30 Cimahi Sub-Branch
Jl. Raya Cibabat No.310 Cimahi/40213
Phone: 62-22-6634656
Fax: 62-22-6634657
31 Sukajadi Sub-Branch
Jl. Sukajadi No.248/40153
Phone: 62-22-2042248
Fax: 62-22-2041213
32 Soekarno Hatta Sub-Branch
Jl. Soekarno Hatta No.618 F/40286
Phone: 62-22-7509905
Fax: 62-22-7509902
33 Pemuda Sub-Branch
Ruko Graha Mas Blok AA No.3 Taman Berdikari Sentosa
Jl.Pemuda/13220
Phone: 62-21-47862070
Fax: 62-21-4711298
34 Sumedang Sub-Branch
Jl. Prabu Geusan Ulun No.76/45311
Phone: 62-261-206527
Fax: 62-261-206528
184184
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
35 Serang Sub-Branch
Jl. KH. Abdul fatah Hasan No.53 Kel. Cipare
Serang/42124
Phone: 62-254-224142
Fax: 62-254-224243
36 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
37 Atrium Sub-Branch
Jl. KH. Hasyim ashari No.49 Cideng/10410
Phone: 62-21-3451964
Fax: 62-21-3451954
38 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
39 Diponegoro Sub-Branch
Jl. Diponegoro No.28 Bandung/40251
Phone: 62-22-87831928/87831909
Fax: 62-22-87831919
40 Lembang Sub-Branch
Jl. Grand Hotel Lembang No.25 Bandung/40391
Phone: 62-22-2784797
Fax: 62-22-2784975
41 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
42 Majalengka Sub-Branch
Jl. KH. Abdul Halim No.447 Majalengka/45411
Phone: 62-233-8285460
Fax: 62-233-8285459
43 Kuningan Sub-Branch
Jl. Dewi Sartika No.4/45512
Phone: 62-232-8880938
Fax: 62-232-8880939
44 Indramayu Sub-Branch
Jl. DI. Panjaitan No.103/45212
Phone: 62-234-276236
Fax: 62-234-276237
45 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
46 Cikampek Sub-Branch
Jl. Terusan Sudirman No.6B(Sudirman Center)/41373
Phone: 62-264-8385171,72
Fax: 62-264-8385088
47 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
48 Salatiga Sub-Branch
Ruko Wijaya Square B5 Jl.Diponegoro No.110
Salatiga/50711
Phone: 62-298-311828
Fax: 62-298-312808
49 Sidoarjo Sub-Branch
Jl. KH. Mukmin No.11 Blok B-7 Sidoarjo/60281
Phone: 62-31-8922842
Fax: 62-31-8922841
50 Mojokerto Sub-Branch
Jl. Gajah Mada No.85B/60319
Phone: 62-321-383444
Fax: 62-321-383465
51 Cianjur Sub-Branch
Jl. Abdulah Bin Nuh No.15/43253
Phone: 62-263-260941, 260943, 260945
Fax: 62-263-280712
52 Pamulang Sub-Branch
Jl. Dr. Setiabudi No.71 Kav. 6 Pamulang Timur/15417
Phone: 62-21-7403205, 7443335
Fax: 62-21-7402330
53 Sumber Sub-Branch
Jl. Dewi Sartika No.57 Sumber/45611
Phone: 62-231-8330618
Fax: 62-231-8330619
54 Bantul Sub-Branch
Jl. Jenderal Sudirman No.130 Kabupaten Bantul/55713
Phone: 62-274-367514
Fax: 62-274-368787
55 Balaraja Sub-Branch
Komplek Ruko Balaraja Center Blok A No.2 Jl. Raya
59Serang Km. 24 Talaga Sari Balaraja-tangerang/15610
Phone: 62-21-29015618
Fax: 62-21-29015474
56 Ciledug Sub-Branch
Ruko Dian Plaza Jl. Raden Fatah No.8A Kelurahan
Sudirman Selatan,Ciledug/15225
Phone: 62-21-7330545
Fax: 62-21-7330706
57 Gunung Sabeulah Sub-Branch
JL. Gunung Sabeulah Kel.Tawangsari Kec. Tawang kota
Tasikmalaya/46112
Phone: 62-265-326147
Fax: 62-265-331135
58 Magelang Sub-Branch
Ruko Metro Square Blok F No.25/56172
Phone: 62-293-326498-99
Fax: 62-293-326356
59 Padalarang Sub-Branch
Jl. Raya Padalarang No.463 H/40553
Phone: 62-22-6803940/41
Fax: 62-22-6803935
60 Patrol Sub-Branch
Jl. Raya Patrol Anjatan Blok Bunder No.52/45256
Phone: 62-234-5613627
Fax: 62-234-611919
61 Gianyar Sub-Branch
Jl. By.Pass Dharma Giri No.99/80511
Phone: 62-361-8958295
Fax: 62-361-8958194
62 Gresik Sub-Branch
Ruko KIG Jl. Tri Dharma Kav. A-14/61117
Phone: 62-31-3981758
Fax: 62-31-3981720
63 Karawang Sub-Branch
Jl. Tuparev No.499 (Johar) Kab. Karawang
Phone: 62-267-8454873-74
Fax: 62-267-8454875
64 Cibinong Sub-Branch
Jl. Raya Mayor Oking No.158 V/16918
Phone: 62-21-87904397
Fax: 62-21-87904443
65 Singaparna Sub-Branch
Jl. Raya Timur No.45 Singaparna/46416
Phone: 62-265-543111-3
Fax: 62-265-545074
WOORI BANKANNUAL REPORT 2017 185185
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
185
66 Ciamis Sub-Branch
Jl. Letjen. Samuji Ruko No.35/46211
Phone: 62-265-772221
Fax: 62-265-777860
67 Sleman Sub-Branch
Jl. Magelang KM 12.8 No.200/55514
Phone: 62-274-865922
Fax: 62-274-866168
68 Losari Sub-Branch
Jl. Soekarno Hatta NO.77 Losari/45192
Phone: 62-231-8832738-39
Fax: 62-231-8832736
69 Bekasi Sub-Branch
Jl. Raya Narogong KM 12.5 No.23A/17151
Phone: 62-21-82611045-46
Fax: 62-21-82605356
70 Kudus Sub-Branch
Jl. Sunan Kudus No.5 a/509000
Phone: 62-291-4249241
Fax: 62-291-4246497
71 Pamanukan Sub-Branch
Jl. Eyang Tirtapraja No.54 Kab. Subang/41254
Phone: 62-260-551773
Fax: 62-260-551774
72 Majalaya Sub-Branch
Jl. Alun-alun utara/Jl. Tengah komp ruko permata
majalaya Blok C6/40382
Phone: 62-22-85963799
Fax: 62-22-5959826
73 Pangalengan Sub-Branch
Jl. Raya Pintu Pangalengan KM-1/40378
Phone: 62-22-5979222
Fax: 62-22-5978690
74 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
75 Rangkasbitung Sub-Branch
Jl. Raden Hardiwinangun Blok A No.9/42314
Phone: 62-252-203612
Fax: 62-252-203613
76 Tabanan Sub-Branch
Jl. Ngurah Rai No.73 Kediri/82121
Phone: 62-361-814160
Fax: 62-361-814281
77 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
78 Soreang Raya Sub-Branch
Jl. Raya Soreang No.412/40900
Phone: 62-22-5896880
Fax: 62-22-5897444
79 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
80 Jemur Sari/Surabaya selatan Sub-Branch
Jl. Raya Jemursari No.15C Surabaya/60237
Phone: 62-31-8480454
Fax: 62-31-8480483
81 Luragung Sub-Branch
Jl. Siliwangi No.18 Kec Luragung, Kab Kuningan/45581
Phone: 62-232-870016
Fax: 62-232-870020
95 Batu Sub-Branch
Jl. Brantas No.49 Batu-Malang/65314
Phone: 62-341-513709
Fax: 62-341-513712
82 Pangandaran Sub-Branch
Jl. Parapat, Desa Pangandaran, kec pangandaran kab
ciamis/46396
Phone: 62-265-630400, 630010
Fax: 62-265-630800
83 Purwodadi Sub-Branch
Jl. Letjend. S. Parman No.13 Kel. Purwodadi Kec.
Purwodadi Jawa Tengah/58111
Phone: 62-292-423399
Fax: 62-292-423799
84 Leuwi Liang Sub-Branch
Jl. Raya Jasinga 11A Kel. Cibeber, Kec. Leuwiliang Kab
Bogor/16640
Phone: 62-251-8640297
Fax: 62-251-8640299
85 Ciawi Sub-Branch
Jl. Perjuangan No.80 Kp.Karanganyar Rt. 04 Rw. 05
Desa Pakemitan Kec Ciawi Kab. Tasikmalaya/46156
Phone: 62-265-455163, 455167
Fax: 62-265-455162
86 Cilacap Sub-Branch
Jl. Jend. A Yani No.46 Cilacap/53212
Phone: 62-282-537929
Fax: 62-282-535522
87 Jombang Sub-Branch
Jl. KH. Wahid Hasyim No.71 Kota Jombang-Jawa
Timur/61411
Phone: 62-321-878906, 872906
Fax: 62-321-860904
88 Banjar Sub-Branch
Jl. Letjen Soewarto No.92/46321
Phone: 62-265-740557
Fax: 62-265-740558
89 Boyolali Sub-Branch
Jl. Pandanaran No.179 B Kab.Boyolali/57313
Phone: 62-276-323655
Fax: 62-276-323650
90 Martadinata Sub-Branch
Jl. RE Martadinata Pav 123 Bandung/40114
Phone: 62-22-71070901
Fax: 62-22-7107091
91 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
92 Singaraja Sub-Branch
Jl. Ngurah Rai No.16 Singaraja Kelurahan Kendran
Kecamatan Buleleng/81112
Phone: 62-362-25098
Fax: 62-362-26605
93 Manonjaya Sub-Branch
Jl. RTA. Prawira Adiningrat No.214 A Desa Manonjaya
kec. Manonjaya-Tasikmalaya
Phone: 62-265-380510
Fax: 62-265-380356
94 Surabaya Utara Sub-Branch
Jl. Kertajaya Indah No.9/F-105 Surabaya/60161
Phone: 62-31-3572064
Fax: 62-31-3537005
96 Palimanan Sub-Branch
Jl. Otto Iskandardinata No.503 Palimanan
Phone: 62-231-343950
Fax: 62-231-343955
97 cibadak Sub-Branch
Jl. Raya Suryakencana RT 03 RW 08, Cibadak - Kab.
Sukabumi
Phone: 6266-531915
Fax: 62266-531917
98 Bekasi Sub-Branch
Annex Building Lt. 1 Jl. Afrika No.2 Krakatau Posco
Cilegon/42435
Phone: 62-21-82404282
Fax: 62-21-82401878
99 Wates Sub-Branch
Jl. Kolonel Sugiyono No.3-Wates
Phone: 62-274-6657325
Fax: 62-274-774338
100 Tanjung Priok Sub-Branch
Jl. Enggano No.58 C- Tanjung Priok jakarta Utara/14310
Phone: 62-21-4361667
Fax: 62-21-4361668
101 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
102 Cibatu Sub-Branch
Jalan Raya Cibatu - Limbangan Ruko Perum Bunar
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
103 Wonogiri Sub-Branch
Jalan Ahmad Yani No.66, Wonogiri
Phone: 62-271-633600
Fax: 62-271-633433
104 Kawali Sub-Branch
Jl. Siliwangi No.262, Desa Kawali mukti
Phone: 62-265-791560
Fax: 62-265-791580
105 Kepanjen Sub-Branch
Jl. Kawi Ruko B 7, Kepanjen
Phone: 62-34-1379840
Fax: 62-34-1379839
106 Pamekasan Sub-Branch
Jl. Kabupaten No.114
Phone: 62-324-333905, 333906
Fax: 62-324-333604
107 Kebumen Sub-Branch
Jl. Ahmad Yani No.20, Kubumen
Phone: 62-281-6222212
Fax: 62-281-631616
108 Mangga Dua Sub-Branch
Ruko Harco Mangga Dua Blok L. No.5
Phone: 62-21-6120176
Fax: 62-21-6120179
109 Kelapa Gading Sub-Branch
Jl. Boulevard Barat Ruko MOI Blok I No.15
Phone: 62-21-29364053
Fax: 62-21-29364054
WOORI BANKANNUAL REPORT 2017 186186
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
186
110 Kayu Agung Sub-Branch
Jl. Letnan Muthtar Saleh, Kayuagung, Palembang,
South Sumatra
Phone: 62-711-315828
Fax: 62-711-315510
111 Klaten Sub-Branch
Jl. Pemuda No. 246 Klaten, solo
Phone: 62-271-633600
Fax: 62-271-633433
112 Parung Sub-Branch
Jl. Rayal Parung RT002/RW006, Kacamatan Parung,
Kabupaten Bogor
Phone: 62-2151-861-9559
Fax: 62-251-861-5455
113 Pasuruan Sub-Branch
Jl. Panglima Sudirman No.45 Ruko I, Pasuruan, Malang
Phone: 62-343-561-4700
Fax: 62-343-561-4940
114 Pati Sub-Branch
Jl. Ir. Susato No.40 Pati, Jawa Tengah
Phone: 62-24-352-1906
Fax: 62-24-352-1900
115 Sumenep Sub-Branch
JI. Trunouyo No. 244 Sumenep
Phone: 62-328-6762234
Fax: 62-328-6762242
116 Pelabuhan Ratu Sub-Branch
Jl. Siliwangi Rt/Rw 02/18, Desa Pelabuhan Ratu
Phone: 62-266-6249715
117 Posco Cilegon Sub-branch
Annex Building Lt. 1 Jl. Afrika No.2 Krakatau Posco
Cilegon/42435
Phone: 62254-369755
118 Union Square Cikarang Sub-branch
Ruko Union Square Blok A No.6 Lippo Cikarang,
Cikarang Selatan
Phone: 6221-89909797
119 Sadang Sub-Branch
Sadang Terminal Square No.07,08,25 Jl. Raya Sadang
Purwakarta/41181
Phone: 62264-8220180
120 Cikajang Sub-branch
Jl. Raya Cikajang No. 80 Garut
Phone: 6262-576094
121 Cilimus Sub-branch
Jalan Raya Cilimus RT 017/04, Desa Cilimus Kecamatan
Cilimus, Kabupaten Kuningan
Phone: 62232-615411
122 Kendal Sub-branch
Jl. Raya Utama No.9 weleri Kendal
Phone: 62294-644704
123 Wonosari Sub-branch
Jl. KH. Agus Salim No.71A Wonosari - Kab Gunungkidul
Phone: 62274-3950673
124 Purbalingga Sub-branch
Jl. Ahmad Yani No.42 Purbalingga
Phone: 62281-895553
125 Sragen Sub-branch
Jl. Sukowati No.156 Sragen
Phone: 62271-895015
126 Bintaro Sub-branch
Jl Kesehatan No 18B, Jakarta
Phone: 6221-7374693
127 KCP PROBOLINGGO
128 KCP PANDEGLANG
129 KCP PASAR ATOM
130 KCP CITRA RAYA
131 KCP CAKUNG
132 KCP PANTAI INDAH KAPUK
133 KCP CENTRAL PARK
134 KCP JEPARA
135 KCP BANJARNEGARA
136 Dalem Kaum Cash-Office
Jl. Dalem Kaum No.5 Bandung/40251
Phone: 62-22-4211906
Fax: 62-22-4206837
137 Batujajar Cash-Office
Jl. Batujajar No.324 Bandung
Phone: 62-22-86861018/17/15
Fax: 62-22-86861016
138 Cimahi Cash-Office
Cijerah II blok V No.3 Cimahi
Phone: 62-22-86065156
Fax: 62-22-6075579
139 Suci Cash-Office
Jl. PHH. Mustofa No.35/40124
Phone: 62-22-7279740
Fax: 62-22-7276361
140 Jatinangor Cash-Office
Jl. Raya Jatinangor KM 20.5 KKBI IKOPIN/45363
Phone: 62-22-7781587
Fax: 62-22-7781563
141 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
142 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
143 Jatibarang Cash-Office
Jl. Letnan Joni No.178 Kec. Jatibarang - Kab
Indramayu/45273
Phone: 62-234-352911
Fax: 62-234-352910
144 Taman Topi Cash-Office
Jl. Gedong Sawah I No.1 A Pabaton Bogor/16121
Phone: 62-251-8335714
Fax: 62-251-8335721
145 Juanda/ KK Tajur Cash-Office
Jl. Raya Tajur Ruko Galaxy No.59 H Bogo
Phone: 62-251-7559203, 8384254
Fax: 62-251-7559205
146 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
147 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
148 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
149 Bojonergoro Cash-Office
Jl. Untung Suropati Ruko Adipura Block A-11
Phone: 62-353-311271
Fax: 62-353-311270
150 Surya Sumantri Cash-Office
Phone: 62-22-2021760
Fax: 62-22-20271073
151 Asabri Cash-Office
Jl. Kebonsari Elveka I No.5 - Surabaya Gedung Kantor
Phone: 62-31-82517971
152 KK KEMANG
153 KK CIKANDE
154 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
Russia
1 AO Woori Bank
8th floor, Lotte Plaza, 8, Novinsky Boulevard, Moscow,
121099, Russia
Phone: 7-495-783-9787
Fax: 7-495-783-9788
2 Saint-Petersburg Branch
1st Floor, Atlantic City, 126 Savushkina Street,
Saint-Petersburg, 197374, Russia
Phone: 7-812-327-9787
Fax: 7-812-327-9789
3 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
1 Woori Bank Brazil
Avenida Nacoes Unidas, 14,171, Crystal Tower, Conj.803,
Vila Gertrudes, 04794-000, Sao Paulo-SP, Brazil
Phone: 55-11-2309-4740
Fax: 55-11-3511-3300
2 Bom Retiro Branch
Rua Tres Rios, 261 Andar 2, Bom Retiro, Sao Paulo SP, Brazil
Phone: 55-11-3511-3350
WOORI BANKANNUAL REPORT 2017 187187
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
187
16 Hinthada I Branch
No. 49, U Wisarra St. Pha Tar Gyi Ward, Hinthada
Township, Ayeyardady, Myanmar
Phone: 95 9 960996099
17 Hlain Branch
No. 101, Tha Yet Taw(3) Upper St. Tha Yet Taw Ward,
Kyimyindaing Township, Yangon, Myanmar
Phone: 95 9 960996089
18 Hinthada II Branch
No. 93, Nat Maw St. Panbetan Ward, Hinthada Township,
Ayeyarwady, Myanmar
Phone: 95 9 961010611
19 Hinthada III Branch
No. 93, Nat Maw St. Panbetan Ward, Hinthada Township,
Ayeyarwady, Myanmar
Phone: 95 9 961010611
20 Twantay Branch
No. 49, Bo Kyoke St. Kon Gyan(Middle) Ward, Twantay
Township, Yangon, Myanmar
Phone: 95 9 961010511
21 Pyapon I Branch
No. 18C, 8th St. 9th Ward, Pyapon Township, Ayeyarwady
Phone: 95 9 950311093
22 Pyapon II Branch
No. 18C, 8th St. 9th Ward, Pyapon Township, Ayeyarwady
Phone: 95 9 950311096
23 Pantanaw I Branch
No. 1, Sel Myaung St. Myo Kwet Thit 1, Pantanaw
Township, Ayeyarwady, Myanmar
Phone: 95 9 764433931
24 Pantanaw II Branch
No. 1, Sel Myaung St. Myo Kwet Thit 1, Pantanaw
Township, Ayeyarwady, Myanmar
Phone: 95 9 764433932
25 Gyobingauk I Branch
No. 154, Ashay Myopat St. Pan Tin Ward, Gyobingauk
Township, Bago, Myanmar
Phone: 95 9 764433935
26 Gyobingauk II Branch
No. 154, Ashay Myopat St. Pan Tin Ward, Gyobingauk
Township, Bago, Myanmar
Phone: 95 9 764433936
27 Zigon Branch
Hlaing Htate Khaung Tin St. No. 1 Ward, Zigon
Township, Bago, Myanmar
Phone: 95 9 780 113417
28 Paungde I Branch
Plot No. 79, Shwetaung Street, Min Kwet 3, Ward,
Paungde Township, Bago, Myanmar
Phone: 95 9 780114012
29 Paungde II Branch
Plot No. 79, Shwetaung Street, Min Kwet 3, Ward,
Paungde Township, Bago, Myanmar
Phone: 95 9 780114068
30 Lewe I Branch
No. 17 Plot, Min Wine Yat, No. 4 Ward, Lewe Township,
Nay Pyi Taw, Myanmar
Phone: 95 9 402187901
31 Pyinmana I Branch
No. 181, Yarza Htarni St. Aung Thar Yar Ward, Pobbathiri
Township, Nay Pyi Taw, Myanmar
Phone: 95 9 402187923
Cambodia
1 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
2 Russey Keo Branch
House No.1A, National Road 5, Sangkat Kilomet Lek6
Khan Russey Keo, Phnom Penh.
Phone: 855-23-999-664
3 Pursenchey Branch
House No.6A, Russian Blvd, Tangoun Village, Sangkat
Kakb, Khan Pursenchey, Phnom Penh.
Phone: 855-23-999-803
4 Kean svay Branch
House No.330, National Road 1, Toul Tuaut village,
Korkey Communce, kean Svay district, Kandal province
Phone: 855-23-720-632
5 Takhmao Branch
Building No.31, Street2, Takhmao village, Takhmao
Commune, Takhmao District, Kandal Province, Cambodia
Phone: 855-24-998-333
6 PrekPhnov Branch
National highway 5, Kandal Village, Prek Phnov
commune, Phnom Penh, Cambodia
Phone: 855-23-900-945
7 Ang Snoul Branch
#109, National road No.4, Village Bek Chan,
CommuneBek Chan, District Ang Snuol, Cambodia
Phone: 855-023-999-355
8 Phsar Depo Branch
#138D, St 215, Sangkat Veal Vong, Khan Prumpei
Makara, Phnom Penh, Cambodia
Phone: 855-23-900-455
9 AreyKshat Branch
#154, National Rd. 21 Preak Khsev Village, Rokar Khpos
Commune, S’ang District, Kandal Province, Phnom
Penh, Cambodia
Phone: 855-2490-1455
10 S’ang Branch
#154, National Rd. 21 Preak Khsev Village, Rokar Khpos
Commune, S’ang District, Kandal Province, Phnom Penh
Phone : 855-2490-1455
11 Steung Meanchey Branch
No.19A St, Monireth, Phumdomnak Thom, Sangkat
Stoeung Meanchey, Khan Meanchey, Phnom Penh,
Cambodia
Phone: 855-23-901-345
12 Chom Chao Branch
No.4A, St, Veng Sreng, Chrey Koung Village, Sangkat
Chom Chao, Phnom Penh, Cambodia
Phone: 855-23-901-355
13 Char Ampov Branch
#610B, National road No.1, Doem Sleng Village, Sangkat
Chabar Ampov, Khan Chbar Ampov, Phnom Penh
14 Toul Kork Branch
#1C, St 355, Phum 1, Sangkat Boeung Kok1, Khan Toul
Kork, Phnom Penh Chamkar 15 15
15 Chamkar Doung Branch
#2039, St 217, Taley Village, Sangkat Dong Kor, Khan
Dong Kor, Phnom Penh Kampongspeu Branch
16 Kampongspeu Branch
#751, National Highway No 4, Kampongspeu, Cambodia
17 Pshar Dey Huy Branch
18 Kandal Stueng Branch
19 Odongk Branch
20 Mukh Kampul Branch
Myanmar
1 Woori Finance Myanmar Plc.
115/A, Pyay Road, Saw Bwar Gyee Kone Ward(10 miles),
Insein Township Yangon, Myanmar
Phone: 95-01-643798
2 MingladonⅠ Branch
115/A, Pyay Road, Saw Bwar Gyee Kone Ward(10 miles),
Insein Township Yangon, Myanmar
Phone: 95-01-643798
3 NorthOkkalapa Branch
No. M(56), Thiriyadanar Wholesale Market
NorthOkkalapa Township, Yangon, Myanmar
Phone: 95-99-6889-2300
4 Mingaladon II Branch
4F, 115/A Pyay Road, Saw Bwar Gyee Kone
Ward(10miles), lnsein Township, Yangon Myanmar
Phone: 95-01-643798
5 Nyaungdon Branch
Room No. 103, 1st Street, 5 Quarter, Nyaungdon
Township, Ayarwaddy, Myanmar
Phone: 95-99-7674-7709
6 Taikkyi Branch
Room No.9, Natsinkone Road, Ohtan Ward, Taikkyi
Township, Yangon, Myanmar
Phone: 95-9-7717-81028
7 Hmawbi I Branch
2F No(26) Tatkyee Kone village, Hmawbi Township,
Yangon, Myanmar
Phone: 95-9-9-74563586
8 Hmawbi II Branch
1F No(26) Tatkyee Kone village, Hmawbi Township,
Yangon, Myanmar
Phone: 95-9-97456395
9 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
10 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
11 Kawhmu Branch
No 192/B, Bogyoke St. South Wd Kawhmu Townshop,
Yangon
Phone: 95 9 9742 91112
12 Insein Branch
115/A, Pyay Road, Saw Bwar Gyee Kone Ward(10 miles),
Insein Township Yangon, Myanmar
Phone: 95 1 643798
13 Kungyangon Branch
No 540, Yadanar Pone 2nd St, Kangyi / Magyi Ward,
Kungyangon Township, Yangon, Myanmar
Phone: 95 9 975 890019
14 Zalun Branch
Bogyok St. Nyaung Pin Zay Ward, Zalun Township,
Ayeyarwady, Myanmar
Phone: 95 9 960996083
15 Kyimyindaing Branch
No. 101, Tha Yet Taw(3) Upper St. Tha Yet Taw Ward,
Kyimyindaing Township, Yangon, Myanmar
Phone: 95 9 960996092
WOORI BANKANNUAL REPORT 2017 188
32 Pyinmana II Branch
No. 181, Yarza Htarni St. Aung Thar Yar Ward, Pobbathiri
Township, Nay Pyi Taw, Myanmar
Phone: 95 9 402187924
33 Lewe II Branch
No. 241, Office Street, Min Wine Yat, No. 4 Ward, Lewe
Township, Nay Pyi Taw, Myanmar
Phone: 95 9 441580466
34 Dekkhinathiri Branch
No. Da-2410, Wai Da 10 St. Dekkhinathiri Township, Nay
Pyi Taw, Myanmar
Phone: 95 9 441580468
35 Lewe Ⅲ Branch
No. 241, Office Street, Min Wine Yat, No. 4 Ward, Lewe
Township, Nay Pyi Taw, Myanmar
36 Takkon Ⅰ Branch
No. (ma-127), Yin Mar Street, Area (3), Mya Waddy Ward,
Takkon Township, Nay Pyi Taw
philippines
1 Wealth Development Bank
Taft Financial Center, Cardinal Rosales Avenue, Cebu
Business Park, Cebu City, Cebu
2 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
3 Angeles Marquee Mall Branch
Ground Floor , Marquee Mall, Don Bonifacio St., Pulung
Maragul Angeles City, Pampanga
Phone: 63-45-624-0072
4 Legazpi Pacific Mall Branch
G/F Expansion II, Pacific Mall Legazpi, Landco Business
Park, F. Imperial Street Cor. Circumferential Road,
Legazpi City 4500
Phone: 63-52-480-0038
5 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
6 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
7 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
8 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
9 Cebu Carbon Branch
Ground Floor, M.C. Briones & Plaridel Sts., Cebu City
Phone: 63-32-416-9077
Fax: 63-32-416-9078
188188
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
10 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
11 Cebu Tabunok Branch
Ground Floor, AGSy Bldg., National Hi-Way, Tabunok
Talisay City, Cebu
Phone: 63-32-272-2955
Fax: 63-32-273-6870
12 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
13 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
14 Tagbilaran Banking Center
Ground Floor, No. 15 JS Torralba St., Poblacion 2,
Tagbilaran City, Bohol
Phone: 63-38-411-4860
Fax: 63-38-501-9098
15 Iloilo Banking Center
Ground Floor, ACCE Bldg., Mabini Ledesma St.,
Liberation, Iloilo City
Phone: 63-33-338-4419
Fax: 63-33-338-4417
Vietnam
1 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
2 Hanoi Branch
24F, Keangnam Landmark 72, E6 Pham Hung Road, Tu
Liem District. Hanoi, Vietnam
Phone : 84-4-3831-5281
3 Ho Chi Minh Branch
2 Floor, Kumho Asiana Plaza Saigon, 39 Le Duan St., Dist
1, HCMC, Vietnam
Phone : 84-8-3821-9838
4 Bac Ninh Branch
1-2 Floor Halla Bld, Yen Phong Industrial Zone, Yen
Trung Commune, Yen Phong District,
5 Bac Ninh Province, Vietnam
Overseas Office
Malaysia
Woori Bank Kuala Lumpur Representative Office
Unit 4129/4130, 41/F, Vista Tower, The Intermark 182
Jalan Tun Razak, Kuala Lumpur 50400, Malaysia
Phone: 84-04-7300-6802
Fax: 60-3-2163-9288
16 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
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
poland
Poland Representative Office
Uniwersytecka 13, 40-007, Katowice, Poland
Phone : 48-323-076-417
17 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
18 Tacloban Branch
Sukwan Bldg, corner Real and Burgos Streets,
Tacloban City
Phone : 63-053-832-3435
19 Caloocan Branch
Rizal Avenue Extension, East Grace Park, Caloocan
1400, Metro Manila
Phone : 63-0917-870-7335
20 Gensan Branch
Gaisano mall, Jose Catolico Sr. Avenue, General Santos
City, South Cotabato
Phone : 63-083-250-1238
21 Dumaguete Branch
1F Jose Building South Road Calindagan, Dumaguete City
22 Bacolod Branch
Lacson-Luzuriaga Streets, Bacolod City, Negros
Occidental
WOORI BANKANNUAL REPORT 2017 189
TogeTher for Tomorrow
WOORI BaNK
aNNUaL RePORT 2017
A LeAding
BAnk
ShAping
the Future
WOORI BANK OVERVIEW
VISION & CORE VALUES
COMPANY HISTORY
CORPORATE GOVERNANCE
FINANCIAL HIGHLIGHTS
GLOBAL NETWORKS
DIGITAL STRATEGY
PARTNERS & AWARDS
7
1
0
2
K
O
O
B
T
C
A
F
E
T
A
R
O
P
R
O
C
K
N
A
B
I
R
O
O
W
189189
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
Woori Bank is shaping the future of Korean financial industry as a leading global bank that grows alongside customers.WOORI BANKANNUAL REPORT 2017
190190
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
190
01
Woori Bank
Overview
Established nearly 120 years ago
with capital from the royal treasury
of Emperor Gojong, Woori Bank has
been at the forefront of building the
framework for modern finance in Korea.
The Bank is known for having been
a trust-worthy partner to its customers
throughout many of the countries
historic moments.
Woori Bank is shaping the future of the
Korean financial industry as a leading
global bank that grows alongside
customers.
Credit Ratings
International Ratings
Woori Bank
Republic of Korea
Moody's
S&P
Fitch
A1
A
A-
Aa2
AA
AA-
Korea
Ratings
Domestic Ratings
NICE
Korea
Investors
Service
AAA AAA AAA
(as of the end of 2017)
Woori Bank’s Subsidiaries
Domestic Subsidiaries
Woori Card
Woori Investment Bank
Woori FIS
Woori Finance Research Institute
Woori Credit Information
Woori Fund Service Co
100%
59.83%
100%
100%
100%
100%
Woori Private Equity Asset Management
100%
International Subsidiaries
Woori America Bank
(U.S.A.)
Woori Global Markets Asia
(Hong Kong)
Woori Bank China
(China)
AO Woori Bank
(Russia)
Woori Bank Brazil
(Brazil)
Woori Finance Cambodia
(Cambodia)
100%
100%
100%
100%
100%
100%
PT Bank Woori Saudara Indonesia
(Indonesia)
79.88%
Woori Finance Myanmar
(Myanmar)
Woori Wealth Development Bank
(Philippines )
Woori Bank Vietnam
(Vietnam)
100%
51%
100%
Coporate FaCt BookWOORI BANKANNUAL REPORT 2017 191
Woori Bank at a Glance
Customers
SMe/SOHO
Conglomerates
Total number of customers
Million
Total number of SME customers
Million
23.0
Domestic
Branches
1.48
Global
networks
BAnK
Out of 36
large enterprises
Total number of large
enterprises where Woori Bank
is the major creditor bank
13
employees
Countries
Branches
Total number of domestic
branches
876
Assets
Overseas networks
(Including Korea desk & GRM)
Networks
25
301
Loans
Employees
Total number of employees
(Consolidated base)
19,540
Deposits
KRW
KRW
KRW
uSD 331.8 bn
uSD 207.3 bn
uSD 219.1bn
Trillion
Trillion
Trillion
Total assets (incl. trust account)
355.5
Total loans
222.1
*Based on exchange rate of KRW1,071.4/USD as of Dec. 29 2017
Total deposits
234.7
191191
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017 192
02
Vision & Core Values
No.1 Bank of Korea
Korea's leading provider of financial services
CORe VaLUeS
Customer
happiness
pioneering
for the
Future
honesty
and trust
putting
talent First
Woori puts
customer
happiness first
Woori challenges
itself to create a
better future
Woori leads the way
in creating a healthy
financial order
Woori fosters
human talent
Management Policy
Field centered management to put customers first
Slogan
Woori All Together, All New Woori
Beyond Korea’s No.1 Bank,
Jump to Become a Global Top Class Bank by 2020
2016 ~ 2017
2018~
2020
Successful
Privatization
Reestablishment of
Financial Group
No. 1
Financial Group
·Half a Step Ahead
·Fulfilling One’s Duties
·Locking the Back Door
·Detail-Focused Business
·Transition to FG Structure
·Expansion of Business Portfolio
Global Top Class Bank
·600 Overseas Networks
· Leading the 4th Industrial
Revolution
192192
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
Coporate FaCt BookWOORI BANKANNUAL REPORT 2017 193
aSIa TOP 10
GLOBaL TOP 50
Overseas
Networks
VISION 2020
Financial
Group
Digital
Banking
193193
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017 194
03
119 years of history
Woori Bank marked the important moment in history
1
The
First
emperor Gojong
In 1899, the Emperor invested 30,000 won from the royal treasury for
the foundation of Woori Bank’s predecessor, Daehan Cheonil Bank.
Seoul metropolitan Government
Served as the treasury bank for the Seoul Metro
politan Government over the past 100 years.
2
achieving
Win-win
Growth
National Debt Repayment movement
Managed funds raised for the National Debt
Repayment Movement.
The Supporter of Korea economy
Served as the driving force behind economic
growth by serving as a lender for promising exporters.
Established Daehan
Cheonil Bank
Became The Commercial
Bank of Korea
Merged into
Hanvit Bank
Gwangtonggwan was built
in 1909 as a head office of
Daehan Chonil Bank. The
oldest continuously operating
banking building in Korea.
(Currently Jongno Branch)
Became Hanil Bank
Established Chosun
Trust Company
The 1st Korean Bank
listed on the Korea Stock
Exchange
Korea Deposit
Insurance
Corporation
1899
1932
1956
1968
1999
Emperor Gojong invested
capital from the royal treasury
for the foundation of Woori
Bank’s predecessor, Daehan
Cheonil Bank in 1899
Opened Tokyo Branch
The 1st Korean commercial
bank to open an overseas
network
194194
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Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
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Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
Coporate FaCt BookWOORI BANKANNUAL REPORT 2017 195195
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Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
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119 Years of History
Corporate Governance
Financial Highlights
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Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
195
3
Leaping
Forward
4
Taking
the Lead
Overcoming Crisis
During the Asian Financial Crisis, coordinated the merger between
two key players in corporate finance, Commercial Bank of Korea and Hanil Bank.
Turning circumstances around
A new leap forward as Korea's No.1 bank by working
together to overcome the Asian Financial Crisis.
Successful Privatization
MOU between KDIC and Woori Bank is terminated.
WiBee Bank
WiBee Bank was launched as Korea's 1st mobile-only bank.
WiBee Talk
WiBee Talk was launched as the 1st mobile messenger in the financial sector.
Global Network 300
The 1st Korean bank to open 300 global networks.
Changed Name to
Woori Bank
Merged Woori Financial
Group and Woori bank
Successful Privatization
Woori
Financial
Group
Listed on NYSE
Main Service Provider
For National Pension
Service
2001
2002
2003
2014
2016
2017
Established
Woori FG
The 1st Financial Holding
Company in Korea
[Change in KDIC Stake]
%
51.1
%
29.7
%
21.4
Oligopolistic
Shareholders
KDIC
WOORI BANKANNUAL REPORT 2017 196
04
Corporate Governance
New governance structure after privatization will enable us to enhance our corporate value further.
2016
Successful Privatization
KDIC finalized sale of 29.7%
stake in Woori Bank
Termination of MOU between
KDIC and Woori Bank
2017
New Governance Structure
new Governance Structure
based on oligopolistic shareholders
establishment of New Governance Structure
Shareholders (as of the end of 2017)
Oligopolistic
Shareholders
%
IMM 27.22
Tongyang
Life
Korea
I&S
Kiwoom
Securities
Hanwha
Life
Mirae
Asset*
Eugene
Asset*
* Investors who chose not to exercise BOD recommendation rights
%
KDIC 18.43
%
NPS 9.29
ESOA 5.36
%
Others 39.7
%
BOD (8 Members)
CEO
Standing Auditor
recommended by
Outside Directors
oligopolistic shareholders
recommended by KDIC
Non-standing Director
(Korea Deposit Insurance Corporation)
BOD’s Active Participation in Major
Management Decisions
“enhancing Corporate Value”
with post-privatization governance structure
196196
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Digital Banking
Risk Management
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Ethical Management
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Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
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Woori Bank overview
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119 Years of History
Corporate Governance
Financial Highlights
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Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
Coporate FaCt BookWOORI BANKANNUAL REPORT 2017 197
Board of Directors & management
president &
Chief executive Officer
Outside director
Sohn, Tae Seung
Standing director
Oh, Jung Sik
non-Standing director
Bae, Chang Sik
Ro, Sung Tae
Shin, Sang Hoon
Park, Sang Yong
Tian, Zhiping
Chang, Dong Woo
Governance Award
Best Company in Governance (Board of Directors)
The Maeil Business Newspaper,
Daishin Economic Research Institute
Shareholder Composition
(4% and above, as of the end of 2017)
NPS (National
Pension Service)
9.29%
KDIC (Korea
Deposit Insurance
Corporation)
18.43%
ESOA (Employee Stock
Ownership Association)
5.36%
Others
44.92%
6.00%
4.00%
4.00%
4.00%
IMM PE
Korea Investment &
Securuties
Tongyang Life Insurance
Kiwoom Securities
Hanwha Life Insurance
* The total stake of Oligopolistic shareholders : 27.22%
4.00%
197197
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Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017 198
05
Financial highlights
[ Wbn, U$mn in ( ) ]
Net Income
2015
1,059
(988)
2016
1,261
(1,177)
2017
1,512
(1,411)
[ Wbn, U$mn in ( ) ]
Interest Income
[ Wbn, U$mn in ( ) ]
Non Interest Income
5,019
(4,685)
5,221
(4,873)
1,252
(1,169)
4,762
(4,445)
4,493
(4,194)
+
4.0%
+
5.4%
+
6.0%
2014
2015
2016
2017
706(659)
867(809)
+
44.4%
461(430)
+
53.1%
2014
+
22.8%
2015
2016
2017
* Consolidated Basis, Based on exchange rate of KRW1,071.4/USD as of Dec. 29 2017
Net Income(Continuing Operations) attributable to owners
[ Wtn, U$bn in ( ) ]
Assets
Loan in Local Currency
total Assets
7
1
0
2
6
1
0
2
5
1
0
2
4
1
0
2
(187)
200
(178)
191
(272)
185
(156)
167
(332)
356
(320)
343
(297)
318
7
1
0
2
6
1
0
2
5
1
0
2
4
1
0
2
(272)
* Consolidated Basis, Total Assets include Trust Account
Based on exchange rate of KRW1,071.4/USD as of Dec. 29 2017
297
[ Wtn, U$bn in ( ) ]
Funding
deposit
total Funding
(219)
235
(206)
221
(195)
209
(176)
189
(276)
296
(271)
290
(255)
273
(235)
252
198198
Woori Overview
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Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
Coporate FaCt BookWOORI BANKANNUAL REPORT 2017 199199
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
199
[ Unit : % ]
Dividend
[ Unit : % ]
Profitability(ROA & ROE)
ROA
ROE
5.69
7.42
6.36
3.55
0.37
0.41
0.48
2014
2015
2015
2016
2016
2017
2017
0.21
2014
* Consolidated basis
*2014: excluding one-off factors related to the sale and the spin-off subsidiaries
2016
2017
400
600
* 2017 : including the interim dividend
21.35
26.71
(KRW)
Dividend per
Share
(%)
Payout Ratio
100(KRW)
[ Unit : % ]
[ Unit : % ]
Asset Quality (NPL Ratio)
NPL Ratio (Bank)
NPL Ratio (excl. 4 shipbuilders*)
Capital Adequacy
BIS Ratio
Tier1 Ratio
CET1 Ratio
2.10
1.62
1.47
1.24
2014
2015
0.98
0.91
2016
0.83
0.80
2017
13.66
10.43
8.47
2015
15.29
12.68
10.50
15.40
13.03
10.95
2016
2017
* 4 Shipbuilders : Sungdong, SPP, Daesun, STX
Credit Cost Ratio
[ Unit : % ]
[ Unit : % ]
Credit-to-Income-Ratio
Cost-to-Income Ratio
Cost-to-Income Ratio(excluding ERP Expense)
0.52
0.45
0.37
0.34
2014
2015
2016
2017
57.6
53.9
2015
59.1
56.1
2016
54.6
2017
49.9
* Consolidated basis
Credit Cost Ratio = Credit cost/average Total Credit balance
* Cost-to-income ratio =
SG&A expense / (Interest Income + Non-Interest Income)
WOORI BANKANNUAL REPORT 2017
200200
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Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
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Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
200
06
Global Networks
Woori Bank has a strong global presence at 301 overseas networks located in
25 countries around the globe.
poland
London
Woori Bank Russia
germany
Woori Bank China
turkey
iran
tokyo
Bahrain
Qatar
Mumbai
dhaka
dubai
gurgaon
Woori Global Markets Asia
hong kong
Woori Bank Vietnam
india Regional Headquarters Chennai
Woori Finance Myanmar Yangon
Woori Finance Cambodia
Wealth Development Bank philippines
kuala Lumpur
Singapore
Bank Woori Saudara indonesia
South Africa
Sydney
Growing Our Financial Services through a Global Network
network to be
opened (2018)
korean desk
Total
networks
Overseas
Branches
301
Representative
Office
19
Overseas
Subsidiaries
new York
Woori America Bank
Los Angeles
Mexico
Woori Bank China
Woori Bank Russia
21
Woori Bank Vietnam
3
India Regional Headquarters
3
Wealth Development
Bank Philippines
21
Woori Finance Myanmar
3
Woori Bank Brazil
Bank Woori Saudara Indonesia
33
Woori Finance Cambodia
153
Woori America Bank
20
Woori Bank Brazil
21
2
(278)
4
10
Coporate FaCt BookWOORI BANKANNUAL REPORT 2017
201
Global Business history
1968.11.11
Tokyo
2006.02.13
Ho Chi Minh
2008.01.09
Woori Bank Russia
2012.09.25
Woori Bank Brazil
2016.11.07
Woori Bank Vietnam
Global Business
1976.04.08
New York
2007.11.12
Woori Bank China
2012.04.05
Chennai
2014.07.29
Woori Finance Cambodia
Overseas Branches
1968.11.11
1976.04.08
1978.01.16
1978.05.26
1980.03.14
1980.10.28
1983.10.01
Branch
Subsidiary
representative Office
Tokyo
New York
LA
London
Hong Kong
Singapore
Bahrain
1984.01.27
1996.09.21
1997.09.26
2006.02.13
2006.10.03
2007.11.12
2008.01.09
Woori America
Bank
Dhaka
Hanoi
Ho Chi Minh
Woori Global
Markets Asia
(Hong Kong)
Woori Bank
China
Woori Bank
Russia
2009.02.27
2012.04.05
2012.09.25
2012.10.25
2013.02.19
2014.05.19
2014.07.29
Kuala
Lumpur
Chennai
Woori Bank
Brazil
Yangon
(Myanmar)
Sydney
Dubai
Woori Finance
Cambodia
2014.12.30
2015.11.26
2016.10.28
2016.11.07
2017.01.16
2017. 02.03
2017.07.31
Bank Woori
Saudara
Woori Finance
Myanmar
Wealthbank
(Philippines)
Woori Bank
Vietnam
Gurgaon
Poland
Mumbai
201201
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Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017 202
07
Global Networks
Strategy
Vietnam, Philippines, India
〮 Convert existing branches to
subsidiaries
〮 Expand through M&A
Cambodia, Myanmar
〮 Launch new businesses
( i.e. Microfinance and Savings
Bank) adapting to local
environments
ocaliz a ti o n
L
Diver
s
if
i
c
a
t
i
o
n
L
e
v
e
l-
U
p
h
e
N e w m arket wit
a t e gic Valu
r
t
S
China, USA, Indonesia
〮 Leverage existing subsidiaries
to further expand Woori Bank
presence in the region
Germany, Poland, Mexico
〮 Enter new markets with core
strategic values
〮 Establish financial belts
connecting regions
202202
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Global Business
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Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
Coporate FaCt BookWOORI BANKANNUAL REPORT 2017 203203
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Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
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Organizational Chart
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Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
203
Overseas expansion
〮 Woori Bank has a strong global presence at 301 overseas networks located in 25 countries
around the globe.
〮 We are actively expanding overseas operations by establishing financial belts on every continent .
〮 We aim to become one of Asia's top 10, and one of the World's Top 50 banks in the near future.
Largest Overseas Network among Korean Banks
- 301 networks in 25 nations Worldwide (as of dec. 2017)
Woori Bank Russia
Woori Bank China
London
poland
tehran
Bahrain
Woori Finance Myanmar
gurgaon
dubai
dhaka
Yangon
Chennai
Woori Global Markets Asia Ltd HK
Woori Bank Vietnam
tokyo
SeOuL
hong kong
Woori America Bank
Los Angeles
new York
Woori Finance Cambodia
kuala Lumpur
Singapore
Wealth Development Bank
p.T. Bank Woori
Saudara indonesia
Sydney
Main Focus Countries
Woori Bank Brazil
(Brazil)
indonesia
Vietnam philippines
india
Cambodia Myanmar
600 Overseas Networks
by 2020
(Expand Networks and pursue M&As)
Head Office
Overseas Branch
19
Overseas Subsidiary
Overseas Representative Office
10
4
〮 Number of branches under overseas
subsidiaries
278
WOORI BANKANNUAL REPORT 2017
204
08
Digital Strategy
We are taking the lead in the Digital Banking business in Korea, as the 1st Korean bank that
launched a comprehensive mobile financial platform.
WiBee Bank
WiBee Talk
WiBee Members
WiBee Market
Korea’s 1st
mobile-only
banking
service
1st mobile
messenger from
a Korean financial
institution
Customer-
oriented open
membership
service
mobile-based
open market-
type shopping
mall
May 2015
Jan. 2016
Jul. 2016
Aug. 2016
Digital financial Platform
Feb.
Mar.
May
Sep.
Oct.
2017
WiBee Talk
SORi
Real-time
translation
service
in 16+
languages
AI banking
service
with voice
recognition
function
Woori
Robo-alpha
AI-based
financial adviser,
providing financial
consultation to
customers
Wibee Bot
Pepper
Chatbot
service
First humanoid
robot used in
financial services
204204
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Financial Market Business
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Digital Banking
Risk Management
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Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
Coporate FaCt BookWOORI BANKANNUAL REPORT 2017 205
Combined with Global Strategy
Global Digital Platform
will be utilized to expand
local operations in Southeast Asia
India
Myanmar
Vietnam
Philippines
Indonesia
Leading the 4th Industrial Revolution
Big Data
+
AI
+
Block-chain
205205
Woori Overview
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Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017 206
09
a Trust-worthy Partner
A reliable partner for major Government Institutions and Large Enterprises.
Public Institutions
national pension Service
Acting as a custodial bank for equity investment assets
In 2017, Woori Bank was selected as the primary banking partner by the National Pension
Service, the world’s third largest pension fund in size, and will be managing a total of KRW 600
trillion of funds for three years starting in March 2018.
national Housing urban Fund
Acting as the managing custodian bank
Korea Land & Housing Corporation
Acting as the primary bank for funds
Primary Banking
Relationship Partners
Number of Large
enterprises that utilize
Woori Bank as a major
Creditor Bank
(as of 2017)
major Universities
& hospitals
Since 1969
Since 1963
Since 1971
Since 1933
Since 1952
Woori Bank
13
h Bank
5
S Bank
4
k Bank
3
206206
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Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
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Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
Coporate FaCt BookWOORI BANKANNUAL REPORT 2017 207
awards
the Bank of the Year 2017 Asia-pacific
the Banker
Best transaction Bank Award, the Future of Finance Summit
Asian Banker
Best Cash Management Bank, the Future of Finance Summit
Asian Banker
2017 presidential Commendation for Services in Social
enterprise incubation
Ministry of employment and Labor
Best Bank in preventing Voice phishing damages, 2017 First half
Financial Supervisory Service
11th national Sustainable Management Award
Ministry of Strategy and Finance
Consumer’s Choice Star Brand grand prize in integrated
Financial Membership
Minister’s prize in Service, the 4th korea Big data Awards
Maekyung Media group
Maeil Business newspaper,
Ministry of Science and iCt
governance Award, Best Company in governance
(Board of directors)
the Maeil Business newspaper,
daishin economic research institute
excellence in Banking Sector, the 4th korea retirement
pension Award
Mercer korea
Commendation by Minister of trade, industry and energy
(for promotion of expert)
Ministry of trade, industry and energy
grand prize, korea’s Best Banker
the Seoul economic daily
2017 Business Supporting the employment of Multicultural Families
Seoul Metropolitan government
Best Bank in Cutting edge Banking, 2017 Asia today Financial
grand prize
Asia today
grand prize, 2017 risk Manager Awards
(FSS [Financial Supervisory Service] Chairman’s Award,
awarded to one company out of all categories)
Money today thebell
Chairman’s Award of the korea Commission for Corporate
partnership, the 4th CSV Awards
the korean Academic Society of
Business Administration
excellence prize, hk Wow tV global Financial grand prize
hk Wow tV
2017 Customer Satisfaction + Awards (hall of Fame in Banking)
the korean economic daily
Chief information Security Officer(CiSO) of the Year
korea Forum of Chief information
Officers, the Federation of korean
information industries
207207
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
WOORI BANKANNUAL REPORT 2017
208
208208
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
A LeAding BAnk ShAping the Future
51, Sogong-ro(203, Hoehyeon-dong 1-ga), Jung-gu, Seoul, 04632, KoreaTel. +82-2-1599-2288 / +82-2-2002-3000www.wooribank.comCoporate FaCt BookWOORI BANKANNUAL REPORT 2017 209209
Woori Overview
Message from the CEO
Board of Directors
Corporate Governance
Company Structure
Woori Bank Awards 2017
News Highlights
Financial Highlights
Business Operations
Retail Banking
Wealth Management
Trust & Pension Business
Corporate Banking
SME Banking
Institutional Banking
Real Estate Finance
Global Business
International Trade Business
Financial Market Business
Investment Banking
Digital Banking
Risk Management
Corporate Social
Responsibility
Ethical Management
Consumer Protection
Employee Satisfaction
Social Contribution Activities
Woori Smile Microcredit
Financial Review
Management's Discussion
and Analysis
Independent Auditors'
Report
Organizational Chart
Global Network
Coporate Fact Book
Woori Bank overview
Vision & Core Values
119 Years of History
Corporate Governance
Financial Highlights
Global Networks
Global Networks Strategy
Digital Strategy
A Trust-worthy Partner
209
Directed by Woori Bank
investor Relations Dept.
IR officer. Kim, So Hee ︱ banker.ksh@wooribank.com ︱ Tel +82-2-2125-2316 ︱ www.wooribank.com
Designed by Reddotbranding ︱ Tel +82-2-584-0418
WOORI BANKANNUAL REPORT 2017 51, Sogong-ro(203, Hoehyeon-dong 1-ga), Jung-gu, Seoul, 04632, Korea
Tel. +82-2-1599-2288 / +82-2-2002-3000
www.wooribank.com