More annual reports from Woori Financial Group Inc.:
2022 ReportWOORI BANK ANNuAl RepORt 2018
Since this year is 120th Woori Bank’s anniversary(exceeding 100 years
of age, we are now reborn ‘in our Twenties with Youthful sprit’ going
global), we have selected as a new spokesmodel BLACKPINK*, who
have grown to become the leading Korea’s international girl group in
their twenties.
BLACKPINK
BLACKPINK has become the 1st K-pop group to have a music video
titled ‘Ddu-Du Ddu-Du’ with more than 800 million YouTube views.
BLACKPINK, who debuted in 2016, already made history when its
latest single, ‘Kill This Love,’* charted on Billboard’s main singles
chart, the Hot 100, making it the 1st female K-pop group to record
such an achievement.
* ‘Kill this Love’ was released on April 5, 2019 and exceeded
300 million YouTube views in early May 2019
Woori Bank(WOORI means ‘our’ in Korean) was established in 1899 as the nation’s 1st
and the only traditional bank to believe in our customers potential to prosper with the
Korean economy for 120 years. Woori Bank started anew as Woori Financial Group
Inc. this year and will continue to actively support the financial industry in Korea.
Woori Bank will provide a diverse range of secure financial services by taking the lead
in the 4th industrial revolution in finance and create a convenient financial environ-
ment for customers by applying new digital technologies to the world of finance.
We will serve as a robust financial partner that fulfills its social responsibilities and
promote the coordinated development between the banking sector and the society,
therey ensure that our society positively grows together with us.
Going beyond the No.1 financial group with comprehensive services in Korea by sup-
porting/believing in our customers potential to achieve their best performances, we
will become a representative bank in Asia and will also take the lead in global finan-
cial markets.
CONTENTS
Woori Overview
006
012
016
019
022
028
036
040
041
042
SPeCIAL STORY
MeSSAGe FROM The CeO
BOARd OF dIReCTORS
CORPORATe GOveRNANCe
WOORI FINANCIAL GROuP INC.
hISTORY OF 120 YeARS
NeWS hIGhLIGhTS
COMPANY STRuCTuRe
AWARdS 2018
FINANCIAL hIGhLIGhTS
Business Operations
046
048
050
052
054
056
058
062
064
066
ReTAIL BANKING
ReAL eSTATe FINANCe
WeALTh MANAGeMeNT
CORPORATe BANKING
SMe BANKING
INSTITuTIONAL BANKING
GLOBAL BuSINeSS
INTeRNATIONAL TRAde BuSINeSS
INveSTMeNT BANKING
TRuST & PeNSION BuSINeSS
Business Support / Social Responsibility
070
073
076
079
080
082
084
086
089
090
092
eMPLOYee SATISFACTION
FINANCIAL MARKeT BuSINeSS
dIGITAL BANKING
IT SuPPORT
INFORMATION SeCuRITY
RISK MANAGeMeNT
CONSuMeR PROTeCTION
SOCIAL CONTRIBuTION ACTIvITIeS
WOORI SMILe MICROCRedIT
eThICAL & COMPLIANCe MANAGeMeNT
ANTI -MONeY LAuNdeRING
Financial Review
096
110
244
246
MANAGeMeNT’S dISCuSSION ANd ANALYSIS
INdePeNdeNT AudITORS’ RePORT
ORGANIzATION
GLOBAL NeTWORK
Me
Dreaming
We
We believe that with Woori,our customers can make their dreams come trueBLACKPINK _ Jennie Me
Challenging
We
We believe that with Woori,our customers can overcome any challenges and become strongerBLACKPINK _ Rose Enjoying
Me
We
We believe that with Woori,our customers can enjoy their everyday lives to the fullestBLACKPINK _ Lisa Me
Continuing
We
We believe that with Woori,our customers can continue to ongoingly take the lead in setting & achieving their goalsBLACKPINK _ Jisoo For MyungSung Placon going global
with the best-in-class agricultural equipment,
Woori Bank is a forever companion.
MyungSung Placon strives for exclusive agricultural man-
agement for farmers for almost 20 years as a producer of hot
water protective curtains, while engaging in rockwool culture
for agriculture. It could be what it is today in the challenging
environment thanks to its unwavering efforts and passion for
high-efficiency agricultural management and “Woori Bank” – a
reliable partner at all times.
MyungSung Placon is a 100 percent exporter, and generates over
USD 70 million for export income per year. It currently exports to
Uzbekistan, but Woori Bank wishes for the company to achieve
outstanding results in different parts of the world and the two
could continue to play roles as partners for shared growth to a
greater extent. Woori Bank will support the company to foster
technical prowess and passion of MyungSung Placon through
solid partnership built up especially in times of hardship.
www.msplacon.com
Woori Bank endorses next-generation start-
ups that are spotlighted by one and the only
enterprise L Fin Co., Ltd. that deal with Mobile
Communication Base Transceiver Station based
technologies, which is highly authenticated and
safe from forgery, alteration, and counterfeiting.
Woori Bank's WiBee Fintech Lab fosters start-ups and provides
them opportunities to learn and acquire know-how related to
banking and finance. Woori Bank has reaffirmed its firm posi-
tion as a stepping stone for start-up growth. We are eternally
grateful to the staff of Woori Bank for helping us out in many
areas. We hope to generate favorable performance by bench-
marking such cases later when we work with other companies
in the financial sector.
We think that by fostering the growth of new enterprises, the
bank will help many companies transcend borders. We at L Fin
look forward to future successes in partnership with Woori Bank.
http://www.lfin.kr/
10
Jung, Yeong Hun
CeO of MyungSung Placon Ltd.
park,Young Kyung
CeO of L Fin Co., Ltd.
Woori Bank annual report 2018We Believe in Your Potential Jang, Hye Ree
director of AIzeN Global
lee, Seo Youn
CeO(designer) of
Lee Seo Youn hanbok
AIZEN Global, which provides Massive-mod-
el Financial ‘AI Chip’ called ABACUS, is mov-
ing forward with Woori Bank
Woori Bank has been the main sponsor of AIZEN from the early
stage, by providing premises and financial support. As a strate-
gic partner of Woori Bank, AIZEN provides AI-based delinquen-
cy prediction platform and is designated by Korea’s Financial
Services Commission(FSC) to conduct AI underwriting along
with Woori Bank.
Woori Bank is leading the digital transformation in the banking
industry with AIZEN’s technology. AIZEN combines data from
multiple sources (from Banks to Non-banks like e-commerce
and telco) and converts into ‘Credit’ data in Finance that add
values in the Data Economy. We believe Woori Bank can be an
innovation hub for banking technology and a great supporter of
startups like us.
www.aizenglobal.com
There is an artisan that preserves
traditions by operating a Hanbok
(traditional Korean dress) shop near
Gyeongbokgung Palace.
Woori Bank supports the passion of dressmakers preserving
and creating custom-made traditional cloting Hanbok, re-
strained in style with beautiful vivid colors.
Lee Seo Youn Hanbok might seem to be an ordinary Hanbok
shop, but it is different from other shops in that the designer
designs clothes and uses selected materials to make clothing
as well suited to people as their own skin. The shop highlights
the new charms of Hanbok that go beyond the traditional style.
As a customer, I am impressed that Woori Bank puts its custom-
ers needs first at all times and value their reliable and friendly
services. The designer that dreams of making custom-made
Hanbok for people from all works of life fosters yet another
dream with Woori Bank.
seoyoun2200@hanmail.net
11
Woori Bank annual report 2018We Believe in Your Potential Message
froM the Ceo
12
Woori Bank annual report 2018We Believe in Your Potential Woori Bank set its management goal for
2019 as ‘Together with Our Customers for
120 Years, Emerging as a Great Bank.’
First of all, I would like to extend my warmest gratitude to our valued
shareholders and customers for their continued support of Woori Bank.
2018 was a rewarding year for Woori Bank. It was a year in which the prestige
of Woori Bank was enhanced: we recorded outstanding performances in all
aspects including profitability, growth and soundness, achieved our best-ever
financial performance, ranked No. 1 in global networks and saw our global
credit ratings improve.
The efforts of all employees at Woori Bank to raise shareholder value and the
generous support of shareholders and customers contributed to the bank's
outstanding performance.
In addition, we upgraded our corporate value through successful conversion
into a holding company structure after four years of planning. I would like
to sincerely thank all shareholders for fully supporting the conversion, and
promise that Woori Bank will do its utmost to generate profits for shareholders
and customers by making concerted efforts going forward.
distinguished shareholders,
This year marks the 120th anniversary of the founding of Woori Bank. The
history of Woori Bank is that of finance in Korea built up by our customers
and shareholders. everything that we have achieved is, in part, thanks to
our shareholders and customers who have trusted and encouraged Woori
Bank. Against this backdrop, Woori Bank set its management goal for 2019 as
‘Together with Our Customers for 120 Years, emerging as a Great Bank.’
To this end, we will provide customized products and services for customers,
and proactively develop our presence in asset management, CIB and
innovative growth as new growth drivers for the future. By doing so, we will
do everything possible to better satisfy shareholders and customers through
unparalleled competitiveness.
13
Son, tae Seung
Chairman & CeO, Woori Financial Group Inc.
President & CeO, Woori Bank
Woori Bank is to write a new chapter in its
history through its transformation into
a new financial group from this year.
Furthermore, we will protect the assets of our customers through reinforced
risk management and internal controls and improve our best-in-class global
competencies in Korea, thereby positioning ourselves as Korea’s leading
global bank. With confidence in our status as the number one financial
institution in Korea, we will continue to fulfil our social responsibilities through
continued support for the financially underprivileged and SMes this year.
esteemed shareholders,
As you are well aware, Woori Bank is to write a new chapter in its history
through its transformation into a new financial group from this year. It is
expected that more income will be returned to shareholders by strengthening
the group's non-banking business and corporate value through M&As. I
would like to ask for your keen interest in the growth of Woori Bank, and
unwavering encouragement and support.
On a final note, from the bottom of my heart, I wish all our shareholders and
customers continued health and happiness.
Thank you.
14
It is expected that more income will be
returned to shareholders by strengthening
the group's non-banking business and
corporate value through M&As.
I would like to ask for your keen
interest in the growth of Woori Bank,
and unwavering encouragement
and support.
15
29
BoarD of
DIreCtors
Son, tae Seung
Chairman & CeO, Woori Financial Group Inc.
President & CeO, Woori Bank
Oh, Jungsik
Standing Audit Committee Member /
director, Woori Bank
Ro, Sung tae
park, Sang Yong
Outside director, Woori Financial Group Inc.
Outside director, Woori Bank
Outside director, Woori Financial Group Inc.
Outside director, Woori Bank
•Head, Global Business Unit, Woori Bank
•Executive Vice President, Head of Global Busi-
ness Group, Woori Bank
•Managing Director, Head of Financial Market
Business Division, Woori Bank
•MBA, Aalto University School of Business
•LLM, Seoul National University
•LLB, Sungkyunkwan University
•CEO, KB Capital
• Managing Director, Commercial Banking
Business Head, Citibank
•Senior Director, Risk Management Division,
Citibank
•B.A. in International Economics,
Seoul National University
•(Current) Chairman, Samsung Dream
Scholarship Foundation
•President, Hanwha Life Economic Research
Institute
•President, Korea Economic Research Institute
•M.A. and Ph.D. in Economics, Harvard University,
The Graduate School of Arts and Sciences
•B.A. in Economics, Seoul National University
•(Current) Professor Emeritus, Yonsei University
•Civilian Chair, Public Fund Oversight Committee
•Dean, School of Business, Yonsei University
•MBA and Ph.D. in Business Administration,
New York University
•B.A. in Business Administration,
Yonsei University
16
Woori Bank annual report 2018We Believe in Your Potential Woori Financial Group Inc.
Woori Bank
Chung, Chan Hyoung
Outside director, Woori Financial Group Inc.
Outside director, Woori Bank
•(Current) Advisor, POSCO Capital
•CEO, POSCO Capital
•Vice Chairman, Korea Investment
Management
•CEO and President, Korea Investment
Management
•MBA in Finance, Korea University Business School
•B.A. in Business Administration,
Korea University
park, Soo Man
Outside director, Woori Bank
Kim, Joon Ho
Outside director, Woori Bank
tian, Zhiping
Outside director, Woori Financial Group Inc.
•(Current) Attorney, Park Soo Man Law Firm
•Attorney, Kim & Chang Law Firm
•MBA, University of Oxford
•LLB, Seoul National University
•(Current) Professor of Industry-Academia
Collaboration Foundation, Chung-Ang University
•Voluntary Restraint Chairperson,
Korea Financial Investment Association
•Senior General Manager, Korea Post,
Ministry of Science and ICT(MSIT)
•Ph.D. in Science of Public Administration,
Kwangwoon University
•B.A. and M.A in Urban Public Administration,
Dongguk University
•(Current) Vice President, Beijing FUPU
DAOHE Investment Management Ltd.
•Vice President, Industrial and
Commercial Bank of China(ICBC) Middle East
Ltd. & ICBC London Ltd.
•Vice President, ICBC Branch of Sichuan Province
•IMBA, University of Hong Kong / MBA,
Southwestern University of Finance and
Economics
•B.A. in Government Economics Management,
Shanxi University of Finance and Economics
17
Woori Bank annual report 2018We Believe in Your Potential BoarD of
DIreCtors
Woori Financial Group Inc.
Woori Bank
Chang, Dong Woo
Outside director, Woori Financial Group Inc.
Bae, Chang Sik
Non-Standing director, Woori Financial Group Inc.
lee, Jae Kyung
Non-Standing director, Woori Bank
•(Current) CEO, IMM Investment Corp.
•Representative Partner, IMM Investment Corp.
•ABAS Leader-AKT, Samil Accounting Corp.
•LLB, Hanyang University
• Senior General Manager, Human Resources and
Administration, Korea Deposit Insurance Corp
(KDIC)
•Head of Human Resources Development, KDIC
•Head of Settlement and Recovery Planning 2,
KDIC
•B.A. in Trade, Hankuk University of Foreign
Studies
•(Current) Head, Collection General Dept.,
Korea Deposit Insurance Corp. (KDIC)
•Head, Personnel Support Dept., KDIC
•Head, PF Asset Recovery Dept., KDIC
•B.A. in Business Administration,
Dankook University
18
Woori Bank annual report 2018We Believe in Your Potential Corporate
governanCe
As of the end of december 2018, Woori Bank’s
Board of directors (BOd) consisted of eight ex-
ecutive directors: two standing directors, and
one non-standing director and five outside direc-
tors who were appointed to increase the relevant
expertise and independence of the BOd.
The five outside directors and one non-standing
director were selected based on their experience
in the fields of finance, management, law, etc.
Many of them are also well-known public figures.
In their respective capacities, they support and
monitor Woori Bank’s strategic decision-making
process and overall business affairs on a regular
basis.
2018 performance
The BOD held 13 meetings in 2018 to discuss a total of 44 agenda
issues and 52 briefings which all required decisions to be made.
Directors from a variety of fields collected information through
internal and external activities, and then offered real-world advice
by utilizing their expertise to contribute significantly to improving
management. As experts in economics, business administration,
accounting and law, directors contribute their expertise and infor-
mation gathered from years of experience in the field to enhance
the management efficiency of the bank and increase shareholder
value.
During regular quarterly meetings in 2018, the BOD was informed
of quarterly business results, reviewed current issues, and delib-
erated on the bank’s management plans.
Major agenda items of discussion included comprehensive brief-
ings regarding major loans; briefings on NPLs; progress reviews
and reports on review results concerning the implementation of
orders handed down by the BOD; and a rundown of activities at all
the committees that fall under the BOD.
At the December meeting, the Board of Directors also held in-
depth discussions about major issues facing Woori Bank amid con-
stant market changes, as well as giving final approval to the bank’s
2019 draft management plan.
Committees under the Board of Directors
In order to ensure the efficient operation of the Board of Directors,
Woori Bank has established a Board of Directors Management
Committee , Audit Committee, Risk Management Committee, Com-
pensation Committee, and Officer Candidate Recommendation
Committee.
Board of Directors Management Committee
The Board of Directors Management Committee actively supports
the activities of the BOD by studying and reviewing its overall
function and operation, while also establishing and reviewing
succession and training plans of the management team, including
directors.
Audit Committee
The Audit Committee establishes and executes internal audit plans,
makes outcome evaluations, carries out follow-up measures, and
provides improvement plans to evaluate and enhance the appro-
priateness of the internal control system and management perfor-
mance measures.
19
Woori Bank annual report 2018We Believe in Your Potential Risk Management Committee
2019 plans
The Risk Management Committee makes decisions about risk-re-
lated 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 overall risks arising from the bank’s management or
transactions in a timely manner.
Compensation Committee
In 2019, Woori Bank will make significant improvements to its man-
agement by discussing major agenda items at BOD meetings.
The quarterly BOD meetings will continue to focus on agenda items
such as carrying out an analysis of management performance re-
sults and reviewing the draft 2019 management plan, with ad hoc
meetings also being held whenever needed to deal with agenda
items related to various matters, such as management goals, or-
ganization and financing.
The Compensation Committee monitors the design and operation
of the bank’s performance-based compensation systems and is in
In 2019, Woori Bank will maintain its position as a reliable banking
charge of independently establishing compensation policies.
partner that excels and grows through transparent and efficient
management innovation.
Officer Candidate Recommendation Committee
The Officer Candidate Recommendation Committee recom-
mends candidates for the positions of President & CEO, outside
directors, and members of the Audit Committee.
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
9
7
2
2
24
44
3
5
18
2
24
52
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
20
Woori Bank annual report 2018We Believe in Your Potential Board of Directors
10
8
6
7
9
11
5
2
1
3
4
1. Son, Tae Seung
Chairman & CEO, Woori Financial Group Inc. / President & CEO, Woori Bank
7. Kim, Joon Ho
Outside Director, Woori Bank
2. Oh, Jungsik
3. Ro, Sung Tae
Standing Audit Committee Member / Director, Woori Bank
8. Tian, Zhiping
Outside Director, Woori Financial Group Inc.
Outside Director, Woori Financial Group Inc./ Outside Director, Woori Bank
9. Chang, Dong Woo
Outside Director, Woori Financial Group Inc.
4. Park, Sang Yong
Outside Director, Woori Financial Group Inc. / Outside Director, Woori Bank
10. Bae, Chang Sik
Non-Standing Director, Woori Financial Group Inc.
5. Chung, Chan Hyoung
Outside Director, Woori Financial Group Inc. / Outside Director, Woori Bank
11. Lee, Jae Kyung
Non-Standing Director, Woori Bank
6. Park, Soo Man
Outside Director, Woori Bank
Executive Vice President
Managing Director
Cheong, Chai Pong
Business Promotion Unit / Retail Banking Business Group
Suh, Young Ho
Global Business Group
Kim, Jeong Ki
Business Support Unit / Human Resources Group
Song, Han Young
International Trade Business Group
Lee, Dong Yeun
IT Group
Ha, Tae Joong
Lee, Jong In
Lee, Won Duk
Corporate Banking Business Group
Risk Management Group
Management & Finance Planning Group
Deputy Executive Vice President
Kim, Jeong Rok
Weon, Jong Rae
Lee, Choong Ho
Ko, Young Bae
Investment Banking Business Group
Operation & Support Group
Corporate Restructuring Division
Trust & Pension Business Group
Go, Jeung Hyeun
Information Security Group
Kim, Sung Jong
IT Planning Division
Choi, Hong Sik
Institutional Banking Business Group
Kim, Ho Jung
Real Estate Finance Business Group
Cho, Byung Kyu
Compliance Officer
Hwang, Weon Cheol
Digital Banking Business Group
Cho, Su Hyeong
Consumer & Brand Group
Park, Hwa Jae
Credit Support Group
Shin, Myung Hyuk
Small & Medium Corporate Banking Business Group
Jeong, Jong Sook
Wealth Management Group
Kim, Jong Deuk
Financial Market Business Group
* As of the end of April, 2019
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the future
Woori Financial Group Inc.
22
Woori Financial Group Inc. declared its new goal of becoming “Korea’s number one
comprehensive financial group” at its launch ceremony. About 500 distinguished
guests from Korea and abroad including the group’s top management, govern-
ment officials including the Chairman of the National Policy Committee and the
Chairman of the Financial Services Commission, and shareholder and customer
representatives were in attendance to celebrate the launch of Woori Financial
Group Inc.
With the launch of its new corporate structure, Woori Financial Group Inc. can now
compete on an equal footing with other financial groups. The Group will work to
establish itself as a global giant that captures the world’s attention, while achiev-
ing its goal of becoming the number one comprehensive financial group in Korea
through the intensive restructuring of business portfolios and implementation of
global strategies.
In addition, the Group will play a key role in the transformation of Korea’s financial
market through digital innovation, and stand at the forefront of corporate social
responsibility for the financially underprivileged, innovative companies and SMes.
The Group will implement the CIB model to fully leverage its strengths including
corporate banking capabilities and Korea’s largest overseas network, and provide
customized asset management services to enhance customers’ finances through
innovation in products and services. Woori Financial Group Inc. will make concert-
ed efforts to become the best-in-class comprehensive financial group.
23
Group Network
woori Financial Group Inc. offer a variety of
financial services to customers
Woori Financial Group Inc. is divided into four Units, two Divisions, and eleven Departments(including a secretariat)
based on essential operations required at launch. The Group has about 110 employees selected
both internally and externally. Its six subsidiaries are: Woori Bank, Woori FIS Co., Ltd., Woori Finance Research
Institute Co., Ltd., Woori Credit Information Co., Ltd., Woori Fund Services Co., Ltd. and Woori Private Equity Asset Man-
agement Co., Ltd. In the near future, Woori Card Co., Ltd. and Woori Investment Bank Co., Ltd. are to be incorporated into
the Group as subsidiaries of the holding company.(Co., Ltd. omitted from here on)
Woori
Financial
Group Inc.
(as of the end of
Mar. 2019)
100%
100%
100%
100%
100%
100%
Woori
Bank
100%
Woori
Card
59.83%
Woori
Investment Bank
99.87%
Korea BTL
Infrastructure Fund
Overseas
Subsidiaries
Woori
FIS
Woori Finance
Research Institute
Woori Credit
Information
Woori Fund
Services
Woori Private Equity
Asset Management
TUTU Finance-WCI
Myanmar
100%
Woori-Hanwha Eureka
Private Equity Fund
0.8%
Woori Smart Finance Indus-
try no.1 Private Equity Fund
2.14%
Woori Bank
America
100%
Woori Bank
(China) Ltd.
100%
PT Bank Woori
Saudara Indonesia1906. Tbk.
79.88%
AO Woori Bank
(Russia)
100%
Banco Woori
Bank do Brasil S.A.
100%
Woori Global Markets
Asia Ltd. (H.K)
100%
Woori Bank
Vietnam Ltd.
100%
Wealth Development
Bank Corp. (Philippines)
51%
Woori Finance
Cambodia Plc.
100%
Woori Finance
Myanmar Co., Ltd.
100%
WB Finance Co., Ltd.
(Cambodia)
100%
Woori Bank Europe
GmbH (Germany)
100%
woori
Card
Address
Building A, The-K Twin Tower, 50,
Jong-ro 1-gil, Jongno-gu, Seoul
Phone
82+ 1588-9955
Website
sscd.wooricard.com
Taking the Lead by Strengthening Internal Stability
Woori Card will always be an encouragement for our customers financial convenience. Woori Card values our customers
most, and all of our employees are doing their best to be the companions that go forward together with our customers.
The eyes and heart of Woori Card are always open to our customers. The employees of Woori Card will lead ahead in
providing useful products and convenient services so that they can experience the best value in every moment.
We will be the credit card company that leads change. Woori Card will surely become the financial company that
swiftly adapts to the fast changing digital environment and offer new, differentiated benefits to our customers.
woori
Bank
Address
51, Sogong-ro, Jung-gu, Seoul
Phone
82+ 2-2002-3000
Website
www.wooribank.com
woori
Investment
Bank
Address Woori Bank Myeongdong Finance Center
3F, 42, Myeongdong-gil, Jung-gu, Seoul
Phone
82+ 2-2000-6600
Website
www.wooriib.com
The lifelong partner bank supporting our customers and shareholders
for over 120 years
Woori Bank was the first Korean bank to be established in 1899 with national capital for the purpose of "facilitating
the flow of funds and contributing to the development of the national economy." Woori Bank has prospered along
with the development of the Korean economy to serve as a solid backbone for the Korean financial industry.
Based on our strong relationship with our customers for over 120 years, Woori Bank will continue to provide finan-
cial services that help customers, shareholders, and all of society to build a future of happiness, and to undertake
our social responsibility as a lifelong, reliable financial partner.
The Top Investment Bank, Providing Total Financial Services
Woori Investment Bank is the one and only total financial subsidiary of Woori Bank, representing the nation’s
traditional banking services.
Woori Investment Bank is committed to being a faithful asset management partner by providing upgraded products
and services to clients, using diversified licenses, credit ratings, and the network of Woori Financial Group Inc.
Woori Investment Bank promises to put in all efforts as a companion to achieve an abundant future for our customers.
woori
FIS
Address
Woori FIS, Woori Financial Sangam Center, 17,
World Cup buk-ro 60-gil, Mapo-gu, Seoul
Phone
82+ 2-3151-7000
Website
www.woorifis.com
2020 Global Finance ICT Partner
As a comprehensive financial services ICT company, Woori FIS is able to provide One-Stop services from development planning
to execution, based on expertise and hands-on experience derived from numerous projects working with banking, credit card,
fund, insurance, and other related companies.
Woori FIS is the first South Korean company to successfully implement a total IT outsourcing model from development to IT
infrastructure management. By acquiring three major international qualities of development, management, and security, our
excellent ICT management system was internationally renowned.
Based on these strengths, Woori FIS is leading the innovation of customer business value by supporting stable global servic-
es to over 300 foreign branches in the U.S., China, and others and playing key roles in building the WiBee Bank in the FinTech
wave.
woori
Finance
research
Institute
Address
12th Floor of Seoul City Tower, 110, Huam-ro,
Jung-gu, Seoul
Phone
82+ 2-2173-0500
Website
www.wfri.re.kr
The Insight Provider of Woori Financial Group Inc.,
The Opinion Leader of the Korean Financial Industry,
The Think Tank Leading the Global Financial Industry!
woori
Credit
Information
Address
3rd Floor of Donghwa Building, 15,
Eulji-ro 11-gil, Jung-gu, Seoul
Phone
82+ 2-2262-5800
Website
www.wooricredit.com
The Best Companion to Accomplish a Credit Society
The nation’s first credit information company that leads the market with a long history and expertise. Woori Credit Information
is the first domestic company to specialize in credit information, debt collection, and lease investigation, and was established
in 1991 with full investment by Woori Bank. The company acquired the A+ rating from the Enterprise Credit Rating, winning
shareholders’ confidence. Moreover, the company takes part in social contribution activities(for example, the 1 Company 1
Village Country Love initiative), and also supports activities related to socialwelfare, and environment protection. Being a
strong financial partner to creditors and a supportive partner to debtors for credit recovery, Woori Credit Information will be
stepping stones for them and the best partner to accomplish a credit society.
woori
Fund
Services
Address
3rd Floor of Woori Financial Sangam Center, 17,
World Cup buk-ro 60-gil, Mapo-gu, Seoul
Phone
82+ 2-3151-3510
Website
www.woorifs.co.kr
Accomplish Trust of 200 Trillion KRW in 2020
We will continue to serve and impress our customers, who are the most valuable to us, for the next hundred years. Woori Fund
Services provides various administration services including fund accounting and reference price computation for collective
investment vehicles and general administration for real estate investment trusts. As an affiliate of Woori Financial Group Inc.,
Woori Fund Services successfully completed the development of “FundOne”, a next generation administration system, in
August of 2014, and has exerted ongoing efforts to develop systems and talent to provide better services.
woori
private equity
Asset
Management
Address
6th Floor of Seoul Finance Center, 136,
Sejong-daero, Jung-gu, Seoul
Phone
82+ 2-6730-1200
As the think tank of Woori Financial Group Inc., Woori Finance Research Institute supports the decision-making of executives
and consults development strategies for affiliates, seeking balanced development of the group’s industry portfolio.
As the opinion leader and a specialized research institute leading financial industries both at home and abroad, we also share
our research results through various types of reports, seminars, and press releases.
Private Equity Asset Management Company, Leading Advanced Finance with Competitiveness
Established in October 2005 to develop a company specializing in private equity fund management representing Korea, by
registering with the collective investment of private equity funds it added the business of managing hedge funds to the
existing business of managing private equity funds.
120 years
Woori Bank
As the first financial group listed
in Korea, Woori Bank established
the foundation of Korean modern finance and
led financial history by opening the
first foreign branch.
120 years have passed, generating
values every year and overcoming
daily challenges.
Starting from “Daehan Cheonil
Bank”(meaning ‘number one bank
under the sky’) to Woori Bank(meaning
‘our bank’) as of now, our bank has been
the leading bank in the Korean banking
sector for over 120 years, contributing
to the development of
Korean history and finance.
Woori Bank will continue to
take the lead in developing Korea’s
wealth and economy for the
next centuries to come.
Birth of Korean
financial history
1899
1954
1899. 01
Established
Daehancheonil Bank
(originally
Commercial Bank)
1932. 12
Established
Chosun Trust Company
(originally Hanil Bank)
1899
1910
1930
1950
1909. 07
Built Gwangtonggwan,
the first modern bank
building among national
banks (currently Woori
Bank's Jongno Branch)
A reliable companion
of economic development
1955
1997
1956. 03
First public
offering on stock
exchange
1968. 11
1st among Korean
banks to open
an overseas branch
(Tokyo, Japan)
1982. 02
First in Korea to
install online ATM
1955
1970
1980
1995
1959. 06
Opened vault
for ladies
1977. 09
First in Korea to start
online business
between Seoul and
Busan
A New start
of Woori
1998
2005
2001. 04
Inaugurated
Woori Finance Holdings
Co., Ltd.
2003. 06
Opened office
in Moscow
2001. 12
Division-merger with
Peace Bank
2003. 08
Acquired the FRB
approval for taking over
Panasia Bank in the US
2005. 11
Opened Woori Finance
Plaza, the first
comprehensive finance
center in Korea
2000
2005
1999. 01
Merger of Commercial
Bank and Hanil Bank,
inauguration of
Hanvit Bank
1999. 12
Finished building
Hoehyun-dong main
office and relocation
2002. 05
Changed name to
Woori Bank and CI
(Corporate Identity)
2002. 12
Opened Ho Chi Minh
office in Vietnam
2004. 07
Opened Bank
History Museum,
the first museum in
Korea to specialize
in bank history
2004. 12
First to open Kaesong
Industrial Complex
Branch after the
division of Korea
Taking the lead as the
top global finance group
2006
2019
2008. 01
First among Korean
financial institutions
to establish local
business corporation
in Russia
2008. 11
Selected as
“Best Bank in Korea”
by The Banker for two
consecutive years
2010. 03
China WooriBank
qualified for
"international
settlement of yuan" as
the first Korean bank
2010. 11
Woori Bank IT
Department acquired
"ISO 27001
Certification" in all
departments
2006. 12
Established
Hong Kong Woori
Investment Bank
2012. 04
Awarded as Best
Bank in Korea by
The Asian Banker
for two consecutive
years
2012. 08
Established local
branch in Brazil
2012. 11
Awarded first
Grand Prize of
“Anti-Money
Laundering” by the
Financial Services
Commission
2006
2009
2012
2007. 01
2009. 01
2011. 04
Awarded 2006 Deal
of the Year
by The Asset
2007. 11
Established local
business corporation,
Woori Bank (China)
Limited
Woori Bank
establishment
documents,
“Establishment &
Accounting for
Daehan Cheon Il
Bank”, designated
as Seoul Tangible
Cultural Property
No. 279
Awarded as Best Bank
in Korea for Foreign
Currency Department
by The Asian Banker
2011.11
Selected as
“Best Bank in Korea
2011” by The Banker
magazine
2014. 01
Acquired final approval
to take over Indonesia
Saudara Bank
2014. 05
Awarded as
“Korea’s Top Bank
in Money Management”
by The Asian Banker
2014. 11
Woori Finance Holdings
Co., Ltd. merged
with Woori Bank
2016. 02
WiBee Bank
introduced in
Indonesia, Vietnam,
and Brazil
2016. 05
Opened Iran office
in Teheran (first among
Korean financial
institutions)
2014. 12
2016. 09
Acquired final approval to
merge PT. Bank Woori
Indonesia with
Saudara Bank
First in Korea to issue
$500 million Foreign
Currency Hybrid Bond
(CoCo bond)
2018. 02
Launched WiBee Homes,
a real estate information
platform
2018. 05
Built and activated a next
generation computer
system, WINI
(Woori Innovative New Infra)
2018. 06
Acquisition of “Vision Fund
Cambodia”, attainment of
410 global networks
2018. 10
Acquired approval for
European subsidiary
Putting forth the best
current net income
accumulated for three quarters
2013
2016
2019
2019. 01
Inauguration
of the Woori Financial
Group Inc.
2013.12
2015. 02
2017. 01
Awarded Grand Prize
of small loan Finance
by the Financial
Supervisory Service
Officially launched
PT. Bank Woori Saudara
Indonesia
2015. 05
Launched the first
mobile-only bank in
Korea, WiBee Bank
2015. 11
Opened Woori Finance
Myanmar, Global
Network no. 200
(first in Korea)
Selected as Best Wealth
Management Provider
2016 by World Finance
of the UK (first in Korea)
2017. 02
Opened first Woori bank
Office in Katowice, Poland
2017. 10
Selected as major bank
of the National Pension
Service
2017. 12
Reached 300 Global
Networks
Son Tae Seung
appointed as 51th President
& CEO of Woori Bank
02
/
Woori Bank Named
“the Bank of the Year in Korea”
by the Banker
On November 30, 2017, Woori Bank was
named the Bank of the Year in Korea at The
Banker Awards 2018 hosted by world-re-
nowned The Banker magazine. The Bank has
now been named the Bank of the Year for three
consecutive years after being selected as ‘The
Bank of the Year in Korea 2016’ and ‘Bank of the
Year in Asia-Pacific 2017.’
The Banker evaluated the top 1,000 banks from
120 countries around the world this year, and
selected one top bank by country and region,
with Woori Bank ranked as number one in Ko-
rea. The Banker is an international financial
affairs publication founded in 1926, owned
by the Financial Times of the U.K. It is a high-
ly prestigious magazine in the banking sec-
tor, which publishes the list of the Top 1,000
World Banks every year, a list frequently
quoted in the financial markets.
2018
news hIghlIghts
01
/
Acquired Approval for establishing a Financial Group and
president & CeO Son tae Seung of Woori Bank Appointed
as Chairman of Woori Financial Group Inc.
Woori Bank acquired approval to establish a
The Board of Directors of Woori Bank agreed
financial holding company from the Financial
to appoint President & CEO Son Tae Seung of
Services Commission on November 7. Woori
Woori Bank as the Chairman of Woori Financial
Bank can now lay the foundation for intensi-
Group Inc., based on his ability to stabilize the
fied competitiveness as a comprehensive fi-
organization in the early phase of its opera-
nancial group through conversion into a hold-
tions and efficiently handle issues requiring
ing company structure despite weaknesses
alignment between the holding company and
in market positioning e.g. comprehensive
the Bank. A holding company is to be estab-
financial services aligned with non-bank-
lished on January 11, 2019 to incorporate six
ing affiliates since Woori remained the only
subsidiaries including Woori Bank, 16 sec-
commercial bank without a financial holding
ond-level subsidiaries including Woori Card
company structure.
and one third-level subsidiary company (the
Woori Bank’s string of awards is attributable
Driven by a holding company structure, Woori
overseas subsidiary of Woori Card).
to its outstanding performance, its conver-
sion into a holding company to expand profit
Financial Group Inc. is expected to not only
We are making concerted efforts to create a
potential, upgraded profit-generating capa-
expand its non-banking business portfolio
blueprint at this critical juncture of our trans-
bilities by scaling up earnings in the fields of
and provide one-stop comprehensive asset
formation into a financial group in January
global business and asset management, and
management services but also engage in
2019 after successful privatization in 2016.
reinforced digital strategies to preemptively
diverse multifunctional businesses including
The launch of the financial group is just the
respond to the changing financial environ-
integrated customer management and ser-
start: we will soar to new heights as Korea’s
ment. All of this has contributed to raising
vices aligned with affiliates.
number one comprehensive financial group.
Woori Bank’s credibility and prestige.
36
Woori Bank annual report 2018We Believe in Your Potential 03
/
Supporting a Work-life Balance,
and preemptively Implementing
‘Woori together Holidays’ and a
’52-Hour Workweek for the First
time in the Financial Sector’
Woori Bank has taken the lead in spreading
a new work culture by adopting the 52-hour
workweek for the first time among commercial
banks as well as promoting ‘Woori Together
Holidays’ to strike a work-life balance since last
October. The 52-hour workweek refers to the
policy of working a maximum of 52 hours a week
including overtime and any work on official holi-
days or on weekends. The scheme was officially
launched in July this year in corporations with
300 or more staff, but is to be implemented in the
financial sector, including banking, starting from
July 2019. However, Woori Bank has preemp-
tively implemented the scheme for the first time
in the financial sector, so the 52-hour workweek
has been adopted in all branches and depart-
ments since October.
Branches and departments with frequent over-
time were allocated more staff and work hours
were adjusted to ensure a work-life balance along
with higher workplace efficiency by improving
work habits, introducing and complementing the
scheme and establishing a new workplace cul-
ture. The existing PC-off program and substitute
holiday scheme were improved, while flexible
work arrangements were also introduced. More-
over, a new workplace culture was established
by eliminating morning meetings at branches.
Although implementation of the 52-hour work-
week is subject to a grace period until July 2019,
the Bank fully adopted it for the first time among
commercial banks in order to strike a genuine
work-life balance for staff. As such, Woori Bank
has promoted an atmosphere of engagement in
workplace culture to induce a work-life balance in
the financial sector and played an exemplary role
as a pioneer in the industry.
04
/
Woori Bank’s legend-making WiBee Women’s
professional Basketball team Achieves
V10 – Its 10th Championship and 6th Consecutive title
The team broke new ground by winning the champi-
onship for the sixth consecutive season in the Women’s
Korean Basketball League (WKBL). It broke the previous
record with its 10th championship, for the first time in the
history of the WKBL. Head coach Wie Sung-woo took the
helm of the team and led the team to victory again after
a crisis at the beginning of the season. The team played
its third and final championship match of the 2017-2018
WKBL against the KB Stars of Cheongju at the Cheongju
Gymnasium in North Chungcheong Province on March 21
and scored an overwhelming victory with a score of 75-
57 against the KB Stars team.
The team’s consecutive titles in the first, second and third championship matches highlight the
team’s superb caliber. KB Stars remained outmaneuvered by Woori Bank due to their weaker
physical strength although Woori was fighting with its back to the wall in KB’s home ground of
Cheongju. The WiBee Women’s Professional Basketball Team showed an uneasy start at the
beginning of the season with two consecutive losses starting from the opening match due to re-
peated player injuries and retirement of center Yang Ji Hee. The KB Stars were not an easy team
to beat in the championship as they had defeated Woori Bank with a 4-3 record in the league.
However, the WiBee Women’s Professional Basketball Team won the trophy more easily than
expected thanks to the unique winning strategy of head coach Wie and his players.
05
/
establishing a Culture of
Communication through
‘Woori together plaza’
The Management Innovation Department
selected 15 specific tasks designed to en-
hance innovation in the corporate culture and
implemented “innovation of the corporate
culture driven by ‘All Together’” in order to
focus on ‘Woori All Together, All New Woori,’
the bank's slogan in 2018.
In addition, the content in ‘Woori Together
Plaza’ was updated to highlight Woori’s ex-
clusive culture of communication, guaran-
teeing anonymity and encouraging free and
constructive communication. Efforts were
made to establish a new culture of communi-
cation through diverse ideas including Woori
37
Communication Plaza, Woori Ombudsman,
Let’s Praise Each Other, Beer Day Requests
and CEO News, including comments from the
president and encouragement through feed-
back from departments at the head office.
‘Woori Communication Plaza,’ where field
staff and management communicate, has
seen a dramatic increase in the number of
postings and hits as comments with diverse
suggestions, complaints and encourage-
ment are posted. The number of postings
increased from 37 in 2017 to 408 in 2018 (as
of October-end), and the number of hits on
average went up by 80 percent to 1,749 in
2018 from 985 in 2017. Some iconic ideas that
led to practical changes included installing
air purifiers in branches, replacing chairs
at departments in the head office, avoiding
overnight workshops and improving service
over the phone at head office departments.
‘Woori Together Plaza’ will continue to serve
as a representative communication channel
for all employees.
Woori Bank annual report 2018We Believe in Your Potential brand marketing provides a maximum annu-
al interest rate of 3.7% for young people in
their 20s to accumulate assets, and achieved
a subscribed volume of KRW 33.5 billion
with 100,000 accounts. 22 percent of the
subscribed members were new or inactive
customers, and 61 percent of them have re-
mained active.
At the head office, a launching ceremony for
the first-generation publicity ambassadors
recruited among university students for
‘Twenty Woori’ was held on November 16 to
promote challenge and innovation among
youth. Through public recruitment that be-
gan in October, 60 university students were
selected as first-generation publicity am-
bassadors of ‘Twenty Woori.’
They are encouraged to promote Woori
Bank’s youthfulness and its 120-year history
for about five months, and plan on distrib-
uting product promotional content that will
resonate with those in their 20s. Other youth
marketing strategies supported by Woori
Bank included signing partnership agree-
ments with vocational (specialized) high
schools and an agreement to manage the ID
card system for Seoul National University,
which had a 50-year banking relationship
with a competing bank.
06
/
establishing
430 Global Networks
for the First time
Among Domestic Banks
ness by establishing a ‘global financial belt’
connecting Europe, Asia, the Middle East
and the Americas.
As a result , Woori Bank now operates a total
of 430 global networks, a mere three years
following the opening of its 200th global net-
work for the first time among Korean banks
in 2015.
2018 was a year for Woori Bank to solidify
it s presence as a global leading bank
once again. It completed the acquisition
of ‘VisionFund Cambodia’, a local financial
company with a nationwide network across
Cambodia on June 21 and changed its name
to ‘WB Finance.’
WB Finance was established in 2003 as a
retail-focused financial company with both
loan and deposit services with total assets of
KRW 260 billion. Woori Bank advanced into
Cambodia by acquiring Woori Finance Cam-
bodia in 2014 and built it into the 3rd biggest
player out of 70 small-and medium-sized
loan service companies.
Woori Bank has continuously implement-
ed acquisitions of financial companies to
expand investment, driven by the high eco-
nomic growth of Cambodia and many years
of experience in managing small-and medi-
um-sized loan service companies. Starting
with the acquisition of Bank Saudara of In-
donesia in 2014, Woori Bank newly launched
a specialized loan-focused financial com-
pany in Myanmar in 2015, acquired Wealth
Bank, a savings bank in the Philippines
and succeeded in establishing an overseas
subsidiary in Vietnam in 2016, and opened a
regional head office in India in 2017.
Woori Bank also acquired approval to estab-
lish an overseas subsidiary in Europe from
Germany's federal financial regulator BaFin
and the European Central Bank in 2018, thus
continuously expanding its overseas busi-
07
/
Implementing Marketing for
the Youth Brand
‘twenty Woori’,
promoting Challenge and
Innovation Among the
Next Generation
Woori Bank conducted marketing for its
youth brand ‘Twenty Woori’, to attract young
customers as part of its life-cycle market-
ing strategy. ‘Twenty Woori’ is Woori Bank’s
youth brand launched to fulfill the bank’s
social responsibilities by encouraging
the next generation and supporting their
growth. A savings product with the same
name launched in conjunction with youth
38
Woori Bank annual report 2018We Believe in Your Potential 08
/
Ranked 1st
in Market Share of earnings
from Bancassurance
(1st for 4 Consecutive Years in Market Share
and 3 Consecutive Years in earnings)
Woori Bank ranked 1st in bancassurance for
four consecutive years in its market share and
three consecutive years in its earnings, de-
feating its competing banks including Kook-
min, Shinhan and KEB Hana. It is undoubtedly
an amazing achievement, given that the bank
does not have an affiliated insurance compa-
ny since it was not a financial holding compa-
ny. The Head of WM Group visited the entire
Regional Banking Headquarters, and listened
to on-site feedback through heart-to-heart
conservations with Chair of PB Leaders
Group, which was fully taken into considera-
tion for corporate management.
Our bank also recommended leading prod-
ucts with competitive product line-ups for
sales branches and distributed video series
on best practices. Thanks to the backing of
on-site-driven sales support, Woori Bank
led the bancassurance market with an over-
whelming lead over the runner-up.
We significantly increased our market share
and earnings gap with competing banks,
while raising the portion of transactions
with corporations as a result of focusing on
selling three-year maturity savings products
for corporations based on a broad pool of
corporations by launching customer-driven
installment plans (1/3 plans, 1/2 plans).
We ensured strategic product management
and timely marketing, thereby maximizing
profits. Moreover, intensive targeting of the
niche marketing with specialized product
marketing by selling dental insurance and
non-face-to-face single payment-based
savings-type insurance, which contributed
to raising our image as a bancassurance pi-
oneer. We hope to soar even higher through
synergies with affiliates as we make a new
start as Woori Financial Group Inc.
A2 a1
stable
09
/
International Credibility Boosted
with Higher Credit Ratings
from Moody’s (A2 → A1)
Moody’s, the international credit rating
agency, announced that it raised Woori
Bank’s credit rating by one notch from A2 to
A1, and revised the Bank's ratings outlook
from ‘review or upgrade’ to ‘stable.’ Moody’s
adjusted Woori Bank’s rating outlook to ‘sta-
ble,’ while raising its credit rating to A1, be-
lieving that the Bank’s asset soundness and
capital adequacy have improved and remain
sustainable.
This manifests Woori Bank’s stronger fun-
damentals, the culmination of enhancing
asset soundness by continuously shrinking
the portion of loans in such economically
sensitive or vulnerable industries as ship-
ping, shipbuilding and construction, and
intensifying capital adequacy by reducing
risk-weighted assets and internal retained
earnings.
Moody’s upward adjustment of Woori Bank’s
credit rating heralded to the world that the
reliable international credit rating agency
recognized that the bank’s improved profita-
bility, asset soundness and capital adequacy
are not transient outcomes but a result of
upgraded fundamentals.
The new rating can also be interpreted to
mean that improvements in all financial
indicators have been witnessed based on
management stability achieved after the
appointment of President & CEO Son Tae
Seung.
39
10
/
Inclusion within the top 50
of the Best Korean Brands 2018
(Nominated by Interbrand)
Woori Bank was newly included within the
‘Best Korean Brands 2018’ nominated by In-
terbrand, known as the world’s largest brand
evaluation firm, on March 29, and the bank’s
brand value stood at KRW 1.7 trillion, ranking
16th. Interbrand is the world’s largest global
consultancy and has 21 offices in 17 countries
around the world. It has provided consulting
services to globally renowned brands in-
cluding Microsoft, BMW, P&G, Google and
SAMSUNG, and annually releases the list
of ‘Best Global Brands’ which is one of the
world’s most influential rankings.
Interbrand ranked Woori Bank at 16th among
the top 50 best brands in Korea, highlighting
its successful privatization, its global net-
work, the largest among commercial banks
in Korea and its efforts at innovation in digi-
tal finance. Woori Bank put in place a stable
governance structure through privatiza-
tion based on an oligopolistic shareholder
structure as of 2016-end and broadened its
business presence through Korea’s largest
global network by actively advancing into
Southeast Asian markets, including Indone-
sia and Vietnam.
Moreover, the bank is at the forefront of
digital banking through projects where new
innovative technologies are applied. It is
expected that 2019 will emerge as the year
to herald the new start of Woori Financial
Group Inc., whose prestige and recognition
are expected to grow.
Woori Bank annual report 2018We Believe in Your Potential CoMpany
struCture
Woori Bank established Woori Financial Group
Inc. in a comprehensive stock transfer scheme on
When the auction closed on November 11, 2016, 8 potential inves-
tors submitted bid letters for a total bidding volume of 33.7 percent.
The PFOC successfully resolved to sell a 29.7 percent stake to 7 se-
lected bidders. The PFOC’s long years of concerted efforts to privat-
ize became a reality, and guaranteed autonomous management by
private parties. As a result, on December 16, 2016, the PFOC decided
to terminate the Memorandum of Understanding (MOU) between
KDIC and Woori Bank, and actively encourage market-driven auton-
omous management led by oligopolistic shareholders.
Out of 2.97% of the KDIC’s stake exempted from the sale and spared
for call options for minority stakeholders selected in December 2014,
2.94 percent was exercised by the deadline of December 8, 2017.
The remaining equity stake held by the KDIC has remained steady at
January 11, 2019 to enhance the competitiveness
18.43 percent as of the end of 2018.
of the bank as a comprehensive financial group.
Meanwhile, Woori Bank established Woori Financial Group Inc. in a
comprehensive stock transfer scheme on January 11, 2019 to en-
At the time, the state-run Korea Deposit Insurance Corporation
hance the competitiveness of the bank as a comprehensive financial
(KDIC) owned 51.06 percent of the bank’s stake, and the plan was to
group and incorporated six companies as subsidiaries. Its six subsid-
sell 30 percent of the KDIC stake (a bidding volume of 4~8 percent
iaries are: Woori Bank, Woori FIS, Woori Finance Research Institute,
per bidder) through bidding in a Competitive Auction Scheme. In
Woori Credit Information, Woori Fund Services and Woori Private
principle, the shares were sold to the highest bid ders, but, the PFOC
Equity Asset Management. Woori Card and Woori Investment Bank
also took into account factors other than the bidding price, consid-
are to be incorporated into the Group as subsidiaries of the holding
ering the winning shareholders’ potential influence on Woori Bank’s
company in the near future.
management.
The KDIC launched this auction process by selling its Woori Bank
January 11, 2019 as a result of the scheme. Given the need to recover
stake, starting with a public note of sale on August 24, 2016. On Sep-
public funds invested, the Korean government intends to continue
tember 23, 2016, a total of 18 investors submitted letters of intent
with the sale of the remaining stake through discussions with the
with bidding volumes far exceeding the range from 82 percent to 119
Public Fund Oversight Committee.
The remaining equity stake held by the KDIC is 18.32 percent as of
percent out of the KDIC’s target 30 percent stake.
Woori Financial Group Inc.
(as of the end of Mar. 2019)
Woori
Bank
100%
Woori FIS
Co., Ltd.
100%
Woori Finance
Research Institute
Co., Ltd.
100%
Woori Credit
Information
Co., Ltd.
100%
Woori Fund
Services Co., Ltd.
Woori Private equity
Asset Management
Co., Ltd.
100%
100%
Woori-Hanwha Eureka
Private Equity Fund
0.8%
Woori Smart Finance Indus-
try no.1 Private Equity Fund
2.14%
Woori Card
Co., Ltd.
Woori
Investment
Bank Co., Ltd.
Korea BTL
Infrastructure
Fund
Woori Bank
America
Woori Bank
europe Gmbh
(Germany)
Woori Bank
(China) Ltd.
PT Bank Woori
Saudara Indone-
sia1906. Tbk.
AO Woori Bank
(Russia)
100%
59.83%
99.87%
100%
100%
100%
79.88%
100%
TuTu
Finance-WCI
Myanmar
Banco Woori
Bank do Brasil
S.A.
Woori Global
Markets Asia
Ltd. (h.K)
WB Finance Co.,
Ltd.
(Cambodia)
Woori Finance
Myanmar
Co., Ltd.
Woori Finance
Cambodia Plc.
Wealth development
Bank Corp.
(Philippines)
Woori Bank
vietnam Ltd.
100%
100%
100%
100%
100%
100%
51%
100%
40
Woori Bank annual report 2018We Believe in Your Potential awarDs
2018
The Bank of the Year 2018 in Korea, hosted
by The Bankers magazine(Financial Times)
Grand Prize for Maeil Business Newspaper
Star Brand (Financial Integration
Membership Sector),
hosted by Maekyung Media Group
Outstanding Institution for
Financial Customer Protection,
hosted by Financial Supervisory Service
Grand Prize for Kyunghyang
Advertisement (Financial Sector),
hosted by Kyunghyang Shinmun
Grand Prize for Segye Advertisement
(Communication Sector),
hosted by Segye Daily
The Korea Herald Global Finance Awards
2018 Financier of the Year,
hosted by Korea Herald
Grand Prize for Financial Customer
Protection Awards,
hosted by The Korea Economic Daily
Grand Prize for ROK Energy,
hosted by Minister of
Trade Industry and Energy
Grand Prize for Gender Cooperation,
hosted by Maeil Business Newspaper/
EWHA University
Korean Internet
Communication Association
The 11th Grand Prize for
ROK Social Media (Bank Sector),
hosted by Korean Internet
Communication Association
Grand Prize for ROK Financial Innovation
(CSR Innovation Award),
hosted by MoneyToday
The 7th Korea Knowledge Awards
for Outstanding Institution
(Management Sector),
hosted by Maekyung Media Group
Grand Prize for Financial Excellence
(Customer Satisfaction Sector),
hosted by Asia Today
The Asian Banker Transaction Awards
(3 sectors). hosted by The Asian Banker
magazine
Economic Review
Best Financial Products
'iTouch Woori Deposit'
hosted by Economic Review
Best Korea Brand TOP 50,
hosted by Interbrand
Grand Prize for ROK Best Banker
(Best Micro-finance Sector),
hosted by The Seoul Economic Daily
Grand Prize for Customer Satisfactory
Management (11 Consecutive Years),
hosted by The Korea Economic Daily
41
Woori Bank annual report 2018We Believe in Your Potential fInanCIal
hIghlIghts
Net Income
Unit: Wbn, U$mn in( )
2,033
(1,818)
1,512
(1,411)
1,261
(1,177)
1,059
(988)
+34.5%
2015
2016
2017
2018
Interest Income
Non Interest Income
Assets
Funding
Unit: Wbn, U$mn in( )
Unit: Wbn, U$mn in( )
Unit: Wbn, U$mn in( )
Unit: Wbn, U$mn in( )
+8.2%
)
4
5
0
,
5
(
1
5
6
,
5
)
3
7
8
,
4
(
1
2
2
,
5
)
5
8
6
,
4
(
9
1
0
,
5
)
5
4
4
,
4
(
2
6
7
,
4
-9.2%
)
9
6
1
,
1
(
2
5
2
,
1
)
0
5
9
(
2
6
0
,
1
)
9
0
8
(
7
6
8
)
9
5
6
(
6
0
7
Loan in Local Currency
Total Assets
Deposit
Total Funding
+9.4%
)
2
3
3
(
6
5
3
)
7
8
1
(
0
0
2
)
0
2
3
(
3
4
3
)
8
7
1
(
1
9
1
)
7
9
2
(
8
1
3
)
2
7
2
(
5
8
1
)
8
4
3
(
9
8
3
)
9
8
1
(
1
1
2
+9.8%
)
5
8
2
(
9
1
3
)
3
2
2
(
9
4
2
)
1
7
2
(
0
9
2
)
6
0
2
(
1
2
2
)
5
5
2
(
3
7
2
)
5
9
1
(
9
0
2
)
6
7
2
(
6
9
2
)
9
1
2
(
5
3
2
5
1
0
2
6
1
0
2
7
1
0
2
8
1
0
2
5
1
0
2
6
1
0
2
7
1
0
2
8
1
0
2
5
1
0
2
6
1
0
2
7
1
0
2
8
1
0
2
5
1
0
2
6
1
0
2
7
1
0
2
8
1
0
2
* Consolidated Basis, Based on exchange rate of KRW1,118.10/USD as of Dec. 31 2018
Net Income(Continuing Operations) attributable to owners
* Consolidated Basis, Total Assets include Trust Account
Based on exchange rate of KRW1,118.10/USD as of Dec. 31 2018
42
Woori Bank annual report 2018We Believe in Your Potential Dividend
Unit : %
dividend per Share
(KRW)
Payout Ratio
(%)
2017
2018
600
650
26.71
21.52
* 2017 : including the interim dividend 100(KRW)
Asset Quality (Npl Ratio)
NPL Ratio (Bank)
Unit : %
1.47
0.98
0.83
0.51
2015
2016
2017
2018
Capital Adequacy
Unit : %
13.66
10.43
8.47
2015
15.29
12.68
10.50
2016
Credit Cost Ratio
Unit : %
BIS Ratio
Tier1 Ratio
CET1 Ratio
15.40
13.03
10.95
15.65
13.18
11.15
2017
2018
0.45
0.37
0.34
0.21
2015
2016
2017
2018
* Consolidated basis Credit Cost Ratio = Credit cost/average Total Credit balance
Cost-to-Income Ratio
Unit : %
Cost-to-Income Ratio
(excluding ERP Expense)
56.3
56.1
49.9
50.6
2015
2016
2017
2018
profitability (ROA & ROe)
Unit : %
ROA
ROE
+2.3%p
9
6
.
9
2
4
.
7
6
3
.
6
9
6
.
5
2
6
.
0
8
4
.
0
1
4
.
0
6
1
0
2
7
1
0
2
8
1
0
2
7
3
.
0
5
1
0
2
* Consolidated basis
* Cost-to-income ratio =SG&A expense / (Interest Income + Non-Interest Income)
43
Woori Bank annual report 2018We Believe in Your Potential Business
Operations
046
048
050
052
054
056
058
062
064
066
Retail Banking
Real estate Finance
Wealth ManageMent
coRpoRate Banking
sMe Banking
institutional Banking
gloBal Business
inteRnational tRade Business
investMent Banking
tRust & pension Business
Retail
Banking
Launching ‘Twenty Woori’ as a Youth Brand for
attracting Young Customers (aged 10~30’s)
Woori Bank launched ‘Twenty Woori’ a brand to attract future
young generation customers aged 10~30’s in 2018. We established
the image of a ‘young bank’ with products and services that are
preferred by those in their 20s, while engaging with the concerns
faced by youths who face difficulties as job seekers and the gloomy
younger generation that has given up on essentials like marriage
and finding a job, and fulfilling the bank’s social responsibilities to
support youthful dreams.
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 lev-
el, our prime concern remains providing custom-
ized financial products and services to our clients.
2018 Performance
In 2018, the number of Woori Bank retail customers is approximate-
Twenty Woori Installment Savings is a product exclusively designed
for those aged 18 through 30 and has grabbed attention by provid-
ing a maximum interest rate of 3.7 percent to support young people
as they build their asset portfolio and organizes overseas trips
for university students to celebrate product launches. In addition,
Woori Bank sponsors a pool of university student ambassadors to
promote the Twenty Woori brand, continuously exploring areas of
interest and the latest trends among university students, and con-
ducting marketing to boost communication. A pool of 60 university
ly 23.0 million, a number that drives us to do our best in developing
student ambassadors for Twenty Woori is at the center of promoting
innovative and differentiated products. Woori Bank has imple-
Woori Bank through social media. They are promoting awareness
mented projects to ensure a broader retail customer base including
of Woori Bank by producing videos and posters, etc. for the bank’s
the Baby Project, the School Project, and the Teens Future Dream
participation in major events and its major products.
Project, presenting diverse financial products and services by life
stage: products designed for infants, students, employees, home-
makers 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 concluded new prime power loan (PPL) agree-
ments for the employees of businesses with prime credit ratings
and also handled loans related to employee stock ownership plans
(ESOP) for companies going public with initial public offerings
(IPO). We have measures in place to enable customers to handle
banking transactions 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.
Woori Bank is a ‘Bank that Understands Youth,
Supports their Dreams, and Stands by the Younger
Generation like a Truely Caring Friend’
Poster for Twenty Woori
Installment Savings
Emblem of Twenty Woori
Poster used for recruiting
university student ambassadors
for Twenty Woori
46
Woori Bank annual report 2018We Believe in Your Potential A New Product Lineup by Life Stage Brand Strategy,
aiming to attract New Customers and make Woori Bank
the Primary Banking Partner for existing Customers
Besides the marketing of Twenty Woori targeting customers aged 10
~ 30’s, Woori Bank provides customized products and services 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 students, employees, and senior citizens at
retirement age, and are tailored to match the generational needs and
benefits preferred by each group.
We held the ‘Woori Children’s Happy Future Event’ so that Woori Bank
could be the first bank used by kids by offering installment savings
and housing subscription products for infants and providing vouchers
upon the purchase of insurance products. We also launched ‘Woori
Magic Installment Savings’ for students in vocational high schools,
and provided products with high-interest rates to vocational school
graduates that land jobs after high school graduation.
For full-time workers, we launched an installment savings prod-
uct focused on travel by reflecting the increased interest in travel,
and high interest rates and diverse affiliated services to customers
through a bank-card company-airline-duty free shop alliance. We
also raised product competitiveness by remodeling existing auto
loan products and enhanced our sales capabilities by aligning our
strategies with dealer/alliance platform companies. This has led to
higher sales of auto finance loans associated with new and used car
purchases, and contributed to lower financial costs because we al-
lowed customers from other capital firms to repay existing financial
obligations at low interest rates.
Total Customers of Retail Banking
[Unit: million customers]
+ 0.5
Year on Year
2017
2018
22.6
23.1
Loans/Deposits Performance-based : Managerial Accounting-based
Total Loans of Retail Banking
[Unit: KRW trillion]
2017
108.5
2018
115.1
Total Deposits of Retail Banking
[Unit: KRW trillion]
2018
2017
90.7
91.3
Optimized and Efficient Distribution Channel Networks
Responding to the changing financial environment, Woori Bank
quickly entered into areas with increased demand for financial ser-
vices, including newly developed areas, major commercial zones and
newly growing areas. The bank also merged or relocated branches in
areas with lower commercial profitability and those with overlapping
geographical coverage. While six new branches opened, five were
merged, and 13 were relocated; as of the end of 2018, a total of 877
branches are in operation. Establishing an effective branch network
improved our profitability. To boost competitiveness in our sales
organization through a highly effective channel strategy, the bank
continues to operate Dedicated Branches for Retail Banking. This
specialized retail distribution channel strengthened our sales compe-
tencies in the individual retail business.
With this move, we also built a distribution system under which finan-
cial centers can concentrate on corporate business, and dedicated
branches can focus on retail. We also run a Total Consulting Team as
an integrated window, while separating the windows for corporate
banking and consultations, respectively, in order to raise efficiency in
personnel management and competencies.
2019 Plans
In 2019, as we mark the 120th anniversary of Woori Bank, we plan to
implement a project to attract more target customers by conducting pro-
jects to establish a corporate image focused on history and youthfulness.
For the Twenty Woori brand, we plan to raise the brand recognition of
Woori Bank and launch related products under sponsorship contracts
(2019~2020) for the League of Legends Champions Korea – which is a
popular gaming trend among young customers. The brand ambassa-
dors’ marketing via social media is likely to become even more success-
ful when we initiate our heritage marketing campaign to celebrate the
bank's 120th anniversary. In addition, we will launch a business unit tar-
geting seniors to attract senior customers as Korea becomes a society
defined by low birth rates and population aging, and establish an ‘online
platform’ providing exclusive package products and encompassing both
finance and areas of interest for the elderly. We will also open ‘Senior
Centers’ by leveraging unused space to support diverse programs for
seniors, and contribute to projects that promote job creation for seniors
through partnerships with related institutions. Furthermore, we will
continue to play a role as the No.1 bank that stands alongside customers
by allocating efficient services in the field of microfinance, especially in
financially underprivileged areas, while, on the channel side, pursuing
the optimization of branches by type, in consideration of the financial
scale, characteristics and customer profile of each region.
47
Woori Bank annual report 2018We Believe in Your Potential Real Estate
Finance
2018 Performance
In 2018, the Real Estate Finance Business Group once again be-
came the undisputed leader in terms of NHUF market share. Woori
Bank has been the managing custodian bank of the NHUF for the
past ten years, and a wide range of housing finance products have
showcased the Bank’s distinguished business performance.
Consequently, Woori Bank was selected again as the manag-
ing custodian bank for the NHUF in January 2018, as the bank in
charge of business delegated by the NHUF for the next five years.
We also took the initiative to pioneer the domestic housing finance
product market by ensuring preemptive responses to market
in 2013, for the systematic and professional
changes in accordance with government policies.
management of real estate financing, Woori 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 manag-
ing custodian (formerly general treasury) bank.
Increase in Customer Base as the Managing
Custodian Bank for the NHUF
The NHUF business is critical to broaden financing options for the
demand side of housing finance, including for low-income indi-
viduals and families. As the managing custodian bank, Woori Bank
is in charge of financing and dispersing funds. In 2018, the bank
accounted for a market share of 40.9 percent in loans to the de-
mand-side and a market share of 26 percent in housing subscrip-
tion savings plans by providing a diverse range of housing finance
products even after its reselection as the managing custodian
our goal is to satisfy the diverse needs of our
bank for the NHUF.
customers— hence we provide not only products
that complement Woori Bank accounts but also
nhuF products available for low-income individ-
uals and families.
Throughout the year, one million new customers subscribed to
housing subscription savings plans designed to enable them to
own a new residence in the future. We will work hard to build a
solid foundation for this business so that a greater number of cus-
tomers will be able to take advantage of NHUF products offered
through Woori Bank.
Leading Korea’s Digital Financial Market by
Upgrading the Total Real Estate Information Platform
The Real Estate Finance Business Group has taken the lead in
transforming the non-face-to-face digital housing finance market
by upgrading ‘WiBee Homes,’ our customer-friendly real estate
information platform as well as ensuring preemptive responses
48
Woori Bank annual report 2018We Believe in Your Potential to changes in the financial environment in 2018. After the launch of
To that end, we will expand the volume of mortgage loans by KRW
‘WiBee Homes’ (a total real estate information platform) in January
2 trillion in 2019 to serve as a solid foundation that protects the
2018, Woori Bank has moved ahead in the mobile real estate mar-
assets of Woori Bank customers. 2019 will be the year in which we
ket by actively developing a diverse range of content and services
utilize our diverse and customized services to lead the real estate
in order to provide a real estate platform environment that is con-
finance market.
venient for customers.
Demand-side Housing Subscription Loans (M/S)
[Unit: %]
2018
2017
2016
39.6
40.9
43.0
Housing Subscription Savings Plans (M/S)
[Unit: %]
2018
2017
2016
24.8
26.0
26.9
no.1
Market share
2019 Plans
We intend to maintain our number one position in terms of NHUF
market share in 2019, and will do our best in our role as the man-
aging 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
Jeonse (Key Money) Deposits, Monthly Rental Loan Plans and the
Beotimmok (Support) Jeonse Deposit Loan Plans.
At the same time, we will focus on attracting more customers to our
housing subscription savings plans. Building on our experience,
expertise, and IT system in financing and managing funds, we will
provide active support for housing welfare projects for low-income
individuals and families and take action to revitalize Korea’s na-
tional housing market and help make it more transparent.
We will also participate in government measures to provide sup-
port in the form of housing funds for non-speculative home buy-
ers and establish asset portfolios that will ensure balanced asset
growth, optimal profitability, and minimum risk.
49
Woori Bank annual report 2018We Believe in Your Potential Wealth
Management
the Wealth Management (WM) group oversees
not only services for private Banking (pB) cus-
tomers but also the bank-wide asset management
business including services for corporate custom-
ers. the WM group consists of 11 teams under
three departments (the WM strategy department,
WM Business department, and WM advisory
center). the WM group manages bank-wide as-
sets, devises business strategies for pB custom-
ers, and suggests bank-wide house-views. the
2018 Performance
Performance of Affiliate Products (Funds and Bancassurance)
We ranked No.1 in net fund value, sales volume of bancassurance
and income in 2018. In the fund sector, in particular, the balance
increased by KRW 1.7 trillion thanks to the launch of new mar-
ket-leading products (532 private equity funds and 74 publicly
offered funds, etc.) and targeted marketing, which was the high-
est increase rate among competing banks. In the bancassurance
sector, Woori Bank accounted for 38.9 percent of the total market
share among Korea's four major commercial banks by diversifying
its portfolio based on product competitiveness, thus enhancing its
position as the leading bancassurance provider.
Developing a Specialized Workforce and Strengthen-
ing Competencies in Asset Management
Woori Bank provides significant support and investment to foster
a specialized workforce for asset management. We provide cus-
tomized PB/FA training based on the straightforward CDP, and
nurture next-generation personnel at the early stage through pub-
lic competitions. In 2018, we launched new courses affiliated with
external institutions and conducted high-level training to boost
the competitiveness of our specialized workforce. Having adopted
Woori Bank’s exclusive PB branch manager scheme, we dissemi-
nate customer management techniques from outstanding senior
colleagues and sales coaching to business sites.
group also nurtures a specialized workforce for
Expanding the Customer Base
asset management, establishes non-face-to-face
channel asset management strategies and runs
the required systems. the WM Business depart-
ment selects fund and bancassurance products,
fosters marketing strategies, develops products
for investment, selects related products, and con-
ducts follow-up management. the WM advisory
center provides tax consulting, real estate advi-
sory services and specialized consultations for
high-net-worth (hnW) customers of Woori Bank.
as of the end of 2018, the WM group manages a
total of 723 WM distribution channels. 744 private
bankers, financial advisors (Fas), and sales pro-
fessionals deliver comprehensive asset manage-
ment and consulting services to hnW customers
through an independent pB brand called ‘two
chairs.’
At the core of the WM business is our base of PB customers. In 2018,
Woori Bank newly attracted 13,000 PB customers, which is the highest
increase rate (7.1 percent) among Korean commercial banks. This is
the result of wide-ranging business support for new PB customers as
well as marketing that targets CEOs through collaboration between
PBs/FAs and SME relationship managers (RMs).
Ranked No.1 among Commercial Banks, Dedicated
Management of Customer Returns
We launched the Investment Strategy Team under the WM Strategy
Department to focus on customer-oriented business activities in
2018. We established a bank-wide house-view based on detailed
market research by recruiting numerous specialists. Moreover,
50
Woori Bank annual report 2018We Believe in Your Potential we intensified product and market monitoring by appointing asset
offer wide-ranging solutions in one location with not only excellent PBs
management risk managers. We reflect returns for customers in
but also tax and real estate specialists. The centers plan to cater to the
our evaluations of branches and PBs/FAs and periodically award
diverse needs of PB customers by launching exclusive products and pro-
high-performing employees in order to promote the importance of
viding differentiated services. Second, we plan to nurture a specialized
customer returns at business sites. Woori Bank has achieved high
workforce for asset management, equipped with best-in-class compe-
customers returns amid volatility in the market due to global issues
tencies. We also plan to run intensive development courses aligned with
in 2018 and recorded the best performance among Korean com-
specialized external institutions. We will foster best-in-class specialists
mercial banks.
2019 Plans
The Wealth Management (WM) Group of Woori Bank will take off as the
leading player in the market by taking preemptive measures to safe-
guard its customers, business sites and preparedness for the future.
Woori Bank will rise higher as a financial group by carrying over the
history and traditions cultivated over the past 120 years in the field of
asset management. First, we plan to gradually expand the Two Chairs
(TC) Premium Centers to wealthy districts to provide high-quality asset
management services to HNW customers. The TC Premium Centers
in Korea by offering high-quality courses through the Korea Financial
Investment Association. Third, we will expand our asset management
business beyond Korea. We will support local business operations and
expand our customer base by organizing diverse investment seminars
for Koreans living abroad and local residents through full utilization of
our global channels. Lastly, we plan to dominate the non-face-to-face
channel asset management market by upgrading the rebalancing fea-
tures and improving customer convenience through the sophisticated
robot advisors launched in 2017 to help every customer build their asset
portfolio.
Fund Sales Status (as of December-end, 2018)
[Unit: KRW trillion]
WM Group
2018
2017
18.4
16.7
WM Strategy
Department
WM Business
Department
WM affairs team
Fund Business team
WM Business team
WM platform team
investment
strategy team
Bancassurance
Business team
investment product
development team
isa trading team
WM Advisory
Center
asset
Management
consulting center
tax consulting
center
Real estate investment
support center
Wealth Management Business Team: Changes in team nomenclature and roles (from 2019)
Investment Strategy Team: Newly launched (in 2018)
Variation in Market Share for Affiliate Products
[Based on the rated balance,
Unit: %]
[Based on the amount of monthly install-
ment conversion, Unit : %]
+ 1.8
+ 5.2
2017
2018
2017
2018
24.8
26.6
Funds
33.1
38.3
Bancassurance
51
Woori Bank annual report 2018We Believe in Your Potential 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 2018,
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 man-
agers of corporate banking branch have driven
Woori Bank to become the best in class in ko-
rea, the general managers of corporate banking
center have supported the affiliate and partner
companies of our corporate customers while tak-
ing care of retail banking targeting officers and
employees at associated firms. thanks to these
competent managers, the corporate Banking
Business group can satisfy the varying needs of
our corporate clientele. our corporate customers
have grown into major global players over the
past 119 years, and we are very proud to have
been their chosen financial service provider. to-
day, we are doing our best to offer the expertise
we have gained over the years to a wider custom-
er base.
2018 Performance
In 2018, the Corporate Banking Business Group maintained its
number one market 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 Diamond 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 sur-
vive and prosper together and to build a financial culture through
which we can help each other. As of the end of 2018, the Corporate
Banking Business Group (including Corporate Finance Centers) is
managing a total of KRW 22.8 trillion in assets, with an operating
income of KRW 746.2 billion, and an export/import volume of USD
312.3 billion.
Strengthening Relationship on a Continual Basis
As our corporate customers turn into major global players, their fi-
nancial 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 customers. Celebrating its 16th an-
niversary this year, the club acts as a channel for us to strengthen
customer relationships and understand the financial needs of our
customers at the right time so that we can respond in advance to the
rapidly changing environment for financial services.
Supporting ‘Sangsaeng’(mutual growth) for Large
Companies and SMEs
The Korean word ‘sangsaeng’ refers to mutual life-giving sym-
biosis, as well as helping and sharing prosperity with each other.
As the emphasis on corporate social responsibility grows, Woori
Bank is committed to fulfilling its role as a corporate citizen, offer-
ing sangsaeng product packages in which we enter into business
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 2018, we
have extended a total of KRW 725.0 billion in loans to 2,516 firms
through this product.
52
Woori Bank annual report 2018We Believe in Your Potential 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 2018, we offered a total of KRW 540.1 billion
in loans to 6,207 companies. Woori Bank has the largest number of
big corporate customers in Korea, and this wide client network en-
ables us to manage a system of sangsaeng financing to encourage
mutual aid, for example by reducing financial costs for SMEs. We
thus contribute to the co-prosperity and growth of big companies
and SMEs using our comprehensive network.
Expanding Global Business Alignment
2019 Plans
The Corporate Banking Business Group will establish a stronger
basis for corporate finance by establishing a new corporate culture
under its business goal of ‘2019 Corporate Finance: New Challeng-
es! New Records”. To this end, first, we will develop new income
sources and specialized products in a bid to dramatically increase
non-interest income (‘Profit Maximization!’); and second, we will
digitalize the business process through more robust corporate dig-
ital finance marketing and the utilization of big data for corporate
finance (‘Digital Innovation!’).
We have intensified support for global collaboration by increasing
Lastly, we plan to transform the A/C overseen by the Corporate
the volume of deposits and loans in local subsidiaries of affiliates in
Banking Headquarters and systematize CDP management for
order to help them to explore untapped markets abroad as well as
personnel without requiring sales expertise for higher efficiency
to do business in Korea. As a result of collecting and providing in-
in corporate banking units. Moreover, we plan to reinforce product
formation on overseas branches and offices by setting up a global
competencies and improve the performance management system
database and enabling employees abroad to engage in integrated
to raise our sales capabilities and drive.
Woori Bank is the Major Creditor Bank for 10 Large Enterprises
(Total number of Large Enterprises under Main Creditor Bank management: 31 as of 14th May.
2018)
marketing, we attracted approximately KRW 2.85 billion in global
deposits and loans in 2018. This has significantly contributed to
raising overseas performance and income. For instance, we played
a leading role in attracting interest income of about KRW 3 billion
via overseas branches including Woori Global Markets Asia Limited
and income from arrangement fees of KRW 1 billion by arranging
the issuance of floating rate notes (FRN) valued at USD 100 million.
As such, the Corporate Banking Business Group serves as the basis
for generating new income in Woori Bank by proactively contribut-
ing to the growth of Woori Bank in the global market.
53
Woori Bank annual report 2018We Believe in Your Potential SME
Banking
the small and Medium corporate Banking (sMe
Banking) Business group oversees financial
services for sMe clients. as of the end of 2018,
it manages kRW 84.3 trillion in loans and kRW
53.0 trillion in deposits for 1.58 million customers
consisting of individual entrepreneurs, sMes,
and high-potential enterprises. to maintain sat-
isfaction levels among sMe banking customers,
we provide competitive products and various
financial and non-financial services. Moreover,
we foster and manage sMe relationship manag-
ers (RMs), soho RMs and next-generation sMe
RMs. these experts in sMe financing and asset
management deliver top-notch financial services
and content to our clients.
2018 Performance
We saw an increase of approximately 100,000 individual entrepre-
neurs, SMEs and high-potential enterprises amongst our clientele
Marketing Activities targeting with SMEs with High
Growth Potential
In 2018, we maintained our focus from the previous year to provide
marketing information to help branches appeal to SMEs with high
creditworthiness by providing them with information on targets by
product and customer and information on the corporate partners
of large companies. We have allocated pre-approved credit lines to
attract SMEs & MEs with high creditworthiness, and strengthened
site-oriented business support based on a list of companies selected
by each branch. As the SME Banking Business Group pursued a mar-
keting strategy to increase assets of high creditworthiness, the size
of loans to corporate customers with high credit ratings(BBB and
above) grew by KRW 5.7 trillion by the end of 2018.
Concentration on Technology Financing &
Reinforcing Growth Potential
To attract additional high creditworthy tech-savvy companies,
the target audience of the Woori R&D Plus Loan was expanded. In
2018, we launched the ‘Woori Industrial Technology Growth Loan,’
to provide expanded support for outstanding companies in the
fields of R&D and innovative growth endorsed by the Ministry of
Industry, Commerce and Energy. Through continued support with
preferential interest rates for companies receiving benefits relat-
ed to tech financing and improvements to the tech credit bureau
(TCB) system, we saw an increase of about KRW 3.7 trillion in low-
cost deposits and an additional 5,000 borrowers (as of 2018-end)
compared to the end of 2017. In 2018, we also saw an increase
of 100,000 customers and KRW 1.4 trillion in low-cost deposits,
which reinforced our profitability and loan growth potential.
in 2018. Potentially non-performing assets decreased by KRW 1.9
Productive Financing and Inclusive Financing in Action
trillion and increased by KRW 5.7 trillion, raising the performing
asset rate to 83.3% and drastically improving asset soundness.
Our marketing strategy concentrated on the acquisition of strong
SMEs and retention. In 2018, we followed up on our 2017 strategic
targets such as policy financing, and guaranteed loans. Simultane-
ously, 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 satisfac-
tion. Another area of focus for us included training and fostering in-
house SME experts.
To continuously prioritize productive financing in action, we formed
new partnerships with credit guarantee organizations, local
governments, and public institutions. Also, we strengthened our
interest rate competitiveness through policy financing and pro-
vided diverse job training programs to sales staff. Meanwhile, we
increased our special contribution to the Korea Credit Guarantee
Fund and the Korea Technology Finance Corporation, and provided
intensive support for new and promising SMEs, companies that
create jobs and those leading the fourth industrial revolution based
on partnership guarantees. We also suggested a new paradigm in
54
Woori Bank annual report 2018We Believe in Your Potential financial support by extending direct investment of about KRW 20
staff training. With these programs, Woori Bank is doing its best to
billion through public competitions open to companies with inno-
fulfill its duty as a true financial partner. The corporate consulting
vative growth potential for the first time in the financial sector in
services offered by Woori Bank are the ultimate culmination of
2018. We also provide customized policy financing for individual
experience and expertise gained in the Korean banking sector. We
entrepreneurs and small business owners through special contri-
have assorted programs for companies that do business with us,
butions and agreements with 16 regional guarantee foundations.
covering management consulting, CFO consulting, family business
We also worked with the Yellow Umbrella Mutual Aid Foundation
succession consulting, operations consulting, tax consulting, and
to provide a stable social safety network and entered into a con-
many more. In 2018 alone, we completed a total of 100 consulting
tract with the Ministry of Employment and Labor to expand support
projects, demonstrating our competitive edge in this area.
measures for social enterprises. As such, we are continuously en-
gaged in programs to strengthen inclusive financing.
Diversified Special Products
2019 Plans
In 2019, the Small & Medium Corporate Banking Business Group
We reinforced support for outstanding companies with innovative
plans to provide systematic financial support from the start up
growth by launching the ‘Woori Industrial Technology Growth Loan.’
stage to scale up through implementing differentiated marketing
We also extended specialized financial support for SMEs that contribute
strategies for each stage of SME growth. We will also spearhead
to job creation by remodeling the ‘Woori Cube Loan’ and ‘Power Bank-
‘productive financing’ and ‘inclusive financing’ so that customers
book Loan for Woori Affiliated Stores’ and launching ‘SME Installment
and the bank can grow together. To this end, we will expand prefer-
Savings for Creation of Good Jobs.’ Furthermore, we started the ‘BC
ential support for each financial asset and business type to attract
365 Deposit Service’ which enables early deposits of card payments
new companies, startups and venture businesses by strengthening
for small/low-yield affiliated business operators through a business
agreements with policy institutions. We will also launch special-
agreement with BC Card for the first time in the financial sector.
Retaining Customers & Offering Top Consulting Ser-
vices
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 leader-
ship 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
ized products to support a more diverse group of SME customers
ranging from small business owners to corporations with high
creditworthiness. We plan to focus on providing customized ser-
vices to additional enterprises or corporations with high potential
of becoming our high yield customers and improve the skills of our
sales professionals, thus will intensively expand our foundation for
profit generation by providing detailed & 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.
55
Woori Bank annual report 2018We Believe in Your Potential Institutional
Banking
the institutional Banking Business group con-
sists of three departments. the institutional
Banking product & Marketing department caters
to the needs of the central government, local
governments, and public institutions. the public
2018 Performance
The Institutional Banking Business Group has a strong foundation
built on Woori Bank’s expertise gained from 103 years of manag-
ing the Seoul Metropolitan Government’s treasury. Based on such
management know-how, we are broadening 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 re-
sponsibility programs and established Woori Bank as a financial
institution that stands by local communities. In 2018, Woori Bank
was selected as the primary banking partner by the National Pen-
sion 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. In 2018, Woori Bank acted as the primary
bank for 105 public institutions out of 338 Korean public institutions
designated by the Ministry of Strategy and Finance.
As of the end of 2018, the Institutional Banking Business Group
is managing a total of KRW 31.2 trillion in deposits and KRW 0.87
trillion in loans as part of its institutional business. In addition, we
Fund sales department manages the municipal
have built banking relationships with 4,900 institutions.
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 man-
ages 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 2018,
our institutional customers include the seoul
Metropolitan government, the Ministry of land,
infrastructure and transport, the korea land &
housing corporation, the nps, the korea Rail-
road corporation, and many more. our clientele
list positions us as the primary bank for the larg-
est number of public institutions in korea.
Providing Optimal Financial Solutions for Project Exe-
cution by the Government and Public Institutions
We manage a specialized workforce for systems under Institutional
Banking Products & Marketing to effectively support the policies
and projects of the government and policy institutions, through
which we provide optimal financial solutions for the execution of
public projects. We contributed to the timely initiation of projects
by promptly developing and providing a firm banking system for
the Korea Workers' Compensation & Welfare Service, an institu-
tion for policy implementation as part of the government’s new
project related to job market stabilization in 2018. We contributed
to the expansion of the market for new and renewable energies
by advancing the systems as an exclusive bank for the REC trading
system and by offering settlement services to Korea Power Ex-
change where sellers and buyers of new and renewable energies
can engage in direct transactions/settlements.
56
Woori Bank annual report 2018We Believe in Your Potential Total Deposits
[Unit: KRW trillion]
2018
2017
31.2
27.5
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
Korea Post
Korea Exchange
Korea Workers' Compensation &
Welfare Service
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
Maximizing Synergies within the Bank through Trans-
actions by Institutional Customers
The Institutional Banking Business Group not only provides direct
financial services to institutional customers but also explores and
provides opportunities for business alignment to SMEs and indi-
viduals related to institutional projects. Woori Bank was designated
as one of exclusive banks for the Real-time Cash Management
System(RCMS) of Ministry of Trade, Industry and Energy, and also
for the research fund management system (Ezbaro) of the Ministry
of Science and ICT in 2018. That is why we provide comprehensive
financial services for companies that have been successful in R&D,
while managing and executing R&D funds, including those for sys-
tem operations. We also contributed to the formation of a sound
startup ecosystem by not only distributing funds but also providing
consulting for and extending loans to startups as the main custo-
dian bank of the startup support and management system of the
Korea Institute of Startup and Entrepreneurship Development in
order to finance startups.
2019 Plans
In 2019, we intend to provide a system for effective cash manage-
ment for government and public agencies and develop partnership
services related to various budget 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.
57
Woori Bank annual report 2018We Believe in Your Potential Global
Business
Woori Bank recorded substantial external growth
on a global scale thanks to a string of strategies
in 2018: ‘continuously expanding its overseas
network with a focus on southeast asia and di-
versifying its non-banking portfolio’, ‘accelerating
qualitative overseas growth’, ‘upgrading digital
competencies’ and ‘reinforcing compliance and
internal controls.’ We solidified our local business
infrastructure in southeast asia through con-
tinued network expansion focusing on regional
hubs such as indonesia and vietnam, etc. as well
as with the acquisition of WB Finance in June
2018. We also established our european subsid-
iary in Frankfurt, germany in november 2018,
completing a european financial belt connecting
the uk – germany (Western europe) – poland
(eastern europe) – Russia. as such, we currently
operate 430 global networks in 26 countries, the
largest global presence of any korean commer-
cial bank and continually strengthened the basis
for global growth. By accelerating qualitative
growth based on global network expansion, the
external scale-up of mostly high-quality assets,
and adoption of business strategies which reflect
the local characteristics of each branch, Woori
Bank recorded a current net income of usd 176
million, up 23.1 percent from the previous year.
We also boosted our global digital competencies
tric mobile otp system and signing agreements
with promising local fintech companies, espe-
cially in strategic retail branches/subsidiaries
such as our indonesian and vietnamese subsid-
iaries and dhaka Branch. We also launched and
expanded overseas business units related to
compliance and internal controls to respond to
ever-stronger compliance requirements, and es-
tablished a system for organic cooperation with
related departments at the head office.
2018 Performance
Expanding Our Overseas Network
2018 was a year to reaffirm the status of Woori Bank on a global scale
- a global leading bank - by opening our 430th overseas branch, a
first for a Korean commercial bank. Woori Bank started to go glob-
al by opening its first overseas branch in November 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 1st Korean bank to acquire a globally listed bank (in
Indonesia), subsequently launching Bank Woori Saudara.
In 2016, we acquired a local Philippine savings bank, and we are in
the process of expanding it in collaboration with our partner, the
Vicsal Group, adding synergy to the business. In June 2018, Woori
Bank acquired WB Finance, a savings bank in Cambodia, expanding
its business coverage throughout Cambodia. We also launched
Woori Bank Europe, paving the way for entry into the European
market in November. Woori Bank maintains 430 overseas networks
in 26 countries, the largest network of any Korean commercial
by setting up tablet branches, adopting a biome-
bank as of 2018-end.
58
Woori Bank annual report 2018We Believe in Your Potential Completed the Acquisition of WB Finance (June 2018)
and launching new products. Woori Bank Vietnam is taking steps to
By acquiring a local savings bank that operates a nationwide net-
work throughout Cambodia, Woori Bank scaled up its market share.
We plan to provide differentiated comprehensive financial services
grow into the No. 1 foreign bank in Vietnam by reaffirming its profit
structure through localization.
through conversion into a commercial bank over the mid and long
Accelerating Qualitative Growth Overseas
term.
A s a result of focusing on external growth while targeting
high-quality core assets including loans and securities to achieve
Provision of a Gateway for Advancing into the EU Market through
accelerated qualitative growth, NIM improved by 0.12%p from 1.79
the Launch of ‘Woori Bank Europe’ (November 2018)
percent in 2017 to 1.91 percent in 2018, and current net income
Woori Bank established its very own ‘European Financial Belt’ (the
UK – Germany – Poland – Russia) while launching a local subsidi-
ary in Germany in November 2018 in order to establish a gateway
for the bank in the EU. The German subsidiary plans to fulfill its role
as a ‘European FX Center by preemptively catering to demand from
Korean and local companies for loans, joining the euro payment
and settlement system, and providing ex/import services that tar-
get the European market/remittance services.
Opening of Five New Branches at Woori Bank Vietnam (Decem-
ber 2018)
Woori Bank Vietnam acquired the relevant permit and approval
from the State Bank of Vietnam to open six branches - the Thai
Nguyen Branch, Haiphong Branch and Ha Nam Branch in the
northern region of Vietnam and Dong Nai Branch, Binh Duong
Branch and Phu My Hung Transaction Office in the south – opening
five new branches in 2018. Woori Bank Vietnam strengthened its
local business competitiveness by expanding its network steadily
went up by 23.1 percent from USD 143 million in 2017 to USD 176
million in 2018. Moreover, we reinforced our global business com-
petencies based on a two-track strategy: localization for local sub-
sidiaries and CIB business-driven approaches for branches. Local
subsidiaries expanded their market dominance through proactive
localization strategies such as introducing localized product line-
ups and revitalizing the retail business. For branches in advanced
economies, we implemented growth strategies that focus on the
development of CIB-specialized branches by reinforcing our com-
petitiveness in corporate finance, IB and FX products.
Expanding the Global Digital Business Infrastructure
We expanded the reach of non-face-to-face channels and revital-
ized alliances with local fintech companies in order to respond to
global financial trends as digital banking becomes the norm and to
overcome the limitations of offline business channels.
We provided diverse non-face-to-face channel services including
loan (consultations) applications and e-wallet top-up services by
59
Woori Bank annual report 2018We Believe in Your Potential promoting our mobile banking services that first launched in 2017
Intensifying Compliance and Internal Controls
to most overseas branches in 2018. We launched direct banking
services enabling accounts to be opened following non-face-to-
face authentication procedures by combining mobile banking with
facial recognition technologies in China. We also provided a mobile
OTP service enabling mobile phone-based authentication by re-
placing physical OTPs in Vietnam and India.
We improved business efficiency and customer convenience by
adopting services to enable the opening of accounts without hav-
ing to visit a bank branch by verifying e-ID cards via tablet PCs –
another non-face-to-face channel – in Indonesia.
We also significantly expanded the coverage of service operations
through thriving alliances with promising local fintech companies.
We launched utility payment services via the Internet and mobile
banking by partnering with VNPAY, a local payment gateway com-
pany in Vietnam which has 8,000 affiliated merchants. We also
launched an online loan application service by aligning with Lendr,
a platform company for loan mediation in the Philippines. More-
over, we plan to release a range of customized products for local
subsidiaries in Southeast Asia including loan/deposit products ex-
clusively for drivers of Grab in 2019 by signing an MOU with Grab,
the largest ride hailing company in Southeast Asia.
Improving Asset Soundness at Overseas Branches
Amid increased regulatory standards imposed by local financial
authorities, we upgraded the money laundering/sanction filtering
system and year-round monitoring system. We boosted competen-
cies in the field of compliance by sharing weaknesses and review-
ing support from the head office through weekly meetings of the
‘Global Compliance Working-Level Committee’ which invited par-
ticipation by related departments in the head office. Moreover, we
reinforced internal controls by consulting on issues related to risks
and internal controls at overseas branches and by sharing plans for
reviews at overseas branches with departments at the head office
through monthly meetings of the ‘Working-Level Committee for-
Global Risk Management and Risk Control.’
2019 Plans
The Global Business Group plans to implement overseas projects
through the following strategies in 2019: continuously expanding
networks in promising regions, accelerating qualitative growth,
digitalizing strategic retail branches, intensifying compliance and
internal controls and expanding synergies for global collaboration.
We plan to establish a local subsidiary in India – a future core re-
gional hub – as a part of a network expansion plan in promising
regions, and establish a local subsidiary in Mexico to scale up busi-
ness operations in Latin America. We also plan to launch strategic
We managed asset soundness indicators successfully in a chal-
branches in Hanoi, Ho Chi Minh and Da Nang in Vietnam in order to
lenging environment at home and abroad, by taking into consider-
expand market dominance in promising global markets.
ation the likelihood of another global financial crisis and the contin-
ued increase of assets at overseas branches.
Localized networks will further revitalize localization strategies
We made concerted efforts to enhance comprehensive risk man-
through diversified business portfolios and expansion of product
agement by strengthening review competencies in Southeast Asia
line-ups catering to customer needs. CIB branches will accelerate
through the launch of the Asia Credit Analysis & Approval Center,
qualitative growth centered on high-quality core assets by expand-
ing the number of IB desks and strengthening business capabilities
of representative offices. We plan to initiate digitalization of stra-
tegic retail networks by expanding non-face-to-face channels and
ODS operations to complement networks that are smaller in scale
compared to those of major local banks, and launching financial
products affiliated with platforms through the adoption of agent
banking and business alliances in the non-banking sector.
We also plan to upgrade managerial competencies in global busi-
ness through stronger internal control of non-banking subsidiaries
(in the Philippines/Cambodia/Myanmar), while standardizing
compliance competencies to match those of advanced economies
to befit the more stringent requirements of local oversight authori-
ties. Lastly, based on these plans, we endeavor to ensure a “Global
Quantum Jump” in 2019 by maximizing synergies through collab-
oration among subsidiaries within the Woori Financial Group and
distinct business groups within the bank.
checking for signs of failure in advance by upgrading the mon-
itoring system with new software and running periodic on-site
coaching programs to beef up business competencies at overseas
branches. As a consequence, the NPL ratio improved by 0.33%p
from 0.76 percent in 2017 to 0.43 percent in 2018, and the delin-
quency rate fell by 0.09%p from 0.65% in 2017 to 0.56% in 2018.
60
Woori Bank annual report 2018We Believe in Your Potential Net Profit
[Unit: USD million]
Liquidity Ratio
[Unit: %]
176
2018
143
2017
+
23.1 %
110.5
2018
121.1
2017
NPL Ratio
[Unit: %]
Global Networks
(As of the end of 2018)
0.43
2018
0.76
2017
-
0.33 %p
441
total networks (Woori Financial group inc.)
-Woori Bank global networks 430
19
overseas
Branches
13(418)
overseas
subsidiaries
4
Representative
offices
New Global Market Development
Main Focus Countries
AO Woori Bank (Russia)
London
euRope
Poland
Woori Bank Europe GmbH (Germany)
Turkey
Gurgaon
Bahrain
Qatar
Dubai
Dhaka
Mumbai
Yangon
Chennai
Woori Finance Myanmar Co., Ltd.
TUTU Finance-WCI Myanmar
aFRica
WB Finance Co., Ltd.(Cambodia)
Woori Finance Cambodia Plc.
Indonesia
Vietnam Philippines
India
Cambodia Myanmar
Woori Bank (China) Ltd.
asia
Seoul
Tokyo
noRth aMeRica
Woori America Bank
New York
Bangladesh
Los Angeles
Woori Global Markets Asia Ltd. (H.K)
Hong Kong
Woori Bank Vietnam Ltd.
Wealth Development Bank Corp. (Philippines)
Kuala Lumpur
Singapore
PT Bank Woori Saudara Indonesia1906. Tbk.
South Africa
oceania
Sydney
south aMeRica
Banco Woori Bank do Brasil S.A.
Woori Bank (China) Ltd. 21
AO Woori Bank (Russia) 3
Woori Bank Vietnam Ltd. 8
Wealth Development Bank Corp. (Philippines) 25
Woori Finance Myanmar Co., Ltd. 38
TUTU Finance-WCI Myanmar 11
PT Bank Woori Saudara Indonesia1906. Tbk. 157
Woori Finance Cambodia Plc. 20
Woori America Bank 24
Banco Woori Bank do Brasil S.A. 2
Woori Global Markets Asia Ltd. (H.K) 1
WB Finance Co., Ltd. (Cambodia) 107
Woori Bank Europe GmbH (Germany) 1
61
Woori Bank annual report 2018We Believe in Your Potential International
Trade Business
lion compared to 2017. We secured a sustainable business model by
attracting 1.175 million customers to our foreign customer business.
Woori Bank provides rapid money brokerage services by operating
the Woori Clearing System (WCS), which is our FX settlement system
with leading domestic and international financial institutions as its
members. We have also acted as the primary bank in charge of FX
transactions for more than 120 public institutions, including Korean
the international trade Business group is in
charge of establishing the marketing strategy for
foreign exchange (FX) services, supporting branch
offices, and developing products for Woori Bank.
We manage the international trade service center,
which is a one-stop center for FX operations that
offers rapid and efficient support, the Foreign cus-
tomer Banking Business department to establish
marketing strategies and extend business support
for foreigner residents of korea, and the global
investment center, which is responsible for foreign
direct investment (Fdi), unstructured escrow and
overseas capital transactions, etc. 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.
2018 Performance
In 2018, Woori Bank reported outstanding performance in export/
import financing, FX, and international remittances, clearly over-
shadowing its competitors by taking advantage of competitive FX
products, services, and the superior FX competencies of our employ-
ees. We handled USD 369.7 billion in export/import financing, USD
4.3 billion in FX (cash basis), and USD 146.1 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 7.3 bil-
62
central and local governments, the Defense Acquisition Program Ad-
ministration, and the Public Procurement Service. In April 2016, Woori
Bank was selected as the first South Korean bank to offer won curren-
cy clearance services in China, handling the clearance and settlement
in Korean won, performing the job of a market maker, and eventually
establishing ourselves as the global transaction banking leader for the
Korean won. The International Trade Business Group’s outstanding
business performance in 2018 is the result of implementing a success-
ful business model geared toward FX 4.0, which is about strengthen-
ing profitability and synergy according to our four business goals of
enhancing profitability, promoting employee competencies, securing
product competitiveness, and expanding strategic partnerships. The
Group will continue to concentrate on developing new growth engines
and improving business infrastructure.
Exploring New Income Sources – Expanding the
Foreign Customer Business and Capital Transactions
Results of Business Performance
[Unit: USD billion, %]
[Among the four major Korean banks]
Category
Export financing
Import financing
Export/Import financing
FX (cash)
International remittances
Results
Market share
205.5
164.1
369.7
4.3
146.1
36.6
34.7
35.7
27.8
22.3
(FX) Non-Interest Income
[Unit: KRW million]
Category
2018
331,170
2017
323,894
Change
7,276↑
Woori Bank annual report 2018We Believe in Your Potential Business Aimed at Foreign Customers
branches with FDI desks and expertise in attracting capital transactions,
In 2018, Woori Bank stood at the forefront of attracting new foreign
customers by signing agreements with several international student
associations in Korea and related organizations and expanding chan-
nels for foreign customers. As a consequence, Woori Bank positioned
itself as a bank with over 1 million foreign customers by attracting
159,000 new foreign customers over the year, totaling 1.175 million on
while providing differentiated services by departmentalizing and spe-
cializing operations. The International Trade Business Group will make
concerted efforts to ensure the highest competitiveness in the capital
transaction market through the Global Investment Center, an exclusive
unit for attracting capital transactions and providing advisory services.
an accrued basis as of 2018-end.
Escrow/Public Interest Project Immigrant Investor Scheme
Marketing for Foreign Students Studying in Korea by Signing
stable management of capital, creation of transaction structures and
Agreements with the International Students Association and
support for contract documentation as a neutral third party for spe-
The Global Investment Center provides escrow services including
Related Organizations
Woori Bank signed agreements with several international student
associations in Korea and related organizations to strengthen our
business competitiveness in terms of foreign customers. Since Chi-
nese and Vietnamese students represent the majority of international
students studying in Korea, we conducted marketing for international
students on major university campuses by signing a group agreement
with their respective student associations. We also partnered with
the Korean Immigration Service Foundation that handles civil affairs
on behalf of the Ministry of Justice and acquired some students as
customers through this partnership. By doing so, we reinforced part-
nerships with organizations that serve foreign nationals in Korea and
cific contracts (M&A, capital management and current transactions)
among contractual parties. In addition, Woori Bank serves as the
designated bank for money transfers for the public interest project
immigrant investor scheme designated by the Ministry of Justice. This
designation enables the Global Investment Center to provide total
one-stop services to foreign investors to acquire permanent resident
status in conjunction with the Immigration Office of the Ministry of
Justice, thus enhancing customer convenience.
2019 Plans
In 2019, the International Trade Business Group will improve FX prod-
laid the foundation for becoming a more foreigner-friendly bank. As a
ucts and processes by leveraging new technologies of the Industry 4.0
result, Woori Bank attracted 159,000 new customers in 2018, which is
in order to digitalize the entire FX operations. This will raise customer
approximately 30,000 more compared to the previous year.
satisfaction and business efficiency as Woori Bank does the utmost to
become a leading bank for FX catered to the rapidly changing external
Channel Expansion for Foreign Customers
environment.
The Foreign Customer Banking Business Department opened a For-
eign Customer Banking Centers in Daerim-dong in Seoul in January
2019, followed by one in Gimpo in December 2018. These two new
centers, in addition to existing centers in Ansan, Gimhae and Uijeongbu,
focus on marketing efforts targeting foreign customers. The Foreign
Customer Banking Centers hire foreign staff to make our customers
feel more comfortable, and also offer religious and cultural facilities in-
cluding prayer rooms, thus raising customer satisfaction levels.Moreo-
ver, we have seven branches that open on Sundays for foreign workers
and have expanded the number of such branches in Pyeongtaek, and
established a business network for foreigners nationwide by operating
foreigner-exclusive desks in areas with a high density of foreigners in
Daegu, Gwangju and Changwon, among other areas.
Global Investment Center
FDI/Capital Transactions
Through the Global Investment Center in charge of FDI/capital trans-
actions marketing, the International Trade Business Group provided
support for major foreign investors and companies to enter the Korean
market based on abundant experience and expertise related to FDI,
and served as an investment partner. As a consequence, Woori Bank
was ranked number one in market share in the domestic FDI market by
attracting investments of USD 3,436 million, up 15 percent compared
to 2017. The Global Investment Center designates and runs specialized
63
In 2019, the International Trade Business Group will revitalize its image
as a specialized bank for foreigners by improving services related to
insurance products in order to become a trustworthy financial partner.
Furthermore, we will develop financial products and services suitable
for foreign customers so that they can conveniently remit funds to their
home countries. We will attract new high-yield customers continuously
by strengthening partnerships with related institutions for foreigners as
we did in 2018, and ensure we become the No.1 player in foreign cus-
tomer marketing by continuing to handle issuance of the multicultural
financial voucher program.
Moreover, we will develop and market products aligned with escrow
services and FDI to expand business operations related to inbound
capital transactions including FDI. We will also lead the market by ex-
ploring new income sources in new markets through the development
of escrow products for tax payments related to securities purchases and
sales. In 2019, the International Trade Business Group will do its utmost
to increase customer satisfaction by offering optimized FX services
through the adoption of new Industry 4.0 technologies, adapting to the
rapidly changing external environment.
Woori Bank annual report 2018We Believe in Your Potential Investment
Banking
Woori Bank’s investment Banking Business
group consists of two departments – the in-
vestment Finance department and the project
Finance department – and 11 teams: M&a team
1, M&a team 2, equity investment team, global
Finance team, innovative development and Fi-
nance team, infrastructure Finance team under
the project Finance department, structured Fi-
nance team, power and energy team and Real
estate Finance team.
as a traditionally strong player in corporate fi-
nance, Woori Bank has expanded its core iB
business including in the fields of high-yield eq-
uity investments, and M&a acquisition finance/
power generation/infrastructure arrangements.
We broadened our business scope through glob-
al networks and iB desks. in october 2006, we
opened Woori global Markets asia ltd. in hong
kong and became korea’s first financial institu-
tion to establish a business unit to specialize in
overseas iB. global iB desks have been part of
the bank's strategy since Jun 2017. additional iB
desks were set up and are in operation on a pilot
scale in vietnam and india beginning in the latter
half of 2018. We continue to generate opportuni-
ties for iB business at home and abroad through
our expanded global network.
2018 Performance
Woori Bank’s Investment Banking Business Group has increased
its non-interest income by intensifying its financial arrangements
involving power generation/infrastructure projects as well as M&A
finance. The group has expanded its overseas business by boosting
operations at existing global IB desks and adding new ones.
Woori Bank was ranked first among Korean commercial banks in
arranging M&A finance and recorded outstanding growth in global
IB assets and income by managing the largest number of global IB
desks. This has enabled the IB Group to generate income exceed-
ing KRW 200 billion in 2018.
We also expanded preemptive investments in future cash cows,
while expanding high-yield investments through closer ties with
global top-tier asset management companies, increasing high-
yield assets by entering the fields of aircraft financing, overseas
infrastructure/power generation projects, and maximizing short-
term income through large-scale structured finance and issuance
of FRNs aligned with Woori Global Markets Asia Ltd. in Hong Kong.
We have started to provide support for investments and loans tar-
geting companies with innovative growth potential, while forming
a financial ecosystem for innovative government growth initiatives
by launching an Innovation Development Team for the first time
among Korean commercial banks as of the end of 2018. We also
plan to expand direct/indirect development/support on a continual
basis.
2019 Plans
2019 will be the year for further growth with the establishment of
Woori Financial Group. We plan to implement more robust busi-
ness operations with a focus on ‘creating a business structure led
by non-interest income’ and ‘strengthening drivers for new global
growth’ under the business goal of providing ‘global IB that leads
future finance.’
We launched the Real Estate Investment Finance Team at the end
of 2018, expanding into business areas such as real estate PF, real
estate-backed syndication loans and real estate-related equity in-
64
Woori Bank annual report 2018We Believe in Your Potential vestments. We plan to newly set up the M&A Team 2 and the Global
Infrastructure Team to diversify income sources in February 2019,
thus scaling up participation in arrangements and engagement in
overseas M&A finance, investment in special situations, and ar-
rangement of overseas infrastructure, power generation/energy
projects.
In 2019, Woori Bank’s Investment Banking Business Group will
continue to grow its asset portfolio and income by seeking out new
projects for the IB Business Group involving financial arrangement,
high-yield investments and expansion of global projects.
Lastly, the Investment Banking Business Group is preparing for the
introduction of a CIB system at the soon-to-be-completed financial
group by reinforcing its CIB business based on collaboration with
oligopolistic shareholders in the fields of securities, insurance and
asset management as well as with departments within the bank at
a time when the group does not yet have a full-fledged asset man-
agement company or securities firm.
Awards and Prizes
Award in Acquisition Finance at the 10th Korea IB Award
by the Korea Economic Daily (Feb. 22, 2019)
Total Assets of Investment Banking Operations in 2018
[Unit: KRW trillion]
Balance Sheet
Assets
Loans 3.0 (28%)
Securities 3.4 (31%)
6.4 (59%)
Total Assets 10.9 (100%)
4.5 (41%)
Off-balance Sheet
Assets
Loan Commitments, etc. 4.1(38%)
Payment Guarantees 0.4 (3%)
65
Woori Bank annual report 2018We Believe in Your Potential 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 mar-
ket environment. sales of trust products such
as equity-linked trusts (elt) have continued to
grow, as the trust and pension Business group
plays a leading role in driving the bank’s overall
non-interest rate income. We take the lead in
managing the precious assets of our customers
by suggesting customer-centered investment
strategies with new product launches and di-
verse product lineups. in a growing retirement
pension market, we provide support for the
post-retirement lifestyles of retail customers
and efficient asset management of retirement
pensions for corporate customers.
We offer differentiated customized services
retirement pension market. We have a broad
range of experience in the custody agent business
gained from transactions with our diverse clien-
tele consisting of 120 entities or so, including ma-
jor institutional clients in korea’s securities custo-
dy services market as well as asset management
companies. taking advantage of our experience,
we will provide custodian asset management ser-
vices that allow us to take preemptive action in the
face of market changes.
2018 Performance
Trust Department
Woori Bank’s Trust Department scaled itself up through customized
strategies by setting ‘continued growth and profit-making in the
trust business’ as its business goal. In addition, we concentrated on
system configuration and leveraging our expertise in order to gain
competitiveness in the trust business with potentially high-growth
potential. We established the ‘trust asset management system’
to provide comprehensive asset management services including
customer advisory services, asset management guidelines and
follow-up management measures. We also shared our asset man-
agement and product design competencies with our entire branch
network, whereby asset management experts including analysts
and fund/portfolio managers offer advice. As a result, we have pro-
moted 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 2018
reached KRW 12,133 billion, or 142% growth year on year. We then
developed new products and diversified underlying assets across
diverse portfolios so that we can manage assets according to market
conditions and individual customer needs.
through comprehensive consulting services to
Retirement Pension Business Department
customers for retirement pensions, from the
early stage of introducing retirement pension
schemes for companies. We employ experienced
investment experts utilizing advanced methods
at Woori Bank, based on which we can manage
customized products that are optimal for cus-
tomers’ investment needs as part of our total
financial services platform, thereby leading the
Since retirement pension schemes were introduced to the market,
Woori Bank implemented a customer-centric strategy with a long-
term perspective to help customers enjoy a stable retirement and to
cope with labor market changes such as Korea’s rapidly aging socie-
ty. 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 performance through
the Internet or mobile banking via the Happy Life Retirement Pension
Lifetime Account. These services enable our customers to manage
66
Woori Bank annual report 2018We Believe in Your Potential port and continue to improve and further develop our core products.
With ELT, our core product, we will generate profits through bal-
anced 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
products globally relevant. Hence, we will upgrade our trust asset
management system and risk management system.
Retirement Pension Department
As Korea becomes a super-aged society, the importance of the re-
tirement market 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. In 2019, the Retirement Pension Business Department
will secure growth through differentiated marketing by managing
assets and raising convenience levels for each customer, and con-
tinue to focus on higher efficiency in business channels along with
higher customer yield through stronger product management ca-
the retirement savings in their accounts with ease. We also stream-
lined document processing by providing integrated information on
pensions for IRB subscribers (a data scrapping service) and high-
lighted the importance of raising customer yield rates by expanding
our lineup of TDFs. We also launched a Retirement Pension Business
Team, reducing the workload for branches and raising customer sat-
isfaction.
Trustee & Custody Department
Expanding our Client Base by Diversifying Assets Under Custody
pabilities. We will continue to lead the retirement pension market
and Attracting New Customers
We successfully undertook a project to develop systems for new
businesses and upgrade our custody operations system, following
successful bids for institutional clients. We diversified assets under
using our expert human resource pool, training support system,
diverse products, professional asset management competencies,
and a unique retirement planning service platform.
custody by attracting insurance companies (KRW 8.4 trillion -> KRW
Trustee & Custody Department
24.1 trillion), hedge funds (KRW 3 trillion -> KRW 4.2 trillion) and
the largest REITs in the financial sector, driven by our outstanding
industry-leading business expertise. We also raised the volume of
assets under custody by expanding our clientele through the signing
of new contracts with institutional customers and eight other firms
including insurers and asset management companies.
2019 Plans
Trust Department
The 2019 business goal for the Trust & Pension Business Group is
to ‘Dominate the Trust & Pension Market.’ This goal means that we
intend to become the number one bank in terms of increased trust
market share. Accordingly, we plan to differentiate marketing sup-
Profitability-Driven Qualitative Growth by Strengthening Growth
Competencies in Each Asset Category
Woori Bank will dominate the fiduciary management market for
public and private funds by establishing a cooperative system with
asset management companies in the external fiduciary manage-
ment market based on many years of experience in custody opera-
tions for pension funds affiliated with the National Pension Service
and the Ministry of Land, Infrastructure and Transport. We will also
pave the way for growth as a global custodian bank by increasing
our market share based on integrated management of the assets
of insurance companies. We will lead the asset custody market by
scaling up the portion of high-yield assets in custody, inclusive of-
hedge funds assets and alternative assets.
Money in Trust
[Unit: KRW trillion]
20.8
15.7
+33.0%
Retirement Pension Assets
[Unit: KRW trillion]
17.1
15.0
Assets under Custody
[Unit: KRW trillion]
151.5
143.9
+13.6%
+5.3%
2017
2018
2017
2018
2017
2018
67
Woori Bank annual report 2018We Believe in Your Potential Business
Support
Social
Responsibility
070
073
076
079
080
082
084
086
089
090
092
eMploYee satisFaction
Financial MaRket Business
digital Banking
it suppoRt
inFoRMation secuRitY
Risk ManageMent
consuMeR pRotection
social contRiBution activities
WooRi sMile MicRocRedit
ethical & coMpliance ManageMent
anti -MoneY laundeRing
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 satisfac-
tion. We are expanding our programs to improve
employee satisfaction because we believe that
satisfied employees feel a strong sense of own-
ership and voluntarily strive to make customers
happy.
2018 Performance
Wibee Basketball Team, Winners of Both the Regular Season and
the Championship Title for the Past Six Years Consecutively Woori
Bank beat the Incheon Shinhan Bank S-Birds with a score of 78-
50 in the 7th round of the `2017~2018 Women's Korean Basket-
ball League (WKBL) Regular League' held at Yi Sun-sin Stadium
on March 4. This has enabled Woori Bank to win six consecutive
season titles in the regular league. Woori Bank WiBee, thus, ties
Shinhan Bank's title of the six-straight-season wins with 29 wins
and 6 losses (a winning rate of 82.9 percent) in the 2018 regular
season. Woori Bank Wibee broke a new record in its history with
the first-ever V10 in the WKBL and six consecutive wins by winning
the regular league this season, thanks to its employees' passionate
cheers, head coach Wie Sung-woo's outstanding tactics, and the
players' tireless mental strength.
Implementing Programs for Greater Employee Satisfaction
Woori Bank offers original and interesting programs to boost em-
ployee satisfaction. In 2018, we offered various programs to help
employees meet their cultural needs and build networks. A pro-
gram to help our employees take care of their physical and mental
health, and another offered program is the Special Lectures on
Culture, which encourages them to discover and enjoy new hob-
bies. Among our existing programs, we continue to offer those that
have been the most popular among our employees, including the
family getaway initiative Oh! Happy Woori and the psychological
counseling program to help employees deal with feelings of inse-
curity or with family issues. Through these efforts, we strive to not
only encourage communication and fun but also support our em-
ployees 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 partici-
pate in our seasonal experience programs to spend time with their
families and refresh themselves physically and mentally. Last year,
70
Woori Bank annual report 2018We Believe in Your Potential the program offered such experiences as Understanding Constel-
this free wedding venue offer is twofold: it not only helps our em-
lations, visiting Pocheon Herb Island, Korea Job World, My Moth-
ployees save on wedding costs but also boosts the sense of pride
er’s Family, and Korea Job World & a Taekwondo Program at the
our employees feel in Woori Bank.
Kukkiwon. For seasonal trips, we offered the programs Together
for Spring Flowers and Together in Autumn, designed to offer hap-
py experiences 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 be-
come 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 fo-
cused 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 decora-
tions. The venue features a gorgeous bridal room, a separate room
to perform the traditional Korean wedding ceremony known as py-
ebaek, and a newly renovated cafeteria for the wedding banquet.
The CEO’s official vehicle is also made available as the wedding
getaway car. A total of 693 newlywed couples walked down the
aisle in this auditorium between 2012 and 2016. Its popularity con-
tinued in 2017 and 2018, with an additional 180 pairs and 150 cou-
ples getting married there in each year respectively. The benefit of
Benefits Offered in 2018
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
services, we have an in-house counselor who offers, upon request,
psychological tests, counseling visits, and lectures at branches. We
also have experience programs to help employees manage stress
and recover mentally, such as one-day meditation courses, temple
stays, 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, glamping,
yacht rides, all-terrain vehicle (ATV) racing, and outdoor survival
games. The high employee participation rate proves the popularity
of these programs. By taking part in the workshops together, em-
ployees create synergy as they get the opportunity to communicate
with each other freely and hence cooperate better at work after the
experience. In 2017, we hosted the Woori Pop Star event, a talent
show in which employees could show off their talents and passion.
In 2018, we organized the Woori Family Talk! Healing Concert in
71
Woori Bank annual report 2018We Believe in Your Potential five cities (Daejon, Changwon, Daegu, Gwangju, Busan) and cre-
employees. If any symptoms should be identified after a check-up,
ated an atmosphere of harmony for our employees. The Employee
we support affected employees with our group accident insurance
Satisfaction Center thus launched various programs to make our
and the bank’s medical fee subsidy scheme to create a healthy and
employees happy and boost sales competencies through commu-
active work culture. Meanwhile, our employees and their families
nication.
A Day When Woori Meets Culture
This is a support program to encourage participation of cultural ac-
tivities by our employees and their families. Be it musicals, opera,
or classical music, the program responds to the cultural interests
are entitled to book and use the shared condominiums Woori Bank
owns all over the country. We also improved our rest and recrea-
tion 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.
of our staff and enriches their leisure time. First launched in 2012,
Woori Daycare Center
the program made a group purchase for performances like the Lit-
As part of the government’s policy to address the country’s low
tle Prince (an opera), Wicked, Dream Girls, 42nd Street (musicals),
birth rate and actively support working parents, Woori Bank runs
Bodyguard and Rebecca. In 2018, in order to further boost employ-
a corporate daycare centers in Seoul at Mapo-gu (Happiness
ee satisfaction, we continued to group ticket purchases for musical
Center), Seongdong-gu (Love Center), and Jung-gu (Dodam
performances such as The Flashdance. We thus provided efficient
Center, opened at the Woori Bank head office building in August
and satisfying forms of support to allow our employees to return to
2016). In addition to the three existing centers, we opened the
work with greater energy and in better spirits.
fourth center at Bundang, Gyeonggi Province (Saesol Center) in
Improving ‘PC-Off’ Policies for Work-Life Balance
The Banking industry has characteristically imposed a work en-
vironment that entailed overtime work at night. To improve such
conditions, we introduced a work-life balance policy in 2013, which
then became established as a part of corporate culture at Woori
Bank as most offices and branches came to comply with the policy.
The so-called ‘PC-Off’ deadline is at 19:00 to ensure employees
March 2018.
We will continue to open new daycare centers to promote a cor-
porate culture that encourages raising families and do our best to
help working parents 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.
Programs to Protect Employees who Interact Directly
with Customers
Woori Bank has provided prevention training and psychological
treatment since 2017 for employees who interact directly with cus-
tomers to protect them from verbal and physical violence as well as
sexual harassment. We also run programs to preemptively protect
employees in the banking sector by distributing ‘Woori All Togeth-
er’ guidelines for their protection, putting up posters to increase
customer awareness and providing information on employee pro-
tection through automated response systems via non-face-to-face
channels.
In addition, we strive to address employees’ psychological griev-
have time for leisure activities and family life. It also increased ef-
ances and improve job satisfaction through in-house professional
ficiency and focus at work, reducing unnecessary overtime where
counseling and the Employee Assistance Program (EAP), and run
possible. In 2017, we introduced flexible work hours, and we im-
collective programs all-year-round including special lectures and
proved the existing PC-Off policy for work-life balance by introduc-
activities in order to reduce work-related stress derived from emo-
ing a PC-Shut-Down function. We will take the initiative in realizing
tional factors. We have also taken the lead in improving our cor-
work and life balance for all our employees. We will continue our
porate culture by conducting wide-ranging campaigns to prevent
efforts to increase employee satisfaction with constant on-site
conflicts among employees as well as enhancing legally-mandated
monitoring, feedback, and consequent improvement.
compliance training on sexual harassment prevention in the work-
Building a Healthy and Vibrant Work Culture
Woori Bank offers annual medical check-ups and blood tests in
order to continually and systematically manage the health of our
place.
72
Woori Bank annual report 2018We Believe in Your Potential Financial
Market
Business
the Financial Market Business group consist 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
2018 Performance
In charge of major funding and capital management for Woori
Bank, the Financial Market Business Group focused on improv-
ing profitability and maintaining stable liquidity through efficient
funding and capital management. We contributed to enhancing the
Bank’s profitability by maintaining an optimal loan-to deposit ratio
(LDR), diversifying Korean won- and foreign currency-denominat-
ed financing, and managing our bond portfolio. We also promoted
our capital adequacy and stability in financing by issuing perpetual
foreign currency-denominated contingent convertible bonds (Co-
Cos) in the first half and won-denominated CoCos (TierⅡ) in the
second half. Consequently, we complied with the Korean regulato-
ry guidelines on liquidity in 2018 at a level well above the liquidity
coverage ratio(LCR) (minimum 95%), the foreign currency LCR
(minimum 70%), and the mid- and long-term foreign currency
financing ratio (minimum 100%). These results contributed to a
0.60 percent 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.
department, which performs back office duties.
Stable Management of Liquidity
Woori Bank is the most competitive of all korean
Strengthening the minimum standard for LCR and successfully
commercial banks in trading derivatives. We lead
responding to the implementation of NSFR
the market, handling forwards, swaps and op-
tions based on a wide range of underlying assets
including interest rates, foreign exchange, equi-
ties, and commodities.
We secured high-liquidity assets by preemptively increasing de-
posits, private loans and contingent capital securities in prepara-
tion for the new implementation of the NSFR – a mid- and long-
term liquidity index, while raising the minimum standard for LCR
by 5%p. As a consequence, we maintained liquidity levels above
the regulatory ratio with an LCR of 102 percent and an NSFR of 109
percent on average in 2018.
Issuance of Senior Debt and CoCos (Contingent Convertibles) in
Korean Won and Foreign Currencies
The Financial Markets Group established preemptive financing
plans, thereby successfully issuing senior debts valued at KRW 4.2
73
Woori Bank annual report 2018We Believe in Your Potential trillion, CoCos in Korean Won of 0.6 trillion (hybrid securities of
cial market and strove to build competitiveness through various
KRW 0.4 trillion and subordinated securities of KRW 0.2 trillion),
measures, including creating profits from new sources.
senior debts in foreign currencies of USD 450 million and CoCos
in foreign currencies (subordinated securities) worth USD 300
million. In terms of hybrid securities denominated in Won, the bank
successfully arranged the largest-ever issue valued at KRW 400
billion, despite the limited scale of the issuance market, thus rais-
ing the prestige of Woori Bank.
Enhancing Stability with Diversified Financing of Foreign Currency
FX Dealing
In foreign currency dealing, we bolstered our currency forecast
capability for both domestic and international markets and realized
outstanding trading profits by taking anticipatory and proactive
action in response to the fluctuations in international financial mar-
kets. In 2018, we accounted for a higher portion of market share
(9.05% in USD/KRW, 18.26% in CNY/KRW), playing the role of a
We issued Formosa Bonds to the tune of USD 300 million by lever-
leading market maker in Korea.
aging the dollar liquidity of Taiwanese investors in January 2018,
and provided a lower interest rate at issuance compared to other
global senior debts, and revitalized the issuance of CD in foreign
currencies by utilizing the global CD program. As such, we rein-
forced stable liquidity management in foreign currencies by diver-
sifying the procurement markets and financial instruments.
- complying with korean Regulatory guidelines -
As of the end of December 2018, we have complied with Korean
regulatory guidelines by maintaining 104.08% in the LCR, 106.42%
in the foreign currency LCR, and 188.06% in the mid- and long-
term foreign currency financing ratio.
Strengthening Competitiveness in FX and Derivatives Business
In 2018, the Financial Market Business Group strengthened its
competencies to proactively respond to the volatility of the finan-
Derivatives
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 trad-
ing. We also offer FX/interest rate risk management consulting and
customized 1:1 solutions for SMEs that suffer from a lack of experi-
ence and expertise in risk management.
Securities
In securities, we analyzed domestic and international monetary
policies and bond markets and efficiently managed bonds increas-
ing both interest and non-interest income. We also diversified our
sources of non-interest income by varying and increasing bond
lending transactions that receive risk-free charges.
74
Woori Bank annual report 2018We Believe in Your Potential 2019 Plans
The Financial Markets Group plans to ensure preemptive financing,
secure committed lines and strengthen the procurement compe-
tencies of overseas branches in order to ensure more stringent
control of liquidity amidst the higher volatility of the global financial
market. As such, we will maintain bank-wide liquidity levels and
raise profitability through better procurement & portfolio manage-
ment. In trading, we will broaden both our FX and derivatives in-
come 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 vola-
tility, 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 gencies and other financial and public
institutions. With the work of our dedicated team, we will continue
to acquire exceptional customers and increase our non-interest
income.
Liquidity Coverage Ratio
[Unit: %]
Liquidity Coverage Ratio (All currencies including KRW)
Liquidity Coverage Ratio (Foreign Currencies)
108.23
102.45
119.32
101.60
110.02
102.77
108.98
103.40
Mar.2018
Jun.2018
sep.2018
dec.2018
75
Woori Bank annual report 2018We Believe in Your Potential Digital
Banking
digital competencies have become a core com-
petitiveness for a bank’s future survival. Woori
Bank has consistently spearheaded bank-wide
operations for digital transformation under a
strategy that aims to lead digital innovation and
conducted digital-focused organizational re-
shuffling to respond rapidly to the changing mar-
ket. Moreover, we intensified our competencies
to utilize digital technologies including ai, big
data and Rpa as core values of a ‘customer-ori-
ented approach’ and ‘enterprise-wide productiv-
2018 Performance
Woori Bank selected 16 tasks related to digitalization under the
motto that customer value is generated through technology and
data in order to commemorate 2018 as the first year of its relaunch
as a digitally leading bank. We completed governance upgrades
necessary for efficient business operations including the re-
cruitment of specialized leaders (including a Chief Digital Officer
(CDO)) with full support from the enterprise-wide digital council
and launched the Big Data Center for integrated management and
utilization of bank-wide data. We even introduced a task force fo-
cused on project bidding in order to establish a corporate culture
to encourage flexible thinking and rapid action. Moreover, we have
continuously raised profitability by supporting big data-based
marketing, completely transforming digital banking by provid-
ing customized services and conducting affiliate marketing with
strategic top-tier platform companies. WiBee Fintech Lab aims to
revitalize the fintech sector as well as discover and foster promis-
ing companies that can play a role in steadily expanding the range
of opportunities for cooperation between fintech companies and
Woori Bank.
Part 1. Implementing Enterprise-Wide Digital
Innovation through the Execution of and Support for
the Top 16 Tasks for Digitalization
Woori Bank has selected 16 tasks for digitalization in order to be-
come a digitally-native bank that generates customer value based
on new digital technologies. By doing so, we aim to lead in digital
competitiveness, secure digital competency, and improve our fun-
ity innovation’ and transformed mobile banking
damentals.
services into fully-featured financial service
offerings as we continuously strive to become an
innovative bank.
this year, we will reaffirm our status as a digital
leader by implementing ‘open finance’ systems
that create a demand for new services by shar-
ing financial data and channels maintained by
the bank and through collaboration with fintech
companies.
We have reinforced drivers targeting digital operations while se-
curing differentiated expertise by recruiting an executive-level
CDO from outside the bank. We also launched the Big Data Center
to establish and utilize bank-wide big data strategies. We have es-
tablished an integrated CoV system for each channel to be applied
to the model used for customer turnover prediction and the model
for the prediction of regulatory agency complaints. We also devel-
oped digital counseling/business tools that provide customized
portfolios to customers, and steadily promoted the digitalization
of branch operations by introducing e-document systems. In 2019,
we will continue to strive to become a digitally-native bank.
76
Woori Bank annual report 2018We Believe in Your Potential Part 2. Implementing a Two-Track Digital Banking
Strategy to Provide Innovative Customer Experiences
Woori Bank is currently revamping the One Touch Retail App and
WiBee Bank App as non-face-to-face channels. The One Touch
Retail App will fulfil its role as an integrated marketing channel that
enhances customer convenience and provides customized services
enabling access to all types of financial products and services. The
apps will be launched in the first half of 2019 and provide seamless
agreements on multiple fronts. To this end, we conducted joint
marketing with Korea’s representative simple payment platform
company to attract customers via non-face-to-face digital chan-
nels. Moreover, we have steadily raised the number of non-face-
to-face digital customers and product subscribers through da-
ta-based customer behavioral analysis and marketing to upgrade
and improve our digital marketing efforts.
customer experiences online by utilizing new digital technologies,
offering an intuitive UI/UX and simplifying the product subscription
Part 4. Expanding the Ecosystem for Collaboration with
Fintech/ICT Companies
process.
WiBee Bank is Korea’s first mobile-exclusive bank introduced by
Woori Bank in May 2015, which will have its core features renewed,
with its simple money transfer services and non-face-to-face loan
applications witnessing a major transformation. By doing so, we
will be able to attract younger customers and offer new fintech
services, differentiated from the One Touch Retail Banking app.
We established the WiBee Fintech Lab in August 2016 to revitalize
the fintech ecosystem and explore and nurture promising fintech
companies. We provide total services ranging from the provision
of office space to fintech companies to patent, legal and consulting
services. We organized an incubation program to enhance corpo-
rate value with 17 companies as of the end of December 2018.
We also provided opportunities for growth through direct allianc-
es and mutual cooperation with the digital business unit of Woori
Part 3. Conducting Digital Affiliate Marketing to Attract
Non-Face-to-Face Digital Channel Customers
Bank by developing a loan assessment solution aligned with AI and
setting up a crowd funding system jointly with a tenant company in
Woori Bank has continuously expanded the scope of its financial
products and services by aligning with strategic top-tier platform
companies.
We have strived to enable customers to experience our conven-
ient financial services via diverse channels by signing partnership
WiBee Fintech Lab. In addition, we have continued to provide op-
portunities for networking both inside and outside the company as
we have periodically organized ‘WiBee Fintech Lab Demo Days’ to
share business performance tips with companies that are nurtured
in WiBee Fintech Lab and promote opportunities for cooperation.
77
Woori Bank annual report 2018We Believe in Your Potential 2019 Plans
Part 1. Execution of Open Finance Strategies
The Digital Financial Group plans to evolve into a bank-in-bank-
type exclusive profit-making group by aiming to establish an open
finance-driven development & marketing system in 2019
‘Open finance’ refers to creating new products and services by
collaborating on technologies and business ideas required by the
bank with outside parties, and sharing internal data, channels and
customers with our partners. We are committed to providing new
digital services that break down barriers by applying innovative
technologies developed by fintech/ICT companies as well as the
financial knowhow of the bank through sharing, openness and col-
laboration.
office space by allowing for an optimal development environment
for products related to financial APIs and the cloud, and estab-
lishing a comprehensive physical and technical support system
aligned with training and consulting via global enterprises. Moreo-
ver, we will continue to expand the scope of partnerships online by
positioning ourselves as a marketplace that provides wide-ranging
services with fintech companies through WiBee Bank.
Part 3. Upgrading Business Support Services and
Customer Experiences with New Digital Technologies
The Digital Financial Group plans to steadily promote internal busi-
ness innovation and upgrade customer experiences by leveraging
new digital technologies to preemptively respond to the rapidly
changing financial market environment.
Corresponding strategies to achieve this year's goal are: ‘Open
Customer’ strategies to open up customer channels to external
participation, as we provide services from Woori Bank, and intro-
duce external services within the bank's platform in return; ‘Open
Data’ strategies of exploring new services by opening up the finan-
cial data maintained by Woori Bank; and ‘Open API’ strategies of
opening up Woori Bank’s exclusive products and services to exter-
nal participation and offering non-financial services from outside
First of all, we will support asset management for customers by
creating an AI market platform that predicts various changes in
indicators in the market based on AI and utilizes such predictions
for managing asset soundness and risks internally. In addition, we
will apply AI-based data analysis outcomes to the product cura-
tion model and the model for enhancing customer transactions,
enabling more sophisticated digital marketing. By doing so, Woori
Bank will put in place an AI-powered bank which makes the most
the bank to customers.
of AI technologies.
Part 2. Stretching out Cooperation with Fintech
Companies by On/Offline Integration
The Digital Financial Group plans to expand multifaceted coopera-
tion with innovative fintech companies by transforming the existing
WiBee Fintech Lab. First of all, we plan to increase infrastruc-
ture-related support, which used be confined to the provision of
We will complete the adoption of Robotic Process Automation
(RPA) to improve the business environment and enhance produc-
tivity, thus automating many operations in the bank based on RPA,
and continuously expanding the scope of its application.
Besides, we will reaffirm our presence as a digitally-leading bank
by steadily implementing business innovation based on new digital
technologies, including the adoption of blockchain-based security
authentication, the creation of an open API and implementation of
Open Finance Strategy
a cloud-based environment.
OPEN
CUSTOMER
OPEN FINANCE
OPEN
DATA
OPEN
API
78
Woori Bank annual report 2018We Believe in Your Potential IT Support
innovation in financial it has gained more and
more attention amid the advancement of the
fourth industrial revolution. the banking sector
launches competitive new products and services
through the convergence of diverse new tech-
nologies and financial services. corresponding
deregulation and the roll out of solid security
systems and infrastructure have also topped the
agenda. Woori Bank ushered in the era of the
Woori innovative new infra (Wini) in May 2018
Setting up the Woori Global Standard System (WGSS)
The global presence of Woori Bank now exceeds 430 networks
around the world including 12 subsidiaries, 14 branches and four
offices, with separate systems used in each region. As such, Woori
Bank established the Woori Global Standard System (WGSS), a
new next-generation system for standardizing the IT system used
by global networks. By doing so, we established a standardized
environment for global networks that are available 24/7. The IT
Group will fully support the IT infrastructure of the globally com-
petitive Woori Bank.
2019 Plans
The IT Group will consider 2019 the starting year of its emergence
as a leading bank in terms of prompt and stable IT service inno-
vation. First of all, we will facilitate prompt business support by
optimizing IT operations , and adopt a new technological cloud in-
frastructure, and dramatically improve the level of resource utiliza-
tion. We will reinforce competitiveness in IT services by maximizing
synergies through competency integration between Woori Bank
and Woori FIS and by expanding personnel exchanges with Woori
FIS. We will ensure we generate synergies by establishing a collab-
orative system with Woori Financial Group, which was established
after two years of development, replacing the
in 2019.
Woori it new system (Wins), used for 14 years
since its launch in 2004.
We laid the foundation for a quantum leap as an
it leader in banking with dramatically stronger
business operations, customer convenience and
security by setting up a system focused on stabil-
ity and scalability.
2018 Performance
Woori Bank officially opened the next-generation WINI system on
May 8, 2018 after about two years and three months of develop-
ment after kicking off the project to set up the system in February
2016. The next-generation system is a UNIX-based one with more
scalability and flexibility than the existing mainframe-based one
and enables the prompt and flexible application of new technolo-
gies in diverse channels.
The launch of the next-generation system shortened working
hours and raised efficiency by improving convenience related to
IT operability for employees. In addition, customers of Woori Bank
can now access customized services more easily that cater to
their needs, and further shortened latency in business operations
thanks to faster IT processing.
79
To this end, we will realign the bank's IT operations with the group's
and the IT-related parties of each affiliate, and fully support the
setup of IT systems across the group. Woori Bank’s global channels
around the world will be fully supported. We will complete the
setup of the new system for our newly-established subsidiaries in
European/Philippines, along with 13 overseas branches including
those in China, Indonesia and Vietnam, and dispatch relevant per-
sonnel for prompt stabilization of the system. Preemptive respons-
es will take place by intensifying our bridging role between local
business IT, periodically reviewing IT issues and expanding local
user training sessions. This will enable the upgrade of the existing
management-oriented support system into a problem-solving-ori-
ented one.
Improving the IT Systems by Establishing
Next-Generation Systems at Home and Abroad
1. Launch of the next-generation Woori Innovative New Infra (WINI),
replacing the former Woori IT New Infra (WINS) which was intro-
duced in 2004
- Improvements in stability and scalability, enhanced efficiency through maintenance
of the business process, and savings in terms of maintenance costs
2. Launch of the Woori Global Standard System (WGSS)
- Standardization of operations and systems by integrating global network systems
and replacing previous local systems
3. Reinforcing IT training
- Boosting the capabilities of personnel by offering systematic training (collective
training) for staff in the IT Group and employees specialized in IT
4. Management of an IT specialist pool
- Strengthening corporate competencies by devising a systematic management sys-
tem for an IT specialist pool
Woori Bank annual report 2018We Believe in Your Potential Information
Security
Woori Bank continually strengthens its informa-
tion security organization and enhances admin-
istrative and technical security measures to pre-
vent any leakage of customer information.
2018 Performance
Reinforcing the Information Security Organization
The Head of the Information Security Division bears the responsi-
bilities of the Chief Information Security Officer (CISO) and Chief
Privacy Officer (CPO), managing all the teams in charge of privacy
(credit information) protection. We regularly hold Information
Security Committee meetings, which are chaired by our Chief In-
formation Security Officer (CISO) and attended by 15 department
heads at Woori Bank who are in charge of information security, IT
operation and development, customer information handling and
other relevant areas. 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 se-
curity experts who serve as white hat hackers. This team analyzes
and evaluates vulnerabilities, conducts mock hacking, and con-
ducts 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 personal information,
we allow only minimal access for employees so that they can only
retrieve the information required to perform their jobs. We also
reinforced internal controls for both the head office and branches
through regular monitoring of unauthorized look ups of personal
information unrelated to work along with inspections of personal
information management.
In addition, all our employees must attend bank-wide information
security training at least twice a year. We also make on-site visits
to promote privacy information awareness and prevent security
breaches. When we are required to consign customer information
for business purposes, we disclose the scope of responsibilities
and the consignee information on our website.
We conduct a regular inspection of the handling of information and
information protection training. Our management and supervision
of consignees are always thorough to ensure that customer infor-
mation is not lost, stolen, leaked, forged, falsified or damaged.
80
Woori Bank annual report 2018We Believe in Your Potential Technical Security Measures
Awards and Prizes
In July 2017, Woori Bank obtained ISMS (Information Security
Management System) designation from the Financial Security In-
stitute under the Ministry of Science, ICT and Future Planning, and
we renew our certification every year by passing strict standards.
Awarded a prize of the ‘CISO of the Year’ at the CIO Forum of the
Federation of Korean Information Industries,
Awardee: Vice president of Huh Jeongjin, CISO of the Informa-
tion Protection Team
In 2017, Woori Bank applied cutting-edge security technology us-
ing a dynamic app tampering prevention and obfuscation system,
which was a first among Korean banks. The new technological in-
novation bolstered the security of our mobile app services against
increasingly intelligent and sophisticated external cyber violations.
2019 Plans
The Information Security Division plans to build an integrated in-
formation security management system that can ensure real-time
integration, analysis, and action against both internal and external
online security breaches and threats. The Division will also intro-
duce 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.
81
Woori Bank annual report 2018We Believe in Your Potential Risk
Management
as seen from the global financial crisis in 2008,
failure to manage risks can lead to the collapse of
a financial institution, which in turn significantly
impacts the national economy. therefore, risk
management for financial institutions is a top
priority, as related regulations continue to be in-
tensified. Woori Bank is fully aware of the impor-
tance of risk management and complies with all
relevant global regulations. Risk management is
not only a means of crisis management but also a
useful tactic for increasing earnings.
stronger risk management improves asset
soundness, which results in reduced credit costs
and higher net income. Woori Bank will remain
focused on risk management down the road in
order to maintain this virtuous cycle.
2018 Performance
2018 was a year to focus on risk management by laying the foun-
dation for a financial group structure because the Bank's trans-
formation into a holding company was right around the corner.
Concerted efforts were made in the areas of portfolio rebalancing
and prevention of NPLs to respond to the economic slowdown.
This has led to the greatest increase in asset soundness among
major banks in Korea with the record-high income levels. In addi-
tion, we upgraded risk management systems with most up-to-date
platforms available. We established the ‘Big Eye,’ a corporate client
diagnosis system based on big data for the first time in the banking
sector, and enhanced our credit evaluation model by reflecting
the latest data. Meanwhile, diverse support was provided to boost
the risk management competencies of local staff while upgrading
global risk management, as the scale of the Bank's global business
expanded.
Part 1.
Portfolio Rebalancing and NPL Prevention
2018 was a year to concentrate on the rebalancing of portfolios to
ensure they remain strong against external shocks in preparation
for economic instability at home and abroad. Higher interest rates
in the U.S. created unstable conditions within and beyond Korea,
including concerns of capital outflow from emerging markets, the
trade war between the U.S. and China and signs of an economic
slowdown in China. The domestic economy witnessed higher risks
due to a sluggish economy through concerns over higher interest
rates, and a higher unemployment rate and bankruptcy rate among
the self-employed amid continued increases in household debt.
We imposed and managed exposure ceilings by predicting growth
rates in accordance with the industrial outlook in order to respond
to higher risks. We classified industries into 36 categories, induced
growth by giving high scores to promising industries, and restricted
growth for non-promising ones by imposing exposure ceilings at the
minimum level and constraining the approval process. Furthermore,
we newly adopted exposure ceiling management for each industry
Asset Soundness and Net Income Trends
[Unit: KRW billion]
net income
npl Ratio
1.47%
1,059
1,261
0.98%
1,512
0.83%
2,033
0.51%
2015
2016
2017
2018
82
Woori Bank annual report 2018We Believe in Your Potential among the self-employed in a bid to manage risks in the self-em-
First, we determined the current status of risk management in our
ployed category. Meanwhile, the loan review process has been
subsidiaries in the region. Weaknesses were discovered through
intensified for prevention of potential NPLs.
specific questionnaires and interviews with local staff, and re-
sponses from each subsidiary. In order for each subsidiary to reach
Review was underway for affiliates and companies with increased
the same risk management level as the parent bank in the most
risks, so that losses arising from NPLs could be minimized through
rapid and effective manner, we documented risk management
recommendations to reduce problematic loans. The NPL ratio, as a
regulations and organizational restructuring. Video materials for
consequence of such risk management efforts, dropped by 0.32%p
training were produced to boost the risk management competen-
from 0.83% at 2017-end to 0.51% at 2018-end, manifesting a dra-
cies of local staff, and parent bank regulations were translated into
matic increase in asset soundness and an exponential growth of
English for distribution.
Meanwhile, we upgraded the risk management readiness levels
at existing major overseas subsidiaries in the U.S., etc., by sharing
stress testing techniques with them.
2019 Plans
There are two projects being undertaken in 2019.
The first is to support the establishment of a risk management
system for a holding company after the conversion. One of the key
projects is the early approval of the Internal Ratings-Based Ap-
proach (IRB) for calculating the BIS ratio of the holding company.
According to domestic regulations, the BIS ratio has to be calculat-
ed based on the standardized method before the approval of the
IRB after the holding company has been established, in which case,
the BIS ratio is calculated as lower than the IRB. Therefore, we will
concentrate organizational competencies on acquiring approval for
the IRB of the holding company as soon as possible.
The second is to establish a comprehensive system for crisis re-
sponse. The recovery & resolution plan for financial companies is
expected to be introduced and implemented in Korea in 2019, ac-
cording to the supervisory authority. Under the scheme, banks are
obliged to establish recovery plans to normalize their business in
the event of a financial crisis and acquire approval from the super-
visory body each year.
Woori Bank plans to set up a risk response system for each risk
level ranging from the mildest risk level to the most severe sce-
nario possibly involving the bankruptcy of the bank, while devising
recovery plans. We are committed to strengthening our risk re-
sponse capabilities by coming up with a system to ensure a timely
response to risk indicators.
net income.
Part 2.
Upgrading of the Risk Management System
Big data is now used more broadly in the financial sector. It is used
most commonly for product advisory services based on analytics
of customer behavior, but Woori Bank applied big data to corporate
risk management for the first time among domestic banks. The Big
Eye, a corporate client analysis system, is used to diagnose signs of
business failure through machine learning, while providing sum-
maries of critical information by collecting all useful data, including
not only existing financial information but also records of VAT pay-
ments by key purchasing and sales partners, variations in electric-
ity bills and textual analysis of newspaper articles. Woori Bank is
now equipped with the Big Eye to cover everything from corporate
loan reviews to follow-up management in a faster and more accu-
rate manner.
We also improved the credit evaluation model, which is the basis
for managing credit risks. It is not only a means to decide on loans
by assessing the credit ratings of borrowers but also a risk man-
agement system used to provide critical information ranging from
the accumulation of allowances to calculation of the BIS ratio.
The credit evaluation model is two-fold: one system for retail loans
targeting retail borrowers and the other for corporate loans tar-
geting corporate borrowers. We upgraded both of the systems by
reflecting the latest data and trends. The distinction between high-
yield/low-yield borrowers was made clearer, through which credit
risk management was further improved.
Part 3.
Strengthened Global Risk Management
One of the projects recently prioritized by Woori Bank is the expan-
sion of its global business. The number of overseas branches has
increased and profits have skyrocketed along with assets over the
past several years. However, it is extremely important to ensure
our business acquisitions adapt to our risk management system
and manage risks accordingly because the Bank’s global expansion
is derived from a string of M&As with local financial institutions
across Southeast Asia.
83
Woori Bank annual report 2018We Believe in Your Potential Consumer
Protection
consumer protection along with asset sound-
ness is recognized as a core value in a financial
company. Woori Bank established an autono-
mous organization for protecting consumers after
launching the first-of-its-kind consumer protec-
tion department in 2010 among domestic banks to
enhance protection of consumers. the bank has
put in place a system for protecting consumers
throughout the entire cycle of development, sales
and follow-up management of financial products,
and initiated an upgrade of staff competencies in
terms of consumer protection. against this back-
drop, the bank has solidified its presence as a
leading bank in consumer protection, while being
selected for an award as an ‘excellent institution in
consumer protection’ by the Financial supervisory
service.
2018 Performance
The Consumer Protection Center has upgraded the competencies
of all staff to protect consumers by running systematic training pro-
grams in line with the roadmap for training on consumer protection
under the goal of becoming the best-in-class bank for consumer
protection, and fully supports on-site efforts to protect consumers.
In addition, the bank formed a comprehensive system for consumer
protection by integrating the customer service and consumer protec-
tion units, and implemented measures to protect the rights of con-
sumers and systematically manage customer satisfaction. We took
preemptive actions to prevent customer complaints by operating a
preliminary consultation system for consumer protection for tasks
related to product development, sales and business engagement,
and by conducting programs to improve existing programs based
on customer feedback. We also beefed up consumer protection by
adopting a code of ethics for sales practices, and proactively carried
out activities designed to protect customers’ assets by enhancing
the monitoring system for preventing financial fraud and engaging in
activities to prevent customer losses.
Better Protection of Consumer Rights and
Strengthened Competencies
Woori Bank has implemented the ‘Woori Code of Ethics for Busi-
ness Acts’ for better protection of consumer rights, and systema-
tized follow-up management measures by periodically verifying
compliance and reporting the results of such measures to the Fi-
nancial Consumer Protection Committee. We also explore ideas for
improved convenience in terms of access to finance for the disabled
and reflect them in our business management. To this end, we hold
meetings with such organizations as the Korea Differently Abled
Federation and Korea Federation of Organizations of the Disabled
to improve the accessibility of financial products and services for
the disabled who fall into the category of the financially underpriv-
ileged. We initiated an upgrade for staff competencies to protect
Awards and Prizes
Selected as an ‘excellent institution in consumer protection’
by the Financial Supervisory Service
Nominated as an excellent financial company
in the Evaluation of Financial Consumer Protection (the highest rank)
Awarded the grand prize in the 7th Financial Consumer Protection Award
by the Korea Economic Daily
Awarded the grand prize in finance (customer satisfaction)
by Asia Today
consumers by devising a training roadmap for systematic training
of the workforce for consumer protection and organizing 225 on-
site branch training sessions, 212 online training courses and 77
group training seminars. As a result of engaging in wide-ranging
programs for consumer protection, Woori Bank was rated ‘excellent’
in two categories and ‘good’ in eight, according to the Evaluation of
Financial Consumer Protection Practices conducted by the Finan-
cial Supervisory Service (FSS) of Korea, thus winning a commen-
84
Woori Bank annual report 2018We Believe in Your Potential dation given to outstanding financial firms. Our competencies for
and we also contributed to the arrest of about 450 financial fraud
best-in-class consumer protection were also recognized when we
suspects through our proactive engagement in prevention efforts
received the grand prize, in the form of the commissioner's prize,
aimed at protecting customer assets.
from the Financial Services Commission at the 7th Financial Con-
sumer Protection Awards, sponsored by the Korea Economic Daily.
Complaint Management
2019 Plans
The Consumer Protection Center will strengthen its competitive-
We have strived to minimize customer complaints through full-
ness by focusing on the concentrated competencies of its staff
fledged strategies designed to address issues, while minimizing
under the goal of achieving undisputed number one status in 2019.
the spread of complaints through prompt responses to customer
We will also boost customer happiness by upgrading financial fraud
complaints that might arise from the introduction of the next-gen-
prevention systems. We will do our utmost to enhance consumer
eration IT system. Accordingly, the number of complaints dropped
rights and provide consumer-driven financial services. To this end,
7.1 percent (79 cases) in 2018, excluding those related to system
we will intensify monitoring of incomplete sales by implementing a
operations.
Prevention of Financial Fraud
We upgraded our monitoring system for financial fraud by utilizing
big data and conducted educational campaigns to prevent financial
fraud with outdoor advertisements and videos screened in branches
aimed at stopping fraud. Furthermore, we organized seminars to
show appreciation to outstanding police officers with a history of
preventing financial fraud and awarded them commendations for
the first time in the banking sector, while at the same time solidifying
cooperative ties with institutions involved in preventive efforts.
As a consequence, the amount saved through financial fraud preven-
tion efforts by Woori Bank increased 87 percent (KRW 31. 5 billion),
second round of Happy Calls to ensure a culture of complete sales
for financial products and manage indicators for operational risks
in incomplete sales.
We will also continue to engage in efforts to boost financial access
for the financially underprivileged. We will also work to protect
customer assets by improving monitoring systems to reflect new
fraud and promptly respond to evolving techniques, and implement
promotional activities to prevent losses by utilizing social media,
targeting customers in their 20s and 30s who are more vulnerable
to financial fraud. Moreover, continued activities to preemptively
prevent complaints and establish a deep-rooted and autonomous
customer satisfaction culture in business units will enable Woori
Bank to achieve undisputed number one status, growing alongside
its customers.
85
Woori Bank annual report 2018We Believe in Your Potential Social
Contribution
Activities
in today’s world, where the emphasis is on the
social roles and responsibilities of finance, we
continue to practice sharing alongside the com-
munity to realize the three values of humani-
ty, happiness and hopefulness, and carry out
diverse social contribution activities including
support for small merchants and microfinance
2018 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 for all bank em-
ployees to take part in social contribution activities. It involves wel-
fare facilities that have established ties with 34 regional business
headquarters.
We encourage employees of the bank to periodically volunteer
and provide sponsorship for the socially underprivileged, includ-
ing infants, elderly citizens, and the disabled. We also run a social
contribution campaign in the first and second half of the year, giv-
ing out awards to high-performing branches in the area of social
contribution biannually to encourage voluntary participation by
employees. The donations for social welfare centers raised during
the campaign period are used to support the underprivileged.
In addition, we take the lead in spreading the culture of sharing by
sharing best practices from participating branches in the social
contribution campaign.
in order to fulfill our responsibilities as a major
‘Blood Drive’ with Greater Compassion
financial institution.
since launching the Woori Bank volunteer corps
in July 2007, we have been engaged in a number
of social contribution activities through our na-
tionwide branch network.
Woori Bank has conducted a ‘blood drive’ campaign since 2006.
The campaign, carried out during July and August when blood is
most needed, is one of Woori Bank’s social contribution activities
with the longest history where employees from branches nation-
wide voluntarily visit blood donation centers nearby, engage in
blood donation and donate their donation certificates. Blood dona-
tion certificates received after donating blood during the drive and
individually are used to provide support to patients with incurable
diseases including leukemia and pediatric cancers.
Sharing Daily Necessities for the Underprivileged
Woori Bank continues to engage in the act of sharing with the un-
derprivileged during traditional holidays and the winter season.
Meal kits consisting of essential food such as seasonal fruits and
86
Woori Bank annual report 2018We Believe in Your Potential prepared meals were prepared for the last Chuseok holiday, and
Children’s Care Fund’ where employees choose an amount below
distributed to 5,000 households through Seoul Association of So-
KRW 10,000 from their payroll to be automatically donated.
cial Welfare Centers, targeting elderly living alone and single-par-
ent families. Furthermore, we have donated KRW 1 billion to the
The Woori Care Fund is a representative project of the Woori To-
Community Chest of Korea to help out those in need each year
gether in Love and Support System, which develops and funds
since 2009, standing at the forefront of promoting genuine interest
worthy CSR programs.
in and consideration for the underprivileged throughout society.
This year, the Woori Care Fund has been utilized to initiate donation
projects that feature customer involvement along with the Togeth-
er with Kakao (a mobile/web donation platform), taking the lead
in raising social interest in the underprivileged. We intend to firmly
establish a corporate culture based on sharing and service, thus
fulfilling our responsibilities as a good corporate citizen.
Projects to Support Future Leaders
Woori Bank engages in diverse social contribution programs to
help the future generation. Last May, we delivered messages of
courage and hope to children with incurable diseases through the
‘Woori Hope Together Project’ that fulfils the wishes of children
that have chronic illnesses by allowing them to meet well-known
sports stars, attend private music recitals and become radio DJ-
for-a-day.
In addition, the Woori Together Scholarships for Youth are given
Happiness: Pursuing Happiness through Sharing
Woori People’s Culture of Donation: ‘Woori Care Fund’ and ‘Woori
Children’s Care Fund’
Woori Bank strives to create a culture that encourages employees
to local children’s centers twice a year. 164 children (on an ac-
to donate voluntarily to good causes. The bank’s two representa-
crual basis) received scholarships in 2018 through this program.
tive funds are: the ‘Woori Care Fund’ where employees voluntarily
The Special Event for Children from Remote Islands and Areas is a
donate a certain percentage of their monthly pay, and the ‘Woori
program that invites children from rural or fishing villages where
87
Woori Bank annual report 2018We Believe in Your Potential social and cultural resources may be relatively scarce to visit Seoul.
The event offers diverse experience programs including visits to
Gyeongbok Palace and museums.
Hopefulness: Inspiring Hope Through Communication
and Mutual Prosperity
‘Global Volunteering’ to deliver hopes
To address social issues in the global community through the
bank’s global networks, Woori Bank conducts a variety of CSR
activities and fulfills its social responsibilities as a global financial
firm.
For instance, last September, the global volunteer group consist-
Along with education and training for multicultural students to
ing of 35 outstanding employees from branches were engaged in
develop their talents in athletics, basketball, shooting, art, music
improving the educational environment by painting the buildings
and languages, scholarships have been launched to provide sup-
of an elementary school in Phnom Penh, Cambodia, and had a time
port for them to acquire professional licenses and enter contests.
getting to know local children better. Furthermore, we donated
Moreover, sponsorship is provided for wide-ranging educational
money to construct a playground with a soccer field for children so
programs including a multicultural children’s choir, economics and
that they have a place to run around.
financial education and cultural understanding lectures for married
immigrants to enable multicultural children to grow in a healthy
In July 2018, we conducted the Campaign to Share Hope to help
environment and adjust to Korean society.
children who have become climate refugees. We gave out T-shirts
to children from underdeveloped countries who have lost their
The Foundation also hosted Woori Wedding Day, a joint ceremony
homes due to climate change and natural disasters and sponsored
for ten multicultural couples who could not afford a wedding cere-
services to prevent nutritional deficiencies.
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.
Woori Multicultural Scholarship Foundation: A Reliable Partner
for Multicultural Families
The Woori Multicultural Scholarship Foundation is a non-profit cor-
poration funded by Woori Bank and other affiliates of the Woori Fi-
nancial Group that was established in 2012. Its diverse projects help
multicultural families in Korea to overcome cultural and linguistic
differences and comfortably integrate themselves into society.
Since its establishment, approximately KRW 2.6 billion has been
donated to a total of 3,340 students from multicultural families.
Equal opportunities in education were provided to multicultural
students through scholarship programs, thereby creating an ed-
ucational environment for students to focus on studying without
incurring a financial burden.
88
Woori Bank annual report 2018We Believe in Your Potential Woori Smile
Microcredit
Woori Bank is engaged in Microcredit to spear-
head the efforts in practicing socially responsible
banking by supporting the financially struggling
and socially vulnerable and neglected custom-
ers. in 2009, Woori Bank led in the contribution of
kRW 10 billion per year, totaling kRW 50 billion
over five years, together with WFh and its affil-
iates, to establish and operate the Woori Micro-
credit Foundation.
the foundation appointed famous people from
the religious, academic and social welfare circles
as outside directors, ensuring the fairness of the
project and the support of citizens. there are
nine branches across the nation with 28 employ-
ees.
Woori Smile Microcredit’s Cumulative Performance
150
130
112
[Unit: KRW billion]
2018
2017
2016
[Unit: cases]
2018
2017
2016
2018 Performance
Active Implementation of
Social Responsibility Finance
Major Performance of Microcredit Foundation
By extending support to the financially vulnerable, the socially ne-
glected and those who lack financial access, we extended Micro-
credit worth KRW 621 billion in 2018, leading the way in practicing
socially responsible financing. Microcredit services were presented
with several products: ‘Woori New Hope Spore Loan’ for low-credit
low-income customers; and ‘Woori Switch-Over Dream Loan’,
whereby citizens suffering from high-interest rate loans could
make the transition to low-interest loans.
Through Microcredit services, Woori Bank extended approximately
KRW 150 billion of credit in 13,182 cases through 2018. In 2018,
pursuing the business goal of ‘Microcredit that helps achieve
self-sufficiency’, we achieved a tremendous increase in the Micro-
credit extensions, by approaching customers and developing cus-
tomized products. Woori Bank extended approximately KRW 19.3
billion of credit in 2,031 cases through 2018 (13,182 cases worth
KRW 150 billion in total). It was not a mere voluntary activity: sup-
port has been given so that recipients can become self-sufficient
through consulting and microcredit events in the form of visiting,
consulting and extending a helping hand on-site.
Microcredit Foundation’s Key Products
• Business Startup Loan: A loan for small-scale registered entrepreneurs
to start a new business
• Working Capital Loan: A loan for individual entrepreneurs (who have
already been in business for over six months) to purchase products, raw
materials, etc.
• Loan for Facility Improvement Funding: A loan for individual entrepre-
neurs (who have already been in business for over six months) to im-
prove the facility of business sites.
• Sunshine Loans for University Students and Young People: A loan for
emergency funding for youngsters and university students who are un-
der 29 years old (under 31 years old for men who served in the military).
Microcredit that Helps Achieve Self-Sufficiency
We plan to expand support by exploring low-income industries
with high vulnerability and sign agreements with traditional market
merchant councils and associations. Meanwhile, we will secure ex-
clusive channels for better accessibility to Microcredit. In addition,
we will take the lead in promoting and sharing the genuine role and
purpose of Microcredit, together with society, and spread these
roles and directions by exploring and facilitating best practices, to
raise confidence among recipients.
11,151
9,338
13,182
Woori Bank will establish a foundation for the self-sufficiency of
low-credit low-income people through Microcredit services, en-
suring the stabilization of livelihoods and improving their welfare.
89
Woori Bank annual report 2018We Believe in Your Potential Ethical &
Compliance
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 impor-
tance 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 employ-
spirit of fair competition, and contributing to the
establishment of a fair and clean corporate culture
based on mutual trust and a compliance mindset.
2018 Performance
Reinforcing Ethics and Compliance Training
In 2018, Woori Bank launched various ethics and compliance train-
ing programs so that all our employees are able to understand and
put the ideals of ethical management into practice.
First, we conducted online training for all employees, introducing
case studies for them to easily understand the Code of Ethics. Sec-
ond, we implemented a bimonthly Ethics/Compliance Self-Check
Test so that the employees can develop a detailed understanding
of the Code of Ethics and examine the behavioral standards appli-
cable 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 commen-
tary on the Code of Ethics and other regulations related to internal
control.
ees recognize the importance of ethical manage-
Action Programs for Ethical Management
ment. For Woori Bank, our employees and society
as a whole, as well as our customers and share-
holders, are important stakeholders.
Based on the high level of ethical finance im-
ple-mented through the Woori code of ethics, we
will fulfill our social responsibilities for all stake-
holders and contribute to the advancement of
society. We aim to prevent any threats to the trust
and performance which we have carefully built up
because of any small oversight or negligence by
our employees in the ever-stringent market with
no tolerance for unethical acts. to this end, we are
committed to protecting the company and our em-
ployees through ‘compliance awareness’ ensuring
compliance with laws and principles as well as the
Woori Bank offers many programs to promote ethical management
and compliance. The first is the Woori Hotline, a channel through
which best-of-breed practices can be commended and violations
of the Code of Ethics by employees can be reported. The Woori
Hotline is a channel for employees, partners, and other stakehold-
ers to report on compliance with ethical management standards.
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 concept of of ethical management
and the practice of compliance. The Council holds meetings twice a
90
Woori Bank annual report 2018We Believe in Your Potential year chaired by the Compliance Officer. It discusses various agen-
of compliance and upgraded our global compliance capabilities.
da items, including how to uphold the Code of Ethics and how to
We will diversify ethical and legal compliance training for employ-
improve ethical management standards. As such, the Council dis-
ees to raise awareness of legal compliance. While continuing with
cusses and decides on specific policies related to ethical manage-
existing ethical compliance training including training seminars
ment. Finally,, Woori Bank has a Whistleblowing Program in place
offered online, we also aim to boost ethical and legal awareness
to report foul play by any of our employees as well as the Clean
through collective group training sessions.
Contract System to encourage transparent and honorable agree-
ments for all providers and businesses participating in contracts
The chief supervisor system will be further reinforced to strength-
and purchases.
On-Site Legal Services
Woori Bank provides prompt legal services by operating a pool of
lawyers exclusively for branches with the aim of providing contin-
gent legal counseling at business sites. In addition, we provide on-
site support by shortening the time required for legal reviews with
case-specific standard agreements uploaded on the legal portal
system. Furthermore, we promote better understanding among
bank employees of legal cases by providing a ‘Handbook on Legal
FAQs’ with the most frequently asked legal questions at branches,
and posting the information on the portal system by job type.
2019 Plans
In 2019, Woori Bank aims to ‘lay the foundation for the continued
growth of the bank by establishing a culture that ensures all em-
ployees comply with laws and regulations.’ To this end, we raised
the compliance mindset among employees, intensified monitoring
91
en monitoring of legal compliance. Dedicated lawyers will be dis-
patched to several departments within the first quarter of this year
– including the Wealth Management Business Department, Trust
Department and Trading Department – among those engaged in
product development and sales in order to prevent legal risks in
advance. This will enable monitoring of potential regulatory vio-
lations from the initial development stage involving new products
and schemes.
Lastly, differences between what is required by the local supervi-
sory authorities of overseas branches and the current level of com-
pliance are to be analyzed and improved through the diagnosis of
global consultancies in order to upgrade global compliance stand-
ards. In 2019, Woori Bank will enhance its prestige as a leading
bank in Korea by laying the foundation for continued growth based
on ethical compliance management.
Woori Bank annual report 2018We Believe in Your Potential Anti-Money
Laundering
a close look at recent regulatory trends in an-
ti-money laundering reveals that financial in-
stitutions that neglect anti-money laundering
operations place their very existence at risk. We
launched the sanctions Management team un-
der the compliance department for the first time
2018 Performance
Intensifying Anti-Money Laundering Efforts in Korea
The Anti-Money Laundering Department (before reorganization
on 26 Apr. 2019) came up with measures to enhance compliance
in accordance with the virtual currency guidelines released by the
Financial Services Commission announced in January 2018. We put
in place a procedure for authenticating virtual asset service pro-
viders, and for authenticated providers, we conducted a reinforced
customer identification procedure which also includes site inspec-
tions. We intensified monitoring of financial transactions by users
as well as virtual asset service providers by allocating personnel to
dedicated positions responsible for virtual currency handling. We
were also actively reporting suspicious transactions.
Furthermore, we established and utilize a Risk Based Approach
(RBA) for the prevention of money laundering whereby money
laundering risks are identified, analyzed and assessed to differen-
tiate the level of risk management to effectively conduct operations
related to Anti-Money Laundering. RBA-based risk assessment
took place throughout the bank on 191 items within the AML sys-
tem, resulting in the setup of a system for identifying the current
among korean commercial banks in 2017 in tan-
status of risk indicators and monthly reporting.
dem with the domestic and international trend of
enhanced supervision of anti-money laundering
operations. We upgraded the anti-Money laun-
dering team under the compliance department
into the anti-Money laundering department at
the end of 2017.
our department ensures preemptive responses
against money laundering threats, while also
promoting compliance with inspections by do-
mestic and international supervisory authorities
under the goal of raising the overall level of the
bank’s anti-money laundering efforts based on
risk assessment. the anti-Money laundering
department of Woori Bank is ready for upcoming
Mutual evaluation by the Financial action task
Wide-ranging training sessions were offered to upgrade compe-
tencies on and raise interest in Anti-Money Laundering at business
sites. We enhanced the efficiency of training sessions which target-
ed employees of specific job ranks and personnel categories, and
conducted online courses and in-house video training for those
who could not attend collective group training in order to raise the
accessibility of Anti-Money Laundering training.
Upgrading the Level of
Anti-Money Laundering Efforts Abroad
In tandem with the global trend of ever-stricter Anti-Money Laun-
dering, Woori Bank launched the Overseas AML Team by upgrading
the Anti-Money Laundering Team under the Compliance Depart-
ment into the Anti-Money Laundering Department as of the end of
2017. The newly formed Overseas AML Team conducted diverse
operations to improve compliance at our New York and LA Branch-
es and our subsidiary in the U.S., which has the most stringent
Anti-Money Laundering supervision standards in the world. We
recruited a specialist who was a former staff member of the U.S.
Government authority and improved our competencies in compli-
ance management, added effective communication into the Chan-
Force (FatF) and has boosted the bank’s compe-
nel with U.S financial authorities.
tencies in all aspects by setting up an advanced
monitoring system to prevent money laundering,
training employees and improving management
capabilities.
We assessed the site of the head office and conducted an inde-
pendent third-party inspection enhance readiness for a compre-
hensive inspection by the local supervisory authorities, and came
up with points for improvement under the supportive leadership
of the head office, and took other relevant measures. During the
92
Woori Bank annual report 2018We Believe in Your Potential comprehensive examination at our LA Branch, compliance officers
from the head office held a meeting with officers from the local
supervisory authority, reaffirming Woori Bank’s commitment to
Anti-Money Laundering efforts.
The Anti-Money Laundering Department distributed the Glob-
al Guidelines on Anti-Money Laundering covering all relevant
AML details at all overseas branches, and introduced and revised
provisions for each country. Meanwhile, we ensured preemptive
responses to local financial regulatory authorities’ stringent regu-
lations by conducting risk assessment and diagnosis as part of ef-
forts aimed at preventing money laundering with consulting firms
for branches in Hong Kong and Singapore, which are international
financial transaction hubs.
Training material related to Anti-Money Laundering was distrib-
uted to overseas branches every month, and training sessions are
held in Korea for employees that are dispatched abroad and for
overseas staff so that AML competencies were reinforced at all
overseas branches.
2019 Plans
Our Anti-Money Laundering Department will upgrade the AML and
sanctions management system at home and abroad in 2019. We
plan to make improvements in diagnosing risks at the head office
and at overseas branches as well as improve the system in part-
nership with global consultancies.
We are also committed to setting up an enterprise-wide preemp-
tive risk management system through intensive management of
documents at the head office to verify the actual ownership of sub-
sidiaries, improve KPI management, and enhance intensive site in-
spections and monitoring of domestic and international branches.
While ensuring readiness for inspections by the local supervisory
authorities at overseas branches, and boosting regulations on An-
ti-Money Laundering, we will also translate related documents into
English in order to expand support for Anti-Money Launderingop-
erations at domestic and overseas branches.
Moreover, we will work to establish an advanced AML system by
adopting the preventive Trade-Based Money Laundering (TBML)
system as well as a globally-integrated AML system to become
globally competitive in the field of Anti-Money Laundering. At the
same time, we will increase the efficiency of Anti-Money Laun-
dering operations through upgraded training for existing and new
employees.
Preemptive Responses against Sanction Risks
In 2018, various programs were implemented to strengthen com-
pliance programs to ensure observance of all economic sanctions.
First, we improved the sanction filtering system at all overseas
branches. We adopted the filtering system for screening operations
which used to be conducted through the existing bank accounting
system in order to perform such screening more professionally.
Second, we conducted risk assessment related to compliance
with economic sanctions. Improvements were made by identifying
strengths and weaknesses in terms of compliance with economic
sanctions. Third, we upgraded staff training.
We conducted training sessions with external instructors for exec-
utives to comply with economic sanctions.
93
Woori Bank annual report 2018We Believe in Your Potential Financial
Review
096
110
244
246
ManageMent’s DisCussiOn anD analysis
inDepenDent auDitOrs’ repOrt
OrganizatiOnal Chart
glObal netwOrk
Management’s Discussion and Analysis
1. Disclaimers on Forecast Information
Activities, events or phenomena that are expected and predicted to occur in the future in this annual report for Woori Bank reflect the
company’s thoughts and opinions on events and financial performance at the time when this document was prepared for disclosure in
the same term. The forecast information is based on diverse assumptions associated with the future business environment, and, con-
sequently, such assumptions may be judged to be inaccurate in the future. Moreover, the assumptions include risks, uncertainties and
other factors that might cause critical differences between estimated outcomes in the forecast information indicated here and the actual
outcomes. Factors that might induce such critical differences encompass factors related to internal corporate management and those
related to the external environment, and include other wide-ranging factors.
We have no obligation to disclose a revised report with corrections on matters prescribed in the forecast information in order to reflect
risks or uncertainties that might occur after the preparation of the forecast information. In conclusion, we cannot confirm the realization
of expected results or matters forecast by the bank or the occurrence of any impacts projected in this business report. Forecast infor-
mation prescribed in this report is current as of the time the report was prepared. Please note that we have no plan to provide updates
on such risk factors or forecast information. Furthermore, it should be noted that even under such circumstances, the forecast data shall
not be used as evidence for legal responsibility regarding investment outcomes for customers.
2. Overview
In 2018, uncertainties in the global economy were amplified, including the prolonged U.S.-China trade conflict and sluggish progress
related to the Brexit deal, along with stronger regulations on the real estate market and the expected emergence of additional Inter-
net-only banks, overall a year threatening the traditional way of conducting business. Even amidst such difficult circumstances, Woori
Bank has strengthened its financial performance over the past three years.
As financial soundness indicators including our non-performing loans (NPL) ratio and delinquency ratio radically improved each year,
asset quality and capital adequacy indicators also demonstrated a strong positive trend, with the Common Equity Tier 1 ratio surpassing
11.15%. This overall improvement due to our enhanced risk management competencies, allowed us to exhibit outstanding business
performance within the low-growth and low-interest-rate environment over the past few years. Continuing our strong financial results
from 2017, Woori Bank managed to surpass the previous year’s net income within only nine months in 2018.
Key Management Indicators
Category
Profitability
Return on Assets (ROA) 1)
Return on Equity (ROE) 1)
Net Interest Margin (NIM) 2)
Capital Adequacy
BIS Ratio 1)
Asset Quality
1) Based on consolidated financial statements
2) Based on separate financial statements
Common Equity Tier 1 Ratio 1)
NPL Ratio 2)
Delinquency Ratio 2)
96
(Unit: %)
2018
(185th term)
2017
(184th term)
2016
(183th term)
0.62
9.69
1.52
15.65
11.15
0.51
0.31
0.48
7.42
1.47
15.40
10.95
0.83
0.34
0.41
6.36
1.41
15.29
10.50
0.98
0.46
Woori Bank annual report 2018We Believe in Your Potential In response to more rigorous regulations on household loans, we have pursued balanced growth in assets involving households, SMEs,
and large companies, while we have continuously enhanced non-interest income by reinforcing asset management competencies to
meet customer needs. In January 2018, Woori Bank was also re-appointed the managing custodian bank for the National Housing and
Urban Fund (NHUF), in recognition of Woori Bank’s business competencies and credibility. As a result of enhancing fundamentals by
improving asset quality and capital adequacy indicators, Woori Bank’s credit ratings were revised upwards (A2→A1) by Moody’s in April
2018, manifesting recognition of the bank’s improvement of creditworthiness by the international rating agency.
As growth in the Korean financial market remain stagnant, many domestic banks are accelerating entry into global markets. As of the
end of 2018, Woori Bank operates 430 global networks, the largest number of networks as a Korean commercial bank. In October 2018,
we acquired approval to establish Woori Bank Europe GmbH from the German Financial Supervisory Service BaFin and the European
Central Bank. This is a clear sign that we have completed a ‘global financial belt’ connecting Asia, Europe, the Middle East and the Amer-
icas, as we continue to advance into overseas business opportunities.
Through the development of digital financial technology such as big data, blockchain, and artificial intelligence (AI), IT firms have made
rapid inroads into the financial market, especially as more Internet-only banks are expected to enter the market. Under these circum-
stances, as it seeks to improve its financial service environment to be more user-centric, Woori Bank has launched next-generation sys-
tems to replace outdated computing systems. We have also intensified enterprise-wide digital competencies by establishing a Big Data
Center to explore and implement new digital technology-related projects.
After acquiring approval to establish Woori Financial Group Inc. by the Financial Services Commission in November 2018, Woori Bank
successfully engineered a shift to a holding company structure on January 11, 2019. This is expected to further enhance the level of cus-
tomer services through wide-ranging business fields such as through the expansion of non-banking business portfolios and provision
of customized comprehensive asset management services. In the same vein, Woori Bank set its management goal for 2019 as ‘Standing
Together with Our Customers for the Past 120 Years, Leaping Forward as a Great Bank’ under which, we will strive to be a bank that
fulfills its social responsibilities by scaling up support for the financially underprivileged and SMEs in 2019 by ‘strengthening custom-
er-centered marketing’ and ‘realizing the social values of finance.’
3. Financial position & Business performance
A. Financial position & Business performance
(1) Growth
Account
Total Assets
Loans in KRW
Corporate loans
Household loans
Public and other loans
*Based on consolidated financial statements
(Unit: KRW billion)
2018
End of the (current)
185th term
2017
End of the (previous)
184th term
Change
(amount)
Change
(percentage)
340,447
211,065
93,856
113,704
3,505
316,295
200,213
89,666
106,814
3,733
24,152
10,852
4,190
6,891
(229)
7.64%
5.42%
4.67%
6.45%
(6.12%)
As of the end of 2018, Woori Bank’s total assets (consolidated basis) stand at KRW 340.4 trillion, a KRW 24.2 trillion (7.6%) increase
from the previous year.
The increase was mainly due to the year-on-year increase of loans denominated in Korean won by KRW 10.8 trillion (5.4%), the bank’s
key asset category. Corporate loans increased by KRW 4.2 trillion, and household loans increased by KRW 6.9 trillion, highlighting the
portfolio’s balanced growth. In 2019, Woori Bank will keep pursuing a strategy of balanced asset growth in consideration of risk man-
agement and profitability.
97
Woori Bank annual report 2018We Believe in Your Potential (2) Profitability
Account
Operating income
Net interest income
Non-interest income
net fees & commissions income
securities income
net gain (loss) on available-for-sale (aFs) financial assets
FX/Derivatives/Other operating income
Impairment losses due to credit loss
General and administrative expenses
II. Non-operating gain (loss)
III. Net income before income tax expense
IV. Income tax expense
V. Net income
Net income attributable to owners
Net income attributable to non-controlling interests
* Based on consolidated financial statements
(Unit: KRW billion)
2018
(Current) 185th term
2017
(Previous) 184th term
Change
2,759
5,651
1,062
1,070
224
80
(311)
(330)
2,157
5,221
1,252
1,070
321
196
(336)
(785)
(3,624)
(3,531)
46
2,805
(753)
2,052
2,033
18
(207)
1,950
(419)
1,530
1,512
18
603
430
(190)
-
(98)
(117)
25
456
(93)
253
855
(334)
522
521
1
In 2018, Woori Bank’s net income reached KRW 2,033 billion (consolidated basis, controlling interests), recording an increase of 34.4
percent or KRW 521 billion in annual growth compared to 2017. This resulted in an increase in net income of an average 24.5 percent for
three consecutive years (19.1% in 2016, 19.9% in 2017 and 34.4% in 2018). The increase resulted largely from 1) an increase in interest
bearing assets; 2) improvement in the net interest margin; and 3) a decrease in credit cost.
An increase in interest income was driven by even growth in the 6.5 percent range for SME loans and household loans, respectively,
year-on-year. The net interest margin (NIM) also increased by 0.05%p from the previous year due to a continuous focus on increasing
the portion of core deposits. As a result, NIM stood at KRW 5,651 billion, up 8.2 percent year-on-year.
Non-interest income dropped by KRW 190 billion from the previous year. This is attributable to the occurrence of non recurring gains on
the sale of loans in the previous year and a drop in the gains related to investment securities with the adoption of the IFRS9 standard in
2018. There has been a slight drop in the card fee income due to a decrease in credit card merchant fees, and etc., but trust-related in-
come fees generated by core asset management increased by about 25 percent year-on-year, highlighting our continued growth.
General and administrative expenses including personnel and non-personnel expenses were KRW 3,624 billion, exhibiting an increase
of 2.6 percent or KRW 93 billion year-on-year. Woori Bank implemented voluntary early retirement program to a greater number of
employees but adequately managed and kept a minimum level of an increase in general and administrative expenses by improving the
manpower structure and sales channel continuously over the years.
Impairment losses due to credit loss reached KRW 330 billion in 2018, a decrease of KRW 456 billion from the previous year. This is at-
tributable to the fact that despite the reserve of a large-scale allowance relating to Kumho Tire Co., Inc., bad debt expenses continued to
decrease over the previous years, thanks to the continued improvement of asset quality. Woori Bank has positively managed asset qual-
ity and bad debt expenses by increasing quality credit assets and through continued monitoring and preemptive control of industries,
such as shipbuilding, construction and marine transport, as well as rigorously strengthening the level of risk management. As a result,
the NPL ratio improved to 0.51 percent in 2018, the lowest level ever.
Non-operating income in 2018 recorded a gain of KRW 46 billion, up KRW 253 billion from the previous year. This gain was a result of
impairment losses due to the credit loss regarding Kumho Tire in 2017, and the contribution of issuance costs for an unclaimed amount
of cashier’s check to the Korea Inclusive Finance Agency under the revised Microfinance Support Act in 2017.
98
Woori Bank annual report 2018We Believe in Your Potential Woori Card, as a subsidiary of Woori Bank, achieved net income of KRW 114.8 billion in 2018, which is up about 13 percent from KRW
101.2 billion in 2017. Despite the drop in fees from card merchants due to a greater range of small merchants & small-and medi-
um-sized merchants and additional fee discounts received from small or medium sized merchants, operating income went up due to
higher card revenues year-on-year (KRW 72.9 trillion → KRW 75.3 trillion, +2.4 trillion) and an increase in financial assets (KRW 3.5
trillion → KRW 4.2 trillion, +0.7 trillion). This is also a result of continued cost saving efforts including higher efficiency in marketing and
a reduction in bad debt expenses. Meanwhile, Woori Card continues to expand its profit base with volume in new businesses such as in-
stallments/leases/loans reaching KRW 1,039.3 billion.
Woori Investment Bank had a significantly higher net income of KRW 32.4 billion in 2018 based on separate financial statements com-
pared to KRW 20.6 billion in 2017. Improved profitability is expected to continue in 2019 due to higher interest income generated from an
increase in assets under management including short and long-term loan balance (loans & receivables and CMA assets under manage-
ment) and higher fee income management, leading to higher ordinary profits.
In 2019, a challenging economic landscape is likely to unfold just as in 2018 due to the U.S.-China trade war and changes in the financial
regulatory environment. Therefore, Woori Bank plans to focus on competencies in non-interest income in order to maintain strategies
for adequate growth to match the expected economic growth rate for 2019 and ensure a balanced profit structure. In addition, we will do
our utmost to manage the general and administrative expenses at a stable level through proactive efforts at cost savings, such as induc-
ing higher efficiency in personnel and channels, and expanding our global network, given that the domestic market is unlikely to witness
dramatic growth.
(3) Asset Quality
Category
(Unit: KRW 100 million, %, %p)
2018
(Current) 185th term
2017
(Previous) 184th term
Change
Indicators
Change
Indicators
Change
Indicators
Non-performing loans (NPL)
11,825
(6,571)
18,396
NPL ratio
NPL coverage ratio *
Delinquency ratio
0.51
119.4
0.31
(0.32)
31.7
(0.03)
0.83
87.7
0.34
(2,725)
(0.15)
3.2
(0.12)
21,121
0.98
84.5
0.46
* 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 Businesses (as of January 26, 2017) recognized bad debt reserves as capital, therefore excluding bad debt reserves from the sum
of allowances. This calculation has been made based on the amended regulations.
Woori Bank has shown outstanding increases in asset quality each year through preemptive risk management and continued ‘back-
door-locking’.
The NPL ratio has been reduced continually, from 0.98% in 2016, to 0.83% in 2017 and 0.51% in 2018. The NPL coverage ratio is also in-
creasing annually, from 84.5% in 2016, to 87.7% in 2017 and 119.4% in 2018. Based on these results, the bank is thoroughly prepared for
any additional losses that it may incur.
Corporate loans in 2018 reached KRW 120 trillion with an NPL ratio of 0.75 percent, against the 2017 results of KRW 116 trillion and
1.37 percent. The NPL ratio significantly decreased due to the inflow of financially sound businesses, proactive bad debt write-offs and
preemptive portfolio management. Household loans grew to KRW 113 trillion from KRW 107 trillion in 2017 in total with an NPL ratio of
0.25 percent, slightly up from the 2017 results of 0.24 percent (based on the standards of the Financial Supervisory Service in regard
to non-performing loans). Since adequate allowances have been reserved for debtors involved in debt restructuring measures such as
work-outs and corporate rehabilitation, the likelihood of additional losses in terms of NPL is very low. For these debts, normalization
efforts continue while sales or write-offs may be considered if normalization proves impossible. Borrowers with possible insolvencies
are monitored to a greater degree so that we can take preemptive action amid the uncertain domestic or global financial conditions con-
tinue.
99
Woori Bank annual report 2018We Believe in Your Potential (4) Capital Adequacy
Account
Common equity Tier 1 capital
Additional Tier 1 capital
Tier 2 capital
Total BIS capital
Risk-weighted assets
Common equity Tier 1 ratio
Tier 1 capital ratio
BIS capital adequacy ratio
2018
(Current) 185th term
2017
(Previous) 184th term
17,276
3,148
3,828
24,251
154,971
11.15%
13.18%
15.65%
16,075
3,042
3,487
22,603
146,762
10.95%
13.03%
15.40%
(Unit: KRW billion)
Change
+1,201
+106
+341
+1,648
+8,209
+0.19%p
+0.15%p
+0.25%p
In 2018, Common Equity Tier 1 capital of Woori Bank totaled KRW 17,276 billion, an increase of KRW 1,201 billion or 7.5 percent from
the previous year. Additional Tier 1 capital was KRW 3,148 billion, an increase of KRW 106 billion year-on-year, which resulted from
the repayment of hybrid securities issued before the implementation of Basel III standards. In consideration of the issuance cost, Woori
Bank plans to reduce the scale of its hybrid securities on a continual basis. Tier 2 capital amounted to KRW 3,828 billion due to an in-
crease of KRW 341 billion year-on-year, affected by such factors as the decrease in recognized subordinated debt issued before the
implementation of Basel III standards and the rising exchange rate compared to the previous year. Total BIS capital went up by KRW
1,648 billion year-on-year to KRW 24,251 billion. As of the end of 2018, the Risk-weighted assets of Woori Bank totaled KRW 154,971
billion, an increase of 5.6 percent or KRW 8,209 billion from the previous year(lesser than an increase of 7.6% assets on a consolidated
basis from the previous year). This is the result of the bank’s proactive efforts to enhance capital adequacy by decreasing risk-weighted
assets (on a consolidated basis), originated from increasing high creditworthiness assets and reducing potentially delinquent assets. In
2018, Woori Bank achieved a common equity Tier 1 ratio of 11.15 percent, a Tier 1 capital ratio of 13.18 percent, and a total capital ratio
of 15.65 percent, which translates into a continued increase of 0.19%p, 0.15%p, and 0.25%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 was named as the preferred bidder in October 2017 in the bidding process to select the primary custodian bank for the National
Pension Service (NPS). It is expected that Woori Bank will expand into new areas thanks to its selection as the main bank for the NPS, the
first noticeable change in primary custodian bank designation in the decade since 2007. We signed a ‘Custodian Bank Agreement’ in Jan-
uary 2018 and began our term as the exclusive custodian bank for the NPS according to the three-year contract starting from March 2018.
Woori Bank handles the NPS’ banking business, which includes pension premium collection, pension payment, fund management for the
headquarters and operational funds settlement. The designation is expected to bring about promotional effects, enhance fee income as
well as income from developing and selling affiliated financial products as it will help Woori Bank build a stronger relationship with the
NPS, Korea’s representative pension fund with retained reserve funds of KRW 639 trillion and 21.94 million subscribers.
C. Business Rationalization
(1) Alteration and Reorganization of Business Groups
Woori Bank changed its organizational structure to facilitate sales and strengthen sales support functions, implemented a corporate
re-organization to expand synergies as a comprehensive financial group, and expanded its risk management units. First, we changed
the existing three-part structure into a dual structure such as sales and sales support in order to raise efficiency in decision-making
and collaboration at home and abroad by establishing cross-affiliate collaborative systems for sales and sales support (As of Apr. 2019,
additional reorganization occurred so please refer to p.244 Organizational Chart). In addition, the Risk Management Group was trans-
ferred to fall directly under the purview of the CEO of Woori Bank to ensure stronger autonomy for risk management officers, and the
Credit Risk Management Department was launched as an exclusive unit for systematic management of credit risks.
100
Woori Bank annual report 2018We Believe in Your Potential (2) The Voluntary Early Retirement Program and Other Matters
Since 2005, Woori Bank has implemented an Outplacement Services Program that serves as our amended and upgraded ERP program.
The Outplacement Services Program(supporting individuals who are exiting the business) aims to resolve the bottleneck in promotions
and improve the bank’s human resource structure while allowing employees to find new opportunities during the second chapter of
their lives. In particular, the bank operates a support center and various programs for employees who plan to change jobs to provide
systematic support for a new career or post-retirement life. As of 2018, Outplacement Services Program was provided to a total of 569
employees, improving the bank-wide human resource structure.
D. Asset impairment Losses
Woori Bank recognized impairment losses whenever the book value of securities in equity method decreased by over 30 percent against
their acquired values.
Category
Item
Loss amount
(Unit: KRW million)
Cause of loss
Securities in equity method
Saman Corp
242
decreased by over 30% against acquired values.
*Based on the separate standards of the bank
4. Liquidity, Sources & Applications of Fund
A. Liquidity
Category
LCR1) (Including KRW and all other currencies)
Foreign currency LCR2)
2018
185th term
103.40
108.98
2017
184th term
102.06
103.11
(Unit: %)
2016
183th term
109.52
-
1) The figures are calculated based on the average balance of management disclosure as of 4Q for the 185th term; based on the average balance of 4Q in 2018, 2017 and 2016.
(Average of the ratio per business day during the term. But the average balance of 4Q of 2016 is the average of the ratio as of the end of each month)
2) Foreign currency LCR was implemented from 2017, and the figures are calculated based on the average balance of 4Q for the 184th term and 185th term.
Woori Bank has managed liquidity levels in compliance with regulatory standards (85% in 2016, 90% in 2017, 95% in 2018, 100% since
2019) under the new liquidity index or LCR (Including KRW and all other currencies) introduced in 2015. The 4Q 2018 average balance
stood at 103.40 percent, over the regulatory standard (95%), with the ratio remaining stable.
Foreign currency LCR has been implemented since 2017, and Woori Bank has complied with the regulatory standards (the standards
are 60% for 2017, 70% for 2018, and 80% from 2019 onwards). To secure a stable structure in regards to managing foreign currency
LCR, we have worked to maintain a higher liquidity level of Foreign Currency LCR than the level required by regulatory standards (70%
in 2018), with an average of 108.98 percent in December 2018, by increasing the portion of deposits from our banking customers and
securing adequate high quality liquidity assets including U.S. Treasury bills, and etc.
Furthermore, we ensure that the liquidity gap ratio and concentration of funding more than satisfy regulatory guidelines in order to se-
cure a stable funding structure. We also check for excessive shortages of liquid assets through periodic stress testing. If liquidity is lack-
ing due to an unexpected crisis, we execute contingency funding plans and utilize committed lines from overseas financial institutions to
acquire liquidity. As such, we establish and manage bank-wide measures to preemptively mitigate and well manage liquidity risks.
101
Woori Bank annual report 2018We Believe in Your Potential B. Sources of Fund
(Unit: KRW million, %)
Item
Fund
2018
185th term
2017
184th term
2016
183th term
Average
balance
Interest
rate
%
Average
balance
Interest
rate
%
Average
balance
Interest
rate
%
Funds in KRW
Deposits, installments
197,572,001
1.41
66.67
187,332.008
1.26
66.02
183,440,285
1.38
65.35
Certificates of deposit
Borrowings in KRW
Call money in KRW
Others
Subtotal
5,039,885
6 ,554,881
221,027
20,937,173
1.97
1.47
1.50
2.39
1.70
2.21
0.07
7.07
4,500,100
6,213,903
1,254,623
20,168,307
1.66
1.32
1.23
2.29
1.59
2.19
0.44
7.11
3,466,223
6,709,080
1,159,188
18,532,241
1.70
1.45
1.32
2.60
1.23
2.39
0.41
6.60
230,324,967
1.51
77.73
219,468,941
1.37
77.34
213,307,017
1.50
75.98
Funds in foreign
currencies
Deposits in foreign currencies
15,219,710
6,458,485
0.88
2.13
5.14
2.18
14,338,927
7,267,096
0.51
1.38
5.05
2.56
14,838,684
8,595,575
0.47
0.86
5.29
3.06
Borrowings in foreign
currencies
Call money in foreign
currencies
Debentures in foreign
currencies
Others
Subtotal
Others
Total Equity
Provisions
Others
Subtotal
Total
787,171
1.84
0.27
980,001
1.14
0.35
1,401,294
0.70
0.50
3,669,625
3.96
1.24
3,649,805
3.11
1.29
3,950,614
2.54
1.41
658,810
26,793,801
20,897,275
433,092
17,876,203
39,206,571
0.38
1.62
-
-
-
-
0.22
9.04
7.05
0.15
6.03
574,786
26,810,615
20,134,843
351,750
16,993,430
13.23
37,480,023
0.14
1.12
-
-
-
-
0.20
9.45
7.10
0.12
5.99
531,877
0.29
0.19
29,318,044
0.87
10.44
19,617,484
412,553
18,070,427
-
-
-
-
6.99
0.15
6.44
13.57
13.21
38,100,463
296,325,338
1.32 100.00
283,759,580
1.16 100.00
280,725,524
1.23 100.00
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) Excluding merchant banking accounts
The average fund balance sourced by Woori Bank in 2018 stood at KRW 296 trillion, an increase of KRW 12 trillion over the previous year.
The average funds in Korean won totaled KRW 230 trillion, mainly sourced by deposits from customers for the stable management of li-
quidity. As a result, deposits increased by KRW 10 trillion over the previous year, mainly in core deposits and time deposits. We complied
with the guidelines by increasing the issuance of certificates of deposit by KRW 0.5 trillion given the increasingly rigorous LCR stand-
ards and increasing finance debentures issued in Korean won by KRW 0.8 trillion. In order to respond to the LCR minimum standard,
which was raised by 5%p, and changes in the regulations on the loan-to-deposit ratio, we plan to ensure stable management of liquidity
through preemptive funding and boost profitability through more robust management of funding and management of portfolios. The
average balance of funds in foreign currencies showed a similar trend with previous terms, but in funding, we have reduced financing
from the market (borrowings and debentures) and gradually increased deposits in foreign currencies to enhance stability.
102
Woori Bank annual report 2018We Believe in Your Potential Maturity of Major Financial Debts
(Unit: KRW million)
Category Financial liabilities
3 months or less
4 to 6 months
7 to 9 months
10 to 12 months
1 to 5 years
Over 5 years
Total
Financial liabilities at fair value through profit
and loss
191,825
0
0
0
0
0
191,825
Depository
Borrowings
Debentures
139,983,251
32,838,781
20,969,174
40,220,788
5,701,940
509,189
240,223,123
4,979,142
2,682,745
1,775,656
1,512,857
2,917,566
495,516
14,363,482
1,723,882
1,972,348
1,693,796
1,839,700
13,675,096
2,387,717
23,292,539
Other financial liabilities
14,057,046
0
0
0
0
2,182,602
16,239,648
Total
160,947,904
37,493,874
24,438,626
43,573,345
22,294,602
5,552,914
294,301,265
1) Derivative financial liabilities and off-balance accounts (payment guarantees and commitments) are excluded
C. Applications of Fund
Item
Applications
2018
185th term
2017
184th term
2016
183th term
Average
balance
Interest
rate
%
Average
balance
Interest
rate
%
Average
balance
Interest
rate
%
Funds in KRW
Deposits in KRW
3,264,104
1.52
1.10
3,424,567
1.28
1.21
3,171,599
1.34
1.13
Marketable securities in KRW
35,898,300
2.16
12.11
35,186,537
1.95
12.40
33,880,119
2.58
12.07
Loans in KRW
203,432,263
3.22
68.65
194,161,817
3.05
68.42
189,079,324
3.10
67.35
(Unit: KRW million, %)
15,856
1.95
0.01
26,639
3.14
0.01
51,254
0.89
0.02
Advance payments on
acceptances and guarantees
Call loans in KRW
Privately placed bonds
Credit card receivables
1,334,138
135,856
-
1.67
2.89
-
0.45
0.05
-
2,275,748
185,092
28
1.33
5.94
-
0.80
0.07
0.00
1.49
3,581,382
247,292
24
1.41
5.19
-
4,580,215
2.04
1.28
0.09
0.00
1.63
Others
5,562,417
2.10
1.88
4,235,478
1.99
Allowance for doubtful
accounts in KRW (-)
(1,197,910)
-
(0.40)
(1,284,188)
-
(0.45)
(1,925,177)
-
(0.69)
Subtotal
248,445,023
3.03
83.84
238,211,718
2.85
83.95
232,666,033
2.98
82.88
Funds in foreign
currencies
Deposits in foreign currencies
3,664,724
1.29
Marketable securities in foreign
currencies
3,467,435
1.30
Loans in foreign currencies
11,346,607
3.14
Call loans in foreign currencies
2,365,465
2.07
Bills bought in foreign
currencies
7,274,987
2.70
1.24
1.17
3.83
0.80
2.46
3,791,184
2,735,707
10,790,442
2,506,588
7,417,500
0.67
1.07
2.51
1.33
1.88
1.34
0.96
3.80
0.88
2.61
3,761,286
1,752,884
13,371,873
2,940,858
7,110,164
0.43
1.13
1.95
0.85
1.53
1.34
0.62
4.76
1.05
2.53
Others
32,665
3.31
0.01
48,472
2.50
0.02
13,829
9.72
0.00
Allowance for doubtful accounts in
foreign currencies (-)
(390,923)
-
(0.13)
( 332,301)
-
(0.12)
(312,211)
-
(0.11)
Others
Subtotal
Cash
Property, plant and equipment
for business
Others
Subtotal
27,760,961
2.50
1,228,818
2,353,944
16,536,592
20,119,354
-
-
-
-
9.37
0.41
0.79
5.58
6.79
26,957,590
1.85
1,201,343
2,352,466
15,036,463
18,590,272
-
-
-
-
9.50
0.42
0.83
5.30
6.55
28,638,685
1.51
10.20
1,169,566
2,325,893
15,925,347
19,420,807
-
-
-
-
0.42
0.83
5.67
6.92
Total
296,325,338
2.78
100.0
283,759,580
2.57
100.0
280,725,524
2.62
100.0
103
Woori Bank annual report 2018We Believe in Your Potential 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 2018 stood at KRW 248.4 trillion, an increase of KRW 10.2 trillion over the previous
year due to due to an increase of loans in Korean won by KRW 9.3 trillion. Out of all loans in Korean won, household loans increased by
KRW 4.5 trillion, while corporate loans increased by KRW 5 trillion. Since the Bank of Korea increased the base rate in November 2017,
the yields for loans in Korean won went up 17bp. Assets in foreign currency increased by KRW 0.8 trillion from the previous year to KRW
27.8 trillion, which is attributable to the increase of KRW 0.5 trillion and KRW 0.7 trillion in loans in foreign currency and securities, re-
spectively. Woori Bank will continuously strive to comply with the liquidity guidelines (for loan-to-deposit ratio, LCR, etc.) and ensure a
stable management structure.
5. Off-Balance Sheet Activities
Category
Payment guarantees
Commitments
Confirmed guarantees
Unconfirmed guarantees
CP purchase commitments and others
Loan agreements
Other agreements
(Unit: KRW million)
2018
185th term
2017
184th term
7,108,365
6,875,021
4,297,465
4,526,593
1,260,587
1,458,101
97,796,704
80,760,325
5,041,314
4,546,090
For off-balance sheet activities, please refer to ‘Note 44. Contingent Liabilities and Commitments’ in III. Matters on Financials / 3. Notes
for Consolidated Financial Statements and 5. Notes for Financial Statements in this report.
6. Other Issues Required for Making Investment Decisions
A. Matters on Key Accounting Policies and Changes in Estimates
Please refer to Business Report 2018 submitted to Financial Supervisory Service (dart.fss.or.kr) or U.S. Securities and Exchange Com-
mission (sec.gov) on 1 Apr. 2019. ‘Note 2. Standards applied in the preparation of Consolidated Financial Standards and Key Accounting
Policies’ and ‘Note 3. Key Accounting Estimates and Assumptions’ in [III. Matters on Finance / 3. Note on Consolidated Financial State-
ments and 5. Note on Financial Statements].
B. 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. There-
fore, the bank is neither currently paying nor is likely to have to pay any environmental restoration (“remediation”) or damage compen-
sation expenses in the future. It has not been and is not likely to be subject to administrative measures by the government or environ-
mental 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-Carbon, Green Growth. Accordingly, the Bank has reported to the government its greenhouse gas emissions
and energy consumption . Please refer to Business Report 2018 XI. Other Issues Required for Protecting Investors / 3. Environmental
Sanctions, and etc. / (vi) Green Management Issues.
104
Woori Bank annual report 2018We Believe in Your Potential (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 preemptively respond to expected mid- and long-term personnel shifts. While our continued recruitment and CDP control secure
experts in corporate business, our in-house training of human resources will help us become leaders in the global and fintech business-
es and build up the best human resource pool in the financial sector. Meanwhile, as of the end of 2018, our regular employees consist of
business unit and group heads (26%), managers (26%), and clerks or lower-level employees (47%), maintaining HR in a pyramid struc-
ture. To build a culture that pursues work-life-balance, we introduced in advance weekly 52 working-hour system in Oct. 2018.
C. Matters on Statutory Regulations
Woori Bank is subject to laws and regulations in maintaining soundness as a bank and performing social responsibilities because it con-
ducts financial arrangements and monetary and credit policies. Please refer to [I. Outline of the Company] in Business Report 2018 as
for the applicable laws for doing business. Other statutory regulations which Woori Bank is subject to are: Personal Information Protec-
tion Act, Registration of Bonds and Debentures Act, Special Act on Public Fund Management, Fair Trade Act, Act on Prohibition against
Financing of Terrorism, Act on Employee Retirement Benefits, Act on Real Name Financial Transactions and Guarantee of Secrecy, Act
on Improving Structure of the Financial Industry, Act on Establishment of the Financial Services Commission, etc., Act on Corporate
Governance of Financial Companies, Act on Promotion of Corporate Restructuring, Act on Confiscation of Proceeds of Crime, Insurance
Business Act, Real Estate Investment Company Act, Private Investment Act on Infrastructure, Income Tax Act, Corporate Tax Act, Act on
Promissory Notes, Telecommunications Business Act, Electronic Signature Act, Act on Issuance and Distribution of Electronic Promis-
sory Notes, Electronic Government Act, Act on the Protection of Information Communications Infrastructure, Act on Promotion of the
Information Communications Industry, Restriction of Special Taxation Act, Special Purpose Companies for Mortgage-Backed Bonds Act,
Basic Act on Small and Medium-sized Companies, Local Financial Act, Protection of Communications Secrets Act, Act on Reporting of
Special Financial Transactions and Korea Finance Housing Corporate Act and its relevant subordinate regulations, etc.
D. 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 fluctuations 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 managing our assets and liabilities. The trading balance of our derivatives transactions was
KRW 232,663 billion in 2016, KRW 267,430 billion in 2017, and KRW 324,071 billion in 2018.
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
(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.
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Woori Bank annual report 2018We Believe in Your Potential (B) Risk Management Organization
Board of Directors
CEO
Risk Management Group
Board Risk Management Committee
Executive Risk Management Committee
Risk Management Department
Credit Risk Management Department
Loan Review Department
Board Risk Management Committee
ㆍtop decision-making body for risk management
ㆍOrganization Members: three outside directors and one non-standing director
ㆍMajor items for resolution
- Establishment of the basic risk management strategy
- Credit line approval and capital allocation
ㆍMeeting cycle: Quarterly
Executive Risk Management Committee
ㆍOrganization Members: head of the business support unit (Chairman), six heads of business groups
ㆍMajor items for resolution
- Deliberation of risks regarding new products
- Decisions regarding the standard of bank’s internal interest rates
- Planning & forecasting the liquidity funding (liquidity management)
ㆍMeeting 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 profitability at the same time.
② Procedures
ㆍRisk recognition: We analyze various sources of risks possibly associated with the bank’s business activities
ㆍ 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.
ㆍRisk control: We control risks in our daily, monthly and quarterly reports to avert/mitigate risks or maintain risks at adequate levels.
ㆍ Risk monitoring & reports: We continuously monitor risk levels and define the channels, content, and cycles of reporting to respond to
risk situations properly.
2) Credit Risk
(A) Definition
Credit risk represents ‘the potential financial losses that can incur to the Bank when the counterparty becomes insolvent or rejects
transactions within the period provided in the contract.’ The goal of credit risk management is to maintain the bank’s credit risk exposure
to a permissible degree and to optimize its rate of return considering such credit risk.
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Woori Bank annual report 2018We Believe in Your Potential (B) Management Methods
We manage credit lines, aggregation, total exposure, and portfolios so that we can calculate and control adequate credit lines by aggre-
gation, company, and industry as we handle loans.
ㆍ Aggregation management: We aggregate the exposures of borrowers who share credit risks and put them under a single credit risk
aggregation management system to control the bank’s potential exposure to credit risks.
ㆍ Total exposure management: To prevent a concentration of loans, we calculate corporate value based on future cash flow and set the
ceilings per borrower within the borrower’s repayment capacity from operating revenues
3) Operational Risk
(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
unexpected 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 measurement 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
While Woori Bank applies an advanced method of measuring operational risk capital levels, its consolidated subsidiaries take a basic
indicator approach for measurement.
- Risk Self-Assessment (RSA): RSA refers to a series of risk management activities that allow self-identification and self-assessment of material opera-
tional 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 operational risk
management system. It also receives external loss data from SAS Global Data and the Korea Operational Risk Data Exchange Committee for scenario
analysis and risk identification.
- Scenario analysis: Operating risks characteristically lack 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 im-
pact 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 distribution ap-
proach 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 measuring 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.
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Woori Bank annual report 2018We Believe in Your Potential 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 fac-
tors, 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 mar-
ket 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 individ-
ual risks of market risk capital charge, while the internal model is for calculating the general market risks of capital charge and for man-
aging internal risks.
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 purposes, we control daily limits by measuring VaR at 99 percent confidence level per day. Model validation is carried out through
daily back-testing of the VaR measurement and actual profit/loss.
In addition to VaR, we perform monthly stress testing to measure the loss amount in the event of abnormal market situations, such as
IMF borrowings or a global financial crisis.
Market risk limits, including VaR limits, loss limits and risk capital limits, are managed by business groups, departments or teams, while
Board Risk Management Committee sets the risk type and unit annually. Limits for subordinate units, excluding the derivatives books,
are set by position-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 Executive 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 unex-
pected 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 matur-
ities 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 identify-
ing liquidity risk management indicators and status at related departments.
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Woori Bank annual report 2018We Believe in Your Potential 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 Committee on Banking Supervision (BCBS).
Actions in Response to Basel III
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 Bank annual report 2018We Believe in Your Potential INDEPENDENT
AUDITORS’ REPORT
Deloitte Anjin LLC
9F., One IFC,
10, Gukjegeumyung-ro,
Youngdeungpo-gu, Seoul
07326, Korea
english translation of a report Originally issued in korean on March 19, 2019
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 19, 2019
To the Shareholders and the Board of Directors of Woori Bank
Report on the Audited Consolidated Financial Statements
Our Opinion
We have audited the accompanying consolidated financial statements of Woori Bank and its subsidiaries
(the “Group”), which comprise the consolidated statement of financial position as of December 31, 2018
and December 31, 2017, respectively, and the consolidated statement of comprehensive income,
consolidated statement of changes in shareholders’ equity and consolidated statement of cash flows, for
the years then ended, and a summary of significant accounting policies and other explanatory
information.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Group as of December 31, 2018 and December 31, 2017, respectively, and its financial
performance and its cash flows for the years then ended in accordance with Korean International
Financial Reporting Standards (“K-IFRS”).
Basis for Audit Opinion
We conducted our audits in accordance with the Korean Standards on Auditing (“KSAs”). Our
responsibilities under those standards are further described in the Auditors Responsibilities for the Audit
of the Financial Statements section of our report. We are independent of the Group in accordance with
the ethical requirements, including those related to independence, that are relevant to our audit of the
consolidated financial statements in the Republic of Korea as required by prevailing audit regulations.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key Audit Matters
The key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our audit
opinion thereon, and we do not provide a separate opinion on these matters.
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Woori Bank annual report 2018We Believe in Your Potential
Allowance for credit loss in accordance with K-IFRS 1109 ‘Financial Instruments’
Key audit matter description
As a result of the adoption of K-IFRS 1109 in the current year, the Group estimates and records an
allowance for loans based on expected credit losses, as opposed to the previous method based on
incurred credit losses under K-IFRS 1039 as described in notes 2, 3, 4 and 10. In order to estimate
expected credit losses, the Group segregated its portfolio in retail, corporate and credit card loans. With
the exception of a portion of the corporate loan book comprised of individually significant loans
(amortized cost of KRW 875,791 million), the Group measures all portfolios (amortized cost of KRW
261,722,202 million) based on a collective assessment methodology. Both the collective and individual
impairment methodologies in the amounts of KRW 1,402,408 million and KRW 375,668 million,
respectively, must consider historical losses adjusted for forward looking information and include
multiple scenarios for macroeconomic factors. The allowance for certain loans is measured, at least in
part, based on the valuation of collaterals which must take into account an expectation of when and for
how much the collateral will be sold.
There was a significant amount of judgment required by management when determining the
appropriateness of the forward looking and macroeconomic information used in the calculation of the
expected losses in its loan portfolio.
Given the level of subjectivity and judgment, auditing the estimated allowance for loan losses involved
especially complex and subjective judgment.
How the scope of our audit responded to the key audit matter
Our audit procedures related to the assumptions and unobservable inputs used by management for the
estimate of impaired loans including the following:
• We tested the design and effectiveness of controls over the appropriateness of the cash-flows
estimated to be collected in individually significant loans, including the estimates of collateral
values.
• We tested the design and effectiveness of the controls over the appropriateness of the models used
to determine the calculation of the allowance for loan losses for collectively assessed loans and
most importantly the determination of the relevant model and assumptions to incorporate forward
looking and macro-economic information
• We used our credit specialists to assist us in challenging the reasonableness of the methodologies
and inputs used in the calculation of the allowance for loan losses for collectively assessed loans,
most importantly in determining the appropriateness of forward looking and macro-economic
scenarios used by management
• We reperformed the calculation of the collective allowance taking into account forward looking
and macroeconomic information determined to be appropriate in consultation with our credit
specialists.
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Woori Bank annual report 2018We Believe in Your Potential
• We selected samples of loans subject to individual assessments and performed the following:
Independently estimated future operating cash flows from borrowers with significant
loans outstanding to determine the available cash flows to repay the loans.
With assistance of our appraisal specialists, evaluated the reasonableness of cash flow
estimates based on the future sale of collateral.
Responsibilities of Management and the Audit Committee for the Financial Statements
Management is responsible for the preparation of the accompanying consolidated financial statements
in accordance with K-IFRS, and for such internal control as they determine is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due
to fraud or error.
In preparing the consolidated financial statements, management of the Group is responsible for assessing
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to liquidate
the Group or to cease operations, or has no realistic alternative but to do so.
The audit committee is responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with KSAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these consolidated financial statements.
As part of an audit in accordance with KSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.
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Woori Bank annual report 2018We Believe in Your Potential 113
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.• Conclude on the appropriateness of the management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.• Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We are solely responsible for our audit opinion.We communicate with the audit committee of the Group regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the audit committee of the Group with a statement that we have complied with relevant ethical requirements, including those related to independence, and to communicate with them all matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the audit committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter. March19, 2019 Notice to Readers This report is effective as of March 19, 2019 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 Bank annual report 2018We Believe in Your Potential WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
as OF DeCeMber 31, 2018 anD 2017
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2018 AND 2017
Cash and cash equivalents (Note 6)
Financial assets at fair value through profit or loss (“FVTPL”)
(K-IFRS 1109) (Notes 4, 7, 11, 12 and 26)
ASSETS
Financial assets at FVTPL (K-IFRS 1039) (Notes 4, 7, 11, 12, 18 and 26)
Financial assets at financial assets at fair value through other comprehensive
income(“FVTOCI”) (Notes 4, 8, 11, 12, and 18)
Available-for-sale (“AFS”) financial assets (Notes 4,8,11,12 and 18)
Securities at amortized cost (Notes 4, 9, 11, 12 and 18)
Held to maturity (“HTM”) financial assets (Notes 4, 9, 11, 12 and 18)
Loans and other financial assets at amortized cost (Notes 4, 10, 11, 12, 18 and 45)
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 distribution (sale) (Note 17)
Current tax assets (Note 42)
Deferred tax assets (Note 42)
Derivative assets (Designated for hedging) (Notes 4,11,12 and 26)
Other assets (Notes 19 and 45)
Total assets
LIABILITIES
Financial liabilities at FVTPL (K-IFRS 1109) (Notes 4, 11, 12, 20 and 26)
Financial liabilities at FVTPL (K-IFRS 1039) (Notes 4, 11, 12, 20 and 26)
Deposits due to customers (Notes 4,11,21 and 45)
Borrowings (Notes 4, 11, 12 and 22)
Debentures (Notes 4, 11 and 22)
Provisions (Notes 23, 44 and 45)
Net defined benefit liability (Note 24)
Liabilities of a disposal group classified as held for distribution (Note 17)
Current tax liabilities (Note 42)
Deferred tax liabilities (Note 42)
Derivative liabilities (Designated for hedging) (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,
2018 (*)
December 31,
2017 (*)
(Korean Won in millions)
6,712,623
6,908,286
6,126,183
-
18,063,423
-
22,932,559
-
282,448,315
-
361,427
378,069
2,441,141
587,255
93,502
20,488
49,863
35,503
196,832
340,447,183
2,282,686
-
248,690,939
16,202,986
28,725,862
389,862
138,682
72,660
156,559
18,156
51,408
21,426,064
338,275
318,494,139
-
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
-
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
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Woori Bank annual report 2018We Believe in Your Potential
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
as OF DeCeMber 31, 2018 anD 2017 (COntinueD)
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2018 AND 2017 (CONTINUED)
EQUITY
Owners’ equity:
Capital stock (Note 28)
Hybrid securities (Note 29)
Capital surplus (Note 28)
Other equity (Note 30)
Retained earnings and other reserves (Notes 31 and 32)
(Regulatory reserve for credit loss as of December 31, 2018 and 2017 is
2,578,457 million Won and 2,438,191 million Won, respectively
Regulatory reserve for credit loss to be reversed (reserved) as of December
31, 2018 and 2017 is 222,211 million Won and (-)140,266 million Won,
respectively
Planned provision reversed(reserved) of regulatory reserve for credit loss as
of December 31, 2018 and 2017 is 222,211 million Won and (-)140,266
million Won, respectively
Non-controlling interests
Total equity
Total liabilities and equity
December 31,
2018 (*)
December 31,
2017 (*)
(Korean Won in millions)
21,739,931
3,381,392
3,161,963
285,889
(2,213,970)
20,365,892
3,381,392
3,017,888
285,880
(1,939,274)
17,124,657
213,113
21,953,044
340,447,183
15,620,006
199,008
20,564,900
316,295,461
(*) The consolidated statements of financial position as of December 31, 2018 was prepared in accordance with
K-IFRS 1109; however, the comparative consolidated statements of financial position as of December 31, 2017
was not retrospectively restated in accordance with K-IFRS 1109.
See accompanying notes
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Woori Bank annual report 2018We Believe in Your Potential
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOr the years enDeD DeCeMber 31, 2018 anD 2017
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
2018(*)
2017(*)
(Korean Won in millions,
except for per share data)
Interest income
Financial assets at FVTPL (K-IFRS 1109)
Financial assets at FVTOCI
Financial assets at amortized cost
Financial assets at FVTPL (K-IFRS 1039)
AFS financial assets
HTM financial assets
Loans and receivables
Interest expense
Net interest income (Notes 11, 34 and 45)
Fees and commissions income
Fees and commissions expense
Net fees and commissions income (Notes 11, 35 and 45)
Dividend income (Notes 36 and 45)
Net gain on financial instruments at FVTPL
(K-IFRS 1109) (Notes 11, 37 and 45)
Net loss on financial instruments at FVTPL
(K-IFRS 1039) (Notes 11, 37 and 45)
Net gain on financial assets at FVTOCI (Notes 11 and 38)
Net gain on AFS financial assets (Notes 11 and 38)
Net gain on disposals of financial assets at amortized cost
(Note 11)
Net gain on disposals of securities at amortized cost
Net gain on disposals of loans and other financial assets at
amortized cost
Impairment losses due to credit loss
(Notes 11, 39 and 45)
General and administrative expenses
(Notes 40 and 45)
Other net operating expenses
(Notes 40 and 45)
Operating income
Share of gain(loss) on subsidiaries and associates (Note 13)
Net other non-operating income(expense)
Non-operating income(expense) (Note 41)
9,684,499
54,243
280,371
9,349,885
-
-
-
-
(4,033,548)
5,650,951
1,680,764
(610,790)
1,069,974
90,552
214,443
-
2,047
-
79,532
431
79,101
8,550,687
-
-
-
53,348
239,030
307,965
7,950,344
(3,330,037)
5,220,650
2,069,198
(998,732)
1,070,466
124,992
-
(104,827)
-
192,708
-
-
-
(329,574)
(785,133)
(3,624,033)
(3,530,801)
(394,591)
2,759,301
3,019
42,552
45,571
(31,313)
2,156,742
(101,514)
(105,722)
(207,236)
Net income before income tax expense
2,804,872
1,949,506
Income tax expense (Note 42)
(753,223)
(419,418)
(Continued)
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Woori Bank annual report 2018We Believe in Your Potential
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOr years enDeD DeCeMber 31, 2018 anD 2017 (COntinueD)
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR YEARS ENDED DECEMBER 31, 2018 AND 2017 (CONTINUED)
Net income
(Net income after the provision for regulatory reserve for
credit loss for the years ended December 31, 2018 and 2017,
is 2,010,774 million won and 1,389,822 million won,
respectively) (Note 32)
Net loss on valuation of equity securities at FVTOCI
Net gain on valuation of financial liabilities designated as at
FVTPL due to own credit risk
Items out of share of other comprehensive gain of joint
ventures and associates that will not be reclassified to profit
or loss
Remeasurement gain (loss) related to defined benefit plan
Other comprehensive income related to assets held for
distribution
Items that will not be reclassified to profit or loss
Net gain on valuation of debt securities at FVTOCI
Net loss on valuation of AFS financial assets
Share of other comprehensive gain of joint ventures and
associates
Net loss on foreign currency translation of foreign operations
Net gain (loss) on valuation of cash flow hedge
Other comprehensive income related to assets held for sale
Items that may be reclassified to profit or loss
2018(*)
2017(*)
(Korean Won in millions,
except for per share data)
2,051,649
(30,855)
100
-
(71,432)
(13,197)
(115,384)
33,360
-
2,958
(4,379)
(4,646)
(4,145)
23,148
1,530,088
-
-
(2,993)
10,497
-
7,504
-
(84,498)
3,605
(208,329)
777
4,145
(284,300)
Other comprehensive loss, net of tax
(92,236)
(276,796)
Total comprehensive income
1,959,413
1,253,292
Net income attributable to:
Net income attributable to shareholders
Net income attributable to non-controlling interests
Total comprehensive income attributable to:
Comprehensive income attributable to shareholders
Comprehensive income attributable to
non-controlling interests
Net income per share (Note 43)
2,033,182
18,467
1,512,148
17,940
1,943,885
1,249,057
15,528
4,235
Basic and diluted earnings per share (In Korean Won)
2,796
1,999
(*) The consolidated statements of comprehensive income for the year ended December 31, 2018 was prepared in
accordance with K-IFRS 1109; however, the comparative consolidated statements of comprehensive income for the
year ended December 31, 2017 was not retrospectively restated in accordance with K-IFRS 1109.
See accompanying notes
117
Woori Bank annual report 2018We Believe in Your Potential
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOr years enDeD DeCeMber 31, 2018 anD 2017
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR YEARS ENDED DECEMBER 31, 2018 AND 2017
January 1, 2017
Net income
Dividends to common stocks
Capital increase of subsidiaries
Net gain (loss) on valuation of available-
for-sale financial assets
Changes in equity of joint ventures and
associates
Loss on foreign currency translation of
foreign operations
Gain on valuation of cash flow hedge
Remeasurement gain (loss) related to
defined benefit plan
Other comprehensive income related to
assets held for sale
Dividends to hybrid securities
Issuance of hybrid securities
Redemption of hybrid securities
December 31, 2017 (*)
January 1, 2018
Cumulative effect of change in accounting
policy (Note 2)
Adjusted balance, beginning of period
Net income
Dividends to common stocks
Capital decrease of subsidiaries
Net gain on valuation of financial liabilities
designated as at FVTPL due to own
credit risk
Changes in other comprehensive income
due to redemption of financial liabilities
designated as at FVTPL
Net gain (loss) on valuation of financial
assets at FVTOCI
Changes in other comprehensive income
due to disposal of equity securities at
FVTOCI
Share of other comprehensive gain of joint
ventures and associates
Loss on foreign currency translation of
foreign operations
Loss on valuation of cash flow hedge
Remeasurement loss related to defined
benefit plan
Other comprehensive income related to
assets held for distribution (sale)
Dividends to hybrid securities
Issuance of hybrid securities
Redemption of hybrid securities
Appropriation of retained earnings
December 31, 2018 (*)
Capital
Stock
Hybrid
securities
Capital
surplus
Retained
earnings and
other reserves
(Korean Won in millions)
Other
equity
Owners’
equity
Non-
controlling
interests
Total
equity
3,381,392
-
-
-
3,574,896
-
-
-
286,331 (1,468,025)
-
-
-
-
-
(451)
14,611,566 20,386,160
1,512,148
(336,636)
-
1,512,148
(336,636)
(451)
159,793
17,940
(1,554)
36,534
20,545,953
1,530,088
(338,190)
36,083
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(85,051)
612
(194,347)
777
10,773
-
-
-
-
-
(85,051)
553
(84,498)
612
-
612
(194,347)
777
(13,982)
-
(208,329)
777
10,773
(276)
10,497
-
-
-
-
3,381,392
-
-
559,565
(1,116,573)
3,017,888
-
-
-
-
4,145
-
-
(208,158)
285,880 (1,939,274)
-
(167,072)
-
-
4,145
(167,072)
559,565
(1,324,731)
15,620,006 20,365,892
-
-
-
-
199,008
4,145
(167,072)
559,565
(1,324,731)
20,564,900
3,381,392
3,017,888
285,880 (1,939,274)
15,620,006 20,365,892
199,008
20,564,900
-
3,381,392
-
-
-
-
3,017,888
-
-
-
-
(392,176)
285,880 (2,331,450)
-
-
-
-
-
9
177,091
(215,085)
15,797,097 20,150,807
2,033,182
(336,636)
9
2,033,182
(336,636)
-
723
199,731
18,467
(2,128)
(18)
(214,362)
20,350,538
2,051,649
(338,764)
(9)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100
(4)
2,733
-
4
-
100
-
-
-
100
-
2,733
(228)
2,505
(1,009)
1,009
-
2,958
(10,647)
(7,689)
-
-
(1,929)
(4,646)
(71,171)
-
-
-
(1,929)
(4,646)
(2,450)
-
(71,171)
(261)
(71,432)
-
(7,689)
(4,379)
(4,646)
-
-
-
-
-
3,381,392
-
-
398,707
(254,632)
-
3,161,963
-
-
-
-
-
(17,342)
-
-
(368)
208,158
285,889 (2,213,970)
-
(151,194)
-
-
(208,158)
(17,342)
(151,194)
398,707
(255,000)
-
17,124,657 21,739,931
-
-
-
-
-
213,113
(17,342)
(151,194)
398,707
(255,000)
-
21,953,044
(*) The consolidated statements of changes in equity for the year ended December 31, 2018 was prepared in
accordance with K-IFRS 1109; however, the comparative consolidated statements of changes in equity for the year
ended December 31, 2017 was not retrospectively restated in accordance with K-IFRS 1109.
See accompanying notes
118
Woori Bank annual report 2018We Believe in Your Potential WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOr the years enDeD DeCeMber 31, 2018 anD 2017
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
2018 (*)
2017 (*)
(Korean Won in millions)
2,051,649
1,530,088
753,223
(9,684,499)
4,033,548
(90,552)
(4,988,280)
329,574
-
1,053
22,772
2,931
36,483
17,299
28,350
142,712
272,550
1,160
87
854,971
215,711
1,597
3,100
-
431
25,791
50,511
35,810
42,797
2,014
30,278
761
408,801
670,872
-
(15,754,102)
-
32,328
13,995,747
(11,920)
(135,313)
7,411,753
89,399
6,298,764
9,617,307
(3,847,411)
90,651
(544,058)
5,316,489
9,124,792
419,418
(8,550,687)
3,330,037
(124,992)
(4,926,224)
785,133
15,267
-
185,020
38,713
109,569
-
107,028
142,902
235,795
9,994
390
1,629,811
-
-
-
192,708
-
83,506
39,932
122
53,532
2,567
5,028
666
378,061
-
(583,068)
-
(9,647,563)
35,953
13,634,873
(122,711)
(46,789)
(7,966,786)
(27,550)
(4,723,641)
8,570,715
(3,404,608)
127,343
(404,428)
4,889,022
(1,979,005)
Cash flows from operating activities:
Net income
Adjustments 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 FVTPL
Loss on financial assets at FVTOCI
Share of losses of investments in joint ventures and associates
Loss on disposal of investments in joint ventures and associates
Loss on transaction and valuation of derivatives (Designated for hedging)
Loss on hedged items (fair value hedge)
Loss on provision
Retirement benefits
Depreciation and amortization
Loss on disposal of premises and equipment, intangible assets and other assets
Impairment loss on premises and equipment, intangible assets and other assets
Deductions of income not involving cash inflows:
Gain on valuation of financial assets at FVTPL (K-IFRS 1109)
Gain on redemption of debentures
Gain on financial assets at FVTOCI
Gain on AFS financial assets
Gain on disposal of securities at amortized cost
Share of gains of investments in joint ventures and associates
Gain on disposal of investments in joint ventures and associates
Gain on transaction and valuation of derivatives (Designated for hedging)
Gain on hedged items (fair value hedge)
Reversal on provisions
Gain on disposal of premises and equipment, intangible assets and other assets
Reversal of impairment loss on premises and equipment, intangible assets and other
assets
Changes in operating assets and liabilities:
Financial assets at FVTPL (K-IFRS 1109)
Financial instruments at FVTPL (K-IFRS 1039)
Loans and other financial assets at amortized cost
Loans and receivables
Other assets
Deposits due to customers
Provisions
Net defined benefit liability
Other financial liabilities
Other liabilities
Cash received from operating activities:
Interest income received
Interest expense paid
Dividends received
Income tax paid
Net cash provided by(used in) operating activities
(Continued)
119
Woori Bank annual report 2018We Believe in Your Potential
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOr the years enDeD DeCeMber 31, 2018 anD 2017 (COntinueD)
WOORI BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (CONTINUED)
2018 (*)
2017 (*)
(Korean Won in millions)
Cash flows from investing activities:
Cash in-flows from investing activities:
Disposal of financial assets at FVTPL (K-IFRS 1109)
Disposal of financial assets at FVTOCI
Disposal of AFS financial assets
Redemption of securities at amortized cost
Redemption of HTM 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 distribution (sale)
Cash out-flows from investing activities:
Net cash in-flows of business combination
Acquisition of financial assets at FVTPL (K-IFRS 1109)
Acquisition of financial assets at FVTOCI
Acquisition of AFS financial assets
Acquisition of securities at amortized cost
Acquisition of HTM 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 designated for hedging
Net cash provided by(used in) investing activities
Cash flows from financing activities:
Cash in-flows from financing activities:
Increase in borrowings
Issuance of debentures
Issuance of hybrid securities
Capital increase of subsidiaries
Cash out-flows from financing activities:
Repayment of borrowings
Repayment of debentures
Payment of dividends to common stocks
Dividends paid on hybrid securities
Redemption of hybrid securities
Dividends paid on non-controlling interests
Net cash provided by(used in) financing activities
11,919,335
9,146,307
-
9,426,757
-
51,435
-
3,512
5,545
9,199
80,347
30,642,437
134,967
12,322,160
13,275,429
-
15,622,847
-
48,272
15,195
118,668
176,067
-
41,713,605
(11,071,168))
9,606,126
21,505,849
398,707
-
31,510,682
8,349,005
20,903,518
336,636
147,625
255,000
2,128
29,993,912
1,516,770
-
-
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)
Net decrease in cash and cash equivalents
(429,606)
(156,393)
Cash and cash equivalents, beginning of the period
6,908,286
7,591,324
Effects of exchange rate changes on cash and cash equivalents
233,943
(526,645)
Cash and cash equivalents, end of the period (Note 6)
6,712,623
6,908,286
(*) The consolidated statements of cash flows for the year ended December 31, 2018 was prepared in accordance
with K-IFRS 1109; however, the comparative consolidated statements of cash flows for the year ended
December 31, 2017 was not retrospectively restated to apply K-IFRS 1109.
See accompanying notes
120
Woori Bank annual report 2018We Believe in Your Potential
WOORI BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
as OF anD FOr the years enDeD DeCeMber 31, 2018 anD 2017
WOORI BANK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
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 (hereinafter
referred to as the “Capital Market Act”)..
Previously, Woori Finance Holdings Co., Ltd. (established on March 27, 2001 in accordance with Financial
Holding Companies Act), the former holding company of Woori Financial Group, 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, was reduced to
nil in accordance with capital reduction procedure, and then, in accordance with the merger ratio, the Bank
newly issued 676 million shares. As a result, the paid-in capital of the Bank as of December 31, 2018 is capital
stock amounting to 3,381,392 million Korean Won. Meanwhile, 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 a result, KDIC holds 125 million shares (18.43% ownership interest) of the Bank as of
December 31, 2018 and 2017, and is the majority shareholder of the Bank.
On June 24, 2002, Woori Finance Holdings Co., Ltd. listed its common stock on the Korea Exchange through
public offering. In addition, on September 29, 2003, Woori Finance Holdings Co., Ltd. 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 headquarters of the Bank is located at 51, Sogong-ro, Jung-gu, Seoul, Korea. The Bank has 877 branches
and offices in Korea, and 23 branches and offices overseas as of December 31, 2018.
121
Woori Bank annual report 2018We Believe in Your Potential
- 2 -
(2) The consolidated financial statements for Woori Bank and its subsidiaries (the “Group”) include the
following subsidiaries:
Subsidiaries
Main business
Percentage of ownership
(%)
December
31, 2018
December
31, 2017
Location
Financial
statements
as of
(2018)
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.
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
WB Finance Co., Ltd.(*5)
Woori Bank Europe(*5)
Kumho Trust First Co., Ltd. (*1)
Asiana Saigon Inc. (*1)
Consus Eighth Co., LLC (*4)
KAMCO Value Recreation First
Securitization Specialty Co., Ltd. (*1)
Hermes STX Co., Ltd. (*1)
BWL First Co., LLC (*1)
Deogi Dream Fourth Co., Ltd. (*1)
Jeonju Iwon Ltd. (*1)
Wonju I one Inc. (*1)
Heitz Third Co., Ltd. (*1)
Woorihansoop 1st Co., Ltd. (*1)
Electric Cable First Co., Ltd. (*1)
Woori International First Co., Ltd. (*1)
Woori HJ First Co., Ltd. (*4)
Woori WEBST 1st Co., Ltd. (*1)
Wibihansoop 1st Co., Ltd. (*1)
HNLD 1st Inc. (*4)
Uri QS 1st Co., Ltd. (*1)
Uri Display 1st Co., Ltd.(*1)
Tiger Eyes 2nd Co., Ltd.(*1)
Woori Serveone 1st Co., Ltd. (*1)
Uri Display 2nd Co.,Ltd. (*1)
Woori the Colony Unjung Securitization
Specialty Co., Ltd. (*1)
Woori Dream 1st Co., Ltd. (*1)
Woori Dream 2nd Co., Ltd. (*1)
Woori H 1st Co., Ltd.(*1)
Woori HS 1st Co., Ltd. (*1)
Woori HS 2nd Co., Ltd.(*1)
Woori Sinnonhyeon 1st Inc. (*1)
Woori K 1st Co.,Ltd. (*1)
Uri S 1st Co.,Ltd. (*1)
Smart Casting Inc. (*1)
100.0
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
100.0
100.0
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
0.0
0.0
0.0
0.0
0.0
0.0
System software development
& maintenance
Finance
Other service business
Finance
Other credit finance business
Credit information
Finance
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
Asset securitization
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
122
100.0
Korea
December 31
100.0
Korea
December 31
Korea
Korea
Korea
Korea
U.S.A.
December 31
100.0
December 31
100.0
December 31
59.8
December 31
100.0
100.0
December 31
100.0 Hong Kong December 31
December 31
100.0
December 31
100.0
China
Russia
Brazil
Korea
Korea
Indonesia December 31
79.9
December 31
100.0
December 31
99.9
December 31
100.0
100.0 Cambodia December 31
100.0 Myanmar December 31
51.0 Philippines December 31
Vietnam
December 31
Cambodia December 31
Germany December 31
December 31
December 31
-
100.0
-
-
0.0
0.0
0.0
Korea
Korea
Korea
15.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
-
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
-
-
-
-
-
-
-
-
-
-
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
-
December 31
December 31
-
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
December 31
Woori Bank annual report 2018We Believe in Your Potential - 3 -
Main business
Securities investment and
others
〃
Percentage of ownership
(%)
December
31, 2018
December
31, 2017
Location
Financial
statements
as of
(2018)
100.0
100.0
Korea
December 31
〃
〃
〃
Trust
〃
Asset securitization
〃
〃
〃
〃
〃
98.5
98.0
97.3
75.0
0.0
0.0
5.0
5.0
5.0
5.0
5.0
5.0
-
Korea
December 31
98.0
Korea
December 31
-
England
December 31
75.0
0.0
Korea
Korea
December 31
December 31
0.0
Korea
December 31
5.0
5.0
-
5.0
5.0
-
Korea
December 31
Korea
December 31
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
0.5
0.5
0.5
-
Korea
December 31
Korea
December 31
Korea
December 31
Subsidiaries
G5 Pro Short-term Bond Investment Fund
13 (*2)
Heungkuk Global Private Placement
Investment Trust No. 1 (*2)
HeungkukWoori Tech Company Private
Placement Investment Trust No. 1 (*2)
AI Partners Water Supply Private
Placement Investment Trust No.2 (*2)
Consus Sakhalin Real Estate Investment
Trust 1st(*2)
Principle Guaranteed Trust (*3)
Principle and Interest Guaranteed Trust
(*3)
Woori Investment Bank:
Dongwoo First Securitization Specialty
Co., Ltd. (*1)
Seari First Securitization Specialty Co.,
Ltd. (*1)
Seari Second Securitization Specialty
Co., Ltd. (*1)
Namjong 1st Securitization Specialty Co.,
Ltd. (*1)
Bukgeum First Securitization Specialty
Co., Ltd. (*1)
Bukgeum Second Securitization Specialty
Co., Ltd. (*1)
Woori Card Co., Ltd.:
TUTU Finance-WCI Myanmar Co., Ltd.
Woori Card one of 2017-1 Securitization
Specialty Co., Ltd. (*1)
Woori Card one of 2017-2 Securitization
Specialty Co., Ltd. (*1)
Woori Card one of 2018-1 Securitization
Specialty Co., Ltd. (*1)
(*1) The entity is a structured entity for the purpose of asset securitization and is in scope for consolidation. Although the
Group is not a majority shareholder, the Group 1) has the power over the investee, 2) is exposed to 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.
(*2) The entity is a structured entity for the purpose of investment in securities and is in scope for consolidation.
Although the Group is not a majority shareholder, the Group 1) has the power over the investee, 2) is exposed to or
has rights to variable returns from its involvement with the investee, and 3) has the ability to use its power to affect
its returns.
(*3) The entity is a ‘money trust’ under the Financial Investment Services and Capital Markets Act and is in scope for
consolidation. Although the Group is not a majority shareholder, the Group 1) has the power over the investee, 2) is
exposed to or has rights to variable returns from its involvement with the investee, and 3) has the ability to use its
power to affect its returns.
(*4) The entity was removed from the list of subsidiaries as the control over the entity was lost during the current period.
(*5) The entity was included in the list of subsidiaries as the Bank acquired more than 50% of the ownership interest.
123
Woori Bank annual report 2018We Believe in Your Potential - 4 -
(3) The Group has not consolidated the following entities as of December 31, 2018 and 2017 despite having
more than 50% ownership interest:
As of December 31, 2018
Golden Bridge NHN Online Private Equity Investment (*)
Mirae Asset Seobu Underground Expressway Professional Investment
Subsidiaries
(*)
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 Europe Private Placement Real Estate Fund No. 163-2 (*)
IGIS Global Private Placement Real Estate Fund No. 148-1 (*)
IGIS Global Private Placement Real Estate Fund No. 148-2 (*)
KB Nongso Sewage Treatment Equipment Private Special Asset (*)
Mirae Asset Seoul Ring Expressway Private Special Asset Fund No. 1
(*)
Hangkang Sewage Treatment Plant Fund (*)
Consus KyungJu Green Private Placement Real Estate Fund No. 1 (*)
Location
Korea
Korea
Main
Business
Securities Investment
Securities Investment
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Securities Investment
Securities Investment
Securities Investment
Securities Investment
Securities Investment
Securities Investment
Securities Investment
Securities Investment
Securities Investment
Securities Investment
Percentage of
ownership (%)
60.0
65.8
59.7
88.9
89.6
97.9
75.0
75.0
50.0
66.2
55.6
52.4
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
(*) Since the investee is a private equity investment fund, the Group does not have the power over the fund’s activities
even though it holds more than 50% of ownership interest.
(4) The summarized financial information of the major subsidiaries are as follows. The financial information of
each subsidiary was prepared on the basis of consolidated financial statements. (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
WB Finance Co., Ltd.
Assets
96,260
38,820
3,891
9,987,057
2,682,660
34,921
2,182,454
517,627
5,470,927
305,521
2,355,975
179,130
777,437
14,448
93,239
19,340
218,134
954,580
268,794
As of and for the year ended December 31, 2018
Liabilities
Operating
revenue
Net income
(loss)
attributable to
owners
Comprehensive
income (loss)
attributable to
owners
63,412
271,651
2,840
269
1,439
560
8,305,093
2,367,418
6,386
1,878,117
396,216
4,953,813
256,260
1,853,768
149,146
299
1,440
71,133
6,886
184,344
720,554
225,655
1,713
4,708
1,371,301
205,446
36,883
90,975
18,748
366,973
19,433
192,719
13,971
29,760
10,052
11,038
4,496
13,668
48,716
24,310
(2,794)
7
114,767
25,552
1,657
20,510
5,144
21,879
5,163
40,385
1,262
26,057
1,597
2,826
640
80
10,710
2,421
(2,843)
(109)
106,517
25,533
1,411
32,335
9,647
19,194
(3,234)
27,109
(2,326)
26,057
1,597
3,676
(1,256)
(451)
13,618
2,329
124
Woori Bank annual report 2018We Believe in Your Potential - 5 -
As of and for the year ended December 31, 2018
(5,974)
259
(5,681)
(3,009)
Net income
(loss)
attributable to
owners
Comprehensive
income (loss)
attributable to
owners
Assets
58,399
1,582,765
Liabilities
311
1,552,594
1,369,745
1,786,869
Operating
revenue
5
54,860
53,578
(5,959)
259
4,990
63,676
142
1,826
(1,299)
As of and for the year ended December 31, 2017
Assets
103,932
Liabilities
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
867,583
1,275,719
22,730
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
1,179
(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
(2,800)
34,939
76
377
(475)
(38,592)
Woori Bank Europe
Money trust under the FISCM Act
Structured entity for the securitization of
financial assets
Structured entity for the investments in
securities
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
(5) The financial support that the Group provides to consolidated structured entities is as follows:
- Structured entity for asset securitization
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 solely principal to some of its trust
products. Due to the financial guarantees, the Group may be obliged 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.
125
Woori Bank annual report 2018We Believe in Your Potential - 6 -
(6) The Group has entered into various agreements with structured entities such as asset securitization,
structured finance, investment fund, and monetary trust. The characteristics and the nature of risks related
to unconsolidated structured entities over which the Group does not have control in accordance with K-
IFRS 1110 are as follows:
The ownership interests on unconsolidated structured entities that the Group hold are classified into asset
securitization vehicles, structured finance and investment fund, based on the nature and the purpose of the
structured entities.
Unconsolidated structured entities classified as ‘asset securitization vehicles’ are entities that issue asset-
backed securities, pay the principal and interest or distributes dividends on asset-backed securities through
borrowings or profits from the management, operation and sale of securitized assets. The Group transfers
related risks from the purchase commitments of asset-backed securities or issuance of asset-backed
securities through credit grants, and the structured entities recognize related interest or fee revenue. There
are entities that provide additional fund and conditional debt acquisition commitment before the Group’s
financial support, but the Group is still exposed to losses arising from the purchase of financial assets
issued by the structured entities when it fails to renew the securities.
Unconsolidated structured entities classified as ‘structured financing’ include real estate project financing
investment vehicle, social overhead capital companies, and special purpose vehicles for ship (aircraft)
financing. Each entity is incorporated as a separate company with a limited purpose in order to efficiently
pursue business goals. ‘Structured financing’ is a financing method for large-scale risky business, with
investments made based on feasibility of the specific business or project, instead of credit of business
owner or physical collaterals. The investors receive profits from the operation of the business. The Group
recognizes interest revenue, valuation gain or loss on ownership interest, or dividend income. With regard
to uncertainties involving structured financing, there are entities that provide financial support such as
additional fund, guarantees and prioritized credit grants prior to the Group’s intervention, but the Group is
exposed to possible losses due to loss of principal from reduction in investment value or irrecoverable loans
arising from failure to collect scheduled cash flows and cessation of projects.
Unconsolidated structured entities classified as ‘investment funds’ include investment trusts and private
equity funds. An investment trust orders the investment and operation of funds to the trust manager in
accordance with trust contract with profits distributed to the investors. Private equity funds finances money
required to acquire equity securities to enable direction of management and/or improvement of ownership
structure, with profit distributed to the investors. The Group recognizes pro rata amount of valuation gain or
loss on investment and dividend income as an investor, and may be exposed to losses due to reduction in
investment value.
126
Woori Bank annual report 2018We Believe in Your Potential - 7 -
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, 2018 and 2017 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
Financial assets at FVTPL
Financial assets at FVTOCI
Financial assets at amortized cost
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
Financial assets held for trading
AFS financial assets
HTM financial assets
Loans and receivables
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
December 31, 2018
Asset
securitization
vehicle
6,796,235
Structured
finance
58,161,494
Investment
Funds
11,138,822
2,571,835
285,156
281,919
2,003,921
-
839
1,260
116
1,144
3,252,329
2,571,835
680,494
5,764
2,831,842
70,219
48,961
2,511,055
197,393
4,214
905
248
657
3,408,271
2,831,842
576,429
11,609
1,530,767
1,197,844
-
71,150
261,773
-
-
-
-
1,587,325
1,530,767
56,558
13,868
December 31, 2017
Asset
securitization
vehicle
7,295,601
Structured
finance
40,172,830
Investment
Funds
13,641,135
3,215,159
-
902,390
2,269,451
43,180
-
138
1,433
575
858
4,032,531
3,215,159
817,372
837
2,314,043
233,428
106,819
-
1,969,760
-
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
127
Woori Bank annual report 2018We Believe in Your Potential - 8 -
(7) As of December 31, 2018 and 2017, the share of non-controlling interests on the net income and equity
of subsidiaries in which non-controlling interests are significant 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, 2018
December 31, 2017
130,088
68,250
16,557
191,111
64,877
16,778
2) Net income or loss attributable to non-controlling interests
Woori Investment Bank
PT Bank Woori Saudara Indonesia 1906 Tbk
Wealth Development Bank
3) Dividends to non-controlling interests
For the year ended
December 31, 2018
For the year ended
December 31, 2017
10,262
8,126
39
8,370
8,882
648
PT Bank Woori Saudara Indonesia 1906 Tbk
2,082
1,513
For the year ended
December 31, 2018
For the year ended
December 31, 2017
2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
(1) Basis of presentation
The Woori Bank and its subsidiaries (the “Group”)’s consolidated financial statements are prepared in
accordance with Korean Financial Reporting Standards (“K-IFRS”)
The significant accounting policies applied in the preparation of consolidated financial statements as of and for
the year ended December 31, 2018 are stated below, and the accounting policies applied are identical to ones
used in the preparation of previous period’s consolidated financial statements, except for the effects of adopting
new standards or interpretations as explained below.
The consolidated financial statements are prepared at the end of each reporting period in historical cost basis,
except for certain non-current assets and financial assets that are either revalued or measured in fair value.
Historical cost is generally measured at the fair value of consideration given to acquire assets.
The consolidated financial statements of the Group was approved by the Board of Directors on March 6, 2019,
and is planned for an approval in the annual shareholders’ meeting on March 27, 2019.
1) The standards and interpretations that are newly adopted by the Group during the current period, and the
changes in accounting policies thereof are as follows:
Adoption of K-IFRS 1109 – Financial instruments (enacted)
-
The Group initially applied K-IFRS 1109 and related amendments made to other standards during the current
period, with January 1, 2018 as the date of initial application. K-IFRS 1109 introduces new rules on: 1)
classification and measurement of financial assets and financial liabilities, 2) impairment of financial assets,
and 3) hedge accounting. Additionally, the Group adopted consequential amendments to K-IFRS 1107
Financial Instruments: Disclosures that were applied to the disclosures for 2018.
The Group decided not to restate the prior period figures when applying the Standard for the first time, and as
such the comparative consolidated financial statements are not restated.
128
Woori Bank annual report 2018We Believe in Your Potential
- 9 -
The main contents of the new accounting standard and the effect on the consolidated financial statements of
the Group are as follows.
a) Classification and measurement of financial assets
All financial assets included in the scope of K-IFRS 1109 are subsequently measured at amortized cost or fair
value based on the Group’s business model for the management of financial assets and the nature of the
contractual cash flows of the financial assets.
Debt instruments that are held within a business model whose objective is to collect the contractual cash
flows, and that have contractual cash flows that are solely payments of principal and interest on the principal
outstanding are generally measured at amortized cost at the end of subsequent accounting periods (Financial
assets at amortized cost).
Debt instruments that are held within a business model whose objective is achieved both by collecting
contractual cash flows and selling financial assets, and that have contractual cash flows that are solely
payments of principal and interest on the principal outstanding are generally measured at fair value through
other comprehensive income (Financial assets at fair value through other comprehensive income
(“FVTOCI”)).
All other debt instruments and equity instruments are measured at their fair value at the end of subsequent
accounting periods, and any change in the fair value is recognized as profit or loss (Financial assets at fair
value through profit or loss (“FVTPL”)).
Notwithstanding the foregoing, the Group may make the following irrevocable choice or designation at the
time of initial recognition of a financial asset.
The Group may make an irrevocable election to present in other comprehensive income subsequent changes
in the fair value of an investment in an equity instrument within the scope of this standard that is neither held
for trading nor is a contingent consideration recognized by an acquirer in a business combination to which K-
IFRS 1103 applies.
At initial recognition, financial assets at amortized cost or FVTOCI may be irrevocably designated as
financial assets at fair value through profit or loss mandatorily measured at fair value if doing so eliminates
or significantly reduces a measurement or recognition inconsistency.
As of the date of initial application of K-IFRS 1109, there are no debt instruments classified either as
financial assets at amortized cost or FVTOCI that are designated as financial assets at fair value through
profit or loss.
When debt instruments measured at FVTOCI are derecognized, the cumulative gain or loss recognized in
other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment. On
the other hand, for equity instruments designated as financial assets at fair value through other
comprehensive income, cumulative gains or losses previously recognized in other comprehensive income are
subsequently reclassified to retained earnings. Debt instruments measured subsequently at amortized cost or
at FVTOCI are subject to impairment.
129
Woori Bank annual report 2018We Believe in Your Potential - 10 -
The classification and measurement of financial assets and financial liabilities in accordance with K-IFRS
1109 and K-IFRS 1039 as of January 1, 2018 are as follows (Unit: Korean Won in millions):
Deposit
Classification in
accordance with
K-IFRS 1039
Loans and
receivables
Deposit
Financial assets at
Classification in
accordance with
K-IFRS 1109
Loan and other
financial assets at
amortized cost
Financial assets at
Debt securities
Financial assets at
Financial assets at
FVTPL
FVTPL
Amount in
accordance
with
K-IFRS 1039
8,870,835
25,972
Equity securities
Financial assets at
Financial assets at
FVTPL
FVTPL(*1)
2,654,027
FVTPL
FVTPL(*1)
47,304
Reclassificati
-on
Remeasure-
ment(*1)
Amount in
accordance with
K-IFRS 1109
-
-
-
-
-
-
-
-
-
3,115,775
(2,137)
1,273,498
1,219
850,207
46,855
12,874,209
16,749,296
279,032
918
253,014,491
59,272
6,772,088
306,941,042
-
-
-
-
-
-
-
-
-
-
-
-
-
8,870,835
25,972
2,654,027
47,304
3,113,638
1,274,717
850,207
46,855
12,874,209
14,119
322,300
-
50
16,749,296
280,000
-
253,014,491
-
59,272
-
14,169
6,772,088
306,955,211
Debt securities
HTM financial
Securities at
assets
amortized cost
308,181
Derivatives assets Financial assets at
Financial assets at
Equity securities
FVTPL
AFS financial
assets
Equity securities
AFS financial
assets
FVTPL(*1)
Financial assets at
FVTPL(*1)
Financial assets at
FVTOCI
Debt securities
AFS financial
Financial assets at
assets
FVTPL
Debt securities
AFS financial
Financial assets at
Debt securities
AFS financial
assets
FVTOCI
Securities at
Loans
Loans
assets
Loans and
receivables
Loans and
receivables
Derivatives assets
(Designated
for hedging)
Other financial
Derivatives assets
(Designated for
hedging)
Loans and
assets
receivables
amortized cost
Financial assets at
FVTPL (*1)
Loan and other
financial assets at
amortized cost
Derivatives assets
(Designated for
hedging)
Loan and other
financial assets at
amortized cost
Total financial assets
130
Woori Bank annual report 2018We Believe in Your Potential
- 11 -
Classification in
accordance with
K-IFRS 1039
Financial liabilities
Classification in
accordance with
K-IFRS 1109
Financial liabilities at
at FVTPL
FVTPL
Amount in
accordance
with
K-IFRS 1039
25,964
Financial liabilities at
amortized cost
234,695,084
Financial liabilities
at amortized cost
Financial liabilities
at amortized cost
Financial liabilities
Financial liabilities at
amortized cost
Financial liabilities at
at FVTPL
FVTPL
Financial liabilities
at amortized cost
Financial liabilities
Financial liabilities at
amortized cost
Financial liabilities at
at FVTPL
FVTPL
Financial liabilities
Financial liabilities at
at FVTPL
FVTPL
Derivatives
liabilities
(Designated for
hedging)
Financial liabilities
at amortized cost
Provision
Derivatives liabilities
(Designated for
hedging)
Financial liabilities at
amortized cost
13,892,461
67,754
Financial liabilities at
amortized cost
Total financial liabilities
71,697
294,809,262
14,784,706
91,739
27,869,651
160,057
3,150,149
Deposit due to
customers
Deposit due to
customers
Borrowings
Debentures
Debentures
Equity-linked
securities
Derivatives
liabilities
Derivatives
liabilities
(Designated
for hedging)
Other financial
liabilities
Provision for
financial
guarantee
Reclassifica-
tion
Remeasure-
ment(*2)
Amount in
accordance with
K-IFRS 1109
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25,964
234,695,084
14,784,706
91,739
27,869,651
160,057
3,150,149
67,754
13,892,461
71,697
294,809,262
(*1) Under K-IFRS 1039, the embedded derivatives out of hybrid financial instruments are accounted for as derivative
assets or liabilities if the criteria for separation of the embedded derivatives are met; and the host contract in those
instruments are recorded as available-for-sale financial assets or loans and receivables respectively. However, since
K-IFRS 1109 requires financial instruments to be accounted for based on the terms of the entire financial
instrument, the hybrid financial assets are revalued and classified as financial assets at fair value through profit or
loss.
(*2) The remeasurement effect due to expected credit losses is not included (The remeasurement effect of expected
credit losses is as follows: b) Impairment of financial assets).
At the date of the initial application of K-IFRS 1109, there were no financial assets or liabilities measured at
FVTPL that were reclassified to FVTOCI or amortized cost category.
The financial assets at FVTPL or FVTOCI that are reclassified to the amortized cost measurement category
as of the date of initial application of K-IFRS 1109, and the related valuation gain or loss and fair value of
the financial assets as of December 31, 2018 had it not been reclassified, are as follows (Unit: Korean Won in
millions):
Account subject
Category before the adoption of
K-IFRS 1109
Amount of valuation gain/loss
had it not been reclassified
Fair value
Debt securities(*)
AFS financial assets
2
257,665
(*) Those financial assets that are removed from the books as of December 31, 2018 are not presented in the table
above.
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b) Impairment of financial assets
The impairment model under K-IFRS 1109 reflects expected credit losses, as opposed to incurred credit
losses under K-IFRS 1039. Under the impairment approach in K-IFRS 1109, it is no longer necessary for a
credit event to have occurred before credit losses are recognized. Instead, the Group accounts for expected
credit losses and changes in those expected credit losses. The amount of expected credit losses should be
updated at each reporting date to reflect changes in credit risk since initial recognition.
The Group is required to recognize the expected credit losses for financial instruments measured at amortized
cost or FVTOCI (debt instrument), and unused loan commitments and financial guarantee contracts that are
subject to the impairment provisions of K-IFRS 1109. In particular, K-IFRS 1109 requires the Group to
measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit
losses (ECL) if the credit risk on that financial instrument has increased significantly since initial recognition,
or if the financial instrument is a purchased or originated credit-impaired financial asset. If the credit risk of a
financial instruments does not increase significantly after initial recognition (excluding “purchased or
originated credit-impaired loans” - for financial assets already impaired at initial recognition), the Group
measures the loss allowance on the financial instruments at the amount equivalent to the expected 12-month
credit loss.
Management assessed the impairment of the Group's financial assets, lending arrangements and financial
guarantees at the date of initial application by using reasonable and supportive measures that can be used
without undue cost or effort in determining the credit risk of the financial instruments at initial recognition in
accordance with K-IFRS 1109 and in comparing above credit risk with the credit risk at the date of initial
application. As of January 1, 2018, the results of the assessment are as follows (Unit: Korean Won in
millions):
Deposit
Debt securities
AFS securities
HTM securities
Loans and other financial
assets
Payment guarantee
Loan commitment
Classification
in accordance
with K-IFRS
1039
Loans and
receivables
AFS financial
assets
HTM financial
assets
Loans and
receivables
Classification in
accordance with
K-IFRS 1109
Loans and other
financial assets
at amortized cost
Financial assets at
FVTOCI
Securities at
amortized cost
Loans and other
financial assets
at amortized
cost
Total
Loss allowance
in accordance
with K-IFRS
1039(A)
Loss allowance
in accordance
with K-IFRS
1109 (B)
Increases
(B-A)
2,458
3,092
634
-
-
4,236
5,078
4,236
5,078
1,827,785
183,247
66,115
2,079,605
2,076,873
192,924
104,985
2,387,188
249,088
9,677
38,870
307,583
c) Classification and measurement of financial liabilities
One of the major changes related to the classification and measurement of financial liabilities as a result of
the adoption of K-IFRS 1109 is the accounting for change in the fair value of financial liabilities designated
at fair value through profit or loss due to the changes in issuer’s own credit risk. The Group recognizes the
effect of changes in the credit risk of financial liabilities designated as at FVTOCI in other comprehensive
income, except for cases where it creates or enlarges accounting mismatch of the profit or loss. Changes in
fair value due to credit risk of financial liabilities are not subsequently reclassified to profit or loss, but are
reclassified as retained earnings when financial liabilities are derecognized.
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In accordance with K-IFRS 1039, the entire of changes in fair value of financial liabilities designated as at
FVTPL are recognized in profit or loss. As of January 1, 2018, the Group designated 251,796 million Korean
Won of FVTPL out of 294,813,795 million of financial liabilities to be measured at FVTPL, and recognized
133 million Korean Won as accumulated other comprehensive loss in relation to the changes in own credit
risk of financial liabilities.
d) Hedge accounting
The new hedge accounting model maintains three types of hedge accounting. However, it introduced more
flexibility in the types of transactions that are eligible for hedge accounting and expanded the types of
hedging instruments and non-financial hedge items that qualify for hedge accounting. The standard related to
the evaluation of hedge accounting has been amended as a whole, where it is now replaced by the principle of
"economic relationship" between the hedged item and the hedging instrument. Retrospective assessment of
the hedging effectiveness is no longer required. Additional disclosure requirements have been introduced in
relation to the Group's risk management activities.
In accordance with the transitional provisions of K-IFRS 1109 on hedge accounting, the Group adopted the
hedge accounting provisions of K-IFRS 1109 prospectively from January 1, 2018. As of the date of initial
application, the Group concluded that the hedging relationship in accordance with K-IFRS 1039 is
appropriate for hedge accounting under K-IFRS 1109, thus the hedging relationship is considered to exist
continually. Since the major conditions for hedging instruments and the hedged items are consistent, all
hedging relationships are consistent within the effectiveness assessment requirements of K-IFRS 1109. The
Group has not designated a hedging relationship in accordance with K-IFRS 1109 in which the hedge
relationship would not have met the requirements for hedge accounting under K-IFRS 1039.
e) Effect on equity as a result of adoption of K-IFRS 1109
The effect on equity due to the adoption of K-IFRS 1109 as of January 1, 2018 is as follows (Unit: Korean
Won in millions):
-
Impact on accumulated other comprehensive loss due to financial assets at FVTOCI, etc.
Balance as of December 31, 2017 (prior to K-IFRS 1109)
Adjustments
Reclassification of available-for-sale financial assets to financial assets at FVTPL
Recognition of expected credit losses of debt securities at FVTOCI
Reclassification of available-for-sale financial assets(equity securities) to financial
assets at FVTOCI
Effect on changes in credit risk of financial liabilities at fair value through profit
or loss designated as upon initial recognition
Others
Income tax effect
Balance as of January 1, 2018 (based on K-IFRS 1109)
Amount
(89,724)
(392,176)
(152,124)
4,293
(397,508)
(133)
3,500
149,796
(481,900)
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- Retained earnings impact
Balance as of December 31, 2017 (prior to K-IFRS 1109)
Adjustments
Reclassification of available-for-sale financial assets to financial assets at FVTPL
Recognition of expected credit losses of debt instruments at FVTOCI
Reclassification of available-for-sale financial assets(equity securities) to
financial assets at FVTOCI
Effect on revaluation of financial assets at amortized cost from loan and
receivables or AFS financial assets
Recognition of expected credit losses of financial assets at amortized cost which
were previously loan and receivables
Effect on provision for guarantees and unused loan commitments on liabilities
Effect on changes in credit risk of financial liabilities at fair value through profit
or loss designated as upon initial recognition
Others
Income tax effect
Balance as of January 1, 2018 (based on K-IFRS 1109)
Amount
15,620,006
177,091
152,124
(4,293)
397,508
282
(240,683)
(48,548)
133
(4,950)
(74,482)
15,797,097
Adoption of K-IFRS 1115 – Revenue from contracts with customers (enacted)
-
The Group adopted the requirements using the modified retrospective method, with the effect of initial
application recognized on the date of initial application and without restatement of the comparative periods.
Also, this standard is retroactively applied to contracts which are not completed as of the date of initial
application, but practical expedient is used so that contract modifications made before the date of initial
application are not retroactively restated.
Accordingly, the Group has not retroactively restated the comparative consolidated financial statements
presented herein.
The effects of the adoption of K-IFRS 1115 by Woori Card Co. Ltd., a subsidiary of Woori Bank, are as
follows. Woori Card Co. Ltd. has modified its accounting policies related to the customer loyalty program,
whereby rewards and points provided to the users of the card are deducted from revenue due to the fact that
these are regarded as consideration provided to the customer. As a result of the aforementioned accounting
policy modification, Fees and Commission Received on Credit Card and Fees and Commission Paid for
Credit Card are both reduced by 525,978 million Won. On the other hand, accounting change modifications
resulting from the adoption of K-IFRS 1115 did not have any significant effect on the Consolidated
Statement of Financial Position, the capital and the Consolidated Statement of Cash Flows.
- Amendments to K-IFRS 1102 – Classification and Measurement of Share-based Payment Transactions
The amendments clarify that: 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) When an entity has an obligation
to pay the employee’s withholding tax to the tax authority for the employee’s equity-settled share-based
payment, the transaction shall be classified in its entirety as an equity-settled share-based payment
transaction if it would have been so classified in the absence of 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.
Amendments to K-IFRS 1040 – Investment Property
-
The amendments clarify that a transfer to, or from, investment property necessitates an assessment of
whether a property meets the definition of investment property, supported by observable evidence that a
change in use has occurred. The amendments further clarify that the situations listed in K-IFRS 1040 are not
exhaustive and that a change in use is possible for properties under construction (i.e. a change in use is not
limited to completed properties).
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-
Amendments 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 (or part of them) as a result of the
derecognition of a non-monetary asset or non-monetary liability (e.g., a non-refundable deposit or deferred
revenue) which were previously recognized due to the fact that consideration was paid or received in advance
in a foreign currency. The interpretation specifies that the date of transaction is the date on which the entity
initially recognizes the non-monetary asset or 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.
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 fair value through profit or loss mandatorily
measured at fair value, 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.
The amendments, except for K-IFRS 1109 and K-IFRS 1115, do not have significant impact on the
consolidated financial statements of the Group.
2) The Group has not applied the following K-IFRS that have been issued but are not yet effective:
K-IFRS 1116 – Leases(enacted)
-
K-IFRS 1116 introduces a comprehensive model for the identification of lease arrangements and accounting
treatments for both lessors and lessees. K-IFRS 1116 will supersede the current lease guidance including K-
IFRS 1017 Leases and the related interpretations, and will be applied to periods beginning on or after January
1, 2019.
The Group plans to apply modified retrospective approach as of January 1, 2019 in accordance with K-IFRS
1116. Therefore, the cumulative effect of applying K-IFRS 1116 will be adjusted in the retained earnings (or,
where appropriate, other components of equity) at the date of initial application, and the comparative
financial statements will not be restated.
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.
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. Also, K-IFRS 1116 requires expanded disclosures.
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According to the preliminary assessment of the Group, the lease agreements entered into by the Group as of
December 31, 2018 are expected to meet the definition of lease under the Standard, and accordingly, if the
Group adopts the Standard, it applies to all leases except short-term leases and leases of low value assets, and
the Group will recognize the right-of-use assets and related liabilities accordingly. As a result of an analysis
of the impact on consolidated financial statements, the Group expects right-of-use asset and lease liability to
both increase by 338,914 million Won as of December 31, 2018.
The following enacted/amended standards are not expected to affect the Group:
- K-IFRS 2123 – Uncertainty over Income Tax Treatments (enacted)
- Amendments to K-IFRS 1109
- Amendments to K-IFRS 1028
- Amendments to K-IFRS 1019
- Amendments to K-IFRS 1115
- Annual Improvements to K-IFRS 2015-2017 Cycle
These annual improvements contain partial amendments to K-IFRS 1012 ‘Income taxes’, K-IFRS 1023
‘Borrowing costs’, K-IFRS 1103 ‘Business combinations’ and K-IFRS 1111 ‘Joint arrangements’.
(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, which is the “Group”). Control is achieved
where the Group 1) has the power over the investee, 2) is exposed, or has rights, to variable returns from its
involvement with the investee, and 3) has the ability to use its power to affect its returns. The Group reassesses
whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of
the three elements of control listed above.
When the Group has less than a majority of the voting rights of an investee, it has power over the investee when
the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee
unilaterally. The Group considers all relevant facts and circumstances in assessing whether or not the Group's
voting rights in an investee are sufficient to give it power, including:
• The relative size of the Group's holding of voting rights and dispersion of holdings of the other vote
holders;
• Potential voting rights held by the Group, other vote holders or other parties;
• Rights arising from other contractual arrangements;
• Any additional facts and circumstances that indicate that the Group has, or does not have, the current
ability to direct the relevant activities at the time that decisions need to be made, including voting patterns
at previous shareholders' meetings.
Income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated
statement of comprehensive income from the date the Group gains control until the date when the Group ceases
to control the subsidiary. Profit or loss and each component of other comprehensive income are attributed to the
owner of the Group and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed
to the owner of the Group and to the non-controlling interests even if this results in the non-controlling interests
having a deficit balance.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with the Group’s accounting policies.
All intra-group transactions and, related assets and liabilities, income and expenses are eliminated in full on
consolidation.
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the
subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-
controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any
difference between the amount by which the non-controlling interests are adjusted and the fair value of the
consideration paid or received is recognized directly in equity and attributed to the owner of the parent company.
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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 1109 Financial
Instruments 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 as the sum of the acquisition-date fair values of the assets
transferred by the Group in exchange for control of the acquiree, liabilities assumed by the Group for the former
owners of the acquiree and the equity interests issued by the Group. Acquisition-related costs are generally
recognized in profit or loss 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
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.
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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 other than the above is remeasured at
subsequent reporting dates 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(or other comprehensive income, if applicable). 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 recognized, identical to the treatment assuming interests are sold
directly.
In case where i) a common entity ultimately controls over all participating entities, or businesses, in a 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, and 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 in 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, and that is not a subsidiary or a joint
venture. 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 assets and liabilities of the joint ventures and associates are
incorporated in these consolidated financial statements using the equity method of accounting, except when the
investment is classified as held for sale, in which case it is accounted for in accordance with K-IFRS 1105 Non-
current Assets Held for Sale and Discontinued Operations. Under the equity method, an investment in the joint
ventures and associates is initially recognized in the consolidated statements of financial position at cost and
adjusted thereafter to recognize the Group's share of the net assets of the joint ventures and associates and any
impairment. When the Group's share of losses of the joint ventures and associates exceeds the Group's interest in
the associate, the Group discontinues recognizing its share of further losses. Additional losses are recognized
only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of
the joint ventures and associates.
Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets,
liabilities and contingent liabilities of the joint ventures and associates recognized at the date of acquisition is
recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the
Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of
acquisition is recognized immediately in net income.
Upon a loss of significant influence over the joint ventures and associates, the Group discontinues the use of the
equity method and measures at fair value of any investment that the Group retains in the former joint ventures
and associates from the date when the Group loses significant influence. The fair value of the investment is
regarded as its fair value on initial recognition as a financial asset in accordance with K-IFRS 1039 Financial
Instruments; Recognition and Measurement. The Group recognized differences between the carrying amount and
fair value in net income and it is included in determination of the gain or loss on disposal of joint ventures and
associates. The Group accounts for all amounts recognized in other comprehensive income in relation to that
joint ventures and associates on the same basis as would be required if the joint ventures and associates had
directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognized in other
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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 1028 - Investments in Associates and Joint Ventures 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:
- its assets, including its share of any assets held jointly;
- its liabilities, including its share of any liabilities incurred jointly;
- its revenue from the sale of its share of the output arising from the joint operation;
- its share of the revenue from the sale of the output by the joint operation; and
- 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 K-IFRSs applicable to the particular assets, liabilities, revenues and expenses.
When the Group enters into a transaction with a joint operation in which it is a joint operator, such as a sale or
contribution of assets, it is conducting the transaction with the other parties to the joint operation and, as such,
the Group recognizes gains and losses resulting from such a transaction only to the extent of the other parties’
interests in the joint operation.
When the Group enters into a transaction with a joint operation in which it is a joint operator, such as a purchase
of assets, it does not recognize proportional share of profit or loss until the asset is sold to a third party.
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(6)
Revenue recognition
K-IFRS 1018 allowed recognition of fees and commission income, a revenue from contracts with customers, in
accordance with the accrual principle. However, K-IFRS 1115, applicable from the current period, requires the
recognition of revenues based on transaction price allocated to the performance obligation when or as the Group
performs that obligation to the customer. Since revenues other than those from contracts with customers, such as
interest revenue and loan origination fee (cost), are measured through effective interest rate method, the revenue
recognition principles are identical with those applied in the previous periods.
1) Revenues from contracts with customers
The Group recognizes revenue when the Group satisfies a performance obligation by transferring a promised
good or service to a customer. When a performance obligation is satisfied, the Group shall recognizes as a
revenue the amount of the transaction price that is allocated to that performance obligation. The transaction price
is the amount of consideration to which the Group expects to be entitled in exchange for transferring promised
goods or services to a customer, excluding amounts collected on behalf of third parties.
The Group is recognizing revenue by major sources as shown below:
① Fees and commission received for brokerage
The fees and commission received for agency are the amount of consideration or fee expected to be entitled to
receive in return for providing goods or services to the other parties with the Group acting as an agency, such as
in the case of sales of bancassurance and beneficiary certificates. The majority of these fees and commission
received for brokerage are from the business activities relevant to Consumer banking segment.
② Fees and commission received related to credit
The fees and commission received related to credit mainly include the lending fees received from the loan
activity and the fees received in the L/C transactions. Except for the fees and commission accounted for in
calculating the effective interest rate, it is generally recognized when the performance obligation has been
performed. The majority of these fees and commission received related to credit are from the business activities
relevant to Consumer banking and Corporate banking segment.
③ Fees and commission received for electronic finance
The fees and commission received for electronic finance include fees received in return for providing various
kinds of electronic financial services through firm-banking and CMS. These fees are recognized as revenue
immediately upon the completion of services. The majority of these fees and commission received for electronic
finance are from the business activities relevant to Consumer banking and Corporate banking segment.
④ Fees and commission received on foreign exchange handling
The fees and commission received on foreign exchange handling consist of various fees incurred when
transferring foreign currency. The point of processing the customer's request is the time when performance
obligation is satisfied, and revenue is immediately recognized when fees and commission are received after
requests are processed. The business activities relevant to these fees and commission received on foreign
exchange handling are substantially attributable to Corporate banking segment.
⑤ Fees and commission received on foreign exchange
The fees and commission received on foreign exchange consist of fees related to the issuance of various
certificates, such as exchange, import and export performance certificates, purchase certificates, etc. The point of
processing the customer's request is the time when performance obligation is satisfied, and revenue is
immediately recognized when fees and commission are received after requests are processed. The business
activities relevant to these fees and commission received on foreign exchange are substantially attributable to
Corporate banking segment.
⑥ Fees and commission received for guarantee
The fees and commission received for guarantee include the fees received for the various warranties. The
activities related to the warranty consist mainly of performance obligations satisfied over time and fees and
commission are recognized over the guarantee period. The business activities relevant to these fees and
commission received for guarantee are substantially attributable to Corporate banking segment.
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⑦ Fees and commission received on credit card
The fees and commission received on credit card consist mainly of merchant account fees and annual fees. The
Group recognizes merchant account fees by multiplying agreed commission rate to the amount paid by using the
credit card. The annual fees are performance obligation satisfied over time and are recognized over agreed
periods after the annual fees are paid in advance. The business activities relevant to these fees and commission
received on credit card are substantially attributable to Credit cards segment.
⑧ Fees and commission received on securities business
The fees and commission received on securities business consist mainly of fees and commission for the sale of
beneficiary certificates, and these fees are recognized when the beneficiary certificates are sold to customers.
The business activities relevant to these fees and commission received on securities business are substantially
attributable to Consumer banking segment.
⑨ Fees and commission from trust management
The fees and commission from trust management consist of fees and commission received in return for the
operation and management services for entrusted assets. These operation and management services are
performance obligations satisfied over time, and revenue is recognized over the service period. Among the fees
and commission from trust management, variable considerations such as profit commission that are affected by
the value of entrusted assets and base return of the future periods are recognized as revenue when limitations to
the estimates are lifted. The majority of these fees and commission received for brokerage are from the business
activities relevant to Consumer banking segment.
⑩ Fees and commission received on credit Information
The fees and commission received on credit Information are composed of the fees and commission received by
performing credit investigation and proxy collection services. Credit investigation fees and commission are the
amount received in return for verifying the information requested by the customer and are recognized as revenue
at the time the verification is completed. Proxy collection service fees are recognized by multiplying the
applicable rate to the collected amount at the time when collection services are completed. The majority of these
fees and commission received for brokerage are from the business activities relevant to Consumer banking
segment.
⑪ Other fees
Other fees are usually fees related to remittances, but include fees related to various other services provided to
customers by the Group. These fees are recognized when transactions occur at the customers' request and
services are provided, at the same time when commission are received. These other fees occur across all
operating segments and no single operating segment represents majority of other fees.
2) Revenues from sources other than contracts with customers
① Interest income
Interest income on financial assets measured at FVTOCI and financial assets at amortized costs is measured
using the effective interest method.
The effective interest method is a method of calculating the amortized cost of a debt instrument 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 unamortized cost over the expected period, or shorter if
appropriate. Future cash flows include commissions and cost of reward points(limited to the primary component
of effective interest rate) and other premiums or discounts that are paid or received between the contractual
parties when calculating the effective interest rate, but does not include expected credit losses. All contractual
terms of a financial instrument are considered when estimating future cash flows.
For purchased or originated credit-impaired financial assets, interest revenue is recognized by applying the
credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition. Even if
the financial asset is no longer impaired in the subsequent periods due to credit improvement, the basis of
interest revenue calculation is not changed from amortized cost to unamortized cost of the financial assets.
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② Loan origination fees and costs
The commission fees earned on loans, which is part of the effective interest of loans, is accounted for as deferred
origination fees. Incremental costs related to the origination of loans are accounted for as deferred origination
fees and is being added or deducted to/from interest income on loans using effective interest rate method.
(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. The effective portion of the
changes in fair value of a derivative that qualifies as a cash flow hedge and the foreign exchange differences on
monetary items that form part of net investment in foreign operations are recognized in equity.
Assets and liabilities of the foreign operations subject to consolidation are translated into Korean Won at foreign
exchange rates at the end of the reporting period. Except for situations in which it is required to use exchange
rates at the date of transaction due to significant changes in exchange rates during the period, items that belong
to profit or loss shall be measured by average exchange rate, with foreign exchange differences recognized as
other comprehensive income and added to equity (allocated to non-controlling interests, if appropriate). When
foreign operations are disposed, the controlling interest’s share of accumulated foreign exchange differences
related to such foreign operations will be reclassified to profit or loss, while non-controlling interest’s
corresponding share will not be reclassified.
Adjustments to fair value of identifiable assets and liabilities, and goodwill arising from the acquisition of
foreign operations will be treated as assets and liabilities of the corresponding foreign operation, and is translated
using foreign exchange rates at the end of the period. The foreign exchange differences are recognized in equity.
(8)
Cash and cash equivalents
The Group is classifying cash on hand, demand deposits, interest-earning deposits with original maturities of up
to three months on acquisition date, and highly liquid investments that are readily convertible to known amounts
of cash and subject to an insignificant risk of changes in value as cash and cash equivalents.
(9)
Financial assets and financial liabilities
The Group’s accounting policies in accordance with the newly adopted K-IFRS 1109 are as follows:
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 FVTPL, financial assets at FVTOCI,
and financial assets at amortized cost.
a) Business model
The Group evaluates the way business is being managed, and the purpose of the business model for
managing a financial asset best reflects the way information is provided to the management at its portfolio
level. Such information considers the following:
- The accounting policies and purpose specified for the portfolio, the actual operation of such policies.
This includes strategy of the management focusing on the receipt of contractual interest revenue,
maintaining a certain level of interest income, matching the duration of financial assets and the duration
of corresponding liabilities to obtain the asset, and outflow or realization of expected cash flows from
disposal of assets
- The way the performance of a financial asset held under the business model is evaluated, and the way
such evaluation is being reported to the management
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- The risk affecting the performance of the business model (and financial assets held under the business
model), and the way such risk is being managed
- The compensation plan for the management (e.g. whether the management is being compensated based
on the fair value of assets or based on contractual cash flows received)
- Frequency, amount, timing and reason for sale of financial assets in the past, and forecast of future sale
activities.
b) Contractual cash flows
The principal is defined to be the fair value of a financial assets at initial recognition. Interest is not only
composed of consideration for the time value of money, consideration for the credit risk related to
remaining principal at a certain period of time, and consideration for other cost (e.g. liquidity risk and cost
of operation) and fundamental risk associated with lending, but also profit.
When evaluating whether contractual cash flows are solely payments of principal and interests, the Group
considers the contractual terms of the financial instrument. When a financial asset contains contractual
conditions that modify the timing and amount of contractual cash flows, it is required to determine whether
contractual cash flows that arise during the remaining life of the financial instrument due to such
contractual condition are solely payments of principal and interest. The Group considers the following
elements when evaluating the above:
- Conditions that lead to modification of timing or amount of cash flows
- Contractual terms that adjust contractual nominal interest, including floating rate features
- Early payment features and maturity extension features
- Contractual terms that limit the Group’s claim on cash flows arising from certain assets (e.g. non-
recourse feature)
① Financial assets at FVTPL
The Group is classifying those financial assets that are not classified as either financial assets at amortized
cost or financial assets at FVTOCI, and those designated to be measured at FVTPL, as financial assets at
FVTPL. Financial assets at FVTPL are measured at fair value, and related profit or loss is recognized in net
income. Transaction costs related to acquisition at initial recognition is recognized in net income
immediately upon its occurrence.
It is possible to designate a financial asset as financial asset at FVTPL if at initial recognition: (a) it is
possible to remove or significantly reduce recognition or measurement mismatch that may otherwise have
occurred if not for its designation as financial asset at FVTPL; (b) the financial asset forms part of the
Group’s financial instrument group (A group composed of a combination of financial asset or liability), is
measured at fair value and is being evaluated for its performance, and such information is provided
internally; and (c) the financial asset is part of a contract that contains one or more of embedded derivatives,
and is a hybrid contract in which designation as financial asset at FVTPL is allowed under K-IFRS 1109
‘Financial Instruments’. However, the designation is irrevocable.
② Financial assets at FVTOCI
When financial assets are held under a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets, and when contractual cash flows from such financial
assets are solely payments of principal and interest, the financial assets are classified as financial assets at
FVTOCI. Also, for investments in equity instruments that are not held for short-term trade, an irrevocable
election is available at initial recognition to present subsequent changes in fair value as other
comprehensive income.
At initial recognition, financial assets at FVTOCI is measured at its fair value plus any direct transaction
cost, and is subsequently measured in fair value. However, for equity instruments that do not have a
quotation in an active market and in which fair value cannot be measured reliably, they are measured at
cost. The changes in fair value except for profit or loss items such as impairment losses (reversals), interest
revenue calculated by using effective interest method, and foreign exchange gain or loss, and related
income tax effects are recognized as other comprehensive income until the asset’s disposal. Upon
derecognition, the accumulated other comprehensive income is reclassified from equity to net income for
FVTOCI (debt instrument), and reclassified within the equity for FVTOCI (equity instruments).
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③ Financial assets at amortized cost
When financial assets are held under a business model whose objective is to hold financial assets in order to
collect contractual cash flows, and when contractual cash flows from such financial assets are solely
payments of principal and interest, the financial assets are classified as financial assets at amortized cost. At
initial recognition, financial assets at amortized cost are recognized at fair value plus any direct transaction
cost. Financial assets at amortized cost is presented at amortized cost using effective interest method, less
any loss allowance.
2) Financial liabilities
At initial recognition, financial liabilities are classified into either financial liabilities at FVTPL or financial
liabilities at amortized cost.
Financial liabilities are usually classified as financial liabilities at FVTPL when they are acquired with a purpose
to repurchase them within a short period of time, when they are part of a certain financial instrument portfolio
that is actually and recently being managed with a purpose of short-term profit and joint management by the
Group at initial recognition, and when they are derivatives that do not qualify as hedging instruments. Financial
liabilities at FVTPL are measured at fair value plus direct transaction cost at initial recognition, and are
subsequently measured at fair value. Profit or loss arising from financial liabilities at FVTPL is recognized in net
income when occurred.
It is possible to designate a financial liability as financial liability at FVTPL if at initial recognition: (a) it is
possible to remove or significantly reduce recognition or measurement mismatch that may otherwise have
occurred if not for its designation as financial liability at FVTPL; (b) the financial asset forms part of the
Group’s financial instrument group (A group composed of a combination of financial asset or liability) according
to the Group’s documented risk management or investment strategy, is measured at fair value and is being
evaluated for its performance, and such information is provided internally; and (c) the financial liability is part of
a contract that contains one or more of embedded derivatives, and is a hybrid contract in which designation as
financial liability at FVTPL is allowed under K-IFRS 1109 ‘Financial Instruments’.
Financial liabilities designated as at FVTPL are initially recognized at fair value, with any direct transaction cost
recognized in profit or loss, and are subsequently measured at fair value. Any profit or loss from financial
liabilities at FVTPL are recognized in profit or loss.
Financial liabilities not classified as financial liabilities at FVTPL are measured at amortized cost. The Group is
classifying liabilities such as deposits due to customers, borrowings and debentures as financial liabilities at
amortized cost.
3) Reclassification
Financial assets are not reclassified after initial recognition unless the Group modifies the business model used to
manage financial assets. When the Group modifies the business model used to manage financial assets, all
affected financial assets are reclassified on the first day of the first reporting period after the modification.
4) Derecognition
Financial assets are derecognized when contractual rights to cash flows from the financial assets are expired, or
when substantially all of risk and reward for holding financial assets is transferred to another entity as a result of
a sale of financial assets. If the Group does not have and does not transfer substantially all of the risk and reward
of holding financial assets with control of the transferred financial assets retained, the Group recognizes financial
assets to the extent of its continuing involvement. If the Group holds substantially all the risk and reward of
holding a financial asset, it continues to recognize that asset and proceeds are accounted for as collateralized
borrowings.
When a financial asset is fully derecognized, the difference between the book value and the sum of proceeds and
accumulated other comprehensive income is recognized as profit or loss in case of FVTOCI (debt instruments),
and as retained earnings for FVTOCI (equity instruments).
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In case when a financial asset is not fully derecognized, the Group allocates the book value into amounts retained
in the books and removed from the books, based on the relative fair value of each portion at the date of sale, and
based on the degree of continuing involvement. For the derecognized portion of the financial assets, the
difference between its book value and the sum of proceeds and the portion of accumulated other comprehensive
income attributable to that portion will be recognized in profit or loss in case of debt instruments and recognized
in retained earnings in case of equity instruments. The accumulated other comprehensive income is distributed to
the portion of book value retained in the books, and to the portion of book value removed from the books.
The Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged,
cancelled or have expired. The difference between the carrying amount of the financial liability derecognized
and the consideration paid and payable is recognized in profit or loss.
When the Group exchanges with the existing lender one debt instrument into another one with the substantially
different terms, such exchange is accounted for as an extinguishment of the original financial liability and the
recognition of a new financial liability. Similarly, the Group accounts for substantial modification of terms of an
existing liability or part of it as an extinguishment of the original financial liability and the recognition of a new
liability. It is assumed that the terms are substantially different if the discounted present value of the cash flows
under the new terms, including any fees paid net of any fees received and discounted using the original effective
rate is at least 10 percent different from the discounted present value of the remaining cash flows of the original
financial liability
5) Fair value of financial instruments
Financial assets at FVTPL and financial assets at FVTOCI are measured and presented in consolidated financial
statements at their fair values, and all derivatives are also subject to fair value measurement.
Fair value is defined as the price that would be received to exchange an asset or paid to transfer a liability in a
recent transaction between independent parties that are reasonable and willing. Fair value is the transaction price
of identical financial assets or financial liabilities generated in an active market. An active market is a market
where trade volume is sufficient and objective price information is available due to the fact that bid and ask price
differences are small.
When trade volume of a financial instrument is low, when transaction prices within the market show large
differences among them, or when it cannot be concluded that a financial instrument is being traded within an
active market due to disclosures being extremely shallow, fair value is measured using valuation techniques
based on alternative market information or using internal valuation techniques based on general and observable
information obtained from objective sources. Market information includes maturity and characteristics, duration,
similar yield curve, and variability measurement of financial instruments of similar nature. Fair value amount
contains unique assumptions on each entity (the Group concluded that it is using assumptions applied in valuing
financial instruments in the market, or risk-adjusted assumptions in case marketability does not exist).
The market approach and income approach, which are valuation techniques used to estimate the fair value of
financial instruments, both require significant judgment. Market approach measures fair value using either a
recent transaction price that includes the financial instrument, or observable information on comparable firm or
assets. Income approach measures fair value through discounting future cash flows with a discount rate
reflecting market expectations, and revenue, operating income, depreciation, capital expenditures, income tax,
working capital and estimated residual value of financial investments are being considered when deriving future
cash flows. Valuation techniques such as the above include estimates based on the financial instruments’
complexity and usefulness of observable information in the market.
The valuation techniques used in the evaluation of financial instruments are explained below.
a) Financial assets at FVTPL and Financial assets at FVTOCI
The fair value of equity securities included in financial assets at FVTPL and financial assets at FVTOCI category
is recognized in the statement of financial position at its available market price. Debt securities traded in the
over-the-counter market are generally recognized at an amount computed by an independent appraiser.
Especially, when the Group uses the fair value determined by independent appraisers, the Group usually obtains
three values from three different appraisers for each financial instrument, and selects the minimum amount
without making additional adjustments. For equity securities without marketability, the Group uses the amount
determined by the independent appraiser. The Group verifies the prices obtained from appraisers in various
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ways, including the evaluation of independent appraisers’ competency, indirect verification through comparison
between appraisers’ price and other available market information, and reperformance done by employees who
have knowledge of valuation models and assumptions that appraisers used.
b) Derivatives
The Group’s transactions involving derivatives such as futures and exchange traded options are measured at
market value. For exchange traded derivatives classified as level 2 in the fair value hierarchy, the fair value is
estimated using internal valuation techniques. If there are no publicly available market prices because they are
traded over-the-counter, fair value is measured through internal valuation techniques. When using internal
valuation techniques to derive fair value, the types of derivatives, base interest rate or characteristics of prices, or
stock market indices are considered. When variables used in the internal valuation techniques are not observable
information in the market, such variables may contain significant estimates.
c) Adjustment of valuation amount
The Group is exposed to credit risk when counterparty to a derivative contract does not perform its contractual
obligation, and the exposure amount is equal to the amount of derivative asset recognized in the statement of
financial position. When the Group earns income through valuation of derivatives, such income is recognized as
derivative asset in the statement of financial position. Some of the derivatives are traded in the market, but most
of the derivatives are measured at estimated fair value derived from internal valuation models that use
observable information in the market. As such, in order to estimate the fair value there should be an adjustment
made to incorporate counterparty’s credit risk, and credit risk adjustment is being considered when valuing
derivative assets such as over-the counter derivatives. The amount of financial liabilities is also adjusted by the
Group’s own credit risk when valuing them.
The amount of adjustment is derived from counterparty’s probability of default and loss given default. This
adjustment considers contractual matters that are designed to reduce the Group’s exposure to each counterparty’s
credit risk. When derivatives are under master netting arrangement, the exposure used in the computation of
credit risk adjustment is a net amount after adding/deducting cash collateral received (or paid) from loss(or gain)
position derivatives with the same counterparty.
6) Expected credit losses on financial assets
The Group recognizes loss allowance on expected credit losses for the following assets:
- Financial assets at amortized cost
- Debt instruments measured at FVTOCI
- Contract assets as defined by K-IFRS 1115
Expected credit losses are weighted-average value of a range of possible results, considering the time value of
money, and are measured by incorporating information on current conditions and forecasts of future economic
conditions that are available without undue cost or effort.
The methods to measure expected credit losses are classified into following three categories in accordance with
K-IFRS:
- General approach: Financial assets that does not belong to below two models and unused loan commitments
- Simplified approach: When financial assets are either trade receivables, contract assets or lease receivables
- Credit impairment model: Purchased or originated credit-impaired financial assets
The measurement of loss allowance under general approach is differentiated depending on whether the credit
risk has increased significantly after initial recognition. That is, loss allowance is measured based on 12-month
expected credit loss when the credit risk has not increased significantly after initial recognition, while loss
allowance is measured at lifetime expected credit loss when credit risk has increased significantly. Lifetime is
the expected remaining life of the financial instrument up to the maturity date of the contract.
The measurement of loss allowance under simplified approach is always based on lifetime expected credit loss,
and loss allowance under credit impairment model is measured as the cumulative change in lifetime expected
credit loss since initial recognition.
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a) Measurement of expected credit losses on financial asset at amortized cost
The expected credit losses on financial assets at amortized cost is measured by the difference between the
contractual cash flows during the period and the present value of expected cash flows. Expected cash inflows are
computed for individually significant financial assets in order to calculate expected credit losses.
When financial assets that are not individually significant, they are included in a group of financial assets with
similar credit risk characteristics and expected credit losses of the group are calculated collectively.
Expected credit losses are deducted through loss allowance account, and when the financial asset is determined
to be uncollectible, the loss allowance is written off from the books along with the related financial asset. When
loan receivable previously written off is subsequently collected, the related loss allowance is increased and
changes in loss allowance are recognized in profit or loss.
b) Measurement of expected credit losses on financial asset at FVTOCI
The measurement method of expected credit loss is identical to financial asset at amortized cost, but changes in
the loss allowance is recognized in other comprehensive income. When financial assets at FVTOCI is disposed
or repaid, the related loss allowance is reclassified from other comprehensive income to net income.
The comparative financial statements for the year 2017 are prepared in accordance with K-IFRS 1039.
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.
① Financial assets at FVTPL
The Group classifies financial assets as financial assets measured at FVTPL when they are either held for
trading or designated to be measured at FVTPL. Financial assets acquired with the purpose of selling in the
near term are classified as financial assets held for trading, and are measured at fair value with related
valuation gain or loss recognized in net income. Any transaction cost related to the acquisition of financial
assets at initial recognition is recognized in net income upon its occurrence.
A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial
recognition if: (a) such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise; or (b) 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 (c) it forms part of a contract containing one or more
embedded derivatives, and K-IFRS 1039 Financial Instruments: Recognition and Measurement permits the
entire combined contract (asset or liability) to be designated as at FVTPL.
Financial assets designated by the Group on initial recognition as at FVTPL are recognized at fair value,
with transaction costs recognized in net income, and are subsequently measured at fair value. Gains and
losses on financial assets that are designated as at FVTPL are recognized in net income as they arise.
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② 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.
③ HTM financial assets
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.
④ Loans and other 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 incur.
A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial
recognition if: (a) such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise; or (b) 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 (c) it forms part of a contract containing one or more embedded
derivatives, and K-IFRS 1039 Financial Instruments: Recognition and Measurement permits the entire combined
contract (asset or liability) to be designated as at FVTPL.
Financial liabilities that the Group designates on initial recognition as being at FVTPL are recognized at fair
value, with transaction costs being recognized in net income, and are subsequently measured at fair value. Gains
and losses on financial liabilities that are designated as at FVTPL are recognized in net income as they incur.
All other financial liabilities, such as deposits due to customers, borrowings, and debentures, are measured at
amortized cost using the effective interest method.
3) Reclassification
Held-for-trading and AFS financial assets that meet the definition of loans and receivables (non-derivative
financial assets with fixed or determinable payments that are not quoted in an active market) may be reclassified
to loans and receivables if the Group has the intention and ability to hold the financial asset for the foreseeable
future or until maturity. The Group typically regards the foreseeable future as twelve months from the date of
reclassification. Reclassifications are made at fair value. This fair value becomes the asset's new cost or
amortized cost as appropriate. Gains and losses recognized up to the date of reclassification are not reversed.
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4) Derecognition
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 the Group allocates the previous carrying amount
of the financial asset between the part it continues to recognize under continuing involvement, and the part it no
longer recognizes on the basis of the relative fair value of those parts on the date of the transfer. The difference
between the carrying amount allocated to the part that is no longer recognized and the sum of the consideration
received for the part that is no longer recognized and any cumulative gain or loss allocated to it that had been
recognized in other comprehensive income is recognized in profit or loss. A cumulative gain or loss that had
been recognized in other comprehensive income is allocated between the part that continues to be recognized
and the part that is no longer recognized on the basis of the relative fair value of those parts.
The Group derecognizes the financial liability, when Group's obligations are discharged, canceled or expired.
The difference between paid cost and the carrying amount of financial liabilities is recorded in profit or loss.
5) Fair value of financial instruments
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.
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a) Financial assets at FVTPL and AFS financial assets
The fair value of the securities included in financial assets at FVTPL and AFS financial assets are recognized in
the consolidated statements of financial position based on quoted market prices, where available. For debt
securities traded in the OTC market, the Group generally determines fair value based on prices obtained from
independent pricing services. Specifically, with respect to independent pricing services, the Group obtains three
prices per instrument from reputable independent pricing services in Korea, and generally uses the lowest of the
prices obtained from such services without further adjustment. For non-marketable equity securities, the Group
obtains prices from the independent pricing services. The Group validates prices received from such independent
pricing services using a variety of means, including verification of the qualification of the independent pricing
services, corroboration of the pricing by comparing the prices among the independent pricing services and by
reference to other available market data, and review of the pricing model and assumptions used by the
independent pricing services by the Group’s personnel who are familiar with market-related conditions.
b) Derivatives
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) Adjustment of valuation amount
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 is 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 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 have 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.
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Impairment losses are assessed individually for financial assets that are individually significant and assessed
either individually or collectively for assets that are not individually significant. In making collective assessment
of impairment, financial assets are grouped into portfolios on the basis of similar risk characteristics. Future cash
flows from these portfolios are estimated on the basis of the contractual cash flows and historical loss experience
for assets with similar credit risk characteristics. Historical loss experience is adjusted, on the basis of observable
data, to reflect current conditions not affecting the period of historical experience.
Impairment losses are recognized in net income and the carrying amount of the financial asset or group of
financial assets reduced by establishing a provision for impairment losses. If, in a subsequent period, the amount
of the impairment loss reduces and the reduction can be ascribed to an event after the impairment was
recognized (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 as a net amount in the statements of financial position when the
Group has an enforceable legal right 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, and the book value of a portion of an asset that are replaced by a subsequent
expenditure is removed from the books. Routine maintenance and repairs are expensed as incurred.
While land is not depreciated, all other investment properties are depreciated based on the depreciation method
and useful lives of premises and equipment. The estimated useful lives, residual values and depreciation method
are reviewed at the end of each reporting period, and when it is deemed appropriate to change them, the effect of
any change is accounted for as a change in accounting estimates.
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 the 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.
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(12) Premises and equipment
Premises and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
The cost of an item of premises and equipment is expenditures directly attributable to their purchase or
construction, which includes any cost 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 costs of dismantling and removing the item and restoring the site on which it is located.
Subsequent costs are recognized in the carrying amount of an asset or as a separate asset (if appropriate) if it is
probable that future economic benefit 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 by applying the following estimated economic useful lives on the amount of cost or revalued
amount less residual value.
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 changes in the estimates are deemed appropriate, the changes
are accounted for as a change in an accounting estimate. When there is an indicator of impairment and the
carrying amount of a premises and equipment item exceeds the estimated recoverable amount, the carrying
amount of such asset is reduced to the recoverable amount.
(13) Intangible assets and goodwill
The Group is recognizing intangible assets measured at the manufacturing cost or acquisition cost plus additional
incidental expenses less accumulated amortization and accumulated impairment losses. The Group’s intangible
asset are amortized over the following economic lives using the straight-line method. The estimated useful life
and amortization method are reviewed at the end of each reporting period. If changes in the estimates are deemed
appropriate, 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.
Goodwill acquired in a business combination is included in intangible assets. Goodwill is not amortized, but is
subject to an impairment test at the cash-generating unit level every year, and whenever there is an indicator that
goodwill is impaired.
Goodwill is allocated to each of the Group’s cash-generating unit (or groups of cash-generating units) that is
expected to benefit from the synergies of the combination. If the recoverable amount of the cash-generating unit
is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets of the unit on a pro rata basis based on the carrying
amount of each asset in the unit. Any impairment loss for goodwill is recognized directly in profit or loss. An
impairment loss recognized for goodwill is not reversed in subsequent periods.
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(14) Impairment of non-monetary assets
Intangible assets with indefinite useful lives or intangible assets that are not yet available for use are tested for
impairment annually, regardless of whether or not there is any indication of impairment. All other assets are
tested for impairment by estimating the recoverable amount when there is an objective indication that the
carrying amount may not be recoverable. Recoverable amount is the higher of value in use or 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.
(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) The Group as a lessor
The Group recognizes lease receivables at the present value of minimum lease payments of a finance lease and
any unguaranteed residual value. After the commencement date of the lease, accounting is done to recognize
interest income over each reporting period by computing periodic interest income on the Group’s net investment.
Rental income from operating leases is recognized on a straight-line basis over the lease term. Initial direct costs
incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and
expensed on a straight-line basis over the lease term. Operating lease assets are included within other asset
category in other assets, and depreciated over their economic life.
2) The Group 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 separate statements of financial position as a finance lease obligation. Lease payments
are apportioned between finance expenses and reduction of the lease obligation 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 forwards, futures, options and swaps, depending on the types of
transactions and are classified at the point of transaction as either trading or hedging based on its purpose.
Derivatives are initially recognized at fair value at the date of contract and are subsequently measured at 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. If derivatives have been designated as
hedging instruments and if it is effective, the point of recognition of gain or loss depends on the characteristics of
hedging relationship.
1) Embedded derivatives
Embedded derivatives are components of a hybrid financial instrument that includes a non-derivative host
contract. It has an effect of modifying part of cash flows of the hybrid financial instrument similar to an
independent derivative.
Embedded derivatives that are part of a hybrid contract of which the host contract is a financial asset within the
scope of K-IFRS 1109 is not separated. The classification is done by considering the hybrid contract as a whole,
and subsequent measurement is either at amortized cost or fair value.
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If embedded derivatives are part of a hybrid contract of which the host contract is not a financial asset within the
scope of K-IFRS 1109 (e.g. financial liability), then these are treated as separate derivatives if embedded
derivatives meet the definition of a derivative, characteristics & risk of the embedded derivatives are not closely
related to that of host contract, and if the host contract is not measured at FVTPL.
In the previous year, all embedded derivatives which were part of a hybrid contract were treated as separate
derivatives if embedded derivatives meet the definition of a derivative, characteristics & risk of the embedded
derivatives are not closely related to that of host contract, and if the host contract is not measured at FVTPL
2) Hedge accounting
The Group is applying K-IFRS 1109 in regards to hedge accounting. The Group is designating certain
derivatives as hedging instrument against fair value changes in relation to the interest rate risk, foreign currency
translation and interest rate risk, and foreign currency translation risk.
The Group is documenting the relationship between hedging instruments and hedged items at the
commencement of hedging in accordance with their purpose and strategy. Also, the Group documents at the
commencement and subsequent dates whether the hedging instrument effectively counters the changes in fair
value of hedged items. A hedging instrument is effective only when it meets all the following criteria:
ㆍ When there is an economic relationship between the hedged items and hedging instruments.
ㆍ When the effect of credit risk is not stronger than the change in value due to the economic relationship
between the hedged items and hedging instruments.
ㆍ When the hedge ratio is equal to the proportion of hedged items to the hedging instruments.
When a hedging relationship no longer meets the hedging effectiveness requirements related to hedge ratio, but
when the purpose of risk management on designated hedging relationship is still maintained, the hedge ratio of
the hedging relationship is adjusted so that hedging relationship may meet the requirements again (Hedge ratio
readjustment).
The Group has designated derivatives as hedging instrument except for the portion on foreign currency basis
spread. The fair value change due to foreign currency basis spread is recognized in other comprehensive income
and is accumulated in equity. If the hedged item is related to transactions, the accumulated other comprehensive
income is reclassified to profit or loss when the hedged item affects the profit or loss. However, when non-
monetary items are subsequently recognized due to hedged items, the accumulated equity is removed from the
equity directly, and is included in the initial book value of the recognized non-monetary items. Such transfers
does not affect other comprehensive income. But if part or all of accumulated equity is not expected to be
recovered in the future periods, the amount not expected to be recovered is immediately reclassified to profit or
loss. If the hedged item is time-related, then the foreign currency basis spread on the day the derivative is
designated as a hedging instrument that is related to the hedged item is reclassified to profit or loss over the term
of the hedge.
3) Fair value hedge
Gain or loss arising from valid hedging instrument is recognized in profit or loss. However, when the hedging
instrument mitigates risks on equity instruments designated as financial assets at FVTOCI, related gain or loss is
recognized in other comprehensive income.
The book value of hedged items that are not measured in fair value is adjusted by the changes in fair value
arising from the hedged risk, with resulting gain or loss reflected in net income. In case of debt instruments
measured at FVTOCI, book value is an amount that is already adjusted to fair value and thus gain or loss arising
from the hedged risk is recognized in profit or loss instead of other comprehensive income without adjustments
in book value. When the hedged item is equity instruments measured at FVTOCI, the gain or loss arising from
hedged risk is retained at other comprehensive income in order to match the gain or loss with hedging
instruments.
Hedge accounting ceases to apply only when hedging relationship (or part of it) does not meet the requirements
of hedge accounting (even after hedging relationship readjustment, if applicable). This treatment holds in case of
lapse, disposal, expiry and exercise of hedging instruments, and this cease of treatment applies prospectively.
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The fair value adjustments made to book value of hedged item due to hedged risk is amortized from the date of
discontinuance of hedge accounting and is recognized in profit or loss.
4) Cash flow hedge
The Group recognizes the effective portion of changes in the fair value of derivatives and other valid hedging
instruments that are designated and qualified as cash flow hedges in other comprehensive income, to the extent
of cumulative fair value changes of the hedged item from the date of hedge accounting. 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 affects net income. However, when non-monetary assets or liabilities are
subsequently recognized due to expected transactions involving hedged items, the valuation gain or loss
accumulated in the equity as other comprehensive income is removed from the equity and included in the initial
book value of the recognized non-monetary assets or liabilities. Such transfers does not affect other
comprehensive income. Also if accumulated other comprehensive income is a loss and part or all of the losses
are not expected to be recovered in the future periods, the said amount is immediately reclassified to profit or
loss.
Hedge accounting ceases to apply only when hedging relationship (or part of it) does not meet the requirements
of hedge accounting (even after hedging relationship readjustment, if applicable). This treatment holds in case of
lapse, disposal, expiry and exercise of hedging instruments, and this cease of treatment applies prospectively. At
the point of cessation of cash flow hedge, the valuation gain or loss recognized as accumulated other
comprehensive income continues to be recognized as equity, and is reclassified to profit or loss when the
expected transaction is ultimately recognized as profit or loss. However, when transactions are no longer
expected to occur, the valuation gain or loss of hedging instrument recognized as accumulated other
comprehensive income is immediately reclassified to profit or loss.
(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
Provisions are recognized if (a) it has present or contractual obligations as a result of the past event, (b) it is
probable that an outflow of resources will be required to settle the obligation and (c) 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 membership points, 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. A financial liability is a contractual obligation to
deliver cash or another financial asset to another entity. An equity instrument is any contract that evidences a
residual interest in the assets of an entity after deducting all of its liabilities. The compound financial instruments
are financial instruments where it is neither a financial liability nor an equity instrument because it was designed
to contain both equity and debt elements.
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If the Group reacquires its own equity instruments, the consideration paid including the direct transaction costs
(net of tax expense) are presented as a deduction from total equity until such instruments are retired or reissued.
When these instruments are reissued, the consideration received (net of direct transaction costs) is included in the
shareholder’s equity.
(20) Financial guarantee contracts
A financial guarantee contract is a contract where the issuer must pay a certain amount of money in order to
compensate losses suffered by the creditor when debtor defaults on a debt instrument in accordance with original
or modified contractual terms.
A financial guarantee is initially measured at fair value and is subsequently measured at the higher of the
amounts below unless it is designated to be measured at FVTPL or when it arises from disposal of an asset.
- Loss allowance in accordance with K-IFRS 1109
- Initial book value less accumulated profit measured in accordance with K-IFRS 1115
(21) Employee benefits and pensions
The Group recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange
for the services rendered by the employees. Also, the Group recognizes expenses and liabilities in the case of
accumulating compensated absences when the employees render services that entitle their right to future
compensated absences. Similarly, the Group recognizes expenses and liabilities for customary profit distribution
or bonuses when the employees render services, even though the Group does not have legal obligation to do so
because it can be construed as constructive obligation.
The Group is operating defined contribution plans and defined benefit plans. Contributions to defined
contribution plans are recognized as an expense when employees have rendered services entitling them to
receive the benefits. For defined benefit plans, the defined benefit liability is calculated through an actuarial
assessment using the projected unit credit method every end of the reporting period, conducted by a professional
actuaries. Remeasurement, comprising actuarial gains and losses, the return on plan assets (excluding interest),
and the effect of the changes to the asset ceiling (if applicable) is reflected immediately in the separate statement
of financial position with a charge or credit recognized in other comprehensive income in the period in which
they occur.
Remeasurement recognized in the consolidated statement of comprehensive income is not reclassified to profit
or loss in the subsequent periods. 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 and 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
recognized as an asset 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) the date when the Group is no longer
able to cancel its proposal for termination benefits or 2) the date when the Group has recognized the cost of
restructuring that accompanies the payment of termination benefits.
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(22) Income taxes
Income tax expense is composed of current tax and deferred tax. That is, income tax expense is composed of
taxes payable or refundable during the period and deferred taxes calculated by applying asset-liability method to
taxable and deductible temporary differences arising from operating loss and tax credit carryforwards.
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 recognized for the change in
deferred tax assets or liabilities. Deferred tax assets and liabilities are measured as of the reporting date using the
enacted or substantively enacted tax rates expected to apply in the period in which the liability is settled or asset
realized. Deferred tax assets, including the carryforwards of unused tax losses, are recognized to the extent it is
probable that the deferred tax assets will be realized.
Deferred income tax assets and liabilities are offset if, and only if, the Group has a legally enforceable right to
offset current tax assets against current tax liabilities, and the deferred tax assets and liabilities relate to income
taxes levied by the same taxation authority or when the entity intends to settle current tax liabilities and assets on
a net basis with different taxable entities.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent 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 the initial recognition of 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 taxes are recognized in profit or loss, except when they relate to items that are recognized
in other comprehensive income or directly in equity or when it arises from business combination.
(23) Earnings per share (“EPS”)
Basic EPS is a calculation of net income per each common stock. It is calculated by dividing net income
attributable to ordinary shareholders by the weighted-average number of common shares outstanding. Diluted
EPS is calculated by adjusting the earnings and number of shares for the effects of all dilutive potential common
shares.
3.
SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS
The significant accounting estimates and assumptions are continuously being evaluated based on numerous
factors including historical experiences and expectations of future events considered to be reasonably possible.
Actual results can differ from those estimates based on such definitions. The accounting estimates and
assumptions that contain significant risk of materially changing current book values of assets and liabilities in
the next accounting periods are as follows:
(1) Income taxes
The Group has recognized current and deferred taxes based on best estimates of expected future income tax
effect arising from the Group’s operations until the end of the current reporting period. However, actual tax
payment may not be identical to the related assets and/or liabilities already recognized, and these differences
may affect current taxes and deferred tax assets/liabilities at the time when income tax effects are finalized.
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. In this case the Group’s evaluation
considers various factors such as estimated future taxable profit based on forecasted operating results, which are
based on historical financial performance. The Group is reviewing the book value of deferred tax assets every
end of the reporting period and in the event that the possibility of earning future taxable income changes, the
deferred tax assets are adjusted up to taxable income sufficient to use deductible temporary differences.
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(2) Valuation of financial instruments
Financial assets at FVTPL and FVTOCI are recognized in the consolidated financial statements at fair value. All
derivatives are measured at fair value. Valuation techniques are required in order to determine fair values of
financial instruments where observable market prices do not exist. Financial instruments that are not actively
traded and have low price transparency 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.
As described in Note 2-(9)-5), ‘Fair value of financial assets and liabilities’, when valuation techniques are used
to determine the fair value of a financial instrument, various general and internally developed techniques are
used, and various types of assumptions and variables are incorporated during the process.
(3) Impairment of financial instruments
K-IFRS 1109 requires entities to measure loss allowance equal to 12-month expected credit losses or lifetime
expected credit losses after classifying financial assets into one of the three stages, which depends on the degree
of increase in credit risk after their initial recognition.
Stage 1
Allowance for
expected credit
losses
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 a
12-month period from the year-end.
Stage 3
Stage 2
Credit risk has significantly
increased since initial
recognition
Expected lifetime credit losses:
Expected credit losses from all possible
defaults during the expected lifetime of the
financial instruments.
Credit has
been impaired
(*) Credit risk may be considered to not have been significantly increased when credit risk is low at year-end.
The Group has estimated the allowance for credit losses based on reasonable and supportable information that
was available without undue cost or effort at the reporting date about past events, current conditions and
forecasts of future economic conditions.
Probability of default (PD) and Loss given default (LGD) for each category of financial asset is being calculated
by considering factors such as debtor type, credit rating and portfolio. The estimates are regularly being
reviewed in order to reduce discrepancies with actual losses.
Also, in measuring the expected credit losses, the Group is using reasonable and supportable macroeconomic
indicators such as economic growth rates, interest rates, market index rates, etc., in order to forecast future
economic conditions.
The Group is conducting the following procedures to estimate and apply future economic forecast information.
- Development of prediction models by analyzing the correlation between default rates of corporate and retail
exposures per year and macroeconomic indicators
- Calculation of predicted default rate incorporating future economic forecasts by applying estimated
macroeconomic indicators provided by verified institutions such as Bank of Korea and National Assembly
Budget Office to the prediction model developed.
At the end of every reporting period, the Group evaluates whether credit risk reflected forward-looking
information has significantly been increased since the date of initial recognition. When evaluating whether credit
risk has significantly been increased, the changes in the probability of default over the financial instrument’s
remaining life is used instead of changes in the amount of expected credit losses. The Group performs the above
evaluation with distinctions made to corporate and retail exposures, and indicators of significant increase in
credit risk are as follows:
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Woori Bank annual report 2018We Believe in Your Potential - 39 -
Corporate Exposures
Asset quality level ‘Precautionary’ or lower
More than 30 days past due
‘Warning’ level in early warning system
Debtor experiencing financial difficulties
(Capital impairment, Adverse opinion or Disclaimer of
opinion by external auditors)
Significant decrease in credit rating(*)
Retail Exposures
Asset quality level ‘Precautionary’ or lower
More than 30 days past due
Significant decrease in credit rating(*)
(*) Determining whether there has been a significant decrease in the credit rating of corporate and retail exposures applies
only to credit ratings that are measured through 12-month expected credit loss. The Bank has applied the above indicators of
significant decrease in credit rating since initial recognition as follows, and the estimation method is regularly being
monitored.
Corporate
Retail
Credit rating
AAA ~ A+
A- ~ BBB
BBB- ~ BB+
BB ~ BB-
1 ~ 3
4 ~ 5
6 ~ 10
Significant increased indicator of the credit rating
More than 4 steps
More than 3 steps
More than 2 steps
More than 1 step
More than 3 steps
More than 2 steps
More than 1 step
The Group sees no significant increase in credit risk after initial recognition for debt securities, etc. with a credit
rating of A + or higher, which are deemed to have low credit risk at the end of the reporting period
The Group concludes that credit is impaired when financial assets are under conditions stated below:
- When principal of loan is overdue for 90 days or longer due to significant deterioration in credit
- For loans overdue for less than 90 days, when it is determined that not even a portion of the loan will be
recovered unless claim actions such as disposal of collaterals are taken
- When other objective indicators of impairment has been noted for the financial asset.
The Group determines which loan is subject to write-off in accordance with internal guidelines, and writes off
loan receivables when it is determined that the loans are practically irrecoverable. For example, loans are
practically irrecoverable when application is made for rehabilitation under the Debtor Rehabilitation and
Bankruptcy Act and loans are confirmed as irrecoverable by the court’s decision to waive debtor’s obligation, or
when it is impossible to recover the loan amount through legal means such as auctioning of debtor’s assets or
through any other means of recovery available. Notwithstanding the write-off, the Group may still exercise its
right of collection after the asset has been written off in accordance with its collection policies.
(4) Defined benefit plan
The Group operates a defined benefit pension plan. Defined benefit obligation is calculated at every end of the
reporting period by performing actuarial valuation, and estimation of assumptions such as discount rate,
expected wage growth rate and mortality rate is required to perform such actuarial valuation. The defined benefit
plan, due to its long-term nature, contains significant uncertainties in its estimates.
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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 allocation of risk
capital 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 goal of credit risk management is to maintain the Group’s credit risk exposure to a
permissible degree and to optimize its rate of return considering such credit risk.
1) Credit risk management
The Group considers the probability of failure in performing the obligation of its counterparties, credit
exposure to the counterparty, the related default risk and the rate of default loss. The Group uses the credit
rating model to assess the possibility of counterparty’s default risk; and when assessing the obligor’s credit
grade, the Group utilizes credit grades derived using statistical methods.
In order to manage credit risk limit, the Group establishes the appropriate credit line per obligor, company
or industry. It monitors obligor’s credit line, total exposures and loan portfolios when approving the loan.
The Group mitigates credit risk resulting from the obligor’s credit condition by using financial and physical
collateral, guarantees, netting agreements and credit derivatives. The Group has adopted the entrapment
method to mitigate its credit risk. Credit risk mitigation is reflected in qualifying financial collateral, trade
receivables, guarantees, residential and commercial real estate and other collaterals. The Group regularly
performs a revaluation of collateral reflecting such credit risk mitigation.
2) Maximum exposure to credit risk
The Group’s maximum exposure to credit risk refers to net book value of financial assets net of allowances,
which shows the uncertainties of maximum changes of net value of financial assets attributable to a
particular risk without considering collateral and other credit enhancements obtained. However, the
maximum exposure is the fair value amount (recorded on the books) for derivatives, maximum contractual
obligation for payment guarantees and unused loan commitment.
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The maximum exposure to credit risk is as follows (Unit: Korean Won in millions):
December 31, 2018
December 31, 2017
Loans and other
Korean treasury and government
financial assets at
amortized cost
agencies
Banks
Corporates
Consumers
Loans and
receivables
Financial assets at
FVTPL
(K-IFRS 1109)
Sub-total
Korean treasury and government
agencies
Banks
Corporates
Consumers
Sub-total
Deposit
Debt securities
Loans
Derivative assets
Sub-total
Financial assets at
FVTPL
(K-IFRS 1039)
Deposit
Debt securities
Financial assets designated at
FVTPL
Derivative assets
Sub-total
Financial assets at
Debt securities
FVTOCI
AFS financial
assets
Securities at
amortized cost
HTM financial
assets
Debt securities
Debt securities
Debt securities
Derivative assets
Derivative assets (Designated for
Off-balance
accounts
hedging)
Guarantees
Unused loan commitments
Sub-total
Total
13,547,154
22,282,857
96,619,393
149,998,911
282,448,315
-
-
-
-
-
26,935
1,824,155
385,450
2,026,079
4,262,619
-
-
-
-
-
17,112,249
-
-
-
-
-
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
22,932,559
-
-
16,749,296
35,503
12,666,417
97,796,704
110,463,121
437,254,366
59,272
12,859,715
80,760,325
93,620,040
396,559,830
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Woori Bank annual report 2018We Believe in Your Potential - 42 -
a) Credit risk exposure by geographical areas
The following tables analyze credit risk exposure by geographical areas (Unit: Korean Won in millions):
Korea
China
December 31, 2018
UK
Japan
USA
Others (*)
Total
Loans and other financial assets
at amortized cost
Securities at amortized cost
Financial assets at FVTPL
Financial assets at FVTOCI
Derivative assets (Designated
for hedging)
Off-balance accounts
Total
261,538,144
22,757,048
4,261,110
15,697,518
4,592,153
-
1,243
261,085
4,597,119
70,578
-
103,755
1,526,532
-
-
24,960
893,354
-
266
2,247
9,301,013
104,933
-
1,022,684
282,448,315
22,932,559
4,262,619
17,112,249
35,503
107,632,858
411,922,181
-
801,978
5,656,459
-
343,323
5,114,775
-
136,727
1,688,219
-
35,000
930,867
-
1,513,235
11,941,865
35,503
110,463,121
437,254,366
Loans and receivables
Financial assets at FVTPL
AFS debt securities
HTM securities
Derivative assets (Designated
for hedging)
Off-balance accounts
Total
Korea
250,678,479
5,551,870
12,407,602
16,606,692
China
4,104,912
2,937
52,259
-
December 31, 2017
UK
1,094,988
148,955
-
-
USA
2,823,247
-
151,131
63,732
Japan
381,890
-
-
-
Others (*)
8,022,688
92,012
618,252
78,872
Total
267,106,204
5,795,774
13,229,244
16,749,296
16,590
91,603,852
376,865,085
-
529,193
4,689,301
-
172,570
3,210,680
42,682
66,974
1,353,599
-
25,039
406,929
-
1,222,412
10,034,236
59,272
93,620,040
396,559,830
(*) Others consist of financial assets in Indonesia, Hong Kong, Singapore, and other countries.
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):
Loans and other financial assets
at amortized cost
Securities at amortized cost
Financial assets at FVTPL
Financial assets at FVTOCI
Derivative assets (Designated
for hedging)
Off-balance accounts
Total
December 31, 2018
Service
Manufacturing
48,316,081
1,157,512
120,659
382,409
-
17,645,104
67,621,765
34,967,700
-
153,159
109,749
-
22,300,388
57,530,996
Finance and
insurance
40,337,838
13,414,743
3,117,845
13,017,646
35,503
9,654,685
79,578,260
Construction
Individuals
Others
Total
3,295,967
527,847
16,118
224,665
-
4,146,708
8,211,305
145,715,074
-
7,614
5,535
-
49,948,865
195,677,088
9,815,655
7,832,457
847,224
3,372,245
282,448,315
22,932,559
4,262,619
17,112,249
-
6,767,371
28,634,952
35,503
110,463,121
437,254,366
Loans and receivables
Financial assets at FVTPL
AFS debt securities
HTM securities
Derivative assets (Designated
for hedging)
Off-balance accounts
Total
December 31, 2017
Service
Manufacturing
47,192,641
100,766
707,737
1,348,754
-
16,892,926
66,242,824
34,502,509
83,239
37,719
-
-
21,427,378
56,050,845
Finance and
insurance
38,260,051
4,640,068
7,331,774
10,962,149
59,272
9,841,379
71,094,693
Construction
Individuals
Others
Total
3,574,746
15,073
153,534
296,214
-
3,842,479
7,882,046
133,094,287
1,040
-
-
-
36,928,554
170,023,881
10,481,970
955,588
4,998,480
4,142,179
-
4,687,324
25,265,541
267,106,204
5,795,774
13,229,244
16,749,296
59,272
93,620,040
396,559,830
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Woori Bank annual report 2018We Believe in Your Potential - 43 -
3) Credit risk exposure
a) Financial assets
The maximum exposure to credit risk by asset quality, except for financial assets at FVTPL and derivative
asset (Designated for hedging) is as follows (Unit: Korean Won in millions):
December 31, 2018
Stage 1
Stage 2
Above
appropriate
credit rating
(*1)
Less than a
limited
credit rating
(*3)
Above
appropriate
credit
rating (*2)
Less than a
limited credit
rating
(*3)
Stage 3
Total
Loss
allowance
Total, net
252,911,704
17,624,416
6,330,382
5,739,850
1,693,148
284,299,500
(1,851,185)
282,448,315
13,549,305
22,162,966
77,152,005
43,165,455
1,009
105,583
15,550,301
6,474,057
1
27,777
655,907
526,303
-
-
3,424,215
1,723,704
-
14,307
1,034,030
716,722
13,550,315
22,310,633
97,816,458
52,606,241
(3,161)
(27,776)
(1,197,065)
(816,783)
13,547,154
22,282,857
96,619,393
51,789,458
29,510,917
8,527,542
107,998
1,547,761
277,825
39,972,043
(335,469)
39,636,574
4,475,633
140,047,428
548,702
1,967,523
21,606
5,646,697
152,750
2,315,635
39,483
644,811
5,238,174
150,622,094
(44,813)
(623,183)
5,193,361
149,998,911
22,939,039
-
195
-
250
22,939,484
(6,925)
22,932,559
16,940,654
292,791,397
146,443
17,770,859
25,153
6,355,730
-
5,739,850
-
1,693,398
17,112,250
324,351,234
(6,177)
(1,864,287)
17,112,250
322,493,124
Loans and other financial
assets at amortized cost
Korean treasury and
government agencies
Banks
Corporates
General business
Small- and medium-
sized enterprise
Project financing and
others
Consumers
Securities
at amortized cost
Financial assets at FVTOCI
(*4)
Total
Loans and other financial assets at amortized cost
Korean treasury and government agencies
Banks
Corporates
General business
Small- and medium-sized enterprise
Project financing and others
Consumers
Securities
at amortized cost
Financial assets at FVTOCI (*4)
Total
December 31, 2018
Collateral value
Stage2
8,836,440
-
3,334
2,509,620
1,167,993
1,291,222
50,405
6,323,486
-
-
8,836,440
Stage3
698,593
-
-
426,325
241,651
184,674
-
272,268
-
-
698,593
Total
172,864,138
11,600
364,358
54,531,894
21,317,592
31,256,612
1,957,690
117,956,286
-
-
172,864,138
Stage1
163,329,105
11,600
361,024
51,595,949
19,907,948
29,780,716
1,907,285
111,360,532
-
-
163,329,105
(*1) Credit grade of corporates are AAA ~ BBB, and consumers are grades 1 ~ 6.
(*2) Credit grade of corporates are A- ~ BBB, and consumers are grades 1 ~ 6.
(*3) Credit grade of corporates are BBB- ~ C, and consumers are grades 7 ~ 10.
(*4) Financial assets at FVTOCI has been disclosed as the amount before deducting loss allowance because loss allowance
does not reduce the carrying amount.
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Woori Bank annual report 2018We Believe in Your Potential - 44 -
-
Loans and receivables
December 31, 2017
Corporates
Korean
treasury and
government
agencies
Banks
General
business
Small and
medium sized
enterprise
Project
financing
and others
Sub-total
Consumers
Total
Neither overdue nor
impaired
Overdue but not
impaired
Impaired
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
1,402,131
63,067
251,431
-
128,683
46,717
1,700,279
878,406
537,001
1,007,097
2,237,280
Total
8,825,775
26,861,286
51,930,859
34,422,045
5,594,667
91,947,571
141,301,814
268,936,446
Loss allowance
Total, net
2,191
8,823,584
15,977
26,845,309
1,078,733
50,852,126
267,162
34,154,883
31,125
5,563,542
1,377,020
90,570,551
435,054
140,866,760
1,830,242
267,106,204
-
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
Total
27,389,115
3,998,037
1,164,981
80,434
32,632,567
AAA
AA- ~ AA+
BBB- ~ A+
Below BBB-
Total
(*) Financial assets at FVTPL comprise debt securities held for trading and financial assets designated at FVTPL.
b) Guarantees and loan commitments
The credit quality of the guarantees and loan commitments as of December 31, 2018 as follows (Unit:
Korean Won in millions):
Stage 1
December 31, 2018
Stage 2
Above
appropriate
credit rating
(*1)
Less than a
limited credit
rating
(*3)
Above
appropriate
credit rating
(*2)
Less than a
limited credit
rating
(*3)
Stage3
Total
11,212,772
1,063,551
7,147
261,599
121,348
12,666,417
91,734,567
102,947,339
3,632,586
4,696,137
1,529,330
1,536,477
880,518
1,142,117
19,703
141,051
97,796,704
110,463,121
Financial assets
Off-balance accounts
Guarantees
Loan
commitments
Total
(*1) Credit grade of corporates are AAA ~ BBB, and consumers are grades 1 ~ 6.
(*2) Credit grade of corporates are A- ~ BBB, and consumers are grades 1 ~ 6.
(*3) Credit grade of corporate are BBB- ~ C, and consumers are grades 7 ~ 10.
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Woori Bank annual report 2018We Believe in Your Potential - 45 -
4) Collateral and other credit enhancements
During the current quarter, there have been no significant changes in the value of collateral or other credit
enhancements held by the Group and there have been no significant changes in collateral or other credit
enhancements due to changes in the collateral policy of the Group. As of December 31, 2018, there are no
financial assets that do not recognize the allowance for losses just because financial assets have collateral.
5) For the financial assets that record loss allowance as total expected credit loss, the amortized cost before the
change in contractual cash flows is 23,132 million won, and the net loss due to the change is 239 million won.
6) As the Group manages receivables that have not lost the right of claim to the debtor for the grounds of
incomplete statute limitation and uncollected receivables under the related laws as receivable charge-offs, the
balance as of December 31, 2018 is 9,578,796 million won.
(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% confidence level. 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 Portfolio 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.
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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.
a) Trading activities
The minimum, maximum and average VaR for the year ended December 31, 2018 and 2017, respectively,
and the VaR as of December 31, 2018 and 2017, respectively, are as follows (Unit: Korean Won in
millions):
Risk factor
Interest rate
Stock price
Foreign currencies
Commodity price
Diversification
Total VaR(*)
December
31, 2018
3,107
2,353
4,972
-
(4,445)
5,987
For the year ended
December 31, 2018
Average Maximum Minimum
1,730
1,138
3,439
-
(1,815)
4,492
5,528
5,081
6,136
24
(8,155)
8,614
3,702
2,669
4,678
3
(4,869)
6,183
December
31, 2017
4,183
909
4,750
-
(4,472)
5,370
For the year ended
December 31, 2017
Average Maximum Minimum
2,467
909
4,061
-
(2,067)
5,370
4,918
4,419
6,636
188
(6,798)
9,363
3,799
2,863
5,051
31
(4,621)
7,123
(*)VaR (Value at Risk): Maximum expected losses
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):
December 31, 2018
December 31, 2017
NII(*1)
NPV(*2)
NII(*1)
NPV(*2)
4,895,332
4,887,799
5,575,470
4,329,543
6,603,132
3,508,859
7,560,155
3,352,267
24,636,678
24,225,946
24,415,761
24,907,344
24,232,738
25,245,667
24,079,415
25,680,084
4,916,138
4,916,015
5,361,546
4,386,437
5,806,723
3,452,590
6,251,897
2,254,609
23,472,792
23,163,942
22,886,122
24,127,559
22,372,208
24,830,482
21,929,189
26,633,807
Base case
Base case (Prepay)
IR 100bp up
IR 100bp down
IR 200bp up
IR 200bp down
IR 300bp up
IR 300bp down
(*1) NII: Net Interest Income
(*2) NPV: Net Portfolio Value
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, 2018
December 31, 2017
EaR (*1)
VaR (*2)
EaR (*1)
VaR (*2)
248,364
141,484
255,679
130,821
(*1) EaR(Earning at Risk): Change of Maximum expected income and expense
(*2) VaR(Value at Risk): Maximum expected losses
166
Woori Bank annual report 2018We Believe in Your Potential
- 47 -
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), 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, 2018
10 to 12
months
7 to 9
months
1 to 5
years
Over 5 years
Total
Asset:
Loans and other
financial assets at
amortized cost
Financial assets at
FVTPL
Financial assets at
FVTOCI
Securities at
159,893,080
45,387,214
8,878,060
9,903,959
46,459,450
4,201,379
274,723,142
371,984
32,278
24,951
64,838
145,121
27,536
666,708
2,579,442
1,775,435
1,486,953
2,223,494
9,289,742
185,320
17,540,386
amortized cost
Total
2,449,416
165,293,922
2,251,180
49,446,107
1,735,698
12,125,662
1,946,948
14,139,239
15,177,608
71,071,921
402,671
4,816,906
23,963,521
316,893,757
Liability:
Deposits due to
customers
Borrowings
Debentures
Total
Asset:
Loans and
receivables
AFS financial assets
HTM financial assets
Total
Liability:
Deposits due to
customers
Borrowings
Debentures
Total
100,232,916
9,971,680
2,143,916
112,348,512
44,207,416
1,924,390
2,416,483
48,548,289
29,419,951
670,404
2,201,070
32,291,425
35,427,657
518,167
2,584,230
38,530,054
40,130,055
2,723,156
18,955,400
61,808,611
72,276
626,364
2,403,077
3,101,717
249,490,271
16,434,161
30,704,176
296,628,608
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
161,653,892
2,150,708
2,286,179
166,090,779
41,671,530
2,500,103
2,161,467
46,333,100
7,614,159
2,016,711
1,433,425
11,064,295
6,411,841
2,367,762
1,687,362
10,466,965
54,150,998
4,229,000
9,369,794
67,749,792
26,272,958
601,735
345,868
27,220,561
297,775,378
13,866,019
17,284,095
328,925,492
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
479,827
2,869,766
3,440,839
234,879,069
14,961,062
29,819,856
279,659,987
167
Woori Bank annual report 2018We Believe in Your Potential - 48 -
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):
USD
JPY
December 31, 2018
CNY
EUR
Foreign
currency
Korean
Won
equivalent
Foreign
currency
Korean
Won
equivalent
Foreign
currency
Korean
Won
equivalent
Foreign
currency
Korean
Won
equivalent
Others
Korean
Won
equivalent
Total
Korean Won
equivalent
20,406 22,816,027
167,419
1,696,255
29,880
4,863,230
1,994
2,550,147
4,742,340
36,667,999
74
82,197
1,425
14,434
-
-
1,472
1,645,595
-
-
1,604
261,085
59
-
75,169
79,584
251,384
-
729,581
2,636,261
52
58,489
22,004 24,602,308
-
168,844
-
1,710,689
-
31,484
-
5,124,315
-
2,053
-
2,625,316
175,552
5,727,057
234,041
39,789,685
118
131,927
1,956
19,815
-
-
11,159 12,477,154
7,386,616
4,075,084
6,606
3,645
169,770
3,834
-
1,720,072
38,847
-
23,967
381
-
3,900,923
61,947
-
55
887
286
-
70,250
121,658
343,650
1,135,149
365,585
-
4,392,936
505,541
285,339
23,626,234
8,358,536
4,360,423
2,522
2,820,290
24,050 26,891,071
28,955
204,515
293,362
2,072,096
1,818
26,166
295,919
4,258,789
193
1,421
246,584
1,817,568
18,527
5,324,001
3,674,682
40,363,525
Asset
Loans and other
financial assets
at amortized cost
Financial assets at
FVTPL
Financial assets at
FVTOCI
Securities at
amortized cost
Total
Liability
Financial
liabilities at
FVTPL
Deposits due to
customers
Borrowings
Debentures
Other financial
liabilities
Total
Off-balance accounts
7,453
8,333,153
33,347
337,868
1,557
253,366
474
606,714
823,655
10,354,756
USD
JPY
December 31, 2017
CNY
EUR
Foreign
currency
Korean
Won
equivalent
Foreign
currency
Korean
Won
equivalent
Foreign
currency
Korean
Won
equivalent
Foreign
currency
Korean
Won
equivalent
Others
Korean
Won
equivalent
Total
Korean
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
34,303
1,966
2,105,972
25
-
238
-
-
-
319
52,259
27
-
34,583
104,892
174,016
590
302,801
2,461,622
111
25,109
118,868
26,902,043
-
126,969
-
1,205,081
-
25,543
-
4,180,195
-
1,183
-
1,514,524
78,175
4,423,601
197,043
38,225,444
41
43,423
79
752
-
-
13,744
6,604
3,467
14,725,686
7,080,118
3,714,411
195,176
2,218
-
1,852,440
21,056
-
21,865
-
700
3,578,142
-
114,555
19
883
247
-
24,878
69,977
139,030
1,129,802
315,685
-
2,396,826
242,874
375,749
23,682,896
7,659,733
4,204,715
2,392
26,248
2,562,740
28,126,378
16,125
213,598
153,043
2,027,291
1,802
24,367
294,950
3,987,647
129
1,278
165,189
1,635,554
588,625
3,647,051
3,764,547
39,450,921
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
Off-balance accounts
8,108
8,687,009
33,624
319,127
1,199
196,261
406
519,843
176,886
9,899,126
168
Woori Bank annual report 2018We Believe in Your Potential
- 49 -
(3)
Liquidity risk
Liquidity risk refers to the risk that the Group may encounter difficulties in meeting obligations from its
financial liabilities.
1) Liquidity risk management
Liquidity risk management is to prevent potential cash shortages as a result of mismatching the use of funds
(assets) and sources of funds (liabilities) or unexpected cash outflows. The financial liabilities that are
relevant to liquidity risk are incorporated within the scope of risk management. Derivatives instruments are
excluded from those financial liabilities as they reflect expected cash flows for a pre-determined period.
Assets and liabilities are grouped by account under Asset Liability Management (“ALM”) in accordance
with the characteristics of the account. The Group manages liquidity risk by identifying 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, 2018
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
191,825
-
145,187,689 33,825,662
2,846,294
2,416,483
44,572
168,137,287 39,133,011
6,373,835
2,143,916
14,240,022
-
22,186,833
1,874,069
2,201,070
169,996
26,431,968
-
42,046,740
1,607,985
2,584,230
1,201
46,240,156
-
7,098,907
3,156,128
18,955,400
90,615
29,301,050
-
191,825
1,870,334 252,216,165
16,500,328
642,017
30,704,176
2,403,077
2,288,560
16,834,966
7,203,988 316,447,460
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
168,442
155,984
148,008,777 29,563,310
1,893,173
2,452,565
162,871
163,369,548 34,227,903
6,115,732
1,955,255
7,121,342
1,717
18,175,348
1,489,272
1,018,714
825
20,685,876
512
32,468,110
1,178,107
1,744,731
1,003
35,392,463
375
7,409,118
3,924,681
19,770,380
128,940
31,233,494
-
327,030
2,624,594 238,249,257
15,080,533
479,568
29,811,344
2,869,699
2,730,001
10,144,982
8,703,862 293,613,146
169
Woori Bank annual report 2018We Believe in Your Potential - 50 -
b) Cash flows of principals and interests by expected maturities of non-derivative financial liabilities are as
follows (Unit: Korean Won in millions):
Financial liabilities at
FVTPL
Deposits due to customers
Borrowings
Debentures
Other financial liabilities
Total
Financial liabilities at
FVTPL
Deposits due to customers
Borrowings
Debentures
Other financial liabilities
Total
Within 3
months
4 to 6
months
December 31, 2018
10 to 12
months
7 to 9
months
1 to 5
years
Over 5
years
Total
191,825
163,787,990
6,373,835
2,143,916
14,240,022
186,737,588
-
-
38,126,886 20,993,436
1,874,069
2,846,294
2,201,070
2,416,483
169,996
44,572
43,434,235 25,238,571
-
23,262,092
1,607,985
2,584,230
1,201
27,455,508
-
5,230,533
3,156,128
18,955,400
90,615
27,432,676
-
17,649
642,017
2,403,077
2,288,560
5,351,303
191,825
251,418,586
16,500,328
30,704,176
16,834,966
315,649,881
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
168,442
159,146,602
6,115,732
1,955,255
7,121,342
174,507,373
155,984
1,717
31,298,562 16,667,130
1,489,272
1,893,173
1,018,714
2,452,565
825
162,871
35,963,155 19,177,658
512
21,995,294
1,178,107
1,744,731
1,003
24,919,647
375
6,487,047
3,924,681
19,770,380
128,940
30,311,423
-
2,278,756
479,568
2,869,699
2,730,001
8,358,024
327,030
237,873,391
15,080,533
29,811,344
10,144,982
293,237,280
3) Maturity analysis of derivative financial liabilities
Derivatives held for trading purpose are not managed in accordance with their contractual maturity, since
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. Derivatives
designated for hedging purpose are estimated by offsetting cash inflows and cash outflows.
The cash flow by the maturity of derivative financial liabilities as of December 31, 2018 and 2017 is as
follows (Unit: Korean Won in millions):
December 31, 2018
December 31, 2017
Within 3
months
2,090,861
3,150,149
4 to 6
months
816
-
Remaining maturity
10 to 12
months
7 to 9
months
-
-
-
381
1 to 5
years
50,592
67,373
Over 5
years
Total
2,142,269
3,217,903
-
-
4) Maturity analysis of off-balance accounts (Guarantees and loan commitments)
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.
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, unused loan commitments, and other
guarantees, however, under the terms of the guarantees and unused 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, 2018
December 31, 2017
12,666,417
97,796,704
12,859,715
80,760,325
170
Woori Bank annual report 2018We Believe in Your Potential - 51 -
(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 (“AMA”) 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 AMA using internal and external loss
data, business environment and internal control factors, and scenario analysis. 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 standard is based on Basel published by Basel Ⅲ Committee on Banking Supervision in Bank
for International Settlement in 2010 and was implemented in Korea in 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:
Common Equity Tier 1 capital ratio of 7.13% and 6.25%, a Tier 1 capital ratio of 8.63% and 7.75% and a
minimum total capital ratio of 10.63% and 9.75% as of December 31, 2018 and December 31, 2017,
respectively.
Details of the Group’s capital adequacy ratio as of December 31, 2018 and 2017 are as follows (Unit: Korean
Won in millions):
December 31, 2018
December 31, 2017
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
17,275,539
3,147,680
3,827,573
24,250,792
142,626,069
2,372,451
9,972,430
154,970,950
11.15%
13.18%
15.65%
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%
171
Woori Bank annual report 2018We Believe in Your Potential
- 52 -
5. OPERATING SEGMENTS
In evaluating the results of the Group and allocating resources, the Group’s Chief Operation Decision Maker
(“CODM”) utilizes the information per type of customers. This financial information of the segments is regularly
reviewed by the CODM to make decisions about resources to be allocated to each segment and evaluate its
performance.
(1) Segment by 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(expense)
Interest income
Interest expense
Inter-segment
Net non-interest
Income(expense)
Non-interest income
Non-interest expense
Inter-segment
Other income(expense)
General and
administrative
expense
Reversal of allowance
for credit loss and
impairment losses
due to credit loss
Operating
income(expenses)
Non-operating
income(expenses)
Net income(expense)
before income tax
expense
Income tax expense
Net income(expense)
Consumer
banking
Corporate
banking
Investment
banking
For the year ended December 31, 2018
Headquarters
Capital
and others
market
Credit cards
Sub-total
Adjust-
ments(*)
Total
3,529,645
(1,021,639)
(634,110)
1,873,896
3,409,835
(2,168,000)
833,224
2,075,059
152,273
(150)
(163,962)
(11,839)
8,945
-
25,963
34,908
670,240
(160,642)
-
509,598
1,605,696
(983,547)
(61,115)
561,034
9,376,634
(4,333,978)
-
5,042,656
307,865
300,430
-
608,295
9,684,499
(4,033,548)
-
5,650,951
678,360
(143,704)
132,690
667,346
721,096
(290,347)
70,016
500,765
230,357
(53,671)
-
176,686
7,020,740
(6,964,671)
-
56,069
665,534
(620,687)
-
44,847
1,214,380
(550,919)
(202,706)
460,755
10,530,467
(8,623,999)
-
1,906,468
(8,463,129)
7,618,618
-
(844,511)
2,067,338
(1,005,381)
-
1,061,957
(1,865,933)
(868,608)
(14,318)
(18,452)
(170,765)
(967,923)
(3,905,999)
281,966
(3,624,033)
(127,220)
(1,993,153)
(61,064)
(929,672)
62,454
48,136
(16,861)
(35,313)
(227,144)
(397,909)
102,574
(865,349)
(267,261)
(4,173,260)
(62,313)
219,653
(329,574)
(3,953,607)
548,089
1,646,152
212,983
55,664
156,536
156,440
2,775,864
(16,563)
2,759,301
(20,208)
899
32,738
-
(5,547)
56,829
64,711
(19,140)
45,571
527,881
(145,167)
382,714
1,647,051
(445,619)
1,201,432
245,721
(67,573)
178,148
55,664
(15,308)
40,356
150,989
(36,222)
114,767
213,269
(41,088)
172,181
2,840,575
(750,977)
2,089,598
(35,703)
(2,246)
(37,949)
2,804,872
(753,223)
2,051,649
(*) These adjustments are performed in order to present intersegment profit or loss adjustments based on managerial
accounting as profit or loss in accordance with K-IFRS.
172
Woori Bank annual report 2018We Believe in Your Potential - 53 -
Consumer
banking
Corporate
banking
Investment
banking
For the year ended December 31, 2017
Headquarters
Capital
and others
market
Credit cards
3,149,625
(955,836)
(490,850)
1,702,939
2,964,813
(1,681,652)
512,216
1,795,377
148,500
(243)
(136,133)
12,124
18,834
-
18,049
36,883
599,550
(135,947)
-
463,603
1,360,734
(834,662)
96,718
622,790
Sub-total
8,242,056
(3,608,340)
-
4,633,716
Adjust-
ments(*)
Total
308,631
278,303
-
586,934
8,550,687
(3,330,037)
-
5,220,650
802,387
(253,961)
101,524
649,950
680,778
(170,268)
60,826
571,336
366,523
(214,355)
-
152,168
9,548,399
(9,478,728)
-
69,671
1,163,575
(1,090,038)
-
73,537
2,683,407
(2,132,053)
(162,350)
389,004
15,245,069
(13,339,403)
-
1,905,666
(12,858,172)
12,204,532
-
(653,640)
2,386,897
(1,134,871)
-
1,252,026
(1,808,974)
(832,429)
(12,881)
(16,567)
(163,536)
(954,238)
(3,788,625)
257,824
(3,530,801)
(97,587)
(1,906,561)
(316,859)
(1,149,288)
(50,954)
(63,835)
31,229
14,662
(235,116)
(398,652)
14,832
(939,406)
(654,455)
(4,443,080)
(130,678)
127,146
(785,133)
(4,315,934)
446,328
1,217,425
100,457
121,216
138,488
72,388
2,096,302
60,440
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
Net Interest income
Interest income
Interest expense
Inter-segment
Net non-interest
Income(expense)
Non-interest income
Non-interest expense
Inter-segment
Other income(expense)
General and
administrative
expense
Reversal of allowance
for credit loss and
impairment losses
due to credit loss
Operating income
Non-operating
income(expense)
Net income before
income tax expense
Income tax expense
Net income(expense)
(*) These adjustments are performed in order to present intersegment profit or loss adjustments based on managerial
accounting as profit or loss in accordance with K-IFRS.
(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
Of the Group’s revenue (interest income and non-interest income) from services, revenue from the domestic
customers for the years ended December 31, 2018 and 2017 amounted to 10,440,668 million Won and 9,817,327
million Won, respectively, and revenue from the foreign customers amounted to 1,311,169 million Won and
1,120,257 million Won, respectively. Of the Group’s non-current assets (investments in joint ventures and
associates, investment properties, premises and equipment and intangible assets), non-current assets attributed to
domestic subsidiaries as of December 31, 2018 and 2017 are 3,531,842 million Won and 3,550,764 million
Won, respectively, and foreign subsidiaries are 236,050 million Won and 233,732 million Won, respectively.
(4)
Information about major customers
The Group does not have any single customer that generates 10% or more of the Group’s total revenue.
173
Woori Bank annual report 2018We Believe in Your Potential - 54 -
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, 2018
2,107,850
725,083
3,512,216
367,474
6,712,623
December 31, 2017
2,009,363
617,155
3,423,355
858,413
6,908,286
(2) Significant transactions of investing activities and financing activities not involving cash inflows and
outflows are as follows (Unit: Korean Won in millions):
For the years ended December 31
2017
2018
Changes in other comprehensive income related to
valuation of financial assets at FVTOCI
Changes in other comprehensive income related to
available-for-sale securities
Changes in other comprehensive income related to
valuation of equity method investments
Changes in other comprehensive income related to
valuation gain or loss on cash flow hedge
Changes in financial assets at FVTOCI as a result of
debt-equity swap
Changes in investments in associates
due to debt-equity swap
Changes in investments in associates
due to accounts transfer
Changes in unpaid dividends on hybrid equity
securities
Changes in equity related to assets held for
distribution (sale)
Classified to assets held for distribution (sale)
from premises and equipment
Classified to assets held for distribution (sale) from
deferred tax assets
2,505
-
2,958
(4,646)
14,378
-
(89,151)
3,569
(17,342)
15,594
9,778
-
(84,498)
612
777
-
51,227
(62,571)
(10,658)
4,145
-
-
174
Woori Bank annual report 2018We Believe in Your Potential
- 55 -
(3) Adjustments of liabilities from financing activities in current year are as follows (Unit: Korean Won in
millions):
For the year ended December 31, 2018
Borrowings
Debentures
Total
January
1,2018
14,784,706
27,869,651
42,654,357
Cash flow
1,257,121
602,331
1,859,452
Foreign
Exchange
161,078
267,339
428,417
Not involving cash inflows and outflows
Variation of
gains on
valuation of
hedged
items
Others
-
(25,498)
(25,498)
81
12,039
12,120
Borrowings
Debentures
Total
January
1,2017
18,769,515
23,565,449
42,334,964
Cash flow
(3,634,883)
4,817,701
1,182,818
Foreign
Exchange
(350,429)
(478,249)
(828,678)
For the year ended December 31, 2017
Not involving cash inflows and outflows
Variation of
gains on
valuation of
hedged
items
Others
-
(39,373)
(39,373)
503
4,123
4,626
December
31,2018
16,202,986
28,725,862
44,928,848
December
31,2017
14,784,706
27,869,651
42,654,357
7. FINANCIAL ASSETS AT FVTPL
(1) Financial assets at FVTPL are as follows (Unit: Korean Won in millions):
Financial assets at fair value through profit or loss mandatorily
measured at fair value
Financial assets held for trading
Financial assets designated at FVTPL
Total
December 31, 2018
December 31, 2017
6,126,183
-
-
6,126,183
-
5,820,787
22,290
5,843,077
(2) Financial assets at fair value through profit or loss mandatorily measured at fair value and financial assets
held for trading are as follows (Unit: Korean Won in millions):
Deposits:
Gold banking asset
Securities:
Debt securities
Korean treasury and government agencies
Financial institutions
Corporates
Equity securities
Capital contributions
Beneficiary certificates
Loans
Derivatives assets
Sub-total
Total
December 31, 2018
December 31, 2017
26,935
25,972
516,173
533,393
774,589
455,666
422,481
985,417
3,687,719
385,450
2,026,079
6,126,183
540,438
1,476,498
627,397
21,666
-
13,041
2,679,040
-
3,115,775
5,820,787
175
Woori Bank annual report 2018We Believe in Your Potential - 56 -
(3) Financial assets at fair value through profit or loss designated as upon initial recognition is nil as of
December 31, 2018 and financial assets at fair value through profit or loss designated as upon initial
recognition as of December 31, 2017 is as follows (Unit: Korean Won in millions):
Debt securities
Equity securities
Total
December 31, 2017
9,694
12,596
22,290
8. FINANCIAL ASSETS AT FVTOCI AND AFS FINANCIAL ASSETS
(1) Details of financial assets at FVTOCI as of December 31, 2018 is as follows (Unit: Korean Won in
millions):
Debt securities:
Korean treasury and government agencies
Financial institutions
Corporates
Bond denominated in foreign currencies
Equity securities
Securities loaned
Sub-total
Total
December 31, 2018
1,358,378
11,252,790
1,824,843
2,636,209
17,072,220
951,174
40,029
18,063,423
(2) Details of equity securities designated as financial assets at FVTOCI are as follows (Unit: Korean Won
in millions):
Purpose of acquisition
Strategic business partnership
Debt-equity swap
Others (Cooperative insurance, etc.)
Total
December 31, 2018
Fair value
662,934
287,990
250
951,174
(3) Changes in the loss allowance and gross carrying amount of financial assets at FVTOCI are as follows
(Unit: Korean Won in millions):
1) Loss allowance
For the year ended December 31, 2018
Stage 1
Stage 2
Stage 3
Total
Beginning balance (*1)
Transfer to 12-month expected credit losses
Transfer to lifetime expected credit losses
Transfer to credit-impaired financial assets
Net provision of loss allowance
Others (*2)
Ending balance
(4,107)
-
-
-
(1,918)
86
(5,939)
(129)
-
-
-
(109)
-
(238)
-
-
-
-
-
-
-
(4,236)
-
-
-
(2,027)
86
(6,177)
(*1) The beginning balance was restated in accordance with K-IFRS 1109.
(*2) Others consist of foreign currencies translation, etc.
176
Woori Bank annual report 2018We Believe in Your Potential - 57 -
2) Gross carrying amount
For the year ended December 31, 2018
Beginning balance
Transfer to 12-month expected credit losses
Transfer to lifetime expected credit losses
Transfer to credit-impaired financial assets
Acquisition
Disposal
Gain (loss) on valuation
Amortization on the effective interest method
Others (*)
Ending balance
(*) Others consist of foreign currencies translation, etc.
Stage 1
12,843,997
-
-
-
13,275,429
(9,146,307)
70,017
10,195
33,765
17,087,096
Stage 2
Stage 3
30,212
-
-
-
10,000
(15,047)
(59)
47
-
25,153
Total
12,874,209
-
-
-
13,285,429
(9,161,354)
69,958
10,242
33,765
17,112,249
-
-
-
-
-
-
-
-
-
-
(4) The Group disposed equity securities designated as financial assets at FVTOCI as the creditors
determined to sell the securities for the year ended December 31, 2018. The fair value and accumulative
gain on valuation of that equity securities at disposal date are 9,379 million Won and 1,392 million
Won, respectively.
(5) Details of AFS financial assets as of December 31, 2017 is as follows (Unit: Korean Won in millions):
Debt securities:
Korean treasury and government agencies
Financial institutions
Corporates
Asset-backed securities
Bond denominated in foreign currencies
Others
Sub-total
Equity securities
Beneficiary certificates
Securities loaned
Total
For the year ended December 31, 2017
Amortized
cost
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
Cumulative
gains on
valuation
Cumulative
losses on
valuation
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)
(37,004)
(2,236)
(3,728)
(396)
(43,364)
Fair value
2,330,567
5,217,266
2,725,232
308,181
2,442,579
35,163
13,058,988
1,411,078
712,628
170,256
15,352,950
9.
SECURITIES AT AMORTIZED COST AND HTM FINANCIAL ASSETS
(1) Details of securities at amortized cost as of December 31, 2018 is as follows (Unit: Korean Won in
millions):
Korean treasury and government agencies
Financial institutions
Corporates
Bond denominated in foreign currencies
Loss allowance
Total
December 31, 2018
7,523,458
9,474,922
5,707,063
234,041
(6,925)
22,932,559
177
Woori Bank annual report 2018We Believe in Your Potential - 58 -
(2) Changes in the loss allowance and gross carrying amount of securities at amortized cost are as follows
(Unit: Korean Won in millions):
1) Loss allowance
For the year ended December 31, 2018
Stage 1
Stage 2
Stage 3
Total
Beginning balance (*1)
Transfer to 12-month expected credit losses
Transfer to lifetime expected credit losses
Transfer to credit-impaired financial assets
Net provision of loss allowance
Disposal
Others(*2)
Ending balance
(5,078)
-
-
-
(1,922)
22
54
(6,924)
(*1) The beginning balance was restated in accordance with K-IFRS 1109.
(*2) Others consist of foreign currencies translation, etc.
2) Gross carrying amount
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,078)
-
-
-
(1,922)
22
54
(6,924)
For the year ended December 31, 2018
Beginning balance
Transfer to 12-month expected credit losses
Transfer to lifetime expected credit losses
Transfer to credit-impaired financial assets
Acquisition
Disposal / Redemption
Amortization on the effective interest method
Others (*)
Ending balance
(*) Others consist of foreign currencies translation, etc.
Stage 1
16,749,296
-
-
-
15,622,847
(9,426,757)
(7,970)
2,068
22,939,484
Stage 2
Stage 3
-
-
-
-
-
-
-
-
-
Total
16,749,296
-
-
-
15,622,847
(9,426,757)
(7,970)
2,068
22,939,484
-
-
-
-
-
-
-
-
-
(3) Details of HTM financial assets as of December 31, 2017 are as follows (Unit: Korean Won in
millions):
Korean treasury and government agencies
Financial institutions
Corporates
Bond denominated in foreign currencies
Total
For the year ended December 31, 2017
Amortized
cost
3,994,857
7,245,426
5,311,970
197,043
16,749,296
Cumulative
gains on
valuation
Cumulative
losses on
valuation
6,944
2,923
12,367
832
23,066
(15,266)
(15,067)
(25,326)
(1,024)
(56,683)
Fair value
3,986,535
7,233,282
5,299,011
196,851
16,715,679
178
Woori Bank annual report 2018We Believe in Your Potential
- 59 -
10. LOANS AND OTHER FINANCIAL ASSETS AT AMORTIZED COST, AND LOANS AND RECEIVABLES
(1) Details of loans and other financial assets at amortized cost as of December 31, 2018 and loans and
receivables as of December 31, 2017 are as follows (Unit: Korean Won in millions):
Due from banks
Loans
Other financial assets(other receivables)
Total
December 31, 2018
14,150,027
260,819,917
7,478,371
282,448,315
December 31, 2017
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, 2018
December 31, 2017
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
Loss allowance
Due from banks in foreign currencies:
Sub-total
Due from banks on demand
Due from banks on time
Others
Loss allowance
Sub-total
Total
11,034,602
90,003
76
30,000
85,915
(3,069)
11,237,527
828,022
1,288,303
798,493
(2,318)
2,912,500
14,150,027
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
(3) Details of restricted due from banks are as follows (Unit: Korean Won in millions):
Counterparty
December 31, 2018
Reason of restriction
Due from banks in local currency:
Due from BOK
The BOK
Others
The Korea Exchange
and others
Sub-total
Due from banks in foreign currencies:
Due from banks
on demand
Others
The BOK and others
Korea Investment &
Securities and others
Sub-total
Total
Reserve deposits
11,034,602
under the BOK Act
Central counterparty KRW
margin and others
81,889
11,116,491
Reserve deposits under the
780,576
BOK Act and others
Overseas futures and options
trade deposits and others
798,493
1,579,069
12,695,560
179
Woori Bank annual report 2018We Believe in Your Potential - 60 -
Counterparty
December 31, 2017
Reason of restriction
Due from banks in local currency:
Due from BOK The BOK
Others
The Korea Exchange
and others
Sub-total
Due from banks in foreign currencies:
Due from banks
on demand
Others
The BOK and others
The People’s Bank of
China and others
Sub-total
Total
Reserve deposits
6,246,496
under the BOK Act
Central counterparty KRW
margin and others
94,394
6,340,890
Reserve deposits under the
787,520
BOK Act and others
Reserve deposits and others
367,108
1,154,628
7,495,518
(4) Changes in the loss allowance and gross carrying amount of due from banks are as follows (Unit: Korean
Won in millions):
1) Loss allowance
For the year ended December 31, 2018
Stage 1
Stage 2
Stage 3
Total
Beginning balance (*1)
Transfer to 12-month expected credit losses
Transfer to lifetime expected credit losses
Transfer to credit-impaired financial assets
Net provision of loss allowance
Others (*2)
Ending balance
(3,092)
-
-
-
(2,219)
(76)
(5,387)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,092)
-
-
-
(2,219)
(76)
(5,387)
(*1) The beginning balance was restated in accordance with K-IFRS 1109.
(*2) Others consist of foreign currencies translation and etc.
2) Gross carrying amount
For the year ended December 31, 2018
Beginning balance
Transfer to 12-month expected credit losses
Transfer to lifetime expected credit losses
Transfer to credit-impaired financial assets
Net increase
Other
Ending balance
Stage 1
8,870,835
-
-
-
5,301,259
(16,680)
14,155,414
Stage 2
Stage 3
-
-
-
-
-
-
-
Total
8,870,835
-
-
-
5,301,259
(16,680)
14,155,414
-
-
-
-
-
-
-
180
Woori Bank annual report 2018We Believe in Your Potential - 61 -
(5) 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
Private placement bonds
Securitized loans
Call loans
Bonds purchased under resale agreements
Others
Loan origination costs and fees
Discounted present value
Loss allowance
Total
December 31, 2018
210,701,421
15,239,032
2,934,366
8,051,384
7,874,457
22,885
45,851
13,810
365,531
1,377,072
2,669,080
11,701,951
1,037,283
574,178
(10,308)
(1,778,076)
260,819,917
December 31, 2017
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
607,325
510,860
(10,988)
(1,770,222)
251,523,301
(6) Changes in the loss allowance on loans for the year ended December 31, 2018 are as follows (Unit: Korean
Won in millions):
Beginning balance (*1)
Transfer to 12-month expected credit losses
Transfer to lifetime expected credit losses
Transfer to credit-impaired financial assets
Net reversal (provision) of loss allowance
Recoveries of loans previously charged off
Charge-off
Disposal
Unwinding effect
Others (*2)
Ending balance
For the year ended December 31, 2018
Stage 1
(101,479)
(9,848)
5,905
79,078
(86,224)
-
-
-
-
(1,941)
(114,509)
Consumers
Stage 2
(41,358)
8,966
(7,183)
47,343
(56,164)
-
-
33
-
(5)
(48,368)
Stage 3
(117,168)
882
1,278
(126,421)
(49,637)
(51,855)
204,552
1,633
7,945
(1,115)
(129,906)
Stage 1
(365,251)
(24,324)
15,074
62,731
(68,381)
-
-
-
-
31,840
(348,311)
Corporates
Stage 2
(255,922)
22,658
(407,780)
97,750
193,392
-
-
237
-
46
(349,619)
Stage 3
(905,243)
1,666
392,706
(160,481)
(94,004)
(127,630)
290,109
49,902
23,381
1,921
(527,673)
For the year ended December 31, 2018
Beginning balance (*1)
Transfer to 12-month expected
Credit card accounts
Stage 2
(71,463)
Stage 1
(57,134)
Stage 3
(102,858)
Stage 1
(523,864)
Sub-total
Stage 2
(368,743)
Stage 3
(1,125,269)
Total
(2,017,876)
credit losses
(13,846)
13,738
Transfer to lifetime expected
credit losses
Transfer
to credit-impaired
5,871
(6,194)
108
323
(48,018)
45,362
2,656
26,850
(421,157)
394,307
financial assets
82,406
84,048
(166,454)
224,215
229,141
(453,356)
-
-
-
Net reversal (provision) of loss
allowance
(82,083)
(98,260)
(33,205)
(236,688)
38,968
(176,846)
(374,566)
Recoveries of loans previously
charged off
Charge-off
Disposal
Unwinding effect
Others (*2)
Ending balance
-
-
-
-
(1)
(64,787)
-
-
-
-
-
(57,565)
242,879
-
-
-
(78,131)
(116,772)
-
-
-
-
29,898
(527,607)
-
-
270
-
41
(476,118)
(237,050)
737,540
51,535
31,326
806
(774,351)
(237,050)
737,540
51,805
31,326
30,745
(1,778,076)
(*1) The beginning balance was restated in accordance with K-IFRS 1109.
(*2) Others consist of debt-equity swap, foreign currencies translation and etc.
181
Woori Bank annual report 2018We Believe in Your Potential - 62 -
Changes in the loss allowances on loans and receivables for the year ended December 31, 2017, are as
follows (Unit: Korean Won in millions):
Beginning balance
Net reversal (provision) of
loss allowance
Recoveries of loans previously
charged off
Charge-off
Disposal
Unwinding effect
Others(*)
Ending balance
Consumers
(163,858)
For the year ended December 31, 2017
Others
Credit card
(209,024)
(155,372)
Corporates
(1,498,842)
Total
(2,027,096)
(131,275)
(539,222)
(203,968)
12,192
(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)
(*) Others consist of debt-equity swap, foreign currencies translation and etc.
(7) Changes in the gross carrying amount of loans are as follows (Unit: Korean Won in millions):
Beginning balance
Transfer to 12-month expected credit losses
Transfer to lifetime expected credit losses
Transfer to credit-impaired financial assets
Charge-off
Disposal
Net increase (decrease)
Ending balance
For the year ended December 31, 2018
Stage 1
103,502,347
1,921,485
(3,186,506)
(218,943)
-
-
8,600,859
110,619,242
Consumers
Stage 2
5,487,758
(1,912,046)
3,199,993
(127,447)
-
(478)
(619,771)
6,028,009
Stage 3
326,739
(9,439)
(13,487)
346,390
(204,552)
(31,910)
(22,247)
391,494
Stage 1
131,096,396
1,081,702
(2,275,984)
(348,503)
-
-
1,900,116
131,453,727
Corporates
Stage 2
4,466,354
(1,077,895)
2,733,860
(275,189)
-
(2,781)
(813,091)
5,031,258
Stage 3
1,622,409
(3,807)
(457,876)
623,692
(290,109)
(166,347)
(307,304)
1,020,658
Beginning balance
Transfer to 12-month expected
For the year ended December 31, 2018
Credit card accounts
Stage 2
935,266
Stage 1
5,721,743
Stage 3
177,983
Stage 1
240,320,486
Sub-total
Stage 2
10,889,378
Stage 3
2,127,131
Total
253,336,995
credit losses
221,984
(221,841)
(143)
3,225,171
(3,211,782)
(13,389)
Transfer to lifetime expected
credit losses
(287,623)
288,027
(404)
(5,750,113)
6,221,880
(471,767)
Transfer
to credit-impaired
financial assets
Charge-off
Disposal
Net increase (decrease)
Ending balance
(104,459)
-
-
1,310,199
6,861,844
(95,758)
-
-
77,078
982,772
200,217
(242,879)
-
74,215
208,989
(671,905)
-
-
11,811,174
248,934,813
(498,394)
-
(3,259)
(1,355,784)
12,042,039
1,170,299
(737,540)
(198,257)
(255,336)
1,621,141
-
-
-
(737,540)
(201,516)
10,200,054
262,597,993
182
Woori Bank annual report 2018We Believe in Your Potential - 63 -
(8) Details of other financial assets(other receivables) are as follows (Unit: Korean Won in millions):
CMA accounts
Receivables
Accrued income
Telex and telephone subscription rights and refundable deposits
Other receivables
Loss allowance
Total
December 31, 2018
185,999
4,864,403
1,000,427
982,925
512,339
(67,722)
7,478,371
December 31, 2017
135,000
4,459,318
1,026,273
984,620
166,877
(57,563)
6,714,525
(9) Changes in the loss allowances on other financial assets are as follows (Unit: Korean Won in millions):
Beginning balance (*1)
Transfer to 12-month expected credit losses
Transfer to lifetime expected credit losses
Transfer to credit-impaired financial assets
Net provision of loss allowance
Charge-off
Disposal
Others(*2)
Ending balance
For the year ended December 31, 2018
Stage 1
Stage 2
Stage 3
(2,955)
(150)
105
6,509
(6,583)
-
-
(176)
(3,250)
(1,832)
139
(416)
304
(166)
-
1
(1)
(1,971)
(54,211)
11
311
(6,813)
(31,550)
28,200
1,264
287
(62,501)
Total
(58,998)
-
-
-
(38,299)
28,200
1,265
110
(67,722)
(*1) The beginning balance was restated in accordance with K-IFRS 1109.
(*2) Others consist of foreign currencies translation and etc.
(10) Changes in the gross carrying amount of other financial assets are as follows (Unit: Korean Won in
millions):
Beginning balance
Transfer to 12-month expected credit losses
Transfer to lifetime expected credit losses
Transfer to credit-impaired financial assets
Disposal
Net increase and others
Others
Ending balance
For the year ended December 31, 2018
Stage 1
6,662,335
7,573
(11,418)
(7,580)
-
-
794,983
7,445,893
Stage 2
Stage 3
29,124
(7,556)
11,734
(1,110)
-
(5)
(3,994)
28,193
79,912
(17)
(316)
8,690
(28,201)
(1,640)
13,579
72,007
Total
6,771,371
-
-
-
(28,201)
(1,645)
804,568
7,546,093
183
Woori Bank annual report 2018We Believe in Your Potential - 64 -
11. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
(1) The fair value hierarchy
The fair value hierarchy is determined by the levels of judgment involved in estimating fair values of financial
assets and liabilities. The specific financial instruments characteristics and market condition such as volume of
transactions and transparency are reflected to the market observable inputs. The fair value hierarchy gives the
highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities. The Group
maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value
of its financial assets and financial liabilities. Fair value is measured based on the perspective of a market
participant. As such, even when market assumptions are not readily available, the Group’s own assumptions
reflect those that market participants would use for measuring the assets or liabilities at the measurement date.
The fair value measurement is described in the one of the following three levels used to classify fair value
measurements:
• Level 1—fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities. The types of financial assets or liabilities generally included in Level 1 are
publicly traded equity securities, 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
assets or liabilities 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
Total
December 31, 2018
Financial assets:
Financial assets at fair value through profit or
loss mandatorily measured at fair value
Deposits
Debt securities
Equity securities
Capital contributions
Beneficiary certificates
Loans
Derivative assets
Financial assets at FVTOCI
Sub-total
Debt securities
Equity securities
Securities loaned
Derivative assets (Designated for hedging)
Sub-total
Total
26,935
239,794
53,806
-
2,130
-
13,216
335,881
1,838,409
482,327
-
2,320,736
-
2,656,617
-
1,575,972
-
-
128,988
205,000
1,964,065
3,874,025
15,233,811
-
40,029
15,273,840
35,503
19,183,368
-
8,389
401,860
422,481
854,299
180,450
48,798
1,916,277
-
468,847
-
468,847
-
2,385,124
26,935
1,824,155
455,666
422,481
985,417
385,450
2,026,079
6,126,183
17,072,220
951,174
40,029
18,063,423
35,503
24,225,109
184
Woori Bank annual report 2018We Believe in Your Potential - 65 -
Level 1 (*1)
Level 2 (*1)
Level 3
Total
December 31, 2018
27,058
2,245
29,303
-
-
29,303
-
2,071,925
2,071,925
-
51,408
2,123,333
-
16,691
16,691
164,767
-
181,458
27,058
2,090,861
2,117,919
164,767
51,408
2,334,094
Level 1 (*1)
Level 2 (*1)
Level 3 (*2)
Total
December 31, 2017
25,972
405,942
21,666
-
1,021
454,601
-
-
-
2,710,172
399,214
-
69,778
3,179,164
-
3,633,765
25,964
2,613
28,577
-
-
-
-
28,577
-
2,238,391
-
13,041
3,093,272
5,344,704
-
-
-
10,348,815
-
68,722
100,478
10,518,015
59,272
15,921,991
-
3,126,585
3,126,585
-
91,739
91,739
67,754
3,286,078
-
-
-
-
21,482
21,482
9,694
12,596
22,290
-
1,011,864
643,906
-
1,655,770
-
1,699,542
-
20,951
20,951
160,057
-
160,057
-
181,008
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
3,150,149
3,176,113
160,057
91,739
251,796
67,754
3,495,663
Financial liabilities:
Financial liabilities at fair value through profit or
loss mandatorily measured at fair value
Deposits due to customers
Derivative liabilities
Sub-total
Financial liabilities at fair value through profit or
loss designated as upon initial recognition
Equity-linked securities
Derivative liabilities (Designated for hedging)
Total
Financial assets:
Financial assets held for trading
Deposits
Debt securities
Equity securities
Beneficiary certificates
Derivative assets
Financial assets designated at FVTPL
Sub-total
Debt securities
Equity securities
Sub-total
AFS financial assets
Debt securities
Equity securities
Beneficiary certificates
Securities loaned
Derivative assets (Designated for hedging)
Sub-total
Total
Financial liabilities:
Financial liabilities held for trading
Deposits due to customers
Derivative liabilities
Sub-total
Financial liabilities designated at FVTPL
Equity-linked securities
Debentures
Sub-total
Derivative liabilities (Designated for hedging)
Total
(*1) There were no transfers between Level 1 and Level 2 of financial assets and liabilities measured at fair value. The
Group recognizes transfers among levels at the end of reporting period in which events have occurred or
conditions have changed.
(*2) Certain unquoted AFS equity securities were measured at cost as of December 31, 2017, that amounted to 37,092
million Won. These unquoted equity instruments mostly represent minority investments in structured entity
vehicles, such as asset securitization structures. They are measured at cost because (a) observable inputs of
financial information to measure fair value were not available to obtain, (b) there was a significant variance in
likely estimated cash flows or (c) the probabilities for various estimated cash flows could not be measured
reliably. In addition, the Group has no intention to dispose these investments in the foreseeable future.
185
Woori Bank annual report 2018We Believe in Your Potential - 66 -
Financial assets and liabilities at fair value through profit or loss mandatorily measured at fair value, financial
liabilities at fair value through profit or loss designated as upon initial recognition, financial assets at FVTOCI,
and derivative assets (Designated for hedging) and liabilities (Designated for hedging) 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 valuation methods. Valuation
methods and input variables for each type of financial instruments are as follows:
Loans
Debt securities
Equity securities, capital
contributions and
Beneficiary certificates
Derivatives
Equity-linked securities
Valuation methods
The fair value of Loans is measured by the
Binomial tree given the values of underlying
assets and volatility.
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.
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.
Input variables
Values of underlying assets,
Volatility
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.
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.
186
Woori Bank annual report 2018We Believe in Your Potential - 67 -
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
Loans
Binomial tree
Derivative
assets
Option valuation model
and others
Derivative
liabilities
Option valuation model
and others
Equity-linked
securities
Monte Carlo Simulation
and others
External appraisal value
and others
Equity
securities,
capital
contributions
and
Beneficiary
certificates
Input variable
Stock, Volatility
of underlying
asset
Correlation
coefficient
Volatility of
underlying asset
Correlation
coefficient
Volatility of
underlying asset
Correlation
coefficient
Volatility of
underlying asset
Terminal growth
rate
Discount rate
Volatility of real
estate sale price
Range
Impact of changes in significant unobservable
inputs on fair value measurement
15.49%~36.96% Fair value increases as volatility of underlying
asset increases.
0.9~0.98
Variation of fair value increases as correlation
coefficient increases.
14.00%~34.28% Variation of fair value increases as volatility
0.9~0.98
increases.
Variation of fair value increases as correlation
coefficient increases.
14.00%~34.28% Variation of fair value increases as volatility
0.005~0.658
22.09%~31.19%
0.00%
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 a
compound financial instrument may decrease.
Fair value increases as terminal growth rate
increases.
3.67%~17.40% Fair value increases as discount rate decreases.
0.00%
Fair value increases as volatility of real estate sale
price increases.
Fair value of financial assets and liabilities classified into Level 3 is measured by the Group using its own
valuation methods 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.
187
Woori Bank annual report 2018We Believe in Your Potential - 68 -
(3) Changes in financial assets and liabilities measured at fair value classified into Level 3 are as follows (Unit:
Korean Won in millions):
For the year ended December 31, 2018
Net
Income
(loss)
(*1)
Other
comprehensiv
-e income
January 1,
2018
Purchases/
issuances
Disposals/
settlements
Transfer to or
out of Level
3 (*2)
December
31, 2018
Financial assets:
Financial assets at fair
value through profit or
loss mandatorily
measured at fair value
Debt securities
Equity securities
Capital contributions
Beneficiary certificates
Loans
Derivative assets
Sub-total
Financial assets at
FVTOCI
Equity securities
Total
Financial liabilities:
Financial liabilities at fair
value through profit or
loss mandatorily
measured at fair value
Derivative liabilities
Financial liabilities at fair
value through profit or
loss designated as upon
initial recognition
Equity-linked securities
Total
9,694
280,171
294,121
654,066
165,001
19,346
1,422,399
(28)
56,271
16,119
16,391
3,378
75,696
167,827
-
-
-
-
-
-
-
3,000
67,953
144,207
5,151,535
150,103
4,722
5,521,520
(4,277)
(2,535)
(31,966)
(4,971,003)
(138,032)
(50,966)
(5,198,779)
-
-
-
3,310
-
-
3,310
8,389
401,860
422,481
854,299
180,450
48,798
1,916,277
451,287
1,873,686
-
167,827
19,688
19,688
432
5,521,952
(2,560)
(5,201,339)
-
3,310
468,847
2,385,124
20,951
46,409
160,057
181,008
(16,243)
30,166
-
-
-
255
(50,921)
(3)
16,691
183,039
183,294
(162,086)
(213,007)
-
(3)
164,767
181,458
(*1) The losses that increase financial liabilities are presented as positive amounts, and the gains that decrease financial
liabilities are presented as negative amounts. The gain amounting to 137,777 million Won for the years ended December
31, 2018, which is from financial assets and liabilities that the Group holds as at the end of the periods, has been
recognized in net gain (loss) on financial assets at FVTPL and net gain (loss) on financial assets at FVTOCI 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.
188
Woori Bank annual report 2018We Believe in Your Potential - 69 -
For the year ended December 31, 2017
January 1,
2017
Net
Income
(loss) (*1)
Other
comprehensiv-
e 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 designed 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
Derivative liabilities
Financial liabilities designated at
FVTPL
Equity-linked securities
Total
23,153
22,362
4,348
12,652
17,000
346
(56)
290
-
-
-
-
1,024,935
530,511
1,555,446
99
1,595,698
27,986
212
28,198
329
51,179
24,442
(4,321)
20,121
-
20,121
1,398
(25,431)
5,000
-
5,000
65,961
226,975
292,936
-
299,334
-
-
-
(131,460)
(109,471)
(240,931)
(428)
(266,790)
33,524
24,866
673,709
707,233
112,015
136,881
-
-
-
500
(37,939)
-
500
(625,667)
(663,606)
-
-
-
-
-
-
-
-
-
-
-
-
21,482
9,694
12,596
22,290
1,011,864
643,906
1,655,770
-
1,699,542
20,951
160,057
181,008
(*1) The losses that increase financial liabilities are presented as positive amounts, and the gains that decrease 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 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.
(4) Sensitivity analysis on the unobservable inputs used for measuring Level 3 financial instruments
The sensitivity analysis of the financial instruments has been performed by classifying with favorable and
unfavorable changes based on how changes in unobservable assumptions would have effects on the fluctuations
of financial instruments’ value. When the fair value of a financial instrument is affected by more than one
unobservable assumption, the below table reflects the most favorable or the most unfavorable changes which
resulted from varying the assumptions individually. The sensitivity analysis was performed for two types of
level 3 financial instruments: (1) interest rate related derivatives, currency related derivatives, equity related
derivatives, equity-linked securities beneficiary certificates and loans of which fair value changes are recognized
as net income; (2) equity securities of which fair value changes are recognized as other comprehensive income.
The equity investments classified as Level 3 equity securities whose costs(2,566,582 million Won and 1,880,550
million Won as of December 31, 2018 and 2017)are considered to provide the best estimate of fair value are
excluded from sensitivity analysis(1,641,875 million Won and 1,146,751 million Won as of December 31, 2018
and 2017).
189
Woori Bank annual report 2018We Believe in Your Potential - 70 -
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 (Unit: Korean Won in millions):
Financial assets:
Financial assets at FVTPL
Derivative assets (*1)
Loans
Debt securities
Equity securities (*2) (*3)
Beneficiary certificates (*3)
Financial assets at FVTOCI
Equity securities (*2) (*3)
Total
Financial liabilities:
Financial liabilities at fair value through profit
or loss mandatorily measured at fair value
Derivative liabilities (*1)
Financial liabilities at fair value through profit
or loss designated as upon initial
recognition
Equity-linked securities (*1)
Total
Financial assets:
Financial assets held for trading
Derivatives assets (*1)
Financial assets designated at FVTPL
Debt securities (*4)
Equity securities (*4)
AFS Financial assets
Equity securities (*2)(*3)
Beneficiary certificates (*3)
Total
Financial liabilities:
Financial liabilities held for trading
Derivative liabilities (*1)
Financial liabilities designated at FVTPL
Equity-linked securities (*1)
Total
December 31, 2018
Net income (loss)
Other comprehensive income (loss)
Favorable
Unfavorable
Favorable
Unfavorable
4,578
146
68
12,700
1,582
-
19,074
(4,352)
(127)
(35)
(9,165)
(1,582)
-
(15,261)
2,433
(2,751)
1,561
3,994
(1,669)
(4,420)
-
-
-
-
-
-
-
-
-
-
23,798
23,798
(10,078)
(10,078)
-
-
-
-
-
-
December 31, 2017
Net income (loss)
Other comprehensive income (loss)
Favorable
Unfavorable
Favorable
Unfavorable
1,234
265
670
-
-
2,169
5
8
13
(526)
(309)
(624)
-
-
(1,459)
(513)
(7)
(520)
-
-
-
28,583
1,861
30,444
-
-
-
-
-
-
(15,246)
(1,857)
(17,103)
-
-
-
(*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%.
(*2) Fair value changes of equity securities are calculated by increasing or decreasing growth rate (0~1%) and discount rate or
liquidation value (-1~1%). The growth rate, discount rate, and liquidation value are major unobservable variables.
(*3) 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%.
(*4) 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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Woori Bank annual report 2018We Believe in Your Potential - 71 -
(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:
Securities at amortized cost
Loans and other financial assets at
amortized cost
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
December 31, 2018
Fair value
Level 1
Level 2
Level 3
Total
Book
value
3,618,213
19,417,130
-
23,035,343
22,932,559
-
-
-
-
-
-
282,333,497
282,333,497
282,448,315
248,763,952
16,203,070
28,755,251
21,444,937
-
-
-
-
248,763,952
16,203,070
28,755,251
21,444,937
248,690,939
16,202,986
28,725,862
21,426,064
December 31, 2017
Fair value
Level 1
Level 2
Level 3
Total
Book
value
1,206,292
-
15,509,387
-
-
265,570,649
16,715,679
265,570,649
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
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 valuation
methods. Valuation methods and input variables for financial assets and liabilities that are measured at
amortized costs are given as follows:
Securities at amortized
cost(HTM financial assets in
previous year)
Valuation methods
The fair value is measured by discounting the projected cash
flows of debt securities by applying the market discount rate
that has been applied to a proxy company that has similar
credit rating to the issuers of the securities.
Input variables
Risk-free market rate
and credit spread
Loans and other financial assets
at amortized cost
(Loans and receivables in
previous year)
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
Deposits due to customers,
borrowings, debentures and
other financial liabilities
The fair value is measured by discounting the projected cash
flows of debt products by applying the market discount rate
that is reflecting credit rating of the Group.
Risk-free market rate
and forward rate
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(6) Financial instruments by category
Carrying amounts of financial assets and liabilities by each category are as follows (Unit: Korean Won in
millions):
Financial assets
Deposits
Securities
Loans
Derivative assets
Other financial assets
Total
December 31, 2018
Financial asset at
FVTPL
Financial assets
at FVTOCI
Financial assets at
amortized cost
26,935
3,687,719
385,450
2,026,079
-
6,126,183
-
18,063,423
-
-
-
18,063,423
14,150,027
22,932,559
260,819,917
-
7,478,371
305,380,874
December 31, 2018
Derivatives
assets
(Designated for
hedging)
-
-
-
35,503
-
35,503
Financial liabilities
Deposits due to customers
Borrowings
Debentures
Derivative liabilities
Other financial liabilities(*)
Total
Financial liabilities at
FVTPL
Financial liabilities
at amortized cost
27,058
164,767
-
2,090,861
-
2,282,686
248,690,939
16,202,986
28,725,862
-
21,473,881
315,093,668
Derivatives
liabilities
(Designated for
hedging)
-
-
-
51,408
-
51,408
Total
14,176,962
44,683,701
261,205,367
2,061,582
7,478,371
329,605,983
Total
248,717,997
16,367,753
28,725,862
2,142,269
21,473,881
317,427,762
(*) Other financial liabilities include 47,817 million Won of financial guarantee liabilities measured at amortized cost
included in provisions.
December 31, 2017
Financial assets
Deposits
Securities
Loans
Derivative assets
Other financial assets
Total
Financial assets
at FVTPL
AFS financial
assets
HTM financial
assets
Loans and
receivables
25,972
2,701,330
-
3,115,775
-
5,843,077
-
15,352,950
-
-
-
15,352,950
-
16,749,296
-
-
-
16,749,296
8,868,378
-
251,523,301
-
6,714,525
267,106,204
Derivatives
assets
(Designated for
hedging)
-
-
-
59,272
-
59,272
Total
8,894,350
34,803,576
251,523,301
3,175,047
6,714,525
305,110,799
December 31, 2017
Financial liabilities
Deposits due to customers
Borrowings
Debentures
Derivative liabilities
Other financial liabilities(*)
Total
Financial liabilities at
FVTPL
25,964
160,057
91,739
3,150,149
-
3,427,909
Financial liabilities
at amortized cost
234,695,084
14,784,706
27,869,651
-
13,964,158
291,313,599
Derivatives
liabilities
(Designated for
hedging)
-
-
-
67,754
-
67,754
Total
234,721,048
14,944,763
27,961,390
3,217,903
13,964,158
294,809,262
(*) Other financial liabilities include 71,697 million Won of financial guarantee liabilities measured at amortized cost
included in provisions.
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Woori Bank annual report 2018We Believe in Your Potential - 73 -
(7) Income or expense from financial instruments by category
Income or expense from financial assets and liabilities by each category during the years ended December
31, 2018 and 2017 are as follows (Unit: Korean Won in millions):
Interest
Income(expense)
54,243
280,371
376,788
Fees and
Commissions
Income(expense)
86,845
66
-
8,973,097
(3,164)
(4,030,384)
-
-
5,650,951
317,316
-
27,742
-
-
431,969
December 31, 2018
Provision(reversal)
of credit loss
-
(2,027)
(1,922)
(415,084)
-
Others
264,850
24,707
431
79,101
17,485
Total
405,938
303,117
375,297
8,954,430
14,321
-
25,498
(3,977,144)
-
89,459
(329,574)
(672)
-
411,400
(672)
89,459
6,164,746
Interest
Income(expense)
48,615
239,030
307,965
7,948,069
-
Fees and
Commissions
Income(expense)
-
80,041
-
384,025
-
December 31, 2017
Provision(reversal)
of credit loss
-
(31,300)
-
(862,273)
-
Others
6,859
362,712
-
196,269
(111,240)
Total
55,474
650,483
307,965
7,666,090
(111,240)
(3,323,029)
-
-
39,373
(3,283,656)
-
-
5,220,650
-
-
464,066
-
77,140
(816,433)
(109,447)
-
384,526
(109,447)
77,140
5,252,809
Financial assets at FVTPL
Financial assets at FVTOCI
Securities at amortized cost
Loans and other financial
assets at amortized cost
Financial liabilities at FVTPL
Financial liabilities at
amortized cost
Derivatives
assets(liabilities)(Designated
for hedging)
Off-balance provisions
Total
Financial assets at FVTPL
AFS financial assets
HTM financial assets
Loans and receivables
Financial liabilities at FVTPL
Financial liabilities at
amortized cost
Derivatives
assets(liabilities)(Designated
for hedging)
Off-balance provisions
Total
193
Woori Bank annual report 2018We Believe in Your Potential - 74 -
12. DERECOGNITION AND OFFSET OF FINANCIAL INSTRUMENTS
(1) Derecognition of financial instruments
Transferred financial assets that do not meet the condition of derecognition in their entirety.
a) Bonds sold under repurchase agreements
The financial instruments that were disposed but the Group agreed to repurchase at the fixed amounts at the
same time, so that they did not meet the conditions of derecognition, are as follows (Unit: Korean Won in
millions):
December 31,
2018
December 31,
2017
Assets transferred
Financial assets at FVTOCI
AFS financial assets
Securities at amortized cost
HTM financial assets
Related liabilities
Total
Bonds sold under repurchase agreements
33,588
-
5,552
-
39,140
42,907
-
9,998
-
5,436
15,434
3,173
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 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 the securities loaned
are as follows (Unit: Korean Won in millions):
Financial assets
at FVTOCI
AFS financial
assets
Korean financial
institution’s debt
securities and others
Korean treasury,
government bonds and
others
Total
December 31,
2018
December 31,
2017
40,029
-
40,029
-
170,256
170,256
Loaned to
Korea Securities Finance
Corporation
Korea Securities Finance
Corporation and others
The details of the transferred financial assets that are not meet the condition of derecognition 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 the 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 offset with part of unpaid domestic
exchange payable or uncollected domestic exchange receivables and has been disclosed in loans at amortized
cost and other financial assets (loans and receivables in previous year) or other financial liabilities of the Group’s
statements of financial position.
The Group possesses the derivative assets, derivative liabilities, receivable spot exchange and payable spot
exchange that do not satisfy the offsetting criteria of K-IFRS 1032, but provide the Group under the
circumstances of the trading party’s defaults, insolvency or bankruptcy, the right of 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 net
amount of derivative assets and derivative liabilities, receivable spot exchange and payable spot exchange can be
offset.
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Woori Bank annual report 2018We Believe in Your Potential
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The Group has entered into a resale and repurchase agreement and accounted it as a collateralized borrowing.
The Group has also entered into a resale and purchase agreement and accounted it as a secured loans. The resale
and repurchase agreements 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
borrowing in borrowings and the secured loans in loans and receivables. The Group under the repurchase
agreements has offsetting right only upon the counterparty’s default, insolvency or bankruptcy; thus, the
repurchase agreements are applied by the TBMA/ISMA Global Master Repurchase Agreement, which does not
satisfy the offsetting criteria of K-IFRS 1032. The Group disclosed bonds purchased under resale agreements as
loan at amortized cost and other financial assets (loans and receivables in previous year) and bonds sold under
repurchase agreements as borrowings.
As of December 31, 2018 and 2017, the financial instruments to be off set and may be covered by master netting
agreements and similar agreements are as follows (Unit: Korean Won in millions):
Gross
amounts of
recognized
financial
assets
Gross
amounts of
recognized
financial
assets setoff
1,908,542
4,200,532
11,701,951
-
-
-
December 31, 2018
Net
amounts of
financial
assets
presented
1,908,542
4,200,532
Related amounts not setoff in
the consolidated statement of
financial position
Netting
agreements
and others
Cash
collateral
received
Net
amounts
5,527,117
66,857
515,100
11,701,951
11,701,951
-
-
30,090,598
47,901,623
29,699,412
29,699,412
391,186
18,202,211
-
17,229,068
-
66,857
391,186
906,286
Gross
amounts of
recognized
financial
liabilities
1,862,681
164,767
4,206,027
42,907
Gross
amounts of
recognized
financial
liabilities
setoff
-
-
-
-
December 31, 2018
Related amounts not setoff in
the consolidated statement of
financial position
Netting
agreements
and others
Cash
collateral
pledged
Net
amounts
5,540,147
115,615
577,713
Net
amounts of
financial
liabilities
presented
1,862,681
164,767
4,206,027
42,907
42,907
-
-
36,832,774
43,109,156
29,699,412
29,699,412
7,133,362
13,409,744
6,231,538
11,814,592
-
115,615
901,824
1,479,537
Financial assets:
Derivative assets (*1)
Receivable spot exchange (*2)
Bonds purchased under resale
agreements (*2)
Domestic exchange settlement credits
(*2)(*6)
Total
Financial liabilities:
Derivative liabilities (*1)
Equity-linked securities index in short
position (*3)
Payable spot exchange (*4)
Bonds sold under repurchase agreements
(*5)
Domestic exchange settlement debits
(*4)(*6)
Total
(*1) The items include derivatives held for trading, derivatives designated for hedging.
(*2) The items are included in loan at amortized cost and other financial assets.
(*3) The items are equity linked securities related to derivatives and are included in financial liabilities at FVTPL.
(*4) The items are included in other financial liabilities.
(*5) The items are included in borrowings.
(*6) Certain financial assets and liabilities are presented as net amounts.
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Woori Bank annual report 2018We Believe in Your Potential - 76 -
December 31, 2017
Gross
amounts of
recognized
financial
assets
Gross
amounts of
recognized
financial
assets setoff
Net
amounts of
financial
assets
presented
Related amounts not setoff 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
38,985,354
38,987,064
64,873
23,682,429
-
22,646,512
-
174,415
64,873
861,502
December 31, 2017
Gross
amounts of
recognized
financial
liabilities
Gross
amounts of
recognized
financial
liabilities
setoff
Net
amounts of
financial
liabilities
presented
Related amounts not setoff in
the consolidated statement of
financial position
Netting
agreements
and others
Cash
collateral
pledged
Net
amounts
3,000,160
1,710
2,998,450
160,057
3,723,886
3,173
-
-
-
5,866,682
157,750
857,961
160,057
3,723,886
3,173
3,173
-
-
40,284,515
47,171,791
38,985,354
38,987,064
1,299,161
8,184,727
1,293,931
7,163,786
-
157,750
5,230
863,191
Financial assets:
Derivative assets (*1)
Receivable spot exchange (*2)
Bonds purchased under resale
agreements (*2)
Domestic exchanges settlement credits
(*2)(*6)
Total
Financial liabilities:
Derivative liabilities (*1)
Equity-linked securities index in short
position(*3)
Payable spot exchange (*4)
Bonds sold under repurchase agreements
(*5)
Domestic exchanges settlement debits
(*4)(*6)
Total
(*1) The items include derivatives held for trading, derivatives designated for hedging.
(*2) The items are included in loans and receivables.
(*3) The items are equity linked securities related to derivatives and are included in financial liabilities at fair value through
profit or loss mandatorily measured at fair value.
(*4) The items are included in other financial liabilities.
(*5) The items are included in borrowings.
(*6) Certain financial assets and liabilities are presented at as net amounts.
196
Woori Bank annual report 2018We Believe in Your Potential - 77 -
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:
Percentage of
ownership (%)
December
31, 2018
December
31, 2017
Financial
statements as of
-
14.2
-
4.9
9.9
15.0
25.3
-
-
Dec.31,2018
4.9 Nov.30,2018 (*3)
9.9
15.0 Nov.30,2018 (*3)
25.3 Nov.30,2018 (*3)
29.4
29.2
-
-
-
19.7
-
9.2
24.5
26.5
28.9
48.4
23.3
29,4
29.0
29.6
49.4
24.0
23.4
25.8
27.2
35.4
28.1
-
20.8
31.3
26.1
23.1
24.0
23.1
20.0
14.1
20.0
25.0
50.0
23.3
9.2 Sep.30,2018 (*3)
23.2
-
26.5
28.9
48.4
23.2
28.9
29.0
29.6
49.4
24.0
23.4
-
-
35.4
28.1
25.9
20.5
31.3
26.1
23.1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
23.1
Dec.31,2018
Dec.31,2018
20.0
13.0 Nov.31,2018( *3)
20.0
Dec.31,2018
25.0
50.0 Sep.30,2018( *3)
Dec.31,2018
-
Dec.31,2018
Joint ventures and Associates
Main business
Woori Bank:
Kumho Tire Co., Inc. (*1)
Woori Service Networks Co., Ltd. (*4)
Korea Credit Bureau Co., Ltd. (*5)
Korea Finance Security Co., Ltd. (*4)
Chin Hung International Inc. (*2)
Poonglim Industrial Co., Ltd. (*9)
STX Engine Co., Ltd. (*10)
STX Corporation (*10)
Saman Corporation (*5)
Dongwoo C & C Co., Ltd. (*6)
SJCO Co., Ltd. (*6)
G2 Collection Co., Ltd. (*6)
The Base Enterprise Co., Ltd. (*6)
Kyesan Engineering Co., Ltd. (*6)
Good Software Lab Co., Ltd. (*6)
Wongwang Co., Ltd. (*6)
Sejin Construction Co., Ltd. (*6)
QTS Shipping Co., Ltd. (*6)
DAEA SNC Co., Ltd. (*6)
ARES-TECH Co., Ltd. (*6)
Force TEC Co., Ltd. (*6)(*7)
Sinseong Trading Co., Ltd. (*6)(*7)
Reading Doctors Co., Ltd. (*6)
PREXCO Co., Ltd. (*6)
Hyunwoo International Co., Ltd. (*11)
Jiwon Plating Co., Ltd. (*6)
Cultizm Korea LTD Co., Ltd. (*6)
Gil Co.,Ltd. (*6)
NK Eng Co., Ltd. (*6)
Youngdong Sea Food Co., Ltd. (*6)(*7)
Woori Growth Partnerships New Technology
Private Equity Fund
Manufacturing
Freight & staffing
services
Credit information
Security service
Construction
Construction
Manufacturing
Wholesale of non-
specialized goods
General construction
Technology service
Construction
Aggregate
transportation and
wholesale
Wholesale and retail
sales
Manufacturing
Construction
Service
Wholesale and real
estate
Construction
Complex transportation
brokerage
Wholesale and retail
sales
Electronic component
manufacturing
Manufacturing
Manufacturing
Other services
Manufacturing
Manufacturing
Plating
Wholesale and retail
sales
Manufacturing
Manufacturing
Processed sea food
manufacturing
Other financial services
2016KIF-IMM Woori Bank Technology Venture
Other financial services
Fund
K BANK Co., Ltd. (*5)
Smart Private Equity Fund No.2
Woori Bank-Company K Korea Movie Asset
Finance
Other financial services
Other financial services
Fund
Well to Sea No. 3 Private Equity Fund (*12)
Partner One Value Up Ist Private Equity Fund
Finance
Other financial services
(*8)
197
Woori Bank annual report 2018We Believe in Your Potential - 78 -
Joint ventures and Associates
IBK KIP Seongjang Dideemdol 1st Private
Investment Limited Partnership (*8)
Crevisse Raim Impact 1st Startup Venture
Specialist Private Equity Fund (*8)
Woori Investment Bank Co., Ltd.:
Main business
Other financial services
Other financial services
Nomura-Rifa Private Real Estate Investment
Other financial services
Trust No.17 (*5)
Woori Private Equity Asset Management Co., Ltd.:
Uri Hanhwa Eureka Private Equity Fund (*5)(*8) Other financial services
Percentage of
ownership (%)
December
31, 2018
December
31, 2017
Financial
statements as of
20.0
25.0
19.4
0.8
-
-
Dec.31,2018
Dec.31,2018
25.0
Dec.31,2018
-
Dec.31,2018
(*1) The Group did not have significant influence over the entity due to the termination of the joint management
procedures of the creditors’ financial institution, and thus the entity was excluded from the investment in associates
for the years ended December 31, 2018.
(*2) The investments in associates that have quoted market prices are Chin Hung International Inc. (current period:
KRW 2,065, previous year: KRW 1,915).
(*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, 2018 and 2017.
(*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 associates are nil as of December 31, 2018 and 2017.
(*7) Even though the Group’s ownership ratio of the entity was more than 20%, the Group did not have significant
influence over the entity because the entity was going through workout process under receivership and thus was
excluded from the investment in associates. However, as the workout process was completed for the year ended
December 31, 2018, it has been included in the investment in associates.
(*8) Due to capital contribution by the Group for the year ended December 31, 2018, the entities has been included in
the investment in associates.
(*9) The Group lost significant influence over the entity due to the stock consolidation and the capital increase of the
associate during the year ended December 31, 2018, and thus the entity was excluded from the list of associates.
(*10) The entity was sold after it was transferred to assets held for distribution (sale) and was excluded from the
investment in associates.
(*11) The entity was excluded from the associate as the group sold its entire stake during the year ended December 31,
2018.
(*12) The Group has entered into a contract whereas the Group (or a third party designated by the Group) obtains a
preemptive right to acquire the base assets (Aju Capital Co. Ltd.) of Well to Sea No. 3 Private Equity Fund, an
affiliate of the Group, when the Fund disposes them.
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Woori Bank annual report 2018We Believe in Your Potential
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(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):
For the year ended December 31, 2018
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
Partner One Value Up Ist
Private Equity Fund
IBK KIP Seongjang
Dideemdol 1st Private
Investment Limited
Partnership
Crevisse Raim Impact 1st
Startup Venture Specialist
Private Equity Fund
Nomura-Rifa Private Real
Estate Investment Trust
No.17
Uri Hanhwa Eureka Private
Equity Fund
Acquisiti-
on cost
175,652
January 1,
2018
98,933
Share of
profits (losses)
(10,451)
108
158
1
3,313
5,816
3,267
130,779
13,916
50,760
8,521
3,519
45,101
-
6,947
1,254
1,087
(10)
1,206
-
(816)
(98)
Acquisi-
tion
-
-
-
-
-
-
-
-
Disposal
and others
(*)
(83,286)
-
-
-
-
-
(5,865)
-
Dividends
-
(2)
(113)
(54)
-
-
-
-
25,847
27,611
950
360
(3,346)
(484)
15,000
67,343
6,840
31,735
-
(10,705)
8,160
21,951
3,000
2,932
3,000
2,957
(42)
(257)
101,992
182,309
22,546
-
-
-
10,000
4,426
3,025
-
-
-
1,000
939
350
621,299
-
417,051
(52)
10,000
-
-
(152)
(11)
3,196
4,426
3,025
-
350
48,272
Change in
capital
(5,196)
-
-
1
(1,725)
-
(266)
35
-
300
144
-
-
Impair-
ment
-
-
-
-
-
-
-
(177)
-
-
-
-
-
-
-
-
-
-
Others
-
December
31, 2018
-
-
-
-
159
-
-
-
157
6,790
3,456
44,741
-
-
1,014
-
25,091
-
584
-
-
-
-
-
-
-
15,300
43,709
2,890
2,700
197,393
9,948
4,426
3,025
787
-
-
-
-
-
-
-
-
(508)
(517)
(6,437)
-
-
-
-
-
-
-
-
-
-
-
-
-
(93,005)
-
(1,170)
-
(13,144)
-
(177)
(339)
404
-
361,427
(*)
Investments in joint ventures and associates decreased by 83,286 million Won through transfers to financial assets at
FVTOCI (K-IFRS 1109) which occurred during the year ended December 31, 2018.
199
Woori Bank annual report 2018We Believe in Your Potential - 80 -
Acquisiti-
on cost
January 1,
2017
Share of
profits
(losses)
Acquisi-
tion (*)
Disposal
and others
Dividends
Change in
capital
Impair-
ment
Others
(*)
December
31, 2017
For the year ended December 31, 2017
-
175,652
15,289
200,332
(4,617)
(102)
108
145
3,313
5,592
3,266
89,725
13,916
92,038
7,492
42,215
8,521
3,376
43,032
-
43,036
19,729
-
8,699
21
371
197
(14,375)
(6,733)
(1,010)
2,021
(29,788)
(733)
-
-
-
-
-
41,053
-
-
-
8,546
-
(7,369)
-
-
-
-
-
-
(46,217)
(16,354)
-
-
13,602
13,118
(582)
15,729
(498)
1,800
32,500
1,800
30,442
-
(11,381)
5,040
12,892
3,000
1,500
-
-
(68)
(43)
3,000
3,000
-
-
-
-
102,500
-
-
54,422
80,894
(622)
102,500
-
(508)
-
(3,303)
-
(8)
(147)
(54)
-
-
-
-
-
-
-
-
-
-
-
-
(57,109)
-
1,545
-
(102,842)
-
-
-
-
(5,323)
-
(6,738)
-
(26,144)
6,733
-
-
27,772
-
-
-
-
-
-
-
27
-
-
-
98,933
158
5,816
3,519
45,101
-
-
-
6,947
1,254
27,611
6,840
31,735
2,932
2,957
-
3,309
182,309
-
-
-
-
-
-
-
-
-
-
-
-
-
1,535
-
4,191
(73)
417
26
(156)
-
(245)
-
-
(577)
-
1,000
592,148
-
439,012
(61)
13,389
1,000
192,760
-
(70,946)
-
(60,621)
-
6,663
-
(114,903)
-
11,697
939
417,051
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
Korea Movie Asset Fund
Well to Sea No.3 Private
Equity Fund
Woori Renaissance Holdings
Nomura-Rifa Private Real
Estate Investment Trust
No.17
(*) Changes in investments in joint ventures and associates due to debt-equity swap is 51,227 million Won.
(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):
December 31, 2018
Assets
Liabilities
Operating
revenue
Net income
(loss)
Woori Service Networks Co., Ltd.
Korea Credit Bureau Co., Ltd.
Korea Finance Security Co., Ltd.
Chin Hung International Inc.
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
Partner One Value Up Ist Private Equity Fund
IBK KIP Seongjang Dideemdol 1st Private Investment
Limited Partnership
Crevisse Raim Impact 1st Startup Venture Specialist
Private Equity Fund
Nomura-Rifa Private Real Estate Investment Trust
No.17
Uri Hanhwa Eureka Private Equity Fund
5,066
88,797
35,155
412,205
97,720
109,167
73,231
2,024,856
14,502
10,805
5,968,591
42,776
21,200
12,014
20,197
42,332
1,886
22,788
12,114
332,268
69,915
440
12
1,807,502
51
5
5,395,307
-
757
105
16,178
181
15,803
78,018
60,706
606,192
75,825
5,943
16
60,039
1
1,663
429,742
326
819
9,901
17
6,402
(869)
4,117
(1,510)
(69,256)
(209)
(299)
39,711
(224)
390
(1,268)
3
10
1
(191)
(228)
(1,349)
200
Woori Bank annual report 2018We Believe in Your Potential - 81 -
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
120,133
32,815
1,244,270
14,711
11,830
5,068,424
Liabilities
3,928,327
1,780
19,323
10,461
259,454
309,925
543,458
69,929
485
380
1,001,121
51
2
4,534,957
Operating
revenue
2,136,569
14,887
68,750
55,610
513,285
107,360
1,371,272
76,135
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)
(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, 2018 and 2017, are as follows:
Associate (*)
Orient Shipyard Co., Ltd.
Saenuel Co., Ltd.
E Mirae Tech Co., Ltd.
Jehin Trading Co., Ltd.
The Season Company Co., Ltd.
Yuil PESC Co., Ltd.
CL Tech Co., Ltd.
Associate (*)
Orient Shipyard Co., Ltd.
Saenuel Co., Ltd.
E Mirae Tech Co., Ltd.
Jehin Trading Co., Ltd.
The Season Company 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.
December 31, 2018
Number of shares owned
464,812
3,531
7,696
81,610
18,187
8,642
13,759
Ownership (%)
21.4
37.4
41.0
27.3
30.1
24.0
38.6
December 31, 2017
Number of shares owned
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
Ownership (%)
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.
201
Woori Bank annual report 2018We Believe in Your Potential - 82 -
(5) As of December 31, 2018 and 2017, 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):
December 31, 2018
Total net
asset
Ownership
(%)
Ownership
portion of net
assets
Basis
difference
-
246
-
24,565
5,373
Impairment
-
-
-
-
(6,915)
Intercompany
transaction
-
-
-
(16)
-
Book
value
157
6,790
3,456
44,741
1,014
Woori Service Networks Co., Ltd.
Korea Credit Bureau Co., Ltd.
Korea Finance Security Co., Ltd.
Chin Hung International Inc. (*)
Saman Corporation
Woori Growth Partnerships New
3,180
66,009
23,041
79,793
27,805
Technology Private Equity Fund
108,727
73,219
290,597
14,451
10,800
396,248
42,776
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 (*)
Partner One Value Up Ist Private
Equity Fund
IBK KIP Seongjang Dideemdol
1st Private Investment Limited
Partnership
Crevisse Raim Impact 1st Startup
Venture Specialist Private Equity
Fund
Nomura-Rifa Private Real Estate
Investment Trust No.17
Uri Hanhwa Eureka Private
Equity Fund
4.9
9.9
15.0
25.3
9.2
23.1
20.0
14.1
20.0
25.0
50.0
23.3
157
6,544
3,456
20,192
2,556
25,091
14,644
40,984
2,890
2,700
198,027
9,948
20,443
20.0
4,089
11,909
4,019
42,151
25.0
19.4
0.8
2,977
780
339
-
-
2,725
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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 No.17
Total net
asset
1,065,421
3,202
56,181
23,454
81,686
(168,154)
51,890
28,506
119,648
32,435
243,149
14,660
11,828
364,909
3,758
Ownership
(%)
14.2
4.9
9.9
15.0
25.3
29.4
19.7
9.2
23.1
20.0
13.0
20.0
25.0
50.0
25.0
December 31, 2017
Ownership
portion of net
assets
150,767
158
5,568
3,519
20,671
(49,446)
10,232
2,619
Basis
difference
48,459
-
248
-
24,565
54,542
24,614
5,373
Impairment
(102,843)
-
-
-
-
(20,504)
(27,904)
(6,738)
Intercompany
transaction
2,549
-
-
-
(136)
15,408
5
-
27,611
6,487
31,535
2,932
2,957
182,366
939
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
27,611
353
200
-
-
6,840
31,735
2,932
2,957
(57)
182,309
-
939
-
25,091
656
-
-
-
15,300
43,709
2,890
2,700
(634)
197,393
-
9,948
337
4,426
48
7
(339)
3,025
787
-
Book
value
98,932
158
5,816
3,519
45,100
-
6,947
1,254
(*) The net asset amount is after reflecting debt-equity swap and others.
202
Woori Bank annual report 2018We Believe in Your Potential - 83 -
14. INVESTMENT PROPERTIES
(1) Details of investment properties are as follows (Unit: Korean Won in millions):
December 31, 2018
December 31, 2017
Acquisition cost
Accumulated depreciation
Net carrying value
416,649
(38,580)
378,069
(2) Changes in investment properties are as follows (Unit: Korean Won in millions):
For the years ended December 31
2017
2018
Beginning balance
Acquisition
Disposal
Depreciation
Transfers from(to) premises and equipment
Classified to assets held for distribution (sale)
Foreign currencies translation adjustments
Others
Ending balance
371,301
15,195
(3,045)
(4,045)
7,623
(10,056)
(5)
1,101
378,069
404,741
(33,440)
371,301
358,497
9,872
(458)
(3,902)
2,472
(371)
(324)
5,515
371,301
(3) Fair value of investment properties is amounting to 438,407 million Won and 396,587 million Won as of
December 31, 2018 and 2017, respectively. The fair value of investment properties has been assessed on
the basis of recent similar real estate market price and officially assessed land price in the area of the
investment properties, is classified as level 3 on the fair value hierarchy.
(4) Rental fee earned from investment properties is amounting to 5,080 million Won and 4,579 million Won
for the years ended December 31, 2018 and 2017, respectively.
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
Land
1,481,776
-
1,481,776
Building
872,063
(210,301)
661,762
Acquisition cost
Accumulated depreciation
Net carrying value
Land
1,487,278
-
1,487,278
Building
867,804
(186,958)
680,846
December 31, 2018
Equipment
and vehicles
717,141
(485,119)
232,022
Leasehold
improvement
445,157
(387,960)
57,197
Construction
in progress
8,381
-
8,381
Structures
20
(17)
3
Total
3,524,538
(1,083,397)
2,441,141
December 31, 2017
Equipment
and vehicles
1,024,186
(844,114)
180,072
Leasehold
improvement
429,665
(364,878)
64,787
Construction
in progress
64,559
-
64,559
Structures
20
(17)
3
Total
3,873,512
(1,395,967)
2,477,545
203
Woori Bank annual report 2018We Believe in Your Potential - 84 -
(2) Details of changes in premises and equipment are as follows (Unit: Korean Won in millions):
Beginning balance
Acquisitions
Disposals
Depreciation
Classified to assets held for
distribution (sale)
Transfer
Foreign currencies
translation adjustments
Acquisition through
business combination
Others
Ending balance
Land
1,487,278
1,372
(29)
-
Building
680,846
14,701
-
(26,014)
For the year ended December 31, 2018
Equipment
and vehicles
180,072
76,783
(5,192)
(76,171)
Leasehold
improvement
64,787
17,527
(737)
(32,162)
Construction
in progress
64,559
8,285
(187)
-
Structures
3
-
-
-
Total
2,477,545
118,668
(6,145)
(134,347)
(3,746)
(2,863)
(2,742)
(4,760)
(7,991)
63,432
(236)
(257)
(69)
-
-
1,481,776
-
(12)
661,762
969
189
232,022
(397)
-
323
661
7,195
57,197
(718)
(63,432)
(126)
-
-
8,381
-
-
-
-
-
3
(15,594)
(7,623)
(365)
1,630
7,372
2,441,141
Beginning balance
Acquisitions
Disposals
Depreciation
Classified to assets held for
sale
Transfer
Foreign currencies
translation adjustments
Others
Ending balance
Land
1,488,745
4,755
(1,840)
-
Building
691,699
22,579
(2,593)
(26,156)
(2,693)
(196)
(1,059)
(2,134)
(1,493)
-
1,487,278
(1,393)
(97)
680,846
For the year ended December 31, 2017
Equipment
and vehicles
189,902
59,694
(442)
(74,223)
Leasehold
improvement
68,958
23,420
(1,231)
(31,728)
Construction
in progress
18,717
51,797
-
-
Structures
4
-
-
(1)
Total
2,458,025
162,245
(6,106)
(132,108)
549
5,411
(2,023)
1,204
180,072
-
-
(1,315)
6,683
64,787
-
(5,553)
(402)
-
64,559
-
-
-
-
3
(3,203)
(2,472)
(6,626)
7,790
2,477,545
16. INTANGIBLE ASSETS
(1) Details of intangible assets are as follows (Unit: Korean Won in millions):
Goodwill
153,602
Software
38,839
Industrial
property rights
1,250
Development
cost
305,114
Others
728,399
Membership
deposit
24,099
Construction
in progress
10,415
Total
1,261,718
December 31, 2018
-
(12,602)
(688)
(68,696)
(589,557)
-
-
(671,543)
Acquisition cost
Accumulated
amortization
Accumulated
impairment losses
Net carrying value
-
153,602
-
26,237
-
562
-
236,418
-
138,842
(2,920)
21,179
-
10,415
(2,920)
587,255
Goodwill
108,707
Software
203,418
Industrial
property rights
1,063
Development
cost
260,087
Others
634,150
Membership
deposit
27,337
Construction
in progress
153,209
Total
1,387,971
December 31, 2017
-
(162,746)
(524)
(182,846)
(516,467)
-
-
(862,583)
Acquisition cost
Accumulated
amortization
Accumulated
impairment losses
Net carrying value
-
108,707
-
40,672
-
539
-
77,241
(137)
117,546
(6,652)
20,685
-
153,209
(6,789)
518,599
204
Woori Bank annual report 2018We Believe in Your Potential - 85 -
(2) Details of changes in intangible assets are as follows (Unit: Korean Won in millions):
For the year ended December 31, 2018
Goodwill
108,707
-
-
-
Software
40,672
6,839
(4,359)
(14,028)
Industrial
property rights
539
195
-
(172)
Development
cost
77,241
20,935
-
(46,045)
Others
117,546
45,205
(196)
(73,913)
Membership
deposit
20,685
5,162
(2,871)
-
Construction
in progress
153,209
97,067
-
-
Total
518,599
175,403
(7,426)
(134,158)
-
-
-
-
-
-
562
-
-
674
-
674
(3,902)
188,189
(455)
51,672
(2,419)
-
-
(239,861)
(10,266)
-
-
-
-
-
47,515
-
-
236,418
(227)
(790)
138,842
(52)
-
21,179
-
-
10,415
(2,301)
(785)
587,255
Beginning balance
Acquisitions
Disposal
Amortization (*)
Reversal of impairment
loss
Classified to assets held
for distribution (sale)
Transfer
Acquisition through
-
-
-
-
(3,490)
-
business combination
46,752
763
Foreign currencies
translation
adjustment
Others
Ending balance
(1,857)
-
153,602
(165)
5
26,237
(*) Amortization of other intangible assets amounting to 51,770 million Won is included in other operating expenses.
Beginning balance
Acquisitions
Disposal
Amortization (*)
Impairment loss
Transfer
Foreign currencies
translation
adjustment
Others
Ending balance
For the year ended December 31, 2017
Goodwill
124,803
105
-
-
-
-
Software
35,477
9,722
-
(16,258)
-
7,987
Industrial
property rights
313
349
-
(123)
-
-
Development
cost
70,697
29,133
-
(22,534)
-
-
Others
164,364
22,531
(37)
(60,869)
(78)
-
(16,201)
-
108,707
(952)
4,696
40,672
-
-
539
36
(91)
77,241
(2,742)
(5,623)
117,546
Membership
deposit
20,086
1,867
(944)
-
(159)
-
(160)
(5)
20,685
Construction
in progress
67,999
93,716
-
-
-
(7,987)
Total
483,739
157,423
(981)
(99,784)
(237)
-
(519)
-
153,209
(20,538)
(1,023)
518,599
(*) Amortization of other intangible assets amounting to 48,292 million Won is included in other operating expenses.
(3) Details of goodwill as of December 31, 2018 and 2017 are as follow(Unit: Korea Won in millions)
Goodwill is allocated to cash-generating units, based on management’s analysis, that are expected to benefit
from the synergies of the combination for impairment testing, and cash-generating units consist of an operating
segment or units which are not larger than an operating segment. The recoverable amount of a cash-generating
unit is measured at the higher of its fair value less costs to sell and its value in use. The fair value less costs to
sell is the amount obtainable from the sale in an arm’s length transaction between knowledgeable, willing
parties, less the costs of disposal. If it is difficult to measure the amount obtainable from the sale, the Group
measures the fair value less costs to sell by reflecting the characteristics of the measured cash-generating unit. If
it is not possible to obtain reliable information to measure the fair value less costs to sell, the Group uses the
asset’s value in use as its recoverable amount. Value in use is the present value of the future cash flows expected
to be derived from an asset or cash-generating unit. The projections of the future cash flows are based on the
most recent financial budget approved by management and generally cover a period of five years. The future
cash flows after projection period are estimated on the assumption that the future cash flows will increase by
3.0% for all other cash-generating units. The key assumptions used for the estimation of the future cash flows are
the market size and the Group’s market share. The discount rate is a pre-tax rate that reflects assumptions
regarding risk-free interest rate, market risk premium and the risks specific to the asset for which the future cash
flow estimates have not been adjusted.
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Woori Bank annual report 2018We Believe in Your Potential
- 86 -
17. ASSETS HELD FOR DISTRIBUTION (SALE)
(1) Assets held for distribution (sale) are as follows (Unit: Korean Won in millions):
Disposal group as held for distribution
Investments in joint ventures and associates
Premises and equipment, etc. (*)
Total
December 31, 2018
75,590
-
17,912
93,502
December 31, 2017
-
46,217
2,407
48,624
(*) The Group classified premises and equipment that are highly likely to be sold within one year as assets held for
distribution (sale).
(2) Disposal group as held for distribution:
In accordance with the establishment of financial holding company and plans on share transfer, the Group
classified assets, liabilities and equity of each subsidiary as of the end of the reporting period. The details of
disposal group held for sale as of December 31, 2018 as follows:
Disposal group as held for distribution
Cash And Cash Equivalents
Financial assets at FVTPL
Loans and other financial assets at amortized cost
Investments in joint ventures and associates
Investment properties
Premises and equipment
Intangible assets
Current tax assets
Deferred tax assets
Others
Total
Liabilities of a disposal group classified as held for
distribution
Debentures
Provisions
Net defined benefit liability
Current tax liabilities
Other financial liabilities
Other liabilities
Total
Gross amount
Intercompany
eliminations
Net amount
90,771
133
66,514
339
127
9,351
10,265
242
9,778
821
188,341
10,000
1,451
34,427
2,519
17,979
6,860
73,236
(55,500)
-
(57,251)
-
-
-
-
-
-
-
(112,751)
-
-
-
-
(576)
-
(576)
35,271
133
9,263
339
127
9,351
10,265
242
9,778
821
75,590
10,000
1,451
34,427
2,519
17,403
6,860
72,660
The Group calculated net fair value of each subsidiary subject to future distribution as of December 31, 2018
based on the value of net asset and net income. The computed value is 110,773 million Won, and classified as
Level 3 in the fair value hierarchy.
The Group measured assets held for distribution (sale) as the smaller amount between the fair value less cost of
sale and book value.
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Woori Bank annual report 2018We Believe in Your Potential - 87 -
18. ASSETS SUBJECT TO LIEN AND ASSETS ACQUIRED THROUGH FORECLOSURES
(1) Assets subjected to lien are as follows (Unit: Korean Won in millions):
Loan at amortized
cost and other
financial assets
Due from banks on time in
local currency
Due from banks in local
currencies
Due from banks in foreign
currencies
Financial assets at
FVTOCI
Korean financial institutions’
debt securities and others
Korean financial institutions’
Securities at
amortized cost
Premises and
equipment
debt securities
Korean treasury and
government bonds
Korean treasury and
government bonds and
others
Land and building
Loan and receivables Due from banks on time in
local currency
Due from banks in local
currencies
Due from banks in foreign
currencies
Financial assets at
FVTPL
Korean financial institutions’
debt securities and others
AFS financial assets Korean treasury and corporate
bonds
December 31, 2018
Collateral given to
Daishin AMC and others
Amount
Reason for collateral
Right of pledge
Samsung Securities Co.,
Ltd. and others
Korea Investment &
Securities Co., Ltd. and
others
The BOK and others
Banco Bilbao Vizcaya
Argentaria, S.A
Korea Securities
Depository
The BOK and others
Credit Counselling &
Recovery Service and
others
Total
1,500
Margin deposit for futures
38,112
or option
Foreign margin deposit for
future or option and others
202,156
2,919,042
33,588
5,552
6,382,188
5,987
9,588,125
Settlement risk and others
Related to bonds sold under
repurchase agreements (*)
Related to bonds sold under
repurchase agreements (*)
Settlement risk and others
Right to collateral and
others
December 31, 2017
Collateral given to
Bank of China and others
Amount
6,629
Samsung Securities Co.,
Ltd. and others
Korea Investment &
Securities Co., Ltd. and
others
Yuanta Securities Co.,
Ltd. and others
Korea Securities
Reason for collateral
Collaterals for issuing letter
of guarantee and others
Margin deposit for futures
10,809
or option
Foreign margin deposit for
future or option and others
9,136
Substitute securities and
501,523
others
Related to bonds sold under
repurchase agreements (*)
Settlement risk and others
Related to bonds sold under
repurchase agreements (*)
Settlement risk and others
Leasehold rights and others
Depository and others
9,998
Korean treasury and
The BOK and others
government bonds and
others
HTM financial assets Korean treasury and
government bonds
Korean financial institutions’
debt securities and others
Land and building
Premises and
equipment
Korea Securities
Depository
The BOK and others
Credit Counselling &
Recovery Service and
others
Total
1,570,608
5,436
7,605,292
6,186
9,725,617
(*) The Group has the agreements to repurchase the sold assets at the predetermined price or the price that includes the rate of
return and to provide the guarantee on the assets. The transferee has the right to sell or to provide as guarantee. Therefore,
the Group does not derecognize the assets, but recognizes the relevant amounts as liability (bonds sold under repurchase
agreements).
207
Woori Bank annual report 2018We Believe in Your Potential - 88 -
(2) There are no the carrying amounts of assets acquired through foreclosure and the carrying amounts of assets acquired
through foreclosure of December 31, 2017 are as follows. (Unit: Korean Won in millions):
Land
Buildings
Total
December 31, 2018
December 31, 2017
-
-
-
332
44
376
(3) Securities loaned are as follows (Unit: Korean Won in millions):
Financial assets
at FVTOCI
AFS financial
assets
Korean financial institutions’
debt securities and others
Korean treasury, government
bonds and others
December 31,
2018
December 31,
2017
40,029
-
Total
-
40,029
170,256
170,256
Loaned to
Korea Securities
Finance Corporation
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.
(4) Collaterals held that can be disposed and re-subjected to lien regardless of defaults of counterparties
Fair values of collaterals held that can be disposed and re-subjected to lien regardless of defaults of
counterparties as of December 31, 2018 and 2017 are as follows (Unit: Korean Won in millions):
Securities
Fair values of collaterals
12,262,041
Fair values of collaterals were disposed or re-subjected to lien
-
December 31, 2018
Securities
Fair values of collaterals
17,671,490
Fair values of collaterals were disposed or re-subjected to lien
-
December 31, 2017
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, 2018
December 31, 2017
160,327
18,448
-
18,057
196,832
130,245
18,363
376
9,420
158,404
208
Woori Bank annual report 2018We Believe in Your Potential - 89 -
20. FINANCIAL LIABILITIES AT FVTPL
(1) Financial liabilities at FVTPL are as follows (Unit: Korean Won in millions):
Financial liabilities at fair value through profit or
loss mandatorily measured at fair value
Financial liabilities held for trading
Financial liabilities at fair value through profit or
loss designated as upon initial recognition
Financial liabilities designated as at FVTPL
Total
December 31, 2018
December 31, 2017
2,117,919
-
164,767
-
2,282,686
-
3,176,113
-
251,796
3,427,909
(2) Financial liabilities at fair value through profit or loss mandatorily measured at fair value(Financial liabilities
held for trading) are as follows (Unit: Korean Won in millions):
Deposits
Gold banking liabilities
Derivative liabilities
Total
December 31, 2018
December 31, 2017
27,058
2,090,861
2,117,919
25,964
3,150,149
3,176,113
(3) Financial liabilities at fair value through profit or loss designated as upon initial recognition(Financial
liabilities designated as at FVTPL) are as follows (Unit: Korean Won in millions):
Equity-linked securities index
Equity-linked securities index in short position
Debentures
Debentures in local currency
Total
December 31, 2018
December 31, 2017
164,767
-
164,767
160,057
91,739
251,796
Financial liabilities at fair value through profit or loss designated as upon initial recognition are designated
in order to eliminate or significantly reduce accounting mismatch arising from recognition or measurement.
(4) Accumulated changes in credit risk adjustments to financial liabilities at fair value through profit or loss
designated as upon initial recognition does not have.
The adjustment to reflect Group’s credit risk is considered in measuring the fair value of equity-linked
securities index and debentures. The Group’s credit risk is determined by adjusting credit spread observed
in credit rating of Group.
(5) The difference between carrying amount and maturity amount of financial liabilities at fair value through
profit or loss designated as upon initial recognition(Financial liabilities designated as at FVTPL) are as
follows (Unit: Korean Won in millions):
Carrying amount
Nominal amount at maturity
Difference
December 31, 2018
December 31, 2017
164,767
217,280
(52,513)
251,796
255,408
(3,612)
209
Woori Bank annual report 2018We Believe in Your Potential - 90 -
(6) Changes in equity in relation to financial liabilities at fair value through profit or loss designated as upon
initial recognition
The cumulative gain or loss realized as a result of the derecognition of financial liabilities designated as at
FVTPL that is presented in other comprehensive income and transferred within equity is 4 million (after
income tax expense) Won for the year ended December 31, 2018.
21. DEPOSITS DUE TO CUSTOMERS
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
Customer deposit for security investment
Certificate of deposits
Other deposits
Sub-total
Deposits in foreign currency:
Deposits in foreign currencies
Present value discount
Total
December 31, 2018
December 31, 2017
11,076,417
204,051,570
30,783
1,891,556
137,316
30,000
6,510,571
1,409,505
225,137,718
9,349,070
194,292,679
34,055
1,323,679
164,431
50,000
4,436,443
1,401,841
211,052,198
23,626,234
(73,013)
248,690,939
23,682,896
(40,010)
234,695,084
22. BORROWINGS AND DEBENTURES
(1) Details of borrowings are as follows (Unit: Korean Won in millions):
December 31, 2018
Lenders
Interest rate (%)
Amount
Borrowings in local currency:
Borrowings from The BOK
Borrowings from government
funds
Others
Sub-total
The BOK
Small Enterprise And Market
Service and others
The Korea Development Bank and
others
Borrowings in foreign currencies:
Borrowings in foreign
The Export-Import Bank of Korea
currencies
Offshore borrowings in
foreign currencies
Sub-total
Bills sold
Call money
Bonds sold under repurchase
agreements
Present value discount
Total
and others
JPMORGAN CHASE BANK
Others
Bank and others
Other financial institutions
0.5 ~ 0.8
0.0 ~ 3.5
0.0 ~ 4.0
0.0 ~ 7.5
2.9
0.0 ~ 1.8
0.0 ~ 7.3
0.8 ~ 12.7
1,335,459
1,771,379
4,716,231
7,823,069
7,308,857
33,543
7,342,400
19,336
975,358
42,907
(84)
16,202,986
210
Woori Bank annual report 2018We Believe in Your Potential - 91 -
December 31, 2017
Lenders
Interest rate (%)
Amount
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
The BOK
Small Enterprise And Market
Service and others
The Korea Development Bank and
others
The Export-Import Bank of Korea
and others
Commonwealth Bank
Bills sold
Call money
Bonds sold under repurchase
Others
Bank and others
Other financial institutions
agreements
Present value discount
Total
0.5 ~ 0.8
0.0 ~ 2.9
0.0 ~ 3.2
0.0 ~ 6.8
1.8
0.0 ~ 1.2
1.5 ~ 2.7
0.6 ~ 12.7
1,404,087
1,723,340
3,957,421
7,084,848
6,996,551
28,285
7,024,836
36,953
635,061
3,173
(165)
14,784,706
(2) Details of debentures are as follows (Unit: Korean Won in millions):
December 31, 2018
December 31, 2017
Interest rate (%)
Amount
Interest rate (%)
Amount
Face value of bond(*):
Ordinary bonds
Subordinated bonds
Other bonds
Sub-total
Discounts on bonds
Total
1.6 ~ 4.5
3.0 ~ 12.6
1.9 ~ 17.0
1.5 ~ 5.8
3.4 ~ 12.6
1.6 ~ 17.0
22,422,183
5,358,838
974,230
28,755,251
(29,389)
28,725,862
22,468,908
4,781,301
649,615
27,899,824
(30,173)
27,869,651
(*) Included debentures under fair value hedge relationships are 2,956,565 million Won and 3,089,751 million Won as
of December 31, 2018 and 2017, respectively. Also, debentures under cash flow hedge amounting to 823,219
million Won and 694,548 million Won are included as of December 31, 2018 and 2017, respectively.
23. PROVISIONS
(1) Details of provisions are as follows (Unit: Korean Won in millions):
Asset retirement obligation
Provisions for guarantees (*1)
Provisions for unused loan commitments
Provisions for customer reward credits
Other provisions (*2)
Total
December 31, 2018
December 31, 2017
67,093
89,761
121,535
49,180
62,293
389,862
61,872
183,247
66,115
40,445
58,791
410,470
(*1) Provisions for guarantees includes provision for financial guarantee of 47,817 million Won and
71,697 million Won as of December 31, 2018 and 2017, respectively.
(*2) Other provisions consist of provision for litigation and others.
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Woori Bank annual report 2018We Believe in Your Potential - 92 -
(2) Changes in provisions for guarantees and unused loan commitments are as follows (Unit: Korean Won in
millions):
1) Provisions for guarantees
Beginning balance (*1)
Replaced with 12-month expected
credit loss
Replaced with expected credit loss for
the entire period
Replaced with credit-impaired
financial assets
Provisions used
Net reversal of unused amount
Others (*2)
Ending balance
For the year ended December 31, 2018
Stage1
47,132
Stage2
18,281
Stage3
127,511
Total
192,924
92
(92)
-
(237)
91,008
(90,771)
-
-
(38)
(20,429)
(4,866)
23,249
44,903
(29)
-
(75,410)
2
33,760
67
-
(25,709)
-
11,098
-
(20,429)
(105,985)
23,251
89,761
(*1) The beginning balance was restated in accordance with K-IFRS 1109.
(*2) This is the effect of new financial guarantee contracts that are initially measured at fair value.
For the year ended December 31, 2017
Provision for guarantees
Beginning balance
Provisions provided
Provisions used and others
Reversal of unused amount
Foreign currencies translation adjustments
Others
Ending balance
2) Provisions for unused loan commitment
238,117
4,876
(24,898)
(60,300)
9
25,443
183,247
Beginning balance (*)
Replaced with 12-month expected
credit loss
Replaced with expected credit loss for
the entire period
Replaced with credit-impaired
financial assets
Net provision(reversal) of unused
amount
Others
Ending balance
For the year ended December 31, 2018
Stage1
75,232
Stage2
27,875
Stage3
1,878
Total
104,985
7,770
(7,396)
(2,376)
2,525
(374)
(149)
(213)
(1,579)
1,792
-
-
-
(5,813)
24
74,624
23,860
-
45,285
(1,521)
-
1,626
16,526
24
121,535
(*) The beginning balance was restated in accordance with K-IFRS 1109.
For the year ended December 31, 2017
Provision for unused loan commitments
Beginning balance
Provisions provided
Provisions used and others
Reversal of unused amount
Foreign currencies translation adjustments
Ending balance
87,909
2,028
(68)
(23,744)
(10)
66,115
212
Woori Bank annual report 2018We Believe in Your Potential - 93 -
(3) Changes in asset retirement obligation are as follows (Unit: Korean Won in millions):
Beginning balance
Provisions provided
Provisions used
Reversal of provisions unused
Amortization
Increase in restoration costs and others
Ending balance
For the years ended December 31
2017
2018
61,872
1,489
(913)
(1,038)
564
5,119
67,093
58,076
2,225
(1,283)
(733)
428
3,159
61,872
The amount of the asset retirement obligation is the present value of the best estimate of future expected
expenditure to settle the obligation – arising from leased premises as of December 31, 2018, discounted by
appropriate discount rate. The restoration cost is expected to occur by the end of each premise’s lease period, and
the Group has used average lease period of each category of leases terminated during the past years in order to
rationally estimate the lease period. In addition, the Group used average amount of actual recovery cost for the
past 3 years and the inflation rate for last year in order to estimate future recovery cost.
(4) Changes in other provisions are as follows (Unit: Korean Won in millions):
Beginning balance
Provisions provided
Provisions used
Reversal of unused amount
Foreign currencies translation
adjustments
Transfer (*)
Others
Ending balance
Beginning balance
Provisions provided
Provisions used
Reversal of unused amount
Foreign currencies translation
adjustments
Transfer (*)
Others
Ending balance
For the year ended December 31, 2018
Provisions for customer
reward credits
Other
provisions
Total
40,445
70,138
(98,170)
-
-
9,228
27,539
49,180
58,791
8,384
(6,940)
(52)
(194)
-
2,304
62,293
99,236
78,522
(105,110)
(52)
(194)
9,228
29,843
111,473
For the years ended December 31, 2017
Provisions for customer
reward credits
Other
provisions
Total
22,093
62,593
(84,979)
-
-
21,808
18,930
40,445
22,282
42,042
(8,014)
(77)
(249)
-
2,807
58,791
44,375
104,635
(92,993)
(77)
(249)
21,808
21,737
99,236
(*) As the credits of the affiliates were transferred to the Group, the allowance for the provisions for customer reward
credits increased for the years ended December 31, 2018, and 2017, respectively.
(5) Others
The Group provides settlement services for payments in Korean Won 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 the following countries: Iran, Sudan, Syria and Cuba, which have been sanctioned by the US.
213
Woori Bank annual report 2018We Believe in Your Potential - 94 -
24. NET DEFINED BENEFIT LIABILITY
The characteristics of the Group’s defined benefit retirement pension plans 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 salary 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 are as follows (Unit: Korean Won in millions):
Present value of defined benefit obligation
Fair value of plan assets
Net defined benefit liability
December 31, 2018
December 31, 2017
1,209,669
(1,070,987)
138,682
1,071,170
(1,027,906)
43,264
(2) Changes in the carrying value of defined benefit obligation are as follows (Unit: Korean Won in millions):
Beginning balance
Current service cost
Interest cost
Remeasurements
Foreign currencies translation adjustments
Retirement benefit paid
Curtailment or settlement
Transfer to assets held for distribution (sale)
Others
Ending balance
For the year ended
December 31, 2018
1,071,170
144,394
32,143
100,854
(3)
(74,952)
-
(65,351)
1,414
1,209,669
For the year ended
December 31, 2017
984,381
146,750
26,629
(20,389)
(279)
(55,552)
(10,928)
-
558
1,071,170
214
Woori Bank annual report 2018We Believe in Your Potential - 95 -
(3) Changes in the plan assets are as follows (Unit: Korean Won in millions):
Beginning balance
Interest income
Remeasurements
Employer’s contributions
Retirement benefit paid
Curtailment or settlement
Transfer to assets held for distribution (sale)
Others
Ending balance
For the year ended
December 31, 2018
For the year ended
December 31, 2017
1,027,906
33,825
(14,783)
128,926
(71,672)
-
(30,924)
(2,291)
1,070,987
990,653
30,601
(14,125)
43,114
(51,877)
(11,052)
-
40,592
1,027,906
(4) Plan assets wholly consist of fixed deposits as of December 31, 2018 and 2017. Among plan assets,
realized returns on plan assets amount to 19,042 million Won and 16,476 million Won for the years ended
December 31, 2018 and 2017, respectively.
Meanwhile, the contribution expected to be paid in the next accounting year amounts to 161,571 million
Won.
(5) Current service cost, net interest income, loss (gain) on the curtailment or settlement and remeasurements
recognized in the consolidated statements comprehensive income are as follows (Unit: Korean Won in
millions):
Current service cost
Net interest income
Loss on the curtailment or settlement
Cost recognized in net income
Remeasurements
Cost recognized in total comprehensive income
For the year ended
December 31, 2018
144,394
(1,682)
-
142,712
115,637
258,349
For the year ended
December 31, 2017
146,750
(3,972)
124
142,902
(6,264)
136,638
Retirement benefit service costs related to defined contribution plans amount to 2,437 million Won and
3,946 million Won for the years ended December 31, 2018 and 2017, respectively.
(6) Key actuarial assumptions used in net defined benefit liability measurement are as follows:
Discount rate
Future wage growth rate
Mortality rate
Retirement rate
December 31, 2018
2,69%
6.18%
Issued by Korea Insurance
Development Institute
Experience rate for each
employment classification
December 31, 2017
3.18%
6.18%
Issued by Korea Insurance
Development Institute
Experience rate for each
employment classification
The weighted average maturity of defined benefit liability is 8.05 ~ 13.21 years.
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(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, 2018(*)
(116,812)
136,990
135,767
(118,020)
December 31, 2017(*)
(116,405)
137,151
136,707
(117,765)
(*) The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant.
In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. The sensitivity of the
defined benefit obligation to changes in principal actuarial assumptions is calculated using the projected unit credit
method, the same method applied when calculating the defined benefit obligations recognized on the statement of
financial position.
25. OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES
Other financial liabilities and other liabilities are as follows (Unit: Korean Won in millions):
December 31, 2018
December 31, 2017
Other financial liabilities:
Accounts payable
Accrued expenses
Borrowings from trust accounts
Agency business revenue
Foreign exchange payables
Domestic exchange settlement credits
Other miscellaneous financial liabilities
Present value discount
Sub-total
Other liabilities:
Unearned income
Other miscellaneous liabilities
Sub-total
Total
5,407,025
2,212,350
3,747,492
396,735
539,554
7,134,966
1,990,426
(2,484)
21,426,064
204,034
134,241
338,275
21,764,339
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
216
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26. DERIVATIVES
(1) Derivative assets and derivative liabilities are as follows (Unit: Korean Won in millions):
December 31, 2018
Assets
Liabilities
For trading
For cash flow
hedge
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
Total
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
-
-
-
-
35,503
-
31,377
143,029
-
2,026,079
Nominal
amount
-
150,710,490
530,000
525,000
320,213
88,376,776
67,179,195
1,933,454
3,134,774
186,737
441,573
4,925,315
6,145,935
324,409,462
Nominal
amount
75,845
130,197,378
630,000
795,000
318,217
72,526,956
48,176,306
2,291,154
4,038,237
91,436
15,000
5,060,706
4,504,290
For fair
value
hedge
-
35,503
-
-
-
-
-
-
-
For fair
value
hedge
-
59,272
-
-
-
-
-
-
-
-
-
-
-
-
218,140
10,461
-
-
843,621
761,907
17,544
-
-
223,935
12,346
-
-
1,314,368
1,352,924
64,267
-
-
103
146,775
-
-
7,805
-
5,000
268,733,330
-
-
-
-
59,272
-
1,056
-
-
3,115,774
-
665
-
-
-
-
33,089
-
-
-
-
-
-
33,754
-
17,654
-
-
-
-
-
-
-
-
266,207
-
12,438
-
777,039
773,701
-
20,747
-
-
-
-
17,654
-
1,217
-
239,512
2,090,861
-
-
-
-
-
-
55,651
-
-
-
-
-
-
-
-
-
-
55,651
-
12,103
-
-
-
-
-
-
-
-
-
-
-
-
253,972
-
12,869
-
1,375,799
1,347,905
-
58,687
-
10
-
99,770
-
-
-
-
12,103
-
1,037
-
100
3,150,149
December 31, 2017
Assets
Liabilities
For trading
For cash flow
hedge
For fair value
hedge
For trading
Derivatives held for trading are classified into financial assets at FVTPL (Note 7) and financial liabilities at
FVTPL (Note 20), and derivatives designated for hedging are presented as a separate line item in the
consolidated statements of financial position.
217
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(2) Overview of the Group’s hedge accounting
1) Fair value hedge
As of the current period end, the Group has applied fair value hedge on fixed interest rate foreign currency
denominated debentures amounting to 2,956,565 million Won. The purpose of the hedging is to avoid fair
value volatility risk of fixed interest rate foreign currency denominated debentures derived from
fluctuations of market interest rate, and as such the Group entered into interest rate swap agreements
designated as hedging instruments.
Pursuant to the interest rate swap agreement, by swapping the calculated difference between the fixed
interest rate and floating interest rate applied to the nominal value, the fair value fluctuation risk is hedged
as the foreign currency denominated debentures fixed interest rate terms are converted to floating interest
rate. Pursuant to the interest rate swap agreement, hedge ratio is determined by matching the nominal value
to the face value of the hedging instrument.
In this hedging relationship, only the market interest rate fluctuation, which is the most significant part of
the fair value change of the hedged item, is designated as the hedged risk, and other risk factors including
credit risk are not included in the hedged risk. Therefore, the ineffective portion of the hedge could arise
from fluctuations in the timing of the cash flow of the hedged item, the change in the total amount and price
of the hedged item, or significant credit risk fluctuation of either party of the hedging instrument.
The interest rate swap agreements and the hedged items are subject to fluctuations in the underlying market
rate of interest and the Group expects the fair value of the interest rate swap contract and the value of the
hedged item to generally change in the opposite direction.
The fair value of the interest rate swap at the end of the reporting period is determined by discounting future
cash flows estimated using the yield curve at the end of the reporting period and the credit risk embedded in
the contract and the average interest rate is determined based on the outstanding balance at the end of the
reporting period. The variable interest rate applied to the interest rate swap is USD Libor 3M (6M) plus
spread. In accordance with the terms of each interest rate swap contract designated as a hedging instrument,
the Group receives interest at a fixed interest rate and pays interest at a variable interest rate.
2) Cash Flow Hedge
As of the end of the current period, the Group has applied cash flow hedge on foreign currency
denominated debentures amounting to 723,308 million Won and debentures on local currency amounting to
99,911 million Won. The Group’s hedging strategies are to ① Mitigate risks of cash flow fluctuation from
variable interest rate debentures due to changes in market interest rate by entering into an interest rate swap
contract and thereby designating it as hedging instrument; ② Mitigate the risks of cash flow fluctuation
from principal and interest of variable-interest rate debentures denominated in foreign currency due to
changes in foreign exchange rates and interest rates by entering into a currency swap contract and thereby
designating it as hedging instrument; and ③ Mitigate the risks of cash flow fluctuation from principal and
interest of fixed-interest rate debentures denominated in foreign currency due to changes in foreign
exchange rates by entering into a currency swap contract and thereby designating it as hedging instrument.
This means exchanging a predetermined nominal amount as set forth in the interest rate swap contract
adjusted by the differences between the fixed and variable interest rates, which results in the conversion of
interest rates of debentures from variable interest into fixed interest, eliminating the cash flow fluctuation
risk.
In addition, this also means a payment of predetermined principal amount as set forth in the currency swap
adjusted by fixed interest rate, an exchange of an amount calculated by applying variable interest rate to
USD or applying fixed interest rate to SGD, and an exchange of the principal denominated in KRW and
principal denominated in foreign currency at maturity eliminating cash flow fluctuation risk on principal
and interest.
218
Woori Bank annual report 2018We Believe in Your Potential - 99 -
The hedge ratio is determined by matching the nominal amount of the hedging instrument to the face
amount of the hedged item in accordance with interest rate swap and currency swap.
Only interest rate and foreign exchange rate fluctuation risk, which is the most significant factor in the cash
flow fluctuation of the hedged item, is addressed in this hedging relationship, and other risk factors such as
credit risk are not subject to hedging.
Thus, there could be hedge ineffectiveness arising from price margin set by the counterparty of hedging
instruments and unilateral change in credit risk of any party to the transaction.
The interest rate swap, currency swap contract and the hedged item are all affected by the changes in market
interest rate and foreign exchange rates which are basic factors of the derivative. The Group expects that the
value of currency swap contract and the hedged item will generally fluctuate in opposite direction.
(3) The nominal amounts of the hedging instrument as of December 31, 2018 are as follows (Unit: USD, SGD
and Korean Won in millions):
1 year or less
1 year to 5
years
More than 5
years
Total
Fair value hedge
Interest rate risk
Interest rate swap(USD)
Cash flow hedge
Interest rate risk
Interest rate swap(KRW)
Foreign currencies translation risk and
interest rate risk
Currency swap(USD)
Foreign currencies translation risk
Currency swap(SGD)
1,350,000,000
1,300,000,000
2,650,000,000
-
-
100,000
-
-
-
100,000
500,000,000
204,000,000
50,000,000
450,000,000
-
204,000,000
(4) The average interest rate and average currency rate of the hedging instrument as of December 31, 2018 are
as follows:
Fair value hedge
Interest rate risk
Interest rate swaps(USD)
Cash flow hedge
Interest rate risk
Interest rate swap(KRW)
Foreign currencies translation risk
and interest rate risk
Currency swap(USD)
Foreign currencies translation risk
Currency swap(SGD)
Average interest rate and average currency rate
Fixed 3.96% receipt and Libor 3M+1.61% floating paid
Fixed 5.88% receipt and Libor 6M+2.15% floating paid
KRW 3Y CMS+0.395% receipt, KRW 2.38% paid
USD 3M Libor+0.7% receipt, KRW 1.74% paid, USD/KRW = 1,136
USD 1M Libor+0.517% receipt, KRW 1.70% paid, USD/KRW = 1,178
SGD 1.91% receipt, KRW 1.98% paid, SGD/KRW = 828
219
Woori Bank annual report 2018We Believe in Your Potential - 100 -
(5) The amounts related to items designated as hedging instruments as of December 31, 2018 are as follows
(Unit: USD, SGD and Korean Won in millions):
Carrying amounts of the hedging
instrument
Nominal amounts of
the hedging
instrument
Assets
Liabilities
Line item in the
statement of financial
position where the
hedging instrument is
located
Changing in fair
value used for
calculating hedge
ineffectiveness
2,650,000,000
35,503
17,654
Derivative assets
(Designated for hedging)
Derivative liabilities
(Designated for hedging)
100,000
500,000,000
204,000,000
-
-
-
Derivative liabilities
(Designated for hedging)
665
28,907
Derivative liabilities
(Designated for hedging)
4,182
Derivative liabilities
(Designated for hedging)
(27,362)
(665)
21,582
2,353
Fair value hedge
Interest rate risk
Interest rate
swaps(USD)
Cash flow hedge
Interest rate risk
Interest rate
swap(KRW)
Foreign currencies
translation risk
and interest rate
risk
Currency swap
(USD)
Foreign currencies
translation risk
Currency swap
(SGD)
(6) Details of carrying amount to hedged and amount adjusted due to hedge accounting as of December 31,
2018 are as follows (Unit: Korean won in millions):
Carrying amounts of the
hedging item
Accumulated amount of fair
value hedge adjustments on
the hedged item included in
the carrying amount of the
hedged item
Assets
Liabilities
Assets
Liabilities
Line item in the
statement of
financial position
in which the
hedged item is
included
Changing in
fair value used
for calculating
hedge
ineffectiveness
Cash flow
hedge
reserve (*)
Fair value hedge
Interest rate risk
Debenture
Cash flow hedge
Interest rate risk
Debenture
Foreign currencies
translation risk
and interest rate
risk
Debenture
Foreign currencies
translation risk
Debenture
(*) After tax amount
-
-
-
-
2,956,565
-
5,200
Debentures
25,498
-
99,911
557,186
166,122
-
-
-
Debentures
521
(371)
Debentures
(16,790)
(1,211)
Debentures
(1,762)
(2,287)
(7) Amounts recognized in profit or loss due to the ineffective portion of fair value hedges during the current
period are as follows (Unit: Korean Won in millions):
Fair value hedge
Interest rate risk
Hedge ineffectiveness
recognized in profit or loss
(1,864)
Line item in the profit that includes hedge
ineffectiveness
Other net operating income
220
Woori Bank annual report 2018We Believe in Your Potential
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(8) Reclassification of profit or loss from other comprehensive income and equity related to cash flow hedges
is as follows (Unit: Korean Won in millions):
Changes in
the value of
hedging
instruments
recognized in
cash flow
hedge reserve
Hedge
ineffective
ness
recognize
d in profit
or loss
Changes in
the value
of foreign
basis
spread
recognized
in OCI
(517)
(148)
-
21,429
153
(882)
2,353
-
(491)
Amounts
reclassified
from cash
flow hedge
reserve to
profit or
loss
-
(23,084)
(3,601)
Line item
affected in profit
or loss because of
the
reclassification
Other net
operating
expense
Other net
operating
expense
Other net
operating
expense
Line item in the
profit or loss that
includes hedge
ineffectiveness
Other net
operating
expense
Other net
operating
income
(expense)
Other net
operating
income
Cash
flow
hedge
Interest rate risk
Foreign currencies
translation risk
and interest rate
risk
Foreign currencies
translation risk
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 losses
Ending balance
For the years ended December 31
2017
2018
7,416
23,678
(5,631)
25,463
13,422
500
(6,506)
7,416
In case some variables to measure fair values of financial instruments are not observable in the market, valuation
techniques are utilized to evaluate such financial instruments. Those financial instruments are recorded the
transaction price 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 shares authorized and others are as follows:
Shares of common stock authorized
Par value
Shares of common stock issued
Capital stock
December 31, 2018
5,000,000,000 Shares
5,000 Won
676,000,000 Shares
3,381,392 million Won
December 31, 2017
5,000,000,000 Shares
5,000 Won
676,000,000 Shares
3,381,392 million Won
(2) There are no changes in the number of shares issued and outstanding for the years ended December 31, 2018
and 2017.
(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, 2018
December 31, 2017
269,533
16,356
285,889
269,533
16,347
285,880
221
Woori Bank annual report 2018We Believe in Your Potential
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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
April 25, 2013
Maturity
June 20, 2038
April 25, 2043
November 13, 2013 November 13, 2043
December 12, 2014 December 12, 2044
June 3, 2015
July 26, 2018
June 10, 2015
September 27, 2016
May 16, 2017
June 3, 2045
-
June 10, 2045
-
-
Securities in local
currency
Securities in
foreign currencies
Issuance cost
Total
Interest rate
(%)
7.7
4.4
5.7
5.2
4.4
4.4
5.0
4.5
5.3
December
31, 2018
December
31, 2017
-
500,000
200,000
160,000
240,000
400,000
559,650
553,450
562,700
(13,837)
3,161,963
255,000
500,000
200,000
160,000
240,000
-
559,650
553,450
562,700
(12,912)
3,017,888
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.
30. OTHER EQUITY
(1) Details of other equity are as follows (Unit: Korean Won in millions):
Accumulated other comprehensive loss:
Net loss on valuation of financial assets at FVTOCI
Gain on valuation of AFS financial assets
Gain on financial liabilities at FVTPL(K-IFRS
1109) designated as upon initial recognition due to
own credit risk
Share of other comprehensive gain(loss) of joint
ventures and associates
Loss on foreign currency translation of foreign
operations
Remeasurement loss related to defined benefit plan
Gain (loss) on valuation of derivatives designated as
cash flow hedges
Equity related to assets held for distribution (sale)
Sub-total
Treasury shares
Other capital adjustments(*)
Total
December 31, 2018
December 31, 2017
(87,182)
-
-
302
(244,735)
(223,529)
(3,869)
(13,197)
(572,210)
(34,113)
(1,607,647)
(2,213,970)
-
301,930
-
(1,251)
(242,700)
(152,624)
777
4,145
(89,723)
(34,113)
(1,815,438)
(1,939,274)
(*) Other capital adjustments include gain or loss on capital transactions that was recognized in 2014 as a result
of the merger of Woori Bank and Woori Finance Holdings Co., Ltd.
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(2) Changes in the accumulated other comprehensive loss, net of tax, are as follows (Unit: Korean Won in
millions):
For the year ended December 31, 2018
Related to
assets held
for
distribution
(sale)
Reclassification
adjustments
Increase
(decrease)
(*2)(*3)
Beginning
balance (*1)
(88,906)
(8,677)
8,015
(96)
132
(2,656)
4,080
(242,806)
(2,661)
(152,358)
(85,007)
-
-
-
-
Income tax
effect
Ending
balance
2,386
(87,182)
(36)
-
(1,122)
302
732
(244,735)
-
-
-
-
(13,197)
27,033
(223,529)
777
30,655
4,145
(481,900)
(17,342)
(78,820)
(26,871)
-
(18,856)
-
(8,430)
(3,869)
-
(13,197)
-
20,563
(13,197)
(572,210)
Net gain (loss) on valuation of
financial assets at FVTOCI
Gain (loss) on financial liabilities
at FVTPL (K-IFRS 1109)
designated as upon initial
recognition due to own credit
risk
Share of other comprehensive
gain (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
derivatives designated as cash
flow hedges
Transfer to assets held for
distribution (sale)
Total
(*1) The beginning balance was adjusted in accordance with K-IFRS 1109.
(*2) Net gain (loss) on valuation of financial assets at FVTOCI included the 1,009 million Won transfer to retained
earnings due to disposal of equity securities.
(*3) Gain (loss) on financial liabilities at fair value through profit or loss designated as upon initial recognition due to
own credit risk included the 4 million Won transfer to retained earnings due to redemption.
For the year ended December 31, 2017
Reclassif-
ication
adjustments(*)
Increase
(decrease)(*)
Income tax
effect
Ending
balance
Beginning
balance
Gain (loss) on valuation of AFS
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
Transfer to assets held for sale
Total
386,981
80,997
(164,803)
(1,245)
301,930
(1,863)
2,516
(48,353)
(193,272)
(163,397)
6,216
-
-
-
(1,904)
(1,251)
(1,075)
(242,700)
4,557
(152,624)
-
-
173,368
1,025
4,145
(98,373)
-
-
(164,803)
(248)
-
85
777
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” represents disposal or recognition of impairment
losses on AFS financial assets.
223
Woori Bank annual report 2018We Believe in Your Potential - 104 -
31. RETAINED EARNINGS AND OTHER RESERVE
(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
December 31, 2018 December 31, 2017
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
1,857,754
46,384
1,904,138
8,000
235,400
7,759,804
2,578,457
715,860
-
11,297,521
3,922,998
17,124,657
(*) The unappropriated retained earnings for the current period has been restated in accordance with K-IFRS 1109.
i. Earned surplus reserve
In accordance with the Article 40, Banking Act, earned surplus reserve is 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 are
an Autonomous judgment matter of the Group since 2015.
v. Additional reserve
Additional reserve was appropriated for capital adequacy and other management purpose.
vi. Regulatory reserve for credit loss
In accordance with paragraphs 1 and 2 of Article 29 of the Regulation on Supervision of Banking Business
(“RSBB”), if provisions for credit loss under K-IFRS for the accounting purpose are lower than
provisions under RSBB, the Bank limits such shortfall amount as regulatory reserve for credit loss.
224
Woori Bank annual report 2018We Believe in Your Potential
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vii. Revaluation reserve
In accordance with attached table 3 of the Regulation on Supervision of Banking Business Enforcement
Rules Revaluation reserve is the amount of limited dividends set by the board of directors to be
recognized as complementary capital when the gain or loss occurred in the property revaluation by
adopting K-IFRS.
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”), the Group shall disclose the difference as the planned regulatory reserve for credit loss. The planned
provision (reversal) is recognized subsequent to December 31, 2018.
(1) Balance of the planned regulatory reserve for credit loss is as follows (Unit: Korean Won in millions):
Balance as at December 31
Planned provision (reversal) of regulatory reserve for credit
loss
Balance after recognizing the planned provision(reversal)
December 31,
2018
2,578,457
December 31,
2017
2,438,191
(222,211)
2,356,246
140,266
2,578,457
(2) Planned reserves provided, adjusted net income after the planned reserves provided and adjusted EPS after
the planned reserves provided are as follows (Unit: Korean Won in millions, except for EPS 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
2018
2,051,649
40,875
2,010,774
2017
1,530,088
140,266
1,389,822
2,762
1,817
(*) The amount of reserve for credit loss for the year ended December 31, 2018 is calculated considering only the
change in the reserve for credit loss after the accounting policy change due to adoption of K-IFRS 1109. Therefore, the
effect of reducing the reserve for credit losses due to changes in accounting policies was excluded.
33. DIVIDENDS
Dividends for the years 2018 and 2017 are 650 Won and 500 Won, respectively, and the total amount of
dividends paid are 437,626 million Won and 336,636 million Won, respectively. The dividends for the
current period will be submitted as an agenda in the upcoming annual shareholders’ meeting scheduled on
March 27, 2019.
225
Woori Bank annual report 2018We Believe in Your Potential
- 106 -
34. NET INTEREST INCOME
(1) Interest income recognized is as follows (Unit: Korean Won in millions):
For the years ended December 31
2018
2017
Financial assets at FVTPL
(K-IFRS 1109)
Financial assets at FVTOCI
Financial assets at amortized cost
Securities at amortized cost
Loans and other financial assets at
amortized cost:
Interest on due from banks
Interest on loans
Interest of other receivables
Sub-total
Financial assets at FVTPL
(K-IFRS 1039)
AFS financial assets
HTM financial assets
Loans and receivables:
Interest on due from banks
Interest on loans
Interest of other receivables
Sub-total
Total
54,243
280,371
376,788
112,581
8,832,485
28,031
9,349,885
-
-
-
-
-
-
-
9,684,499
(2)
Interest expense recognized are as follows (Unit: Korean Won in millions):
For the years ended December 31
2018
2017
Interest on deposits due to customers
Interest on borrowings
Interest on debentures
Other interest expense
Total
2,917,165
306,739
720,394
89,250
4,033,548
-
-
-
-
-
-
-
53,348
239,030
307,965
83,325
7,835,957
31,062
7,950,344
8,550,687
2,380,263
238,212
638,653
72,909
3,330,037
35. NET FEES AND COMMISSIONS INCOME
(1) Details of fees and commissions income recognized are as follows (Unit: Korean Won in millions):
Fees and commission received for brokerage
Fees and commission received related to credit
Fees and commission received for electronic finance
Fees and commission received on foreign exchange handling
Fees and commission received on foreign exchange
Fees and commission received for guarantee
Fees and commission received on credit card
Fees and commission received on securities business
Fees and commission from trust management
Fees and commission received on credit Information
Other fees
Total
For the years ended December 31
2018
2017
162,344
173,233
121,250
60,433
66,036
65,254
598,705
96,379
177,456
12,985
146,689
1,680,764
164,041
166,364
110,105
58,383
61,552
65,779
1,072,423
80,872
141,766
11,737
136,176
2,069,198
226
Woori Bank annual report 2018We Believe in Your Potential - 107 -
(2) Details of fees and commissions expense incurred are as follows (Unit: Korean Won in millions):
Fees and commissions paid
Credit card commission
Brokerage commission
Others
Total
36. DIVIDEND INCOME
For the years ended December 31
2018
2017
174,669
428,613
1,833
5,675
610,790
164,834
828,363
558
4,977
998,732
(1) Details of dividend income recognized are as follows (Unit: Korean Won in millions):
Financial assets at FVTPL (K-IFRS 1109)
Financial assets at FVTPL (K-IFRS 1039)
Financial assets at FVTOCI
AFS financial assets
Total
For the years ended December 31
2017
2018
67,892
-
22,660
-
90,552
-
446
-
124,546
124,992
(2) Details of dividends related to financial assets at FVTOCI are as follows (Unit: Korean Won in millions):
Dividend income recognized from assets held
Equity securities
Dividend income recognized in assets derecognized
Total
For the year ended December 31, 2018
22,386
274
22,660
37. NET GAIN OR LOSS ON FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR
LOSS MANDATORILY MEASURED AT FAIR VALUE (K-IFRS 1109 AND 1039)
(1) Details of gain or loss related to net gain or loss on financial instruments at FVTPL (K-IFRS 1109 and
1039) are as follows (Unit: Korean Won in millions):
Gain on financial instruments at fair value through profit o
r loss mandatorily measured at fair value
Gain on financial instruments held for trading
Gain on financial instruments at fair value through profit
or loss designated as upon initial recognition
Loss on financial instruments designed as at fair value
through profit or loss
Total
For the years ended December 31
2018
2017
196,959
-
17,484
-
214,443
-
6,123
-
(110,950)
(104,827)
227
Woori Bank annual report 2018We Believe in Your Potential - 108 -
(2) Details of net gain or loss on financial instruments at fair value through profit or loss mandatorily measured
at fair value and financial instruments held for trading are as follows (Unit: Korean Won in millions):
For the years ended December 31
2018
2017
Financial
assets at
FVTPL
(financial
assets held
for trading)
Securities
Loans
Other
financial
assets
Gain on valuation
Gain on disposals
Loss on valuation
Loss on disposals
Sub-total
Gain on valuation
Gain on disposals
Loss on valuation
Loss on disposals
Sub-total
Gain on valuation
Gain on disposals
Loss on valuation
Loss on disposals
Sub-total
Sub-total
Derivatives
(for trading)
Interest rate
derivatives
Currency
Gain on transactions and
valuation
Loss on transactions and
valuation
Sub-total
Gain on transactions and
derivatives
valuation
Loss on transactions and
valuation
Sub-total
Gain on transactions and
Equity
derivatives
valuation
Loss on transactions and
valuation
Sub-total
Gain on transactions and
Other
derivatives
valuation
Loss on transactions and
valuation
Sub-total
Sub-total
Total
137,237
45,105
(25,499)
(26,728)
130,115
1,606
4,136
(4,805)
(117)
820
2,050
530
(2,280)
(86)
214
131,149
1,255,581
(1,303,244)
(47,663)
4,935,922
(4,822,915)
113,007
486,560
(484,986)
1,574
4,138
(5,246)
(1,108)
65,810
196,959
2,764
20,528
(13,757)
(6,466)
3,069
-
-
-
-
-
-
6,524
2,353
(7,885)
(619)
373
3,442
1,088,192
(1,043,312)
44,880
7,253,426
(7,408,741)
(155,315)
511,220
(397,462)
113,758
4,056
(4,698)
(642)
2,681
6,123
(3)
Details of net gain(loss) on financial instruments at fair value through profit or loss designated as upon
initial recognition and Losses on financial instruments designated as at fair value through profit or loss are
as follows (Unit: Korean Won in millions):
Gain(loss) on equity-linked securities:
Loss on disposal of equity-linked securities
Gain(loss) on valuation of equity-linked securities
Sub-total
Gain on other securities:
Gain on valuation of other securities
Gain on other financial instruments:
Gain on valuation of other financial instruments
Total
For the years ended December 31
2017
2018
(2,058)
17,945
15,887
-
1,597
17,484
(79,965)
(32,511)
(112,476)
290
1,236
(110,950)
228
Woori Bank annual report 2018We Believe in Your Potential
- 109 -
38. NET GAIN OR LOSS ON FINANCIAL ASSETS AT FVTOCI AND AFS FINANCIAL ASSETS
Details of net gain or loss on financial assets at FVTOCI and AFS financial assets recognized are as follows
(Unit: Korean Won in millions):
Gain on redemption of securities
Gain on transactions of securities
Impairment loss on securities
Total
For the years ended December 31
2017
2018
53
1,994
-
2,047
47
223,961
(31,300)
192,708
39. IMPAIRMENT REVERSAL(LOSS) DUE TO CREDIT LOSS
Impairment reversal (loss) due to credit loss are as follows (Unit: Korean Won in millions):
Impairment loss due to credit loss on
financial assets measured at FVTOCI
Impairment loss due to credit loss on securities at amortized cost
Reversal(provision) for credit loss on loan
and other financial assets at amortized cost
Impairment loss due to credit loss
Reversal of provision on guarantee
Reversal of provision on (provision for) unused loan commitment
Total
For the years ended December 31
2018
2017
(2,027)
(1,922)
(415,084)
-
105,985
(16,526)
(329,574)
-
-
-
(862,273)
55,424
21,716
(785,133)
229
Woori Bank annual report 2018We Believe in Your Potential - 110 -
40. GENERAL AND ADMINISTRATIVE EXPENSES AND OTHER NET OPERATING INCOME
(EXPENSES)
(1) Details of general and administrative expenses recognized are as follows (Unit: Korean Won in millions):
For the years ended December 31
Salaries
Salaries
Employee benefits
Short-term
employee
benefits
Retirement benefit service costs
Termination
Sub-total
Depreciation and amortization
Other general
and
administrative
expenses
Rent
Taxes and public 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
2018
1,484,236
468,012
145,149
225,106
2,322,503
216,735
321,198
115,454
222,530
88,689
70,618
43,540
72,450
8,601
12,757
7,071
8,355
23,474
17,384
14,686
10,264
47,724
1,084,795
3,624,033
2017
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
(2) Details of other operating income recognized are as follows (Unit: Korean Won in millions):
Gain on transactions of foreign exchange
Gain on disposals of loans and receivables (*1)
Gain related to derivatives(Designated for hedging)
Gain on fair value hedged items
Others (*2)
Total
For the years ended December 31
2018
2017
1,227,561
-
35,810
42,797
82,417
1,388,585
3,391,095
205,490
122
53,532
86,159
3,736,398
(*1) Gain (loss) on disposal of loan and receivables occurred during the year ended December 31, 2018 was
presented as a separate account named ‘Net gain related to financial assets at amortized cost’ in accordance with
the adoption of K-IFRS 1109.
(*2) Other income includes income amounting to 29,316 million Won and 29,336 million Won, for the years ended
December 31, 2018 and 2017, respectively, that the Group recognized for it is to receive from other creditor
financial institutions in accordance with the creditor financial institutions committee agreement.
230
Woori Bank annual report 2018We Believe in Your Potential - 111 -
(3) Details of other operating expenses recognized are as follows (Unit: Korean Won in millions):
Losses on transactions of foreign exchange
KDIC deposit insurance premium
Contribution to miscellaneous funds
Losses on disposals of loans and receivables(*1)
Losses related to derivatives (Designated for hedging)
Losses on fair value hedged items
Others (*2)
Total
For the years ended December 31
2018
2017
991,423
315,315
298,416
-
36,483
17,299
124,240
1,783,176
2,886,535
304,055
286,000
9,221
109,569
-
172,331
3,767,711
(*1) Loss on disposal of loan and receivables occurred during the year ended December 31, 2018 was presented as a
separate account named ‘Net gain related to financial assets at amortized cost’ in accordance with the adoption of
K-IFRS 1109.
(*2) Other expense includes such expenses amounting to 1,594 million Won and 5,237 million Won for the years
ended December 31, 2018 and 2017, 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, in includes 51,770 million Won and 48,292 million Won, respectively, of intangible asset amortization
expense.
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):
Gains on valuation of investments in joint ventures and associates
Losses on valuation of investments in joint ventures and associates
Impairment losses of investments in joint ventures and associates
Total
For the years ended December 31
2018
25,791
(22,595)
(177)
3,019
2017
83,506
(70,117)
(114,903)
(101,514)
(2) Details of other non-operating income and expenses recognized are as follows (Unit: Korean Won in
millions):
Other non-operating incomes
Other non-operating expenses
Total
For the years ended December 31
2017
2018
129,709
(87,157)
42,552
84,361
(190,083)
(105,722)
(3) Details of other non-operating income recognized are as follows (Unit: Korean Won in millions):
Rental fee income
Gains on disposal of investments in joint ventures and associates
Gains on disposal of premises and equipment, intangible
assets and other assets
Reversal of impairment loss of premises and equipment,
intangible assets and other assets
Others
Total
For the years ended December 31
2018
2017
6,835
50,511
30,278
761
41,324
129,709
6,973
39,932
5,028
666
31,762
84,361
231
Woori Bank annual report 2018We Believe in Your Potential - 112 -
(4) Details of other non-operating expenses recognized are as follows (Unit: Korean Won in millions):
Depreciation on investment properties
Interest expenses of refundable deposits
Losses on disposal of investment in
joint ventures and associates
Losses on disposal of premises and equipment,
intangible assets and other assets
Impairment losses of premises and equipment,
intangible assets and other assets
Donation
Others
Total
For the years ended December 31
2017
2018
4,045
620
2,931
1,160
87
51,983
26,331
87,157
3,902
459
38,713
9,994
390
98,132
38,493
190,083
42. INCOME TAX EXPENSE
(1) Details of income tax expenses are as follows (Unit: Korean Won in millions):
Current tax expense:
Current tax expense with respect to the current period
Adjustments recognized in the current period in relation to the
tax expense of prior periods
Sub-total
Deferred tax expense(income):
Changes in deferred tax assets (liabilities) relating to the
temporary differences
Income tax expense
For the years ended December 31
2018
2017
432,645
5,923
438,568
314,655
753,223
471,669
(5,209)
466,460
(47,042)
419,418
(2)
Income tax expense reconciled to net income before income tax expense is 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 expenses that are not deductible in determining taxable
income
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
2018
2,804,872
760,978
2017
1,949,506
471,318
(49,418)
18,639
5,923
17,101
(7,755)
753,223
26.9%
(55,983)
22,254
(5,209)
(12,962)
(51,900)
419,418
21.5%
(*) The applicable income tax rate: 1) 11% for taxable income below 200 million Won, 2) 22% for above
200 million Won and below 20 billion Won, 3) 24.2% for above 20 billion Won and below 300 billion
Won, 4) 27.5% for above 300 billion Won.
232
Woori Bank annual report 2018We Believe in Your Potential - 113 -
(3) Changes in cumulative temporary differences for the years ended Deferred 31, 2018 and 2017, are as
follows (Unit: Korean Won in millions):
K-IFRS 1109 adoption effect
For the year ended December 31, 2018
Beginning
balance
Recognized
as retained
earnings
Recognized as
other
comprehensive
income (loss)
Beginning
balance after
K-IFRS
1109
adoption
Business
combination
Recognized as
income
(expense)
Recognized as
other
comprehensive
income
(expense)(*2)
Ending
Balance(*3)
479,065
(150,140)
149,796
478,721
Gain (loss) on
financial assets
Gain 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(*1)
Net deferred tax assets
24,482
-
(10,260)
(60,987)
(3,990)
-
(47,697)
47,446
-
36
-
-
9,777
(137,320)
284,234
(287,333)
30,602
45,153
(72,265)
257,451
24,482
(14,250)
(60,987)
(251)
9,777
(137,284)
-
-
-
-
-
-
-
-
284,234
317
43,821
31,715
360,087
(287,333)
-
(31,092)
95
(318,330)
1,370
25,879
4,917
(74,482)
-
-
-
149,796
31,972
71,032
(67,348)
332,765
-
-
44
1,381
(20,598)
4,162
(130,137)
(314,653)
-
-
(6,642)
21,992
11,374
75,194
(204,083)
41,485
-
-
-
621
399
-
-
(102,170)
(4,205)
372,346
3,203
(13,617)
4,520
(52,493)
(3,105)
(17,147)
669
360
-
-
-
-
28,354
(27,507)
(55,846)
(52,345)
6,672
(154,431)
(*1) Among the deferred tax assets and liabilities classified as ‘Others,’ the deferred tax asset arising from unused tax
losses amounts to 18,154 million Won.
(*2) Includes 1,429 million Won presented on non-controlling interests.
(*3) Includes 9,778 million Won presented on assets held for distribution (sale) (Note 17).
233
Woori Bank annual report 2018We Believe in Your Potential - 114 -
For the year ended December 31, 2017
Beginning
balance
407,128
Recognized as
income
(expense)
72,945
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
Recognized as
other
comprehensive
income
(expense)
(1,008)
(1,904)
(248)
-
-
-
-
4,656
-
-
-
(1,075)
421
Ending
balance
479,065
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 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
unused tax losses amounts to 15,652 million Won.
(4) Unrealizable temporary differences are as follows (Unit: Korean Won in millions):
Deductible temporary differences
Tax loss carry forward
Taxable temporary differences
Total
December 31, 2018
272,911
149,035
(868,541)
(446,595)
December 31, 2017
126,818
96,135
(1,298,586)
(1,075,633)
No deferred income tax asset has been recognized for the deductible temporary difference of KRW 227,144
million associated with investments in subsidiaries and associates as of December 31, 2018, because it is not
probable that the temporary differences will be reversed in the foreseeable future. KRW 45,767 million
associated with others, respectively, as of December 31, 2018, due to the uncertainty that these will be realized
in the future.
No deferred income tax liability has been recognized for the taxable temporary difference of KRW 866,294
million associated with investment in subsidiaries and associates as of December 31, 2018, due to the following
reasons:
- The Group is able to control the timing of the reversal of the temporary difference.
- It is probable that the temporary difference will not be reversed in the foreseeable future.
KRW 2,247 million associated with others are not recognized as deferred tax liabilities as it is not probable that
the associated temporary differences will be reversed in the foreseeable future.
As of December 31, 2018, the expected extinctive date of tax loss carry forward that are not recognized as
deferred tax assets are as follows (Unit: Korean Won in millions):
Tax loss carry forward
-
-
1 year or less
1 – 2 years
2 – 3 years
More than 3 years
149,035
-
234
Woori Bank annual report 2018We Believe in Your Potential - 115 -
(5) Details of accumulated deferred tax charged directly to other equity are as follows (Unit: Korean Won in
millions):
Net gain on valuation of financial assets at FVTOCI
Loss on valuation of AFS securities
Share of other comprehensive loss of and associates
Gain on foreign currency translation of foreign
operations
Remeasurements of the net defined benefit liability
Gain (loss) on derivatives designated as cash flow
hedge
Total
December 31, 2018
December 31, 2017
31,422
(285)
8,183
88,127
1,140
128,587
-
(114,169)
(954)
15,855
56,317
(248)
(43,199)
(6) Current tax assets and liabilities are as follows (Unit: Korean Won in millions)
Current tax assets
Current tax liabilities
43. EARNINGS PER SHARE (“EPS”)
December 31, 2018
20,488
156,559
December 31, 2017
4,722
232,600
Basic EPS is calculated by dividing net income attributable to common shareholders by weighted-average
number of common shares outstanding (Unit: Korean Won in millions, except for EPS and number of shares):
Net income attributable to Owners
Dividends to hybrid securities
Net income attributable to Common shareholders
Weighted-average number of common shares
outstanding
Basic EPS (Unit: Korean Won)
For the years ended December 31
2017
2018
2,033,182
(151,194)
1,881,988
1,512,148
(167,072)
1,345,076
673 million shares
2,796
673 million shares
1,999
Diluted EPS is equal to basic EPS because there is no dilution effect for the years ended December 31, 2018
and 2017.
235
Woori Bank annual report 2018We Believe in Your Potential - 116 -
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
Sub-total
Unconfirmed guarantees
Local letters of credit
Letters of credit
Other unconfirmed guarantees
Sub-total
Commercial paper purchase commitments and others
Total
December 31, 2018
December 31, 2017
125,870
371,525
158,179
6,452,791
7,108,365
305,057
3,322,731
669,677
4,297,465
1,260,587
12,666,417
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
12,859,715
(2) Details of unused loan commitments and others are as follows (Unit: Korean Won in millions):
Loan commitments
Other commitments
(3) Litigation case
December 31, 2018
97,796,704
5,041,314
December 31, 2017
80,760,325
4,546,090
Legal cases where the Group is involved are as follows (Unit: Korean Won in millions):
Number of cases (*)
Amount of litigation
Provisions for litigations
December 31, 2018
As plaintiff
77 cases
494,645
As defendant
154 cases
246,826
17,925
December 31, 2017
As plaintiff
As defendant
83 cases
413,267
155 cases
244,767
9,277
(*) The number of lawsuits as of December 31, 2018 and 2017 does not include fraud lawsuits, etc. and those
lawsuits that are filed only to extend the statute of limitation.
45. RELATED PARTY TRANSACTIONS
Related parties of the Group as of December 31, 2018 and 2017, and assets and liabilities recognized, guarantees
and commitments, major transactions with related parties and compensation to key management for the years
ended December 31, 2018 and 2017 are as follows:
(1) Related parties
Associates
Related parties
Woori Service Networks Co., Ltd., Korea Credit Bureau Co., Ltd., Korea Finance Security Co., Ltd.,
Chin Hung International Inc., 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 28
associates)
236
Woori Bank annual report 2018We Believe in Your Potential - 117 -
(2) Assets and liabilities from transactions with related parties are as follows (Unit: Korean Won in millions):
Associates
Related party
Kumho Tire Co., Inc.(*1)
Woori Service Networks Co.,
Ltd.
A title of account
Loans
Loss allowance
Deposits due to customers
Other liabilities
Loans
Deposits due to customers
Other liabilities
Korea Credit Bureau Co., Ltd. Loans
Korea Finance Security Co.,
Ltd.
Chin Hung International Inc.
Deposits due to customers
Other liabilities
Loans
Loss allowance
Deposits due to customers
Other liabilities
Loans
Loss allowance
Deposits due to customers
Other liabilities
Poonglim Industrial Co.,
Deposits due to customers
Ltd.(*2)
STX Engine Co., Ltd.(*3)
STX Corporation(*3)
Loans
Loss allowance
Deposits due to customers
Other liabilities
Loans
Loss allowance
Deposits due to customers
Other liabilities
K BANK Co., Ltd.
Loans
Well to Sea No.3 Private
Equity Fund
Others (*4)
Loans
Loss allowance
Deposits due to customers
Other liabilities
Loans
Loss allowance
Other assets
Deposits due to customers
Other liabilities
December 31,
2018
December 31,
2017
-
-
-
-
69
1,967
333
7
6,494
19
57
(4)
5,040
10
411
(204)
11,605
2,974
-
-
-
-
-
-
-
-
-
190
1,857
(9)
356
64
4,783
(324)
9
8,049
165
170,917
(156,712)
666
50
45
1,311
357
6
5,586
54
56
-
2,854
7
408
(22)
46,220
1,658
4
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
(*1) The Group lost significant influence over the entity due to the termination of the joint management procedures of
the creditors’ financial institution during the year December 31, 2018, and thus the entity was excluded from the
list of associates.
(*2) The Group lost significant influence over the entity due to the stock consolidation and the capital increase of the
associate during the year ended December 31, 2018, and thus the entity was excluded from the list of associates.
(*3) The shares of the entity were sold after it was transferred to assets held for distribution (sale) during the years
ended December 31, 2018 and thus was excluded from the list of associates.
(*4) Others include Saman Corporation, Kyesan Engineering Co., Ltd., DAEA SNC Co., Ltd., etc., as of December 31,
2018 and 2017.
237
Woori Bank annual report 2018We Believe in Your Potential
- 118 -
(3) Gain or loss from transactions with related parties are as follows (Unit: Korean Won in millions):
For the years ended
December 31
Related party
A title of account
2018
KDIC(*1)
Interest expenses
-
2017
15,331
Corporation that has
significant influence
over the Group
Associates
Kumho Tire Co., Inc.
(* 2)
Interest income
Fees income
Interest expenses
Impairment losses due to
credit loss (reversal of
allowance for credit loss)
1,098
-
-
2,641
5
1
(156,712)
155,997
Woori Blackstone
Fees income
-
6,225
Korea Opportunity
Private Equity Fund
No.1 (*3)
Woori Service
Networks Co., Ltd.
Other income
Interest expenses
Fees expenses
Other expenses
Korea Credit Bureau
Co., Ltd.
Interest expenses
Fees expenses
Korea Finance Security
Co., Ltd.
Interest expenses
Impairment losses due to
Chin Hung
International Inc.
STX Engine Co., Ltd.
(*4)
Samho International
Co., Ltd.(*5)
STX Corporation(*4)
credit loss
Other expenses
Interest income
Fees income
Interest expenses
Impairment losses due to
credit loss (reversal of
allowance for credit loss)
Interest income
Fees income
Interest expenses
Reversal of allowance for
credit loss
Interest income
Fees income
Interest expenses
Reversal of allowance for
credit loss
Interest income
Fees income
Interest expenses
Reversal of allowance for
credit loss
30
14
561
580
62
2,310
12
4
146
-
-
43
182
333
-
86
(88,734)
-
-
-
-
-
-
2
30
24
543
507
82
2,079
12
-
-
364
1
27
(4,265)
1,417
28
147
(797)
486
5
334
(717)
219
30
4
(31,210)
(61,432)
Woori Columbus 1st
Fees income
-
272
Private Equity
Fund(*3)
238
Woori Bank annual report 2018We Believe in Your Potential
Associates
Related party
K BANK Co., Ltd.
Well to Sea No.3
Private Equity Fund
(*6)
Others (*7)
- 119 -
A title of account
2018
2017
For the years ended
December 31
Fees income
Other income
Interest income
Interest expenses
Impairment losses due to
credit loss (reversal of
allowance for credit loss)
Interest income
Fees income
Other income
Interest expenses
Impairment losses due to
credit loss (reversal of
allowance for credit loss)
1,134
19
2,179
9
(30)
233
23
14
40
-
1,051
982
4
39
-
-
-
13
(147)
218
(*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’ category.
(*2) The Group lost significant influence over the entity due to the termination of the joint management procedures of
the creditors’ financial institution during the year ended December 31, 2018, and thus the entity was excluded
from the list of associates.
(*3) The entity is excluded from the list of associates due to its liquidation for the year ended December 31, 2017.
(*4) The shares of the entity were sold after it was transferred to assets held for distribution (sale) during the years
ended December 31, 2018 and thus was excluded from the list of associates.
(*5) The shares of the entity were sold after it was transferred to assets held for distribution (sale) during the year ended
December 31, 2017 and thus was excluded from the list of associates.
(*6) Due to capital contribution for the year ended December 31, 2017, the entity has been included in the list of
associates.
(*7) Others include the amount transacted with Saman Corporation, Kyesan Engineering Co., Ltd., DAEA SNC Co.,
Ltd., etc., for the years ended December 31, 2018 and 2017.
(4) Major loan transactions with related parties for the years ended December 31, 2018 and 2017 are as follows
(Unit: Korean Won in millions):
Associates
Related parties
Kumho Tire Co., Inc.(*2)
Well to Sea No. 3 Private Equity
Fund (*3)
STX Engine Co., Ltd. (*4)
Associates
Related parties
Kumho Tire Co., Inc.(*2)
Well to Sea No. 3 Private Equity
Fund (*3)
STX Engine Co., Ltd. (*4)
For the year ended December 31, 2018
Beginning
balance
57,470
Loan
Collection
7,057
-
Others
(50,413)
Ending
balance(*1)
-
73,810
39,886
16,857
-
88,810
2,177
-
(37,709)
1,857
-
For the year ended December 31, 2017
Beginning
balance
50,413
Loan
7,057
Collection
-
Others
-
44,797
83,810
2,177
10,000
7,088
Ending
balance(*1)
57,470
73,810
39,886
-
-
-
(*1) Settlement payment from normal operation among the related parties were excluded, and in the case of a limited
loan, it was presented as a net increase or decrease.
(*2) The Group lost significant influence over the entity due to the termination of the joint management procedures of
the creditors’ financial institution during the year ended December 31, 2018, and thus the entity was excluded
from the list of associates.
(*3) Due to capital contribution, the entity was included in the list of associates during the year ended December 31,
2017.
(*4) The shares of the entity were sold after it was transferred to assets held for distribution (sale) during the year
ended December 31, 2018 and thus was excluded from the list of associates.
239
Woori Bank annual report 2018We Believe in Your Potential
- 120 -
(5) There are no major borrowing transactions with related parties for the years ended December 31, 2018 and
2017.
(6) Guarantees provided to the related parties are as follows (Unit: Korean Won in millions):
December 31, 2018 December 31, 2017
Warranty
Kumho Tire Co., Inc.(*1)
Korea Finance Security Co., Ltd.
Korea Credit Bureau Co., Ltd.
Woori Service Networks Co., Ltd.
Chin Hung International Inc.
STX Engine Co., Ltd.(*2)
-
-
203
28
131
32,058
-
Import credit in foreign currencies
4,181
and others
636 Unused loan commitment
204 Unused loan commitment
29 Unused loan commitment
155 Unused loan commitment
31,891 Unused loan commitment
68,858
Import credit in foreign currencies
and others
STX corporation (*2)
-
17,557
Import credit in foreign currencies
K BANK Co., Ltd.
Well to Sea No.3 Private Equity
Fund
-
15
208,143
and others
53 Unused loan commitment
- Unused loan commitment
236,190 Unused loan commitment
(*1) The Group lost significant influence over the entity due to the termination of the joint management procedures of
the creditors’ financial institution during the year ended December 31, 2018, and thus the entity was excluded
from the list of associates.
(*2) The shares of the entity were sold after it was transferred to assets held for distribution (sale) during the year
ended December 31, 2018 and thus was excluded from the list of associates.
For the guarantee provided to the related parties, the amount the Group recognized as provisions for
guarantees is nil and 71,459 million Won, as of December 31, 2018 and December 31, 2017, respectively.
(7) Compensation for key management is as follows (Unit: Korean Won in millions):
Short-term employee salaries
Retirement benefit service costs
Total
For the years ended December 31
2018
2017
12,326
489
12,815
12,024
472
12,496
Key management includes registered executives and non-registered executives. Outstanding assets and
liabilities from transactions with key management amount to 2,816 million Won and 6,096 million Won,
respectively, as of December 31, 2018, and with respect to the assets, the Group has not recognized any
allowance nor related impairment loss due to credit losses.
240
Woori Bank annual report 2018We Believe in Your Potential - 121 -
46. TRUST ACCOUNTS
(1) Trust accounts of the Bank are as follows (Unit: Korean Won in millions):
Total assets
Trust accounts
December 31, 2018
53,560,071
December 31, 2017
43,895,511
Operating income
For the years ended December 31
2018
1,049,105
2017
1,029,501
(2) Receivables and payables between the Bank 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, 2018
December 31, 2017
28,703
574,330
3,020,371
3,594,701
25,286
585,832
2,711,529
3,297,361
(3) Significant transactions between the Bank and trust accounts are as follows (Unit: Korean Won in millions):
Revenue:
Trust fees
Termination fees
Expense:
Total
Interest expenses on deposits due to
customers
Interest expenses on borrowings from trust
accounts
Total
For the years ended December 31
2017
2018
177,913
5,885
183,798
7,813
38,873
46,686
141,999
1,565
143,564
17,768
31,956
49,724
(4) Principal guaranteed trusts and principal and interest guaranteed trusts are as follows;
1) The carrying value of principal guaranteed trusts and principal and interest guaranteed trusts are as
follows (Unit: Korean Won in millions):
December 31, 2018
December 31, 2017
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 interest guaranteed trusts
Development trusts
Unspecified money trusts
Sub-total
Total
3,564
521,200
819,102
42,187
8,104
2,134
1,396,291
19
835
854
1,397,145
4,058
530,556
791,920
50,035
8,563
2,467
1,387,599
19
801
820
1,388,419
241
Woori Bank annual report 2018We Believe in Your Potential - 122 -
2) The amounts that the Bank must pay by the operating results of the principal guaranteed trusts or the
principal and interest guaranteed trusts are as follows (Unit: Korean Won in millions):
Liabilities for the account
(subsidy for trust account adjustment)
December 31, 2018
December 31, 2017
33
32
47. BUSINESS COMBINATION
The business combination occurred during the current period is as follows:
(1) Acquisition of WB Finance Co., Ltd.
To expand Cambodia’s retail business, the Group had acquired 100% ownership of Vision Fund Cambodia
in June 2018 and the Group changed its name to WB Finance Co., Ltd.
The goodwill amounting to 46,752 million Won arising from the acquisition is based on the economic
effect of combining the operation of the Group and its subsidiaries, and also from the customer base
acquired.
(2) Woori Bank Europe
The Group acquired approval from the Deutsche Bundesbank(Central bank of Germany) for the
establishment of Woori Bank Europe(Capital amounting to 50 million Euros) on October 9, 2018. Woori
Bank Europe started its operation on November 1, 2018.
(3) Details of the accounting for the business combination are as follows (Unit: Korean Won in millions):
Consideration transferred:
Cash and cash equivalents
Identifiable assets and liabilities
recognized:
Cash and cash equivalents
Financial assets at FVTOCI
Loans and other financial assets at
amortized cost(*)
Premises and equipment
Intangible assets
Current tax assets
Deferred tax assets
Other assets
Assets sub- total
Deposits due to customers
Borrowings
Other financial liabilities
Current tax liabilities
Other liabilities
Liabilities sub-total
Identifiable net fair value
Goodwill
WB Finance Co.,
Ltd
Woori Bank
Europe
Total
87,562
64,062
151,624
16,657
17
205,451
1,630
763
173
1,381
1,510
227,582
54,615
120,644
6,149
640
4,724
186,772
40,810
46,752
-
-
64,062
-
-
-
-
-
64,062
-
-
-
-
-
-
64,062
-
16,657
17
269,513
1,630
763
173
1,381
1,510
291,644
54,615
120,644
6,149
640
4,724
186,772
104,872
46,752
(*) The book value of loans and other financial assets at amortized cost is used as proxy for fair value
since the difference between fair value and book value is not material. The total contractual amount of
WB Finance is 208,623 million Won and the contractual cash flow that is not expected to be recovered
is 3,182 million Won.
242
Woori Bank annual report 2018We Believe in Your Potential
- 123 -
(4) Operating income and Net income of the Group
Assuming that the acquisition date is the date of the beginning of reporting period, the amounts to be added
to the operating income and net income in the Group’s statement of comprehensive income for the year
ended December 31, 2018 are as follows: (Unit: Korean Won in millions):
Operating income
Net income
48. EVENT AFTER THE REPORTING PERIOD
WB Finance
44,545
4,511
After the end of the reporting period, the financial holding company was established on January 11, 2019. In
accordance with the established of financial holding company, six companies, Bank, Woori FIS Co., Ltd., Woori
Finance Research Institute Co., Ltd., Woori Credit Information Co., Ltd., Woori Fund Service Co., Ltd., Woori
Private Equity Asset Management Co., Ltd. became fully owned subsidiaries of the said financial holding company.
After the financial holding company is established, the shares of the Bank was delisted from the Korea Stock
Exchange and New York Stock Exchange on January 11, 2019, and the shares of the newly established financial
holding company was listed on February 13, 2019, both Korea Stock Exchange and New York Stock Exchange.
243
Woori Bank annual report 2018We Believe in Your Potential
ORGANIzATIONAL
CHART
2 unit 20 groups 2 Divisions 64 Departments (26 apr. 2019)
Regional Banking Headquarters
Business Promotion Unit
retail
banking
business
group
real
estate
Finance
business
group
wealth
Management
group
Corporate
banking
business
group
small &
Medium
Corporate
banking
business
group
institutional
banking
business
group
global
business
group
international
trade
business
group
investment
banking
business
group
trust &
pension
business
group
wealth
Management
strategy
Department
wealth
Management
business
Department
wealth
Management
advisory
Center
retail
banking
products &
Marketing
Department
real estate
Finance
Department
Marketing
promotion
Department
housing
Fund
Department
Channel
strategy
Department
Customer
Center
Corporate
banking
products &
Marketing
Department
small & Me-
dium Corpo-
rate banking
products &
Marketing Dept
institutional
banking
products &
Marketing
Department
global
business
strategy
Department
international
trade
business
Department
investment
banking
Department
trust
Department
public
Fund sales
Department
global
business
promotion
Department
Foreign
Customer
banking
business
Department
project
Finance
Department
national
pension
Department
global
business
support
Department
international
trade
service
Center
retirement
pension
business
Department
trustee &
Custody
Department
president & CeO
board of Directors
244
Woori Bank annual report 2018We Believe in Your Potential Customer
Branch
Business Support Unit
Corporate Banking Headquarters
human
resources
group
Financial
Market
business
group
Operation
& support
group
Digital
banking
business
group
it
group
information
security
group
Credit
support
group
risk
Management
group
Management
& Finance
planning
group
Consumer
& brand
group
it
planning
Division
Corporate
restructuring
Division
human
resources
Department
treasury
Department
general
affairs
Department
Digital
banking
strategy
Department
it
planning
Department
information
security
Department
loan
policy
Department
Corporate
restoration
Department
risk
Management
Department
strategy &
planning
Department
Consumer
protection
Center
human
resources
Development
Department
trading
Department
loan
service
Center
big Data
Center
banking
Development
Center
retail Credit
analysis &
approval
Department
Credit
Management
& Collection
Department
Credit risk
Management
Department
Finance &
planning
Department
public
relations
Department
employee
satisfaction
Center
settlement
support
Department
Deposit
service
Center
Digital
Marketing
Department
Digital
Development
Center
security
Control
Department
Digital
Channel
Department
global/
information
Development
Center
loan
review
Department
accounting
Department
Corporate
social
responsibility
Department
Management
innovation
Department
sMe Credit
analysis &
approval
Department
large
Corporate
Credit
analysis &
approval
Department
innovation
Development
Center
Compliance Officer
Compliance Department
anti-Money laundering Center
board audit Committee
standing audit Committee Member/Director
audit Department
245
Woori Bank annual report 2018We Believe in Your Potential GLOBAL
NETWORK
HEAD OFFICE
51, Sogong-ro (203, Hoehyeon-dong 1-ga),
Jung-gu, Seoul, 100-792, Korea
Phone: +82-2-2002-3000
Swift: HVBKKRSE
OVERSEAS BRANCHES
New York Agency
245, Park Ave. 43rd Floor, New York, NY 10167, USA
Phone: 1-212-949-1900
LA Branch
3360, West Olympic Blvd. Suite 300, LA, CA90019, USA
Phone: 1-213-620-0747~8
London Branch
9th Floor, 71 Fenchurch Street, London, EC3M 4BR,UK
Phone: 44-207-680-0680
Tokyo Branch
Shiodome City Center 10th Floor, 5-2 Higashi-Shimbashi
1-Chome, Minato-ku, Tokyo, 105-7110 Japan
Phone: 81-3-6891-5600
Hong Kong Branch
Suite 1401, Two Pacific Place, 88 Queensway, HongKong
Phone: 852-2521-8016
Singapore Branch
10 Marina Boulevard #13-05 MBFC Tower 2, Singapore
018983
Phone: 65-6422-2000
Bahrain Branch
P.O. Box 1151, 4th Floor, Entrance 1, Manama Centre
Building, Manama, Bahrain
Phone: 973-17-223503
Dhaka Branch
Suvastu Imam Square (1st & 4th Fl.) 65 Gulshan Avenue,
Dhaka, Bangladesh
Phone: 880-2-5881-3270~3
DEPZ Customer Service Center
Dhaka Export Processing Zone(Old Area), Ganakbari, Ssvar,
Dhaka-1349, Bangladesh
Phone: 880-2778-8030
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
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
Woori Bank Mirpur Sub-Branch
Padma Bhaban(First Floor), 1/9 Mirpur Road Pallabi,
Mirpur-12, Dhaka-1216, Bangladesh
Phone: 880-2902-1061~2
Woori Bank, Narayanganj Branch
Adamjee Export Processing zone, Shiddhirganj,
Narayanganj-1431 Bangladesh
Phone: 880-2769-2031~34
Gaeseong Branch
(Temporary) B1, 51, Sogong-ro, Jung-gu, Seoul, Korea
Phone: (Temporary) 82-2-2002-5059~61
Sydney Branch
Suite 25.03, Level 25, 363 George Street Sydney NSW 2000
Australia
Phone: 61-2-8222-2200
Woori Bank Dubai Branch
1102A, Level 11, The Gate Building, East Wing, P.O. Box
506760, DIFC, Dubai, United Arab Emirates
Phone: 971- 4-325-8365
REGIONAL HEADQUARTERS
Woori Bank India Regional Headquarters
Unit 601, 6th floor, Birla Centurion, Century Mills
Compound, Pandurang Budhkar Marg, Worli, Mumbai,
Maharashtra-400030, India
Phone: 91-22-6263-8100
Woori Bank Chennai Branch
Lotte India, 2nd Floor, No.4/169, Rajiv Gandhi Salai(OMR),
Kandhanchavadi, Perungudi Taluk, Chennai-600096, Tamil
Nadu, India
Phone: 91-44-3346-6900
Woori America Bank,Palisades Park Branch
225 Broad Avenue Palisades Park, NJ 07650, USA
Phone: 1-201-346-0055
Woori America Bank, Closter Branch
234 Closter Dock Road Closter, NJ 07624, USA
Phone: 1-201-784-7012
Woori America Bank, Elkins Park Branch
7300 Old York Rd Elkins Park, PA 19027, USA
Phone: 1-215-782-1100
Woori America Bank, Annandale Branch
Seoul Plaza 4231 Markeham St. Annandale, VA 22003, USA
Phone: 1-703-256-7633
Woori America Bank, Bayside Branch
215-10 Northern Blvd. Bayside, NY 11361, USA
Phone: 1-718-224-3800
Woori America Bank, Ellicott City Branch
100352 Baltimore National Pike Ellicott City, MD 21042, USA
Phone: 1-443-973-3690
Woori America Bank, Wilshire Branch
3540 Wilshire Blvd. Unit 104, Los Angeles, CA 90010, USA
Phone: 1-213-382-8700
Woori America Bank, Olympic Branch
3360, West Olympic Blvd. Suite #300, LA, CA90019, USA
Phone: 1-213-738-1100
Woori America Bank, Fullerton Branch
5731 Beach Blvd., Buena Park, CA 90621, USA
Phone: 1-714-521-3100
Woori Bank Gurgaon Branch
1st Floor, Salcon Platina Building, MG Road, Sector-28,
Sikanderpur, Gurgaon-122001,Haryana, India
Phone: 91-12-4270-6703
Woori America Bank, Garden Grove Branch
10120 Garden Grove Blvd. Suite 151Garden Grove, CA 92844,
USA
Phone: 1-714-534-6300
Woori Bank Mumbai Branch
Unit 601, 6th floor, Birla Centurion, Century Mills
Compound, Pandurang Budhkar Marg, Worli, Mumbai,
Maharashtra-400030, India
Phone: 91-22-6263-8100
SUBSIDIARIES
UNITED STATES OF AMERICA
Woori America Bank
330 5th Avenue New York, NY 10001, USA
Phone: 1-212-244-3000
Woori America Bank, Manhattan Branch
330 5th Avenue New York, NY 10001, USA
Phone: 1-212-244-1500
Woori America Bank, Centreville Branch
13832 Braddock Road. Centreville, VA 20121, USA
Phone: 1-703-988-9555
Woori America Bank, Irvine Branch
14252 Culver Dr. #G, Irvine, CA 92604, USA
Phone: 1-949-885-3760
Woori America Bank, Torrance Branch
2390 Crenshaw Boulevard, Units C Torrance CA 90501, USA
Phone: 1-310-974-1880
Woori America Bank, Georgia LPO
2472 Pleasant Hill Rd. Duluth, GA30096, USA
Phone: 1-404-904-9880
Woori America Bank, San Jose LPO
2328 Walsh Ave, Santa Clara CA 95051 USA
Phone: 1-415-652-9476
Woori America Bank, Flushing Branch
136-88 39th Avenue Flushing New York, NY 11354, USA
Phone: 1-718-886-1988
Woori America Bank, Northern
164-25 Northern Blvd. Flushing NY 11358, USA
Phone: 1-929-362-3330
Woori America Bank, Fort Lee Branch
2053 Lemoine Avenue Fort Lee, NJ 07024, USA
Phone: 1-201-363-9300
Woori America Bank, Woodside Branch
43-22 50th St. Woodside, NY 11377, USA
Phone: 1-718-429-1900
Woori America Bank, Ridgefield Branch
321 Broad Avenue #104 Ridgefield, NJ 07657, USA
Phone: 1-201-941-9999
Woori America Bank, Dallas LPO
1028 MacArthur Dr.Suite #108, Carrollton, TX, 75007, USA
Phone: 1-972-810-0166
Woori America Bank, Chicago LPO
1247 Milwaukee Ave, Suite 207, Glenview, Illinois, 60025, USA
Phone: 1-224-938-9553
Woori America Bank, Seattle LPO
19401 40th Avenue West, Lynnwood, Washington, 98504, USA
Phone: 1-206-948-6691
246
Woori Bank annual report 2018We Believe in Your Potential
Woori Bank (China) Ltd. Weihai Branch
No.106-1,No.106-2,No.106-3 Attached Qingdao Mid-
Road,Weihai, Shandong Province, China
Phone: 86-631-599-6000
The Gedung Energy Branch
Gd The Energy Lot 11 A SCBD, Jl. Jendral Sudirman Kav 52 -
53, Jakarta/12190, Indonesia
Phone: 6221-29951906
CHINA
Woori Bank (China) Ltd.
Floor 11-12, Block A Building 13, District4, Wangjing East
Park, Chaoyang District Beijing China 100102
Phone: 86-10-8412-3000
Woori Bank (China) Ltd. Head office business department
Floor1 Block B Building 13 District4 Wangjing East Park
Chaoyang District Beijing China 100102
Phone: 86-10-8441-7771
Woori Bank (China) Ltd. Beijing Branch
1F, West Tower, Twin Towers, B-12 Jianguomenwai Avenue,
Chaoyang District, Beijing 100022, China
Phone: 86-10-8453-8880
Woori Bank (China) Ltd. Shanghai Branch
104B,502, Dongfangchunyi Building 1, 5F, Eshan Avenue 505
Pudong New Area, Shanghai, 200122, China
Phone: 86-21-5081-0707
Woori Bank (China) Ltd. Shenzhen Branch
B0105–B0210 Rongchao Landmark, 4028 Jintian Road,
Futian District, Shenzhen, China
Phone: 86-755-3338-1234
Woori Bank (China) Ltd. Suzhou Branch
6F Building #58 Suzhou Center, Suxiu Road,Suzhou Industrial
Park, Jiangsu, China
Phone: 86-512-6295-0777
Woori Bank (China) Ltd. TianJin Branch
NO.1 Building, Aocheng Commercial Square, Binshui West
Road, Nankai District, Tianjin, 300381 China
Phone: 86-22-2338-8008
Woori Bank (China) Ltd. Shanghai Puxi Sub-Branch
1F, Maxdo Center, NO.8 Xingyi Road, Changning District,
Shanghai, 200336, China
Phone: 86-21-5208-1000
Woori Bank (China)Ltd.Tianjin Dongmalu Sub-Branch
1-2F, No. 4 of TowerC,Yuding Plaza,Qixiang Street), Dongma
Road, Nankai District, Tianjin, 300090, China
Phone: 86-22-8776-9000
Woori Bank(China)Ltd. Chongqing Branch
No. 25, Jiangbei street, Jiangbei District, Jiangbei District,
Chongqing, No. 2 (Ping An Fortune Center), L2-1, 1 unit.
Phone: 86-23-6152-2222
Woori Bank(China)Ltd. Shanghai Lianyang Sub-Branch
No.52, Zendai Thumb Plaza Lane 199, FangDian
Road,Pudong New District, Shanghai, 200135, China
Phone: 86-21-6882-0608
Woori Bank(China)Ltd. Beijing Sanyuanqiao Sub-Branch
1-2F, Tower A, Tianyuangang Center, C2, North Road, East
Third Ring Road, Chaoyang District, Beijing 100027, China
Phone: 86-10-8440-7177
Woori Bank(China)Ltd, Shenyang Branch
1F, 2F, Lotte North-Station Arcade,9-8Beiling Street,
Huanggu District, Shenyang, Liaoning 110032, China
Phone: 86-24-8186-0808
INDONESIA
Bank Woori Saudara Head Office
Treasury Tower 26th, 27th FL. District 8 SCBD Lot 28 JI.Jend.
Sudirman Kav. 52-53, Jakarta 12190, Indonesia
Phone: 6221-50871906
Corporate Branch
Treasury Tower 26th, 27th FL. District 8 SCBD Lot 28 JI.Jend.
Sudirman Kav. 52-53, Jakarta 12190, Indonesia
Phone: 6221-50871888
Woori Bank (China) Ltd. Beijing Wangjing Sub-Branch
1F,No.10, Furong Street, Chaoyang District, Beijing 100102,
China
Phone: 86-10-8471-8866
Wastukancana Branch
Jl Wastukencana No. 79 - Kota. Bandung, Indonesia
Phone: 6222-4209940
Woori Bank (China) Ltd. Shanghai Wuzhonglu Sub-Branch
1C, Liaoshen Building, 1068 Wuzhong Road, Minhang
District, Shanghai, 201103, China
Phone: 86-21-6446-7887
Cirebon Branch
Komplek Cirebon Super Blok (CSB) Mall Office Park Kav. No.
11 Jl. Cipto, Indonesia
Phone: 62231-242006
Woori Bank (China) Ltd. Shenzhen Futian Sub-Branch
Room 107, Daqing Building, NO.6027 Shennan Road, Futian
District, Shenzhen 518040, China
Phone: 86-21-6446-7887
Woori Bank (China) Ltd. Shanghai Jinxiujiangnan Sub-Branch
No.101-1, 102 MT BLDG, 3999 Hongxin Road, Minhang
District, Shanghai, China, 201101
Phone: 86-21-3432-1116
Woori Bank (China) Ltd. Beijing Shunyi Sub-Branch
1F, Tower A, AMB Building, 2 Cangshang Street, Shunyi
District 101300, China
Phone: 86-10-8945-2220
Woori Bank (China) Ltd. DaLian Branch
2F-218, Yoma IFC, NO.128 Jinma Road, Dalian Development
Area, Dalian, P.R. China, 116600
Phone: 86-411-8765-8000
Woori Bank (China) Ltd. Zhangjiagang Sub-Branch
B104/B205 Huachang Oriental Plaza, 11 Renmin East Road,
Zhangjiagang Jiangsu, 215600, China
Phone: 86-512-5636-6696
Woori Bank (China) Ltd. Chengdu Branch
No.302-306, 3F, Ping'an Fortune Center, No.1, Renmin South
Road(Section 3), Chengdu, Sichuan, China, 610041
Phone: 86-512-028-6557-2336
Bogor Branch
Jl. Pangkalan Raya No. 8, Warung Jambu - Bogor/16151, Indonesia
Phone: 62251-8377887
Surapati Core Branch
Komp Surapati Core F-01-02 Bandung, Indonesia
Phone: 6222-87241326
Surabaya Branch
Kompleks Ruko 21, Jl. Raya, Gubeng No.68 E -
Surabaya/60281, Indonesia
Phone: 6231-5041906
Semarang Branch
Ruko Imam Bonjol Square Kav 4 - Kota. Semarang, Indonesia
Phone: 6224-3521906
Tasikmalaya Branch
Ruko Plaza Asia Blok A5-A6, Jl. HZ. Mustofa No. 326 -
Tasikmalaya/46126, Indonesia
Phone: 62265-2351906
Yogyakarta Branch
Jl. Mangkubumi No. 45 - Yogyakarta/55232, Indonesia
Phone: 62274-549280
Denpasar Branch
Ruko Griya Alamanda blok 3-4,Jl. Cok Agung Tresna Renon-
Denpasar/80235, Indonesia
Phone: 62361-263755
247
Ampera Branch
Jl. Ampera Raya No. 20 Gd.Medco III/12560, Indonesia
Phone: 6221-7821756
Purwokerto Branch
Jl. Jenderal gatot Subroto No.78 Purwokerto - Jawa
Tengah/53116, Indonesia
Phone: 62281-622212
Malang Branch
Jl. Letjen Sutoyo No. 27 Malang- Jawa Timur/65141, Indonesia
Phone: 62341-421906
Solo Branch
Jl. Ronggo Warsito No. 53 Kota, Solo - Jawa Tengah/57131,
Indonesia
Phone: 62271-633600
Tangerang city Branch
Tangerang City Business park Blok F/50 Jl. Jend. Sudirman
No.1 Tangerang/15118, Indonesia
Phone: 6221-29529226
Pelembang Branch
Jl. Basuki Rahmat No. 886 A - Palembang/30127, Indonesia
Phone: 62711-315828
Sukabumi Branch
Jl. Jenderal Sudirman No. 31-Sukabumi/43111, Indonesia
Phone: 62266-6251906
Pekalongan Branch
Jl. KH. Mansyur No.64, Perkalongan, Indonesia
Phone: 62-285-4460505
Madiun Branch
Jl. Diponegoro No. 110, Madiun, Indonesia
Phone: 62-351-4773000
Jamber Branch
Jl. Gajah Made No. Ruko Gajah Mada Square Block A2-3,
Indonesia
Phone: 62-331-421648
Kediri Branch
Jl, Brawijaya No. 25A Kota Kederi, Indonesia
Phone: 62-354-4526726
Purwakarta Branch
Jl. Basuki Rahmat No. 94, Purwakarta/41114, Indonesia
Phone: 62264-8227474
Subang Branch
JL. Ahmad Yani No. 36/41211, Indonesia
Phone: 62260-421014
Karawaci Tangerang Branch
Ruko Pinangsia Blok H No. 1 Lippo Karawaci Kel. Cibodas
Tangerang/15139, Indonesia
Phone: 6221-55772345
Garut Branch
Jl. Ahmad Yani No.33/44117, Indonesia
Phone: 62262-544672
Medan Branch
Jl. Zainul Arifin No. 53A, Indonesia
Phone: 6261-42007100
Makassar Branch
Jl. Gunung Latimojong, Ruko Metro Square Blok E No. 1,
Indonesia
Phone: 6241-18001859
Woori Bank annual report 2018We Believe in Your Potential
Buah Batu Sub-Branch
Jl. Buah Batu No. 58 Bandung/40265, Indonesia
Phone: 6222- 7306347
Kopo Sub-Branch
Komp Ruko Mas J-9 Jl. Kopo Cirangrang/40225, Indonesia
Phone: 6222-5436802
Cimahi Sub-Branch
Jl. Raya Cibabat No. 310 Cimahi/40213, Indonesia
Phone: 6222-6634656
Sukajadi Sub-Branch
Jl Sukajadi No. 248 Bandung, Indonesia
Phone: 6222-2042248
Soekarno Hatta Sub-Branch
Jl. Soekarno Hatta No. 618 F/40286, Indonesia
Phone: 6222-7509905
Pemuda/Rawamangun Sub-Branch
Jalan Paus No 91F, Pulogadung, Jakarta Timur, Indonesia
Phone: 6221-47862070
Sumedang Sub-Branch
Jl. Prabu Geusan Ulun No.76/45311, Indonesia
Phone: 62261-206527
Serang Sub-Branch
Jl. KH. Abdul fatah Hasan No.53 Kel. Cipare Serang/42124,
Indonesia
Phone: 62254-224142
Commercial Center Cikarang Sub-Branch
Cikarang Commercial Centre Blok A1-2, Jl. Cibarusah KM.
40 No. 2 Kampung pasir sari kec. Cikarang Selatan/17550,
Indonesia
Phone: 6221-89835720
Atrium/Cideng Sub-Branch
Jalan Keseman No 2, Kota. Jakarta Pusat, Indonesia
Phone: 6221-3451964
Kebon Jeruk Sub-Branch
Jl. Kelapa Dua Raya(RayaPanjang) No.2, Rt 008, Rw 002 Kel.
Kelapa Dua Kec. Kebon Jeruk/12130, Indonesia
Phone: 6221-53660160
Diponegoro Sub-Branch
Jl. Diponegoro No. 28 Bandung/40251, Indonesia
Phone: 6222-87831928
Lembang Sub-Branch
Jl. Grand Hotel Lembang No.25 Bandung/40391, Indonesia
Phone: 6222-2784797
Jababeka Cikarang Sub-Branch
Ruko Metro Boulevard Kav. A Jl. Niaga Raya No. 10 Kawasan
Industri Jabeka/17835, Indonesia
Phone: 6221-89836020/ 89837020
Majalengka Sub-Branch
Jl. KH. Abdul Halim No.447 Majalengka/45411, Indonesia
Phone: 62233-8285460
Kuningan Sub-Branch
Jl. Dewi Sartika No.4/45512, Indonesia
Phone: 62232- 8880938
Indramayu Sub-Branch
Jl. DI. Panjaitan No.103/45212, Indonesia
Phone: 62234-276236
Cibubur Sub-Branch
Cibubur Times Square Blok B1/1 Jl. Alternatif Cibubur KM 3
Kel. Jatiraya, Kec. Jastisampurna Bekasi/17435, Indonesia
Phone: 6221-84305050
Cikampek Sub-Branch
Jl. Terusan Sudirman No. 6B(Sudirman Center)/41373, Indonesia
Phone: 62264-8385171/ 8385172
Depok Sub-Branch
Jl. Margonda Raya No.1 Rt 001/011 Kelurahan Depok
Kecamatan Pancoran Mas/16431, Indonesia
Phone: 6221-7522091
Salatiga Sub-Branch
Ruko Wijaya Square B5 Jl.Diponegoro No. 110 Salatiga/50711,
Indonesia
Phone: 62298-311828
Sidoarjo Sub-Branch
Jl. KH. Mukmin No.11 Blok B-7 Sidoarjo/60281, Indonesia
Phone: 6231-8922842
Mojokerto Sub-Branch
Jl. Gajah Mada No.85B/60319, Indonesia
Phone: 62321-383444
Cianjur Sub-Branch
Jl. Abdulah Bin Nuh No.15/43253, Indonesia
Phone: 62263- 260941, 260943
Pamulang/Ciputat Sub-Branch
Jl. RE. Martadinata No. 167 B RT.03 RW. 05 Cipayung,
Ciputat, Kota Tangerang Selatan, Indonesia
Phone: 6221-7403205,7443335
Sumber Sub-Branch
Jl. Dewi Sartika No. 57 Sumber/45611, Indonesia
Phone: 62231-8330618
Bantul Sub-Branch
Jl. Jenderal Sudirman No. 130 Kabupaten Bantul/55713,
Indonesia
Phone: 62274-367514
Balaraja Sub-Branch
Komplek Ruko Balaraja Center Blok A No.2 Jl. Raya Serang
Km. 24 Talaga Sari Balaraja-tangerang/15610, Indonesia
Phone: 6221-29015618
Ciledug Sub-Branch
Ruko Dian Plaza Jl. Raden Fatah No. 8A Kelurahan Sudirman
Selatan,Ciledug/15225, Indonesia
Phone: 6221-7330545
Gunung Sabeulah Sub-Branch
JL. Gunung Sabeulah Kel.Tawangsari Kec. Tawang kota
Tasikmalaya/46112, Indonesia
Phone: 62265-326147
Magelang Sub-Branch
Ruko Metro Square Blok F No.25/56172, Indonesia
Phone: 62293-326498/326499
Padalarang Sub-Branch
Jl. Raya Padalarang No.463 H/40553, Indonesia
Phone: 6222-6803940/41
Patrol Sub-Branch
Jl. Raya Patrol Anjatan Blok Bunder No. 52/45256, Indonesia
Phone: 62234-5613627
Gianyar Sub-Branch
Jl. By.Pass Dharma Giri No.99/80511, Indonesia
Phone: 62361-8958295
Gresik Sub-Branch
Ruko KIG Jl. Tri Dharma Kav. A-14/61117, Indonesia
Phone: 6231-3981758
Karawang Sub-Branch
Jl. Tuparev No.499 (Johar) Kab.Karawang, Indonesia
Phone: 62267-8454873/8454874
Cibinong Sub-Branch
Jl. Raya Mayor Oking No.158 V/16918, Indonesia
Phone: 6221-87904397
248
Singaparna Sub-Branch
Jl. Raya Timur No.45 Singaparna/46416, Indonesia
Phone: 62265-543111-3
Ciamis Sub-Branch
Ruko Jl Pasar Manis No. 35 -Kab. Ciamis, Indonesia
Phone: 62265-772221
Sleman Sub-Branch
Jl. Magelang KM 12.8 No.200/55514, Indonesia
Phone: 62274-865922
Losari Sub-Branch
Jl. Letjen S. Parman No. 20 Kecamatan Pabuaran , Kab.
Cirebon Jawa Barat, Indonesia
Phone: 62231- 8832738-39
Bekasi/Pondok Gede Sub-Branch
Jl Raya Jatimakmur Blok A No. 20 Pondok Gede, Kota Bekasi
Ruko Taman Jatimakmur Indah, Indonesia
Phone: 6221-82611045-46
Kudus Sub-Branch
Jl. Sunan Kudus No.5 a/509000, Indonesia
Phone: 62291-4249241
Pamanukan Sub-Branch
Jl. Eyang Tirtapraja No.54 Kab.Subang/41254, Indonesia
Phone: 62260-551773
Majalaya Sub-Branch
Jl. Alun-alun utara/Jl. Tengah komp ruko permata majalaya
Blok C6/40382, Indonesia
Phone: 6222-85963799
Pangalengan Sub-Branch
Jl. Raya Pintu Pangalengan KM-1/40378, Indonesia
Phone: 6222-5979222
Megablock Cilegon Sub-Branch
Jl. Raya Ahmad Yani Komp. Cilegon Green Megablock D3 No.
17 - Kota. Cilegon, Indonesia
Phone: 62254-8484772
Rangkasbitung Sub-Branch
Jl Hardiwangun No.6 B Rangkasbitung - Kab. Lebak,
Indonesia
Phone: 62252-203612
Tabanan Sub-Branch
Jl. Ngurah Rai No. 73 Kediri/82121, Indonesia
Phone: 62361-814160
Surabaya /Darmo Boulevard Sub-Branch
Office Park II B.2 No.11 , Indonesia
Phone: 6231-7381906
Soreang Sub-Branch
Jl. Raya Soreang No.412/40900, Indonesia
Phone: 6222-5896880
Ujung Berung Sub-Branch
Jl AH Nasution No. 28 - Kota.Bandung, Indonesia
Phone: 6222-7834128
Jemur Sari/Surabaya selatan Sub-Branch
Jl. Raya Jemursari No. 15C Surabaya/60237, Indonesia
Phone: 6231-8480454
Lur Agung Sub-Branch
Jl. Siliwangi No. 18 Kec Luragung, Kab Kuningan/45581,
Indonesia
Phone: 62232-870016
Pangandaran Sub-Branch
Jl. Parapat, Desa Pangandaran, kec pangandaran kab
ciamis/46396, Indonesia
Phone: 62265-630400,630010
Woori Bank annual report 2018We Believe in Your Potential Purwodadi Sub-Branch
Jl. Letjend. S. Parman No. 13 Kel. Purwodadi Kec. Purwodadi
Jawa Tengah/58111, Indonesia
Phone: 62292-423399
Karangnunggal Sub-Branch
Jl. Raya Karangnunggal KP.Karangmekar RT/RW 03/09
Desa Hegarwangi Kec. Bantarkalong Kab, Indonesia
Phone: 62265 - 2584571/2584572
Sadang Sub-Branch
Sadang Terminal Square No.07,08,25 Jl. Raya Sadang
Purwakarta/41181, Indonesia
Phone: 62264-8220180
Leuwiliang Sub-Branch
Jl. Raya Jasinga 11A Kel. Cibeber, Kec. Leuwiliang Kab
Bogor/16640, Indonesia
Phone: 62251-8640297
Ciawi Tasikmalaya Sub-Branch
Jl. Perjuangan No.80 Kp.Karanganyar Rt. 04 Rw. 05 Desa
Pakemitan Kec Ciawi Kab. Tasikmalaya/46156, Indonesia
Phone: 62265-455163,455167
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, Indonesia
Phone: 62262-467708
Wonogiri Sub-Branch
Jalan Ahmad Yani No 66, Wonogiri, Indonesia
Phone: 62271-633600
Cilacap Sub-Branch
Jl. Jend. A Yani No.46 Cilacap/53212, Indonesia
Phone: 62282-537929
Kawali Sub-Branch
Jl. Siliwangi No.262, Desa Kawali mukti, Indonesia
Phone: 62265 791560
Kepanjen Sub-Branch
Jl. Kawi Ruko B7, Kepanjen, Indonesia
Phone: 6234-1-379840
Pamekasan Sub-Branch
Jl. Kabupaten No.114, Indonesia
Phone: 62324-333905/62324-333906
Cikajang Sub-Branch
Jl. Raya Cikajang No. 80 Garut, Indonesia
Phone: 6262-576094
Cilimus Sub-Branch
Jalan Raya Cilimus RT 017/04, Desa Cilimus Kecamatan
Cilimus, Kabupaten Kuningan, Indonesia
Phone: 62232-615411
Kendal Sub-Branch
Jl. Raya Utama No.9 weleri kendal, Indonesia
Phone: 62294-644704
Wonosari Sub-Branch
Jl. KH. Agus Salim No.71A Wonosari - Kab Gunungkidul,
Indonesia
Phone: 62274-3950673
Purbalingga Sub-Branch
Jl. Ahmad Yani No.42 Purbalingga, Indonesia
Phone: 62281-895553
Jombang Sub-Branch
Jl. KH. Wahid Hasyim No.71 Kota Jombang - Jawa
Timur/61411, Indonesia
Phone: 62321-878906, 62321-872906
Banjar Sub-Branch
Jl. Letjen Soewarto No.92/46321, Indonesia
Phone: 62265-740557
Boyolali Sub-Branch
Jl. Pandanaran No.179 B Kab.Boyolali/57313, Indonesia
Phone: 62276-323655
Martadinata/Cihapit Sub-Branch
Jl. RE Martadinata Pav 123 Bandung/40114, Indonesia
Phone: 6222- 7107090
Radio dalam Sub-Branch
JL. Radio dalam raya No.4 Kel. Gandaria Utara Kec.
Kebayoran baru Jakarta selatan/12160, Indonesia
Phone: 6221-7211005
Singaraja Sub-Branch
Jl. Ngurah Rai No. 16 Singaraja Kelurahan Kendran
Kecamatan Buleleng/81112, Indonesia
Phone: 62362-25098
Manonjaya Sub-Branch
Jl. RTA. Prawira Adiningrat No.214 A Desa Manonjaya kec.
Manonjaya-Tasikmalaya, Indonesia
Phone: 62265-380510
Surabaya Utara /kertajaya Sub-Branch
Jl. Kertajaya Indah No. 9/F-105 Surabaya/60161, Indonesia
Phone: 6231-5927202
Batu Sub-Branch
Jl. Brantas No.49 Batu-Malang/65314, Indonesia
Phone: 62341-513709
Palimanan Sub-Branch
Jl. Otto Iskandardinata No.503 Palimanan, Indonesia
Phone: 62231-343950
Cibadak Sub-Branch
Jl. Raya Suryakencana RT 03 RW 08, Cibadak - Kab.
Sukabumi
Phone: 6266-531915
Kemang Pratama Bekasi Sub-Branch
Jl. Niaga Raya Blok P No.22C RT 001/021 Kel. Bekasi,
Indonesia
Phone: 62254-369755
Wates Sub-Branch
Jl. Kolonel Sugiyono No.3-Wates, Indonesia
Phone: 62274-6657325
Tanjung Priok Sub-Branch
Jl Tampak Siring No 12, Kota. Jakarta Barat, Indonesia
Phone: 6221-4361667
Kebumen Sub-Branch
Jl. Ahmad Yani No.20, Kubumen, Indonesia
Phone: 62287-3878168
Sragen Sub-Branch
Jl. Sukowati No.156 Sragen, Indonesia
Phone: 62271-895015
Mangga Dua Sub-Branch
Ruko Harco Mangga Dua Blok L. No.5, Indonesia
Phone: 6221-62306495
Bintaro Sub-Branch
Jl Kesehatan No 18B, jakarta, Indonesia
Phone: 6221-7374693
Kelapa Gading Sub-Branch
Jl. Boulevard Barat Ruko MOI Blok I No.15, Indonesia
Phone: 62-21-29364053
KCP PROBOLINGGO
Ruko Manunggal No. 2, Jl. Soekarno Hatta, Indonesia
Phone: 6233-54491787
Kayu Agung Sub-Branch
Jl. Letnan Muthtar Saleh, Kayuagung, Palembang, South
Sumatra, Indonesia
Phone: 62-711-315828
Klaten Sub-Branch
Jl. Pemuda No. 246 Klaten, solo, Indonesia
Phone: 62-271-633600
Parung Sub-Branch
Jl. Rayal Parung RT002/RW006, Kacamatan Parung,
Kabupaten Bogor, Indonesia
Phone: 62-2151-861-9559
Pasuruan Sub-Branch
Jl. Panglima Sudirman No.45 Ruko I, Pasuruan, Malang,
Indonesia
Phone: 62-343-561-4700
Pati Sub-Branch
Jl. Ir. Susato No.40 Pati, Jawa Tengah, Indonesia
Phone: 62-24-352-1906
Sumenep Sub-Branch
JI. Trunouyo No. 244 Sumenep, Indonesia
Phone: 62-3428-6762234
Pelabuhan Ratu Sub-Branch
Jl. Siliwangi Rt/Rw 02/18, Desa Pelabuhan Ratu, Indonesia
Phone: 62-266-6249715
Posco Cilegon Sub-Branch
Annex Building Lt. 1 Jl. Afrika No.2 Krakatau Posco
Cilegon/42435, Indonesia
Phone: 62254-369755
Union Square Cikarang Sub-Branch
Ruko Union Square Blok A No.6 Lippo Cikarang, Cikarang
Selatan, Indonesia
Phone: 6221-89909797
249
KCP PANDEGLANG
Jl. Raya Labuan KM 1, Indonesia
Phone: 6225-35554739
KCP PASAR ATOM
Jl. Pangampon No. 75, Indonesia
Phone: 6231-3503350
KCP CITRA RAYA
Ruko Cikupa Niaga Mas Blok A No. 12, Indonesia
Phone: 6212-9014270
KCP CAKUNG
Jl. Jawa Raya Blok A 14 No. 7 (Kawasan Berikat Nusantara),
Indonesia
Phone: 6214-84556
KCP PANTAI INDAH KAPUK
Jl. Marina Raya, Rukan Cordoba Blok A Nomor 11, Indonesia
Phone: 6212-2571768
KCP CENTRAL PARK
Ruko Garden Shopping Arcade No. 9 A-C, Indonesia
Phone: 6212-9334623
KCP JEPARA
Jl. Pemuda No. 21 D-E, Indonesia
Phone: 6291-4290507
KCP BANJARNEGARA
Jl. Letjend S Parman No. 29, Indonesia
Phone: 6286-5963716
Lawang Sub-Branch
Ruko Lawang View Kav 8, JI. Thamrin, Kecamatan Lawang,
Indonesia
Phone: 62-341-423540
Purworejo Sub-Branch
JI. Ahmad Yani no.93, Purworejo, Indonesia
Phone: 62-75-321457
Woori Bank annual report 2018We Believe in Your Potential Brebes Sub-Branch
Jl. Jenderal Ahmad Yani No 26 F, Indonesia
Phone: 6288-34511421
Dalem Kaum Cash-Office
Jl Dalam Kaum No. 5 - Kota.Bandung, Indonesia
Phone: 6222-4211906
Batujajar Cash-Office
Jl. Batujajar No.324 Bandung, Indonesia
Phone: 6222-86861018/17/15
Antapani / Suci Cash-Office
Jl. Terusan Jakarta Ruko Pelangi Antapani No. 4 Antapani
Bandung, Indonesia
Phone: 6222-7279740
Jatinangor Cash-Office
Jl. Raya Jatinangor KM 20.5 KKBI IKOPIN/45363, Indonesia
Phone: 6222-7781587
Darmaraja Cash-Office
Jl. Raya Darmaraja No.253 desa Darmaraja, Kec Darmaraja
Kab.Sumedang/45372, Indonesia
Phone: 62262-429000,429069,428478
Cililitan Asabri Cash-Office
Jl. Mayjen Sutoyo No.11 Gedung PT Asabri (persero) Jl.
Cililitan - jakarta Timur/13630, Indonesia
Phone: 6221-80876494
Jatibarang Cash-Office
Jl. Letnan Joni No.178 Kec. Jatibarang - Kab
Indramayu/45273, Indonesia
Phone: 62834-352911
Pacar Anyar / Taman Topi Cash-Office
Jl. Sawojajar No.12 B, Kota. Bogor, Indonesia
Phone: 62251-8574423
Ciwai bogor / Juanda Cash-Office
Jl. Raya Sukabumi Km 2 Pertokoan MJ Center, Kab. Bogor,
Indonesia
Phone: 62251-8243874
Ungaran Cash-Office
Ruko permata hijau No.1 Jl. MT Haryono No. 16 Kel Ungaran
Kec Ungaran Barat Kab. Semarang/50511, Indonesia
Phone: 6224-76911017
Serang / pamila CilegonCash-Office
Jl. Raya Serang- pandeglang KM 11 Lingkungan waru
Lor,Desa/kel. Kamanisa Kec Curug Kota serang/42117,
Indonesia
Phone: 62254-222133
Gading Serpong Cash-Office
Jl. Boulevard Raya Gading Sepong, Ruko Alexandrite 3,
No.21, Kabupaten Tangerang, Indonesia
Phone: 62-21-5421-2159
Bojonergoro Cash-Office
Jl. Untung Suropati Ruko Adipura Block A-11, Indonesia
Phone: 62-353-311271
Surya symantri Cash-Office
Jl. Surya Sumantri No. 06 RT. 05 RW. 04, Indonesia
Phone: 62-22-2021760
Asabri Cash-Office
Jl. Kebonsari Elveka I No.5 - Surabaya Gedung Kantor,
Indonesia
Phone: 62-31-82517971
KK KEMANG
Kemang Square Lt 2, Unit I-11 & I-12, Jl. Kemang Raya No. 3 A,
Indonesia
Phone: 6221-22716210
KK CIKANDE
Jl. Raya Jakarta - Serang KM 68, Ruko Grand Permata No. 10,
Indonesia
Phone: 6225-47951546
Ang Snoul Branch
#109, National road No.4, Village Bek Chan, CommuneBek
Chan, District Ang Snuol, Cambodia
Phone: 855-23-999-355
Dalem Kaum Functional Office
JL. Dalem Kaum No.5 Bandung, Indonesia
Phone: 6222- 4233810
HONG KONG
Woori Global Markets Asia Limited
Rooms 1907-1909, 19/F, Gloucester Tower, The Landmark, 15
Queen's Road Central, Hong Kong
Phone: 852-3763-0888
RUSSIA
AO Woori Bank
8th floor., Lotte Plaza, 8, Novinsky Boulevard, Moscow,
121099, Russia
Phone: 7-495-783-9787
AO Woori Bank Saint-Petersburg Branch
1st Floor, Atlantic City, 126 Savushkina Street, Saint-
Petersburg, 197374, Russia
Phone: 7-812-327-9787
AO Woori Bank Vladivostok Representative Office
Vladivostok Business-Center
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