Woori Bank And Subsidiaries Notes To Consolidated Financial

Transcription

our bank,
your confidence
2011 ANNUAL REPORT
CONTENTS
01
our bank, your confidence
Special Customer Interview
Message from the CEO
Financial Highlights
News Highlights
Board of Directors & Managements
Corporate Governance
30
developing confidence
40
experiencing confidence
54
sustaining confidence
64
financial review
Risk Management
Happier Customers
Ethical Management
Global Business
Retail Banking
Private Banking
U-Banking / Smart Banking
SME Banking
Corporate Banking
Credit Card
Investment Banking
Trading & Derivatives
Retirement Pension
Product Development
Creating Financial Opportunities (Microcredit)
Inspiring Our People
Sharing Hearts
Management’s Discussion and Analysis
Independent Auditor’s Report
Organization Chart
Global Networks
CONTACT INFORMATION
Kim, Eun Kyung(Christine)
IR Manager, tel: 82-2-2002-3186,
[email protected]
Created by
Lucre Beyond Inc.
www.lucrebeyond.com
what
makes
you
confident
in life
?
about
life
Our dedicated team of employees develops and delivers
!!"!#$
%!&!'%
(!"&(!&
&')!%#
04
05 _ 2011 ANNUAL REPORT
about
confidence
*&!&&'
"(!#+$,('
-.,(/("
-0*/#
WOORI BANK
Choi, Jung Min · 36-year-old · housewife · Haeundae-gu, Busan
OUR BANK, YOUR CONFIDENCE
As a mother of a child, I naturally prioritize the happiness and the welfare
of my child over all other issues, especially in regards to readily preparing
for my son’s future career. When I become financially stable, I know I am
going to feel more confident in guaranteeing him a stable future.
$,(!%%!
"!!%!"1&%1"#2!$
*!3,(1('4!56"+'*!13*#
prepared.
WOORI BANK
smart.
08
I dream of becoming a respectable university professor like
Michael J. Sandel after studying abroad. Although it still seems
distant, I go to the university library and study hard every day
to achieve my goal of becoming a well-known professor who
teaches at one of the top universities in the world.
And I want to be smart in reaching my goal. Saving money has
become second nature to me in achieving my dreams. Wouldn’t
it be exciting to see those dreams come true?
$,(!&"!&%
!#$$636"+'4"
6"'4676"#$!&!"!
&8!"!'
'!&
#$(!&!#
Cha, Jung Ha · 21-year-old · university student · Seodaemoon-gu, Seoul
WOORI BANK
sustainable.
Lee, Jong Hee · 48-year-old · CEO · Gangnam-gu, Seoul
Meeting buyers from all over the world these days, I am thankful for my
current business development worldwide. I still remember the initial stage
of my business with only handful of local buyers and limited financial
support. But now business definitely flourished much stronger with
growing global networks. I feel proud of my success in business and I dream
of leading a truly global company one day.
$,(($&3619!"*
3!&"&"%#+&
%!!!&&"!&&'
$,(&#
trusted.
Kim, Won Sup · 52-year-old · coffee shop owner · Chung-gu, Ulsan
My wife and I opened a coffee shop after I retired from a company
working as a full-time employee for over 30 years. I was afraid of
trying something new in my 50’s, but after becoming a Barista, one
of my happiest moments now is enjoying and serving a cup of fresh
$,('
!$7!3'6.:.
93$9*'
!%!"%
#$%!&
morning coffee. I have my own shop to take care of and I am able to
!&!'
work flexibly according to my needs. So this was definitely the right
!%;&
choice. There is a Korean saying that “those who dream, and strive
#
for something new in life, give more than those who stand still”; that
definitely holds true for me.
WOORI BANK
Park, Jeong Ja · 61-year-old · former teacher · Suwon · Gyeonggi Province
secured.
In every spring, I am thrilled to breathe in a fresh
spring scent and bathe in the shining sunlight. As I
walk with my husband, along a boulevard dotted with
trees, I am nostalgic of my life in youth and imbue new
hopes for my life ahead. When the average life span is
100, I think I am still very young. Unlike the past, many
silver generations, like me, seem to positively gear up
for their post-retirement life to start a life anew. I will
continue to make steady investment for my life ahead
to enhance financial stability.
$,(!&
%!!1&#
2!:3<&9,(1('
<&9'=192&#
=(!!!"!
"&%(&&&!#
+!(!)'!"&
'%!&&!""!%#+
%""&&#
16
.&&">("&!>!(!
'!'!
!$,(#+!&&"!
?("#$!@#,()'
!&"%A!&!B'%'
&(!#.""!!
!&#
WOORI BANK
Message from
the CEO
18
Supported by the trust of our customers, we are the representative traditional
Korean bank with the longest history for over 113 years. By sharing our hearts
harmoniously, we promise we will continue to fulfill our greater financial
duties in enriching the nation and the national economy, as well as our social
responsibilities in supporting the society in need.
Dear Customers,
I would like to extend my sincere thanks to all our customers for giving Woori Bank your
trust and commitment over the past years.
In 2011, Woori Bank achieved net income of KRW 2,069 billion, up KRW 808 billion
from the previous year, and net interest income and non-interest income of KRW 5,200
billion and KRW 1,063 billion respectively, despite the continued economic downturn
at home and abroad and ever-fiercer competition in the market. This reaffirmed our
solid profit structure and business capabilities. Moreover, our BIS capital adequacy ratio
reached 13.78% and the ROA and ROE profitability indicators stood at 0.59% and 7.93%
respectively, levels which confirm our presence as a leading domestic bank.
Meanwhile, our constant efforts to clean up our balance sheet significantly improved the
Bank’s Non Performing Loan(NPL) ratio, to 1.65% as of year-end 2011, down from 3.34%
as of year-end 2010. We will continue to effectively manage asset soundness in 2012.
The financial environment in 2012 will not be easy. As the financial crisis in Europe
and the wider global economic downturn continue, delays in the domestic economic
recovery and possible household defaults put greater emphasis on risk management.
In particular, because only four major commercial banks dominate the banking sector,
competition is expected to grow fiercer.
WOORI BANK
Woori Bank has set itself a medium to long-term goal of becoming not only
the No.1 bank in Korea, but also amongst the top 10 in Asia.
We will make sure that 2012 will be a year when uncertainties and crises become
opportunities by fostering a sense of unity among all 15,000 staff, and by implementing
fundamentally strong and profit-oriented management.
We will undertake preemptive risk management by preparing ourselves against economic
uncertainties and greater volatility, diversify our foreign currency financing structure to
20
ensure stable liquidity management, and do our utmost to manage our loan-deposit ratio.
We are committed to expanding our network at home and abroad, exploring new market
and new businesses opportunities. Meanwhile, net interest margin(NIM) will be maintained
at a high level, profit structure will be stabilized by raising non-interest income(such as fee
revenues), and profit oriented growth will continue by focusing on prominent customers/
assets.
Our Bank will return the love that customers have given to us to the society as a whole.
We will also expand our support in helping the temporarily troubled or to–be reorganized
SMEs. Furthermore, the Bank will act as a microcredit lender in cooperation with
Woori Miso Financial Foundation, and will help the underprivileged through a strong
commitment to social contribution activities.
We promise to fulfill our role and responsibilities as a bank that enriches the nation and
the national economy. We have shared growth for 113 years, and this would not have
been possible without the love and support of our customers.
Supported by the trust of our customers, we are the representative traditional Korean
bank with the longest history for over 113 years. By sharing our hearts harmoniously, we
promise we will continue to fulfill our greater financial duties in enriching the nation and
the national economy, as well as our social responsibilities in supporting the society in
need.
Woori Bank has set itself a medium to long-term goal of becoming not only the No.1
bank in Korea, but also amongst the top 10 in Asia. We will not only become a bank that
represents Korea, but also a world class bank that broadens it’s financial horizon based on
the nation’s largest overseas network and a competitive workforce.
I would like to ask for your continued encouragement and support as we seek to achieve
our vision of becoming the No.1 Bank in Korea.
Please accept my warmest wishes for your health and happiness throughout the year.
Thank you.
Lee, Soon Woo
WOORI BANK
242,472
7.93
7.32
13.78
14.65
2009 2010 2011
14.39
ROE (Unit: %)
10.74
11.40
2009 2010 2011
10.40
0.49
22
0.41
2009 2010 2011
7.93
10.74
TIER I RATIO (Unit: %)
TOTAL ASSETS (Unit: KRW billion)
0.59
2009 2010 2011
0.59
ROA (Unit: %)
228,555
242,472
7.98
2,069
NET INCOME (Unit: KRW billion)
226,927
1,261
954
2,069
Financial
Highlights
13.78
2009 2010 2011
BIS RATIO (Unit: %)
2009 2010 2011
BALANCE SHEET (Unit: KRW billion)
Total Assets
Cash
Financial Assets
Loans and Receivables
Associates
Tangible & Others
Total Liabilities
Deposits
2009
2010
2011
Change (2010 VS 2011)
226,927
228,555
242,472
13,917
3,728
3,886
5,389
1,503
41,564
43,634
41,389
(2,245)
178,161
177,631
191,909
14,278
249
306
376
70
3,225
3,098
3,409
311
210,007
211,068
224,346
13,278
150,125
157,314
164,092
6,778
Borrowings
20,752
18,983
19,174
191
Debentures
23,476
20,192
19,812
(380)
Other Liabilities
15,654
14,578
21,267
6,689
16,920
17,487
18,126
639
Total Shareholders' Equity
* Bank account only under K-IFRS
INCOME STATEMENT (Unit: KRW billion)
Net Interest Income
K-GAAP
K-IFRS
2009
2010
2011
Change (2010 VS 2011)
3,749
4,488
5,200
712
958
1,083
1,063
(20)
Fees & Commissions
497
455
459
4
Revenues on Securities
152
330
271
(59)
Gain on FX/Derivative Transaction
132
187
249
62
Non-Interest Income
Trust Income
Revenues from Merchant Banking
Gains on Investment Securities
44
45
39
(6)
132
65
44
(21)
468
793
837
44
5,175
6,364
7,099
735
Credit Cost
2,064
2,560
1,964
(596)
SG&A Expenses
2,076
2,264
2,553
289
154
(4)
76
80
Income before Income Tax Expense
1,189
1,537
2,659
1,122
Gain on equity method Investments
-
1
1
0
235
275
590
315
954
1,261
2,069
808
Operating Revenue
Non-Operating Income
Income Tax Expense
Net Income
WOORI BANK
News
Highlights
Lee, Soon Woo Appointed as the 47th
President and Chief Executive Officer
of Woori Bank
Woori Bank was awarded No.1 Korean
Bank of the Year for Second Straight
Year by ‘The Banker’
March 24 th, 2011
November 30th, 2011
Lee, Soon Woo was appointed as the 47th Presi
!
March 24th, 2011.
Woori Bank was chosen No.1 Korean Bank of the
Year by The Banker. The Banker is the renowned
financial magazine published by the Financial
Times and is noted for announcing the world’s top
1,000 banks as well as giving awards to the designated No.1 bank in each country.
24
He said in his inauguration speech, “I feel honored
and gratified to serve Woori Bank. Let’s make
sure that we become the No.1 bank in Korea,
and then move beyond that, to become a leading
bank in Asia and beyond”. CEO Lee, Soon Woo
noted the 5 keyword of management, ‘Customer
First’, ‘Site-oriented Management’, ‘Ethical/Moral
Business(Proper Sales)’, ‘Glocaliztion’ and ‘Risk
Management & Clean up of our Bad Assets’. He
also added “Let’s make our workplace a joyful one,
so that our staff cannot wait for Monday to come”.
He emphasized the concept of ‘People First’, saying that our bank should prioritize staff satisfaction
5
achieve customer satisfaction.
He formed and managed a new ‘Task Force of
Management Innovation’ for two months after he
was inaugurated, and announced new ‘Customer
and Site-oriented Management Innovation Measures’ on June 10 th, 2011. On the same day, he
designated ‘Customer First’ and ‘Site-oriented
Management’ as management measures. Woori
Bank also introduced a new slogan, “The Bank
for Customer Convenience”, which shows clearly
where our priorities lie. Our new CEO has also
emphasized his personal commitment of making
Woori Bank the No.1 bank in Korea, which refers
to becoming the representative bank of Korea on a
global basis.
!"#cial performance and shareholder value over the
past three years, strategies to gain market dominance, efforts to support SMEs, and outstanding
achievements compared to the competitors as
determining factors in its selection, following the
#$'+'4
5
excellence of Woori Bank. In 2012, we will continue to build a position as a leading bank in Asia.
Woori Bank was designated as the Bank of the
Year in 2004, 2007, 2008, 2010 and 2011. Woori
Financial Group ranked No.1 in Korea, and No.72
among the world’s top 1,000 banks as chosen by
The Banker in terms of Tier 1 Capital, as of 2010end.
Winning the Top Customer Satisfaction Ranking and Inducted into
KMAC’s Hall of Fame
The Hanmaeum (One Heart)
Walk through Korea
Smart Banking One-Touch Service, Ranks
First in the Banking Sector of the Korea
Smart App Assessment Index
November 2nd, 2011
July 1st – 23rd, 2011
June 28th, 2011
!
<
Prize for customer satisfaction management
from Korea Management Association Consulting (KMAC), and was inducted into KMAC’s
Hall of Fame. This is attributable to customers’
trust in a bank with a 113-year history and a
tradition of customer service.
Woori Bank conducted the ‘Hanmaeum (One
Heart) Walk through Korea’ from July 1st –
23rd, 2011, where 112 staff walked together
to mark the 112th anniversary of Woori Bank.
The walkathon started at Haenam, the southernmost tip of the country, in South Jeolla
Province, and passed through Suncheon,
Jinju, Gumi, Daejeon, Cheonan, Suwon and
Incheon. The final destination was KINTEX,
Ilsan where the Bank’s management strategy
meeting for the latter half of 2011 was held.
The walkathon covered some 720 km, and
the 112 participants walked 50 - 70km each
for two days and one night in a relay format.
Despite the heavy rain and sizzling heat of a
Korean summer, the participating staff were
proud of their success, representing the
Bank’s No. 1 spirit of challenge.
Woori Bank’s smart banking ‘one-touch’ service
#
>rea Smart App Assessment Index (KSAAI), coorganized by Sookmyung Women’s University’s
Web Development Research Institute and the
Electronic Times.
President & CEO Lee, Soon Woo’s strong
commitment to customer service has been
strongly communicated to all staff since 2009,
and the Bank has continuously put into action
its mission to become “The Bank for Customer
Convenience”.
>?QQV
categories – business, customer immersion,
content, design and technology. The Bank has a
dominant position as No.1 bank in the business
5
Z
in the overall score.
In particular, in the business category, the Bank
gained high scores through convenience and user-friendliness in money transfers and also earned
high scores by its commitment to take the visually
impaired needs into consideration when designing and implementing this app.
WOORI BANK
Board of Directors
& Management
26
STANDING DIRECTORS
Kim, Yong Woo
Lee, Soon Woo
Kim, Yang Jin
Standing Audit Committee Member / Director
President and CEO
Deputy President / Director
t nd
t
Deputy President / Director
Deputy President & Head, Consumer Banking
Business Unit, Woori Bank
tExecutive Vice President, Consumer Banking
Business Unit, Woori Bank
tExecutive Vice President, Management Support
Unit, Woori Bank
tHead, Corporate Financial Unit, Hanvit Bank
tMBA, Korea University Business School
tB.A. in Laws, Sungkyunkwan University
t
2 Deputy Secretary General,
The Board of Audit and Inspection of Korea
tDeputy Director, The Board of Audit and
Inspection of Korea
tPassed the 23rd National Administrative
Examination
tM.A. in Public Administration, Syracuse University
tB.A. in Economics, Yonsei University
t
Currently Senior Managing Director, Woori
Financial Group
tExecutive Vice President, Operation & Support
Unit, Woori Bank
tCompliance Officer, Woori Bank
tSenior Relationship Manager, Jung-ang
Corporate Banking Center, Woori Bank
tHead, Synergy Promotion Dept, Woori Bank
tB.A. in Agricultural Education, Seoul National
University
NON-STANDING DIRECTOR
OUTSIDE DIRECTORS
Lee, Pal Seung
Lee, Yong Keun
Eun, Soong Pyo
Currently Chairman & CEO, Woori Financial Group
tCurrently President, Woori Multicultural
Scholarship Foundation
tCEO, Seoul Philharmonic Orchestra
tPresident & CEO, Woori Investment & Securities
tManaging Director, Hanil Bank
tAIM(Advanced Information Management)
Program, KAIST
tMBA, Korea University
tB.A. in Laws, Korea University
t
Adviser, Korea Anderson Group
t2nd President, Financial Supervisory Commission and
President of Financial Supervisory Service
tExecutive Director, Asia Development Bank
tPassed the 9th National Administrative Examination,
Division of Finance and Economy
tPh.D in Public Administration, Han Yang University
tM.A. in Economics, Institute of Social Studies,
The Netherlands
tM.A. in Public Administration, Seoul National University
t
t
B.A. in Economics, Korea University
t
Lee, Kwi Nam
Currently Attorney, LKN Law Institute
61st Minister, Ministry of Justice Republic of Korea
tVice Minister, Ministry of Justice Republic of Korea
tPassed the 22nd National Bar Exam
t
t
B.A. in Public Administration, Korea University
t
Yoo, Kwan Hee
Currently Chairman, Korean Academic Society of
Business Administration
tCurrently Professor, Business Administration and
Management, Korea University
tChairman, Korean Association of Small Business Studies
tPh.D in Business Administration and Management,
Indiana State University
tM.A. in Business Administration and Management,
Indiana State University
tB.A. in Business Administration and Management,
t
Currently Professor, Law School, Yeungnam University
Currently Vice Chairman, Korea Public Land Law Association Inc
tProfessor, Department of Police and Criminal Justice,
Silla University
tBank of Korea
tPh.D in Laws, University Tübingen, Germany
t
B.A. in Laws, Yonsei University
t
Kim, Jung Sik
Currently Dean, College of Business & Economics,
Yonsei University
tCurrently Dean, Graduate School of Economics,
Yonsei University
tCurrently Chairman, Korea International Finance Association
tManaging Director, Korea Money & Finance Association
tProfessor, College of Business & Economics,
Yonsei University
tPh.D. in Economics, Claremont Graduate University
tM.A. in Economics, Yonsei University
t
B.A. in Economics, Yonsei University
t
Chai, Hee-yul
Currently Professor, College of Economics,
Kyonggi University
tNon-standing member, Financial Supervisory
Commission
tAssociate professor, Universite de LilleⅡ, France
tPh.D in Economics, L’Universit de Paris X, France
tM.A. in Economics, Seoul National University
t
B.A. in Economics, Seoul National University
t
Seoul National University
Chung, Wook Ho
Currently Head, Department of Special Asset
Korea Deposit Insurance Corporation (KDIC)
tHead, Department of Risk ManagementⅡ, KDIC
tHead, Department of Asset Recovery Department, KDIC
tB.A. in Laws, Sungkyunkwan University
t
t
EXECUTIVE VICE PRESIDENT
Choi, Seung Nam
Seo, Man Ho
Kim, Byung Hyo
Financial Market Business Unit
Credit Support Unit
Global Business Unit
Kang, Won
Kim, Jang Hag
Kim, Jin Seok
Consumer Banking Business Unit
Small & Medium Corporate Banking Business Unit
Card Business Unit
Yoo, Jung Keun
Son, Geun Sun
Lee, Kwang Goo
Institutional Banking Business Unit
Compliance Officer
Finance & Management Planning Unit
Jung, Hwa Young
Baeg, Goog Jong
Lee, Dong Gun
Human Resources Unit
Corporate Banking Business Unit
Operation & Support Unit
Kim, Jong Oun
Rhee, Youngtae
Risk Management Unit
Investment Banking Business Unit
WOORI BANK
Corporate
Governance
28
COMPOSITION OF THE BOARD OF
DIRECTORS
As of the end of March 2012, Woori Bank’s
Board of Directors consists of 11 executive directors: one non-standing director,
three standing directors and seven outside
directors, appointed to increase the relevant
expertise and independence of the Board.
The seven outside directors are selected
based on their experience in the fields of
5#
public relations; many are also well-known
public figures. They support and monitor
the Bank’s strategic decision-making and
overall business affairs.
MAJOR ACTIVITIES FOR 2011
The Board held 17 meetings in 2011 to discuss a total of 58 pending issues and 63
55
outside directors was 92%.
At the request of the outside directors, an
outside director meeting was held one week
prior to each full Board meeting, to ensure
sufficient discussion and in-depth review
of pending issues. Directors from different
5Z
and maximized shareholders value by assimilating information from activities both
inside& outside the Bank, and then giving
onsite oriented advice based on these activities & their expertise knowledge.
At each quarterly Board meeting, the quarterly management records were agreed
upon, and general discussions took place,
#
55Z
4
The agenda of different meetings included:
reporting on the submission of plans for the
implementation of the Memorandum of Understanding (MOU) signed with the Financial
Supervisory Service (FSS); results and details of the implementation of the MOU with
Korea Deposit Insurance Corporation(KDIC);
plans to issue foreign currency-denominated
bonds; comprehensive briefings on major loans; briefings on NPLs; review of the
implementation of the Board of Directors’ or-
5
#\
committees under the Board of Directors.
Of particular note, plans were made to enhance sector-specific expertise and comZ
#
<Z4?Z
55
January 2011, a provisional agreement was
reached to launch the ‘Woori Fund Service’,
a subsidiary which will independently undertake various important functions, including
the analysis of fund management performance, verification of fund-based prices,
support for development of fund products,
and accounting tasks for funds. In addition, in September 2011, it was provisionally
agreed to separate the card business that
was previously dealt with internally by the
Bank. At the December meeting, the Board
also confirmed its draft management plan,
following in-depth discussions on many issues facing the Bank amid continuing market changes.
TABLE OF CORPORATE GOVERNANCE
Type of
Meeting
No. of
Agenda Issues
6!!54"'
,
*D'
+"E7
4"&
24
10
No. of
Briefings
Major
Issues
18
- Holding regular shareholders’ meetings, operating the Board
of Directors / Board of Directors’ Management Committee,
discussing corporate governance issues, setting and
implementing management plans and strategies, launching and
realigning divisions
13
^ QZZ5
5
ZZ55
5
actions for reviewing the MOU, plans for issuing bonds (including
foreign currency bonds), and managing credit limits
9F<(4"&
E=&E+F
=ED5<"
11
19
- Comprehensive briefs on major loans, investing in private equity
55_
_
companies’ commitments to invest, dealing with audit and internal
control issues, and managing and supporting special contributions
of guarantee institutions for SMEs
:<E."8
4"&
7
8
- Performance evaluation / compensation, appointing staff,
labor-management relations
.!
6
5
Total
58
63
COMMITTEES UNDER THE BOARD
OF DIRECTORS
To suppor t the ef f icient operation of
th e B o a rd of D i re c to r s, Wo o r i B a n k
has established the Board Governance
Commit tee, Board Risk Management
Committee, Board Audit Committee, Board
Compensation Committee, and Board Audit
Committee Member Recommendation
Committee.
Board Governance Committee
The Committee actively suppor ts the
Board of Directors by studying/reviewing
the overall function & operation of the
Board and also by deciding/examining
management schemes regarding handover
& training issues. The Committee also
acts as the Outside Director Candidate
Recommendation Committee, pursuant to
Article 22-3 of the Bank Act.
Board Risk Management Committee
The Committee meets at least quarterly
and on an ad hoc basis to deliberate on
risk management strategies and policies,
risk tolerance levels and transactions or
exposures, thereby discern, measure and
monitor overall risks in a timely manner.
Board Audit Committee
The Committee establishes and executes
internal audit plans, implement outcome
evaluations, and implement ex-post audit
measures to improve adequate internal
control system and effectively evaluate
management performance measures.
Board Compensation Committee
The Committee is independent from the
Bank’s management, and is in charge of
establishing compensation policies, and
monitoring the design and operation of the
Bank’s performance-based compensation
systems.
Board Audit Committee Member
Recommendation Committee
The Committee recommends candidates
for the Audit Committee.
PLANS FOR 2012
In 2012, the Board will make significant
contributions to the Bank’s management
by discussing major issues at regular
meetings. Already by end-March 2012,
]
with agendas including the approval of
financial statements as of year-end 2011
and approval of the Chairman of the Board
of Directors. Board meetings will continue
on issues such as analysis of management
performance and the 2013 management
plan. Meetings will also be held on an
ad-hoc basis whenever needed, dealing
with issues such as management goals,
4
I n 2012, Wo o r i B a n k w i l l s e r ve a s a
reliable par tner bank that excels and
grows through transparent and efficient
management innovation.
developing
confidence
how can
Risk Management
boost the quality
services?
30
D(&"&&!"&#
=('%
&("!'!%(#$!(%!
!!'B?&!"B#
EMPLOYEE _Park, Jang Keun * JOB TITLE _Deputy General Manager, Risk Management Dept * AGE_45
WOORI BANK
Risk
Management
“Risks Management is the key to
maintaining Profits”: Woori Bank
minimizes losses by identifying
risk quickly and accurately through
best-practice risk management
programs, building a bank that is
robust and reliable.
Risk Management Organization
2011 REVIEW
Woori Bank’s risk management consists of
Credit Risk Management
three independent bodies, each providing
In 2011, Woori Bank operated, managed and
unique insights and checks on the Bank’s
verified new evaluation models (corporate
risk environment.
and retail) approved under the new BIS Inter-
1. The top decision maker is the Board
nal Ratings Act, obtaining timely and relevant
Risk Management Commit tee, which
reviews of their distinctiveness, predictability
meets at least quarterly to deliberate on
and stability.
risk management strategies & policies, and
to set acceptable risk levels & limits.
Using these models, bankruptcy rates for
each corporate rating and retail pool were es-
2. The Executive Risk Management Committee holds monthly meetings to review
and revise business plans and departmentlevel strategies, to ensure continuous
adjustments in response to corporate risk
management strategies and policies. The
Executive Committee also reviews, adjusts
and controls matters in relation to fund
#
55^Z
agement measures.
32
3. The Risk Management Unit is an independent organization which consists of the
Risk Management Department, in charge
of the overall existing risk management issues, and the Loan Review Department,
which takes responsibility for the day-today oversight of Woori Bank’s risk management operations.
Z
on the time elapsed from approval. The Bank
ensures on a yearly basis that it maintains
distinctive models for separate corporate/
retail evaluation, and always double-checks
their stability and effectiveness in operation.
DEVELOPING CONFIDENCE
Market Risk Management
Operational Risk Management
PLANS FOR 2012
Woori Bank uses the Standard Approach
For the second time, we successfully com-
Credit Risk Management
and the Internal Model to calculate capital
pleted the FSS approval and review pro-
In 2012, systems upgrades for credit risks
adequacy with respect to modeled market
cess for our application regarding approval
will unfold in multiple directions. The Bank
risk events. The Standard Approach ap-
of the High-level Internal Ratings-based
will use the early warning systems from the
Z5
Z
Z
`-
approach, and acquired final approval in
scoring method developed in 2010, and
cial Supervisory Service (FSS) guidelines,
June 2009. Since then, we have applied it
expand its usage so that it can be used in
#5
V
5{
5|
5
to our BIS ratio calculation, while also con-
credit approvals.
market risks at the 99% confidence level
tinuing to improve management systems,
using variance-covariance (delta-gamma)
control structures and measurement sys-
techniques assuming a 10-day holding
tems for the maintenance and upgrading of
period. Potential losses under extreme
risk management.
situations(such as IMF) are measured using stress tests to prepare for any critical
To this end, we apply the ORM Index in
events that might surface, and Internal
the Bank-wide performance management
Model is validated by comparing Profit &
index. We conduct OR coaching for units
Loss vs VaR using a daily basis back test-
struggling to meet the ORM Index, to help
ing method.
them to reduce OR.
In response to changes in financial statements and the adoption of IFRS, we have
opened a new account and encouraged
improvement of OR measurement systems.
Corporate credit rating model(MEs/
SEs) and retail(household, SOHO, credit
cards) credit scoring model developed
based on the 2005 ~ 2007 data. These
models however will be enhanced within
the first half of 2012 by utilizing recent
data after 2008.
Interest and Liquidity Risk
Management
We plan to complete the Phase 1 IT system
within June 2012 to calculate the Bank’s
liquidity management ratios (LCR and
NSFR) in accordance with Basel III requirements. We will also regularly review the
interest rate and liquidity risk management
models by computerizing the back-test to
verify the interest VaR and EaR, as well as
customer behavior models.
Operational Risk Management
We plan to implement the KRI, a key risk
indicator whereby OR can be monitored
in real time (currently done monthly), to
enhance the timeliness of ORM and support risk management on business sites.
Requirements for checking OR can be
done prior to the close of business and
can be reviewed on the same day. Notices
from the real time indicator can be sent via
SMS to the general manager of the branch,
who can then check the appropriateness
of transactions made on that day and alert
the staff if necessary, thus helping to lower
OR.
WOORI BANK
Happier
Customers
Woori Bank wants to be the No.1 Bank in
Korea, and a vital part of this is creating
REVIEW OF 2011 AND PLANS
FOR 2012
the very best in customer satisfaction. We
Differentiated CS Programs
therefore undertake Bank-wide customer
satisfaction management based on me-
Our top priority is the principle
of ‘Customers First’(customer
satisfaction). Woori Bank will enable
our customers to conveniently and
efficiently access all our services in
Korea and beyond. We will do this
by prioritizing them in everything
we do.
dium and long-term strategies that fully

tion analysis inside and outside the Bank,
and feedback from all our staff on a top
down or bottom up basis. The Bank’s
customer satisfaction unit consists of an
inverted pyramid oriented towards customers and staff on site, instead of the usual
Z
Z^
Z4Z
priority is our customers, and everyone at
Woori Bank is aligned in the same direction.
CEO Lee, Soon Woo, who took the helm
in March 2011, unveiled a corporate slogan
“The Bank for Customer Convenience”
along with a series of management measures focused on customer first and site-
34
oriented management. We execute our
customer satisfaction program based on
specific strategies under the new slogan,
always aiming to be no. 1 in customer happiness. These include a monthly phone
survey of customers who visited a branch
the previous day, to evaluate the service
4!
5

of the customer as submitted through various channels to the ‘customer satisfaction
KPI’.
In 2011, Woori Bank held a differentiated
training session called Personal Image
Making(PIM) of the staff and thereby raised
#
set. This contributed to stronger customer
loyalty and improved business capabilities.
Moreover, the Bank shared customer feedback via video training on ‘Woori Action’,
and proposed active measures to improve
customer satisfaction.
A training session called ‘Two-Day One-
We also undertook a ‘Service Focus’, se-
Night Harmony’ was launched, and re-
lecting issues and themes every quarter
Creating a Work Culture
for Customer Happiness
ceived positive feedback from our staff. It
5

Our philosophy is that a bank where all
has been particularly effective at improving
our service, and ensuring that customers
the staf f are happy makes customers
internal communication and raising aware-
really were able to feel the change.
happy as well, and so we strive to facilitate
ness about the importance of a positive
a happy work culture. In particular, we
attitude. In May 2011, 823 customer sat-
We have also conducted surveys to raise
garnered great feedback from our staff
isfaction leaders participated in the ‘2011
customer satisfaction, and set up a Cus-
on the congratulatory letters sent from
Customer Satisfaction Leader Hanmaeum
tomer Satisfaction Portal System and a
the Bank’s CEO to the staff who excel in
Festival’ to boost morale and strengthen
Cyber Warning System. The Customer Sat-
customer satisfaction, and on the program
customer satisfaction leadership.
isfaction Portal System is to prevent cus-
for ‘Finding Partners in Customer Satis-
tomer complaints and raise standards of
faction’ boosting morale and therefore, in
We published the Service Webzine in 2011
customer satisfaction, based on data from
turn, boosting customer happiness. The
to enhance ‘Customer First’ service, and to
branches, and to use Woori Bank’s exclu-
number of branches excelling in customer
raise our competitiveness by sharing infor-
sive customer satisfaction and integrated
satisfaction increased, which has further
mation. Heads of branches and other staff
voice of the customer system to strengthen
encouraged our staff to strive in improving
greeted customers at all our branches,
marketing functions. The Cyber Warning
customer satisfaction.
thus improving our image with custom-
System monitors customer feedback in
ers and contributing to a happy culture for
real time, and thus improves service, pre-
The Staff Satisfaction Center organized
staff.
vents customer complaints and improves
various programs, such as ‘Happy Monday,
products and systems.
Reach out for Luck’, weekend trips, and a
‘one day meditation experience’. In 2012,
we plan to upgrade all customer-related
activities, including the branch environment, and continue to initiate projects that
into the Customer Service Hall of Fame.
AWARDS
- Top in Customer Satisfaction
Management Award, inducted into the
Customer Service Hall of Fame and
Best CEO Award (Korea Management
Association Consulting(KMAC))
- Grand Prize of Customer Delight Award
(Korea Economic Daily),
Four Straight Years
- 1st in Korean Standard Service Quality
Index(KS-SQI) Banking Sector for
Customer Satisfaction
(Korean Standards Association)
WOORI BANK
Ethical
Management
5
REVIEW OF 2011
555
-
PRACTICING WOORI BANK’S
CODE OF ETHICS
pansion of the Bank’s business operations,
increase various forms of market and legal
risks. Woori Bank aims to grant sustain-
All staff at Woori Bank takes part
in ethical management programs,
and make sure that ethical
management takes root in its
daily practices, so that customers,
shareholders and the community
can rely on us completely. Our
bank remains an exemplary
ethical company.
able growth to the national economy and
social development by ethically managing
and fulfilling our social responsibilities towards all stakeholders such as customers,
shareholders, staff, the nation and society.
To this end, we established Woori Bank’s
Code of Ethics to serve as principles by
which all staff must abide. We also set in
Z5
!"
^Z
Woori Bank put into place various practices and a system to ensure our Code of
Ethics is implemented.
Operating the Clean Center:
The ‘Clean Center’ facilitates reporting or
whistleblowing on ethical matters as well
as consulting on ethical management. Vitally, it protects whistleblowers, to encourage ethical management.
Guidelines”, to train staff, to comply with
our guidelines, and to increase customer
happiness.
Operating a Reporting System for
Gift & Entertainment Exchange:
If money or gifts and entertainment are
offered by business customers, clients or
other staff, and if for special occasions exceeds KRW 50,000, they must be reported
to the Legal Support Division. So far, approximately 34 cases have been reported
36
and KRW 18 million has been returned.
Operating the Fit & Proper
Employee Evaluation System:
We check that all product-specific princi-
Provide practical legal advice:
ple-based guidelines is followed, and post
We will strengthen problem-solving skills
The Ethical Management Support Council
monthly results on Woori Bank’s Intranet.
on legal matters for staff, and ensure that
meeting was held every month in 2011, and
In addition, we provide training material on
principle-based business can become
the Council honored 1,778 excellent cases
ethical management, such as our monthly
embedded through legal support. We will
of ethical management.
“Ethical Compliance Practices” manual,
therefore highlight and explain recent fi-
containing important reminders and practi-
nancial litigation, publish columns written
cal cases on ethical management, as well
by attorneys and publish the Woori Legal
as posting “100 Questions and Answers on
Report.
Public Sale of Congratulatory Gifts:
In Korea, it is traditional to offer celebra#
#
Z5
#5^
appointed executives. Woori Bank now
sells these gifts on behalf of social welfare
organizations, and, in 2011, we sold 658
gifts and donated revenues of KRW 16 million.
Ethical Management” for training through
case studies. We also took part in the 32nd
CEO Forum on Ethical Management and
the 14th Ethical Management Committee
of the Korea Chamber of Commerce and
Industry.
Provide intensive training on ethical
management:
We will continue to distribute “Ethical Compliance Practices” and “100 Questions and
Answers on Ethical Management” to all
staff.
OPEN LEGAL SERVICES AND
PRINCIPLE-BASED MONITORING
PLANS FOR 2012
In 2012, Woori Bank will continue to aim in
Woori Bank offers open legal services
being the best and most transparent bank
whereby in-house lawyers resolve staff
in Korea.
tion, and consulting on litigation, covering
119 (the Korean version of 911)
Site-oriented legal services:
a whole range of civil, criminal and house-
We will provide legal assistance from in-
hold matters.
house lawyers to any staff requiring legal
help for work or for personal reasons.
V$'++#
-
Moreover, we plan to extend these ser-
ness units’ legal monitoring. Each busi-
vices through legal meetings at business
ness unit now completes a standardized
units and lectures conducted by in-house
checklist for self-evaluation on whether
lawyers.
prior reviews were completed regarding
major legal issues that might surface when
We will strengthen the prior legal reviews of
the business operations initiated by each
complaints on legal matters through direct
legal consulting, assisting in an investiga-
Strengthen reviews of legal
compliance at business units:
handling new products, whether legal
Strengthen training
in ethical management:
monitoring was implemented regularly for
We will encourage staff to practice autono-
staff, and whether prior reviews were com-
mous ethical management through practi-
pleted on documents submitted to outside
cal training such as the “100 Questions
institutions. Each unit submitted its results
and Answers on Ethical Management”, and
so that all legal risks could be minimized.
the “Ethical Compliance Practices” manual.
We will also encourage staff to practice
ethical management in their daily business
operations through in-depth training for all
specialists, including private banker, audit
Z5
4
business unit, and, where weaknesses are
identified, we will conduct theme based
monitoring to preemptively prevent legal
risks from surfacing throughout the Bank.
WOORI BANK
Global
Business
Woori Bank is located in 15 countries
as of December 2011, with an 56
overseas network consisting of
12 branches, 5 local subsidiaries
(40 branches belonging to subsidiaries),
and 4 representative ofﬁces.
We plan to expand local subsidiaries
and branches, especially in emerging
regions with high growth potentials,
so that we can become a truly
global and competitive bank.
2011 REVIEW
We also plan to add 14 more independent
Despite a challenging business environ-
network worldwide, centering around
ment in 2011, Woori Bank’s overseas op-
existing branches: four of the Dhaka sub
erations now have total assets of USD 11.3
branch and one service center in Bangla-
billion, loans of USD 5.2billion and operat-
desh, two branches and four sub branches
ing revenue for the year of USD 310 million.
of our Chinese subsidiary, and three sub
This can be attributed to diversifying our
branches in Indonesia.
funding sources, and reducing the level
stood at 1.29% as of 2011. Some of our
Building Relationships with
Overseas Financial Institutions
achievements were as follows.
2011 was a year when liquidity risk manage-
of low-profit assets. Our delinquency rate
Z
5-
Strengthening the Overseas
Network
sis topped the agenda. Woori Bank therefore
!5
$'++
rowers through active marketing and building
in In August, we opened St. Petersburg
relationships with overseas financial institu-
branch in Russia, followed by a sub branch
tions, and also receiving sufficient foreign
in ZhangJiaGang, China and the Krakatau-
currency funds that contributed to effective
?
V
4Z
liquidity management.
expanded its number of foreign currency bor-
in Chennai, India and São Paolo, Brazil
38
Worldwide Branch Network
became a branch and a subsidiary respec-
5
5Z#
5
tively to serve those new markets for us,
institutions is critical as we have considerably
and we plan to open a branch in Sydney,
increased the frequency and scale of foreign
Australia.
currency and international financial transac
(56 Networks in 15 Nations)
and treasury. Woori Bank now has a Financial
Zao
Woori
Bank
Russia
3
3+
Woori
America
Bank
Woori
Bank
China
@%0(
Woori
Global
Markets
6
Asia Ltd
2(
HK
D"
@%!
,!
!(
:
Shanghai
:")"
:*!4!
6"
)3&
P.T Bank
Woori
Indonesia
69
:.
.,!GH
.<.GH
.6G
H
* Number of Branches under Overseas Subsidiary: Woori Bank America(18), Woori Bank China(14),
P.T Bank Woori Indonesia(5), Zao Woori Bank Russia(2) and Woori Global Markets Asia Ltd HK(1)

55
5
Z_
$''
and Russia (January 2008)
Institution(FI) Relationship Manager in every
Meanwhile, Woori Bank developed an exclu-
region who is in charge of marketing and cre-
sive foreign currency fund settlement system
ating new business opportunities.
titled ‘Woori Bank Clearing System(WCS).
This system allow international offbound
PLANS FOR 2012
We will expand our overseas network,
particularly through our subsidiaries in
India and Australia. We will then have an
We have expanded our business through al-
settlement services of foreign currencies
liances and deepening ties with numerous
especially in Korean Won and Chinese Yuan,
5\Z5
5-
and furthermore provide services to transfer
liances with major banks in the U.S.A. which
money directly to overseas through business
enabled us to expand our Letter of Credit
alliances with many global banks worldwide.
business in 2011.
As a result, we cover foreign exchange fund,
AWARDS
settlement and payment services promptly
- The Leading Counterparty Bank, 2011
overseas branch network on every conti
ZQ
5
aspire and become a truely global bank.
In April 2011, Woori Bank was designated as
5Z
5-
for Korea in Foreign Exchange
the Leading Counterparty Bank 2011 for Ko-
ers, offering differentiated services befitting
(The Asian Banker)
rea by The Asian Banker, a renowned inter-
the prestige of Woori Bank.
national banking publication, reaffirming our
success in Foreign Exchange area.
Developing New Products
It is especially notable in terms of Forex that
ened our overseas branches. In Tokyo, we
Woori Bank offers differentiated services.
launched the “Korean Won Time Deposit”
First, as for joint purchase for money ex-
enabling payment/settlement in Korean Won
change, we offer cyber money exchange
that is funded by Japanese Yen, as well as
marketplace where application for money ex-
introducing “International Cash Service”. In
change is possible over the Internet. So, once
2012, we will focus on strengthening product
a designated amount of money or a designat-
marketing, expanding our portfolio of new
ed number of people are gathered, phased-
products and building the interest and non-
out preferential treatment for forex rate is
Z
4!
5
5Z-
offered to the customers. Second, it is a web
ing a system to offer online internet based
EDI(electronic document interchange) service
wire transfer services at home and abroad.
New product development has strength-
that trading companies can utilize(corporate
Internet banking service) in regards to export/
import-related banking services without having to visit the Bank.
EMPLOYEE _Song, Kyo Young * JOB TITLE _Assistant Manager, Gil-dong Station Branch * AGE_24
40
experiencing
confidence
what impact
does Managing
On-site have
on the quality of
banking services?
$!&!'!5!%!
("#.?&"&
!'!B"
>"&!!"
!!#
WOORI BANK
Business
Review
42
43 Retail Banking
45 Private Banking
46 U-Banking / Smart Banking
47 SME Banking
48 Corporate Banking
49 Credit Card
50 Investment Banking
51 Trading & Derivatives
52 Retirement Pensions
53 Product Development
EXPERIENCING CONFIDENCE
Retail
Banking
Woori Bank is aiming to be the
no. 1 retail bank in Korea by
securing liquidity, improving
proﬁtability, raising asset soundness
and managing risk. We will make
continuous effort to attract retail
customers, and thus to establish a
stable base for growth.
REVIEW OF 2011
company Woori Financial in co marketing
As the global financial crisis continued,
products or sharing customers database,
Woori Bank’s retail banking served as a base
thereby promoting intra-Group synergy.
for our banking operations. The retail bank-
This helped to diversify the profit base of
ing division laid the foundations for solid
both companies while distributing risk over
#
5|ZZ-
a wider asset base. To this end, the Bank
ability and increasing asset soundness. The
jointly developed and soldedly co-marketed
division was able to up-sell high-value prod-
products targeting automobile purchasers
ucts to mid-tier customers to maximize op-
as well as low-credit borrowers that are ineli-
erating income, increase low-cost deposits
gible to apply for loans in the banking sector
and preemptively manage its risks. Another
Z5
Z#
Z
the Group.
sales in cooperation with sister companies in
the Woori Financial Group.
Extending Our Reach
As of December 2011, Woori Bank operates
942
17 million customers
The key achievements in 2011 were the
942 branches in Korea to provide complete
expansion of the retail base account and
financial services to approximately 17 mil-
increases in high-yield customers. By at-
lion customers. The Bank’s 7,000 ATMs
tracting new customers, including those in
and cash dispensers extend the company’s
schools and hospitals, corporate executives,
reach while raising customer satisfaction and
Z55
#5
-
delivering ‘any time, anywhere’ banking con-
prises, the number of high-yield customers
venience. About 60 branches will be opened
rose sharply. As a result of initiating busi-
in 2012, with a focus on getting closer to the
nesses such as payroll transfer, credit cards
customer. Woori Bank’s efforts to expand
and automatic transfer of fees, core deposits
its service delivery channels are key com-
increased by KRW 1.2 trillion.
ponents in its strategy of building customer
loyalty and increasing customers access to
Achieving Group Synergy
The Bank integrated the Woori Bonus Family
Membership preferencial customers services
to include the customers of Woori Aviva Life
Providing services to approximately 17 million customers
by operating 942 branches as of December-end, 2011
Insurance and Woori Financial. Woori Bank
formed a business alliance with its sister
5
4
WOORI BANK
PLANS FOR 2012
We also plan to expand operations in funds,
We aim to increase one million new custom-
bancassurance, money exchange and trans-
ers to establish a stable base for growth
fers, to raise non-interest income. Further-
#
555
more, we expected to dominate the market
4?Z
55#
'''''
in savings for housing subscriptions and
new customers through the participation of
loans for subscribers by being re-selected
the Korean government and public agencies
as a treasury bank for the National Housing
in the Bank’s projects: a project in conjunc-
Fund, currently worth KRW 91 trillion.
tion with the Ministry of Employment and
Labor to launch a bank-book that prevents
the seizure of unemployment allowances
by unauthorized persons; a project with the
Ministry of Health and Welfare to help with
medical fees to encourage a higher birth rate
in a country with a declining population; and
a project to launch a bank-book that prevent
Z
5
to old-age pensioners. Other diverse products will be launched, including deposits,
loans, funds and pensions; these will suit
everyages from the teens to the sixties, and
we hope this will attract 200,000 customers.
44
Moreover, products customised according
to each relion will attract 100,000 customers
Nationwide Branch Network
as well.
(942 Branches)
KEY PRODUCTS
Magic 7 Installment Savings
We launched Magic 7 Installment Savings in
July 2011. This offers a higher interest rate
than average savings depending on credit card
usage, so that customers can build up large
funds and we can offer them a higher interest rate. The product is a hybrid of installment
savings and credit card services, which is the
first of its kind in Korea. Within six months of
its launch, the number of accounts reached
271,000 and the contracted amount hit KRW
2.4 trillion. These figures far exceed those of
similar products from other banks.
Woori Happiness Bank-book
In April 2011, we launched a bank-book to
prevent the seizure of basic social security
4Z#
Bank’s commitment to citizen-friendly banking,
especially by exempting the socially vulnerable
6
G
H
=!
GH
from money transfer fees and fees for using
)"%
GH
ATMs. As a result, Woori Bank received an
D""
GH
Award from the Ministry of Health and Welfare
in 2011.
*!"(
GH
*!"&
&
GH ;
GH
D"(
GH
"
G
H
Ulsan
GH
Jeonbuk
GH
D%";
GH
I;
GH
- Ministers Award as being the best citizen
friendly banking
(Ministry of Health, and Welfare)
D"&
GH
Jeonnam
GH
AWARDS
,
G
H
REVIEW OF 2011
Private
Banking
With a commitment of providing
the highest standards of asset
management in private banking,
Woori Bank aims to go beyond
customer satisfaction, and deliver
life care services that is far more
than just private banking.
Approximately
8%
Yearly average growth rate in private banking after the
2008 financial crisis
Woori Bank has targeted private banking (PB) as a core growth engine for the
medium to long term business expansion.
We are building strategies that will enable
us to register the highest-ever increase of
total assets under management in Korea,
and of consulting services for PB customers.
“Two Chairs” is Woori Bank’s exclusive
private banking brand, symbolizing our
one-on-one approach to personalized
service for high-income individuals. Woori
Bank operates 6 private banking centers
and 370 PB branches, all of which are
staffed and equipped to deliver customi ze d o n e -sto p f i n a n c i a l s e r v i c e s. We
provide asset management consulting
services and conduct seminars on real
estate for prospective local customers
through overseas branches and subsidiaries, thereby providing PB services on a
global basis. Our private banking advisory
centers, with more than twenty specialists
in real estate, tax and overseas investment, are located in every major Korean
city. Consulting ser vices on donation/
inheritance, succession at family businesses and taxation are available, along
with total services for real estate investment, market outlook, overseas investments and studying abroad. Woori Bank’s
advisory centers are now established as
Korea’s No.1 financial consulting service
providers.
The Bank also operates the PB Academy,
with the industr y’s best curriculum for
fostering specialists in comprehensive asset management. The Academy has had
126 graduates over the past four years:
117 from Woori Bank, and 9 from Kwangju
Bank and Kyongnam Bank. These specialists are now responsible for delivering
top-quality PB ser vices at the branch
level throughout the nation.
Private Banking at Woori Bank received
for two straight years the ‘Korea Luxury
Brand Award’ and the ‘Asia PB Award’.
Even in the af termath of the financial
crisis, and despite challenges such as
low interest rates and plummeting stock
prices in 2011, PB is maintaining growth
of some 8%.
PLANS FOR 2012
In 2012, we plan to offer upgraded special services and comprehensive asset
management services for PB customers.
This will include services for our individual
customers of preference, their families
and even their companies. To this end,
we will provide a comprehensive asset
management platform, spearheaded by
the Wealth Management (WM) team. We
will expand the number of PB centers to
improve our sales capabilities for High
Net Worth (HNW) customers, and expand
our consulting model, offering genuinely
customized comprehensive asset management services.
We will also ex tend customer ser vice
beyond expectations. We plan to add a
‘concierge service’ to the “Two Chairs”
service, providing life care services including medical check-ups, hotel reservations, sports and arts performance
ti c kets, g o l f l e s s o n s a n d h o m e c a re
services. Moreover, the PB Academy will
be upgraded and expanded to secure
the Bank’s competitive edge. Training
courses covering wealth management,
inter-personal skills, consulting skills and
an understanding of our HNW customers’ lifestyles will be separated, so that all
courses are customized and specialized
according to different needs.
‘PB services beyond wealth management’
is the essence of Woori Bank’s Private Banking. In 2012, we will continue to upgrade our
PB services, with a constant focus on the
customer.
AWARDS
- Korea Luxury Brand Award
(The Korea Economic Daily),
two straight Years
- Asia PB Award
(The Asia Economy Daily),
two straight Years
WOORI BANK
U-Banking
GKB,("H
Smart Banking
REVIEW OF 2011
KEY PRODUCTS
Woori Bank has maintained its dominant
Smart Banking
position in Cash Management Services
In May 2011, we increased the capabilities of ‘Woori Smart Banking’, a banking
service via smart devices, by launching
three apps: ‘One Touch for Retail Customers’, ‘One Touch for Corporate Customers’
and ‘One Touch World’. The service was
selected as Korea’s best banking app service – see below – thanks to its innovation.
Woori Bank now provides many smart
phone-based services, including not only
account inquiries, money transfers and
product subscriptions, but also services
as diverse as indicating of the number of
customers waiting for service and real estate inquiries.
(CMS); as at the end of 2011, the number
of CMS customers had reached 57,000.
We also have had the No.1 market share in
As U-banking comes more and
more into the spotlight, thanks to
advancements in IT, Woori Bank
will continue to offer state-of-the-art
U-banking services, and will make
its services even better
for customers throughout 2012.
We will be a smarter bank,
catering to the changing needs
of our customers.
online products for many years, thanks to
continuous product innovation. In 2011, our
sales of online product reached KRW 5.6
trillion, a market share of 43.6%.
Establishing a Leading Banking
Portal
We enhanced customer convenience by
upgrading the Bank’s website in March
2011. We expanded channels for open
banking services, and also the channels
through which customers can access Internet banking, regardless of PC operating
system or web browser.
46
Bolstering Competitiveness
in e-banking
KRW 5.6 trillion
43.6%
We u p g r a d e d th e C a s h M a n a g e m e nt
Ser vice(CMS) and expanded the line-
Woori ERP
We help companies handle asset management and account management at
5
prise Resource Planning (ERP) product
that combines the functions of CMS and
ERP.
up of e-banking products to attract new
corporate customers. In regards to SMEs,
we completed the set-up of our nex t-
Online product records of KRW 5.6 trillion and MS of
43.6% as of 2011-end, ranking first in market share in
generation banking systems, to offer stable
online product sales for many years
banking services. For example, Woori ERP’
Z
?{Z
5
a management service that is expected
to better increase prime SME users to our
bank.
PLANS FOR 2012
I n 2012, o u r U - b a n k i n g d i v i s i o n w i l l
strengthen its competitiveness in Internet
banking, smart banking, corporate banking
and WIN-CMS(Woori Internet Cash Management Service), to lead the smart banking market and secure high-yield customers
through digital banking.
AWARDS
- The No.1 App in Korea based on Korea
Smart App Index (Sookmyung Women’s
University’s Web Development Research
Institute and the Electronic Times)
- The Grand Prize of the 6th Korea
Internet Security Agency Award
(Korea Internet Security Agency)
- The Grand Prize in the banking sector of
the 4th Korea Internet Communication
Satisfaction Award(Korea Internet
Communication Association)
- The Top Winner’s Prize for open banking
of the 11th Korea e-banking Service
Award(The Korea Economic Daily)
SME
Banking
Despite difﬁculties at home and
abroad, Woori Bank achieved an
outstanding performance in the SME
banking sector. We did this by using
a workforce that specializes in SME
banking, and by attracting higher
numbers of SME customers with an
SME-friendly product line-up. We
will always offer new services and
products to our SMEs, in the belief
that they are the backbone of the
Korean economy.
REVIEW OF 2011
PLANS FOR 2012
Woori Bank’s Small & Medium Corporate
The Small & Medium Corporate Banking
Banking Business Unit expands Woori
Business Unit will build on its existing mar-
Bank’s portfolio of SME loans by creating an
kets, and explore new markets by focusing
?{^
5Z5
^Z

?{5
Z
55
?-
SME customers’ diverse characteristics and
tomer market, and by conducting special-
needs.
ized customizable marketing. We also plan
to launch a loan product particularly aimed
]
Z
5
at SMEs in industrial complexes, and also
Small & Medium Corporate Banking Busi-
a customized loan product that is to serve
ness Unit increased operating revenue by
franchise entrepreneurs.
KRW 58.1 billion, to KRW 1,808.2 billion
We will strive to strengthen relationships with
in 2011 compared to KRW 1,750.1 billion
existing customers, and increase the volume
in 2010, thanks to an increase in customer
of banking transactions by increasing the
numbers of 49,000, and an increase in high-
loans for settlement, facilitating e-banking
yield customers rated BBB- and above of
services and upgrading preferential services
16,000 year on year.
for high-yield customers. We will continue
special management of potential NPLs, and
We enjoyed a successful year in liquidity
the improvement of our asset portfolios.
management, with an increase of KRW 5.5
Lastly, we will expand corporate consulting
trillion in the average balance of total depos-
by offering new consulting services like green
its. In our loan segment, three loan products
consulting, targeting companies involved in
recorded sales volume of KRW 1,217.2 bil-
environmental oriented green industries.
lion, with total SME loans reaching approximately KRW 58 trillion by the end of 2011.
Of particular note, the ‘Woori Big Chance
KEY PRODUCTS
Loan’, targeting high-yield customers with
Woori Big Chance Loan
ratings of BBB- and above, recorded a sales
‘Woori Big Chance Loan’, launched in 2011,
volume of approximately KRW 1 trillion.
Z#5 5#
est rate, and targets corporate clients with
We also offered 125 cases of consulting
good credit ratings. There are also additional
services, and their upgraded quality truly
benefits in terms of interest rates and vari-
4
^
ous discounted fees for our SME customers’
customized consulting services for SME
miscellaneous transactions.
#
Korean banking sector since 2001.
49,000
16,000
customers
customers
Increases of 49,000 SME customers and increases of
16,000 high-yield customers of BBB- and above, year
on year
We now seek to prioritize customer satisfaction, driven by our specialist workforce.
Woori Bank’s outstanding achievements in
the SME banking market have been attributable to the excellence of our SME Relationship Managers (RM); we have specialized
849 SME RMs, and to-be specialized 662
SME RMs in training.
AWARDS
- Silver Tower Order of Industrial Service
Merit of the 16th Best SME Banking Award
(Small and Medium Business
Administration)
WOORI BANK
REVIEW OF 2011
PLANS FOR 2012
The Corporate Banking Division has a vi-
In 2012, we plan to attract high-yield as-
sion of becoming the No.1 banker in Korean
sets and customers, maximize synergy by
industry, and becoming a leading bank in
offering multiple Woori Group products to
Asia over the medium to long-term. To this
high-yield partner companies, and facilitate
Woori Bank continues to support
its corporate clients, encouraging
partnership with large enterprises
and SMEs on providing
differentiated loan products, and
developing alongside Corporate
customers. We will continue to do
our best to make sure that we fulfill
our active role as a true partner for
Corporates and others.
end, the division has expanded its one-stop
the transactions of corporate executives.
services in cooperation with sister compa-
We will implement customer-oriented site
nies. Relationships with the largest corpo-
management, helped by our outstanding
rate customers are strengthened through
business capabilities and our strong rela-
the Woori Diamond Club, a meeting of the
tionships within Corporate Banking.
29.3
Corporate
Banking
48
KRW
trillion
KRW 1 trillion
Total assets and operating income in 2011 in corporate
banking
15
Main creditor bank for 15 of Korea’s 37 largest corporate
groups, including world-leading companies such as Samsung, LG and POSCO
heads of the country’s largest multinationals. New product development continued
apace, with the launch of customized
KEY PRODUCTS
products that cater to customer needs and
B2B Loan / B2B Plus Loan
changing markets.
These are corporate loan products that can
be provided in installment loans with ac-
According to information compiled by the
counts receivable being used as collateral
FSS in 2011, Woori Bank was designated
without the need for additional collateral or
as the main creditor bank for 15 of Korea’s
the guarantee of a partner company. This is
37 largest corporate groups, more than any
designed to facilitate companies’ e-settle-
other bank, including world-leading compa-
ments.
nies such as Samsung, LG and POSCO.
lion, net income of KRW 607.5 billion and
Partnership Loan for Large Enterprises / Partnership Guarantee Loan
for Large Enterprises / Settlement
Fund Loan for Partner Companies
export/import volume of USD 218.8 billion.
These are corporate loan products offered
Quantitative indicators were also strong.
Total assets amounted to KRW 29.3 trillion,
along with operating revenue of KRW 1 tril-
at a low interest rate under a business
The net interest margin was 2.09%. More-
agreement between the Bank and a large
over, we contributed to the national econo-
company, to encourage cooperation be-
my through support for partner SMEs, while
tween large enterprises and SMEs.
also facilitating cooperation between large
enterprises and SMEs, and strengthen-
Woori Corporate Factoring
ing the Bank’s roles in Corporate Banking.
This is a corporate loan product whereby
Strong performance was achieved in the
the Bank purchases sellers’ accounts re-
sales of the Partnership Loan for Large En-
ceivable on a no recourse basis. This is in
terprises, the Partnership Guarantee Loan
response to changing market requirements
for Large Enterprises, and the Settlement
following the mandatory adoption of the
Fund Loan for Partner Companies.
IFRS, and this creates a new source of rela
55#^^
#Z4
Credit
Card
Woori Bank has a comprehensive
credit card business, thus broadening
the customer base and increasing
profitability. We will continue
to offer differentiated customer
management and marketing.
1)
REVIEW OF 2011
PLANS FOR 2012
Since Woori Card was merged into Woori
In 2012, we will focus on increasing the num-
Bank to form the Credit Card Division in
ber of high-yield customers, expanding our
2007, it has succeeded in building asset
participation in the public bid market and es-
soundness thanks to conservative and
tablishing the infrastructure for mobile cards.
stable business operations, especially in the
New systems will be out in place to offer a
aftermath of the global financial crisis and
smart business environment within branches.
the subsequent market slowdown.
We will also focus on enhancing our competi
Z
In 2011, the Bank focused on maintaining
Z5-
asset soundness and improving business
agement, and strengthening the analytical skills
operations, while actively taking part in the
for membership data.
public bid market1) and seeking to attract
more customers. We rationalized the card
We will do our best to raise membership and
review standard and optimized the limits. We
sales volumes through strong customer man-
also broadened the customer base by ex-
agement and marketing. We will also strive to
panding the market for check cards. Syner-
increase high-yield assets through the reten-
gies were created with increases in deposits
tion of high-yield customers, the optimization
and card sales through ‘MAGIC 7 Installment
5Z
-
The market for card settlement systems or the
set-up of settlement infrastructure for public projects
Savings’, a product that offers additional in-
5Z#
5
commissioned or conducted by public agencies.
terest for increases in card usage.
functions, the exploration of customizeable
markets, the enhancement of our brand image,
We launched the ‘Woori Children-Love
and the utilization of a new card system.
Card’ as the operator of the government’s
nursery subsidy program, and also launched
the ‘Woori V Check Green Card’ providing
KEY PRODUCTS
5-
Discount Product ‘New Woori V Card’
sumption. Another new product was ‘Woori
This is a new version of the Woori V Card
V Card Oil-100’, which offered oil price dis-
launched in May 2007 as a standard dis-
counts.
count card, encompassing benefits at gas
stations, shopping malls, restaurants, movie
KRW 39.4 trillion,
10%
UP
Woori Bank’s 2011 annual sales reached KRW 39.4
trillion and the year-on-year growth rate
11.7 million customers,
UP
6.5%
No. of Woori Bank’s credit card (including check card)
customers and the year-on-year growth rate
Services to enable automatic transfers for
Z
5
4
telecommunication and transportation fees
led to higher customer retention rates. We
Point Product ‘Woori V Point Card’
also classified the criteria for our VIP pro-
0.2% of the total spent on this card is accu-
gram (V Club) and provided services accord-
mulated, which is accumulated additionally
ingly, focusing on attracting and retaining
to the amount used for Internet shopping
high-yield customers. We also focused on
and in gas stations depending on custom-
active responses to market changes and the
ers’ taste.
need for customer convenience by providing
credit card inquiry and transaction services
through smart phones.
Government Nursery Subsidy Card
‘Woori Children-Love Card’
As of December 31st, 2011, Woori Card’s
This card provides discounts for nursery
market share was sixth in the country. The
fees, shopping, transportation, culture and
annual sales volume was KRW 39.4 trillion,
educational content, in conjunction with the
up 10.0% year-on-year, while the number
government’s nursery subsidies.
of credit cardholders (including check cardholders) increased 6.5%, to 11.7 million.
WOORI BANK
Investment
Banking
Woori Bank succeeded in Investment
Banking (IB) by selectively initiating
business while considering overall
profitability, raising asset soundness
and improving the profitability
of assets currently held. We will
continuously expand IB services for
corporate clients, to become
Korea’s leading operator of the
Commercial & Investment Banking
(CIB) model.
50
13.3
KRW
REVIEW OF 2011
5
5
54
#55
The credit crunch, stemming from the on-
therefore be more disposal of assets under
555#
corporate restructuring to liquidate non-
$'++
Z
54
core businesses, increased corporate M&A
However we have sold and written off non-
55
#-
performing assets in construction and ship-
nesses to diversify our corporate business
building, and have instead focused on high
operations for medium to long-term growth.
end customers for providing term loans and
trillion
Total assets as of 2011-end held by the IB head office
of Woori Bank
{Q4
A positive sign is that there will be more
demand in social overhead capital(SOC) as
We also built asset soundness by disposing
the government makes increasing attempts
of low-yield assets and assets at risk of de-
to build social infrastructure facilities. None-
54!
Z
Z5
theless, the outlook for real estate devel-
by increasing the volume of Won denomi-
opment projects including publicly-placed
nated loans, especially for commercially vi-
large real estate PF is yet to recover.
able projects.
In 2012, Woori Bank will expand IB-related
The IB Division holds assets worth KRW
financing for corporate clients. We will
13.3 trillion as of end-2011(including off-
continue financial arrangements for tra-
balance sheet items), consisting of loans of
ditional SOC projects such as BTO and
KRW 6.1 trillion, securities of KRW 2.0 tril-
BTL by marketing on corporate clients and
lion and off-balance sheet items of KRW 4.9
strengthening our networks. We will also
trillion. Recently, invested high yield loans
increase fee income by arranging and par-
and securities have been recovered which
Z{Q4
enabled us to receive sizeable amount of
Z5
4
We also plan to secure new income sources
in the medium to long-term by tapping into
power generation and renewable energy
PLANS FOR 2012
markets. The IB Division will position itself
The domestic IB market in 2012 is expected
as Korea’s leading investment bank through
to suffer from the ongoing European fi-
the strategic alignment of the two busi-
nancial crisis, slowing Chinese economic
nesses, corporate banking and investment
growth, and export reductions, so on the
banking.
whole, improvement in the economic and
Trading &
Derivatives
Our bank became the first Korean
bank to issue subordinated bonds in
foreign currencies and demonstrated
investor’s confidence despite
European crisis and uncertain
market conditions. We will continue
to pursue sustainable growth in
trading & derivatives by broadening
the customer base while diversifying
our product range.
REVIEW OF 2011
PLANS FOR 2012
Woori Bank maintains a dominant market
share in trading & derivatives in all fields
related to the financial markets, such as
foreign exchange dealing, derivatives, invest
^
4
We are particularly competitive in derivatives
transactions like forwards, swaps and options based on diverse underlying assets (interest rates, foreign exchange, equities and
commodities) and maintain a solid presence
as a market maker.
The business goal of the Financial Market
Business Unit is to achieve sustainable growth
through risk management, and to do so despite the economic uncertainties at home and
abroad. To achieve this goal, we will implement
the following strategies:
The Financial Market Business Unit increased financing through foreign currency
derivatives such as Samurai Bond to take
preemptive measures against spillover effect from the Euro zone crisis. We became
>
bonds in foreign currencies and gain inves"
Z5ness and credit ratings. We responded actively to the drop of U.S.A. credit ratings by
securing liquidity in foreign currencies. We
were thus able to meet the FSS’s prescribed
5|5^
ratio for foreign currencies. We also built on
our dominance in the derivatives market by
strengthening derivatives trading based on
predictions of market variables in policies,
and supply and demand forecasts. Woori
5Z
55
Zfolio of foreign currency derivatives, including the Mexican Peso, South African Rand,
Polish Zloty, Russian Ruble and Chinese
Yuan. One important breakthrough was the
development of products offering 24-hour
hedging of commodity price risk, now available through the Bank’s Night Desk for commodity derivatives. We also offer services
to cover overnight exchange rate risks by
opening our London Desk when Korean foreign exchange desk closes.
Managing Liquidity
We will optimize liquidity management by
controlling our trading positions and maintaining the loan-to-deposit ratio below 100% of
the average monthly balance. We will reduce
the concentration of USD in our portfolio
by diversifying funding into currencies such
as Thai Baht, Malaysian Ringgit and Swiss
Francs. Moreover, we plan to take preemptive
Z5
and adapt to regulatory changes in various
ways: reviewing fund variation factors and
setting responses on a daily, weekly and
monthly basis, monitoring regulatory changes
such as amendments to the Regulation on
the Supervision of Banking Business, managing the liquidity ratio and continuously seeking
to reduce any fund imbalances.
Expanding the Base of High-yield
Customers
We plan to broaden our base of high-yield
customers by attracting new derivatives customers, increasing the transaction volume
with institutional investors and also enhancing
transactions with existing high-yield customers. We will more fully utilize internal sales
channels such as subsidiaries, overseas
branches and other business units that may
lead to cross-sales marketing while minimize
expected customer defections due to merchant banking licence expiration.
Strengthening Risk Management
We will reduce operational risks by continuously improving our IT systems, and by reducing counterparty credit and payment risks
through the liquidation of over-the-counter
derivatives. Moreover, all our product structures will take risk into account in developing
new product, and in minimizing market risk
through preemptive risk management.
WOORI BANK
Retirement
Pensions
Woori Bank is building a strong
position in the retirement pensions
market through a well-equipped
marketing unit, quality products
and specialist operations. We are
proud to offer customers the best
in retirement pensions, which
increasingly serve as the cornerstone
for post-retirement life.
REVIEW OF 2011
PLANS FOR 2012
Retirement pension products are sold us-
The retirement pensions market used to be
ing a structure whereby subscribers can
quite small, due to a lack of awareness among
accumulate retirement annuities separately
both employers and employees. However,
from their employer. The same sales mech-
since the adoption of the retirement pension
anisms are used by all retirement pension
system in December 2005, the market has
companies.
doubled every year. Woori Bank is striving to
5
Z5
The Bank launched the Happy Life Bank-
term by taking an early lead in the retirement
book for retirement pension subscribers, a
pensions market.
Z>
4
Zuct enables subscribers to conveniently
We believe that, because retirement pensions
access their retirement annuities as they
are the foundation for post-retirement life, it is
accumulate their pension, which is the key
critical for us to staff our team with employees
concern of most subscribers, and they
who are true experts in this area. Our goal
can check their bank-book to see how the
is to become No.1 in the retirement pension
funds are managed. The Bank has also es-
market by building our strengths in corporate
tablished the Retirement Pension Research
banking, creating a well-organized marketing
Institute, in which the Bank coordinates its
unit, diversifying the product range and mak-
wide-ranging advisory services on pension
ing sure all funds are professionally managed.
asset management, and offers related consulting services. In addition, in compliance
52
with the government’s revision of the Work-
KEY PRODUCTS
ers’ Retirement Wage Guarantee Act, we
systems. We also offer good customer ser-
Customer-designated Maturity Time
Deposit, and Woori Retirement
Pension Loan
vice, and make sure that all product sales
Woori Bank has a portfolio of 29 perfor-
are appropriate, by providing updates and
mance-based dividend products from 13
notifications to subscribers through the
management companies, including time
Bank’s Happy Call System.
deposits with various maturity structures, a
upgraded our pension asset management
first-of-a-kind inflation-indexed bond, and
KRW
4.3
trillion
Amount of pension deposits as of 2011-end
17,754 UP
44.3%
17,754 companies subscribed to retirement pension as of
2011-end, growth rate of companies subscribed to retirement pension is 44.3% year-on-year
In 2011, Woori Bank’s pension deposits
an equity-indexed fund. Of particular note,
climbed KRW 1.86 trillion, to KRW 4.33 tril-
we developed and manage a ‘Customer-
lion. The number of joined companies en-
designated Maturity Time Deposit’ which
joyed impressive annual growth of 44.3%,
enables the customer to designate their
rising to 17,754. Individual subscribers were
own maturity, depending on their financial
attracted in even greater numbers, increas-
schedule, and the ‘Woori Retirement Pen-
ing 57.3% or 243,861, to reach 669,487 at
sion Loan’ targeting corporate staff sub-
year-end 2011.
scribing to a retirement pension. We are
developing new pension products for the
‘baby boomer’ generation who is now nearing retirement.
Product
Development
Woori Bank’s Product Development
Division consists of not only product
development specialists but also
those specialized in research, data
analysis, and marketing thereby
strengthening the Bank’s competency
in product R&D. Through surveys
aligned with outside institutions, the
Bank enables the in-house optimal
product development for customers
independently without outsourcing,
based on the customers specific
database and consideration of the
market condition.
The Division was formed to maximize ef-
REVIEW OF 2011
Z
Woori Bank’s Product Development Divi-
development teams that used to be scattered
sion launched on July 7, 2011, and since
in each business division under the Bank.
then introduced 18 retail products, 4 hous-
The division was organized to encourage a
ing products, 1 corporate product and 6
competitive product development under one
card products, totaling 28 for a short term
4"V
^^^|
of six months. Of particular note, the Time
and creative unit in the Korean banking his-
Deposit Marking Korea’s 66th Year of Inde-
tory, playing a leading role in the banking sec-
pendence from Japan achieved the volume
tor.
of KRW 644.6 billion as of December-end,
while WE Dream Loan, a product for SMEs
Moreover, departments on retail products,
amounted to KRW 701.1 billion. The Bank
housing products, corporate products, SME
also launched the iTouch Housing Lease-
products, Forex products, card products,
hold Loan to lead the Internet and smart
Internet, smart banking products were inte-
banking markets.
grated into the Division on July 7, 2011. The
fund product operation was added in December, which is an asset management product.
PLANS FOR 2012
Accordingly, we strive to develop the best-in-
Woori Bank’s Product Development Di-
class products in deposits, asset manage-
vision have its 2012 slogan to ‘develop
ment, loans, Forex and financial services
the market-leading innovative products,’
catering to various needs of PB customers,
promptly, timely and creatively to aim for the
retail customers, large enterprise clients, SME
new high-yield customers and to provide
clients, institutional clients and Internet users.
convenient financial solutions to our customers.
Of particular note, products in the Division
amounted to 150 as of December-end, 2011,
The Division will play a leading role in ex-
including 39 corporate products (27 for loans
ploring the new market by not only devel-
and 12 for deposits), 8 housing product, 52
oping the Bank’s new exclusive products
retail products (36 for deposits and 16 for
but also will expand its boundaries to
loans), and 46 card products. Most of the
derivatives-linked structured deposit & loan
products are aligned with mobile devices and
products, hybrid products of deposit & loan
the Internet. Fund products such as asset
and card products, other products aligned
management products amount to 140 in total.
with new banking services, and ELD-based
pension products where index-linked derivative transactions are added.
150
150 products are available as of 2011-end
sustaining
confidence
how can having
the best people
boost
our customers’
happiness?
54
:"!!&&!%!!
%!&(!'
new business opportu!!%(%!&#
$!%!!'B%'
&!#
EMPLOYEE _Kim, Byung Jin * JOB TITLE _Assistant Manager, Public Relations Dept * AGE_32
WOORI BANK
Sustainability
Review
56
57 Creating Financial Opportunities (Microcredit)
60 Inspiring Our People
62 Sharing Heart
30 WOORI BANK
SUSTAINING CONFIDENCE
Woori Bank offers socially responsible banking services by supporting those who might be
struggling financially, the socially vulnerable and people who might not have access to
banking services. We also offer microcredit services that have helped a whole new stratum of
entrepreneurs who did not previously have access to funding.
!"{^
>
^5
{
5Z
#
55
also helps companies in starting up a business or managing their funds. Woori Bank led the founding of the Woori Miso
`5`#5
!`5<Z
>!+'55
years. The foundation has established channels in 8 regions nationwide, to support small-scale entrepreneurs in starting up
4
ZZ
`ZZ
#5#
5
55
5^
5
5
4
To ensure fairness in its operations, the Foundation’s outside executive directors consist of a priest from the Council of
Catholic Social Welfare, a professor at the Sociology and Welfare Department of Soongsil University, and a director of a
social welfare center. The Foundation’s 8 branches have 27 staff in total, to ensure the best support for those in need.
Creating Financial
Opportunities
(Microcredit)
WOORI BANK
REVIEW OF 2011
In 2011, our goal was to serve as a role model in the microcredit sector, and to increase the number of recipients of
microcredit. As a result of reaching out to those in need and developing products which cater to them, we were proud to
process 925 cases worth KRW 17.4 billion in 2011, bringing the overall totals to 1,413 cases worth KRW 22.2 billion.
In particular, we launched products tailored for single-parent families, along with customized products for small-scale
entrepreneurs involved in the delivery business. We visit the people who need our services, to make sure they get the most
useful product, in the most effective way. In the delivery business, our new microcredit product aims to resolve a shortage
of delivery vehicles and other logistical challenges while giving support through collaboration with the Ministry of Land,
Transport and Maritime Affairs, and thereby guarantee a stable business environment for small-scale delivery entrepreneurs.
QZ
#
Z
!{
5
4
5
5
ZZ5
Z5
Z
#
55
Z
4
Z
from Woori Bank and Woori Financial, as well as specialists including lawyers, tax attorneys, accountants and management
consultants, working alongside ordinary citizens, and college students. Their diverse professional knowledge and consulting
services on business start-up, management, marketing, law, taxation and accounting for recipients of our microcredit
5
55
5^
4
V$'++#
5
^#^
^#
Z
services.
58
925 cases,
KRW17.4 billion
The number of microcredit services extended as of
2011-end amounting to 925 cases, and the amount
provided as microcredit is 17.4 billion
PLANS FOR 2012
The goal for 2012 is to expand the support that Woori Bank may give to those in need through microcredit. So that
microcredit services can be available on-site, we will support merchants in traditional markets through an agreement with
a traditional market merchant association, and expand the scope of recipients to include entrepreneurs involved in making
keys and traditional rice cakes. We are also opening two more branches to increase access for customers.
We will examine and share case studies of business success among our loan recipients, so that other recipients gain
#
5
Z
4
KEY PRODUCTS
Business Start-up Loan
Working Capital Loan
A loan for those preparing to
A loan for individual entrepreneurs
start a new business.
already doing business
We will increase the level of funding
at an established site.
available for members of society who
Single Parent and Multi-cultural
Family Support Fund
sometimes struggle to gain access to
5
^Z
multi-cultural families.
WOORI BANK
As a company that cherishes its people, Woori Bank does its utmost to create a great workplace,
so that staff can work happily, and customers benefit from that happiness. In 2011, we strived to
achieve labor-management harmony, and increased welfare benefits for all. We will continue to
focus on our people in 2012.
Inspiring
Our People
60
REVIEW OF 2011
IMPROVING EMPLOYEE WELFARE BENEFITS
In 2011, Woori Bank got very positive feedback from staffs by launching and improving diverse programs for staff welfare
54
Z#
55#
A Family Weekend Journey : This program, launched in July 2011, mainly focuses on the families of our
staff. The purpose of these outdoor programs is to encourage love within families, and to recharge body and
mind. Held on the fourth Saturday every month, participants had wetland experience in July, went grape picking
in August, and chestnut picking in September. The program was amongst the Bank’s top ten news highlights for
2011 as a result of the quality of feedback it got.
Encouraging a Happy Monday : The ‘Happy Monday’ program aims to create a corporate culture where
all staff is eager for Mondays to come. Every Monday, a lucky draw is made and the selected branches will get
plenty of snacks delivered to them. There are also other elements of ‘Happy Monday’ that put smiles on the
faces of staff members, and it seems to have succeeded; the program was a huge success, and over 30,000
staff participated.
Heart-to-heart Dialogue with New Staff : ‘Heart-to-heart dialogue with new staff’ is a program to take
notes of complaints and feedback from new staff. Because the program is only open to new hires, this enables
us to listen closely to what they say. and their words are heard at a more honest and deeper level – and, because
Woori Bank has branches nationwide, the program visits new staff at their site. These efforts have therefore
gained a huge positive feedback.
Increasing the Number of Medical Check-up Centers : The number of medical centers available for
the staff annual check-up increased from 41 to 46. The number of items available for the medical check-up also
increased, which greatly enhanced the overall level of satisfaction.
Free Rental of a Wedding Hall : The wedding hall at HQ is rented out for free to staff at weekends. It offers
a large hall and luxurious decoration, and has received great feedback from staff – especially from brides! The
luxurious bride’s room and pyebaek room(post-wedding ceremony ritual) would make any event very special,
even compared to the most luxurious hotel wedding halls. The free rental saves hugely on wedding costs for
staff, and imbues a sense of community at the Bank.
HARMONIOUS LABOR-MANAGEMENT
Harmonious labor-management is important in making a good workplace. We forged a strong labor-management consensus
by applying the amended Labor-Management Act, such as introducing a time-off system for the executives of the labor
union, and a preferential scheme for full-time unionists.
!
5
^Z
^Z
#
4Q
Z
>
#
555
5
#
4+
5
#
Z5
4
Moreover, we have innovatively enhanced labor management issues to a long term base and increased our
competiveness. An example is the March 2011, MOU implemating agreement of labor management regarding
enhanced treatment of employees. This was measured in a quarterly base, but recently was amended to a yearly
base.
PLANS FOR 2012
In 2012, Woori Bank will continue the open dialogue and promote harmony between labor and management, to
create the best possible working environment. Professional seminars on labor-management relations will be held
55ZZ
Z
Z
5^
Z
4
Lastly, we will form a joint labor-management task force team to improve HR and training systems.
WOORI BANK
Sharing Heart
62
Woori Bank is a warm-hearted bank that connects with the society furthering its scope of support.
The Bank makes social contributions across different sectors – social welfare, environmental
protection, education, culture, arts and expand its support to rural & fishing villages. We focus on
more than one-time events: we hope to serve as a bright light for those in need in every corner of
the society through consistent acts of love and kindness, carried out by staff and their families.
Woori Bank has a 113-year history working alongside the nation both in times of joy and sadness. Our social contribution
activities are aligned with the Bank’s goal, to implement ‘Shared Hope and Growing Love’.
Woori Bank’s staff in 1,000 branches around the nation engages in volunteering activities that help the needy. For example,
#

Z
55
"
Z
5Z555
4!
5ZZ
5
Z^Z5
>

<_
5
"
Fund.
REVIEW OF 2011
In 2011, Woori Bank’s social contribution programs spread our love and helped ease burdens across Korea. In 2012, Woori
Bank will be the No.1 bank in the most important category - sharing its heart and taking care of those in need.
Woori Happiness Society Program : Our ‘Woori Happiness Society Program’ sponsors the socially
vulnerable in the community. This volunteer program is closely aligned with the community on a regular basis,
forging sisterhood relationships with social welfare organizations and local childcare centers near our HQ and
branches nationwide. In August 2011, we invited 500 children from small schools for the needy to a summer
camp where we held an event with a famous Korean comedian and presented scholarships. In November 2011,
we hosted a kimchi-preparing event and gave gifts to multi-cultural families, the elderly living alone, and families
that of children living with their grandparents.
Volunteering for the Disabled : Woori Bank holds annual events annually where the disabled and the ablebodied can meet to play sports and have fun together. On November 7th, 2011, Woori Bank’s volunteer group,
including CEO, took part in a marathon alongside with the visually impaired; staff members formed teams with
disabled participants and their success as a team broke down walls and forged social integration. Building on
these successes, we will continue to hold the 4th Sports Festival and Marathon for the Disabled in 2012.
Volunteering with Rural & Fishing Villages, and Protecting Cultural Properties : Our ‘One
Company, One Village’ sponsorship program encourages active exchange and shared growth between urban
and rural regions. The program marked its 8th anniversary in April 2012 by supporting a village in Korea’s
Gyeonggi Province. We offer supports such as volunteering during harvests, markets for direct sales of
agricultural products, rural village experiences for staff and customers, village refurbishment and income raising
in rural villages.
We also forged the ‘One Company’ One Fishing Village’ program with Mongsan-ri in South Chungcheong
Province, and the ‘One Company’ One Mountain’ program with Namsan Mountain in Seoul for environmental
preservation and natural protection.
As part of our heritage, we have signed a contract to protect Hongyuneung, under our ‘One Company’ One
Cultural Property’ program. Hongyuneung is a UNESCO-designated World Cultural Heritage site, and one of
Korea’s most important cultural properties. It is the tomb of Korea’s Emperor Gojong, and also of King Sunjong,
who paved the way for Daehan Cheonil Bank, the forerunner of Woori Bank, to be established, sponsoring it with
imperial funds so that a national bank could take root. We regularly conduct activities to protect Hongyuneung,
and include a tribute ceremony as part of new staff training, to enhance their appreciation of company history.
Woori Art Contest : The Woori Art Contest is Korea’s top art contest for artistically-inclined children. It
celebrated its 17th anniversary in 2011, when a total of 45,000 elementary, middle and high school students
and kindergartners took part; we also held an art event for children from Southeast Asia, who sometimes lacks
opportunities for such events in Korea.
We are also active in promoting educational and social programs such as offerings economics classes to
5
5
_>
4
5
"55
5Z
Woori Bank Museum and opening a new bank-book, so that the children can enjoy a hands-on money-based
experience.
Multicultural Festivals for Foreigners : We took part in and supported various events for foreigners to
raise the Bank’s image as a global leading bank: ‘2011 Korea Grand Sale’, ‘Easter Festival for Foreign Workers’,
‘2011 Information Fair’, ‘Mongolia Naadam Festival’ and ‘Mr. & Ms. Filipino Culture Thanksgiving Festival.’ As
such, we strived to do the best in social responsibilities as a bank specialized in Forex.
Increasing the Culture of Donations : Our staff is the driving force for increasing Woori Bank’s culture of
donation. They voluntarily give part of their monthly wages to the Woori Love Fund and the Woori Children Love
Fund. We also offer ‘Woori Love e-Sharing’, whereby customers can donate by transferring money via Internet
banking, encouraging a culture of small-scale donations. We operate the ‘Woori Love e-Sharing’, a point-based
donation program that donates some of the points accumulated when using credit cards. We also support
Myeonghwiwon, a social welfare corporation.
WOORI BANK
Financial
Review
64
65 Management’s Discussion and Analysis
69 Independent Auditor’s Report
158 Organization
160 Global Networks
FINANCIAL REVIEW
Management’s Discussion And Analysis
FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010
This Management Discussion and Analysis (MD&A) and accompanying financial statements comply with Korean financial reporting standards
(“K-IFRS”, consolidated financial statements). The term ‘the Bank’, as used in this MD&A, refers to Woori Bank, unless otherwise indicated.
Summary of Management Performance
2011 was a year of continued challenges, with uncertainties from the European financial crisis, a downgrade in USA credit rating, and concerns about
inflation at home. Despite these setbacks, the Bank’s 2011 operating income was KRW 2,683 billion, up 79.1% year-on-year, with net income of KRW
2,069 billion, up 63.9%. This was attributable to continuous efforts to improve profitability, income diversification, including increased fee and dividend
income, improving asset soundness, and increases in interest income.
CHANGE
2011
2010
AMOUNT
%
Operating income
2,683
1,498
1,185
79.1
Net interest income
13.9
(Unit: KRW Billion)
5,726
5,027
699
Net fee income
508
494
14
2.8
Dividend income
123
119
4
3.4
Gain (loss) on financial assets at FVTPL
107
15
92
613.3
19.6
Gain (loss) on AFS
281
235
46
1,017
979
38
3.9
Impairment on credit loss
(1,817)
(2,496)
679
(27.2)
SG&A Expense
(2,553)
(2,264)
(289)
12.8
(428)
(376)
(52)
13.8
financial assets
Other operating income (expense)
Gain (loss) on investment assets of related companies
Income before income tax
Income tax expense
Net income
(24)
39
(63)
(161.5)
2,659
1,537
1,122
73.0
590
275
315
114.5
2,069
1,262
807
63.9
Profitability
Driven by higher interest income, the Return on Assets for 2011 was 0.59%. The Bank watches this indicator very closely, and was pleased with its
upward momentum. The Net Interest Margin also rose, to 2.46%; it has been rising since 2009. The SG&A expense ratio stood at 39.7%, continuing
to trend satisfactorily downwards.
(Unit:%)
Return on Assets
2011
2010
CHANGE (%p)
0.59
0.49
0.10
(0.05)
Return on Equity
7.93
7.98
Net Interest Margin
2.46
2.22
0.24
SG&A Expense Ratio
39.7
40.8
(1.07)
WOORI BANK
Interest Income and Expense
The Bank’s 2011 net interest income was KRW 5,726 billion, up KRW 699 billion or 13.9% over the previous year. This was due to interest income rising
by KRW 678 billion, with interest on loans increasing by KRW 561 billion, and a drop in interest expenses of KRW 20 billion, and interest on debentures
issued decreasing by KRW 244 billion.
CHANGE
(Unit: KRW Billion)
Interest income
Interest on deposits
2011
2010
AMOUNT
%
11,659
10,981
678
6.2
47
12
35
291.7
664
611
53
8.7
10,247
9,686
561
5.8
701
672
29
4.3
Interest expense
5,934
5,954
(20)
(0.3)
Interest on depository liabilities
4,477
4,251
226
5.3
344
340
4
1.2
1,015
1,259
(244)
(19.4)
Interest on financial assets
Interest on loans
Other interest income
Interest on borrowings
Interest on debentures issued
Other interest expense
66
Net interest income
98
104
(6)
(5.8)
5,726
5,027
699
13.9
The Bank’s gain on financial assets at FVTPL in 2011 was KRW 107 billion, up KRW 92 billion over the previous year. The loss on the valuation and
disposal of securities was KRW 55 billion, while gains on derivatives and other financial assets were KRW 127 billion and KRW 35 billion, respectively.
CHANGE
(Unit: KRW Billion)
2011
2010
AMOUNT
%
Gain (loss) on securities
(55)
129
(184)
(142.6)
Gain (loss) on derivatives
127
(84)
211
(251.2)
35
(30)
65
(216.7)
107
15
92
613.3
Gain (loss) on other financial products
Total
Gain (loss) on AFS financial assets
Gains on the disposal of securities outran impairment losses, so the Bank’s gains on AFS financial assets closed at KRW 1,017 billion, up KRW 38 billion
year-on-year.
CHANGE
2011
2010
AMOUNT
%
Gain (loss) on disposal of securities
1,200
980
220
22.4
Reversal of impairment loss on securities (impairment loss)
(183)
(2)
(181)
9,050.0
Total
1,017
979
38
3.9
(Unit: KRW Billion)
FINANCIAL REVIEW
Impairment losses on loans and other credit
The Bank has strived to spearhead a culture which raises accountability for NPLs, and prevents defaults, to improve overall asset soundness. In 2011,
impairment losses totaled KRW 1,817 billion, down significantly, by 27.2% year-on-year. This is a result of the increase in impairment losses on payment
guarantees of KRW 100 billion being considerably more than balanced by a drop in impairment losses on loans of KRW 779 billion.
CHANGE
(Unit: KRW Billion)
Impairment losses on loans
Impairment losses on payment guarantees and allowances
for undrawn commitments
Total
2011
2010
AMOUNT
%
1,711
2,490
(779)
(31.3)
106
6
100
1,666.7
1,817
2,496
(679)
(27.2)
SG&A Expenses
The Bank’s SG&A expenses in 2011 went up 12.8% due to higher expenses across the board, with wages in particular up 21.1%. Although the absolute
amount increased, however, the SG&A expense ratio fell, thanks to the Bank’s cost saving efforts.
CHANGE
2011
2010
AMOUNT
%
Salaries
1,190
983
207
21.1
Short-term salaries
1,044
870
174
20.0
Retirement benefits and termination benefits
146
113
33
29.2
Depreciation
127
126
1
0.8
1,236
1,155
81
7.0
260
240
20
8.3
61
62
(1)
(1.6)
Rent
187
179
8
4.5
Computer & software
245
246
(1)
(0.4)
(Unit: KRW Billion)
SG&A expenses
Welfare benefits
Compensation of actual expenses
Other SG&A expenses
Total
483
428
55
12.9
2,553
2,264
289
12.8
Balance Sheet
Total assets at year end were 6.1% higher at KRW 242,472 billion, up KRW 13,917 billion, making Woori Bank the second-largest domestic bank as
measured by total assets. Loans and bonds receivable increased by KRW 14,278 billion year-on-year, and most asset items increased over the year,
although financial assets dropped by KRW 2,245 billion.
Total liabilities amounted to KRW 224,346 billion, up 6.3%, or KRW 13,278 billion. Depository liabilities and borrowings went up by KRW 6,778 billion
and KRW 192 billion respectively, but bonds issued dropped by KRW 381 billion.
Shareholders’ equity at year-end was KRW 18,126 billion, up 3.7% year-on-year.
WOORI BANK
CHANGE
(Unit: KRW Billion)
Assets
Cash and cash equivalents
Financial assets
Loans and bonds receivable
Investment assets of related companies
Tangible and other assets
2011
2010
AMOUNT
%
242,472
228,555
13,917
6.1
5,389
3,886
1,503
38.7
41,389
43,634
(2,245)
(5.1)
191,909
177,631
14,278
8.0
376
306
70
22.9
3,409
3,098
311
10.0
Liabilities
224,346
211,068
13,278
6.3
Depository liabilities
4.3
164,092
157,314
6,778
Borrowings
19,175
18,983
192
1.0
Bonds issued
19,812
20,192
(381)
(1.9)
Other liabilities
21,267
14,578
6,689
45.9
Shareholders’ equity
18,126
17,487
639
3.7
68
Asset Quality
Despite the increase in total loans, NPLs for the year were down significantly year-on-year, by 48.2% to KRW 2.9 trillion. This was due to the Bank’s
continuing efforts to build asset soundness, improve the concentration of high-volume loans and spreading a culture of increasing accountability for
preventing defaults. Moreover the Delinquency Ratio fell, down to 0.82%.
CHANGE
2011
2010
AMOUNT
175.7
168.1
7.6
4.5
2.9
5.6
(2.7)
(48.2)
NPL ratio(%)
1.65
3.34
(1.69)
Delinquency Ratio(%)
0.82
0.99
(0.17)
(Unit: KRW trillion)
Total loans
NPLs
%, %p
Capital Adequacy
Several factors impacted on shareholders’ equity during the year, such as the accumulation of Capital Reserve for Credit Loss and the repayment of
hybrid securities. The Tier 1 ratio, however, despite falling slightly, still stood at 10.74%, and although the BIS ratio also slightly dropped, still remained
strong at 13.78%.
2011
2010
CHANGE (%p)
Tier 1 ratio
10.74
11.40
(0.66)
BIS ratio
13.78
14.65
(0.87)
(Unit:%)
FINANCIAL REVIEW
Independent Auditors’ Report
English Translation of a Report Originally Issued in Korean
To the Shareholder and the Board of Directors of Woori Bank
We have audited the accompanying consolidated financial statements of Woori Bank and its subsidiaries (the “Group”). The financial statements
consist of the consolidated statements of financial position as of December 31, 2011, December 31, 2010 and January 1, 2010, respectively, and the
related consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows, all
expressed in Korean won, for the years ended December 31, 2011 and 2010, respectively. The Group’s management is responsible for the preparation
and fair presentation of the consolidated financial statements and our responsibility is to express an opinion on these consolidated financial statements
based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the Republic of Korea. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Group as of December 31,
2011, December 31, 2010 and January 1, 2010, respectively, and the results of its operations and its cash flows for the years ended December 31, 2010
and 2011, respectively, in conformity with Korean International Financial Reporting Standards (“K-IFRS”).
Accounting principles and auditing standards and their application in practice vary among countries. The accompanying consolidated financial statements
are not intended to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally
accepted in countries other than the Republic of Korea. In addition, the procedures and practices utilized in the Republic of Korea to audit such financial
statements may differ from those generally accepted and applied in other countries. Accordingly, this report and the accompanying consolidated
financial statements are for use by those knowledgeable about Korean accounting procedures and auditing standards and their application in practice.
March 12, 2012
N
ti tto R
d
Notice
Readers
This report is effective as of March 12, 2012, the auditors’ report date. Certain subsequent events or circumstances may have occurred between this
auditors’ report date and the time the report is read. Such events or circumstances could significantly affect the accompanying consolidated financial
statements and may result in modifications to the auditors’ report.
WOORI BANK
Woori Bank And Subsidiaries
Consolidated Statements Of Financial Position
AS OF DECEMBER 3 1, 2011, DECEMBER 31, 2010 AND JANUARY 1, 2010
(Unit : Korean Won In millions)
December 31, 2011
December 31, 2010
January 1, 2010
ASSETS
=5,389,267
= 3,885,684
= 5,040,146
Financial assets at fair value through profit or loss (Notes 7, 11 and 18)
Cash and cash equivalents (Note 6)
11,317,845
11,104,050
12,334,845
Available-for-sale financial assets (Notes 8, 11 and 18)
14,670,607
16,610,090
16,702,454
Held-to-maturity financial assets (Notes 9, 11 and 18)
15,400,425
15,920,317
12,527,029
191,909,032
177,630,875
176,849,334
Investments in associates (Note 12)
376,337
306,229
248,832
Investment properties (Note 13)
349,459
366,874
391,963
Loans and receivables (Notes 10, 11 and 18)
2,345,960
2,334,386
2,358,890
Intangible assets, net (Note 15)
Premises and equipment, net (Note 14)
147,387
39,366
68,143
Other assets (Note 16)
225,530
207,467
251,542
Current tax assets
2,393
2,833
16,377
Deferred tax assets
9,249
8,283
22,669
326,413
133,224
107,508
Derivative assets (Notes 11 and 25)
70
Assets held for sale (Note 17)
Total assets
2,258
5,185
7,609
= 242,472,162
= 228,554,863
= 226,927,341
Financial liabilities at fair value through profit or loss (Notes 11 and 19)
= 3,509,566
= 4,729,575
= 5,764,546
Deposits due to customers (Notes 11 and 20)
LIABILITIES
164,092,476
157,314,309
150,124,550
Borrowings (Notes 11 and 21)
19,174,642
18,982,971
20,752,335
Debentures (Notes 11 and 21)
19,811,813
20,192,427
23,476,103
Provisions (Notes 22 and 23)
607,612
519,829
550,761
Current tax liabilities
206,367
109,283
5,715
16,346,969
8,799,937
8,429,081
Other liabilities (Note 24)
444,549
277,757
693,182
Deferred tax liabilities
126,446
107,425
146,104
25,582
34,419
64,597
= 224,346,022
=211,067,932
=210,006,974
Other financial liabilities (Notes 11 and 24)
Derivative liabilities (Notes 11 and 25)
Total liabilities
(Continued)
FINANCIAL REVIEW
Consolidated Statements Of Financial Position (Continued)
AS OF DECEMBER 31, 2011, DECEMBER 31, 2010 AND JANUARY 1, 2010
December 31, 2011
December 31, 2010
January 1, 2010
= 3,829,783
= 3,829,783
=3,829,783
1,681,807
2,181,806
2,181,806
Capital surplus (Note 27)
812,016
811,421
811,993
Other equity (Note 28)
538,385
938,260
1,192,263
11,256,207
(1,123,866)
9,718,577
(513,676)
8,898,270
18,118,198
17,479,847
16,914,115
7,942
7,084
6,252
(Unit : Korean Won In millions)
EQUITY
Owner’s equity:
Capital stock (Note 27)
Hybrid securities (Note 27)
Retained earnings (Note 29)
(Planned regulatory reserve for credit loss) (Note 30)
Non-controlling interests
Total equity
Total liabilities and equity
See accompanying notes to consolidated financial statements.
18,126,140
17,486,931
16,920,367
=242,472,162
= 228,554,863
=226,927,341
WOORI BANK
Consolidated Statements Of Comprehensive Income
(Unit : Korean Won In millions, except for income per share data)
2011
2010
= 11,659,258
= 10,981,048
5,933,662
5,954,286
5,725,596
5,026,762
OPERATING INCOME:
Net interest income (Note 32):
Interest income
Interest expense
Net fees and commissions income (Note 33):
Fees and commissions income
993,929
931,530
Fees and commissions expense
485,938
437,737
507,991
493,793
Dividend income (Note 34)
123,150
119,095
Gain on financial instruments at fair value through profit or loss (Note 35)
106,682
15,213
1,016,746
978,546
(1,816,603)
(2,496,083)
(1,189,959)
(983,279)
(126,740)
(125,682)
(1,236,094)
(1,154,545)
(2,552,793)
(2,263,506)
(427,685)
(376,191)
Gain on available-for-sale financial assets (Note 36)
Impairment losses for loans, other receivables, guarantees and unused
commitments (Note 38)
General and administrative expenses (Note 39)
72
Employee compensation and benefits
Depreciation
Other general and administrative expenses
Net other operating income (expenses) (Note 39)
2,683,084
1,497,629
SHARE OF PROFITS (LOSSES) OF ASSOCIATES
(23,913)
39,224
NET INCOME BEFORE INCOME TAX EXPENSE
2,659,171
1,536,853
589,800
274,749
= 2,069,371
= 1,262,104
2,068,544
1,261,283
827
821
INCOME TAX EXPENSE
NET INCOME (Note 30)
(Net income after the planned reserves provided
for the year ended December 31, 2011: =1,459,182)
Net income attributable to owner
Net income attributable to the non-controlling interests
(Continued)
FINANCIAL REVIEW
Consolidated Statements Of Comprehensive Income (Continued)
(Unit : Korean Won In millions, except for income per share data)
2011
2010
= (396,510)
= (219,681)
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Loss on valuation of available-for-sale financial assets
Share of other comprehensive loss on investment in associates
Gain (loss) on overseas business translation
Gain on valuation of cash flow hedge
(22,348)
(22,255)
12,152
(13,108)
6,868
1,170
(399,838)
(253,874)
= 1,669,533
= 1,008,230
1,668,675
1,007,276
858
954
Basic earnings per common share
=2,687
=1,508
Diluted earnings per common share
= 2,514
=1,443
TOTAL COMPREHENSIVE INCOME
Comprehensive income attribute to owner
Comprehensive income attribute to the non-controlling interests
NET INCOME PER SHARE: (In Korean Won) (Note 41)
WOORI BANK
Consolidated Statements Of Changes In Equity
FOR YEARS ENDED DECEMBER 31, 2011 AND 2010
Capital
stock
Hybrid
securities
Capital
surplus
Gain (loss) on
valuation of
available-forsale financial
assets
Gain (loss)
on valuation
of cash flow
risk hedge
Gain
(loss) on
overseas
business
translation
Share of other
comprehensive loss on
associates
= = = = 1,159,619
= (10,468)
=-
Dividends
-
-
-
-
-
Net income
-
-
-
-
-
Variation of availablefor-sale financial assets
-
-
-
(219,681)
Foreign currency
translation
-
-
-
Cash flow hedge
-
-
Changes in equity of
investment in associates
-
Other
Other
Retained
earnings
Controlling
equity
Noncontrolling
equity
Total
Equity
= 43,112
=-
= = = 6,252
= 16,920,367
-
-
-
(441,618)
(441,618)
(122)
(441,740)
-
-
-
1,261,283
1,261,283
821
1,262,104
-
-
-
-
-
(219,681)
-
(219,681)
-
-
(13,241)
-
-
-
(13,241)
133
(13,108)
-
-
1,170
-
-
-
-
1,170
-
1,170
-
-
-
-
-
(22,255)
-
-
(22,255)
-
(22,255)
-
-
(572)
-
-
-
-
4
642
74
-
74
Balance as of
December 31, 2010
= = = = 939,938
= (9,298)
=(13,241)
= 20,857
=4
= = = 7,084
= 17,486,931
Balance as of
January 1, 2011
= = = = 939,938
= (9,298)
= = 20,857
=4
= = = 7,084
= 17,486,931
Dividends
-
-
-
-
-
-
-
-
(530,273)
(530,273)
-
(530,273)
Redemption of hybrid
securities
-
(499,999)
-
-
-
-
-
(1)
-
(500,000)
-
(500,000)
Net income
-
-
-
-
-
-
-
-
2,068,544
2,068,544
827
2,069,371
Variation of availablefor-sale financial assets
-
-
-
(396,510)
-
-
-
-
-
(396,510)
-
(396,510)
Foreign currency
translation
-
-
-
-
-
12,121
-
-
-
12,121
31
12,152
Cash flow hedge
-
-
-
-
6,868
-
-
-
-
6,868
-
6,868
Changes in equity of
investment in associate
-
-
-
-
-
-
(22,348)
-
-
(22,348)
-
(22,348)
Other
-
-
595
-
-
-
-
(5)
(641)
(51)
-
(51)
= = = = 543,428
= (2,430)
= (1,120)
= (1,491)
= (2)
= = = 7,942
= 18,126,140
(Unit : Korean Won In
million)–
Balance as of
January 1, 2010
74
Balance as of
December 31, 2011
FINANCIAL REVIEW
Consolidated Statements Of Cash Flows
(Unit : Korean Won In million)
2011
2010
= 2,069,371
= 1,262,104
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
Adjustment to net income:
Interest income
(11,659,258)
(10,981,048)
Interest expense
5,933,662
5,954,286
Dividend income
(123,150)
(119,095)
589,800
274,749
(5,258,946)
(4,871,108)
1,816,603
2,496,083
2,675
4,526
126,740
125,682
4,614
8,530
Loss on valuation of derivatives
4,872
23,224
Loss on transaction of derivatives
5,641
27,489
Loss on fair value hedged items
200,455
163,777
Retirement benefits
100,582
81,162
Income tax expense
Additions of expenses not involving cash outflows:
Impairment losses for loans, other receivables, guarantees and unused commitments
Loss on disposal of premises and equipment, intangible assets and investment properties
Depreciation and amortization of premises and equipment, intangible assets and investment properties
Impairment loss on premises and equipment, intangible assets and investment properties
Provisions
Loss on valuation of investment in associates
Loss on disposal of investment in associates
2,654
12,365
28,268
4,778
-
6
2,293,104
2,947,622
Deductions of revenues not involving cash inflows:
1,016,746
978,546
Gains on disposal of premises and equipment, intangible assets and investment properties
Gain on available-for-sale financial assets
8,839
357
Reversal of impairment loss on premises and equipment, intangible assets and investment
properties
321
966
Gain on disposal of assets held for sale
Gain on valuation of derivatives
Gain on transaction of derivatives
56,327
-
193,141
122,834
233
6,921
Gain on fair value hedged items
4,921
40,575
Gain on valuation of investment in associates
4,355
44,002
Gain on disposal of investment in associates
(Continued)
26,231
-
1,311,114
1,194,201
WOORI BANK
Consolidated Statements Of Cash Flows (Continued)
FOR YEARS ENDED DECEMBER 31, 2011 AND 2010
2011
2010
Changes in operating assets and liabilities:
Decrease (increase) in financial instruments at fair value through profit or loss
= (1,433,804)
= 195,824
(15,971,167)
(3,272,047)
(38,933)
40,337
Increase in deposits due to customers
6,778,167
7,189,758
Decrease in provisions
(122,730)
(131,434)
Increase in other financial liabilities
7,424,755
73,588
Increase in loans and receivables
Decrease (increase) in other assets
Increase (decrease) in other liabilities
182,271
(415,235)
(3,181,441)
3,680,791
Interest income received
11,618,277
10,888,755
Interest expense paid
(5,816,405)
(5,656,903)
Dividend received
123,150
119,095
Income taxes paid
(361,384)
(110,286)
174,612
7,065,869
Disposal of available-for-sale financial assets
11,088,564
11,258,748
Disposal of held-to-maturity financial assets
5,761,763
6,481,737
139,328
5,510
67
63,260
Disposal of investment properties
11,780
-
Disposal of premises and equipment
Net cash provided by operating activities
76
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash in-flows from investing activities:
Disposal of investment in associates
Dividends received from investment in associates
10,637
12,537
Disposal of intangible assets
1,466
394
Disposal of assets held for sale
5,644
150
17,019,249
17,822,336
Acquisition of available-for-sale financial assets
8,504,277
10,475,176
Acquisition of held-to-maturity financial assets
Cash out-flows from investing activities:
5,323,490
9,882,815
Acquisition of investment in associates
222,100
2,277
Acquisition of premises and equipment
92,538
56,565
Acquisition of intangible assets
Net cash provided by (used in) investing activities
(Continued)
157,454
11,100
14,299,859
20,427,933
2,719,390
(2,605,597)
FINANCIAL REVIEW
Consolidated Statements Of Cash Flows (Continued)
2011
2010
Issue of borrowings
= 4,521,806
=2,706,394
Issue of debentures
3,020,798
6,368,785
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash in-flows from financing activities:
Increase in hedging derivatives
193,666
102,643
7,736,270
9,177,822
Repayment of borrowings
4,330,135
4,475,758
Repayment of debentures
3,590,090
9,777,043
Decrease in hedging derivatives
204,027
77,995
Repayment of hybrid securities
500,000
-
Cash out-flows from financing activities:
Dividends paid
530,273
441,618
9,154,525
14,772,414
(1,418,255)
(5,594,592)
27,836
(20,142)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
1,503,583
(1,154,462)
CASH AND CASH EQUIVALENTS,
BEGINNING OF THE YEAR
3,885,684
5,040,146
= 5,389,267
= 3,885,684
Net cash used in financing activities
Effects of exchange rate changes on cash and cash equivalents
CASH AND CASH EQUIVALENTS, END OF THE YEAR
WOORI BANK
Notes To Consolidated Financial Statements
1. GENERAL
(1) Woori Bank
Woori Bank (hereafter referred to as, the” Bank” or the “Parent” or the “Company”) was established in 1899 and is engaged in the commercial
banking business under the Banking Law, trust business under the Financial Investment Services and Capital Market Act and foreign exchange business
with approval from the Bank of Korea (“BOK”) and the Ministry of Finance and Economy (“MOFE”).
On March 27, 2001, Korea Deposit Insurance Corporation (“KDIC”) established Woori Finance Holdings Co., Ltd. (“WFH”). The Bank is a wholly owned
subsidiary of WFH as of December 31, 2011. The Bank’s common stock and preferred stock amount, expressed in Korean Won (the “KRW” or “=”),
to =3,479,783 million and =350,000 million, respectively, and the Bank’s common and preferred shares issued and outstanding as of December 31,
2011 are 696 million shares and 70 million shares, respectively. The head office of the Bank is located in Seoul, Korea. The Bank has 942 branches and
offices in Korea, and 16 branches and offices in overseas.
(2) Subsidiaries
1) The Bank and its subsidiaries (the “Group”) have the following subsidiaries (Unit: Korean Won in millions, USD in thousands,
RUB in 100 millions, IDR in millions):
78
December 31, 2011
Financial
statements
as of
Number of
shares owned
Percentage
of ownership
(%)
1,008,000
100.0
Dec. 31
Subsidiaries
Location
Capital stock
Main
business
Woori Credit Information
Co., Ltd.
Korea
KRW 5,000
Credit information
Woori America Bank
U.S.A
USD 122,500
Banking
24,500,000
100.0
Dec. 31
PT. Bank Woori Indonesia
Indonesia
IDR 170,000
Banking
1,618
95.2
Dec. 31
Woori Global Market Asia
Limited
Hongkong
USD 50,000
Banking
39,000,000
100.0
Dec. 31
Woori Bank China Limited
China
USD 308,810
Banking
-
100.0
Dec. 31
ZAO Woori Bank
Russia
RUB 5
Banking
19,999,999
100.0
Dec. 31
Korea BTL Infrastructure Fund
(*1)
Korea
KRW 467,000
Financial service
93,393,568
100.0
Dec. 31
Woori Fund Service Co., Ltd.
(*2)
Korea
KRW 3,000
Financial service
600,000
100.0
Dec. 31
December 31, 2010
Subsidiaries
Woori Credit Information Co., Ltd.
Woori America Bank
Woori Global Market Asia Limited
Number of
shares owned
January 1, 2010
Percentage
of ownership (%)
Number of
shares owned
Percentage
of ownership (%)
1,008,000
100.0
1,008,000
100.0
24,500,000
100.0
10,500,000
100.0
1,618
95.2
1,618
95.2
39,000,000
100.0
39,000,000
100.0
FINANCIAL REVIEW
December 31, 2010
Subsidiaries
January 1, 2010
Number of
shares owned
Percentage
of ownership (%)
Number of
shares owned
Percentage
of ownership (%)
-
100.0
-
100.0
ZAO Woori Bank
19,999,999
100.0
19,999,999
100.0
66,958,321
100.0
55,152,422
100.0
(*1) The Group decided to acquire 166,606,432 shares with an amount of \ 833,032 million on March 7, 2012, and the Group’s total shares after the acquisition is 260,000,000 shares.
(*2) During the year ended December 31, 2011, Woori Fund Service Co., Ltd. was established through a 100% capital contribution by the Bank, and accordingly is included in the
consolidation.
2) For special purpose entities (“SPE”), in accordance with Korean International Financial Reporting Standards (“K-IFRS”) 2012
‘Consolidation-special purpose entities’, entities which the Group has decision making power and/or carries the benefits and
risks of such entities, are included in the consolidation. Details of special purposes entities under consolidation are as follows:
<December 31, 2011>
Main
business
Percentage of
owner-ship (%)
Financial
statements as of
Subsidiaries
Location
Kumho Trust 1st Co., Ltd.(*1)
Korea
Asset
Securitization
0.0
December 31
Woori IB Global Bond Co., Ltd. (*1)
Korea
=
0.0
December 31
Asiana Saigong Inc. (*1)
Korea
=
0.0
December 31
Korea
=
0.0
December 31
KAMCO Value Recreation 1 Securitization Specialty
Co., Ltd. (*1)
Korea
=
15.0
December 31
IB Global 1st Co., Ltd. (*1)
Korea
=
0.0
December 31
Hermes STX Co., Ltd. (*1)
Korea
=
0.0
December 31
BWL 1st Co., LLC. (*1)
Korea
=
0.0
December 31
Korea
=
0.0
December 31
Real DW 2 Co., Ltd. (*1)
Korea
=
0.0
December 31
Uri Pungsan Inc. (*1)
Korea
=
0.0
December 31
Pyeongtaek Ocean Sand Inc. (*1)
Korea
=
0.0
December 31
Woori Bank Preservation Trust of principal and interest (*2)
Korea
Trust
0.0
December 31
Haeoreum Short-term Bond 15th (*3)
Korea
Securities
investment
100.0
December 31
(Unsold) G5 Pro Short-term 13th (*3)
Korea
=
100.0
December 31
(Unsold) G6 First Class Mid-term E-20 (*3)
Korea
=
100.0
December 31
(Unsold) G15 First Class Mid-term C-1 (*3)
Korea
=
100.0
December 31
D First Class Mid-term C-151 (*3)
Korea
=
100.0
December 31
Golden Bridge Sidus FNH video (*3)
Korea
=
58.8
December 31
Golden Bridge NHN Online Private Equity Investment (*3)
Korea
=
60.0
December 31
st
An-Dong Raja 1 Co., Ltd. (*1)
st
th
Consus 8 Co., LLC. (*1)
nd
WOORI BANK
Location
Main
business
Korea
=
61.1
December 31
Korea
=
94.8
December 31
Woori Milestone China Real Estate Fund 1 (*3)
Korea
=
80.7
December 31
Consus Sakhalin Real Estate Investment Trust 1st (*3)
Korea
=
75.0
December 31
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Mirae Asset Maps Blue Chips Private Trust 2 (*3)
Korea
=
100.0
December 31
Hyundai Advantage Private Trust 14th (*3)
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Subsidiaries
Woori CS Ocean Bridge 7th (*3)
st
Woori Milestone Private Real Estate Fund 1 (*3)
st
th
Woori Partner Plus Private Equity Securities 4 (*3)
th
Allianz Blue Ocean Private Trust 5 (*3)
nd
Kyobo Axa Long Short Private Trust 2nd (*3)
rd
Percentage of
owner-ship (%)
Financial
statements as of
Hanhwa Quant Long Short Private Equity3 (*3)
Korea
=
100.0
December 31
Woori Frontier Alpha Private Equity 8th (*3)
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Woori Partner Plus Private Trust 7 (*3)
Korea
=
100.0
December 31
Yurie WB Private Investment Trust 3rd (*3)
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Samsung Plus Private Investment Trust 13 (*3)
Korea
=
100.0
December 31
Hanwha Smart Private Trust 43rd (*3)
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Woori Partner Plus Private Equity Securities 8 (*3)
Korea
=
100.0
December 31
Woori Partner Plus Private Equity Securities 9th (*3)
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Midas Private Investment Trust W-3rd (*3)
th
Consus Private Securities Investment Trust 54 (*3)
80
th
nd
KDB Private Equity Securities Investment Trust WB 2 (*3)
th
st
Eugene Pride Private Trust 21 (*3)
nd
Meritz Prime Private Trust 42 (*3)
th
th
Hanwha Smart Private Trust 50 (*3)
(*1) Classified as SPE for asset securitization. The Group has less than majority ownership for the SPE, but included in consolidation scope considering the activities of the SPE, decisionmaking power maintained by the Group, and the benefits and risks carried by the Group.
(*2) Classified as SPE for money trust under trust business law. The Group has less than majority ownership for the SPE, but included in consolidation scope considering the activities of
the SPE, decision-making power maintained by the Group, and the benefits and risks carried by the Group
(*3) Classified as SPE for investing in securities and others and included in consolidation scope considering the activities of the SPE, decision-making power maintained by the Group,
and the benefits and risks carried by the Group.
<December 31, 2010>
Main
business
Percentage of
owner-ship (%)
Financial
statements as of
Subsidiaries
Location
Woori Moa Conduit Co., Ltd.
Korea
Asset
Securitization
0.0
December 31
Hyundai Glory 1st Co., Ltd.
Korea
=
0.0
December 31
KDB Capital 1 Co., Ltd.
Korea
=
0.0
December 31
st
Korea
=
0.0
December 31
st
Vivaldi HL 1 Co., Ltd.
FINANCIAL REVIEW
Location
Main
business
Korea
=
0.0
December 31
Korea
=
0.0
December 31
Woori IB Global Bond Co., Ltd.
Korea
=
0.0
December 31
Asiana Saigong Inc.
Korea
=
0.0
December 31
Korea
=
0.0
December 31
Korea
=
15.0
December 31
IB Global 1 Co., Ltd.
Korea
=
0.0
December 31
Hermes STX Co., Ltd.
Korea
=
0.0
December 31
Korea
=
0.0
December 31
Consus 8 Co., LLC.
Korea
=
0.0
December 31
Real DW 2nd Co., Ltd.
Korea
Trust
0.0
December 31
Woori Bank Preservation Trust of principal and interest
Korea
Securities
investment
100.0
December 31
KTB Smart 90 Private Security 2nd
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Mid-term D-2
Korea
=
100.0
December 31
Hanhwa Smart Private Security 19th
Korea
=
100.0
December 31
Subsidiaries
Swan SF Co., Ltd.
st
Kumho Trust 1 Co., Ltd.
st
An-Dong Raja 1 Co., Ltd.
st
KAMCO Value Recreation 1 Securitization Specialty Co., Ltd. (*1)
st
st
BWL 1 Co., LLC.
th
st
Hanvit Open-End High Yield HV 1
nd
st
My Asset Private Security Investment Trust W- 1
Percentage of
owner-ship (%)
Financial
statements as of
Korea
=
100.0
December 31
th
Eugene Pride Private Investment Security 12 (Bond)
Korea
=
100.0
December 31
Consus Private Security Investment Trust 29th
Korea
=
100.0
December 31
Hi-Smart Private Security 1st
Korea
=
100.0
December 31
Korea
=
100.0
December 31
nd
Woori Frontier Short-term Private 2
rd
Woori Frontier Alpha Quant Private Equity 3
Korea
=
100.0
December 31
Meritz Prime Private Trust1st
Korea
=
100.0
December 31
Korea
=
100.0
December 31
KDB Private Security Investment Trust WB-1
Korea
=
100.0
December 31
Samsung Plus Private Security 7th
Korea
=
100.0
December 31
Eugene Pride Private Investment Security 14th (Bond)
Korea
=
100.0
December 31
th
Korea
=
100.0
December 31
Taurus 1
Korea
=
100.0
December 31
Brain 3rd
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Yurie WB Private Security Investment Trust 2nd
st
Hanhwa Smart Private Security Investment Trust 33
st
th
Meritz Prime Private Trust 5
st
Prudential Quant Long-Short Private Trust 1
Korea
=
100.0
December 31
Prudential Quant Long-Short Private Trust 2nd
Korea
=
100.0
December 31
Woori Partner Plus Private Security Investment Trust 6th
Korea
=
100.0
December 31
Korea
=
100.0
December 31
th
Haeoreum Short-term Bond 15
WOORI BANK
Subsidiaries
Location
Main
business
Percentage of
owner-ship (%)
Financial
statements as of
(Unsold) G5 Pro Short-term 13th
Korea
=
100.0
December 31
(Unsold) G6 First Class Mid-term E-20
Korea
=
100.0
December 31
(Unsold) G15 First Class Mid-term C-1
Korea
=
100.0
December 31
D First Class Mid-term C-151
Korea
=
100.0
December 31
Golden Bridge Sidus FNH video
Korea
=
58.8
December 31
Golden Bridge NHN Online Private Equity Investment
Korea
=
60.0
December 31
th
Woori CS Ocean Bridge 7
Korea
=
61.1
December 31
Woori Milestone Private Real Estate Fund 1st
Korea
=
94.8
December 31
Korea
=
80.7
December 31
Consus Sakhalin Real Estate Investment Trust 1
Korea
=
75.0
December 31
Woori Partner Plus Private Equity Securities 4th
Korea
=
100.0
December 31
st
Woori Milestone China Real Estate Fund 1
st
<January 1, 2010>
82
Subsidiaries
Location
Woori Frontier Co., LLC.
Korea
Main
business
Asset
Securitization
Percentage of
owner-ship (%)
0.0
Financial
statements
as of
December 31
Purun Woori First Co., Ltd.
Korea
=
0.0
December 31
Change Up B Co., Ltd.
Korea
=
0.0
December 31
Woori ship Mortgage 2-2nd ABCP Co., Ltd.
Korea
=
0.0
December 31
Korea
=
0.0
December 31
Hyundai Glory 1 Co., Ltd.
Korea
=
0.0
December 31
KDB Capital 1st Co., Ltd.
Korea
=
0.0
December 31
st
Vivaldi HL 1 Co., Ltd.
Korea
=
0.0
December 31
st
Swan SF Co., Ltd.
Korea
=
0.0
December 31
Kumho Trust 1st Co., Ltd.
Korea
=
0.0
December 31
Korea
=
0.0
December 31
Asiana Saigong Inc.
Korea
=
0.0
December 31
An-Dong Raja 1 Co., Ltd.
Korea
=
0.0
December 31
KAMCO Value Recreation 1st Securitization Specialty
Co., Ltd. (*1)
Korea
=
15.0
December 31
Consus 8th Co., LLC.
Korea
=
0.0
December 31
Korea
Trust
0.0
December 31
Korea
Securities
investment
100.0
December 31
Hanvit Open-End High Yield hv 1st
Korea
=
100.0
December 31
st
FINANCIAL REVIEW
Location
Mid-term D-2
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Subsidiaries
nd
th
th
Percentage of
owner-ship (%)
Financial
statements
as of
Main
business
(Unsold) G5 Pro Short-term 13
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Korea
=
58.8
December 31
Korea
=
60.0
December 31
Woori CS Ocean Bridge 7th
Korea
=
61.1
December 31
Woori Milestone Private Real Estate Fund 1
Korea
=
94.8
December 31
Woori Milestone China Real Estate Fund 1st
Korea
=
98.5
December 31
Consus Sakhalin Real Estate Investment Trust 1st
Korea
=
75.0
December 31
Korea
=
100.0
December 31
st
th
My Asset Private Ace Bond 26
st
Eugene Best Plan Private Bond 31
Korea
=
100.0
December 31
Prudential Private Investment Trust 2nd
Korea
=
100.0
December 31
Hana UBS Private Security Investment Trust 8th
Korea
=
100.0
December 31
nd
Mirae Asset Maps Platinum Alpha 2
Korea
=
100.0
December 31
Mirae Asset Maps Alpha Arbitrage Private
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Woori Frontier Alpha Quant Private Equity 2nd
th
Consus Private Security Investment Trust 12
st
GS Asset Allocation Private Security Investment Trust 1
Korea
=
100.0
December 31
Trustone Private Security Investment Trust 1st
Korea
=
100.0
December 31
KTB Smart 90 Private Security 4th
Korea
=
100.0
December 31
Leo 1
Korea
=
100.0
December 31
Brain 1st
Korea
=
100.0
December 31
Korea
=
100.0
December 31
Korea
=
100.0
December 31
st
Leo 2nd
Woori Supreme 1
st
st
Gaul 1
Korea
=
100.0
December 31
Yurie WB Private Security Investment Trust 1st (Bond)
Korea
=
100.0
December 31
Woori Partner Plus Private Equity Securities 3rd
Korea
=
100.0
December 31
Wise Private Security Investment Trust 24
Korea
=
100.0
December 31
Eugene Pride Private Security Investment Trust 2nd (Bond)
Korea
=
100.0
December 31
G3 First Class Mid-term B-90
Korea
=
100.0
December 31
th
WOORI BANK
3) Details of special purpose entities newly included in consolidation scope for the year ended December 31, 2011 are as follows:
Special Purposed Entities
Reasons
Uri Pungsan Inc.
Classified as a SPE for asset securitization. The activities of entities,
decision-making powers and benefits and risks are considered when
those SPEs are consolidated even if the Group has less than majority
ownership for them.
Pyeongtaek Ocean Sand Inc.
Allianz Blue Ocean Private 5th
Mirae Asset Maps Blue Chips Private 2nd
Hyundai Advantage Private 14th
Classified as SPE for investing in securities and other. The activities of
entities, decision-making powers and benefits and risks are considered
when those SPEs are consolidated.
Kyobo Axa Long Short Private Trust 2nd
Hanhwa Quant Long Short Private 3rd
Woori Frontier Alpha Private Equity 8th
Midas Private Investment Trust W 3rd
84
Yurie WB Private Investment Trust 3rd
KDB Private Equity Securities Investment Trust WB 2nd
Samsung Plus Private Investment Trust 13th
Hanwha Smart Private Trust 43rd
Eugene Pride Private Trust 21st
Meritz Prime Private Trust 42nd
Hanwha Smart Private Trust 50th
4) Details of special purpose entities excluded from consolidation for the year ended December 31, 2011 are as follows:
Reasons
Hyundai Glory 1st Co., Ltd.
Expiration of the contract or liquidation stopped from the Group
from bearing the majority of the risk resulting from the operation of
entities.
KDB Capital 1st Co., Ltd.
Vivaldi HL 1st Co., Ltd.
Swan SF Co., Ltd.
Disposal and repayment of beneficiary certificates
st
Hanvit Open-End High Yield HV 1
Mid-term D-2nd
My Asset Private Security Investment Trust W-1st
FINANCIAL REVIEW
Reasons
th
Eugene Pride Private Investment Security 12 (Bond)
Woori Frontier Short-term Private 2nd
Woori Frontier Alpha Quant Private Equity 3rd
Meritz Prime Private Trust 1st
KDB Private Security Investment Trust WB-1st
Eugene Pride Private Security Investment Trust 14th (Bond)
Hanhwa Smart Private Security 33rd
Taurus 1st
Brain 3rd
Meritz Prime Private Trust 5th
Prudential Quant Long-Short Private Trust 1st
Woori Partner Plus Private Security Investment Trust 6th
5) Details of special purpose entities newly included in consolidation scope for the year ended December 31, 2010 are as follows:
Reasons
IB Global 1st Co., Ltd.
Classified as a SPE for asset securitization. The activities of
entities, decision-making powers and benefits and risks are
considered when those SPEs are consolidated even if the
Group has less than majority ownership for them.
BWL 1st Co., LLC.
My Asset Private Security Investment Trust W-1st
Eugene Pride Private Investment Security 12th (Bond)
Woori Frontier Short-term Private 2nd
rd
Woori Frontier Alpha Quant Private Equity 3
Meritz Prime Private Trust 1st
KDB Private Security Investment Trust WB-1st
Classified as SPE for investing in securities and other. The activities of entities, decision-making powers and benefits and
risks are considered when those SPEs are consolidated.
WOORI BANK
Reasons
th
Eugene Pride Private Security Investment Trust 14 (Bond)
Hanhwa Smart Private Security 33rd
Taurus 1st
Brain 3rd
Meritz Prime Private Trust 5th
Prudential Quant Long-Short Private Trust 1st
6) Details of special purpose entities excluded from consolidation for the year ended December 31, 2010 are as follows:
Reasons
86
Woori Frontier Co., LLC.
Purun Woori 1st Co., Ltd.
Expiration of the contract or liquidation stopped from the Group
from bearing the majority of the risk resulting from the operation of
entities.
Change Up B
Woori ship Mortgage 2nd ABCP Co., Ltd.
My Asset Private Ace Bond 26th
Eugene best plan Private Trust 31st
Prudential Private Investment Trust 2nd
Hana UBS Private Security Investment Trust 8th
nd
Mirae Asset Maps Platinum Alpha 2
Mirae Asset Maps Arbitrage Private
Woori Frontier Alpha Quant Private 2nd
GS Asset Allocation Private Security Investment Trust 1st
Trustone Private Security Investment Trust 1st
KTB Smart 90 Private Security 4th
Leo 1st
Brain 1st
Leo 2nd
Woori Supreme 1st
Gaul 1st
Yurie WB Private Security Investment Trust 1st (Bond)
Woori Partner Plus Private Equity Securities 3rd
Disposal and repayment of beneficiary certificates
FINANCIAL REVIEW
Reasons
Wise Private Security Investment
Trust 24th
Eugene Pride Private Security Investment Trust 2nd (Bond)
G3Top-Notch Mid-term B-90
7) Summarized statements of financial position as of December 2011 and 2010, respectively, and comprehensive income
statements for the years ended December 31, 2011 and 2010, respectively, of subsidiaries, whose financial information are
included on the consolidated financial statements, are as follows (Unit: Korean Won in millions):
<December 31, 2011>
Assets
Liabilities
Equity
Net income
(loss)
Total comprehensive
income (loss)
=30,148
= 3,811
=26,337
= 3,340
= 3,340
Woori America Bank
1,102,653
965,740
136,913
1,953
3,857
643,915
479,248
164,667
17,149
17,808
Subsidiaries
189,541
136,536
53,005
(8,776)
(8,353)
2,995,451
2,562,582
432,869
22,884
28,919
ZAO Woori Bank
350,235
329,099
21,136
1,590
712
473,983
187
473,796
24,637
24,637
2,719
361
2,358
(596)
(596)
Woori Bank Preservation Trust of principal
and interest
8,285
8,285
-
-
-
896,711
1,065,745
(169,034)
(10,522)
(21,606)
1,654,962
44,479
1,610,483
8,458
11,213
Assets
Liabilities
Equity
Net income
(loss)
Total comprehensive
income (loss)
= 29,433
= 3,916
=25,517
= 3,425
= 3,425
Woori America Bank
SPEs under consolidation
Beneficiary Certificates under consolidation
<December 31, 2010>
Subsidiaries
1,196,801
1,063,745
133,056
(70,283)
(73,314)
487,557
340,697
146,860
17,012
19,780
182,730
121,372
61,358
3,361
1,861
2,237,662
1,833,707
403,955
14,255
4,162
ZAO Woori Bank
170,027
149,603
20,424
956
296
340,478
137
340,341
21,067
21,067
8,483
8,483
-
-
-
1,019,267
1,166,656
(147,389)
95,629
108,516
and interest
SPEs under consolidation
WOORI BANK
Assets
Liabilities
Equity
Net income
(loss)
Total comprehensive
income (loss)
1,814,661
260,267
1,554,394
52,110
52,802
Subsidiaries
8) Summarized statements of financial position as of January 1, 2010 of subsidiaries, whose financial information are included
on the consolidated financial statements, are as follows (Unit: Korean Won in millions):
Subsidiaries
Assets
Liabilities
Equity
= 28,734
= 4,122
= 24,612
Woori America Bank
1,247,557
1,122,002
125,555
408,585
278,978
129,607
185,497
126,001
59,496
1,752,633
1,352,845
399,788
ZAO Woori Bank
151,349
131,221
20,128
279,909
115
279,794
12,044
12,044
-
Special Purpose Entities under consolidation
1,292,047
1,549,720
(257,673)
944,431
133,137
811,294
88
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(1) Basis of financial statement presentation.
The Group has adopted K-IFRS from the fiscal year beginning on January 1, 2011 and the accompanying consolidated financial statements are prepared
on K-IFRS. In accordance with K-IFRS 1101 ‘First-time Adoption of International Financial Reporting Standards ‘, the transition date to K-IFRS is January
1, 2010. An explanation of how the transition to K-IFRS has affected the financial position as of January 1, 2010 (date of transition), December 31,
2011 and December 31, 2010, and comprehensive income for the year ended December 31, 2011 and 2010 of the Company is provided in Note 47
“Transition Effects of K-IFRS.”
The Group maintains its official accounting records in Korean Won and prepares consolidated financial statements in conformity with K-IFRS, in the
Korean language (Hangul). Accordingly, these consolidated financial statements are intended for use by those who are informed about K-IFRS and
Korean practices. The accompanying consolidated financial statements have been condensed and restructured into English with certain expanded
descriptions from the Korean language financial statements.
Major accounting policies used for the preparation of the consolidated financial statements are stated below. Unless stated otherwise, these accounting
policies have been applied consistently to the financial statements for the current period and accompanying comparative period.
The company’s financial statement has been filled out based on the historical cost method except for specific non-current assets and certain financial
assets. The preparation of consolidated financial statements under K-IFRS requires the application of certain accounting estimates and the Group
prepared its financial statements by management judgement for critical accounting estimates.
FINANCIAL REVIEW
The accompanying consolidated financial statements were approved by the board of directors on March 7, 2012.
(2) Basis of consolidation
1) Subsidiary
An entity which the Group (including special purpose entities) has power to govern the financial and operating policies is considered a subsidiary. In
general, an entity which the Group has over 50% voting power in is considered a subsidiary.
Special purpose entities established for certain limited purposes may be considered as a subsidiary of the Company; even though the Company may
have less than 50% of the voting power, if the Company has the decision-making power over the special purpose entity’s activities, risk and benefit.
The existence of the potential voting power available to exercise or to convert, presently, is considered when evaluating whether or not the Group has
control over an entity. An entity is included in the consolidation, as a subsidiary, once such control is established, while it is excluded from consolidation
once it is loses such control. .
Acquisitions of subsidiaries are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of
the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, equity instruments issued by the Group and acquisition-related
costs. At the acquisition date, the identifiable assets acquired, liabilities and contingent liabilities are recognized at their fair value at the acquisition
date without reference to non-controlling interests. 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 a subsidiary recognized at the date of acquisition is recognized as goodwill; if less, the difference is directly
recognized as other comprehensive income.
When the Group transacts with each other, unrealized profits and losses resulting from the transactions are eliminated. When a subsidiary of the Group
uses another accounting principle other than that of the Group’s, necessary adjustments are made to the financial statements for the Group’s purposes.
2) Non-controlling interests
The components of net income and other comprehensive income are attributed to the owners of the Group and the non-controlling interest holders.
Total comprehensive income of subsidiaries is attributed to the owners of the Group and to the non-controlling interest holders, even if this results in
the non-controlling interests having a deficit balance. 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.
(3) Investments in associates
An associate is an entity over which the Group has significant influence but does not have direct or indirect control over. Significant influence is generally
presumed to exist when the Group holds 20% or more, but less than 50%, of the voting rights. Such investments in associates are measured an
acquisition cost at acquisition date and since then are accounted for using the equity method. The identifiable goodwill (net book value) is included in
investment amounts in associate.
The Group’s interests in its associate’s income are recognized in the statement of consolidated comprehensive income. The changes in the associate’s
retained earnings are recognized by the Company as retained earnings. However, when the Company’s share in an associate changes due to a capital
increase or decrease of the associate, such changes are recognized in other equity (change in interests of equity method securities).
If the Group’s share in an associate’s accumulated loss equals or exceeds the Group’s equity interest, including unsecured receivables, in the associate,
the Group suspends further recognition of its share of the associate’s loss. Unless in circumstances when the Group guarantees or is obligated to pay
the associates payables.
WOORI BANK
(4) Segment reporting
An operating segment is the level of business activity at which management reports to chief operating decision maker, for decision making purposes.
In addition, the chief operating decision maker is responsible for evaluating the resources distributed to and the performance of an operating segment.
(5) Accounting for foreign currencies translations
1) Functional currency and presentation currency
The individual financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates
(its functional currency). The consolidated financial statements are expressed in Korean Won.
2) Translation of foreign currencies transactions and balances at the end of reporting period
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies)
are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated
in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items that qualify as hedging instruments
in a cash flow hedge and form part of the Group’s net investment in a foreign operation are recognized in equity.
90
The Company is recognizing amortized cost and exchange rate variation effect as gains and losses of current period and the variation on the fair value
as other comprehensive gains and losses, respectively, both of which are effect of monetary securities of foreign currencies classified as available-for-
sale financial instruments. And the company is recognizing the variation on fair value and exchange rate variation effect of non-monetary securities of
foreign currencies classified as available-for-sale financial asset, as other comprehensive gains and losses.
3) Foreign currencies translation
Financial position and operating results of the Group are translated into the Group’s reporting currency as follows:
Description
Statement of consolidated financial position
Statement of consolidated comprehensive income
The assets and liabilities are translated at the exchange rate prevailing at the end of the reporting period.
Equity is translated at exchange rate at the time of acquisition.
The statement of consolidated comprehensive income is translated at the average exchange rates for the
period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at
the dates of the transactions are used.
(6) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value.
(7) Financial assets and financial liabilities
1) Classification of financial assets
Financial assets are classified into the following categories depending on the nature and purpose of possession: financial assets at ‘fair value through
profit or loss’ (“FVTPL”), loans and receivables, available-for-sale financial assets (“AFS”), and held-to-maturity investments (“HTM”).
FINANCIAL REVIEW
a) Financial assets at FVTPL
Financial assets are classified at FVTPL when the financial asset is either held for trading or designated at FVTPL. A financial asset is classified as held
for trading if the following criteria are met:
acquired or incurred principally to sell or repurchase during a short period of time
part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term
profit-taking
a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument)
A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if:
such designation eliminates or significantly reduces a recognition or measurement inconsistency that would otherwise arise; or
the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair
value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided
internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and K-IFRS 1039 “Financial Instruments: Recognition and Measurement”
permits the entire hybrid (combined) contract to be designated as at FVTPL
b) Loans and receivables
AFS financial assets are those non-derivatives financial assets that are either designated as AFS or are not classified as ‘financial assets at FVTPL’, ‘HTM
investments’ or ‘loans and receivables.’
c) AFS financial assets
AFS financial assets are those non-derivatives financial assets that are either designated as AFS or are not classified as ‘financial assets at FVTPL’, ‘HTM
investments’ or ‘loans and receivables.’
d) HTM financial assets
Non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Group has the positive intent and ability to hold
to maturity are classified as HTM financial assets
2) Classification of financial liabilities
Financial liabilities are classified as either financial liabilities at FVTPL or other financial liabilities measured at amortized cost.
a) Financial liabilities at FVTPL
Financial liabilities are classified at FVTPL when the financial liabilities is either held for trading or designated at FVTPL. A financial liability is classified as
held for trading if the following criteria are met:
acquired or incurred principally for the purpose of selling or repurchasing it in the near term
part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term
profit-taking
WOORI BANK
a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument)
A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:
such designation eliminates or significantly reduces a recognition or measurement inconsistency that would otherwise arise; or
the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair
value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided
internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and K-IFRS 1039 “Financial Instruments: Recognition and Measurement”
permits the entire hybrid (combined) contract to be designated as at FVTPL
b) Financial liabilities measured at amortized costs
Financial liabilities that are not classified as at FVTPL are measured at amortized costs. Deposits and debt securities that are not designated as at FVTPL
are classified as financial liabilities measured at amortized costs.
3) Recognition and Measurement
92
Standard trading transaction of a financial asset is recognized at the date of transaction when the Group becomes a party to the contractual provisions
of the asset. All types of financial instruments, except financial assets/liabilities at FVTPL, are measured at fair value at initial recognition plus transaction
costs that are directly attributable to the acquisition (issuance). Financial assets/liabilities at FVTPL are initially recognized at fair value and transaction
costs directly attributable to the acquisition (issuance) are recognized in the statement of comprehensive income.
Financial assets/liabilities at FVTPL and AFS financial assets are subsequently measured at fair value. HTM financial assets, loans and receivables, and
other financial liabilities are measured at amortized costs using the effective interest rate method.
Interest income and expense in accordance with financial assets and liabilities are recognized in profit or loss on an accrual basis using the effective
interest method.
Gains or losses arising from changes in the fair value of the financial assets/liabilities at FVTPL are presented in the statement of comprehensive income
during the period in which they arise. Changes in the fair value of AFS financial assets are measured in other comprehensive income.
Dividends income of financial assets at FVTPL and AFS financial assets is recognized in profit or loss when the Group’s right to receive the dividend is
established.
AFS financial assets recognize cumulative fair value adjustment, which is previously recognized in the equity, in profit or loss when disposing of assets
or recognizing impairment loss.
4) Derecognition of financial assets and liabilities
The Group derecognizes a financial asset when the contractual right to the cash flows from the asset is expired, or when it transfers the financial asset
and substantially all the risks and rewards of ownership of 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. The Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged,
cancelled or they expire.
FINANCIAL REVIEW
(8) Offsetting financial instruments
Financial assets and liabilities are presented net in the statement of financial position when the Group has an enforceable legal right to set off and an
intention to settle on a net basis or to realize an asset and settle the liability.
(9) Impairment of financial assets
1) Assets carried at amortized costs
The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset (or a group of financial assets) is
impaired. A financial asset (or a group of financial assets) is regarded as impaired when there is objective evidence of impairment loss as a result of one
or more events (hereinafter the “loss event”) that occurred after the initial recognition and the loss event has an impact on the estimated future cash
flows of the financial asset.
The criteria used to determine whether there is objective evidence of impairment include:
significant financial difficulty of the issuer or obligor; or
a breach of contract, such as a default or delinquency in interest or principal payments; or
the lender, for economic or legal reasons relating to the borrower’s financial difficulty, granting to the
borrower a concession that the lender would not otherwise consider; or
it becoming probability that the borrower will enter bankruptcy or financial re-organization; or
the disappearance of an active market for the financial asset due to financial difficulties; or
observable data indicating that there is a measurable decrease in the estimated future cash flows of a group of financial assets after initial recognition,
although the decrease in the estimated future cash flows of individual financial assets included in the group is not identifiable.
For individually significant financial assets, the Group assesses whether objective evidence of impairment exists individually, and it assesses for impairment
of financial assets that are not significant on an individual or collective basis. If there is no objective evidence of impairment exists for financial assets
individually assessed, the Group includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for
impairment. Assets for which the Group recognizes impairment based on an individual assessment or impairment loss is continuously recognized are
not subject to a collective impairment assessment.
The amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows
(excluding future credit loss that are not yet incurred), which is discounted at the financial asset’s original effective interest rate. The amount of loss is
reduced directly from the asset’s carrying value or by using a provision account, and it is recognized in profit or loss.
For loans and receivables or HTM financial assets with the variable interest rate, the current effective interest rate, which is determined under the
contract, is used to measure impairment loss.
Whether collateral inflow is probable or not, the present value of the estimated future cash flows of collateralized financial asset is calculated as the
cash flows, which may arise from collateral inflow, less costs of acquiring and selling collateral.
Future cash flows for a group of financial assets that are collectively assessed for impairment are estimated based on the historical loss experience of
assets having credit risk characteristics, similar to those in the group of financial assets. If historical loss experience is not enough or not existed, similar
corporation’s comparable historical loss experience of a group of financial assets is used. The effects of current conditions that do not have an impact in
WOORI BANK
the historical loss experience period are reflected, and the historical loss experience is adjusted based on the current observable data in order to remove
the effects of conditions that currently do not exist but existed in the historical loss experience period.
For a collective assessment for impairment, financial assets are classified based on similar credit risk characteristics (i.e. based on the assessment of credit
risk or grading process, considering asset type, industry, geographical location, collateral type, past-due status, and other relevant elements) indicating
the debtor’s ability to pay all amounts of debt under the contractual terms. These characteristics are relevant to the estimation of future cash flows for
groups of such assets as being indicative of the debtors’ ability to pay all amounts due according to the contractual terms of the assets being evaluated.
When estimating the changes in future cash flows, observable data (i.e. an impairment loss arisen from a pool of assets, an unemployment rate indicating
the loss and its parameter, asset price, product price, or payment status) needs to be consistently reflected. The methodology and assumptions used for
estimating future cash flows are reviewed regularly to reduce the difference between loss estimates and actual loss experience.
When the amount of impairment loss decreases subsequently and the decrease is related to an event occurred after the impairment is recognized (i.e.
an improvement in the debtor’s credit rating), the previously recognized impairment loss is reversed directly from or by adjusting the provision account.
The reversed amount is recognized in profit or loss of current period.
2) AFS financial assets
The Group assesses at the end of each reporting period whether there is objective evidence that the Group’s financial asset (or a group of financial
94
assets) is impaired. For debt securities, the Group uses the criteria refer to (9)-1) above.
For equity investments classified as AFS financial assets, a significant or prolonged decline in the fair value below the cost is considered objective
evidence of impairment. When the fair value of an AFS financial asset is decreased below its acquisition cost which is considered an objective evidence
of impairment, the cumulative loss, amounting to the difference between the acquisition cost and the current fair value, is removed from other
comprehensive income and recognized in profit or loss as an impairment loss. For AFS equity instruments, impairment losses recognized in profit or
loss on equity instruments are not reversed in profit or loss. Meanwhile, when the fair value of AFS debt instrument increases in a subsequent period
and the evidence is objectively related to an event occurred after recognizing the impairment loss, the impairment loss is reversed and recognized in
profit or loss.
(10) Investment properties
The Group classifies the property held to earn rental or capital gain purpose as investment property. The investment property is measured at its cost
at the initial recognition plus transaction costs arising at acquisition and after recognition, and is presented at cost less accumulated depreciation and
accumulated impairment loss as carrying value.
Subsequent costs are recognized in carrying amount of an asset or as an asset if it is probable that future economic benefits associated with the assets
will flow into the Group and the cost of an asset can be measured reliably. Routine maintenance and repairs are expensed as incurred.
While land is not depreciated, all other investment properties is depreciated based on the respective assets’ estimated useful lives using the straight-line
method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any
changes in estimate accounted for on a prospective basis.
(11) Premises and equipment
Premises and equipment are stated at cost less subsequent accumulated depreciation and accumulated impairment losses. The cost of an item of
premises and equipment is directly attributable to their purchase or construction, which includes any costs directly attributable to bringing the asset
FINANCIAL REVIEW
to the location and condition necessary for it to be capable of operating in the manner intended by management. It also includes the initial estimate
of the costs of dismantling and removing the item and restoring the site on which it is located. However, under K-IFRS 1101 ‘First-time Adoption of
International Financial Reporting Standards”, certain premises and equipment such as land and buildings were measured at fair value, which is regarded
as deemed cost, at the date of transition to K-IFRS.
Subsequent costs to replace part of the premises and equipment are recognized in carrying amount of an asset or as an asset if it is probable that the
future economic benefits associated with the assets will flow into the Group and the cost of an asset can be measured reliably. The carrying amount of
the replaced part is eliminated from the books. Routine maintenance and repairs are expensed as incurred.
Premises and equipment are depreciated on a straight-line basis on the estimated economic useful lives as follows:
Classification
Useful life
Buildings used for business purpose
40 years
Structures in leased office
5 years
Movable properties for business purposes
5 years
Leased assets
Of the same kind or with similar useful lives
The Group reviews the depreciation method, the estimated useful lives and residual values of fixed assets at the end of each annual reporting period.
If expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate. When the carrying amount of a
fixed asset exceeds the estimated recoverable amount, the carrying amount of such asset is reduced to the recoverable amount.
(12) Intangible assets
1) Goodwill
Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets acquired, liabilities and contingent liabilities
assumed at the date of acquisition is recognized as goodwill. Such goodwill is classified as intangible assets.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is indication that the unit
may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce
the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit on a pro-rata basis based on the carrying amount of
each asset in the unit. Any impairment loss for goodwill is recognized directly in profit or loss in the consolidated statement of comprehensive income.
An impairment loss recognized for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
2) Development costs, patents and other intangible assets
Intangible assets are stated at the manufacturing cost or acquisition cost plus additional incidental expenses less accumulated amortization and
accumulated impairment losses.
Expenditures incurred in conjunction with development of new products or technology, in which the elements of costs can be individually identified
and future economic benefits are probably expected, are capitalized as development costs under intangible assets. If the Group donates assets, such as
buildings, to the government and is given a right to use or benefit from the assets, the donated assets are recorded as beneficial donated assets under
intangible assets.
WOORI BANK
Intangible assets are amortized using the straight-line method over the estimated useful lives, which are five years for development costs, contractual
contact period for the beneficial donated assets, ten years for patents and five years for other intangible assets.
The estimated useful life and amortization method are reviewed at the end of each reporting period. If expectations differ from previous estimates, the
changes are accounted for as a change in an accounting estimate.
Intangible assets, including goodwill and membership, with indefinite useful lives are tested for impairment annually. All other assets are tested for
impairment when there is an objective indication that the carrying amount may not be recoverable, and if the indication exists, the Group estimates
the recoverable amount
(13) Impairment of non-monetary assets
Impairment loss is recognized carrying amount exceeding recoverable amount, recoverable amount is the higher of value in use and net fair value less
costs to sell.
For impairment testing purposes, assets are allocated to each of the Group’s cash-generating units (“CGU”).
Non-monetary assets, except for goodwill impaired, are reviewed in subsequent periods for potential recovery of value and reversal or impairment
previously recognized, at the end of each reporting period.
96
(14) Lease
A lease is classified as a financial lease, if it transfers substantially all the risks and rewards incidental to ownership with the lessee. Assets held under
finance leases are initially recognized as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the
minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease
obligation deducting related financial cost is recognized as a financial lease liability. Interest factor included in financial cost is reflected in comprehensive
income statements to achieve a constant rate of interest on the remaining balance of the liability.
All other leases are classified as operating leases and are not recognized as an asset in the statement of financial position. Operating lease payments are
recognized as expenses amortized over the lease period using the straight-line method after deducting any incentives from the lessor.
(15) Derivative instruments and hedging activities
Derivatives are initially recognized at fair value at the date the derivative contract is entered into, and they are subsequently remeasured to their fair
value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and
effective as a hedging instrument.
The Group designates certain hedging instrument to:
hedge of the exposure to changes in fair value of a recognized asset or liability or an unrecognized firm commitment (fair value hedge);
hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognized asset or liability or a highly probable
forecast transaction (cash flow hedge); and
hedge of a net investment in a foreign operation.
At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and the hedged item, along with its
risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing
basis, the Company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item.
FINANCIAL REVIEW
a) Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognized in profit or loss immediately, together
with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. Hedge accounting is discontinued when the
Company revokes the hedging relationship, when the hedging instrument no longer qualifies for hedge accounting and the fair value adjustment to
the carrying amount of the hedged item is amortized to profit or loss from that date to maturity using the effective interest method.
b) Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive
income. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss. Amounts previously recognized in other
comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item is recognized in profit or loss.
Hedge accounting is discontinued when the hedging instrument expires or is sold, or it no longer qualifies for hedge accounting, and any gain or loss
accumulated in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in profit or loss. When a
forecasted transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.
3) Hedge of a net investment in foreign operations
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating
to the effective portion of the hedge is recognized in equity while the gain or loss relating to the ineffective portion is recognized immediately in profit
or loss. The cumulated gain and loss in other comprehensive income is reclassified from equity to profit or loss on the disposal or partial disposal of the
foreign operations.
(16) Non-current assets held for sale group
The Group classifies a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction
rather than through continuing use. The Group measures a non-current asset (or disposal group) classified as held for sale at the lower of its carrying
amount and fair value less costs to sell.
(17) Compound financial instruments
The component parts of compound financial instruments issued by the Group are classified separately as financial liabilities and equity in accordance
with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market
interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest method
until extinguished upon conversion or at the instrument’s maturity date. The equity component is determined by deducting the amount of the liability
component from the fair value of the compound instrument as a whole. This is recognised and included in equity and is not subsequently remeasured.
The transaction cost related to the issuance of compound financial instrument is allocated to the liability and equity component proportionately to the
amounts issued.
(18) Provisions
The Group recognizes provisions if it has a present or contractual obligations as a result of a past event, it is probable that an outflow of resources will
be required to settle the obligation, and the amount of the obligation is reliably estimated. Provisions are not recognized for future operating losses.
The Group recognizes provisions related to the unused portion of point rewards earned by credit card customers, payment guarantees and litigations.
WOORI BANK
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 as an asset retirement obligation.
Where there are a number of similar obligations, the probability that an outflow will be required in settlement is determined by considering the
obligations as a whole. Although the likelihood of outflow for any one item may be small, if it is probable that some outflow of resources will be needed
to settle the obligations as a whole, a provision is recognized.
Provisions are recognized when the Company has a present obligation as a result of a past event, it is probable that the Company will be required to
settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the present value of the best estimate of the consideration required to settle the present obligation at the end
of the reporting period. The discount rate used in calculating the present value is the pre-tax discount rate taken into accounts the inherent risks and
time value of the obligation, in the market. The increase in provisions due to the passage of time is recognized as interest expense.
(19) Equity capital
The Company recognizes common stock as equity and redeemable preferred stocks as a liability. Direct expenses related to the issuance of new shares
or options are recognized as a deduction from equity, net of any tax effects.
98
If the Group reacquires its own equity instruments, those instruments (“treasury shares”) are presented as a deduction from total equity. The gain or
loss on the purchase, sale, issue, or cancellation of treasury shares is not recognized in profit or loss but recognized directly in equity.
(20) Financial guarantee contracts
A financial guarantee contract refers to the contract that requires the issuer to pay the specified amounts to reimburse the holder for a loss because the
specified debtor fails to make payment when due under original or revised contractual terms of debt instruments. The financial guarantee contract is
measured on initial recognition at the fair value, and the fair value is amortized over the financial guarantee contractual term.
After initial recognition, financial guarantee contract is measured at the higher of:
the present value of expected payment amount due to the financial guarantee contract
initially recognized amount of financial guarantee contract less recognized accumulated amortization in accordance with K-IFRS 1018 ‘Revenue’.
(21) Interest income and expense recognition
The Group recognizes interest income and expenses from HTM financial assets measured at amortized cost, loans and receivables, and other financial
liabilities on an accrual basis using the effective interest method.
Effective interest method is the method of calculating the amortized cost of financial assets or liabilities and allocating the interest income or expense
over the relevant period. The effective interest rate reconciles the expected future cash in and out through the expected life of financial instruments or
shorter period if appropriate, and net carrying value of financial assets or liabilities. When calculating the effective interest rate, the group estimates
future cash flows considering all contractual terms of the financial instruments such as prepayment option, except the loss on future credit risk. Also,
effective interest rate calculation reflects commission, points (only responsible for the effective interest rate) that are paid or earned between contracting
parties, transaction costs, and other premiums and discounts.
(22) Dividends
Dividends are recognized as liabilities during in the month it is approved by the shareholder.
FINANCIAL REVIEW
(23) Employee benefits
1) Short-term employee benefits
The Group recognizes the undiscounted amount of short-term employee benefits expecting payment in exchange for the services when the employee
renders services. The Group, also, recognizes relevant liabilities and expenses for the accumulating compensated absence when the services that
increase the future paid-leave right are rendered. Expenses and liabilities for the accumulated absence are also recognized in the consideration for
constructive obligation when the Group pays a bonus.
2) Retirement benefits
The Group offers a wide variety of retirement benefit plans and, in general, it raises the amounts computed based on actuarial assumptions through
the payment regarding additional fund in which the insurance company or fiduciary manages.
The Group operates both defined benefit and defined contribution plans. The defined contribution plan is the retirement benefit plans that pay the
fixed amount of bonus to other fund organizations. The Group does not have any legal or constructive obligations to make further payment even if it
does not pay all employee benefits relating to employee service rendered to the Group in the current and prior periods.
For defined benefit plans, the liability recognized in the statement of financial position is the present value of the current defined benefit obligation at
the date of the statement of financial position, less the fair value of plan assets, adjusted for unrecognized past service cost.
The defined benefit obligation is calculated on an annual basis by independent actuaries according to the projected unit credit method. The present
value of defined benefit obligations is expressed in a currency in which retirement benefits will be paid and is calculated by discounting expected future
cash outflows with the interest rate of high quality corporate bonds which maturity is similar to the payment date of retirement benefit obligations.
Actuarial gains and losses arising from the difference between changes in actuarial assumptions and what has actually occurred are recognized in profit
or loss in the period in which they occur.
Past service cost is reflected immediately in profit or loss. However, past service cost is recognized as an expense on a straight-line basis over the vesting
period when changes in retirement pension plan continues to require employees to remain on work duties during the vesting period.
Being connected to defined contribution plans, the Group mandatorily, contractually, or voluntarily pays contributions to pension insurance plans, which
are managed publicly or privately. The Group has no payment obligations after contributions are paid. Contributions are recognized as employee benefit
expense at a due date for payment. Prepaid contributions are recognized a decrease in future payment due to the excessive contributions or available
refund as assets.
3) Termination benefits
Termination benefits are paid when employment is terminated by the Group before the normal retirement date or an employee accepts voluntary
retirement in exchange for benefits. The Group recognizes termination benefits when employment is terminated based on detailed formal plans or
voluntary retirement is encouraged, providing termination benefits. Termination benefits are discounted at present value when they are due more than
12 months after the reporting date.
4) Profit-sharing and bonus plan
The Group recognizes appropriate provisions and expenses considering profits related shareholders of the Group after adjusting a specific sum of
amounts. The Group recognizes contractual obligations and obligations as a result of a past practice as provisions.
WOORI BANK
(24) Income tax expense
Income tax comprises current tax and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized in
other comprehensive income or directly in equity.
Current tax expenses are calculated based on the basis of tax laws that have been enacted by the reporting date or substantively enacted in the
countries where the Group operates and generates taxable income.
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit. However, the Company does not recognize deferred tax arising on the initial
recognition of an asset or a liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither accounting
profit nor taxable profit. Deferred taxes are determined using tax rates and laws that have been enacted by the reporting date —the date when the
relevant deferred tax assets are realized and the deferred tax liabilities are settled— or substantially enacted.
Deferred income tax assets are recognized if future taxable profits are probable so that the temporary differences can be used.
Deferred income tax liabilities are provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of
the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable
future.
100
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and
when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different
taxable entities where there is an intention either to settle the balances on a net basis or to realize the asset and settle the liability simultaneously.
(25) Origination fees and costs
The commission, which is part of the effective interest rate of loans, is accounted for deferred origination fees. Incremental cost related to the acquisition
or disposal is accounted for deferred origination costs, and it is amortized on the effective interest method and included in interest revenues on loans.
(26) Loan sales
When the Group disposes of loans based on valuations performed by a third party independent specialist (institution) using a reasonable and rational
method, the difference between the book value and the selling price is recognized as disposal gains and losses.
(27) Earnings per share (“EPS”)
Basic earnings per share is calculated by dividing net income from the statement of comprehensive income by the number of outstanding common
shares, and diluted EPS is calculated by adjusting earnings and number of shares for the effects of all dilutive potential common shares.
(28) Accounting developments
The Group has not applied the following new and revised K-IFRS that have been issued but are not yet effective:
Amendments to K-IFRS 1107 ‘Disclosures – Transfers of Financial Assets’
The amendments to K-IFRS 1107 increase the disclosure requirements for transactions involving transfers of financial assets. These amendments are
intended to provide greater transparency around risk exposures when a financial asset is transferred but the transferor retains some level of continuing
exposure in the asset. It will be applied for annual periods beginning on or after July 1, 2011.
FINANCIAL REVIEW
Amendments to K-IFRS 1012 ‘Deferred Tax – Recovery of Underlying Assets’
Under the amendments, investment properties that are measured using the fair value model in accordance with K-IFRS 1040 Investment Property and
property and equipment that are measured using revaluation model in accordance with K-IFRS 1016 Property, plant and equipment are presumed to
be recovered through sale for the purposes of measuring deferred taxes, unless the presumption is rebutted in certain circumstances. It will be applied
for annual periods beginning on or after January 1, 2011.
Amendments to K-IFRS 1019 – ‘Employee Benefits’
The amendments to K-IFRS 1019 change the accounting for defined benefit plans and termination benefits. The most significant change relates to the
accounting for changes in defined benefit obligations and plan assets when they occur, and hence eliminate the ‘corridor approach’ permitted under
the previous version of K-IFRS 1019 and accelerate the recognition of past service costs. The amendments to K-IFRS 1019 are effective for annual
periods beginning on or after January 1, 2013.
Legislation of K-IFRS 1113 ‘Fair Value Measurement’
K-IFRS 1113 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. K-IFRS 1113 is effective
for annual periods beginning on or after January 1, 2013, with earlier application permitted.
The Group anticipates that the amendments listed above may not have significant impact on the Group’s consolidated financial statements.
(29) Others
1) Reclassification of gains (losses) on beneficiary certificates
For the year ended December 31, 2010 and the six months ended June 30, 2011, the Bank had classified its dividends from beneficiary certificates and
gains (losses) on disposal of beneficiary certificates as other interest income on beneficiary certificates. Subsequent to the period, the Bank changed
its classification for the dividends to dividend income on beneficiary certificates and gains (losses) on disposal of beneficiary certificates to and gains
(losses) of disposal of AFS, respectively.
The effects of change for the years ended December 31, 2010 and for the six months ended June 30, 2011 are as follows (Korean Won in millions):
2010
2011
Net interest income
Three months ended
March 31
Six months ended
June 30
Three months
ended March 31
Six months
ended June 30
= (28,759)
= (85,151)
= (35,635)
= (91,232)
2,139
11,352
4,484
19,299
26,620
73,799
31,151
71,933
Dividend income
Gain (loss) on AFS financial
assets
As a result of the reclassification as discussed above, the Bank retroactively adjusted the financial statements for the prior period and such reclassification
did not have an effect on net assets and net income of the Bank.
2) Impairment loss on Kumho Industrial Co., Ltd.
According to the previous GAAP (“K-GAAP”), Statements of Korean Accounting Standards No. 2 ‘Interim Financial Reporting’, the impairment loss on
financial assets should be recognized on a cumulative basis when the fair value of the investment is decreased more than 30 percent of the acquisition
cost. During the 2010 interim period, =33,083 million of impairment loss on the investment in Kumho Industrial Co., Ltd. was recognized due to
WOORI BANK
the decrease in its fair value more than 30 percent of the acquisition cost. The impairment loss recognized during the interim period was reversed for
the year ended December 31, 2010 due to the increase in the fair value of Kumho Industrial Co., Ltd. in a subsequent period in accordance with the
previous GAAP.
Based on K-IFRS adopted from the fiscal year beginning on January 1, 2010, the impairment losses on AFS financial assets recognized during the interim
period cannot be reassessed on a cumulative basis. As such, the impairment loss on the financial assets recognized during the interim period due to
the decrease in fair value of the AFS financial assets should not be reversed through profit or loss when the fair value of the AFS financial assets is
increased subsequently. The impairment losses amounting to any increase in the fair value of the AFS financial assets in a subsequent period should be
recognized as other comprehensive income.
3) Reclassification of due from banks in foreign currencies
The Bank loaned to Woori Bank China (Limited) during January 2011 and recognized the loan as due from banks in foreign currencies as of March 31,
2011 and June 30, 2011, respectively. As of September 31, 2011, the Bank reclassifies the loans from to inter-bank loans in foreign currencies.
The effects of change as of March 31 and June 30, 2011 are as follows (Korean Won in millions):
2011
As of June 30
Decrease in due from banks
= (22,144)
= (86,248)
Increase in inter-bank loans
22,144
86,248
102
As of March 31
As a result of reclassification, the Bank retroactively adjusted the financial statements for the prior period and such reclassification did not have an effect
on net assets and net income of the Bank.
4) Change in the recognition of gains (losses) on transactions of derivatives
As for the application of K-GAAP, the Bank recorded gains (losses) on transactions of derivatives that for the year ended December 31, 2010, the Bank
recognized gains (losses) on transactions of derivatives such as interest swap, currency swap and commodity swap based on the gross amount of the
assets (liabilities) and the settlement amount, respectively. The Bank changed its recognition of gains (losses) on such transactions based on the net of
the assets (liabilities) and settlement amount.
The effects of change for the years ended December 31, 2010 under K-GAAP are as follows (Korean Won in millions):
2010
Three months ended
March 31
Six months ended
June 30
Nine months ended
September 30
The year ended
December 31
Decrease in gains on transactions of
derivatives
= (71,321)
= (120,273)
= (208,800)
= (262,991)
Decrease in losses on transactions of
derivatives
(71,321)
(120,273)
(208,800)
(262,991)
As a result of the changes as discussed above, such changes did not have an effect on net assets and net income of the Bank for the year ended
December 31, 2010.
Also, as for the application of credit default swap under K-GAAP, the Bank recorded gains (losses) on transactions of derivatives with total amount of
FINANCIAL REVIEW
assets (liabilities) and settlement amount, respectively. But for the nine months ended September 31, 2010, the Bank changed its recoding with the net
amount of assets (liabilities) and settlement amount.
The effects of change for the three months and six months ended June 30, 2010 are as follows (Korean Won in millions):
2010
Three months ended March 31
Six months ended June 30
Decrease in gains on transactions of derivatives
= (86,007)
= (176,018)
Decrease in losses on transactions of derivatives
(86,007)
(176,018)
As a result of the changes as discussed above, such changes did not have an effect on net assets and net income of the Bank for the three months
ended March 31, 2010 and six months ended June 30, 2010, respectively.
3. SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS
The significant accounting estimates and assumptions are continually evaluated and are based on historical experience and various factors including
expectations of future events that are considered to be reasonable. Actual results can differ from those estimates based on such definitions. The
following are the accounting estimates and assumptions that have a significant risk of causing changes to the carrying amounts of assets and liabilities
within the next accounting period.
(1) Impairment of goodwill
The Group performs impairment test of goodwill annually or more frequently when there is indication that a CGU may be impaired. Determining
whether goodwill is impaired requires an estimation of the value in use of the CGU to which goodwill has been allocated. The value in use calculation
requires the Group’s management to estimate the future cash flows expected to arise from the CGU and a suitable discount rate in order to calculate
present value.
(2) Fair value of financial instruments
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group uses its judgment
to select a variety of valuation techniques and make assumptions based on market conditions existing at the end of each reporting period.
(3) Impairment loss on financial assets
The Company individually recognizes an impairment loss on financial assets by assessing the occurrence of loss events or it assesses impairment for a
group of financial assets with similar credit risk characteristics. Impairment loss for financial assets is the difference between such assets’ carrying value
and the present value of estimated recoverable cash flows. The estimation of future cash flows requires management judgment.
4. RISK MANAGEMENT
The Group’s operating activity is exposed to various financial risks; hence, the Group is required to analyze and assess the level of complex risks,
determine the level of risks to be accepted, or to manage the risks.
WOORI BANK
The Group’s risk management procedure is set for improvement in the quality of assets held and investments by making a decision about how to avoid
or mitigate risks through the identification of the cause of the potential risk and its scope.
The Group takes the approach to minimize the risk and maximize the profit by managing the risks acceptable to the Group and eliminating the excessive
risks of financial instruments. For this, the following procedures are performed: risk recognition, measurement and assessment, control, and monitoring
and reporting.
The risk is managed by the risk management department based on the Group’s policy. The Risk Management Committee of the Group makes the
decision on the risk strategy such as allocation of risk assets and limit settlement.
(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 credit risk exposure to a permissible degree and to optimize the 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 and 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
104
assessing the obligor’s credit grade, the Group utilizes credit grades derived using statistical methods.
2) Credit line management
In order to manage credit risk limit, the Group establishes the appropriate credit line per obligor, company or industry and monitors obligors’ credit line,
total exposures and loan portfolios when approving the loan.
3) Credit risk mitigation
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 acknowledged by BASEL II standards 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.
4) Maximum exposure to credit risk
The maximum exposures of financial instruments, excluding equity securities, to credit risk are as follows (Korean Won in millions):
Government
Banks
Loans and receivables
Financial assets at
FVTPL
December 31, 2011
December 31, 2010
January 1, 2010
= 12,650,614
= 9,109,902
= 6,741,707
9,396,031
7,560,519
9,585,034
Corporation
86,794,609
82,254,643
83,550,636
Consumer
83,067,778
78,705,811
76,971,957
Sub-total
191,909,032
177,630,875
176,849,334
Short-term debt securities (*1)
7,674,574
7,438,099
8,079,782
Derivative assets
3,360,383
3,469,084
3,941,265
11,034,957
10,907,183
12,021,047
Sub-total
FINANCIAL REVIEW
AFS financial assets
HTM financial assets
Derivative assets
December 31, 2011
December 31, 2010
January 1, 2010
9,142,566
9,599,710
6,938,399
15,400,425
15,920,317
12,527,029
326,413
133,224
107,508
22,516,325
23,451,380
24,510,729
84,708,979
79,895,333
74,519,965
107,225,304
103,346,713
99,030,694
AFS debt securities (*1)
HTM debt securities
Derivative assets
Guarantees
Off-balance
Loan commitments
Sub-total
Total
=
335,038,697
=
317,538,022
=
307,474,011
(*1) Financial assets at FVTPL and AFS financial assets represents debt securities amount only (Notes 7 and 8).
5) Credit risk of loans and receivables
The credit risk of loans and receivables by loan conditions are as follows (Unit: Korean Won in millions):
December 31, 2011
Loans neither overdue nor
impaired
Loans overdue but not
impaired
Impaired loans
Gross loans
Provisions for credit losses
Total, net
Korean treasury and
government agencies
Banks
Business
Consumers
Total
= 12,653,490
=9,405,494
= 86,861,873
=81,848,111
=190,768,968
313
3,492
158,049
1,116,066
1,277,920
-
-
2,693,687
519,856
3,213,543
12,653,803
9,408,986
89,713,609
83,484,033
195,260,431
3,189
12,955
2,919,000
416,255
3,351,399
= 12,650,614
= 9,396,031
=86,794,609
=83,067,778
=191,909,032
December 31, 2010
Korean treasury and
government agencies
Banks
Business
Consumers
Total
Loans neither overdue
nor impaired
= 9,112,178
=7,586,792
=80,115,573
= 77,808,107
=174,622,650
impaired
832
852
146,458
893,817
1,041,959
88
1,084
5,741,155
395,211
6,137,538
9,113,098
7,588,728
86,003,186
79,097,135
181,802,147
3,196
28,209
3,748,543
391,324
4,171,272
= 9,109,902
= 7,560,519
=82,254,643
= 78,705,811
=177,630,875
Impaired loans
Gross loans
Provisions for
Total, net
credit losses
WOORI BANK
January 1, 2010
Loans neither overdue nor
impaired
Korean treasury and
government agencies
Banks
Business
Consumers
Total
= 6,751,129
=9,608,269
= 83,263,072
=75,990,986
= 175,613,456
312
1,690
194,478
990,086
1,186,566
-
-
2,871,941
363,199
3,235,140
6,751,441
9,609,959
86,329,491
77,344,271
180,035,162
9,734
24,925
2,778,855
372,314
3,185,828
= 6,741,707
= 9,585,034
= 83,550,636
=76,971,957
=176,849,334
impaired
Impaired loans
Gross loans
Total, net
a) Credit quality of loans and receivables
The Group manages its loans and receivables that are neither overdue nor impaired through an internal rating system. The value of collateral held is
the collateral-allocated amount used when calculating the respective provisions for credit losses. Segregation of credit quality is as follows (Unit: Korean
106
Won in millions):
<December 31, 2011>
Investment
grade (*1)
Korean
treasury and
government
agencies
Banks
General business
Small and
medium sized
enterprise
Project
financing
Sub-total
Consumers
Total
= 12,649,787
=9,367,466
=36,594,727
=6,147,829
= 3,263,526
=46,006,082
=74,847,192
= 142,870,527
514
25,075
16,175,665
19,905,531
3,437,740
39,518,936
6,826,818
46,371,343
= 12,650,301
= 9,392,541
= 52,770,392
= 26,053,360
=6,701,266
=85,525,018
= 81,674,010
= 189,241,870
= -
= 524,238
= 17,368,373
=19,747,568
= 1,455,022
= 38,570,963
= 64,830,655
= 103,925,856
Project
financing
Sub-total
Consumers
Total
Non-investment
grade (*2)
Total
Corporates
Value of collateral
<December 31, 2010>
Investment
grade (*1)
Non-investment
grade (*2)
Total
Value of collateral
Corporates
Korean
treasury and
government
agencies
Banks
General
business
Small and
medium sized
enterprise
=9,108,483
= 7,554,243
= 28,209,022
= 4,788,600
= 2,783,096
= 35,780,718
= 70,755,792
= 123,199,236
582
4,424
18,488,052
20,016,304
4,659,331
43,163,687
6,897,380
50,066,073
= 9,109,065
= 7,558,667
= 46,697,074
= 24,804,904
= 7,442,427
= 78,944,405
= 77,653,172
= 173,265,309
= 125
= 371,473
= 15,608,051
= 19,231,970
= 1,348,915
= 36,188,936
= 59,004,537
= 95,565,071
FINANCIAL REVIEW
<January 1, 2010>
Investment
grade (*1)
Banks
=6,741,059
General
business
Small and
medium sized
enterprise
Project
financing
Sub-total
Consumers
Total
= 9,582,655
= 27,668,143
= 4,039,973
= 2,655,260
= 34,363,376
= 68,876,901
= 119,563,991
337
693
19,497,070
19,656,877
8,236,877
47,390,824
6,948,264
54,340,118
= 6,741,396
= 9,583,348
= 47,165,213
=23,696,850
= 10,892,137
= 81,754,200
= 75,825,165
= 173,904,109
= 36,500
=273,989
= 16,136,757
= 18,227,777
= 1,336,168
= 35,700,702
= 57,081,271
=93,092,462
Non-investment
grade (*2)
Total
Corporates
Korean
treasury and
government
agencies
Value of
collateral
The Group recognized an provision for credit losses, for loans and receivables neither overdue nor impaired, in the amount of =1,527,098 million,
=1,357,341 million and =1,709,347 million as of December 31, 2011, 2010 and January 1, 2010, respectively, which is deducted from the loans and
receivables that are neither overdue nor impaired.
(*1) Classified from AAA to BBB for corporates, from level 1 to level 6 for consumers by the internal credit rating
(*2) Classified from BBB- to C for corporates, from level 7 to level 10 for consumers by the internal credit rating
b) Aging analysis of loans and receivables
Aging analysis of loans and receivables that are overdue but not impaired are as follows:
The value of collateral held is the collateral-allocated amount used when calculating the respective provisions for credit losses (Unit: Korean Won in
millions).
<December 31, 2010>
Corporates
Korean
treasury and
government
agencies
Banks
=313
30 to 60 days
60 to 90 days
Overdue
Less than 30 days
Total
Value of collateral
General
business
Small &
medium sized
enterprise
Project
financing
Sub-total
Consumers
Total
=3,490
=38,983
=77,174
= 7,708
=123,865
= 892,779
= 1,020,447
-
-
1,636
18,508
-
20,144
98,343
118,487
-
-
812
7,162
-
7,974
59,339
67,313
=313
=3,490
=41,431
= 102,844
=7,708
=151,983
= 1,050,461
=1,206,247
=-
=-
= 4,118
=80,451
=-
= 84,569
= 789,797
=874,366
<December 31, 2010>
Korean
treasury and
government
agencies
Corporates
Banks
General
business
Small &
medium sized
enterprise
Project
financing
Sub-total
Consumers
Total
= 832
= 852
= 39,270
= 53,172
=-
= 92,442
= 749,339
= 843,465
30 to 60 days
-
-
12,935
20,745
-
33,680
64,920
98,600
60 to 90 days
-
-
11,795
2,294
-
14,089
32,966
47,055
Overdue
Less than 30 days
WOORI BANK
<December 31, 2010>
Overdue
Corporates
Korean
treasury and
government
agencies
Banks
= 832
= -
Total
Value of collateral
General
business
Small &
medium sized
enterprise
Project
financing
Sub-total
Consumers
Total
= 852
= 64,000
= 76,211
=-
= 140,211
= 847,225
= 989,120
=-
= 29,012
= 57,039
=-
= 86,051
= 623,956
= 710,007
<January 1, 2010>
Overdue
Korean
treasury and
government
agencies
Less than 30 days
Corporates
Banks
General
business
Small &
medium sized
enterprise
Project
financing
Sub-total
Consumers
Total
108
= 311
= 1,686
= 84,310
= 64,126
=-
= 148,436
= 827,460
= 977,893
30 to 60 days
-
-
10,721
13,537
-
24,258
61,806
86,064
60 to 90 days
-
-
8,243
6,202
-
14,445
46,707
61,152
= 311
= 1,686
= 103,274
= 83,865
=-
= 187,139
= 935,973
= 1,125,109
=-
=-
= 15,855
= 59,891
=-
= 75,746
= 668,977
= 744,723
Total
Value of collateral
The Group recognized an provisions for credit losses, for loans and receivables that are overdue but not impaired, in the amount of =71,673 million,
=52,839 million and =61,457 as of December 31, 2011, 2010 and January 1, 2010, respectively, which is deducted from the loans and receivables
that are overdue but not impaired.
c) Individually impaired loans and receivables
Impaired loans and receivables are as follows (Unit: Korean Won in millions):
The collateral value held is the collateral-allocated amount used when calculating the respective provision for loan loss.
<December 31, 2011>
Impaired loans
Value of collateral
Corporates
Korean
treasury and
government
agencies
Banks
=-
General business
Small &
medium sized
enterprise
Project
financing
Sub-total
Consumers
Total
=-
= 618,177
= 393,998
= 105,433
= 1,117,608
= 343,307
= 1,460,915
-
508,596
485,296
60,000
1,053,892
341,576
1,395,468
<December 31, 2010>
Impaired loans
Value of collateral
Korean
treasury and
government
agencies
Corporates
Banks
General
business
Small & medium sized
enterprise
Project
financing
Sub-total
Consumers
Total
=5
= 1,000
= 1,793,220
= 342,096
= 1,034,711
= 3,170,027
= 205,414
= 3,376,446
-
1,083
1,187,911
379,464
110,374
1,677,749
195,998
1,874,830
FINANCIAL REVIEW
<January 1, 2010>
Impaired loans
Value of collateral
Corporates
Korean
treasury and
government
agencies
Banks
=-
General business
Small &
medium sized
enterprise
Project
financing
Sub-total
Consumers
Total
=-
= 1,129,697
= 320,516
= 159,084
= 1,609,297
= 210,819
= 1,820,116
-
614,356
356,803
25,872
997,031
177,760
1,174,791
The Group recognized an provision for credit losses, for impaired loans and receivables, in the amount of =1,752,628 million, =2,761,092 million and
=1,415,024 as of December 31, 2011, 2010 and January 1, 2010, respectively, which is deducted from the impaired loans and receivables.
6) Credit quality of debt securities
The Group manages debt securities based on the external credit rating. Credit soundness of debt securities on the basis of External Credit Assessment
Institution (“ECAI”)’s rating is as follows (Unit: Korean Won in millions):
December 31, 2011
AAA
AA- ~ AA+
BBB- ~ A+
Total
Held
for trading
Other
at FVTPL
AFS
securities
HTM
securities
Total
= 3,218,329
=-
= 7,539,168
= 14,976,828
= 25,734,325
4,240,423
-
703,079
322,592
5,266,094
215,822
-
900,319
101,005
1,217,146
= 7,674,574
= -
= 9,142,566
= 15,400,425
= 32,217,565
December 31, 2010
AAA
AA- ~ AA+
BBB- ~ A+
Default grade
Total
Held
for trading
Other
at FVTPL
AFS
securities
HTM
securities
Total
= 2,242,260
=-
= 7,103,144
= 14,859,515
= 24,204,919
4,379,299
-
795,345
298,658
5,473,302
816,540
-
1,701,221
762,139
3,279,900
-
-
-
5
5
= 7,438,099
= -
= 9,599,710
= 15,920,317
= 32,958,126
Held
for trading
Other
at FVTPL
AFS
securities
HTM
securities
Total
= 2,726,093
=-
= 4,834,646
= 11,794,330
= 19,355,069
4,780,479
-
336,760
275,805
5,393,044
January 1, 2010
AAA
AA- ~ AA+
BBB- ~ A+
Total
480,783
92,427
1,766,993
456,894
2,797,097
= 7,987,355
= 92,427
= 6,938,399
= 12,527,029
= 27,545,210
(*) Held for trading, other at FVTPL and AFS represents debt securities amount only (Notes 7 and 8).
WOORI BANK
7) Geographical and industrial distribution of credit risk
a) Geographical distribution of credit risk
The geographical distribution of credit risk of financial asset is as follows (Unit: Korean Won in millions):
December 31, 2011
Korean treasury
and government
agencies
Loans and
receivables
Banks
Korea
USA
UK
Japan
China
Others
Total
= 12,650,614
=-
=-
=-
=-
=-
= 12,650,614
6,474,989
263,478
377,874
10,311
581,424
1,687,955
9,396,031
Corporates
81,072,710
671,006
433,509
492,721
1,696,539
2,428,124
86,794,609
Consumers
82,246,727
778,639
16
32,022
1,844
8,530
83,067,778
182,445,040
1,713,123
811,399
535,054
2,279,807
4,124,609
191,909,032
Sub-total
110
Financial
assets at
FVTPL
Short-term debt
securities
7,674,574
-
-
-
-
-
7,674,574
AFS
financial
assets
AFS debt
securities
9,012,716
81,030
-
-
34,035
14,785
9,142,566
HTM debt
securities
15,297,458
1,967
-
-
1,817
99,183
15,400,425
Guarantee
20,540,769
210,345
108,222
51,742
181,996
1,423,251
22,516,325
Loan
commitments
84,033,075
5,597
-
19,488
450,194
200,625
84,708,979
104,573,844
215,942
108,222
71,230
632,190
1,623,876
107,225,304
= 319,003,632
= 2,012,062
= 919,621
= 606,284
= 2,947,849
= 5,862,453
= 331,351,901
Off-balance
Sub-total
Total
December 31, 2010
Korea
USA
UK
Japan
China
Others
Total
= 9,109,902
=-
=-
=-
=-
=-
= 9,109,902
5,695,968
418,506
152,105
4,505
384,714
904,721
7,560,519
Corporates
76,222,064
788,743
537,516
536,438
1,575,885
2,593,997
82,254,643
Consumers
77,677,166
819,831
6
27,924
3,099
177,785
78,705,811
168,705,100
2,027,080
689,627
568,867
1,963,698
3,676,503
177,630,875
Korean treasury
and government
agencies
Loans and
receivables
Banks
Sub-total
Financial
assets at
FVTPL
Short-term debt
securities
7,438,099
-
-
-
-
-
7,438,099
AFS financial
assets
AFS debt securities
9,465,409
108,872
-
-
15,503
9,926
9,599,710
FINANCIAL REVIEW
December 31, 2010
Off-balance
Korea
USA
UK
Japan
China
Others
Total
HTM debt
securities
15,800,202
2,262
-
-
-
117,853
15,920,317
Guarantee
22,478,664
115,514
68,634
48,057
164,791
575,720
23,451,380
Loan
commitments
79,385,050
56,945
-
1,593
399,126
52,619
79,895,333
Sub-total
Total
101,863,714
172,459
68,634
49,650
563,917
628,339
103,346,713
= 303,272,524
= 2,310,673
= 758,261
= 618,517
= 2,543,118
= 4,432,621
= 313,935,714
January 1, 2010
Korean treasury
and government
agencies
Loans and
receivables
Banks
Corporates
Consumers
Sub-total
Korea
USA
UK
Japan
China
Others
Total
= 6,738,784
=-
=-
=-
=-
= 2,923
= 6,741,707
8,232,638
360,588
91,372
6,381
215,282
678,774
9,585,035
77,325,048
888,586
741,505
496,560
1,314,044
2,784,892
83,550,635
75,991,702
949,142
8
23,548
3,359
4,198
76,971,957
168,288,172
2,198,316
832,885
526,489
1,532,685
3,470,787
176,849,334
Financial
assets at
FVTPL
Short-term debt
securities
8,079,782
-
-
-
-
-
8,079,782
AFS
financial
assets
AFS debt
securities
6,824,593
112,662
-
-
-
1,144
6,938,399
HTM debt
securities
12,405,658
2,809
-
-
-
118,562
12,527,029
Guarantee
23,631,700
100,189
67,104
66,085
106,022
539,629
24,510,729
Loan
commitments
73,972,467
16,539
-
30,622
403,782
96,555
74,519,965
Sub-total
97,604,167
116,728
67,104
96,707
509,804
636,184
99,030,694
= 293,202,372
= 2,430,515
= 899,989
= 623,196
= 2,042,489
= 4,226,677
= 303,425,238
Off-balance
Total
WOORI BANK
b) Industrial distribution of credit risk
The industrial distribution of credit risk of financial asset is as follows (Unit: Korean Won in millions):
December 31, 2011
Korean treasury and
government agencies
Banks
Corporates
Consumers
Sub-total
Service
Manufacturing
Others
Total
= 12,587,950
=-
= 62,664
= 12,650,614
8,234,509
76,700
1,084,822
9,396,031
39,507,016
35,405,638
11,881,955
86,794,609
7,509,934
1,770,533
73,787,311
83,067,778
67,839,409
37,252,871
86,816,752
191,909,032
112
Financial assets at
FVTPL
Short-term debt securities
6,222,279
76,139
1,376,156
7,674,574
AFS securities
AFS debt securities
4,787,167
20,436
4,334,963
9,142,566
HTM securities
HTM debt securities
9,622,920
-
5,777,505
15,400,425
Guarantee
7,705,487
11,629,194
3,181,644
22,516,325
20,040,351
26,061,884
38,606,744
84,708,979
Off-balance
Loan commitments
Sub-total
Total
27,745,838
37,691,078
41,788,388
107,225,304
= 116,217,613
= 75,040,524
= 140,093,764
= 331,351,901
December 31, 2010
Korean treasury and government agencies
Banks
= 8,472,457
=-
= 637,445
= 9,109,902
6,623,787
1,525
935,207
7,560,519
Corporates
39,759,282
31,651,178
10,844,183
82,254,643
Consumers
7,711,877
1,761,400
69,232,534
78,705,811
62,567,403
33,414,103
81,649,369
177,630,875
Sub-total
Financial assets at
FVTPL
4,885,547
69,069
2,483,483
7,438,099
AFS securities
AFS debt securities
4,855,360
20,038
4,724,312
9,599,710
HTM securities
HTM debt securities
10,587,208
-
5,333,109
15,920,317
Off-balance
Total
Guarantee
6,441,565
13,209,338
3,800,477
23,451,380
Loan commitments
17,019,197
26,677,540
36,198,596
79,895,333
Sub-total
23,460,762
39,886,878
39,999,073
103,346,713
= 106,356,280
= 73,390,088
= 134,189,346
= 313,935,714
FINANCIAL REVIEW
January 1, 2010
Korean treasury and
government agencies
= 6,455,102
=-
= 286,605
= 6,741,707
6,885,865
69
2,699,101
9,585,035
Corporates
41,620,308
31,098,082
10,832,245
83,550,635
Consumers
8,134,534
1,876,931
66,960,492
76,971,957
63,095,809
32,975,082
80,778,443
176,849,334
5,252,006
114,577
2,713,199
8,079,782
Banks
Sub-total
Financial assets at
FVTPL
AFS securities
AFS debt securities
2,458,968
57,870
4,421,561
6,938,399
HTM securities
HTM debt securities
10,582,299
5,758
1,938,972
12,527,029
5,857,017
14,689,322
3,964,390
24,510,729
Off-balance
Guarantee
Loan commitments
15,983,277
24,913,962
33,622,726
74,519,965
Sub-total
21,840,294
39,603,284
37,587,116
99,030,694
= 103,229,376
= 72,756,571
= 127,439,291
= 303,425,238
Total
(2) Market risk
Market risk is the possible risk of loss arising from 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 the interest rates, credit spreads, foreign exchange rates and the price
of equity securities.
1) Market risk management
For trading activities, the Group avoids, bears or mitigates risks by identifying the underlying source of risks, measuring parameters and evaluating their
appropriateness.
2) Market risk measurement
The Group uses both standard-based and internal model-based approach to measure market risk. A standard risk measurement model is used to
calculate individual market risk of owned capital while internal risk measurement model is used to calculate general capital market risk and it is used
to measure internal risk management measure. The Risk Management Committee allocates owned capital to market risk. The Risk Management
department measures the Value at Risk (“VaR”, maximum losses) limit by department and risk factor and loss limit on a daily basis and reports regularly
to the Risk Management committee.
3) Risk Control
At the beginning of each year, the Risk Management Committee establishes the VaR limit, loss limit and risk capital limit for its management purposes.
Limit by investment desk/dealer is independently managed to the extent of the limit given to each departments of the Group and the limit by investment
and loss cut is managed by risk management personnel with the department.
WOORI BANK
4) Sensitivity analysis of market risk
The Group performs sensitivity analysis for both trading and non-trading activities. For trading activities, the Group uses a VaR model which uses
certain assumptions of possible fluctuations in market condition and, by conducting simulations of gains and losses, under which the model estimates
the maximum losses that may occur. A VaR model predicts based on statistics of possible losses on the portfolio at a certain period currently or in the
future. It indicates the maximum expected loss with at least 99% credibility. In short, there exists a one percent possibility that the actual loss might
exceed the predicted loss generated from the VaR's calculation. The actual results are periodically monitored to examine the validity of the assumptions
and variables and factors that are used in VaR's calculations. However, this approach cannot prevent the loss when the market fluctuation exceeds
expectation.
For non-trading activities, interest rate Earning at Risk (“EaR”) and interest rate VaR, which is based on the simulations of the Net Interest Income (“NII”)
and Net Present Value (“NPV”), are calculated for the Bank and the risk for all other subsidiaries is measured and managed by the interest rate VaR
calculations based on a ‘Gap’ in interest rate per Bank for International Settlements (“BIS”) Framework. NII is a profit based indicator for displaying the
profit changes in short term due to the short term interest change. It will be estimated as subtracting the interest expenses of liabilities from the interest
income of the assets. NPV is an indicator for displaying the risk in economical view according to the unfavorable changes related to the interest rate. It
will be estimated as subtracting the present value of liabilities from the present value of the asset. EaR shows the maximum profit-loss amount, which
indicates the maximum deduction amount caused by the unfavorable changes related to the interest rate of certain period of time. Interest rate VaR
114
shows the potential maximum loss generated by the unfavorable changes during certain period of present or future.
a) Trading activities
The minimum, maximum and average VaR for the year ended December 31, 2011 and 2010, respectively, and the VaR as of December 31, 2011 and
2010, respectively, are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2010
For the year ended
December 31, 2011
Minimum
As of
December
31, 2010
Average
Maximum
Minimum
= 2,878
= 3,770
= 12,321
= 25,873
= 3,172
5,608
1,666
1,518
3,455
10,775
1,073
6,378
1,307
3,672
8,859
23,970
2,260
As of
December
31, 2011
Average
Maximum
= 5,066
= 5,113
= 7,471
Stock price
2,978
3,947
Foreign currencies
2,745
3,332
Risk factor
Interest rate
Commodity
Total risk
3
134
773
2
13
728
2,733
9
4,402
5,724
9,304
3,331
3,520
6,478
19,615
2,817
b) Non-trading activities
The NII and NPV are calculated, respectively, by using the simulation method for the Group and scenario responding to the interest rate (“IR”) changes
are as follows (Korean Won in millions):
December 31, 2010
December 31, 2011
Name of scenario
Base case
January 1, 2010
NII
NPV
NII
NPV
NII
NPV
= 4,847,266
= 9,959,770
= 4,715,011
= 13,190,185
= 4,638,545
= 8,092,752
Base case (Prepay)
4,854,961
9,888,303
4,713,325
13,285,006
4,641,567
8,160,631
IR 100bp up
5,059,011
10,024,446
4,955,261
13,732,678
4,932,985
8,775,274
FINANCIAL REVIEW
December 31, 2010
December 31, 2011
Name of scenario
NII
January 1, 2010
NPV
NII
NPV
NII
NPV
IR 100bp down
4,591,374
9,919,369
4,440,066
12,599,940
4,328,327
7,356,131
IR 200bp up
5,270,755
10,109,386
5,195,521
14,236,469
5,227,779
9,412,908
IR 200bp down
4,250,407
9,907,990
4,074,044
11,951,146
3,921,553
6,556,123
IR 300bp up
5,482,498
10,210,892
5,435,778
14,708,128
5,522,205
10,011,974
IR 300bp down
3,819,860
9,933,636
3,493,958
11,230,159
3,255,417
5,667,912
The interest rate EaR and the interest rate VaR, calculated, respectively, based on the BIS Framework of the Group excluding the Bank are as follows
(Korean Won in millions):
December 31, 2010
December 31, 2011
January 1, 2010
EaR
VaR
EaR
VaR
EaR
VaR
= 79,381
= 22,429
= 66,163
= 19,443
= 41,777
= 30,100
5) Other market risk
a) Interest rate risk
The Group estimates and manages risks related to changes in interest rate due to the difference in the sensitivity of interest-yielding assets and the
sensitivity of liabilities. Cash flows of principal amounts and interests from interest bearing assets and liabilities by repricing date are as follows (Unit:
Korean Won in millions):
December 31, 2011
Within 3
months
3 to 6
months
6 to 9
months
9 to 12
months
1 to 5
years
5
years ~
Total
= 136,542,977
= 22,852,633
= 3,549,445
= 4,514,552
= 8,981,673
= 5,708,954
=182,150,234
1,799,688
1,261,218
1,713,060
2,759,124
4,883,199
422,508
12,838,797
3,725,852
2,526,982
1,082,027
887,506
8,071,654
96,229
16,390,250
142,068,517
26,640,833
6,344,532
8,161,182
21,936,526
6,227,691
211,379,281
Deposits due to
customers
92,306,919
21,104,315
16,723,313
15,300,748
20,644,013
163,498
166,242,806
Borrowings
12,565,728
2,050,186
490,643
2,195,221
2,122,816
681,905
20,106,499
Asset
Total
Liability
Debentures
Total
4,769,779
1,258,482
1,126,893
2,109,096
11,329,313
1,264,908
21,858,471
= 109,642,426
= 24,412,983
= 18,340,849
= 19,605,065
= 34,096,142
= 2,110,311
=208,207,776
WOORI BANK
December 31, 2010
Within 3
months
3 to 6
months
6 to 9
months
9 to 12
months
1 to 5
years
5
years ~
Total
= 139,617,197
= 16,286,993
= 2,940,288
= 3,362,392
= 7,017,360
= 1,550,453
= 170,774,683
1,490,824
2,166,367
716,838
2,189,157
3,393,975
394,812
10,351,973
3,834,126
244,227
946,452
1,931,415
9,389,487
77,012
16,422,719
144,942,147
18,697,587
4,603,578
7,482,964
19,800,822
2,022,277
197,549,375
Deposits due to
customers
89,477,077
18,759,427
16,981,042
14,767,146
18,927,037
145,878
159,057,607
Borrowings
11,799,149
2,237,474
468,668
1,212,670
3,169,692
716,054
19,603,707
Debentures
3,486,354
1,160,386
975,496
1,911,680
13,934,944
3,545,361
25,014,221
= 104,762,580
= 22,157,287
= 18,425,206
= 17,891,496
= 36,031,673
= 4,407,293
= 203,675,535
Asset
Total
Liability
Total
January 1, 2010
3 to 6
months
6 to 9
months
9 to 12
months
1 to 5
years
5
years ~
Total
= 152,265,394
= 11,564,449
= 3,608,939
= 3,003,975
= 8,154,664
= 1,531,267
=180,128,688
610,065
526,524
665,822
1,102,297
3,950,741
439,792
7,295,241
2,869,598
1,128,660
741,322
2,378,775
5,702,059
67,957
12,915,371
155,772,057
13,219,633
5,016,083
6,485,047
17,807,464
2,039,016
200,339,300
Deposits due to
customers
90,729,160
15,003,244
14,015,935
14,648,702
17,251,437
195,505
151,843,983
Borrowings
14,140,641
1,744,070
475,926
890,510
3,878,257
774,686
21,904,090
Debentures
3,653,381
2,938,866
2,450,880
3,253,328
10,234,597
2,403,574
24,934,626
= 108,523,182
= 19,686,180
= 16,942,741
= 18,792,540
= 31,364,291
= 3,373,765
=198,682,699
116
Within 3
months
Asset
Total
Liability
Total
Repricing date is defined as the date which interest rates of operational funds and procuring funds can be re-adjusted before the expiration date.
Analysis based on interest expirations is used to analyze assets and liabilities that cause interest margins and interest costs. However, loans and
receivable account that are not expected to have interest cash flow due to impairment and other circumstances are excluded from the analysis.
b) Currency risk
Currency risk occurs from the financial instrument denominated in a foreign currency other than the functional currencies. 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):
FINANCIAL REVIEW
December 31, 2011
EUR
Others
Total
Foreign
currency
Won
equivalent
USD
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Won
equivalent
Won
equivalent
19,824
= 22,863,396
256,803
= 3,813,929
9,741
= 1,777,788
816
= 1,219,539
= 2,126,750
= 31,801,402
Financial assets
at FVTPL
347
400,498
233
3,467
-
-
1
1,375
-
405,340
AFS financial
assets
199
229,969
1,102
16,362
186
33,937
15
22,050
36,247
338,565
HTM financial
assets
21
23,867
-
-
10
1,812
-
-
77,288
102,967
20,391
= 23,517,730
258,138
= 3,833,758
9,937
= 1,813,537
832
= 1,242,964
= 2,240,285
= 32,648,274
424
= 489,411
1,766
= 26,226
-
=-
2
= 2,667
=-
= 518,304
Deposits
6,090
7,023,436
62,491
928,091
8,788
1,603,813
223
333,608
482,261
10,371,209
Borrowings
7,428
8,567,946
118,747
1,763,584
4
766
851
1,271,226
344,539
11,948,061
Debentures
3,809
4,392,959
50,019
742,856
-
-
-
-
274,503
5,410,318
Other financial
liabilities
2,440
2,814,563
22,429
333,100
128
23,428
370
552,203
193,964
3,917,258
Total
20,191
= 23,288,315
255,452
= 3,793,857
8,920
= 1,628,007
1,446
= 2,159,704
= 1,295,267
= 32,165,150
Off-balance
sheet items
12,034
= 13,878,337
31,268
= 464,379
123
= 22,451
641
= 958,219
= 595,220
= 15,918,606
Loans and
receivables
Asset
Total
Financial
liabilities at
FVTPL
Liability
JPY
CNY
December 31, 2010
EUR
Others
Total
Foreign
currency
Won
equivalent
USD
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Won
equivalent
Won
equivalent
15,402
= 17,540,903
252,852
= 3,532,546
9,520
= 1,642,217
883
= 1,336,928
= 1,775,410
= 25,828,004
Financial
assets at
FVTPL
378
430,778
403
5,629
-
-
-
322
-
436,729
AFS financial
assets
209
247,037
2,030
22,456
90
15,551
13
22,059
49,125
356,228
HTM financial
assets
26
29,612
-
-
-
-
-
-
113,925
143,537
16,015
= 18,248,330
255,285
= 3,560,631
9,610
= 1,657,768
896
= 1,359,309
= 1,938,460
= 26,764,498
Loans and
receivables
Asset
Total
JPY
CNY
WOORI BANK
December 31, 2010
USD
Liability
EUR
Others
Total
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Won
equivalent
Won
equivalent
Financial
liabilities at
FVTPL
1,518
= 1,726,729
1,732
= 24,195
-
=-
1
= 1,024
=-
= 1,751,948
Deposits
5,158
5,874,575
45,357
633,670
7,200
1,241,963
156
235,560
447,999
8,433,767
Borrowings
5,735
6,530,943
117,647
1,643,623
972
167,680
650
983,349
403,383
9,728,978
Debentures
3,556
4,050,173
10,000
139,708
-
-
-
-
258,545
4,448,426
795
905,742
11,012
153,851
116
20,046
25
37,874
35,495
1,153,008
Total
16,762
= 19,088,162
185,748
= 2,595,047
8,288
= 1,429,689
832
= 1,257,807
= 1,145,422
= 25,516,127
Off-balance
sheet items
11,537
= 13,139,121
34,304
= 479,258
506
= 87,291
696
= 1,053,871
= 563,243
= 15,322,784
Other financial liabilities
JPY
CNY
118
January 1, 2010
USD
EUR
Others
Total
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Foreign
currency
Won
equivalent
Won
equivalent
Won
equivalent
16,170
= 18,879,625
= 3,231,571
66
= 11,354
857
= 1,434,938
= 2,368,389
= 25,925,877
Financial assets
at FVTPL
385
449,407
303
3,820
-
-
1
1,810
-
455,037
AFS financial
assets
423
493,750
4,690
59,225
-
-
58
97,649
41,620
692,244
HTM financial
assets
66
77,455
-
-
-
-
-
-
120,223
197,678
Total
Liability
CNY
Foreign
currency
Loans and
receivables
Asset
JPY
17,044
= 19,900,237
= 3,294,616
66
= 11,354
916
= 1,534,397
= 2,530,232
= 27,270,836
Financial liabilities at FVTPL
1,925
= 2,247,206
1,249
= 15,776
-
=-
2
= 3,869
=-
= 2,266,851
Deposits
6,215
7,256,063
55,032
694,955
-
8
351
587,278
1,208,371
9,746,675
Borrowings
7,045
8,225,924
57,132
721,476
-
-
201
336,939
275,621
9,559,960
Debentures
2,958
3,453,639
10,000
126,282
-
-
300
502,284
180,629
4,262,834
700
817,293
3,272
41,322
-
-
70
117,854
69,440
1,045,909
18,843
= 22,000,125
= 1,599,811
-
=8
924
= 1,548,224
= 1,734,061
= 26,882,229
11,590
=
13,532,836
40,644
= 513,265
-
=-
819
= 1,371,953
= 620,800
= 16,038,854
Other financial
liabilities
Total
Off-balance
sheet items
FINANCIAL REVIEW
(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 shortage as a result of mismatching the use of funds (assets) and sources of funds (liabilities) or
unexpected cash outflows.
Assets and liabilities are grouped by account under Asset Liability Management (“ALM”) in accordance with the characteristics of the account. The
Group manages liquidity risk by identifying maturity gap and 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) The Group’s maturity analysis of non-derivative financial liabilities, cash flows of principals and interests, by remaining
contractual maturities are as follows (Unit: Korean Won in millions):
December 31, 2011
Within 3
months
3 to 6
months
6 to 9
months
9 to 12
months
1 to 5
years
5
years ~
Total
= 5,835
= 5,898
= 5,900
= 4,330
= 210,341
= 191,757
= 424,061
Deposits due to
customers
96,425,171
17,482,780
15,025,139
33,330,322
4,871,864
1,490,642
168,625,918
Borrowings
11,594,987
2,305,798
794,432
2,489,316
2,748,473
678,892
20,611,898
Debentures
3,173,674
1,252,085
1,056,362
2,177,705
12,693,036
1,906,321
22,259,183
10,791,636
23,458
-
-
-
3,963,631
14,778,725
= 121,991,303
= 21,070,019
= 16,881,833
= 38,001,673
= 20,523,714
= 8,231,243
= 226,699,785
Within 3
months
3 to 6
months
6 to 9
months
9 to 12
months
1 to 5
years
5
years ~
Total
= 6,952
= 38,770
= 7,745
= 38,083
= 499,475
= 1,375,818
= 1,966,843
Deposits due to
customers
86,725,216
15,543,784
15,828,790
34,299,954
6,096,054
1,585,392
160,079,190
Borrowings
10,302,555
2,863,086
610,201
1,485,583
3,700,201
713,096
19,674,722
Debentures
796,579
1,163,516
1,590,615
2,030,848
15,034,443
6,449,049
27,065,050
4,054,238
14,342
-
-
73,371
2,538,276
6,680,227
= 101,885,540
= 19,623,498
= 18,037,351
= 37,854,468
= 25,403,544
= 12,661,631
= 215,466,032
Financial liabilities at
FVTPL
Total
December 31, 2010
FVTPL
Total
WOORI BANK
January 1, 2010
Within 3
months
3 to 6
months
6 to 9
months
9 to 12
months
1 to 5
years
5
years ~
Total
= 11,123
= 43,379
= 82,028
= 42,644
= 444,563
= 1,762,125
= 2,385,862
Deposits due to customers
78,737,607
12,613,822
14,947,508
39,090,936
6,091,260
1,512,525
152,993,658
Borrowings
12,565,916
2,211,515
877,941
972,475
4,610,501
769,063
22,007,411
Debentures
2,039,926
3,203,710
2,405,116
3,725,855
10,525,756
2,324,423
24,224,786
3,428,188
-
58,880
-
-
3,066,059
6,553,127
= 96,782,760
= 18,072,426
= 18,371,473
= 43,831,910
= 21,672,080
= 9,434,195
= 208,164,844
FVTPL
Total
Above maturity analysis includes both principal and interest cash flows by contractual maturities.
b) Cash flows of principals and interests by expected maturities of non-derivative financial liabilities are as follows (Unit: Korean
Won in millions):
120
December 31, 2011
Within 3
months
3 to 6
months
6 to 9
months
9 to 12
months
1 to 5
years
5
years ~
Total
= 5,835
= 5,898
= 5,900
= 4,330
= 210,341
= 191,757
= 424,061
108,096,621
22,148,175
15,420,426
17,086,761
4,023,178
1,132,860
167,908,021
Borrowings
11,594,987
2,305,798
794,432
2,489,316
2,748,473
678,892
20,611,898
Debentures
3,173,674
1,252,085
1,056,362
2,177,705
12,693,036
1,906,321
22,259,183
10,791,636
23,458
-
-
-
3,963,631
14,778,725
= 133,662,753
= 25,735,414
= 17,277,120
= 21,758,112
= 19,675,028
= 7,873,461
= 225,981,888
FVTPL
Total
December 31, 2010
FVTPL
Borrowings
Debentures
Total
Within 3
months
3 to 6
months
6 to 9
months
9 to 12
months
1 to 5
years
5
years ~
Total
= 6,952
= 38,770
= 7,745
= 38,083
= 499,475
= 1,375,818
= 1,966,843
106,679,712
20,474,148
13,610,871
13,011,624
4,335,968
1,202,551
159,314,874
10,302,555
2,863,086
610,201
1,485,583
3,700,201
713,096
19,674,722
796,579
1,163,516
1,590,615
2,030,848
15,034,443
6,449,049
27,065,050
4,054,238
14,342
-
-
73,371
2,538,276
6,680,227
=
121,840,036
= 24,553,862
= 15,819,432
= 16,566,138
= 23,643,458
= 12,278,790
=
214,701,716
FINANCIAL REVIEW
January 1, 2010
Within 3
months
3 to 6
months
6 to 9
months
9 to 12
months
1 to 5
years
5
years ~
Total
= 11,123
= 43,379
= 82,028
= 42,644
= 444,563
= 1,762,125
= 2,385,862
100,593,806
17,976,464
13,165,844
14,966,754
4,252,223
1,215,905
152,170,996
Borrowings
12,565,916
2,211,515
877,941
972,475
4,610,501
769,063
22,007,411
Debentures
2,039,926
3,203,710
2,405,116
3,725,855
10,525,756
2,324,423
24,224,786
3,428,188
-
58,880
-
-
3,066,059
6,553,127
=
118,638,959
= 23,435,068
= 16,589,809
= 19,707,728
= 19,833,043
= 9,137,575
=
207,342,182
FVTPL
Total
Above maturity analysis includes both principal and interest cash flows by expected maturities.
c) Maturity analysis of derivative financial liabilities is as follows (Unit: Korean Won in millions):
December 31, 2011
Within 3
months
3 to 6
months
6 to 9
months
9 to 12
months
1 to 5
years
5
years ~
Total
= 3,185,021
= (525)
= 6,209
= (678)
= 16,206
=-
= 3,206,233
December 31, 2010
3,208,777
(468)
3,854
(802)
23,500
3,411
3,238,272
January 1, 2010
4,056,715
(5,674)
5,803
(2,264)
56,234
13,297
4,124,111
Derivatives held for trading are not managed by contractual maturity as they are held for trading or redemption before maturity. Therefore, they are
included in the ‘within 3 months’. Cash flows of derivatives instrument held for fair value hedging or cash flow hedging are estimated by cash inflows
and outflows.
d) Maturity analysis of off-balance sheet accounts is as follows (Unit: Korean Won in millions):
Guarantees and loan commitments like guarantees for debenture issuance and guarantees for loans which are financial guarantee provided by the
Group has expiration dates. However, in case of request of transaction counterparty, the Group will carry out a payment immediately. Details of offbalance sheet items are as follows (Unit: Korea Won in millions):
Guarantees
December 31, 2011
December 31, 2010
January 1, 2010
= 22,516,325
= 23,451,380
= 24,510,729
84,708,979
79,895,333
74,519,965
Loan commitments
The above amounts are stated at gross of related provisions.
(4) Operational risk
The Group defines operational risk as the 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
WOORI BANK
The Group has been running the operational risk management system under Basel II . The Group developed advanced measurement approached
to quantify required capital for operational risk. This system is used for reinforcement in foreign competitions, reducing the amount of risk capitals,
managing the risk, and precaution for any unexpected occasions. This system has been tested by the independent third party, and this system approved
by the Financial Supervisory.
2) Operational risk measurement
To quantify required capital for operational risk, the Group applies advanced measurement approach using of internal loss data, business environment
and internal control factors and scenario analysis. For the risk management over subsidiaries of the Group, the Group uses the basic indicator approach.
(5) Capital management
The Group follows the capital adequacy standard suggested by the Financial Supervisory. This standard is based on Basel II from 2004, which has been
adopted in Korea since 2008. In accordance with banking regulations, the Group is required to maintain a minimum 8% of capital adequacy ratio with
high capital risk.
According to the Banking supervision by laws enforcement, the entity's capital can be clarified into two kinds.
122
– Tier 1 capital (Basic capital): Basic capital consists of the capital, capital surplus, retained earnings, the entity's non-controlling interest (hybrid security
included), exchange differences in other accumulated comprehensive incomes.
– Tier 2 capital (Supplement capital): Supplement capital includes revaluation reserves, gains on valuation of available for sale securities, 45% of share
of other comprehensive income on investment in associates, 70% of the existing revaluation gain of fixed assets of the retained earnings, subordinated
term debt more than 5 years, the provision for credit losses under banking supervision regulations.
Risk Weighted Assets is the Group’s assets weighted according to credit risk; errors caused by internal process problems, external occasions and danger
of the change in market. The entity calculates risk weighted assets to obey the banking supervisory's detailed enforcement and BIS percentage to
predict the equity capital by adding the basic and complementary capital total.
The Group makes measures to cope with certain level of loss caused by accumulating the equity capital that is exposed to the risk. The Group is testing
and using not only the BIS percentage, which is the minimum regulation standard, but also it is using internal standards. An evaluation on capital
adequacy is performed to calculate the gap between available capital and economic capital. In addition, analysis on emergent incidents and additional
capital requirements are added and applied. The capital adequacy is evaluated for both supervisory and internal management purpose in accordance
with the comparison of unexpected loss and the available capital. If the test result from internal capital adequacy shows lack of available capital, the
Group is committed to expanding the equity capital and reinforcement of the risk management.
Details of the Group’s capital adequacy ratio as of December 31, 2011 based on K-IFRS are as follows (Unit: Korean Won in millions):
December 31, 2011
Basic capital
Supplement capital
= 15,061,543
4,268,852
19,330,395
Risk weighted assets
Capital adequacy ratio
140,290,486
13.78%
Details of the Group’s capital adequacy ratio as of December 31, 2010 and January 1, 2010 based on K-GAAP are as follows (Unit: Korean Won in
FINANCIAL REVIEW
millions):
December 31, 2010
January 1, 2010
= 15,051,571
= 14,211,015
4,286,821
5,452,417
Basic capital
Supplement capital
Risk weighted assets
19,338,392
19,663,432
131,997,531
136,662,418
14.65%
14.39%
Capital adequacy ratio
5. OPERATING SEGMENTS
The Group’s reporting segment comprises consumer banking, corporate banking, investment banking, capital market, and headquarters and others.
The reportable segments are classified based on the target customer for whom the service is being provided.
The details of operating segment are as follows (Unit: Korean Won in millions):
December 31, 2011
Assets
Consumer
banking
Corporate
banking
Investment
banking
Capital
market
Headquarters
and others
Sub-total
Inter-segment
transaction
Total
= 66,573,578
= 92,128,495
= 8,372,199
= 21,961,041
= 57,313,632
= 246,348,945
= (3,876,783)
= 242,472,162
66,410,452
99,911,272
94,973
13,594,388
45,224,498
225,235,583
(889,561)
224,346,022
Consumer
banking
Corporate
banking
Investment
banking
Capital
market
Headquarters
and others
Sub-total
Inter-segment
transaction
Total
= 61,978,537
= 88,524,168
= 8,271,104
= 18,549,009
= 53,005,239
= 230,328,057
= (1,773,194)
= 228,554,863
61,965,242
99,554,678
106,981
10,508,096
39,728,096
211,863,093
(795,161)
211,067,932
Liabilities
December 31, 2010
Assets
Liabilities
January 1, 2010
Assets
Consumer
banking
Corporate
banking
Investment
banking
Capital
market
Headquarters
and others
Sub-total
Inter-segment
transaction
Total
= 60,511,217
= 92,126,807
= 8,917,312
= 17,883,261
= 50,155,752
= 229,594,349
= (2,667,008)
= 226,927,341
57,397,078
98,976,060
332,950
11,337,944
44,946,173
212,990,205
(2,983,231)
210,006,974
Liabilities
The components of operating segment are as follows (Unit: Korean Won in millions):
For the year ended December 31, 2011
Consumer
banking
Corporate
banking
Investment
banking
Capital
market
Headquarters
and others
Sub-total
Inter-segment
transaction
Total
= 4,049,332
= 5,203,936
= 344,881
= 505,272
= 1,584,108
= 11,687,529
= (28,271)
= 11,659,258
Net interest income:
Interest income
WOORI BANK
Interest expense
Inter-segment
Consumer
banking
Corporate
banking
Investment
banking
Capital
market
Headquarters
and others
Sub-total
Inter-segment
transaction
Total
(1,810,688)
(3,147,929)
(11,136)
(180,297)
(1,413,599)
(6,563,649)
629,987
(5,933,662)
63,958
692,552
(308,245)
(316,579)
(119,634)
12,052
(12,052)
-
2,302,602
2,748,559
25,500
8,396
50,875
5,135,932
589,664
5,725,596
1,669,152
2,945,134
487,772
6,316,802
5,397,679
16,816,539
(205,572)
16,610,967
(1,420,772)
(2,528,459)
(480,901)
(6,205,221)
(4,556,095)
(15,191,448)
54,272
(15,137,176)
12,788
34,909
(33,698)
5,475
(19,186)
288
(288)
-
261,168
451,584
(26,827)
117,056
822,398
1,625,379
(151,588)
1,473,791
(1,600,340)
(749,681)
(20,086)
(20,311)
(58,904)
(2,449,322)
(103,471)
(2,552,793)
(146,632)
(707,900)
(366,505)
(6,159)
(565,486)
(1,792,682)
(170,828)
(1,963,510)
Non-interest income:
Non-interest income
Non-interest expense
Inter-segment
Other expense:
Administrative expense
Provisions
124
Operating income (loss)
(1,746,972)
(1,457,581)
(386,591)
(26,470)
(624,390)
(4,242,004)
(274,299)
(4,516,303)
= 816,798
= 1,742,562
= (387,918)
= 98,982
= 248,883
= 2,519,307
= 163,777
= 2,683,084
Consumer
banking
Corporate
banking
Investment
banking
Capital
market
Headquarters
and others
Sub-total
Inter-segment
transaction
Total
Interest income
= 3,686,665
= 5,149,892
= 361,981
= 451,296
= 1,470,473
= 11,120,307
= (139,259)
= 10,981,048
Interest expense
(1,684,539)
(3,070,440)
(13,863)
(127,161)
(1,582,582)
(6,478,585)
524,299
(5,954,286)
131,896
815,534
(308,449)
(253,044)
(398,747)
(12,810)
12,810
-
2,134,022
2,894,986
39,669
71,091
(510,856)
4,628,912
397,850
5,026,762
Non-interest income
1,356,549
2,258,624
680,554
6,694,296
4,858,524
15,848,547
399,958
16,248,505
Non-interest expense
(1,108,095)
(1,905,938)
(494,915)
(6,573,805)
(4,094,469)
(14,177,222)
(776,925)
(14,954,147)
Net interest income:
Inter-segment
Non-interest income:
Inter-segment
11,921
31,967
(28,758)
3,309
(18,641)
(202)
202
-
260,375
384,653
156,881
123,800
745,414
1,671,123
(376,765)
1,294,358
Other expense:
Administrative expense
Provisions
Operating income
(loss)
(1,506,939)
(701,187)
(16,551)
(15,889)
(22,125)
(2,262,691)
(814)
(2,263,505)
(125,212)
(1,338,427)
(156,361)
(90,706)
(783,349)
(2,494,055)
(65,931)
(2,559,986)
(1,632,151)
(2,039,614)
(172,912)
(106,595)
(805,474)
(4,756,746)
(66,745)
(4,823,491)
= 762,246
= 1,240,025
= 23,638
= 88,296
= (570,916)
= 1,543,289
= (45,660)
= 1,497,629
Information on financial products and services
FINANCIAL REVIEW
The financial products of the Group are classified as interest, non-interest and other goods; however, since this classification has already been reflected
in the component of the operating segments above, revenue from external customers is not separately disclosed.
Information on geographical areas
Details of the geographical revenues from external customers and non-current assets are as follows (Unit: Korean Won in millions);
Revenues from external customers
Non-current assets
For the year ended
December 31, 2011
For the year ended
December 31, 2010
December 31,
2011
December 31,
2010
January 1,
2010
Domestic
= 27,435,342
= 26,058,455
= 3,188,702
= 3,016,128
= 3,038,050
Overseas
834,883
1,171,098
30,441
30,727
29,778
= 28,270,225
= 27,229,553
= 3,219,143
= 3,046,855
= 3,067,828
Total
Revenues from external customers consist of interest income and non-interest income. Non-current assets consist of investments in associates,
investment properties, premises and equipment, and intangible assets.
6. CASH AND CASH EQUIVALENTS
(1) Details of cash and cash equivalents are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
= 2,826,040
= 2,435,367
= 3,387,396
Foreign currencies
464,745
387,240
339,089
Demand deposits
1,853,893
874,775
1,178,970
Cash and checks
Fixed deposits
Total
244,589
188,302
134,691
= 5,389,267
= 3,885,684
= 5,040,146
(2) Material transactions not involving cash inflows and outflows are as follows (Unit: Korean Won in millions):
Changes in other comprehensive income of AFS securities
Changes in other comprehensive income of investment in associates
Changes in other comprehensive income of overseas business translation
Changes in other comprehensive income of cash flow hedge
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= (508,346)
= (281,642)
(28,651)
(28,532)
15,539
(16,977)
8,805
1,500
WOORI BANK
7. FINANCIAL ASSETS AT FVTPL
(1) Details of financial assets at FVTPL are as follows (Unit: Korean Won in millions):
Financial assets held for trading
Financial assets designated at FVTPL
Total
December 31, 2011
December 31, 2010
January 1, 2010
= 11,317,845
= 11,104,050
= 12,242,418
-
-
92,427
= 11,317,845
= 11,104,050
= 12,334,845
(2) Details of financial assets held for trading are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
= 588,452
= 1,161,195
= 2,120,628
2,653,822
1,304,500
684,193
3,977
9,515
67,729
282,889
196,567
311,762
Securities in local currency:
Financial institutions
Corporates
126
Equity securities
Beneficiary certificates
Other securities
Loaned securities
-
300
2,036
2,140,121
3,067,997
3,624,250
19,876
409,622
11,261
5,689,137
6,149,696
6,821,859
Interest rate derivatives
1,422,915
1,279,705
1,176,100
Currency derivatives
Sub-total
Derivatives instruments assets:
1,867,416
2,124,661
2,677,650
Equity derivatives
53,706
39,279
47,338
Commodity derivatives
16,346
25,439
40,177
Sub-total
3,360,383
3,469,084
3,941,265
Other financial assets (CMA CP)
2,268,325
1,485,270
1,479,294
= 11,317,845
= 11,104,050
= 12,242,418
Total
(3) As of January 1, 2010, the Group designated finance debentures in foreign currency with embedded derivatives, which
amounted to =81,218 million, as financial assets at FVTPL. Also, the Group has designated other hybrid financial instruments to
eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise from recognizing assets
and liabilities on a different basis.
FINANCIAL REVIEW
8. AFS FINANCIAL ASSETS
(1) Details of AFS financial assets are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
AFS financial assets in local currency:
Debt securities:
= 2,478,265
= 2,262,008
= 2,353,635
3,994,503
4,939,624
2,558,248
Corporates
2,390,187
1,314,616
1,192,905
Others
369
27,927
357,757
8,863,324
8,544,175
6,462,545
Listed stock
877,036
1,546,560
1,560,608
Unlisted stock
747,675
640,966
721,282
Capital contributions
252,002
209,976
224,154
3,511,812
4,463,691
7,041,622
Sub-total
Equity securities:
Sub-total
5,388,525
6,861,193
9,547,666
Sub-total
14,251,849
15,405,368
16,010,211
Debt securities
199,049
207,041
475,854
Equity securities
139,516
149,187
216,389
Sub-total
338,565
356,228
692,243
AFS financial assets in foreign currencies:
Loaned securities
Total
80,193
848,494
-
= 14,670,607
= 16,610,090
= 16,702,454
(2) Details of unrealized gains or losses on AFS financial assets are as follows (Unit: Korean Won in millions):
December 31, 2011
Amortized
cost (or cost)
Gross
unrealized gains
Gross
unrealized losses
Fair
value
= 2,447,068
= 31,632
= (435)
= 2,478,265
3,983,885
11,145
(527)
3,994,503
Corporates
2,384,008
17,271
(11,092)
2,390,187
369
-
-
369
8,815,330
60,048
(12,054)
8,863,324
453,618
424,510
(1,092)
877,036
Debt securities:
Others
Sub-total
Equity securities:
Listed stock
WOORI BANK
December 31, 2011
Unlisted stock
Amortized
cost (or cost)
Gross
unrealized gains
Gross
unrealized losses
Fair
value
597,077
154,592
(3,994)
747,675
252,675
6,219
(6,892)
252,002
3,443,689
70,705
(2,582)
3,511,812
Sub-total
4,747,059
656,026
(14,560)
5,388,525
Sub-total
13,562,389
716,074
(26,614)
14,251,849
Debt securities
199,079
117
(147)
199,049
Equity securities
111,639
32,498
(4,621)
139,516
Sub-total
310,718
32,615
(4,768)
338,565
79,990
203
-
80,193
= 13,953,097
= 748,892
= (31,382)
= 14,670,607
in foreign currencies:
Loaned securities
Total
128
December 31, 2010
Amortized
cost (or cost)
Gross
unrealized gains
Gross
unrealized losses
Fair
value
= 2,228,919
= 33,325
= (236)
= 2,262,008
Debt securities:
4,924,813
15,732
(921)
4,939,624
Corporates
1,297,009
17,885
(278)
1,314,616
27,927
-
-
27,927
8,478,668
66,942
(1,435)
8,544,175
Listed stock
675,838
880,747
(10,025)
1,546,560
Unlisted stock
510,242
134,693
(3,969)
640,966
Others
Sub-total
Equity securities:
226,345
3,977
(20,346)
209,976
4,336,442
129,433
(2,184)
4,463,691
Sub-total
5,748,867
1,148,850
(36,524)
6,861,193
Sub-total
14,227,535
1,215,792
(37,959)
15,405,368
Debt securities
199,386
8,481
(826)
207,041
Equity securities
137,705
21,020
(9,538)
149,187
Sub-total
337,091
29,501
(10,364)
356,228
Loaned securities
845,230
4,992
(1,728)
848,494
= 15,409,856
= 1,250,285
= (50,051)
= 16,610,090
Total
FINANCIAL REVIEW
January 1, 2010
Amortized
cost (or cost)
Gross
unrealized gains
Gross
unrealized losses
Fair
value
= 2,363,561
= 4,083
= (14,009)
= 2,353,635
2,550,631
11,263
(3,646)
2,558,248
Corporates
1,191,870
1,814
(779)
1,192,905
Debt securities:
Others
356,128
2,492
(863)
357,757
6,462,190
19,652
(19,297)
6,462,545
Listed stock
274,902
1,288,181
(2,475)
1,560,608
Unlisted stock
604,622
119,354
(2,694)
721,282
237,431
2,223
(15,500)
224,154
Sub-total
Equity securities:
6,967,750
86,610
(12,738)
7,041,622
Sub-total
8,084,705
1,496,368
(33,407)
9,547,666
Sub-total
14,546,895
1,516,020
(52,704)
16,010,211
Debt securities
480,385
2,802
(7,333)
475,854
Equity securities
188,749
55,396
(27,756)
216,389
Sub-total
669,134
58,198
(35,089)
692,243
= 15,216,029
= 1,574,218
= (87,793)
= 16,702,454
Total
(3) Structured notes of AFS financial assets are as follows (Unit: Korean Won in millions):
December 31, 2011
Face value
Carrying value
= 11,094
=-
Decrease in related stock price
57,665
-
Credit risk of underlying assets
150,865
-
= 219,624
=-
Potential Risk
Structured notes relating to stock:
Convertible bonds
Structured notes relating to
credit risk:
Synthetic CDO (*1)
Cash CDO
Total
December 31, 2010
Face value
Carrying value
= 11,023
=-
Potential Risk
Convertible bonds
WOORI BANK
December 31, 2010
Face value
Carrying value
Potential Risk
credit risk:
Synthetic CDO (*1)
Cash CDO
Total
56,945
-
186,109
13,180
= 254,077
= 13,180
January 1, 2010
Face value
Carrying value
Potential Risk
= 10,194
=-
249,306
81,218
255,017
22,474
= 514,517
= 103,692
Convertible bonds
credit risk:
Synthetic CDO (*1)
130
Cash CDO
Total
(*1) Synthetic CDO is designated as financial asset at FVTPL.
9. HTM FINANCIAL ASSETS
(1) Details of HTM financial assets are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
= 5,131,953
= 4,878,080
= 1,705,947
5,193,115
6,955,940
9,996,894
In local currency:
Corporates
Sub-total
4,972,391
3,942,760
614,012
15,297,459
15,776,780
12,316,853
102,966
143,537
197,678
In foreign currencies:
Debt securities
Loaned securities
Total
-
-
12,498
= 15,400,425
= 15,920,317
= 12,527,029
FINANCIAL REVIEW
(2) Details of unrealized gains or losses on HTM financial assets are as follows (Unit: Korean Won in millions):
December 31, 2011
Amortized
cost (or cost)
Gross
unrealized gains
Gross
unrealized losses
Fair
value
= 5,131,953
= 61,079
= (1,382)
= 5,191,650
5,193,115
11,249
(414)
5,203,950
In local currency:
Corporates
Sub-total
4,972,391
38,215
(4,256)
5,006,350
15,297,459
110,543
(6,052)
15,401,950
102,966
-
-
102,966
= 15,400,425
= 110,543
= (6,052)
= 15,504,916
Debt securities
Total
December 31, 2010
Amortized
cost (or cost)
Gross
unrealized gains
Gross
unrealized losses
Fair
value
= 4,878,080
= 46,778
= (5,641)
= 4,919,217
6,955,940
42,899
(615)
6,998,224
3,942,760
36,827
(2,729)
3,976,858
15,776,780
126,504
(8,985)
15,894,299
In local currency:
Corporates
Sub-total
Debt securities
Total
143,537
-
-
143,537
= 15,920,317
= 126,504
= (8,985)
= 16,037,836
January 1, 2010
Amortized
cost (or cost)
Gross
unrealized gains
Gross
unrealized losses
Fair
value
= 1,705,947
= 4,600
= (13,422)
= 1,697,125
9,996,894
41,410
(18,964)
10,019,340
614,012
4,792
(1,054)
617,750
12,316,853
50,802
(33,440)
12,334,215
197,678
-
-
197,678
12,498
-
-
12,498
= 12,527,029
= 50,802
= (33,440)
= 12,544,391
In local currency:
Corporates
Sub-total
Debt securities
Loaned securities
Total
WOORI BANK
10. LOANS AND RECEIVABLES
(1) Details of loans and receivables are as follows (Unit: Korean Won in millions):
Due from banks
Sub-total
Loans and other receivables
December 31, 2011
December 31, 2010
January 1, 2010
= 11,864,976
= 8,854,017
= 5,355,650
(4,431)
(8,547)
(14,998)
11,860,545
8,845,470
5,340,652
183,395,456
172,948,128
174,679,512
(3,346,969)
(4,162,723)
(3,170,830)
180,048,487
168,785,405
171,508,682
= 191,909,032
= 177,630,875
= 176,849,334
December 31, 2011
December 31, 2010
January 1, 2010
= 10,166,149
= 7,442,596
= 3,833,828
14,972
156,964
546,156
Due from non-depository financial institutions
7,975
29,429
20,760
Due from the Korea Exchange
5,659
2,450
1,817
Others
12,838
87,834
125,838
(2,363)
(1,526)
(5,612)
10,205,230
7,717,747
4,522,787
Due from banks in other bank
618,766
696,553
395,708
Due from banks on time
439,266
152,361
67,020
Others
599,351
285,830
364,523
(2,068)
(7,021)
(9,386)
1,655,315
1,127,723
817,865
= 11,860,545
= 8,845,470
= 5,340,652
Sub-total
Total
(2) Details of due from banks are as follows (Unit: Korean Won in millions):
132
Due from banks in local currency:
Due from the BOK
Due from depository institutions
Sub-total
Due from banks in foreign currencies:
Sub-total
Total
(3) Details of restricted due from banks are as follows (Unit: Korean Won in millions):
Financial institution
December 31, 2011
December 31, 2010
January 1, 2010
Reasons
= 10,166,148
= 7,442,596
= 3,833,828
BOK Act
250
125
125
In local currency:
BOK
Korea Exchange
Deposits for required settlement
charges
FINANCIAL REVIEW
Samsung Securities and others
Others
Sub-total
December 31, 2011
December 31, 2010
January 1, 2010
7,617
77,386
103,429
Reasons
Deposits for futures margin and
others
12
12
12
10,174,027
7,520,119
3,937,394
Pledged commission income
December 31, 2011
December 31, 2010
January 1, 2010
Reasons
= 321,959
= 275,545
= 255,942
BOK Act
68,359
134,113
186,151
Reserve deposits in foreign branches
and others
499,347
430,717
159,030
Reserve deposits and others
66,771
38,616
37,720
513
41,487
228,118
In local currency:
BOK
Bank of Japan and others
Central bank of Indonesia and
other
Central bank of Bangladesh and
others
Macquarie bank and others
Sub-total
Total
956,949
920,478
866,961
= 11,130,976
= 8,440,597
= 4,804,355
Installation deposits of financial
institution and others
Collateral for derivatives transaction
and others
(4) Details of loans and other receivables are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
= 54,609,789
= 55,769,282
= 59,240,337
Facilities and equipment
20,286,327
17,709,083
15,774,843
Sub-total
74,896,116
73,478,365
75,015,180
53,010,634
52,718,344
53,604,142
8,561,428
4,397,441
2,227,410
259,198
172,322
559,086
61,831,260
57,288,107
56,390,638
Working capital
2,721,453
2,137,823
2,134,099
Facilities and equipment
1,411,145
1,138,996
984,610
Loans:
Loans in local currency:
Loans to enterprises:
Working capital
Loans to households:
General purpose
Housing
Other
Sub-total
Loans to public sector and other:
Other
Sub-total
Inter-bank loans
40,032
22,907
41,797
4,172,630
3,299,726
3,160,506
833,057
906,456
1,387,563
WOORI BANK
Sub-total
December 31, 2011
December 31, 2010
January 1, 2010
(2,478,721)
(3,191,583)
(2,052,675)
139,254,342
131,781,071
133,901,212
12,024,482
12,268,802
12,449,807
Loans in foreign currencies:
Loans in foreign currencies
(288,799)
(323,283)
(346,090)
11,735,683
11,945,519
12,103,717
5,086,592
4,033,849
3,735,013
Credit card accounts
4,194,926
3,945,353
3,689,923
(119,480)
(113,172)
(135,137)
Sub-total
4,075,446
3,832,181
3,554,786
5,161,871
4,568,485
4,387,997
Sub-total
Domestic banker’s usance
Credit card accounts:
Bills bought in foreign currencies:
Bills bought in foreign currencies
134
(59,142)
(55,959)
(80,239)
5,102,729
4,512,526
4,307,758
481,071
176,613
454,218
(1,469)
-
-
(43)
-
(55)
Sub-total
479,559
176,613
454,163
Factoring receivables
206,684
58,235
46,571
33,809
296,994
52,995
(23,874)
(117,304)
(42,889)
9,935
179,690
10,106
Privately placed bonds
1,332,594
2,076,686
2,940,569
Present value discount
(20,828)
(2,342)
(4,068)
(16,536)
(73,643)
(58,828)
1,295,230
2,000,701
2,877,673
= 498
= 498
= 578
607,598
531,444
432,626
(120,411)
(124,582)
(161,280)
487,187
406,862
271,346
48,786
148,258
175,157
Sub-total
Bills bought in local currency:
Bills bought in local currency
Provision for bills bought in local currency
Advances for customers:
Advances for customers
Sub-total
Privately placed bonds:
Sub-total
Loans for debt-equity swap
Backed loans:
Backed loans
Sub-total
Other loans:
Other loans
FINANCIAL REVIEW
December 31, 2011
December 31, 2010
January 1, 2010
(5,729)
(22,354)
(38,159)
Sub-total
43,057
125,904
136,998
404
571
754
Others:
Fair value hedging adjustment
Deferred loan origination fees and costs
154,131
70,366
21,644
Sub-total
154,535
70,937
22,398
Call loans
3,099,061
3,319,571
4,508,782
Bonds purchased under resale agreements
Loans-total
592,000
508,397
1,507,023
171,622,538
162,952,554
167,438,124
Other receivables:
Cash Management Account (“CMA”)
20,000
901,612
181,000
6,149,759
2,411,417
2,113,539
Accrued income
973,880
771,901
677,278
Guarantee deposits
965,033
950,887
970,896
Other assets
608,873
998,978
456,038
(57,362)
(61,101)
(72,715)
(234,234)
(140,843)
(255,478)
Accounts receivables
Other receivable-total
Total
8,425,949
5,832,851
4,070,558
= 180,048,487
= 168,785,405
= 171,508,682
(5) Changes in the provisions for credit losses on loans and receivables are as follows (Unit: Korean Won in millions):
Beginning balance
Increase on repurchase of non-performing loans
Recoveries of written-off loans
Charge-off
Foreign exchange translation adjustment
Sales of loans and receivables
Other sales
Ending balance
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= (4,171,270)
= (3,185,828)
(1,710,653)
(2,412,261)
(1,835)
-
(59,620)
(134,087)
2,094,854
1,250,991
(7,215)
(507)
484,076
234,646
20,263
153,158
= (3,351,400)
= (4,171,270)
WOORI BANK
(6) Changes in deferred loan origination fees and costs are as follows (Unit: Korean Won in millions):
December 31, 2011
Deferred loan origination fees
Deferred loan origination costs
Balance at
January 1, 2011
Increase
Decrease
Balance at
December 31, 2011
= (62,619)
= (38,856)
= 52,912
= (48,563)
132,985
144,640
(74,931)
202,694
= 70,366
= 154,131
December 31, 2010
Deferred loan origination fees
Deferred loan origination costs
Balance at
January 1, 2010
Increase
Decrease
Balance at
December 31, 2010
= (88,905)
= (53,152)
= 79,438
= (62,619)
110,549
67,313
(44,877)
= 21,644
132,985
= 70,366
136
11. THE FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The Group classified and discloses fair value of the financial instruments into the following three-level hierarchy:
· Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
· Level 2: fair value measurements are those derived from inputs 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).
· Level 3: fair value measurements are those derived from valuation technique that include inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
(1) Fair value hierarchy of financial assets and liabilities measured at fair value is as follows (Korean Won in millions):
December 31, 2011
Level 1
Level 2
Level 3
Total
= 588,094
= 358
=-
= 588,452
-
2,653,822
-
2,653,822
Financial assets:
Financial assets held for trading:
Korean treasury and government
agencies
Corporates
Equity securities
Other securities
Loaned securities
-
3,977
-
3,977
282,889
-
-
282,889
-
2,140,121
-
2,140,121
19,876
-
-
19,876
FINANCIAL REVIEW
December 31, 2011
Sub-total
Level 1
Level 2
Level 3
Total
890,859
4,798,278
-
5,689,137
-
1,749,328
-
1,749,328
-
1,867,416
-
1,867,416
644
21,871
31,191
53,706
Derivatives instruments assets (*1):
Equity derivatives
-
16,346
-
16,346
644
3,654,961
31,191
3,686,796
-
2,268,325
-
2,268,325
= 891,503
= 10,721,564
= 31,191
= 11,644,258
= 2,468,525
= 9,740
=-
= 2,478,265
-
3,994,503
-
3,994,503
Corporates
-
2,390,187
-
2,390,187
Others
-
369
-
369
2,468,525
6,394,799
-
8,863,324
Sub-total
Total
AFS financial assets:
Debt securities:
Korean treasury and government
agencies
Sub-total
Equity securities:
Listed stock
400,205
-
476,831
877,036
Unlisted stock
-
-
747,675
747,675
-
-
252,002
252,002
-
3,511,812
-
3,511,812
Sub-total
400,205
3,511,812
1,476,508
5,388,525
Sub-total
2,868,730
9,906,611
1,476,508
14,251,849
Debt securities
9,116
189,933
-
199,049
Equity securities
3,449
-
136,067
139,516
Sub-total
12,565
189,933
136,067
338,565
Loaned securities
80,193
-
-
80,193
= 2,961,488
= 10,096,544
= 1,612,575
= 14,670,607
Level 1
Level 2
Level 3
Total
= 8,105
=-
=-
= 8,105
Securities in foreign currencies:
Total
December 31, 2011
Financial liabilities:
Financial liabilities at trading:
Borrowings(Securities in short position)
WOORI BANK
December 31, 2011
Level 1
Level 2
Level 3
Total
-
1,523,437
43
1,523,480
-
1,336,231
-
1,336,231
80
44,466
283,607
328,153
-
16,971
-
16,971
Sub-total
80
2,921,105
283,650
3,204,835
Sub-total
8,185
2,921,105
283,650
3,212,940
Debentures in local currency
-
226,433
-
226,433
Debentures in foreign currencies
-
95,775
-
95,775
Derivatives instruments liabilities(*1):
Equity derivatives
Financial liability designated at FVTPL:
Sub-total
Total
-
322,208
-
322,208
= 8,185
= 3,243,313
= 283,650
= 3,535,148
138
December 31, 2010
Level 1
Level 2
Level 3
Total
= 1,159,917
= 1,278
=-
= 1,161,195
-
1,304,500
-
1,304,500
Corporates
-
9,515
-
9,515
196,567
-
-
196,567
-
300
-
300
Financial assets:
Equity securities
Beneficiary certificate
Other securities
Loaned securities
Sub-total
-
3,067,997
-
3,067,997
409,622
-
-
409,622
1,766,106
4,383,590
-
6,149,696
-
1,412,929
-
1,412,929
-
2,124,661
-
2,124,661
29
34,472
4,778
39,279
Derivatives instruments assets (*1)
Equity derivatives
Sub-total
Total
-
25,439
-
25,439
29
3,597,501
4,778
3,602,308
-
1,485,270
-
1,485,270
= 1,766,135
= 9,466,361
= 4,778
= 11,237,274
FINANCIAL REVIEW
December 31, 2010
Level 1
Level 2
Level 3
Total
Debt securities:
= 2,208,867
= 53,141
=-
= 2,262,008
-
4,939,624
-
4,939,624
Corporates
-
1,314,616
-
1,314,616
Others
-
27,927
-
27,927
2,208,867
6,335,308
-
8,544,175
471,602
-
1,074,958
1,546,560
Unlisted stock
-
-
640,966
640,966
-
-
209,976
209,976
Sub-total
Equity securities:
Listed stock
-
4,463,691
-
4,463,691
Sub-total
471,602
4,463,691
1,925,900
6,861,193
Sub-total
2,680,469
10,798,999
1,925,900
15,405,368
Debt securities
9,926
197,115
-
207,041
Equity securities
10,559
-
138,628
149,187
Sub-total
20,485
197,115
138,628
356,228
Loaned securities
Total
758,475
90,019
-
848,494
= 3,459,429
= 11,086,133
= 2,064,528
= 16,610,090
= 18,901
=-
=-
= 18,901
-
1,405,820
-
1,405,820
Borrowings (Securities in short position)
Derivatives instruments liabilities (*1):
-
1,444,968
-
1,444,968
Equity derivatives
2,829
43,399
311,631
357,859
Credit derivatives
-
-
1,600
1,600
-
25,565
-
25,565
Sub-total
2,829
2,919,752
313,231
3,235,812
Sub-total
21,730
2,919,752
313,231
3,254,713
Financial liability designated at FVTPL:
-
238,736
-
238,736
-
1,270,544
-
1,270,544
Sub-total
Total
-
1,509,280
-
1,509,280
= 21,730
= 4,429,032
= 313,231
= 4,763,993
WOORI BANK
January 1, 2010
Level 1
Level 2
Level 3
Total
= 2,119,352
= 1,276
=-
= 2,120,628
-
684,193
-
684,193
Financial assets:
Corporates
Equity securities
Other securities
-
67,729
-
67,729
311,762
-
-
311,762
-
2,036
-
2,036
-
3,624,250
-
3,624,250
11,261
-
-
11,261
2,442,375
4,379,484
-
6,821,859
-
1,283,608
-
1,283,608
-
2,677,650
-
2,677,650
Equity derivatives
-
45,000
2,338
47,338
-
40,177
-
40,177
Sub-total
-
4,046,435
2,338
4,048,773
Loaned securities
Sub-total
Derivatives instruments assets (*1):
140
-
1,479,294
-
1,479,294
2,442,375
9,905,213
2,338
12,349,926
-
11,209
81,218
92,427
= 2,442,375
= 9,916,422
= 83,556
= 12,442,353
= 2,353,498
= 137
=-
= 2,353,635
-
2,558,248
-
2,558,248
Corporates
-
1,192,905
-
1,192,905
Others
-
357,757
-
357,757
2,353,498
4,109,047
-
6,462,545
190,088
-
1,370,520
1,560,608
-
-
721,282
721,282
Total
Financial asset designated at FVTPL
Financial institution bonds in foreign
currencies
Total
Debt securities:
Sub-total
Equity securities:
Listed stock
Unlisted stock
-
-
224,154
224,154
-
7,041,622
-
7,041,622
Sub-total
190,088
7,041,622
2,315,956
9,547,666
Sub-total
2,543,586
11,150,669
2,315,956
16,010,211
FINANCIAL REVIEW
January 1, 2010
Level 1
Level 2
Level 3
Total
17,243
475,854
-
475,854
-
199,146
216,389
Debt securities
Equity securities
Sub-total
Total
17,243
475,854
199,146
692,243
= 2,560,829
= 11,626,523
= 2,515,102
= 16,702,454
January 1, 2010
Level 1
Level 2
Level 3
Total
= 58,487
=-
=-
= 58,487
Borrowings (Securities in short position)
Derivatives instruments liabilities (*1):
-
1,344,679
-
1,344,679
-
2,040,164
-
2,040,164
Equity derivatives
2,730
140,409
312,834
455,973
Credit derivatives
-
-
203,317
203,317
-
42,481
-
42,481
Sub-total
2,730
3,567,733
516,151
4,086,614
Sub-total
61,217
3,567,733
516,151
4,145,101
-
271,338
-
271,338
-
1,412,703
-
1,412,703
Sub-total
-
1,684,041
-
1,684,041
= 61,217
= 5,251,774
= 516,151
= 5,829,142
Financial liability designated at FVTPL
Total
(*1) Derivatives classified FVTPL are included in derivative assets and liabilities.
Financial assets and liabilities at FVTPL, AFS financial assets, held-for-trading financial assets and liabilities and derivative assets and liabilities are
recognized at fair value. Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties
in an arm’s length transaction.
Financial instruments are measured at fair value using a quoted market price in active markets. If there is no active market for a financial instrument,
the Group establishes the fair value using valuation techniques. Fair value measurement methods for each type of financial instruments are as follows:
Fair value measurement technique
Financial assets and liabilities at FVTPL
Financial assets and liabilities at FVTPL are measured at fair value using a price quoted by a third party,
such as a pricing service or broker, or using valuation techniques.
Held-for-trading financial assets and
liabilities and AFS financial assets
Held-for-trading financial assets and liabilities and AFS financial assets are measured at fair value using a
quoted market price in an active market. If a quoted market price is not available, they are measured by
using a price quoted by a third party, such as a pricing service or broker, or using valuation techniques.
WOORI BANK
Derivative assets and liabilities
Derivatives are measured at fair value using a quoted market price in an active market. If a quoted market
price is not available, they are measured at fair value using valuation techniques.
Loans and receivables are measured by discounting expected future cash flows at a market interest rate of
other loans with similar condition.
HTM financial assets are measured by using a price quoted by a third party, such as a pricing service or
broker.
Deposits due to customers and borrowings
Deposits due to customers and borrowings are measured at fair value using discounting expected future
cash flows at the interest rate of bond issued by the Group. However, if the carrying value is not significantly different from the fair value, it assumes that the carrying value is equal to the fair value.
Debentures
The fair value of issued bond shall be measured at the present value of cash flows using the swap interest
rates. For some financial instruments, the fair value estimated by specialists, the third party, can be used.
(2) Changes in financial assets and liabilities classified into Level 3 are as follows (Unit: Korean Won in millions):
Transfer into/out of level 3 for the year ended December 31, 2011
142
January 1,
2011
Profit or
loss
Other
comprehensive
income
Purchase/
issuance
Settlement
December 31,
2011
= 4,778
= 6,869
=-
= 22,915
= (3,371)
= 31,191
Financial assets:
Financial assets at FVTPL
Equity derivatives
Listed stock in local currency
1,074,958
(43,735)
(27,387)
5,043
(532,048)
476,831
Unlisted stock in local currency
640,966
(891)
32,571
132,919
(57,890)
747,675
Capital contributions in local
currency
209,976
(9,361)
13,322
83,536
(45,471)
252,002
Equity securities in foreign
currencies
138,628
(10,696)
15,498
7,088
(14,451)
136,067
2,064,528
(64,683)
34,004
228,586
(649,860)
1,612,575
-
43
-
-
-
43
Equity derivatives
311,631
(39,525)
-
188,666
(177,165)
283,607
Credit derivatives
1,600
-
-
-
(1,600)
-
= 313,231
= (39,482)
=-
= 188,666
= (178,765)
= 283,650
Sub-total
Derivative liabilities
Sub-total
FINANCIAL REVIEW
Transfer into/out of level 3 for the year ended December 31, 2010
January 1,
2010
Other
comprehensive
income
Profit or
loss
Purchase/
issuance
Settlement
December 31,
2010
Financial assets:
Financial assets at FVTPL:
Equity derivatives
= 2,338
= 586
=-
= 1,854
=-
= 4,778
Financial asset designated at FVTPL
81,218
-
-
-
(81,218)
-
Sub-total
83,556
586
-
1,854
(81,218)
4,778
1,370,520
(33,191)
38,274
112,824
(413,469)
1,074,958
Unlisted stock in local currency
721,282
(427)
17,251
182,569
(279,709)
640,966
Capital contributions in local
currency
224,154
(3,720)
(3,902)
23,558
(30,114)
209,976
Equity securities in foreign
currencies
199,146
(31,601)
6,447
17,602
(52,966)
138,628
2,515,102
(68,939)
58,070
336,553
(776,258)
2,064,528
Equity derivatives
312,834
35,416
-
188,927
(225,546)
311,631
Credit derivatives
203,317
(3,598)
-
-
(198,119)
1,600
= 516,151
= 31,818
=-
= 188,927
= (423,665)
= 313,231
Listed stock in local currency
Sub-total
Derivative liabilities
Sub-total
All recognized gains and losses recognized in profit or loss for the period are related to the holding assets of current and previous period-end. Gain
and loss on the fair value of derivatives and AFS financial assets are included in gain and loss on financial assets at FVTPL and AFS financial assets,
respectively.
(3) Fair value and carrying amount of financial assets and liabilities that are recorded at amortized cost are as follows (Unit: Korean
Won in millions):
December 31, 2011
Fair value
Carrying amount
= 15,504,916
= 15,400,425
193,429,738
191,909,032
164,044,745
164,092,476
Borrowings
19,109,619
19,174,642
Debentures
20,094,790
19,811,813
Financial assets:
WOORI BANK
December 31, 2011
Financial guarantee liabilities
Fair value
Carrying amount
16,347,046
16,346,969
186,638
186,638
December 31, 2010
Fair value
Carrying amount
= 16,037,836
= 15,920,317
178,363,518
177,630,875
Financial assets:
144
157,278,891
157,314,309
Borrowings
18,895,571
18,982,971
Debentures
20,507,210
20,192,427
8,800,536
8,799,937
80,196
80,196
January 1, 2010
Fair value
Carrying amount
= 12,544,391
= 12,527,029
178,407,364
176,849,334
Financial assets:
150,042,881
150,124,550
Borrowings
20,889,127
20,752,335
Debentures
23,736,888
23,476,103
8,428,829
8,429,081
197,860
197,860
FINANCIAL REVIEW
12. INVESTMENTS IN ASSOCIATES
(1) Investments in associates accounted for using the equity method are as follows (Unit: Korean Won in millions):
December 31, 2011
Capital
Main
business
Number of
shares
owned
Percentage
of ownership (%)
Financial
statements
as of
Manufacturing
22,514,800
21.2
December
31
75,400
21.4
December
31
4,704
4.9
December
31
64,508
28.9
December
31
Credit information
144,000
7.2
December
31
Security service
183,870
15.3
December
31
Securities investment
148,000
18.5
December
31
Investee
Location
Kumho Tires Co., Ltd. (*1)
Korea
= 531,800
Woori Blackstone Korea Opportunity
Private Equity Fund 1
U.S.A
351,500
Woori Service Networks Co., Ltd. (*2)
Korea
500
Woori Private Equity Fund
Korea
223,000
Korea Credit Bureau Co., Ltd. (*2)
Korea
10,000
Korea Finance Security Co., Ltd. (*2)
Korea
6,000
United PF 1st Corporate Financial
Stability (*2)
Korea
800,000
LIG E&C Co., Ltd.
Korea
16,300
Construction
755,946
23.2
-
Hyunjin Co., Ltd.
Korea
38,400
Construction
1,667,600
21.7
-
Freight & staffing
December 31, 2010
Number of
shares
owned
Percentage
of ownership (%)
22,514,800
24.2
1,216,800
Woori Blackstone Korea Opportunity Private
Equity Fund 1
Woori Service Networks Co., Ltd. (*2)
Investee
Kumho Tires Co., Ltd. (*1)
BC Card Co., Ltd.
Financial statements
as of
January 1, 2010
Number of
shares
owned
Percentage
of ownership (%)
Financial statements
as of
December 31
-
-
27.7
December 31
1,216,800
27.7
1,300
21.4
December 31
-
-
4,704
4.9
December 31
4,704
4.9
December 31
December 31
-
66,996
28.9
December 31
71,124
29.0
December 31
Korea Credit Bureau Co., Ltd. (*2)
144,000
7.2
December 31
144,000
7.2
December 31
Korea Finance Security Co., Ltd. (*2)
183,870
15.3
December 31
183,870
15.3
December 31
-
-
82,960
5.0
December 31
st
Woori SME 1 ABS Co., Ltd. (*3)
-
(*1) Besides Kumho Tire Co., Ltd., there are no other investments in associates for which there are published price quotations. The market price per share as of December 31, 2011 and
2010 for Kumho Tire Co., Ltd. is = 10,400 and = 13,850, respectively.
(*2) The Group has the significant influence over electing the executive who have the power to participate in the financial and operating policy decisions of Korea Credit Bureau Co.,
Ltd. and United PF 1st Corporate Financial Stability. And the majority of the important transactions of Korea Finance Security and Woori Service Networks Co., Ltd. are mainly arranged
with the Group.
(*3) The Group has the significant influence over electing the executive who have the power to participate in the financial and operating policy decisions.
WOORI BANK
(2) Excluded entity from associates, although it’s percentage of ownership is higher than 20% as of December 31, 2011, is as
follows:
Associate
Vogo 2-2 Special Purpose Entity (*1)
Number of shares owned
Percentage of ownership
24,067,739,877
34.6 %
(*1) The entity is excluded from the associates because substantially the Group has no significant influence over the investee company although it’s percentage of ownership on
common share is higher than 20%.
(3) Changes in carrying value of investments in associates accounted for using the equity method are as follows (Unit: Korean Won
in millions):
Acquisition
cost
January 1,
2011
Gain (loss)
on
valuation
Acquisition
Disposition
and other
Dividends
= 113,204
= 113,204
= (12,952)
=-
=-
BC Card Co., Ltd.
10,876
136,270
-
-
Woori Blackstone Korea
Opportunity Private Equity
Fund 1
75,400
24
2,704
24
104
64,508
Investee
Kumho Tires Co., Inc.
146
Woori Service Networks
Co., Ltd.
Korea Credit Bureau
Co., Ltd.
Korea Finance Security Co.,
Ltd.
United PF 1st Corporate
Financial Stability
Total
Capital
Other
changes
December 31,
2011
=-
= (3,560)
= 14,665
= 111,357
(80,625)
-
(24,788)
(30,857)
-
74,100
-
-
-
-
76,828
6
-
-
(12)
-
-
98
50,637
(15,315)
-
(2,487)
-
(360)
-
32,475
3,600
2,554
458
-
-
-
-
-
3,012
758
3,436
87
-
-
(55)
-
-
3,468
148,000
-
1,099
148,000
-
-
-
-
149,099
= 416,370
= 306,229
= (23,913)
= 222,100
= (83,112)
= (67)
= (28,708)
= (16,192)
= 376,337
December 31,
2010
Investee
Acquisition
cost
January 1,
2010
Gain (loss)
on
valuation
Kumho Tire Co., Inc.
= 113,204
=-
10,876
BC Card Co., Ltd.
Woori Blackstone Korea
Opportunity Private Equity
Fund
Co., Ltd.
Korea Credit Bureau
Co., Ltd.
Acquisition
Disposition
and other
Dividends
Capital
Other
changes
=-
= 113,204
=-
=-
=-
=-
= 113,204
182,965
43,509
-
-
(62,769)
(27,435)
-
1,769)36,270
1,300
-
(1,276)
1,300
-
-
-
24
24
108
(2)
-
-
-
-
-
104
66,996
59,801
(3,499)
977
(5,105)
(434)
(1,103)
-
50,637
3,600
2,215
339
-
-
-
-
-
2,554
FINANCIAL REVIEW
Korea Finance Security Co.,
Ltd.
758
3,337
154
-
-
(55)
-
-
3,436
Woori SME 1st ABS
Co., Ltd.
415
406
(1)
-
(405)
-
6
(6)
-
= 197,173
= 248,832
= 39,224
= 115,481
= (5,510)
= (63,260)
= (28,532)
= (6)
= 306,229
Total
The Group holds 755,946 shares (holding rate: 23.2%) of LIG E&C Co., Ltd., and 1,667,600 shares (holding rate: 21.7%) of Hyunjin Co., Ltd. besides
investments in associated above due to the conversion of investment on written-off loans for the year ended December 31, 2011and there are no
carrying values of the investments as of the conversion date and December 31, 2011, respectively.
(4) Financial information of investments in associates accounted for using the equity method is as follows (Unit: Korean Won in
millions):
December 31, 2011
Investee
Woori Blackstone Korea Opportunity Private Equity
Fund
Woori Service Networks Co., Ltd.
Korea Credit Bureau Co., Ltd.
Korea Finance Security Co., Ltd.
United PF 1st Corporate Financial Stability
Assets
Liabilities
Operating revenue
Net income
(Net loss)
= 4,634,196
= 4,112,068
= 3,946,765
= (39,354)
358,946
750
17,971
12,608
3,541
1,552
11,492
697
1,540,494
1,394,267
376,243
(52,881)
51,484
9,650
41,409
6,380
24,446
1,812
42,790
1,069
836,104
30,162
48,117
5,942
December 31, 2010
Investee
BC Card Co., Ltd.
Woori Blackstone Korea Opportunity Private Equity
Fund
Woori Service Networks Co., Ltd.
Liabilities
Operating revenue
Net income
(Net loss)
= 2,516,861
= 2,016,356
= 2,701,990
= 8,901
1,913,096
1,380,225
3,125,476
29,899
1,679
1,567
61
(5,949)
3,067
977
11,007
883
2,071,949
1,819,739
250,989
(12,255)
44,983
9,507
33,055
4,428
24,493
2,068
41,283
1,847
8,116
18
-
(12)
st
Woori SME 1 ABS Co., Ltd.
4
Assets
WOORI BANK
13. INVESTMENT PROPERTIES
(1) Investment properties are as follows (Unit: Korean Won in millions):
Acquisition cost
Accumulated depreciation
Net carrying value
December 31, 2011
December 31, 2010
January 1, 2010
= 357,263
= 371,231
= 392,905
(7,804)
(4,357)
(942)
= 349,459
= 366,874
= 391,963
(2) Changes in investment properties are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 366,874
= 391,963
(11,780)
-
Depreciation
(3,433)
(3,439)
Impairment loss
(2,212)
(3,911)
Beginning balance
Disposition
148
Transfer to properties for business use
-
(17,524)
Foreign currencies translation adjustment
11
(25)
Others
(1)
(190)
= 349,459
= 366,874
Ending balance
(3) Fair value of investment properties as of December 31, 2011 are as follows (Unit: Korean Won in millions):
Classification
The latest
revaluation date
Woori Finance Sangam Center and other
December 31, 2009
Land
Building
Total
= 252,090
= 139,873
= 391,963
The fair value of investment properties is determined by the assessment performed by Korea Appraisal Board, the independent appraiser who has
proper qualification and experience. In addition, the above appraised value includes the amount of portion used for business by the Group.
(4) For the years ended December 31, 2011 and 2010, the revenue occurred from investment properties is = 16,553 million and =
13,652 million, respectively.
FINANCIAL REVIEW
14. PREMISES AND EQUIPMENT
(1) Details of premises and equipment are as follows (Unit: Korean Won in millions):
December 31, 2011
Acquisition cost
Accumulated
depreciation
Net carrying value
Land
Building
Properties for
business use
Structures in
leased office
Construction
in progress
Total
= 1,519,991
= 736,786
= 362,705
= 287,242
= 2,832
= 2,909,556
-
(44,527)
(275,295)
(243,774)
-
(563,596)
= 1,519,991
= 692,259
= 87,410
= 43,468
= 2,832
= 2,345,960
December 31, 2010
Acquisition cost
Accumulated
depreciation
Net carrying value
Land
Building
Properties for
business use
Structures in
leased office
Construction
in progress
Total
= 1,520,737
= 713,642
= 349,406
= 267,924
= 1,451
= 2,853,160
-
(22,828)
(269,496)
(226,450)
-
(518,774)
= 1,520,737
= 690,814
= 79,910
= 41,474
= 1,451
= 2,334,386
Land
Building
Properties for
business use
Structures in
leased office
Construction
in progress
Total
= 1,510,713
= 699,250
= 351,859
= 252,764
=-
= 2,814,586
-
(2,793)
(250,266)
(202,637)
-
(455,696)
= 1,510,713
= 696,457
= 101,593
= 50,127
=-
= 2,358,890
January 1, 2010
Acquisition cost
Accumulated
depreciation
Net carrying value
(2) Details of changes in premises and equipment are as follows (Unit: Korean Won in millions):
Land
Building
Properties for
business use
Structures in
leased office
Construction in
progress
Total
= 1,520,737
= 690,814
= 79,910
= 41,474
= 1,451
= 2,334,386
15
28
72
183
-
298
Acquisition
3,449
24,776
40,797
21,413
2,812
93,247
Disposition
Beginning balance
Foreign currencies
translation adjustment
(2,728)
(429)
(597)
(534)
-
(4,288)
Depreciation
-
(21,748)
(32,772)
(19,685)
-
(74,205)
Impairment loss
-
(59)
-
-
-
(59)
(1,482)
(1,123)
-
-
-
(2,605)
Classified to assets held
for sale
WOORI BANK
Transfer (*1)
Others
Ending balance
Land
Building
Properties for
business use
Structures in
leased office
Construction in
progress
Total
-
-
-
-
(1,431)
(1,431)
-
-
-
617
-
617
= 1,519,991
= 692,259
= 87,410
= 43,468
= 2,832
= 2,345,960
Land
Building
Properties for
business use
Structures in
leased office
Construction
in progress
Total
= 1,510,713
= 696,457
= 101,593
= 50,127
=-
= 2,358,890
(28)
2
(30)
(212)
-
(268)
Acquisition
19
6,972
28,359
17,435
3,780
56,565
Disposition
(894)
(3,151)
(13,534)
(473)
-
(18,052)
-
(20,264)
(36,478)
(26,129)
-
(82,871)
(113)
(289)
-
-
-
(402)
Classified from assets
held for sale
586
1,688
-
-
-
2,274
Transfer
414
1,915
-
-
(2,329)
-
Beginning balance
Foreign currencies
translation adjustment
150
Depreciation
Impairment loss
Others
Ending balance
10,040
7,484
-
726
-
18,250
= 1,520,737
= 690,814
= 79,910
= 41,474
= 1,451
= 2,334,386
(*1) = 1,431 million is transferred to other intangible assets.
15. INTANGIBLE ASSETS
(1) Details of intangible assets are as follows (Unit: Korean Won in millions):
December 31, 2011
Acquisition cost
Accumulated
depreciation
Net carrying value
Software
Industrial
property
rights
Core
deposit
Others
Membership
deposit
Total
= 14,590
= 766
= 239
= 3,395
= 338,311
= 11,701
= 369,002
-
(11,417)
(298)
(89)
(2,801)
(207,010)
-
(221,615)
=-
= 3,173
= 468
= 150
= 594
= 131,301
= 11,701
= 147,387
Goodwill
Development
cost
=-
FINANCIAL REVIEW
December 31, 2010
Acquisition cost
Accumulated
depreciation
Net carrying value
Software
Industrial
property
rights
Core
deposit
Others
Membership
deposit
Total
= 14,573
= 364
= 192
= 3,353
= 182,119
= 12,353
= 213,163
-
(9,404)
(207)
(61)
(2,431)
(161,694)
-
(173,797)
= 209
= 5,169
= 157
= 131
= 922
= 20,425
= 12,353
= 39,366
Goodwill
Development
cost
= 209
January 1, 2010
Acquisition cost
Accumulated
depreciation
Net carrying value
Software
Industrial
property
rights
Core
deposit
Others
Membership
deposit
Total
= 12,426
= 274
= 131
= 3,437
= 188,865
= 9,279
= 214,626
-
(6,887)
(165)
(37)
(2,148)
(137,246)
-
(146,483)
= 214
= 5,539
= 109
= 94
= 1,289
= 51,619
= 9,279
= 68,143
Goodwill
Development
cost
= 214
(2) Details of changes in intangible assets are as follows (Unit: Korean Won in millions):
Software
Industrial
property
rights
Core
deposit
Others
Membership
deposit
Total
= 5,169
= 157
= 131
= 922
= 20,425
= 12,353
= 39,366
3
-
-
(2)
235
(124)
106
Goodwill
Development
cost
Beginning balance
= 209
Foreign currencies
translation
adjustment
(6)
Acquisition
-
18
402
47
-
156,733
254
157,454
Depreciation
-
(1,999)
(91)
(28)
(326)
(46,658)
-
(49,102)
(203)
-
-
-
-
-
-
(203)
Disposal
-
(18)
-
-
-
(865)
(782)
(1,665)
Transfer (*1)
-
-
-
-
-
1,431
-
1,431
=-
= 3,173
= 468
= 150
= 594
= 131,301
= 11,701
= 147,387
Impairment loss
Ending balance
Beginning balance
Goodwill
Development
cost
= 214
= 5,539
Software
Industrial
property
rights
Core
deposit
Others
Membership
deposit
Total
= 109
= 94
= 1,289
= 51,619
= 9,279
= 68,143
WOORI BANK
Goodwill
Development
cost
(5)
11
Foreign currencies
translation
adjustment
Software
Industrial
property
rights
Core
deposit
Others
Membership
deposit
Total
-
-
(27)
(55)
(37)
(113)
Acquisition
-
2,120
90
61
-
5,369
3,461
11,101
Depreciation
-
(2,501)
(42)
(24)
(340)
(36,464)
-
(39,371)
Disposal
-
-
-
-
-
(44)
(350)
(394)
= 209
= 5,169
= 157
= 131
= 922
= 20,425
= 12,353
= 39,366
Ending balance
(*1) =1,431 million is transferred from construction in progress.
16. OTHER ASSETS
152
Details of other assets are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
Suspense receivables:
=-
= 34,812
= 48,586
Suspense receivables in foreign currencies
Suspense receivables in local currency
20,049
4,359
4,516
Sub-total
20,049
39,171
53,102
-
11,448
-
189,169
138,407
178,938
11,475
12,313
13,903
Advance payments
Prepaid expenses:
Prepaid expenses in local currency
Prepaid expenses in foreign currencies
Unearned interest of prepaid expenses
Sub-total
188
382
498
200,832
151,102
193,339
4,094
2,894
2,128
555
3,639
2,973
Others
Supplies and others
Non-operative assets:
Non-operative real properties
Provision for valuation
Sub-total
Total
-
(787)
-
555
2,852
2,973
= 225,530
= 207,467
= 251,542
FINANCIAL REVIEW
17. ASSETS HELD FOR SALE
In accordance with K-IFRS No. 1105 ‘Non-current assets held for sale and discontinued operations’, the Group reclassified certain assets into assets held
for sale as of January 1, 2010. Assets held for sale of =2,258 million, =5,185 million, and =7,609 million, respectively, are recorded as of December
31, 2011, December 31, 2010, and January 1, 2010.
18. ASSETS SUBJECTED TO LIEN AND ASSETS ACQUIRED THROUGH A FORECLOSURE
(1) Details of assets subjected to lien are as follows (Unit: Korean Won in millions):
December 31, 2011
Collateral given to
Amount
Reason for collateral
Due from banks
Central bank of Bangladesh and others
= 69,606
Reserves for capital and others
Securities
BOK and others
7,093,822
Limitation on total loan exposure and others
Loans
Woo-Jeong saving bank
80,536
Collateral for borrowings
= 7,243,964
December 31, 2010
Collateral given to
Amount
Due from banks
Central bank of Bangladesh and others
= 82,762
Reserves for capital and others
Securities
BOK and others
6,803,833
Loans
75,666
= 6,962,261
January 1, 2010
Collateral given to
Due from banks
Morgan Stanley Co., Intl. and others
Securities
BOK and others
Loans
Amount
= 274,009
7,326,488
127,737
Collateral for credit derivatives transactions and
others
= 7,728,234
(2) Assets acquired through a foreclosure are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
Land
=-
= 508
= 521
Building
555
3,640
2,973
Provision for real estate properties
-
(787)
-
= 555
= 3,361
= 3,494
WOORI BANK
19. FINANCIAL LIABILITIES AT FVTPL
(1) Financial liabilities at FVTPL are as follows (Unit: Korean Won in millions):
Financial liabilities held for trading
December 31, 2011
December 31, 2010
January 1, 2010
= 3,187,358
= 3,220,295
= 4,080,505
322,208
1,509,280
1,684,041
= 3,509,566
= 4,729,575
= 5,764,546
Financial liabilities designated at FVTPL
Total
(2) Details of financial liability held for trading are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
= 8,105
= 18,901
= 58,487
Borrowings
Securities in short position
Derivative liabilities:
154
1,500,077
1,371,402
1,280,083
1,334,052
1,444,968
2,040,164
328,153
357,859
455,973
Stock derivatives
Credit derivatives
Sub-total
Total
-
1,600
203,317
16,971
25,565
42,481
3,179,253
3,201,394
4,022,018
= 3,187,358
= 3,220,295
= 4,080,505
(3) Details of financial liabilities designated at FVTPL are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31,2010
January 1, 2010
= 226,433
= 238,736
= 271,338
95,775
1,273,039
1,415,654
-
(2,495)
(2,951)
= 322,208
= 1,509,280
= 1,684,041
Debentures:
Discounts on debentures
Total
A portion of liabilities which do not meet the definition of financial liabilities held for trading is designated as financial instrument at FVTPL by using fair
value option to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise from recognizing assets and
liabilities on a different basis.
(4) Credit risk adjustments to financial liabilities designated at FVTPL are as follows (Unit: Korean Won in millions):
Financial liabilities designated at FVTPL
Changes in fair value for credit risk adjustments
December 31, 2011
December 31, 2010
January 1, 2010
= 322,208
= 1,509,280
= 1,684,041
6,462
(564)
(10,996)
FINANCIAL REVIEW
December 31, 2011
December 31, 2010
January 1, 2010
= (26,470)
= 5,285
= (10,996)
Accumulated changes in credit risk adjustments
(5) Financial liabilities at FVTPL’s carrying amount and face amount at maturity are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
= 322,208
= 1,509,280
= 1,684,041
296,498
1,472,864
1,675,282
= 25,710
= 36,416
= 8,759
Carrying amount
Face amount at maturity
Difference
20. DEPOSITS DUE TO CUSTOMERS (“ DEPOSITS ”)
(1) Details of deposits by interest type are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
= 2,450,041
= 2,710,250
= 2,360,115
8,401,386
4,740,959
5,130,601
892
912
906
137,613,700
133,984,449
117,979,005
Deposits in local currency:
Deposits on demand:
Interest bearing
Non-interest bearing
Money trust
Deposits at termination
Mutual installment
Sub-total
Certificate of deposits
82,823
110,314
144,417
148,548,842
141,546,884
125,615,044
959,458
1,764,677
10,457,581
Other deposits:
Deposits on notes payable
2,479,546
3,458,658
3,024,917
Deposits on CMA
1,752,379
2,150,747
1,554,060
Sub-total
4,231,925
5,609,405
4,578,977
9,178,643
7,558,144
8,395,791
Deposits in foreign currencies:
Interest bearing
Non-interest bearing
Sub-total
Total
1,192,566
875,623
1,350,883
10,371,209
8,433,767
9,746,674
(18,958)
(40,424)
(273,726)
= 164,092,476
= 157,314,309
= 150,124,550
WOORI BANK
(2) Details of deposits by customers are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
Individuals
= 53,634,183
= 49,341,193
= 45,267,536
Corporations
50,557,685
51,564,091
49,650,186
Banks
22,427,121
20,276,161
20,919,348
Government agencies
12,938,301
13,034,448
12,898,296
Other financial institutions
7,337,791
6,084,302
4,240,488
Government
6,269,995
6,050,868
7,319,476
Non-profit corporations
4,204,331
4,150,219
3,484,399
Educational organizations
2,509,585
2,453,360
2,288,067
Foreign corporations
1,333,507
785,539
435,467
Others
2,898,935
3,614,552
3,895,013
(18,958)
(40,424)
(273,726)
= 164,092,476
= 157,314,309
= 150,124,550
Total
156
21. BORROWINGS AND DEBENTURES
(1) Details of borrowings are as follows (Unit: Korean Won in millions):
December 31, 2011
Lender
Interest rate (%)
Amount
1.5
= 651,854
Borrowings in local currency:
Borrowings from the BOK
BOK
Borrowing from government funds
Korea Environment Management
Corporation and others
0.0 ~ 3.8
1,936,670
Others
Korea Finance Corporation and others
0.8 ~ 3.7
2,090,819
Sub-total
4,679,343
Borrowings in foreign currencies
Wilshire State Bank and others
0.3 ~ 5.6
9,862,373
Call-money
Banks
0.2 ~ 4.7
2,908,505
Bonds sold under repurchase agreements
Others
2.2 ~ 21.2
985,141
Bills sold
Others
0.0 ~ 3.7
96,453
Securitized borrowings
Others
2.7 ~ 7.8
644,900
Total
(2,073)
= 19,174,642
FINANCIAL REVIEW
December 31, 2010
Lender
Interest rate (%)
Amount
1.3
= 771,370
BOK
Korea Environment Management Corporation and others
0.0 ~ 5.0
2,007,750
Others
Korea Finance Corporation and others
3.0 ~ 3.5
2,355,662
Wachovia Bank and others
0.5 ~ 6.4
7,872,885
Call-money
Banks
0.1 ~ 5.0
4,326,568
Others
2.0 ~ 21.2
817,345
Bills sold
Others
0.0 ~ 3.0
100,690
Others
2.5 ~ 7.8
733,471
Sub-total
5,134,782
(2,770)
Total
= 18,982,971
January 1, 2010
Lender
Interest rate (%)
Amount
1.3
= 1,107,226
BOK
Korea Environment Management Corporation and others
0.0 ~ 5.3
2,028,486
Others
Korea International Trade Association and
others
3.0 ~ 3.8
2,977,304
Deutsche Bank and others
0.6 ~ 7.1
8,216,213
Call-money
Banks
0.2 ~ 2.0
5,283,801
Others
2.0 ~ 21.2
465,821
Bills sold
Others
0.0 ~ 3.4
89,180
Others
4.2 ~ 7.8
590,700
Sub-total
6,113,016
(6,396)
Total
= 20,752,335
(2) Details of other monetary organizations’ borrowings are as follows (Unit: Korean Won in millions):
December 31, 2011
Borrowings in local currency
BOK
General banks
Others
Total
= 651,854
= 641,360
= 1,229
= 1,294,443
-
4,940,001
4,922,372
9,862,373
WOORI BANK
December 31, 2011
BOK
General banks
Others
Total
Call-money
-
1,165,105
1,743,400
2,908,505
Bonds sold under repurchase
agreements
-
-
985,141
985,141
= 651,854
= 6,746,466
= 7,652,142
= 15,050,462
Total
December 31, 2010
BOK
General banks
Others
Total
= 771,370
= 735,379
= 58,002
= 1,564,751
-
3,964,695
3,908,190
7,872,885
Call-money
-
1,544,568
2,782,000
4,326,568
agreements
-
-
817,345
817,345
= 771,370
= 6,244,642
= 7,565,537
= 14,581,549
Total
158
January 1, 2010
BOK
General banks
Others
Total
= 1,107,226
= 751,286
= 12,601
= 1,871,113
-
4,796,199
3,420,014
8,216,213
Call-money
-
1,769,701
3,514,100
5,283,801
agreements
-
-
465,821
465,821
= 1,107,226
= 7,317,186
= 7,412,536
= 15,836,948
Total
(3) Details of debentures are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
Interest
rate (%)
Amount
Interest
rate (%)
Amount
Interest
rate (%)
Amount
Ordinary bonds
0.5 ~ 10.5
= 14,901,618
0.6 ~ 10.5
= 16,456,439
0.5 ~ 10.5
= 18,908,978
Subordinated bonds
4.7 ~ 10.3
4,950,864
5.1 ~ 10.3
3,770,616
5.0 ~ 10.3
Carrying value of bond:
Sub-total
Discount on bonds
Total
19,852,482
20,227,055
4,604,877
23,513,855
(40,669)
(34,628)
(37,752)
= 19,811,813
= 20,192,427
= 23,476,103
FINANCIAL REVIEW
22. PROVISIONS
(1) Details of provisions are as follows (Unit: Korean Won in millions):
Provisions for guarantees (*1)
Provisions for unused commitments
December 31, 2011
December 31, 2010
January 1, 2010
= 437,557
= 284,599
= 278,191
116,444
152,355
172,328
Provision for credit card point
701
10,721
11,136
Other provisions
19,603
30,879
28,228
Asset retirement obligation
11,080
18,159
16,984
Retirement benefit obligation
22,227
23,116
43,894
= 607,612
= 519,829
= 550,761
(*1) Provision for guarantee is including provision for financial guarantee of \186,638 million, \80,196 million, and \197,860 million as of December 31, 2011, December 31, 2010, and
January 1, 2010, respectively.
(2) Changes in provision except asset retirement obligation and retirement benefit obligation are as follows (Unit: Korean Won
in millions):
Provisions for
guarantees
Provisions for unused commitments
Provision for credit
card point
Other provisions
Total
Beginning balance
= 284,599
= 152,355
= 10,721
= 30,879
= 478,554
Provisions provided
147,120
2,391
9,339
1,379
160,229
Provisions used and others
11,202
1
(19,359)
(12,655)
(20,811)
Reversal of unused amount
(5,251)
(38,310)
-
-
(43,561)
(113)
7
-
-
(106)
= 437,557
= 116,444
= 701
= 19,603
= 574,305
Provisions for
guarantees
Provisions for unused
commitments
Provision for credit
card point
Other provisions
Total
Beginning balance
= 278,191
= 172,328
= 11,136
= 28,228
= 489,883
Provisions provided
194,166
4,027
22,429
4,236
224,858
Provisions used and others
(19,922)
(26)
(22,844)
13,355
(29,437)
Reversal of unused amount
(167,794)
(23,959)
-
(14,940)
(206,693)
(42)
(15)
-
-
(57)
= 284,599
= 152,355
= 10,721
= 30,879
= 478,554
Foreign exchange translation
adjustment
Ending balance
Foreign exchange translation
adjustment
Ending balance
WOORI BANK
(3) Changes in asset retirement obligation are as follows (Unit: Korean Won in millions):
For the year ended December 31,
2011
2010
= 18,159
= 16,984
Beginning balance
Provisions provided
Provisions used
Discount rate adjustment
617
726
(342)
(190)
(7,377)
-
23
639
= 11,080
= 18,159
Amortization
Ending balance
23. RETIREMENT BENEFIT OBLIGATION
(1) Details of retirement benefit obligation are as follows (Unit: Korean Won in millions):
160
Projected retirement benefit obligation
December 31, 2011
December 31, 2010
January 1, 2010
= 234,663
= 139,539
= 139,403
Fair value of plan assets
(212,436)
(116,423)
(95,509)
Liability recog nized
= 22,227
= 23,116
= 43,894
(2) Details of post-employee benefits recognized in profit and loss are as follows (Unit: Korean Won in millions):
Current service cost
Interest cost
= 82,794
= 84,158
7,464
5,887
Expected return of plan assets
(5,697)
(5,784)
Actuarial losses
16,320
(3,099)
(299)
-
= 100,582
= 81,162
Losses on the curtailment or settlement
For the year ended December 31, 2011 the Group appropriate its contribution retirement benefit at the expense of =2,439 million.
(3) Changes in carrying value of retirement benefit obligation are as follows (Unit: Korean Won in millions):
Beginning balance
Service cost
Interest cost
Actuarial loss (gain)
= 139,539
= 139,403
82,794
84,158
7,464
5,887
15,361
(5,496)
FINANCIAL REVIEW
104
21
Retirement benefit paid
(9,035)
(84,434)
Losses on the curtailment or settlement
(1,564)
-
= 234,663
= 139,539
Foreign currencies translation Adjustments
Ending balance
(4) Changes in plan assets are as follows (Unit: Korean Won in millions):
= 116,423
= 95,509
Expected return on plan assets
5,697
5,784
Actuarial loss
(959)
(2,398)
Beginning balance
Employer’s contributions
96,377
58,079
Retirement benefit paid
(3,643)
(40,551)
Curtailment or settlement
(1,265)
-
(194)
-
= 212,436
= 116,423
Others
Ending balance
(5) Actuarial assumption used in retirement benefit obligation assessment are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
Discount rate
4.76%
5.65%
5.31%
Inflation rate
2.30%
3.20%
3.20%
Expected rate of return on plan assets
4.49%
4.24%
Future wage growth rate
5.31%
5.74%
Mortality ratio
Issued by Korea Insurance Development Institute
5.67%
5.85%
Expected rate of return on plan assets as of December 31, 2011, 2010 and January 1, 2010, which were considered with the expect rate of return on
retirement pension, retirement trust and retirement insurances, are calculated as 4.49%, 4.24% and 5.67%, respectively.
(6) Details of plan assets are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
= 131,081
= 70,939
= 27,453
5,257
3,975
12,669
49,480
27,209
23,293
Others
26,618
14,300
32,094
= 212,436
= 116,423
= 95,509
Deposits
Equity securities
Total
WOORI BANK
(7) The realized returns on plan assets for the year ended in December 31, 2011 and 2010 are = 4,738 million and = 3,386 million,
respectively.
(8) Details of retirement benefit obligation for recent 3 years are as follows (Unit: Korean Won in millions):
retirement benefit obligation recognized
Present value of retirement benefit
obligation
Fair value of plan assets
December 31, 2011
December 31, 2010
January 1,2010
= 22,227
= 23,116
= 43,894
234,663
139,539
139,403
= (212,436)
= (116,423)
= (95,509)
24. OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES
Other financial liabilities and other liabilities are as follows (Unit: Korean Won in millions):
162
December 31, 2011
December 31, 2010
January 1, 2010
Accounts payable
= 6,112,868
= 1,999,398
= 1,743,906
Accrued expenses
2,651,400
2,188,579
1,891,312
59,377
55,603
43,779
Other financial liabilities:
Others
Discount for others
(3,195)
(4,411)
(2,290)
2,381,862
1,984,695
2,668,787
Deposits
256,725
264,225
172,680
Agency business revenue
153,701
218,343
197,986
Borrowing from thrust accounts
Domestic exchanges payable
2,968,232
96,834
341,572
Foreign exchanges payables
694,362
580,354
372,375
Others on credit cards
101,106
101,163
85,575
Agency and others
970,531
1,315,154
913,399
16,346,969
8,799,937
8,429,081
Unearned income
209,026
196,454
195,228
Other miscellaneous liabilities
235,523
81,303
497,954
Sub-total
444,549
277,757
693,182
= 16,791,518
= 9,077,694
= 9,122,263
Sub-total
Other liabilities:
Total
FINANCIAL REVIEW
25. DERIVATIVES
(1) Details of derivative assets and derivative liabilities are as follows(Unit: Korean Won in millions):
December 31, 2011
Assets
Notional
amount
Fair value
hedge
Liabilities
Cash flow
hedge
For
trading
Fair value
hedge
Cash flow
hedge
For
trading
Interest rHate:
Swaps
= 176,139,868
= 326,413
=-
= 1,386,661
= 12,885
= 10,518
= 1,469,153
298,253
-
-
-
-
-
-
Long options
2,445,000
-
-
36,254
-
-
-
Short options
2,771,136
-
-
-
-
-
30,924
Forwards
35,359,148
-
-
749,082
-
-
311,625
Swaps
27,243,579
-
-
722,915
-
2,179
995,488
Futures
1,065,618
-
-
-
-
-
-
Long options
1,957,680
-
-
395,419
-
-
-
Short options
1,890,912
-
-
-
-
-
26,938
Futures
Currency:
Equity:
Futures
18,945
-
-
-
-
-
-
Long options
591,620
-
-
53,706
-
-
-
Short options
1,177,223
-
-
-
-
-
328,153
Long options
234,408
-
-
11,683
-
-
-
Short options
239,000
-
-
-
-
-
11,793
10,516
-
-
239
-
-
253
157,938
-
-
4,424
-
-
4,926
300
-
-
-
-
-
-
= 251,601,144
= 326,413
=-
= 3,360,383
= 12,885
= 12,697
= 3,179,253
Others:
Forwards
Swaps
Futures
Total
December 31, 2010
Assets
Liabilities
Notional
amount
Fair value
hedge
Cash flow
hedge
For
trading
Fair value
hedge
Cash flow
hedge
For
trading
= 204,633,092
= 132,267
= 957
= 1,218,147
= 23,725
= 10,694
= 1,328,003
31,020
-
-
-
-
-
-
Long options
4,225,000
-
-
61,558
-
-
-
Short options
5,076,534
-
-
-
-
-
43,398
Interest rate:
Swaps
Futures
WOORI BANK
December 31, 2010
Assets
Liabilities
Notional
amount
Fair value
hedge
Cash flow
hedge
For
trading
Fair value
hedge
Cash flow
hedge
For
trading
Forwards
27,404,892
-
-
865,796
-
-
373,681
Swaps
24,884,530
-
-
838,787
-
-
1,014,073
870,966
-
-
-
-
-
-
Long options
2,360,647
-
-
420,078
-
-
-
Short options
2,295,334
-
-
-
-
-
57,214
Currency:
Futures
Equity:
Futures
46,249
-
-
-
-
-
-
Long options
396,246
-
-
39,279
-
-
-
Short options
1,243,991
-
-
-
-
-
357,859
Long options
87,081
-
-
11,821
-
-
-
Short options
87,615
-
-
-
-
-
11,925
Forwards
198,378
-
-
6,065
-
-
5,496
Swaps
312,150
-
-
7,553
-
-
9,744
295
-
-
-
-
-
-
= 274,154,020
= 132,267
= 957
= 3,469,084
= 23,725
= 10,694
= 3,201,393
Others:
164
Futures
Total
January 1, 2010
Assets
Liabilities
Notional
amount
Fair value
hedge
Cash flow
hedge
For
trading
Fair value
hedge
Cash flow
hedge
For
trading
= 137,303,775
= 104,986
= 2,522
= 1,099,587
= 52,312
= 12,285
= 1,219,477
29,327
-
-
-
-
-
-
Long options
6,013,380
-
-
76,513
-
-
-
Short options
6,164,964
-
-
-
-
-
60,606
Forwards
34,357,927
-
-
1,357,750
-
-
603,985
Swaps
19,640,707
-
-
721,377
-
-
1,324,687
668,498
-
-
-
-
-
-
Long options
3,049,897
-
-
598,523
-
-
-
Short options
3,198,520
-
-
-
-
-
111,492
Interest rate:
Swaps
Futures
Currency:
Futures
Equity:
FINANCIAL REVIEW
January 1, 2010
Assets
Liabilities
Notional
amount
Fair value
hedge
Cash flow
hedge
For
trading
Fair value
hedge
Cash flow
hedge
For
trading
Futures
179,446
-
Long options
429,370
-
-
-
-
-
-
-
47,338
-
-
-
Short options
2,077,448
-
-
-
-
-
455,973
Long options
Short options
304,145
-
-
19,845
-
-
-
312,065
-
-
-
-
-
22,949
82,213
-
-
1,661
-
-
1,246
875,694
-
-
18,671
-
-
221,602
5,752
-
-
-
-
-
-
= 214,693,128
= 104,986
= 2,522
= 3,941,265
= 52,312
= 12,285
= 4,022,017
Others:
Forwards
Swaps
Futures
Total
The above disclosure includes all derivatives regardless of the financial instrument categories. Derivatives held for trading purpose classified into financial
assets or liabilities at FVTPL (see notes 7 and 19) and derivatives for hedging are stated as a separate line item at the consolidated statements of financial
position.
(2) Gains or losses on valuation of derivatives are as follows (Unit: Korean Won in millions):
Loss from fair value hedged item
= (195,534)
= (123,202)
182,860
79,042
Gain from fair value hedging instrument
26. DAY 1 PROFITS AND LOSSES
Changes in deferred day 1 profits and losses are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2011
Beginning balance
New transactions
Amounts recognized in profits or loss
Ending balance
For the year ended
December 31, 2010
= 5,300
=-
4,580
7,530
(5,310)
(2,230)
= 4,570
= 5,300
Although no observable elements were available in active market to determine fair value of the financial instruments, valuation techniques were
utilized to determine fair value of such instruments. These financial instruments are recorded at fair values at the time of purchase even though there
were differences noted on the transaction price and fair value obtained from valuation techniques. The table above shows the differences yet to be
recognized in net income and the details.
WOORI BANK
27. CAPITAL STOCK, HYBRID SECURITIES AND CAPITAL SURPLUS
(1) Capital stock, hybrid securities and capital surplus are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January1, 2010
= 3,479,783
= 3,479,783
= 3,479,783
Capital Stock:
Common Stock
Preferred Stock
350,000
350,000
350,000
1,681,807
2,181,806
2,181,806
Capital in excess of par value
346,880
346,238
346,880
Other capital surplus
465,136
465,183
465,113
= 6,323,606
= 6,823,010
= 6,823,582
Hybrid securities
Capital Surplus:
Total
(2) The number of authorized shares is as follows (Unit: Korean Won in millions):
166
Authorized shares of capital stock
December 31, 2011
December 31, 2010
January1, 2010
3,000,000,000 shares
3,000,000,000 shares
3,000,000,000 shares
Par value
Issued shares of capital stock
= 5,000
= 5,000
= 5,000
765,956,580 shares
765,956,580 shares
765,956,580 shares
(3) Hybrid securities classified as equity are as follows (Unit: Korean Won in millions):
Local currency
Foreign
currencies
Issue date
Maturity
Interest
Rates (%)
December 31, 2011
December 31, 2010
January 1, 2010
2008. 6. 20.
2038. 6. 19.
7.7
= 254,633
= 254,633
= 254,633
2009. 3. 31.
2039. 3. 30.
6.7
499,998
999,997
999,997
2007. 5. 21.
2037. 5. 20.
6.2
927,176
927,176
927,176
= 1,681,807
= 2,181,806
= 2,181,806
The Group can exercise its right to early repayment after five or ten years after issuing hybrid securities, and at the date of maturity, the contractual
agreements allow the Group to indefinitely extend the maturity date with the same contractual terms. In addition, the Group decides not to pay the
dividends of common share at general shareholder's meeting, the Group may not pay interest on the hybrid securities.
(4) Details of capital surplus are as follows (Unit: Korean Won in millions):
Capital in excess of
par value
Increase by issuance of preferred stock and common
stock issue cost
December 31, 2011
December 31, 2010
January1, 2010
= 346,880
= 346,880
= 346,880
FINANCIAL REVIEW
Other capital surplus
December 31, 2011
December 31, 2010
January1, 2010
Increase by acquisition of banking segment of
formerly Peace Bank
31,903
31,903
31,903
Gain on disposal of subsidiary stock (formerly Woori
Investment Trust Management Co., Ltd.)
17,392
17,392
17,392
Loss on disposal of subsidiary stock (formerly Woori
Investment Securities Co., Ltd.)
(55,369)
(55,369)
(55,369)
Increase by merger with formerly Woori Investment
Bank Co., Ltd.
138,682
138,682
138,682
Increase by merger with formerly Woori Card
330,395
330,395
330,395
2,133
1,538
2,110
Increase by additional acquisition of interests in P.T.
Bank Woori Indonesia
Sub-total
Total
465,136
464,541
465,113
= 812,016
= 811,421
= 811,993
28. OTHER EQUITY
Changes in other equity are as follows (Unit: Korean Won in millions):
Beginning
balance
Others
Reclassification
Income tax
effect
Ending
balance
= 939,938
= 100,304
= (581,215)
= 84,401
= 543,428
Share of other comprehensive
gain (loss) on associates
20,857
(3,920)
(24,788)
6,360
(1,491)
Gain (loss) on valuation of cash
flow hedge
(9,298)
7,617
(749)
-
(2,430)
Gain (loss) on overseas business
translation and others
(13,237)
15,818
-
(3,703)
(1,122)
= 938,260
= 119,819
= (606,752)
= 87,058
= 538,385
Gain (loss) on valuation of AFS
financial assets
Total
Gain (loss) on valuation of AFS
financial assets
Share of other comprehensive gain
(loss) on associates
Gain (loss) on valuation of cash
flow hedge
Beginning
balance
Others
Reclassification
Income tax
effect
Ending
balance
= 1,159,619
= 236,340
= (524,737)
= 68,716
= 939,938
43,112
(28,532)
-
6,277
20,857
(10,468)
5,164
(3,994)
-
(9,298)
WOORI BANK
Beginning
balance
Others
Reclassification
Income tax
effect
Ending
balance
-
(14,535)
-
1,298
(13,237)
= 1,192,263
= 198,437
= (528,731)
= 76,291
= 938,260
Gain (loss) on overseas business
translation and others
Total
For the change in gain (loss) on valuation of AFS financial assets, others represent the change from the valuation for the period, and reclassification
adjustments show disposal or recognition of impairment losses on AFS financial assets.
29. RETAINED EARNINGS
Changes in retained earnings are as follows (Unit: Korean Won in millions):
Legal reserve
168
Legal
Reserve
Other legal reserve
Sub-total
Business rationalization reserve
Voluntary
Reserve
Reserve for financial structure
improvement
Additional reserve
Other voluntary reserve
December 31, 2011
December 31, 2010
January 1, 2010
= 1,208,332
= 1,094, 275
= 994,123
59,595
52,616
37,654
1,267,927
1,146,891
1,031,777
8,000
8,000
8,000
235,400
235,400
212,000
6,799,544
6,193,044
5,653,044
6,100
6,100
100
Sub-total
7,049,044
6,442,544
5,873,144
Retained earnings before appropriation
2,939,236
2,129,142
1,993,349
= 11,256,207
= 9,718,577
= 8,898,270
Total
1) Legal reserve
In accordance with the Act of Banking Law, legal reserve are appropriated at least one tenth of the earnings after tax on every dividend declaration, not
exceeding the paid in capital. This reserve may not be used other than for offsetting a deficit or transferring to capital.
2) Other legal reserve
Other legal reserves were appropriated in the branches located in Japan, Vietnam and Bangladesh according to the banking laws of Japan, Vietnam
and Bangladesh, and may be used to offset any deficit incurred in those branches.
3) Business rationalization reserve
Pursuant to the Tax Exemption and Reduction Control Law, the Group was previously required to appropriate, as a reserve for business rationalization,
amounts equal to tax reductions arising from tax exemptions and tax credits up to December 31, 2001. The requirement was no longer effective from 2002.
4) Reserve for financial structure improvement
In 2002, the Finance Supervisory Services recommended banks in Korea to appropriate at least ten percent of net income after accumulated deficit for
FINANCIAL REVIEW
financial structure improvement, until simple capital ratio equals 5.5 percent. This reserve is not available for payment of cash dividends; however, it can
be used to reduce a deficit or be transferred to capital.
5) Reserve for research and human development
In accordance with the Tax Reduction and Exemption Control Act, the Group reserves tax reserves (reserve when taxable deduction under reporting
adjustment during calculating income tax) when the Group dispose of retain earning. However, this reserve cannot allocate the amount of purchase
return under related tax law.
6) Additional reserve and other voluntary reserve
Additional reserve and other voluntary reserve were appropriated for capital adequacy and other management purposes.
30. PLANNED REGULATORY RESERVE FOR CREDIT LOSS
In accordance with Article 29 of the Regulation on Supervision of Banking Business (“RSBB”), if the estimated provisions for credit loss under K-IFRS
for the accounting purpose are lower than those in accordance with the provisions under RSBB, the Group shall disclose the difference as the planned
regulatory reserve for credit loss.
(1) Balance of the planned regulatory reserve for credit losses is as follows (Unit: Korean Won in millions):
Beginning
Amount estimated to be appropriated
Ending
December 31, 2011
December 31, 2010
= -
= -
1,123,866
513,676
= 1,123,866
= 513,676
(2) Planned reserves provided, adjusted net income after the planned reserves provided and adjusted earnings per share after the
planned reserves provided are as follows (Unit: Korean Won in millions, except for earning per share):
For the year ended
December 31, 2011
Planned reserves provided
Adjusted net income after the planned reserves provided (*1)
Adjusted Earnings per share after the planned reserves provided (*1)
= 610,190
1,459,182
= 1,811
(*1) Adjusted net income after the planned reserves provided and adjusted earnings per share after the planned reserves provided are not in accordance with K-IFRS and calculated on
the assumption that provision of regulatory reserve for credit loss before income tax is adjusted to the profit.
WOORI BANK
31. DIVIDENDS
Details of dividends and payout ratio are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2010
For the year ended
December 31, 2011
Shares outstanding (million)
Par value per share
Capital stock (million)
Number of shares issued (million)
Cash dividend per share
Total cash dividend (million)
Dividend rate
Net income (million)
Payout ratio (*2)
Common stock
Preferred
Stock (*1)
Common stock
Preferred
Stock (*1)
696
70
696
70
= 5,000
= 5,000
= 5,000
= 5,000
3,479,783
350,000
3,479,783
350,000
696
70
696
70
= 608
= 800
= 477
= 800
423,053
56,000
331,725
56,000
12.2%
16.0%
9.5%
16.0%
2,069,371
2,069,371
1,262,104
1,262,104
20.4%
2.7%
.26.3%
4.4%
170
(*1) Preferred stock is non-cumulative and non-participating and its dividend rate is 8% on issuance price per share.
(*2) Payout ratio for the year ended December 31, 2010 is calculated in accordance with K-IFRS and payout ratio of common stock and preferred stock under K-GAAP for the year
ended December 31, 2010 were 29.9% and 5.1%, respectively. In addition, payout ratio of common stock and preferred stock after reflecting planned regulatory reserve for credit loss
for the year ended December 31, 2011 are 29.0% and 3.8%, respectively.
32. NET INTEREST INCOME
(1) Details of interest income recognized are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 196,756
= 203,565
-
1,090
Financial asset at FVTPL:
Interest of securities:
Securities in local currency
Securities in foreign currencies
Interest of other assets
89,824
79,777
286,580
284,432
Interest of government bonds
142,463
124,031
Interest of finance debentures
124,349
133,856
42,479
18,463
712
891
1
-
Sub-total
AFS financial asset:
Interest of securities in local currency:
Interest of debentures
Interest of beneficiary certificate
Interest of other securities
FINANCIAL REVIEW
For the year ended
December 31, 2011
For the year ended
December 31, 2010
5,461
7,641
315,465
284,882
Interest of government bonds
232,601
146,243
Interest of finance debentures
225,033
364,898
Interest of debentures
197,288
89,714
709
-
Interest of securities in foreign currencies
Sub-total
HTM financial asset:
Interest of securities in local currency:
Others
Interest of securities in foreign currencies
8,305
10,568
663,936
611,423
Interest on due from banks in local currency
29,136
4,070
Interest on due from banks in foreign currencies
18,116
8,364
8,218,926
7,642,649
438,327
465,369
49,049
46,040
497
1,234
Interest on inter-bank loans
58,084
24,880
Interest on call loans
87,756
79,993
Interest on bills bought
14,160
8,318
Sub-total
Loans and receivables:
Interest on due from banks:
Interest of loans:
Interest on loans in local currency
Interest on loans in foreign currencies
Interest on domestic usance bills
Interest on off-shore loans
Interest on foreign currencies
120,677
145,265
Interest on payment for acceptances and guarantees
4,292
3,311
Interest on bonds sold under repurchase agreements
100,061
58,119
Interest on privately placed bonds
119,723
163,199
Interest on credit card receivables
996,012
1,007,690
39,350
40,315
Interest on other loans
Interest of other assets
Sub-total
Total
99,111
101,495
10,393,277
9,800,311
= 11,659,258
= 10,981,048
Interest income accrued from impaired loan is =140,933 million and =62,257 million for the years ended December 31, 2011 and 2010, respectively.
WOORI BANK
(2) Interest expense recognized are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 20,116
= 13,044
33
33
4,121,885
3,750,353
3,590
4,726
Interest of deposits:
Interest on demand deposits in local currency
Interest on deposits in foreign currencies
Interest on saving deposits in local currency
Interest on mutual installment
Interest on money trust
64,966
279,814
175,043
121,560
91,210
81,645
4,476,843
4,251,175
Interest on borrowings in local currency
148,255
172,634
Interest on borrowings in foreign currencies
Interest on certificate of deposits
Interest on other deposits
Sub-total
Interest of borrowings:
172
115,342
105,731
Interest on call money
57,627
45,795
Interest on bills sold
19,992
13,227
Interest on bonds sold under repurchase agreements
Sub-total
2,582
2,320
343,798
339,707
791,917
976,662
Interest of debentures:
Interest on debentures in local currency
Interest on debentures in foreign currencies
Sub-total
Others
Total
223,042
282,629
1,014,959
1,259,291
98,062
104,113
= 5,933,662
= 5,954,286
33. NET FEES AND COMMISSIONS INCOME
(1) Details of fees and commissions income occurred are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 501,697
= 448,127
Commission received in foreign currencies
201,230
193,402
Sub-total
702,927
641,529
97,386
100,354
Commission received:
Commission received in local currency
Commission fees
FINANCIAL REVIEW
For the year ended
December 31, 2011
For the year ended
December 31, 2010
22,847
15,544
Credit card in local currency
12,800
10,899
Credit card in foreign currencies
21,113
-
1,375
1,903
777
569
36,065
13,371
5,553
6,131
Commission received on securities
71,688
92,027
Other commission received
20,688
23,049
Commission received on project
financing
Commission received on credit card:
Prepaid card
Debit card
Sub-total
CMA management charges
Commission received on trust business
Total
36,775
39,525
= 993,929
= 931,530
(2) Details of fees and commissions expense occurred are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 61,909
= 55,780
Commission expenses:
Commission expenses in local currency
Commission expenses in foreign currencies
22,722
19,607
Sub-total
84,631
75,387
337,794
324,179
2,715
3,392
771
527
341,280
328,098
140
580
Commission expenses on brand loyalty
58,065
32,408
Commission expenses on trust business
1,822
1,264
= 485,938
= 437,737
Commission expenses on credit card:
Credit card in local currency
Credit card in foreign currencies
Debit card
Sub-total
Commission expenses on securities
Total
WOORI BANK
34. DIVIDEND INCOME
Details of dividend income recognized are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 7,484
= 3,820
111,595
113,088
Financial assets at FVTPL:
Dividend income in local currency
Dividend in local currency
Dividend in foreign currencies
Sub-total
Total
4,071
2,187
115,666
115,275
= 123,150
= 119,095
35. GAINS AND LOSSES ON FINANCIAL ASSETS AT FVTPL
174
(1) Details of gains and losses on financial assets at FVTPL are as follows (Unit: Korean Won in millions):
Gains and losses on financial assets held for trading
Gains and losses of financial assets designated at FVTPL
Total
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 78,797
= 58,089
27,885
(42,876)
= 106,682
= 15,213
(2) Details of gains and losses on financial assets held for trading are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2011
For the year ended
December 31, 2010
Gain on retirement of securities in local currency
=1
= 624
Loss on retirement of securities in local currency
(29)
(11)
Gain (loss) on securities:
(28)
613
Gain on transaction of securities in local currency
Sub-total
57,301
145,397
Loss on transaction of securities in local currency
(109,119)
(54,616)
Sub-total
(51,818)
90,781
Gain on valuation of securities in local currency
15,598
39,626
Loss on valuation of securities in local currency
(18,559)
(1,990)
Sub-total
Gain (loss) on securities sub-total
Gain (loss) on derivatives (for trading):
Gain on transaction and valuation of derivatives:
(2,961)
37,636
(54,807)
129,030
FINANCIAL REVIEW
For the year ended
December 31, 2011
For the year ended
December 31, 2010
Gain on interest rates derivatives
1,843,855
2,040,078
Loss on interest rates derivatives
(1,841,678)
(2,130,406)
2,177
(90,328)
Gain on currencies derivatives
3,556,354
3,850,443
Loss on currencies derivatives
(3,470,563)
(3,796,031)
85,791
54,412
Gain on equity derivatives
176,187
221,787
Loss on equity derivatives
Sub-total
Sub-total
(139,137)
(273,846)
Sub-total
37,050
(52,059)
Gain on other derivatives
83,429
206,790
Loss on other derivatives
(81,591)
(203,172)
1,838
3,618
126,856
(84,357)
Gain on transaction of other financial instruments
8,464
11,936
Loss on transaction of other financial instruments
(2,130)
(1,270)
6,334
10,666
Gain on valuation of other financial instruments
416
2,750
Loss on valuation of other financial instruments
(2)
-
414
2,750
Sub-total
Gain (loss) on derivatives sub-total
Gain (loss) on other financial instruments:
Sub-total
Sub-total
Gain on other financial instruments sub-total
Total
6,748
13,416
= 78,797
= 58,089
(3) Details of gains and losses of financial instrument at FVTPL are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2011
For the year ended
December 31, 2010
=-
= (589)
Gain on transaction of securities:
Loss on redemption of securities in
foreign currencies
-
15
Gain on transaction of securities in foreign currencies
-
1,124
Sub-total
-
550
18,861
2,516
9,024
(45,942)
Gain (loss) on other financial instruments:
Gain on disposition of other financial instruments
Gain (loss) on valuation of other financial instruments
Sub-total
Total
27,885
(43,426)
= 27,885
= (42,876)
WOORI BANK
36. GAINS AND LOSSES ON AFS FINANCIAL ASSETS
Details of gains and losses on AFS financial assets recognized are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 72
= 99
Gain on transaction of securities:
Gain on redemption of securities in local currency
Gain on redemption of securities in foreign currencies
-
2,035
1,194,274
960,944
Gain on transaction of securities in foreign currencies
Sub-total
5,715
17,340
1,200,061
980,418
(163,529)
30,101
Reversal of impairment loss (Impairment loss):
Securities in local currency
Securities in foreign currencies
Sub-total
Total
176
(19,786)
(31,973)
(183,315)
(1,872)
= 1,016,746
= 978,546
37. GAIN (LOSS) ON HTM FINANCIAL ASSETS
There is no gain or loss on HTM financial assets for the years ended December 31, 2011 and 2010, respectively. In addition, details of interest income
of HTM financial assets are stated in note 32.
38. IMPAIRMENT LOSSES FOR LOANS, OTHER RECEIVABLES, GUARANTEES AND UNUSED COMMITMENTS
Impairment losses for loans, other receivables, guarantees and unused commitments are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= (1,787,955)
= (2,625,672)
Loans:
Bad debt expenses
Reversal of provision for loan losses and receivables
Sub-total
77,302
136,029
(1,710,653)
(2,489,643)
(147,120)
(194,166)
5,251
167,794
(141,869)
(26,372)
(2,391)
(4,027)
Guarantees:
Provision for guarantee
Reversal of provision for guarantee
Sub-total
Commitments:
Provision for unused commitment
FINANCIAL REVIEW
Reversal of provision for unused commitment
Sub-total
For the year ended
December 31, 2011
For the year ended
December 31, 2010
38,310
23,959
35,919
19,932
= (1,816,603)
= (2,496,083)
39. GENERAL AND ADMINISTRATIVE EXPENSES AND NET OTHER OPERATING INCOME (EXPENSE)
(1) Details of general and administrative expenses are as follows (Unit: Korean Won in millions):
Salaries
Short-term salaries
Severance benefits-defined benefit
Severance benefits- defined contribution
Termination
Sub-total
Depreciation
Employee benefits
Reimburse
Travel
Operating promotion expenses
Rent
= 1,044,031
= 870,098
100,582
81,162
2,439
-
42,907
32,019
1,189,959
983,279
126,740
125,682
259,620
239,841
61,198
61,885
6,815
6,192
42,245
36,460
187,020
178,751
12,004
9,966
Advertising expenses
69,632
70,457
109,188
100,027
Insurance
3,108
3,127
Computer related expenses
245,111
245,788
Service fees
163,277
130,332
Communications
32,905
28,939
Printings
10,901
11,293
Water, light and heating
13,192
13,477
Supplies
6,025
5,975
Vehicle maintenance
9,479
8,184
134
517
4,240
3,334
Other expenses
Others
Sub-total
Total
For the year ended
December 31, 2010
Maintenance
Taxes and dues
Other general and
administrative
expenses
For the year ended
December 31, 2011
1,236,094
1,154,545
= 2,552,793
= 2,263,506
WOORI BANK
(2) Details of net other operating incomes (expenses) recognized are as follows (Unit: Korean Won in millions):
Other operating incomes
Other operation expenses
Net other operating expenses
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 8,545,805
= 7,725,743
(8,973,490)
(8,101,934)
= (427,685)
= (376,191)
(3) Details of other operating incomes recognized are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 8,104,932
= 7,358,105
193,374
129,755
4,921
40,575
Rental incomes
19,168
16,662
Gain on transaction of other assets
Gain on transaction of foreign exchange
Gain on derivatives (for hedge)
Gain on fair value hedging derivatives
178
65,166
357
Reversal of impairment of other assets
321
966
Gain on restoration
105
33
Gain on disposal of loans
51,910
120,087
Gain on investment in associates
26,231
-
Others
79,677
59,203
= 8,545,805
= 7,725,743
(4) Details of other operating expenses recognized are as follows (Unit: Korean Won in millions):
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 7,955,322
= 7,109,106
10,513
50,713
Loss on fair value hedging derivatives
200,455
163,777
Deposit insurance premium
207,991
179,017
Contribution to miscellaneous funds
298,685
285,720
95
5
2,675
4,526
Loss on transaction of foreign exchange
Loss on derivatives (for hedge)
Export bond insurance fees
Loss on disposition of other assets
Loss on valuation of other assets
Donations and contributions
Loss on restoration
Loss on disposal of loans
Loss on investment in associates
Other expenses
4,614
8,530
38,041
62,896
301
244
196,187
172,263
-
6
58,611
65,131
= 8,973,490
= 8,101,934
FINANCIAL REVIEW
40. INCOME TAX EXPENSE
(1) Details of income tax expense are as follows (Unit: Korean Won in millions):
Current income tax payable
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 489,483
= 260,792
Adjustment recognized in the period for current tax of prior periods
(4,796)
(38,041)
Changes in deferred income taxes due to temporary differences
18,055
(24,293)
Changes in deferred income taxes directly in equity
87,058
76,291
= 589,800
= 274,749
Income tax expense
(2) Income tax expense can be reconciled to net income is follows (Unit: Korean Won in millions):
Net income before income tax
Tax calculated at statutory tax rate of 24.2%
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 2,659,171
= 1,536,853
643,493
371,892
-
-
(46,060)
(79,149)
Adjustments:
Effect on non-taxable income
Effect on non-deductible expense
53,980
61,427
Deferred tax effect from changes in tax rate
(11,618)
(8,998)
Consolidated tax return
(45,199)
(32,382)
Adjustment recognized in the period for current tax of prior periods
Income tax expense
Effective tax rate
(4,796)
(38,041)
= 589,800
= 274,749
22.2%
17.9%
(3) Changes in cumulative temporary differences for the years ended December 31, 2011 and 2010 are as follows (Unit: Korean
Won in millions):
Beginning balance
Deduction
Addition
Ending balance
= 647,632
= 651,462
= 884,836
= 881,006
Temporary differences to be charged to
income tax expense:
Loss (gain) on valuation of securities
Loss (gain) on valuation of investments in associates
156,832
-
(52,477)
104,355
Gain (loss) on valuation of derivatives
(466,258)
(466,615)
(641,807)
(641,450)
Accrued income
(206,975)
(205,174)
(265,594)
(267,395)
Depreciation of premises and equipment
(33,082)
(33,307)
(17,752)
(17,527)
Allowance for loan loss
344,333
383,663
(31,593)
(70,923)
Write-off of loans
258,253
220,660
-
37,593
WOORI BANK
Beginning balance
Deduction
Addition
Ending balance
(125,558)
(125,558)
(155,002)
(155,002)
Accrued expenses
109,164
105,388
161,829
165,605
100,353
3,640
80,814
177,527
Plan assets
(104,523)
(3,640)
(76,644)
(177,527)
Provisions for guarantees
202,719
202,719
250,472
250,472
Other provision
195,424
195,340
137,257
137,341
Loss (gain) on valuation of debentures
159,721
159,721
312,819
312,819
Provision for advanced depreciation
Hybrid securities
Others
6,249
6,249
119
119
(86,274)
-
-
(86,274)
(2,389,873)
(500,000)
-
(1,889,873)
(427,368)
(611,591)
(578,302)
(394,079)
(1,659,231)
(17,043)
8,975
(1,633,213)
Gain on valuation of available-for-sale securities
(1,171,131)
(1,189,356)
(744,263)
(726,038)
Change in interests of equity method securities
(26,739)
(26,739)
1,946
1,946
695
695
(4,315)
(4,315)
Sub-total
(1,197,175)
(1,215,400)
(746,632)
(728,407)
Temporary differences sub-total
(2,856,406)
(1,232,443)
(737,657)
(2,361,620)
Realizable temporary differences
(2,389,873)
(500,000)
5,168
(1,884,705)
Sub-total
180
Temporary differences recognized directly in equity :
Others
Unrealizable temporary differences
Tax effects for temporary differences
Net deferred tax liabilities
(466,533)
(732,443)
(742,825)
(476,915)
(99,142)
(161,665)
(179,720)
(117,197)
= (99,142)
= (117,197)
Beginning balance
Deduction
Addition
Ending balance
= 687,700
= 687,700
= 647,632
= 647,632
Loss (gain) on valuation of investments in associates
165,579
165,579
156,832
156,832
Gain (loss) on valuation of derivatives
(41,896)
(41,896)
(466,258)
(466,258)
Accrued income
(58,772)
(58,772)
(206,975)
(206,975)
Depreciation of premises and equipment
(90,730)
(90,905)
(33,257)
(33,082)
(609,864)
(469,009)
485,188
344,333
278,872
20,619
-
258,253
(113,002)
(113,002)
(125,558)
(125,558)
(94,197)
(94,197)
109,164
109,164
Temporary differences to be charged to
income tax expense:
Loss (gain) on valuation of securities
Allowance for loan loss
Write-off of loans
Accrued expenses
FINANCIAL REVIEW
Beginning balance
Deduction
Addition
Ending balance
97,155
96,250
99,448
100,353
Plan assets
(96,402)
(95,496)
(103,617)
(104,523)
334,500
334,500
202,719
202,719
Other provision
227,619
227,552
195,357
195,424
(3,228)
(3,228)
159,721
159,721
761
761
6,249
6,249
(86,274)
-
-
(86,274)
(2,504,972)
(2,504,972)
(2,389,873)
(2,389,873)
321,822
326,128
(423,062)
(427,368)
(1,585,329)
(1,612,388)
(1,686,290)
(1,659,231)
Gain on valuation of available-for-sale securities
(1,488,686)
(1,488,686)
(1,171,131)
(1,171,131)
Change in interests of equity method securities
(55,272)
(55,272)
(26,739)
(26,739)
Loss (gain) on valuation of debentures
Provision for advanced depreciation
Hybrid securities
Others
Sub-total
Temporary differences recognized directly in equity:
Others
-
-
695
695
Sub-total
(1,543,958)
(1,543,958)
(1,197,175)
(1,197,175)
Temporary differences sub-total
(3,129,287)
(3,156,346)
(2,883,465)
(2,856,406)
Realizable temporary differences
(2,504,972)
(2,504,972)
(2,389,873)
(2,389,873)
Unrealizable temporary differences
(624,315)
(651,374)
(493,592)
(466,533)
Tax effects for temporary differences
(123,435)
(132,883)
(108,590)
(99,142)
Net deferred tax liabilities
= (123,435)
= (99,142)
(4) Details of temporary differences that are not recognized as deferred tax liabilities are as follows
(Unit: Korean Won in millions):
Investments in associates
Hybrid securities
Total
December 31, 2011
December 31, 2010
January 1, 2010
= 5,168
=-
=-
(1,889,873)
(2,389,873)
(2,504,972)
= (1,884,705)
= (2,389,873)
= (2,504,972)
(5) Details of deferred tax relating to items that are recognized directly in equity are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
= (172,677)
= (257,079)
= (317,150)
Gain (loss) on foreign exchange translation of AFS
financial assets
(1,011)
(1,010)
(9,655)
Others
(2,633)
(5,290)
(12,865)
= (176,321)
= (263,379)
= (339,670)
Loss (gain) on valuation of AFS securities
Total
WOORI BANK
41. EARNINGS PER SHARE (“EPS”)
(1) Basic EPS is calculated by dividing net income by weighted average number of common shares outstanding (Unit: Korean Won
in millions, except for per share amounts)
For the year ended
December 31, 2011
For the year ended
December 31, 2010
Net income attributable to common shares:
= 2,068,544
= 1,261,283
Dividend on preferred stock
Net income attributable to the controlling equity
(56,000)
(56,000)
Dividend on hybrid securities
(142,548)
(155,661)
= 1,869,996
= 1,049,622
696 million shares
696 million shares
= 2,687
= 1,508
Weighted average number of
common shares outstanding
Basic EPS
182
(2) Diluted EPS is calculated by reflecting the dilution effect to net income (Unit: Korean Won in millions, except for per share
amounts)
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 1,869,996
= 1,049,622
Diluted net income:
Net income attributable on common shares
Dilution effect of convertible preferred stock
56,000
56,000
= 1,925,996
= 1,105,622
696 million shares
696 million shares
70 million shares
70 million shares
766 million shares
766 million shares
= 2,514
= 1,443
Weighted average number of share for diluted earnings per share:
Weighted average number of common shares outstanding
Convertible preferred stock
Diluted EPS
Diluted EPS is calculated by adjusting the assumption that all dilutive potential common shares are converted to common shares, for weighted average
number of shares calculation. The dilutive potential common shares are convertible preferred stock, and to calculate diluted EPS, it is assumed that
convertible preferred stocks convert to common shares and the relate dividend is added to net income on common shares.
FINANCIAL REVIEW
42. CONTINGENT LIABILITIES AND COMMITMENTS
(1) Details of guarantee which the Group has provided for others are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
= 135
= 41,290
= 46,024
220,966
128,433
84,137
Confirmed guarantee:
Guarantee for debenture issuances
Guarantee for loans
Acceptances
807,772
743,445
817,770
Guarantee in acceptances of imported goods
128,152
124,973
113,564
9,845,755
8,532,312
8,953,173
11,002,780
9,570,453
10,014,668
934,060
880,013
728,597
Other confirmed guarantees
Total
Unconfirmed guarantee:
Local letter of credit
Letter of credit
4,490,294
5,293,892
5,431,537
Other unconfirmed guarantee
3,133,110
3,678,567
4,709,636
Total
= 8,557,464
= 9,852,472
= 10,869,770
Commercial paper purchase
commitment and others
= 2,956,081
= 4,028,455
= 3,626,291
(2) Details of loan commitments and other commitments which the Group provided for others are as follows (Unit: Korean Won
in millions):
Loan commitments
Other commitments
December 31,
2011
December 31,
2010
January 1,
2010
= 84,708,979
= 79,895,333
= 74,519,965
8,695,936
9,929,244
8,776,416
(3) Details of guarantees and the related provisions for guarantees are as follows (Unit: Korean Won in millions):
December 31, 2011
December 31, 2010
January 1, 2010
= 11,002,780
= 9,570,453
= 10,014,668
Unconfirmed guarantees
8,557,464
9,852,472
10,869,770
Commercial paper purchase commitments and others
2,956,081
4,028,455
3,626,291
Total
22,516,325
23,451,380
24,510,729
= 437,557
= 284,599
= 278,191
1.94%
1.21%
1.13%
Confirmed guarantees
Ratio of provisions to total guarantees
WOORI BANK
(4) Litigation case
The Group had filed lawsuits as follows (Unit: Korean Won in millions):
December 31, 2011
Number of cases
Amount of litigation
As plaintiff
As defendant
779 case
179 case
= 1,020,035
= 333,177
Provisions for litigations
= 12,679
December 31, 2010
As plaintiff
As defendant
Number of cases
4,034 case
146 case
= 788,273
= 160,427
= 13,941
184
January 1, 2010
As plaintiff
As defendant
Number of cases
4,860 case
210 case
= 781,854
= 178,618
= 17,424
The litigations from the electronic reminder (payment orders for unpaid credit card receivables to individuals) are not included on the number of cases
as of December 31, 2011, December 31, 2010 and January 1, 2010, respectively, and there are no significant effects on the financial statements as of
December 31, 2011, December 31, 2010 and January 1, 2010.
43. RELATED PARTY TRANSACTIONS
Related parties of Group and assets and liabilities recognized and major transactions with related parties during the current and prior period are as
follows:
(1) The related parties of the Group as of December 31, 2011 are as follows:
Related parties
Ultimate controlling party
(Government related entity)
Korea Deposit Insurance Corporation (“KDIC”)
Parent
Woori Finance Holdings Co., Ltd. (“WFH”)
Associates
Korea Credit Bureau Co., Ltd., Korea Finance Security Co., Ltd., Woori Service Networks Co., Ltd., Kumho Tires Co.,
Ltd., Woori Private Equity Fund, Woori Blackstone Korea Opportunity Private Equity Fund 1, United PF 1st Corporate
financial stability, LIG E&C Co., Ltd., Hyunjin Co., Ltd.
FINANCIAL REVIEW
Kyongnam Bank, Kyongnam Bank Preservation Trust of principal, Kwangju Bank, Kwangju Bank Preservation Trust
of principal, Kumho Investment Bank, Bonghwang Semiconductor Yuhan Gongsa, Sempio Food Co., Ltd., Seoul
Lakeside Co., Ltd., WFG Savings Bank, Woori FIS Co., Ltd., Woori Renaissance Holdings Co., Ltd., Woori Futures,
Woori Aviva Life Insurance Co., Ltd., Woori AMC, Woori F&I Co., Ltd., Woori EL Co., Ltd., Woori Asset Management
Co., Ltd., Woori Investment & Securities Co., Ltd., Woori Financial Co., Ltd., Woori Private Equity, UP Chemical Co.,
Ltd., Phoenix Digital Tech Co., Ltd., TY Second Asset Securitization Specialty and 54 SPCs, Woori Investment Asia PTE
and 35 Beneficiary Certificates
Other
(2) Assets and liabilities from transactions with related parties are as follows (Unit: Korean Won in millions):
Related party
Ultimate controlling
party (Government
related entity)
Accounts
KDIC
Loans
Provision for credit loss
Parent
Kumho Tires Co., Ltd.
=-
-
222,283
Deposits
136,916
546,634
230,935
483
369
246
-
(1)
(2)
Other assets
2
-
-
38,745
68,954
24,570
Other liabilities
238,721
32,542
31,580
Loans
422,840
403,829
-
(51,468)
(48,287)
-
381
-
-
Other assets
57
-
-
36,131
-
-
Loans
-
33,964
26,514
-
(122)
(4,607)
Deposits
-
18,650
10,193
Other liabilities
-
50
43
Loans
3
2
3
Deposits
Other liabilities
Other assets
=-
647,300
Other liabilities
Korea Credit Bureau Co.,
Ltd.
= 1,000,000
457
Deposits
BC Card Co., Ltd.
January1,
2010
762,109
Deposits
Associates
December 31,
2010
Other assets
Loans
WFH
December 31,
2011
Deposits
Other liabilities
-
-
(1)
3,000
3,800
-
53
102
-
-
20
21
12,377
2,168
789
-
1
-
WOORI BANK
Related party
December 31,
2011
December 31,
2010
January1,
2010
Loans
45
47
40
(1)
(9)
(13)
Accounts
Korea Finance Security
Co., Ltd.
Co., Ltd.
Deposits
2,638
1,090
-
Other liabilities
23
-
-
Loans
20
19
42
(1)
(4)
(21)
1,457
1,080
820
201
179
13
2
-
-
742
-
-
Deposits
Other liabilities
st
United PF 1 corporate
financial stability
Deposits
Loans
LIG E&C Co., Ltd.
Deposits
186
Other liabilities
Other assets
Hyunjin Co., Ltd.
Deposits
Other liabilities
Others
Due from Banks
Woori Investment &
Securities Co., Ltd. and
subsidiaries
-
-
-
47
-
-
313
-
-
(313)
-
-
17,477
-
-
233
-
-
=-
= -
= 11,842
1,822
-
1,171
(342)
-
(29)
Other assets
8,141
2,867
598
794,100
402,705
352,832
13,454
9,784
28,070
143,195
154,695
71,812
Deposits
Other liabilities
Due from banks
-
1,579
-
42,722
36,997
43,223
Deposits
5,739
3,778
12,047
Borrowings
1,409
3,589
8,304
36,741
113,487
74,473
229
-
-
-
2,925
-
27,908
2,292
3,093
8,605
11,961
5,233
Borrowings
28,418
26,880
26,386
Other liabilities
11,770
29,646
45,898
Other assets
Other liabilities
Loans
Due from banks
Kwangju Bank
-
Loans
Borrowings
Kyongnam Bank
and subsidiaries
(70)
2,408
Other assets
Deposits
FINANCIAL REVIEW
Related party
December 31,
2011
December 31,
2010
January1,
2010
Loans
69
-
1,354
(1)
-
(233)
Accounts
Woori F&I Co., Ltd. and
subsidiaries
Other assets
96
5
797
89,301
73,307
32,207
403
199
232
20,054
20,133
20,155
(164)
(92)
(85)
Other assets
10,457
4,442
5,118
Deposits
19,301
35,180
39,922
1,000
6,624
6,791
15,577
12,017
6,329
-
1,035
-
50,510
639
349
(230)
(8)
(105)
84
1,198
354
Deposits
30,202
29,694
23,544
Other liabilities
18,823
21,645
22,188
Deposits
27,508
41,476
-
14
14
-
Loans
15,777
7,358
4,857
(3,716)
-
(2,426)
6,707
1,834
56,588
Deposits
Other liabilities
Loans
Woori Private Equity and
subsidiaries
Borrowings
Other liabilities
Due from banks
Loans
Other subsidiaries
of WFH
Other assets
Associates of
Woori F&I Co., Ltd.
Associates of Woori Private Equity
Other liabilities
Deposits
Other liabilities
Loans
Associates of Woori
Investment & Securities
Co., Ltd.
Deposits
Other liabilities
Loans
Woori Aviva Life Insurance
Co., Ltd.
Deposits
Other liabilities
22
-
966
11,300
74
96
(17)
-
(1)
9,292
4,392
3,996
14
59
18
371
348
243
(3)
-
(243)
2,642
7,638
480
690
136
803
WOORI BANK
(3) Gain or loss from transactions with related parties are as follows (Unit: Korean Won in millions):
Related party
Ultimate controlling
party (Government
related entity)
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 63,186
= 14,639
7,218
9,533
457
-
Other income
2,066
740
Interest expense
7,184
2,735
52,751
29,461
-
1
100
-
Accounts
Interest income
KDIC
Interest expense
Bad debt expense
Parent
WFH
Fees expense
Bad debt expenses
Other expense
Associates
Interest income
1,036
-
1
-
58
-
4
-
3,180
(27,747)
Dividends
55
55
Interest expense
60
57
Bad debt expenses
(Reversal of provision for credit loss)
(9)
2
Interest expense
65
135
Dividends
12
2
Other income
14
13
Interest expense
31
29
Bad debt expenses
(3)
(4)
Dividends
-
434
Fees income
-
41
14
18
Dividends
-
32,267
Fees income
-
1
Interest expense
-
483
Fees expenses
-
66
Reversal of provision for credit loss
-
(4,727)
(80,992)
-
Fees income
Interest expense
Fees expense
188
Bad debt expenses
Woori Service Networks Co.,
Ltd.
Woori Private Equity Fund and
subsidiaries
Interest expense
BC Card Co., Ltd.
United PF 1st corporate
financial stability
Other expense
FINANCIAL REVIEW
Related party
Accounts
Interest income
Fees income
LIG E&C Co., Ltd.
Interest expense
Fees expenses
Related party
Accounts
Associates
Interest income
Fees income
Hyunjin Co., Ltd.
Other income
Interest expense
Others
Interest income
Other subsidiaries of WFH
Kyongnam Bank and subsidiaries
55
-
2
-
(360)
-
111
-
6
-
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 374
=-
4
-
(388)
-
4
-
689
-
648
-
1,815
1,485
Other income
8,628
6,663
822
697
Interest expense
Fees expense
134
168
Bad debt expenses
227
(40)
Other expense
214,536
214,940
Other income
24,203
37,780
63
158
18,352
41,209
-
1
Interest expense
Interest income
Fees income
17
-
12,411
4,001
1,386
18,943
Fees expense
414
147
Bad debt expenses
336
5
Other expense
4,895
23,717
Interest income
1,299
326
Other income
1,918
1,107
707
1,134
11
-
Other income
Woori Private Equity and subsidiaries
For the year ended
December 31, 2010
Fees income
Other expense
Woori Investment & Securities
Co., Ltd. and subsidiaries
For the year ended
December 31, 2011
Interest expense
Interest expense
Fees expense
Bad debt expenses
Other expense
72
8
1,512
9,760
WOORI BANK
Related party
Accounts
For the year ended
December 31, 2011
For the year ended
December 31, 2010
3
-
1,972
48
Interest income
Kwangju Bank
Other income
Interest expense
967
968
1,027
2,520
53
55
Other income
193
106
Interest expense
996
366
1
-
Other expense
315
234
Interest expense
332
291
Other expense
Fees income
Woori F&I Co., Ltd. and subsidiaries
Bad debt expenses
Associates of Woori F&I Co.,
Ltd.
Associates of Woori Private
Equity
Interest expense
190
Related party
Accounts
Associates of Woori Investment
& Securities Co., Ltd.
142
777
3,716
5,550
For the year ended
December 31, 2011
For the year ended
December 31, 2010
17
(1)
Bad debt expenses
Bad debt expenses
Interest expense
126
132
14,893
-
135
13,088
Interest expense
13
155
Fees expense
25
26
3
67
Fees income
Other income
Woori Aviva Life Insurance Co.,
Ltd.
Bad debt expenses
(4) Guarantees provided to the related parties are as follows (Unit: Korean Won in millions):
December 31,
2011
December 31,
2010
January1,
2010
= 18,091
= 15,889
= 2,054
65
65
65
119,000
119,000
119,000
575
1,802
744
Financial guarantee in foreign currencies
-
1,708
584
Import credit in foreign currencies
-
305
579
287
-
-
Warranty
TY Second Asset Securitization
Specialty
(Guarantee for debenture issuances)
Loan commitment in local currency
Sempio Food Co., Ltd.
BK LCD Co., Ltd.
Hyunjin Co., Ltd.
For the guarantee provided to the related parties, the Group recognized provisions for guarantees amounting to =514 million, =1,214 million and
=1,242 million, respectively, as of December 31, 2011 and 2010 and January 1, 2010.
FINANCIAL REVIEW
(5) Details of compensation to key management are as follows (Unit: Korean Won in millions):
Salaries
Severance and retirement benefits
For the year ended
December 31, 2011
For the year ended
December 31, 2010
= 1,330
= 1,131
160
127
The key management represents non-executive directors and executive director. As of December 31, 2011 and 2010 and January 1, 2010, loans from
transactions with key management are =700 million, =720 million and =770 million, respectively. And allowance for these loans and bad debt
expense are =1 million.
44. OPERATING INCOME (EXPENSE)
The items reclassified from non-operating income or expense under K-GAAP to operating incomes or expenses under K-IFRS are as follows. (Unit:
Korean Won in millions)
Operating income in K-IFRS
For the year ended December
31, 2011
2010
= 2,683,084
= 1,497,629
(4,085)
11,733
(26,231)
6
8,612
2,231
Adjustments:
Gain (loss) on disposal and impairment of premises and equipment and
intangible assets
Gain (loss) on transaction of investment in associates
Debt collection fee
Donations
38,041
62,896
Other (miscellaneous profit and loss)
(95,522)
(13,173)
Sub-total
(79,185)
63,693
= 2,603,899
= 1,561,322
Operating income in previous GAAP
The above information reflects only the differences in the classifications of income and expense between K-IFRS and K-GAAP. And, it was measured by
current standards, which is K-IFRS. As such, the operating income for the year ended December 31, 2010, is not same as reported operating income
under
K-GAAP.
45. CREDIT CARD DIVISION SPLIT-OFF PLAN
As of September 16, 2011, the board of directors of WFH and the Group decide to split off the Bank’s credit card division and set up a new credit card
company to be a subsidiary of WFH. The Bank will disclose its credit card division as a discontinued operation when the Financial Supervisory Committee
approves the split off and the establishment of the new credit card company.
WOORI BANK
46. TRANSITION EFFECTS OF K-IFRS
In connection with adopting K-IFRS, the effects on the Group’s financial position, result of its operation due to the adoption of K-IFRS are as follows:
(1) Significant differences on accounting policies between K-IFRS and K-GAAP
Classification
K-IFRS
K-GAAP
Fair value as deemed cost
and revaluation cost
Fair value of lands and buildings as of the transition date
is to be regarded as net book value.
Not applicable
Accumulated foreign
currency translation
Accumulated foreign currency translation adjustments as
of the transition date are reset to ‘zero’.
Not applicable
Fair value evaluation of
financial assets and liabilities at the acquisition
date
Prospective approach is applied to the accounts which
are newly categorized into financial assets and liabilities
carried at fair value, as of the transition date.
Not applicable
K-IFRS 1309 ‘Financial instruments: Recognition and
derecognition’ is applied prospectively as of the
transition date.
Not applicable
Derecognition of financial assets and liabilities
192
First time
adoption
of K-IFRS
Designation of AFS securities or financial assets/
liabilities at FVTPL
Stock-based compensation
Decommissioning and
restoration liabilities
included in the cost of
premises and equipment
Lease
Investment in subsidiaries, jointly controlled
corporation and relatedparty entities
Designation of AFS financial assets or financial
assets/liabilities at FVTPL is principally allowed at the
acquisition date, with an exception of one time
designation for existing financial assets/liabilities at the
transition date.
Retroactive application of stock-based compensation as
per K-IFRS 1102 ‘Stock-based payment’ is not allowed.
Changes in a decommissioning and restoration liability
at the transition date are added to or deducted from
the cost of premises and equipment, by discounting the
liability using the discount rate at the date of acquisition.
Lease contracts existing as of the transition date are
subject to K-IFRS 1017 ‘Lease’, which is not applied
retrospectively.
When preparing separate financial statements in
accordance with K-IFRS 1027 ‘Consolidated and separate
financial statements’ , net book value of the investments
in subsidiaries, jointly controlled entities and associates
is regarded as the cost of the equity securities when the
cost method is applied.
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
FINANCIAL REVIEW
Classification
Change of consolidation Scope
K-IFRS
K-GAAP
Exceeding 50% of the voting power, having decision
making capability and holding benefits and risks
constitute control in determining the consolidation
scope.
Owning 30% of shares and being the
largest shareholder constitute control in
determining the consolidation scope,
except for special purpose entities (SPEs)
that meet certain criteria.
Derecognition of financial assets
Criteria such as risks, awards, control and continuing
involvement are to be sequentially considered in
determining derecognition timing and recognition
scope.
Classification of financial instruments
Financial assets are classified into financial assets at
FVTPL, AFS financial assets, HTM securities and loan and
receivables and financial liabilities consist of financial
liabilities at FVTPL and other liabilities
Measurement of financial instruments
Classification of investment property
Measurement of premises and equipment and investment property
Membership
Financial assets/liabilities at FVTPL and AFS financial
assets are required to be recorded at fair value with
credit risks reflected. HTM financial assets and loan and
receivables are to be measured at amortized cost with
the effective interest rate method applied.
Provision for credit loss should be recorded when
objective evidence of impairment exists as a result of
one or more events that occurred after initial recognition.
The disposal of financial assets is
contingent on the risks and rewards of
ownership of the financial assets, and
whether it has retained control of the
financial assets. However, certain
transactions such as asset securitization per
the Act on Asset-Backed Securitization are
considered sales transactions.
Assets are divided into cash and due
from banks, investment securities, trade
receivables, derivative assets and securities
consist of trading, AFS and HTM securities.
Liabilities are classified into deposits,
borrowings, debenture and others.
Certain financial instruments such as
trading securities, AFS securities and
derivatives, are recorded at fair value, and
the reflection of credit risk is not explicitly
mentioned.
Provision for credit loss to cover estimated
losses on loans, based on rational and
unbiased criteria, is recorded.
(It is higher of the amount applying the
percentage of loan loss provision
established by the Financial Supervisory
Commission or the amount based on loan
loss experience ratio.)
Property (land or building) to earn rentals is treated as an
investment property.
Property (land or building) to earn rentals is
treated as a premises and equipment.
It allows an entity to choose whether it adopts a
revaluation method or a cost method by asset
classifications and a cost method is adopted.
In accordance with asset classifications, the
asset cost method and asset revaluation
reserves are selected as alternative. In
addition, cost method is a selective option.
Classified into intangible asset with indefinite useful lives.
Classified into long-term deposit in other
non-current assets.
WOORI BANK
Classification
Changes in depreciation methods.
Measurement of retirement benefits
194
Financial guarantee
Liability/equity classification
K-IFRS
Residual value, useful lives and depreciation method of
property, plant and equipment are to be consistently
reviewed at least every fiscal year end and significant
changes, if any, should be treated as changes in
accounting estimates.
Both the defined benefit and defined contribution plans
are provided and the amounts of defined benefit
obligation are computed based on actuarial assumptions.
Accounted for as a financial guarantee asset or liability
if it is a contract that brings an obligation to an issuer to
compensate a loss incurred to a holder, in accordance
with the contract provisions, when debtor defaults at a
payment date. Recognize financial guarantee assets or
liabilities at fair value and subsequently amortize using
the effective interest method. Also, financial guarantee
liabilities are recorded at higher of provision for
guarantee loss or amortized cost.
Issuer classifies its financial instruments or components
of financial instruments as either financial liabilities or
equity instruments at the initial recognition, considering
the substance of the contractual arrangement and
definition of financial assets and equity instruments.
Classification of capital
Classification in capital is pursuant to the substance of
the contractual arrangement over its legal form.
Foreign currency translation
Closing exchange rates at year end for translation of
assets or liabilities denominated in foreign currencies,
and closing exchange rates at acquisition date for
stockholder’s equity should be applied. For other
comprehensive income items, average exchange rates for
the periods concerned should be used.
K-GAAP
Once depreciation method is determined,
it should be consistently applied to all of
newly acquired and existing assets.
Provisions for retirement benefits accrued
equal to the amounts to be paid at the end
of period, assuming that the all entitled
employees with a service year more than
a year would retire at once. Retirement
benefit expenses incur at the point when
the payment obligation is fixed.
Not applicable
Classification according to relevant legal
framework such as business law
Capital includes the legal amount paid by
shareholders (paid-in capital).
When applying the accounting standards
for the banking industry, closing rates are
used in translating the statement of
financial position and the statement of
income.
FINANCIAL REVIEW
(2) Changes in consolidation scope
Changes in consolidation scope due to adoption of K-IFRS are as follows:
Subsidiaries under K-GAAP
as of December 31, 2011
Subsidiaries under K-IFRS
Scope difference
-
Woori America Bank
Woori America Bank
-
-
-
Woori Bank (China) Limited
Woori Bank (China) Limited
-
Zao Woori Bank (Russia)
Zao Woori Bank (Russia)
-
-
New subsidiaries
and interest
Subject to consolidation as substantially controlled
by the Group under K-IFRS, however, it was excluded
from consolidation per the Act Concerning External
Auditor of Corporation under K-GAAP.
and interest
-
-
Not subject to consolidation as no substantive control
over principal recoverable trust is held by the Group
under K-IFRS, but subject to consolidation per the
Administrative Instructions of Banking Supervision
under K-GAAP.
-
Kumho Trust 1st Co., Ltd.
Consus 8th LLC.
Asiana Saigon Co., Ltd.
An-Dong Raja 1st Co., Ltd.
KAMCO Value Recreation 1st Securitization
Specialty Co., Ltd.
IB Global 1st
BWL 1st Co., Ltd.
Uri Pungsan Inc.
Pyeongtaek Ocean Sand Inc.
Subject to consolidation as substantially controlled
by the Group under K-IFRS, however, it was excluded
from consolidation under K-GAAP due to SPE’s limited
scope of operations.
WOORI BANK
Subsidiaries under K-GAAP
Subsidiaries under K-IFRS
Difference
th
-
196
(Unsold) G5 Pro Short-term 13th
Woori CS Ocean Bridge 7th
Woori Milestone Private Real Estate Fund 1st
Woori Milestone China Real Estate Fund 1st
Consus Sakhalin Real Estate Investment Trust 1st
Woori Partner Plus Private Trust 7th
Uri WB Private Investment Trust 3rd (Bond)
KDB Private Equity Securities Investment Trust WB 2nd
(Bond)
Hanwha Smart Private Trust 43rd (Bond)
Eugene Pride Private Trust 21st (Bond)
Merits Prime Private Trust 42nd (Bond)
Woori Frontier Alpha Private Equity 8th
Midas Private Investment Trust W-3rd
Consus Private Securities Investment Trust 54th
Allianz Blue Ocean Private Trust 5th
Kyobo Axa Long Short Private Trust 2nd
Hanhwa Quant Long Short Private Equity3rd
Hyundai Advantage Private Trust 14th
Mirae Asset Maps Blue Chips Private Trust 2nd
Hanwha Smart Private Trust 50th
Subject to consolidation as substantially controlled by the Group under
K-IFRS, however, it was excluded
from consolidation under K-GAAP
due to SPE’s limited scope of operations.
(3) The effects on the Group’s financial position and results of operation
The effects on the Group’s financial position and results of operation being listed below are set out based on the consolidated financial statements,
which may change with subsequent adoption of amendments to the standards and further analysis. Conversion effects to K-IFRS consist of those from
changes in the scope of consolidation, reclassifications and net asset changes due to GAAP differences.
1) Summary of the effects on the statement of financial position at January 1, 2010 (Date of transition, Unit: Korean Won in
millions):
Cash and due from banks
K-GAAP
Transition effects
K-IFRS
Ref.
= 16,423,075
= (11,382,929)
= 5,040,146
A
14,041,377
(1,706,532)
12,334,845
B
9,758,128
6,944,326
16,702,454
C
12,524,770
2,259
12,527,029
D
171,198,896
5,650,438
176,849,334
E
526,938
(278,106)
248,832
F
Consolidation and equity method investment
assets
FINANCIAL REVIEW
Investment properties
Premises and equipment
Intangible assets
K-GAAP
Transition effects
K-IFRS
Ref.
-
391,963
391,963
G
1,912,338
446,552
2,358,890
H
58,876
9,267
68,143
I
189,032
62,510
251,542
J
Current tax assets
12,364
4,013
16,377
Deferred tax assets
142,807
(120,138)
22,669
Derivatives assets
-
107,508
107,508
L
Assets held for sale
-
7,609
7,609
M
= 226,788,601
= 138,740
= 226,927,341
= 4,090,238
= 1,674,308
= 5,764,546
N
Deposits
151,830,533
(1,705,983)
150,124,550
O
Borrowings
20,044,523
707,812
20,752,335
P
Debentures
27,422,952
(3,946,849)
23,476,103
Q
708,604
(157,843)
550,761
R
6,928
(1,213)
5,715
8,437,189
(8,108)
8,429,081
Other assets
Total assets
Other provision
Other liabilities
K
S
612,668
80,514
693,182
T
-
146,104
146,104
U
Derivatives liabilities
-
64,597
64,597
V
= 213,153,635
= (3,146,661)
= 210,006,974
= 3,829,783
=-
= 3,829,783
W
-
2,181,806
2,181,806
X
812,283
(290)
811,993
Y
Total liabilities
Capital stock
Hybrid securities
Capital surplus
Other capital
1,135,843
56,420
1,192,263
X
Retained earnings
7,850,817
1,047,453
8,898,270
Z
6,240
12
6,252
= 13,634,966
= 3,285,401
= 16,920,367
Total equity
2) Summary of the effects on the financial position at December 31, 2010 and the results of operation for the year ended
December 31, 2010 (Unit: Korean Won in millions):
< Financial position >
K-GAAP
Transition effects
K-IFRS
Ref.
= 16,096,951
= (12,211,267)
= 3,885,684
A
12,886,643
(1,782,593)
11,104,050
B
12,710,459
3,899,631
16,610,090
C
Cash and due from banks
WOORI BANK
K-GAAP
Transition effects
K-IFRS
Ref.
15,918,785
1,532
15,920,317
D
167,892,488
9,738,387
177,630,875
E
539,637
(233,408)
306,229
F
-
366,874
366,874
G
1,863,112
471,274
2,334,386
H
27,000
12,366
39,366
I
140,897
66,570
207,467
J
-
2,833
2,833
130,479
(122,196)
8,283
Derivatives assets
-
133,224
133,224
L
Assets held for sale
-
5,185
5,185
M
= 228,206,451
= 348,412
= 228,554,863
= 3,235,439
= 1,494,136
= 4,729,575
N
Deposits
Consolidation and equity method investment
assets
Investment properties
Premises and equipment
Intangible assets
Other assets
Current tax assets
Deferred tax assets
Total assets
K
198
158,969,618
(1,655,309)
157,314,309
O
Borrowings
18,084,387
898,584
18,982,971
P
Debentures
23,989,424
(3,796,997)
20,192,427
Q
Other provision
763,990
(244,161)
519,829
R
110,517
(1,234)
109,283
8,658,335
141,602
8,799,937
S
203,681
74,076
277,757
T
-
107,425
107,425
U
Derivatives liabilities
-
34,419
34,419
V
= 214,015,391
= (2,947,459)
= 211,067,932
= 3,829,783
=-
= 3,829,783
W
-
2,181,806
2,181,806
X
Capital surplus
812,337
(916)
811,421
Y
Other capital
866,872
71,388
938,260
X
8,674,957
1,043,620
9,718,577
Z
7,111
(27)
7,084
= 14,191,060
= 3,295,871
= 17,486,931
Other liabilities
Total liabilities
Capital stock
Hybrid securities
Retained earnings
Total equity
<Results of operation >
FINANCIAL REVIEW
K-GAAP
Transition effects
K-IFRS
Ref.
= 11,105,685
= (124,637)
= 10,981,048
A
(6,024,477)
70,191
(5,954,286)
B
5,081,208
(54,446)
5,026,762
508,937
(15,144)
493,793
C
50,187
68,908
119,095
D
(30,006)
45,219
15,213
Gain (loss) on AFS financial assets
777,562
200,984
978,546
Impairment losses for loans, other receivables,
guarantees and unused commitments
(2,393,062)
(103,021)
(2,496,083)
Other operating income (expense)
(2,615,887)
(23,810)
(2,639,697)
1,378,939
118,690
1,497,629
37,850
1,374
39,224
1,416,789
120,064
1,536,853
308,150
(33,401)
274,749
Income on continuing operation
1,108,639
153,465
1,262,104
Other comprehensive income (loss)
(268,971)
15,097
(253,874)
= 839,668
= 168,562
= 1,008,230
Interest income
Interest expense
Net interest income
Net fees and commissions income
Dividend on securities
Operating income
Gain on investment in associates
Income on continuing operation before income tax expense
Income tax expense on continuing operation
Comprehensive income
E
F
G
H
I
J
K
3) Details of financial position reconciliation and results of operations reconciliation
Transition effects on financial position
A. Cash and due from banks
Certain money market funds (MMF), certificate of deposits (CD) and bank deposits included in cash and cash equivalents under K-GAAP are reclassified
into financial asset at FVTPL, AFS financial assets or loans and receivables under K-IFRS.
B. Financial assets at FVTPL
Cash and cash equivalents or AFS securities under K-GAAP are designated as or transferred to financial assets at FVTPL under K-IFRS. Fair value changes
due to credit risk adjustment and others result in a change in net assets.
C. AFS financial assets
Certain MMF and CD included in cash and cash equivalents under K-GAAP are transferred to AFS financial assets under K-IFRS. Also, some of
WOORI BANK
AFS securities under K-GAAP are designated as or reclassified to financial assets at FVTPL. In addition, different accounting methods on reversal of
impairment loss for AFS securities result in a decrease in net assets.
D. HTM financial assets
Application of the effective interest method to HTM securities measured at amortized cost results in a decrease in net assets.
E. Loans and receivables
Bank deposits included in cash and cash equivalents under K-GAAP are transferred to loans and receivables under K-IFRS and prepaid rental deposits
under K-GAAP are reclassified into other assets under K-IFRS. Also, changes in net assets are attributable to the different accounting treatments in
deferred loan fees and amortization method using the effective interest rate, combined with different set-out scope of provision for receivables and its
calculation methodology.
F. Investment in associates
Some securities accounted for under the equity method under K-GAAP are reclassified as AFS securities under K-IFRS. Accordingly, adjustments
200
regarding equity in earnings have changed the net asset amount.
G. Investment properties
Non-operating fixed assets included in property, plant and equipment under K-GAAP segregated and transferred to investment properties.
H. Premises and equipment
Non-operating fixed assets and assets to be disposed that have been recorded in other assets under K-GAAP are reclassified into investment properties
and assets held for sale, respectively, under K-IFRS. Also, acquisition cost adjustment due to revaluation of fixed assets and establishment of provision
for asset retirement result in change in net asset value.
I. Intangible assets
Among the deposits recognized under K-GAAP, membership deposit with the expected future economic benefits is reclassified as intangible asset under
K-IFRS.
J. Other assets
Prepaid rental expense in rental deposits under K-GAAP is transferred to other assets.
K. Deferred tax assets
Changes in deferral amount arising from fair value evaluation of financial asset/liability and different methodology of impairment assessment, along
with different depreciation expense and denial of provision liability have changed the amount of deferred tax asset under K-IFRS.
L. Derivatives assets
FINANCIAL REVIEW
Certain derivative instruments applicable to hedge accounting under K-GAAP are reclassified as a separate derivative asset (hedge) under K-IFRS and
the amount of net asset was changed by the net effects of fair value adjustments.
M. Assets held for sale
Properties to be disposed under K-GAAP are reclassified into assets held for sale under K-IFRS.
N. Financial liabilities at FVTPL
Some portion of corporate bonds are designated as and reclassified to financial liabilities at FVTPL. Fair value changes due to credit risk adjustment and
others result in a change in net assets.
O. Deposits
Changes in net assets are attributable to the application of the effective interest method in the calculation of interest expense for CD and equity-linked
securities (ELS), previously recognized as interest payable under K-GAAP, and net book value adjustments.
P. Borrowings
Changes in net assets are attributable to the application of the effective interest rate method in the calculation of interest expense for borrowings and
net book value adjustments.
Q. Debentures
Some debentures are designated as financial liabilities at FVTPL. Hybrid securities meeting the definition of capital, in substance, are reclassified as noncontrolling equity under K-IFRS. Changes in net assets are attributable to the difference in fair value measurement of the corporate bonds subject to
the hedge accounting and difference in amortization cost based on the effective interest rate method.
R. Other provision
Difference in calculation methodology of provision for unused commitment, guarantee and other liabilities results in changes in net assets.
S. Other financial liabilities
A substantial portion of unearned rental income recorded in rental deposits within other financial liabilities under K-GAAP are transferred to other
liabilities under K-IFRS. Changes in net assets are attributable to the changes in the carrying amount of accrued liabilities in relation to interest payables
on CD and ELS and the different calculation methodology for accrued vacation benefits.
T. Other liabilities
A substantial portion of unearned rental income recorded in rental deposits within other financial liabilities under K-GAAP are transferred to other
liabilities under K-IFRS. Changes in net assets are attributable to the separation of unearned revenue related to certain portions of provision for credit
card point rewards and the amount of unearned revenue reclassified to deferred loan fees.
U. Deferred tax liabilities
WOORI BANK
Changes in deferral amounts of asset and liability, derived by fair value measurement and impairment assessment, changes in depreciation expenses
and denial of provision liabilities result in an increase in deferred tax liabilities.
V. Derivatives liabilities
Certain derivative instruments applicable to hedge accounting under K-GAAP are reclassified as a separate derivative liability (hedge) under K-IFRS and
the amount of net asset was changed by the net effects of fair value adjustments.
W. Capital stock
Changes in capital were incurred due to fluctuation of exchange rate, applicable when translating capital of overseas subsidiaries.
X. Hybrid securities and other capital
The Group reclassified hybrid securities that meet the definition of capital in economic substance as a capital from liabilities. Gains of losses on fair value
measurement in relation to reclassification of AFS securities are transferred to retained earnings. In addition, net asset balance has been adjusted due
to the deferred income tax adjustment and others.
202
Y. Capital surplus
Certain amounts of capital surplus related to the equity method securities under K-GAAP are transferred to retained earnings using the deemed cost
method.
Z. Retained earnings
Reclassification of AFS securities and adoption of deemed cost to securities using the equity method changed the amount of retained earnings. In
addition, difference in fair value evaluation provisions, accrued interest expense and depreciation expense, along with revaluation of fixed assets and
profit/loss adjustment in association with financial guarantee contracts caused a change in retained earnings.
Transition effects on operational results
A. Interest income
The amount of interest income changes due to the difference in amortized deferred fee of loans and receivables using the effective rate method,
interest income recognized for impaired loans, and adjustments to accrued interest income for impaired loans. In addition, the change of time value
in account receivables associated with financial guarantee, transfer of interest income related to credit card points to unearned revenue, recognition
of present value discounts amounting to the substantial portion of prepaid rental expenses and its amortization cost using the effective rate method
result in changes in interest income.
B. Interest expense
Reclassification of hybrid securities from corporate bonds under K-GAAP to capital account under K-IFRS results in a transfer of interest expense to
dividend expense and a change in retained earnings. In addition, difference in amortized interest expenses with regards to financial liabilities and
exchange rate applied when translating interest expense of foreign currency denominated financial liabilities results in a change in interest expense.
FINANCIAL REVIEW
C. Net fees and commissions income
Fees and commissions income changes due to the adjusted deferred loan costs (fees) related to loans and receivables and the offset amount with
financial guarantee assets when fees and commissions related to financial guarantee contracts are received. Fees and commission expense changes due
to the adjusted deferred loan costs (fees) related to loans and receivables.
D. Dividend income
Certain equity method securities are reclassified into AFS securities and dividend income from these reclassified AFS securities has been recognized
accordingly.
E. Gain (loss) on financial assets at FVTPL
Different valuation amounts using fair value measurement derived by credit risk adjustments to derivative instruments result in changes in profit/loss
on financial assets
F. Gain (loss) on AFS financial assets
Profit or loss on AFS securities has been changed, responding to the account reclassification.
G. Impairment losses for loans, other receivables, guarantees and unused commitments on credit loss
Impairment losses for loans, other receivables, guarantees and unused commitments are caused by differences in the scope and calculation methodology
of provision for loans and receivables, and differences in the calculation of unused commitment and payment guarantee.
H. Other operating income (expense)
Changes in other operating income or expense are attributable to gains or losses on foreign currency transactions due to the different exchange
rates applied at the transaction date, changes in depreciation expenses due to the changed net book value of fixed assets and changes in selling and
administrative expenses contributed by changed vacation benefits and defined benefit retirement expense. Moreover, differences in rental income and
expense have occurred in regards with prepaid rental expense and unearned rental income, respectively.
I. Gain (loss) on equity method investments
The net effect of gain or loss on valuation of equity method under K-GAAP has been reversed as certain securities accounted for under the equity
method are reclassified to AFS securities under K-IFRS.
J. Income tax expense
Changes in income tax expense are attributable to the changes in deferred tax assets and liabilities.
K. Other comprehensive income (loss)
Reclassified AFS securities under K-IFRS made a change in the amount of other comprehensive income.
WOORI BANK
Organization
Chart
13 Units
7 Divisions
60 Departments
GENERAL
SHAREHOLDERS MEETING
BOARD OF DIRECTORS
(2 Offices, 52 Teams, 6 Centers)
PRESIDENT
& CHIEF EXECUTIVE OFFICER
MANAGEMENT COMMITTEE
LOAN COMMITTEE
DEPUTY PRESIDENT
SMALL & MEDIUM CORPO-
204
CONSUMER
BANKING
CORPORATE
BANKING
BUSINESS UNIT
BUSINESS UNIT
RATE
BANKING
BUSINESS UNIT
Corporate
Banking Product
Small & Medium
Corporate Banking
& Marketing
Dept.
Product & Marketing Dept.
Consumer
Banking
Strategy Dept.
PRIVATE
BANKING
HOUSING
FINANCE
DIVISION
DIVISION
Private Banking
Strategy Dept.
Housing Finance
Dept.
Affilication
Product Dept.
Housing
Fund Dept.
Sales
Support
Dept.
INSTITUTIONAL
BANKING
INVESTMENT
BANKING
BUSINESS UNIT
BUSINESS UNIT
Institutional
Sales Strategy
Investment
Banking
Dept.
Dept.
Public
Fund
Sales Dept
GLOBAL
BUSINESS UNIT
CARD
BUSINESS UNIT
FINANCIAL
MARKET
BUSINESS UNIT
Card
Strategy
Trading &
Investment
Dept.
Support Dept.
Financial
Advisory &
Alternative Investment Dept.
Card
Cooperation
Business Dept.
Treasury
Dept.
Project Finance
Dept.
Card Channel
Support Dept.
Trading
Dept.
Card Processing
Dept.
Securities
Trading Dept.
International
Banking Dept.
Channel
Development
Dept.
Customer
Service Center
Merchant
Banking Dept.
Sales Center
Corporate
Banking Center
Branch
RM /
Operation Team
Overseas
Branch
Merchant
Banking
Operation Team
BOARD GOVERNANCE COMMITTEE
STANDING AUDIT COMMITTEE
BOARD AUDIT COMMITTEE
MEMBER/DIRECTOR
BOARD RISK
BOARD COMPENSATION
EXECUTIVE RISK
COMMITTEE
FINANCE &
MANAGEMENT
PLANNING
UNIT.
HUMAN
RESOURCES
RISK
MANAGEMENT
UNIT
UNIT
COMPLIANCE OFFICER
CREDIT
SUPPORT UNIT
OPERATION &
SUPPORT UNIT
INTERNATINAL
TRADE BUSI-
UBIQUITOUS
BANKING
TRUST
BUSINESS
CHANNEL
SUPPORT
CORPORATE
RESTRUCTUR-
NESS DIVISION
DIVISION
DIVISION
DIVISION
ING DIVISION
Smart Banking
Dept
Trust Dept.
Synergy
Promotion
Strategy &
Control Tower
Dept.
Dept.
Products
Engineering
Dept.
Finance &
Planning Dept.
Human
Resources
Development
Dept.
IT Support
Dept.
Accounting
Dept.
Employee
Satisfaction
Center
International
Trade Business
Dept.
International
Trade Service
Center
Retirement
Ubiquitous
Banking Business Pension Business
Dept.
Dept.
Custody Agent
Dept.
Human
Resources Dept.
Risk
Management
Dept.
Loan Review
Dept.
Loan Policy
Dept.
Corporate
Restructuring
Dept.
General Affairs
Dept.
Retail Credit
Analysis &
Approval Dept.
Corporate
Restoration
Dept.
Loan Service
Center
SME Credit
Analysis &
Approval Dept.
Corporate
Recovery Dept.
Deposit Service
Center
Large Corporate
Credit Analysis &
Approval Dept.
Credit
Management &
Collection Dept.
Security
Control Dept.
Public
Relations
Dept.
Consumer
Protection
Center
Compliance
Dept.
Audit Dept.
Audit &
Management
Inspection Dept.
WOORI BANK
Global
Network
Woori America Bank, Ridgefield Br.
321 Broad Avenue #104 Ridgefield,
NJ 07657, USA
Phone: +1-201-941-9999
Fax: +1-201-941-4419
Woori America Bank, Main Street Br.
HEAD OFFICE
203 Hoehyon-dong, 1-ka,
Chung-ku, Seoul 100-792, Korea
Phone: +82-2-2002-3000
Swift: HVBKKRSE
OVERSEAS BRANCH
New York Agency
245, Park Ave. 43rd Floor,
New York, NY 10167, USA
Phone: +1-212-949-1900
Fax: +1-212-490-7146
Swift: HVBKUS33
LA Br.
3360, West Olympic Blvd. Suite 300,
Los Angeles, CA 90019, USA
Phone: +1-213-620-0747~8
Fax: +1-213-627-5438
Swift: HVBKUS6L
London Br.
206
9th Floor, 71 Fenchurch Street,
London, EC3M 4HD, UK
Phone: +44-207-680-0680
Fax: +44-207-481-8044
Dhaka Br.
Suvastu Imam Square (1st & 4th Fl.) 65 Gulshan
Avenue, Dhaka - 1212, Bangladesh
Phone: +880-2-881-3270~3
Fax: +880-2-881-3274/3241
Gaeseong Br.
Rm.101, Gaeseong Industrial District Management Committee Building 1st Floor, Bongdong-Ri,
Gaeseong, Hwanghae-Do, North Korea
Phone: +001-8585-2300~2
Fax: +001-8585-2303
Hochiminh City Br.
2 Floor, Kumho Asiana Plaza Saigon
39 Le Duan St., Dist 1, HCMC, Vietnam
Phone: +84-8-3821-9839
Fax: +84-8-3821-9838
Chennai Br.
6th Floor, EA Chambers, No. 49, 50L,
Whites Road, Royapettah, Chennai 600 014, India
Phone: +91-44-3346-6900
Fax: +91-44-3346-6995
183 Main Street Fort Lee,
NJ 07024, USA
Phone: +1-201-947-6666
Fax: +1-201-947-3226
Woori America Bank, Palisades Park Br.
225 Broad Avenue Palisades Park,
NJ 07650, USA
Phone: +1-201-346-0055
Fax: +1-201-346-0075
Woori America Bank, Closter Br.
234 Closter Dock Road Closter,
NJ 07624, USA
Phone: +1-201-784-7012
Fax: +1-201-784-7013
Woori America Bank, Cheltenham Br.
7400 Front Street Cheltenham,
PA 19012, USA
Phone: +1-215-782-2015
Fax: +1-215-782-8907
Woori America Bank, Elkins Park Br.
7300 Old York Rd Elkins Park,
PA 19027, USA
Phone: +1-215-782-1100
Fax: +1-215-782-1500
Sydney Br. temporary office
Tokyo Br.
Mitsui OSK Building 1st Fl.,
2-1-1 Toranomon, Minato-ku,
Tokyo 105-0001, Japan
Phone: +81-3-3589-2351
Fax: +81-3-3589-2359
Hong Kong Br.
Suite 1401, Two Pacific Place,
88 Queensway, Hong Kong
Phone: +852-2521-8016
Fax: +852-2526-7458
Singapore Br.
10 Marina Boulevard #13-05 MBFC Tower 2,
Singapore 018983 Singapore
Phone: +65-6223-5854~6
Fax: +65-6422-2000
Shanghai Br.
23F, LJZ Plaza,1600 Century Avenue,
Pudong New Area, Shanghai, 200122, China
Phone: +86-21-5081-9556
Fax: +86-21-5081-9557
Bahrain Br.
P.O. Box 1151, 4th Floor, Entrance 1, Manama
Centre Building, Manama, Bahrain
Phone: +973-17-223503
Fax: +973-17-224429
Hanoi Br.
11th Fl., Office Tower, Daeha Business Center 360
Kim Ma St., Ba Dinh Dist. Hanoi, Vietnam
Phone: +84-4-8315281
Fax: +84-4-8315271
Suite 25.03, Level 25, 363 George Street
Sydney NSW 2000 Australia
Phone: +61-2-8222-2200
Fax: +61-2-8222-2299
SUBSIDIARY
U.S.A
Woori America Bank
1250 Broadway New York,
NY 10001, USA
Phone: +1-212-244-3000
Fax: +1-212-736-5929
Woori America Bank, Broadway Br.
1250 Broadway New York,
NY 10001, USA
Phone: +1-212-244-1500
Fax: +1-212-736-5929
Woori America Bank, Flushing Br.
136-88 39th Avenue Flushing New York,
NY 11354, USA
Phone: +1-718-886-1988
Fax: +1-718-762-6898
Woori America Bank, Fort Lee Br.
2053 Lemoine Avenue Fort Lee,
NJ 07024, USA
Phone: +1-201-363-9300
Fax: +1-201-302-0452
Woori America Bank, Woodside Br.
43-22 50th St.
Woodside, NY 11377, USA
Phone: +1-718-429-1900
Fax: +1-718-429-2084
Woori America Bank, Annandale Br.
Seoul Plaza 4231 Markeham St,.
Suite F Annandale, VA 22003, USA
Phone: +1-703-256-7633
Fax: +1-703-256-7511
Woori America Bank, Bayside Br.
215-10 Northern Blvd. Bayside,
NY 11361, USA
Phone: +1-718-224-3800
Fax: +1-718-224-3828
Woori America Bank, Wheaton Br.
11925 Georgia Ave.
Wheaton, MD 20902(Wheaton Park Shopping
Center), USA
Phone: +1-301-933-1175
Fax: +1-301-933-1560
Woori America Bank, Wilshire Br.
3540 Wilshire Blvd. Unit 104,
Phone: +1-213-382-8700
Fax: +1-213-382-8787
Woori America Bank, Olympic Br.
2610 W. Olympic Blvd.,
Phone: +1-213-738-1100
Fax: +1-213-738-1101
Woori America Bank, Fullerton Br.
5731 Beach Blvd.,
Buena Park, CA 90621, USA
Phone: +1-714-521-3100
Fax: +1-714-521-3101
Woori America Bank, Garden Grove Br.
Woori Bank (China) Ltd., Shanghai Wuzhonglu
Cibubur Sub-Branch Office
10120 Garden Grove Blvd.,
Garden Grove, CA 92844, USA
Phone: +1-714-534-6300
Fax: +1-714-534-6301
Sub-Br.
1C, Liaoshen Building, 1068 Wuzhong Rd.
Minhang Distrct, Shanghai, 200336,China
Phone: +86-21-6446-7887
Fax: +86-21-6446-1200
Cibubr Time Square Blok B1/1(3 floors)
Jatisampurna Bekasi, Indonesia
Phone: +62-21-8430-5050
Fax: +62-21-8430-5353
Swift: HVBKIDJA
Woori Bank (China) Ltd., Shenzhen Futian Sub-Br.
Krakatau Posco Sub-Branch Office
Room 107,201, Daqing Building, No. 6027, Shen
Nan Road, Futian District, Shenzhen, China
Phone: +86-755-8826-9000
Fax: +86-755-8826-9038
Jl. Afrika No.2 Krakatau Industrial Estate,
Chilegon 42443, Indonesia
Phone: +62-25-436-9755
Fax: +62-25-436-9759
Swift: HVBKIDJA
Woori America Bank, Centreville Br.
13830 A-12 Braddock Road,
Centreville, VA 20121, USA
Phone: +1-703-988-9555
Fax: +1-703-988-9554
CHINA
Woori Bank (China) Ltd.
Woori Bank (China) Ltd., Shanghai Jinxiujiang-
26F, Tower A, Tianyuangang Centre, C2, North
Road, East Third Ring Road, Chaoyang District,
Beijing, 100027, China
Phone: +86-10-8412-3000
Fax: +86-10-8440-0698
nan Sub-Br.
HONGKONG
1F, 188 South Jinhui Road, Minhang District,
Shanghai, 200237, China
Phone: +86-21-3432-1116
Fax: +86-21-3432-1112
Woori Bank (China) Ltd., Head office business
Woori Bank (China) Ltd., Beijing Shunyi Sub-Br.
1F, Tower A, Tianyuangang Centre, C2, North
Road, East Third Ring Road, Chaoyang District,
Phone: +86-10-8441-7771
Fax: +86-10-8446-4631
1F Tower A, AMB Building, 2, Cangshang St,
Shunyi District, 101300, China
Phone: +86-10-8945-2220
Fax: +86-10-8949-3560
Woori Bank (China) Ltd., DaLian Br.
Woori Bank (China) Ltd., Beijing Br.
1F, West Tower, Twin Towers, B-12 Jianguomenwai
Avenue, Chaoyang District, Beijing,
100022, China
Phone: +86-10-8453-8880
Fax: +86-10-8453-8881
Woori Bank (China) Ltd., Shanghai Br.
Drum Building 1-2F, Pos- Plaza, 1600 Century
Avenue, Pudong New Area, Shanghai, 200122,
China
Phone: +86-21-5081-0707
Fax: +86-21-5081-2484
Woori Bank (China) Ltd., Shenzhen Br.
B0105, B0210 Rongchao Landmark, 4028 Jintian
Road, Futian District, Shenzhen, China
Phone: +86-755-3338-1234
Fax: +86-755-3338-7227
YOMA IFC, No.128 Jinma Road, Dalian Development Area, Dalian, 116600, P.R. China
Phone: +86-411-8765-8000
Fax: +86-411-8765-8515
Zao Woori Bank Saint-Petersburg Br.
OVERSEAS OFFICE
MALAYSIA
Woori Bank (China) Ltd., Chengdu Br.
Unit 1of 1F, Unit 3-6 of 3F, Zhonghui Plaza(Phase II)
No. 1 Renmin South Road, Chengdu,
610044, China
Phone: +86-28-6557-2366
Fax: +86-28-6357-2369
Woori Bank Kuala Lumpur Representative Office
Suite 3A-2, Level 3A, Menara IMC, 8, Jalan Sultan
Ismail, 50250, Kuala Lumpur, Malaysia
Phone: +603-2078-0688
Fax: +603-2072-0688
UAE
Woori Bank Dubai Representative Office
INDONESIA
16th Fl., Jakarta Stock Exchange Bldg., JL. Jend
Sudirman Kav.52-53, Jakarta 12190, Indonesia
Phone: +62-21-515-1919
Fax: +62-21-515-1477
Swift: HVBKIDJA
Woori Bank (China) Ltd., TianJin Br.
Tangerang Sub-Branch Office
Ruko Pinangsia Blok H No.1 Lippo
Karawaci-Tangerang 15139, Indonesia
Phone: +62-21-5577-2345
Fax: +62-21-5577-6363
Swift: HVBKIDJA
Woori Bank (China) Ltd., Shanghai Puxi Sub-Br.
1F, No 10, Furong Street, Chaoyang District,
Phone: +86-10-8471-8866
Fax: +86-10-8471-5245
8th floor, Lotte Plaza, 8, Novinsky Boulevard,
Moscow, 121099, Russia
Phone: +7-495-783-9787
Fax: +7-495-783-9788
11 Renmin East Road, Zhangjiagang, 215600,
China
Phone: +86-512-5636-6696
Fax: +86-512-5636-6697
101B, Sovereign Building, #8 Suhua Road,
Suzhou Industrial Park,Jiangsu, China
Phone: +86-512-6295-0777
Fax: +86-512-6295-2141
Woori Bank (China) Ltd., Beijing Wangjing Sub-Br.
Zao Woori Bank
Woori Bank (China) Ltd., Zhangjiagang Sub-Br.
P.T.Bank Woori Indonesia
S115-S119, 1/F Maxdo center NO.8 Xing Yi Rd.
Hong Qiao Development Zone Shanghai, 200336,
China
Phone: +86-21-6235-1717
Fax: +86-21-6235-1036
RUSSIA
1st Floor, Atlantic City, 126 Savushkina Street,
Saint-Petersburg, 197374, Russia
Phone: +7-812-327-9787
Fax: +7-812-327-9789
Woori Bank (China) Ltd., Suzhou Br.
No. 1 Building, Aocheng Commercial Square,
Binshui West Road, Nankai District, Tianjin,
300381, China
Phone: +86-22-2338-8008
Fax: +86-22-2392-5905
Rooms 1905-1908, 19/F, Gloucester Tower, The
Landmark,15 Queen’s Road Central, Hong Kong
Phone: +852-3763-0888
Fax: +852-3763-0808
Cikarang Sub-Branch Office
Cikarang Commercial Center Block A1~A2, J1
Cikarang-Cibarusah KM.40 No.2, Cikarang Selatan
Bekasi.,Indonesia
Phone: +62-21-8983-5270
Fax: +62-21- 8983-5271
Swift: HVBKIDJA
#619, Level 6, Liberty House. DIFC, P.O.Box
506760, Dubai, U.A.E.
Phone: +971-4-325-8365
Fax: +971-4-325-8366
BRAZIL(BRASIL)
Woori Bank São Paulo Representative Office
Rua Quintana, 887/Cj. 121, Brooklin Novo,
04569-011, São Paulo, SP, Brasil
Phone: +55-11-2309-4740
Fax: +55-11-2309-4739
Woori Bank
makes
you
confident
in life
!
203 Hoehyon-dong, 1-ka, Chung-ku, Seoul 100-792, Korea
Tel. +82-2-2002-3000
www.wooribank.com