6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2017

Woori Bank

(Translation of Registrant’s name into English)

51, Sogong-ro, Jung-gu, Seoul, 04632, Korea

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):   ☐+65

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submission to furnish a report or other document that the registration foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Index

1.	Summary of 2017 First Half Business Report
2.	Exhibit 99.1 Woori Bank Review Report for 2017 2Q (Consolidated)
3.	Exhibit 99.2 Woori Bank Review Report for 2017 2Q (Separate)

2

Summary of 2017 First Half Business Report

Table of Contents

I.       INTRODUCTION OF THE BANK	5
1.      Overview of the Bank	5
2.       Capital Structure (Changes in Capital)	9
3.      Total Number of Authorized Shares	10
4.      Voting Rights	10
5.      Dividend Information	10
II.     BUSINESS OVERVIEW	11
1.      Results of Operations	11
2.      Business Performance by Operation	11
3.      Funding Sources and Use of Funds	14
4.       Other Information Necessary for Making Investment Decisions	16
III.    FINANCIAL INFORMATION	18
1.       Condensed Financial Statements (Consolidated)	18
2.       Condensed Financial Statements (Separate)	20
IV.   INDEPENDENT AUDITOR’S OPINION	22
1.      Independent Auditor’s Opinion	22
2.       Compensation to the Independent Auditor for the Past Three Years	22
V.      CORPORATE GOVERNANCE AND AFFILIATED COMPANIES	23
1.      About the Board of Directors	23
2.      Affiliated Companies (as of June  30, 2017)	24
VI.   SHAREHOLDER INFORMATION	25
1.      Share Distribution	25
2.       Stock Price and Stock Market Performance	26
VII.  DIRECTORS AND EMPLOYEE INFORMATION	27
1.      Directors	27
2.      Employee Status	27
3.      Directors’ Compensation	28
VIII.RELATED PARTY TRANSACTIONS	28

3

Except where indicated otherwise, financial information contained in this document (including the attached financial statements) has been prepared in accordance with the Korean equivalent of International Financial Reporting Standards (“Korean IFRS”), which differ in certain important respects from generally accepted accounting principles in the United States.

All references to “Woori Bank,” “we,” “us” or the “Bank” are to Woori Bank and, unless the context requires otherwise, its subsidiaries. In addition, all references to “Won” or “KRW” in this document are to the currency of the Republic of Korea.

4

I. Introduction of the Bank

1. Overview of the Bank

a. History

(1) Background: Major developments.

March 27, 2001	Became a subsidiary of Woori Finance Holdings Co., Ltd. (“Woori Finance Holdings”)
December 31, 2001	Merged with the spun off banking division of Peace Bank of Korea
January 31, 2002	Transferred the credit card business of Hanvit Bank to Woori Card
May 22, 2003	Awarded Republic of Korea Corporate Image Grand Prize – Grand Prize for CI and First Prize for Knowledge Management
July 31, 2003	Merged with Woori Investment Bank
March 31, 2004	Merged with Woori Credit Card
September 7, 2004	Selected as 2004 Top Bank of Korea by British magazine “The Bankers”
November 4, 2005	Opened the first comprehensive financial office in the financial sector, “Woori Finance Plaza”
May 19, 2006	Established Korea BTL Infrastructure Fund
December 1, 2006	Officially launched Woori Global Markets Asia Limited
November 12, 2007	Established a local legal entity in China, Woori Bank China Ltd.
January 9, 2008	Established a local legal entity in Russia, ZAO Woori Bank
December 16, 2008	Issued 70,000,000 convertible preferred shares (par value KRW 5,000, issue price KRW 10,000)
April 1, 2009	Issued 60,000,000 common shares for increase in capital
April 1, 2009	Selected as “Outstanding Company in Gender Equal Employment” sponsored by the Ministry of Labor
December 15, 2009	Awarded Asian Financial Culture Grand Prize “Top Prize in Community Activities”
March 21, 2010	Woori Bank China Ltd. acquired qualification as a “settlement bank for Renminbi currency in international trade”

5

April 18, 2011	Woori Smile Microcredit executed an MOU to jointly support microcredit with the Ministry of Land, Transport and Maritime Affairs
April 25, 2012	Awarded “2012 Top Bank of Korea” by the Asian Banker for two consecutive years
August 30, 2012	Awarded 2012 Asia PB Top Award by Asia Economic Daily
September 25, 2012	Woori Brazil Bank began business
October 11, 2012	Selected as “Top Financial Institution for Anti-Money Laundering”
November 7, 2012	Awarded Grand Prize for the First Awards for Protection of Financial Consumers in 2012 by the Korea Economic Daily
November 29, 2012	Awarded Presidential Award sponsored by the Financial Supervisory Commission for “Anti-Money Laundering”
December 6, 2012	Awarded “2012 Grand Prize for Small Loan Financing”
December 13, 2012	Awarded Grand Prize for “2012 Aju Economy and Finance Award”
January 17, 2013	Awarded Grand Prize for Top Customer Service
March 27, 2013	Awarded Grand Prize for Woori Bank “Two Chairs” PB services for four consecutive years
April 1, 2013	Spun off its credit card business
June 27, 2013	Number 1 in Korean Standard-Service Quality Index (KS-SQI) for three consecutive years
October 4, 2013	Selected by National Pension Fund as “Top Foreign Exchange Bank”
December 19, 2013	Awarded “Grand Prize for Small Loan Finance” sponsored by the FSS
January 3, 2014	Awarded final approval to acquire Indonesia’s Saudara Bank 115th anniversary of the establishment of the Bank
January 9, 2014	Awarded “2014 Grand Award for Customer Service”
February 21, 2014	Awarded Grand Prize for “Republic of Korea Top Bank”
March 26, 2014	The Bank re-selected as “the main bank for the City of Seoul”

6

April 1, 2014	Established business agreement with Ministry of Health and Welfare for promotion of philanthropic culture
April 17, 2014	Woori Short Term National/Public Bond Fund reached KRW 100 billion in commitments
April 24, 2014	Became the First domestic bank to issue Basel III subordinated debt in foreign currency (USD 1 billion)
May 21, 2014	Awarded “Korea’s Top Bank in Money Management” by Asian Banker in 2014
July 28, 2014	The Bank’s board of directors approves the merger between Woori Finance Holdings and Woori Bank (the “Merger”)
September 30, 2014	The KDIC announced the sale of the controlling stake (30%) in Woori Bank
October 10, 2014	The first Korean bank to issue Yuan-denominated bonds
November 1, 2014	Woori Finance Holdings merged with and into the Bank
November 10, 2014	Opened office in Vladivostok, Russia
December 30, 2014	Inaugurated the 49th President of the Bank, Kwang-Goo Lee
	Awarded final approval to merge PT. Bank Woori Indonesia with Saudara Bank
February 26, 2015	PT. Bank Woori Saudara Indonesia officially launched
March 31, 2015	Commemoration of the 100 year partnership between Woori Bank and Seoul Metropolitan Government
May 26, 2015	Launched mobile-only bank, WiBee Bank
	WiBee Bank mobile loan products released
August 20, 2015	Launched Woori-Samsung Pay Service
September 19, 2015	Launched first overseas service of WiBee Bank, ‘WiBee Bank Cambodia’
November 29, 2015	K-Bank is selected as the first internet-only bank (Woori Bank stake 10%)
January 6, 2016	Launched 1st bank mobile messenger service, WibeeTalk
June 24, 2016	First Korean Bank to launch offshore Won-Yuan clearing services

7

September 21, 2016	Successfully issued $500 million foreign currency denominated contingent convertible bonds, the first in the form of perpetual bonds in Korea.
November 13, 2016	The FSC announced the KDIC’s successful privatization efforts through the sales of a combined 29.7% ownership interest in Woori Bank to seven financial companies
December 8, 2016	Selected as 2016 Top Bank of Korea by British magazine “The Bankers”
December 27, 2016	Achievement of an overseas network comprising 250 branches
December 28, 2016	The number of users of WiBee platforms, WiBee Talk and WiBee Members, exceeds 3 million
January 12, 2017	Selected as the 2016 Best Korean Wealth Management Provider by British magazine “World Finance”
January 16, 2017	Opened Gurgaon Branch, India
February 5, 2017	Opened office in Katowice, Poland, the first among Korean banks
March 28, 2017	Launched SORi, the first voice recognition AI banking service in Korea
June 8, 2017	Awarded “Best Transaction Bank” and “Top Bank in Money Management” by Asian Banker
June 21, 2017	Launched overseas remittance service with an Indonesian telecommunications company, the first in the Korean financial sector
June 28, 2017	Received a Presidential Citation for “social enterprise fosterage” from the Ministry of Employment and Labor, the sole recipient from the Korean financial sector.

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b. Affiliated Companies

(1) Overview of Business Group

1. Name of business group: Woori Bank

(2) Affiliated companies within the business group

As of June 30, 2017

Type	Name of Company			Equity ownership			Controlling Company	Notes
Company	*Woori Bank				—		—	—
First Tier Subsidiaries	Woori Card				100.00	%	Woori Bank	18 companies
	*Woori Investment Bank				58.15	%
	Woori FIS				100.00	%
	Woori Private Equity Asset Management				100.00	%
	Woori Finance Research Institute				100.00	%
	Woori Credit Information				100.00	%
	Woori Fund Services				100.00	%
	Korea BTL Infrastructure Fund				99.87	%
	Woori America Bank				100.00	%
	*PT. Bank Woori Saudara Indonesia				74.02	%
	AO Woori Bank	(1share	)		100.00	%
	Woori Bank China Limited				100.00	%
	Woori Bank Brasil	(1share	)		100.00	%
	Woori Finance Cambodia				100.00	%
	Woori Finance Myanmar				100.00	%
	Woori Wealth Bank Philippines				51.00	%
	Woori Bank Vietnam				100.00	%
	Woori Global Markets Asia Ltd.				100.00	%
Second Tier Subsidiaries	Woori Private Equity Fund**				0	%	Woori Private Equity Asset Management	4 companies
	Woori Blackstone Korea Opportunity Private Equity Fund No.1				26.40	%
	Woori Columbus Private Equity Fund No.1 **				0	%
	TUTU Finance-WCI Myanmar				100.00	%	Woori Card

* Listed Companies : Woori Bank, Woori Investment Bank and PT. Bank Woori Saudara Indonesia

** Has completed liquidation and as of June 30, 2017, equity ownership is 0%; due to incomplete dissolution, currently is included as a second tier subsidiary

2. Capital Structure (Changes in Capital)

As of June 30, 2017 (units: Won, shares)

Date	Category	Stock Decrease/Increase
		Type		Quantity		Par Value		Issue price		Note
4.1.2013	Capital reduction with compensation		Common		153,797,130		5,000		5,000	Capital reduction due to spin off of credit card business
4.1.2013	Capital reduction with compensation		Preferred		15,469,070		5,000		10,000	Capital reduction due to spin off of credit card business
6.5.2013	Exercise of conversion rights		Common		54,530,930		5,000		10,000	Reduction in preferred shares due to exercise of rights to convert convertible preferred shares
6.5.2013	Exercise of conversion rights		Preferred		54,530,930		5,000		10,000	Increase in common shares due to exercise of rights to convert convertible preferred shares
11.3.2014	—		Common		596,690,380		5,000		5,000	Capital reduction due to the merger with Woori Finance Holdings *
11.3.2014	—		Common		676,278,371		5,000		5,000	Increase in common shares (new issuance of shares) due to the merger with Woori Finance Holdings *
10.2.2015	—		Common		278,371		5,000		—	Retirement of shares**

* Upon consummation of the merger with Woori Finance Holdings, 596,690,380 shares of the Bank were cancelled and 676,278,371 shares were newly issued according to the merger ratio.

** On October 2, 2015, 278,371 shares were retired and the total number of shares issued changed to 676,000,000 shares. There was no decrease to Woori Bank’s capital as the number of outstanding shares remained the same. [Related Disclosure : Report on Form 6-K submitted by Woori Bank on September 11, 2015, entitled “Resolution Relating to Retirement of Shares”]

9

3. Total Number of Authorized Shares

As of December 31, 2016 (unit: shares)

	Type
Items	Common Shares		Total
Total number of shares authorized		5,000,000,000		5,000,000,000
Total number of shares issued to date		676,000,000		676,000,000
Number of treasury shares		2,728,774		2,728,774
Number of outstanding shares		673,271,226		673,271,226

* Upon consummation of the merger with Woori Finance Holdings, 596,690,380 shares of the Bank were cancelled and 676,278,371 shares were newly issued according to the merger ratio.

* On September 30, 2015 Woori Bank terminated its trust agreement and acquired 2,913,155 treasury shares which were deposited into Woori Bank’s treasury share account. On October 2, 2015, 278,371 of such acquired shares were retired. [Related Disclosure : Report on Form 6-K submitted by Woori Bank on September 11, 2015, entitled “Resolution Relating to Retirement of Shares”]

4. Voting Rights

As of December 31, 2016 (unit: shares)

Items		Number of stock		Notes
Total number of shares issued	Common Shares		676,000,000		—
	Preferred Shares		—		—
Number of shares without voting rights	Common Shares		2,728,774		Note 1	)
	Preferred Shares		—		—
Number of shares for which voting rights are excluded pursuant to the articles of incorporation	Common Shares		—		—
	Preferred Shares		—		—
Number of shares for which voting rights are limited by law	Common Shares		2,661,978		Note 2	)
	Preferred Shares		—		—
Number of shares for which voting rights have been restored	Common Shares		—		—
	Preferred Shares		—		—
Number of shares for which voting rights may be exercised	Common Shares		670,609,248		—
	Preferred Shares		—		—

Note1) The shares without voting rights are treasury shares. Please see “I. Introduction of the Bank- 3. Total Number of Authorized shares.”

Note2) Pursuant to Article 16-2(2) of the Banking Act, a non-financial business operator is restricted from exercising voting rights in excess of 4% of the total number of outstanding voting shares of a bank at the AGM held on March 24, 2017

5. Dividend Information

Items		1H 2017		2016		2015
Par value per share (Won)			5,000		5,000		5,000
Net profit (Millions of Won)			1,098,360		1,261,266		1,059,157
Earnings per share (Won)			1,497		1,567		1,301
Total cash dividends (Millions of Won)			67,327		269,308		336,636
Total stock dividends (Millions of Won)			—		—		—
Cash dividend payout ratio (%)			6.13		21.35		31.8
Cash dividend yield (%)	Common Shares		0.57		3.01		5.50
	Preferred Shares		—		—		—
Stock dividend yield (%)	Common Shares		—		—		—
	Preferred Shares		—		—		—
Cash dividend per share (Won)	Common Shares		100		400		500
	Preferred Shares		—		—		—
Stock dividend per share (Won)	Common Shares		—		—		—
	Preferred Shares		—		—		—

* Based on K-IFRS consolidated financial statements

* 2015 figures include the interim dividend amount (Interim cash dividend per share : 250 Won, Total cash dividends : 168,318 million Won)

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II. Business Overview

1. Results of Operations

As of June 30, 2017 (unit: 100 millions of Won)

Type	1H 2017		1H 2016		2016		2015
Operating income		14,842		9,491		15,742		13,516
Non-operating income		805		702		1,690		3,140
Non-operating expenses		1,348		1,082		1,898		2,136
Ordinary profits		14,299		9,111		15,534		14,519
Income from continuing operations before income tax		14,299		9,111		15,534		14,519
Income tax expense from continuing operations		3,209		1,533		2,759		3,766
Income from discontinued operations		—		—		—		—
Net income		11,090		7,578		12,775		10,754

* Based on K- IFRS consolidated financial statements

2. Business Performance by Operation

a. Deposit Services

As of June 30, 2017 (unit: millions of Won)

Type		1H 2017			2016			2015
Deposits received in local currency	Demand deposits		7,828,154			9,491,680			9,728,839
	Money trusts		1,378,153			1,360,176			1,304,268
	Fixed deposits		190,437,245			183,723,369			175,598,522
	Mutual funds		35,623			37,128			40,888
	CDs		4,873,176			3,836,429			2,435,087
	Other deposits received		1,050,194			1,146,459			922,749
Deposits received in foreign currencies			20,643,537			21,453,097			19,129,214
Present value discount			(45,505	)		(27,927	)		(17,739	)
Total			226,200,577			221,020,411			209,141,826

* Based on K- IFRS consolidated financial statements

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b. Loan Services

(a) Balances of Loans by Type

As of June 30, 2017 (unit: millions of Won)

Type	1H 2017		2016		2015
Loans in local currency		194,331,398		191,309,481		185,154,851
Loans in foreign currencies		16,725,048		17,855,868		17,910,253
Guarantee payments		25,760		25,197		44,242
Total		211,082,118		209,190,547		203,109,346

* Based on K- IFRS consolidated financial statements

* Loans in foreign currencies includes domestic banker’s letter of credit (usance)

(b) Loans by Purpose of Funds

As of June 30, 2017 (unit: millions of Won)

Type		1H 2017		2016		2015
Corporate loans	Working capital loans		44,435,111		44,957,542		50,646,880
	Facilities loans		39,313,474		36,858,776		32,858,237
Household loans			56,864,163		54,939,608		51,606,328
Public and other loans	Working capital loans		1,440,474		1,764,781		2,585,869
	Facilities loans		1,748,968		1,748,878		1,741,230
Mortgage loans			50,198,551		50,807,744		44,812,233
Inter-bank loans			200,015		142,032		834,301
Other loans			130,672		90,120		69,771
Total			194,331,428		191,309,481		185,154,851

* Balance of loans in local currency based on K- IFRS consolidated financial statements

(c) Loan-to-deposit ratio

(unit: 100 millions of Won, %)

Type	1H 2017		2016		2015
Loans in local currency		1,935,714		1,918,176		1,857,984
Deposits received in local currency (excluding CDs)		1,945,899		1,940,301		1,846,329
Ratio		98.14		97.39		98.83

* Based on K-IFRS separate financial statements

* Loan-to-deposit ratio = (Average monthly balance of loans in local currency – Average monthly balance of policy loans) / (Average balance of deposits received in local currency (excluding CDs) + Covered bonds issued with over 5 year maturities)

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c. Guarantees

As of June 30, 2017 (unit: millions of Won)

Type	1H 2017		2016		2015
Confirmed guarantees		7,311,218		8,270,187		9,069,247
Unconfirmed guarantees		4,498,626		5,101,701		6,631,055
Commercial paper purchase commitments and others		1,350,566		1,389,896		1,615,141
Total		13,160,410		14,761,784		17,315,443

* Based on K- IFRS consolidated financial statements

d. Securities Investment

As of June 30, 2017 (unit: millions of Won)

Type	1H 2017		2016		2015
Securities at fair value through profit or loss		2,879,138		2,726,249		2,717,276
Available-for-sale financial assets		19,623,170		20,817,583		17,170,592
Held-to-maturity financial assets		15,144,766		13,910,251		13,621,640
Investments in associates		370,799		439,012		643,861
Total		38,017,873		37,893,095		34,153,369

* Based on K- IFRS consolidated financial statements

e. Trust Business

As of June 30, 2017 (unit: millions of Won)

Type	1H 2017				2016				2015
	Trust Funds		Trust Fees		Trust Funds		Trust Fees		Trust Funds		Trust Fees
Money trust		29,317,440		63,197		26,019,180		73,814		23,980,475		49,973
Property trust		12,985,830		2,077		12,714,338		4,803		9,354,003		1,323
Total		42,303,270		65,274		38,733,518		78,617		33,334,478		51,296

* Trust funds indicate average balances.

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3. Funding Sources and Use of Funds

a. Sources of Funds

[Bank Accounts]

(Unit: millions of Won, %)

Classification	Funding Source	1H 2017						2016						2015
		Average Balance		Interest Rate		Proportion		Average Balance		Interest Rate		Proportion		Average Balance		Interest Rate		Proportion
Local currency funds	Deposits received in local currency		185,928,457		1.27		66.09		183,440,285		1.38		65.35		169,919,620		1.70		64.76
	Certificates of deposit		4,146,557		1.66		1.47		3,466,223		1.70		1.23		1,879,832		1.92		0.72
	Borrowings in local currency		6,289,252		1.33		2.24		6,709,080		1.45		2.39		6,689,135		1.77		2.55
	Call money in local currency		1,426,801		1.21		0.51		1,159,188		1.32		0.41		1,370,253		1.62		0.52
	Others		19,141,893		2.35		6.80		18,532,241		2.60		6.60		18,944,493		2.95		7.22
	Subtotal		216,932,959		1.37		77.11		213,307,017		1.50		75.98		198,803,334		1.82		75.77
Foreign currency funds	Deposits received in foreign currencies		14,328,557		0.48		5.09		14,838,684		0.47		5.29		11,568,322		0.44		4.41
	Borrowings in foreign currencies		7,134,695		1.26		2.54		8,595,575		0.86		3.06		9,245,073		0.53		3.52
	Call money in foreign currencies		1,323,185		1.09		0.47		1,401,294		0.70		0.50		1,199,484		0.53		0.46
	Debentures in foreign currencies		3,654,923		3.01		1.30		3,950,614		2.54		1.41		4,851,289		2.72		1.85
	Others		519,941		0.15		0.18		531,877		0.29		0.19		650,409		0.66		0.25
	Subtotal		26,961,300		1.05		9.58		29,318,044		0.87		10.44		27,514,577		0.88		10.49
Others	Total capital		20,025,753		—		7.12		19,617,484		—		6.99		18,501,137		—		7.05
	Provisions		358,096		—		0.13		412,553		—		0.15		640,666		—		0.24
	Others		17,067,839		—		6.07		18,070,427		—		6.44		16,907,843		—		6.44
	Subtotal		37,451,689		—		13.31		38,100,463		—		13.57		36,049,647		—		13.74
Total			281,345,948		1.16		100.00		280,725,524		1.23		100.00		262,367,557		1.47		100.00

* Based on K-IFRS separate financial statements

[Trust Accounts]

(Unit: millions of Won, %)

Type	Funding Source	1H 2017						2016						2015
		Average Balance		Interest Rate		Share		Average Balance		Interest Rate		Share		Average Balance		Interest Rate		Share
Cost	Money trusts		29,317,440		1.61		69.12		26,019,180		1.52		66.98		23,980,475		1.88		71.71
	Borrowings		0		0.00		0.00		0		0.00		0.00		0		0.00		0.00
	Subtotal		29,317,440		1.61		69.12		26,019,180		1.52		66.98		23,980,475		1.88		71.71
Non-cost	Property trusts		12,985,830		—		30.62		12,714,338		—		32.73		9,354,003		—		27.97
	Special reserves		39,075		—		0.09		38,160		—		0.10		37,989		—		0.11
	Others		70,052		—		0.17		72,810		—		0.19		70,265		—		0.21
	Subtotal		13,094,957		—		30.88		12,825,308		—		33.02		9,462,257		—		28.29
Total			42,412,397		—		100.00		38,844,488		—		100.00		33,442,732		—		100.00

14

b. Fund Management Performance

[Bank Accounts]

(Unit: millions of Won, %)

Type	Managed Item	1H 2017								2016								2015
		Average Balance			Interest Rate		Share			Average Balance			Interest Rate		Share			Average Balance			Interest Rate		Share
Local currency funds	Deposits in local currency		3,532,407			1.27		1.26			3,171,599			1.34		1.13			2,580,842			1.72		0.98
	Marketable securities in local currency		35,215,231			2.02		12.52			33,880,119			2.58		12.07			32,994,958			2.79		12.58
	Loans in local currency		192,706,065			3.03		68.49			189,079,324			3.10		67.35			176,631,188			3.42		67.32
	Guarantee payments		27,654			1.78		0.01			51,254			0.89		0.02			64,533			1.89		0.02
	Call loans in local currency		2,229,446			1.32		0.79			3,581,382			1.41		1.28			2,083,053			1.64		0.79
	Private placed bonds		208,200			5.60		0.07			247,292			5.19		0.09			280,702			5.98		0.11
	Credit card receivables		37			—		0.00			24			—		0.00			—			—		—
	Others		4,061,109			2.00		1.44			4,580,215			2.04		1.63			4,313,781			2.61		1.64
	Bad debt expense in local currency (-)		(1,368,366	)		—		(0.49	)		(1,925,177	)		—		(0.69	)		(2,482,955	)		—		(0.95	)
	Subtotal		236,611,783			2.84		84.10			232,666,033			2.98		82.88			216,466,103			3.31		82.50
Foreign currency funds	Deposits in foreign currencies		3,556,392			0.67		1.26			3,761,286			0.43		1.34			2,872,735			0.28		1.09
	Marketable securities in foreign currencies		2,286,583			1.27		0.81			1,752,884			1.13		0.62			1,375,146			1.51		0.52
	Loans in foreign currencies		11,099,727			2.38		3.95			13,371,873			1.95		4.76			14,206,736			1.65		5.41
	Call loans in foreign currencies		2,758,384			1.11		0.98			2,940,858			0.85		1.05			2,040,819			0.59		0.78
	Bills bought		7,110,398			1.77		2.53			7,110,164			1.53		2.53			6,899,811			1.38		2.63
	Others		52,697			2.39		0.02			13,829			9.72		0.00			17,047			6.96		0.01
	Bad debt expense in foreign currencies (-)		(339,021	)		—		(0.12	)		(312,211	)		—		(0.11	)		(191,224	)		—		(0.07	)
	Subtotal l		26,525,160			1.79		9.43			28,638,685			1.51		10.20			27,221,069			1.37		10.38
Others	Cash		1,182,753			—		0.42			1,169,566			—		0.42			1,116,715			—		0.43
	Property and equipment for business purposes		2,334,555			—		0.83			2,325,893			—		0.83			2,328,130			—		0.89
	Others		14,691,697			—		5.22			15,925,347			—		5.67			15,235,540			—		5.81
	Subtotal		18,209,005			—		6.47			19,420,807			—		6.92			18,680,385			—		7.12
Total			281,345,948			2.55		100.00			280,725,524			2.62		100.00			262,367,557			2.87		100.00

* Based on K-IFRS separate financial statements

[Trust Accounts]

(Unit: millions of Won, %)

Type	Managed Item	1H 2017							2016							2015
		Average Balance			Interest Rate		Share		Average Balance			Interest Rate		Share		Average Balance			Interest Rate			Share
Profit	Loans		25,951			2.96		0.06		23,088			4.21		0.06		19,482			4.05			0.06
	Securities		7,073,463			2.59		16.68		4,701,052			1.93		12.10		3,470,064			(0.57	)		10.38
	Other		23,070,431			1.46		54.40		22,237,766			1.63		57.25		21,231,787			2.00			63.49
	Reserves for bond ratings (-)		(38	)		0.00		0.00		(36	)		0.00		0.00		(68	)		0.00			0.00
	Present value discount (-)		(102	)		0.00		0.00		(215	)		0.00		0.00		(414	)		0.00			0.00
	Subtotal		30,169,705			1.72		71.13		26,961,655			1.68		69.41		24,720,851			1.64			73.92
Non-profit	Subtotal		12,242,692			—		28.87		11,882,833			—		30.59		8,721,881			—			26.08
Total			42,412,397			—		100.00		33,442,732			—		100.00		29,994,637			—			100.00

15

4. Other Information Necessary for Making Investment Decisions

a. Selected Ratios

BIS Capital Adequacy Ratios

(unit: 100 millions of Won)

Type	1H 2017			2016			2015
Equity capital (A)		226,385			229,005			210,514
Risk weighted assets (B)		1,481,025			1,497,281			1,540,709
Capital adequacy ratio (A/B)		15.29	%		15.29	%		13.66	%

* Based on Basel III standards

* Based on K-IFRS consolidated financial statements

* The 1H 2017 figures change (capital adequacy ratio to 16.62%) when excluding the five subsidiaries that were newly included after the merger with Woori Finance Holdings.

Liquidity Ratios

(unit: %)

Type	1H 2017		2016		2015
Liquidity coverage ratio (LCR)		121.33		109.61		106.67
Foreign currency liquidity coverage ratio(LCR) **		94.15		—		—
Ratio of business purpose premises and equipment		13.57		13.49		14.37

* Based on K-IFRS consolidated financial statements

* 1H 2017 figures are based on average balances, 2016 and 2015 figures are based on ending balance.

** Foreign currency liquidity coverage ratio : Introduced and started in year 2017. From 2017 banks are required to comply with the foreign currency LCR rule. Commercial banks are set at 60% in 2017, which will increase gradually to 70% in 2018 and 80% in 2019)

b. Asset Quality

(unit: 100 millions of Won)

Type		1H 2017			2016			2015
Total loans	Total		2,168,319			2,166,122			2,108,424
	Corporate		1,125,966			1,140,252			1,185,857
	Household		1,042,353			1,025,870			922,567
Sub-standard and below loans Sub-standard and below loan ratio	Total		17,783			21,121			31,009
			0.82	%		0.98	%		1.47	%
	Corporate		15,126			18,237			27,701
			1.34	%		1.60	%		2.34	%
	Household		2,656			2,884			3,308
			0.25	%		0.28	%		0.36	%
Delinquency ratio	Based on total loans (after seasonal adjustment)		0.42	%		0.46	%		0.82	%
			(0.50	%)		(0.52	%)		(0.93	%)
	Based on corporate loans (after seasonal adjustment)		0.62	%		0.61	%		1.39	%
			(0.74	%)		(0.66	%)		(1.57	%)
	Based on household loans (after seasonal adjustment)		0.28	%		0.31	%		0.39	%
			(0.30	%)		(0.33	%)		(0.43	%)

* Based on K-IFRS separate financial statements

16

c. Recent Developments

On November 1, 2014, the Bank merged with its holding company, Woori Finance Holdings, according to the resolution of the board of directors on July 28, 2014, to maximize the possibility of a successful privatization. New shares of the Bank, the surviving entity, were allotted and delivered to the shareholders of Woori Finance Holdings based on a 1:1.00000000 ratio.

Upon the consummation of the merger, 596,690,380 shares of the Bank were cancelled and 676,278,371 new shares were issued.

The major terms of the Merger are as follows:

Item	Details
Method of Merger	Merger of parent company with and into wholly-owned subsidiary
Merging entities	Woori Bank (surviving entity)
	Woori Finance Holdings (non-surviving entity)
New shares issued in Merger	676,278,371 common shares
Schedule of the Merger	Date of the Merger	November 1, 2014
	Date of registration of Merger	November 3, 2014
	Delivery of share certificates	November 18, 2014
	Date of new listing of shares	November 19, 2014

17

III. Financial Information

1. Condensed Financial Statements (Consolidated)

Summary Consolidated Statement of Financial Position

(The Bank and its Consolidated Subsidiaries) (unit: millions of Won)

Classification	1H 2017			2016			2015
ASSETS
Cash and cash equivalents		7,377,124			7,591,324			6,644,055
Financial assets at fair value through profit or loss		4,554,375			5,650,724			5,132,657
Available-for-sale financial assets		19,623,170			20,817,583			17,170,592
Held-to-maturity financial assets		15,144,766			13,910,251			13,621,640
Loans and receivables		265,148,624			258,392,633			244,842,062
Investments in joint ventures and associates		370,799			439,012			643,861
Investment properties		359,937			358,497			351,496
Premises and equipment		2,459,176			2,458,025			2,471,206
Intangible assets and goodwill		506,882			483,739			419,806
Assets held for sale		16,439			2,342			17,904
Current tax assets		3,179			6,229			6,782
Deferred tax assets		225,330			232,007			210,597
Derivative assets		140,176			140,577			183,128
Net defined benefit assets		9,469			70,938			—
Other assets		125,814			128,846			143,286
Total assets		316,065,260			310,682,727			291,859,072
LIABILITIES
Financial liabilities at fair value through profit or loss		2,518,897			3,803,358			3,460,561
Deposits due to customers		226,200,577			221,020,411			209,141,826
Borrowings		15,679,945			18,769,515			20,033,917
Debentures		25,649,132			23,565,449			21,898,859
Provisions		381,030			428,477			516,601
Net defined benefit liability		24,886			64,666			99,691
Current tax liabilities		207,509			171,192			108,943
Deferred tax liabilities		29,235			22,023			19,379
Derivative liabilities		29,229			7,221			—
Other financial liabilities		24,650,846			21,985,086			16,964,206
Other liabilities		273,506			299,376			305,174
Total liabilities		295,644,792			290,136,774			272,549,157
EQUITY
Owners’ equity:		20,256,349			20,386,160			19,188,472
Capital stock		3,381,392			3,381,392			3,381,392
Hybrid securities		3,017,888			3,574,896			3,334,002
Capital surplus		286,074			286,331			294,259
Other equity		(1,778,801	)		(1,468,025	)		(1,547,303	)
Retained earnings		15,349,796			14,611,566			13,726,122
Non-controlling interests		164,119			159,793			121,443
Total equity		20,420,468			20,545,953			19,309,915
Total liabilities and equity		316,065,260			310,682,727			291,859,072
Number of Consolidated Subsidiaries		68			74			71

18

Summary Consolidated Statement of Comprehensive Income

(The Bank and its Consolidated Subsidiaries) (unit: millions of Won, except per share amounts)

Classification	1H 2017			1H 2016			2016			2015
OPERATING INCOME:		1,484,228			949,103			1,574,206			1,351,586
Net interest income		2,550,320			2,488,758			5,019,544			4,761,900
Net fees and commissions income		537,589			468,006			937,131			976,796
Dividend income		59,445			120,399			184,510			102,923
Gain on financial instruments at fair value through profit or loss		(146,409	)		58,596			114,387			240,342
Gain on available-for-sale financial assets		104,192			28,883			(1,035	)		(3,281	)
Impairment losses due to credit loss		(283,763	)		(430,744	)		(834,076	)		(966,646	)
General and administrative expenses		(1,538,427	)		(1,644,552	)		(3,478,476	)		(3,150,387	)
Other net operating income (expenses)		201,281			(140,243	)		(367,779	)		(610,061	)
Non-operating income		(54,280	)		(37,982	)		(20,817	)		100,360
Net income before income tax expense from continuing operations		1,429,948			911,121			1,553,389			1,451,946
Income tax expense from continuing operations		320,933			153,334			275,856			376,554
Net income from continuing operations		1,109,015			757,787			1,277,533			1,075,392
Net income from discontinued operations		—			—			—			—
Net income		1,109,015			757,787			1,277,533			1,075,392
Net income attributable to owners		1,098,361			750,266			1,261,266			1,059,157
Profit from continuing operations		1,098,361			750,266			1,261,266			1,059,157
Profit from discontinued operations		—			—			—			—
Net income attributable to the non-controlling interests		5,861			7,521			16,267			16,235
Profit from continuing operations		5,861			7,521			16,267			16,235
Profit from discontinued operations		—			—			—			—
Other comprehensive income (loss), net of tax		(107,410	)		43,045			77,894			31,162
Items that will not be reclassified to profit or loss		(9,677	)		(44,667	)		34,162			(78,267	)
Items that may be reclassified to profit or loss		(97,733	)		87,712			43,732			109,429
Total comprehensive income		1,001,605			800,832			1,355,427			1,106,554
Comprehensive income attributable to the owners		995,744			788,668			1,332,614			1,094,870
Comprehensive income attributable to non-controlling interests		5,861			12,164			22,813			11,684
NET INCOME PER SHARE:
Continuing and discontinued operations
Basic earnings per common share		1,497			966			1,567			1,301
Continuing operations
Basic earnings per common share		1,497			966			1,567			1,301

19

2. Condensed Financial Statements (Separate)

Summary Statement of Financial Position

(The Bank) (unit: millions of Won)

Classification	1H 2017			2016		2015
ASSETS
Cash and cash equivalents		6,095,746			6,104,029		5,440,326
Financial assets at fair value through profit or loss		3,007,323			4,076,872		3,569,625
Available-for-sale financial assets		18,149,919			18,105,862		15,869,654
Held-to-maturity financial assets		15,059,372			13,792,266		13,527,452
Loans and receivables		247,306,721			241,508,048		231,083,160
Investments in subsidiaries and associates		3,911,552			3,779,169		3,730,247
Investment properties		344,650			348,393		344,892
Premises and equipment		2,344,746			2,342,280		2,341,506
Intangible assets		275,842			242,230		187,520
Assets held for sale		7,577			2,342		17,904
Current tax assets		—			—		—
Deferred tax assets		136,793			162,211		172,368
Derivative assets		140,143			140,577		183,128
Net defined benefit assets		9,469			70,938		—
Other assets		96,367			96,926		109,126
Total assets		296,886,220			290,772,143		276,576,908
LIABILITIES
Financial liabilities at fair value through profit or loss		2,507,374			3,793,479		3,448,180
Deposits due to customers		216,321,706			211,382,380		201,353,128
Borrowings		14,248,618			16,060,821		18,760,947
Debentures		19,910,124			18,166,057		17,259,749
Provisions		338,990			380,473		467,887
Net defined benefit liability		—			—		45,678
Current tax liabilities		190,454			148,672		77,190
Deferred tax liabilities		—			—		—
Derivative liabilities		8,587			7,221		—
Other financial liabilities		23,543,680			20,827,284		16,111,469
Other liabilities		124,720			153,238		163,362
Total liabilities		277,194,253			270,919,625		257,687,590
EQUITY
Capital stock		3,381,392			3,381,392		3,381,392
Hybrid securities		3,017,888			3,574,896		3,334,002
Capital surplus		269,533			269,533		269,533
Other equity		(109,296	)		138,542		106,016
Retained earnings		13,132,450			12,488,155		11,798,375
Total equity		19,691,967			19,852,518		18,889,318
Total liabilities and equity		296,886,220			290,772,143		276,576,908

20

Summary Statement of Comprehensive Income

(The Bank) (unit: millions of Won, except per share amounts)

Classification	1H 2017			1H 2016			2016			2015
OPERATING INCOME:		1,298,340			795,453			1,270,501			1,090,372
Net interest income		2,131,658			2,116,139			4,222,447			4,052,479
Net fees and commissions income		465,850			422,322			842,883			856,343
Dividend income		61,736			159,589			220,015			169,009
Gain on financial instruments at fair value through profit or loss		(137,593	)		43,773			97,225			220,282
Gain on available-for-sale financial assets		90,238			31,156			35,525			(7,960	)
Impairment losses due to credit loss		(179,904	)		(324,642	)		(640,443	)		(766,169	)
General and administrative expenses		(1,350,512	)		(1,475,960	)		(3,115,371	)		(2,846,490	)
Other net non-operating income (expenses)		216,867			(176,924	)		(391,780	)		(587,122	)
Non-operating income		(876	)		11,955			40,144			144,635
Net income before income tax expense		1,297,464			807,408			1,310,645			1,235,007
Income tax expense		293,038			136,167			245,043			300,418
Net income from continuing operations		1,004,426			671,241			1,065,602			934,589
Net income from discontinued operations		—			—			—			—
Net income		1,004,426			671,241			1,065,602			934,589
Other comprehensive income (loss), net of tax		(39,680	)		(2,270	)		32,526			(8,583	)
Items that will not be reclassified to profit or loss		(8,949	)		(44,727	)		33,191			(73,591	)
Items that may be reclassified to profit or loss		(30,731	)		42,457			(665	)		65,008
Total comprehensive income		964,746			668,971			1,098,128			926,006
NET INCOME PER SHARE:
Basic and diluted net income per share		1,358			848			1,277			1,116

21

IV. Independent Auditor’s Opinion

1. Independent Auditor’s Opinion

	1H 2017	2016	2015
Auditor	Deloitte Anjin LLC	Deloitte Anjin LLC	Deloitte Anjin LLC
Auditor’s Opinion	(1)	Unqualified Opinion	Unqualified Opinion

(1) In its review report attached to this report, Deloitte Anjin LLC has stated that nothing had come to their attention that caused them to believe that the accompanying consolidated and separate interim financial statements of the Bank are not presented fairly in all material respects, in accordance with Korean IFRS.

2. Compensation to the Independent Auditor for the Past Three Years

a. Audit Services

(units: millions of Won, hours)

Term	Auditor	Description	Fee	Total Time
1H 2017	Deloitte Anjin LLC	Closing audit	KRW 1,786 million		—
		Interim audit (including internal accounting management system)			—
		3Q review			—
		1H review			4,061 hours
		1Q review			4,020 hours
2016	Deloitte Anjin LLC	Closing audit	KRW 1,561 million		7,515 hours
		Interim audit (including internal accounting management system)			4,210 hours
		3Q review			4,991 hours
		1H review			3,526 hours
		1Q review			3,920 hours
2015	Deloitte Anjin LLC	Closing audit	KRW 1,516 million		7,659 hours
		Interim audit (including internal accounting management system)			4,350 hours
		3Q review			3,785 hours
		1H review			3,836 hours
		1Q review			3,778 hours

b. Non-Audit Services

Term	Date of Execution of Agreement	Description of Service	Service Term	Fees
1H 2017	Mar. 15, 2017	Tax adjustment	Each quarter and end of term	KRW 120 million
	Mar. 15, 2017	PCAOB and SOX Auditing	May 1, 2017 ~ April 30, 2018	KRW 1,288 million
2016	Mar. 28, 2016	Tax adjustment	Each quarter and end of term	KRW 115 million
	Mar. 28, 2016	PCAOB and SOX Auditing	May 1, 2016 ~ Apr. 30, 2017	KRW 1,127 million
	Mar. 23, 2016	Issuance of GMTN-related comfort letter	May 2016	USD 100,000
2015	May 14, 2015	Review of Japanese F/S related to Samurai bonds	May and Sep. 2015	KRW 74 million
	May 14, 2015	Issuance of GMTN-related comfort letter	May 2015	USD 110,000
	Apr. 03, 2015	Tax adjustment	Each quarter and end of term	KRW 110 million
	Apr. 03, 2015	PCAOB and SOX Auditing	May 1, 2015~ Apr. 30, 2016	KRW 1,094 million
	Jan. 05, 2015	Issuance of GMTN-related comfort letter	Jan. 2015	USD 60,000

22

V. Corporate Governance and Affiliated Companies

1. About the Board of Directors

a. Composition of the Board of Directors

The board of directors consists of standing directors, outside directors and non-standing directors.

b. Committees under the Board of Directors

We currently have the following management committees serving under the board of directors:

(a) Audit Committee

(b) Board of Directors Management Committee

(c) Risk Management Committee

(d) Compensation Committee

(e) Committee for Recommending Officer Candidates

As of June 30, 2017
Name of Committee	Composition	Names of Members
Audit Committee	Two outside directors One standing director	Sang-Hoon Shin (outside director) Dong-Woo Chang (outside director) Jung-Sik Oh (standing director)
Board of Directors Management Committee	One standing director Five outside directors One non-standing director	Kwang-Goo Lee (standing director) Sung-Tae Ro (outside director) Sang-Hoon Shin (outside director) Sang-Yong Park (outside director) Zhiping Tian (outside director) Dong-Woo Chang (outside director) Kwang-Woo Choi (non-standing director)
Risk Management Committee	Three outside directors One non-standing director	Sung-Tae Ro (outside director) Sang-Yong Park (outside director) Zhiping Tian (outside director) Kwang-Woo Choi (non-standing director)
Compensation Committee	Five outside directors One non-standing director	Sung-Tae Ro (outside director) Sang-Hoon Shin (outside director) Sang-Yong Park (outside director) Zhiping Tian (outside director) Dong-Woo Chang (outside director) Kwang-Woo Choi (non-standing director)
Committee for recommending audit committee member candidates	One standing director Five outside directors	Kwang-Goo Lee (standing director) Sung-Tae Ro (outside director) Sang-Hoon Shin (outside director) Sang-Yong Park (outside director) Zhiping Tian (outside director) Dong-Woo Chang (outside director)

* Three committees which had previously existed (i.e., Committee for recommending officer candidates, Committee for recommending outside director candidates, Committee for recommending audit committee member candidates) were integrated into a single committee (Committee for recommending officer candidates) through an amendment to the Articles of Incorporation at the EGM held on December 30, 2016 [Related Disclosure : Report on Form 6-K, submitted by Woori Bank on December 30, 2016, entitled “Results of the Extraordinary General Meeting of Shareholders of Woori Bank”]

23

Affiliated Companies (as of June 30, 2017)

24

VI. Shareholder Information

1. Share Distribution

a. Share Information of the Largest Shareholder and Specially Related Parties

As of June 30, 2017											(units: shares, %)
	Relation	Type	Shares Held
Name			Beginning balance				Ending balance				Notes
			Stock		Share		Stock		Share
(KDIC) Korea Deposit Insurance Corporation	Largest Shareholder	Common		157,977,161		23.37		128,185,796		18.96		—
Total		Common		157,977,161		23.37		128,185,796		18.96		—
		Others		—		—		—		—

b. Changes in the largest shareholder

							(units: shares, %)
Change of Date	Largest Shareholder	Stock Held		Share			Notes
January 1, 2014	Woori Finance Holdings		596,690,380		100.00
November 1, 2014	KDIC		385,285,578		56.79	*	Merger date of Woori Finance Holdings and Woori Bank
December 8, 2014	KDIC		345,142,556		51.04		Sale of stake
October 2, 2015	KDIC		345,142,556		51.06		Change in the share ownership ratio due to the retirement of shares
December 1, 2016	KDIC		239,097,161		35.37		Sales of stakes to Tongyang Life Insurance, Eugene Asset Management, Mirae Asset Global Investments and Korea Investment & Securities
December 8, 2016	KDIC		185,017,161		27.37		Sales of stakes to Kiwoom Securities and Hanwha Life Insurance
December 14, 2016	KDIC		157,977,161		23.37		Sale of stake to IMM PE
January 31, 2017	KDIC		144,457,161		21.37		Sale of stake to IMM PE
May 11, 2017	KDIC		143,857,161		21.28		Exercise of Shinhan Investment Corp.’s call option (0.09%)
June 16, 2017	KDIC		132,897,007		19.66		Exercise of call option of Employee Stock Ownership Association of Woori Bank (1.62%)
June 22, 2017	KDIC		131,697,007		19.48		Exercise of NH Investment & Securities’ call option (0.18%)
June 27, 2017	KDIC		130,697,007		19.33		Exercise of NH Investment & Securities’ call option (0.15%)
June 28, 2017	KDIC		128,185,796		18.96		Exercise of NH Investment & Securities’ call option (0.37%)
July 3, 2017	KDIC		126,935,796		18.78		Exercise of Hyosung Capital’s call option (0.18%)

Note) KDIC : Korea Deposit Insurance Corporation

* Upon the consummation of the merger of Woori Finance Holdings with and into Woori Bank on November 1, 2014, 596,690,380 shares of the Bank were cancelled and 676,278,371 new shares were issued.

25

c. Share Ownership of More Than 5%

As of June 30, 2017 (unless otherwise indicated)		(units: shares, %)
No.	Name	Shares				Notes
		No. of shares		Percentage of shareholding
1	Korea Deposit Insurance Corporation		128,185,796		18.96	Note1)
2	National Pension Service		57,112,453		8.45	Note2)
3	Nobis1, Inc. (IMM PE)		40,560,000		6.00	—
Employee Stock Ownership Association			36,898,623		5.45	Note3)

Note1) 126,935,796 (18.78%) as of July 3, 2017

Note2) As of June 15, based on disclosure of National Pension Service (Disclosure : July 4, 2017)

Note3) Based on the account of the Employee Stock Ownership Association (the total of all members)

2. Stock Price and Stock Market Performance

a. Domestic Stock Market

(units: Won, shares)
Period		January 2017		February 2017		March 2017		April 2017		May 2017		June 2017
Common Stock	High		13,100		13,800		13,850		15,000		16,350		18,600
	Low		12,300		13,150		13,000		13,050		14,850		15,300
	Average		12,765		13,493		13,439		14,060		15,528		16,995
Monthly Trade Volume	High		2,752,633		2,312,402		2,169,077		3,298,803		3,958,143		13,105,480
	Low		604,408		560,219		651,791		974,506		732,429		1,153,280
	Monthly Total		25,380,245		22,436,858		27,612,985		31,127,285		33,003,973		65,580,274

* Source: KRX KOSPI Market

* Share prices are based on closing prices.

b. Foreign Stock Market (NYSE)

(units: US Dollars, ADRs)
Period		January 2017		February 2017		March 2017		April 2017		May 2017		June 2017
ADR	High		34.17		36.67		37.25		40.28		43.81		48.70
	Low		31.18		34.82		34.70		35.21		39.74		41.50
	Average		32.83		35.81		35.95		37.12		41.50		45.17
Won Conversion	High		39,562		42,240		42,145		45,536		49,702		55,498
	Low		37,076		40,583		39,999		39,410		44,934		46,554
	Average		38,904		40,997		40,790		42,055		46,709		51,052
Monthly Trade Volume	High		19,000		14,300		20,000		17,800		17,500		13,400
	Low		1,100		1,100		600		1,200		1,300		2,000
	Monthly Total		106,900		85,900		89,400		73,300		181,200		125,500

* Source: standard trading rate (daily and monthly average) (Seoul Money Brokerage, www.smbs.biz)

* One ADR represents three common shares.

* Share prices are based on closing prices.

26

VII. Directors and Employee Information

1. Directors

As of June 30, 2017

Position			Name	Common Stock Owned		Expiration of Term
President & CEO	Registered	Standing	Kwang-Goo Lee		26,251	Note 1)
Standing Member of Audit Committee	Registered	Standing	Jung-Sik Oh		1,350	Note 1)
Outside Director	Registered	Non-Standing	Sung-Tae Ro		—	December 30, 2018
Outside Director	Registered	Non-Standing	Sang-Hoon Shin		10,000	December 30, 2018
Outside Director	Registered	Non-Standing	Sang-Yong Park		—	December 30, 2018
Outside Director	Registered	Non-Standing	Zhiping Tian		—	December 30, 2018
Outside Director	Registered	Non-Standing	Dong-Woo Chang		—	December 30, 2018
Non-standing Director	Registered	Non-Standing	Kwang-Woo Choi		—	Note 2)
Executive Vice President	Non-Registered	Standing	Ki-Myung Nam		8,082	December 8, 2017
Executive Vice President	Non-Registered	Standing	Tae-Seung Sohn		23,127	December 8, 2017
Executive Vice President	Non-Registered	Standing	Won-Jai Jeong		28,143	December 8, 2018
Executive Vice President	Non-Registered	Standing	Hong-Hee Kim		21,885	December 8, 2017
Executive Vice President	Non-Registered	Standing	Jung-Hoon Choi		21,594	December 3, 2017
Executive Vice President	Non-Registered	Standing	Jae-Hyun Cho		12,000	December 8, 2017
Executive Vice President	Non-Registered	Standing	Seong-Il Park		15,914	December 8, 2017
Executive Vice President	Non-Registered	Standing	Sun-Kyu Kim		22,882	December 8, 2017
Executive Vice President	Non-Registered	Standing	Hyun-Seok Shin		17,525	December 8, 2017
Executive Vice President	Non-Registered	Standing	An-Ho Jang		21,490	December 8, 2017
Executive Vice President	Non-Registered	Standing	Woon-Haeng Cho		27,345	December 8, 2017
Executive Vice President	Non-Registered	Standing	Kwang-Seok Kwon		8,057	December 8, 2017
Managing Director	Non-Registered	Standing	Yeong-Bae Kim		9,884	December 3, 2017
Managing Director	Non-Registered	Standing	Jeong-Jin Heo		13,983	December 3, 2017
Managing Director	Non-Registered	Standing	Gyu-Song Cho*		24,303	December 3, 2017
Managing Director	Non-Registered	Standing	Dong-Yeon Lee		16,379	December 3, 2017
Managing Director	Non-Registered	Standing	Hyun-Poong Hong		20,110	December 8, 2018
Managing Director	Non-Registered	Standing	Tae-Joong Ha		12,418	December 8, 2018
Managing Director	Non-Registered	Standing	Chai-Pong Cheong		12,089	December 8, 2018
Managing Director	Non-Registered	Standing	Jong-In Lee		12,388	December 8, 2018
Managing Director	Non-Registered	Standing	Won-Duk Lee		—	December 8, 2018
Managing Director	Non-Registered	Standing	Chang-Jae Lee		15,938	December 8, 2018
Managing Director	Non-Registered	Standing	Jeong-Ki Kim		26,259	December 8, 2018
Managing Director	Non-Registered	Standing	Dae-Jin Lee		27,546	December 8, 2018

Note 1) End of Term : The end of the AGM to be held in Mar. 2019

Note 2) End of Term : The end of the AGM to be held in Mar. 2018

* Resigned : Gyu-Song Cho

2. Employee Status

As of June 30, 2017 (units: persons, millions of Won)

Number of Employees									Average Tenure Years		Total Compensation		Average Compensation Per Person		Note
Regular			Contract				Total
Total	(Short time worker)		Total		(Short time worker)
14,656		97		694		264		15,350		16.8		697,990		45		Note1	)

* Average years of continuous service excludes contract employees and locally hired employees overseas.

* Excludes management salaries (sales center head or higher) and overseas salaries.

Note1) When excluding the amount paid in 2017 1Q which payment was determined in 2016, total compensation is KRW 617,169 million (Average compensation per person is KRW 40 million)

27

3. Directors’ Compensation

As of June 30, 2017	(units: persons, millions of Won)
Items	Number of Persons		Total Compensation		Average Compensation Per Director		Note
Registered Directors (excludes outside directors and audit committee members)		2		611		306		—
Outside Directors (excludes audit committee members)		3		105		35		—
Audit Committee Members		4		395		99		—
Total		9		1,111		123		—

* Number of persons : includes the outside directors and audit committee members that resigned in 2017

(as of June 30, 2017, there are two registered directors, three outside directors and three members of the Audit Committee)

* There is no compensation paid to the non-standing director from the KDIC, who has been excluded from the number of persons

* Total compensation : cumulative amount paid from January to June of 2017

VIII. Related Party Transactions

Extensions of Credit to Major Shareholders, Etc.

As of June 30, 2017	(unit: millions of Won)
Name	Item		Current Balance		Origination Date	Maturity Date
Korea Deposit Insurance Corporation		Loans		100,000	August 29, 2016	August 28, 2017
		Loans		200,000	August 29, 2016	August 28, 2017
		Bonds		150,042	January 4, 2012, etc.	January 22, 2018, etc.
Woori Investment Bank		Loans		25,000	March 10, 2016	March 2, 2018
		CMA		0	September 24, 2015	June 30, 2017
Woori Card		Loans		250,000	April 1, 2013	March 2, 2018
Woori P&S		Loans		10,151	May 25, 2016	May 25, 2026

28

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Woori Bank
	(Registrant)
Date: August 14, 2017	By:	/s/ Hyun Seok Shin
		(Signature)
	Name:	Kwang Seok Kwon
	Title:	Managing Director

29

EX-99.1

Exhibit 99.1

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM FINANCIAL STATEMENTS

AS OF JUNE 30, 2017 AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

ATTACHMENT: INDEPENDENT ACCOUNTANTS’ REVIEW REPORT

WOORI BANK

	Deloitte Anjin LLC
	9F., One IFC, 10, Gukjegeumyung-ro Youngdeungpo-gu, Seoul 07326, Korea
	Tel: +82 (2) 6676 1000
	Fax: +82 (2) 6674 2114
	www.deloitteanjin.co.kr

INDEPENDENT ACCOUNTANTS’ REVIEW REPORT

English Translation of a Report Originally Issued in Korean on August 11, 2017

To the Shareholders and the Board of Directors of

Woori Bank

Report on the Consolidated Financial Statements

We have reviewed the accompanying consolidated interim financial statements of Woori Bank and subsidiaries (the “Group”). The financial statements consist of the consolidated interim statements of financial position as of June 30, 2017 and the consolidated interim statements of comprehensive income for the three and six months ended June 30, 2017 and 2016, consolidated interim statements of changes in shareholders’ equity and consolidated interim statements of cash flows, all expressed in Korean Won, for the six months ended June 30, 2017 and 2016, respectively, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Interim Financial Statements

The Group’s management is responsible for the preparation and fair presentation of these consolidated interim financial statements in accordance with Korean International Financial Reporting Standards (“K-IFRS”) and for such internal control as management determines is necessary to enable the preparation of consolidated interim financial statements that are free from material misstatement, whether due to fraud or error.

Independent Accountants’ Responsibility

Our responsibility is to express a conclusion on the accompanying consolidated interim financial statements based on our reviews.

We conducted our reviews in accordance with standards for review of consolidated interim financial statements in the Republic of Korea. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data, and this provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Review conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated interim financial statements of the Group are not presented fairly, in all material respects, in accordance with K-IFRS 1034, Interim Financial Reporting.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/kr/about to learn more about our global network of member firms.

© 2017. For information, contact Deloitte Anjin LLC

Others

We audited the consolidated interim statement of financial position as of December 31, 2016, and the related consolidated interim statements of comprehensive income, changes in shareholders’ equity and cash flows for the year ended December 31, 2016 (not presented in the accompanying consolidated financial statements, all expressed in Korean Won), in accordance with auditing standards generally accepted in the Republic of Korea. We expressed an unqualified opinion in our independent auditors’ report dated on March 3, 2017. The consolidated statement of financial position as of December 31, 2016 presented as a comparative purpose in the accompanying financial statements does not differ, in all material respects, from the audited consolidated statement of financial position as of December 31, 2016.

Accounting principles and review 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 review 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 review standards and their application in practice.

August 11, 2017

Notice to Readers

This report is effective as of August 11, 2017, the accountants’ review report date. Certain subsequent events or circumstances may have occurred between the accountants’ review report date and the time the accountants’ review report is read. Such events or circumstances could significantly affect the consolidated financial statements and may result in modifications to the accountants’ review report.

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM FINANCIAL STATEMENTS

AS OF JUNE 30, 2017 AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

The accompanying consolidated interim financial statements including all footnote disclosures were prepared by and are the responsibility of the Group.

Kwang Goo Lee

President and Chief Executive Officer

Main Office Address:	(Road Name Address) 51, Sogong-ro, Jung-gu, Seoul
	(Phone Number)          02-2002-3000

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2017 AND DECEMBER 31, 2016

	June 30, 2017		December 31, 2016
	(Korean Won in millions)
ASSETS
Cash and cash equivalents (Note 6)		7,377,124		7,591,324
Financial assets at fair value through profit or loss (Notes 4,7,11,12,18 and 26)		4,554,375		5,650,724
Available-for-sale financial assets (Notes 4,8,11,12 and 18)		19,623,170		20,817,583
Held-to-maturity financial assets (Notes 4,9,11,12 and 18)		15,144,766		13,910,251
Loans and receivables (Notes 4,10,11,12,18 and 45)		265,148,624		258,392,633
Investments in joint ventures and associates (Note 13)		370,799		439,012
Investment properties (Note 14)		359,937		358,497
Premises and equipment (Notes 15 and 18)		2,459,176		2,458,025
Intangible assets and goodwill (Note 16)		506,882		483,739
Assets held for sale (Note 17)		16,439		2,342
Current tax assets		3,179		6,229
Deferred tax assets		225,330		232,007
Derivative assets (Notes 4,11,12 and 26)		140,176		140,577
Net defined benefit assets (Note 24)		9,469		70,938
Other assets (Notes 19 and 45)		125,814		128,846
Total assets		316,065,260		310,682,727
LIABILITIES
Financial liabilities at fair value through profit or loss (Notes 4,11,12,20 and 26)		2,518,897		3,803,358
Deposits due to customers (Notes 4,11,21 and 45)		226,200,577		221,020,411
Borrowings (Notes 4,11,12 and 22)		15,679,945		18,769,515
Debentures (Notes 4,11 and 22)		25,649,132		23,565,449
Provisions (Notes 23 and 44)		381,030		428,477
Net defined benefit liability (Note 24)		24,886		64,666
Current tax liabilities		207,509		171,192
Deferred tax liabilities		29,235		22,023
Derivative liabilities (Notes 4,11,12 and 26)		29,229		7,221
Other financial liabilities (Notes 4,11,12, 25 and 45)		24,650,846		21,985,086
Other liabilities (Notes 25 and 45)		273,506		299,376
Total liabilities		295,644,792		290,136,774

(Continued)

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2017 AND DECEMBER 31, 2016 (CONTINUED)

	June 30, 2017			December 31, 2016
	(Korean Won in millions)
EQUITY
Owners’ equity:		20,256,349			20,386,160
Capital stock (Note 28)		3,381,392			3,381,392
Hybrid securities (Note 29)		3,017,888			3,574,896
Capital surplus (Note 28)		286,074			286,331
Other equity (Note 30)		(1,778,801	)		(1,468,025	)
Retained earnings (Notes 31 and 32)
(Regulatory reserve for credit loss as of June 30, 2017 and December 31, 2016 is 2,438,191 million Won and 2,255,252 million Won, respectively
Regulatory reserve for credit loss to be reserved as of June 30, 2017 and December 31, 2016 is 49,961 million Won and 182,939 million Won, respectively
Planned provision of regulatory reserve for credit loss as of June 30, 2017 and December 31, 2016 is 49,961 million Won and 182,939 million Won, respectively)		15,349,796			14,611,566
Non-controlling interests		164,119			159,793
Total equity		20,420,468			20,545,953
Total liabilities and equity		316,065,260			310,682,727

See accompanying notes

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
	(Korean Won in millions, except per share data)
Interest income		2,105,808			4,189,584			2,142,054			4,293,562
Interest expense		818,232			1,639,264			896,957			1,804,804
Net interest income (Notes 34 and 45)		1,287,576			2,550,320			1,245,097			2,488,758
Fees and commissions income		506,281			1,013,893			457,189			906,830
Fees and commissions expense		243,533			476,193			220,918			438,824
Net fees and commissions income (Notes 35 and 45)		262,748			537,700			236,271			468,006
Dividend Income (Note 36)		19,617			59,445			53,081			120,399
Net gain (loss) on financial instruments at fair value through profit or loss (Note 37)		12,066			(146,409	)		116,863			58,596
Net gain on available-for-sale financial assets (Note 38)		88,387			104,172			19,596			28,883
Impairment losses due to credit loss (Notes 39 and 45)		(204,486	)		(283,763	)		(250,534	)		(430,744	)
General and administrative expenses (Notes 40 and 45)		(784,157	)		(1,538,427	)		(872,109	)		(1,644,552	)
Other net operating income (expenses) (Notes 40 and 45)		(77,267	)		201,190			(155,416	)		(140,243	)
Operating income		604,484			1,484,228			392,849			949,103
Share of losses of joint ventures and associates (Note 13)		(14,863	)		(64,278	)		(11,594	)		(11,644	)
Net other non-operating income (loss)		11,697			9,998			(35,495	)		(26,338	)
Non-operating loss (Note 41)		(3,166	)		(54,280	)		(47,089	)		(37,982	)
Net income before income tax expense		601,318			1,429,948			345,760			911,121
Income tax expense (Note 42)		135,034			320,933			34,477			153,334
Net income
(Net income after the provision of regulatory reserve for credit loss for the six months ended June 30, 2017 and 2016 are 1,059,054 million Won and 744,961 million Won, respectively, and net income after the provision of regulatory reserve for credit loss for the three months ended June 30, 2017 and 2016 are 417,872 million Won and 316,489 million Won, respectively) (Note 32)		466,284			1,109,015			311,283			757,787
Remeasurement gain (loss) related to defined benefit plan		16,840			(9,677	)		(11,504	)		(44,667	)
Items that will not be reclassified to profit or loss		16,840			(9,677	)		(11,504	)		(44,667	)
Gain (loss) on available-for-sale financial assets		(41,680	)		(28,706	)		(17,811	)		80,223
Share of other comprehensive gain (loss) of joint ventures and associates		(197	)		1,507			3,145			(233	)
Gain (loss) on foreign currency translation for foreign operations		31,450			(69,010	)		8,768			(2,649	)
Gain (loss) on valuation of cash flow hedge		(673	)		(1,526	)		253			10,371
Items that may be reclassified to profit or loss		(11,100	)		(97,735	)		(5,645	)		87,712
Other comprehensive income (loss), net of tax		5,740			(107,412	)		(17,149	)		43,045
Total comprehensive income		472,024			1,001,603			294,134			800,832
Net income attributable to:
Net income attributable to owners		460,888			1,098,361			306,974			750,266
Net income attributable to non-controlling interests		5,396			10,654			4,309			7,521
Total comprehensive income attributable to:
Comprehensive income attributable to owners		464,129			995,742			287,740			788,668
Comprehensive income attributable to non-controlling interests		7,895			5,861			6,394			12,164
Basic and diluted earnings per share (In Korean Won) (Note 43)		623			1,497			382			966

See accompanying notes

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016

	Capital Stock		Hybrid securities			Capital surplus			Other Equity			Retained earnings			Controlling interests			Non- controlling interests			Total equity
	(Korean Won in millions)
January 1, 2016		3,381,392		3,334,002			294,259			(1,547,303	)		13,726,122			19,188,472			121,443			19,309,915
Net income		—		—			—			—			750,266			750,266			7,521			757,787
Dividends to common stocks		—		—			—			—			(168,317	)		(168,317	)		(1,265	)		(169,582	)
Gain on valuation of available-for-sale financial assets		—		—			—			79,651			—			79,651			572			80,223
Changes in equity of joint ventures and associates		—		—			—			(233	)		—			(233	)		—			(233	)
Gain (loss) on foreign currency translation of foreign operations		—		—			—			(6,723	)		—			(6,723	)		4,074			(2,649	)
Gain on valuation of cash flow hedge		—		—			—			10,371			—			10,371			—			10,371
Remeasurement loss related to defined benefit plan		—		—			—			(44,664	)		—			(44,664	)		(3	)		(44,667	)
Dividends to hybrid securities		—		—			—			—			(100,236	)		(100,236	)		—			(100,236	)
June 30, 2016		3,381,392		3,334,002			294,259			(1,508,901	)		14,207,835			19,708,587			132,342			19,840,929
January 1, 2017		3,381,392		3,574,896			286,331			(1,468,025	)		14,611,566			20,386,160			159,793			20,545,953
Net income		—		—			—			—			1,098,361			1,098,361			10,654			1,109,015
Dividends to common stocks		—		—			—			—			(269,308	)		(269,308	)		(1,534	)		(270,842	)
Capital increase of subsidiaries		—		—			(257	)		—			—			(257	)		—			(257	)
Gain (loss) on valuation of available-for-sale financial assets		—		—			—			(29,033	)		—			(29,033	)		327			(28,706	)
Changes in equity of joint ventures and associates		—		—			—			1,507			—			1,507			—			1,507
Loss on foreign currency translation of foreign operations		—		—			—			(63,944	)		—			(63,944	)		(5,066	)		(69,010	)
Loss on valuation of cash flow hedge		—		—			—			(1,526	)		—			(1,526	)		—			(1,526	)
Remeasurement loss related to defined benefit plan		—		—			—			(9,622	)		—			(9,622	)		(55	)		(9,677	)
Dividends to hybrid securities		—		—			—			—			(90,823	)		(90,823	)		—			(90,823	)
Issuance of hybrid securities		—		559,565			—			—			—			559,565			—			559,565
Redemption of hybrid securities		—		(1,116,573	)		—			(208,158	)		—			(1,324,731	)		—			(1,324,731	)
June 30, 2017		3,381,392		3,017,888			286,074			(1,778,801	)		15,349,796			20,256,349			164,119			20,420,468

See accompanying notes

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016

	For the six months ended June 30
	2017			2016
	(Korean Won in millions)
Cash flows from operating activities:
Net income		1,109,015			757,787
Adjustments:
Income tax expense		320,933			153,334
Interest income		(4,189,584	)		(4,293,562	)
Interest expense		1,639,264			1,804,804
Dividend income		(59,445	)		(120,399	)
		(2,288,832	)		(2,455,823	)
Additions of expenses not involving cash outflows:
Impairment losses due to credit loss		283,763			430,744
Share of losses of investments in joint ventures and associates		67,594			19,916
Loss on transaction of derivatives / valuation of derivatives (hedging)		31,131			19,014
Loss on fair value hedged items		15,846			118,700
Provision for guarantee and loan commitment and others		35,665			12,209
Retirement benefits		71,902			75,822
Depreciation and amortization of premises and equipment, intangible assets and investment properties		121,361			131,451
Loss on disposal of investments in joint ventures and associates		27,730			15,060
Loss on disposal of premises and equipment and other assets		608			5,887
Impairment loss on premises and equipment and other assets		160			343
		655,760			829,146
Deduction of revenues not involving cash inflows:
Gain on valuation of financial instruments at fair value through profit or loss		7,859			198,962
Gain on available-for-sale financial assets		104,172			28,883
Gain on valuation of investments in subsidiaries and associates		3,316			8,272
Gain on transaction / valuation of derivative instruments (hedging)		11,656			111,505
Gain on fair value hedged items		11,860			18,113
Reversal of provisions and others		1,285			619
Gain on disposal of investments in joint ventures and associates		32,886			1,199
Gain on disposal of premises and equipment and other assets		1,675			347
Reversal of impairment loss on premises and equipment and other assets		32			2,585
		174,741			370,485
Changes in operating assets and liabilities:
Financial instruments at fair value through profit or loss		(187,086	)		28,810
Loans and receivables		(7,908,486	)		(16,208,315	)
Other assets		(995	)		(81,412	)
Deposits due to customers		5,182,735			9,351,825
Provision for guarantee and loan commitment and others		(98,114	)		(49,221	)
Net defined benefit liability		(19,799	)		(192,222	)
Other financial liabilities		2,790,480			6,502,752
Other liabilities		(29,837	)		2,090
		(271,102	)		(645,693	)

(Continued)

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016 (CONTINUED)

	For the six months ended June 30
	2017			2016
	(Korean Won in millions)
Cash received from (paid for) operating activities:
Interest income received		4,281,385			4,293,461
Interest expense paid		(1,749,917	)		(1,821,466	)
Dividends received		62,014			120,716
Income tax paid		(236,246	)		(153,852	)
Net cash provided by operating activities		1,387,336			553,791
Cash flows from investing activities:
Cash in-flows from investing activities:
Disposal of available-for-sale financial assets		13,312,489			9,918,185
Redemption of held-to-maturity financial assets		4,665,209			3,863,816
Decrease in investments in joint ventures and associates		62,974			51,355
Disposal of Investment Properties		162			—
Disposal of premises and equipment		1,042			1
Disposal of intangible assets		933			2,869
Disposal of assets held for sale		6,488			8,082
		18,049,297			13,844,308
Cash out-flows from investing activities:
Acquisition of available-for-sale financial assets		11,268,756			12,020,787
Acquisition of held-to-maturity financial assets		5,945,147			4,084,288
Increase in investments in joint ventures and associates		13,485			800
Acquisition of investment properties		1,221			3,133
Acquisition of premises and equipment		68,596			47,473
Acquisition of intangible assets		97,977			50,228
		17,395,182			16,206,709
Net cash provided by (used in) investing activities		654,115			(2,362,401	)
Cash flows from financing activities:
Cash in-flows from financing activities:
Increase in borrowings		4,349,952			4,698,171
Issuance of debentures		10,299,507			9,185,999
Issuance of hybrid securities		559,565			—
		15,209,024			13,884,170
Cash out-flows from financing activities:
Repayment of borrowings		7,432,992			5,389,067
Repayment of debentures		8,223,263			7,586,208
Payment of dividends		269,308			168,317
Dividends paid on hybrid securities		100,627			100,583
Redemption of hybrid securities		1,323,400			—
Dividends paid on non-controlling interests		1,534			1,265
		17,351,124			13,245,440
Net cash provided by (used in) financing activities		(2,142,100	)		638,730
Net decrease in cash and cash equivalents		(100,649	)		(1,169,880	)
Cash and cash equivalents, beginning of the period		7,591,324			6,644,055
Effects of exchange rate changes on cash and cash equivalents		(113,551	)		(101,082	)
Cash and cash equivalents, end of the period (Note 6)		7,377,124			5,373,093

See accompanying notes

WOORI BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

AS OF JUNE 30, 2017 AND FOR THE THREE MONTHS AND THE SIX MONTHS ENDED

JUNE 30, 2017 AND 2016

1. GENERAL

(1) Summary of the parent company

Woori Bank (hereinafter referred to the “Bank”), which is a controlling entity in accordance with Korean International Financial Reporting Standards (“K-IFRS”) 1110 – Consolidated Financial Statements, was established in 1899 and is engaged in the commercial banking business under the Banking Law, trust business under the Financial Investment Services and Capital Market Act, and foreign currencies exchange business with approval from The Bank of Korea (“BOK”) and the Ministry of Finance and Economy (“MOFE”).

Previously, Woori Finance Holdings Co., Ltd., the former holding company of Woori Financial Group, established on March 27, 2001 held a 100% ownership of the Bank. Effective November 1, 2014, Woori Finance Holdings Co., Ltd. completed its merger with and into Woori Bank, its wholly-owned subsidiary, as contemplated by the merger agreement dated July 28, 2014, by and between Woori Finance Holdings Co., Ltd. and Woori Bank. Accordingly, the shares of the Bank, 597 million shares, prior to the merger, were reduced to nil in accordance with capital reduction procedure, and then, in accordance with the merger ratio, the Bank newly issued 676 million shares. As a result, as of June 30, 2017, the common stock of the Bank amounts, expressed in Korean Won (the “KRW” or “Won”), to 3,381,392 million Won.

During the year ended December 31, 2016, the Korea Deposit Insurance Corporation (“KDIC”), the majority shareholder of the Bank, sold its 187 million shares in the Bank in accordance with the contract of “Disposal of Woori Bank’s shares to Oligopolistic Shareholders”. In addition to the sale, during the three months ended June 30, 2017, KDIC sold additional 30 million shares. As of June 30, 2017 and December 31, 2016, KDIC held 128 million shares and 158 million shares (18.96% and 23.37% ownership interest) respectively, of the Bank’s shares issued.

On June 24, 2002, Woori Finance Holdings Co., Ltd. listed its common shares on the Korea Exchange through public offering. In addition, on September 29, 2003, the holding company registered with the Securities and Exchange Commission in the United States of America and, on the same day, listed its American Depositary Shares on the New York Stock Exchange. As a result of such merger, the Bank incorporated Woori Card Co., Ltd., Woori Investment Bank Co., Ltd., Woori FIS Co., Ltd., Woori Private Equity Asset Management Co., Ltd., and Woori Finance Research Institute Co., Ltd. as its subsidiaries.

The head office of the Bank is located in 51, Sogong-ro, Jung Gu, Seoul, Korea. The Bank has 887 branches and offices in Korea, and 22 branches and offices overseas as of June 30, 2017.

(2) The consolidated financial statements for Woori Bank and its subsidiaries (the “Group”) include the following subsidiaries:

			Percentage of ownership (%)				Location		Financial statements as of
Subsidiaries	Main business		June 30, 2017		December 31, 2016
Woori Bank:
Woori FIS Co., Ltd.		System software development & maintenance		100.0		100.0		Korea		June 30
Woori Private Equity Asset Management Co., Ltd.,		Finance		100.0		100.0		Korea		June 30
Woori Finance Research Institute Co., Ltd.		Other service business		100.0		100.0		Korea		June 30
Woori Card Co., Ltd.		Finance		100.0		100.0		Korea		June 30
Woori Investment Bank Co., Ltd.		Other credit finance business		58.2		58.2		Korea		June 30
Woori Credit Information Co., Ltd.		Credit information		100.0		100.0		Korea		June 30
Woori America Bank		Finance		100.0		100.0		U.S.A		June 30
Woori Global Markets Asia Limited		”		100.0		100.0		Hong Kong		June 30

		Percentage of ownership (%)				Location	Financial statements as of
Subsidiaries	Main business	June 30, 2017		December 31, 2016
Woori Bank (China) Limited	Finance		100.0		100.0	China		June 30
AO Woori Bank	”		100.0		100.0	Russia		June 30
PT Bank Woori Saudara Indonesia 1906 Tbk	”		74.0		74.0	Indonesia		June 30
Woori Brazil Bank	”		100.0		100.0	Brazil		June 30
Korea BTL Infrastructure Fund	”		99.9		99.9	Korea		June 30
Woori Fund Service Co., Ltd.	”		100.0		100.0	Korea		June 30
Woori Finance Cambodia	”		100.0		100.0	Cambodia		June 30
Woori Finance Myanmar	”		100.0		100.0	Myanmar		June 30
Wealth Development Bank	”		51.0		51.0	Philippines		June 30
Woori Bank Vietnam Limited	”		100.0		100.0	Vietnam		June 30
Kumho Trust First Co., Ltd. (*1)	Asset securitization		0.0		0.0	Korea		June 30
Asiana Saigon Inc. (*1)	”		0.0		0.0	Korea		June 30
An-Dong Raja First Co., Ltd. (*5)	”		—		0.0	Korea		June 30
Consus Eighth Co., LLC (*1)	”		0.0		0.0	Korea		June 30
KAMCO Value Recreation First Securitization Specialty Co., Ltd. (*1)	”		15.0		15.0	Korea		June 30
Hermes STX Co., Ltd. (*1)	”		0.0		0.0	Korea		June 30
BWL First Co., LLC (*1)	”		0.0		0.0	Korea		June 30
Woori Poongsan Co., Ltd. (*1)	”		0.0		0.0	Korea		June 30
Deogi Dream Fourth Co., Ltd. (*1)	”		0.0		0.0	Korea		June 30
Jeonju Iwon Ltd. (*1)	”		0.0		0.0	Korea		June 30
Wonju I one Inc. (*1)	”		0.0		0.0	Korea		June 30
Heitz Third Co., Ltd. (*1)	”		0.0		0.0	Korea		June 30
Woorihansoop 1st Co., Ltd. (*1)	”		0.0		0.0	Korea		June 30
Electric Cable First Co., Ltd (*1)	”		0.0		0.0	Korea		June 30
Woori International First Co., Ltd. (*1)	”		0.0		0.0	Korea		June 30
Woori HJ First Co., Ltd. (*1)	”		0.0		0.0	Korea		June 30
Woori WEBST 1st Co., Ltd. (*1)	”		0.0		—	Korea		June 30
Wibihansoop 1st Co., Ltd. (*1)	”		0.0		—	Korea		June 30
Uri QS 1st Co., Ltd (*1)	”		0.0		—	Korea		June 30
Samsung Plus Private Equity Investment Trust 36th and 23 beneficiary certificates for the rest (*2)	Securities investment and others		—		—	Korea		June 30
Principle Guaranteed Trust (*3)	Trust		0.0		0.0	Korea		June 30
Principle and Interest Guaranteed Trust (*3)	”		0.0		0.0	Korea		June 30
Woori Bank and Woori Private Equity Asset Management Co., Ltd.:
Woori Private Equity Fund (*4)	Other financial business		31.9		31.9	Korea		June 30
Woori Private Equity Fund:
Woori EL Co., Ltd.	Other financial business		100.0		100.0	Korea		June 30
Woori Investment Bank:
Dongwoo First Securitization Specialty Co., Ltd. (*1)	Asset securitization		5.0		5.0	Korea		June 30
Seari First Securitization Specialty Co., Ltd. (*1)	”		5.0		—	Korea		June 30
Namjong 1st Securitization Specialty Co., Ltd. (*1)	”		5.0		—	Korea		June 30
Woori Card Co., Ltd.
TUTU Finance-WCI Myanmar Co.,Ltd	Finance		100.0		100.0	Myanmar		June 30
Woori Card one of 2017-1 Securitization Specialty Co., Ltd. (*1)	Asset securitization		0.0		—	Korea		June 30

- 2 -

(*1) The entity was a structured entity for the purpose of asset securitization and was in scope for consolidation. Although the Group is not a majority shareholder, the Group 1) had the power over the investee, 2) was exposed, or had rights, to variable returns from its involvement with the investee, and 3) had the ability to use its power to affect its returns.

(*2) The entity was a structured entity for the purpose of investment in securities and was in scope for consolidation, considering that the Group 1) had the power over the investee, 2) was exposed, or has rights, to variable returns from its involvement with the investee, and 3) had the ability to use its power to affect its returns.

(*3) The entity was a money trust under the Financial Investment Services and Capital Markets Act and was in scope for consolidation. Although the Group was not a majority shareholder, the Group 1) had the power over the investee, 2) was exposed, or had rights, to variable returns from its involvement with the investee, and 3) had the ability to use its power to affect its returns.

(*4) Due to return of capital invested occurred during the six months ended June 30, 2017, both capital stock and the number of shares became nil. Residual net assets will be distributed in proportion to ownership interests.

(*5) Due to liquidation for the six months ended as of June 30, 2017, the entity was excluded from the scope for consolidation.

(3) As of June 30, 2017, and December 31, 2016, despite having more than a 50% ownership interest, the Group has not consolidated the following companies as the Group does not have the ability to control following subsidiaries:

	As of June 30, 2017
Subsidiaries	Location	Main business	Percentage of ownership (%)
Golden Bridge NHN Online Private Equity Investment (*)	Korea	Securities Investment		60.0
Mirae Asset Maps Clean Water Private Equity Investment Trust 7th (*)	Korea	Securities Investment		59.7
Kiwoom Yonsei Private Equity Investment Trust (*)	Korea	Securities Investment		88.9

(*) The Group owns the majority ownership interest in these structured entities, but has no power on the investees’ relevant activities. As results, it is deemed that the Group has no power or control on the structured entities.

	As of December 31, 2016
Subsidiaries	Location	Main business	Percentage of ownership (%)
Golden Bridge NHN Online Private Equity Investment (*)	Korea	Securities Investment		60.0
Mirae Asset Maps Clean Water Private Equity Investment Trust 7th (*)	Korea	Securities Investment		59.7
Kiwoom Yonsei Private Equity Investment Trust (*)	Korea	Securities Investment		88.9
Kiwoom Frontier Professional Investment Private Fund 6(Bond) (*)	Korea	Securities Investment		50.0

(*) The Group owns the majority ownership interest in these structured entities, but has no power on the investees’ relevant activities. As results, it is deemed that the Group has no power or control on the structured entities.

(4) The summarized financial information before the elimination of intercompany transactions of the subsidiaries whose financial information was prepared under K-IFRS for the Group’s consolidated financial statements is as follows (Unit: Korean Won in millions):

	As of and for the six months ended June 30, 2017
	Assets		Liabilities		Operating revenue		Net income (loss) attributable to owners			Comprehensive income (loss) attributable to owners
Woori FIS Co., Ltd.		107,878		71,169		120,932		1,201			1,201
Woori Private Equity Asset Management Co., Ltd.		39,627		1,114		295		(5,551	)		(5,581	)
Woori Finance Research Institute Co., Ltd.		4,359		624		2,840		366			358
Woori Card Co., Ltd.		8,050,927		6,463,953		861,379		61,864			62,008
Woori Investment Bank Co., Ltd.		1,637,534		1,452,659		104,593		12,119			12,814
Woori Credit Information Co., Ltd.		31,436		4,516		15,153		548			548
Woori America Bank		1,924,805		1,716,542		40,442		7,173			(4,523	)
Woori Global Markets Asia Limited		275,270		157,145		3,970		811			(6,303	)
Woori Bank (China) Limited		5,004,878		4,497,985		167,916		5,949			(10,312	)
AO Woori Bank		208,891		157,486		7,976		2,214			19

- 3 -

	As of and for the six months ended June 30, 2017
	Assets		Liabilities		Operating revenue		Net income (loss) attributable to owners			Comprehensive income (loss) attributable to owners
PT Bank Woori Saudara Indonesia 1906 Tbk		2,095,286		1,703,599		99,016		19,431			800
Woori Brazil Bank		183,329		149,437		11,137		1,257			(1,294	)
Korea BTL Infrastructure Fund		786,584		300		15,257		13,415			13,415
Woori Fund Service Co., Ltd.		11,743		937		4,410		792			792
Woori Finance Cambodia		42,841		23,657		2,569		571			279
Woori Finance Myanmar		18,198		5,098		860		144			186
Wealth Development Bank		181,254		145,369		6,681		1,051			552
Woori Bank Vietnam Limited		593,941		440,594		15,563		3,388			(5,598	)
Money trust under the FISCM Act(*)		1,552,996		1,523,843		20,893		(177	)		(177	)
Structured entity for the securitization of financial assets		591,463		1,000,954		10,436		742			(740	)
Structured entity for the investments in securities		2,228,682		514,843		38,156		14,752			3,387

(*) FISCM Act: Financial Investment Services and Capital Markets Act

	As of and for the year ended December 31, 2016
	Assets		Liabilities		Operating revenue		Net income (loss) attributable to owners			Comprehensive income (loss) attributable to owners
Woori FIS Co., Ltd.		141,329		105,821		244,783		1,048			1,432
Woori Private Equity Asset Management Co., Ltd.		97,338		53,244		2,154		312			219
Woori Finance Research Institute Co., Ltd.		3,710		334		4,445		108			100
Woori Card Co., Ltd.		7,606,108		6,180,893		1,555,373		109,393			116,381
Woori Investment Bank Co., Ltd.		1,576,627		1,404,566		178,572		23,872			23,897
Woori Credit Information		31,292		4,416		27,884		543			618
Woori America Bank		2,186,049		1,973,263		73,909		15,266			20,899
Woori Global Markets Asia Limited		272,008		147,581		7,255		1,863			5,582
Woori Bank (China) Limited		4,984,017		4,466,812		475,174		32,025			11,505
AO Woori Bank		239,860		188,474		16,221		5,650			15,553
PT Bank Woori Saudara Indonesia 1906 Tbk		2,089,822		1,693,111		179,014		24,573			48,542
Woori Brazil Bank		241,229		206,043		17,059		2,786			9,600
Korea BTL Infrastructure Fund		784,770		299		33,476		29,617			29,617
Woori Fund Service Co., Ltd.		11,386		1,372		7,787		1,011			1,011
Woori Finance Cambodia		32,405		24,751		4,545		1,250			1,494
Woori Finance Myanmar		4,305		2,651		380		(613	)		(569	)
Wealth Development Bank		209,779		174,446		12,519		1,248			1,876
Woori Bank Vietnam Limited		159,223		278		—		(346	)		3,545
Money trust under the Trust Business Act		1,525,145		1,495,815		55,540		697			697
Structured entity for the securitization of financial assets		487,431		895,824		29,480		6,912			7,138
Structured entity for the investments in securities		4,397,163		1,898,977		137,896		56,605			61,535

(5) The financial support that the Group provides to consolidated structured entities is as follows:

• Structured entity for the securitization of financial assets

The structured entity is established for the purpose of securitization of project financing loans, corporate bonds, and other financial assets. The Group is involved with the structured entity through providing with credit facility over asset-backed commercial papers issued by the entity, originating loans directly to the structured entity, or purchasing 100% of the subordinated debts issued by the structured entity.

• Structured entity for the investments in securities

The structured entity is established for the purpose of investments in securities. The Group acquires beneficiary certificates through its contribution of fund to the structured entity, and it is exposed to the risk that it may not be able to recover its fund depending on the result of investment performance of asset managers of the structured entity.

- 4 -

• Money trust under the Financial Investment Services and Capital Markets Act

The Group provides with financial guarantee of principal and interest or principal only to some of its trust products. Due to the financial guarantees, the Group may be obliged to supplement when the principal and interest or principal of the trust product sold is short of the guaranteed amount depending on the result of investment performance of the trust product.

(6) The details of the limitations with regard to the transfer of assets or the redemption of liabilities within the Group are provided below.

Some subsidiaries are regulated by the rules of the jurisdictions, in which they were incorporated, with regard to funding or management of deposits. Also, there is the limitation that they must have pre-approval from their regulators in case of remittance of earnings to the Bank.

(7) The Group has entered into various agreements with structured entities such as asset securitization vehicles, structured finance and investment funds, and monetary funds. Where it is determined in accordance with K-IFRS 1110 that the Group has no controlling power over such structured entities, the entities are not consolidated. The nature of interests, which the Group retains, and the risks, to which the Group is exposed, of the unconsolidated structured entities are as follows:

The interests to unconsolidated structured entities, which the Group retains, are classified to asset securitization vehicles, structured finance and investment fund, based on the nature and the purpose of the structured entities.

Asset securitization vehicle issues asset-backed securities and redeems the principal and interest or distributes dividends on asset-backed securities with profits from collecting cash flows or sale of securitized assets. The Group, as a secondary guarantor, provides purchase commitments for its asset-backed securities or guarantees to such asset securitization vehicle and recognizes commission income or interest income related to the commitment or guarantees. Therefore, the Group would be exposed to risks to purchases or pays back asset-backed securities issued by the vehicles when a primary guarantor fails to provide the financing asset securitization vehicles.

Structured finance includes investments in project financing on real estates, social overhead capital (“SOC”), infrastructure and shipping finance. They are formed as special purpose entity by funding through equity investments and loans from various investors. Investment decisions are made by the Group based on business outlook of such projects. In relation to such investments, the Group recognizes interest income on loans, gains or losses on valuation of equity investments or dividend income. The structured finance is secured by additional funding agreement, guarantee or credit facilities. However, the structured financing project would fail to return the capital of equity investments or principal of loans to the Group if it is discontinued or did not achieve business outcome.

Investment funds include trusts and private equity funds. A trust is formed by contributions from various investors, operated by a manager engaged to the trust and distributed proceeds from sales of investments to the investors. A private equity fund is established in order to acquire ownership interests in a portfolio company with exit strategy after implementing financial and operational restructuring of the company. The Group recognizes unrealized gains or losses on change in value of investments in proposition of ownership interests in investments. The Group would be exposed to risks of loss when the value of portfolio investment is decreased.

Total assets of the unconsolidated structured entities, the carrying value of the related items recorded, the maximum exposure to risks, and the loss recognized in conjunction with the unconsolidated structured entities as of June 30, 2017 and December 31, 2016 are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Asset securitization vehicle		Structured finance		Investment funds
Total asset of the unconsolidated structured entities		7,177,502		62,945,606		8,093,819
Assets recognized in the consolidated financial statements related to the unconsolidated structured entities		3,515,343		2,414,906		1,247,303
Loans and receivables		42,905		2,125,426		—
Financial assets at fair value through profit or loss		—		174,805		13,203
Available-for-sale financial assets		1,152,928		109,317		1,192,955
Held-to-maturity financial assets		2,319,279		—		—
Investments in joint ventures and associates		—		—		41,145
Derivative assets		231		5,358		—

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	June 30, 2017
	Asset securitization vehicle		Structured finance		Investment funds
Liabilities recognized in the consolidated financial statements related to the unconsolidated structured entities		1,407		1,327		—
Derivative liabilities		254		412		—
Other liabilities (including provisions)		1,153		915		—
The maximum exposure to risks		4,284,886		3,306,334		1,247,303
Investments		3,515,343		2,414,906		1,247,303
Purchase agreements		6,000		—		—
Credit facilities		763,543		891,428		—
Loss recognized on unconsolidated structured entities		302		5,967		1,893
	December 31, 2016
	Asset securitization vehicle		Structured finance		Investment funds
Total asset of the unconsolidated structured entities		8,426,713		61,324,862		9,131,362
Assets recognized in the consolidated financial statements related to the unconsolidated structured entities		3,361,910		2,790,215		1,749,494
Loans and receivables		65,470		2,414,044		—
Financial assets at fair value through profit or loss		—		254,150		—
Available-for-sale financial assets		1,216,446		115,843		1,664,865
Held-to-maturity financial assets		2,079,648		—		—
Investments in joint ventures and associates		—		—		84,629
Derivative assets		346		6,178		—
Liabilities recognized in the consolidated financial statements related to the unconsolidated structured entities		1,363		1,224		—
Derivative liabilities		201		362		—
Other liabilities (including provisions)		1,162		862		—
The maximum exposure to risks		4,263,993		3,802,210		1,749,494
Investments		3,361,910		2,790,215		1,749,494
Purchase agreements		28,000		—		—
Credit facilities		834,083		970,195		—
Other commitments		40,000		41,800		—
Loss recognized on unconsolidated structured entities		6,353		71,185		683

(8) Subsidiaries of which non-controlling interests are significant to the Group’s consolidated financial statements are as follows (Unit: Korean Won in millions):

1) Accumulated non-controlling interests at the end of the reporting period

	June 30, 2017		December 31, 2016
Woori Investment Bank		79,350		73,986
PT Bank Woori Saudara Indonesia 1906 Tbk		68,946		70,249
Wealth Development Bank		17,584		16,983

2) Net income attributable to non-controlling interests

	For the six months ended June 30, 2017		For the six months ended June 30, 2016
Woori Investment Bank		5,072		4,806
PT Bank Woori Saudara Indonesia 1906 Tbk		5,048		2,692
Wealth Development Bank		515		—

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3) Dividends to non-controlling interests

	For the six months ended June 30, 2017		For the six months ended June 30, 2016
PT Bank Woori Saudara Indonesia 1906 Tbk		1,513		1,242

2. SIGNIFICANT BASIS OF PREPARATION AND ACCOUNTING POLICIES

The Group’s consolidated financial statements are prepared in accordance with Korean International Financial Reporting Standards (“K-IFRS”) 1034, Interim Financial Reporting. It is necessary to use the annual financial statements for the year ended December 31, 2016 for understanding of the accompanying interim financial statements.

The significant accounting policies that have been applied for the preparation of the consolidated financial statements as of and for the six months ended June 30, 2017 are described below, and the significant accounting policies are the same as the accounting policies applied for the preparation of the previous year’s consolidated financial statements, except the impacts from the adoptions of accounting standards or interpretations which are explained below.

(1) The Group has newly adopted the following amendment to K-IFRS that affected the Group’s accounting policies.

Amendments to K-IFRS 1007 – Statement of Cash Flows

The amendments require that changes in liabilities arising from financial activities are disclosed. The adoption of the amendments has no material impact on the Group’s consolidated financial statements.

Amendments to K-IFRS 1012 – Income Taxes

The amendments clarify that unrealized losses on fixed-rate debt instruments measured at fair value and measured at cost for tax purposes give rise to a deductible temporary difference regardless of whether the holder expects to recover the carrying amount of the debt instrument by sale or by use and that the estimate of probable future taxable profit may include the recovery of some of assets for more than their carrying amount. When the Group assesses whether there will be sufficient taxable profit, the Group should compare the deductible temporary differences with future taxable profit that excludes tax deductions resulting from the reversal of those deductible temporary differences. The adoption of the amendments has no material impact on the Group’s consolidated financial statements.

(2) The Group has not applied the following K-IFRSs that have been issued but are not yet effective:

Enactments to K-IFRS 1109 – Financial Instruments

The enactments to K-IFRS 1109 contain the requirements for the classification and measurement of financial assets and financial liabilities based on a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets and based on the contractual terms that give rise on specified dates to cash flows, impairment methodology based on the expected credit losses, and broadened types of instruments that qualify as hedging instruments and the types of risk components of non-financial items that are eligible for hedge accounting and the change of the hedge effectiveness test. K-IFRS 1109 – Financial Instruments which was enacted on September 25, 2015will be applied for annual periods beginning on or after 1 January 2018 or may be applied earlier. This standard will supersede K-IFRS 1039- Recognition and Measurement of Financial Instruments. By the way, the Group will apply K-IFRS 1109 for annual periods beginning on or after 1 January 2018.

In addition, K-IFRS 1109 includes certain exceptions to the classification and measurement of financial assets and the retroactive restatement for classification and measurement of financial assets, impairment of financial assets; and hedge accounting.

The Group evaluated the potential effect to the financial statement as of December 31, 2016 based on the present situation as of June 30, 2017 and the available information for evaluating the financial effect by initial adoption of K-IFRS 1109 preliminarily. The effect to the financial statement for the initial adopted fiscal year depends on not only the selection and decision of the accounting policies by this standard but also the financial instrument which the Group holds for the period and economic situation and so on.

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Meanwhile, the typical financial impacts per each major requirements under the Standard that are expected to be applicable are as follows:

Phase 1: Classification and measurement of financial assets and financial liabilities

All recognized financial assets that are currently within the scope of K-IFRS 1109 will be subsequently measured either at amortized cost, fair value through other comprehensive income (FVOCI), or fair value through profit or loss (FVTPL) under K-IFRS 1109 based on the business model and the nature of the contractual cash flows. And if the hybrid contracts contains the financial assets as the host contract, embedded derivative will not be separated, they will be classified as a whole. Specifically:

	The business model
The nature of contractual cash flows	Objective is to collect the contractual cash flows	Objective is achieved both by collecting the contractual cash flows and selling financial assets	Objective is to sell financial assets and so on
Contractual cash flows that are solely payment of principal and interest	Measured at amortized cost(*1)	Measure at FVOCI(*1)	Measure at FVTPL
Other than the above	Measure at FVTPL(*2)	Measure at FVTPL(*2)	Measure at FVTPL(*2)

(*1) For eliminating or reducing accounting discrepancies, an irrevocable election can be made at initial recognition to measure the investment at FVTPL.

(*2) For the equity securities which are traded for the purpose other than short-term trading, an irrevocable election can be made at initial recognition to measure the investment at FVOCI.

Under K-IFRS 1109, as it is more strictly required to classify to the financial assets measured at amortized cost or fair value through OCI compared to under current K-IFRS 1039, when adopting the K-IFRS 1109, the volatility of net income can be expanded by the increasing portion of the financial asset measured at FVTPL. In accordance with K-IFRS 1109, the debt instruments only which occur the cash flow that is compose of solely the principal and the interest on the remaining principal at specified dates by the contract, whose purpose is to receive the cash flow under the contract can be measured at amortized cost. In accordance with K-IFRS 1039, the Group shall measure loans and receivables amounting to 258,392,633 million Won and held-to-maturity financial assets amounting to 13,910,251 million Won as of December 31, 2016 as amortized cost, and among theses, 21,305 million Won of debt instruments, whose host contracts are debt securities and which separated the embedded derivatives from the hybrid contracts is included.

Based on the result of the preliminary effect evaluation, if K-IFRS 1109 adopt to the above financial assets as of December 31, 2016, as they almost occur the cash flow that is compose of solely the principal and the interest on the remaining principal at specified dates by the contract, whose purpose is to receive the cash flow under the contract, so they can be measure at amortized cost and there is no material effect to the financial statement. However, for debt securities as the host contract of hybrid contract amounting to 21,305 million Won, as the cash flow under the contract is not composed of solely the principal and the interest on the remaining principal, it will be classified to the financial asset measured at FVTPL.

In accordance with K-IFRS 1109, the debt instruments only which occur the cash flow that is composed of solely the principal and the interest on the remaining principal at specified dates by the contract, whose purpose is to receive the cash flow under the contract and sell itself can be measure at FVOCI. In accordance with K-IFRS 1039, the Group hold debt instruments as available-for-sale assets amounting to 16,541,888 million Won as of December 31, 2016.

Based on the result of the preliminary effect evaluation, if K-IFRS 1109 adopt to the above AFS financial assets as of December 31, 2016, they almost can be classified to financial asset measured at FVOCI. However, for beneficiary certificates amounting to 2,822,082 million Won, other equity investment amounting to 262,175 million Won and debt securities amounting to 111,706 million Won, as the cash flows of those are not composed of solely the principal and the interest on the remaining principal, they may be classified to financial assets measured at FVTPL. As a result, the volatility of net income can be expanded.

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In accordance with K-IFRS 1109, an entity may make an irrevocable election at initial recognition for particular investments in equity instruments that would otherwise be measured at fair value through profit or loss to present subsequent changes in fair value in other comprehensive income, and the amounts should not be recycled to profit or loss. In accordance with K-IFRS 1039, the Group holds equity investments that are classified as available-for-sale financial assets amounting to 1,161,375 million Won as of December 31, 2016.

The Group are reviewing the designation of the financial asset measured at FVOCI among the available for sale equity securities.

One major change from K-IFRS 1039 relates to the presentation of changes in the fair value of a financial liability designated as at FVTPL attributable to changes in the credit risk of that liability. Under K-IFRS 1109, such changes are presented in other comprehensive income, unless the presentation of the effect of the change in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. In accordance with K-IFRS 1039, the Group holds financial liabilities designated as at FVTPL 766,880 million Won as of December 31, 2016.

Based on the result of the preliminary effect evaluation, the variance amount due to the effect of accumulated credit risk variance among the total variance of financial liabilities designated as at FVPTL is 15,790 million Won.

Phase 2: Impairment methodology

The impairment model under K-IFRS 1109 reflects expected credit losses. Under the impairment approach in K-IFRS 1109, it is no longer necessary for a credit event to have occurred before credit losses are recognized. Instead, an entity always accounts for expected credit losses and changes in those expected credit losses. The amount of expected credit losses should be updated at each reporting date to reflect changes in credit risk since initial recognition.

In accordance with K-IFRS 1109, the allowance for doubtful receivables is measured at the amount equivalent to the expected 12-month credit loss or the lifetime expected credit loss, depending on the degree of deterioration of the credit risk after the initial recognition of the financial asset. As a result, the credit loss can be earlier than under occurred loss model of current K-IFRS 1039.

	Stage 1	Stage 2	Stage 3
Stage	In case the exposure’s credit risk has not increased significantly since initial recognition(*)	In case the exposure has suffered a significant increase in credit risk	In case the exposure meets the accounting definition of credit impaired
Allowance recognition	The Group recognizes only 12-month expected credit losses as a loss allowance	The Group recognizes a loss allowance equal to lifetime expected credit losses

(*) It can be considered that the credit risk dose not increase significantly when the credit risk is low at the year-end.

Meanwhile, K-IFRS 1109 requires that, an entity shall only recognize the cumulative changes in lifetime expected credit losses since initial recognition as a loss allowance for purchased or originated credit-impaired financial assets.

Based on the result of the preliminary effect evaluation, the allowance for credit losses amounting to 2,353,122 as of December 31, 2016 will increase by 11% approximately. However, there will be no material change in the BIS Total Equity ratio compared to 15.29% as of December 31, 2016. The result of preliminary effect evaluation can be changed according to the additional available information for the future and the relevant decision making.

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Phase 3: Hedge accounting

The general hedge accounting requirements of K-IFRS 1109 is relaxed compared to under hedge accounting mechanisms in K-IFRS 1039. Greater flexibility has been introduced to the types of transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify as hedging instruments and hedged items that are eligible for hedge accounting. In addition, the quantitative criteria (80~125%) for the highly hedge effectiveness is abolished and retrospective assessment of hedge effectiveness is no longer required. So it enable the company to focus on the risk management activities.

Enactments to K-IFRS 1115 – Revenue from Contracts with Customers

The core principle under K-IFRS 1115 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments introduces a 5-step approach to revenue recognition and measurement: 1) Identify the contract with a customer, 2) Identify the performance obligations in the contract, 3) Determine the transaction price, 4) Allocate the transaction price to the performance obligations in the contract, 5) Recognize revenue when (or as) the entity satisfies a performance obligation. This standard will supersede K-IFRS 1011 - Construction Contracts, K-IFRS 1018- Revenue, K-IFRS 2113 - Customer Loyalty Programmes, K-IFRS 2115-Agreements for the Construction of Real Estate, K-IFRS 2118 - Transfers of Assets from Customers, and K-IFRS 2031-Revenue-Barter Transactions Involving Advertising Services. The amendments are effective for annual periods beginning on or after 1 January 2018.

Enactments to K-IFRS 2122 – Foreign Currency Transactions and Advance Consideration

The amendments clarify that the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income (or part of it) is the date on which an entity initially recognizes the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration. The amendments are effective for annual periods beginning on or after 1 January 2018.

Annual Improvements to K-IFRS 2014-2016 Cycle

The amendments clarify that in applying the equity method of accounting to an associate or a joint venture in accordance with K-IFRS 1028, an investor, such as venture capital investment vehicle, may apply fair value measurement selectively to each of its associate or joint venture, as well as certain amendments for K-IFRS 1101. The amendments are effective for annual periods beginning on or after 1 January 2018.

The Group is in the process of evaluating the impact on the consolidated financial statements upon the adoption of amendments of K-IFRSs that have been issued but are not yet effective.

3. SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS

In the application of the Group’s accounting policies to the interim financial statements, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results can differ from those estimates based on such definitions.

The significant judgments which management has made about the application of the Group’s accounting policies and key sources of uncertainty in estimate do not differ from those used in preparing the consolidated financial statements for the year ended December 31, 2016.

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4. RISK MANAGEMENT

The Group’s operating activity is exposed to various financial risks. The Group is required to analyze and assess the level of complex risks, and determine the permissible level of risks and manage such risks. The Group’s risk management procedures have been established to improve the quality of assets for holding or investment purposes by making decisions as how to avoid or mitigate risks through the identification of the source of the potential risks and their impact.

The Group has established an approach to manage the acceptable level of risks and reduce the excessive risks in financial instruments in order to maximize the profit given risks present, for which the Group has implemented processes for risk identification, assessment, control, and monitoring and reporting.

The risk is managed by the risk management department in accordance with the Group’s risk management policy. The Risk Management Committee makes decisions on the risk strategies such as the avoidance of concentration on capital at risk and the establishment of acceptable level of risk.

(1) Credit risk

Credit risk represents the possibility of financial losses incurred when the counterparty fails to fulfill its contractual obligations. The goals of credit risk management are to maintain the Group’s credit risk exposure to a permissible degree and to optimize its rate of return considering such credit risk.

1) Credit risk management

The Group considers the probability of failure in performing the obligation of its counterparties, credit exposure to the counterparty, the related default risk and the rate of default loss. The Group uses the credit rating model to assess the possibility of counterparty’s default risk; and when assessing the obligor’s credit grade, the Group utilizes credit grades derived using statistical methods.

In order to manage credit risk limit, the Group establishes the appropriate credit line per obligor, company or industry. It monitors obligor’s credit line, total exposures and loan portfolios when approving the loan.

The Group mitigates credit risk resulting from the obligor’s credit condition by using financial and physical collateral, guarantees, netting agreements and credit derivatives. The Group has adopted the entrapment method to mitigate its credit risk. Credit risk mitigation is reflected in qualifying financial collateral, trade receivables, guarantees, residential and commercial real estate and other collaterals. The Group regularly performs a revaluation of collateral reflecting such credit risk mitigation.

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2) Maximum exposure to credit risk

The Group’s maximum exposure to credit risk refers to net book value of financial assets net of allowances, which shows the uncertainties of maximum changes of net value of financial assets attributable to a particular risk without considering collateral and other credit enhancements obtained. However, the maximum exposure is the fair value amount (recorded on the books) for derivatives, maximum contractual obligation for payment guarantees and loan commitment for loan contracts.

The maximum exposure to credit risk is as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Loans and receivables:
Korean treasury and government agencies		12,654,438		16,058,305
Banks		26,983,344		20,242,260
Corporates		89,208,930		88,985,566
Consumers		136,301,912		133,106,502
Sub-total		265,148,624		258,392,633
Financial assets at fair value through profit or loss (“FVTPL”):
Gold banking assets		31,169		26,180
Debt securities held for trading		2,809,780		2,644,916
Financial assets designated at FVTPL		6,539		4,348
Derivative assets for trading		1,644,068		2,898,295
Sub-total		4,491,556		5,573,739
Available-for-sale (“AFS”) debt securities		15,123,734		16,541,888
Held-to-maturity (“HTM”) securities		15,144,766		13,910,251
Derivative assets for hedging		140,176		140,577
Off-balance accounts:
Guarantees		13,160,410		14,761,784
Loan commitments		81,601,017		83,795,496
Sub-total		94,761,427		98,557,280
Total		394,810,283		393,116,368

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a) Credit risk exposure by geographical areas

The following tables analyze credit risk exposure by geographical areas (Unit: Korean Won in millions):

	June 30, 2017
	Korea		China		USA		UK		Japan		Others (*)		Total
Loans and receivables		249,567,066		4,403,226		2,684,388		1,057,722		315,158		7,121,064		265,148,624
Financial assets at FVTPL		4,309,559		1,156		—		136,922		—		43,919		4,491,556
AFS debt securities		14,555,949		—		97,613		—		—		470,172		15,123,734
HTM securities		15,026,481		—		53,236		—		—		65,049		15,144,766
Derivative assets		70,495		—		—		69,648		33		—		140,176
Off-balance accounts		92,668,381		784,103		114,222		80,312		36,582		1,077,827		94,761,427
Total		376,197,931		5,188,485		2,949,459		1,344,604		351,773		8,778,031		394,810,283
	December 31, 2016
	Korea		China		USA		UK		Japan		Others (*)		Total
Loans and receivables		241,380,250		4,286,018		2,792,088		895,874		323,470		8,714,933		258,392,633
Financial assets at FVTPL		5,205,849		6,525		—		261,547		81		99,737		5,573,739
AFS debt securities		16,155,290		13,845		137,861		—		—		234,892		16,541,888
HTM securities		13,758,863		—		20,336		—		—		131,052		13,910,251
Derivative assets		74,166		—		—		66,342		—		69		140,577
Off-balance accounts		96,245,092		737,513		103,130		80,831		23,250		1,367,464		98,557,280
Total		372,819,510		5,043,901		3,053,415		1,304,594		346,801		10,548,147		393,116,368

(*) Others consist of financial assets in Indonesia, Vietnam, Panama, European countries and others.

b) Credit risk exposure by industries

The following tables analyze credit risk exposure by industries, which are service, manufacturing, finance and insurance, construction, individuals and others in accordance with the Korea Standard Industrial Classification Code (Unit: Korean Won in millions):

	June 30, 2017
	Service		Manufacturing		Finance and insurance		Construction		Individuals		Others		Total
Loans and receivables		46,324,552		34,668,461		41,409,536		3,853,079		128,752,554		10,140,442		265,148,624
Financial assets at FVTPL		70,056		109,773		3,360,962		17,366		3,066		930,333		4,491,556
AFS debt securities		895,946		35,749		7,652,764		103,361		—		6,435,914		15,123,734
HTM securities		1,142,854		—		9,680,637		242,968		—		4,078,307		15,144,766
Derivative assets		—		—		140,176		—		—		—		140,176
Off-balance accounts		17,715,516		23,225,989		9,473,004		3,798,431		35,517,442		5,031,045		94,761,427
Total		66,148,924		58,039,972		71,717,079		8,015,205		164,273,062		26,616,041		394,810,283
	December 31, 2016
	Service		Manufacturing		Finance and insurance		Construction		Individuals		Others		Total
Loans and receivables		46,040,278		35,652,974		37,711,983		3,789,670		125,558,637		9,639,091		258,392,633
Financial assets at FVTPL		77,198		360,881		4,093,567		24,140		993		1,016,960		5,573,739
AFS debt securities		1,092,279		57,781		9,568,151		63,166		—		5,760,511		16,541,888
HTM securities		1,673,971		—		8,290,451		251,599		—		3,694,230		13,910,251
Derivative assets		—		—		140,577		—		—		—		140,577
Off-balance accounts		18,423,611		26,878,320		9,927,574		4,621,971		33,603,651		5,102,153		98,557,280
Total		67,307,337		62,949,956		69,732,303		8,750,546		159,163,281		25,212,945		393,116,368

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3) Credit risk of loans and receivables

The credit exposure of loans and receivables by customer and loan condition is as follows (Unit: Korean Won in millions):

	June 30, 2017
	Korean treasury and government agencies				Corporates
			Banks		General business		Small & medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Loans and receivables neither overdue nor impaired		12,657,346		27,001,307		49,843,626		32,633,174		6,250,349		88,727,149		135,376,614		263,762,416
Loans and receivables overdue but not impaired		339		—		61,757		42,780		—		104,537		791,637		896,513
Impaired loans and receivables		—		—		1,187,525		352,363		140,846		1,680,734		536,133		2,216,867
Gross loans and receivables		12,,657,685		27,001,307		51,092,908		33,028,317		6,391,195		90,512,420		136,704,384		266,875,796
Allowance for credit losses		3,247		17,963		891,356		370,916		41,218		1,303,490		402,472		1,727,172
Total, net		12,654,438		26,983,344		50,201,552		32,657,401		6,349,977		89,208,930		136,301,912		265,148,624
	December 31, 2016
	Korean treasury and government agencies				Corporates
			Banks		General business		Small & medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Loans and receivables neither overdue nor impaired		16,062,399		20,258,860		49,815,352		31,520,617		7,142,440		88,478,409		132,195,005		256,994,673
Loans and receivables overdue but not impaired		—		—		48,294		57,245		—		105,539		765,829		871,368
Impaired loans and receivables		—		—		1,404,568		429,955		208,372		2,042,895		510,793		2,553,688
Gross loans and receivables		16,062,399		20,258,860		51,268,214		32,007,817		7,350,812		90,626,843		133,471,627		260,419,729
Allowance for credit losses		4,094		16,600		1,156,000		424,142		61,135		1,641,277		365,125		2,027,096
Total, net		16,058,305		20,242,260		50,112,214		31,583,675		7,289,677		88,985,566		133,106,502		258,392,633

- 14 -

a) Credit quality of loans and receivables

The Group manages credit quality of its loans and receivables, (neither overdue nor impaired, net of allowance) through an internal rating system. Segregation of credit quality is as follows (Unit: Korean Won in millions):

	June 30, 2017
	Korean treasury and government agencies				Corporates
			Banks		General business		Small & medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Upper grade (*1)		12,654,075		26,983,344		42,088,774		20,857,697		5,226,763		68,173,234		131,870,084		239,680,737
Lower grade (*2)		24		—		7,407,841		11,582,548		994,105		19,984,494		3,358,233		23,342,751
Total		12,654,099		26,983,344		49,496,615		32,440,245		6,220,868		88,157,728		135,228,317		263,023,488
Value of collateral(*3)		—		416,873		19,138,772		26,256,124		3,257,476		48,652,372		111,872,000		160,941,245
	December 31, 2016
	Korean treasury and government agencies				Corporates
			Banks		General business		Small & medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Upper grade (*1)		16,058,288		20,242,260		41,461,420		18,755,963		5,337,033		65,554,416		128,374,017		230,228,981
Lower grade (*2)		17		—		7,941,871		12,550,282		1,763,658		22,255,811		3,680,920		25,936,748
Total		16,058,305		20,242,260		49,403,291		31,306,245		7,100,691		87,810,227		132,054,937		256,165,729
Value of collateral(*3)		—		358,456		18,003,674		25,493,006		3,996,162		47,492,842		111,054,910		158,906,208

(*1) AAA~BBB for corporates, and 1~6 level for consumers

(*2) BBB- ~C for corporates, and 7~10 level for consumers

(*3) The value of collateral held is the recoverable amount used when calculating allowance for credit losses.

Allowances for credit losses, for loans and receivables neither overdue nor impaired, amounting to 738,928 million Won and 828,944 million Won as of June 30, 2017 and as of December 31, 2016, respectively, which are deducted from the loans and receivables above.

b) Aging analysis of loans and receivables

Aging analysis of loans and receivables (overdue but not impaired, net of allowance) is as follows (Unit: Korean Won in millions):

	June 30, 2017
Past due	Korean treasury and government agencies		Banks		Corporates								Consumers		Total
					General business		Small & medium sized enterprise		Project financing and others		Sub-total
Less than 30 days		339		—		43,678		30,007		—		73,685		617,611		691,635
30~59 days		—		—		4,482		6,948		—		11,430		86,620		98,050
60~89 days		—		—		8,721		2,580		—		11,301		44,025		55,326
Total		339		—		56,881		39,535		—		96,416		748,256		845,011
Value of collateral (*)		—		—		7,782		27,518		—		35,300		559,652		594,952
	December 31, 2016
Past due	Korean treasury and government agencies		Banks		Corporates								Consumers		Total
					General business		Small & medium sized enterprise		Project financing and others		Sub-total
Less than 30 days		—		—		45,255		41,329		—		86,584		584,995		671,579
30~59 days		—		—		1,553		8,933		—		10,486		90,296		100,782
60~89 days		—		—		337		2,123		—		2,460		49,151		51,611
Total		—		—		47,145		52,385		—		99,530		724,442		823,972
Value of collateral (*)		—		—		7,021		45,304		—		52,325		546,164		598,489

(*) The value of collateral held is the recoverable amount used when calculating allowance for credit losses.

- 15 -

Allowances for credit losses, for loans and receivables that are overdue but not impaired, amounting to 51,502 million Won and 47,396 million Won as of June 30, 2017 and December 31, 2016, respectively, which are deducted from the loans and receivables above.

c) Impaired loans and receivables

Impaired loans and receivables, net of allowance are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Korean treasury and government agencies		Banks		Corporates								Consumers		Total
					General business		Small & medium sized enterprise		Project financing and others		Sub-total
Impaired loans		—		—		648,056		177,621		129,109		954,786		325,339		1,280,125
Value of collateral (*)		—		—		534,481		199,004		42,761		776,246		243,600		1,019,846
	December 31, 2016
	Korean treasury and government agencies		Banks		Corporates								Consumers		Total
					General business		Small & medium sized enterprise		Project financing and others		Sub-total
Impaired loans		—		—		661,778		225,045		188,986		1,075,809		327,123		1,402,932
Value of collateral (*)		—		—		482,680		236,954		42,166		761,800		250,583		1,012,383

(*) The value of collateral held is recoverable amount used when calculating allowance for credit losses.

Allowances for credit losses, for impaired loans and receivables amounting to 936,742 million Won and 1,150,756 million Won as of June 30, 2017 and December 31, 2016, respectively, are deducted from the impaired loans and receivables above.

4) Credit quality of debt securities

The Group manages debt securities based on the external credit rating. Credit soundness of debt securities on the basis of External Credit Assessment Institution (ECAI)’s rating is as follows (Unit: Korean Won in millions):

	June 30, 2017
	Financial assets at FVTPL (*)		AFS debt securities		HTM securities		Total
AAA		1,784,374		11,403,174		14,435,935		27,623,483
AA- ~ AA+		803,146		2,873,585		685,184		4,360,915
BBB- ~ A+		222,260		787,938		22,261		1,032,459
Below BBB-		6,539		59,037		2,386		67,962
Total		2,816,319		15,123,734		15,144,766		33,084,819
	December 31, 2016
	Financial assets at FVTPL (*)		AFS debt securities		HTM securities		Total
AAA		1,658,332		12,490,934		13,342,384		27,491,650
AA- ~ AA+		720,535		3,372,310		466,401		4,559,246
BBB- ~ A+		266,049		618,736		101,466		986,251
Below BBB-		4,348		59,908		—		64,256
Total		2,649,264		16,541,888		13,910,251		33,101,403

(*) Financial assets at FVTPL comprise debt securities held for trading and financial assets designated at FVTPL.

- 16 -

(2) Market risk

Market risk is the possible risk of loss arising from trading activities and non-trading activities in the volatility of market factors such as interest rates, stock prices and foreign exchange rates. Market risk occurs as a result of changes in the interest rates and foreign exchange rates for financial instruments that are not yet settled, and all contracts are exposed to a certain level of volatility according to changes in the interest rates, credit spreads, foreign exchange rates and the price of equity securities.

1) Market risk management

For trading activities and non-trading activities, the Group avoids, bears, or mitigates risks by identifying the underlying source of the risks, measuring parameters and evaluating their appropriateness.

On a yearly basis, the Risk Management Committee establishes a Value at Risk (“VaR”, maximum losses) limit, loss limit and risk capital limit by subsidiaries for its management purposes. The limit by investment desk/dealer is independently managed to the extent of the limit given to subsidiaries and the limit by investment and loss cut is managed by the risk management personnel within the department.

The Group uses both a standard-based and an internal model-based approach to measure market risk. The standard-based approach is used to calculate individual market risk of owned capital while the internal model-based approach is used to calculate general capital market risk and it is used to measure internal risk management measure. For the trading activities, the Risk Management department measures the VaR limit by department, risk factor and loss limit on a daily basis and reports regularly to the Risk Management Committee.

2) Sensitivity analysis of market risk

The Group performs the sensitivity analyses both for trading and for non-trading activities.

For trading activities, the Group uses a VaR model that uses certain assumptions of possible fluctuations in market condition and, by conducting simulations of gains and losses, under which the model estimates the maximum losses that may occur. A VaR model predicts based on statistics of possible losses on the portfolio at a certain period currently or in the future. It indicates the maximum expected loss with at least 99% credibility. In short, there exists a one percent possibility that the actual loss might exceed the predicted loss generated from the VaR calculation. The actual results are periodically monitored to examine the validity of the assumptions, variables, and factors that are used in VaR calculations. However, this approach cannot prevent the loss when the market fluctuation exceeds expectation.

For the non-trading activities, interest rate Earning at Risk (“EaR”) and interest rate VaR, which is based on the simulations of the Net Interest Income (“NII”) and Net Present Value (“NPV”), are calculated for the Bank, and the risks for all other subsidiaries are measured and managed by the interest rate EaR and the interest rate VaR calculations based on the Bank for International Settlements (“BIS”) Framework.

NII is a profit-based indicator for displaying the profit changes in short term due to the short-term interest changes. It will be estimated as subtracting interest expenses of liabilities from the interest income of assets. NPV is an indicator for displaying risks in economic view according to unfavorable changes related to interest rate. It will be estimated as subtracting the present value of liabilities from the present value of assets.

EaR shows the maximum profit-loss amount, which indicates the maximum deduction amount caused by the unfavorable changes related to the interest rate of a certain period (i.e. 1 year). Interest rate VaR shows the potential maximum loss generated by the unfavorable changes during a certain period of time in the present or future.

- 17 -

a) Trading activities

The minimum, maximum and average VaR for the six months ended June 30, 2017 and the year ended December 31, 2016, respectively, and the VaR as of June 30, 2017 and December 31, 2016, respectively, are as follows (Unit: Korean Won in millions):

	As of June 30, 2017			For the six months ended June 30, 2017									As of December 31, 2016			For the year ended December 31, 2016
Risk factor				Average			Maximum			Minimum						Average			Maximum			Minimum
Interest rate		3,454			3,909			4,918			3,121			3,250			2,844			6,430			1,367
Stock price		2,954			3,124			4,419			1,523			4,191			3,456			5,063			2,304
Foreign currencies		5,452			4,648			5,452			4,061			4,396			4,914			7,686			3,967
Commodity price		33			47			188			8			152			113			325			21
Diversification		(5,406	)		(4,546	)		(5,614	)		(2,805	)		(5,630	)		(5,355	)		(10,385	)		(4,034	)
Total VaR		6,487			7,182			9,363			5,908			6,359			5,972			9,119			3,625

b) Non-trading activities

The NII and NPV are calculated for the assets and liabilities owned by the Bank and consolidated trusts, respectively, by using the simulation method. The scenario responding to interest rate (“IR”) changes are as follows (Unit: Korean Won in millions):

	June 30, 2017				December 31, 2016
	NII		NPV		NII		NPV
Base case		4,446,673		21,179,172		4,367,411		21,556,632
Base case (Prepay)		4,452,332		20,415,445		4,384,783		20,666,425
IR 100bp up		4,864,061		20,730,950		4,802,118		20,893,490
IR 100bp down		3,970,489		21,681,563		3,903,129		22,279,204
IR 200bp up		5,281,457		20,331,553		5,236,879		20,289,742
IR 200bp down		3,043,264		22,237,912		2,975,351		23,052,848
IR 300bp up		5,698,851		19,975,861		5,671,639		19,742,627
IR 300bp down		2,001,336		24,157,018		1,968,273		25,096,193

The interest EaR and VaR calculated based on the BIS Framework of subsidiaries other than the Bank and consolidated trusts are as follows (Unit: Korean Won in millions):

June 30, 2017				December 31, 2016
EaR		VaR		EaR		VaR
	225,370		136,770		188,381		110,335

- 18 -

The Group estimates and manages risks related to changes in interest rate due to the difference in the maturities of interest-bearing assets and liabilities and discrepancies in the terms of interest rates. Cash flows of principal amounts and interests from interest bearing assets and liabilities by re-pricing date are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Asset:
Loans and receivables		149,355,501		39,968,822		10,448,444		9,820,744		57,287,227		39,668,797		306,549,535
AFS financial assets		3,161,393		3,637,054		1,891,492		2,892,768		5,280,696		672,372		17,535,775
HTM financial assets		2,291,614		1,482,250		1,272,929		1,869,681		8,514,246		385,218		15,815,938
Total		154,808,508		45,088,126		13,612,865		14,583,193		71,082,169		40,726,387		339,901,248
Liability:
Deposits due to customers		96,202,309		40,528,239		28,639,228		23,643,820		37,355,584		24,958		226,394,138
Borrowings		11,013,414		651,775		686,099		385,342		2,687,313		428,381		15,852,324
Debentures		912,953		1,585,338		1,884,910		2,429,387		17,325,774		3,387,722		27,526,084
Total		108,128,676		42,765,352		31,210,237		26,458,549		57,368,671		3,841,061		269,772,546
	December 31, 2016
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Asset:
Loans and receivables		148,237,350		42,032,667		8,064,502		7,757,087		55,838,192		35,245,734		297,175,532
AFS financial assets		3,165,094		2,946,992		2,854,514		2,915,226		5,029,918		713,596		17,625,340
HTM financial assets		2,770,079		1,515,213		1,246,503		1,143,170		6,853,951		892,030		14,420,946
Total		154,172,523		46,494,872		12,165,519		11,815,483		67,722,061		36,851,360		329,221,818
Liability:
Deposits due to customers		100,051,821		36,614,529		25,028,378		25,017,836		34,513,004		40,737		221,266,305
Borrowings		13,772,710		1,044,748		491,330		368,431		2,816,565		421,677		18,915,461
Debentures		2,109,235		2,077,681		860,455		1,545,943		14,613,799		4,143,773		25,350,886
Total		115,933,766		39,736,958		26,380,163		26,932,210		51,943,368		4,606,187		265,532,652

- 19 -

3) Currency risk

Currency risk arises from monetary financial instruments denominated in foreign currencies other than the functional currency. Therefore, no currency risk arises from non-monetary items or financial instruments denominated in the functional currency.

Financial instruments in foreign currencies exposed to currency risk are as follows (Unit: USD in millions, JPY in millions, CNY in millions, EUR in millions, and Korean Won in millions):

	June 30, 2017
	USD				JPY				CNY				EUR				Others		Total
	Foreign currency		Won equivalent		Foreign currency		Won equivalent		Foreign currency		Won equivalent		Foreign currency		Won equivalent		Won equivalent		Won equivalent
Asset:
Loans and receivables		24,062		27,420,596		147,944		1,505,401		25,851		4,337,547		1,527		1,990,673		3,742,654		38,996,871
Financial assets at FVTPL		37		42,056		39		398		—		—		44		57,341		52,223		152,018
AFS financial assets		1,374		1,566,165		—		—		—		—		—		586		243,740		1,810,491
HTM financial assets		95		108,829		—		—		—		—		—		—		64,308		173,137
Total		25,568		29,137,646		147,983		1,505,799		25,851		4,337,547		1,571		2,048,600		4,102,925		41,132,517

	June 30, 2017
	USD				JPY				CNY				EUR				Others		Total
	Foreign currency		Won equivalent		Foreign currency		Won equivalent		Foreign currency		Won equivalent		Foreign currency		Won equivalent		Won equivalent		Won equivalent
Liability:
Financial liabilities at FVTPL		54		61,677		130		1,323		—		—		104		135,955		133,954		332,909
Deposits due to customers		10,878		12,396,481		153,066		1,557,527		22,178		3,721,286		631		822,348		2,145,895		20,643,537
Borrowings		6,715		7,657,836		3,845		39,130		833		139,711		231		301,799		155,939		8,294,415
Debentures		3,292		3,751,346		—		—		700		117,453		—		—		226,770		4,095,569
Other financial liabilities		4,150		4,729,604		53,132		540,648		6,049		1,014,909		312		406,868		727,169		7,419,198
Total		25,089		28,596,944		210,173		2,138,628		29,760		4,993,359		1,278		1,666,970		3,389,727		40,785,628
Off-balance accounts		7,868		8,966,835		31,874		324,345		1,071		179,681		317		413,908		485,638		10,370,407

	December 31, 2016
	USD				JPY				CNY				EUR				Others		Total
	Foreign currency		Won equivalent		Foreign currency		Won equivalent		Foreign currency		Won equivalent		Foreign currency		Won equivalent		Won equivalent		Won equivalent
Asset:
Loans and receivables		22,868		27,635,970		108,944		1,129,539		23,194		4,018,678		1,548		1,962,856		4,382,990		39,130,033
Financial assets at FVTPL		66		79,386		57		589		—		—		30		37,562		34,124		151,661
AFS financial assets		898		1,085,108		—		—		80		13,844		—		570		144,799		1,244,321
HTM financial assets		17		20,517		—		—		—		—		—		—		143,535		164,052
Total		23,849		28,820,981		109,001		1,130,128		23,274		4,032,522		1,578		2,000,988		4,705,448		40,690,067

	December 31, 2016
	USD				JPY				CNY				EUR				Others		Total
	Foreign currency		Won equivalent		Foreign currency		Won equivalent		Foreign currency		Won equivalent		Foreign currency		Won equivalent		Won equivalent		Won equivalent
Liability:
Financial liabilities at FVTPL		75		90,908		253		2,621		—		—		88		111,098		115,980		320,607
Deposits due to customers		11,294		13,648,729		124,790		1,293,835		18,950		3,283,291		651		825,165		2,402,076		21,453,096
Borrowings		7,193		8,692,792		3,243		33,625		—		—		222		280,894		115,332		9,122,643
Debentures		2,931		3,541,769		—		—		700		121,282		—		—		228,720		3,891,771
Other financial liabilities		2,235		2,700,703		12,390		128,464		1,508		261,278		245		310,396		846,990		4,247,831
Total		23,728		28,674,901		140,676		1,458,545		21,158		3,665,851		1,206		1,527,553		3,709,098		39,035,948
Off-balance accounts		8,593		10,384,163		28,675		297,304		1,061		183,883		374		473,845		312,187		11,651,382

- 20 -

(3) Liquidity risk

Liquidity risk refers to the risk that the Group may encounter difficulties in meeting obligations from its financial liabilities.

1) Liquidity risk management

Liquidity risk management is to prevent potential cash shortages as a result of mismatching the use of funds (assets) and sources of funds (liabilities) or unexpected cash outflows. The financial liabilities that are relevant to liquidity risk are incorporated within the scope of risk management. Derivatives instruments are excluded from those financial liabilities as they reflect expected cash flows for a pre-determined period.

Assets and liabilities are grouped by account under Asset Liability Management (“ALM”) in accordance with the characteristics of the account. The Group manages liquidity risk by identifying the maturity gap and such gap ratio through various cash flows analysis (i.e. based on remaining maturity and contract period, etc.), while maintaining the gap ratio at or below the target limit.

2) Maturity analysis of non-derivative financial liabilities

a) Cash flows of principals and interests by remaining contractual maturities of non-derivative financial liabilities are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Financial liabilities at FVTPL		534,702		599		1,106		167,087		192		—		703,686
Deposits due to customers		133,623,445		32,545,247		24,614,630		28,330,544		7,775,596		2,832,997		229,722,459
Borrowings		6,297,696		2,073,546		1,690,211		1,134,740		4,335,285		428,241		15,959,719
Debentures		913,180		1,585,368		1,884,684		2,425,226		17,325,950		3,387,807		27,522,215
Other financial liabilities		16,952,774		42,187		2,309		122,603		80,066		2,282,515		19,482,454
Total		158,321,797		36,246,947		28,192,940		32,180,200		29,517,089		8,931,560		293,390,533
	December 31, 2016
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Financial liabilities at FVTPL		678,813		1,529		94		47		154,325		—		834,808
Deposits due to customers		136,835,315		28,685,473		19,254,108		30,875,962		6,284,092		2,732,019		224,666,969
Borrowings		9,146,895		2,355,336		876,836		1,486,710		4,711,273		420,720		18,997,770
Debentures		2,108,780		2,077,387		860,596		1,518,524		14,641,016		4,116,768		25,323,071
Other financial liabilities		14,813,948		27,544		5,480		1,433		84,792		2,751,825		17,685,022
Total		163,583,751		33,147,269		20,997,114		33,882,676		25,875,498		10,021,332		287,507,640

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b) Cash flows of principals and interests by expected maturities of non-derivative financial liabilities are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Financial liabilities at FVTPL		534,702		599		1,106		167,087		192		—		703,686
Deposits due to customers		146,802,385		34,136,726		20,751,089		18,521,808		6,674,918		2,421,207		229,308,133
Borrowings		6,297,696		2,073,546		1,690,211		1,134,740		4,335,285		428,241		15,959,719
Debentures		913,180		1,585,368		1,884,684		2,425,226		17,325,950		3,387,807		27,522,215
Other financial liabilities		16,952,774		42,187		2,309		122,603		80,066		2,282,515		19,482,454
Total		171,500,737		37,838,426		24,329,399		22,371,464		28,416,411		8,519,770		292,976,207
	December 31, 2016
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Financial liabilities at FVTPL		678,813		1,529		94		47		154,325		—		834,808
Deposits due to customers		148,089,355		30,163,971		17,600,803		20,947,335		5,128,387		2,331,993		224,261,844
Borrowings		9,146,901		2,355,332		876,835		1,486,710		4,711,273		420,719		18,997,770
Debentures		2,108,780		2,077,387		860,596		1,518,524		14,641,016		4,116,768		25,323,071
Other financial liabilities		14,813,948		27,544		5,480		1,433		84,792		2,751,825		17,685,022
Total		174,837,797		34,625,763		19,343,808		23,954,049		24,719,793		9,621,305		287,102,515

3) Maturity analysis of derivative financial liabilities is as follows (Unit: Korean Won in millions):

Derivatives held for trading purpose are not managed in accordance with their contractual maturity, as the Group holds such financial instruments with the purpose of disposing or redemption before their maturity. As such, those derivatives are incorporated as “within 3 months” in the table below. The cash flow from derivatives held for hedge purpose is estimated at the amount after the offset of the cash inflow and outflow.

The cash flow by the maturity of derivative financial liabilities as of June 30, 2017 and December 31, 2016 as follows:

	Remaining maturity
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
June 30, 2017		1,864,704		6,239		—		—		22,990		—		1,893,933
December 31, 2016		3,009,977		—		—		208		7,013		—		3,017,198

4) Maturity analysis of off-balance accounts

The Group provides guarantees on behalf of customers. A financial guarantee represents an irrevocable undertaking that the Group should meet a customer’s obligations to third parties if the customer fails to do so. Under a loan commitment, the Group agrees to make funds available to a customer in the future. Loan commitments that are usually for a specified term may be unconditionally cancellable or may persist, provided all conditions in the loan facility are satisfied or waived. Commitments to lend include commercial standby facilities and credit lines, liquidity facilities to commercial paper conduits and utilized overdraft facilities. The maximum limit to be paid by the Group in accordance with guarantees and loan commitment only applies to principal amounts. There are contractual maturities for financial guarantees, such as guarantees for debentures issued or loans, loan commitments, and other guarantees, however, under the terms of the guarantees and loan commitments, funds should be paid upon demand from the counterparty. Details of off-balance accounts are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Guarantees		13,160,410		14,761,784
Loan commitments		81,601,017		83,795,496

- 22 -

(4) Operational risk

The Group defines the operational risk that could cause a negative effect on capital resulting from inadequate internal process, labor work and systematic problem or external factors.

1) Operational risk management

The Group has been running the operational risk management system under Basel II. The Bank developed advanced measurement approaches to quantify required capital for operational risk. This system is used for reinforcement in foreign competitions, reducing the amount of risk capitals, managing the risk, and precaution for any unexpected occasions. This system has been tested by an independent third party, and this system approved by the Financial Supervisory Service.

2) Operational risk measurement

To quantify required capital for operational risk, the Group applies Advanced Measurement Approaches (AMA) using of internal and external loss data, business environment and internal control factors (BEICFs), and scenario analysis (SBA). For the operational risk management for its subsidiaries, the Group adopted the Basic Indicator Approach.

(5) Capital management

The Group complies with the standard of capital adequacy provided by financial regulatory authorities. The capital adequacy ratio is based on Basel III of Basel Committee on Banking Supervision and Basel III was applied from the end of December, 2013. The capital adequacy ratio is calculated by dividing own capital by asset (weighted with a risk premium – risk weighted assets) based on the consolidated financial statements of the Group.

According to the above regulations, the Group is required to meet the following new minimum requirements: 6.25% and 5.38% Common Equity Tier 1 ratio, 7.75% and 6.88% Tier 1 capital ratio, and 9.75% and 8.88% total capital ratio as of June 30, 2017 and December 31, 2016, respectively.

Provided the subsidiaries included in the scope of consolidation due to the merger with Woori Finance Holdings (i.e., Woori Card Co., Ltd., Woori Investment Bank Co., Ltd., Woori FIS Co., Ltd., Woori Private Equity Asset Management Co., Ltd., and Woori Finance Research Institute Co., Ltd.) are ruled out, Common Equity Tier 1 ratio, Tier 1 capital ratio and Total capital ratio as of June 30, 2017 are adjusted to 11.86 %, 14.12% and 16.62%, respectively.

The details are as follows (Unit: Korean won in millions):

	June 30, 2017			December 31, 2016
Tier 1 capital		16,177,612			15,714,480
Other Tier 1 capital		3,046,056			3,275,496
Tier 2 capital		3,414,839			3,910,513
Total risk-adjusted capital		22,638,507			22,900,489
Risk-weighted assets for credit risk		135,889,833			138,018,500
Risk-weighted assets for market risk		2,610,883			2,277,809
Risk-weighted assets for operational risk		9,601,831			9,431,814
Total risk-weighted assets		148,102,547			149,728,123
Common Equity Tier 1 ratio		10.92	%		10.50	%
Tier 1 capital ratio		12.98	%		12.68	%
Total capital ratio		15.29	%		15.29	%

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5. OPERATING SEGMENTS

In evaluating the results of the Group and allocating resources, the Group’s Chief Operation Decision Maker (the “CODM”) utilizes the information per type of customers. This financial information of the segments is regularly reviewed by the CODM to make decisions about resources to be allocated to each segment and evaluate its performance.

(1) Segment by type of customers

The Group’s reporting segments comprise the following customers: consumer banking, corporate banking, investment banking, capital market, credit card market and headquarters and others. The reportable segments are classified based on the target customers for whom the service is being provided.

• Consumer banking: Loans/deposits and financial services for consumer, etc.

• Corporate banking: Loans/deposits and export/import, financial services for corporations, etc.

• Investment banking: Domestic/foreign investment, structured finance, M&A, Equity & fund investment related business, venture advisory related tasks, real estate SOC development practices, etc.

• Capital market: Fund management, investment in securities and derivatives, etc.

• Credit card: Credit card, cash service and card loan, etc. ; and

• Headquarter and others: Segments that do not belong to above operating segments

1) The details of assets and liabilities by each segment are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Consumer banking		Corporate banking		Investment banking		Capital market		Credit card		Headquarters and others		Sub-total		Adjustment			Total
Assets		107,802,948		103,717,080		6,061,096		12,566,223		8,050,927		83,775,115		321,973,389		(5,908,129	)		316,065,260
Liabilities		73,415,093		154,137,327		50,269		11,520,839		6,463,953		50,046,525		295,634,006		10,786			295,644,792
	December 31, 2016
	Consumer banking		Corporate banking		Investment banking		Capital market		Credit card		Headquarters and others		Sub-total		Adjustment			Total
Assets		105,931,025		104,937,198		6,337,634		8,111,230		7,606,108		82,840,235		315,763,430		(5,080,703	)		310,682,727
Liabilities		62,294,922		162,937,921		55,785		7,287,850		6,180,893		51,137,220		289,894,591		242,183			290,136,774

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2) The details of operating income by each segment are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017
	Consumer banking			Corporate banking			Investment banking			Capital market			Credit card			Headquarters and others			Sub-total			Adjustment			Total
Net Interest income		810,799			866,805			5,413			17,262			223,048			334,651			2,257,978			292,342			2,550,320
Interest income		1,539,729			1,456,198			72,232			8,938			288,648			668,644			4,034,389			155,195			4,189,584
Interest expense		(480,814	)		(818,422	)		(126	)		—			(65,600	)		(411,449	)		(1,776,411	)		137,147			(1,639,264	)
Inter-segment		(248,116	)		229,029			(66,693	)		8,324			—			77,456			—			—			—
Net non-interest income		322,986			281,065			90,869			22,758			45,638			192,043			955,359			(367,231	)		588,128
Non-interest income		424,214			333,646			212,107			4,991,598			566,107			1,129,696			7,657,368			(126,727	)		7,530,641
Non-interest expense		(146,630	)		(82,261	)		(121,238	)		(4,968,840	)		(520,469	)		(862,571	)		(6,702,009	)		(240,504	)		(6,942,513	)
Inter-segment		45,402			29,680			—			—			—			(75,082	)		—			—			—
Other income and expense		(915,696	)		(531,346	)		25,615			14,414			(184,607	)		(145,742	)		(1,737,362	)		83,142			(1,654,220	)
Administrative expense		(869,732	)		(402,661	)		(5,696	)		(7,721	)		(77,909	)		(298,578	)		(1,662,297	)		123,870			(1,538,427	)
Reversal of allowance for credit loss and impairment losses due to credit loss		(45,964	)		(128,685	)		31,311			22,135			(106,698	)		152,836			(75,065	)		(40,728	)		(115,793	)
Operating income		218,089			616,524			121,897			54,434			84,079			380,952			1,475,975			8,253			1,484,228
Non-operating income (loss)		8,862			(3,122	)		22,581			—			(2,399	)		(26,180	)		(258	)		(54,022	)		(54,280	)
Net income before income tax expense		226,951			613,402			144,478			54,434			81,680			354,772			1,475,717			(45,769	)		1,429,948
Income tax expense		(54,923	)		(139,138	)		(34,964	)		(13,173	)		(19,816	)		(50,841	)		(312,855	)		(8,078	)		(320,933	)
Net income		172,028			474,264			109,514			41,261			61,864			303,931			1,162,862			(53,847	)		1,109,015
	For the six months ended June 30, 2016
	Consumer banking			Corporate banking			Investment banking			Capital market			Credit card			Headquarters and others			Sub-total			Inter- segment transaction			Total
Net Interest income		730,180			865,252			7,118			30,068			209,246			298,198			2,140,062			348,696			2,488,758
Interest income		1,477,402			1,547,508			79,065			9,971			272,729			671,903			4,058,578			234,984			4,293,562
Interest expense		(517,960	)		(915,304	)		(85	)		(117	)		(63,483	)		(421,567	)		(1,918,516	)		113,712			(1,804,804	)
Inter-segment		(229,262	)		233,048			(71,862	)		20,214			—			47,862			—			—			—
Net non-interest income		271,854			273,016			72,457			9,720			47,094			173,523			847,664			(474,695	)		372,969
Non-interest income		471,714			268,261			291,061			3,725,729			474,217			2,546,058			7,777,040			(91,447	)		7,685,593
Non-interest expense		(213,453	)		(16,616	)		(218,604	)		(3,716,009	)		(427,123	)		(2,337,571	)		(6,929,376	)		(383,248	)		(7,312,624	)
Inter-segment		13,593			21,371			—			—			—			(34,964	)		—			—			—
Other income and expense		(906,599	)		(703,531	)		(69,239	)		(14,592	)		(175,413	)		(136,583	)		(2,005,957	)		93,333			(1,912,624	)
Administrative expense		(876,032	)		(464,081	)		(6,329	)		(8,163	)		(68,642	)		(303,766	)		(1,727,013	)		82,461			(1,644,552	)
Reversal of allowance for credit loss and impairment losses due to credit loss		(30,567	)		(239,450	)		(62,910	)		(6,429	)		(106,771	)		167,183			(278,944	)		10,872			(268,072	)
Operating income		95,435			434,737			10,336			25,196			80,927			335,138			981,769			(32,666	)		949,103
Non-operating income(loss)		(34,886	)		(2,663	)		22,977			—			(1,778	)		29,696			13,346			(51,328	)		(37,982	)
Net income before income tax expense		60,549			432,074			33,313			25,196			79,149			364,834			995,115			(83,994	)		911,121
Income tax benefit (expense)		(14,653	)		(108,574	)		(8,062	)		(6,097	)		(18,228	)		1,219			(154,395	)		1,061			(153,334	)
Net income		45,896			323,500			25,251			19,099			60,921			366,053			840,720			(82,933	)		757,787

(2) Information on products and services

The products of the Group are classified as interest-bearing products such as loans, deposits and debt securities and non-interest bearing products such as loan commitment, credit commitment, equity securities, and credit card service. This classification of products has been reflected in the segment information presenting interest income and non-interest income.

- 25 -

(3) Information on geographical areas

Among the Group’s revenue (interest income and non-interest income) from services, revenue from the domestic customers for the six months ended June 30, 2017 and 2016 amounted to 11,185,991 million Won and 11,595,475 million Won, respectively, and revenue from the foreign customers amounted to 534,234 million Won and 383,680 million Won, respectively. Among the Group’s non-current assets (investments in joint ventures and associates, investment properties, premises and equipment and intangible assets), non-current assets attributed to domestic subsidiaries as of June 30, 2017 and December 31, 2016 are 3,449,341 million Won and 3,498,327 million Won, respectively, and foreign subsidiaries are 247,453 million Won and 240,946 million Won, respectively.

6. CASH AND CASH EQUIVALENTS

(1) Details of cash and cash equivalents are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Cash		2,198,170		2,113,739
Foreign currencies		691,181		742,340
Demand deposits		3,679,698		4,238,956
Fixed deposits		808,075		496,289
Total		7,377,124		7,591,324

(2) Significant transactions not involving cash inflows and outflows are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017			For the six months ended June 30, 2016
Changes in other comprehensive income (loss) due to valuation of AFS financial assets		(28,706	)		80,223
Changes in other comprehensive income (loss) of investment in associates		1,507			(233	)
Changes in other comprehensive loss from overseas business translation		(69,010	)		(2,649	)
Changes in other comprehensive income due to valuation of cash flow hedge		(1,526	)		10,371
Changes in other comprehensive loss due to remeasurement of the defined benefit plans		(9,677	)		(44,667	)
Changes in investments in associates due to debt-equity swap		51,405			—
Changes in investments in associates due to accounts transfer		(16,354	)		(145,748	)
Changes in unpaid dividends of hybrid equity securities		(9,804	)		(347	)

- 26 -

7. FINANCIAL ASSETS AT FVTPL

(1) Financial assets at FVTPL consist of as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Financial assets held for trading		4,535,391		5,633,724
Financial assets designated at FVTPL		18,984		17,000
Total		4,554,375		5,650,724

(2) Financial assets held for trading are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Deposits:
Deposits indexed to gold prices		31,169		26,180
Securities:
Debt securities
Korean treasury and government agencies		518,516		519,337
Financial institutions		1,714,687		1,444,459
Corporates		576,577		681,120
Equity securities		26,686		35,983
Beneficiary certificates		23,688		23,891
Securities loaned		—		4,459
Sub-total		2,860,154		2,709,249
Derivatives assets		1,644,068		2,898,295
Total		4,535,391		5,633,724

(3) Financial assets designated at FVTPL are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Debt securities		6,539		4,348
Equity securities		12,445		12,652
Total		18,984		17,000

- 27 -

8. AVAILABLE FOR SALE FINANCIAL ASSETS

Details of AFS financial assets are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Debt securities:
Korean treasury and government agencies		3,219,938		3,788,630
Financial institutions		5,674,015		6,314,198
Corporates		3,896,156		4,409,186
Asset-backed securities		313,636		249,203
Bonds in foreign currencies		1,784,189		1,211,864
Others		64,112		75,228
Sub-total		14,952,046		16,048,309
Equity securities		1,454,030		1,453,613
Beneficiary certificates		3,045,406		2,822,082
Securities loaned		171,688		493,579
Total		19,623,170		20,817,583

9. HELD TO MATURITY FINANCIAL ASSETS

Details of HTM financial assets are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Korean treasury and government agencies		3,964,762		3,754,356
Financial institutions		6,069,613		5,168,487
Corporates		4,937,254		4,823,356
Bonds in foreign currencies		173,137		164,052
Total		15,144,766		13,910,251

10. LOANS AND RECEIVABLES

(1) Details of loans and receivables are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Due from banks		11,331,473		14,815,476
Loans		239,772,555		235,400,585
Other receivables		14,044,596		8,176,572
Total		265,148,624		258,392,633

(2) Details of due from banks are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Due from banks in local currency:
Due from The Bank of Korea (“BOK”)		8,090,443			11,395,162
Due from depository banks		3			3
Due from non-depository institutions		5,284			9,811
Due from the Korea Exchange		573			1,625
Others		57,475			73,283
Allowance for credit losses		(1,987	)		(2,798	)
Sub-total		8,151,791			11,477,086
Due from banks in foreign currencies:
Due from banks on demand		856,030			877,636
Due from banks on time		1,602,383			1,684,631
Others		723,268			778,418
Allowance for credit losses		(1,999	)		(2,295	)
Sub-total		3,179,682			3,338,390
Total		11,331,473			14,815,476

- 28 -

(3) Details of restricted due from banks are as follows (Unit: Korean Won in millions):

Financial institution	Counterparty	June 30, 2017		Reason of restriction
Due from banks in local currency:
Due from The BOK	The BOK		8,090,443	Reserve deposits under The BOK Act
Others	The Korea Exchange and others		53,690	Central counter party KRW margin and others
	Sub-total		8,144,133
Due from banks in foreign currencies:
Due from banks on demand	The BOK and others		1,014,153	Reserve deposits under The BOK Act and others
Others	The People’s Bank of China and others		723,268	Reserve deposits for Capital and others
	Sub-total		1,737,421
			9,881,554

Financial institution	Counterparty	December 31, 2016		Reason of restriction
Due from banks in local currency:
Due from The BOK	The BOK		11,395,162	Reserve deposits under The BOK Act
Others	The Korea Exchange and others		70,304	Central counter party KRW margin and others
	Sub-total		11,465,466
Due from banks in foreign currencies:
Due from banks on demand	The BOK and others		854,612	Reserve deposits under The BOK Act and others
Others	The People’s Bank of China and others		778,418	Reserve deposits and others
	Sub-total		1,633,030
			13,098,496

(4) Details of loans are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Loans in local currency		194,331,428			191,309,481
Loans in foreign currencies		13,743,070			14,101,839
Domestic banker’s letter of credit		2,981,980			3,754,030
Credit card accounts		6,753,101			6,673,765
Bills bought in foreign currencies		7,597,041			7,758,575
Bills bought in local currency		234,371			414,451
Factoring receivables		45,553			96,763
Advances for customers on guarantees		25,760			25,197
Privately placed bonds		330,310			328,405
Securitized loans		289,450			252,690
Call loans		3,137,783			2,985,077
Bonds purchased under resale agreements		11,102,133			8,854,753
Loan origination costs and fees		475,942			458,639
Others		393,373			251,635
Present value discount		(12,951	)		(13,827	)
Allowance for credit losses		(1,655,789	)		(1,850,888	)
Total		239,772,555			235,400,585

- 29 -

(5) Details of other loan and receivables are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
CMA accounts		189,800			190,000
Receivables		11,567,108			5,417,676
Accrued income		966,278			1,080,489
Telex and telephone subscription rights and refundable deposits		998,251			1,019,577
Other debtors		390,556			639,945
Allowance for credit losses		(67,397	)		(171,115	)
Total		14,044,596			8,176,572

(6) Changes in allowance for credit losses on loans and receivables are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017
	Consumers			Corporates			Credit card			Others			Total
Beginning balance		(163,858	)		(1,498,842	)		(155,372	)		(209,024	)		(2,027,096	)
Net reversal of provision (net provision)		(65,582	)		(191,263	)		(91,022	)		13,891			(333,976	)
Recoveries of loans previously charged off		(21,659	)		(55,319	)		(24,808	)		(3	)		(101,789	)
Charge-offs		67,593			220,598			104,195			51,260			443,646
Sales of loans and receivables		830			58,431			—			29,264			88,525
Unwinding effect		4,620			20,047			—			—			24,667
Others(*)		416			179,068			—			(633	)		178,851
Ending balance		(177,640	)		(1,267,280	)		(167,007	)		(115,245	)		(1,727,172	)
(*)    Others are due to debt-equity swap, fluctuation of foreign currencies exchange rates, etc.
	For the six months ended June 30, 2016
	Consumers			Corporates			Credit card			Others			Total
Beginning balance		(203,433	)		(1,686,194	)		(145,810	)		(442,620	)		(2,478,057	)
Net reversal of provision (net provision)		(43,409	)		(429,470	)		(96,328	)		64,649			(504,558	)
Recoveries of loans previously charged off		(24,388	)		(130,430	)		(20,604	)		—			(175,422	)
Charge-offs		71,614			198,049			134,184			397			404,244
Sales of loans and receivables		1,640			179,513			—			648			181,801
Unwinding effect		5,294			40,036			—			—			45,330
Others(*)		(299	)		14,025			—			3,760			17,486
Ending balance		(192,981	)		(1,814,471	)		(128,558	)		(373,166	)		(2,509,176	)

(*) Others are due to debt-equity swap, fluctuation of foreign currencies exchange rates, etc.

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11. THE FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

(1) The fair value hierarchy

The fair value hierarchy is determined by the levels of judgment involved in estimating fair values of financial assets and liabilities. The specific financial instruments characteristics and market condition such as volume of transactions and transparency are reflected to the market observable inputs. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities. The Group maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value of its financial assets and financial liabilities. Fair value is measured based on the perspective of a market participant. As such, even when market assumptions are not readily available, the Group’s own assumptions reflect those that market participants would use for measuring the assets or liabilities at the measurement date.

The fair value measurement is described in the one of the following three levels used to classify fair value measurements:

• Level 1—fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. The types of financial assets or liabilities generally included in Level 1 are publicly traded equity securities, derivatives, and debt securities issued by governmental bodies.

• Level 2— fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices). The types of financial assets or liabilities generally included in Level 2 are debt securities not traded in active markets and derivatives traded in OTC but not required significant judgment.

• Level 3— fair value measurements are those derived from valuation technique that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). The types of financial assets or liabilities generally included in Level 3 are non-public securities and derivatives and debt securities of which valuation techniques require significant judgments and subjectivity.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Group’s assessment of the significance of a particular input to a fair value measurement in its entirety requires judgment and consideration of inherent factors of the asset or liability.

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(2) Fair value hierarchy of financial assets and liabilities measured at fair value are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Level 1 (*1)		Level 2 (*1)		Level 3 (*2)		Total
Financial assets:
Financial assets held for trading
Deposits		31,169		—		—		31,169
Debt securities		366,641		2,443,139		—		2,809,780
Equity securities		26,686		—		—		26,686
Beneficiary certificates		—		23,688		—		23,688
Derivative assets		1,160		1,615,486		27,422		1,644,068
Sub-total		425,656		4,082,313		27,422		4,535,391
Financial assets designed at FVTPL
Debt securities		—		—		6,539		6,539
Equity securities		—		—		12,445		12,445
Sub-total		—		—		18,984		18,984
AFS financial assets
Debt securities		2,588,702		12,363,344		—		14,952,046
Equity securities		404,082		—		1,049,948		1,454,030
Beneficiary certificates		—		2,457,094		588,312		3,045,406
Securities loaned		90,325		81,363		—		171,688
Sub-total		3,083,109		14,901,801		1,638,260		19,623,170
Derivative assets		—		140,176		—		140,176
Total		3,508,765		19,124,290		1,684,666		24,317,721
Financial liabilities:
Financial liabilities held for trading
Deposits		31,184		—		—		31,184
Derivative liabilities		1,036		1,830,516		33,152		1,864,704
Securities sold		6,832		—		—		6,832
Sub-total		39,052		1,830,516		33,152		1,902,720
Financial liabilities designated at FVTPL
Equity-linked securities		—		212		522,375		522,587
Debentures		—		93,590		—		93,590
Sub-total		—		93,802		522,375		616,177
Derivative liabilities		—		29,229		—		29,229
Total		39,052		1,953,547		555,527		2,548,126

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	December 31, 2016
	Level 1 (*1)		Level 2 (*1)		Level 3 (*2)		Total
Financial assets:
Financial assets held for trading
Deposits		26,180		—		—		26,180
Debt securities		370,636		2,274,280		—		2,644,916
Equity securities		35,983		—		—		35,983
Beneficiary certificates		—		23,891		—		23,891
Securities loaned		4,459		—		—		4,459
Derivative assets		3,233		2,871,909		23,153		2,898,295
Sub-total		440,491		5,170,080		23,153		5,633,724
Financial assets designed at FVTPL
Debt securities		—		—		4,348		4,348
Equity securities		—		—		12,652		12,652
Sub-total		—		—		17,000		17,000
AFS financial assets
Debt securities		2,288,917		13,759,392		—		16,048,309
Equity securities		428,678		—		1,024,935		1,453,613
Beneficiary certificates		—		2,291,571		530,511		2,822,082
Securities loaned		391,279		102,300		—		493,579
Sub-total		3,108,874		16,153,263		1,555,446		20,817,583
Derivative assets		—		140,478		99		140,577
Total		3,549,365		21,463,821		1,595,698		26,608,884
Financial liabilities:
Financial liabilities held for trading
Deposits		26,501		—		—		26,501
Derivative liabilities		1,750		2,974,703		33,524		3,009,977
Sub-total		28,251		2,974,703		33,524		3,036,478
Financial liabilities designated at FVTPL
Equity-linked securities		—		197		673,709		673,906
Debentures		—		92,974		—		92,974
Sub-total		—		93,171		673,709		766,880
Derivative liabilities		—		7,221		—		7,221
Total		28,251		3,075,095		707,233		3,810,579

(*1) There is no transfer between level 1 and level 2 of financial assets and liabilities measured at fair value. The Group recognizes transfers between the levels at the end of reporting period within which events or conditions change.

(*2) Certain AFS unquoted equity securities were measured at cost as of June 30, 2017 and December 31, 2016, that are amounting to 50,945 million Won and 43,202 million Won, respectively. These unquoted equity instruments mostly represent minority investments in special purposed entity vehicles such as asset securitization structures. They are measured at cost because (a) observable inputs of financial information to measure fair value was not available to obtain, or (b) there is a significant variance in likely estimated cash flows or (c) the probabilities for the various estimated cash flows could not be measured reliably. In addition, the Group has no intention to dispose these investments in the foreseeable future.

Financial assets and liabilities designated at FVTPL, held-for-trading financial assets and liabilities, AFS financial assets, and derivative assets and liabilities are recognized at fair value. Fair value is the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.

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Financial instruments are measured at fair value using a quoted market price in active markets. If there is no active market for a financial instrument, the Group determines the fair value using alternative assumptions and developing fair value measurement methods. Alternative assumptions and fair value measurement methods for each type of financial instruments are as follows:

	Fair value measurement methods	Alternative assumptions
Debt securities	The fair value is measured by discounting the projected cash flows of debt securities by applying the market discount rate that has been applied to a proxy company that has similar credit rating to the issuers of the securities.	Risk-free market rate, credit spread
Equity securities	Among DCF (Discounted Cash Flow) Model, FCFE (Free Cash Flow to Equity) Model, Comparable Company Analysis, Dividend Discount Model, Risk-adjusted Rate of Return Method, and Net Asset Value Method, more than one method is used given the characteristic of the subject of fair value measurement.	Risk-free market rate, market risk premium, Beta
Derivatives	The in-house developed model which is based on the models that are used by market participants in the valuation of general OTC derivative products, such as options, interest rate swaps, currency swap and currency forward that are based on inputs observable in the market. However, for some complicated financial instruments of which valuation should be based on some assumptions since some significant or all inputs to be used in the model are not observable in the market, the in-house derived model which is developed from the general valuation models, such as Finite Difference Method (“FDM”) or Monte Carlo Simulation.	Risk-free market rate, forward rate, volatility, foreign exchange rate, stock prices, etc.
Equity-linked securities	The fair value of security linked to stock prices or derivatives is measured by the models such as DCF model, FDM, or Monte Carlo Simulation given the natures of the securities or underlying assets.	Values of underlying assets, risk-free market rate, market rate, dividend and convenience yield, volatility, correlation coefficient, credit spread, and foreign exchange rate
Debentures	The fair value is measured by discounting the projected cash flows of a debenture by applying the market discount rate that is reflecting credit rating of the Group.	Risk-free market rate, forward rate

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Valuation methods of financial assets and liabilities measured at fair value and classified into Level 3 and significant but unobservable inputs are as follows:

	Fair value measurement technique		Input variable	Range	Impact of changes in significant unobservable inputs on fair value measurement
Derivative assets		Option valuation model and others	Correlation coefficient	0.700~0.980	Variation of fair value increases as correlation coefficient increases
			Volatility of underlying asset	17.1%~34.2%	Variation of fair value increases as volatility increases
Derivative liabilities		Option valuation model and others	Correlation coefficient	0.700~0.980	Variation of fair value increases as correlation coefficient increases
			Volatility of underlying asset	17.1%~34.2%	Variation of fair value increases as volatility increases
Equity linked securities		Monte Carlo Simulation and others	Correlation coefficient	0.047~0.706	Equity linked securities’ fair value increases if both volatility and correlation coefficient increase
			Volatility of underlying asset	10.6%~43.6%	However when correlation coefficient decreases, despite the increase in volatility, the fair value of equity linked securities may decrease
Equity securities		External appraisal value and others	Expected growth rate	0.0%~1.0%	Fair value increases as expected growth rate increases

Fair value of financial assets and liabilities classified into level 3 is measured by the Group using its own valuation techniques or using external specialists. Unobservable inputs used in the fair value measurements are produced by the internal system of the Group and the appropriateness of inputs is reviewed regularly.

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(3) Changes in financial assets and liabilities classified into level 3 are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017
	January 1, 2017		Net Income (loss) (*1)			Other comprehensive income (loss)			Purchases/ Issuances		Disposals/ Settlements			Transfer to or out of level 3 (*2)		June 30, 2017
Financial assets:
Financial assets held for trading
Derivative assets		23,153		21,217			—			472		(17,420	)		—		27,422
Financial assets designed at FVTPL
Debt securities		4,348		191			—			2,000		—			—		6,539
Equity securities		12,652		(207	)		—			—		—			—		12,445
Sub-total		17,000		(16	)		—			2,000		—			—		18,984
AFS financial assets
Equity securities (*3)		1,024,935		19,241			10,175			27,289		(31,692	)		—		1,049,948
Beneficiary certificates		530,511		3,442			(2,188	)		127,147		(70,600	)		—		588,312
Sub-total		1,555,446		22,683			7,987			154,436		(102,292	)		—		1,638,260
Derivative assets		99		185			—			—		(284	)		—		—
Total		1,595,698		44,069			7,987			156,908		(119,996	)		—		1,684,666
Financial liabilities:
Financial liabilities held for trading
Derivative liabilities		33,524		14,142			—			501		(15,015	)		—		33,152
Financial liabilities designated at FVTPL
Equity-linked securities		673,709		83,962			—			—		(235,296	)		—		522,375
Total		707,233		98,104			—			501		(250,311	)		—		555,527

(*1) The loss amounting to 61,518 million Won for the six months ended June 30, 2017, which is from financial assets and liabilities that the Group holds, has been recognized in net gain (loss) on financial instruments at FVTPL and net gain (loss) on AFS financial assets in the statement of comprehensive income.

(*2) The Group recognizes transfers between levels at the end of reporting period within which events have occurred or conditions have changed.

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	For the six months ended June 30, 2016
	January 1, 2016		Net Income (loss) (*1)			Other comprehensive income (loss)			Purchases/ Issuances			Disposals/ Settlements			Transfer to or out of level 3 (*2)			June 30, 2016
Financial assets:
Financial assets held for trading		78,676		33,250			—			(1,075	)		(22,827	)		—			88,024
Derivative assets		78,676		33,250			—			(1,075	)		(22,827	)		—			88,024
Financial assets designed at FVTPL
Debt securities		986		(18	)		—			—			—			—			968
Equity securities		11,609		408			—			—			—			—			12,017
Sub-total		12,595		390			—			—			—			—			12,985
AFS financial assets
Equity securities (*3)		993,368		(2,613	)		51,058			188,676			(103,944	)		(17,455	)		1,109,090
Beneficiary certificates		377,070		1,733			(2,414	)		90,939			(11,920	)		—			455,408
Others		5,308		594			(642	)		—			(5,260	)		—			—
Sub-total		1,375,746		(286	)		48,002			279,615			(121,124	)		(17,455	)		1,564,498
Derivative assets		5,973		3,619			—			—			(9,490	)		—			102
Total		1,472,990		36,973			48,002			278,540			(153,441	)		(17,455	)		1,665,609
Financial liabilities:
Financial liabilities held for trading
Derivative liabilities		78,607		32,323			—			—			(22,336	)		—			88,594
Financial liabilities designated at FVTPL
Equity-linked securities		747,351		(47,721	)		—			983			(23,075	)		—			677,538
Total		825,958		(15,398	)		—			983			(45,411	)		—			766,132

(*1) The gain amounting to 47,643 million Won for the six months ended June 30, 2016, which is from financial assets and liabilities that the Group holds, has been recognized in net gain (loss) on financial instruments at FVTPL and net gain (loss) on AFS financial assets in the consolidated statement of comprehensive income.

(*2) The Group recognizes transfers between levels at the end of reporting period within which events have occurred or conditions have changed.

(*3) AFS financial assets were transferred out of level 1 to level 3 upon the change of the fair value measurement method of the assets by using quoted prices in the active market from previously using the external valuation specialists.

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(4) Sensitivity analysis on the unobservable inputs used for measuring level 3 financial instruments

The sensitivity analysis of the financial instruments has been performed by classifying with favorable and unfavorable changes based on how changes in unobservable assumptions would have effects on the fluctuations of financial instruments’ value. When the fair value of a financial instrument is affected by more than one unobservable assumption, the below table reflects the most favorable or the most unfavorable changes which resulted from varying the assumptions individually. The sensitivity analysis was performed for two types of level 3 financial instruments: (1) interest rate related derivatives, currency related derivatives, equity related derivatives, and equity-linked securities of which fair value changes are recognized as net income; (2) equity securities and beneficiary certificates of which fair value changes are recognized as other comprehensive income. Equity securities classified as level 3 but measured at costs are excluded from sensitivity analysis.

The following table presents the sensitivity analysis to disclose the effect of reasonably possible volatility on the fair value of a level 3 financial instruments as of June 30, 2017 and December 31, 2016. (Unit: Korean Won in millions):

	As of June 30, 2017										As of December 31, 2016
	Net income (loss)					Other comprehensive income (loss)					Net income (loss)					Other comprehensive income (loss)
	Favorable		Unfavorable			Favorable		Unfavorable			Favorable		Unfavorable			Favorable		Unfavorable
Financial assets:
Financial assets held for trading
Derivatives instruments assets (*1)(*2)		5,212		(6,345	)		—		—			861		(2,248	)		—		—
Financial assets designed at FVTPL
Equity securities (*5)		730		(681	)		—		—			707		(657	)		—		—
AFS Financial assets
Equity securities (*3)(*4)		—		—			33,536		(17,249	)		—		—			31,412		(18,551	)
Beneficiary certificates (*4)		—		—			2,428		(2,087	)		—		—			2,903		(2,571	)
Total		5,942		(7,026	)		35,964		(19,336	)		1,568		(2,905	)		34,315		(21,122	)
Financial liabilities:
Financial liabilities held for trading
Derivative liabilities (*1)(*2)		7,677		(6,538	)		—		—			4,892		(3,568	)		—		—
Financial liabilities designated at FVTPL
Equity-linked securities (*1)		144		(125	)		—		—			905		(857	)		—		—
Total		7,821		(6,663	)		—		—			5,797		(4,425	)		—		—

(*1) Fair value changes of equity related derivatives assets and liabilities and equity-linked securities are calculated by increasing or decreasing historical volatility of the stock price and correlation, which are major unobservable variables, by 10%, respectively. In the case of interest rate related derivative assets and liabilities, fair value changes are calculated by increasing or decreasing the volatility of interest rate, which are major unobservable variables, by 10%, respectively.

(*2) Both derivative assets and liabilities for held for trading and hedging are included.

(*3) Fair value changes of equity securities are calculated by increasing or decreasing growth rate (0~1%) and discount rate or liquidation value (-1~1%) and discount rate. The growth rate, discount rate, and liquidation value are major unobservable variables.

(*4) Among the equity securities, even if the sensitivity analysis of the capital contributions and beneficiary certificates is not possible in practice, fair value changes of beneficiary certificates and other securities whose major unobservable variables are composed of the real estate are calculated by increasing or decreasing price fluctuation of real estate which is underlying assets and discount rate by 1%.

(*5) Changes of fair value are measured by increasing or decreasing the discount rate by 10%, which is major unobservable variable, respectively.

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(5) Fair value and carrying amount of financial assets and liabilities that are recorded at amortized cost are as follows (Unit: Korean Won in millions):

	As of June 30, 2017
	Fair value								Book value
	Level 1		Level 2		Level 3		Total
Financial assets:
HTM financial assets		1,478,690		13,725,181		—		15,203,871		15,144,766
Loans and receivables		—		—		265,724,502		265,724,502		265,148,624
Financial liabilities:
Deposits due to customers		—		226,268,221		—		226,268,221		226,200,577
Borrowings		—		15,686,207		—		15,686,207		15,679,945
Debentures		—		25,874,673		—		25,874,673		25,649,132
Other financial liabilities		—		24,649,686		—		24,649,686		24,650,846

	As of December 31, 2016
	Fair value								Book value
	Level 1		Level 2		Level 3		Total
Financial assets:
HTM financial assets		741,880		13,243,297		—		13,985,177		13,910,251
Loans and receivables		—		—		259,565,952		259,565,952		258,392,633
Financial liabilities:
Deposits due to customers		—		221,001,466		—		221,001,466		221,020,411
Borrowings		—		18,785,325		—		18,785,325		18,769,515
Debentures		—		24,004,668		—		24,004,668		23,565,449
Other financial liabilities		—		21,984,171		—		21,984,171		21,985,086

The fair values of financial instruments are measured using quoted market price in active markets. In case there is no active market for financial instruments, the Group determines the fair value using alternative assumptions through developing fair value measurement methods. Alternative assumptions and fair value measurement methods for financial assets and liabilities that are measured at amortized costs are given as follows:

	Fair value measurement technique	Input variables
Debt securities	The fair value is measured by discounting the projected cash flows of debt securities by applying the market discount rate that has been applied to a proxy company that has similar credit rating to the issuers of the securities.	Risk-free market rate and credit spread
Loans and receivables	The fair value is measured by discounting the projected cash flows of loan products by applying the market discount rate that has been applied to a proxy company that has similar credit rating to the debtor.	Risk-free market rate, credit spread and prepayment-rate
Deposit due to customers, borrowings, debentures, and other financial liabilities	The fair value is measured by discounting the projected cash flows of debt products by applying the market discount rate that is reflecting credit rating of the Group.	Risk-free market rate and forward rate

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12. DERECOGNITION AND OFFSET OF FINANCIAL INSTRUMENTS

(1) Derecognition of financial assets

1) Transferred financial assets that meet condition of derecognition

The book value, fair value of, and maximum exposure to loss from the financial assets that were derecognized from the consolidated financial statements of the Group through disposals, but the Group still have continuous involvements are given as follows (Unit: Korean Won in millions):

	June 30, 2017
	Type of continuous involvement	Book value of continuous participation		Fair value of continuous participation		Maximum exposure to loss
Conditional disposal of loans to KAMCO (*)	Post settlement		—		—		701

	December 31, 2016
	Type of continuous involvement	Book value of continuous participation		Fair value of continuous participation		Maximum exposure to loss
Conditional disposal of loans to KAMCO (*)	Post settlement		—		—		701

(*) For ex-post settling up amount of the collateral is not fixed yet, expected cash flow cannot be reliably measured as of June 30, 2017 and December 31, 2016, and the maximum exposure to loss is disclosed at the transfer price. Though the transfer does not qualify for derecognition in accordance with K-IFRS 1039 – Financial Instrument: Recognition and Measurement, the Group derecognized the financial asset from the consolidated financial statements applying exception for retrospective application of transactions before the date of transition to IFRSs in K-IFRS 1101 – First-time Adoption of K-IFRS.

2) Transferred financial assets that do not meet condition of derecognition

a) Disposal of securities under repurchase agreements

The financial instruments that were disposed but the Group agreed to repurchase at the fixed amounts at the same time, so that they did not meet the conditions of derecognition, are as follows (Unit: Korean Won in millions):

		June 30, 2017		December 31, 2016
Assets transferred	Due from banks		49,864		—
	AFS financial assets		517,751		2,546,683
	HTM financial assets		7,139		7,133
	Total		574,754		2,553,816
Related liabilities	Bonds sold under repurchase agreements		559,951		2,004,905

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b) Securities loaned

When the Group loans its securities to outside parties, the legal ownerships of the securities are transferred, however, they should be returned at the end of lending period therefore the Group does not derecognize them from the consolidated financial statements as it owns majority of risks and benefits from the securities continuously regardless of the transfer of legal ownership. The carrying amounts of securities loaned are as follows (Unit: Korean Won in millions):

		June 30, 2017		December 31, 2016		Loaned to
Financial assets at FVTPL	Equity securities- listed stock		—		4,459	Samsung Securities Co., Ltd. and others
AFS financial assets	Debt securities- Korean treasury and government agencies and others		171,688		493,579	Korea Securities Finance Corporation and others
	Total		171,688		498,038

The details of the transferred financial assets that are not derecognized in their entirety, such as disposal of securities under repurchase agreement or securities loaned, are explained in Note 18.

(2) The offset of financial assets and liabilities

The Group possesses both the uncollected domestic exchange receivables and unpaid domestic exchange payable, which satisfy offsetting criteria of K-IFRS 1032. Therefore, the total number of uncollected domestic exchange receivables or unpaid domestic exchange payable has been countervailed with part of unpaid domestic exchange payable or uncollected domestic exchange receivables, respectively, and has been disclosed in loans and receivables or other financial liabilities of the Group’s statements of financial position and loans and receivables, respectively.

The Group possesses the derivative assets, derivative liabilities, receivable spot exchange, and payable spot exchange which do not satisfy the offsetting criteria of K-IFRS 1032, but provide the Group the right of, under the circumstances of the trading party’s defaults, insolvency, or bankruptcy, the offsetting. Item such as cash collateral cannot satisfy the offsetting criteria of K-IFRS 1032, but in accordance with the collateral arrangements and under the circumstances of the trading party’s default, insolvency, or bankruptcy, the derivative assets, derivative liabilities, receivable spot exchange, and the net amount of payable spot exchange can be offset.

The Group has entered into a sale and repurchase agreements and accounted it as collateralized borrowing. Also, the Group has entered into a purchase and resale agreement and accounted it as secured loans. The repurchase and resale agreement can have the offsetting right only under the trading party’s default, insolvency, or bankruptcy which do not satisfy the offsetting criteria of K-IFRS 1032, the Group recorded the collateralized borrowings in borrowings and the secured loans in loans and receivables. The Group under the repurchase agreements has offsetting right only upon the counter-party’s default, insolvency or bankruptcy, thus the repurchase agreements are applied by the TBMA/ISMA Global Master Repurchase Agreement of which do not satisfy the offsetting criteria of K-IFRS 1032. The Group disclosed bonds sold (purchased) under repurchase agreements as borrowings (loans and receivables).

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As of June 30, 2017 and December 31, 2016, the financial instruments to be set off and may be covered by master netting agreements and similar agreements are given as below (Unit: Korean Won in millions):

	June 30, 2017
	Gross amounts of recognized financial assets		Gross amounts of recognized financial assets set off		Net amounts of financial assets presented		Related amounts not set off in the statement of financial position				Net amounts
							Financial instruments		Cash collateral received
Financial assets:
Derivative assets and others (*1)		1,667,312		3,449		1,663,863		11,565,607		16,246		559,109
Receivable spot exchange (*2)		10,477,099		—		10,477,099
Bonds purchased under resale agreements (*2)		11,102,133		—		11,102,133		11,102,133		—		—
Domestic exchanges receivable (*2)(*5)		26,873,204		26,584,300		288,904		—		—		288,904
Total		50,119,748		26,587,749		23,531,999		22,667,740		16,246		848,013
	June 30, 2017
	Gross amounts of recognized financial liabilities		Gross amounts of recognized financial liabilities set off		Net amounts of financial liabilities presented		Related amounts not set off in the statement of financial position				Net amounts
							Financial instruments		Cash collateral pledged
Financial liabilities:
Derivative liabilities and others (*1)		2,117,422		3,449		2,113,973		11,855,701		88,224		647,789
Payable spot exchange (*3)		10,477,741		—		10,477,741
Bonds sold under repurchase agreements (*4)		559,952		—		559,952		559,952		—		—
Domestic exchanges payable (*3)(*5)		30,934,394		26,584,300		4,350,094		4,345,347		—		4,747
Total		44,089,509		26,587,749		17,501,760		16,761,000		88,224		652,536
	December 31, 2016
	Gross amounts of recognized financial assets		Gross amounts of recognized financial assets set off		Net amounts of financial assets presented		Related amounts not set off in the statement of financial position				Net amounts
							Financial instruments		Cash collateral received
Financial assets:
Derivative assets and others (*1)		2,962,969		8,442		2,954,527		6,546,232		69,834		1,016,550
Receivable spot exchange (*2)		4,678,089		—		4,678,089
Bonds purchased under resale agreements (*2)		8,854,753		—		8,854,753		8,854,753		—		—
Domestic exchanges receivable (*2)(*5)		31,456,123		30,883,281		572,842		—		—		572,842
Total		47,951,934		30,891,723		17,060,211		15,400,985		69,834		1,589,392
	December 31, 2016
	Gross amounts of recognized financial liabilities		Gross amounts of recognized financial liabilities set off		Net amounts of financial liabilities presented		Related amounts not set off in the statement of financial position				Net amounts
							Financial instruments		Cash collateral pledged
Financial liabilities:
Derivative liabilities and others (*1)		3,467,374		8,442		3,458,932		6,695,062		105,270		1,341,375
Payable spot exchange (*3)		4,682,775		—		4,682,775
Bonds sold under repurchase agreements (*4)		2,004,905		—		2,004,905		2,004,905		—		—
Domestic exchanges payable (*3)(*5)		39,345,524		30,883,281		8,462,243		6,161,151		—		2,301,092
Total		49,500,578		30,891,723		18,608,855		14,861,118		105,270		3,642,467

(*1) The items include derivatives held for trading, derivatives for hedging and equity linked securities.

(*2) The items are included in loans and receivables.

(*3) The items are included in other financial liabilities.

(*4) The items are included in borrowings.

(*5) Certain financial assets and liabilities are presented at as net amounts.

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13. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES

(1) Investments in joint ventures and associates accounted for using the equity method of accounting are as follows (Unit: Korean Won in millions):

		Percentage of ownership (%)
Subsidiaries	Main business	June 30, 2017		December 31, 2016		Financial statements as of
Woori Bank and Woori Private Equity Asset Management Co., Ltd.,:
Woori Blackstone Korea     Opportunity No.1 Private Equity Fund	Finance		26.4		26.4		June 30
Woori Bank:
Kumho Tire Co., Inc. (*1)(*2)	Manufacturing		14.2		14.2		March 31 (*3)
Woori Service Networks Co., Ltd. (*4)	Freight & staffing services		4.9		4.9		May 31 (*3)
Korea Credit Bureau Co., Ltd. (*5)	Credit information		9.9		9.9		June 30
Korea Finance Security Co., Ltd. (*4)	Security service		15.0		15.0		May 31 (*3)
Chin Hung International Inc. (*2)(*9)	Construction		25.3		28.4		May 31 (*3)
Poonglim Industrial Co., Ltd. (*6)(*12)(*14)	Construction		30.2		31.0		March 31 (*3)
STX Engine Co., Ltd. (*1)(*2)	Manufacturing		29.2		29.2		March 31 (*3)
Samho International Co., Ltd. (*1)(*2)(*16)	Construction		7.8		7.8		—
Force TEC Co., Ltd. (*6)(*15)	Freight & staffing services		—		34.4		—
STX Corporation (*1)(*2)(*6)(*13)	Wholesale of non-specialized goods		19.7		9.5		March 31 (*3)
Saman Corporation (*5)	General construction Technology service		9.2		9.2		March 31 (*3)
Dongwoo C & C Co., Ltd. (*6)	Construction		23.2		23.2		—
SJCO Co., Ltd. (*6)	Aggregate transportation and wholesale		26.5		26.5		—
G2 Collection Co., Ltd. (*6)	Wholesale and retail sales		28.9		28.9		—
The Base Enterprise Co., Ltd. (*6)	Manufacturing		48.4		48.4		—
Heungjiwon Co., Ltd. (*6)	Other printing		27.8		27.8		—
Kyesan Engineering Co., Ltd. (*6)	Construction		23.2		23.2		—
Good Software Lap Co., Ltd. (*6)	Service		28.9		28.9		—
Wongwang Co., Ltd. (*6)	Wholesale and real estate		29.0		29.0		—
Sejin Construction Co., Ltd. (*6)	Construction		29.6		29.6		—
Deokwon Food Co., Ltd. (*6)(*17)	Poultry processing and storage		—		27.3		—
QTS Shipping Co., Ltd. (*6)	Complex transportation brokerage		49.4		49.4		—
DAEA SNC Co. Ltd. (*6)	Wholesale and retail sales		24.0		24.0		—
ARES-TECH Co.,Ltd. (*6)	Electronic component manufacturing		23.4		23.4		—
Reading Doctors Co., Ltd. (*6)(*10)	Other service business		35.4		—		—
PREXCO Co., Ltd. (*6)(*10)	Manufacturing		28.1		—		—
Hyunwoo International Co., Ltd. (*6)(*10)	Manufacturing		25.9		—		—
Woori Growth Partnerships New Technology Private Equity Fund	Other financial business		23.1		23.1		June 30
2016KIF-IMM Woori Bank Technology Venture Fund	Other financial business		20.0		20.0		June 30
K BANK Co.,Ltd. (*5)	Finance		13.0		13.0		May 31 (*3)
Smart Private Equity Fund No.2 (*11)	Other financial business		20.0		—		June 30
Woori Bank-Company K Korea Movie Asset Fund (*11)	Other financial business		25.0		—		June 30
Woori Private Equity Fund:
Woori Renaissance Holdings (*7)	Other financial business		—		51.6		—
Woori Private Equity Asset Management Co., Ltd.,:
Woori Columbus 1st Private Equity Fund (*8)	Other financial business		2.0		2.0		June 30

- 43 -

(*1) The Group has significant influence on these entities through its position in the creditors’ council which is the decision making body regarding to financial and operational policies of associates.

(*2) The investments in associates that have quoted market prices are Kumho Tire Co., Ltd. (current period: KRW 7,150, previous year: KRW 8,480), Chin Hung International Inc. (current period: KRW 2,250, previous year: KRW 2,090), STX Engine Co., Ltd. (current period: KRW 19,000, previous year: KRW 6,630), Samho International Co., Ltd. (current period: KRW 20,500, previous year: KRW 16,900), STX Corporation. (previous year: KRW 1,660).

(*3) The significant transactions and events between the end of reporting period of the associates and the Group have been properly incorporated.

(*4) Most of the significant business transactions of associates are with the Group.

(*5) The Group can participate in decision-making body and exercise significant influence over associates through business partnerships.

(*6) The carrying values of investments in Reading Doctors Co., Ltd, PREXCO Co., Ltd and Hyunwoo International Co., Ltd are nill as of June 30, 2017 and those of investments in Force TEC Co., Ltd, STX Corporation and Deokwon Food Co., Ltd are nil as of December 31, 2016. Furthermore, those of investments in Poonglim Industrial Co., Ltd, Dongwoo C&C Co., Ltd, SJCO Co., Ltd, G2 collection Co., Ltd, The Base Enterprise Co., Ltd, Heungjiwon Co., Ltd, Kyesan Engineering Co., Ltd, Good Software Lab Co., Ltd, Wongwang Co., Ltd, Sejin Construction Co., Ltd, QTS Shipping Co., Ltd, DAEA SNC Co., Ltd and ARES-TECH Co., Ltd are nill as of both December 31, 2016 and June 30, 2017.

(*7) The Group owns over 50% ownership. However, the investment in this entity was accounted for using equity method as the ownership and related contracts meet the definition of joint arrangement under K-IFRS 1111 Joint Arrangements. As of June 30, 2017 the entity has been excluded from the range of associates as liquidated.

(*8) As a general partner of Woori Columbus 1st Private Equity Fund, the Group has significant influence over the entity’s operational and financial policy making process, including participating in making decision of dividend or other distribution. As such, the investment in this entity was accounted for using equity method as of June 30, 2017 and December 31, 2016. Meanwhile, as of June 30, 2017, the principal investments in the associates were returned, and is to maintain a 2.0% stake until its liquidation based on the resolution of special meeting of investors.

(*9) Due to consolidation of stocks and debt-equity swap, the Group’s number of holding shares and ownership ratio have decreased.

(*10) Even though the Group’s ownership ratio of the entity was more than 20%, the Group did not have significant influence over the entity due to the fact that the entity was going through workout process under receivership, and thus the entity was excluded from the investment in associates. However, as the workout process was completed during the six months ended June 30, 2017, it has been included in the investment in associates.

(*11) Due to capital contribution by the Group during the six months ended June 30, 2017, the entities were included in the investment in associates

(*12) The Group has sold a part of shares of the associates so the number of shares holding has decreased.

(*13) Due to debt-equity swap capital stock, the Group ownership ratio have increased.

(*14) As the carrying amounts of certain investments in associates had been reduced to zero, the Group discontinued the use of the equity method in accounting for those investments, and unrecognized losses due to the restricted application of equity method amount to 15,779 million Won and 612 million Won as of June 30, 2017 and December 31, 2016, respectively.

(*15) Not in scope for the associates, because the Group does not have significant influence over the entity due to the fact that it is going through workout process under receivership as of June 30, 2017.

(*16) Transfers to assets held for sale during the six months ended June 30, 2017.

(*17) As the Group sold its entire ownership interest of the entities, they were exclude from the investment in associates.

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(2) Changes in the carrying value of investments in joint ventures and associates accounted for using the equity method of accounting are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017
	Acquisition cost		January 1, 2017		Share of profits (losses)			Acquisition (*1)		Disposal and others (*2)			Dividends			Change in Capital			Others (*1)			June 30, 2017
Woori Blackstone Korea Opportunity No.1 Private Equity Fund		6,881		15,289		(1,460	)		—		—			—			—			—			13,829
Kumho Tire Co., Inc.		175,652		200,332		2			—		—			—			(1,623	)		—			198,711
Woori Service Networks Co., Ltd.		108		145		(10	)		—		—			(8	)		—			—			127
Korea Credit Bureau Co., Ltd.		3,313		5,592		508			—		—			(149	)		—			—			5,951
Korea Finance Security Co., Ltd.		3,266		3,376		63			—		—			(54	)		—			—			3,385
Chin Hung International Inc.		89,725		43,032		(20,050	)		41,053		—			—			171			(25,966	)		38,240
Poonglim Industrial Co., Ltd.		13,916		—		—			—		—			—			—			—			—
STX Engine Co., Ltd.		92,038		43,036		722			—		—			—			4,047			—			47,805
SamHo Co., Ltd.		7,492		19,729		2,021			—		(16,354	)		—			(73	)		(5,323	)		—
STX Corporation		42,215		—		(33,739	)		8,546		—			—			(215	)		27,772			2,364
Saman Corporation		8,521		8,699		(96	)		—		—						26			—			8,629
Woori Growth Partnerships New Technology Private Equity Fund		13,602		13,118		(371	)		5,745		(498	)		—			(156	)		—			17,838
2016KIF-IMM Woori Bank Technology Venture Fund		1,800		1,800		—			3,240		—			—			—			—			5,040
K BANK Co., Ltd.		32,500		30,442		(5,861	)		—		—			—			(139	)		—			24,442
Smart Private Equity Fund No.2		3,000		—		(47	)		3,000		—			—			—			—			2,953
Woori Bank-Company K Korea Movie Asset Fund		1,500		—		(15	)		1,500		—			—			—			—			1,485
Woori Renaissance Holdings		63,000		54,422		(622	)		—		—			(57,109	)		—			3,309			—
		558,529		439,012		(58,955	)		63,084		(16,852	)		(57,320	)		2,038			(208	)		370,799

(*1) Changes in investments in joint ventures and associates due to debt-equity swap is 51,405 million Won.

(*2) Investments in joint ventures and associates decreased by 16,354 million Won through transfers to assets held for sale occurred during the six months ended June 30, 2017.

	For the six months ended June 30, 2016
	Acquisition cost		January 1, 2016		Share of profits (losses)			Acquisition (*1)		Disposal and others (*2)			Dividends			Change in Capital			Impairment			June 30, 2016
Woori Blackstone Korea Opportunity No.1 Private Equity Fund		43,917		56,044		182			—		(10,561	)		(2,971	)		—			—			42,694
Kumho Tire Co., Inc.		175,652		214,050		(6,222	)		—		—			—			4,095			—			211,923
Woori Service Networks Co., Ltd.		108		139		(9	)		—		—			(12	)		—			—			118
Korea Credit Bureau Co., Ltd.		3,313		5,291		54			—		—			(135	)		—			—			5,210
Korea Finance Security Co., Ltd.		3,266		3,711		(364	)		—		—			(54	)		—			—			3,293
United PF 1st Corporate financial stability		172,441		187,592		3,266			—		(190,858	)		—			—			—			—
Chin Hung International Inc.		89,725		43,936		156			—		—			—			81			—			44,173
Poonglim Industrial Co., Ltd.		13,916		5,313		863			—		—			—			(2,928	)		—			3,248
STX Engine Co., Ltd.		92,038		51,276		(1,564	)		—		—			—			(451	)		(4,645	)		44,616
SamHo Co., Ltd.		7,492		14,325		1,744			—		—			—			1			—			16,070
STX Corporation		42,215		4,251		(3,824	)		—		—			—			4,029			—			4,456
Osung LST Co., Ltd.		15,405		10,985		(2,903	)		—		—			—			19			—			8,101
Saman Corporation		8,521		8,521		219			—		—			—			—			—			8,740
K-Growth crowd 2step Fund		800		—		(13	)		800		—			—			—			—			787
Woori Growth Partnerships New Technology Private Equity Fund		5,421		—		(373	)		5,421		—			—			—			—			5,048
Woori Renaissance Holdings		63,000		37,121		1,723			—		—			—			—			—			38,844
Woori Columbus First PEF		1,200		1,306		66			—		—			—			—			—			1,372
		738,430		643,861		(6,999	)		6,221		(201,419	)		(3,172	)		4,846			(4,645	)		438,693

(*1) Changes in investments in joint ventures and associates due to debt-equity swap is 5,421 million Won.

(*2) Investments in joint ventures and associates decreased by 190,858 million Won through transfers to AFS financial assets occurred during the six months ended June 30, 2016.

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(3) Summary financial information relating to investments in joint ventures and associates accounted for using the equity method of accounting is as follows (Unit: Korean Won in millions):

	June 30, 2017
	Assets		Liabilities		Operating revenue		Net income (loss)
Woori Blackstone Korea Opportunity No.1 Private Equity Fund		51,420		56		1,442		(2,716	)
Kumho Tire Co., Inc.		4,978,733		3,827,086		669,303		(61,018	)
Woori Service Networks Co., Ltd.		4,324		1,751		6,866		374
Korea Credit Bureau Co., Ltd.		71,842		14,297		31,726		4,944
Korea Finance Security Co., Ltd.		31,229		8,671		25,206		176
Chin Hung International Inc.		319,651		273,600		207,440		6,248
Poonglim Industrial Co., Ltd.		238,034		302,458		30,868		(4,889	)
STX Engine Co., Ltd.		795,581		683,485		90,787		6,345
STX Corporation		581,304		552,655		446,050		322,863
Saman Corporation		94,619		59,182		27,112		835
Woori Growth Partnerships New Technology Private Equity Fund		77,793		493		274		(2,283	)
2016KIF-IMM Woori Bank Technology Venture Fund		24,751		—		4		(759	)
K BANK Co., Ltd.		650,031		462,009		2,655		(31,852	)
Smart Private Equity Fund No.2		14,814		51		1		(237	)
Woori Bank-Company K Korea Movie Asset Fund		5,940		—		6		(60	)
Woori Columbus 1st Private Equity Fund		293		4		—		(16	)
	December 31, 2016
	Assets		Liabilities		Operating revenue		Net income (loss)
Woori Blackstone Korea Opportunity Private Equity Fund No.1		57,971		427		75,084		38,226
Kumho Tire Co., Inc.		5,079,740		3,914,306		2,156,667		(53,328	)
Woori Service Networks Co., Ltd.		4,722		1,782		14,875		801
Korea Credit Bureau Co., Ltd.		71,245		17,322		59,868		3,517
Korea Finance Security Co., Ltd.		32,262		9,759		52,657		700
Chin Hung International Inc.		421,710		354,995		578,640		794
Poonglim Industrial Co., Ltd.		304,718		323,765		156,770		(15,135	)
STX Engine Co., Ltd.		865,265		769,481		372,295		(22,978	)
Samho Co., Ltd.		740,786		489,130		909,927		68,077
STX Corporation		781,622		1,087,469		1,252,968		(378,782	)
Saman Corporation		83,380		47,175		72,850		2,746
Woori Growth Partnerships New Technology Private Equity Fund		57,339		493		37		(2,177	)
2016KIF-IMM Woori Bank Technology Venture Fund		9,005		254		5		(250	)
K BANK Co., Ltd.		239,806		5,633		2,927		(12,222	)
Woori Renaissance Holdings Inc.		127,411		26,703		37,206		33,508
Woori Columbus 1st Private Equity Fund		811		506		3,764		(450	)

- 46 -

(4) The entities that the Group has not applied equity method of accounting although the Group’s ownership interest is more than 20% as of June 30, 2017 and December 31, 2016, are as follows:

	As of June 30, 2017
	Number of shares owned		Ownership (%)
Orient Shipyard Co., Ltd. (*)		465,050 shares		23.0
Saenuel Co., Ltd. (*)		3,531 shares		37.4
E Mirae Tech Co., Ltd. (*)		7,696 shares		41.0
Jehin Trading Co., Ltd. (*)		81,610 shares		27.3
NK Eng Co., Ltd. (*)		697,033 shares		23.1
The season Co., Ltd. (*)		18,187 shares		30.1
Yuil PESC Co., Ltd. (*)		8,642 shares		24.0
Youngdong Sea Food Co., Ltd. (*)		12,106 shares		24.0
Sinseong Trading Co., Ltd. (*)		2,584 shares		27.2
CL Tech Co., Ltd. (*)		13,759 shares		38.6
Force TEC Co., Ltd. (*)		4,780,907 shares		25.8
Cultizm Korea LTD Co., Ltd. (*)		858 shares		31.3
Protronics Co., Ltd. (*)		95,921 shares		48.1

(*) Even though the Group’s ownership interest of the entity is more than 20%, the Group does not have significant influence over the entity since it is going through work-out process under receivership, thus it is excluded from the investment in associates.

	As of December 31, 2016
	Number of shares owned		Ownership (%)
Orient Shipyard Co., Ltd. (*)		465,050 shares		23.0
Saenuel Co., Ltd. (*)		3,531 shares		37.4
E Mirae Tech Co., Ltd. (*)		7,696 shares		41.0
Jehin Trading Co., Ltd. (*)		81,610 shares		27.3
NK Eng Co., Ltd. (*)		697,033 shares		23.1
The season Co., Ltd. (*)		18,187 shares		30.1
Yuil PESC Co., Ltd. (*)		8,642 shares		24.0
Reading Doctors Co., Ltd. (*)		7,398 shares		35.4
Youngdong Sea Food Co., Ltd. (*)		12,106 shares		24.0
Sinseong Trading Co., Ltd. (*)		2,584 shares		27.2
PREXCO Co., Ltd. (*)		919,972 shares		28.1
Hyunwoo International Co., Ltd. (*)		59,873 shares		25.9

(*) Even though the Group’s ownership interest of the entity is more than 20%, the Group does not have significant influence over the entity since it is going through work-out process under receivership, thus it is excluded from the investment in associates.

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(5) As of June 30, 2017 and December 31, 2016, the reconciliations from the net assets of associates based on the ownership ratio of the Group to its corresponding book value of investment in joint ventures and associates are as follows (Unit: Korean Won in millions except for ownership):

	As of June 30, 2017
	Total net asset			Ownership (%)		Net assets of associates (or joint ventures)			cost-book value differential and others		Impairment			Intercompany transaction and others			Book value
Woori Blackstone Korea Opportunity Private Equity Fund No.1		51,364			26.4		13,559			—		—			270			13,829
Kumho Tire Co., Inc. (*)		1,043,772			14.2		147,704			48,459		—			2,548			198,711
Woori Service Networks Co., Ltd.		2,573			4.9		127			—		—			—			127
Korea Credit Bureau		57,545			9.9		5,703			248		—			—			5,951
Korea Finance Security Co., Ltd.		22,558			15.0		3,385			—		—			—			3,385
Chin Hung International Inc. (*)		54,579			25.3		13,812			24,566		—			(138	)		38,240
Poonglim Industrial Co., Ltd. (*)		(161,836	)		30.2		(48,879	)		54,542		(20,504	)		14,841			—
STX Engine Co., Ltd.		112,096			29.2		32,770			14,954		—			81			47,805
STX Corporation		28,649			19.7		5,649			24,614		(27,904	)		5			2,364
Saman Corporation		35,437			9.2		3,255			5,374		—			—			8,629
Woori Growth Partnerships New Technology Private Equity Fund		77,300			23.1		17,838			—		—			—			17,838
2016KIF-IMM Woori Bank Technology Venture Fund		24,751			20.0		4,950			—		—			90			5,040
K BANK Co.,Ltd.		188,022			13.0		24,442			—		—			—			24,442
Smart Private Equity Fund No.2		14,763			20.0		2,953			—		—			—			2,953
Woori Bank-Company K Korea Movie Asset Fund		5,940			25.0		1,485			—		—			—			1,485
Woori Columbus First PEF		289			2.0		6			—		—			(6	)		—

(*) The net asset amount is after reflecting debt-equity swap and others.

	As of December 31, 2016
	Total net asset			Ownership (%)		Net assets of associates (or joint ventures)			cost-book value differential		Impairment			Intercompany transaction and others			Book value
Woori Blackstone Korea Opportunity Private Equity Fund No.1		57,544			26.4		15,191			—		—			98			15,289
Kumho Tire Co., Inc. (*)		1,055,219			14.2		149,324			48,459		—			2,549			200,332
Woori Service Networks Co., Ltd.		2,940			4.9		145			—		—			—			145
Korea Credit Bureau		53,923			9.9		5,344			248		—			—			5,592
Korea Finance Security Co., Ltd.		22,503			15.0		3,376			—		—			—			3,376
Chin Hung International Inc. (*)		65,387			28.4		18,593			24,565		—			(126	)		43,032
Poonglim Industrial Co., Ltd. (*)		(111,156	)		31.0		(34,463	)		54,149		(21,062	)		1,376			—
STX Engine Co., Ltd.		95,784			29.2		28,002			14,954		—			80			43,036
SamHo Co., Ltd.		251,656			7.8		19,729			—		—			—			19,729
STX Corporation (*)		(250,018	)		9.5		(23,633	)		24,614		(27,904	)		26,923			—
Saman Corporation		36,205			9.2		3,326			5,373		—			—			8,699
Woori Growth Partnerships New Technology Private Equity Fund		56,846			23.1		13,118			—		—			—			13,118
2016KIF-IMM Woori Bank Technology Venture Fund		8,751			20.0		1,750			—		—			50			1,800
K BANK Co.,Ltd.		234,173			13.0		30,442			—		—			—			30,442
Woori Renaissance Holdings		100,708			51.6		51,965			—		(6,441	)		8,898			54,422
Woori Columbus First PEF		305			2.0		6			—		—			(6	)		—

(*) The net asset amount is after reflecting preferred stocks.

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14. INVESTMENT PROPERTIES

(1) Investment properties are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Acquisition cost		391,243			387,675
Accumulated depreciation		(31,306	)		(29,178	)
Net carrying value		359,937			358,497

(2) Changes in investment properties are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017			For the six months ended June 30, 2016
Beginning balance		358,497			351,496
Acquisition		1,221			3,133
Disposal		(225	)		—
Depreciation		(1,991	)		(1,860	)
Transfer		(2,708	)		15,627
Classified to held for sale		(534	)		—
Foreign currencies translation adjustments		(120	)		(4	)
Others		5,797			—
Ending balance		359,937			368,392

(3) Fair value of investment properties is amounting to 379,685 million Won and 382,370 million Won as of June 30, 2017 and December 31, 2016, respectively. The fair value of investment property, based on the assessment that was independently performed by external appraisal agencies, is classified as level 3 on the fair value hierarchy as of June 30, 2017 and December 31, 2016.

(4) Rental fee earned from investment properties is amounting to 2,411 million Won and 2,667 million Won for the six months ended June 30, 2017 and 2016, respectively.

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15. PREMISES AND EQUIPMENT

(1) Details of premises and equipment are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Land		Building			Properties for business use			Structures in leased office			Construction in progress		Structures			Total
Acquisition cost		1,488,266		857,511			1,013,539			427,743			37,877		20			3,824,956
Accumulated depreciation		—		(175,819	)		(825,314	)		(364,630	)		—		(17	)		(1,365,780	)
Net carrying value		1,488,266		681,692			188,225			63,113			37,877		3			2,459,176

	December 31, 2016
	Land		Building			Properties for business use			Structures in leased office			Construction in progress		Structures			Total
Acquisition cost		1,488,745		855,332			1,010,141			424,562			18,717		20			3,797,517
Accumulated depreciation		—		(163,633	)		(820,239	)		(355,604	)		—		(16	)		(1,339,492	)
Net carrying value		1,488,745		691,699			189,902			68,958			18,717		4			2,458,025

(2) Details of changes in premises and equipment are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017
	Land			Building			Properties for business use			Structures in leased office			Construction in progress			Structures			Total
Beginning balance		1,488,745			691,699			189,902			68,958			18,717			4			2,458,025
Acquisition		—			3,831			31,624			8,120			25,053			—			68,628
Disposal		(606	)		(205	)		(235	)		(423	)		—			—			(1,469	)
Depreciation		—			(13,029	)		(38,063	)		(18,253	)		—			(1	)		(69,346	)
Classified to assets held for sale		(1,743	)		(441	)		—			—			—			—			(2,184	)
Transfer		2,466			403			5,485			—			(5,646	)		—			2,708
Foreign currencies translation adjustment		(596	)		(560	)		(676	)		(675	)		(247	)		—			(2,754	)
Others		—			(6	)		188			5,386			—			—			5,568
Ending balance		1,488,266			681,692			188,225			63,113			37,877			3			2,459,176

	For the six months ended June 30, 2016
	Land			Building			Properties for business use			Structures in leased office			Construction in progress			Structures		Total
Beginning balance		1,493,628			704,017			193,291			79,744			522			4		2,471,206
Acquisition		—			5,522			32,580			8,104			1,222			—		47,428
Disposal		—			—			(166	)		(1,324	)		(67	)		—		(1,557	)
Depreciation		—			(12,637	)		(40,943	)		(31,175	)		—			—		(84,755	)
Classified to assets held for sale		(3,418	)		(2,317	)		—			—			—			—		(5,735	)
Foreign currencies translation adjustments		420			446			(3	)		91			(5	)		—		949
Transfer		(10,364	)		(5,263	)		—			—			—			—		(15,627	)
Others		145			80			865			28,146			—			—		29,236
Ending balance		1,480,411			689,848			185,624			83,586			1,672			4		2,441,145

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16. INTANGIBLE ASSETS AND GOODWILL

(1) Details of intangible assets are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Goodwill		Software			Industrial property rights			Development cost			Others			Membership deposit			Total
Acquisition cost		117,429		200,338			768			359,071			630,871			26,412			1,334,889
Accumulated amortization		—		(154,772	)		(457	)		(171,843	)		(493,920	)		—			(820,992	)
Accumulated impairment losses		—		—			—			—			(88	)		(6,927	)		(7,015	)
Net carrying value		117,429		45,566			311			187,228			136,863			19,485			506,882

	December 31, 2016
	Goodwill		Software			Industrial property rights			Development cost			Others			Membership deposit			Total
Acquisition cost		124,803		185,202			714			299,031			622,540			26,884			1,259,174
Accumulated amortization		—		(149,725	)		(401	)		(160,335	)		(458,088	)		—			(768,549	)
Accumulated impairment losses		—		—			—			—			(88	)		(6,798	)		(6,886	)
Net carrying value		124,803		35,477			313			138,696			164,364			20,086			483,739

(2) Details of changes in intangible assets are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017
	Goodwill			Software			Industrial property rights			Development cost			Others			Membership deposit			Total
Beginning balance		124,803			35,477			313			138,696			164,364			20,086			483,739
Acquisition		105			10,152			54			68,612			10,276			480			89,679
Disposal		—			—			—			—			—			(866	)		(866	)
Amortization (*)		—			(8,064	)		(56	)		(11,515	)		(30,389	)		—			(50,024	)
Impairment loss		—			—			—			—			—			(128	)		(128	)
Transfer		—			8,091			—			(8,127	)		36			—			—
Foreign currencies translation adjustment		(7,479	)		(68	)		—			(383	)		(1,053	)		(81	)		(9,064	)
Others		—			(22	)		—			(55	)		(6,371	)		(6	)		(6,454	)
Ending balance		117,429			45,566			311			187,228			136,863			19,485			506,882

(*) Amortization of other intangible assets amounting to 24,443 million Won is included in other operating expenses.

	For the six months ended June 30, 2016
	Goodwill			Software			Industrial property rights			Development cost			Others			Membership deposit			Total
Beginning balance		103,525			38,171			344			51,357			201,769			24,640			419,806
Acquisition		—			233			—			15,899			25,112			186			41,430
Disposal		—			—			—			—			—			(2,631	)		(2,631	)
Amortization		—			(7,744	)		(46	)		(8,687	)		(28,359	)		—			(44,836	)
Reversal of impairment loss		—			—			—			—			2,242			101			2,343
Foreign currencies translation adjustments		5,151			—			—			—			822			11			5,984
Others		(963	)		—			—			—			(253	)		431			(785	)
Ending balance		107,713			30,660			298			58,569			201,333			22,738			421,311

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17. ASSETS HELD FOR SALE

Assets held for sale are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Investments in joint ventures and associates		16,354		—
Premises and equipment		85		2,342
Total		16,439		2,342

18. ASSETS SUBJECT TO LIEN AND ASSETS ACQUIRED THROUGH FORECLOSURES

(1) Assets subjected to lien are as follows (Unit: Korean Won in millions):

		June 30, 2017
		Collateral given to	Amount		Reason for collateral
Loan and receivables	Due from banks on time in foreign currencies	Rural Commercial Bank		49,684	Related to bonds sold under repurchase agreements (*)
	Due from banks in local currency	Samsung Securities Co., Ltd. and others		14,209	Margin deposit for futures and options and others
	Due from banks in foreign currencies	Korea Investment & Securities Co., Ltd. and others		246,722	Foreign margin deposit for future or option and others
Financial assets at FVTPL	Financial institutions debt securities and others	Yuanta Securities Co., Ltd. and others		254,107	Substitute securities and others
AFS financial assets	Korean treasury and government agencies bonds and others	Korea Securities Depository and others		517,751	Related to bonds sold under repurchase agreements (*)
	Financial institutions debt securities and others	The BOK and others		2,111,506	Settlement risk and others
HTM financial assets	Corporates bonds and others	Korea Securities Depository		7,139	Related to bonds sold under repurchase agreements (*)
	Korean treasury and government agencies bonds and others	The BOK and others		7,075,396	Settlement risk and others
Lands and buildings		Credit Counselling & Recovery Service and others		6,230	Leasehold rights and others
		Total		10,282,924

(*) The Group enters into the repurchase agreements at predetermined price or original sale price added with certain rate of return after the disposal of securities. In this regards, the securities are provided as collaterals, and the purchasers are eligible to dispose or provide them as collateral. Therefore, as such securities have been transferred but have not been derecognized, the Group recognizes the relevant amount as liability (bond sold under repurchase agreements).

		December 31, 2016
		Collateral given to	Amount		Reason for collateral
Loan and receivables	Due from banks in local currency	Samsung Securities Co., Ltd. and others		24,589	Margin deposit for futures and options and others
	Due from banks in foreign currencies	Korea Investment & Securities Co., Ltd. and others		227,249	Foreign margin deposit for future or option and others
Financial assets at FVTPL	Financial institutions debt securities and others	Yuanta Securities Co., Ltd. and others		473,476	Substitute securities and others
AFS financial assets	Korean treasury and government agencies bonds	Korea Securities Depository and others		2,546,683	Related to bonds sold under repurchase agreements (*)
	Financial institutions debt securities and others	The BOK and others		836,522	Settlement risk and others
HTM financial assets	Korean treasury and government agencies bonds	Korea Securities Depository and others		7,133	Related to bonds sold under repurchase agreements (*)
	Korean treasury and government agencies bonds and others	The BOK and others		6,185,295	Settlement risk and others
Lands and buildings		Credit Counselling & Recovery Service and others		6,310	Leasehold rights and others
		Total		10,307,257

(*) The Group enters into the repurchase agreements at predetermined price or original sale price added with certain rate of return after the disposal of securities. In this regards, the securities are provided as collaterals, and the purchasers are eligible to dispose or provide them as collateral. Therefore, as such securities have been transferred but have not been derecognized, the Group recognizes the relevant amount as liability (bond sold under repurchase agreements).

- 52 -

(2) The carrying amounts of buildings acquired through foreclosure are as follow (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Land		—		4,138
Buildings		—		1,852
Properties for business use		—		202
Total		—		6,192

(3) Securities loaned are as follows (Unit: Korean Won in millions):

		June 30, 2017		December 31, 2016		Loaned to
Financial assets at FVTPL	Equity securities-listed stock		—		4,459	Samsung Securities Co., Ltd. and others
AFS financial assets	Korean treasury and government agencies bonds and others		171,688		493,579	Korea Securities Finance Corporation and others
Total			171,688		498,038

Securities loaned are lending of specific securities to borrowers who agree to return the same quantity of the same security at the end of lending period. As the Group does not derecognize these securities, there are no liabilities recognized through such transactions relates to securities loaned.

(4) Collaterals held that can be disposed and re-subjected to lien regardless of defaults of counterparties

Fair values of collaterals held can be disposed and re-subjected to lien regardless of defaults of counterparties as of June 30, 2017 and December 31, 2016 are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Fair values of collaterals		Fair values of collaterals were disposed or re-subjected to lien
Securities		11,445,595		—

	December 31, 2016
	Fair values of collaterals		Fair values of collaterals were disposed or re-subjected to lien
Securities		8,746,101		—

- 53 -

19. OTHER ASSETS

Details of other assets are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Prepaid expenses		112,423		111,445
Advance payments		4,774		1,944
Non-operative assets		—		6,192
Others		8,617		9,265
Total		125,814		128,846

20. FINANCIAL LIABILITIES AT FVTPL

Financial liabilities at FVTPL are composed of financial liabilities held for trading and financial liabilities designated at FVTPL.

(1) Financial liabilities at FVTPL are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Financial liabilities held for trading		1,902,720		3,036,478
Financial liabilities designated at FVTPL		616,177		766,880
Total		2,518,897		3,803,358

(2) Financial liabilities held for trading are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Deposits due to Customers:
Gold banking liabilities		31,184		26,501
Derivative liabilities		1,864,704		3,009,977
Securities sold		6,832		—
Total		1,902,720		3,036,478

(3) Financial liabilities designated at FVTPL are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Equity linked securities index:
Equity linked securities index in short position		522,587		673,906
Debentures:
Debentures in local currency		93,590		92,974
Total		616,177		766,880

(4) Credit risk adjustments to financial liabilities designated at FVTPL is as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Financial liabilities designated at FVTPL subject to credit risk adjustments		616,177			783,760
Changes in fair value for credit risk adjustments		(115	)		(324	)
Accumulated changes in credit risk adjustments		(15,893	)		(15,323	)

Credit risk adjustments are applied to reflect the Group’s own credit risk when measuring derivative liabilities at fair value. The methodology to determine the adjustment incorporates the Group’s credit spread as observed through credit ratings.

- 54 -

(5) The differences between financial liabilities at FVTPL’s carrying amount and nominal amount at maturity are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Carrying amount		616,177			766,880
Nominal amount at maturity		658,114			902,375
Difference		(41,937	)		(135,495	)

21. DEPOSITS DUE TO CUSTOMERS

Details of deposits due to customers by type are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Deposits in local currency:
Deposits on demand		7,828,154			9,491,680
Deposits at termination		190,437,245			183,723,369
Mutual installment		35,623			37,128
Deposits on notes payables		863,609			943,446
Deposits on CMA		186,586			203,013
Certificate of deposits		4,873,175			3,836,430
Other deposits		1,378,153			1,360,176
Sub-total		205,602,545			199,595,242
Deposits in foreign currencies		20,643,537			21,453,096
Present value discount		(45,505	)		(27,927	)
Total		226,200,577			221,020,411

22. BORROWINGS AND DEBENTURES

(1) Details of borrowings are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Lenders	Interest rate (%)		Amount
Borrowings in local currency:
Borrowings from The BOK	The BOK		0.5 ~ 0.8		1,409,422
Borrowings from government funds	Small and Medium Business Corporation and others		0.0 ~ 3.5		1,616,014
Others	The Korea Development Bank and others		0.0 ~ 5.5		3,804,075
Sub-total					6,829,511
Borrowings in foreign currencies:
Borrowings in foreign currencies	The Export-Import BOK and others		0.0 ~ 7.3		7,264,348
Offshore borrowings in foreign currencies	Commonwealth Bank and others		1.6		30,085
Sub-total					7,294,433
Bills sold	Others		0.0 ~ 1.2		43,048
Call money	Bank and others		0.0 ~ 4.7		953,366
Bonds sold under repurchase agreements	Other financial institutions		0.6 ~ 4.5		559,952
Present value discount					(365	)
Total					15,679,945

- 55 -

	December 31, 2016
	Lenders	Interest rate (%)		Amount
Borrowings in local currency:
Borrowings from the BOK	The BOK		0.5 ~ 0.8		1,598,553
Borrowings from government funds	Small and Medium Business Corporation and others		0.0 ~ 3.5		1,534,807
Others	Seoul Metropolitan Government and others		0.0 ~ 3.8		3,922,878
Sub-total					7,056,238
Borrowings in foreign currencies:
Borrowings in foreign currencies	The Export-Import BOK and others		0.0 ~ 5.2		7,737,237
Offshore borrowings in foreign currencies	Wells Fargo		1.4		18,128
Sub-total					7,755,365
Bills sold	Others		0.0 ~ 1.6		26,895
Call money	Bank and others		0.0 ~ 5.1		1,926,779
Bonds sold under repurchase agreements	Other financial institutions		0.0 ~ 4.5		2,004,905
Present value discount					(667	)
Total					18,769,515

(2) Details of debentures are as follows (Unit: Korean Won in millions):

	June 30, 2017					December 31, 2016
	Interest rate (%)		Amount			Interest rate (%)		Amount
Face value of bond(*):
Ordinary bonds		1.5 ~ 11.8		20,614,399			1.5 ~ 11.8		18,268,403
Subordinated bonds		3.0 ~ 12.6		4,725,969			3.0 ~ 12.6		5,327,335
Other bonds		1.6 ~ 17.0		346,036			17.0		4,006
Sub-total				25,686,404					23,599,744
Discounts on bond				(37,272	)				(34,295	)
Total				25,649,132					23,565,449

(*) Included debentures under fair value hedge relationships are 3,410,390 million Won and 3,610,193 million Won as of June 30, 2017 and December 31, 2016, respectively.

23. PROVISIONS

(1) Details of provisions are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Asset retirement obligation		61,953		58,076
Provision for guarantee (*1)		188,754		238,117
Provisions for unused commitments		82,621		87,909
Provisions for customer reward credits		32,048		22,093
Other provisions (*2)		15,654		22,282
Total		381,030		428,477

(*1) Provision for guarantee includes provision for financial guarantee of 60,089 million Won and 67,557 million Won as of June 30, 2017 and December 31, 2016, respectively.

(*2) Other provisions consist of provision for litigation, provision for loss recovery, and others.

- 56 -

(2) Changes in provisions except for asset retirement obligation are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017
	Provision for guarantees			Provision for unused commitments			Provisions for customer reward credits			Other provisions			Total
Beginning balance		238,117			87,909			22,093			22,282			370,401
Provisions provided		1,003			491			32,208			2,390			36,092
Provisions used		(12,335	)		(42	)		(39,402	)		(9,013	)		(60,792	)
Reversal of unused amount		(45,971	)		(5,736	)		—			(40	)		(51,747	)
Differences due to foreign currencies translation		20			(1	)		—			(146	)		(127	)
Transfer(*)		—			—			11,482			—			11,482
Others		7,920			—			5,667			128			13,715
Amortization		—			—			—			53			53
Ending balance		188,754			82,621			32,048			15,654			319,077

(*) According to contracts with the third parties, the Group ultimately will be reimbursed for which it has paid out on behalf of customers, which has incurred through their customer loyalty programs. Therefore, when such obligation incurs, the Group recognizes it as “transfer”, but there is no impact on the Group’s expense.

	For the six months ended June 30, 2016
	Provision for guarantees			Provision for unused commitments			Provisions for customer reward credits			Other provisions			Total
Beginning balance		364,141			85,313			5,445			22,581			477,480
Provisions provided		3,251			3,840			8,364			2,424			17,879
Provisions used		(73,594	)		6			(7,748	)		(8,438	)		(89,774	)
Reversal of unused amount		(78,905	)		(2,000	)		—			—			(80,905	)
Others		10,725			21			—			(3	)		10,743
Ending balance		225,618			87,180			6,061			16,564			335,423

(3) Changes in asset retirement obligation are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017			For the six months ended June 30, 2016
Beginning balance		58,076			39,121
Provisions provided		654			452
Provisions used		(416	)		(429	)
Reversal of unused amount		(727	)		—
Amortization		203			219
Increase in asset retirement expense and others		4,163			18,912
Ending balance		61,953			58,275

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24. NET DEFINED BENEFIT LIABILITY (ASSET)

The characteristics of the Group’s defined benefit retirement pension plans characteristics are as follows:

Employees and directors with one or more years of service are entitled to receive a payment upon termination of their employment, based on their length of service and rate of pay at the time of termination. The assets of the plans are measured at their fair value at the end of reporting date. The plan liabilities are measured using the projected unit method, which takes account of projected earnings increases, using actuarial assumptions that give the best estimate of the future cash flows that will arise under the plan liabilities.

The Group is exposed to various risks through defined benefit retirement pension plan, and the most significant risks are as follows:

Volatility of asset	The defined benefit obligation was estimated with an interest rate calculated based on blue chip corporate bonds earnings. A deficit may occur if the rate of return of plan assets falls short of the interest rate.
Decrease in profitability of blue chip bonds	A decrease in profitability of blue chip bonds will be offset by some increase in the value of debt securities that the employee benefit plan owns but will bring an increase in the defined benefit obligation.
Risk of inflation	Defined benefit obligations are related to inflation rate; the higher the inflation rate is, the higher the level of liabilities. Therefore, deficit occurs in the system if an inflation rate increases.

(1) Details of net defined benefit liability(asset) are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Defined benefit obligation		1,034,636			984,381
Fair value of plan assets		(1,019,219	)		(990,653	)
Net defined benefit liability (asset)		15,417			(6,272	)

(2) Changes in the carrying value of defined benefit obligation are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017			For the six months ended June 30, 2016
Beginning balance		984,381			901,219
Current service cost		73,564			76,515
Interest expense		13,144			11,953
Remeasurements		4,639			58,377
Foreign currencies translation adjustments		(121	)		57
Retirement benefit paid		(31,022	)		(29,464	)
Curtailment or liquidation		(10,076	)		(9,152	)
Others		127			251
Ending balance		1,034,636			1,009,756

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(3) Changes in the plan assets are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017			For the six months ended June 30, 2016
Beginning balance		990,653			801,528
Interest income		15,127			12,307
Remeasurements		(7,847	)		(515	)
Employer’s contributions		18,000			160,250
Retirement benefit paid		(29,431	)		(28,909	)
Curtailment or liquidation		(10,396	)		(8,813	)
Others		43,113			(5,347	)
Ending balance		1,019,219			930,501

(4) Plan assets wholly consist of time deposits as of June 30, 2017 and December 31, 2016, respectively. Among plan assets, realized returns on plan assets amount to 7,280 million Won and 11,792 million Won for the six months ended June 30, 2017 and 2016, respectively.

(5) Current service cost, net interest expense, past service cost, loss on the curtailment or liquidation and remeasurements recognized in the consolidated statements of net income and total comprehensive income are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017			For the six months ended June 30, 2016
Current service cost		73,564			76,515
Net interest income		(1,983	)		(354	)
Loss(gain) on the curtailment or settlement		321			(339	)
Cost recognized in net income		71,902			75,822
Remeasurements		12,486			58,892
Cost recognized in total comprehensive income		84,388			134,714

Retirement benefit service costs related to defined contribution plans are recognized 2,155 million Won and 2,012 million Won for the six months ended June 30, 2017 and 2016, respectively.

(6) Key actuarial assumptions used in defined benefit liability (asset) assessment are as follows:

	June 30, 2017	December 31, 2016
Discount rate	2.96%	2.85%
Future wage growth rate	6.06%	6.05%
Mortality rate	Issued by Korea Insurance Development Institute	Issued by Korea Insurance Development Institute
Retirement rate	Experience rate for each employment classification	Experience rate for each employment classification

(7) The sensitivity to actuarial assumptions used in the assessment of defined benefit obligation is as follows (Unit: Korean Won in millions):

		June 30, 2017			December 31, 2016
Discount rate	Increase by 1% point		(109,252	)		(107,203	)
	Decrease by 1% point		127,837			125,395
Future wage growth rate	Increase by 1% point		127,318			124,766
	Decrease by 1% point		(110,652	)		(108,344	)

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25. OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES

Other financial liabilities and other liabilities are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Other financial liabilities:
Accounts payable		11,813,551			5,626,661
Accrued expenses		1,703,152			2,055,936
Borrowings from trust accounts		3,781,656			3,329,683
Agency business revenue		536,882			331,159
Foreign exchange payables		486,111			702,968
Domestic exchange payables		4,469,497			8,480,765
Other miscellaneous financial liabilities		1,861,183			1,458,747
Present value discount		(1,186	)		(833	)
Sub-total		24,650,846			21,985,086
Other liabilities:
Unearned Income		174,468			171,050
Other miscellaneous liabilities		99,038			128,326
Sub-total		273,506			299,376
Total		24,924,352			22,284,462

26. DERIVATIVES

(1) Derivative assets and derivative liabilities are as follows (Unit: Korean Won in millions):

	June 30, 2017
			Assets						Liabilities
	Nominal amount		For cash flow hedge		For fair value hedge		For trading		For cash flow hedge		For fair value hedge		For trading
Interest rate:
Futures		207,279		—		—		—		—		—		—
Swaps		125,264,575		—		140,143		346,069		—		2,348		364,524
Written options		730,000		—		—		15,003		—		—		—
Purchase options		925,000		—		—		—		—		—		15,993
Currency:
Futures		503,205		—		—		—		—		—		—
Forwards		68,932,550		—		—		480,511		—		—		519,445
Swaps		46,528,978		33		—		652,287		20,642		—		668,739
Written options		2,138,187		—		—		25,435		—		—		—
Purchase options		2,987,630		—		—		—		—		—		25,021
Equity:
Futures		390,006		—		—		—		—		—		—
Swaps		15,000		—		—		65		—		—		33
Written options		4,392,724		—		—		124,451		—		—		—
Purchase options		5,973,184		—		—		—		—		6,239		269,943
Others:
Futures		2,041		—		—		—		—		—		—
Swaps		2,632		—		—		157		—		—		144
Written options		7,543		—		—		90		—		—		—
Purchase options		46,948		—		—		—		—		—		862
Total		259,047,482		33		140,143		1,644,068		20,642		8,587		1,864,704

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	December 31, 2016
			Assets				Liabilities
	Notional Amount		For fair value Hedge		For trading		For fair value hedge		For trading
Interest rate:
Futures		54,785		—		—		—		—
Swaps		118,582,511		139,832		470,057		7,013		509,686
Written options		860,000		—		21,172		—		—
Purchase options		1,035,000		—		—		—		21,863
Currency:
Futures		493,733		—		—		—		—
Forwards		62,539,094		—		1,265,852		—		1,015,380
Swaps		39,782,049		—		1,022,969		—		1,221,959
Written options		1,120,949		—		42,126		—		—
Purchase options		907,211		—		—		—		8,589
Equity:
Futures		926,392		—		—		—		—
Swaps		15,000		—		92		—		88
Written options		3,007,969		745		73,261		—		—
Purchase options		4,460,233		—		—		208		228,900
Others:
Futures		5,105		—		—		—		—
Swaps		7,918		—		2,645		—		2,331
Written options		8,307		—		121		—		—
Purchase options		64,352		—		—		—		1,181
Total		233,870,608		140,577		2,898,295		7,221		3,009,977

Derivatives held for trading purpose are classified into financial assets or liabilities at FVTPL (see Notes 7 and 20) and derivatives for hedging are stated as a separate line item in the consolidated statements of financial position.

(2) Gains or losses from valuation of financial instruments under hedge accounting are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Losses from hedged items		(3,986	)		(100,587	)
Gains (losses) from hedging instruments		(19,475	)		92,491

Meanwhile, the maximum period that the Group is exposed to cash flow risk arising from the hedging transaction discussed above will be terminated by January 2020.

Among gain (loss) on valuation of derivatives that was included in the accumulated other comprehensive income, the amount has been reclassified to loss is 19,018 million Won, before reduction of income tax effect during the six months ended June 30, 2017.

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27. DEFERRED DAY 1 PROFITS OR LOSSES

Changes in deferred day 1 profits or losses are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Beginning balance		13,422			28,008
New transactions		500			1,337
Amounts recognized in profits or losses		(3,613	)		(7,020	)
Ending balance		10,309			22,325

In case some variables to measure fair values of financial instruments are not observable or available in the market, valuation techniques are utilized to evaluate such financial instruments. Those financial instruments are recorded at the fair value produced by the valuation techniques as at the time of acquisition, even though there are difference noted between the transaction price and the fair value. The table above presents the difference yet to be realized as profit or losses.

28. CAPITAL STOCK AND CAPITAL SURPLUS

(1) The number of authorized shares and others are as follows:

	June 30, 2017		December 31, 2016
Authorized shares of common stock		5,000,000,000 Shares		5,000,000,000 Shares
Par value		5,000 Won		5,000 Won
Issued shares of common stock		676,000,000 Shares		676,000,000 Shares
Capital stock		3,381,392 million Won		3,381,392 million Won

(2) There is no change to be disclosed in numbers of issued and outstanding shares of common stock for the six months ended June 30, 2017 and 2016.

(3) Details of capital surplus are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Capital in excess of par value		269,533		269,533
Other capital surplus		16,541		16,798
Total		286,074		286,331

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29. HYBRID SECURITIES

The bond-type hybrid securities classified as owner’s equity are as follows (Unit: Korean Won in millions):

	Issue date		Maturity		Interest rate (%)		June 30, 2017			December 31, 2016
Securities in local currency		June 20, 2008		June 20, 2038		7.7		255,000			255,000
		March 8, 2012		March 8, 2042		5.8		—			190,000
		April 25, 2013		April 25, 2043		4.4		500,000			500,000
		November 13, 2013		November 13, 2043		5.7		200,000			200,000
		December 12, 2014		December 12, 2044		5.2		160,000			160,000
		June 3, 2015		June 3, 2045		4.4		240,000			240,000
Securities in foreign currencies		May 2, 2007		May 2, 2037		6.2		—			930,900
		June 10, 2015		June 10, 2045		5.0		559,650			559,650
		September 27, 2016		—		4.5		553,450			553,450
		May 16, 2017		—		5.3		562,700			—
Issuance cost								(12,912	)		(14,104	)
Total								3,017,888			3,574,896

With respect to the hybrid securities issued, there’s no maturity or the contractual agreements allow the Group to indefinitely extend the maturity date and defer the payment of interest. If the Group makes a resolution not to pay dividends on common stock, and then, the Group is exonerated from interest payment on the hybrid securities.

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30. OTHER EQUITY

(1) Details of other equity are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Accumulated other comprehensive income:
Gain on valuation of available-for-sale financial assets		357,948			386,981
Share of other comprehensive loss of joint ventures and associates		(356	)		(1,863	)
Loss on foreign currency translation of foreign operations		(112,297	)		(48,353	)
Remeasurement loss related to defined benefit plan		(173,019	)		(163,397	)
Loss on valuation of cash flow hedges		(1,526	)		—
Sub-total		70,750			173,368
Treasury shares		(34,113	)		(34,113	)
Other capital adjustments		(1,815,438	)		(1,607,280	)
Total		(1,778,801	)		(1,468,025	)

(2) Changes in the accumulated other comprehensive income are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017
	Beginning balance			Increase (decrease)(*)			Reclassification adjustments(*)			Income tax effect			Ending balance
Gain (loss) on valuation of available-for-sale financial assets		386,981			46,479			(81,114	)		5,602			357,948
Share of other comprehensive income (loss) of joint ventures and associates		(1,863	)		2,038			—			(531	)		(356	)
Gain (loss) on foreign currency translation of foreign operations		(48,353	)		(81,571	)		—			17,627			(112,297	)
Remeasurement gain (loss) related to defined benefit plan		(163,397	)		(12,642	)		—			3,020			(173,019	)
Gain (loss) on valuation of cash flow hedges		—			(1,947	)		—			421			(1,526	)
Total		173,368			(47,643	)		(81,114	)		26,139			70,750

	For the six months ended June 30, 2016
	Beginning balance			Increase (decrease) (*)			Reclassification adjustments(*)			Income tax effect			Ending balance
Gain (loss) on valuation of available-for-sale financial assets		374,685			108,105			(12,872	)		(15,582	)		454,336
Share of other comprehensive income (loss) of joint ventures and associates		6,074			4,846			(3,906	)		(1,173	)		5,841
Gain (loss) on foreign currency translation of foreign operations		(70,789	)		(8,378	)		—			1,655			(77,512	)
Remeasurement gain (loss) related to defined benefit plan		(197,579	)		(58,888	)		—			14,224			(242,243	)
Gain (loss) on valuation of cash flow hedges		(10,371	)		10,371			—			—			—
Total		102,020			56,056			(16,778	)		(876	)		140,422

(*) For the change in gain (loss) on valuation of AFS financial assets, “increase (decrease)” represents change due to the valuation during the period, and “reclassification adjustments” explains disposal or recognition of impairment losses on AFS financial assets.

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31. RETAINED EARNINGS

(1) Details of retained earnings are as follows (Unit: Korean Won in millions):

		June 30, 2017		December 31, 2016
Legal reserve	Legal reserve		1,729,754		1,622,754
	Other legal reserve		45,669		44,634
	Sub-total		1,775,423		1,667,388
Voluntary reserve	Business rationalization reserve		8,000		8,000
	Reserve for financial structure improvement		235,400		235,400
	Additional reserve		7,418,806		7,073,104
	Regulatory reserve for credit loss		2,438,191		2,255,252
	Revaluation reserve		751,964		753,908
	Other voluntary reserve		11,700		11,700
	Sub-total		10,864,061		10,337,364
Retained earnings before appropriation			2,710,312		2,606,814
	Total		15,349,796		14,611,566

i. Legal reserve

In accordance with the Banking Act, legal reserve are appropriated at least one tenth of the earnings after tax on every dividend declaration, not exceeding the paid in capital. This reserve may not be used other than for offsetting a deficit or transferring to capital.

ii. Other legal reserve

Other legal reserves were appropriated in the branches located in Japan, Vietnam and Bangladesh according to the banking laws of Japan, Vietnam and Bangladesh, and may be used to offset any deficit incurred in those branches.

iii. Business rationalization reserve

Pursuant to the Restriction of Special Taxation Act, the Group was previously required to appropriate, as a reserve for business rationalization, amounts equal to tax reductions arising from tax exemptions and tax credits up to December 31, 2001. The requirement was no longer effective from 2002.

iv. Reserve for financial structure improvement

From 2002 to 2014, the Finance Supervisory Services recommended banks in Korea to appropriate at least 10 percent of net income after accumulated deficit for financial structure improvement, until tangible common equity ratio equals 5.5 percent. But this reserve is not available for payment of cash dividends; however, it can be used to reduce a deficit or be transferred to capital. The reserve and appropriation is an Autonomous judgment matter of the Group since 2015.

v. Additional reserve and other voluntary reserve

Additional reserve and other voluntary reserve were appropriated for capital adequacy and other management purpose.

vi. Regulatory reserve for credit loss

In accordance with Article 29 of the Regulation on Supervision of Banking Business (“RSBB”), if provisions for credit loss under K-IFRS for the accounting purpose are lower than provisions under RSBB, the Bank discloses such short fall amount as regulatory reserve for credit loss.

vii. Revaluation reserve

Revaluation reserve is the amount of limited dividends set by the board of directors to be the recognized as complementary capital when the gain or loss occurred in the property revaluation by adopting K-IFRS.

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(2) Changes in retained earnings are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Beginning balance		14,611,566			13,726,122
Net attributable to owners		1,098,361			750,266
Dividends on common stock		(269,308	)		(168,317	)
Dividends on hybrid securities		(90,823	)		(100,236	)
Ending balance		15,349,796			14,207,835

32. REGULATORY RESERVE FOR CREDIT LOSS

In accordance with Paragraph 1 and 2 of Article 29 of the Regulation on the Supervision of Banking Business (“RSBB”), if the estimated provisions for credit loss under K-IFRS for the accounting purpose are lower than those in accordance with the provisions under the RSBB, the Group shall disclose the difference as the planned regulatory reserve for credit loss.

(1) Balance of the planned regulatory reserve for credit loss is as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Beginning balance		2,438,191		2,255,252
Planned provision of regulatory reserve for credit loss		49,961		182,939
Ending balance		2,488,152		2,438,191

(2) Planned reserves provided, adjusted net income after the planned reserves provided and adjusted earnings per share after the planned reserves provided are as follows (Unit: Korean Won in millions, except for earnings per share amount):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30			Six months ended June 30
Net income		466,284		1,109,015		311,283			757,787
Provision (reversal) of regulatory reserve for credit loss		48,412		49,961		(5,206	)		12,826
Adjusted net income after the provision(reversal) of regulatory reserve		417,872		1,059,054		316,489			744,961
Adjusted EPS after the provision (reversal) of regulatory reserve(Unit: Korean Won)		559		1,439		396			958

33. DIVIDENDS

At the shareholders’ meeting on March 24, 2017, dividend payment for the year ended December 31, 2016 amounting to 269,308 million Won (400 Won per share) was approved.

In addition, on July 28, 2017, the board of directors approved interim dividend payment of 100 Won per share, which amounts to 67,327 million Won in total. In accordance with the Commercial Law, the dividend is required to be paid within a month from the date of declaration, and the amount of dividend payable is not included in the consolidated financial statements attached.

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34. NET INTEREST INCOME

(1) Interest income recognized are as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Financial assets at FVTPL		13,074		26,806		14,536		29,684
AFS financial assets		67,667		144,067		87,163		176,540
HTM financial assets		74,690		149,673		92,643		189,492
Loans and receivables:
Interest on due from banks		20,182		41,403		16,671		33,877
Interest on loans		1,921,359		3,810,008		1,921,276		3,843,951
Interest of other receivables		8,836		17,627		9,765		20,018
Sub-total		1,950,377		3,869,038		1,947,712		3,897,846
Total		2,105,808		4,189,584		2,142,054		4,293,562

(2) Interest expense recognized are as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Interest on deposits due to customers		586,051		1,174,384		658,849		1,326,553
Interest on borrowings		57,666		115,548		54,560		110,132
Interest on debentures		154,445		305,804		154,469		310,057
Other interest expense		20,070		43,528		29,079		58,062
Total		818,232		1,639,264		896,957		1,804,804

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35. NET FEES AND COMMISSIONS INCOME

(1) Details of fees and commissions income recognized are as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Fees and commissions received (*)		163,688		336,322		163,458		333,464
Fees and commissions received for provision of guarantee		15,911		31,700		16,336		34,163
Fees and commissions received on project financing		4,614		6,334		8,621		13,489
Fees and commissions received on Credit card		268,887		527,566		229,889		452,920
Fees and commissions received on securities		19,757		40,267		16,851		33,483
Other fees and commissions received		33,424		71,704		22,034		39,311
Total		506,281		1,013,893		457,189		906,830

(*) Fees and commissions received include fees income from agency commission, fees income from electronic finance, fees income related to loan, fees for import letter of credit dealing, commission received on foreign exchange and others.

(2) Details of fees and commissions expense incurred are as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Fees and commissions paid		41,930		73,167		43,032		80,414
Credit card commission		200,275		400,349		176,818		356,451
Brokerage commission		121		348		257		434
Others		1,207		2,329		811		1,525
Total		243,533		476,193		220,918		438,824

36. DIVIDEND INCOME

Details of dividend income recognized are as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Dividend from financial assets at FVTPL		47		190		84		751
Dividend from AFS financial assets		19,570		59,255		52,997		119,648
Total		19,617		59,445		53,081		120,399

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37. GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FVTPL

(1) Details of gains or losses related to financial instruments at FVTPL are as follows (Unit: Korean Won in millions):

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30		Six months ended June 30
Gains (losses) on financial instruments held for trading		36,266			(60,186	)		115,880		11,099
Gains (losses) on financial instruments designated at FVTPL		(24,200	)		(86,223	)		983		47,497
Total		12,066			(146,409	)		116,863		58,596

(2) Gains (losses) on financial instruments held for trading are as follows (Unit: Korean Won in millions):

			2017						2016
			Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
Financial Instruments held for trading	Securities	Gain on valuation		1,055			5,895			5,283			17,014
		Gain on disposals		3,936			9,860			13,418			17,986
		Loss on valuation		(2,785	)		(6,511	)		(1,719	)		(3,351	)
		Loss on disposals		(1,308	)		(2,057	)		(2,072	)		(4,980	)
		Sub-total		898			7,187			14,910			26,669
	Other financial instruments	Gain on valuation		1,495			3,071			2,372			10,368
		Gain on disposals		814			933			743			1,541
		Loss on valuation		(1,971	)		(3,590	)		(2,555	)		(10,385	)
		Loss on disposals		(211	)		(234	)		(482	)		(1,315	)
		Sub-total		127			180			78			209
		Total		1,025			7,367			14,988			26,878
Derivatives (for trading)	Interest rates derivatives	Gain on transactions and valuation		201,637			433,349			433,958			838,309
		Loss on transactions and valuation		(198,170	)		(421,734	)		(445,581	)		(896,992	)
		Sub-total		3,467			11,615			(11,623	)		(58,683	)
	Currencies derivatives	Gain on transactions and valuation		(94,206	)		3,773,565			697,568			2,746,051
		Loss on transactions and valuation		105,055			(3,943,609	)		(571,832	)		(2,632,295	)
		Sub-total		10,849			(170,044	)		125,736			113,756
	Equity derivatives	Gain on transactions and valuation		92,302			302,927			36,564			70,145
		Loss on transactions and valuation		(71,116	)		(211,551	)		(47,604	)		(136,822	)
		Sub-total		21,186			91,376			(11,040	)		(66,677	)
	Other derivatives	Gain on transactions and valuation		2,295			12,312			10,768			18,644
		Loss on transactions and valuation		(2,556	)		(12,812	)		(12,949	)		(22,819	)
		Sub-total		(261	)		(500	)		(2,181	)		(4,175	)
		Total		35,241			(67,553	)		100,892			(15,779	)
	Total			36,266			(60,186	)		115,880			11,099

- 69 -

(3) Gains (losses) on financial instruments designated at FVTPL are as follows (Unit: Korean Won in millions):

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
Gain (loss) on equity-linked securities:
Loss on disposals of equity-linked securities		(3,686	)		(15,877	)		(3,813	)		(7,153	)
Gain (loss) on valuation of equity-linked securities		(20,667	)		(69,714	)		3,718			52,993
Sub-total		(24,353	)		(85,591	)		(95	)		45,840
Gain (loss) on other securities:
Gain (loss) on valuation of other securities		(114	)		(16	)		308			390
Gain (loss) on other financial instruments:
Gain (loss) on valuation of other financial instruments		267			(616	)		770			1,267
Total		(24,200	)		(86,223	)		983			47,497

38. GAINS (LOSSES) ON AFS FINANCIAL ASSETS

Gains (losses) on AFS financial assets are as follows (Unit: Korean Won in millions):

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
Gains on redemption of securities		220			547			600			611
Gains on transaction of securities		95,019			116,262			23,512			36,901
Impairment losses on securities		(6,852	)		(12,637	)		(4,516	)		(8,629	)
Total		88,387			104,172			19,596			28,883

39. IMPAIRMENT LOSSES DUE TO CREDIT LOSS

Impairment losses on loans and receivables, guarantees and loan commitment recognized for credit loss are as follows (Unit: Korean Won in millions):

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
Impairment losses due to credit loss		(211,842	)		(333,976	)		(249,523	)		(504,558	)
Reversal of provision on guarantee		16,071			44,968			787			75,654
Reversal of provision on (provision provided for) loan commitment		(8,715	)		5,245			(1,798	)		(1,840	)
Total		(204,486	)		(283,763	)		(250,534	)		(430,744	)

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40. GENERAL ADMINISTRATIVE EXPENSES AND OTHER NET OPERATING INCOME (EXPENSES)

(1) General and administrative expenses recognized are as follows (Unit: Korean Won in millions):

			2017				2016
			Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Salaries	Short term employee benefits	Salaries		326,034		654,191		312,297		634,342
		Employee benefits		114,170		213,600		97,016		183,981
	Retirement benefit service costs			36,972		74,057		38,287		77,834
	Termination			5,477		5,477		92,405		92,791
	Sub-Total			482,653		947,325		540,005		988,948
Depreciation and amortization				45,380		94,927		57,665		129,591
Other general and administrative expenses	Rent			76,297		156,708		76,505		155,913
	Taxes and public dues			34,077		63,178		35,321		62,685
	Service charges			47,611		96,418		58,154		115,613
	Computer and IT related			16,089		30,477		24,627		41,816
	Telephone and communication			16,111		31,590		15,044		29,989
	Operating promotion			10,003		21,053		10,489		21,997
	Advertising			22,434		29,880		21,259		34,279
	Printing			2,095		4,237		2,747		5,013
	Traveling			2,920		6,024		2,620		5,033
	Supplies			1,517		3,117		1,619		3,142
	Insurance premium			1,956		4,169		1,805		3,599
	Reimbursement			4,710		9,177		4,920		9,036
	Maintenance			3,331		6,882		3,895		7,469
	Water, light, and heating			2,883		7,146		2,977		7,440
	Vehicle maintenance			2,602		4,964		2,429		4,693
	Others			11,488		21,155		10,028		18,296
	Sub-total			256,124		496,175		274,439		526,013
	Total			784,157		1,538,427		872,109		1,644,552

(2) Other operating income recognized is as follows (Unit: Korean Won in millions):

	2017					2016
	Three months ended June 30			Six months ended June 30		Three months ended June 30			Six months ended June 30
Gains on transaction of foreign exchange		619,297			1,698,987		1,123,975			2,635,300
Gains on disposal of loans and receivables		14,861			201,860		110,758			173,465
Gains on transactions of derivatives		11,592			11,656		32,596			111,505
Gains on fair value hedged items		(7,094	)		11,860		(7,070	)		18,113
Others (*)		5,813			68,668		10,015			59,925
Total		644,469			1,993,031		1,270,274			2,998,308

(*) Other income includes such income amounting to 28,800 million Won and 47,363 million Won for the six months ended June 30, 2017 and 2016, respectively, that the Group recognized for it is to receive from other creditor financial institutions in accordance with the creditor financial institutions committee agreement.

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(3) Other operating expenses recognized are as follows (Unit: Korean Won in millions):

	2017					2016
	Three months ended June 30			Six months ended June 30		Three months ended June 30			Six months ended June 30
Losses on transactions of foreign exchange		534,740			1,374,764		1,178,863			2,592,193
KDIC deposit insurance fees		77,146			150,256		73,474			144,501
Contribution to miscellaneous funds		71,927			144,262		75,845			150,943
Losses(Gains) on disposals of loans and receivables		(40	)		28		—			5
Losses(gains) related to derivatives		(16,441	)		31,131		(6,557	)		19,014
Losses on fair value hedged items		15,820			15,846		32,450			118,700
Others (*)		38,584			75,554		71,615			113,195
Total		721,736			1,791,841		1,425,690			3,138,551

(*) Other expense includes such expenses amounting to 3,325 million Won and 92,375 million Won for the six months ended June 30, 2017 and 2016, respectively, that the Group recognized for it is to carry out a payment to other creditor financial institutions in accordance with the creditor financial institutions committee agreement.

41. OTHER NON-OPERATING INCOME (EXPENSES)

(1) Details of gain or loss on valuation of investments in joint ventures and associates are as follows (Unit: Korean Won in millions):

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
Gain on valuation		(10,061	)		3,316			1,570			8,272
Loss on valuation		521			(62,271	)		(8,519	)		(15,271	)
Impairment loss		(5,323	)		(5,323	)		(4,645	)		(4,645	)
Total		(14,863	)		(64,278	)		(11,594	)		(11,644	)

(2) Other non-operating income and expenses recognized are as follows (Unit: Korean Won in millions):

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
Other non-operating incomes		30,411			77,185			21,993			61,969
Other non-operating expenses		(18,714	)		(67,187	)		(57,488	)		(88,307	)
Total		11,697			9,998			(35,495	)		(26,338	)

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(3) Other non-operating income recognized are as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Rental fee income		1,880		3,700		1,833		3,733
Gains on disposal of investments in joint ventures and associates		4,466		32,886		—		1,199
Gains on disposal of premises and equipment, intangible assets and other assets		1,494		1,675		130		347
Reversal of impairment loss of premises and equipment, intangible assets and other assets		—		32		200		2,585
Others		22,571		38,892		19,830		54,105
Total		30,411		77,185		21,993		61,969

(4) Other non-operating expenses recognized are as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Depreciation on investment properties		992		1,991		951		1,860
Interest expense of rent leasehold deposits		105		223		127		254
Losses on disposal of investment in joint ventures and associates		46		27,730		15,060		15,060
Losses on disposal of premises and equipment, intangible assets and other assets		271		608		4,157		5,887
Impairment losses of premises and equipment, intangible assets and other assets		40		160		315		343
Donation		10,426		14,980		18,714		33,917
Others		6,834		21,495		18,164		30,986
Total		18,714		67,187		57,488		88,307

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42. INCOME TAX EXPENSE

(1) Details of income tax expenses are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Current tax expense
Current tax expense in respect of the current period		284,030			83,665
Adjustments recognized in the current period in relation to the current tax of prior periods		(4,919	)		(22,043	)
Sub-total		279,111			61,622
Deferred tax expense
Deferred tax expense (benefit) relating to the origination and reversal of temporary differences		13,889			92,232
Deferred tax charged direct to equity		27,933			(520	)
Sub-total		41,822			91,712
Income tax expense		320,933			153,334

(2) Details of income tax expense can be reconciled to net income before income tax expense as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Net income before income tax expense		1,429,948			911,121
Tax calculated at statutory tax rate (*)		345,585			220,029
Adjustments
Effect of income that is exempt from taxation		(32,683	)		(38,662	)
Effect of expense that is not deductible in determining taxable profit		9,624			10,553
Adjustments recognized in the current period in relation to the current tax of prior periods		(4,919	)		(22,043	)
Others		3,326			(16,543	)
Sub-total		(24,652	)		(66,695	)
Income tax expense		320,933			153,334
Effective tax rate		22.4	%		16.8	%

(*) The corporate tax rate is 11 % up to 200 million Won in tax basis, 22 % over 200 million Won to 20 billion Won and 24.2 % over 20 billion Won.

(3) Details of accumulated deferred tax charged direct to equity are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Loss on valuation of AFS securities		(107,454	)		(113,161	)
Share of other comprehensive income of joint ventures and associates		419			950
Foreign currency translation of foreign operations		36,176			16,930
Remeasurements gain related to defined benefit plan		54,686			51,661
Gain on valuation of cash flow hedge		487			—
Total		(15,686	)		(43,620	)

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43. EARNINGS PER SHARE (“EPS”)

Basic EPS is calculated by dividing net income by weighted average number of common shares outstanding (Unit: Korean Won in millions except for EPS and number of shares):

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
Net income attributable to common shareholders		460,888			1,098,361			306,974			750,266
Dividends to hybrid securities		(41,557	)		(90,823	)		(49,751	)		(100,236	)
Net income attributable to common shareholders		419,331			1,007,538			257,223			650,030
Weighted average number of common shares outstanding		673 shares in million			673 shares in million			673 shares in million			673 shares in million
Basic earnings per share		623			1,497			382			966

Diluted EPS is equal to basic EPS because there is no dilution effect for the six months ended June 30, 2017 and 2016.

44. CONTINGENT LIABILITIES AND COMMITMENTS

(1) Details of guarantees are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Confirmed guarantees
Guarantee for loans		91,649		79,566
Acceptances		410,732		504,354
Guarantees in acceptances of imported goods		107,065		97,606
Other confirmed guarantees		6,701,772		7,588,661
Total		7,311,218		8,270,187
Unconfirmed guarantees
Local letter of credit		403,660		397,588
Letter of credit		3,510,846		3,844,345
Other unconfirmed guarantees		584,120		859,768
Total		4,498,626		5,101,701
Commercial paper purchase commitments and others		1,350,566		1,389,896

(2) Details of loan commitments and others are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Loan commitments		81,601,017		83,795,496
Other commitments		5,619,110		4,840,593

(3) Litigation case

1) The Group had filed lawsuits as follows (Unit: Korean Won in millions except for number of cases):

	June 30, 2017				December 31, 2016
	As plaintiff		As defendant		As plaintiff		As defendant
Number of cases		75 cases		176 cases		88 cases		175 cases
Amount of litigation		440,298		337,925		308,848		246,465
Provisions for litigations				5,927				5,946

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(4) Other

The Group operates Korean Won currency settlement service as for commercial trade settlements between Korea and Iran. In accordance with the submission request of information from U.S. prosecutors (U.S. Federal Prosecutors and Prosecutors of the New York State), the Group is currently performing its own internal investigation to confirm if the Group has met the requirements on sanction of U.S. Government in respect of its service operation. As of June 30, 2017, the Group believes that it cannot make reasonable estimation due to possible results from such investigation.

45. RELATED PARTY TRANSACTIONS

Related parties of the Group as of June 30, 2017 and its assets and liabilities recognized as of June 30, 2017 and December 31, 2016 and major transactions with related parties for the six months ended June 30, 2017 and 2016 are as follows:

(1) Related parties

Related parties

Associates

Kumho Tires Co., Inc., Woori Blackstone Korea Opportunity Private Equity Fund No.1, Woori Service Networks Co., Ltd., Korea Credit Bureau Co., Ltd., Korea Finance Security Co., Ltd., Chin Hung International Inc., Poonglim Industrial Co., Ltd., STX Engine Co., Ltd., Samho International Co., Ltd., STX Corporation, Woori Columbus 1st Private Equity Fund, 2016KIF-IMM Woori Bank Technology Venture Fund, K BANK Co.,Ltd., and Others (Dongwoo C & C Co., Ltd. and other 18 associates)

(2) Assets and liabilities from transactions with related parties are as follows (Unit: Korean Won in millions):

Related party		A title of account	June 30, 2017			December 31, 2016
Corporation that have significant influence over the group	KDIC (*1)	Loans		—			9
		Other assets		—			270,041
		Deposits due to customers		—			1,894,631
		Other liabilities		—			15,568
Associates	Kumho Tires Co., Ltd.	Loans		226,031			299,523
		Allowance for credit loss		(1,757	)		(715	)
		Deposits due to customers		12,742			45,957
		Other liabilities		353			50
	Woori Blackstone Korea Opportunity Private Equity Fund No.1	Other assets		15			34
		Other liabilities		306			306
	Woori Service Networks Co., Ltd.	Loans		29			29
		Deposits due to customers		1,832			2,572
		Other liabilities		361			393
	Korea Credit Bureau Co., Ltd.	Loans		5			2
		Deposits due to customers		5,218			5,069
		Other liabilities		29			40
	Korea Finance Security Co., Ltd.	Loans		36			55
		Deposits due to customers		2,320			2,801
		Other liabilities		2			6
	Chin Hung International Inc.	Loans		148			4,320
		Allowance for credit loss		(17	)		(4,287	)
		Deposits due to customers		56,765			14,047
		Other liabilities		19			279

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Related party		A title of account	June 30, 2017			December 31, 2016
Associates	Poonglim Industrial Co., Ltd.	Deposits due to customers		4			283
	STX Engine Co., Ltd.	Loans		104,990			107,974
		Allowance for credit loss		(87,696	)		(89,531	)
		Deposits due to customers		19,559			13,260
		Other liabilities		424			588
	Samho International Co., Ltd.	Loans		35,059			37,327
		Allowance for credit loss		(601	)		(717	)
		Deposits due to customers		61,179			82,917
		Other liabilities		155			216
	STX Corporation	Loans		51,489			144,035
		Allowance for credit loss		(33,136	)		(92,643	)
		Deposits due to customers		13,938			14,412
		Other liabilities		68			90
	K BANK Co.,Ltd.	Loans		273			—
		Other assets		—			325
	Others (*2)	Loans		242			619
		Allowance for credit loss		(242	)		(253	)
		Other assets		2			8
		Deposits due to customers		2,691			4,460
		Other liabilities		69			60

(*1) As its ownership interest in the Group is lower than 20% as of June 30, 2017, it has been excluded from the corporation that have significant influence over the Group.

(*2) Others include Saman Corporation, Kyesan Engineering Co., Ltd., Hyunwoo International Co., Ltd.,DAEA SNC Co. Ltd. and others.

(3) Gain or loss from transactions with related parties are as follows (Unit: Korean Won in millions):

			For the six months ended June 30
Related party		A title of account	2017		2016
Corporation that has significant influence over the group	KDIC(*1)	Interest income		—		6,721
		Interest expenses		15,331		9,123
Associates	Kumho Tires Co., Ltd.	Interest income		1,501		1,341
		Fees income		6		6
		Interest expenses		—		37
		Impairment losses due to credit loss		1,042		64
	Woori Blackstone Korea Opportunity No.1 Private Equity Fund	Fees income		29		94
	Woori Service Networks Co., Ltd.	Other income		15		15
		Interest expenses		13		27
		Fees expenses		335		443
		Other expenses		249		111
	Korea Credit Bureau Co., Ltd.	Interest expenses		38		78
		Fees expenses		1,023		875

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			For the six months ended June 30
Related party		A title of account	2016			2015
Associates	Korea Finance Security Co., Ltd.	Interest expenses		5			5
		Fees expenses		—			53
	Chin Hung International Inc.	Interest income		53			139
		Fees income		1			1
		Interest expenses		13			12
		Reversal of impairment losses due to credit loss		(4,270	)		(1,039	)
	Poonglim Industrial Co., Ltd.	Interest expenses		—			2
		Reversal of impairment losses due to credit loss		—			(37	)
	STX Engine Co., Ltd.	Interest income		672			674
		Fees income		28			20
		Interest expenses		72			30
		Impairment losses due to credit loss (reversal)		(1,835	)		1,254
	Samho International Co., Ltd.	Interest income		364			457
		Fees income		6			5
		Interest expenses		214			250
		Reversal of impairment losses due to credit loss		(116	)		(482	)
	Force TEC Co., Ltd. (*1)	Interest income		—			123
		Impairment losses due to credit loss		—			22,620
	STX Corporation	Interest income		219			562
		Fees income		58			60
		Interest expenses		4			4
		Impairment losses due to credit loss (reversal)		(59,507	)		73,387
	Osung LST Co., Ltd. (*2)	Interest income		—			113
		Interest expenses		—			1
	Woori Columbus 1st Private Equity Fund	Fees income		—			272
	K BANK Co., Ltd. (*3)	Fees income		396			—
		Other income		1,051			—
	Others (*4)	Interest expenses		5			7
		Reversal of impairment losses due to credit loss		(10	)		(938	)

(*1) As its ownership interest in the Group is lower than 20% as of June 30, 2017, it has been excluded from the corporation that have significant influence over the Group.

(*2) Due to disposition during the year ended December 31, 2016, the entity is not in scope for associate.

(*3) Due to capital contribution during the year ended December 31, 2016, the entity has been included in the investment in associates.

(*4) Others include Saman Corporation, Kyesan Engineering Co., Ltd., Hyunwoo International Co., Ltd.DAEA SNC Co. Ltd. and others.

- 78 -

(4) Guarantees provided to the related parties are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
KDIC (*)		—		1,500,000	Loan commitment
Kumho Tires Co., Inc.		8,379		24,187	Letter of credit and others
		191,106		126,435	Loan commitment
Korea Finance Security Co., Ltd.		224		205	Loan commitment
Korea Credit Bureau Co., Ltd.		30		33	Loan commitment
Woori Service Networks Co., Ltd.		171		171	Loan commitment
Chin Hung International Inc.		32,151		40,904	Loan commitment
STX Engine Co., Ltd.		67,922		63,103	Letter of credit and others
		413		685	Loan commitment
SamHo Co., Ltd.		32,852		30,083	Loan commitment
STX corporation		22,717		24,316	Letter of credit and others
		—		71	Loan commitment

(*) As its ownership interest in the Group is lower than 20% as of June 30, 2017, it has been excluded from the corporation that have significant influence over the Group.

For the guarantee provided to the related parties, the Group recognized provisions for guarantees amounting to 73,025 million Won and 70,587 million Won, as of June 30, 2017 and December 31, 2016, respectively.

(5) Compensation for key management is as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017		2016 (*)
Short term benefits		6,524		4,281
Severance payments		280		186
Total		6,804		4,467

(*) As the scope of the compensation for key management disclosure has changed, the comparative amounts are restated.

Key management includes registered executives and non-registered executives. Outstanding assets and liabilities from transactions with key management amount to 1,261 million Won and 5,816 million Won, respectively, as of June 30, 2017. With respect to the assets, the Group has not recognized any allowance, nor provision.

- 79 -

46. TRUST ACCOUNTS

(1) Trust accounts of the Group are as follows (Unit: Korean Won in millions):

	Total assets				Operating income
	June 30, 2017		December 31, 2016		2017				2016
					Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Trust accounts		44,170,992		38,807,666		213,300		416,316		236,978		426,189

(2) Receivables and payables from the transactions between the Group and trust accounts are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Receivables
Trust fees receivables		25,769		23,667
Payables
Deposits due to customers		1,063,675		1,919,324
Borrowings from trust accounts		2,960,810		2,687,776
Sub-total		4,204,485		4,607,100

(3) Significant transactions between the Group and trust accounts are as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Revenue
Trust fees		30,472		65,207		19,069		33,277
Expense
Interest expenses on deposits due to customers		5,257		12,400		11,249		24,539
Interest expenses on borrowings from trust accounts		7,569		15,686		12,204		25,320
Sub-total		12,826		28,086		23,453		49,859

(4) Principal guaranteed trusts and principal and fixed rate of return guaranteed trusts

1) As of June 30, 2017 and December 31, 2016, the carrying of principal guaranteed trusts and principal and fixed rate of return guaranteed trusts are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Principal guaranteed trusts
Old-age pension trusts		4,313		4,513
Personal pension trusts		529,455		532,959
Pension trusts		766,951		741,759
Retirement trusts		51,612		53,773
New personal pension trusts		8,337		8,536
New old-age pension trusts		2,671		2,919
Sub-total		1,363,339		1,344,459
Principal and fixed rate of return guaranteed trusts
Development trusts		19		19
Unspecified money trusts		793		787
Sub-total		812		806
Total		1,364,151		1,345,265

- 80 -

2) As of June 30, 2017 and December 31, 2016, the amounts that the Group has to pay by the capital guaranteed contract or the operating results of the principal and return guaranteed trusts are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Liabilities for the account (subsidy for trust account adjustment)		16		30

47. PROMOTING PRIVATIZATION PLAN

Pursuant to the privatization plan of Woori Finance Holdings Co., Ltd., which was decided at the Public Fund Oversight Committee (the “PFOC”) on June 26, 2013, the Group has disposed of its subsidiaries. Kwangju Bank and Kyongnam Bank were demerged as of May 1, 2014, and Woori Investment & Securities, Woori Aviva Life Insurance, Woori Savings Bank, Woori Asset Management, Woori Financial and Woori F&I were disposed of in due order during the period from March 2014 to June 2014.

With respect to the privatization of Woori Bank, the PFOC announced a plan on the merger between Woori Finance Holdings Co., Ltd (“Holding Company”) and Woori Bank and on the disposal of controlling and non-controlling interests (30% of ownership and 26.97% of ownership, respectively) of Woori Bank after newly listing its shares on the stock exchange. Pursuant to the plan, the Group merged with the Holding Company as of November 1, 2014, and was listed on Korea Stock Exchange on November 19, 2014.

On November 28, 2014, Korea Deposit Insurance Corporation (“KDIC”) commenced the bidding to dispose of controlling and non-controlling interests of the Group. With the successful bidding for non-controlling interests only, KDIC’s ownership of the Group decreased from 56.97% to 51.04%. Further, KDIC’s ownership of the Group was changed to 51.06% due to retirement of treasury stocks on October 2015.

On July 21, 2015, the PFOC, a deliberative body in charge of privatizing Woori Bank, held a meeting to discuss the means to promote the privatization plan. PFOC thereby announced a plan to maximize the retrieval of public fund that was initially invested and to sell the controlling shares to the investors (“oligopolistic shareholders”), in an effort to promote the early privatization and development of financial industry.

On October 2, 2015, Financial Services Commission (“FSC”) announced the amendment on normalization of business memorandum of understanding (“MOU”) in an effort to promote corporate value through enhanced managerial autonomy of the Group. FSC subsequently made amendments to the Enforcement Decree of the Special Act on the Management of Public Funds on March 29, 2016.

In addition, on August 22, 2016, PFOC announced a plan to sell about 30% shares out of 51.06% shares held by KDIC to multiple investors, ranging from 4 to 8% ownership each. Pursuant to the plan, the KDIC commenced the bidding to dispose of its shares by putting up a public notice of sale on August 24, 2016. As of September 23, 2016, KDIC received letters of intent from eighteen potential investors, with an intent to hold shares ranging from 82% to 119%. As a result of the bid, eight potential investors submitted bid letters for total of 33.7% shares. On November 13, PFOC announced that seven selected buyers acquired total of 29.69% shares of the Group. Upon successful privatization of the Bank, PFOC, in an effort to ensure autonomous management of the private sector (i.e., oligopolistic shareholders), released the bank from the MOU on December 16, 2016.

By the way, for the six months ended June 30, 2017, as 2.41% of call options was exercised out of total 2.97% call options granted to the selected buyers when selling the non-controlling interest, KDIC’s remaining ownership interest became 18.96%. In consideration with the benefits from privatization and the retrieval of public fund, the government will hold a discussion with PFOC on its plan to sell the remaining shares of the Bank held by KDIC in the near future.

- 81 -

48. TERMINATION OF CONTRACT AND FOLLOW-UP AGREEMENT ON THE IMPLEMENTATION OF A MANAGEMENT PLAN

Upon successful privatization, the MOU on management normalization between the Group and KDIC on December 16, 2016 was terminated. The same parties instead signed a written agreement on disposal of shares of the Group for the purpose of the appropriate public fund management. According to the agreement, KDIC has the right to appoint one personnel from KDIC as a non-executive member of the board of directors of the Group, as long as KDIC holds over 10% voting shares, or is the largest shareholder (disregarding National Pension Service) holding more than 4% but less than 10% shares. Also, KDIC may claim inspection of the information related to the minutes of the board of directors and agenda that may have significant impact on the residual shares, as long as KDIC holds over 4% shares of the Group.

49. EVENTS AFTER REPORTING PERIODS.

The Group decided to execute a voluntary retirement plan during the six months ended December 31, 2017 through the agreement between labor and management. According to this plan, the related expense will be expected to incur during three months ended September 30, 2017.

- 82 -

EX-99.2

Exhibit 99.2

WOORI BANK

SEPARATE INTERIM FINANCIAL STATEMENTS

AS OF JUNE 30, 2017 AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

ATTACHMENT: INDEPENDENT ACCOUNTANTS’ REVIEW REPORT

WOORI BANK

  Deloitte Anjin LLC 9F., One IFC, 10, Gukjegeumyung-ro Youngdeungpo-gu, Seoul 07326, Korea   Tel: +82 (2) 6676 1000 Fax: +82 (2) 6674 2114 www.deloitteanjin.co.kr

INDEPENDENT ACCOUNTANTS’ REVIEW REPORT

English Translation of a Report Originally Issued in Korean on August 11, 2017

To the Shareholders and the Board of Directors of

Woori Bank

Report on the Separate Interim Financial Statements

We have reviewed the accompanying separate interim financial statements of Woori Bank (the “Bank”). The financial statements consist of the separate statements of financial position as of June 30, 2017, the related separate interim statements of comprehensive income for the three and six months ended June 30, 2017 and 2016, respectively, the related separate statements of changes in shareholders’ equity and cash flows, all expressed in Korean Won, for the six months ended June 30, 2017 and 2016, respectively, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Separate Interim Financial Statements

The Bank’s management is responsible for the preparation and fair presentation of the accompanying separate interim financial statements in accordance with Korean International Financial Reporting Standards (“K-IFRS”) and for such internal control as management determines is necessary to enable the preparation of separate interim financial statements that are free from material misstatement, whether due to fraud or error.

Independent Accountants’ Responsibility

Our responsibility is to express a conclusion on the accompanying separate interim financial statements based on our reviews.

We conducted our reviews in accordance with standards for review of separate interim financial statements in the Republic of Korea. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data, and this provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Review conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying separate interim financial statements of the Bank are not presented fairly, in all material respects, in accordance with K-IFRS 1034, Interim Financial Reporting.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/kr/about to learn more about our global network of member firms.

^© 2017. For information, contact Deloitte Anjin LLC

Others

We audited the separate statement of financial position as of December 31, 2016, and the related separate statements of comprehensive income, changes in shareholders’ equity and cash flows for the year ended December 31, 2016 (not presented in the accompanying separate interim financial statements), all expressed in Korean Won, in accordance with auditing standards generally accepted in the Republic of Korea. We expressed an unqualified opinion in our independent auditors’ report dated on March 3, 2017. The separate statement of financial position as of December 31, 2016 presented as a comparative purpose in the accompanying interim financial statements does not differ, in all material respects, from the audited separate statement of financial position as of December 31, 2016.

Accounting principles and review standards and their application in practice vary among countries. The accompanying separate interim 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 review such financial statements may differ from those generally accepted and applied in other countries. Accordingly, this report and the accompanying separate interim financial statements are for use by those knowledgeable about Korean accounting procedures and review standards and their application in practice.

August 11, 2017

Notice to Readers

This report is effective as of August 11, 2017, the independent accountants’ review report date. Certain subsequent events or circumstances may have occurred between the review report date and the time the report is read. Such events or circumstances could significantly affect the separate interim financial statements and may result in modifications to the independent accountants’ review report.

WOORI BANK

SEPARATE INTERIM FINANCIAL STATEMENTS

AS OF JUNE 30, 2017 AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

The accompanying separate interim financial statements including all footnote disclosures were prepared by and are the responsibility of the management of the Bank.

Kwang Goo Lee

President and Chief Executive Officer

Main Office Address:	(Road Name Address)	51, Sogong-ro, Jung-gu, Seoul
	(Phone Number)	02-2002-3000

WOORI BANK

SEPARATE INTERIM STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2017 AND DECEMBER 31, 2016

	June 30, 2017		December 31, 2016
	(Korean Won in millions)
ASSETS
Cash and cash equivalents (Notes 6 and 45)		6,095,746		6,104,029
Financial assets at fair value through profit or loss (Notes 4, 7, 11, 12, 18 and 26)		3,007,323		4,076,872
Available-for-sale financial assets (Notes 4, 8, 11, 12 and 18)		18,149,919		18,105,862
Held-to-maturity financial assets (Notes 4, 9, 11, 12 and 18)		15,059,372		13,792,266
Loans and receivables (Notes 4, 10, 11, 12, 18 and 45)		247,306,721		241,508,048
Investments in subsidiaries and associates (Note 13)		3,911,552		3,779,169
Investment properties (Note 14)		344,650		348,393
Premises and equipment (Note 15)		2,344,746		2,342,280
Intangible assets (Note 16)		275,842		242,230
Assets held for sale (Note 17)		7,577		2,342
Deferred tax assets		136,793		162,211
Derivative assets (Notes 4,11, 12 and 26)		140,143		140,577
Net defined benefit assets (Note 24)		9,469		70,938
Other assets (Notes 19 and 45)		96,367		96,926
Total assets		296,886,220		290,772,143
LIABILITIES
Financial liabilities at fair value through profit or loss (Notes 4, 11, 12, 20 and 26)		2,507,374		3,793,479
Deposits due to customers (Notes 4, 11, 21 and 45)		216,321,706		211,382,380
Borrowings (Notes 4, 11, 12 and 22)		14,248,618		16,060,821
Debentures (Notes 4, 11 and 22)		19,910,124		18,166,057
Provisions (Notes 23 and 44)		338,990		380,473
Current tax liabilities		190,454		148,672
Derivative liabilities (Notes 4, 11,12 and 26)		8,587		7,221
Other financial liabilities (Notes 4, 11, 12, 25 and 45)		23,543,680		20,827,284
Other liabilities (Notes 25 and 45)		124,720		153,238
Total liabilities		277,194,253		270,919,625

(Continued)

WOORI BANK

SEPARATE INTERIM STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2017 AND DECEMBER 31, 2016 (CONTINUED)

	June 30, 2017			December 31, 2016
	(Korean Won in millions)
EQUITY
Capital stock (Note 28)		3,381,392			3,381,392
Hybrid securities (Note 29)		3,017,888			3,574,896
Capital surplus (Note 28)		269,533			269,533
Other equity (Note 30)		(109,296	)		138,542
Retained earnings (Notes 31 and 32)
(Regulatory reserve for credit loss as of June 30, 2017 and December 31, 2016 is 2,017,342 million Won and 1,880,447 million Won, respectively)
Regulatory reserve for credit loss to be reserved(reversed) as of June 30, 2017 and December 31, 2016 is (-)10,806 million Won and 136,895 million Won, respectively
Planned provision (reversal) of regulatory reserve for credit loss as of June 30, 2017 and December 31, 2016 is (-)10,806 million Won and 136,895 million Won, respectively)		13,132,450			12,488,155
Total equity		19,691,967			19,852,518
Total liabilities and equity		296,886,220			290,772,143

See accompanying notes

WOORI BANK

SEPARATE INTERIM STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS AND THE SIX MONTHS ENDED

JUNE 30, 2017 AND 2016

	Korean Won
	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
	(In millions, except for income per share data)
Interest income		1,812,779			3,600,783			1,860,745			3,735,659
Interest expense		734,605			1,469,125			802,156			1,619,520
Net interest income (Notes 34 and 45)		1,078,174			2,131,658			1,058,589			2,116,139
Fees and commissions income		257,606			529,177			248,397			497,511
Fees and commissions expense		36,423			63,327			39,748			75,189
Net fees and commissions income (Notes 35 and 45)		221,183			465,850			208,649			422,322
Dividend income (Note 36)		31,229			61,736			103,431			159,589
Net gain on financial instruments at fair value through profit or loss (Note 37)		14,430			(137,593	)		100,640			43,773
Net gain on available-for-sale financial assets (Note 38)		77,021			90,238			19,427			31,156
Impairment losses due to credit loss (Notes 39 and 45)		(145,750	)		(179,904	)		(197,682	)		(324,642	)
General and administrative expenses (Notes 40 and 45)		(691,823	)		(1,350,512	)		(790,768	)		(1,475,960	)
Other net operating income (expenses) (Notes 40 and 45)		(68,990	)		216,867			(152,685	)		(176,924	)
Operating income		515,474			1,298,340			349,601			795,453
Share of losses of subsidiaries and associates (Note 13)		(18,563	)		(37,547	)		(6,716	)		(6,853	)
Other net non-operating income (expenses)		22,164			36,671			(4,184	)		18,808
Non-operating income (loss) (Note 41)		3,601			(876	)		(10,900	)		11,955
Net income before income tax expense		519,075			1,297,464			338,701			807,408
Income tax expense (Note 42)		116,552			293,038			49,933			136,167
Net income
(Net income after the provision of regulatory reserve for credit loss for the six months ended June 30, 2017 and 2016 is 1,015,232 million Won and 689,110 million Won, respectively, and net income after the provision of regulatory reserve for credit loss for the three months ended June 30, 2017 and 2016 is 414,833 million Won and 308,108 million Won, respectively) (Note 32)		402,523			1,004,426			288,768			671,241

(Continued)

WOORI BANK

SEPARATE INTERIM STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS AND THE SIX MONTHS ENDED

JUNE 30, 2017 AND 2016 (CONTINUED)

	Korean Won
	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
	(In millions, except for income per share data)
Remeasurement gain (loss) related to defined benefit plan		16,563			(8,949	)		(11,513	)		(44,727	)
Items that will not be reclassified to profit or loss		16,563			(8,949	)		(11,513	)		(44,727	)
Gain (loss) on valuation of available-for-sale financial assets		(38,433	)		(16,218	)		(50,357	)		42,649
Gain (loss) on foreign currency translation of foreign operations		6,761			(14,513	)		2,628			(192	)
Items that may be reclassified to profit or loss		(31,672	)		(30,731	)		(47,729	)		42,457
Other comprehensive loss, net of tax		(15,109	)		(39,680	)		(59,242	)		(2,270	)
Total comprehensive income		387,414			964,746			229,526			668,971
Net income per share (in Korean Won) (Note 43)
Basic and diluted earnings per common share		536			1,358			355			848

See accompanying notes

WOORI BANK

SEPARATE INTERIM STATEMENTS OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016

	Capital stock		Hybrid securities			Capital surplus		Other equity			Retained earnings			Total
	(Korean Won in millions)
January 1, 2016		3,381,392		3,334,002			269,533		106,016			11,798,375			18,889,318
Net income		—		—			—		—			671,241			671,241
Dividends on common stock		—		—			—		—			(168,317	)		(168,317	)
Gain on valuation of available-for-sale financial assets		—		—			—		42,649			—			42,649
Loss on foreign currency translation of foreign operations		—		—			—		(192	)		—			(192	)
Remeasurement loss related to Defined benefit plan		—		—			—		(44,727	)		—			(44,727	)
Dividends to hybrid securities		—		—			—		—			(100,236	)		(100,236	)
June 30, 2016		3,381,392		3,334,002			269,533		103,746			12,201,063			19,289,736
January 1, 2017		3,381,392		3,574,896			269,533		138,542			12,488,155			19,852,518
Net income		—		—			—		—			1,004,426			1,004,426
Dividends on common stock		—		—			—		—			(269,308	)		(269,308	)
Loss on valuation of available-for-sale financial assets		—		—			—		(16,218	)		—			(16,218	)
Loss on foreign currency translation of foreign operations		—		—			—		(14,513	)		—			(14,513	)
Remeasurement oss related to Defined benefit plan		—		—			—		(8,949	)		—			(8,949	)
Dividends to hybrid securities		—		—			—		—			(90,823	)		(90,823	)
Issuance of hybrid securities		—		559,565			—		—			—			559,565
Redemption of hybrid securities		—		(1,116,573	)		—		(208,158	)		—			(1,324,731	)
June 30, 2017		3,381,392		3,017,888			269,533		(109,296	)		13,132,450			19,691,967

See accompanying notes

WOORI BANK

SEPARATE INTERIM STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016

	For the six months ended June 30
	2017			2016
	(Korean Won in millions)
Cash flows from operating activities:
Net income		1,004,426			671,241
Adjustment to net income:
Income tax expense		293,038			136,167
Interest income		(3,600,783	)		(3,735,659	)
Interest expense		1,469,125			1,619,520
Dividend income		(80,000	)		(180,656	)
		(1,918,620	)		(2,160,628	)
Additions of expenses not involving cash outflows:
Impairment losses due to credit loss		179,904			324,642
Impairment loss on investments in subsidiaries and associates		37,547			6,853
Loss on transaction of derivatives / valuation of derivatives (hedging)		11,811			19,012
Loss on fair value hedged items		15,846			118,700
Provision for guarantee and loan commitment and others		6,800			3,035
Retirement benefits		65,868			70,159
Depreciation and amortization of premises and equipment, intangible assets and investment properties		84,527			90,075
Loss on disposal of premises and equipment and other assets		437			5,843
Impairment loss on premises and equipment and other assets		44			139
		402,784			638,458
Deductions of revenues not involving cash inflows:
Gain on valuation of financial instruments at fair value through profit or loss		14,996			189,238
Gain on available-for-sale financial assets		90,238			31,156
Gain on transaction of derivatives / valuation of derivatives (hedging)		11,354			111,505
Gain on fair value hedged items		11,860			18,113
Reversal of provisions and others		1,219			619
Gain on disposal of investment in subsidiaries and associates		8,227			3,679
Gain on disposal of premises and equipment and other assets		1,609			67
Reversal of impairment loss on premises and equipment and other assets		32			443
		139,535			354,820

(Continued)

WOORI BANK

SEPARATE INTERIM STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016 (CONTINUED)

	For the six months ended June 30
	2017			2016
	(Korean Won in millions)
Changes in operating assets and liabilities:
Financial instruments at fair value through profit or loss		(201,559	)		(23,865	)
Loans and receivables		(5,931,291	)		(14,889,835	)
Other assets		61,129			(2,826	)
Deposits due to customers		4,941,718			8,963,522
Provision for guarantee, loan commitment and others		(4,288	)		(70,645	)
Net defined benefit assets		(16,163	)		(157,845	)
Other financial liabilities		2,840,767			6,119,452
Other liabilities		(27,453	)		(23,470	)
		1,662,860			(85,512	)
Cash received from operating activities:
Interest income received		3,674,796			3,733,374
Interest expense paid		(1,574,740	)		(1,638,879	)
Dividend received		77,629			180,656
Income tax paid		(214,501	)		(102,019	)
Net cash provided by operating activities		2,975,099			881,871
Cash flows from investing activities:
Cash in-flows from investing activities:
Disposal of available-for-sale financial assets		11,135,794			9,730,481
Redemption of held-to-maturity financial assets		4,584,130			3,863,817
Decrease in investments in subsidiaries and associates		19,099			51,385
Disposal of premises and equipment		843			—
Disposal of intangible assets		383			200
Disposal of assets held for sale		5,954			8,082
		15,746,203			13,653,965
Cash out-flows from investing activities:
Acquisition of available-for-sale financial assets		11,157,104			10,967,993
Acquisition of held-to-maturity financial assets		5,912,247			4,042,104
Increase in investments in subsidiaries and associates		138,695			29,799
Acquisition of investments in properties		795			—
Acquisition of premises and equipment		49,316			39,246
Acquisition of intangible assets		81,081			33,631
		17,339,238			15,112,773
Net cash used in investing activities		(1,593,035	)		(1,458,808	)

(Continued)

WOORI BANK

SEPARATE INTERIM STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016 (CONTINUED)

	For the six months ended June 30
	2017			2016
	(Korean Won in millions)
Cash flows from financing activities:
Cash in-flows from financing activities:
Increase in borrowings		4,077,415			3,639,556
Issuance of debentures		5,100,000			4,735,270
Issuance of hybrid securities		559,565			—
		9,736,980			8,374,826
Cash out-flows from financing activities:
Repayment of borrowings		5,889,920			5,281,897
Repayment of debentures		3,366,476			3,356,208
Dividends paid		269,308			168,317
Redemption of hybrid securities		1,323,400			—
Dividends paid on hybrid securities		100,627			100,583
		10,949,731			8,907,005
Net cash used in financing activities		(1,212,751	)		(532,179	)
Net increase(decrease) in cash and cash equivalents		169,313			(1,109,116	)
Cash and cash equivalents, beginning of the period		6,104,029			5,440,326
Effects of exchange rate changes on cash and cash equivalents		(177,596	)		55,465
Cash and cash equivalents, end of the period (Note 6)		6,095,746			4,386,675

See accompanying notes

WOORI BANK

NOTES TO SEPARATE INTERIM FINANCIAL STATEMENTS

AS OF JUNE 30, 2017 AND FOR THE THREE MONTHS AND THE SIX MONTHS

ENDED JUNE 30, 2017 AND 2016

1. GENERAL

(1) Woori Bank

Woori Bank (hereinafter referred to the “Bank”) was established in 1899 and is engaged in the commercial banking business under the Banking Act, trust business and foreign exchange business under the Financial Investment Services and Capital Market Act.

Previously, Woori Finance Holdings Co., Ltd., the former holding company of Woori Financial Group, established on March 27, 2001 held a 100% ownership of the Bank. Effective November 1, 2014, Woori Finance Holdings Co., Ltd. completed its merger (the “Merger”) with and into Woori Bank. Accordingly, the shares of the Bank, 597 million shares, prior to the merger, was reduced to nil in accordance with capital reduction procedure, and then, in accordance with the merger ratio, the Bank newly issued 676 million shares. As a result, as of June 30, 2017, the common stock of the Bank amounts to 3,381,392 million Won.

During the year ended December 31, 2016, the Korea Deposit Insurance Corporation (“KDIC”), the majority shareholder of the Bank, sold its 187 million shares in the Bank in accordance with the contract of “Disposal of Woori Bank’s shares to Oligopolistic Shareholders”. In addition to the sale, during the six months ended June 30 2017, KDIC sold additional 30 million shares. As of June 30, 2017 and December 31, 2016, KDIC held 128 million shares and 158 million shares (18.96% and 23.37% ownership interest) respectively, of the Bank’s shares issued.

On June 24, 2002, Woori Finance Holdings Co., Ltd. listed its common shares on the Korea Exchange through public offering. In addition, on September 29, 2003, the holding company registered with the Securities and Exchange Commission in the United States of America and, on the same day, listed its American Depositary Shares on the New York Stock Exchange. As Woori Finance Holdings Co., Ltd. was merged into the Bank, the Bank, which is the existing company, succeeded such rights and obligations as a listed company on the Korea Exchange and the New York Stock Exchange.

As a result of such merger, the Bank incorporated Woori Card Co., Ltd., Woori Investment Bank Co., Ltd., Woori FIS Co., Ltd., Woori Private Equity Asset Management Co., Ltd., and Woori Finance Research Institute Co., Ltd. as its subsidiaries.

The head office of the Bank is located in 51, Sogong-ro, Jung Gu, Seoul, Korea. The Bank has 887 branches and offices in Korea, and 22 branches and offices overseas as of June 30, 2017.

2. SIGNIFICANT BASIS OF PREPARATION AND ACCOUNTING POLICIES

The Bank’s separate interim financial statements are prepared in accordance with Korean International Financial Reporting Standards (“K-IFRS”) 1034, Interim Financial Reporting and K-IFRS 1027, Separate Financial Statements. It is necessary to use the annual separate financial statements for the year ended December 31, 2016 for understanding of the accompanying interim financial statements.

Unless stated below, the accounting policies applied in preparing the accompanying separate interim financial statements have been applied consistently with the annual separate financial statements as of and for the year ended December 31, 2016.

(1) The Bank has newly adopted the following amendment to K-IFRS that affected the Bank’s accounting policies.

Amendments to K-IFRS 1007 – Statement of Cash Flows

The amendments require that changes in liabilities arising from financial activities are disclosed. The adoption of the amendments has no significant impact on the separate financial statements.

Amendments to K-IFRS 1012 – Income Taxes

The amendments clarify that unrealized losses on fixed-rate debt instruments measured at fair value and measured at cost for tax purposes give rise to a deductible temporary difference regardless of whether the holder expects to recover the carrying amount of the debt instrument by sale or by use and that the estimate of probable future taxable profit may include the recovery of some of assets for more than their carrying amount. When the Bank assesses whether there will be sufficient taxable profit, the Bank should compare the deductible temporary differences with future taxable profit that excludes tax deductions resulting from the reversal of those deductible temporary differences. The adoption of the amendments has no significant impact on the separate financial statements.

(2) The Bank has not applied the following K-IFRSs that have been issued but are not yet effective:

Enactments to K-IFRS 1109 – Financial Instruments

The enactments to K-IFRS 1109 contain the requirements for the classification and measurement of financial assets and financial liabilities based on a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets and based on the contractual terms that give rise on specified dates to cash flows, impairment methodology based on the expected credit losses, and broadened types of instruments that qualify as hedging instruments and the types of risk components of non-financial items that are eligible for hedge accounting and the change of the hedge effectiveness test. K-IFRS 1109 – Financial Instruments which was enacted on September 25, 2015 will be applied for annual periods beginning on or after 1 January 2018 or may be applied earlier. This standard will supersede K-IFRS 1039- Recognition and Measurement of Financial Instruments. By the way, the Bank will apply K-IFRS 1109 for annual periods beginning on or after 1 January 2018.

In addition, K-IFRS 1109 includes certain exceptions to the classification and measurement of financial assets and the retroactive restatement for classification and measurement of financial assets, impairment of financial assets; and hedge accounting.

The Bank evaluated the potential effect to the financial statement as of December 31, 2016 based on the present situation as of June 30, 2017 and the available information for evaluating the financial effect by initial adoption of K-IFRS 1109 preliminarily. The effect to the financial statement for the initial adopted fiscal year depends on not only the selection and decision of the accounting policies by this standard but also the financial instrument which the Bank holds for the period and economic situation and so on.

Meanwhile, the typical financial impacts per each major requirements under the Standard that are expected to be applicable are as follows:

Phase 1: Classification and measurement of financial assets and financial liabilities

All recognized financial assets that are currently within the scope of K-IFRS 1109 will be subsequently measured either at amortized cost, fair value through other comprehensive income (FVOCI), or fair value through profit or loss (FVTPL) under K-IFRS 1109 based on the business model and the nature of the contractual cash flows. And if the hybrid contracts contains the financial assets as the host contract, embedded derivative will not be separated, they will be classified as a whole. Specifically:

- 2 -

	The business model
The nature of contractual cash flows	Objective is to collect the contractual cash flows	Objective is achieved both by collecting the contractual cash flows and selling financial assets	Objective is to sell financial assets and so on
Contractual cash flows that are solely payment of principal and interest	Measured at amortized cost(*1)	Measure at FVOCI(*1)	Measure at FVTPL
Other than the above	Measure at FVTPL(*2)	Measure at FVTPL(*2)	Measure at FVTPL(*2)

(*1) For eliminating or reducing accounting discrepancies, an irrevocable election can be made at initial recognition to measure the investment at FVTPL.

(*2) For the equity securities which is traded for the purpose other than short-term trading, an irrevocable election ca be made at initial recognition to measure the investment at FVOCI.

Under K-IFRS 1109, as it is more strictly required to classify to the financial assets measured at amortized cost or fair value through OCI compared to under current K-IFRS 1039, when adopting the K-IFRS 1109, the volatility of net income can be expanded by the increasing portion of the financial asset measured at fair value through profit or loss. In accordance with K-IFRS 1109, the debt instruments only which occur the cash flow that is compose of solely the principal and the interest on the remaining principal at specified dates by the contract, whose purpose is to receive the cash flow under the contract can be measured at amortized cost. In accordance with K-IFRS 1039, the Bank shall measure loans and receivables amounting to 241,508,048 million Won and held-to-maturity financial assets amounting to 13,792,266 million Won as of December 31, 2016 as amortized cost, and among theses, 21,305 million Won of debt instruments, whose host contracts are debt securities and which separated the embedded derivatives from the hybrid contracts is included.

Based on the result of the preliminary effect evaluation, if K-IFRS 1109 adopt to the above financial assets as of December 31, 2016, as they almost occur the cash flow that is compose of solely the principal and the interest on the remaining principal at specified dates by the contract, whose purpose is to receive the cash flow under the contract, so they can be measure at amortized cost and there is no material effect to the financial statement. But, in the case of debt securities as the host contract of hybrid contract amounting to 21,305 million Won, as the cash flow under the contract is not composed of solely the principal and the interest on the remaining principal, it will be classified to the financial asset measured at FVTPL.

In accordance with K-IFRS 1109, the debt instruments only which occur the cash flow that is compose of solely the principal and the interest on the remaining principal at specified dates by the contract, whose purpose is to receive the cash flow under the contract and sell itself can be measure at FVOCI. In accordance with K-IFRS 1039, the Bank hold debt instruments as available-for-sale assets amounting to 11,572,916 million Won as of December 31, 2016.

Based on the result of the preliminary effect evaluation, if K-IFRS 1109 adopts to the above AFS financial assets as of December 31, 2016, they almost can be classified to financial assets measured at FVOCI. However, for beneficiary certificates amounting to 5,250,856 million Won, other equity investment amounting to 258,509 million Won and debt securities amounting to 111,706 million Won, as the cash flows of those are not composed of solely the principal and the interest on the remaining principal, they may be classified to financial assets measured at FVTPL. As a result, the volatility of net income can be expanded.

In accordance with K-IFRS 1109, an entity may make an irrevocable election at initial recognition for particular investments in equity instruments that would otherwise be measured at fair value through profit or loss to present subsequent changes in fair value in other comprehensive income, and the amounts should not be recycled to profit or loss. In accordance with K-IFRS 1039, the Bank holds equity investments that are classified as available-for-sale financial assets amounting to 993,517 million Won as of December 31, 2016.

The Bank are reviewing the designation of the financial asset measured at FVOCI among the available for sale equity securities.

- 3 -

One major change from K-IFRS 1039 relates to the presentation of changes in the fair value of a financial liability designated as at FVTPL attributable to changes in the credit risk of that liability. Under K-IFRS 1109, such changes are presented in other comprehensive income, unless the presentation of the effect of the change in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. In accordance with K-IFRS 1039, the Bank holds financial liabilities designated as at FVTPL 766,880 million Won as of December 31, 2016.

Based on the result of the preliminary effect evaluation, the variance amount due to the effect of accumulated credit risk variance among the total variance of financial liabilities designated as at FVTPL is 15,790 million Won.

Phase 2: Impairment methodology

The impairment model under K-IFRS 1109 reflects expected credit losses. Under the impairment approach in K-IFRS 1109, it is no longer necessary for a credit event to have occurred before credit losses are recognized. Instead, an entity always accounts for expected credit losses and changes in those expected credit losses. The amount of expected credit losses should be updated at each reporting date to reflect changes in credit risk since initial recognition.

In accordance with K-IFRS 1109, the allowance for doubtful receivables is measured at the amount equivalent to the expected 12-month credit loss or the lifetime expected credit loss, depending on the degree of deterioration of the credit risk after the initial recognition of the financial asset. So the credit loss can be earlier than under occurred loss model of current K-IFRS 1039.

	Stage 1	Stage 2	Stage 3
Stage	In case the exposure’s credit risk has not increased significantly since initial recognition(*)	In case the exposure has suffered a significant increase in credit risk	In case the exposure meets the accounting definition of credit impaired
Allowance recognition	The Bank recognizes only 12-month expected credit losses as a loss allowance	The Bank recognizes a loss allowance equal to lifetime expected credit losses

(*) it can be considered that the credit risk dose not increase significantly when the credit risk is low at the year-end.

Meanwhile, K-IFRS 1109 requires that, an entity shall only recognize the cumulative changes in lifetime expected credit losses since initial recognition as a loss allowance for purchased or originated credit-impaired financial assets.

Based on the result of the preliminary effect evaluation, the allowance for credit losses amounting to 2,087,903 as of December 31, 2016 will increase by 9% approximately. However, there will be no material change in the BIS Total Equity ratio compared to 15.29% as of December 31, 2016. The result of preliminary effect evaluation can be changed according to the additional available information for the future and the relevant decision making.

Phase 3: Hedge accounting

The general hedge accounting requirements of K-IFRS 1109 is relaxed compared to under hedge accounting mechanisms in K-IFRS 1039. Greater flexibility has been introduced to the types of transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify as hedging instruments and hedged items that are eligible for hedge accounting. In addition, the quantitative criteria (80-125%) for the highly hedge effectiveness is abolished and retrospective assessment of hedge effectiveness is no longer required. So it enable the company to focus on the risk management activities.

Enactments to K-IFRS 1115 – Revenue from Contracts with Customers

- 4 -

The core principle under K-IFRS 1115 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments introduces a 5-step approach to revenue recognition and measurement: 1) Identify the contract with a customer, 2) Identify the performance obligations in the contract, 3) Determine the transaction price, 4) Allocate the transaction price to the performance obligations in the contract, 5) Recognize revenue when (or as) the entity satisfies a performance obligation. This standard will supersede K-IFRS 1011—Construction Contracts, K-IFRS 1018- Revenue, K-IFRS 2113—Customer Loyalty Programmes, K-IFRS 2115-Agreements for the Construction of Real Estate, K-IFRS 2118—Transfers of Assets from Customers, and K-IFRS 2031-Revenue-Barter Transactions Involving Advertising Services. The amendments are effective for annual periods beginning on or after 1 January 2018.

Enactments to K-IFRS 2122 – Foreign Currency Transactions and Advance Consideration

The amendments clarify that the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income (or part of it) is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration. The amendments are effective for annual periods beginning on or after 1 January 2018.

Annual Improvements to K-IFRS 2014-2016 Cycle

The amendments clarify that in applying the equity method of accounting to an associate or a joint venture in accordance with K-IFRS 1028, an investor, such as venture capital investment vehicle, may apply fair value measurement selectively to each of its associate or joint venture, as well as certain amendments for K-IFRS 1101. The amendments are effective for annual periods beginning on or after 1 January 2018.

The Bank is in the process of evaluating the impact on the separate financial statements upon the adoption of new and revised K-IFRSs that have been issued but are not yet effective.

3. SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS

In the application of the Bank’s accounting policies to the interim financial statements, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results can differ from those estimates based on such definitions.

The significant judgments which management has made about the application of the Bank’s accounting policies and key sources of uncertainty in estimate do not differ from those used in preparing the separate financial statements for the year ended December 31, 2016.

- 5 -

4. RISK MANAGEMENT

The Bank’s operating activity is exposed to various financial risks; hence, the Bank is required to analyze and assess the level of complex risks, determine the level of risks to be accepted, or to manage the risks.

The Bank’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 risks and their impacts.

The Bank takes approaches to minimize risks and maximize profits by managing risks acceptable to the Bank and eliminating excessive risks of financial instruments. For these approaches, 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 Bank’s risk management policy. The Risk Management Committee of the Bank makes the decision on the risk management strategy such as the avoidance of concentration of risk and establishment of acceptable level of risks.

(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 Bank considers the probability of failure in performing the obligation of its counterparties, credit exposure to the counterparty, the related default risk and the rate of default loss. The Bank uses the credit rating model to assess the possibility of counterparty’s default risk; and when assessing the obligor’s credit grade, the Bank utilizes credit grades derived using statistical methods.

In order to manage credit risk limit, the Bank establishes the appropriate credit line per obligor, company or industry. It monitors obligor’s credit line, total exposures and loan portfolios when approving the loan.

The Bank mitigates credit risk resulting from the obligor’s credit condition by using financial and physical collateral, guarantees, netting agreements and credit derivatives. The Bank has adopted the entrapment method to mitigate its credit risk. Credit risk mitigation is reflected in qualifying financial collateral, trade receivables, guarantees, residential and commercial real estate and other collaterals. The Bank regularly performs a revaluation of collateral reflecting such credit risk mitigation.

2) Maximum exposure to credit risk

The Bank’s maximum exposure to credit risk refers to net book value of financial assets net of allowances, which shows the uncertainties of maximum changes of net value of financial assets attributable to a particular risk without considering collateral and other credit enhancements obtained. However, the maximum exposure is the fair value amount (recorded on the books) for derivatives, maximum contractual obligation for payment guarantees and loan commitment for loan contracts.

- 6 -

The maximum exposure to credit risk is as follows (Unit: Korean Won in millions):

		June 30, 2017		December 31, 2016
Loans and receivables	Korean treasury and government agencies		12,582,556		15,815,135
	Banks		24,567,726		17,826,219
	Corporates		83,136,599		83,529,250
	Consumers		127,019,840		124,337,444
	Sub-total		247,306,721		241,508,048
Financial assets at FVTPL	Gold banking assets		31,169		26,180
	Debt securities held for trading		1,332,252		1,140,928
	Derivative assets		1,636,056		2,880,543
	Sub-total		2,999,477		4,047,651
AFS financial assets	AFS debt securities		12,191,265		11,572,916
HTM financial assets	HTM debt securities		15,059,372		13,792,266
Derivative assets	Derivative assets (hedging)		140,143		140,577
Off-balance accounts	Guarantees		13,430,284		14,953,197
	Loan commitments		52,142,148		56,313,804
	Sub-total		65,572,432		71,267,001
	Total		343,269,410		342,328,459

a) Credit risk exposure by geographical areas

The following tables analyze credit risk exposure by geographical areas (Unit: Korean Won in millions):

	June 30, 2017
	Korea		USA		UK		Japan		Others (*)		Total
Loans and receivables		240,173,430		1,034,868		1,057,722		315,158		4,725,543		247,306,721
Financial assets at FVTPL		2,818,636		—		136,922		—		43,919		2,999,477
AFS debt securities		11,999,144		—		—		—		192,121		12,191,265
HTM securities		15,026,481		—		—		—		32,891		15,059,372
Derivative assets		70,495		—		69,648		—		—		140,143
Off-balance accounts		64,686,649		87,577		80,312		36,582		681,312		65,572,432
Total		334,774,835		1,122,445		1,344,604		351,740		5,675,786		343,269,410

	December 31, 2016
	Korea		USA		UK		Japan		Others (*)		Total
Loans and receivables		232,571,489		1,131,617		895,874		323,470		6,585,598		241,508,048
Financial assets at FVTPL		3,686,286		—		261,547		81		99,737		4,047,651
AFS debt securities		11,506,682		—		—		—		66,234		11,572,916
HTM securities		13,758,863		—		—		—		33,403		13,792,266
Derivative assets		74,166		—		66,342		—		69		140,577
Off-balance accounts		70,079,004		76,694		80,831		23,250		1,007,222		71,267,001
Total		331,676,490		1,208,311		1,304,594		346,801		7,792,263		342,328,459

(*) Others consist of financial assets in Vietnam, Panama and European countries and others.

- 7 -

b) Credit risk exposure by industries

The following tables analyze credit risk exposure by industries, which are service, manufacturing, finance and insurance, construction, individuals and others in accordance with the Korea Standard Industrial Classification Code (Unit: Korean Won in millions):

	June 30, 2017
	Service		Manufacturing		Finance and insurance		Construction		Individuals		Others		Total
Loans and receivables		45,216,852		33,269,219		38,342,640		3,215,760		121,081,411		6,180,839		247,306,721
Financial assets at FVTPL		57,380		104,600		2,585,647		12,801		3,066		235,983		2,999,477
AFS debt securities		880,645		—		7,068,467		93,349		—		4,148,804		12,191,265
HTM securities		1,142,854		—		9,648,480		242,968		—		4,025,070		15,059,372
Derivative assets		—		—		140,143		—		—		—		140,143
Off-balance accounts		15,013,748		23,817,976		8,523,454		3,500,405		10,054,010		4,662,839		65,572,432
Total		62,311,479		57,191,795		66,308,831		7,065,283		131,138,487		19,253,535		343,269,410

	December 31, 2016
	Service		Manufacturing		Finance and insurance		Construction		Individuals		Others		Total
Loans and receivables		44,851,563		34,465,760		34,641,443		3,177,968		118,412,745		5,958,569		241,508,048
Financial assets at FVTPL		59,472		356,305		3,331,108		23,812		993		275,961		4,047,651
AFS debt securities		1,069,084		—		8,128,709		53,232		—		2,321,891		11,572,916
HTM securities		1,673,971		—		8,192,802		251,599		—		3,673,894		13,792,266
Derivative assets		—		—		140,577		—		—		—		140,577
Off-balance accounts		15,949,042		27,446,354		9,065,002		4,358,268		9,759,416		4,688,919		71,267,001
Total		63,603,132		62,268,419		63,499,641		7,864,879		128,173,154		16,919,234		342,328,459

- 8 -

3) Credit risk of loans and receivables

The credit exposure of loans and receivables by customer and loan conditions are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Korean treasury and government agencies		Banks		Corporates
					General business		Small and medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Loans neither overdue nor impaired		12,585,776		24,583,869		45,465,338		31,821,156		5,437,456		82,723,950		126,235,112		246,128,707
Loans overdue but not impaired		—		—		7,898		40,502		—		48,400		661,033		709,433
Impaired loans		—		—		1,129,828		343,344		109,440		1,582,612		344,844		1,927,456
Total		12,585,776		24,583,869		46,603,064		32,205,002		5,546,896		84,354,962		127,240,989		248,765,596
Allowance for loan losses		3,220		16,143		816,445		366,576		35,342		1,218,363		221,149		1,458,875
Total, net		12,582,556		24,567,726		45,786,619		31,838,426		5,511,554		83,136,599		127,019,840		247,306,721

	December 31, 2016
	Korean treasury and government agencies		Banks		Corporates
					General business		Small and medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Loans neither overdue nor impaired		15,819,124		17,841,428		45,975,557		30,744,224		6,349,788		83,069,569		123,558,440		240,288,561
Loans overdue but not impaired		—		—		7,550		55,993		—		63,543		641,829		705,372
Impaired loans		—		—		1,362,414		425,354		176,715		1,964,483		343,593		2,308,076
Total		15,819,124		17,841,428		47,345,521		31,225,571		6,526,503		85,097,595		124,543,862		243,302,009
Allowance for loan losses		3,989		15,209		1,095,969		417,333		55,043		1,568,345		206,418		1,793,961
Total, net		15,815,135		17,826,219		46,249,552		30,808,238		6,471,460		83,529,250		124,337,444		241,508,048

a) Credit quality of loans and receivables

The Bank manages credit quality of its loans and receivables, (neither overdue nor impaired, net of allowance) through an internal rating system. Segregation of credit quality is as follows (Unit: Korean Won in millions):

	June 30, 2017
	Korean treasury and government agencies		Banks		Corporates
					General business		Small and medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Upper grade (*1)		12,582,556		24,567,726		38,691,817		20,053,289		4,425,402		63,170,508		123,302,785		223,623,575
Lower grade (*2)		—		—		6,481,306		11,578,562		984,242		19,044,110		2,858,034		21,902,144
Total		12,582,556		24,567,726		45,173,123		31,631,851		5,409,644		82,214,618		126,160,819		245,525,719
Value of collateral(*3)		—		416,873		18,264,997		25,752,041		3,117,518		47,134,556		105,465,114		153,016,543

- 9 -

	December 31, 2016
	Korean treasury and government agencies		Banks		Corporates
					General business		Small and medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Upper grade (*1)		15,815,135		17,826,219		38,405,298		17,985,120		4,546,178		60,936,596		120,252,187		214,830,137
Lower grade (*2)		—		—		7,203,345		12,550,168		1,763,658		21,517,171		3,232,521		24,749,692
Total		15,815,135		17,826,219		45,608,643		30,535,288		6,309,836		82,453,767		123,484,708		239,579,829
Value of collateral(*3)		—		358,456		17,182,861		24,978,778		3,838,833		46,000,472		104,257,623		150,616,551

(*1) AAA ~ BBB for Corporates, and 1~6 level for Consumers

(*2) BBB- ~ C for Corporates, and 7~10 level for Consumers

(*3) The value of collateral is the allocated collateral amount when estimating the allowance for credit losses.

Allowances for credit losses, for loans and receivables neither overdue nor impaired, amounting to 602,988 million Won and 708,732 million Won as of June 30, 2017 and as of December 31, 2016, respectively, which are deducted from the loans and receivables above.

b) Aging analysis of loans and receivables

Aging analysis of loans and receivables (overdue but not impaired, net of allowance) is as follows (Unit: Korean Won in millions):

	June 30, 2017
Overdue	Korean treasury and government agencies		Banks		Corporates
					General business		Small and medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Less than 30 days		—		—		5,182		30,007		—		35,189		536,002		571,191
30~59 days		—		—		793		4,670		—		5,463		70,567		76,030
60~89 days		—		—		1,578		2,163		—		3,741		30,204		33,945
Total		—		—		7,553		36,840		—		44,393		636,773		681,166
Value of collateral (*)		—		—		4,507		27,518		—		32,025		555,928		587,953
	December 31, 2016
Overdue	Korean treasury and government agencies		Banks		Corporates
					General business		Small and medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Less than 30 days		—		—		6,583		41,329		—		47,912		511,722		559,634
30~59 days		—		—		263		8,064		—		8,327		72,583		80,910
60~89 days		—		—		130		1,906		—		2,036		33,996		36,032
Total		—		—		6,976		51,299		—		58,275		618,301		676,576
Value of collateral (*)		—		—		5,161		39,488		—		44,649		542,109		586,758

(*) The collateral value held is the recoverable amount used when calculating allowance for credit losses.

Allowances for credit losses, for loans and receivables that are overdue but not impaired, amounting to 28,267 million Won and 28,796 million Won as of June 30, 2017 and December 31, 2016, respectively, which are deducted from the loans and receivables above.

- 10 -

c) Individually impaired loans and receivables

Impaired loans and receivables, net of allowance are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Korean treasury and government agencies		Banks		Corporates
					General business		Small and medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Impaired loans		—		—		605,943		169,735		101,910		877,588		222,248		1,099,836
Value of collateral (*)		—		—		508,057		189,271		11,268		708,596		221,096		929,692
	December 31, 2016
	Korean treasury and government agencies		Banks		Corporates
					General business		Small and medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Impaired loans		—		—		633,933		221,651		161,624		1,017,208		234,435		1,251,643
Value of collateral (*)		—		—		461,795		236,633		11,268		709,696		233,500		943,196

(*) The collateral value held is the recoverable amount used when calculating allowance for credit losses.

Allowances for credit losses, for impaired loans and receivables amounting to 827,620 million Won and 1,056,433 million Won as of June 30, 2017 and December 31, 2016, respectively, are deducted from the impaired loans and receivables above.

4) Credit quality of debt securities

The Bank 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):

	June 30, 2017
	Held for trading		AFS securities		HTM securities		Total
AAA		1,332,252		9,932,302		14,435,934		25,700,488
AA- ~ AA+		—		2,052,543		623,438		2,675,981
BBB- ~ A+		—		206,420		—		206,420
Total		1,332,252		12,191,265		15,059,372		28,582,889
	December 31, 2016
	Held for trading		AFS securities		HTM securities		Total
AAA		1,140,928		9,908,516		13,342,384		24,391,828
AA- ~ AA+		—		1,477,709		449,882		1,927,591
BBB- ~ A+		—		186,691		—		186,691
Total		1,140,928		11,572,916		13,792,266		26,506,110

- 11 -

(2) Market risk

Market risk is the possible risk of loss arising from trading and non-trading activities in the volatility of market factors such as interest rates, stock prices, and foreign exchange rates. Market risk occurs as a result of changes in the interest rates and foreign exchange rates for financial instruments that are not yet settled, and all contracts are exposed to a certain level of volatility according to the interest rates, credit spreads, foreign exchange rates and the price of equity securities.

1) Market risk management

For trading activities and non-trading activities, the Bank avoids, bears or mitigates risks by identifying the underlying source of risks, measuring parameters and evaluating their appropriateness.

The Bank uses both a standard-based and an internal model-based approach to measure market risk. The standard-based approach is used to calculate individual market risk of owned capital while the internal model-based approach is used to calculate general capital market risk and it is used to measure internal risk management measure.

The Bank measures Value at Risk (“VaR”, maximum losses) with Historical Simulation Method based on 99% confidence level and 10-day of holding period of positions, and calculates the required market risk capital using the internal model, which has been approved by Financial Supervisory Service in Korea. For the internal management purpose, VaR is measured based on 99% confidence level and 1-day of holding period of positions and the limit management is performed on daily basis. The validation of the model is assessed through the performance of back testing which is to compare the actual gain or loss to the VaR measurements on daily basis.

In addition, for the purpose of crisis management, the Bank performs stress testing on monthly basis, which is to measure the expected loss amount in case of extreme situation, such as IMF bailout in 1997 or global financial crisis in 2008.

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 Bank and the limit by investment and loss cut is managed by risk management personnel within the department.

2) Sensitivity analysis of market risk

The Bank performs sensitivity analysis, both for trading and for non-trading activities.

For trading activities, the Bank 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 the non-trading activities, the interest rate risk is managed and measured based on the analysis of the Net Interest Income (“NII”) and Net Present Value (“NPV”) by the scenarios. NII is a profit based indicator for displaying the profit changes in short term due to the short term interest changes. It will be estimated as subtracting interest expenses of liabilities from the interest income of assets. NPV is an indicator for displaying risks in economic view according to unfavorable changes related to interest rate. It will be estimated as subtracting the present value of liabilities from the present value of assets.

- 12 -

a) Trading activities

The minimum, maximum and average VaR for the six months ended June 30, 2017 and the year ended December 31, 2016, respectively, and the VaR as of June 30, 2017 and December 31, 2016, respectively, are as follows (Unit: Korean Won in millions):

	As of June 30, 2017			For the six months ended June 30, 2017									As of December 31, 2016			For the year ended December 31, 2016
Risk factor				Average			Maximum			Minimum						Average			Maximum			Minimum
Interest rate		3,454			3,909			4,918			3,121			3,250			2,844			6,430			1,367
Stock price		2,954			3,124			4,419			1,523			4,191			3,456			5,063			2,304
Foreign currencies		5,452			4,648			5,452			4,061			4,396			4,914			7,686			3,967
Commodity		33			47			188			8			152			113			325			21
Diversification		(5,406	)		(4,546	)		(5,614	)		(2,805	)		(5,630	)		(5,355	)		(10,385	)		(4,034	)
Total VaR		6,487			7,182			9,363			5,908			6,359			5,972			9,119			3,625

b) Non-trading activities

The NII and NPV calculated for the assets and liabilities owned by the Bank, respectively, by using the simulation method. The scenario responding to interest rate (“IR”) changes are as follows (Unit: Korean Won in millions):

	June 30, 2017						December 31, 2016
Name of scenario	NII		NPV		NII		NPV
Base case		4,467,014		21,181,542		4,388,019		21,582,242
Base case (Prepay)		4,472,674		20,417,814		4,405,391		20,692,036
IR 100bp up		4,896,985		20,733,413		4,835,013		20,919,129
IR 100bp down		3,985,775		21,683,831		3,918,645		22,304,777
IR 200bp up		5,326,962		20,334,100		5,282,061		20,315,402
IR 200bp down		3,053,495		22,240,071		2,985,778		23,078,379
IR 300bp up		5,756,938		19,978,483		5,729,108		19,768,300
IR 300bp down		2,006,515		24,159,066		1,973,612		25,121,678

- 13 -

The Bank estimates and manages risks related to changes in interest rate due to the difference in the maturities of interest-bearing assets and liabilities and discrepancies in the terms of interest rates. Cash flows of principal amounts and interests from interest bearing assets and liabilities by re-pricing date are as follows (Unit: Korean Won in millions):

		June 30, 2017
		Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Asset	Loans and receivables		137,343,944		37,731,975		9,758,106		9,083,524		54,378,490		39,037,878		287,333,917
	AFS financial assets		2,823,445		3,635,158		1,887,673		2,892,352		5,261,497		659,947		17,160,072
	HTM financial assets		2,254,484		1,461,633		1,252,533		1,844,261		8,439,187		352,224		15,604,322
	Total		142,421,873		42,828,766		12,898,312		13,820,137		68,079,174		40,050,049		320,098,311
Liability	Deposits due to customers		91,560,228		39,599,899		28,062,918		22,361,571		35,988,776		24,748		217,598,140
	Borrowings		9,623,518		651,696		686,099		385,342		2,631,145		427,976		14,405,776
	Debentures		630,526		1,124,372		1,556,661		2,048,850		12,790,688		3,351,641		21,502,738
	Total		101,814,272		41,375,967		30,305,678		24,795,763		51,410,609		3,804,365		253,506,654
		December 31, 2016
		Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Asset	Loans and receivables		135,557,398		40,538,479		7,495,772		7,170,044		53,206,944		34,687,775		278,656,412
	AFS financial assets		2,896,225		2,908,851		2,837,545		2,902,392		4,958,226		675,113		17,178,352
	HTM financial assets		2,672,430		1,515,213		1,246,503		1,143,170		6,851,166		874,298		14,302,780
	Total		141,126,053		44,962,543		11,579,820		11,215,606		65,016,336		36,237,186		310,137,544
Liability	Deposits due to customers		95,261,776		36,070,813		24,657,781		22,748,665		33,819,842		40,032		212,598,909
	Borrowings		11,303,870		852,447		491,330		368,431		2,781,917		421,272		16,219,267
	Debentures		1,591,345		1,781,725		606,539		1,089,673		10,549,803		4,106,259		19,725,344
	Total		108,156,991		38,704,985		25,755,650		24,206,769		47,151,562		4,567,563		248,543,520

- 14 -

3) Currency risk

Currency risk occurs from the financial instrument denominated in a foreign currency other than the functional currency. Therefore, no currency risk arises from non-monetary items or financial instruments denominated in the functional currency.

Financial instruments in foreign currencies exposed to currency risk are as follows (Unit: USD in millions, JPY in millions, CNY in millions, and EUR in millions and Korean Won in millions):

		June 30, 2017
		USD				JPY				CNY				EUR				Others		Total
		Foreign currency		Won equivalent		Foreign currency		Won Equivalent		Foreign currency		Won equivalent		Foreign currency		Won Equivalent		Won equivalent		Won equivalent
Asset	Loans and receivables		20,841		23,750,745		147,834		1,504,280		1,613		270,614		1,513		1,972,626		1,849,861		29,348,126
	Financial assets at FVTPL		36		40,897		39		398		—		—		44		57,341		52,223		150,859
	AFS financial assets		1,202		1,369,884		—		—		—		—		—		586		62,087		1,432,557
	HTM financial assets		48		54,852		—		—		—		—		—		—		32,891		87,743
	Total		22,127		25,216,378		147,873		1,504,678		1,613		270,614		1,557		2,030,553		1,997,062		31,019,285
Liability	Financial liabilities at FVTPL		54		61,677		130		1,323		—		—		104		135,955		133,954		332,909
	Deposits due to customer		8,578		9,775,265		152,988		1,556,732		1,954		327,847		629		820,478		634,277		13,114,599
	Borrowings		6,551		7,465,806		3,845		39,130		21		3,533		230		300,235		146,936		7,955,640
	Debentures		2,942		3,352,486		—		—		700		117,453		—		—		201,120		3,671,059
	Other financial liabilities		3,756		4,280,126		53,122		540,545		5,969		1,001,520		310		404,026		489,854		6,716,071
	Total		21,881		24,935,360		210,085		2,137,730		8,644		1,450,353		1,273		1,660,694		1,606,141		31,790,278
	Off-balance accounts		7,311		8,331,164		31,718		322,744		827		138,770		316		411,928		342,506		9,547,112
		December 31, 2016
		USD				JPY				CNY				EUR				Others		Total
		Foreign currency		Won equivalent		Foreign currency		Won equivalent		Foreign currency		Won equivalent		Foreign currency		Won equivalent		Won equivalent		Won equivalent
Asset	Loans and receivables		19,815		23,946,599		108,867		1,128,742		706		122,295		1,541		1,953,058		2,559,691		29,710,385
	Financial assets at FVTPL		60		72,826		57		589		—		—		30		37,562		34,124		145,101
	AFS financial assets		718		868,018		—		—		—		—		—		570		52,977		921,565
	HTM financial assets		—		—		—		—		—		—		—		—		46,068		46,068
	Total		20,593		24,887,443		108,924		1,129,331		706		122,295		1,571		1,991,190		2,692,860		30,823,119
Liability	Financial liabilities at FVTPL		75		90,908		253		2,621		—		—		88		111,098		115,980		320,607
	Deposits due to customer		9,073		10,964,130		124,781		1,293,742		1,098		190,268		650		823,718		953,350		14,225,208
	Borrowings		6,719		8,119,337		3,243		33,625		32		5,621		216		273,289		356,362		8,788,234
	Debentures		2,931		3,541,769		—		—		700		121,282		—		—		201,780		3,864,831
	Other financial liabilities		1,968		2,377,760		12,379		128,347		1,121		194,263		245		310,278		432,565		3,443,213
	Total		20,766		25,093,904		140,656		1,458,335		2,951		511,434		1,199		1,518,383		2,060,037		30,642,093
	Off-balance accounts		8,035		9,710,576		28,646		297,001		751		130,035		373		472,816		364,748		10,975,176

- 15 -

(3) Liquidity risk

Liquidity risk refers to the risk that the Bank 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. The financial liabilities that are relevant to liquidity risk are incorporated within the scope of risk management. Derivatives instruments are excluded from those financial liabilities as they reflect expected cash flows for a pre-determined period.

Assets and liabilities are grouped by account under Asset Liability Management (“ALM”) in accordance with the characteristics of the account. The Bank manages liquidity risk by identifying maturity gap, and then gap ratio through performing various cash flows analysis (i.e. based on remaining maturity and contract period, etc.); while maintaining the gap ratio at or below the target limit.

2) Maturity analysis of non-derivative financial liabilities

a) Cash flows of principals and interests by remaining contractual maturities of non-derivative financial liabilities are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Financial liabilities at FVTPL		522,587		—		—		166,837		—		—		689,424
Deposits due to customers		128,175,945		31,746,995		24,099,043		27,123,481		6,874,017		814,892		218,834,373
Borrowings		5,008,546		2,069,193		1,690,211		1,110,488		4,207,289		427,442		14,513,169
Debentures		630,753		1,124,402		1,556,435		2,044,689		12,790,864		3,351,726		21,498,869
Other financial liabilities		16,424,801		—		—		—		23,579		2,258,830		18,707,210
Total		150,762,632		34,940,590		27,345,689		30,445,495		23,895,749		6,852,890		274,243,045

	December 31, 2016
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Financial liabilities at FVTPL		673,906		—		—		—		153,757		—		827,663
Deposits due to customers		131,555,838		28,216,931		18,918,303		28,643,490		5,705,028		891,304		213,930,894
Borrowings		6,763,446		2,134,433		876,836		1,477,040		4,653,676		420,315		16,325,746
Debentures		1,590,890		1,781,431		606,681		1,062,254		10,550,080		4,106,193		19,697,529
Other financial liabilities		14,335,059		—		—		—		—		2,730,148		17,065,207
Total		154,919,139		32,132,795		20,401,820		31,182,784		21,062,541		8,147,960		267,847,039

- 16 -

b) Cash flows of principals and interests by expected maturities of non-derivative financial liabilities are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Financial liabilities at FVTPL		522,587		—		—		166,837		—		—		689,424
Deposits due to customers		141,349,321		33,339,443		20,236,071		17,320,137		5,882,687		292,388		218,420,047
Borrowings		5,008,546		2,069,193		1,690,211		1,110,488		4,207,289		427,442		14,513,169
Debentures		630,753		1,124,402		1,556,435		2,044,689		12,790,864		3,351,726		21,498,869
Other financial liabilities		16,424,801		—		—		—		23,579		2,258,830		18,707,210
Total		163,936,008		36,533,038		23,482,717		20,642,151		22,904,419		6,330,386		273,828,719

	December 31, 2016
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Financial liabilities at FVTPL		673,906		—		—		—		153,757		—		827,663
Deposits due to customers		142,802,770		29,698,603		17,269,323		18,716,262		4,664,658		374,152		213,525,768
Borrowings		6,763,452		2,134,429		876,835		1,477,039		4,653,676		420,315		16,325,746
Debentures		1,590,890		1,781,431		606,681		1,062,254		10,550,080		4,106,193		19,697,529
Other financial liabilities		14,335,059		—		—		—		—		2,730,148		17,065,207
Total		166,166,077		33,614,463		18,752,839		21,255,555		20,022,171		7,630,808		267,441,913

3) Maturity analysis of derivative financial liabilities is as follows (Unit: Korean Won in millions):

Derivatives held for trading purposes are not managed in accordance with their contractual maturity, since the Bank holds such financial instruments with the purpose of disposing or redemption before their maturity. As such, those derivatives are incorporated as “Within 3 months” in the table below. The cash flow from derivatives held for hedge purpose is estimated at the amount which is after the offset of the cash inflow and outflow.

The cash flow by the maturity of derivative financial liabilities as of June 30, 2017 and December 31, 2016 is as follow:

	Remaining maturity
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
June 30, 2017		1,860,013		6,239		—		—		2,348		—		1,868,600
December 31, 2016		3,000,098		—		—		208		7,013		—		3,007,319

4) Maturity analysis of off-balance accounts

The Bank provides guarantees on behalf of customers. A financial guarantee represents an irrevocable undertaking that the Bank should meet a customer’s obligations to third parties if the customer fails to do so. Under a loan commitment, the Bank agrees to make funds available to a customer in the future. Loan commitments which are usually for a specified term may be unconditionally cancellable or may persist, provided all conditions in the loan facility are satisfied or waived. Commitments to lend include commercial standby facilities and credit lines, liquidity facilities to commercial paper conduits and utilized overdraft facilities. The maximum limit to be paid by the Bank in accordance with guarantees and loan commitment only applies to principal amounts. There are contractual maturities for financial guarantees, such as guarantees for debentures issued or loans, loan commitments, and other guarantees, however, under the terms of the guarantees and loan commitments, funds should be paid upon demand from the counterparty. Details of off-balance accounts are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Guarantees		13,430,284		14,953,197
Loan commitments		52,142,148		56,313,804

- 17 -

(4) Operational risk

The Bank defines the operational risk that could cause a negative effect on capital resulting from inadequate internal process, labor work and systematic problem or external factors.

1) Operational risk management

The Bank has been running the operational risk management system under Basel II. The Bank developed advanced measurement approaches to quantify required capital for operational risk. This system is used for reinforcement in foreign competitions, reducing the amount of risk capitals, managing the risk, and precaution for any unexpected occasions. This system has been tested by an independent third party, and this system approved by the Financial Supervisory Service.

2) Operational risk measurement

To quantify the required capital for operational risk, the Bank applies Advanced Measurement Approaches (AMA) using of internal and external loss data, business environment and internal control factors (BEICFs), and scenario analysis (SBA). For the operational risk management for its subsidiaries, the Bank adopted the Basic Indicator Approach.

(5) Capital management

The Bank complies with the capital adequacy standard established by the Financial Services Commission. The capital adequacy standard is based on Basel III published by Basel Committee on Banking Supervision in Bank of International Settlements in 2010, and was implemented in Korea in December 2013. The capital adequacy ratio is calculated by dividing own capital by asset (weighted with a risk premium – risk weighted assets) based on the consolidated financial statements of the Bank.

The Bank is required to maintain a minimum common equity Tier 1 ratio of at least 6.25% and 5.38%, a minimum Tier 1 ratio of 7.75% and 6.88% and a minimum total regulatory capital of 9.75% and 8.88% as of June 30, 2017 and December 31, 2016.

Details of the Bank’s capital adequacy ratio as of June 30, 2017 and December 31, 2016 and are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Tier 1 capital		16,177,612			15,714,480
Other Tier 1 capital		3,046,056			3,275,496
Tier 2 capital		3,414,839			3,910,513
Total risk-adjusted capital		22,638,507			22,900,489
Risk-weighted assets for credit risk		135,889,833			138,018,500
Risk-weighted assets for market risk		2,610,883			2,277,809
Risk-weighted assets for operational risk		9,601,831			9,431,814
Total risk-weighted assets		148,102,547			149,728,123
Common Equity Tier 1 ratio		10.92	%		10.50	%
Tier 1 capital ratio		12.98	%		12.68	%
Total capital ratio		15.29	%		15.29	%

- 18 -

5. OPERATING SEGMENTS

In evaluating the results of the Bank and allocating resources, the Bank’s Chief Operation Decision Maker (the “CODM”) utilizes the information per type of customers. This financial information of the segments is regularly reviewed by the CODM to make decisions about resources to be allocated to each segment and evaluate its performance.

(1) Segment by type of customers

The Bank’s reporting segments comprise the following customers: consumer banking, corporate banking, investment banking, capital market, and headquarters and others. The reportable segments are classified based on the target customers for whom the service is being provided:

• Consumer banking: Loans/deposits and financial services for consumer, etc.

• Corporate banking: Loans/deposits and export/import, financial services for corporations, etc.

• Investment banking: Domestic/foreign investment, structured finance, M&A, Equity & fund investment related business, venture advisory related tasks, real estate SOC development practices etc.

• Capital market: Fund management, investment securities and derivatives business, etc.

• Headquarter and others: Segments that do not belong to above operating segments

1) The details of assets and liabilities by each segment are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Consumer banking		Corporate banking		Investment banking		Capital market		Headquarters and others		Sub-total		Adjustment		Total
Assets		107,802,948		103,717,080		6,061,096		12,566,223		66,254,120		296,401,467		484,753		296,886,220
Liabilities		73,415,093		154,137,327		50,269		11,520,839		36,478,653		275,602,181		1,592,072		277,194,253

	December 31, 2016
	Consumer banking		Corporate banking		Investment banking		Capital market		Headquarters and others		Sub-total		Adjustment		Total
Assets		105,931,025		104,937,198		6,337,634		8,111,230		63,365,346		288,682,433		2,089,710		290,772,143
Liabilities		62,294,922		162,937,921		55,785		7,287,850		36,396,452		268,972,930		1,946,695		270,919,625

- 19 -

2) The details of operating income by each segment are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017
	Consumer banking			Corporate banking			Investment banking			Capital Market			Headquarters and others			Sub-total			Adjustments			Total
Net interest income
Interest income		1,539,729			1,456,198			72,232			8,938			362,975			3,440,072			160,711			3,600,783
Interest expense		(480,814	)		(818,422	)		(126	)		—			(300,481	)		(1,599,843	)		130,718			(1,469,125	)
Inter-segment		(248,116	)		229,029			(66,693	)		8,324			77,456			—			—			—
		810,799			866,805			5,413			17,262			139,950			1,840,229			291,429			2,131,658
Net non-interest income
Non-interest income		424,213			333,646			212,107			4,991,598			759,765			6,721,329			92,750			6,814,079
Non-interest expense		(146,630	)		(82,261	)		(121,238	)		(4,968,840	)		(629,123	)		(5,948,092	)		(361,808	)		(6,309,900	)
Inter-segment		45,402			29,680			—			—			(75,082	)		—			—			—
		322,985			281,065			90,869			22,758			55,560			773,237			(269,058	)		504,179
Other income and expense
Administrative expense		(869,733	)		(402,661	)		(5,696	)		(7,721	)		(64,701	)		(1,350,512	)		—			(1,350,512	)
Reversal of allowance for credit loss and impairment losses due to credit loss		(45,963	)		(128,684	)		31,311			22,135			156,587			35,386			(22,371	)		13,015
		(915,696	)		(531,345	)		25,615			14,414			91,886			(1,315,126	)		(22,371	)		(1,337,497	)
Operating income		218,088			616,525			121,897			54,434			287,396			1,298,340			—			1,298,340
Non-operating income (loss)		8,862			(3,122	)		22,581			—			(29,197	)		(876	)		—			(876	)
Net income before income tax expense		226,950			613,403			144,478			54,434			258,199			1,297,464			—			1,297,464
Income tax expense		(54,922	)		(139,138	)		(34,964	)		(13,173	)		(50,841	)		(293,038	)		—			(293,038	)
Net income		172,028			474,265			109,514			41,261			207,358			1,004,426			—			1,004,426

	For the six months ended June 30, 2016
	Consumer banking			Corporate banking			Investment banking			Capital Market			Headquarters and others			Sub-total			Adjustments			Total
Net interest income
Interest income		1,477,402			1,547,508			79,067			9,970			471,926			3,585,873			149,786			3,735,659
Interest expense		(517,960	)		(915,304	)		(85	)		(117	)		(328,263	)		(1,761,729	)		142,209			(1,619,520	)
Inter-segment		(229,262	)		233,048			(71,862	)		20,214			47,862			—			—			—
		730,180			865,252			7,120			30,067			191,525			1,824,144			291,995			2,116,139
Net non-interest income
Non-interest income		471,714			268,261			291,061			3,725,729			2,154,545			6,911,310			73,285			6,984,595
Non-interest expense		(213,453	)		(16,616	)		(218,604	)		(3,716,009	)		(2,087,736	)		(6,252,418	)		(384,384	)		(6,636,802	)
Inter-segment		13,593			21,372			—			—			(34,965	)		—			—			—
		271,854			273,017			72,457			9,720			31,844			658,892			(311,099	)		347,793
Other income and expense
Administrative expense		(876,033	)		(464,082	)		(6,331	)		(8,162	)		(121,352	)		(1,475,960	)		—			(1,475,960	)
Reversal of allowance for credit loss and impairment losses due to credit loss		(30,567	)		(239,450	)		(62,911	)		(6,429	)		127,734			(211,623	)		19,104			(192,519	)
		(906,600	)		(703,532	)		(69,242	)		(14,591	)		6,382			(1,687,583	)		19,104			(1,668,479	)
Operating income		95,434			434,737			10,335			25,196			229,751			795,453			—			795,453
Non-operating income (loss)		(34,885	)		(2,663	)		22,977			—			26,526			11,955			—			11,955
Net income before income tax expense		60,549			432,074			33,312			25,196			256,277			807,408			—			807,408
Income tax expense (benefits)		(14,653	)		(108,574	)		(8,062	)		(6,097	)		1,219			(136,167	)		—			(136,167	)
Net income		45,896			323,500			25,250			19,099			257,496			671,241			—			671,241

- 20 -

(2) Information on financial products and services

The products of the Bank are classified as interest-bearing products such as loans, deposits and debt securities and non-interest bearing products such as loan commitment, credit commitment, equity securities, and credit card service. This classification of products has been reflected in the segment information presenting interest income and non-interest income.

(3) Information on geographical areas

Of the Bank’s revenue (interest income and non-interest income) from services, revenue from the domestic customers for the six months ended June 30, 2017 and 2016 amounted to 10,224,455 million Won and 10,579,712 million Won, respectively, and revenue from the foreign customers amounted to 190,407 million Won and 140,542 million Won, respectively. Of the Bank’s non-current assets (investments in subsidiaries and associates, investment properties, premise and equipment and intangible assets), non-current assets attributed to domestic subsidiaries as of June 30, 2017 and December 31, 2016 are 6,867,863 million Won and 6,703,013 million Won, respectively, and foreign subsidiaries are 8,927 million Won and 9,059 million Won, respectively.

6. CASH AND CASH EQUIVALENTS

(1) Details of cash and cash equivalents are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Cash		2,165,379		2,150,181
Foreign currencies		643,598		699,667
Demand deposits		2,821,967		3,144,208
Fixed deposits		464,802		109,973
Total		6,095,746		6,104,029

(2) Significant transactions not involving cash inflows and outflows are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Changes in other comprehensive income (loss) due to valuation of AFS financial assets		(16,218	)		42,649
Changes in other comprehensive loss of overseas business translation		(14,513	)		(192	)
Changes in other comprehensive loss due to re-measurement		(8,949	)		(44,727	)
Changes in investments in associates and associates due to debt-equity swaps		49,599			—
Changes in investments in subsidiaries and associates due to accounts transfer		(7,492	)		(130,596	)
Changes in accrued dividends of hybrid equity securities		(9,804	)		(347	)

- 21 -

7. FINANCIAL ASSETS AT FVTPL

Details of financial assets held for trading are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Deposits:
Gold banking assets		31,169		26,180
Securities:
Debt securities
Korean treasury and government agencies		222,499		202,599
Financial institutions		1,109,753		938,329
Equity securities		7,846		24,762
Securities loaned		—		4,459
Sub-total		1,340,098		1,170,149
Derivative assets		1,636,056		2,880,543
Total		3,007,323		4,076,872

There are no financial assets designated at FVTPL as of June 30, 2017 and December 31, 2016.

8. AFS FINANCIAL ASSETS

Details of AFS financial assets are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Debt securities:
Korean treasury and government agencies		2,528,942		2,839,623
Financial institutions		4,855,615		4,287,211
Corporates		3,226,494		3,061,002
Bonds in foreign currencies		1,408,526		891,501
Sub-total		12,019,577		11,079,337
Equity securities		1,273,191		1,282,090
Beneficiary certificates		4,685,463		5,250,856
Securities loaned		171,688		493,579
Total		18,149,919		18,105,862

9. HTM FINANCIAL ASSETS

Details of HTM financial assets are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Korean treasury and government agencies		3,964,762		3,754,355
Financial institutions		6,069,613		5,168,487
Corporates		4,937,254		4,823,356
Bonds in foreign currencies		87,743		46,068
Total		15,059,372		13,792,266

- 22 -

10. LOANS AND RECEIVABLES

(1) Details of loans and receivables are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Due from banks		9,693,616		13,147,281
Loans		224,428,645		221,089,139
Other loans and receivables		13,184,460		7,271,628
Total		247,306,721		241,508,048

(2) Details of due from banks are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Due from banks in local currency:
Due from The Bank of Korea (“BOK”)		8,090,443			11,395,162
Others		39,534			56,355
Allowance for credit losses		(1,987	)		(2,798	)
Sub-total		8,127,990			11,448,719
Due from banks in foreign currencies:
Due from banks on demand		839,268			702,023
Time deposits		281,319			523,473
Others		446,208			474,472
Allowances for credit losses		(1,169	)		(1,406	)
Sub-total		1,565,626			1,698,562
Total		9,693,616			13,147,281

- 23 -

(3) Details of restricted due from banks are as follows (Unit: Korean Won in millions):

	Counterparty	June 30, 2017		Reason of restriction
Due from banks in local currency:
Due from The Bank of Korea	The BOK		8,090,443	Reserve deposits under the BOK Act
Others	The Korea Exchange and others		38,690	Central counter party KRW margin and others
Sub-Total			8,129,133
Due from banks in foreign currencies:
Due from banks on demand	The BOK and others		832,802	Reserve deposits under the BOK Act and others
Others	Korea Investment & Securities Co., Ltd. and others		446,208	Deposits for foreign futures and option trading and others
Sub-Total			1,279,010
Total			9,408,143
	Counterparty	December 31, 2016		Reason of restriction
Due from banks in local currency:
Due from The Bank of Korea	The BOK		11,395,162	Reserve deposits under the BOK Act
Others	The Korea Exchange and others		55,304	Central counter party KRW margin and others
Sub-Total			11,450,466
Due from banks in foreign currencies:
Due from banks on demand	The BOK and others		678,999	Reserve deposits under The BOK Act and others
Others	Korea Investment & Securities Co., Ltd. and others		474,472	Deposits for foreign futures and option trading and others
Sub-Total			1,153,471
Total			12,603,937

(4) Details of loans are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Loans in local currency		192,899,562			190,099,544
Loans in foreign currencies		7,864,398			8,697,795
Domestic banker’s letter of credit		2,981,980			3,754,030
Bills bought in foreign currencies		7,478,887			7,691,879
Bills bought in local currency		227,408			322,189
Factoring receivables		44,509			95,173
Advances for customers on guarantees		24,082			24,132
Privately placed bonds		208,926			222,926
Call loans		2,781,412			2,813,706
Bonds purchased under resale agreements		10,861,627			8,532,924
Loan origination costs and fees		456,960			447,073
Others		626			21,626
Present value discount		(9,721	)		(11,490	)
Allowance for credit losses		(1,392,011	)		(1,622,368	)
Total		224,428,645			221,089,139

- 24 -

(5) Details of other loans and receivables are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31,2016
Receivables		11,034,687			4,849,111
Accrued income		868,388			970,789
Telex and telephone subscription rights and refundable deposits		965,865			986,242
Other receivables		379,228			632,875
Allowance for credit losses		(63,708	)		(167,389	)
Total		13,184,460			7,271,628

(6) Changes in the allowances for credit losses on loans and receivables are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017
	Consumers			Corporates			Others			Total
Beginning balance		(155,338	)		(1,467,030	)		(171,593	)		(1,793,961	)
Net reversal of provision (net provision)		(64,206	)		(188,377	)		24,873			(227,710	)
Recoveries of written-off loans		(21,607	)		(54,202	)		—			(75,809	)
Charge-off		67,133			220,645			50,592			338,370
Sales of loans and receivables		830			58,431			29,264			88,525
Unwinding effect		4,619			19,965			—			24,584
Others(*)		—			187,126			—			187,126
Ending balance		(168,569	)		(1,223,442	)		(66,864	)		(1,458,875	)

(*) Others are due to debt-equity swap, fluctuation of foreign currencies exchange rates, etc.

	For the six months ended June 30, 2016
	Consumers			Corporates			Others			Total
Beginning balance		(196,056	)		(1,649,828	)		(417,602	)		(2,263,486	)
Net reversal of provision (net provision)		(43,611	)		(430,539	)		71,511			(402,639	)
Recoveries of written-off loans		(24,386	)		(130,207	)		—			(154,593	)
Charge-off		71,614			195,370			397			267,381
Sales of loans and receivables		1,640			179,513			648			181,801
Unwinding effect		5,294			39,899			—			45,193
Others(*)		(16	)		13,033			—			13,017
Ending balance		(185,521	)		(1,782,759	)		(345,046	)		(2,313,326	)

(*) Others are due to debt-equity swap, fluctuation of foreign currencies exchange rates, etc.

- 25 -

11. THE FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

(1) The fair value hierarchy

The fair value hierarchy is determined by the levels of judgment involved in estimating fair values of financial assets and liabilities. The specific financial instruments characteristics and market condition such as volume of transactions and transparency are reflected to the market observable inputs. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities. The Bank maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value of its financial assets and financial liabilities. Fair value is measured based on the perspective of a market participant. As such, even when market assumptions are not readily available, the Bank’s own assumptions reflect those that market participants would use for measuring the assets or liabilities at the measurement date.

The fair value measurement is described in the one of the following three levels used to classify fair value measurements:

• Level 1 - fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. The types of financial assets or liabilities generally included in Level 1 are publicly traded equity securities, derivatives, and debt securities issued by governmental bodies.

• Level 2 - fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices). The types of financial assets or liabilities generally included in Level 2 are debt securities not traded in active markets and derivatives traded in OTC but not required significant judgment.

• Level 3 - fair value measurements are those derived from valuation technique that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). The types of financial assets or liabilities generally included in Level 3 are non-public securities and derivatives and debt securities of which valuation techniques require significant judgments and subjectivity.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Bank’s assessment of the significance of a particular input to a fair value measurement in its entirety requires judgment and consideration of inherent factors of the asset or liability.

(2) Fair value hierarchy of financial assets and liabilities measured at current fair value is as follows (Korean Won in millions):

	June 30, 2017
	Level 1 (*1)		Level 2 (*1)		Level 3 (*2)		Total
Financial assets:
Financial assets held for trading
Deposits		31,169		—		—		31,169
Debt securities		222,499		1,109,753		—		1,332,252
Equity securities		7,846		—		—		7,846
Derivative assets		1,160		1,607,539		27,357		1,636,056
Sub-total		262,674		2,717,292		27,357		3,007,323
AFS financial assets
Debt securities		1,936,773		10,082,804		—		12,019,577
Equity securities		403,509		—		869,682		1,273,191
Beneficiary certificates		—		4,108,556		576,907		4,685,463
Securities loaned		90,325		81,363		—		171,688
Sub-total		2,430,607		14,272,723		1,446,589		18,149,919
Derivative assets		—		140,143		—		140,143
Total		2,693,281		17,130,158		1,473,946		21,297,385

- 26 -

	June 30, 2017
	Level 1 (*1)		Level 2 (*1)		Level 3 (*2)		Total
Financial liabilities:
Financial liabilities held for trading
Deposits		31,184		—		—		31,184
Derivative liabilities		1,036		1,825,858		33,119		1,860,013
Sub-total		32,220		1,825,858		33,119		1,891,197
Financial liabilities designated at FVTPL
Equity-linked securities		—		212		522,375		522,587
Debentures		—		93,590		—		93,590
Sub Total		—		93,802		522,375		616,177
Derivative liabilities		—		8,587		—		8,587
Total		32,220		1,928,247		555,494		2,515,961

	December 31, 2016
	Level 1 (*1)		Level 2 (*1)		Level 3 (*2)		Total
Financial assets:
Financial assets held for trading
Deposits		26,180		—		—		26,180
Debt securities		202,598		938,330		—		1,140,928
Equity securities		24,762		—		—		24,762
Securities loaned		4,459		—		—		4,459
Derivative assets		3,233		2,854,248		23,062		2,880,543
Sub-total		261,232		3,792,578		23,062		4,076,872
AFS financial assets
Debt securities		1,422,209		9,657,128		—		11,079,337
Equity securities		427,084		—		855,006		1,282,090
Beneficiary certificates		—		4,738,287		512,569		5,250,856
Securities loaned		391,279		102,300		—		493,579
Sub-total		2,240,572		14,497,715		1,367,575		18,105,862
Derivative assets		—		140,478		99		140,577
Total		2,501,804		18,430,771		1,390,736		22,323,311
Financial liabilities:
Financial liabilities held for trading
Deposits		26,501		—		—		26,501
Derivative liabilities		1,750		2,964,912		33,436		3,000,098
Sub-total		28,251		2,964,912		33,436		3,026,599
Financial liabilities designated at FVTPL
Equity-linked securities		—		197		673,709		673,906
Debentures		—		92,974		—		92,974
Sub Total		—		93,171		673,709		766,880
Derivative liabilities		—		7,221		—		7,221
Total		28,251		3,065,304		707,145		3,800,700

- 27 -

(*1) There were no transfers between Level 1 and Level 2 of financial assets and liabilities measured at fair value. The Bank recognizes transfers among levels at the end of reporting period in which events have occurred or conditions have changed.

(*2) Certain AFS unquoted equity securities were measured at cost as of June 30, 2017 and December 31, 2016, that are amounting to 40,337 million Won and 38,401 million Won, respectively. These unquoted equity instruments mostly represent minority investments in structured entity vehicles such as asset securitization structures. They are measured at cost because (a) observable inputs of financial information to measure fair value was not available to obtain, or (b) there is a significant variance in likely estimated cash flows or (c) the probabilities for the various estimated cash flows could not be measured reliably. In addition, the Bank has no intention to dispose these investments in the foreseeable future.

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 that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.

Financial instruments are measured at fair value using a quoted market price in active markets. If there is no active market for a financial instrument, the Bank establishes the fair value using valuation techniques. Fair value measurement methods for each type of financial instruments are as follows:

	Fair value measurement technique	Input variables
Debt securities	The fair value is measured by discounting the projected cash flows of debt securities by applying the market discount rate that has been applied to a proxy company that has similar credit rating to the issuers of the securities.	Risk-free market rate, credit spread
Equity securities	Among DCF (Discounted Cash Flow) Model, FCFE (Free Cash Flow to Equity) Model, Comparable Company Analysis, Dividend Discount Model, Risk-adjusted Rate of Return Method, and Net Asset Value Method, more than one method is used given the characteristic of the subject of fair value measurement.	Risk-free market rate, market risk premium, Beta
Derivatives	The in-house developed model which is based on the models that are used by market participants in the valuation of general OTC derivative products, such as options, interest rate swaps, currency swap and currency forward that are based on inputs observable in the market. However, for some complicated financial instruments of which valuation should be based on some assumptions since some significant or all inputs to be used in the model are not observable in the market, the in-house derived model which is developed from the general valuation models, such as Finite Difference Method (“FDM”) or Monte Carlo Simulation.	Risk-free market rate, forward rate, volatility, foreign exchange rate, stock prices, etc.
Equity-linked securities	The fair value of security linked to stock prices or derivatives is measured by the models such as DCF model, FDM, or Monte Carlo Simulation given the natures of the securities or underlying assets.	Values of underlying assets, risk-free market rate, market rate, dividend and convenience yield, volatility, correlation coefficient, credit spread, and foreign exchange rate
Debentures	The fair value is measured by discounting the projected cash flows of a debenture by applying the market discount rate that is reflecting credit rating of the Bank.	Risk free market rate of return and forward rate

- 28 -

Techniques for the financial assets and financial liabilities at level 3 and significant, unobservable inputs are as follows:

	Fair value measurement technique	Input variable	Range	Impact of changes in significant unobservable inputs on fair value measurement
Derivative assets	Option valuation model and others	Correlation coefficient	0.700~0.980	Variation of fair value increases as correlation coefficient increases
		Volatility of underlying asset	17.1%~34.2%	Variation of fair value increases as volatility increases
Derivative liabilities	Option valuation model and others	Correlation coefficient	0.700~0.980	Variation of fair value increases as correlation coefficient increases
		Volatility of underlying asset	17.1%~34.2%	Variation of fair value increases as volatility increases
Equity linked securities	Monte Carlo Simulation and others	Correlation coefficient	0.047~0.706	Equity linked securities’s fair value increases if both volatility and correlation coefficient increase
		Volatility of underlying asset	10.6%~43.6%	However when correlation coefficient decreases, despite the increase in volatility, the fair value of compound financial instrument may decrease
Equity securities	External appraisal value and others	Expected growth rate	0.0%~1.0%	Fair value increases as expected growth rate increases

Fair value of financial assets and liabilities classified into level 3 is measured by the Bank using its own valuation techniques or using external specialists. Unobservable inputs used in the fair value measurements are produced by the internal system of the Bank and the appropriateness of inputs is reviewed regularly.

(3) Changes in financial assets and liabilities classified into level 3 are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017
	January 1, 2017		Net Income (*1)		Other comprehensive income (loss)			Purchases/ Issuances		Disposals/ Settlements			Transfer to or out of level 3 (*2)		June 30, 2017
Financial assets:
Financial assets held for trading
Derivative assets		23,062		21,245		—			472		(17,422	)		—		27,357
AFS financial assets
Equity securities		855,006		19,249		7,488			18,473		(30,534	)		—		869,682
Beneficiary certificates		512,569		3,442		(1,757	)		132,438		(69,785	)		—		576,907
Sub-total		1,367,575		22,691		5,731			150,911		(100,319	)		—		1,446,589
Derivative assets		99		185		—			—		(284	)		—		—
Total		1,390,736		44,121		5,731			151,383		(118,025	)		—		1,473,946
Financial liabilities:
Financial liabilities held for trading
Derivative liabilities		33,436		14,197		—			500		(15,014	)		—		33,119
Financial liabilities designated at FVTPL
Equity-linked securities		673,709		83,962		—			—		(235,296	)		—		522,375
Total		707,145		98,159		—			500		(250,310	)		—		555,494

- 29 -

(*1) The loss amounting to 61,495 million Won for the six months ended June 30, 2017 which is from financial assets and liabilities that the Bank holds as at the end of the periods, has been recognized in net gain (loss) on financial instruments at FVTPL and net gain (loss) on AFS financial assets in the separate statement of comprehensive income.

(*2) The Bank recognizes transfers among levels at the end of reporting period within which events have occurred or conditions have changed.

	For the six months ended June 30, 2016
	January 1, 2016		Net Income (loss) (*1)			Other comprehensive income (loss)			Purchases/ Issuances			Disposals/ Settlements			Transfer to or out of level 3 (*2)			June 30, 2016
Financial assets:
Financial assets held for trading
Derivative assets		78,676		33,115			—			(1,075	)		(22,827	)		—			87,889
AFS financial assets
Equity securities (*3)		833,744		(2,418	)		46,394			188,676			(104,280	)		(17,455	)		944,661
Beneficiary certificates		365,896		134			(714	)		88,363			(11,862	)		—			441,817
Others		5,308		594			(642	)		—			(5,260	)		—			—
Sub-total		1,204,948		(1,690	)		45,038			277,039			(121,402	)		(17,455	)		1,386,478
Derivative assets		5,973		3,619			—			—			(9,490	)		—			102
Total		1,289,597		35,044			45,038			275,964			(153,719	)		(17,455	)		1,474,469
Financial liabilities:
Financial liabilities held for trading
Derivative liabilities		78,601		32,254			—			—			(22,336	)		—			88,519
Financial liabilities designated at FVTPL
Equity-linked securities		747,351		(47,721	)		—			983			(23,075	)		—			677,538
Total		825,952		(15,467	)		—			983			(45,411	)		—			766,057

(*1) The gain amounting to 47,383 million Won for the six months ended June 30, 2016, which is from financial assets and liabilities that the Bank holds as at the end of the periods, has been recognized in net gain (loss) on financial instruments at FVTPL and net gain (loss) on AFS financial assets in the statement of comprehensive income.

(*2) The Bank recognizes transfers among levels at the end of reporting period within which events have occurred or conditions have changed.

(*3) AFS financial assets were transferred out of level 3 to level 1 upon the change of the fair value measurement method of the assets by using quoted prices in the active market from previously using the external valuation specialists.

(4) Sensitivity analysis on the unobservable inputs used for measuring level 3 financial instruments

The sensitivity analysis of the financial instruments has been performed by classifying favorable and unfavorable changes based on how changes in unobservable assumptions have effects on the fluctuations of financial instruments’ value. When the fair value of a financial instrument is affected by more than one unobservable assumption, the below table reflects the most favorable or the most unfavorable changes which result from varying the assumptions individually. The sensitivity analysis was performed for two types of level 3 financial instruments: (1) interest rate related derivatives, currency related derivatives, equity related derivatives, and equity-linked securities of which fair value changes are recognized as net income; (2) equity securities and beneficiary certificates of which fair value changes are recognized as other comprehensive income. Equity securities classified as level 3 but measured at costs are excluded from sensitivity analysis.

The following table shows the sensitivity analysis to disclose the effect of reasonably possible volatility on the fair value of a level 3 financial instruments for the six months ended June 30, 2017 and for the year ended December 31, 2016 (Unit: Korean Won in millions):

- 30 -

	As of June 30, 2017										As of December 31, 2016
	Net income (loss)					Other comprehensive income (loss)					Net income (loss)					Other comprehensive income (loss)
	Favorable		Unfavorable			Favorable		Unfavorable			Favorable		Unfavorable			Favorable		Unfavorable
Financial assets:
Financial assets held for trading
Derivative assets (*1)(*2)		5,212		(6,345	)		—		—			861		(2,248	)		—		—
AFS Financial Assets
Equity securities (*3) (*4)		—		—			24,817		(14,915	)		—		—			24,270		(16,223	)
Beneficiary certificates (*4)		—		—			2,318		(2,250	)		—		—			2,813		(2,754	)
Total		5,212		(6,345	)		27,135		(17,165	)		861		(2,248	)		27,083		(18,977	)
Financial liabilities:
Financial liabilities held for trading
Derivative liabilities (*1)(*2)		7,677		(6,538	)		—		—			4,892		(3,568	)		—		—
Financial liabilities designated at FVTPL
Equity-linked securities (*1)		144		(125	)		—		—			905		(857	)		—		—
Total		7,821		(6,663	)		—		—			5,797		(4,425	)		—		—

(*1) Fair value changes of equity related derivatives assets and liabilities and equity-linked securities are calculated by increasing or decreasing historical fluctuation rate of stock price and correlation, which are major unobservable variables, by 10%, respectively. In the case of interest rate and currency related derivative assets and liabilities, fair value changes are calculated by increasing or decreasing volatility of interest rate and credit risk adjustment ratio, which are major unobservable variables, by 10%, respectively.

(*2) Both derivative assets and liabilities for held for trading and hedging are included.

(*3) Fair value changes of equity securities are calculated by increasing or decreasing growth rate (0~1%) and discount rate or liquidation value (-1~1%) and discount rate. The growth rate, discount rate, and liquidation value are major unobservable variables.

(*4) Among the equity securities, even if the sensitivity analysis of the capital contributions and beneficiary certificates is not possible in practice, fair value changes of beneficiary certificates and other securities whose major unobservable variables are composed of the real estate are calculated by increasing or decreasing price fluctuation of real estate which is underlying assets and discount rate by 1%.

(5) Fair value and carrying amount of financial assets and liabilities that are recorded at amortized cost are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Fair value								Book value
	Level 1		Level 2		Level 3		Total
Financial assets:
HTM financial assets		1,478,690		13,639,656		—		15,118,346		15,059,372
Loans and receivables		—		—		247,764,628		247,764,628		247,306,721
Financial liabilities:
Deposits due to customers		—		216,396,563		—		216,396,563		216,321,706
Borrowings		—		14,259,625		—		14,259,625		14,248,618
Debentures		—		20,134,610		—		20,134,610		19,910,124
Other financial liabilities		—		23,543,109		—		23,543,109		23,543,680

	December 31, 2016
	Fair value								Book value
	Level 1		Level 2		Level 3		Total
Financial assets:
HTM financial assets		741,880		13,125,715		—		13,867,595		13,792,266
Loans and receivables		—		—		242,668,472		242,668,472		241,508,048
Financial liabilities:
Deposits due to customers		—		211,370,812		—		211,370,812		211,382,380
Borrowings		—		16,076,215		—		16,076,215		16,060,821
Debentures		—		18,401,138		—		18,401,138		18,166,057
Other financial liabilities		—		20,826,846		—		20,826,846		20,827,284

- 31 -

The fair values of financial instruments are measured using quoted market price in active markets. In case there is no active market for financial instruments, the Bank determines the fair value using alternative assumptions through developing fair value measurement methods. Alternative assumptions and fair value measurement methods for financial assets and liabilities that are measured at amortized costs are given as follows:

	Fair value measurement technique	Input variables
Debt securities	The fair value is measured by discounting the projected cash flows of debt securities by applying the market discount rate that has been applied to a proxy company that has similar credit rating to the issuers of the securities.	Risk-free market rate and credit spread
Loans and receivables	The fair value is measured by discounting the projected cash flows of loan products by applying the market discount rate that has been applied to a proxy company that has similar credit rating to the debtor.	Risk-free market rate, credit spread and prepayment-rate
Deposits due to customers, borrowings, debentures and other financial liabilities	The fair value is measured by discounting the projected cash flows of debt products by applying the market discount rate that is reflecting credit rating of the Bank.	Risk-free market rate and forward rate

- 32 -

12. DERECOGNITION AND OFFSET OF FINANCIAL INSTRUMENTS

(1) Derecognition of financial assets

1) Transferred financial assets that meet condition of derecognition

The book value, fair value of, and maximum exposure to loss from the financial assets that were derecognized from the separate financial statements of the Bank through disposals, but the Bank still has continuous involvements are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Type of continuous involvement	Book value of continuous participation		Fair value of continuous participation		Maximum exposure to loss
Conditional disposal of loans to KAMCO (*)	Post settlement		—		—		701

	December 31, 2016
	Type of continuous involvement	Book value of continuous participation		Fair value of continuous participation		Maximum exposure to loss
Conditional disposal of loans to KAMCO (*)	Post settlement		—		—		701

(*) As the amounts to be settled after the auction of collaterals are not fixed yet, expected cash flow cannot be reliably measured as of June 30, 2017 and December 31, 2016, and the maximum exposure to loss is disclosed at the transfer price. Though the transfer does not qualify for derecognition in accordance with K-IFRS 1039, the Bank derecognized the financial asset from the separate financial statements applying the exception for retrospective application of transactions before the date of transition to IFRSs in K-IFRS 1101 – First-time Adoption of K-IFRS.

2) Transferred financial assets that do not meet condition of derecognition

a) Disposal of securities under repurchase agreements

The financial instruments that were disposed but the Bank agreed to repurchase at the fixed amounts at the same time, so that they did not meet the conditions of derecognition, are as follows (Unit: Korean Won in millions):

		June 30, 2017		December 31, 2016
Assets transferred	AFS financial assets		10,032		220,098
	HTM financial assets		7,139		7,133
	Total		17,171		227,231
Related liabilities	Bonds sold under repurchase agreements		5,270		106,605

- 33 -

b) Securities loaned

When the Bank loans its securities to outside parties, the legal ownerships of the securities are transferred, however, they should be returned at the end of lending period therefore the Bank does not derecognize them from the separate financial statements as it owns majority of risks and benefits from the securities continuously regardless of the transfer of legal ownership. The carrying amounts of Securities loaned are as follows (Unit: Korean Won in millions):

		June 30, 2017		December 31, 2016		Loaned to
Financial assets at FVTPL	Equity securities-listed stock		—		4,459	Samsung Securities Co., Ltd. and others
AFS financial assets	Debt securities-Korean treasury and government agencies and others		171,688		493,579	Korea Securities Finance Corporation and others
	Total		171,688		498,038

The details of the transferred financial assets that are not derecognized in their entirety, such as disposal of securities under repurchase agreement or Securities loaned, are explained in Note 18.

(2) The offset of financial assets and liabilities

The Bank possesses both the uncollected domestic exchange receivables and unpaid domestic exchange payable, which satisfy offsetting criteria of K-IFRS 1032. Therefore, the total number of uncollected domestic exchange receivables or unpaid domestic exchange payable has been countervailed with part of unpaid domestic exchange payable or uncollected domestic exchange receivables, respectively, and has been disclosed in loans and receivables or other financial liabilities of the Bank’s separate statements of financial position respectively.

The Bank possesses the derivative assets, derivative liabilities, receivable spot exchange, and payable spot exchange which do not satisfy the offsetting criteria of K-IFRS 1032, but provide the Bank the right of, under the circumstances of the trading party’s defaults, insolvency, or bankruptcy, the offsetting. Item such as cash collateral cannot satisfy the offsetting criteria of K-IFRS 1032, but in accordance with the collateral arrangements and under the circumstances of the trading party’s default, insolvency, or bankruptcy, the derivative assets, derivative liabilities, receivable spot exchange, and the net amount of payable spot exchange can be offset.

The Bank has entered into a sale and repurchase agreements and accounted it as collateralized borrowing. The Bank has also entered into a purchase and resale agreements and accounted it as secured loans. The repurchase and resale agreements can have the offsetting right only under the trading party’s default, insolvency, or bankruptcy which do not satisfy the offsetting criteria of K-IFRS 1032, the Bank recorded the collateralized borrowings in borrowings and the secured loans in loans and receivables. The Bank under the repurchase agreements has offsetting right only upon the counter-party’s default, insolvency or bankruptcy, thus the repurchase agreements are applied by the TBMA/ISMA Global Master Repurchase Agreement of which do not satisfy the offsetting criteria of K-IFRS 1032. The Bank disclosed bonds sold (purchased) under repurchase agreements as borrowings (loans and receivables).

- 34 -

As of June 30, 2017 and December 31, 2016, the financial instruments to be set off and may be covered by master netting agreements and similar agreements are given as follows (Unit: Korean Won in millions):

	June 30, 2017
	Gross amounts of recognized financial assets		Gross amounts of recognized financial assets set off		Net amounts of financial assets presented		Related amounts not set off in the statement of financial position				Net amounts
							Financial instruments		Cash collateral received
Financial assets:
Derivative assets and others (*1)		1,661,151		3,449		1,657,702		11,258,098		16,246		527,050
Receivable spot exchange (*2)		10,143,692		—		10,143,692
Bonds purchased under resale agreements (*2)		10,861,627		—		10,861,627		10,861,627		—		—
Domestic exchanges receivable (*2)(*5)		26,869,426		26,584,300		285,126		—		—		285,126
Total		49,535,896		26,587,749		22,948,147		22,119,725		16,246		812,176
	June 30, 2017
	Gross amounts of recognized financial liabilities		Gross amounts of recognized financial liabilities set off		Net amounts of financial liabilities presented		Related amounts not set off in the statement of financial position				Net amounts
							Financial instruments		Cash collateral pledged
Financial liabilities:
Derivative liabilities and others (*1)		2,111,635		3,449		2,108,186		11,548,193		88,224		616,121
Payable spot exchange (*3)		10,144,352		—		10,144,352
Bonds sold under repurchase agreements (*4)		5,270		—		5,270		5,270		—		—
Domestic exchanges payable (*3)(*5)		30,929,646		26,584,299		4,345,347		4,345,347		—		—
Total		43,190,903		26,587,748		16,603,155		15,898,810		88,224		616,121
	December 31, 2016
	Gross amounts of recognized financial assets		Gross amounts of recognized financial assets set off		Net amounts of financial assets presented		Related amounts not set off in the statement of financial position				Net amounts
							Financial instruments		Cash collateral received
Financial assets:
Derivative assets and others (*1)		2,954,667		8,442		2,946,225		6,239,981		69,834		1,012,148
Receivable spot exchange (*2)		4,375,738		—		4,375,738
Bonds purchased under resale agreements (*2)		8,532,924		—		8,532,924		8,532,924		—		—
Domestic exchanges receivable (*2)(*5)		31,452,718		30,883,281		569,437		—		—		569,437
Total		47,316,047		30,891,723		16,424,324		14,772,905		69,834		1,581,585
	December 31, 2016
	Gross amounts of recognized financial liabilities		Gross amounts of recognized financial liabilities set off		Net amounts of financial liabilities presented		Related amounts not set off in the statement of financial position				Net amounts
							Financial instruments		Cash collateral pledged
Financial liabilities:
Derivative liabilities and others (*1)		3,459,959		8,442		3,451,517		6,389,463		105,270		1,337,208
Payable spot exchange (*3)		4,380,424		—		4,380,424
Bonds sold under repurchase agreements (*4)		106,605		—		106,605		106,605		—		—
Domestic exchanges payable (*3)(*5)		39,341,233		30,883,281		8,457,952		6,161,151		—		2,296,801
Total		47,288,221		30,891,723		16,396,498		12,657,219		105,270		3,634,009

(*1) The items include derivatives held for trading, held for hedging and equity-linked securities.

(*2) The items are included in loans and receivables.

(*3) The items are included in other financial liabilities.

(*4) The items are included in borrowings.

(*5) Certain financial assets and liabilities are presented as net amounts.

- 35 -

13. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES

(1) The Bank has the following subsidiaries (Unit: Korean Won in 100 millions, USD in 10 thousands, CNY in 100 millions, RUB in 100 millions, IDR in 100 millions, BRL in 10 thousands, PHP in 100 millions, VND in trillions):

Subsidiaries	Location	Capital stock		Main business
Woori FIS Co., Ltd.	Korea	KRW	245	System software development & maintenance
Woori Private Equity Asset Management Co., Ltd.	Korea	KRW	300	Finance
Woori Finance Research Institute Co., Ltd.	Korea	KRW	30	Other service business
Woori Card Co., Ltd. (*1)	Korea	KRW	8,963	Finance
Woori Investment Bank	Korea	KRW	2,371	Other credit finance business
Woori Private Equity Fund (*2)(*3)	Korea	KRW	—	Other financial business
Woori Credit Information Co., Ltd.	Korea	KRW	50	Credit information
Woori America Bank	America	USD	12,250	Finance
PT Bank Woori Saudara Indonesia 1906 Tbk	Indonesia	IDR	5,211	”
Woori Global Markets Asia Ltd.	Hong Kong	USD	10,000	”
Woori Bank China Limited	China	CNY	21.6	”
AO Woori Bank	Russia	RUB	14.5	”
Woori Brazil Bank	Brazil	BRL	7,709	”
Korea BTL Infrastructure Fund (*1)	Korea	KRW	7,800	”
Woori Fund Service Co., Ltd.	Korea	KRW	100	”
Woori Finance Cambodia (*1)	Cambodia	USD	1,300	”
Woori Finance Myanmar (*1)	Myanmar	USD	1,200	”
Wealth Development Bank	Philippine	PHP	7.7	”
Woori Bank Vietnam Limited	Vietnam	VND	3	”

	June 30, 2017					December 31, 2016
Subsidiaries	Number of shares owned		Percentage of ownership (%)		Financial statements as of	Number of shares owned		Percentage of ownership (%)		Financial statements as of
Woori FIS Co., Ltd.		4,900,000		100.0	Jun.30, 2017		4,900,000		100.0	Dec.31, 2016
Woori Private Equity Asset Management Co., Ltd.		6,000,000		100.0	Jun.30, 2017		6,000,000		100.0	Dec.31, 2016
Woori Finance Research Institute Co., Ltd.		600,000		100.0	Jun.30, 2017		600,000		100.0	Dec.31, 2016
Woori Card Co., Ltd. (*1)		179,266,200		100.0	Jun.30, 2017		169,266,200		100.0	Dec.31, 2016
Woori Investment Bank		275,761,491		58.2	Jun.30, 2017		275,761,491		58.2	Dec.31, 2016
Woori Private Equity Fund (*2)(*3)		—		28.9	Jun.30, 2017		46,061		28.9	Dec.31, 2016
Woori Credit Information Co., Ltd.		1,008,000		100.0	Jun.30, 2017		1,008,000		100.0	Dec.31, 2016
Woori America Bank		24,500,000		100.0	Jun.30, 2017		24,500,000		100.0	Dec.31, 2016
PT Bank Woori Saudara Indonesia 1906 Tbk		3,754,701,359		74.0	Jun.30, 2017		3,754,701,359		74.0	Dec.31, 2016
Woori Global Markets Asia Ltd.		78,000,000		100.0	Jun.30, 2017		78,000,000		100.0	Dec.31, 2016
Woori Bank China Limited		—		100.0	Jun.30, 2017		—		100.0	Dec.31, 2016
AO Woori Bank		57,999,999		100.0	Jun.30, 2017		57,999,999		100.0	Dec.31, 2016
Woori Brazil Bank		77,093,999		100.0	Jun.30, 2017		77,093,999		100.0	Dec.31, 2016
Korea BTL Infrastructure Fund (*1)		155,805,801		99.9	Jun.30, 2017		155,270,233		99.9	Dec.31, 2016
Woori Fund Service Co., Ltd.		2,000,000		100.0	Jun.30, 2017		2,000,000		100.0	Dec.31, 2016
Woori Finance Cambodia (*1)		13,000,000		100.0	Jun.30, 2017		3,000,000		100.0	Dec.31, 2016
Woori Finance Myanmar (*1)		1,200,000		100.0	Jun.30, 2017		200,000		100.0	Dec.31, 2016
Wealth Development Bank		3,931,365		51.0	Jun.30, 2017		3,931,365		51.0	Dec.31, 2016
Woori Bank Vietnam Limited		—		100.0	Jun.30, 2017		—		100.0	Dec.31, 2016

(*1) The Bank’s capital stock and number of holding shares have increased, attributed to capital increase of subsidiaries.

(*2) As Woori Private Equity Asset Management Co., Ltd., which is a subsidiary of the Bank, has a control over Woori Private Equity Fund as its general partner, it is deemed that the Bank has a control over the entity.

(*3) Due to return of capital invested occurred during the six months ended June 30, 2017, both capital stock and the number of shares became nil. Residual net assets will be distributed in proportion to ownership interests.

- 36 -

(2) As for the structured entities in accordance with K-IFRS 1110 and K-IFRS 1112, it is determined that the Bank controls the entity after considering facts and circumstances, such as the Bank’s power over the entity’s related business activities, the Bank’s exposure to variable returns from the its involvement with the entity, and the Bank’s ability to affect the returns through its power over the entity.

1) Details of structured entities which the Bank controls are as follows:

	As of June 30, 2017
Structured entities	Location		Main business		Percentage of ownership (%)		Financial statements as of
Structured entities established for securitization of financial assets (*1)
Kumho Trust First Co., Ltd. and 16 structures entities		Korea		Asset securitization		—		Jun.30, 2017
KAMCO Value Recreation First Securitization Specialty Co., Ltd.		Korea		”		15.0		Jun.30, 2017
Money Trust by Trust Business Act (*2)
Principle Guaranteed Trust and Principle and Interest Guaranteed Trust		Korea		Trust		—		Jun.30, 2017
Structured entities established for investment in securities and others
Samsung Plus Private Equity Investment Trust 36th and 21 structures entities		Korea		Securities investments		100.0		Jun.30, 2017
HeungkukWoori Tech Company Private Placement Investment Trust No.1		Korea		”		98.0		Jun.30, 2017
Consus Sakhalin Real Estate Investment Trust 1st		Korea		”		75.0		Jun.30, 2017
	As of December 31, 2016
Structured entities	Location		Main business		Percentage of ownership (%)		Financial statements as of
Structured entities established for securitization of financial assets (*1)
Kumho Trust First Co., Ltd. and 14 structures entities		Korea		Asset securitization		—		Dec.31, 2016
KAMCO Value Recreation First Securitization Specialty Co., Ltd.		Korea		”		15.0		Dec.31, 2016
Money Trust by Trust Business Act (*2)
Principle Guaranteed Trust and Principle and Interest Guaranteed Trust		Korea		Trust		—		Dec.31, 2016
Structured entities established for investment in securities and others
Samsung Plus Private Equity Investment Trust 36th and 33 structures entities		Korea		Securities investments		100.0		Dec.31, 2016
Consus Sakhalin Real Estate Investment Trust 1st		Korea		”		75.0		Dec.31, 2016

(*1) It is determined that the Bank controls the entity after considering all the facts and circumstances, such as the Bank’s power over the entity’s related business activities, the Bank’s exposure to variable returns from its involvement with the entity, and the Bank’s ability to affect the returns through its power over the entity, even though the Bank holds less than 50% ownership interest of the entity.

(*2) The Bank controls the trust because it has power that determines the management performance over the trust and is exposed to variable returns to absorb losses through the guarantees of payment of principal and fixed rate of return.

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2) The following companies have been excluded from the consolidation scope despite the Bank’s majority ownership interest as of June 30, 2017 and December 31, 2016

	As of June 30, 2017
Subsidiaries	Location	Main business	Percentage of ownership (%)
Golden Bridge NHN Online Private Equity Investment (*)	Korea	Securities investments		60.0
Mirae Asset Maps Clean Water Private Equity Investment Trust 7th (*)	Korea	Securities investments		59.7
Kiwoom Yonsei Private Equity Investment Trust (*)	Korea	Securities investments		88.9
	As of December 31, 2016
Subsidiaries	Location	Main business	Percentage of ownership (%)
Golden Bridge NHN Online Private Equity Investment (*)	Korea	Securities investments		60.0
Mirae Asset Maps Clean Water Private Equity Investment Trust 7th (*)	Korea	Securities investments		59.7
Kiwoom Yonsei Private Equity Investment Trust (*)	Korea	Securities investments		88.9
Kiwoom Frontier Professional Investment Private Fund 6 (Bond) (*)	Korea	Securities investments		50.0

(*) The Bank owns the majority ownership interest in these structured entities, but has no power on the investees’ relevant activities. As results, it is deemed that the Bank has no power or control on the structured entities.

(3) Investments in associates are as follows (Unit: Korean Won in 100 millions):

					June 30, 2017
Investee	Location	Capital		Main business	Number of shares owned		Percentage of ownership (%)		Financial statements as of
Kumho Tires Co., Inc. (*1)(*5)	Korea		7,900	Manufacturing		22,357,561		14.2	Mar.31, 2017(*6)
Woori Blackstone Korea Opportunity No.1 Private Equity Fund	Korea		295	Finance		6,332,435,273		21.4	Jun.30, 2017
Woori Service Networks Co., Ltd. (*3)	Korea		5	Freight & staffing		4,704		4.9	May.31, 2017(*6)
Korea Credit Bureau Co., Ltd. (*2)	Korea		100	Credit information		180,000		9.9	Jun.30, 2017
Korea Finance Security Co., Ltd. (*3)	Korea		60	Security service		180,000		15.0	May.31, 2017(*6)
Chin Hung International Inc. (*5)(*9)	Korea		733	Construction		37,059,405		25.3	May.31, 2017(*6)
Poonglim Industrial Co., Ltd. (*7)	Korea		736	Construction		4,142,782		29.7	Mar.31, 2017(*6)
STX Engine Co., Ltd. (*1)(*5)	Korea		691	Manufacturing		8,082,650		29.2	Mar.31, 2017(*6)
Samho International Co., Ltd. (*1)(*5)(*14)	Korea		759	Construction		1,190,000		7.8	—
Force TEC Co., Ltd. (*4)(*11)	Korea		—	Freight & staffing		—		—	—
STX Corporation (*1)(*5)(*12)	Korea		4,785	Wholesale of Non-Specialized Goods		37,724,008		19.7	Mar.31, 2017(*6)
Saman Corporation (*2)	Korea		7	General Construction Technology Service		12,542		9.2	Mar.31, 2017(*6)
Dongwoo C & C Co., Ltd. (*4)	Korea		7	Construction		13,317		23.2	—
SJCO Co., Ltd. (*4)	Korea		26	Aggregate transportation and Wholesale		70,529		26.5	—
G2 collection Co., Ltd. (*4)	Korea		2	Wholesale and retail sales		12,574		28.9	—
The Base Enterprise Co., Ltd. (*4)	Korea		7	Manufacturing		68,470		48.4	—
Heungjiwon Co., Ltd. (*4)	Korea		6	Other printing		32,849		27.8	—
Kyesan Engineering Co., Ltd. (*4)	Korea		13	Construction		60,581		23.2	—
Good Software Lab Co., Ltd. (*4)	Korea		3	Service		17,121		28.9	—
Wongwang Co., Ltd. (*4)	Korea		1	Wholesale and real estate		2,590		29.0	—
Sejin Construction Co., Ltd. (*4)	Korea		4	Construction		12,123		29.6	—
Deokwon Food Co., Ltd. (*4)(*15)	Korea		—	Poultry processing and storage		—		—	—
QTS Shipping Co., Ltd. (*4)	Korea		4	Complex transportation brokerage		17,460		49.4	—
Reading Doctors Co., Ltd. (*4)(*10)	Korea		1	Other services		7,398		35.4	—
PREXCO Co., Ltd. (*4)(*10)	Korea		16	Manufacturing		919,972		28.1	—
Hyunwoo International Co., Ltd. (*4)(*10)	Korea		12	Manufacturing		59,873		25.9	—
Woori Growth Partnerships New Technology Private Equity Fund (*13)	Korea		817	Other financial services		18,849		23.1	Jun.30, 2017
DAEA SNC Co., Ltd. (*4)	Korea		1	Wholesale and retail sales		1,253		24.0	—
ARES-TECH Co., Ltd.(*4)	Korea		2	Electronic component manufacturing		7,187		23.4	—
2016KIF-IMM Woori Bank Technology Venture Fund (*13)	Korea		252	Other financial services		5,040,000,000		20.0	Jun.30, 2017
K BANK Co. Ltd., (*2)	Korea		2,500	Finance		6,500,000		13.0	May.31, 2017 (*6)
Smart Private Equity Fund No.2(*8)	Korea		150	Other financial services		3,000,000,000		20.0	Jun.30, 2017
Woori Bank-Company K Korea Movie Asset Fund(*8)	Korea		60	Other financial services		1,500,000,000		25.0	Jun.30, 2017

- 38 -

					December 31, 2016
Investee	Location	Capital		Main business	Number of shares owned		Percentage of ownership (%)		Financial statements as of
Kumho Tires Co., Inc. (*1)(*5)	Korea		7,900	Manufacturing		22,357,561		14.2	Sep.30, 2016(*6)
Woori Blackstone Korea Opportunity No.1 Private Equity Fund	Korea		295	Finance		6,332,435,273		21.4	Dec.31, 2016
Woori Service Networks Co., Ltd. (*3)	Korea		5	Freight & staffing		4,704		4.9	Nov.30, 2016(*6)
Korea Credit Bureau Co., Ltd. (*2)	Korea		100	Credit information		180,000		9.9	Dec.31, 2016
Korea Finance Security Co., Ltd. (*3)	Korea		60	Security service		180,000		15.0	Nov.30, 2016(*6)
Chin Hung International Inc. (*5)(*9)	Korea		769	Construction		43,709,400		28.4	Nov.30, 2016(*6)
Poonglim Industrial Co., Ltd. (*7)	Korea		736	Construction		4,146,811		29.7	Sep.30, 2016(*6)
STX Engine Co., Ltd. (*1)(*5)	Korea		691	Manufacturing		8,082,650		29.2	Sep.30, 2016(*6)
Samho International Co., Ltd. (*1)(*5)(*14)	Korea		759	Construction		1,190,000		7.8	Dec.31, 2016
Force TEC Co., Ltd. (*4)(*11)	Korea		118	Freight & staffing		8,087,128		34.4	—
STX Corporation (*1)(*5)(*12)	Korea		748	Wholesale of Non-Specialized Goods		4,472,248		9.5	Sep.30, 2016(*6)
Saman Corporation (*2)	Korea		7	General Construction Technology Service		12,542		9.2	Sep.30, 2016(*6)
Dongwoo C & C Co., Ltd. (*4)	Korea		7	Construction		13,317		23.2	—
SJCO Co., Ltd. (*4)	Korea		26	Aggregate transportation and Wholesale		70,529		26.5	—
G2 collection Co., Ltd. (*4)	Korea		2	Wholesale and retail sales		12,574		28.9	—
The Base Enterprise Co., Ltd. (*4)	Korea		7	Manufacturing		68,470		48.4	—
Heungjiwon Co., Ltd. (*4)	Korea		6	Other printing		32,849		27.8	—
Kyesan Engineering Co., Ltd. (*4)	Korea		13	Construction		60,581		23.2	—
Good Software Lab Co., Ltd. (*4)	Korea		3	Service		17,121		28.9	—
Wongwang Co., Ltd. (*4)	Korea		1	Wholesale and real estate		2,590		29.0	—
Sejin Construction Co., Ltd. (*4)	Korea		4	Construction		12,123		29.6	—
Deokwon Food Co., Ltd. (*4) (*15)	Korea		3	Poultry processing and storage		14,300		27.3	—
QTS Shipping Co., Ltd. (*4)	Korea		3	Complex transportation brokerage		17,460		49.4	—
Woori Growth Partnerships New Technology Private Equity Fund (*13)	Korea		589	Other finance services		13,602		23.1	Dec.31, 2016
DAEA SNC Co., Ltd. (*4)	Korea		1	Wholesale and retail sales		1,253		24.0	—
ARES-TECH Co., Ltd. (*4)	Korea		2	Electronic component manufacturing		7,187		23.4	—
2016KIF-IMM Woori Bank Technology Venture Fund (*13)	Korea		90	Other financial services		1,800,000,000		20.0	Dec.31, 2016
K BANK Co., Ltd. (*2)	Korea		2500	Finance		6,500,000		13.0	Nov.30, 2016(*6)

(*1) The Bank has significant influence in the creditors’ council.

(*2) The Bank can participate in the decision making body and exercise significant influence over the associates through business partnerships.

(*3) Most of the significant business transactions are with the Bank.

(*4) The carrying values of investments in Reading Doctors Co., Ltd, PREXCO Co., Ltd and Hyunwoo International Co., Ltd are nill as of June 30, 2017 and those of investments in Force TEC Co., Ltd and Deokwon Food Co., Ltd, are nil as of December 31, 2016. Furthermore, those of investments in Dongwoo C&C Co., Ltd, SJCO Co., Ltd, G2 collection Co., Ltd, The Base Enterprise Co., Ltd, Heungjiwon Co., Ltd, Kyesan Engineering Co., Ltd, Good Software Lab Co., Ltd, Wongwang Co., Ltd, Sejin Construction Co., Ltd, QTS Shipping Co., Ltd, DAEA SNC Co., Ltd and ARES-TECH Co., Ltd are nill as of both December 31, 2016 and June 30, 2017.

(*5) The investments in associates that have quoted market prices are Kumho Tire Co., Ltd. (current period: KRW 7,510, previous year: KRW 8,480), Chin Hung International Inc. (current period: KRW 2,250, previous year: KRW 2,090), STX Engine Co., Ltd. (current period: KRW 19,000, previous year: KRW 6,630), Samho International Co., Ltd. (current period: KRW 20,500, previous year: KRW 16,900), STX Corporation. (previous year: KRW 1,660).

(*6) The significant transactions and events between the end of reporting period of the associates and the Bank have been properly incorporated.

(*7) The Bank has sold a part of shares of the associates so the number of shares holding has decreased.

(*8) Due to capital contribution by the Bank during the six months ended June 30, 2017, the entities were included in the investment in associates.

(*9) Due to the consolidation of stocks and debt-equity swap of the associates, the Bank’s number of holding shares and ownership ratio decreased.

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(*10) Even though the Bank’s ownership ratio of the entity was more than 20%, the Bank did not have significant influence over the entity due to the fact that the entity was going through workout process under receivership, and thus the entity was excluded from the investment in associates. However, as the workout process was completed during the six months ended June 30, 2017, it has been included in the investment in associates.

(*11) Force TEC Co., Ltd is not in scope for the associates, because the Bank does not have significant influence over the entity due to the fact that it is going through workout process under receivership as of June 30, 2017.

(*12) Due to debt-equity swap of STX Corporation, capital stock, the Bank’s number of holding shares and ownership ratio increased.

(*13) Due to capital increase of associates, the Bank’s number of capital stock and holding shares increased.

(*14) The investments in associates were transferred to assets held for sale during the six months ended June 30, 2017.

(*15) As the Bank sold its entire ownership interest of the entities, they were exclude from the investment in associates.

(4) The entities excluded from associates, although the Bank’s ownership interest in them is higher than 20% as of June 30, 2017 and December 31, 2016 are as follows:

	As of June 30, 2017
Associate (*)	Number of shares owned		Percentage of ownership
Orient Shipyard Co., Ltd.		465,050		23.0	%
Saenuel Co., Ltd.		3,531		37.4	%
E Mirae Tech Co., Ltd.		7,696		41.0	%
Jehin Trading Co., Ltd.		81,610		27.3	%
NK Eng Co., Ltd.		697,033		23.1	%
The Season Company Co., Ltd.		18,187		30.1	%
Yuil PESC Co., Ltd.		8,642		24.0	%
Youngdong Sea Food Co., Ltd.		12,106		24.0	%
Sinseong Trading Co., Ltd.		2,584		27.2	%
CL Tech Co., Ltd		13,759		38.6	%
Force TEC Co., Ltd.		4,780,907		25.8	%
Cultizm Korea LTD Co., Ltd.		858		31.3	%
Protronics Co., Ltd.		95,921		48.1	%
	As of December 31, 2016
Associate (*)	Number of shares owned		Percentage of ownership
Orient Shipyard Co., Ltd.		465,050		23.0	%
Saenuel Co., Ltd.		3,531		37.4	%
E Mirae Tech Co., Ltd.		7,696		41.0	%
Jehin Trading Co., Ltd.		81,610		27.3	%
NK Eng Co., Ltd.		697,033		23.1	%
The Season Company Co., Ltd.		18,187		30.1	%
Yuil PESC Co., Ltd.		8,642		24.0	%
Reading Doctors Co., Ltd.		7,398		35.4	%
Youngdong Sea Food Co., Ltd.		12,106		24.0	%
Sinseong Trading Co., Ltd.		2,584		27.2	%
PREXCO Co., Ltd.		919,972		28.1	%
Hyunwoo International Co., Ltd.		59,873		25.9	%

(*) Even though the Bank’s ownership interest in the entity is more than 20%, it is determined that the Bank does not have significant influence over the entity since it is going through work-out process under receivership, thus it is excluded from the investment in associates.

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(5) Changes in carrying value of investments in subsidiaries and associates are as follows (Korean Won in millions). Because the investments associated with structured entities were classified as financial assets at FVTPL or AFS financial assets, they were excluded from the carrying value of investments in subsidiaries and associates.

	For the six months ended June 30, 2017
Investee	January 1, 2017		Acquisitions (*1)		Disposals and others(*2)			Impairment			June 30, 2017
Woori FIS Co., Ltd.		35,362		—		—			—			35,362
Woori Private Equity Asset Management Co., Ltd.		43,227		—		—			—			43,227
Woori Finance Research Institute Co., Ltd.		3,364		—		—			—			3,364
Woori Card Co., Ltd.		1,174,260		100,000		—			—			1,274,260
Woori Investment Bank		79,992		—		—			—			79,992
Woori Private Equity Fund		9,018		—		(9,018	)		—			—
Woori Credit Information Co., Ltd.		24,666		—		—			—			24,666
Woori America Bank		202,371		—		—			—			202,371
PT Bank Woori Saudara Indonesia 1906 Tbk		215,400		—		—			—			215,400
Woori Global Markets Asia Ltd.		113,858		—		—			—			113,858
Woori Bank China Limited		427,802		—		—			—			427,802
AO Woori Bank		51,780		—		—			—			51,780
Woori Brazil Bank		44,045		—		—			—			44,045
Korea BTL Infrastructure Fund		780,525		2,700		(36	)		—			783,189
Woori Fund Service Co., Ltd.		10,000		—		—			—			10,000
Woori Finance Cambodia		4,600		11,250		—			—			15,850
Woori Finance Myanmar		2,389		11,260		—			—			13,649
Wealth Development Bank		25,675		—		(1,320	)		—			24,355
Woori Bank Vietnam Limited		155,400		—		—			—			155,400
Kumho Tire Co., Inc.		175,652		—		—			—			175,652
Woori Blackstone Korea Opportunity No.1 Private Equity Fund		5,418		—		—			—			5,418
Woori Service Networks Co., Ltd.		108		—		—			—			108
Korea Credit Bureau Co., Ltd.		3,313		—		—			—			3,313
Korea Finance Security Co., Ltd.		3,267		—		—			—			3,267
Chin Hung International Inc.		67,467		41,053		—			(25,136	)		83,384
Poonglim Industrial Co., Ltd.		4,256		—		—			(4,250	)		6
STX Engine Co., Ltd.		44,615		—		—			—			44,615
SamHo Co., Ltd.		7,492		—		(7,492	)		—			—
STX Corporation		7,424		8,546		—			(8,161	)		7,809
Saman Corporation		8,521		—		—			—			8,521
Woori Growth Partnerships New Technology Private Equity Fund		13,602		5,745		(498	)		—			18,849
2016KIF-IMM Woori Bank Technology Venture Fund		1,800		3,240		—			—			5,040
K BANK Co., Ltd.		32,500		—		—			—			32,500
Smart Private Equity Fund No.2		—		3,000		—			—			3,000
Woori Bank-Company K Korea Movie Asset Fund		—		1,500		—			—			1,500
		3,779,169		188,294		(18,364	)		(37,547	)		3,911,552

(*1) Investments in associates increased by 49,599 million Won through transfers between accounts, such as loan-equity swap occurred during the six months ended June 30, 2017.

(*2) Investments in associates decreased by 7,492 million Won through transfers to assets held for sale occurred during the six months ended June 30, 2017.

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	For the six months ended June 30, 2016
Investee	January 1, 2016		Acquisitions(*1)		Disposals and others (*2)			Impairment			June 30, 2016
Woori FIS		35,362		—		—			—			35,362
Woori Private Equity Asset Management Co., Ltd.		43,227		—		—			—			43,227
Woori Finance Research Institute		3,364		—		—			—			3,364
Woori Card		1,174,260		—		—			—			1,174,260
Woori Investment Bank		79,992		—		—			—			79,992
Woori Private Equity Fund		11,297		—		(2,279	)		—			9,018
Woori Credit Information Co., Ltd.		24,666		—		—			—			24,666
Woori America Bank		202,371		—		—			—			202,371
PT Bank Woori Saudara Indonesia 1906 Tbk		215,400		—		—			—			215,400
Woori Global Markets Asia Ltd.		113,858		—		—			—			113,858
Woori Bank China Limited		427,802		—		—			—			427,802
Zao Woori Bank		51,780		—		—			—			51,780
Woori Brazil Bank		44,045		—		—			—			44,045
Korea BTL Infrastructure Fund		735,173		28,999		(422	)		—			763,750
Woori Fund Service Co., Ltd.		10,000		—		—			—			10,000
Woori Finance Cambodia		4,600		—		—			—			4,600
Woori Finance Myanmar		2,389		—		—			—			2,389
Kumho Tire Co., Inc.		175,652		—		—			—			175,652
Woori Blackstone Korea Opportunity No.1 Private Equity Fund		35,682		—		(8,581	)		—			27,101
Woori Service Networks Co., Ltd.		108		—		—			—			108
Korea Credit Bureau Co., Ltd.		3,313		—		—			—			3,313
Korea Finance Security Co., Ltd.		3,267		—		—			—			3,267
United PF 1st Corporate Financial Stability		172,441		—		(172,441	)		—			—
Chin Hung International Inc.		67,467		—		—			—			67,467
Poonglim Industrial Co., Ltd.		5,123		—		—			(186	)		4,937
STX Engine Co., Ltd.		50,831		—		—			(2,642	)		48,189
SamHo Co., Ltd.		7,492		—		—			—			7,492
STX Corporation		14,311		—		—			(4,025	)		10,286
Osung LST Co., Ltd.		6,453		—		—			—			6,453
Saman Corporation		8,521		—		—			—			8,521
K-Growth crowd 2step Fund		—		800		—			—			800
Woori Growth Partnerships New Technology Private Equity Fund		—		5,421		—			—			5,421
		3,730,247		35,220		(183,723	)		(6,853	)		3,574,891

(*1) Investments in associates increased by 5,421 million Won through transfers between accounts, such as loan-equity swap occurred during the six months ended June 30, 2016.

(*2) Investments in associates decreased by 172,441 million Won through transfers to AFS financial assets occurred during the six months ended June 30, 2016

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14. INVESTMENT PROPERTIES

(1) Investment properties are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Acquisition cost		370,368			372,255
Accumulated depreciation		(25,718	)		(23,862	)
Net carrying value		344,650			348,393

(2) Changes in investment properties are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Beginning balance		348,393			344,892
Acquisition		795			—
Depreciation		(1,789	)		(1,759	)
Transfer		(2,708	)		15,627
Foreign currencies translation adjustments		(41	)		(4	)
Ending balance		344,650			358,756

(3) Fair value of investment properties is amounting to 369,374 million Won and 374,106 million Won as of June 30, 2017 and December 31, 2016, respectively. The fair value of investment property, based on the assessment that was independently performed by external appraisal agencies, is classified as level 3 on the fair value hierarchy as of June 30, 2017 and December 31, 2016.

(4) Rental fee earned from investment properties is amounting to 7,084 million Won and 6,823 million Won for the six months ended June 30, 2017 and 2016, respectively.

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15. PREMISES AND EQUIPMENT

(1) Details of premises and equipment are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Land		Buildings			Properties for business use			Structures in leased office			Construction in progress		Total
Acquisition cost		1,472,804		838,026			485,159			383,651			37,754		3,217,394
Accumulated depreciation		—		(167,836	)		(368,403	)		(336,409	)		—		(872,648	)
Net carrying value		1,472,804		670,190			116,756			47,242			37,754		2,344,746

	December 31, 2016
	Land		Buildings			Properties for business use			Structures in leased office			Construction in progress		Total
Acquisition cost		1,472,720		835,671			472,676			381,593			13,663		3,176,323
Accumulated depreciation		—		(155,905	)		(351,103	)		(327,035	)		—		(834,043	)
Net carrying value		1,472,720		679,766			121,573			54,558			13,663		2,342,280

(2) Details of changes in premises and equipment are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017
	Land			Buildings			Properties for business use			Structures in leased office			Construction in progress			Total
Beginning balance		1,472,720			679,766			121,573			54,558			13,663			2,342,280
Acquisitions		—			3,198			17,136			4,652			24,330			49,316
Disposals		(606	)		(205	)		(30	)		(409	)		—			(1,250	)
Depreciation		—			(12,494	)		(21,454	)		(16,196	)		—			(50,144	)
Classified to assets held for sale		(1,743	)		(441	)		—			—			—			(2,184	)
Transfer		2,466			403			68			—			(229	)		2,708
Foreign currencies translation adjustments		(33	)		(31	)		73			(151	)		(10	)		(152	)
Others		—			(6	)		(610	)		4,788			—			4,172
Ending balance		1,472,804			670,190			116,756			47,242			37,754			2,344,746

	For the six months ended June 30, 2016
	Land			Buildings			Properties for business use			Structures in leased office			Construction in progress			Total
Beginning balance		1,478,209			691,830			106,155			64,790			522			2,341,506
Acquisitions		—			5,520			26,241			6,298			1,187			39,246
Disposals		—			—			(137	)		(1,324	)		(67	)		(1,528	)
Depreciation		—			(12,284	)		(20,564	)		(28,561	)		—			(61,409	)
Classified to assets held for sale		(3,418	)		(2,317	)		—			—			—			(5,735	)
Transfer		(10,364	)		(5,263	)		—			—			—			(15,627	)
Foreign currencies translation adjustments		(3	)		21			9			24			(4	)		47
Others		145			(6	)		17			18,100			—			18,256
Ending balance		1,464,569			677,501			111,721			59,327			1,638			2,314,756

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16. INTANGIBLE ASSETS

(1) Details of intangible assets are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Industrial property rights			Development cost			Others			Membership deposits			Total
Acquisition cost		660			182,141			574,003			11,807			768,611
Accumulated amortization		(414	)		(21,591	)		(468,448	)		—			(490,453	)
Accumulated impairment losses		—			—			—			(2,316	)		(2,316	)
Net carrying value		246			160,550			105,555			9,491			275,842

	December 31, 2016
	Industrial property rights			Development cost			Others			Membership deposits			Total
Acquisition cost		625			117,954			566,054			11,921			696,554
Accumulated amortization		(367	)		(17,114	)		(434,540	)		—			(452,021	)
Accumulated impairment losses		—			—			—			(2,303	)		(2,303	)
Net carrying value		258			100,840			131,514			9,618			242,230

(2) Details of changes in intangible assets are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017
	Industrial property rights			Development cost			Others			Membership deposit			Total
Beginning balance		258			100,840			131,514			9,618			242,230
Acquisition		35			64,285			8,036			219			72,575
Disposals		—			—			—			(316	)		(316	)
Amortization (*)		(47	)		(4,483	)		(28,064	)		—			(32,594	)
Impairment loss		—			—			—			(12	)		(12	)
Transfer		—			(36	)		36			—			—
Foreign currencies translation adjustment		—			—			178			(18	)		160
Others		—			(56	)		(6,145	)		—			(6,201	)
Ending balance		246			160,550			105,555			9,491			275,842

(*) Amortization of other intangible assets amounting to 24,443 million Won is included in other operating expenses.

	For the six months ended June 30, 2016
	Industrial property rights			Development cost			Others			Membership deposit			Total
Beginning balance		283			14,248			164,279			8,710			187,520
Acquisition		—			11,634			21,810			187			33,631
Disposals		—			—			—			(200	)		(200	)
Amortization		(39	)		(831	)		(26,037	)		—			(26,907	)
Reversal of impairment loss		—			—			—			304			304
Foreign currencies translation adjustment		—			—			3			7			10
Others		—			—			(10	)		—			(10	)
Ending balance		244			25,051			160,045			9,008			194,348

17. ASSETS HELD FOR SALE

Assets held for sale are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Investments in subsidiaries and associates		7,492		—
Premises and equipment		85		2,342
Total		7,577		2,342

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18. ASSETS SUBJECT TO LIEN AND ASSETS ACQUIRED THROUGH FORECLOSURES

(1) Assets subjected to lien are as follows (Unit: Korean Won in millions):

		June 30, 2017
		Collateral given to	Amount		Reason for collateral
Loan and receivables	Due from banks in local currency	Samsung Securities Co., Ltd. and others		7,456	Margin deposit for futures or option
	Due from banks in foreign currencies	Korea Investment & Securities Co., Ltd. and others		246,722	Foreign margin deposit for future or option and others
Financial assets at FVTPL	Financial institutions debt securities and others	Yuanta Securities Co., Ltd. and others		254,107	Substitute securities and others
AFS financial assets	Corporate bonds	Korea Securities Depository		10,032	Related to bonds sold under repurchase agreements (*)
	Korean treasury and government agencies bonds and others	BOK and others		2,087,563	Settlement risk and others
HTM financial assets	Corporate bonds and others	Korea Securities Depository		7,139	Related to bonds sold under repurchase agreements (*)
	Korean treasury and government agencies bonds and others	BOK and others		7,058,820	Settlement risk and others
		Total		9,671,839
		December 31, 2016
		Collateral given to	Amount		Reason for collateral
Loan and receivables	Due from banks in local currency	Samsung Securities Co., Ltd. and others		22,870	Margin deposit for future or option and others
	Due from banks in foreign currencies	Korea Investment & Securities Co., Ltd. and others		225,169	Foreign margin deposit for future or option and others
Financial assets at FVTPL	Financial institutions debt securities and others	Yuanta Securities Co., Ltd. and others		458,476	Substitute securities and others
AFS financial assets	Korean treasury and government agencies bonds	Korea Securities Depository and others		220,098	Related to bonds sold under repurchase agreements (*)
	Financial institutions debt securities and others	BOK and others		3,116,810	Settlement risk and others
HTM financial assets	Korean treasury and government agencies bonds	Korea Securities Depository and others		7,133	Related to bonds sold under repurchase agreements (*)
	Korean treasury and government agencies bonds and others	BOK and others		6,181,192	Settlement risk and others
		Total		10,231,748

(*) The Bank has the agreements to repurchase the sold assets as the pre-determined price or the price which include the rate of return and provide the guarantee on the assets. The transferee has the right to sale or to provide as guarantee. Therefore the Bank does not derecognize the assets, but recognizes the relevant amounts as liability (bond sold under repurchase agreements).

(2) There is no asset which the Bank has acquired through foreclosure as of June 30, 2017 and December 31, 2016.

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(3) Securities loaned are as follows (Unit: Korean Won in millions):

		June 30, 2017		December 31, 2016		Loaned to
Financial assets at FVTPL	Equity securities-listed stock		—		4,459	Samsung Securities Co., Ltd. and others
AFS financial assets	Korean treasury and government agencies bonds and others		171,688		493,579	Korea Securities Finance Corporation and others
Total			171,688		498,038

Securities loaned are lending of specific securities to borrowers who agree to return the same quantity of the same security at the end of lending period. As the Bank does not derecognize these securities, there are no liabilities recognized through such transactions relates to securities loaned.

(4) Collaterals held that can be disposed and re-subjected to lien regardless of defaults of counterparties

Fair values of collaterals held can be disposed and re-subjected to lien regardless of defaults of counterparties as of June 30, 2017 and December 31, 2016 are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Fair values of collaterals		Fair values of collaterals were disposed or re-subjected to lien
Securities		11,198,910		—
	December 31, 2016
	Fair values of collaterals		Fair values of collaterals were disposed or re-subjected to lien
Securities		8,746,101		—

19. OTHER ASSETS

Details of other assets are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Prepaid expenses		93,476		92,895
Advance payments		20		404
Others		2,871		3,627
Total		96,367		96,926

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20. FINANCIAL LIABILITY AT FVTPL

(1) Financial liabilities at FVTPL are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Financial liabilities held for trading		1,891,197		3,026,599
Financial liabilities designated at FVTPL		616,177		766,880
Total		2,507,374		3,793,479

(2) Financial liabilities held for trading are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Deposits
Gold banking liabilities		31,184		26,501
Derivative liabilities		1,860,013		3,000,098
Total		1,891,197		3,026,599

(3) Financial liabilities designated at FVTPL are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Equity linked securities index
Equity linked securities index in short position		522,587		673,906
Debentures
Debentures in local currency		93,590		92,974
Total		616,177		766,880

(4) Credit risk adjustments to financial liabilities designated at FVTPL are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Financial liabilities designated at FVTPL subject to credit risk adjustments		616,177			783,760
Changes in fair value for credit risk adjustments		(115	)		(324	)
Accumulated changes in credit risk adjustments		(15,893	)		(15,323	)

Credit risk adjustments are applied to reflect the Bank’s own credit risk when measuring derivative liabilities at fair value. The methodology to determine the adjustment incorporates the Bank’s credit spread as observed through credit ratings.

(5) The difference between financial liabilities at FVTPL’s carrying amount and nominal amount at maturity are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Carrying amount		616,177			766,880
Nominal amount at maturity		658,114			902,375
Difference		(41,937	)		(135,495	)

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21. DEPOSITS DUE TO CUSTOMERS

Details of deposits due to customers by type are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Deposits in local currency:
Deposits on demand		7,834,286			9,496,455
Deposits at termination		190,546,882			183,864,984
Mutual installment		35,623			37,128
Certificate of deposits		4,833,845			3,782,549
Sub-total		203,250,636			197,181,116
Deposits in foreign currencies		13,114,599			14,225,208
Present value discount		(43,529	)		(23,944	)
Total		216,321,706			211,382,380

22. BORROWINGS AND DEBENTURES

(1) Details of borrowings as are as follows (Unit: Korean Won in millions):

	June 30, 2017
	Lender	Interest rate (%)		Amount
Borrowings in local currency:
Borrowings from the BOK	The BOK		0.5 ~ 0.8		1,409,422
Borrowing from government funds	Small & Medium Business Corporation and others		0.0 ~ 3.5		1,616,014
Others	The Korea Development Bank and others		0.0 ~ 3.8		3,219,224
Sub-total					6,244,660
Borrowings in foreign currencies:
Borrowings in foreign currencies	The Export-Import Bank of Korea and others		0.0 ~ 4.5		7,191,850
Offshore borrowings in foreign currencies	Commonwealth Bank and others		1.6		30,085
Sub-total					7,221,935
Bills sold	Others		0.0 ~ 1.2		43,048
Call-money	Banks and others		0.0 ~ 4.7		734,070
Bonds sold under repurchase agreements	Other financial institutions		0.6 ~ 4.5		5,270
Present value discount					(365	)
Total					14,248,618
	December 31, 2016
	Lender	Interest rate (%)		Amount
Borrowings in local currency:
Borrowings from the BOK	The BOK		0.5 ~ 0.8		1,598,553
Borrowing from government funds	Small & medium Business Corporation and others		0.0 ~ 3.5		1,534,807
Others	Seoul Metropolitan Government and others		0.0 ~ 3.8		3,446,894
Sub-total					6,580,254
Borrowings in foreign currencies:
Borrowings in foreign currencies	The Export-Import Bank of Korea and others		0.0 ~ 5.2		7,547,555
Offshore borrowings in foreign currencies	Wells Fargo		1.4		18,127
Sub-total					7,565,682
Bills sold	Others		0.0 ~ 1.6		26,895
Call-money	Banks and others		0.0 ~ 5.1		1,782,052
Bonds sold under repurchase agreements	Other financial institutions		0.6 ~ 4.5		106,605
Present value discount					(667	)
Total					16,060,821

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(2) Details of debentures are as follows (Unit: Korean Won in millions):

	June 30, 2017					December 31, 2016
	Interest rate (%)		Amount			Interest rate (%)		Amount
Face value of bond (*):
Ordinary bonds		1.5 ~ 5.8		15,233,869			1.5 ~ 7.2		12,889,422
Subordinated bonds		3.0 ~ 5.9		4,708,869			3.0 ~ 5.9		5,309,375
Sub-total				19,942,738					18,198,797
Discount on bonds				(32,614	)				(32,740	)
Total				19,910,124					18,166,057

(*) Included debentures under fair value hedge relationships are 3,410,390 million Won and 3,610,193 million Won as of June 30, 2017 and December 31, 2016, respectively.

23. PROVISIONS

(1) Details of provisions are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Asset retirement obligation		56,317		52,838
Provisions for guarantees (*1)		190,388		240,023
Provisions for unused commitments		51,290		53,919
Provisions for customer reward credits		28,520		18,170
Other provisions (*2)		12,475		15,523
Total		338,990		380,473

(*1) Provisions for guarantee include provision for financial guarantee of 62,787 million Won and 70,153 million Won as of June 30, 2017 and December 31, 2016, respectively.

(*2) Other provisions consist of provision for litigation, provision for loss recovery, and others.

(2) Changes in provision except for asset retirement obligation are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017
	Provision for guarantees			Provision for unused commitments			Provisions for customer reward credits			Other provisions			Total
Beginning balance		240,023			53,919			18,170			15,523			327,635
Provisions provided		—			—			3,551			2,247			5,798
Provisions used		(12,337	)		(41	)		(27,744	)		(5,295	)		(45,417	)
Reversal of unused amount		(45,218	)		(2,588	)		—			—			(47,806	)
Transfer(*)		—			—			28,876			—			28,876
Others		7,920			—			5,667			—			13,587
Ending balance		190,388			51,290			28,520			12,475			282,673

(*) According to contracts with the third parties, Bank ultimately will be reimbursed for which it has paid out on behalf of customers, which has incurred through their customer loyalty programs. Therefore, when such obligation incurs, the Bank recognizes it as “transfer”, but there is no impact on the Bank’s expense.

	For the six months ended June 30, 2016
	Provision for guarantees			Provision for unused commitments			Provisions for customer reward credits			Other provisions			Total
Beginning balance		366,873			45,773			—			19,308			431,954
Provisions provided		—			—			19			1,627			1,646
Provisions used		(73,475	)		7			(8	)		(6,415	)		(79,891	)
Reversal of unused amount		(76,810	)		(1,187	)		—			—			(77,997	)
Others		10,775			—			—			—			10,775
Ending balance		227,363			44,593			11			14,520			286,487

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(3) Changes in asset retirement obligation are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Beginning balance		52,838			35,933
Provisions provided		619			451
Provisions used		(416	)		(430	)
Reversal of provisions unused		(715	)		—
Amortization		196			207
Changes in restoration cost and others		3,795			17,114
Ending balance		56,317			53,275

24. NET DEFINED BENEFIT ASSET

The Bank’s defined benefit plans characteristics are as follows:

Employees and directors with one or more years of service are entitled to receive a payment upon termination of their employment, based on their length of service and rate of pay at the time of termination. The assets of the plans are measured at their fair value at the end of reporting date. Plan liabilities are measured using the projected unit method, which takes account of projected earnings increases, using actuarial assumptions that give the best estimate of the future cash flows that will arise under the plan liabilities.

The Bank exposed to various risks through Defined Benefit Retirement Pension Plan, and the most significant risks are as follows:

Volatility of asset	The defined benefit obligation was estimated with an interest rate calculated based on blue chip corporate bonds earnings. A deficit may occur if the rate of return of plan assets falls short of the interest rate.
Decrease in profitability of blue chip bonds	A decrease in profitability of blue chip bonds will be offset by some increase in the value of debt securities that the employee benefit plan owns but will bring an increase in the defined benefit obligation.
Risk of inflation	Defined benefit obligations are related to inflation rate; the higher the inflation rate is, the higher the level of liabilities. Therefore, deficit occurs in the system if an inflation rate increases.

(1) Details of net defined benefit asset are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Defined benefit obligation		965,157			919,707
Fair value of plan assets		(974,626	)		(990,645	)
Net defined benefit assets		(9,469	)		(70,938	)

(2) Changes in the carrying value of defined benefit obligation are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Beginning balance		919,707			846,368
Current service cost		67,508			70,842
Interest expense		12,758			11,631
Remeasurements		4,121			58,586
Foreign currencies translation adjustments		(42	)		43
Retirement benefit paid		(28,819	)		(28,276	)
Curtailment or liquidation		(10,076	)		(9,153	)
Ending Balance		965,157			950,041

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(3) Changes in the plan assets are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Beginning balance		990,645			800,690
Interest income		14,718			11,975
Remeasurements		(7,685	)		(421	)
Employer’s contributions		15,000			155,000
Retirement benefit paid		(27,657	)		(27,940	)
Curtailment or liquidation		(10,395	)		(8,814	)
Ending balance		974,626			930,490

(4) Plan assets wholly consist of time deposits as of June 30, 2017 and December 31, 2016. Among plan assets, realized returns on plan assets amount to 7,033 million Won and 11,554 million Won for the six months ended June 30, 2017 and 2016, respectively.

It is expected that the Bank shall contribute 131,248 million Won for the plan for the year ended December 31, 2017.

(5) Current service cost, net interest expense, past service cost, loss on the curtailment or liquidation and remeasurements recognized in the separate statements of comprehensive income are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Current service cost		67,508			70,842
Net interest income		(1,960	)		(344	)
Loss (gain) on the curtailment or settlement		320			(339	)
Cost recognized in net income		65,868			70,159
Remeasurements		11,806			59,007
Cost recognized in total comprehensive income		77,674			129,166

Retirement benefit service costs related to defined contribution plans are recognized 1,868 million Won and 1,711 million Won for the six months ended June 30, 2017 and 2016, respectively.

(6) Key actuarial assumptions used in defined benefit liability (asset) assessment are as follows:

	June 30, 2017	December 31, 2016
Discount rate	2.96%	2.85%
Future wage growth rate	6.06%	6.05%
Mortality rate	Issued by Korea Insurance Development Institute	Issued by Korea Insurance Development Institute
Retirement rate	Experience rate for each employment classification	Experience rate for each employment classification

(7) The sensitivity to actuarial assumptions used in the assessment of defined benefit obligation is as follows (Unit: Korean Won in millions):

		June 30, 2017			December 31, 2016
Discount rate	Increase by 1% point		(90,638	)		(86,744	)
	Decrease by 1% point		104,315			99,833
Future wage growth rate	Increase by 1% point		103,802			99,225
	Decrease by 1% point		(91,886	)		(87,851	)

- 52 -

25. OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES

Other financial liabilities and other liabilities are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Other financial liabilities:
Accounts payable		10,947,361			4,744,622
Accrued expenses		1,544,512			1,886,601
Borrowing from trust accounts		3,834,483			3,391,903
Agency business revenue		536,882			331,159
Foreign exchanges payable		479,818			696,017
Domestic exchanges payable		4,464,750			8,476,475
Other miscellaneous financial liabilities		1,736,458			1,300,954
Present value discount		(584	)		(447	)
Sub-total		23,543,680			20,827,284
Other liabilities:
Unearned income		44,991			46,144
Other miscellaneous liabilities		79,729			107,094
Sub-total		124,720			153,238
Total		23,668,400			20,980,522

- 53 -

26. DERIVATIVES

(1) Derivative assets and derivative liabilities are as follows (Unit: Korean Won in millions):

	June 30, 2017
			Assets				Liabilities
	Notional amount		For fair value hedge		For trading		For fair value hedge		For trading
Interest rate:
Futures		207,279		—		—		—		—
Swaps		125,624,575		140,143		349,622		2,348		364,605
Written options		730,000		—		15,003		—		—
Purchase options		925,000		—		—		—		15,993
Currency:
Futures		449,755		—		—		—		—
Forwards		67,250,795		—		475,398		—		514,706
Swaps		46,062,063		—		645,900		—		668,739
Written options		2,138,187		—		25,435		—		—
Purchase options		2,987,630		—		—		—		25,021
Equity:
Futures		390,006		—		—		—		—
Written options		4,392,724		—		124,451		—		—
Purchase options		5,973,184		—		—		6,239		269,943
Others:
Futures		2,041		—		—		—		—
Swaps		2,632		—		157		—		144
Written options		7,543		—		90		—		—
Purchase options		46,948		—		—		—		862
Total		257,190,362		140,143		1,636,056		8,587		1,860,013

	December 31, 2016
			Assets				Liabilities
	Notional amount		For fair value hedge		For trading		For fair value hedge		For trading
Interest rate:
Futures		54,785		—		—		—		—
Swaps		118,786,359		139,832		473,951		7,013		509,703
Written options		860,000		—		21,172		—		—
Purchase options		1,035,000		—		—		—		21,863
Currency:
Futures		447,749		—		—		—		—
Forwards		61,216,421		—		1,252,273		—		1,005,570
Swaps		39,745,794		—		1,014,994		—		1,221,961
Written options		1,120,949		—		42,126		—		—
Purchase options		907,211		—		—		—		8,589
Equity:
Futures		926,392		—		—		—		—
Written options		3,007,969		745		73,261		—		—
Purchase options		4,460,233		—		—		208		228,900
Others:
Futures		5,105		—		—		—		—
Swaps		7,918		—		2,645		—		2,331
Written options		8,307		—		121		—		—
Purchase options		64,352		—		—		—		1,181
Total		232,654,544		140,577		2,880,543		7,221		3,000,098

Derivatives held-for-trading purpose classified into financial assets or liabilities at FVTPL (Notes 7 and 20) and derivatives for hedging are stated in a separate line item of the separate statements of financial position.

- 54 -

(2) Gains or losses from valuation of financial instruments under hedge accounting are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Losses from hedged items		(3,986	)		(100,587	)
Gains (losses) from hedging instruments		(457	)		92,493

27. DEFERRED DAY 1 PROFITS OR LOSSES

Changes in deferred day 1 profits or losses are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Beginning balance		13,422			28,008
New transactions		500			1,337
Amounts recognized in profits or losses		(3,613	)		(7,020	)
Ending balance		10,309			22,325

In case some variables to measure fair values of financial instruments are not observable or available in the market, valuation techniques are utilized to evaluate such financial instruments. Those financial instruments are recorded at the fair value produced by the valuation techniques as at the time of acquisition, even though there are differences noted between the transaction price and the fair value. The table above presents the difference yet to be realized as profit or losses.

28. CAPITAL STOCK AND CAPITAL SURPLUS

(1) The number of authorized shares and others are as follows:

	June 30, 2017		December 31, 2016
Authorized shares of common stock		5,000,000,000 Shares		5,000,000,000 Shares
Par value		5,000 Won		5,000 Won
Issued shares of common stock		676,000,000 Shares		676,000,000 Shares
Capital stock		3,381,392 million Won		3,381,392 million Won

(2) There are no changes in the number of shares issued and outstanding during the six months ended June 30, 2017 and 2016.

(3) Details of capital surplus are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Capital in excess of par value		269,533		269,533

- 55 -

29. HYBRID SECURITIES

The bond-type hybrid securities classified as the equity are as follows (Unit: Korean Won in millions):

	Issue date	Maturity	Interest rates (%)		June 30, 2017			December 31, 2016
Securities in local currency	June 20, 2008	June 20, 2038		7.7		255,000			255,000
	March 8, 2012	March 8, 2042		5.8		—			190,000
	April 25, 2013	April 25, 2043		4.4		500,000			500,000
	November 13, 2013	November 13, 2043		5.7		200,000			200,000
	December 12, 2014	December 12, 2044		5.2		160,000			160,000
	June 3, 2015	June 3, 2045		4.4		240,000			240,000
Securities in foreign currencies	May 2, 2007	May 2, 2037		6.2		—			930,900
	June 10, 2015	June 10, 2045		5.0		559,650			559,650
	September 27, 2016	—		4.5		553,450			553,450
	May 16, 2017	—		5.3		562,700			—
Issuance cost						(12,912	)		(14,104	)
Total						3,017,888			3,574,896

With respect to the hybrid securities issued, there’s no maturity or the contractual agreements allow the Bank to indefinitely extend the maturity date and defer the payment of interest. If the Bank makes a resolution not to pay dividends on common stock, and then, the Bank is exonerated from interest payment on the hybrid securities.

30. OTHER EQUITY

(1) Details of other equity are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Accumulated other comprehensive income:
Gain on valuation of available-for-sale financial assets		303,480			319,698
Gain (loss) on foreign currency translation of foreign operations		(7,113	)		7,400
Remeasurement loss related to defined benefit plan		(163,392	)		(154,443	)
Sub-total		132,975			172,655
Treasury shares		(34,113	)		(34,113	)
Other capital adjustments		(208,158	)		—
Total		(109,296	)		138,542

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(2) Changes in the accumulated other comprehensive income are as follows (Unit: Korean Won in millions):

	For the six months ended June 30, 2017
	Beginning balance			Increase (decrease) (*)			Re- classification adjustments (*)			Income tax effect		Ending balance
Gain (loss) on valuation of available-for-sale financial assets		319,698			47,218			(68,614	)		5,178		303,480
Gain (loss) on foreign currency translation of foreign operations		7,400			(19,146	)		—			4,633		(7,113	)
Remeasurement gain (loss) related to defined benefit plan		(154,443	)		(11,806	)		—			2,857		(163,392	)
Total		172,655			16,266			(68,614	)		12,668		132,975

(*) For the change in gain (loss) on valuation of AFS financial assets, “increase (decrease)” represents change due to the valuation during the period, and “reclassification adjustments” explains disposal or recognition of impairment losses on AFS financial assets.

	For the six months ended June 30, 2016
	Beginning balance			Increase (decrease) (*)			Re- classification adjustments (*)			Income tax effect			Ending balance
Gain (loss) on valuation of available-for-sale financial assets		329,724			70,856			(14,591	)		(13,616	)		372,373
Gain (loss) on foreign currency translation of foreign operations		(1,961	)		(253	)		—			61			(2,153	)
Remeasurement gain (loss) related to defined benefit plan		(187,634	)		(59,007	)		—			14,280			(232,361	)
Total		140,129			11,596			(14,591	)		725			137,859

(*) For the change in gain (loss) on valuation of AFS financial assets, “increase (decrease)” represents change due to the valuation during the period, and “reclassification adjustments” explains disposal or recognition of impairment losses on AFS financial assets.

31. RETAINED EARNINGS

(1) Details in retained earnings are as follows (Unit: Korean Won in millions):

		June 30, 2017		December 31, 2016
Legal reserve	Legal reserve		1,729,754		1,622,754
	Other legal reserve		45,669		44,634
	Sub-total		1,775,423		1,667,388
Voluntary reserve	Business rationalization reserve		8,000		8,000
	Reserve for financial structure improvement		235,400		235,400
	Additional reserve		7,418,805		7,073,104
	Regulatory reserve for credit loss		2,017,342		1,880,447
	Revaluation reserve		751,964		753,908
	Other voluntary reserve		11,700		11,700
	Sub-total		10,443,211		9,962,559
Retained earnings before appropriation			913,816		858,208
	Total		13,132,450		12,488,155

- 57 -

i. 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.

ii. Other legal reserve

Other legal reserves were appropriated in the branches located in Japan, Vietnam and Bangladesh according to the banking laws of Japan, Vietnam and Bangladesh, and may be used to offset any deficit incurred in those branches.

iii. Business rationalization reserve

Pursuant to the Restriction of Special Taxation Act, the Bank was previously required to appropriate, as a reserve for business rationalization, amounts equal to tax reductions arising from tax exemptions and tax credits up to December 31, 2001. The requirement was no longer effective from 2002.

iv. Reserve for financial structure improvement

From 2002 to 2014, the Finance Supervisory Services recommended banks in Korea to appropriate at least 10 percent of net income after accumulated deficit for financial structure improvement, until tangible common equity ratio equals 5.5 percent. But this reserve is not available for payment of cash dividends; however, it can be used to reduce a deficit or be transferred to capital. The reserve and appropriation is an Autonomous judgment matter of the Bank since 2015.

v. Additional reserve and other voluntary reserve

Additional reserve and other voluntary reserve were appropriated for capital adequacy and other management purpose.

vi. Regulatory reserve for credit loss

In accordance with Article 29 of the Regulation on Supervision of Banking Business (“RSBB”), if provisions for credit loss under K-IFRS for the accounting purpose are lower than provisions under RSBB, the Bank discloses such short fall amount as regulatory reserve for credit loss.

vii. Revaluation reserve

Revaluation reserve is the amount of limited dividends set by the board of directors to be the recognized as complementary capital when the gain or loss occurred in the property revaluation by adopting K-IFRS.

(2) The changes in retained earnings are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Beginning balance		12,488,155			11,798,375
Net income		1,004,426			671,241
Dividends on common stock		(269,308	)		(168,317	)
Dividends on hybrid securities		(90,823	)		(100,236	)
Ending balance		13,132,450			12,201,063

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32. REGULATORY RESERVE FOR CREDIT LOSS

In accordance with Paragraph 1 and 2 of Article 29 of the Regulation on Supervision Banking Business (“RSBB”), if the estimated provisions for credit loss under K-IFRS for the accounting purpose are lower than those in accordance with the provisions under the RSBB, the Bank shall disclose the difference as the planned regulatory reserve for credit loss.

(1) Balance of the planned regulatory reserve for credit loss is as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Beginning balance		2,017,342			1,880,447
Planned provision of regulatory reserve for credit loss (reveral)		(10,806	)		136,895
Ending balance		2,006,536			2,017,342

(2) Planned reserves provided, adjusted net income after the planned reserves provided and adjusted earnings per share after the planned reserves provided are as follows (Unit: Korean Won in millions, except for earnings per share amount):

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
Net income		402,523			1,004,426			288,768			671,241
Reversal of regulatory reserve for credit loss		(12,310	)		(10,806	)		(19,340	)		(17,869	)
Adjusted net income after the reversal of regulatory reserve		414,833			1,015,232			308,108			689,110
Adjusted EPS after the reversal of regulatory reserve (Unit: Korean Won)		555			1,374			384			875

33. DIVIDENDS

At the shareholders’ meeting on March 24, 2017, dividend payment for the year ended December 31, 2016 amounting to 269,308 million Won (400 Won per share) was approved, and such dividend was paid during the six months ended June 30, 2017.

In addition, on July 28, 2017, the board of directors approved interim dividend payment of 100 Won per share, which amounts to 67,327 million Won in total. In accordance with the Commercial Law, the dividend is required to be paid within a month from the date of declaration, and the amount of dividend payable is not included in the separate financial statements attached.

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34. NET INTEREST INCOME

(1) Interest income recognized is as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Financial assets at FVTPL		4,415		8,878		4,738		9,516
AFS financial assets		52,423		105,267		61,304		125,071
HTM financial assets		73,683		147,063		90,730		185,925
Loans and receivables
Interest on due from banks		16,646		34,066		12,809		24,541
Interest on loans		1,659,994		3,294,164		1,684,034		3,375,667
Interest of other receivables		5,618		11,345		7,130		14,939
Sub-total		1,682,258		3,339,575		1,703,973		3,415,147
Total		1,812,779		3,600,783		1,860,745		3,735,659

(2) Interest expenses recognized are as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Interest on deposits due to customers		544,347		1,089,347		603,740		1,219,807
Interest on borrowings		51,522		103,866		50,803		102,691
Interest on debentures		120,410		238,640		122,370		245,790
Other interest expense		18,326		37,272		25,243		51,232
Total		734,605		1,469,125		802,156		1,619,520

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35. NET FEES AND COMMISSIONS INCOME

(1) Details of fees and commissions income occurred are as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Fees and commissions received (*)		182,706		378,161		183,433		375,281
Fees and commissions received for provision of guarantee		17,309		33,550		17,758		36,863
Fees and commissions received on project financing		4,614		6,334		8,621		13,489
Fees and commissions received on securities		19,462		39,686		16,497		32,925
Other Fees and commissions received		33,515		71,446		22,088		38,953
Total		257,606		529,177		248,397		497,511

(*) Fees and commissions received include fees income from agency commission, fees income from electronic finance, fees income related to loan, fees for import letter of credit dealing, commission received on foreign exchange and others.

(2) Details of fees and commissions expenses occurred are as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Fees and commissions paid		36,362		63,213		39,701		75,097
Others		61		114		47		92
Total		36,423		63,327		39,748		75,189

36. DIVIDEND INCOME

Details of dividend income recognized are as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Dividend from Financial assets at FVTPL		1		144		—		658
Dividend from AFS financial assets		31,228		61,592		103,431		158,931
Total		31,229		61,736		103,431		159,589

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37. GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FVTPL

(1) Details of gains or losses related to financial instruments at FVTPL are as follows (Unit: Korean Won in millions):

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30		Six months ended June 30
Gains (losses) on financial instruments held for trading		38,516			(51,387	)		99,966		(3,334	)
Gains (losses) on financial instruments designated at FVTPL		(24,086	)		(86,206	)		674		47,107
Total		14,430			(137,593	)		100,640		43,773

(2) Details of gains or losses on financial instruments held for trading are as follows (Unit: Korean Won in millions):

			2017						2016
			Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
Financial instruments held for trading	Securities	Gain on valuation		495			3,220			825			4,840
		Gain on disposals		1,392			5,916			1,493			4,389
		Loss on valuation		(191	)		(314	)		(1,046	)		(1,498	)
		Loss on disposals		(45	)		(247	)		(965	)		(1,990	)
		Sub-total		1,651			8,575			307			5,741
	Other financial instruments	Gain on valuation		1,495			3,071			2,372			10,368
		Gain on disposals		763			882			743			1,541
		Loss on valuation		(1,920	)		(3,539	)		(2,555	)		(10,385	)
		Loss on disposals		(211	)		(234	)		(482	)		(1,315	)
		Sub-total		127			180			78			209
		Total		1,778			8,755			385			5,950
Derivatives (for trading)	Interest rates derivatives	Gain on transactions and valuation		202,402			434,227			437,618			845,408
		Loss on transactions and valuation		(198,456	)		(422,879	)		(445,282	)		(896,696	)
		Sub-total		3,946			11,348			(7,664	)		(51,288	)
	Currencies derivatives	Gain on transactions and valuation		(100,624	)		3,741,132			682,342			2,703,055
		Loss on transactions and valuation		112,300			(3,903,950	)		(564,839	)		(2,595,176	)
		Sub-total		11,676			(162,818	)		117,503			107,879
	Equity derivatives	Gain on transactions and valuation		92,275			302,900			36,263			69,573
		Loss on transactions and valuation		(71,192	)		(211,551	)		(46,898	)		(136,017	)
		Sub-total		21,083			91,349			(10,635	)		(66,444	)
	Other derivatives	Gain on transactions and valuation		867			2,196			5,404			8,917
		Loss on transactions and valuation		(834	)		(2,217	)		(5,027	)		(8,348	)
		Sub-total		33			(21	)		377			569
		Total		36,738			(60,142	)		99,581			(9,284	)
Total				38,516			(51,387	)		99,966			(3,334	)

- 62 -

(3) Details of gains or losses of financial instruments at FVTPL are as follows (Unit: Korean Won in millions):

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
Gain (loss) on equity-linked securities:
Loss on disposals of equity-linked securities		(3,686	)		(15,877	)		(3,813	)		(7,153	)
Gain (loss) on valuation of equity-linked securities		(20,667	)		(69,714	)		3,718			52,993
Sub-total		(24,353	)		(85,591	)		(95	)		45,840
Gain (loss) on other financial instruments:
Gain (loss) on valuation of other financial instruments		267			(615	)		769			1,267
Total		(24,086	)		(86,206	)		674			47,107

38. GAINS OR LOSSES ON AFS FINANCIAL ASSETS

Details of gains or losses on AFS financial assets recognized are as follows (Unit: Korean Won in millions):

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
Gain on redemptions of securities		—			—			594			594
Gain on transactions of securities		83,874			102,860			23,585			39,219
Impairment loss		(6,853	)		(12,622	)		(4,752	)		(8,657	)
Total		77,021			90,238			19,427			31,156

39. IMPAIRMENT LOSSES DUE TO CREDIT LOSS

Impairment losses on loans and receivables, guarantees and loan commitments recognized for credit loss are as follows (Unit: Korean Won in millions):

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
Impairment losses due to credit loss		(153,089	)		(227,710	)		(196,608	)		(402,639	)
Reversal of provision on guarantee		16,381			45,218			2,364			76,810
Reversal of provision on (provision provided) loan commitment		(9,042	)		2,588			(3,438	)		1,187
Total		(145,750	)		(179,904	)		(197,682	)		(324,642	)

- 63 -

40. GENERAL AND ADMINISTRATIVE EXPENSES AND OTHER NET OPERATING INCOME (EXPENSES)

(1) Details of general and administrative expenses are as follows (Unit: Korean Won in millions):

			2017				2016
			Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Salaries	Short-term employee benefits	Salaries Employee benefits		276,845		555,349		271,127		548,216
				103,500		191,861		87,772		165,108
	Retirement benefit service costs			33,981		67,736		35,394		71,870
	Termination			4,411		4,411		92,039		92,039
	Sub-total			418,737		819,357		486,332		877,233
Depreciation and amortization				27,203		58,296		37,942		88,316
Other general and administrative expenses	Rent			61,391		126,971		62,501		127,112
	Taxes and public dues			28,674		51,924		30,247		52,468
	Service charges			42,012		84,955		52,987		102,782
	Computer and IT related			57,152		109,587		62,638		119,796
	Telephone and communication			8,120		15,795		7,614		15,378
	Operating promotion			8,565		17,924		9,290		19,622
	Advertising			20,892		26,575		19,947		31,891
	Printings			1,851		3,666		2,426		4,404
	Traveling			2,083		4,323		2,104		4,092
	Supplies			1,112		2,371		1,294		2,507
	Insurance premium			710		1,573		924		1,906
	Reimbursement			4,187		8,205		4,424		8,100
	Maintenance			2,825		5,754		3,363		6,601
	Water, light and heating			2,398		6,161		2,580		6,578
	Vehicle maintenance			2,057		3,941		1,936		3,743
	Others			1,854		3,134		2,219		3,431
	Sub-total			245,883		472,859		266,494		510,411
	Total			691,823		1,350,512		790,768		1,475,960

(2) Details of other operating income recognized are as follows (Unit: Korean Won in millions):

	2017					2016
	Three months ended June 30			Six months ended June 30		Three months ended June 30			Six months ended June 30
Gains on transactions of foreign exchange		535,587			1,543,840		1,023,010			2,397,712
Gains on disposals of loans and receivables		14,861			198,000		111,303			133,755
Gains on fair value hedging instrument		11,290			11,354		32,596			111,505
Gains on fair value hedged items		(7,094	)		11,860		(7,070	)		18,113
Others (*)		(1,424	)		57,644		4,314			47,363
		553,220			1,822,698		1,164,153			2,708,448

(*) Other income includes such income amounting to 28,800 million Won and 47,363 million Won for the six months ended June 30, 2017 and 2016, respectively, that the Bank recognized for it is to receive from other creditor financial institutions in accordance with the creditor financial institutions committee agreement.

- 64 -

(3) Details of other operating expenses recognized are as follows (Unit: Korean Won in millions):

	2017					2016
	Three months ended June 30			Six months ended June 30		Three months ended June 30			Six months ended June 30
Losses on transactions of foreign exchange		447,140			1,250,667		1,077,199			2,359,488
KDIC deposit insurance fees		76,258			148,374		72,341			142,209
Contribution to miscellaneous funds		71,311			143,050		75,259			149,781
Losses on disposals of loans and receivables		—			—		—			5
Losses (gains) related to derivatives		(9,391	)		11,811		(6,559	)		19,012
Losses on fair value hedged items		15,820			15,846		32,450			118,700
Others (*)		21,072			36,083		66,148			96,177
Total		622,210			1,605,831		1,316,838			2,885,372

(*) Other expense includes such expenses amounting to 3,325 million Won and 92,375 million Won for the six months ended June 30, 2017 and 2016, respectively, that the Bank recognized for it is to carry out a payment to other creditor financial institutions in accordance with the creditor financial institutions committee agreement.

41. OTHER NON-OPERATING INCOME (EXPENSES)

(1) Details of gain or loss on valuation of investments in subsidiaries and associates are as follows (Unit: Korean Won in millions):

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
Impairment loss		(18,563	)		(37,547	)		(6,716	)		(6,853	)

(2) Details of other non-operating income and expenses recognized are as follows (Unit: Korean Won in millions):

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
Other non-operating incomes		37,044			70,414			36,452			86,008
Other non-operating expenses		(14,880	)		(33,743	)		(40,636	)		(67,200	)
Total		22,164			36,671			(4,184	)		18,808

(3) Details of other non-operating income recognized are as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Rental fee income		3,595		7,305		3,553		7,070
Dividends from investments in subsidiaries and associates		10,308		18,264		10,187		21,067
Gains on disposal of investments in subsidiaries and associates		1,916		8,227		3,356		3,679
Gains on disposal of premises and equipment and other assets		1,459		1,609		67		67
Reversal of impairment loss of premises and equipment, intangible assets and other assets		—		32		200		443
Others		19,766		34,977		19,089		53,682
Total		37,044		70,414		36,452		86,008

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(4) Details of other non-operating expenses recognized are as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Depreciation of investment properties		893		1,788		891		1,759
Interest expenses of rent leasehold deposits		104		221		124		247
Loss on disposals of premises and equipment, intangible assets and other assets		180		437		4,137		5,843
Impairment loss on premises and equipment, intangible assets and other assets		40		44		111		139
Donation		8,411		12,585		18,691		33,421
Others		5,252		18,668		16,682		25,791
Total		14,880		33,743		40,636		67,200

42. INCOME TAX EXPENSE

(1) Details of income tax expense are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Current tax expense
Current tax expense in respect of the current period		259,170			46,028
Adjustments recognized in the current period in relation to the current tax of prior periods		(4,218	)		(20,588	)
Sub-total		254,952			25,440
Deferred tax expense
Deferred tax expense relating to the origination and reversal of temporary differences		25,418			110,002
Deferred tax charged directly to equity		12,668			725
Sub-total		38,086			110,727
Income tax expense		293,038			136,167

(2) Income tax expense can be reconciled to net income before income tax expense is as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017			2016
Net income before income tax expense		1,297,464			807,408
Tax calculated at statutory tax rate (*)		313,524			194,931
Adjustments
Effect of income that is exempt from taxation		(25,037	)		(27,436	)
Effect of expenses that are not deductible in determining taxable profit		5,463			4,703
Adjustments recognized in the current period in relation to the current tax of prior periods		(4,218	)		(20,588	)
Others		3,306			(15,443	)
Sub-total		(20,486	)		(58,764	)
Income tax expense		293,038			136,167
Effective tax rate		22.6	%		16.9	%

(*) The corporate tax rate is 11 % up to 200 million Won in tax basis, 22 % over 200 million Won to 20 billion Won and 24.2 % over 20 billion Won.

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(3) Details of accumulated deferred tax relating to items that are recognized directly in equity are as follows (Unit: Korean Won in millions):

	June 30, 2017			December 31, 2016
Loss on valuation of AFS securities		(96,889	)		(102,067	)
Foreign currency translation of foreign operations		2,270			(2,363	)
Remeasurement gain related to defined benefit plan		52,165			49,308
Total		(42,454	)		(55,122	)

43. EARNINGS PER SHARE (“EPS”)

Basic EPS is calculated by dividing net income by weighted average number of common shares outstanding (Unit: Korean Won in millions except for EPS and number of shares):

	2017						2016
	Three months ended June 30			Six months ended June 30			Three months ended June 30			Six months ended June 30
Net income attributable to common shareholders		402,523			1,004,426			288,768			671,241
Dividends to hybrid securities		(41,557	)		(90,823	)		(49,751	)		(100,236	)
Net income attributable to common shareholders		360,966			913,603			239,017			571,005
Weighted average number of common shares outstanding		673 shares in million			673 shares in million			673 shares in million			673 shares in million
Basic Earnings Per Share (Unit: Korean Won)		536			1,358			355			848

Diluted EPS is equal to basic EPS because there is no dilution effect for the six months ended June 30, 2017 and 2016.

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44. CONTINGENT LIABILITIES AND COMMITMENTS

(1) Details of guarantees are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Confirmed guarantees:
Guarantees for loans		91,649		79,566
Acceptances		269,956		333,943
Guarantees in acceptances of imported goods		107,065		97,606
Other confirmed guarantees		6,613,053		7,542,726
Total		7,081,723		8,053,841
Unconfirmed guarantees:
Local letters of credit		403,660		397,588
Letters of credit		3,477,659		3,807,199
Other unconfirmed guarantees		559,236		838,593
Total		4,440,555		5,043,380
Commercial paper purchase commitments and others		1,908,006		1,855,976

(2) Details of loan commitments and others are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Loan commitments		52,142,148		56,313,804
Other commitments		1,678,174		1,869,253

(3) Litigation case

The Bank has filed and faced lawsuits as follows (Unit: Korean Won in millions):

	June 30, 2017
	As plaintiff		As defendant
Number of cases		63 case		151 case
Amount of litigation		419,054		323,886
Provisions for litigations		5,218

	December 31, 2016
	As plaintiff		As defendant
Number of cases		54 case		157 case
Amount of litigation		287,146		232,485
Provisions for litigations		5,218

(4) Other

The Bank operates Korean Won currency settlement service as for commercial trade settlements between Korea and Iran. In accordance with the submission request of information from U.S. prosecutors (U.S. Federal Prosecutors and Prosecutors of the New York State), the Bank is currently performing its own internal investigation to confirm if the Bank has met the requirements on sanction of U.S. Government in respect of its service operation. Meanwhile, the Bank believes that it cannot make reasonable estimation due to possible results from such investigation as of the end of June 2017.

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45. RELATED PARTY TRANSACTIONS

Related parties of the Bank as of June 30, 2017, assets and liabilities recognized, guarantees and commitments, and major transactions with related parties for the period ended June 30, 2017 and 2016 are as follows:

(1) Related parties

	Related parties
Subsidiaries	Woori FIS Co., Ltd., Woori Private Equity Asset Management Co., Ltd., Woori Finance Research Institute Co., Ltd., Woori Card Co., Ltd., Woori Investment Bank Co., Ltd., Woori Private Equity Fund, Woori Credit Information Co., Ltd., Woori America Bank, PT Bank Woori Saudara Indonesia 1906 Tbk, Woori Global Markets Asia Limited, Woori Bank China Limited, Ao Woori Bank, Woori Brazil Bank, Korea BTL Infrastructure Fund, Woori Fund Service Co., Ltd., Woori Finance Cambodia, Woori Finance Myanmar, Woori EL Co., Ltd., Wealth Development Bank, Woori Bank Vietnam Limited, TUTU Finance-WCI Myanmar Co., Ltd., Woori Bank Principal and Interest Guaranteed Trust, Woori Bank Principal Guaranteed Trust, Kumho Trust 1st Co., Ltd. and 21 SPCs, Samsung Plus Private Equity Fund 36 and 23 Beneficiary Certificates
Associates	Kumho Tires Co., Ltd., Woori Blackstone Korea Opportunity No.1 Private Equity Fund, Woori Service Networks Co., Ltd., Korea Credit Bureau Co., Ltd., Korea Finance Security Co., Ltd., Chin Hung International Inc., Poonglim Industrial Co., Ltd., STX Engine Co., Ltd., Samho International Co., Ltd., STX Corporation, Woori Columbus 1st Private Equity Fund, 2016KIF-IMM Woori Bank Technology Venture Fund, K BANK Co., Ltd. and others (Dongwoo C & C Co., Ltd and 18 Associates)

(2) Assets and liabilities from transactions with related parties are as follows (Unit: Korean Won in millions):

Related party		A title of account	June 30, 2017		December 31, 2016
Corporation that have significant influence over the bank	KDIC (*1)	Other assets		—		270,041
		Deposits due to customers		—		1,894,631
		Other liabilities		—		15,568
Subsidiaries	Woori FIS Co., Ltd.	Other assets		107		99
		Deposits due to customers		15,073		40,078
		Other liabilities		17,445		16,248
	Woori Private Equity Asset Management Co., Ltd.	Deposits due to customers		966		1,258
	Woori Finance Research Institute Co., Ltd.	Deposits due to customers		3,754		2,657
		Other liabilities		11		1,534
	Woori Card Co., Ltd.	Other assets		4		13,619
		Deposits due to customers		59,934		64,954
		Other liabilities		11,737		14,769
	Woori Investment Bank Co., Ltd.	Cash and cash equivalents		—		70,000
		Loans		27,600		—
		Other assets		8,933		4,876
		Deposits due to customers		5,743		7,936
		Other liabilities		10,492		6,680
	Woori Private Equity Fund	Other assets		—		3
		Deposits due to customers		294		461
	Woori Credit Information Co., Ltd.	Deposits due to customers		14,233		16,913
		Other liabilities		10,566		10,503
	Woori America Bank	Cash and cash equivalents		2,077		4,394

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Related party		A title of account	June 30, 2017			December 31, 2016
Subsidiaries	PT Bank Woori Saudara Indonesia 1906 Tbk	Cash and cash equivalents		8,959			8,728
		Loans		113,960			157,105
		Allowance for credit loss		(174	)		(240	)
		Other assets		—			107
		Deposits due to customers		66			23
	Woori Global Markets Asia Limited	Loans		156,516			146,724
		Allowance for credit loss		(228	)		(187	)
		Deposits due to customers		1,461			272
	Woori Bank China Limited	Cash and cash equivalents		16,856			36,002
		Loans		102,564			247,743
		Allowance for credit loss		(157	)		(347	)
		Other assets		38,349			73,171
		Deposits due to customers		87,837			71,497
		Other liabilities		38,034			74,213
	AO Woori Bank	Cash and cash equivalents		15,670			453
		Loans		44,784			43,861
		Allowance for credit loss		(68	)		(67	)
		Other assets		26			8
	Woori Brazil Bank	Loans		1,709			1,813
		Allowance for credit loss		(1	)		(4	)
	Korea BTL Infrastructure Fund	Other assets		9			9
	Woori Fund Service Co., Ltd.	Deposits due to customers		5,402			5,154
		Other liabilities		1,628			816
	Woori Finance Cambodia	Loans		23,248			24,170
		Allowance for credit loss		(23	)		(25	)
	Woori Finance Myanmar	Loans		4,558			2,417
		Allowance for credit loss		(4	)		(2	)
	Woori EL Co., Ltd.	Deposits due to customers		16			22
	Woori Bank Vietnam Limited	Loans		24,846			—
		Allowance for credit loss		(217	)		—
		Other assets		113,348			—
	Woori Bank Principal and Interest Guaranteed Trust and Principal Guaranteed Trust	Other assets		5,786			2,317
		Other liabilities		52,826			62,221
	Structured entities	Loans		13,465			13,627
		Allowance for credit loss		(3,068	)		(4,147	)
		Other assets		44			164
		Deposits due to customers		9,563			6,959
		Other liabilities		1,373			1,153
	Beneficiary Certificates	Other assets		14			23
Associates	Kumho Tires Co., Ltd.	Loans		225,582			295,075
		Allowance for credit loss		(1,753	)		(650	)
		Deposits due to customers		12,742			45,957
		Other liabilities		350			99

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Related party		A title of account	June 30, 2017			December 31, 2016
Associates	Woori Service Networks Co., Ltd.	Deposits due to customers		1,832			2,572
		Other liabilities		327			358
	Korea Credit Bureau Co., Ltd.	Deposits due to customers		5,218			5,069
		Other liabilities		29			40
	Korea Finance Security Co., Ltd.	Deposits due to customers		2,320			2,801
		Other liabilities		2			6
	Chin Hung International Inc.	Loans		—			4,044
		Allowance for credit loss		—			(4,011	)
		Deposits due to customers		56,765			14,047
		Other liabilities		4			5
	Poonglim Industrial Co., Ltd.	Deposits due to customers		4			283
	STX Engine Co., Ltd.	Loans		104,887			107,856
		Allowance for credit loss		(87,597	)		(89,436	)
		Deposits due to customers		19,559			13,260
		Other liabilities		26			39
	Samho International Co., Ltd.	Loans		34,386			36,568
		Allowance for credit loss		(590	)		(628	)
		Deposits due to customers		61,179			82,917
		Other liabilities		140			127
	STX Corporation	Loans		51,434			144,006
		Allowance for credit loss		(33,083	)		(92,615	)
		Deposits due to customers		13,938			14,412
		Other liabilities		25			23
	Others (*2)	Loans		242			619
		Allowance for credit loss		(242	)		(253	)
		Other assets		2			8
		Deposits due to customers		2,691			4,460
		Other liabilities		69			60

(*1) As its ownership interest in the Bank is lower than 20% as of June 30, 2017, it has been exclude from the corporation that have significant influence over the Bank.

(*2) Others include Saman Corporation, Kyesan Engineering Co., Ltd., Hyunwoo International Co., Ltd. and DAEA SNC Co. Ltd. and others.

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(3) Gain or loss from transactions with related parties are as follows (Unit: Korean Won in millions):

			For the six months ended June 30
Related party		A title of account	2017			2016
Corporation that have significant influence over the bank	KDIC(*1)	Interest income		—			6,721
		Interest expenses		15,331			9,123
Subsidiaries	Woori FIS Co., Ltd.,	Fees income		257			227
		Other income		3,565			3,389
		Other expenses		103,904			107,700
	Woori Private Equity Asset Management Co., Ltd.	Fees income		7			4
		Interest expenses		3			183
	Woori Finance Research Institute Co., Ltd.	Fees income		5			4
		Other income		77			147
		Interest expenses		18			17
		Fees expenses		2,800			2,350
	Woori Card Co., Ltd.	Fees income		72,880			65,158
		Other income		428			93
		Interest expenses		25			13
		Fees expenses		8			—
		Other expenses		116			—
	Woori Investment Bank Co., Ltd.	Fees income		306			214
		Interest income		692			—
		Other income		3,326			1,532
		Interest expenses		12			21
		Other expenses		6,889			2,188
	Woori Private Equity Fund	Fees income		1			4
		Interest expenses		1			3
	Woori Credit Information Co., Ltd.	Fees income		29			27
		Dividends		504			1,008
		Other income		196			199
		Interest expenses		93			108
		Fees expenses		5,365			4,789
	PT Bank Woori Saudara Indonesia 1906 Tbk	Interest income		587			190
		Dividend income		3,300			2,643
		Fees expenses		—			38
		Reversal of impairment losses due to credit loss		(66	)		—
	Woori Global Markets Asia Limited.	Interest income		1,211			881
		Fees income		8			—
		Interest expenses		4			111
		Impairment losses due to credit loss (reversal)		41			(11	)
	Woori Bank China	Interest income		2,051			2,414
	Limited.	Other income		—			94
		Interest expenses		330			—
		Other expenses		—			47
		Reversal of impairment losses due to credit loss		(190	)		(329	)
	AO Woori Bank	Interest income		240			278
		Impairment losses due to credit loss (reversal)		1			(32	)

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			For the six months ended June 30
Related party		A title of account	2017			2016
Subsidiaries	Woori Brazil Bank	Interest income		14			10
		Reversal of impairment losses due to credit loss		(3	)		(2	)
	Korea BTL Infrastructure Fund	Dividend income		14,249			14,795
		Fees income		38			37
	Woori Fund Service Co., Ltd.	Fees income		9			7
		Other income		80			73
		Interest expenses		46			27
	Woori Finance Cambodia	Interest income		331			234
		Impairment losses due to credit loss (reversal)		(2	)		3
	Woori Finance Myanmar	Interest income		54			—
		Impairment losses due to credit loss		2			—
	Woori Bank Vietnam	Interest income		424			—
	Limited	Impairment losses due to credit loss		217			—
	Principal and Interest Guaranteed Trust and Principal Guaranteed Trust	Other income		3,469			4,045
		Interest expenses		363			351
		Other expenses		16			14
	Structured entities	Interest income		7			520
		Fees income		3,146			3,804
		Interest expenses		5			3
		Impairment losses due to credit loss (reversal)		(1,079	)		731
Associates	Kumho Tires Co., Ltd.	Interest income		1,501			1,341
		Fees income		6			6
		Interest expenses		—			37
		Impairment losses due to credit loss		1,103			64
	Woori Blackstone Korea Opportunity No.1 Private Equity Fund	Dividend income		—			2,420
	Woori Service Networks Co., Ltd.	Dividend income		8			12
		Other income		15			15
		Interest expenses		13			27
	Korea Credit Bureau Co., Ltd.	Dividend income		149			136
		Interest expenses		38			78
	Korea Finance Security Co., Ltd.	Dividend income		54			54
		Interest expenses		5			5
	Chin Hung International Inc.	Interest income		53			138
		Fees income		1			1
		Interest expenses		13			12
		Reversal of impairment losses due to credit loss		(4,011	)		(1,064	)

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			For the six months ended June 30
Related party		A title of account	2017			2016
Associates	Poonglim Industrial Co., Ltd.	Interest expenses		—			1
		Reversal of impairment losses due to credit loss		—			(37	)
	STX Engine Co., Ltd.	Interest income		672			674
		Fees income		28			20
		Interest expenses		72			30
		Impairment losses due to credit loss (reversal)		(1,839	)		544
	Samho International Co., Ltd	Interest income		364			457
		Fees income		6			5
		Interest expenses		214			250
		Reversal of impairment losses due to credit loss		(38	)		(460	)
	Force TEC Co., Ltd. (*2)	Interest income		—			123
		Impairment losses due to credit loss		—			22,620
	STX Corporation	Interest income		219			562
		Fees income		58			60
		Interest expenses		4			4
		Impairment losses due to credit loss (reversal)		(59,532	)		73,380
	Osung LST Co., Ltd. (*3)	Interest income		—			113
		Interest expenses		—			1
	Others (*4)	Interest expenses		5			7
		Reversal of impairment losses due to credit loss		(10	)		(938	)

(*1) As its ownership interest in the Bank is lower than 20% as of June 30, 2017, it has been exclude from the corporation that have significant influence over the Bank.

(*2) The entity is not in scope for the associates, because the Bank does not have significant influence over the entity due to the fact that it is going through workout process under receivership as of June 30, 2017.

(*3) As the Bank sold its ownership interests in the entities during the year ended December 31, 2016, these entities were excluded from the investment in associates.

(*4) Others include Saman Corporation, Kyesan Engineering Co., Ltd., Hyunwoo International Co., Ltd. and DAEA SNC Co. Ltd. and others.

(4) Guarantees provided to the related parties are as follows (Unit: Korean Won in millions):

	Warranty	June 30, 2017		December 31, 2016
KDIC (*)	Loan commitment		—		1,500,000
Woori Card Co., Ltd.	Loan commitment		500,000		500,000
Woori Investment Bank	Loan commitment		50,000		50,000
Woori America Bank	Confirmed guarantees in foreign currencies		2,476		26,959
PT Bank Woori Saudara Indonesia 1906 Tbk	Confirmed guarantees in foreign currencies and others		85,999		94,891
Woori Global Markets Asia Limited	Confirmed guarantees in foreign currencies		—		19,336
Woori Bank China Limited	Confirmed guarantees in foreign currencies and others		95,594		104,077
AO Woori Bank	Confirmed guarantees in foreign currencies and others		35,672		44,649
Woori Brazil Bank	Confirmed guarantees in foreign currencies		19,999		27,480
Korea BTL Infrastructure Fund	Securities purchase contract		311,078		313,778
Woori Finance Cambodia	Loan commitment		2,963		3,626
Woori Bank Vietnam Limited	Confirmed guarantees in foreign currencies and others		30,338		—

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	Warranty	June 30, 2017		December 31, 2016
Structured entities	Loan commitment in local currency		557,440		466,080
	Loan commitment		688		572
Kumho Tires Co., Inc.	Import credit in foreign currencies and others		8,379		24,187
	Loan commitment		190,055		126,435
Chin Hung International Inc.	Loan commitment		31,749		40,630
STX Engine Co., Ltd.	Import credit in foreign currencies and others		67,922		63,103
Samho International Co., Ltd.	Loan commitment		29,925		27,742
STX Corporation	Import credit in foreign currencies and others		22,717		24,316

(*) As its ownership interest in the Bank is lower than 20% as of June 30, 2017, it has been exclude from the corporation that have significant influence over the Bank

For the guarantee provided to the related parties, the Bank recognized provisions for guarantees amounting to 75,892 million Won and 73,381 million Won, respectively, as of June 30, 2017 and December 31, 2016.

(5) Commitments of Derivatives to the related parties are as follows (Unit: Korean Won in millions):

	Warranty	June 30, 2017		December 31, 2016
Woori Card Co., Ltd.	Unsettled commitment		100,000		50,000
Woori Investment Bank	Unsettled commitment		128,775		109,974
Woori Bank China Limited	Unsettled commitment		—		96,152
Structured entities	Unsettled commitment		460,000		350,000

(6) Details of compensation to key management are as follows (Unit: Korean Won in millions):

	For the six months ended June 30
	2017		2016 (*)
Salaries		6,524		4,281
Severance and retirement benefits		280		186
Total		6,804		4,467

(*) There were changes as to the members of key management so the previous year’s compensation has been restated accordingly.

Key management includes registered executives and non-registered executives. Outstanding assets and liabilities from transactions with key management amount to 1,261 million Won and 5,816 million Won, respectively, as of June 30, 2017, and with respect to the assets, the Bank has not recognized any allowance, nor provision.

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46. TRUST ACCOUNTS

(1) Trust accounts of the Bank are as follows (Unit: Korean Won in millions):

	Total assets				Operating income
	June 30, 2017		December 31, 2016		2017				2016
					For the three months ended June 30		For the six months ended June 30		For the three months ended June 30		For the six months ended June 30
Trust accounts		44,170,992		38,807,666		213,300		416,316		236,978		426,189

(2) Significant receivables and payables between the Bank and trust accounts are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Receivables
Trust fees receivables		25,769		23,667
Payables
Deposits due to customers		1,063,675		1,919,324
Borrowings from trust accounts		2,960,810		2,687,776
Sub-Total		4,024,485		4,607,100

(3) Significant transactions between the Bank and trust accounts are as follows (Unit: Korean Won in millions):

	2017				2016
	Three months ended June 30		Six months ended June 30		Three months ended June 30		Six months ended June 30
Revenue
Trust fees		30,472		65,207		19,069		33,277
Expense
Interest expenses on deposits due to customers		5,257		12,400		11,249		24,539
Interest expenses on borrowings from trust accounts		7,569		15,686		12,204		25,320
Sub-Total		12,826		28,086		23,453		49,859

(4) Principal guaranteed trusts and principal and fixed rate of return guaranteed trusts.

1) As of June 30, 2017 and December 31, 2016, the carrying value of principal guaranteed trusts and principal and fixed rate of return guaranteed trusts are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Principal guaranteed trusts
Old-age pension trusts		4,313		4,513
Personal pension trusts		529,455		532,959
Pension trusts		766,951		741,759
Retirement trusts		51,612		53,773
New personal pension trusts		8,337		8,536
New old-age pension trusts		2,671		2,919
Sub-total		1,363,339		1,344,459
Principal and fixed rate of return guaranteed trusts
Development trusts		19		19
Unspecified money trusts		793		787
Sub-total		812		806
Total		1,364,151		1,345,265

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2) The amounts that the Bank has to pay by the capital guaranteed contract or the operating results of the principal and return guaranteed trusts are as follows (Unit: Korean Won in millions):

	June 30, 2017		December 31, 2016
Liabilities for the account (subsidy for trust account adjustment)		16		30

47. EVENTS AFTER REPORTING PERIODS.

The Bank decided to execute a voluntary retirement plan during the six months ended December 31, 2017 through the agreement between labor and management. According to this plan, the related expense will be expected to incur during three months ended September 30, 2017.

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