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.

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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

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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.

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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.

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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.

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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

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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

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	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.

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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

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(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

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(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	)

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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

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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.

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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 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):

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	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

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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

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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 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

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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).

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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 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.

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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.

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(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.

- 39 -

(*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.

- 40 -

(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.

- 41 -

	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

- 42 -

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

- 45 -

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.

- 46 -

(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

- 47 -

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

- 49 -

(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

- 50 -

(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

- 56 -

(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	)

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(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	)

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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.

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(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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