6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

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

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2017

Woori Bank

(Translation of Registrant’s name into English)

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

(Address of principal executive offices)

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

Form 20-F  ☒            Form 40-F  ☐

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

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

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

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

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

2

Summary of 2017 Third Quarter Business Report

Table of Contents

I. INTRODUCTION OF THE BANK			5
	1.	Overview of the Bank	5
	2.	Capital Structure (Changes in Capital)	9
	3.	Total Number of Authorized Shares	10
	4.	Voting Rights	10
	5.	Dividend Information	11
II. BUSINESS OVERVIEW			12
	1.	Results of Operations	12
	2.	Business Performance by Operation	13
	3.	Funding Sources and Use of Funds	14
	4.	Other Information Necessary for Making Investment Decisions	17
III. FINANCIAL INFORMATION			19
	1.	Condensed Financial Statements (Consolidated)	19
	2.	Condensed Financial Statements (Separate)	21
IV. INDEPENDENT AUDITOR’S OPINION			23
	1.	Independent Auditor’s Opinion	23
	2.	Compensation to the Independent Auditor for the Past Three Years	23
V. CORPORATE GOVERNANCE AND AFFILIATED COMPANIES			24
	1.	About the Board of Directors	24
	2.	Affiliated Companies	25
VI. SHAREHOLDER INFORMATION			26
	1.	Share Distribution	26
	2.	Stock Price and Stock Market Performance	27
VII. DIRECTORS AND EMPLOYEE INFORMATION			28
	1.	Directors	28

3

	2.	Employee Status	29
	3.	Directors’ Compensation	29
VIII. RELATED PARTY TRANSACTIONS			29

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

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

4

I. Introduction of the Bank

1. Overview of the Bank

a. History

(1) Background: Major developments.

March 27, 2001	Became a subsidiary of Woori Finance Holdings Co., Ltd. (“Woori Finance Holdings”)
December 31, 2001	Merged with the spun off banking division of Peace Bank of Korea
January 31, 2002	Transferred the credit card business of Hanvit Bank to Woori Card
May 22, 2003	Awarded Republic of Korea Corporate Image Grand Prize – Grand Prize for CI and First Prize for Knowledge Management
July 31, 2003	Merged with Woori Investment Bank
March 31, 2004	Merged with Woori Credit Card
September 7, 2004	Selected as 2004 Top Bank of Korea by British magazine “The Bankers”
November 4, 2005	Opened the first comprehensive financial office in the financial sector, “Woori Finance Plaza”
May 19, 2006	Established Korea BTL Infrastructure Fund
December 1, 2006	Officially launched Woori Global Markets Asia Limited
November 12, 2007	Established a local legal entity in China, Woori Bank China Ltd.
January 9, 2008	Established a local legal entity in Russia, ZAO Woori Bank
December 16, 2008	Issued 70,000,000 convertible preferred shares (par value KRW 5,000, issue price KRW 10,000)
April 1, 2009	Issued 60,000,000 common shares for increase in capital
December 15, 2009	Awarded Asian Financial Culture Grand Prize “Top Prize in Community Activities”
March 21, 2010	Woori Bank China Ltd. acquired qualification as a “settlement bank for Renminbi currency in international trade”
April 18, 2011	Woori Smile Microcredit executed an MOU to jointly support microcredit with the Ministry of Land, Transport and Maritime Affairs

5

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

6

April 17, 2014	Woori Short Term National/Public Bond Fund reached KRW 100 billion in commitments
April 24, 2014	Became the First domestic bank to issue Basel III subordinated debt in foreign currency (USD 1 billion)
May 21, 2014	Awarded “Korea’s Top Bank in Money Management” by Asian Banker in 2014
July 28, 2014	The Bank’s board of directors approves the merger between Woori Finance Holdings and Woori Bank (the “Merger”)
September 30, 2014	The KDIC announced the sale of the controlling stake (30%) in Woori Bank
October 10, 2014	The first Korean bank to issue Yuan-denominated bonds
November 1, 2014	Woori Finance Holdings merged with and into the Bank
November 10, 2014	Opened office in Vladivostok, Russia
December 30, 2014	Inaugurated the 49th President of the Bank, Kwang-Goo Lee
	Awarded final approval to merge PT. Bank Woori Indonesia with Saudara Bank
February 26, 2015	PT. Bank Woori Saudara Indonesia officially launched
March 31, 2015	Commemoration of the 100 year partnership between Woori Bank and Seoul Metropolitan Government
May 26, 2015	Launched mobile-only bank, WiBee Bank
	WiBee Bank mobile loan products released
August 20, 2015	Launched Woori-Samsung Pay Service
September 19, 2015	Launched first overseas service of WiBee Bank, ‘WiBee Bank Cambodia’
November 29, 2015	K-Bank is selected as the first internet-only bank (Woori Bank stake 10%)
January 6, 2016	Launched 1st bank mobile messenger service, WibeeTalk
June 24, 2016	First Korean Bank to launch offshore Won-Yuan clearing services
September 21, 2016	Successfully issued $500 million foreign currency denominated contingent convertible bonds, the first in the form of perpetual bonds in Korea

7

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

8

b. Affiliated Companies

(1) Overview of Business Group

1. Name of business group: Woori Bank

(2) Affiliated companies within the business group

As of September 30, 2017

Type	Name of Company	Equity ownership	Controlling Company		Notes
Company	*Woori Bank	—		—		—
First Tier Subsidiaries	Woori Card	100.00%		Woori Bank		18 companies
	*Woori Investment Bank	58.15%
	Woori FIS	100.00%
	Woori Private Equity Asset Management	100.00%
	Woori Finance Research Institute	100.00%
	Woori Credit Information	100.00%
	Woori Fund Services	100.00%
	Korea BTL Infrastructure Fund	99.87%
	Woori America Bank	100.00%
	*PT. Bank Woori Saudara Indonesia	79.88%
	AO Woori Bank	(1share) 100.00%
	Woori Bank China Limited	100.00%
	Woori Bank Brasil	(1share) 100.00%
	Woori Finance Cambodia	100.00%
	Woori Finance Myanmar	100.00%
	Woori Wealth Bank Philippines	51.00%
	Woori Bank Vietnam	100.00%
	Woori Global Markets Asia Ltd.	100.00%
Second Tier Subsidiaries	**Woori Blackstone Korea Opportunity Private Equity Fund No.1	—		Woori Private Equity Asset Management		3 companies
	**Woori Columbus Private Equity Fund No.1	—
	TUTU Finance-WCI Myanmar	100.00%		Woori Card

* Listed Companies (3) : Woori Bank, Woori Investment Bank and PT. Bank Woori Saudara Indonesia

** Liquidation has been completed, and as of September 30, 2017, equity ownership is 0% but entity is included as an affiliated company due to incomplete dissolution.

Note) Dissolution of Woori Private Equity Fund was completed as of July 6, 2017, and the entity is excluded from the affiliated companies

2. Capital Structure (Changes in Capital)

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

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

9

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

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

3. Total Number of Authorized Shares

As of September 30, 2017

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

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

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

4. Voting Rights

As of September 30, 2017

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

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

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

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5. Dividend Information

Items		3Q 2017		2016		2015
Par value per share (Won)			5,000		5,000		5,000
Net profit (Millions of Won)			1,378,507		1,261,266		1,059,157
Earnings per share (Won)			1,855		1,567		1,301
Total cash dividends (Millions of Won)			67,327		269,308		336,636
Total stock dividends (Millions of Won)			—		—		—
Cash dividend payout ratio (%)			4.88		21.35		31.80
Cash dividend yield (%)	Common Shares		0.57		3.01		5.50
	Preferred Shares		—		—		—
Stock dividend yield (%)	Common Shares		—		—		—
	Preferred Shares		—		—		—
Cash dividend per share (Won)	Common Shares		100		400		500
	Preferred Shares		—		—		—
Stock dividend per share (Won)	Common Shares		—		—		—
	Preferred Shares		—		—		—

* Based on K-IFRS consolidated financial statements

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

11

II. Business Overview

1. Results of Operations

As of September 30, 2017

				(unit: in 100 millions of Won)
Type	3Q 2017		3Q 2016		2016		2015
Operating income		18,019		13,892		15,742		13,516
Non-operating income		1,766		1,001		1,690		3,140
Non-operating expenses		1,770		1,300		1,898		2,136
Ordinary profits		18,016		13,594		15,534		14,519
Income from continuing operations before income tax		18,016		13,594		15,534		14,519
Income tax expense from continuing operations		4,091		2,422		2,759		3,766
Income from discontinued operations		—		—		—		—
Net income		13,924		11,172		12,775		10,754

* Based on K- IFRS consolidated financial statements

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2. Business Performance by Operation

a. Deposit Services

As of September 30, 2017

					(unit: in millions of Won)
Type		3Q 2017		2016		2015
Deposits received in local currency	Demand deposits		8,760,841		9,491,680		9,728,839
	Savings deposits		188,292,047		183,723,169		175,598,100
	Mutual funds		34,821		37,128		40,888
	Subtotal		197,087,709		193,251,977		185,367,827
Deposits received in foreign currencies			20,831,057		21,452,943		19,129,193
CDs			5,738,288		3,808,856		2,417,790
Money trusts			1,379,903		1,360,176		1,304,268
Other deposits received			1,307,275		1,146,459		922,749
Total			226,344,233		221,020,411		209,141,826

* Based on K- IFRS consolidated financial statements

* Present value discounts are reflected in the relevant accounts

b. Loan Services

Balances of Loans by Type

As of September 30, 2017

				(unit: in millions of Won)
Type	3Q 2017		2016		2015
Loans in local currency		196,803,960		191,309,481		185,154,851
Loans in foreign currencies		16,449,300		17,855,868		17,910,253
Guarantee payments		24,947		25,197		44,242
Total		213,278,206		209,190,547		203,109,346

* Based on K- IFRS consolidated financial statements

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

c. Trust Business

As of September 30, 2017

								(unit: in millions of Won)
Type	3Q 2017				2016				2015
	Trust Funds		Trust Fees		Trust Funds		Trust Fees		Trust Funds		Trust Fees
Money trust		29,908,492		102,391		26,019,180		73,814		23,980,475		49,973
Property trust		13,264,829		3,313		12,714,338		4,803		9,354,003		1,323
Total		43,173,321		105,704		38,733,518		78,617		33,334,478		51,296

13

* Trust funds indicate average balances.

3. Funding Sources and Use of Funds

a. Sources of Funds

[Bank Accounts]

														(Unit: in millions of Won, %)
Classification	Funding Source	3Q 2017						2016						2015
		Average Balance		Interest Rate		Proportion		Average Balance		Interest Rate		Proportion		Average Balance		Interest Rate		Proportion
Local currency funds	Deposits received in local currency		186,645,181		1.26		66.18		183,440,285		1.38		65.35		169,919,620		1.70		64.76
	Certificates of deposit		4,443,968		1.64		1.58		3,466,223		1.70		1.23		1,879,832		1.92		0.72
	Borrowings in local currency		6,255,375		1.32		2.22		6,709,080		1.45		2.39		6,689,135		1.77		2.55
	Call money in local currency		1,385,826		1.21		0.49		1,159,188		1.32		0.41		1,370,253		1.62		0.52
	Others		19,660,140		2.30		6.97		18,532,241		2.60		6.60		18,944,493		2.95		7.22
	Subtotal		218,390,490		1.36		77.44		213,307,017		1.50		75.98		198,803,334		1.82		75.77
Foreign currency funds	Deposits received in foreign currencies		14,007,690		0.50		4.97		14,838,684		0.47		5.29		11,568,322		0.44		4.41
	Borrowings in foreign currencies		7,126,114		1.33		2.53		8,595,575		0.86		3.06		9,245,073		0.53		3.52
	Call money in foreign currencies		1,145,967		1.13		0.41		1,401,294		0.70		0.50		1,199,484		0.53		0.46
	Debentures in foreign currencies		3,653,810		3.06		1.30		3,950,614		2.54		1.41		4,851,289		2.72		1.85
	Others		535,023		0.12		0.19		531,877		0.29		0.19		650,409		0.66		0.25
	Subtotal		26,468,603		1.09		9.39		29,318,044		0.87		10.44		27,514,577		0.88		10.49
Others	Total capital		20,026,668		—		7.10		19,617,484		—		6.99		18,501,137		—		7.05
	Provisions		351,135		—		0.12		412,553		—		0.15		640,666		—		0.24
	Others		16,772,854		—		5.95		18,070,427		—		6.44		16,907,843		—		6.44
	Subtotal		37,150,656		—		13.17		38,100,463		—		13.57		36,049,647		—		13.74
Total			282,009,749		1.16		100.00		280,725,524		1.23		100.00		262,367,557		1.47		100.00

* Based on K-IFRS separate financial statements

14

[Trust Accounts]

														(Unit: in millions of Won, %)
Type	Funding Source	3Q 2017						2016						2015
		Average Balance		Interest Rate		Share		Average Balance		Interest Rate		Share		Average Balance		Interest Rate		Share
Cost	Money trusts		29,908,492		1.70		69.10		26,019,180		1.52		66.98		23,980,475		1.88		71.71
	Borrowings		—		0.00		0.00		0		0.00		0.00		0		0.00		0.00
	Subtotal		29,908,492		1.70		69.10		26,019,180		1.52		66.98		23,980,475		1.88		71.71
Non-cost	Property trusts		13,264,829		—		30.65		12,714,338		—		32.73		9,354,003		—		27.97
	Special reserves		39,075		—		0.09		38,160		—		0.10		37,989		—		0.11
	Others		71,295		—		0.16		72,810		—		0.19		70,265		—		0.21
	Subtotal		13,375,199		—		30.90		12,825,308		—		33.02		9,462,257		—		28.29
Total			43,283,691		—		100.00		38,844,488		—		100.00		33,442,732		—		100.00

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b. Fund Management Performance

[Bank Accounts]

																		(Unit: in millions of Won, %)
Type	Managed Item	3Q 2017								2016								2015
		Average Balance			Interest Rate		Share			Average Balance			Interest Rate		Share			Average Balance			Interest Rate		Share
Local currency funds	Deposits in local currency		3,361,553			1.27		1.19			3,171,599			1.34		1.13			2,580,842			1.72		0.98
	Marketable securities in local currency		35,550,641			2.04		12.61			33,880,119			2.58		12.07			32,994,958			2.79		12.58
	Loans in local currency		193,086,404			3.05		68.47			189,079,324			3.10		67.35			176,631,188			3.42		67.32
	Guarantee payments		27,651			1.48		0.01			51,254			0.89		0.02			64,533			1.89		0.02
	Call loans in local currency		2,597,256			1.31		0.92			3,581,382			1.41		1.28			2,083,053			1.64		0.79
	Private placed bonds		193,568			5.79		0.07			247,292			5.19		0.09			280,702			5.98		0.11
	Credit card receivables		38			—		0.00			24			—		0.00			—			—		—
	Others		3,808,795			2.01		1.35			4,580,215			2.04		1.63			4,313,781			2.61		1.64
	Bad debt expense in local currency (-)		(1,313,927	)		—		(0.47	)		(1,925,177	)		—		(0.69	)		(2,482,955	)		—		(0.95	)
	Subtotal		237,311,978			2.86		84.15			232,666,033			2.98		82.88			216,466,103			3.31		82.50
Foreign currency funds	Deposits in foreign currencies		3,739,725			0.73		1.33			3,761,286			0.43		1.34			2,872,735			0.28		1.09
	Marketable securities in foreign currencies		2,534,366			1.11		0.90			1,752,884			1.13		0.62			1,375,146			1.51		0.52
	Loans in foreign currencies		10,893,427			2.45		3.86			13,371,873			1.95		4.76			14,206,736			1.65		5.41
	Call loans in foreign currencies		2,417,425			1.19		0.86			2,940,858			0.85		1.05			2,040,819			0.59		0.78
	Bills bought		7,205,063			1.81		2.55			7,110,164			1.53		2.53			6,899,811			1.38		2.63
	Others		48,632			2.27		0.02			13,829			9.72		0.00			17,047			6.96		0.01
	Bad debt expense in foreign currencies (-)		(324,727	)		—		(0.12	)		(312,211	)		—		(0.11	)		(191,224	)		—		(0.07	)
	Subtotal l		26,513,912			1.82		9.40			28,638,685			1.51		10.20			27,221,069			1.37		10.38
Others	Cash		1,185,379			—		0.42			1,169,566			—		0.42			1,116,715			—		0.43
	Property and equipment for business purposes		2,345,333			—		0.83			2,325,893			—		0.83			2,328,130			—		0.89
	Others		14,653,148			—		5.20			15,925,347			—		5.67			15,235,540			—		5.81
	Subtotal		18,183,859			—		6.45			19,420,807			—		6.92			18,680,385			—		7.12
Total			282,009,749			2.58		100.00			280,725,524			2.62		100.00			262,367,557			2.87		100.00

* Based on K-IFRS separate financial statements

16

[Trust Accounts]

																(Unit: in millions of Won, %)
Type	Managed Item	3Q 2017							2016							2015
		Average Balance			Interest Rate		Share		Average Balance			Interest Rate		Share		Average Balance			Interest Rate			Share
Profit	Loans		26,854			3.59		0.06		23,088			4.21		0.06		19,482			4.05			0.06
	Securities		7,592,321			3.31		17.54		4,701,052			1.93		12.10		3,470,064			(0.57	)		10.38
	Other		23,161,530			1.46		53.51		22,237,766			1.63		57.25		21,231,787			2.00			63.49
	Reserves for bond ratings (-)		(42	)		0.00		0.00		(36	)		0.00		0.00		(68	)		0.00			0.00
	Present value discount (-)		(86	)		0.00		0.00		(215	)		0.00		0.00		(414	)		0.00			0.00
	Subtotal		30,780,577			1.92		71.11		26,961,655			1.68		69.41		24,720,851			1.64			73.92
Non-profit	Subtotal		12,503,114			—		28.89		11,882,833			—		30.59		8,721,881			—			26.08
Total			43,283,691			—		100.00		33,442,732			—		100.00		29,994,637			—			100.00

4. Other Information Necessary for Making Investment Decisions

a. Selected Ratios

BIS Capital Adequacy Ratios

							(unit: in 100 millions of Won)
Type	3Q 2017			2016			2015
Equity capital (A)		229,406			229,005			210,514
Risk weighted assets (B)		1,509,550			1,497,281			1,540,709
Capital adequacy ratio (A/B)		15.20	%		15.29	%		13.66	%

* Based on Basel III standards

* Based on K-IFRS consolidated financial statements

Liquidity Ratios

	(unit: %)
Type	3Q 2017		2016		2015
Liquidity coverage ratio (LCR)		102.29		109.61		106.67
Foreign currency liquidity coverage ratio(LCR) **		108.79		—		—
Ratio of business purpose premises and equipment		13.34		13.49		14.37

* Based on K-IFRS consolidated financial statements

* 3Q 2017 figures are based on the applicable monthly average balance, 2016 and 2015 figures are based on ending balances.

** Foreign currency liquidity coverage ratio : Enforced starting year 2017 (currently required to be 60% or greater, which will annually increase 10% to be 80% or greater in 2019.)

17

b. Asset Quality

								(unit: in 100 millions of Won)
Type		3Q 2017			2016			2015
Total loans	Total		2,196,681			2,166,122			2,108,424
	Corporate		1,152,344			1,140,252			1,185,857
	Household		1,044,337			1,025,870			922,567
Sub-standard and below loans Sub-standard and below loan ratio	Total		16,096			21,121			31,009
	Corporate		0.73	%		0.98	%		1.47	%
			13,510			18,237			27,701
			1.17	%		1.60	%		2.34	%
	Household		2,586			2,884			3,308
			0.25	%		0.28	%		0.36	%
Delinquency ratio	Based on total loans (after seasonal adjustment)		0.38	%		0.46	%		0.82	%
	Based on corporate loans (after seasonal adjustment)		(0.39	%)		(0.52	%)		(0.93	%)
			0.52	%		0.61	%		1.39	%
			(0.54	%)		(0.66	%)		(1.57	%)
	Based on household loans (after seasonal adjustment)		0.30	%		0.31	%		0.39	%
			(0.31	%)		(0.33	%)		(0.43	%)

* Based on K-IFRS separate financial statements

c. Recent Developments

On November 1, 2014, the Bank merged with its holding company, Woori Finance Holdings, according to the resolution of the board of directors on July 28, 2014, to maximize the possibility of a successful privatization.

New shares of the Bank, the surviving entity, were allotted and delivered to the shareholders of Woori Finance Holdings based on a 1:1.00000000 ratio.

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

The major terms of the Merger are as follows:

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

18

III. Financial Information

1. Condensed Financial Statements (Consolidated)

Summary Consolidated Statement of Financial Position

(The Bank and its Consolidated Subsidiaries)

(unit: in millions of Won)

Classification	3Q 2017			2016			2015
ASSETS
Cash and cash equivalents		6,812,489			7,591,324			6,644,055
Financial assets at fair value through profit or loss		4,609,487			5,650,724			5,132,657
Available-for-sale financial assets		18,624,588			20,817,583			17,170,592
Held-to-maturity financial assets		16,325,482			13,910,251			13,621,640
Loans and receivables		266,972,072			258,392,633			244,842,062
Investments in joint ventures and associates		557,860			439,012			643,861
Investment properties		361,355			358,497			351,496
Premises and equipment		2,490,725			2,458,025			2,471,206
Intangible assets and goodwill		524,914			483,739			419,806
Assets held for sale		2,909			2,342			17,904
Current tax assets		4,105			6,229			6,782
Deferred tax assets		258,031			232,007			210,597
Derivative assets		109,828			140,577			183,128
Net defined benefit assets		5,934			70,938			—
Other assets		215,383			128,846			143,286
Total assets		317,875,162			310,682,727			291,859,072
LIABILITIES
Financial liabilities at fair value through profit or loss		2,468,106			3,803,358			3,460,561
Deposits due to customers		226,344,233			221,020,411			209,141,826
Borrowings		16,314,499			18,769,515			20,033,917
Debentures		27,537,013			23,565,449			21,898,859
Provisions		401,185			428,477			516,601
Net defined benefit liability		26,433			64,666			99,691
Current tax liabilities		249,960			171,192			108,943
Deferred tax liabilities		22,303			22,023			19,379
Derivative liabilities		41,619			7,221			—
Other financial liabilities		23,529,630			21,985,086			16,964,206
Other liabilities		323,213			299,376			305,174
Total liabilities		297,258,194			290,136,774			272,549,157
EQUITY
Owners’ equity:		20,450,563			20,386,160			19,188,472
Capital stock		3,381,392			3,381,392			3,381,392
Hybrid securities		3,017,888			3,574,896			3,334,002
Capital surplus		287,066			286,331			294,259
Other equity		(1,759,299	)		(1,468,025	)		(1,547,303	)
Retained earnings		15,523,516			14,611,566			13,726,122
Non-controlling interests		166,405			159,793			121,443
Total equity		20,616,968			20,545,953			19,309,915
Total liabilities and equity		317,875,162			310,682,727			291,859,072
Number of Consolidated Subsidiaries		68			74			71

19

Summary Consolidated Statement of Comprehensive Income

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

Classification	3Q 2017			3Q 2016			2016			2015
OPERATING INCOME:		1,801,916			1,389,221			1,574,206			1,351,586
Net interest income		3,901,876			3,745,200			5,019,544			4,761,900
Net fees and commissions income		814,569			709,513			937,131			976,796
Dividend income		108,287			137,280			184,510			102,923
Gain on financial instruments at fair value through profit or loss		(97,636	)		(43,766	)		114,387			240,342
Gain on available-for-sale financial assets		148,445			32,772			(1,035	)		(3,281	)
Impairment losses due to credit loss		(501,022	)		(670,843	)		(834,076	)		(966,646	)
General and administrative expenses		(2,647,052	)		(2,411,782	)		(3,478,476	)		(3,150,387	)
Other net operating income (expenses)		74,449			(109,153	)		(367,779	)		(610,061	)
Non-operating income		(330	)		(29,825	)		(20,817	)		100,360
Net income before income tax expense from continuing operations		1,801,586			1,359,396			1,553,389			1,451,946
Income tax expense from continuing operations		409,145			242,217			275,856			376,554
Net income from continuing operations		1,392,441			1,117,179			1,277,533			1,075,392
Net income from discontinued operations		—			—			—			—
Net income		1,392,441			1,117,179			1,277,533			1,075,392
Net income attributable to owners		1,378,507			1,105,915			1,261,266			1,059,157
Profit from continuing operations		1,378,507			1,105,915			1,261,266			1,059,157
Profit from discontinued operations		—			—			—			—
Net income attributable to the non-controlling interests		13,934			11,264			16,267			16,235
Profit from continuing operations		13,934			11,264			16,267			16,235
Profit from discontinued operations		—			—			—			—
Other comprehensive income (loss), net of tax		(88,750	)		(68,145	)		77,894			31,162
Items that will not be reclassified to profit or loss		13,143			(52,788	)		34,162			(78,267	)
Items that may be reclassified to profit or loss		(101,893	)		(15,357	)		43,732			109,429
Total comprehensive income		1,303,691			1,049,034			1,355,427			1,106,554
Comprehensive income attributable to the owners		1,295,391			1,037,516			1,332,614			1,094,870
Comprehensive income attributable to non-controlling interests		8,300			11,518			22,813			11,684
NET INCOME PER SHARE:
Continuing and discontinued operations
Basic earnings per common share		1,855			1,421			1,567			1,301
Continuing operations
Basic earnings per common share		1,855			1,421			1,567			1,301

20

2. Condensed Financial Statements (Separate)

Summary Statement of Financial Position

(The Bank)         (unit: in millions of Won)

Classification	3Q 2017			2016		2015
ASSETS
Cash and cash equivalents		5,050,978			6,104,029		5,440,326
Financial assets at fair value through profit or loss		3,014,346			4,076,872		3,569,625
Available-for-sale financial assets		17,482,663			18,105,862		15,869,654
Held-to-maturity financial assets		16,216,094			13,792,266		13,527,452
Loans and receivables		248,183,210			241,508,048		231,083,160
Investments in subsidiaries and associates		4,211,863			3,779,169		3,730,247
Investment properties		344,335			348,393		344,892
Premises and equipment		2,380,564			2,342,280		2,341,506
Intangible assets		296,891			242,230		187,520
Assets held for sale		1,979			2,342		17,904
Current tax assets		—			—		—
Deferred tax assets		195,913			162,211		172,368
Derivative assets		109,385			140,577		183,128
Net defined benefit assets		5,934			70,938		—
Other assets		183,469			96,926		109,126
Total assets		297,677,624			290,772,143		276,576,908
LIABILITIES
Financial liabilities at fair value through profit or loss		2,456,670			3,793,479		3,448,180
Deposits due to customers		215,888,152			211,382,380		201,353,128
Borrowings		15,204,833			16,060,821		18,760,947
Debentures		21,255,612			18,166,057		17,259,749
Provisions		357,000			380,473		467,887
Net defined benefit liability		—			—		45,678
Current tax liabilities		238,134			148,672		77,190
Deferred tax liabilities		—			—		—
Derivative liabilities		23,345			7,221		—
Other financial liabilities		22,298,777			20,827,284		16,111,469
Other liabilities		170,049			153,238		163,362
Total liabilities		277,892,572			270,919,625		257,687,590
EQUITY
Capital stock		3,381,392			3,381,392		3,381,392
Hybrid securities		3,017,888			3,574,896		3,334,002
Capital surplus		269,533			269,533		269,533
Other equity		(102,193	)		138,542		106,016
Retained earnings		13,218,432			12,488,155		11,798,375
Total equity		19,785,052			19,852,518		18,889,318
Total liabilities and equity		297,677,624			290,772,143		276,576,908

* The valuation method of our equity interest in subsidiaries, associates and joint ventures is the cost method.

21

Summary Statement of Comprehensive Income

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

Classification	3Q 2017			3Q 2016			2016			2015
OPERATING INCOME:		1,530,907			1,148,374			1,270,501			1,090,372
Net interest income		3,265,366			3,174,046			4,222,447			4,052,479
Net fees and commissions income		706,676			639,914			842,883			856,343
Dividend income		110,180			176,184			220,015			169,009
Gain on financial instruments at fair value through profit or loss		(94,788	)		(54,867	)		97,225			220,282
Gain on available-for-sale financial assets		137,449			57,061			35,525			(7,960	)
Impairment losses due to credit loss		(336,690	)		(540,504	)		(640,443	)		(766,169	)
General and administrative expenses		(2,352,496	)		(2,159,408	)		(3,115,371	)		(2,846,490	)
Other net non-operating income (expenses)		95,210			(144,052	)		(391,780	)		(587,122	)
Non-operating income		11,951			36,394			40,144			144,635
Net income before income tax expense		1,542,858			1,184,768			1,310,645			1,235,007
Income tax expense		346,024			219,688			245,043			300,418
Net income from continuing operations		1,196,834			965,080			1,065,602			934,589
Net income from discontinued operations		—			—			—			—
Net income		1,196,834			965,080			1,065,602			934,589
Other comprehensive income (loss), net of tax		(32,577	)		(51,244	)		32,526			(8,583	)
Items that will not be reclassified to profit or loss		12,868			(52,105	)		33,191			(73,591	)
Items that may be reclassified to profit or loss		(45,445	)		861			(665	)		65,008
Total comprehensive income		1,164,257			913,836			1,098,128			926,006
NET INCOME PER SHARE:
Basic and diluted net income per share		1,585			1,212			1,277			1,116

22

IV. Independent Auditor’s Opinion

1. Independent Auditor’s Opinion

	3Q 2017	2016	2015
Auditor	Deloitte Anjin LLC	Deloitte Anjin LLC	Deloitte Anjin LLC
Auditor’s Opinion	(1)	Unqualified Opinion	Unqualified Opinion

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

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

a. Audit Services

			(units: Won, hours)
Term	Auditor	Description	Fee	Total Time
3Q 2017	Deloitte Anjin LLC	Closing audit	KRW 1,786 million		—
		Interim audit (including internal accounting management system)			—
		3Q review			4,880 hours
		1H review			4,061 hours
		1Q review			4,020 hours
2016	Deloitte Anjin LLC	Closing audit	KRW 1,561 million		7,515 hours
		Interim audit (including internal accounting management system)			4,210 hours
		3Q review			4,991 hours
		1H review			3,526 hours
		1Q review			3,920 hours
2015	Deloitte Anjin LLC	Closing audit	KRW 1,516 million		7,659 hours
		Interim audit (including internal accounting management system)			4,350 hours
		3Q review			3,785 hours
		1H review			3,836 hours
		1Q review			3,778 hours

b. Non-Audit Services

Term	Date of Execution of Agreement		Description of Service	Service Term	Fees
3Q 2017		Mar. 15, 2017	Tax adjustment	Each quarter and end of term	KRW 120 million
		Mar. 15, 2017	PCAOB and SOX Auditing	May 1, 2017 ~ April 30, 2018	KRW 1,288 million
2016		Mar. 28, 2016	Tax adjustment	Each quarter and end of term	KRW 115 million
		Mar. 28, 2016	PCAOB and SOX Auditing	May 1, 2016 ~ Apr. 30, 2017	KRW 1,127 million
		Mar. 23, 2016	Issuance of GMTN-related comfort letter	May 2016	USD 100,000
2015		May 14, 2015	Review of Japanese F/S related to Samurai bonds	May and Sep. 2015	KRW 74 million
		May 14, 2015	Issuance of GMTN-related comfort letter	May 2015	USD 110,000
		Apr. 03, 2015	Tax adjustment	Each quarter and end of term	KRW 110 million
		Apr. 03, 2015	PCAOB and SOX Auditing	May 1, 2015~ Apr. 30, 2016	KRW 1,094 million
		Jan. 05, 2015	Issuance of GMTN-related comfort letter	Jan. 2015	USD 60,000

23

V. Corporate Governance and Affiliated Companies

1. About the Board of Directors

a. Composition of the Board of Directors

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

b. Committees under the Board of Directors

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

(a) Audit Committee

(b) Board of Directors Management Committee

(c) Risk Management Committee

(d) Compensation Committee

(e) Committee for Recommending Officer Candidates

As of September 30, 2017

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

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

24

2. Affiliated Companies (as of September 30, 2017)

* The liquidation of Woori Blackstone Korea Opportunity Private Equity Fund No. 1 and Woori Columbus Private Equity Fund No. 1 has been completed, and as of September 30, 2017, equity ownership in each entity is 0%; but due to incomplete dissolution, the two entities are included as affiliated companies.

Note) Dissolution of Woori Private Equity Fund was completed as of July 6, 2017, and the entity is excluded from the affiliated companies.

25

VI. Shareholder Information

1. Share Distribution

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

As of September 30, 2017 (units: shares, %)

				Shares Held
				Beginning balance				Ending balance
Name	Relation	Type		Stock		Share		Stock		Share		Notes
KDIC( Korea Deposit Insurance Corporation)	Largest Shareholder		Common		157,977,161		23.37		125,205,147		18.52		—
Total			Common		157,977,161		23.37		125,205,147		18.52		—
			Others		—		—		—		—

b. Changes in the Largest Shareholder

As of September 30, 2017 (units: shares, %)

Change of Date	Largest Shareholder	Stock Held		Share		Notes
January 1, 2014	Woori Finance Holdings		596,690,380		100.00
November 1, 2014	KDIC		385,285,578		*56.79	Merger date of Woori Finance Holdings and Woori Bank
December 8, 2014	KDIC		345,142,556		51.04	Sale of stake
October 2, 2015	KDIC		345,142,556		51.06	Change in the share ownership ratio due to the retirement of shares
December 1, 2016	KDIC		239,097,161		35.37	Sales of stakes to Tongyang Life Insurance, Eugene Asset Management, Mirae Asset Global Investments and Korea Investment & Securities
December 8, 2016	KDIC		185,017,161		27.37	Sales of stakes to Kiwoom Securities and Hanwha Life Insurance
December 14, 2016	KDIC		157,977,161		23.37	Sale of stake to IMM PE
January 31, 2017	KDIC		144,457,161		21.37	Sale of stake to IMM PE
May 11, 2017	KDIC		143,857,161		21.28	Exercise of Shinhan Investment Corp.’s call option (0.09%)
June 16, 2017	KDIC		132,897,007		19.66	Exercise of call option of Employee Stock Ownership Association of Woori Bank (1.62%)
June 22, 2017	KDIC		131,697,007		19.48	Exercise of NH Investment & Securities’ call option (0.18%)
June 27, 2017	KDIC		130,697,007		19.33	Exercise of NH Investment & Securities’ call option (0.15%)
June 28, 2017	KDIC		128,185,796		18.96	Exercise of NH Investment & Securities’ call option ( 0.37%)
July 3, 2017	KDIC		126,935,796		18.78	Exercise of Hyosung Capital’s call option (0.18%)
September 28, 2017	KDIC		125,205,147		18.52	Exercise of call option of Employee Stock Ownership Association of Woori Bank (0.26%)

Note) KDIC : Korea Deposit Insurance Corporation

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

26

c. Share Ownership of More Than 5%

As of September 30, 2017 (unless otherwise indicated)			(units: shares, %)
Name	Shares					Notes
	No. of shares		Percentage of shareholding
Korea Deposit Insurance Corporation		125,205,147		18.52	%
National Pension Service		63,902,005		9.45	%		Note1	)
Nobis1, Inc. (IMM PE)		40,560,000		6.00	%		—
Employee Stock Ownership Association		36,153,488		5.35	%		Note2	)

Note1) Based on the disclosure of NPS (National Pension Service) on October 10, 2017, as of July 20, 2017, which may differ from the current actual number of shares

Note2) Based on the account of the Employee Stock Ownership Association (the total of all members)

2. Stock Price and Stock Market Performance

a. Domestic Stock Market

										(units: Won, shares)
Type		April 2017		May 2017		June 2017		July 2017		August 2017		September 2017
Common Stock	High		15,000		16,350		18,600		19,950		19,200		18,550
	Low		13,050		14,850		15,300		18,350		18,200		17,050
	Average		14,060		15,528		16,995		18,788		18,655		17,648
Monthly Trade Volume	High		3,298,803		3,958,143		13,105,480		3,304,943		6,655,577		2,954,925
	Low		974,506		732,429		1,153,280		896,910		629,366		907,532
	Monthly Total		31,127,285		33,003,973		65,580,274		36,423,732		36,919,458		31,593,313

* Source: KRX KOSPI Market

* Share prices are based on closing prices.

b. Foreign Stock Market (NYSE)

								(units: US Dollars, Won, ADRs)
Type		April 2017		May 2017		June 2017		July 2017		August 2017		September 2017
ADR	High		40.28		43.81		48.70		53.50		51.85		49.53
	Low		35.21		39.74		41.50		48.25		47.80		44.49
	Average		37.12		41.50		45.17		50.15		49.72		46.31
Won Conversion	High		45,536		49,702		55,498		59,711		58,170		55,760
	Low		39,410		44,934		46,554		55,453		54,238		50,340
	Average		42,055		46,709		51,052		56,892		56,225		52,405
Monthly Trade Volume	High		17,800		17,500		13,400		65,900		40,800		38,500
	Low		1,200		1,300		2,000		2,600		3,100		5,600
	Monthly Total		73,300		181,200		125,500		293,200		314,500		305,600

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

* One ADR represents three common shares.

* Share prices are based on closing prices.

27

VII. Directors and Employee Information

1. Directors

As of September 30, 2017

Position			Name	Common Stock Owned		Expiration of Term
President & CEO	Registered	Standing	Kwang-Goo Lee		26,251	Note 1 )
Standing Member of Audit Committee	Registered	Standing	Jung-Sik Oh		1,350	Note 1 )
Outside Director	Registered	Non-Standing	Sung-Tae Ro		—	December 30, 2018
Outside Director	Registered	Non-Standing	Sang-Hoon Shin		10,000	December 30, 2018
Outside Director	Registered	Non-Standing	Sang-Yong Park		—	December 30, 2018
Outside Director	Registered	Non-Standing	Zhiping Tian		—	December 30, 2018
Outside Director	Registered	Non-Standing	Dong-Woo Chang		—	December 30, 2018
Non-standing Director	Registered	Non-Standing	Kwang-Woo Choi		—	Note 2)
Executive Vice President	Non-Registered	Standing	Ki-Myung Nam		8,168	December 8, 2017
Executive Vice President	Non-Registered	Standing	Tae-Seung Sohn		23,127	December 8, 2017
Executive Vice President	Non-Registered	Standing	Won-Jai Jeong		13,560	December 8, 2018
Executive Vice President	Non-Registered	Standing	Hong-Hee Kim		21,940	December 8, 2017
Executive Vice President	Non-Registered	Standing	Jung-Hoon Choi		21,649	December 3, 2017
Executive Vice President	Non-Registered	Standing	Jae-Hyun Cho		12,000	December 8, 2017
Executive Vice President	Non-Registered	Standing	Seong-Il Park		15,914	December 8, 2017
Executive Vice President	Non-Registered	Standing	Sun-Kyu Kim		15,425	December 8, 2017
Executive Vice President	Non-Registered	Standing	Hyun-Seok Shin		17,525	December 8, 2017
Executive Vice President	Non-Registered	Standing	An-Ho Jang		21,526	December 8, 2017
Executive Vice President	Non-Registered	Standing	Woon-Haeng Cho		27,345	December 8, 2017
Executive Vice President	Non-Registered	Standing	Kwang-Seok Kwon		8,057	December 8, 2017
Managing Director	Non-Registered	Standing	Yeong-Bae Kim		9,963	December 3, 2017
Managing Director	Non-Registered	Standing	Jeong-Jin Heo		13,983	December 3, 2017
Managing Director	Non-Registered	Standing	Dong-Yeon Lee		16,434	December 3, 2017
Managing Director	Non-Registered	Standing	Hyun-Poong Hong		8,110	December 8, 2018
Managing Director	Non-Registered	Standing	Tae-Joong Ha		12,497	December 8, 2018
Managing Director	Non-Registered	Standing	Chai-Pong Cheong		12,144	December 8, 2018
Managing Director	Non-Registered	Standing	Jong-In Lee		12,467	December 8, 2018
Managing Director	Non-Registered	Standing	Won-Duk Lee		—	December 8, 2018
Managing Director	Non-Registered	Standing	Chang-Jae Lee		15,938	December 8, 2018
Managing Director	Non-Registered	Standing	Jeong-Ki Kim		26,281	December 8, 2018
Managing Director	Non-Registered	Standing	Dae-Jin Lee		27,625	December 8, 2018

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

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

28

2. Employee Status

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

Number of Employees

Average Tenure Years

Total Compensation

Average Compensation Per Person

Note

Regular

Contract

Total

Total

(Short time worker)

Total

(Short time worker)

Total

14,299

209

664

122

14,963

16.4

1,040,028

70

Note1

)

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

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

Note 1) When excluding amounts that were determined in 2016 but paid in 1Q 2017, total compensation is KRW 962,622 million (Average compensation per person is KRW 64 million)

3. Directors’ Compensation

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

Items	Number of Persons		Total Compensation		Average Compensation Per Director		Note
Registered Directors (excludes outside directors and audit committee members)		2		775		388		—
Outside Directors (excludes audit committee members)		3		147		49		—
Audit Committee Members		4		487		122		—
Total		9		1,409		157		—

* Number of persons includes the outside directors and audit committee members that resigned in 2017 (as of September 30, 2017, there are two registered directors, three outside directors and three members of the Audit Committee)

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

* Total compensation equals the aggregate amount paid from January to September of 2017

VIII. Related Party Transactions

Extensions of Credit to Major Shareholders, Etc.

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

Name	Item	Current Balance		Origination Date	Maturity Date
Korea Deposit Insurance Corporation	Loans		250,000	August 29, 2016	August 28, 2018
	Loans		500,000	August 29, 2016	August 28, 2018
	Bonds		49,993	January 22, 2013, etc.	January 22, 2018, etc.
Woori Investment Bank	Loans		25,000	March 10, 2016	March 2, 2018
	CMA		100,000	July 1, 2017	June 30, 2018
Woori Card	Loans		250,000	April 1, 2013	March 2, 2018
Woori P&S	Loans		14,289	May 25, 2016	May 25, 2026

29

SIGNATURES

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

	Woori Bank
	(Registrant)
Date: November 14, 2017	By: /s/ Hyun Seok Shin
	(Signature)
	Name : Hyun Seok Shin
	Title : Executive Vice President

30

EX-99.1

Exhibit 99.1

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2017 AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 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 November 13, 2017

To the Shareholders and the Board of Directors of

Woori Bank

Report on the Consolidated Financial Statements

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

Management’s Responsibility for the Consolidated Interim Financial Statements

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

Independent Accountants’ Responsibility

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

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

Review conclusion

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

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

^© 2017. For information, contact Deloitte Anjin LLC

Others

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

Accounting principles and review standards and their application in practice vary among countries. The accompanying consolidated financial statements are not intended to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries other than the Republic of Korea. In addition, the procedures and practices utilized in the Republic of Korea to review such financial statements may differ from those generally accepted and applied in other countries. Accordingly, this report and the accompanying consolidated financial statements are for use by those knowledgeable about Korean accounting procedures and review standards and their application in practice.

November 13, 2017

Notice to Readers

This report is effective as of November 13, 2017, 2017, the accountants’ review report date. Certain subsequent events or circumstances may have occurred between the accountants’ review report date and the time the accountants’ review report is read. Such events or circumstances could significantly affect the consolidated financial statements and may result in modifications to the accountants’ review report.

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2017 AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016

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

Kwang Goo Lee

President and Chief Executive Officer

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

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

AS OF SEPTEMBER 30, 2017 AND DECEMBER 31, 2016

	September 30, 2017		December 31, 2016
	(Korean Won in millions)
ASSETS
Cash and cash equivalents (Note 6)		6,812,489		7,591,324
Financial assets at fair value through profit or loss (Notes 4,7,11,12,18 and 26)		4,609,487		5,650,724
Available-for-sale financial assets (Notes 4,8,11,12 and 18)		18,624,588		20,817,583
Held-to-maturity financial assets (Notes 4,9,11,12 and 18)		16,325,482		13,910,251
Loans and receivables (Notes 4,10,11,12,18 and 45)		266,972,072		258,392,633
Investments in joint ventures and associates (Note 13)		557,860		439,012
Investment properties (Note 14)		361,355		358,497
Premises and equipment (Notes 15 and 18)		2,490,725		2,458,025
Intangible assets and goodwill (Note 16)		524,914		483,739
Assets held for sale (Note 17)		2,909		2,342
Current tax assets		4,105		6,229
Deferred tax assets		258,031		232,007
Derivative assets (Notes 4,11,12 and 26)		109,828		140,577
Net defined benefit assets (Note 24)		5,934		70,938
Other assets (Notes 19 and 45)		215,383		128,846
Total assets		317,875,162		310,682,727
LIABILITIES
Financial liabilities at fair value through profit or loss (Notes 4,11,12,20 and 26)		2,468,106		3,803,358
Deposits due to customers (Notes 4,11,21 and 45)		226,344,233		221,020,411
Borrowings (Notes 4,11,12 and 22)		16,314,499		18,769,515
Debentures (Notes 4,11 and 22)		27,537,013		23,565,449
Provisions (Notes 23 and 44)		401,185		428,477
Net defined benefit liability (Note 24)		26,433		64,666
Current tax liabilities		249,960		171,192
Deferred tax liabilities		22,303		22,023
Derivative liabilities (Notes 4,11,12 and 26)		41,619		7,221
Other financial liabilities (Notes 4,11,12, 25 and 45)		23,529,630		21,985,086
Other liabilities (Notes 25 and 45)		323,213		299,376
Total liabilities		297,258,194		290,136,774

(Continued)

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

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

	September 30, 2017			December 31, 2016
	(Korean Won in millions)
EQUITY
Owners’ equity:		20,450,563			20,386,160
Capital stock (Note 28)		3,381,392			3,381,392
Hybrid securities (Note 29)		3,017,888			3,574,896
Capital surplus (Note 28)		287,066			286,331
Other equity (Note 30)		(1,759,299	)		(1,468,025	)
Retained earnings (Notes 31 and 32)
(Regulatory reserve for credit loss as of September 30, 2017 and December 31, 2016 is 2,438,191 million Won and 2,255,252 million Won, respectively
Regulatory reserve for credit loss to be reserved as of September 30, 2017 and December 31, 2016 is 102,705 million Won and 182,939 million Won, respectively
Planned provision of regulatory reserve for credit loss as of September 30, 2017 and December 31, 2016 is 102,705 million Won and 182,939 million Won, respectively)		15,523,516			14,611,566
Non-controlling interests (Note 1)		166,405			159,793
Total equity		20,616,968			20,545,953
Total liabilities and equity		317,875,162			310,682,727

See accompanying notes

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS AND NINE MONTHS

ENDED SEPTEMBER 30, 2017 AND 2016

	2017						2016
	Three months ended September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
	(Korean Won in millions, except per share data)
Interest income		2,187,829			6,377,413			2,108,925			6,402,487
Interest expense		836,273			2,475,537			852,483			2,657,287
Net interest income (Notes 34 and 45)		1,351,556			3,901,876			1,256,442			3,745,200
Fees and commissions income		534,597			1,548,490			482,002			1,388,832
Fees and commissions expense		257,728			733,921			240,495			679,319
Net fees and commissions income (Notes 35 and 45)		276,869			814,569			241,507			709,513
Dividend Income (Note 36)		48,842			108,287			16,881			137,280
Net gain (loss) on financial instruments at fair value through profit or loss (Note 37)		48,773			(97,636	)		(102,362	)		(43,766	)
Net gain on available-for-sale financial assets (Note 38)		44,273			148,445			3,889			32,772
Impairment losses on credit loss (Notes 39 and 45)		(217,259	)		(501,022	)		(240,099	)		(670,843	)
General and administrative expenses (Note 40 and 45)		(1,108,625	)		(2,647,052	)		(767,230	)		(2,411,782	)
Other net operating income (expenses) (Notes 40 and 45)		(126,741	)		74,449			31,090			(109,153	)
Operating income		317,688			1,801,916			440,118			1,389,221
Share of gains (losses) of joint ventures and associates (Note 13)		69,670			5,392			(6,375	)		(18,019	)
Other net non-operating income (loss)		(15,720	)		(5,722	)		14,532			(11,806	)
Non-operating income (loss) (Note 41)		53,950			(330	)		8,157			(29,825	)
Net income before income tax expense		371,638			1,801,586			448,275			1,359,396
Income tax expense (Note 42)		88,212			409,145			88,883			242,217
Net income
(Net income after the provision of regulatory reserve for credit loss for the three months ended September 30, 2017 and 2016 are 230,682 million Won and 372,698 million Won, respectively, and net income after the provision of regulatory reserve for credit loss for the nine months ended September 30, 2017 and 2016 are 1,289,736 million Won and 1,117,659 million Won, respectively) (Note 32)		283,426			1,392,441			359,392			1,117,179
Remeasurement of the net defined benefit liability		22,820			13,143			(8,121	)		(52,788	)
Items that will not be reclassified to profit or loss		22,820			13,143			(8,121	)		(52,788	)
Gain (loss) on available-for-sale financial assets		(22,335	)		(51,041	)		(27,945	)		52,278
Share of other comprehensive gain (loss) of joint ventures and associates		3,410			4,917			(2,732	)		(2,965	)
Gain (loss) on foreign currency translation for foreign operations		14,488			(54,522	)		(72,392	)		(75,041	)
Gain (loss) on valuation of cashflow hedge		279			(1,247	)		—			10,371
Items that may be reclassified to net income		(4,158	)		(101,893	)		(103,069	)		(15,357	)
Other comprehensive income (loss), net of tax		18,662			(88,750	)		(111,190	)		(68,145	)
Total comprehensive income		302,088			1,303,691			248,202			1,049,034
Net income attributable to:
Net income attributable to owners		280,146			1,378,507			355,649			1,105,915
Net income attributable to non-controlling interests		3,280			13,934			3,743			11,264
Total comprehensive income attributable to:
Comprehensive income attributable to owners		299,649			1,295,391			248,848			1,037,516
Comprehensive income (loss) attributable to non-controlling interests		2,439			8,300			(646	)		11,518
Basic and diluted earnings per share (In Korean Won) (Note 43)		358			1,855			455			1,421

See accompanying notes

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016

	Capital stock		Hybrid securities			Capital surplus		Other Equity and others			Retained earnings			Controlling interests			Non- controlling interests			Total equity
	(Korean Won in millions)
January 1, 2016		3,381,392		3,334,002			294,259		(1,547,303	)		13,726,122			19,188,472			121,443			19,309,915
Net income		—		—			—		—			1,105,915			1,105,915			11,264			1,117,179
Dividends		—		—			—		—			(168,317	)		(168,317	)		(1,275	)		(169,592	)
Disposal of investments in consolidated subsidiaries		—		—			1		—			—			1			—			1
Gain on valuation of available-for-sale financial assets		—		—			—		51,654			—			51,654			624			52,278
Changes in equity of joint ventures and associates		—		—			—		(2,965	)		—			(2,965	)		—			(2,965	)
Loss on foreign currencies translation of foreign operations		—		—			—		(74,675	)		—			(74,675	)		(366	)		(75,041	)
Gain on valuation of cash flow hedge		—		—			—		10,371			—			10,371			—			10,371
Remeasurement of the net defined benefit liability		—		—			—		(52,783	)		—			(52,783	)		(5	)		(52,788	)
Dividends on hybrid securities		—		—			—		—			(149,506	)		(149,506	)		—			(149,506	)
Issuance of hybrid securities		—		549,905			—		—			—			549,905			—			549,905
September 30, 2016		3,381,392		3,883,907			294,260		(1,615,701	)		14,514,214			20,458,072			131,685			20,589,757
January 1, 2017		3,381,392		3,574,896			286,331		(1,468,025	)		14,611,566			20,386,160			159,793			20,545,953
Net income		—		—			—		—			1,378,507			1,378,507			13,934			1,392,441
Dividends		—		—			—		—			(336,636	)		(336,636	)		(1,544	)		(338,180	)
Subsidiary capital increase		—		—			735		—			—			735			(144	)		591
Gain(loss) on valuation of available-for-sale financial assets		—		—			—		(51,480	)		—			(51,480	)		439			(51,041	)
Changes in equity of joint ventures and associates		—		—			—		4,917			—			4,917			—			4,917
Loss on foreign currencies translation of foreign operations		—		—			—		(48,506	)		—			(48,506	)		(6,016	)		(54,522	)
Loss on valuation of cash flow hedge		—		—			—		(1,247	)		—			(1,247	)		—			(1,247	)
Remeasurement of the net defined benefit liability		—		—			—		13,200			—			13,200			(57	)		13,143
Dividends on hybrid securities		—		—			—		—			(129,921	)		(129,921	)		—			(129,921	)
Issuance of hybrid securities		—		559,565			—		—			—			559,565			—			559,565
Redemption of hybrid securities		—		(1,116,573	)		—		(208,158	)		—			(1,324,731	)		—			(1,324,731	)
September 30, 2017		3,381,392		3,017,888			287,066		(1,759,299	)		15,523,516			20,450,563			166,405			20,616,968

See accompanying notes

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016

	For the nine months ended September 30
	2017			2016
	(Korean Won in millions)
Cash flows from operating activities:
Net income		1,392,441			1,117,179
Adjustments:
Income tax expense		409,145			242,217
Interest income		(6,377,413	)		(6,402,487	)
Interest expense		2,475,537			2,657,287
Dividend income		(108,287	)		(137,280	)
		(3,601,018	)		(3,640,263	)
Additions of expenses not involving cash outflows:
Impairment losses on credit loss		501,022			670,843
Impairment loss on investments in joint ventures and associates		74,171			29,280
Loss on transaction and valuation of derivatives instruments (hedging)		39,768			31,778
Loss on hedged items (fair value hedge)		6,856			82,263
Provisions		52,391			22,695
Retirement benefits		107,430			114,277
Depreciation and amortization		179,085			191,127
Loss on disposal of investments in joint ventures and associates		38,701			15,060
Loss on disposal of premises and equipment and other assets		8,574			6,611
Impairment loss on premises and equipment and other assets		269			1,403
		1,008,267			1,165,337
Deduction of revenues not involving cash inflows:
Gain on valuation of financial instruments at fair value through profit or loss		65,764			182,767
Gain on available-for-sale financial assets		148,445			32,772
Gain on valuation of investments in joint ventures and associates		79,563			11,261
Gain on transaction and valuation of derivatives instruments (hedging)		7,695			77,723
Gain on hedged items (fair value hedge)		25,055			30,602
Reversal of provisions		2,000			864
Gain on disposal of investments in joint ventures and associates		33,194			1,250
Gain on disposal of premises and equipment and other assets		4,895			1,525
Reversal of impairment loss on premises and equipment and other assets		604			3,711
		367,215			342,475
Changes in operating assets and liabilities:
Financial instruments at fair value through profit or loss		(232,152	)		(137,199	)
Loans and receivables		(10,076,492	)		(17,776,026	)
Other assets		(86,535	)		(94,998	)
Deposits due to customers		5,326,478			11,323,759
Provision		(98,616	)		(58,034	)
Net defined benefit liability		(19,952	)		(249,297	)
Other financial liabilities		1,644,842			9,621,522
Other liabilities		14,749			18,750
		(3,527,678	)		2,648,477

(Continued)

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016 (CONTINUED)

	For the nine months ended September 30
	2017			2016
	(Korean Won in millions)
Cash received from (paid for) operating activities:
Interest income received		6,445,201			6,409,990
Interest expense paid		(2,535,668	)		(2,498,628	)
Dividends received		110,855			136,163
Income tax paid		(328,793	)		(211,346	)
Net cash provided by (used in) operating activities		(1,403,608	)		4,784,434
Cash flows from investing activities:
Cash in-flows from investing activities:
Disposal of available-for-sale financial assets		18,991,381			14,997,100
Redemption of held-to-maturity financial assets		6,851,014			5,958,431
Disposal of investments in joint ventures and associates		78,204			57,035
Disposal of investment properties		356			—
Disposal of premises and equipment		6,425			250
Disposal of intangible assets		998			3,784
Disposal of assets held for sale		6,832			13,876
		25,935,210			21,030,476
Cash out-flows from investing activities:
Acquisition of available-for-sale financial assets		15,777,632			16,194,628
Acquisition of held-to-maturity financial assets		9,280,802			6,224,158
Acquisition of investments in joint ventures and associates		137,411			800
Acquisition of investment properties		5,080			3,133
Acquisition of premises and equipment		133,728			82,727
Acquisition of intangible assets		168,676			115,445
		25,503,329			22,620,891
Net cash provided by (used in) investing activities		431,881			(1,590,415	)
Cash flows from financing activities:
Cash inflows from financing activities:
Increase in borrowings		9,856,662			5,698,152
Issuance of debentures		14,556,550			11,913,773
Issuance of hybrid securities		559,565			549,905
Capital increase of subsidiaries		635			—
		24,973,412			18,161,830
Cash outflows from financing activities:
Decrease in borrowings		12,308,155			8,512,585
Repayment of debentures		10,581,681			10,691,486
Redemption of hybrid securities		1,323,400			—
Payment of dividends		336,636			168,317
Dividends paid on hybrid securities		131,423			125,946
Dividends paid on non-controlling interests		1,544			1,275
		24,682,839			19,499,609
Net cash provided by (used in) financing activities		290,573			(1,337,779	)
Net increase (decrease) in cash and cash equivalents		(681,154	)		1,856,240
Cash and cash equivalents, beginning of the period		7,591,324			6,644,055
Effects of exchange rate changes on cash and cash equivalents		(97,681	)		(218,785	)
Cash and cash equivalents, end of the period		6,812,489			8,281,510

See accompanying notes

WOORI BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2017 AND FOR THE THREE MONTHS AND THE NINE MONTHS

ENDED SEPTEMBER 30, 2017 AND 2016

1. GENERAL

(1) Summary of the parent company

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

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

During the year ended December 31, 2016, the Korea Deposit Insurance Corporation (“KDIC”), the majority shareholder of the Bank, sold its 187 million shares in the Bank in accordance with the contract of “Disposal of Woori Bank’s shares to Oligopolistic Shareholders”. In addition to the sale, during the nine months ended September 30, 2017, KDIC sold additional 33 million shares. As of September 30, 2017 and December 31, 2016, KDIC held 125 million shares and 158 million shares (18.52% and 23.37% ownership interest) respectively, of the Bank’s shares issued.

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

The head office of the Bank is located in 51, Sogong-ro, Jung Gu, Seoul, Korea. The Bank has 875 branches and offices in Korea, and 23 branches and offices overseas as of September 30, 2017.

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

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

		Percentage of ownership (%)				Location	Financial statements as of (2017)
Subsidiaries	Main business	September 30, 2017		December 31, 2016
Woori Bank (China) Limited	Finance		100.0		100.0	China	September 30
AO Woori Bank	”		100.0		100.0	Russia	September 30
PT Bank Woori Saudara Indonesia 1906 Tbk(*1)	”		79.9		74.0	Indonesia	September 30
Banco Woori Bank do Brasil S.A.	”		100.0		100.0	Brazil	September 30
Korea BTL Infrastructure Fund	”		99.9		99.9	Korea	September 30
Woori Fund Service Co., Ltd.	”		100.0		100.0	Korea	September 30
Woori Finance Cambodia PLC.	”		100.0		100.0	Cambodia	September 30
Woori Finance Myanmar Co., Ltd.	”		100.0		100.0	Myanmar	September 30
Wealth Development Bank	”		51.0		51.0	Philippines	September 30
Woori Bank Vietnam Limited	”		100.0		100.0	Vietnam	September 30
Kumho Trust First Co., Ltd. (*2)	Asset securitization		0.0		0.0	Korea	September 30
Asiana Saigon Inc. (*2)	”		0.0		0.0	Korea	September 30
An-Dong Raja First Co., Ltd. (*6)	”		—		0.0	Korea	September 30
Consus Eighth Co., LLC (*2)	”		0.0		0.0	Korea	September 30
KAMCO Value Recreation First Securitization Specialty Co., Ltd. (*2)	”		15.0		15.0	Korea	September 30
Hermes STX Co., Ltd. (*2)	”		0.0		0.0	Korea	September 30
BWL First Co., LLC (*2)	”		0.0		0.0	Korea	September 30
Woori Poongsan Co., Ltd. (*2)	”		0.0		0.0	Korea	September 30
Deogi Dream Fourth Co., Ltd. (*2)	”		0.0		0.0	Korea	September 30
Jeonju Iwon Ltd. (*2)	”		0.0		0.0	Korea	September 30
Wonju I one Inc. (*2)	”		0.0		0.0	Korea	September 30
Heitz Third Co., Ltd. (*2)	”		0.0		0.0	Korea	September 30
Woorihansoop 1st Co., Ltd. (*2)	”		0.0		0.0	Korea	September 30
Electric Cable First Co., Ltd (*2)	”		0.0		0.0	Korea	September 30
Woori International First Co., Ltd. (*2)	”		0.0		0.0	Korea	September 30
Woori HJ First Co., Ltd. (*2)	”		0.0		0.0	Korea	September 30
Woori WEBST 1st Co., Ltd. (*2)	”		0.0		—	Korea	September 30
HNLD 1st Inc.(*2)	”		0.0		—	Korea	September 30
Wibihansoop 1st Co., Ltd. (*2)	”		0.0		—	Korea	September 30
Uri QS 1st Co., Ltd (*2)	”		0.0		—	Korea	September 30
Uri Display 1st Co., Ltd.(*2)	”		0.0		—	Korea	September 30
Tiger Eyes 2nd Co., Ltd.(*2)	”		0.0		—	Korea	September 30
Samsung Plus Private Equity Investment Trust 36th and 22 beneficiary certificates for the rest (*3)	Securities investment and others		—		—	Korea	September 30
Principle Guaranteed Trust (*4)	Trust		0.0		0.0	Korea	September 30
Principle and Interest Guaranteed Trust (*4)	”		0.0		0.0	Korea	September 30
Woori Bank and Woori Private Equity Asset Management Co., Ltd.:
Woori Private Equity Fund (*5)	Other financial business		—		31.9	Korea	September 30
Woori Private Equity Fund:
Woori EL Co., Ltd. (*5)	Other financial business		—		100.0	Korea	September 30
Woori Investment Bank:
Dongwoo First Securitization Specialty Co., Ltd. (*2)	Asset securitization		5.0		5.0	Korea	September 30
Seari First Securitization Specialty Co., Ltd. (*2)	”		5.0		—	Korea	September 30
Namjong 1st Securitization Specialty Co., Ltd. (*2)	”		5.0		—	Korea	September 30
Woori Card Co., Ltd.:
TUTU Finance-WCI Myanmar Co., Ltd	Finance		100.0		100.0	Myanmar	September 30
Woori Card one of 2017-1 Securitization Specialty Co., Ltd. (*2)	Asset securitization		0.5		—	Korea	September 30

(*1) The ownership ratio has been increased, attributed to unequal capital increase of the subsidiary.

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

- 2 -

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

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

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

(*6) Due to liquidation for the nine months ended as of September 30, 2017, the entity was excluded from the scope for consolidation.

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

	As of September 30, 2017
Subsidiaries	Location	Main business	Percentage of ownership (%)
Golden Bridge NHN Online Private Equity Investment (*)	Korea	Securities Investment		60.0
Mirae Asset Maps Clean Water Private Equity Investment Trust 7th (*)	Korea	Securities Investment		59.7
Kiwoom Yonsei Private Equity Investment Trust (*)	Korea	Securities Investment		88.9
Hana Walmart Real Estate Investment Trust 41-1(*)	Korea	Securities Investment		77.0

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

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

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

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

	As of and for the nine months ended September 30, 2017
	Assets		Liabilities		Operating revenue		Net income (loss) attributable to owners			Comprehensive income (loss) attributable to owners
Woori FIS Co., Ltd.		95,497		59,583		185,862		406			406
Woori Private Equity Asset Management Co., Ltd.		43,113		2,249		6,996		(3,403	)		(3,434	)
Woori Finance Research Institute Co., Ltd.		4,616		736		4,258		512			504
Woori Card Co., Ltd.		8,671,596		7,064,054		1,285,385		81,333			82,576
Woori Investment Bank Co., Ltd.		2,016,621		1,828,201		142,970		15,579			16,358
Woori Credit Information Co., Ltd.		32,270		5,028		22,802		953			870
Woori America Bank		2,056,706		1,762,696		61,031		11,293			2,124
Woori Global Markets Asia Limited		290,025		170,884		7,370		1,159			(5,286	)
Woori Bank (China) Limited		5,002,274		4,478,421		295,639		9,084			6,647
AO Woori Bank		214,735		160,288		11,886		3,488			3,062
PT Bank Woori Saudara Indonesia 1906 Tbk		2,363,036		1,854,080		145,535		27,799			4,820
Banco Woori Bank do Brasil S.A.		199,452		163,714		16,029		1,571			552
Korea BTL Infrastructure Fund		786,511		301		22,656		19,919			19,919
Woori Fund Service Co., Ltd.		12,219		1,031		6,712		1,175			1,175
Woori Finance Cambodia PLC.		43,196		23,407		4,097		1,052			885

- 3 -

	As of and for the nine months ended September 30, 2017
	Assets		Liabilities		Operating revenue		Net income (loss) attributable to owners		Comprehensive income (loss) attributable to owners
Woori Finance Myanmar Co., Ltd.		18,927		5,387		1,658		501		627
Wealth Development Bank		192,043		155,878		10,260		1,333		833
Woori Bank Vietnam Limited		695,263		539,606		22,410		4,458		(3,289	)
Money trust under the FISCM Act (*)		1,559,927		1,530,440		34,718		157		157
Structured entity for the securitization of financial assets		830,013		1,241,198		17,545		1,491		(2,434	)
Structured entity for the investments in securities		1,701,265		125,483		48,176		20,066		4,328

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

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

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

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

- Structured entity for the securitization of financial assets

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

- Structured entity for the investments in securities

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

- 4 -

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

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

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

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

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

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

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

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

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

- 5 -

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

	September 30, 2017
	Asset securitization vehicle		Structured finance		Investment Funds
Total asset of the unconsolidated structured entities		6,749,481		48,581,405		15,685,071
Assets recognized in the consolidated financial statements related to the unconsolidated structured entities		3,265,065		2,245,524		1,422,240
Loans and receivables		43,005		1,936,632		—
Financial assets at fair value through profit or loss		—		194,828		13,040
Available-for-sale financial assets		926,261		109,070		1,192,410
Held-to-maturity financial assets		2,295,236		—		—
Investments in joint ventures and associates		—		—		216,790
Derivative assets		563		4,994		—
Liabilities recognized in the consolidated financial statements related to the unconsolidated structured entities		1,825		1,417		—
Derivative liabilities		340		565		—
Other liabilities (including provisions)		1,485		852		—
The maximum exposure to risks		4,032,834		3,097,300		1,422,240
Investments		3,265,065		2,245,524		1,422,240
Credit facilities		767,769		851,776		—
Loss recognized on unconsolidated structured entities		512		5,919		5,083
	December 31, 2016
	Asset securitization vehicle		Structured finance		Investment Funds
Total asset of the unconsolidated structured entities		8,426,713		61,324,862		9,131,362
Assets recognized in the consolidated financial statements related to the unconsolidated structured entities		3,361,910		2,790,215		1,749,494
Loans and receivables		65,470		2,414,044		—
Financial assets at fair value through profit or loss		—		254,150		—
Available-for-sale financial assets		1,216,446		115,843		1,664,865
Held-to-maturity financial assets		2,079,648		—		—
Investments in joint ventures and associates		—		—		84,629
Derivative assets		346		6,178		—
Liabilities recognized in the consolidated financial statements related to the unconsolidated structured entities		1,363		1,224		—
Derivative liabilities		201		362		—
Other liabilities (including provisions)		1,162		862		—
The maximum exposure to risks		4,263,993		3,802,210		1,749,494
Investments		3,361,910		2,790,215		1,749,494
Purchase agreements		28,000		—		—
Credit facilities		834,083		970,195		—
Other commitments		40,000		41,800		—
Loss recognized on unconsolidated structured entities		6,353		71,185		683

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

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

	September 30, 2017		December 31, 2016
Woori Investment Bank		80,833		73,986
PT Bank Woori Saudara Indonesia 1906 Tbk		69,608		70,249
Wealth Development Bank		17,721		16,983

2) Net income attributable to non-controlling interests

	For the nine months ended September 30, 2017		For the nine months ended September 30, 2016
Woori Investment Bank		6,520		6,680
PT Bank Woori Saudara Indonesia 1906 Tbk		6,731		4,551
Wealth Development Bank		653		—

- 6 -

3) Dividends to non-controlling interests

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

2. SIGNIFICANT BASIS OF PREPARATION AND ACCOUNTING POLICIES

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

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

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

Amendments to K-IFRS 1007 – Statement of Cash Flows

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

Amendments to K-IFRS 1012 – Income Taxes

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

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

Enactments to K-IFRS 1109 – Financial Instruments

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

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

- 7 -

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

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

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

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

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

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

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

Under K-IFRS 1109, as it is more strictly required to classify to the financial assets measured at amortized cost or fair value through OCI compared to under current K-IFRS 1039, when adopting the K-IFRS 1109, the volatility of net income can be expanded by the increasing portion of the financial asset measured at FVTPL. In accordance with K-IFRS 1109, the debt instruments only which occur the cash flow that is compose of solely the principal and the interest on the remaining principal at specified dates by the contract, whose purpose is to receive the cash flow under the contract can be measured at amortized cost. In accordance with K-IFRS 1039, the Group shall measure loans and receivables amounting to 265,148,624 million Won and held-to-maturity financial assets amounting to 15,144,766 million Won as of June 30, 2017 as amortized cost, and among theses, 24,585 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 June 30, 2017, as they almost occur the cash flow that is compose of solely the principal and the interest on the remaining principal at specified dates by the contract, whose purpose is to receive the cash flow under the contract, so they can be measure at amortized cost and there is no material effect to the financial statement. However, for debt securities as the host contract of hybrid contract amounting to 24,585 million Won, as the cash flow under the contract is not composed of solely the principal and the interest on the remaining principal, it will be classified to the financial asset measured at FVTPL.

In accordance with K-IFRS 1109, the debt instruments only which occur the cash flow that is composed of solely the principal and the interest on the remaining principal at specified dates by the contract, whose purpose is to receive the cash flow under the contract and sell itself can be measure at FVOCI. In accordance with K-IFRS 1039, the Group hold debt instruments as available-for-sale assets amounting to 15,123,734 million Won as of June 30, 2017.

- 8 -

Based on the result of the preliminary effect evaluation, if K-IFRS 1109 adopt to the above AFS financial assets as of June 30, 2017, they almost can be classified to financial asset measured at FVOCI. However, for beneficiary certificates amounting to 3,045,406 million Won, other equity investment amounting to 297,115 million Won and debt securities amounting to 109,873 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 Group holds equity investments that are classified as available-for-sale financial assets amounting to 1,156,914 million Won as of June 30, 2017.

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

One major change from K-IFRS 1039 relates to the presentation of changes in the fair value of a financial liability designated as at FVTPL attributable to changes in the credit risk of that liability. Under K-IFRS 1109, such changes are presented in other comprehensive income, unless the presentation of the effect of the change in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. In accordance with K-IFRS 1039, the Group holds financial liabilities designated as at FVTPL 616,177 million Won as of June 30, 2017.

Based on the result of the preliminary effect evaluation, the variance amount due to the effect of accumulated credit risk variance among the total variance of financial liabilities designated as at FVPTL is 15,893 million Won.

Phase 2: Impairment methodology

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

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

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

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

- 9 -

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 will increase by 265,178 million Won and the total amount of the allowance for credit losses is expected to be 2,263,725 million Won as of June 30, 2017. The details of credit losses are as follows (Unit: Korean Won in millions):

		June 30, 2017		Allowance for credit losses (K-IFRS 1109)
Loans and receivables	Stage 1		272,557,218		629,798
	Stage 2		11,600,372		471,929
	Stage 3		1,992,502		856,697
Provisions	Stage 1		92,292,965		116,161
	Stage 2		1,252,584		45,478
	Stage 3		292,308		143,662

The BIS is expected to be 15.33% which increased by 0.04% as of June 30, 2017. 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

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

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

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

Annual Improvements to K-IFRS 2014-2016 Cycle

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

- 10 -

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

3. SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS

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

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

4. RISK MANAGEMENT

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

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

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

(1) Credit risk

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

1) Credit risk management

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

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

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

- 11 -

2) Maximum exposure to credit risk

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

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

	September 30, 2017		December 31, 2016
Loans and receivables:
Korean treasury and government agencies		12,916,316		16,058,305
Banks		24,462,247		20,242,260
Corporates		91,776,567		88,985,566
Consumers		137,816,942		133,106,502
Sub-total		266,972,072		258,392,633
Financial assets at fair value through profit or loss (“FVTPL”):
Gold banking assets		26,305		26,180
Debt securities held for trading		2,671,171		2,644,916
Financial assets designated at FVTPL		6,475		4,348
Derivative assets for trading		1,849,389		2,898,295
Sub-total		4,553,340		5,573,739
Available-for-sale (“AFS”) debt securities		14,565,512		16,541,888
Held-to-maturity (“HTM”) securities		16,325,482		13,910,251
Derivative assets for hedging		109,828		140,577
Off-balance accounts :
Guarantees		13,290,358		14,761,784
Loan commitments		82,058,484		83,795,496
Sub-total		95,348,842		98,557,280
Total		397,875,076		393,116,368

- 12 -

a) Credit risk exposure by geographical areas

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

	September 30, 2017
	Korea		China		USA		UK		Japan		Others (*)		Total
Loans and receivables		250,347,708		4,132,193		2,834,235		1,101,804		451,636		8,104,496		266,972,072
Financial assets at FVTPL		4,385,884		3,512		—		121,675		94		42,175		4,553,340
AFS debt securities		13,905,961		34,434		138,372		—		—		486,745		14,565,512
HTM securities		16,182,448		—		58,969		—		—		84,065		16,325,482
Derivative assets		29,579		—		—		80,249		—		—		109,828
Off-balance accounts		93,284,545		721,869		167,844		72,917		37,412		1,064,255		95,348,842
Total		378,136,125		4,892,008		3,199,420		1,376,645		489,142		9,781,736		397,875,076
	December 31, 2016
	Korea		China		USA		UK		Japan		Others (*)		Total
Loans and receivables		241,380,250		4,286,018		2,792,088		895,874		323,470		8,714,933		258,392,633
Financial assets at FVTPL		5,205,849		6,525		—		261,547		81		99,737		5,573,739
AFS debt securities		16,155,290		13,845		137,861		—		—		234,892		16,541,888
HTM securities		13,758,863		—		20,336		—		—		131,052		13,910,251
Derivative assets		74,166		—		—		66,342		—		69		140,577
Off-balance accounts		96,245,092		737,513		103,130		80,831		23,250		1,367,464		98,557,280
Total		372,819,510		5,043,901		3,053,415		1,304,594		346,801		10,548,147		393,116,368

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

b) Credit risk exposure by industries

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

	September 30, 2017
	Service		Manufacturing		Finance and insurance		Construction		Individuals		Others		Total
Loans and receivables		47,622,232		35,089,822		39,492,241		3,839,561		129,932,760		10,995,456		266,972,072
Financial assets at FVTPL		71,716		117,678		3,449,013		6,190		2,939		905,804		4,553,340
AFS debt securities		764,326		30,160		7,513,948		133,875		—		6,123,203		14,565,512
HTM securities		1,358,687		—		10,302,610		285,628		—		4,378,557		16,325,482
Derivative assets		—		—		109,828		—		—		—		109,828
Off-balance accounts		16,648,268		23,389,789		9,633,042		3,844,872		36,625,544		5,207,327		95,348,842
Total		66,465,229		58,627,449		70,500,682		8,110,126		166,561,243		27,610,347		397,875,076
	December 31, 2016
	Service		Manufacturing		Finance and insurance		Construction		Individuals		Others		Total
Loans and receivables		46,040,278		35,652,974		37,711,983		3,789,670		125,558,637		9,639,091		258,392,633
Financial assets at FVTPL		77,198		360,881		4,093,567		24,140		993		1,016,960		5,573,739
AFS debt securities		1,092,279		57,781		9,568,151		63,166		—		5,760,511		16,541,888
HTM securities		1,673,971		—		8,290,451		251,599		—		3,694,230		13,910,251
Derivative assets		—		—		140,577		—		—		—		140,577
Off-balance accounts		18,423,611		26,878,320		9,927,574		4,621,971		33,603,651		5,102,153		98,557,280
Total		67,307,337		62,949,956		69,732,303		8,750,546		159,163,281		25,212,945		393,116,368

- 13 -

3) Credit risk of loans and receivables

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

	September 30, 2017
					Corporates
	Korean treasury and government agencies		Banks		General business		Small & medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Loans and receivables neither overdue nor impaired		12,918,080		24,478,009		52,053,577		33,452,677		5,927,618		91,433,872		136,886,881		265,716,842
Loans and receivables overdue but not impaired		1,527		—		54,041		82,420		1,060		137,521		812,036		951,084
Impaired loans and receivables		—		—		1,179,710		301,753		69,234		1,550,697		551,665		2,102,362
Total		12,919,607		24,478,009		53,287,328		33,836,850		5,997,912		93,122,090		138,250,582		268,770,288
Allowance for credit losses		3,291		15,762		968,209		339,559		37,755		1,345,523		433,640		1,798,216
Total, net		12,916,316		24,462,247		52,319,119		33,497,291		5,960,157		91,776,567		137,816,942		266,972,072
	December 31, 2016
					Corporates
	Korean treasury and government agencies		Banks		General business		Small & medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Loans and receivables neither overdue nor impaired		16,062,399		20,258,860		49,815,352		31,520,617		7,142,440		88,478,409		132,195,005		256,994,673
Loans and receivables overdue but not impaired		—		—		48,294		57,245		—		105,539		765,829		871,368
Impaired loans and receivables		—		—		1,404,568		429,955		208,372		2,042,895		510,793		2,553,688
Total		16,062,399		20,258,860		51,268,214		32,007,817		7,350,812		90,626,843		133,471,627		260,419,729
Allowance for credit losses		4,094		16,600		1,156,000		424,142		61,135		1,641,277		365,125		2,027,096
Total, net		16,058,305		20,242,260		50,112,214		31,583,675		7,289,677		88,985,566		133,106,502		258,392,633

- 14 -

a) Credit quality of loans and receivables

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

	September 30, 2017
	Korean treasury and government agencies				Corporates
			Banks		General business		Small & medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Upper grade (*1)		12,914,611		24,462,247		44,231,984		22,006,654		4,941,394		71,180,032		133,294,693		241,851,583
Lower grade (*2)		178		—		7,410,746		11,260,517		957,541		19,628,804		3,437,984		23,066,966
Total		12,914,789		24,462,247		51,642,730		33,267,171		5,898,935		90,808,836		136,732,677		264,918,549
Value of collateral(*3)		—		477,517		19,719,917		26,898,239		3,011,270		49,629,426		113,930,125		164,037,068

	December 31, 2016
	Korean treasury and government agencies				Corporates
			Banks		General business		Small & medium sized enterprise		Project financing and others		Sub-total		Consumers		Total
Upper grade (*1)		16,058,288		20,242,260		41,461,420		18,755,963		5,337,033		65,554,416		128,374,017		230,228,981
Lower grade (*2)		17		—		7,941,871		12,550,282		1,763,658		22,255,811		3,680,920		25,936,748
Total		16,058,305		20,242,260		49,403,291		31,306,245		7,100,691		87,810,227		132,054,937		256,165,729
Value of collateral(*3)		—		358,456		18,003,674		25,493,006		3,996,162		47,492,842		111,054,910		158,906,208

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

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

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

Allowances for credit losses, for loans and receivables neither overdue nor impaired, amounting to 798,293 million Won and 828,944 million Won as of September 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):

	September 30, 2017
Past due	Korean treasury and government agencies		Banks		Corporates								Consumers		Total
					General business		Small & medium sized enterprise		Project financing and others		Sub-total
Less than 30 days		1,527		—		45,958		46,545		—		92,503		619,857		713,887
30~59 days		—		—		4,070		15,145		—		19,215		91,944		111,159
60~89 days		—		—		1,569		11,879		1,049		14,497		55,699		70,196
Total		1,527		—		51,597		73,569		1,049		126,215		767,500		895,242
Value of collateral (*)		—		—		12,006		59,447		1,060		72,513		585,907		658,420

	December 31, 2016
Past due	Korean treasury and government agencies		Banks		Corporates								Consumers		Total
					General business		Small & medium sized enterprise		Project financing and others		Sub-total
Less than 30 days		—		—		45,255		41,329		—		86,584		584,995		671,579
30~59 days		—		—		1,553		8,933		—		10,486		90,296		100,782
60~89 days		—		—		337		2,123		—		2,460		49,151		51,611
Total		—		—		47,145		52,385		—		99,530		724,442		823,972
Value of collateral (*)		—		—		7,021		45,304		—		52,325		546,164		598,489

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

- 15 -

Allowances for credit losses, for loans and receivables that are overdue but not impaired, amounting to 55,842 million Won and 47,396 million Won as of September 30, 2017 and December 31, 2016, respectively, which are deducted from the loans and receivables above.

c) Impaired loans and receivables

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

	September 30, 2017
	Korean treasury and government agencies		Banks		Corporates								Consumers		Total
					General business		Small & medium sized enterprise		Project financing and others		Sub-total
Impaired loans		—		—		624,792		156,551		60,173		841,516		316,765		1,158,281
Value of collateral (*)		—		—		513,049		164,011		38,686		715,746		228,648		944,394

	December 31, 2016
	Korean treasury and government agencies		Banks		Corporates								Consumers		Total
					General business		Small & medium sized enterprise		Project financing and others		Sub-total
Impaired loans		—		—		661,778		225,045		188,986		1,075,809		327,123		1,402,932
Value of collateral (*)		—		—		482,680		236,954		42,166		761,800		250,583		1,012,383

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

Allowances for credit losses, for impaired loans and receivables amounting to 944,081 million Won and 1,150,756 million Won as of September 30, 2017 and December 31, 2016, respectively, are deducted from the impaired loans and receivables above.

4) Credit quality of debt securities

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

	September 30, 2017
	Financial assets at FVTPL (*)		AFS debt securities		HTM securities		Total
AAA		1,652,163		10,911,826		15,539,139		28,103,128
AA- ~ AA+		796,765		2,742,965		727,801		4,267,531
BBB- ~ A+		222,243		854,669		58,542		1,135,454
Below BBB-		6,475		56,052		—		62,527
Total		2,677,646		14,565,512		16,325,482		33,568,640

	December 31, 2016
	Financial assets at FVTPL (*)		AFS debt securities		HTM securities		Total
AAA		1,658,332		12,490,934		13,342,384		27,491,650
AA- ~ AA+		720,535		3,372,310		466,401		4,559,246
BBB- ~ A+		266,049		618,736		101,466		986,251
Below BBB-		4,348		59,908		—		64,256
Total		2,649,264		16,541,888		13,910,251		33,101,403

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

- 16 -

(2) Market risk

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

1) Market risk management

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

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

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

2) Sensitivity analysis of market risk

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

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

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

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

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

- 17 -

a) Trading activities

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

	As of September 30, 2017			For the nine months ended September 30, 2017									As of December 31, 2016			For the year ended December 31, 2016
Risk factor				Average			Maximum			Minimum						Average			Maximum			Minimum
Interest rate		3,647			3,806			4,918			2,467			3,250			2,844			6,430			1,367
Stock price		2,656			2,756			4,419			1,192			4,191			3,456			5,063			2,304
Foreign currencies		6,636			4,927			6,636			4,061			4,396			4,914			7,686			3,967
Commodity price		8			39			188			4			152			113			325			21
Diversification		(5,135	)		(4,370	)		(6,798	)		(2,097	)		(5,630	)		(5,355	)		(10,385	)		(4,034	)
Total VaR		7,812			7,158			9,363			5,627			6,359			5,972			9,119			3,625

b) Non-trading activities

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

	September 30, 2017				December 31, 2016
	NII		NPV		NII		NPV
Base case		4,540,073		21,619,693		4,367,411		21,556,632
Base case (Prepay)		4,543,372		21,268,573		4,384,783		20,666,425
IR 100bp up		4,952,710		20,973,125		4,802,118		20,893,490
IR 100bp down		4,065,923		22,328,393		3,903,129		22,279,204
IR 200bp up		5,365,426		20,395,129		5,236,879		20,289,742
IR 200bp down		3,150,905		23,075,223		2,975,351		23,052,848
IR 300bp up		5,778,141		19,885,134		5,671,639		19,742,627
IR 300bp down		2,066,550		25,193,281		1,968,273		25,096,193

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

September 30, 2017			December 31, 2016
EaR	VaR		EaR		VaR
226,693		114,435		188,381		110,335

- 18 -

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

	September 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		151,455,145		40,177,541		9,828,204		7,848,737		58,688,683		39,622,693		307,621,003
AFS financial assets		3,818,471		1,908,621		3,012,472		2,726,214		4,917,436		681,275		17,064,489
HTM financial assets		1,989,977		1,563,189		1,856,937		1,428,804		9,703,133		351,506		16,893,546
Total		157,263,593		43,649,351		14,697,613		12,003,755		73,309,252		40,655,474		341,579,038
Liability:
Deposits due to customers		103,884,829		36,800,844		30,958,253		16,558,616		37,590,999		763,536		226,557,077
Borrowings		11,353,673		1,092,260		384,534		511,073		2,686,563		459,135		16,487,238
Debentures		1,968,756		1,902,867		2,439,281		1,007,136		18,969,347		3,126,977		29,414,364
Total		117,207,258		39,795,971		33,782,068		18,076,825		59,246,909		4,349,648		272,458,679

	December 31, 2016
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Asset:
Loans and receivables		148,237,350		42,032,667		8,064,502		7,757,087		55,838,192		35,245,734		297,175,532
AFS financial assets		3,165,094		2,946,992		2,854,514		2,915,226		5,029,918		713,596		17,625,340
HTM financial assets		2,770,079		1,515,213		1,246,503		1,143,170		6,853,951		892,030		14,420,946
Total		154,172,523		46,494,872		12,165,519		11,815,483		67,722,061		36,851,360		329,221,818
Liability:
Deposits due to customers		100,051,821		36,614,529		25,028,378		25,017,836		34,513,004		40,737		221,266,305
Borrowings		13,772,710		1,044,748		491,330		368,431		2,816,565		421,677		18,915,461
Debentures		2,109,235		2,077,681		860,455		1,545,943		14,613,799		4,143,773		25,350,886
Total		115,933,766		39,736,958		26,380,163		26,932,210		51,943,368		4,606,187		265,532,652

- 19 -

3) Currency risk

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

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

	September 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		23,358		26,781,114		117,702		1,201,047		25,478		4,391,083		1,397		1,887,641		4,253,671		38,514,556
Financial assets at FVTPL		41		46,622		31		316		—		—		40		53,467		100,593		200,998
AFS financial assets		1,583		1,815,207		—		—		200		34,434		—		623		242,146		2,092,410
HTM financial assets		103		118,255		—		—		—		—		—		—		83,320		201,575
Total		25,085		28,761,198		117,733		1,201,363		25,678		4,425,517		1,437		1,941,731		4,679,730		41,009,539
	September 30, 2017
	USD				JPY				CNY				EUR				Others		Total
	Foreign currency		Won equivalent		Foreign currency		Won equivalent		Foreign currency		Won equivalent		Foreign currency		Won equivalent		Won equivalent		Won equivalent
Liability:
Financial liabilities at FVTPL		53		60,773		89		907		—		—		103		138,974		166,648		367,302
Deposits due to customers		11,213		12,856,184		145,180		1,481,447		22,067		3,803,237		492		665,256		2,025,110		20,831,234
Borrowings		7,069		8,109,736		2,485		25,359		—		—		376		507,789		277,349		8,920,233
Debentures		3,329		3,816,883		—		—		700		120,645		—		—		231,480		4,169,008
Other financial liabilities		4,258		4,882,050		26,481		270,220		3,103		534,804		215		290,838		599,069		6,576,981
Total		25,922		29,725,626		174,235		1,777,933		25,870		4,458,686		1,186		1,602,857		3,299,656		40,864,758
Off-balance accounts		7,482		8,578,993		34,046		347,405		1,163		200,379		359		484,746		896,220		10,507,743
	December 31, 2016
	USD				JPY				CNY				EUR				Others		Total
	Foreign currency		Won equivalent		Foreign currency		Won equivalent		Foreign currency		Won equivalent		Foreign currency		Won equivalent		Won equivalent		Won equivalent
Asset:
Loans and receivables		22,868		27,635,970		108,944		1,129,539		23,194		4,018,678		1,548		1,962,856		4,382,990		39,130,033
Financial assets at FVTPL		66		79,386		57		589		—		—		30		37,562		34,124		151,661
AFS financial assets		898		1,085,108		—		—		80		13,844		—		570		144,799		1,244,321
HTM financial assets		17		20,517		—		—		—		—		—		—		143,535		164,052
Total		23,849		28,820,981		109,001		1,130,128		23,274		4,032,522		1,578		2,000,988		4,705,448		40,690,067

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

- 20 -

(3) Liquidity risk

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

1) Liquidity risk management

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

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

2) Maturity analysis of non-derivative financial liabilities

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

	September 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		359,136		1,136		164,838		154		—		—		525,264
Deposits due to customers		143,496,208		30,459,337		24,686,041		20,212,631		7,580,824		3,391,357		229,826,398
Borrowings		7,032,096		2,551,909		1,143,290		1,546,901		3,866,643		459,109		16,599,948
Debentures		1,968,651		1,902,178		2,439,799		988,275		18,969,720		3,126,985		29,395,608
Other financial liabilities		16,221,274		162,980		1,809		750		153,855		2,818,101		19,358,769
Total		169,077,365		35,077,540		28,435,777		22,748,711		30,571,042		9,795,552		295,705,987

	December 31, 2016
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Financial liabilities at FVTPL		678,813		1,529		94		47		154,325		—		834,808
Deposits due to customers		136,835,315		28,685,473		19,254,108		30,875,962		6,284,092		2,732,019		224,666,969
Borrowings		9,146,895		2,355,336		876,836		1,486,710		4,711,273		420,720		18,997,770
Debentures		2,108,780		2,077,387		860,596		1,518,524		14,641,016		4,116,768		25,323,071
Other financial liabilities		14,813,948		27,544		5,480		1,433		84,792		2,751,825		17,685,022
Total		163,583,751		33,147,269		20,997,114		33,882,676		25,875,498		10,021,332		287,507,640

- 21 -

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

	September 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		359,136		1,136		164,838		154		—		—		525,264
Deposits due to customers		155,450,482		31,646,245		20,092,451		12,807,269		6,460,318		2,985,526		229,442,291
Borrowings		7,032,096		2,551,909		1,143,290		1,546,901		3,866,643		459,109		16,599,948
Debentures		1,968,651		1,902,178		2,439,799		988,275		18,969,720		3,126,985		29,395,608
Other financial liabilities		16,221,274		162,980		1,809		750		153,855		2,818,101		19,358,769
Total		181,031,639		36,264,448		23,842,187		15,343,349		29,450,536		9,389,721		295,321,880

	December 31, 2016
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Financial liabilities at FVTPL		678,813		1,529		94		47		154,325		—		834,808
Deposits due to customers		148,089,355		30,163,971		17,600,803		20,947,335		5,128,387		2,331,993		224,261,844
Borrowings		9,146,901		2,355,332		876,835		1,486,710		4,711,273		420,719		18,997,770
Debentures		2,108,780		2,077,387		860,596		1,518,524		14,641,016		4,116,768		25,323,071
Other financial liabilities		14,813,948		27,544		5,480		1,433		84,792		2,751,825		17,685,022
Total		174,837,797		34,625,763		19,343,808		23,954,049		24,719,793		9,621,305		287,102,515

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

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

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

	Remaining maturity
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
September 30, 2017		2,008,539		—		—		—		28,608		—		2,037,147
December 31, 2016		3,009,977		—		—		208		7,013		—		3,017,198

4) Maturity analysis of off-balance accounts

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

	September 30, 2017		December 31, 2016
Guarantees		13,290,358		14,761,784
Loan commitments		82,058,484		83,795,496

- 22 -

(4) Operational risk

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

1) Operational risk management

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

2) Operational risk measurement

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

(5) Capital management

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

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

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

	September 30, 2017			December 31, 2016
Tier 1 capital		16,447,709			15,714,480
Other Tier 1 capital		3,034,556			3,275,496
Tier 2 capital		3,458,324			3,910,513
Total risk-adjusted capital		22,940,589			22,900,489
Risk-weighted assets for credit risk		138,781,075			138,018,500
Risk-weighted assets for market risk		2,497,170			2,277,809
Risk-weighted assets for operational risk		9,676,775			9,431,814
Total risk-weighted assets		150,955,020			149,728,123
Common Equity Tier 1 ratio		10.90	%		10.50	%
Tier 1 capital ratio		12.91	%		12.68	%
Total capital ratio		15.20	%		15.29	%

- 23 -

5. OPERATING SEGMENTS

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

(1) Segment by type of customers

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

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

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

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

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

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

• 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):

	September 30, 2017
	Consumer banking		Corporate banking		Investment banking		Capital market		Credit card		Headquarters and others		Sub-total		Adjustment			Total
Assets		107,890,261		105,315,489		6,194,121		11,341,530		8,671,596		84,505,699		323,918,696		(6,043,534	)		317,875,162
Liabilities		74,336,238		154,285,396		55,651		10,186,345		7,064,054		51,144,639		297,072,323		185,871			297,258,194

	December 31, 2016
	Consumer banking		Corporate banking		Investment banking		Capital market		Credit card		Headquarters and others		Sub-total		Adjustment			Total
Assets		105,931,025		104,937,198		6,337,634		8,111,230		7,606,108		82,840,235		315,763,430		(5,080,703	)		310,682,727
Liabilities		62,294,922		162,937,921		55,785		7,287,850		6,180,893		51,137,220		289,894,591		242,183			290,136,774

- 24 -

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

	For the nine months ended September 30, 2017
	Consumer banking			Corporate banking			Investment banking			Capital market			Credit Cards			Headquarters and others			Sub-total			Adjustments			Total
Net Interest income		1,235,409			1,316,262			7,687			25,730			342,750			534,862			3,462,700			439,176			3,901,876
Interest income		2,332,134			2,196,051			108,570			14,328			442,903			1,053,361			6,147,347			230,066			6,377,413
Interest expense		(717,708	)		(1,238,742	)		(186	)		—			(100,153	)		(627,858	)		(2,684,647	)		209,110			(2,475,537	)
Inter-segment		(379,017	)		358,953			(100,697	)		11,402			—			109,359			—			—			—
Net non-interest income		489,100			444,412			119,512			29,638			54,673			335,607			1,472,942			(568,216	)		904,726
Non-interest income		598,446			503,820			272,024			6,155,339			836,721			1,801,968			10,168,318			(195,768	)		9,972,550
Non-interest expense		(182,815	)		(104,265	)		(152,512	)		(6,125,701	)		(782,048	)		(1,348,035	)		(8,695,376	)		(372,448	)		(9,067,824	)
Inter-segment		73,469			44,857			—			—			—			(118,326	)		—			—			—
Other income(expense)		(1,407,860	)		(859,872	)		6,571			9,047			(286,093	)		(606,366	)		(3,144,573	)		139,887			(3,004,686	)
Administrative expense		(1,337,680	)		(618,969	)		(8,434	)		(11,309	)		(118,846	)		(741,176	)		(2,836,414	)		189,362			(2,647,052	)
Impairment losses due to credit loss and others		(70,180	)		(240,903	)		15,005			20,356			(162,247	)		134,810			(308,159	)		(49,475	)		(357,634	)
Operating income		316,649			900,802			133,770			64,415			111,330			264,103			1,791,069			10,847			1,801,916
Non-operating income(loss)		3,304			(3,097	)		32,832			—			(4,097	)		(25,334	)		3,608			(3,938	)		(330	)
Net income before income tax expense		319,953			897,705			166,602			64,415			107,233			238,769			1,794,677			6,909			1,801,586
Income tax expense		(77,429	)		(204,541	)		(40,318	)		(15,588	)		(25,900	)		(8,148	)		(371,924	)		(37,221	)		(409,145	)
Net income		242,524			693,164			126,284			48,827			81,333			230,621			1,422,753			(30,312	)		1,392,441
	For the nine months ended September 30, 2016
	Consumer banking			Corporate banking			Investment banking			Capital market			Credit Cards			Headquarters and others			Sub-total			Adjustments			Total
Net Interest income		1,088,799			1,298,660			9,738			39,087			315,967			553,785			3,306,036			439,164			3,745,200
Interest income		2,228,511			2,293,660			114,282			14,666			411,611			1,125,147			6,187,877			214,610			6,402,487
Interest expense		(772,242	)		(1,349,208	)		(156	)		(227	)		(95,644	)		(664,364	)		(2,881,841	)		224,554			(2,657,287	)
Inter-segment		(367,470	)		354,208			(104,388	)		24,648			—			93,002			—			—			—
Net non-interest income		420,841			414,071			118,636			11,701			62,198			232,636			1,260,083			(711,736	)		548,347
Non-interest income		682,013			399,706			421,359			6,935,357			723,278			3,150,096			12,311,809			(298,094	)		12,013,715
Non-interest expense		(286,919	)		(20,284	)		(302,723	)		(6,923,656	)		(661,080	)		(2,857,064	)		(11,051,726	)		(413,642	)		(11,465,368	)
Inter-segment		25,747			34,649			—			—			—			(60,396	)		—			—			—
Other income(expense)		(1,365,472	)		(1,157,200	)		(88,720	)		(2,237	)		(254,812	)		(237,252	)		(3,105,693	)		201,367			(2,904,326	)
Administrative expense		(1,310,730	)		(700,793	)		(9,490	)		(12,104	)		(104,516	)		(463,717	)		(2,601,350	)		189,568			(2,411,782	)
Impairment losses due to credit loss and others		(54,742	)		(456,407	)		(79,230	)		9,867			(150,296	)		226,465			(504,343	)		11,799			(492,544	)
Operating income		144,168			555,531			39,654			48,551			123,353			549,169			1,460,426			(71,205	)		1,389,221
Non-operating income(loss)		(30,998	)		(2,754	)		32,618			—			(2,794	)		41,228			37,300			(67,125	)		(29,825	)
Net income before income tax expense		113,170			552,777			72,272			48,551			120,559			590,397			1,497,726			(138,330	)		1,359,396
Income tax expense		(27,387	)		(132,580	)		(17,490	)		(11,749	)		(28,168	)		(30,482	)		(247,856	)		5,639			(242,217	)
Net income		85,783			420,197			54,782			36,802			92,391			559,915			1,249,870			(132,691	)		1,117,179

(2) Information on products and services

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

- 25 -

(3) Information on geographical areas

Among the Group’s revenue (interest income and non-interest income) from services, revenue from the domestic customers for the nine months ended September 30, 2017 and 2016 amounted to 15,525,861 million Won and 17,600,787 million Won, respectively, and revenue from the foreign customers amounted to 824,102 million Won and 815,415 million Won, respectively. Among the Group’s non-current assets (investments in joint ventures and associates, investment properties, premises and equipment and intangible assets), non-current assets attributed to domestic subsidiaries as of September 30, 2017 and December 31, 2016 are 3,688,314 million Won and 3,498,327 million Won, respectively, and foreign subsidiaries are 246,540 million Won and 240,946 million Won, respectively.

6. CASH AND CASH EQUIVALENTS

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

	September 30, 2017		December 31, 2016
Cash		2,245,815		2,113,739
Foreign currencies		716,944		742,340
Demand deposits		3,102,713		4,238,956
Fixed deposits		747,017		496,289
Total		6,812,489		7,591,324

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

	For the nine months ended September 30, 2017			For the nine months ended September 30, 2016
Changes in other comprehensive income (loss) due to valuation of AFS financial assets		(51,041	)		52,278
Changes in other comprehensive income (loss) of investment in associates		4,917			(2,965	)
Changes in other comprehensive income (loss) of foreign currencies translation of foreign operations		(54,522	)		(75,041	)
Changes in other comprehensive income (loss) related to valuation of cash flow hedging		(1,247	)		10,371
Changes in other comprehensive loss due to remeasurement of the net defined benefit liability		13,143			(52,788	)
Changes in investments in associates due to equity swap and others		51,227			—
Changes in investments in associates due to accounts transfer		—			(156,727	)
Changes in unpaid dividends on hybrid equity securities		(1,502	)		23,560

- 26 -

7. FINANCIAL ASSETS AT FVTPL

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

	September 30, 2017		December 31, 2016
Financial assets held for trading		4,590,507		5,633,724
Financial assets designated at FVTPL		18,980		17,000
Total		4,609,487		5,650,724

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

	September 30, 2017		December 31, 2016
Deposits:
Gold banking asset		26,305		26,180
Securities:
Debt securities
Korean treasury and government agencies		533,202		519,337
Financial institutions		1,569,337		1,444,459
Corporates		568,632		681,120
Equity securities		27,395		35,983
Beneficiary certificates		16,247		23,891
Securities loaned		—		4,459
Sub-total		2,714,813		2,709,249
Derivatives assets		1,849,389		2,898,295
Total		4,590,507		5,633,724

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

	September 30, 2017		December 31, 2016
Debt securities		6,475		4,348
Equity securities		12,505		12,652
Total		18,980		17,000

- 27 -

8. AVAILABLE FOR SALE FINANCIAL ASSETS

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

	September 30, 2017		December 31, 2016
Debt securities:
Korean treasury and government agencies		3,076,447		3,788,630
Financial institutions		5,632,300		6,314,198
Corporates		3,270,981		4,409,186
Asset-backed securities		310,739		249,203
Bonds in foreign currencies		2,068,932		1,211,864
Others		35,214		75,228
Sub-total		14,394,613		16,048,309
Equity securities		1,455,535		1,453,613
Beneficiary certificates		2,603,541		2,822,082
Securities loaned		170,899		493,579
Total		18,624,588		20,817,583

9. HELD TO MATURITY FINANCIAL ASSETS

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

	September 30, 2017		December 31, 2016
Korean treasury and government agencies		4,224,173		3,754,356
Financial institutions		6,658,634		5,168,487
Corporates		5,241,100		4,823,356
Bonds in foreign currencies		201,575		164,052
Total		16,325,482		13,910,251

10. LOANS AND RECEIVABLES

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

	September 30, 2017		December 31, 2016
Due from banks		14,697,586		14,815,476
Loans		239,671,726		235,400,585
Other loans and receivables		12,602,760		8,176,572
Total		266,972,072		258,392,633

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

	September 30, 2017			December 31, 2016
Due from banks in local currency:
Due from The Bank of Korea (“BOK”)		11,212,033			11,395,162
Due from depository banks		20,003			3
Due from non-depository institutions		14,969			9,811
Due from the Korea Exchange		2,089			1,625
Others		77,044			73,283
Allowance for credit losses		(2,755	)		(2,798	)
Sub-total		11,323,383			11,477,086
Due from banks in foreign currencies:
Due from banks on demand		856,912			877,636
Due from banks on time		1,601,379			1,684,631
Others		918,208			778,418
Allowance for credit losses		(2,296	)		(2,295	)
Sub-total		3,374,203			3,338,390
Total		14,697,586			14,815,476

- 28 -

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

Financial institution	Counterparty	September 30, 2017		Reason of restriction
Due from banks in local currency:
Due from The BOK	The BOK		11,212,033	Reserve deposits under The BOK Act
Others	The Korea Exchange and others		74,089	Central counter party KRW margin and others
	Sub-total		11,286,122
Due from banks in foreign currencies:
Due from banks on demand	The BOK and others		842,415	Reserve deposits under The BOK Act and others
Others	The People’s Bank of China and others		884,954	Reserve deposits and others
	Sub-total		1,727,369
			13,013,491
Financial institution	Counterparty	December 31, 2016		Reason of restriction
Due from banks in local currency:
Due from The BOK	The BOK		11,395,162	Reserve deposits under The BOK Act
Others	The Korea Exchange and others		70,304	Central counter party KRW margin and others
	Sub-total		11,465,466
Due from banks in foreign currencies:
Due from banks on demand	The BOK and others		854,612	Reserve deposits under The BOK Act and others
Others	The People’s Bank of China and others		778,418	Reserve deposits and others
	Sub-total		1,633,030
			13,098,496

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

	September 30, 2017			December 31, 2016
Loans in local currency		196,803,960			191,309,481
Loans in foreign currencies		13,698,849			14,101,839
Domestic banker’s letter of credit		2,750,451			3,754,030
Credit card accounts		6,980,965			6,673,765
Bills bought in foreign currencies		8,449,003			7,758,575
Bills bought in local currency		178,175			414,451
Factoring receivables		49,459			96,763
Advances for customers on guarantees		24,947			25,197
Privately placed bonds		330,113			328,405
Securitized loans		528,830			252,690
Call loans		2,282,109			2,985,077
Bonds purchased under resale agreements		8,363,588			8,854,753
Loan origination costs and fees		487,982			458,639
Others		481,753			251,635
Present value discount		(12,285	)		(13,827	)
Allowance for credit losses		(1,726,173	)		(1,850,888	)
Total		239,671,726			235,400,585

- 29 -

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

	September 30, 2017			December 31, 2016
CMA accounts		180,000			190,000
Receivables		10,133,617			5,417,676
Accrued income		1,002,844			1,080,489
Telex and telephone subscription rights and refundable deposits		991,665			1,019,577
Other debtors		361,626			639,945
Allowance for credit losses		(66,992	)		(171,115	)
Total		12,602,760			8,176,572

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

	For the nine months ended September 30, 2017
	Consumers			Corporates			Credit card			Others			Total
Beginning balance		(163,858	)		(1,498,842	)		(155,372	)		(209,024	)		(2,027,096	)
Net reversal of provision (net provision)		(96,177	)		(318,660	)		(140,061	)		4,057			(550,841	)
Recoveries of loans previously charged off		(32,485	)		(66,665	)		(37,987	)		(5	)		(137,142	)
Charge-offs		95,191			307,347			154,891			52,029			609,458
Sales of loans and receivables		868			61,432			—			29,264			91,564
Unwinding effect		6,704			29,062			—			—			35,766
Others(*)		471			179,970			—			(366	)		180,075
Ending balance		(189,286	)		(1,306,356	)		(178,529	)		(124,045	)		(1,798,216	)
(*)    Others are due to debt-equity swap, fluctuation of foreign currencies exchange rates, etc.
	For the nine months ended September 30, 2016
	Consumers			Corporates			Credit card			Others			Total
Beginning balance		(203,433	)		(1,686,194	)		(145,810	)		(442,620	)		(2,478,057	)
Net reversal of provision		(65,153	)		(506,360	)		(139,591	)		(11,664	)		(722,768	)
Recoveries of loans previously charged off		(41,780	)		(147,918	)		(32,248	)		(19,233	)		(241,179	)
Charge-offs		120,805			508,131			169,135			215,338			1,013,409
Sales of loans and receivables		2,017			104,844			—			91,767			198,628
Unwinding effect		7,818			54,885			—			—			62,703
Others(*)		50			36,263			1			(8,257	)		28,057
Ending balance		(179,676	)		(1,636,349	)		(148,513	)		(174,669	)		(2,139,207	)

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

- 30 -

11. THE FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

(1) The fair value hierarchy

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

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

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

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

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

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

- 31 -

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

	September 30, 2017
	Level 1 (*1)		Level 2 (*1)		Level 3 (*2)		Total
Financial assets:
Financial assets held for trading
Deposits		26,305		—		—		26,305
Debt securities		407,052		2,264,119		—		2,671,171
Equity securities		27,395		—		—		27,395
Beneficiary certificates		—		16,247		—		16,247
Derivative assets		4,814		1,813,963		30,612		1,849,389
Sub-total		465,566		4,094,329		30,612		4,590,507
Financial assets designated at FVTPL
Debt securities		—		—		6,475		6,475
Equity securities		—		—		12,505		12,505
Sub-total		—		—		18,980		18,980
AFS financial assets
Debt securities		3,072,056		11,322,557		—		14,394,613
Equity securities		382,647		—		1,072,888		1,455,535
Beneficiary certificates		—		1,959,569		643,972		2,603,541
Securities loaned		79,955		90,944		—		170,899
Sub-total		3,534,658		13,373,070		1,716,860		18,624,588
Derivative assets		—		109,828		—		109,828
Total		4,000,224		17,577,227		1,766,452		23,343,903
Financial liabilities:
Financial liabilities held for trading
Deposits		26,327		—		—		26,327
Derivative liabilities		3,545		1,954,159		37,824		1,995,528
Securities sold		3,901		—		—		3,901
Sub-total		33,773		1,954,159		37,824		2,025,756
Financial liabilities designated at FVTPL
Equity-linked securities		—		—		349,409		349,409
Debentures		—		92,941		—		92,941
Sub-total		—		92,941		349,409		442,350
Derivative liabilities		—		41,619		—		41,619
Total		33,773		2,088,719		387,233		2,509,725

- 32 -

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

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

(*2) Certain AFS unquoted equity securities were measured at cost as of September 30, 2017 and December 31, 2016, that are amounting to 64,307 million Won and 43,202 million Won, respectively. These unquoted equity instruments mostly represent minority investments in special purposed entity vehicles such as asset securitization structures. They are measured at cost because (a) observable inputs of financial information to measure fair value was not available to obtain, or (b) there is a significant variance in likely estimated cash flows or (c) the probabilities for the various estimated cash flows could not be measured reliably. In addition, the Group has no intention to dispose these investments in the foreseeable future.

Certain financial assets are carried at cost, even though under K-IFRS it is required to be subsequently measured at their fair value, since they do not have quoted market prices in an active market and cannot be measured at fair value reliably. The carrying amount of the financial assets which have been disposed for the nine months ended September 30, 2017 is 910 million Won and the related gain from the disposals is 647 million Won.

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

- 33 -

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

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

- 34 -

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

	Fair value measurement technique	Input variable	Range	Impact of changes in significant unobservable inputs on fair value measurement
Derivative assets	Option valuation model and others	Correlation coefficient	0.700~0.980	Variation of fair value increases as correlation coefficient increases.
		Volatility of underlying asset	16.8%~33.8%	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	16.8%~33.8%	Variation of fair value increases as volatility increases.
Equity linked securities	Monte Carlo Simulation and others	Correlation coefficient	0.159~0.701	Equity linked securities’ fair value increases if both volatility and correlation coefficient increase. However when correlation coefficient decreases, despite the increase in volatility, the fair value of equity linked securities may decrease.
		Volatility of underlying asset	9.1%~40.6%
Equity securities	External appraisal value and others	Expected growth rate	0.0%~1.0%	Fair value increases as expected growth rate increases.

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

- 35 -

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

	For the nine months ended September 30, 2017
	January 1, 2017		Net Income (loss) (*1)			Other comprehensive income		Purchases/ Issuances		Disposals/ Settlements			Transfer to or out of level 3 (*2)		September 30, 2017
Financial assets:
Financial assets held for trading
Derivative assets		23,153		24,713			—		583		(17,837	)		—		30,612
Financial assets designated at FVTPL
Debt securities		4,348		127			—		2,000		—			—		6,475
Equity securities		12,652		(147	)		—		—		—			—		12,505
Sub-total		17,000		(20	)		—		2,000		—			—		18,980
AFS financial assets
Equity securities		1,024,935		22,182			17,595		47,700		(39,524	)		—		1,072,888
Beneficiary certificates		530,511		1,982			1,087		200,722		(90,330	)		—		643,972
Sub-total		1,555,446		24,164			18,682		248,422		(129,854	)		—		1,716,860
Derivative assets		99		185			—		—		(284	)		—		—
Total		1,595,698		49,042			18,682		251,005		(147,975	)		—		1,766,452
Financial liabilities:
Financial liabilities held for trading
Derivative liabilities		33,524		22,094			—		500		(18,294	)		—		37,824
Financial liabilities designated at FVTPL
Equity-linked securities		673,709		104,217			—		—		(428,517	)		—		349,409
Total		707,233		126,311			—		500		(446,811	)		—		387,233

(*1) The losses which increase the financial liabilities are presented as positive amounts and the gains which decrease the financial liabilities are presented as negative amounts. The loss amounting to 62,894 million Won for the nine months ended September 30, 2017, which is from financial assets and liabilities that the Group holds, has been recognized in net gain (loss) on financial instruments at FVTPL and net gain (loss) on AFS financial assets in the statement of comprehensive income.

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

- 36 -

	For the nine months ended September 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)			September 30, 2016
Financial assets:
Financial assets held for trading
Derivative assets (*3)		78,676		(2,881	)		—			12,182		(11,311	)		(540	)		76,126
Financial assets designated at FVTPL
Debt securities		986		(181	)		—			2,509		—			—			3,314
Equity securities		11,609		536			—			—		—			—			12,145
Sub-total		12,595		355			—			2,509		—			—			15,459
AFS financial assets
Equity securities (*4)		993,368		(4,944	)		62,539			195,035		(120,925	)		(17,455	)		1,107,618
Beneficiary certificates		377,070		1,012			(1,510	)		120,178		(19,401	)		—			477,349
Others		5,308		594			(642	)		—		(5,260	)		—			—
Sub-total		1,375,746		(3,338	)		60,387			315,213		(145,586	)		(17,455	)		1,584,967
Derivative assets		5,973		3,716			—			—		(9,635	)		—			54
Total		1,472,990		(2,148	)		60,387			329,904		(166,532	)		(17,995	)		1,676,606
Financial liabilities:
Financial liabilities held for trading
Derivative liabilities		78,607		886			—			—		(16,534	)		—			62,959
Financial liabilities designated at FVTPL
Equity-linked securities		747,351		44,006			—			983		(142,349	)		—			649,991
Total		825,958		44,892			—			983		(158,883	)		—			712,950

(*1) The loss amounting to 31,766 million Won for the nine months ended September 30, 2016, which is from financial assets and liabilities that the Group holds , has been recognized in net gain (loss) on financial instruments at FVTPL and net gain (loss) on AFS financial assets in the consolidated statement of comprehensive income.

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

(*3) As the variables used for the valuation of currency related derivatives were observable in the market, such derivatives were transferred into level 2 from level 3.

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

- 37 -

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

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

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

	As of September 30, 2017										As of December 31, 2016
	Net income (loss)					Other comprehensive income (loss)					Net income (loss)					Other comprehensive income (loss)
	Favorable		Unfavorable			Favorable		Unfavorable			Favorable		Unfavorable			Favorable		Unfavorable
Financial assets:
Financial assets held for trading
Derivatives instruments assets (*1)(*2)		3,516		(4,690	)		—		—			861		(2,248	)		—		—
Financial assets designed at FVTPL
Equity securities (*5)		703		656			—		—			707		(657	)		—		—
AFS Financial assets
Equity securities (*3)(*4)		—		—			35,705		(18,814	)		—		—			31,412		(18,551	)
Beneficiary certificates (*4)		—		—			2,378		(2,038	)		—		—			2,903		(2,571	)
Total		4,219		(4,034	)		38,083		(20,852	)		1,568		(2,905	)		34,315		(21,122	)
Financial liabilities:
Financial liabilities held for trading
Derivative liabilities (*1)(*2)		7,080		(5,726	)		—		—			4,892		(3,568	)		—		—
Financial liabilities designated at FVTPL
Equity-linked securities (*1)		144		(125	)		—		—			905		(857	)		—		—
Total		7,224		(5,851	)		—		—			5,797		(4,425	)		—		—

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

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

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

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

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

- 38 -

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

	As of September 30, 2017
	Fair value								Book value
	Level 1		Level 2		Level 3		Total
Financial assets:
HTM financial assets		1,605,876		14,738,040		—		16,343,916		16,325,482
Loans and receivables		—		—		267,026,970		267,026,970		266,972,072
Financial liabilities:
Deposits due to customers		—		226,245,800		—		226,245,800		226,344,233
Borrowings		—		16,296,085		—		16,296,085		16,314,499
Debentures		—		27,588,702		—		27,588,702		27,537,013
Other financial liabilities		—		23,528,442		—		23,528,442		23,529,630

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

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

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

- 39 -

12. DERECOGNITION AND OFFSET OF FINANCIAL INSTRUMENTS

(1) Derecognition of financial assets

1) Transferred financial assets that meet condition of derecognition

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

	September 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		—		—		—

(*) The post settlement had been settled up as of September 30, 2017, and there are no financial instruments which meet the derecognition conditions but the group has continuous involvements.

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

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

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

a) Disposal of securities under repurchase agreements

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

	September 30, 2017		December 31, 2016
Assets transferred AFS financial assets		121,227		2,546,683
HTM financial assets		5,432		7,133
Total		126,659		2,553,816
Related liabilities Bonds sold under repurchase agreements		114,586		2,004,905

- 40 -

b) Securities loaned

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

		September 30, 2017		December 31, 2016		Loaned to
Financial assets at FVTPL	Korean equity securities		—		4,459	Samsung Securities Co., Ltd. and others
AFS financial assets	Korean treasury and government agencies and others		170,899		493,579	Korea Securities Finance Corporation and others
	Total		170,899		498,038

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

(2) The offset of financial assets and liabilities

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

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

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

- 41 -

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

	September 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)		1,766,757		2,162		1,764,595		10,082,645		1,164		567,947
Receivable spot exchange (*2)		8,887,161		—		8,887,161
Bonds purchased under resale agreements (*2)		8,363,588		—		8,363,588		8,363,588		—		—
Domestic exchanges receivable (*2)(*5)		27,653,928		27,389,521		264,407		—		—		264,407
Total		46,671,434		27,391,683		19,279,751		18,446,233		1,164		832,354

	September 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)		2,045,134		2,162		2,042,972		10,238,686		185,152		505,504
Payable spot exchange (*3)		8,886,370		—		8,886,370
Bonds sold under repurchase agreements (*4)		114,586		—		114,586		114,586		—		—
Domestic exchanges payable (*3)(*5)		32,057,321		27,389,521		4,667,800		4,663,185		—		4,615
Total		43,103,411		27,391,683		15,711,728		15,016,457		185,152		510,119

	December 31, 2016
	Gross amounts of recognized financial assets		Gross amounts of recognized financial assets set off		Net amounts of financial assets presented		Related amounts not set off in the statement of financial position				Net amounts
							Financial instruments		Cash collateral received
Financial assets:
Derivative assets and others (*1)		2,962,969		8,442		2,954,527		6,546,232		69,834		1,016,550
Receivable spot exchange (*2)		4,678,089		—		4,678,089
Bonds purchased under resale agreements (*2)		8,854,753		—		8,854,753		8,854,753		—		—
Domestic exchanges receivable (*2)(*5)		31,456,123		30,883,281		572,842		—		—		572,842
Total		47,951,934		30,891,723		17,060,211		15,400,985		69,834		1,589,392

	December 31, 2016
	Gross amounts of recognized financial liabilities		Gross amounts of recognized financial liabilities set off		Net amounts of financial liabilities presented		Related amounts not set off in the statement of financial position				Net amounts
							Financial instruments		Cash collateral pledged
Financial liabilities:
Derivative liabilities and others (*1)		3,467,374		8,442		3,458,932		6,695,062		105,270		1,341,375
Payable spot exchange (*3)		4,682,775		—		4,682,775
Bonds sold under repurchase agreements (*4)		2,004,905		—		2,004,905		2,004,905		—		—
Domestic exchanges payable (*3)(*5)		39,345,524		30,883,281		8,462,243		6,161,151		—		2,301,092
Total		49,500,578		30,891,723		18,608,855		14,861,118		105,270		3,642,467

- 42 -

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

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

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

(*4) The items are included in borrowings.

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

13. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES

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

			Percentage of ownership (%)				Financial
Subsidiaries	Main business		September 30, 2017		December 31, 2016		statements as of September 30,2017
Woori Bank and Woori Private Equity Asset Management Co., Ltd.:
Woori Blackstone Korea Opportunity No.1 Private Equity Fund		Other finance business		26.4		26.4		September 30
Woori Bank:
Kumho Tire Co., Inc. (*1)(*2)		Manufacturing		14.2		14.2		June 30(*3)
Woori Service Networks Co., Ltd. (*4)		Freight & staffing services		4.9		4.9		August 31(*3)
Korea Credit Bureau Co., Ltd. (*5)		Credit information		9.9		9.9		September 30
Korea Finance Security Co., Ltd. (*4)		Security service		15.0		15.0		August 31(*3)
Chin Hung International Inc. (*2)(*9)		Construction		25.3		28.4		August 31(*3)
Poonglim Industrial Co., Ltd. (*6)(*12)(*14)		Construction		30.2		31.0		June 30(*3)
STX Engine Co., Ltd. (*1)(*2)		Manufacturing		29.2		29.2		June 30(*3)
Samho International Co., Ltd. (*2)(*18)		Construction		—		7.8		—
Force TEC Co., Ltd. (*6)(*15)		Freight & staffing services		—		34.4		—
STX Corporation (*1)(*2)(*6)(*13)		Wholesale of non-specialized goods		19.7		9.5		June 30(*3)
Saman Corporation (*5)		General construction Technology service		9.2		9.2		June 30(*3)
Dongwoo C & C Co., Ltd. (*6)		Construction		23.2		23.2		—
SJCO Co., Ltd. (*6)		Aggregate transportation and wholesale		26.5		26.5		—
G2 Collection Co., Ltd. (*6)		Wholesale and retail sales		28.9		28.9		—
The Base Enterprise Co., Ltd. (*6)		Manufacturing		48.4		48.4		—
Heungjiwon Co., Ltd. (*6)		Other printing		27.8		27.8		—
Kyesan Engineering Co., Ltd. (*6)		Construction		23.2		23.2		—
Good Software Lap Co., Ltd. (*6)		Service		28.9		28.9		—
Wongwang Co., Ltd. (*6)		Wholesale and real estate		29.0		29.0		—
Sejin Construction Co., Ltd. (*6)		Construction		29.6		29.6		—
Deokwon Food Co., Ltd. (*6)(*17)		Poultry processing and storage		—		27.3		—
QTS Shipping Co., Ltd. (*6)		Complex transportation brokerage		49.4		49.4		—
DAEA SNC Co. Ltd. (*6)		Wholesale and retail sales		24.0		24.0		—
ARES-TECH Co.,Ltd. (*6)		Electronic component manufacturing		23.4		23.4		—
Reading Doctors Co., Ltd. (*6)(*10)		Other service business		35.4		—		—
PREXCO Co., Ltd. (*6)(*10)		Manufacturing		28.1		—		—
Hyunwoo International Co., Ltd. (*6)(*10)		Manufacturing		25.9		—		—
Jiwon Plating Co., Ltd. (*6)(*16)		Plating		20.5		—		—
Cultizm Korea LTD Co., Ltd. (*6)(*16)		Wholesale and retail sales		31.3		—		—
Woori Growth Partnerships New Technology Private Equity Fund		Other financial business		23.1		23.1		September 30
2016KIF-IMM Woori Bank Technology Venture Fund		Other financial business		20.0		20.0		September 30
K BANK Co., Ltd. (*5)		Finance		13.0		13.0		August 31(*3)
Smart Private Equity Fund No.2 (*11)		Other financial business		20.0		—		September 30
Woori Bank-Company K Korea Movie Asset Fund (*11)		Other financial business		25.0		—		September 30
Well to Sea No. 3 Private Equity Fund (*11)		Finance		50.0		—		June 30(*3)
Woori Private Equity Fund:
Woori Renaissance Holdings (*7)		Other financial business		—		51.6		—
Woori Private Equity Asset Management Co., Ltd.,:
Woori Columbus 1st Private Equity Fund (*8)		Other financial business		2.0		2.0		September 30

- 43 -

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

(*2) The investments in associates that have quoted market prices are Kumho Tire Co., Ltd. (current period: KRW 5,980, previous year: KRW 8,480), Chin Hung International Inc. (current period: KRW 1,990, previous year: KRW 2,090), STX Engine Co., Ltd. (current period: KRW 12,150, previous year: KRW 6,630), Samho International Co., Ltd. (previous year: KRW 16,900), STX Corporation. (previous year: KRW 1,660).

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

(*4) Most of the significant business transactions of associates are with the Group as of September 30, 2017 and December 31, 2016.

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

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

(*7) The Group owns over 50% ownership as of December 31, 2016. However, the investment in this entity was accounted for using equity method as the ownership and related contracts meet the definition of joint arrangement under K-IFRS 1111 Joint Arrangements. As of September 30, 2017 the entity has been excluded from the range of associates as liquidated.

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

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

(*10) Even though the Group’s ownership ratio of the entity was more than 20% as of December 31, 2016, the Group did not have significant influence over the entity due to the fact that the entity was going through workout process under receivership, and thus the entity was excluded from the investment in associates. However, as the workout process was completed during the nine months ended September 30, 2017, it has been included in the investment in associates.

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

(*12) The Group has sold a part of shares of the associates so the number of shares holding has decreased during the nine months ended September 30, 2017.

(*13) Due to debt-equity swap capital stock, the Group ownership ratio have increased during the nine months ended September 30, 2017.

(*14) As the carrying amounts of certain investments in associates had been reduced to zero, the Group discontinued the use of the equity method in accounting for those investments, and unrecognized losses due to the restricted application of equity method amount to 14,627 million Won and 612 million Won as of September 30, 2017 and December 31, 2016, respectively.

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

- 44 -

(*16) Due to debt-equity swap, the entity was included in the investment in associates during the nine months ended September 30, 2017.

(*17) As the Group sold its entire ownership interest of the entities, it was exclude from the investment in associates during the nine months ended September 30, 2017.

(*18) The entity was sold after it was transferred to assets held for sale and was excluded from the investment in associates.

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

	For the nine months ended September 30, 2017
	Acquisition cost		January 1, 2017		Share of profits (losses)			Acquisi- tion (*)		Disposal and others			Dividends			Change in Capital			Others (*)			September 30, 2017
Woori Blackstone Korea Opportunity No.1 Private Equity Fund		—		15,289		(4,621	)		—		(7,333	)		(3,298	)		—			—			37
Kumho Tire Co., Inc.		175,652		200,332		(6,845	)		—		—			—			397			—			193,884
Woori Service Networks Co., Ltd.		108		145		10			—		—			(8	)		—			—			147
Korea Credit Bureau Co., Ltd.		3,313		5,592		457			—		—			(149	)		—			—			5,900
Korea Finance Security Co., Ltd.		3,266		3,376		106			—		—			(54	)		—			—			3,428
Chin Hung International Inc.		89,725		43,032		(18,098	)		41,053		—			—			1,562			(26,144	)		41,405
Poonglim Industrial Co., Ltd.		13,916		—		—			—		—			—			—			—			—
STX Engine Co., Ltd.		92,038		43,036		(300	)		—		—			—			4,230			—			46,966
Samho Co., Ltd.		7,492		19,729		2,021			—		(16,354	)		—			(73	)		(5,323	)		—
STX Corporation		42,215		—		(28,520	)		8,546		—			—			690			27,772			8,488
Saman Corporation		8,521		8,699		(872	)		—		—			—			26			—			7,853
Woori Growth Partnerships New Technology Private Equity Fund		13,602		13,118		(376	)		15,099		(498	)		—			(156	)		—			27,187
2016KIF-IMM Woori Bank Technology Venture Fund		1,800		1,800		—			4,140		—			—			—			—			5,940
K BANK Co., Ltd.		32,500		30,442		(8,501	)		11,172		—			—			(139	)		25			32,999
Smart Private Equity Fund No.2		3,000		—		(58	)		3,000		—			—			—			—			2,942
Woori Bank-Company K Korea Movie Asset Fund		1,500		—		(28	)		1,500		—			—			—			—			1,472
Well to Sea No.3 Private Equity Fund		102,500		—		76,962			102,500		(250	)		—			—			—			179,212
Woori Renaissance Holdings		—		54,422		(622	)		—		—			(57,109	)		—			3,309			—
		591,148		439,012		10,715			187,010		(24,435	)		(60,618	)		6,537			(361	)		557,860

(*) Changes in investments in joint ventures and associates due to debt-equity swap is 51,227 million Won.

	For the nine months ended September 30, 2016
	Acquisition cost		January 1, 2016		Share of profits (losses)			Acquisi- tion (*1)		Disposal and others (*2)(*3)			Dividends			Change in Capital			Impairment			September 30, 2016
Woori Blackstone Korea Opportunity No.1 Private Equity Fund		43,917		56,044		1,929			—		(12,286	)		(5,607	)		—			—			40,080
Kumho Tire Co., Inc.		175,652		214,050		(9,770	)		—		—			—			1,828			—			206,108
Woori Service Networks Co., Ltd.		108		139		9			—		—			(12	)		—			—			136
Korea Credit Bureau Co., Ltd.		3,313		5,291		147			—		—			(135	)		—			—			5,303
Korea Finance Security Co., Ltd.		3,266		3,711		(278	)		—		—			(54	)		—			—			3,379
United PF 1st Corporate financial stability		172,441		187,592		3,265			—		(190,857	)		—			—			—			—
Chin Hung International Inc.		89,725		43,936		(637	)		—		—			—			89			—			43,388
Poonglim Industrial Co., Ltd.		13,916		5,313		(2,346	)		—		—			—			(2,967	)		—			—
STX Engine Co., Ltd.		92,038		51,276		(3,444	)		—		—			—			(1,563	)		—			46,269
Samho Co., Ltd.		7,492		14,325		3,470			—		—			—			—			—			17,795
STX Corporation		42,215		4,251		(8,179	)		—		—			—			3,928			—			—
Osung LST Co., Ltd.		15,405		10,985		(2,903	)		—		(6,928	)		—			19			(1,173	)		—
Saman Corporation		8,521		8,521		418			—		—			—			(74	)		—			8,865
K-Growth crowd 2step Fund		800		—		(13	)		800		(787	)		—			—			—			—
Woori Growth Partnerships New Technology Private Equity Fund		9,561		—		(491	)		9,561		—			—			—			—			9,070
Woori Renaissance Holdings		63,000		37,121		2,020			—		—			(2	)		—			—			39,139
Woori Columbus 1st Private Equity Fund		1,200		1,306		(43	)		—		(1,065	)		(198	)		—			—			—
		738,430		643,861		(16,846	)		10,361		(211,923	)		(6,008	)		1,260			(1,173	)		419,532

- 45 -

(*1) AFS financial assets decreased by 5,421 million Won through transfers to investments in associates occurred during the nine months ended September 30, 2016.

(*2) Investments in associates decreased by 155,220 million Won through transfers to AFS financial assets occurred during the nine months ended September 30, 2016.

(*3) Investments in associates decreased by 6,928 million Won through transfers to assets held for sale occurred during the nine months ended September 30, 2016.

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

	September 30, 2017
	Assets		Liabilities		Operating revenue		Net income (loss)
Woori Blackstone Korea Opportunity No.1 Private Equity Fund		200		31		49,986		(11,992	)
Kumho Tire Co., Inc.		5,013,220		3,893,664		1,381,478		(108,119	)
Woori Service Networks Co., Ltd.		4,748		1,770		10,869		778
Korea Credit Bureau Co., Ltd.		76,109		19,077		49,223		4,432
Korea Finance Security Co., Ltd.		32,515		9,667		40,135		465
Chin Hung International Inc.		333,173		265,968		349,796		13,950
Poonglim Industrial Co., Ltd.		245,125		305,736		75,085		(1,077	)
STX Engine Co., Ltd.		862,594		753,364		188,103		2,851
STX Corporation		584,298		521,144		848,336		349,318
Saman Corporation		97,963		70,965		48,842		(7,604	)
Woori Growth Partnerships New Technology Private Equity Fund		118,293		483		291		(2,307	)
2016KIF-IMM Woori Bank Technology Venture Fund		28,692		376		4		(1,135	)
K BANK Co., Ltd.		961,997		794,293		9,868		(52,161	)
Smart Private Equity Fund No.2		14,764		52		1		(288	)
Woori Bank-Company K Korea Movie Asset Fund		5,886		—		12		(114	)
Well to Sea No.3 Private Equity Fund		5,464,758		4,870,573		153,999		153,999
Woori Columbus 1st Private Equity Fund		21		8		—		(291	)

	December 31, 2016
	Assets		Liabilities		Operating revenue		Net income (loss)
Woori Blackstone Korea Opportunity No.1 Private Equity Fund		57,971		427		75,084		38,226
Kumho Tire Co., Inc.		5,079,740		3,914,306		2,156,667		(53,328	)
Woori Service Networks Co., Ltd.		4,722		1,782		14,875		801
Korea Credit Bureau Co., Ltd.		71,245		17,322		59,868		3,517
Korea Finance Security Co., Ltd.		32,262		9,759		52,657		700
Chin Hung International Inc.		421,710		354,995		578,640		794
Poonglim Industrial Co., Ltd.		304,718		323,765		156,770		(15,135	)
STX Engine Co., Ltd.		865,265		769,481		372,295		(22,978	)
Samho Co., Ltd.		740,786		489,130		909,927		68,077
STX Corporation		781,622		1,087,469		1,252,968		(378,782	)
Saman Corporation		83,380		47,175		72,850		2,746
Woori Growth Partnerships New Technology Private Equity Fund		57,339		493		37		(2,177	)
2016KIF-IMM Woori Bank Technology Venture Fund		9,005		254		5		(250	)
K BANK Co., Ltd.		239,806		5,633		2,927		(12,222	)
Woori Renaissance Holdings Inc.		127,411		26,703		37,206		33,508
Woori Columbus 1st Private Equity Fund		811		506		3,764		(450	)

- 46 -

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

	As of September 30, 2017
	Number of shares owned		Ownership (%)
Orient Shipyard Co., Ltd. (*)		465,050 shares		21.4
Saenuel Co., Ltd. (*)		3,531 shares		37.4
E Mirae Tech Co., Ltd. (*)		7,696 shares		41.0
Jehin Trading Co., Ltd. (*)		81,610 shares		27.3
NK Eng Co., Ltd. (*)		697,033 shares		23.1
The season Co., Ltd. (*)		18,187 shares		30.1
Yuil PESC Co., Ltd. (*)		8,642 shares		24.0
Youngdong Sea Food Co., Ltd. (*)		12,106 shares		24.0
Sinseong Trading Co., Ltd. (*)		2,584 shares		27.2
CL Tech Co., Ltd. (*)		13,759 shares		38.6
Force TEC Co., Ltd. (*)		4,780,907 shares		25.8
Protronics Co., Ltd. (*)		95,921 shares		48.1
Gil Co., Ltd. (*)		44,662 shares		26.1
Instern Co., Ltd. (*)		14,296 shares		20.1

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

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

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

- 47 -

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

	As of September 30, 2017
	Total net asset			Ownership (%)		Net assets of associates (or joint ventures)			Cost-book value differential and others		Impairment			Intercompany transaction and others			Book value
Woori Blackstone Korea Opportunity Private Equity Fund No.1		169			26.4		45			—		—			(8	)		37
Kumho Tire Co., Inc. (*)		1,009,658			14.2		142,876			48,459		—			2,549			193,884
Woori Service Networks Co., Ltd.		2,978			4.9		147			—		—			—			147
Korea Credit Bureau Co., Ltd.		57,032			9.9		5,652			248		—			—			5,900
Korea Finance Security Co., Ltd.		22,848			15.0		3,428			—		—			—			3,428
Chin Hung International Inc. (*)		67,061			25.3		16,970			24,565		—			(130	)		41,405
Poonglim Industrial Co., Ltd. (*)		(158,028	)		30.2		(47,729	)		54,542		(20,504	)		13,691			—
STX Engine Co., Ltd.		109,230			29.2		31,933			14,954		—			79			46,966
STX Corporation		63,154			19.7		12,453			24,614		(28,579	)		—			8,488
Saman Corporation		26,998			9.2		2,480			5,373		—			—			7,853
Woori Growth Partnerships New Technology Private Equity Fund		117,810			23.1		27,187			—		—			—			27,187
2016KIF-IMM Woori Bank Technology Venture Fund		28,316			20.0		5,663			—		—			277			5,940
K BANK Co., Ltd. (*)		254,467			13.0		32,999			—		—			—			32,999
Smart Private Equity Fund No.2		14,712			20.0		2,942			—		—			—			2,942
Woori Bank-Company K Korea Movie Asset Fund		5,886			25.0		1,472			—		—			—			1,472
Well to Sea No.3 Private Equity Fund (*)		358,224			50.0		179,025			—		—			187			179,212
Woori Columbus 1st Private Equity Fund		13			2.0		—			—		—			—			—

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

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

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

- 48 -

14. INVESTMENT PROPERTIES

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

	September 30, 2017			December 31, 2016
Acquisition cost		393,701			387,675
Accumulated depreciation		(32,346	)		(29,178	)
Net carrying value		361,355			358,497

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

	For the nine months ended September 30, 2017			For the nine months ended September 30, 2016
Beginning balance		358,497			351,496
Acquisition		5,080			3,133
Disposal		(397	)		—
Depreciation		(2,986	)		(2,839	)
Reversal of impairment losses		112			—
Transfer		1,580			16,319
Classified to assets held for sale		(464	)		—
Foreign currencies translation adjustments		(67	)		(46	)
Ending balance		361,355			368,063

(3) Fair value of investment properties is amounting to 379,686 million Won and 382,370 million Won as of September 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 September 30, 2017 and December 31, 2016.

(4) Rental fee earned from investment properties is amounting to 3,789 million Won and 3,658 million Won for the nine months ended September 30, 2017 and 2016, respectively.

- 49 -

15. PREMISES AND EQUIPMENT

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

	September 30, 2017
	Land		Building			Properties for business use			Structures in leased office			Construction in progress		Structures			Total
Acquisition cost		1,491,982		866,832			1,022,955			431,683			60,555		20			3,874,027
Accumulated depreciation		—		(181,146	)		(836,270	)		(365,869	)		—		(17	)		(1,383,302	)
Net carrying value		1,491,982		685,686			186,685			65,814			60,555		3			2,490,725

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

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

	For the nine months ended September 30, 2017
	Land			Building			Properties for business use			Structures in leased office			Construction in progress			Structures			Total
Beginning balance		1,488,745			691,699			189,902			68,958			18,717			4			2,458,025
Acquisition		4,244			17,932			46,917			16,851			47,736			—			133,680
Disposal		(891	)		(2,593	)		(319	)		(606	)		—			—			(4,409	)
Depreciation		—			(19,602	)		(56,447	)		(24,887	)		—			(1	)		(100,937	)
Classified to assets held for sale		(3,642	)		(1,059	)		614			—			—			—			(4,087	)
Transfer		4,200			(58	)		5,471			—			(5,624	)		—			3,989
Foreign currencies translation adjustment		(674	)		(624	)		(665	)		(545	)		(274	)		—			(2,782	)
Others		—			(9	)		1,212			6,043			—			—			7,246
Ending balance		1,491,982			685,686			186,685			65,814			60,555			3			2,490,725

	For the nine months ended September 30, 2016
	Land			Building			Properties for business use			Structures in leased office			Construction in progress			Structures			Total
Beginning balance		1,493,628			704,017			193,291			79,744			522			4			2,471,206
Acquisition		—			11,386			52,390			16,307			2,575			—			82,658
Disposal		(30	)		—			(206	)		(1,583	)		(67	)		—			(1,886	)
Depreciation		—			(19,017	)		(61,353	)		(40,082	)		—			(1	)		(120,453	)
Reversal of impairment loss		—			—			7			—			—			—			7
Classified to assets held for sale		(4,368	)		(2,941	)		—			—			—			—			(7,309	)
Transfer		(11,198	)		(5,121	)		—			—			—			—			(16,319	)
Foreign currencies translation adjustments		(139	)		(163	)		(815	)		(965	)		(15	)		—			(2,097	)
Others		145			119			1,327			30,528			—			—			32,119
Ending balance		1,478,038			688,280			184,641			83,949			3,015			3			2,437,926

- 50 -

16. INTANGIBLE ASSETS AND GOODWILL

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

	September 30, 2017
	Goodwill		Software			Industrial property rights			Development cost			Others			Membership deposit			Total
Acquisition cost		116,544		203,001			884			392,511			631,686			26,540			1,371,166
Accumulated amortization		—		(158,891	)		(488	)		(177,655	)		(502,180	)		—			(839,214	)
Accumulated impairment losses		—		—			—			—			(59	)		(6,979	)		(7,038	)
Net carrying value		116,544		44,110			396			214,856			129,447			19,561			524,914

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

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

	For the nine months ended September 30, 2017
	Goodwill			Software			Industrial property rights			Development cost			Others			Membership deposit			Total
Beginning balance		124,803			35,477			313			138,696			164,364			20,086			483,739
Acquisition		105			9,351			170			102,051			17,824			560			130,061
Disposal		—			—			—			—			(38	)		(866	)		(904	)
Amortization (*)		—			(12,212	)		(87	)		(17,326	)		(45,539	)		—			(75,164	)
Impairment loss		—			—			—			—			—			(181	)		(181	)
Transfer		—			8,072			—			(8,108	)		36			—			—
Foreign currencies translation adjustment		(8,364	)		(99	)		—			(402	)		(968	)		(33	)		(9,866	)
Others		—			3,521			—			(55	)		(6,232	)		(5	)		(2,771	)
Ending balance		116,544			44,110			396			214,856			129,447			19,561			524,914

(*) Amortization of other intangible assets amounting to 36,419 million Won is included in other operating expenses.

	For the nine months ended September 30, 2016
	Goodwill			Software			Industrial property rights			Development cost			Others			Membership deposit			Total
Beginning balance		103,525			38,171			344			51,357			201,769			24,640			419,806
Acquisition		—			2,029			4			23,104			41,244			1,902			68,283
Disposal		—			—			—			—			(23	)		(3,408	)		(3,431	)
Amortization		—			(11,328	)		(71	)		(13,373	)		(43,063	)		—			(67,835	)
Impairment loss(Reversal of)		—			—			—			—			3,231			(923	)		2,308
Foreign currencies translation adjustments		(839	)		—			—			(1	)		(898	)		(115	)		(1,853	)
Others		137			—			—			—			1,151			(23	)		1,265
Ending balance		102,823			28,872			277			61,087			203,411			22,073			418,543

- 51 -

17. ASSETS HELD FOR SALE

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

	September 30, 2017		December 31, 2016
Premises and equipment and others		2,909		2,342

18. ASSETS SUBJECT TO LIEN AND ASSETS ACQUIRED THROUGH FORECLOSURES

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

		September 30, 2017
		Collateral given to	Amount		Reason for collateral
Loan and receivables	Due from banks on time in foreign currencies	The Bank of China and others		6,890	Collaterals for issuing letter of guarantee and others
	Due from banks in local currency	Samsung Securities Co., Ltd. and others		9,298	Margin deposit for futures or option
	Due from banks in foreign currencies	Korea Investment & Securities Co., Ltd. and others		228,393	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		269,686	Substitute securities and others
AFS financial assets	Korean treasury and government agencies bonds and others	Korea Securities Depository and others		121,227	Related to bonds sold under repurchase agreements (*)
	Korean treasury and government agencies bonds and others	The BOK and others		1,602,529	Settlement risk and others
HTM financial assets	Korean treasury and government agencies bonds	Korea Securities Depository		5,432	Related to bonds sold under repurchase agreements (*)
	Financial institutions debt securities and others	The BOK and others		8,088,568	Settlement risk and others
Premises and equipment	Land and building	Credit Counselling & Recovery Service and others		6,186	Leasehold rights and others
		Total		10,338,209

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

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

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

- 52 -

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

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

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

		September 30, 2017		December 31, 2016		Loaned to
Financial assets at FVTPL	Korean Equity securities		—		4,459	Samsung Securities Co., Ltd. and others
AFS financial assets	Korean treasury and government agencies bonds and others		170,899		493,579	Korea Securities Finance Corporation and others
	Total		170,899		498,038

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

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

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

	September 30, 2017
	Fair values of collaterals		Fair values of collaterals were disposed or re-subjected to lien
Securities		8,771,756		—

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

- 53 -

19. OTHER ASSETS

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

	September 30, 2017		December 31, 2016
Prepaid expenses		197,201		111,445
Advance payments		9,418		1,944
Non-operative assets		—		6,192
Others		8,764		9,265
Total		215,383		128,846

20. FINANCIAL LIABILITIES AT FVTPL

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

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

	September 30, 2017		December 31, 2016
Financial liabilities held for trading		2,025,756		3,036,478
Financial liabilities designated at FVTPL		442,350		766,880
Total		2,468,106		3,803,358

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

	September 30, 2017		December 31, 2016
Deposits due to Customers:
Gold banking liabilities		26,327		26,501
Derivative liabilities		1,995,528		3,009,977
Securities sold		3,901		—
Total		2,025,756		3,036,478

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

	September 30, 2017		December 31, 2016
Equity linked securities index:
Equity linked securities index in short position		349,409		673,906
Debentures:
Debentures in local currency		92,941		92,974
Total		442,350		766,880

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

	For the nine months ended September 30
	2017			2016
Financial liabilities designated at FVTPL subject to credit risk adjustments		442,350			745,038
Changes in fair value for credit risk adjustments		(117	)		(841	)
Accumulated changes in fair value for credit risk adjustments		(15,878	)		(15,814	)

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

- 54 -

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

	September 30, 2017			December 31, 2016
Carrying amount		442,350			766,880
Nominal amount at maturity		456,732			902,375
Difference		(14,382	)		(135,495	)

21. DEPOSITS DUE TO CUSTOMERS

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

	September 30, 2017			December 31, 2016
Deposits in local currency:
Deposits on demand		8,760,841			9,491,680
Deposits at termination		188,294,638			183,723,369
Mutual installment		34,821			37,128
Deposits on notes payables		1,133,005			943,446
Deposits on CMA		172,862			203,013
Certificate of deposits		5,788,205			3,836,430
Other deposits		1,381,311			1,360,176
Sub-total		205,565,683			199,595,242
Deposits in foreign currencies		20,831,234			21,453,096
Present value discount		(52,684	)		(27,927	)
Total		226,344,233			221,020,411

22. BORROWINGS AND DEBENTURES

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

	September 30, 2017
	Lenders		Interest rate (%)		Amount
Borrowings in local currency:
Borrowings from The BOK		The BOK		0.5 ~ 0.8		1,457,178
Borrowings from government funds		Small Enterprise And Market Service and others		0.0 ~ 3.5		1,634,535
Others		The Korea Development Bank and others		0.0 ~ 3.8		3,907,323
Sub-total						6,999,036
Borrowings in foreign currencies:
Borrowings in foreign currencies		The Export-Import BOK and others		0.0 ~ 7.3		7,944,067
Offshore borrowings in foreign currencies		Commonwealth Bank		1.8		30,273
Sub-total						7,974,340
Bills sold		Others		0.0 ~ 1.2		30,643
Call money		Bank and others		0.0 ~ 4.4		1,196,183
Bonds sold under repurchase agreements		Other financial institutions		0.6 ~ 8.6		114,586
Present value discount						(289	)
Total						16,314,499

- 55 -

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

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

	September 30, 2017					December 31, 2016
	Interest rate (%)		Amount			Interest rate (%)		Amount
Face value of bond(*):
Ordinary bonds		1.5 ~ 11.8		22,495,833			1.5 ~ 11.8		18,268,403
Subordinated bonds		3.4 ~ 12.6		4,725,384			3.0 ~ 12.6		5,327,335
Other bonds		1.6 ~ 17.0		348,166			17.0		4,006
Sub-total				27,569,383					23,599,744
Discounts on bond				(32,370	)				(34,295	)
Total				27,537,013					23,565,449

(*) Included debentures under fair value hedge relationships are 3,355,581 million Won and 3,610,193 million Won as of September 30, 2017 and December 31, 2016, respectively. Also, debentures under cash flow hedge amounting to 401,744 million Won are included.

23. PROVISIONS

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

	September 30, 2017		December 31, 2016
Asset retirement obligation		61,759		58,076
Provision for guarantee (*1)		193,290		238,117
Provisions for unused commitments		85,260		87,909
Provisions for customer reward credits		39,786		22,093
Other provisions (*2)		21,090		22,282
Total		401,185		428,477

(*1) Provision for guarantee includes provision for financial guarantee of 63,307 million Won and 67,557 million Won as of September 30, 2017 and December 31, 2016, respectively.

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

- 56 -

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

	For the nine months ended September 30, 2017
	Provision for guarantees			Provision for unused commitments			Provisions for customer reward credits			Other provisions			Total
Beginning balance		238,117			87,909			22,093			22,282			370,401
Provisions provided		1,773			2,043			46,713			3,970			54,499
Provisions used		(17,260	)		(35	)		(65,228	)		(7,136	)		(89,659	)
Reversal of unused amount		(48,964	)		(4,671	)		—			(57	)		(53,692	)
Differences due to foreign currencies translation		53			14			—			(153	)		(86	)
Transfer(*)		—			—			17,507			—			17,507
Others		19,571			—			18,701			2,184			40,456
Ending balance		193,290			85,260			39,786			21,090			339,426

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

	For the nine months ended September 30, 2016
	Provision for guarantees			Provision for unused commitments			Provisions for customer reward credits			Other provisions			Total
Beginning balance		364,141			85,313			5,445			22,581			477,480
Provisions provided		4,513			13,247			16,882			3,871			38,513
Provisions used		(81,410	)		(20	)		(7,808	)		(9,508	)		(98,746	)
Reversal of unused amount		(68,532	)		(1,153	)		—			—			(69,685	)
Transfer		—			—			40			—			40
Others		13,725			(43	)		858			(6	)		14,534
Ending balance		232,437			97,344			15,417			16,938			362,136

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

	For the nine months ended September 30, 2017			For the nine months ended September 30, 2016
Beginning balance		58,076			39,121
Provisions provided		1,479			1,437
Provisions used		(987	)		(706	)
Reversal of unused amount		(732	)		—
Amortization		313			347
Increase in asset retirement expense and others		3,610			18,509
Ending balance		61,759			58,708

- 57 -

24. NET DEFINED BENEFIT LIABILITY(ASSET)

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

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

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

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

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

	September 30, 2017			December 31, 2016
Defined benefit obligation		1,040,983			984,381
Fair value of plan assets		(1,020,484	)		(990,653	)
Net defined benefit liability (asset)		20,499			(6,272	)

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

	For the nine months ended September 30, 2017			For the nine months ended September 30, 2016
Beginning balance		984,381			901,219
Current service cost		110,279			115,148
Interest expense		19,709			18,038
Remeasurements		(29,030	)		63,649
Foreign currencies translation adjustments		(124	)		(10	)
Retirement benefit paid		(33,563	)		(31,047	)
Curtailment or liquidation		(10,928	)		(9,243	)
Others		259			370
Ending balance		1,040,983			1,058,124

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

	For the nine months ended September 30, 2017			For the nine months ended September 30, 2016
Beginning balance		990,653			801,528
Interest income		22,682			18,571
Remeasurements		(11,301	)		(5,945	)
Employer’s contributions		18,000			218,250
Retirement benefit paid		(31,611	)		(30,208	)
Curtailment or liquidation		(11,052	)		(8,905	)
Others		43,113			(5,259	)
Ending balance		1,020,484			988,032

(4) Plan assets wholly consist of time deposits as of September 30, 2017 and December 31, 2016, respectively. Among plan assets, realized returns on plan assets amount to 11,381 million Won and 12,626 million Won for the nine months ended September 30, 2017 and 2016, respectively.

It is expected that the Group shall contribute 131,248 million Won for the plan for the year ended December 31, 2017.

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

	For the nine months ended September 30, 2017			For the nine months ended September 30, 2016
Current service cost		110,279			115,148
Net interest income		(2,973	)		(533	)
Loss(gain) on the curtailment or liquidation		124			(338	)
Cost recognized in net income		107,430			114,277
Remeasurements		(17,729	)		69,594
Cost recognized in total comprehensive income		89,701			183,871

Retirement benefit service costs related to defined contribution plans are recognized 3,317 million Won and 3,095 million Won for the nine months ended September 30, 2017 and 2016, respectively.

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

	September 30, 2017	December 31, 2016
Discount rate	3.08%	2.85%
Future wage growth rate	6.07%	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):

		September 30, 2017			December 31, 2016
Discount rate	Increase by 1% point		(109,427	)		(107,203	)
	Decrease by 1% point		126,324			125,395
Future wage growth rate	Increase by 1% point		125,974			124,766
	Decrease by 1% point		(110,722	)		(108,344	)

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25. OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES

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

	September 30, 2017			December 31, 2016
Other financial liabilities:
Accounts payable		10,402,098			5,626,661
Accrued expenses		2,088,022			2,055,936
Borrowings from trust accounts		3,334,570			3,329,683
Agency business revenue		687,719			331,159
Foreign exchange payables		618,663			702,968
Domestic exchange payables		4,677,410			8,480,765
Other miscellaneous financial liabilities		1,722,289			1,458,747
Present value discount		(1,141	)		(833	)
Sub-total		23,529,630			21,985,086
Other liabilities:
Unearned income		179,517			171,050
Other miscellaneous liabilities		143,696			128,326
Sub-total		323,213			299,376
Total		23,852,843			22,284,462

26. DERIVATIVES

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

	September 30, 2017
			Assets						Liabilities
	Nominal amount		For cash flow hedge		For fair value Hedge		For trading		For cash flow hedge		For fair value hedge		For trading
Interest rate:
Futures		76,034		—		—		—		—		—		—
Swaps		131,017,740		—		109,385		289,979		—		10,333		310,652
Purchase options		690,000		—		—		14,065		—		—		—
Written options		945,000		—		—		—		—		—		14,793
Currency:
Futures		634,228		—		—		—		—		—		—
Forwards		73,885,352		—		—		615,117		—		—		549,603
Swaps		51,241,604		443		—		735,760		18,274		—		766,045
Purchase options		2,853,953		—		—		30,079		—		—		—
Written options		4,674,360		—		—		—		—		—		38,148
Equity:
Futures		354,803		—		—		—		—		—		—
Swaps		15,000		—		—		134		—		—		20
Purchase options		6,369,003		—		—		164,066		—		—		—
Written options		7,376,209		—		—		—		—		13,012		315,854
Others:
Futures		3,582		—		—		—		—		—		—
Swaps		1,987		—		—		65		—		—		55
Purchase options		6,970		—		—		124		—		—		—
Written options		24,523		—		—		—		—		—		358
Total		280,170,348		443		109,385		1,849,389		18,274		23,345		1,995,528

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

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

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

	For the nine months ended September 30
	2017			2016
Losses from hedged items		18,199			(51,661	)
Gains from hedging instruments		(32,073	)		45,945

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

Among gain (loss) on valuation of derivatives that was included in the accumulated other comprehensive income, the amount has been reclassified to loss is 16,899 million Won, before reduction of income tax effect during the nine months ended September 30, 2017.

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27. DEFERRED DAY 1 PROFITS OR LOSSES

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

	For the nine months ended September 30
	2017			2016
Beginning balance		13,422			28,008
New transactions		500			1,337
Amounts recognized in profits or losses		(5,271	)		(13,498	)
Ending balance		8,651			15,847

In case some variables to measure fair values of financial instruments are not observable or available in the market, valuation techniques are utilized to evaluate such financial instruments. Those financial instruments are recorded at the fair value produced by the valuation techniques as at the time of acquisition, even though there are difference noted between the transaction price and the fair value. The table above presents the difference yet to be realized as profit or losses as of September 30, 2017 and December 31, 2016.

28. CAPITAL STOCK AND CAPITAL SURPLUS

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

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

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

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

	September 30, 2017		December 31, 2016
Capital in excess of par value		269,533		269,533
Other capital surplus		17,533		16,798
Total		287,066		286,331

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29. HYBRID SECURITIES

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

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

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

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30. OTHER EQUITY

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

	September 30, 2017			December 31, 2016
Accumulated other comprehensive income:
Gain on valuation of available-for-sale financial assets		335,501			386,981
Share of other comprehensive loss of joint ventures and associates		3,054			(1,863	)
Loss on foreign currency translation of foreign operations		(96,859	)		(48,353	)
Remeasurement loss related to defined benefit plan		(150,197	)		(163,397	)
Loss on valuation of cash flow hedges		(1,247	)		—
Sub-total		90,252			173,368
Treasury shares		(34,113	)		(34,113	)
Other capital adjustments		(1,815,438	)		(1,607,280	)
Total		(1,759,299	)		(1,468,025	)

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

	For the nine months ended September 30, 2017
	Beginning balance			Increase (decrease)(*)			Reclassification adjustments(*)			Income tax effect			Ending balance
Gain (loss) on valuation of available-for-sale financial assets		386,981			60,151			(122,975	)		11,344			335,501
Share of other comprehensive income (loss) of joint ventures and associates		(1,863	)		6,537			—			(1,620	)		3,054
Gain (loss) on foreign currency translation of foreign operations		(48,353	)		(61,194	)		—			12,688			(96,859	)
Remeasurement gain (loss) related to defined benefit plan		(163,397	)		17,504			—			(4,304	)		(150,197	)
Gain (loss) on valuation of cash flow hedges		—			(18,544	)		16,899			398			(1,247	)
Total		173,368			4,454			(106,076	)		18,506			90,252

(*) 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 nine months ended September 30, 2016
	Beginning balance			Increase (decrease)(*)			Reclassification adjustments(*)			Income tax effect			Ending balance
Gain (loss) on valuation of available-for-sale financial assets		374,685			101,744			(43,234	)		(6,856	)		426,339
Share of other comprehensive income (loss) of joint ventures and associates		6,074			1,242			(3,906	)		(301	)		3,109
Gain (loss) on foreign currency translation of foreign operations		(70,789	)		(98,679	)		—			24,004			(145,464	)
Remeasurement of the net defined benefit liability		(197,579	)		(69,593	)		—			16,810			(250,362	)
Cash flow hedges		(10,371	)		10,371			—			—			—
Total		102,020			(54,915	)		(47,140	)		33,657			33,622

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

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31. RETAINED EARNINGS

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

		September 30, 2017		December 31, 2016
Legal reserve	Legal reserve		1,729,754		1,622,754
	Other legal reserve		45,669		44,634
	Sub-total		1,775,423		1,667,388
Voluntary reserve	Business rationalization reserve		8,000		8,000
	Reserve for financial structure improvement		235,400		235,400
	Additional reserve		7,418,806		7,073,104
	Regulatory reserve for credit loss		2,438,191		2,255,252
	Revaluation reserve		751,964		753,908
	Other voluntary reserve		11,700		11,700
	Sub-total		10,864,061		10,337,364
Retained earnings before appropriation			2,884,032		2,606,814
	Total		15,523,516		14,611,566

i. Legal reserve

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

ii. Other legal reserve

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

iii. Business rationalization reserve

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

iv. Reserve for financial structure improvement

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

v. Additional reserve and other voluntary reserve

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

vi. Regulatory reserve for credit loss

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

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

	For the nine months ended September 30
	2017			2016
Beginning balance		14,611,566			13,726,122
Net attributable to owners		1,378,507			1,105,915
Dividends on common stock		(336,636	)		(168,317	)
Dividends on hybrid securities		(129,921	)		(149,506	)
Ending balance		15,523,516			14,514,214

32. REGULATORY RESERVE FOR CREDIT LOSS

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

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

	September 30, 2017		December 31, 2016
Beginning balance		2,438,191		2,255,252
Planned provision of regulatory reserve for credit loss		102,705		182,939
Ending balance		2,540,896		2,438,191

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

	2017				2016
	Three months ended September 30		Nine months ended September 30		Three months ended September 30			Nine months ended September 30
Net income		283,426		1,392,441		359,392			1,117,179
Provision (reversal) of regulatory reserve for credit loss		52,744		102,705		(13,306	)		(480	)
Adjusted net income after the provision(reversal) of regulatory reserve		230,682		1,289,736		372,698			1,117,659
Adjusted EPS after the provision (reversal) of regulatory reserve(Unit: Korean Won)		285		1,723		481			1,439

33. DIVIDENDS

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

In addition, on July 28, 2017, the board of directors approved interim dividend payment of 100 Won per share, which amounts to 67,328 million Won in total and such dividend was paid during the nine months ended September 30, 2017.

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34. NET INTEREST INCOME

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

	2017				2016
	Three months ended September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Financial assets at FVTPL		14,680		41,486		14,168		43,852
AFS financial assets		67,021		211,088		84,641		261,181
HTM financial assets		77,349		227,022		88,245		277,737
Loans and receivables:
Interest on due from banks		21,869		63,272		16,955		50,832
Interest on loans		1,999,561		5,809,569		1,895,734		5,739,685
Interest of other receivables		7,349		24,976		9,182		29,200
Sub-total		2,028,779		5,897,817		1,921,871		5,819,717
Total		2,187,829		6,377,413		2,108,925		6,402,487

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

	2017				2016
	Three months ended September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Interest on deposits due to customers		596,923		1,771,307		618,854		1,945,407
Interest on borrowings		59,575		175,123		51,616		161,748
Interest on debentures		162,556		468,360		154,735		464,792
Other interest expense		17,219		60,747		27,278		85,340
Total		836,273		2,475,537		852,483		2,657,287

- 67 -

35. NET FEES AND COMMISSIONS INCOME

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

	2017				2016
	Three months ended September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Fees and commissions received (*)		172,487		508,809		163,273		496,737
Fees and commissions received for provision of guarantee		16,538		48,238		15,982		50,145
Fees and commissions received on project financing		5,466		11,800		4,434		17,923
Fees and commissions received on credit card		270,229		797,795		246,363		699,283
Fees and commissions received on securities		19,984		60,251		20,515		53,998
Other fees and commissions received		49,893		121,597		31,435		70,746
Total		534,597		1,548,490		482,002		1,388,832

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

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

	2017				2016
	Three months ended September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Fees and commissions paid		44,128		117,295		38,632		119,046
Credit card commission		212,123		612,472		201,206		557,657
Brokerage commission		214		562		97		531
Others		1,263		3,592		560		2,085
Total		257,728		733,921		240,495		679,319

36. DIVIDEND INCOME

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

	2017				2016
	Three months ended September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Dividend from financial assets at FVTPL		23		213		90		841
Dividend from AFS financial assets		48,819		108,074		16,791		136,439
Total		48,842		108,287		16,881		137,280

- 68 -

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 September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Gains (losses) on financial instruments held for trading		67,214			7,028			(10,729	)		370
Losses on financial instruments designated at FVTPL		(18,441	)		(104,664	)		(91,633	)		(44,136	)
Total		48,773			(97,636	)		(102,362	)		(43,766	)

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

			2017						2016
			Three months ended September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Financial Instruments held for trading	Securities	Gain on valuation		(2,220	)		3,675			166			17,180
		Gain on disposals		6,954			16,814			3,786			21,772
		Loss on valuation		(1,498	)		(8,009	)		(1,813	)		(5,164	)
		Loss on disposals		(1,543	)		(3,600	)		(2,527	)		(7,507	)
		Sub-total		1,693			8,880			(388	)		26,281
	Other financial instruments	Gain on valuation		1,742			4,813			1,717			12,085
		Gain on disposals		954			1,887			707			2,248
		Loss on valuation		(2,243	)		(5,833	)		(2,102	)		(12,487	)
		Loss on disposals		(317	)		(551	)		(275	)		(1,590	)
		Sub-total		136			316			47			256
		Total		1,829			9,196			(341	)		26,537
Derivatives (for trading)	Interest rates derivatives	Gain on transactions and valuation		242,785			676,134			220,952			1,059,261
		Loss on transactions and valuation		(236,425	)		(658,159	)		(187,315	)		(1,084,307	)
		Sub-total		6,360			17,975			33,637			(25,046	)
	Currencies derivatives	Gain on transactions and valuation		821,443			4,595,008			2,554,939			5,300,990
		Loss on transactions and valuation		(774,537	)		(4,718,146	)		(2,688,639	)		(5,320,934	)
		Sub-total		46,906			(123,138	)		(133,700	)		(19,944	)
	Equity derivatives	Gain on transactions and valuation		95,483			398,410			109,869			180,014
		Loss on transactions and valuation		(83,339	)		(294,890	)		(19,766	)		(156,588	)
		Sub-total		12,144			103,520			90,103			23,426
	Other derivatives	Gain on transactions and valuation		2,084			14,396			11,522			30,166
		Loss on transactions and valuation		(2,109	)		(14,921	)		(11,950	)		(34,769	)
		Sub-total		(25	)		(525	)		(428	)		(4,603	)
		Total		65,385			(2,168	)		(10,388	)		(26,167	)
	Total			67,214			7,028			(10,729	)		370

- 69 -

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

	2017						2016
	Three months ended September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Gain (loss) on equity-linked securities
Loss on disposals of equity-linked securities		(27,988	)		(43,865	)		(12,698	)		(19,851	)
Gain (loss) on valuation of equity-linked securities		8,901			(60,813	)		(79,634	)		(26,641	)
Sub-total		(19,087	)		(104,678	)		(92,332	)		(46,492	)
Gain (loss) on other securities:
Gain (loss) on valuation of other securities		(4	)		(20	)		(35	)		355
Gain on other financial instruments:
Gain on valuation of other financial instruments		650			34			734			2,001
Total		(18,441	)		(104,664	)		(91,633	)		(44,136	)

38. GAINS (LOSSES) ON AFS FINANCIAL ASSETS

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

	2017						2016
	Three months ended September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Gains on redemption of securities		150			697			—			611
Gains on transaction of securities		48,753			165,015			12,204			49,105
Impairment losses on securities		(4,630	)		(17,267	)		(8,315	)		(16,944	)
Total		44,273			148,445			3,889			32,772

39. IMPAIRMENT LOSSES DUE TO CREDIT LOSS

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

	2017						2016
	Three months ended September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Impairment losses due to credit loss		(216,865	)		(550,841	)		(218,210	)		(722,768	)
Reversal of provision on (provision provided for) guarantee		2,223			47,191			(11,635	)		64,019
Reversal of provision on (provision provided for) loan commitment		(2,617	)		2,628			(10,254	)		(12,094	)
Total		(217,259	)		(501,022	)		(240,099	)		(670,843	)

- 70 -

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

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

			2017				2016
			Three months ended September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Employee benefits	Short term employee benefits	Salaries Employee benefits		334,986		989,177		319,946		954,288
				144,596		358,196		97,737		281,718
	Retirement benefit service costs			36,690		110,747		39,538		117,372
	Termination			298,780		304,257		359		93,150
	Sub-total			815,052		1,762,377		457,580		1,446,528
Depreciation and amortization				44,753		139,680		58,697		188,288
Other administrative expenses	Rent			77,971		234,679		77,103		233,016
	Taxes and dues		23,637		86,815		23,612		86,297
	Service charges		50,240		146,658		59,196		174,809
	Computer and IT related		18,998		49,475		17,695		59,511
	Telephone and communication		16,501		48,091		15,708		45,697
	Operating promotion		9,981		31,034		11,755		33,752
	Advertising		12,426		42,306		12,680		46,959
	Printing		1,877		6,114		2,041		7,054
	Traveling		3,688		9,712		2,690		7,723
	Supplies		1,624		4,741		1,507		4,649
	Insurance premium		2,193		6,362		2,001		5,600
	Reimbursement		5,657		14,834		5,528		14,564
	Maintenance		5,860		12,742		3,928		11,397
	Water, light, and heating		3,835		10,981		4,123		11,563
	Vehicle maintenance		2,519		7,483		2,526		7,219
	Others		11,813		32,968		8,860		27,156
	Sub-total			248,820		744,995		250,953		776,966
	Total			1,108,625		2,647,052		767,230		2,411,782

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

	2017					2016
	Three months ended September 30			Nine months ended September 30		Three months ended September 30			Nine months ended September 30
Gains on transaction of foreign exchange		623,165			2,322,152		942,888			3,578,188
Gains on disposal of loans and receivables		(907	)		200,953		28,073			201,538
Gains on transactions of derivatives		(3,961	)		7,695		(33,782	)		77,723
Gains on fair value hedged items		13,195			25,055		12,489			30,602
Others (*)		4,294			72,962		35,001			94,926
Total		635,786			2,628,817		984,669			3,982,977

(*) Other income includes such income amounting to 28,800 million Won and 69,920 million Won for the nine months ended September 30, 2017 and 2016, respectively, that the Group recognized for it is to receive from other creditor financial institutions in accordance with the creditor financial institutions committee agreement.

- 71 -

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

	2017					2016
	Three months ended September 30			Nine months ended September 30		Three months ended September 30			Nine months ended September 30
Losses on transaction of foreign exchange		579,896			1,954,660		803,365			3,395,558
KDIC deposit insurance fees		77,125			227,381		75,451			219,952
Contribution to miscellaneous funds		70,741			215,003		71,656			222,599
Losses on disposal of loans and receivables		7,574			7,602		2,481			2,486
Losses related to derivatives		8,637			39,768		12,764			31,778
Losses on fair value hedged items		(8,990	)		6,856		(36,437	)		82,263
Others (*)		27,544			103,098		24,299			137,494
Total		762,527			2,554,368		953,579			4,092,130

(*) Other expense includes such expenses amounting to 5,237 million Won and 98,023 million Won for the nine months ended September 30, 2017 and 2016, respectively, that the Group recognized for it is to carry out a payment to other creditor financial institutions in accordance with the creditor financial institutions committee agreement.

41. OTHER NON-OPERATING INCOME (EXPENSES)

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

	2017						2016
	Three months ended September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Gain on valuation		76,247			79,563			2,989			11,261
Loss on valuation		(6,577	)		(68,848	)		(12,836	)		(28,107	)
Impairment loss		—			(5,323	)		3,472			(1,173	)
Total		69,670			5,392			(6,375	)		(18,019	)

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

	2017						2016
	Three months ended September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Other non-operating incomes		19,894			97,079			26,915			88,884
Other non-operating expenses		(35,614	)		(102,801	)		(12,383	)		(100,690	)
Total		(15,720	)		(5,722	)		14,532			(11,806	)

- 72 -

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

	2017				2016
	Three months ended September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Rental fee income		2,025		5,725		1,460		5,193
Gains on disposal of investments in joint ventures and associates		308		33,194		51		1,250
Gains on disposal of premises and equipment, intangible assets and other assets		3,220		4,895		1,178		1,525
Reversal of impairment loss of premises and equipment, intangible assets and other assets		572		604		1,126		3,711
Others		13,769		52,661		23,100		77,205
Total		19,894		97,079		26,915		88,884

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

	2017				2016
	Three months ended September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Depreciation on investment properties		995		2,986		979		2,839
Interest expense of rent leasehold deposits		111		334		121		375
Losses on disposal of investment in joint ventures and associates		10,971		38,701		—		15,060
Losses on disposal of premises and equipment, intangible assets and other assets		7,966		8,574		724		6,611
Impairment losses of premises and equipment, intangible assets and other assets		109		269		1,060		1,403
Donation		9,356		24,336		2,405		36,322
Others		6,106		27,601		7,094		38,080
Total		35,614		102,801		12,383		100,690

- 73 -

42. INCOME TAX EXPENSE

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

	For the nine months ended September 30
	2017			2016
Current tax expense
Current tax expense in respect of the current period		419,793			164,644
Adjustments recognized in the current period in relation to the current tax of prior periods		(5,122	)		(22,132	)
Sub-total		414,671			142,512
Deferred tax expense
Deferred tax expense relating to the origination and reversal of temporary differences		(25,745	)		65,965
Deferred tax charged directly to equity		20,219			33,740
Sub-total		(5,526	)		99,705
Income tax expense		409,145			242,217

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

	For the nine months ended September 30
	2017			2016
Net income before income tax expense		1,801,586			1,359,396
Tax calculated at statutory tax rate (*)		435,522			328,512
Adjustments
Effect of income that is exempt from taxation		(45,268	)		(59,093	)
Effect of expense not deductible in determining taxable profit		20,409			10,761
Adjustments recognized in the current period in relation to the current tax of prior periods		(5,122	)		(22,132	)
Others		3,604			(15,831	)
Sub-total		(26,377	)		(86,295	)
Income tax expense		409,145			242,217
Effective tax rate		22.7	%		17.8	%

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

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

	September 30, 2017			December 31, 2016
Loss on valuation of AFS securities		(101,677	)		(113,161	)
Share of other comprehensive income of joint ventures and associates		(670	)		950
Foreign currency translation of foreign operations		31,156			16,930
Remeasurements gain related to defined benefit plan		47,393			51,661
Gain on valuation of cash flow hedge		398			—
Total		(23,400	)		(43,620	)

- 74 -

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 September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Net income attributable to common shareholders		280,146			1,378,507			355,649			1,105,915
Dividends on hybrid securities		(39,098	)		(129,921	)		(49,270	)		(149,506	)
Net income attributable to common shareholders		241,048			1,248,586			306,379			956,409
Weighted average number of common shares outstanding		673			673			673			673
Basic earnings per share (Unit: Korean Won)		358			1,855			455			1,421

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

44. CONTINGENT LIABILITIES AND COMMITMENTS

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

	September 30, 2017		December 31, 2016
Confirmed guarantees
Guarantee for loans		89,711		79,566
Acceptances		361,426		504,354
Guarantees in acceptances of imported goods		115,576		97,606
Other confirmed guarantees		6,543,730		7,588,661
Total		7,110,443		8,270,187
Unconfirmed guarantees
Local letter of credit		433,114		397,588
Letter of credit		3,743,451		3,844,345
Other unconfirmed guarantees		622,053		859,768
Total		4,798,618		5,101,701
Commercial paper purchase commitments and others		1,381,297		1,389,896

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

	September 30, 2017		December 31, 2016
Loan commitments		82,058,484		83,795,496
Other commitments		5,250,291		4,840,593

(3) Litigation case

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

	September 30, 2017				December 31, 2016
	As plaintiff		As defendant		As plaintiff		As defendant
Number of cases		70 cases		169 cases		88 cases		175 cases
Amount of litigation		425,211		322,496		308,848		246,465
Provisions for litigations				8,483				5,946

- 75 -

(4) Other

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

45. RELATED PARTY TRANSACTIONS

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

(1) Related parties

Related parties

Associates

Kumho Tires Co., Inc., Woori Blackstone Korea Opportunity Private Equity Fund No.1, Woori Service Networks Co., Ltd., Korea Credit Bureau Co., Ltd., Korea Finance Security Co., Ltd., Chin Hung International Inc., Poonglim Industrial Co., Ltd., STX Engine Co., Ltd, STX Corporation, Woori Columbus 1st Private Equity Fund, 2016KIF-IMM Woori Bank Technology Venture Fund, K BANK Co.,Ltd., Well to Sea No. 3 Private Equity Fund, and Others (Dongwoo C & C Co., Ltd. and other 20 associates)

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

Related party		A title of account	September 30, 2017			December 31, 2016
Corporation that have significant influence over the Group	KDIC (*1)	Loans		—			9
		Other assets		—			270,041
		Deposits due to customers		—			1,894,631
		Other liabilities		—			15,568
Associates	Kumho Tires Co., Inc.	Loans		219,217			299,523
		Allowance for credit loss		(42,843	)		(715	)
		Deposits due to customers		8,162			45,957
		Other liabilities		4,641			50
	Woori Blackstone Korea Opportunity Private Equity Fund No.1	Other assets		8			34
		Other liabilities		306			306
	Woori Service Networks Co., Ltd.	Loans		27			29
		Deposits due to customers		2,481			2,572
		Other liabilities		364			393
	Korea Credit Bureau Co., Ltd.	Loans		7			2
		Deposits due to customers		5,025			5,069
		Other liabilities		50			40
	Korea Finance Security Co., Ltd.	Loans		69			55
		Deposits due to customers		3,239			2,801
		Other liabilities		5			6
	Chin Hung International Inc.	Loans		105			4,320
		Allowance for credit loss		(12	)		(4,287	)
		Deposits due to customers		75,529			14,047
		Other liabilities		1,695			279

- 76 -

Related party		A title of account	September 30, 2017			December 31, 2016
Associates	Poonglim Industrial Co., Ltd.	Deposits due to customers		4			283
	STX Engine Co., Ltd.	Loans		115,376			107,974
		Allowance for credit loss		(97,182	)		(89,531	)
		Deposits due to customers		13,948			13,260
		Other liabilities		27			588
	Samho International Co., Ltd.(*2)	Loans		—			37,327
		Allowance for credit loss		—			(717	)
		Deposits due to customers		—			82,917
		Other liabilities		—			216
	STX Corporation	Loans		58,211			144,035
		Allowance for credit loss		(31,537	)		(92,643	)
		Deposits due to customers		13,754			14,412
		Other liabilities		62			90
	K BANK Co.,Ltd.	Loans		265			—
		Other assets		—			325
	Well to Sea No.3 Private Equity Fund (*3)	Loans		83,040			—
		Allowance for credit loss		(85	)		—
		Other liabilities		56			—
	Others (*4)	Loans		321			619
		Allowance for credit loss		(320	)		(253	)
		Other assets		2			8
		Deposits due to customers		3,695			4,460
		Other liabilities		73			60

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

(*2) As the Group sold its entire ownership interest of the entity, it is excluded from the investment in associates during the nine months ended September 30, 2017.

(*3) Due to capital contribution by the Group during the nine months ended September 30, 2017, the entity was included in the investment in associates.

(*4) Others include Saman Corporation, Kyesan Engineering Co., Ltd., Hyunwoo International Co., Ltd.,DAEA SNC Co., Ltd. and others as of September 30, 2017 and December 31, 2016.

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

			For the nine months ended September 30
Related party		A title of account	2017		2016
Corporation that has significant influence over the group	KDIC(*1)	Interest income		—		9,450
		Interest expenses		15,331		14,123
Associates	Kumho Tires Co., Inc.	Interest income		2,155		1,941
		Fees income		6		6
		Interest expenses		1		53
		Impairment losses due to credit loss		42,128		147
	Woori Blackstone Korea Opportunity Private Equity Fund No.1	Fees income		36		155
	Woori Service Networks Co., Ltd.	Other income		22		22
		Interest expenses		19		38
		Fees expenses		335		747
		Other expenses		307		165

- 77 -

			For the nine months ended September 30
Related party		A title of account	2017			2016
	Korea Credit Bureau Co., Ltd.	Interest expenses		60			108
		Fees expenses		1,023			1,313
Associates	Korea Finance Security Co., Ltd.	Interest expenses		8			7
		Fees expenses		—			82
	Chin Hung International Inc.	Interest income		364			190
		Fees income		1			1
		Interest expenses		18			20
		Reversal of impairment losses due to credit loss		(4,275	)		(964	)
	Poonglim Industrial Co., Ltd.	Interest expenses		—			2
		Reversal of impairment losses due to credit loss		—			(1,557	)
	STX Engine Co., Ltd.	Interest income		1,011			1,013
		Fees income		28			20
		Interest expenses		109			65
		Impairment losses due to credit loss		7,651			36,505
	Samho International Co., Ltd. (*2)	Interest income		486			687
		Fees income		5			5
		Interest expenses		334			370
		Reversal of impairment losses due to credit loss		(717	)		(545	)
	Force TEC Co., Ltd. (*3)	Interest income		—			153
	STX Corporation	Interest income		219			803
		Fees income		60			52
		Interest expenses		2			5
		Impairment losses due to credit loss (reversal)		(61,106	)		61,609
	Osung LST Co., Ltd. (*4)	Interest income		—			170
		Interest expenses		—			1
		Reversal of allowance for credit loss		—			(338	)
	Woori Columbus 1st Private Equity Fund	Fees income		—			308
	K BANK Co., Ltd. (*5)	Fees income		594			—
		Other income		1,051			—
	Well to Sea No.3 Private Equity Fund (*6)	Impairment losses due to credit loss		85			—
	Others (*7)	Interest expenses		10			12
		Impairment losses due to credit loss		67			277

- 78 -

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

(*2) As the Group sold its entire ownership interest of the entity, it is excluded from the investment in associates during the nine months ended September 30, 2017.

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

(*4) As the Group sold its ownership interests in the entities during the year ended December 31, 2016, these entities were excluded from the investment in associates.

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

(*6) Due to capital contribution by the Group during the nine months ended September 30, 2017, the entity was included in the investment in associates.

(*7) Others include Saman Corporation, Kyesan Engineering Co., Ltd., Hyunwoo International Co., Ltd., DAEA SNC Co., Ltd. and others as of September 30, 2017, and Saman Corporation, Kyesan Engineering Co., Ltd., Gachi Staff Co., Ltd., QTS Shipping Co., Ltd., and others were included as of December 31, 2016, respectively.

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

	September 30, 2017		December 31, 2016
KDIC(*1)		—		1,500,000	Loan commitment
Kumho Tires Co., Inc.		19,778		24,187	Letter of credit and others
		191,163		126,435	Loan commitment
Korea Finance Security Co., Ltd.		191		205	Loan commitment
Korea Credit Bureau Co., Ltd.		28		33	Loan commitment
Woori Service Networks Co., Ltd.		173		171	Loan commitment
Chin Hung International Inc.		32,194		40,904	Loan commitment
STX Engine Co., Ltd.		65,082		63,103	Letter of credit and others
		413		685	Loan commitment
SamHo Co., Ltd.(*2)		—		30,083	Loan commitment
STX corporation		19,323		24,316	Letter of credit and others
		—		71	Loan commitment
K BANK Co., Ltd.(*3)		72		—	Loan commitment
Well to Sea No.3 Private Equity Fund (*4)		226,960		—	Loan commitment

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

(*2) As the Group sold its entire ownership interest of the entities during the nine months ended September 30, 2017, they are excluded from the investment in associates.

(*3) Due to capital contribution by the Group during the nine months ended September 30, 2017, the entity was included in the investment in associates.

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

For the guarantee provided to the related parties, the Group recognized provisions for guarantees amounting to 69,862 million Won and 70,587 million Won, as of September 30, 2017 and December 31, 2016, respectively.

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

	For the nine months ended September 30
	2017		2016
Short term benefits		9,340		6,878
Severance payments		372		423
Total		9,712		7,301

- 79 -

Key management includes registered executives and non-registered executives. Outstanding assets and liabilities from transactions with key management amount to 1,200 million Won and 5,756 million Won, respectively, as of September 30, 2017. With respect to the assets, the Group has not recognized any allowance, nor provision.

46. TRUST ACCOUNTS

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

	Total assets				Operating income
	September 30, 2017		December 31, 2016		2017				2016
					Three months ended September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Trust accounts		44,093,154		38,807,666		268,593		684,909		166,663		592,852

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

	September 30, 2017		December 31, 2016
Receivables
Trust fees receivables		32,005		23,667
Payables
Deposits due to customers		633,642		1,919,324
Borrowings from trust accounts		2,593,050		2,687,776
Sub-total		3,226,692		4,607,100

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

	2017				2016
	Three months ended September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Revenue
Trust fees		40,130		105,337		23,558		56,835
Expense
Interest expenses on deposits due to customers		3,103		15,503		11,869		36,408
Interest expenses on borrowings from trust accounts		7,652		23,338		9,553		34,873
Sub-total		10,755		38,841		21,422		71,281

- 80 -

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

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

	September 30, 2017		December 31, 2016
Principal guaranteed trusts
Old-age pension trusts		4,221		4,513
Personal pension trusts		524,080		532,959
Pension trusts		775,390		741,759
Retirement trusts		50,690		53,773
New personal pension trusts		8,509		8,536
New old-age pension trusts		2,562		2,919
Sub-total		1,365,452		1,344,459
Principal and fixed rate of return guaranteed trusts
Development trusts		19		19
Unspecified money trusts		791		787
Sub-total		810		806
Total		1,366,262		1,345,265

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

	September 30, 2017		December 31, 2016
Liabilities for the account (subsidy for trust account adjustment)		24		30

47. PROMOTING PRIVATIZATION PLAN

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

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

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

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

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

- 81 -

In addition, on August 22, 2016, PFOC announced a plan to sell about 30% shares out of 51.06% shares held by KDIC to multiple investors, ranging from 4 to 8% ownership each. Pursuant to the plan, the KDIC commenced the bidding to dispose of its shares by putting up a public notice of sale on August 24, 2016. As of September 23, 2016, KDIC received letters of intent from eighteen potential investors, with an intent to hold shares ranging from 82% to 119%. As a result of the bid, eight potential investors submitted bid letters for total of 33.7% shares. On November 13, PFOC announced that seven selected buyers acquired total of 29.7% shares of the Group. Upon successful privatization of the Bank, PFOC, in an effort to ensure autonomous management of the private sector (i.e., oligopolistic shareholders), released the Bank from the MOU on December 16, 2016.

By the way, for the nine months ended September 30, 2017, as 2.85% of call options was exercised out of total 2.97% call options granted to the selected buyers when selling the non-controlling interest, KDIC’s remaining ownership interest became 18.52%. In consideration with the benefits from privatization and the retrieval of public fund, the government will hold a discussion with PFOC on its plan to sell the remaining shares of the Bank held by KDIC in the near future.

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

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

- 82 -

EX-99.2

Exhibit 99.2

WOORI BANK

SEPARATE INTERIM FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2017 AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 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 November 13, 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 September 30, 2017, the related separate interim statements of comprehensive income for the three and nine months ended September 30, 2017 and 2016, respectively, the related separate statements of changes in shareholders’ equity and cash flows, all expressed in Korean Won, for the nine months ended September 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.

November 13, 2017

Notice to Readers

This report is effective as of November 13, 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 SEPTEMBER 30, 2017

AND FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 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 SEPTEMBER 30, 2017 AND DECEMBER 31, 2016

	September 30, 2017		December 31, 2016
	(Korean Won in millions)
ASSETS
Cash and cash equivalents (Notes 6 and 45)		5,050,978		6,104,029
Financial assets at fair value through profit or loss (Notes 4, 7, 11, 12, 18 and 26)		3,014,346		4,076,872
Available-for-sale financial assets (Notes 4, 8, 11, 12 and 18)		17,482,663		18,105,862
Held-to-maturity financial assets (Notes 4, 9, 11, 12 and 18)		16,216,094		13,792,266
Loans and receivables (Notes 4, 10, 11, 12, 18 and 45)		248,183,210		241,508,048
Investments in subsidiaries and associates (Note 13)		4,211,863		3,779,169
Investment properties (Note 14)		344,335		348,393
Premises and equipment (Note 15)		2,380,564		2,342,280
Intangible assets (Note 16)		296,891		242,230
Assets held for sale (Note 17)		1,979		2,342
Deferred tax assets		195,913		162,211
Derivative assets (Notes 4,11, 12 and 26)		109,385		140,577
Net defined benefit assets (Note 24)		5,934		70,938
Other assets (Notes 19 and 45)		183,469		96,926
Total assets		297,677,624		290,772,143
LIABILITIES
Financial liabilities at fair value through profit or loss (Notes 4, 11, 12, 20 and 26)		2,456,670		3,793,479
Deposits due to customers (Notes 4, 11, 21 and 45)		215,888,152		211,382,380
Borrowings (Notes 4, 11, 12 and 22)		15,204,833		16,060,821
Debentures (Notes 4, 11 and 22)		21,255,612		18,166,057
Provisions (Notes 23 and 44)		357,000		380,473
Current tax liabilities		238,134		148,672
Derivative liabilities (Notes 4, 11,12 and 26)		23,345		7,221
Other financial liabilities (Notes 4, 11, 12, 25 and 45)		22,298,777		20,827,284
Other liabilities (Notes 25 and 45)		170,049		153,238
Total liabilities		277,892,572		270,919,625

(Continued)

WOORI BANK

SEPARATE INTERIM STATEMENTS OF FINANCIAL POSITION

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

	September 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)		(102,193	)		138,542
Retained earnings (Notes 31 and 32)
(Regulatory reserve for credit loss as of September 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 as of September 30, 2017 and December 31, 2016 is 25,104 million Won and 136,895 million Won, respectively
Planned provision of regulatory reserve for credit loss as of September 30, 2017 and December 31, 2016 is 25,104 million Won and 136,895 million Won, respectively)		13,218,432			12,488,155
Total equity		19,785,052			19,852,518
Total liabilities and equity		297,677,624			290,772,143

See accompanying notes

WOORI BANK

SEPARATE INTERIM STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS AND THE NINE MONTHS ENDED

SEPTEMBER 30, 2017 AND 2016

	Korean Won
	2017						2016
	Three months ended September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
	(In millions, except for income per share data)
Interest income		1,881,273			5,482,056			1,831,108			5,566,767
Interest expense		747,565			2,216,690			773,201			2,392,721
Net interest income (Notes 34 and 45)		1,133,708			3,265,366			1,057,907			3,174,046
Fees and commissions income		279,128			808,305			251,970			749,481
Fees and commissions expense		38,302			101,629			34,378			109,567
Net fees and commissions income (Notes 35 and 45)		240,826			706,676			217,592			639,914
Dividend income (Note 36)		48,444			110,180			16,595			176,184
Net gain(loss) on financial instruments at fair value through profit or loss (Note 37)		42,805			(94,788	)		(98,640	)		(54,867	)
Net gain on available-for-sale financial assets (Note 38)		47,211			137,449			25,905			57,061
Impairment losses due to credit loss (Notes 39 and 45)		(156,786	)		(336,690	)		(215,862	)		(540,504	)
General and administrative expenses (Notes 40 and 45)		(1,001,984	)		(2,352,496	)		(683,448	)		(2,159,408	)
Other net operating income (expenses) (Notes 40 and 45)		(121,657	)		95,210			32,872			(144,052	)
Operating income		232,567			1,530,907			352,921			1,148,374
Share of losses of subsidiaries and associates (Note 13)		(9,635	)		(47,182	)		(3,690	)		(10,543	)
Other net non-operating income		22,462			59,133			28,129			46,937
Non-operating income (Note 41)		12,827			11,951			24,439			36,394
Net income before income tax expense		245,394			1,542,858			377,360			1,184,768
Income tax expense (Note 42)		52,986			346,024			83,521			219,688
Net income
(Net income after the provision of regulatory reserve for credit loss for the three months ended September 30, 2017 and 2016 is 156,498 million Won and 321,164 million Won, respectively, and net income after the provision of regulatory reserve for credit loss for the nine months ended September 30, 2017 and 2016 is 1,171,730 million Won and 1,010,274 million Won, respectively,) (Note 32)		192,408			1,196,834			293,839			965,080

(Continued)

WOORI BANK

SEPARATE INTERIM STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS AND THE NINE MONTHS ENDED

SEPTEMBER 30, 2017 AND 2016 (CONTINUED)

	Korean Won
	2017						2016
	Three months ended September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
	(In millions, except for income per share data)
Remeasurement gain (loss) related to defined benefit plan		21,817			12,868			(7,378	)		(52,105	)
Items that will not be reclassified to profit or loss		21,817			12,868			(7,378	)		(52,105	)
Gain (loss) on valuation of available-for-sale financial assets		(16,426	)		(32,644	)		(23,475	)		19,174
Gain (loss) on foreign currency translation of foreign operations		1,712			(12,801	)		(18,121	)		(18,313	)
Items that may be reclassified to profit or loss		(14,714	)		(45,445	)		(41,596	)		861
Other comprehensive loss, net of tax		7,103			(32,577	)		(48,974	)		(51,244	)
Total comprehensive income		199,511			1,164,257			244,865			913,836
Net income per share (Note 43)
Basic and diluted earnings per common share		228			1,585			363			1,212

See accompanying notes

WOORI BANK

SEPARATE INTERIM STATEMENTS OF CHANGES IN EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 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		—		—			—		—			965,080			965,080
Dividends on common stock		—		—			—		—			(168,317	)		(168,317	)
Gain on valuation of available-for-sale financial assets		—		—			—		19,174			—			19,174
Loss on foreign currency translation of foreign operations		—		—			—		(18,313	)		—			(18,313	)
Remeasurement loss related to defined benefit plan		—		—			—		(52,105	)		—			(52,105	)
Dividends to hybrid securities		—		—			—		—			(149,506	)		(149,506	)
Issuance of hybrid securities		—		549,905			—		—			—			549,905
September 30, 2016		3,381,392		3,883,907			269,533		54,772			12,445,632			20,035,236
January 1, 2017		3,381,392		3,574,896			269,533		138,542			12,488,155			19,852,518
Net income		—		—			—		—			1,196,834			1,196,834
Dividends on common stock		—		—			—		—			(336,636	)		(336,636	)
Loss on valuation of available-for-sale financial assets		—		—			—		(32,644	)		—			(32,644	)
Loss on foreign currency translation of foreign operations		—		—			—		(12,801	)		—			(12,801	)
Remeasurement gain related to defined benefit plan		—		—			—		12,868			—			12,868
Dividends to hybrid securities		—		—			—		—			(129,921	)		(129,921	)
Issuance of hybrid securities		—		559,565			—		—			—			559,565
Redemption of hybrid securities		—		(1,116,573	)		—		(208,158	)		—			(1,324,731	)
September 30, 2017		3,381,392		3,017,888			269,533		(102,193	)		13,218,432			19,785,052

See accompanying notes

WOORI BANK

SEPARATE INTERIM STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016

	For the nine months ended September 30
	2017			2016
	(Korean Won in millions)
Cash flows from operating activities:
Net income		1,196,834			965,080
Adjustment to net income:
Income tax expense		346,024			219,688
Interest income		(5,482,056	)		(5,566,767	)
Interest expense		2,216,690			2,392,721
Dividend income		(137,690	)		(206,892	)
		(3,057,032	)		(3,161,250	)
Additions of expenses not involving cash outflows:
Impairment losses due to credit loss		336,690			540,504
Impairment loss on investments in subsidiaries and associates		47,182			10,543
Loss on transaction and valuation of derivatives instruments (hedging)		22,539			31,778
Loss on hedged items (fair value hedge)		6,856			82,263
Provisions		10,889			10,600
Retirement benefits		98,527			105,889
Depreciation and amortization		124,707			130,373
Loss on disposal of premises and equipment and other assets		1,156			6,548
Impairment loss on premises and equipment and other assets		153			211
		648,699			918,709
Deductions of revenues not involving cash inflows:
Gain on valuation of financial instruments at fair value through profit or loss		70,265			182,715
Gain on available-for-sale financial assets		137,449			57,061
Gain on transaction and valuation of derivatives instruments (hedging)		7,038			77,723
Gain on hedged items (fair value hedge)		25,055			30,602
Reversal of provisions		1,779			864
Gain on disposal of investment in subsidiaries and associates		9,232			3,679
Gain on disposal of premises and equipment and other assets		12,713			1,227
Reversal of impairment loss on premises and equipment and other assets		88			480
		263,619			354,351

(Continued)

WOORI BANK

SEPARATE INTERIM STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016 (CONTINUED)

	For the nine months ended September 30
	2017			2016
	(Korean Won in millions)
Changes in operating assets and liabilities:
Financial instruments at fair value through profit or loss		(204,017	)		(73,091	)
Loans and receivables		(6,929,960	)		(15,197,803	)
Other assets		(86,912	)		(67,423	)
Deposits due to customers		4,508,409			10,724,475
Provision		10,144			(73,398	)
Net defined benefit liability		(16,510	)		(213,544	)
Other financial liabilities		1,562,611			9,328,715
Other liabilities		8,940			16,104
		(1,147,295	)		4,444,035
Cash received from (paid for) operating activities:
Interest income received		5,531,811			5,580,747
Interest expense paid		(2,232,723	)		(2,319,850	)
Dividend received		134,045			205,460
Income tax paid		(281,194	)		(135,293	)
Net cash provided by operating activities		529,526			6,143,287
Cash flows from investing activities:
Cash inflows from investing activities:
Disposal of available-for-sale financial assets		16,206,321			14,997,100
Redemption of held-to-maturity financial assets		6,772,192			5,958,431
Disposal of investments in subsidiaries and associates		32,876			52,891
Disposal of premises and equipment		6,194			237
Disposal of intangible assets		383			837
Disposal of assets held for sale		14,914			13,876
		23,032,880			21,023,372
Cash outflows from investing activities:
Acquisition of available-for-sale financial assets		15,519,965			16,194,628
Acquisition of held-to-maturity financial assets		9,242,169			6,224,158
Acquisition of investments in subsidiaries and associates		454,332			46,940
Acquisition of investment properties		2,647			—
Acquisition of premises and equipment		110,916			70,353
Acquisition of intangible assets		148,862			102,575
		25,478,891			22,638,654
Net cash used in investing activities		(2,446,011	)		(1,615,282	)

(Continued)

WOORI BANK

SEPARATE INTERIM STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016 (CONTINUED)

	For the nine months ended September 30
	2017			2016
	(Korean Won in millions)
Cash flows from financing activities:
Cash inflows from financing activities:
Increase in borrowings		9,229,323			4,636,750
Issuance of debentures		6,936,910			4,735,270
Issuance of hybrid securities		559,565			549,905
		16,725,798			9,921,925
Cash outflows from financing activities:
Repayment of borrowings		10,085,689			8,342,021
Repayment of debentures		3,847,036			3,893,090
Dividends paid		336,636			168,317
Redemption of hybrid securities		1,323,400			—
Dividends paid on hybrid securities		131,423			125,947
		15,724,184			12,529,375
Net cash provided by (used in) financing activities		1,001,614			(2,607,450	)
Net increase (decrease) in cash and cash equivalents		(914,871	)		1,920,555
Cash and cash equivalents, beginning of the period		6,104,029			5,440,326
Effects of exchange rate changes on cash and cash equivalents		(138,180	)		(39,684	)
Cash and cash equivalents, end of the period		5,050,978			7,321,197

See accompanying notes

WOORI BANK

NOTES TO SEPARATE INTERIM FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2017 AND FOR THE THREE MONTHS AND THE NINE MONTHS

ENDED SEPTEMBER 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 September 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 nine months ended September 30, 2017, KDIC sold additional 33 million shares. As of September 30, 2017 and December 31, 2016, KDIC held 125 million shares and 158 million shares (18.52% 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 875 branches and offices in Korea, and 23 branches and offices overseas as of September 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 June 30, 2017 based on the present situation as of September 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.

- 2 -

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

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

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

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

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

(*2) For the equity securities which 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 247,306,721 million Won and held-to-maturity financial assets amounting to 15,059,372 million Won as of June 30, 2017 as amortized cost, and among theses, 24,585 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 June 30, 2017, 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 24,585 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 12,191,265 million Won as of June 30, 2017.

Based on the result of the preliminary effect evaluation, if K-IFRS 1109 adopts to the above AFS financial assets as of June 30, 2017, they almost can be classified to financial assets measured at FVOCI. However, for beneficiary certificates amounting to 4,685,463 million Won, other equity investment amounting to 287,454 million Won and debt securities amounting to 109,873 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 985,737 million Won as of June 30, 2017.

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

- 3 -

One major change from K-IFRS 1039 relates to the presentation of changes in the fair value of a financial liability designated as at FVTPL attributable to changes in the credit risk of that liability. Under K-IFRS 1109, such changes are presented in other comprehensive income, unless the presentation of the effect of the change in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. In accordance with K-IFRS 1039, the Bank holds financial liabilities designated as at FVTPL 616,177 million Won as of June 30, 2017.

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 15,893 million Won as of June, 2017.

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 will increase by 192, 517 million Won and the total amount of the allowance for credit losses is expected to be 1,893,070 million Won as of June 30, 2017. The details of credit losses are as follows (Unit: Korean Won in millions):

		June 30, 2017		Allowance for credit losses (K-IFRS 1109)
Loans and receivables	Stage 1		252,179,900		487,314
	Stage 2		10,352,672		390,126
	Stage 3		1,741,979		758,426
Provisions	Stage 1		63,874,377		85,504
	Stage 2		736,434		30,238
	Stage 3		289,873		141,462

The BIS is expected to be 15.33% which increased by 0.04% as of June 30, 2017. The result of preliminary effect evaluation can be changed according to the additional available information for the future and the relevant decision making.

- 4 -

Phase 3: Hedge accounting

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

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

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

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

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

Annual Improvements to K-IFRS 2014-2016 Cycle

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

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

3. SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS

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

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

- 5 -

4. RISK MANAGEMENT

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

The Bank’s risk management procedure is set for improvement in the quality of assets held and investments by making a decision about how to avoid or mitigate risks through the identification of the cause of the potential risks and their impacts.

The Bank takes approaches to minimize risks and maximize profits by managing risks acceptable to the Bank and eliminating excessive risks of financial instruments. For these approaches, the following procedures are performed: risk recognition, measurement and assessment, control, and monitoring and reporting.

The risk is managed by the risk management department based on the Bank’s risk management policy. The Risk Management Committee of the Bank makes the decision on the risk management strategy such as the avoidance of concentration of risk and establishment of acceptable level of risks.

(1) Credit risk

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

1) Credit risk management

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

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

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

2) Maximum exposure to credit risk

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

- 6 -

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

		September 30, 2017		December 31, 2016
Loans and receivables	Korean treasury and government agencies		12,841,334		15,815,135
	Banks		22,147,278		17,826,219
	Corporates		85,043,686		83,529,250
	Consumers		128,150,912		124,337,444
	Sub-total		248,183,210		241,508,048
Financial assets at FVTPL	Gold banking assets		26,305		26,180
	Debt securities held for trading		1,150,515		1,140,928
	Derivative assets		1,835,347		2,880,543
	Sub-total		3,012,167		4,047,651
AFS financial assets	AFS debt securities		12,111,572		11,572,916
HTM financial assets	HTM debt securities		16,216,094		13,792,266
Derivative assets	Derivative assets (hedging)		109,385		140,577
Off-balance accounts	Guarantees		13,909,308		14,953,197
	Loan commitments		51,610,323		56,313,804
	Sub-total		65,519,631		71,267,001
	Total		345,152,059		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):

	September 30, 2017
	Korea		USA		UK		Japan		Others (*)		Total
Loans and receivables		240,171,275		1,099,878		1,101,804		451,636		5,358,617		248,183,210
Financial assets at FVTPL		2,848,223		—		121,675		94		42,175		3,012,167
AFS debt securities		11,919,142		—		—		—		192,430		12,111,572
HTM securities		16,182,448		—		—		—		33,646		16,216,094
Derivative assets		29,136		—		80,249		—		—		109,385
Off-balance accounts		64,658,082		122,803		72,917		37,412		628,417		65,519,631
Total		335,808,306		1,222,681		1,376,645		489,142		6,255,285		345,152,059
	December 31, 2016
	Korea		USA		UK		Japan		Others (*)		Total
Loans and receivables		232,571,489		1,131,617		895,874		323,470		6,585,598		241,508,048
Financial assets at FVTPL		3,686,286		—		261,547		81		99,737		4,047,651
AFS debt securities		11,506,682		—		—		—		66,234		11,572,916
HTM securities		13,758,863		—		—		—		33,403		13,792,266
Derivative assets		74,166		—		66,342		—		69		140,577
Off-balance accounts		70,079,004		76,694		80,831		23,250		1,007,222		71,267,001
Total		331,676,490		1,208,311		1,304,594		346,801		7,792,263		342,328,459

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

- 7 -

b) Credit risk exposure by industries

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

	September 30, 2017
	Service		Manufacturing		Finance and insurance		Construction		Individuals		Others		Total
Loans and receivables		46,258,171		33,682,423		36,997,958		3,127,512		121,916,668		6,200,478		248,183,210
Financial assets at FVTPL		57,709		112,460		2,608,941		5,377		2,939		224,741		3,012,167
AFS debt securities		742,815		—		6,907,192		113,864		—		4,347,701		12,111,572
HTM securities		1,358,687		—		10,283,784		285,628		—		4,287,995		16,216,094
Derivative assets		—		—		109,385		—		—		—		109,385
Off-balance accounts		13,875,535		24,264,979		8,733,145		3,601,831		10,298,133		4,746,008		65,519,631
Total		62,292,917		58,059,862		65,640,405		7,134,212		132,217,740		19,806,923		345,152,059
	December 31, 2016
	Service		Manufacturing		Finance and insurance		Construction		Individuals		Others		Total
Loans and receivables		44,851,563		34,465,760		34,641,443		3,177,968		118,412,745		5,958,569		241,508,048
Financial assets at FVTPL		59,472		356,305		3,331,108		23,812		993		275,961		4,047,651
AFS debt securities		1,069,084		—		8,128,709		53,232		—		2,321,891		11,572,916
HTM securities		1,673,971		—		8,192,802		251,599		—		3,673,894		13,792,266
Derivative assets		—		—		140,577		—		—		—		140,577
Off-balance accounts		15,949,042		27,446,354		9,065,002		4,358,268		9,759,416		4,688,919		71,267,001
Total		63,603,132		62,268,419		63,499,641		7,864,879		128,173,154		16,919,234		342,328,459

- 8 -

3) Credit risk of loans and receivables

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

	September 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		12,844,581		22,161,636		47,060,126		32,610,537		5,091,248		84,761,911		127,367,072		247,135,200
Loans overdue but not impaired		—		—		15,348		82,420		1,060		98,828		676,825		775,653
Impaired loans		—		—		1,107,078		291,168		38,948		1,437,194		342,658		1,779,852
Total		12,844,581		22,161,636		48,182,552		32,984,125		5,131,256		86,297,933		128,386,555		249,690,705
Allowance for loan losses		3,247		14,358		887,832		334,972		31,443		1,254,247		235,643		1,507,495
Total, net		12,841,334		22,147,278		47,294,720		32,649,153		5,099,813		85,043,686		128,150,912		248,183,210

	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):

	September 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)		12,841,334		22,147,278		40,227,995		21,173,427		4,106,686		65,508,108		124,384,688		224,881,408
Lower grade (*2)		—		—		6,480,613		11,257,485		957,541		18,695,639		2,903,673		21,599,312
Total		12,841,334		22,147,278		46,708,608		32,430,912		5,064,227		84,203,747		127,288,361		246,480,720
Value of collateral(*3)		—		477,517		18,718,567		26,294,266		2,808,414		47,821,247		105,818,495		154,117,259

- 9 -

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

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

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

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

Allowances for credit losses, for loans and receivables neither overdue nor impaired, amounting to 654,480 million Won and 708,732 million Won as of September 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):

	September 30, 2017
Overdue	Korean treasury and government agencies		Banks		Corporates								Consumers		Total
					General business		Small and medium sized enterprise		Project financing and others		Sub-total
Less than 30 days		—		—		12,295		46,545		—		58,840		535,347		594,187
30~59 days		—		—		751		15,145		—		15,896		74,128		90,024
60~89 days		—		—		929		11,356		1,049		13,334		43,017		56,351
Total		—		—		13,975		73,046		1,049		88,070		652,492		740,562
Value of collateral (*)		—		—		11,232		59,447		1,060		71,739		581,887		653,626

	December 31, 2016
Overdue	Korean treasury and government agencies		Banks		Corporates								Consumers		Total
					General business		Small and medium sized enterprise		Project financing and others		Sub-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 35,091 million Won and 28,796 million Won as of September 30, 2017 and December 31, 2016, respectively, which are deducted from the loans and receivables above.

- 10 -

c) Individually impaired loans and receivables

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

	September 30, 2017
	Korean treasury and government agencies		Banks		Corporates								Consumers		Total
					General business		Small and medium sized enterprise		Project financing and others		Sub-total
Impaired loans		—		—		572,137		145,195		34,537		751,869		210,059		961,928
Value of collateral (*)		—		—		481,236		158,686		11,268		651,190		206,177		857,367

	December 31, 2016
	Korean treasury and government agencies		Banks		Corporates								Consumers		Total
					General business		Small and medium sized enterprise		Project financing and others		Sub-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 817,924 million Won and 1,056,433 million Won as of September 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):

	September 30, 2017
	Held for trading		AFS securities		HTM securities		Total
AAA		1,150,515		9,771,020		15,539,139		26,460,674
AA- ~ AA+		—		2,145,724		676,955		2,822,679
BBB- ~ A+		—		194,828		—		194,828
Total		1,150,515		12,111,572		16,216,094		29,478,181

	December 31, 2016
	Held for trading		AFS securities		HTM securities		Total
AAA		1,140,928		9,908,516		13,342,384		24,391,828
AA- ~ AA+		—		1,477,709		449,882		1,927,591
BBB- ~ A+		—		186,691		—		186,691
Total		1,140,928		11,572,916		13,792,266		26,506,110

- 11 -

(2) Market risk

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

1) Market risk management

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

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

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

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

At the beginning of each year, the Risk Management Committee establishes the VaR limit, loss limit and risk capital limit for its management purposes. Limit by investment desk/dealer is independently managed to the extent of the limit given to each departments of the Bank and the limit by investment and loss cut is managed by risk management personnel within the department.

2) Sensitivity analysis of market risk

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

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

For the non-trading activities, the interest rate risk is managed and measured based on the analysis of the Net Interest Income (“NII”) and Net Portfolio 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 nine months ended September 30, 2017 and the year ended December 31, 2016, respectively, and the VaR as of September 30, 2017 and December 31, 2016, respectively, are as follows (Unit: Korean Won in millions):

	As of September 30, 2017			For the nine months ended September 30, 2017									As of December 31, 2016			For the year ended December 31, 2016
Risk factor				Average			Maximum			Minimum						Average			Maximum			Minimum
Interest rate		3,647			3,806			4,918			2,467			3,250			2,844			6,430			1,367
Stock price		2,656			2,756			4,419			1,192			4,191			3,456			5,063			2,304
Foreign currencies		6,636			4,927			6,636			4,061			4,396			4,914			7,686			3,967
Commodity		8			39			188			4			152			113			325			21
Diversification		(5,135	)		(4,370	)		(6,798	)		(2,097	)		(5,630	)		(5,355	)		(10,385	)		(4,034	)
Total VaR		7,812			7,158			9,363			5,627			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):

Name of scenario	September 30, 2017				December 31, 2016
	NII		NPV		NII		NPV
Base case		4,559,653		21,621,542		4,388,019		21,582,242
Base case (Prepay)		4,562,952		21,270,422		4,405,391		20,692,036
IR 100bp up		4,985,019		20,975,173		4,835,013		20,919,129
IR 100bp down		4,080,515		22,330,017		3,918,645		22,304,777
IR 200bp up		5,410,464		20,397,354		5,282,061		20,315,402
IR 200bp down		3,160,510		23,076,597		2,985,778		23,078,379
IR 300bp up		5,835,907		19,887,514		5,729,108		19,768,300
IR 300bp down		2,071,169		25,194,379		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):

		September 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		138,339,996		38,153,150		8,986,185		7,038,065		55,528,473		39,073,722		287,119,591
	AFS financial assets		3,523,590		1,867,114		2,981,294		2,603,187		4,835,254		664,583		16,475,022
	HTM financial assets		1,971,150		1,563,189		1,856,937		1,428,804		9,640,458		322,859		16,783,397
	Total		143,834,736		41,583,453		13,824,416		11,070,056		70,004,185		40,061,164		320,378,010
Liability	Deposits due to customers		98,637,858		35,895,411		30,610,579		14,977,529		36,931,267		20,080		217,072,724
	Borrowings		10,514,862		1,034,958		384,534		340,858		2,631,945		458,725		15,365,882
	Debentures		1,135,328		1,572,155		2,060,287		666,354		14,370,517		3,040,856		22,845,497
	Total		110,288,048		38,502,524		33,055,400		15,984,741		53,933,729		3,519,661		255,284,103

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

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

		September 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		19,964		22,893,027		117,615		1,200,172		1,401		241,459		1,381		1,866,061		2,255,712		28,456,431
	Financial assets at FVTPL		38		43,101		31		316		—		—		40		53,467		100,593		197,477
	AFS financial assets		1,358		1,557,499		—		—		—		—		—		623		63,328		1,621,450
	HTM financial assets		51		58,541		—		—		—		—		—		—		33,646		92,187
	Total		21,411		24,552,168		117,646		1,200,488		1,401		241,459		1,421		1,920,151		2,453,279		30,367,545
Liability	Financial liabilities at FVTPL		53		60,773		89		907		—		—		103		138,974		166,648		367,302
	Deposits due to customer		8,798		10,088,206		145,160		1,481,247		904		155,854		491		662,876		607,469		12,995,652
	Borrowings		6,981		8,005,176		2,485		25,359		19		3,285		375		506,665		187,420		8,727,905
	Debentures		2,979		3,415,538		—		—		700		120,645		—		—		206,040		3,742,223
	Other financial liabilities		3,804		4,361,801		26,471		270,111		3,085		531,755		214		288,676		357,600		5,809,943
	Total		22,615		25,931,494		174,205		1,777,624		4,708		811,539		1,183		1,597,191		1,525,177		31,643,025
	Off-balance accounts		7,316		8,388,877		33,975		346,686		875		150,786		358		484,208		379,526		9,750,083

		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):

	September 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		349,409		—		164,647		—		—		—		514,056
Deposits due to customers		137,697,396		29,641,598		24,377,840		18,669,929		7,089,363		773,687		218,249,813
Borrowings		6,122,133		2,486,580		1,126,915		1,536,930		3,747,733		458,302		15,478,593
Debentures		1,135,223		1,571,467		2,060,805		647,493		14,370,888		3,040,865		22,826,741
Other financial liabilities		15,653,304		—		—		—		—		2,792,398		18,445,702
Total		160,957,465		33,699,645		27,730,207		20,854,352		25,207,984		7,065,252		275,514,905

	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):

	September 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		349,409		—		164,647		—		—		—		514,056
Deposits due to customers		149,645,315		30,828,939		19,788,771		11,269,978		6,078,430		254,271		217,865,704
Borrowings		6,122,133		2,486,580		1,126,915		1,536,930		3,747,733		458,302		15,478,593
Debentures		1,135,223		1,571,467		2,060,805		647,493		14,370,888		3,040,865		22,826,741
Other financial liabilities		15,653,304		—		—		—		—		2,792,398		18,445,702
Total		172,905,384		34,886,986		23,141,138		13,454,401		24,197,051		6,545,836		275,130,796

	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 September 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
September 30, 2017		2,001,005		—		—		—		10,333		—		2,011,338
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):

	September 30, 2017		December 31, 2016
Guarantees		13,909,308		14,953,197
Loan commitments		51,610,323		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 September 30, 2017 and December 31, 2016.

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

	September 30, 2017			December 31, 2016
Tier 1 capital		16,447,709			15,714,480
Other Tier 1 capital		3,034,556			3,275,496
Tier 2 capital		3,458,324			3,910,513
Total risk-adjusted capital		22,940,589			22,900,489
Risk-weighted assets for credit risk		138,781,075			138,018,500
Risk-weighted assets for market risk		2,497,170			2,277,809
Risk-weighted assets for operational risk		9,676,775			9,431,814
Total risk-weighted assets		150,955,020			149,728,123
Common Equity Tier 1 ratio		10.90	%		10.50	%
Tier 1 capital ratio		12.91	%		12.68	%
Total capital ratio		15.20	%		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 retail and individual consumers, etc.

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

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

• Capital market: Fund management, investment 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):

	September 30, 2017
	Consumer banking		Corporate banking		Investment banking		Capital market		Headquarters and others		Sub-total		Adjustment		Total
Assets		107,890,261		105,315,489		6,194,121		11,341,530		66,347,988		297,089,389		588,235		297,677,624
Liabilities		74,336,238		154,285,396		55,651		10,186,345		37,036,027		275,899,657		1,992,915		277,892,572
	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 nine months ended September 30, 2017
	Consumer banking			Corporate banking			Investment banking			Capital Market			Headquarters and others			Sub-total			Adjustments			Total
Net interest income
Interest income		2,332,134			2,196,051			108,570			14,328			593,056			5,244,139			237,917			5,482,056
Interest expense		(717,709	)		(1,238,742	)		(186	)		—			(459,999	)		(2,416,636	)		199,946			(2,216,690	)
Inter-segment		(379,017	)		358,953			(100,697	)		11,402			109,359			—			—			—
		1,235,408			1,316,262			7,687			25,730			242,416			2,827,503			437,863			3,265,366
Net non-interest income
Non-interest income		598,446			503,820			272,024			6,155,339			1,225,616			8,755,245			133,408			8,888,653
Non-interest expense		(182,815	)		(104,265	)		(152,512	)		(6,125,701	)		(999,431	)		(7,564,724	)		(550,266	)		(8,114,990	)
Inter-segment		73,469			44,857			—			—			(118,326	)		—			—			—
		489,100			444,412			119,512			29,638			107,859			1,190,521			(416,858	)		773,663
Other income (expense)
General and administrative expense		(1,337,679	)		(618,969	)		(8,434	)		(11,309	)		(376,105	)		(2,352,496	)		—			(2,352,496	)
Impairment losses due to credit loss and others		(70,180	)		(240,903	)		15,005			20,356			141,101			(134,621	)		(21,005	)		(155,626	)
		(1,407,859	)		(859,872	)		6,571			9,047			(235,004	)		(2,487,117	)		(21,005	)		(2,508,122	)
Operating income		316,649			900,802			133,770			64,415			115,271			1,530,907			—			1,530,907
Non-operating income (loss)		3,304			(3,097	)		32,832			—			(21,088	)		11,951			—			11,951
Net income before income tax expense		319,953			897,705			166,602			64,415			94,183			1,542,858			—			1,542,858
Income tax expense		(77,429	)		(204,541	)		(40,318	)		(15,588	)		(8,148	)		(346,024	)		—			(346,024	)
Net income		242,524			693,164			126,284			48,827			86,035			1,196,834			—			1,196,834

	For the nine months ended September 30, 2016
	Consumer banking			Corporate banking			Investment banking			Capital Market			Headquarters and others			Sub-total			Adjustments			Total
Net interest income
Interest income		2,228,511			2,293,660			114,282			14,666			694,792			5,345,911			220,856			5,566,767
Interest expense		(772,242	)		(1,349,208	)		(156	)		(227	)		(487,478	)		(2,609,311	)		216,590			(2,392,721	)
Inter-segment		(367,470	)		354,208			(104,388	)		24,648			93,002			—			—			—
		1,088,799			1,298,660			9,738			39,087			300,316			2,736,600			437,446			3,174,046
Net non-interest income
Non-interest income		682,013			399,706			421,359			6,935,357			2,458,504			10,896,939			82,607			10,979,546
Non-interest expense		(286,919	)		(20,284	)		(302,723	)		(6,923,656	)		(2,383,930	)		(9,917,512	)		(535,492	)		(10,453,004	)
Inter-segment		25,747			34,649			—			—			(60,396	)		—			—			—
		420,841			414,071			118,636			11,701			14,178			979,427			(452,885	)		526,542
Other income (expense)
General and administrative expense		(1,310,731	)		(700,794	)		(9,490	)		(12,104	)		(126,291	)		(2,159,410	)		—			(2,159,410	)
Impairment losses due to credit loss and others		(54,742	)		(456,407	)		(79,230	)		9,867			172,269			(408,243	)		15,439			(392,804	)
		(1,365,473	)		(1,157,201	)		(88,720	)		(2,237	)		45,978			(2,567,653	)		15,439			(2,552,214	)
Operating income		144,167			555,530			39,654			48,551			360,472			1,148,374			—			1,148,374
Non-operating income (loss)		(30,997	)		(2,754	)		32,618			—			37,527			36,394			—			36,394
Net income before income tax expense		113,170			552,776			72,272			48,551			397,999			1,184,768			—			1,184,768
Income tax expense		(27,387	)		(132,580	)		(17,490	)		(11,749	)		(30,482	)		(219,688	)		—			(219,688	)
Net income		85,783			420,196			54,782			36,802			367,517			965,080			—			965,080

- 20 -

(2) Information on financial products and services

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

(3) Information on geographical areas

Of the Bank’s revenue (interest income and non-interest income) from services, revenue from the domestic customers for the nine months ended September 30, 2017 and 2016 amounted to 14,095,130 million Won and 16,338,395 million Won, respectively, and revenue from the foreign customers amounted to 275,579 million Won and 207,918 million Won, respectively. Of the Bank’s non-current assets (investments in subsidiaries and associates, investment properties, premises and equipment and intangible assets), non-current assets attributed to domestic subsidiaries as of September 30, 2017 and December 31, 2016 are 7,224,940 million Won and 6,703,013 million Won, respectively, and foreign subsidiaries are 8,713 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):

	September 30, 2017		December 31, 2016
Cash		2,307,400		2,150,181
Foreign currencies		674,449		699,667
Demand deposits		1,907,444		3,144,208
Fixed deposits		161,685		109,973
Total		5,050,978		6,104,029

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

	For the nine months ended September 30
	2017			2016
Changes in other comprehensive income due to valuation of AFS financial assets		(32,644	)		19,174
Changes in other comprehensive income (loss) of foreign currencies translation of foreign operations		(12,801	)		(18,313	)
Changes in other comprehensive loss due to re-measurement of defined benefit liabilities		12,868			(52,105	)
Changes in investments in subsidiaries and associates due to debt-equity swap		49,599			—
Changes in investments in subsidiaries and associates due to accounts transfer		—			(137,849	)
Changes in accrued dividends on hybrid equity securities		(1,502	)		23,559

- 21 -

7. FINANCIAL ASSETS AT FVTPL

Details of financial assets held for trading are as follows (Unit: Korean Won in millions):

	September 30, 2017		December 31, 2016
Deposits:
Gold banking assets		26,305		26,180
Securities:
Debt securities
Korean treasury and government agencies		211,966		202,599
Financial institutions		938,549		938,329
Equity securities		2,179		24,762
Securities loaned		—		4,459
Sub-total		1,152,694		1,170,149
Derivative assets		1,835,347		2,880,543
Total		3,014,346		4,076,872

There are no financial assets designated at FVTPL as of September 30, 2017 and December 31, 2016.

8. AFS FINANCIAL ASSETS

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

	September 30, 2017		December 31, 2016
Debt securities:
Korean treasury and government agencies		2,523,774		2,839,623
Financial institutions		5,047,324		4,287,211
Corporates		2,767,763		3,061,002
Bonds in foreign currencies		1,601,812		891,501
Sub-total		11,940,673		11,079,337
Equity securities		1,267,158		1,282,090
Beneficiary certificates		4,103,933		5,250,856
Securities loaned		170,899		493,579
Total		17,482,663		18,105,862

9. HTM FINANCIAL ASSETS

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

	September 30, 2017		December 31, 2016
Korean treasury and government agencies		4,224,173		3,754,355
Financial institutions		6,658,634		5,168,487
Corporates		5,241,100		4,823,356
Bonds in foreign currencies		92,187		46,068
Total		16,216,094		13,792,266

- 22 -

10. LOANS AND RECEIVABLES

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

	September 30, 2017		December 31, 2016
Due from banks		13,230,329		13,147,281
Loans		223,206,910		221,089,139
Other loans and receivables		11,745,971		7,271,628
Total		248,183,210		241,508,048

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

	September 30, 2017			December 31, 2016
Due from banks in local currency:
Due from The Bank of Korea (“BOK”)		11,212,033			11,395,162
Others		59,089			56,355
Allowance for credit losses		(2,755	)		(2,798	)
Sub-total		11,268,367			11,448,719
Due from banks in foreign currencies:
Due from banks on demand		823,380			702,023
Time deposits		574,033			523,473
Others		566,311			474,472
Allowances for credit losses		(1,762	)		(1,406	)
Sub-total		1,961,962			1,698,562
Total		13,230,329			13,147,281

- 23 -

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

	Counterparty	September 30, 2017		Reason of restriction
Due from banks in local currency:
Due from The Bank of Korea	The BOK		11,212,033	Reserve deposits under the BOK Act
Others	The Korea Exchange and others		59,089	Central Counter Party KRW margin and others
Sub-Total			11,271,122
Due from banks in foreign currencies:
Due from banks on demand	The BOK and others		816,655	Reserve deposits under the BOK Act and others
Others	Korea Investment & Securities Co., Ltd. and others		566,311	Deposits for foreign futures and option trading and others
Sub-Total			1,382,966
Total			12,654,088
	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):

	September 30, 2017			December 31, 2016
Loans in local currency		195,107,274			190,099,544
Loans in foreign currencies		7,732,554			8,697,795
Domestic banker’s letter of credit		2,750,451			3,754,030
Bills bought in foreign currencies		8,310,738			7,691,879
Bills bought in local currency		152,217			322,189
Factoring receivables		47,128			95,173
Advances for customers on guarantees		23,223			24,132
Private placement bonds		161,226			222,926
Call loans		1,794,771			2,813,706
Bonds purchased under resale agreements		8,107,499			8,532,924
Loan origination costs and fees		467,656			447,073
Others		626			21,626
Discounted Present value		(8,577	)		(11,490	)
Allowance for credit losses		(1,439,876	)		(1,622,368	)
Total		223,206,910			221,089,139

- 24 -

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

	September 30, 2017			December 31, 2016
Receivables		9,591,005			4,849,111
Accrued income		907,447			970,789
Telex and telephone subscription rights and refundable deposits		959,626			986,242
Other receivables		350,995			632,875
Allowance for credit losses		(63,102	)		(167,389	)
Total		11,745,971			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 nine months ended September 30, 2017
	Consumers			Corporates			Others			Total
Beginning balance		(155,338	)		(1,467,030	)		(171,593	)		(1,793,961	)
Net reversal of provision (net provision)		(95,254	)		(313,956	)		24,045			(385,165	)
Recoveries		(32,454	)		(63,145	)		—			(95,599	)
Charge-offs		94,733			305,998			50,665			451,396
Sales of loans and receivables		868			61,432			29,264			91,564
Unwinding effect		6,702			28,941			—			35,643
Others (*)		—			188,627			—			188,627
Ending balance		(180,743	)		(1,259,133	)		(67,619	)		(1,507,495	)

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

	For the nine months ended September 30, 2016
	Consumers			Corporates			Others			Total
Beginning balance		(196,056	)		(1,649,828	)		(417,602	)		(2,263,486	)
Net reversal of provision		(65,185	)		(506,606	)		(26,039	)		(597,830	)
Recoveries		(41,778	)		(147,610	)		—			(189,388	)
Charge-offs		120,805			509,156			215,338			845,299
Sales of loans and receivables		2,017			104,844			91,767			198,628
Unwinding effect		7,818			54,690			—			62,508
Others		(16	)		33,984			(1	)		33,967
Ending balance		(172,395	)		(1,601,370	)		(136,537	)		(1,910,302	)

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

	September 30, 2017
	Level 1 (*1)		Level 2 (*1)		Level 3 (*2)		Total
Financial assets:
Financial assets at FVTPL
Deposits		26,305		—		—		26,305
Debt securities		211,966		938,549		—		1,150,515
Equity securities		2,179		—		—		2,179
Derivative assets		4,814		1,800,055		30,478		1,835,347
Sub-total		245,264		2,738,604		30,478		3,014,346
AFS financial assets
Debt securities		2,412,277		9,528,396		—		11,940,673
Equity securities		382,184		—		884,974		1,267,158
Beneficiary certificates		—		3,462,355		641,578		4,103,933
Securities loaned		79,955		90,944		—		170,899
Sub-total		2,874,416		13,081,695		1,526,552		17,482,663
Derivative assets		—		109,385		—		109,385
Total		3,119,680		15,929,684		1,557,030		20,606,394

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	September 30, 2017
	Level 1 (*1)		Level 2 (*1)		Level 3 (*2)		Total
Financial liabilities:
Financial liabilities held for trading
Deposits		26,327		—		—		26,327
Derivative liabilities		3,545		1,946,644		37,804		1,987,993
Sub-total		29,872		1,946,644		37,804		2,014,320
Financial liabilities designated at FVTPL
Equity-linked securities		—		—		349,409		349,409
Debentures		—		92,941		—		92,941
Sub-total		—		92,941		349,409		442,350
Derivative liabilities		—		23,345		—		23,345
Total		29,872		2,062,930		387,213		2,480,015
	December 31, 2016
	Level 1 (*1)		Level 2 (*1)		Level 3 (*2)		Total
Financial assets:
Financial assets at FVTPL
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

(*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.

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(*2) Certain AFS unquoted equity securities were measured at cost as of September 30, 2017 and December 31, 2016, that are amounting to 44,840 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.

Certain financial assets are carried at cost, even though K-IFRS requires them to be subsequently measured at their fair value, since they do not have quoted market prices in an active market and cannot be measured at fair value reliably. The carrying amount of the financial assets which have been disposed for the nine months ended September 30, 2017 is 910 million Won and the related loss from the disposals is 102 million Won.

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

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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	16.8%~33.8%	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	16.8%~33.8%	Variation of fair value increases as volatility increases.
Equity linked securities	Monte Carlo Simulation and others	Correlation coefficient	0.159~0.701	Equity linked securities’ fair value increases if both volatility and correlation coefficient increase. However when correlation coefficient decreases, despite the increase in volatility, the fair value of compound financial instrument may decrease.
		Volatility of underlying asset	9.1%~40.6%
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 nine months ended September 30, 2017
	January 1, 2017		Net Income (*1)		Other comprehensive income		Purchases/ Issuances		Disposals/ Settlements			Transfer to or out of level 3 (*2)		September 30, 2017
Financial assets:
Financial assets at FVTPL
Derivative assets		23,062		24,670		—		583		(17,837	)		—		30,478
AFS financial assets
Equity securities		855,006		22,189		15,927		30,016		(38,164	)		—		884,974
Beneficiary certificates		512,569		3,980		1,564		212,666		(89,201	)		—		641,578
Sub-total		1,367,575		26,169		17,491		242,682		(127,365	)		—		1,526,552
Derivative assets		99		185		—		—		(284	)		—		—
Total		1,390,736		51,024		17,491		243,265		(145,486	)		—		1,557,030
Financial liabilities:
Financial liabilities held for trading
Derivative liabilities		33,436		22,161		—		500		(18,293	)		—		37,804
Financial liabilities designated at FVTPL
Equity-linked securities		673,709		104,217		—		—		(428,517	)		—		349,409
Total		707,145		126,378		—		500		(446,810	)		—		387,213

(*1) The losses which increase the financial liabilities are presented as positive amounts and the gains which decrease the financial liabilities are presented as negative amounts. The loss amounting to 62,976 million Won for the nine months ended September 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.

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

	For the nine months ended September 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)			September 30, 2016
Financial assets:
Financial assets at FVTPL
Derivative assets (*3)		78,676		(2,900	)		—			12,182		(11,311	)		(540	)		76,107
AFS financial assets
Equity securities (*4)		833,744		(4,698	)		55,527			193,535		(121,043	)		(17,455	)		939,610
Beneficiary certificates		365,896		14,283			673			114,800		(33,503	)		—			462,149
Others		5,308		595			(643	)		—		(5,260	)		—			—
Sub-total		1,204,948		10,180			55,557			308,335		(159,806	)		(17,455	)		1,401,759
Derivative assets		5,973		3,716			—			—		(9,635	)		—			54
Total		1,289,597		10,996			55,557			320,517		(180,752	)		(17,995	)		1,477,920
Financial liabilities:
Financial liabilities held for trading
Derivative liabilities		78,601		785			—			—		(16,535	)		—			62,851
Financial liabilities designated at FVTPL
Equity-linked securities		747,351		44,006			—			983		(142,349	)		—			649,991
Total		825,952		44,791			—			983		(158,884	)		—			712,842

(*1) The losses which increase the financial liabilities are presented as positive amounts and the gains which decrease the financial liabilities are presented as negative amounts. The loss amounting to 31,437 million Won for the nine months ended September 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 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.

(*3) As the variables used for the valuation of currency related derivatives were observable in the market, such derivatives were transferred into level 2 from level 3.

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

(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.

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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 nine months ended September 30, 2017 and for the year ended December 31, 2016 (Unit: Korean Won in millions):

	As of September 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 at FVTPL
Derivative assets (*1)(*2)		3,516		(4,690	)		—		—			861		(2,248	)		—		—
AFS Financial Assets
Equity securities (*3) (*4)		—		—			26,989		(16,522	)		—		—			24,270		(16,223	)
Beneficiary certificates (*4)		—		—			2,266		(2,202	)		—		—			2,813		(2,754	)
Total		3,516		(4,690	)		29,255		(18,724	)		861		(2,248	)		27,083		(18,977	)
Financial liabilities:
Financial liabilities held for trading
Derivative liabilities (*1)(*2)		7,080		(5,726	)		—		—			4,892		(3,568	)		—		—
Financial liabilities designated at FVTPL
Equity-linked securities (*1)		144		(125	)		—		—			905		(857	)		—		—
Total		7,224		(5,851	)		—		—			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):

	September 30, 2017
	Fair value								Book value
	Level 1		Level 2		Level 3		Total
Financial assets:
HTM financial assets		1,605,876		14,628,434		—		16,234,310		16,216,094
Loans and receivables		—		—		248,131,457		248,131,457		248,183,210
Financial liabilities:
Deposits due to customers		—		215,896,353		—		215,896,353		215,888,152
Borrowings		—		15,199,577		—		15,199,577		15,204,833
Debentures		—		21,411,662		—		21,411,662		21,255,612
Other financial liabilities		—		22,298,231		—		22,298,231		22,298,777

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	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

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):

	September 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		—		—		—

(*) The post settlement had been settled and there are no financial instruments that meet the derecognition conditions but the Bank still has continuous involvements as of September 30, 2017.

	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 September 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):

		September 30, 2017		December 31, 2016
Assets transferred	AFS financial assets		10,018		220,098
	HTM financial assets		5,432		7,133
	Total		15,450		227,231
Related liabilities	Bonds sold under repurchase agreements		3,386		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):

		September 30, 2017		December 31, 2016		Loaned to
Financial assets at FVTPL	Korean equity securities		—		4,459	Samsung Securities Co., Ltd. and others
AFS financial assets	Korean treasury and government agencies and others		170,899		493,579	Korea Securities Finance Corporation and others
	Total		170,899		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 September 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):

	September 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)		1,757,013		2,162		1,754,851
Receivable spot exchange (*2)		8,777,157		—		8,777,157		9,969,738		1,164		561,106
Bonds purchased under resale agreements (*2)		8,107,499		—		8,107,499		8,107,499		—		—
Domestic exchanges receivable (*2)(*5)		27,649,900		27,389,521		260,379		—		—		260,379
Total		46,291,569		27,391,683		18,899,886		18,077,237		1,164		821,485

	September 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)		2,030,146		2,162		2,027,984
Payable spot exchange (*3)		8,776,351		—		8,776,351		10,125,919		185,152		493,264
Bonds sold under repurchase agreements (*4)		3,386		—		3,386		3,386		—		—
Domestic exchanges payable (*3)(*5)		32,052,706		27,389,521		4,663,185		4,663,185		—		—
Total		42,862,589		27,391,683		15,470,906		14,792,490		185,152		493,264

	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
Receivable spot exchange (*2)		4,375,738		—		4,375,738		6,239,981		69,834		1,012,148
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
Payable spot exchange (*3)		4,380,424		—		4,380,424		6,389,463		105,270		1,337,208
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 Co., Ltd.	Korea	KRW	2,371	Other credit finance business
Woori Private Equity Fund (*2)	Korea	KRW	—	Other financial business
Woori Credit Information Co., Ltd.	Korea	KRW	50	Credit information
Woori America Bank (*1)	America	USD	19,250	Finance
PT Bank Woori Saudara Indonesia 1906 Tbk (*1)(*3)	Indonesia	IDR	6,720	”
Woori Global Markets Asia Limited	Hong Kong	USD	10,000	”
Woori Bank China Limited	China	CNY	21.6	”
AO Woori Bank	Russia	RUB	14.5	”
Banco Woori Bank do Brasil S.A.	Brazil	BRL	7,709	”
Korea BTL Infrastructure Fund (*1)	Korea	KRW	7,800	”
Woori Fund Service Co., Ltd.	Korea	KRW	100	”
Woori Finance Cambodia PLC. (*1)	Cambodia	USD	1,300	”
Woori Finance Myanmar Co., Ltd. (*1)	Myanmar	USD	1,200	”
Wealth Development Bank	Philippine	PHP	7.7	”
Woori Bank Vietnam Limited	Vietnam	VND	3	”

	September 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		Sep.30,2017		4,900,000		100.0		Dec.31,2016
Woori Private Equity Asset Management Co., Ltd.		6,000,000		100.0		Sep.30,2017		6,000,000		100.0		Dec.31,2016
Woori Finance Research Institute Co., Ltd.		600,000		100.0		Sep.30,2017		600,000		100.0		Dec.31,2016
Woori Card Co., Ltd. (*1)		179,266,200		100.0		Sep.30,2017		169,266,200		100.0		Dec.31,2016
Woori Investment Bank Co., Ltd.		275,761,491		58.2		Sep.30,2017		275,761,491		58.2		Dec.31,2016
Woori Private Equity Fund (*2)		—		—		Sep.30,2017		46,061		28.9		Dec.31,2016
Woori Credit Information Co., Ltd.		1,008,000		100.0		Sep.30,2017		1,008,000		100.0		Dec.31,2016
Woori America Bank (*1)		38,500,000		100.0		Sep.30,2017		24,500,000		100.0		Dec.31,2016
PT Bank Woori Saudara Indonesia 1906 Tbk (*3)		5,256,690,211		79.9		Sep.30,2017		3,754,701,359		74.0		Dec.31,2016
Woori Global Markets Asia Limited		78,000,000		100.0		Sep.30,2017		78,000,000		100.0		Dec.31,2016
Woori Bank China Limited		—		100.0		Sep.30,2017		—		100.0		Dec.31,2016
AO Woori Bank		57,999,999		100.0		Sep.30,2017		57,999,999		100.0		Dec.31,2016
Banco Woori Bank do Brasil S.A.		77,093,999		100.0		Sep.30,2017		77,093,999		100.0		Dec.31,2016
Korea BTL Infrastructure Fund (*1)		155,805,801		99.9		Sep.30,2017		155,270,233		99.9		Dec.31,2016
Woori Fund Service Co., Ltd.		2,000,000		100.0		Sep.30,2017		2,000,000		100.0		Dec.31,2016
Woori Finance Cambodia PLC. (*1)		13,000,000		100.0		Sep.30,2017		3,000,000		100.0		Dec.31,2016
Woori Finance Myanmar Co., Ltd. (*1)		1,200,000		100.0		Sep.30,2017		200,000		100.0		Dec.31,2016
Wealth Development Bank		3,931,365		51.0		Sep.30,2017		3,931,365		51.0		Dec.31,2016
Woori Bank Vietnam Limited		—		100.0		Sep.30,2017		—		100.0		Dec.31,2016

- 36 -

(*1) The Bank’s capital stock and number of holding shares have increased, attributed to capital increase of subsidiaries during the nine months ended September 30, 2017.

(*2) Due to liquidation of Woori Private Equity Asset Management Co., Ltd., the entity was excluded from subsidiaries during the nine months ended September 30, 2017.

(*3) The ownership ratio has been increased, attributed to unequal capital increase of the subsidiary.

(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 September 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 19 structures entities	Korea	Asset securitization		—	Sep.30, 2017
KAMCO Value Recreation First Securitization Specialty Co., Ltd.	Korea	”		15.0	Sep.30, 2017
Money Trust by Trust Business Act (*2)
Principle Guaranteed Trust and Principle and Interest Guaranteed Trust	Korea	Trust		—	Sep.30, 2017
Structured entities established for investment in securities and others
Samsung Plus Private Equity Investment Trust 36th and 20 structures entities	Korea	Securities investments		100.0	Sep.30, 2017
HeungkukWoori Tech Company Private Placement Investment Trust No.1	Korea	”		98.0	Sep.30, 2017
Consus Sakhalin Real Estate Investment Trust 1st	Korea	”		75.0	Sep.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.

- 37 -

2) The following companies have been excluded from the consolidation scope despite the Bank’s majority ownership interest as of September 30, 2017 and December 31, 2016

	As of September 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
Hana Qualified Investor Private Real Estate Investment Trust No.41-1 (*)	Korea	Securities investments		77.0
	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):

					September 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	Jun.30, 2017(*6)
Woori Blackstone Korea Opportunity No.1 Private Equity Fund (*15)	Korea		—	Other Finance Business		—		21.4	Sep.30, 2017
Woori Service Networks Co., Ltd. (*3)	Korea		5	Freight & staffing		4,704		4.9	Aug.31, 2017(*6)
Korea Credit Bureau Co., Ltd. (*2)	Korea		100	Credit information		180,000		9.9	Sep.30, 2017
Korea Finance Security Co., Ltd. (*3)	Korea		60	Security service		180,000		15.0	Aug.31, 2017(*6)
Chin Hung International Inc. (*5)(*9)	Korea		733	Construction		37,059,405		25.3	Aug.31, 2017(*6)
Poonglim Industrial Co., Ltd. (*7)	Korea		736	Construction		4,142,782		29.7	Jun.30, 2017(*6)
STX Engine Co., Ltd. (*1)(*5)	Korea		691	Manufacturing		8,082,650		29.2	Jun.30, 2017(*6)
Samho International Co., Ltd. (*5)(*17)	Korea		—	Construction		—		—	—
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	Jun.30, 2017(*6)
Saman Corporation (*2)	Korea		7	General construction Technology service		12,542		9.2	Jun.30, 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)(*14)	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	—
Jiwon Plating Co., Ltd. (*4)(*16)	Korea		7	Plating		28,705		20.5
Cultizm Korea LTD Co., Ltd. (*4)(*16)	Korea		14	Wholesale and retail sales		858		31.3
Woori Growth Partnerships New Technology Private Equity Fund (*13)	Korea		1,222	Other financial services		28,203		23.1	Sep.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	—

- 38 -

					September 30, 2017
Investee	Location	Capital		Main business	Number of shares owned		Percentage of ownership (%)		Financial statements as of
2016KIF-IMM Woori Bank Technology Venture Fund (*13)	Korea		297	Other financial services		5,940,000,000		20.0	Sep.30, 2017
K BANK Co., Ltd. (*2)(*13)	Korea		3,368	Finance		8,734,300		13.0	Aug.31, 2017(*6)
Smart Private Equity Fund No.2 (*8)	Korea		150	Other financial services		3,000		20.0	Sep.30, 2017
Woori Bank-Company K Korea Movie Asset Fund (*8)	Korea		60	Other financial services		1,500		25.0	Sep.30, 2017
Well to Sea No.3 Private Equity Fund (*8)	Korea		2,051	Finance		102,500,000,000		50.0	Jun.30, 2017(*6)
					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	Other Finance Business		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. (*5)(*17)	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) (*14)	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)(*13)	Korea		2500	Finance		6,500,000		13.0	Nov.30, 2016(*6)

(*1) The Bank has significant influence in the creditors’ council which makes the financial and operating policy decisions.

(*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 as of September 30, 2017 and December 31, 2016.

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(*4) The carrying values of investments in Reading Doctors Co., Ltd., PREXCO Co., Ltd. and Hyunwoo International Co., Ltd., Jiwon Plating Co., Ltd. and Cultizm Korea LTD Co., Ltd., are nil as of September 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 nil as of both December 31, 2016 and September 30, 2017.

(*5) The investments in associates that have quoted market prices are Kumho Tire Co., Ltd. (current period: KRW 5,980, previous year: KRW 8,480), Chin Hung International Inc. (current period: KRW 1,990, previous year: KRW 2,090), STX Engine Co., Ltd. (current period: KRW 12,150, previous year: KRW 6,630), Samho International Co., Ltd. (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 associate so the number of shares holding has decreased during the nine months ended September 30, 2017.

(*8) Due to capital contribution by the Bank during the nine months ended September 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 during the nine months ended September 30, 2017.

(*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 nine months ended September 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 September 30, 2017.

(*12) Due to debt-equity swap of the associate, capital stock, the Bank’s number of holding shares and ownership ratio increased during the nine months ended September 30, 2017.

(*13) Due to capital increase of associates, the Bank’s number of capital stock and holding shares increased during the nine months ended September 30, 2017.

(*14) As the Bank sold its entire ownership interest of the entity, it was excluded from the investment in associates during the nine months ended September 30, 2017.

(*15) As the associate is on the liquidation process, it has returned the capital contribution of the Bank during the nine months ended September 30, 2017 and the Bank does not have capital stock and holding shares as of September 30, 2017. The residual property of the entity is to be distributed according to ownership ratio.

(*16) Due to debt-equity swap, the entity was included in the investment in associates during the nine months ended September 30, 2017.

(*17) The entity was sold after it was transferred to assets held for sale and was excluded 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 September 30, 2017 and December 31, 2016 are as follows:

	As of September 30, 2017
Associate (*)	Number of shares owned		Percentage of ownership
Orient Shipyard Co., Ltd.		465,050		21.4	%
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	%
Protronics Co., Ltd.		95,921		48.1	%
Gil Co., Ltd.		44,662		26.1	%
Instern Co., Ltd.		14,296		20.1	%

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	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	%
Youngdong Sea Food Co., Ltd.		12,106		24.0	%
Sinseong Trading Co., Ltd.		2,584		27.2	%
Reading Doctors Co., Ltd.		7,398		35.4	%
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.

(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 nine months ended September 30, 2017
Investee	January 1, 2017		Acquisitions (*)		Disposals and others			Impairment			September 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		79,100		—			—			281,471
PT Bank Woori Saudara Indonesia 1906 Tbk		215,400		112,613		—			—			328,013
Woori Global Markets Asia Limited		113,858		—		—			—			113,858
Woori Bank China Limited		427,802		—		—			—			427,802
AO Woori Bank		51,780		—		—			—			51,780
Banco Woori Bank do Brasil S.A.		44,045		—		—			—			44,045
Korea BTL Infrastructure Fund		780,525		2,698		(59	)		—			783,164
Woori Fund Service Co., Ltd.		10,000		—		—			—			10,000
Woori Finance Cambodia PLC.		4,600		11,250		—			—			15,850
Woori Finance Myanmar Co., Ltd.		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		—			(34,771	)		73,749
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		15,099		(498	)		—			28,203
2016KIF-IMM Woori Bank Technology Venture Fund		1,800		4,140		—			—			5,940
K BANK Co., Ltd.		32,500		11,172		—			—			43,672

- 41 -

	For the nine months ended September 30, 2017
Investee	January 1, 2017		Acquisitions (*)		Disposals and others			Impairment			September 30, 2017
Smart Private Equity Fund No.2		—		3,000		—			—			3,000
Woori Bank-Company K Korea Movie Asset Fund		—		1,500		—			—			1,500
Well to Sea No.3 Private Equity Fund		—		102,500		(250	)		—			102,250
		3,779,169		503,931		(24,055	)		(47,182	)		4,211,863

(*1) Investments in associates increased by 49,599 million Won through debt-equity swap occurred during the nine months ended September 30, 2017.

	For the nine months ended September 30, 2016
Investee	January 1, 2016		Acquisitions (*1)		Disposals and others (*2)(*3)			Impairment			September 30, 2016
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		—		—			—			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 Limited		113,858		—		—			—			113,858
Woori Bank China Limited		427,802		—		—			—			427,802
AO Woori Bank		51,780		—		—			—			51,780
Banco Woori Bank do Brasil S.A.		44,045		—		—			—			44,045
Korea BTL Infrastructure Fund		735,173		42,000		(526	)		—			776,647
Woori Fund Service Co., Ltd.		10,000		—		—			—			10,000
Woori Finance Cambodia PLC.		4,600		—		—			—			4,600
Woori Finance Myanmar Co., Ltd.		2,389		—		—			—			2,389
Kumho Tire Co., Inc.		175,652		—		—			—			175,652
Woori Blackstone Korea Opportunity No.1 Private Equity Fund		35,682		—		(9,984	)		—			25,698
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		—		—			(302	)		4,821
STX Engine Co., Ltd.		50,831		—		—			(6,216	)		44,615
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		—		9,561		—			—			9,561
		3,730,247		52,361		(192,483	)		(10,543	)		3,579,582

(*1) AFS financial assets decreased by 5,421 million Won through transfers to investments in associates occurred during the nine months ended September 30, 2016

(*2) Investments in associates decreased by 136,817 million Won through transfers to AFS financial assets occurred during the nine months ended September 30, 2016.

(*3) Investments in associates decreased by 6,453 million Won through transfers to assets held for sale occurred during the nine months ended September 30, 2016.

- 42 -

14. INVESTMENT PROPERTIES

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

	September 30, 2017			December 31, 2016
Acquisition cost		371,000			372,255
Accumulated depreciation		(26,665	)		(23,862	)
Net carrying value		344,335			348,393

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

	For the nine months ended September 30
	2017			2016
Beginning balance		348,393			344,892
Acquisition		2,647			—
Depreciation		(2,679	)		(2,659	)
Transfers		(3,989	)		16,319
Foreign currencies translation adjustments		(37	)		(46	)
Ending balance		344,335			358,506

(3) Fair value of investment properties is amounting to 369,374 million Won and 374,106 million Won as of September 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 September 30, 2017 and December 31, 2016.

(4) Rental fee earned from investment properties is amounting to 10,647 million Won and 10,286 million Won for the nine months ended September 30, 2017 and 2016, respectively.

- 43 -

15. PREMISES AND EQUIPMENT

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

	September 30, 2017
	Land		Buildings			Properties for business use			Structures in leased office			Construction in progress		Total
Acquisition cost		1,476,602		847,426			494,060			385,917			60,422		3,264,427
Accumulated depreciation		—		(172,924	)		(374,670	)		(336,269	)		—		(883,863	)
Net carrying value		1,476,602		674,502			119,390			49,648			60,422		2,380,564
	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 nine months ended September 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		4,244			17,300			30,325			12,041			47,006			110,916
Disposals		(891	)		(2,593	)		(66	)		(593	)		—			(4,143	)
Depreciation		—			(18,811	)		(32,221	)		(21,725	)		—			(72,757	)
Classified to assets held for sale		(3,642	)		(1,059	)		—			—			—			(4,701	)
Transfer		4,200			(58	)		67			—			(220	)		3,989
Foreign currencies translation adjustments		(29	)		(34	)		(69	)		(139	)		(27	)		(298	)
Others		—			(9	)		(219	)		5,506			—			5,278
Ending balance		1,476,602			674,502			119,390			49,648			60,422			2,380,564
	For the nine months ended September 30, 2016
	Land			Building			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		—			11,384			42,714			13,730			2,525			70,353
Disposals		(30	)		—			(174	)		(1,583	)		(67	)		(1,854	)
Depreciation		—			(18,436	)		(31,518	)		(36,437	)		—			(86,391	)
Classified to assets held for sale		(4,368	)		(2,941	)		—			—			—			(7,309	)
Transfers		(11,198	)		(5,121	)		—			—			—			(16,319	)
Foreign currencies translation adjustments		(35	)		(84	)		(73	)		(58	)		(13	)		(263	)
Others		145			(9	)		25			19,085			—			19,246
Ending balance		1,462,723			676,623			117,129			59,527			2,967			2,318,969

- 44 -

16. INTANGIBLE ASSETS

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

	September 30, 2017
	Industrial property rights			Development cost			Others			Membership deposits			Total
Acquisition cost		772			214,306			572,381			11,809			799,268
Accumulated amortization		(440	)		(24,175	)		(475,394	)		—			(500,009	)
Accumulated impairment losses		—			—			—			(2,368	)		(2,368	)
Net carrying value		332			190,131			96,987			9,441			296,891
	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 nine months ended September 30, 2017
	Industrial property rights			Development cost			Others			Membership deposit			Total
Beginning balance		258			100,840			131,514			9,618			242,230
Acquisition		146			96,449			13,541			220			110,356
Disposals		—			—			—			(316	)		(316	)
Amortization (*)		(72	)		(7,067	)		(42,132	)		—			(49,271	)
Impairment loss		—			—			—			(65	)		(65	)
Transfer		—			(36	)		36			—			—
Foreign currencies translation adjustment		—			—			180			(16	)		164
Others		—			(55	)		(6,152	)		—			(6,207	)
Ending balance		332			190,131			96,987			9,441			296,891

(*) Amortization of other intangible assets amounting to 36,419 million Won is included in other operating expenses.

	For the nine months ended September 30, 2016
	Industrial property rights			Development cost			Others			Membership deposit			Total
Beginning balance		283			14,248			164,279			8,710			187,520
Acquisition		—			16,296			36,370			1,384			54,050
Disposals		—			—			—			(739	)		(739	)
Amortization		(59	)		(1,744	)		(39,520	)		—			(41,323	)
Reversal of impairment loss		—			—			—			269			269
Foreign currencies translation adjustments		—			(1	)		(17	)		48			30
Others		—			—			1,522			—			1,522
Ending balance		224			28,799			162,634			9,672			201,329

17. ASSETS HELD FOR SALE

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

	September 30, 2017		December 31, 2016
Premises and equipment and others		1,979		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):

		September 30, 2017
		Collateral given to	Amount		Reason for collateral
Loan and receivables	Due from banks in local currency	Samsung Securities Co., Ltd. and others		9,298	Margin deposit for futures or option
	Due from banks in foreign currencies	Korea Investment & Securities Co., Ltd. and others		228,393	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		269,686	Substitute securities and others
AFS financial assets	Corporate bonds	Korea Securities Depository		10,018	Related to bonds sold under repurchase agreements (*)
	Korean treasury and government agencies bonds and others	BOK and others		1,578,007	Settlement risk and others
HTM financial assets	Korean treasury and government agencies bonds	Korea Securities Depository		5,432	Related to bonds sold under repurchase agreements (*)
	Financial institutions debt securities and others	BOK and others		8,071,913	Settlement risk and others
Total				10,172,747

(*) 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 sell 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).

		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 sell 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 the Bank has acquired through foreclosure as of September 30, 2017 and December 31, 2016, respectively.

- 46 -

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

		September 30, 2017		December 31, 2016		Loaned to
Financial assets at FVTPL	Korean equity securities		—		4,459	Samsung Securities Co., Ltd. and others
AFS financial assets	Korean treasury and government agencies bonds and others		170,899		493,579	Korea Securities Finance Corporation and others
Total			170,899		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 September 30, 2017 and December 31, 2016 are as follows (Unit: Korean Won in millions):

	September 30, 2017
	Fair values of collaterals		Fair values of collaterals were disposed or re-subjected to lien
Securities		8,509,989		—

	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):

	September 30, 2017		December 31, 2016
Prepaid expenses		177,761		92,895
Advance payments		3,168		404
Others		2,540		3,627
Total		183,469		96,926

- 47 -

20. FINANCIAL LIABILITY AT FVTPL

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

	September 30, 2017		December 31, 2016
Financial liabilities held for trading		2,014,320		3,026,599
Financial liabilities designated at FVTPL		442,350		766,880
Total		2,456,670		3,793,479

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

	September 30, 2017		December 31, 2016
Deposits
Gold banking liabilities		26,327		26,501
Derivative liabilities		1,987,993		3,000,098
Total		2,014,320		3,026,599

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

	September 30, 2017		December 31, 2016
Equity linked securities index
Equity linked securities index in short position		349,409		673,906
Debentures
Debentures in local currency		92,941		92,974
Total		442,350		766,880

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

	For the nine months ended September 30
	2017			2016
Financial liabilities designated at FVTPL subject to credit risk adjustments		442,350			745,038
Changes in fair value for credit risk adjustments		(117	)		(841	)
Accumulated changes in fair value of credit risk adjustments		(15,878	)		(15,814	)

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 is as follows (Unit: Korean Won in millions):

	September 30, 2017			December 31, 2016
Carrying amount		442,350			766,880
Nominal amount at maturity		456,732			902,375
Difference		(14,382	)		(135,495	)

- 48 -

21. DEPOSITS DUE TO CUSTOMERS

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

	September 30, 2017			December 31, 2016
Deposits in local currency:
Deposits on demand		8,773,054			9,496,455
Deposits at termination		188,387,034			183,864,984
Mutual installment		34,821			37,128
Certificate of deposits		5,749,197			3,782,549
Sub-total		202,944,106			197,181,116
Deposits in foreign currencies		12,995,652			14,225,208
Present value discount		(51,606	)		(23,944	)
Total		215,888,152			211,382,380

22. BORROWINGS AND DEBENTURES

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

	September 30, 2017
	Lender	Interest rate (%)		Amount
Borrowings in local currency:
Borrowings from the BOK	The BOK		0.5 ~ 0.8		1,457,178
Borrowing from government funds	Small Enterprise And Market Service and others		0.0 ~ 3.5		1,634,535
Others	The Korea Development Bank and others		0.0 ~ 3.8		3,101,186
Sub-total					6,192,899
Borrowings in foreign currencies:
Borrowings in foreign currencies	The Export-Import Bank of Korea and others		0.0 ~ 4.5		7,920,171
Offshore borrowings in foreign currencies	Commonwealth Bank		1.8		30,273
Sub-total					7,950,444
Bills sold	Others		0.0 ~ 1.2		30,643
Call-money	Banks and others		0.0 ~ 4.4		1,027,750
Bonds sold under repurchase agreements	Other financial institutions		0.6 ~ 8.6		3,386
Present value discount					(289	)
Total					15,204,833

	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):

	September 30, 2017					December 31, 2016
	Interest rate (%)		Amount			Interest rate (%)		Amount
Face value of bond (*):
Ordinary bonds		1.5 ~ 5.8		16,575,018			1.5 ~ 7.2		12,889,422
Subordinated bonds		3.4 ~ 5.9		4,708,424			3.0 ~ 5.9		5,309,375
Sub-total				21,283,442					18,198,797
Discount on bonds				(27,830	)				(32,740	)
Total				21,255,612					18,166,057

(*) Included debentures under fair value hedge relationships are 3,355,581 million Won and 3,610,193 million Won as of September 30, 2017 and December 31, 2016, respectively.

23. PROVISIONS

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

	September 30, 2017		December 31, 2016
Asset retirement obligation		56,210		52,838
Provisions for guarantees (*1)		195,387		240,023
Provisions for unused commitments		52,356		53,919
Provisions for customer reward credits		36,751		18,170
Other provisions (*2)		16,296		15,523
Total		357,000		380,473

(*1) Provisions for guarantees include provision for financial guarantee of 66,358 million Won and 70,153 million Won as of September 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 nine months ended September 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		—			—			5,534			3,799			9,333
Provisions used		(17,223	)		(34	)		(50,547	)		(3,026	)		(70,830	)
Reversal of unused amount		(46,946	)		(1,529	)		—			—			(48,475	)
Transfer(*)		—			—			44,893			—			44,893
Others		19,533			—			18,701			—			38,234
Ending balance		195,387			52,356			36,751			16,296			300,790

(*) According to contracts with the third parties, the Bank ultimately will be reimbursed for which it has paid out on behalf of customers 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 nine months ended September 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		—			8,245			5,709			2,965			16,919
Provisions used		(81,286	)		(19	)		(12,590	)		(8,928	)		(102,823	)
Reversal of unused amount		(65,571	)		—			—			—			(65,571	)
Transfer		—			—			17,099			—			17,099
Others		13,866			—			858			—			14,724
Ending balance		233,882			53,999			11,076			13,345			312,302

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

	For the nine months ended September 30
	2017			2016
Beginning balance		52,838			35,933
Obligation incurred		1,336			1,437
Settlements		(804	)		(706	)
Reversal of provisions unused		(715	)		—
Accretion expense		312			331
Increase in asset retirement expense and others		3,243			16,688
Ending balance		56,210			53,683

24. NET DEFINED BENEFIT ASSET

Characteristics of the Bank’s defined benefit plans are as follows:

Employees and directors with one or more years of service are entitled to receive a payment upon termination of their employment, based on their length of service and rate of pay at the time of termination. The assets of the plans are measured at 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 is exposed to various risks through Defined Benefit Retirement Pension Plan, and the most significant risks are as follows:

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

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

	September 30, 2017			December 31, 2016
Defined benefit obligation		970,351			919,707
Fair value of plan assets		(976,285	)		(990,645	)
Net defined benefit assets		(5,934	)		(70,938	)

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

	For the nine months ended September 30
	2017			2016
Beginning balance		919,707			846,368
Current service cost		101,343			106,745
Interest expense		19,137			17,510
Remeasurements		(28,033	)		62,951
Foreign currencies translation adjustments		(36	)		(4	)
Retirement benefit paid		(30,839	)		(29,550	)
Curtailment or settlement		(10,928	)		(9,242	)
Ending balance		970,351			994,778

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

	For the nine months ended September 30
	2017			2016
Beginning balance		990,645			800,690
Interest income		22,077			18,028
Remeasurements		(11,056	)		(5,789	)
Employer’s contributions		15,000			213,000
Retirement benefit paid		(29,329	)		(29,006	)
Curtailment or settlement		(11,052	)		(8,904	)
Ending balance		976,285			988,019

(4) Plan assets wholly consist of time deposits as of September 30, 2017 and December 31, 2016. Among plan assets, realized returns on plan assets amount to 11,021 million Won and 12,239 million Won for the nine months ended September 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 income, 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 nine months ended September 30
	2017			2016
Current service cost		101,343			106,745
Net interest income		(2,940	)		(518	)
Loss(gain) on the curtailment or settlement		124			(338	)
Cost recognized in net income		98,527			105,889
Remeasurements		(16,977	)		68,740
Cost recognized in total comprehensive income		81,550			174,629

Retirement benefit service costs related to defined contribution plans recognized amount to 2,894 million Won and 2,683 million Won for the nine months ended September 30, 2017 and 2016, respectively.

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

	September 30, 2017	December 31, 2016
Discount rate	3.08%	2.85%
Future wage growth rate	6.07%	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):

		September 30, 2017			December 31, 2016
Discount rate	Increase by 1% point		(89,342	)		(86,744	)
	Decrease by 1% point		102,446			99,833
Future wage growth rate	Increase by 1% point		102,067			99,225
	Decrease by 1% point		(90,665	)		(87,851	)

25. OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES

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

	September 30, 2017			December 31, 2016
Other financial liabilities:
Accounts payable		9,463,787			4,744,622
Accrued expenses		1,930,034			1,886,601
Borrowing from trust accounts		3,372,197			3,391,903
Agency business revenue		687,719			331,159
Foreign exchanges payable		612,005			696,017
Domestic exchanges payable		4,672,794			8,476,475
Other miscellaneous financial liabilities		1,560,758			1,300,954
Present value discount		(517	)		(447	)
Sub-total		22,298,777			20,827,284
Other liabilities:
Unearned income		52,639			46,144
Other miscellaneous liabilities		117,410			107,094
Sub-total		170,049			153,238
Total		22,468,826			20,980,522

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26. DERIVATIVES

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

	September 30, 2017
			Assets				Liabilities
	Notional amount		For fair value hedge		For trading		For fair value hedge		For trading
Interest rate:
Futures		76,034		—		—		—		—
Swaps		131,618,740		109,385		292,126		10,333		311,395
Purchase options		690,000		—		14,065		—		—
Written options		945,000		—		—		—		14,793
Currency:
Futures		578,808		—		—		—		—
Forwards		72,776,400		—		605,795		—		541,347
Swaps		50,805,858		—		729,027		—		766,043
Purchase options		2,853,953		—		30,079		—		—
Written options		4,674,360		—		—		—		38,148
Equity:
Futures		354,803		—		—		—		—
Purchase options		6,369,003		—		164,066		—		—
Written options		7,376,209		—		—		13,012		315,854
Others:
Futures		3,582		—		—		—		—
Swaps		1,987		—		65		—		55
Purchase options		6,970		—		124		—		—
Written options		24,523		—		—		—		358
Total		279,156,230		109,385		1,835,347		23,345		1,987,993

	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
Purchase options		860,000		—		21,172		—		—
Written 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
Purchase options		1,120,949		—		42,126		—		—
Written options		907,211		—		—		—		8,589
Equity:
Futures		926,392		—		—		—		—
Purchase options		3,007,969		745		73,261		—		—
Written options		4,460,233		—		—		208		228,900
Others:
Futures		5,105		—		—		—		—
Swaps		7,918		—		2,645		—		2,331
Purchase options		8,307		—		121		—		—
Written options		64,352		—		—		—		1,181
Total		232,654,544		140,577		2,880,543		7,221		3,000,098

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

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

	For the nine months ended September 30
	2017			2016
Gains (losses) from hedged items		18,199			(51,661	)
Gains (losses) from hedging instruments		(15,501	)		45,945

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 nine months ended September 30
	2017			2016
Beginning balance		13,422			28,008
New transactions		500			1,337
Amounts recognized in profits and losses		(5,271	)		(13,498	)
Ending balance		8,651			15,847

The Bank has entered into transactions where the fair value is determined using valuation techniques for which not all inputs are observable or available in the market. Those financial instruments are recorded at the fair value produced by the valuation techniques at the time of acquisition, despite the differences between the transaction price and the fair value. The table above presents the difference yet to be realized as profit or losses.

28. CAPITAL STOCK AND CAPITAL SURPLUS

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

	September 30, 2017		December 31, 2016
Shares of common stock Authorized		5,000,000,000 Shares		5,000,000,000 Shares
Par value		5,000 Won		5,000 Won
Shares of common stock Issued		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 nine months ended September 30, 2017 and 2016.

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

	September 30, 2017		December 31, 2016
Capital in excess of par value		269,533		269,533

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29. HYBRID SECURITIES

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

	Issue date		Maturity		Interest rates (%)		September 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):

	September 30, 2017			December 31, 2016
Accumulated other comprehensive income:
Gain on valuation of available-for-sale financial assets		287,054			319,698
Gain (loss) on foreign currency translation of foreign operations		(5,401	)		7,400
Remeasurement loss related to defined benefit plan		(141,575	)		(154,443	)
Sub-total		140,078			172,655
Treasury shares		(34,113	)		(34,113	)
Other capital adjustments		(208,158	)		—
Total		(102,193	)		138,542

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

	For the nine months ended September 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			66,725			(109,792	)		10,423			287,054
Gain (loss) on foreign currency translation of foreign operations		7,400			(16,888	)		—			4,087			(5,401	)
Remeasurement gain (loss) related to defined benefit plan		(154,443	)		16,977			—			(4,109	)		(141,575	)
Total		172,655			66,814			(109,792	)		10,401			140,078

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

- 56 -

	For the nine months ended September 30, 2016
	Beginning balance			Increase (decrease)(*)			Reclassif- ication adjustments(*)			Income tax effect			Ending balance
Gain (loss) on valuation of AFS financial assets		329,724			70,248			(44,953	)		(6,121	)		348,898
Gain (loss) on foreign currencies translation of foreign operations		(1,961	)		(24,160	)		—			5,847			(20,274	)
Remeasurement of the net defined benefit liability		(187,634	)		(68,740	)		—			16,634			(239,739	)
Total		140,129			(22,652	)		(44,953	)		16,360			88,885

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

31. RETAINED EARNINGS

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

		September 30, 2017		December 31, 2016
Legal reserve	Legal reserve		1,729,754		1,622,754
	Other legal reserve		45,669		44,634
	Sub-total		1,775,423		1,667,388
Voluntary reserve	Business rationalization reserve		8,000		8,000
	Reserve for financial structure improvement		235,400		235,400
	Additional reserve		7,418,806		7,073,104
	Regulatory reserve for credit loss		2,017,342		1,880,447
	Revaluation reserve		751,964		753,908
	Other voluntary reserve		11,700		11,700
	Sub-total		10,443,212		9,962,559
Retained earnings before appropriation			999,797		858,208
	Total		13,218,432		12,488,155

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.

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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 nine months ended September 30
	2017			2016
Beginning balance		12,488,155			11,798,375
Net income		1,196,834			965,080
Dividends on common stock		(336,636	)		(168,317	)
Dividends on hybrid securities		(129,921	)		(149,506	)
Ending balance		13,218,432			12,445,632

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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):

	September 30, 2017		December 31, 2016
Beginning balance		2,017,342		1,880,447
Planned provision of regulatory reserve for credit loss		25,104		136,895
Ending balance		2,042,446		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 September 30		Nine months ended September 30		Three months ended September 30			Nine months ended September 30
Net income		192,408		1,196,834		293,839			965,080
Provision (reversal) of regulatory reserve for credit loss		35,910		25,104		(27,325	)		(45,194	)
Adjusted net income after the provision (reversal) of regulatory reserve		156,498		1,171,730		321,164			1,010,274
Adjusted EPS after the reversal of regulatory reserve (Unit: Korean Won)		174		1,548		404			1,279

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 nine months ended September 30, 2017.

In addition, on July 28, 2017, the board of directors approved interim dividend payment of 100 Won per share, which amounts to 67,328 million Won in total and such dividend was paid during the nine months ended September 30, 2017.

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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 September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Financial assets at FVTPL		4,846		13,724		4,626		14,142
AFS financial assets		51,424		156,691		58,453		183,524
HTM financial assets		76,328		223,391		86,775		272,700
Loans and receivables
Interest of due from banks		18,301		52,367		13,713		38,254
Interest of loans		1,725,221		5,019,385		1,661,207		5,036,874
Interest of other assets		5,153		16,498		6,334		21,273
Sub-total		1,748,675		5,088,250		1,681,254		5,096,401
Total		1,881,273		5,482,056		1,831,108		5,566,767

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

	2017				2016
	Three months ended September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Interest on deposits due to customers		549,979		1,639,326		579,856		1,799,663
Interest on borrowings		53,815		157,681		48,352		151,043
Interest on debentures		127,187		365,827		122,544		368,334
Other interest expense		16,584		53,856		22,449		73,681
Total		747,565		2,216,690		773,201		2,392,721

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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 September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Fees and commissions received (*)		192,455		570,616		183,634		558,915
Fees and commissions received for provision of guarantee		18,168		51,718		17,436		54,299
Fees and commissions received on project financing		5,421		11,755		4,434		17,923
Fees and commissions received on securities		19,658		59,344		19,919		52,844
Other Fees and commissions received		43,426		114,872		26,547		65,500
Total		279,128		808,305		251,970		749,481

(*) 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 September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Fees and commissions paid		38,238		101,451		34,341		109,438
Other fees and commissions paid		64		178		37		129
Total		38,302		101,629		34,378		109,567

36. DIVIDEND INCOME

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

	2017				2016
	Three months ended September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Financial assets at FVTPL		2		146		85		743
AFS financial assets		48,442		110,034		16,510		175,441
		48,444		110,180		16,595		176,184

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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 September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Gains (losses) on financial instruments held for trading		61,243			9,856			(7,042	)		(10,376	)
Losses on financial instruments designated at FVTPL		(18,438	)		(104,644	)		(91,598	)		(44,491	)
Total		42,805			(94,788	)		(98,640	)		(54,867	)

(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 September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Financial instruments held for trading	Securities	Gain on valuation		(2,062	)		1,158			572			5,412
		Gain on disposals		1,426			7,342			2,366			6,755
		Loss on valuation		(725	)		(1,039	)		(77	)		(1,575	)
		Loss on disposals		(70	)		(317	)		(1,175	)		(3,165	)
		Sub-total		(1,431	)		7,144			1,686			7,427
	Other financial instruments	Gain on valuation		1,742			4,813			1,717			12,085
		Gain on disposals		921			1,803			707			2,248
		Loss on valuation		(2,244	)		(5,783	)		(2,102	)		(12,487	)
		Loss on disposals		(315	)		(549	)		(275	)		(1,590	)
		Sub-total		104			284			47			256
		Total		(1,327	)		7,428			1,733			7,683
Derivatives (for trading)	Interest rates derivatives	Gain on transactions and valuation		242,785			677,012			219,863			1,065,271
		Loss on transactions and valuation		(238,469	)		(661,348	)		(187,128	)		(1,083,824	)
		Sub-total		4,316			15,664			32,735			(18,553	)
	Currencies derivatives	Gain on transactions and valuation		811,938			4,553,070			2,534,958			5,238,013
		Loss on transactions and valuation		(765,754	)		(4,669,704	)		(2,666,654	)		(5,261,830	)
		Sub-total		46,184			(116,634	)		(131,696	)		(23,817	)

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		2017						2016
		Three months ended September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Equity derivatives	Gain on transactions and valuation		95,400			398,300			109,687			179,260
	Loss on transactions and valuation		(83,339	)		(294,890	)		(19,267	)		(155,284	)
	Sub-total		12,061			103,410			90,420			23,976
Other derivatives	Gain on transactions and valuation		474			2,670			4,972			13,889
	Loss on transactions and valuation		(465	)		(2,682	)		(5,206	)		(13,554	)
	Sub-total		9			(12	)		(234	)		335
	Total		62,570			2,428			(8,775	)		(18,059	)
Total			61,243			9,856			(7,042	)		(10,376	)

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

	2017						2016
	Three months ended September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Loss on equity-linked securities:
Loss on disposal of equity-linked securities		(27,988	)		(43,865	)		(12,698	)		(19,851	)
Gain (loss) on valuation of equity-linked securities		8,901			(60,813	)		(79,634	)		(26,641	)
Sub-total		(19,087	)		(104,678	)		(92,332	)		(46,492	)
Gain on other financial instruments:
Gain on valuation of other financial instruments		649			34			734			2,001
Total		(18,438	)		(104,644	)		(91,598	)		(44,491	)

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 September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Gain on redemptions of securities		—			—			—			594
Gain on sale of securities		49,822			152,682			32,236			71,455
Impairment loss		(2,611	)		(15,233	)		(6,331	)		(14,988	)
Total		47,211			137,449			25,905			57,061

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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 September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Impairment losses due to credit loss		(157,455	)		(385,165	)		(195,191	)		(597,830	)
Reversal of provision on (provision provided for) guarantee		1,728			46,946			(11,239	)		65,571
Reversal of provision on (provision provided for) loan commitment		(1,059	)		1,529			(9,432	)		(8,245	)
Total		(156,786	)		(336,690	)		(215,862	)		(540,504	)

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 September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Salaries	Short-term employee benefits	Salaries Employee benefits		278,269		833,618		275,730		823,946
				130,898		322,759		86,919		252,027
	Retirement benefit service costs			33,685		101,421		36,702		108,572
	Termination benefits			298,780		303,191		—		92,039
	Sub-total			741,632		1,560,989		399,351		1,276,584
Depreciation and amortization				27,313		85,609		39,398		127,714
Other general and administrative expenses	Rent			62,020		188,991		63,688		190,800
	Taxes and public dues		18,002		69,926		19,111		71,579
	Service charges		45,032		129,987		54,009		156,791
	Computer and IT related		57,488		167,075		56,473		176,269
	Telephone and communication		8,471		24,266		8,014		23,392
	Operating promotion		8,727		26,651		10,570		30,192
	Advertising		11,353		37,928		11,286		43,177
	Printings		1,603		5,269		1,732		6,136
	Traveling		2,649		6,972		2,126		6,218
	Supplies		1,201		3,572		1,200		3,707
	Insurance premium		826		2,399		1,003		2,909
	Reimbursement		5,163		13,368		5,031		13,131
	Maintenance		3,654		9,408		3,396		9,997
	Water, light and heating		3,301		9,462		3,670		10,248
	Vehicle maintenance		1,988		5,929		2,024		5,767
	Others		1,561		4,695		1,366		4,797
	Sub-total			233,039		705,898		244,699		755,110
	Total			1,001,984		2,352,496		683,448		2,159,408

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(2) Details of other operating income recognized are as follows (Unit: Korean Won in millions):

	2017					2016
	Three months ended September 30			Nine months ended September 30		Three months ended September 30			Nine months ended September 30
Gain on transactions of foreign exchange		534,101			2,077,941		858,657			3,256,369
Gain on disposals of loans and receivables		(907	)		197,093		25,103			158,858
Gain on fair value hedging derivatives		(4,316	)		7,038		(33,782	)		77,723
Gain on fair value hedged items		13,195			25,055		12,489			30,602
Others (*)		—			57,644		32,809			80,172
		542,073			2,364,771		895,276			3,603,724

(*) Other income includes such income amounting to 28,800 million Won and 69,920 million Won for the nine months ended September 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.

(3) Details of other operating expenses recognized are as follows (Unit: Korean Won in millions):

	2017					2016
	Three months ended September 30			Nine months ended September 30		Three months ended September 30			Nine months ended September 30
Loss on transactions of foreign exchange		489,396			1,740,063		724,382			3,083,870
KDIC Deposit insurance premium		76,310			224,684		74,381			216,590
Contribution to miscellaneous funds		70,122			213,172		71,063			220,844
Loss on disposals of loans and receivables		7,411			7,411		2,481			2,486
Loss on fair value hedging derivatives		10,728			22,539		12,766			31,778
Loss on fair value hedged items		(8,990	)		6,856		(36,437	)		82,263
Others (*)		18,753			54,836		13,768			109,945
Total		663,730			2,269,561		862,404			3,747,776

(*) Other expense includes such expenses amounting to 5,237 million Won and 98,023 million Won for the nine months ended September 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.

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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 September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Impairment loss		(9,635	)		(47,182	)		(3,690	)		(10,543	)

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

	2017						2016
	Three months ended September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Other non-operating income		39,295			109,709			37,815			123,823
Other non-operating expenses		(16,833	)		(50,576	)		(9,686	)		(76,886	)
Net other non-operating income		22,462			59,133			28,129			46,937

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

	2017				2016
	Three months ended September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Rental fee income		3,674		10,979		3,582		10,652
Dividends from investments in subsidiaries and associates		9,246		27,510		9,641		30,708
Gain on disposal of investments in subsidiaries and associates		1,005		9,232		—		3,679
Gain on disposal of premises and equipment intangible assets and investment properties		11,104		12,713		1,160		1,227
Reversal of impairment of premises and equipment intangible assets and investment properties		56		88		37		480
Others		14,210		49,187		23,395		77,077
Total		39,295		109,709		37,815		123,823

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

	2017				2016
	Three months ended September 30		Nine months ended September 30		Three months ended September 30		Nine months ended September 30
Depreciation of investment properties		890		2,678		900		2,659
Interest expenses of rent leasehold deposits		111		332		120		367
Loss on disposals of premises and equipment, intangible assets and investment properties		719		1,156		705		6,548
Impairment loss on premises and equipment, intangible assets and investment properties		109		153		72		211
Donation		9,226		21,811		2,362		35,783
Others		5,778		24,446		5,527		31,318
Total		16,833		50,576		9,686		76,886

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42. INCOME TAX EXPENSE

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

	For the nine months ended September 30
	2017			2016
Current tax expense
Current tax expense in respect of the current period		373,700			112,623
Adjustments recognized in the current period in relation to the current tax of prior periods		(4,376	)		(20,676	)
Sub-total		369,324			91,947
Deferred tax expense
Changes in deferred tax assets and liabilities due to temporary differences		(33,701	)		111,381
Deferred tax charged directly to equity		10,401			16,360
Sub-total		(23,300	)		127,741
Income tax expense		346,024			219,688

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

	For the nine months ended September 30
	2017			2016
Net income before income tax expense		1,542,858			1,184,768
Tax calculated at statutory tax rate (*)		372,910			286,252
Adjustments
Effect of income that is exempt from taxation		(34,581	)		(39,474	)
Effect of expenses that are not deductible in determining taxable profit		7,381			7,011
Adjustments recognized in the current period in relation to the current tax of prior periods		(4,376	)		(20,676	)
Others		4,690			(13,425	)
Sub-total		(26,886	)		(66,564	)
Income tax expense		346,024			219,688
Effective tax rate		22.4	%		18.5	%

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

(3) Details of accumulated deferred tax relating to items that are recognized directly in equity are as follows (Unit: Korean Won in millions):

	September 30, 2017			December 31, 2016
Loss on valuation of AFS securities		(91,644	)		(102,067	)
Foreign currency translation of foreign operations		1,724			(2,363	)
Remeasurement gain related to defined benefit plan		45,199			49,308
Total		(44,721	)		(55,122	)

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43. EARNINGS PER SHARE (“EPS”)

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

	2017						2016
	Three months ended September 30			Nine months ended September 30			Three months ended September 30			Nine months ended September 30
Net income attributable to common shareholders		192,408			1,196,834			293,839			965,080
Dividends to hybrid securities		(39,098	)		(129,921	)		(49,269	)		(149,506	)
Net income attributable to common shareholders		153,310			1,066,913			244,570			815,574
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)		228			1,585			363			1,212

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

44. CONTINGENT LIABILITIES AND COMMITMENTS

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

	September 30, 2017		December 31, 2016
Confirmed guarantees:
Guarantees for loans		89,711		79,566
Acceptances		256,822		333,943
Guarantees in acceptances of imported goods		115,576		97,606
Other confirmed guarantees		6,531,846		7,542,726
Total		6,993,955		8,053,841
Unconfirmed guarantees:
Local letters of credit		433,114		397,588
Letters of credit		3,718,857		3,807,199
Other unconfirmed guarantees		597,665		838,593
Total		4,749,636		5,043,380
Commercial paper purchase commitments and others		2,165,717		1,855,976

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

	September 30, 2017		December 31, 2016
Loan commitments		51,610,323		56,313,804
Other commitments		1,770,176		1,869,253

(3) Litigation case

The Bank is involved in certain legal proceedings that are pending as follows (Unit: Korean Won in millions):

	September 30, 2017
	As plaintiff		As defendant
Number of cases		58 cases		148 cases
Amount of litigation		415,064		321,183
Provisions for litigations		7,750

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	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 State of New York), the Bank is currently performing its own internal investigation to confirm if the Bank has met the requirements of sanction of U.S. Government in respect of its service operation. Meanwhile, as of September 30, 2017, the Bank believes that it cannot make reasonable estimation due to uncertainty of the results of the investigation.

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45. RELATED PARTY TRANSACTIONS

Related parties of the Bank as of September 30, 2017, assets and liabilities recognized, guarantees and commitments, and major transactions with related parties for the period ended September 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 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, Banco Woori Bank do Brasil S.A., Korea BTL Infrastructure Fund, Woori Fund Service Co., Ltd., Woori Finance Cambodia PLC., Woori Finance Myanmar Co., Ltd., Wealth Development Bank, Woori Bank Vietnam Limited, TUTU Finance-WCI Myanmar Co.,Ltd., Woori Bank Principal and Interest Guaranteed Trust, Woori Bank Principal Guaranteed Trust, Kumho Trust First Co., Ltd. and 24 SPCs, Samsung Plus Private Equity Fund 36th and 22 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., STX Corporation, Woori Columbus 1st Private Equity Fund, 2016KIF-IMM Woori Bank Technology Venture Fund, K BANK Co.,Ltd., Well to Sea No.3 Private Equity Fund, and others (Dongwoo C & C Co.,Ltd and 20 associates)

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

Related party		A title of account	September 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		202			99
		Deposits due to customers		11,230			40,078
		Other liabilities		18,724			16,248
	Woori Private Equity Asset Management Co., Ltd.	Deposits due to customers		230			1,258
		Other liabilities		2,842			—
	Woori Finance Research Institute Co., Ltd.	Deposits due to customers		4,034			2,657
		Other liabilities		8			1,534
	Woori Card Co., Ltd.	Other assets		—			13,619
		Deposits due to customers		44,277			64,954
		Other liabilities		12,362			14,769
	Woori Investment Bank Co., Ltd.	Cash and cash equivalents		100,000			70,000
		Loans		25,100			—
		Allowance for credit loss		(38	)		—
		Other assets		22,118			4,876
		Deposits due to customers		10,102			7,936
		Other liabilities		24,197			6,680
	Woori Private Equity Fund(*2)	Other assets		—			3
		Deposits due to customers		—			461
	Woori Credit Information Co., Ltd.	Deposits due to customers		14,799			16,913
		Other liabilities		10,586			10,503
	Woori America Bank	Cash and cash equivalents		3,105			4,394

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Related party		A title of account	September 30, 2017			December 31, 2016
Subsidiaries	PT Bank Woori Saudara Indonesia 1906 Tbk	Cash and cash equivalents		5,718			8,728
		Loans		114,670			157,105
		Allowance for credit loss		(175	)		(240	)
		Other assets		—			107
		Deposits due to customers		8			23
	Woori Global Markets Asia Limited	Loans		164,482			146,724
		Allowance for credit loss		(236	)		(187	)
		Deposits due to customers		1,597			272
	Woori Bank China Limited	Cash and cash equivalents		28,951			36,002
		Loans		114,670			247,743
		Allowance for credit loss		(146	)		(347	)
		Other assets		106,520			73,171
		Deposits due to customers		76,328			71,497
		Other liabilities		106,295			74,213
	AO Woori Bank	Cash and cash equivalents		24,742			453
		Loans		49,056			43,861
		Allowance for credit loss		(75	)		(67	)
		Other assets		26			8
	Banco Woori Bank do Brasil S.A.	Loans		1,720			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		6,801			5,154
		Other liabilities		861			816
	Woori Finance Cambodia PLC.	Loans		22,934			24,170
		Allowance for credit loss		(22	)		(25	)
		Other liabilities		1			—
	Woori Finance Myanmar Co., Ltd.	Loans		4,587			2,417
		Allowance for credit loss		(4	)		(2	)
	Woori EL Co., Ltd.(*2)	Deposits due to customers		—			22
	Woori Bank Vietnam Limited	Loans		18,637			—
		Allowance for credit loss		(163	)		—
		Other assets		114,903			—
	Woori Bank Principal and Interest Guaranteed Trust and Principal Guaranteed Trust	Other assets		8,089			2,317
		Other liabilities		37,627			62,221
	Structured entities	Loans		13,850			13,627
		Allowance for credit loss		(2,667	)		(4,147	)
		Other assets		41			164
		Deposits due to customers		10,296			6,959
		Other liabilities		—			1,153
	Beneficiary certificates	Other assets		16			23
Associates	Kumho Tires Co., Ltd.	Loans		218,812			295,075
		Allowance for credit loss		(42,763	)		(650	)
		Deposits due to customers		8,162			45,957
		Other liabilities		4,651			99
	Woori Service Networks Co., Ltd.	Deposits due to customers		2,481			2,572
		Other liabilities		328			358

- 71 -

Related party		A title of account	September 30, 2017			December 31, 2016
Associates	Korea Credit Bureau Co., Ltd.	Deposits due to customers		5,025			5,069
		Other liabilities		50			40
	Korea Finance Security Co., Ltd.	Deposits due to customers		3,239			2,801
		Other liabilities		5			6
	Chin Hung International Inc.	Loans		—			4,044
		Allowance for credit loss		—			(4,011	)
		Deposits due to customers		75,529			14,047
		Other liabilities		1,678			5
	Poonglim Industrial Co., Ltd.	Deposits due to customers		4			283
	STX Engine Co., Ltd.	Loans		115,281			107,856
		Allowance for credit loss		(97,090	)		(89,436	)
		Deposits due to customers		13,948			13,260
		Other liabilities		27			39
	Samho International Co., Ltd.(*3)	Loans		—			36,568
		Allowance for credit loss		—			(628	)
		Deposits due to customers		—			82,917
		Other liabilities		—			127
	STX Corporation	Loans		58,148			144,006
		Allowance for credit loss		(31,475	)		(92,615	)
		Deposits due to customers		13,754			14,412
		Other liabilities		26			23
	Well to Sea No.3 Private Equity Fund (*4)	Loans		83,040			—
		Allowance for credit loss		(85	)		—
		Other liabilities		56			—
	Others (*5)	Loans		321			619
		Allowance for credit loss		(320	)		(253	)
		Other assets		2			8
		Deposits due to customers		3,695			4,460
		Other liabilities		73			60

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

(*2) Woori Private Equity Fund has been excluded from the associates due to its liquidation during the nine months ended September 30, 2017

(*3) As the Bank sold its entire ownership interest of the entity, it is excluded from the investment in associates during the nine months ended September 30, 2017.

(*4) Due to capital contribution by the Bank during the nine months ended September 30, 2017, the entity was included in the investment in associates.

(*5) Others include Saman Corporation, Kyesan Engineering Co., Ltd., Hyunwoo International Co., Ltd. and DAEA SNC Co., Ltd. and others as of September 30, 2017 and December 31, 2016

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

			For the nine months ended September 30
Related party		A title of account	2017			2016
Corporation that has significant influence over the bank	KDIC(*1)	Interest income		—			9,450
		Interest expenses		15,331			14,123
Subsidiaries	Woori FIS Co., Ltd.	Fees income		385			364
		Other income		5,347			5,083
		Other expenses		159,552			160,994
	Woori Private Equity Asset Management Co., Ltd.	Fees income		9			7
		Interest expenses		5			214
	Woori Finance Research Institute Co.,Ltd.	Fees income		7			6
		Other income		—			224
		Interest expenses		29			26
		Fees expenses		4,218			3,525
	Woori Card Co., Ltd.	Fees income		108,936			98,196
		Other income		567			516
		Interest expenses		33			13
		Fees expenses		8			—
		Other expenses		635			—
	Woori Investment Bank Co.,Ltd.	Fees income		460			343
		Interest income		737			—
		Other income		4,085			2,961
		Interest expenses		16			31
		Other expenses		7,020			2,689
		Impairment losses due to credit loss		38			—
	Woori Private Equity Fund(*2)	Fees income		1			5
		Interest expenses		1			3
	Woori Credit Information Co., Ltd.	Fees income		43			43
		Dividend income		504			1,008
		Other income		294			297
		Interest expenses		141			156
		Fees expenses		8,050			7,079
	PT Bank Woori Saudara Indonesia 1906 Tbk	Interest income		587			381
		Dividend income		3,300			2,643
		Fees expenses		—			54
		Reversal of impairment losses due to credit loss		(65	)		(4	)
	Woori Global Markets Asia Limited	Interest income		1,964			1,299
		Fees income		11			—
		Interest expenses		5			32
		Impairment losses due to credit loss (reversal)		49			(24	)
	Woori Bank China Limited	Interest income		2,551			2,496
		Other income		—			56
		Interest expenses		503			16
		Other expenses		—			141
		Reversal of impairment losses due to credit loss		(201	)		(517	)

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			For the nine months ended September 30
Related party		A title of account	2017			2016
Subsidiaries	AO Woori Bank	Interest income		408			361
		Impairment losses due to credit loss (reversal)		8			(17	)
	Banco Woori Bank do Brasil S.A.	Interest income		22			15
		Reversal of impairment losses due to credit loss		(3	)		(2	)
	Korea BTL Infrastructure Fund	Dividend income		20,796			22,288
		Fees income		58			56
	Woori Fund Service Co., Ltd.	Fees income		14			12
		Other income		122			116
		Interest expenses		72			43
	Woori Finance Cambodia PLC.	Interest income		481			356
		Impairment losses due to credit loss (reversal)		(3	)		3
	Woori Finance Myanmar	Interest income		87			5
		Impairment losses due to credit loss		2			1
	Woori Bank Vietnam Limited	Interest income		590			—
		Impairment losses due to credit loss		163			—
	Woori Bank Principal and Interest Guaranteed Trust and Principal Guaranteed Trust	Other income		5,772			6,204
		Interest expenses		502			492
		Other expenses		24			21
	Structured entities	Interest income		8			295
		Fees income		5,256			6,046
		Interest expenses		7			5
		Reversal of impairment losses due to credit loss		(1,480	)		(12,563	)
Associates	Kumho Tires Co., Ltd.	Interest income		2,155			1,941
		Fees income		6			6
		Interest expenses		1			53
		Impairment losses due to credit loss		42,113			147
	Woori Blackstone Korea Opportunity No.1 Private Equity Fund	Dividend income		2,700			4,568
	Woori Service Networks Co., Ltd.	Dividend income		8			12
		Other income		22			22
		Interest expenses		19			38
	Korea Credit Bureau Co., Ltd.	Dividend income		149			136
		Interest expenses		60			108
	Korea Finance Security Co., Ltd.	Dividend income		54			54
		Interest expenses		8			7

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			For the nine months ended September 30
Related party		A title of account	2017			2016
Associates	Chin Hung International Inc.	Interest income		364			190
		Fees income		1			1
		Interest expenses		18			20
		Reversal of impairment losses due to credit loss		(4,011	)		(1,016	)
	Poonglim Industrial Co., Ltd.	Interest expenses		—			2
		Reversal of impairment losses due to credit loss		—			(1,557	)
	STX Engine Co., Ltd.	Interest income		1,011			1,013
		Fees income		28			20
		Interest expenses		109			65
		Impairment losses due to credit loss		7,654			36,502
	Samho International Co., Ltd(*3)	Interest income		486			687
		Fees income		6			5
		Interest expenses		334			370
		Reversal of impairment losses due to credit loss		(628	)		(533	)
	Force TEC Co., Ltd. (*4)	Interest income		—			153
	STX Corporation	Interest income		219			803
		Fees income		60			52
		Interest expenses		4			5
		Impairment losses due to credit loss (reversal)		(61,140	)		61,596
	Osung LST Co., Ltd. (*5)	Interest income		—			170
		Interest expenses		—			1
		Reversal of impairment losses due to credit loss		—			(338	)
	Well to Sea No.3 Private Equity Fund (*6)	Impairment losses due to credit loss		85			—
	Others (*7)	Interest expenses		10			12
		Impairment losses due to credit loss		67			277

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

(*2) Woori Private Equity Fund has been excluded from the associates due to its liquidation that occurred during the nine months ended September 30, 2017

(*3) As the Bank sold its entire ownership interest of the entity, it is excluded from the investment in associates during the nine months ended September 30, 2017.

(*4) The entity is not in scope for the associates, because the Bank does not have significant influence over the entity due to an ongoing workout process under receivership as of September 30, 2017.

(*5) 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.

(*6) Due to capital contribution by the Bank during the nine months ended September 30, 2017, the entity was included in the investment in associates.

(*7) Others include Saman Corporation, Kyesan Engineering Co., Ltd., Hyunwoo International Co., Ltd., DAEA SNC Co., Ltd. and others as of September 30, 2017, and Saman Corporation, Kyesan Engineering Co., Ltd., Gachi Staff Co., Ltd., QTS Shipping Co., Ltd., and others were included as of December 31, 2016, respectively.

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

	Warranty	September 30, 2017		December 31, 2016
KDIC (*1)	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		2,402		26,959
PT Bank Woori Saudara Indonesia 1906 Tbk	Confirmed guarantees in foreign currencies and others		165,293		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		93,685		104,077
AO Woori Bank	Confirmed guarantees in foreign currencies and others		38,648		44,649
Banco Woori Bank do Brasil S.A.	Confirmed guarantees in foreign currencies		25,748		27,480
Korea BTL Infrastructure Fund	Securities purchase contract		311,078		313,778
Woori Finance Cambodia PLC.	Loan commitment		3,440		3,626
Woori Bank Vietnam Limited	Confirmed guarantees in foreign currencies and others		22,004		—
Structured entities	Loan commitment in local currency		310,400		466,080
	Loan commitment		792		572
Kumho Tires Co., Ltd.	Import credit in foreign currencies and others		19,778		24,187
	Loan commitment		190,068		126,435
Chin Hung International Inc.	Loan commitment		31,749		40,630
STX Engine Co., Ltd.	Import credit in foreign currencies and others		65,082		63,103
Samho International Co., Ltd. (*2)	Loan commitment		—		27,742
STX Corporation	Import credit in foreign currencies and others		19,323		24,316
Well to Sea No.3 Private Equity Fund (*3)	Loan commitment		226,960		—

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

(*2) As the Bank sold its entire ownership interest of the entities, they are excluded from the investment in associates.

(*3) Due to capital contribution by the Bank during the nine months ended September 30, 2017, the entity was included in the investment in associates

For the guarantee provided to the related parties, the Bank recognized provisions for guarantees amounting to 73,062 million Won and 73,381 million Won, respectively, as of September 30, 2017 and December 31, 2016.

(5) Commitments of derivatives to the related parties are as follows (Unit: Korean Won in millions):

	Warranty	September 30, 2017		December 31, 2016
Woori Card Co., Ltd.	Unsettled commitment		100,000		50,000
Woori Investment Bank	Unsettled commitment		—		109,974
Woori Bank China Limited	Unsettled commitment		—		96,152
Structured entities	Unsettled commitment		701,000		350,000

(*) The entity is the related party of Well to Sea No.3 Private Equity Fund.

(6) Details of compensation to key management are as follows (Unit: Korean Won in millions):

	For the nine months ended September 30
	2017		2016
Salaries		9,340		6,878
Severance and retirement benefits		372		423
Total		9,712		7,301

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Key management includes registered executives and non-registered executives. Outstanding assets and liabilities from transactions with key management amount to 1,200 million Won and 5,756 million Won, respectively, as of September 30, 2017, and with respect to the assets, the Bank has not recognized any allowance, nor provision.

46. TRUST ACCOUNTS

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

	Total assets				Operating income
	September 30, 2017		December 31, 2016		2017				2016
					For the three months ended September 30		For the nine months ended September 30		For the three months ended September 30		For the nine months ended September 30
Trust accounts		44,093,154		38,807,666		268,593		684,909		166,663		592,852

(2) Significant receivables and payables between the Bank and trust accounts are as follows (Unit: Korean Won in millions):

	September 30, 2017		December 31, 2016
Receivables
Trust fees receivables		32,005		23,667
Payables
Deposits due to customers		633,642		1,919,324
Borrowings from trust accounts		2,593,050		2,687,776
Sub-Total		3,226,692		4,607,100

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

	2017				2016
	For three months ended September 30		For nine months ended September 30		For three months ended September 30		For nine months ended September 30
Revenue
Trust fees		40,130		105,337		23,558		56,835
Expense
Interest expenses on deposits due to customers		3,103		15,503		11,869		36,408
Interest expenses on borrowings from trust accounts		7,652		23,338		9,553		34,873
Sub-Total		10,755		38,841		21,422		71,281

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

1) As of September 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):

	September 30, 2017		December 31, 2016
Principal guaranteed trusts
Old-age pension trusts		4,221		4,513
Personal pension trusts		524,080		532,959
Pension trusts		775,390		741,759
Retirement trusts		50,690		53,773
New personal pension trusts		8,509		8,536
New old-age pension trusts		2,562		2,919
Sub-total		1,365,452		1,344,459
Principal and fixed rate of return guaranteed trusts
Development trusts		19		19
Unspecified money trusts		791		787
Sub-total		810		806
Total		1,366,262		1,345,265

2) The amounts that the Bank has to pay by the principle guaranteed contract or the operating results of the principal and return guaranteed trusts are as follows (Unit: Korean Won in millions):

	September 30, 2017		December 31, 2016
Liabilities for the account (subsidy for trust account adjustment)		24		30

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