Exhibit 99.1

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017

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

Tae Seung Sohn

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 MARCH 31, 2018 AND DECEMBER 31, 2017

	March 31, 2018		December 31, 2017
	(Korean Won in millions)
ASSETS
Cash and cash equivalents (Note 6)		5,738,002		6,908,286
Financial assets at fair value through profit or loss (“FVTPL”) (IFRS 9) (Notes 4, 7, 11, 12, 18 and 26)		7,578,339		—
Financial assets at FVTPL (IAS 39) (Notes 4, 7, 11, 12, 18 and 26)		—		5,843,077
Financial assets at FVTOCI (Note 4, 8, 11, 12, and 18)		13,254,613		—
Available-for-sale (“AFS”) financial assets (Notes 4,8,11,12 and 18)		—		15,352,950
Securities at amortized cost (Notes 4, 9, 11, 12 and 18)		16,831,342		—
Held to maturity (“HTM”) financial assets (Notes 4, 9, 11, 12 and 18)		—		16,749,296
Loans and other financial assets at amortized cost (Notes 4, 10, 11, 12, 18 and 45)		278,109,106		—
Loans and receivables (Notes 4,10,11,12,18 and 45)		—		267,106,204
Investments in joint ventures and associates (Note 13)		414,486		417,051
Investment properties (Note 14)		382,402		371,301
Premises and equipment (Notes 15 and 18)		2,455,678		2,477,545
Intangible assets and goodwill (Note 16)		538,956		518,599
Assets held for sale (Note 17)		54,576		48,624
Current tax assets		5,347		4,722
Deferred tax assets		156,873		280,130
Derivative assets (Notes 4,11,12 and 26)		39,272		59,272
Other assets (Notes 19 and 45)		236,911		158,404
Total assets		325,795,903		316,295,461
LIABILITIES
Financial liabilities at FVTPL (IFRS 9) (Note 4, 11, 12, 20 and 26)		3,024,971		—
Financial liabilities at FVTPL (IAS 39) (Notes 4, 11, 12, 20 and 26)		—		3,427,909
Deposits due to customers (Notes 4,11,21 and 45)		237,497,139		234,695,084
Borrowings (Notes 4, 11, 12 and 22)		13,935,114		14,784,706
Debentures (Notes 4, 11 and 22)		27,091,625		27,869,651
Provisions (Notes 23, 44 and 45)		452,713		410,470
Net defined benefit liability (Note 24)		152,098		43,264
Current tax liabilities		201,329		232,600
Deferred tax liabilities		23,392		22,681
Derivative liabilities (Notes 4,11,12 and 26)		87,336		67,754
Other financial liabilities (Notes 4,11,12, 25 and 45)		22,451,144		13,892,461
Other liabilities (Notes 25 and 45)		339,057		283,981
Total liabilities		305,255,918		295,730,561

(Continued)

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

AS OF MARCH 31, 2018 AND DECEMBER 31, 2017 (CONTINUED)

	March 31, 2018			December 31, 2017
	(Korean Won in millions)
EQUITY
Owners’ equity:		20,340,112			20,365,892
Capital stock (Note 28)		3,381,392			3,381,392
Hybrid securities (Note 29)		3,017,888			3,017,888
Capital surplus (Note 28)		285,883			285,880
Other equity (Note 30)		(2,147,261	)		(1,939,274	)
Retained earnings (Notes 31 and 32) (Regulatory reserve for credit loss as of March 31, 2018 and December 31, 2017 is 2,578,457 million Won and 2,438,191 million Won, respectively Regulatory reserve for credit loss to be reserved (reversed) as of March 31, 2018 and December 31, 2017 is (-) 213,068 million Won and 140,266 million Won, respectively Planned provision (reversal) of regulatory reserve for credit loss as of March 31, 2018 and December 31, 2017 is (-) 213,068 million Won and 140,266 million Won, respectively		15,802,210			15,620,006
Non-controlling interests		199,873			199,008
Total equity		20,539,985			20,564,900
Total liabilities and equity		325,795,903			316,295,461

See accompanying notes

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017

	For the three months ended March 31
	2018			2017
	(Korean Won in millions, except for per share data)
Interest income		2,274,747			2,083,776
Financial assets at FVTPL (IFRS 9)		15,170			—
Financial assets at FVTOCI		57,276			—
Financial assets at amortized cost		2,202,301			—
Financial assets at FVTPL (IAS 39)		—			13,732
AFS financial assets		—			76,400
HTM financial assets		—			74,983
Loans and receivables		—			1,918,661
Interest expense		(907,596	)		(821,032	)
Net interest income (Notes 34 and 45)		1,367,151			1,262,744
Fees and commissions income		557,606			507,612
Fees and commissions expense		(252,298	)		(232,660	)
Net fees and commissions income (Notes 35 and 45)		305,308			274,952
Dividend income (Notes 36 and 45)		35,553			39,828
Net gain on financial instruments at FVTPL (IFRS 9) (Note 11, 37 and 45)		49,330			—
Net loss on financial instruments at FVTPL (IAS 39) (Note 11, 37 and 45)		—			(158,475	)
Net gain on financial assets at FVTOCI (Note 11 and 38)		812			—
Net gain on AFS financial assets (Notes 11 and 38)		—			15,785
Net gain arising on financial assets at amortized cost		21,525			—
Impairment losses due to credit loss (Notes 39 and 45)		(122,235	)		(79,277	)
General and administrative expenses (Notes 40 and 45)		(739,684	)		(754,270	)
Other net operating income (expenses) (Notes 40 and 45)		(96,463	)		278,457
Operating income		821,297			879,744
Share of losses of joint ventures and associates (Note 13)		(9,143	)		(49,415	)
Net other non-operating loss		(6,119	)		(1,699	)
Non-operating loss (Note 41)		(15,262	)		(51,114	)
Net income before income tax expense		806,035			828,630
Income tax expense (Note 42)		211,515			185,899
Net income		594,520			642,731
Net gain on valuation of equity securities at FVTOCI		28,938			—
Net gain on valuation of financial liabilities designated as at FVTPL due to own credit risk		90			—
Items out of change in equity method securities due to change in equity of investee that will not be reclassified to profit or loss		311			(3,046	)
Remeasurement of the net defined benefit liability		(53,460	)		(26,517	)
Items that will not be reclassified to profit or loss		(24,121	)		(29,563	)
Net gain on valuation of debt securities at FVTOCI		2,015			—
Net gain on valuation of AFS financial assets		—			12,974
Change in equity method securities due to change in equity of investees’		(1,201	)		4,750
Loss on foreign currency translation of foreign operations		(1,742	)		(100,460	)
Loss on valuation of cash flow hedge		(3,426	)		(853	)
Items that may be reclassified to profit or loss		(4,354	)		(83,589	)
Other comprehensive loss, net of tax		(28,475	)		(113,152	)
Total comprehensive income		566,045			529,579

(continued)

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017

	For the three months ended March 31
	2018		2017
	(Korean Won in millions, except for per share data)
Net income attributable to:
Net income attributable to owners		589,736		637,473
Net income attributable to non-controlling interests		4,784		5,258
Total comprehensive income attributable to:
Comprehensive income attributable to owners		563,794		531,613
Comprehensive income (loss) attributable to non-controlling interests		2,251		(2,034	)
Basic and diluted earnings per share (In Korean Won) (Note 43)		820		874

See accompanying notes

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017

	Capital Stock		Hybrid securities			Capital surplus		Other equity			Retained earnings			Controlling interests			Non-controlling interests			Total equity
	(Korean Won in millions)
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		—		—			—		—			637,473			637,473			5,258			642,731
Dividends to common stocks		—		—			—		—			(269,308	)		(269,308	)		(11	)		(269,319	)
Gain on valuation of available-for-sale financial assets		—		—			—		12,780			—			12,780			194			12,974
Changes in equity of joint ventures and associates		—		—			—		1,704			—			1,704			—			1,704
Loss on foreign currency translation of foreign operations		—		—			—		(92,970	)		—			(92,970	)		(7,490	)		(100,460	)
Loss on valuation of cash flow hedge		—		—			—		(853	)		—			(853	)		—			(853	)
Remeasurement of the net defined benefit liability		—		—			—		(26,521	)		—			(26,521	)		4			(26,517	)
Dividends to hybrid securities		—		—			—		—			(49,266	)		(49,266	)		—			(49,266	)
Redemption of hybrid securities		—		(189,396	)		—		(604	)		—			(190,000	)		—			(190,000	)
March 31, 2017		3,381,392		3,385,500			286,331		(1,574,489	)		14,930,465			20,409,199			157,748			20,566,947
January 1, 2018		3,381,392		3,017,888			285,880		(1,939,274	)		15,620,006			20,365,892			199,008			20,564,900
Cumulative effect of change in accounting policy (Note 2)		—		—			—		(392,177	)		177,091			(215,086	)		723			(214,363	)
Adjusted balance, beginning of period		3,381,392		3,017,888			285,880		(2,331,451	)		15,797,097			20,150,806			199,731			20,350,537
Net income		—		—			—		—			589,736			589,736			4,784			594,520
Dividends to common stocks		—		—			—		—			(336,636	)		(336,636	)		(2,109	)		(338,745	)
Net gain on valuation of financial liabilities designated as at FVTPL due to own credit risk		—		—			—		90			—			90			—			90
Net gain (loss) on valuation of financial assets at FVTOCI		—		—			—		31,269			—			31,269			(316	)		30,953
Changes in other comprehensive income due to disposal of equity securities at FVTOCI		—		—			—		1,974			(1,974	)		—			—			—
Change in equity method securities due to change in equity of investees’		—		—			—		(890	)		—			(890	)		—			(890	)
Gain (loss) on foreign currency translation of foreign operations		—		—			—		408			—			408			(2,150	)		(1,742	)
Loss on valuation of cash flow hedge		—		—			—		(3,426	)		—			(3,426	)		—			(3,426	)
Remeasurement of the net defined benefit liability		—		—			—		(53,393	)		—			(53,393	)		(67	)		(53,460	)
Dividends to hybrid securities		—		—			—		—			(37,855	)		(37,855	)		—			(37,855	)
Appropriation of retained earnings		—		—			—		208,158			(208,158	)		—			—			—
Capital adjustment fluctuation (Subsidiaries)		—		—			3		—			—			3			—			3
March 31, 2018		3,381,392		3,017,888			285,883		(2,147,261	)		15,802,210			20,340,112			199,873			20,539,985

See accompanying notes

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017

	For the three months ended March 31
	2018			2017
	(Korean Won in millions)
Cash flows from operating activities:
Net income		594,520			642,731
Adjustments:
Income tax expense		211,515			185,899
Interest income		(2,274,747	)		(2,083,776	)
Interest expense		907,596			821,032
Dividend income		(35,553	)		(39,828	)
		(1,191,189	)		(1,116,673	)
Additions of expenses not involving cash outflows:
Impairment losses due to credit loss		122,235			79,277
Net loss on financial assets at FVTOCI		219			—
Loss on valuation of financial instruments at FVTPL (IAS 39)		—			149,488
Share of losses of investments in joint ventures and associates		13,803			62,792
Loss on disposal of investments in joint ventures and associates		2,931			27,684
Loss on transaction and valuation of derivatives (hedging)		49,307			47,572
Loss on hedged items (fair value hedge)		—			26
Provision for liabilities		21,450			18,120
Retirement benefits		35,810			35,795
Depreciation and amortization		60,253			62,685
Loss on disposal of premises and equipment and other assets		54			337
Impairment loss on premises and equipment and other assets		—			120
		306,062			483,896
Deduction of revenues not involving cash inflows:
Net gain on financial instruments at FVTPL (IFRS 9)		33,826			—
Gain on financial assets at FVTOCI		1,031			—
Gain on disposal of securities at amortized cost		431			—
Gain on AFS financial assets		—			15,785
Gain on transaction and valuation of derivatives (hedging)		2,570			64
Gain on hedged items (fair value hedge)		47,694			18,954
Reversal of provisions and others		1,164			2,731
Share of profits of investments in joint ventures and associates		4,660			13,377
Gain on disposal of investments in joint ventures and associates		—			28,420
Gain on disposal of premises and equipment and other assets		1,277			181
Reversal of impairment loss on premises and equipment and other assets		341			32
		92,994			79,544
Changes in operating assets and liabilities:
Financial assets at FVTPL (IFRS 9)		519,586			—
Financial assets at FVTPL (IAS 39)		—			(563	)
Loans and other financial assets at amortized cost		(11,517,570	)		—
Loans and receivables		—			(1,228,368	)
Other assets		(36,057	)		(1,030	)
Deposits due to customers		2,801,603			1,366,846
Provision for guarantee and loan commitment and others		(17,774	)		(103,089	)
Net defined benefit liability		511			(4,766	)
Other financial liabilities		8,220,962			596,403
Other liabilities		33,228			8,880
		4,489			634,313

(Continued)

WOORI BANK AND SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017 (CONTINUED)

	For the three months ended March 31
	2018			2017
	(Korean Won in millions)
Interest income received		2,303,857			2,135,970
Interest expense paid		(873,666	)		(918,381	)
Dividends received		28,520			32,175
Income tax paid		(34,702	)		(40,006	)
Net cash provided by operating activities		1,044,897			1,774,481
Cash flows from investing activities:
Cash in-flows from investing activities:
Disposal of financial assets at FVTPL (IFRS 9)		2,055,411			—
Disposal of financial assets at FVTOCI		1,497,686			—
Disposal of AFS financial assets		—			6,502,288
Redemption of securities at amortized cost		2,159,843			—
Redemption of HTM financial assets		—			2,501,593
Disposal of investments in joint ventures and associates		1,128			51,659
Disposal of investment properties		870			393
Disposal of premises and equipment		46			313
Disposal of intangible assets		1,317			500
Disposal of assets held for sale		—			738
		5,716,301			9,057,484
Cash out-flows from investing activities:
Acquisition of financial assets at FVTPL (IFRS 9)		3,069,218			—
Acquisition of financial assets at FVTOCI		1,009,430			—
Acquisition of AFS financial assets		—			5,619,903
Acquisition of securities at amortized cost		2,242,037			—
Acquisition of HTM financial assets		—			2,921,380
Acquisition of investments in joint ventures and associates		13,660			8,412
Acquisition of investment properties		4,730			342
Acquisition of premises and equipment		21,229			25,478
Acquisition of intangible assets		55,519			36,002
		6,415,823			8,611,517
Net cash provided by (used in) investing activities		(699,522	)		445,967
Cash flows from financing activities:
Cash in-flows from financing activities:
Increase in borrowings		1,870,805			2,593,035
Issuance of debentures		3,871,052			4,819,830
		5,741,858			7,412,865
Cash out-flows from financing activities:
Repayment of borrowings		2,686,086			4,496,149
Repayment of debentures		4,601,422			4,398,001
Redemption of hybrid securities		—			190,000
Dividends paid on hybrid securities		30,177			33,413
		7,317,684			9,117,563
Net cash used in financing activities		(1,575,826	)		(1,704,698	)
Net increase (decrease) in cash and cash equivalents		(1,230,451	)		515,750
Cash and cash equivalents, beginning of the period		6,908,286			7,591,324
Effects of exchange rate changes on cash and cash equivalents		60,167			(123,074	)
Cash and cash equivalents, end of the period		5,738,002			7,984,000

See accompanying notes

WOORI BANK AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017

1. GENERAL

(1) Summary of the parent company

Woori Bank (hereinafter referred to the “Bank”), which is a controlling entity in accordance with International Financial Reporting Standards (“IFRS”) 10 – Consolidated Financial Statements, was established in 1899 and is engaged in the commercial banking business under the Banking Act, trust business and foreign exchange business under the Financial Investment Services and Capital Market Act.

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 the 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 March 31, 2018, the common stock of the Bank amounts to 3,381,392 million Korean 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 year ended December 31, 2017, KDIC sold additional 33 million shares. As of March 31, 2018 and December 31, 2017, KDIC held 125 million shares (18.43% ownership interest), 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 880 branches and offices in Korea, and 23 branches and offices overseas as of March 31, 2018.

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

		Percentage of ownership (%)
Subsidiaries	Main business	March 31, 2018		December 31, 2017		Location		Financial statements as of (2018)
Woori Bank:
Woori FIS Co., Ltd.	System software development & maintenance		100.0		100.0		Korea		March 31
Woori Private Equity Asset Management Co., Ltd.	Finance		100.0		100.0		Korea		March 31
Woori Finance Research Institute Co., Ltd.	Other service business		100.0		100.0		Korea		March 31
Woori Card Co., Ltd.	Finance		100.0		100.0		Korea		March 31
Woori Investment Bank Co., Ltd	Other credit finance business		59.8		59.8		Korea		March 31
Woori Credit Information Co., Ltd.	Credit information		100.0		100.0		Korea		March 31
Woori America Bank	Finance		100.0		100.0		U.S.A.		March 31
Woori Global Markets Asia Limited	”		100.0		100.0		Hong Kong		March 31
Woori Bank China Limited	”		100.0		100.0		China		March 31
AO Woori Bank	”		100.0		100.0		Russia		March 31
PT Bank Woori Saudara Indonesia 1906 Tbk(*1)	”		79.9		79.9		Indonesia		March 31
Banco Woori Bank do Brasil S.A.	”		100.0		100.0		Brazil		March 31
Korea BTL Infrastructure Fund	”		99.9		99.9		Korea		March 31
Woori Fund Service Co., Ltd.	”		100.0		100.0		Korea		March 31
Woori Finance Cambodia PLC.	”		100.0		100.0		Cambodia		March 31
Woori Finance Myanmar Co., Ltd.	”		100.0		100.0		Myanmar		March 31
Wealth Development Bank	”		51.0		51.0		Philippines		March 31
Woori Bank Vietnam Limited	”		100.0		100.0		Vietnam		March 31
Kumho Trust First Co., Ltd. (*1)	Asset securitization		0.0		0.0		Korea		March 31
Asiana Saigon Inc. (*1)	”		0.0		0.0		Korea		March 31
Consus Eighth Co., LLC (*1)	”		0.0		0.0		Korea		March 31
KAMCO Value Recreation First Securitization Specialty Co., Ltd. (*1)	”		15.0		15.0		Korea		March 31
Hermes STX Co., Ltd. (*1)	”		0.0		0.0		Korea		March 31
BWL First Co., LLC (*1)	”		0.0		0.0		Korea		March 31
Deogi Dream Fourth Co., Ltd. (*1)	”		0.0		0.0		Korea		March 31
Jeonju Iwon Ltd. (*1)	”		0.0		0.0		Korea		March 31
Wonju I one Inc. (*1)	”		0.0		0.0		Korea		March 31
Heitz Third Co., Ltd. (*1)	”		0.0		0.0		Korea		March 31
Woorihansoop 1st Co., Ltd. (*1)	”		0.0		0.0		Korea		March 31
Electric Cable First Co., Ltd (*1)	”		0.0		0.0		Korea		March 31
Woori International First Co., Ltd. (*1)	”		0.0		0.0		Korea		March 31
Woori HJ First Co., Ltd. (*1)	”		0.0		0.0		Korea		March 31
Woori WEBST 1st Co., Ltd. (*1)	”		0.0		0.0		Korea		March 31
Wibihansoop 1st Co., Ltd. (*1)	”		0.0		0.0		Korea		March 31
HNLD 1st Inc.(*4)	”		—		0.0		Korea		March 31
Uri QS 1st Co., Ltd (*1)	”		0.0		0.0		Korea		March 31
Uri Display 1st Co., Ltd.(*1)	”		0.0		0.0		Korea		March 31
Tiger Eyes 2nd Co., Ltd.(*1)	”		0.0		0.0		Korea		March 31
Woori Serveone 1st Co., Ltd. (*1)	”		0.0		0.0		Korea		March 31
Uri Display 2nd Co.,Ltd. (*1)	”		0.0		—		Korea		March 31
HeungkukWoori Tech Company Private Placement Investment Trust No. 1 and 6 beneficiary certificates (*2)	Securities investment and others		—		—		Korea		March 31
Principle Guaranteed Trust (*3)	Trust		0.0		0.0		Korea		March 31
Principle and Interest Guaranteed Trust (*3)	”		0.0		0.0		Korea		March 31
Woori Investment Bank:									March 31
Dongwoo First Securitization Specialty Co., Ltd. (*1)	Asset securitization		5.0		5.0		Korea		March 31
Seari First Securitization Specialty Co., Ltd. (*1)	”		5.0		5.0		Korea		March 31
Namjong 1st Securitization Specialty Co., Ltd. (*1)	”		5.0		5.0		Korea		March 31
Bukgeum First Securitization Specialty Co., Ltd. (*1)	”		5.0		5.0		Korea		March 31

		Percentage of ownership (%)
Subsidiaries	Main business	March 31, 2018		December 31, 2017		Location	Financial statements as of (2018)
Woori Card Co., Ltd.:
TUTU Finance-WCI Myanmar Co., Ltd.	Finance		100.0		100.0	Myanmar	March 31
Woori Card one of 2017-1 Securitization Specialty Co., Ltd. (*1)	Asset securitization		0.5		0.5	Korea	March 31
Woori Card one of 2017-2 Securitization Specialty Co., Ltd. (*1)	”		0.5		0.5	Korea	March 31

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

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

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

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

(3) As of March 31, 2018 and December 31, 2017, 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 March 31, 2018
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		90.1
IGIS Global Private Placement Real Estate Fund No. 148-1 (*)	Korea	Securities Investment		75.0
IGIS Global Private Placement Real Estate Fund No. 148-2 (*)	Korea	Securities Investment		75.0
MIRAE ASSET SEOUL RING EXPRESSWAY PRIVATE SPECIAL ASSET FUND I (*)	Korea	Securities Investment		66.7
HANGANG SEWAGE TREATMENT PLANT FUND (*)	Korea	Securities Investment		55.6

(*) 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, 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		90.1
IGIS Global Private Placement Real Estate Fund No. 148-1 (*)	Korea	Securities Investment		75.0
IGIS Global Private Placement Real Estate Fund No. 148-2 (*)	Korea	Securities Investment		75.0

(*) 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 IFRS for the Group’s consolidated financial statements is as follows (Unit: Korean Won in millions):

	As of and for the three months ended March 31, 2018
	Assets		Liabilities		Operating revenue		Net income (loss) attributable to owners			Comprehensive income (loss) attributable to owners
Woori FIS Co., Ltd.		97,388		69,290		72,678		(4,447	)		(4,481	)
Woori Private Equity Asset Management Co., Ltd.		42,280		2,702		286		(654	)		(647	)
Woori Finance Research Institute Co., Ltd.		4,104		499		1,386		165			165
Woori Card Co., Ltd.		8,744,775		7,132,983		463,393		39,316			36,345
Woori Investment Bank Co., Ltd.		2,458,089		2,162,084		48,406		6,436			6,296
Woori Credit Information Co., Ltd.		34,228		6,737		8,982		367			367
Woori America Bank		1,960,890		1,683,720		21,203		6,535			5,169
Woori Global Markets Asia Limited		319,918		208,204		2,805		633			(51	)
Woori Bank (China) Limited		5,327,620		4,808,126		185,272		2,886			21,574
AO Woori Bank		244,467		190,738		3,767		1,107			1,234
PT Bank Woori Saudara Indonesia 1906 Tbk		2,293,523		1,816,074		46,859		10,589			2,350
Banco Woori Bank do Brasil S.A.		200,014		167,209		4,101		613			495
Korea BTL Infrastructure Fund		774,171		285		7,312		6,376			6,376
Woori Fund Service Co., Ltd.		12,909		1,006		2,409		491			491
Woori Finance Cambodia PLC.		63,345		44,398		2,573		604			517
Woori Finance Myanmar Co., Ltd.		18,957		5,689		1,357		401			339
Wealth Development Bank		178,787		146,097		3,108		120			(1,551	)
Woori Bank Vietnam Limited		748,591		604,643		13,997		2,206			980
Money trust under the FISCM Act (*)		1,561,421		1,531,759		11,897		(250	)		(250	)
Structured entity for the securitization of financial assets		1,043,453		1,448,547		19,794		12,299			2,931
Structured entity for the investments in securities		32,987		110		272		(146	)		(146	)

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

	As of and for the year ended December 31, 2017
	Assets		Liabilities		Operating revenue		Net income (loss) attributable to owners			Comprehensive income (loss) attributable to owners
Woori FIS Co., Ltd.		103,932		71,386		252,460		1,940			(2,963	)
Woori Private Equity Asset Management Co., Ltd.		42,894		2,670		7,257		(4,114	)		(4,074	)
Woori Finance Research Institute Co., Ltd.		3,790		350		4,733		83			64
Woori Card Co., Ltd.		8,605,993		6,973,705		1,771,157		101,214			107,321
Woori Investment Bank Co., Ltd.		1,880,157		1,588,610		183,376		20,023			20,210
Woori Credit Information Co., Ltd.		33,298		6,175		31,580		861			752
Woori America Bank		1,954,301		1,679,248		81,337		11,869			(16,833	)
Woori Global Markets Asia Limited		290,226		178,343		11,345		1,922			(12,544	)
Woori Bank (China) Limited		4,960,637		4,458,683		388,913		13,809			(15,252	)
AO Woori Bank		201,704		149,101		15,656		4,748			1,217
PT Bank Woori Saudara Indonesia 1906 Tbk		2,230,617		1,745,171		192,485		38,488			(18,689	)
Banco Woori Bank do Brasil S.A.		213,889		181,544		20,455		1,843			(2,840	)
Korea BTL Infrastructure Fund		786,480		301		30,240		26,390			26,390
Woori Fund Service Co., Ltd.		12,653		1,242		9,021		1,398			1,398
Woori Finance Cambodia PLC.		51,304		32,873		5,895		983			(473	)
Woori Finance Myanmar Co., Ltd.		18,236		5,307		2,506		791			15
Wealth Development Bank		191,049		156,808		13,632		1,323			(1,093	)
Woori Bank Vietnam Limited		775,758		632,160		29,698		2,436			(15,347	)
Money trust under the FISCM Act (*)		1,560,672		1,530,760		44,344		582			582
Structured entity for the securitization of financial assets		867,583		1,275,719		22,730		1,179			(2,800	)
Structured entity for the investments in securities		34,939		76		377		(475	)		(38,592	)

(*) 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.

• 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 Group.

(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 IFRS 10 that the Group has no controlling power over such structured entities, the entities are not consolidated. The nature of interests, which the Group retains, and the risks, to which the Group is exposed, of the unconsolidated structured entities are as follows:

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

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

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

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

Total assets of the unconsolidated structured entities, the carrying value of the related items recorded, the maximum exposure to risks, and the loss recognized in conjunction with the unconsolidated structured entities as of March 31, 2018 and December 31, 2017 are as follows (Unit: Korean Won in millions):

	March 31, 2018
	Asset securitization vehicle		Structured finance		Investment Funds
Total asset of the unconsolidated structured entities		8,630,579		22,102,269		13,500,328
Assets recognized in the consolidated financial statements related to the unconsolidated structured entities		3,440,123		2,099,036		1,238,464
Financial assets at FVTPL		248,544		63,733		982,111
Financial assets at FVTOCI		857,768		49,797		—
Financial assets at amortized cost		2,333,604		1,981,294		16,481
Investments in joint ventures and associates		—		—		239,872
Derivative assets		207		4,212		—
Liabilities recognized in the consolidated financial statements related to the unconsolidated structured entities		1,703		2,067		—
Derivative liabilities		529		966		—
Other liabilities (including provisions)		1,174		1,101		—
The maximum exposure to risks		4,282,274		2,822,711		1,238,464
Investments		3,440,123		2,099,036		1,238,464
Credit facilities		842,151		723,675		—
Loss recognized on unconsolidated structured entities		357		6,513		4,350

	December 31, 2017
	Asset securitization vehicle		Structured finance		Investment Funds
Total asset of the unconsolidated structured entities		7,295,601		40,172,830		13,641,135
Assets recognized in the consolidated financial statements related to the unconsolidated structured entities		3,215,159		2,314,043		1,138,523
Loans and receivables		43,180		1,969,760		—
Financial assets held for trading		—		233,428		10,160
AFS financial assets		902,390		106,819		904,774
HTM financial assets		2,269,451		—		—
Investments in joint ventures and associates		—		—		223,589
Derivative assets		138		4,036		—
Liabilities recognized in the consolidated financial statements related to the unconsolidated structured entities		1,433		1,506		—
Derivative liabilities		575		968		—
Other liabilities (including provisions)		858		538		—
The maximum exposure to risks		4,032,531		2,918,448		1,138,523
Investments		3,215,159		2,314,043		1,138,523
Credit facilities		817,372		604,405		—
Loss recognized on unconsolidated structured entities		837		3,939		5,993

(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

	March 31, 2018		December 31, 2017
Woori Investment Bank		122,363		119,111
PT Bank Woori Saudara Indonesia 1906 Tbk		63,268		64,877
Wealth Development Bank		16,018		16,778

2) Net income attributable to non-controlling interests

	For the three months ended March 31, 2018		For the three months ended March 31, 2017
Woori Investment Bank		2,585		1,761
PT Bank Woori Saudara Indonesia 1906 Tbk		2,131		3,238
Wealth Development Bank		59		250

3) Dividends to non-controlling interests

	For the three months ended March 31, 2018		For the three months ended March 31, 2017
PT Bank Woori Saudara Indonesia 1906 Tbk		2,082		—

2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

(1) Basis of presentation

The Group’s consolidated interim financial statements are prepared in accordance with International Accounting Standards (“IAS”) 34, Interim Financial Reporting and IFRS 10, Consolidated Financial Statements. It is necessary to use the annual consolidated financial statements for the year ended December 31, 2017 for understanding of the accompanying interim financial statements.

Unless stated below, the accounting policies applied in preparing the accompanying consolidated interim financial statements have been applied consistently with the annual consolidated financial statements as of and for the year ended December 31, 2017.

1) The Group has newly adopted the following amendment to IFRS that affected the Group’s accounting policies:

• Amendment to IFRS 9 – Financial instruments (enacted)

The Group applied for the first time as of January 1, 2018, the amendment to IFRS 9 and other standards related to IFRS 9 introduces new rules: 1) classification and measurement of financial assets and financial liabilities, 2) impairment of financial assets, and 3) hedge accounting.

The Group did not reclassify the prior period when applying the Standard, and accordingly the comparative financial statements have not been restated.

The main contents of the new accounting standard and the effect on the financial statements of the Group are as follows:

a) Classification and measurement of financial assets and financial liabilities

All financial assets included in the scope of IFRS 9 are subsequently measured at amortized cost or fair value based on the business model for the management of financial assets and the nature of the contractual cash flows.

Debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortized cost at the end of subsequent accounting periods (financial assets at amortized cost).

Debt instruments that are held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets, and that have contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, are generally measured at fair value through other comprehensive income (financial assets at fair value through other comprehensive income (“FVTOCI”)).

All other debt investments and equity investments are measured at their fair value at the end of subsequent accounting periods (financial assets at fair value through profit or loss (“FVTPL”)).

Notwithstanding the foregoing, the Group may make the following irrevocable choice or designation at the time of initial recognition of financial assets.

The Group may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument within the scope of this Standard that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3(R) applies.

At initial recognition, financial assets at amortized cost or FVTOCI may be irrevocably designated financial assets measured at FVTPL if doing so eliminate or significantly reduce a measurement or recognition inconsistency.

During the period, there are no financial assets at amortized cost or FVTOCI designated financial assets at FVTPL to eliminate accounting mismatch.

When debt instruments measured at FVTOCI are removed, the cumulative gain or loss recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment. On the other hand, for equity instruments designated as other comprehensive income, cumulative gains or losses previously recognized in other comprehensive income are not subsequently reclassified to profit or loss. Debt instruments measured subsequently at amortized cost of other comprehensive income or loss are eligible for impairment if criteria of impairments are satisfied.

The classification and measurement of financial assets and financial liabilities in accordance with IFRS 9 and IAS 39 as of January 1, 2018 are as follows (Unit: Korean Won in millions):

			December 31, 2017		January 1, 2018
Account subject	Classification according to IAS 39	Classification according to IFRS 9	Classification according to IAS 39		Classification according to IFRS 9
Deposit	Loans and receivables	Loans and other financial assets at amortized cost		8,870,835		8,870,835
Deposit	Financial assets at FVTPL	Financial assets at FVTPL		25,972		25,972
Debt securities	Financial assets at FVTPL	Financial assets at FVTPL		2,654,027		2,654,027
Debt securities	AFS financial assets	Financial assets at FVTPL		46,855		46,855
Debt securities	AFS financial assets	Financial assets at FVTOCI		12,874,209		12,874,209
Debt securities	AFS financial assets	Securities at amortized cost		308,181		322,300
Debt securities	HTM financial assets	Securities at amortized cost		16,749,296		16,749,296
Equity securities	Financial assets at FVTPL	Financial assets at FVTPL		47,304		47,304
Equity securities	AFS financial assets	Financial assets at FVTPL (*)		1,273,498		1,274,716
Equity securities	AFS financial assets	Financial assets at FVTOCI		850,207		850,207
Loans(*)	Loans and receivables	Financial assets at FVTPL (*)		279,032		280,001
Loans	Loans and receivables	Loans and other financial assets at amortized cost		253,014,491		253,014,491
Derivatives	Financial assets at FVTPL	Financial assets at FVTPL (*)		3,115,775		3,113,638
Derivatives	Derivatives	Derivatives		59,272		59,272
Other financial assets	Loans and receivables	Loans and other financial assets at amortized cost		6,772,088		6,772,088
Total financial assets				306,941,042		306,955,211

(*) Under IAS 39, the embedded derivatives out of hybrid financial instruments are accounted for as derivatives assets or liabilities if the requirements of separating are met and the rest of principle contracts in those instruments are recorded as available-for-sale financial assets or loans and receivables, respectively. Since IFRS 9 requires financial instruments be accounted for based on the terms of the entire financial instruments, the hybrid financial instruments are revalued and recorded as financial assets at fair value through profit or loss.

Account subject	Classification according to IAS 39	Classification according to IFRS 9	December 31, 2017		January 1, 2018
			Classification according to IAS 39		Classification according to IFRS 9
Deposit due to customers	Financial liabilities at FVTPL	Financial liabilities at FVTPL		25,964		25,964
Deposit due to customers	Deposit due to customers	Deposit due to customers		234,695,084		234,695,084
Borrowings	Borrowings	Borrowings		14,784,706		14,784,706
Debentures	Debentures	Debentures		27,869,651		27,869,651
Debentures	Financial liabilities at FVTPL	Financial liabilities at FVTPL		91,739		91,739
Equity-linked securities	Financial liabilities at FVTPL	Financial liabilities at FVTPL		160,057		160,057
Derivatives liabilities	Financial liabilities at FVTPL	Financial liabilities at FVTPL		3,150,149		3,150,149
Derivatives liabilities	Derivatives liabilities	Derivatives liabilities		67,754		67,754
Other financial liabilities	Other financial liabilities	Other financial liabilities		13,892,461		13,892,461
Provision for financial guarantee	Provision for financial guarantee	Provision for financial guarantee		71,697		71,697
Total financial liabilities				294,809,262		294,809,262

No financial assets and financial liabilities designated as FVTPL before the initial application of IFRS 9 were reclassified to financial assets and liabilities at FVTOCI or amortized cost. After the adoption of IFRS 9, there are no financial assets and financial liabilities designated at FVTPL after the date of first application of IFRS 9.

As of the initial adoption of IFRS 9, there were no financial assets at FVTPL or FVTOCI reclassified to the amortization cost measurement category.

As of the date of first adoption of IFRS 9, the amount of valuation gain or loss and fair value of financial assets that would have been recognized in the book, had the entity decided not to reclassify financial assets at FVTPL or FVTOCI that has been reclassified into financial assets at amortized cost, is as follows: (Unit: Korean Won in millions)

Account subject	Category before the adoption of IFRS 9	Amount of valuation gain/loss had it not been reclassified		Fair value
Debt securities	AFS securities		382		305,281

b) Impairment of financial assets

The impairment model under IFRS 9 reflects expected credit losses, as opposed to incurred credit losses under IAS 39. Under the impairment approach in IFRS 9, it is no longer necessary for a credit event to have occurred before credit losses are recognized. Instead, the Group accounts for expected credit losses and changes in those expected credit losses. The amount of expected credit losses should be updated at each reporting date to reflect changes in credit risk since initial recognition.

The Group is required to recognize the expected credit losses for debt instruments measured at amortized cost or fair value through other comprehensive income, and loan commitments and financial guarantee contracts that are subject to the impairment provisions of IFRS 9. In particular, when the credit risk of the financial instrument is significantly increased after initial recognition, or when the credit quality of the financial asset is impaired, the allowance for losses is measured as the expected credit loss for the whole period. If the credit risk of a financial instrument does not increase significantly after initial recognition (excluding financial assets where credit is impaired), the Group measures the allowance for losses on the financial instruments at the amount equivalent to the expected 12-month credit loss.

Management determines the credit risk at the date of initial recognition of the financial instrument in accordance with IFRS 9 and provides a reasonable and supportive measure that can be used without undue cost or effort in comparison with the credit risk of the initial application date (January 1, 2018) We used information that could be used to assess the impairment of the Group’s financial assets, lending arrangements and financial guarantees at the date of initial application. As of January 1, 2018, the evaluation results are as follows (Unit: Korean Won in millions):

Account subject	Classification according to IAS 39	Classification according to IFRS 9	Allowance for credit losses per IAS 39 (A)		Allowance for credit losses per IFRS 9 (B)		Increases (B-A)
Deposit	Loans and receivables	Loans and other financial assets at amortized cost		2,458		3,092		634
Debt securities
Available-for-sale debt instruments	Available-for-sale financial assets	Financial assets at FVTOCI		—		4,293		4,293
Maturity debt instruments	Held-to-maturity financial assets	Securities at amortized cost		—		5,078		5,078
Loans and other financial assets	Loans and receivables	Loans and other financial assets at amortized cost		1,827,785		2,075,752		247,967
Payment guarantee				183,247		192,980		9,733
Loan agreement				66,115		104,985		38,870
Total				2,079,605		2,386,180		305,873

c) Classification and measurement of financial liabilities

One of the major changes related to the classification and measurement of financial liabilities as a result of the adoption of IFRS 9 is the change in the fair value of financial liabilities measured at fair value through profit or loss. The Group recognizes the effect of changes in the credit risk of financial liabilities designated as fair value measurement in other comprehensive income, except for cases where it causes or disproves accounting misstatement of the profit or loss. Changes in the financial liabilities’ credit risk are recognized in other comprehensive income. Changes in fair value due to credit risk of financial liabilities are not subsequently reclassified to profit or loss, but are replaced with retained earnings when financial liabilities are eliminated.

In accordance with IAS 39, the entire of changes in fair value of financial liabilities designated as at FVTPL are recognized in profit or loss. As of March 31, 2018, the Group designated 251,796 million Korean won of FVTOCI out of 294,809,262 million of financial liabilities, and recognized 133 million Korean won as other comprehensive loss in relation to the credit risk of financial liabilities.

d) Hedge accounting

The new hedge accounting model maintains three types of hedge accounting. However, it is introduced more flexibility in the types of transactions that are eligible for hedge accounting and is expanded the types of hedging instruments and non-financial hedge items that qualify for hedge accounting. As a whole, it has been amended and replaced by the principle of “economic relationship” between the hedged item and the hedging instrument. Retrospective assessment of the hedging effectiveness is no longer required. Additional disclosure requirements have been introduced in relation to the Group’s risk management activities.

In accordance with the transitional provisions of IFRS 9 on hedge accounting, the Group adopted the hedge accounting provisions of IFRS 9 prospectively from January 1, 2018. As of the date of initial application, the Group has considered that the hedging relationship in the Group in accordance with IAS 39 is appropriate for hedge accounting under IFRS 9. The hedging relationship between the hedging instrument and the hedged item is consistent, therefore, all hedging relationships are consistent with the effectiveness assessment requirements of IFRS 9. The Group has not designated a hedging relationship in accordance with IFRS 9 as a hedging relationship in which the hedge relationship would not have met the requirements for hedge accounting under IAS 39.

The Group continues to designate fair value changes in interest rate swaps as a hedging instrument in the fair value hedge relationship.

e) Effect on equity as a result of adoption of IFRS 9

The effect on equity due to the adoption of IFRS 9 as of January 1, 2018 is as follows (Unit: Korean Won in millions):

• Other comprehensive income

	Amount
Beginning balance (prior to IFRS 9)		(89,722	)
Reclassification		(392,177	)
Reclassification of available-for-sale financial assets to financial assets at Amortized cost		494
Reclassification of available-for-sale financial assets to financial assets at FVTPL		(152,124	)
Recognition of expected credit losses of debt securities at FVTOCI		4,293
Reversal of impairment losses of equity securities recognized due to reclassification of equity securities at FVTOCI to financial assets at FVTPL		(397,508	)
Effect on credit risk of financial liabilities		(133	)
Others		3,005
Income tax effect		149,796
Ending balance (based on IFRS 9)		(481,899	)

• Retained earnings impact

	Amount
Beginning balance (prior to IFRS 9)		15,620,006
Reclassification		177,091
Reclassification of available-for-sale financial assets to financial assets at Amortized cost		(494	)
Reclassification of available-for-sale financial assets to financial assets at FVTPL		152,124
Recognition of expected credit losses of debt instruments at FVTOCI		(4,293	)
Reversal of impairment losses of equity securities recognized due to reclassification of equity securities at FVTOCI to financial assets at FVTPL		397,508
Effect on revaluation of financial assets at amortized cost from loan and receivables or AFS financial assets		282
Recognition of expected credit losses of financial assets at amortized cost which previously loan and receivables		(240,563	)
Effect of payment guarantees / unused commitments on liabilities		(48,603	)
Effect on credit risk of financial liabilities		133
Others		(4,521	)
Income tax effect		(74,482	)
Ending balance (based on IFRS 9)		15,797,097

• Amendments to IFRS 15 – Revenue from contracts with customers (enacted)

The Group adopted IFRS 15 for the first time and applied the retrospective application of the cumulative effect of the first application of IFRS 15 as of January 1, 2018. In addition, the Standard has been retrospectively applied only to contracts that are not completed on the date of initial application, and all contractual changes made prior to the first application date are not rewritten.

• Amendments to IFRS 2 – Classification and Measurement of Share-based Payment Transactions

The amendments clarify the following; i) In estimating the fair value of a cash-settled share-based payment, the accounting for the effects of vesting and non-vesting conditions should follow the same approach as for equity-settled share-based payments ii) Where tax law or regulation requires an entity to withhold a specified number of equity instruments equal to the monetary value of the employee’s tax obligation to meet the employee’s tax liability which is then remitted to the tax authority, i.e. the share-based payment arrangement has a ‘net settlement feature’, such an arrangement should be classified as equity-settled in its entirety, provided that the share-based payment would have been classified as equity-settled had it not included the net settlement feature, iii) A modification of a share-based payment that changes the transaction from cash-settled to equity-settled should be accounted for as follows; a) the original liability is derecognized; b) the equity-settled share-based payment is recognized at the modification date fair value of the equity instrument granted to the extent that services have been rendered up to the modification date; and c) any difference between the carrying amount of the liability at the modification date and the amount recognized in equity should be recognized in profit or loss immediately.

• Amendments to IAS 40 – Transfers of Investment Property

The amendments clarify that a transfer to, or from, investment property necessitates an assessment of whether a property meets, the definition of investment property, supported by observable evidence that a change in use has occurred. The amendments further clarify that the situations listed IAS 40 are not exhaustive and that a change in use is possible for properties under construction (i.e. a change in use in not limited to completed properties).

• Amendments to IFRIC 22 – Foreign Currency Transactions and Advance Consideration

IFRIC 22 addresses how to determine the ‘date of transaction’ for the purpose of determining the exchange rate to use on initial recognition of an asset, expense or income, when consideration for that item has been paid or received in advance in a foreign currency which resulted in the recognition of a non-monetary asset or non-monetary liability (e.g. a non-refundable deposit or deferred revenue).

The Interpretation specifies that the date of transaction is the date on which the entity initially recognizes the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration. If there are multiple payments or receipts in advance, the Interpretation requires an entity to determine the date of transaction for each payment or receipt of advance consideration.

Other than the application of IFRS 9 Financial Instruments, there are several annual improvements in the current period, but the application of the amendments has had no material effect on the Group’s consolidated financial statements.

• Annual Improvements to IFRS 2014-2016 Cycle

The amendments include partial amendments to IFRS 1 ‘First-time Adoption of IFRS’ and IAS 28 ‘Investments in Associates and Joint Ventures.’ Amendments to IAS 28 provide that an investment company such as a venture capital investment vehicle may selectively designate each of its investment in associates and/or joint ventures to be measured at FVTPL, and that such designation must be made at the time of each investment’s initial recognition. In addition, when non-investment companies apply equity method to investment in associates and/or joint ventures that are investment companies, these companies may apply the same fair value measurement used by the said associates to value their own subsidiaries. This accounting treatment may be selectively applied to each associate.

There are no significant impacts on financial statements due to newly adopted the following amendment to IFRS expect of IFRS 9.

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

• IFRS 16—Leases

IFRS 16 introduces a comprehensive model for the identification of lease arrangements and accountings treatments for both lessors and lessees. IFRS 16 will supersede the current lease guidance including IAS 17 Leases and the related interpretations from the financial year beginning on or after January 1, 2019.

IFRS 16 distinguishes leases and service contracts on the basis of whether an identified asset is controlled by a customer. Distinctions of operating leases and finance leases are removed for lessee accounting, and is replaced by model where a right-of-use asset and corresponding liability have to be recognized for all leases by lessees except for short-term leases and leases of low value assets.

The right-of-use asset is initially measured at cost and subsequently measured at cost (subject to certain exceptions) less accumulated depreciation and impairment losses, adjusted for any remeasurement of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at that date. Subsequently, the lease liability is adjusted for interest and lease payments, as well as the impact of lease modifications, amongst others. Furthermore, the classification of cash flows will also be affected as operating lease payments under IAS 17 are presented as operating cash flows; whereas under the IFRS 16 model, the lease payments will be split into a principal and an interest portion which will be presented as financing and operating cash flows respectively.

In contrast to lessee accounting, IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17, and continues to require a lessor to classify a lease either as an operating lease or a finance lease.

According to the preliminary assessment of the Group, the lease agreements entered into by the Group at the end of the quarter are expected to meet the definition of lease under the Standard, and accordingly, if the Group adopts the Standard, it applies to all leases except short—term leases and leases of low value assets, we will recognize the licensed assets and liabilities accordingly. The Group is analyzing the potential impact of these standards.

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, 2017.

4. RISK MANAGEMENT

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

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

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

(1) Credit risk

Credit risk represents the possibility of financial losses incurred when the counterparty fails to fulfill its contractual obligations. The 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.

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):

		March 31, 2018		December 31, 2017
Loans and other financial assets	Korean treasury and government agencies		21,273,432		—
	Banks		22,368,350		—
	Corporates		91,829,493		—
	Consumers		142,637,831		—
	Subtotal		278,109,106		—
Loans and receivables	Korean treasury and government agencies		—		8,823,584
	Banks		—		26,845,309
	Corporates		—		90,570,551
	Consumers		—		140,866,760
	Subtotal		—		267,106,204
Financial assets at FVTPL	Deposit		25,311		—
	Debt securities		2,236,626		—
	Loans and receivables		294,975		—
	Derivative assets		2,612,869		—
	Subtotal		5,169,781		—
Financial assets at FVTPL	Deposit		—		25,972
	Debt securities		—		2,644,333
	Financial assets designated at FVTPL		—		9,694
	Derivative assets		—		3,115,775
	Subtotal		—		5,795,774
Financial assets at FVTOCI	Debt securities		12,352,041		—
AFS financial assets	Debt securities		—		13,229,244
Securities at amortized cost	Debt securities		16,831,342		—
HTM financial assets	Debt securities		—		16,749,296
Derivative assets	Derivative assets (hedging)		39,272		59,272
Off-balance accounts	Guarantees		12,408,153		12,859,715
	Loan commitments		96,822,354		80,760,325
	Subtotal		109,230,507		93,620,040
	total		421,732,049		396,559,830

a) Credit risk exposure by geographical areas

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

	March 31, 2018
	Korea		China		USA		UK		Japan		Others (*)		Total
Loans and other financial assets at amortized cost		260,285,977		4,778,158		3,700,301		1,118,226		396,238		7,830,206		278,109,106
Securities at amortized cost		16,684,661		—		70,265		—		—		76,416		16,831,342
Financial assets at FVTPL		5,002,243		3,035		—		90,941		—		73,562		5,169,781
Financial assets at FVTOCI		11,483,419		25,470		147,287		7,462		2,165		686,238		12,352,041
Derivative assets		13,269		—		—		26,003		—		—		39,272
Off-balance accounts		107,070,500		685,895		176,295		63,204		28,979		1,205,634		109,230,507
Total		400,540,069		5,492,558		4,094,148		1,305,836		427,382		9,872,056		421,732,049

	December 31, 2017
	Korea		China		USA		UK		Japan		Others (*)		Total
Loans and receivables		250,678,479		4,104,912		2,823,247		1,094,988		381,890		8,022,688		267,106,204
Financial assets at FVTPL		5,551,870		2,937		—		148,955		—		92,012		5,795,774
AFS debt securities		12,407,602		52,259		151,131		—		—		618,252		13,229,244
HTM securities		16,606,692		—		63,732		—		—		78,872		16,749,296
Derivative assets		16,590		—		—		42,682		—		—		59,272
Off-balance accounts		91,603,852		529,193		172,570		66,974		25,039		1,222,412		93,620,040
Total		376,865,085		4,689,301		3,210,680		1,353,599		406,929		10,034,236		396,559,830

(*) 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):

	March 31, 2018
	Service		Manufacturing		Finance and insurance		Construction		Individuals		Others		Total
Loans and other financial assets at amortized cost		47,848,927		34,374,432		46,046,354		3,815,554		136,074,168		9,949,671		278,109,106
Securities at amortized cost		1,142,618		—		11,012,940		274,348		—		4,401,436		16,831,342
Financial assets at FVTPL		112,888		135,964		3,907,115		48,209		1,523		964,082		5,169,781
Financial assets at FVTOCI		605,414		33,308		7,011,364		141,220		—		4,560,735		12,352,041
Derivative assets		—		—		39,272		—		—		—		39,272
Off-balance accounts		18,334,145		21,396,031		9,490,345		3,657,108		49,665,145		6,687,733		109,230,507
Total		68,043,992		55,939,735		77,507,390		7,936,439		185,740,836		26,563,657		421,732,049

	December 31, 2017
	Service		Manufacturing		Finance and insurance		Construction		Individuals		Others		Total
Loans and receivables		47,192,641		34,502,509		38,260,051		3,574,746		133,094,287		10,481,970		267,106,204
Financial assets at FVTPL		100,766		83,239		4,640,068		15,073		1,040		955,588		5,795,774
AFS debt securities		707,737		37,719		7,331,774		153,534		—		4,998,480		13,229,244
HTM securities		1,348,754		—		10,962,149		296,214		—		4,142,179		16,749,296
Derivative assets		—		—		59,272		—		—		—		59,272
Off-balance accounts		16,892,926		21,427,378		9,841,379		3,842,479		36,928,554		4,687,324		93,620,040
Total		66,242,824		56,050,845		71,094,693		7,882,046		170,023,881		25,265,541		396,559,830

3) Maximum exposure to credit risk

The allowance to be recognized under IFRS 9 is the amount of expected 12-month credit loss or the expected lifetime credit loss, according to the three stages of credit risk deterioration since initial recognition as shown below.

	Stage 1	Stage 2	Stage 3
	Credit risk has not significantly increased since initial recognition(*)	Credit risk has significantly increased since initial recognition	Credit has been impaired
Allowance for expected credit losses	Expected 12-month credit losses:	Expected lifetime credit losses:
	Expected credit losses due to possible defaults on financial instruments within a 12-month period from the year-end.	Expected credit losses from all possible defaults during the expected lifetime of the financial instruments.

(*) Credit risk may be considered to not have been significantly increased when credit risk is low at year-end.

The Group has estimated the allowance for credit losses based on historical experience losses with taken account of forward -looking information.

The probability of default and loss at given default per financial assets considering account of type of borrowers, credit rate grade, portfolio are used in estimation of allowance for expected credit losses and those factors are reviewed periodically to reduce the difference of expected losses and actual losses.

The Group also measure expected credit losses by using supportive and reasonable macroeconomic indicators, such as economic growth rates, interest rates, and composite stock indexes. The methods for the estimation of forward- looking are also regularly reviewed.

At the end of each reporting period, the Group assesses whether there is a significant increase in credit risk at the end of the reporting period compared to its initial recognition. The Group uses credit ratings, asset soundness, early warning systems, and delinquency days to determine whether the credit risk has significantly increased.

The financial assets are impaired if the following conditions are met;

• The principal and interest of the loan has been overdue for more than 90 days due to the serious deterioration of the credit condition,

• It is deemed that the borrowers will not pay any portion of the debts without actions of recourse such as the disposition of the collateral is not taken

• Objective evidence of impairment of financial assets are identified

a) Financial assets

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

	March 31, 2018
	Stage 1				Stage 2				Stage 3		Total		Allowance for loan losses			Total, net		Collateral value of impaired asset
	Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Above appropriate credit rating (*1)		Less than a limited credit rating (*2)
Loans and other financial assets at amortized cost		248,626,852		18,537,458		6,130,985		4,728,736		2,176,372		280,200,403		(2,091,297	)		278,109,106		806,638
Korean treasury and government agencies		21,278,412		—		—		—		—		21,278,412		(4,980	)		21,273,432		—
Banks		22,065,007		29		321,774		13		1		22,386,824		(18,474	)		22,368,350		—
Corporates		72,670,492		15,713,892		733,767		2,582,292		1,600,366		93,300,809		(1,471,316	)		91,829,493		585,356
General business		43,590,406		5,880,647		635,409		1,062,966		1,321,308		52,490,736		(1,102,513	)		51,388,223		434,107
Small- and medium-sized enterprise		24,700,820		9,134,524		98,358		1,293,767		232,730		35,460,199		(328,067	)		35,132,132		129,792
Project financing and others		4,379,266		698,721		—		225,559		46,328		5,349,874		(40,736	)		5,309,138		21,457
Consumers		132,612,941		2,823,537		5,075,444		2,146,431		576,005		143,234,358		(596,527	)		142,637,831		221,282
Securities at amortized cost		16,786,430		49,958		—		—		—		16,836,388		(5,046	)		16,831,342		—
Financial assets at FVTOCI (*3)		10,518,214		1,803,630		30,197		—		—		12,352,041		(3,955	)		12,352,041		—
Total		275,931,496		20,391,046		6,161,182		4,728,736		2,176,372		309,388,832		(2,100,298	)		307,292,489		806,638

(*1) Credit grade of corporates are AAA ~ BBB, and consumers are grades 1 ~ 6.

(*2) Credit grade of corporate are BBB- ~ C, and consumers are grades 7 ~ 10.

(*3) Other Financial Assets designated at Fair FVTOCI has not been disclosed after deducting provisions because the carrying amount does not decrease.

• Loans and receivables

	December 31, 2017
					Corporates
	Korean treasury and government agencies		Banks		General business		Small and medium sized enterprise		Project financing and others		Subtotal		Consumers		Total
Loans and receivables neither overdue nor impaired		8,825,767		26,861,286		50,463,112		34,107,547		5,547,950		90,118,609		139,886,407		265,692,069
Loans and receivables overdue but not impaired		8		—		65,616		63,067		—		128,683		878,406		1,007,097
Impaired loans and receivables		—		—		1,402,131		251,431		46,717		1,700,279		537,001		2,237,280
Total		8,825,775		26,861,286		51,930,859		34,422,045		5,594,667		91,947,571		141,301,814		268,936,446
Allowance for credit losses		2,191		15,977		1,078,733		267,162		31,125		1,377,020		435,054		1,830,242
Total, net		8,823,584		26,845,309		50,852,126		34,154,883		5,563,542		90,570,551		140,866,760		267,106,204

• Debt securities

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

	December 31, 2017
	Financial assets at FVTPL (*)		AFS debt securities		HTM securities		Total
AAA		1,685,099		9,897,689		15,806,327		27,389,115
AA- ~ AA+		722,923		2,386,567		888,547		3,998,037
BBB- ~ A+		236,311		876,482		52,188		1,164,981
Below BBB-		9,694		68,506		2,234		80,434
Total		2,654,027		13,229,244		16,749,296		32,632,567

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

b) Guarantees and loan commitments

The credit quality of the guarantees and loan commitments on March 31, 2018 as follows (Unit: Korean won in millions):

	March 31, 2018
Financial assets	Stage 1				Stage 2				Stage3		Total
	Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Above appropriate credit rating (*1)		Less than a limited credit rating (*2)
Off-balance accounts
Guarantees		11,001,548		971,329		6,838		197,884		230,554		12,408,153
Loan commitments		91,114,718		3,736,304		1,403,617		565,064		2,651		96,822,354
Total		102,116,266		4,707,633		1,410,455		762,948		233,205		109,230,507

(*1) Credit grade of corporates are AAA ~ BBB, and consumers are grades 1 ~ 6.

(*2) Credit grade of corporate are BBB- ~ C, and consumers are grades 7 ~ 10.

4) Collateral and other credit enhancements

There have been no significant changes in the value of collateral or other credit enhancements held by the Group during the current quarter or changes in collateral or other credit enhancements due to changes in the collateral policy of the Group. As of March 31, 2018, there are no financial assets that do not recognize the allowance for losses due to collateral.

(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.

a) Trading activities

The minimum, maximum and average VaR for the three months ended March 31, 2018 and for the year ended December 31, 2017, respectively, and the VaR as of March 31, 2018 and December 31, 2017, respectively, are as follows (Unit: Korean Won in millions):

	As of March 31, 2018			For the three months ended March 31, 2018									As of December 31, 2017			For the year ended December 31, 2017
Risk factor				Average			Maximum			Minimum						Average			Maximum			Minimum
Interest rate		2,406			3,723			4,992			2,053			4,183			3,799			4,918			2,467
Stock price		2,380			2,602			4,618			1,138			909			2,863			4,419			909
Foreign currencies		5,569			5,081			6,136			4,284			4,750			5,051			6,636			4,061
Commodity price		1			—			2			—			—			31			188			—
Diversification		(4,916	)		(4,657	)		(7,134	)		(2,661	)		(4,472	)		(4,621	)		(6,798	)		(2,067	)
Total VaR		5,440			6,749			8,614			4,814			5,370			7,123			9,363			5,370

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):

	March 31, 2018				December 31, 2017
	NII		NPV		NII		NPV
Base case		4,421,061		23,693,555		4,916,138		23,472,792
Base case (Prepay)		4,409,454		23,350,238		4,916,015		23,163,942
IR 100bp up		4,968,378		23,640,606		5,361,546		22,886,122
IR 100bp down		3,939,491		23,783,029		4,386,437		24,127,559
IR 200bp up		5,952,573		23,614,194		5,806,723		22,372,208
IR 200bp down		3,535,169		23,924,035		3,452,590		24,830,482
IR 300bp up		6,833,380		23,607,457		6,251,897		21,929,189
IR 300bp down		3,386,252		24,140,012		2,254,609		26,633,807

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):

March 31, 2018				December 31, 2017
EaR		VaR		EaR		VaR
	263,233		122,704		255,679		130,821

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

	March 31, 2018
	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 other financial assets at amortized cost		152,753,998		40,494,795		6,660,446		9,271,764		47,917,967		5,006,195		262,105,165
Financial assets at FVTOCI		3,288,142		2,148,319		2,352,608		1,741,042		2,776,897		231,919		12,538,927
Securities at amortized cost		2,787,164		1,729,074		1,660,492		1,611,856		9,212,690		354,270		17,355,546
Total		158,829,304		44,372,188		10,673,546		12,624,662		59,907,554		5,592,384		291,999,638
Liability:
Deposits due to customers		102,703,704		37,452,306		36,828,804		23,300,319		37,536,370		8,045		237,829,548
Borrowings		8,126,016		1,500,998		665,160		696,096		2,644,365		522,799		14,155,434
Debentures		2,490,511		1,010,869		1,771,211		2,171,694		18,673,960		2,812,414		28,930,659
Total		113,320,231		39,964,173		39,265,175		26,168,109		58,854,695		3,343,258		280,915,641

	December 31, 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		161,653,892		41,671,530		7,614,159		6,411,841		54,150,998		26,272,958		297,775,378
AFS financial assets		2,150,708		2,500,103		2,016,711		2,367,762		4,229,000		601,735		13,866,019
HTM financial assets		2,286,179		2,161,467		1,433,425		1,687,362		9,369,794		345,868		17,284,095
Total		166,090,779		46,333,100		11,064,295		10,466,965		67,749,792		27,220,561		328,925,492
Liability:
Deposits due to customers		106,815,564		37,750,367		25,117,556		27,585,458		37,518,878		91,246		234,879,069
Borrowings		9,865,249		1,056,579		412,966		437,431		2,709,010		479,827		14,961,062
Debentures		1,955,902		2,452,240		1,018,563		1,752,847		19,770,538		2,869,766		29,819,856
Total		118,636,715		41,259,186		26,549,085		29,775,736		59,998,426		3,440,839		279,659,987

3) Currency risk

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

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

	March 31, 2018
	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 other financial assets at amortized cost		24,365		25,979,438		133,617		1,338,123		27,480		4,662,772		1,474		1,933,233		4,304,684		38,218,250
Financial assets at FVTPL		75		80,200		92		925		—		—		38		49,535		93,809		224,469
Financial assets at FVTOCI		2,037		2,172,973		—		—		150		25,470		—		—		325,757		2,524,200
Securities at amortized cost		116		124,212		—		—		—		—		—		—		76,488		200,700
Total		26,593		28,356,823		133,709		1,339,048		27,630		4,688,242		1,512		1,982,768		4,800,738		41,167,619

	March 31, 2018
	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		55		58,706		414		4,150		—		—		37		48,241		110,503		221,600
Deposits due to customers		13,069		13,936,698		149,090		1,493,076		21,977		3,729,010		1,081		1,418,174		2,709,096		23,286,054
Borrowings		5,470		5,837,226		1,663		16,657		—		—		172		225,885		310,601		6,390,369
Debentures		3,722		3,969,933		—		—		—		—		—		—		283,787		4,253,720
Other financial liabilities		4,129		4,401,097		27,708		277,489		5,170		877,217		124		162,098		911,229		6,629,130
Total		26,445		28,203,660		178,875		1,791,372		27,147		4,606,227		1,414		1,854,398		4,325,216		40,780,873
Off-balance accounts		7,754		8,269,778		34,556		346,067		1,291		218,972		423		555,589		365,014		9,755,420

	December 31, 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		23,000		24,642,900		126,944		1,204,843		25,224		4,127,936		1,156		1,479,351		3,937,733		35,392,763
Financial assets at FVTPL		32		34,303		25		238		—		—		27		34,583		104,892		174,016
AFS financial assets		1,966		2,105,972		—		—		319		52,259		—		590		302,801		2,461,622
HTM financial assets		111		118,868		—		—		—		—		—		—		78,175		197,043
Total		25,109		26,902,043		126,969		1,205,081		25,543		4,180,195		1,183		1,514,524		4,423,601		38,225,444

	December 31, 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		41		43,423		79		752		—		—		19		24,878		69,977		139,030
Deposits due to customers		13,744		14,725,686		195,176		1,852,440		21,865		3,578,142		883		1,129,802		2,396,826		23,682,896
Borrowings		6,604		7,080,118		2,218		21,056		—		—		247		315,685		242,874		7,659,733
Debentures		3,467		3,714,411		—		—		700		114,555		—		—		375,749		4,204,715
Other financial liabilities		2,392		2,562,740		16,125		153,043		1,802		294,950		129		165,189		588,625		3,764,547
Total		26,248		28,126,378		213,598		2,027,291		24,367		3,987,647		1,278		1,635,554		3,647,051		39,450,921
Off-balance accounts		8,108		8,687,009		33,624		319,127		1,199		196,261		406		519,843		176,886		9,899,126

(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):

	March 31, 2018
	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		325,359		1,929		629		470		111		—		328,498
Deposits due to customers		146,426,211		27,487,385		30,193,853		27,909,927		6,609,711		1,938,253		240,565,340
Borrowings		4,510,162		2,581,705		1,383,261		1,479,627		3,738,152		522,673		14,215,580
Debentures		2,490,511		1,010,869		1,771,211		2,171,694		18,673,960		2,812,414		28,930,659
Other financial liabilities		16,162,851		57,369		162,467		1,552		139,313		1,957,373		18,480,925
Total		169,915,094		31,139,257		33,511,421		31,563,270		29,161,247		7,230,713		302,521,002
	December 31, 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		168,442		155,984		1,717		512		375		—		327,030
Deposits due to customers		148,008,777		29,563,310		18,175,348		32,468,110		7,409,118		2,624,594		238,249,257
Borrowings		6,115,732		1,893,173		1,489,272		1,178,107		3,924,681		479,568		15,080,533
Debentures		1,955,255		2,452,565		1,018,714		1,744,731		19,770,380		2,869,699		29,811,344
Other financial liabilities		7,121,342		162,871		825		1,003		128,940		2,730,001		10,144,982
Total		163,369,548		34,227,903		20,685,876		35,392,463		31,233,494		8,703,862		293,613,146

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

	March 31, 2018
	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		325,359		1,929		629		470		111		—		328,498
Deposits due to customers		156,729,683		30,847,798		26,925,234		20,228,734		5,052,919		135,223		239,919,591
Borrowings		4,510,162		2,581,705		1,383,261		1,479,627		3,738,152		522,673		14,215,580
Debentures		2,490,511		1,010,869		1,771,211		2,171,694		18,673,960		2,812,414		28,930,659
Other financial liabilities		16,162,851		57,369		162,467		1,552		139,313		1,957,373		18,480,925
Total		180,218,566		34,499,670		30,242,802		23,882,077		27,604,455		5,427,683		301,875,253
	December 31, 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		168,442		155,984		1,717		512		375		—		327,030
Deposits due to customers		159,146,602		31,298,562		16,667,130		21,995,294		6,487,047		2,278,756		237,873,391
Borrowings		6,115,732		1,893,173		1,489,272		1,178,107		3,924,681		479,568		15,080,533
Debentures		1,955,255		2,452,565		1,018,714		1,744,731		19,770,380		2,869,699		29,811,344
Other financial liabilities		7,121,342		162,871		825		1,003		128,940		2,730,001		10,144,982
Total		174,507,373		35,963,155		19,177,658		24,919,647		30,311,423		8,358,024		293,237,280

3) Maturity analysis of derivative financial liabilities

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 by the maturity of derivative financial liabilities as of March 31, 2018 and December 31, 2017 is as follows (Unit: Korean Won in millions):

	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
March 31, 2018		2,678,311		—		—		—		87,336		—		2,765,647
December 31, 2017		3,150,149		—		—		381		67,373		—		3,217,903

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 persist or may be unconditionally cancellable, 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):

	March 31, 2018		December 31, 2017
Guarantees		12,408,153		12,859,715
Loan commitments		96,822,354		80,760,325

(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: Common Equity Tier 1 capital ratio of 7.13% and 6.25%, a minimum Tier 1 ratio of 8.63% and 7.75% and a minimum total regulatory capital of 10.63% and 9.75% as of March 31, 2018 and December 31, 2017, respectively.

Details of the Group’s capital adequacy ratio as of March 31, 2018 and December 31, 2017 are as follows (Unit: Korean won in millions):

	March 31, 2018			December 31, 2017
Tier 1 capital		16,593,321			16,074,987
Other Tier 1 capital		2,847,206			3,041,664
Tier 2 capital		3,167,074			3,486,555
Total risk-adjusted capital		22,607,601			22,603,206
Risk-weighted assets for credit risk		137,670,034			134,767,711
Risk-weighted assets for market risk		2,387,231			2,316,938
Risk-weighted assets for operational risk		9,801,519			9,677,559
Total risk-weighted assets		149,858,784			146,762,208
Common Equity Tier 1 ratio		11.07	%		10.95	%
Tier 1 capital ratio		12.97	%		13.03	%
Total capital ratio		15.09	%		15.40	%

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 audited by the CODM to make decisions about resources to be allocated to each segment and evaluate its performance.

(1) Segment by type of customers

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

• Consumer banking: Loans/deposits and financial services for retail and individual consumers, etc.

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

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

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

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

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

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

	For the three months ended March 31, 2018
	Consumer banking			Corporate banking			Investment banking			Capital market			Credit cards			Headquarters and others			Subtotal			Adjust- ments			Total
Net Interest income		465,989			505,909			(1,166	)		8,543			121,413			117,360			1,218,048			149,103			1,367,151
Interest income		835,505			800,441			36,333			3,655			157,507			365,063			2,198,504			76,243			2,274,747
Interest expense		(244,864	)		(474,932	)		(48	)		—			(36,094	)		(224,518	)		(980,456	)		72,860			(907,596	)
Inter-segment		(124,652	)		180,400			(37,451	)		4,888			—			(23,185	)		—			—			—
Net non-interest income		187,905			144,039			60,706			16,020			22,547			86,657			517,874			(205,306	)		312,568
Non-interest income		249,394			251,806			74,975			1,529,763			293,667			617,979			3,017,584			(117,090	)		2,900,494
Non-interest expense		(103,151	)		(125,384	)		(14,269	)		(1,513,743	)		(271,120	)		(472,043	)		(2,499,710	)		(88,216	)		(2,587,926	)
Inter-segment		41,662			17,617			—			—			—			(59,279	)		—			—			—
Other income(expense)		(430,307	)		(220,523	)		(2,266	)		(3,688	)		(91,321	)		(155,733	)		(903,838	)		45,416			(858,422	)
Administrative expense		(396,035	)		(186,879	)		(2,266	)		(3,688	)		(40,321	)		(175,509	)		(804,698	)		65,014			(739,684	)
Impairment losses due to credit loss and others		(34,272	)		(33,644	)		—			—			(51,000	)		19,776			(99,140	)		(19,598	)		(118,738	)
Operating income		223,587			429,425			57,274			20,875			52,639			48,284			832,084			(10,787	)		821,297
Non-operating income(expense)		(8,914	)		129			6,344			—			(1,034	)		14,888			11,413			(26,675	)		(15,262	)
Net income before income tax expense		214,673			429,554			63,618			20,875			51,605			63,172			843,497			(37,462	)		806,035
Income tax expense		(51,951	)		(92,188	)		(15,395	)		(5,051	)		(12,289	)		(34,989	)		(211,863	)		348			(211,515	)
Net income		162,722			337,366			48,223			15,824			39,316			28,183			631,634			(37,114	)		594,520

	For the three months ended March 31, 2017
	Consumer banking			Corporate banking			Investment banking			Capital market			Credit cards			Headquarters and others			Subtotal			Adjust- ments			Total
Net Interest income		403,256			430,779			3,227			8,998			110,127			161,416			1,117,803			144,941			1,262,744
Interest income		760,510			724,847			37,261			4,478			142,436			336,338			2,005,870			77,906			2,083,776
Interest expense		(241,214	)		(408,390	)		(64	)		—			(32,309	)		(206,090	)		(888,067	)		67,035			(821,032	)
Inter-segment		(116,040	)		114,322			(33,970	)		4,520			—			31,168			—			—			—
Net non-interest income		169,789			130,010			53,897			14,313			16,928			54,071			439,008			(160,252	)		278,756
Non-interest income		202,994			162,875			139,252			4,891,977			293,970			421,601			6,112,669			(45,107	)		6,067,562
Non-interest expense		(58,041	)		(47,565	)		(85,355	)		(4,877,664	)		(277,042	)		(327,994	)		(5,673,661	)		(115,145	)		(5,788,806	)
Inter-segment		24,836			14,700			—			—			—			(39,536	)		—			—			—
Other income(expense)		(450,534	)		(194,424	)		14,801			23,180			(87,213	)		8,715			(685,475	)		23,719			(661,756	)
Administrative expense		(429,830	)		(195,141	)		(3,306	)		(4,471	)		(39,123	)		(142,319	)		(814,190	)		59,917			(754,273	)
Impairment losses due to credit loss and others		(20,704	)		717			18,107			27,651			(48,090	)		151,034			128,715			(36,198	)		92,517
Operating income		122,511			366,365			71,925			46,491			39,842			224,202			871,336			8,408			879,744
Non-operating income(expense)		2,085			(1,018	)		13,813			—			(1,125	)		(16,997	)		(3,242	)		(47,872	)		(51,114	)
Net income before income tax expense		124,596			365,347			85,738			46,491			38,717			207,205			868,094			(39,464	)		828,630
Income tax expense		(30,152	)		(84,092	)		(20,749	)		(11,251	)		(9,429	)		(30,242	)		(185,915	)		16			(185,899	)
Net income		94,444			281,255			64,989			35,240			29,288			176,963			682,179			(39,448	)		642,731

(2) Information on products and services

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

(3) Information on geographical areas

Among the Group’s revenue (interest income and non-interest income) from services, revenue from the domestic customers for the three months ended March 31, 2018 and March 31, 2017 amounted to 4,705,993 million Won and 7,901,606 million Won, respectively, and revenue from the foreign customers amounted to 469,248 million Won and 249,732 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 March 31, 2018 and December 31, 2017 are 3,561,846 million Won and 3,550,764 million Won, respectively, and foreign subsidiaries are 229,676 million Won and 233,732 million Won, respectively.

6. CASH AND CASH EQUIVALENTS

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

	March 31, 2018		December 31, 2017
Cash		1,866,850		2,009,363
Foreign currencies		769,013		617,155
Demand deposits		2,587,200		3,423,355
Fixed deposits		514,939		858,413
Total		5,738,002		6,908,286

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

	For the three months ended March 31, 2018			For the three months ended March 31, 2017
Changes in other comprehensive loss due to remeasurement of financial assets designated at FVTOCI		30,953			—
Changes in other comprehensive income due to valuation of AFS financial assets		—			12,974
Changes in other comprehensive income (loss) of investment in associates		(890	)		1,704
Changes in other comprehensive loss of foreign operations translation		(1,742	)		(100,460	)
Changes in other comprehensive income related to valuation of cash flow hedging		(3,426	)		(853	)
Changes in other comprehensive income due to remeasurement of the net defined benefit liability		(53,460	)		(26,517	)
Changes in investments in associates due to equity swap		—			50,300
Changes in unpaid dividends to common stocks		336,636			269,308
Changes in unpaid dividends of hybrid equity securities		7,679			15,853

7. FINANCIAL ASSETS AT FVTPL

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

	March 31, 2018		December 31, 2017
Financial assets at FVTPL		7,578,339		—
Financial assets held for trading		—		5,820,787
Financial assets designated at FVTPL		—		22,290
Total		7,578,339		5,843,077

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

	March 31, 2018		December 31, 2017
Deposits:
Gold banking asset		25,311		25,972
Securities:
Debt securities
Korean treasury and government agencies		603,513		540,438
Financial institutions		852,276		1,476,498
Corporates		772,066		627,397
Others		8,771		—
Equity securities		352,477		21,666
Capital contributions		300,601		—
Beneficiary certificates		1,755,480		13,041
Subtotal		4,645,184		2,679,040
Loans		294,975		—
Derivatives assets		2,612,869		3,115,775
Total		7,578,339		5,820,787

(3) Financial assets designated at fair value through Profit or Loss are as follows (Unit: Korean Won in millions):

	March 31, 2018		December 31, 2017
Debt securities		—		9,694
Equity securities		—		12,596
Total		—		22,290

8. FINANCIAL ASSETS AT FVTOCI AND AFS FINANCIAL ASSETS

(1) Details of financial assets at FVTOCI as of March 31, 2018 and AFS financial assets as of December 31, 2017 are as follows (Unit: Korean won in millions):

	March 31, 2018		December 31, 2017
Debt securities:
Korean treasury and government agencies		2,187,641		2,330,567
Financial institutions		5,173,150		5,217,266
Corporates		2,371,732		2,725,232
Asset-backed securities		—		308,181
Bond denominated in foreign currencies		2,524,166		2,442,579
Others		5,006		35,163
Subtotal		12,261,695		13,058,988
Equity securities		902,572		1,411,078
Beneficiary certificates		—		712,628
Securities loaned		90,346		170,256
Total		13,254,613		15,352,950

(2) Details of equity securities designated as financial assets at FVTOCI are as follows (Unit: Korean won in millions):

	March 31, 2018
Purpose of acquisition	Fair value
Investment policy		733,220
Debt-equity swap		169,248
Others(*)		104
Total		902,572

(*) Cooperate insurance, etc.

(3) Changes in the loss allowance and gross carrying amount of financial assets at FVTOCI are as follows (Unit: Korean won in millions):

1) Allowance for credit losses

	For the three months ended March 31, 2018
	Stage 1			Stage 2			Stage 3		Total
Beginning balance		(4,192	)		(101	)		—		(4,293	)
Transfer to 12-month expected credit losses		—			—			—		—
Transfer to lifetime expected credit losses		—			—			—		—
Transfer to credit-impaired financial assets		—			—			—		—
Net reversal of loss allowance		209			7			—		216
Others (*)		122			—			—		122
Ending balance		(3,861	)		(94	)		—		(3,955	)

(*) Others consist of foreign currencies translation and etc.

2) Gross carrying amount

	For the three months ended March 31, 2018
	Stage 1			Stage 2			Stage 3		Total
Beginning balance		12,814,010			30,212			—		12,844,222
Transfer to 12-month expected credit losses		—			—			—		—
Transfer to lifetime expected credit losses		—			—			—		—
Transfer to credit-impaired financial assets		—			—			—		—
Acquisition		1,048,437			—			—		1,048,437
Disposal / Redemption		(1,534,686	)		—			—		(1,534,686	)
Gain (loss) on valuation		5,744			(15	)		—		5,729
Amortization on the effective interest method		(948	)		—			—		(948	)
Others (*)		(10,713	)		—			—		(10,713	)
Ending balance		12,321,844			30,197			—		12,352,041

(*) Others consist of foreign currencies translation, etc.

(4) The Bank disposed equity securities designated as financial assets at FVTOCI in accordance with the resolution of disposal from the creditors’ council during the three months ended March 31, 2018. The fair value and accumulative loss on valuation of that equity securities at disposal date are 1,461 million won and 1,974 million won, respectively.

9. SECURITIES AT AMORTIZED COST AND HTM FINANCIAL ASSETS

(1) Details of securities at amortized cost as of March 31, 2018 and HTM financial assets as of December 31, 2017 are as follows (Unit: Korean won in millions):

	March 31, 2018			December 31, 2017
Korean treasury and government agencies		4,249,324			3,994,857
Financial institutions		7,325,328			7,245,426
Corporates		5,061,036			5,311,970
Bond denominated in foreign currencies		200,700			197,043
Allowance for credit losses		(5,046	)		—
Total		16,831,342			16,749,296

(2) Changes in the loss allowance and gross carrying amount of securities at amortized cost are as follows (Unit: Korean won in millions):

1) Loss allowance

	For the three months ended March 31, 2018
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(5,078	)		—		—		(5,078	)
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Net reversal of loss allowance		9			—		—		9
Disposal		23			—		—		23
Ending balance		(5,046	)		—		—		(5,046	)

2) Gross carrying amount

	For the three months ended March 31, 2018
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		16,749,296			—		—		16,749,296
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Acquisition		2,242,037			—		—		2,242,037
Redemption / Disposal		(2,149,690	)		—		—		(2,149,690	)
Amortization on the effective interest method		(3,979	)		—		—		(3,979	)
Others (*)		(1,276	)		—		—		(1,276	)
Ending balance		16,836,388			—		—		16,836,388

(*) Others consist of foreign currencies translation and etc.

10. LOANS AND OTHER FINANCIAL ASSETS AT AMORTIZED COST, AND LOANS AND RECEIVABLES

(1) Details of loans and other financial assets at amortized cost as of March 31, 2018 and loans and receivables as of December 31, 2017 are as follows (Unit: Korean won in millions):

	March 31, 2018		December 31, 2017
Due from banks		20,919,478		8,868,378
Loans		244,871,023		251,523,301
Other receivables		12,318,605		6,714,525
Total		278,109,106		267,106,204

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

	March 31, 2018			December 31, 2017
Due from banks in local currency:
Due from The Bank of Korea (“BOK”)		17,531,004			6,246,496
Due from depository banks		50,003			30,003
Due from non-depository institutions		165			150
Due from the Korea Exchange		20,000			50,000
Others		48,103			97,365
Allowance for credit losses		(4,186	)		(1,541	)
Subtotal		17,645,089			6,422,473
Due from banks in foreign currencies:
Due from banks on demand		1,035,078			794,353
Due from banks on time		1,369,065			972,915
Others		872,103			679,554
Allowances for credit losses		(1,857	)		(917	)
Subtotal		3,274,389			2,445,905
Total		20,919,478			8,868,378

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

	Counterparty	March 31, 2018		Reason of restriction
Due from banks in local currency:
Due from BOK	BOK		17,531,004	Reserve deposits under the BOK Act
Others	The Korea Exchange and others		45,120	Central counterparty KRW margin and others
Subtotal			17,576,124
Due from banks in foreign currencies:
Due from banks on demand	BOK and others		1,032,208	Reserve deposits under the BOK Act and others
Others	The People’s Bank of China and others		872,103	Reserve deposits and others
Subtotal			1,904,311
Total			19,480,435

	Counterparty	December 31, 2017		Reason of restriction
Due from banks in local currency:
Due from BOK	BOK		6,246,496	Reserve deposits under the BOK Act
Others	The Korea Exchange and others		94,394	Central counterparty KRW margin and others
Subtotal			6,340,890
Due from banks in foreign currencies:
Due from banks on demand	BOK and others		787,520	Reserve deposits under the BOK Act and others
Others	The People’s Bank of China and others		367,108	Reserve deposits and others
Subtotal			1,154,628
Total			7,495,518

(4) Changes in the loss allowance and gross carrying amount of due from banks are as follows (Unit: Korean won in millions):

1) Allowance for credit losses

	For the three months ended March 31, 2018
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(3,092	)		—		—		(3,092	)
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Net provision of loss allowance		(2,933	)		—		—		(2,933	)
Others (*)		(18	)		—		—		(18	)
Ending balance		(6,043	)		—		—		(6,043	)

(*) Others consist of foreign currencies translation and etc.

2) Gross carrying amount

	For the three months ended March 31, 2018
	Stage 1		Stage 2		Stage 3		Total
Beginning balance		8,870,835		—		—		8,870,835
Transfer to 12-month expected credit losses		—		—		—		—
Transfer to lifetime expected credit losses		—		—		—		—
Transfer to credit-impaired financial assets		—		—		—		—
Net increase		12,011,935		—		—		12,011,935
Others (*)		42,751		—		—		42,751
Ending balance		20,925,521		—		—		20,925,521

(*) Others consist of foreign currencies translation and etc.

(5) Details of loans are as follows (Unit: Korean won in millions):

	March 31, 2018			December 31, 2017
Loans in local currency		203,166,938			200,213,230
Loans in foreign currencies		13,782,904			13,147,888
Domestic banker’s letter of credit		2,793,583			2,516,907
Credit card accounts		7,271,495			6,827,295
Bills bought in foreign currencies		6,801,509			8,197,159
Bills bought in local currency		303,848			334,714
Factoring receivables		60,910			137,523
Advances for customers on guarantees		17,126			23,620
Private placement bonds		307,598			362,319
Securitized loans		1,047,532			563,152
Call loans		3,489,562			3,003,455
Bonds purchased under resale agreements		6,581,269			16,859,064
Loan origination costs and fees		737,525			510,860
Others		534,777			607,325
Discounted present value		(5,320	)		(10,988	)
Loss allowance		(2,020,233	)		(1,770,222	)
Total		244,871,023			251,523,301

(6) Changes in the loss allowance of loans for the three months ended March 31, 2018 are as follows (Unit: Korean won in millions):

	For the three months ended March 31, 2018
	Consumers									Corporates
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3
Beginning balance		(101,385	)		(41,352	)		(117,168	)		(364,218	)		(255,932	)		(905,243	)
Transfer to 12-month expected credit losses		(6,959	)		6,683			276			(10,984	)		10,910			74
Transfer to lifetime expected credit losses		4,593			(6,188	)		1,595			3,447			(5,051	)		1,604
Transfer to credit-impaired financial assets		1,258			9,287			(10,545	)		1,579			8,909			(10,488	)
Net reversal (provision) of loss allowance		(7,767	)		(14,527	)		(26,940	)		(8,010	)		(22,208	)		10
Charge-off		147			2,201			23,952			104			2,343			25,190
Disposal		—			—			588			—			5			10,225
Unwinding effect		—			—			1,741			—			—			6,656
Others (*)		32			8			104			24,736			(26	)		(4,699	)
Ending balance		(110,081	)		(43,888	)		(126,397	)		(353,346	)		(261,050	)		(876,671	)

	For the three months ended March 31, 2018
	Credit card accounts									Total
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3
Beginning balance		(57,134	)		(71,463	)		(102,858	)		(522,737	)		(368,747	)		(1,125,269	)
Transfer to 12-month expected credit losses		(9,940	)		9,902			38			(27,883	)		27,495			388
Transfer to lifetime expected credit losses		6,393			(6,621	)		228			14,433			(17,860	)		3,427
Transfer to credit-impaired financial assets		402			14,984			(15,386	)		3,239			33,180			(36,419	)
Net provision of loss allowance		(172	)		(18,163	)		(30,030	)		(15,949	)		(54,898	)		(56,960	)
Charge-off		—			—			31,020			251			4,544			80,162
Disposal		—			—			—			—			5			10,813
Unwinding effect		—			—			—			—			—			8,397
Others (*)		—			—			—			24,768			(18	)		(4,595	)
Ending balance		(60,451	)		(71,361	)		(116,988	)		(523,878	)		(376,299	)		(1,120,056	)

(*) Others consist of debt-equity swap, foreign currencies translation and etc.

Changes in the allowances for credit losses on loans and receivables for the three months ended March 31, 2017, are as follows (Unit: Korean Won in millions):

	For the three months ended March 31, 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)		(34,639	)		(64,371	)		(41,356	)		18,232			(122,134	)
Recoveries of written-off loans		(10,808	)		(33,178	)		(12,585	)		—			(56,571	)
Charge-off		35,647			101,546			37,959			50,745			225,897
Sales of loans and receivables		495			42,424			—			413			43,332
Unwinding effect		2,421			10,580			—			—			13,001
Others (*)		604			103,423			—			(95	)		103,932
Ending balance		(170,138	)		(1,338,418	)		(171,354	)		(139,729	)		(1,819,639	)

(*) Others consist of debt-equity swap, foreign currencies translation and etc.

(7) Changes in the gross carrying amount of loans are as follows (Unit: Korean won in millions):

	For the three months ended March 31, 2018
	Consumers									Corporates
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3
Beginning balance		102,731,650			5,486,433			326,678			131,330,304			5,001,095			1,622,417
Transfer to 12-month expected credit losses		1,299,906			(1,297,721	)		(2,185	)		680,639			(679,984	)		(655	)
Transfer to lifetime expected credit losses		(1,761,299	)		1,775,876			(14,577	)		(624,117	)		629,997			(5,880	)
Transfer to credit-impaired financial assets		(28,204	)		(74,962	)		103,166			(94,278	)		(81,942	)		176,220
Charge-off		(147	)		(2,201	)		(35,243	)		(104	)		(2,343	)		(65,565	)
Disposal		—			(270	)		(7,322	)		—			(65	)		(35,835	)
Net increase (decrease)		1,282,840			(463,769	)		(24,751	)		(6,966,924	)		(426,059	)		(141,038	)
Ending balance		103,524,746			5,423,386			345,766			124,325,520			4,440,699			1,549,664

	For the three months ended March 31, 2018
	Credit card accounts									Total
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3
Beginning balance		5,725,172			935,266			177,983			239,787,126			11,422,794			2,127,078
Transfer to 12-month expected credit losses		198,845			(198,794	)		(51	)		2,179,390			(2,176,499	)		(2,891	)
Transfer to lifetime expected credit losses		(255,532	)		255,884			(352	)		(2,640,948	)		2,661,757			(20,809	)
Transfer to credit-impaired financial assets		(8,263	)		(48,364	)		56,627			(130,745	)		(205,268	)		336,013
Charge-off		—			—			(45,111	)		(251	)		(4,544	)		(145,919	)
Disposal		—			—			—			—			(335	)		(43,157	)
Net increase (decrease)		455,768			24,923			7,474			(5,228,316	)		(864,905	)		(158,315	)
Ending balance		6,115,990			968,915			196,570			233,966,256			10,833,000			2,092,000

(8) Details of other receivables are as follows (Unit: Korean won in millions):

	March 31, 2018			December 31, 2017
CMA accounts		205,000			135,000
Receivables		9,952,577			4,459,318
Accrued income		1,016,628			1,026,273
Telex and telephone subscription rights and refundable deposits		990,101			984,620
Other receivables		219,320			166,877
Allowance for credit losses		(65,021	)		(57,563	)
Total		12,318,605			6,714,525

(9) Changes in the allowances for credit losses on other receivables are as follows (Unit: Korean won in millions):

	For the three months ended March 31, 2018
	Stage 1			Stage 2			Stage 3			Total
Beginning balance		(3,090	)		(1,832	)		(54,077	)		(58,999	)
Transfer to 12-month expected credit losses		(116	)		105			11			—
Transfer to lifetime expected credit losses		75			(83	)		8			—
Transfer to credit-impaired financial assets		156			590			(746	)		—
Net provision of loss allowance		(216	)		(131	)		(6,666	)		(7,013	)
Charge-off		(51	)		(391	)		1,175			733
Disposal		—			—			337			337
Others		(185	)		—			106			(79	)
Ending balance		(3,427	)		(1,742	)		(59,852	)		(65,021	)

(10) Changes in the gross carrying amount of other receivables are as follows (Unit: Korean won in millions):

	For the three months ended March 31, 2018
	Stage 1			Stage 2			Stage 3			Total
Beginning balance		6,662,470			29,124			79,777			6,771,371
Transfer to 12-month expected credit losses		6,314			(6,300	)		(14	)		—
Transfer to lifetime expected credit losses		(6,066	)		6,077			(11	)		—
Transfer to credit-impaired financial assets		(617	)		(2,280	)		2,897			—
Charge-off		—			(32	)		(953	)		(985	)
Disposal		—			(2	)		(407	)		(409	)
Net increase		5,610,432			134			3,083			5,613,649
Ending balance		12,272,533			26,721			84,372			12,383,626

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.

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

	March 31, 2018
	Level 1 (*1)		Level 2 (*1)		Level 3		Total
Financial assets:
Financial assets at FVTPL
Deposits		25,311		—		—		25,311
Debt securities		390,247		1,837,764		8,615		2,236,626
Equity securities		59,499		—		292,978		352,477
Capital contributions		—		—		300,601		300,601
Beneficiary certificates		—		1,052,675		702,805		1,755,480
Loans		—		150,000		144,975		294,975
Derivative assets		2,651		2,576,751		33,467		2,612,869
Subtotal		477,708		5,617,190		1,483,441		7,578,339
Financial assets at FVTOCI
Debt securities		2,804,478		9,457,217		—		12,261,695
Equity securities		436,777		—		465,795		902,572
Securities loaned		10,070		80,276		—		90,346
Subtotal		3,251,325		9,537,493		465,795		13,254,613
Derivative assets		—		39,272		—		39,272
Total		3,729,033		15,193,955		1,949,236		20,872,224
Financial liabilities:
Financial liabilities at FVTPL
Deposits due to customers		25,218		—		—		25,218
Derivative liabilities		6,354		2,642,272		29,684		2,678,310
Subtotal		31,572		2,642,272		29,684		2,703,528
Financial liabilities designated as at FVTPL
Equity-linked securities		—		—		230,441		230,441
Debentures		—		91,002		—		91,002
Subtotal		—		91,002		230,441		321,443
Derivative liabilities		—		87,336		—		87,336
Total		31,572		2,820,610		260,125		3,112,307

	December 31, 2017
	Level 1 (*1)		Level 2 (*1)		Level 3 (*2)		Total
Financial assets:
Financial assets held for trading
Deposits		25,972		—		—		25,972
Debt securities		405,942		2,238,391		—		2,644,333
Equity securities		21,666		—		—		21,666
Beneficiary certificates		—		13,041		—		13,041
Derivative assets		1,021		3,093,272		21,482		3,115,775
Subtotal		454,601		5,344,704		21,482		5,820,787
Financial assets designated at FVTPL
Debt securities		—		—		9,694		9,694
Equity securities		—		—		12,596		12,596
Subtotal		—		—		22,290		22,290
AFS financial assets
Debt securities		2,710,172		10,348,815		—		13,058,987
Equity securities		399,214		—		1,011,864		1,411,078
Beneficiary certificates		—		68,722		643,906		712,628
Securities loaned		69,778		100,478		—		170,256
Subtotal		3,179,164		10,518,015		1,655,770		15,352,949
Derivative assets		—		59,272		—		59,272
Total		3,633,765		15,921,991		1,699,542		21,255,298
Financial liabilities:
Financial liabilities held for trading
Deposits due to customers		25,964		—		—		25,964
Derivative liabilities		2,613		3,126,585		20,951		3,150,149
Subtotal		28,577		3,126,585		20,951		3,176,113
Financial liabilities designated at FVTPL
Equity-linked securities		—		—		160,057		160,057
Debentures		—		91,739		—		91,739
Subtotal		—		91,739		160,057		251,796
Derivative liabilities		—		67,754		—		67,754
Total		28,577		3,286,078		181,008		3,495,663

(*1) There were no transfers between Level 1 and Level 2 of financial assets and liabilities measured at fair value. The Group recognizes transfers among levels at the end of reporting period in which events have occurred or conditions have changed.

(*2) Certain AFS unquoted equity securities were measured at cost as of December 31, 2017, that amounted to 37,092 million won. These unquoted equity instruments mostly represent minority investments in structured entity vehicles, such as asset securitization structures. They are measured at cost because (a) observable inputs of financial information to measure fair value were not available to obtain, (b) there was a significant variance in likely estimated cash flows or (c) the probabilities for various estimated cash flows could not be measured reliably. In addition, the Group has no intention to dispose these investments in the foreseeable future.

Financial assets and liabilities measured at fair value, financial assets and liabilities designated as at FVTPL, financial assets at FVTOCI, 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 Group determines the fair value using valuation methods. Valuation methods and input variables for each type of financial instruments are as follows:

	Valuation 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 and Beneficiary certificates	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, etc.
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

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

	Valuation methods	Input variable	Range	Impact of changes in significant unobservable inputs on fair value measurement
Derivative assets	Option valuation model and others	Correlation coefficient	0.900–0.980	Variation of fair value increases as correlation coefficient increases.
		Volatility of underlying asset	13.5%–28.9%	Variation of fair value increases as volatility increases.
Derivative liabilities	Option valuation model and others	Correlation coefficient	0.900–0.980	Variation of fair value increases as correlation coefficient increases.
		Volatility of underlying asset	13.5%–28.9%	Variation of fair value increases as volatility increases.
Equity linked securities	Monte Carlo Simulation and others	Correlation coefficient	0.190–0.694	Equity linked securities’ variation of fair value increases if both volatility and correlation coefficient increase. However when correlation coefficient decreases, despite the increase in volatility, the variation of fair value of equity linked securities may decrease.
		Volatility of underlying asset	12.7%–25.8%
Equity securities and Beneficiary certificates	External appraisal value and others	Expected growth rate	0.0%–1.0%	Fair value increases as expected growth rate increases.
		Volatility of real estate sale price	0%	Fair value increases as sale price Increases
		Discount rate of lease cash flow and others	7.40%–8.54%	Fair value increases as discount rate of lease cash flow decreases

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

(3) Changes in financial assets and liabilities measured at fair value classified into Level 3 are as follows (Unit: Korean Won in millions):

	For three months ended March 31, 2018
	January 1, 2018		Net Income (loss) (*1)			Other comprehensive income		Purchases/ issuances		Disposals/ settlements			Transfer to or out of Level 3 (*2)		March 31, 2018
Financial assets:
Financial assets at FVTPL
Debt securities		9,694		(8	)		—		—		(1,071	)		—		8,615
Equity securities		272,682		20,522			—		4		(230	)		—		292,978
Capital contributions		294,121		5,812			—		8,234		(7,566	)		—		300,601
Beneficiary certificates		654,066		3,817			—		801,606		(756,683	)		—		702,806
Loans		151,938		4,038			—		—		(11,001	)		—		144,975
Derivative assets		19,346		61,836			—		3,251		(50,966	)		—		33,467
Subtotal		1,401,847		96,017			—		813,095		(827,517	)		—		1,483,442
Financial assets at FVTOCI
Equity securities		451,287		(133	)		14,610		31		—			—		465,795
Total		1,853,134		95,884			14,610		813,126		(827,517	)		—		1,949,237
Financial liabilities:
Financial liabilities at FVTPL
Derivative liabilities		20,951		59,654			—		—		(50,921	)		—		29,684
Financial liabilities designated as at FVTPL
Equity-linked securities		160,057		(4,688	)		—		168,520		(93,448	)		—		230,441
Total		181,008		54,966			—		168,520		(144,369	)		—		260,125

(*1) The losses that increase the financial liabilities are presented as positive amounts, and the gains that decrease the financial liabilities are presented as negative amounts. The loss amounting to 40,522 million won for three months ended March 31, 2018, which is from financial assets and liabilities that the Group holds as at the end of the periods, has been recognized in net gain (loss) on financial assets at FVTPL and net gain (loss) on financial assets at FVTOCI in the consolidated statement of comprehensive income.

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

	For the three months ended March 31, 2017
	January 1, 2017		Net Income (loss) (*1)			Other compre -hensive income (loss)			Purchases/ Issuances		Disposals/ Settlements			Transfer to or out of level 3 (*2)		March 31, 2017
Financial assets:
Financial assets held for trading:
Derivative assets		23,153		6,605			—			1		(10,231	)		—		19,528
Financial assets designated at FVTPL
Equity-linked securities		4,348		(15	)		—			—		—			—		4,333
Equity securities		12,652		113			—			—		—			—		12,765
Subtotal		17,000		98			—			—		—			—		17,098
AFS financial assets
Equity securities (*3)		1,024,935		3,131			7,528			17,237		(13,390	)		3		1,039,444
Beneficiary certificates		530,511		3,144			(4,921	)		56,110		(42,006	)		—		542,838
Subtotal		1,555,446		6,275			2,607			73,347		(55,396	)		3		1,582,282
Derivative assets		99		169			—			—		(141	)		—		127
Total		1,595,698		13,147			2,607			73,348		(65,768	)		3		1,619,035
Financial liabilities
Financial liabilities held for trading Derivative liabilities		33,524		3,722			—			500		(9,112	)		—		28,634
Financial liabilities designated at FVTPL
Equity-linked securities		673,709		61,231			—			—		(196,672	)		—		538,268
Total		707,233		64,953			—			500		(205,784	)		—		566,902

(*1) The loss amounting to 51,559 million Won for the three months ended March 31, 2017, which is from financial assets and liabilities that the Group holds , has been recognized in net gain (loss) on financial instruments at FVTPL and net gain (loss) on AFS financial assets in the statement of comprehensive income.

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

(*3) AFS financial assets were transferred out of Level 1 to Level 3 upon the change of the fair value measurement method of the assets by using market 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 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) debt securities, equity securities, interest rate related derivatives, currency related derivatives, equity related derivatives, equity-linked securities and beneficiary certificates of which fair value changes are recognized as net income; (2) equity securities of which fair value changes are recognized as other comprehensive income. Equity investments classified as Level 3 equity securities whose costs are considered to provide the best estimate of fair value 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 (Unit: Korean Won in millions):

	As of March 31, 2018
	Net income (loss)					Other comprehensive income (loss)
	Favorable		Unfavorable			Favorable		Unfavorable
Financial assets:
Financial assets at FVTPL
Derivative assets (*1) (*2)		3,033		(2,645	)		—		—
Loans		482		(371	)		—		—
Debt securities		1,086		(1,019	)		—		—
Equity securities (*3) (*4)		10,796		(7,231	)		—		—
Beneficiary certificates (*4)		1,828		(2,904	)		—		—
Financial assets at FVTOCI
Equity securities (*3) (*4)		—		—			22,987		(9,762	)
Total		17,225		(14,170	)		22,987		(9,762	)
Financial liabilities:
Financial liabilities at FVTPL
Derivative liabilities (*1) (*2)		1,844		(2,250	)		—		—
Financial liabilities designated as at FVTPL
Equity-linked securities (*1)		992		(1,059	)		—		—
Total		2,836		(3,309	)		—		—
	As of December 31, 2017
	Net income (loss)					Other comprehensive income (loss)
	Favorable		Unfavorable			Favorable		Unfavorable
Financial assets:
Financial assets held for trading
Derivatives assets (*1)(*2)		1,234		(526	)		—		—
Financial assets designed at FVTPL
Debt securities (*5)		265		(309	)		—		—
Equity securities (*5)		670		(624	)		—		—
AFS Financial assets
Equity securities (*3)(*4)		—		—			28,583		(15,246	)
Beneficiary certificates (*4)		—		—			1,861		(1,857	)
Total		2,169		(1,459	)		30,444		(17,103	)
Financial liabilities:
Financial liabilities held for trading
Derivative liabilities (*1)(*2)		5		(513	)		—		—
Financial liabilities designated at FVTPL
Equity-linked securities (*1)		8		(7	)		—		—
Total		13		(520	)		—		—

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

(*2) 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%). The growth rate, discount rate, and liquidation value are major unobservable variables.

(*4) 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.

(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):

	March 31, 2018
	Fair value								Book value
	Level 1		Level 2		Level 3		Total
Financial assets:
Securities at amortized cost		1,269,228		15,531,601		—		16,800,829		16,831,342
Loans and other financial assets at amortized cost		—		—		277,475,813		277,475,813		278,109,106
Financial liabilities:
Deposits due to customers		—		237,361,067		—		237,361,067		237,497,139
Borrowings		—		13,938,136		—		13,938,136		13,935,114
Debentures		—		26,989,332		—		26,989,332		27,091,625
Other financial liabilities		—		22,427,494		—		22,427,494		22,451,144
	December 31, 2017
	Fair value								Book value
	Level 1		Level 2		Level 3		Total
Financial assets:
HTM financial assets		1,206,292		15,509,387		—		16,715,679		16,749,296
Loans and receivables		—		—		265,570,649		265,570,649		267,106,204
Financial liabilities:
Deposits due to customers		—		234,682,775		—		234,682,775		234,695,084
Borrowings		—		14,754,506		—		14,754,506		14,784,706
Debentures		—		27,889,781		—		27,889,781		27,869,651
Other financial liabilities		—		13,890,789		—		13,890,789		13,892,461

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

	Valuation methods	Input variables
Securities at amortized cost(HTM financial assets in previous year)	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 other financial assets at amortized cost (Loans and receivables in previous year)	The fair value is measured by discounting the projected cash flows of loan products by applying the market discount rate that has been applied to a proxy company that has similar credit rating to the debtor.	Risk-free market rate, credit spread and prepayment-rate
Deposits due to customers, borrowings, debentures and other financial liabilities	The fair value is measured by discounting the projected cash flows of debt products by applying the market discount rate that is reflecting credit rating of the Group.	Risk-free market rate and forward rate

12. DERECOGNITION AND OFFSET OF FINANCIAL INSTRUMENTS

(1) Derecognition of financial assets

1) Transferred financial assets that do not meet the 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):

		March 31, 2018		December 31, 2017
Assets transferred	Financial assets at FVTOCI		10,004		—
	AFS financial assets		—		9,998
	Securities at amortized cost		5,440		—
	HTM financial assets		—		5,436
	Total		15,444		15,434
Related liabilities	Bonds sold under repurchase agreements		2,570		3,173

b) Securities loaned

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

		March 31, 2018		December 31, 2017		Loaned to
Financial assets at FVTOCI	Industrial and financial debt securities and others		90,346		—	Korea Securities Finance Corporation
AFS financial assets	Korean treasury and government agencies and others		—		170,256	Korea Securities Finance Corporation and others
	Total		90,346		170,256

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 the unpaid domestic exchange payable, which satisfy offsetting criteria of IAS 32. 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 and has been disclosed in loans and other financial assets at amortized cost (loans and receivables in previous year) or other financial liabilities of the Group’s statements of financial position.

The Group possesses the derivative assets, derivative liabilities, receivable spot exchange and payable spot exchange that do not satisfy the offsetting criteria of IAS 32, but provide the Group under the circumstances of the trading party’s defaults, insolvency or bankruptcy, the right of offsetting. Item such as cash collateral cannot satisfy the offsetting criteria of IAS 32, 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 net amount of payable spot exchange can be offset.

The Group has entered into a sale and repurchase agreement and accounted it as a collateralized borrowing. The Group has also entered into a purchase and resale agreement and accounted it as a secured loan. 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 IAS 32. The Group recorded the collateralized borrowing in borrowings and the secured loans in loans and receivables. The Group under the repurchase agreements has offsetting right only upon the counterparty’s default, insolvency or bankruptcy; thus, the repurchase agreements are applied by the TBMA/ISMA Global Master Repurchase Agreement, which does not satisfy the offsetting criteria of IAS 32. The Group disclosed bonds sold (purchased) under repurchase agreements as borrowings (loans and other financial assets at amortized cost (loans and receivables in previous year)).

As of March 31, 2018 and December 31, 2017, the financial instruments to be set off and maybe covered by master netting agreements and similar agreements are given as follows (Unit: Korean won in millions):

	March 31, 2018
	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 consolidated statement of financial position				Net amounts
							Netting agreements and others		Cash collateral received
Financial assets:
Derivative assets and others (*1)		2,621,529		—		2,621,529		9,430,201		135,926		983,476
Receivable spot exchange (*2)		7,928,074		—		7,928,074
Bonds purchased under resale agreements (*2)		6,581,269		—		6,581,269		6,581,269		—		—
Domestic exchanges receivable (*2)(*5)		24,139,040		24,015,691		123,349		—		—		123,349
Total		41,269,912		24,015,691		17,254,221		16,011,470		135,926		1,106,825

	March 31, 2018
	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 consolidated statement of financial position				Net amounts
							Netting agreements and others		Cash collateral pledged
Financial liabilities:
Derivative liabilities and others (*1)		2,933,028		—		2,933,028		9,383,031		272,708		1,203,368
Payable spot exchange (*3)		7,926,079		—		7,926,079
Bonds sold under repurchase agreements (*4)		2,570		—		2,570		2,570		—		—
Domestic exchanges payable (*3)(*5)		27,598,567		24,015,691		3,582,876		3,579,023		—		3,853
Total		38,460,244		24,015,691		14,444,553		12,964,624		272,708		1,207,221

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

(*2) The items are included in loans and other financial assets at amortized cost.

(*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.

	December 31, 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 consolidated statement of financial position				Net amounts
							Netting agreements and others		Cash collateral received
Financial assets:
Derivative assets and others (*1)		2,992,476		1,710		2,990,766		5,787,448		174,415		796,629
Receivable spot exchange (*2)		3,767,726		—		3,767,726
Bonds purchased under resale agreements (*2)		16,859,064		—		16,859,064		16,859,064		—		—
Domestic exchanges receivable (*2)(*5)		39,050,227		38,985,354		64,873		—		—		64,873
Total		62,669,493		38,987,064		23,682,429		22,646,512		174,415		861,502
	December 31, 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 consolidated statement of financial position				Net amounts
							Netting agreements and others		Cash collateral pledged
Financial liabilities:
Derivative liabilities and others (*1)		3,160,217		1,710		3,158,507		5,866,682		157,750		857,961
Payable spot exchange (*3)		3,723,886		—		3,723,886
Bonds sold under repurchase agreements (*4)		3,173		—		3,173		3,173		—		—
Domestic exchanges payable (*3)(*5)		40,284,515		38,985,354		1,299,161		1,293,931		—		5,230
Total		47,171,791		38,987,064		8,184,727		7,163,786		157,750		863,191

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

(*2) The items are included in Loans receivable measured at amortized cost.

(*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				Financial statements as of
		ownership (%)
Joint ventures and Associates	Main business	March 31, 2018		December 31,2017		March 31, 2018
Woori Bank:
Kumho Tire Co., Inc. (*1)(*2)	Manufacturing		14.2		14.2		December 31	(*3)
Woori Service Networks Co., Ltd. (*4)	Freight & staffing services		4.9		4.9		February 28	(*3)
Korea Credit Bureau Co., Ltd. (*5)	Credit information		9.9		9.9		March 31
Korea Finance Security Co., Ltd. (*4)	Security service		15.0		15.0		February 28	(*3)
Chin Hung International Inc. (*2)	Construction		25.3		25.3		February 28	(*3)
Poonglim Industrial Co., Ltd. (*6)(*9)	Construction		—		29.4		—
STX Engine Co., Ltd. (*10)	Manufacturing		29.2		29.2		—
STX Corporation (*1)	Wholesale of non-specialized goods		19.7		19.7		December 31	(*3)
Saman Corporation (*5)	General construction Technology service		9.2		9.2		December 31	(*3)
Dongwoo C & C Co., Ltd. (*6)	Construction		23.2		23.2		—
SJCO Co., Ltd. (*6)	Aggregate transportation and wholesale		26.5		26.5		—
G2 Collection Co., Ltd. (*6)	Wholesale and retail sales		28.9		28.9		—

		Percentage of ownership (%)				Financial statements as of March 31, 2018
Joint ventures and Associates	Main business	March 31, 2018		December 31,2017
The Base Enterprise Co., Ltd. (*6)	Manufacturing		48.4		48.4		—
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		—
QTS Shipping Co., Ltd. (*6)	Composite transportation Arrangement		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)	Other service business		35.4		35.4		—
PREXCO Co., Ltd. (*6)	Manufacturing		28.1		28.1		—
Hyunwoo International Co., Ltd. (*6)	Manufacturing		25.9		25.9		—
Jiwon Plating Co., Ltd. (*6)	Plating		20.5		20.5		—
Cultizm Korea LTD Co., Ltd. (*6)	Wholesale and retail sales		31.3		31.3		—
Gil Co.,Ltd. (*6)	Manufacturing		26.1		26.1		—
NK Eng Co., Ltd. (*6)	Manufacturing		23.1		23.1		—
Youngdong Sea Food Co., Ltd. (*6)(*7)	Processed sea food manufacturing		24.0		—		—
Woori Growth Partnerships New Technology Private Equity Fund	Other financial business		23.1		23.1		March 31
2016KIF-IMM Woori Bank Technology Venture Fund	Other financial business		20.0		20.0		March 31
K BANK Co., Ltd. (*5)	Finance		13.0		13.0		February 28	(*3)
Smart Private Equity Fund No.2	Other financial business		20.0		20.0		March 31
Woori Bank-Company K Korea Movie Asset Fund	Other financial business		25.0		25.0		March 31
Well to Sea No. 3 Private Equity Fund	Finance		50.0		50.0		December 31	(*3)
Partner One Value Up I Private Equity Fund (*8)	Other financial business		23.3		—		March 31
Nomura-Rifa Private Real Estate Investment Trust No.17	Other financial business		25.0		25.0		March 31

(*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 4,615, previous year: KRW 4,425), Chin Hung International Inc. (current period: KRW 1,950, previous year: KRW 1,915).

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

(*4) Most of the significant business transactions of associates are with the Group as of March 31, 2018 and December 31, 2017.

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

(*6) The carrying values of investments in associates are nil as of March 31, 2018 and December 31, 2017.

(*7) As of December 31, 2017, the ownership ratio of the common stocks was more than 20%, but the entity was excluded from investments in associates because it has been under rehabilitation and not able to exercise significant influence. However, as of March 31, 2018, it was included in investments in associates by finalizing rehabilitation process by the court administration.

(*8) Due to capital contribution by the Group for the three months ended March 31, 2018, the entities has been included in the investment in associates.

(*9) 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 for the three months ended March 31, 2018.

(*10) The shares of STX Engine Co., Ltd. owned by the Group were reclassified as assets held for sale, as the creditor financial institutions committee entered into a contract with UAMCO during the previous year to sell STX Engine Co., Ltd. shares.

(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 three months ended March 31, 2018
	Acquisition cost		January 1, 2018		Share of profits (losses)			Acquisi- tion		Disposal and others			Dividends			Change in Capital			March 31, 2018
Kumho Tires Co., Inc.		175,652		98,933		(8,927	)		—		—			—			(6,765	)		83,241
Woori Service Networks Co., Ltd.		108		158		(35	)		—		—			—			—			123
Korea Credit Bureau Co., Ltd.		3,313		5,816		323			—		—			(113	)		—			6,026
Korea Finance Security Co., Ltd.		3,267		3,519		64			—		—			(54	)		1			3,530
Chin Hung International Inc.		130,779		45,101		231			—		—			—			112			45,444
Poonglim Industrial Co., Ltd.		13,916		—		—			—		—			—			—			—
STX Corporation		50,760		6,947		(1,668	)		—		—			—			(142	)		5,137
Saman Corporation		8,521		1,254		(18	)		—		—			—			34			1,270
Woori Growth Partnerships New Technology Private Equity Fund		28,833		27,611		(193	)		—		(708	)		—			—			26,710
2016KIF-IMM Woori Bank Technology Venture Fund		6,840		6,840		—			3,660		—			—			—			10,500
K BANK Co., Ltd.		45,392		31,735		(2,820	)		—		—			—			19			28,934
Smart Private Equity Fund No.2		3,000		2,932		(10	)		—		—			—			—			2,922
Woori Bank-Company K Korea Movie Asset Fund		3,000		2,957		(101	)		—		—			—			—			2,856
Well to Sea No.3 Private Equity Fund		101,992		182,309		4,042			—		(253	)		—			787			186,885
Partner One Value Up I Private Equity Fund		10,000		—		—			10,000		—			—			—			10,000
Nomura-Rifa Private Real Estate Investment Trust No.17		1,000		939		(31	)		—		—			—			—			908
Total		586,373		417,051		(9,143	)		13,660		(961	)		(167	)		(5,954	)		414,486

	For the three months ended March 31, 2017
	Acquisition cost		January 1, 2017		Share of profits (losses)			Acquisi- tion (*)		Disposal and others			Dividends			Change in Capital			Others (*)			March 31, 2017
Woori Blackstone Korea Opportunity No.1 Private Equity Fund		6,881		15,289		(3,391	)		—		—			—			—			—			11,898
Kumho Tire Co., Inc.		175,652		200,332		8,637			—		—			—			(1,996	)		—			206,973
Woori Service Networks Co., Ltd.		108		145		(26	)		—		—			—			—			—			119
Korea Credit Bureau Co., Ltd.		3,313		5,592		(79	)		—		—			—			—			—			5,513
Korea Finance Security Co., Ltd.		3,266		3,376		61			—		—			(54	)		—			—			3,383
Chin Hung International Inc.		89,725		43,032		(21,017	)		41,053		—			—			170			(27,686	)		35,552
Poonglim Industrial Co., Ltd.		13,916		—		—			—		—			—			—			—			—
STX Engine Co., Ltd.		92,038		43,036		(1,133	)		—		—			—			4,489			—			46,392
SamHo Co., Ltd.		7,492		19,729		2,021			—		—			—			(19	)		—			21,731
STX Corporation		42,215		—		(34,339	)		8,546		—			—			(74	)		28,380			2,513
Saman Corporation		8,521		8,699		(173	)		—		—			—			26			—			8,552
Woori Growth Partnerships New Technology Private Equity Fund		13,602		13,118		(183	)		2,052		(498	)		—			(156	)		—			14,333
2016KIF-IMM Woori Bank Technology Venture Fund		1,800		1,800		—			1,860		—			—			—			—			3,660
K BANK Co., Ltd.		32,500		30,442		(2,413	)		—		—			—			(142	)		—			27,887
Smart Private Equity Fund No.2		3,000		—		(37	)		3,000		—			—			—			—			2,963
Woori Bank-Company K Korea Movie Asset Fund		1,500		—		—			1,500		—			—			—			—			1,500
Woori Renaissance Holdings		63,000		54,422		2,657			—		—			(51,107	)		—			—			5,972
Total		558,529		439,012		(49,415	)		58,011		(498	)		(51,161	)		2,298			694			398,941

(*) Changes in investments in joint ventures and associates due to debt-equity swap is 50,300 million Won.

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

	March 31, 2018
	Assets		Liabilities		Operating revenue		Net income (loss)
Kumho Tire Co., Inc.		4,500,924		3,509,514		2,876,420		(124,831	)
Woori Service Networks Co., Ltd.		4,592		2,100		2,905		101
Korea Credit Bureau Co., Ltd.		75,425		17,119		17,387		2,198
Korea Finance Security Co., Ltd.		31,482		7,956		10,620		(171	)
Chin Hung International Inc.		352,899		269,716		92,925		9,677
STX Corporation		627,542		584,982		1,803,878		334,386
Saman Corporation		88,692		60,017		109,695		(6,295	)
Woori Growth Partnerships New Technology Private Equity Fund		116,204		463		2,115		(838	)
2016KIF-IMM Woori Bank Technology Venture Fund		50,734		379		2		(376	)
K BANK Co., Ltd.		1,476,940		1,255,385		8,678		(12,355	)
Smart Private Equity Fund No.2		14,660		51		—		(50	)
Woori Bank-Company K Korea Movie Asset Fund		11,425		—		385		325
Well to Sea No.3 Private Equity Fund		5,286,870		4,740,508		267,418		170,829
Partner One Value Up I Private Equity Fund		43,000		—		—		—
Nomura-Rifa Private Real Estate Investment Trust No.17		20,038		16,407		51		(87	)
	December 31, 2017
	Assets		Liabilities		Operating revenue		Net income (loss)
Kumho Tire Co., Inc.		5,105,107		3,928,327		2,136,569		(61,748	)
Woori Service Networks Co., Ltd.		4,982		1,780		14,887		1,003
Korea Credit Bureau Co., Ltd.		75,504		19,323		68,750		3,580
Korea Finance Security Co., Ltd.		33,915		10,461		55,610		1,071
Chin Hung International Inc.		341,284		259,454		513,285		28,698
Poonglim Industrial Co., Ltd.		241,063		309,925		107,360		(29,812	)
STX Corporation		595,348		543,458		1,371,272		342,869
Saman Corporation		98,435		69,929		76,135		(6,096	)
Woori Growth Partnerships New Technology Private Equity Fund		120,133		485		1,024		(3,199	)
2016KIF-IMM Woori Bank Technology Venture Fund		32,815		380		6		(1,515	)
K BANK Co., Ltd.		1,244,270		1,001,121		19,231		(74,403	)
Smart Private Equity Fund No.2		14,711		51		1		(340	)
Woori Bank-Company K Korea Movie Asset Fund		11,830		2		16		(172	)
Well to Sea No.3 Private Equity Fund		5,068,424		4,534,957		131,488		162,743
Nomura-Rifa Private Real Estate Investment Trust No.17		20,265		16,507		62		(242	)

(4) The entities that the Group has not applied equity method of accounting although the Group’s ownership interest is more than 20% as of March 31, 2018 and December 31, 2017, are as follows:

	As of March 31, 2018
Associate (*)	Number of shares owned		Ownership (%)
Poonglim Industrial Co., Ltd.		4,142,782		29.1
Orient Shipyard Co., Ltd.		464,812		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
The season Co., Ltd.		18,187		30.1
Yuil PESC Co., Ltd.		8,642		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
Instern Co., Ltd.		14,296		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, 2017
Associate (*)	Number of shares owned		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	%
The season 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	%
Instern Co., Ltd.		14,296		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.

(5) As of March 31, 2018 and December 31, 2017, the reconciliations from the net assets of associates based on the ownership ratio of the Group to its corresponding book value of investment in joint ventures and associates are as follows (Unit: Korean Won in millions except for ownership):

	As of March 31, 2018
	Total net asset		Ownership (%)		Ownership portion of net assets		Cost-book value differential and others		Impairment			Intercompany transaction and others			Book value
Kumho Tire Co., Inc. (*)		954,539		14.2		135,077		48,459		(102,843	)		2,548			83,241
Woori Service Networks Co., Ltd.		2,492		4.9		123		—		—			—			123
Korea Credit Bureau Co., Ltd.		58,306		9.9		5,780		246		—			—			6,026
Korea Finance Security Co., Ltd.		23,526		15.0		3,530		—		—			—			3,530
Chin Hung International Inc. (*)		83,039		25.3		21,015		24,565		—			(136	)		45,444
STX Corporation		42,560		19.7		8,395		24,641		(27,904	)		5			5,137
Saman Corporation		28,675		9.2		2,635		5,373		(6,738	)		—			1,270
Woori Growth Partnerships New Technology Private Equity Fund		115,741		23.1		26,710		—		—			—			26,710
2016KIF-IMM Woori Bank Technology Venture Fund		50,355		20.0		10,071		—		—			429			10,500
K BANK Co., Ltd.		221,555		13.0		28,734		—		—			200			28,934
Smart Private Equity Fund No.2		14,609		20.0		2,922		—		—			—			2,922
Woori Bank-Company K Korea Movie Asset Fund		11,425		25.0		2,856		—		—			—			2,856
Well to Sea No.3 Private Equity Fund (*)		373,685		50.0		186,751		—		—			134			186,885
Partner One Value Up I Private Equity Fund		43,000		23.3		10,000		—		—			—			10,000
Nomura-Rifa Private Real Estate Investment Trust No.17		3,631		25.0		908		—		—			—			908

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

	As of December 31, 2017
	Total net asset			Ownership (%)		Ownership portion of net assets			Cost-book value differential and others		Impairment			Intercompany transaction and others			Book value
Kumho Tire Co., Inc. (*)		1,065,421			14.2		150,767			48,459		(102,843	)		2,549			98,932
Woori Service Networks Co., Ltd.		3,202			4.9		158			—		—			—			158
Korea Credit Bureau Co., Ltd.		56,181			9.9		5,568			248		—			—			5,816
Korea Finance Security Co., Ltd.		23,454			15.0		3,519			—		—			—			3,519
Chin Hung International Inc. (*)		81,686			25.3		20,671			24,565		—			(136	)		45,100
Poonglim Industrial Co., Ltd. (*)		(168,154	)		29.4		(49,446	)		54,542		(20,504	)		15,408			—
STX Corporation		51,890			19.7		10,232			24,614		(27,904	)		5			6,947
Saman Corporation		28,506			9.2		2,619			5,373		(6,738	)		—			1,254
Woori Growth Partnerships New Technology Private Equity Fund		119,648			23.1		27,611			—		—			—			27,611
2016KIF-IMM Woori Bank Technology Venture Fund		32,435			20.0		6,487			—		—			353			6,840
K BANK Co., Ltd.		243,149			13.0		31,535			—		—			200			31,735
Smart Private Equity Fund No.2		14,660			20.0		2,932			—		—			—			2,932
Woori Bank-Company K Korea Movie Asset Fund		11,828			25.0		2,957			—		—			—			2,957
Well to Sea No.3 Private Equity Fund (*)		364,909			50.0		182,366			—		—			(57	)		182,309
Nomura-Rifa Private Real Estate Investment Trust No.17		3,758			25.0		939			—		—			—			939

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

14. INVESTMENT PROPERTIES

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

	March 31, 2018			December 31, 2017
Acquisition cost		417,539			404,741
Accumulated depreciation		(35,137	)		(33,440	)
Net carrying value		382,402			371,301

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

	For the three months ended December 31
	2018			2017
Beginning balance		371,301			358,497
Acquisition		4,730			342
Disposal		(698	)		(463	)
Depreciation		(1,006	)		(999	)
Transfers		8,308			1,938
Foreign currencies translation adjustments		(232	)		(250	)
Others		—			5,675
Ending balance		382,402			364,740

(3) Fair value of investment properties is amounting to 432,505 million Won and 396,587 million Won as of March 31, 2018 and December 31, 2017, 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.

(4) Rental fee earned from investment properties is amounting to 1,166 million Won and 1,170 million Won for the year ended March 31, 2018 and December 31, 2017, respectively.

15. PREMISES AND EQUIPMENT

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

	March 31, 2018
	Land		Building			Properties for business use			Structures in leased office			Construction in progress		Structures			Total
Acquisition cost		1,477,729		863,973			1,028,126			436,735			67,300		20			3,873,883
Accumulated depreciation		—		(192,038	)		(852,543	)		(373,607	)		—		(17	)		(1,418,205	)
Net carrying value		1,477,729		671,935			175,583			63,128			67,300		3			2,455,678
	December 31, 2017
	Land		Building			Properties for business use			Structures in leased office			Construction in progress		Structures			Total
Acquisition cost		1,487,278		867,804			1,024,186			429,665			64,559		20			3,873,512
Accumulated depreciation		—		(186,958	)		(844,114	)		(364,878	)		—		(17	)		(1,395,967	)
Net carrying value		1,487,278		680,846			180,072			64,787			64,559		3			2,477,545

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

	For the three months ended March 31, 2018
	Land			Building			Properties for business use			Structures in leased office			Construction in progress			Structures		Total
Beginning balance		1,487,278			680,846			180,072			64,787			64,559			3		2,477,545
Acquisition		—			2,426			12,683			3,181			2,939			—		21,229
Disposal		—			—			(25	)		—			—			—		(25	)
Depreciation		—			(6,481	)		(17,134	)		(11,353	)		—			—		(34,968	)
Classified to held for sale		(3,481	)		(2,245	)		—			—			—			—		(5,726	)
Foreign currencies translation adjustment		(197	)		(171	)		(145	)		18			(49	)		—		(544	)
Transfer		(5,871	)		(2,437	)		—			—			—			—		(8,308	)
Others		—			(3	)		132			6,495			(149	)		—		6,475
Ending balance		1,477,729			671,935			175,583			63,128			67,300			3		2,455,678

	For the three months ended March 31, 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		—			2,549			12,400			4,638			5,922			—		25,509
Disposal		—			—			(56	)		(247	)		(229	)		—		(532	)
Depreciation		—			(6,501	)		(19,226	)		(11,189	)		—			—		(36,916	)
Classified to held for sale		(2,693	)		(1,066	)		—			—			—			—		(3,759	)
Foreign currencies translation adjustments		(828	)		(756	)		(1,294	)		(965	)		(397	)		—		(4,240	)
Transfer		(1,200	)		(738	)		—			—			—			—		(1,938	)
Others		—			(2	)		658			4,825			678			—		6,159
Ending balance		1,484,024			685,185			182,384			66,020			24,691			4		2,442,308

16. INTANGIBLE ASSETS AND GOODWILL

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

	March 31, 2018
	Goodwill		Software			Industrial property rights			Development cost			Others			Membership deposit			Total
Acquisition cost		106,493		205,715			1,102			455,411			636,718			27,065			1,432,504
Accumulated amortization		—		(166,562	)		(567	)		(187,864	)		(532,109	)		—			(887,102	)
Accumulated impairment losses		—		—			—			—			(137	)		(6,309	)		(6,446	)
Net carrying value		106,493		39,153			535			267,547			104,472			20,756			538,956

	December 31, 2017
	Goodwill		Software			Industrial property rights			Development cost			Others			Membership deposit			Total
Acquisition cost		108,707		203,418			1,063			413,296			634,150			27,337			1,387,971
Accumulated amortization		—		(162,746	)		(524	)		(182,846	)		(516,467	)		—			(862,583	)
Accumulated impairment losses		—		—			—			—			(137	)		(6,652	)		(6,789	)
Net carrying value		108,707		40,672			539			230,450			117,546			20,685			518,599

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

	For the three months ended March 31, 2018
	Goodwill			Software			Industrial property rights			Development cost			Others			Membership deposit			Total
Beginning balance		108,707			40,672			539			230,450			117,546			20,685			518,599
Acquisition		—			2,607			39			42,105			2,352			—			47,103
Disposal		—			—			—			—			—			(285	)		(285	)
Amortization (*)		—			(3,893	)		(43	)		(5,008	)		(15,335	)		—			(24,279	)
Reversal of impairment losses		—			—			—			—			—			341			341
Foreign currencies translation adjustment		(2,214	)		(233	)		—			—			(86	)		59			(2,474	)
Others		—			—			—			—			(5	)		(44	)		(49	)
Ending balance		106,493			39,153			535			267,547			104,472			20,756			538,956

(*) Amortization of other intangible assets amounting to 11,771 million Won is included in other operating expenses.

	For the three months ended March 31, 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			4,845			32			17,348			4,949			219			27,498
Disposal		—			—			—			—			—			(500	)		(500	)
Amortization (*)		—			(3,897	)		(28	)		(5,673	)		(15,172	)		—			(24,770	)
Impairment loss		—			—			—			—			—			(88	)		(88	)
Foreign currencies translation adjustment		(9,441	)		(186	)		—			2,819			(1,855	)		(146	)		(8,809	)
Other		(332	)		18			—			1,047			(6,111	)		(6	)		(5,384	)
Ending balance		115,135			36,257			317			154,237			146,175			19,565			471,686

(*) Amortization of other intangible assets amounting to 12,139 million Won is included in other operating expenses.

17. ASSETS HELD FOR SALE

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

	March 31, 2018		December 31, 2017
Investments in subsidiaries and associates		46,217		46,217
Premises and equipment		8,359		2,407
Total		54,576		48,624

18. ASSETS SUBJECT TO LIEN AND ASSETS ACQUIRED THROUGH FORECLOSURES

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

		March 31, 2018
		Collateral given to	Amount	Reason for collateral
Loans and other financial assets at amortized cost	Due from banks on time in local currency	DaishinAMC and others	1,500	Collaterals for issuing letter of guarantee and others
	Due from banks in local currency	Samsung Securities Co., Ltd. and others	18,026	Margin deposit for futures or option
	Due from banks in foreign currencies	Korea Investment & Securities Co., Ltd. and others	96,291	Foreign margin deposit for future or option and others
Financial assets at FVTPL	Korean financial institutions’ debt securities and others	Kyobo Life Insurance,.ltd and others	130,492	CSA collateral and others
Financial assets at FVTOCI	Korean debt securities corporate bonds	Korea Securities Depository	10,004	Related to bonds sold under repurchase agreements (*)
	Korean treasury and government agencies bonds and others	The BOK and others	1,610,097	Settlement risk and others
Securities at amortized cost	Korean treasury and government agencies bonds	Korea Securities Depository	5,440	Related to bonds sold under repurchase agreements (*)
	Korean treasury and government agencies bonds and others	The BOK and others	5,839,482	Settlement risk and others
Premises and equipment	Land and building	Credit Counselling & Recovery Service and others	6,103	Leasehold rights and others
		Total	7,717,435

(*) 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, 2017
		Collateral given to	Amount	Reason for collateral
Loan and receivables	Due from banks on time in local currency	Bank of China and others	6,629	Collaterals for issuing letter of guarantee and others
	Due from banks in local currency	Samsung Securities Co., Ltd. and others	10,809	Margin deposit for futures or option
	Due from banks in foreign currencies	Korea Investment & Securities Co., Ltd. and others	9,136	Foreign margin deposit for future or option and others
Financial assets at FVTPL	Korean financial institutions debt securities and others	Yuanta Securities Co., Ltd. and others	501,523	Substitute securities and others
AFS financial assets	Korean debt securities corporate bonds	Korea Securities Depository and others	9,998	Related to bonds sold under repurchase agreements (*)
	Korean treasury and government agencies bonds and others	The BOK and others	1,570,608	Settlement risk and others
HTM financial assets	Korean treasury and government agencies bonds	Korea Securities Depository	5,436	Related to bonds sold under repurchase agreements (*)
	Korean financial institutions’ debt securities and others	The BOK and others	7,605,292	Settlement risk and others
Premises and equipment	Land and building	Credit Counselling & Recovery Service and others	6,186	Leasehold rights and others
		Total	9,725,617

(*) 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).

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

	March 31, 2018		December 31, 2017
Land		325		332
Buildings		—		44
Total		325		376

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

		March 31, 2018		December 31, 2017		Loaned to
Financial assets at FVTOCI	Korean debt securities Corporate bonds		90,346		—	Korea Securities Finance Corporation
AFS financial assets	Korean treasury and government agencies bonds and others		—		170,256	Korea Securities Finance Corporation and others
	Total		90,346		170,256

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

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

Fair values of collaterals held that can be disposed and re-subjected to lien regardless of defaults of counterparties as of March 31, 2018 and December 31, 2017 are as follows (Unit: Korean Won in millions):

	March 31, 2018
	Fair values of collaterals		Fair values of collaterals were disposed or re-subjected to lien
Securities		6,839,271		—
	December 31, 2017
	Fair values of collaterals		Fair values of collaterals were disposed or re-subjected to lien
Securities		17,671,490		—

19. OTHER ASSETS

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

	March 31, 2018		December 31, 2017
Prepaid expenses		212,971		130,245
Advance payments		14,783		18,363
Non-operative assets		325		376
Others		8,832		9,420
Total		236,911		158,404

20. FINANCIAL LIABILITIES AT FVTPL

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

	March 31, 2018		December 31, 2017
Financial liabilities at FVTPL		2,703,528		—
Financial liabilities held for trading		—		3,176,113
Financial liabilities designated at FVTPL with fair value option elected		321,443		—
Financial liabilities designated as at FVTPL		—		251,796
Total		3,024,971		3,427,909

(2) Financial liabilities at FVTPL are as follows (Unit: Korean won in millions):

	March 31, 2018		December 31, 2017
Deposits
Gold banking liabilities		25,218		25,964
Derivative liabilities		2,678,310		3,150,149
Total		2,703,528		3,176,113

(3) Financial liabilities at FVTPLare as follows (Unit: Korean won in millions):

	March 31, 2018		December 31, 2017
Equity linked securities index:
Equity linked securities index in short position		230,441		160,057
Debentures:
Debentures in local currency		91,002		91,739
Total		321,443		251,796

(4) Credit risk adjustments to financial liabilities at FVTPL are as follows (Unit: Korean won in millions):

	For the three months ended March31
	2018			2017
Financial liabilities designated as at FVTPL (IFRS 9)		321,443			—
Financial liabilities designated as at FVTPL (IAS 39)		—			632,331
Changes in fair value for credit risk adjustments		(124	)		(174	)
Accumulated changes in credit risk adjustments		9			185

The adjustment to reflect Group’s credit risk is considered in measuring the fair value of derivatives. The Group’s credit risk is determined by adjusting credit spread observed in credit rating of bank.

(5) The difference between financial liabilities at FVTPL’s carrying amount and nominal amount at maturity is as follows (Unit: Korean won in millions):

	March 31, 2018			December 31, 2017
Carrying amount		321,443			251,796
Nominal amount at maturity		358,680			255,408
Difference		(37,237	)		(3,612	)

(6) Capital fluctuation in financial liabilities at FVTPL (IFRS 9)

Realized cumulative gain or loss designated in other comprehensive income due to derecognition of financial liabilities at FVTPL is as follows (Unit: Korean won in millions):

	For the three months ended March31
Equity-linked securities index:		(5	)

21. DEPOSITS DUE TO CUSTOMERS

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

	March 31, 2018			March 31, 2017
Deposits in local currency:
Deposits on demand		8,899,752			9,349,070
Deposits at termination		198,009,537			194,292,679
Mutual installment		33,213			34,055
Deposits on notes payables		1,463,284			1,323,679
Deposits on CMA		162,876			164,431
Certificate of deposits		4,257,091			4,436,443
Other deposits		1,418,091			1,451,841
Subtotal		214,243,844			211,052,198
Deposits in foreign currencies		23,286,054			23,682,896
Present value discount		(32,759	)		(40,010	)
Total		237,497,139			234,695,084

22. BORROWINGS AND DEBENTURES

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

	March 31, 2018
	Lenders	Interest rate (%)		Amount
Borrowings in local currency:
Borrowings from The BOK	The BOK		0.5 ~ 0.8		1,427,134
Borrowings from government funds	Small Enterprise And Market Service and others		0.0 ~ 3.5		1,780,176
Others	The Korea Development Bank and others		0.0 ~ 4.0		4,294,780
Subtotal					7,502,090
Borrowings in foreign currencies:
Borrowings in foreign currencies	The Export-Import BOK and others		0.0 ~ 6.5		5,862,259
Offshore borrowings in foreign currencies	JPMORGAN CHASE BANK		2.2		31,995
Subtotal					5,894,254
Bills sold	Others		0.0 ~ 1.2		40,134
Call money	Bank and others		0.0 ~ 2.8		496,115
Bonds sold under repurchase agreements	Other financial institutions		0.6 ~ 12.7		2,570
Present value discount					(49	)
Total					13,935,114

	December 31, 2017
	Lenders	Interest rate (%)		Amount
Borrowings in local currency:
Borrowings from The BOK	The BOK		0.5 ~ 0.8		1,404,087
Borrowings from government funds	Small Enterprise And Market Service and others		0.0 ~ 2.9		1,723,340
Others	The Korea Development Bank and others		0.0 ~ 3.2		3,957,421
Subtotal					7,084,848
Borrowings in foreign currencies:
Borrowings in foreign currencies	The Export-Import BOK and others		0.0 ~ 6.8		6,996,551
Offshore borrowings in foreign currencies	Commonwealth Bank		1.8		28,285
Subtotal					7,024,836
Bills sold	Others		0.0 ~ 1.2		36,953
Call money	Bank and others		1.5 ~ 2.7		635,061
Bonds sold under repurchase agreements	Other financial institutions		0.6 ~ 12.7		3,173
Present value discount					(165	)
Total					14,784,706

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

	March 31, 2018					December 31, 2017
	Interest rate (%)		Amount			Interest rate (%)		Amount
Face value of bond(*):
Ordinary bonds		1.5 ~ 4.5		21,731,204			1.5 ~ 5.8		22,468,908
Subordinated bonds		3.0 ~ 12.6		4,737,477			3.4 ~ 12.6		4,781,301
Other bonds		1.6 ~ 17.0		649,978			1.6 ~ 17.0		649,615
Subtotal				27,118,659					27,899,824
Discounts on bond				(27,034	)				(30,173	)
Total				27,091,625					27,869,651

(*) Included debentures under fair value hedge relationships are 3,020,748 million Won and 3,102,386 million Won as of March 31, 2018 and December 31, 2017, respectively. Also, debentures under cash flow hedge amounting to 699,142 million Won and 699,029 million Won are included as of March 31, 2018 and December 31, 2017.

23. PROVISIONS

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

	March 31, 2018		December 31, 2017
Asset retirement obligation		67,111		61,872
Provision for guarantee (*1)		181,936		183,247
Provisions for unused commitments		100,329		66,115
Provisions for customer reward credits		44,677		40,445
Other provisions (*2)		58,660		58,791
Total		452,713		410,470

(*1) Provision for guarantee includes provision for financial guarantee of 66,953 million Won and 71,697 million Won as of March 31, 2018 and December 31, 2017, respectively.

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

(2) Changes in provision on guarantee and loan commitments are as follows (Unit: Korean won in millions):

1) Provision on guarantee

	For the three months ended March 31, 2018
	Stage 1			Stage 2			Stage 3			Total
Beginning balance		47,188			18,281			127,511			192,980
Replaced by 12-month expected credit loss		56			(56	)		—			—
Replaced with expected credit loss for the entire period		(51	)		51			—			—
Replaced credit-impaired financial assets		(17	)		(5	)		22			—
Provisions used		(4,727	)		—			—			(4,727	)
Net reversal of unused amount		(2,848	)		(530	)		(7,258	)		(10,636	)
Others		4,313			6			—			4,319
Ending balance		43,914			18,281			120,275			181,936

	For the three months ended March 31, 2017
Beginning balance		238,117
Provisions provided		397
Provisions used		(6,696	)
Reversal of provisions unused		(29,294	)
Foreign currencies translation adjustments		(10	)
Others		4,377
Ending balance		206,891

2) Provision on loan commitments

	For the three months ended March 31, 2018
	Stage1			Stage2			Stage3			Total
Beginning balance		75,232			27,875			1,878			104,985
Replaced by 12-month expected credit loss		4,138			(4,079	)		(59	)		—
Replaced with expected credit loss for the entire period		(1,195	)		1,238			(43	)		—
Replaced credit-impaired financial assets		(50	)		(199	)		249			—
Provisions used		(1	)		—			—			(1	)
Net provision (reversal) of unused amount		(5,595	)		510			428			(4,657	)
Others		2			—			—			2
Ending balance		72,531			25,345			2,453			100,329

	For the three months ended March 31, 2017
Beginning balance		87,909
Provisions provided		252
Provisions used		(52	)
Reversal of provisions unused		(14,212	)
Foreign currencies translation adjustments		(8	)
Ending balance		73,889

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

	For the three months ended March 31
	2018			2017
Beginning balance		61,872			58,076
Provisions provided		526			424
Provisions used		(119	)		(311	)
Amortization		104			83
Reversal of provisions unused		(989	)		(727	)
Increase in restoration costs and others		5,717			4,323
Ending balance		67,111			61,868

(4) Changes in other obligation are as follows (Unit: Korean won in millions):

	For the three months ended March 31, 2018
	Provisions for customer reward credits			Other provisions			Total
Beginning balance		40,445			58,791			99,236
Provisions provided		19,099			2,112			21,211
Provisions used		(24,827	)		(2,335	)		(27,162	)
Reversal of unused amount		—			(52	)		(52	)
Foreign currencies translation adjustments		—			(26	)		(26	)
Transfer(*)		3,039			—			3,039
Others		6,921			170			7,091
Ending balance		44,677			58,660			103,337

(*) As the credits of the affiliates were transferred to the Group, the allowance for the provisions for customer reward credits increased for the three months ended March 31, 2018.

	For the three months ended March 31, 2017
	Provisions for customer reward credits			Other provisions			Total
Beginning balance		22,093			22,282			44,375
Provisions provided		17,420			7			17,427
Provisions used		(18,963	)		(3,429	)		(22,392	)
Reversal of unused amount		—			(1,570	)		(1,570	)
Foreign currencies translation adjustments		—			(2,683	)		(2,683	)
Transfer(*)		6,427			—			6,427
Others		14			—			14
Ending balance		26,991			14,607			41,598

(*) As the credits of the affiliates were transferred to the Group, the allowance for the provisions for customer reward credits increased for the three months ended March 31, 2018.

24. NET DEFINED BENEFIT LIABILITY

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 are as follows (Unit: Korean Won in millions):

	March 31, 2018			December 31, 2017
Defined benefit obligation		1,142,150			1,071,170
Fair value of plan assets		(990,052	)		(1,027,906	)
Net defined benefit liability		152,098			43,264

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

	For the three months ended March 31, 2018			For the three months ended March 31, 2017
Beginning balance		1,071,170			984,381
Current service cost		36,225			36,787
Interest expense		7,901			6,572
Remeasurements		69,414			31,876
Foreign currencies translation adjustments		(13	)		(139	)
Retirement benefit paid		(42,602	)		(4,766	)
Curtailment or liquidation		—			(6	)
Others		55			(806	)
Ending balance		1,142,150			1,053,899

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

	For the three months ended March 31, 2018			For the three months ended March 31, 2017
Beginning balance		1,027,906			990,653
Interest income		8,317			7,564
Remeasurements		(4,080	)		(3,156	)
Employer’s contributions		2			—
Retirement benefit paid		(42,093	)		(3,590	)
Curtailment or liquidation		—			(6	)
Others		—			18,396
Ending balance		990,052			1,009,861

(4) Plan assets wholly consist of time deposits as of March 31, 2018 and December 31, 2017, respectively. Among plan assets, realized returns on plan assets amount to 4,237 million Won and 4,408 million Won for the three months ended March 31, 2018 and 2017, respectively.

Meanwhile, the contribution expected to be paid in the current accounting year amounts to 125,818 million Won.

(5) Current service cost, net interest income, loss (gain) 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 three months ended March 31, 2018			For the three months ended March 31, 2017
Current service cost		36,225			36,787
Net interest income		(416	)		(992	)
Cost recognized in net income		35,809			35,795
Remeasurements(*)		73,494			35,032
Cost recognized in total comprehensive income		109,303			70,827

(*) This is an amount before considering the tax effects.

Retirement benefit service costs related to defined contribution plans are recognized 615 million Won and 1,290 million Won for the three months ended March 31, 2018 and 2017, respectively.

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

	March 31, 2018	December 31, 2017
Discount rate	3.33%	3.18%
Future wage growth rate	6.18%	6.18%
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):

		March 31, 2018			December 31, 2017
Discount rate	Increase by 1% point		(120,320	)		(116,405	)
	Decrease by 1% point		141,685			137,151
Future wage growth rate	Increase by 1% point		141,392			136,707
	Decrease by 1% point		(121,834	)		(117,765	)

25. OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES

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

	March 31, 2018			December 31, 2017
Other financial liabilities:
Accounts payable		10,596,605			4,692,320
Accrued expenses		1,753,606			2,049,861
Borrowings from trust accounts		3,317,982			3,271,817
Agency business revenue		457,777			344,591
Foreign exchange payables		465,576			590,667
Domestic exchange payables		3,601,254			1,309,646
Other miscellaneous financial liabilities		2,260,308			1,635,156
Present value discount		(1,964	)		(1,597	)
Subtotal		22,451,144			13,892,461
Other liabilities:
Unearned income		186,813			180,664
Other miscellaneous liabilities		152,244			103,317
Subtotal		339,057			283,981
Total		22,790,201			14,176,442

26. DERIVATIVES

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

	March 31, 2018
			Assets				Liabilities
	Nominal amount		For fair value hedge		For trading		For cash flow hedge		For fair value hedge		For trading
Interest rate:
Futures		181,562		—		—		—		—		—
Swaps		137,767,689		39,272		214,118		—		28,256		238,983
Purchase options		590,000		—		12,155		—		—		—
Written options		785,000		—		—		—		—		12,512
Currency:
Futures		524,462		—		—		—		—		—
Forwards		64,937,799		—		824,698		—		—		860,121
Swaps		50,143,713		—		1,368,662		59,080		—		1,347,093
Purchase options		2,467,720		—		43,584		—		—		—
Written options		4,110,567		—		—		—		—		42,935
Equity:
Futures		168,857		—		—		—		—		—
Swaps		282,342		—		6,105		—		—		—
Purchase options		4,545,896		—		142,962		—		—		—
Written options		5,692,891		—		—		—		—		175,995
Others:
Futures		—		—		—		—		—		—
Swaps		6,216		—		585		—		—		569
Purchase options		—		—		—		—		—		—
Written options		5,132		—		—		—		—		102
Total		272,209,846		39,272		2,612,869		59,080		28,256		2,678,310

	December 31, 2017
			Assets				Liabilities
	Nominal amount		For fair value hedge		For trading		For cash flow hedge		For fair value hedge		For trading
Interest rate:
Futures		75,845		—		—		—		—		—
Swaps		130,197,378		59,272		223,935		—		12,103		253,972
Purchase options		630,000		—		12,346		—		—		—
Written options		795,000		—		—		—		—		12,869
Currency:
Futures		318,217		—		—		—		—		—
Forwards		72,526,956		—		1,314,368		—		—		1,375,799
Swaps		48,176,306		—		1,352,924		55,651		—		1,347,905
Purchase options		2,291,154		—		64,267		—		—		—
Written options		4,038,237		—		—		—		—		58,687
Equity:
Futures		91,436		—		—		—		—		—
Swaps		15,000		—		103		—		—		10
Purchase options		5,060,706		—		146,775		—		—		—
Written options		4,504,290		—		—		—		—		99,770
Others:
Futures		—		—		—		—		—		—
Swaps		7,805		—		1,056		—		—		1,037
Purchase options		—		—		—		—		—		—
Written options		5,000		—		—		—		—		100
Total		268,733,330		59,272		3,115,775		55,651		12,103		3,150,149

Derivatives held for trading are classified into financial assets at FVTPL (Note 7) and financial liabilities at FVTPL (Note 20), and derivatives held for hedging are presented as a separate line item in the consolidated statements of financial position.

(2) Overview of the Group’s hedge accounting

1) Fair value hedge

As of the current period end, the Group has applied fair value hedge on fixed interest rate foreign currency denominated debentures amounting to 3,020,748 million Won. The purpose of the hedging is to avoid fair value volatility risk of fixed interest rate foreign currency denominated debentures derived from fluctuations of market interest rate, and as such the Group entered into interest rate swap agreements designated as hedging instruments.

The Group entered into interest rate swap agreements to manage its exposure to interest rate risk and designated as hedging instruments. Pursuant to the interest rate swap agreement, hedge ratio is determined by matching the nominal value to the face value of the hedging instrument.

In this hedging relationship, only the market interest rate fluctuation, which is the most significant part of the fair value change of the hedged item, is designated as the hedged risk, and other risk factors including credit risk are not included in the hedged risk. Therefore, the ineffective portion of the hedge could arise from fluctuations in the timing of the cash flow of the hedged item, the change in the total amount and price of the hedged item, or significant credit risk fluctuation of either party of the hedged item.

The interest rate swap agreements and the hedged items are subject to fluctuations in the underlying market rate of interest and the Group expects the value of the interest rate swap contract and the value of the hedged item to generally change in the opposite direction.

The fair value of the interest rate swap at the end of the reporting period is determined by discounting future cash flows estimated using the yield curve at the end of the reporting period and the credit risk embedded in the contract and the average interest rate is determined based on the outstanding balance at the end of the reporting period. The variable interest rate applied to the interest rate swap is USD Libor 3M (6M) plus spread. In accordance with the terms of each interest rate swap contract designated as a hedging instrument, the Group receives interest at a fixed interest rate and pays interest at a variable interest rate.

2) Cash Flow Hedge

As of the current period end, the Group has applied Cash Flow hedge on foreign currency denominated bonds amounting to 699,147 million Won. The purpose of the hedging is to avoid cash flow volatility risk of foreign currency denominated bonds derived from fluctuations of exchange rate, and as such the Group entered into currency swap agreements designated as hedging instruments.

(3) The nominal amounts of the hedging instrument as of March 31, 2018 are as follows (Unit: USD, SGD):

	1 year or less		1 year to 5 years		More than 5 years		Total
Fair value hedging derivatives
Interest rate swap		500,000,000		1,350,000,000		1,000,000,000		2,850,000,000
Cash flow hedge
Currency swap(USD)		—		500,000,000		—		500,000,000
Currency swap(SGD)		—		204,000,000		—		204,000,000

(4) The average interest rate and average currency rate of the hedging instrument as of March 31, 2018 is as follows:

	Average interest rate and average currency rate
Fair value hedging derivatives
Interest rate swaps	Fixed 3.98% receipt and 3.93% floating paid
Cash flow hedge
Currency swap(USD)	USD 2.46% receipt, KRW 1.91% paid, USD/KRW =1,173 Won
Currency swap(SGD)	SGD 1.91% receipt, KRW 1.98% paid, SGD/KRW = 828 Won

(5) The amounts related to items designated as hedging instruments as of March 31, 2018 are as follows (Unit: Korean Won in millions, USD, SGD):

			Carrying amounts of the hedging instrument
	Nominal amounts of the hedging instrument		Assets		Liabilities		Line item in the statement of financial position where the hedging instrument is located		Changing in fair value used for calculating hedge ineffectiveness
Fair value hedge Interest rate swaps		USD 2,850,000,000		39,272		28,256		Derivative assets, Derivative liabilities		(46,650	)
Cash flow hedge Currency swap		USD 500,000,000 SGD 204,000,000		—		59,080		Derivative liabilities		(4,723	)

(6) Details of carrying amount to hedge and amount due to hedge accounting are as follows (Unit: Korean won in millions):

	Carrying amounts of the hedging item				Accumulated amount of fair value hedge adjustments on the hedged item included in the carrying amount of the hedged item					Line item in the statement of financial position in which the hedged item is included		Changing in fair value used for calculating hedge ineffectiveness		Cash flow hedge reserve (*)
	Assets		Liabilities		Assets		Liabilities
Fair value hedging Interest rate swap		—		3,020,748		—		(79,382	)		debentures		47,594		—
Cash flow hedge Currency swap		—		699,147		—		—			debentures		4,725		(2,649	)

(*) Amount after tax deduction

(7) Amounts recognized in profit or loss due to the ineffective portion of fair value hedges during the current quarter are as follows (Unit: Korean won in millions):

		Hedge ineffectiveness recognized in profit or loss		Line item in the profit or loss that includes hedge ineffectiveness
Fair value hedge	Interest rate risk		944	Other net operating income(expense)

(8) Reclassification of profit or loss from other comprehensive income and equity related to cash flow hedges is as follows (Unit: Korean won in millions):

		Changes in the value of hedging instruments recognized in cash flow hedge reserve			Hedge ineffectiveness recognized in profit or loss		Line item in the profit or loss that includes hedge ineffectiveness	Amounts reclassified from cash flow hedge reserve to profit or loss		Line item affected in profit or loss because of the reclassification
Cash flow hedge	Currency risk		(4,725	)		2	Other net operating income(expense)		—	Other net operating income(expense)

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 three months ended March 31
	2018			2017
Beginning balance		7,416			13,422
New transactions		17,443			500
Amounts recognized in profits or losses		(1,004	)		(2,315	)
Ending balance		23,855			11,607

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

28. CAPITAL STOCK AND CAPITAL SURPLUS

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

	March 31, 2018		December 31, 2017
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 three months ended March 31, 2018 and 2017.

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

	March 31, 2018		December 31, 2017
Capital in excess of par value		269,533		269,533
Other capital surplus		16,350		16,347
Total		285,883		285,880

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 (%)		March 31, 2018			December 31, 2017
Securities in local currency		June 20, 2008		June 20, 2038		7.7		255,000			255,000
		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		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			562,700
Issuance cost								(12,912	)		(12,912	)
Total								3,017,888			3,017,888

The hybrid securities mentioned above are either without a maturity date or its maturity can be extended indefinitely at the maturity date without change of terms. Further, if a resolution is passed not to pay dividends on common stock, interest payments on the hybrid securities may be skipped.

30. OTHER EQUITY

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

	March 31, 2018			December 31, 2017
Accumulated other comprehensive income:
Net gain or loss on valuation of financial assets at FVTOCI		(55,663	)		—
Gain on valuation of AFS financial assets		—			301,930
Net gain or loss on financial liabilities at FVTOCI due to own credit risk		(6	)		—
Share of other comprehensive loss of joint ventures and associates		(3,547	)		(1,251	)
Loss on foreign currency translation of foreign operations		(242,398	)		(242,700	)
Remeasurement loss related to defined benefit plan		(205,750	)		(152,624	)
Gain on valuation of cash flow hedges		(2,649	)		777
Equity related to non-current assets held for sale		4,145			4,145
Subtotal		(505,868	)		(89,723	)
Treasury shares		(34,113	)		(34,113	)
Other capital adjustments		(1,607,280	)		(1,815,438	)
Total		(2,147,261	)		(1,939,274	)

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

	For the three months ended March 31, 2018
	Beginning balance			Increase (decrease)(*)			Reclassif- ication adjustments(*)		Income tax effect			Ending balance
Gain (loss) on valuation of AFS financial assets		(88,906	)		43,910			1,943		(12,610	)		(55,663	)
Net gain or loss on financial liabilities at FVTOCI due to own credit risk		(96	)		124			—		(34	)		(6	)
Share of other comprehensive loss of joint ventures and associates		(2,656	)		(1,228	)		—		337			(3,547	)
Loss on foreign currency translation of foreign operations		(242,806	)		563			—		(155	)		(242,398	)
Remeasurement gain (loss) related to defined benefit plan		(152,358	)		(73,645	)		—		20,253			(205,750	)
Gain (loss) on valuation of cash flow hedges		777			(4,725	)		—		1,299			(2,649	)
Transfer to non-current assets held for sale		4,145			—			—		—			4,145
Total		(481,900	)		(35,001	)		1,943		9,090			(505,868	)

(*) For the change in gain (loss) on valuation of financial assets at FVTOCI, “increase (decrease)” represents change due to the valuation during the period and “reclassification adjustments” represent disposal on financial assets at FVTOCI.

	For the three months ended March 31, 2017
	Beginning balance			Increase (decrease)(*)			Reclassif- ication adjustments(*)		Income tax effect			Ending balance
Gain (loss) on valuation of AFS financial assets		386,981			5,822			11,715		(4,757	)		399,761
Share of other comprehensive income (loss) of joint ventures and associates		(1,863	)		2,298			—		(594	)		(159	)
Gain (loss) on foreign currency translation of foreign operations		(48,353	)		(123,762	)		—		30,792			(141,323	)
Remeasurement of the net defined benefit liability		(163,397	)		(34,991	)		—		8,470			(189,918	)
Gain (loss) on valuation of cash flow hedges		—			(1,100	)		—		247			(853	)
Total		173,368			(151,733	)		11,715		34,158			67,508

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

31. RETAINED EARNINGS

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

		March 31, 2018			December 31, 2017
Legal reserve	Earned surplus reserve		1,857,754			1,729,754
	Other legal reserve		46,384			45,668
	Subtotal		1,904,138			1,775,422
Voluntary reserve	Business rationalization reserve		8,000			8,000
	Reserve for financial structure improvement		235,400			235,400
	Additional reserve		7,759,804			7,418,806
	Regulatory reserve for credit loss		2,578,457			2,438,191
	Revaluation reserve		715,860			751,964
	Other voluntary reserve		—			11,700
	Subtotal		11,297,521			10,864,061
Net interest income before acquisition of subsidiary			(1,553	)		—
Conversion of loss on disposal of financial assets at FVTOCI to retained earnings			(1,974	)		—
Retained earnings before appropriation			2,604,078			2,980,523
Total			15,802,210			15,620,006

i. Earned surplus reserve

In accordance with the Banking Act, earned surplus 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

Additional reserve was 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 IFRS for the accounting purpose are lower than provisions under RSBB, the Group 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 IFRS.

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

	For the three months ended March 31
	2018			2017
Beginning balance		15,797,097			14,611,566
Net attributable to owners		589,736			637,473
Dividends on common stock		(336,636	)		(269,308	)
Dividends on hybrid securities		(37,855	)		(49,266	)
Conversion to retained earnings and others		(210,132	)		—
Ending balance		15,802,210			14,930,465

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 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):

	March 31, 2018			December 31, 2017
Beginning balance		2,578,457			2,438,191
Planned provision of regulatory reserve(reversal) for credit loss		(213,068	)		140,266
Ending balance		2,365,389			2,578,457

(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):

	For the three months ended March 31
	2018		2017
Net income		594,520		642,731
Provision of regulatory reserve for credit loss(*)		50,018		1,549
Adjusted net income after the provision of regulatory reserve		544,502		641,182
Adjusted EPS after the provision of regulatory reserve (Unit: Korean Won)		753		880

(*) The amount of reserve for credit loss for the three months ended March 31, 2018 is calculated considering only the change in the reserve for credit loss after the accounting policy change due to adoption of IFRS 9. Therefore, the effect of reducing the reserve for credit losses due to changes in accounting policies was excluded.

33. DIVIDENDS

At the shareholders’ meeting on March 23, 2018, dividend payment for the year ended December 31, 2017 amounting to 336,636 million Won (500 Won per share) was approved.

34. NET INTEREST INCOME

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

	For the three months ended March 31
	2018		2017
Financial assets at FVTPL (IFRS 9)		15,170		—
Financial assets at FVTPL (IAS 39)		—		13,732
Financial assets at FVTOCI		57,276		—
AFS financial assets		—		76,400
Securities at amortized cost		81,202		—
HTM financial assets		—		74,983
Financial assets at amortized cost:
Interest on due from banks		33,138		—
Interest on loans		2,081,206		—
Interest of other receivables		6,755		—
Subtotal		2,121,099		—
Loans and receivables:
Interest on due from banks		—		21,221
Interest on loans		—		1,888,649
Interest of other receivables		—		8,791
Subtotal		—		1,918,661
Total		2,274,747		2,083,776

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

	For the three months ended March 31
	2018		2017
Interest on deposits due to customers		654,957		588,333
Interest on borrowings		59,410		57,882
Interest on debentures		172,058		151,359
Other interest expense		21,171		23,458
Total		907,596		821,032

35. NET FEES AND COMMISSIONS INCOME

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

	For the three months ended March 31
	2018		2017
Fees and commissions received (*)		177,754		172,634
Fees and commissions received for provision of guarantee		15,603		15,789
Fees and commissions received on project financing		6,417		1,720
Fees and commissions received on credit card		273,577		258,679
Fees and commissions received on securities		26,471		20,510
Other fees and commissions received		57,784		38,280
Total		557,606		507,612

(*) 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):

	For the three months ended March 31
	2018		2017
Fees and commissions paid		39,334		31,237
Credit card commissions		211,317		200,074
Brokerage commissions		334		227
Others		1,313		1,122
Total		252,298		232,660

36. DIVIDEND INCOME

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

	For the three months ended March 31
	2018		2017
Financial assets at FVTPL (IFRS 9)		19,650		—
Financial assets at FVTPL (IAS 39)		—		143
Financial assets at FVTOCI		15,903		—
AFS financial assets		—		39,685
Total		35,553		39,828

(2) Details of dividends related to Financial assets at FVTOCI for the three months ended March 31 are as follows (Unit: Korean won in millions):

	2018
Dividend income recognized from assets held as of March 31, 2018:
Equity securities		15,903
Dividend income recognized in assets derecognized on March 31:		—
Total		15,903

37. NET GAIN OR LOSS ON FINANCIAL INSTRUMENTS AT FVTPL

(1) Details of gains or losses related to net gain or loss on financial instruments at FVTPL are as follows (Unit: Korean won in millions):

	For the three months ended March 31
	2018		2017
Gain on financial assets at FVTPL		44,030		—
Losses on financial assets held for trading		—		(96,452	)
Gain on financial instruments designated at FVTPL		5,300		—
Losses on financial assets designated as at FVTPL		—		(62,023	)
Total		49,330		(158,475	)

(2) Details of net gain or loss on financial instruments at FVTPL and financial assets held for trading are as follows (Unit: Korean won in millions):

			For the three months ended March 31
			2018			2017
Financial assets at	Securities	Gain on valuation		44,879			4,840
FVTPL		Gain on disposals		3,492			5,924
(financial assets		Loss on valuation		(11,838	)		(3,726	)
held for trading)		Loss on disposals		(1,699	)		(749	)
		Subtotal		34,834			6,289
	Loans and receivables	Gain on valuation		2,818			—
		Loss on valuation		(20	)		—
		Subtotal		2,798			—
	Other financial assets	Gain on valuation		1,741			1,576
		Gain on disposals		262			119
		Loss on valuation		(1,873	)		(1,619	)
		Loss on disposals		(72	)		(23	)
		Subtotal		58			53
	Total of financial instruments held for trading			37,690			6,342
Derivatives (for trading)	Interest rates derivatives	Gain on transactions and valuation		368,990			231,712
		Loss on transactions and valuation		(347,144	)		(223,564	)
		Subtotal		21,846			8,148
	Currencies derivatives	Gain on transactions and valuation		988,952			3,867,771
		Loss on transactions and valuation		(1,002,956	)		(4,048,664	)
		Subtotal		(14,004	)		(180,893	)
	Equity derivatives	Gain on transactions and valuation		133,652			210,625
		Loss on transactions and valuation		(134,775	)		(140,435	)
		Subtotal		(1,123	)		70,190
	Other derivatives	Gain on transactions and valuation		648			10,017
		Loss on transactions and valuation		(1,027	)		(10,256	)
		Subtotal		(349	)		(239	)
	Total of derivatives(for trading)			6,340			(102,794	)
	Total			44,030			(96,452	)

(3) Details of net gain or loss on financial instruments at FVTPL are as follows (Unit: Korean won in millions):

	For the three months ended March 31
	2018			2017
Gain on equity-linked securities
Loss on disposals of equity-linked securities		(331	)		(12,191	)
Gain (loss) on valuation of equity-linked securities		4,978			(49,047	)
Subtotal		4,647			(61,238	)
Gain on other securities:
Gain on valuation of other securities		—			98
Gain (loss) on other financial instruments:
Gain (loss) on valuation of other financial instruments		653			(883	)
Total		5,300			(62,023	)

38. NET GAIN OR LOSS ON FINANCIAL ASSETS AT FVTOCI AND AFS FINANCIAL ASSETS

Details of net gain or loss on financial assets at FVTOCI and AFS financial assets recognized are as follows (Unit: Korean won in millions):

	For the three months ended March 31
	2018		2017
Gains on redemption of securities		5		327
Gains on transaction of securities		807		21,243
Impairment losses on securities		—		(5,785	)
Total		812		15,785

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):

	For the three months ended March 31
	2018			2017
Reversal of credit loss on financial assets at financial assets at FVTOCI		216			—
Reversal of credit loss on securities at amortized cost losses		9			—
Provision for credit loss on loans and other financial assets at amortized cost		(137,753	)		—
Impairment losses due to credit loss		—			(122,134	)
Reversal of provision on guarantee		10,636			28,897
Reversal of provision on loan commitment		4,657			13,960
Total		(122,235	)		(79,277	)

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

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

			For the three months ended March 31
			2018		2017
Employee benefits	Short term employee benefits	Salaries Employee benefits		303,018		328,157
				104,694		99,430
	Retirement benefit service costs			36,326		37,085
	Subtotal			444,038		464,672
Depreciation and amortization				47,476		49,547
Other general and administrative expenses	Rent			79,580		80,411
	Taxes and dues			29,110		29,101
	Service charges			52,163		48,807
	Computer and IT related			21,877		14,388
	Telephone and communication			16,910		15,479
	Operating promotion			10,429		11,050
	Advertising			6,685		7,446
	Printing			1,964		2,142
	Traveling			3,355		3,104
	Supplies			1,486		1,600
	Insurance premium			2,041		2,213
	Reimbursement			938		4,467
	Maintenance			4,355		3,551
	Water, light and heating			4,394		4,263
	Vehicle maintenance			2,215		2,362
	Others			10,668		9,667
	Subtotal			248,170		240,051
	Total			739,684		754,270

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

	For the three months ended March 31
	2018		2017
Gain on transaction of foreign exchange		690,152		1,079,690
Gain on disposals of loans and receivables (*1)		—		186,999
Gain related to derivatives		2,570		64
Gain on fair value hedged items		47,694		18,954
Other (*2)		15,781		62,855
Total		756,197		1,348,562

(*1) Gain on disposal of loan and receivables occurred for the three month ended March 31, 2017 was presented into a separate account for gain related to financial assets at amortized cost in accordance with the adoption of IFRS 9.

(*2) Other income includes such income amounting to 28,800 million Won for the three months ended March 31, 2017 that the Group recognized for it is to receive from other creditor financial institutions in accordance with the creditor financial institutions committee agreement.

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

	For the three months ended March 31
	2018		2017
Loss on transaction of foreign exchange		611,377		840,024
KDIC deposit insurance fees		77,180		73,110
Contribution to miscellaneous funds		72,932		72,335
Loss on disposals of loans and receivables(*1)		—		68
Loss related to derivatives		49,307		47,572
Loss on fair value hedged items		—		26
Others (*2)		41,864		36,970
Total		852,660		1,070,105

(*1) Loss on disposal of loan and receivables occurred for the three month ended March 31, 2017 was presented into a separate account for loss related to financial assets at amortized cost in accordance with the adoption of K-IFRS 1109.

(*2) For the three months ended March 31, 2018, ‘Other expense’ includes losses amounting to 200 million won million won, which are related to the Group’s expected payments to other creditor financial institutions in accordance with the creditor financial institutions committee agreement. In addition, ‘Other expense’ for the three months ended March 31, 2018 and 2017 includes 11,771 million won and 12,139 million won, respectively, of intangible asset amortization expense.

41. OTHER NON-OPERATING INCOME (EXPENSES)

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

	For the three months ended March 31
	2018			2017
Gain on valuation		4,660			13,377
Loss on valuation		(13,803	)		(62,792	)
Total		(9,143	)		(49,415	)

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

	For the three months ended March 31
	2018			2017
Other non-operating income		15,696			46,774
Other non-operating expenses		(21,815	)		(48,473	)
Total		(6,119	)		(1,699	)

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

	For the three months ended March 31
	2018		2017
Rental fee income		1,516		1,820
Gains on disposal of investment in joint ventures and associates		—		28,420
Gains on disposal of premises and equipment and other assets		1,277		181
Reversal of impairment loss on premises and equipment and other assets		340		32
Others		12,563		16,321
Total		15,696		46,774

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

	For the three months ended March 31
	2018		2017
Depreciation on investment properties		1,006		999
Interest expenses of rent leasehold deposits		142		118
Losses on disposal of investment in joint ventures and associates		2,931		27,684
Losses on disposal of premises and equipment and other assets		54		337
Impairment losses on premises and equipment and other assets		—		120
Donation		13,491		4,554
Others		4,191		14,661
Total		21,815		48,473

42. INCOME TAX EXPENSE

(1) Income tax expenses are as follows (Unit: Korean Won in millions):

	For the three months ended March 31
	2018			2017
Current tax expense
Current tax expense in respect of the current year		8,742			210,589
Adjustments recognized in the current period in relation to the current tax of prior periods		(971	)		(722	)
Subtotal		7,771			209,867
Deferred tax expense
Deferred tax benefit relating to the origination and reversal of temporary differences		123,968			(56,047	)
Deferred tax charged directly to equity		4,457			32,079
Others (tax effect charged directly to equity due to the adoption of K-IFRS 1109)		75,319			—
Subtotal		203,744			(23,968	)
Income tax expense		211,515			185,899

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

	For the three months ended March 31
	2018			2017
Net income before income tax expense		806,035			828,630
Tax calculated at statutory tax rate (*)		211,298			200,066
Adjustments
Effect of income that is exempt from taxation		(7,789	)		(18,387	)
Effect of expense not deductible in determining taxable profit		5,794			4,847
Adjustments recognized in the current period in relation to the current tax of prior periods		(971	)		(722	)
Others		3,183			95
Subtotal		217			(14,167	)
Income tax expense		211,515			185,899
Effective tax rate		26.2	%		22.4	%

(*) The applicable income tax rate; 1) 11% for below 200 million Won, 2) 22% for above 200 million Won and below 20 billion Won, 3) 24.2% for above 20 billion Won and below 300 billion Won, 4) 27.5% for above 300 billion won..

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

	March 31, 2018		December 31, 2017
Net gain or loss on valuation of financial assets at FVTOCI		22,094		—
Loss on valuation of AFS securities		—		(114,169	)
Share of other comprehensive income (loss) of joint ventures and associates		1,016		(954	)
Foreign currency translation of foreign operations		10,994		15,855
Remeasurements of the net defined benefit liability		76,540		56,317
Gain (loss) on cash flow hedge		410		(248	)
Total		111,054		(43,199	)

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):

	For the three months ended March 31
	2018			2017
Net income attributable to owners		589,736			637,473
Dividends to hybrid securities		(37,855	)		(49,266	)
Net income attributable to common shareholders		551,881			588,207
Weighted average number of common shares outstanding		673 million shares			673 million shares
Basic Earnings Per Share (Unit: Korean Won)		820			874

Diluted EPS is equal to basic EPS because there is no dilution effect for the three months ended March 31, 2018 and 2017.

44. CONTINGENT LIABILITIES AND COMMITMENTS

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

	March 31, 2018		December 31, 2017
Confirmed guarantees
Guarantee for loans		155,519		157,299
Acceptances		342,924		320,519
Guarantees in acceptances of imported goods		107,100		108,238
Other confirmed guarantees		5,928,457		6,288,965
Total		6,534,000		6,875,021
Unconfirmed guarantees
Local letter of credit		381,056		383,117
Letter of credit		3,453,960		3,637,787
Other unconfirmed guarantees		573,976		505,689
Total		4,408,992		4,526,593
Commercial paper purchase commitments and others		1,465,161		1,458,101

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

	March 31, 2018		December 31, 2017
Loan commitments		96,822,354		80,760,325
Other commitments		5,814,876		4,546,090

(3) Litigation case

Ongoing litigations of the Group are as follows (Unit: Korean Won in millions except for number of cases):

	March 31, 2018				December 31, 2017
	As plaintiff		As defendant		As plaintiff		As defendant
Number of cases		82 cases		163 cases		83 cases		155 cases
Amount of litigation		423,184		259,628		413,267		244,767
Provisions for litigations				4,418				9,277

(4) Other

The Group provides clearance services for payments in Korean Won in order to facilitate trade transactions between Korea and Iran. In connection with these services, the Group is currently being investigated by US government agencies including US prosecutors (United States Attorney’s Office and New York State Attorney General’s Office) as to whether the Group has violated United States laws by participating in prohibited transactions involving countries sanctioned by the US. The Group has decided not to disclose the required disclosures stated in K-IFRS 1037 ‘Provisions, Contingent Liabilities and Contingent Assets’ as such information may adversely affect the current investigation against the Group.

45. RELATED PARTY TRANSACTIONS

Related parties of the Group as of March 31, 2018 and its assets and liabilities recognized as of March 31, 2018 and December 31, 2017 and major transactions with related parties for the three months ended March 31, 2018 and March 31, 2017 are as follows:

(1) Related parties

	Related parties
Associates	Kumho Tires Co., Inc., Woori Service Networks Co., Ltd., Korea Credit Bureau Co., Ltd., Korea Finance Security Co., Ltd., Chin Hung International Inc., STX Engine Co., Ltd, STX Corporation, 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 24 associates)

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

Related party		A title of account	March 31, 2018			December 31, 2017
Associates	Kumho Tires Co., Inc.	Loans		157,124			170,917
		Allowance for credit loss		(145,188	)		(156,712	)
		Deposits due to customers		75			666
		Other liabilities		495			50
	Woori Service Networks Co., Ltd.	Loans		35			45
		Deposits due to customers		1,696			1,311
		Other liabilities		357			357
	Korea Credit Bureau Co., Ltd.	Loans		4			6
		Deposits due to customers		1,127			5,586
		Other liabilities		10			54
	Korea Finance Security Co., Ltd.	Loans		33			56
		Deposits due to customers		2,221			2,854
		Other liabilities		10			7
	Chin Hung International Inc.	Loans		218			408
		Allowance for credit loss		(35	)		(22	)
		Deposits due to customers		68,234			46,220
		Other liabilities		2,900			1,658
	Poonglim Industrial Co., Ltd. (*1)	Deposits due to customers		—			4
	STX Engine Co., Ltd.	Loans		107,588			106,176
		Allowance for credit loss		(89,867	)		(88,734	)
		Deposits due to customers		16,853			18,092
		Other liabilities		260			29
	STX Corporation	Loans		64,979			47,711
		Allowance for credit loss		(44,561	)		(31,210	)
		Deposits due to customers		11,216			77,555
		Other liabilities		110			80

Related party		A title of account	March 31, 2018			December 31, 2017
	K BANK Co., Ltd.	Loans		248			212
	Well to Sea No.3 Private Equity Fund (*2)	Loans		5,840			73,810
		Allowance for credit loss		(29	)		(39	)
		Deposits due to customers		587			61
		Other liabilities		82			27
	Others (*3)	Loans		330			499
		Allowance for credit loss		(304	)		(471	)
		Other assets		1			1
		Deposits due to customers		6,203			2,906
		Other liabilities		144			73

(*1) 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

(*2) Due to capital contribution by the Group for the year ended December 31, 2017, the entities has been included in the investment in associates.

(*3) Others include Saman Corporation, Kyesan Engineering Co., Ltd., Hyunwoo International Co., Ltd., DAEA SNC Co., Ltd. and others as of March 31, 2018 and 2017.

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

			For the three months ended March 31
Related party		A title of account	2018			2017
Corporation that have significant influence over the group	KDIC(*1)	Interest expenses		—			7,612
Associates	Kumho Tires Co., Ltd.	Interest income		686			854
		Fees income		4			5
		Interest expenses		—			—
		Reversal of allowance for credit loss		(11,524	)		(47	)
	Woori Blackstone Korea Opportunity Private Equity Fund No.1 (*2)	Fees income		—			14
	Woori Service Networks Co., Ltd.	Other income		7			7
		Interest expenses		4			7
		Fees expenses		125			179
		Other expenses		126			124
	Korea Credit Bureau Co., Ltd.	Interest expenses		16			17
		Fees expenses		519			12
	Korea Finance Security Co., Ltd.	Interest expenses		3			3
		Fees expenses		34			—
	Chin Hung International Inc.	Interest income		—			53
		Fees income		1			1
		Interest expenses		8			6
		Impairment losses due to credit loss (reversal of allowance for credit loss)		13			(4,029	)
	STX Engine Co., Ltd.	Interest income		333			332
		Fees income		15			84
		Interest expenses		41			35
		Impairment losses due to credit loss (reversal of allowance for credit loss)		1,133			(3,821	)

			For the three months ended March 31
Related party		A title of account	2018			2017
	Samho International Co., Ltd. (*3)	Interest income		—			180
		Fees income		—			5
		Interest expenses		—			111
		Reversal of allowance for credit loss		—			(168	)
	STX Corporation	Interest income		—			218
		Fees income		1			34
		Interest expenses		1			2
		Impairment losses due to credit loss (reversal of allowance for credit loss)		13,351			(63,426	)
Associates	K BANK Co., Ltd	Fees income		208			199
		Other income		—			1,051
		Impairment losses due to credit loss		—			9
	Well to Sea No.3 Private Equity Fund (*4)	Interest incomes		685			—
		Interest expenses		2			—
		Impairment losses due to credit loss (reversal of allowance for credit loss)		(10	)		—
	Others (*5)	Other income		1
		Interest expenses		6			3
		Impairment losses due to credit loss (reversal of allowance for credit loss)		(167	)		774

(*1) As its ownership interest in the Group is lower than 20% as of December 31, 2017, it has been exclude from the corporation that have significant influence over the Group.

(*2) Due to disposition previous year, the entity is not in scope for associate.

(*3) The entity was sold after it was transferred to assets held for sale and was excluded from the investment in associates during the year ended December 31, 2017

(*4) Due to capital contribution during the year ended December 31, 2017, the entity has been included in the investment in associates.

(*5) Others include Saman Corporation, Kyesan Engineering Co., Ltd., Hyunwoo International Co., Ltd., DAEA SNC Co., Ltd. and others as of March 31, 2018. Others include Kyesan Engineering Co., Ltd., Good Software Lab Co., Ltd., Dongwoo C&C Co., Ltd., Saman Corporation, DAEA SNC Co., Ltd., and Hyunwoo International Co., Ltd. and others as of March 31, 2017.

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

	March 31, 2018		December 31, 2017		Warranty
Kumho Tires Co., Inc.		9,554		4,181	Letter of credit and others
	538		636		Loan commitment
Korea Finance Security Co., Ltd.		227		204	Loan commitment
Korea Credit Bureau Co., Ltd.		31		29	Loan commitment
Woori Service Networks Co., Ltd.		165		155	Loan commitment
Chin Hung International Inc.		32,081		31,891	Loan commitment
STX Engine Co., Ltd.		68,842		68,858	Letter of credit and others
	238		—		Loan commitment
STX corporation		10,541		17,557	Letter of credit and others
	111		53		Loan commitment
Well to Sea No.3 Private Equity Fund		304,160		236,190	Loan commitment

For the guarantee provided to the related parties, the Group recognized provisions for guarantees amounting to 75,110 million Won and 71,459 million Won, as of March 31, 2018 and December 31, 2017, respectively.

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

	For the three months ended March 31
	2018		2017
Short term benefits		3,130		2,877
Severance payments		209		163
Total		3,339		3,040

Key management includes registered executives and non-registered executives. Outstanding assets and liabilities from transactions with key management amount to 2,274 million Won and 6,857 million Won, respectively, as of March 31, 2018. With respect to the assets, the Group has not recognized any 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
	March 31, 2018		December 31, 2017		For the three months ended March 31, 2018		For the three months ended March 31, 2017
Trust accounts		49,657,336		43,895,511		284,292		203,016

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

	March 31, 2018		December 31, 2017
Receivables
Trust fees receivables		25,620		25,286
Payables
Deposits due to customers		589,782		585,832
Borrowings from trust accounts		2,644,524		2,711,529
Total		3,234,306		3,297,361

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

	For the three months ended March 31
	2018		2017
Revenue
Trust fees		50,717		34,735
Termination fees		4,199		36
Total		54,916		34,771
Expense
Interest expenses on deposits due to customers		1,982		7,143
Interest expenses on borrowings from trust accounts		10,067		8,117
Total		12,049		15,260

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

1) As of March 31, 2018 and December 31, 2017, the carrying of principal guaranteed trusts and principal and fixed rate of return guaranteed trusts are as follows (Unit: Korean Won in millions):

	March 31, 2018		December 31, 2017
Principal guaranteed trusts
Old-age pension trusts		3,868		4,058
Personal pension trusts		523,231		530,556
Pension trusts		797,776		791,920
Retirement trusts		48,642		50,035
New personal pension trusts		8,412		8,563
New old-age pension trusts		2,374		2,467
Subtotal		1,384,303		1,387,599
Principal and fixed rate of return guaranteed trusts
Development trusts		19		19
Unspecified money trusts		801		801
Subtotal		820		820
Total		1,385,123		1,388,419

2) As of March 31, 2018 and December 31, 2017, 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):

	March 31, 2018		December 31, 2017
Liabilities for the account (subsidy for trust account adjustment)		7		32