The Group’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial performance. The Group uses derivative financial instruments to hedge certain risk exposures such as cash flow risk.

The Group’s financial policy is set up in the long-term perspective and annually reported to the Board of Directors. The financial risk management is carried out by the Group's Value Management Office, which identifies, evaluates and hedges financial risks. The treasury department in the Value Management Office considers various finance market conditions to estimate the effect from the market changes.

The Group’s market risk management focuses on controlling the extent of exposure to the risk in order to minimize revenue volatility. Market risk is a risk that decreases value or profit of the Group’s portfolio due to changes in market interest rate, foreign exchange rate and other factors.

Sensitivity analysis is performed for each type of market risk to which the Group is exposed. Reasonably possible changes in the relevant risk variable such as prevailing market interest rates, currency rates, equity prices or commodity prices are estimated and if the rate of change in the underlying risk variable is stable, the Group does not alter the chosen reasonably possible change in the risk variable. The reasonably possible change does not include remote or ‘worst case’ scenarios or ‘stress tests’.

The Group is exposed to foreign exchange risk arising from operating, investing and financing activities. Foreign exchange risk is managed within the range of the possible effect on the Group’s cash flows. Foreign exchange risk (i.e. foreign currency translation of overseas operating assets and liabilities) unaffecting the Group’s cash flows is not hedged but can be hedged at a particular situation.

As of December 31, 2023, 2024 and 2025, if the foreign exchange rate had strengthened/weakened by 10% with all other variables held constant, the effects on profit before income tax and shareholders’ equity would have been as follows:


(in millions of Korean won)	Fluctuation of foreign exchange rate		Impact on profit before income tax1		Impact on equity
2023.12.31	10	%	₩	(10,313)	₩	(18,460)
	-10	%	10,313		18,460
2024.12.31	10	%	₩	(6,452)	₩	(15,351)
	-10	%	6,452		15,351
2025.12.31	10	%	₩	(9,165)	₩	(9,089)
	-10	%	9,165		9,089

1Computed with considering derivatives hedging effect applied by the Group to hedge foreign exchange risk of liabilities in foreign currencies.

The above analysis is a simple sensitivity analysis which assumes that all the variables other than foreign exchange rates are held constant. Therefore, the analysis does not reflect any correlation between foreign exchange rates and other variables, nor the management’s decision to decrease the risk.


(In thousands of foreign currencies)	2023		2024		2025
	Financial assets	Financial liabilities	Financial assets	Financial liabilities	Financial assets	Financial liabilities
USD	139,807	2,271,673	139,459	2,346,061	154,802	2,194,753
SDR1	254	722	254	721	255	721
JPY	17,496	400,002	10,032	7	5,372	30,005,442
EUR	304	7,810	156	7,814	37	30
RWF2	402	—	—	—	—	—
THB3	244	—	8,764	—	8,755	—
TZS4	21,958	—	21,868	—	20	—
BWP5	680	—	664	—	659	—
VND6	380,629	—	222,914	—	231,830	—
SGD7	1,375	—	8,339	7	8,339	—
TWD8	1,685	—	—	—	—	—
CHF9	—	25	—	33	—	1
KGS10	—	—	—	—	2,457	—
UZS11	—	—	—	—	8,346	—
PKR12	114,025	—	13,732	—	21,050	—

As of December 31, 2023, 2024 and 2025, the Group is exposed to equity securities price risk because the securities held by the Group are traded in active markets. If the market prices had increased/


(in millions of Korean won)	Fluctuation of price	Impact on profit before income tax		Impact on equity
2023.12.31	10%	₩	1,473	₩	121,423
	-10%	(1,473)		(121,423)
2024.12.31	10%	₩	519	₩	129,404
	-10%	(519)		(129,404)
2025.12.31	10%	₩	303	₩	195,275
	-10%	(303)		(195,275)

The analysis above is based on the assumption that the equity index had increased/decreased by 10% with all other variables held constant and all the Group’s marketable equity instruments had moved according to the historical correlation with the index. Gain or loss on equity securities classified as financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income can increase or decrease equity.

The Group’s interest rate risk arises from liabilities in foreign currency such as foreign currency debentures. Debentures in foreign currency issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by swap transactions. Debentures and borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group sets the policy and operates to minimize the uncertainty of the changes in interest rates and financial costs.

As of December 31, 2023, 2024 and 2025, if the market interest rate had increased/decreased by 100 bp with other variables held constant, the effects on profit before income tax and shareholders’ equity would be as follows:


(in millions of Korean won)	Fluctuation of interest rate	Impact on profit before income tax		Impact on equity
2023.12.31	+100 bp	₩	(2,693)	₩	(4,718)
	-100 bp	2,696		5,037
2024.12.31	+100 bp	₩	(1,658)	₩	(11,903)
	-100 bp	1,665		12,337
2025.12.31	+100 bp	₩	(7,046)	₩	(2,142)
	-100 bp	7,047		2,391

The above analysis is a simple sensitivity analysis which assumes that all the variables other than market interest rates are held constant. Therefore, the analysis does not reflect any correlation between market interest rates and other variables, nor the management’s decision to decrease the risk.

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s trade receivables from customers, debt securities and others.

Credit risk is managed on the Group basis with the purpose of minimizing financial loss. Credit risk arises from the normal transactions and investing activities, where clients or other party fails to discharge an

obligation on contract conditions. To manage credit risk, the Group considers the counterparty’s credit based on the counterparty’s financial conditions, default history and other important factors.

Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as outstanding receivables. To minimize such risk, only the financial institutions with strong credit ratings are accepted.

The Group’s investments in debt instruments are considered to be low risk investments. The credit ratings of the investments are monitored for credit deterioration.

For some trade receivables, the Group may obtain security in the form of guarantees or letters of credit, etc. which can be called upon if the counterparty is in default under the terms of the agreement.

The maximum exposure to credit risk of the Group’s financial instruments without considering value of collaterals as of December 31, 2024 and 2025, are as follows:


(in millions of Korean won)	December 31, 2024		December 31, 2025
Cash and cash equivalents (except for cash on hand)	₩	3,711,936	₩	3,501,068
Trade and other receivables
Financial assets at amortized costs	7,573,409		7,806,644
Financial assets at fair value through other comprehensive income	114,774		107,644
Contract assets	800,806		1,026,260
Other financial assets
Derivatives financial assets for hedging	445,471		315,537
Financial assets at fair value through profit or loss	971,805		723,978
Financial assets at fair value through other comprehensive income	6,157		6,147
Financial assets at amortized costs	962,653		1,476,527
Total	₩	14,587,011	₩	14,963,805

The Group is exposed to credit risk for financial guarantee contracts. As of December 31, 2025, the Group’s maximum exposure amount is ₩428 million (December 31, 2024: ₩108,881 million).

The Group applies the simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets.

The Group measures the expected credit loss by considering the future unrecoverable rate of the remaining balance of trade receivables and other receivables at the end of the reporting period. Each trade receivables and other receivables are classified considering the credit risk characteristics and

overdue periods in order to measure expected credit loss. The expected credit loss rate calculation is based on historical payment and credit loss information in relation to revenue for 36 months period up to December 31, 2025. Meanwhile, the credit sales assets of BC Card Co., Ltd., a subsidiary, were judged to have low credit risk, so the expected 12-month credit loss was applied.

The expected credit losses reflect forward-looking information. Provision for impairment as of December 31, 2024 and 2025, are as follows:


	December 31, 2024
(in millions of Korean won)	Less than 6 months			7-12 months			More than 1 years			Total
Expected credit loss rate	6.08		%	32.37		%	60.55		%
Total carrying amounts	₩	3,086,024		₩	59,092		₩	285,454		₩	3,430,570
Provision for impairment	₩	(187,649)		₩	(19,128)		₩	(172,849)		₩	(379,626)


	December 31, 2025
(in millions of Korean won)	Less than 6 months			7-12 months			More than 1 years			Total
Expected credit loss rate	6.49		%	31.77		%	59.34		%
Total carrying amounts	₩	3,196,965		₩	67,830		₩	266,233		₩	3,531,028
Provision for impairment	₩	(207,487)		₩	(21,551)		₩	(157,991)		₩	(387,029)


(in millions of Korean won)	2024		2025
Beginning balance	₩	331,290	₩	379,626
Provision	95,060		71,654
Written-off	(54,528)		(72,740)
Others	7,804		8,489
Ending balance	₩	379,626	₩	387,029

As of December 31, 2025, the maximum exposure of the trade receivables carrying amount to credit risk is ₩3,143,999 million (December 31, 2024: ₩3,050,944 million).

The Group is also exposed to credit risk in relation cash equivalents. The maximum exposure at the end of the reporting period is the carrying amount of these investments.

Other financial assets at amortized cost include time deposits, other long-term financial instruments and others. All of the financial assets at amortized costs are considered to have low credit risk, and the loss allowance recognized during the period was, therefore, limited to 12 months expected losses.

Management considers ‘low credit risk’ for other instruments when they have a low risk of default and the issuer has a strong capacity to meet its contractual cash flow obligations in the near term.

Details of changes in provisions for impairment of other financial assets at amortized costs for the years ended December 31, 2024 and 2025, are as follows:


(in millions of Korean won)	2024		2025
Beginning balance	₩	183,636	₩	204,594
Provision	82,123		63,886
Written-off	(105,169)		(101,721)
Reversal	(380)		(144)
Others	44,384		24,402
Ending balance	₩	204,594	₩	191,017

All of the debt investments at fair value through other comprehensive income are considered to have low credit risk, and the loss allowance recognized during the period was, therefore, limited to 12 months expected losses. Managements consider ‘low credit risk’ for other instruments when they have a low risk of default and the issuer has a strong capacity to meet its contractual cash flow obligations in the near term. The maximum exposure at the end of the reporting period is the carrying amount of these investments.

The Group is also exposed to credit risk in relation to financial assets that are measured at fair value through profit or loss. The maximum exposure at the end of the reporting period is the carrying amount of these investments.

The Group manages its liquidity risk by liquidity strategy and plans. The Group considers the maturity of financial assets and financial liabilities and the estimated cash flows from operations.

The table below analyzes the Group’s liabilities (including interest expenses) into relevant maturity groups based on the remaining period at the date of the end of each reporting period to the contractual maturity date. These amounts are contractual undiscounted cash flows and can differ from the amount in the consolidated financial statements.


	December 31, 2024
(in millions of Korean won)	Less than 1 year		1-5 years		More than 5 years		Total
Trade and other payables	₩	7,509,703	₩	728,268	₩	22,209	₩	8,260,180
Borrowings (including debentures)	4,206,534		5,485,468		1,669,798		11,361,800
Lease liabilities	360,361		674,594		142,857		1,177,812
Other non-derivative financial liabilities	391,039		756,024		15,280		1,162,343
Financial guarantee contracts1	108,881		—		—		108,881
Total	₩	12,576,518	₩	7,644,354	₩	1,850,144	₩	22,071,016

1Total amount guaranteed by the Group according to guarantee contracts. Cash flow from financial guarantee contracts is classified as the maturity group in the earliest period when the financial guarantee contracts can be executed.


	December 31, 2025
(in millions of Korean won)	Less than 1 year		1-5 years		More than 5 years		Total
Trade and other payables	₩	6,856,284	₩	217,312	₩	40,641	₩	7,114,237
Borrowings (including debentures)	2,724,673		7,247,769		1,690,565		11,663,007
Lease liabilities	375,148		669,176		586,866		1,631,190
Other non-derivative financial liabilities	480,408		687,217		18,453		1,186,078
Financial guarantee contracts1	428		—		—		428
Total	₩	10,436,941	₩	8,821,474	₩	2,336,525	₩	21,594,940

At the end of the reporting period, the cash outflows and inflows by maturity of the Group’s derivatives held for trading and gross-settled derivatives are as follows:


	December 31, 2023
(in millions of Korean won)	Less than 1 year		1-5 years		More than 5 years		Total
Derivatives held for trading1
Outflows	₩	—	₩	133,293	₩	—	₩	133,293
Inflows	—		—		1,015		1,015
Derivatives settled gross2
Outflows	₩	741,140	₩	1,227,166	₩	8,126	₩	1,976,432
Inflows	614,066		2,198,958		36,344		2,849,368

December 31, 2024

(in millions of Korean won)

Less than 1 year

1-5 years

More than
5 years

Total

Derivatives held for trading1

Outflows

₩

—

₩

131,630

₩

—

₩

131,630

Derivatives settled gross2

Outflows

₩

1,326,759

₩

1,570,621

₩

26,283

₩

2,923,663

Inflows

₩

1,550,061

₩

1,900,720

₩

39,001

₩

3,489,782

December 31, 2025

(in millions of Korean won)

Less than 1 year

1-5 years

More than
5 years

Total

Derivatives held for trading1

Outflows

₩

105,378

₩

—

₩

—

₩

105,378

Derivatives settled gross2

Outflows

₩

1,760,881

₩

3,052,446

₩

25,036

₩

4,838,363

Inflows

768,044

2,580,543

36,471

3,385,058

1During the year ended December 31, 2025, derivative liabilities held-for-trading are classified under the ‘more than one year to less than five years’ category as they are relevant to the fair value of derivatives liabilities related to shareholder-to-share contracts (Note 20).

As these derivatives held-for-trading are managed based on net fair value, their contractual maturities are not necessarily taking into consideration to understand the timing of cash flows.

2Cash outflow and inflow of gross-settled derivatives are undiscounted contractual cash flow and may differ from the amount in the consolidated statement of financial position.

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other shareholders and to maintain an optimal capital structure to reduce the cost of capital.

The Group’s capital structure consists of liabilities including borrowings, cash and cash equivalents, and shareholders’ equity. The treasury department monitors the Group’s capital structure and considers cost of capital and risks related each capital component.


(in millions of Korean won)	December 31, 2024			December 31, 2025
Total liabilities	₩	24,035,197		₩	23,633,307
Total equity	17,967,561			19,416,811
Debt-to-equity ratio	134		%	122		%

The Group manages capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is calculated as ‘equity’ in the statement of financial position plus net debt.


(in millions of Korean won, %)	December 31, 2024			December 31, 2025
Total borrowings	₩	10,520,690		₩	10,785,572
Less: cash and cash equivalents	(3,716,680)			(3,506,971)
Net debt	6,804,010			7,278,601
Total equity	17,967,561			19,416,811
Total capital	24,771,571			26,695,412
Gearing ratio	27		%	27		%

1) Details of the Group’s recognized financial assets subject to enforceable master netting arrangements or similar agreements are as follows:


(in millions of Korean won)	December 31, 2024
	Gross assets		Gross liabilities offset		Net amounts presented in the statement of financial position		Amounts not offset				Net amount
							Financial instruments		Cash collateral
Trade receivables	₩	71,680	₩	(20,588)	₩	51,092	₩	(42,998)	₩	—	₩	8,094
Other financial assets	148		(147)		1		(1)		—		—
Total	₩	71,828	₩	(20,735)	₩	51,093	₩	(42,999)	₩	—	₩	8,094


(in millions of Korean won)	December 31, 2025
	Gross assets		Gross liabilities offset		Net amounts presented in the statement of financial position		Amounts not offset				Net amount
							Financial instruments		Cash collateral
Trade receivables	₩	51,159	₩	—	₩	51,159	₩	(49,930)	₩	—	₩	1,229
Other financial assets	513		(511)		2		(2)		—		—
Total	₩	51,672	₩	(511)	₩	51,161	₩	(49,932)	₩	—	₩	1,229

2) Details of the Group’s financial liabilities recognized, subject to enforceable master netting arrangements or similar agreements, as of December 31, 2024 and 2025, are as follows


(in millions of Korean won)	December 31, 2024
	Gross liabilities		Gross assets offset		Net amounts presented in the statement of financial position		Amounts not offset				Net amount
							Financial instruments		Cash collateral
Trade payables	₩	40,732	₩	(147)	₩	40,585	₩	(39,306)	₩	—	₩	1,279
Other payables	24,281		(20,588)		3,693		(3,693)		—		—
Total	₩	65,013	₩	(20,735)	₩	44,278	₩	(42,999)	₩	—	₩	1,279


(in millions of Korean won)	December 31, 2025
	Gross liabilities		Gross assets offset		Net amounts presented in the statement of financial position		Amounts not offset				Net amount
							Financial instruments		Cash collateral
Trade payables	₩	53,216	₩	(511)	₩	52,705	₩	(49,930)	₩	—	₩	2,775
Other payables	2		—		2		(2)		—		—
Total	₩	53,218	₩	(511)	₩	52,707	₩	(49,932)	₩	—	₩	2,775