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Published: 2023-03-07 12:37:31 ET

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EX-99.1 2 d473977dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED

DECEMBER 31, 2022 AND 2021

WOORI FINANCIAL GROUP INC.


		Page(s)

Independent Auditor’s Report		1-5

Consolidated Financial Statements

Consolidated Statements of Financial Position		7

Consolidated Statements of Comprehensive Income		8-9

Consolidated Statements of Changes in Equity		10

Consolidated Statements of Cash Flows		11-12

Notes to the Consolidated Financial Statements		13-195

LOGO

Independent Auditor’s Report

(English Translation of a Report Originally Issued in Korean)

To the Board of Directors and Shareholders of Woori Financial Group Inc.

Opinion

We have audited the accompanying consolidated financial statements of Woori Financial Group Inc. and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated statements of financial position as at December 31, 2022 and 2021, and the consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS).

Basis for Opinion

We conducted our audits in accordance with Korean Standards on Auditing. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements of the Republic of Korea that are relevant to our audit of the consolidated financial statements and we have fulfilled our other ethical responsibilities in accordance with the ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Key Audit Matter

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Expected Credit Losses on Loans Measured at Amortized Cost

Why it is determined to be a key audit matter:

The impairment guidance under Korean IFRS 1109 Financial Instruments requires determination of significant increases in credit risk and measurement of expected credit losses using forward-looking information and others. Accordingly, the Group developed a measurement model that encompasses probability of default, loss given default and forward looking information utilizing various types of information, which requires a higher level of management’s interpretation and judgment.

Samil PricewaterhouseCoopers, 100 Hangang-daero, Yongsan-gu, Seoul 04386, Korea, www.samil.com

The Group measures expected credit losses on loans measured at amortized cost based on both individual and collective assessments. Individual assessment of expected credit losses is performed based on estimation of future forecast cash flow with a relatively high degree of management’s estimation and judgment, and collective assessment of expected credit losses involves a variety of complex variables and assumptions that require management’s estimation and judgment. Due to these facts, expected credit losses of loans measured at amortized costs are determined as a key audit matter.

As described in Note 10, loans measured at amortized cost subject to individual or collective assessments amount to 346,252,713 million won, with allowances for credit losses of 2,334,153 million won as of December 31, 2022. Significantly affected subsidiary is Woori Bank.

How our audit addressed the key audit matter:

(1) Assessment of expected credit losses on an individual basis

We obtained an understanding and evaluated the processes and controls relating to the assessment of expected credit losses on an individual basis. In particular, we focused our effort on the assumptions used in estimating future cash flows. We evaluated whether management’s estimation was reasonable and we assessed the key assumptions in the cash flow projection including growth rate of entities subject to individual assessment and collateral valuation. As part of these procedures, we assessed whether sales growth rate, operating income ratio, and assumptions on investment activities were consistent with historical operating performance and current market conditions. Additionally, we assessed the appropriateness of collateral valuation by conducting our own research on recent property prices and engaged independent appraisal specialists in assessing reasonableness of appraisal reports, models and methodologies used by management.

(2) Assessment of expected credit losses on a collective basis

We obtained an understanding and evaluated the processes and controls relating to management’s calculation of expected credit losses on a collective basis in accordance with impairment requirements under Korean IFRS 1109 Financial Instruments. As explained in Note 2, management assessed credit ratings to recognize lifetime expected credit losses on loans with significant increase in credit risk and impaired loans. Other than these cases, management recognized 12-months of expected credit losses. To calculate expected credit losses, management applied forward-looking information, probability of default and loss given default, etc., estimated through its internal procedures and controls implemented for various assumptions.

We assessed the design and operating effectiveness of controls relating to credit ratings that reasonably reflected both qualitative and quantitative information. Our testing over the accuracy and reliability of the information included agreeing qualitative and quantitative information with relevant evidence.

We reviewed the appropriateness of management policies and procedures to determine significant increases in credit risk, and tested reasonableness of expected credit loss model applied by each of the three stages(Stage 1, 2 and 3) depending on how significantly credit risk was increased.

- 2 -

We used risk specialists to test the appropriateness of management’s methodologies of reflecting forward-looking information in the estimation of expected credit loss by adjusting the probability of default and loss given default after statistically analyzing the correlation between forward-looking information and probability of default or loss given default. Moreover, we tested the reasonableness and mathematical accuracy of the result through recalculation and examination of supporting data.

We reviewed the methodologies used by management to verify that probability of default and loss given default were calibrated using sufficient and reasonable historical data. We determined that the default and loss data used were appropriately gathered and applied in accordance with internal control procedures. In addition, we tested reasonableness and accuracy of probability of default and loss given default through procedures including recalculation, and tested management’s default and loss data by agreeing them with relevant evidence.

Furthermore, we tested reasonableness of stage allocation of loans subject to COVID-19 payment relief attributable to significant increase in credit risk. We also tested key assumptions used in calculation of probability of default and required disclosures. We verified accuracy and completeness of aggregation of loans subject to the deferral, and accuracy of calculation of loss allowances.

Other Matter

Auditing standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to audit such consolidated financial statements may differ from those generally accepted and applied in other countries.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Korean IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

- 3 -

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Korean Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Korean Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

•

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

•

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

•

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

•

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

•

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

•

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

- 4 -

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor’s report is Sung-jae Lim, Certified Public Accountant.

/s/ Samil PricewaterhouseCoopers

Seoul, Korea

March 7, 2023

This report is effective as of March 7, 2023, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that there is a possibility that the above audit report may a to be revised to reflect the impact of such subsequent events or circumstances, if any.

- 5 -

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED

DECEMBER 31, 2022 AND 2021

The accompanying consolidated financial statements including all footnote disclosures were

prepared by, and are the responsibility of, the management of Woori Financial Group Inc.

Tae Seung Son

President and Chief Executive Officer

Main Office Address: (Address) 51, Sogong-ro, Jung-gu, Seoul

(Phone Number) 02-2125-2000

- 6 -

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF DECEMBER 31, 2022 AND 2021


	December 31, 2022			December 31, 2021

	(Korean Won in millions)
ASSETS
Cash and cash equivalents (Note 2 and 6)		34,219,148			20,613,073
Financial assets at fair value through profit or loss (“FVTPL”) (Notes 4, 7, 11, 12, 18 and 26)		19,860,573			13,497,234
Financial assets at fair value through other comprehensive income (“FVTOCI”) (Notes 4, 8, 11, 12, and 18)		33,085,080			39,119,789
Securities at amortized cost (Notes 4, 9, 11, 12 and 18)		28,268,516			17,086,274
Loans and other financial assets at amortized cost (Notes 4, 10, 11, 12, 18 and 41)		355,760,729			348,885,617
Investments in joint ventures and associates (Note 13)		1,305,636			1,335,167
Investment properties (Notes 14 and 18)		387,707			389,495
Premises and equipment (Notes 15 and 18)		3,142,930			3,174,720
Intangible assets (Note 16)		849,114			785,386
Assets held for sale (Note 17)		13,772			26,327
Net defined benefit asset (Note 24)		319,280			21,346
Current tax assets (Note 38)		53,274			22,598
Deferred tax assets (Note 38)		109,299			31,131
Derivative assets (Designated for hedging) (Notes 4,11,12 and 26)		37,786			106,764
Other assets (Notes 19 and 41)		3,061,552			2,088,950

Total assets		480,474,396			447,183,871


LIABILITIES
Financial liabilities at fair value through profit or loss (“FVTPL”) (Notes 4, 11, 12, 20 and 26)		8,952,399			4,873,458
Deposits due to customers (Notes 4,11,21 and 41)		342,105,209			317,899,871
Borrowings (Notes 4, 6, 11, 12 and 22)		28,429,603			24,755,459
Debentures (Notes 4, 6, 11 and 22)		44,198,486			44,653,864
Provisions (Notes 23, 40 and 41)		545,865			576,134
Net defined benefit liability (Note 24)		35,202			47,986
Current tax liabilities (Note 38)		843,555			584,491
Deferred tax liabilities (Note 38)		31,799			186,946
Derivative liabilities (Designated for hedging) (Notes 4,11,12 and 26)		202,911			27,584
Other financial liabilities (Notes 4, 6, 11, 12, 25 and 41)		22,811,868			24,171,030
Other liabilities (Notes 6, 25 and 41)		690,157			556,853

Total liabilities		448,847,054			418,333,676


EQUITY
Owners’ equity (Note 28)
Capital stock		3,640,303			3,640,303
Hybrid securities		3,112,449			2,294,381
Capital surplus		682,385			682,385
Other equity		(2,423,392	)		(2,167,614	)
Retained earnings		23,750,152			21,392,564

		28,761,897			25,842,019

Non-controlling interests		2,865,445			3,008,176

Total equity		31,627,342			28,850,195

Total liabilities and equity		480,474,396			447,183,871

The accompanying notes are part of this consolidated financial statements.

- 7 -

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021


	2022			2021

	(Korean Won in millions)
Interest income		14,654,549			9,894,749
Financial assets at FVTPL		106,698			45,803
Financial assets at FVTOCI		632,615			381,814
Financial assets at amortized cost		13,915,236			9,467,132
Interest expense		(5,957,970	)		(2,909,028	)

Net interest income (Notes 11, 30 and 41)		8,696,579			6,985,721

Fees and commissions income		2,499,700			2,171,705
Fees and commissions expense		(789,530	)		(700,930	)

Net fees and commissions income (Notes 11, 31 and 41)		1,710,170			1,470,775

Dividend income (Notes 11, 32 and 41)		159,982			309,211
Net gain on financial instruments at FVTPL (Notes 11, 33 and 41)		238,502			325,751
Net gain(loss) on financial assets at FVTOCI (Notes 11 and 34)		(21,498	)		32,624
Net gain arising on financial assets at amortized cost (Note 11)		74,204			107,317
Impairment losses due to credit loss (Notes 35 and 41)		(885,272	)		(536,838	)
General and administrative expense (Notes 36 and 41)		(4,529,890	)		(4,147,411	)
Other net operating expense (Notes 11, 26, 36 and 41)		(1,012,253	)		(887,401	)

Operating income		4,430,524			3,659,749
Share of gain of joint ventures and associates (Note 13)		69,996			62,196
Other non-operating expense		(15,146	)		27,296

Non-operating expense (Note 37)		54,850			89,492

Net income before income tax expense		4,485,374			3,749,241

Income tax expense (Note 38)		(1,161,392	)		(941,870	)

Net income		3,323,982			2,807,371

Net gain(loss) on valuation of equity securities at FVTOCI		(30,146	)		34,069
Changes in capital due to equity method		(4,527	)		(2,607	)
Remeasurement gain(loss) related to defined benefit plan		251,440			65,067

Items that will not be reclassified to profit or loss:		216,767			96,529


Net gain(loss) on valuation of debt securities at FVTOCI		(463,725	)		(184,396	)
Changes in capital due to equity method		5,139			4,133
Net gain(loss) on foreign currency translation of foreign operations		32,536			246,808
Net gain(loss) on valuation of hedges of net investments in foreign operations		(20,701	)		—
Net gain(loss) on valuation of cash flow hedge		(9,835	)		7,107

Items that may be reclassified to profit or loss:		(456,586	)		73,652

Other comprehensive income (loss), net of tax		(239,819	)		170,181

Total comprehensive income		3,084,163			2,977,552

(Continued)

- 8 -

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021


	2022		2021

	(Korean Won in millions)
Net income attributable to:		3,323,982		2,807,371
Net income attributable to owners		3,141,680		2,587,936
Net income attributable to non-controlling interests		182,302		219,435

Total comprehensive income attributable to:		3,084,163		2,977,552
Comprehensive income attributable to owners		2,909,053		2,745,764
Comprehensive income attributable to non-controlling interests		175,110		231,788

Earnings per share (Note 39)
Basic and diluted earnings per share (Unit: In Korean Won)		4,191		3,481

The accompanying notes are part of this consolidated financial statements.

- 9 -

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021


	Capital Stock		Hybrid securities		Capital surplus		Other equity			Retained earnings			Owners’ equity in total			Non- controlling interests			Total equity

	(Korean Won in millions)
January 1, 2021		3,611,338		1,895,366		626,111		(2,347,472	)		19,268,265			23,053,608			3,672,237			26,725,845
Total comprehensive income
Net income		—		—		—		—			2,587,936			2,587,936			219,435			2,807,371
Net gain(loss) on valuation of financial instruments at FVTOCI		—		—		—		(150,470	)		—			(150,470	)		143			(150,327	)
Net gain(loss) due to disposal of equity securities at FVTOCI		—		—		—		(2,220	)		2,220			—			—			—
Changes in capital due to equity method		—		—		—		2,472			(946	)		1,526			—			1,526
Gain on foreign currency translation of foreign operations		—		—		—		234,583			—			234,583			12,225			246,808
Gain on valuation of cash flow hedge		—		—		—		6,938			—			6,938			169			7,107
Capital related to non-current assets held for sale		—		—		—		(947	)		947			—			—			—
Remeasurement gain related to defined benefit plan		—		—		—		65,251			—			65,251			(184	)		65,067
Transactions with owners
Comprehensive stock exchange		28,965		—		35,197		—			—			64,162			—			64,162
Dividends to common stocks		—		—		—		—			(368,357	)		(368,357	)		(9,391	)		(377,748	)
Acquisition of treasury stocks		—		—		—		(3,819	)		—			(3,819	)		—			(3,819	)
Issuance of hybrid securities		—		399,015		—		—			—			399,015			—			399,015
Dividends to hybrid securities		—		—		—		—			(66,250	)		(66,250	)		(144,923	)		(211,173	)
Redemption of hybrid securities		—		—		—		(27,365	)		—			(27,365	)		(549,904	)		(577,269	)
Changes in subsidiaries’ capital		—		—		9,382		32,445			(31,251	)		10,576			(11,296	)		(720	)
Others		—		—		11,695		22,990			—			34,685			(180,335	)		(145,650	)

December 31, 2021		3,640,303		2,294,381		682,385		(2,167,614	)		21,392,564			25,842,019			3,008,176			28,850,195

January 1, 2022		3,640,303		2,294,381		682,385		(2,167,614	)		21,392,564			25,842,019			3,008,176			28,850,195
Total comprehensive income
Net income		—		—		—		—			3,141,680			3,141,680			182,302			3,323,982
Net loss on valuation of financial instruments at FVTOCI		—		—		—		(493,462	)		—			(493,462	)		(409	)		(493,871	)
Net gain(loss) due to disposal of equity securities at FVTOCI		—		—		—		10,254			(10,254	)		—			—			—
Changes in capital due to equity method		—		—		—		612			—			612			—			612
Gain(loss) on foreign currency translation of foreign operations		—		—		—		39,579			—			39,579			(7,043	)		32,536
Loss on valuation of hedges of net investments in foreign operations		—		—		—		(20,701	)		—			(20,701	)		—			(20,701	)
Loss on valuation of cash flow hedge		—		—		—		(9,835	)		—			(9,835	)		—			(9,835	)
Capital related to non-current assets held for sale		—		—		—		(279	)		279			—			—			—
Remeasurement gain related to defined benefit plan		—		—		—		251,180			—			251,180			260			251,440
Transactions with owners
Dividends to common stocks		—		—		—		—			(654,996	)		(654,996	)		(9,949	)		(664,945	)
Issuance of hybrid securities		—		818,068		—		—			—			818,068			349,215			1,167,283
Dividends to hybrid securities		—		—		—		—			(91,756	)		(91,756	)		(113,995	)		(205,751	)
Redemption of hybrid securities		—		—		—		(60,491	)		—			(60,491	)		(559,565	)		(620,056	)
Changes in subsidiaries’ capital		—		—		—		27,365			(27,365	)		—			—			—
Changes in non-controlling interests related to business combinations		—		—		—		—			—			—			16,453			16,453

December 31, 2022		3,640,303		3,112,449		682,385		(2,423,392	)		23,750,152			28,761,897			2,865,445			31,627,342

The accompanying notes are part of this consolidated financial statements.

- 10 -

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021


	2022			2021

	(Korean Won in millions)
Cash flows from operating activities (Note 2):
Net income		3,323,982			2,807,371
Adjustments to net income:
Income tax expense		1,161,392			941,870
Interest income		(14,654,549	)		(9,894,749	)
Interest expense		5,957,970			2,909,028
Dividend income		(159,982	)		(309,211	)

		(7,695,169	)		(6,353,062	)

Additions of expenses not involving cash outflows:
Loss on financial instruments at FVTPL		815,706			16,869
Loss on financial assets at FVTOCI		23,836			15,812
Impairment loss due to credit loss		885,272			536,838
Loss on other provisions		37,493			85,690
Retirement benefit		165,063			177,303
Depreciation and amortization		929,311			791,896
Net loss on foreign currency translation		—			109,668
Loss on derivatives (designated for hedge)		250,268			93,084
Loss on fair value hedge		—			1,947
Loss on valuation of investments in joint ventures and associates		28,861			19,816
Loss on disposal of investments in joint ventures and associates		3,690			174
Loss on disposal of premises and equipment, intangible assets and other assets		3,177			3,354
Impairment loss on premises and equipment, intangible assets and other assets		260			656
Other loss		62,196			—

		3,205,133			1,853,107

Deductions of income not involving cash inflows:
Gain on financial assets at FVTOCI		2,338			48,436
Gain on other provisions		55,327			1,591
Net profit on foreign currency translation		3,180			—
Gain on derivatives (designated for hedge)		71,179			61,271
Gain on fair value hedge		257,910			106,253
Gain on valuation of investments in joint ventures and associates		98,858			82,012
Gain on disposal of investments in joint ventures and associates		599			70,834
Gain on disposal of premises and equipment, intangible assets and other assets		55,852			51,083
Reversal of impairment loss on premises and equipment, intangible assets and other assets		310			166
Other income		15,879			35,717

		561,432			457,363

Changes in operating assets and liabilities:
Financial instruments at FVTPL		(1,647,572	)		42,498
Loans and other financial assets at amortized cost		(5,986,828	)		(32,419,399	)
Other assets		(1,314,877	)		(983,680	)
Deposits due to customers		23,536,088			23,830,469
Provisions		(24,041	)		(12,278	)
Net defined benefit liability		(133,421	)		(109,778	)
Other financial liabilities		(2,514,238	)		9,456,310
Other liabilities		83,559			67,802

		11,998,670			(128,056	)

Interest income received		14,189,016			9,351,055
Interest expense paid		(4,965,594	)		(3,016,841	)
Dividends received		159,993			309,071
Income tax paid		(1,030,480	)		(565,539	)

		8,352,935			6,077,746

Net cash inflow from operating activities		18,624,119			3,799,743

(Continued)

- 11 -

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (CONTINUED)


	2022			2021

	(Korean Won in millions)
Cash flows from investing activities
Cash in-flows from investing activities:
Disposal of financial instruments at FVTPL		9,502,271			10,361,751
Disposal of financial assets at FVTOCI		21,717,266			21,645,907
Redemption of securities at amortized cost		5,872,961			6,425,062
Disposal of investments in joint ventures and associates		249,763			195,758
Disposal of investment properties		2,061			—
Disposal of premises and equipment		44,839			2,890
Disposal of intangible assets		978			846
Disposal of assets held for sale		52,417			93,756
Net increase of other assets		62,386			66,305

		37,504,942			38,792,275

Cash out-flows from investing activities:
Net cash out-flows from obtaining control		378,394			1,638
Acquisition of financial instruments at FVTPL		10,274,187			11,840,524
Acquisition of financial assets at FVTOCI		16,110,501			30,522,971
Acquisition of securities at amortized cost		16,873,194			6,435,692
Acquisition of investments in joint ventures and associates		143,345			400,172
Acquisition of premises and equipment		172,876			119,255
Acquisition of intangible assets		174,749			138,882
Changes in subsidiaries		346,386			—

		44,473,632			49,459,134

Net cash outflow from investing activities		(6,968,690	)		(10,666,859	)

Cash flows from financing activities:
Cash in-flows from financing activities:
Net cash in-flows from hedging activities		54,569			6,987
Net increase in borrowings		2,881,675			3,199,712
Issuance of debentures		23,402,694			32,674,966
Net increase of other liabilities		513			3,488
Issuance of hybrid securities		1,167,283			399,016
Paid-in capital increase on non-controlling interests		—			1,623
Net increase in non-controlling equity liabilities		1,847			10,685

		27,508,581			36,296,477

Cash out-flows from financing activities:
Redemption of debentures		23,887,568			25,781,305
Redemption of lease liabilities		187,531			177,593
New stock issue cost		—			140
Acquisition of treasury stocks		—			3,757
Dividends paid		654,996			368,357
Redemption of hybrid stocks		643,000			587,650
Dividends paid to hybrid securities		205,751			211,173
Dividends paid to non-controlling interest		9,949			9,391
Changes in non-controlling interests		—			81,410

		25,588,795			27,220,776

Net cash inflow from financing activities		1,919,786			9,075,701

Effects of exchange rate changes on cash and cash equivalents		30,860			1,061,251
Net increase in cash and cash equivalents		13,606,075			3,269,836
Cash and cash equivalents, beginning of the period		20,613,073			17,343,237

Cash and cash equivalents, end of the Period (Note 6)		34,219,148			20,613,073

The accompanying notes are part of this consolidated financial statements.

- 12 -

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022 AND 2021

1.	GENERAL

(1)	Summary of the Parent company

Woori Financial Group, Inc. (hereinafter referred to the “Parent company”) is primarily aimed at controlling subsidiaries that operate in the financial industry or those that are closely related to the financial industry through the ownership of shares and was established on January 11, 2019 under the Financial Holding Company Act through the comprehensive transfer with shareholders of Woori Bank (hereinafter referred to the “Bank”), Woori FIS Co., Ltd., Woori Finance Research Institute Co., Ltd., Woori Credit Information Co., Ltd., Woori Fund Services Co., Ltd. and Woori Private Equity Asset Management Co. Ltd. The headquarters of the Parent company is located at 51, Sogong-ro, Jung-gu, Seoul, Korea, and the capital stock is 3,640,303 million won. The Parent company’s stocks were listed on the Korea Exchange on February 13, 2019, and its American Depository Shares (“ADS”) are also being traded as the underlying common stock on the New York Stock Exchange since the same date.

The details of stock transfer between the Parent company and subsidiaries as of incorporation are as follows (Unit: Number of shares)


Stock transfer company	Total number of issued shares		Exchange ratio per share		Number of Parent company’s stocks
Woori Bank		676,000,000		1.0000000		676,000,000
Woori FIS Co., Ltd.		4,900,000		0.2999708		1,469,857
Woori Finance Research Institute Co., Ltd.		600,000		0.1888165		113,289
Woori Credit Information Co., Ltd.		1,008,000		1.1037292		1,112,559
Woori Fund Service Co., Ltd.		2,000,000		0.4709031		941,806
Woori Private Equity Asset Management Co., Ltd.		6,000,000		0.0877992		526,795

As of August 1, 2019, the Parent company acquired a 73% interest in Tongyang Asset Management Co., Ltd. and changed the name to Woori Asset Management Corp. Also, as of August 1, 2019, the Parent company gained 100% control of ABL Global Asset Management Co., Ltd., added it as a consolidated subsidiary and changed the name to Woori Global Asset Management Co., Ltd. on December 6, 2019.

The Parent company paid 598,391 million won in cash and 42,103,377 new shares of the Parent company to acquire 100% interest of Woori Card Co., Ltd. from its subsidiary, Woori Bank, on September 10, 2019. On the same date, the Parent company also acquired 59.8% interest of Woori Investment Bank Co., Ltd. from Woori Bank with 392,795 million won in cash.

As of December 30, 2019, the Parent company acquired a 67.2% interest (excluding treasury stocks, 51% interest including treasury stocks) in Woori Asset Trust Co., Ltd. (formerly Kukje Asset Trust Co., Ltd.) and added it as a consolidated subsidiary at the end of 2019.

The Parent Company paid 113,238 million Won in cash to acquire 100% interest of Woori Savings Bank from its subsidiary, Woori Financial Capital Co., Ltd., on March 12, 2021.

As of August 10, 2021, the Parent company paid 5,792,866 new shares of the Parent company to the shareholders of Woori Financial Capital Co., Ltd. (excluding the Parent company) through comprehensive stock exchange and acquired residual interest (9.5%) of Woori Financial Capital Co., Ltd., to make it a wholly owned subsidiary.

As of January 7, 2022, the Parent company established Woori Financial F&I Co., Ltd., an investment company for non-performing loans and restructuring companies (100% interest, 200 billion Won in stock payments) and included it as a subsidiary

- 13 -

(2)	Details of the Parent company and subsidiaries (hereinafter ‘Group’) as of December 31, 2022 and 2021 are as follows:

Percentage of ownership
(%)

Location

Financial
statements date

of use

Subsidiaries

Main business

December 31,
2022

December 31,
2021

Held by Woori Financial Group Inc.

Woori Bank

Bank

100.0

Korea

December 31

Woori Card Co., Ltd.

Finance

100.0

Korea

December 31

Woori Financial Capital Co., Ltd.

Finance

100.0

Korea

December 31

Woori Investment Bank Co., Ltd.

Other credit finance business

58.7

Korea

December 31

Woori Asset Trust Co., Ltd.

Real estate trust

67.2

Korea

December 31

Woori Savings Bank (*7)

Mutual saving bank

100.0

Korea

December 31

Woori Asset Management Corp.

Finance

73.0

Korea

December 31

Woori Financial F&I Co., Ltd.

Finance

100.0

—

Korea

December 31

Woori Credit Information Co., Ltd.

Credit information

100.0

Korea

December 31

Woori Fund Service Co., Ltd.

Financial support service business

100.0

Korea

December 31

Woori Private Equity Asset Management Co., Ltd.

Finance

100.0

Korea

December 31

Woori Global Asset Management Co., Ltd.

Finance

100.0

Korea

December 31

Woori FIS Co., Ltd.

System software development & maintenance

100.0

Korea

December 31

Woori Finance Research Institute Co., Ltd.

Other service business

100.0

Korea

December 31

Held by Woori Bank

Woori America Bank (*1)

Finance

100.0

America

December 31

Woori Global Markets Asia Limited

Finance

100.0

Hong Kong

December 31

Woori Bank China Limited

Finance

100.0

China

December 31

AO Woori Bank (*10)

Finance

100.0

Russia

December 31

PT Bank Woori Saudara Indonesia 1906 Tbk (*1)

Finance

84.2

Indonesia

December 31

Banco Woori Bank do Brasil S.A.

Finance

100.0

Brazil

December 31

Korea BTL Infrastructure Fund

Finance

99.9

Korea

December 31

Woori Finance Myanmar Co., Ltd.

Finance

100.0

Myanmar

December 31

Wealth Development Bank

Finance

51.0

Philippines

December 31

Woori Bank Vietnam Limited

Finance

100.0

Vietnam

December 31

Woori Bank (Cambodia) PLC (*9)

Finance

100.0

Cambodia

December 31

Woori Bank Europe(*1)

Finance

100.0

Germany

December 31

Kumho Trust First Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Asiana Saigon Inc. (*2)

Asset securitization

0.0

Korea

December 31

KAMCO Value Recreation First Securitization Specialty Co., Ltd. (*2)

Asset securitization

15.0

Korea

December 31

Deogi Dream Fourth Co., Ltd. (*2)(*5)

Asset securitization

—

0.0

Korea

—

Jeonju Iwon Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Wonju I one Inc. (*2)

Asset securitization

0.0

Korea

December 31

Heitz Third Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woorihansoop 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori International First Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Wibihansoop 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori QS 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori Display 1st Co., Ltd. (*2)(*5)

Asset securitization

—

0.0

Korea

—

Tiger Eyes 2nd Co., Ltd. (*2)(*5)

Asset securitization

—

0.0

Korea

—

Woori Display 2nd Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori Dream 2nd Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori H 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori K 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori S 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori Display 3rd Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

TY 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori-HJ 3rd Co., Ltd. (*2)(*5)

Asset securitization

—

0.0

Korea

—

- 14 -

Percentage of ownership
(%)

Location

Financial
statements date

of use

Subsidiaries

Main business

December 31,
2022

December 31,
2021

Woori K 2nd Co., Ltd. (*2)(*5)

Asset securitization

—

0.0

Korea

—

Woori KC No.1 Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Quantum Jump the 2nd Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Quantum Jump the 1st Co., Ltd. (*2)(*5)

Asset securitization

—

0.0

Korea

—

Woori BK the 1st Co., Ltd. (*2)(*5)

Asset securitization

—

0.0

Korea

—

Woori-HC 1st Co., Ltd. (*2)(*5)

Asset securitization

—

0.0

Korea

—

Wivi Synergy 1st Co., Ltd. (*2)(*5)

Asset securitization

—

0.0

Korea

—

ATLANTIC TRANSPORTATION 1 S.A. (*2)

Asset securitization

0.0

Marshall islands

December 31

Woori Gongdeok First Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

HD Project Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori HW 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori HC 2nd Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori Dream 3rd Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori SJS 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori Steel 1st Co., Ltd (*2)

Asset securitization

0.0

Korea

December 31

SPG the 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori-HWC 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori HC 3rd Co., Ltd. (*2).

Asset securitization

0.0

Korea

December 31

Woori Park I 1st co., Ltd (*2)

Asset securitization

0.0

Korea

December 31

Woori DS 1st co., Ltd (*2)

Asset securitization

0.0

Korea

December 31

Woori HC 4th Co., Ltd. (*2).

Asset securitization

0.0

Korea

December 31

Woori SKR 1st Co., Ltd. (*2).

Asset securitization

0.0

Korea

December 31

Woori H chemical 1st Co.,Ltd (*2)

Asset securitization

0.0

Korea

December 31

HE the 1st Co.,Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori Hub The 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori K The 3rd Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori KF 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

WooriI TS 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori H Square 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori L Yongsan 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori HC 5th Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori Ladena 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori HR 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori Lotte Dongtan 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori HC 6th Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori ECO 1st Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Woori HO 1th Co., Ltd. (*2)

Asset securitization

0.0

—

Korea

December 31

Woori ESG 1st Co.,Ltd. (*2)

Asset securitization

0.0

—

Korea

December 31

Woori Osiria 1st Co.,Ltd. (*2)

Asset securitization

0.0

—

Korea

December 31

Woori Eco 2nd Co.,Ltd. (*2)

Asset securitization

0.0

—

Korea

December 31

Gangnam Landmark 2nd Co., Ltd (*2)

Asset securitization

0.0

—

Korea

December 31

Woori HP the 1st co.,Ltd. (*2)

Asset securitization

0.0

—

Korea

December 31

G5 Pro Short-term Bond Investment Fund 13 (*3)(*5)

Securities investment and others

—

100.0

Korea

—

Heungkuk Global Private Placement Investment Trust No. 1 (*3)

Securities investment and others

98.8

Korea

December 31

AI Partners UK Water Supply Private Placement Investment Trust No.2 (*3)

Securities investment and others

97.3

England

December 31

Multi Asset Global Real Estate Investment Trust No. 5-2 (*3)

Securities investment and others

99.0

Korea

December 31

IGIS Australia Investment Trust No. 209-1 (*3)

Securities investment and others

99.4

Korea

December 31

INMARK Spain Private Placement Real Estate Investment Trust No. 26-2 (*3)

Securities investment and others

97.7

Korea

December 31

- 15 -

Percentage of ownership
(%)

Location

Financial
statements date

of use

Subsidiaries

Main business

December 31,
2022

December 31,
2021

Woori G Japan General Type Private Real Estate Feeder Investment Trust No.1-2 (*3)

Securities investment and others

98.8

Korea

December 31

IGIS Global Private Placement Real Estate Fund No. 316-1 (*3)

Securities investment and others

99.3

Korea

December 31

Woori G Secondary Private Placement Investment Trust No. 1 (*3)

Securities investment and others

98.3

98.1

Korea

December 31

Woori G Japan Blind General Type Private Real Estate Feeder Investment Trust No.1 (*3)

Securities investment and others

99.9

99.8

Korea

December 31

JB Airline Private Placement Investment Trust No.8 (*3)

Securities investment and others

97.0

Korea

December 31

Kiwoom Harmony Private Placement Investment Trust No. 2 (*3)

Securities investment and others

97.1

Korea

December 31

Kiwoom Harmony Private Placement Investment Trust No. 1 (*3)

Securities investment and others

97.2

96.0

Korea

December 31

Kiwoom Frontier Private Investment Trust No.23[Bond] (*3)

Securities investment and others

99.8

—

Korea

December 31

Principal Guaranteed Trust (*4)

Trust

0.0

Korea

December 31

Principal and Interest Guaranteed Trust (*4)

Trust

0.0

Korea

December 31

Held by Multi Asset Global Real Estate Investment Trust No. 5-2

MAGI No.5 LuxCo S.a.r.l.

Asset securitization

54.6

Luxembourg

December 31

Held by MAGI No.5 LuxCo S.a.r.l.

ADP 16 Brussels

Asset securitization

99.9

Belgium

December 31

Held by Woori Card Co., Ltd.

TUTU Finance –WCI Myanmar Co., Ltd.

Finance

100.0

Myanmar

December 31

PT Woori Finance Indonesia Tbk.

Finance

82.0

—

Indonesia

December 31

Woori Card 2018-1 Securitization Specialty Co., Ltd. (*2)(*5)

Asset securitization

—

0.5

Korea

—

Woori Card 2019-1 Asset Securitization Specialty Co., Ltd. (*2)

Asset securitization

0.5

Korea

December 31

Woori Card 2020-1 Asset Securitization Specialty Co., Ltd. (*2)

Asset securitization

0.5

Korea

December 31

Woori Card 2021-1 Asset Securitization Specialty Co., Ltd. (*2)

Asset securitization

0.5

Korea

December 31

Woori Card 2022-1 Asset Securitization Specialty Co., Ltd. (*2)

Asset securitization

0.5

—

Korea

December 31

Woori Card 2022-2 Asset Securitization Specialty Co., Ltd. (*2)

Asset securitization

0.5

—

Korea

December 31

Woori Card 2023-1 Asset Securitization Specialty Co., Ltd. (*2)

Asset securitization

0.5

—

Korea

December 31

Held by Woori Financial Capital Co., Ltd.

ACE Auto Invest the 48th Securitization Specialty Co., Ltd. (*2)(*5)

Asset securitization

—

1.0

Korea

—

ACE Auto Invest the 49th Securitization Specialty Co., Ltd. (*2)(*5)

Asset securitization

—

1.0

Korea

—

Specified Money Market Trust

Trust

100.0

—

Korea

December 31

- 16 -

Percentage of ownership
(%)

Location

Financial
statements date
of use

Subsidiaries

Main business

December 31,
2022

December 31,
2021

Held by Woori Investment Bank Co., Ltd.

Seari First Securitization Specialty Co., Ltd. (*2)(*5)

Asset securitization

—

5.0

Korea

—

Seari Second Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

Korea

December 31

Namjong 1st Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

Korea

December 31

Bukgeum First Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

Korea

December 31

Bukgeum Second Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

Korea

December 31

WS1909 Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

Korea

December 31

WS2003 Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

Korea

December 31

WS2006 Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

Korea

December 31

WJ2008 Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

Korea

December 31

WH2103 Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

Korea

December 31

WN2103 Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

Korea

December 31

WH2106 Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

Korea

December 31

One Punch Korea the 1st Co., Ltd. (*2)(*5).

Asset securitization

—

0.0

Korea

—

One Punch blue the 1^st Co., Ltd. (*2)(*5)

Asset securitization

—

0.0

Korea

—

One Punch red the 1^st Co., Ltd. (*2)(*5)

Asset securitization

—

0.0

Korea

—

Held by Woori Asset Management Corp.

Woori China Convertible Bond Hedging feeder Investment Trust H (debt-oriented hybrid) (*3)

Securities investment and others

88.0

93.6

Korea

December 31

Woori Together TDF 2025 (*3)(*5)

Securities investment and others

—

34.1

Korea

—

Woori Together TDF 2030 (*3)(*5)

Securities investment and others

—

32.3

Korea

—

Woori Together TDF 2035 (*3)

Securities investment and others

57.1

56.0

Korea

December 31

Woori Together TDF 2040 (*3)

Securities investment and others

58.3

55.7

Korea

December 31

Woori Together TDF 2045 (*3)

Securities investment and others

69.3

65.2

Korea

December 31

Woori Together TDF 2050 (*3)

Securities investment and others

66.3

63.6

Korea

December 31

Woori Star50 Feeder Fund(H) (*3)(*5)

Securities investment and others

—

44.8

Korea

—

Woori BIG2 Plus Securities Investment Trust (Balanced Bond) (*3)(*5)

Securities investment and others

—

40.8

Korea

—

Woori Franklin Technology Master Fund (USD) (*3)(*11)

Securities investment and others

91.1

—

Korea

December 31

Woori Franklin Technology Feeder Fund (H) (*3)

Securities investment and others

71.8

—

Korea

December 31

Woori Together OCIO Target Return Master fund (*3) (*11)

Securities investment and others

100.0

—

Korea

December 31

Woori Together OCIO Target Return Feeder fund (*3)

Securities investment and others

81.2

—

Korea

December 31

Woori High Graded Bond Target Return Fund 1 (*3)

Securities investment and others

77.0

—

Korea

December 31

- 17 -

Percentage of ownership
(%)

Location

Financial
statements date
of use

Subsidiaries

Main business

December 31,
2022

December 31,
2021

Woori Multi Return Private Equity 2 (*3)

Securities investment and others

30.9

—

Korea

December 31

Held by Woori Financial F&I Co., Ltd.

WI2203 Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

—

Korea

December 31

WM2203 Asset Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

—

Korea

December 31

WNI2206 Asset Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

—

Korea

December 31

WI2209 Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

—

Korea

December 31

WN2212 Asset Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

—

Korea

December 31

WK2212 Asset Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

—

Korea

December 31

Held by Woori Financial Capital Co., Ltd., Woori Private Equity Asset Management Co., Ltd. and Woori Investment Bank Co., Ltd. (*6)

Japanese Hotel Real Estate Private Equity Fund 1 (*3)

Securities investment and others

100.0

Korea

December 31

Held by Woori Global Asset Management Co., Ltd.

Woori G Global Multi Asset Income Private Placement Investment Trust_Class Cs (*3)

Securities investment and others

37.9

Korea

December 31

Woori G Happy Retirement Lifetime Income TIF Mixed Asset Investment Trust[FoF] C(Y) (*3)

Securities investment and others

99.3

—

Korea

December 31

Held by Woori Bank, Woori Financial Capital Co., Ltd., Woori Investment Bank Co., Ltd., Woori Savings Bank and Woori Private Equity Asset Management Co., Ltd. (*6)

Woori Innovative Growth Professional Investment Type Private Investment Trust No.1 (*3)

Securities investment and others

90.0

Korea

December 31

Held by Woori Bank, Woori Financial Capital Co., Ltd., Woori Investment Bank Co., Ltd. and Woori Private Equity Asset Management Co., Ltd. (*6)

Woori Innovative Growth Professional Investment Type Private Investment Trust No.2 (*3)

Securities investment and others

85.0

Korea

December 31

Woori Innovative Growth New Deal Private Investment Trust No.3 (*3)

Securities investment and others

94.3

Korea

December 31

Held by Woori Bank, Woori Financial Capital Co., Ltd., and Woori Investment Bank Co., Ltd. (*6)

Woori G GP Commitment Loan General Type Private Investment Trust No.1 (*3)

Securities investment and others

100.0

Korea

December 31

Woori G Equity Bridge Loan General Type Private Investment Trust No.1 (*3)

Securities investment and others

80.0

Korea

December 31

- 18 -

Percentage of ownership
(%)

Location

Financial
statements date
of use

Subsidiaries

Main business

December 31,
2022

December 31,
2021

Woori G GP Commitment Loan General Type Private Investment Trust No.2 (*3)

Securities investment and others

100.0

—

Korea

December 31

Held by Woori Bank, Woori Financial Capital Co., Ltd., and Woori Global Asset Management Co., Ltd. (*6)

Woori G New Deal(Infrastructure) Policy Fund No.1 (*3)

Securities investment and others

70.0

—

Korea

December 31

Held by Woori bank and Woori Investment Bank Co., Ltd. (*6)

Heungkuk Woori Tech Company Private Placement Investment Trust No. 1 (*3)(*5)

Securities investment and others

—

100.0

Korea

—

Woori Global Development Infrastructure Synergy Company Private Placement Investment Trust No.1 (*3)

Securities investment and others

100.0

Korea

December 31

Woori G NorthAmerica Infra Private Placement Investment Trust No. 1 (*3)

Securities investment and others

100.0

Korea

December 31

Woori G Infrastructure New Deal Specialized Investment Private Equity Investment Trust No. 1 (*3)

Securities investment and others

100.0

Korea

December 31

Woori G General Type Private Real Estate Investment Trust No.2 (*3)

Securities investment and others

30.1

Korea

December 31

Woori G ESG Infrastructure Development General Type Private Investment Trust No.1 (*3)

Securities investment and others

100.0

Korea

December 31

Held by Woori bank (*6)

Woori G WooriBank Partners General Type Private Investment Trust No.1 (*3)

Securities investment and others

92.6

Korea

December 31

Woori G General Type Private Real Estate Investment Trust No.1 (*3)

Securities investment and others

80.0

Korea

December 31

Woori G Global Mid-market Secondary General Type Private Investment Trust No.1(EUR) (*3)

Securities investment and others

80.0

Korea

December 31

Woori G Woori Bank Partners Professional Type Private Investment Trust No. 2 (*3)

Securities investment and others

90.9

Korea

December 31

Woori G General Type Private Real Estate Investment Trust No.5 (*3)

Securities investment and others

86.8

87.0

Korea

December 31

Woori G Senior Loan General Type Private Investment Trust No.2(*3)

Securities investment and others

50.0

—

Korea

December 31

Woori G Government Bond MMF C/I (*3)

Securities investment and others

46.0

—

Korea

December 31

Held by Woori Bank and Woori Financial Capital Co., Ltd.(*6)

Woori G Renewable New Deal Fund No.1 (*3)

Securities investment and others

60.0

—

Korea

December 31

Woori G Equity Investment General Type Private Investment Trust No.1 (*3)

Securities investment and others

100.0

—

Korea

December 31

- 19 -

Percentage of ownership
(%)

Location

Financial
statements date
of use

Subsidiaries

Main business

December 31,
2022

December 31,
2021

Woori Busan Logistics Infra Private Placement Special Asset Investment Trust (*3)

Securities investment and others

100.0

—

Korea

December 31

Held by Woori Financial Capital Co., Ltd. (*6)

December 31

Woori G Japan Private Placement Real Estate Feeder Investment Trust No.1-1 (*3)

Securities investment and others

63.2

Korea

December 31

Held by Woori Bank, Woori Card Co., Woori Financial Capital Co., Ltd. and Woori Investment Bank Co., Ltd. (*6)

Woori FG Digital Investment Fund 1st (*3)

Securities investment and others

100.0

—

Korea

December 31

Held by Woori G Japan Private Placement Real Estate Feeder Investment Trust No.1-1 and Woori G Japan Investment Trust No. 1-2 (*6)

Woori G Japan Private Placement Real Estate Master Investment Trust No.1 (*3)

Securities investment and others

100.0

Korea

December 31

Held by Woori Financial Capital Co., Ltd. and Woori Investment Bank Co., Ltd. (*6)

Woori G Japan Private Placement Real Estate Master Investment Trust No.2-1 (*3)

Securities investment and others

100.0

Korea

December 31

Held by Woori G Japan Private Placement Real Estate Master Investment Trust No.1 and Woori G Japan Private Placement Real Estate Master Investment Trust No.2-1 (*6)

Woori G Japan Private Placement Real Estate Master Investment Trust No.2 (*3)

Securities investment and others

100.0

Korea

December 31

Held by Woori G Japan Private Placement Real Estate Master Investment Trust No.1

GK OK Chatan (*3)

Other financial services

99.9

Japan

October 31 (*8)

Held by Woori G Japan Blind General Type Private Real Estate Feeder Investment Trust No.1 (*6)

Woori G Private Placement Investment Trust No. 3 (*3)

Securities investment and others

76.5

—

Korea

December 31

Held by Woori G Private Placement Investment Trust No. 3

GK Woorido

Other financial services

100.0

—

Japan

December 31

Held by Woori G Infrastructure New Deal General Type Private Investment Trust (*6)

Woori Seoul- Chuncheon Highway Private Placement Special Asset Investment Trust No.1 (*3)

Securities investment and others

48.0

—

Korea

December 31

(*1)	Additional investment occurred made for year ended December 31, 2021.

- 20 -

(*2)

The entity is a structured entity for the purpose of asset securitization. Although the Group is not a majority shareholder, the Group 1) has the power over the investee, 2) is exposed to 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 is a structured entity for the purpose of investment in securities. Although the Group is not a majority shareholder, the Group 1) has the power over the investee, 2) is exposed to 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 ‘money trust’ under the Financial Investment Services and Capital Markets Act. Although the Group is not a majority shareholder, the Group 1) has the power over the investee, 2) is exposed to 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.

(*5)	Companies are excluded from the consolidation as of December 31, 2022.

(*6)

Determined that the Group controls the investees, considering the Group 1) has the power over the investee, 2) is exposed to 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, by two or more subsidiaries’ investment or operation.

(*7)	During March 2021, the Parent company acquired a 100% equity of Woori Financial Savings Bank from the Parent company’s subsidiary Woori Financial Capital Co., Ltd.

(*8)	As the financial statements for the end of the reporting period were not available, the most recent financial statements available from the date of settlement were used.

(*9)	The Parent company’s subsidiary WB Finance Co., Ltd. has changed the name to WOORI BANK (CAMBODIA) PLC.

(*10)

The Russia – Ukraine conflict has been escalated in February 2022, Russia is imposed to the international sanctions. Due to the sanctions, the lack of liquidity in the Russian foreign exchange market as well as the significant decline in value of the Rubles and the decline in value of Russian companies’ securities are in progress. As a result, the Group may experience situations such as a decrease in value of financial assets or operating assets owned by the Group regarding the conflict, an increase in receivable payment terms, limitation to transfer funds, decrease in the profit. As of December 31, 2022, the Group expects such conflict and sanctions would have financial impacts on the business of AO Woori Bank, one of the subsidiaries, in the future. However, the Group cannot reasonably predict the financial impacts because it is very uncertain to estimate the impact on the Group’s financial position and business performance.

(*11)

As a master-feeder fund, it is the percentage of the feeder fund’s ownership in the master fund.

- 21 -

(3)	The Group has not consolidated the following entities as of December 31, 2022 and 2021 despite having more than 50% ownership interest:


	As of December 31, 2022
Subsidiaries	Location		Main Business	Percentage of ownership (%)
Mirae Asset Maps Clean Water Private Equity Investment Trust 7th (*1)		Korea	Securities Investment		57.6
Kiwoom Yonsei Private Equity Investment Trust (*1)		Korea	Securities Investment		88.9
IGIS Europe Private Placement Real Estate Fund No. 163-2 (*2)		Korea	Securities Investment		97.8
IGIS Global Private Placement Real Estate Fund No. 148-1 (*1)		Korea	Securities Investment		75.0
IGIS Global Private Placement Real Estate Fund No. 148-2 (*1)		Korea	Securities Investment		75.0
Mirae Asset Seoul Ring Expressway Private Special Asset Fund No. 1 (*1)		Korea	Securities Investment		66.7
Hangkang Sewage Treatment Plant Fund (*1)		Korea	Securities Investment		55.6
Korea Investment Pocheon Hwado Expressway Professional Investment Fund (*1)		Korea	Securities Investment		55.2
Midas Global Private Placement Real Estate Investment Trust No. 7-2 (*1)		Korea	Securities Investment		58.3
Together-Korea Government Private Pool Private Securities Investment Trust No.3 (*3)		Korea	Securities Investment		100.0
INMARK France Private Placement Investment Trust No. 18-1 (*1)		Korea	Securities Investment		93.8
Kiwoom Vibrato Private Placement Investment Trust 1-W(EUR) (*2)		Korea	Securities Investment		99.5
KOTAM Global Infra Private Fund 1-4 (*2)		Korea	Securities Investment		99.7
UBSHana Class 1 Special Asset Investment Trust 3 Class C 2 (*1)		Korea	Securities Investment		51.0
Consus GyeongJu Green Specialized Private Special Asset Investment Trust 1 (*1)		Korea	Securities Investment		50.0
Kiwoom Harmony Private Placement Investment Trust No. 3 (*1)		Korea	Securities Investment		77.4
Consus Solar Energy Private Placement Investment Truns No.1(*1)		Korea	Securities Investment		50.0
IGIS ESG General Private Investment Trust No.1(*1)		Korea	Securities Investment		60.0
Kiwoom Aurora Geneal Type Private Placement Investment Trust No. 2(*1)		Korea	Securities Investment		60.0
NH-Amundi WSCP VIII Private Fund 2 (*1)		Korea	Securities Investment		65.2
AI Partners Global Infrastructure Specialized Privately Placed Feeder Fund Trust No. 2 (*2)		Korea	Securities Investment		100.0
Hangang new deal infra BTL fund 4 (HNBF4) (*1)		Korea	Securities Investment		60.0
Rifa Qualified Investors Private Real Estate Investment Trust No.40 (*2)		Korea	Securities Investment		55.0

(*1)

The Group does not have power over the discretionary fund because the fund manager has the sole authority to decide the relevant activities of the investee. The fund manager’s delegated power is exercised not only for the Group, but also for other investors as well. The Group does not have the power over the fund’s activities even though it holds more than 50% of ownership interest.

(*2)	The Group does not have power over the fund of funds because the Group cannot decide the relevant activities of the fund through the related contract. The Group does not have the power over the fund’s activities even though it holds more than 50% of ownership interest.

(*3)

The Group does not have power over the stock market stabilization fund as the fund’s relevant activities are determined by the management committee, over which the Group does not have substantial control. The Group does not have the power over the fund’s activities even though it holds more than 50% of ownership interest.


	As of December 31, 2021
Subsidiaries	Location		Main Business	Percentage of ownership (%)
Mirae Asset Maps Clean Water Private Equity Investment Trust 7th (*1)		Korea	Securities Investment		59.7
Kiwoom Yonsei Private Equity Investment Trust (*1)		Korea	Securities Investment		88.9
IGIS Europe Private Placement Real Estate Fund No. 163-2 (2)(4)		Korea	Securities Investment		97.9
IGIS Global Private Placement Real Estate Fund No. 148-1 (1)(4)		Korea	Securities Investment		75.0
IGIS Global Private Placement Real Estate Fund No. 148-2 (1)(4)		Korea	Securities Investment		75.0
Mirae Asset Seoul Ring Expressway Private Special Asset Fund No. 1 (1)(4)		Korea	Securities Investment		66.7
Hangkang Sewage Treatment Plant Fund (1)(4)		Korea	Securities Investment		55.6
Korea Investment Pocheon Hwado Expressway Professional Investment Fund (1)(4)		Korea	Securities Investment		55.2
Midas Global Private Placement Real Estate Investment Trust No. 7-2 (1)(4)		Korea	Securities Investment		58.3
Together-Korea Government Private Pool Private Securities Investment Trust No.3 (3)(4)		Korea	Securities Investment		100.0
INMARK France Private Placement Investment Trust No. 18-1 (1)(4)		Korea	Securities Investment		93.8
Kiwoom Vibrato Private Placement Investment Trust 1-W(EUR) (2)(4)		Korea	Securities Investment		99.5
KOTAM Global Infrastructure Private Equity Investment Trust No. 1-4 (*2)		Korea	Securities Investment		99.7
Hana UBS Class One Private Equity No. 3 C2 (*1)		Korea	Securities Investment		51.0
Consus Gyeongju Green Private Equity Investment Trust No. 1 (1) (4)		Korea	Securities Investment		50.0
Kiwoom Harmony Private Placement Investment Trust No. 3 (1) (4)		Korea	Securities Investment		77.4
Consus Solar Energy Private Placement Investment Truns No.1(*1)		Korea	Securities Investment		50.0

- 22 -

(*1)

(*2)	The Group does not have power over the fund of funds because the Group cannot decide the relevant activities of the fund through the related contract. The Group does not have the power over the fund’s activities even though it holds more than 50% of ownership interest.

(*3)

(*4)	In accordance with the amendment to the Capital Market Act, a specialized investment type private equity fund has been changed to a general private equity fund during the prior period.

- 23 -

(4)	The summarized financial information of the major subsidiaries are as follows. The financial information of each subsidiary was prepared on the basis of consolidated financial statements. (Unit: Korean Won in millions):


	As of and for the year ended December 31, 2022
Subsidiaries	Assets		Liabilities		Operating revenue		Net income (loss) attributable to owners		Comprehensive income (loss) attributable to owners
Woori Bank		443,340,979		417,583,793		38,656,623		2,892,165		2,651,873
Woori Card Co., Ltd.		16,118,967		13,692,456		1,845,296		204,385		199,397
Woori Financial Capital Co., Ltd.		12,581,473		11,040,754		1,323,574		183,328		189,765
Woori Investment Bank Co., Ltd.		5,657,191		4,982,410		406,157		91,794		92,379
Woori Asset Trust Co., Ltd.		322,098		94,573		137,114		60,319		60,316
Woori Savings Bank		1,786,495		1,556,679		110,868		10,607		10,998
Woori Asset Management Corp.		185,389		62,568		35,019		1,259		1,314
Woori Financial F&I Co., Ltd.		336,141		135,562		8,086		867		867
Woori Credit Information Co., Ltd.		42,832		9,240		38,549		1,784		2,083
Woori Fund Service Co., Ltd.		25,094		2,691		16,337		3,917		3,917
Woori Private Equity Asset Management Co., Ltd		94,434		4,672		7,830		1,902		1,872
Woori Global Asset Management Co., Ltd.		34,988		7,090		13,711		211		211
Woori FIS Co., Ltd.		112,117		54,645		296,235		1,069		11,559
Woori Finance Research Institute Co., Ltd.		6,456		2,604		7,006		46		245


	As of and for the year ended December 31, 2021
Subsidiaries	Assets		Liabilities		Operating revenue		Net income (loss) attributable to owners			Comprehensive income (loss) attributable to owners
Woori Bank		415,976,627		391,315,108		24,311,964		2,375,525			2,523,846
Woori Card Co., Ltd.		14,116,832		11,858,065		1,528,680		200,726			210,316
Woori Financial Capital Co., Ltd.		10,259,868		9,073,104		997,655		140,579			141,275
Woori Investment Bank Co., Ltd.		5,159,742		4,559,856		303,253		79,924			79,747
Woori Asset Trust Co., Ltd.		254,773		86,418		94,228		40,300			40,263
Woori Asset Management Corp.		151,651		30,144		33,343		8,244			8,458
Woori Savings Bank		1,444,508		1,222,888		85,813		15,315			14,926
Woori Credit Information Co., Ltd.		40,510		8,532		37,507		1,563			1,513
Woori Fund Service Co., Ltd.		22,168		2,582		15,618		3,570			3,570
Woori Private Equity Asset Management Co., Ltd.		42,790		4,652		4,230		2,209			2,113
Woori Global Asset Management Co., Ltd.		35,265		7,579		11,785		(441	)		(441	)
Woori FIS Co., Ltd.		105,138		59,225		270,393		1,587			8,010
Woori Finance Research Institute Co., Ltd.		5,864		2,257		6,812		57			64

- 24 -

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

Structured entity for asset securitization

The structured entity which 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 provision of 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 funding to the structured entity by the Group, 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 solely principal to some of its trust products. Due to the financial guarantees, the Group may be obliged 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.

As of December 31, 2022 and 2021, the Group provides 231,309 million won and 2,480,131 million won of credit facilities, respectively, for the structured entities mentioned above. As of December 31, 2022 and 2021, the purchase commitment amounts to 2,545,164 million won and 2,263,387 million won, respectively.

(6)

The Group has entered into various agreements with structured entities such as asset securitization, structured finance, investment fund, and trust contract. The characteristics of interests and the nature of risks related to unconsolidated structured entities over which the Group does not have control in accordance with K-IFRS 1110 are as follows:

The interests in unconsolidated structured entities that the Group hold are classified into asset securitization, structured finance, investment fund and real-estate trust, based on the nature and the purpose of each structured entity.

Unconsolidated structured entities classified as ‘asset securitization’ are entities that issue asset-backed securities, pay the principal and interest or distributes dividends on asset-backed securities through borrowings or profits from the management, operation and sale of securitized assets. The Group has been purchasing commitments of asset-backed securities or issuing asset-backed securities through credit grants, and recognizes related interest or fee revenue. There are entities that provide additional funding and conditional debt acquisition commitments before the Group’s financial support, but the Group is still exposed to losses arising from the purchase of financial assets issued by the structured entities when it fails to renew the securities.

Unconsolidated structured entities classified as ‘structured finance’ include real estate project financing investment vehicle, social overhead capital companies, and special purpose companies for ship (aircraft) financing. Each entity is incorporated as a separate company with a limited purpose in order to efficiently pursue business goals and the fund is raised by equity investment or loans from financial institutions and participating institutions. ‘Structured financing’ is a financing method for large-scale risky business, with investments made based on feasibility of the specific business or project, instead of credit of business owner or physical collaterals. The investors receive profits from the operation of the business. The Group recognizes interest revenue, profit or loss from assessment or transactions of financial instruments, or dividend income. With regard to uncertainties involving structured financing, there are entities that provide financial support such as additional fund, guarantees and prioritized credit grants prior to the Group’s intervention, but the Group is exposed to possible losses due to loss of principal from reduction in investment value or irrecoverable loans arising from failure to collect scheduled cash flows and cessation of projects.

- 25 -

Unconsolidated structured entities classified as ‘investment funds’ include investment trusts and private equity funds. An investment trust orders the investment and operation of funds to the trust manager in accordance with trust contract with profits distributed to the investors. Private equity funds finances money required to acquire equity securities to enable direction of management and/or improvement of ownership structure, with profit distributed to the investors. The Group recognizes pro rata amount of dividend income as an investor in the same way as ‘structured finance’, and may be exposed to losses due to reduction in investment value. Investments in MMF(Money Market Funds) as of December 31, 2022 and 2021 are 875,470 million won and 853,140 million won, respectively, and there is no additional commitments for MMF.

‘Real estate trust’ is to be entrusted the underlying property for the purpose of managing, disposing, operating or developing from the consignor who owns the property and distributes the proceeds achieved through the trust to the beneficiary. When the consignee does not fulfill his or her important obligations in the trust contract or it is, in fact, difficult to run the business, the Group may be exposed to the threat of compensating the loss.

The total assets of the unconsolidated structured entity held by the Group, the carrying amount of the items recognized in the consolidated financial statements, the maximum loss exposure, and the losses from the unconsolidated structured entity are as follows. The maximum loss exposure includes the amount of investment recognized in the consolidated financial statements and the amount that is likely to be confirmed in the future when satisfies certain conditions by contracts such as purchase commitments, credit offerings.

- 26 -


	(unit: Korean Won in millions))
	December 31, 2022
	Asset securitization		Structured Finance		Investment Fund		Real-estate trust
Total asset of the unconsolidated structured entities		14,856,750		82,724,618		132,264,383		1,316,930
Assets recognized in the consolidated financial statements related to the unconsolidated structured entities		8,051,144		5,537,836		4,964,712		40,073
Financial assets at FVTPL		258,552		6,642		4,397,416		10,480
Financial assets at FVTOCI		3,213,331		45,735		—		—
Financial assets at amortized cost		4,579,261		5,485,336		31,124		29,593
Investments in joint ventures and associates		—		—		535,427		—
Derivative assets		—		123		745		—
Liabilities recognized in the consolidated financial statements related to the unconsolidated structured entities		824		6,606		2,091		5,760
Derivative liabilities		729		4,975		2,091		—
Other liabilities (provisions)		95		1,631		—		5,760
The maximum exposure to risks		8,153,111		6,086,831		9,322,308		92,856
Investment assets		8,051,144		5,537,836		4,964,712		40,073
Purchase commitment		—		—		4,352,518		—
Credit offerings and others		101,967		548,995		5,078		52,783
Loss recognized on unconsolidated structured entities		—		17,388		113,976		1,040


	(unit: Korean Won in millions))
	December 31, 2021
	Asset securitization		Structured Finance		Investment Fund		Real-estate trust
Total asset of the unconsolidated structured entities		15,640,521		94,969,317		94,675,732		1,398,508
Assets recognized in the consolidated financial statements related to the unconsolidated structured entities		8,518,101		4,633,475		4,214,747		54,662
Financial assets at FVTPL		374,423		5,021		3,550,532		10,665
Financial assets at FVTOCI		3,878,882		46,478		—		—
Financial assets at amortized cost		4,264,626		4,579,367		71,662		43,997
Investments in joint ventures and associates		—		—		592,553		—
Derivative assets		170		2,609		—		—
Liabilities recognized in the consolidated financial statements related to the unconsolidated structured entities		677		1,536		—		2,964
Derivative liabilities		—		673		—		—
Other liabilities (provisions)		677		863		—		2,964
The maximum exposure to risks		8,739,034		5,728,977		4,221,072		115,212
Investment assets		8,518,101		4,633,475		4,214,747		54,662
Credit offerings and others		220,933		1,095,502		6,325		60,550
Loss recognized on unconsolidated structured entities		183		11,872		71,309		282

- 27 -

(7)	As of December 31, 2022 and 2021, the share of non-controlling interests on the net income and equity of subsidiaries in which non-controlling interests are significant are as follows: (Unit: Korean Won in millions):

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


	December 31, 2022		December 31, 2021
Woori Bank (*)		2,344,816		2,555,166
Woori Investment Bank Co., Ltd.		283,221		251,879
Woori Asset Trust Co., Ltd.		78,434		60,726
Woori Asset Management Corp		34,073		33,768
PT Bank Woori Saudara Indonesia 1906 Tbk		92,118		87,741
Wealth Development Bank		20,759		20,835
PT Woori Finance Indonesia Tbk.		13,964		—

(*)

Hybrid securities issued by Woori Bank

Net income attributable to non-controlling interests


	For the years ended December 31
	2022		2021
Woori Bank (*)		113,995		144,923
Woori Financial Capital Co., Ltd.		—		17,949
Woori Investment Bank Co., Ltd.		38,319		33,274
Woori Asset Trust Co., Ltd.		18,074		11,366
Woori Asset Management Corp		290		2,341
PT Bank Woori Saudara Indonesia 1906 Tbk		10,806		8,619
Wealth Development Bank		401		928
PT Woori Finance Indonesia Tbk.		379		—

(*)

Distribution of the hybrid securities issued by Woori Bank

Dividends to non-controlling interests


	For the years ended December 31
	2022		2021
Woori Bank (*)		113,995		144,923
Woori Financial Capital Co., Ltd.		—		4,121
Woori Investment Bank Co., Ltd.		7,219		3,610
Woori Asset Trust Co., Ltd		365		365
PT Bank Woori Saudara Indonesia 1906 Tbk		2,330		1,262

(*)

Distribution of the hybrid securities issued by Woori Bank

- 28 -

2.	BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

(1)	Basis of presentation

The Group maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language (Hangul) in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (K-IFRS). The accompanying consolidated financial statements have been condensed, restructured and translated into English from the Korean language financial statements.

Certain information attached to the Korean language financial statements, but not required for a fair presentation of the Group’s financial position, financial performance or cash flows, is not presented in the accompanying consolidated financial statements.

The consolidated financial statements of the Group have been prepared in accordance with K-IFRS. These are the standards, subsequent amendments and related interpretations issued by the International Accounting Standards Board (IASB) that have been adopted by the Republic of Korea.

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

The consolidated financial statements, as described in following paragraphs of accounting policy, are prepared at the end of each reporting period in historical cost basis, except for certain non-current assets and financial assets that are either revalued or measured in fair value. Historical cost is generally measured at the fair value of consideration given to acquire assets.

Meanwhile, the consolidated financial statements of the Group were initially approved by the Board of Directors on February 8, 2023, and were revised and approved on March 3, 2023, and the final approval will be made in the annual general shareholders’ meeting on March 24, 2023.

1)	The standards and interpretations that are newly adopted by the Group during the current period, and the changes in accounting policies thereof are as follows:

K-IFRS 1007‘Statement of cash flow’ - Cash and cash equivalents

The Group did not classify deposits with restrictions under relevant regulations, such as reserve deposits, as cash and cash equivalents. However, in accordance of the IFRS Interpretation Committee’s agenda decision in April 2022 ‘Demand deposits restricted on use under contracts with third parties’ and reply to K-IFRS inquiries ‘whether the reserve deposit should be classified as cash and cash equivalents’ the policy was changed to classifying the reserve deposits with restrictions under relevant regulations which meet the criteria of demand deposits as cash and cash equivalent and applied the modification retrospectively. The impact of this change in accounting policy is as follows:

Impact on the statements of financial position


	December 31, 2022			December 31, 2021			January 1, 2021
Increase in cash and cash equivalents		22,965,162			13,047,255			7,352,253
Decrease in loans and other financial assets at amortized cost		(22,965,162	)		(13,047,255	)		(7,352,253	)

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Impact on the statements of cash flow


	December 31, 2022			December 31, 2021
Increase in cash flows from operating activities		9,981,310			5,600,710
Increase in exchange rate changes on cash and cash equivalents denominated in foreign currencies		(63,403	)		94,292
Net increase in cash and cash equivalents		9,981,310			5,600,710
Increase in cash and cash equivalents, the beginning of the year		13,047,255			7,352,253
Increase in cash and cash equivalents, the end of the year		22,965,162			13,047,255

ii)

Amendments to K-IFRS 1103 ‘Business Combination’ –Reference to the Conceptual Framework

The amendments update a reference of definition of assets and liabilities qualify for recognition in revised Conceptual Framework for Financial Reporting. However, the amendments add an exception for the recognition of liabilities and contingent liabilities within the scope of K-IFRS 1037 Provisions, Contingent Liabilities and Contingent Assets, and K-IFRS 2121 Levies. The amendments also confirm that contingent assets should not be recognized at the acquisition date. The amendment does not have a significant impact on the financial statements.

iii)

Amendments to K-IFRS 1037 ‘Provisions, Contingent Liabilities and Contingent Assets’ – Onerous Contracts: Cost of Fulfilling a Contract’

The amendments clarify that the direct costs of fulfilling a contract include both the incremental costs of fulfilling the contract and an allocation of other costs directly related to fulfilling contracts when assessing whether the contract is onerous. The amendment does not have a significant impact on the financial statements.

iv)

Amendments to K-IFRS 1016 ‘Property, Plant and Equipment’ – Proceeds before intended use

The amendments prohibit an entity from deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while the entity is preparing the asset for its intended use. Instead, the entity will recognize the proceeds from selling such items, and the costs of producing those items, in profit or loss. The amendment does not have a significant impact on the financial statements.

Annual Improvements to K-IFRS 2018-2020

The annual improvement includes some amendments to K-IFRS 1101 ‘First time Adoption of Korean International Financial Reporting Standards’, K-IFRS 1109 ‘Financial Instrument’s, K-IFRS 1116 ‘Lease’, K-IFRS 1041 ‘Agriculture’.

These amendments do not have a significant impact on the consolidated financial statements.

K-IFRS 1101 ‘First time Adoption of Korean International Financial Reporting Standards’- Subsidiaries that are first-time adopters

K-IFRS 1109 ‘Financial Instrument’s - Fees related to the 10% test for derecognition of financial liabilities

K-IFRS 1116 ‘Lease’- Delete the contents of the lease improvement reimbursement amount.

K-IFRS 1041 ‘Agriculture’ - Measuring fair value

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2)	The details of K-IFRSs that have been issued and published as of December 31, 2022 but have not yet reached the effective date, and which the Group have not been early adopted by the Group are as follows:

Amendments to K-IFRS 1001 ‘Presentation of Financial Statements’ – Classification of Liabilities as Current or Non-current

The amendments clarify that liabilities are classified as either current or non-current, depending on the substantive rights that exist at the end of the reporting period. Classification is unaffected by the likelihood that an entity will exercise right to defer settlement of the liability or the expectations of management. Also, the settlement of liability include the transfer of the entity’s own equity instruments, however, it would be excluded if an option to settle them by the entity’s own equity instruments if compound financial instruments is met the definition of equity instruments and recognized separately from the liability. The amendments should be applied for annual periods beginning on or after January 1, 2024, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

ii)

Amendments to K-IFRS 1001 ‘Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements’ - Disclosure of ‘Accounting Policy

‘IFRS Practice Statement 2’ has been amended to define and disclose important accounting policies and to provide guidance on how to apply the concept of importance. These amendments apply for annual periods beginning on or after January 1,2023, and early application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

iii)

Amendments to K-IFRS 1001 ‘Presentation of Financial Statements’– Disclosure of valuation gains or losses on financial liabilities with condition to adjust exercise price

The amendments require disclosure of valuation gains or losses (limited to those recognized in the profit or loss) of the conversion options or warrants (or financial liabilities including them), if all or part of the financial instrument with exercise price that is adjusted depending on the issuer’s share price change is classified as financial liability as defined in paragraph 11 (2) of K-IFRS 1032. These amendments apply for annual periods beginning on or after January 1, 2023, and early application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

iv)

Amendments to K-IFRS 1008 ‘Accounting Policies, Changes in Accounting Estimates and Errors’– Definition of Accounting Estimates

The amendments have defined accounting estimates and clarified how to distinguish them from changes in accounting policies. These amendments apply for annual periods beginning on or after January 1, 2023, and early application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

Amendments to K-IFRS 1012 ‘Income Taxes’– deferred tax related to assets and liabilities arising from a single transaction

Additional phrase ‘the temporary difference to be added and the temporary difference to be deducted do not occur in the same amount’ has been added to initial recognition exception for a transaction in which an asset or liability is initially recognized. These amendments apply for annual periods beginning on or after January 1, 2023, and early application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

The above enacted or amended standards will not have a significant impact on the Group.

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(2)	Basis of consolidated financial statement presentation

The consolidated financial statements consist of the financial statements of the parent company and the entities (including structured entities) controlled by the parent company (or its subsidiaries, which is the “Group”). Control is achieved where the Group 1) has the power over the investee, 2) is exposed, or has rights, to variable returns from its involvement with the investee, and 3) able to use its power to affect its returns. The Group reassesses whether it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Group has less than most of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Group considers all relevant facts and circumstances in assessing whether the Group’s voting rights in an investee are enough to give it power, including:

The relative size of the Group’s holding of voting rights and dispersion of holdings of the other vote holders;

Potential voting rights held by the Group, other vote holders or other parties;

Rights arising from other contractual arrangements;

Any additional facts and circumstances that indicate that the Group has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.

Income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the date the Group gains control until the date when the Group ceases to control the subsidiary. The carrying amount of the non-controlling interest after the acquisition is the amount initially recognized plus the amount of proportionate interest of the non-controlling interest in the changes in equity since the acquisition. Total comprehensive income of subsidiaries is attributed to the owner of the Group and to the non-controlling interests even if this results in the non-controlling interests having a negative (-) balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies.

All intra-group transactions and, related assets and liabilities, income and expenses are eliminated in full on consolidation.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owner of the parent company.

When the Group loses control of a subsidiary, a gain or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. When assets of the subsidiary are carried at revalued amounts or fair values and the related cumulative gain or loss has been recognized in other comprehensive income and accumulated in equity, the amounts previously recognized in other comprehensive income and accumulated in equity are accounted for as if the Group had directly disposed of the relevant assets (i.e. reclassified to profit or loss or transferred directly to retained earnings). The fair value of any investment retained in the former subsidiary at the date when control is lost is recognized as the fair value on initial recognition for subsequent accounting under K-IFRS 1109 Financial Instruments or, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.

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(3)	Business combinations

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured as the sum of the acquisition-date fair values of the assets transferred by the Group in exchange for control of the acquiree, liabilities assumed by the Group for the former owners of the acquiree and the equity interests issued by the Group. Acquisition-related costs are generally recognized in profit or loss as incurred.

At the acquisition date, the acquiree’s identifiable acquires assets, liabilities and contingent liabilities are recognized at their fair value, except for the followings:

Deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognized and measured in accordance with K-IFRS 1012 Income Taxes and K-IFRS 1019 Employee Benefits, respectively;

Liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with K-IFRS 1102 Share-based Payment at the acquisition date; and

Non-current assets (or disposal groups) that are classified as held for sale are measured in accordance with K-IFRS 1105 Non-current Assets Held for Sale and Discontinued Operations

Any excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the Group’s previously held equity interest (if any) in the acquiree over the net of identifiable assets and liabilities assumed of the acquiree at the acquisition date is recognized as goodwill.

If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognized immediately in net income as a bargain purchase gain.

The subsidiary’s non-controlling interests are identified separately from the Group’s equity. If the element of the non-controlling interest in the acquiree is the current interest at the acquisition date and the holder is entitled to a proportional share of the entity’s net assets, the non-controlling interest can be measured in 1) fair value or 2) proportionate share of the current equity instrument of the amount recognized for the acquiree’s identifiable net assets at the acquisition date. The selection of these metrics is made for each acquisition transaction. All other non-controlling interests are measured at fair value at the acquisition date. The carrying amount of the non-controlling interest after acquisition reflects the proportional interest of the non-controlling interest in changes in equity after acquisition in the initial recognition amount. Even if the non-controlling interest is a negative (-) balance, total comprehensive income is attributed to the non-controlling interest.

When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.

The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration other than the above is remeasured at subsequent reporting dates as appropriate, with the corresponding gain or loss being recognized in profit or loss.

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When a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is remeasured at fair value at the acquisition date (i.e., the date when the Group obtains control) and the resulting gain or loss, if any, is recognized in net income(or other comprehensive income, if applicable). Amounts arising from changes in value of interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are recognized, identical to the treatment assuming interests are sold directly.

If the initial accounting for a business combination is not completed by the end of the reporting period in which the business combination occurred, the Group reports in consolidated financial statements the provisional amount of items that have not been accounted for. If there is new information about the facts and circumstances that existed as of the acquisition date during the measurement period (see above), the Group retrospectively adjusts the provisional amounts recognized at the acquisition date or recognizes additional assets and liabilities to reflect the information that would have affected the measurement of the amount recognized at the acquisition date if it had already known at the acquisition date.

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(4)	Investments in joint ventures and associates

An associate is an entity over which the Group has significant influence, and that is not a subsidiary or a joint venture. Significant influence is the power to participate in making decision on the financial and operating policy of the investee but is not control or joint control over those policies.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to net assets relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

The net income of current period and the assets and liabilities of the joint ventures and associates are incorporated in these consolidated financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with K-IFRS 1105 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, an investment in the joint ventures and associates is initially recognized in the consolidated statements of financial position at cost and adjusted thereafter to recognize the Group’s share of the net assets of the joint ventures and associates and any impairment. When the Group’s share of losses of the joint ventures and associates exceeds the Group’s interest in the associate, the Group discontinues recognizing its share of further losses. Additional losses are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the joint ventures and associates.

Investment in joint ventures and associates are accounted for and applied with the equity method from the time the investee becomes an associate or a joint venture.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the joint ventures and associates recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition exists after the review, it is recognized immediately in net income.

The requirements of K-IFRS 1028 – Investments in Associates and Joint Ventures to determine whether there has been a loss event are applied to identify whether it is necessary to recognize any impairment loss with respect to the Group’s investment in the joint ventures and associates. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with K-IFRS 1036 – Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognized is not allocated to any asset (including goodwill), which forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized in accordance with K-IFRS 1036 to the extent that the recoverable amount of the investment subsequently increases.

The Group ceases to use the equity method from the time it fails meet the definition of an associate or a joint venture. Upon a loss of significant influence over the joint ventures and associates, the Group discontinues the use of the equity method and measures at fair value of any investment that the Group retains in the former joint ventures and associates from the date when the Group loses significant influence. The fair value of the investment is regarded as its fair value on initial recognition as a financial asset in accordance with K-IFRS 1109 Financial Instruments; Recognition and Measurement. The Group recognized differences between the carrying amount and fair value in net income and it is included in determination of the gain or loss on disposal of joint ventures and associates. The Group accounts for all amounts recognized in other comprehensive income in relation to that joint ventures and associates on the same basis as would be required if the joint ventures and associates had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognized in other comprehensive income by an associate or a joint venture would be reclassified to net income on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to net income as a reclassification adjustment.

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When the Group’s ownership of interest in an associate or a joint venture decreases but the Group continues to maintain significant influence over an associate or a joint venture, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognized in other comprehensive income relating to that decrease in ownership interest if the gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities. Meanwhile, if interest on associate or joint venture meets the definition of non-current asset held for sale, it is accounted for in accordance with K-IFRS 1105.

The Group continues to use the equity method when an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate. There is no remeasurement to fair value upon such changes in ownership interests.

When the Group transacts with an associate or a joint venture of the Group, profits and losses resulting from the transactions with the associate or joint venture are recognized in the Group’s consolidated financial statements only to the extent of interests in the associate or joint venture that are not related to the Group.

The Group applies K-IFRS 1109 Financial Instruments, including the impairment requirements, to its long-term investment interests in associates and joint ventures that form part of its net investment without applying the equity method. In addition, when applying K-IFRS 1109 to long-term investments, the Group does not consider adjustments to the carrying amount required by K-IFRS 1028. Examples of such adjustments include an impairment assessment or an adjustment to the carrying amount of the long-term investment interest resulting from the allocation of losses to the investee in accordance with K-IFRS 1028.

(5)	Investment in joint operation

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

When the Group operates as a joint operator, it recognizes in relation to its interest in a joint operation:

its assets, including its share of any assets held jointly;

its liabilities, including its share of any liabilities incurred jointly;

its revenue from the sale of its share of the output arising from the joint operation;

its share of the revenue from the sale of the output by the joint operation;

its expenses, including its share of any expenses incurred jointly.

The Group accounts for the assets, liabilities, revenues and expenses that correspond to its interest in a joint operation in accordance with the K-IFRSs applicable to the specific assets, liabilities, revenues and expenses.

When the Group enters into a transaction with a joint operation in which it is a joint operator, such as a sale or contribution of assets, it is conducting the transaction with the other parties to the joint operation and, as such, the Group recognizes gains and losses resulting from such a transaction only to the extent of the other parties’ interests in the joint operation.

When the Group enters a transaction with a joint operation in which it is a joint operator, such as a purchase of assets, it does not recognize proportional share of profit or loss until the asset is sold to a third party.

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(6)	Revenue recognition

K-IFRS 1115 requires the recognition of revenues based on transaction price allocated to the performance obligation when or as the Group performs that obligation to the customer. Revenues other than those from contracts with customers, such as interest revenue and loan origination fee (cost), are recognized through effective interest rate method.

Revenues from contracts with customers

The Group recognizes revenue when the Group satisfies a performance obligation by transferring a promised good or service to a customer. When a performance obligation is satisfied, the Group shall recognize as a revenue the amount of the transaction price that is allocated to that performance obligation. The transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.

The Group is recognizing revenue by major sources as shown below:

①

Fees and commission received for brokerage

The fees and commission received for agency are the amount of consideration or fee expected to be entitled to receive in return for providing goods or services to the other parties with the Group acting as an agency, such as in the case of sales of bancassurance and beneficiary certificates. Most of these fees and commission received for brokerage are from the business activities relevant to Banking segment.

②

Fees and commission received related to credit

The fees and commission received related to credit mainly include the lending fees received from the loan activity and the fees received in the L/C transactions. Except for the fees and commission accounted for in calculating the effective interest rate, it is generally recognized when the performance obligation has been performed. Most of these fees and commission received related to credit are from the business activities relevant to Banking, Credit card and Investment banking segment.

③

Fees and commission received for electronic finance

The fees and commission received for electronic finance include fees received in return for providing various kinds of electronic financial services through firm-banking and CMS. These fees are recognized as revenue immediately upon the completion of services. Most of these fees and commission received for electronic finance are from the business activities relevant to Banking and Investment banking segment.

④

Fees and commission received on foreign exchange handling

The fees and commission received on foreign exchange handling consist of various fees incurred when transferring foreign currency. The point of processing the customer’s request is the time when performance obligation is satisfied, and revenue is immediately recognized when fees and commission are received after requests are processed. The business activities relevant to these fees and commission received on foreign exchange handling are substantially attributable to Banking segment.

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⑤

Fees and commission received on foreign exchange

The fees and commission received on foreign exchange consist of fees related to the issuance of various certificates, such as exchange, import and export performance certificates, purchase certificates, etc. The point of processing the customer’s request is the time when performance obligation is satisfied, and revenue is immediately recognized when fees and commission are received after requests are processed. The business activities relevant to these fees and commission received on foreign exchange are substantially attributable to Banking segment.

⑥

Fees and commission received for guarantee

The fees and commission received for guarantee include the fees received for the various warranties. The activities related to the warranty consist mainly of performance obligations satisfied over time and fees and commission are recognized over the guarantee period. The business activities relevant to these fees and commission received for guarantee are substantially attributable to Banking segment.

⑦

Fees and commission received on credit card

The fees and commission received on credit card consist mainly of merchant account fees and annual fees.

The Group recognizes merchant account fees by multiplying agreed commission rate to the amount paid by using the credit card. The annual fees are performance obligation satisfied over time and are recognized over agreed periods after the annual fees are paid in advance. The business activities relevant to these fees and commission received on credit card are substantially attributable to Credit cards segment.

⑧

Fees and commission received on securities business

The fees and commission received on securities business consist mainly of fees and commission for the sale of beneficiary certificates, and these fees are recognized when the beneficiary certificates are sold to customers. The business activities relevant to these fees and commission received on securities business are substantially attributable to Banking and Investment banking segment.

⑨

Fees and commission from trust management

The fees and commission from trust management consist of fees and commission received in return for the operation and management services for entrusted assets. These operation and management services are performance obligations satisfied over time, and revenue is recognized over the service period. Among the fees and commission from trust management, variable considerations such as profit commission that are affected by the value of entrusted assets and base return of the future periods are recognized as revenue when limitations to the estimates are lifted. Most of these fees and commission received for brokerage are from the business activities relevant to Banking segment.

⑩

Fees and commission received on credit Information

The fees and commission received on credit Information are composed of the fees and commission received by performing credit investigation and proxy collection services. Credit investigation fees and commission are the amount received in return for verifying the information requested by the customer and are recognized as revenue at the time the verification is completed. Proxy collection service fees are recognized by rying the applicable rate to the collected amount at the time when collection services are completed. Most of these fees and commission received for brokerage are from the business activities relevant to other segments.

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Other fees

Other fees are usually fees related to remittances, but include fees related to various other services provided to customers by the Group. These fees are recognized when transactions occur at the customers’ request and services are provided, at the same time when commission are received. These other fees occur across all operating segments.

Revenues from sources other than contracts with customers

①

Interest income

Interest income on financial assets measured at FVTOCI and financial assets at amortized costs is measured using the effective interest method.

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating the interest income over the expected life of the asset. The effective interest rate is the rate that exactly discounts estimated future cash flows to the instrument’s initial unamortized cost over the expected period, or shorter if appropriate. Future cash flows include commissions and cost of reward points(limited to the primary component of effective interest rate) and other premiums or discounts that are paid or received between the contractual parties when calculating the effective interest rate, but does not include expected credit losses. All contractual terms of a financial instrument are considered when estimating future cash flows.

For purchased or originated credit-impaired financial assets, interest revenue is recognized by applying the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition. Even if the financial asset is no longer impaired in the subsequent periods due to credit improvement, the basis of interest revenue calculation is not changed from amortized cost to unamortized cost of the financial assets.

②

Loan origination fees and costs

The commission fees earned on loans, which is part of the effective interest of loans, is accounted for as deferred origination fees. Incremental costs related to the origination of loans are accounted for as deferred origination fees and is being added or deducted to/from interest income on loans using effective interest rate method.

Dividend income

Dividend income is recognized when the right to receive dividends as a shareholder is confirmed. Dividend income is recognized as an appropriate item of profit or loss in the statement of comprehensive income according to the classification of financial instruments.

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(7)	Accounting for foreign currencies

The Group’s consolidated financial statements are presented in Korean Won, which is the functional currency of the Group. At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at its prevailing exchange rates at the date. The effective portion of the changes in fair value of a derivative that qualifies as a cash flow hedge and the foreign exchange differences on monetary items that form part of net investment in foreign operations are recognized in equity.

Assets and liabilities of the foreign operations subject to consolidation are translated into Korean Won at foreign exchange rates at the end of the reporting period. Except for situations in which it is required to use exchange rates at the date of transaction due to significant changes in exchange rates during the period, items that belong to profit or loss shall be measured by average exchange rate, with foreign exchange differences recognized as other comprehensive income and added to equity (allocated to non-controlling interests, if appropriate). When foreign operations are disposed, the controlling interest’s share of accumulated foreign exchange differences related to such foreign operations will be reclassified to profit or loss, while non-controlling interest’s corresponding share will not be reclassified.

Adjustments to fair value of identifiable assets and liabilities, and goodwill arising from the acquisition of foreign operations will be treated as assets and liabilities of the corresponding foreign operation, and translated using foreign exchange rates at the end of the period. The foreign exchange differences are recognized in other comprehensive income.

(8)	Cash and cash equivalents

The Group is classifying cash on hand, demand deposits, interest-earning deposits with original maturities of up to three months on acquisition date, and highly liquid investments that are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value as cash and cash equivalents.

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(9)	Financial assets and financial liabilities

Financial assets

A regular way purchase or sale of financial assets is recognized or derecognized on the trade or settlement date. A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose term requires delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned.

On initial recognition, financial assets are classified into financial assets at FVTPL, financial assets at FVTOCI, and financial assets at amortized cost according to its business model and contractual cash flows.

Business model

The Group evaluates the way business is being managed, and the purpose of the business model for managing a financial asset best reflects the way information is provided to the management at its portfolio level. Such information considers the following:

The accounting policies and purpose specified for the portfolio, the actual operation of such policies. This includes strategy of the management focusing on the receipt of contractual interest revenue, maintaining a certain level of interest income, matching the duration of financial assets and the duration of corresponding liabilities to obtain the asset, and outflow or realization of expected cash flows from disposal of assets

The way the performance of a financial asset held under the business model is evaluated, and the way such evaluation is being reported to the management

The risk affecting the performance of the business model (and financial assets held under the business model), and the way such risk is being managed

The compensation plan for the management (e.g. whether the management is being compensated based on the fair value of assets or based on contractual cash flows received)

Frequency, amount, timing and reason for sale of financial assets in the past, and forecast of future sale activities.

Contractual cash flows

The principal is defined to be the fair value of a financial assets at initial recognition. Interest is not only composed of consideration for the time value of money, consideration for the credit risk related to remaining principal at a certain period of time, and consideration for other cost (e.g. liquidity risk and cost of operation) and fundamental risk associated with lending, but also profit.

When evaluating whether contractual cash flows are solely payments of principal and interests, the Group considers the contractual terms of the financial instrument. When a financial asset contains contractual conditions that modify the timing and amount of contractual cash flows, it is required to determine whether contractual cash flows that arise during the remaining life of the financial instrument due to such contractual condition are solely payments of principal and interest. The Group considers the following elements when evaluating the above:

Conditions that lead to modification of timing or amount of cash flows

Contractual terms that adjust contractual nominal interest, including floating rate features

Early payment features and maturity extension features

Contractual terms that limit the Group’s claim on cash flows arising from certain assets

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①

Financial assets at FVTPL

The Group is classifying those financial assets that are not classified as either financial assets at amortized cost or financial assets at FVTOCI, and those designated to be measured at FVTPL, as financial assets at FVTPL. Financial assets at FVTPL are measured at fair value, and related profit or loss is recognized in net income. Transaction costs related to acquisition at initial recognition is recognized in net income immediately upon its occurrence.

It is possible to designate a financial asset as financial asset at FVTPL if at initial recognition: (a) it is possible to remove or significantly reduce recognition or measurement mismatch that may otherwise have occurred if not for its designation as financial asset at FVTPL; (b) the financial asset forms part of the Group’s financial instrument group (a group composed of a combination of financial asset or liability), is measured at fair value and is being evaluated for its performance, and such information is provided internally; and (c) the financial asset is part of a contract that contains one or more of embedded derivatives, and is a hybrid contract in which designation as financial asset at FVTPL is allowed under K-IFRS 1109 Financial Instruments. However, the designation is irrevocable.

②

Financial assets at FVTOCI

When financial assets are held under a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and when contractual cash flows from such financial assets are solely payments of principal and interest, the financial assets are classified as financial assets at FVTOCI. Also, for investments in equity instruments that are not held for short-term trade, an irrevocable election is available at initial recognition to present subsequent changes in fair value as other comprehensive income.

At initial recognition, financial assets at FVTOCI is measured at its fair value plus any direct transaction cost, and is subsequently measured in fair value. However, for equity instruments that do not have a quotation in an active market and in which fair value cannot be measured reliably, they are measured at cost. The income tax effects related to the changes in fair value except for profit or loss items such as impairment losses (reversals), interest revenue calculated by using effective interest method, and foreign exchange gain or loss about debt instrument are recognized as other comprehensive income until the asset’s disposal. Upon derecognition, the accumulated other comprehensive income is reclassified from equity to net income for FVTOCI (debt instrument), and reclassified within the equity for FVTOCI (equity instruments).

③

Financial assets at amortized cost

When financial assets are held under a business model whose objective is to hold financial assets in order to collect contractual cash flows, and when contractual cash flows from such financial assets are solely payments of principal and interest, the financial assets are classified as financial assets at amortized cost. At initial recognition, financial assets at amortized cost are recognized at fair value plus any direct transaction cost. Financial assets at amortized cost is presented at amortized cost using effective interest method, less any loss allowance.

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Financial liabilities

At initial recognition, financial liabilities are classified into either financial liabilities at FVTPL or financial liabilities at amortized cost.

Financial liabilities are usually classified as financial liabilities at FVTPL when they are acquired with a purpose to repurchase them within a short period of time, when they are part of a certain financial instrument portfolio that is actually and recently being managed with a purpose of short-term profit and joint management by the Group at initial recognition, and when they are derivatives that do not qualify as hedging instruments. Financial liabilities at FVTPL are measured at fair value plus direct transaction cost at initial recognition, and are subsequently measured at fair value. Profit or loss arising from financial liabilities at FVTPL is recognized in net income when occurred.

It is possible to designate a financial liability as financial liability at FVTPL if at initial recognition: (a) it is possible to remove or significantly reduce recognition or measurement mismatch that may otherwise have occurred if not for its designation as financial liability at FVTPL; (b) the financial asset forms part of the Group’s financial instrument group (a group composed of a combination of financial asset or liability) according to the Group’s documented risk management or investment strategy, is measured at fair value and is being evaluated for its performance, and such information is provided internally; and (c) the financial liability is part of a contract that contains one or more of embedded derivatives, and is a hybrid contract in which designation as financial liability at FVTPL is allowed under K-IFRS 1109 Financial Instruments.

Financial liabilities designated as at FVTPL are initially recognized at fair value, with any direct transaction cost recognized in profit or loss, and are subsequently measured at fair value. Any profit or loss from financial liabilities at FVTPL are recognized in profit or loss.

Financial liabilities not classified as financial liabilities at FVTPL are measured at amortized cost.

Reclassification

Financial assets are not reclassified after initial recognition unless the Group modifies the business model used to manage financial assets. When the Group modifies the business model used to manage financial assets, all affected financial assets are reclassified on the first day of the first reporting period after the modification.

Derecognition

Financial assets are derecognized when contractual rights to cash flows from the financial assets are expired, or when substantially all of risk and reward for holding financial assets is transferred to another entity as a result of a sale of financial assets. If the Group does not have and does not transfer substantially all of the risk and reward of holding financial assets with control of the transferred financial assets retained, the Group recognizes financial assets to the extent of its continuing involvement. If the Group holds substantially all the risk and reward of holding a financial asset, it continues to recognize that asset and proceeds are accounted for as collateralized borrowings.

When a financial asset is fully derecognized, the difference between the carrying amount and the sum of proceeds and accumulated other comprehensive income is recognized as profit or loss in case of FVTOCI (debt instruments), and as retained earnings for FVTOCI (equity instruments).

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In case when a financial asset is not fully derecognized, the Group allocates the carrying amount into amounts retained in the books and removed from the books, based on the relative fair value of each portion at the date of sale, and based on the degree of continuing involvement. For the derecognized portion of the financial assets, the difference between its carrying amount and the sum of proceeds and the portion of accumulated other comprehensive income attributable to that portion will be recognized in profit or loss in case of debt instruments and recognized in retained earnings in case of equity instruments. The accumulated other comprehensive income is distributed to the portion of carrying amount retained in the books, and to the portion of carrying amount removed from the books.

The Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

When the Group exchanges with the existing lender one debt instrument into another one with the substantially different terms, such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, the Group accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial liability and the recognition of a new liability. It is assumed that the terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective rate is at least 10 percent different from the discounted present value of the remaining cash flows of the original financial liability.

Fair value of financial instruments

Financial assets at FVTPL and financial assets at FVTOCI are measured and presented in consolidated financial statements at their fair values, and all derivatives are also subject to fair value measurement.

Fair value is defined as the price that would be received to exchange an asset or paid to transfer a liability in a recent transaction between independent parties that are reasonable and willing. Fair value is the transaction price of identical financial assets or financial liabilities generated in an active market. An active market is a market where trade volume is sufficient and objective price information is available due to the fact that bid and ask price differences are small.

When trade volume of a financial instrument is low, when transaction prices within the market show large differences among them, or when it cannot be concluded that a financial instrument is being traded within an active market due to disclosures being extremely shallow, fair value is measured using valuation techniques based on alternative market information or using internal valuation techniques based on general and observable information obtained from objective sources. Market information includes maturity and characteristics, duration, similar yield curve, and variability measurement of financial instruments of similar nature. Fair value amount contains unique assumptions on each entity (the Group concluded that it is using assumptions applied in valuing financial instruments in the market, or risk-adjusted assumptions in case marketability does not exist).

The market approach and income approach, which are valuation techniques used to estimate the fair value of financial instruments, both require significant judgment. Market approach measures fair value using either a recent transaction price that includes the financial instrument, or observable information on comparable firm or assets. Income approach measures fair value through discounting future cash flows with a discount rate reflecting market expectations, and revenue, operating income, depreciation, capital expenditures, income tax, working capital and estimated residual value of financial investments are being considered when deriving future cash flows. Valuation techniques such as the above include estimates based on the financial instruments’ complexity and usefulness of observable information in the market.

The valuation techniques used in the evaluation of financial instruments are explained below.

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Financial assets at FVTPL and Financial assets at FVTOCI

The fair value of equity securities included in financial assets at FVTPL and financial assets at FVTOCI category is recognized in the statement of financial position at its available market price. Debt securities traded in the over-the-counter market are generally recognized at an amount computed by an independent appraiser. When the Group uses the fair value determined by independent appraisers, the Group usually obtains three values from three different appraisers for each financial instrument, and selects the minimum amount without making additional adjustments. For equity securities without marketability, the Group uses the amount determined by the independent appraiser. The Group verifies the prices obtained from appraisers in various ways, including the evaluation of independent appraisers’ competency, indirect verification through comparison between appraisers’ price and other available market information, and reperformed by employees who have knowledge of valuation models and assumptions that appraisers used.

Derivatives

The Group’s transactions involving derivatives such as futures and exchange traded options are measured at market value. For exchange traded derivatives classified as level 2 in the fair value hierarchy, the fair value is estimated using internal valuation techniques. If there are no publicly available market prices because they are traded over-the-counter, fair value is measured through internal valuation techniques. When using internal valuation techniques to derive fair value, the types of derivatives, base interest rate or characteristics of prices, or stock market indices are considered. When variables used in the internal valuation techniques are not observable information in the market, such variables may contain significant estimates.

Adjustment of valuation amount

The Group is exposed to credit risk when a counterparty to a derivative contract does not perform its contractual obligation, and the exposure amount is equal to the amount of derivative asset recognized in the statement of financial position. When the Group earns income through valuation of derivatives, such income is recognized as derivative asset in the statement of financial position. Some of the derivatives are traded in the market, but most of the derivatives are measured at estimated fair value derived from internal valuation models that use observable information in the market. As such, in order to estimate the fair value there should be an adjustment made to incorporate counterparty’s credit risk, and credit risk adjustment is being considered when valuing derivative assets such as over-the counter derivatives. The amount of financial liabilities is also adjusted by the Group’s own credit risk when valuing them.

The amount of adjustment is derived from counterparty’s probability of default and loss given default. This adjustment considers contractual matters that are designed to reduce the Group’s exposure to each counterparty’s credit risk. When derivatives are under master netting arrangement, the exposure used in the computation of credit risk adjustment is a net amount after adding/deducting cash collateral received (or paid) from loss(or gain) position derivatives with the same counterparty.

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Expected credit losses on financial assets

The Group recognizes loss allowance on expected credit losses for the following assets:

Financial assets at amortized cost

Debt instruments measured at FVTOCI

Contract assets as defined by K-IFRS 1115

Expected credit losses are weighted-average value of a range of possible results, considering the time value of money, and are measured by incorporating information on current conditions and forecasts of future economic conditions that are available without undue cost or effort.

The methods to measure expected credit losses are classified into following three categories in accordance with K-IFRS:

General approach: Financial assets that does not belong to below two models and unused loan commitments

Simplified approach: When financial assets are either trade receivables, contract assets or lease receivables

Credit impairment model: Purchased or originated credit-impaired financial assets

The measurement of loss allowance under general approach is differentiated depending on whether the credit risk has increased significantly after initial recognition. That is, loss allowance is measured based on 12-month expected credit loss when the credit risk has not increased significantly after initial recognition, while loss allowance is measured at lifetime expected credit loss when credit risk has increased significantly. Lifetime is the expected remaining life of the financial instrument up to the maturity date of the contract.

The measurement of loss allowance under simplified approach is always based on lifetime expected credit loss, and loss allowance under credit impairment model is measured as the cumulative change in lifetime expected credit loss since initial recognition.

Measurement of expected credit losses on financial asset at amortized cost

The expected credit losses on financial assets at amortized cost is measured by the difference between the contractual cash flows during the period and the present value of expected cash flows. Expected cash inflows are computed for individually significant financial assets in order to calculate expected credit losses.

When financial assets that are not individually significant, they are included in a group of financial assets with similar credit risk characteristics and expected credit losses of the group are calculated collectively.

Expected credit losses are deducted through loss allowance account, and when the financial asset is determined to be uncollectible, the loss allowance is written off from the books along with the related financial asset.

Measurement of expected credit losses on financial asset at FVTOCI(Debt instruments)

The measurement method of expected credit loss is identical to financial asset at amortized cost, but changes in the loss allowance is recognized in other comprehensive income. When financial assets at FVTOCI is disposed or repaid, the related loss allowance is reclassified from accumulated other comprehensive income to net income.

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(10)	Offsetting financial instruments

Financial assets and liabilities are presented as a net amount in the statements of financial position when the Group has an enforceable legal right and an intention to settle on a net basis or to realize an asset and settle the liability simultaneously.

(11)	Investment properties

The Group classifies a property held to earn rentals and/or for capital appreciation as an investment property. Investment properties are measured initially at cost, including transaction costs, less subsequent depreciation and impairment.

Subsequent costs are included in the carrying amount of the asset or recognized as a separate asset if it is probable that future economic benefits associated with the assets will flow into the Group and the cost of an asset can be measured reliably, and the carrying amount of a portion of an asset that are replaced by a subsequent expenditure is removed from the books. Routine maintenance and repairs are expensed as incurred.

While land is not depreciated, all other investment properties are depreciated based on the depreciation method and useful lives of premises and equipment. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, and when it is deemed appropriate to change them, the effect of any change is accounted for as a change in accounting estimates.

An investment property is derecognized from the consolidated financial statements on disposal or when it is permanently withdrawn from use and no future economic benefits are expected even from its disposal. The gain or loss on the derecognition of an investment property is calculated as the difference between the net disposal proceeds and the carrying amount of the property and is recognized in profit or loss in the period of the derecognition.

(12)	Premises and equipment

Premises and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. The cost of an item of premises and equipment is expenditure directly attributable to their purchase or construction, which includes any cost directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. It also includes the initial estimate of costs of dismantling and removing the item and restoring the site on which it is located.

Subsequent costs are recognized in the carrying amount of an asset or as a separate asset (if appropriate) if it is probable that future economic benefit associated with the assets will flow into the Group and the cost of an asset can be measured reliably. Routine maintenance and repairs are expensed as incurred.

While land is not depreciated, for all other premises and equipment, depreciation is charged to net income on a straight-line basis by applying the following estimated economic useful lives on the amount of cost or revalued amount less residual value.


	Useful life
Buildings used for business purpose		26 to 57 years
Structures in leased office		4 to 5 years
Properties for business purpose		4 to 7 years

The Group reassesses the depreciation method, the estimated useful lives and residual values of premises and equipment at the end of each reporting period. If changes in the estimates are deemed appropriate, the changes are accounted for as a change in an accounting estimate. When there is an indicator of impairment and the carrying amount of a premises and equipment item exceeds the estimated recoverable amount, the carrying amount of such asset is reduced to the recoverable amount.

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(13)	Intangible assets and goodwill

The Group recognizes the acquisition cost of an intangible asset as the manufacturing cost or purchase cost plus additional incidental expenses. Development costs are the sum of expenditures incurred after the asset recognition requirements, such as technical feasibility and future economic benefits, are met. After the initial recognition, the carrying value is presented as the accumulated amortization and accumulated impairment losses deducted from the cost.

The Group’s intangible asset are amortized over the following economic lives using the straight-line method. However, for some intangible assets, the period of time that is expected to be available is not predictable, so the useful life of some intangible assets is assessed as indefinite and not depreciated.

The estimated useful life and amortization method of intangible assets with a finite useful life are reviewed at the end of each reporting period. If changes in the estimates are deemed appropriate, the changes are accounted for as a change in an accounting estimate.


	Useful life
Industrial property rights		5 to 10 years
Development costs		5 years
Software and others		1 to 10 years

In addition, when an indicator that intangible assets are impaired is noted, and the carrying amount of the asset exceeds the estimated recoverable amount of the asset, the carrying amount of the asset is reduced to its recoverable amount.

Goodwill acquired in a business combination is included in intangible assets. Goodwill is not amortized, but is subject to an impairment test at the cash-generating unit level every year, and whenever there is an indicator that goodwill is impaired.

Goodwill is allocated to each of the Group’s cash-generating unit (or groups of cash-generating units) that is expected to benefit from the synergies of the combination. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit on a pro rata basis based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

(14)	Impairment of non-monetary assets

Intangible assets with indefinite useful lives or intangible assets that are not yet available for use are tested for impairment annually, regardless of whether there is any indication of impairment. All other assets are tested for impairment by estimating the recoverable amount when there is an objective indication that the carrying amount may not be recoverable. Recoverable amount is the higher of value in use or net fair value, less costs to sell. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and such impairment loss is recognized immediately in net income.

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(15)

Leases

The Group determines whether the contract is a lease or includes a lease at the time of the contract agreement. In exchange for consideration in a contract, the contract is either a lease or includes a lease if the control over the use of the identified asset is transferred for a period of time. In determining whether a contract transfers control over the use of the asset to which it is identified, the Group uses the definition of lease in K-IFRS 1116.

①

The Group as a lessee

The Group recognizes the right-of-use asset and the lease liability at the commencement date of the lease. The right-of-use asset is measured at cost, which comprises the amount of the initial measurement of the lease liability, lease payments made at or before the commencement date(less any lease incentives received), initial direct costs, and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located.

The right-of-use asset is subsequently depreciated on a straight-line basis from the commencement of the lease to the end of the lease term. However, if the lease transfers ownership of the underlying asset to the lessee by the end of the lease term or if the cost of the right-of-use asset reflects that the lessee will exercise a purchase option, the lessee depreciates the right-of-use asset same as a fixed asset from the commencement date to the end of the useful life of the underlying asset. The right-of-use asset may be reduced by an impairment of the underlying asset or adjusted by 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. The lease payments are discounted using the interest rate implicit in the lease, if that cannot be readily determined, the Group uses its incremental borrowing rate. The Group generally uses the incremental borrowing rate.

The Group makes adjustments to reflect the terms of the lease and the characteristics of the lease asset in interest rates obtained from external financial information, and calculates the incremental borrowing rate.

The Group calculates the lease term by including the relevant period when it is quite certain that the lessee will exercise the extension option or the termination option. The Group calculates the enforceable period in consideration of the economic disadvantages of terminating the contract if the lessee and the lessor have the right to terminate it without the consent of the other parties.

The lease payments included in the measurement of the lease liability comprise the following:

Fixed payments (including in-substance fixed payments)

Variable lease payments that depend on an index(or a rate), initially measured using the index or a rate as at the commencement date

Amounts expected to be payable by the lessee under residual value guarantees

The exercise price of a purchase option if the lessee is reasonably certain to exercise that option, lease payments of the extended period if the lessee is reasonably certain to exercise extension option, and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease

The lease liability is subsequently increased be the interest expense recognized for the lease liability and decreased by reflecting the payment of the lease payments. The lease liability is remeasured if the future lease payments change depending on changes in the index(or a rate), changes in the expected amount to be paid under the residual value guarantee, and changes in the assessment of whether the purchase or extension option is reasonably certain to be exercised or not to exercise the terminate option.

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When remeasuring a lease liability, the related right-of-use asset is adjusted and if the carrying amount of the right-of-use asset decreases to zero, the remeasurement amount is recognized in profit or loss.

The Group applies its judgment when determining the lease term for some lease contracts that include the extension option. The assessment of whether the Group is reasonably certain to exercise the option significantly affects the lease term and therefore has a significant impact on the amount of lease liabilities and the right-of-use asset.

Because the Group can replace the asset without significant cost or business discontinuation, the option to extend the lease is not included in the lease liability in most offices and vehicle transport leases.

The Group reevaluates the lease term when the option is exercised (or not exercised) or the Group is liable to exercise (or not exercise) the option. Group will change its judgment only when significant events occur that affect the lessee’s control and the determination of the lease term, or there is a significant change in the circumstances.

Lease liabilities and right-of-use-asset increased by 1,650 million won, reflecting the exercise impact of the extension and termination options during the current term.

In the statement of financial position, the Group classified the right-of-use assets that do not meet the definition of investment property as ‘premises and equipment’ and the lease liabilities as ‘other financial liabilities.’

The Group has chosen a practical expedient that does not recognize the right-of-use asset and lease liabilities for short-term leases with a lease term less than 12 months and leases for which the underlying asset is of low value. The Group recognizes the lease payments associated with those leases as an expense on a straight-line basis over the lease term.

②

The Group as a lessor

At the date of the agreement or the effective date of the modification containing the lease element, the Group allocates the consideration of the contract to each lease element based on its relative stand-alone price.

As a lessor, the Group classifies its leases as either a finance lease or an operating lease at the commencement date.

The Group subsequently judges whether the lease transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset, otherwise a lease is classified as an operating lease.

If the agreement contains both lease and non-lease elements, the Group applies K-IFRS 1115 to allocate the consideration of the contract.

The Group applies the derecognition and impairment provisions of K-IFRS 1109 to its net investment in the lease. The Group also carries out regular review of the unguaranteed residual value used to calculate total lease investment.

The Group recognizes lease payments from operating lease as income on a straight-line basis.

The accounting policy that the Group has applied as a lessor is not different from K-IFRS 1116.

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(16)	Derivative instruments

Derivative instruments are classified as forwards, futures, options and swaps, depending on the types of transactions and are classified at the point of transaction as either trading or hedging based on its purpose.

Derivatives are initially recognized at fair value at the date of contract and are subsequently measured at fair value at the end of each reporting period. The resulting gain or loss is recognized in net income immediately unless the derivative is designated or effective as a hedging instrument. If derivatives have been designated as hedging instruments and if it is effective, the point of recognition of gain or loss depends on the characteristics of hedging relationship.

Derivatives that have positive (+) fair values are recognized as financial assets and those that have negative (-) fair values are recognized as financial liabilities. Derivatives are not offset in the consolidated financial statements unless they have legally enforceable right to set off or are intended to set off.

Embedded derivatives

Embedded derivatives are components of a hybrid financial instrument that includes a non-derivative host contract. It has an effect of modifying part of cash flows of the hybrid financial instrument similar to an independent derivative.

Embedded derivatives that are part of a hybrid contract of which the host contract is a financial asset within the scope of K-IFRS 1109 are not separated. The classification is done by considering the hybrid contract as a whole, and subsequent measurement is either at amortized cost or fair value.

If embedded derivatives are part of a hybrid contract of which the host contract is not a financial asset within the scope of K-IFRS 1109 (e.g. financial liability), then these are treated as separate derivatives if embedded derivatives meet the definition of a derivative, characteristics & risk of the embedded derivatives are not closely related to that of host contract, and if the host contract is not measured at FVTPL.

Hedge accounting

The Group is applying K-IFRS 1109 in regard to hedge accounting. The Group is designating certain derivatives as hedging instrument against fair value changes in relation to the interest rate risk, foreign currency translation and interest rate risk, and foreign currency translation risk.

The Group is documenting the relationship between hedging instruments and hedged items at the commencement of hedging in accordance with their purpose and strategy. Also, the Group documents at the commencement and subsequent dates whether the hedging instrument effectively counters the changes in fair value of hedged items. A hedging instrument is effective only when it meets all the following criteria:

When there is an economic relationship between the hedged items and hedging instruments

When the effect of credit risk is not stronger than the change in value due to the economic relationship between the hedged items and hedging instruments

When the hedge ratio of hedging relationship is equal to the proportion of the number of items that the group actually hedges and the number of hedging instruments that the Group actually uses to hedge the number of hedged items

When a hedging relationship no longer meets the hedging effectiveness requirements related to hedge ratio, but when the purpose of risk management on designated hedging relationship is still maintained, the hedge ratio of the hedging relationship is adjusted so that hedging relationship may meet the requirements again (Hedge ratio readjustment).

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The Group has designated derivatives as hedging instrument except for the portion on foreign currency basis spread. The fair value change due to foreign currency basis spread is recognized in other comprehensive income and is accumulated in equity. If the hedged item is related to transactions, the accumulated other comprehensive income is reclassified to profit or loss when the hedged item affects the profit or loss. However, when non-monetary items are subsequently recognized due to hedged items, the accumulated equity is removed from the equity directly, and is included in the initial carrying amount of the recognized non-monetary items. Such transfers does not affect other comprehensive income. But if part or all of accumulated equity is not expected to be recovered in the future periods, the amount not expected to be recovered is immediately reclassified to profit or loss. If the hedged item is time-related, then the foreign currency basis spread on the day the derivative is designated as a hedging instrument that is related to the hedged item is reclassified to profit or loss over the term of the hedge.

Fair value hedge

Gain or loss arising from valid hedging instrument is recognized in profit or loss. However, when the hedging instrument mitigates risks on equity instruments designated as financial assets at FVTOCI, related gain or loss is recognized in other comprehensive income.

The carrying amount of hedged items that are not measured in fair value is adjusted by the changes in fair value arising from the hedged risk, with resulting gain or loss reflected in net income. In case of debt instruments measured at FVTOCI, carrying amount is an amount that is already adjusted to fair value and thus gain or loss arising from the hedged risk is recognized in profit or loss instead of other comprehensive income without adjustments in carrying amount. When the hedged item is equity instruments measured at FVTOCI, the gain or loss arising from hedged risk is retained at other comprehensive income in order to match the gain or loss with hedging instruments.

When gains or losses arising from the hedged risk are recognized in profit or loss of the current term, they are recognized as items related to the hedged items.

Cash flow hedge

The Group recognizes the effective portion of changes in the fair value of derivatives and other valid hedging instruments that are designated and qualified as cash flow hedges in other comprehensive income to the extent of cumulative fair value changes of the hedged item from the starting date of hedge accounting and it is cumulated in the cash flow hedge reserve. The gain or loss relating to the ineffective portion is recognized immediately in net income.

Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to net income when the hedged item affects net income. However, when non-monetary assets or liabilities are subsequently recognized due to expected transactions involving hedged items, the valuation gain or loss accumulated in the equity as other comprehensive income is removed from the equity and included in the initial carrying amount of the recognized non-monetary assets or liabilities. Such transfers does not affect other comprehensive income. Also, if the cash flow hedge reserve is loss and accumulated other comprehensive income is a loss and part or all of the losses are not expected to be recovered in the future periods, the said amount is immediately reclassified to profit or loss.

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Hedge accounting ceases to apply only when hedging relationship (or part of it) does not meet the requirements of hedge accounting (even after hedging relationship readjustment, if applicable). This treatment holds in case of lapse, disposal, expiry and exercise of hedging instruments, and this cease of treatment applies prospectively. At the point of cessation of cash flow hedge, the valuation gain or loss recognized as accumulated other comprehensive income continues to be recognized as equity, and is reclassified to profit or loss when the expected transaction is ultimately recognized as profit or loss. However, when transactions are no longer expected to occur, the valuation gain or loss of hedging instrument recognized as accumulated other comprehensive income is immediately reclassified to profit or loss.

(17)	Assets (or disposal group) held for sale

The Group classifies a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.

(18)	Provisions

Provisions are recognized if it has present or contractual obligations as a result of the past event, it is probable that an outflow of resources will be required to settle the obligation and the amount of the obligation is reliably estimated. A provision is not recognized for the future operating losses.

The Group recognizes provisions related to the payment guarantees, loan commitment and litigations. Under the terms of lease agreement, the cost incurred by the Group to recover the leased asset to its original state are recognized as provisions at the commencement of the lease or during a specific period in which the obligation is incurred as a result of the using the asset. The provisions are measured as the best estimate of the expenditure required to recover the asset, which is regularly reviewed and sated to the new situation.

Where there are a number of similar obligations, the probability that an outflow will be required in settlement is determined by considering the obligations as a whole. Although the likelihood of outflow for any one item may be small, if it is probable that some outflow of resources will be needed to settle the obligations as a whole, a provision is recognized.

At the end of each reporting period, the remaining provision balance is reviewed an assessed to determine if the current best estimate is being recognized.

(19)	Equity instruments issued by the Group

Capital and compound financial instruments

The Group classifies a financial instrument that it issues as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement. A financial liability is a contractual obligation to deliver cash or another financial asset to another entity. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The compound financial instruments are financial instruments where it is neither a financial liability nor an equity instrument because it was designed to contain both equity and debt elements.

If the Group reacquires its own equity instruments, the consideration paid including the direct transaction costs (net of tax expense) are presented as a deduction from total equity until such instruments are retired or reissued. When these instruments are reissued, the consideration received (net of direct transaction costs) is included in the shareholder’s equity.

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Hybrid securities

The Group classifies hybrid securities that have the unconditional right to avoid contractual obligations, such as to deliver cash or other financial assets in relation to financial instruments into equity instruments and presents as part of equity. Meanwhile, hybrid securities issued by subsidiaries of the group are classified as non-controlling interests according to the criteria, and the distribution paid is treated as net profit attributable to non-controlling interests in the consolidated comprehensive income statement.

(20)	Financial guarantee contracts

A financial guarantee contract is a contract where the issuer must pay a certain amount of money in order to compensate losses suffered by the creditor when debtor defaults on a debt instrument in accordance with original or modified contractual terms.

A financial guarantee is initially measured at fair value and is subsequently measured at the higher of the amounts below unless it is designated to be measured at FVTPL or when it arises from disposal of an asset.

-	Loss allowance in accordance with K-IFRS 1109

-	Initial carrying amount less accumulated profit measured in accordance with K-IFRS 1115

(21)	Employee benefits and pensions

The Group recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by the employees. Also, the Group recognizes expenses and liabilities in the case of accumulating compensated absences when the employees render services that entitle their right to future compensated absences. Similarly, the Group recognizes expenses and liabilities for customary profit distribution or bonuses when the employees render services, even though the Group does not have legal obligation to do so because it can be construed as constructive obligation.

The Group is operating defined contribution plans and defined benefit plans. Contributions to defined contribution plans are recognized as an expense when employees have rendered services entitling them to receive the benefits. For defined benefit plans, the defined benefit liability is calculated through an actuarial assessment using the projected unit credit method every end of the reporting period, conducted by a professional actuaries. Remeasurement, comprising actuarial gains and losses, the return on plan assets (excluding the amount included in net interest from net defined benefit liability (asset)), and the effect of the changes to the asset ceiling is reflected immediately in the separate statement of financial position with a charge or credit recognized in other comprehensive income in the period in which they occur.

Remeasurement recognized in the consolidated statement of comprehensive income is not reclassified to profit or loss in the subsequent periods. Past service cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are composed of service cost (including current service cost and past service cost, as well as gains and losses on settlements), net interest expense (income) and remeasurement.

The Group presents the service cost and net interest expense (income) components in profit or loss, and the remeasurement component in other comprehensive income. Curtailment gains and losses are accounted for as past service costs.

The retirement benefit obligation recognized in the consolidated statement of financial position represents the actual deficit or surplus in the Group’s defined benefit plans. Any surplus resulting from this calculation is recognized as an asset limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

Liabilities for termination benefits are recognized at the earlier of either the date when the Group is no longer able to cancel its proposal for termination benefits or the date when the Group has recognized the cost of restructuring that accompanies the payment of termination benefits.

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(22)	Income taxes

Income tax expense is composed of current tax and deferred tax. That is, income tax expense is composed of taxes payable or refundable during the period and deferred taxes calculated by applying asset-liability method to taxable and deductible temporary differences arising from operating loss and tax credit carryforwards. Temporary differences are the differences between the carrying values of assets and liabilities for financial reporting purposes and their tax bases. Deferred income tax benefit or expense is recognized for the change in deferred tax assets or liabilities. Deferred tax assets and liabilities are measured as of the reporting date using the enacted or substantively enacted tax rates expected to apply in the period in which the liability is settled or asset is realized. Deferred tax assets, including the carryforwards of unused tax losses, are recognized to the extent it is probable that the deferred tax assets will be realized.

Deferred income tax assets and liabilities are offset if, and only if, the Group has a legally enforceable right to offset current tax assets against current tax liabilities, and the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority or when the entity intends to settle current tax liabilities and assets on a net basis with different taxable entities.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill. Deferred tax assets or liabilities are not recognized if they arise from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit(tax loss) nor the accounting profit.

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity or when it arises from business combination.

The tax uncertainty arises from the compensation claim filed by the Group, and refund litigation for the amount of tax levied by the tax authority due to differences in tax law analysis. In response, the Group paid taxes in accordance with K-IFRS 2123 due to the tax authority’s claim, but recognized as a corporate tax asset if it is highly probable of a refund in the future. In addition, the Group appropriately estimates and reflects the amount of corporate tax liabilities based on the analysis of corporate tax laws and the evaluation of many factors, including past experiences.

(23)	Criteria of calculating earnings per share (“EPS”)

Basic EPS is a calculation of net income per each common stock. It is calculated by dividing net income attributable to ordinary shareholders by the weighted-average number of common shares outstanding. Diluted EPS is calculated by adjusting the earnings and number of shares for the effects of all dilutive potential common shares.

(24)	Share-based payment

For cash-settled share-based payment transactions that provide cash in return for the goods or services received, the Group measures the goods or services received, and the corresponding liability at the fair value and recognizes as employee benefit expenses and liabilities during the vesting period. The fair value of the liability is remeasured at the end of each reporting period and the settlement date until the liability is settled, and changes in fair value are recognized as employee benefits.

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3.	SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS

Significant accounting estimates and assumptions are continuously evaluated based on a number of factors, including historical experience and expectations of future events that are considered reasonably probable. Accounting estimates calculated based on these definitions may not match actual results. The accounting estimates and assumptions that include a significant risk of materially changing the carrying amounts of assets and liabilities currently recognized in the following accounting period are as follows.

1)	COVID-19 effect review

The diffusion of COVID-19 has had a significant impact on the global economy including Korea. Financial and economic shocks may have negative impacts on the Group’s financial condition and results of operations in various forms both domestically and internationally, however, the Korean government is providing unprecedented financial and economic relief measures such as extension of maturity of loans. Despite the announcement of these various forms of government support policies, the negative impact of the COVID-19 on the global economy continues.

The Group determined that the credit risk of loan affected by the loan deferment has significantly increased and evaluated that the possibility of default is high. The Group will continue to assess the adequacy of forward-looking information related to the duration of the impact of COVID-19 on economy and government policies.

Woori Bank’s total loans (loan receivables, payment guarantees) that are subject to loan deferment and interest deferment, total loans that changed its stage from 12-month to lifetime expected credit losses (Stage 2), and the expected credit loss allowances recognized additionally are as follows. (Unit: Korean Won in millions):


		December 31, 2022		December 31, 2021
Total loans (loan receivables, payment guarantees) that are subject to loan deferment and interest deferment.	Corporate		1,960,524		2,428,496
	Retail		216,487		167,146
	Total		2,177,011		2,595,642
Total loans changed its stage from 12-month to lifetime (Stage 2) expected credit losses.	Corporate		1,777,108		2,125,492
	Retail		169,851		134,920
	Total		1,946,959		2,260,412
The expected credit loss allowances that are additionally recognized.	Corporate		312,371		275,057
	Retail		12,643		9,657
	Total		325,014		284,714

In addition, as of December 31, 2022 and 2021, the Group applied the overlay in consideration of the potential for insolvency due to market interest rate hikes and the increase in economic uncertainty due to the prolonged spread of COVID-19 when forecasting the future economy.

As of December 31, 2022 and 2021, the monetary effect of the provision for expected credit loss due to the application of the forecast of future economic conditions overlay is as follows. (Unit: Korean Won in millions):


	December 31, 2022		December 31, 2021
Corporate		347,801		48,583
Retail		16,256		6,237
Total		364,057		54,820

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Woori Card Co., Ltd. determined that the credit risk of obligors receiving financial support due to COVID-19 significantly increased, and transferred the loss allowance at the amount equivalent to lifetime expected credit loss. As of December 31, 2022, the balance of amortised cost of a financial asset of the obligors who need financial support amounts to 6,670 million won, and the additional provisioned loss allowance is 177 million won.

Woori Financial Capital Co., Ltd. determined that the credit risk of obligors receiving financial support due to COVID-19 significantly increased, and evaluated that the possibility of default is high. As a result, as of December 31, 2022 and 2021, the amortized cost of a financial asset of the obligors subject to the deferment of redemption and interest deferment due to COVID-19 amounts to 52,611 million won and 80,291 million won, and the expected credit loss provisions recognized in relation to them are 10,606 million won and 15,575 million won.

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2)	Income taxes

The Group has recognized current and deferred taxes based on best estimates of expected future income tax effect arising from the Group’s operations until the end of the current reporting period. However, actual tax payment may not be identical to the related assets/liabilities already recognized, and these differences may affect current taxes and deferred tax assets/liabilities at the time when income tax effects are finalized. Deferred tax assets relating to tax losses carried forward and deductible temporary differences are recognized only to the extent that it is probable that future taxable profit will be available against which the tax losses carried forward and the deductible temporary differences can be utilized. In this case the Group’s evaluation considers various factors such as estimated future taxable profit based on forecasted operating results, which are based on historical financial performance. The Group is reviewing the carrying amount of deferred tax assets every end of the reporting period and in the event that the possibility of earning future taxable income changes, the deferred tax assets are adjusted up to taxable income sufficient to use deductible temporary differences.

3)	Valuation of financial instruments

Financial assets at FVTPL and FVTOCI are recognized in the consolidated financial statements at fair value. All derivatives are measured at fair value. Valuation techniques are required in order to determine fair values of financial instruments where observable market prices do not exist. Financial instruments that are not actively traded and have low price transparency will have less objective fair value and require broad judgment in liquidity, concentration, uncertainty in market factors and assumption in price determination and other risks.

As described in ‘2. Basis of Preparation and Significant Accounting Policies (9) 5) Fair value of financial instruments’, when valuation techniques are used to determine the fair value of a financial instrument, various general and internally developed techniques are used, and various types of assumptions and variables are incorporated during the process.

4)	Impairment of financial instruments

The accuracy of the provision for credit losses is determined by the estimation of the expected cash flows for each tenant for estimating the individually assessed loan-loss allowance, and the assumptions and variables in the model used for estimating the collectively assessed loan-loss allowance payment, guarantee and unused commitment.

The Group has estimated the allowance for credit losses based on reasonable and supportable information that was available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

Information on measuring expected credit loss is described in 4. Risk Management (1) 2) Measurement of expected credit loss.

5)	Defined benefit plan

The Group operates a defined benefit pension plan. Defined benefit obligation is calculated at every end of the reporting period by performing actuarial valuation, and estimation of assumptions such as discount rate, expected wage growth rate and mortality rate is required to perform such actuarial valuation. The defined benefit plan, due to its long-term nature, contains significant uncertainties in its estimates.

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4.	RISK MANAGEMENT

The Group is exposed to various risks that may arise from its operating activities and the main types of risks are credit risk, market risk, liquidity risk and etc. The Risk Management Department analyze and assess the level of complex risks in order to manage the risks and the risk management standards such as policies, regulations, management systems and decision-making have been established and operated for sound management of the Group.

The risk management organization is operated by Risk Management Committee, Chief Risk Officer(CRO), and Risk Management Department. The Board of Directors operates a Risk Management Committee comprised of outside directors for professional risk management. The Risk Management Committee plays a role as the top decision-making body in risk management by establishing basic policies for risk management that are in line with the Group’s management strategy and determining the risk level that the Group is willing to take.

The Chief Risk Officer (CRO) assists the Risk Management Committee and operates a Group Risk Management Council comprised of risk management managers of subsidiaries to periodically check and improve the risk burden of external environments and the Group. The risk management department is independent and is in charge of risk management of the Group. It also supports reporting and decision-making of key risk-related issues.

(1)	Credit risk

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

Credit risk management

To measure credit risk, 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 rating, other than quantitative methods utilizing financial statements and others, and assessor’s judgement, the Group utilizes credit rating derived using statistical methods.

In order to manage credit risk limit, the Group establishes the appropriate credit line per obligor, company or industry by monitoring 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 purchase of credit derivatives that have low correlation with the obligor’s credit status. The Group has adopted the entrapment method to mitigate its credit risk. Credit risk mitigation is reflected in qualifying financial collateral, trade receivables, guarantees, residential and commercial real estate and other collaterals. The Group regularly performs a revaluation of collateral reflecting such credit risk mitigation.

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Measurement of expected credit loss

K-IFRS 1109 requires entities to measure loss allowance equal to 12-month expected credit losses or lifetime expected credit losses after classifying financial assets into one of the three stages, depends on the degree of increase in credit risk since their initial recognition.


Classification	Stage 1	Stage 2	Stage 3
Definition	No significant increase in credit risk after initial recognition (*)	Significant increase in credit risk after initial recognition	Credit-impaired

Loss allowance	12-month expected credit losses:	Lifetime expected credit losses:
Loss allowance	Expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date	Expected credit losses that result from all possible default events over the life of the financial instrument

(*)

If the financial instrument has low credit risk at the end of the reporting period, the Group may assume that the credit risk has not increased significantly since initial recognition.

Loss allowance under credit impairment model is measured as the cumulative change in lifetime expected credit loss since initial recognition.

At the end of each reporting period the Group assesses whether credit risk has significantly been increased since the date of initial recognition. The Group assesses whether the credit risk has increased significantly since initial recognition by using credit rating, asset quality level, early warning system, days past due and others. For financial assets whose contractual cash flows have been modified, the Group assesses whether there is a significant increase in credit risk on the same basis.

The Group performs the below assessment to both corporate and retail exposures, and indicators of significant increase in credit risk are as follows:


Corporate Exposures		Retail Exposures
Asset quality level ‘Precautionary’ or lower		Asset quality level ‘Precautionary’ or lower
More than 30 days past due		More than 30 days past due
‘Warning’ level in early warning system		Significant decrease in credit rating(*)
Debtor experiencing financial difficulties (Capital impairment, Adverse opinion or Disclaimer of opinion by external auditors)		Deferment of repayment of principal and interest
Significant decrease in credit rating (*)		Deferment of interest
Deferment of repayment of principal and interest
Deferment of interest

(*)

The Group has applied the below indicators of significant decrease in credit rating since initial recognition as follows, and the estimation method is regularly being monitored


	Credit rating	Significant increased indicator of the credit rating
Corporate	AAA ~ A+	More than or equal to 4 steps
	A- ~ BBB	More than or equal to 3 steps
	BBB- ~ BB+	More than or equal to 2 steps
	BB ~ BB-	More than or equal to 1 step
Retail	1 ~ 3	More than or equal to 3 steps
	4 ~ 5	More than or equal to 2 steps
	6 ~ 10	More than or equal to 1 step

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The Group determined that there is no significant increase in credit risk after initial recognition for debt securities, etc. with a credit rating of A + or higher, which are deemed to have low credit risk at the end of the reporting period.

The Group concludes that credit is impaired when financial assets are under conditions stated below:

When principal and interest of loan is overdue for 90 days or longer due to significant deterioration in credit

For loans overdue for less than 90 days, when it is determined that not even a portion of the loan will be recovered unless claim actions such as disposal of collaterals are taken

When other objective indicators of impairment have been noted for the financial asset.

The Group has estimated the allowance for credit losses using an estimation model that additionally reflects the future economic forward information based on the past experience loss rate data.

Loss allowance is calculated by applying PD (default rate) and LGD (loss rate on default) estimated for each financial asset in consideration of factors such as obligor type, credit rating and portfolio. The estimates are regularly being reviewed in order to reduce discrepancies with actual losses.

In measuring the expected credit losses, the Group is also using reasonable and supportable macroeconomic indicators such as GDP growth rate, Personal consumption expenditures increase/decrease rate, consumer price index change rate in order to forecast future economic conditions.

The Group is conducting the following procedures to estimate and apply future economic forecast information.

Development of estimation models through regression analysis of corporate retail/year-by-year default rate and macroeconomic indicator data by year

Calculation of estimated default rate incorporating future economic forecasts by applying estimated macroeconomic indicators provided by verified institutions such as Bank of Korea and National Assembly Budget Office to the estimation model developed

Forecast of macroeconomic variables

Probability weight

As of December 31, 2022, the probability weights applied to the scenarios of the forecasts of macroeconomic variables is as follows (Unit: %):


	Basic Scenario		Upside Scenario		Downside Scenario
Probability weight		52.57		12.52		34.91

Economic forecast of each major macroeconomic variables by scenario (prospect period: 2023)

As of December 31, 2022, the forecasts of major macroeconomic variables by scenario is as follows (Unit: %)

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	Basic Scenario		Upside Scenario		Downside Scenario
GDP growth rate		1.70		1.89		1.36
Personal consumption expenditures increase/decrease rate		2.70		3.11		1.97
Consumer price index change rate		3.60		3.39		3.97

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The results of Woori Bank’s sensitivity analysis on expected credit loss provisions due to changes in macroeconomic indicators as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


			December 31, 2022
Corporate	Personal consumption expenditures increase/decrease rate	Increase by 1% point		(59,987	)
		Decrease by 1% point		68,036
Retail	Consumer price index change rate	Increase by 1% point		(24,164	)
		Decrease by 1% point		28,042


			December 31, 2021
Corporate	GDP growth rate	Increase by 1% point		(68,140	)
		Decrease by 1% point		74,495
	Personal consumption expenditures increase/decrease rate	Increase by 1% point		(40,654	)
		Decrease by 1% point		43,028
Retail	GDP growth rate	Increase by 1% point		(8,798	)
		Decrease by 1% point		9,163
	Consumer price index change rate	Increase by 1% point		(29,469	)
		Decrease by 1% point		34,352

(*)	The sensitivity of the effect of the GDP growth rate on banks’ ECLs is not significant.

The increase rate between the measured default rate and the predicted default rate is used as a future economic forecast adjustment coefficient and reflected to the applicable estimate for the current year.

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Maximum exposure

The Group’s maximum exposure to credit risk shows the uncertainties related to the maximum possible variation of financial assets’ net value as a result of changes in the specific risk factors, prior to the consideration of collaterals that are recorded at net carrying amount after allowances and other credit enhancements. However, the maximum exposure is the fair value amount (recorded on the books) for derivatives, maximum contractual obligation for payment guarantees and unused amount of commitments for loan commitment.

The maximum exposure to credit risk as of December 31, 2022 and 2021 is as follows (Unit: Korean Won in millions):


		December 31, 2022		December 31, 2021
Loans and other financial assets at amortized cost (*1)	Korean treasury and government agencies		2,877,685		2,207,893
	Banks		21,571,097		24,412,685
	Corporates		143,507,852		131,027,256
	Consumers		187,804,095		191,237,783

	Sub-total		355,760,729		348,885,617

Financial assets at FVTPL (*2)	Deposits		34,995		65,072
	Debt securities		4,270,532		2,743,239
	Loans		899,228		667,467
	Derivative assets		8,206,181		4,803,131
	Others		1,505		1,518

	Sub-total		13,412,441		8,280,427

Financial assets at FVTOCI	Debt securities		32,145,758		38,126,977
Securities at amortized cost	Debt securities		28,268,516		17,086,274
Derivative assets	Derivative assets (Designated for hedging)		37,786		106,764
Off-balance accounts	Payment guarantees (*3)		11,921,586		12,987,809
	Loan commitments		118,172,070		114,414,462

	Sub-total		130,093,656		127,402,271

Total			559,718,886		539,888,330

(*1)	Cash and cash equivalents are not included.

(*2)	Puttable financial instruments are not included.

(*3)	As of December 31, 2022 and 2021, the financial guarantee amount of 3,095,091 million won and 3,960,383 million won are included, respectively.

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Credit risk exposure by geographical areas

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


	December 31, 2022
	Korea		China		USA		UK		Japan		Others (*)		Total
Loans and other financial assets at amortized cost		331,572,328		5,188,826		4,721,440		215,174		719,301		13,343,660		355,760,729
Securities at amortized cost		26,883,967		642,089		421,248		16,658		—		304,554		28,268,516
Financial assets at FVTPL		9,272,673		2,607		2,210,580		318,322		168,013		1,440,246		13,412,441
Financial assets at FVTOCI		27,780,323		806,320		2,297,076		1,726		41,421		1,218,892		32,145,758
Derivative assets (Designated for hedging)		37,786		—		—		—		—		—		37,786
Off-balance accounts		126,531,020		981,139		380,209		25,644		16,987		2,158,657		130,093,656

Total		522,078,097		7,620,981		10,030,553		577,524		945,722		18,466,009		559,718,886

(*)	Others consist of financial assets in Indonesia, Hong Kong, Germany, Australia, and other countries.


	December 31, 2021
	Korea		China		USA		UK		Japan		Others (*)		Total
Loans and other financial assets at amortized cost		325,947,526		5,620,622		3,742,331		212,821		635,939		12,726,378		348,885,617
Securities at amortized cost		16,785,265		92,880		27,018		—		—		181,111		17,086,274
Financial assets at FVTPL		6,150,464		1,330		1,188,358		195,048		61,315		683,912		8,280,427
Financial assets at FVTOCI		34,242,133		808,359		1,713,435		1,755		23,193		1,338,102		38,126,977
Derivative assets (Designated for hedging)		11,678		—		95,086		—		—		—		106,764
Off-balance accounts		123,375,839		1,001,430		375,929		31,116		32,402		2,585,555		127,402,271

Total		506,512,905		7,524,621		7,142,157		440,740		752,849		17,515,058		539,888,330

(*)	Others consist of financial assets in Indonesia, Hong Kong, Germany, Australia, and other countries.

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Credit risk exposure by industries

①

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 as of December 31, 2022 and 2021 (Unit: Korean Won in millions):


	December 31, 2022
	Service		Manufacturing		Finance and insurance		Construction		Individuals		Others		Total
Loans and other financial assets at amortized cost		78,173,716		37,013,486		31,485,795		5,613,480		183,167,572		20,306,680		355,760,729
Securities at amortized cost		239,141		—		16,198,175		199,924		—		11,631,276		28,268,516
Financial assets at FVTPL		200,678		184,019		9,776,234		51,244		1,167		3,199,099		13,412,441
Financial assets at FVTOCI		417,877		231,132		22,249,839		48,225		—		9,198,685		32,145,758
Derivative assets (Designated for hedging)		—		—		37,786		—		—		—		37,786
Off-balance accounts		18,661,383		22,492,863		10,523,731		3,143,673		69,404,456		5,867,550		130,093,656

Total		97,692,795		59,921,500		90,271,560		9,056,546		252,573,195		50,203,290		559,718,886


	December 31, 2021
	Service		Manufacturing		Finance and insurance		Construction		Individuals		Others		Total
Loans and other financial assets at amortized cost		67,895,018		37,679,784		32,493,347		4,303,491		185,972,844		20,541,133		348,885,617
Securities at amortized cost		479,291		—		7,061,770		250,607		—		9,294,606		17,086,274
Financial assets at FVTPL		115,346		146,277		6,646,922		13,623		1,836		1,356,423		8,280,427
Financial assets at FVTOCI		376,998		258,866		29,444,989		131,967		—		7,914,157		38,126,977
Derivative assets (Designated for hedging)		—		—		79,369		27,395		—		—		106,764
Off-balance accounts		18,565,570		18,994,662		11,763,667		3,900,766		67,966,826		6,210,780		127,402,271

Total		87,432,223		57,079,589		87,490,064		8,627,849		253,941,506		45,317,099		539,888,330

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②

The detailed industries of financial assets and corporate loans that might get affected by the spread of COVID-19 as of December 31, 2022 and 2021 are as follow and the industries that can be affected may change by future economic conditions. (Unit: Korean Won in millions):

< Woori Bank >


			December 31, 2022
			Loans and other financial assets at amortized cost	Financial assets at FVTPL	Financial assets at FVTOCI
Service business	Distribution business	General retail business	1,157,537	824	6,296
		General wholesale business	1,801,361	1,659	—
		Sub-total	2,958,898	2,483	6,296
	Accommodation business		1,434,456	2,228	24,121
	Travel business		48,655	—	—
	Art/sports, leisure service		1,780,739	1,012	—
	Food business		1,520,098	426	—
	Transportation business		357,940	181	—
	Education Business		425,779	169	—
	Others		1,560,457	773	—
	Sub-total		10,087,022	7,272	30,417
Manufacturing	Textile		2,361,092	767	8,898
	Metal		1,579,004	191	—
	Non-metal		796,671	1,529	7,629
	Chemical		3,649,189	158	—
	Electronics		1,409,475	58	—
	Others		3,280,434	1,287	11,452
	Sub-total		13,075,865	3,990	27,979

	Total		23,162,887	11,262	58,396


			December 31, 2022
			Off-balance accounts	Total
Service business	Distribution business	General retail business	496,830	1,661,487
		General wholesale business	533,368	2,336,388
		Sub-total	1,030,198	3,997,875
	Accommodation business		161,573	1,622,378
	Travel business		16,369	65,024
	Art/sports, leisure service		104,065	1,885,816
	Food business		179,977	1,700,501
	Transportation business		248,801	606,922
	Education Business		40,891	466,839
	Others		301,343	1,862,573
	Sub-total		2,083,217	12,207,928
Manufacturing	Textile		1,076,002	3,446,759
	Metal		1,225,601	2,804,796
	Non-metal		381,014	1,186,843
	Chemical		3,627,183	7,276,530
	Electronics		1,202,758	2,612,291
	Others		2,530,964	5,824,137
	Sub-total		10,043,522	23,151,356

	Total		12,126,739	35,359,284

- 67 -


			December 31, 2021
			Loans and other financial assets at amortized cost	Financial assets at FVTPL	Financial assets at FVTOCI
Service business	Distribution business	General retail business	754,850	274	—
		General wholesale business	809,893	221	—
		Sub-total	1,564,743	495	—
	Accommodation business		1,441,185	625	23,840
	Travel business		53,302	—	—
	Art/sports, leisure service		600,746	503	—
	Food business		1,279,128	216	—
	Transportation business		404,120	77	—
	Others		1,050,229	599	—
	Sub-total		6,393,453	2,515	23,840
Manufacturing	Textile		2,626,493	724	10,718
	Metal		199,877	10	—
	Non-metal		148,471	24	—
	Chemical		904,563	1,994	—
	Electronics		103,510	31	—
	Others		191,865	—	—

	Sub-total		4,174,779	2,783	10,718

	Total		10,568,232	5,298	34,558


			December 31, 2021
			Off-balance accounts	Total
Service business	Distribution business	General retail business	299,064	1,054,188
		General wholesale business	237,678	1,047,792
		Sub-total	536,742	2,101,980
	Accommodation business		181,563	1,647,213
	Travel business		12,455	65,757
	Art/sports, leisure service		63,660	664,909
	Food business		179,799	1,459,143
	Transportation business		167,883	572,080
	Others		191,837	1,242,665
	Sub-total		1,333,939	7,753,747
Manufacturing	Textile		1,012,989	3,650,924
	Metal		9,704	209,591
	Non-metal		48,171	196,666
	Chemical		689,895	1,596,452
	Electronics		33,389	136,930
	Others		87,587	279,452
	Sub-total		1,881,735	6,070,015

	Total		3,215,674	13,823,762

- 68 -

< Woori Card Co., Ltd. >


	December 31, 2022
	Loans and other financial assets at amortized cost		Financial assets at FVTPL		Financial assets at FVTOCI		Off-balance accounts		Total
Accommodation business		5,562		—		—		9,762		15,324
Travel business		7,927		—		—		15,182		23,109
Aviation		1,072		—		—		3,760		4,832
Cosmetics industry		11,364		—		—		9,766		21,130
Distribution business		30,904		—		—		36,190		67,094
Food industry		134,006		—		—		115,695		249,701
Art/sports, leisure service		24,614		—		—		41,003		65,617
Total		215,449		—		—		231,358		446,807


	December 31, 2021
	Loans and other financial assets at amortized cost		Financial assets at FVTPL		Financial assets at FVTOCI		Off-balance accounts		Total
Accommodation business		2,341		—		—		11,472		13,813
Travel business		3,334		—		—		20,056		23,390
Aviation		983		—		—		4,025		5,008
Cosmetics industry		3,187		—		—		10,692		13,879
Distribution business		7,582		—		—		38,741		46,323
Food industry		30,267		—		—		122,793		153,060
Art/sports, leisure service		8,336		—		—		44,286		52,622
Total		56,030		—		—		252,065		308,095

- 69 -


			December 31, 2022
			Loans and other financial assets at amortized cost	Financial assets at FVTPL	Financial assets at FVTOCI
Service business	Distribution business	General retail business	363,655	—	—
		General wholesale business	266,515	—	—
		Sub-total	630,170	—	—
	Accommodation business		40,237	—	—
	Travel business		5,880	—	—
	Art/sports, leisure service		66,388	—	—
	Food business		228,254	—	—
	Transportation business		367,311	—	—
	Education business		52,652	—	—
	Others		1,997,073	—	—
	Sub-total		3,387,965	—	—
Manufacturing	Textile		15,204	—	—
	Metal		25,274	—	—
	Non-metal		4,067	—	—
	Chemical		14,071	—	—
	Transportation		2,867	—	—
	Electronics		28,202	—	—
	Cosmetics		1,192	—	—
	Others		235,972	—	—
	Sub-total		326,849	—	—
Total COVID-19 vulnerable business			3,714,814	—	—
Other business	Others		5,337,618	21,652	—

	Total		9,052,432	21,652	—


			December 31, 2022
			Off-balance accounts	Total
Service business	Distribution business	General retail business	—	363,655
		General wholesale business	—	266,515
		Sub-total	—	630,170
	Accommodation business		—	40,237
	Travel business		—	5,880
	Art/sports, leisure service		—	66,388
	Food business		—	228,254
	Transportation business		—	367,311
	Education business		—	52,652
	Others		206,191	2,203,264
	Sub-total		206,191	3,594,156
Manufacturing	Textile		—	15,204
	Metal		—	25,274
	Non-metal		—	4,067
	Chemical		—	14,071
	Transportation		—	2,867
	Electronics		—	28,202
	Cosmetics		—	1,192
	Others		19,892	255,864
	Sub-total		19,892	346,741
Total COVID-19 vulnerable business			226,083	3,940,897
Other business	Others		347,025	5,706,295

	Total		573,108	9,647,192

- 70 -


			December 31, 2021
			Loans and other financial assets at amortized cost	Financial assets at FVTPL	Financial assets at FVTOCI
Service business	Distribution business	General retail business	77,841	—	—
		General wholesale business	292,832	—	—
		Sub-total	370,673	—	—
	Accommodation business		7,338	—	—
	Travel business		57	—	—
	Art/sports, leisure service		8,544	—	—
	Food business		125,075	—	—
	Transportation business		598,972	—	—
	Education business		22,118	—	—
	Others		102,787	—	—
	Sub-total		1,235,564	—	—
Manufacturing	Textile		727	—	—
	Metal		2,824	—	—
	Non-metal		698	—	—
	Chemical		172	—	—
	Transportation		438	—	—
	Electronics		3,993	—	—
	Cosmetics		685	—	—
	Others		108,540	—	—
	Sub-total		118,077	—	—
Total COVID-19 vulnerable business			1,353,641	—	—
Other business	Others		6,489,394	28,222	—

	Total		7,843,035	28,222	—


			December 31, 2021
			Off-balance accounts	Total
Service business	Distribution business	General retail business	—	77,841
		General wholesale business	—	292,832
		Sub-total	—	370,673
	Accommodation business		—	7,338
	Travel business		—	57
	Art/sports, leisure service		—	8,544
	Food business		—	125,075
	Transportation business		—	598,972
	Education business		—	22,118
	Others		140,549	243,336
	Sub-total		140,549	1,376,113
Manufacturing	Textile		—	727
	Metal		—	2,824
	Non-metal		—	698
	Chemical		—	172
	Transportation		—	438
	Electronics		—	3,993
	Cosmetics		—	685
	Others		13,432	121,972
	Sub-total		13,432	131,509
Total COVID-19 vulnerable business			153,981	1,507,622
Other business	Others		812,597	7,330,213

	Total		966,578	8,837,835

- 71 -

< Woori Investment Bank Co., Ltd. >


	December 31, 2022
	Loans and other financial assets at amortized cost		Financial assets at FVTPL		Financial assets at FVTOCI		Off-balance accounts		Total
Accommodation business		19,323		—		—		—		19,323
Distribution business		10,084		19,774		—		—		29,858
Art/sports, leisure service		59,160		—		—		—		59,160
Total		88,567		19,774		—		—		108,341


	December 31, 2021
	Loans and other financial assets at amortized cost		Financial assets at FVTPL		Financial assets at FVTOCI		Off-balance accounts		Total
Accommodation business		57,142		—		—		—		57,142
Distribution business		12,885		—		—		—		12,885
Art/sports, leisure service		31,772		—		—		—		31,772
Total		101,799		—		—		—		101,799

- 72 -

Credit risk exposure

Financial assets

The maximum exposure to credit risk by asset quality, except for financial assets at FVTPL and derivative asset (designated for hedging) as of December 31, 2022 and 2021 is as follows (Unit: Korean Won in millions):


	December 31, 2022
	Stage 1				Stage 2				Stage 3		Credit impairment model		Total		Loss allowance			Total, net
	Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Stage 3		Credit impairment model		Total		Loss allowance			Total, net
Loans and other financial assets at amortized cost		308,498,799		23,391,187		13,061,081		11,533,632		1,447,967		313,717		358,246,383		(2,485,654	)		355,760,729
Korean treasury and government agencies		2,879,057		39		—		—		—		—		2,879,096		(1,411	)		2,877,685
Banks		21,182,445		393,181		2,125		—		18,053		—		21,595,804		(24,707	)		21,571,097
Corporates		120,407,588		16,680,863		2,556,885		4,429,148		637,187		313,717		145,025,388		(1,517,536	)		143,507,852
General business		74,939,770		9,291,691		1,754,620		3,083,232		421,659		—		89,490,972		(1,016,039	)		88,474,933
Small- and medium-sized enterprise		34,965,279		6,751,297		754,668		1,257,741		173,818		—		43,902,803		(400,328	)		43,502,475
Project financing and others		10,502,539		637,875		47,597		88,175		41,710		313,717		11,631,613		(101,169	)		11,530,444
Consumers		164,029,709		6,317,104		10,502,071		7,104,484		792,727		—		188,746,095		(942,000	)		187,804,095
Securities at amortized cost		28,276,901		—		—		—		—		—		28,276,901		(8,385	)		28,268,516
Financial assets at FVTOCI (*3)		31,914,193		231,565		—		—		—		—		32,145,758		(11,805	)		32,145,758

Total		368,689,893		23,622,752		13,061,081		11,533,632		1,447,967		313,717		418,669,042		(2,505,844	)		416,175,003


	December 31, 2022
	Collateral value
	Stage1		Stage2		Stage3		Credit impairment model		Total
Loans and other financial assets at amortized cost		213,228,740		19,354,919		607,614		313,717		233,504,990
Korean treasury and government agencies		24,276		—		—		—		24,276
Banks		1,858,595		—		—		—		1,858,595
Corporates		82,314,488		4,982,087		316,085		313,717		87,926,377
General business		44,465,799		3,390,139		194,597		—		48,050,535
Small- and medium-sized enterprise		32,503,289		1,537,173		84,798		—		34,125,260
Project financing and others		5,345,400		54,775		36,690		313,717		5,750,582
Consumers		129,031,381		14,372,832		291,528		—		143,695,741
Securities at amortized cost		—		—		—		—		—
Financial assets at FVTOCI (*3)		—		—		—		—		—

Total		213,228,740		19,354,919		607,614		313,717		233,504,990

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

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

(*3)	Financial assets at FVTOCI has been disclosed as the amount before deducting loss allowance because loss allowance does not reduce the carrying amount.

- 73 -


	December 31, 2021
	Stage 1				Stage 2				Stage 3		Total		Loss allowance			Total, net
	Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Stage 3		Total		Loss allowance			Total, net
Loans and other financial assets at amortized cost		303,317,270		22,734,430		13,270,491		10,190,307		1,332,644		350,845,142		(1,959,525	)		348,885,617
Korean treasury and government agencies		2,211,798		9		9		—		—		2,211,816		(3,923	)		2,207,893
Banks		23,865,911		492,447		46,373		—		23,509		24,428,240		(15,555	)		24,412,685
Corporates		108,917,062		15,952,017		2,698,907		3,963,782		658,923		132,190,691		(1,163,435	)		131,027,256
General business		68,767,641		9,010,115		1,886,740		2,597,136		438,537		82,700,169		(785,908	)		81,914,261
Small- and medium-sized enterprise		33,306,787		6,459,338		790,750		1,353,313		156,440		42,066,628		(322,635	)		41,743,993
Project financing and others		6,842,634		482,564		21,417		13,333		63,946		7,423,894		(54,892	)		7,369,002
Consumers		168,322,499		6,289,957		10,525,202		6,226,525		650,212		192,014,395		(776,612	)		191,237,783
Securities at amortized cost		17,091,509		—		—		—		—		17,091,509		(5,235	)		17,086,274
Financial assets at FVTOCI (*3)		37,917,922		209,055		—		—		—		38,126,977		(12,146	)		38,126,977

Total		358,326,701		22,943,485		13,270,491		10,190,307		1,332,644		406,063,628		(1,976,906	)		404,098,868


	December 31, 2021
	Collateral value
	Stage1		Stage2		Stage3		Total
Loans and other financial assets at amortized cost		208,188,057		18,098,940		643,183		226,930,180
Korean treasury and government agencies		20,679		—		—		20,679
Banks		1,287,055		—		—		1,287,055
Corporates		74,403,502		4,796,510		351,837		79,551,849
General business		40,288,663		3,120,790		220,792		43,630,245
Small- and medium-sized enterprise		30,852,567		1,675,720		80,830		32,609,117
Project financing and others		3,262,272		—		50,215		3,312,487
Consumers		132,476,821		13,302,430		291,346		146,070,597
Securities at amortized cost		—		—		—		—
Financial assets at FVTOCI (*3)		—		—		—		—

Total		208,188,057		18,098,940		643,183		226,930,180

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

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

(*3)	Financial assets at FVTOCI has been disclosed as the amount before deducting loss allowance because loss allowance does not reduce the carrying amount.

Payment Guarantees and commitments

The credit quality of the payment guarantees and loan commitments as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022
Financial assets	Stage 1				Stage 2				Stage3		Total
Financial assets	Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Stage3		Total
Off-balance accounts:
Payment Guarantees		10,790,470		846,997		25,826		245,061		13,232		11,921,586
Loan Commitments		113,169,542		2,610,173		1,638,982		753,139		234		118,172,070

Total		123,960,012		3,457,170		1,664,808		998,200		13,466		130,093,656

(*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.

- 74 -


	December 31, 2021
Financial assets	Stage 1				Stage 2				Stage3		Total
Financial assets	Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Stage3		Total
Off-balance accounts:
Payment Guarantees		11,560,908		1,037,142		47,549		275,166		67,044		12,987,809
Loan Commitments		107,916,434		3,591,413		2,072,348		832,173		2,094		114,414,462

Total		119,477,342		4,628,555		2,119,897		1,107,339		69,138		127,402,271

(*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.

Collateral and other credit enhancements

For the years ended December 31, 2022 and 2021, there have been no significant changes in the value of collateral or other credit enhancements held by the Group and there have been no significant changes in collateral or other credit enhancements due to changes in the collateral policy of the Group.

Among financial assets that measured loss allowance at lifetime expected credit losses, amortized costs before changes in contractual cash flows as of December 31, 2022 and 2021 are 149,511 million won and 145,594 million won, respectively, with net losses recognized along with the changes 8,474 million won and 11,734 million won, respectively.

The Group determines which loan is subject to write-off in accordance with internal guidelines and writes off loan receivables when it is determined that the loans are practically irrecoverable. For example, loans are practically irrecoverable when application is made for rehabilitation under the Debtor Rehabilitation and Bankruptcy Act and loans are confirmed as irrecoverable by the court’s decision to waive debtor’s obligation, or when it is impossible to recover the loan amount through legal means such as auctioning of debtor’s assets or through any other means of recovery available.

As the Group manages receivables that have not lost the right of claim to the debtor for the grounds of incomplete statute limitation and uncollected receivables under the related laws as receivable charge-offs, the balance as of December 31, 2022 and 2021 are 9,825,284 million won and 10,107,413 million won. In addition, the contractual non-recoverable amount of financial assets amortized for the year ended December 31, 2022, but still in the process of recovery is 1,382,281 million won.

(2)	Market risk

Market risk is the possible risk of loss arising from trading position and non-trading position as a result of the volatility of market factors such as interest rates, stock prices and foreign exchange rates.

Market risk management

Market risk management refers to the process of making and implementing decisions for the avoidance, acceptance or mitigation of risks by identifying the underlying source of the risks, measuring its level, and evaluating the appropriateness of the level of accepted market risks for both trading and non-trading activities.

Trading activities

The Group uses the standard method and the internally developed model (the Bank) in measuring market risk for trading positions, and allocates market risk capital through the Risk Management Committee. Risk management departments of the Group and its subsidiaries manage limits in detail including those on risk and loss with their management result regularly reported to the Risk Management Committee.

- 75 -

Woori Bank, a subsidiary of the Group, uses the internal model approved by the Financial Supervisory Service to measure the VaR using the Historical Simulation Method based on a 99% confidence level and a 10-day retention period, and calculates equity capital required for market risk for calculating the BIS ratio. For internal management purposes, limit management is performed on a daily basis measuring VaR based on a 99% confidence and 1 day retention period. In addition, Woori Bank perform a daily verification that compares VaR measurement and profit and loss to verify the suitability of the model.

The minimum, maximum and average VaR of the Bank for the year December 31, 2022 and 2021, and the VaR of the Bank as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022			For the year ended December 31, 2022									December 31, 2021			For the year ended December 31, 2021
Risk factor	December 31, 2022			Average			Maximum			Minimum			December 31, 2021			Average			Maximum			Minimum
Interest rate		11,800			8,847			11,987			4,298			4,177			4,681			14,017			2,405
Stock price		7,055			6,590			12,448			1,806			2,972			3,637			6,676			1,609
Foreign currencies		17,608			14,002			22,251			5,421			5,904			6,745			13,144			4,747
Diversification		(17,354	)		(12,725	)		(19,640	)		(4,201	)		(6,072	)		(7,300	)		(20,006	)		(3,627	)

Total VaR(*)		19,109			16,714			27,046			7,324			6,981			7,763			13,831			5,134

(*)

VaR (Value at Risk): Retention period of 1 day, Maximum expected losses under 99% level of confidence.

Non-trading activities

From the end of 2019 for the Bank and the beginning of 2021 for non-banking subsidiaries, the Bank and its subsidiaries manage and measure interest risk for non-trading activities through rNII(Change in Net Interest Income) and rEVE(Change in Economic Value of Equity) in accordance with IRRBB(Interest Rate Risk in the Banking Book).

rNII represents a change in net interest income that may occur over a certain period (e.g. one year) due to changes in interest rates, and rEVE indicates the economic value changes in equity capital that could be caused by changes in interest rates affecting the present value of asset, liabilities, and off-balance accounts.

- 76 -

rEVE and rNII calculated on interest risk in banking book(IRRBB) basis for assets and liabilities by subsidiary as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022				December 31, 2021
	rEVE (*1)		rNII (*2)		rEVE (*1)		rNII (*2)
Woori Bank		411,447		448,509		920,290		195,186
Woori Card Co., Ltd.		139,005		185,637		126,576		59,114
Woori Financial Capital Co., Ltd.		43,098		13,814		58,794		1,384
Woori Investment Bank Co., Ltd.		26,311		8,229		17,607		5,556
Woori Asset Trust Co., Ltd.		1,137		6,736		820		1,709
Woori Asset Management Corp.		913		1,299		1,411		504
Woori Savings Bank		6,618		10,348		15,175		949
Woori Private Equity Asset Management Co., Ltd.		547		886		32		59
Woori Global Asset Management Co., Ltd.		251		538		246		143
Woori Financial F&I Co., Ltd.		26,069		219		—		—

(*1)

rEVE: change in Economic Value of Equity

(*2)

rNII: change in Net Interest Income

- 77 -

At the interest rate re-pricing date, cash flows (both principal and interest) of interest bearing assets and liabilities, which is the basis of non-trading position interest rate risk management are as follows: (Unit: Korean Won in millions):


	December 31, 2022
	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		224,863,400		56,669,335		15,469,920		15,108,779		59,454,649		5,963,926		377,530,009
Financial assets at FVTPL		1,888,996		119,725		1,364		4,670		71,620		13,129		2,099,504
Financial assets at FVTOCI		6,093,805		4,224,460		3,014,625		3,550,982		15,409,527		584,203		32,877,602
Securities at amortized cost		2,749,432		1,806,804		1,768,936		1,427,736		20,126,354		2,100,203		29,979,465

Total		235,595,633		62,820,324		20,254,845		20,092,167		95,062,150		8,661,461		442,486,580

Liability:
Deposits due to customers		167,237,029		49,107,093		33,506,265		40,006,233		55,855,781		69,861		345,782,262
Borrowings		14,829,024		4,159,096		1,542,340		1,183,331		6,654,602		472,325		28,840,718
Debentures		9,068,737		4,905,727		4,633,137		4,962,350		19,621,659		3,298,581		46,490,191

Total		191,134,790		58,171,916		39,681,742		46,151,914		82,132,042		3,840,767		421,113,171


	December 31, 2021
	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		205,915,030		58,661,091		14,461,769		12,840,318		62,337,321		5,204,605		359,420,134
Financial assets at FVTPL		1,725,063		52,361		49,843		17,817		223,107		13,501		2,081,692
Financial assets at FVTOCI		5,489,649		4,741,319		3,915,011		4,139,102		19,962,071		634,111		38,881,263
Securities at amortized cost		1,297,865		847,134		813,405		949,475		11,990,559		2,116,986		18,015,424

Total		214,427,607		64,301,905		19,240,028		17,946,712		94,513,058		7,969,203		418,398,513

Liability:
Deposits due to customers		145,744,829		47,792,440		33,334,918		28,615,157		62,635,705		59,155		318,182,204
Borrowings		11,422,868		4,168,941		1,788,597		1,540,533		5,119,291		428,660		24,468,890
Debentures		8,325,421		3,035,764		3,203,743		3,174,902		25,036,943		3,342,284		46,119,057

Total		165,493,118		54,997,145		38,327,258		33,330,592		92,791,939		3,830,099		388,770,151

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 as of December 31, 2022 and 2021 are as follows (Unit: USD in millions, JPY in millions, CNY in millions, EUR in millions, and Korean Won in millions):

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		December 31, 2022
		USD				JPY				CNY				EUR				Others		Total
		Foreign currency		Korean Won equivalent		Foreign currency		Korean Won equivalent		Foreign currency		Korean Won equivalent		Foreign currency		Korean Won equivalent		Korean Won equivalent		Korean Won equivalent
Asset	Cash and cash equivalents		9,041		11,457,194		64,824		617,888		1,542		279,779		484		653,870		1,022,909		14,031,640
	Loans and other financial assets at amortized cost		24,361		30,872,442		116,298		1,108,529		24,637		4,470,059		2,510		3,391,155		4,952,002		44,794,187
	Financial assets at FVTPL		970		1,229,059		25,416		242,260		—		—		358		484,172		176,057		2,131,548
	Financial assets at FVTOCI		3,307		4,191,383		—		—		3,999		725,511		2		2,573		725,271		5,644,738
	Securities at amortized cost		576		729,811		—		—		3,540		642,214		69		93,250		206,497		1,671,772

	Total		38,255		48,479,889		206,538		1,968,677		33,718		6,117,563		3,423		4,625,020		7,082,736		68,273,885

Liability	Financial liabilities at FVTPL		415		526,553		26,766		255,128		—		—		322		434,590		274,895		1,491,166
	Deposits due to customers		24,569		31,135,881		227,260		2,166,196		28,125		5,102,886		2,108		2,847,863		5,008,487		46,261,313
	Borrowings		6,894		8,737,229		44,365		422,876		1,023		185,652		431		582,034		2,179,085		12,106,876
	Debentures		4,174		5,289,246		—		—		—		—		195		263,187		339,188		5,891,621
	Other financial liabilities		3,040		3,852,255		8,685		82,783		4,295		779,233		380		513,285		200,249		5,427,805

	Total		39,092		49,541,164		307,076		2,926,983		33,443		6,067,771		3,436		4,640,959		8,001,904		71,178,781

Off-balance accounts			6,698		8,488,374		34,512		328,964		1,141		207,012		787		1,063,680		868,470		10,956,500


		December 31, 2021
		USD				JPY				CNY				EUR				Others		Total
		Foreign currency		Korean Won equivalent		Foreign currency		Korean Won equivalent		Foreign currency		Korean Won equivalent		Foreign currency		Korean Won equivalent		Korean Won equivalent		Korean Won equivalent
Asset	Cash and cash equivalents		3,176		3,765,800		32,829		338,222		1,236		230,188		94		125,513		971,774		5,431,497
	Loans and other financial assets at amortized cost		28,771		34,107,769		147,981		1,504,891		23,733		4,420,551		2,329		3,126,363		5,604,781		48,764,355
	Financial assets at FVTPL		468		556,296		14,618		150,596		—		—		327		438,662		71,369		1,216,923
	Financial assets at FVTOCI		3,195		3,787,466		—		—		3,899		726,310		33		44,638		741,348		5,299,762
	Securities at amortized cost		240		283,935		—		—		499		92,917		29		39,142		138,422		554,416

	Total		35,850		42,501,266		195,428		1,993,709		29,367		5,469,966		2,812		3,774,318		7,527,694		61,266,953

Liability	Financial liabilities at FVTPL		274		324,420		16,384		168,798		—		—		239		321,354		203,523		1,018,095
	Deposits due to customers		19,803		23,476,384		219,514		2,261,520		26,342		4,906,441		1,640		2,201,233		4,798,322		37,643,900
	Borrowings		5,766		6,835,191		31,601		325,745		—		—		349		469,124		1,395,597		9,025,657
	Debentures		3,566		4,228,055		—		—		—		—		—		—		341,621		4,569,676
	Other financial liabilities		2,739		3,247,454		10,673		109,958		2,658		495,125		335		449,897		211,392		4,513,826

	Total		32,148		38,111,504		278,172		2,866,021		29,000		5,401,566		2,563		3,441,608		6,950,455		56,771,154

Off-balance accounts			8,047		9,540,185		32,777		337,685		2,533		471,852		598		803,357		1,250,186		12,403,265

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Interest Rate Benchmark Reform Risk Management

The Group closely monitors the outputs and markets of various industrial working groups that manage the transition to new interest rate benchmark, which includes announcements by LIBOR regulators.

A fundamental shift in interest rate indicators (hereinafter referred to as “interest rate benchmark reform”) is taking place around the world, and some Interbank Offered Rates (“IBORs”) are being replaced by new risk-free rates. In particular, for the case of LIBOR, except for USD LIBOR for overnight rate, 1, 3, 6, and 12 month rates, all of the calculations were suspended as of December 31, 2021, and the aforementioned 5 USD LIBORs will also be suspended as of June 30, 2023.

The Group established a LIBOR-related response plan consisting of the business flow of risk management, accounting, tax, law, computerization and customer management. The purpose of the plan is to identify the impact and risks associated with interest rate benchmark reform within the business, and to prepare and implement an action plan to ensure a smooth transition to alternative interest rates. The Group aims to close the response plan in line with the supervisory authority’s response guidelines.

The details of Woori Bank’s financial instruments that have not completed the conversion to the LIBOR-related interest rates benchmark at the end of the year are as follows: Non-derivative financial instrument is presented at the carrying amount, while the derivative financial instrument is presented at the nominal amount.


		December 31.2022
		USD (*1)
		Total Amount (*2)		Interest Rate Provision
Non-derivative financial assets	Financial assets at FVTOCI		514,935		355,247
	Financial assets at amortized cost		4,214,876		3,237,567

	Total		4,729,811		3,592,814

Non-derivative financial liabilities	Financial liabilities at amortized cost		89,326		89,326

Derivatives	Interest rate(trading)		26,210,037		26,208,438
	Currency(trading)		33,886,969		33,598,769
	Interest rate(hedging)		2,344,505		2,344,505

	Total		62,441,511		62,151,712

(*1)

Financial instruments related to USD Libor (overnight rate, 1, 3, 6, 12 month rates) that are expired before June 30, 2023 are excluded.

(*2)

For contracts that do not have an interest rate alternative clause, The Group is in the process of negotiating to add an interest rate alternative clause.

The KRW CD rates are planned to be replaced by the Korea Overnight Financing Repo Rate (KOFR) in the long run, but when the CD rates will be ceased or the policy response directions to activate alternative rates are not clear.

< Woori Card Co., Ltd. >

The hedging relationship in which Woori Card applies cash flow risk hedge is affected by interest rate indicators related to interest rate benchmark reform. The interest rate benchmarks for which the hedging relationship is exposed are USD 1M LIBOR and USD 3M LIBOR. The nominal amounts of hedging instruments associated with 1M LIBOR and 3M LIBOR among the hedging relationships of Woori Card are USD 270,000,000 and USD 100,000,000, respectively. Woori Card is closely monitoring market and industry discussions regarding applicable alternative benchmark interest rates for exposed interest rate benchmarks, and believes that this uncertainty will no longer appear when exposed interest benchmarks are replaced by applicable interest rates.

- 80 -

The hedging relationship in which Woori Financial Capital applies cash flow risk hedge accounting is affected by interest rate benchmarks related to interest rate benchmark reform. The interest rate benchmark with the corresponding hedging relationship exposed is the KRW 3M CD. The nominal amount of the hedging instrument associated with the KRW 3M CD of Woori Financial Capital’s hedging relationship is KRW 40 billion. Woori Financial Capital is closely watching market and industry discussions regarding applicable alternative benchmark interest rates for exposed interest rate benchmarks, and believes that this uncertainty will no longer appear when exposed interest benchmarks are replaced by applicable interest rates.

- 81 -

(3)	Liquidity risk

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

Liquidity risk management

Liquidity risk management is to prevent potential cash shortages as a result of mismatching maturity of assets and liabilities or unexpected cash outflows. The the consolidated 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.

The information on early repayment related to asset securitization is described in NOTE 40. CONTINGENT LIABILITIES AND COMMITMENTS (4) 3).

Maturity analysis of non-derivative financial liabilities

Cash flows of principals and interests by remaining contractual maturities of non-derivative financial liabilities as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022
	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		35,161		—		—		—		—		12,113		47,274
Deposits due to customers		228,890,427		36,851,103		24,091,740		42,652,679		14,999,516		1,522,830		349,008,295
Borrowings		8,969,648		5,734,715		3,210,812		3,156,211		7,457,240		484,909		29,013,535
Debentures		6,348,064		6,841,379		5,211,032		5,214,942		19,621,659		3,298,581		46,535,657
Lease liabilities		68,279		36,724		35,136		29,646		151,379		33,007		354,171
Other financial liabilities		14,409,376		113,049		19,370		20,315		765,870		3,037,563		18,365,543

Total		258,720,955		49,576,970		32,568,090		51,073,793		42,995,664		8,389,003		443,324,475


	December 31, 2021
	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		100,976		10,397		91,785		107,230		—		—		310,388
Deposits due to customers		224,881,863		32,559,199		20,290,566		31,768,748		9,213,279		1,615,198		320,328,853
Borrowings		9,477,536		4,366,223		2,415,548		2,494,732		5,800,815		440,506		24,995,360
Debentures		3,068,600		4,201,926		5,316,672		5,371,869		24,982,746		3,342,284		46,284,097
Lease liabilities		41,731		53,245		30,148		25,494		156,228		38,275		345,121
Other financial liabilities		17,614,313		228,388		12,190		11,894		610,514		1,999,198		20,476,497

Total		255,185,019		41,419,378		28,156,909		39,779,967		40,763,582		7,435,461		412,740,316

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Cash flows of principals and interests by expected maturities of non-derivative financial liabilities as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022
	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		35,161		—		—		—		—		12,113		47,274
Deposits due to customers		242,132,680		41,113,768		24,269,363		29,670,943		10,490,993		56,013		347,733,760
Borrowings		8,969,648		5,734,715		3,210,812		3,156,211		7,457,240		484,909		29,013,535
Debentures		6,348,064		6,841,379		5,211,032		5,214,942		19,621,659		3,298,581		46,535,657
Lease liabilities		68,344		36,729		35,377		29,948		157,361		38,584		366,343
Other financial liabilities		14,409,376		113,049		19,370		20,315		765,870		3,037,563		18,365,543

Total		271,963,273		53,839,640		32,745,954		38,092,359		38,493,123		6,927,763		442,062,112


	December 31, 2021
	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		100,976		10,397		91,785		107,230		—		—		310,388
Deposits due to customers		230,823,884		33,705,990		20,107,790		27,331,774		7,871,688		89,643		319,930,769
Borrowings		9,477,536		4,366,223		2,415,548		2,494,732		5,800,815		440,506		24,995,360
Debentures		3,068,600		4,201,926		5,316,672		5,371,869		24,982,746		3,342,284		46,284,097
Lease liabilities		41,716		53,260		30,216		25,653		162,092		41,814		354,751
Other financial liabilities		17,614,313		228,388		12,190		11,894		610,514		1,999,198		20,476,497

Total		261,127,025		42,566,184		27,974,201		35,343,152		39,427,855		5,913,445		412,351,862

Maturity analysis of derivative financial liabilities

Derivatives held for trading purpose are not managed in accordance with their contractual maturity, since 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. Derivatives designated for hedging purpose are estimated by offsetting cash inflows and cash outflows.

The cash flow by the maturity of derivative financial liabilities as of December 31, 2022 and 2021 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
December 31, 2022	Cash flow risk hedge		856			905			915			1,255			50,682			—			54,613
	Fair value risk hedge		25,048			16,175			31,974			18,540			118,027			(3,615	)		206,149
	Trading purpose		8,905,125			—			—			—			—			—			8,905,125
December 31, 2021	Cash flow risk hedge		246			(206	)		(502	)		(717	)		(2,744	)		(4,053	)		(7,976	)
	Fair value risk hedge		(1,656	)		598			(940	)		1,392			21,552			—			20,946
	Trading purpose		4,566,443			—			—			—			—			—			4,566,443

- 83 -

Maturity analysis of off-balance accounts (Payment guarantees, commitments, and etcs)

A payment guarantee represents an irrevocable undertaking that the Group should meet a customer’s obligations to third parties if the customer fails to do so. The loan commitment represents the limit if the Group has promised a credit to the customer. Loan commitments 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 payment guarantees, such as financial guarantees for debentures issued or loans, unused loan commitments, and other credits, however, under the terms of the guarantees and unused loan commitments, funds should be paid upon demand from the counterparty. Details of off-balance accounts as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022		December 31, 2021
Payment guarantees		11,921,586		12,987,809
Loan commitments		118,172,070		114,414,462
Other commitments		4,602,429		3,427,331

- 84 -

(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.

Operational risk management

The Group has established and operated an operating risk management system to strengthen external competitiveness, reduce risk capital volume, enhance operational risk management capacity and prevent accidents through compliance with Basel II, and has obtained approval from the Financial Supervisory Service for “Advanced Measurement Approaches”(AMA) based on self-compliance verification and independent third-party inspection results.

Operational risk measurement

The Group is applying the basic indicator method for the purpose of calculating the regulatory capital of operation risk, and the Bank is applying the Advanced Measurement Approaches. The Bank applies AMA using internal and external loss data, business environment and internal control factors, and scenario analysis.

(5)	Capital management

The Group complies with the standard of capital adequacy provided by financial regulatory authorities. The capital adequacy standard is based on Basel III published by Basel Committee on Banking Supervision in Bank for International Settlement and was implemented in Korea in December 2013. The capital adequacy ratio is calculated by dividing own capital by asset (weighted with a risk premium – risk weighted assets) based on the consolidated financial statements of the Group.

According to the above regulations, the Group is required to meet the following minimum requirements: Tier 1 common capital ratio of 8.0%, a Tier 1 capital ratio of 9.5%, and a total capital ratio of 11.5% as of December 31, 2022 and 2021

Details of the Group’s capital adequacy ratio as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


Details(*)	December 31, 2022			December 31, 2021
Tier 1 capital		23,757,296			21,994,047
Other Tier 1 capital		4,208,994			3,590,212
Tier 2 capital		3,437,735			3,395,989

Total risk-adjusted capital		31,404,025			28,980,248

Risk-weighted assets for credit risk		182,028,062			171,199,840
Risk-weighted assets for market risk		6,759,527			6,388,428
Risk-weighted assets for operational risk		16,519,885			14,914,801

Total risk-weighted assets		205,307,474			192,503,069

Common Equity Tier 1 ratio		11.57	%		11.43	%

Tier 1 capital ratio		13.62	%		13.29	%

Total capital ratio		15.30	%		15.05	%

(*)	The capital ratio at the end of the current period is provisional

- 85 -

5.	OPERATING SEGMENTS

In evaluating the results of the Group and allocating resources, the Group’s Chief Operation Decision Maker (“CODM”) utilizes the information per type of customers. With the establishment of Woori Financial Group Inc. during the prior term, the Group reports to the CODM according to the organizational sectors below. This financial information of the segments is regularly reviewed by the CODM to make decisions about resources to be allocated to each segment and evaluate its performance.

(1)	Segment by type of organization

The Group’s reporting segments consist of banking, credit card, capital, comprehensive finance and other sectors, and the composition of such reporting segments was divided based on internal report data periodically reviewed by the management to evaluate the performance of the segment and make decisions on the resources to be distributed.


		Operational scope
Banking		Loans/deposits and relevant services for customers of Woori Bank and its subsidiaries

Credit card		Credit card, cash services, card loans and accompanying business of Woori Card Co., Ltd.

Capital		Installments, loans including lease financing, and accompanying business of Woori Financial Capital Co., Ltd.

Investment Banking		Securities operation, sale of financial instruments, project financing and other related activities for comprehensive financing of Woori Investment bank Co., Ltd.

Others		Woori Financial Group Inc., Woori Asset Trust Co., Ltd., Woori Asset Management Corp., Ltd., Woori Financial F&I Co., Ltd., Woori Savings Bank., Woori Credit Information Co., Ltd., Woori Fund Services Inc., Woori Private Equity Asset Management Co., Ltd., Woori Global Asset Management Co., Ltd., Woori FIS Co., Ltd. and Woori Finance Research Institute,

- 86 -

(2)	The composition of each organization’s sectors for the years ended December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2022
	Banking			Credit card			Capital			Investment banking			Others (*1)			Sub-total			Other adjustments (*2)			Internal adjustments (*3)			Consolidated Adjustments (*4)			Total
Net interest income		6,603,834			675,250			376,133			117,867			73,800			7,846,884			34,307			817,543			(2,155	)		8,696,579
Non-interest income(expense)		1,520,576			110,888			83,428			82,885			1,750,203			3,547,980			17,498			(761,029	)		(1,655,342	)		1,149,107
Impairment losses due to credit loss		(426,552	)		(238,607	)		(107,906	)		(16,491	)		(38,319	)		(827,875	)		—			(57,992	)		595			(885,272	)
General and administrative expense		(3,914,672	)		(262,525	)		(99,872	)		(61,631	)		(493,502	)		(4,832,202	)		(409	)		—			302,721			(4,529,890	)

Net operating income(expense)		3,783,186			285,006			251,783			122,630			1,292,182			5,734,787			51,396			(1,478	)		(1,354,181	)		4,430,524

Share of gain of associates		73,958			—			1,430			334			2,173			77,895			(182	)		—			(7,717	)		69,996
Other non-operating expense		5,563			(6,373	)		(1,835	)		(1,399	)		(2,386	)		(6,430	)		2,371			1,478			(12,565	)		(15,146	)

Non-operating income(expense)		79,521			(6,373	)		(405	)		(1,065	)		(213	)		71,465			2,189			1,478			(20,282	)		54,850

Net income(expense) before tax		3,862,707			278,633			251,378			121,565			1,291,969			5,806,252			53,585			—			(1,374,463	)		4,485,374
Tax expense		(959,298	)		(73,869	)		(68,050	)		(29,771	)		(26,739	)		(1,157,727	)		—			—			(3,665	)		(1,161,392	)

Net income(loss)		2,903,409			204,764			183,328			91,794			1,265,230			4,648,525			53,585			—			(1,378,128	)		3,323,982

Total assets		443,340,979			16,118,967			12,581,473			5,657,191			28,059,619			505,758,229			2,019,322			—			(27,303,155	)		480,474,396

Investment in associate		917,581			—			40,987			6,548			22,427,853			23,392,969			29,658			—			(22,116,991	)		1,305,636
Other assets		442,423,398			16,118,967			12,540,486			5,650,643			5,631,766			482,365,260			1,989,664			—			(5,186,164	)		479,168,760

Total liabilities		417,583,793			13,692,456			11,040,754			4,982,410			4,146,997			451,446,410			50,762			—			(2,650,118	)		448,847,054

(*1)

Other segments include gains and losses from Woori Financial Group Inc., Woori Asset Trust Co., Ltd., Woori Savings Bank, Woori Asset Management Corp., Woori Financial F&I Co., Ltd., Woori Credit Information Co., Ltd., Woori Fund Service Co., Ltd., Woori Private Equity Asset Management Co., Ltd., Woori Global Asset Management Co., Ltd., Woori FIS Co., Ltd. and Woori Finance Research Institute.

(*2)

Other segments includes the funds subject to Group’s consolidated not included in the reporting segment.

(*3)

Internal reconciliation includes the adjustment of deposit insurance premiums of KRW 423,834 million and fund contribution fees of KRW 402,057 million from net interest income expenses to non-interest income expenses in order to present the profit and loss adjustment between reporting divisions in accordance with management accounting standards as profit and loss in accordance with accounting standards

(*4)

Consolidation adjustments include the elimination of KRW 300,297 million of internal transactions between Woori FIS Co., Ltd., the group’s IT service agency, and affiliates, and the removal of KRW 1,272,393 million of dividends received by the holding company from its subsidiaries.

- 87 -


	For the year ended December 31, 2021
	Banking			Credit card			Capital			Investment banking			Others (*1)			Sub-total			Other adjustments (*2)			Internal adjustments (*3)			consolidated adjustments (*4)			Total
Net interest income		5,158,078			606,506			315,600			108,321			29,515			6,218,020			9,938			758,559			(796	)		6,985,721
Non-interest income(expense)		1,661,903			63,839			95,297			49,419			1,111,422			2,981,880			16,431			(670,230	)		(969,804	)		1,358,277
Impairment losses due to credit loss		(140,574	)		(164,097	)		(122,089	)		(1,885	)		(19,601	)		(448,246	)		—			(89,683	)		1,091			(536,838	)
General and administrative expense		(3,606,715	)		(225,175	)		(99,048	)		(51,490	)		(440,601	)		(4,423,029	)		(256	)		—			275,874			(4,147,411	)

Net operating income(expense)		3,072,692			281,073			189,760			104,365			680,735			4,328,625			26,113			(1,354	)		(693,635	)		3,659,749

Share of gain of associates		60,049			—			1,000			750			4,390			66,189			51			—			(4,044	)		62,196
Other non-operating expense		42,542			(7,936	)		(16,943	)		(660	)		(1,071	)		15,932			2,956			1,354			7,054			27,296

Non-operating income(expense)		102,591			(7,936	)		(15,943	)		90			3,319			82,121			3,007			1,354			3,010			89,492

Net income(expense) before tax		3,175,283			273,137			173,817			104,455			684,054			4,410,746			29,120			—			(690,625	)		3,749,241
Tax expense		(790,177	)		(72,411	)		(33,238	)		(24,531	)		(16,799	)		(937,156	)		—			—			(4,714	)		(941,870	)

Net income(loss)		2,385,106			200,726			140,579			79,924			667,255			3,473,590			29,120			—			(695,339	)		2,807,371

Total assets		415,976,627			14,116,832			10,259,868			5,159,742			25,627,649			471,140,718			1,101,162			—			(25,058,009	)		447,183,871

Investment in associate		858,706			—			12,403			8,846			22,165,895			23,045,850			35,134			—			(21,745,817	)		1,335,167
Other assets		415,117,921			14,116,832			10,247,465			5,150,896			3,461,754			448,094,868			1,066,028			—			(3,312,192	)		445,848,704

Total liabilities		391,315,108			11,858,065			9,073,104			4,559,856			3,284,269			420,090,402			54,595			—			(1,811,321	)		418,333,676

(*1)

(*2)

Other segments includes the funds subject to Group’s consolidated not included in the reporting segment.

(*3)

Internal reconciliation includes the adjustment of deposit insurance premiums of KRW 406,276 million and fund contribution fees of KRW 367,961 million from net interest income expenses to non-interest income expenses in order to present the profit and loss adjustment between reporting divisions in accordance with management accounting standards as profit and loss in accordance with accounting standards

(*4)

Consolidation adjustments include the elimination of KRW 274,768 million of internal transactions between Woori FIS Co., Ltd., the group’s IT service agency, and affiliates, and the removal of KRW 692,605 million of dividends received by the holding company from its subsidiaries.

- 88 -

(3)	Operating profit or loss from external customers for the years ended December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	For the years ended December 31
Details	2022		2021
Domestic		3,835,809		3,288,341
Foreign		594,715		371,408

Total		4,430,524		3,659,749

(4)	Major non-current assets as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


Details (*)	December 31, 2022 (*)		December 31, 2021 (*)
Domestic		5,152,033		5,201,838
Foreign		533,354		482,930

Total		5,685,387		5,684,768

(*)

Major non-current assets included joint ventures and related business investments, investment properties, premises equipment, and intangible assets.

(5)	Information about major customers

The Group does not have any single customer that generates 10% or more of the Group’s total revenue for the years ended December 31, 2022 and 2021.

- 89 -

6.	STATEMENTS OF CASH FLOWS

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


	December 31, 2022		December 31, 2021
Cash		1,771,316		1,742,449
Foreign currencies		628,590		503,205
Demand deposits		31,729,228		18,208,784
Fixed deposits		90,014		158,635

Total		34,219,148		20,613,073

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


	Counterparty	December 31, 2022		Reason of restriction
Due from banks in local currency:
Due from BOK	BOK		16,527,445	Reserve deposits under the BOK Act

Due from banks in foreign currencies:
Due from banks on demand	BOK and others		6,437,717	Reserve deposits under the BOK Act and others

Total			22,965,162


	Counterparty	December 31, 2021		Reason of restriction
Due from banks in local currency:
Due from BOK	BOK		9,619,055	Reserve deposits under the BOK Act

Due from banks in foreign currencies:
Due from banks on demand	BOK and others		3,428,200	Reserve deposits under the BOK Act and others

Total			13,047,255

(3)	Significant transactions of investing activities and financing activities not involving cash inflows and outflows are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2022			2021
Changes in other comprehensive income related to valuation of financial assets at FVTOCI		(493,871	)		(150,327	)
Changes in other comprehensive income related to valuation of assets of associate		612			1,526
Changes in other comprehensive income related to valuation profit or loss on cash flow hedge		(9,835	)		7,107
Changes in financial assets measure at FVTOCI due to debt-for-equity swap		14,594			79
Changes in the investment assets of associates due to the transfer of assets held-for-sale		—			(52	)
Changes in the property, plant and equipment due to the transfer of assets held-for-sale		(13,109	)		(12,852	)
Transfer of investment properties and premises and equipment		7,154			6,095

- 90 -


	For the years ended December 31
	2022			2021
Changes in account payables related to premises and equipment		281			—
Changes in account payables related to intangible assets		(11,530	)		(11,640	)
Changes in right-of-use assets and lease liabilities		194,236			150,644
Comprehensive stock exchange		—			64,301
Changes in other comprehensive income related to foreign operation translation		28,746			246,808

(4)	Adjustments of liabilities from financing activities in current and prior year are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2022
	Beginning balance		Cash flow			Not involving cash inflows and outflows								Ending balance
	Beginning balance		Cash flow			Foreign Exchange		Variation of gain(loss) on valuation of hedged items			Others (*)			Ending balance
Borrowings		24,755,459		2,881,675			760,918		—			31,551			28,429,603
Debentures		44,653,864		(484,874	)		297,861		(257,910	)		(10,455	)		44,198,486
Lease liabilities		343,213		(187,531	)		4,645		—			158,834			319,161
Other liabilities		26,907		513			—		—			(36	)		27,384

Total		69,779,443		2,209,783			1,063,424		(257,910	)		179,894			72,974,634

(*)	The change in lease liabilities due to the new contract includes 235,215 million won.


	For the year ended December 31, 2021
	Beginning balance		Cash flow			Not involving cash inflows and outflows								Ending balance
	Beginning balance		Cash flow			Foreign Exchange		Variation of gains on valuation of hedged items			Others (*)			Ending balance
Borrowings		20,745,466		3,199,712			804,649		—			5,632			24,755,459
Debentures		37,479,358		6,893,661			392,077		(104,306	)		(6,926	)		44,653,864
Lease liabilities		407,431		(177,593	)		10,950		—			102,425			343,213
Other liabilities		26,354		14,173			—		—			(13,620	)		26,907

Total		58,658,609		9,929,953			1,207,676		(104,306	)		87,511			69,779,443

(*)	The change in lease liabilities due to the new contract includes 189,660 million won.

- 91 -

7.	FINANCIAL ASSETS AT FVTPL

(1)	Details of financial assets at FVTPL as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022		December 31, 2021
Financial assets at fair value through profit or loss measured at fair value		19,860,573		13,497,234

(2)	Financial assets at fair value through profit or loss measured at fair value as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022		December 31, 2021
Deposits:
Gold banking asset		34,995		65,072
Securities:
Debt securities
Korean treasury and government agencies		2,754,442		995,713
Financial institutions		620,311		925,474
Corporates		721,573		751,636
Others		174,206		70,416
Equity securities		383,883		329,864
Capital contributions		1,976,474		1,287,723
Beneficiary certificates		3,902,762		3,504,547
Others		143,334		94,673

Sub-total		10,676,985		7,960,046

Loans		899,228		667,467
Derivatives assets		8,206,181		4,803,131
Other financial assets		43,184		1,518

Total		19,860,573		13,497,234

The Group does not have financial assets at fair value through profit or loss designated as upon initial recognition as of December 31, 2022 and 2021.

- 92 -

8.	FINANCIAL ASSETS AT FVTOCI

(1)	Details of financial assets at FVTOCI as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022		December 31, 2021
Debt securities:
Korean treasury and government agencies		5,487,983		4,728,085
Financial institutions		16,870,619		22,909,615
Corporates		4,044,446		5,091,035
Bond denominated in foreign currencies		5,644,684		5,299,707
Securities loaned		98,026		98,535

Sub-total		32,145,758		38,126,977

Equity securities		939,322		992,812

Total		33,085,080		39,119,789

(2)	Details of equity securities designated as financial assets at FVTOCI as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


Purpose of acquisition	December 31, 2022		December 31, 2021		Remarks
Investment for strategic business partnership purpose		776,199		796,835
Debt-equity swap		157,216		195,971
Others		5,907		6	Insurance for mutual aid association, etc.

Total		939,322		992,812

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

Allowance for credit losses


	For the year ended December 31, 2022
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(12,146	)		—		—		(12,146	)
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Reversal of loss allowance		827			—		—		827
Disposal		714			—		—		714
Others (*)		(1,200	)		—		—		(1,200	)

Ending balance		(11,805	)		—		—		(11,805	)

(*)

Others consist of foreign currencies translation, etc.


	For the year ended December 31, 2021
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(9,631	)		—		—		(9,631	)
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Net provision of loss allowance		(4,909	)		—		—		(4,909	)
Disposal		2,378			—		—		2,378
Others (*)		16			—		—		16

Ending balance		(12,146	)		—		—		(12,146	)

(*)

Others consist of foreign currencies translation, etc.

- 93 -

Gross carrying amount


	For the year ended December 31, 2022
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		38,126,977			—		—		38,126,977
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Acquisition		16,108,426			—		—		16,108,426
Disposal / Recovery		(21,670,160	)		—		—		(21,670,160	)
Gain (loss) on valuation		(669,936	)		—		—		(669,936	)
Amortization based on effective interest method		41,813			—		—		41,813
Others (*)		208,638			—		—		208,638

Ending balance		32,145,758			—		—		32,145,758

(*)

Others consist of foreign currencies translation, etc.


	For the year ended December 31, 2021
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		28,948,141			—		—		28,948,141
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Acquisition		30,522,426			—		—		30,522,426
Disposal / Recovery		(21,533,360	)		—		—		(21,533,360	)
Gain (loss) on valuation		(213,517	)		—		—		(213,517	)
Amortization based on effective interest method		31,641			—		—		31,641
Others (*)		371,646			—		—		371,646

Ending balance		38,126,977			—		—		38,126,977

(*)

Others consist of foreign currencies translation, etc.

(4)

During the years ended December 31, 2022 and 2021, the Group sold its equity securities., designated as financial assets at FVTOCI in accordance with decision of disposal by the creditors, and the fair values at disposal dates were 3,567 million won and 138,511 million won, respectively and cumulative gains and losses at disposal dates were 14,444 million won in gain and 3,062 million won in loss, respectively.

- 94 -

9.	SECURITIES AT AMORTIZED COST

(1)	Details of securities at amortized cost as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022			December 31, 2021
Korean treasury and government agencies		10,083,951			8,882,500
Financial institutions		10,283,631			1,835,947
Corporates		6,237,547			5,818,646
Bond denominated in foreign currencies		1,671,772			554,416
Allowance for credit losses		(8,385	)		(5,235	)

Total		28,268,516			17,086,274

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

Loss allowance


	For the year ended December 31, 2022
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(5,235	)		—		—		(5,235	)
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Net provision of loss allowance		(3,151	)		—		—		(3,151	)
Others (*)		1			—		—		1

Ending balance		(8,385	)		—		—		(8,385	)

(*)

Changes due to foreign currencies translation, etc.


	For the year ended December 31, 2021
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(4,566	)		—		—		(4,566	)
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Net provision of loss allowance		(664	)		—		—		(664	)
Others (*)		(5	)		—		—		(5	)

Ending balance		(5,235	)		—		—		(5,235	)

(*)

Changes due to foreign currencies translation, etc.

- 95 -

Gross carrying amount


	For the year ended December 31, 2022
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		17,091,509			—		—		17,091,509
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Acquisition		16,873,194			—		—		16,873,194
Disposal / Recovery		(5,871,234	)		—		—		(5,871,234	)
Amortization based on effective interest method		86,212			—		—		86,212
Others (*)		97,220			—		—		97,220

Ending balance		28,276,901			—		—		28,276,901

(*)

Changes due to foreign currencies translation, etc.


	For the year ended December 31, 2021
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		17,025,405			—		—		17,025,405
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Acquisition		6,435,692			—		—		6,435,692
Disposal / Recovery		(6,425,408	)		—		—		(6,425,408	)
Amortization based on effective interest method		14,810			—		—		14,810
Others (*)		41,010			—		—		41,010

Ending balance		17,091,509			—		—		17,091,509

(*)

Changes due to foreign currencies translation, etc.

- 96 -

10.

LOANS AND OTHER FINANCIAL ASSETS AT AMORTIZED COST

(1)	Details of loans and other financial assets at amortized cost as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022		December 31, 2021
Due from banks		2,994,672		2,866,884
Loans		343,918,560		336,799,510
Other financial assets		8,847,497		9,219,223

Total		355,760,729		348,885,617

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


	December 31, 2022			December 31, 2021
Due from banks in local currency:
Due from The Bank of Korea (“BOK”)		160,000			600,000
Due from depository banks		170,006			159,264
Due from non-depository institutions		183			14,146
Due from the Korea Exchange		2,440			54
Others		421,318			191,501
Loss allowance		(116	)		(2,452	)

Sub-total		753,831			962,513

Due from banks in foreign currencies:
Due from banks on demand		199,671			194,781
Due from banks on time		466,963			205,351
Others		1,586,408			1,507,821
Loss allowance		(12,201	)		(3,582	)

Sub-total		2,240,841			1,904,371

Total		2,994,672			2,866,884

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


	Counterparty	December 31, 2022		Reason of restriction
Due from banks in local currency:
Due from BOK	BOK		160,000	Reserve deposits under BOK Act
Due from KSFC	The Korea Securities		2,419	Customer deposits return reserve
Others	Korea Exchange and others		223,705	Korean Won CCP margin and others

Sub-total			386,124

Due from banks in foreign currencies:
Due from banks on demand	BOK and others		193,507	Reserve deposits under BOK Act and others
Due from banks on time	National Bank Cambodia		253	Reserve deposits and others
Others	Korea Investment & Securities and others		1,581,298	Overseas futures and options trade deposits and others

Sub-total			1,775,058

Total			2,161,182

- 97 -


	Counterparty	December 31, 2021		Reason of restriction
Due from banks in local currency:
Due from BOK	The BOK		600,000	Reserve deposits under the BOK Act
Due from KSFC	KB Securities Co. Ltd.		54	Futures trading margin
Others	Korea Federation of Savings Banks and others		75,897	Guarantees, mortgage of domestic exchange transactions and others

Sub-total			675,951

Due from banks in foreign currencies:
Due from banks on demand	The BOK and others		128,492	Reserve deposits under the BOK Act and others
Foreign currency deposits on time	National Bank Cambodia		237	Reserve deposits and others
Others	Korea Investment & Securities and others		1,502,474	Overseas futures and options trade deposits and others

Sub-total			1,631,203

Total			2,307,154

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

Allowance for credit losses


	For the year ended December 31, 2022
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(6,034	)		—		—		(6,034	)
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Provision for allowance for credit loss		(7,702	)		—		—		(7,702	)
Others (*)		1,419			—		—		1,419

Ending balance		(12,317	)		—		—		(12,317	)

(*)

Changes due to foreign currencies translation, etc.


	For the year ended December 31, 2021
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(4,366	)		—		—		(4,366	)
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Provision for allowance for credit loss		(1,477	)		—		—		(1,477	)
Others (*)		(191	)		—		—		(191	)

Ending balance		(6,034	)		—		—		(6,034	)

(*)

Changes due to foreign currencies translation, etc.

- 98 -

Gross carrying amount


	For the year ended December 31, 2022
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		2,872,918			—		—		2,872,918
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Net decrease		166,693			—		—		166,693
Others (*)		(32,622	)		—		—		(32,622	)

Ending balance		3,006,989			—		—		3,006,989

(*)

Changes due to foreign currencies translation, etc.


	For the year ended December 31, 2021
	Stage 1		Stage 2		Stage 3		Total
Beginning balance		2,515,273		—		—		2,515,273
Transfer to 12-month expected credit losses		—		—		—		—
Transfer to lifetime expected credit losses		—		—		—		—
Transfer to credit-impaired financial assets		—		—		—		—
Net decrease		282,987		—		—		282,987
Others (*)		74,658		—		—		74,658

Ending balance		2,872,918		—		—		2,872,918

(*)

Changes due to foreign currencies translation, etc.

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


	December 31, 2022			December 31, 2021
Loans in local currency		282,686,620			273,283,542
Loans in foreign currencies (*)		26,988,360			24,508,250
Domestic banker’s usance		2,877,079			3,403,021
Credit card accounts		10,370,362			9,757,115
Bills bought in foreign currencies		3,650,792			5,310,080
Bills bought in local currency		533,879			265,275
Factoring receivables		25,469			17,406
Advances for customers on guarantees		25,698			26,766
Private placement bonds		485,519			519,150
Securitized loans		2,990,937			2,874,480
Call loans		3,626,226			3,481,219
Bonds purchased under resale agreements		6,849,038			10,332,858
Financial lease receivables		1,467,858			1,173,751
Installment financial bond		2,832,972			2,882,396
Others		140			159
Loan origination costs and fees		852,002			858,051
Discounted present value-		(10,238	)		(7,299	)
Allowance for credit losses		(2,334,153	)		(1,886,710	)

Total		343,918,560			336,799,510

- 99 -

(6)	Changes in the loss allowance of loans are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2022
	Consumers									Corporates
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3			Credit impairment model
Beginning balance		(136,520	)		(97,604	)		(206,617	)		(362,766	)		(576,740	)		(251,233	)		—
Transfer to 12-month expected credit losses		(21,684	)		21,210			474			(74,402	)		68,546			5,856			—
Transfer to lifetime expected credit losses		10,211			(11,568	)		1,357			18,678			(21,502	)		2,824			—
Transfer to credit-impaired financial assets		3,960			8,975			(12,935	)		2,217			12,769			(14,986	)		—
Net reversal(provision) of allowance for credit losses		(734	)		(49,398	)		(156,286	)		(22,646	)		(303,198	)		(107,038	)		(27	)
Recovery		—			—			(70,077	)		—			—			(55,743	)		—
Charge-off		—			—			161,850			—			—			140,744			—
Disposal		—			62			21,862			280			128			37,722			—
Interest income from impaired loans		—			—			11,805			—			—			9,576			—
Others		(4,350	)		(495	)		(948	)		(479	)		(84	)		(97	)		—
Changes due to business combinations		1,241			729			7,573			(14,503	)		1,847			(9,090	)		—

Ending balance		(147,876	)		(128,089	)		(241,942	)		(453,621	)		(818,234	)		(241,465	)		(27	)


	For the year ended December 31, 2022
	Credit card accounts									Total
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3			Credit impairment model
Beginning balance		(68,814	)		(115,489	)		(70,927	)		(568,100	)		(789,833	)		(528,777	)		—
Transfer to 12-month expected credit losses		(31,360	)		31,284			76			(127,446	)		121,040			6,406			—
Transfer to lifetime expected credit losses		7,576			(7,694	)		118			36,465			(40,764	)		4,299			—
Transfer to credit-impaired financial assets		642			2,190			(2,832	)		6,819			23,934			(30,753	)		—
Net reversal(provision) of allowance for credit losses		20,820			(38,105	)		(204,569	)		(2,560	)		(390,701	)		(467,893	)		(27	)
Recovery		—			—			(53,988	)		—			—			(179,808	)		—
Charge-off		—			—			220,280			—			—			522,874			—
Disposal		—			—			7,896			—			190			67,480			—
Interest income from impaired loans		—			—			—			—			—			21,381			—
Others		—			—			—			(4,829	)		(579	)		(1,045	)		—
Changes due to business combinations		(3	)		—			—			(13,265	)		2,576			(1,517	)		—

Ending balance		(71,139	)		(127,814	)		(103,946	)		(672,636	)		(1,074,137	)		(587,353	)		(27	)

- 100 -


	For the year ended December 31, 2021
	Consumers									Corporates
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3
Beginning balance		(121,527	)		(84,463	)		(205,693	)		(327,460	)		(521,907	)		(388,744	)
Transfer to 12-month expected credit losses		(23,328	)		19,736			3,592			(80,803	)		49,902			30,901
Transfer to lifetime expected credit losses		9,201			(11,466	)		2,265			14,106			(35,706	)		21,600
Transfer to credit-impaired financial assets		2,752			9,918			(12,670	)		1,562			18,741			(20,303	)
Net reversal(provision) of loss allowance		(4,456	)		(32,764	)		(130,424	)		49,562			(91,981	)		(168,323	)
Recovery		—			—			(75,058	)		—			—			(55,108	)
Charge-off		—			—			174,012			—			—			233,507
Disposal		—			—			14,890			—			—			64,078
Interest income from impaired loans		—			—			13,743			—			—			12,672
Others		838			1,435			8,726			(19,733	)		4,211			18,487

Ending balance		(136,520	)		(97,604	)		(206,617	)		(362,766	)		(576,740	)		(251,233	)


	For the year ended December 31, 2021
	Credit card accounts									Total
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3
Beginning balance		(62,712	)		(90,481	)		(105,537	)		(511,699	)		(696,851	)		(699,974	)
Transfer to 12-month expected credit losses		(26,846	)		26,581			265			(130,977	)		96,219			34,758
Transfer to lifetime expected credit losses		7,497			(8,151	)		654			30,804			(55,323	)		24,519
Transfer to credit-impaired financial assets		356			925			(1,281	)		4,670			29,584			(34,254	)
Net reversal(provision) of loss allowance		12,894			(44,363	)		(145,336	)		58,000			(169,108	)		(444,083	)
Recovery		—			—			(65,620	)		—			—			(195,786	)
Charge-off		—			—			220,352			—			—			627,871
Disposal		—			—			25,576			—			—			104,544
Interest income from impaired loans		—			—			—			—			—			26,415
Others		(3	)		—			—			(18,898	)		5,646			27,213

Ending balance		(68,814	)		(115,489	)		(70,927	)		(568,100	)		(789,833	)		(528,777	)

- 101 -

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


	For the year ended December 31, 2022
	Consumers									Corporates
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3			Credit impairment model
Beginning balance		135,139,685			13,500,783			499,969			170,795,255			8,458,279			541,732			—
Transfer to 12-month expected credit losses		4,651,157			(4,637,460	)		(13,697	)		1,784,684			(1,768,655	)		(16,029	)		—
Transfer to lifetime expected credit losses		(6,284,951	)		6,303,526			(18,575	)		(3,773,713	)		3,792,473			(18,760	)		—
Transfer to credit-impaired financial assets		(157,808	)		(102,097	)		259,905			(242,421	)		(123,225	)		365,646			—
Charge-off		—			—			(161,850	)		—			—			(140,744	)		—
Disposal		—			(259	)		(57,052	)		(48,472	)		(391	)		(134,732	)		—
Net increase(decrease)		(2,082,449	)		(1,046,885	)		47,727			11,005,551			(873,200	)		28,198			313,717
Changes due to business combinations		57,743			2,974			7,630			31,551			1,016			687			—

Ending balance		131,323,377			14,020,582			564,057			179,552,435			9,486,297			625,998			313,717


	For the year ended December 31, 2022
	Credit card accounts									Total
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3			Credit impairment model
Beginning balance		8,239,303			1,395,139			116,075			314,174,243			23,354,201			1,157,776			—
Transfer to 12-month expected credit losses		542,021			(541,913	)		(108	)		6,977,862			(6,948,028	)		(29,834	)		—
Transfer to lifetime expected credit losses		(403,398	)		403,598			(200	)		(10,462,062	)		10,499,597			(37,535	)		—
Transfer to credit-impaired financial assets		(31,780	)		(21,244	)		53,024			(432,009	)		(246,566	)		678,575			—
Charge-off		—			—			(220,280	)		—			—			(522,874	)		—
Disposal		—			—			(17,082	)		(48,472	)		(650	)		(208,866	)		—
Net increase(decrease)		769,314			(169,200	)		247,981			9,697,416			(2,089,285	)		323,906			313,717
Changes due to business combinations		—			—			—			89,294			3,990			8,317			—

Ending balance		9,115,460			1,066,380			179,410			319,996,272			24,573,259			1,369,465			313,717


	For the year ended December 31, 2021
	Consumers									Corporates
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3
Beginning balance		125,990,038			12,016,711			537,106			149,574,932			7,328,741			717,909
Transfer to 12-month expected credit losses		4,377,247			(4,357,347	)		(19,900	)		1,610,541			(1,575,157	)		(35,384	)
Transfer to lifetime expected credit losses		(6,104,417	)		6,127,477			(23,060	)		(3,627,800	)		3,670,808			(43,008	)
Transfer to credit-impaired financial assets		(108,717	)		(79,746	)		188,463			(244,236	)		(132,986	)		377,222
Charge-off		—			—			(174,012	)		—			—			(233,507	)
Disposal		—			—			(48,795	)		—			—			(187,571	)
Net increase (decrease)		10,985,534			(206,312	)		40,167			23,481,818			(833,127	)		(53,929	)

Ending balance		135,139,685			13,500,783			499,969			170,795,255			8,458,279			541,732


	For the year ended December 31, 2021
	Credit card accounts									Total
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3
Beginning balance		7,278,975			1,078,220			180,074			282,843,945			20,423,672			1,435,089
Transfer to 12-month expected credit losses		359,101			(358,776	)		(325	)		6,346,889			(6,291,280	)		(55,609	)
Transfer to lifetime expected credit losses		(513,635	)		514,369			(734	)		(10,245,852	)		10,312,654			(66,802	)
Transfer to credit-impaired financial assets		(17,416	)		(9,253	)		26,669			(370,369	)		(221,985	)		592,354
Charge-off		—			—			(220,352	)		—			—			(627,871	)
Disposal		—			—			(56,520	)		—			—			(292,886	)
Net increase (decrease)		1,132,278			170,579			187,263			35,599,630			(868,860	)		173,501

Ending balance		8,239,303			1,395,139			116,075			314,174,243			23,354,201			1,157,776

- 102 -

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


	December 31, 2022			December 31, 2021
Cash Management Account asset (CMA asset)		157,000			140,000
Receivables		5,438,469			6,852,139
Accrued income		1,667,397			1,049,857
Telex and telephone subscription rights and refundable deposits		801,536			870,707
Domestic exchange settlement debit		577,919			82,555
Other assets (*)		344,356			290,746
Allowance for credit losses		(139,180	)		(66,781	)

Total		8,847,497			9,219,223

(*)

The Group became aware of employee embezzlement incidents that occurred before the end of April 2022, and the Financial Supervisory Service conducted on-site inspections from April 28 to May 30, 2022. An accusation of embezzlement and provisional seizure of found property were made, and an investigation by an investigative agency is currently underway. The related amount included in other assets amounted to 62,196 million Won, which was treated as a loss in its entirety because its recoverability was uncertain.

(9)	Changes in the allowances for credit losses on other financial assets are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2022
	Stage 1			Stage 2			Stage 3			Total
Beginning balance		(3,675	)		(5,580	)		(57,526	)		(66,781	)
Transfer to 12-month expected credit losses		(261	)		246			15			—
Transfer to lifetime expected credit losses		209			(225	)		16			—
Transfer to credit-impaired financial assets		981			1,134			(2,115	)		—
Reversal (provision) of loss allowance		(1,749	)		(4,707	)		(6,329	)		(12,785	)
Charge-off		—			—			2,223			2,223
Disposal		—			—			751			751
Others		317			(1	)		(62,904	)		(62,588	)

Ending balance		(4,178	)		(9,133	)		(125,869	)		(139,180	)


	For the year ended December 31, 2021
	Stage 1			Stage 2			Stage 3			Total
Beginning balance		(3,666	)		(5,450	)		(74,179	)		(83,295	)
Transfer to 12-month expected credit losses		(228	)		217			11			—
Transfer to lifetime expected credit losses		147			(174	)		27			—
Transfer to credit-impaired financial assets		167			288			(455	)		—
Reversal (provision) of loss allowance		511			(464	)		4,664			4,711
Charge-off		—			—			9,965			9,965
Disposal		—			—			1,400			1,400
Others		(606	)		3			1,041			438

Ending balance		(3,675	)		(5,580	)		(57,526	)		(66,781	)

- 103 -

(10)	Changes in the gross carrying amount of other financial assets are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2022
	Stage 1			Stage 2			Stage 3			Total
Beginning balance		9,004,539			106,597			174,868			9,286,004
Transfer to 12-month expected credit losses		9,765			(9,749	)		(16	)		—
Transfer to lifetime expected credit losses		(38,248	)		38,265			(17	)		—
Transfer to credit-impaired financial assets		(1,484	)		(2,824	)		4,308			—
Charge-off		—			—			24			24
Disposal		(5	)		—			(917	)		(922	)
Net increase (decrease)		(88,214	)		(110,835	)		(99,748	)		(298,797	)
Changes due to business combinations		368			—			—			368

Ending balance		8,886,721			21,454			78,502			8,986,677


	For the year ended December 31, 2021
	Stage 1			Stage 2			Stage 3			Total
Beginning balance		7,267,426			76,418			188,187			7,532,031
Transfer to 12-month expected credit losses		8,909			(8,894	)		(15	)		—
Transfer to lifetime expected credit losses		(27,369	)		27,399			(30	)		—
Transfer to credit-impaired financial assets		(1,877	)		(1,638	)		3,515			—
Charge-off		—			—			(9,965	)		(9,965	)
Disposal		—			—			(1,716	)		(1,716	)
Net increase (decrease)		1,757,450			13,312			(5,108	)		1,765,654

Ending balance		9,004,539			106,597			174,868			9,286,004

- 104 -

11.

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

(1)	The fair value hierarchy

The fair value hierarchy for financial instruments is determined by the amount of observable market data. The specific financial instruments characteristics and market condition such as the existence of the transactions among market participants 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 assets or liabilities 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.

- 105 -

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


	December 31, 2022
	Level 1 (*)		Level 2 (*)		Level 3		Total
Financial assets:
Financial assets at FVTPL
Deposits		34,995		—		—		34,995
Debt securities		2,580,563		1,654,591		1,078		4,236,232
Equity securities		76,007		25		307,851		383,883
Capital contributions		—		—		1,976,474		1,976,474
Beneficiary certificates		45,394		2,398,592		1,458,776		3,902,762
Loans		—		794,723		104,505		899,228
Derivative assets		69,316		8,042,895		93,970		8,206,181
Other financial assets in foreign currency		—		—		41,679		41,679
Others		34,299		—		144,840		179,139

Sub-total		2,840,574		12,890,826		4,129,173		19,860,573

Financial assets at FVTOCI
Debt securities		9,895,456		22,250,302		—		32,145,758
Equity securities		382,257		—		557,065		939,322

Sub-total		10,277,713		22,250,302		557,065		33,085,080

Derivative assets (designated for hedging)		—		37,786		—		37,786

Total		13,118,287		35,178,914		4,686,238		52,983,439


Financial liabilities:
Financial liabilities at FVTPL
Deposits due to customers		35,161		—		—		35,161
Derivative liabilities		11,700		8,883,976		9,449		8,905,125
Securities sold		12,113		—		—		12,113

Sub-total		58,974		8,883,976		9,449		8,952,399

Derivative liabilities (designated for hedging)		—		202,911		—		202,911

Total		58,974		9,086,887		9,449		9,155,310

(*)

Among financial assets and financial liabilities measured at fair value, the amount transferred from Level 2 to Level 1 is 2,835,187 million Won. The Group recognizes transfers among levels at the end of reporting period in which events have occurred or conditions have changed. A change in the judgement of the active market where the financial product was traded resulted the transfer between levels.

- 106 -


	December 31, 2021
	Level 1 (*)		Level 2 (*)		Level 3		Total
Financial assets:
Financial assets at FVTPL
Deposits		65,072		—		—		65,072
Debt securities		817,584		1,923,538		2,117		2,743,239
Equity securities		25,879		—		303,985		329,864
Capital contributions		—		—		1,287,723		1,287,723
Beneficiary certificates		74,271		2,326,202		1,104,074		3,504,547
Loans		—		453,832		213,635		667,467
Derivative assets		10,911		4,762,872		29,348		4,803,131
Others		—		—		96,191		96,191

Sub-total		993,717		9,466,444		3,037,073		13,497,234

Financial assets at FVTOCI
Debt securities		5,578,455		32,548,522		—		38,126,977
Equity securities		411,357		—		581,455		992,812

Sub-total		5,989,812		32,548,522		581,455		39,119,789

Derivative assets (Designated for hedging)		—		106,764		—		106,764

Total		6,983,529		42,121,730		3,618,528		52,723,787


Financial liabilities:
Financial liabilities at FVTPL
Deposits due to customers		65,016		—		—		65,016
Derivative liabilities		10,259		4,552,368		4,641		4,567,268
Securities sold		211,408		29,766		—		241,174

Sub-total		286,683		4,582,134		4,641		4,873,458

Derivative liabilities (Designated for hedging)		—		27,584		—		27,584

Total		286,683		4,609,718		4,641		4,901,042

(*)	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.

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Financial assets and liabilities at FVTPL, financial liabilities at FVTPL designated as upon initial recognition, 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 and input variables for each type of financial instrument classified into level 2 in December 31, 2022 and 2021 are as follows:


	Valuation methods	Input variables

Debt securities	Fair value is measured by discounting the future cash flows of debt securities applying the risk-free market rate with credit spread.	Risk-free market rate and credit spread

Beneficiary certificates	The beneficiary certificates classified as Level 2 are MMF and are measured at the standard price.	Values of underlying assets such as bond

Derivatives	Fair value is measured by models such as option model (Closed form), DCF model, FDM and Monte Carlo Simulation.	Discount rate, values of underlying assets such as foreign exchange rate and stock prices, volatility, risk-free market rate, forward rate, etc.

Loans	The future cash flows of debt instruments are measured at a discount by applying the market interest rate applied to entities with similar creditworthiness to the debtor.	Risk-free market rate and credit spread

Valuation methods and input variables for each type of financial instrument classified into level 3 in December 31, 2022 and 2021 are as follows:


	Valuation methods	Input variables

Loans	Fair value is calculated by using Binomial Tree, LSMC and Discounted Cash Flow Model which is a valuation technique commonly used in the market taking into account value of underlying assets, volatility, discount rate.	Value of underlying assets, Volatility, Discount rate

Debt securities	The future cash flows of debt instruments are measured at a discount by applying the market interest rate applied to entities with similar creditworthiness to debt securities issuers. Fair value is measured by models such as LSMC(Least-Squares Monte Carlo), Hull-white.	Risk-free market rate, credit spread, discount rate originated credit grade, volatility of stock price, volatility of interest rate

Equity securities, capital contributions 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, Net Asset Value Method, LSMC, and Binomial Tree, Imputed Market Value Model more than one method is used given the characteristic of the subject of fair value measurement.	Risk-free market rate, market risk premium, corporate Beta, discount rate originated credit grade, stock prices, volatility of underlying asset, net asset value, volatility of stock price, volatility of interest rate, Capital increase amount, Fluctuation rate of real estate sale price, etc

Derivatives	Fair value is measured by models such as option model (Closed form), DCF model, FDM and Monte Carlo Simulation.	Discount rate, values of underlying assets such as foreign exchange rate and stock prices, volatility, etc.

Others	The fair value of the underlying asset, after calculating the fair value using the DCF model, etc., considering the price and volatility of the calculated underlying asset, is calculated using the binomial tree and least-squares Monte Carlo simulation (LSMC), which are commonly used valuation techniques in the market.	Stock prices, volatility of underlying assets, etc.

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


	Fair value measurement technique	Type	Significant unobservable inputs	Range(%)	Impact of changes in significant unobservable inputs on fair value measurement
Loans	Binomial Tree		Stock prices	46.53%	Variation of fair value increases as volatility of underlying asset and stock price increases.
	DCF model		Discount rate	1.98%~2.18%	Fair value decreases as discount rate increases.
Derivative assets	Option valuation model and others	Equity related	Correlation coefficient	0.21~0.67	Variation of fair value increases as correlation coefficient increases.
Derivative liabilities	Option valuation model and others	Equity related	Correlation coefficient	0.21~0.67	Variation of fair value increases as correlat ion coefficient increases.
			Volatility of underlying asset	11.74%~97.16%	Variation of fair value increases as volatility of underlying assets increases.
Equity securities, capital contributions, and beneficiary certificates	Binomial Tree		Stock prices, Volatility of underlying asset	28.40%	Variation of fair value increases as volatility of underlying asset and stock price increases.
	DCF model and others		Discount rate	0.00%~19.14%	Fair value increases as discount rate decreases.
			Terminal growth rate	0.00%, 1.00%	Fair value increases as terminal growth rate increases.
			Liquidation value	0.00%	Fair value increases as liquidation value increases.
Others	Binomial Tree		Stock prices, Volatility of underlying asset	20.15%~36.19%	Variation of fair value increases as volatility of underlying asset and stock price increases.

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.

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


	For the year ended December 31, 2022
	Beginning balance		Net income (loss) (*1)			Other comprehensive income		Purchases/ issuances			Disposals / settlements			Transfer to or out of Level 3 (*2)			Ending balance
Financial assets:
Financial assets at FVTPL
Debt securities		2,117		(40	)		—		—			(999	)		—			1,078
Equity securities		303,985		697			—		20,175			(16,974	)		(32	)		307,851
Capital contributions		1,287,723		103,376			—		703,160			(117,785	)		—			1,976,474
Beneficiary certificates		1,104,074		(2,922	)		—		98,420			259,204			—			1,458,776
Loans		213,635		17,544			—		802,092			(928,766	)		—			104,506
Derivative assets		29,348		64,359			—		582			(319	)		—			93,970
Other foreign currency financial assets		—		—					41,679			—			—			41,679
Others		96,191		16,744					40,836			(8,931	)		—			144,840

Sub-total		3,037,073		199,758			—		1,706,944			(814,570	)		(32	)		4,129,173

Financial assets at FVTOCI
Equity securities		581,455		—			2,084		2,357			(28,831	)		—			557,065

Total		3,618,528		199,758			2,084		1,709,301			(843,401	)		(32	)		4,686,238

Financial liabilities:
Financial liabilities at FVTPL
Derivative liabilities		4,641		8,058			—		(351	)		(2,899	)		—			9,449

Total		4,641		8,058			—		(351	)		(2,899	)		—			9,449

(*1)

For financial liabilities, positive numbers represent losses that increase balance and negative numbers represent gains that decrease balance. The gain amounting to 2,770 million Won for the year ended December 31, 2022, which is from financial assets and liabilities that the Group holds as at the end of the year.

(*2)

There were transfers between levels as the availability of observable market data for these financial instruments changed. The Group recognizes transfers among levels at the end of reporting period in which events have occurred or conditions have changed.

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	For the year ended December 31, 2021
	Beginning balance		Net income (loss) (*1)			Other comprehensive income		Purchases/ issuances			Disposals / settlements			Transfer to or out of Level 3 (*2)			Ending balance
Financial assets:
Financial assets at FVTPL
Debt securities		4,618		(431	)		—		1,000			(4,070	)		1,000			2,117
Equity securities		450,371		(24,501	)		—		33,570			(154,455	)		(1,000	)		303,985
Capital contributions		865,685		82,596			—		575,643			(236,201	)		—			1,287,723
Beneficiary certificates		1,917,811		10,347			—		86,224			(910,308	)		—			1,104,074
Loans		209,062		16,975			—		761,045			(773,447	)		—			213,635
Derivative assets		7,872		22,256			—		5,058			—			(5,838	)		29,348
Others		84,979		12,245			—		14,982			(16,548	)		533			96,191

Sub-total		3,540,398		119,487			—		1,477,522			(2,095,029	)		(5,305	)		3,037,073

Financial assets at FVTOCI
Equity securities		570,715		—			11,362		645			(1,267	)		—			581,455

Total		4,111,113		119,487			11,362		1,478,167			(2,096,296	)		(5,305	)		3,618,528

Financial liabilities:
Financial liabilities at FVTPL
Derivative liabilities		20,136		4,926			—		(3,979	)		(10,188	)		(6,254	)		4,641
Financial liabilities at FVTPL designated as upon initial recognition
Equity-linked securities		19,630		(102	)		—		—			(19,528	)		—			—

Total		39,766		4,824			—		(3,979	)		(29,716	)		(6,254	)		4,641

(*1)

For financial liabilities, positive numbers represent losses that increase balance and negative numbers represent gains that decrease balance. The gain amounting to 2,634 million Won for the year ended December 31, 2021, which is from financial assets and liabilities that the Group holds as at the end of the year.

(*2)

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(4)	Sensitivity analysis results on reasonable fluctuation of the significant unobservable input variables for the fair value of Level 3 financial instruments are as follows.

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

Meanwhile, among the financial instruments that are classified as Level 3 amounting to 4,695,688 million won and 3,623,168 million won as of December 31, 2022 and 2021 respectively, equity instruments of 3,196,703 million won and 3,030,775 million won whose carrying amount are considered to represent the reasonable approximation of fair value are excluded from the sensitivity analysis.

The sensitivity on fluctuation of input variables by financial instruments as of December 31, 2022 and 2021 is as follows (Unit: Korean Won in millions):


	December 31, 2022
	Net income (loss)					Other comprehensive income (loss)
	Favorable		Unfavorable			Favorable		Unfavorable
Financial assets:
Financial assets at FVTPL
Derivative assets (*1)		2,453		(1,993	)		—		—
Loans (*2)		203		(200	)		—		—
Debt securities		1		—			—		—
Equity securities (2) (3) (*4)		10,146		(8,079	)		—		—
Beneficiary certificates (*4)		737		(737	)		—		—
Others (*2)		2,860		(2,790	)		—		—
Financial assets at FVTOCI		—		—			—		—
Equity securities (3) (4)		—		—			24,370		(17,579	)

Total		16,400		(13,799	)		24,370		(17,579	)

Financial liabilities:
Financial liabilities at FVTPL
Derivative liabilities (*1)		41		(39	)		—		—

Total		41		(39	)		—		—

(*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)

Fair value changes of equity securities are calculated by increasing or decreasing stock prices (-10%~10%) and volatility (-10~10%). The stock prices and volatility are major unobservable variables.

(*3)

Fair value changes of equity securities are calculated by increasing or decreasing terminal growth rate (-0.5%~0.5%) and discount rate (-1~1%) 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 rate of real estate which is underlying assets and discount rate by 1%.

- 112 -


	December 31, 2021
	Net income (loss)					Other comprehensive income (loss)
	Favorable		Unfavorable			Favorable		Unfavorable
Financial assets:
Financial assets at FVTPL
Derivative assets (*1)		1,668		(1,191	)		—		—
Loans (*2)		682		(671	)		—		—
Debt securities		13		(12	)		—		—
Equity securities (2) (3) (*4)		6,348		(5,331	)		—		—
Beneficiary certificates (*4)		1,305		(1,171	)		—		—
Others (*2)		921		(876	)		—		—
Financial assets at FVTOCI
Equity securities (3) (4)		—		—			30,391		(23,865	)

Total		10,937		(9,252	)		30,391		(23,865	)

Financial liabilities:
Financial liabilities at FVTPL
Derivative liabilities (*1)		205		(264	)		—		—

Total		205		(264	)		—		—

(*1)

(*2)

Fair value changes of equity securities are calculated by increasing or decreasing stock prices (-10%~10%) and volatility (-10~10%). The stock prices and volatility are major unobservable variables.

(*3)

(*4)

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


	December 31, 2022
	Fair value								Carrying amount
	Level 1		Level 2		Level 3		Total		Carrying amount
Financial assets:
Securities at amortized cost		2,652,449		24,623,369		—		27,275,818		28,268,516
Loans and other financial assets at amortized cost		—		6,238,724		345,952,544		352,191,268		355,760,730
Financial liabilities:
Deposits due to customers		—		343,931,576		—		343,931,576		342,105,209
Borrowings		—		26,063,256		2,135,047		28,198,303		28,429,603
Debentures		—		42,918,411		—		42,918,411		44,198,486
Other financial liabilities		—		21,244,664		536,209		21,780,873		22,492,705


	December 31, 2021
	Fair value								Carrying amount
	Level 1		Level 2		Level 3		Total		Carrying amount
Financial assets:
Securities at amortized cost		2,122,401		14,921,119		—		17,043,520		17,086,274
Loans and other financial assets at amortized cost		—		3		346,871,245		346,871,248		348,885,617
Financial liabilities:
Deposits due to customers		—		318,070,829		—		318,070,829		317,899,871
Borrowings		—		23,393,520		1,270,305		24,663,825		24,755,459
Debentures		—		44,500,963		—		44,500,963		44,653,864
Other financial liabilities		—		23,154,733		379,534		23,534,267		23,827,821

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 by using valuation methods. Valuation methods and input variables for financial assets and liabilities that are measured at amortized cost are given as follows:


	Valuation methods	Input variables
Securities at amortized cost	The fair value is measured by discounting the projected cash flows of debt securities by applying risk-free market rate with credit spread.	Risk-free market rate and credit spread

Loans and other financial assets at amortized cost	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, credit spread and forward rate

- 114 -

(6)	Financial instruments by category

Carrying amounts of financial assets and liabilities by each category are as follows (Unit: Korean Won in millions):


	December 31, 2022
Financial assets	Financial asset at FVTPL		Financial assets at FVTOCI		Financial assets at amortized cost		Derivatives assets (Designated for hedging)		Total
Deposits		34,995		—		2,994,672		—		3,029,667
Securities		10,676,985		33,085,080		28,268,516		—		72,030,581
Loans		899,228		—		343,918,560		—		344,817,788
Derivative assets		8,206,181		—		—		37,786		8,243,967
Other financial assets		43,184		—		8,847,497		—		8,890,681

Total		19,860,573		33,085,080		384,029,245		37,786		437,012,684


	December 31, 2022
Financial liabilities	Financial liabilities at FVTPL		Financial liabilities at amortized cost		Derivatives liabilities (Designated for hedging)		Total
Deposits due to customers		35,161		342,105,209		—		342,140,370
Borrowings		12,113		28,429,603		—		28,441,716
Debentures		—		44,198,486		—		44,198,486
Derivative liabilities		8,905,125		—		202,911		9,108,036
Other financial liabilities		—		22,492,707		—		22,492,707

Total		8,952,399		437,226,005		202,911		446,381,315


	December 31, 2021
Financial assets	Financial asset at FVTPL		Financial assets at FVTOCI		Financial assets at amortized cost		Derivatives assets (Designated for hedging)		Total
Deposits		65,072		—		2,866,884		—		2,931,956
Securities		7,960,046		39,119,789		17,086,274		—		64,166,109
Loans		667,467		—		336,799,510		—		337,466,977
Derivative assets		4,803,131		—		—		106,764		4,909,895
Other financial assets		1,518		—		9,219,223		—		9,220,741

Total		13,497,234		39,119,789		365,971,891		106,764		418,695,678


	December 31, 2021
Financial liabilities	Financial liabilities at FVTPL		Financial liabilities at amortized cost		Derivatives liabilities (Designated for hedging)		Total
Deposits due to customers		65,016		317,899,871		—		317,964,887
Borrowings		241,174		24,755,459		—		24,996,633
Debentures		—		44,653,864		—		44,653,864
Derivative liabilities		4,567,268		—		27,584		4,594,852
Other financial liabilities		—		23,827,821		—		23,827,821

Total		4,873,458		411,137,015		27,584		416,038,057

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(7)	Income or expense from financial instruments by category

Income or expense from financial assets and liabilities by each category during the years ended December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2022
	Interest Income (expense)			Fees and Commissions Income (expense)			Reversal (provision) of credit loss			Gain or loss on transactions and valuation			Dividends, etc.		Total
Financial assets at FVTPL		106,698			(134	)		—			238,502			136,136		481,202
Financial assets at FVTOCI		632,615			1,606			827			(21,498	)		23,846		637,396
Securities at amortized cost		515,246			—			(3,151	)		—			—		512,095
Loans and other financial assets at amortized cost		13,399,990			600,902			(881,668	)		74,204			—		13,193,428
Financial liabilities at amortized cost		(5,950,277	)		2,094			—			—			—		(5,948,183	)
Net derivatives (designated for hedging)		—			—			—			78,822			—		78,822

Total		8,704,272			604,468			(883,992	)		370,030			159,982		8,954,760


	For the year ended December 31, 2021
	Interest Income (expense)			Fees and Commissions Income (expense)			Reversal (provision) of credit loss			Gain or loss on transactions and valuation			Dividends, etc.		Total
Financial assets at FVTPL		45,803			(156	)		—			325,751			284,683		656,081
Financial assets at FVTOCI		381,814			1,343			(4,909	)		32,624			24,528		435,400
Securities at amortized cost		324,920			—			(664	)		—			—		324,256
Loans and other financial assets at amortized cost		9,142,212			494,296			(551,957	)		107,317			—		9,191,868
Financial liabilities at amortized cost		(2,901,592	)		2,205			—			—			—		(2,899,387	)
Net derivatives (designated for hedging)		—			—			—			72,493			—		72,493

Total		6,993,157			497,688			(557,530	)		538,185			309,211		7,780,711

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12.

DERECOGNITION AND OFFSET OF FINANCIAL INSTRUMENTS

(1)	Derecognition of financial instruments

Transferred financial assets that do not meet the condition of derecognition in their entirety.

Bonds sold 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):


		December 31, 2022		December 31, 2021
Assets transferred	Financial assets at FVTPL		214,577		248,009
	Financial assets at FVTOCI		583,198		127,065
	Securities at amortized cost		1,171,300		38,995

	Total		1,969,075		414,069

Related liabilities	Bonds sold under repurchase agreements		1,898,744		749,976

Securities loaned

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

December 31, 2022

December 31, 2021

Loaned to

Financial assets at FVTOCI

Korean treasury and government bonds

98,027

98,535

Korea Securities Finance Corporation

Liquidity of financial assets

As of December 31, 2022 and 2021, the consolidated structured companies issued asset-backed securities with loans and corporate bonds held by the Group as liquid assets, and the Group bear related risks through the purchase agreements or credit contributions. The transaction details of the transfer of the financial instrument are as follows:


		December 31, 2022		December 31, 2021
		Carrying amount		Carrying amount
Assets transferred	Financial assets at FVPL		49,808		151,930
	Loans at amortized cost		4,640,182		4,682,882
Related liabilities	Asset-backed borrowings		231,800		2,424,080
	Asset-backed bonds		1,209,364		978,274

(*)

The carrying amount is the amount before the allowance for bad debts.

On the other hand, the details of transferred financial assets that have not been removed, such as bonds sold under the repurchase agreement and loan securities, are also described in Note 18. The Group does not have financial instruments that are continuously involved.

- 117 -

(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 K-IFRS 1032. Therefore, the total number of uncollected domestic exchange receivables has been offset with a part of unpaid domestic exchange payables, and they have been disclosed in loans at amortized cost and other financial assets and other financial liabilities of the Group’s statements of financial position respectively.

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

The Group has entered into a resale and repurchase agreement and accounted it as a collateralized borrowing. The Group has also entered into a resale and purchase agreement and accounted it as a secured loans. The Group under the repurchase agreements has an 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 K-IFRS 1032. The Group disclosed bonds sold under repurchase agreements as borrowings and bonds purchased under resale agreements as loan at amortized cost and other financial assets.

As of December 31, 2022 and 2021, the financial instruments to be offset and may be covered by master netting agreements and similar agreements are as follows (Unit: Korean Won in millions):


	December 31, 2022
	Gross amounts of recognized financial assets		Gross amounts of recognized financial assets setoff		Net amounts of consolidated financial assets presented		Related amounts not setoff in the consolidated statement of financial position				Net amounts
	Gross amounts of recognized financial assets		Gross amounts of recognized financial assets setoff		Net amounts of consolidated financial assets presented		Netting agreements and others		Cash collateral received and others		Net amounts
Financial assets:
Derivative assets (*1)		7,032,465		—		7,032,465		9,175,416		748,981		1,616,779
Receivable spot exchange (*2)		4,508,711		—		4,508,711
Bonds purchased under resale agreements (*2)		6,793,938		—		6,793,938		6,793,938		—		—
Domestic exchange settlement debits (2) (5)		39,787,371		39,209,452		577,919		—		—		577,919

Total		58,122,485		39,209,452		18,913,033		15,969,354		748,981		2,194,698

Financial liabilities:
Derivative liabilities (*1)		7,652,440		—		7,652,440		10,043,092		145,268		1,972,695
Payable spot exchange (*3)		4,508,615		—		4,508,615
Bonds sold under repurchase agreements (*4)		2,313,044		—		2,313,044		2,313,044		—		—
Domestic exchange settlement credits (3) (5)		43,841,373		39,209,452		4,631,921		2,504,062		—		2,127,859

Total		58,315,472		39,209,452		19,106,020		14,860,198		145,268		4,100,554

(*1)	The items include derivative assets and liabilities held for trading and designated for hedging.

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

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

(*4)	The items are included in borrowings.

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

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	December 31, 2021
	Gross amounts of recognized financial assets		Gross amounts of recognized financial assets setoff		Net amounts of consolidated financial assets presented		Related amounts not setoff in the consolidated statement of financial position				Net amounts
	Gross amounts of recognized financial assets		Gross amounts of recognized financial assets setoff		Net amounts of consolidated financial assets presented		Netting agreements and others		Cash collateral received and others		Net amounts
Financial assets:
Derivative assets (*1)		4,172,737		—		4,172,737		8,260,784		552,071		1,275,186
Receivable spot exchange (*2)		5,915,304		—		5,915,304
Bonds purchased under resale agreements (*2)		10,332,858		—		10,332,858		10,332,858		—		—
Domestic exchange settlement debits (2) (5)		42,358,138		42,275,583		82,555		—		—		82,555

Total		62,779,037		42,275,583		20,503,454		18,593,642		552,071		1,357,741

Financial liabilities:
Derivative liabilities (*1)		3,708,263		—		3,708,263		8,755,492		114,716		754,855
Payable spot exchange (*3)		5,916,800		—		5,916,800
Bonds sold under repurchase agreements (*4)		749,976		—		749,976		749,976		—		—
Domestic exchange settlement credits (3) (5)		48,982,056		42,275,583		6,706,473		3,401,251		—		3,305,222

Total		59,357,095		42,275,583		17,081,512		12,906,719		114,716		4,060,077

(*1)	The items include derivative assets and liabilities held for trading and designated for hedging.

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

(*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.

- 119 -

13.

INVESTMENTS IN JOINT VENTURES AND ASSOCIATES

(1)	Investments in associates accounted for using the equity method of accounting are as follows:


		Percentage of ownership (%)
Joint ventures and associates (*4)	Main business	December 31, 2022		December 31, 2021		Location		Financial statements as of
Woori Bank
W Service Networks Co., Ltd. (*1)	Freight & staffing services		4.9		4.9		Korea		2022.11.30	(*5)
Korea Credit Bureau Co., Ltd. (*2)	Credit information		9.9		9.9		Korea		2022.12.31
Korea Finance Security Co., Ltd. (*1)	Security service		15.0		15.0		Korea		2022.11.30	(*5)
Wongwang Co., Ltd. (*3)	Wholesale and real estate		29.0		29.0		Korea		—
Sejin Construction Co., Ltd. (*3)	Construction		29.6		29.6		Korea		—
ARES-TECH Co., Ltd. (*3)	Electronic component manufacturing		23.4		23.4		Korea		—
Reading Doctors Co., Ltd. (3)(11)	Other services		—		35.4		Korea		—
Cultizm Korea LTD Co., Ltd. (3) (11)	Wholesale and retail sales		—		31.3		Korea		—
NK Eng Co., Ltd. (*3)	Manufacturing		23.1		23.1		Korea		—
Beomgyo., Ltd. (*3)	Telecommunication equipment retail sales		23.1		23.1		Korea		—
Woori Growth Partnerships New Technology Private Equity Fund	Other financial services		23.1		23.1		Korea		2022.12.31
2016KIF-IMM Woori Bank Technology Venture Fund	Other financial services		20.0		20.0		Korea		2022.12.31
K BANK Co., Ltd. (*2)	Finance		12.6		12.6		Korea		2022.12.31
Woori Bank-Company K Korea Movie Asset Fund (*9)	Other financial services		25.0		25.0		Korea		2022.12.31
Partner One Value Up I Private Equity Fund	Other financial services		23.3		23.3		Korea		2022.12.31
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership	Other financial services		20.0		20.0		Korea		2022.12.31
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund	Other financial services		25.0		25.0		Korea		2022.12.31
LOTTE CARD Co., Ltd.	Credit card and installment financing		20.0		20.0		Korea		2022.9.30	(*5)
Together-Korea Government Private Pool Private Securities Investment Trust No. 3	Other financial services		100.0		100.0		Korea		2022.12.31
Genesis Environmental Energy Company 1st Private Equity Fund(*8)	Trust and collective investment		—		24.8		Korea		—
Union Technology Finance Investment Association	Trust and collective investment		29.7		29.7		Korea		2022.12.31
Dicustody Co., Ltd.(*2)	Other information technology and computer operation related services		1.0		1.0		Korea		2022.12.31
Orient Shipyard Co., Ltd.(*3)	Manufacture of sections for ships		22.7		—		Korea		2022.12.31
Joongang Network Solution Co., Ltd.(*3)	Other information technology and computer operation related services		25.3		—		Korea		—

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		Percentage of ownership (%)
Joint ventures and associates (*4)	Main business	December 31, 2022		December 31, 2021		Location		Financial statements as of
BTS 2nd Private Equity Fund	Other financial services		20.0		—		Korea		2022.12.31
STASSETS FUND III	Other financial services		28.3		—		Korea		2022.12.31
Woori Bank (*6)
Japanese Hotel Real Estate Private Equity Fund No.2	Other financial services		19.9		19.9		Korea		2022.12.31
Woori Seoul Beltway Private Special Asset Fund No.1	Trust and collective investment		25.0		25.0		Korea		2022.12.31
Woori Multi-Return Securities Investment Trust 3 (Balanced Bond) (*8)	Collective investment business		—		20.0		Korea		—
Woori Short-term Bond Securities Investment Trust(Bond) ClassC-F	Collective investment business		27.9		14.5		Korea		2022.12.31
Woori Safe Plus General Type Private Investment Trust S-8(Bond)	Collective investment business		9.2		—		Korea		2022.12.31
Woori Financial Capital Co., Ltd.
WOORI TAERIM 1st Fund	Other financial services		25.6		25.6		Korea		2022.12.31
Portone-Cape Fund No.1	Other financial services		20.0		20.0		Korea		2022.12.31
KIWOOM WOORI Financial 1st Fund (*7)	Other financial services		9.1		9.1		Korea		2022.12.31
DeepDive WOORI 2021-1 Financial Investment Fund (*7)	Other financial services		11.9		11.9		Korea		2022.12.31
Darwin Green Packaging Private Equity Fund	Other financial services		20.4		20.4		Korea		2022.12.31
DS Power Semicon Private Equity Fund	Other financial services		21.0		—		Korea		2022.12.31
Koreawide partners 2nd Private Equity Fund	Other financial services		26.7		—		Korea		2022.12.31
Woori Investment Bank Co., Ltd. (*6)
Woori FirstValue Private Real Estate Fund No.2	Real estate business		12.0		12.0		Korea		2022.12.31
WooriG Real Infrastructure Blind General Type Private Placement Investment Trust	Investment trust and discretionary investment business		0.1		0.3		Korea		2022.12.31
Woori Asset Management Co. Ltd.
Woori BIG2 Plus Securities Investment Trust(Balanced Bond) (*12)	Collective investment business		23.1		—		Korea		2022.12.31
Woori Together TDF 2025 (*12)	Collective investment business		23.6		—		Korea		2022.12.31
Woori Together TDF 2030 (*12)	Collective investment business		23.8		—		Korea		2022.12.31
Woori Star50 feeder fund(H) (*12)	Collective investment business		17.9		—		Korea		2022.12.31
Woori Private Equity Asset Management Co., Ltd.
Woori Hanhwa Eureka Private Equity Fund (*10)	Other financial services		—		0.8		Korea		—

- 121 -


		Percentage of ownership (%)
Joint ventures and associates (*4)	Main business	December 31, 2022		December 31, 2021		Location		Financial statements as of
Aarden Woori Apparel 1st Private Equity Fund (*2)	Other financial services		0.5		0.5		Korea		2022.12.31
Woori Dyno 1st Private Equity Fund (*2)	Other financial services		19.6		—		Korea		2022.12.31
Australia Green Energy 1st PEF (*2)	Other financial services		4.0		—		Korea		2022.12.31
Japanese Hotel Real Estate Private Equity Fund 1
Godo Kaisha Oceanos 1	Other financial services		47.8		47.8		Japan		2022.10.31	(*5)
Woori G Japan Private Placement Real Estate Master Investment Trust No.2
Woori Zip 1	Other financial services		64.0		63.9		Japan		2022.9.30	(*5)
Woori Zip 2	Other financial services		64.0		63.8		Japan		2022.9.30	(*5)
Woori bank and Woori card Co., Ltd. (*6)
Dongwoo C & C Co., Ltd. (*3)	Construction		24.5		24.5		Korea		—
SJCO Co., Ltd. (*3)	Aggregate transportation and wholesale		29.8		29.7		Korea		—
G2 Collection Co., Ltd. (*3)	Wholesale and retail sales		29.2		29.2		Korea		—
The Base Enterprise Co., Ltd. (3) (11)	Manufacturing		—		48.4		Korea		—
Kyesan Engineering Co., Ltd. (*3)	Construction		23.3		23.3		Korea		—
Good Software Lap Co., Ltd. (*3)	Service		29.4		29.4		Korea		—
QTS Shipping Co., Ltd. (3)(11)	Complex transportation brokerage		—		49.8		Korea		—
DAEA SNC Co., Ltd. (*3)	Wholesale and retail sales		25.5		25.5		Korea		—
Force TEC Co., Ltd.	Manufacturing		24.5		24.5		Korea		2022.9.30	(*5)
PREXCO Co., Ltd. (*3)	Manufacturing		28.1		28.1		Korea		—
JiWon Plating Co., Ltd. (*3)	Plating		20.8		20.8		Korea		—
Youngdong Sea Food Co., Ltd. (*3)	Processed sea food manufacturing		24.5		24.5		Korea		—
KUM HWA Co., Ltd.	Telecommunication equipment retail sales		20.1		20.1		Korea		2022.09.30	(*5)
Jinmyung Plus Co., Ltd.	Manufacturing		21.3		21.3		Korea		2022.09.30	(*5)
Woori bank and Woori Financial Capital Co., Ltd. (*6)
JC Assurance No.2 Private Equity Fund	Other financial services		23.5		24.4		Korea		2022.09.30	(*5)
Dream Company Growth no.1 PEF	Other financial services		27.8		27.8		Korea		2022.12.31
HMS-Oriens 1st Fund	Other financial services		22.8		22.8		Korea		2022.12.31
Woori G Senior Loan Private Placement Investment Trust No.1	Collective investment business		21.7		21.7		Korea		2022.12.31
Genesis Eco No.1 Private Equity Fund	Other financial services		29.0		29.0		Korea		2022.12.31

- 122 -


		Percentage of ownership (%)
Joint ventures and associates (*4)	Main business	December 31, 2022		December 31, 2021		Location		Financial statements as of
Paratus Woori Material Component Equipment joint venture company	Other financial services		29.9		29.9		Korea		2022.12.31
Midas No. 8 Private Equity Joint Venture Company	Other financial services		28.5		28.5		Korea		2022.12.31
Orchestra Private Equity Fund IV	Other financial services		28.2		—		Korea		2022.12.31
Synaptic Green No.1 PEF	Other financial services		21.1		—		Korea		2022.12.31
IGEN2022No. 1 Private Equity Fund	Other financial services		24.8		—		Korea		2022.12.31
Woori Bank and Woori Investment Bank Co., Ltd. (*6)
PCC-Woori LP Secondary Fund	Other financial services		38.8		38.8		Korea		2022.12.31
Woori bank and Woori Asset Management Co., Ltd. (*6)
Woori High Plus Short-term High Graded ESG Bond Sec Feeder Inv Trust 1 (*10)	Collective investment business		—		27.5		Korea		—
Woori Bank and Woori Private Equity Asset Management Co., Ltd. (*6)
Woori-Q Corporate Restructuring Private Equity Fund	Other financial services		35.6		38.1		Korea		2022.12.31
Woori Bank, Woori Financial Capital Co., Ltd., Woori Investment Bank Co., Ltd. and Woori Private Equity Asset Management Co., Ltd. (*6)
Woori-Shinyoung Growth-Cap Private Equity Fund I	Other financial services		35.0		35.0		Korea		2022.12.31

(*1)	Most of the significant business transactions of associates are with the Group as of December 31, 2022 and 2021.

(*2)	The Group can participate in decision-making body and exercise significant influence over financial policies and operational policies decision making of the associates.

(*3)	There is no investment balance as of December 31, 2022 and 2021.

(*4)	Woori G Oncorp Corporate support of Major Industry General Type Private Placement Investment Trust (Type 2) and other 13 joint ventures and associates can exercise significant influence but was classified as an item measured at fair value through profit or loss.

(*5)

The equity method was applied using the most recent financial statements available from the settlement date because no financial statements were available at the end of the reporting period and the significant transactions or events that occurred between the end of the reporting period of the associate and the end of the reporting period of the subsidiary were duly reflected.

(*6)	Two or more subsidiaries may invest or operate to exert significant influence on the decision-making process for activities related to the investee.

(*7)	The Group can participate as a co-operator to exert significant influence.

(*8)	It was excluded due to liquidation.

(*9)	It was dissoluted and will be liquidated.

(*10)

It was excluded from associates during the period.

(*11)

It was excluded as Woori Bank sold its shares during the period.

(*12)

It was reclassified to associate from subsidiary resulted from the loss of control along with the changes in percentage of ownership.

- 123 -

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


	For the year ended December 31, 2022
	Acquisition cost		January 1, 2022		Share of profits(losses) and others			Acquisition		Disposal/ Reclassification			Dividends			Change in capital			December 31, 2022
W Service Networks Co., Ltd.		108		183		29			—		—			(4	)		—			208
Korea Credit Bureau Co., Ltd.		3,313		9,423		(3,714	)		—		—			—			—			5,709
Korea Finance Security Co., Ltd.		3,267		3,101		(727	)		—		—			—			—			2,374
Woori Growth Partnerships New Technology Private Equity Fund		12,942		12,448		490			—		(2,049	)		—			—			10,889
2016KIF-IMM Woori Bank Technology Venture Fund		7,594		12,630		(1,619	)		—		(801	)		(736	)		—			9,474
K BANK Co., Ltd.		236,232		239,493		11,854			—		—			—			(3,558	)		247,789
Woori Bank-Company K Korea Movie Asset Fund		—		345		71			—		—			(177	)		—			239
Partner One Value Up I Private Equity Fund		5,039		6,576		(2,298	)		—		—			—			—			4,278
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		7,556		11,153		1,312			—		(2,180	)		—			—			10,285
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		4,355		4,254		1			100		—			—			—			4,355
LOTTE CARD Co.,Ltd.		346,810		458,295		58,400			—		—			(12,960	)		10,396			514,131
Together-Korea Government Private Pool Private Securities Investment Trust No. 3		10,000		10,070		173			—		—			—			—			10,243
Genesis Environmental Energy Company 1st Private Equity Fund		—		4,126		(41	)		—		(3,738	)		(347	)		—			—
Union Technology Finance Investment Association		14,637		12,388		187			2,250		(363	)		—			—			14,462
Dicustody Co., Ltd.		1		1		—			—		—			—			—			1
Orient Shipyard Co., Ltd.		—		—		—			—		—			—			—			—
BTS 2nd Private Equity Fund		3,026		—		(145	)		3,026		—			—			—			2,881
STASSETS FUND III		1,500		—		(270	)		1,500		—			—			—			1,230
Japanese Hotel Real Estate Private Equity Fund No.2		3,174		3,196		194			—		—			(299	)		(236	)		2,855
Woori Seoul Beltway Private Special Asset Fund No.1		9,791		7,551		246			2,312		—			(235	)		—			9,874
Woori Multi-Return Securities Investment Trust 3 (Balanced Bond)		—		10,023		—			—		(9,950	)		(73	)		—			—
Woori Short-term Bond Securities Investment Trust(Bond) ClassC-F		110,000		151,822		2,312			50,000		(90,137	)		(1,972	)		—			112,025
Woori Safe Plus General Type Private Investment Trust S-8(Bond)		10,000		—		230			10,000		—			(48	)		—			10,182
WOORI TAERIM 1st Fund		1,100		991		(3	)		—		—			—			—			988
Portone-Cape Fund No.1		340		489		(25	)		—		—			—			—			464
KIWOOM WOORI Financial 1st Investment Fund		1,000		973		(20	)		—		—			—			—			953
DeepDive WOORI 2021-1 Financial Investment Fund		900		993		(12	)		—		(100	)		(3	)		—			878
Darwin Green Packaging Private Equity Fund		4,000		3,957		388			—		—			(400	)		—			3,945
DS Power Semicon Private Equity Fund		3,000		—		245			3,000		—			(269	)		—			2,976

- 124 -


	For the year ended December 31, 2022
	Acquisition cost		January 1, 2022		Share of profits(losses) and others			Acquisition		Disposal/ Reclassification			Dividends			Change in capital			December 31, 2022
Koreawide partners 2nd Private Equity Fund		20,000		—		—			20,000		—			—			—			20,000
Woori FirstValue Private Real Estate Fund No.2		9,000		763		(6	)		—		(199	)		—			—			558
WooriG Real Infrastructure Blind General Type Private Placement Investment Trust		100		100		2			—		—			—			—			102
Woori BIG2 Plus Securities Investment Trust(Balanced Bond)		1,200		—		(161	)		—		1,235			—			—			1,074
Woori Together TDF 2025		2,000		—		(202	)		—		2,192			—			—			1,990
Woori Together TDF 2030		2,000		—		(214	)		—		2,247			—			—			2,033
WOORI Star50 feeder fund(H)		200		—		(5	)		—		131			—			—			126
Woori Hanhwa Eureka Private Equity Fund		—		327		(48	)		—		(164	)		(115	)		—			—
Aarden Woori Apparel 1st Private Equity Fund		100		99		(2	)		—		—			—			—			97
Woori Dyno 1st Private Equity Fund		2,000		—		(6	)		2,000		—			—						1,994
Australia Green Energy 1st PEF		4,913		—		(55	)		4,913		—			—			—			4,858
Godo Kaisha Oceanos 1		10,800		9,905		84			—		—			(1,049	)		(152	)		8,788
Woori Zip 1		9,254		10,496		(138	)		—		(873	)		—			(795	)		8,690
Woori Zip 2		12,928		14,732		(127	)		—		(1,309	)		—			(1,116	)		12,180
Force TEC Co., Ltd. (*)		—		—		56			—		—			—			(56	)		—
KUM HWA Co., Ltd. (*)		—		—		—			—		—			—			—			—
Jinmyung Plus Co., Ltd.		—		—		10			—		—			—			—			10
JC Assurance No.2 Private Equity Fund		29,349		17,728		(17,728	)		—		—			—			—			—
Dream Company Growth no.1 PEF		7,412		7,914		418			—		—			(471	)		—			7,861
HMS-Oriens 1st Fund		12,000		12,007		1,245			—		—			—			—			13,252
WooriG Senior Loan General Type Private Investment Trust No.1		80,268		88,029		3,788			14,073		(20,322	)		(3,707	)		—			81,861
Genesis Eco No.1 Private Equity Fund		12,000		11,120		(99	)		195		—			—			—			11,216
Paratus Woori Material Component Equipment joint venture company		17,700		17,493		(243	)		—		—			—			—			17,250
Midas No. 8 Private Equity Joint Venture Company		18,735		18,968		275			—		—			(530	)		—			18,713
Orchestra Private Equity Fund IV		9,878		—		197			10,000		(122	)		(377	)		—			9,698
Synaptic Green No.1 PEF		8,000		—		(207	)		8,000		—			—			—			7,793
IGEN2022No. 1 Private Equity Fund		7,822		—		650			8,000		(475	)		(165	)		—			8,010
PCC-Woori LP Secondary Fund		10,440		12,350		674			3,440		(3,480	)		—			—			12,984
Woori High Plus Short-term High Graded ESG Bond Sec Feeder Inv Trust 1		—		73,787		—			—		(73,598	)		(189	)		—			—
Woori-Q Corporate Restructuring Private Equity Fund		27,063		46,155		(288	)		536		(18,867	)		—			—			27,536
Woori-Shinyoung Growth-Cap Private Equity Fund I		17,018		28,713		14,561			—		—			—			—			43,274

		1,131,865		1,335,167		69,689			143,345		(222,922	)		(24,126	)		4,483			1,305,636

(*)

As a result of discontinuation of the equity method, related companies’ losses amount not recognized is 665 million Won for Force TEC Co., Ltd. 3,743 million Won for Orient Shipyard Co., Ltd. and 0.2 million Won for KUM HWA Co., Ltd. and cumulated amount is 1,462 million Won for Force TEC Co., Ltd. 3,743 million Won for Orient Shipyard Co., Ltd. and 2 million Won for KUM HWA Co., Ltd.

- 125 -


	For the year ended December 31, 2021
	Acquisition cost		January 1, 2021		Share of profits(losses) and others			Acquisition		Disposal/ Reclassification			Dividends			Change in capital			December 31, 2021
W Service Networks Co., Ltd.		108		191		(4	)		—		—			(4	)		—			183
Korea Credit Bureau Co., Ltd.		3,313		8,125		1,388			—		—			(90	)		—			9,423
Korea Finance Security Co., Ltd.		3,267		3,066		35			—		—			—			—			3,101
Woori Growth Partnerships New Technology Private Equity Fund		14,991		15,032		(637	)		—		(1,947	)		—			—			12,448
2016KIF-IMM Woori Bank Technology Venture Fund		8,396		13,238		3,520			—		(3,497	)		(631	)		—			12,630
K BANK Co., Ltd. (*1)		236,232		174,097		67,553			—		—			—			(2,157	)		239,493
Smart Private Equity Fund No.2		—		1,481		(797	)		—		(684	)		—			—			—
Woori Bank-Company K Korea Movie Asset Fund		—		2,788		137			—		(2,100	)		(480	)		—			345
Partner One Value Up I Private Equity Fund		5,039		9,816		2,521			—		(4,961	)		(800	)		—			6,576
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		9,736		9,756		1,417			5,040		(5,060	)		—			—			11,153
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		4,255		4,129		—			125		—			—			—			4,254
LOTTE CARD Co.,Ltd.		346,810		422,832		39,301			—		—			(10,374	)		6,536			458,295
Together-Korea Government Private Pool Private Securities Investment Trust No. 3		10,000		10,023		47			—		—			—			—			10,070
Genesis Environmental Energy Company 1st Private Equity Fund		3,738		3,979		147			—		—			—			—			4,126
Union Technology Finance Investment Association		12,750		4,485		(347	)		8,250		—			—			—			12,388
Dicustody Co., Ltd.		1		—		—			1		—			—			—			1
Japanese Hotel Real Estate Private Equity Fund No.2		3,291		3,234		237			—		—			(201	)		(74	)		3,196
Woori G Clean Energy No.1		—		1,024		—			1,462		(2,338	)		(148	)		—			—
Woori Goseong Power EBL Private Special Asset Fund		—		15,118		227			—		(15,118	)		(370	)		143			—
Woori Seoul Beltway Private Special Asset Fund No.1		7,513		5,613		124			1,935		—			(121	)		—			7,551
Woori Corporate Private Securities Fund 1 (Bond)		—		—		—			10,000		(10,000	)		—			—			—
Woori G Star Private Placement Investment Trust No.33 [FI]		—		—		—			20,000		(20,000	)		—			—			—
Woori Multi-Return Securities Investment Trust 3 (Balanced Bond)		10,000		—		23			10,000		—			—			—			10,023
Woori Short-term Bond Securities Investment Trust(Bond) ClassC-F		150,000		—		1,822			150,000		—			—			—			151,822
WOORI TAERIM 1st Fund		1,100		283		708			—		—			—			—			991
Portone-Cape Fund No.1		340		960		189			—		(660	)		—			—			489
KIWOOM WOORI Financial 1st Investment Fund		1,000		994		(21	)		—		—			—			—			973

- 126 -


	For the year ended December 31, 2021
	Acquisition cost		January 1, 2021		Share of profits(losses) and others			Acquisition		Disposal/ Reclassification			Dividends			Change in capital			December 31, 2021
DeepDive WOORI 2021-1 Financial Investment Fund		1,000		—		(7	)		1,000		—			—			—			993
Darwin Green Packaging Private Equity Fund		4,000		—		(43	)		4,000		—			—			—			3,957
Woori FirstValue Private Real Estate Fund No.2		9,000		2,130		(637	)		—		—			(730	)		—			763
WooriG Real Infrastructure Blind General Type Private Placement Investment Trust		100		—		—			100		—			—			—			100
Woori High plus G.B. Securities Feeder Fund1(G.B.)		—		6,076		—			—		(6,076	)		—			—			—
Woori Star50 Master Fund ClassC-F		—		184		(4	)		—		(180	)		—			—			—
Woori Hanhwa Eureka Private Equity Fund		164		403		138			—		(214	)		—			—			327
Aarden Woori Apparel 1st Private Equity Fund		100		—		(1	)		100		—			—			—			99
Godo Kaisha Oceanos 1		10,800		10,193		127			—		—			(370	)		(45	)		9,905
Woori Zip 1		10,143		—		(26	)		16,380		(6,237	)		—			379			10,496
Woori Zip 2		14,254		—		(50	)		22,883		(8,628	)		—			527			14,732
Force TEC Co., Ltd. (*2)		—		393		(393	)		—		—			—			—			—
KUM HWA Co., Ltd. (*2)		—		—		—			—		—			—			—			—
Jinmyung Plus Co., Ltd.		—		—		—			—		—			—			—			—
JC Assurance No.2 Private Equity Fund		29,349		29,050		(11,621	)		299		—			—			—			17,728
Dream Company Growth no.1 PEF		7,706		7,705		680			—		—			(471	)		—			7,914
HMS-Oriens 1st Fund		12,000		12,000		7			—		—			—			—			12,007
WooriG Senior Loan General Type Private Investment Trust No.1		87,382		52,045		2,959			38,757		(3,060	)		(2,672	)		—			88,029
Genesis Eco No.1 Private Equity Fund		11,805		—		(685	)		11,805		—			—			—			11,120
Paratus Woori Material Component Equipment joint venture company		17,700		—		(207	)		17,700		—			—			—			17,493
Midas No. 8 Private Equity Joint Venture Company		19,000		—		(32	)		19,000		—			—			—			18,968
PCC-Woori LP Secondary Fund		10,100		8,128		1,697			2,525		—			—			—			12,350
Woori High Plus Short-term High Graded ESG Bond Sec Feeder Inv Trust 1		70,988		93,474		921			20,765		(38,870	)		(2,503	)		—			73,787
Woori-Q Corporate Restructuring Private Equity Fund		45,394		22,904		1,002			25,246		(2,997	)		—			—			46,155
Woori-Shinyoung Growth-Cap Private Equity Fund I		17,218		38,342		20,813			12,799		(32,415	)		(10,826	)		—			28,713

		1,210,083		993,291		132,228			400,172		(165,042	)		(30,791	)		5,309			1,335,167

(*1)	Included 70,120 million won of deemed gain on disposal in accordance with the decrease in percentage of ownership from disproportionate contribution for the year ended December 31, 2021.

(*2)	As a result of discontinuation of the equity method, related companies’ losses amount not recognized is 797 million Won for Force TEC Co., Ltd. and 2 million won for KUM HWA Co., Ltd.

- 127 -

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


	December 31, 2022
	Assets	Liabilities	Operating revenue			Net income (loss)			Other comprehensive income(loss)			Total comprehensive income(loss)
W Service Networks Co., Ltd.	7,052	2,825		19,697			1,215			—			1,215
Korea Credit Bureau Co., Ltd.	155,165	100,065		144,907			13,809			—			13,809
Korea Finance Security Co., Ltd.	28,792	12,964		47,043			(3,856	)		—			(3,856	)
Woori Growth Partnerships New Technology Private Equity Fund	47,394	208		2,978			2,185			—			2,185
2016KIF-IMM Woori Bank Technology Venture Fund	47,979	609		665			(7,839	)		—			(7,839	)
K BANK Co., Ltd.	16,694,289	14,896,426		491,880			91,059			(32,156	)		58,903
Woori Bank-Company K Korea Movie Asset Fund (*1)	989	33		462			324			—			324
Partner One Value Up I Private Equity Fund	18,395	—		(9,431	)		(9,831	)		—			(9,831	)
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership	51,804	385		8,092			7,288			—			7,288
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund	15,811	95		1			(383	)		—			(383	)
LOTTE CARD Co., Ltd. (*2)	19,983,059	17,179,093		1,925,577			268,096			43,162			311,258
Together-Korea Government Private Pool Private Securities Investment Trust No. 3	10,246	1		218			170			—			170
Union Technology Finance Investment Association	48,991	299		2,300			632			—			632
Dicustody Co., Ltd.	95	—		—			(3	)		—			(3	)
Orient Shipyard Co., Ltd.	10,832	27,225		—			(16,467	)		—			(16,467	)
BTS 2nd Private Equity Fund	15,012	608		1			(725	)		—			(725	)
STASSETS FUND III	4,660	313		37			(953	)		—			(953	)
Japanese Hotel Real Estate Private Equity Fund 2	14,387	13		1,050			968			(1,186	)		(218	)
Woori Seoul Beltway Private Special Asset Fund No.1	39,497	2		1,028			984			—			984
Woori Short-term Bond Securities Investment Trust(Bond) ClassC-F	468,357	67,022		14,189			11,804			—			11,804
Woori Safe Plus General Type Private Investment Trust S-8(Bond)	115,781	4,508		1,899			1,763			—			1,763
WOORI TAERIM 1st Fund	4,047	185		—			(13	)		—			(13	)
Portone-Cape Fund No.1	2,344	26		—			(129	)		—			(129	)
KIWOOM WOORI Financial 1st Investment Fund	10,597	111		1			(222	)		—			(222	)
DeepDive WOORI 2021-1 Financial Investment Fund	7,412	37		57			(103	)		—			(103	)
Darwin Green Packaging Private Equity Fund	19,332	—		2,215			1,904			—			1,904
DS Power Semicon Private Equity Fund	14,230	44		1,185			937			—			937
Koreawide partners 2nd Private Equity Fund	77,039	2,038		3,020			1			—			1
Woori FirstValue Private Real Estate Fund No.2	67,005	62,357		3			(54	)		—			(54	)
WooriG Real Infrastructure Blind General Type Private Placement Investment Trust	73,064	56		3,140			2,874			—			2,874
Woori BIG2 Plus Securities Investment Trust(Balanced Bond)	4,667	12		389			(636	)		—			(636	)
Woori Together TDF 2025	8,513	16		1,287			(1,018	)		—			(1,018	)
Woori Together TDF 2030	8,615	—		1,352			(1,108	)		—			(1,108	)
WOORI Star50 feeder fund(H)	709	—		48			(480	)		—			(480	)
Aarden Woori Apparel 1st Private Equity Fund	20,750	89		8			(325	)		—			(325	)
Woori Dyno 1st Private Equity Fund	10,212	43		200			(31	)		—			(31	)
Australia Green Energy 1st PEF	122,634	14		30			(1,380	)		—			(1,380	)
Godo Kaisha Oceanos 1	63,741	45,358		2,942			176			—			176
Woori Zip 1	48,309	34,346		2,085			(215	)		—			(215	)
Woori Zip 2	68,388	48,927		3,069			(198	)		—			(198	)

- 128 -


	December 31, 2022
	Assets	Liabilities	Operating revenue		Net income (loss)			Other comprehensive income(loss)		Total comprehensive income(loss)
Force TEC Co., Ltd.	10,489	24,804		25,182		(2,664	)		—		(2,664	)
KUM HWA Co., Ltd.	4	159		—		(8	)		—		(8	)
Jinmyung Plus Co.,Ltd.	696	649		177		(9	)		—		(9	)
JC Assurance No.2 Private Equity Fund	122,015	3		—		(929	)		—		(929	)
Dream Company Growth no.1 PEF	28,351	50		1,695		1,506			—		1,506
HMS-Oriens 1st Fund	58,095	6		3,829		3,279			—		3,279
Woori G Senior Loan Private Placement Investment Trust No.1	378,145	23		18,584		17,496			—		17,496
Genesis Eco No.1 Private Equity Fund	38,700	5		48		(593	)		—		(593	)
Paratus Woori Material Component Equipment joint venture company	58,311	617		7		(812	)		—		(812	)
Midas No. 8 Private Equity Joint Venture Company	65,936	242		1,928		977			—		977
Orchestra Private Equity Fund IV	34,427	—		1,580		878			—		878
Synaptic Green No.1 PEF	37,017	—		4		(983	)		—		(983	)
IGEN2022No. 1 Private Equity Fund	32,362	122		3,166		2,616			—		2,616
PCC-Woori LP Secondary Fund	33,591	168		6,127		1,152			—		1,152
Woori-Q Corporate Restructuring Private Equity Fund	75,973	418		3,019		(4,696	)		—		(4,696	)
Woori-Shinyoung Growth-Cap Private Equity Fund I	123,824	312		41,780		40,544			—		40,544

(*1)	It was dissoluted for the year ended December 31, 2021 and will be liquidated.

(*2)	The amount is after reflecting the fair value adjustment that occurred when acquiring the shares and the adjustments that occurred by difference of accounting policies with the Group.

- 129 -


	December 31, 2021
	Assets	Liabilities	Operating revenue			Net income (loss)			Other comprehensive income(loss)			Total comprehensive income(loss)
W Service Networks Co., Ltd.	6,208	2,504		17,019			840			—			840
Korea Credit Bureau Co., Ltd.	113,859	21,284		127,751			20,486			—			20,486
Korea Finance Security Co., Ltd.	34,957	14,286		57,462			249			—			249
Woori Growth Partnerships New Technology Private Equity Fund	54,173	231		3,807			(2,228	)		—			(2,228	)
2016KIF-IMM Woori Bank Technology Venture Fund	63,983	837		23,010			21,119			—			21,119
K BANK Co., Ltd.	14,021,789	12,291,131		250,502			19,348			(32,072	)		(12,724	)
Woori Bank-Company K Korea Movie Asset Fund	1,383	2		1,075			543			—			543
Partner One Value Up I Private Equity Fund	28,273	—		11,972			10,914			—			10,914
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership	56,363	597		11,422			10,077			—			10,077
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund	15,799	5		—			(332	)		—			(332	)
LOTTE CARD Co.,Ltd (*)	15,980,312	13,460,156		1,499,867			184,919			25,612			210,531
Together-Korea Government Private Pool Private Securities Investment Trust No. 3	10,073	1		41			37			—			37
Genesis Environmental Energy Company 1st Private Equity Fund	20,610	3,941		11,347			694			—			694
Union Technology Finance Investment Association	41,996	290		13			(1,168	)		—			(1,168	)
Dicustody Co., Ltd.	98	—		—			(2	)		—			(2	)
Japanese Hotel Real Estate Private Equity Fund 2	16,104	14		911			1,196			(373	)		823
Woori Seoul Beltway Private Special Asset Fund No.1	30,206	1		536			500			—			500
Woori Multi-Return Securities Investment Trust 3 (Balanced Bond)	101,644	51,530		5			2			—			2
Woori Short-term Bond Securities Investment Trust(Bond) ClassC-F	1,209,228	158,524		89			79			—			79
WOORI TAERIM 1st Fund	4,047	172		—			2,770			—			2,770
Portone-Cape Fund No.1	2,447	—		1,050			947			—			947
KIWOOM WOORI Financial 1st Investment Fund	10,818	111		1			(221	)		—			(221	)
DeepDive WOORI 2021-1 Financial Investment Fund	8,340	—		—			(60	)		—			(60	)
Darwin Green Packaging Private Equity Fund	19,387	—		—			(213	)		—			(213	)
Woori FirstValue Private Real Estate Fund No.2	69,672	63,309		—			(5,303	)		—			(5,303	)
WooriG Real Infrastructure Blind General Type Private Placement Investment Trust	35,796	1		(34	)		(35	)		—			(35	)
Woori Hanhwa Eureka Private Equity Fund	40,817	133		20,193			19,821			—			19,821
Aarden Woori Apparel 1st Private Equity Fund	21,075	89		—			(214	)		—			(214	)
Godo Kaisha Oceanos 1	66,087	45,367		3,141			267			—			267
Woori Zip 1	52,259	35,833		1,106			(26	)		—			(26	)
Woori Zip 2	74,033	50,951		1,536			(50	)		—			(50	)
Force TEC Co., Ltd.	11,904	23,508		20,941			(9,188	)		—			(9,188	)
KUM HWA Co., Ltd.	20	176		58			(10	)		—			(10	)
Jinmyung Plus Co.,Ltd.	568	445		209			5			—			5
JC Assurance No.2 Private Equity Fund	118,397	—		—			(1,040	)		—			(1,040	)
Dream Company Growth no.1 PEF	28,533	44		—			1,500			—			1,500
HMS-Oriens 1st Fund	52,659	28		2,750			2,179			—			2,179
Woori G Senior Loan Private Placement Investment Trust No.1	406,634	25		14,553			13,669			—			13,669
Genesis Eco No.1 Private Equity Fund	38,369	4		308			(377	)		—			(377	)
Paratus Woori Material Component Equipment joint venture company	58,507	—		7			(693	)		—			(693	)
Midas No. 8 Private Equity Joint Venture Company	66,699	112		1			(113	)		—			(113	)

- 130 -


	December 31, 2021
	Assets	Liabilities	Operating revenue		Net income (loss)			Other comprehensive income(loss)		Total comprehensive income(loss)
PCC-Woori LP Secondary Fund	31,585	—		5,720		4,162			—		4,162
Woori High Plus Short-term High Graded ESG Bond Sec Feeder Inv Trust 1	257,891	—		3,239		3,239			—		3,239
Woori-Q Corporate Restructuring Private Equity Fund	121,057	555		327		(1,547	)		—		(1,547	)
Woori-Shinyoung Growth-Cap Private Equity Fund I	82,087	314		83,143		81,550			—		81,550

(*)	The amount is after reflecting the fair value adjustment that occurred when acquiring the shares and the adjustments that occurred by difference of accounting policies with the Group.

- 131 -

(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 December 31, 2022 and 2021 are as follows:


	December 31, 2022
Associate (*)	Number of shares owned		Ownership (%)
CL Tech Co., Ltd.		10,191		28.6

(*)	Although 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, accordingly it is excluded from the investment in joint ventures and associates.


	December 31, 2021
Associate (*)	Number of shares owned		Ownership (%)
Orient Shipyard Co., Ltd.		464,812		21.4
Yuil PESC Co., Ltd.		8,642		24.0
CL Tech Co., Ltd.		13,759		38.6
S.WIN Co., Ltd.		20,301		20.0

(*)	Although 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, accordingly it is excluded from the investment in joint ventures and associates.

- 132 -

(5)	As of December 31, 2022 and 2021, the reconciliations from the net assets of the associates to the carrying amount of the shares of the investment in joint ventures and associates are as follows (Unit: Korean Won in millions except for ownership):


	December 31, 2022
	Total net asset			Ownership (%)		Ownership portion of net assets			Basis difference		Impairment		Intercompany transaction			Book value
W Service Networks Co., Ltd.		4,227			4.9		209			—		—		(1	)		208
Korea Credit Bureau Co., Ltd.		55,100			9.9		5,462			246		—		1			5,709
Korea Finance Security Co., Ltd.		15,828			15.0		2,374			—		—		—			2,374
Woori Growth Partnerships New Technology Private Equity Fund		47,185			23.1		10,889			—		—		—			10,889
2016KIF-IMM Woori Bank Technology Venture Fund		47,370			20.0		9,474			—		—		—			9,474
K BANK Co., Ltd. (*)		1,796,269			12.6		225,894			21,894		—		1			247,789
Woori Bank-Company K Korea Movie Asset Fund		957			25.0		239			—		—		—			239
Partner One Value Up Ist Private Equity Fund		18,395			23.3		4,278			—		—		—			4,278
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		51,419			20.0		10,284			—		—		1			10,285
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		15,716			25.0		3,929			—		—		426			4,355
LOTTE CARD Co., Ltd. (*)		2,570,656			20.0		514,131			—		—		—			514,131
Together-Korea Government Private Pool Private Securities Investment Trust No.3		10,245			100.0		10,244			—		—		(1	)		10,243
Union Technology Finance Investment Association		48,692			29.7		14,463			—		—		(1	)		14,462
Dicustody Co., Ltd.		95			1.0		1			—		—		—			1
Orient Shipyard Co., Ltd.		(16,393	)		22.7		(3,721	)		—		—		3,721			—
BTS 2nd Private Equity Fund		14,405			20.0		2,881			—		—		—			2,881
STASSETS FUND III		4,347			28.3		1,230			—		—		—			1,230
Japanese Hotel Real Estate Private Equity Fund No.2		14,374			19.9		2,855			—		—		—			2,855
Woori Seoul Beltway Private Special Asset Fund No.1		39,495			25.0		9,874			—		—		—			9,874
Woori Short-term Bond Securities Investment Trust (Bond) ClassC-F		401,335			27.9		112,025			—		—		—			112,025
Woori Safe Plus General Type Private Investment Trust S-8(Bond)		111,273			9.2		10,182			—		—		—			10,182
WOORI TAERIM 1st Fund		3,862			25.6		988			—		—		—			988
Portone-Cape Fund No.1		2,318			20.0		464			—		—		—			464
KIWOOM WOORI Financial 1st Investment Fund		10,486			9.1		953			—		—		—			953
DeepDive WOORI 2021-1 Financial Investment Fund		7,375			11.9		878			—		—		—			878
Darwin Green Packaging Private Equity Fund		19,332			20.4		3,945			—		—		—			3,945
DS Power Semicon Private Equity Fund		14,186			21.0		2,976			—		—		—			2,976
Koreawide partners 2nd Private Equity Fund		75,001			26.7		20,000			—		—		—			20,000
Woori FirstValue Private Real Estate Fund No.2		4,648			12.0		558			—		—		—			558

- 133 -


	December 31, 2022
	Total net asset			Ownership (%)		Ownership portion of net assets			Basis difference		Impairment			Intercompany transaction		Book value
Woori G Real Infrastructure Blind General Type Private Placement Investment Trust		73,008			0.1		102			—		—			—		102
Woori BIG2 Plus Securities Investment Trust(Balanced Bond)		4,655			23.1		1,074			—		—			—		1,074
Woori Together TDF 2025		8,497			23.6		1,990			—		—			—		1,990
Woori Together TDF 2030		8,615			23.8		2,033			—		—			—		2,033
WOORI Star50 feeder fund(H)		709			17.9		126			—		—			—		126
Aarden Woori Apparel 1st Private Equity Fund		20,661			0.5		97			—		—			—		97
Woori Dyno 1st Private Equity Fund		10,169			19.6		1,994			—		—			—		1,994
Australia Green Energy 1st PEF		122,620			4.0		4,858			—		—			—		4,858
Godo Kaisha Oceanos 1		18,383			47.8		8,788			—		—			—		8,788
Woori Zip 1		13,963			64.0		8,690			—		—			—		8,690
Woori Zip 2		19,461			64.0		12,180			—		—			—		12,180
Force TEC		(14,315	)		24.5		(3,513	)		—		—			3,513		—
KUM HWA Co., Ltd.		(155	)		20.1		(31	)		—		—			31		—
Jinmyung Plus Co.,Ltd.		47			21.3		10			—		—			—		10
JC Assurance No.2 Private Equity Fund		122,012			23.5		17,728			—		(17,728	)		—		—
Dream Company Growth no.1 PEF		28,301			27.8		7,861			—		—			—		7,861
HMS-Oriens 1st Fund		58,089			22.8		13,252			—		—			—		13,252
Woori G Senior Loan General Type Private Investment Trust No.1		378,122			21.7		81,861			—		—			—		81,861
Genesis Eco No.1 Private Equity Fund		38,695			29.0		11,216			—		—			—		11,216
Paratus Woori Material Component Equipment joint venture company		57,694			29.9		17,250			—		—			—		17,250
Midas No. 8 Private Equity Joint Venture Company		65,694			28.5		18,713			—		—			—		18,713
Orchestra Private Equity Fund IV		34,427			28.2		9,698			—		—			—		9,698
Synaptic Green No.1 PEF		37,017			21.1		7,793			—		—			—		7,793
IGEN2022No. 1 Private Equity Fund		32,240			24.8		8,010			—		—			—		8,010
PCC-Woori LP Secondary Fund		33,423			38.8		12,984			—		—			—		12,984
Woori-Q Corporate Restructuring Private Equity Fund		75,555			35.6		27,536			—		—			—		27,536
Woori-Shinyoung Growth-Cap Private Equity Fund I		123,512			35.0		43,274			—		—			—		43,274

(*)	The net asset equity amount is after the debt-for-equity swap, non-controlling etc.

- 134 -


	December 31, 2021
	Total net asset		Ownership (%)		Ownership portion of net assets		Basis difference		Impairment		Intercompany transaction		Book value
W Service Networks Co., Ltd.		3,704		4.9		183		—		—		—		183
Korea Credit Bureau Co., Ltd.		92,575		9.9		9,177		246		—		—		9,423
Korea Finance Security Co., Ltd.		20,671		15.0		3,101		—		—		—		3,101
Woori Growth Partnerships New Technology Private Equity Fund		53,942		23.1		12,448		—		—		—		12,448
2016KIF-IMM Woori Bank Technology Venture Fund		63,146		20.0		12,630		—		—		—		12,630
K BANK Co., Ltd. (*)		1,730,307		12.6		217,599		21,894		—		—		239,493
Woori Bank-Company K Korea Movie Asset Fund		1,381		25.0		345		—		—		—		345
Partner One Value Up Ist Private Equity Fund		28,273		23.3		6,576		—		—		—		6,576
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		55,767		20.0		11,153		—		—		—		11,153
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		15,794		25.0		3,949		—		—		305		4,254
LOTTE CARD Co., Ltd (*1)		2,291,474		20.0		458,295		—		—		—		458,295
Together-Korea Government Private Pool Private Securities Investment Trust No.3		10,071		100.0		10,070		—		—		—		10,070
Genesis Environmental Energy Company 1st Private Equity Fund		16,669		24.8		4,126		—		—		—		4,126
Union Technology Finance Investment Association		41,706		29.7		12,388		—		—		—		12,388
Dicustody Co., Ltd.		98		1.0		1		—		—		—		1
Japanese Hotel Real Estate Private Equity Fund No.2		16,090		19.9		3,196		—		—		—		3,196
Woori Seoul Beltway Private Special Asset Fund No.1		30,205		25.0		7,551		—		—		—		7,551
Woori Multi Return Private Securities Investment Trust 3(Balanced Bond)		50,114		20.0		10,023		—		—		—		10,023
Woori Short-term Bond Securities Investment Trust (Bond) ClassC-F		1,050,704		14.5		151,822		—		—		—		151,822
WOORI TAERIM 1st Fund		3,875		25.6		991		—		—		—		991
Portone-Cape Fund No.1		2,447		20.0		489		—		—		—		489
KIWOOM WOORI Financial 1st Investment Fund		10,707		9.1		973		—		—		—		973

- 135 -


	December 31, 2021
	Total net asset			Ownership (%)		Ownership portion of net assets			Basis difference		Impairment			Intercompany transaction			Book value
DeepDive WOORI 2021-1 Financial Investment Fund		8,340			11.9		993			—		—			—			993
Darwin Green Packaging Private Equity Fund		19,387			20.4		3,957			—		—			—			3,957
Woori FirstValue Private Real Estate Fund No.2		6,363			12.0		763			—		—			—			763
WooriG Real Infrastructure Blind General Type Private Placement Investment Trust		35,795			0.3		100			—		—			—			100
Woori Hanhwa Eureka Private Equity Fund		40,684			0.8		327			—		—			—			327
Aarden Woori Apparel 1st Private Equity Fund		20,986			0.5		99			—		—			—			99
Godo Kaisha Oceanos 1		20,720			47.8		9,905			—		—			—			9,905
Woori Zip 1		16,426			63.9		10,496			—		—			—			10,496
Woori Zip 2		23,082			63.8		14,732			—		—			—			14,732
Force TEC		(11,604	)		24.5		(2,843	)		—		—			2,843			—
KUM HWA Co., Ltd.		(156	)		20.1		(31	)		—		—			31			—
Jinmyung Plus Co.,Ltd.		123			21.3		25			—		—			(25	)		—
JC Assurance No.2 Private Equity Fund		118,397			24.4		29,349			—		(11,621	)		—			17,728
Dream Company Growth no.1 PEF		28,489			27.8		7,914			—		—			—			7,914
HMS-Oriens 1st Fund		52,631			22.8		12,007			—		—			—			12,007
WooriG Senior Loan General Type Private Investment Trust No.1		406,609			21.7		88,029			—		—			—			88,029
Genesis Eco No.1 Private Equity Fund		38,365			29.0		11,120			—		—			—			11,120
Paratus Woori Material Component Equipment joint venture company		58,507			29.9		17,493			—		—			—			17,493
Midas No. 8 Private Equity Joint Venture Company		66,587			28.5		18,968			—		—			—			18,968
PCC-Woori LP Secondary Fund		31,585			38.8		12,350			—		—			—			12,350
Woori High Plus Short-term High Graded ESG Bond Sec Feeder Inv Trust 1		257,891			27.5		73,787			—		—			—			73,787
Woori-Q Corporate Restructuring Private Equity Fund		120,502			38.1		46,155			—		—			—			46,155
Woori-Shinyoung Growth-Cap Private Equity Fund I		81,773			35.0		28,713			—		—			—			28,713

(*)	The net asset equity amount is after the debt-for-equity swap, non-controlling etc.

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14.

INVESTMENT PROPERTIES

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


	December 31, 2022			December 31, 2021
Acquisition cost		418,775			415,163
Accumulated depreciation		(30,982	)		(25,582	)
Accumulated impairment losses		(86	)		(86	)

Net carrying value		387,707			389,495

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


	For the years ended December 31
	2022			2021
Beginning balance		389,495			387,464
Disposal		(1,206	)		—
Depreciation		(3,925	)		(2,809	)
Transfer		7,153			6,095
Foreign currencies translation adjustments		(3,810	)		(1,255	)

Ending balance		387,707			389,495

(3)

Fair value of investment properties amounted to 647,072 million won and 665,710 million won as of December 31, 2022 and 2021, respectively. The fair value of investment properties has been assessed on the basis of recent similar real estate market price and officially assessed land price in the area of the investment properties, is classified as level 3 on the fair value hierarchy.

(4)

Rental fee earned from investment properties is amounting to 22,798 million won and 15,056 million won for the years ended December 31, 2022 and 2021, respectively. Operating expenses directly related to the investment properties where rental fee was earned is amounting to 4,093 million won and 2,941 million won.

(5)	The lease payments expected to be received in the future under lease contracts relating to investment properties as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022		December 31, 2021
Lease payments:
Within a year		12,368		13,769
More than 1 year and within 2 years		8,481		10,770
More than 2 years and within 3 years		5,320		7,743
More than 3 years and within 4 years		3,201		5,009
More than 4 years and within 5 years		2,634		2,953
More than 5 years		2,568		2,603

Total		34,572		42,847

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15.

PREMISES AND EQUIPMENT

(1)	Details of premises and equipment as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022
	Land			Building			Equipment and vehicles			Leasehold improvement			Construction in progress		Structures			Total
Premises and equipment (owned)		1,695,357			730,676			261,278			58,352			32,184		—			2,777,847
Right-of-use asset		—			349,494			15,589			—			—		—			365,083
Carrying value		1,695,357			1,080,170			276,867			58,352			32,184		—			3,142,930

	December 31, 2021
	Land			Building			Equipment and vehicles			Leasehold improvement			Construction in progress		Structures			Total
Premises and equipment (owned)		1,719,325			756,964			258,361			51,354			3,171		1			2,789,176
Right-of-use asset		—			367,480			18,064			—			—		—			385,544
Carrying value		1,719,325			1,124,444			276,425			51,354			3,171		1			3,174,720

(2) Details of premises and equipment (owned) as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):

	December 31, 2022
	Land			Building			Equipment and vehicles			Leasehold improvement			Construction in progress		Structures			Total
Acquisition cost		1,696,017			1,078,385			1,179,928			470,513			32,184		20			4,457,047
Accumulated depreciation		—			(347,709	)		(918,650	)		(412,161	)		—		(20	)		(1,678,540	)
Accumulated impairment losses		(660	)		—			—			—			—		—			(660	)
Net carrying value		1,695,357			730,676			261,278			58,352			32,184		—			2,777,847


	December 31, 2021
	Land			Building			Equipment and vehicles			Leasehold improvement			Construction in progress		Structures			Total
Acquisition cost		1,719,985			1,076,091			1,156,479			475,195			3,171		20			4,430,941
Accumulated depreciation		—			(319,127	)		(898,118	)		(423,841	)		—		(19	)		(1,641,105	)
Accumulated impairment losses		(660	)		—			—			—			—		—			(660	)
Net carrying value		1,719,325			756,964			258,361			51,354			3,171		1			2,789,176

- 138 -

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


	For the year ended December 31, 2022
	Land			Building			Equipment and vehicles			Leasehold improvement			Construction in progress			Structures			Total
Beginning balance		1,719,325			756,964			258,361			51,354			3,171			1			2,789,176
Acquisitions		24			14,524			98,620			28,178			31,810			—			173,156
Disposals		(20,024	)		(788	)		(1,003	)		(656	)		—			—			(22,471	)
Depreciation		—			(32,290	)		(97,600	)		(21,185	)		—			(1	)		(151,076	)
Classification of assets held for sale		(6,405	)		(6,704	)		—			—			—			—			(13,109	)
Transfer		(3,040	)		(4,113	)		—			—			—			—			(7,153	)
Foreign currencies translation adjustments		(855	)		(428	)		392			549			225			—			(117	)
Business combination		5,917			3,523			2,586			—			—			—			12,026
Others		415			(12	)		(78	)		112			(3,022	)		—			(2,585	)

Ending balance		1,695,357			730,676			261,278			58,352			32,184			—			2,777,847


	For the year ended December 31, 2021
	Land			Building			Equipment and vehicles			Leasehold improvement			Construction in progress			Structures			Total
Beginning balance		1,726,045			787,040			268,225			50,085			8,246			2			2,839,643
Acquisitions		—			15,750			68,069			23,347			11,637			—			118,803
Disposals		—			(1,994	)		(1,663	)		(979	)		—			—			(4,636	)
Depreciation		—			(33,523	)		(93,921	)		(22,293	)		—			(1	)		(149,738	)
Classification of assets held for sale		(7,157	)		(5,695	)		—			—			—			—			(12,852	)
Transfer		(3,649	)		(2,446	)		15,399			—			(15,399	)		—			(6,095	)
Foreign currencies translation adjustments		991			712			2,868			1,580			153			—			6,304
Others		3,095			(2,880	)		(616	)		(386	)		(1,466	)		—			(2,253	)

Ending balance		1,719,325			756,964			258,361			51,354			3,171			1			2,789,176

(4)	Details of right-of-use assets as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022
	Building			Equipment and vehicles			Total
Acquisition cost		643,484			32,700			676,184
Accumulated depreciation		(293,990	)		(17,111	)		(311,101	)

Net carrying value		349,494			15,589			365,083


	December 31, 2021
	Building			Equipment and vehicles			Total
Acquisition cost		650,906			30,559			681,465
Accumulated depreciation		(283,426	)		(12,495	)		(295,921	)

Net carrying value		367,480			18,064			385,544

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(5)	Details of changes in right-of-use assets for the years ended December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2022
	Building			Equipment and vehicles			Total
Beginning balance		367,480			18,064			385,544
New contracts		225,396			9,819			235,215
Changes in contract		3,514			(26	)		3,488
Termination		(43,597	)		(870	)		(44,467	)
Depreciation		(211,175	)		(11,406	)		(222,581	)
Business combination		819			—			819
Others		7,057			8			7,065

Ending balance		349,494			15,589			365,083


	For the year ended December 31, 2021
	Building			Equipment and vehicles			Total
Beginning balance		435,132			12,423			447,555
New contracts		172,812			16,848			189,660
Changes in contract		9,064			225			9,289
Termination		(46,563	)		(1,742	)		(48,305	)
Depreciation		(228,403	)		(10,665	)		(239,068	)
Business combination		—			—			—
Others		25,438			975			26,413

Ending balance		367,480			18,064			385,544

16.

INTANGIBLE ASSETS

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


	December 31, 2022
	Goodwill		Industrial property rights			Development cost			Other intangible assets			Membership deposit			Construction in progress		Total
Acquisition cost		397,527		2,219			754,031			1,244,516			46,231			3,027		2,447,551
Accumulated amortization		—		(1,576	)		(541,404	)		(1,018,591	)		—			—		(1,561,571	)
Accumulated impairment losses		—		—			—			(33,552	)		(3,314	)		—		(36,866	)

Net carrying value		397,527		643			212,627			192,373			42,917			3,027		849,114


	December 31, 2021
	Goodwill		Industrial property rights			Development cost			Other intangible assets			Membership deposit			Construction in progress		Total
Acquisition cost		345,449		2,057			661,959			1,174,565			40,955			717		2,225,702
Accumulated amortization		—		(1,334	)		(454,251	)		(947,830	)		—			—		(1,403,415	)
Accumulated impairment losses		—		—			—			(33,553	)		(3,348	)		—		(36,901	)

Net carrying value		345,449		723			207,708			193,182			37,607			717		785,386

- 140 -

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


	For the year ended December 31, 2022
	Goodwill			Industrial property rights			Development cost			Other intangible assets			Membership deposit			Construction in progress			Total
Beginning balance		345,449			723			207,708			193,182			37,607			717			785,386
Acquisitions		—			162			91,992			62,073			6,571			2,421			163,219
Disposal		—			—			—			(2	)		(1,295	)		—			(1,297	)
Amortization (*)		—			(242	)		(87,294	)		(75,299	)		—			—			(162,835	)
Impairment losses		—			—			—			—			88			—			88
Transfer		—			—			300			182			—			(482	)		—
Business combination		57,670			—			—			7,795			—			—			65,465
Foreign currencies translation adjustments		(5,592	)		—			(5	)		(865	)		(42	)		(53	)		(6,557	)
Others		—			—			(74	)		5,307			(12	)		424			5,645

Ending balance		397,527			643			212,627			192,373			42,917			3,027			849,114

(*) Amortization of other intangible assets amounting to 14,664 million won is included in other operating expenses.


	For the year ended December 31, 2021
	Goodwill		Industrial property rights			Development cost			Other intangible assets			Membership deposit			Construction in progress			Total
Beginning balance		334,290		709			208,873			205,445			36,091			6,669			792,077
Acquisitions		—		247			74,444			49,137			2,437			977			127,242
Disposal		—		—			—			—			(347	)		—			(347	)
Amortization (*)		—		(233	)		(80,128	)		(68,950	)		—			—			(149,311	)
Impairment losses		—		—			—			(18	)		(93	)		—			(111	)
Transfer		—		—			4,518			2,946			—			(7,464	)		—
Foreign currencies translation adjustments		11,159		—			—			2,952			232			—			14,343
Others		—		—			1			1,670			(713	)		535			1,493

Ending balance		345,449		723			207,708			193,182			37,607			717			785,386

(*)

Amortization of other intangible assets amounting to 13,963 million won is included in other operating expenses.

(3)

Goodwill

Details of allocated goodwill based on each cash-generating unit as of December 31, 2022 and 2021 are as follows (Unit: Korean won in million):


Cash-generating unit (*1)	December 31, 2022		December 31, 2021
Woori Asset Management Corp.		43,036		43,036
Woori Global Asset Management Co., Ltd.		2,030		2,030
Woori Asset Trust Co., Ltd.		141,780		141,780
PT Bank Woori Saudara Indonesia 1906 Tbk (*2)		97,029		99,667
WOORI BANK (CAMBODIA) PLC (*3)		55,570		52,082
PT Woori Finance Indonesia Tbk.		51,382		—
Others		6,700		6,854

Total		397,527		345,449

(*1)

Allocated to the cash-generating unit that will benefit from the synergy effect of the business combination, and the cash-generating unit is generally comprised of the operating segment or sub-sectors.

(*2)

The Group has acquired Saudara Bank to expand retail sales in Indonesia, and recognized the goodwill as it is expected to strengthen the competitiveness by securing a local sales network in Indonesia.

(*3)

The Group has acquired VisionFund Cambodia to expand Cambodian retail sales, and recognized goodwill based on the economies of scale and acquired customer base.

- 141 -

2)	Impairment test

The recoverable amount of the cash-generating unit is measured at larger amount among the fair value less costs to sell or the value to use.

The net fair value is calculated by deducting costs of disposal from the amount received from the sale of the cash-generating unit in an arm’s length transaction between the parties with reasonable judgment and willingness to negotiate. In case of difficulty in measuring this amount, the sale amount of a similar cash-generating unit in the past market is calculated by reflecting the characteristics of the cash-generating unit. If reliable information related to fair value less costs to sell is not available, value in use is considered as recoverable amount. Value in use is the present value of future cash flows expected to be generated by the cash-generating unit. Future cash flows are estimated based on the latest financial budget approved by the management, with an estimated period of up to five years. The Group applied 0.0% - 1.0% growth rate to estimate future cash flow for the period over five years. The main assumptions used to estimate cash flows are about the size of the market and the share of the group. The appropriate discount rate for discounting future cash flows is the pre-tax discount rate, including assumptions about risk-free interest rates, market risk premium, and systemic risk of cash-generating units. The impairment test, which compares the carrying amount and recoverable amount of the cash-generating unit to which goodwill has been allocated, is conducted every year and every time an impairment sign occurs.


Category	Woori Asset Trust Co., Ltd.		Woori Asset Management Corp.		Woori Global Asset Management Co., Ltd		PT Bank Woori Saudara Indonesia 1906 Tbk		WB Finance Co., Ltd
Discount rate (%).		14.55		13.36		13.47		15.98		16.88
Terminal growth rate (%)		1.0		1.0		1.0		0.00		0.00
Recoverable amount.		431,777		162,772		42,083		784,787		544,693
Carrying amount		300,023		134,073		29,917		739,878		499,823

As a result of the impairment test on goodwill, it is determined that the carrying amount of the cash-generating unit to which the goodwill has been allocated will not exceed the recoverable amount.

3)	Sensitivity analysis

The sensitivity of the fair value measurement to changes in significant but unobservable inputs used in measuring fair value is as follows (Unit: Korean Won in millions):


Category		Woori Asset Trust Co., Ltd.			Woori Asset Management Corp.			Woori Global Asset Management Co., Ltd.			PT Bank Woori Saudara Indonesia 1906 Tbk			WB Finance Co., Ltd.
Discount rate (%).	Increase by 1.0% point		(39,501	)		(8,680	)		(2,553	)		(61,030	)		(38,845	)
	Decrease by 1.0% point		48,345			10,686			3,169			71,658			45,066
Terminal growth rate (%)	Increase by 1.0% point		30,344			6,699			2,034			43,855			26,515
	Decrease by 1.0% point(*)		(25,010	)		(5,464	)		(1,650	)		—			—

(*)	In the case of PT Bank Woori Saudara Indonesia 1906 Tbk and WOORI BANK (CAMBODIA) PLC, declining cases are excluded from the analysis as the permanent growth rate was assumed to be 0%.

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17.

ASSETS HELD FOR SALE

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


Assets (*)	December 31, 2022		December 31, 2021
Premises and equipment		9,589		8,900
Investments of associates		—		11,472
Others		4,183		5,955

Total		13,772		26,327

(*)

The Group classifies assets as held for sale that are highly likely to be sold within one year from December 31, 2022 and December 31, 2021.

The Group measured assets held for sale at the lower of their net fair value or carrying amount.

The Group has decided to sell some of the premises and equipment through internal consultation during the current year and classifies the premises as non-current assets held for sale. The asset is expected to be sold within 12 months, and the premises and equipment that was scheduled to be sold at the end of the prior year has been sold and removed. On the other hand, other assets that are expected to be sold as of the end of the current year are classified as assets that are expected to be sold within one year due to the possibility of being sold as buildings and land acquired through auction.

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18.

ASSETS SUBJECT TO LIEN AND ASSETS ACQUIRED THROUGH FORECLOSURES

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


		December 31, 2022
		Collateral given to	Amount	Reason for collateral
Financial assets at FVTPL	Korean treasury and government bonds, etc.	KOREA SECURITIES FINANCE CORPORATION, etc.	198,377	Related to bonds sold under repurchase agreements (*1)
	Korean treasury and government bonds, etc.	Korea Securities Depository	659,050	Securities borrowing collateral
	Korean treasury and government bonds, etc.	SHINHAN SECURITIES CO, etc	6,939	Future trading collateral
	Korean financial institutions’ debt securities, etc.	SC FIRST BANK KOREA, SEOUL, etc	245,876	Variable margin deposit for CSA, etc
	Korean financial institutions’ debt securities, etc.	SHINHAN ASSET MANAGEMENT, etc	16,200	Related to bonds sold under repurchase agreements (*1)
	Korean capital contributions, etc.	Korea Software Financial Cooperative	104	Bid guarantee, etc.
Financial assets at FVTOCI	Korean treasury and government bonds	Korea Securities Depository	460	Related to bonds sold under repurchase agreements (*1)
	Korean financial institutions’ debt securities, etc.	The BOK, etc	6,394,890	Settlement risk, etc.
	Debt securities in foreign currencies	BNP-PARIBAS, etc	1,060,120	Variable margin deposit for CSA, etc
	Debt securities in foreign currencies	SC BANK, H.K, etc	582,738	Related to bonds sold under repurchase agreements (*1)
Securities at amortized cost	Korean treasury and government bonds	Korea Securities Depository	1,100,351	Related to bonds sold under repurchase agreements (*1)
	Korean treasury and government bonds	The BOK, etc	10,820,136	Settlement risk, etc.
	Debt securities in foreign currencies	NATIXIS, etc	70,949	Related to bonds sold under repurchase agreements (*1)
	Debt securities in foreign currencies	FHLB ADVANCE, etc	10,570	Related to the borrowing limit
Loan at amortized cost and other financial assets	Due from banks in local currency	Daishin AMC Co.,Ltd. and others	1,500	Right of pledge
	Other due from banks in local currency	The Korea Exchange, etc	133,539	Margin deposit for CCP
	Other due from banks in foreign currency	Korea Investment & Securities, etc	1,142,784	Overseas futures option deposit, etc.
	Mortgage loan	Public offering	1,892,723	Related to covered bonds
Premises and equipment	Land and building	Gakorea Co., Ltd , etc	1,851	Right to collateral and others (*2)
Investment properties	Land and building	Gakorea Co., Ltd., etc	5,365	Right to collateral and others (*2)

		Total	24,344,522

(*1)

The Group has the agreements to repurchase the sold assets at the predetermined price or the price that includes the rate of return and to provide the guarantee on the assets. The transferee has the right to sell or to provide as guarantee. Therefore, the Group does not derecognize the assets, but recognizes the relevant amounts as liability (bonds sold under repurchase agreements). The asset is equivalent to a mortgage-backed debt security.

(*2)	The maximum pledge amount is 522 million Won.

- 144 -


		December 31, 2021
		Collateral given to	Amount	Reason for collateral
Financial assets at FVTPL	Korean treasury and government bonds, etc	Nonghyup bank and others	248,009	Related to bonds sold under repurchase agreements (*)
	Korean treasury and government bonds, etc	Korea Securities Depository	179,079	Securities borrowing collateral
	Korean treasury and government bonds, etc	VI Investment, etc.	3,008	Future trading collateral
	Korean financial institutions’ debt securities, etc	Korea Securities Depository	205,783	Securities borrowing collateral
	Korean financial institutions’ debt securities, etc	KOREA SECURITIES FINANCE CORPORATION	54,419	Collateral for securities lending purposes
	Korean financial institutions’ debt securities, etc	Shinhan Investment Corp.	5,352	Collateral for futures transaction
	Korean corporate bonds	Korea Securities Depository	299,161	Securities borrowing collateral
	Korean capital contributions	Korea Software Financial Cooperative	101	Bid guarantee, etc.
Financial assets at FVTOCI	Korean treasury and government bonds	Korea Securities Depository	470	Related to bonds sold under repurchase agreements (*)
	Korean financial institutions’ debt securities, etc	The BOK and others	3,666,849	Settlement risk and others
	Foreign financial institutions’ debt securities	STANDARD BANKLONDON LTD	126,595	Related to bonds sold under repurchase agreements (*)
Securities at amortized cost	Korean treasury and government bonds	The BOK and others	8,977,748	Settlement risk and others
	Foreign financial institutions’ debt securities	NATIXIS and others	38,995	Related to bonds sold under repurchase agreements (*)
	Foreign financial institutions’ debt securities	FHLB ADVANCE and others	10,375	Related to the borrowing limit
Loan at amortized cost and other financial assets	Due from banks in local currency	Daishin AMC Co.,Ltd. and others	1,500	Right of pledge
	Other due from banks in local currency	Samsung Securities Co., Ltd. and others	25,338	Margin deposit for futures or option
	Other due from banks in foreign currency	Yuanta Securities Korea Co., Ltd., etc.	1,051,006	Overseas futures option deposit, etc.
	Mortgage loan	Public offering	2,494,333	Related to covered bonds
Premises and equipment	Land and building	Credit Counselling & Recovery Service and others	1,910	Right to collateral and others
Investment properties	Land and building	Credit Counselling & Recovery Service and others	5,520	Right to collateral and others

		Total	17,395,551

(*)

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(2)	As of December 31, 2022 and 2021 there is no asset acquired through foreclosures.


	December 31, 2022			December 31, 2021
Investment properties
Land		6,404			2,185
Building		165			181
Sub-total		6,569			2,366
Other assets
Land for non-business use		21,302			21,156
Building for non-business use (*1)		3,049			1,526
Movables for non-business use (*2)		165			120
Real estate assessment provision for non-business use		(1,176	)		(1,129	)
Sub-total		23,340			21,673
Assets held for sale
Land		2,351			2,980
Building		1,832			2,557
Others		—			418
Sub-total		4,183			5,955

Total		34,092			29,994

(*1)

The cumulative depreciation amount as of December 31, 2022 and 2021 is 1,055 million Won and 716 million Won, respectively.

(*2)

The cumulative depreciation amount as of December 31, 2022 and 2021 is 882 million Won and 907 million Won, respectively.

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


		December 31, 2022	December 31, 2021	Loaned to
Financial assets at FVTOCI	Korean treasury and government bonds	98,027	98,535	Korea Securities Finance Corporation

Securities loaned are lending of specific securities to borrowers who agree to return the same amount of the same security at the end of lending period. As the Group does not derecognize these securities.

(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 December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022
	Fair values of collaterals	Fair values of collaterals were disposed or re-subjected to lien
Securities	7,109,933	—


	December 31, 2021
	Fair values of collaterals	Fair values of collaterals were disposed or re-subjected to lien
Securities	10,785,412	—

- 146 -

19.

OTHER ASSETS

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


	December 31, 2022		December 31, 2021
Lease assets		2,593,578		1,782,887
Prepaid expenses		287,323		189,808
Advance payments		99,772		61,042
Non-operational assets		23,340		16,248
Others		57,539		38,965

Total		3,061,552		2,088,950

20.

FINANCIAL LIABILITIES AT FVTPL

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


	December 31, 2022		December 31, 2021
Financial instruments at fair value through profit or loss measured at fair value		8,952,399		4,873,458

Total		8,952,399		4,873,458

(2)	Financial liabilities at fair value through profit or loss measured at fair value are as follows (Unit: Korean Won in millions):


	December 31, 2022		December 31, 2021
Deposits
Gold banking liabilities		35,161		65,016
Borrowings
Securities sold		12,113		241,174
Derivative liabilities		8,905,125		4,567,268

Total		8,952,399		4,873,458

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21.

DEPOSITS DUE TO CUSTOMERS

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


	December 31, 2022			December 31, 2021
Deposits in local currency:
Deposits on demand		15,627,300			18,029,136
Deposits at termination		270,092,855			254,319,473
Mutual installment		22,995			24,620
Deposits on notes payables		3,675,596			2,954,066
Deposits on CMA		60,079			92,360
Certificate of deposits		5,255,889			3,586,423
Other deposits		1,196,486			1,286,719

Sub-total		295,931,200			280,292,797

Deposits in foreign currencies:
Deposits in foreign currencies		46,263,943			37,643,900
Present value discount		(92,352	)		(36,826	)

Sub-total		46,171,591			37,607,074

Customers’ deposits for beneficiary		2,418			—

Total		342,105,209			317,899,871

22.

BORROWINGS AND DEBENTURES

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


	December 31, 2022
	Lenders	Interest rate (%)	Amount
Borrowings in local currency:
Borrowings from The BOK	The BOK	0.3 ~ 1.8		3,040,877
Borrowings from government funds	Small Enterprise And Market Service and others	0.0 ~ 3.5		2,021,049
Others	The Korea Development Bank and others	0.0 ~ 6.7		9,562,082

Sub-total				14,624,008

Borrowings in foreign currencies:
Borrowings in foreign currencies	The Export-Import Bank of Korea and others	(0.1) ~ 10.6		11,161,294
Bills sold	Others	0.0 ~ 2.4		7,308
Call money	Bank and others	1.6 ~ 5.5		400,071
Bonds sold under repurchase agreements	Other financial institutions	0.2 ~ 6.4		2,313,044
Present value discount				(76,122	)

Total				28,429,603

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	December 31, 2021
	Lenders	Interest rate (%)	Amount
Borrowings in local currency:
Borrowings from The BOK	The BOK	0.3		3,144,897
Borrowings from government funds	Small Enterprise And Market Service and others	0.0 ~ 2.4		2,053,611
Others	The Korea Development Bank and others	0.0 ~ 3.1		9,984,518

Sub-total				15,183,026
Borrowings in foreign currencies:
Borrowings in foreign currencies	JPMorgan Chase & Co. and others	(0.5) ~ 7.3		8,545,077
Bills sold	Others	0.0 ~ 1.3		9,111
Call money	Bank and others	(0.5) ~ 2.6		317,961
Bonds sold under repurchase agreements	Other financial institutions	(0.5) ~ 10.6		749,976
Present value discount				(49,692	)

Total				24,755,459

(*)

As of December 31, 2021, foreign currency borrowings subject to fair value hedges were included in the amount of 35,694 million Won.

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


	December 31, 2022				December 31, 2021
	Interest rate (%)	Amount			Interest rate (%)	Amount
Face value of bond (*):
Ordinary bonds	0.8 ~ 7.5		37,132,334		0.7 ~ 3.6		37,004,942
Subordinated bonds	1.9 ~ 5.1		5,835,325		1.9 ~ 5.1		6,767,442
Other bonds	0.8 ~ 17.0		1,271,364		0.8 ~ 17.0		911,190

Sub-total			44,239,023				44,683,574

Discounts on bonds			(40,537	)			(29,710	)

Total			44,198,486				44,653,864

(*)

Included debentures under fair value hedge amounting to 3,076,983 million won and 2,366,724 million won as of December 31, 2022 and 2021 respectively. Also, debentures under cash flow hedge amounting to 1,324,812 million won and 819,298 million won are included as of December 31, 2022 and 2021 respectively.

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23.

PROVISIONS

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


	December 31, 2022		December 31, 2021
Asset retirement obligation		82,717		80,777
Provisions for guarantees (*1)		76,508		74,866
Provisions for unused loan commitments		106,033		112,296
Other provisions (*2)		280,607		308,195

Total		545,865		576,134

(*1)

Provisions for guarantees includes provision for financial guarantee of 47,969 million won and 53,321 million won as of December 31, 2022 and 2021, respectively.

(*2)

Other provisions consist of provision for litigation, loss compensation and others.

(2)	Changes in provisions for guarantees and unused loan commitments are as follows (Unit: Korean Won in millions):

Provisions for guarantees


	For the year ended December 31, 2022
	Stage1			Stage2			Stage3		Total
Beginning balance		52,830			15,269			6,767		74,866
Transfer to 12-month expected credit loss		1,206			(1,206	)		—		—
Transfer to expected credit loss for the entire period		(119	)		119			—		—
Transfer to credit-impaired financial assets		(3	)		(338	)		341		—
Provisions used		—			—			—		—
Net provision (reversal) of unused amount		(3,449	)		10,483			577		7,611
Others (*)		(5,969	)		—			—		(5,969	)

Ending balance		44,496			24,327			7,685		76,508

(*)

Recognized as a result of new financial guarantee contract valued at initial fair value.


	For the year ended December 31, 2021
	Stage1			Stage2			Stage3			Total
Beginning balance		64,804			16,745			8,043			89,592
Transfer to 12-month expected credit loss		2,146			(2,144	)		(2	)		—
Transfer to expected credit loss for the entire period		(162	)		193			(31	)		—
Transfer to credit-impaired financial assets		(3	)		(162	)		165			—
Provisions used		(6,964	)		—			—			(6,964	)
Net provision (reversal) of unused amount		(9,929	)		636			(1,408	)		(10,701	)
Others (*)		2,938			1			—			2,939

Ending balance		52,830			15,269			6,767			74,866

(*)

Recognized as a result of new financial guarantee contract valued at initial fair value.

- 150 -

Provisions for unused loan commitment


	For the year ended December 31, 2022
	Stage1			Stage2			Stage3			Total
Beginning balance		67,440			44,536			320			112,296
Transfer to 12-month expected credit loss		14,349			(14,217	)		(132	)		—
Transfer to expected credit loss for the entire period		(2,619	)		2,648			(29	)		—
Transfer to credit-impaired financial assets		(197	)		(306	)		503			—
Net provision (reversal) of unused amount		(11,402	)		5,527			(457	)		(6,332	)
Others		69			—			—			69

Ending balance		67,640			38,188			205			106,033


	For the year ended December 31, 2021
	Stage1			Stage2			Stage3			Total
Beginning balance		63,240			55,726			3,189			122,155
Transfer to 12-month expected credit loss		15,522			(14,965	)		(557	)		—
Transfer to expected credit loss for the entire period		(2,338	)		3,129			(791	)		—
Transfer to credit-impaired financial assets		(110	)		(226	)		336			—
Net provision (reversal) of unused amount		(9,005	)		871			(1,857	)		(9,991	)
Others		131			1			—			132

Ending balance		67,440			44,536			320			112,296

(3)	Changes in asset retirement obligation for the years ended December 31, 2022 and 2021, are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2022			2021
Beginning balance		80,777			68,402
Provisions provided		4,082			3,235
Provisions used		(7,400	)		(5,066	)
Reversal of provisions unused		(21	)		(947	)
Unwinding of discount		909			495
Increase (decrease) of restoration expense, etc.		4,370			14,658

Ending balance		82,717			80,777

The amount of the asset retirement obligation is the present value of the best estimate of future expected expenditure to settle the obligation – arising from leased premises as of December 31, 2022, discounted by appropriate discount rate. The restoration cost is expected to occur by the end of each premise’s lease period, and the Group has used average lease period of each category of leases terminated during the past years in order to rationally estimate the lease period. In addition, the Group used average amount of actual recovery cost for the past 3 years and the inflation rate for last year in order to estimate future recovery cost.

- 151 -

(4)	Changes in other provisions for the years ended December 31, 2022 and 2021, are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2022			2021
Beginning balance		308,195			221,494
Provisions provided		36,284			85,706
Provisions used		(8,540	)		(10,375	)
Reversal of provisions unused (*)		(54,893	)		(718	)
Foreign currencies translation adjustments		(621	)		11,957
Others		182			131

Ending balance		280,607			308,195

(*)

The Group provided Korean won settlement services for trading transaction settlement between Korea and Iran, investigated by U.S. prosecutors (federal prosecutors, New York state prosecutors) and New York State Department of Financial Services for violations of U.S. sanctions against Iran, Sudan, Syria and Cuba. In this regard, the Office of Foreign Assets Control concluded its investigation in December 2020 urging the bank’s attention without taking any additional sanctions, and New York State Department of Financial Services concluded its investigation in February 2022 without taking any additional sanctions. Meanwhile, in June 2022, the Group reversed the provision related to the investigation of the U.S. Prosecutors, which have not been completed yet, in consideration of the opinion of an independent legal expert that the probability of sanctions by the U.S. Prosecutors in this case is low.

(5)

Others

The Group recognized the provision of the estimated compensation amount related to the miss-selling of the Derivative Linked Fund (DLF) incurred during 2019 and a fine expected to be imposed by the Financial Supervisory Service as the best estimate for the expenditure required to meet its obligations at the end of the reporting period.

For the year ended December 31, 2020, the Group recognized the provisions as the best estimate due to the expected losses of clients arising from the delay in the redemption of funds by Lime Asset Management and the dispute settlement by the Financial Supervisory Service. As of December 31, 2022, the provision for this case is 122.1 billion won.

On October 22, 2021, the Group made a resolution to pay in advance for Platform Asia funds, etc., which are delayed in redemption at the Board of Directors Meeting of Woori Bank, the subsidiary. Provisions for estimated compensation amounts related to the prepayment was recognized as the best estimate of the expenditure. As of December 31, 2022, the sales revenue for Platform Asia, Heritage DLS, and Gen2 DLS sold 85 billion won, 22.3 billion won, and 90.2 billion won, respectively, and provisions is 35.7 billion won, 22.3 billion won, and 12.6 billion won, respectively.

- 152 -

24.

NET DEFINED BENEFIT LIABILITY(ASSET)

The Group’s pension plan is based on the defined benefit retirement pension plan. 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 salary 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):


	December 31, 2022			December 31, 2021
Present value of defined benefit obligation		1,377,545			1,618,098
Fair value of plan assets		(1,661,623	)		(1,591,458	)

Net defined benefit liabilities (*)		(284,078	)		26,640

(*) Net defined benefit assets of 284,078 million won as of December 31, 2022 are the subtracted amount of the net defined benefit liability of 35,202 million won from the net defined benefit assets of 319,280. Net defined benefit liability of 26,640 million won as of December 31, 2021 are the subtracted amount of the net defined benefit asset of 21,346 million won from the net defined benefit liability of 47,986.

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


		For the years ended December 31
		2022			2021
Beginning balance			1,618,098			1,610,680
Current service cost			166,741			178,416
Interest cost			48,238			39,814
Remeasurements	Financial assumption		(356,344	)		(92,367	)
	Demographic assumptions		(9	)		(251	)
	Experience adjustments		(3,838	)		(12,155	)
Retirement benefit paid			(92,914	)		(106,050	)
Foreign currencies translation adjustments			(69	)		165
Others			(2,358	)		(154	)

Ending balance			1,377,545			1,618,098

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


	For the years ended December 31
	2022			2021
Beginning balance		1,591,458			1,564,101
Interest income		49,916			40,927
Remeasurements		(18,095	)		(15,022	)
Employer’s contributions		127,979			103,251
Retirement benefit paid		(87,472	)		(99,523	)
Others		(2,163	)		(2,276	)

Ending balance		1,661,623			1,591,458

(4)	The fair value of the plan assets by composition is as follows as of December 31, 2022 and 2021.


	December 31, 2022		December 31, 2021
Cash and due from banks		1,661,623		1,591,458

Meanwhile, Among plan assets, realized returns on plan assets amount to 31,821 million won and 25,905 million won for the years ended December 31, 2022 and 2021, respectively. The contribution expected to be paid in the next accounting year amounts to 123,043 million won.

(5)	Amounts related to the defined benefit plan that are recognized in the consolidated statements of comprehensive income are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2022			2021
Current service cost		166,741			178,416
Net interest expense		(1,678	)		(1,113	)

Cost recognized in net income		165,063			177,303

Remeasurements (*)		(342,096	)		(89,751	)

Cost recognized in total comprehensive income		(177,033	)		87,552

(*)

Amount before tax

Retirement benefits related to defined contribution plans recognized as expenses are 4,240 million won, and 4,494 million won for the years ended December 31, 2022 and 2021, respectively.

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


	December 31, 2022	December 31, 2021
Discount rate	5.25% ~ 5.99%	2.40% ~ 3.49%
Future wage growth rate	2.1% ~ 5.84%	2.03% ~ 5.56%
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

The weighted average maturity of defined benefit liability is a minimum of 5.38 to a maximum 10.71 years.

- 154 -

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


		December 31, 2022			December 31, 2021
Discount rate	Increase by 1% point		(146,319	)		(161,428	)
	Decrease by 1% point		170,529			189,630
Future wage growth rate	Increase by 1% point		174,546			188,392
	Decrease by 1% point		(153,712	)		(163,431	)

25.

OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES

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


	December 31, 2022			December 31, 2021
Other financial liabilities:
Accounts payable		6,001,858			6,969,170
Accrued expenses		3,219,349			2,070,639
Borrowings from trust accounts		3,475,118			3,107,456
Agency business revenue		213,845			433,041
Foreign exchange payables		822,446			782,176
Domestic exchange settlement credits		4,631,921			6,708,220
Lease liabilities		319,161			343,213
Other miscellaneous financial liabilities		4,148,621			3,772,437
Present value discount		(20,451	)		(15,322	)

Sub-total		22,811,868			24,171,030

Other liabilities:
Unearned income		351,633			291,147
Other miscellaneous liabilities		338,524			265,706

Sub-total		690,157			556,853

Total		23,502,025			24,727,883

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26.

DERIVATIVES

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


	December 31, 2022
			Assets						Liabilities
	Nominal amount		For cash flow hedge		For fair value hedge		For trading		For cash flow hedge		For fair value hedge		For trading
Interest rate:
Futures		42,545		—		—		—		—		—		—
Forwards		2,620,000		—		—		249,356		—		—		—
Swaps		136,550,518		2,041		—		440,540		—		193,831		474,158
Purchase options		170,000		—		—		9,308		—		—		—
Written options		310,000		—		—		—		—		—		16,752
Currency:
Futures		51,136		—		—		—		—		—		—
Forwards		90,134,257		—		—		3,083,082		—		—		1,360,535
Swaps		97,197,309		35,745		—		3,105,901		9,080		—		5,500,970
Purchase options		487,852		—		—		23,182		—		—		—
Written options		570,982		—		—		—		—		—		7,929
Equity:
Futures		958,589		—		—		—		—		—		—
Forwards		183		—		—		100		—		—		—
Swaps		568,835		—		—		90,237		—		—		673
Purchase options		29,801,478		—		—		1,204,475		—		—		—
Written options		29,874,836		—		—		—		—		—		1,544,108

Total		389,338,520		37,786		—		8,206,181		9,080		193,831		8,905,125


	December 31, 2021
			Assets						Liabilities
	Nominal amount		For cash flow hedge		For fair value hedge		For trading		For cash flow hedge		For fair value hedge		For trading
Interest rate:
Futures		118,423		—		—		—		—		—		—
Forwards		340,000		—		—		16,434		—		—		—
Swaps		134,196,188		351		95,103		136,185		—		20,287		305,443
Purchase options		170,000		—		—		3,959		—		—		—
Written options		340,000		—		—		—		—		—		8,552
Currency:
Futures		7,445		—		—		—		—		—		—
Forwards		114,072,910		—		—		2,466,893		—		—		993,823
Swaps		101,117,559		11,310		—		1,444,634		7,297		—		2,345,735
Purchase options		1,079,610		—		—		10,968		—		—		—
Written options		1,686,787		—		—		—		—		—		8,952
Equity:
Futures		337,916		—		—		—		—		—		—
Forwards		233		—		—		64		—		—		—
Swaps		642,963		—		—		27,031		—		—		3,784
Purchase options		17,503,553		—		—		696,963		—		—		—
Written options		19,106,573		—		—		—		—		—		900,979

Total		390,720,160		11,661		95,103		4,803,131		7,297		20,287		4,567,268

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

- 156 -

(2)	Overview of the Group’s hedge accounting

The hedging relationships the entity applies fair value hedge accounting and cash flow hedge accounting to are affected by interest rate which is related with Interest Rate Benchmark Reform. The interest rates to which the hedging relationships are exposed are USD 3M LIBOR, Compounding SOFR, AUD 3M BBSW, and CD 3M. The nominal amounts of hedging instruments related to USD 3M LIBOR, Compounding SOFR, AUD 3M BBSW, and CD 3M in the hedging relationships of the Group are USD 2,120,000,000, USD 525,000,000, AUD 150,000,000, and 150,000 million Won, respectively. The entity pays close attention to discussions in the market and industry regarding the applicable alternative benchmark interest rates for the exposed interest rate. The entity judges related uncertainty is expected to be no longer present when the exposed interest rates are replaced by the applicable benchmark interest rates.

Fair value hedge

As of December 31, 2022, the Group has applied fair value hedge on fixed interest rate foreign currency denominated debentures amounting to 2,928,127 million Won, and foreign currency loans amounting to 148,856 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.

Pursuant to the interest rate swap agreement, by swapping the calculated difference between the fixed interest rate and floating interest rate applied to the nominal value, the fair value fluctuation risk is hedged as the foreign currency denominated debentures fixed interest rate terms are converted to floating interest rate. Pursuant to the interest rate swap agreement, hedge ratio is determined by matching the nominal value of hedging instrument to the face value of the hedged item.

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, price margin set by counterparty of hedging instrument, and unilateral change in credit risk of any party of hedging instrument.

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 fair 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 by 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 plus spread, AUD BBSW 3M plus spread and EURIBOR 3M 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.

- 157 -

Cash Flow Hedge

As of the December 31, 2022, the Group has applied cash flow hedge on local currency denominated debentures amounting to 229,892 million won and debentures on foreign currency amounting to 1,094,920 million won The Group’s hedging strategies are to ① Mitigate risks of cash flow fluctuation from variable interest rate debentures on local currency due to changes in market interest rate by entering into an interest rate swap contract and thereby designating it as hedging instrument; ② Mitigate the risks of cash flow fluctuation from principal and interest of variable interest rate debentures denominated in foreign currency due to changes in foreign exchange rates and interest rates by entering into a currency swap contract and thereby designating it as hedging instrument; ③ Mitigate the risks of cash flow fluctuation from principal and interest of fixed interest rate debentures denominated in foreign currency due to changes in foreign exchange rates by entering into a currency swap contract and thereby designating it as hedging instrument.

This means exchanging a predetermined nominal amount as set forth in the interest rate swap contract adjusted by the differences between the fixed and variable interest rates, which results in the conversion of interest rates of debentures in local currency from variable interest into fixed interest, eliminating the cash flow fluctuation risk.

In addition, this also means a payment of predetermined principal amount as set forth in the currency swap adjusted by fixed interest rate, an exchange of an amount calculated by applying variable interest rate to USD or applying fixed interest rate to SGD, and an exchange of the principal denominated in KRW and principal denominated in foreign currency at maturity eliminating cash flow fluctuation risk on principal and interest.

The hedge ratio is determined by matching the nominal amount of the hedging instrument to the face amount of the hedged item in accordance with interest rate swap and currency swap.

Only interest rate and foreign exchange rate fluctuation risk, which is the most significant factor in the cash flow fluctuation of the hedged item, is addressed in this hedging relationship, and other risk factors such as credit risk are not subject to hedging.

Thus, there could be hedge ineffectiveness arising from price margin set by the counterparty of hedging instruments and unilateral change in credit risk of any party in the transaction.

The interest rate swap, currency swap contract and the hedged item are all affected by the changes in market interest rate and foreign exchange rates which are basic factors of the derivative. The Group expects that the value of interest rate swap contract, currency swap contract and value of the hedged item will generally fluctuate in opposite direction.

Hedges of Net Investment in Foreign Operations

Foreign currency exposure arises from the Group’s net investments in Woori America Bank, Woori Cambodia Bank and Hong Kong Woori Investment Bank, and overseas branches, which use USD as their functional currency. The risk arises from fluctuations in the spot exchange rate between USD and KRW. This may result in different net investment amounts.

The risk hedged in the net investment hedging is the weakness of KRW against USD, which may reduce the carrying amount of the Group’s net investments in Woori America Bank, Woori Cambodia Bank and Hong Kong Woori Investment Bank.

A portion of the Group’s net investments in Woori America Bank, Woori Cambodia Bank and Hong Kong Woori Investment Bank are hedged in USD denominated foreign currency bonds(Carrying amount as of December 31, 2022: USD 864,390,437) and mitigate foreign exchange risk arising from the net assets of subsidiaries.

The bonds was designated as a hedging instrument for changes in the value of net investment resulting from fluctuations in the USD/KRW spot exchange rate.

- 158 -

To assess the effectiveness of the hedging instrument, the Group determines the economic relationship between the hedging instrument and the hedged item by comparing (offsetting) changes in the carrying amount of the liability due to changes in the spot exchange rate with changes. The Group’s policy is to hedge the net investment only within the principal range of the liability.

(3)	The nominal amounts of the hedging instrument are as follows (Unit: USD, AUD, EUR, and Korean Won in millions):


	December 31, 2022
	1 year or less		1 year to 5 years		More than 5 years		Total
Fair value hedge
Interest rate risk
Interest rate swap (USD)		—		2,075,000,000		300,000,000		2,375,000,000
Interest rate swap (AUD)		150,000,000		—		—		150,000,000
Interest rate swap (KRW)		150,000		—		—		150,000
Cash flow hedge
Interest rate risk
Interest rate swap (KRW)		50,000		140,000		—		190,000
Foreign currencies translation risk and interest rate risk
Currency swap (USD)		—		270,000,000		—		270,000,000
Foreign currencies translation risk
Currency swap (USD)		80,000,000		100,000,000		—		180,000,000
Currency swap (EUR)		—		194,780,000		—		194,780,000
Hedges of net investment in foreign operations
Exchange risk
Foreign currency bond (USD)		272,390,437		592,000,000		—		864,390,437


	December 31, 2021
	1 year or less		1 year to 5 years		More than 5 years		Total
Fair value hedge
Interest rate risk
Interest rate swap (USD)		—		1,550,000,000		300,000,000		1,850,000,000
Interest rate swap (AUD)		—		150,000,000		—		150,000,000
Interest rate swap (EUR)		—		26,591,163		—		26,591,163
Cash flow hedge
Interest rate risk
Interest rate swap (KRW)		—		50,000		—		50,000
Foreign currencies translation risk and interest rate risk
Currency swap (USD)		200,000,000		270,000,000		—		470,000,000
Foreign currencies translation risk
Currency swap (USD)		—		180,000,000		—		180,000,000

- 159 -

(4)	The average interest rate and average currency rate of the hedging instrument as of December 31, 2022 and 2021 are as follows:


		December 31, 2022
		Average interest rate and average exchange rate
Fair value hedge
Interest rate risk
Interest rate swap (USD)		Fixed 3.62% receipt and Libor 3M+1.45% floating paid
Interest rate swap (USD)		Fixed 2.05% receipt and (C.SOFR)+0.65% paid
Interest rate swap (AUD)		Fixed 0.84% receipt and BBSW 3M+0.72% paid
Interest rate swap (KRW)		Fixed 3.13% receipt and CD 3M paid
Cash flow hedge
Interest rate risk
Interest rate swap (KRW)		KRW CMS 5Y+0.46% receipt, 3.65% paid
Interest rate swap (KRW)		KRW CD+0.33% receipt, 1.68% paid
Foreign currencies translation risk and interest rate risk
Currency swap (USD)		USD 1M Libor+0.79% receipt, KRW 0.80% paid, KRW/USD = 1,226.29
Foreign currencies translation risk
Currency swap (USD)		USD 1.50% receipt, KRW 1.57% paid, KRW/USD = 1,140.50
Currency swap (EUR)		EUR 1.98% receipt, KRW 3.68% paid, KRW/EUR = 1,344.08
Hedges of net investment
Exchanging rate risk
Foreign currency denominated debentures(KRW/USD)		1,344.37


		December 31, 2021
		Average interest rate and average exchange rate
Fair value hedge
Interest rate risk
Interest rate swap (USD)		Fixed 3.62% receipt and Libor 3M + 1.45% floating paid
Interest rate swap (AUD)		Fixed 0.84% receipt and BBSW 3M+0.72% paid
Interest rate swap (EUR)		EURIBOR 3M + 0.09% receipt and 1.5% fixed paid
Cash flow hedge
Interest rate risk
Interest rate swap (KRW)		KRW CD+0.33% receipt, 1.68% paid
Foreign currencies translation risk and interest rate risk
Currency swap (USD)		USD 1M Libor+0.70% receipt, KRW 0.93% paid, KRW/USD = 1,206.60
Foreign currencies translation risk
Currency swap (USD)		USD 1.50% receipt, KRW 1.57% paid, KRW/USD = 1,140.50

- 160 -

(5)	The amounts related to items designated as hedging instruments are as follows (Unit: USD, AUD, EUR, and Korean Won in millions):


	December 31, 2022
	Nominal amounts of the hedging instrument		Carrying amounts of the hedging instrument				Line item in the statement of financial position where the hedging instrument is located			Changing in fair value used for calculating hedge ineffectiveness
	Nominal amounts of the hedging instrument		Assets		Liabilities
Fair value hedge
Interest rate risk
Interest rate Swap(USD)		2,375,000,000		—		193,831		Derivative assets (designated for hedging	)		(247,765	)
Interest rate Swap(AUD)		150,000,000
Interest rate Swap(KRW)		150,000						Derivative liabilities (designated for hedging	)
Cash flow hedge
Interest rate risk
Interest rate swap(KRW)		190,000		2,041		—		Derivative liabilities (designated for hedging	)		1,690
Foreign currency translation risk and interest rate risk
Currency swap(USD)		270,000,000		17,909		—		Derivative liabilities (designated for hedging	)		58,253
Foreign currency translation risk
Currency swap(USD)		180,000,000		17,836		—		Derivative liabilities (designated for hedging	)		9,317
Currency swap(EUR)		194,780,000		—		9,080		Derivative liabilities (designated for hedging	)		(10,286	)
Hedges of net investment in foreign operations
Exchange rate risk
Foreign currency bond(USD)		864,390,437		—		1,095,442		Foreign currency bond			(28,553	)



	December 31, 2021
	Nominal amounts of the hedging instrument		Carrying amounts of the hedging instrument				Line item in the statement of financial position where the hedging instrument is located			Changing in fair value used for calculating hedge ineffectiveness
	Nominal amounts of the hedging instrument		Assets		Liabilities
Fair value hedge
Interest rate risk
Interest rate swap	USD	1,850,000,000		95,086		20,287		Derivative assets (designated for hedging	)		(83,821	)
Interest rate swap	AUD	150,000,000
Interest rate swap	EUR	26,591,163		17		—		Derivative liabilities (designated for hedging	)		17
Cash flow hedge
Interest rate risk
Interest rate swap	KRW	50,000		351		—		Derivative liabilities (designated for hedging	)		1,896
Foreign currency translation risk and interest rate risk
Currency swap	USD	470,000,000		3,631		7,297		Derivative liabilities (designated for hedging	)		60,564
Foreign currency translation risk
Currency swap	USD	180,000,000		7,679		—		Derivative liabilities (designated for hedging	)		8,218

- 161 -

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


	December 31, 2022
	Carrying amounts of the hedged 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								Cash flow hedge reserve (*)
Fair value hedge
Interest rate risk
Debentures		—		3,076,983		—		(199,804	)		Debentures		257,911			—
Cash flow hedge
Interest rate risk
Debentures		—		229,892		—		—			Debentures		(3,742	)		2,531
Foreign currencies translation risk and interest rate risk
Debentures		—		342,019		—		—			Debentures		(23,296	)		8,648
Foreign currencies translation risk
Debentures		—		752,901		—		—			Debentures		11,256			(24,600	)
Hedges of net investment in foreign operations
Exchange rate risk
Foreign operations net asset		—		1,095,442		—		—			Foreign operations net asset		28,553			(38,797	)

(*) After tax amount


	December 31, 2021
	Carrying amounts of the hedged 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							Cash flow hedge reserve (*)
Fair value hedge
Interest rate risk
Debentures		—		2,366,724		—		53,160		Debentures		100,343			—
Foreign currency borrowing		—		35,694		—		—		Foreign currency borrowings		(17	)		(17	)
Cash flow hedge
Interest rate risk
Debentures		—		49,977		—		—		Debentures		(1,760	)		281
Foreign currencies translation risk and interest rate risk
Debentures		—		556,607		—		—		Debentures		(53,832	)		5,859
Foreign currencies translation risk
Debentures		—		212,715		—		—		Debentures		(7,609	)		(305	)

(*) After tax amount

- 162 -

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


	For the year ended December 31, 2022
		Hedge ineffectiveness recognized in profit or loss		Line item in the profit or loss that includes hedge ineffectiveness
Fair value hedge	Interest rate risk		10,146	Other net operating income(expense)

	For the year ended December 31, 2021
		Hedge ineffectiveness recognized in profit or loss		Line item in the profit or loss that includes hedge ineffectiveness
Fair value hedge	Interest rate risk		16,522	Other net operating income(expense)

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


		For the year ended December 31, 2022
		Changes in the value of hedging instruments recognized in OCI			Hedge ineffectiveness recognized in profit or loss			Changes in the value of foreign basis spread recognized in OCI			Line item recognized in the profit or loss	Amounts reclassified from cash flow hedge reserve to profit or loss			Line item affected in profit or loss due to reclassification
Cash flow hedge	Interest rate risk		1,653			37			—		Other net operating income (expense)		220		Other net operating income (expense)
	Foreign currencies translation risk and interest rate risk		58,253			—			(1,721	)	Other net operating income (expense)		(53,743	)	Other net operating income (expense)
	Foreign currencies translation risk		(969	)		—			2,046		Other net operating income (expense)		(16,111	)	Other net operating income (expense)

		For the year ended December 31, 2021
		Changes in the value of hedging instruments recognized in OCI			Hedge ineffectiveness recognized in profit or loss			Changes in the value of foreign basis spread recognized in OCI			Line item recognized in the profit or loss	Amounts reclassified from cash flow hedge reserve to profit or loss			Line item affected in profit or loss due to reclassification
Cash flow hedge	Interest rate risk		1,641			256			—		Other net operating income (expense)		—		Other net operating income (expense)
	Foreign currencies translation risk and interest rate risk		60,394			169			(2,300	)	Other net operating income (expense)		(52,126	)	Other net operating income (expense)
	Foreign currencies translation risk		8,476			(258	)		416		Other net operating income (expense)		(9,045	)	Other net operating income (expense)

- 163 -

(9)	The amounts recognized in profit or loss and other comprehensive income related to the hedging of net investments in foreign operations are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2022
			Profit or loss recognized in OCI			Hedge ineffectiveness recognized in profit or loss		Line item which recognized the hedge ineffectiveness
Hedges of net investment in foreign operation		Exchange rate risk		(38,797	)		—		—

- 164 -

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 years ended December 31
	2022			2021
Beginning balance		29,111			6,939
New transactions		21,656			49,523
Amounts recognized in losses		(32,803	)		(27,351	)

Ending balance		17,964			29,111

In case some variables to measure fair values of financial instruments are not observable in the market, valuation techniques are utilized to evaluate such financial instruments. Those financial instruments are recorded the transaction price as at the time of acquisition, even though there are difference noted between the transaction price and the fair value. The table above presents the difference yet to be realized as profit or losses as of December 31, 2022 and 2021.

28.

EQUITY

(1)	Details of equity as of December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	December 31, 2022			December 31, 2021
Capital
Common stock capital		3,640,303			3,640,303
Hybrid securities		3,112,449			2,294,381
Capital surplus
Paid in capital in excess of par		643,544			643,544
Others		38,841			38,841

Sub-total		682,385			682,385

Capital adjustments
Treasury stocks		(3,819	)		(3,819	)
Other adjustments (*1)		(1,780,367	)		(1,747,242	)

Sub-total		(1,784,186	)		(1,751,061	)

Accumulated other comprehensive income
Financial assets at FVTOCI		(645,731	)		(162,522	)
Changes in capital due to equity method		475			(138	)
Gain (loss) on foreign currency translation of foreign operations		(24,202	)		(63,781	)
Gain (loss) on hedges of net investment in foreign operations		(20,701	)		—
Remeasurements of defined benefit plan		55,235			(195,944	)
Gain (loss) on valuation of cash flow hedge		(4,282	)		5,553
Capital related to non-current assets held for sale		—			279

Sub-total		(639,206	)		(416,553	)

Retained earnings (2) (3)		23,750,152			21,392,564
Non-controlling interest (*4)		2,865,445			3,008,176

Total		31,627,342			28,850,195

(*1)	Included 178,060 million Won in capital transaction gains and losses recognized by Woori Bank and (formerly) Woori Financial Group in 2014 and 2,238,228 million Won due to the spin-off of Gyeongnam Bank and Gwangju Bank.

(*2)	The regulatory reserve for credit losses in retained earnings amounted to 2,966,960 million Won and 2,568,367 million Won as of December 31, 2022 and 2021, respectively in accordance with the relevant article.

(*3)	The earned surplus reserve in retained earnings amounted to 181,860 million Won and 122,370 million Won as of December 31, 2022 and 2021 in accordance with the Article 53 of the Financial Holding Company Act.

- 165 -

(*4)

The hybrid securities issued by Woori Bank amounting to 2,344,816 million Won and 2,555,166 million Won as of December 31, 2022 and 2021, respectively, are recognized as non-controlling interests. 113,995 million Won and 144,923 million Won of dividends for the hybrid securities issued by Woori Bank are allocated to net profit and loss of the non-controlling interests for the years ended December 31, 2022 and 2021, respectively.

(2)	The number of authorized shares and others of the Group are as follows:


	December 31, 2022		December 31, 2021
Shares of common stock authorized		4,000,000,000 Shares		4,000,000,000 Shares
Par value		5,000 Won		5,000 Won
Shares of common stock issued		728,060,549 Shares		728,060,549 Shares
Capital stock		3,640,303 million Won		3,640,303 million Won

(3)	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 (%)		December 31, 2022			December 31, 2021
Securities in local currency	2019-07-18		—		3.49		500,000			500,000
Securities in local currency	2019-10-11		—		3.32		500,000			500,000
Securities in local currency	2020-02-06		—		3.34		400,000			400,000
Securities in local currency	2020-06-12		—		3.23		300,000			300,000
Securities in local currency	2020-10-23		—		3.00		200,000			200,000
Securities in local currency	2021-04-08		—		3.15		200,000			200,000
Securities in local currency	2021-10-14		—		3.60		200,000			200,000
Securities in local currency	2022-02-17		—		4.10		300,000			—
Securities in local currency	2022-07-28		—		4.99		300,000			—
Securities in local currency	2022-10-25		—		5.97		220,000			—
Issuance cost							(7,551	)		(5,619	)

Total							3,112,449			2,294,381

The hybrid securities mentioned above do not have maturity date but are redeemable after 5 years from date of issuance.

- 166 -

(4)	Accumulated other comprehensive income

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


	For the year ended December 31, 2022
	Beginning balance			Increase (decrease) (*)			Reclassification adjustments			Income tax effect			Ending balance
Net gain (loss) on valuation of financial assets at FVTOCI		(162,522	)		(659,906	)		21,498			155,199			(645,731	)
Changes in capital due to equity method		(138	)		6,563			—			(5,950	)		475
Gain (loss) on foreign currency translation of foreign operations		(63,781	)		33,368			—			6,211			(24,202	)
Gain (loss) on hedges of net investment in foreign operations		—			(28,553	)		—			7,852			(20,701	)
Remeasurement gain (loss) related to defined benefit plan		(195,944	)		346,553			—			(95,374	)		55,235
Gain (loss) on valuation of cash flow hedge		5,553			(10,373	)		(220	)		758			(4,282	)
Capital related to non-current assets held for sale		279			(385	)		—			106			—

Total		(416,553	)		(312,733	)		21,278			68,802			(639,206	)

(*)

The increase(decrease) of financial asset valuation profit or loss at fair value through other comprehensive income and non-current assets held for sale are changes due to the period evaluation, and the reclassification adjustments amounting to (10,254) million Won and 279 million Won are due to disposal of equity securities and non-current assets held for sale, respectively during the period.


	For the year ended December 31, 2021
	Beginning balance			Increase (decrease) (*)			Reclassification adjustments			Income tax effect			Ending balance
Net gain (loss) on valuation of financial assets at FVTOCI		(9,833	)		(174,113	)		(32,624	)		54,048			(162,522	)
Changes in capital due to equity method		(2,609	)		3,885			—			(1,414	)		(138	)
Gain (loss) on foreign currency translation of foreign operations		(298,363	)		239,614			—			(5,032	)		(63,781	)
Remeasurement gain (loss) related to defined benefit plan		(261,195	)		90,337			—			(25,086	)		(195,944	)
Gain (loss) on valuation of derivatives designated as cash flow hedges		(1,386	)		6,416			1,221			(698	)		5,553
Capital related to noncurrent assets held for sale		1,226			(1,306	)		—			359			279

Total		(572,160	)		164,833			(31,403	)		22,177			(416,553	)

(*)

The increase(decrease) of financial asset valuation profit or loss at fair value through other comprehensive income and non-current assets held for sale are changes due to the period evaluation, and the reclassification adjustments amounting to (2,220) million Won, 946 million Won and (947) million Won are due to disposal of equity securities, equity method investments and non-current assets held for sale, respectively during the period.

- 167 -

(5)	Regulatory Reserve for Credit Loss

In accordance with Article 26 ~ 28 of the Financial holding company Supervision Regulations, the Group calculates and discloses the regulatory reserve for credit loss.

Balance of the regulatory reserve for credit loss

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


	December 31, 2022			December 31, 2021
Beginning balance		2,966,960			2,568,367
Planned provision of regulatory reserve (reversal) for credit loss		(127,485	)		398,593

Ending balance		2,839,475			2,966,960

Provision of regulatory reserve for credit loss, adjusted income after the provision of regulatory reserve and others

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


	For the years ended December 31
	2022			2021
Net income before regulatory reserve		3,323,982			2,807,371
Provision of regulatory reserve (reversal) for credit loss		(127,485	)		398,593
Adjusted net income after the provision of regulatory reserve		3,451,467			2,408,778
Dividends to hybrid securities		(91,756	)		(66,250	)
Adjusted net income after regulatory reserve and dividends to hybrid securities		3,359,711			2,342,528
Adjusted EPS after regulatory reserve and the dividends to hybrid securities (Unit: Korean Won)		4,615			3,234

(6)	Treasury stock

Details of treasury stocks are as follows (Unit: Shares, Korean Won in millions):


	December 31, 2022				December 31, 2021
	Number of shares		Carrying amount		Number of shares		Carrying amount
Beginning balance		343,991		3,819		2		—
Acquisition		—		—		343,989		3,819

Ending balance		343,991		3,819		343,991		3,819

- 168 -

29.

DIVIDENDS

(1)	Dividends per share and the total dividends for the fiscal year ending December 31, 2021 were 750 Won and 546,044 million Won, respectively, and the dividends were approved at the regular general shareholders’ meeting held on March 25, 2022 and were paid in April 2022.

(2)	On July 22, 2022, in accordance with a resolution of the Board of Directors, the Group declared the interim dividend of 150 Won per share (total dividend of 109,209 million Won) with June 30, 2022 as base date, and the dividends were paid in August 2022.

(3)	A dividend in respect of the year ended December 31, 2022, of 980 won per share, amounting to a total dividend of 713,497 million won, is to be proposed to shareholders at the annual general meeting on March 24, 2023. These financial statements do not include this dividend payable.

30.

NET INTEREST INCOME

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


	For the years ended December 31
	2022		2021
Financial assets at FVTPL		106,698		45,803
Financial assets at FVTOCI		632,615		381,814
Financial assets at amortized cost:
Securities at amortized cost		515,246		324,920
Loans and other financial assets at amortized cost:
Interest on due from banks		244,331		46,600
Interest on loans		13,109,022		9,065,074
Interest of other receivables		46,637		30,538

Subtotal		13,399,990		9,142,212

Total		14,654,549		9,894,749

(2)	Details of interest expense recognized are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2022		2021
Interest on deposits due to customers		4,120,811		1,906,858
Interest on borrowings		598,185		219,994
Interest on debentures		1,036,191		727,093
Other interest expense		195,090		47,647
Interest on lease liabilities		7,693		7,436

Total		5,957,970		2,909,028

- 169 -

31.

NET FEES AND COMMISSIONS INCOME

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


	For the years ended December 31
	2022		2021
Fees and commission received for brokerage		185,545		182,794
Fees and commission received related to credit		189,856		197,125
Fees and commission received for electronic finance		130,712		131,941
Fees and commission received on foreign exchange handling		56,812		56,210
Fees and commission received on foreign exchange		96,713		73,894
Fees and commission received for guarantee		85,340		76,428
Fees and commission received on credit card		594,897		573,048
Fees and commission received on securities business		111,211		100,991
Fees and commission from trust management		266,447		216,203
Fees and commission received on credit information		10,190		10,220
Fees and commission received related to lease		572,563		374,900
Other fees		199,414		177,951

Total		2,499,700		2,171,705

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


	For the years ended December 31
	2022		2021
Fees and commissions paid		325,536		261,734
Credit card commission		446,885		425,796
Securities business commission		1,414		1,605
Others		15,695		11,795

Total		789,530		700,930

32.

DIVIDEND INCOME

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


	For the years ended December 31
	2022		2021
Dividend income related to financial assets at FVTPL		136,136		284,683
Dividend income related to financial assets at FVTOCI		23,846		24,528

Total		159,982		309,211

(2)	Details of dividends related to financial assets at FVTOCI are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2022		2021
Dividend income recognized from assets held:
Equity securities		23,846		24,528

- 170 -

33.

NET GAIN OR LOSS ON FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS MANDATORILY MEASURED AT FAIR VALUE

(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 years ended December 31
	2022		2021
Gain on financial instruments at fair value through profit or loss measured at fair value		238,502		325,649
Gain on financial instruments at fair value through profit or loss designated as upon initial recognition		—		102

Total		238,502		325,751

(2)	Details of net gain or loss on financial instruments at fair value through profit or loss measured at fair value and financial instruments held for trading are as follows (Unit: Korean Won in millions):


			For the years ended December 31
			2022			2021
Financial assets at FVTPL	Securities	Gain on transactions and valuation		294,667			249,803
		Loss on transactions and valuation		(553,093	)		(197,172	)

		Sub-total		(258,426	)		52,631

	Loans	Gain on transactions and valuation		24,005			24,674
		Loss on transactions and valuation		(2,219	)		(6,770	)

		Sub-total		21,786			17,904

	Other financial assets	Gain on transactions and valuation		21,602			17,034
		Loss on transactions and valuation		(12,314	)		(12,370	)

		Sub-total		9,288			4,664

	Sub-total			(227,352	)		75,199

Derivatives (Held for trading)	Interest rates derivatives	Gain on transactions and valuation		5,216,543			2,020,004
		Loss on transactions and valuation		(3,625,834	)		(1,746,752	)

		Sub-total		1,590,709			273,252

	Currency derivatives	Gain on transactions and valuation		14,601,674			9,685,798
		Loss on transactions and valuation		(15,713,074	)		(9,715,260	)

		Sub-total		(1,111,400	)		(29,462	)

	Equity derivatives	Gain on transactions and valuation		2,836,843			1,754,671
		Loss on transactions and valuation		(2,850,334	)		(1,744,294	)

		Sub-total		(13,491	)		10,377

	Other derivatives	Gain on transactions and valuation		49			64
		Loss on transactions and valuation		(13	)		(3,781	)

		Sub-total		36			(3,717	)

	Sub-total			465,854			250,450

Net, total				238,502			325,649

(3)	Details of net gain (loss) on financial instruments at fair value through profit or loss designated as upon initial recognition are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2022		2021
Gain (loss) on equity-linked securities		—		102

- 171 -

34.

NET GAIN OR LOSS ON FINANCIAL ASSETS AT FVTOCI

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


	For the years ended December 31
	2022			2021
Gain (Loss) on redemption of securities		(7	)		(23	)
Gain (Loss) on transactions of securities		(21,491	)		32,647

Total		(21,498	)		32,624

35.

REVERSAL OF (PROVISION FOR) IMPAIRMENT LOSSES DUE TO CREDIT LOSS

Reversal of (provision for) impairment losses due to credit loss are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2022			2021
Reversal(provision) due to credit loss on financial assets measured at FVTOCI		827			(4,909	)
Provision for impairment loss due to credit loss on securities at amortized cost		(3,151	)		(664	)
Provision for impairment loss due to credit loss on loan and other financial assets at amortized cost		(881,668	)		(551,957	)
Provision for(reversal of) provision on guarantee		(7,611	)		10,701
Reversal of unused loan commitment		6,332			9,991

Total		(885,271	)		(536,838	)

- 172 -

36.

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

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


			For the years ended December 31
			2022		2021
Employee benefits	Short-term employee benefits	Salaries		1,980,363		1,775,018
	Short-term employee benefits	Employee fringe benefits		590,255		545,534
	Share based payment			9,632		17,774
	Retirement benefit service costs			169,303		181,797
	Termination			162,019		180,872

	Subtotal			2,911,572		2,700,995

Depreciation and amortization				521,827		524,154
Other general and administrative expenses	Rent			80,130		83,879
	Taxes and public dues			157,905		135,015
	Service charges			233,495		231,852
	Computer and IT related			127,186		117,875
	Telephone and communication			84,204		79,145
	Operating promotion			53,733		44,248
	Advertising			160,464		101,384
	Printing			6,799		6,449
	Traveling			10,716		7,449
	Supplies			8,309		7,642
	Insurance premium			20,670		10,692
	Maintenance			23,266		20,808
	Water, light, and heating			16,165		14,520
	Vehicle maintenance			14,831		11,590
	Others			98,618		49,714

	Sub-total			1,096,491		922,262

Total				4,529,890		4,147,411

(2)	Details of other operating income recognized are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2022		2021
Gain on transactions of foreign exchange		1,403,083		562,935
Gain related to derivatives (Designated for hedging)		71,179		61,271
Gain on fair value hedged items		257,910		106,253
Others		249,509		172,044

Total		1,981,681		902,503

- 173 -

(3)	Details of other operating expenses recognized are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2022		2021
Losses on transactions of foreign exchange		1,181,663		450,698
KDIC deposit insurance premium		423,834		406,276
Contribution to miscellaneous funds		402,057		367,961
Losses related to derivatives (Designated for hedging)		250,268		93,084
Losses on fair value hedged items		—		1,947
Others (*)		736,112		469,938

Total		2,993,934		1,789,904

(*)

Other expense includes 14,664 million Won and 13,963 million Won for intangible asset amortization cost and 388,895 million Won and 250,971 million Won for lease depreciation cost for the years ended December 31, 2022 and 2021, respectively.

- 174 -

(4)	Share-based payment

Details of performance condition share-based payment granted to executives as of December 31, 2022 and 2021 are as follows.

Performance condition share-based payment


Subject to		Shares granted for the year 2019
Type of payment		Cash-settled
Vesting period		January 1, 2019 ~ December 31, 2022
Date of payment		2023-01-01
Fair value (*1)		12,406 Won
Valuation method		Black-Scholes Model
Expected dividend rate		5.05%
Expected maturity date		—
Number of shares remaining	As of December 31, 2022	602,474 shares
Number of shares remaining	As of December 31, 2021	602,474 shares
Number of shares granted (*2)	As of December 31, 2022	602,474 shares
Number of shares granted (*2)	As of December 31, 2021	602,474 shares
Subject to		Shares granted for the year 2020
Type of payment		Cash-settled
Vesting period		January 1, 2020 ~ December 31, 2023
Date of payment		2024-01-01
Fair value (*1)		11,796 Won
Valuation method		Black-Scholes Model
Expected dividend rate		5.05%
Expected maturity date		1 year
Number of shares remaining	As of December 31, 2022	944,343 shares
	As of December 31, 2021	944,343 shares
Number of shares granted (*2)	As of December 31, 2022	944,343 shares
	As of December 31, 2021	944,343 shares
Subject to		Shares granted for the year 2021
Type of payment		Cash-settled
Vesting period		January 1, 2021 ~ December 31, 2024
Date of payment		2025-01-01
Fair value (*1)		11,215 Won
Valuation method		Black-Scholes Model
Expected dividend rate		5.05%
Expected maturity date		2 years
Number of shares remaining	As of December 31, 2022	1,105,515 shares
	As of December 31, 2021	1,105,515 shares
Number of shares granted (*2)	As of December 31, 2022	1,105,515 shares
	As of December 31, 2021	1,105,515 shares
Subject to		Shares granted for the year 2022
Type of payment		Cash-settled
Vesting period		January 1, 2022 ~ December 31, 2025
Date of payment		2026-01-01
Fair value (*1)		10,662 Won
Valuation method		Black-Scholes Model
Expected dividend rate		5.05%
Expected maturity date		3 years
Number of shares remaining	As of December 31, 2022	968,119 shares
	As of December 31, 2021	—
Number of shares granted (*2)	As of December 31, 2022	968,119 shares
	As of December 31, 2021	—

- 175 -

(*1)

As the amount of payment varies according to the base price (the arithmetic average of the weighted average stock price of transactions in the past one week, the past one month, and the past two months) at the date of payment, the fair value is calculated to measure the liability according to the Black Scholes model based on the base price at the time of each settlement.

(*2)

It is a system in which the amount of stock payable is determined at the beginning, and the payment rate is determined in accordance with the degree of achievement of the pre-set performance target. Performance is evaluated by long-term performance indicators such as relative shareholder return, net profit, return on equity (ROE), non-performing loan ratio, and job performance.

The Group accounts for performance condition share-based payments according to the cash-settled method and the fair value of the liabilities is reflected in the compensation costs by re-measuring every closing period. As of December 31, 2022 and 2021, the carrying amount of the liabilities related to the performance condition share-based payments recognized by the Group amounts to 41,334 million won and 31,597 million won, respectively, including the carrying amount of liabilities related to key management of 17,494 million Won and 13,319 million Won, respectively.

- 176 -

37.

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 years ended December 31
	2022			2021
Gains on valuation of investments in joint ventures and associates		98,858			80,268
Reversal of impairment losses of investments in joint ventures and associates		—			1,744
Losses on valuation of investments in joint ventures and associates		(11,133	)		(7,405	)
Impairment losses of investments in joint ventures and associates		(17,728	)		(12,411	)

Total		69,997			62,196

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


	For the years ended December 31
	2022			2021
Other non-operating incomes		158,778			188,129
Other non-operating expenses		(173,924	)		(160,833	)

Total		(15,146	)		27,296

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


	For the years ended December 31
	2022		2021
Rental fee income		22,798		15,056
Gains on disposal of investments in joint ventures and associates		599		70,834
Gains on disposal of premises and equipment, intangible assets and other assets		55,852		51,083
Reversal of impairment loss of premises and equipment, intangible assets and other assets		310		166
Others (*)		79,219		50,990

Total		158,778		188,129

(*)	‘Others’ for the year ended December 31, 2022 include 46,536 million Won of other special gain related to other provisions.

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


	For the years ended December 31
	2022		2021
Depreciation on investment properties		3,925		2,809
Operating expenses on investment properties		1,448		1,174
Losses on disposal of investments in joint ventures and associates		3,690		174
Losses on disposal of premises and equipment, intangible assets and other assets		3,177		3,354
Impairment losses of premises and equipment, intangible assets and other assets		260		656
Donation		50,547		39,335
Others (*)		110,877		113,331

Total		173,924		160,833

(*)

‘Others’ for the year ended December 31, 2022 include 63,354 million Won of other special loss related to embezzlement incidents and 18,458 million Won of other special loss related to other provisions. ‘Others’ for the year ended December 31, 2021 include 75,921 million Won of other special loss related to other provisions.

- 177 -

38.

INCOME TAX EXPENSE

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


	For the years ended December 31
	2022			2021
Current tax expense:
Current tax expense with respect to the current period		1,332,636			884,843
Adjustments recognized in the current period in relation to the tax expense of prior periods		(13,982	)		2,074
Income tax expense directly attributable to other equity		7,852			—

Sub-total		1,326,506			886,917

Deferred tax expense
Change in deferred tax assets (liabilities) due to temporary differences		(234,909	)		32,776
Income tax expense(income) directly attributable to equity		68,802			22,177

Others		993			—

Sub-total		(165,114	)		54,953

Income tax expense		1,161,392			941,870

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


	For the years ended December 31
	2022			2021
Net income before income tax expense		4,485,374			3,749,241
Tax calculated at statutory tax rate (*)		1,154,285			960,095
Adjustments:
Effect of income that is exempt from taxation		(73,488	)		(41,335	)
Effect of expenses that are not deductible in determining taxable income		26,793			18,933
Adjustments recognized in the current period in relation to the current tax of prior periods		(14,088	)		3,078
Others		67,890			1,099

Sub-total		7,107			(18,225	)

Income tax expense		1,161,392			941,870

Effective tax rate		25.90	%		25.10	%

(*)

The applicable income tax rate: % up to 200 million Won in tax basis, 22% over 200 million Won to 20 billion Won, 24.2% over 20 billion Won to 300 billion Won and 27.5% over 300 billion Won.

- 178 -

(3)	Changes in deferred tax assets and liabilities for the years ended December 31, 2022 and 2021, are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2022
	Beginning balance			Business combination			Recognized as income (expense)			Recognized as other comprehensive income (expense)			Ending Balance
Gain (loss) on financial assets		273,356			—			(55,410	)		155,199			373,145
Gain on valuation using the equity method of accounting		15,260			—			11,139			(5,844	)		20,555
Gain (loss) on valuation of derivatives		(149,805	)		—			159,664			758			10,617
Accrued income		(82,482	)		—			(7,848	)		—			(90,330	)
Provision for loan losses		(34,625	)		—			14,520			—			(20,105	)
Loan and receivables written off		8,244			—			(318	)		—			7,926
Loan origination costs and fees		(194,463	)		—			25,370			—			(169,093	)
Defined benefit liability		449,615			—			15,760			(95,590	)		369,785
Deposits with employee retirement insurance trust		(432,001	)		—			(18,437	)		216			(450,222	)
Provision for guarantee		7,424			—			904			—			8,328
Other provision		100,571			—			(13,342	)		—			87,229
Others (*)		(116,907	)		(1,473	)		(33,982	)		14,063			(70,335	)

Net deferred tax assets		(155,813	)		(1,473	)		165,984			68,802			77,500

(*)

Among the deferred tax assets and liabilities classified as ‘Others,’ the deferred tax asset arising from unused tax losses amounts to 3,536 million won.


	For the year ended December 31, 2021
	Beginning balance			Recognized as income (expense)			Recognized as other comprehensive income (expense)			Ending Balance
Gain (loss) on financial assets		276,495			(57,187	)		54,048			273,356
Gain on valuation using the equity method of accounting		33,597			(17,282	)		(1,055	)		15,260
Gain (loss) on valuation of derivatives		(142,352	)		(6,755	)		(698	)		(149,805	)
Accrued income		(66,228	)		(16,254	)		—			(82,482	)
Provision for loan losses		(46,495	)		11,870			—			(34,625	)
Loan and receivables written off		8,221			23			—			8,244
Loan origination costs and fees		(170,196	)		(24,267	)		—			(194,463	)
Defined benefit liability		442,007			32,890			(25,282	)		449,615
Deposits with employee retirement insurance trust		(424,906	)		(7,291	)		196			(432,001	)
Provision for guarantee		9,485			(2,061	)		—			7,424
Other provision		85,173			15,398			—			100,571
Others (*)		(118,964	)		7,089			(5,032	)		(116,907	)

Net deferred tax assets		(114,163	)		(63,827	)		22,177			(155,813	)

(*)

Among the deferred tax assets and liabilities classified as ‘Others,’ the deferred tax asset arising from unused tax losses amounts to 8,838 million won.

- 179 -

(4)	Unrealizable temporary differences are as follows (Unit: Korean Won in millions):


	December 31, 2022			December 31, 2021
Deductible temporary differences		330,376			303,067
Tax loss carry forward		49,405			63,908
Taxable temporary differences		(8,898,834	)		(8,025,672	)

Total		(8,519,053	)		(7,658,697	)

No deferred income tax asset has been recognized for the deductible temporary difference of 325,601 million Won associated with investments in subsidiaries as of December 31, 2022, because it is not probable that the temporary differences will be reversed in the foreseeable future 4,775 million won associated with others, respectively, as of December 31, 2022, due to the uncertainty that these will be realized in the future.

No deferred income tax liability has been recognized for the taxable temporary difference of 8,898,835 million won associated with investment in subsidiaries as of December 31, 2022, due to the following reasons:

- The Group is able to control the timing of the reversal of the temporary difference.

- It is probable that the temporary difference will not be reversed in the foreseeable future.

As of December 31, 2022, the expected extinctive date of tax loss carry forward that are not recognized as deferred tax assets are as follows (Unit: Korean Won in millions):


	1 year or less		1 – 2 years		2 – 3 years		More than 3 years
Tax loss carry forward		36,967		10,828		—		1,610

(5)	Details of accumulated deferred tax charged directly to other equity are as follows (Unit: Korean Won in millions):


	December 31, 2022			December 31, 2021
Gain on valuation of financial assets at FVTOCI		213,876			58,677
Gain on valuation of equity method investments		(3,766	)		2,078
Gain on foreign currency translation of foreign operations		9,938			5,689
Gain on valuation of hedge accounting of the net investment in foreign operations		9,815			—
Remeasurements of the net defined benefit liability		(20,584	)		74,790
Gain on derivatives designated as cash flow hedge		(86	)		(843	)

Total		209,193			140,391

(6)	Current tax assets and liabilities are as follows (Unit: Korean Won in millions):


	December 31, 2022		December 31, 2021
Current tax assets		53,274		22,598
Current tax liabilities		843,555		584,491

- 180 -

39.

EARNINGS PER SHARE (“EPS”)

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


	For the years ended December 31
	2022			2021
Net income attributable to common shareholders		3,141,680			2,587,936
Dividends to hybrid securities		(91,756	)		(66,250	)
Net income attributable to common shareholders		3,049,924			2,521,686
Weighted average number of common shares outstanding (Unit: million shares)		728			724
Basic EPS (Unit: Korean Won)		4,191			3,481

(2)	The weighted average number of common shares outstanding is as follows (Unit: number of shares, days):


	For the year ended December 31, 2022
	Period		Number of shares			Dates (Unit: Day)		Accumulated number of shares outstanding during period
Common shares issued at the beginning of the period		2022-01-01 ~ 2022-12-31		728,060,549			365		265,742,100,385
Treasury stocks		2022-01-01 ~ 2022-12-31		(343,991	)		365		(125,556,715	)

Sub-total (①)									265,616,543,670

Weighted average number of common shares outstanding (②=(①/365))									727,716,558


	For the year ended December 31, 2021
	Period		Number of shares			Dates (Unit: Day)		Accumulated number of shares outstanding during period
Common shares issued at the beginning of the period		2021-01-01 ~ 2021-12-31		722,267,683			365		263,627,704,295
Treasury stocks		2021-01-01 ~ 2021-12-31		(2	)		365		(730	)
Issuance of new shares (comprehensive share exchange)		2021-08-10 ~ 2021-12-31		5,792,866			144		834,172,704
Acquisition of treasury stocks		2021-08-10 ~ 2021-12-31		(343,989	)		144		(49,534,416	)

Sub-total (①)									264,412,341,853

Weighted average number of common shares outstanding (②=(①/365))									724,417,375

Diluted EPS is equal to basic EPS because there is no dilution effect for the years ended December 31, 2022 and 2021.

- 181 -

40.

CONTINGENT LIABILITIES AND COMMITMENTS

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


	December 31, 2022		December 31, 2021
Confirmed guarantees
Guarantee for loans		39,684		38,897
Acceptances		501,921		622,758
Guarantees in acceptances of imported goods		97,920		111,195
Other confirmed guarantees		6,847,713		7,215,557

Sub-total		7,487,238		7,988,407

Unconfirmed guarantees
Local letters of credit		150,075		243,072
Letters of credit		3,014,228		3,186,513
Other unconfirmed guarantees		1,144,498		778,088

Sub-total		4,308,801		4,207,673

Commercial paper purchase commitments and others		125,547		791,729

Total		11,921,586		12,987,809

(*)

Includes financial guarantees of 3,095,091 million won and 3,960,383 million won as of December 31, 2022 and 2021, respectively.

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


	December 31, 2022		December 31, 2021
Loan commitments		118,172,070		114,414,462
Other commitments (*)		7,107,828		5,652,557

(*)

As of December 31, 2022 and 2021, the amount of unsecured bills (purchase note sales) and discounts on electronic short-term bond sales (purchase) are 2,505,399 million won and 2,225,226 million won, respectively.

(3)	Litigation case

Litigation case that the key Group is a defendant in a lawsuit pending (excluding fraud lawsuits and those lawsuits that are filed only to extend the statute of limitation, etc.) are 531 cases (litigation value of 577,128 million Won) and 475 cases (litigation value of 578,505 million Won) as of December 31, 2022 and 2021 respectively, and provisions for litigations are 33,877 million Won and 24,823 million Won.

- 182 -

(4)	Other commitments

The Group decided to enter into a stock sales agreement with a major shareholder of Woori Asset Trust Co., Ltd. (formerly, Kukje Asset Trust Co., Ltd.) to acquire 44.5% of interest (58.6% of voting rights) in July 2019, and to acquire additional 21.3% of interest (28.0% of voting rights) after a certain period. As a result, the Group acquired the interest of the first sales agreement in December 2019 and will acquire the second transaction stake at the end of March 2023.

In regard to this acquisition, the Group recognized 174,780 million Won as other financial liabilities for the second sales agreement.

As of December 31, 2022, Woori Asset Trust Co., Ltd., a subsidiary, has agreed to carry out construction completion obligations for 87 constructions, which includes the construction of residential and commercial complexes in Busan (U-dong, Haeundae-gu). Land Trust responsible for Construction and Management is a trust that bears the obligation to fulfill the responsibility of the constructor and to compensate the loan financial institution for damages if the Group fails to fulfill the construction completion obligation. As of December 31, 2022, the total PF loan amount of PF loan institutions invested in the project of the Land Trust responsible for Construction and Management is 3,607,592 million Won. Although additional losses may occur in relation to the construction completion obligations, the financial statements as of December 31, 2022 do not reflect these effects since losses are unlikely and the amount cannot be estimated reliably.

Pursuant to some contracts related to asset securitization, the Group utilizes various prerequisites as triggering events causing early redemption, limiting risks that investors bear due to change in asset quality. Breach of such triggering clause leads to an early redemption of the securitized bonds.

As of December 31, 2022, Woori Asset Trust Co., Ltd, a subsidiary, is able to borrow part of its total business expense related to its 13 development trust contracts including Boutique Terrace Haeundae Hotel from trust accounts, and the maximum amount of additional loan amount (unused loan commitment) is 52,783 million Won. In relation to those projects, the Group’s trust accounts loan is not unconditional payment obligation, and it would be judged by considering all related matters such as its own account and the fund balance plan for each trust projects.

- 183 -

41.

RELATED PARTY TRANSACTIONS

Related parties of the Group as of December 31, 2022 and 2021, and assets and liabilities recognized, guarantees and commitments, major transactions with related parties and compensation to key management for the years ended December 31, 2022 and 2021 are as follows. Please refer to Note 13 for the details of joint ventures and associates.

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


Related parties		Account title	December 31, 2022			December 31, 2021
Associates	W Service Networks Co., Ltd.	Loans		120			20
		Deposits due to customers		3,298			2,832
		Accrued expenses		7			6
		Other liabilities		109			425
	Korea Credit Bureau Co., Ltd.	Loans		2			2
		Deposits due to customers		4,450			1,557
		Other liabilities		40			—
	Korea Finance Security Co., Ltd.	Loans		3,433			3,425
		Loss allowance		(46	)		(6	)
		Deposits due to customers		1,764			1,887
		Other liabilities		6			2
	LOTTE CARD Co. Ltd.	Loans		50,000			3,750
		Account receivables		16			—
		Loss allowance		(30	)		(39	)
		Other assets		—			10
		Deposits due to customers		35,986			13,482
		Other liabilities		74			91
	K BANK Co., Ltd.	Loans		3			99
		Account receivables		31			29
		Other liabilities		108,156			84,935
	Others (*1)	Loans		68,660			73,940
		Loss allowance		(34	)		(124	)
		Other assets		768			739
		Deposits due to customers		3,622			1,063
		Other liabilities		119			3

(*1)

Others include IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership, Woori Growth Partnerships New Technology Private Equity Fund, Partner One Value Up I Private Equity Fund, and etc., as of December 31, 2022 and 2021.

- 184 -

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


			For the year December 31
Related parties		Account title	2022		2021
Associates	W Service Network Co., Ltd.	Other income		—		30
		Interest expenses		14		7
		Fees expenses		543		612
		Other expenses		1,907		1,878
	Korea Credit Bureau Co., Ltd.	Interest expenses		40		4
		Fees expenses		3,730		3,503
		Other expenses		139		68
	Korea Finance Security Co., Ltd.	Interest income		141		80
		Interest expenses		3		2
		Provision of impairment losses due to credit loss		44		1
		Other expenses		52		92
	LOTTE CARD Co., Ltd.	Interest income		83		196
		Fees income		7,701		10,248
		Interest expenses		1,902		462
		Reveral of impairment losses due to credit loss		27		59
	K BANK Co., Ltd.	Fees income		698		1,952
		Fees expenses		937		636
	Others (*)	Interest income		713		679
		Fees income		7,138		5,546
		Interest expenses		10		17
		Reversal of impairment losses due to credit loss		92		2
		Provision of impairment losses due to credit loss		1		—

(*)

Others include Woori Growth Partnerships New Technology Private Equity Fund, Partner One Value Up I Private Equity Fund, and etc., as of December 31, 2022 and 2021.

- 185 -

(3)	Major loan transactions with related parties for the years ended December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


		For the year ended December 31, 2022
Related parties		Beginning balance		Loan		Collection		Others			Ending balance (*)
Associates	W Service Network Co., Ltd.		20		352		252		—			120
	Korea Credit Bureau Co., Ltd.		2		15		15		—			2
	Korea Finance Security Co., Ltd.		3,425		2,407		2,399		—			3,433
	LOTTE CARD Co., Ltd.		3,750		50,000		3,750		—			50,000
	K BANK Co., Ltd.		99		315		411		—			3
	Godo Kaisha Oceanos 1		43,033		41,467		43,033		(1,653	)		39,814
	Woori Zip 1		12,775		—		—		(956	)		11,819
	Woori Zip 2		18,132		—		—		(1,356	)		16,776
	Central Network Solutions Co., Ltd.		—		251		—		—			251

(*)

Payments that occurred for business reasons among related parties are excluded and net increase or decrease was used for limited credit loan.


		For the year ended December 31, 2021
Related parties		Beginning balance		Loan		Collection		Others			Ending balance (*)
Associates	W Service Network Co., Ltd.		21		248		249		—			20
	Korea Credit Bureau Co., Ltd.		1		11		10		—			2
	Korea Finance Security Co., Ltd.		3,440		333		348		—			3,425
	LOTTE CARD Co., Ltd.		7,500		—		3,750		—			3,750
	K BANK Co., Ltd.		104		1,769		1,774		—			99
	Godo Kaisha Oceanos 1		44,036		—		—		(1,003	)		43,033
	Woori Zip 1		—		13,121		—		(346	)		12,775
	Woori Zip 2		—		18,624		—		(492	)		18,132

(*)

Payments that occurred for business reasons among related parties are excluded and net increase or decrease was used for limited credit loan.

- 186 -

(4)	Details of changes in major deposits due to customers with related parties for the years ended December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


		For the year ended December 31, 2022
Related parties		Beginning balance		Increase		Decrease		Ending balance (*)
Associates	W Service Networks Co., Ltd		1,180		1,200		1,180		1,200
	Partner One Value Up I Private Equity Fund		329		550		779		100
	Korea Credit Bureau Co., Ltd.		—		3,000		—		3,000

(*)

Details of payment between related parties, demand deposit due to customers and etc. are excluded.


		For the year ended December 31, 2021
Related parties		Beginning balance		Increase		Decrease		Ending balance (*)
Associates	W Service Networks Co., Ltd		1,180		1,180		1,180		1,180
	Partner One Value Up I Private Equity Fund		863		637		1,171		329
	Korea Credit Bureau Co., Ltd.		1,000		—		1,000		—

(*)

Details of payment between related parties, demand deposit due to customers and etc. are excluded.

(5)	There are no major borrowing transactions with related parties for the years ended December 31, 2022 and 2021.

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


Warrantee	December 31, 2022		December 31, 2021		Warranty
Korea Finance Security Co., Ltd.		627		835	Unused loan commitment
Korea Credit Bureau Co., Ltd.		33		33	Unused loan commitment
W Service Network Co., Ltd.		60		180	Unused loan commitment
K BANK Co., Ltd.		297		201	Unused loan commitment
LOTTE CARD Co. Ltd.		450,000		500,000	Unused loan commitment
D-Custody Co., Ltd.		10		—	Unused loan commitment

As of December 31, 2022 and 2021, the recognized payment guarantee provisions are 80 million won and 93 million won, respectively, in relation to the guarantees provided to the related parties above.

- 187 -

(7)	Amount of commitments with the related parties


Warrantee	December 31, 2022		December 31, 2021		Warranty
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		4,664		4,664	Securities purchase commitment
WooriG Senior Loan General Type Private Investment Trust No.1		—		14,284	Securities purchase commitment
Woori Seoul Beltway Private Special Asset Fund No.1		37,146		39,458	Securities purchase commitment
Woori-Q Corporate Restructuring Private Equity Fund		12,555		11,109	Securities purchase commitment
Union Technology Finance Investment Association		—		2,250	Securities purchase commitment
Genesis Eco No.1 Private Equity Fund		—		195	Securities purchase commitment
Genesis Environmental Energy Company 1st Private Equity Fund		—		916	Securities purchase commitment
JC Assurance No.2 Private Equity Fund		1,351		1,351	Securities purchase commitment
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		325		425	Securities purchase commitment
WooriG Oncorp Corporate support of Major Industry General Type Private Investment Trust (Type 2)		39		669	Securities purchase commitment
BTS 2nd Private Equity Fund		6,974		—	Securities purchase commitment
STASSETS FUND III		13,500		—	Securities purchase commitment
Together Korea Government Private Securities Investment Trust No.3		990,000		—	Securities purchase commitment

(8)	Major investment and Recovery transactions

The details of major investment and recovery transactions with related parties for the year ended December 31, 2022 and 2021 are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2022
Related parties	Investment and others (*)		Recovery and others (*)
Woori High Plus Short-term High Graded ESG Bond Sec Feeder Inv Trust 1		—		21,606
Woori High Plus Bond Sec Feeder Inv Trust 3(USD)		—		1,052
Woori BANKPLUS IPO 10 FEEDER FUND 2(BALANCED BOND)		200		—
Woori Two-year Bond Securities Investment Trust 2(Bond)		—		213
Woori China Mainland Stock Securities Investment Trust H(Securities)		—		443
Woori Long-term government bond securities Investment Trust No.1		—		1,951
Woori Republic of Korea Treasury Bond Active ETF(Bond)		3,000		—
Woori K-New Opening Target Return Securities Investment Trust(Equity)		200		—
Woori 2023 Maturity Securities Investment Trust(Bond)		200		—
Woori 2024 Maturity Securities Investment Trust 1(Bond)		200		—
Woori BIG SATISFACTION SHINJONG MMF 3RD		320,000		—
Woori MULTI RETURN PRIVATE EQUITY 1		—		8,559
Woori 2024 December Maturity Securities Investment Trust 1(Bond)		200		—
Woori Two-year Bond Securities Investment Trust 3(Bond)		—		209
Woori G Oncorp Corporate support of Major Industry General Type Private Investment Trust (Type 2)		630		—

(*)

Investment and recovery transactions of associates are described in Note 13.(2)

- 188 -


	For the year ended December 31, 2021
Related parties	Investment and others (*)		Recovery and others (*)
Woori China Mainland Stock Securities Investment Trust		—		568
Woori Long-term government bond securities Investment Trust No.1		2,000		—
Woori New MMF No.3		—		20,105
Woori Multi-Return Securities Investment Trust 1		8,000		—
Woori Multi-Return Securities Investment Trust 2 (Balanced Bond)		8,000		—
Woori Short term Plus Securities Investment Trust		200		—
Woori Smart New Deal 30 Target Conversion Securities Investment trust No.3		200		—
Woori Smart Balance Securities Investment Trust (Stock)		500		—
Woori ACE Public Offering stock Alpha Securities Investment Trust (Bond Mixed)		200		—
WooriG Oncorp Corporate support of Major Industry General Type Private Investment Trust (Type 2)		831		—
WooriG Public Offering stock 10 securities Investment Trust [Bond mixed] C(F)		—		1,064
WooriG IGIS Securities Investment Trust [Bond] C(F)		—		1,306

(*)

Investment and recovery transactions of associates are described in Note 13.(2)

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


	For the years ended December 31
	2022		2021
Short-term employee salaries		21,990		20,742
Retirement benefit service costs		937		815
Share-based compensation		4,234		6,970

Total		27,161		28,527

Key management includes executives and directors of Woori Financial Group and major subsidiaries, and also includes CEO of other subsidiaries. Outstanding assets from transactions with key management amount to 3,620 million won and 3,821 million won, as of December 31, 2022 and 2021 respectively and with respect to the assets, the Group has not recognized any allowance nor related impairment loss due to credit losses. Also, liabilities from transaction with key management amount to 12,660 million won and 11,542 million won, respectively, as of December 31, 2022 and 2021.

- 189 -

42.

TRUST ACCOUNTS

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


	Total assets				Operating income
	December 31, 2022		December 31, 2021		For the years ended December 31
	December 31, 2022		December 31, 2021		2022		2021
Trust accounts		71,677,258		69,472,846		1,121,069		876,800

(2)	Receivables and payables between the Woori Bank and trust accounts are as follows (Unit: Korean Won in millions):


	December 31, 2022		December 31, 2021
Receivables:
Trust fees receivables		42,337		35,448

Payables:
Deposits due to customers		170,417		234,136
Borrowings from trust accounts		1,804,847		1,621,209

Total		1,975,264		1,855,345

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


	For the years ended December 31
	2022		2021
Revenue:
Trust fees		131,656		117,459
Termination fees		1,158		10,599

Total		132,814		128,058

Expense:
Interest expenses on deposits due to customers		619		503
Interest expenses on borrowings from trust accounts		38,583		11,391

Total		39,202		11,894

- 190 -

(4)	Principal guaranteed trusts and principal and interest guaranteed trusts are as follows;

The carrying amount of principal guaranteed trusts and principal and interest guaranteed trusts that Woori Bank provides are as follows (Unit: Korean Won in millions):


	December 31, 2022		December 31, 2021
Partial principal guaranteed trusts
Personal trust		8,230		8,932
Corporate trust		446		627
Deposit purpose		1,551		1,558

Sub-total		10,227		11,117

Principal guaranteed trusts
Old-age pension trusts		2,790		3,004
Personal pension trusts		460,839		486,203
Pension trusts		687,971		749,317
Retirement trusts		26,563		28,354
New personal pension trusts		6,792		7,282
New old-age pension trusts		950		1,076

Sub-total		1,185,905		1,275,236

Principal and interest guaranteed trusts
Development trusts		19		19
Unspecified money trusts		335		348

Sub-total		354		367

Total		1,196,486		1,286,720

The amounts that the Woori Bank must pay by the operating results of the principal guaranteed trusts or the principal and interest guaranteed trusts are as follows (Unit: Korean Won in millions):


	December 31, 2022		December 31, 2021
Liabilities for the account (subsidy for Trust account adjustment)		—		2

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43.

LEASES

(1)

Lessor

Finance lease

①

The total investment in finance lease and the present value of the minimum lease payments to be recovered are as follows: (Unit: Korean Won in millions):


	December 31, 2022
	Total investment in lease		Net investment in lease
Within one year		160,181		146,749
After one year but within two years		231,075		215,497
After two years but within three years		366,599		338,709
After three years but within four years		501,034		452,099
After four years but within five years		368,420		314,696
After five years		19		18

Total		1,627,328		1,467,768


	December 31, 2021
	Total investment in lease		Net investment in lease
Within one year		70,740		69,030
After one year but within two years		133,398		124,904
After two years but within three years		239,895		218,911
After three years but within four years		367,991		331,685
After four years but within five years		486,490		429,034
After five years		2		1

Total		1,298,516		1,173,565

②

The unrealized interest income of the finance lease is as follows. (Unit: Korean Won in millions):


	December 31, 2022		December 31, 2021
Total investment in lease		1,627,328		1,298,516
Net investment in lease		1,467,768		1,173,565
Present value of minimum lease payments		1,467,768		1,173,565
Present value of unguaranteed residual value		—		—

Unearned interest income		159,560		124,951

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Operating lease

①The

details of operating lease assets are as follows: (Unit: Korean Won in millions):


	December 31, 2022			December 31, 2021
Prepaid lease assets		3,121			4,579
Operating lease assets
Acquisition cost		3,320,275			2,299,968
Accumulated depreciation		(729,818	)		(521,660	)
Net carrying value		2,590,457			1,778,308

Total		2,593,578			1,782,887

②

The details of changes in operating lease assets as of December 31, 2022 are as follows and there is no details of changes in operating lease assets as of December 31, 2021 (Unit: Korean Won in millions):


	December 31, 2022			December 31, 2021
Beginning balance		1,778,308			1,116,175
Acquisition		1,321,251			984,093
Disposal		(138,189	)		(93,138	)
Depreciation		(388,895	)		(250,971	)
Others		17,982			22,149

Ending balance		2,590,457			1,778,308

③

The future lease payments to be received under the lease contracts are as follows (Unit: Korean Won in millions):


	December 31, 2022		December 31, 2021
Within one year		567,998		377,153
After one year but within two years		526,899		347,539
After two years but within three years		420,244		262,176
After three years but within four years		275,080		170,391
After four years but within five years		86,606		79,555

Total		1,876,827		1,236,814

④

There is no adjusted lease payments recognized as profit or loss for the years ended December 31, 2022 and 2021.

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(2)

Lessee

The future lease payments under the lease contracts are as follows (Unit: Korean Won in millions):


	December 31, 2022		December 31, 2021
Lease payments
Within one year		170,781		151,259
After one year but within five years		152,145		155,707
After five years		33,007		38,275

Total		355,933		345,241

Total cash outflows from lease are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2022		s2021
Total cash outflows from lease		192,540		180,884

Details of lease payments that are not included in the measurement of lease liabilities due to the fact that they are short-term leases or leases for which the underlying asset is of low value are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2022		2021
Lease payments for short-term leases		1,469		1,598
Lease payments for which the underlying asset is of low value		1,316		1,488

Total		2,785		3,086

Variable lease payments that were not included in the measurement of lease liabilities for the years ended December 31, 2022 were 5,470 million Won.

(3)

The Group uses a practical expedient that does not assess whether it is a lease change to the rend discount incurred directly as a result of COVID-19. Accordingly, the amount recognized in profit or loss during the reporting period is 15,880 million Won, to reflect changes in lease payments arising from the rent concession.

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44.

BUSINESS COMBINATION

The Group acquired 2,193,552,006 shares, equivalent to 82.03% of the total issued shares of PT Batavia Prosperindo Finance Tbk, an Indonesian listed company, of 2,673,995,362 shares on August 31, 2022 as the acquisition date for the purpose of entering the local financial industry in Indonesia , and changed its name to PT Woori Finance Indonesia Tbk.

1)	As of the acquisition date, the transfer price, acquisition assets, liabilities, and non-controlling interests related to the business combination are as follows (Unit: Korean Won in millions):


	Amount
Fair value of transfer price
Cash		130,424
Amount recognized as assets and liabilities
Cash and cash equivalents		5,607
Financial assets at amortized cost		95,587
Other assets		24,096
Borrowings		25,932
Other liabilities		10,150
Fair value of identifiable net assets		89,208
Non-controlling interests (*1)		16,454
Goodwill		57,670

(*1)

Represent amount of proportionate interest of the fair value of indentifiable net assets.

2)	Assuming that the acquisition date of PT Woori Finance Indonesia Tbk by the Group is the commencement date of the financial statements, the consolidated income and consolidated net income are KRW 1,856,941 million and KRW 207,495 million, respectively.

45.

EVENTS AFTER THE REPORTING PERIOD

On February 27, 2023, the Group signed a stock sale contract to acquire a 52% stake in Daol Investment Co., Ltd. and will be included into a subsidiary in March 2023.

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