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Published: 2022-03-15 15:40:09 ET

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EX-99.1 2 d272293dex991.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, 2021 AND 2020

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		13-183

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, 2021 and 2020, 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, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the year 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. In addition, the Group considered that loans subject to payment deferral or interest deferral under the government’s COVID-19 relief package posed significantly higher credit risks leading to its assessment of more likelihood of default. Such estimation on expected credit losses involved higher degree of judgment.

As described in Note 10, loans measured at amortized cost subject to individual or collective assessments amount to 338,686,220 million won, with allowances for credit losses of 1,886,710 million won as of December 31, 2021. 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 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.

Emphasis of Matter

Without modifying our opinion, we draw attention to Note 3 of the financial statements, which indicates that the outbreak of COVID-19 in 2021 may have a negative impact on the Group’s financial condition and results of operations.

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 15, 2022

This report is effective as of March 15, 2022, 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 have 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, 2021 AND 2020

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, 2021 AND 2020


	December 31, 2021			December 31, 2020

	(Korean Won in millions)
ASSETS
Cash and cash equivalents (Note 6)		7,565,818			9,990,983
Financial assets at fair value through profit or loss (“FVTPL”) (Notes 4, 7, 11, 12, 18 and 26)		13,497,234			14,762,941
Financial assets at fair value through other comprehensive income (“FVTOCI”) (Notes 4, 8, 11, 12, and 18)		39,119,789			30,028,929
Securities at amortized cost (Notes 4, 9, 11, 12 and 18)		17,086,274			17,020,839
Loans and other financial assets at amortized cost (Notes 4, 10, 11, 12, 18 and 41)		361,932,872			320,106,078
Investments in joint ventures and associates (Note 13)		1,335,167			993,291
Investment properties (Notes 14 and 18)		389,495			387,464
Premises and equipment (Notes 15 and 18)		3,174,720			3,287,198
Intangible assets (Note 16)		785,386			792,077
Assets held for sale (Note 17)		26,327			60,002
Net defined benefit asset (Note 24)		21,346			5,658
Current tax assets (Note 38)		22,598			75,655
Deferred tax assets (Note 38)		31,131			46,088
Derivative assets (Designated for hedging) (Notes 4,11,12 and 26)		106,764			174,820
Other assets (Notes 19 and 41)		2,088,950			1,348,994

Total assets		447,183,871			399,081,017


LIABILITIES
Financial liabilities at fair value through profit or loss (“FVTPL”) (Notes 4, 11, 12, 20 and 26)		4,873,458			6,813,822
Deposits due to customers (Notes 4,11,21 and 41)		317,899,871			291,477,279
Borrowings (Notes 4, 6, 11, 12 and 22)		24,755,459			20,745,466
Debentures (Notes 4, 6, 11 and 22)		44,653,864			37,479,358
Provisions (Notes 23, 40 and 41)		576,134			501,643
Net defined benefit liability (Note 24)		47,986			52,237
Current tax liabilities (Note 38)		584,491			370,718
Deferred tax liabilities (Note 38)		186,946			160,250
Derivative liabilities (Designated for hedging) (Notes 4,11,12 and 26)		27,584			64,769
Other financial liabilities (Notes 4, 6, 11, 12, 25 and 41)		24,171,030			14,215,817
Other liabilities (Notes 6, 25 and 41)		556,853			473,813

Total liabilities		418,333,676			372,355,172


EQUITY
Owners’ equity (Note 28)
Capital stock		3,640,303			3,611,338
Hybrid securities		2,294,381			1,895,366
Capital surplus		682,385			626,111
Other equity		(2,167,614	)		(2,347,472	)
Retained earnings		21,392,564			19,268,265

		25,842,019			23,053,608

Non-controlling interests		3,008,176			3,672,237

Total equity		28,850,195			26,725,845

Total liabilities and equity		447,183,871			399,081,017

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, 2021 AND 2020


	2021			2020

	(Korean Won in millions)
Interest income		9,894,749			9,523,853
Financial assets at FVTPL		45,803			48,612
Financial assets at FVTOCI		381,814			437,527
Financial assets at amortized cost		9,467,132			9,037,714
Interest expense		(2,909,028	)		(3,525,341	)

Net interest income (Notes 11, 30 and 41)		6,985,721			5,998,512

Fees and commissions income		2,171,705			1,694,016
Fees and commissions expense		(700,930	)		(679,977	)

Net fees and commissions income (Notes 11, 31 and 41)		1,470,775			1,014,039

Dividend income (Notes 11, 32 and 41)		309,211			138,543
Net gain on financial instruments at FVTPL (Notes 11, 33 and 41)		325,751			421,709
Net gain on financial assets at FVTOCI (Notes 11 and 34)		32,624			24,138
Net gain arising on financial assets at amortized cost (Note 11)		107,317			44,443
Impairment losses due to credit loss (Notes 35 and 41)		(536,838	)		(784,371	)
General and administrative expense (Notes 36 and 41)		(4,147,411	)		(3,956,181	)
Other net operating expense (Notes 11, 26, 36 and 41)		(887,401	)		(820,438	)

Operating income		3,659,749			2,080,394
Share of gain of joint ventures and associates (Note 13)		62,196			101,077
Other non-operating expense		27,296			(180,220	)

Non-operating expense (Note 37)		89,492			(79,143	)

Net income before income tax expense		3,749,241			2,001,251

Income tax expense (Note 38)		(941,870	)		(486,002	)

Net income		2,807,371			1,515,249

Net gain(loss) on valuation of equity securities at FVTOCI		34,069			47,246
Changes in capital due to equity method		(2,607	)		(2,065	)
Remeasurement gain(loss) related to defined benefit plan		65,067			9,783

Items that will not be reclassified to profit or loss:		96,529			54,964


Net gain(loss) on valuation of debt securities at FVTOCI		(184,396	)		12,114
Changes in capital due to equity method		4,133			(233	)
Net gain(loss) on foreign currency translation of foreign operations		246,808			(153,472	)
Net gain(loss) on valuation of cash flow hedge		7,107			4,420

Items that may be reclassified to profit or loss:		73,652			(137,171	)

Other comprehensive income (loss), net of tax		170,181			(82,207	)

Total comprehensive income		2,977,552			1,433,042

(Continued)

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (CONTINUED)


	2021		2020

	(Korean Won in millions)
Net income attributable to:		2,807,371		1,515,249
Net income attributable to owners		2,587,936		1,307,266
Net income attributable to non-controlling interests		219,435		207,983

Total comprehensive income attributable to:		2,977,552		1,433,042
Comprehensive income attributable to owners		2,745,764		1,233,097
Comprehensive income attributable to non-controlling interests		231,788		199,945

Earnings per share (Note 39)
Basic and diluted earnings per share (Unit: In Korean Won)		3,481		1,742

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, 2021 AND 2020


	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, 2020		3,611,338		997,544		626,295			(2,249,322	)		18,524,515			21,510,370			3,981,962			25,492,332
Total comprehensive income
Net income		—		—		—			—			1,307,266			1,307,266			207,983			1,515,249
Net gain(loss) on valuation of financial instruments at FVTOCI		—		—		—			59,417			—			59,417			(57	)		59,360
Net gain(loss) due to disposal of equity securities at FVTOCI		—		—		—			2,664			(2,664	)		—			—			—
Changes in capital due to equity method		—		—		—			(2,298	)		—			(2,298	)		—			(2,298	)
Gain on foreign currency translation of foreign operations		—		—		—			(145,376	)		—			(145,376	)		(8,096	)		(153,472	)
Gain on valuation of cash flow hedge		—		—		—			4,306			—			4,306			114			4,420
Remeasurement gain related to defined benefit plan		—		—		—			9,782			—			9,782			1			9,783
Transactions with owners
Dividends to common stocks		—		—		—			—			(505,587	)		(505,587	)		(2,071	)		(507,658	)
Issuance of hybrid securities		—		897,822		—			—			—			897,822			—			897,822
Dividends to hybrid securities		—		—		—			—			(48,915	)		(48,915	)		(162,362	)		(211,277	)
Redemption of hybrid securities		—		—		—			(31,252	)		—			(31,252	)		(555,744	)		(586,996	)
Changes in subsidiaries’ capital		—		—		(184	)		4,607			(6,350	)		(1,927	)		45,684			43,757
Changes in non-controlling interests related to business combination		—		—		—			—			—			—			164,823			164,823

December 31, 2020		3,611,338		1,895,366		626,111			(2,347,472	)		19,268,265			23,053,608			3,672,237			26,725,845

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

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, 2021 AND 2020


	2021			2020

	(Korean Won in millions)
Cash flows from operating activities:
Net income		2,807,371			1,515,249
Adjustments to net income:
Income tax expense		941,870			486,002
Interest income		(9,894,749	)		(9,523,853	)
Interest expense		2,909,028			3,525,341
Dividend income		(309,211	)		(138,543	)

		(6,353,062	)		(5,651,053	)

Additions of expenses not involving cash outflows:
Loss on valuation of financial instruments at FVTPL		16,869			44,863
Loss on financial assets at FVTOCI		15,812			787
Impairment loss due to credit loss		536,838			784,371
Loss on other provisions		85,690			232,680
Retirement benefit		177,303			174,628
Depreciation and amortization		791,896			535,548
Net loss on foreign currency translation		109,668			191,504
Loss on derivatives (designated for hedge)		93,084			82,746
Loss on fair value hedge		1,947			68,508
Loss on valuation of investments in joint ventures and associates		19,816			24,525
Loss on disposal of investments in joint ventures and associates		174			—
Loss on disposal of premises and equipment, intangible assets and other assets		3,354			2,717
Impairment loss on premises and equipment, intangible assets and other assets		656			8,763

		1,853,107			2,151,640

Deductions of income not involving cash inflows:
Gain on financial assets at FVTOCI		48,436			24,925
Gain on other provisions		1,591			2,450
Gain on derivatives (designated for hedge)		61,271			67,395
Gain on fair value hedge		106,253			9,646
Gain on valuation of investments in joint ventures and associates		82,012			125,602
Gain on disposal of investments in joint ventures and associates		70,834			3,470
Gain on disposal of premises and equipment, intangible assets and other assets		51,083			9,715
Reversal of impairment loss on premises and equipment, intangible assets and other assets		166			172
Profit from bargain purchase		—			67,427
Other income		35,717			20,600

		457,363			331,402

Changes in operating assets and liabilities:
Financial instruments at FVTPL		42,498			(875,076	)
Loans and other financial assets at amortized cost		(38,020,109	)		(22,763,192	)
Other assets		(983,680	)		(89,918	)
Deposits due to customers		23,830,469			27,378,173
Provisions		(12,278	)		(184,112	)
Net defined benefit liability		(109,778	)		(214,741	)
Other financial liabilities		9,456,310			(2,694,701	)
Other liabilities		67,802			(8,150	)

		(5,728,766	)		548,283

Interest income received		9,351,055			9,558,119
Interest expense paid		(3,016,841	)		(4,008,001	)
Dividends received		309,071			138,562
Income tax paid		(565,539	)		(315,422	)

		6,077,746			5,373,258

Net cash inflow(outflow) from operating activities		(1,800,967	)		3,605,975

(Continued)

- 11 -

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (CONTINUED)


	2021			2020

	(Korean Won in millions)
Cash flows from investing activities:
Cash in-flows from investing activities:
Disposal of financial instruments at FVTPL		10,361,751			6,605,483
Disposal of financial assets at FVTOCI		21,645,907			20,527,695
Redemption of securities at amortized cost		6,425,062			5,661,472
Disposal of investments in joint ventures and associates		195,758			410,940
Disposal of investment properties		—			353
Disposal of premises and equipment		2,890			22,828
Disposal of intangible assets		846			634
Disposal of assets held for sale		93,756			—
Net increase of other assets		66,305			26,642

		38,792,275			33,256,047

Cash out-flows from investing activities:
Net cash in-flows of business combination		—			313,058
Net cash in-flows from obtaining control		1,638			—
Acquisition of financial instruments at FVTPL		11,840,524			8,082,824
Acquisition of financial assets at FVTOCI		30,522,971			23,044,741
Acquisition of securities at amortized cost		6,435,692			2,380,448
Acquisition of investments in joint ventures and associates		400,172			550,619
Acquisition of investment properties		—			76,588
Acquisition of premises and equipment		119,255			149,341
Acquisition of intangible assets		138,882			114,854

		49,459,134			34,712,473

Net cash outflow from investing activities		(10,666,859	)		(1,456,426	)

Cash flows from financing activities:
Cash in-flows from financing activities:
Net cash in-flows from hedging activities		6,987			—
Net increase in borrowings		3,199,712			2,033,851
Issuance of debentures		32,674,966			23,082,798
Net increase of other liabilities		3,488			3,971
Issuance of hybrid securities		399,016			897,822
Paid-in capital increase on non-controlling interests		1,623			45,749
Net increase (decrease) in non-controlling equity liabilities		10,685			—

		36,296,477			26,064,191

Cash out-flows from financing activities:
Net cash out-flows from hedging activities		—			5,409
Redemption of debentures		25,781,305			22,168,962
Redemption of lease liabilities		177,593			204,794
New stock issue cost		140			—
Acquisition of treasury stocks		3,757			—
Dividends paid		368,357			505,587
Redemption of hybrid stocks		587,650			598,850
Dividends paid to hybrid securities		211,173			211,277
Dividends paid to non-controlling interest		9,391			2,071
Changes in non-controlling interests		81,410			—

		27,220,776			23,696,950

Net cash inflow from financing activities		9,075,701			2,367,241

Net increase (decrease) in cash and cash equivalents		(3,392,125	)		4,516,790
Cash and cash equivalents, beginning of the Period		9,990,983			6,392,566
Effects of exchange rate changes on cash and cash equivalents		966,960			(918,373	)

Cash and cash equivalents, end of the Period (Note 6)		7,565,818			9,990,983

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, 2021 AND 2020

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 acquired 76.8% (excluding treasury stocks, 74.0% interest including treasury stocks) interest in Woori Financial Capital Co., Ltd. (formerly Aju Capital Co., Ltd.) on December 10, 2020. In addition, as of April 15, 2021, the Parent company acquired 13.3% interests (excluding treasury stock, 12.9% when including treasury stock) in Woori Financial Capital Co., Ltd., and as of May 24, 2021, the Parent company additionally acquired treasury stock (3.6%) which Woori Financial Capital Co., Ltd. possessed.

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.

- 13 -

(2)	Details of the Parent company and subsidiaries (hereinafter ‘Group’) as of December 31, 2021 and 2020 are as follows:

Percentage of ownership
(%)

Location

Financial
statements date
of use

Subsidiaries

Main business

December 31,
2021

December 31,
2020

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

76.8

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 Asset Management Corp.

Finance

73.0

Korea

December 31

Woori Savings Bank (*7)

Mutual Savings bank

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

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

Finance

100.0

Russia

December 31

PT Bank Woori Saudara Indonesia 1906 Tbk

Finance

84.2

79.9

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 (*1)(*9)

Finance

100.0

Cambodia

December 31

Woori Bank Europe

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

Hermes STX Co., Ltd. (*5)

Asset securitization

—

0.0

Korea

—

BWL First Co., LLC (*5)

Asset securitization

—

0.0

Korea

—

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

Asset securitization

0.0

Korea

December 31

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)

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

Woori the Colony Unjung Securitization Specialty Co., Ltd. (*5)

Asset securitization

—

0.0

Korea

—

Woori Dream 1st Co., Ltd. (*5)

Asset securitization

—

0.0

Korea

—

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 Sinnonhyeon 1st Inc. (*5)

Asset securitization

—

0.0

Korea

—

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 2nd Co., Ltd. (*5)

Asset securitization

—

0.0

Korea

—

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

- 14 -

Percentage of ownership
(%)

Location

Financial
statements date
of use

Subsidiaries

Main business

December 31,
2021

December 31,
2020

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

Asset securitization

—

0.0

Korea

—

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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 Hchemical 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.

Asset securitization

0.0

—

Korea

December 31

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

Securities investment and others

100.0

Korea

December 31

Heungkuk Global Private Placement Investment Trust No. 1 (*3)(*11)

Securities investment and others

98.8

98.5

Korea

December 31

AI Partners UK Water Supply Private Placement Investment Trust No.2 (*3)(*11)

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)(*11)

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

WooriG Japan General Type Private Real Estate Feeder Investment Trust No.1-2 (*3)(*11)

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)(*11)

Securities investment and others

98.1

97.2

Korea

December 31

WooriG Japan Blind General Type Private Real Estate Feeder Investment Trust No.1 (*3)(*11)

Securities investment and others

99.8

—

Korea

December 31

JB Airline Private Placement Investment Trust No.8 (*3)(*11)

Securities investment and others

97.0

—

Korea

December 31

Kiwoom Harmony Private Placement Investment Trust No. 2 (*3)(*11)

Securities investment and others

97.1

—

Korea

December 31

- 15 -

Percentage of ownership
(%)

Location

Financial
statements date
of use

Subsidiaries

Main business

December 31,
2021

December 31,
2020

Kiwoom Harmony Private Placement Investment Trust No. 1 (*3)(*11)

Securities investment and others

96.0

—

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 (*2)

Asset securitization

0.0

Belgium

December 31

Held by Woori Card Co., Ltd.

TUTU Finance –WCI Myanmar Co., Ltd.

Finance

100.0

Myanmar

December 31

Woori Card one of 2017-2 Securitization Specialty Co., Ltd. (*5)

Asset securitization

—

0.5

Korea

—

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

Asset securitization

0.5

Korea

December 31

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

Held by Woori Financial Capital Co., Ltd.

Woori Savings Bank (*5)

Mutual Savings bank

—

100.0

Korea

—

ACE Auto Invest the 46th Securitization Specialty Co., Ltd. (*5)

Asset securitization

—

1.0

Korea

—

ACE Auto Invest the 47th Securitization Specialty Co., Ltd. (*5)

Asset securitization

—

1.0

Korea

—

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

Asset securitization

1.0

Korea

December 31

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

Asset securitization

1.0

Korea

December 31

Specified Money Market Trust (*5)

Trust

—

100.0

Korea

—

Held by Woori Investment Bank Co., Ltd.

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

Asset securitization

5.0

Korea

December 31

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).

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

—

Korea

December 31

Held by Woori Asset Management Corp.

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

Securities investment and others

93.6

99.6

Korea

December 31

Woori China Convertible Bond Master Fund (debt-oriented hybrid) (*5)(*8)

Securities investment and others

—

34.5

Korea

—

Woori Yellow Chip High Yield Strategic Allocation 1 (FOF) (*5)

Securities investment and others

—

89.8

Korea

—

- 16 -

Percentage of ownership
(%)

Location

Financial
statements date
of use

Subsidiaries

Main business

December 31,
2021

December 31,
2020

Woori Together TDF 2025 (*3)

Securities investment and others

34.1

47.6

Korea

December 31

Woori Together TDF 2030 (*3)

Securities investment and others

32.3

47.4

Korea

December 31

Woori Together TDF 2035 (*3)

Securities investment and others

56.0

47.8

Korea

December 31

Woori Together TDF 2040 (*3)

Securities investment and others

55.7

48.8

Korea

December 31

Woori Together TDF 2045 (*3)

Securities investment and others

65.2

47.7

Korea

December 31

Woori Together TDF 2050 (*3)

Securities investment and others

63.6

87.0

Korea

December 31

Woori Star50 Feeder Fund(H) (*3)

Securities investment and others

44.8

—

Korea

December 31

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

Securities investment and others

40.8

—

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)(*11)

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)(*11)

Securities investment and others

37.9

22.2

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)(*11)

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)

WooriG GP Commitment Loan General Type Private Investment Trust No.1 (*3)(*11)

Securities investment and others

100.0

50.0

Korea

December 31

WooriG Equity Bridge Loan General Type Private Investment Trust No.1 (*3)(*11)

Securities investment and others

80.0

—

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)(*11)

Securities investment and others

100.0

Korea

December 31

Woori Global Development Infrastructure Synergy Company Private Placement Investment Trust No.1 (*3)(*11)

Securities investment and others

100.0

Korea

December 31

Woori G NorthAmerica Infra Private Placement Investment Trust No. 1 (*3)(*11)

Securities investment and others

100.0

Korea

December 31

Woori G Infrastructure New Deal Specialized Investment Private Equity Investment Trust No. 1 (*3)(*11)

Securities investment and others

100.0

Korea

December 31

WooriG General Type Private Real Estate Investment Trust No.2 (*3)(*11)

Securities investment and others

30.1

Korea

December 31

WooriG ESG Infrastructure Development General Type Private Investment Trust No.1 (*3)(*11)

Securities investment and others

100.0

—

Korea

December 31

- 17 -

Percentage of ownership
(%)

Location

Financial
statements date
of use

Subsidiaries

Main business

December 31,
2021

December 31,
2020

Held by Woori bank (*6)

WooriG WooriBank Partners General Type Private Investment Trust No.1 (*3)(*11)

Securities investment and others

92.6

Korea

December 31

WooriG General Type Private Real Estate Investment Trust No.1 (*3)(*11)

Securities investment and others

80.0

Korea

December 31

WooriG Global Mid-market Secondary General Type Private Investment Trust No.1(EUR) (*3)(*11)

Securities investment and others

80.0

Korea

December 31

Woori G Woori Bank Partners Professional Type Private Investment Trust No. 2 (*3)(*11)

Securities investment and others

90.9

—

Korea

December 31

WooriG General Type Private Real Estate Investment Trust No.5 (*3)(*11)

Securities investment and others

87.0

—

Korea

December 31

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

Woori G Japan Private Placement Real Estate Feeder Investment Trust No.1-1 (*3)(*11)

Securities investment and others

63.2

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)(*11)

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)(*11)

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)(*11)

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 (*10)

(*1)	The entity was merged with WB Finance Co., Ltd., which is a second-tier subsidiary, during prior period.

(*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, 2021.

(*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 a master-feeder fund, the equity interest represent those of the masterfund held by the feeder fund.

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

(*10)

As financial statements at the end of the reporting period cannot be obtained, the most recent financial statements were used.

(*11)

In accordance with the revision of the Capital Market Act, a specialized investment-type private equity fund has been changed to a general private equity fund

- 18 -

(3)	The Group has not consolidated the following entities as of December 31, 2021 and 2020 despite having more than 50% 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 (1)(2)		Korea	Securities Investment		97.9
IGIS Global Private Placement Real Estate Fund No. 148-1 (1)(2)		Korea	Securities Investment		75.0
IGIS Global Private Placement Real Estate Fund No. 148-2 (1)(2)		Korea	Securities Investment		75.0
Mirae Asset Seoul Ring Expressway Private Special Asset Fund No. 1 (1)(2)		Korea	Securities Investment		66.7
Hangkang Sewage Treatment Plant Fund (1)(2)		Korea	Securities Investment		55.6
Korea Investment Pocheon Hwado Expressway Professional Investment Fund (1)(2)		Korea	Securities Investment		55.2
Midas Global Private Placement Real Estate Investment Trust No. 7-2 (1)(2)		Korea	Securities Investment		58.3
Together-Korea Government Private Pool Private Securities Investment Trust No.3 (1)(2)		Korea	Securities Investment		100.0
INMARK France Private Placement Investment Trust No. 18-1 (1)(2)		Korea	Securities Investment		93.8
Kiwoom Vibrato Private Placement Investment Trust 1-W(EUR) (1)(2)		Korea	Securities Investment		99.5
KOTAM Global Infrastructure Private Equity Investment Trust No. 1-4 (1)(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) (2)		Korea	Securities Investment		50.0
Kiwoom Harmony Private Placement Investment Trust No. 3 (1) (2)		Korea	Securities Investment		77.4
Consus Solar Energy Private Placement Investment Truns No.1(*1)		Korea	Securities Investment		50.0

(*1)	Since the investee is a private equity investment fund, the Group does not have the power over the fund’s activities even though it holds more than 50% of ownership interest.

(*2)	In accordance with the revision of the Capital Market Act, a hedge fund has been changed to a private equity fund.


	As of December 31, 2020
Subsidiaries	Location		Main Business	Percentage of ownership (%)
Mirae Asset Maps Clean Water Private Equity Investment Trust 7th (*)		Korea	Securities Investment		59.7
Kiwoom Yonsei Private Equity Investment Trust (*)		Korea	Securities Investment		88.9
IGIS Europe Private Placement Real Estate Fund No. 163-2 (*)		Korea	Securities Investment		97.9
IGIS Global Private Placement Real Estate Fund No. 148-1 (*)		Korea	Securities Investment		75.0
IGIS Global Private Placement Real Estate Fund No. 148-2 (*)		Korea	Securities Investment		75.0
Mirae Asset Seoul Ring Expressway Private Special Asset Fund No. 1 (*)		Korea	Securities Investment		66.7
Hangkang Sewage Treatment Plant Fund (*)		Korea	Securities Investment		55.6
Korea Investment Pocheon Hwado Expressway Professional Investment Fund (*)		Korea	Securities Investment		55.2
Midas Global Private Placement Real Estate Investment Trust No. 7-2 (*)		Korea	Securities Investment		58.3
Together-Korea Government Private Pool Private Securities Investment Trust No.3 (*)		Korea	Securities Investment		100.0
INMARK France Private Placement Investment Trust No. 18-1 (*)		Korea	Securities Investment		93.8
Kiwoom Vibrato Private Placement Investment Trust 1-W(EUR) (*)		Korea	Securities Investment		99.3

(*)	Since the investee is a private equity investment fund, the Group does not have the power over the fund’s activities even though it holds more than 50% of ownership interest.

- 19 -

(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, 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


	As of and for the year ended December 31, 2020
Subsidiaries	Assets		Liabilities		Operating revenue		Net income (loss) attributable to owners			Comprehensive income (loss) attributable to owners
Woori Bank		374,310,415		350,790,158		26,838,766		1,363,224			1,295,302
Woori Card Co., Ltd.		11,366,596		9,312,986		1,388,208		120,230			118,109
Woori Financial Capital Co., Ltd. (*)		8,880,117		8,053,840		218,945		(30,349	)		(38,293	)
Woori Investment Bank Co., Ltd.		4,332,474		3,803,594		256,079		62,937			62,275
Woori Asset Trust Co., Ltd.		185,634		56,396		79,426		35,312			35,954
Woori Asset Management Corp.		136,460		23,411		26,158		6,797			6,313
Woori Credit Information Co., Ltd.		40,860		9,830		40,010		1,879			1,600
Woori Fund Service Co., Ltd.		18,957		2,172		13,346		2,563			2,563
Woori Private Equity Asset Management Co., Ltd.		38,035		2,009		4,773		823			768
Woori Global Asset Management Co., Ltd.		37,935		9,807		10,652		(1,449	)		(1,449	)
Woori FIS Co., Ltd.		97,479		59,577		249,169		2,013			1,935
Woori Finance Research Institute Co., Ltd.		7,232		3,689		6,223		105			95

(*)	Net income (loss) attributable to owners of Woori Financial Capital for the year ended December 31, 2020 has been prepared on a cumulative basis since entity was included as the subsidiary.

- 20 -

(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, 2021 and 2020, the Group provides 2,480,131 million won and 2,547,418 million won of credit facilities, respectively, for the structured entities mentioned above. As of December 31, 2021 and 2020, the purchase commitment amounts to 2,263,387 million won and 854,231 million won, respectively.

- 21 -

(6)

The Group has entered into various agreements with structured entities such as asset securitization, structured finance, investment fund, and monetary trust. The characteristics 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 vehicles, 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 vehicles’ 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 financing’ 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.

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 valuation gain or loss on investment and dividend income as an investor and may be exposed to losses due to reduction in investment value. Investments in MMF(Money Market Funds) as of December 31, 2021 and 2020 are 853,140 million won and 427,375 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 arrangements, credit offerings. As of December 31, 2021 and 2020, the purchase commitment amount is 3,033,231 million won and 4,266,319 million won, respectively.

- 22 -


	December 31, 2021
	Asset securitization vehicle		Structured Finance		Investment Funds		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 facilities and others		220,933		1,095,502		6,325		60,550
Loss recognized on unconsolidated structured entities		183		11,872		71,309		282


	December 31, 2020
	Asset securitization vehicle		Structured Finance		Investment Funds		Real-estate trust
Total asset of the unconsolidated structured entities		3,900,254		69,010,369		44,629,638		76,772
Assets recognized in the consolidated financial statements related to the unconsolidated structured entities		648,700		4,291,535		3,350,605		22,402
Financial assets at FVTPL		374,231		167,271		2,922,716		—
Financial assets at FVTOCI		163,808		41,378		—		—
Financial assets at amortized cost		109,008		4,072,321		39,955		22,402
Investments in joint ventures and associates		—		5,958		387,902		—
Derivative assets		1,653		4,607		32		—
Liabilities recognized in the consolidated financial statements related to the unconsolidated structured entities		130		963		—		400
Other liabilities (provisions)		130		963		—		400
The maximum exposure to risks		970,628		5,366,037		3,438,924		65,722
Investment assets		648,700		4,291,535		3,350,605		22,402
Credit facilities and others		321,928		1,074,502		88,319		43,320
Loss recognized on unconsolidated structured entities		—		6,079		25,454		2,363

- 23 -

(7)	As of December 31, 2021 and 2020, 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, 2021		December 31, 2020
Woori Bank (*)		2,555,166		3,105,070
Woori Financial Capital Co., Ltd.		—		166,369
Woori Investment Bank Co., Ltd.		251,879		222,289
Woori Asset Trust Co., Ltd.		60,726		49,738
Woori Asset Management Corp		33,768		31,369
PT Bank Woori Saudara Indonesia 1906 Tbk		87,741		79,890
Wealth Development Bank		20,835		19,521

(*)

Hybrid securities issued by Woori Bank

Net income attributable to non-controlling interests


	For the years ended December 31
	2021		2020
Woori Bank (*)		144,923		162,362
Woori Financial Capital Co., Ltd.		17,949		1,466
Woori Investment Bank Co., Ltd.		33,274		25,643
Woori Asset Trust Co., Ltd.		11,366		9,732
Woori Asset Management Corp		2,341		1,699
PT Bank Woori Saudara Indonesia 1906 Tbk		8,619		6,040
Wealth Development Bank		928		1,130

(*)

Distribution of the hybrid securities issued by Woori Bank

Dividends to non-controlling interests


	For the years ended December 31
	2021		2020
Woori Bank (*)		144,923		162,362
Woori Financial Capital Co., Ltd.		4,121		—
Woori Investment Bank Co., Ltd.		3,610		—
Woori Asset Trust Co., Ltd		365		365
PT Bank Woori Saudara Indonesia 1906 Tbk		1,262		1,669

(*)

Distribution of the hybrid securities issued by Woori Bank

- 24 -

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 9, 2022, and were revised and approved on March 14, 2022, and the final approval will be made in the annual general shareholders’ meeting on March 25, 2022.

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:

①

K-IFRS 1109 ‘Financial Instruments’, K-IFRS 1039 ‘Financial Instruments: Recognition and Measurement’, K-IFRS 1107 ‘Financial Instruments: Disclosures’, K-IFRS 1104 ‘Insurance Contracts’ and K-IFRS 1116 ‘Lease’; Interest Rate Benchmark Reform-Phase 2

The amendment indicates that the effective interest rate shall be adjusted rather than the carrying amount when changing the interest rate benchmark for financial instruments measured at amortized cost. In addition, it allows hedge accounting to continue without interruption even when changes to interest rate benchmark occur in the hedging relationship. The amendment does not have a significant impact on the consolidated financial statements.

Since the Group has derivatives, loans, and issued bonds that are directly affected by interest rate benchmark reform, the Group is working on a project to convert contracts referring to former interest rate benchmark into alternative benchmarks to minimize business disruptions, mitigate operational risks, and reduce possible financial losses. In accordance with the transitional provisions, the amendments have been applied retrospectively to hedging relationships and financial instruments. The comparative financial statements have not been restated and there is no effect of the adoption of the amendments on the beginning balance of reserves.

The Group has applied ‘Interest Rate Benchmark Reform-Phase 2’, which is an amendment to K-IFRS 1109, 1039, 1107 and 1116, beginning on January 1, 2021. In accordance with the transition provisions, the amendments were applied retrospectively to the hedging relationship and financial instruments. The comparative financial statements have not been restated and there is no effect of the adoption of the amendments on the beginning balance of reserves.

- 25 -

Hedging relationship

The Phase 2 amendments address issues arising from ‘Interest Rate Benchmark Reform-Phase 1’, including when the designation and documentation of hedges should be updated and when alternative rates are permitted as hedged risk.

The Phase 1 amendments include an exceptional regulation that temporarily mitigates the application of specific hedge accounting requirements to hedging relationships directly affected by ‘Interest Rate Benchmark Reform’. Due to this mitigation, ‘Interest Rate Benchmark Reform’ typically does not stop hedge accounting until there is a change of the contract. However, hedge ineffectiveness continues to be recorded in the statement of profit or loss. It also suggests when the application of these exceptions should end, for instance, exceptional regulation should end when uncertainties due to ‘Interest Rate Benchmark Reform’ no longer appear.

For the annual period beginning on January 1, 2021, the Group has applied the following hedge accounting mitigation provisions provided in the Phase 2 amendments:

Designation of a hedging relationship: When the Phase 1 amendments cause to apply, the Group will reflect the changes required by the Interest Rate Benchmark Reform by amending the formal designation of the hedging relationship as previously documented to make one or more of these changes: will amend the designation of a hedging relationship to reflect the changes required by the Interest Rate Benchmark Reform when there is a change in one or more of the followings:

Designating the alternative benchmark rate (contractually or non-contractually specified) as a hedged risk;

Amending the description of the hedged item so it refers to the alternative benchmark rate; or

Amending the description of the hedging instrument.

The Group will amend the hedging relationship documentation to reflect these amendments by the end of the reporting period during which the changes are made. These amendments do not require the discontinuance of the hedging relationship.

Financial instruments measured at amortized cost

For financial instruments measured at amortized cost (including financial assets at FVTOCI-debt instruments), the Phase 2 amendments do not require the financial instrument to recognize gains or losses from the change because the change in the contractual cash flow basis required by the interest rate reform is reflected by adjusting the effective interest rate.

A similar practical expedient exists for lease liabilities. This practical expedient is applicable only to changes required by interest rate indicator reform. When the changes are necessary as a direct result of Interest Rate Benchmark Reform and the new criteria for determining contractual cash flows are economically equivalent to the previous one, it is considered as a required change due to Interest Rate Benchmark Reform.

If some or all of the changes in the instrument’s contractual cash flow calculation criteria do not meet the above criteria, the Group shall first apply the practical expedient to the changes made under the Interest Rate Benchmark Reform and then apply the general financial instrument requirements(In other words, the entity shall determine whether a modification or elimination is made and recognizes immediately in profit or loss any modification on financial instrument which has not been eliminated).

For lease liabilities which basis for determining contractual cash flows is changed, as a practical expedient, the lease liabilities are remeasured at a discount rate that reflects the change in interest rates due to the Interest Rate Benchmark Reform. If an additional lease change is made in addition to the lease changes required by the Interest Rate Benchmark Reform, the general requirements of K-IFRS 1116 apply to the accounting for all simultaneous lease changes, including those required by the Interest Rate Benchmark Reform.

- 26 -

The details of Woori Bank’s financial instruments that have not completed the conversion to interest rates benchmark at the end of the quarter are as follows: Non-derivative financial instrument is presented at the carrying amount, while the derivative financial instrument and commitments/financial guarantee are presented at the nominal amount.(Unit: Korean Won in millions)


	USD (*1)				EUR		GBP		JPY		CHF		BBSW
	Total amount (*2)		Interest rate substitution clause		EUR		GBP		JPY		CHF		BBSW
Non-derivative financial assets
Financial assets at FVTOCI		662,878		194,084		—		—		—		—		—
Financial assets at amortized cost		5,204,049		2,337,327		24,514		134,369		87,788		—		—

Sub-total		5,866,927		2,531,411		24,514		134,369		87,788		—		—

Non-derivative financial liabilities
Financial assets at amortized cost		657,953		574,968		—		—		—		—		—
Derivatives
Interest rate related (for trading)		26,757,719		26,327,929		—		344,854		—		1,297		—
Currency related (for trading)		35,169,303		35,169,303		—		407,264		175,422		—		—
Interest rate related (for hedging)		2,193,175		2,193,175		—		—		—		—		128,834

Sub-total		64,120,197		63,690,407		—		752,118		175,422		1,297		128,834

Commitments and financial guarantees		1,167		—		7,374		—		1,854		—		—

(*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, we are in the process of negotiating to add an interest rate alternative clause.

The KRW CD interest rate is planned to be replaced by the Korea Overnight Financing Repo Rate (KOFR) in the long term, but the policy direction to activate the replacement rate or when the CD rate calculation will be discontinued is not clear.

②

Amendments to K-IFRS 1116 Lease – COVID-19 related rent concession continuously offered after June 30, 2021

As a practical expedient, a lessee may elect not to assess whether a rent concession occurring as a direct consequence of the COVID-19 pandemic is a lease modification. The scope of the practical expedient has been expanded to reduce lease fees that affect lease payments due on or before June 30, 2022. Lessee should consistently apply practical expedients to contracts with similar characteristics in similar circumstances. Please see Note 43 for the details of the amount recognized in profit or loss during the reporting period to reflect changes in lease payments arising from the rent concession.

- 27 -

2)	The details of K-IFRSs that have been issued and published as of the date of issue approval of financial statements but have not yet reached the effective date, and which the Group has not applied at an earlier date are as follows:

①

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 Korea 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 amendments should be applied for annual periods beginning on or after January 1, 2022, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

②

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 amendments should be applied for annual periods beginning on or after January 1, 2022, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

③

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 amendments should be applied for annual periods beginning on or after January 1, 2022, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

④

Annual Improvements to K-IFRS 2018-2020

Annual improvements of K-IFRS 2018-2020 Cycle should be applied for annual periods beginning on or after January 1, 2022, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

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

K-IFRS 1109 Financial Instruments - Fees related to the 10% test for derecognition of financial liabilities

K-IFRS 1116 Leases- Lease incentives

K-IFRS 1041 Agriculture - Measuring fair value

- 28 -

⑤

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, 2023, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

⑥

Amendments to K-IFRS 1001 ‘Presentation of Financial Statements’ – Disclosure of ‘Accounting Policy’

To define and disclose material accounting policies, and to provide guidance on how to apply the concept of materiality, ‘Accounting Policy Disclosure’ of the IFRS Practice Statement 2 has been amended. 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.

⑦

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.

⑧

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.

(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;

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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.

(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

- 30 -

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.

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.

- 31 -

(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.

- 32 -

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.

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 (e.g. non-recourse feature)

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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 book value 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 book value 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 book value 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 book value retained in the books, and to the portion of book value 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 book value 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		35 to 57 years
Structures in leased office		4 to 5 years
Properties for business purpose		4 to 5 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 9,076 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 book value 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 book value 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, book value 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 book value. 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 book value 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 book value 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.

The outbreak 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, and uncertainties in recovery or deterioration are expected to continue.

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, 2021		December 31, 2020
Total loans (Loan receivables, payment guarantees) that are subject to loan deferment and interest deferment	Corporate		2,428,496		1,697,899
	Retail		167,146		122,425
	Total		2,595,642		1,820,324
Total loans changed its stage from 12-month to lifetime (Stage 2) expected credit	Corporate		2,125,492		1,548,805
	Retail		134,920		101,721
	Total		2,260,412		1,650,526
The expected credit loss allowances that are additionally recognized	Corporate		275,057		210,173
	Retail		9,657		9,058
	Total		284,714		219,231

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

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


	Increase in provision for expected credit loss
Corporate		48,583
Retail		6,237

Total		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, 2021, financial assets at amortized cost of obligors subject to loan deferment and interest deferment amount to 7,217 million won, and the cumulative expected credit loss allowance have increased for 170 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, 2021, financial assets at amortized cost of obligors subject to loan deferment and interest deferment amount to 103,974 million won and cumulative expected credit loss allowance have increased for 15,916 million won.

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(1)	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 and/or 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 book value 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.

(2)	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.

(3)	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.

(4)	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’s operating activity is exposed to various financial risks 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, risk management responsible, 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 risk management office (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

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

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

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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.

At the end of each reporting period, the Group assesses whether credit risk reflecting forward-looking information has significantly been increased since the date of initial recognition. When assessing whether credit risk has significantly been increased, the changes in the probability of default over the financial instrument’s remaining life is used instead of changes in the amount of expected credit losses.

The Bank performs the above 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 above 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

The Group sees 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:

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When principal 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.

Probability of default (PD) and Loss given default (LGD) for each category of financial asset is being calculated by considering factors such as debtor 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 by analyzing the correlation between default rates of corporate and retail exposures per year and macroeconomic indicators


Major macroeconomic indicators		Correlation between credit risk and macroeconomic indicators
GDP growth rate		Negative(-) Correlation
Personal consumption expenditures price index rate		Negative(-) Correlation
Consumer price index rate		Negative(-) Correlation

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

Disclosure of economic variable forecasts

Probability weight

As of December 31, 2021, 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		55.59		13.37		31.04

Economic forecast of each major economic variables by scenario (prospect period: 2022)

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


	Basic Scenario		Upside Scenario		Downside Scenario
GDP growth rate		3.00		3.22		2.60
Personal consumption expenditures price index rate		3.60		4.01		2.85
Consumer price index rate		2.00		2.10		1.82

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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, 2021 are as follows (Unit: Korean Won in millions):


			December 31, 2021
Corporate	GDP growth rate	Increase by 1% point		(68,140	)
		Decrease by 1% point		74,495
	Personal consumption expenditures price index 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 rate	Increase by 1% point		(29,469	)
		Decrease by 1% point		34,352


			December 31, 2020
Corporate	GDP growth rate	Increase by 1% point		(86,086	)
		Decrease by 1% point		96,177
Retail	Consumer price index rate	Increase by 1% point		(15,807	)
		Decrease by 1% point		17,119

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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The maximum exposure to credit risk as of December 31, 2021 and 2020 is as follows (Unit: Korean Won in millions):

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 book value 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.


		December 31, 2021		December 31, 2020
Loans and other financial assets at amortized cost (*1)	Korean treasury and government agencies		14,934,813		9,725,719
	Banks		24,733,020		19,493,188
	Corporates		131,027,256		114,131,996
	Consumers		191,237,783		176,755,175

	Sub-total		361,932,872		320,106,078

Financial assets at FVTPL (*2)	Deposit		65,072		48,796
	Debt securities		2,743,239		2,887,097
	Loans		667,467		676,291
	Derivative assets		4,803,131		6,901,742
	Others		1,518		—

	Sub-total		8,280,427		10,513,926

Financial assets at FVTOCI	Debt securities		38,126,977		28,948,141
Securities at amortized cost	Debt securities		17,086,274		17,020,839
Derivative assets	Derivative assets (Designated for hedging)		106,764		174,820
Off-balance accounts	Guarantees (*3)		12,987,809		11,809,456
	Loan commitments		114,414,462		112,088,680

	Sub-total		127,402,271		123,898,136

Total			552,935,585		500,661,940

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

(*2)	Puttable financial instruments are not included.

(*3)	As of December 31, 2021 and 2020, the financial guarantee amount of 3,960,383 million won and 4,163,382 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, 2021
	Korea		China		USA		UK		Japan		Others (*)		Total
Loans and other financial assets at amortized cost		338,674,446		5,620,622		3,742,331		212,821		811,030		12,871,622		361,932,872
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		519,239,825		7,524,621		7,142,157		440,740		927,940		17,660,302		552,935,585

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


	December 31, 2020
	Korea		China		USA		UK		Japan		Others (*)		Total
Loans and other financial assets at amortized cost		296,186,751		4,356,747		3,988,304		1,990,490		1,404,670		12,179,116		320,106,078
Securities at amortized cost		16,749,531		—		110,597		—		—		160,711		17,020,839
Financial assets at FVTPL		6,954,630		13,403		1,083,096		493,285		480,760		1,488,752		10,513,926
Financial assets at FVTOCI		25,966,333		608,893		1,092,636		5		5,460		1,274,814		28,948,141
Derivative assets (Designated for hedging)		—		—		165,458		3,740		—		5,622		174,820
Off-balance accounts		119,699,069		1,393,734		399,678		38,389		41,378		2,325,888		123,898,136

Total		465,556,314		6,372,777		6,839,769		2,525,909		1,932,268		17,434,903		500,661,940

(*)	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, 2021 and 2020 (Unit: Korean Won in millions):


	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		45,540,602		4,303,491		185,972,844		20,541,133		361,932,872
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		8,279,427
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		100,537,319		8,627,849		253,941,506		45,317,099		552,935,585


	December 31, 2020
	Service		Manufacturing		Finance and insurance		Construction		Individuals		Others		Total
Loans and other financial assets at amortized cost		56,627,927		35,933,953		35,450,774		3,493,000		172,116,780		16,483,644		320,106,078
Securities at amortized cost		492,172		6,691		8,926,909		302,225		—		7,292,842		17,020,839
Financial assets at FVTPL		301,296		234,712		8,520,127		32,240		14,619		1,410,932		10,513,926
Financial assets at FVTOCI		475,881		207,903		23,017,149		142,396		—		5,104,812		28,948,141
Derivative assets (Designated for hedging)		—		—		174,820		—		—		—		174,820
Off-balance accounts		18,828,656		21,460,581		12,086,935		4,060,358		62,477,117		4,984,489		123,898,136
Total		76,725,932		57,843,840		88,176,714		8,030,219		234,608,516		35,276,719		500,661,940

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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, 2021 and 2020 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, 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

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			December 31, 2020
			Loans and other financial assets at amortized cost	Financial assets at FVTPL	Financial assets at FVTOCI
Service business	Distribution business	General retail business	1,070,789	11,944	5,461
		General wholesale business	1,407,563	3,573	—
		Sub-total	2,478,352	15,517	5,461
	Accommodation business		1,525,157	9,305	5,471
	Travel business		59,858	—	—
	Art/sports, leisure service		1,467,643	17,739	—
	Food business		1,078,832	2,515	—
	Transportation business		395,873	461	8,752
	Education business		367,701	489	—
	Others		1,286,578	2,691	—
	Sub-total		8,659,994	48,717	19,684
Manufacturing	Textile		2,281,344	6,608	6,559
	Metal		1,390,290	47,903	—
	Non-metal		698,478	8,357	—
	Chemical		1,819,207	19,161	—
	Transportation		3,268,095	2,060	—
	Electronics		1,424,297	19,280	—
	Cosmetics		323,231	217	—
	Others		368,123	277	—

	Sub-total		11,573,065	103,863	6,559

	Total		20,233,059	152,580	26,243


			December 31, 2020
			Off-balance accounts	Total
Service business	Distribution business	General retail business	897,101	1,985,295
		General wholesale business	483,360	1,894,496
		Sub-total	1,380,461	3,879,791
	Accommodation business		152,059	1,691,992
	Travel business		21,350	81,208
	Art/sports, leisure service		114,388	1,599,770
	Food business		135,680	1,217,027
	Transportation business		193,578	598,664
	Education business		48,064	416,254
	Others		318,641	1,607,910
	Sub-total		2,364,221	11,092,616
Manufacturing	Textile		1,064,005	3,358,516
	Metal		1,581,887	3,020,080
	Non-metal		377,506	1,084,341
	Chemical		3,233,405	5,071,773
	Transportation		2,183,616	5,453,771
	Electronics		1,789,605	3,233,182
	Cosmetics		54,518	377,966
	Others		1,483,551	1,851,951
	Sub-total		11,768,093	23,451,580

	Total		14,132,314	34,544,196

- 64 -

< Woori Card Co., Ltd. >


	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


	December 31, 2020
	Loans and other financial assets at amortized cost		Financial assets at FVTPL		Financial assets at FVTOCI		Off-balance accounts		Total
Accommodation business		4,959		—		—		12,315		17,274
Travel business		2,175		—		—		25,367		27,542
Aviation		479		—		—		4,179		4,658
Cosmetics industry		2,462		—		—		13,376		15,838
Distribution business		8,050		—		—		44,354		52,404
Food industry		33,084		—		—		163,711		196,795
Art/sports, leisure service		6,156		—		—		51,962		58,118
Total		57,365		—		—		315,264		372,629

- 65 -


			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

- 66 -


			December 31, 2020
			Loans and other financial assets at amortized cost	Financial assets at FVTPL	Financial assets at FVTOCI
Service business	Distribution business	General retail business	8,978	—	—
		General wholesale business	57,587	—	—
		Sub-total	66,565	—	—
	Accommodation business		6,292	—	—
	Travel business		1,293	—	—
	Art/sports, leisure service		615	—	—
	Food business		21,774	—	—
	Transportation business		28,270	—	—
	Education business		1,132	—	—
	Others		365,860	27,364	—
	Sub-total		491,801	27,364	—
Manufacturing	Textile		29,415	—	—
	Metal		17,963	—	—
	Non-metal		4,780	—	—
	Chemical		2,501	—	—
	Transportation		52,514	—	—
	Electronics		12,665	—	—
	Others		5,335	—	—
	Sub-total		125,173	—	—
Total COVID-19 vulnerable business			616,974	27,364	—
Other business	Others		6,202,754	225,078	—

	Total		6,819,728	252,442	—


			December 31, 2020
			Off-balance accounts	Total
Service business	Distribution business	General retail business	—	8,978
		General wholesale business	—	57,587
		Sub-total	—	66,565
	Accommodation business		—	6,292
	Travel business		—	1,293
	Art/sports, leisure service		—	615
	Food business		—	21,774
	Transportation business		—	28,270
	Education business		—	1,132
	Others		38,681	431,905
	Sub-total		38,681	557,846
Manufacturing	Textile		—	29,415
	Metal		3,365	21,328
	Non-metal		—	4,780
	Chemical		—	2,501
	Transportation		—	52,514
	Electronics		—	12,665
	Others		—	5,335
	Sub-total		3,365	128,538
Total COVID-19 vulnerable business			42,046	686,384
Other business	Others		333,766	6,761,598

	Total		375,812	7,447,982

- 67 -

< Woori Investment Bank Co., Ltd. >


	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


	December 31, 2020
	Loans and other financial assets at amortized cost		Financial assets at FVTPL		Financial assets at FVTOCI		Off-balance accounts		Total
Accommodation business		44,900		—		—		—		44,900
Distribution business		15,716		20,000		—		—		35,716
Art/sports, leisure service		28,000		—		—		—		28,000
Total		88,616		20,000		—		—		108,616

- 68 -

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, 2021 and 2020 is as follows (Unit: Korean Won in millions):


	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		316,364,525		22,734,430		13,270,491		10,190,307		1,332,644		363,892,397		(1,959,525	)		361,932,872
Korean treasury and government agencies		14,938,718		9		9		—		—		14,938,736		(3,923	)		14,934,813
Banks		24,186,246		492,447		46,373		—		23,509		24,748,575		(15,555	)		24,733,020
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		371,373,956		22,943,485		13,270,491		10,190,307		1,332,644		419,110,883		(1,976,906	)		417,146,123


	December 31, 2021
	Collateral value
	Stage 1		Stage 2		Stage 3		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.

- 69 -


	December 31, 2020
	Stage 1				Stage 2				Stage 3		Total		Loss allowance			Total, net
	Above appropriate credit rating (*1)		Less than a limited credit rating (*3)		Above appropriate credit rating (*2)		Less than a limited credit rating (*3)		Stage 3		Total		Loss allowance			Total, net
Loans and other financial assets at amortized cost		278,729,012		21,249,885		10,356,251		10,143,839		1,623,276		322,102,263		(1,996,185	)		320,106,078
Korean treasury and government agencies		9,674,891		1,063		52,279		—		—		9,728,233		(2,514	)		9,725,719
Banks		19,301,570		105,890		75,876		—		25,598		19,508,934		(15,745	)		19,493,189
Corporates		93,889,922		14,873,376		1,890,564		3,860,389		839,234		115,353,485		(1,221,491	)		114,131,994
General business		61,082,336		9,013,955		1,349,053		2,585,868		576,078		74,607,290		(869,744	)		73,737,546
Small- and medium-sized enterprise		27,504,992		5,415,312		538,909		1,207,706		227,003		34,893,922		(304,077	)		34,589,845
Project financing and others		5,302,594		444,109		2,602		66,815		36,153		5,852,273		(47,670	)		5,804,603
Consumers		155,862,629		6,269,556		8,337,532		6,283,450		758,444		177,511,611		(756,435	)		176,755,176
Securities at amortized cost		17,025,405		—		—		—		—		17,025,405		(4,566	)		17,020,839
Financial assets at FVTOCI (*3)		28,789,281		158,860		—		—		—		28,948,141		(9,631	)		28,948,141

Total		324,543,698		21,408,745		10,356,251		10,143,839		1,623,276		368,075,809		(2,010,382	)		366,075,058


	December 31, 2020
	Collateral value
	Stage 1		Stage 2		Stage 3		Total
Loans and other financial assets at amortized cost		187,731,443		15,677,871		696,709		204,106,023
Korean treasury and government agencies		19,280		—		—		19,280
Banks		1,003,971		—		—		1,003,971
Corporates		62,817,305		3,963,101		400,340		67,180,746
General business		35,578,470		2,670,480		271,815		38,520,765
Small- and medium-sized enterprise		25,404,002		1,290,941		118,265		26,813,208
Project financing and others		1,834,833		1,680		10,260		1,846,773
Consumers		123,890,887		11,714,770		296,369		135,902,026
Securities at amortized cost		—		—		—		—
Financial assets at FVTOCI (*3)		—		—		—		—

Total		187,731,443		15,677,871		696,709		204,106,023

(*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.

Guarantees and commitments

The credit quality of the guarantees and loan commitments as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	December 31, 2021
Financial assets	Stage 1				Stage 2				Stage 3		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)		Stage 3		Total
Off-balance accounts:
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.

- 70 -


	December 31, 2020
Financial assets	Stage 1				Stage 2				Stage 3		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)		Stage 3		Total
Off-balance accounts:
Guarantees		10,152,900		1,382,592		11,504		191,962		70,498		11,809,456
Loan Commitments		105,108,967		4,045,595		1,951,649		977,185		5,284		112,088,680

Total		115,261,867		5,428,187		1,963,153		1,169,147		75,782		123,898,136

(*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, 2021 and 2020, 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, 2021 and 2020 are 145,594 million won and 265,760 million won, respectively, with net losses recognized along with the changes 11,734 million won and 12,786 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. Notwithstanding the write-off, the Group may still exercise its right of collection after the asset has been written off in accordance with its collection policies.

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, 2021 and 2020 are 10,107,413 million won and 9,986,186 million won. In addition, the contractual non-recoverable amount of financial assets amortized for the year ended December 31, 2021, but still in the process of recovery is 355,039 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 and measuring its level, and evaluating the appropriateness of the level of accepted market risks.

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.

- 71 -

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 the required capital 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, 2021 and 2020, and the VaR of the Bank as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	December 31, 2021			For the year ended December 31, 2021									December 31, 2020			For the year ended December 31, 2020
Risk factor	December 31, 2021			Average			Maximum			Minimum			December 31, 2020			Average			Maximum			Minimum
Interest rate		4,177			4,681			14,017			2,405			6,815			7,959			15,065			2,427
Stock price		2,972			3,637			6,676			1,609			2,283			5,783			14,394			1,982
Foreign currencies		5,904			6,745			13,144			4,747			11,160			8,814			11,233			4,613
Diversification		(6,072	)		(7,300	)		(20,006	)		(3,627	)		(11,087	)		(11,175	)		(18,796	)		(3,452	)

Total VaR(*)		6,981			7,763			13,831			5,134			9,171			11,381			21,896			5,570

(*)

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

Non-trading activities

The Bank manages and measures 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) introduced at the end of 2019.

rNII represents a change in net interest income that may occur over a certain period (e.g. one year) due to changes in net interest income, 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 others.

- 72 -

For assets and liabilities as of December 31, 2021 and 2020 that include bank, consolidated trusts and subsidiaries of the bank, details of rEVE and rNII calculated based on interest rate risk in banking book (IRRBB) are as follows (Unit: Korean Won in millions):


	December 31, 2021				December 31, 2020 (*3)
	rEVE (*1)		rNII (*2)		rEVE (*1)		rNII (*2)
Woori Bank		920,290		195,186		634,596		66,138
Woori Card Co., Ltd.		126,576		59,114		—		—
Woori Financial Capital Co., Ltd.		58,794		1,384		—		—
Woori Investment Bank Co., Ltd.		17,607		5,556		—		—
Woori Asset Trust Co., Ltd.		820		1,709		—		—
Woori Asset Management Corp.		1,411		504		—		—
Woori Savings Bank		15,175		949		—		—
Woori Private Equity Asset Management Co., Ltd.		32		59		—		—
Woori Global Asset Management Co., Ltd.		246		143		—		—

(*1)

rEVE: change in Economic Value of Equity

(*2)

rNII: change in Net Interest Income

(*3)

As of December 31, 2020, for the remaining subsidiaries except the bank, consolidated trusts, and consolidated subsidiaries of the bank, EVE and NII were not calculated.

For the remaining subsidiaries except the bank, consolidated trusts, and consolidated subsidiaries of the bank as of December 31, 2020, the interest rate EaR and VaR calculated based on the BIS Framework are as follows (Unit: Korean Won in millions):


	December 31, 2020
	EaR (*1)		VaR (*2)
Woori Card Co., Ltd.		106,645		157,085
Woori Financial Capital Co., Ltd.		3,701		12,550
Woori Investment Bank Co., Ltd.		1,479		5,005
Woori Asset Trust Co., Ltd.		3,211		398
Woori Asset Management Corp.		64		493
Woori Private Equity Asset Management Co., Ltd.		193		37
Woori Global Asset Management Co., Ltd.		119		318

(*1)

EaR (Earning at Risk): Change of maximum expected income and expense

(*2)

VaR (Value at Risk): Maximum expected losses

- 73 -

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


	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


	December 31, 2020
	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		177,214,415		54,035,826		12,410,513		11,140,520		64,799,854		5,170,572		324,771,700
Financial assets at FVTPL		609,542		263,510		91,791		94,879		150,148		13,239		1,223,109
Financial assets at FVTOCI		4,344,718		3,339,086		3,751,882		2,915,238		14,648,033		473,124		29,472,081
Securities at amortized cost		1,372,094		1,471,309		933,715		1,869,352		11,080,632		1,018,002		17,745,104

Total		183,540,769		59,109,731		17,187,901		16,019,989		90,678,667		6,674,937		373,211,994

Liability:
Deposits due to customers		127,557,303		46,471,099		35,455,403		29,354,652		52,395,811		50,655		291,284,923
Borrowings		11,223,338		2,832,846		1,126,728		949,892		3,828,384		452,495		20,413,683
Debentures		3,246,233		3,396,427		3,929,346		3,495,915		21,899,788		3,257,026		39,224,735

Total		142,026,874		52,700,372		40,511,477		33,800,459		78,123,983		3,760,176		350,923,341

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, 2021 and 2020 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, 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		3,765,460		15,834		163,131		1,236		230,188		94		125,513		826,870		5,111,162
	Loans and other financial assets at amortized cost		28,771		34,108,109		164,976		1,679,982		23,733		4,420,551		2,329		3,126,363		5,749,685		49,084,690
	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


		December 31, 2020
		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		5,584		6,074,879		22,832		240,710		4,580		764,686		115		154,154		501,900		7,736,329
	Loans and other financial assets at amortized cost		21,687		23,595,957		172,782		1,821,554		24,230		4,045,435		2,001		2,678,382		4,857,438		36,998,766
	Financial assets at FVTPL		280		304,146		18,855		198,781		73		11,989		248		332,182		88,745		935,843
	Financial assets at FVTOCI		2,741		2,981,832		—		—		2,601		434,258		37		49,789		565,893		4,031,772
	Securities at amortized cost		319		347,570		—		—		—		—		34		45,197		115,534		508,301

	Total		30,611		33,304,384		214,469		2,261,045		31,484		5,256,368		2,435		3,259,704		6,129,510		50,211,011

Liability	Financial liabilities at FVTPL		426		463,678		14,493		152,792		—		—		158		211,525		115,429		943,424
	Deposits due to customers		16,664		18,130,448		220,153		2,320,983		26,733		4,463,300		1,532		2,050,400		3,443,631		30,408,762
	Borrowings		5,657		6,154,464		48,446		510,750		—		—		590		789,955		697,234		8,152,403
	Debentures		3,973		4,322,800		—		—		—		—		—		—		444,711		4,767,511
	Other financial liabilities		2,381		2,590,147		6,705		70,690		1,853		309,319		64		85,553		193,128		3,248,837

	Total		29,101		31,661,537		289,797		3,055,215		28,586		4,772,619		2,344		3,137,433		4,894,133		47,520,937

Off-balance accounts			7,441		8,095,297		24,992		263,478		3,007		502,106		533		712,846		556,988		10,130,715

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

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

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, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	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


	December 31, 2020
	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		64,183		135,232		42,418		112,102		—		—		353,935
Deposits due to customers		191,660,253		34,349,298		25,213,410		31,144,452		9,230,904		1,793,143		293,391,460
Borrowings		10,159,819		2,524,572		1,714,490		1,866,810		4,177,634		463,376		20,906,701
Debentures		3,246,233		3,396,427		3,929,346		3,495,915		21,899,788		3,257,228		39,224,937
Lease liabilities		53,429		44,551		40,809		34,761		201,113		34,780		409,443
Other financial liabilities		8,121,978		70,277		10,294		10,897		451,096		2,142,772		10,807,314

Total		213,305,895		40,520,357		30,950,767		36,664,937		35,960,535		7,691,299		365,093,790

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Cash flows of principals and interests by expected maturities of non-derivative financial liabilities as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	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


	December 31, 2020
	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		68,909		131,496		41,428		112,102		—		—		353,935
Deposits due to customers		199,931,480		35,912,096		23,924,403		25,477,917		7,582,278		105,413		292,933,587
Borrowings		10,159,819		2,524,572		1,714,490		1,866,810		4,177,634		463,376		20,906,701
Debentures		3,246,233		3,396,427		3,929,346		3,495,915		21,899,788		3,257,228		39,224,937
Lease liabilities		53,429		44,894		40,949		35,074		208,125		36,950		419,421
Other financial liabilities		8,121,978		70,277		10,294		10,897		451,096		2,142,772		10,807,314

Total		221,581,848		42,079,762		29,660,910		30,998,715		34,318,921		6,005,739		364,645,895

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, 2021 and 2020 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, 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
December 31, 2020	Cash flow risk hedge		2,655			6,004			515			239			55,744			—			65,157
	Fair value risk hedge		255			(302	)		233			(287	)		126			—			25
	Trading purpose		6,460,472			—			—			—			—			—			6,460,472

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Maturity analysis of off-balance accounts (Guarantees and loan commitments)

A financial guarantee represents an irrevocable undertaking that the Group should meet a customer’s obligations to third parties if the customer fails to do so. The loan commitment represents the limit if the Group has promised a credit to the customer. Commitments to lend include commercial standby facilities and credit lines, liquidity facilities to commercial paper conduits and utilized overdraft facilities. The maximum limit to be paid by the Group in accordance with guarantees and loan commitment only applies to principal amounts. There are contractual maturities for financial guarantees, such as guarantees for debentures issued or loans, unused loan commitments, and other guarantees, 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 are as follows (Unit: Korean Won in millions):


	December 31, 2021		December 31, 2020
Guarantees		12,987,809		11,809,456
Loan commitments		114,414,462		112,088,680
Other commitments		3,427,331		4,933,086

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(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 method. 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 published by Basel III Committee on Banking Supervision in Bank for International Settlement in 2010 and was implemented in Korea in December 2013. The capital adequacy ratio is calculated by dividing own capital by asset (weighted with a risk premium – risk weighted assets) based on the consolidated financial statements of the Group.

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

Details of the Group’s capital adequacy ratio as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


Details(*)	December 31, 2021			December 31, 2020
Tier 1 capital		21,994,047			19,828,094
Other Tier 1 capital		3,590,212			3,533,648
Tier 2 capital		3,395,989			4,086,035

Total risk-adjusted capital		28,980,248			27,447,777

Risk-weighted assets for credit risk		171,199,840			178,114,590
Risk-weighted assets for market risk		6,388,428			6,086,905
Risk-weighted assets for operational risk		14,914,801			14,067,185

Total risk-weighted assets		192,503,069			198,268,680

Common Equity Tier 1 ratio		11.43	%		10.00	%

Tier 1 capital ratio		13.29	%		11.78	%

Total capital ratio		15.05	%		13.84	%

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

- 79 -

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 Woori Bank subsidiaries’ customers

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 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,

- 80 -

(2)	The composition of each organization’s sectors for the years ended December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2021
	Banking (*1)			Credit card			Capital			Investment banking			Others (*2)			Sub-total			Adjustments (*3)			Total
Net interest income		5,158,078			606,506			315,600			108,321			29,515			6,218,020			767,701			6,985,721
Non-interest income(expense)		1,661,903			63,839			95,297			49,419			1,111,422			2,981,880			(1,623,603	)		1,358,277
Impairment losses due to credit loss		(140,574	)		(164,097	)		(122,089	)		(1,885	)		(19,601	)		(448,246	)		(88,592	)		(536,838	)
General and administrative expense		(3,606,715	)		(225,175	)		(99,048	)		(51,490	)		(440,601	)		(4,423,029	)		275,618			(4,147,411	)

Net operating income(expense)		3,072,692			281,073			189,760			104,365			680,735			4,328,625			(668,876	)		3,659,749

Share of gain of associates		60,049			—			1,000			750			4,390			66,189			(3,993	)		62,196
Other non-operating expense		42,542			(7,936	)		(16,943	)		(660	)		(1,071	)		15,932			11,364			27,296

Non-operating income(expense)		102,591			(7,936	)		(15,943	)		90			3,319			82,121			7,371			89,492

Net income(expense) before tax		3,175,283			273,137			173,817			104,455			684,054			4,410,746			(661,505	)		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			(666,219	)		2,807,371

Total assets		415,976,627			14,116,832			10,259,868			5,159,742			25,627,649			471,140,718			(23,956,847	)		447,183,871
Investment in associate		858,706			—			12,403			8,846			22,165,895			23,045,850			(21,710,683	)		1,335,167
Other assets		415,117,921			14,116,832			10,247,465			5,150,896			3,461,754			448,094,868			(2,246,164	)		445,848,704
Total liabilities		391,315,108			11,858,065			9,073,104			4,559,856			3,284,269			420,090,402			(1,756,726	)		418,333,676

(*1)

The banking sector includes banks and their consolidated subsidiaries (such as overseas subsidiaries)

(*2)

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

(*3)

Adjustments were made for the presentation of profit or loss in accordance with the Accounting Standards from the reporting segments in accordance with the Managerial Accounting Standards.

- 81 -


	For the year ended December 31, 2020
	Banking (*1)			Credit card			Investment banking			Others (*2)			Sub-total			Adjustments (*3)			Total
Net Interest income(expense)		4,545,155			564,461			78,302			69,188			5,257,106			741,406			5,998,512
Non-interest income(expense)		1,423,286			3,648			34,497			1,071,852			2,533,283			(1,710,849	)		822,434
Impairment losses due to credit loss		(512,008	)		(195,816	)		(4,146	)		(43,660	)		(755,630	)		(28,741	)		(784,371	)
General and administrative expense		(3,545,186	)		(207,301	)		(39,039	)		(416,595	)		(4,208,121	)		251,940			(3,956,181	)

Net operating income(expense)		1,911,247			164,992			69,614			680,785			2,826,638			(746,244	)		2,080,394

Share of gain of associates		(6,895	)		—			170			1,255			(5,470	)		106,547			101,077
Other non-operating expense		(50,132	)		(5,569	)		(945	)		(484	)		(57,130	)		(123,090	)		(180,220	)

Non-operating income(expense)		(57,027	)		(5,569	)		(775	)		771			(62,600	)		(16,543	)		(79,143	)

Net income(expense) before tax		1,854,220			159,423			68,839			681,556			2,764,038			(762,787	)		2,001,251
Tax income(expense)		(437,288	)		(39,193	)		(5,902	)		(29,372	)		(511,755	)		25,753			(486,002	)

Net income(loss)		1,416,932			120,230			62,937			652,184			2,252,283			(737,034	)		1,515,249

Total assets		374,120,064			11,366,596			4,332,474			31,872,690			421,691,824			(22,610,807	)		399,081,017
Investment in associate		3,382,650			—			2,494			21,586,506			24,971,650			(23,978,359	)		993,291
Other assets		370,737,414			11,366,596			4,329,980			10,286,184			396,720,174			1,367,552			398,087,726
Total liabilities		348,706,682			9,312,986			3,803,594			9,606,742			371,430,004			925,168			372,355,172

(*1)

The banking sector includes banks and overseas subsidiaries.

(*2)

Other segments include gains and losses from Woori Financial Group Inc., Woori Financial Capital Co., Ltd.( Profit or loss for 3 months after incorporation into subsidiary), Woori Asset Trust Co., Ltd., Woori Asset Management Corp., Woori Credit Information Co., Ltd., Woori Fund Service Inc., Woori Private Equity Asset Management Co., Ltd., Woori Global Asset Management Co., Ltd., Woori FIS Co., Ltd. and Woori Finance Research Co., Ltd..

(*3)

Adjustments were made for the presentation of profit or loss in accordance with the Accounting Standards from the reporting segments in accordance with the Managerial Accounting Standards.

- 82 -

(3)	Operating profit or loss from external customers for the years ended December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	For the years ended December 31
Details	2021		2020
Domestic		3,288,341		1,869,516
Foreign		371,408		210,878

Total		3,659,749		2,080,394

(4)	Major non-current assets as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


Details (*)	December 31, 2021 (*)		December 31, 2020 (*)
Domestic		5,201,838		5,026,161
Foreign		482,930		433,869

Total		5,684,768		5,460,030

(*)

Major non-current assets included joint ventures and related business investments, investment properties, property, plant and 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, 2021 and 2020.

- 83 -

6.	STATEMENTS OF CASH FLOWS

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


	December 31, 2021		December 31, 2020
Cash		1,742,449		1,611,282
Foreign currencies		503,205		514,565
Demand deposits		5,161,529		7,314,353
Fixed deposits		158,635		550,783

Total		7,565,818		9,990,983

(2)	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
	2021			2020
Changes in other comprehensive income related to valuation of financial assets at FVTOCI		(150,327	)		59,360
Changes in other comprehensive income related to valuation of assets of associate		1,526			(2,298	)
Changes in other comprehensive income related to valuation profit or loss on cash flow hedge		7,107			4,420
Changes in financial assets measure at FVTOCI due to debt-for-equity swap		79			3,575
Changes in the investment assets of associates due to the transfer of assets held-for-sale		(52	)		(50,411	)
Changes in financial assets at FVTPL and assets held-for-sale		—			(2,385	)
Transfer from property, plant and equipment to assets held for sale		(12,852	)		—
Transfer of investment properties and premises and equipment		6,095			30,431
Changes in account payables related to intangible assets		(11,640	)		(11,639	)
Changes in right-of-use assets and lease liabilities		150,644			222,587
Comprehensive stock exchange		64,301			—
Changes in other comprehensive income related to foreign operation translation		246,808			(153,472	)

(3)	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, 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.

- 84 -


	For the year ended December 31, 2020
	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		Business Combination		Others(*)			Ending balance
Borrowings		18,998,920		2,033,851			(586,215	)		—		298,854		56			20,745,466
Debentures		30,858,055		913,836			(290,041	)		58,861		5,980,746		(42,099	)		37,479,358
Lease liabilities		419,045		(204,794	)		(5,141	)		—		3,751		194,570			407,431

Other liabilities		23,909		3,971			—			—		—		(1,526	)		26,354

Total		50,299,929		2,746,864			(881,397	)		58,861		6,283,351		151,001			58,658,609

(*)	The change in lease liabilities due to the new contract includes 231,325 million won.

7.	FINANCIAL ASSETS AT FVTPL

(1)	Details of financial assets at FVTPL as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	December 31, 2021		December 31, 2020
Financial assets at fair value through profit or loss measured at fair value		13,497,234		14,762,941

(2)	Financial assets at fair value through profit or loss measured at fair value as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	December 31, 2021		December 31, 2020
Deposits:
Gold banking asset		65,072		48,796
Securities:
Debt securities
Korean treasury and government agencies		995,713		1,020,418
Financial institutions		925,474		873,031
Corporates		751,636		761,681
Others		70,416		231,967
Equity securities		329,864		485,793
Capital contributions		1,287,723		865,685
Beneficiary certificates		3,504,547		2,812,558
Others		94,673		84,979

Sub-total		7,960,046		7,136,112
Loans		667,467		676,291
Derivatives assets		4,803,131		6,901,742
Other financial assets		1,518		—

Total		13,497,234		14,762,941

The Group does not have financial assets at fair value through profit or loss designated as upon initial recognition as of December 31, 2021 and 2020.

- 85 -

8.	FINANCIAL ASSETS AT FVTOCI

(1)	Details of financial assets at FVTOCI as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	December 31, 2021		December 31, 2020
Debt securities:
Korean treasury and government agencies		4,728,085		2,922,671
Financial institutions		22,909,615		17,996,660
Corporates		5,091,035		3,896,744
Bond denominated in foreign currencies		5,299,707		4,031,721
Securities loaned		98,535		100,345

Sub-total		38,126,977		28,948,141

Equity securities		992,812		1,080,788

Total		39,119,789		30,028,929

(2)	Details of equity securities designated as financial assets at FVTOCI as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


Purpose of acquisition	December 31, 2021		December 31, 2020		Remarks
Investment for strategic business partnership purpose		796,835		778,657
Debt-equity swap		195,971		302,090
Others		6		41	Insurance for mutual aid association, etc.

Total		992,812		1,080,788

(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, 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.


	For the year ended December 31, 2020
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(8,569	)		—		—		(8,569	)
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Net provision of loss allowance		(1,529	)		—		—		(1,529	)
Disposal		764			—		—		764
Others (*)		(297	)		—		—		(297	)

Ending balance		(9,631	)		—		—		(9,631	)

(*)

Others consist of foreign currencies translation, etc.

- 86 -

Gross carrying amount


	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.


	For the year ended December 31, 2020
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		26,795,161			—		—		26,795,161
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Acquisition		22,970,010			—		—		22,970,010
Disposal / Recovery		(20,530,076	)		—		—		(20,530,076	)
Gain (loss) on valuation		17,957			—		—		17,957
Amortization based on effective interest method		(12,545	)		—		—		(12,545	)
Others (*)		(292,366	)		—		—		(292,366	)

Ending balance		28,948,141			—		—		28,948,141

(*)

Others consist of foreign currencies translation, etc.

(4)

During the years ended December 31, 2021 and 2020, 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 138,511 million won and 2,848 million won, respectively and cumulative losses at disposal dates were 3,062 million won and 3,665 million won, respectively.

- 87 -

9.	SECURITIES AT AMORTIZED COST

(1)	Details of securities at amortized cost as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	December 31, 2021			December 31, 2020
Korean treasury and government agencies		8,882,500			6,947,495
Financial institutions		1,835,947			4,843,534
Corporates		5,818,646			4,726,075
Bond denominated in foreign currencies		554,416			508,301
Allowance for credit losses		(5,235	)		(4,566	)

Total		17,086,274			17,020,839

(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, 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.


	For the year ended December 31, 2020
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(5,511	)		—		—		(5,511	)
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Net reversal of loss allowance		934			—		—		934
Others (*)		11			—		—		11

Ending balance		(4,566	)		—		—		(4,566	)

(*)

Changes due to foreign currencies translation, etc.

- 88 -

Gross carrying amount


	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.


	For the year ended December 31, 2020
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		20,326,050			—		—		20,326,050
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Acquisition		2,380,448			—		—		2,380,448
Disposal / Recovery		(5,659,365	)		—		—		(5,659,365	)
Amortization based on effective interest method		(396	)		—		—		(396	)
Others (*)		(21,332	)		—		—		(21,332	)

Ending balance		17,025,405			—		—		17,025,405

(*)

Changes due to foreign currencies translation, etc.

- 89 -

10.

LOANS AND OTHER FINANCIAL ASSETS AT AMORTIZED COST

(1)	Details of loans and other financial assets at amortized cost as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	December 31, 2021		December 31, 2020
Due from banks		15,914,139		9,863,160
Loans		336,799,510		302,794,182
Other financial assets		9,219,223		7,448,736

Total		361,932,872		320,106,078

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


	December 31, 2021			December 31, 2020
Due from banks in local currency:
Due from The Bank of Korea (“BOK”)		10,219,055			6,519,226
Due from depository banks		159,264			84,195
Due from non-depository institutions		14,146			266
Due from the Korea Exchange		54			227
Others		191,501			172,914
Loss allowance		(2,452	)		(1,576	)

Sub-total		10,581,568			6,775,252

Due from banks in foreign currencies:
Due from banks on demand		3,615,983			1,608,126
Due from banks on time		205,351			296,489
Others		1,514,819			1,186,083
Loss allowance		(3,582	)		(2,790	)

Sub-total		5,332,571			3,087,908

Total		15,914,139			9,863,160

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


	Counterparty	December 31, 2021		Reason of restriction
Due from banks in local currency:
Due from BOK	The BOK		10,219,055	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			10,295,006

Due from banks in foreign currencies:
Due from banks on demand	The BOK and others		3,549,695	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		1,509,471	Overseas futures and options trade deposits and others

Sub-total			5,059,403

Total			15,354,409

- 90 -


	Counterparty	December 31, 2020		Reason of restriction
Due from banks in local currency:
Due from BOK	The BOK		6,519,226	Reserve deposits under the BOK Act
Due from KSFC	KB Securities Co. Ltd.		227	Futures trading margin
Others	Korea Federation of Savings Banks and others		89,562	Guarantees, mortgage of domestic exchange transactions and others

Sub-total			6,609,015

Due from banks in foreign currencies:
Due from banks on demand	The BOK and others		1,544,492	Reserve deposits under the BOK Act and others
Foreign currency deposits on time	National Bank Cambodia		54	Reserve deposits and others
Others	Korea Investment & Securities and others		1,180,570	Overseas futures and options trade deposits and others

Sub-total			2,725,116

Total			9,334,131

(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, 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.


	For the year ended December 31, 2020
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(4,860	)		—		—		(4,860	)
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Reversal for allowance for credit loss		315			—		—		315
Others (*)		179			—		—		179

Ending balance		(4,366	)		—		—		(4,366	)

(*)

Changes due to foreign currencies translation, etc.

- 91 -

Gross carrying amount


	For the year ended December 31, 2021
	Stage 1		Stage 2		Stage 3		Total
Beginning balance		9,867,526		—		—		9,867,526
Transfer to 12-month expected credit losses		—		—		—		—
Transfer to lifetime expected credit losses		—		—		—		—
Transfer to credit-impaired financial assets		—		—		—		—
Net decrease		5,977,989		—		—		5,977,989
Others (*)		74,658		—		—		74,658

Ending balance		15,920,173		—		—		15,920,173

(*)

Changes due to foreign currencies translation, etc.


	For the year ended December 31, 2020
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		14,497,083			—		—		14,497,083
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Net decrease		(4,759,053	)		—		—		(4,759,053	)
Business combination		129,825			—		—		129,825
Others (*)		(329	)		—		—		(329	)

Ending balance		9,867,526			—		—		9,867,526

(*)

Changes due to foreign currencies translation, etc.

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


	December 31, 2021			December 31, 2020
Loans in local currency		273,283,542			249,264,947
Loans in foreign currencies (*)		24,508,250			20,025,092
Domestic banker’s usance		3,403,021			2,240,830
Credit card accounts		9,757,115			8,542,619
Bills bought in foreign currencies		5,310,080			5,763,427
Bills bought in local currency		265,275			133,650
Factoring receivables		17,406			38,017
Advances for customers on guarantees		26,766			31,300
Private placement bonds		519,150			353,585
Securitized loans		2,874,480			2,561,914
Call loans		3,481,219			2,352,034
Bonds purchased under resale agreements		10,332,858			10,145,749
Financial lease receivables		1,173,751			586,216
Installment financial bond		2,882,396			1,925,493
Others		159			380
Loan origination costs and fees		858,051			744,109
Discounted present value		(7,299	)		(6,656	)
Allowance for credit losses		(1,886,710	)		(1,908,524	)

Total		336,799,510			302,794,182

(*)

It includes 50,088 million won in collateral assets related to the sale of bonds under repurchase agreements at the end of the previous year

- 92 -

(6)	Changes in the loss allowance of loans are as follows (Unit: Korean Won in millions):


	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	)

- 93 -


	For the year ended December 31, 2020
	Consumers									Corporates
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3
Beginning balance		(85,148	)		(77,962	)		(125,588	)		(324,258	)		(297,718	)		(390,045	)
Transfer to 12-month expected credit losses		(20,839	)		20,050			789			(29,117	)		25,067			4,050
Transfer to lifetime expected credit losses		9,137			(10,800	)		1,663			19,259			(48,184	)		28,925
Transfer to credit-impaired financial assets		3,549			4,913			(8,462	)		3,607			10,349			(13,956	)
Net reversal(provision) of loss allowance		5,142			(10,042	)		(125,923	)		2,831			(200,024	)		(271,265	)
Recovery		—			—			(71,277	)		—			—			(66,179	)
Charge-off		—			—			181,713			—			—			243,634
Disposal		—			—			5,640			—			13			47,106
Interest income from impaired loans		—			—			10,790			—			—			14,945
Business combination		(31,327	)		(15,129	)		(72,040	)		(13,703	)		(18,164	)		(24,364	)
Others		(2,041	)		4,507			(2,998	)		13,921			6,754			38,405

Ending balance		(121,527	)		(84,463	)		(205,693	)		(327,460	)		(521,907	)		(388,744	)


	For the year ended December 31, 2020
	Credit card accounts									Total
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3
Beginning balance		(74,726	)		(71,533	)		(128,042	)		(484,132	)		(447,213	)		(643,675	)
Transfer to 12-month expected credit losses		(14,978	)		14,755			223			(64,934	)		59,872			5,062
Transfer to lifetime expected credit losses		9,341			(9,742	)		401			37,737			(68,726	)		30,989
Transfer to credit-impaired financial assets		627			1,137			(1,764	)		7,783			16,399			(24,182	)
Net reversal(provision) of loss allowance		17,022			(25,098	)		(179,872	)		24,995			(235,164	)		(577,060	)
Recovery		—			—			(66,026	)		—			—			(203,482	)
Charge-off		—			—			245,890			—			—			671,237
Disposal		—			—			23,653			—			13			76,399
Interest income from impaired loans		—			—			—			—			—			25,735
Business combination		—			—			—			(45,030	)		(33,293	)		(96,404	)
Others		2			—			—			11,882			11,261			35,407

Ending balance		(62,712	)		(90,481	)		(105,537	)		(511,699	)		(696,851	)		(699,974	)

- 94 -

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


	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


	For the year ended December 31, 2020
	Consumers									Corporates
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3
Beginning balance		111,253,283			12,448,807			417,674			134,443,979			4,910,598			740,257
Transfer to 12-month expected credit losses		4,564,471			(4,552,400	)		(12,071	)		1,160,399			(1,146,756	)		(13,643	)
Transfer to lifetime expected credit losses		(5,365,577	)		5,388,064			(22,487	)		(3,983,614	)		4,023,106			(39,492	)
Transfer to credit-impaired financial assets		(96,197	)		(103,016	)		199,213			(357,386	)		(120,491	)		477,877
Charge-off		—			—			(181,713	)		—			—			(243,634	)
Disposal		—			—			(55,349	)		—			(398	)		(163,644	)
Net increase (decrease)		13,326,560			(1,289,910	)		54,503			14,804,391			(696,164	)		(64,490	)
Business combination		2,307,498			125,166			137,336			3,507,163			358,846			24,678

Ending balance		125,990,038			12,016,711			537,106			149,574,932			7,328,741			717,909


	For the year ended December 31, 2020
	Credit card accounts									Total
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3
Beginning balance		7,278,467			885,832			228,367			252,975,729			18,245,237			1,386,298
Transfer to 12-month expected credit losses		257,399			(257,144	)		(255	)		5,982,269			(5,956,300	)		(25,969	)
Transfer to lifetime expected credit losses		(454,230	)		454,709			(479	)		(9,803,421	)		9,865,879			(62,458	)
Transfer to credit-impaired financial assets		(26,947	)		(10,796	)		37,743			(480,530	)		(234,303	)		714,833
Charge-off		—			—			(245,890	)		—			—			(671,237	)
Disposal		—			—			(43,781	)		—			(398	)		(262,774	)
Net increase (decrease)		224,286			5,619			204,369			28,355,237			(1,980,455	)		194,382
Business combination		—			—			—			5,814,661			484,012			162,014

Ending balance		7,278,975			1,078,220			180,074			282,843,945			20,423,672			1,435,089

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


	December 31, 2021			December 31, 2020
Cash Management Account asset (CMA asset)		140,000			210,000
Receivables		6,852,139			3,809,929
Accrued income		1,049,857			864,107
Telex and telephone subscription rights and refundable deposits		870,707			936,878
Domestic exchange settlement debit		82,555			1,518,775
Other assets		290,746			192,342
Allowance for credit losses		(66,781	)		(83,295	)

Total		9,219,223			7,448,736

(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, 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	)


	For the year ended December 31, 2020
	Stage 1			Stage 2			Stage 3			Total
Beginning balance		(3,196	)		(1,666	)		(72,277	)		(77,139	)
Transfer to 12-month expected credit losses		(142	)		129			13			—
Transfer to lifetime expected credit losses		125			(155	)		30			—
Transfer to credit-impaired financial assets		23			64			(87	)		—
Provision of loss allowance		(667	)		(1,589	)		(3,080	)		(5,336	)
Charge-off		—			—			2,151			2,151
Disposal		—			—			1,557			1,557
Business combination		(624	)		(2,235	)		(1,968	)		(4,827	)
Others		815			2			(518	)		299

Ending balance		(3,666	)		(5,450	)		(74,179	)		(83,295	)

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(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, 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


	For the year ended December 31, 2020
	Stage 1			Stage 2			Stage 3			Total
Beginning balance		8,059,844			92,647			117,874			8,270,365
Transfer to 12-month expected credit losses		8,760			(8,737	)		(23	)		—
Transfer to lifetime expected credit losses		(15,305	)		15,334			(29	)		—
Transfer to credit-impaired financial assets		(1,900	)		(701	)		2,601			—
Charge-off		—			—			(2,151	)		(2,151	)
Disposal		—			—			(1,847	)		(1,847	)
Net increase (decrease)		(856,008	)		(26,539	)		69,500			(813,047	)
Business combination		72,035			4,414			2,262			78,711

Ending balance		7,267,426			76,418			188,187			7,532,031

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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.

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


	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.

- 99 -


	December 31, 2020
	Level 1 (*)		Level 2 (*)		Level 3		Total
Financial assets:
Financial assets at FVTPL
Deposits		48,796		—		—		48,796
Debt securities		516,597		2,365,882		4,618		2,887,097
Equity securities		35,422		—		450,371		485,793
Capital contributions		—		—		865,685		865,685
Beneficiary certificates		24,895		869,852		1,917,811		2,812,558
Loans		—		467,229		209,062		676,291
Derivative assets		18,416		6,875,454		7,872		6,901,742
Others		—		—		84,979		84,979

Sub-total		644,126		10,578,417		3,540,398		14,762,941

Financial assets at FVTOCI
Debt securities		3,092,237		25,855,904		—		28,948,141
Equity securities		510,073		—		570,715		1,080,788

Sub-total		3,602,310		25,855,904		570,715		30,028,929

Derivative assets (Designated for hedging)		—		174,820		—		174,820

Total		4,246,436		36,609,141		4,111,113		44,966,690


Financial liabilities:
Financial liabilities at FVTPL
Deposits due to customers		49,279		—		—		49,279
Derivative liabilities		6,024		6,433,727		20,136		6,459,887
Securities sold		285,026		—		—		285,026

Sub-total		340,329		6,433,727		20,136		6,794,192

Financial liabilities at FVTPL designated as upon initial recognition
Equity-linked securities		—		—		19,630		19,630

Derivative liabilities (Designated for hedging)		—		64,769		—		64,769

Total		340,329		6,498,496		39,766		6,878,591

(*)	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, 2021 and 2020 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.	Standard price

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, 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, 2021 and 2020 are as follows:


	Valuation methods	Input variables

Loans, bond with options	Fair value is calculated by using the Discounted Cash Flow Model, Binomial Tree, which is a valuation technique commonly used in the market taking into account the price and variability of the underlying asset, and LSMC.	Values of underlying assets, volatility, credit spread, discount rate and terminal growth rate

Debt securities	The Group is measuring fair value with LSMC and the Hull-White model.	Stock volatility, interest rate volatility and discount 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, 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, stock prices, volatility of underlying asset, net asset of the investment association and discount rate

Derivatives	Fair value is measured by models such as option model (Closed form), DCF model, FDM and Monte Carlo Simulation.	Risk-free market rate, discount rate, values of underlying assets such as foreign exchange rate and stock prices, volatility, etc.

Equity-linked securities	Fair value is measured by models such as option model (Closed form), DCF model, FDM and Monte Carlo Simulation.	Volatility of underlying assets, discount rate, dividends, volatility, correlation coefficient, foreign exchange rate, etc.

Others	Fair value is calculated by using the binomial tree, Least-squares Monte Carlo simulation (LSMC) and Income approach, which are commonly used valuation techniques in the market taking into account the price and variability of the underlying asset after measuring the fair value of underlying asset using Models including Discounted Cash Flow Model.	Stock prices, volatility of underlying assets, etc.

- 101 -

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	Input variable	Range(%)	Impact of changes in significant unobservable inputs on fair value measurement
Loans	Binomial Tree		Stock prices, Volatility of underlying asset	22.62%	Variation of fair value increases as volatility of underlying asset increases.
	LSMC		Stock prices, Volatility of underlying asset	19.48%	Variation of fair value increases as volatility of underlying asset increases.
Derivative assets	Option valuation model and others	Interest rate related	Correlation coefficient	0.90~0.98	Variation of fair value increases as correlation coefficient increases.
			Volatility of underlying asset	24.84~97.50%	Variation of fair value increases as volatility of underlying assets increases.
		Equity related	Correlation coefficient	0.18~0.76	Variation of fair value increases as correlation coefficient increases.
			Volatility of underlying asset	—	Variation of fair value increases as volatility of underlying assets increases.
	DCF model	Interest rate related	Credit risk adjustment ratio	100.00%	Variation of fair value decreases as credit risk adjustment ratio increases.
Derivative liabilities	Option valuation model and others	Interest rate related	Correlation coefficient	0.90~0.98	Variation of fair value increases as correlation coefficient increases.
			Volatility of underlying asset	24.84~97.50%	Variation of fair value increases as volatility of underlying assets increases.
		Equity related	Correlation coefficient	0.18~0.76	Variation of fair value increases as correlation coefficient increases.
			Volatility of underlying asset	—	Variation of fair value increases as volatility of underlying assets increases.
Equity securities, capital contributions, and beneficiary certificates	LSMC		Stock prices, Volatility of underlying asset	0.00%	Variation of fair value increases as volatility of underlying asset increases.
	DCF model and others		Discount rate	0.00~35.92%	Fair value increases as discount rate decreases.
			Terminal growth rate	1.00%	Fair value increases as terminal growth rate increases.
			Liquidation value	0.00%	Variation of liquidation value increases as volatility of underlying assets increases
Others	Income approach		Growth rate	1.00%	Fair value increases as growth rate increases.
	LSMC		Stock prices, Volatility of underlying asset	19.48~28.41%	Variation of fair value increases as volatility of underlying asset 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.

- 102 -

(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, 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)

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.

- 103 -


	For the year ended December 31, 2020
	Beginning balance		Business combination		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		5,826		—		(632	)		—			2,627		(3,203	)		—			4,618
Equity securities		464,741		3,894		(8,977	)		—			5,088		(14,407	)		32			450,371
Capital contributions		515,199		173,244		39,500			—			194,396		(56,654	)		—			865,685
Beneficiary certificates		1,275,734		166,467		(7,919	)		—			715,437		(231,908	)		—			1,917,811
Loans		152,629		35,854		6,149			—			656,880		(642,450	)		—			209,062
Derivative assets		25,048		—		9,458			—			9,501		(23,911	)		(12,224	)		7,872
Others		63,880		—		3,472			—			17,997		(370	)		—			84,979

Sub-total		2,503,057		379,459		41,051			—			1,601,926		(972,903	)		(12,192	)		3,540,398

Financial assets at FVTOCI
Equity securities		493,698		—		—			(4,920	)		82,227		(2,482	)		2,192			570,715

Total		2,996,755		379,459		41,051			(4,920	)		1,684,153		(975,385	)		(10,000	)		4,111,113

Financial liabilities:
Financial liabilities at FVTPL
Derivative liabilities		72,039		—		30,150			—			2,650		(66,170	)		(18,533	)		20,136
Financial liabilities at FVTPL designated as upon initial recognition
Equity-linked securities		87,626		—		665			—			—		(68,661	)		—			19,630
Derivative liabilities (Designated for hedging)		321		—		—			—			—		(321	)		—			—

Total		159,986		—		30,815			—			2,650		(135,152	)		(18,533	)		39,766

(*1)

For financial liabilities, positive numbers represent losses that increase balance and negative numbers represent gains that decrease balance. The gain amounting to 37,430 million Won for the year ended December 31, 2020, 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 3,623,168 million won and 4,150,878 million won as of December 31, 2021 and 2020 respectively, equity instruments of 3,030,775 million won and 3,052,432 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, 2021 and 2020 is as follows (Unit: Korean Won in millions):


	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)

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%.

- 105 -


	December 31, 2020
	Net income (loss)					Other comprehensive income (loss)
	Favorable		Unfavorable			Favorable		Unfavorable
Financial assets:
Financial assets at FVTPL
Derivative assets (*1)		110		(257	)		—		—
Loans (*2)		933		(932	)		—		—
Debt securities		13		(10	)		—		—
Equity securities (2) (3) (*4)		8,539		(7,337	)		—		—
Beneficiary certificates (*4)		1,403		(1,537	)		—		—
Others (*2)		640		(547	)		—		—
Financial assets at FVTOCI
Equity securities (3) (4)		—		—			21,587		(16,740	)

Total		11,638		(10,620	)		21,587		(16,740	)

Financial liabilities:
Financial liabilities at FVTPL
Derivative liabilities (*1)		776		(405	)		—		—
Financial liabilities at FVTPL designated as upon initial recognition
Equity-linked securities (*1)		57		(45	)		—		—

Total		833		(450	)		—		—

(*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)

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

(*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, 2021
	Fair value								Book value
	Level 1		Level 2		Level 3		Total		Book value
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		359,918,500		359,918,503		361,932,872
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


	December 31, 2020
	Fair value								Book value
	Level 1		Level 2		Level 3		Total		Book value
Financial assets:
Securities at amortized cost		2,968,875		14,299,748		—		17,268,623		17,020,839
Loans and other financial assets at amortized cost		—		—		318,144,845		318,144,845		320,106,078
Financial liabilities:
Deposits due to customers		—		291,767,282		—		291,767,282		291,477,279
Borrowings		—		20,586,930		176,745		20,763,675		20,745,466
Debentures		—		37,931,989		—		37,931,989		37,479,358
Other financial liabilities		—		13,305,067		286,489		13,591,556		13,808,386

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

- 107 -

(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, 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		—		15,914,139		—		15,979,211
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		379,019,146		106,764		431,742,933


	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


	December 31, 2020
Financial assets	Financial asset at FVTPL		Financial assets at FVTOCI		Financial assets at amortized cost		Derivatives assets (Designated for hedging)		Total
Deposits		48,796		—		9,863,160		—		9,911,956
Securities		7,136,112		30,028,929		17,020,839		—		54,185,880
Loans		676,291		—		302,794,182		—		303,470,473
Derivative assets		6,901,742		—		—		174,820		7,076,562
Other financial assets		—		—		7,448,736		—		7,448,736

Total		14,762,941		30,028,929		337,126,917		174,820		382,093,607


	December 31, 2020
Financial liabilities	Financial liabilities at FVTPL		Financial liabilities designated at FVTPL		Financial liabilities at amortized cost		Derivatives liabilities (Designated for hedging)		Total
Deposits due to customers		49,279		—		291,477,279		—		291,526,558
Borrowings		285,026		19,630		20,745,466		—		21,050,122
Debentures		—		—		37,479,358		—		37,479,358
Derivative liabilities		6,459,887		—		—		64,769		6,524,656
Other financial liabilities		—		—		13,808,386		—		13,808,386

Total		6,794,192		19,630		363,510,489		64,769		370,389,080

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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, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	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


	For the year ended December 31, 2020
	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		48,612			—			—			421,709			120,158		590,479
Financial assets at FVTOCI		437,527			311			(1,529	)		24,138			18,385		478,832
Securities at amortized cost		382,988			—			934			—			—		383,922
Loans and other financial assets at amortized cost		8,654,726			376,872			(792,250	)		44,443			—		8,283,791
Financial liabilities at amortized cost		(3,516,023	)		—			—			—			—		(3,516,023	)
Net derivatives (designated for hedging)		—			—			—			(74,213	)		—		(74,213	)

Total		6,007,830			377,183			(792,845	)		416,077			138,543		6,146,788

- 109 -

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, 2021		December 31, 2020
Assets transferred	Financial assets at FVTPL		248,009		410,331
	Financial assets at FVTOCI		127,065		138,315
	Securities at amortized cost		38,995		40,987
	Loans and other financial assets at amortized cost		—		50,088

	Total		414,069		639,721

Related liabilities	Bonds sold under repurchase agreements		749,976		657,823

Securities loaned

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

December 31, 2021

December 31, 2020

Loaned to

Financial assets at FVTOCI

Korean treasury and government bonds

98,535

100,345

Korea Securities Finance Corporation

Liquidity of financial assets

As of December 31, 2021 and 2020, 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, 2021		December 31, 2020
		Book value (*)		Book value(*)
Assets transferred	Financial assets at FVPL		151,930		156,900
	Loans at amortized cost		4,682,882		4,645,170
Related liabilities	Asset-backed borrowings		2,424,080		2,536,219
	Asset-backed bonds		978,274		1,289,992

(*)

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.

- 110 -

(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 or unpaid domestic exchange payable has been offset with part of unpaid domestic exchange payables or uncollected domestic exchange receivables and has 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, 2021 and 2020, 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, 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.

- 111 -



	December 31, 2020
	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)		6,456,799		—		6,456,799		7,733,997		598,545		1,278,176
Receivable spot exchange (*2)		3,153,919		—		3,153,919
Bonds purchased under resale agreements (*2)		10,145,749		—		10,145,749		10,145,749		—		—
Domestic exchange settlement debits (2) (6)		34,352,965		32,834,189		1,518,776		—		—		1,518,776

Total		54,109,432		32,834,189		21,275,243		17,879,746		598,545		2,796,952

Financial liabilities:
Derivative liabilities (*1)		5,823,620		—		5,823,620		7,147,683		477,603		1,371,364
Equity-linked securities in short position (*3)		19,630		—		19,630
Payable spot exchange (*4)		3,153,400		—		3,153,400
Bonds sold under repurchase agreements (*5)		657,823		—		657,823		213,623		444,200		—
Domestic exchange settlement credits (4) (6)		33,014,440		32,834,189		180,251		176,179		—		4,072

Total		42,668,913		32,834,189		9,834,724		7,537,485		921,803		1,375,436

(*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 equity linked securities related to derivatives and are included in financial liabilities at FVTPL.

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

(*5)	The items are included in borrowings.

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

- 112 -

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 (*9)	Main business		December 31, 2021		December 31, 2020		Location		Financial statements as of
Woori Bank
W Service Networks Co., Ltd. (*1)		Freight & staffing services		4.9		4.9		Korea		2021.11.30	(*5)
Korea Credit Bureau Co., Ltd. (*2)		Credit information		9.9		9.9		Korea		2021.12.31
Korea Finance Security Co., Ltd. (*1)		Security service		15.0		15.0		Korea		2021.11.30	(*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		—
Sinseong Trading Co., Ltd. (*4)		Manufacturing		—		27.9		Korea		—
Reading Doctors Co., Ltd. (*3)		Other services		35.4		35.4		Korea		—
Cultizm Korea LTD Co., Ltd. (*3)		Wholesale and retail sales		31.3		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		2021.12.31
2016KIF-IMM Woori Bank Technology Venture Fund		Other financial services		20.0		20.0		Korea		2021.12.31
K BANK Co., Ltd. (2) (8)		Finance		12.6		26.2		Korea		2021.11.30	(*5)
Smart Private Equity Fund No.2 (*10)		Other financial services		—		20.0		Korea		—
Woori Bank-Company K Korea Movie Asset Fund		Other financial services		25.0		25.0		Korea		2021.12.16	(*5)
Well to Sea No. 3 Private Equity Fund (*11)		Finance		—		50.0		Korea		—
Partner One Value Up I Private Equity Fund		Other financial services		23.3		23.3		Korea		2021.12.31
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		Other financial services		20.0		20.0		Korea		2021.12.31
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		Other financial services		25.0		25.0		Korea		2021.12.31
LOTTE CARD Co., Ltd.		Credit card and installment financing		20.0		20.0		Korea		2021.9.30	(*5)
Together-Korea Government Private Pool Private Securities Investment Trust No. 3		Other financial services		100.0		100.0		Korea		2021.12.31
Genesis Environmental Energy Company 1st Private Equity Fund		Trust and collective investment		24.8		24.8		Korea		2021.12.31
Union Technology Finance Investment Association		Trust and collective investment		29.7		29.7		Korea		2021.12.31
Dicustody Co., Ltd.(*2)		Other information technology and computer operation related services		1.0		—		Korea		2021.12.31

- 113 -


			Percentage of ownership (%)
Joint ventures and associates (*9)	Main business		December 31, 2021		December 31, 2020		Location		Financial statements as of
Woori Bank (*6)
Japanese Hotel Real Estate Private Equity Fund No.2		Other financial services		19.9		19.9		Korea		2021.12.31
Woori G Clean Energy No.1		Investment trust and discretionary investment business		—		29.3		Korea		—
Woori Goseong Power EBL Private Special Asset Fund		Trust and collective investment		—		16.7		Korea		—
Woori Seoul Beltway Private Special Asset Fund No.1		Trust and collective investment		25.0		25.0		Korea		2021.12.31
Woori Multi-Return Securities Investment Trust 3 (Balanced Bond)		Collective investment business		20.0		—		Korea		2021.12.31
Woori Short-term Bond Securities Investment Trust(Bond) ClassC-F		Collective investment business		14.5		—		Korea		2021.12.31
Woori Financial Capital Co., Ltd.
WOORI TAERIM 1st Fund		Other financial services		25.6		25.6		Korea		2021.12.31
Portone-Cape Fund No.1		Other financial services		20.0		20.0		Korea		2021.12.31
KIWOOM WOORI Financial 1st Fund (*7)		Other financial services		9.1		9.1		Korea		2021.12.31
DeepDive WOORI 2021-1 Financial Investment Fund (*7)		Other financial services		11.9		—		Korea		2021.12.31
Darwin Green Packaging Private Equity Fund		Other financial services		20.4		—		Korea		2021.12.31
Woori Investment Bank Co., Ltd. (*6)
Woori FirstValue Private Real Estate Fund No.2		Real estate business		12.0		12.0		Korea		2021.12.31
WooriG Real Infrastructure Blind General Type Private Placement Investment Trust		Investment trust and discretionary investment business		0.3		—		Korea		2021.12.31
Woori Asset Management Co. Ltd.
Woori High plus G.B. Securities Feeder Fund1(G.B.)		Collective investment business		—		21.8		Korea		—
Woori Star50 Master Fund ClassC-F		Collective investment business		—		24.5		Korea		—
Woori Private Equity Asset Management Co., Ltd.
Woori Hanhwa Eureka Private Equity Fund (*2)		Other financial services		0.8		0.8		Korea		2021.12.31
Aarden Woori Apparel 1st Private Equity Fund (*2)		Other financial services		0.5		—		Korea		2021.12.31
Japanese Hotel Real Estate Private Equity Fund 1
Godo Kaisha Oceanos 1		Other financial services		47.8		47.8		Japan		2021.10.31(*5)
Woori G Japan Private Placement Real Estate Master Investment Trust No.2 Woori Zip 1		Other financial services		63.9		—		Japan		2021.9.30(*5)
Woori Zip 2		Other financial services		63.8		—		Japan		2021.9.30(*5)

- 114 -


			Percentage of ownership (%)
Joint ventures and associates (*9)	Main business		December 31, 2021		December 31, 2020		Location		Financial statements as of
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		29.7		28.7		Korea		—
G2 Collection Co., Ltd. (*3)		Wholesale and retail sales		29.2		29.2		Korea		—
The Base Enterprise Co., Ltd. (*3)		Manufacturing		48.4		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)		Complex transportation brokerage		49.8		49.8		Korea		—
DAEA SNC Co., Ltd. (*3)		Wholesale and retail sales		25.5		25.5		Korea		—
Force TEC Co., Ltd.		Manufacturing		24.5		25.8		Korea		2021.9.30(*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		—		Korea		2021.09.30(*5)
Jinmyung Plus Co., Ltd		Manufacturing		21.3		—		Korea		2021.12.31
Woori bank and Woori Financial Capital Co., Ltd. (*6)
JC Assurance No.2 Private Equity Fund		Other financial services		24.4		29.3		Korea		2021.12.31
Dream Company Growth no.1 PEF		Other financial services		27.8		27.8		Korea		2021.12.31
HMS-Oriens 1st Fund		Other financial services		22.8		22.8		Korea		2021.12.31
Woori G Senior Loan Private Placement Investment Trust No.1		Collective investment business		21.7		21.7		Korea		2021.12.31
Genesis Eco No.1 Private Equity Fund		Other financial services		29.0		—		Korea		2021.12.31
Paratus Woori Material Component Equipment joint venture company		Other financial services		29.9		—		Korea		2021.9.30(*5)
Midas No. 8 Private Equity Joint Venture Company		Other financial services		28.5		—		Korea		2021.12.31
Woori Bank and Woori Investment Bank Co., Ltd. (*6)
PCC-Woori LP Secondary Fund		Other financial services		38.8		38.8		Korea		2021.12.31
Woori bank and Woori Asset Management Co., Ltd. (*6)
Woori High Plus Short-term High Graded ESG Bond Sec Feeder Inv Trust 1		Collective investment business		27.5		23.3		Korea		2021.12.31
Woori Bank and Woori Private Equity Asset Management Co., Ltd. (*6)
Woori-Q Corporate Restructuring Private Equity Fund		Other financial services		38.1		38.4		Korea		2021.12.31

- 115 -

Percentage of ownership (%)

Joint ventures and associates (*9)

Main business

December 31,
2021

December 31,
2020

Location

Financial
statements
as of

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

Korea

2021.12.31

(*1)	Most of the significant business transactions of associates are with the Group as of December 31, 2021 and 2020.

(*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, 2021 and 2020.

(*4)	Registration was closed and excluded from associates for the year ended December 31, 2021.

(*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 December 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)	Due to the failure of associates to participate in the capital increase with consideration, the percentage of ownership decreased, for the year ended December 31, 2021.

(*9)	WooriG Oncorp Corporate support of Major Industry General Type Private Placement Investment Trust (Type 2) and other 16 joint ventures and associates can exercise significant influence but was classified as an item measured at fair value through profit or loss.

(*10)

Due to loss of significant influence during the year, it has been classified as a financial asset measured at fair value through profit or loss

(*11)

It was fully repaid and excluded from associates for the year ended December 31, 2021.

- 116 -

(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, 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
DeepDive WOORI 2021-1 Financial Investment Fund		1,000		—		(7	)		1,000		—			—			—			993

- 117 -


	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
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.

- 118 -


	For the year ended December 31, 2020
	Acquisition cost		January 1, 2020		Share of profits (losses)			Acquisition		Disposal/ Reclassification			Dividends			Business combination		Change in capital			December 31, 2020
W Service Networks Co., Ltd.		108		186		7			—		—			(3	)		—		1			191
Korea Credit Bureau Co., Ltd.		3,313		6,845		1,370			—		—			(90	)		—		—			8,125
Korea Finance Security Co., Ltd.		3,267		3,287		(221	)		—		—			—			—		—			3,066
Chin Hung International Inc.		—		51,176		(742	)		—		(50,411	)		—			—		(23	)		—
Saman Corporation		—		849		(432	)		—		(466	)		—			—		49			—
Woori Growth Partnerships New Technology Private Equity Fund		16,938		19,212		(2,240	)		—		(1,728	)		(212	)		—		—			15,032
2016KIF-IMM Woori Bank Technology Venture Fund		11,893		15,141		1,240			—		(492	)		(1,088	)		—		(1,563	)		13,238
K BANK Co., Ltd.		236,232		31,254		(18,334	)		163,082		—			—			—		(1,905	)		174,097
Smart Private Equity Fund No.2		2,915		2,764		(1,283	)		—		—			—			—		—			1,481
Woori Bank-Company K Korea Movie Asset Fund		2,100		3,323		365			—		(900	)		—			—		—			2,788
Well to Sea No.3 Private Equity Fund		—		209,023		87,180			—		(117,170	)		(178,355	)		—		(678	)		—
Partner One Value Up I Private Equity Fund		10,000		9,908		(75	)		—		—			—			—		(17	)		9,816
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		9,756		4,576		—			5,720		(540	)		—			—		—			9,756
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		4,130		4,375		—			75		(321	)		—			—		—			4,129
Woori-Shinyoung Growth-Cap Private Equity Fund I		32,480		11,841		7,366			31,363		(12,124	)		(104	)		—		—			38,342
LOTTE CARD Co.,Ltd		346,810		409,444		19,692			810		—			(5,710	)		—		(1,404	)		422,832
Woori-Q Corporate Restructuring Private Equity Fund		23,146		6,046		(159	)		17,017		—			—			—		—			22,904
PCC-Woori LP Secondary Fund		7,575		2,525		554			5,049		—			—			—		—			8,128
Force TEC Co., Ltd.		—		—		1,542			—		—			—			—		(1,149	)		393
Together-Korea Government Private Pool Private Securities Investment Trust No.3		10,000		—		23			100,000		(90,000	)		—			—		—			10,023
Genesis Environmental Energy Company 1st Private Equity Fund		3,738		—		241			4,084		(346	)		—			—		—			3,979
Union Technology Finance Investment Association		4,500		—		(15	)		4,500		—			—			—		—			4,485
Woori Hanhwa Eureka Private Equity Fund		350		342		61			—		—			—			—		—			403
Godo Kaisha Oceanos 1		10,800		10,952		7			—		—			(850	)		—		84			10,193
Japanese Hotel Real Estate Private Equity Fund No.2		3,291		3,291		283			—		—			(154	)		—		(186	)		3,234

- 119 -


	For the year ended December 31, 2020
	Acquisition cost		January 1, 2020		Share of profits (losses)			Acquisition		Disposal/ Reclassification			Dividends			Business combination		Change in capital			December 31, 2020
Woori High plus G.B. Securities Feeder Fund1(G.B.)		6,000		—		49			6,141		—			—			—		(114	)		6,076
WooriG Senior Loan General Type Private Investment Trust No.1		51,959		—		343			51,959		—			(257	)		—		—			52,045
Woori G Clean Energy No.1		1,015		—		9			1,015		—			—			—		—			1,024
Woori Goseong Power EBL Private Special Asset Fund		14,915		—		611			14,915		—			(408	)		—		—			15,118
Woori Seoul Beltway Private Special Asset Fund No.1		5,590		—		97			5,591		—			(75	)		—		—			5,613
AJU TAERIM 1st Fund		1,100		—		(6	)		—		—			—			289		—			283
Portone-Cape Fund No.1		1,000		—		—			—		—			—			960		—			960
KIWOOM PE AJU Investment Fund		1,000		—		(6	)		1,000		—			—			—		—			994
Woori FirstValue Private Real Estate Fund No.2		9,000		—		1,184			—		—			—			—		946			2,130
Woori Star50 Master Fund ClassC-F		200		—		(16	)		200		—			—			—		—			184
JC Assurance No.2 Private Equity Fund		29,050		—		—			29,050		—			—			—		—			29,050
Dream Company Growth no.1 PEF		7,705		—		—			7,705		—			—			—		—			7,705
HMS-Oriens 1st Fund		12,000		—		—			12,000		—			—			—		—			12,000
Woori High Plus Short-term High Graded ESG Bond Sec Feeder Inv Trust 1		91,092		—		2,382			91,092		—			—			—		—			93,474

		974,968		806,360		101,077			552,368		(274,498	)		(187,306	)		1,249		(5,959	)		993,291

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(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, 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	)

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	December 31, 2021
	Assets		Liabilities		Operating revenue		Net income (loss)			Other comprehensive income(loss)		Total comprehensive income(loss)
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	)
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.

- 122 -


	December 31, 2020
	Assets		Liabilities		Operating revenue		Net income (loss)			Other comprehensive income(loss)			Total comprehensive income(loss)
W Service Networks Co., Ltd.		6,305		2,448		18,525		1,197			—			1,197
Korea Credit Bureau Co., Ltd.		117,077		37,599		107,810		13,391			—			13,391
Korea Finance Security Co., Ltd.		36,978		16,536		60,599		(1,985	)		—			(1,985	)
Woori Growth Partnerships New Technology Private Equity Fund		65,390		252		1,589		(9,601	)		—			(9,601	)
2016KIF-IMM Woori Bank Technology Venture Fund		64,109		1,198		7,425		6,201			—			6,201
K BANK Co., Ltd.		4,040,051		3,530,074		68,144		(83,989	)		(1,354	)		(85,343	)
Smart Private Equity Fund No.2		13,667		51		1		(204	)		—			(204	)
Woori Bank-Company K Korea Movie Asset Fund		11,273		119		1,926		1,461			—			1,461
Well to Sea No.3 Private Equity Fund		22,001		3,102		610,535		16,061			3,976			20,037
Partner One Value Up I Private Equity Fund		42,205		—		308		(329	)		—			(329	)
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		46,542		655		1,024		(411	)		—			(411	)
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		15,747		—		284		(85	)		—			(85	)
LOTTE CARD Co.,Ltd (*)		14,578,716		12,238,805		1,255,593		78,781			(9,040	)		69,741
Together-Korea Government Private Pool Private Securities Investment Trust No.3		10,025		1		187		23			—			23
Genesis Environmental Energy Company 1st Private Equity Fund		16,192		118		1,400		974			—			974
Union Technology Finance Investment Association		15,151		51		1		(50	)		—			(50	)
Japanese Hotel Real Estate Private Equity Fund 2		16,293		15		1,359		1,271			(940	)		331
Woori G Clean Energy No.1		3,496		1		33		32			—			32
Woori Goseong Power EBL Private Special Asset Fund		90,728		21		3,060		2,969			—			2,969
Woori Seoul Beltway Private Special Asset Fund No.1		22,452		1		352		323			—			323
AJU TAERIM 1st Fund		1,192		86		—		(22	)		—			(22	)
Portone-Cape Fund No.1		4,800		—		—		—			—			—
KIWOOM WOORI Financial 1st Investment Fund		10,986		57		—		(71	)		—			(71	)
Woori FirstValue Private Real Estate Fund No.2		20,220		2,467		9		(9	)		—			(9	)
Woori High plus G.B. Securities Feeder Fund1(G.B.)		27,870		—		148		148			—			148
Woori Star50 Master Fund ClassC-F		1,011		246		11		11			—			11
Woori Hanhwa Eureka Private Equity Fund		50,382		235		8,150		7,676			—			7,676
Godo Kaisha Oceanos 1		66,793		45,472		1,425		14			—			14
Force TEC Co., Ltd.		47,077		45,552		25,914		(415	)		(2,745	)		(3,160	)
JC Assurance No.2 Private Equity Fund		98,431		13		—		(732	)		—			(732	)
Dream Company Growth no.1 PEF		28,727		43		—		(116	)		—			(116	)
HMS-Oriens 1st Fund		52,685		53		90		20			—			20
WooriG Senior Loan General Type Private Investment Trust No.1		240,414		15		1,721		1,584			—			1,584
PCC-Woori LP Secondary Fund		20,927		4		2,082		1,425			—			1,425
Woori High Plus Short-term High Graded ESG Bond Sec Feeder Inv Trust 1		402,015		—		10,727		10,727			—			10,727
Woori-Q Corporate Restructuring Private Equity Fund		58,355		433		206		(1,590	)		—			(1,590	)
Woori-Shinyoung Growth-Cap Private Equity Fund I		110,452		825		23,875		21,106			—			21,106

(*)

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.

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(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, 2021 and 2020 are as follows:


	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.


	December 31, 2020
Associate (*)	Number of shares owned		Ownership (%)
Orient Shipyard Co., Ltd. (*1)		464,812		21.4
Yuil PESC Co., Ltd. (*1)		8,642		24.0
CL Tech Co., Ltd.(*1)		13,759		38.6

(*)	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.

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(5)	As of December 31, 2021 and 2020, the reconciliations from the net assets of the associates to the book value of the shares of the investment in joint ventures and associates are as follows (Unit: Korean Won in millions except for ownership):


	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

- 125 -


	December 31, 2021
	Total net asset			Ownership (%)		Ownership portion of net assets			Basis difference		Impairment			Intercompany transaction			Book value
Portone-Cape Fund No.1		2,447			20.0		489			—		—			—			489
KIWOOM WOORI Financial 1st Investment Fund		10,707			9.1		973			—		—			—			973
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.

- 126 -


	December 31, 2020
	Total net asset		Ownership (%)		Ownership portion of net assets		Basis difference		Impairment			Intercompany transaction			Book value
W Service Networks Co., Ltd.		3,857		4.9		191		—		—			—			191
Korea Credit Bureau Co., Ltd.		79,478		9.9		7,876		246		—			3			8,125
Korea Finance Security Co., Ltd.		20,442		15.0		3,066		—		—			—			3,066
Woori Growth Partnerships New Technology Private Equity Fund		65,138		23.1		15,034		—		—			(2	)		15,032
2016KIF-IMM Woori Bank Technology Venture Fund		62,911		20.0		12,582		—		—			656			13,238
K BANK Co., Ltd. (1) (2)		509,978		26.2		133,614		44,117		(3,634	)		—			174,097
Smart Private Equity Fund No.2 (*2)		13,616		20.0		2,723		—		(1,242	)		—			1,481
Woori Bank-Company K Korea Movie Asset Fund		11,154		25.0		2,788		—		—			—			2,788
Well to Sea No.3 Private Equity Fund (*3)		18,899		50.0		—		—		—			—			—
Partner One Value Up Ist Private Equity Fund		42,205		23.3		9,817		—		—			(1	)		9,816
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		45,888		20.0		9,178		—		—			578			9,756
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		15,747		25.0		3,937		—		—			192			4,129
Woori-Shinyoung Growth-Cap Private Equity Fund I		109,627		35.0		38,342		—		—			—			38,342
LOTTE CARD Co., Ltd (*1)		2,114,159		20.0		422,832		—		—			—			422,832
Woori-Q Corporate Restructuring Private Equity Fund		57,922		38.4		22,220		—		—			684			22,904
PCC-Woori LP Secondary Fund		20,923		38.8		8,126		—		—			2			8,128
Force TEC		1,526		25.8		393		—		—			—			393
Together-Korea Government Private Pool Private Securities Investment Trust No.3		10,024		100.0		10,024		—		—			(1	)		10,023
Genesis Environmental Energy Company 1st Private Equity Fund		16,074		24.8		3,979		—		—			—			3,979
Union Technology Finance Investment Association		15,100		29.7		4,485		—		—			—			4,485
Woori Hanhwa Eureka Private Equity Fund		50,147		0.8		403		—		—			—			403
Godo Kaisha Oceanos 1		21,321		47.8		10,193		—		—			—			10,193
Japanese Hotel Real Estate Private Equity Fund No.2		16,278		19.9		3,234		—		—			—			3,234
Woori High plus G.B. Securities Feeder Fund1(G.B.)		27,870		21.8		6,076		—		—			—			6,076
WooriG Senior Loan General Type Private Investment Trust No.1		240,399		21.7		52,045		—		—			—			52,045
Woori G Clean Energy No.1		3,495		29.3		1,024		—		—			—			1,024
Woori Goseong Power EBL Private Special Asset Fund		90,707		16.7		15,118		—		—			—			15,118

- 127 -


	December 31, 2020
	Total net asset		Ownership (%)		Ownership portion of net assets		Basis difference		Impairment		Intercompany transaction		Book value
Woori Seoul Beltway Private Special Asset Fund No.1		22,451		25.0		5,613		—		—		—		5,613
WOORI TAERIM 1st Fund		1,106		25.6		283		—		—		—		283
Portone-Cape Fund No.1		4,800		20.0		960		—		—		—		960
KIWOOM WOORI Financial 1st Investment Fund		10,929		9.1		994		—		—		—		994
Woori FirstValue Private Real Estate Fund No.2		17,753		12.0		2,130		—		—		—		2,130
Woori Star50 Master Fund ClassC-F		765		24.5		184		—		—		—		184
JC Assurance No.2 Private Equity Fund		98,418		29.3		29,050		—		—		—		29,050
Dream Company Growth no.1 PEF		28,684		27.8		7,705		—		—		—		7,705
HMS-Oriens 1st Fund		52,632		22.8		12,000		—		—		—		12,000
Woori High Plus Short-term High Graded ESG Bond Sec Feeder Inv Trust 1		402,015		23.3		93,474		—		—		—		93,474

(*1)

The net asset equity amount is after the debt-for-equity swap, non-controlling etc.

(*2)

As a result of conducting an impairment test on the investment stocks of the related companies, the recoverable value was less than the carrying amount and thus the impairment loss was recognized.

(*3)

The estimated recoverable amount of 15,687 million Won at the time of liquidation was classified as receivable.

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14.

INVESTMENT PROPERTIES

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


	December 31, 2021			December 31, 2020
Acquisition cost		415,163			409,702
Accumulated depreciation		(25,582	)		(22,152	)
Accumulated impairment losses		(86	)		(86	)

Net carrying value		389,495			387,464

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


	For the years ended December 31
	2021			2020
Beginning balance		387,464			280,239
Acquisition		—			76,588
Disposal		—			(353	)
Depreciation		(2,809	)		(2,689	)
Transfer		6,095			30,431
Foreign currencies translation adjustments		(1,255	)		267
Business combination		—			10,557
Others		—			(7,576	)

Ending balance		389,495			387,464

(3)

Fair value of investment properties amounted to 665,710 million won and 750,659 million won as of December 31, 2021 and 2020, 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 15,056 million won and 15,190 million won for the years ended December 31, 2021 and 2020, respectively. Operating expenses directly related to the investment properties where rental fee was earned is amounting to 2,941 million won and 2,807 million won.

(5)	The lease payments expected to be received in the future under lease contracts relating to investment properties as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	December 31, 2021		December 31, 2020
Lease payments:
Within a year		13,769		11,553
More than 1 year and within 2 years		10,770		8,403
More than 2 years and within 3 years		7,743		7,545
More than 3 years and within 4 years		5,009		7,154
More than 4 years and within 5 years		2,953		4,312
More than 5 years		2,603		2,534

Total		42,847		41,501

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15.

PREMISES AND EQUIPMENT

(1)	Details of premises and equipment as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	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


	December 31, 2020
	Land		Building		Equipment and vehicles		Leasehold improvement		Construction in progress		Structures		Total
Premises and equipment (owned)		1,726,045		787,040		268,225		50,085		8,246		2		2,839,643
Right-of-use asset		—		435,132		12,423		—		—		—		447,555
Carrying value		1,726,045		1,222,172		280,648		50,085		8,246		2		3,287,198

(2)	Details of premises and equipment (owned) as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	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


	December 31, 2020
	Land			Building			Equipment and vehicles			Leasehold improvement			Construction in progress		Structures			Total
Acquisition cost		1,726,705			1,076,647			1,142,653			478,290			8,246		20			4,432,561
Accumulated depreciation		—			(289,607	)		(874,428	)		(428,205	)		—		(18	)		(1,592,258	)
Accumulated impairment losses		(660	)		—			—			—			—		—			(660	)

Net carrying value		1,726,045			787,040			268,225			50,085			8,246		2			2,839,643

- 130 -

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


	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


	For the year ended December 31, 2020
	Land			Building			Equipment and vehicles			Leasehold improvement			Construction in progress			Structures			Total
Beginning balance		1,761,159			802,299			278,016			54,839			1,287			2			2,897,602
Acquisitions		3,787			26,972			84,828			26,124			7,751			—			149,462
Disposals		(8,326	)		(1,719	)		(605	)		(688	)		—			—			(11,338	)
Depreciation		—			(34,572	)		(94,388	)		(30,579	)		—			—			(159,539	)
Transfer		(30,847	)		(2,048	)		118			—			(118	)		—			(32,895	)
Foreign currencies translation adjustments		(836	)		(882	)		(1,849	)		(830	)		(82	)		—			(4,479	)
Business combination		1,108			81			2,150			437			—			—			3,776
Others		—			(3,091	)		(45	)		782			(592	)		—			(2,946	)

Ending balance		1,726,045			787,040			268,225			50,085			8,246			2			2,839,643

(4)	Details of right-of-use assets as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	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


	December 31, 2020
	Building			Equipment and vehicles			Total
Acquisition cost		720,417			28,463			748,880
Accumulated depreciation		(285,285	)		(16,040	)		(301,325	)

Net carrying value		435,132			12,423			447,555

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(5)	Details of changes in right-of-use assets for the years ended December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	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


	For the year ended December 31, 2020
	Building			Equipment and vehicles			Total
Beginning balance		449,878			17,236			467,114
New contracts		224,494			6,831			231,325
Changes in contract		10,729			32			10,761
Termination		(18,925	)		(574	)		(19,499	)
Depreciation		(224,946	)		(11,716	)		(236,662	)
Business combination		3,210			381			3,591
Others		(9,308	)		233			(9,075	)

Ending balance		435,132			12,423			447,555

16.

INTANGIBLE ASSETS

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


	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


	December 31, 2020
	Goodwill		Industrial property rights			Development cost			Other intangible assets			Membership deposit			Construction in progress		Total
Acquisition cost		334,290		1,810			582,998			1,114,615			39,454			6,669		2,079,836
Accumulated amortization		—		(1,101	)		(374,125	)		(875,636	)		—			—		(1,250,862	)
Accumulated impairment losses		—		—			—			(33,534	)		(3,363	)		—		(36,897	)

Net carrying value		334,290		709			208,873			205,445			36,091			6,669		792,077

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


	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.


	For the year ended December 31, 2020
	Goodwill			Industrial property rights			Development cost			Other intangible assets			Membership deposit			Construction in progress			Total
Beginning balance		350,682			692			225,193			234,147			29,330			4,066			844,110
Acquisitions		—			233			53,273			41,329			5,183			3,197			103,215
Disposal		—			—			—			—			(782	)		—			(782	)
Amortization (*)		—			(216	)		(71,620	)		(64,822	)		—			—			(136,658	)
Impairment losses		—			—			—			(7,692	)		(99	)		—			(7,791	)
Transfer		—			—			428			164			—			(592	)		—
Foreign currencies translation adjustments		(14,802	)		—			—			(2,208	)		(15	)		(2	)		(17,027	)
Business combination		—			—			2,403			4,199			2,079			—			8,681
Others		(1,590	)		—			(804	)		328			395			—			(1,671	)

Ending balance		334,290			709			208,873			205,445			36,091			6,669			792,077

(*)

Amortization of other intangible assets amounting to 11,890 million won is included in other operating expenses.

(3)

Goodwill

Details of allocated goodwill based on each cash-generating unit as of December 31, 2021 and 2020 are as follows (Unit: Korean won in million):


Cash-generating unit (*1)	December 31, 2021		December 31, 2020
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)		99,667		92,831
WOORI BANK (CAMBODIA) PLC (*3)		52,082		47,924
Others		6,854		6,689

Total		345,449		334,290

(*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.

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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 (%).		18.72		17.82		17.52		11.96		12.60
Terminal growth rate (%)		1.0		1.0		1.0		0.0		0.0
Recoverable amount.		326,205		137,578		41,967		606,626		369,782
Carrying amount		262,116		132,601		29,954		592,136		357,902

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		(29,949	)		(6,638	)		(1,999	)		(62,532	)		(30,603	)
	Decrease by 1.0% point		34,863			7,741			2,356			74,238			35,994
Terminal growth rate (%)	Increase by 1.0% point		18,640			4,179			1,318			47,187			20,339
	Decrease by 1.0% point(*)		(16,089	)		(3,603	)		(1,123	)		—			—

(*)	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, 2021		December 31, 2020
Premises and equipment		8,900		2,130
Investments of associates		11,472		50,411
Others		5,955		7,461

Total		26,327		60,002

(*)

The Group classifies assets as held for sale that are highly likely to be sold within one year from December 31, 2021 or December 31, 2020.

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 term 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. In addition, the investment assets of the associates, which are counted as assets held for sale as of the end of the current term, are likely to be sold within one year of the end of the current term according to the management’s decision. On the other hand, other assets that are expected to be sold as of the end of the current term 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, 2021
		Collateral given to	Amount	Reason for collateral
Financial assets at FVTPL	Korean treasury and government bonds and others	Nonghyup bank and others	248,009	Related to bonds sold under repurchase agreements (*)
	Korean treasury and government bonds and others	Korea Securities Depository	179,079	Securities borrowing collateral
	Korean treasury and government bonds and others	VI Investment, etc.	3,008	Future trading collateral
	Korean financial institutions’ debt securities and others	Korea Securities Depository	205,783	Securities borrowing collateral
	Korean financial institutions’ debt securities and others	KOREA SECURITIES FINANCE CORPORATION	54,419	Collateral for securities lending purposes
	Korean financial institutions’ debt securities and others	Shinhan Investment Corp.	5,352	Collateral for futures transaction
	Korean corporate bonds and others	Korea Securities Depository	299,161	Securities borrowing collateral
	Korean capital contributions and others	Korea Software Financial Cooperative	101	Bid guarantee, etc.
Financial assets at FVTOCI	Korean bonds	Korea Securities Depository	470	Related to bonds sold under repurchase agreements (*)
	Korean financial institutions’ debt securities and others	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 and others	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
Investment real estate	Land and building	Credit Counselling & Recovery Service and others	1,910	Right to collateral and others
Premises and equipment	Land and building	Credit Counselling & Recovery Service and others	5,520	Right to collateral and others

		Total	17,395,551

(*)

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.

- 136 -


		December 31, 2020
		Collateral given to	Amount	Reason for collateral
Financial assets at FVTPL	Korean treasury and government bonds and others	Kookmin bank and others	259,835	Related to bonds sold under repurchase agreements (*)
	Korean treasury and government bonds and others	Korea Securities Depository	157,021	Securities borrowing collateral
	Korean treasury and government bonds and others	Shinhan Investment Corp.	42,428	Collateral for futures transaction
	Korean financial institutions’ debt securities and others	Korea Securities Depository	148,961	Securities borrowing collateral
	Korean financial institutions’ debt securities and others	Kookmin bank and others	150,496	Related to bonds sold under repurchase agreements (*)
	Korean financial institutions’ debt securities and others	TIMEFOLIO Co., Ltd.	19,958	Collateral for futures transaction
Financial assets at FVTOCI	Korean treasury and government bonds and others	Korea Securities Depository	473	Related to bonds sold under repurchase agreements (*)
	Korean financial institutions’ debt securities and others	The BOK and others	1,621,941	Settlement risk and others
	Foreign financial institutions’ debt securities	STANDARD BANKLONDON LTD	137,842	Related to bonds sold under repurchase agreements (*)
Securities at amortized cost	Korean treasury and government bonds and others	The BOK and others	8,111,193	Settlement risk and others
	Foreign financial institutions’ debt securities	NATIXIS and others	40,987	Related to bonds sold under repurchase agreements (*)
	Foreign financial institutions’ debt securities	Federal Reserve Bank	14,377	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	39,005	Margin deposit for futures or option
	Other due from banks in local currency	Korea Federation of Savings Banks	47,805	Domestic exchange business
	Other due from banks in foreign currencies	JPMORGAN CHASE BANK and others	755,177	Collateral for CSA and others
	Foreign currency loan bonds	Industrial and Commercial Bank of China	50,088	Related to bonds sold under repurchase agreements (*)
	Mortgage loan	Public offering	3,190,889	Related to covered bonds
Investment real estate	Land and building	Credit Counselling & Recovery Service and others	5,676	Right to collateral and others
Premises and equipment	Land and building	Credit Counselling & Recovery Service and others	1,969	Right to collateral and others

		Total	14,797,621

(*)

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(2)	As of December 31, 2021 and 2020 there is no asset acquired through foreclosures.


	December 31, 2021			December 31, 2020
Investment properties
Land		2,185			5,425
Building		181			—
Sub-total		2,366			5,425
Other assets
Land for non-business use		21,156			10,684
Building for non-business use (*1)		1,526			1,966
Movables for non-business use (*2)		120			155
Real estate assessment provision for non-business use		(1,129	)		(670	)
Sub-total		21,673			12,135
Assets held for sale
Land		2,980			5,477
Building		2,557			3,568
Others		418			546
Sub-total		5,955			9,591

Total		29,994			27,151

(*1)

The cumulative depreciation amount as of December 31, 2021 and 2020 is 716 million Won and 566 million Won, respectively.

(*2)

The cumulative depreciation amount as of December 31, 2021 and 2020 is 907 million Won and 854 million Won, respectively.

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


		December 31, 2021	December 31, 2020	Loaned to
Financial assets at FVTOCI	Korean treasury and government bonds	98,535	100,345	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.

(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, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	December 31, 2021
	Fair values of collaterals	Fair values of collaterals were disposed or re-subjected to lien
Securities	10,785,412	—


	December 31, 2020
	Fair values of collaterals	Fair values of collaterals were disposed or re-subjected to lien
Securities	10,573,982	—

19.

OTHER ASSETS

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


	December 31, 2021		December 31, 2020
Lease assets		1,782,887		1,116,175
Prepaid expenses		189,808		170,820
Advance payments		61,042		28,256
Non-operational assets		16,248		12,135
Others		38,965		21,608

Total		2,088,950		1,348,994

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20.

FINANCIAL LIABILITIES AT FVTPL

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


	December 31, 2021		December 31, 2020
Financial instruments at fair value through profit or loss measured at fair value		4,873,458		6,794,192
Financial liabilities at fair value through profit or loss designated as upon initial recognition		—		19,630

Total		4,873,458		6,813,822

(2)	Financial liabilities at fair value through profit or loss measured at fair value are as follows (Unit: Korean Won in millions):


	December 31, 2021		December 31, 2020
Deposits
Gold banking liabilities		65,016		49,279
Borrowings
Securities sold		241,174		285,026
Derivative liabilities		4,567,268		6,459,887

Total		4,873,458		6,794,192

(3)	Financial liabilities at fair value through profit or loss designated as upon initial recognition as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	December 31, 2021		December 31, 2020
Equity-linked securities
Equity-linked securities in short position		—		19,630

These contacts are designated as financial liabilities at fair value through profit or loss because these contracts contain one or more embedded derivatives and are hybrid (combined) contracts in accordance with K-IFRS 1109 Financial Instrument.

(4)	There are no accumulated changes in credit risk adjustments to financial liabilities at fair value through profit or loss designated as upon initial recognition.

The adjustment to reflect Group’s credit risk is considered in measuring the fair value of equity-linked securities index. The Group’s credit risk is determined by adjusting credit spread observed in credit rating of Group.

(5)	The difference between carrying amount and maturity amount of financial liabilities at fair value through profit or loss designated as upon initial recognition (Financial liabilities designated as at FVTPL) are as follows (Unit: Korean Won in millions):


	December 31, 2021		December 31, 2020
Carrying amount		—		19,630
Nominal amount at maturity		—		25,780

Difference		—		(6,150	)

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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, 2021			December 31, 2020
Deposits in local currency:
Deposits on demand		18,029,136			12,454,024
Deposits at termination		254,319,473			242,397,664
Mutual installment		24,620			26,319
Deposits on notes payables		2,954,066			2,647,492
Deposits on CMA		92,360			110,413
Certificate of deposits		3,586,423			2,072,389
Other deposits		1,286,719			1,372,461

Sub-total		280,292,797			261,080,762

Deposits in foreign currencies:
Deposits in foreign currencies		37,643,900			30,408,762

Present value discount		(36,826	)		(12,245	)

Total		317,899,871			291,477,279

22.

BORROWINGS AND DEBENTURES

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


	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

- 140 -


	December 31, 2020
	Lenders	Interest rate (%)	Amount
Borrowings in local currency:
Borrowings from The BOK	The BOK	0.3		2,678,120
Borrowings from government funds	Small Enterprise And Market Service and others	0.0 ~ 5.0		2,155,129
Others	The Korea Development Bank and others	0.0 ~ 5.5		7,255,938

Sub-total				12,089,187

Borrowings in foreign currencies:
Borrowings in foreign currencies	JPMorgan Chase & Co. and others	(0.4) ~ 7.3		7,573,722
Bills sold	Others	0.0 ~ 0.9		8,924
Call money	Bank and others	(0.3) ~ 3.8		416,370
Bonds sold under repurchase agreements	Other financial institutions	(0.5) ~ 10.6		657,823
Present value discount				(560	)

Total				20,745,466

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


	December 31, 2021				December 31, 2020
	Interest rate (%)	Amount			Interest rate (%)	Amount
Face value of bond (*):
Ordinary bonds	0.7 ~ 3.6		37,004,942		0.8 ~ 4.5		29,623,445
Subordinated bonds	1.9 ~ 5.1		6,767,442		1.9 ~ 5.9		6,955,515
Other bonds	0.8 ~ 17.0		911,190		0.6 ~ 17.0		925,677

Sub-total			44,683,574				37,504,637

Discounts on bonds			(29,710	)			(25,279	)

Total			44,653,864				37,479,358

(*)

Included debentures under fair value hedge amounting to 2,366,724 million won and 2,767,208 million won as of December 31, 2021 and 2020 respectively. Also, debentures under cash flow hedge amounting to 819,298 million won and 857,531 million won are included as of December 31, 2021 and 2020 respectively.

- 141 -

23.

PROVISIONS

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


	December 31, 2021		December 31, 2020
Asset retirement obligation		80,777		68,402
Provisions for guarantees (*1)		74,866		89,592
Provisions for unused loan commitments		112,296		122,155
Other provisions (*2)		308,195		221,494

Total		576,134		501,643

(*1)

Provisions for guarantees includes provision for financial guarantee of 53,321 million won and 66,232 million won as of December 31, 2021 and 2020, 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, 2021
	Stage 1			Stage 2			Stage 3			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

(*)

Includes the impact from change of financial guarantee liability.


	For the year ended December 31, 2020
	Stage 1			Stage 2			Stage 3			Total
Beginning balance		50,801			26,303			15,382			92,486
Transfer to 12-month expected credit loss		81			(60	)		(21	)		—
Transfer to expected credit loss for the entire period		(396	)		1,639			(1,243	)		—
Transfer to credit-impaired financial assets		(12	)		(13	)		25			—
Net provision (reversal) of unused amount		(1,124	)		(11,124	)		(6,100	)		(18,348	)
Business combination		14,501			—			—			14,501
Others (*)		953			—			—			953

Ending balance		64,804			16,745			8,043			89,592

(*)

Includes the impact from change of financial guarantee liability.

- 142 -

Provisions for unused loan commitment


	For the year ended December 31, 2021
	Stage 1			Stage 2			Stage 3			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


	For the year ended December 31, 2020
	Stage 1			Stage 2			Stage 3			Total
Beginning balance		65,038			43,164			4,352			112,554
Transfer to 12-month expected credit loss		8,006			(7,500	)		(506	)		—
Transfer to expected credit loss for the entire period		(2,704	)		3,299			(595	)		—
Transfer to credit-impaired financial assets		(174	)		(186	)		360			—
Net provision (reversal) of unused amount		(6,653	)		16,949			(422	)		9,874
Business combination		7			—			—			7
Others		(280	)		—			—			(280	)

Ending balance		63,240			55,726			3,189			122,155

(3)	Changes in asset retirement obligation for the years ended December 31, 2021 and 2020, are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2021			2020
Beginning balance		68,402			66,485
Provisions provided		3,235			806
Provisions used		(5,066	)		(2,958	)
Reversal of provisions unused		(947	)		(106	)
Unwinding of discount		495			459
Business combination		—			219
Increase (decrease) of restoration expense, etc.		14,658			3,497

Ending balance		80,777			68,402

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, 2021, 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.

- 143 -

(4)	Changes in other provisions for the years ended December 31, 2021 and 2020, are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2021			2020
Beginning balance		221,494			172,455
Provisions provided		85,706			232,629
Provisions used		(10,375	)		(181,433	)
Reversal of provisions unused		(718	)		(2,345	)
Foreign currencies translation adjustments		11,957			606
Transfer		—			(344	)
Others		131			(74	)

Ending balance		308,195			221,494

(5)

Others

The Group has been offering Korean won settlement services for trade with Korea and Iran; however, the Group has stopped the services for trade in line with U.S. economic sanctions on September 23, 2019. The Group resumed the service humanitarian goods trade only since July 13, 2020. In connection with these services, the Group is currently being investigated by the U.S. government agencies including the U.S. prosecutors (United States Attorney’s Office and New York State Attorney General’s Office) and New York State Financial Supervisory Service as to whether the Group has violated United States laws by participating in prohibited transactions involving the following countries: Iran, Sudan, Syria and Cuba, which have been sanctioned by the U.S. In this regard, the Bureau of Foreign Assets Control concluded its investigation in December 2020 without taking any additional sanctions, but the investigation procedures of the U.S. Public Prosecutors’ Office and the New York State Financial Supervisory Service have yet to be completed.

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, 2021, the Group recognized the provisions for the required expenditure as the best estimate to fulfill its obligations as of December 31, 2021 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, 2021, the provision for this case is 114.9 billion won and the advance payment is 7.2 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, 2021, 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, 13.4 billion won, and 10.8 billion won, respectively. In addition, the provision for the expected fine related to incomplete sales of Heritage DLS is 700 million won.

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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, 2021			December 31, 2020
Present value of defined benefit obligation		1,618,098			1,610,680
Fair value of plan assets		(1,591,458	)		(1,564,101	)

Net defined benefit liabilities (*)		26,640			46,579

(*) Net defined benefit liability of 26,640 million won and 46,579 million won as of December 31, 2021 and 2020 is the subtracted amount of the net defined benefit asset of 21,346 million won and 5,658 million won from the net defined benefit liability of 47,986 million won and 52,237 million won.

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


		For the years ended December 31
		2021			2020
Beginning balance			1,610,680			1,442,859
Current service cost			178,416			174,509
Interest cost			39,814			34,653
Remeasurements	Financial assumption		(92,367	)		(20,838	)
	Demographic assumptions		(251	)		4,161
	Experience adjustments		(12,155	)		(4,481	)
Retirement benefit paid			(106,050	)		(55,864	)
Foreign currencies translation adjustments			165			(119	)
Business combination			—			34,001
Others			(154	)		1,799

Ending balance			1,618,098			1,610,680

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


	For the years ended December 31
	2021			2020
Beginning balance		1,564,101			1,352,971
Interest income		40,927			34,534
Remeasurements		(15,022	)		(7,666	)
Employer’s contributions		103,251			211,505
Retirement benefit paid		(99,523	)		(52,627	)
Business combination		—			27,599
Others		(2,276	)		(2,215	)

Ending balance		1,591,458			1,564,101

(4)	Plan assets consist of fixed deposits and others as of December 31, 2021 and 2020.


	December 31, 2021		December 31, 2020
Cash and due from banks		1,591,458		1,564,101

Meanwhile, Among plan assets, realized returns on plan assets amount to 25,905 million won and 26,868 million won for the years ended December 31, 2021 and 2020, respectively. The contribution expected to be paid in the next accounting year amounts to 162,374 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
	2021			2020
Current service cost		178,416			174,509
Net interest expense (income)		(1,113	)		119

Cost recognized in net income		177,303			174,628

Remeasurements (*)		(89,751	)		(13,492	)

Cost recognized in total comprehensive income		87,552			161,136

(*)

Amount before tax

Retirement benefits related to defined contribution plans recognized as expenses are 4,494 million won, and 3,827 million won for the years ended December 31, 2021 and 2020, respectively.

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


	December 31, 2021	December 31, 2020
Discount rate	2.40% ~ 3.49%	2.13% ~ 2.97%
Future wage growth rate	2.03% ~ 5.56%	2.05% ~ 7.00%
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 5.49 to a maximum 11.4 years.

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(7)	The sensitivity to actuarial assumptions used in the assessment of defined benefit obligation is as follows (Unit: Korean Won in millions):


		December 31, 2021			December 31, 2020
Discount rate	Increase by 1% point		(161,428	)		(165,754	)
	Decrease by 1% point		189,630			195,475
Future wage growth rate	Increase by 1% point		188,392			193,149
	Decrease by 1% point		(163,431	)		(167,037	)

25.

OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES

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


	December 31, 2021			December 31, 2020
Other financial liabilities:
Accounts payable		6,969,170			4,028,639
Accrued expenses		2,070,639			2,049,401
Borrowings from trust accounts		3,107,456			2,984,031
Agency business revenue		433,041			466,485
Foreign exchange payables		782,176			789,189
Domestic exchange settlement credits		6,708,220			180,251
Lease liabilities		343,213			407,431
Other miscellaneous financial liabilities		3,772,437			3,317,358
Present value discount		(15,322	)		(6,968	)

Sub-total		24,171,030			14,215,817

Other liabilities:
Unearned income		291,147			254,702
Other miscellaneous liabilities		265,706			219,111

Sub-total		556,853			473,813

Total		24,727,883			14,689,630

- 147 -

26.

DERIVATIVES

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


	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


	December 31, 2020
			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		184,413		—		—		—		—		—		—
Swaps		137,057,240		—		174,820		318,545		1,476		28		524,190
Purchase options		330,000		—		—		6,271		—		—		—
Written options		285,440		—		—		—		—		—		5,419
Currency:
Futures		2,546		—		—		—		—		—		—
Forwards		105,146,634		—		—		2,541,957		—		—		2,848,980
Swaps		87,249,320		—		—		3,325,135		63,265		—		2,415,610
Purchase options		1,147,877		—		—		59,329		—		—		—
Written options		1,632,048		—		—		—		—		—		23,271
Equity:
Futures		123,742		—		—		—		—		—		—
Forwards		11		—		—		—		—		—		—
Swaps		269,039		—		—		—		—		—		12,533
Purchase options		9,863,110		—		—		650,505		—		—		—
Written options		10,369,009		—		—		—		—		—		629,884

Total		353,660,429		—		174,820		6,901,742		64,741		28		6,459,887

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.

- 148 -

(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 1M LIBOR, USD 3M LIBOR, AUD 3M BBSW and 3M EURIBOR. The nominal amounts of hedging instruments related to 1M LIBOR, 3M LIBOR, 3M BBSW and 3M EURIBOR in the hedging relationships of the Group are USD 470,000,000, USD 1,850,000,000, AUD 150,000,000 and EUR 26,591,163 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 the December 31, 2021, the Group has applied fair value hedge on fixed interest rate foreign currency denominated debentures amounting to 2,366,724 million won and foreign currency borrowings amounting to 35,694 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.

- 149 -

Cash Flow Hedge

As of the December 31, 2021, the Group has applied cash flow hedge on local currency denominated debentures amounting to 49,977 million won and debentures on foreign currency amounting to 769,322 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 and ④ Mitigate the risks of cash flow fluctuation in variable interest rate foreign currency borrowings resulting from changes in market interest rates and designate it as a hedging instrument through entering into currency swap contracts and interest rate swap contracts.

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.

- 150 -

(3)	The nominal amounts of the hedging instrument are as follows (Unit: USD, AUD, EUR, SGD and Korean Won in millions):


	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


	December 31, 2020
	1 year or less		1 year to 5 years		More than 5 years		Total
Fair value hedge
Interest rate risk
Interest rate swap (USD)		1,000,000,000		1,000,000,000		300,000,000		2,300,000,000
Interest rate swap (AUD)		—		150,000,000		—		150,000,000
Cash flow hedge
Interest rate risk
Interest rate swap (KRW)		100,000		50,000		—		150,000
Foreign currencies translation risk and interest rate risk
Currency swap (USD)		130,000,000		470,000,000		—		600,000,000
Foreign currencies translation risk
Currency swap (SGD)		68,000,000		—		—		68,000,000

- 151 -

(4)	The average interest rate and average currency rate of the hedging instrument as of December 31, 2021 and 2020 are as follows:


		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, USD/KRW = 1,206.60
Foreign currencies translation risk
Currency swap (USD)		USD 1.50% receipt, KRW 1.57% paid, USD/KRW = 1,140.50


		December 31, 2020
		Average interest rate and average exchange rate
Fair value hedge
Interest rate risk
Interest rate swap (USD)		Fixed 4.22% receipt and Libor 3M+1.71% floating paid Fixed 5.88% receipt and Libor 6M+2.15% floating paid
Interest rate swap (AUD)		Fixed 0.84% receipt and BBSW 3M+0.72% paid
Cash flow hedge
Interest rate risk
Interest rate swap (KRW)		KRW 3Y CMS+0.40% receipt, 2.38% paid KRW CD+0.69% receipt, 2.06% paid KRW CD+0.33% receipt, 1.68% paid
Foreign currencies translation risk and interest rate risk
Currency swap (USD)		USD 3M Libor+0.80% receipt, KRW 1.45% paid, USD/KRW = 1,155 USD 1M Libor+0.67% receipt, KRW 1.14% paid, USD/KRW = 1,190 USD 1M Libor+0.69% receipt, KRW 1.02% paid, USD/KRW = 1,199
Foreign currencies translation risk
Currency swap (SGD)		SGD 1.91% receipt, KRW 1.98% paid, SGD/KRW = 827

- 152 -

(5)	The amounts related to items designated as hedging instruments are as follows (Unit: USD, AUD, EUR, SGD, and Korean Won in millions):

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

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

Derivative liabilities

(designated for hedging)

Interest rate swap

EUR 26,591,163

—

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

December 31, 2020

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

Assets

Liabilities

Fair value hedge

Interest rate risk

Interest rate swap

USD 2,300,000,000

174,820

Derivative assets

(designated for hedging)

57,221

Interest rate swap

AUD 150,000,000

Derivative liabilities

(designated for hedging)

Cash flow hedge

Interest rate risk

Interest rate swap

KRW 150,000

—

1,476

Derivative liabilities

(designated for hedging)

(196

)

Foreign currency translation risk and interest rate risk

Currency swap

USD 600,000,000

—

62,893

Derivative liabilities

(designated for hedging)

(69,319

)

Foreign currency translation risk

Currency swap

SGD 68,000,000

—

373

Derivative liabilities

(designated for hedging)

(4,699

)

- 153 -

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


	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


	December 31, 2020
	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		—		2,767,208		—		144,741		Debentures		(59,073	)		—
Cash flow hedge
Interest rate risk
Debentures		—		149,936		—		—		Debentures		188			(909	)
Foreign currencies translation risk and interest rate risk
Debentures		—		651,704		—		—		Debentures		61,823			(95	)
Foreign currencies translation risk
Debentures		—		55,891		—		—		Debentures		6,564			(268	)

(*) After tax amount

- 154 -

(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, 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)

	For the year ended December 31, 2020
		Hedge ineffectiveness recognized in profit or loss			Line item in the profit or loss that includes hedge ineffectiveness
Fair value hedge	Interest rate risk		(1,852	)	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, 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)

		For the year ended December 31, 2020
		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		(122	)		(74	)		—		Other net operating income (expense)		—		Other net operating income (expense)
	Foreign currencies translation risk and interest rate risk		(68,270	)		(1,049	)		5,893		Other net operating income (expense)		64,762		Other net operating income (expense)
	Foreign currencies translation risk		(3,677	)		(1,022	)		320		Other net operating income (expense)		5,393		Other net operating income (expense)

- 155 -

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
	2021			2020
Beginning balance		6,939			52,259
New transactions		49,523			22,901
Amounts recognized in losses		(27,351	)		(68,221	)

Ending balance		29,111			6,939

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, which is deferred and amortized to maturity using the effective interest method and reflected in profit and loss. The table above presents the difference yet to be realized as profit or losses.

28.

EQUITY

(1)	Details of equity as of December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


	December 31, 2021			December 31, 2020
Capital
Common stock capital		3,640,303			3,611,338
Hybrid securities		2,294,381			1,895,366
Capital surplus
Paid in capital in excess of par		643,544			608,348
Others		38,841			17,763

Sub-total		682,385			626,111

Capital adjustments
Treasury stocks		(3,819	)		—
Other adjustments (*1)		(1,747,242	)		(1,775,312	)

Sub-total		(1,751,061	)		(1,775,312	)

Accumulated other comprehensive income
Financial assets at FVTOCI		(162,522	)		(9,833	)
Changes in capital due to equity method		(138	)		(2,609	)
Loss from foreign business translation		(63,781	)		(298,363	)
Remeasurements of defined benefit plan		(195,944	)		(261,195	)
Loss on evaluation of cash flow hedge		5,553			(1,386	)
Capital related to noncurrent assets held for sale		279			1,226

Sub-total		(416,553	)		(572,160	)

Retained earnings (2) (3)		21,392,564			19,268,265
Non-controlling interest (*4)		3,008,176			3,672,237

Total		28,850,195			26,725,845

(*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 2,568,367 million Won and 2,547,547 million Won as of December 31, 2021 and 2020, respectively in accordance with the relevant article.

(*3)	The earned surplus reserve in retained earnings amounted to 122,370 million Won and 62,830 million Won as of December 31, 2021 and 2020 in accordance with the Article 53 of the Financial Holding Company Act.

(*4)

The hybrid securities issued by Woori Bank amounting to 2,555,166 million Won and 3,105,070 million Won as of December 31, 2021 and 2020, respectively, are recognized as non-controlling interests. 144,923 million Won and 162,362 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, 2021 and 2020, respectively.

- 156 -

(2)	The number of authorized shares and others of the Group are as follows:


	December 31, 2021		December 31, 2020
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		722,267,683 Shares
Capital stock		3,640,303 million Won		3,611,338 million won

(3)	The Parent company issued 5,792,866 new shares in the stock exchange process with the shareholders of Woori Financial Capital Co., Ltd, and the total number of issued shares changed from 722,267,683 shares as of December 31, 2020 to 728,060,549 shares as of December 31, 2021.

(4)	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, 2021			December 31, 2020
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			—
Securities in local currency	2021-10-14		—		3.60		200,000			—
Issuance cost							(5,619	)		(4,634	)

Total							2,294,381			1,895,366

The hybrid securities mentioned above do not have maturity date but are redeemable after 5 years from date of issuance.

- 157 -

(5)	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, 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.


	For the year ended December 31, 2020
	Beginning balance			Increase (decrease) (*)			Reclassification adjustments			Classified as held for sale			Income tax effect			Ending balance
Net gain (loss) on valuation of financial assets at FVTOCI		(71,914	)		115,167			(30,643	)		—			(22,443	)		(9,833	)
Changes in capital due to equity method		915			(3,171	)		—			(1,691	)		1,338			(2,609	)
Gain (loss) on foreign currency translation of foreign operations		(152,987	)		(152,486	)		—			—			7,110			(298,363	)
Remeasurement gain (loss) related to defined benefit plan		(270,977	)		13,492			—			—			(3,710	)		(261,195	)
Gain (loss) on valuation of derivatives designated as cash flow hedges		(5,692	)		4,568			—			—			(262	)		(1,386	)
Capital related to noncurrent assets held for sale		—			—			—			1,691			(465	)		1,226

Total		(500,655	)		(22,430	)		(30,643	)		—			(18,432	)		(572,160	)

(*)

The increase and decrease of financial asset valuation profit or loss at fair value through other comprehensive income is a change due to the period evaluation and the reclassification adjustments amounting to 2,664 million won are due to disposal of equity securities during the period.

- 158 -

(6)	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, 2021		December 31, 2020
Beginning balance		2,568,367		2,547,547
Planned provision of regulatory reserve (reversal) for credit loss		398,593		20,820

Ending balance		2,966,960		2,568,367

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
	2021			2020
Net income before regulatory reserve		2,807,371			1,515,249
Provision of regulatory reserve (reversal) for credit loss		398,593			20,820
Adjusted net income after the provision of regulatory reserve		2,408,778			1,494,429
Dividends to hybrid securities		(66,250	)		(48,915	)
Adjusted net income after regulatory reserve and dividends to hybrid securities		2,342,528			1,445,514
Adjusted EPS after regulatory reserve and the dividends to hybrid securities (Unit: Korean Won)		3,234			2,002

(7)	Treasury stock

Details of treasury stocks are as follows (Unit: Shares, Korean Won in millions):


	December 31, 2021				December 31, 2020
	Number of shares		Book value		Number of shares		Book value
Beginning balance		2		—		2		—
Acquisition		343,989		3,819		—		—
Disposal		—		—		—		—

Ending balance		343,991		3,819		2		—

- 159 -

29.

DIVIDENDS

(1)	Dividends per share and the total dividends for the fiscal year ending December 31, 2020 were 360 Won and 260,017 million Won, respectively, and the dividends were approved at the regular general shareholders’ meeting held on March 26, 2021 and were paid in April 2021.

(2)	On July 23, 2021, the Board of Directors decided to pay an interim dividend of 150 Won per share (total dividend of 108,340 million Won) with July 30, 2021 as the dividend base date, and were paid in August 2021.

(3)	A dividend in respect of the year ended December 31, 2021, of 750 won per share, amounting to a total dividend of 546,044 million won, is to be proposed to shareholders at the annual general meeting on March 25, 2022. These financial statements do not reflect 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
	2021		2020
Financial assets at FVTPL		45,803		48,612
Financial assets at FVTOCI		381,814		437,527
Financial assets at amortized cost:
Securities at amortized cost		324,920		382,988
Loans and other financial assets at amortized cost:
Interest on due from banks		46,600		53,586
Interest on loans		9,065,074		8,570,173
Interest of other receivables		30,538		30,967

Subtotal		9,142,212		8,654,726

Total		9,894,749		9,523,853

(2)	Details of interest expense recognized are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2021		2020
Interest on deposits due to customers		1,906,858		2,486,523
Interest on borrowings		219,994		269,985
Interest on debentures		727,093		722,551
Other interest expense		47,647		36,964
Interest on lease liabilities		7,436		9,318

Total		2,909,028		3,525,341

- 160 -

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
	2021		2020
Fees and commission received for brokerage		182,794		162,653
Fees and commission received related to credit		197,125		195,391
Fees and commission received for electronic finance		131,941		125,107
Fees and commission received on foreign exchange handling		56,210		55,984
Fees and commission received on foreign exchange		73,894		69,017
Fees and commission received for guarantee		76,428		74,647
Fees and commission received on credit card		573,048		507,852
Fees and commission received on securities business		100,991		79,606
Fees and commission from trust management		216,203		160,564
Fees and commission received on credit information		10,220		13,254
Fees and commission received related to lease		374,900		84,164
Other fees		177,951		165,777

Total		2,171,705		1,694,016

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


	For the years ended December 31
	2021		2020
Fees and commissions paid		261,734		246,824
Credit card commission		425,796		424,316
Brokerage commission		1,605		551
Others		11,795		8,286

Total		700,930		679,977

32.

DIVIDEND INCOME

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


	For the years ended December 31
	2021		2020
Dividend income related to financial assets at FVTPL		284,683		120,158
Dividend income related to financial assets at FVTOCI		24,528		18,385

Total		309,211		138,543

(2)	Details of dividends related to financial assets at FVTOCI are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2021		2020
Dividend income recognized from assets held:
Equity securities		24,528		18,385

- 161 -

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
	2021		2020
Gain on financial instruments at fair value through profit or loss measured at fair value		325,649		422,374
Gain (loss) on financial instruments at fair value through profit or loss designated as upon initial recognition		102		(665	)

Total		325,751		421,709

(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
			2021			2020
Financial assets at FVTPL	Securities	Gain on transactions and valuation		249,803			142,551
		Loss on transactions and valuation		(197,172	)		(122,506	)

		Sub-total		52,631			20,045

	Loans	Gain on transactions and valuation		24,674			15,299
		Loss on transactions and valuation		(6,770	)		(8,087	)

		Sub-total		17,904			7,212

	Other financial assets	Gain on transactions and valuation		17,034			10,902
		Loss on transactions and valuation		(12,370	)		(10,257	)

		Sub-total		4,664			645

	Sub-total			75,199			27,902

Derivatives (Held for trading)	Interest rates derivatives	Gain on transactions and valuation		2,020,004			1,727,585
		Loss on transactions and valuation		(1,746,752	)		(1,998,824	)

		Sub-total		273,252			(271,239	)

	Currency derivatives	Gain on transactions and valuation		9,685,798			12,562,354
		Loss on transactions and valuation		(9,715,260	)		(11,906,353	)

		Sub-total		(29,462	)		656,001

	Equity derivatives	Gain on transactions and valuation		1,754,671			1,835,497
		Loss on transactions and valuation		(1,744,294	)		(1,825,372	)

		Sub-total		10,377			10,125

	Other derivatives	Gain on transactions and valuation		64			—
		Loss on transactions and valuation		(3,781	)		(415	)

		Sub-total		(3,717	)		(415	)

	Sub-total			250,450			394,472

Net, total				325,649			422,374

(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
	2021		2020
Gain (loss) on equity-linked securities		102		(665	)

- 162 -

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
	2021			2020
Gain on redemption of securities		(23	)		(57	)
Gain on transactions of securities		32,647			24,195

Total		32,624			24,138

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
	2021			2020
Impairment loss due to credit loss on financial assets measured at FVTOCI		(4,909	)		(1,529	)
Reversal of (provision for) impairment loss due to credit loss on securities at amortized cost		(664	)		934
Provision for impairment loss due to credit loss on loan and other financial assets at amortized cost		(551,957	)		(792,250	)
Reversal of provision on guarantee		10,701			18,348
Reversal of (provision for) unused loan commitment		9,991			(9,874	)

Total		(536,838	)		(784,371	)

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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
			2021		2020
Employee benefits	Short-term employee benefits	Salaries		1,775,018		1,638,341
	Short-term employee benefits	Employee fringe benefits		545,534		506,048
	Share based payment			17,774		7,495
	Retirement benefit service costs			181,797		178,455
	Termination			180,872		202,259

	Subtotal			2,700,995		2,532,598

Depreciation and amortization				524,154		520,969
Other general and administrative expenses	Rent			83,879		78,707
	Taxes and public dues			135,015		129,904
	Service charges			231,852		244,825
	Computer and IT related			117,875		108,810
	Telephone and communication			79,145		72,711
	Operating promotion			44,248		45,891
	Advertising			101,384		94,880
	Printing			6,449		6,954
	Traveling			7,449		7,263
	Supplies			7,642		12,127
	Insurance premium			10,692		10,805
	Reimbursement			13,483		16,500
	Maintenance			20,808		18,367
	Water, light, and heating			14,520		14,993
	Vehicle maintenance			11,590		10,225
	Others			36,231		29,652

	Sub-total			922,262		902,614

Total				4,147,411		3,956,181

(2)	Details of other operating income recognized are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2021		2020
Gain on transactions of foreign exchange		562,935		758,347
Gain related to derivatives (Designated for hedging)		61,271		67,395
Gain on fair value hedged items		106,253		9,646
Others		172,044		63,702

Total		902,503		899,090

- 164 -

(3)	Details of other operating expenses recognized are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2021		2020
Losses on transactions of foreign exchange		450,698		679,350
KDIC deposit insurance premium		406,276		371,054
Contribution to miscellaneous funds		367,961		327,911
Losses related to derivatives (Designated for hedging)		93,084		82,746
Losses on fair value hedged items		1,947		68,508
Others (*)		469,938		189,959

Total		1,789,904		1,719,528

(*)

Other expense includes 13,963 million Won and 11,890 million Won for intangible asset amortization cost and 250,971 million Won and 52,504 million Won for lease depreciation cost for the years ended December 31, 2021 and 2020, respectively.

- 165 -

(4)	Share-based payment

Details of performance condition share-based payment granted to executives as of December 31, 2021 and 2020 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)		12,527 Won
Valuation method		Black-Scholes Model
Expected dividend rate		4.28%
Expected maturity date		1 years
Number of shares remaining	As of December 31, 2021	602,474 shares
Number of shares remaining	As of December 31, 2020	602,474 shares
Number of shares granted (*2)	As of December 31, 2021	602,474 shares
Number of shares granted (*2)	As of December 31, 2020	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)		12,003 Won
Valuation method		Black-Scholes Model
Expected dividend rate		4.28%
Expected maturity date		2 years
Number of shares remaining	As of December 31, 2021	944,343 shares
	As of December 31, 2020	944,343 shares
Number of shares granted (*2)	As of December 31, 2021	944,343 shares
	As of December 31, 2020	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)		11,501 Won
Valuation method		Black-Scholes Model
Expected dividend rate		4.28%
Expected maturity date		3 years
Number of shares remaining	As of December 31, 2021	1,105,515 shares
	As of December 31, 2020	—
Number of shares granted (*2)	As of December 31, 2021	1,105,515 shares
	As of December 31, 2020	—

(*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, 2021 and 2020, the book value of the liabilities related to the performance condition share-based payments recognized by the Group amounts to 31,597 million won and 13,823 million won, respectively.

- 166 -

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
	2021			2020
Gains on valuation of investments in joint ventures and associates		80,268			125,602
Reversal of impairment losses of investments in joint ventures and associates		1,744			—
Losses on valuation of investments in joint ventures and associates		(7,405	)		(23,283	)
Impairment losses of investments in joint ventures and associates		(12,411	)		(1,242	)

Total		62,196			101,077

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


	For the years ended December 31
	2021			2020
Other non-operating incomes		188,129			133,195
Other non-operating expenses		(160,833	)		(313,415	)

Total		27,296			(180,220	)

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


	For the years ended December 31
	2021		2020
Rental fee income		15,056		15,190
Gains on disposal of investments in joint ventures and associates		70,834		3,470
Gains on disposal of premises and equipment, intangible assets and other assets		51,083		9,715
Reversal of impairment loss of premises and equipment, intangible assets and other assets		166		172
Others (*)		50,990		104,648

Total		188,129		133,195

(*)

Included 67,427 million won of profit from bargain purchase for the year ended December 31, 2020.

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


	For the years ended December 31
	2021		2020
Depreciation on investment properties		2,809		2,689
Operating expenses on investment properties		1,174		762
Losses on disposal of investments in joint ventures and associates		174		—
Losses on disposal of premises and equipment, intangible assets and other assets		3,354		2,717
Impairment losses of premises and equipment, intangible assets and other assets		656		8,763
Donation		39,335		44,504
Others (*)		113,331		253,980

Total		160,833		313,415

(*)

Included 75,921 million won and 224,427 million won of other special losses related to other provisions for the years ended December 31, 2021 and 2020.

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38.

INCOME TAX EXPENSE

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


	For the years ended December 31
	2021		2020
Current tax expense:
Current tax expense with respect to the current period		884,843		501,223
Adjustments recognized in the current period in relation to the tax expense of prior periods		2,074		4,914

Sub-total		886,917		506,137

Deferred tax expense
Change in deferred tax assets (liabilities) due to temporary differences		32,776		(1,702	)
Income tax expense(income) directly attributable to equity		22,177		(18,433	)

Sub-total		54,953		(20,135	)

Income tax expense		941,870		486,002

(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
	2021			2020
Net income before income tax expense		3,749,241			2,001,251
Tax calculated at statutory tax rate (*)		960,095			514,456
Adjustments:
Effect of income that is exempt from taxation		(41,335	)		(42,440	)
Effect of expenses that are not deductible in determining taxable income		18,933			19,451
Adjustments recognized in the current period in relation to the current tax of prior periods		3,078			4,914
Others		1,099			(10,379	)

Sub-total		(18,225	)		(28,454	)

Income tax expense		941,870			486,002

Effective tax rate		25.10	%		24.3	%

(*)

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

- 168 -

(3)	Changes in cumulative temporary differences for the years ended December 31, 2021 and 2020, are as follows (Unit: Korean Won in millions):


	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.


	For the year ended December 31, 2020
	Beginning balance			Business combination			Recognized as income (expense)			Recognized as other comprehensive income (expense)			Ending Balance
Gain (loss) on financial assets		278,352			2,243			19,121			(23,221	)		276,495
Gain on valuation using the equity method of accounting		10,713			—			21,499			1,385			33,597
Gain (loss) on valuation of derivatives		(75,412	)		675			(67,423	)		(192	)		(142,352	)
Accrued income		(66,384	)		(4,392	)		4,548			—			(66,228	)
Provision for loan losses		(52,711	)		2,201			4,015			—			(46,495	)
Loan and receivables written off		6,893			—			1,328			—			8,221
Loan origination costs and fees		(162,442	)		(14,131	)		6,377			—			(170,196	)
Defined benefit liability		396,302			7,923			41,186			(3,404	)		442,007
Deposits with employee retirement insurance trust		(381,776	)		(6,369	)		(36,858	)		97			(424,906	)
Provision for guarantee		7,915			3,441			(1,871	)		—			9,485
Other provision		88,456			—			(3,283	)		—			85,173
Others (*)		(144,684	)		(12,678	)		31,494			6,904			(118,964	)

Net deferred tax assets		(94,778	)		(21,087	)		20,133			(18,431	)		(114,163	)

(*)

Among the deferred tax assets and liabilities classified as ‘Others,’ the deferred tax asset arising from unused tax losses amounts to 24,059 million won.

- 169 -

(4)	Unrealizable temporary differences are as follows (Unit: Korean Won in millions):


	December 31, 2021			December 31, 2020
Deductible temporary differences		303,067			327,139
Tax loss carry forward		63,908			97,898
Taxable temporary differences		(8,025,672	)		(10,409,344	)

Total		(7,658,697	)		(9,984,307	)

No deferred income tax asset has been recognized for the deductible temporary difference of 264,000 million Won associated with investments in subsidiaries as of December 31, 2021, because it is not probable that the temporary differences will be reversed in the foreseeable future. 39,067 million won associated with others, respectively, as of December 31, 2021, 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 8,025,673 million won associated with investment in subsidiaries as of December 31, 2021, 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, 2021, 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		14,688		33,464		12,199		3,557

(5)	Details of accumulated deferred tax charged directly to other equity are as follows (Unit: Korean Won in millions):


	December 31, 2021			December 31, 2020
Gain on valuation of financial assets at FVTOCI		58,677			4,628
Gain on valuation of equity method investments		2,078			3,133
Gain on foreign currency translation of foreign operations		5,689			10,883
Remeasurements of the net defined benefit liability		74,790			101,128
Gain on derivatives designated as cash flow hedge		(843	)		556

Total		140,391			120,328

(6)	Current tax assets and liabilities are as follows (Unit: Korean Won in millions):


	December 31, 2021		December 31, 2020
Current tax assets		22,598		75,655
Current tax liabilities		584,491		370,718

- 170 -

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
	2021			2020
Net income attributable to common shareholders		2,587,936			1,307,266
Dividends to hybrid securities		(66,250	)		(48,915	)
Net income attributable to common shareholders		2,521,686			1,258,351
Weighted average number of common shares outstanding (Unit: million shares)		724			722
Basic EPS (Unit: Korean Won)		3,481			1,742

(2)	The weighted average number of common shares outstanding is as follows (Unit: number of shares, days):


	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


	For the year ended December 31, 2020
	Period		Number of shares			Dates (Unit: Day)		Accumulated number of shares outstanding during period
Common shares issued at the beginning of the period		2020-01-01 ~ 2020-12-31		722,267,683			366		264,349,971,978
Treasury stock		2020-01-01 ~ 2020-12-31		(2	)		366		(732	)

Sub-total (①)									264,349,971,246

Weighted average number of common shares outstanding (②=(①/366))									722,267,681

Diluted EPS is equal to basic EPS because there is no dilution effect for the years ended December 31, 2021 and 2020.

- 171 -

40.

CONTINGENT LIABILITIES AND COMMITMENTS

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


	December 31, 2021		December 31, 2020
Confirmed guarantees
Guarantee for loans		38,897		103,229
Acceptances		622,758		602,014
Guarantees in acceptances of imported goods		111,195		78,395
Other confirmed guarantees		7,215,557		6,491,608

Sub-total		7,988,407		7,275,246

Unconfirmed guarantees
Local letters of credit		243,072		187,146
Letters of credit		3,186,513		3,025,923
Other unconfirmed guarantees		778,088		403,652

Sub-total		4,207,673		3,616,721

Commercial paper purchase commitments and others		791,729		917,489

Total		12,987,809		11,809,456

(*)

Includes financial guarantees of 3,960,383 million won and 4,163,382 million won, as of December 31, 2021 and December 31, 2020, respectively.

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


	December 31, 2021		December 31, 2020
Loan commitments		114,414,462		112,088,680
Other commitments (*)		5,652,557		7,827,774

(*)

As of December 31, 2021 and 2020, the amount of unsecured bills (purchase note sales) and discounts on electronic short-term bond sales (purchase) are 2,225,226 million won and 2,894,688 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 475 cases (litigation value of 578,505 million Won) and 460 cases (litigation value of 413,744 million Won) as of December 31, 2021 and 2020 respectively, and provisions for litigations are 24,823 million Won and 24,873 million Won.

- 172 -

(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 is planning to acquire the interest of the second sales agreement after a certain period. In regard to this acquisition, the Group recognized 121,420 million won as other financial liabilities for the second sales agreement.

As of December 31, 2021, Woori Asset Trust Co., Ltd., a subsidiary, has agreed to carry out construction completion obligations for 96 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, 2021, the total PF loan amount of PF loan institutions invested in the project of the Land Trust responsible for Construction and Management is 3,269,955 million Won. Although additional losses may occur in relation to the construction completion obligations, the financial statements as of December 31, 2021 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.

- 173 -

41.

RELATED PARTY TRANSACTIONS

Related parties of the Group as of December 31, 2021 and 2020, and assets and liabilities recognized, guarantees and commitments, major transactions with related parties and compensation to key management for the years ended December 31, 2021 and 2020 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, 2021			December 31, 2020
Associates	W Service Networks Co., Ltd.	Loans		20			21
		Deposits due to customers		2,832			2,183
		Accrued expenses		6			6
		Other liabilities		425			459
	Korea Credit Bureau Co., Ltd.	Loans		2			1
		Deposits due to customers		1,557			2,311
		Other liabilities		—			5
	Korea Finance Security Co., Ltd.	Loans		3,425			3,440
		Loss allowance		(6	)		(6	)
		Deposits due to customers		1,887			1,927
		Other liabilities		2			1
	Chin Hung International Inc.	Loans		—			257
		Loss allowance		—			(3	)
		Deposits due to customers		—			8,715
		Other liabilities		—			171
	LOTTE CARD Co. Ltd.	Loans		3,750			7,500
		Loss allowance		(39	)		(77	)
		Other assets		10			12
		Deposits due to customers		13,482			2,697
		Other liabilities		91			113
	K BANK Co., Ltd.	Loans		99			104
		Account receivables		29			26
		Other assets		—			3,835
		Other liabilities		84,935			808
	Well to Sea No.3 Private Equity Fund	Deposits due to customers		—			4,997
	Others (*1)	Loans		73,940			44,036
		Loss allowance		(124	)		(126	)
		Other assets		739			651
		Deposits due to customers		1,063			5,831
		Other liabilities		3			5

(*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, 2021.

- 174 -

(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	2021			2020
Associates	W Service Network Co., Ltd.	Other income		30			32
		Interest expenses		7			13
		Fees expenses		612			525
		Reversal of impairment losses due to credit loss		—			(4	)
		Other expenses		1,878			2,174
	Korea Credit Bureau Co., Ltd.	Interest expenses		4			5
		Fees expenses		3,503			3,155
		Other expenses		68			—
	Korea Finance Security Co., Ltd.	Interest income		80			70
		Interest expenses		2			3
		Provision of impairment losses due to credit loss		1			3
		Other expenses		92			100
	Chin Hung International Inc	Interest expenses		—			19
		Reversal of impairment losses due to credit loss		—			(145	)
	LOTTE CARD Co., Ltd.	Interest income		196			311
		Fees income		10,248			2,748
		Interest expenses		462			68
		Provision(Reversal) of impairment losses due to credit loss		(59	)		171
	K BANK Co., Ltd.	Fees income		1,952			1,763
		Fees expenses		636			—
	Well to Sea No.3 Private Equity Fund	Interest income		—			1,883
		Interest expenses		—			5
		Reversal of allowance for credit loss		—			(55	)
	Others (*1)	Interest income		679			—
		Fees income		5,546			2,677
		Dividends income		—			52
		Other income		—			16
		Interest expenses		17			28
		Reversal of impairment losses due to credit loss		(2	)		—

(*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, 2021.

- 175 -

(3)	Major loan transactions with related parties for the years ended December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


		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.


		For the year ended December 31, 2020
Related parties		Beginning balance		Loan		Collection		Ending balance (*)
Associates	W Service Network Co., Ltd.		23		337		339		21
	Korea Credit Bureau Co., Ltd.		3		17		19		1
	Korea Finance Security Co., Ltd.		1,860		2,133		553		3,440
	LOTTE CARD Co., Ltd.		7,500		—		—		7,500
	K BANK Co., Ltd.		141		1,942		1,979		104
	Well to Sea No. 3 Private Equity Fund		4,490		—		4,490		—

(*)

Payments that occurred for business reasons among related parties are excluded and net increase or decrease was used for limited credit loan.

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(4)	Details of changes in major deposits due to customers with related parties for the year December 31, 2021 and 2020 are as follows (Unit: Korean Won in millions):


		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.


		For the year ended December 31, 2020
Related parties		Beginning balance		Increase		Decrease		Ending balance (*)
Associates	W Service Networks Co., Ltd		1,180		1,180		1,180		1,180
	Chin Hung International Inc		400		—		400		—
	Partner One Value Up I Private Equity Fund		1,150		1,737		2,024		863
	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, 2021 and 2020.

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


Warrantee	December 31, 2021		December 31, 2020		Warranty
Korea Finance Security Co., Ltd.		835		820	Unused loan commitment
Korea Credit Bureau Co., Ltd.		33		34	Unused loan commitment
W Service Network Co., Ltd.		180		179	Unused loan commitment
Chin Hung International Inc.		—		16,167	Unused loan commitment
K BANK Co., Ltd.		201		196	Unused loan commitment
LOTTE CARD Co. Ltd.		500,000		500,000	Unused loan commitment

As of December 31, 2021 and 2020, the recognized payment guarantee provisions are 93 million won and 284 million won, respectively, in relation to the guarantees provided to the related parties above.

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(7)	Amount of commitments with the related parties


Warrantee	December 31, 2021		December 31, 2020		Warranty
Together-Korea Government Private Pool Private Securities Investment Trust No.3		—		990,000	Securities purchase commitment
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		4,664		9,704	Securities purchase commitment
WooriG Senior Loan General Type Private Investment Trust No.1		14,284		53,041	Securities purchase commitment
Woori Seoul Beltway Private Special Asset Fund No.1		39,458		41,393	Securities purchase commitment
Woori-Shinyoung Growth-Cap Private Equity Fund I		—		12,799	Securities purchase commitment
Woori-Q Corporate Restructuring Private Equity Fund		11,109		36,355	Securities purchase commitment
Union Technology Finance Investment Association		2,250		10,500	Securities purchase commitment
Genesis Eco No.1 Private Equity Fund		195		—	Securities purchase commitment
Genesis Environmental Energy Company 1st Private Equity Fund		916		916	Securities purchase commitment
JC Assurance No.2 Private Equity Fund		1,351		1,650	Securities purchase commitment
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		425		550	Securities purchase commitment
PCC-Woori LP Secondary Fund		—		2,525	Securities purchase commitment
WooriG Oncorp Corporate support of Major Industry General Type Private Investment Trust (Type 2)		669		—	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, 2021 are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2021
The same parent company and its associates	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)


	For the year ended December 31, 2020
The same parent company and its associates	Investment and others		Recovery and others
WooriG Public Offering stock 10 securities Investment Trust [Bond mixed] C(F)		1,000		—
WooriG IGIS Securities Investment Trust [Bond] C(F)		1,300		—

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


	For the years ended December 31
	2021		2020
Short-term employee salaries		20,742		22,778
Retirement benefit service costs		815		910
Share-based compensation		6,970		3,519

Total		28,527		27,207

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 3,821 million won and 3,888 million won, as of December 31, 2021 and 2020 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 24,861 million won and 16,915 million won, respectively, as of December 31, 2021 and 2020,

42.

TRUST ACCOUNTS

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


	Total assets				Operating income
	December 31, 2021		December 31, 2020		For the years ended December 31
	December 31, 2021		December 31, 2020		2021		2020
Trust accounts		69,472,846		64,317,167		876,800		886,210

(2)	Receivables and payables between the Woori Bank and trust accounts are as follows (Unit: Korean Won in millions):


	December 31, 2021		December 31, 2020
Receivables:
Trust fees receivables		35,448		33,761

Payables:
Deposits due to customers		234,136		353,598
Borrowings from trust accounts		1,621,209		1,639,869

Total		1,855,345		1,993,467

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


	For the years ended December 31
	2021		2020
Revenue:
Trust fees		117,459		86,196
Termination fees		10,599		1,430

Total		128,058		87,626

Expense:
Interest expenses on deposits due to customers		503		1,502
Interest expenses on borrowings from trust accounts		11,391		16,025

Total		11,894		17,527

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(4)	Principal guaranteed trusts and principal and interest guaranteed trusts are as follows;

The carrying value of principal guaranteed trusts and principal and interest guaranteed trusts that Woori Bank provides are as follows (Unit: Korean Won in millions):


	December 31, 2021		December 31, 2020
Partial principal guaranteed trusts
Personal trust		8,932		9,179
Corporate trust		627		625
Deposit purpose		1,558		1,596

Sub-total		11,117		11,400

Principal guaranteed trusts
Old-age pension trusts		3,004		3,112
Personal pension trusts		486,203		505,762
Pension trusts		749,317		813,323
Retirement trusts		28,354		29,528
New personal pension trusts		7,282		7,671
New old-age pension trusts		1,076		1,297

Sub-total		1,275,236		1,360,693

Principal and interest guaranteed trusts
Development trusts		19		19
Unspecified money trusts		348		349

Sub-total		367		368

Total		1,286,720		1,372,461

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, 2021		December 31, 2020
Liabilities for the account (subsidy for Trust account adjustment)		2		16

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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, 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


	December 31, 2020
	Total investment in lease		Net investment in lease
Within one year		24,649		23,957
After one year but within two years		48,781		45,575
After two years but within three years		132,894		120,414
After three years but within four years		171,137		151,756
After four years but within five years		277,282		244,481
After five years		16		12

Total		654,759		586,195

②

The unrealized interest income of the finance lease is as follows. (Unit: Korean Won in millions):


	December 31, 2021		December 31, 2020
Total investment in lease		1,298,516		654,759
Net investment in lease		1,173,565		586,195
Present value of minimum lease payments		1,173,565		586,133
Present value of unguaranteed residual value		—		62

Unearned interest income		124,951		68,564

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Operating lease

①

The details of operating lease assets are as follows: (Unit: Korean Won in millions):


	December 31, 2021			December 31, 2020
Prepaid lease assets		4,579			199
Operating lease assets
Acquisition cost		2,299,968			1,506,957
Accumulated depreciation		(521,660	)		(390,981	)
Net carrying value		1,778,308			1,115,976

Total		1,782,887			1,116,175

②

The details of changes in operating lease assets as of December 31, 2021 are as follows and there is no details of changes in operating lease assets as of December 31, 2020 (Unit: Korean Won in millions):


	December 31, 2021			December 31, 2020
Beginning balance		1,116,175			—
Acquisition		984,093			118,256
Disposal		(93,138	)		(21,963	)
Depreciation		(250,971	)		(52,504	)
Business combination		—			1,071,111
Others		22,149			1,275

Ending balance		1,778,308			1,116,175

③

The future lease payments to be received under the lease contracts are as follows (Unit: Korean Won in millions):


	December 31, 2021		December 31, 2020
Within one year		377,153		240,005
After one year but within two years		347,539		223,074
After two years but within three years		262,176		156,859
After three years but within four years		170,391		80,174
After four years but within five years		79,555		24,992

Total		1,236,814		725,104

④

There is no adjusted lease payments recognized as profit or loss for the years ended December 31, 2021 and 2020.

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(2)

Lessee

The future lease payments under the lease contracts are as follows (Unit: Korean Won in millions):


	December 31, 2021		December 31, 2020
Lease payments
Within one year		151,259		173,885
After one year but within five years		155,707		200,844
After five years		38,275		34,787

Total		345,241		409,516

Total cash outflows from lease are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2021		2020
Total cash outflows from lease		180,884		207,305

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
	2021		2020
Lease payments for short-term leases		1,598		1,760
Lease payments for which the underlying asset is of low value		1,488		751

Total		3,086		2,511

(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 35,717 million Won, to reflect changes in lease payments arising from the rent concession.

44.

EVENTS AFTER THE REPORTING PERIOD

(1)	On January 7, 2022, the Parent company established Woori Financial F&I Inc. (100% of ownership, 200 billion Won in stock payments) which is an investment company for non-performing loans (NPL) and restructuring companies and included it as a subsidiary.

(2)

The Russia – Ukraine conflict has been escalated in February 2022, Russia is imposed to the international sanctions. As a result of these sanctions, the lack of liquidity in the 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, a decrease in the profit.

As of December 31, 2021, 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.

- 183 -