Exhibit 99.1
WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
AS OF AND FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED
SEPTEMBER 30, 2020 AND 2019
WOORI FINANCIAL GROUP INC.
Page(s) | ||||
Report on Review of Consolidated Interim Financial Statements |
1-2 | |||
Consolidated Interim Financial Statements |
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Consolidated Interim Statements of Financial Position |
4 | |||
Consolidated Interim Statements of Comprehensive Income |
5-6 | |||
Consolidated Interim Statements of Changes in Equity |
7 | |||
Consolidated Interim Statements of Cash Flows |
8-9 | |||
Notes to the Consolidated Interim Financial Statements |
10-115 |
Report on Review of Consolidated Interim Financial Statements
English Translation of a Report Originally Issued in Korean
To the Shareholders and the Board of Directors of Woori Financial Group Inc.
Reviewed Financial Statements
We have reviewed the accompanying consolidated interim financial statements of Woori Financial Group Inc. and its subsidiaries (collectively referred to as the Group). These financial statements consist of the consolidated interim statement of financial position of the Group as at September 30, 2020 and the related consolidated interim statements of comprehensive income for the three-month and nine-month periods ended September 30, 2020, and consolidated interim statements of changes in equity and cash flows for the nine-month period ended September 30, 2020, and a summary of significant accounting policies and other explanatory notes, expressed in Korean won.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated interim financial statements in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS) 1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of consolidated interim financial statements that are free from material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to issue a report on these consolidated interim financial statements based on our review.
We conducted our review in accordance with quarterly or semi-annual review standards established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe the accompanying consolidated interim financial statements are not presented fairly, in all material respects, in accordance with Korean IFRS 1034 Interim Financial Reporting.
- 1 -
Emphasis of Matters
Without qualifying our conclusion, we draw attention to Note 3 of the financial statements, which indicates that the outbreak of COVID-19 in 2020 may have a negative impact on the Groups financial condition and results of operations.
Other Matters
The consolidated interim financial statements of comprehensive income for the three-month and nine-month periods ended September 30, 2019, and consolidated interim statements of changes in equity and cash flows for the nine-month period ended September 30, 2019, presented herein for comparative purposes, were reviewed by Deloitte Anjin LLC whose report dated November 14, 2019. Based on their review, nothing has come to their attention that causes them to believe the accompanying financial statements do not present fairly, in all material respects, in accordance with Korean IFRS 1034 Interim Financial Reporting.
The consolidated financial statements of the Group for the year ended December 31, 2019, were audited by Deloitte Anjin LLC who expressed an unqualified opinion on those statements, not presented herein, on March 16, 2020. The consolidated statement of financial position as at December 31, 2019, presented herein for comparative purposes, is consistent, in all material respects, with the above audited statement of financial position as at December 31, 2019.
/s/ Samil PricewaterhouseCoopers
November 13, 2020
Notice to Readers
This report is effective as of November 13, 2020 the review report date. Certain subsequent events or circumstances may have occurred between the review report date and the time the review report is read. Such events or circumstances could significantly affect the consolidated interim financial statements and may result in modifications to the review report.
- 2 -
WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
AS OF AND FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED
SEPTEMBER 30, 2020 AND 2019
The accompanying consolidated interim financial statements including
all footnote disclosures were prepared by, and are the responsibility of, the management of Woori Financial
Group Inc.
Tae Seung Sohn
President and Chief Executive Officer
Main Office Address: (Address) 51, Sogong-ro, Jung-gu, Seoul
(Phone Number) 02-2125-2000
- 3 -
WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
AS OF SEPTEMBER 30, 2020 (UNAUDITED) AND DECEMBER 31, 2019
September 30, 2020 |
December 31, 2019 |
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(Korean Won in millions) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents (Note 6) |
8,814,244 | 6,392,566 | ||||||
Financial assets at fair value through profit or loss (FVTPL) (Notes 4, 7, 11, 12, 18 and 26) |
10,565,822 | 8,069,144 | ||||||
Financial assets at fair value through other comprehensive income (FVTOCI) (Notes 4, 8, 11, 12, and 18) |
29,644,347 | 27,730,531 | ||||||
Securities at amortized cost (Notes 4, 9, 11, 12 and 18) |
17,889,922 | 20,320,539 | ||||||
Loans and other financial assets at amortized cost (Notes 4, 10, 11, 12, 18 and 41) |
307,778,061 | 293,717,693 | ||||||
Investments in joint ventures and associates (Note 13) |
1,076,855 | 806,360 | ||||||
Investment properties (Note 14) |
311,344 | 280,239 | ||||||
Premises and equipment (Notes 15 and 18) |
3,278,633 | 3,364,716 | ||||||
Intangible assets (Note 16) |
799,803 | 844,110 | ||||||
Assets held for distribution (sale) (Note 17) |
59,899 | 10,556 | ||||||
Net defined benefit asset (Note 24) |
| 2,582 | ||||||
Current tax assets |
74,130 | 47,367 | ||||||
Deferred tax assets |
36,860 | 39,544 | ||||||
Derivative assets (Designated for hedging) (Notes 4,11,12 and 26) |
228,580 | 121,131 | ||||||
Other assets (Notes 19 and 41) |
280,411 | 233,646 | ||||||
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Total assets |
380,838,911 | 361,980,724 | ||||||
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LIABILITIES | ||||||||
Financial liabilities at fair value through profit or loss (FVTPL) (Notes 4, 11, 12, 20 and 26) |
3,817,831 | 2,958,302 | ||||||
Deposits due to customers (Notes 4,11,21 and 41) |
278,588,976 | 264,685,578 | ||||||
Borrowings (Notes 4, 11, 12 and 22) |
22,768,493 | 18,998,920 | ||||||
Debentures (Notes 4, 11 and 22) |
29,964,791 | 30,858,055 | ||||||
Provisions (Notes 23, 40 and 41) |
463,198 | 443,980 | ||||||
Net defined benefit liability (Note 24) |
186,044 | 92,470 | ||||||
Current tax liabilities |
129,537 | 182,690 | ||||||
Deferred tax liabilities |
286,705 | 134,322 | ||||||
Derivative liabilities (Designated for hedging) (Notes 4,11,12 and 26) |
23,039 | 6,837 | ||||||
Other financial liabilities (Notes 4,11,12, 25 and 41) |
17,941,940 | 17,706,767 | ||||||
Other liabilities (Notes 25 and 41) |
459,607 | 420,471 | ||||||
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Total liabilities |
354,630,161 | 336,488,392 | ||||||
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EQUITY | ||||||||
Owners equity (Note 28) |
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Capital stock |
3,611,338 | 3,611,338 | ||||||
Hybrid securities |
1,695,821 | 997,544 | ||||||
Capital surplus |
627,496 | 626,295 | ||||||
Other equity |
(2,297,529 | ) | (2,249,322 | ) | ||||
Retained earnings |
19,116,037 | 18,524,515 | ||||||
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22,753,163 | 21,510,370 | |||||||
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Non-controlling interests |
3,455,587 | 3,981,962 | ||||||
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Total equity |
26,208,750 | 25,492,332 | ||||||
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Total liabilities and equity |
380,838,911 | 361,980,724 | ||||||
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The accompanying notes are part of this consolidated interim financial statement.
- 4 -
WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
(Korean Won in millions, except per share data) | ||||||||||||||||
Interest income |
2,272,434 | 7,188,437 | 2,691,515 | 7,969,207 | ||||||||||||
Financial assets at FVTPL |
12,908 | 39,118 | 13,970 | 41,875 | ||||||||||||
Financial assets at FVTOCI |
103,380 | 344,380 | 135,081 | 344,183 | ||||||||||||
Financial assets at amortized cost |
2,156,146 | 6,804,939 | 2,542,464 | 7,583,149 | ||||||||||||
Interest expense |
(784,995 | ) | (2,760,149 | ) | (1,205,717 | ) | (3,552,357 | ) | ||||||||
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Net interest income (Notes 11, 30 and 41) |
1,487,439 | 4,428,288 | 1,485,798 | 4,416,850 | ||||||||||||
Fees and commissions income |
399,010 | 1,207,003 | 426,708 | 1,274,949 | ||||||||||||
Fees and commissions expense |
(166,310 | ) | (475,954 | ) | (146,054 | ) | (434,205 | ) | ||||||||
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Net fees and commissions income (Notes 11, 31 and 41) |
232,700 | 731,049 | 280,654 | 840,744 | ||||||||||||
Dividend income (Notes 11, 32 and 41) |
28,138 | 99,140 | 19,973 | 84,556 | ||||||||||||
Net gain on financial instruments at FVTPL (Notes 11, 33 and 41) |
130,342 | 531,931 | 21,527 | 101,608 | ||||||||||||
Net gain on financial assets at FVTOCI (Notes 11 and 34) |
7,650 | 18,677 | 4,591 | 8,036 | ||||||||||||
Net gain arising on financial assets at amortized cost (Note 11) |
7,657 | 40,319 | 4,488 | 99,107 | ||||||||||||
Impairment losses due to credit loss (Notes 35 and 41) |
(140,041 | ) | (586,720 | ) | (187,209 | ) | (323,755 | ) | ||||||||
General and administrative expenses (Notes 36 and 41) |
(899,062 | ) | (2,688,620 | ) | (880,491 | ) | (2,576,277 | ) | ||||||||
Other net operating expenses (Notes 11, 26, 36 and 41) |
(179,663 | ) | (726,306 | ) | (90,040 | ) | (281,166 | ) | ||||||||
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Operating income |
675,160 | 1,847,758 | 659,291 | 2,369,703 | ||||||||||||
Share of gain of joint ventures and associates (Note 13) |
9,983 | 33,935 | 10,103 | 20,960 | ||||||||||||
Other non-operating income(expense) |
(9,163 | ) | (171,864 | ) | 876 | 7,689 | ||||||||||
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Non-operating income(expense) (Note 37) |
820 | (137,929 | ) | 10,979 | 28,649 | |||||||||||
Net income before income tax expense |
675,980 | 1,709,829 | 670,270 | 2,398,352 | ||||||||||||
Income tax expense (Note 38) |
(154,265 | ) | (414,081 | ) | (136,162 | ) | (592,281 | ) | ||||||||
Net income |
521,715 | 1,295,748 | 534,108 | 1,806,071 | ||||||||||||
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Net gain(loss) on valuation of equity securities at FVTOCI |
69,689 | (25,525 | ) | (3,121 | ) | (50,498 | ) | |||||||||
Remeasurement gain(loss) related to defined benefit plan |
2,012 | (24,228 | ) | (702 | ) | (39,970 | ) | |||||||||
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Items that will not be reclassified to profit or loss: |
71,701 | (49,753 | ) | (3,823 | ) | (90,468 | ) | |||||||||
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Net gain(loss) on valuation of debt securities at FVTOCI |
(23,328 | ) | 46,135 | 10,389 | 64,326 | |||||||||||
Changes in capital due to equity method |
1,987 | (2,634 | ) | (9 | ) | (427 | ) | |||||||||
Net gain(loss) on foreign currency translation of foreign operations |
(75,989 | ) | (18,514 | ) | 67,652 | 170,446 | ||||||||||
Net gain(loss) on valuation of cash flow hedge |
5,466 | (4,564 | ) | (209 | ) | (1,379 | ) | |||||||||
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Items that may be reclassified to profit or loss: |
(91,864 | ) | 20,423 | 77,823 | 232,966 | |||||||||||
Other comprehensive income (loss), net of tax |
(20,163 | ) | (29,330 | ) | 74,000 | 142,498 | ||||||||||
Total comprehensive income |
501,552 | 1,266,418 | 608,108 | 1,948,569 | ||||||||||||
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(Continued)
- 5 -
WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED) (CONTINUED)
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
(Korean Won in millions, except per share data) | ||||||||||||||||
Net income attributable to: |
521,715 | 1,295,748 | 534,108 | 1,806,071 | ||||||||||||
Net income attributable to owners |
480,200 | 1,140,764 | 486,009 | 1,665,697 | ||||||||||||
Net income attributable to non-controlling interests |
41,515 | 154,984 | 48,099 | 140,374 | ||||||||||||
Total comprehensive income attributable to: |
501,552 | 1,266,418 | 608,108 | 1,948,569 | ||||||||||||
Comprehensive income attributable to owners |
467,871 | 1,116,291 | 555,478 | 1,795,631 | ||||||||||||
Comprehensive income attributable to non-controlling interests |
33,681 | 150,127 | 52,630 | 152,938 | ||||||||||||
Earnings per share (Note 39) |
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Basic and diluted earnings per share (Unit: In Korean Won) |
645 | 1,532 | 708 | 2,459 |
The accompanying notes are part of this consolidated interim financial statement.
- 6 -
WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)
Capital Stock |
Hybrid securities |
Capital surplus |
Other equity |
Retained earnings |
Owners equity in total |
Non-controlling interests |
Total equity |
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(Korean Won in millions) | ||||||||||||||||||||||||||||||||
January 1, 2019 |
3,381,392 | 3,161,963 | 285,889 | (2,213,970 | ) | 17,124,657 | 21,739,931 | 213,113 | 21,953,044 | |||||||||||||||||||||||
Total comprehensive income |
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Net income |
| | | | 1,665,697 | 1,665,697 | 140,374 | 1,806,071 | ||||||||||||||||||||||||
Net gain on valuation of financial instruments at FVTOCI |
| | | 13,705 | | 13,705 | 123 | 13,828 | ||||||||||||||||||||||||
Net gain(loss) due to disposal of equity securities at FVTOCI |
| | | 26,719 | (26,719 | ) | | | | |||||||||||||||||||||||
Changes in capital due to equity method |
| | | (427 | ) | | (427 | ) | | (427 | ) | |||||||||||||||||||||
Gain on foreign currency translation of foreign operations |
| | | 157,766 | | 157,766 | 12,680 | 170,446 | ||||||||||||||||||||||||
Loss on valuation of cash flow hedge |
| | | (1,379 | ) | | (1,379 | ) | | (1,379 | ) | |||||||||||||||||||||
Remeasurement loss related to defined benefit plan |
| | | (39,732 | ) | | (39,732 | ) | (238 | ) | (39,970 | ) | ||||||||||||||||||||
Transactions with owners |
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Dividends to common stocks |
| | | | (437,626 | ) | (437,626 | ) | (2,014 | ) | (439,640 | ) | ||||||||||||||||||||
Acquisition of subsidiaries |
229,946 | | 335,338 | | | 565,284 | 29,299 | 594,583 | ||||||||||||||||||||||||
New stocks issue cost |
| | (3,034 | ) | | | (3,034 | ) | | (3,034 | ) | |||||||||||||||||||||
Net decrease of treasury stocks |
| | | (163,175 | ) | | (163,175 | ) | | (163,175 | ) | |||||||||||||||||||||
Gain and losses on sale of treasury share |
| | | 13,991 | | 13,991 | | 13,991 | ||||||||||||||||||||||||
Issuance of hybrid securities |
| 498,783 | | | | 498,783 | | 498,783 | ||||||||||||||||||||||||
Dividends to hybrid securities |
| | | | (3,571 | ) | (3,571 | ) | (118,614 | ) | (122,185 | ) | ||||||||||||||||||||
Exchange of non-controlling interests in hybrid securities |
| (3,161,963 | ) | | | | (3,161,963 | ) | 3,161,963 | | ||||||||||||||||||||||
Changes in subsidiaries capital |
| | 416 | | | 416 | (28 | ) | 388 | |||||||||||||||||||||||
Appropriation of retained earnings |
| | | 368 | (368 | ) | | | | |||||||||||||||||||||||
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September 30, 2019 (Unaudited) |
3,611,338 | 498,783 | 618,609 | (2,206,134 | ) | 18,322,070 | 20,844,666 | 3,436,658 | 24,281,324 | |||||||||||||||||||||||
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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 |
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Net income |
| | | | 1,140,764 | 1,140,764 | 154,984 | 1,295,748 | ||||||||||||||||||||||||
Net gain(loss) on valuation of financial instruments at FVTOCI |
| | | 20,647 | | 20,647 | (37 | ) | 20,610 | |||||||||||||||||||||||
Net gain(loss) due to disposal of equity securities at FVTOCI |
| | | 2,665 | (2,665 | ) | | | | |||||||||||||||||||||||
Changes in capital due to equity method |
| | | (2,634 | ) | | (2,634 | ) | | (2,634 | ) | |||||||||||||||||||||
Gain on foreign currency translation of foreign operations |
| | | (13,670 | ) | | (13,670 | ) | (4,844 | ) | (18,514 | ) | ||||||||||||||||||||
Loss on valuation of cash flow hedge |
| | | (4,564 | ) | | (4,564 | ) | | (4,564 | ) | |||||||||||||||||||||
Remeasurement loss related to defined benefit plan |
| | | (24,252 | ) | | (24,252 | ) | 24 | (24,228 | ) | |||||||||||||||||||||
Transactions with owners |
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Dividends to common stocks |
| | | | (505,587 | ) | (505,587 | ) | (2,062 | ) | (507,649 | ) | ||||||||||||||||||||
Issuance of hybrid securities |
| 698,277 | | | | 698,277 | | 698,277 | ||||||||||||||||||||||||
Dividends to hybrid securities |
| | | | (34,640 | ) | (34,640 | ) | (118,659 | ) | (153,299 | ) | ||||||||||||||||||||
Redemption of hybrid securities |
| | | (31,252 | ) | | (31,252 | ) | (555,744 | ) | (586,996 | ) | ||||||||||||||||||||
Changes in subsidiaries capital |
| | 1,201 | 4,853 | (6,350 | ) | (296 | ) | (37 | ) | (333 | ) | ||||||||||||||||||||
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September 30, 2020 (Unaudited) |
3,611,338 | 1,695,821 | 627,496 | (2,297,529 | ) | 19,116,037 | 22,753,163 | 3,455,587 | 26,208,750 | |||||||||||||||||||||||
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The accompanying notes are part of this consolidated interim financial statement.
- 7 -
WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)
For the nine-month period ended September 30 | ||||||||
2020 | 2019 | |||||||
(Korean Won in millions) | ||||||||
Cash flows from operating activities: |
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Net income |
1,295,748 | 1,806,071 | ||||||
Adjustments to net income: |
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Income tax expense |
414,081 | 592,281 | ||||||
Interest income |
(7,188,437 | ) | (7,969,207 | ) | ||||
Interest expense |
2,760,149 | 3,552,357 | ||||||
Dividend income |
(99,140 | ) | (84,556 | ) | ||||
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(4,113,347 | ) | (3,909,125 | ) | |||||
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Additions of expenses not involving cash outflows: |
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Gain on financial assets at FVTOCI |
535 | 174 | ||||||
Impairment loss due to credit loss |
586,720 | 323,755 | ||||||
Loss on other provisions |
171,114 | 20,841 | ||||||
Retirement benefit |
129,699 | 124,058 | ||||||
Depreciation and amortization |
398,713 | 364,127 | ||||||
Net gain on foreign currency translation |
357,877 | | ||||||
Loss on derivatives (designated for hedge) |
20,746 | 1,890 | ||||||
Loss on fair value hedge |
91,251 | 112,352 | ||||||
Loss on valuation of investments in joint ventures and associates |
16,974 | 12,062 | ||||||
Loss on disposal of premises and equipment, intangible assets and other assets |
1,736 | 1,606 | ||||||
Impairment loss on premises and equipment, intangible assets and other assets |
8,429 | 1,422 | ||||||
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1,783,794 | 962,287 | |||||||
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Deductions of income not involving cash inflows: |
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Gain on valuation of financial instruments at FVTPL |
162,056 | 240,428 | ||||||
Gain on financial assets at FVTOCI |
19,212 | 8,210 | ||||||
Gain on other provisions |
353 | 4,137 | ||||||
Gain on derivatives (designated for hedge) |
102,540 | 169,127 | ||||||
Gain on fair value hedge |
4,767 | | ||||||
Gain on valuation of investments in joint ventures and associates |
50,909 | 33,022 | ||||||
Gain on disposal of premises and equipment, intangible assets and other assets |
6,549 | 1,375 | ||||||
Reversal of impairment loss on premises and equipment, intangible assets and other assets |
87 | 45 | ||||||
Other income |
9,351 | | ||||||
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355,824 | 456,344 | |||||||
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Changes in operating assets and liabilities: |
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Financial instruments at FVTPL |
(428,484 | ) | 321,687 | |||||
Loans and other financial assets at amortized cost |
(14,528,362 | ) | (17,520,776 | ) | ||||
Other assets |
(118,168 | ) | 110,115 | |||||
Deposits due to customers |
13,688,884 | 13,288,359 | ||||||
Provisions |
(169,146 | ) | (11,616 | ) | ||||
Net defined benefit liability |
(68,569 | ) | (118,470 | ) | ||||
Other financial liabilities |
485,840 | 3,127,528 | ||||||
Other liabilities |
40,249 | 388 | ||||||
|
|
|
|
|||||
(1,097,756 | ) | (802,785 | ) | |||||
|
|
|
|
|||||
Interest income received |
7,329,781 | 7,885,061 | ||||||
Interest expense paid |
(3,101,429 | ) | (3,132,990 | ) | ||||
Dividends received |
99,269 | 84,660 | ||||||
Income tax paid |
(323,310 | ) | (386,099 | ) | ||||
|
|
|
|
|||||
Net cash inflow from operating activities |
1,516,926 | 2,050,736 | ||||||
|
|
|
|
(Continued)
- 8 -
WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED) (CONTINUED)
For the nine-month period ended September 30 | ||||||||
2020 | 2019 | |||||||
(Korean Won in millions) | ||||||||
Cash flows from investing activities: |
||||||||
Cash in-flows from investing activities: |
||||||||
Net cash in-flows from hedging activities |
491 | | ||||||
Disposal of financial instruments at FVTPL |
4,969,738 | 8,242,090 | ||||||
Disposal of financial assets at FVTOCI |
15,843,334 | 9,101,560 | ||||||
Redemption of securities at amortized cost |
4,148,133 | 6,713,880 | ||||||
Disposal of investments in joint ventures and associates |
36,162 | 27,669 | ||||||
Disposal of investment properties |
356 | 73 | ||||||
Disposal of premises and equipment |
17,401 | 7,873 | ||||||
Disposal of intangible assets |
611 | 750 | ||||||
|
|
|
|
|||||
25,016,226 | 24,093,895 | |||||||
|
|
|
|
|||||
Cash out-flows from investing activities: |
||||||||
Net cash in-flows of business combination |
| 140,217 | ||||||
Acquisition of financial instruments at FVTPL |
6,007,849 | 8,361,213 | ||||||
Acquisition of financial assets at FVTOCI |
17,747,437 | 18,544,686 | ||||||
Acquisition of securities at amortized cost |
1,712,770 | 3,937,980 | ||||||
Acquisition of investments in joint ventures and associates |
327,295 | 26,060 | ||||||
Acquisition of investment properties |
2,432 | 246,329 | ||||||
Acquisition of premises and equipment |
90,450 | 204,969 | ||||||
Acquisition of intangible assets |
88,294 | 88,619 | ||||||
Net increase of other assets |
2,671 | | ||||||
|
|
|
|
|||||
25,979,198 | 31,550,073 | |||||||
|
|
|
|
|||||
Net cash outflow from investing activities |
(962,972 | ) | (7,456,178 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Cash in-flows from financing activities: |
||||||||
Net increase in borrowings |
3,661,819 | 4,721,799 | ||||||
Issuance of debentures |
15,295,688 | 20,854,461 | ||||||
Net increase of other liabilities |
2,704 | 232 | ||||||
Issuance of hybrid securities |
698,277 | 498,783 | ||||||
Retirement of treasury stocks |
| 610,369 | ||||||
|
|
|
|
|||||
19,658,488 | 26,685,644 | |||||||
|
|
|
|
|||||
Cash out-flows from financing activities: |
||||||||
Net cash out-flows from hedging activities |
15,943 | | ||||||
Redemption of debentures |
16,217,533 | 18,489,990 | ||||||
Redemption of lease liabilities |
151,688 | 153,686 | ||||||
Net decrease of other liabilities |
| 237 | ||||||
New stock issue cost |
| 19,358 | ||||||
Acquisition of treasury stocks |
| 184,164 | ||||||
Dividends paid |
505,587 | 437,626 | ||||||
Redemption of hybrid stocks |
598,850 | | ||||||
Dividends paid to hybrid securities |
153,299 | 109,033 | ||||||
Dividends paid to non-controlling interest |
2,062 | 2,014 | ||||||
Paid-in capital decrease on non-controlling interests |
13 | 28 | ||||||
|
|
|
|
|||||
17,644,975 | 19,396,136 | |||||||
|
|
|
|
|||||
Net cash inflow from financing activities |
2,013,513 | 7,289,508 | ||||||
|
|
|
|
|||||
Net increase (decrease) in cash and cash equivalents |
2,567,467 | 1,884,066 | ||||||
Cash and cash equivalents, beginning of the period |
6,392,566 | 6,747,894 | ||||||
Effects of exchange rate changes on cash and cash equivalents |
(145,789 | ) | (243,125 | ) | ||||
|
|
|
|
|||||
Cash and cash equivalents, end of the period (Note 6) |
8,814,244 | 8,388,835 | ||||||
|
|
|
|
The accompanying notes are part of this consolidated interim financial statement.
- 9 -
WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)
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 is 3,611,338 million won at the establishment while the Korea Deposit Insurance Corp. (KDIC), the Parent companys largest shareholder, owns 124,604,797 shares (17.25%) of the Parent companys stocks issued. The companys 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 companys 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 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 59.83% 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.
- 10 -
(2) | Details of the Parent company and subsidiaries (hereinafter Group) as of September 30, 2020 and December 31, 2019 are as follows: |
Percentage of ownership (%) |
Location |
Financial | ||||||||||||
Subsidiaries |
Main business |
September 30, 2020 |
December 31, 2019 |
|||||||||||
Held by Woori Financial Group Inc. |
||||||||||||||
Woori Bank |
Bank | 100.0 | 100.0 | Korea | September 30 | |||||||||
Woori Card Co., Ltd. |
Finance | 100.0 | 100.0 | Korea | September 30 | |||||||||
Woori Investment Bank Co., Ltd. |
Other credit finance business | 59.8 | 59.8 | Korea | September 30 | |||||||||
Woori FIS Co., Ltd. |
System software development & maintenance | 100.0 | 100.0 | Korea | September 30 | |||||||||
Woori Finance Research Institute Co., Ltd. |
Other service business | 100.0 | 100.0 | Korea | September 30 | |||||||||
Woori Credit Information Co., Ltd. |
Credit information | 100.0 | 100.0 | Korea | September 30 | |||||||||
Woori Fund Service Co., Ltd. |
Finance | 100.0 | 100.0 | Korea | September 30 | |||||||||
Woori Asset Trust Co., Ltd. |
Real estate trust | 67.2 | 67.2 | Korea | September 30 | |||||||||
Woori Asset Management Corp. |
Finance | 73.0 | 73.0 | Korea | September 30 | |||||||||
Woori Private Equity Asset Management Co., Ltd. |
Finance | 100.0 | 100.0 | Korea | September 30 | |||||||||
Woori Global Asset Management Co., Ltd. |
Finance | 100.0 | 100.0 | Korea | September 30 | |||||||||
Held by Woori Bank |
||||||||||||||
Woori America Bank |
Finance | 100.0 | 100.0 | America | September 30 | |||||||||
Woori Global Markets Asia Limited |
Finance | 100.0 | 100.0 | Hong Kong | September 30 | |||||||||
Woori Bank China Limited |
Finance | 100.0 | 100.0 | China | September 30 | |||||||||
AO Woori Bank |
Finance | 100.0 | 100.0 | Russia | September 30 | |||||||||
PT Bank Woori Saudara Indonesia 1906 Tbk |
Finance | 79.9 | 79.9 | Indonesia | September 30 | |||||||||
Banco Woori Bank do Brasil S.A. |
Finance | 100.0 | 100.0 | Brazil | September 30 | |||||||||
Korea BTL Infrastructure Fund |
Finance | 99.9 | 99.9 | Korea | September 30 | |||||||||
Woori Finance Cambodia PLC. (*1) |
Finance | | 100.0 | Cambodia | (*5) | |||||||||
Woori Finance Myanmar Co., Ltd. |
Finance | 100.0 | 100.0 | Myanmar | September 30 | |||||||||
Wealth Development Bank |
Finance | 51.0 | 51.0 | Philippines | September 30 | |||||||||
Woori Bank Vietnam Limited |
Finance | 100.0 | 100.0 | Vietnam | September 30 | |||||||||
WB Finance Co., Ltd. |
Finance | 100.0 | 100.0 | Cambodia | September 30 | |||||||||
Woori Bank Europe |
Finance | 100.0 | 100.0 | Germany | September 30 | |||||||||
Kumho Trust First Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Asiana Saigon Inc. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
KAMCO Value Recreation First Securitization Specialty Co., Ltd. (*2) |
Asset securitization | 15.0 | 15.0 | Korea | September 30 | |||||||||
Hermes STX Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
BWL First Co., LLC (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Deogi Dream Fourth Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Jeonju Iwon Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Wonju I one Inc. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Heitz Third Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woorihansoop 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Electric Cable First Co., Ltd. (*2) |
Asset securitization | | 0.0 | Korea | (*5) | |||||||||
Woori International First Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori WEBST 1st Co., Ltd. (*2) |
Asset securitization | | 0.0 | Korea | (*5) | |||||||||
Wibihansoop 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Uri QS 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Uri Display 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Tiger Eyes 2nd Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori Serveone 1st Co., Ltd. (*2) |
Asset securitization | | 0.0 | Korea | (*5) | |||||||||
Uri Display 2nd Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori the Colony Unjung Securitization Specialty Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 |
- 11 -
Percentage of ownership (%) |
Location |
Financial | ||||||||||||
Subsidiaries |
Main business |
September 30, 2020 |
December 31, 2019 |
|||||||||||
Woori Dream 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori Dream 2nd Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori H 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori HS 2nd Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori Sinnonhyeon 1st Inc. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori K 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Uri S 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Smart Casting Inc. (*2) |
Asset securitization | | 0.0 | Korea | (*5) | |||||||||
Uri Display 3rd Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
TY 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori HJ 2nd Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori-HJ 3rd Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Uri K 2nd Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori KC No.1 Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori Lake 1st., Ltd. (*2) |
Asset securitization | | 0.0 | Korea | (*5) | |||||||||
Woori QSell 2nd Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Quantum Jump the 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Quantum Jump the 2nd Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori BK the 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori-HC 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Wivi Synergy 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
ATLANTIC TRANSPORTATION 1 S.A. (*2) |
Asset securitization | 0.0 | 0.0 | Marshall islands | September 30 | |||||||||
Woori Gongdeok First Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
HD Project Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori HW 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori HC 2nd Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori Dream 3rd Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori SJS 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Woori Steel 1st Co., Ltd (*2) |
Asset securitization | 0.0 | | Korea | September 30 | |||||||||
Woori-HWC 1st Co., Ltd. |
Asset securitization | 0.0 | | Korea | September 30 | |||||||||
SPG the 1st Co., Ltd. |
Asset securitization | 0.0 | | Korea | September 30 | |||||||||
G5 Pro Short-term Bond Investment Fund 13 (*3) |
Securities investment and others | 100.0 | 100.0 | Korea | September 30 | |||||||||
Heungkuk Global Private Placement Investment Trust No. 1 (*3) |
Securities investment and others | 98.5 | 98.5 | Korea | September 30 | |||||||||
AI Partners UK Water Supply Private Placement Investment Trust No.2 (*3) |
Securities investment and others | 97.3 | 97.3 | England | September 30 | |||||||||
Consus Sakhalin Real Estate Investment Trust 1st (*3) |
Securities investment and others | 75.0 | 75.0 | Korea | September 30 | |||||||||
Multi Asset Global Real Estate Investment Trust No. 5-2 (*3) |
Securities investment and others | 99.0 | 99.0 | Korea | September 30 | |||||||||
INMARK Spain Private Placement Real Estate Investment Trust No. 26-2 (*3) |
Securities investment and others | 97.7 | | Korea | September 30 | |||||||||
Igis Australia Investment Trust No. 209-1 (*3) |
Securities investment and others | 99.4 | 99.4 | Korea | September 30 | |||||||||
IGIS Global Private Placement Real Estate Fund No. 316-1 (*3) |
Securities investment and others | 99.3 | 99.3 | Korea | September 30 | |||||||||
Woori G Japan Investment Trust No. 1-2 (*3) |
Securities investment and others | 98.8 | | Korea | September 30 | |||||||||
Principal Guaranteed Trust (*4) |
Trust | 0.0 | 0.0 | Korea | September 30 | |||||||||
Principal and Interest Guaranteed Trust (*4) |
Trust | 0.0 | 0.0 | Korea | September 30 | |||||||||
Held by Multi Asset Global Real Estate Investment Trust No. 5-2: |
||||||||||||||
MAGI No.5 LuxCo S.a.r.l. (*3) |
Asset securitization | 54.6 | 54.6 | Luxembourg | September 30 | |||||||||
Held by MAGI No.5 LuxCo S.a.r.l.: |
||||||||||||||
ADP 16 Brussels (*2) |
Asset securitization | 0.0 | 0.0 | Belgium | September 30 |
- 12 -
Percentage of ownership (%) |
Location |
Financial | ||||||||||||
Subsidiaries |
Main business |
September 30, 2020 |
December 31, 2019 |
|||||||||||
Held by Woori Investment Bank Co., Ltd.: |
||||||||||||||
Dongwoo First Securitization Specialty Co., Ltd. (*2) |
Asset securitization | | 5.0 | Korea | (*5) | |||||||||
Seari First Securitization Specialty Co., Ltd. (*2) |
Asset securitization | 5.0 | 5.0 | Korea | September 30 | |||||||||
Seari Second Securitization Specialty Co., Ltd. (*2) |
Asset securitization | 5.0 | 5.0 | Korea | September 30 | |||||||||
Namjong 1st Securitization Specialty Co., Ltd. (*2) |
Asset securitization | 5.0 | 5.0 | Korea | September 30 | |||||||||
Bukgeum First Securitization Specialty Co., Ltd. (*2) |
Asset securitization | 5.0 | 5.0 | Korea | September 30 | |||||||||
Bukgeum Second Securitization Specialty Co., Ltd. (*2) |
Asset securitization | 5.0 | 5.0 | Korea | September 30 | |||||||||
WS1909 Securitization Specialty Co., Ltd. (*2) |
Asset securitization | 5.0 | 5.0 | Korea | September 30 | |||||||||
WS2003 Securitization Specialty Co., Ltd. (*2) |
Asset securitization | 5.0 | | Korea | September 30 | |||||||||
WS2006 Securitization Specialty Co., Ltd. (*2) |
Asset securitization | 5.0 | | Korea | September 30 | |||||||||
WJ2008 Securitization Specialty Co., Ltd. (*2) |
Asset securitization | 5.0 | | Korea | September 30 | |||||||||
One Punch Korea the 1st Co., Ltd. (*2). |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
One Punch blue the 1st Co., Ltd. (*2) |
Asset securitization | 0.0 | 0.0 | Korea | September 30 | |||||||||
Held by Woori Card Co., Ltd.: |
||||||||||||||
TUTU Finance WCI Myanmar Co., Ltd. |
Finance | 100.0 | 100.0 | Myanmar | September 30 | |||||||||
Woori Card one of 2017-1 Securitization Specialty Co., Ltd. (*2) |
Asset securitization | | 0.5 | Korea | (*5) | |||||||||
Woori Card one of 2017-2 Securitization Specialty Co., Ltd. (*2) |
Asset securitization | 0.5 | 0.5 | Korea | September 30 | |||||||||
Woori Card one of 2018-1 Securitization Specialty Co., Ltd. (*2) |
Asset securitization | 0.5 | 0.5 | Korea | September 30 | |||||||||
Woori Card 2019-1 Asset Securitization Specialty Co., Ltd. (*2) |
Asset securitization | 0.5 | 0.5 | Korea | September 30 | |||||||||
Woori Card 2020-1 Asset Securitization Specialty Co., Ltd. (*2) |
Asset securitization | 0.5 | | Korea | September 30 | |||||||||
Held by Woori Private Equity Asset Management Co., Ltd. and Woori Investment Bank Co., Ltd.: (*6) |
||||||||||||||
Japanese Hotel Real Estate Private Equity Fund 1 (*3) |
Securities investment and others | 45.5 | 45.5 | Korea | September 30 | |||||||||
Held by Woori Asset Management Corp.: |
||||||||||||||
Woori China Convertible Bond Hedging feeder Investment Trust H (debt-oriented hybrid) (*3) |
Securities investment and others | 99.5 | 98.8 | Korea | September 30 | |||||||||
Woori China Convertible Bond Master Fund (debt-oriented hybrid) (*3) |
Securities investment and others | 50.5 | 98.6 | Korea | September 30 | |||||||||
Woori Yellow Chip High Yield Strategic Allocation 1 (FOF) (*3) |
Securities investment and others | 44.5 | | Korea | September 30 | |||||||||
Woori Together TDF 2025 (*3) |
Securities investment and others | 49.7 | | Korea | September 30 | |||||||||
Woori Together TDF 2030 (*3) |
Securities investment and others | 50.0 | | Korea | September 30 | |||||||||
Woori Together TDF 2035 (*3) |
Securities investment and others | 49.9 | | Korea | September 30 |
- 13 -
Percentage of ownership (%) |
Location |
Financial | ||||||||||||
Subsidiaries |
Main business |
September 30, 2020 |
December 31, 2019 |
|||||||||||
Woori Together TDF 2040 (*3) |
Securities investment and others | 49.9 | - | Korea | September 30 | |||||||||
Woori Together TDF 2045 (*3) |
Securities investment and others | 50.0 | | Korea | September 30 | |||||||||
Woori Together TDF 2050 (*3) |
Securities investment and others | 97.9 | | Korea | September 30 | |||||||||
Woori All-in-One World Balanced EMP40(FOF) (*3) |
Securities investment and others | 51.1 | | Korea | September 30 | |||||||||
Woori All-in-One World EMP(Equity-FOF) (*3) |
Securities investment and others | 54.4 | | Korea | September 30 | |||||||||
Woori All-in-One World EMP(Bond-FOF) (*3) |
Securities investment and others | 54.4 | | Korea | September 30 | |||||||||
Held by Woori Global Asset Management Co., Ltd.: |
||||||||||||||
WOORIG China Value Equity (C/C(F)) (*3) |
Securities investment and others | | 95.1 | Korea | (*5) | |||||||||
WooriG Global Multi Asset Income Private Placement Investment Trust [FoF]_Class Cs (*3) |
Securities investment and others | 22.2 | | Korea | September 30 | |||||||||
Held by Woori Bank, Woori Investment Bank Co., Ltd and Woori Private Equity Asset Management Co., Ltd.: (*6) |
||||||||||||||
Woori Innovative Growth Professional Investment Type Private Investment Trust No.1 (*3) |
Securities investment and others | 60.0 | 60.0 | Korea | September 30 | |||||||||
Woori Innovative Growth Professional Investment Type Private Investment Trust No.2 (*3) |
Securities investment and others | 65.0 | | Korea | September 30 | |||||||||
Held by Woori bank and Woori Investment Bank Co., Ltd.: (*6) |
||||||||||||||
Heungkuk Woori Tech Company Private Placement Investment Trust No. 1 (*3) |
Securities investment and others | 100.0 | 100.0 | Korea | September 30 | |||||||||
Woori Global Development Infrastructure Synergy Company Private Placement Investment Trust No.1 (*3) |
Securities investment and others | 100.0 | 100.0 | Korea | September 30 | |||||||||
WooriG NorthAmerica Infra Private Placement Investment Trust No. 1 (*3) |
Securities investment and others | 100.0 | | Korea | September 30 | |||||||||
Held by Woori bank (*6) |
||||||||||||||
WooriG Woori Bank Partners Private Placement Investment Trust No. 1 (*3) |
Securities investment and others | 92.6 | | Korea | September 30 | |||||||||
WooriG Secondary Private Placement Investment Trust No. 1 (*3) |
Securities investment and others | 97.2 | | Korea | September 30 |
(*1) | The entity was merged with WB Finance Co., Ltd., which is a second-tier subsidiary, during current 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 September 30, 2020. |
(*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. |
- 14 -
(3) | The Group has not consolidated the following entities as of September 30, 2020 and December 31, 2019 despite having more than 50% ownership interest: |
As of September 30, 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 | |||||||||
KIM Pocheon-Hwado Highway Infra Private Placement Special Asset Fund (*) |
Korea | Securities Investment | 52.4 | |||||||||
Heungkuk Woori middle priority acquisition Financing 2 types(*) |
Korea | Securities Investment | 83.0 | |||||||||
Kiwoom-Harmony Private Placement Investment Trust No.2 (*) |
Korea | Securities Investment | 96.0 | |||||||||
Kiwoom-Harmony Private Placement Investment Trust No.1 (*) |
Korea | Securities Investment | 95.7 | |||||||||
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 |
(*) | Since the investee is a private equity investment fund, the Group does not have the power over the funds activities even though it holds more than 50% of ownership interest. |
As of December 31, 2019 | ||||||||||||
Subsidiaries |
Location | Main Business | Percentage of ownership (%) |
|||||||||
Golden Bridge NHN Online Private Equity Investment (*) |
Korea | Securities Investment | 60.0 | |||||||||
Mirae Asset Maps Clean Water Private Equity Investment Trust 7th (*) |
Korea | Securities Investment | 59.7 | |||||||||
Kiwoom Yonsei Private Equity Investment Trust (*) |
Korea | Securities Investment | 88.9 | |||||||||
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 | |||||||||
KIM Pocheon-Hwado Highway Infra Private Placement Special Asset Fund (*) |
Korea | Securities Investment | 55.2 |
(*) | Since the investee is a private equity investment fund, the Group does not have the power over the funds activities even though it holds more than 50% of ownership interest. |
- 15 -
(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 nine-month period ended September 30, 2020 | ||||||||||||||||||||
Subsidiaries |
Assets | Liabilities | Operating revenue |
Net income (loss) attributable to owners |
Comprehensive income (loss) attributable to owners |
|||||||||||||||
Woori Bank |
365,537,820 | 342,117,151 | 17,760,315 | 1,158,642 | 1,147,932 | |||||||||||||||
Woori Card Co., Ltd. |
10,826,338 | 8,793,286 | 1,014,678 | 107,412 | 96,260 | |||||||||||||||
Woori Investment Bank Co., Ltd. |
4,196,255 | 3,778,843 | 194,798 | 50,143 | 50,075 | |||||||||||||||
Woori FIS Co., Ltd. |
99,242 | 59,315 | 192,206 | 4,093 | 3,959 | |||||||||||||||
Woori Finance Research Institute Co., Ltd. |
5,902 | 2,177 | 4,751 | 283 | 277 | |||||||||||||||
Woori Credit Information Co., Ltd. |
40,025 | 9,016 | 30,152 | 1,738 | 1,579 | |||||||||||||||
Woori Fund Service Co., Ltd. |
17,997 | 1,892 | 9,839 | 1,883 | 1,883 | |||||||||||||||
Woori Asset Trust Co., Ltd. |
168,465 | 47,943 | 56,790 | 27,270 | 27,238 | |||||||||||||||
Woori Asset Management Corp. |
134,579 | 23,100 | 17,764 | 5,156 | 4,743 | |||||||||||||||
Woori Private Equity Asset Management Co., Ltd. |
37,261 | 2,123 | 3,548 | (91 | ) | (120 | ) | |||||||||||||
Woori Global Asset Management Co., Ltd. |
37,942 | 9,522 | 7,482 | (1,157 | ) | (1,157 | ) |
As of and for the year ended December 31, 2019 | ||||||||||||||||||||
Subsidiaries |
Assets | Liabilities | Operating revenue |
Net income (loss) attributable to owners |
Comprehensive income (loss) attributable to owners |
|||||||||||||||
Woori Bank (*1) |
348,181,658 | 325,526,568 | 22,240,947 | 1,505,547 | 1,531,793 | |||||||||||||||
Woori Card Co., Ltd. |
10,087,342 | 8,299,175 | 1,368,234 | 114,196 | 111,782 | |||||||||||||||
Woori Investment Bank Co., Ltd. |
3,398,960 | 3,031,622 | 204,655 | 53,358 | 52,095 | |||||||||||||||
Woori FIS Co., Ltd. |
91,079 | 55,112 | 244,923 | 3,107 | 3,119 | |||||||||||||||
Woori Finance Research Institute Co., Ltd. |
5,447 | 1,999 | 5,452 | 160 | 117 | |||||||||||||||
Woori Credit Information Co., Ltd. |
37,872 | 7,948 | 39,118 | 1,698 | 1,389 | |||||||||||||||
Woori Fund Service Co., Ltd. |
16,852 | 2,109 | 11,071 | 1,735 | 1,735 | |||||||||||||||
Woori Asset Trust Co., Ltd. (*2) |
139,839 | 45,410 | | | | |||||||||||||||
Woori Asset Management Corp. (*2) |
113,037 | 6,301 | 9,204 | 1,720 | 2,544 | |||||||||||||||
Woori Private Equity Asset Management Co., Ltd. |
38,243 | 2,985 | 4,152 | (2,087 | ) | (2,124 | ) | |||||||||||||
Woori Global Asset Management Co., Ltd. (*2) |
32,807 | 3,230 | 3,588 | (1,360 | ) | (1,360 | ) |
(*1) | The amount is prepared based on the consolidated financial statements of Woori Bank (before reflecting the classification of profit or loss of the discontinued operation). |
(*2) | The gain or loss information of Woori Asset Trust Co., Ltd., Woori Asset Management Corp. and Woori Global Asset Management Co., Ltd. are prepared on the accumulated gains or losses from the date on which the entities were transferred as subsidiaries, to December 31, 2019. |
(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 September 30, 2020, the Group provides 2,155,914 million won of credit facilities for the structured entities mentioned above.
- 16 -
(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 the structured entities recognize related interest or fee revenue. There are entities that provide additional funding and conditional debt acquisition commitments before the Groups 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. 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 Groups 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.
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.
- 17 -
September 30, 2020 | ||||||||||||||||
Asset securitization vehicle |
Structured Finance |
Investment Funds |
Real-estate trust |
|||||||||||||
Total asset of the unconsolidated structured entities |
7,802,960 | 66,828,161 | 31,705,064 | 77,146 | ||||||||||||
Assets recognized in the consolidated financial statements related to the unconsolidated structured entities |
5,064,015 | 3,778,956 | 3,937,034 | 59,296 | ||||||||||||
Financial assets at FVTPL |
309,076 | 9,430 | 3,432,254 | | ||||||||||||
Financial assets at FVTOCI |
1,637,138 | 49,025 | | | ||||||||||||
Financial assets at amortized cost |
3,115,978 | 3,708,441 | | 59,296 | ||||||||||||
Investments in joint ventures and associates |
| 2,100 | 504,780 | | ||||||||||||
Derivative assets |
1,823 | 9,960 | | | ||||||||||||
Liabilities recognized in the consolidated financial statements related to the unconsolidated structured entities |
329 | 1,379 | | 1,358 | ||||||||||||
Derivative liabilities |
| | | 502 | ||||||||||||
Other liabilities (provisions) |
329 | 1,379 | | 856 | ||||||||||||
The maximum exposure to risks |
5,444,792 | 4,637,965 | 4,000,426 | 102,206 | ||||||||||||
Investment assets |
5,064,015 | 3,778,956 | 3,937,034 | 59,296 | ||||||||||||
Credit facilities and others |
380,777 | 859,009 | 63,392 | 42,910 | ||||||||||||
Loss recognized on unconsolidated structured entities |
| 3,845 | 3,290 | 1,838 |
December 31, 2019 | ||||||||||||||||
Asset securitization vehicle |
Structured Finance |
Investment Funds |
Real-estate trust |
|||||||||||||
Total asset of the unconsolidated structured entities |
8,230,254 | 62,879,421 | 18,265,273 | 152,257 | ||||||||||||
Assets recognized in the consolidated financial statements related to the unconsolidated structured entities |
5,128,616 | 2,982,217 | 1,411,639 | 57,928 | ||||||||||||
Financial assets at FVTPL |
324,414 | 28,834 | 1,109,621 | 655 | ||||||||||||
Financial assets at FVTOCI |
2,006,230 | 42,305 | | | ||||||||||||
Financial assets at amortized cost |
2,796,695 | 2,897,620 | 120,072 | 57,273 | ||||||||||||
Investments in joint ventures and associates |
| 7,475 | 181,946 | | ||||||||||||
Derivative assets |
1,277 | 5,983 | | | ||||||||||||
Liabilities recognized in the consolidated financial statements related to the unconsolidated structured entities |
184 | 1,291 | | 2,808 | ||||||||||||
Derivative liabilities |
| 15 | | | ||||||||||||
Other liabilities (provisions) |
184 | 1,276 | | 2,808 | ||||||||||||
The maximum exposure to risks |
5,561,394 | 3,532,539 | 1,457,398 | 77,117 | ||||||||||||
Investment assets |
5,128,616 | 2,982,217 | 1,411,639 | 57,928 | ||||||||||||
Credit facilities and others |
432,778 | 550,322 | 45,759 | 19,189 | ||||||||||||
Loss recognized on unconsolidated structured entities |
| 4,660 | 34,312 | 5,218 |
- 18 -
(7) | As of September 30, 2020 and December 31, 2019, 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): |
1) | Accumulated non-controlling interests at the end of the reporting period |
September 30, 2020 |
December 31, 2019 |
|||||||
Woori Bank (*) |
3,105,070 | 3,660,814 | ||||||
Woori Investment Bank Co., Ltd. |
171,470 | 151,170 | ||||||
Woori Asset Trust Co., Ltd |
47,341 | 40,161 | ||||||
Woori Asset Management Corp |
30,979 | 29,800 | ||||||
PT Bank Woori Saudara Indonesia 1906 Tbk |
82,234 | 83,315 | ||||||
Wealth Development Bank |
20,352 | 18,524 |
(*) | Hybrid securities issued by Woori Bank |
2) | Net income attributable to non-controlling interests |
For the nine-month period ended September 30 |
||||||||
2020 | 2019 | |||||||
Woori Bank (*) |
118,659 | 118,614 | ||||||
Woori Investment Bank Co., Ltd. |
20,329 | 14,368 | ||||||
Woori Asset Trust Co., Ltd |
7,556 | | ||||||
Woori Asset Management Corp |
1,290 | 186 | ||||||
PT Bank Woori Saudara Indonesia 1906 Tbk |
6,534 | 7,007 | ||||||
Wealth Development Bank |
588 | 166 |
(*) | Distribution of the hybrid securities issued by Woori Bank |
3) | Dividends to non-controlling interests |
For the nine-month period ended September 30 |
||||||||
2020 | 2019 | |||||||
Woori Bank (*) |
118,659 | 118,614 | ||||||
Woori Asset Trust Co., Ltd |
365 | | ||||||
PT Bank Woori Saudara Indonesia 1906 Tbk |
1,669 | 1,981 |
(*) | Distribution of the hybrid securities issued by Woori Bank |
- 19 -
2. | BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES |
The Groups condensed consolidated interim financial statements are condensed interim financial statements prepared in applying International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS) 1034 Interim Finance Reporting for some of periods in which the annual consolidated financial statements belong. It is necessary to use the Groups condensed consolidated interim financial statements for the year ended December 31, 2019 for understanding of the accompanying interim financial statements.
(1) | Except for the impacts on the newly adopted standards and interpretations explained below, the accounting policies applied in preparing the accompanying condensed consolidated interim financial statements have been applied consistently with the annual consolidated financial statements as of and for the year ended December 31, 2019. |
1) | Amendments to Korean IFRS 1103 Business Combination Definition of a Business |
To consider the integration of the required activities and assets as a business, the amended definition of a business requires an acquisition to include an input and a substantive process that together significantly contribute to the ability to create outputs and excludes economic benefits from the lower costs. An entity can apply a concentration test, an optional test, where substantially all of the fair value of gross assets acquired is concentrated in a single asset or a group of similar assets, the assets acquired would not represent a business. The amendment does not have a significant impact on the financial statements.
2) | Amendments to Korean IFRS 1001 Presentation of Financial Statements and Korean IFRS 1008 Accounting policies, changes in accounting estimates and errors Definition of Material |
The amendments clarify the explanation of the definition of material and amended Korean IFRS 1001 and Korean IFRS 1008 in accordance with the clarified definitions. Materiality is assessed by reference to omission or misstatement of material information as well as effects of immaterial information, and to the nature of the users when determining the information to be disclosed by the Group. The amendment does not have a significant impact on the financial statements.
3) | Amendments to Korean IFRS 1116 Lease Practical expedient for COVID-19-Related Rent Exemption, Concessions, Suspension |
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. A lessee that makes this election shall account for any change in lease payments resulting from the rent concession the same way it would account for the change applying this Standard if the change were not a lease modification.
With implementation of Korean IFRS 1116 Lease, the Group has changed accounting policy. The Group has adopted Korean IFRS 1116 retrospectively, as permitted under the specific transitional provisions in the standard. There was no cumulative impact on the beginning balance of retained earnings as at January 1, 2020 by retrospectively applying this standard, and the Group did not restate comparatives for the 2019 reporting period. The impact of the adoption of the leasing standard are disclosed in Note 42.
(2) | Significant accounting policies and method of computation used in the preparation of the condensed consolidated interim financial statements are consistent with those of the consolidated financial statements for the year ended December 31, 2019, except for the one described below. |
| Income tax expense |
Income tax expense for the interim period is recognized based on managements best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate is applied to the pre-tax income.
- 20 -
3. | SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS |
The outbreak of COVID-19 in 2020 has had a significant impact on the global economy including Korea. Financial and economic shocks may have negative impacts on the Groups 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 loan receivables. Despite the announcement of these various forms of government support policies, the negative impact of the COVID-19 on the global economy continues.
Significant changes have been made in future forecast information affecting expected credit losses for the period of nine-month period ended September 30, 2020, and major economic factors are expected to remain negative for a considerable period of time after 2020 due to the influence of COVID-19, and uncertainties in recovery or deterioration will persist.
Considering this situation comprehensively, as of the end September 30, 2020, the Group updated the forward-looking information used to estimate expected credit losses in accordance with K-IFRS 1109 Financial Instruments by changing major variables such as GDP to reflect the impact of COVID-19, which has brought about a global economic recession. As a result, Woori Bank has increased credit loss allowance for 162,911 million won as of June 30, 2020 and 27,152 million won for additional update as of September 30, 2020. Credit loss allowances for Woori Card Co., Ltd. and Woori Investment Bank Co., Ltd. have increased 9,614 million won and 3,371 million won, respectively. The Group will continue to evaluate future prospects related to the duration of COVID-19s economic impact and the governments policies.
The management shall make judgments, estimates and assumptions that affect the application of accounting policies and application of assets, liabilities and revenues and expenses in preparing condensed consolidated interim financial statements. Therefore, the actual results may differ from these estimates.
The important decisions made by management on the application of accounting policy of the Group and the main sources of estimation uncertainty in preparing condensed consolidated interim financial statements are the same as those applied to the consolidated financial statements for the year ended December 31, 2019, unless otherwise stated.
- 21 -
4. | RISK MANAGEMENT |
The Groups operating activity is exposed to various financial risks and the 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 Groups 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 Groups credit risk exposure to a permissible degree and to optimize its rate of return considering such credit risk.
1) | Credit risk management |
The Group considers the probability of failure in performing the obligation of its counterparties, credit exposure to the counterparty, the related default risk and the rate of default loss. The Group uses the credit rating model to assess the possibility of counterpartys default risk; and when assessing the obligors credit grade, the Group utilizes credit grades derived using statistical methods.
In order to manage credit risk limit, the Group establishes the appropriate credit line per obligor, company or industry. It monitors obligors credit line, total exposures and loan portfolios when approving the loan.
The Group mitigates credit risk resulting from the obligors 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.
- 22 -
2) | Maximum exposure to credit risk |
The Groups 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.
The maximum exposure to credit risk as of September 30, 2020 and December 31, 2019 is as follows (Unit: Korean Won in millions):
September 30, 2020 | December 31, 2019 | |||||||||
Loans and other financial assets at amortized cost |
Korean treasury and government agencies | 11,867,476 | 14,797,040 | |||||||
Banks | 19,294,058 | 18,597,206 | ||||||||
Corporates | 108,718,098 | 101,041,110 | ||||||||
Consumers | 167,898,429 | 159,282,337 | ||||||||
|
|
|
|
|||||||
Sub-total |
307,778,061 | 293,717,693 | ||||||||
|
|
|
|
|||||||
Financial assets at FVTPL (*) |
Deposit | 45,704 | 27,901 | |||||||
Debt securities | 2,650,541 | 2,337,085 | ||||||||
Loans | 350,902 | 212,473 | ||||||||
Derivative assets | 4,027,744 | 2,921,903 | ||||||||
|
|
|
|
|||||||
Sub-total |
7,074,891 | 5,499,362 | ||||||||
|
|
|
|
|||||||
Financial assets at FVTOCI |
Debt securities | 28,713,096 | 26,795,161 | |||||||
Securities at amortized cost |
Debt securities | 17,889,922 | 20,320,539 | |||||||
Derivative assets |
Derivative assets (Designated for hedging) | 228,580 | 121,131 | |||||||
Off-balance accounts |
Guarantees | 11,575,359 | 12,618,917 | |||||||
Loan commitments | 110,958,256 | 103,651,674 | ||||||||
|
|
|
|
|||||||
Sub-total |
122,533,615 | 116,270,591 | ||||||||
|
|
|
|
|||||||
Total |
484,218,165 | 462,724,477 | ||||||||
|
|
|
|
(*) | Puttable financial instruments are not included |
- 23 -
a) | Credit risk exposure by geographical areas |
The following tables analyze credit risk exposure by geographical areas (Unit: Korean Won in millions):
September 30, 2020 | ||||||||||||||||||||||||||||
Korea | China | USA | UK | Japan | Others (*) | Total | ||||||||||||||||||||||
Loans and other financial assets at amortized cost |
282,308,903 | 5,319,154 | 4,063,888 | 1,686,193 | 1,268,650 | 13,131,273 | 307,778,061 | |||||||||||||||||||||
Securities at amortized cost |
17,679,048 | | 45,044 | | | 165,830 | 17,889,922 | |||||||||||||||||||||
Financial assets at FVTPL |
5,258,363 | 13,288 | 688,838 | 226,289 | 108,918 | 779,195 | 7,074,891 | |||||||||||||||||||||
Financial assets at FVTOCI |
25,547,545 | 569,304 | 1,279,228 | 6 | 5,908 | 1,311,105 | 28,713,096 | |||||||||||||||||||||
Derivative assets (Designated for hedging) |
18,222 | | 200,031 | | | 10,327 | 228,580 | |||||||||||||||||||||
Off-balance accounts |
118,391,030 | 1,545,048 | 443,905 | 39,270 | 42,953 | 2,071,409 | 122,533,615 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
449,203,111 | 7,446,794 | 6,720,934 | 1,951,758 | 1,426,429 | 17,469,139 | 484,218,165 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) | Others consist of financial assets in Indonesia, Hong Kong, Germany, Australia, and other countries. |
December 31, 2019 | ||||||||||||||||||||||||||||
Korea | China | USA | UK | Japan | Others (*) | Total | ||||||||||||||||||||||
Loans and other financial assets at amortized cost |
268,316,454 | 5,108,144 | 5,077,666 | 1,844,374 | 1,172,209 | 12,198,846 | 293,717,693 | |||||||||||||||||||||
Securities at amortized cost |
20,104,604 | | 66,747 | | | 149,188 | 20,320,539 | |||||||||||||||||||||
Financial assets at FVTPL |
5,488,229 | 10,409 | | | 724 | | 5,499,362 | |||||||||||||||||||||
Financial assets at FVTOCI |
24,553,655 | 332,319 | 144,601 | 102,311 | 2 | 1,662,273 | 26,795,161 | |||||||||||||||||||||
Derivative assets (Designated for hedging) |
121,131 | | | | | | 121,131 | |||||||||||||||||||||
Off-balance accounts |
112,602,603 | 1,211,857 | 387,795 | 78,850 | 46,662 | 1,942,824 | 116,270,591 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
431,186,676 | 6,662,729 | 5,676,809 | 2,025,535 | 1,219,597 | 15,953,131 | 462,724,477 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) | Others consist of financial assets in Indonesia, Hong Kong, Germany, Australia, and other countries. |
b) | 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 September 30, 2020 and December 31, 2019 (Unit: Korean Won in millions): |
September 30, 2020 | ||||||||||||||||||||||||||||
Service | Manufacturing | Finance and insurance |
Construction | Individuals | Others | Total | ||||||||||||||||||||||
Loans and other financial assets at amortized cost |
55,346,261 | 37,529,070 | 35,190,506 | 3,498,360 | 163,546,744 | 12,667,120 | 307,778,061 | |||||||||||||||||||||
Securities at amortized cost |
442,598 | 6,846 | 9,955,969 | 312,423 | | 7,172,086 | 17,889,922 | |||||||||||||||||||||
Financial assets at FVTPL |
241,406 | 195,152 | 5,334,500 | 14,047 | 19,508 | 1,270,278 | 7,074,891 | |||||||||||||||||||||
Financial assets at FVTOCI |
362,799 | 120,373 | 23,371,309 | 160,895 | | 4,697,720 | 28,713,096 | |||||||||||||||||||||
Derivative assets (Designated for hedging) |
| | 228,580 | | | | 228,580 | |||||||||||||||||||||
Off-balance accounts |
18,175,514 | 22,436,926 | 11,903,032 | 4,054,556 | 59,005,695 | 6,957,892 | 122,533,615 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
74,568,578 | 60,288,367 | 85,983,896 | 8,040,281 | 222,571,947 | 32,765,096 | 484,218,165 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019 | ||||||||||||||||||||||||||||
Service | Manufacturing | Finance and insurance |
Construction | Individuals | Others | Total | ||||||||||||||||||||||
Loans and other financial assets at amortized cost |
51,233,088 | 32,983,972 | 36,141,770 | 3,291,001 | 155,120,055 | 14,947,807 | 293,717,693 | |||||||||||||||||||||
Securities at amortized cost |
8,545,838 | | 10,979,001 | 364,591 | | 431,109 | 20,320,539 | |||||||||||||||||||||
Financial assets at FVTPL |
162,780 | 128,666 | 4,084,698 | 39,193 | 15,430 | 1,068,595 | 5,499,362 | |||||||||||||||||||||
Financial assets at FVTOCI |
85,609 | 139,098 | 18,968,456 | 10,047 | 9,241 | 7,582,710 | 26,795,161 | |||||||||||||||||||||
Derivative assets (Designated for hedging) |
| | 121,131 | | | | 121,131 | |||||||||||||||||||||
Off-balance accounts |
17,813,366 | 23,841,881 | 10,015,897 | 4,161,139 | 53,335,209 | 7,103,099 | 116,270,591 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
77,840,681 | 57,093,617 | 80,310,953 | 7,865,971 | 208,479,935 | 31,133,320 | 462,724,477 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 24 -
② | The detailed industries of financial assets and corporate loans that might get affected by the spread of COVID-19 as of September 30, 2020 are as follow and the industries that can be affected may change by future economic conditions. (Unit: Korean Won in millions): |
< Woori Bank >
Loans and other financial assets at amortized cost |
Financial assets at FVTPL |
Financial assets at FVTOCI |
||||||||||||||||
Service business |
Distribution business | |
General retail business |
|
968,106 | 4,232 | 5,866 | |||||||||||
|
General wholesale business |
|
1,435,984 | 2,020 | | |||||||||||||
Sub-total | 2,404,090 | 6,252 | 5,866 | |||||||||||||||
Accommodation business |
1,766,031 | 5,640 | 5,866 | |||||||||||||||
Travel business |
90,681 | 78 | | |||||||||||||||
Art/sports, leisure service |
1,370,626 | 19,261 | | |||||||||||||||
Food business |
1,018,429 | 1,747 | | |||||||||||||||
Air transport business |
427,028 | 499 | | |||||||||||||||
Education business |
358,722 | 513 | | |||||||||||||||
Others |
1,279,607 | 3,469 | | |||||||||||||||
Sub-total |
8,715,214 | 37,459 | 11,732 | |||||||||||||||
Manufacturing |
Textile |
2,377,090 | 3,495 | 7,051 | ||||||||||||||
Metal |
1,476,130 | 8,636 | | |||||||||||||||
Non-metal |
747,522 | 7,082 | | |||||||||||||||
Chemical |
1,635,414 | 9,578 | | |||||||||||||||
Transportation |
3,606,539 | 2,851 | | |||||||||||||||
Electronics |
1,530,994 | 13,935 | | |||||||||||||||
Cosmetics |
326,429 | 255 | | |||||||||||||||
Others |
566,645 | 360 | | |||||||||||||||
Sub-total |
12,266,763 | 46,192 | 7,051 | |||||||||||||||
|
|
|
|
|
|
|||||||||||||
Total |
20,981,977 | 83,651 | 18,783 | |||||||||||||||
|
|
|
|
|
|
Off-balance accounts | Total | |||||||||||||
Service business |
Distribution business | |
General retail business |
|
905,707 | 1,883,911 | ||||||||
|
General wholesale business |
|
479,786 | 1,917,790 | ||||||||||
Sub-total |
1,385,493 | 3,801,701 | ||||||||||||
Accommodation business |
156,457 | 1,933,994 | ||||||||||||
Travel business |
22,036 | 112,795 | ||||||||||||
Art/sports, leisure service |
67,061 | 1,456,948 | ||||||||||||
Food business |
177,420 | 1,197,596 | ||||||||||||
Air transport business |
201,163 | 628,690 | ||||||||||||
Education business |
47,247 | 406,482 | ||||||||||||
Others |
297,574 | 1,580,650 | ||||||||||||
Sub-total |
2,354,451 | 11,118,856 | ||||||||||||
Manufacturing |
Textile |
1,094,996 | 3,482,632 | |||||||||||
Metal |
1,608,380 | 3,093,146 | ||||||||||||
Non-metal |
323,636 | 1,078,240 | ||||||||||||
Chemical |
3,480,329 | 5,125,321 | ||||||||||||
Transportation |
1,980,606 | 5,589,996 | ||||||||||||
Electronics |
1,797,185 | 3,342,114 | ||||||||||||
Cosmetics |
76,756 | 403,440 | ||||||||||||
Others |
1,506,912 | 2,073,917 | ||||||||||||
Sub-total |
11,868,800 | 24,188,806 | ||||||||||||
|
|
|
|
|||||||||||
Total |
14,223,251 | 35,307,662 | ||||||||||||
|
|
|
|
- 25 -
< Woori Card Co., Ltd. >
Loans and other financial assets at amortized cost |
Financial assets at FVTPL |
Financial assets at FVTOCI |
Off-balance accounts |
Total | ||||||||||||||||
Accommodation business |
2,415 | | | 14,426 | 16,841 | |||||||||||||||
Travel business |
1,770 | | | 22,780 | 24,550 | |||||||||||||||
Aviation |
604 | | | 4,161 | 4,765 | |||||||||||||||
Cosmetics industry |
2,567 | | | 14,712 | 17,279 | |||||||||||||||
Distribution business |
8,608 | | | 52,701 | 61,309 | |||||||||||||||
Food industry |
30,280 | | | 184,135 | 214,415 | |||||||||||||||
Art/sports, leisure service |
6,520 | | | 56,987 | 63,507 | |||||||||||||||
Total |
52,764 | | | 349,902 | 402,666 |
< Woori Investment Bank Co., Ltd. >
Loans and other financial assets at amortized cost |
Financial assets at FVTPL |
Financial assets at FVTOCI |
Off-balance accounts |
Total | ||||||||||||||||
Accommodation business |
54,400 | | | | 54,400 | |||||||||||||||
Cosmetics industry |
4,850 | | | | 4,850 | |||||||||||||||
Distribution business |
22,700 | | | | 22,700 | |||||||||||||||
Art/sports, leisure service |
30,000 | | | | 30,000 | |||||||||||||||
Total |
111,950 | | | | 111,950 |
- 26 -
3) | Credit risk exposure |
a) | 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 September 30, 2020 and December 31, 2019 is as follows (Unit: Korean Won in millions):
September 30, 2020 | ||||||||||||||||||||||||||||||||
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) |
|||||||||||||||||||||||||||||
Loans and other financial assets at amortized cost |
270,357,556 | 20,045,589 | 8,315,022 | 9,385,286 | 1,467,427 | 309,570,880 | (1,792,819 | ) | 307,778,061 | |||||||||||||||||||||||
Korean treasury and government agencies |
11,869,212 | 1,194 | | | | 11,870,406 | (2,930 | ) | 11,867,476 | |||||||||||||||||||||||
Banks |
18,961,537 | 264,084 | 58,134 | | 27,966 | 19,311,721 | (17,663 | ) | 19,294,058 | |||||||||||||||||||||||
Corporates |
90,315,511 | 14,412,421 | 577,925 | 3,769,085 | 807,440 | 109,882,382 | (1,164,284 | ) | 108,718,098 | |||||||||||||||||||||||
General business |
60,320,443 | 9,791,119 | 519,660 | 2,618,776 | 557,981 | 73,807,979 | (839,714 | ) | 72,968,265 | |||||||||||||||||||||||
Small- and medium-sized enterprise |
25,060,651 | 4,431,761 | 58,265 | 1,071,743 | 222,950 | 30,845,370 | (282,725 | ) | 30,562,645 | |||||||||||||||||||||||
Project financing and others |
4,934,417 | 189,541 | | 78,566 | 26,509 | 5,229,033 | (41,845 | ) | 5,187,188 | |||||||||||||||||||||||
Consumers |
149,211,296 | 5,367,890 | 7,678,963 | 5,616,201 | 632,021 | 168,506,371 | (607,942 | ) | 167,898,429 | |||||||||||||||||||||||
Securities at amortized cost |
17,895,308 | | | | | 17,895,308 | (5,386 | ) | 17,889,922 | |||||||||||||||||||||||
Financial assets at FVTOCI (*3) |
28,554,423 | 158,673 | | | | 28,713,096 | (9,705 | ) | 28,713,096 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
316,807,287 | 20,204,262 | 8,315,022 | 9,385,286 | 1,467,427 | 356,179,284 | (1,807,910 | ) | 354,381,079 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
September 30, 2020 | ||||||||||||||||
Collateral value | ||||||||||||||||
Stage1 | Stage2 | Stage3 | Total | |||||||||||||
Loans and other financial assets at amortized cost |
180,721,500 | 13,769,569 | 641,123 | 195,132,192 | ||||||||||||
Korean treasury and government agencies |
| | | | ||||||||||||
Banks |
893,739 | | | 893,739 | ||||||||||||
Corporates |
61,267,315 | 2,765,491 | 353,006 | 64,385,812 | ||||||||||||
General business |
35,772,108 | 1,843,734 | 249,095 | 37,864,937 | ||||||||||||
Small- and medium-sized enterprise |
23,852,298 | 921,757 | 100,563 | 24,874,618 | ||||||||||||
Project financing and others |
1,642,909 | | 3,348 | 1,646,257 | ||||||||||||
Consumers |
118,560,446 | 11,004,078 | 288,117 | 129,852,641 | ||||||||||||
Securities at amortized cost |
| | | | ||||||||||||
Financial assets at FVTOCI (*3) |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
180,721,500 | 13,769,569 | 641,123 | 195,132,192 | ||||||||||||
|
|
|
|
|
|
|
|
(*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. |
- 27 -
December 31, 2019 | ||||||||||||||||||||||||||||||||
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) |
|||||||||||||||||||||||||||||
Loans and other financial assets at amortized cost |
255,709,205 | 19,823,451 | 8,712,860 | 9,625,024 | 1,504,172 | 295,374,712 | (1,657,019 | ) | 293,717,693 | |||||||||||||||||||||||
Korean treasury and government agencies |
14,789,933 | 10,390 | | | 1 | 14,800,324 | (3,284 | ) | 14,797,040 | |||||||||||||||||||||||
Banks |
18,336,664 | 109,667 | 150,318 | | 21,907 | 18,618,556 | (21,350 | ) | 18,597,206 | |||||||||||||||||||||||
Corporates |
82,286,304 | 15,201,687 | 485,469 | 3,267,311 | 792,375 | 102,033,146 | (992,036 | ) | 101,041,110 | |||||||||||||||||||||||
General business |
45,769,233 | 6,191,625 | 441,089 | 1,620,761 | 544,238 | 54,566,946 | (678,237 | ) | 53,888,709 | |||||||||||||||||||||||
Small- and medium-sized enterprise |
32,180,551 | 8,507,800 | 44,380 | 1,586,865 | 230,901 | 42,550,497 | (287,027 | ) | 42,263,470 | |||||||||||||||||||||||
Project financing and others |
4,336,520 | 502,262 | | 59,685 | 17,236 | 4,915,703 | (26,772 | ) | 4,888,931 | |||||||||||||||||||||||
Consumers |
140,296,304 | 4,501,707 | 8,077,073 | 6,357,713 | 689,889 | 159,922,686 | (640,349 | ) | 159,282,337 | |||||||||||||||||||||||
Securities at amortized cost |
20,326,050 | | | | | 20,326,050 | (5,511 | ) | 20,320,539 | |||||||||||||||||||||||
Financial assets at FVTOCI (*4) |
26,684,601 | 110,560 | | | | 26,795,161 | (8,569 | ) | 26,795,161 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
302,719,856 | 19,934,011 | 8,712,860 | 9,625,024 | 1,504,172 | 342,495,923 | (1,671,099 | ) | 340,833,393 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
December 31, 2019 | ||||||||||||||||
Collateral value | ||||||||||||||||
Stage1 | Stage2 | Stage3 | Total | |||||||||||||
Loans and other financial assets at amortized cost |
169,438,539 | 14,451,806 | 692,139 | 184,582,484 | ||||||||||||
Korean treasury and government agencies |
| | | | ||||||||||||
Banks |
612,200 | 2,028 | | 614,228 | ||||||||||||
Corporates |
55,602,818 | 2,335,496 | 394,860 | 58,333,174 | ||||||||||||
General business |
22,291,348 | 1,023,766 | 240,771 | 23,555,885 | ||||||||||||
Small- and medium-sized enterprise |
31,517,538 | 1,311,730 | 145,061 | 32,974,329 | ||||||||||||
Project financing and others |
1,793,932 | | 9,028 | 1,802,960 | ||||||||||||
Consumers |
113,223,521 | 12,114,282 | 297,279 | 125,635,082 | ||||||||||||
Securities at amortized cost |
| | | | ||||||||||||
Financial assets at FVTOCI (*4) |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
169,438,539 | 14,451,806 | 692,139 | 184,582,484 | ||||||||||||
|
|
|
|
|
|
|
|
(*1) | Credit grade of corporates are AAA ~ BBB, and consumers are grades 1 ~ 6. |
(*2) | Credit grade of corporates are A- ~ BBB, and consumers are grades 1 ~ 6. |
(*3) | Credit grade of corporates are BBB- ~ C, and consumers are grades 7 ~ 10. |
(*4) | Financial assets at FVTOCI has been disclosed as the amount before deducting loss allowance because loss allowance does not reduce the carrying amount. |
- 28 -
b) | Guarantees and commitments |
The credit quality of the guarantees and loan commitments as of September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions):
September 30, 2020 | ||||||||||||||||||||||||
Financial assets |
Stage 1 | Stage 2 | Stage3 | Total | ||||||||||||||||||||
Above appropriate credit rating (*1) |
Less than a limited credit rating (*2) |
Above appropriate credit rating (*1) |
Less than a limited credit rating (*2) |
|||||||||||||||||||||
Off-balance accounts: |
||||||||||||||||||||||||
Guarantees |
9,981,695 | 1,321,610 | 408 | 164,714 | 106,932 | 11,575,359 | ||||||||||||||||||
Loan Commitments |
104,951,671 | 3,507,772 | 1,520,432 | 972,236 | 6,145 | 110,958,256 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
114,933,366 | 4,829,382 | 1,520,840 | 1,136,950 | 113,077 | 122,533,615 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*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. |
December 31, 2019 | ||||||||||||||||||||||||
Financial assets |
Stage 1 | Stage 2 | Stage3 | Total | ||||||||||||||||||||
Above appropriate credit rating (*1) |
Less than a limited credit rating (*3) |
Above appropriate credit rating (*2) |
Less than a limited credit rating (*3) |
|||||||||||||||||||||
Off-balance accounts |
||||||||||||||||||||||||
Guarantees |
10,952,917 | 1,333,561 | 355 | 223,657 | 108,427 | 12,618,917 | ||||||||||||||||||
Loan Commitments |
97,854,790 | 3,479,295 | 1,388,136 | 906,033 | 23,420 | 103,651,674 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
108,807,707 | 4,812,856 | 1,388,491 | 1,129,690 | 131,847 | 116,270,591 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Credit grade of corporates are AAA ~ BBB, and consumers are grades 1 ~ 6. |
(*2) | Credit grade of corporates are A- ~ BBB, and consumers are grades 1 ~ 6. |
(*3) | Credit grade of corporate are BBB- ~ C, and consumers are grades 7 ~ 10. |
4) | Collateral and other credit enhancements |
For the nine-month period ended September 30, 2020 and for the year ended December 31, 2019, 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. As of September 30, 2020, there are no financial assets that do not recognize the allowance for losses just because financial assets have collateral.
- 29 -
(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.
1) | 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.
a) | 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.
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 Group for the nine-month period September 30, 2020 and for the year ended December 31, 2019, and the VaR of the Group as of September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions):
September 30, 2020 |
For the nine-month period ended September 30, 2020 |
December 31, 2019 |
For the year ended December 31, 2019 |
|||||||||||||||||||||||||||||
Risk factor |
Average | Maximum | Minimum | Average | Maximum | Minimum | ||||||||||||||||||||||||||
Interest rate |
9,433 | 7,716 | 15,065 | 2,427 | 5,052 | 3,406 | 5,725 | 1,176 | ||||||||||||||||||||||||
Stock price |
5,818 | 6,213 | 14,394 | 2,580 | 3,730 | 3,203 | 5,935 | 1,146 | ||||||||||||||||||||||||
Foreign currencies |
10,826 | 8,311 | 10,826 | 4,613 | 5,028 | 5,033 | 6,469 | 4,395 | ||||||||||||||||||||||||
Commodity price |
| | | | | 1 | 32 | | ||||||||||||||||||||||||
Diversification |
(11,617 | ) | (10,785 | ) | (18,388 | ) | (4,050 | ) | (6,233 | ) | (5,127 | ) | (9,229 | ) | (2,339 | ) | ||||||||||||||||
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Total VaR(*) |
14,460 | 11,455 | 21,897 | 5,570 | 7,577 | 6,516 | 8,932 | 4,378 | ||||||||||||||||||||||||
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(*) | VaR (Value at Risk): Retention period of 1 day, Maximum expected losses under 99% level of confidence. |
- 30 -
b) | Non-trading activities |
For non-trading sectors of the bank, consolidated trusts and subsidiaries of the Bank, the risk is managed and measured by D NII(Change in Net Interest Income) and D EVE(Change in Economic Value of Equity) simulated by NII (Net Interest Income) and EVE (Economic Value of Equity).
NII is primarily an indicator of changes in profit from short-term changes in interest rates and is measured by deducting the interest expenses on the liability from the interest income from the asset. NPV is primarily an indicator of the risk of an economic value perspective resulting from unfavorable changes in interest rates and is measured by subtracting the present value of the liability from the present value of the asset. D NII represents a change in net interest income that may occur over a certain period (e.g., 1 year) due to unfavorable changes in interest rates, and D EVE 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. The interest rate EaR represents the maximum amount of decrease in net interest income that could result from unfavorable changes in interest rate over a certain period (e.g., 1 year), and the interest rate VaR represents the maximum expected loss that indicates how much net asset value can decrease at present or in the future due to unfavorable changes in interest rates.
For assets and liabilities as of September 30, 2020 and December 31, 2019 that include bank, consolidated trusts and subsidiaries of the bank, details of D EVE and DNII calculated based on interest rate risk in banking book (IRRBB) are as follows (Unit: Korean Won in millions):
September 30, 2020 |
December 31, 2019 | |||||
DEVE (*1) |
DNII (*2) |
DEVE (*1) |
DNII (*2) | |||
478,303 |
24,085 | 490,981 | 162,023 |
(*1) | D EVE: change in Economic Value of Equity |
(*2) | D NII: change in Net Interest Income |
For the remaining subsidiaries except the bank, consolidated trusts, and consolidated subsidiaries of the bank as of September 30, 2020 and December 31, 2019, the interest rate EaR and VaR calculated based on the BIS Framework are as follows (Unit: Korean Won in millions):
September 30, 2020 |
December 31, 2019 | |||||
EaR (*1) |
VaR (*2) |
EaR (*1) |
VaR (*2) | |||
103,381 |
148,074 | 92,439 | 87,872 |
(*1) | EaR (Earning at Risk): Change of maximum expected income and expense |
(*2) | VaR (Value at Risk): Maximum expected losses |
- 31 -
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):
September 30, 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 |
161,905,506 | 50,820,533 | 15,272,183 | 11,541,924 | 60,375,038 | 5,266,725 | 305,181,909 | |||||||||||||||||||||
Financial assets at FVTPL |
612,405 | 12,237 | 90,658 | 1,906 | 176,306 | 13,266 | 906,778 | |||||||||||||||||||||
Financial assets at FVTOCI |
4,904,835 | 3,376,694 | 3,408,530 | 3,661,321 | 13,331,873 | 529,438 | 29,212,691 | |||||||||||||||||||||
Securities at amortized cost |
1,592,174 | 1,191,944 | 1,419,990 | 934,188 | 12,549,997 | 982,600 | 18,670,893 | |||||||||||||||||||||
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Total |
169,014,920 | 55,401,408 | 20,191,361 | 16,139,339 | 86,433,214 | 6,792,029 | 353,972,271 | |||||||||||||||||||||
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|||||||||||||||
Liability: |
||||||||||||||||||||||||||||
Deposits due to customers |
126,528,635 | 46,198,807 | 34,533,653 | 20,967,450 | 50,048,984 | 80,954 | 278,358,483 | |||||||||||||||||||||
Borrowings |
12,635,260 | 3,463,786 | 952,236 | 1,121,723 | 3,750,646 | 481,154 | 22,404,805 | |||||||||||||||||||||
Debentures |
2,585,963 | 2,438,694 | 2,833,556 | 2,897,003 | 17,526,203 | 3,313,939 | 31,595,358 | |||||||||||||||||||||
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|||||||||||||||
Total |
141,749,858 | 52,101,287 | 38,319,445 | 24,986,176 | 71,325,833 | 3,876,047 | 332,358,646 | |||||||||||||||||||||
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|
|
December 31, 2019 | ||||||||||||||||||||||||||||
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 |
153,023,603 | 49,505,606 | 12,505,250 | 10,506,470 | 57,582,270 | 5,209,670 | 288,332,869 | |||||||||||||||||||||
Financial assets at FVTPL |
150,149 | 23,648 | 63,825 | 34,299 | 131,206 | 13,347 | 416,474 | |||||||||||||||||||||
Financial assets at FVTOCI |
5,414,586 | 5,486,113 | 3,450,669 | 3,174,893 | 9,367,756 | 318,371 | 27,212,388 | |||||||||||||||||||||
Securities at amortized cost |
1,844,868 | 1,696,004 | 738,383 | 1,409,549 | 14,869,227 | 858,142 | 21,416,173 | |||||||||||||||||||||
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|||||||||||||||
Total |
160,433,206 | 56,711,371 | 16,758,127 | 15,125,211 | 81,950,459 | 6,399,530 | 337,377,904 | |||||||||||||||||||||
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|||||||||||||||
Liability: |
||||||||||||||||||||||||||||
Deposits due to customers |
116,490,812 | 45,803,202 | 32,683,132 | 26,740,013 | 43,175,232 | 59,305 | 264,951,696 | |||||||||||||||||||||
Borrowings |
12,105,234 | 1,910,759 | 1,048,991 | 706,952 | 3,264,861 | 509,359 | 19,546,156 | |||||||||||||||||||||
Debentures |
2,378,211 | 2,894,577 | 3,330,658 | 2,466,142 | 19,211,409 | 2,537,391 | 32,818,388 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
130,974,257 | 50,608,538 | 37,062,781 | 29,913,107 | 65,651,502 | 3,106,055 | 317,316,240 | |||||||||||||||||||||
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- 32 -
2) | 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 September 30, 2020 and December 31, 2019 are as follows (Unit: USD in millions, JPY in millions, CNY in millions, EUR in millions, and Korean Won in millions):
September 30, 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 | 4,821 | 5,657,077 | 9,795 | 108,923 | 1,841 | 316,522 | 151 | 206,676 | 430,929 | 6,720,127 | |||||||||||||||||||||||||||||||
Loans and other financial assets at amortized cost | 23,542 | 27,626,300 | 120,535 | 1,340,418 | 26,698 | 4,589,417 | 2,299 | 3,148,571 | 5,962,996 | 42,667,702 | ||||||||||||||||||||||||||||||||
Financial assets at FVTPL | 271 | 318,649 | 13,091 | 145,583 | 36 | 6,112 | 211 | 288,815 | 182,802 | 941,961 | ||||||||||||||||||||||||||||||||
Financial assets at FVTOCI | 2,823 | 3,312,235 | | | 2,236 | 384,434 | 37 | 50,618 | 549,588 | 4,296,875 | ||||||||||||||||||||||||||||||||
Securities at amortized cost | 256 | 300,945 | | | | | 34 | 46,314 | 119,537 | 466,796 | ||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
Total |
31,713 | 37,215,206 | 143,421 | 1,594,924 | 30,811 | 5,296,485 | 2,732 | 3,740,994 | 7,245,852 | 55,093,461 | ||||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||||
Liability |
Financial liabilities at FVTPL | 437 | 512,361 | 11,312 | 125,801 | | | 230 | 315,621 | 204,332 | 1,158,115 | |||||||||||||||||||||||||||||||
Deposits due to customers | 17,001 | 19,950,174 | 189,285 | 2,104,965 | 26,447 | 4,546,260 | 1,192 | 1,632,322 | 3,520,178 | 31,753,899 | ||||||||||||||||||||||||||||||||
Borrowings | 6,387 | 7,495,344 | 16,682 | 185,513 | | | 505 | 692,184 | 1,083,325 | 9,456,366 | ||||||||||||||||||||||||||||||||
Debentures | 3,968 | 4,655,997 | | | | | | | 223,694 | 4,879,691 | ||||||||||||||||||||||||||||||||
Other financial liabilities | 3,264 | 3,829,962 | 25,542 | 284,048 | 2,426 | 417,108 | 209 | 286,399 | 226,256 | 5,043,773 | ||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
Total |
31,057 | 36,443,838 | 242,821 | 2,700,327 | 28,873 | 4,963,368 | 2,136 | 2,926,526 | 5,257,785 | 52,291,844 | ||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
Off-balance accounts |
6,710 | 7,874,744 | 26,619 | 296,014 | 3,223 | 554,005 | 523 | 715,741 | 557,493 | 9,997,997 | ||||||||||||||||||||||||||||||||
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|
|
December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||
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 |
Loans and other financial assets at amortized cost (*) | 22,916 | 26,531,794 | 150,462 | 1,600,140 | 31,393 | 5,203,131 | 2,258 | 2,929,312 | 5,272,352 | 41,536,729 | |||||||||||||||||||||||||||||||
Financial assets at FVTPL | 165 | 190,733 | 5,322 | 56,602 | 25 | 4,155 | 105 | 135,827 | 64,185 | 451,502 | ||||||||||||||||||||||||||||||||
Financial assets at FVTOCI | 2,679 | 3,102,752 | | | 2,005 | 332,319 | 25 | 33,017 | 406,753 | 3,874,841 | ||||||||||||||||||||||||||||||||
Securities at amortized cost | 319 | 369,677 | | | | | 40 | 52,139 | 97,092 | 518,908 | ||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
Total | 26,079 | 30,194,956 | 155,784 | 1,656,742 | 33,423 | 5,539,605 | 2,428 | 3,150,295 | 5,840,382 | 46,381,980 | ||||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||||
Liability |
Financial liabilities at FVTPL | 251 | 291,102 | 4,415 | 46,957 | | | 68 | 87,776 | 83,790 | 509,625 | |||||||||||||||||||||||||||||||
Deposits due to customers | 13,208 | 15,291,671 | 166,108 | 1,766,526 | 27,739 | 4,597,467 | 1,727 | 2,240,884 | 3,247,164 | 27,143,712 | ||||||||||||||||||||||||||||||||
Borrowings | 6,588 | 7,627,665 | 11,061 | 117,634 | 16 | 2,743 | 515 | 668,060 | 499,046 | 8,915,148 | ||||||||||||||||||||||||||||||||
Debentures | 3,999 | 4,629,944 | | | | | 105 | 136,230 | 271,790 | 5,037,964 | ||||||||||||||||||||||||||||||||
Other financial liabilities | 3,016 | 3,492,462 | 11,240 | 119,529 | 3,079 | 510,281 | 359 | 466,240 | 6,906 | 4,595,418 | ||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
Total | 27,062 | 31,332,844 | 192,824 | 2,050,646 | 30,834 | 5,110,491 | 2,774 | 3,599,190 | 4,108,696 | 46,201,867 | ||||||||||||||||||||||||||||||||
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Off-balance accounts |
7,030 | 8,139,395 | 34,316 | 364,946 | 4,525 | 749,973 | 560 | 726,323 | 634,870 | 10,615,507 | ||||||||||||||||||||||||||||||||
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- 33 -
(3) | Liquidity risk |
Liquidity risk refers to the risk that the Group may encounter difficulties in meeting obligations from its financial liabilities.
1) | Liquidity risk management |
Liquidity risk management is to prevent potential cash shortages as a result of mismatching the use of funds (assets) and sources of funds (liabilities) or unexpected cash outflows. The financial liabilities that are relevant to liquidity risk are incorporated within the scope of risk management. Derivatives instruments are excluded from those financial liabilities as they reflect expected cash flows for a pre-determined period.
Assets and liabilities are grouped by account under Asset Liability Management (ALM) in accordance with the characteristics of the account. The Group manages liquidity risk by identifying the maturity gap and such gap ratio through various cash flows analysis (i.e. based on remaining maturity and contract period, etc.), while maintaining the gap ratio at or below the target limit.
2) | Maturity analysis of non-derivative financial liabilities |
a) Cash flows of principals and interests by remaining contractual maturities of non-derivative financial liabilities as of September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions):
September 30, 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 |
45,886 | 12,228 | 3,580 | 648 | | | 62,342 | |||||||||||||||||||||
Deposits due to customers |
186,622,512 | 34,070,411 | 25,374,261 | 23,607,779 | 8,882,524 | 1,877,822 | 280,435,309 | |||||||||||||||||||||
Borrowings |
11,074,287 | 3,889,187 | 1,397,366 | 2,018,281 | 4,249,390 | 492,888 | 23,121,399 | |||||||||||||||||||||
Debentures |
2,585,963 | 2,438,694 | 2,833,556 | 2,897,003 | 17,526,202 | 3,313,939 | 31,595,357 | |||||||||||||||||||||
Lease liabilities |
45,822 | 47,107 | 39,941 | 49,866 | 196,181 | 29,221 | 408,138 | |||||||||||||||||||||
Other financial liabilities |
11,932,181 | 61,888 | 6,468 | 4,080 | 188,189 | 1,924,658 | 14,117,464 | |||||||||||||||||||||
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|||||||||||||||
Total |
212,306,651 | 40,519,515 | 29,655,172 | 28,577,657 | 31,042,486 | 7,638,528 | 349,740,009 | |||||||||||||||||||||
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|
|
|
December 31, 2019 | ||||||||||||||||||||||||||||
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 |
115,156 | | | | | | 115,156 | |||||||||||||||||||||
Deposits due to customers |
166,474,535 | 36,697,168 | 24,634,859 | 31,233,844 | 6,590,119 | 1,877,594 | 267,508,119 | |||||||||||||||||||||
Borrowings |
8,596,202 | 2,948,384 | 2,162,846 | 1,880,424 | 3,682,214 | 520,936 | 19,791,006 | |||||||||||||||||||||
Debentures |
2,378,211 | 2,894,577 | 3,330,658 | 2,466,142 | 19,211,409 | 2,537,391 | 32,818,388 | |||||||||||||||||||||
Lease liabilities |
46,072 | 42,549 | 37,420 | 35,210 | 232,985 | 40,698 | 434,934 | |||||||||||||||||||||
Other financial liabilities |
11,242,367 | 60,981 | 119,633 | 10,344 | 71,561 | 2,660,640 | 14,165,526 | |||||||||||||||||||||
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|
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|
|
|
|||||||||||||||
Total |
188,852,543 | 42,643,659 | 30,285,416 | 35,625,964 | 29,788,288 | 7,637,259 | 334,833,129 | |||||||||||||||||||||
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- 34 -
b) Cash flows of principals and interests by expected maturities of non-derivative financial liabilities as of September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions):
September 30, 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 |
62,342 | | | | | | 62,342 | |||||||||||||||||||||
Deposits due to customers |
194,645,377 | 35,423,215 | 23,151,344 | 19,081,177 | 7,513,265 | 161,167 | 279,975,545 | |||||||||||||||||||||
Borrowings |
11,074,287 | 3,889,187 | 1,397,366 | 2,018,281 | 4,249,390 | 492,888 | 23,121,399 | |||||||||||||||||||||
Debentures |
2,585,963 | 2,438,694 | 2,833,556 | 2,897,003 | 17,526,202 | 3,313,939 | 31,595,357 | |||||||||||||||||||||
Lease liabilities |
45,822 | 47,107 | 39,941 | 49,866 | 196,181 | 29,221 | 408,138 | |||||||||||||||||||||
Other financial liabilities |
11,931,879 | 61,888 | 6,468 | 4,080 | 188,189 | 1,924,658 | 14,117,162 | |||||||||||||||||||||
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|
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|
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|
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|
|
|
|||||||||||||||
Total |
220,345,670 | 41,860,091 | 27,428,675 | 24,050,407 | 29,673,227 | 5,921,873 | 349,279,943 | |||||||||||||||||||||
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|
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|
|
|
December 31, 2019 | ||||||||||||||||||||||||||||
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 |
115,156 | | | | | | 115,156 | |||||||||||||||||||||
Deposits due to customers |
175,309,271 | 38,219,793 | 23,649,424 | 24,102,750 | 5,547,232 | 150,233 | 266,978,703 | |||||||||||||||||||||
Borrowings |
8,596,202 | 2,948,384 | 2,162,846 | 1,880,424 | 3,682,214 | 520,936 | 19,791,006 | |||||||||||||||||||||
Debentures |
2,378,211 | 2,894,577 | 3,330,658 | 2,466,142 | 19,211,409 | 2,537,391 | 32,818,388 | |||||||||||||||||||||
Lease liabilities |
46,072 | 42,549 | 37,420 | 35,210 | 232,985 | 40,698 | 434,934 | |||||||||||||||||||||
Other financial liabilities |
11,242,367 | 60,981 | 119,633 | 10,344 | 71,561 | 2,660,640 | 14,165,526 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
197,687,279 | 44,166,284 | 29,299,981 | 28,494,870 | 28,745,401 | 5,909,898 | 334,303,713 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3) | 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 September 30, 2020 and December 31, 2019 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 | ||||||||||||||||||||||||
September 30, 2020 |
Cash flow risk hedge | 484 | 921 | 699 | 579 | 16,432 | 120 | 19,235 | ||||||||||||||||||||||
Trading purpose | 3,508,171 | 716 | 6 | | | | 3,508,893 | |||||||||||||||||||||||
December 31, 2019 |
Cash flow risk hedge | 1,839 | (341 | ) | (298 | ) | (247 | ) | 6,249 | | 7,202 | |||||||||||||||||||
Trading purpose | 2,843,195 | | | | | | 2,843,195 |
4) | Maturity analysis of off-balance accounts (Guarantees and loan commitments) |
A financial guarantee represents an irrevocable undertaking that the Group should meet a customers 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):
September 30, 2020 | December 31, 2019 | |||||||
Guarantees |
11,575,359 | 12,618,917 | ||||||
Loan commitments |
110,958,256 | 103,651,674 | ||||||
Other commitments |
4,634,115 | 3,411,334 |
- 35 -
(4) | Operational risk |
The Group defines the operational risk that could cause a negative effect on capital resulting from inadequate internal process, labor work and systematic problem or external factors.
1) | Operational risk management |
The Group has 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.
2) | Operational risk measurement |
To quantify required capital for operational risk, the Group applies AMA using internal and external loss data, business environment and internal control factors, and scenario analysis. For the operational risk management for its subsidiaries, the Group adopted the Basic Indicator Approach.
- 36 -
5. | OPERATING SEGMENTS |
In evaluating the results of the Group and allocating resources, the Groups Chief Operation Decision Maker (CODM) utilizes the information per type of customers. With the establishment of Woori Financial Group Inc. during the current term, the company 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 Groups reporting segments consist of banking, credit card, 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 and overseas subsidiaries customers | |
Credit card | Credit card, cash services, card loans and relevant work of Woori Card 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 FIS Co., Ltd., Woori Finance Research Institute, Woori Credit Information Co., Ltd., Woori Fund Services Inc., Woori Asset Trust Co., Ltd., Woori Asset Management Corp., Ltd., Woori Private Equity Asset Management Co., Ltd., Woori Global Asset Management Co., Ltd. |
(2) | The details of income (expense) by each segment are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30, 2020 | ||||||||||||||||||||||||||||
Banking | Credit card | Investment banking |
Others (*1) | Sub-total | Adjustments (*2) | Total | ||||||||||||||||||||||
Net Interest income(expense) |
3,407,584 | 420,518 | 55,990 | (2,099 | ) | 3,881,993 | 546,295 | 4,428,288 | ||||||||||||||||||||
Non-interest income(expense) |
1,096,317 | 8,527 | 29,062 | 959,560 | 2,093,466 | (1,398,656 | ) | 694,810 | ||||||||||||||||||||
Impairment losses due to credit loss |
(413,446 | ) | (139,026 | ) | (2,302 | ) | (1,877 | ) | (556,651 | ) | (30,069 | ) | (586,720 | ) | ||||||||||||||
General and administrative expense |
(2,425,439 | ) | (145,997 | ) | (25,928 | ) | (284,823 | ) | (2,882,187 | ) | 193,567 | (2,688,620 | ) | |||||||||||||||
Net operating income(expense) |
1,665,016 | 144,022 | 56,822 | 670,761 | 2,536,621 | (688,863 | ) | 1,847,758 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Non-operating income(expense) |
(127,036 | ) | (3,614 | ) | (455 | ) | (105 | ) | (131,210 | ) | (6,719 | ) | (137,929 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income(expense) before tax |
1,537,980 | 140,408 | 56,367 | 670,656 | 2,405,411 | (695,582 | ) | 1,709,829 | ||||||||||||||||||||
Tax income(expense) |
(360,240 | ) | (32,996 | ) | (6,224 | ) | (12,535 | ) | (411,995 | ) | (2,086 | ) | (414,081 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income(loss) |
1,177,740 | 107,412 | 50,143 | 658,121 | 1,993,416 | (697,668 | ) | 1,295,748 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Other segments include gains and losses from Woori Financial Group Inc., Woori FIS Co., Ltd., Woori Finance Research Co., Ltd., Woori Credit Information Co., Ltd., Woori Fund Service Inc., Woori Asset Trust Co., Ltd., Woori Asset Management Corp., Woori Private Equity Asset Management Co., Ltd. and Woori Global Asset Management Co., Ltd. |
(*2) | 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. |
- 37 -
For the nine-month period ended September 30, 2019 | ||||||||||||||||||||||||||||
Banking | Credit card | Investment banking |
Others (*1) | Sub-total | Adjustments (*2) | Total | ||||||||||||||||||||||
Net Interest income(expense) |
3,450,061 | 410,973 | 37,447 | 2,374 | 3,900,855 | 515,995 | 4,416,850 | |||||||||||||||||||||
Non-interest income(expense) |
1,223,037 | 25,621 | 23,681 | 880,176 | 2,152,515 | (1,299,630 | ) | 852,885 | ||||||||||||||||||||
Impairment losses due to credit loss |
(54,055 | ) | (191,496 | ) | (460 | ) | (17 | ) | (246,028 | ) | (77,727 | ) | (323,755 | ) | ||||||||||||||
General and administrative expense |
(2,374,062 | ) | (136,439 | ) | (19,322 | ) | (242,631 | ) | (2,772,454 | ) | 196,177 | (2,576,277 | ) | |||||||||||||||
Net operating income(expense) |
2,244,981 | 108,659 | 41,346 | 639,902 | 3,034,888 | (665,185 | ) | 2,369,703 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Non-operating income(expense) |
48,118 | 15,373 | (1,405 | ) | (1,691 | ) | 60,395 | (31,746 | ) | 28,649 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income(expense) before tax |
2,293,099 | 124,032 | 39,941 | 638,211 | 3,095,283 | (696,931 | ) | 2,398,352 | ||||||||||||||||||||
Tax income(expense) |
(561,036 | ) | (29,201 | ) | (4,165 | ) | 1,982 | (592,420 | ) | 139 | (592,281 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income(loss) |
1,732,063 | 94,831 | 35,776 | 640,193 | 2,502,863 | (696,792 | ) | 1,806,071 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Other segments include gains and losses from Woori Financial Group Inc., Woori FIS Co., Ltd., Woori Finance Research Co., Ltd., Woori Credit Information Co., Ltd., Woori Fund Service Inc., Woori Asset Management Corp., Woori Private Equity Asset Management Co., Ltd. and Woori Global Asset Management Co., Ltd. |
(*2) | 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 |
(3) | Operating profit or loss from external customers for the nine-month period ended September 30, 2020 and 2019 are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30, 2020 |
For the nine-month period ended September 30, 2019 |
|||||||
Domestic |
1,714,237 | 2,130,716 | ||||||
Foreign |
133,521 | 238,987 | ||||||
|
|
|
|
|||||
Total |
1,847,758 | 2,369,703 | ||||||
|
|
|
|
(4) | Major non-current assets as of September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions): |
September 30, 2020 (*) | December 31, 2019 (*) | |||||||
Domestic |
5,082,530 | 4,908,140 | ||||||
Foreign |
384,105 | 387,284 | ||||||
|
|
|
|
|||||
Total |
5,466,635 | 5,295,424 | ||||||
|
|
|
|
(*) | 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 Groups total revenue for the nine-month period ended September 30, 2020 and 2019.
- 38 -
6. | STATEMENTS OF CASH FLOWS |
(1) | Details of cash and cash equivalents are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Cash |
1,542,610 | 1,957,997 | ||||||
Foreign currencies |
569,430 | 625,999 | ||||||
Demand deposits |
6,267,645 | 3,684,044 | ||||||
Fixed deposits |
434,559 | 124,526 | ||||||
|
|
|
|
|||||
Total |
8,814,244 | 6,392,566 | ||||||
|
|
|
|
(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 nine-month period ended September 30 | ||||||||
2020 | 2019 | |||||||
Changes in other comprehensive income related to valuation of financial assets at FVTOCI |
20,610 | 13,828 | ||||||
Changes in other comprehensive income related to valuation of equity method investments |
(2,634 | ) | (427 | ) | ||||
Changes in other comprehensive income related to valuation profit or loss on cash flow hedge |
(4,564 | ) | (1,379 | ) | ||||
Changes in financial assets measure at FVTOCI due to debt-for-equity swap |
3,575 | 95,137 | ||||||
Changes in the investment assets of associates due to the replacement of the account |
50,411 | 650 | ||||||
Changes in financial assets at FVTPL and assets held-for-sale |
(2,385 | ) | | |||||
Transfer of investment properties and premises and equipment |
29,580 | | ||||||
Transfer from property, plant and equipment to assets held for sale |
| 95 | ||||||
Changes in account payables related to intangible assets |
(11,651 | ) | 35,038 | |||||
Redemption of debentures |
116,475 | | ||||||
Changes in right-of-use assets and lease liabilities |
165,987 | 630,237 | ||||||
Changes in accrued dividends of hybrid securities |
| 13,154 |
- 39 -
7. | FINANCIAL ASSETS AT FVTPL |
(1) | Details of financial assets at FVTPL as of September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Financial assets at fair value through profit or loss measured at fair value |
10,565,822 | 8,069,144 |
(2) | Financial assets at fair value through profit or loss measured at fair value are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Deposits: |
||||||||
Gold banking asset |
45,704 | 27,901 | ||||||
Securities: |
||||||||
Debt securities |
||||||||
Korean treasury and government agencies |
1,139,556 | 872,954 | ||||||
Financial institutions |
718,948 | 600,303 | ||||||
Corporates |
719,977 | 762,265 | ||||||
Others |
72,060 | 101,563 | ||||||
Equity securities |
585,301 | 688,350 | ||||||
Capital contributions |
641,853 | 515,199 | ||||||
Beneficiary certificates |
2,263,777 | 1,366,233 | ||||||
|
|
|
|
|||||
Sub-total |
6,141,472 | 4,906,867 | ||||||
|
|
|
|
|||||
Loans |
350,902 | 212,473 | ||||||
Derivatives assets |
4,027,744 | 2,921,903 | ||||||
|
|
|
|
|||||
Total |
10,565,822 | 8,069,144 | ||||||
|
|
|
|
The Group does not have financial assets at fair value through profit or loss designated as upon initial recognition as of September 30, 2020 and December 31, 2019.
8. | FINANCIAL ASSETS AT FVTOCI |
(1) | Details of financial assets at FVTOCI as of September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Debt securities: |
||||||||
Korean treasury and government agencies |
2,147,410 | 1,152,711 | ||||||
Financial institutions |
18,344,904 | 17,769,924 | ||||||
Corporates |
3,853,610 | 3,917,004 | ||||||
Bond denominated in foreign currencies |
4,296,821 | 3,874,785 | ||||||
Securities loaned |
70,351 | 80,737 | ||||||
|
|
|
|
|||||
Sub-total |
28,713,096 | 26,795,161 | ||||||
|
|
|
|
|||||
Equity securities |
931,251 | 935,370 | ||||||
|
|
|
|
|||||
Total |
29,644,347 | 27,730,531 | ||||||
|
|
|
|
- 40 -
(2) | Details of equity securities designated as financial assets at FVTOCI as of September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions): |
Purpose of acquisition |
September 30, 2020 | December 31, 2019 | Remarks | |||||||||
Investment for strategic business partnership purpose |
653,114 | 678,846 | ||||||||||
Debt-equity swap |
278,095 | 256,480 | ||||||||||
Others |
42 | 44 | Cooperative insurance, etc. | |||||||||
|
|
|
|
|||||||||
Total |
931,251 | 935,370 | ||||||||||
|
|
|
|
(3) | Changes in the loss allowance and gross carrying amount of financial assets at FVTOCI are as follows (Unit: Korean Won in millions): |
1) | Allowance for credit losses |
For the nine-month period ended September 30, 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 |
(1,425 | ) | | | (1,425 | ) | ||||||||||
Disposal |
504 | | | 504 | ||||||||||||
Others (*) |
(214 | ) | | | (214 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
(9,704 | ) | | | (9,704 | ) | ||||||||||
|
|
|
|
|
|
|
|
(*) | Others consist of foreign currencies translation, etc. |
For the nine-month period ended September 30, 2019 | ||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||||||
Beginning balance |
(5,939 | ) | (238 | ) | | (6,177 | ) | |||||||||
Transfer to 12-month expected credit losses |
| | | | ||||||||||||
Transfer to lifetime expected credit losses |
62 | (62 | ) | | | |||||||||||
Transfer to credit-impaired financial assets |
| | | | ||||||||||||
Net provision (reversal) of loss allowance |
(3,679 | ) | 235 | | (3,444 | ) | ||||||||||
Disposal |
212 | | | 212 | ||||||||||||
Others (*) |
111 | 65 | | 176 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
(9,233 | ) | | | (9,233 | ) | ||||||||||
|
|
|
|
|
|
|
|
(*) | Others consist of foreign currencies translation, etc. |
- 41 -
2) | Gross carrying amount |
For the nine-month period ended September 30, 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 |
17,717,064 | | | 17,717,064 | ||||||||||||
Disposal/Redemption |
(15,833,741 | ) | | | (15,833,741 | ) | ||||||||||
Gain (loss) on valuation |
70,225 | | | 70,225 | ||||||||||||
Amortization based on effective interest method |
(9,446 | ) | | | (9,446 | ) | ||||||||||
Others (*) |
(26,167 | ) | | | (26,167 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
28,713,096 | | | 28,713,096 | ||||||||||||
|
|
|
|
|
|
|
|
(*) | Changes due to foreign currencies translation, etc. |
For the nine-month period ended September 30, 2019 | ||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||||||
Beginning balance |
17,087,096 | 25,153 | | 17,112,249 | ||||||||||||
Transfer to 12-month expected credit losses |
10,043 | (10,043 | ) | | | |||||||||||
Transfer to lifetime expected credit losses |
(5,116 | ) | 5,116 | | | |||||||||||
Transfer to credit-impaired financial assets |
| | | | ||||||||||||
Acquisition |
18,418,213 | | | 18,418,213 | ||||||||||||
Disposal/Redemption |
(9,301,713 | ) | (15,000 | ) | | (9,316,713 | ) | |||||||||
Gain (loss) on valuation |
76,755 | | | 76,755 | ||||||||||||
Amortization based on effective interest method |
17,645 | | | 17,645 | ||||||||||||
Business combination |
24,986 | | | 24,986 | ||||||||||||
Others (*) |
220,301 | (5,226 | ) | | 215,075 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
26,548,210 | | | 26,548,210 | ||||||||||||
|
|
|
|
|
|
|
|
(*) | Changes due to foreign currencies translation, etc. |
(4) | During the nine-month period ended September 30, 2020 and 2019, 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 2,844 million won and 28,722 million won, respectively and cumulative losses at disposal dates were 3,667 million won and 39,079 million won, respectively. |
9. | SECURITIES AT AMORTIZED COST |
(1) | Details of securities at amortized cost as of September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Korean treasury and government agencies |
6,890,843 | 8,044,040 | ||||||
Financial institutions |
5,644,175 | 6,694,614 | ||||||
Corporates |
4,893,494 | 5,068,489 | ||||||
Bond denominated in foreign currencies |
466,796 | 518,907 | ||||||
Allowance for credit losses |
(5,386 | ) | (5,511 | ) | ||||
|
|
|
|
|||||
Total |
17,889,922 | 20,320,539 | ||||||
|
|
|
|
- 42 -
(2) | Changes in the loss allowance and gross carrying amount of securities at amortized cost are as follows (Unit: Korean Won in millions): |
1) | Loss allowance |
For the nine-month period ended September 30, 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 |
122 | | | 122 | ||||||||||||
Others (*) |
3 | | | 3 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
(5,386 | ) | | | (5,386 | ) | ||||||||||
|
|
|
|
|
|
|
|
(*) | Changes due to foreign currencies translation, etc. |
For the nine-month period ended September 30, 2019 | ||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||||||
Beginning balance |
(6,925 | ) | | | (6,925 | ) | ||||||||||
Transfer to 12-month expected credit losses |
| | | | ||||||||||||
Transfer to lifetime expected credit losses |
| | | | ||||||||||||
Transfer to credit-impaired financial assets |
| | | | ||||||||||||
Net reversal of loss allowance |
920 | | | 920 | ||||||||||||
Others (*) |
(5 | ) | | | (5 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
(6,010 | ) | | | (6,010 | ) | ||||||||||
|
|
|
|
|
|
|
|
(*) | Changes due to foreign currencies translation, etc. |
2) | Gross carrying amount |
For the nine-month period ended September 30, 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 |
1,712,770 | | | 1,712,770 | ||||||||||||
Disposal / Redemption |
(4,148,133 | ) | | | (4,148,133 | ) | ||||||||||
Amortization based on effective interest method |
407 | | | 407 | ||||||||||||
Others (*) |
4,214 | | | 4,214 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
17,895,308 | | | 17,895,308 | ||||||||||||
|
|
|
|
|
|
|
|
(*) | Changes due to foreign currencies translation, etc. |
For the nine-month period ended September 30, 2019 | ||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||||||
Beginning balance |
22,939,484 | | | 22,939,484 | ||||||||||||
Transfer to 12-month expected credit losses |
| | | | ||||||||||||
Transfer to lifetime expected credit losses |
| | | | ||||||||||||
Transfer to credit-impaired financial assets |
| | | | ||||||||||||
Acquisition |
3,937,980 | | | 3,937,980 | ||||||||||||
Disposal / Redemption |
(6,713,880 | ) | | | (6,713,880 | ) | ||||||||||
Amortization based on effective interest method |
(37 | ) | | | (37 | ) | ||||||||||
Others (*) |
20,975 | | | 20,975 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
20,184,522 | | | 20,184,522 | ||||||||||||
|
|
|
|
|
|
|
|
(*) | Changes due to foreign currencies translation, etc. |
- 43 -
10. | LOANS AND OTHER FINANCIAL ASSETS AT AMORTIZED COST |
(1) | Details of loans and other financial assets at amortized cost as of September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Due from banks |
13,246,055 | 14,492,223 | ||||||
Loans |
284,353,563 | 271,032,244 | ||||||
Other financial assets |
10,178,443 | 8,193,226 | ||||||
|
|
|
|
|||||
Total |
307,778,061 | 293,717,693 | ||||||
|
|
|
|
(2) | Details of due from banks are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Due from banks in local currency: |
||||||||
Due from The Bank of Korea (BOK) |
9,563,448 | 11,028,850 | ||||||
Due from depository banks |
90,358 | 82,509 | ||||||
Due from non-depository institutions |
191 | 378 | ||||||
Due from the Korea Exchange |
110 | 50,113 | ||||||
Others |
29,215 | 43,253 | ||||||
Loss allowance |
(2,257 | ) | (2,865 | ) | ||||
|
|
|
|
|||||
Sub-total |
9,681,065 | 11,202,238 | ||||||
|
|
|
|
|||||
Due from banks in foreign currencies: |
| |||||||
Due from banks on demand |
1,692,799 | 1,122,521 | ||||||
Due from banks on time |
660,782 | 1,296,842 | ||||||
Others |
1,214,791 | 872,617 | ||||||
Loss allowance |
(3,382 | ) | (1,995 | ) | ||||
|
|
|
|
|||||
Sub-total |
3,564,990 | 3,289,985 | ||||||
|
|
|
|
|||||
Total |
13,246,055 | 14,492,223 | ||||||
|
|
|
|
(3) | Details of restricted due from banks are as follows (Unit: Korean Won in millions): |
Counterparty |
September 30, 2020 | Reason of restriction | ||||||
Due from banks in local currency: |
||||||||
Due from BOK |
The BOK |
9,563,448 | Reserve deposits under the BOK Act | |||||
Due from KSFC |
KB Securities Co. Ltd. |
110 | Futures trading margin | |||||
Others |
The Korea Exchange and others |
27,535 | Central counterparty KRW margin and others | |||||
|
|
|||||||
Sub-total |
9,591,093 | |||||||
|
|
|||||||
Due from banks in foreign currencies: |
||||||||
Due from banks on demand |
The BOK and others |
1,684,968 | Reserve deposits under the BOK Act and others | |||||
Foreign currency deposits on time |
National Bank Cambodia |
59 | Reserve deposits and others | |||||
Others |
Korea Investment & Securities and others |
1,214,791 | Reserve deposits and others | |||||
|
|
|||||||
Sub-total |
2,899,818 | |||||||
|
|
|||||||
Total |
12,490,911 | |||||||
|
|
- 44 -
Counterparty |
December 31, 2019 | Reason of restriction | ||||||
Due from banks in local currency: |
||||||||
Due from BOK |
The BOK | 11,028,850 | Reserve deposits under the BOK Act | |||||
Due from KSFC |
Korea Securities Finance Corp. and others |
50,113 | Customers deposit reserve | |||||
Others |
The Korea Exchange and others |
41,645 | Central counterparty KRW margin and others | |||||
|
|
|||||||
Sub-total |
11,120,608 | |||||||
|
|
|||||||
Due from banks in foreign currencies: |
||||||||
Due from banks on demand |
The BOK and others | 1,103,917 | Reserve deposits under the BOK Act and others | |||||
Foreign currency deposits on time |
National Bank Cambodia | 58 | Reserve deposits and others | |||||
Others |
Korea Investment & Securities and others |
872,603 | Overseas futures and options trade deposits and others | |||||
|
|
|||||||
Sub-total |
1,976,578 | |||||||
|
|
|||||||
Total |
13,097,186 | |||||||
|
|
(4) | Changes in the loss allowance and gross carrying amount of due from banks are as follows (Unit: Korean Won in millions): |
1) | Allowance for credit losses |
For the nine-month period ended September 30, 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 |
| | | | ||||||||||||
Provision for allowance for credit loss |
(888 | ) | | | (888 | ) | ||||||||||
Others (*) |
109 | | | 109 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
(5,639 | ) | | | (5,639 | ) | ||||||||||
|
|
|
|
|
|
|
|
(*) | Changes due to foreign currencies translation, etc. |
For the nine-month period ended September 30, 2019 | ||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||||||
Beginning balance |
(5,387 | ) | | | (5,387 | ) | ||||||||||
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 |
786 | | | 786 | ||||||||||||
Others (*) |
330 | | | 330 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
(4,271 | ) | | | (4,271 | ) | ||||||||||
|
|
|
|
|
|
|
|
(*) | Changes due to foreign currencies translation, etc. |
- 45 -
2) | Gross carrying amount |
For the nine-month period ended September 30, 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 |
(1,272,308 | ) | | | (1,272,308 | ) | ||||||||||
Others (*) |
26,919 | | | 26,919 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
13,251,694 | | | 13,251,694 | ||||||||||||
|
|
|
|
|
|
|
|
(*) | Changes due to foreign currencies translation, etc. |
For the nine-month period ended September 30, 2019 | ||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||||||
Beginning balance |
14,156,399 | | | 14,156,399 | ||||||||||||
Transfer to 12-month expected credit losses |
| | | | ||||||||||||
Transfer to lifetime expected credit losses |
| | | | ||||||||||||
Transfer to credit-impaired financial assets |
| | | | ||||||||||||
Net decrease |
(4,528,451 | ) | | | (4,528,451 | ) | ||||||||||
Business combination |
35,901 | | | 35,901 | ||||||||||||
Others (*) |
21,714 | | | 21,714 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
9,685,563 | | | 9,685,563 | ||||||||||||
|
|
|
|
|
|
|
|
(*) | Changes due to foreign currencies translation, etc. |
(5) | Details of loans are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Loans in local currency |
236,521,465 | 221,484,049 | ||||||
Loans in foreign currencies |
20,919,221 | 18,534,270 | ||||||
Domestic bankers usance |
2,646,829 | 2,899,651 | ||||||
Credit card accounts |
8,321,224 | 8,398,605 | ||||||
Bills bought in foreign currencies |
6,590,727 | 4,772,093 | ||||||
Bills bought in local currency |
112,172 | 61,362 | ||||||
Factoring receivables |
33,351 | 20,905 | ||||||
Advances for customers on guarantees |
14,580 | 12,616 | ||||||
Private placement bonds |
279,574 | 307,339 | ||||||
Securitized loans |
2,174,507 | 2,250,042 | ||||||
Call loans |
2,417,983 | 3,290,167 | ||||||
Bonds purchased under resale agreements |
3,939,909 | 8,981,752 | ||||||
Others |
1,436,685 | 980,448 | ||||||
Loan origination costs and fees |
657,913 | 620,791 | ||||||
Discounted present value |
(5,618 | ) | (6,826 | ) | ||||
Allowance for credit losses |
(1,706,959 | ) | (1,575,020 | ) | ||||
|
|
|
|
|||||
Total |
284,353,563 | 271,032,244 | ||||||
|
|
|
|
- 46 -
(6) | Changes in the loss allowance of loans are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30, 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 |
(20,419 | ) | 19,749 | 670 | (32,413 | ) | 24,104 | 8,309 | ||||||||||||||||
Transfer to lifetime expected credit losses |
8,531 | (10,276 | ) | 1,745 | 16,401 | (40,792 | ) | 24,391 | ||||||||||||||||
Transfer to credit-impaired financial assets |
5,022 | 8,224 | (13,246 | ) | 2,539 | 11,605 | (14,144 | ) | ||||||||||||||||
Net reversal (provision) of loss allowance |
1,277 | (7,969 | ) | (85,126 | ) | (75,525 | ) | (90,303 | ) | (172,839 | ) | |||||||||||||
Recovery |
| | (52,491 | ) | | | (52,146 | ) | ||||||||||||||||
Charge-off |
| | 140,741 | | | 155,732 | ||||||||||||||||||
Disposal |
61 | 2 | 976 | | 13 | 33,645 | ||||||||||||||||||
Interest income from impaired loans |
| | 7,016 | | | 11,271 | ||||||||||||||||||
Others |
461 | 58 | 471 | 782 | (85 | ) | 23,261 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ending balance |
(90,215 | ) | (68,174 | ) | (124,832 | ) | (412,474 | ) | (393,176 | ) | (372,565 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the nine-month period ended September 30, 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 |
(14,400 | ) | 14,262 | 138 | (67,232 | ) | 58,115 | 9,117 | ||||||||||||||||
Transfer to lifetime expected credit losses |
6,467 | (6,839 | ) | 372 | 31,399 | (57,907 | ) | 26,508 | ||||||||||||||||
Transfer to credit-impaired financial assets |
50,628 | 64,597 | (115,225 | ) | 58,189 | 84,426 | (142,615 | ) | ||||||||||||||||
Net reversal (provision) of loss allowance |
(45,746 | ) | (62,535 | ) | (28,508 | ) | (119,994 | ) | (160,807 | ) | (286,473 | ) | ||||||||||||
Recovery |
| | (48,385 | ) | | | (153,022 | ) | ||||||||||||||||
Charge-off |
| | 190,299 | | | 486,772 | ||||||||||||||||||
Disposal |
| | 23,653 | 61 | 15 | 58,274 | ||||||||||||||||||
Interest income from impaired loans |
| | | | | 18,287 | ||||||||||||||||||
Others |
| | | 1,243 | (27 | ) | 23,732 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ending balance |
(77,777 | ) | (62,048 | ) | (105,698 | ) | (580,466 | ) | (523,398 | ) | (603,095 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the nine-month period ended September 30, 2019 | ||||||||||||||||||||||||
Consumers | Corporates | |||||||||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3 | |||||||||||||||||||
Beginning balance |
(114,509 | ) | (48,368 | ) | (129,906 | ) | (348,311 | ) | (349,619 | ) | (527,673 | ) | ||||||||||||
Transfer to 12-month expected credit losses |
(10,055 | ) | 9,417 | 638 | (54,361 | ) | 45,286 | 9,075 | ||||||||||||||||
Transfer to lifetime expected credit losses |
5,862 | (7,628 | ) | 1,766 | 13,477 | (23,673 | ) | 10,196 | ||||||||||||||||
Transfer to credit-impaired financial assets |
1,387 | 3,992 | (5,379 | ) | 2,764 | 15,238 | (18,002 | ) | ||||||||||||||||
Net reversal (provision) of loss allowance |
(4,808 | ) | (7,576 | ) | (121,502 | ) | 27,628 | 8,759 | (40,500 | ) | ||||||||||||||
Recovery |
| | (45,215 | ) | | | (49,284 | ) | ||||||||||||||||
Charge-off |
3,675 | 4,799 | 158,749 | 154 | 8 | 145,747 | ||||||||||||||||||
Disposal |
| | 2,009 | | | 33,044 | ||||||||||||||||||
Interest income from impaired loans |
| | 7,200 | | | 13,767 | ||||||||||||||||||
Others |
(425 | ) | (28 | ) | (498 | ) | (18,132 | ) | (250 | ) | (484 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ending balance |
(118,873 | ) | (45,392 | ) | (132,138 | ) | (376,781 | ) | (304,251 | ) | (424,114 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the nine-month period ended September 30, 2019 | ||||||||||||||||||||||||
Credit card accounts | Total | |||||||||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3 | |||||||||||||||||||
Beginning balance |
(64,787 | ) | (78,131 | ) | (116,772 | ) | (527,607 | ) | (476,118 | ) | (774,351 | ) | ||||||||||||
Transfer to 12-month expected credit losses |
(15,975 | ) | 15,826 | 149 | (80,391 | ) | 70,529 | 9,862 | ||||||||||||||||
Transfer to lifetime expected credit losses |
6,455 | (6,738 | ) | 283 | 25,794 | (38,039 | ) | 12,245 | ||||||||||||||||
Transfer to credit-impaired financial assets |
787 | 1,659 | (2,446 | ) | 4,938 | 20,889 | (25,827 | ) | ||||||||||||||||
Net reversal (provision) of loss allowance |
(48,598 | ) | (80,671 | ) | (46,282 | ) | (25,778 | ) | (79,488 | ) | (208,284 | ) | ||||||||||||
Recovery |
| | (44,274 | ) | | | (138,773 | ) | ||||||||||||||||
Charge-off |
52,135 | 77,305 | 74,305 | 55,964 | 82,112 | 378,801 | ||||||||||||||||||
Disposal |
| | | | | 35,053 | ||||||||||||||||||
Interest income from impaired loans |
| | | | | 20,967 | ||||||||||||||||||
Others |
(4 | ) | | | (18,561 | ) | (278 | ) | (982 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ending balance |
(69,987 | ) | (70,750 | ) | (135,037 | ) | (565,641 | ) | (420,393 | ) | (691,289 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
- 47 -
(7) | Changes in the gross carrying amount of loans are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30, 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 |
4,555,200 | (4,545,485 | ) | (9,715 | ) | 1,157,712 | (1,136,783 | ) | (20,929 | ) | ||||||||||||||
Transfer to lifetime expected credit losses |
(5,135,772 | ) | 5,161,330 | (25,558 | ) | (2,825,991 | ) | 2,839,992 | (14,001 | ) | ||||||||||||||
Transfer to credit-impaired financial assets |
(82,417 | ) | (105,893 | ) | 188,310 | (251,852 | ) | (93,720 | ) | 345,572 | ||||||||||||||
Charge-off |
| | (140,741 | ) | | | (155,732 | ) | ||||||||||||||||
Disposal |
(5,635,127 | ) | (4,269 | ) | (38,403 | ) | | (398 | ) | (104,818 | ) | |||||||||||||
Net increase (decrease) |
14,224,482 | (1,688,347 | ) | 15,597 | 8,122,039 | (956,679 | ) | (107,737 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ending balance |
119,179,649 | 11,266,143 | 407,164 | 140,645,887 | 5,563,010 | 682,612 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the nine-month period ended September 30, 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 |
258,784 | (258,584 | ) | (200 | ) | 5,971,696 | (5,940,852 | ) | (30,844 | ) | ||||||||||||||
Transfer to lifetime expected credit losses |
(292,625 | ) | 293,064 | (439 | ) | (8,254,388 | ) | 8,294,386 | (39,998 | ) | ||||||||||||||
Transfer to credit-impaired financial assets |
(80,228 | ) | (77,346 | ) | 157,574 | (414,497 | ) | (276,959 | ) | 691,456 | ||||||||||||||
Charge-off |
| | (190,299 | ) | | | (486,772 | ) | ||||||||||||||||
Disposal |
| | (43,781 | ) | (5,635,127 | ) | (4,667 | ) | (187,002 | ) | ||||||||||||||
Net increase (decrease) |
169,470 | (45,545 | ) | 33,546 | 22,515,991 | (2,690,571 | ) | (58,594 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ending balance |
7,333,868 | 797,421 | 184,768 | 267,159,404 | 17,626,574 | 1,274,544 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the nine-month period ended September 30, 2019 | ||||||||||||||||||||||||
Consumers | Corporates | |||||||||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3 | |||||||||||||||||||
Beginning balance |
110,619,242 | 6,028,009 | 391,494 | 131,453,727 | 5,031,258 | 1,020,658 | ||||||||||||||||||
Transfer to 12-month expected credit losses |
2,019,769 | (2,010,087 | ) | (9,682 | ) | 1,720,159 | (1,690,032 | ) | (30,127 | ) | ||||||||||||||
Transfer to lifetime expected credit losses |
(3,029,925 | ) | 3,049,741 | (19,816 | ) | (2,190,694 | ) | 2,213,546 | (22,852 | ) | ||||||||||||||
Transfer to credit-impaired financial assets |
(128,679 | ) | (101,712 | ) | 230,391 | (210,537 | ) | (137,790 | ) | 348,327 | ||||||||||||||
Charge-off |
(3,675 | ) | (4,799 | ) | (158,749 | ) | (154 | ) | (8 | ) | (145,747 | ) | ||||||||||||
Disposal |
| (29 | ) | (51,089 | ) | | | (126,722 | ) | |||||||||||||||
Net increase (decrease) |
8,059,606 | (860,967 | ) | 33,922 | 9,730,188 | (294,018 | ) | (149,932 | ) | |||||||||||||||
Business combination |
100 | | | 851 | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ending balance |
117,536,438 | 6,100,156 | 416,471 | 140,503,540 | 5,122,956 | 893,605 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the nine-month period ended September 30, 2019 | ||||||||||||||||||||||||
Credit card accounts | Total | |||||||||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3 | |||||||||||||||||||
Beginning balance |
6,861,844 | 982,772 | 208,989 | 248,934,813 | 12,042,039 | 1,621,141 | ||||||||||||||||||
Transfer to 12-month expected credit losses |
277,200 | (277,027 | ) | (173 | ) | 4,017,128 | (3,977,146 | ) | (39,982 | ) | ||||||||||||||
Transfer to lifetime expected credit losses |
(321,235 | ) | 321,594 | (359 | ) | (5,541,854 | ) | 5,584,881 | (43,027 | ) | ||||||||||||||
Transfer to credit-impaired financial assets |
(34,326 | ) | (17,992 | ) | 52,318 | (373,542 | ) | (257,494 | ) | 631,036 | ||||||||||||||
Charge-off |
(52,135 | ) | (77,305 | ) | (74,305 | ) | (55,964 | ) | (82,112 | ) | (378,801 | ) | ||||||||||||
Disposal |
| | | | (29 | ) | (177,811 | ) | ||||||||||||||||
Net increase (decrease) |
349,153 | (26,644 | ) | 49,084 | 18,138,947 | (1,181,629 | ) | (66,926 | ) | |||||||||||||||
Business combination |
100 | | | 851 | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ending balance |
7,080,501 | 905,398 | 235,554 | 265,120,479 | 12,128,510 | 1,545,630 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(8) | Details of other financial assets are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
CMA accounts |
197,000 | 199,000 | ||||||
Receivables |
7,622,794 | 5,653,997 | ||||||
Accrued income |
948,607 | 1,012,240 | ||||||
Telex and telephone subscription rights and refundable deposits |
943,304 | 949,118 | ||||||
Other assets |
546,959 | 456,010 | ||||||
Allowance for credit losses |
(80,221 | ) | (77,139 | ) | ||||
|
|
|
|
|||||
Total |
10,178,443 | 8,193,226 | ||||||
|
|
|
|
- 48 -
(9) | Changes in the allowances for credit losses on other financial assets are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30, 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 | ) | 132 | 10 | | |||||||||||
Transfer to lifetime expected credit losses |
102 | (125 | ) | 23 | | |||||||||||
Transfer to credit-impaired financial assets |
380 | 75 | (455 | ) | | |||||||||||
Net provision (reversal) of loss allowance |
(1,753 | ) | (1,334 | ) | (1,808 | ) | (4,895 | ) | ||||||||
Charge-off |
| | 414 | 414 | ||||||||||||
Disposal |
| | 1,131 | 1,131 | ||||||||||||
Others |
701 | | (433 | ) | 268 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
(3,908 | ) | (2,918 | ) | (73,395 | ) | (80,221 | ) | ||||||||
|
|
|
|
|
|
|
|
For the nine-month period ended September 30, 2019 | ||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||||||
Beginning balance |
(3,469 | ) | (1,971 | ) | (62,501 | ) | (67,941 | ) | ||||||||
Transfer to 12-month expected credit losses |
(207 | ) | 199 | 8 | | |||||||||||
Transfer to lifetime expected credit losses |
106 | (139 | ) | 33 | | |||||||||||
Transfer to credit-impaired financial assets |
21 | 181 | (202 | ) | | |||||||||||
Net provision (reversal) of loss allowance |
125 | 27 | (3,776 | ) | (3,624 | ) | ||||||||||
Charge-off |
| | 1,760 | 1,760 | ||||||||||||
Disposal |
| | 1,338 | 1,338 | ||||||||||||
Business combination |
(388 | ) | | (1,553 | ) | (1,941 | ) | |||||||||
Others |
(39 | ) | | | (39 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
(3,851 | ) | (1,703 | ) | (64,893 | ) | (70,447 | ) | ||||||||
|
|
|
|
|
|
|
|
(10) | Changes in the gross carrying amount of other financial assets are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30, 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 | (8,743 | ) | (17 | ) | | ||||||||||
Transfer to lifetime expected credit losses |
(12,595 | ) | 12,608 | (13 | ) | | ||||||||||
Transfer to credit-impaired financial assets |
(2,153 | ) | (728 | ) | 2,881 | | ||||||||||
Charge-off |
| | (414 | ) | (414 | ) | ||||||||||
Disposal |
| | (1,311 | ) | (1,311 | ) | ||||||||||
Net increase (decrease) |
1,938,191 | (22,050 | ) | 73,883 | 1,990,024 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
9,992,047 | 73,734 | 192,883 | 10,258,664 | ||||||||||||
|
|
|
|
|
|
|
|
For the nine-month period ended September 30, 2019 | ||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||||||
Beginning balance |
7,454,390 | 28,193 | 72,007 | 7,554,590 | ||||||||||||
Transfer to 12-month expected credit losses |
6,992 | (6,977 | ) | (15 | ) | | ||||||||||
Transfer to lifetime expected credit losses |
(10,867 | ) | 10,928 | (61 | ) | | ||||||||||
Transfer to credit-impaired financial assets |
(930 | ) | (1,090 | ) | 2,020 | | ||||||||||
Charge-off |
| | (1,760 | ) | (1,760 | ) | ||||||||||
Disposal |
| | (1,204 | ) | (1,204 | ) | ||||||||||
Net increase (decrease) |
5,874,579 | (3,384 | ) | (1,671 | ) | 5,869,524 | ||||||||||
Business combination |
4,117 | | 1,941 | 6,058 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
13,328,281 | 27,670 | 71,257 | 13,427,208 | ||||||||||||
|
|
|
|
|
|
|
|
- 49 -
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 Groups 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 1fair 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 Groups 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.
- 50 -
(2) | Fair value hierarchy of financial assets and liabilities measured at fair value are as follows (Unit: Korean Won in millions): |
September 30, 2020 | ||||||||||||||||
Level 1 (*) | Level 2 (*) | Level 3 | Total | |||||||||||||
Financial assets: |
||||||||||||||||
Financial assets at FVTPL |
||||||||||||||||
Deposits |
45,704 | | | 45,704 | ||||||||||||
Debt securities |
603,734 | 2,040,720 | 6,087 | 2,650,541 | ||||||||||||
Equity securities |
23,755 | | 484,998 | 508,753 | ||||||||||||
Capital contributions |
| | 641,853 | 641,853 | ||||||||||||
Beneficiary certificates |
31,178 | 617,721 | 1,614,878 | 2,263,777 | ||||||||||||
Loans |
| 154,770 | 196,132 | 350,902 | ||||||||||||
Derivative assets (Designated for trading) |
14,867 | 3,968,257 | 44,620 | 4,027,744 | ||||||||||||
Others |
| | 76,548 | 76,548 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Sub-total |
719,238 | 6,781,468 | 3,065,116 | 10,565,822 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial assets at FVTOCI |
||||||||||||||||
Debt securities |
2,691,712 | 26,021,384 | | 28,713,096 | ||||||||||||
Equity securities |
425,455 | | 505,796 | 931,251 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Sub-total |
3,117,167 | 26,021,384` | 505,796 | 29,644,347 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative assets (Designated for hedging) |
| 228,580 | | 228,580 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
3,836,405 | 33,031,432 | 3,570,912 | 40,438,749 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial liabilities: |
||||||||||||||||
Financial liabilities at FVTPL |
||||||||||||||||
Deposits due to customers |
45,886 | | | 45,886 | ||||||||||||
Derivative liabilities (Designated for trading) |
3,170 | 3,482,420 | 23,303 | 3,508,893 | ||||||||||||
Securities sold |
246,596 | | | 246,596 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Sub-total |
295,652 | 3,482,420 | 23,303 | 3,801,375 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial liabilities at FVTPL designated as upon initial recognition |
||||||||||||||||
Equity-linked securities |
| | 16,456 | 16,456 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative liabilities (Designated for hedging) |
| 23,039 | | 23,039 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
295,652 | 3,505,459 | 39,759 | 3,840,870 | ||||||||||||
|
|
|
|
|
|
|
|
(*) | 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. |
- 51 -
December 31, 2019 | ||||||||||||||||
Level 1 (*) | Level 2 (*) | Level 3 | Total | |||||||||||||
Financial assets: |
||||||||||||||||
Financial assets at FVTPL |
||||||||||||||||
Deposits |
27,901 | | | 27,901 | ||||||||||||
Debt securities |
420,330 | 1,910,929 | 5,826 | 2,337,085 | ||||||||||||
Equity securities |
157,895 | 1,834 | 528,621 | 688,350 | ||||||||||||
Capital contributions |
| | 515,199 | 515,199 | ||||||||||||
Beneficiary certificates |
1 | 90,498 | 1,275,734 | 1,366,233 | ||||||||||||
Loans |
| 59,844 | 152,629 | 212,473 | ||||||||||||
Derivative assets (Designated for trading) |
3,057 | 2,893,798 | 25,048 | 2,921,903 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Sub-total |
609,184 | 4,956,903 | 2,503,057 | 8,069,144 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial assets at FVTOCI |
||||||||||||||||
Debt securities |
2,146,163 | 24,568,261 | | 26,714,424 | ||||||||||||
Equity securities |
441,672 | | 493,698 | 935,370 | ||||||||||||
Securities loaned |
| 80,737 | | 80,737 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Sub-total |
2,587,835 | 24,648,998 | 493,698 | 27,730,531 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative assets (Designated for hedging) |
| 121,131 | | 121,131 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
3,197,019 | 29,727,032 | 2,996,755 | 35,920,806 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial liabilities: |
||||||||||||||||
Financial liabilities at FVTPL |
||||||||||||||||
Deposits due to customers |
27,530 | | | 27,530 | ||||||||||||
Derivative liabilities (Designated for trading) |
4,336 | 2,766,771 | 72,039 | 2,843,146 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Sub-total |
31,866 | 2,766,771 | 72,039 | 2,870,676 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial liabilities at FVTPL designated as upon initial recognition |
||||||||||||||||
Equity-linked securities |
| | 87,626 | 87,626 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative liabilities (Designated for hedging) |
| 6,516 | 321 | 6,837 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
31,866 | 2,773,287 | 159,986 | 2,965,139 | ||||||||||||
|
|
|
|
|
|
|
|
(*) | 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. |
- 52 -
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:
1) | Valuation methods and input variables for each type of financial instrument classified into level 2 in September 30, 2020 and December 31, 2019 are as follows: |
Valuation methods |
Input variables | |||
Loans |
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 | ||
Debt securities and Securities loaned |
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, credit spread | ||
Beneficiary certificates |
The beneficiary certificates classified as Level 2 are measured through Net Asset Value Method. |
Value of underlying assets such as bonds | ||
Derivatives |
The fair value is measured through option model (Closed Form), DCF Model, FDM, Monte Carlo Simulation, etc. |
Risk-free market rate, forward rate, foreign exchange rate, market rate, stock prices and value of underlying assets, volatility, and etc. |
2) | Valuation methods and input variables for each type of financial instrument classified into level 3 in September 30, 2020 and December 31, 2019 are as follows: |
Valuation methods |
Input variables | |||
Loans |
The fair value of loans is measured by the Binomial Tree and LSMC given the values of underlying assets and volatility. |
Values of underlying assets, volatility | ||
Debt securities |
The fair value is measured by discounting the projected cash flows of debt securities by applying the market discount rate that has been applied to a proxy company that has similar credit rating to the issuers of the securities. |
Risk-free market rate, credit spread, growth rate, etc. | ||
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, and LSMC, 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, etc. | ||
Derivatives |
Fair value is measured by models such as option model (Closed form), DCF model, FDM and Monte Carlo Simulation. |
Risk-free market rate, market rate, values of underlying assets such as foreign exchange rate and stock prices, volatility, etc. | ||
Equity-linked securities |
Fair value is measured by Hull-White model. |
Volatility of underlying assets, correlation coefficient, discount rate, regression coefficient | ||
Others |
Fair value is measured by DCF model, LSMC, etc. |
Stock prices, volatility of underlying assets, etc. |
- 53 -
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 | ||||||
Loans, convertible bonds, bond with options and others |
Binomial Tree | Stock, Volatility of underlying asset | 30.91% | Variation of fair value increases as volatility of underlying asset increases. | ||||||
LSMC |
Stock, Volatility of underlying asset | 22.31% | 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 | 26.20%~273.30% | Variation of fair value increases as volatility of underlying assets increases. | ||||||||
Equity related |
Correlation coefficient | 0.31~0.74 | Variation of fair value increases as correlation coefficient increases. | |||||||
Volatility of underlying asset | 28.93%~29.91% | Variation of fair value increases as volatility of underlying assets increases. | ||||||||
DCF model | Currency 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 | 26.20%~273.30% | Variation of fair value increases as volatility of underlying assets increases. | ||||||||
Equity related |
Correlation coefficient | 0.31~0.74 | Variation of fair value increases as correlation coefficient increases. | |||||||
Volatility of underlying asset | 28.93%~29.91% | Variation of fair value increases as volatility of underlying assets increases. | ||||||||
Equity-linked securities |
Monte Carlo Simulation and others |
Equity related | Correlation coefficient |
0.31~0.74 | Fair value of equity-linked securities increases if both historical volatility and correlation coefficient increase. However, when correlation coefficient decreases despite the increase in volatility of underlying asset, the fair value variation of equity-linked securities may decrease. | |||||
Volatility of underlying asset | 28.93%~65.06% |
- 54 -
Fair value measurement technique |
Type |
Input variable |
Range |
Impact of changes in significant | ||||||
Equity securities, capital contributions, and beneficiary certificates |
Binomial Tree | Stock, Volatility of underlying asset |
0.00% | Variation of fair value increases as volatility of underlying asset increases. | ||||||
LSMC |
Stock, Volatility of underlying asset |
22.31%~33.45% | Variation of fair value increases as volatility of underlying asset increases. | |||||||
DCF model |
Terminal growth rate | 0~1% | Fair value increases as terminal growth rate increases. | |||||||
Discount rate | 4.09%~35.99% | Fair value increases as discount rate decreases. | ||||||||
Liquidation value | | Variation of liquidation value increases as volatility of underlying assets increases | ||||||||
Others |
DCF model | Discount rate | 13.91% | Variation of fair value increases as volatility of underlying asset increases. | ||||||
Terminal growth rate | 1.00% | Fair value increases as terminal growth rate increases. | ||||||||
LSMC |
Stock, Volatility of underlying asset |
17.86%~35.03% | 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.
(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 nine-month period ended September 30, 2020 | ||||||||||||||||||||||||||||
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 |
5,826 | 337 | | | (76 | ) | | 6,087 | ||||||||||||||||||||
Equity securities |
464,741 | 31,537 | | 2,837 | (14,149 | ) | 32 | 484,998 | ||||||||||||||||||||
Capital contributions |
515,199 | 20,873 | | 144,875 | (39,094 | ) | | 641,853 | ||||||||||||||||||||
Beneficiary certificates |
1,275,734 | 15,230 | | 493,404 | (169,490 | ) | | 1,614,878 | ||||||||||||||||||||
Loans |
152,629 | 6,244 | | 125,654 | (88,395 | ) | | 196,132 | ||||||||||||||||||||
Derivative assets |
25,048 | 41,478 | | 10,161 | (19,843 | ) | (12,224 | ) | 44,620 | |||||||||||||||||||
Others |
63,880 | 3,670 | | 8,998 | | | 76,548 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Sub-total |
2,503,057 | 119,369 | | 785,929 | (331,047 | ) | (12,192 | ) | 3,065,116 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Financial assets at FVTOCI |
||||||||||||||||||||||||||||
Equity securities |
493,698 | | (19,452 | ) | 31,836 | (2,478 | ) | 2,192 | 505,796 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
2,996,755 | 119,369 | (19,452 | ) | 817,765 | (333,525 | ) | (10,000 | ) | 3,570,912 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Financial liabilities: |
||||||||||||||||||||||||||||
Financial liabilities at FVTPL |
||||||||||||||||||||||||||||
Derivative liabilities |
72,039 | 18,282 | | 4,762 | (53,246 | ) | (18,534 | ) | 23,303 | |||||||||||||||||||
Financial liabilities at FVTPL designated as upon initial recognition |
||||||||||||||||||||||||||||
Equity-linked securities |
87,626 | (4,141 | ) | | | (67,029 | ) | | 16,456 | |||||||||||||||||||
Derivative liabilities (Designated for hedging) |
321 | | | | (321 | ) | | | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
159,986 | 14,141 | | 4,762 | (120,596 | ) | (18,534 | ) | 39,759 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | For financial liabilities, positive numbers represent losses that increase balance and negative numbers represent gains that decrease balance. The interim statements of comprehensive income includes gain of 116,771 million won included in net gain (loss) on financial assets at FVTPL and net gain (loss) on financial assets at FVTOCI pertaining to the assets and liabilities held by the Group at the end of the period. |
(*2) | The Group recognizes transfers between levels at the end of reporting period within which events have occurred or conditions have changed. |
- 55 -
For the nine-month period ended September 30, 2019 | ||||||||||||||||||||||||||||||||
January 1, 2019 |
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 |
8,389 | | 324 | | 2,001 | (5,059 | ) | | 5,655 | |||||||||||||||||||||||
Equity securities |
401,860 | | 48,194 | | 54,450 | (4,703 | ) | | 499,801 | |||||||||||||||||||||||
Capital contributions |
422,614 | 707 | (6,431 | ) | | 105,477 | (61,499 | ) | | 460,868 | ||||||||||||||||||||||
Beneficiary certificates |
854,299 | | 18,369 | | 218,353 | (150,821 | ) | | 940,200 | |||||||||||||||||||||||
Loans |
180,450 | | (2,331 | ) | | 54,993 | (64,747 | ) | | 168,365 | ||||||||||||||||||||||
Derivative assets |
48,798 | | 15,648 | | 3,946 | (37,277 | ) | 2,761 | 33,876 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Sub-total |
1,916,410 | 707 | 73,773 | | 439,220 | (324,106 | ) | 2,761 | 2,108,765 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Financial assets at FVTOCI |
||||||||||||||||||||||||||||||||
Equity securities |
468,847 | 1,408 | | 20,604 | 649 | (75 | ) | (1 | ) | 491,432 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
2,385,257 | 2,115 | 73,773 | 20,604 | 439,869 | (324,181 | ) | 2,760 | 2,600,197 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Financial liabilities: |
||||||||||||||||||||||||||||||||
Financial liabilities at FVTPL |
||||||||||||||||||||||||||||||||
Derivative liabilities |
16,691 | | 46,063 | | (6,481 | ) | (14,409 | ) | (2,729 | ) | 39,135 | |||||||||||||||||||||
Financial liabilities at FVTPL designated as upon initial recognition |
||||||||||||||||||||||||||||||||
Equity-linked securities |
164,767 | | 27,122 | | 1,809 | (108,142 | ) | | 85,556 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
181,458 | | 73,185 | | (4,672 | ) | (122,551 | ) | (2,729 | ) | 124,691 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | The losses that increase financial liabilities are presented as positive amounts, and the gains that decrease financial liabilities are presented as negative amounts. The loss amounting to 58,830 million won for the nine-month period ended September 30, 2019, which is from financial assets and liabilities that the Group holds as at the end of the period, has been recognized in net gain (loss) on financial assets at FVTPL and net gain (loss) on financial assets at FVTOCI in the consolidated statement of comprehensive income. |
(*2) | The Group recognizes transfers between levels at the end of reporting period within which events have occurred or conditions have changed. |
- 56 -
(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 3,610,671 million won and 3,156,741 million won as of September 30, 2020 and December 31, 2019 respectively, equity instruments of 3,038,658 million won and 2,194,320 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 September 30, 2020 and December 31, 2019 is as follows (Unit: Korean Won in millions):
September 30, 2020 | ||||||||||||||||
Net income (loss) | Other comprehensive income (loss) | |||||||||||||||
Favorable | Unfavorable | Favorable | Unfavorable | |||||||||||||
Financial assets: |
||||||||||||||||
Financial assets at FVTPL |
||||||||||||||||
Derivative assets (*1) |
2,124 | (2,465 | ) | | | |||||||||||
Loans (*2) |
1,181 | (1,202 | ) | | | |||||||||||
Debt securities |
29 | (28 | ) | | | |||||||||||
Equity securities (*2) (*3) (*4) |
10,338 | (8,696 | ) | | | |||||||||||
Beneficiary certificates (*4) |
936 | (965 | ) | | | |||||||||||
Others (*2) |
337 | (309 | ) | | | |||||||||||
Financial assets at FVTOCI |
||||||||||||||||
Equity securities (*3) (*4) |
| | 24,034 | (18,537 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
14,945 | (13,665 | ) | 24,034 | (18,537 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial liabilities: |
||||||||||||||||
Financial liabilities at FVTPL |
||||||||||||||||
Derivative liabilities (*1) |
1,015 | (804 | ) | | | |||||||||||
Financial liabilities at FVTPL designated as upon initial recognition |
||||||||||||||||
Equity-linked securities (*1) |
33 | (8 | ) | | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
1,048 | (812 | ) | | | |||||||||||
|
|
|
|
|
|
|
|
(*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 (0~1%) 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%. |
- 57 -
December 31, 2019 | ||||||||||||||||
Net income (loss) | Other comprehensive income (loss) | |||||||||||||||
Favorable | Unfavorable | Favorable | Unfavorable | |||||||||||||
Financial assets: |
||||||||||||||||
Financial assets at FVTPL |
||||||||||||||||
Derivative assets (*1) |
640 | (935 | ) | | | |||||||||||
Loans (*2) |
152 | (128 | ) | | | |||||||||||
Debt securities |
652 | (640 | ) | | | |||||||||||
Equity securities (*3) (*4) |
16,104 | (10,929 | ) | | | |||||||||||
Beneficiary certificates (*4) |
1,125 | (1,125 | ) | | | |||||||||||
Financial assets at FVTOCI |
||||||||||||||||
Equity securities (*3) (*4) |
| | 26,380 | (11,981 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
18,673 | (13,757 | ) | 26,380 | (11,981 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial liabilities: |
||||||||||||||||
Financial liabilities at FVTPL |
||||||||||||||||
Derivative liabilities (*1) |
1,054 | (816 | ) | | | |||||||||||
Financial liabilities at FVTPL designated as upon initial recognition |
||||||||||||||||
Equity-linked securities (*1) |
136 | (142 | ) | | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
1,190 | (958 | ) | | | |||||||||||
|
|
|
|
|
|
|
|
(*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 (0~1%) and discount rate or liquidation value (-1~1%). The growth rate, discount rate, and liquidation value are major unobservable variables. |
(*4) | Even if the sensitivity analysis of the capital contributions and beneficiary certificates is not possible in practice, fair value changes of beneficiary certificates and other securities whose major unobservable variables are composed of the real estate are calculated by increasing or decreasing price fluctuation rate of real estate which is underlying assets and discount rate by 1%. |
- 58 -
(5) | Fair value and carrying amount of financial assets and liabilities that are recorded at amortized cost are as follows (Unit: Korean Won in millions): |
September 30, 2020 | ||||||||||||||||||||
Fair value | Book value |
|||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Financial assets: |
||||||||||||||||||||
Securities at amortized cost |
2,895,147 | 15,328,070 | | 18,223,217 | 17,889,922 | |||||||||||||||
Loans and other financial assets at amortized cost |
17,110 | | 304,705,608 | 304,722,718 | 307,778,061 | |||||||||||||||
Financial liabilities: |
||||||||||||||||||||
Deposits due to customers |
| 278,899,205 | | 278,899,205 | 278,588,976 | |||||||||||||||
Borrowings |
| 22,745,081 | | 22,745,081 | 22,768,493 | |||||||||||||||
Debentures |
| 30,525,301 | | 30,525,301 | 29,964,791 | |||||||||||||||
Other financial liabilities |
| 17,329,702 | 202,210 | 17,531,912 | 17,537,263 |
December 31, 2019 | ||||||||||||||||||||
Fair value | Book value |
|||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Financial assets: |
||||||||||||||||||||
Securities at amortized cost |
3,123,898 | 17,378,920 | | 20,502,818 | 20,320,539 | |||||||||||||||
Loans and other financial assets at amortized cost |
25,902 | 54,507 | 283,058,699 | 283,139,108 | 293,717,693 | |||||||||||||||
Financial liabilities: |
||||||||||||||||||||
Deposits due to customers |
| 264,909,974 | | 264,909,974 | 264,685,578 | |||||||||||||||
Borrowings |
| 18,919,018 | | 18,919,018 | 18,998,920 | |||||||||||||||
Debentures |
| 31,173,189 | | 31,173,189 | 30,858,055 | |||||||||||||||
Other financial liabilities |
| 17,693,559 | | 17,693,559 | 17,706,767 |
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 |
- 59 -
(6) | Financial instruments by category |
Carrying amounts of financial assets and liabilities by each category are as follows (Unit: Korean Won in millions):
September 30, 2020 | ||||||||||||||||||||
Financial asset at FVTPL |
Financial assets at FVTOCI |
Financial assets at amortized cost |
Derivatives assets (Designated for hedging) |
Total | ||||||||||||||||
Financial assets |
||||||||||||||||||||
Deposits |
45,704 | | 13,246,055 | | 13,291,759 | |||||||||||||||
Securities |
6,141,472 | 29,644,347 | 17,889,922 | | 53,675,741 | |||||||||||||||
Loans |
350,902 | | 284,353,563 | | 284,704,465 | |||||||||||||||
Derivative assets |
4,027,744 | | | 228,580 | 4,256,324 | |||||||||||||||
Other financial assets |
| | 10,178,443 | | 10,178,443 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
10,565,822 | 29,644,347 | 325,667,983 | 228,580 | 366,106,732 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
September 30, 2020 | ||||||||||||||||||||
Financial liabilities at FVTPL |
Financial liabilities designated at FVTPL |
Financial liabilities at amortized cost |
Derivatives liabilities (Designated for hedging) |
Total | ||||||||||||||||
Financial liabilities |
||||||||||||||||||||
Deposits due to customers |
45,886 | | 278,588,976 | | 278,634,862 | |||||||||||||||
Borrowings |
246,596 | 16,456 | 22,768,493 | | 23,031,545 | |||||||||||||||
Debentures |
| | 29,964,791 | | 29,964,791 | |||||||||||||||
Derivative liabilities |
3,508,893 | | | 23,039 | 3,531,932 | |||||||||||||||
Other financial liabilities |
| | 17,537,263 | | 17,537,263 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
3,801,375 | 16,456 | 348,859,523 | 23,039 | 352,700,393 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2019 | ||||||||||||||||||||
Financial asset at FVTPL |
Financial assets at FVTOCI |
Financial assets at amortized cost |
Derivatives assets (Designated for hedging) |
Total | ||||||||||||||||
Financial assets |
||||||||||||||||||||
Deposits |
27,901 | | 14,492,223 | | 14,520,124 | |||||||||||||||
Securities |
4,906,867 | 27,730,531 | 20,320,539 | | 52,957,937 | |||||||||||||||
Loans |
212,473 | | 271,032,244 | | 271,244,717 | |||||||||||||||
Derivative assets |
2,921,903 | | | 121,131 | 3,043,034 | |||||||||||||||
Other financial assets |
| | 8,193,226 | | 8,193,226 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
8,069,144 | 27,730,531 | 314,038,232 | 121,131 | 349,959,038 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2019 | ||||||||||||||||||||
Financial liabilities at FVTPL |
Financial liabilities designated at FVTPL |
Financial liabilities at amortized cost |
Derivatives liabilities (Designated for hedging) |
Total | ||||||||||||||||
Financial liabilities |
||||||||||||||||||||
Deposits due to customers |
27,530 | | 264,685,578 | | 264,713,108 | |||||||||||||||
Borrowings |
| 87,626 | 18,998,920 | | 19,086,546 | |||||||||||||||
Debentures |
| | 30,858,055 | | 30,858,055 | |||||||||||||||
Derivative liabilities |
2,843,146 | | | 6,837 | 2,849,983 | |||||||||||||||
Other financial liabilities (*) |
| | 17,769,531 | | 17,769,531 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
2,870,676 | 87,626 | 332,312,084 | 6,837 | 335,277,223 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(*) | Other financial liabilities include 62,764 million won of financial guarantee liabilities measured at amortized cost included in provisions. |
- 60 -
(7) | Income or expense from financial instruments by category |
Income or expense from financial assets and liabilities by each category during the nine-month period ended September 30, 2020 and 2019 are as follows (Unit: Korean Won in millions):
For the nine-month period ended September 30, 2020 | ||||||||||||||||||||
Interest Income (expense) |
Fees and Commissions Income (expense) |
Provision (reversal) of credit loss |
Others | Total | ||||||||||||||||
Financial assets at FVTPL |
38,855 | | | 613,994 | 652,849 | |||||||||||||||
Financial assets at FVTOCI |
344,380 | 209 | (1,425 | ) | 35,754 | 378,918 | ||||||||||||||
Securities at amortized cost |
294,673 | | 122 | | 294,795 | |||||||||||||||
Loans and other financial assets at amortized cost |
6,510,266 | 39,638 | (573,057 | ) | 40,319 | 6,017,166 | ||||||||||||||
Financial liabilities at amortized cost |
(2,752,819 | ) | | | | (2,752,819 | ) | |||||||||||||
Net derivatives (designated for hedging) |
| | | (4,690 | ) | (4,690 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
4,435,355 | 39,847 | (574,360 | ) | 685,377 | 4,586,219 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
For the nine-month period ended September 30, 2019 | ||||||||||||||||||||
Interest Income (expense) |
Fees and Commissions Income (expense) |
Provision (reversal) of credit loss |
Others | Total | ||||||||||||||||
Financial assets at FVTPL |
40,642 | 76,432 | | 166,934 | 284,008 | |||||||||||||||
Financial assets at FVTOCI |
344,183 | | (3,444 | ) | 27,266 | 368,005 | ||||||||||||||
Securities at amortized cost |
332,617 | | 920 | | 333,537 | |||||||||||||||
Loans and other financial assets at amortized cost |
7,250,532 | 214,065 | (316,388 | ) | 99,107 | 7,247,316 | ||||||||||||||
Financial liabilities at amortized cost |
(3,551,124 | ) | | | | (3,551,124 | ) | |||||||||||||
Net derivatives (designated for hedging) |
| | | 54,885 | 54,885 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
4,416,850 | 290,497 | (318,912 | ) | 348,192 | 4,736,627 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
- 61 -
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.
1) | 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):
September 30, 2020 | December 31, 2019 | |||||||||
Assets transferred |
Financial assets at FVTPL | 450,888 | 407,985 | |||||||
Financial assets at FVTOCI | 105,058 | 56,975 | ||||||||
Securities at amortized cost | 42,361 | 42,841 | ||||||||
Loans and other financial assets at amortized cost | 286,058 | 82,594 | ||||||||
|
|
|
|
|||||||
Total |
884,365 | 590,395 | ||||||||
|
|
|
|
|||||||
Related liabilities |
Bonds sold under repurchase agreements | 903,583 | 569,002 | |||||||
|
|
|
|
2) | 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):
September 30, 2020 |
December 31, 2019 |
Loaned to | ||||||||||
Financial assets at FVTOCI |
Korean financial institutions debt securities and others | 70,351 | 80,737 | Korea Securities Finance Corporation |
The details of the transferred financial assets that do not meet the conditions of derecognition in their entirety, such as disposal of securities under repurchase agreement or securities loaned, are explained in Note 18. The Group does not have continuing involvement in transferred financial assets.
- 62 -
(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 Groups 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 partys 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 partys 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 counterpartys 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 September 30, 2020 and December 31, 2019, 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):
September 30, 2020 | ||||||||||||||||||||||||
Gross amounts of recognized financial assets |
Gross amounts of recognized financial assets setoff |
Net amounts of financial assets presented |
Related amounts not setoff in the consolidated statement of financial position |
Net amounts |
||||||||||||||||||||
Netting agreements and others |
Cash collateral received |
|||||||||||||||||||||||
Financial assets: |
||||||||||||||||||||||||
Derivative assets (*1) |
3,776,019 | | 3,776,019 | 9,131,440 | 409,698 | 1,014,794 | ||||||||||||||||||
Receivable spot exchange (*2) |
6,779,913 | | 6,779,913 | |||||||||||||||||||||
Bonds purchased under resale agreements (*2) |
3,939,909 | | 3,939,909 | 3,939,909 | | | ||||||||||||||||||
Domestic exchange settlement debits (*2) (*6) |
27,577,986 | 27,224,781 | 353,205 | | | 353,205 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
42,073,827 | 27,224,781 | 14,849,046 | 13,071,349 | 409,698 | 1,367,999 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Financial liabilities: |
||||||||||||||||||||||||
Derivative liabilities (*1) |
2,813,803 | | 2,813,803 | 8,888,665 | 223,782 | 498,951 | ||||||||||||||||||
Equity-linked securities in short position (*3) |
16,456 | | 16,456 | |||||||||||||||||||||
Payable spot exchange (*4) |
6,781,139 | | 6,781,139 | |||||||||||||||||||||
Bonds sold under repurchase agreements (*5) |
903,583 | | 903,583 | 445,483 | 458,100 | | ||||||||||||||||||
Domestic exchange settlement credits (*4) (*6) |
28,508,172 | 27,224,781 | 1,283,391 | 1,278,387 | | 5,004 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
39,023,153 | 27,224,781 | 11,798,372 | 10,612,535 | 681,882 | 503,955 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*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.
- 63 -
December 31, 2019 | ||||||||||||||||||||||||
Gross amounts of recognized financial assets |
Gross amounts of recognized financial assets setoff |
Net amounts of financial assets presented |
Related amounts not setoff in the consolidated statement of financial position |
Net amounts |
||||||||||||||||||||
Netting agreements and others |
Cash collateral received |
|||||||||||||||||||||||
Financial assets: |
||||||||||||||||||||||||
Derivative assets (*1) |
3,032,894 | | 3,032,894 | 7,058,885 | 111,122 | 975,093 | ||||||||||||||||||
Receivable spot exchange (*2) |
5,112,206 | | 5,112,206 | |||||||||||||||||||||
Bonds purchased under resale agreements (*2) |
8,981,752 | | 8,981,752 | 8,981,752 | | | ||||||||||||||||||
Domestic exchange settlement debits (*2) (*6) |
31,642,486 | 31,269,258 | 373,228 | | | 373,228 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
48,769,338 | 31,269,258 | 17,500,080 | 16,040,637 | 111,122 | 1,348,321 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Financial liabilities: |
||||||||||||||||||||||||
Derivative liabilities (*1) |
2,824,449 | | 2,824,449 | 7,071,549 | 172,488 | 779,424 | ||||||||||||||||||
Equity-linked securities in short position (*3) |
87,626 | | 87,626 | |||||||||||||||||||||
Payable spot exchange (*4) |
5,111,386 | | 5,111,386 | |||||||||||||||||||||
Bonds sold under repurchase agreements (*5) |
569,002 | | 569,002 | 180,402 | 388,600 | | ||||||||||||||||||
Domestic exchange settlement credits (*4) (*6) |
32,531,186 | 31,269,258 | 1,261,928 | 1,257,280 | | 4,648 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
41,123,649 | 31,269,258 | 9,854,391 | 8,509,231 | 561,088 | 784,072 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*1) The items include derivatives held for trading, derivatives 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.
- 64 -
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 |
Main business |
September 30, 2020 |
December 31, 2019 |
Location | Financial statements as of |
|||||||||||||
Woori Bank: |
||||||||||||||||||
W Service Networks Co., Ltd. (*1) |
Freight & staffing services | 4.9 | 4.9 | Korea | 2020.08.31(*5) | |||||||||||||
Korea Credit Bureau Co., Ltd. (*2) |
Credit information | 9.9 | 9.9 | Korea | 2020.09.30 | |||||||||||||
Korea Finance Security Co., Ltd. (*1) |
Security service | 15.0 | 15.0 | Korea | 2020.08.31(*5) | |||||||||||||
Saman Corporation (*2) |
General construction Technology service | 9.2 | 9.2 | Korea | 2020.06.30(*5) | |||||||||||||
Wongwang Co., Ltd. (*4) |
Wholesale and real estate | 29.0 | 29.0 | Korea | | |||||||||||||
Sejin Construction Co., Ltd. (*4) |
Construction | 29.6 | 29.6 | Korea | | |||||||||||||
ARES-TECH Co., Ltd. (*4) |
Electronic component manufacturing | 23.4 | 23.4 | Korea | | |||||||||||||
Reading Doctors Co., Ltd. (*4) |
Other services | 35.4 | 35.4 | Korea | | |||||||||||||
Cultizm Korea LTD Co., Ltd. (*4) |
Wholesale and retail sales | 31.3 | 31.3 | Korea | | |||||||||||||
NK Eng Co., Ltd. (*4) |
Manufacturing | 23.1 | 23.1 | Korea | | |||||||||||||
Goodskt Co., Ltd. (*4) |
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 | 2020.09.30 | |||||||||||||
2016KIF-IMM Woori Bank Technology Venture Fund |
Other financial services | 20.0 | 20.0 | Korea | 2020.09.30 | |||||||||||||
K BANK Co., Ltd. (*2) (*7) |
Finance | 26.2 | 14.5 | Korea | 2020.08.31(*5) | |||||||||||||
Smart Private Equity Fund No.2 |
Other financial services | 20.0 | 20.0 | Korea | 2020.09.30 | |||||||||||||
Woori Bank-Company K Korea Movie Asset Fund |
Other financial services | 25.0 | 25.0 | Korea | 2020.09.30 | |||||||||||||
Well to Sea No. 3 Private Equity Fund (*6) |
Finance | 50.0 | 50.0 | Korea | 2020.06.30(*5) | |||||||||||||
Partner One Value Up I Private Equity Fund |
Other financial services | 23.3 | 23.3 | Korea | 2020.09.30 | |||||||||||||
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership |
Other financial services | 20.0 | 20.0 | Korea | 2020.09.30 | |||||||||||||
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund |
Other financial services | 25.0 | 25.0 | Korea | 2020.09.30 | |||||||||||||
LOTTE CARD Co., Ltd. |
Credit card and installment financing | 20.0 | 20.0 | Korea | 2020.06.30(*5) | |||||||||||||
Together-Korea Government Private Pool Private Securities Investment Trust No.3 |
Securities Investment | 100.0 | | Korea | 2020.09.30 | |||||||||||||
Genesis Environmental Energy Company 1st Private Equity Fund |
Trust and collective investment | 24.8 | | Korea | 2020.09.30 | |||||||||||||
Japanese Hotel Real Estate Private Equity Fund 2 |
Other financial services | 19.9 | 19.9 | Korea | 2020.09.30 | |||||||||||||
Woori G Senior Loan No.1 |
Investment trust and discretionary investment business | 20.6 | | Korea | 2020.09.30 | |||||||||||||
Woori G Clean Energy No.1 |
Investment trust and discretionary investment business | 50.0 | | Korea | 2020.09.30 | |||||||||||||
Woori Asset Management Co. Ltd.: |
- 65 -
Percentage of ownership (%) |
||||||||||||||||
Joint ventures and associates |
Main business |
September 30, 2020 |
December 31, 2019 |
Location | Financial statements as of | |||||||||||
Woori High plus G.B. Securities Feeder Fund1(G.B.) |
Collective investment business | 22.2 | | Korea | 2020.09.30 | |||||||||||
Woori Private Equity Asset Management Co., Ltd.: |
||||||||||||||||
Uri Hanhwa Eureka Private Equity Fund (*2) |
Other financial services | 0.8 | 0.8 | Korea | 2020.09.30 | |||||||||||
Japanese Hotel Real Estate Private Equity Fund 1: |
||||||||||||||||
Godo Kaisha Oceanos 1 |
Other financial services | 47.8 | 47.8 | Japan | 2020.07.31(*5) | |||||||||||
Woori bank and Woori card Co., Ltd.: |
||||||||||||||||
Dongwoo C & C Co., Ltd. (*4) |
Construction | 24.5 | 24.5 | Korea | | |||||||||||
SJCO Co., Ltd. (*4) |
Aggregate transportation and wholesale | 28.7 | 28.7 | Korea | | |||||||||||
G2 Collection Co., Ltd. (*4) |
Wholesale and retail sales | 29.2 | 29.2 | Korea | | |||||||||||
The Base Enterprise Co., Ltd. (*4) |
Manufacturing | 48.4 | 48.4 | Korea | | |||||||||||
Kyesan Engineering Co., Ltd. (*4) |
Construction | 23.3 | 23.3 | Korea | | |||||||||||
Good Software Lap Co., Ltd. (*4) |
Service | 29.4 | 29.4 | Korea | | |||||||||||
QTS Shipping Co., Ltd. (*4) |
Complex transportation brokerage | 49.8 | 49.8 | Korea | | |||||||||||
DAEA SNC Co., Ltd. (*4) |
Wholesale and retail sales | 25.5 | 25.5 | Korea | | |||||||||||
Force TEC Co., Ltd. (*4) |
Manufacturing | 25.8 | 25.8 | Korea | | |||||||||||
Sinseong Trading Co., Ltd. (*4) |
Manufacturing | 27.9 | 27.9 | Korea | | |||||||||||
PREXCO Co., Ltd. (*4) |
Manufacturing | 28.1 | 28.1 | Korea | | |||||||||||
Jiwon Plating Co., Ltd. (*4) |
Plating | 20.8 | 20.8 | Korea | | |||||||||||
Youngdong Sea Food Co., Ltd. (*4) |
Processed sea food manufacturing | 24.5 | 24.5 | Korea | | |||||||||||
Woori Bank , Woori Investment Bank Co., Ltd. and Woori Private Equity Asset Management Co., Ltd.: |
||||||||||||||||
Woori-Shinyoung Growth-Cap Private Equity Fund I |
Other financial services | 31.9 | 31.9 | Korea | 2020.09.30 | |||||||||||
Woori Bank and Woori Investment Bank Co., Ltd.: |
||||||||||||||||
Chin Hung International Inc. (*3) |
Construction | | 25.3 | Korea | | |||||||||||
PCC-Woori LP Secondary Fund |
Other financial services | 38.8 | 38.8 | Korea | 2020.09.30 | |||||||||||
Woori Bank and Woori Private Equity Asset Management Co., Ltd.: |
||||||||||||||||
Woori-Q Corporate Restructuring Private Equity Fund |
Trust and collective investment | 38.4 | 38.4 | Korea | 2020.09.30 |
(*1) | Most of the significant business transactions of associates are with the Group as of September 30, 2020 and December 31, 2019. |
(*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) | As of September 30, 2020, it is classified as assets held for sale. Quoted market prices per share of Chin Hung International Inc. are 2,215 Won and 2,310 Won as of September 30, 2020 and December 31, 2019, respectively. |
(*4) | There is no investment balance as of September 30, 2020 and December 31, 2019. |
(*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. |
- 66 -
(*6) | The Group has signed a contract that the Group (or the third party designated by the Group) has the priority to purchase the underlying assets (Aju Capital Co. Ltd.) when it is disposed by Well to Sea No. 3 Private Equity Fund. |
(*7) | The Group invested 163,082 million won in its affiliate, K BANK Co., Ltd., in July, 2020. |
- 67 -
(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 nine-month period ended September 30, 2020 | ||||||||||||||||||||||||||||||||
Acquisition cost |
January 1, 2020 |
Share of profits (losses) |
Acquisition | Disposal | Dividends | Change in capital |
September 30, 2020 |
|||||||||||||||||||||||||
W Service Networks Co., Ltd. |
108 | 186 | 1 | | | (3 | ) | | 184 | |||||||||||||||||||||||
Korea Credit Bureau Co., Ltd. |
3,313 | 6,845 | 1,358 | | | (90 | ) | | 8,113 | |||||||||||||||||||||||
Korea Finance Security Co., Ltd. |
3,267 | 3,287 | (241 | ) | | | | | 3,046 | |||||||||||||||||||||||
Chin Hung International Inc. |
130,779 | 51,176 | (742 | ) | | (50,411 | ) | | (23 | ) | | |||||||||||||||||||||
Saman Corporation |
8,521 | 849 | (406 | ) | | | | 37 | 480 | |||||||||||||||||||||||
Woori Growth Partnerships New Technology Private Equity Fund |
18,666 | 19,212 | (1,863 | ) | | (1,728 | ) | (212 | ) | | 15,409 | |||||||||||||||||||||
2016KIF-IMM Woori Bank Technology Venture Fund |
12,385 | 15,141 | 900 | | (492 | ) | (1,088 | ) | (1,563 | ) | 12,898 | |||||||||||||||||||||
K BANK Co., Ltd. |
73,150 | 31,254 | (12,108 | ) | 163,082 | | | (1,733 | ) | 180,495 | ||||||||||||||||||||||
Smart Private Equity Fund No.2 |
2,915 | 2,764 | (31 | ) | | | | | 2,733 | |||||||||||||||||||||||
Woori Bank-Company K Korea Movie Asset Fund |
2,100 | 3,323 | 439 | | (900 | ) | | | 2,862 | |||||||||||||||||||||||
Well to Sea No.3 Private Equity Fund |
101,483 | 209,023 | 28,869 | | | (24,651 | ) | (1,174 | ) | 212,067 | ||||||||||||||||||||||
Partner One Value Up I Private Equity Fund |
10,000 | 9,908 | (74 | ) | | | | | 9,834 | |||||||||||||||||||||||
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership |
7,736 | 4,576 | | 3,160 | | | | 7,736 | ||||||||||||||||||||||||
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 |
32,572 | 11,841 | (121 | ) | 19,907 | | | | 31,627 | |||||||||||||||||||||||
LOTTE CARD Co.,Ltd |
346,810 | 409,444 | 16,251 | 810 | | (5,710 | ) | (1,146 | ) | 419,649 | ||||||||||||||||||||||
Woori-Q Corporate Restructuring Private Equity Fund |
6,129 | 6,046 | (90 | ) | 8,152 | | | | 14,108 | |||||||||||||||||||||||
PCC-Woori LP Secondary Fund |
7,575 | 2,525 | (131 | ) | 5,050 | | | | 7,444 | |||||||||||||||||||||||
Force TEC Co., Ltd. |
| | 1,470 | | | | (448 | ) | 1,022 | |||||||||||||||||||||||
Together-Korea Government Private Pool Private Securities Investment Trust No.3 |
100,000 | | 130 | 100,000 | | | | 100,130 | ||||||||||||||||||||||||
Genesis Environmental Energy Company 1st Private Equity Fund |
4,084 | | (88 | ) | 4,084 | | | | 3,996 | |||||||||||||||||||||||
Uri Hanhwa Eureka Private Equity Fund |
350 | 342 | (3 | ) | | | | | 339 | |||||||||||||||||||||||
Godo Kaisha Oceanos 1 |
10,800 | 10,952 | (47 | ) | | | (850 | ) | 238 | 10,293 | ||||||||||||||||||||||
Japanese Hotel Real Estate Private Equity Fund 2 |
3,291 | 3,291 | 184 | | | (117 | ) | (12 | ) | 3,346 | ||||||||||||||||||||||
Woori High plus G.B. Securities Feeder Fund1(G.B.) |
6,000 | | 142 | 6,141 | | | | 6,283 | ||||||||||||||||||||||||
Woori G Senior Loan No.1 |
18,557 | | 49 | 18,557 | | | | 18,606 | ||||||||||||||||||||||||
Woori G Clean Energy No.1 |
26 | | | 26 | | | | 26 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
914,747 | 806,360 | 33,848 | 329,044 | (53,852 | ) | (32,721 | ) | (5,824 | ) | 1,076,855 | ||||||||||||||||||||||
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|
|
|
|
- 68 -
For the nine-month period ended September 30, 2019 | ||||||||||||||||||||||||||||||||
Acquisition cost |
January 1, 2019 |
Share of profits (losses) |
Acquisition | Disposal | Dividends | Change in capital |
September 30, 2019 |
|||||||||||||||||||||||||
W Service Networks Co., Ltd. |
108 | 157 | 16 | | | (2 | ) | | 171 | |||||||||||||||||||||||
Korea Credit Bureau Co., Ltd. |
3,313 | 6,790 | 1,031 | | | (135 | ) | | 7,686 | |||||||||||||||||||||||
Korea Finance Security Co., Ltd. |
3,267 | 3,456 | (135 | ) | | | | | 3,321 | |||||||||||||||||||||||
Chin Hung International Inc. |
130,779 | 44,741 | 5,708 | | | | 8 | 50,457 | ||||||||||||||||||||||||
Saman Corporation |
8,521 | 1,014 | (388 | ) | | | | 32 | 658 | |||||||||||||||||||||||
Woori Growth Partnerships New Technology Private Equity Fund |
19,385 | 25,091 | 1,424 | 309 | (6,770 | ) | (164 | ) | | 19,890 | ||||||||||||||||||||||
2016KIF-IMM Woori Bank Technology Venture Fund |
13,065 | 15,300 | 908 | | (1,935 | ) | | (384 | ) | 13,889 | ||||||||||||||||||||||
K BANK Co., Ltd. |
73,150 | 43,709 | (10,815 | ) | 5,807 | | | 197 | 38,898 | |||||||||||||||||||||||
Smart Private Equity Fund No.2 |
2,915 | 2,890 | (31 | ) | | (85 | ) | | | 2,774 | ||||||||||||||||||||||
Woori Bank-Company K Korea Movie Asset Fund |
3,000 | 2,700 | 803 | | | | | 3,503 | ||||||||||||||||||||||||
Well to Sea No.3 Private Equity Fund |
101,483 | 197,393 | 23,110 | | | (18,578 | ) | (1,850 | ) | 200,075 | ||||||||||||||||||||||
Partner One Value Up I Private Equity Fund |
10,000 | 9,948 | (29 | ) | | | | | 9,919 | |||||||||||||||||||||||
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership |
4,576 | 4,426 | | 150 | | | | 4,576 | ||||||||||||||||||||||||
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund |
4,150 | 3,025 | | 1,125 | | | | 4,150 | ||||||||||||||||||||||||
Nomura-Rifa Private Real Estate Investment Trust No.17 |
1,000 | 787 | | | (787 | ) | | | | |||||||||||||||||||||||
Uri Hanhwa Eureka Private Equity Fund |
350 | 339 | (2 | ) | | | | | 337 | |||||||||||||||||||||||
Godo Kaisha Oceanos 1 |
11,020 | | | 11,020 | | (70 | ) | 688 | 11,638 | |||||||||||||||||||||||
Woori-Shinyoung Growth-Cap Private Equity Fund I |
7,649 | | (640 | ) | 7,649 | | | | 7,009 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
397,731 | 361,766 | 20,960 | 26,060 | (9,577 | ) | (18,949 | ) | (1,309 | ) | 378,951 | ||||||||||||||||||||||
|
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|
|
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|
|
- 69 -
(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): |
September 30, 2020 | ||||||||||||||||
Assets | Liabilities | Operating revenue |
Net income (loss) |
|||||||||||||
W Service Networks Co., Ltd. |
6,107 | 2,377 | 13,633 | 1,070 | ||||||||||||
Korea Credit Bureau Co., Ltd. |
114,062 | 34,707 | 77,957 | 13,268 | ||||||||||||
Korea Finance Security Co., Ltd. |
36,658 | 16,353 | 44,105 | (2,123 | ) | |||||||||||
Saman Corporation |
121,151 | 99,147 | 66,949 | (107 | ) | |||||||||||
Woori Growth Partnerships New Technology Private Equity Fund |
67,053 | 278 | 1,428 | (7,965 | ) | |||||||||||
2016KIF-IMM Woori Bank Technology Venture Fund |
62,139 | 929 | 5,445 | 4,500 | ||||||||||||
K BANK Co., Ltd. |
3,141,943 | 2,607,546 | 45,922 | (60,227 | ) | |||||||||||
Smart Private Equity Fund No.2 |
13,717 | 50 | 1 | (154 | ) | |||||||||||
Woori Bank-Company K Korea Movie Asset Fund |
11,544 | 96 | 1,854 | 1,755 | ||||||||||||
Well to Sea No.3 Private Equity Fund |
8,172,581 | 7,562,271 | 406,218 | 39,241 | ||||||||||||
Partner One Value Up I Private Equity Fund |
42,476 | 193 | 229 | (250 | ) | |||||||||||
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership |
36,189 | 328 | 574 | (456 | ) | |||||||||||
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund |
15,870 | 123 | | (85 | ) | |||||||||||
Woori-Shinyoung Growth-Cap Private Equity Fund I |
99,273 | 1,228 | 615 | (1,376 | ) | |||||||||||
LOTTE CARD Co.,Ltd (*) |
14,231,821 | 11,906,418 | 882,641 | 62,921 | ||||||||||||
Woori-Q Corporate Restructuring Private Equity Fund |
35,500 | 383 | | (1,284 | ) | |||||||||||
PCC-Woori LP Secondary Fund |
19,324 | 164 | 154 | (338 | ) | |||||||||||
Force TEC Co., Ltd. |
51,005 | 47,042 | 18,333 | (697 | ) | |||||||||||
Together-Korea Government Private Pool Private Securities Investment Trust No.3 |
100,153 | 13 | 163 | 130 | ||||||||||||
Genesis Environmental Energy Company 1st Private Equity Fund |
16,194 | 48 | | (354 | ) | |||||||||||
Uri Hanhwa Eureka Private Equity Fund |
42,235 | 117 | 4 | (354 | ) | |||||||||||
Godo Kaisha Oceanos 1 |
67,080 | 45,550 | 674 | (98 | ) | |||||||||||
Japanese Hotel Real Estate Private Equity Fund 2 |
16,866 | 16 | 946 | 946 | ||||||||||||
Woori High plus G.B. Securities Feeder Fund1(G.B.) |
28,321 | 17 | 801 | 741 | ||||||||||||
Woori G Senior Loan No.1 |
90,244 | 5 | 237 | 237 | ||||||||||||
Woori G Clean Energy No.1 |
53 | | | |
(*) | 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. |
- 70 -
December 31, 2019 | ||||||||||||||||
Assets | Liabilities | Operating revenue |
Net income (loss) |
|||||||||||||
W Service Networks Co., Ltd. |
5,742 | 1,969 | 17,572 | 1,322 | ||||||||||||
Korea Credit Bureau Co., Ltd. |
96,855 | 30,289 | 91,200 | 1,480 | ||||||||||||
Korea Finance Security Co., Ltd. |
32,574 | 10,660 | 61,939 | (1,265 | ) | |||||||||||
Chin Hung International Inc. |
335,147 | 229,764 | 499,152 | 26,617 | ||||||||||||
Saman Corporation |
92,206 | 66,184 | 91,088 | (485 | ) | |||||||||||
Woori Growth Partnerships New Technology Private Equity Fund |
83,583 | 330 | 7,866 | 6,355 | ||||||||||||
2016KIF-IMM Woori Bank Technology Venture Fund |
72,768 | 343 | 8,939 | 7,462 | ||||||||||||
K BANK Co., Ltd. |
2,679,968 | 2,464,168 | 84,928 | (89,779 | ) | |||||||||||
Smart Private Equity Fund No.2 |
13,872 | 51 | 2 | (204 | ) | |||||||||||
Woori Bank-Company K Korea Movie Asset Fund |
13,294 | 2 | 4,532 | 2,492 | ||||||||||||
Well to Sea No.3 Private Equity Fund |
7,073,363 | 6,470,540 | 524,319 | 48,357 | ||||||||||||
Partner One Value Up I Private Equity Fund |
42,602 | | 457 | (175 | ) | |||||||||||
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership |
21,208 | 691 | 766 | (676 | ) | |||||||||||
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund |
16,939 | 124 | 10 | (494 | ) | |||||||||||
Woori-Shinyoung Growth-Cap Private Equity Fund I |
37,642 | 620 | 2 | (2,679 | ) | |||||||||||
LOTTE CARD Co.,Ltd (*) |
12,936,977 | 10,659,889 | 1,366,512 | 42,538 | ||||||||||||
Woori-Q Corporate Restructuring Private Equity Fund |
15,975 | 823 | | (823 | ) | |||||||||||
PCC-Woori LP Secondary Fund |
6,498 | | | (2 | ) | |||||||||||
Uri Hanhwa Eureka Private Equity Fund |
41,950 | 236 | 41 | (436 | ) | |||||||||||
Godo Kaisha Oceanos 1 |
70,869 | 47,960 | 778 | 119 | ||||||||||||
Japanese Hotel Real Estate Private Equity Fund 2 |
16,561 | 6 | | (600 | ) |
(*) | 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. |
(4) | The entities that the Group has not applied equity method of accounting although the Groups ownership interest is more than 20% as of September 30, 2020 and December 31, 2019 are as follows: |
September 30, 2020 | ||||||||
Associate (*) |
Number of shares owned |
Ownership (%) | ||||||
Orient Shipyard Co., Ltd. |
464,812 | 21.4 | ||||||
Saenuel Co., Ltd. |
3,531 | 37.4 | ||||||
E Mirae Tech Co., Ltd. |
7,696 | 41.0 | ||||||
Jehin Trading Co., Ltd. |
81,610 | 27.3 | ||||||
The Season Company Co., Ltd. |
18,187 | 30.1 | ||||||
Yuil PESC Co., Ltd. |
8,642 | 24.0 | ||||||
CL Tech Co., Ltd. |
13,759 | 38.6 |
(*) | Even though the Groups ownership interest of the entity is more than 20%, the Group does not have significant influence over the entity since it is going through work-out process under receivership, thus it is excluded from the investment in joint ventures and associates. |
December 31, 2019 | ||||||||
Associate (*) |
Number of shares owned |
Ownership (%) | ||||||
Orient Shipyard Co., Ltd. |
464,812 | 21.4 | ||||||
Saenuel Co., Ltd. |
3,531 | 37.4 | ||||||
E Mirae Tech Co., Ltd. |
7,837 | 41.8 | ||||||
Jehin Trading Co., Ltd. |
83,056 | 27.7 | ||||||
The Season Company Co., Ltd. |
18,283 | 30.3 | ||||||
Yuil PESC Co., Ltd. |
8,642 | 24.0 | ||||||
CL Tech Co., Ltd. |
13,759 | 38.6 |
(*) | Even though the Groups ownership interest of the entity is more than 20%, the Group does not have significant influence over the entity since it is going through work-out process under receivership, thus it is excluded from the investment in joint ventures and associates. |
- 71 -
(5) | As of September 30, 2020 and December 31, 2019, 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): |
September 30, 2020 | ||||||||||||||||||||||||||||
Total net asset |
Ownership (%) |
Ownership portion of net assets |
Basis difference |
Impairment | Intercompany transaction |
Book value |
||||||||||||||||||||||
W Service Networks Co., Ltd. |
3,730 | 4.9 | 184 | | | | 184 | |||||||||||||||||||||
Korea Credit Bureau Co., Ltd. |
79,355 | 9.9 | 7,864 | 246 | | 3 | 8,113 | |||||||||||||||||||||
Korea Finance Security Co., Ltd. |
20,304 | 15.0 | 3,046 | | | | 3,046 | |||||||||||||||||||||
Saman Corporation (*2) |
22,004 | 9.2 | 2,022 | 5,372 | (6,915 | ) | 1 | 480 | ||||||||||||||||||||
Woori Growth Partnerships New Technology Private Equity Fund |
66,775 | 23.1 | 15,412 | | | (3 | ) | 15,409 | ||||||||||||||||||||
2016KIF-IMM Woori Bank Technology Venture Fund |
61,210 | 20.0 | 12,242 | | | 656 | 12,898 | |||||||||||||||||||||
K BANK Co., Ltd. (*1) (*2) |
534,398 | 26.2 | 140,012 | 44,117 | (3,634 | ) | | 180,495 | ||||||||||||||||||||
Smart Private Equity Fund No.2 |
13,666 | 20.0 | 2,733 | | | | 2,733 | |||||||||||||||||||||
Woori Bank-Company K Korea Movie Asset Fund |
11,448 | 25.0 | 2,862 | | | | 2,862 | |||||||||||||||||||||
Well to Sea No.3 Private Equity Fund (*1) |
424,341 | 50.0 | 212,086 | | | (19 | ) | 212,067 | ||||||||||||||||||||
Partner One Value Up Ist Private Equity Fund |
42,283 | 23.3 | 9,835 | | | (1 | ) | 9,834 | ||||||||||||||||||||
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership |
35,861 | 20.0 | 7,172 | | | 564 | 7,736 | |||||||||||||||||||||
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 |
98,045 | 31.9 | 31,627 | | | | 31,627 | |||||||||||||||||||||
LOTTE CARD Co., Ltd (*1) |
2,098,239 | 20.0 | 419,648 | | | 1 | 419,649 | |||||||||||||||||||||
Woori-Q Corporate Restructuring Private Equity Fund |
35,117 | 38.4 | 13,511 | | | 597 | 14,108 | |||||||||||||||||||||
PCC-Woori LP Secondary Fund |
19,160 | 38.8 | 7,443 | | | 1 | 7,444 | |||||||||||||||||||||
Force TEC |
3,963 | 25.8 | 1,022 | | | | 1,022 | |||||||||||||||||||||
Together-Korea Government Private Pool Private Securities Investment Trust No.3 |
100,140 | 100.0 | 100,140 | | | (10 | ) | 100,130 | ||||||||||||||||||||
Genesis Environmental Energy Company 1st Private Equity Fund |
16,146 | 24.8 | 3,997 | | | (1 | ) | 3,996 | ||||||||||||||||||||
Uri Hanhwa Eureka Private Equity Fund |
42,118 | 0.8 | 339 | | | | 339 | |||||||||||||||||||||
Godo Kaisha Oceanos 1 |
21,530 | 47.8 | 10,293 | | | | 10,293 | |||||||||||||||||||||
Japanese Hotel Real Estate Private Equity Fund 2 |
16,850 | 19.9 | 3,346 | | | | 3,346 | |||||||||||||||||||||
Woori High plus G.B. Securities Feeder Fund1(G.B.) |
28,304 | 22.2 | 6,283 | | | | 6,283 | |||||||||||||||||||||
Woori G Senior Loan No.1 |
90,239 | 20.6 | 18,606 | | | | 18,606 | |||||||||||||||||||||
Woori G Clean Energy No.1 |
53 | 50.0 | 26 | | | | 26 |
(*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. |
- 72 -
December 31, 2019 | ||||||||||||||||||||||||||||
Total net asset |
Ownership (%) |
Ownership portion of net assets |
Basis difference |
Impairment | Intercompany transaction |
Book value |
||||||||||||||||||||||
W Service Networks Co., Ltd. |
3,773 | 4.9 | 186 | | | | 186 | |||||||||||||||||||||
Korea Credit Bureau Co., Ltd. |
66,566 | 9.9 | 6,597 | 246 | | 2 | 6,845 | |||||||||||||||||||||
Korea Finance Security Co., Ltd. |
21,914 | 15.0 | 3,287 | | | | 3,287 | |||||||||||||||||||||
Chin Hung International Inc. (*1) |
105,383 | 25.3 | 26,646 | 24,565 | | (35 | ) | 51,176 | ||||||||||||||||||||
Saman Corporation (*2) |
26,022 | 9.2 | 2,391 | 5,373 | (6,915 | ) | | 849 | ||||||||||||||||||||
Woori Growth Partnerships New Technology Private Equity Fund |
83,253 | 23.1 | 19,215 | | | (3 | ) | 19,212 | ||||||||||||||||||||
2016KIF-IMM Woori Bank Technology Venture Fund |
72,425 | 20.0 | 14,485 | | | 656 | 15,141 | |||||||||||||||||||||
K BANK Co., Ltd. (*1) (*2) |
215,800 | 14.5 | 31,248 | 3,634 | (3,634 | ) | 6 | 31,254 | ||||||||||||||||||||
Smart Private Equity Fund No.2 |
13,821 | 20.0 | 2,764 | | | | 2,764 | |||||||||||||||||||||
Woori Bank-Company K Korea Movie Asset Fund |
13,292 | 25.0 | 3,323 | | | | 3,323 | |||||||||||||||||||||
Well to Sea No.3 Private Equity Fund (*1) |
418,250 | 50.0 | 209,041 | | | (18 | ) | 209,023 | ||||||||||||||||||||
Partner One Value Up Ist Private Equity Fund |
42,602 | 23.3 | 9,909 | | | (1 | ) | 9,908 | ||||||||||||||||||||
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership |
20,517 | 20.0 | 4,103 | | | 473 | 4,576 | |||||||||||||||||||||
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund |
16,815 | 25.0 | 4,204 | | | 171 | 4,375 | |||||||||||||||||||||
Woori-Shinyoung Growth-Cap Private Equity Fund I |
37,022 | 31.9 | 11,841 | | | | 11,841 | |||||||||||||||||||||
LOTTE CARD Co., Ltd (*1) |
2,047,220 | 20.0 | 409,444 | | | | 409,444 | |||||||||||||||||||||
Woori-Q Corporate Restructuring Private Equity Fund |
15,152 | 38.4 | 5,813 | | | 233 | 6,046 | |||||||||||||||||||||
PCC-Woori LP Secondary Fund |
6,498 | 38.8 | 2,524 | | | 1 | 2,525 | |||||||||||||||||||||
Uri Hanhwa Eureka Private Equity Fund |
41,714 | 0.8 | 342 | | | | 342 | |||||||||||||||||||||
Godo Kaisha Oceanos 1 |
22,909 | 47.8 | 10,952 | | | | 10,952 | |||||||||||||||||||||
Japanese Hotel Real Estate Private Equity Fund 2 |
16,555 | 19.9 | 3,291 | | | | 3,291 |
(*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. |
- 73 -
14. | INVESTMENT PROPERTIES |
(1) | Details of investment properties are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Acquisition cost |
333,001 | 299,802 | ||||||
Accumulated depreciation |
(21,657 | ) | (19,563 | ) | ||||
|
|
|
|
|||||
Net carrying value |
311,344 | 280,239 | ||||||
|
|
|
|
(2) | Changes in investment properties are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30 | ||||||||
2020 | 2019 | |||||||
Beginning balance |
280,239 | 178,910 | ||||||
Acquisition |
2,432 | 246,329 | ||||||
Disposal |
(356 | ) | (176 | ) | ||||
Depreciation |
(1,812 | ) | (1,766 | ) | ||||
Transfer |
29,580 | 15,535 | ||||||
Foreign currencies translation adjustments |
446 | 502 | ||||||
Others |
815 | 109 | ||||||
|
|
|
|
|||||
Ending balance |
311,344 | 439,443 | ||||||
|
|
|
|
(3) | Rental fee earned from investment properties is amounting to 9,944 million won and 6,750 million won for the nine-month period ended September 30, 2020 and 2019, respectively. Operating expenses directly related to the investment properties where rental fee was earned is amounting to 1,907 million won and 1,848 million won. |
15. | PREMISES AND EQUIPMENT |
(1) | Details of premises and equipment as of September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions): |
September 30, 2020 | ||||||||||||||||||||||||||||
Land | Building | Equipment and vehicles |
Leasehold improvement |
Construction in progress |
Structures | Total | ||||||||||||||||||||||
Premises and equipment (owned) |
1,725,907 | 783,459 | 265,784 | 50,356 | 4,856 | 2 | 2,830,364 | |||||||||||||||||||||
Right-of-use asset |
| 434,809 | 13,460 | | | | 448,269 | |||||||||||||||||||||
Carrying value |
1,725,907 | 1,218,268 | 279,244 | 50,356 | 4,856 | 2 | 3,278,633 |
December 31, 2019 | ||||||||||||||||||||||||||||
Land | Building | Equipment and vehicles |
Leasehold improvement |
Construction in progress |
Structures | Total | ||||||||||||||||||||||
Premises and equipment (owned) |
1,761,159 | 802,299 | 278,016 | 54,839 | 1,287 | 2 | 2,897,602 | |||||||||||||||||||||
Right-of-use asset |
| 449,878 | 17,236 | | | | 467,114 | |||||||||||||||||||||
Carrying value |
1,761,159 | 1,252,177 | 295,252 | 54,839 | 1,287 | 2 | 3,364,716 |
- 74 -
(2) | Details of premises and equipment (owned) as of September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions): |
September 30, 2020 | ||||||||||||||||||||||||||||
Land | Building | Equipment and vehicles |
Leasehold improvement |
Construction in progress |
Structures | Total | ||||||||||||||||||||||
Acquisition cost |
1,725,907 | 1,067,040 | 1,117,098 | 469,754 | 4,856 | 20 | 4,384,675 | |||||||||||||||||||||
Accumulated depreciation |
| (283,581 | ) | (851,314 | ) | (419,398 | ) | | (18 | ) | (1,554,311 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net carrying value |
1,725,907 | 783,459 | 265,784 | 50,356 | 4,856 | 2 | 2,830,364 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019 | ||||||||||||||||||||||||||||
Land | Building | Equipment and vehicles |
Leasehold improvement |
Construction in progress |
Structures | Total | ||||||||||||||||||||||
Acquisition cost |
1,761,159 | 1,063,756 | 1,123,101 | 463,181 | 1,287 | 20 | 4,412,504 | |||||||||||||||||||||
Accumulated depreciation |
| (261,457 | ) | (845,085 | ) | (408,342 | ) | | (18 | ) | (1,514,902 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net carrying value |
1,761,159 | 802,299 | 278,016 | 54,839 | 1,287 | 2 | 2,897,602 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) | Details of changes in premises and equipment (owned) are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30, 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 |
55 | 13,870 | 57,293 | 15,113 | 4,084 | | 90,415 | |||||||||||||||||||||
Disposals |
(6,478 | ) | (346 | ) | (982 | ) | (353 | ) | | | (8,159 | ) | ||||||||||||||||
Depreciation |
| (26,849 | ) | (70,779 | ) | (19,787 | ) | | | (117,415 | ) | |||||||||||||||||
Transfer |
(28,266 | ) | (1,314 | ) | | | | | (29,580 | ) | ||||||||||||||||||
Foreign currencies translation adjustments |
(563 | ) | (622 | ) | 335 | 305 | (13 | ) | | (558 | ) | |||||||||||||||||
Others |
| (3,579 | ) | 1,901 | 239 | (502 | ) | | (1,941 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Ending balance |
1,725,907 | 783,459 | 265,784 | 50,356 | 4,856 | 2 | 2,830,364 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine-month period ended September 30, 2019 | ||||||||||||||||||||||||||||
Land | Building | Equipment and vehicles |
Leasehold improvement |
Construction in progress |
Structures | Total | ||||||||||||||||||||||
Beginning balance |
1,481,871 | 661,912 | 240,013 | 57,594 | 9,099 | 3 | 2,450,492 | |||||||||||||||||||||
Acquisitions |
51,856 | 34,279 | 91,019 | 21,215 | 6,600 | | 204,969 | |||||||||||||||||||||
Disposals |
(3,002 | ) | (2,245 | ) | (398 | ) | (2,321 | ) | | | (7,966 | ) | ||||||||||||||||
Depreciation |
| (22,434 | ) | (64,458 | ) | (19,750 | ) | | (1 | ) | (106,643 | ) | ||||||||||||||||
Classified as held-for-sale |
(21 | ) | (74 | ) | | | | | (95 | ) | ||||||||||||||||||
Transfer |
106,841 | 87,214 | 2,734 | 912 | (13,950 | ) | | 183,751 | ||||||||||||||||||||
Foreign currencies translation adjustments |
1,155 | 1,059 | 2,100 | 1,158 | 78 | | 5,550 | |||||||||||||||||||||
Business combination |
| | 400 | 1 | | | 401 | |||||||||||||||||||||
Others |
| 1,672 | (1,440 | ) | (4,357 | ) | (173 | ) | | (4,298 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Ending balance |
1,638,700 | 761,383 | 269,970 | 54,452 | 1,654 | 2 | 2,726,161 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 75 -
(4) | Details of right-of-use assets as of September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions): |
September 30, 2020 | ||||||||||||
Building | Equipment and vehicles | Total | ||||||||||
Acquisition cost |
703,573 | 28,154 | 731,727 | |||||||||
Accumulated depreciation |
(268,764 | ) | (14,694 | ) | (283,458 | ) | ||||||
|
|
|
|
|
|
|||||||
Net carrying value |
434,809 | 13,460 | 448,269 | |||||||||
|
|
|
|
|
|
December 31, 2019 | ||||||||||||
Building | Equipment and vehicles | Total | ||||||||||
Acquisition cost |
615,201 | 25,563 | 640,764 | |||||||||
Accumulated depreciation |
(165,323 | ) | (8,327 | ) | (173,650 | ) | ||||||
|
|
|
|
|
|
|||||||
Net carrying value |
449,878 | 17,236 | 467,114 | |||||||||
|
|
|
|
|
|
(5) | Details of changes in right-of-use assets for the nine-month period ended September 30, 2020 and 2019 are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30, 2020 | ||||||||||||
Building | Equipment and vehicles | Total | ||||||||||
Beginning balance |
449,878 | 17,236 | 467,114 | |||||||||
New contracts |
156,329 | 5,231 | 161,560 | |||||||||
Changes in contract |
9,374 | 50 | 9,424 | |||||||||
Termination |
(4,674 | ) | (323 | ) | (4,997 | ) | ||||||
Depreciation |
(170,039 | ) | (7,640 | ) | (177,679 | ) | ||||||
Business combination |
| | | |||||||||
Others |
(6,059 | ) | (1,094 | ) | (7,153 | ) | ||||||
|
|
|
|
|
|
|||||||
Ending balance |
434,809 | 13,460 | 448,269 | |||||||||
|
|
|
|
|
|
For the nine-month period ended September 30, 2019 | ||||||||||||
Building | Equipment and vehicles | Total | ||||||||||
Beginning balance |
416,827 | 18,964 | 435,791 | |||||||||
New contracts |
187,352 | 5,470 | 192,822 | |||||||||
Changes in contract |
| | | |||||||||
Termination |
(213 | ) | (105 | ) | (318 | ) | ||||||
Depreciation |
(153,288 | ) | (7,484 | ) | (160,772 | ) | ||||||
Business combination |
3,324 | 34 | 3,358 | |||||||||
Others |
(2,057 | ) | 669 | (1,388 | ) | |||||||
|
|
|
|
|
|
|||||||
Ending balance |
451,945 | 17,548 | 469,493 | |||||||||
|
|
|
|
|
|
- 76 -
16. | INTANGIBLE ASSETS |
(1) | Details of intangible assets are as follows (Unit: Korean Won in millions): |
September 30, 2020 | ||||||||||||||||||||||||||||||||
Goodwill | Software | Industrial property rights |
Development cost |
Other intangible assets |
Membership deposit |
Construction in progress |
Total | |||||||||||||||||||||||||
Acquisition cost |
340,068 | 186,871 | 1,799 | 555,721 | 879,804 | 36,715 | 6,709 | 2,007,687 | ||||||||||||||||||||||||
Accumulated amortization |
| (146,392 | ) | (1,044 | ) | (345,120 | ) | (678,447 | ) | | | (1,171,003 | ) | |||||||||||||||||||
Accumulated impairment losses |
| | | | (33,680 | ) | (3,201 | ) | | (36,881 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net carrying value |
340,068 | 40,479 | 755 | 210,601 | 167,677 | 33,514 | 6,709 | 799,803 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019 | ||||||||||||||||||||||||||||||||
Goodwill | Software | Industrial property rights |
Development cost |
Other intangible assets |
Membership deposit |
Construction in progress |
Total | |||||||||||||||||||||||||
Acquisition cost |
350,682 | 174,132 | 1,576 | 517,224 | 862,313 | 32,583 | 4,066 | 1,942,576 | ||||||||||||||||||||||||
Accumulated amortization |
| (138,300 | ) | (884 | ) | (292,031 | ) | (638,005 | ) | | | (1,069,220 | ) | |||||||||||||||||||
Accumulated impairment losses |
| | | | (25,993 | ) | (3,253 | ) | | (29,246 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net carrying value |
350,682 | 35,832 | 692 | 225,193 | 198,315 | 29,330 | 4,066 | 844,110 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) | Details of changes in intangible assets are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30, 2020 | ||||||||||||||||||||||||||||||||
Goodwill | Software | Industrial property rights |
Development cost |
Other intangible assets |
Membership deposit |
Construction in progress |
Total | |||||||||||||||||||||||||
Beginning balance |
350,682 | 35,832 | 692 | 225,193 | 198,315 | 29,330 | 4,066 | 844,110 | ||||||||||||||||||||||||
Acquisitions |
| 12,171 | 223 | 38,256 | 17,795 | 4,960 | 3,238 | 76,643 | ||||||||||||||||||||||||
Disposal |
| | | | | (759 | ) | | (759 | ) | ||||||||||||||||||||||
Amortization (*) |
| (6,731 | ) | (160 | ) | (53,079 | ) | (41,835 | ) | | | (101,805 | ) | |||||||||||||||||||
Impairment losses |
| | | | (7,687 | ) | (17 | ) | | (7,704 | ) | |||||||||||||||||||||
Transfer |
| | | 428 | 164 | | (592 | ) | | |||||||||||||||||||||||
Foreign currencies translation adjustments |
(8,997 | ) | (621 | ) | | | (56 | ) | 69 | (3 | ) | (9,608 | ) | |||||||||||||||||||
Others |
(1,617 | ) | (172 | ) | | (197 | ) | 981 | (69 | ) | | (1,074 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Ending balance |
340,068 | 40,479 | 755 | 210,601 | 167,677 | 33,514 | 6,709 | 799,803 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) | Amortization of other intangible assets amounting to 9,363 million won is included in other operating expenses. |
For the nine-month period ended September 30, 2019 | ||||||||||||||||||||||||||||||||
Goodwill | Software | Industrial property rights |
Development cost |
Other intangible assets |
Membership deposit |
Construction in progress |
Total | |||||||||||||||||||||||||
Beginning balance |
153,602 | 29,727 | 562 | 240,320 | 139,297 | 23,597 | 10,415 | 597,520 | ||||||||||||||||||||||||
Acquisitions |
| 10,505 | 260 | 24,331 | 75,110 | 4,846 | 8,605 | 123,657 | ||||||||||||||||||||||||
Disposal |
| | | | (27 | ) | (537 | ) | | (564 | ) | |||||||||||||||||||||
Amortization (*) |
| (7,125 | ) | (138 | ) | (48,083 | ) | (39,600 | ) | | | (94,946 | ) | |||||||||||||||||||
Impairment losses |
| | | | | (854 | ) | | (854 | ) | ||||||||||||||||||||||
Transfer |
| | | 7,928 | 6,605 | | (14,533 | ) | | |||||||||||||||||||||||
Foreign currencies translation adjustments |
14,422 | 233 | | | 2,994 | 155 | | 17,804 | ||||||||||||||||||||||||
Business combination |
45,264 | 336 | | | 6,456 | 139 | | 52,195 | ||||||||||||||||||||||||
Others |
| 179 | | | (679 | ) | | | (500 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Ending balance |
213,288 | 33,855 | 684 | 224,496 | 190,156 | 27,346 | 4,487 | 694,312 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) | Amortization of other intangible assets amounting to 16,211 million won is included in other operating expenses. |
- 77 -
17. | ASSETS HELD FOR SALE |
Assets held for distribution (sale) are as follows (Unit: Korean Won in millions):
Assets (*) |
September 30, 2020 | December 31, 2019 | ||||||
Lands |
4,737 | 5,164 | ||||||
Buildings |
4,301 | 4,815 | ||||||
Investments of associates |
50,411 | | ||||||
Others |
450 | 577 | ||||||
|
|
|
|
|||||
Total |
59,899 | 10,556 | ||||||
|
|
|
|
(*) | The Group classifies assets as held for sale that are highly likely to be sold within one year from September 30, 2020 or December 31, 2019. |
The Group measured assets held for sale at the lower of their net fair value or carrying amount.
18. | ASSETS SUBJECT TO LIEN AND ASSETS ACQUIRED THROUGH FORECLOSURES |
(1) | Assets subjected to lien are as follows (Unit: Korean Won in millions): |
September 30, 2020 | ||||||||||
Collateral given to |
Amount | Reason for collateral | ||||||||
Financial assets at FVTPL |
Korean treasury and government bonds and others |
Kookmin bank and others |
250,250 | Related to bonds sold under repurchase agreements (*) | ||||||
Korean treasury and government bonds and others |
Korea Securities Depository |
6,073 | Securities borrowing collateral | |||||||
Korean treasury and government bonds and others |
Shinhan Investment Corp. |
4,049 | Collateral for futures transaction | |||||||
Korean financial institutions debt securities and others |
Korea Securities Depository |
161,061 | Securities borrowing collateral | |||||||
Korean financial institutions debt securities and others |
Kookmin bank |
49,995 | Related to bonds sold under repurchase agreements (*) | |||||||
Korean corporate debt securities |
Kookmin bank |
150,643 | Related to bonds sold under repurchase agreements (*) | |||||||
Korean corporate debt securities |
Eugene investment & futures co., Ltd. |
3,034 | Collateral for futures transaction | |||||||
Korean corporate debt securities |
Korea Securities Depository |
111,730 | Securities borrowing collateral | |||||||
Financial assets at FVTOCI |
Korean financial institutions debt securities and others |
The BOK and others |
3,489,897 | Settlement risk and others | ||||||
Foreign financial institutions debt securities |
Spain BBVA and others |
105,058 | Related to bonds sold under repurchase agreements (*) | |||||||
Securities at amortized cost |
Korean treasury and government bonds and others |
Korea Securities Depository |
419 | Related to bonds sold under repurchase agreements (*) | ||||||
Korean treasury and government bonds and others |
The BOK and others |
5,850,585 | Settlement risk and others | |||||||
Foreign financial institutions debt securities |
NATIXIS and others |
41,942 | Related to bonds sold under repurchase agreements (*) | |||||||
Foreign financial institutions debt securities |
Federal Reserve Bank |
16,036 | 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 |
17,884 | Margin deposit for futures or option |
- 78 -
September 30, 2020 | ||||||||||
Collateral given to |
Amount | Reason for collateral | ||||||||
Other due from banks in foreign currencies |
Korea Investment & Securities Co., Ltd. and others |
484,392 | Foreign margin deposit for future or option and others | |||||||
Foreign currency loan bonds |
Industrial and Commercial Bank of China |
286,058 | Related to bonds sold under repurchase agreements (*) | |||||||
Mortgage loan |
Public offering |
3,430,550 | Related to covered bonds | |||||||
Investment real estate |
Land and building |
Credit Counselling & Recovery Service and others |
5,715 | Right to collateral and others | ||||||
Premises and equipment |
Land and building |
Credit Counselling & Recovery Service and others |
1,984 | Right to collateral and others | ||||||
|
|
|||||||||
Total |
14,468,855 | |||||||||
|
|
(*) | 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. |
- 79 -
December 31, 2019 | ||||||||||
Collateral given to |
Amount | Reason for collateral | ||||||||
Financial assets at FVTPL |
Korean treasury and government bonds and others |
Nonghyup bank |
19,720 | Related to bonds sold under repurchase agreements (*) | ||||||
Korean corporate debt securities |
Kookmin bank and others |
168,327 | Related to bonds sold under repurchase agreements (*) | |||||||
Korean corporate debt securities |
Eugene investment & futures co., Ltd. . |
3,008 | Collateral for futures transaction | |||||||
Korean financial institutions debt securities and others |
Nonghyup bank and others |
219,938 | Related to bonds sold under repurchase agreements (*) | |||||||
Financial assets at FVTOCI |
Korean financial institutions debt securities and others |
The BOK and others |
5,127,383 | Settlement risk and others | ||||||
Foreign financial institutions debt securities |
Spain BBVA and others |
56,975 | Related to bonds sold under repurchase agreements (*) | |||||||
Korean corporate debt securities |
Nonghyup bank futures and others |
9,042 | Collateral for futures transaction | |||||||
Securities at amortized cost |
Korean treasury and government bonds |
Korea Securities Depository |
5,570 | Related to bonds sold under repurchase agreements (*) | ||||||
Korean treasury and government bonds and others |
The BOK and others |
6,190,630 | Settlement risk and others | |||||||
Foreign financial institutions debt securities |
NATIXIS and others |
37,271 | Related to bonds sold under repurchase agreements (*) | |||||||
Loan at amortized cost and other financial assets |
Due from banks in local currency |
Branch of IBK at Phnom Penh and others |
11,352 | Collateral deposits for local currency borrowings | ||||||
Due from banks in local currency |
Daishin AMC and others |
1,500 | Right of pledge | |||||||
Other due from banks in local currency |
Samsung Securities Co., Ltd. and others |
17,345 | Margin deposit for futures or option | |||||||
Other due from banks in foreign currencies |
Korea Investment & Securities Co., Ltd. and others |
180,919 | Foreign margin deposit for future or option and others | |||||||
Foreign currency loans |
Industrial and Commercial Bank of China |
82,594 | Related to bonds sold under repurchase agreements (*) | |||||||
Premises and equipment |
Land and building |
Credit Counselling & Recovery Service and others |
689 | Right to collateral and others | ||||||
|
|
|||||||||
Total | 12,132,263 | |||||||||
|
|
(*) | The Group has the agreements to repurchase the sold assets at the predetermined price or the price that includes the rate of return and to provide the guarantee on the assets. The transferee has the right to sell or to provide as guarantee. Therefore, the Group does not derecognize the assets, but recognizes the relevant amounts as liability (bonds sold under repurchase agreements). The asset is equivalent to a mortgage-backed debt security. |
(2) | As of September 30, 2020 and December 31, 2019 there is no asset acquired through foreclosures. |
September 30, 2020 | December 31, 2019 | |||||||
Other assets |
||||||||
Land |
6,349 | 27 | ||||||
Real estate assessment provision |
(89 | ) | (27 | ) | ||||
Sub-total |
6,260 | | ||||||
Assets held for sale |
||||||||
Land |
4,737 | 5,143 | ||||||
Building |
4,301 | 4,742 | ||||||
Others |
450 | 577 | ||||||
Sub-total |
9,488 | 10,462 | ||||||
|
|
|
|
|||||
Total |
15,748 | 10,462 | ||||||
|
|
|
|
- 80 -
(3) | Securities loaned are as follows (Unit: Korean Won in millions): |
September 30, 2020 |
December 31, 2019 |
Loaned to | ||||||||||
Financial assets at FVTOCI |
Korean financial institutions debt securities and others |
70,351 | 80,737 | 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 September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions):
September 30, 2020 | ||||||||
Fair values of collaterals | Fair values of collaterals were disposed or re-subjected to lien |
|||||||
Securities |
4,106,529 | | ||||||
December 31, 2019 | ||||||||
Fair values of collaterals | Fair values of collaterals were disposed or re-subjected to lien |
|||||||
Securities |
9,340,517 | |
19. | OTHER ASSETS |
Details of other assets are as follows (Unit: Korean Won in millions):
September 30, 2020 | December 31, 2019 | |||||||
Prepaid expenses |
240,696 | 135,010 | ||||||
Advance payments |
9,029 | 78,306 | ||||||
Non-operational assets |
6,260 | | ||||||
Others |
24,426 | 20,330 | ||||||
|
|
|
|
|||||
Total |
280,411 | 233,646 | ||||||
|
|
|
|
- 81 -
20. | FINANCIAL LIABILITIES AT FVTPL |
(1) | Financial liabilities at FVTPL are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Financial instruments at fair value through profit or loss measured at fair value |
3,801,375 | 2,870,676 | ||||||
Financial liabilities at fair value through profit or loss designated as upon initial recognition |
16,456 | 87,626 | ||||||
|
|
|
|
|||||
Total |
3,817,831 | 2,958,302 | ||||||
|
|
|
|
(2) | Financial liabilities at fair value through profit or loss measured at fair value are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Deposits |
||||||||
Gold banking liabilities |
45,886 | 27,530 | ||||||
Borrowings |
||||||||
Securities sold |
246,596 | | ||||||
Derivative liabilities |
3,508,893 | 2,843,146 | ||||||
|
|
|
|
|||||
Total |
3,801,375 | 2,870,676 | ||||||
|
|
|
|
(3) | Financial liabilities at fair value through profit or loss designated as upon initial recognition as of September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Equity-linked securities |
||||||||
Equity-linked securities in short position |
16,456 | 87,626 |
Financial liabilities at fair value through profit or loss designated as upon initial recognition are designated in order to eliminate or significantly reduce accounting mismatch arising from recognition or measurement.
(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 Groups credit risk is considered in measuring the fair value of equity-linked securities index. The Groups 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): |
September 30, 2020 | December 31, 2019 | |||||||
Carrying amount |
16,456 | 87,626 | ||||||
Nominal amount at maturity |
27,531 | 97,503 | ||||||
|
|
|
|
|||||
Difference |
(11,075 | ) | (9,877 | ) | ||||
|
|
|
|
- 82 -
21. | DEPOSITS DUE TO CUSTOMERS |
Details of deposits due to customers by type are as follows (Unit: Korean Won in millions):
September 30, 2020 | December 31, 2019 | |||||||
Deposits in local currency: |
||||||||
Deposits on demand |
11,840,761 | 8,655,228 | ||||||
Deposits at termination |
229,240,105 | 224,115,771 | ||||||
Mutual installment |
27,011 | 28,574 | ||||||
Deposits on notes payables |
2,668,971 | 2,174,995 | ||||||
Deposits on CMA |
145,825 | 150,300 | ||||||
Certificate of deposits |
1,542,872 | 973,625 | ||||||
Other deposits |
1,377,728 | 1,451,470 | ||||||
|
|
|
|
|||||
Sub-total |
246,843,273 | 237,549,963 | ||||||
|
|
|
|
|||||
Deposits in foreign currencies: |
||||||||
Deposits in foreign currencies |
31,753,896 | 27,143,710 | ||||||
|
|
|
|
|||||
Present value discount |
(8,193 | ) | (8,095 | ) | ||||
|
|
|
|
|||||
Total |
278,588,976 | 264,685,578 | ||||||
|
|
|
|
- 83 -
22. | BORROWINGS AND DEBENTURES |
(1) | Details of borrowings are as follows (Unit: Korean Won in millions): |
September 30, 2020 |
||||||||||
Lenders |
Interest rate (%) | Amount | ||||||||
Borrowings in local currency: |
||||||||||
Borrowings from The BOK |
The BOK | 0.3 | 2,621,920 | |||||||
Borrowings from government funds |
Small Enterprise And Market Service and others |
0.0 ~ 3.5 | 2,201,717 | |||||||
Others |
The Korea Development Bank and others |
0.0 ~ 3.7 | 6,515,772 | |||||||
|
|
|||||||||
Sub-total |
11,339,409 | |||||||||
|
|
|||||||||
Borrowings in foreign currencies (*): |
||||||||||
Borrowings in foreign currencies |
JPMorgan Chase & Co. and others |
(0.4) ~ 7.3 | 7,941,602 | |||||||
Sub-total |
7,941,602 | |||||||||
|
|
|||||||||
Bills sold |
Others | 0.0 ~ 0.9 | 16,315 | |||||||
Call money |
Bank and others | (0.3) ~ 2.0 | 2,567,949 | |||||||
Bonds sold under repurchase agreements |
Other financial institutions | (0.5) ~ 10.6 | 903,583 | |||||||
Present value discount |
(365 | ) | ||||||||
|
|
|||||||||
Total |
22,768,493 | |||||||||
|
|
December 31, 2019 |
||||||||||
Lenders |
Interest rate (%) | Amount | ||||||||
Borrowings in local currency: |
||||||||||
Borrowings from The BOK |
The BOK | 0.5 ~ 0.8 | 1,770,726 | |||||||
Borrowings from government funds |
Small Enterprise And Market Service and others |
0.0 ~ 2.8 | 1,844,798 | |||||||
Others |
The Korea Development Bank and others |
0.0 ~ 5.0 | 6,070,201 | |||||||
|
|
|||||||||
Sub-total |
9,685,725 | |||||||||
Borrowings in foreign currencies (*): |
||||||||||
Borrowings in foreign currencies |
The Export-Import Bank of Korea and others |
(0.3) ~ 8.3 | 8,566,872 | |||||||
Offshore borrowings in foreign currencies |
HSBC, HKG |
3.0 | 34,734 | |||||||
|
|
|||||||||
Sub-total |
8,601,606 | |||||||||
|
|
|||||||||
Bills sold |
Others | 0.0 ~ 1.6 | 9,367 | |||||||
Call money |
Bank and others | (0.3) ~ 3.5 | 133,519 | |||||||
Bonds sold under repurchase agreements |
Other financial institutions | 1.4 ~ 12.7 | 569,002 | |||||||
Present value discount |
(299 | ) | ||||||||
|
|
|||||||||
Total |
18,998,920 | |||||||||
|
|
(*) | Included borrowing in foreign currencies under cash flow hedge amounting to 34,443 million won as of December 31, 2019. |
- 84 -
(2) | Details of debentures are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||||||||||
Interest rate (%) |
Amount | Interest rate (%) |
Amount | |||||||||||||
Face value of bond (*): |
||||||||||||||||
Ordinary bonds |
0.9 ~ 3.1 | 21,549,754 | 0.0 ~ 4.3 | 23,207,600 | ||||||||||||
Subordinated bonds |
1.9 ~ 5.9 | 7,291,791 | 2.1 ~ 5.9 | 6,732,687 | ||||||||||||
Other bonds |
0.7 ~ 17 | 1,147,798 | 1.2 ~ 17.0 | 942,421 | ||||||||||||
|
|
|
|
|||||||||||||
Sub-total |
29,989,343 | 30,882,708 | ||||||||||||||
|
|
|
|
|||||||||||||
Discounts on bonds |
(24,552 | ) | (24,653 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Total |
29,964,791 | 30,858,055 | ||||||||||||||
|
|
|
|
(*) | Included debentures under fair value hedge amounting to 2,872,198 million won and 3,151,172 million won as of September 30, 2020 and December 31, 2019 respectively. Also, debentures under cash flow hedge amounting to 1,085,986 million won and 829,082 million won are included as of September 30, 2020 and December 31, 2019 respectively. |
23. | PROVISIONS |
(1) | Details of provisions are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Asset retirement obligation |
69,093 | 66,485 | ||||||
Provisions for guarantees (*1) |
83,205 | 92,486 | ||||||
Provisions for unused loan commitments |
137,103 | 112,554 | ||||||
Other provisions (*2) |
173,797 | 172,455 | ||||||
|
|
|
|
|||||
Total |
463,198 | 443,980 | ||||||
|
|
|
|
(*1) | Provisions for guarantees includes provision for financial guarantee of 55,257 million won and 62,764 million won as of September 30, 2020 and December 31, 2019, 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): |
1) | Provisions for guarantees |
For the nine-month period ended September 30, 2020 | ||||||||||||||||
Stage1 | Stage2 | Stage3 | Total | |||||||||||||
Beginning balance |
50,801 | 26,303 | 15,382 | 92,486 | ||||||||||||
Transfer to 12-month expected credit loss |
61 | (61 | ) | | | |||||||||||
Transfer to expected credit loss for the entire period |
(372 | ) | 1,615 | (1,243 | ) | | ||||||||||
Transfer to credit-impaired financial assets |
(13 | ) | (3 | ) | 16 | | ||||||||||
Provisions used |
| | | | ||||||||||||
Net provision (reversal) of unused amount |
1,392 | (14,823 | ) | 1,239 | (12,192 | ) | ||||||||||
Others (*) |
2,910 | | 1 | 2,911 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
54,779 | 13,031 | 15,395 | 83,205 | ||||||||||||
|
|
|
|
|
|
|
|
(*) | Others have occurred as a result of new financial guarantee contract valued at initial fair value. |
- 85 -
For the nine-month period ended September 30, 2019 | ||||||||||||||||
Stage1 | Stage2 | Stage3 | Total | |||||||||||||
Beginning balance |
44,903 | 33,760 | 11,098 | 89,761 | ||||||||||||
Transfer to 12-month expected credit loss |
13,570 | (13,570 | ) | | | |||||||||||
Transfer to expected credit loss for the entire period |
(400 | ) | 400 | | | |||||||||||
Transfer to credit-impaired financial assets |
(14 | ) | (33 | ) | 47 | | ||||||||||
Provisions used |
(18,190 | ) | | | (18,190 | ) | ||||||||||
Net provision (reversal) of unused amount |
(14,240 | ) | 5,322 | 8,161 | (757 | ) | ||||||||||
Others (*) |
25,956 | 2 | 2 | 25,960 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
51,585 | 25,881 | 19,308 | 96,774 | ||||||||||||
|
|
|
|
|
|
|
|
(*) | Others have occurred as a result of new financial guarantee contract valued at initial fair value. |
2) | Provisions for unused loan commitment |
For the nine-month period ended September 30, 2020 | ||||||||||||||||
Stage1 | Stage2 | Stage3 | Total | |||||||||||||
Beginning balance |
65,038 | 43,164 | 4,352 | 112,554 | ||||||||||||
Transfer to 12-month expected credit loss |
6,651 | (6,265 | ) | (386 | ) | | ||||||||||
Transfer to expected credit loss for the entire period |
(1,815 | ) | 2,326 | (511 | ) | | ||||||||||
Transfer to credit-impaired financial assets |
(154 | ) | (283 | ) | 437 | | ||||||||||
Net provision (reversal) of unused amount |
7,437 | 15,731 | 1,384 | 24,552 | ||||||||||||
Others |
(3 | ) | | | (3 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
77,154 | 54,673 | 5,276 | 137,103 | ||||||||||||
|
|
|
|
|
|
|
|
For the nine-month period ended September 30, 2019 | ||||||||||||||||
Stage1 | Stage2 | Stage3 | Total | |||||||||||||
Beginning balance |
74,625 | 45,283 | 1,627 | 121,535 | ||||||||||||
Transfer to 12-month expected credit loss |
15,979 | (15,565 | ) | (414 | ) | | ||||||||||
Transfer to expected credit loss for the entire period |
(3,047 | ) | 3,188 | (141 | ) | | ||||||||||
Transfer to credit-impaired financial assets |
(355 | ) | (443 | ) | 798 | | ||||||||||
Net provision (reversal) of unused amount |
(8,739 | ) | 10,365 | 3,974 | 5,600 | |||||||||||
Others |
(3,405 | ) | 5,163 | (1,652 | ) | 106 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
75,058 | 47,991 | 4,192 | 127,241 | ||||||||||||
|
|
|
|
|
|
|
|
- 86 -
(3) | Changes in asset retirement for the nine-month period ended September 30, 2020 and 2019, obligation are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30 | ||||||||
2020 | 2019 | |||||||
Beginning balance |
66,485 | 67,200 | ||||||
Provisions provided |
3,722 | 2,230 | ||||||
Provisions used |
(1,368 | ) | (2,143 | ) | ||||
Reversal of provisions unused |
(94 | ) | (2,677 | ) | ||||
Unwinding of discount |
348 | 327 | ||||||
Business combination |
| 329 | ||||||
Others |
| 292 | ||||||
|
|
|
|
|||||
Ending balance |
69,093 | 65,558 | ||||||
|
|
|
|
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 September 30, 2020, discounted by appropriate discount rate. The restoration cost is expected to occur by the end of each premises 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.
(4) | Changes in other provisions for the nine-month period ended September 30, 2020 and 2019, are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30 | ||||||||
2020 | 2019 | |||||||
Beginning balance |
172,455 | 63,637 | ||||||
Provisions provided |
171,099 | 4,118 | ||||||
Provisions used |
(170,933 | ) | (3,777 | ) | ||||
Provision (reversal) of provisions unused |
(259 | ) | (66 | ) | ||||
Foreign currencies translation adjustments |
1,520 | 11 | ||||||
Others |
(85 | ) | 2,166 | |||||
|
|
|
|
|||||
Ending balance |
173,797 | 66,089 | ||||||
|
|
|
|
(5) | Others |
1) | As of September 23, 2019, the Group temporarily suspended the Won-payment business due to tightened U.S. sanctions on Iran while it was ongoing to settle trade transactions between Korea and Iran. In connection with these services, the Group is currently being investigated by US government agencies including US prosecutors (United States Attorneys Office and New York State Attorney Generals Office) and Office of Foreign Assets Control 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 US. |
2) | The Group recognized the provision of the estimated compensation amount related to the miss-selling of the Derivative Linked Fund (DLF) incurred during the previous term 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. |
3) | For the nine-month period ended September 30, 2020, the Group recognized the provisions for the required expenditure as the best estimate to fulfill its obligations as of September 30, 2020 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. |
- 87 -
24. | NET DEFINED BENEFIT LIABILITY(ASSET) |
The characteristics of the Groups defined benefit retirement pension plans are as follows:
Employees and directors with one or more years of service are entitled to receive a payment upon termination of their employment, based on their length of service and rate of 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): |
September 30, 2020 | December 31, 2019 | |||||||
Present value of defined benefit obligation |
1,578,583 | 1,442,859 | ||||||
Fair value of plan assets |
(1,392,539 | ) | (1,352,971 | ) | ||||
|
|
|
|
|||||
Net defined benefit liabilities (*) |
186,044 | 89,888 | ||||||
|
|
|
|
(*) | Net defined benefit liability of 89,888 million won as of December 31, 2019 is the subtracted amount of the net defined benefit asset of 2,582 million won from the net defined benefit liability of 92,470 million won. |
(2) | Changes in the carrying value of defined benefit obligation are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30 | ||||||||||
2020 | 2019 | |||||||||
Beginning balance |
1,442,859 | 1,275,020 | ||||||||
Transfer-in / out |
| 93 | ||||||||
Current service cost |
130,247 | 122,730 | ||||||||
Interest cost |
25,184 | 24,939 | ||||||||
Remeasurements |
Financial assumption | 25,680 | 76,628 | |||||||
Demographic assumptions | | | ||||||||
Experience adjustments | 1,903 | (29,329 | ) | |||||||
Retirement benefit paid |
(48,622 | ) | (66,038 | ) | ||||||
Foreign currencies translation adjustments |
(56 | ) | 236 | |||||||
Others |
1,388 | (270 | ) | |||||||
|
|
|
|
|||||||
Ending balance |
1,578,583 | 1,404,009 | ||||||||
|
|
|
|
- 88 -
(3) | Changes in the plan assets are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30 | ||||||||
2020 | 2019 | |||||||
Beginning balance |
1,352,971 | 1,101,911 | ||||||
Transfer-in / out |
| 93 | ||||||
Interest income |
25,732 | 23,611 | ||||||
Remeasurements |
(5,835 | ) | (7,568 | ) | ||||
Employers contributions |
67,809 | 118,266 | ||||||
Retirement benefit paid |
(47,862 | ) | (65,610 | ) | ||||
Others |
(276 | ) | (193 | ) | ||||
|
|
|
|
|||||
Ending balance |
1,392,539 | 1,170,510 | ||||||
|
|
|
|
(4) | Plan assets consist of fixed deposits and others as of September 30, 2020 and December 31, 2019. Among plan assets, realized returns on plan assets amount to 19,897 million won and 16,043 million won for the nine-month period ended September 30, 2020 and 2019, respectively. |
(5) | Current service cost, net interest income, loss (gain) on the curtailment or settlement and remeasurements recognized in the consolidated statements comprehensive income are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30 | ||||||||
2020 | 2019 | |||||||
Current service cost |
130,247 | 122,730 | ||||||
Net interest expense (income) |
(548 | ) | 1,328 | |||||
|
|
|
|
|||||
Cost recognized in net income |
129,699 | 124,058 | ||||||
|
|
|
|
|||||
Remeasurements (*) |
33,418 | 54,867 | ||||||
|
|
|
|
|||||
Cost recognized in total comprehensive income |
163,117 | 178,925 | ||||||
|
|
|
|
(*) | Amount before tax |
Retirement benefits related to defined contribution plans recognized as expenses are 3,028 million won, and 2,504 million won for the nine-month period ended September 30, 2020 and 2019, respectively.
25. | OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES |
Other financial liabilities and other liabilities are as follows (Unit: Korean Won in millions):
September 30, 2020 | December 31, 2019 | |||||||
Other financial liabilities: |
||||||||
Accounts payable |
8,059,616 | 6,131,339 | ||||||
Accrued expenses |
1,846,734 | 2,516,231 | ||||||
Borrowings from trust accounts |
3,245,572 | 3,277,795 | ||||||
Agency business revenue |
683,438 | 362,820 | ||||||
Foreign exchange payables |
437,284 | 1,153,457 | ||||||
Domestic exchange settlement credits |
1,283,391 | 1,261,928 | ||||||
Lease liabilities |
404,677 | 419,045 | ||||||
Other miscellaneous financial liabilities |
1,986,875 | 2,587,193 | ||||||
Present value discount |
(5,647 | ) | (3,041 | ) | ||||
|
|
|
|
|||||
Sub-total |
17,941,940 | 17,706,767 | ||||||
|
|
|
|
|||||
Other liabilities: |
||||||||
Unearned income |
233,107 | 224,840 | ||||||
Other miscellaneous liabilities |
226,500 | 195,631 | ||||||
|
|
|
|
|||||
Sub-total |
459,607 | 420,471 | ||||||
|
|
|
|
|||||
Total |
18,401,547 | 18,127,238 | ||||||
|
|
|
|
- 89 -
26. | DERIVATIVES |
(1) | Derivative assets and derivative liabilities are as follows (Unit: Korean Won in millions): |
September 30, 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 |
458,821 | | | | | | | |||||||||||||||||||||
Swaps |
141,008,845 | | 217,225 | 404,836 | 2,100 | | 624,709 | |||||||||||||||||||||
Purchase options |
370,000 | | | 10,844 | | | | |||||||||||||||||||||
Written options |
285,868 | | | | | | 7,983 | |||||||||||||||||||||
Currency: |
||||||||||||||||||||||||||||
Futures |
1,643 | | | | | | | |||||||||||||||||||||
Forwards |
123,347,349 | | | 1,617,858 | | | 916,409 | |||||||||||||||||||||
Swaps |
91,507,843 | 11,355 | | 1,375,650 | 20,939 | | 1,220,367 | |||||||||||||||||||||
Purchase options |
1,749,246 | | | 23,229 | | | | |||||||||||||||||||||
Written options |
2,593,852 | | | | | | 17,704 | |||||||||||||||||||||
Equity: |
||||||||||||||||||||||||||||
Futures |
429,538 | | | | | | | |||||||||||||||||||||
Forwards |
11 | | | | | | | |||||||||||||||||||||
Swaps |
670,587 | | | 30,319 | | | 7,946 | |||||||||||||||||||||
Purchase options |
11,076,092 | | | 565,008 | | | | |||||||||||||||||||||
Written options |
11,741,739 | | | | | | 713,775 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
385,241,434 | 11,355 | 217,225 | 4,027,744 | 23,039 | | 3,508,893 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019 | ||||||||||||||||||||||||||||
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 |
124,737 | | | | | | | |||||||||||||||||||||
Swaps |
150,731,987 | | 111,764 | 300,750 | 1,323 | | 413,195 | |||||||||||||||||||||
Purchase options |
460,000 | | | 11,888 | | | | |||||||||||||||||||||
Written options |
395,789 | | | | | | 9,655 | |||||||||||||||||||||
Currency: |
||||||||||||||||||||||||||||
Futures |
1,934 | | | | | | | |||||||||||||||||||||
Forwards |
113,988,295 | | | 1,447,811 | 321 | | 1,030,246 | |||||||||||||||||||||
Swaps |
82,125,050 | 9,367 | | 966,181 | 5,193 | | 1,106,423 | |||||||||||||||||||||
Purchase options |
1,588,746 | | | 18,835 | | | | |||||||||||||||||||||
Written options |
2,341,179 | | | | | | 9,403 | |||||||||||||||||||||
Equity: |
||||||||||||||||||||||||||||
Futures |
630,562 | | | | | | | |||||||||||||||||||||
Forwards |
11 | | | | | | | |||||||||||||||||||||
Swaps |
1,280,436 | | | 1,217 | | | 54,393 | |||||||||||||||||||||
Purchase options |
8,851,984 | | | 175,221 | | | | |||||||||||||||||||||
Written options |
8,978,953 | | | | | | 219,831 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
371,499,663 | 9,367 | 111,764 | 2,921,903 | 6,837 | | 2,843,146 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
- 90 -
(2) | Overview of the Groups 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, and USD 6M LIBOR. The nominal amounts of hedging instruments related to USD 1M LIBOR, USD 3M LIBOR, and USD 6M LIBOR in the hedging relationships of the Group are USD 620,000,000, USD 2,230,000,000, and USD 500,000,000, 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.
1) | Fair value hedge |
As of the September 30, 2020, the Group has applied fair value hedge on fixed interest rate foreign currency denominated debentures amounting to 2,872,198 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 (6M) plus spread. In accordance with the terms of each interest rate swap contract designated as a hedging instrument, the Group receives interest at a fixed interest rate and pays interest at a variable interest rate.
2) | Cash Flow Hedge |
As of the September 30, 2020, the Group has applied cash flow hedge on local currency denominated debentures amounting to 149,925 million won, debentures on foreign currency amounting to 936,061 million won. The Groups 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.
- 91 -
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.
- 92 -
(3) | The nominal amounts of the hedging instrument are as follows (Unit: USD, EUR, SGD, JPY and Korean Won in millions): |
September 30, 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 | ||||||||||||
Cash flow hedge |
||||||||||||||||
Interest rate risk |
||||||||||||||||
Interest rate swap (KRW) |
| 150,000 | | 150,000 | ||||||||||||
Foreign currencies translation risk and interest rate risk |
||||||||||||||||
Currency swap (USD) |
205,000,000 | 470,000,000 | | 675,000,000 | ||||||||||||
Foreign currencies translation risk |
||||||||||||||||
Currency swap (SGD) |
170,000,000 | | | 170,000,000 |
December 31, 2019 | ||||||||||||||||
1 year or less | 1 year to 5 years | More than 5 years |
Total | |||||||||||||
Fair value hedge |
||||||||||||||||
Interest rate risk |
||||||||||||||||
Interest rate swap (USD) |
350,000,000 | 2,000,000,000 | 300,000,000 | 2,650,000,000 | ||||||||||||
Cash flow hedge |
||||||||||||||||
Interest rate risk |
||||||||||||||||
Interest rate swap (EUR) |
| 26,635,556 | | 26,635,556 | ||||||||||||
Interest rate swap (KRW) |
| 100,000 | | 100,000 | ||||||||||||
Foreign currencies translation risk and interest rate risk |
||||||||||||||||
Currency swap (USD) |
150,000,000 | 330,000,000 | | 480,000,000 | ||||||||||||
Foreign currencies translation risk |
||||||||||||||||
Currency swap (SGD) |
136,000,000 | 68,000,000 | | 204,000,000 | ||||||||||||
Currency forward (JPY) |
49,325,155 | 1,059,903,932 | | 1,109,229,087 |
- 93 -
(4) | The average interest rate and average currency rate of the hedging instrument as of September 30, 2020 and December 31, 2019 are as follows: |
September 30, 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 | |
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 | |
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 | |
Foreign currencies translation risk |
||
Currency swap (SGD) |
SGD 1.91% receipt, KRW 1.98% paid, SGD/KRW = 827.57 |
December 31, 2019 | ||
Average interest rate and average exchange rate | ||
Fair value hedge |
||
Interest rate risk |
||
Interest rate swap (USD) |
Fixed 3.96% receipt and Libor 3M+1.61% floating paid Fixed 5.88% receipt and Libor 6M+2.15% floating paid | |
Cash flow hedge |
||
Interest rate risk |
||
Interest rate swap (EUR) |
3M EURIBOR receipt, EUR 0.09% paid | |
Interest rate swap (KRW) |
KRW 3Y CMS+0.40% receipt, 2.38% paid | |
Foreign currencies translation risk and interest rate risk |
||
Currency swap (USD) |
USD 3M Libor+0.8% receipt, KRW 1.45% paid, KRW/USD = 1,155 USD 1M Libor+0.54% receipt, KRW 1.53% paid, KRW/USD = 1,158 | |
Foreign currencies translation risk |
||
Currency swap (SGD) |
SGD 1.91% receipt, KRW 1.98% paid, KRW/SGD = 828 | |
Currency forward (JPY) |
KRW/JPY = 10.47 |
- 94 -
(5) | The amounts related to items designated as hedging instruments are as follows (Unit: Korean Won in millions, USD, EUR, SGD and JPY): |
September 30, 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 |
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 | 217,225 | | Derivative assets (designated for hedging) |
90,725 | |||||||||||||
Cash flow hedge |
||||||||||||||||||
Interest rate risk |
||||||||||||||||||
Interest rate swap |
KRW 150,000 | | 2,100 | Derivative assets (designated for hedging) |
(820 | ) | ||||||||||||
Foreign currency translation risk and interest rate risk |
||||||||||||||||||
Currency swap |
USD 675,000,000 | 6,637 | 20,939 | Derivative assets (designated for hedging) Derivative liabilities (designated for hedging) |
(15,027 | ) | ||||||||||||
Foreign currency translation risk |
||||||||||||||||||
Currency swap |
SGD 170,000,000 | 4,718 | | Derivative assets (designated for hedging) |
(877 | ) | ||||||||||||
December 31, 2019 | ||||||||||||||||||
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 2,650,000,000 | 111,764 | | Derivative assets (designated for hedging) |
90,244 | |||||||||||||
Cash flow hedge |
||||||||||||||||||
Interest rate risk |
||||||||||||||||||
Interest rate swap |
EUR 26,635,556 | | 43 | Derivative liabilities (designated for hedging) |
(43 | ) | ||||||||||||
Interest rate swap |
KRW 100,000 | | 1,280 | Derivative liabilities (designated for hedging) |
(615 | ) | ||||||||||||
Foreign currency translation risk and interest rate risk |
||||||||||||||||||
Currency swap |
USD 480,000,000 | 4,070 | 5,193 | Derivative assets (designated for hedging) Derivative liabilities (designated for hedging) |
22,364 | |||||||||||||
Foreign currency translation risk |
||||||||||||||||||
Currency swap |
SGD 204,000,000 | 5,297 | | Derivative assets (designated for hedging) |
8,918 | |||||||||||||
Currency forward |
JPY 1,109,229,087 | | 321 | Derivative liabilities (designated for hedging) |
321 |
- 95 -
(6) | Details of carrying amount to hedge and amount due to hedge accounting are as follows (Unit: Korean Won in millions): |
September 30, 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 | |||||||||||||||||||||||||
Fair value hedge |
||||||||||||||||||||||||||||
Interest rate risk |
||||||||||||||||||||||||||||
Debentures |
| 2,872,198 | | 179,095 | Debentures | (86,695 | ) | | ||||||||||||||||||||
Cash flow hedge |
||||||||||||||||||||||||||||
Interest rate risk |
||||||||||||||||||||||||||||
Debentures |
| 149,925 | | | Debentures | 3,314 | (1,361 | ) | ||||||||||||||||||||
Foreign currencies translation risk and interest rate risk |
||||||||||||||||||||||||||||
Debentures |
| 790,778 | | | Debentures | 11,437 | (7,460 | ) | ||||||||||||||||||||
Foreign currencies translation risk |
||||||||||||||||||||||||||||
Debentures |
| 145,283 | | | Debentures | 1,342 | (1,436 | ) |
(*) | After tax amount |
December 31, 2019 | ||||||||||||||||||||||||||||
Carrying amounts of |
Accumulated amount of fair value hedge adjustments on the hedged item included in the carrying amount of the hedged item |
Line item in the statement of financial position in which the hedged item is included |
Changing in fair value used for calculating hedge ineffectiveness |
Cash flow hedge reserve (*) |
||||||||||||||||||||||||
Assets |
Liabilities | Assets | Liabilities | |||||||||||||||||||||||||
Fair value hedge |
||||||||||||||||||||||||||||
Interest rate risk |
||||||||||||||||||||||||||||
Debentures |
| 3,151,172 | | 91,368 | Debentures | (85,984 | ) | | ||||||||||||||||||||
Cash flow hedge |
||||||||||||||||||||||||||||
Interest rate risk |
||||||||||||||||||||||||||||
Borrowings in foreign currencies |
| 34,443 | | | |
Borrowing foreign currency |
|
43 | (43 | ) | ||||||||||||||||||
Debentures |
| 99,941 | | | Debentures | 663 | (821 | ) | ||||||||||||||||||||
Foreign currencies translation risk and interest rate risk |
||||||||||||||||||||||||||||
Debentures |
| 554,433 | | | Debentures | (25,057 | ) | (2,525 | ) | |||||||||||||||||||
Foreign currencies translation risk Debentures |
| 174,708 | | | Debentures | (8,315 | ) | (2,304 | ) |
(*) | After tax amount |
- 96 -
(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 nine-month period ended September 30, 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 | 4,030 | Other net operating income(expense) |
For the nine-month period ended September 30, 2019 | ||||||||||
Hedge ineffectiveness recognized in profit or loss |
Line item in the profit or loss that includes hedge ineffectiveness | |||||||||
Fair value hedge |
Interest rate risk | 3,062 | 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 nine-month period ended September 30, 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 | (703 | ) | (74 | ) | | Other net operating income (expense) |
(43 | ) | Other net operating income (expense) | ||||||||||||||
|
Foreign currencies translation risk and interest rate risk |
|
(16,212 | ) | 84 | 1,849 | Other net operating income (expense) |
9,304 | Other net operating income (expense) | |||||||||||||||
|
Foreign currencies translation risk |
|
(228 | ) | 151 | 298 | Other net operating income (expense) |
797 | Other net operating income (expense) | |||||||||||||||
For the nine-month period ended September 30, 2019 | ||||||||||||||||||||||||
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 | (1,058 | ) | | | Other net operating income (expense) |
| Other net operating income (expense) | ||||||||||||||||
|
Foreign currencies translation risk and interest rate risk |
|
41,873 | 65 | 42 | Other net operating income (expense) |
(4,308 | ) | Other net operating income (expense) | |||||||||||||||
|
Foreign currencies translation risk |
|
10,506 | (874 | ) | 158 | Other net operating income (expense) |
(1,051 | ) | Other net operating income (expense) |
- 97 -
27. | DEFERRED DAY 1 PROFITS OR LOSSES |
Changes in deferred day 1 profits or losses are as follows (Unit: Korean Won in millions):
For the nine-month period ended September 30 | ||||||||
2020 | 2019 | |||||||
Beginning balance |
52,260 | 25,463 | ||||||
New transactions |
26,267 | 52,561 | ||||||
Amounts recognized in losses |
(57,572 | ) | (23,350 | ) | ||||
|
|
|
|
|||||
Ending balance |
20,955 | 54,674 | ||||||
|
|
|
|
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 September 30, 2020 and December 31, 2019 are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Capital |
||||||||
Common stock capital |
3,611,338 | 3,611,338 | ||||||
Hybrid securities |
1,695,821 | 997,544 | ||||||
Capital surplus |
||||||||
Paid in capital in excess of par |
608,348 | 608,348 | ||||||
Equity method |
763 | 1,153 | ||||||
Others |
18,385 | 16,794 | ||||||
|
|
|
|
|||||
Sub-total |
627,496 | 626,295 | ||||||
|
|
|
|
|||||
Capital adjustments |
||||||||
Treasury stocks |
| | ||||||
Other adjustments (*1) |
(1,775,066 | ) | (1,748,667 | ) | ||||
|
|
|
|
|||||
Sub-total |
(1,775,066 | ) | (1,748,667 | ) | ||||
|
|
|
|
|||||
Accumulated other comprehensive income |
||||||||
Financial assets at FVTOCI |
(48,602 | ) | (71,914 | ) | ||||
Changes in capital due to equity method |
(3,410 | ) | 915 | |||||
Loss from foreign business translation |
(166,657 | ) | (152,987 | ) | ||||
Remeasurements of defined benefit plan |
(295,229 | ) | (270,977 | ) | ||||
Loss on evaluation of cash flow hedge |
(10,256 | ) | (5,692 | ) | ||||
Capital related to noncurrent assets held for sale |
1,691 | | ||||||
|
|
|
|
|||||
Sub-total |
(522,463 | ) | (500,655 | ) | ||||
|
|
|
|
|||||
Retained earnings (*2) (*3) |
19,116,037 | 18,524,515 | ||||||
Non-controlling interest (*4) |
3,455,587 | 3,981,962 | ||||||
|
|
|
|
|||||
Total |
26,208,750 | 25,492,332 | ||||||
|
|
|
|
(*1) | Included capital transaction gains and losses recognized by the 2014 merger of Woori Bank and, formerly, Woori Financial Group Inc. During the previous term, the Group entered an agreement to acquire additional interest in the Woori Asset Trust Co., Ltd., and the capital adjustment reduced by 111,242 million won. |
(*2) | The earned surplus reserve in retained earnings amounted to 2,547,547 million won and 2,356,246 million won as of September 30, 2020 and December 31, 2019, respectively in accordance with the relevant article. |
(*3) | The regulatory reserve for credit loss in retained earnings amounted to 62,830 million won as of September 30, 2020 in accordance with the Article 53 of the Financial Holding Company Act. |
(*4) | The hybrid securities issued by Woori Bank amounting to 3,105,070 million won and 3,660,814 million won as of September 30, 2020 and December 31, 2019, respectively, are recognized as non-controlling interests. 118,659 million won and 118,614 million won of dividends for the hybrid securities are allocated to net profit and loss of the non-controlling interests for the nine-month period ended September 30, 2020 and 2019, respectively. |
- 98 -
(2) | The number of authorized shares and others of the Group are as follows: |
September 30, 2020 | December 31, 2019 | |||||||
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 |
722,267,683 Shares | 722,267,683 Shares | ||||||
Capital stock |
3,611,338 million won | 3,611,338 million won |
(3) | Hybrid securities |
The bond-type hybrid securities classified as owners equity are as follows (Unit: Korean Won in millions):
Issue date | Maturity | Interest rate (%) |
September 30, 2020 |
December 31, 2019 |
||||||||||||||
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 | | |||||||||||||
Securities in local currency |
2020-06-12 | | 3.23 | 300,000 | | |||||||||||||
Issuance cost |
|
(4,179 | ) | (2,456 | ) | |||||||||||||
|
|
|
|
|||||||||||||||
Total |
|
1,695,821 | 997,544 | |||||||||||||||
|
|
|
|
The hybrid securities mentioned above do not have maturity date but are redeemable after 5 years from date of issuance.
(4) | Accumulated other comprehensive income |
Changes in the accumulated other comprehensive income are as follows (Unit: Korean Won in millions):
For the nine-month period ended September 30, 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 | ) | 53,778 | (20,083 | ) | | (10,383 | ) | (48,602 | ) | ||||||||||||||
Changes in capital due to equity method |
915 | (4,275 | ) | | (1,691 | ) | 1,641 | (3,410 | ) | |||||||||||||||
Gain (loss) on foreign currency translation of foreign operations |
(152,987 | ) | (13,841 | ) | | | 171 | (166,657 | ) | |||||||||||||||
Remeasurement gain (loss) related to defined benefit plan |
(270,977 | ) | (33,451 | ) | | | 9,199 | (295,229 | ) | |||||||||||||||
Gain (loss) on valuation of derivatives designated as cash flow hedges |
(5,692 | ) | (4,892 | ) | | | 328 | (10,256 | ) | |||||||||||||||
Capital related to noncurrent assets held for sale |
| | | 1,691 | | 1,691 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
(500,655 | ) | (2,681 | ) | (20,083 | ) | | 956 | (522,463 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*) | 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 2,665 million won are due to disposal of equity securities during the period. |
- 99 -
For the nine-month period ended September 30, 2019 | ||||||||||||||||||||
Beginning balance |
Increase (decrease) (*) |
Reclassification adjustments |
Income tax effect |
Ending balance |
||||||||||||||||
Net gain (loss) on valuation of financial assets at FVTOCI |
(87,182 | ) | 53,379 | 687 | (13,642 | ) | (46,758 | ) | ||||||||||||
Changes in capital due to equity method |
302 | (924 | ) | | 497 | (125 | ) | |||||||||||||
Gain (loss) on foreign currency translation of foreign operations |
(244,735 | ) | 167,220 | | (9,454 | ) | (86,969 | ) | ||||||||||||
Remeasurement gain (loss) related to defined benefit plan |
(236,726 | ) | (53,455 | ) | | 13,723 | (276,458 | ) | ||||||||||||
Gain (loss) on valuation of derivatives designated as cash flow hedges |
(3,869 | ) | 13,141 | (14,030 | ) | (489 | ) | (5,247 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
(572,210 | ) | 179,361 | (13,343 | ) | (9,365 | ) | (415,557 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
(*) | 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 26,719 million won are due to disposal of equity securities during the period. |
(5) | Regulatory Reserve for Credit Loss |
In accordance with Article 26 ~ 28 of the Financial holding company Supervision Regulations, the Group calculates and discloses the regulatory reserve for credit loss.
1) | 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):
September 30, 2020 |
December 31, 2019 |
|||||||
Beginning balance |
2,547,547 | 2,356,246 | ||||||
Planned provision of regulatory reserve (reversal) for credit loss |
64,029 | 191,301 | ||||||
|
|
|
|
|||||
Ending balance |
2,611,576 | 2,547,547 | ||||||
|
|
|
|
2) | 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):
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Net income before regulatory reserve |
521,715 | 1,295,748 | 534,108 | 1,806,071 | ||||||||||||
Provision of regulatory reserve (reversal) for credit loss |
76,265 | 64,029 | 81,367 | 200,612 | ||||||||||||
Adjusted net income after the provision of regulatory reserve |
445,450 | 1,231,719 | 452,741 | 1,605,459 | ||||||||||||
Dividends to hybrid securities |
(14,275 | ) | (34,640 | ) | (3,571 | ) | (3,571 | ) | ||||||||
Adjusted net income after regulatory reserve and dividends to hybrid securities |
431,175 | 1,197,079 | 449,170 | 1,601,888 | ||||||||||||
Adjusted EPS after regulatory reserve and the dividends to hybrid securities (Unit: Korean Won) |
596 | 1,657 | 659 | 2,370 |
- 100 -
29. | DIVIDENDS |
Dividends per share and the total dividends for the fiscal year ending December 31, 2019 were 700 Won and 505,587 million won, respectively, and the dividends were approved at the regular general shareholders meeting held on March 25, 2020.
30. | NET INTEREST INCOME |
(1) | Interest income recognized is as follows (Unit: Korean Won in millions): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Financial assets at FVTPL |
12,908 | 39,118 | 13,970 | 41,875 | ||||||||||||
Financial assets at FVTOCI |
103,380 | 344,380 | 135,081 | 344,183 | ||||||||||||
Financial assets at amortized cost: |
||||||||||||||||
Securities at amortized cost |
92,613 | 294,673 | 107,421 | 332,617 | ||||||||||||
Loans and other financial assets at amortized cost: |
||||||||||||||||
Interest on due from banks |
10,479 | 43,214 | 31,309 | 97,617 | ||||||||||||
Interest on loans |
2,046,402 | 6,444,651 | 2,396,154 | 7,130,354 | ||||||||||||
Interest of other receivables |
6,652 | 22,401 | 7,580 | 22,561 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
2,063,533 | 6,510,266 | 2,435,043 | 7,250,532 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
2,272,434 | 7,188,437 | 2,691,515 | 7,969,207 | ||||||||||||
|
|
|
|
|
|
|
|
(2) | Details of interest expense recognized are as follows (Unit: Korean Won in millions): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Interest on deposits due to customers |
555,484 | 1,968,985 | 875,992 | 2,592,803 | ||||||||||||
Interest on borrowings |
56,860 | 222,446 | 104,069 | 297,194 | ||||||||||||
Interest on debentures |
164,712 | 531,904 | 199,124 | 582,939 | ||||||||||||
Other interest expense |
5,890 | 29,484 | 24,114 | 73,092 | ||||||||||||
Interest on lease liabilities |
2,049 | 7,330 | 2,418 | 6,329 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
784,995 | 2,760,149 | 1,205,717 | 3,552,357 | ||||||||||||
|
|
|
|
|
|
|
|
- 101 -
31. | NET FEES AND COMMISSIONS INCOME |
(1) | Details of fees and commissions income recognized are as follows (Unit: Korean Won in millions): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Fees and commission received for brokerage |
40,617 | 121,753 | 40,825 | 123,385 | ||||||||||||
Fees and commission received related to credit |
46,243 | 143,146 | 46,054 | 130,682 | ||||||||||||
Fees and commission received for electronic finance |
31,905 | 93,669 | 35,098 | 102,594 | ||||||||||||
Fees and commission received on foreign exchange handling |
14,185 | 41,982 | 15,694 | 45,769 | ||||||||||||
Fees and commission received on foreign exchange |
18,622 | 50,656 | 20,887 | 69,104 | ||||||||||||
Fees and commission received for guarantee |
17,847 | 54,914 | 18,841 | 53,881 | ||||||||||||
Fees and commission received on credit card |
128,884 | 378,151 | 138,678 | 407,198 | ||||||||||||
Fees and commission received on securities business |
20,778 | 59,674 | 29,955 | 95,555 | ||||||||||||
Fees and commission from trust management |
34,813 | 121,105 | 43,073 | 132,918 | ||||||||||||
Fees and commission received on credit information |
3,298 | 10,492 | 3,169 | 9,522 | ||||||||||||
Other fees |
41,818 | 131,461 | 34,434 | 104,341 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
399,010 | 1,207,003 | 426,708 | 1,274,949 | ||||||||||||
|
|
|
|
|
|
|
|
(2) | Details of fees and commissions expense incurred are as follows (Unit: Korean Won in millions): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Fees and commissions paid |
57,521 | 150,926 | 39,987 | 122,893 | ||||||||||||
Credit card commission |
106,910 | 318,694 | 103,576 | 303,919 | ||||||||||||
Brokerage commission |
159 | 376 | 167 | 648 | ||||||||||||
Others |
1,720 | 5,958 | 2,324 | 6,745 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
166,310 | 475,954 | 146,054 | 434,205 | ||||||||||||
|
|
|
|
|
|
|
|
32. | DIVIDEND INCOME |
(1) | Details of dividend income recognized are as follows (Unit: Korean Won in millions): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Dividend income related to financial assets at FVTPL |
25,510 | 82,063 | 18,229 | 65,326 | ||||||||||||
Dividend income related to financial assets at FVTOCI |
2,628 | 17,077 | 1,744 | 19,230 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
28,138 | 99,140 | 19,973 | 84,556 | ||||||||||||
|
|
|
|
|
|
|
|
(2) | Details of dividends related to financial assets at FVTOCI are as follows (Unit: Korean Won in millions): |
Periods ended September 30, 2020 |
Periods ended September 30, 2019 |
|||||||||||||||
Three- month |
Nine- month |
Three- month |
Nine- month |
|||||||||||||
Dividend income recognized from assets held: |
||||||||||||||||
Equity securities |
2,628 | 17,077 | 1,744 | 19,230 |
- 102 -
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): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Gain on financial instruments at fair value through profit or loss measured at fair value |
134,622 | 527,790 | 18,354 | 128,730 | ||||||||||||
Gain (loss) on financial instruments at fair value through profit or loss designated as upon initial recognition |
(4,280 | ) | 4,141 | 3,173 | (27,122 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
130,342 | 531,931 | 21,527 | 101,608 | ||||||||||||
|
|
|
|
|
|
|
|
(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): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||||||
Financial |
Securities | Gain on transactions and valuation |
36,230 | 133,432 | 36,324 | 137,405 | ||||||||||||||
Loss on transactions and valuation |
2,851 | (68,367 | ) | (23,643 | ) | (59,228 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total |
39,081 | 65,065 | 12,681 | 78,177 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loans | Gain on transactions and valuation |
133 | 1,863 | 566 | 1,508 | |||||||||||||||
Loss on transactions and valuation |
12 | (850 | ) | 10 | (15 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total | 145 | 1,013 | 576 | 1,493 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Other financial assets | Gain on transactions and valuation |
2,921 | 7,426 | 1,682 | 2,958 | |||||||||||||||
Loss on transactions and valuation |
(3,103 | ) | (7,298 | ) | (1,532 | ) | (2,650 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total | (182 | ) | 128 | 150 | 308 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total |
39,044 | 66,206 | 13,407 | 79,978 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Derivatives (Held for trading) |
Interest rates derivatives | Gain on transactions and valuation |
538,619 | 1,525,179 | 578,660 | 1,273,068 | ||||||||||||||
Loss on transactions and valuation |
(519,081 | ) | (1,839,640 | ) | (616,635 | ) | (1,462,035 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total |
19,538 | (314,461 | ) | (37,975 | ) | (188,967 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Currency derivatives | Gain on transactions and valuation |
659,344 | 6,860,252 | 3,113,284 | 7,297,751 | |||||||||||||||
Loss on transactions and valuation |
(592,399 | ) | (6,090,197 | ) | (3,079,971 | ) | (7,099,135 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total |
66,945 | 770,055 | 33,313 | 198,616 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Equity derivatives | Gain on transactions and valuation |
219,449 | 1,326,986 | 140,614 | 562,475 | |||||||||||||||
Loss on transactions and valuation |
(210,328 | ) | (1,320,607 | ) | (130,842 | ) | (522,854 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total |
9,121 | 6,379 | 9,772 | 39,621 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Other derivatives | Gain on transactions and valuation |
| | 51 | 690 | |||||||||||||||
Loss on transactions and valuation |
(26 | ) | (389 | ) | (214 | ) | (1,208 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total |
(26 | ) | (389 | ) | (163 | ) | (518 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total |
95,578 | 461,584 | 4,947 | 48,752 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net, total |
134,622 | 527,790 | 18,354 | 128,730 | ||||||||||||||||
|
|
|
|
|
|
|
|
- 103 -
(3) | Details of net gain (loss) on financial instruments at fair value through profit or loss designated as upon initial recognition and Losses on financial instruments designated as at fair value through profit or loss are as follows (Unit: Korean Won in millions): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Gain (loss) on equity-linked securities |
(4,280 | ) | 4,141 | 3,173 | (27,122 | ) |
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) :
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Gain on redemption of securities |
(14 | ) | (88 | ) | (9 | ) | 28 | |||||||||
Gain on transactions of securities |
7,664 | 18,765 | 4,600 | 8,008 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
7,650 | 18,677 | 4,591 | 8,036 | ||||||||||||
|
|
|
|
|
|
|
|
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):
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Impairment loss due to credit loss on financial assets measured at FVTOCI |
(643 | ) | (1,425 | ) | (1,465 | ) | (3,444 | ) | ||||||||
Reversal of impairment loss due to credit loss on securities at amortized cost |
169 | 122 | 151 | 920 | ||||||||||||
Provision for impairment loss due to credit loss on loan and other financial assets at amortized cost |
(150,990 | ) | (573,057 | ) | (193,799 | ) | (316,388 | ) | ||||||||
Reversal of provision on guarantee |
16,164 | 12,192 | 8,897 | 757 | ||||||||||||
Provision for unused loan commitment |
(4,741 | ) | (24,552 | ) | (993 | ) | (5,600 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
(140,041 | ) | (586,720 | ) | (187,209 | ) | (323,755 | ) | ||||||||
|
|
|
|
|
|
|
|
- 104 -
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): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||||||
Employee benefits |
Short-term employee benefits | Salaries | 383,963 | 1,154,277 | 372,794 | 1,090,636 | ||||||||||||||
Employee fringe benefits |
128,017 | 376,478 | 111,065 | 341,538 | ||||||||||||||||
Share based payment |
1,187 | 3,502 | 1,190 | 4,854 | ||||||||||||||||
Retirement benefit service costs |
44,520 | 132,727 | 42,030 | 126,562 | ||||||||||||||||
Termination |
69 | 290 | 428 | 7,994 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Subtotal |
557,756 | 1,667,274 | 527,507 | 1,571,584 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Depreciation and amortization |
128,574 | 387,538 | 131,407 | 346,149 | ||||||||||||||||
Other general and administrative expenses |
Rent | 22,106 | 57,278 | 17,224 | 78,009 | |||||||||||||||
Taxes and public dues |
26,220 | 100,488 | 38,782 | 112,545 | ||||||||||||||||
Service charges |
61,610 | 178,234 | 58,580 | 170,779 | ||||||||||||||||
Computer and IT related |
28,049 | 80,888 | 24,447 | 67,754 | ||||||||||||||||
Telephone and communication |
17,233 | 52,324 | 18,556 | 51,641 | ||||||||||||||||
Operating promotion |
10,744 | 31,462 | 11,791 | 31,173 | ||||||||||||||||
Advertising |
18,417 | 46,828 | 19,955 | 50,145 | ||||||||||||||||
Printing |
1,560 | 4,936 | 1,766 | 5,611 | ||||||||||||||||
Traveling |
1,745 | 5,443 | 3,339 | 9,620 | ||||||||||||||||
Supplies |
1,932 | 8,839 | 1,858 | 5,207 | ||||||||||||||||
Insurance premium |
2,116 | 7,667 | 2,509 | 6,752 | ||||||||||||||||
Reimbursement |
3,877 | 8,732 | 5,386 | 11,765 | ||||||||||||||||
Maintenance |
5,095 | 13,089 | 4,403 | 13,335 | ||||||||||||||||
Water, light, and heating |
3,980 | 11,620 | 4,114 | 11,611 | ||||||||||||||||
Vehicle maintenance |
2,686 | 7,507 | 2,781 | 7,658 | ||||||||||||||||
Others |
5,362 | 18,473 | 6,086 | 24,939 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total |
212,732 | 633,808 | 221,577 | 658,544 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total |
899,062 | 2,688,620 | 880,491 | 2,576,277 | ||||||||||||||||
|
|
|
|
|
|
|
|
(2) | Details of other operating income recognized are as follows (Unit: Korean Won in millions): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Gain on transactions of foreign exchange |
127,787 | 396,938 | 230,782 | 477,913 | ||||||||||||
Gain related to derivatives (Designated for hedging) |
(29,816 | ) | 102,540 | 50,973 | 169,127 | |||||||||||
Gain on fair value hedged items |
4,767 | 4,767 | | | ||||||||||||
Others |
11,279 | 44,033 | 5,655 | 41,747 | ||||||||||||
Total |
114,017 | 548,278 | 287,410 | 688,787 | ||||||||||||
|
|
|
|
|
|
|
|
(3) | Details of other operating expenses recognized are as follows (Unit: Korean Won in millions): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Losses on transactions of foreign exchange |
92,805 | 557,345 | 158,005 | 263,336 | ||||||||||||
KDIC deposit insurance premium |
94,054 | 274,584 | 84,437 | 246,156 | ||||||||||||
Contribution to miscellaneous funds |
85,046 | 242,015 | 81,055 | 237,114 | ||||||||||||
Losses related to derivatives (Designated for hedging) |
11,422 | 20,746 | 366 | 1,890 | ||||||||||||
Losses on fair value hedged items |
(16,840 | ) | 91,251 | 22,154 | 112,352 | |||||||||||
Others (*) |
27,193 | 88,643 | 31,434 | 109,105 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
293,680 | 1,274,584 | 377,451 | 969,953 | ||||||||||||
|
|
|
|
|
|
|
|
(*) | Other expense includes such expenses amounting to 9,363 million won and 16,211 million won, respectively, of intangible asset amortization expense for the nine-month period ended September 30, 2020 and 2019, respectively. |
- 105 -
(4) | Share-based payment |
Details of performance condition share-based payment granted to executives as of September 30, 2020 and December 31, 2019 are as follows.
1) | 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) |
7,724 Won | |||
Valuation method |
Black-Scholes Model | |||
Expected dividend rate |
4.13% | |||
Expected maturity date |
2.25 years | |||
Number of shares remaining |
As of September 30, 2020 | 602,474 shares | ||
As of December 31, 2019 | 602,474 shares | |||
Number of shares granted (*2) |
As of September 30, 2020 | 602,474 shares | ||
As of December 31, 2019 | 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) |
7,412 Won | |||
Valuation method |
Black-Scholes Model | |||
Expected dividend rate |
4.13% | |||
Expected maturity date |
3.25 years | |||
Number of shares remaining |
As of September 30, 2020 | 698,428 shares | ||
As of December 31, 2019 | | |||
Number of shares granted (*2) |
As of September 30, 2020 | 698,428 shares | ||
As of December 31, 2019 | |
(*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 and used to measure the liability according to the Black Shawls 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. |
2) | 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 September 30, 2020 and December 31, 2019, the book value of the liabilities related to the performance condition share-based payments recognized by the Group amounts to 9,830 million won and 6,328 million won, respectively. |
- 106 -
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): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Gains on valuation of investments in joint ventures and associates |
15,226 | 50,909 | 13,723 | 33,022 | ||||||||||||
Losses on valuation of investments in joint ventures and associates |
(5,243 | ) | (16,974 | ) | (3,620 | ) | (12,062 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
9,983 | 33,935 | 10,103 | 20,960 | ||||||||||||
|
|
|
|
|
|
|
|
(2) | Details of other non-operating income and expenses recognized are as follows (Unit: Korean Won in millions): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Other non-operating incomes |
2,801 | 39,915 | 7,590 | 54,526 | ||||||||||||
Other non-operating expenses |
(11,964 | ) | (211,779 | ) | (6,714 | ) | (46,837 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
(9,163 | ) | (171,864 | ) | 876 | 7,689 | ||||||||||
|
|
|
|
|
|
|
|
(3) | Details of other non-operating income recognized are as follows (Unit: Korean Won in millions): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Rental fee income |
2,367 | 9,944 | 3,308 | 6,750 | ||||||||||||
Gains on disposal of premises and equipment, intangible assets and other assets |
(26 | ) | 6,549 | 72 | 1,375 | |||||||||||
Reversal of impairment loss of premises and equipment, intangible assets and other assets |
32 | 87 | (677 | ) | 45 | |||||||||||
Others |
428 | 23,335 | 4,887 | 46,356 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
2,801 | 39,915 | 7,590 | 54,526 | ||||||||||||
|
|
|
|
|
|
|
|
(4) | Details of other non-operating expenses recognized are as follows (Unit: Korean Won in millions): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Depreciation on investment properties |
725 | 1,812 | 468 | 1,766 | ||||||||||||
Operating expenses on investment properties |
199 | 581 | 216 | 578 | ||||||||||||
Losses on disposal of premises and equipment, intangible assets and other assets |
916 | 1,736 | 358 | 1,606 | ||||||||||||
Impairment losses of premises and equipment, intangible assets and other assets |
175 | 8,429 | (258 | ) | 1,422 | |||||||||||
Donation |
7,118 | 18,423 | 1,760 | 25,729 | ||||||||||||
Others (*) |
2,831 | 180,798 | 4,170 | 15,736 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
11,964 | 211,779 | 6,714 | 46,837 | ||||||||||||
|
|
|
|
|
|
|
|
(*) | Included 165,015 million won of other special losses related to other provisions for the nine-month period ended September 30,2020. |
- 107 -
38. | INCOME TAX EXPENSE |
(1) | Details of income tax expenses are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30 | ||||||||
2020 | 2019 | |||||||
Current tax expense: |
||||||||
Current tax expense with respect to the current period |
292,519 | 498,849 | ||||||
Adjustments recognized in the current period in relation to the tax expense of prior periods |
(34,461 | ) | (52,942 | ) | ||||
|
|
|
|
|||||
Sub-total |
258,058 | 445,907 | ||||||
|
|
|
|
|||||
Deferred tax expense |
||||||||
Change in deferred tax assets (liabilities) due to temporary differences |
155,067 | 155,739 | ||||||
Income tax expense directly attributable to equity |
956 | (9,365 | ) | |||||
|
|
|
|
|||||
Sub-total |
156,023 | 146,374 | ||||||
|
|
|
|
|||||
Income tax expense |
414,081 | 592,281 | ||||||
|
|
|
|
Income tax expense (income) was recognized based on the estimate of the best weighted average annual effective tax rate expected for the interim period. The weighted average annual effective tax rate for the September 30, 2020, is 24.2% (The weighted average annual effective tax rate for the September 30, 2019, is 24.7%).
- 108 -
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): |
Periods ended September 30, 2020 | Periods ended September 30, 2019 | |||||||||||||||
Three-month | Nine-month | Three-month | Nine-month | |||||||||||||
Net income attributable to common shareholders |
480,200 | 1,140,764 | 486,009 | 1,665,697 | ||||||||||||
Dividends to hybrid securities |
(14,275 | ) | (34,640 | ) | (3,571 | ) | (3,571 | ) | ||||||||
Net income attributable to common shareholders |
465,925 | 1,106,124 | 482,438 | 1,662,126 | ||||||||||||
Weighted average number of common shares outstanding |
722 shares in million | 722 shares in million | 682 Shares in million | 676 Shares in million | ||||||||||||
Basic EPS (Unit: Korean Won) |
645 | 1,532 | 708 | 2,459 |
(2) | The weighted average number of common shares outstanding is as follows: (Unit: number of shares, days) |
For the nine-month period ended September 30, 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 ~ 2020-09-30 | 722,267,683 | 274 | 197,901,345,142 | ||||||||||||
Treasury stock |
2020-01-01 ~ 2020-09-30 | (2 | ) | 274 | (548 | ) | ||||||||||
|
|
|||||||||||||||
Sub-total (①) |
|
197,901,344,594 | ||||||||||||||
|
|
|||||||||||||||
Weighted average number of common shares outstanding (②=(①/274) |
|
722,267,681 | ||||||||||||||
|
|
For the nine-month period ended September 30, 2019 | ||||||||||||||||
Period | Number of shares |
Dates (Unit: Day) |
Accumulated number of shares outstanding during period |
|||||||||||||
Common shares issued at the beginning of the period |
2019-01-01 ~ 2019-09-30 | 673,271,226 | 273 | 183,803,044,698 | ||||||||||||
Purchase of treasury stock |
2019-01-08 ~ 2019-09-30 | (11,453,702 | ) | 266 | (3,046,684,732 | ) | ||||||||||
Disposal of treasury stock |
2019-03-22 ~ 2019-09-30 | 18,346,782 | 193 | 3,540,928,926 | ||||||||||||
Disposal of treasury stock (*) |
2019-09-26 ~ 2019-09-30 | 28,890,707 | 5 | 144,453,535 | ||||||||||||
|
|
|||||||||||||||
Sub-total (①) |
|
184,441,742,427 | ||||||||||||||
|
|
|||||||||||||||
Weighted average number of common shares outstanding (②=(①/273) |
|
675,610,778 | ||||||||||||||
|
|
(*) | In September 2019, Woori Bank disposed of 28,890,707 shares out of 42,103,377 shares acquired through comprehensive exchange of shares in Woori Card Co., Ltd. and its parent company Woori Financial Group Inc. |
Diluted EPS is equal to basic EPS because there is no dilution effect for the nine-month period ended September 30, 2020 and 2019.
- 109 -
40. | CONTINGENT LIABILITIES AND COMMITMENTS |
(1) | Details of guarantees are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Confirmed guarantees |
||||||||
Guarantee for loans |
79,141 | 89,699 | ||||||
Acceptances |
624,485 | 391,688 | ||||||
Guarantees in acceptances of imported goods |
77,433 | 224,746 | ||||||
Other confirmed guarantees |
6,821,763 | 6,982,889 | ||||||
|
|
|
|
|||||
Sub-total |
7,602,822 | 7,689,022 | ||||||
|
|
|
|
|||||
Unconfirmed guarantees |
||||||||
Local letters of credit |
198,157 | 193,096 | ||||||
Letters of credit |
2,393,460 | 3,081,390 | ||||||
Other unconfirmed guarantees |
488,463 | 771,378 | ||||||
|
|
|
|
|||||
Sub-total |
3,080,080 | 4,045,864 | ||||||
|
|
|
|
|||||
Commercial paper purchase commitments and others |
892,457 | 884,031 | ||||||
|
|
|
|
|||||
Total |
11,575,359 | 12,618,917 | ||||||
|
|
|
|
(2) | Details of unused loan commitments and others are as follows (Unit: Korean Won in millions): |
September 30, 2020 | December 31, 2019 | |||||||
Loan commitments |
110,958,256 | 103,651,674 | ||||||
Other commitments (*) |
7,947,547 | 5,993,608 |
(*) | As of September 30, 2020 and December 31, 2019, the amount of unsecured bills (purchase note sales) and discounts on electronic short-term bond sales (purchase) are 3,313,432 million won and 2,582,274 million won, respectively. |
(3) | Litigation case |
Legal cases where the Group is involved are as follows (Unit: Korean Won in millions):
September 30, 2020 | December 31, 2019 | |||||||||||||||
As plaintiff | As defendant | As plaintiff | As defendant | |||||||||||||
Number of cases (*) |
103 cases | 443 cases | 119 cases | 415 cases | ||||||||||||
Amount of litigation |
284,624 | 437,575 | 291,880 | 391,362 | ||||||||||||
Provisions for litigations |
25,408 | 27,029 |
(*) | The number of lawsuits as of September 30, 2020 and December 31, 2019 do not include fraud lawsuits, etc. and those lawsuits that are filed only to extend the statute of limitation. |
(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 112,663 million won as other financial liabilities for the second sales agreement.
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41. | RELATED PARTY TRANSACTIONS |
Related parties of the Group as of September 30, 2020 and December 31, 2019, and assets and liabilities recognized, guarantees and commitments, major transactions with related parties and compensation to key management for the nine-month period ended September 30, 2020 and 2019 are as follows:
(1) | Assets and liabilities from transactions with related parties are as follows (Unit: Korean Won in millions): |
Related parties |
Account title |
September 30, 2020 |
December 31, 2019 |
|||||||||
Associates |
W Service Networks Co., Ltd. |
Loans | 50 | 23 | ||||||||
Loss allowance |
| (1 | ) | |||||||||
Deposits due to customers |
2,572 | 1,881 | ||||||||||
Accrued expenses |
6 | 6 | ||||||||||
Other liabilities |
464 | 429 | ||||||||||
Korea Credit Bureau Co., Ltd. |
Loans |
1 | 3 | |||||||||
Deposits due to customers |
1,599 | 26 | ||||||||||
Other liabilities |
3 | | ||||||||||
Korea Finance Security Co., Ltd. |
Loans |
3,942 | 1,860 | |||||||||
Loss allowance |
(9 | ) | (3 | ) | ||||||||
Deposits due to customers |
1,063 | 1,371 | ||||||||||
Chin Hung International Inc. |
Loans |
283 | 244 | |||||||||
Loss allowance |
(3 | ) | (2 | ) | ||||||||
Deposits due to customers |
6,602 | 5,381 | ||||||||||
Other liabilities |
423 | 321 | ||||||||||
LOTTE CARD Co. Ltd. |
Loans |
7,500 | 7,500 | |||||||||
Loss allowance |
(94 | ) | (30 | ) | ||||||||
Other assets |
10 | | ||||||||||
Deposits due to customers |
54,262 | 2,726 | ||||||||||
Other liabilities |
54 | | ||||||||||
K BANK Co., Ltd. |
Loans |
179 | 141 | |||||||||
Account receivables |
64 | 24 | ||||||||||
Other assets |
| 4 | ||||||||||
Well to Sea No.3 Private Equity Fund |
Loans |
72,050 | 4,490 | |||||||||
Loss allowance |
(80 | ) | (8 | ) | ||||||||
Deposits due to customers |
2,199 | 714 | ||||||||||
Other liabilities |
86 | 47 | ||||||||||
Others (*1) (*2) |
Loans |
| 84 | |||||||||
Loss allowance |
| (84 | ) | |||||||||
Other assets |
840 | 338 | ||||||||||
Deposits due to customers |
5,459 | 5,577 | ||||||||||
Other liabilities |
168 | 172 |
(*1) | Others include Saman Corporation, Woori Growth Partnerships New Technology Private Equity Fund, Woori-Shinyoung Growth-Cap Private Equity Fund, Woori-Q Corporate Restructuring Private Equity Fund, Woori High plus G.B. Securities Feeder Fund1(G.B.), Uri Hanhwa Eureka Private Equity Fund, Japanese Hotel Real Estate Private Equity Fund 2, Partner One Value Up I Private Equity Fund and etc., as of September 30, 2020. |
(*2) | Others include Saman Corporation, Woori-Shinyoung Growth-Cap Private Equity Fund, Uri Hanhwa Eureka Private Equity Fund, Kyesan Engineering Co., Ltd. and DAEA SNC Co., Ltd. and etc., as of December 31, 2019. |
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(2) | Gain or loss from transactions with related parties are as follows (Unit: Korean Won in millions): |
For the nine-month period September 30 | ||||||||||||
Related parties |
Account title |
2020 | 2019 | |||||||||
Associates |
W Service Network Co., Ltd. | Other income | 24 | 24 | ||||||||
Interest expenses |
12 | 15 | ||||||||||
Fees expenses |
373 | 337 | ||||||||||
Reversal of allowance for credit loss |
(3 | ) | (1 | ) | ||||||||
Other expenses |
1,555 | 1,004 | ||||||||||
Korea Credit Bureau Co., Ltd. | Interest expenses | 3 | 29 | |||||||||
Fees expenses |
2,357 | 1,880 | ||||||||||
Korea Finance Security Co., Ltd. |
Interest income | 52 | | |||||||||
Interest expenses |
2 | 8 | ||||||||||
Provisions for allowance for credit loss |
6 | 1 | ||||||||||
Other expenses |
69 | 87 | ||||||||||
Chin Hung International Inc | Interest expenses | 15 | 24 | |||||||||
Provisions for allowance for credit loss |
107 | 32 | ||||||||||
LOTTE CARD Co., Ltd. | Interest income | 215 | | |||||||||
Fees income |
2,580 | | ||||||||||
Interest expenses |
86 | | ||||||||||
Provision for allowance for credit loss |
64 | | ||||||||||
K BANK Co., Ltd. | Fees income | 1,313 | 951 | |||||||||
Well to Sea No.3 Private Equity Fund |
Interest income | 1,883 | 1,255 | |||||||||
Interest expenses |
4 | 9 | ||||||||||
Provision for allowance for credit loss |
111 | 91 | ||||||||||
Others (*1) (*2) | Fees income | 1,779 | 957 | |||||||||
Other income |
12 | 13 | ||||||||||
Interest expenses |
22 | 45 | ||||||||||
Reversal of allowance for credit loss |
| (5 | ) |
(*1) | Others include Saman Corporation, Woori Growth Partnerships New Technology Private Equity Fund, Woori-Shinyoung Growth-Cap Private Equity Fund, Woori-Q Corporate Restructuring Private Equity Fund, Woori High plus G.B. Securities Feeder Fund1(G.B.), Uri Hanhwa Eureka Private Equity Fund, Japanese Hotel Real Estate Private Equity Fund 2, Partner One Value Up I Private Equity Fund, PCC-Woori LP Secondary Fund and etc., as of September 30, 2020. |
(*2) | Others include Saman Corporation, Woori Growth Partnerships New Technology Private Equity Fund, Woori-Shinyoung Growth-Cap Private Equity Fund, Uri Hanhwa Eureka Private Equity Fund, Partner One Value Up I Private Equity Fund and etc, as of September 30, 2019. |
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(3) | Major loan transactions with related parties for the nine-month period ended September 30, 2020 and 2019 are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30, 2020 | ||||||||||||||||||
Related parties |
Beginning balance |
Loan | Collection | Ending balance (*) |
||||||||||||||
Associates |
Well to Sea No. 3 Private Equity Fund | 4,490 | 67,560 | | 72,050 | |||||||||||||
LOTTE CARD Co., Ltd. | 7,500 | | | 7,500 | ||||||||||||||
Korea Finance Security Co., Ltd. | 1,860 | 2,485 | 403 | 3,942 | ||||||||||||||
Korea Credit Bureau Co., Ltd. | 3 | 14 | 16 | 1 | ||||||||||||||
W Service Network Co., Ltd. | 23 | 272 | 245 | 50 | ||||||||||||||
Chin Hung International Inc | 244 | 1,774 | 1,735 | 283 | ||||||||||||||
K BANK Co., Ltd. | 141 | 1,544 | 1,506 | 179 |
(*) | Payments that occurred for business reasons among related parties are excluded and net increase or decrease was used for limited credit loan. |
For the nine-month period ended September 30, 2019 | ||||||||||||||||||
Related parties |
Beginning balance |
Loan | Collection | Ending balance (*) |
||||||||||||||
Associates |
Well to Sea No. 3 Private Equity Fund |
1,857 | 100,300 | 9,167 | 92,990 | |||||||||||||
Korea Finance Security Co., Ltd. |
57 | 440 | 445 | 52 | ||||||||||||||
Korea Credit Bureau Co., Ltd. |
7 | 22 | 26 | 3 | ||||||||||||||
W Service Network Co., Ltd. |
69 | 239 | 277 | 31 | ||||||||||||||
Chin Hung International Inc |
241 | 1,643 | 1,717 | 167 | ||||||||||||||
K BANK Co., Ltd. |
185 | 1,798 | 1,812 | 171 |
(*) | Payments that occurred for business reasons among related parties are excluded and net increase or decrease was used for limited credit loan. |
(4) | Details of changes in major deposits due to customers with related parties for the nine-month period September 30, 2020 and 2019 are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30, 2020 | ||||||||||||||||||
Related parties |
Beginning balance |
Increase | Decrease | Ending balance (*) |
||||||||||||||
Associates |
Saman Corporation |
2,522 | 34 | | 2,556 | |||||||||||||
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 | 1,356 | 1,303 | 1,203 | ||||||||||||||
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 nine-month period ended September 30, 2019 |
||||||||||||||||||
Related parties |
Beginning balance |
Increase | Decrease | Ending balance (*) |
||||||||||||||
Associates |
Saman Corporation |
2,436 | 181 | | 2,617 | |||||||||||||
W Service Networks Co., Ltd |
1,180 | 1,260 | 1,260 | 1,180 | ||||||||||||||
Chin Hung International Inc |
765 | 400 | 400 | 765 | ||||||||||||||
Partner One Value Up I Private Equity Fund |
1,403 | 1,617 | 1,556 | 1,464 | ||||||||||||||
Korea Credit Bureau Co., Ltd. |
6,000 | | 6,000 | | ||||||||||||||
Korea Finance Security Co., Ltd. |
535 | 25 | 560 | |
(*) | 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 nine-month period ended September 30, 2020 and 2019. |
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(6) | Guarantees provided to the related parties are as follows (Unit: Korean Won in millions): |
Warrantee |
September 30, 2020 | December 31, 2019 | Warranty | |||||||||
Korea Finance Security Co., Ltd. |
318 | 400 | Unused loan commitment | |||||||||
Korea Credit Bureau Co., Ltd. |
34 | 32 | Unused loan commitment | |||||||||
W Service Network Co., Ltd. |
150 | 177 | Unused loan commitment | |||||||||
Chin Hung International Inc. |
32,016 | 32,055 | Unused loan commitment | |||||||||
K BANK Co., Ltd. |
121 | 159 | Unused loan commitment | |||||||||
Well to Sea No.3 Private Equity Fund |
302,950 | 210,510 | Unused loan commitment | |||||||||
LOTTE CARD Co. Ltd. |
150,000 | 150,000 | Unused loan commitment | |||||||||
Together-Korea Government Private Pool Private Securities Investment Trust No.3 |
900,000 | | Securities purchase contract |
There no recognized provisions for guarantees provided to the related parties as of September 30, 2020 and December 31, 2019, respectively.
(7) | Amount of derivatives-related commitments with the related parties |
Warrantee |
September 30, 2020 | December 31, 2019 | Warranty | |||||||||
Well to Sea No.3 Private Equity Fund |
598,560 | 584,377 | Open interest |
(8) | Commitments among related parties |
As of September 30, 2020, the Group has entered into an investment agreement with PCC-Woori LP Secondary Fund for 3,100 million won. Among the agreed amount, 2,325 million won was executed as of September 30, 2020 and outstanding balance amounts to 775 million won. The contract period is from December 31, 2019 and December 31, 2023.
(9) | Compensation for key management is as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30 |
||||||||
2020 | 2019 | |||||||
Short-term employee salaries |
12,331 | 9,979 | ||||||
Retirement benefit service costs |
461 | 668 | ||||||
Share-based compensation |
1,576 | 1,934 | ||||||
|
|
|
|
|||||
Total |
14,368 | 12,581 | ||||||
|
|
|
|
Key management includes registered executives and non-registered executives. Outstanding assets from transactions with key management amount to 3,116 million won and 2,414 million won, as of September 30, 2020 and December 31, 2019 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 9,732 million won and 6,543 million won, respectively, as of September 30, 2020 and December 31, 2019,
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42. | LEASES |
(1) | The future lease payments under the lease contracts are as follows (Unit: Korean Won in millions): |
September 30, 2020 |
December 31, 2019 |
|||||||
Lease payments |
||||||||
Within one year |
186,238 | 161,251 | ||||||
After one year but within five years |
193,656 | 232,985 | ||||||
After five years |
29,221 | 40,698 | ||||||
|
|
|
|
|||||
Total |
409,115 | 434,934 | ||||||
|
|
|
|
(2) | Total cash outflows from lease are as follows (Unit: Korean Won in millions): |
For the nine-month period ended September 30 |
||||||||
2020 | 2019 | |||||||
Total cash outflows from lease |
153,249 | 153,686 |
(3) | 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 nine-month period ended September 30 |
||||||||
2020 | 2019 | |||||||
Lease payments for short-term leases |
1,156 | 1,178 | ||||||
Lease payments for which the underlying asset is of low value |
405 | 227 | ||||||
|
|
|
|
|||||
Total |
1,561 | 1,405 | ||||||
|
|
|
|
(4) | As mentioned in Note 2, the Group uses a practical expedient for rent concession as a direct consequence of COVID-19. Accordingly, the amount recognized in profit or loss during the reporting period is 9,351 million won, to reflect changes in lease payments arising from the rent concession. |
(5) | IFRS Interpretations Committee published its interpretation of Lease Period and Lease Improvement Useful Life as of December 16, 2019. The Interpretation Committee discussed a question about how to determine the lease term for cancellable or renewable leases. According to the interpretation, the Group should identify factors to consider extensive economic penalties, and then determine the lease period. The Group is planning to reflect the effect in consolidated financial statements after the effect analysis of changes in accounting policies for the lease term is completed. |
43. | EVENTS AFTER THE REPORTING PERIOD |
(1) | In October 2020, the Group concluded a contract to acquire a 74.04% stake (42,605,000 common stocks) in Aju Capital Co., Ltd., and the completion date of the transaction is not yet decided as subsequent procedures for closing the transaction (approval of inclusion by the financial authorities, etc.) is still in progress. |
(2) | Woori Investment Bank Co., Ltd., a subsidiary of the Group, decided to raise 100 billion won in shareholder allocation at the board meeting on August 28, 2020 and completed the payment of the shares on November 5, 2020, and the Group was allocated 109,757,854 shares in relation to the paid-in capital increase. |
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