ウリファイナンシャルGADRの適時開示

Credit risk has not
significantly increased since
initial recognition(*)

Credit risk has significantly
increased since initial
recognition

Credit has been impaired

Allowance for expected credit losses

Expected 12-month credit losses:

Expected credit losses due to possible defaults on financial instruments within a 12-month period from the end of reporting period.

Expected lifetime credit losses:

Expected credit losses from all possible defaults during the expected lifetime of the financial instruments.

6-K 1 d807969d6k.htm FORM 6-K Form 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of March 2024

Commission File Number: 001-31811

Woori Financial Group Inc.

(Translation of registrant’s name into English)

51, Sogong-ro, Jung-gu, Seoul, 04632, Korea

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Submission of Audit Reports of Woori Financial Group Inc.

On March 6, 2024, Woori Financial Group Inc. disclosed audit reports for the fiscal year 2023 based on the International Financial Reporting Standards as adopted by the Republic of Korea.

The financial statements accompanying such reports have not been approved by the shareholders of Woori Financial Group Inc. and remain subject to change.

Please refer to the audit reports and the consolidated and separate financial statements, which have been furnished as Exhibits 99.1 and 99.2 hereto, respectively.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


				Woori Financial Group Inc.
				(Registrant)

Date: March 6, 2024				By: /s/ Sung-Wook Lee
				(Signature)
				Name: Sunk-Wook Lee
				Title: Deputy President

EX-99.1 2 d807969dex991.htm EX-99.1 EX-99.1 Table of Contents

Exhibit 99.1

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2023

Table of Contents

WOORI FINANCIAL GROUP INC.


		Page(s)

Independent Auditor’s Report		1-4

Consolidated Financial Statements

Consolidated Statements of Financial Position		6

Consolidated Statements of Comprehensive Income		7-8

Consolidated Statements of Changes in Equity		9

Consolidated Statements of Cash Flows		11-12

Notes to the Consolidated Financial Statements		13-189

Independent Auditor’ Report on Internal Control over Financial Reporting for Consolidation Purposes		190-191

Operating Status Report of Internal Control over Financial Reporting		192

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Independent Auditor’s Report

Based on a report originally issued in Korean

To the Board of Directors and Shareholders of

Woori Financial Group Inc.

Opinion

We have audited the consolidated financial statements of Woori Financial Group Inc. and its subsidiaries (“the Group”), which comprise the consolidated statement of financial position as of December 31, 2023, the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising of material accounting policy information and other explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2023, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Korean International Financial Reporting Standards (“K-IFRS”).

We also have audited, in accordance with Korean Standards on Auditing (KSAs), the Group’s Internal Control over Financial Reporting (“ICFR”) for consolidation purposes as of December 31, 2023, based on the criteria established in Conceptual Framework for Designing and Operating Internal Control over Financial Reporting issued by the Operating Committee of Internal Control over Financial Reporting in the Republic of Korea, and our report dated March 6, 2024 expressed an unmodified opinion on the effectiveness of the Group’s internal control over financial reporting for consolidation purposes.

Basis for Opinion

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

Key Audit Matter

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

Assessment of the allowance for credit losses for loans

As discussed in Note 10 to the consolidated financial statements, the Group recognized an allowance for credit losses using the Expected Credit loss (ECL) impairment model for loans at amortized cost amounting to KRW 2,975,060 million as of December 31, 2023. ECL allowances are measured at amounts equal to either (i) 12-month ECL; or (ii) lifetime ECL for those loans that have experienced a Significant Increase in Credit Risk (SICR) since initial recognition or are impaired.

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The Group measures ECL allowances on an individual basis for individually significant corporate loans which have had SICR or have become impaired. The allowance for credit losses for all other loans is measured on a collective basis. For these loans, the Group measures ECL by estimating the Probability of Default (PD), the Loss Given Default (LGD) as well as the impact of future economic forecast information. For corporate loans, the Group’s credit rating of the borrower and future economic forecast information are used in the determination of the PD. The Group uses quantitative and qualitative factors to determine the credit rating of the borrower and the evaluation of the qualitative factors involves a high level of judgment by the Group. For the incorporation of future economic forecast information in the PD, the Group uses various information to select a model and this also involves a high level of judgment by the Group.

We identified the following risk as a key audit matter, considering the likelihood of errors, the level of involvement of management judgement, and risk of material misstatement.

- Risk that the allowance for credit losses which is measured on a collective basis is misstated due to error or fraud in the evaluation of the qualitative factors which is used for determining the internal credit ratings of corporate loans, and the manner in which future economic forecast information is incorporated.

The following are the primary procedures we performed to address this key audit matter:

- We evaluated the design and tested the operating effectiveness of certain internal controls related to: (i) the assessment of qualitative factors in the process of determining the Group’s credit rating of corporate loans; and (ii) the assessment of the appropriateness of the model selection process to incorporate future economic forecast information

- We checked whether, for a sample of corporate loans with ECL measured on a collective basis, the Group’s policy was applied in the credit rating process

- We involved credit risk professionals with specialized skills and knowledge, who assisted in: (i) using statistical methods to analyze the correlation between the future economic forecast information and PD; (ii) assessing the reasonableness of the rationale for the selection of the final model by checking the appropriateness and the reasonableness of the model selection criteria by statistically; and (iii) checking the accuracy of the PD which incorporated future economic forecast information by a recalculation.

Other Matter

The procedures and practices utilized in the Republic of Korea to audit such consolidated financial statements may differ from those generally accepted and applied in other countries.

The consolidated financial statements of the Group for the year ended December 31, 2022 were audited by another auditor who expressed an unmodified opinion on those financial statements on March 7, 2023.

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

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

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In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

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

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

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

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

•

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

•

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

•

Evaluate the appropriateness of accounting policies used in the preparation of the consolidated financial statements and the reasonableness of accounting estimates and related disclosures made by management.

•

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

•

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

•

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

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

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

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

The engagement partner on the audit resulting in this independent auditor’s report is Jae-Beom Choi.

/s/ KPMG Samjong Accounting Crop.

Seoul, Korea

March 6, 2024

This report is effective as of March 6, 2024, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

The accompanying consolidated financial statements including

all footnote disclosures were prepared by, and are the responsibility of, the management of

Woori Financial Group Inc.

Jong Yong Yim

President and Chief Executive Officer

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

(Phone Number) 02-2125-2000

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF DECEMBER 31, 2023 AND 2022


	December 31, 2023			December 31, 2022
	(Korean Won in millions)
ASSETS
Cash and cash equivalents (Note 6)		30,556,618			34,219,148
Financial assets at fair value through profit or loss (“FVTPL”) (Notes 4, 7, 11, 12, 18 and 26)		21,544,756			19,860,573
Financial assets at fair value through other comprehensive income (“FVTOCI”) (Notes 4, 8, 11, 12, and 18)		37,891,495			33,085,080
Securities at amortized cost (Notes 4, 9, 11, 12 and 18)		23,996,172			28,268,516
Loans and other financial assets at amortized cost (Notes 4, 10, 11, 12, 18 and 41)		373,148,148			355,760,729
Investments in joint ventures and associates (Note 13)		1,795,370			1,305,636
Investment properties (Notes 14 and 18)		472,768			387,707
Property, Plant and Equipment (Notes 15 and 18)		3,176,759			3,142,930
Intangible assets (Note 16)		996,842			849,114
Assets held for sale (Note 17)		20,345			13,772
Net defined benefit asset (Note 24)		240,260			319,280
Current tax assets (Note 38)		203,542			53,274
Deferred tax assets (Note 38)		93,366			109,299
Derivative assets (Designated for hedging) (Notes 4,11,12 and 26)		26,708			37,786
Other assets (Notes 19 and 41)		3,841,787			3,061,552

Total assets		498,004,936			480,474,396

LIABILITIES
Financial liabilities at fair value through profit or loss (“FVTPL”) (Notes 4, 11, 12, 20 and 26)		6,138,313			8,952,399
Deposits due to customers (Notes 4,11,21 and 41)		357,784,297			342,105,209
Borrowings (Notes 4, 6, 11, 12 and 22)		30,986,746			28,429,603
Debentures (Notes 4, 6, 11 and 22)		41,239,245			44,198,486
Provisions (Notes 23, 40 and 41)		806,031			545,865
Net defined benefit liability (Note 24)		6,939			35,202
Current tax liabilities (Note 38)		103,655			843,555
Deferred tax liabilities (Note 38)		470,311			31,799
Derivative liabilities (Designated for hedging) (Notes 4,11,12 and 26)		153,007			202,911
Other financial liabilities (Notes 4, 6, 11, 12, 25 and 41)		26,115,005			22,811,868
Other liabilities (Notes 6, 25 and 41)		803,897			690,157

Total liabilities		464,607,446			448,847,054

EQUITY
Owners’ equity (Note 28)
Capital stock		3,802,676			3,640,303
Hybrid securities		3,611,129			3,112,449
Capital surplus		935,563			682,385
Other equity		(1,668,957	)		(2,423,392	)
Retained earnings		24,986,470			23,750,152

		31,666,881			28,761,897

Non-controlling interests		1,730,609			2,865,445

Total equity		33,397,490			31,627,342

Total liabilities and equity		498,004,936			480,474,396

The accompanying notes are part of these consolidated financial statements.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022


	2023			2022
	(Korean Won in millions)
Interest income		20,641,554			14,654,549
Financial assets at FVTPL		192,094			106,698
Financial assets at FVTOCI		999,407			632,615
Financial assets at amortized cost		19,450,053			13,915,236
Interest expense		(11,899,014	)		(5,957,970	)

Net interest income (Notes 11, 30 and 41)		8,742,540			8,696,579

Fees and commissions income		2,565,814			2,499,700
Fees and commissions expense		(845,333	)		(789,530	)

Net fees and commissions income (Notes 11, 31 and 41)		1,720,481			1,710,170

Dividend income (Notes 11, 32 and 41)		240,293			159,982
Net gain on financial instruments at FVTPL (Notes 11, 33 and 41)		488,486			238,502
Net loss on financial assets at FVTOCI (Notes 11 and 34)		(37,641	)		(21,498	)
Net gain arising on financial assets at amortized cost (Note 11)		203,942			74,204
Impairment losses due to credit loss (Notes 35 and 41)		(1,894,916	)		(885,272	)
General and administrative expense (Notes 36 and 41)		(4,443,433	)		(4,529,890	)
Other net operating expense (Notes 11, 26, 36 and 41)		(1,520,723	)		(1,012,253	)

Operating income		3,499,029			4,430,524

Share of gain of joint ventures and associates (Note 13)		109,831			69,996
Other non-operating expense		(91,407	)		(15,146	)

Non-operating income (Note 37)		18,424			54,850

Net income before income tax expense		3,517,453			4,485,374

Income tax expense (Note 38)		(890,559	)		(1,161,392	)

Net income		2,626,894			3,323,982


Net gain(loss) on valuation of equity securities at FVTOCI		193,191			(30,146	)
Changes in capital due to equity method		8,603			(4,527	)
Remeasurement gain(loss) related to defined benefit plan		(79,460	)		251,440

Items that will not be reclassified to profit or loss:		122,334			216,767


Net gain(loss) on valuation of debt securities at FVTOCI		532,334			(463,725	)
Changes in capital due to equity method		(5,638	)		5,139
Net gain on foreign currency translation of foreign operations		45,080			32,536
Net loss on valuation of hedges of net investments in foreign operations		(14,049	)		(20,701	)
Net loss on valuation of cash flow hedge		(16,524	)		(9,835	)

Items that may be reclassified to profit or loss:		541,203			(456,586	)

Other comprehensive income (loss), net of tax		663,537			(239,819	)

Total comprehensive income		3,290,431			3,084,163

(Continued)

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (CONTINUED)


	2023		2022
	(Korean Won in millions)
Net income attributable to:		2,626,894		3,323,982
Net income attributable to owners		2,506,296		3,141,680
Net income attributable to non-controlling interests		120,598		182,302

Total comprehensive income attributable to:		3,290,431		3,084,163
Comprehensive income attributable to owners		3,164,464		2,909,053
Comprehensive income attributable to non-controlling interests		125,967		175,110

Earnings per share (Note 39)
Basic and diluted earnings per share (Unit: In Korean Won)		3,230		4,191

The accompanying notes are part of these consolidated financial statements.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022


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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (CONTINUED)


	Capital Stock		Hybrid securities		Capital surplus			Other equity			Retained earnings			Owners’ equity in total			Non- controlling interests			Total equity
	(Korean Won in millions)
January 1, 2023		3,640,303		3,112,449		682,385			(2,423,392	)		23,750,152			28,761,897			2,865,445			31,627,342
Total comprehensive income
Net income		—		—		—			—			2,506,296			2,506,296			120,598			2,626,894
Net gain on valuation of financial instruments at FVTOCI		—		—		—			725,513			—			725,513			12			725,525
Net gain(loss) due to disposal of equity securities at FVTOCI		—		—		—			(86	)		86			—			—			—
Changes in capital due to equity method		—		—		—			2,996			(50	)		2,946			19			2,965
Gain on foreign currency translation of foreign operations		—		—		—			39,780			—			39,780			5,300			45,080
Loss on valuation of hedges of net investments in foreign operations		—		—		—			(14,049	)		—			(14,049	)		—			(14,049	)
Loss on valuation of cash flow hedge		—		—		—			(16,524	)		—			(16,524	)		—			(16,524	)
Remeasurement gain related to defined benefit plan		—		—		—			(79,498	)		—			(79,498	)		38			(79,460	)
Transactions with owners
Comprehensive stock exchange		162,373		—		249,008			—			—			411,381			(414,015	)		(2,634	)
Dividends to common stocks		—		—		—			—			(978,376	)		(978,376	)		(11,647	)		(990,023	)
Changes in treasury stocks		—		—		1,128			(35,529	)		(100,000	)		(134,401	)		—			(134,401	)
Issuance of hybrid securities		—		498,680		—			—			—			498,680			299,327			798,007
Dividends to hybrid securities		—		—		—			—			(131,148	)		(131,148	)		(95,637	)		(226,785	)
Redemption of hybrid securities		—		—		—			(1,695	)		—			(1,695	)		(1,097,697	)		(1,099,392	)
Changes in subsidiaries’ capital		—		—		(1,869	)		60,491			(60,490	)		(1,868	)		(1,927	)		(3,795	)
Changes in non-controlling interests related to business combinations		—		—		—			—			—			—			138,478			138,478
Others		—		—		4,911			73,036			—			77,947			(77,685	)		262

December 31, 2023		3,802,676		3,611,129		935,563			(1,668,957	)		24,986,470			31,666,881			1,730,609			33,397,490

The accompanying notes are part of these consolidated financial statements.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022


	2023			2022
	(Korean Won in millions)
Cash flows from operating activities (Note 2):
Net income		2,626,894			3,323,982
Adjustments to net income:
Income tax expense		890,559			1,161,392
Interest income		(20,641,554	)		(14,654,549	)
Interest expense		11,899,014			5,957,970
Dividend income		(240,293	)		(159,982	)

		(8,092,274	)		(7,695,169	)

Additions of expenses not involving cash outflows:
Loss on financial instruments at FVTPL		—			815,706
Loss on financial assets at FVTOCI		46,335			23,836
Impairment loss due to credit loss		1,894,916			885,272
Loss on other provisions		99,444			37,493
Retirement benefit		113,435			165,063
Depreciation and amortization		993,176			929,311
Net loss on foreign currency translation		366,026			—
Loss on derivatives (designated for hedge)		35,583			250,268
Loss on fair value hedge		72,601			—
Loss on valuation of investments in joint ventures and associates		22,710			28,861
Loss on disposal of investments in joint ventures and associates		588			3,690
Loss on disposal of Property, Plant and Equipment, intangible assets and other assets		1,873			3,177
Impairment loss on Property, Plant and Equipment, intangible assets and other assets		129			260
Other loss		—			62,196

		3,646,816			3,205,133

Deductions of income not involving cash inflows:
Gain on financial assets at FVTPL		571,179			—
Gain on financial assets at FVTOCI		8,694			2,338
Gain on other provisions		19,781			55,327
Net profit on foreign currency translation		—			3,180
Gain on derivatives (designated for hedge)		114,875			71,179
Gain on fair value hedge		8,986			257,910
Gain on valuation of investments in joint ventures and associates		132,541			98,858
Gain on disposal of investments in joint ventures and associates		33,123			599
Gain on disposal of Property, Plant and Equipment, intangible assets and other assets		5,267			55,852
Reversal of impairment loss on Property, Plant and Equipment, intangible assets and other assets		230			310
Other income		—			15,879

		894,676			561,432

Changes in operating assets and liabilities:
Financial instruments at FVTPL		(1,715,646	)		(1,647,572	)
Loans and other financial assets at amortized cost		(18,598,117	)		(5,986,828	)
Other assets		(1,264,071	)		(1,314,877	)
Deposits due to customers		15,176,465			23,536,088
Provisions		136,521			(24,041	)
Net defined benefit liability		(172,759	)		(133,421	)
Other financial liabilities		2,225,382			(2,514,238	)
Other liabilities		95,559			83,559

		(4,116,666	)		11,998,670

Interest income received		20,416,107			14,189,016
Interest expense paid		(10,626,911	)		(4,965,594	)
Dividends received		202,257			159,993
Income tax paid		(1,539,605	)		(1,030,480	)

		8,451,848			8,352,935

Net cash inflow from operating activities		1,621,942			18,624,119

(Continued)

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Table of Contents

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (CONTINUED)


	2023			2022
	(Korean Won in millions)
Cash flows from investing activities
Net cash out-flows from obtaining control		(209,643	)		(378,394	)
Net cash out-flows from losing control		(464	)		—
Disposal of financial instruments at FVTPL		10,487,513			9,502,271
Acquisition of financial instruments at FVTPL		(12,167,823	)		(10,274,187	)
Disposal of financial assets at FVTOCI		20,648,897			21,717,266
Acquisition of financial assets at FVTOCI		(24,211,531	)		(16,110,501	)
Redemption of securities at amortized cost		8,727,124			5,872,961
Acquisition of securities at amortized cost		(4,244,256	)		(16,873,194	)
Cash outflows from changes in subsidiaries		(619,726	)		(346,386	)
Disposal of investments in joint ventures and associates		101,051			249,763
Acquisition of investments in joint ventures and associates		(310,239	)		(143,345	)
Disposal of investment properties		—			2,061
Acquisition of investment properties		(99,234	)		—
Disposal of Property, Plant and Equipment		19,001			44,839
Acquisition of Property, Plant and Equipment		(164,696	)		(172,876	)
Disposal of intangible assets		2,513			978
Acquisition of intangible assets		(228,503	)		(174,749	)
Disposal of assets held for sale		7,156			52,417
Net decrease of other assets		8,719			62,386

Net cash outflow from investing activities		(2,254,141	)		(6,968,690	)

Cash flows from financing activities:
Net cash in-flows from hedging activities		23,394			54,569
Net increase in borrowings		2,332,376			2,881,675
Issuance of debentures		31,101,841			23,402,694
Redemption of debentures		(34,329,491	)		(23,887,568	)
Redemption of lease liabilities		(160,673	)		(187,531	)
Net increase of other liabilities		118			513
Dividends paid		(978,376	)		(654,996	)
Issuance of hybrid securities		798,007			1,167,283
Redemption of hybrid securities		(1,100,000	)		(643,000	)
Dividends paid to hybrid securities		(226,785	)		(205,751	)
Net increase in non-controlling equity liabilities		6,620			1,847
Dividends paid to non-controlling interest		(11,647	)		(9,949	)
Changes in non-controlling interests		(180,514	)		—
Acquisition of treasury stocks		(158,165	)		—
Disposal of treasury stocks		23,118			—

Net cash inflow (outflow) from financing activities		(2,860,177	)		1,919,786

Effects of exchange rate changes on cash and cash equivalents		(170,154	)		30,860

Net increase (decrease) in cash and cash equivalents		(3,662,530	)		13,606,075

Cash and cash equivalents, beginning of the period		34,219,148			20,613,073

Cash and cash equivalents, end of the Period (Note 6)		30,556,618			34,219,148

The accompanying notes are part of these consolidated financial statements.

- 12 -

Table of Contents

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

GENERAL

(1)	Summary of the Parent company

Woori Financial Group, Inc. (hereinafter referred to as 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 as the “Bank”), Woori FIS Co., Ltd., Woori Finance Research Institute Co., Ltd., Woori Credit Information Co., Ltd., Woori Fund Services Co., Ltd. and Woori Private Equity Asset Management Co. Ltd. The headquarters of the Parent company is located at 51, Sogong-ro, Jung-gu, Seoul, Korea, and the capital stock is 3,802,676 million Won. The Parent company’s stocks were listed on the Korea Exchange on February 13, 2019, and its American Depository Shares (“ADS”) are also being traded as the underlying common stock on the New York Stock Exchange since the same date.

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


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

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

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

As of December 30, 2019, the Parent company acquired a 67.2% interest (excluding treasury stocks, 51% interest including treasury stocks) in Woori Asset Trust Co., Ltd. (formerly Kukje Asset Trust Co., Ltd.) and added it as a consolidated subsidiary at the end of 2019. As of March 31, 2023, it acquired an additional 28.1% interests (excluding treasury stock, 21.3% in the case of including treasury stock).

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

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

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

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

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Table of Contents

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

As of March 23, 2023, the Parent company acquired a 53.9% interest (excluding treasury stocks, 52.0% interest including treasury stocks) in Woori Venture Partners Co., Ltd. (formerly Daol Investment Co., Ltd.), and added it as a consolidated subsidiary. As of May 30, 2023, the Parent company additionally acquired treasury stock (3.5%) which Woori Venture Partners Co., Ltd. possessed.

As of August 8, 2023, the Parent company paid 22,541,465 new shares of the Parent company to the shareholders of Woori Investment Bank Co., Ltd. (excluding the Parent company) through comprehensive stock exchange and acquired residual interest (41.3%) of Woori Investment Bank Co., Ltd., to make it a wholly owned subsidiary. In addition, on the same day, the Parent company paid 9,933,246 new shares of the Parent company to the shareholders of Woori Venture Partners Co., Ltd. (excluding the Parent company) through comprehensive stock exchange and acquired residual interest (44.5%) of Woori Venture Partners Co., Ltd., to make it a wholly owned subsidiary.

(2)	Details of the Parent company and subsidiaries (hereinafter ‘Group’) as of December 31, 2023 and 2022 are as follows:

Percentage of ownership
(%)

Location

Financial
statements date

Subsidiaries

Main business

December 31,
2023

December 31,
2022

Held by Woori Financial Group Inc.

Woori Bank

Bank

100.0

Korea

December 31

Woori Card Co., Ltd.

Finance

100.0

Korea

December 31

Woori Financial Capital Co., Ltd.

Finance

100.0

Korea

December 31

Woori Investment Bank Co., Ltd.(*1)

Other credit finance business

100.0

58.7

Korea

December 31

Woori Asset Trust Co., Ltd.(*1)

Real estate trust

95.3

67.2

Korea

December 31

Woori Savings Bank

Mutual saving bank

100.0

Korea

December 31

Woori Financial F&I Co., Ltd.

Finance

100.0

Korea

December 31

Woori Asset Management Corp.

Finance

73.0

Korea

December 31

Woori Venture Partners(*1)

Other financial services

100.0

—

Korea

December 31

Woori Global Asset Management Co., Ltd.

Finance

100.0

Korea

December 31

Woori Private Equity Asset Management Co., Ltd.

Finance

100.0

Korea

December 31

Woori Credit Information Co., Ltd.

Credit information

100.0

Korea

December 31

Woori Fund Service Co., Ltd.

Financial support service business

100.0

Korea

December 31

Woori FIS Co., Ltd.

System software

development & maintenance

100.0

Korea

December 31

Woori Finance Research Institute Co., Ltd.

Other service business

100.0

Korea

December 31

Held by Woori Bank

Woori America Bank

Finance

100.0

America

December 31

Woori Global Markets Asia Limited

Finance

100.0

Hong Kong

December 31

Woori Bank China Limited

Finance

100.0

China

December 31

AO Woori Bank (*7)

Finance

100.0

Russia

December 31

PT Bank Woori Saudara Indonesia 1906 Tbk

Finance

84.2

Indonesia

December 31

Banco Woori Bank do Brasil S.A.

Finance

100.0

Brazil

December 31

Korea BTL Infrastructure Fund

Finance

99.9

Korea

December 31

Woori Finance Myanmar Co., Ltd.

Finance

100.0

Myanmar

December 31

Wealth Development Bank

Finance

51.0

Philippines

December 31

Woori Bank Vietnam Limited

Finance

100.0

Vietnam

December 31

Woori Bank (Cambodia) PLC

Finance

100.0

Cambodia

December 31

Woori Bank Europe

Finance

100.0

Germany

December 31

Kumho Trust First Co., Ltd. (*2) (*5)

Asset securitization

—

0.0

Korea

—

Asiana Saigon Inc. (*2) (*5)

Asset securitization

—

0.0

Korea

—

- 14 -

Table of Contents

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Percentage of ownership
(%)

Location

Financial
statements date

Subsidiaries

Main business

December 31,
2023

December 31,
2022

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

Asset securitization

15.0

Korea

December 31

Jeonju Iwon Ltd. (*2)

Asset securitization

0.0

Korea

December 31

Wonju I one Inc. (*2)

Asset securitization

0.0

Korea

December 31

Heitz Third Co., Ltd. (*2)

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

Wibihansoop 1st Co., Ltd. (*2) (*5)

Asset securitization

—

0.0

Korea

—

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

—

0.0

Korea

—

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

Woori KC No.1 Co., Ltd. (*2) (*5)

Asset securitization

—

0.0

Korea

—

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

Asset securitization

0.0

Korea

December 31

ATLANTIC TRANSPORTATION 1
S.A. (*2) (*5)

Asset securitization

—

0.0

Marshall islands

—

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

Asset securitization

0.0

Korea

December 31

HD Project Co., Ltd. (*2) (*5)

Asset securitization

—

0.0

Korea

—

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

—

0.0

Korea

—

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

- 15 -

Table of Contents

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Percentage of ownership
(%)

Location

Financial
statements date

Subsidiaries

Main business

December 31,
2023

December 31,
2022

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

—

0.0

Korea

—

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

Korea

December 31

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

Asset securitization

0.0

—

Korea

December 31

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

Asset securitization

0.0

—

Korea

December 31

Woori High End 1st co., Ltd.(*2)

Asset securitization

0.0

—

Korea

December 31

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

Asset securitization

0.0

—

Korea

December 31

Woori HW 2nd co., Ltd.(*2)

Asset securitization

0.0

—

Korea

December 31

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

Asset securitization

0.0

—

Korea

December 31

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

Securities investment and others

98.8

Korea

December 31

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

Securities investment and others

97.3

England

December 31

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

Securities investment and others

99.0

Korea

December 31

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

Securities investment and others

99.4

Korea

December 31

INMARK Spain Private Placement Real Estate Investment Trust
No. 26-2 (*3) (*5)

Securities investment and others

97.7

Korea

—

IGIS Global Private Placement Real Estate Fund No. 316-1 (*3) (*5)

Securities investment and others

99.3

Korea

—

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

Securities investment and others

98.6

98.3

Korea

December 31

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

Securities investment and others

97.0

Korea

December 31

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

Securities investment and others

97.2

97.1

Korea

December 31

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

Securities investment and others

97.4

97.2

Korea

December 31

Kiwoom Frontier Private Investment Trust No.23[Bond] (*3)(*5)

Securities investment and others

—

99.8

Korea

—

Kiwoom Harmony Private Placement Investment Trust No. 4 (*3)

Securities investment and others

96.2

—

Korea

December 31

Principal Guaranteed Trust (*4)

Trust

0.0

Korea

December 31

Principal and Interest Guaranteed Trust (*4)

Trust

0.0

Korea

December 31

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

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

Asset securitization

54.6

Luxembourg

December 31

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

ADP 16 Brussels

Asset securitization

100.0

Belgium

December 31

- 16 -

Table of Contents

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Percentage of ownership
(%)

Location

Financial
statements date

Subsidiaries

Main business

December 31,
2023

December 31,
2022

Held by Woori Card Co., Ltd.

TUTU Finance –WCI Myanmar Co., Ltd.

Finance

100.0

Myanmar

December 31

PT Woori Finance Indonesia Tbk.

Finance

84.5

82.0

Indonesia

December 31

Woori Card 2019-1 Asset Securitization Specialty Co., Ltd. (*2) (*5)

Asset securitization

—

0.5

Korea

December 31

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

Asset securitization

0.5

Korea

December 31

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

Asset securitization

0.5

Korea

December 31

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

Asset securitization

0.5

Korea

December 31

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

Asset securitization

0.5

Korea

December 31

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

Asset securitization

0.5

Korea

December 31

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

Asset securitization

0.5

—

Korea

December 31

Held by Woori Financial Capital Co., Ltd.

Specified Money Market Trust

Trust

100.0

Korea

December 31

Held by Woori Investment Bank Co., Ltd.

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

Asset securitization

5.0

Korea

December 31

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

Asset securitization

5.0

Korea

December 31

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

Asset securitization

5.0

Korea

December 31

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

Asset securitization

5.0

Korea

December 31

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

Asset securitization

5.0

Korea

December 31

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

Asset securitization

5.0

Korea

December 31

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

Asset securitization

5.0

Korea

December 31

WJ2008 Securitization Specialty Co., Ltd. (*2) (*5)

Asset securitization

—

5.0

Korea

—

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

Asset securitization

5.0

Korea

December 31

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

Asset securitization

5.0

Korea

December 31

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

Asset securitization

5.0

Korea

December 31

- 17 -

Table of Contents

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Percentage of ownership
(%)

Location

Financial
statements date

Subsidiaries

Main business

December 31,
2023

December 31,
2022

Held by Woori Asset Management Corp.

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

Securities investment and others

84.7

88.0

Korea

December 31

Woori Together TDF 2025 (*3)

Securities investment and others

30.1

—

Korea

December 31

Woori Together TDF 2035 (*3)

Securities investment and others

48.0

57.1

Korea

December 31

Woori Together TDF 2040 (*3)

Securities investment and others

49.2

58.3

Korea

December 31

Woori Together TDF 2045 (*3)

Securities investment and others

61.0

69.3

Korea

December 31

Woori Together TDF 2050 (*3)

Securities investment and others

48.9

66.3

Korea

December 31

Woori Franklin Technology Master Fund (USD) (*3) (*8)

Securities investment and others

67.3

91.1

Korea

December 31

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

Securities investment and others

31.4

71.8

Korea

December 31

Woori Together OCIO Target Return Master fund (*3) (*5) (*8)

Securities investment and others

—

100.0

Korea

—

Woori Together OCIO Target Return Feeder fund (*3) (*5)

Securities investment and others

—

81.2

Korea

—

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

Securities investment and others

87.4

77.0

Korea

December 31

Woori Multi Return Private Equity 2(*3) (*5)

Securities investment and others

—

30.9

Korea

—

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

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

Asset securitization

5.0

Korea

December 31

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

Asset securitization

5.0

Korea

December 31

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

Asset securitization

5.0

Korea

December 31

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

Asset securitization

5.0

Korea

December 31

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

Asset securitization

5.0

Korea

December 31

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

Asset securitization

5.0

Korea

December 31

WH2306 Securitization Specialty Co., Ltd.(*2)

Asset securitization

5.0

—

Korea

December 31

WN2306 Securitization Specialty Co., Ltd.(*2)

Asset securitization

5.0

—

Korea

December 31

WNKN2309 Securitization Specialty Co., Ltd.(*2)

Asset securitization

5.0

—

Korea

December 31

WB2309 Securitization Specialty Co., Ltd.(*2)

Asset securitization

5.0

—

Korea

December 31

WI2311 Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

—

Korea

December 31

WSB2312 Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

—

Korea

December 31

WK2312 Asset Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

—

Korea

December 31

WBS2312 Securitization Specialty Co., Ltd. (*2)

Asset securitization

5.0

—

Korea

December 31

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Table of Contents

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Percentage of ownership
(%)

Location

Financial
statements date

Subsidiaries

Main business

December 31,
2023

December 31,
2022

VOGO DL General Private Equity Investment Trust 1(*3)

Securities investment and others

99.0

—

Korea

December 31

Held by Woori Venture Partners Co.,Ltd. (*1)

Woori Venture Partners US

Other financial services

100.0

—

America

December 31

Held by Woori Global Asset Management Co., Ltd.

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

Securities investment and others

37.7

37.9

Korea

December 31

Woori G Happy Retirement Lifetime Income TIF Mixed Asset Investment Trust[FoF] C(Y) (*3) (*5)

Securities investment and others

—

99.3

Korea

—

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

Green ESG Growth No.1 Private Equity Fund(*3)

Securities investment and others

30.3

—

Korea

December 31

Woori New Growth Credit Fund 1(*3)

Securities investment and others

100.0

—

Korea

December 31

Woori PE Secondary Fund 1 (*3)

Securities investment and others

100.0

—

Korea

December 31

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

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

Securities investment and others

100.0

Korea

December 31

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

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

Securities investment and others

90.0

Korea

December 31

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

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

Securities investment and others

85.0

Korea

December 31

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

Securities investment and others

94.3

Korea

December 31

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

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

Securities investment and others

100.0

Korea

December 31

- 19 -

Table of Contents

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Percentage of ownership
(%)

Location

Financial
statements date

Subsidiaries

Main business

December 31,
2023

December 31,
2022

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

Securities investment and others

80.0

Korea

December 31

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

Securities investment and others

100.0

Korea

December 31

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

Securities investment and others

100.0

—

Korea

December 31

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

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

Securities investment and others

70.0

Korea

December 31

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

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

Securities investment and others

100.0

Korea

December 31

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

Securities investment and others

100.0

Korea

December 31

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

Securities investment and others

100.0

Korea

December 31

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

Securities investment and others

30.1

Korea

December 31

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

Securities investment and others

100.0

Korea

December 31

Held by Woori bank (*6)

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

Securities investment and others

92.6

Korea

December 31

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

Securities investment and others

84.3

80.0

Korea

December 31

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

Securities investment and others

80.0

Korea

December 31

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

Securities investment and others

90.9

Korea

December 31

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

Securities investment and others

87.0

86.8

Korea

December 31

- 20 -

Table of Contents

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Percentage of ownership
(%)

Location

Financial
statements date

Subsidiaries

Main business

December 31,
2023

December 31,
2022

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

Securities investment and others

50.0

Korea

December 31

Woori G Government Bond MMF C/I (*3) (*5)

Securities investment and others

—

46.0

Korea

—

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

Securities investment and others

98.8

Korea

December 31

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

Securities investment and others

99.9

Korea

December 31

Woori Short Term Government and Special Bank Bond Active ETF(*3) (*5)

Securities investment and others

—

Korea

—

WooriG Clean Energy General Type Private Investment Trust No.2 (*3)

Securities investment and others

30.8

—

Korea

December 31

WooriG Innovation Growth(Infrastructure) General Type Private Investment Trust No.2 (*3)

Securities investment and others

46.4

—

Korea

December 31

Woori Together Institutional USD MMF No.1 C-F(*3)

Securities investment and others

63.4

—

Korea

December 31

Woori G ESG Infrastructure Development General Type Private Investment Trust No.2 (*3)

Securities investment and others

50.0

—

Korea

December 31

Woori Dongbu Underground Expressway General type Private Special Asset Investment Trust (*3)

Securities investment and others

40.0

—

Korea

December 31

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

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

Securities investment and others

60.0

Korea

December 31

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

Securities investment and others

100.0

Korea

December 31

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

Securities investment and others

100.0

Korea

December 31

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

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

Securities investment and others

63.2

Korea

December 31

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

Woori G General Type Private Real Estate Investment Trust No.6 (*3)

Securities investment and others

85.8

—

Korea

December 31

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

Woori FG Digital Investment Fund 1st (*3)

Securities investment and others

100.0

Korea

December 31

- 21 -

Table of Contents

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Percentage of ownership
(%)

Location

Financial
statements date

Subsidiaries

Main business

December 31,
2023

December 31,
2022

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

Woori G Japan Private Placement Real Estate Master Investment Trust No.1 (*3)(*8)

Securities investment and others

100.0

Korea

December 31

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

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

Securities investment and others

100.0

Korea

December 31

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

Woori Corporate Turnaround No.1 Private Equity Fund (*3)

Securities investment and others

36.4

—

Korea

December 31

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

Woori G Japan Private Placement Real Estate Master Investment Trust No.2 (*3)(*8)

Securities investment and others

100.0

Korea

December 31

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

GK OK Chatan (*3)

Other financial services

99.9

Japan

October 31 (*9)

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

Woori G Private Placement Investment Trust No. 3 (*3)(*8)

Securities investment and others

76.5

Korea

December 31

Held by Woori G Private Placement Investment Trust No. 3

GK Woorido(*3)

Other financial services

100.0

Japan

September 30 (*9)

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

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

Securities investment and others

48.0

Korea

December 31

(*1)	Comprehensive stock exchange in Woori Investment Bank Co., Ltd., additional investment in Woori Asset Trust Corp. and new acquisition of Woori Venture Partners occurred during the year ended December 31, 2023.

(*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.

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Table of Contents

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(*5)	Companies are excluded from the consolidation as of December 31, 2023.

(*6)

Determined that the Group controls the investees, considering the Group 1) has the power over the investee, 2) is exposed to or has rights to variable returns from its involvement with the investee, and 3) has the ability to use its power to affect its returns, by two or more subsidiaries’ investment or operation.

(*7)

The Russia – Ukraine conflict has been escalated in February 2022, and international sanctions were imposed on Russia. Due to the sanctions, the Group may experience situations such as a decrease in value of financial assets or operating assets owned by the Group regarding the conflict, an increase in receivable payment terms, limitation to transfer funds, decrease in the profit. As of December 31, 2023, the Group expects such conflict and sanctions would have financial impacts on the business of AO Woori Bank, one of the subsidiaries, in the future. However, the Group cannot reasonably predict the financial impacts.

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

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

(3)	The Group has not consolidated the following entities as of December 31, 2023 and 2022 despite having more than 50% ownership interest:


	As of December 31, 2023
Subsidiaries	Location		Main Business	Percentage of ownership (%)
Mirae Asset Maps Clean Water Private Equity Investment Trust 7th (*1)		Korea	Securities Investment		59.7
Kiwoom Yonsei Private Equity Investment Trust (*1)		Korea	Securities Investment		88.9
IGIS Europe Private Placement Real Estate Fund No. 163-2 (*2)		Korea	Securities Investment		97.9
IGIS Global Private Placement Real Estate Fund No. 148-1 (*1)		Korea	Securities Investment		75.0
IGIS Global Private Placement Real Estate Fund No. 148-2 (*1)		Korea	Securities Investment		75.0
Mirae Asset Seoul Ring Expressway Private Special Asset Fund No. 1 (*1)		Korea	Securities Investment		66.7
Hangkang Sewage Treatment Plant Fund (*1)		Korea	Securities Investment		55.6
Korea Investment Pocheon Hwado Expressway Professional Investment Fund (*1)		Korea	Securities Investment		55.1
Midas Global Private Placement Real Estate Investment Trust No. 7-2 (*1)		Korea	Securities Investment		58.3
Together-Korea Government Private Pool Private Securities Investment Trust No.3 (*3)		Korea	Securities Investment		100.0
INMARK France Private Placement Investment Trust No. 18-1 (*1)		Korea	Securities Investment		93.8
Kiwoom Vibrato Private Placement Investment Trust 1-W(EUR) (*2)		Korea	Securities Investment		99.5
KOTAM Global Infra Private Fund 1-4 (*2)		Korea	Securities Investment		99.7
UBSHana Class 1 Special Asset Investment Trust 3 Class C 2 (*1)		Korea	Securities Investment		51.0
Consus GyeongJu Green Specialized Private Special Asset Investment Trust 1 (*1)		Korea	Securities Investment		50.0
Kiwoom Harmony Private Placement Investment Trust No. 3 (*1)		Korea	Securities Investment		77.3
Consus Solar Energy Private Placement Investment Truns No.1(*1)		Korea	Securities Investment		50.0
IGIS ESG General Private Investment Trust No.1(*1)		Korea	Securities Investment		60.0
Kiwoom Aurora Geneal Type Private Placement Investment Trust No. 2(*1)		Korea	Securities Investment		60.0
NH-Amundi WSCP VIII Private Fund 2 (*1)		Korea	Securities Investment		65.2
AI Partners Global Infrastructure Specialized Privately Placed Feeder Fund Trust No. 2 (*2)		Korea	Securities Investment		100.0
Hangang new deal infra BTL fund 4 (HNBF4) (*1)		Korea	Securities Investment		60.0
IGIS Global Private Placement Real Estate Fund No. 316-1(*2)		Korea	Securities Investment		99.3
INMARK Spain Private Placement Real Estate Investment Trust No. 26-2 (*2)		Korea	Securities Investment		97.7
Woori Asset Global Partnership Fund No.5(*4)		Korea	Securities Investment		57.7
Kiwoom Harmony Private Placement Investment Trust No. 6 (*1)		Korea	Securities Investment		76.9
Rifa Qualified Investors Private Real Estate Investment Trust No.40 (*2)		Korea	Securities Investment		55.0

(*1)

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

(*2)

The investment target for the fund was determined in advance, and the disposition of investment assets cannot be determined by the Group, and as a fund of funds, the Group does not have the power to participate in decision-making regarding investment assets in parent funds. The Group does not have the power over the fund’s activities even though it holds more than 50% of ownership interest.

- 23 -

Table of Contents

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(*3)

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

(*4)	In this fund, one of the parties holds substantive removal rights and can remove the collective investment business operator without any cause. Consequently, the Group have no controls as it exercises decision-making rights as agent.


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

(*1)

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

(*3)

- 24 -

Table of Contents

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


	As of and for the year ended December 31, 2023
Subsidiaries	Assets		Liabilities		Operating revenue		Net income (loss) attributable to owners			Comprehensive income (loss) attributable to owners
Woori Bank		458,017,067		431,313,615		37,719,811		2,505,587			3,203,099
Woori Card Co., Ltd.		17,491,193		14,830,408		2,099,755		110,998			85,647
Woori Financial Capital Co., Ltd.		12,417,338		10,796,683		1,538,360		127,836			125,562
Woori Investment Bank Co., Ltd.		6,375,625		5,273,890		429,764		(53,374	)		(50,735	)
Woori Asset Trust Co., Ltd.		337,976		79,747		129,982		32,297			31,849
Woori Savings Bank		1,938,948		1,759,489		133,872		(49,139	)		(48,974	)
Woori Financial F&I Co., Ltd.		877,702		673,265		31,290		3,866			3,858
Woori Asset Management Corp.		161,868		32,780		41,311		6,408			6,267
Woori Venture Partners Co., Ltd.(*)		328,782		30,190		14,676		3,929			5,484
Woori Global Asset Management Co., Ltd.		37,512		13,526		13,857		(3,913	)		(3,913	)
Woori Private Equity Asset Management Co., Ltd		96,006		4,418		10,216		1,960			1,826
Woori Credit Information Co., Ltd.		45,662		7,981		43,774		5,014			4,626
Woori Fund Service Co., Ltd.		27,526		2,758		17,059		3,539			3,539
Woori FIS Co., Ltd.		80,563		32,304		339,163		(7,511	)		(9,214	)
Woori Finance Research Institute Co., Ltd.		6,444		2,603		7,792		72			(11	)

(*)	Additional investment occurred and added it as a consolidated subsidiary during the year ended December 31, 2023.


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

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Table of Contents

WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

Structured entity for asset securitization

The structured entity which is established for the purpose of securitization of project financing loans, corporate bonds, and other financial assets. The Group is involved with the structured entity through provision of credit facility over asset-backed commercial papers issued by the entity, originating loans directly to the structured entity, or purchasing 100% of the subordinated debts issued by the structured entity.

Structured entity for the investments in securities

The structured entity is established for the purpose of investments in securities. The Group acquires beneficiary certificates through its contribution of funding to the structured entity by the Group, and it is exposed to the risk that it may not be able to recover its fund depending on the result of investment performance of asset managers of the structured entity.

Money trust under the Financial Investment Services and Capital Markets Act

The Group provides with financial guarantee of principal and interest or solely principal to some of its trust products. Due to the financial guarantees, the Group may be obliged when the principal and interest or principal of the trust product sold is short of the guaranteed amount depending on the result of investment performance of the trust product.

As of December 31, 2023 and 2022, the Group provides 2,445,644 million Won and 231,309 million Won of credit facilities, respectively, for the structured entities mentioned above. As of December 31, 2023 and 2022, the purchase commitment amounts to 2,848,921 million Won and 2,545,164 million Won, respectively.

(6)

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

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

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Unconsolidated structured entities classified as ‘investment funds’ include investment trusts and private equity funds. An investment trust orders the investment and operation of funds to the trust manager in accordance with trust contract with profits distributed to the investors. Private equity funds finances money required to acquire equity securities to enable direction of management and/or improvement of ownership structure, with profit distributed to the investors. The Group recognizes pro rata amount of dividend income as an investor in the same way as ‘structured finance’, and may be exposed to losses due to reduction in investment value. Investments in MMF(Money Market Funds) as of December 31, 2023 and 2022 are 1,451,874 million Won and 875,470 million Won, respectively, and there is no additional commitments for MMF.

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

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


	(unit : Korean Won in millions))
	December 31, 2023
	Asset securitization		Structured Finance		Investment Fund		Real-estate trust
Total asset of the unconsolidated structured entities		14,595,681		99,568,859		189,034,319		1,604,210
Assets recognized in the consolidated financial statements related to the unconsolidated structured entities		9,256,063		5,414,037		6,884,658		93,222
Financial assets at FVTPL		205,449		118,026		6,000,877		8,297
Financial assets at FVTOCI		2,802,592		43,696		—		—
Financial assets at amortized cost		6,248,022		5,252,191		66		84,925
Investments in joint ventures and associates		—		—		881,531		—
Derivative assets		—		124		2,184		—
Liabilities recognized in the consolidated financial statements related to the unconsolidated structured entities		248		3,251		2,006		28,838
Derivative liabilities		—		1,243		2,006		—
Other liabilities (provisions)		248		2,008		—		28,838
The maximum exposure to risks		9,333,448		6,444,559		11,069,599		206,651
Investment assets		9,256,063		5,414,037		6,884,658		93,222
Purchase commitment		—		—		4,181,631		—
Credit offerings and others		77,385		1,030,522		3,310		113,429
Loss recognized on unconsolidated structured entities		149		83,885		63,372		19,337

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


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

(7)	As of December 31, 2023 and 2022, the share of non-controlling interests on the net income and equity of subsidiaries in which non-controlling interests are significant are as follows: (Unit: Korean Won in millions):

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


	December 31, 2023		December 31, 2022
Woori Bank (*1)		1,546,447		2,344,816
Woori Investment Bank Co., Ltd. (*2)		—		283,221
Woori Asset Trust Co., Ltd. (*3)		12,517		78,434
Woori Asset Management Corp		35,638		34,073
PT Bank Woori Saudara Indonesia 1906 Tbk		103,176		92,118
Wealth Development Bank		21,142		20,759
PT Woori Finance Indonesia Tbk.		13,631		13,964

(*1)

Hybrid securities issued by Woori Bank

(*2)

The non-controlling interests decreased by 280,604 million Won in accordance with additional investment during the year ended December 31, 2023.

(*3)

The non-controlling interests decreased by 71,240 million Won in accordance with additional investment during the year ended December 31, 2023.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Net income attributable to non-controlling interests


	For the years ended December 31
	2023			2022
Woori Bank (*)		95,637			113,995
Woori Investment Bank Co., Ltd.		5,687			38,319
Woori Asset Trust Co., Ltd.		5,720			18,074
Woori Asset Management Corp		1,603			290
Woori Venture Partners Co., Ltd.		1,391			—
PT Bank Woori Saudara Indonesia 1906 Tbk		9,521			10,806
Wealth Development Bank		(68	)		401
PT Woori Finance Indonesia Tbk.		1,067			379

(*)

Distribution of the hybrid securities issued by Woori Bank

Dividends to non-controlling interests


	For the years ended December 31
	2023		2022
Woori Bank (*)		95,637		113,995
Woori Investment Bank Co., Ltd.		8,302		7,219
Woori Asset Trust Co., Ltd		365		365
PT Bank Woori Saudara Indonesia 1906 Tbk		2,802		2,330
PT Woori Finance Indonesia Tbk.		138		—
Others		40		—

(*)

Distribution of the hybrid securities issued by Woori Bank

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

2.	BASIS OF PREPARATION AND MATERIAL ACCOUNTING POLICIES

(1)	Basis of presentation

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

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

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

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

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

Meanwhile, the consolidated financial statements of the Group were initially approved by the Board of Directors on February 6, 2024, revised and approved on February 9, 2024 and the final approval will be made in the annual general shareholders’ meeting on March 22, 2024.

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

i) Amendments to K-IFRS 1001 ‘Presentation of Financial Statements’ – Disclosure of Accounting Policies

The amendments to Korean IFRS 1001 define and require entities to disclose their material accounting policy information (being information that, when considered together with other information included in an entity’s financial statements, can reasonably be expected to influence decisions that the primary users of financial statements make on the basis of those financial statements) statements). These amended do not have a significant impact on the consolidated financial statements.

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

The amendments have defined accounting estimates and clarified how to distinguish them from changes in accounting policies. These amended do not have a significant impact on the consolidated financial statements.

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

The amendments require disclosure of valuation gains or losses (limited to those recognized in the profit or loss) of the conversion options or warrants (or financial liabilities including them), if all or part of the financial instrument with exercise price that is adjusted depending on the issuer’s share price change is classified as financial liability as defined in paragraph 11 (2) of K-IFRS 1032. These amended do not have a significant impact on the consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

Additional phrase ‘the temporary difference to be added and the temporary difference to be deducted do not occur in the same amount’ has been added to initial recognition exception for a transaction in which an asset or liability is initially recognized. These amended do not have a significant impact on the consolidated financial statements.

v) New Standard: K-IFRS 1117 ‘Insurance Contract’

K-IFRS 1117 Insurance Contracts replaces K-IFRS 1104 Insurance Contracts. This Standard estimates future cash flows of an insurance contract and measures insurance liabilities using discount rates applied with assumptions and risks at the measurement date. The entity recognizes insurance revenue on an accrual basis including services (insurance coverage) provided to the policyholder by each annual periods. In addition, investment components (Refunds due to termination/maturity) repaid to a policyholder even if an insured event does not occur, are excluded from insurance revenue, and insurance financial income or expense and the investment income or expense are presented separately to enable users of the information to understand the sources of income or expenses. This standard does not have a significant impact on the consolidated financial statements.

vi) K-IFRS 1012 ‘Income Taxes’ - International Tax Reform – Pillar Two Model Rules

The amendments provide a temporary relief from the accounting for deferred taxes arising from legislation enacted to implement the Pillar Two model rules, which aim to reform international corporate taxation for multinational enterprises, and require disclosure of related current tax effects, etc. The amendments do not have a significant impact on the financial statements.

The Group applies the exception to recognizing and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes. Since the Pillar Two legislation is scheduled to be effective from January 1, 2024, the Group has no current tax expense related to Pillar Two. The Group is in review for the impact of these amendments on the financial statements and does not expect that the impact will be significant.

The details of K-IFRSs that have been issued and published as of December 31,2023 but have not yet reached the effective date, and which the Group have not been early adopted by the Group are as follows:

i) Amendments to K-IFRS 1001 ‘Presentation of Financial Statements’ - Classification of Liabilities as Current or Non-current, Non-current Liabilities with Covenants

The amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period and specify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability, explain that rights are in existence if covenants are complied with at the end of the reporting period and introduce a definition of ‘settlement’ to make it clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.

The amendments specify that only covenants that an entity is required to comply with on or before the end of the reporting period affect the entity’s right to defer settlement of liability for at least 12 months after the reporting date.

Such covenants affect whether the right exists at the end of the reporting period, even if compliance with the covenant is assessed only after the reporting date.

The amendments also specify that the right to defer settlement is not affected if an entity only has to comply with a covenant after the reporting period. However, if the entity’s right to defer settlement of liability is subject to the entity complying with covenants within 12 months after the reporting period, an entity discloses information that enables users of financial statements to understand the risk of the liabilities becoming repayable within 12 months after the reporting period.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

This would include information about the covenants (including the nature of the covenants and when the entity is required to comply with them), the carrying amount of related liabilities and the facts and circumstances, if any, that indicate that the entity may have difficulties complying with the covenants.

The amendments should be applied for annual periods beginning on or after January 1, 2024, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

ii) Amendments to K-IFRS 1007 ‘Statement of Cash Flows’, K-IFRS 1107 ‘Financial Instruments: Disclosures’ – Supplier finance arrangements

When applying supplier finance arrangements, an entity shall disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk. The amendments should be applied for annual periods beginning on or after January 1, 2024, and earlier application is permitted. The Group does not expect that these amended will have a significant impact on the financial statements.

iii) Amendments to K-IFRS 1116 ‘Leases’ - Lease Liability in a Sale and Leaseback

When subsequently measuring lease liabilities arising from a sale and leaseback, a seller-lessee shall determine lease payments or revised lease payments in a way that the seller-lessee would not recognize any amount of the gain or loss that relates to the right of use retained by the seller-lessee. The amendments should be applied for annual periods beginning on or after January 1, 2024, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

iv) Amendments to K-IFRS 1001 ‘Presentation of Financial Statements’ – Disclosure of Cryptographic Assets

The amendments require for an additional disclosure if an entity holds cryptographic assets, or holds cryptographic assets on behalf of the customer, or issues cryptographic assets. The amendments should be applied for annual periods beginning on or after January 1, 2024, and earlier application is permitted. The Group does not expect that these amendments will have a significant impact on the financial statements.

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

(2) Basis of consolidated financial statement presentation

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

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

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

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

Rights arising from other contractual arrangements;

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

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

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

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

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

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

(3)	Business combinations

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

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

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

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

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

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

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

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

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(4)	Investments in joint ventures and associates

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

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

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

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

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

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

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

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

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

(5)	Investment in joint operation

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

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

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

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

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

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

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

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

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

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

(6)	Revenue recognition

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

Revenues from contracts with customers

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

①

Fees and commission received for brokerage

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

②

Fees and commission received related to credit

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

③

Fees and commission received for electronic finance

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

④

Fees and commission received on foreign exchange handling

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

⑤

Fees and commission received on foreign exchange

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

⑥

Fees and commission received for guarantee

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

⑦

Fees and commission received on credit card

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

⑧

Fees and commission received on securities business

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

⑨

Fees and commission from trust management

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

⑩

Fees and commission received on credit Information

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

Other fees

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Revenues from sources other than contracts with customers

①

Interest income

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

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

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

②

Loan origination fees and costs

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

Dividend income

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

(7)	Accounting for foreign currencies

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

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(8)	Cash and cash equivalents

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

(9)	Financial assets and financial liabilities

Financial assets

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

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

Business model

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

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

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

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

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

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

Contractual cash flows

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

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

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

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

Early payment features and maturity extension features

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

①

Financial assets at FVTPL

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

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

②

Financial assets at FVTOCI

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

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

③

Financial assets at amortized cost

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Financial liabilities

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

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

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

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

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

Reclassification

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

Derecognition

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

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

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

Fair value of financial instruments

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

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

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

Financial assets at FVTPL and Financial assets at FVTOCI

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

Derivatives

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

Adjustment of valuation amount

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Expected credit losses on financial assets

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

Financial assets at amortized cost

Debt instruments measured at FVTOCI

Contract assets as defined by K-IFRS 1115

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

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

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

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

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

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

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

Measurement of expected credit losses on financial asset at amortized cost

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

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

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

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(10)	Offsetting financial instruments

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

(11)	Investment properties

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

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

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

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

(12)	Property, Plant and Equipment

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

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

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


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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(13)	Intangible assets and goodwill

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

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

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


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

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

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

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

(14)	Impairment of non-monetary assets

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(15)

Leases

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

①

The Group as a lessee

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

The right-of-use asset is subsequently depreciated on a straight-line basis from the commencement of the lease to the end of the lease term. However, if the lease transfers ownership of the underlying asset to the lessee by the end of the lease term or if the cost of the right-of-use asset reflects that the lessee will exercise a purchase option, the lessee depreciates the right-of-use asset same as a fixed asset from the commencement date to the end of the useful life of the underlying asset. The right-of-use asset may be reduced by an impairment of the underlying asset or adjusted by remeasurement of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that cannot be readily determined, the Group uses its incremental borrowing rate. The Group generally uses the incremental borrowing rate.

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

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

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

Fixed payments (including in-substance fixed payments)

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

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

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

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

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

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

Lease liabilities and right-of-use-asset increased by 7,373 million Won, reflecting the exercise impact of the extension and termination options during the current term.

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

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

②

The Group as a lessor

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

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

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

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

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

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(16)	Derivative instruments

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

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

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

Embedded derivatives

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

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

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

Hedge accounting

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

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

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

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

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

Fair value hedge

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

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

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

Cash flow hedge

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

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

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

(18)	Provisions

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

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

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

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

(19)	Equity instruments issued by the Group

Capital and compound financial instruments

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Hybrid securities

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

(20)	Financial guarantee contracts

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

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

Loss allowance in accordance with K-IFRS 1109

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

(21)	Employee benefits and pensions

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

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

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

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

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(22)	Income taxes

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

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

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

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

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

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

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

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

(24)	Share-based payment

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

3.	MATERIAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

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

The Korean government implemented support measures such as loan repayment deferment to mitigate the negative impact of COVID-19. The Group determined that the credit risk of loans affected by the repayment deferment has significantly increased, with a high possibility of default. The Group will continue to evaluate the adequacy of forward-looking information regarding the duration of the economic impacts of COVID-19 and future government policies even after termination of financial support. The Group also manages credit risk on loans with extended maturities.

Woori Bank recognizes additional expected credit loss allowance for loans subject to payment holiday and extended maturities due to the assessment of the high possibility of default.

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


			December 31, 2023		December 31, 2022
Total loans that are subject to loan payment holiday	Loans	Corporate		1,453,314		1,958,133
		Retail		130,090		216,487
	Off-balance accounts			22,038		2,391

		Total		1,605,442		2,177,011

Total loans that changed its stage from 12-month to lifetime (Stage 2) expected credit losses	Loan	Corporate		1,367,603		1,774,717
		Retail		101,422		169,851
	Off-balance accounts			6,642		2,391

		Total		1,475,667		1,946,959

The expected credit loss allowance that are additionally recognized	Loan	Corporate		210,386		312,054
		Retail		9,318		12,643
	Off-balance accounts			1,734		317

		Total		221,438		325,014

Total loans with extension of maturities and additional expected credit loss allowances as of December 31, 2023, are as follows. (Unit: Korean Won in millions):


			December 31, 2023
Total loans that are subject to extension of maturity	Loans	Corporate		5,227,017
	Loans	Retail		2,124,207
	Off-balance accounts			31,976

	Total			7,383,200

Expected credit loss allowance that are additionally recognized	Loan	Corporate		58,545
	Loan	Retail		35,515
	Off-balance accounts			115

	Total			94,175

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

In addition, as of December 31, 2023, the Group reflects the forward-looking information in the estimated probability of default rate and recognizes additional expected credit loss allowance appropriations by adjusting the forward-looking indicators in consideration of the Korean government financial support policies, increased economic uncertainty, and potential insolvency due to market interest rate hikes.

Woori Card Co., Ltd. recognize an additional allowance for expected credit losses as it evaluates loans with payment holiday and extended maturities as having a high probability of default. As of December 31, 2023 and 2022, which credit risk has increased significantly due to payment holiday, financial assets at amortized cost of debtors transferred from 12-month expected credit loss measurement to lifetime expected credit losses are 6,764 million Won and 6,670 million Won, respectively, and additionally recognized expected credit loss allowance are 131 million Won and 177 million Won, respectively.

Woori Financial Capital Co., Ltd. recognize an additional allowance for expected credit losses as it evaluates loans with payment holiday and extended maturities as having a high probability of default. As of December 31, 2023 and 2022, which credit risk has increased significantly due to payment holiday, financial assets at amortized cost of debtors transferred from 12-month expected credit loss measurement to lifetime expected credit losses are 24,384 million Won and 52,611 million Won, respectively, and additionally recognized expected credit loss allowance are 5,284 million Won and 9,846 million Won, respectively.

1)	Income taxes

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

2)	Valuation of financial instruments

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

3)	Impairment of financial instruments

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

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

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

The impact of changes of estimation on measuring expected credit loss during the current period is as follows (Unit: Korean Won in millions)


		Impact of changes in estimates(*)
Expected credit loss allowances	Loans and other financial assets at amortized cost		323,597
	Guarantees and unused commitments		34,473
	Financial assets at FVTOCI		1,489
	Securities at amortized cost		592

Total			360,151

(*)	The effects of changes in probability of default and loss given default are 212,428 million Won and 147,723 million Won, respectively.

< Woori Financial Capital Co., Ltd >


		Impact of changes in estimates
Expected credit loss allowances	Loans and other financial assets at amortized cost		(19,885	)
	Guarantees and unused commitments		—
	Financial assets at FVTOCI		—
	Securities at amortized cost		—

Total			(19,885	)


		Impact of changes in estimates
Expected credit loss allowances	Loans and other financial assets at amortized cost		(16,467	)
	Guarantees and unused commitments		153
	Financial assets at FVTOCI		—
	Securities at amortized cost		—

Total			(16,314	)


		Impact of changes in estimates
Expected credit loss allowances	Loans and other financial assets at amortized cost		8,338
	Guarantees and unused commitments		—
	Financial assets at FVTOCI		—
	Securities at amortized cost		—

Total			8,338

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


		Impact of changes in estimates
Expected credit loss allowances	Loans and other financial assets at amortized cost		936
	Guarantees and unused commitments		—
	Financial assets at FVTOCI		—
	Securities at amortized cost		—

Total			936

4)	Defined benefit plan

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

5)	Impairment of goodwill

The recoverable amount of a cash generating unit (CGU) is determined based on value-in-use calculations.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

4.	RISK MANAGEMENT

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

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

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

(1)	Credit risk

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

Credit risk management

To measure credit risk, the Group considers the possibility of failure in performing the obligation by the counterparties, credit exposure to the counterparty, the related default risk and the rate of default loss. The Group uses the credit rating model to assess the possibility of counterparty’s default risk; and when assessing the obligor’s credit rating, other than quantitative methods utilizing financial statements and others, and assessor’s judgement, the Group utilizes credit rating derived using statistical methods.

In order to manage credit risk limit, the Group establishes the appropriate credit line per obligor, company or industry by monitoring obligor’s credit line, total exposures and loan portfolios when approving the loan.

The Group mitigates credit risk resulting from the obligor’s credit condition by using financial and physical collateral, guarantees, netting agreements and purchase of credit derivatives that have low correlation with the obligor’s credit status. The Group has adopted the comprehensive method to mitigate its credit risk. Credit risk mitigation is reflected in qualifying financial collateral, trade receivables, guarantees, residential and commercial real estate and other collaterals. The Group regularly performs a revaluation of collateral reflecting such credit risk mitigation.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Measurement of expected credit loss

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


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

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

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

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

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

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


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

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


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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

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

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

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

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

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

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

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

The Group is conducting the following procedures to estimate and apply forward looking information.

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


Major macroeconomic indicators		Correlation between credit risk and macroeconomic indicators
GDP growth rate		Negative(-) Correlation
Personal consumption expenditures increase/decrease rate		Negative(-) Correlation
Won-dollar exchange rate		Positive(+) Correlation

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

Forecast of macroeconomic variables

Probability weight

As of December 31, 2023, the probability weights applied to the scenarios of the forecasts of macroeconomic variables is as follows (Unit: %):


	Base Scenario		Upside Scenario		Downside Scenario		Worst Scenario
Probability weight		44.36		9.41		26.23		20

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Economic forecast of each major macroeconomic variables by scenario (prospect period: 2024)

As of December 31, 2023, the forecasts of major macroeconomic variables by scenario is as follows (Unit: Won, %)


	Base Scenario		Upside Scenario		Downside Scenario		Worst Scenario
GDP growth rate		2.1		2.29		1.76		(-)5.10
Personal consumption expenditures increase/decrease rate		1.9		2.27		1.23		(-)12.22
Won-dollar exchange rate		1,263		1,255		1,277		1,560

The results of Woori Bank’s sensitivity analysis on expected credit loss provisions due to changes in macroeconomic indicators as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


			December 31, 2023
Corporate	Personal consumption expenditures increase/decrease rate	Increase by 1% point		(46,211	)
		Decrease by 1% point		52,862
Retail	Consumer price index change rate (*2)	Increase by 1% point		—
		Decrease by 1% point		—


			December 31, 2022
Corporate	Personal consumption expenditures increase/decrease rate	Increase by 1% point		(59,987	)
		Decrease by 1% point		68,036
Retail	Consumer price index change rate(*2)	Increase by 1% point		(24,164	)
		Decrease by 1% point		28,042

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

(*2)	The consumer price index was excluded from the estimation model of the forward looking for the year ended December 31, 2023.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Maximum exposure

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

The maximum exposure to credit risk as of December 31, 2023 and 2022 is as follows (Unit: Korean Won in millions):


		December 31, 2023		December 31, 2022
Loans and other financial assets at amortized cost (*1)	Korean treasury and government agencies		2,297,088		2,877,685
	Banks		21,996,558		21,571,097
	Corporates		159,343,530		143,507,852
	Consumers		189,510,972		187,804,095

	Sub-total		373,148,148		355,760,729

Financial assets at FVTPL (*2)	Deposits		39,241		34,995
	Debt securities		6,307,238		4,270,532
	Loans		782,716		899,228
	Derivative assets		5,798,329		8,206,181
	Others		2,585		1,505

	Sub-total		12,930,109		13,412,441

Financial assets at FVTOCI	Debt securities		36,694,111		32,145,758

Securities at amortized cost	Debt securities		23,996,172		28,268,516
Derivative assets	Derivative assets (Designated for hedging)		26,708		37,786
Off-balance accounts	Payment guarantees (*3)		13,793,301		11,921,586
	Loan commitments		126,829,192		118,172,070

	Sub-total		140,622,493		130,093,656

	Total		587,417,741		559,718,886

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

(*2)	Puttable financial instruments are not included.

(*3)	As of December 31, 2023 and 2022, the financial guarantee amount of 3,661,656 million Won and 3,095,091 million Won are included, respectively.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Credit risk exposure by geographical areas

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


	December 31, 2023
	Korea		China		USA		UK		Japan		Others (*)		Total
Loans and other financial assets at amortized cost		345,748,021		5,068,801		5,527,208		260,834		617,188		15,926,096		373,148,148
Securities at amortized cost		22,529,414		111,832		1,049,669		—		—		305,257		23,996,172
Financial assets at FVTPL		10,103,182		519		1,507,518		355,478		143,229		820,183		12,930,109
Financial assets at FVTOCI		32,422,652		724,786		2,367,997		7		32,194		1,146,475		36,694,111
Derivative assets (Designated for hedging)		26,010		—		—		—		698		—		26,708
Off-balance accounts		136,287,485		921,904		745,832		20,045		26,351		2,620,876		140,622,493

Total		547,116,764		6,827,842		11,198,224		636,364		819,660		20,818,887		587,417,741

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


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

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Credit risk exposure by industries

The following tables analyze credit risk exposure by industries, which are service, manufacturing, finance and insurance, construction, individuals and others in accordance with the Korea Standard Industrial Classification Code as of December 31, 2023 and 2022 (Unit: Korean Won in millions):


	December 31, 2023
	Service		Manufacturing		Finance and insurance		Construction		Individuals		Others		Total
Loans and other financial assets at amortized cost		84,704,246		44,591,685		30,388,823		5,583,281		185,083,452		22,796,661		373,148,148
Securities at amortized cost		189,193		—		14,151,799		69,720		—		9,585,460		23,996,172
Financial assets at FVTPL		330,193		233,528		7,184,371		81,731		2,600		5,097,686		12,930,109
Financial assets at FVTOCI		453,694		408,377		25,832,327		290,856		—		9,708,857		36,694,111
Derivative assets (Designated for hedging)		—		—		26,708		—		—		—		26,708
Off-balance accounts		22,561,220		22,897,412		13,804,163		2,826,738		73,042,394		5,490,566		140,622,493

Total		108,238,546		68,131,002		91,388,191		8,852,326		258,128,446		52,679,230		587,417,741


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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Credit risk exposure

Financial assets

The maximum exposure to credit risk by asset quality, except for financial assets at FVTPL and derivative asset (designated for hedging) as of December 31, 2023 and 2022 is as follows (Unit: Korean Won in millions):


	December 31, 2023
	Stage 1				Stage 2				Stage 3		Credit impairment model		Total		Loss allowance			Total, net
	Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Stage 3		Credit impairment model		Total		Loss allowance			Total, net
Loans and other financial assets at amortized cost		321,115,435		26,073,686		12,728,437		13,702,855		1,906,434		768,487		376,295,334		(3,147,186	)		373,148,148
Korean treasury and government agencies		2,299,323		21		—		—		—		—		2,299,344		(2,256	)		2,297,088
Banks		21,880,151		122,383		21,771		—		15,295		—		22,039,600		(43,042	)		21,996,558
Corporates		132,702,723		18,890,349		2,630,918		5,411,611		882,459		768,487		161,286,547		(1,943,017	)		159,343,530
General business		87,551,345		10,147,028		1,773,713		3,150,829		548,169		—		103,171,084		(1,161,824	)		102,009,260
Small- and medium-sized enterprise		36,220,660		8,182,558		753,275		1,587,473		225,463		—		46,969,429		(508,736	)		46,460,693
Project financing and others		8,930,718		560,763		103,930		673,309		108,827		768,487		11,146,034		(272,457	)		10,873,577
Consumers		164,233,238		7,060,933		10,075,748		8,291,244		1,008,680		—		190,669,843		(1,158,871	)		189,510,972
Securities at amortized cost		24,010,113		—		—		—		—		—		24,010,113		(13,941	)		23,996,172
Financial assets at FVTOCI (*3)		36,481,028		213,083		—		—		—		—		36,694,111		(27,379	)		36,694,111

Total		381,606,576		26,286,769		12,728,437		13,702,855		1,906,434		768,487		436,999,558		(3,188,506	)		433,838,431


	December 31, 2023
	Collateral value
	Stage1		Stage2		Stage3		Credit impairment model		Total
Loans and other financial assets at amortized cost		224,611,919		21,235,346		767,731		768,275		247,383,271
Korean treasury and government agencies		39,199		—		—		—		39,199
Banks		2,136,530		—		—		—		2,136,530
Corporates		92,544,712		5,915,710		382,605		768,275		99,611,302
General business		52,951,331		4,058,593		169,855		—		57,179,779
Small- and medium-sized enterprise		33,580,230		1,590,947		112,117		—		35,283,294
Project financing and others		6,013,151		266,170		100,633		768,275		7,148,229
Consumers		129,891,478		15,319,636		385,126		—		145,596,240
Securities at amortized cost		—		—		—		—		—
Financial assets at FVTOCI (*3)		—		—		—		—		—

Total		224,611,919		21,235,346		767,731		768,275		247,383,271

(*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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


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

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


	December 31, 2022
	Collateral value
	Stage1		Stage2		Stage3		Credit impairment model		Total
Loans and other financial assets at amortized cost		213,228,740		19,354,919		607,614		313,717		233,504,990
Korean treasury and government agencies		24,276		—		—		—		24,276
Banks		1,858,595		—		—		—		1,858,595
Corporates		82,314,488		4,982,087		316,085		313,717		87,926,377
General business		44,465,799		3,390,139		194,597		—		48,050,535
Small- and medium-sized enterprise		32,503,289		1,537,173		84,798		—		34,125,260
Project financing and others		5,345,400		54,775		36,690		313,717		5,750,582
Consumers		129,031,381		14,372,832		291,529		—		143,695,742
Securities at amortized cost		—		—		—		—		—
Financial assets at FVTOCI (*3)		—		—		—		—		—

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

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

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Payment Guarantees and commitments

The credit quality of the payment guarantees and loan commitments as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023
Financial assets	Stage 1				Stage 2				Stage3		Total
Financial assets	Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Stage3		Total
Off-balance accounts:
Payment Guarantees		12,515,536		1,150,185		73,192		40,890		13,498		13,793,301
Loan Commitments		120,623,982		3,512,099		2,166,380		496,824		29,907		126,829,192

Total		133,139,518		4,662,284		2,239,572		537,714		43,405		140,622,493

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

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

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

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

Collateral and other credit enhancements

For the years ended December 31, 2023 and 2022, there have been no significant changes in the value of collateral or other credit enhancements held by the Group and there have been no significant changes in collateral or other credit enhancements due to changes in the collateral policy of the Group.

Among financial assets that measured loss allowance at lifetime expected credit losses, amortized costs before changes in contractual cash flows as of December 31, 2023 and 2022 are 161,893 million Won and 149,511 million Won, respectively, with net losses recognized along with the changes 5,107 million Won and 8,474 million Won, respectively.

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

As the Group manages receivables that have not lost the right of claim to the debtor for the grounds of incomplete statute limitation and uncollected receivables under the related laws as receivable charge-offs, the balance as of December 31, 2023 and 2022 are 10,089,739 million Won and 9,825,284 million Won. In addition, the contractual non-recoverable amount of financial assets amortized for the year ended December 31, 2023, but still in the process of recovery is 1,599,465 million Won.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(2)	Market risk

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

Market risk management

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

Trading activities

The Group uses the standard approach and internal model approach (Woori 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.

Subsidiaries such as Woori Bank manage market internal capital limits using the Basel III standard approach, and other subsidiaries manage market risks by applying the simple method.

The Basel III standard approach consists of a sensitivity method that measures linear and nonlinear losses that may occur due to unfavorable fluctuations in market risk factors, bankruptcy risks that may occur due to sudden bankruptcy, and residual risk-bearing equity capital for other losses.

Woori Bank, a major subsidiary subject to Basel III standard approach of market risk management, has the following equity capital required for market risk.(Unit : Korean Won in millions)


	Risk Group	December 31, 2023
Sensitivity-based risk	General interest rate risk		37,832
	Equity risk		9,376
	Commodity risk		12
	Foreign exchange risk		249,044
	Non-securitization credit spread risk		27,371
	Securitization (excluding CTP (Correlation Trading Portfolio)) credit spread risk		—
	CTP credit spread risk		—
Default risk	Non-Securitization bankruptcy risk		—
	Securitization (excluding CTP) default risk		—
	CTP default risk		—
Residual risk	Residual risk		692

Total			324,327

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


Risk factor	December 31, 2022			For the year ended December 31, 2022
Risk factor	December 31, 2022			Average			Maximum			Minimum
Interest rate		11,800			8,847			11,987			4,298
Stock price		7,055			6,590			12,448			1,806
Foreign currencies		17,608			14,002			22,251			5,421
Diversification		(17,354	)		(12,725	)		(19,640	)		(4,201	)

Total VaR(*)		19,109			16,714			27,046			7,324

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Non-trading activities

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

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

rEVE and rNII calculated on interest risk in banking book(IRRBB) basis for assets and liabilities by subsidiary as of December 31, 2023 and 2022 are as follows(Unit: Korean Won in millions):


	December 31, 2023				December 31, 2022
	rEVE (*1)		rNII (*2)		rEVE (*1)		rNII (*2)
Woori Bank		683,660		743,489		411,447		448,509
Woori Card Co., Ltd.		80,720		76,846		139,005		185,637
Woori Financial Capital Co., Ltd.		48,523		17,585		43,098		13,814
Woori Investment Bank Co., Ltd.		4,464		15,303		26,311		8,229
Woori Asset Trust Co., Ltd.		1,210		7,018		1,137		6,736
Woori Asset Management Corp.		832		2,154		913		1,299
Woori Savings Bank		7,347		11,077		6,618		10,348
Woori Private Equity Asset Management Co., Ltd.		80		775		547		886
Woori Global Asset Management Co., Ltd.		536		269		251		538
Woori Financial F&I Co., Ltd.		63,852		3,961		26,069		219
Woori Venture Partners Co., Ltd.(*3)		340		2782		—		—

(*1)

rEVE: change in Economic Value of Equity

(*2)

rNII: change in Net Interest Income

(*3)

Additional investment occurred and added it as a consolidated subsidiary during the year ended December 31, 2023.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


	December 31, 2023
	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		245,179,685		55,105,699		17,928,072		12,101,395		55,840,540		3,594,287		389,749,678
Financial assets at FVTPL		2,155,339		178,206		37,672		22,719		52,341		90		2,446,367
Financial assets at FVTOCI		5,976,531		3,489,341		2,425,700		3,008,905		22,852,783		756,272		38,509,532
Securities at amortized cost		1,451,409		1,230,486		3,335,565		1,416,082		15,907,380		2,171,914		25,512,836

Total		254,762,964		60,003,732		23,727,009		16,549,101		94,653,044		6,522,563		456,218,413

Liability:
Deposits due to customers		169,127,109		52,395,270		32,948,424		47,030,448		60,621,757		34,406		362,157,414
Borrowings		20,147,327		5,157,330		1,933,137		2,575,993		4,112,788		437,839		34,364,414
Debentures		7,741,466		5,188,081		4,104,309		5,168,597		18,443,853		3,223,255		43,869,561

Total		197,015,902		62,740,681		38,985,870		54,775,038		83,178,398		3,695,500		440,391,389


	December 31, 2022
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Asset:
Loans and other financial assets at amortized cost		224,863,400		56,669,335		15,469,920		15,108,779		59,454,649		5,963,926		377,530,009
Financial assets at FVTPL		1,888,996		119,725		1,364		4,670		71,620		13,129		2,099,504
Financial assets at FVTOCI		6,093,805		4,224,460		3,014,625		3,550,982		15,409,527		584,203		32,877,602
Securities at amortized cost		2,749,432		1,806,804		1,768,936		1,427,736		20,126,354		2,100,203		29,979,465

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

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

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

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.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Financial instruments in foreign currencies exposed to currency risk as of December 31, 2023 and 2022 are as follows (Unit: USD in millions, JPY in millions, CNY in millions, EUR in millions, and Korean Won in millions):


		December 31, 2023
		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		8,540		11,011,576		108,421		989,519		1,377		248,965		641		914,960		1,145,464		14,310,484
	Loans and other financial assets at amortized cost		24,463		31,542,764		138,242		1,261,674		30,536		5,522,075		1,791		2,554,897		4,585,588		45,466,998
	Financial assets at FVTPL		884		1,140,110		49,640		453,047		—		—		280		399,828		72,351		2,065,336
	Financial assets at FVTOCI		3,136		4,044,155		—		—		3,882		701,938		6		8,549		738,710		5,493,352
	Securities at amortized cost		1,223		1,576,690		—		—		618		111,839		68		97,393		184,938		1,970,860

	Total		38,246		49,315,295		296,303		2,704,240		36,413		6,584,817		2,786		3,975,627		6,727,051		69,307,030

Liability	Financial liabilities at FVTPL		350		451,700		23,806		217,266		—		—		209		297,521		98,885		1,065,372
	Deposits due to customers		23,962		30,896,247		279,377		2,549,759		23,162		4,188,690		2,122		3,027,521		5,531,242		46,193,459
	Borrowings		9,339		12,041,139		70,741		645,621		1,658		299,748		225		321,529		2,632,379		15,940,416
	Debentures		4,811		6,202,675		—		—		—		—		195		277,871		—		6,480,546
	Other financial liabilities		3,448		4,446,194		26,977		246,206		7,752		1,401,956		99		141,404		387,310		6,623,070

	Total		41,910		54,037,955		400,901		3,658,852		32,572		5,890,394		2,850		4,065,846		8,649,816		76,302,863

Off-balance accounts			7,748		9,990,349		30,143		275,101		2,043		369,483		796		1,135,845		568,935		12,339,713


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

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

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

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

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(3)	Liquidity risk

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

Liquidity risk management

Liquidity risk management is to prevent potential cash shortages as a result of mismatching maturity of assets and liabilities or unexpected cash outflows. The consolidated financial liabilities that are relevant to liquidity risk are incorporated within the scope of risk management. Derivatives instruments are excluded from those financial liabilities as they reflect expected cash flows for a pre-determined period.

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

The information on early repayment related to asset securitization is described in NOTE 40. CONTINGENT LIABILITIES AND COMMITMENTS (4) 5).

Maturity analysis of non-derivative financial liabilities

Cash flows of principals and interests by remaining contractual maturities of non-derivative financial liabilities as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023
	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		39,524		89,287		—		—		10,256		56,221		195,288
Deposits due to customers		236,125,560		39,103,357		22,776,074		50,089,672		16,898,791		1,549,490		366,542,944
Borrowings		11,415,214		6,626,722		4,345,143		4,579,032		4,331,196		437,839		31,735,146
Debentures		5,510,096		5,328,382		5,383,741		6,035,590		18,439,577		3,223,255		43,920,641
Lease liabilities		74,228		42,106		58,241		33,679		151,127		25,172		384,553
Other financial liabilities		15,059,935		233,081		21,356		26,403		1,025,252		4,195,930		20,561,957

Total		268,224,557		51,422,935		32,584,555		60,764,376		40,856,199		9,487,907		463,340,529


	December 31, 2022
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Financial liabilities at FVTPL		35,161		—		—		—		—		12,113		47,274
Deposits due to customers		228,890,427		36,851,103		24,091,740		42,652,679		14,999,516		1,522,830		349,008,295
Borrowings		8,969,648		5,734,715		3,210,812		3,156,211		7,457,240		484,909		29,013,535
Debentures		6,348,064		6,841,379		5,211,032		5,214,942		19,621,659		3,298,581		46,535,657
Lease liabilities		68,279		36,724		35,136		29,646		151,379		33,007		354,171
Other financial liabilities		14,409,376		113,049		19,370		20,315		765,870		3,037,563		18,365,543

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Cash flows of principals and interests by expected maturities of non-derivative financial liabilities as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023
	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		39,524		89,287		—		—		10,256		56,221		195,288
Deposits due to customers		241,935,362		41,132,677		23,468,344		44,082,420		14,717,842		505,146		365,841,791
Borrowings		11,419,501		6,630,868		4,346,740		4,579,314		4,331,196		437,839		31,745,458
Debentures		5,512,545		5,330,733		5,386,014		6,037,688		18,443,853		3,223,255		43,934,088
Lease liabilities		74,228		43,350		59,604		35,057		162,874		25,834		400,947
Other financial liabilities		15,059,935		233,081		21,356		26,403		1,025,252		4,195,930		20,561,957

Total		274,041,095		53,459,996		33,282,058		54,760,882		38,691,273		8,444,225		462,679,529


	December 31, 2022
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Financial liabilities at FVTPL		35,161		—		—		—		—		12,113		47,274
Deposits due to customers		242,132,680		41,113,768		24,269,363		29,670,943		10,490,993		56,013		347,733,760
Borrowings		8,969,648		5,734,715		3,210,812		3,156,211		7,457,240		484,909		29,013,535
Debentures		6,348,064		6,841,379		5,211,032		5,214,942		19,621,659		3,298,581		46,535,657
Lease liabilities		68,344		36,729		35,377		29,948		157,361		38,584		366,343
Other financial liabilities		14,409,376		113,049		19,370		20,315		765,870		3,037,563		18,365,543

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

Maturity analysis of derivative financial liabilities

Derivatives held for trading purpose are not managed in accordance with their contractual maturity, since the Group holds such financial instruments with the purpose of disposing or redemption before their maturity. As such, those derivatives are incorporated as “within 3 months” in the table below. Derivatives designated for hedging purpose are estimated by offsetting cash inflows and cash outflows.

The cash flow by the maturity of derivative financial liabilities as of December 31, 2023 and 2022 is as follows (Unit: Korean Won in millions):


		Remaining maturity
		Within 3 months			4 to 6 months			7 to 9 months			10 to 12 months			1 to 5 years		Over 5 years			Total
December 31, 2023	Cash flow risk hedge		(1,223	)		(875	)		(590	)		(302	)		13,689		—			10,699
	Fair value risk hedge		29,176			34,370			157			35,272			30,241		—			129,216
	Trading purpose		5,943,024			—			—			—			—		—			5,943,024
December 31, 2022	Cash flow risk hedge		856			905			915			1,255			50,682		—			54,613
	Fair value risk hedge		25,048			16,175			31,974			18,540			118,027		(3,615	)		206,149
	Trading purpose		8,905,125			—			—			—			—		—			8,905,125

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

A payment guarantee represents an irrevocable undertaking that the Group should meet a customer’s obligations to third parties if the customer fails to do so. The loan commitment represents the limit if the Group has promised a credit to the customer. Loan commitments include commercial standby facilities and credit lines, liquidity facilities to commercial paper conduits and utilized overdraft facilities. The maximum limit to be paid by the Group in accordance with guarantees and loan commitment only applies to principal amounts. There are contractual maturities for payment guarantees, such as financial guarantees for debentures issued or loans, unused loan commitments, and other credits, however, under the terms of the guarantees and unused loan commitments, funds should be paid upon demand from the counterparty. Details of off-balance accounts as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023		December 31, 2022
Payment guarantees		13,793,301		11,921,586
Loan commitments		126,829,192		118,172,070
Other commitments		4,854,099		4,602,429

(4)	Operational risk

The Group defines the operational risk that could cause a negative effect on capital resulting from inadequate internal process, labor work and systematic problem or external factors.

Operational risk management

The Group has established and operated a group operational risk management system to cope with new Basel III global regulations, which is implemented since 2023, and the management of operational risks follows the procedures for risk recognition, evaluation, measurement, monitoring and reporting, risk control and mitigation.

Operational risk measurement

The Group applies the standard approach for the purpose of calculating operational risk required equity capital.

- The standard approach is to calculate operational risk required equity capital by multiplying the Business Indicator Component(BIC), which is calculated by multiplying Business Indicator(BI) that is a measure based on consolidated financial statements and adjustment coefficient, and the Internal Loss Multiplier(ILM), an adjusted multiplier based on the average past loss and operating index.

“Operational risk required equity capital” = Business Indicator Component (BIC) × Internal Loss Multiplier(ILM)

“Business Indicator Component(BIC)” = Business Index(BI) × Adjustment Coefficient

“Internal Loss Multiplier(ILM)” = ln (exp(1)-1 + (Loss Component(LC)/Business Indicator Component(BIC)^0.8)


Bucket	Business Index (BI) section	The coefficient
1	1.4 trillion Won or less	12%
2	More than 1.4 trillion Won and less than or equal to 42 trillion Won	15%
3	Over 42 trillion Won	18%

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(5)	Capital management

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

According to the above regulations, the Group is required to meet the following minimum requirements: Tier 1 common capital ratio of 8.0%, a Tier 1 capital ratio of 9.5%, and a total capital ratio of 11.5% as of December 31, 2023 and 2022.

Details of the Group’s capital adequacy ratio as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


Details	December 31, 2023(*)			December 31, 2022
Tier 1 capital		26,343,941			23,757,296
Other Tier 1 capital		4,596,584			4,208,994
Tier 2 capital		3,815,920			3,437,735

Total risk-adjusted capital		34,756,445			31,404,025

Risk-weighted assets for credit risk		195,490,941			182,028,062
Risk-weighted assets for market risk		4,697,055			6,759,527
Risk-weighted assets for operational risk		19,603,749			16,519,885

Total risk-weighted assets		219,791,745			205,307,474

Common Equity Tier 1 ratio		11.99	%		11.57	%

Tier 1 capital ratio		14.08	%		13.62	%

Total capital ratio		15.81	%		15.30	%

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

5.	OPERATING SEGMENTS

In evaluating the results of the Group and allocating resources, the Group’s Chief Operation Decision Maker (“CODM”) utilizes the method of disclosing the financial information of the segments based on the organization of the Group. This financial information of the segments in this note is regularly reviewed by the CODM.

(1)	Segment by type of organization

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


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

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

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

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(2)	The composition of each organization’s sectors for the years ended December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023
	Banking			Credit card			Capital			Investment banking			Others (*1)			Sub-total			Other adjustments (*2)			Internal adjustments (*3)			Consolidated Adjustments (*4)			Total
Net interest income		6,535,929			667,053			324,013			100,041			115,089			7,742,125			79,401			917,949			3,065			8,742,540
Non-interest income(expense)		1,475,139			121,593			129,347			44,595			2,011,486			3,782,160			14,475			(740,918	)		(1,960,879	)		1,094,838
Impairment losses due to credit loss		(894,827	)		(355,879	)		(188,682	)		(160,182	)		(119,684	)		(1,719,254	)		—			(177,384	)		1,722			(1,894,916	)
General and administrative expense		(3,799,282	)		(285,308	)		(96,469	)		(51,496	)		(556,427	)		(4,788,982	)		(823	)		—			346,372			(4,443,433	)

Net operating income(expense)		3,316,959			147,459			168,209			(67,042	)		1,450,464			5,016,049			93,053			(353	)		(1,609,720	)		3,499,029

Share of gain of associates		88,788			—			395			236			3,373			92,792			(143	)		—			17,182			109,831
Other non-operating expense		(76,312	)		(4,163	)		(2,106	)		(990	)		(972	)		(84,543	)		3,153			353			(10,370	)		(91,407	)

Non-operating income(expense)		12,476			(4,163	)		(1,711	)		(754	)		2,401			8,249			3,010			353			6,812			18,424

Net income(expense) before tax		3,329,435			143,296			166,498			(67,796	)		1,452,865			5,024,298			96,063			—			(1,602,908	)		3,517,453
Tax expense		(814,354	)		(31,232	)		(38,662	)		14,423			(31,833	)		(901,658	)		—			—			11,099			(890,559	)

Net income(loss)		2,515,081			112,064			127,836			(53,373	)		1,421,032			4,122,640			96,063			—			(1,591,809	)		2,626,894

Total assets		458,017,067			17,491,193			12,417,338			6,375,625			29,725,013			524,026,236			2,846,897			—			(28,868,197	)		498,004,936

Investment in associate		1,029,697			—			34,613			4,783			23,882,409			24,951,502			26,302			—			(23,182,434	)		1,795,370
Other assets		456,987,370			17,491,193			12,382,725			6,370,842			5,842,604			499,074,734			2,820,595			—			(5,685,763	)		496,209,566

Total liabilities		431,313,615			14,830,408			10,796,683			5,273,890			4,424,086			466,638,682			118,442			—			(2,149,678	)		464,607,446

(*1)

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

(*2)	Other segments includes the funds subject to Group’s consolidation not included in the reporting segment.

(*3)

Internal reconciliation includes the adjustment of deposit insurance premiums of 464,213 million Won and fund contribution fees of 453,805 million Won from net interest income expenses to non-interest income expenses in order to present the profit and loss adjustment between reporting divisions in accordance with management accounting standards as profit and loss in accordance with accounting standards

(*4)	Consolidation adjustments include the elimination of 343,810 million Won of internal transactions between Woori FIS Co., Ltd., the group’s IT service agency, and affiliates, and the removal of 1,482,956 million Won of dividends received by the holding company from its subsidiaries.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


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

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

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

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

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

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

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

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

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

(*1)

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

(*3)

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(3)	Operating profit or loss from external customers for the years ended December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	For the years ended December 31
Details	2023		2022
Domestic		3,055,926		3,835,809
Foreign		443,103		594,715

Total		3,499,029		4,430,524

(4)	Major non-current assets as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


Details (*)	December 31, 2023 (*)		December 31, 2022 (*)
Domestic		5,804,919		5,152,033
Foreign		636,820		533,354

Total		6,441,739		5,685,387

(*)	Major non-current assets included joint ventures and related business investments, investment properties, Property, Plant and Equipment, and intangible assets.

(5)	Information about major customers

The Group does not have any single customer that generates 10% or more of the Group’s total revenue for the years ended December 31, 2023 and 2022.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

6.	STATEMENTS OF CASH FLOWS

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


	December 31, 2023		December 31, 2022
Cash		1,464,606		1,771,316
Foreign currencies		715,495		628,590
Demand deposits		28,248,420		31,729,228
Fixed deposits		128,097		90,014

Total		30,556,618		34,219,148

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


	Counterparty	December 31, 2023		Reason of restriction
Due from banks in local currency:
Due from BOK	BOK		13,420,310	Reserve deposits under the BOK Act

Due from banks in foreign currencies:
Due from banks on demand	Bank of Japan and others		957,627	Reserve deposits etc.

Total			14,377,937


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

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

Total			22,965,162

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


	For the years ended December 31
	2023			2022
Changes in other comprehensive income related to valuation of financial assets at FVTOCI		725,525			(493,871	)
Changes in other comprehensive income related to valuation of assets of associate		2,965			612
Changes in other comprehensive income related to valuation profit or loss on cash flow hedge		(16,524	)		(9,835	)
Changes in financial assets measure at FVTOCI due to debt-for-equity swap		206			14,594
Changes in the Property, plant and equipment due to the transfer of assets held-for-sale		(2,504	)		(13,109	)
Transfer of investment properties to Property, Plant and Equipment		2,098			—
Transfer of Property, Plant and Equipment to investment properties		—			7,154
Changes in account payables related to Property, Plant and Equipment		—			281
Changes in account payables related to intangible assets		11,121			(11,530	)
Changes in right-of-use assets and lease liabilities		219,531			194,236
Changes in other comprehensive income related to foreign operation translation		45,080			28,746

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


	For the year ended December 31, 2023
	Beginning balance		Cash flow			Not involving cash inflows and outflows								Ending balance
	Beginning balance		Cash flow			Foreign Exchange		Variation of gain(loss) on valuation of hedged items		Business Combination		Others (*)		Ending balance
Borrowings		28,429,603		2,332,376			191,250		—		—		33,517		30,986,746
Debentures		44,198,486		(3,227,650	)		82,210		63,615		—		122,584		41,239,245
Lease liabilities		319,161		(160,673	)		1,130		—		—		174,838		334,456
Other liabilities		27,384		118			—		—		4		641		28,147

Total		72,974,634		(1,055,829	)		274,590		63,615		4		331,580		72,588,594

(*)	The change in lease liabilities due to the new contract includes 210,810 million Won.


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

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

7.	FINANCIAL ASSETS AT FVTPL

(1)	Details of financial assets at FVTPL as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023		December 31, 2022
Financial assets at fair value through profit or loss measured at fair value		21,544,756		19,860,573

(2)	Financial assets at fair value through profit or loss measured at fair value as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023		December 31, 2022
Deposits:
Gold banking asset		39,241		34,995
Securities:
Debt securities
Korean treasury and government agencies		4,310,612		2,754,442
Financial institutions		778,832		620,311
Corporates		433,488		721,573
Securities loaned		625,398		—
Others		158,908		174,206
Equity securities		421,989		383,883
Capital contributions		2,459,646		1,976,474
Beneficiary certificates		5,509,915		3,902,762
Others		181,691		143,334

Sub-total		14,880,479		10,676,985

Loans		782,716		899,228
Derivatives assets		5,798,329		8,206,181
Other financial assets		43,991		43,184

Total		21,544,756		19,860,573

The Group does not have financial assets at fair value through profit or loss designated as upon initial recognition as of December 31, 2023 and 2022.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

8.	FINANCIAL ASSETS AT FVTOCI

(1)	Details of financial assets at FVTOCI as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023		December 31, 2022
Debt securities:
Korean treasury and government agencies		5,728,241		5,487,983
Financial institutions		20,885,924		16,870,619
Corporates		3,994,432		4,044,446
Bond denominated in foreign currencies		5,493,295		5,644,684
Securities loaned		592,219		98,026

Sub-total		36,694,111		32,145,758

Equity securities		1,197,384		939,322

Total		37,891,495		33,085,080

(2)	Details of equity securities designated as financial assets at FVTOCI as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


Purpose of acquisition	December 31, 2023		December 31, 2022		Remarks
Investment for strategic business partnership purpose		1,039,203		776,199
Debt-equity swap		158,175		157,216
Others		6		5,907	Insurance for mutual aid association, etc.

Total		1,197,384		939,322

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

Allowance for credit losses


	For the year ended December 31, 2023
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(11,805	)		—		—		(11,805	)
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Net provision of loss allowance		(16,542	)		—		—		(16,542	)
Disposal		1,519			—		—		1,519
Others (*)		(551	)		—		—		(551	)

Ending balance		(27,379	)		—		—		(27,379	)

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


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

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Gross carrying amount


	For the year ended December 31, 2023
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		32,145,758			—		—		32,145,758
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Acquisition		24,350,759			—		—		24,350,759
Disposal / Recovery		(20,823,293	)		—		—		(20823,293	)
Gain (loss) on valuation		707,739			—		—		707,739
Amortization based on effective interest method		166,401			—		—		166,401
Others (*)		146,747			—		—		146,747

Ending balance		36,694,111			—		—		36,694,111

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


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

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

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

(4)

During the years ended December 31, 2023 and 2022, the Group sold its equity securities., designated as financial assets at FVTOCI in accordance with decision of disposal by the creditors, and the fair values at disposal dates were 3,194 million Won and 3,567 million Won, respectively and cumulative gains and losses at disposal dates were 118 million Won in gain and 14,444 million Won in loss, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

9.	SECURITIES AT AMORTIZED COST

(1)	Details of securities at amortized cost as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023			December 31, 2022
Korean treasury and government agencies		8,143,585			10,083,951
Financial institutions		6,660,465			10,283,631
Corporates		7,235,202			6,237,547
Bond denominated in foreign currencies		1,970,861			1,671,772
Allowance for credit losses		(13,941	)		(8,385	)

Total		23,996,172			28,268,516

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

Loss allowance


	For the year ended December 31, 2023
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(8,385	)		—		—		(8,385	)
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Net provision of loss allowance		(5,549	)		—		—		(5,549	)
Others (*)		(7	)		—		—		(7	)

Ending balance		(13,941	)		—		—		(13,941	)

(*)

Changes due to foreign currencies translation, etc.


	For the year ended December 31, 2022
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(5,235	)		—		—		(5,235	)
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Net provision of loss allowance		(3,151	)		—		—		(3,151	)
Others (*)		1			—		—		1

Ending balance		(8,385	)		—		—		(8,385	)

(*)

Changes due to foreign currencies translation, etc.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Gross carrying amount


	For the year ended December 31, 2023
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		28,276,901			—		—		28,276,901
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Acquisition		4,244,256			—		—		4,244,256
Disposal / Recovery		(8,727,124	)		—		—		(8,727,124	)
Amortization based on effective interest method		167,219			—		—		167,219
Others (*)		48,861			—		—		48,861

Ending balance		24,010,113			—		—		24,010,113

(*)

Changes due to foreign currencies translation, etc.


	For the year ended December 31, 2022
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		17,091,509			—		—		17,091,509
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Acquisition		16,873,194			—		—		16,873,194
Disposal / Recovery		(5,871,234	)		—		—		(5,871,234	)
Amortization based on effective interest method		86,212			—		—		86,212
Others (*)		97,220			—		—		97,220

Ending balance		28,276,901			—		—		28,276,901

(*)

Changes due to foreign currencies translation, etc.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

10.	LOANS AND OTHER FINANCIAL ASSETS AT AMORTIZED COST

(1)	Details of loans and other financial assets at amortized cost as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023		December 31, 2022
Due from banks		1,950,573		2,994,672
Loans		358,577,179		343,918,560
Other financial assets		12,620,396		8,847,497

Total		373,148,148		355,760,729

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


	December 31, 2023			December 31, 2022
Due from banks in local currency:
Due from The Bank of Korea (“BOK”)		—			160,000
Due from depository banks		108,344			170,006
Due from non-depository institutions		136			183
Due from the Korea Exchange		68			2,440
Others		135,390			421,318
Loss allowance		(59	)		(116	)

Sub-total		243,879			753,831

Due from banks in foreign currencies:
Due from banks on demand		221,292			199,671
Due from banks on time		366,117			466,963
Others		1,135,072			1,586,408
Loss allowance		(15,787	)		(12,201	)

Sub-total		1,706,694			2,240,841

Total		1,950,573			2,994,672

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


	Counterparty	December 31, 2023		Reason of restriction
Due from banks in local currency:
Due from KSFC	KB Securities Co., Ltd. and SI SECURITIES CORPORATION		68	Futures margin
Others	Korea Federation of Savings Bank and others		129,974	Domestic currency exchange and collateral related to promissory notes and others

	Sub-total		130,042

Due from banks in foreign currencies:
Due from banks on demand	National Bank of Cambodia and others		216,147	Reserve deposits and others
Due from banks on time	National Bank of Cambodia		321	Usage deposits for fund settlement system
Others	People’s Bank of China and others		1,062,130	Reserve deposits and others

	Sub-total		1,278,598

	Total		1,408,640

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	Counterparty	December 31, 2022		Reason of restriction
Due from banks in local currency:
Due from BOK	The BOK		160,000	Reserve deposits under BOK Act
Due from KSFC	KB Securities Co., Ltd.		2,419	Customer deposits return reserve
Others	Korea Federation of Savings Banks and others		223,705	Korean Won CCP margin and others

	Sub-total		386,124

Due from banks in foreign currencies:
Due from banks on demand	The BOK and others		193,507	Reserve deposits under BOK Act and others
Foreign currency deposits on time	National Bank Cambodia		253	Reserve deposits and others
Others	Korea Investment & Securities and others		1,581,298	Overseas futures and options trade deposits and others

	Sub-total		1,775,058

	Total		2,161,182

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

Allowance for credit losses


	For the year ended December 31, 2023
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(12,317	)		—		—		(12,317	)
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		(5,254	)		—		—		(5,254	)
Others (*)		1,725			—		—		1,725

Ending balance		(15,846	)		—		—		(15,846	)

(*)

Changes due to foreign currencies translation, etc.


	For the year ended December 31, 2022
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(6,034	)		—		—		(6,034	)
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Provision for allowance for credit loss		(7,702	)		—		—		(7,702	)
Others (*)		1,419			—		—		1,419

Ending balance		(12,317	)		—		—		(12,317	)

(*)

Changes due to foreign currencies translation, etc.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Gross carrying amount


	For the year ended December 31, 2023
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		3,006,989			—		—		3,006,989
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Net decrease		(1,154,265	)		—		—		(1,154,265	)
Changes due to business combinations		113,000			—		—		113,000
Others (*)		695			—		—		695

Ending balance		1,966,419			—		—		1,966,419

(*)

Changes due to foreign currencies translation, etc.


	For the year ended December 31, 2022
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		2,872,918			—		—		2,872,918
Transfer to 12-month expected credit losses		—			—		—		—
Transfer to lifetime expected credit losses		—			—		—		—
Transfer to credit-impaired financial assets		—			—		—		—
Net increase		166,693			—		—		166,693
Others (*)		(32,622	)		—		—		(32,622	)

Ending balance		3,006,989			—		—		3,006,989

(*)

Changes due to foreign currencies translation, etc.

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


	December 31, 2023			December 31, 2022
Loans in local currency		298,157,823			282,686,620
Loans in foreign currencies		28,585,389			26,988,360
Domestic banker’s usance		2,726,633			2,877,079
Credit card accounts		12,531,620			10,370,362
Bills bought in foreign currencies		4,215,956			3,650,792
Bills bought in local currency		496,148			533,879
Factoring receivables		8,712			25,469
Advances for customers on guarantees		9,996			25,698
Private placement bonds		688,437			485,519
Securitized loans		3,203,135			2,990,937
Call loans		2,719,546			3,626,226
Bonds purchased under resale agreements		3,356,392			6,849,038
Financial lease receivables		1,362,279			1,467,858
Installment financial bond		2,635,720			2,832,972
Others		119			140
Loan origination costs and fees		865,694			852,002
Discounted present value		(11,360	)		(10,238	)
Allowance for credit losses		(2,975,060	)		(2,334,153	)

Total		358,577,179			343,918,560

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


	For the year ended December 31, 2023
	Consumers									Corporates
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3			Credit impairment model
Beginning balance		(147,876	)		(128,089	)		(241,942	)		(453,621	)		(818,234	)		(241,465	)		(27	)
Transfer to 12-month expected credit losses		(25,553	)		22,750			2,803			(190,665	)		190,047			618			—
Transfer to lifetime expected credit losses		10,881			(12,892	)		2,011			28,452			(36,229	)		7,777			—
Transfer to credit-impaired financial assets		7,085			24,577			(31,662	)		17,959			33,272			(51,231	)		—
Net provision of allowance for credit losses		(41,029	)		(41,105	)		(340,607	)		(361,735	)		(153,392	)		(515,711	)		(1,011	)
Recovery		—			—			(65,639	)		—			—			(44,043	)		—
Charge-off		—			—			301,995			—			—			298,665			—
Disposal		18			419			114,643			266			512			172,519			949
Interest income from impaired loans		—			—			15,553			—			—			19,341			—
Others		(371	)		338			22,000			11,656			21,380			(10,173	)		—

Ending balance		(196,845	)		(134,002	)		(220,845	)		(947,688	)		(762,644	)		(363,703	)		(89	)


	For the year ended December 31, 2023
	Credit card accounts									Total
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3			Credit impairment model
Beginning balance		(71,139	)		(127,814	)		(103,946	)		(672,636	)		(1,074,137	)		(587,353	)		(27	)
Transfer to 12-month expected credit losses		(30,312	)		30,198			114			(246,530	)		242,995			3,535			—
Transfer to lifetime expected credit losses		6,894			(7,420	)		526			46,227			(56,541	)		10,314			—
Transfer to credit-impaired financial assets		748			2,381			(3,129	)		25,792			60,230			(86,022	)		—
Net provision of allowance for credit losses		(3,864	)		(15,457	)		(338,618	)		(406,628	)		(209,954	)		(1,194,936	)		(1,011	)
Recovery		—			—			(33,710	)		—			—			(143,392	)		—
Charge-off		—			—			306,005			—			—			906,665			—
Disposal		—			—			39,360			284			931			326,522			949
Interest income from impaired loans		—			—			—			—			—			34,894			—
Others		(61	)		—			—			11,224			21,718			11,827			—

Ending balance		(97,734	)		(118,112	)		(133,398	)		(1,242,267	)		(1,014,758	)		(717,946	)		(89	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	For the year ended December 31, 2022
	Consumers									Corporates
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3			Credit impairment model
Beginning balance		(136,520	)		(97,604	)		(206,617	)		(362,766	)		(576,740	)		(251,233	)		—
Transfer to 12-month expected credit losses		(21,684	)		21,210			474			(74,402	)		68,546			5,856			—
Transfer to lifetime expected credit losses		10,211			(11,568	)		1,357			18,678			(21,502	)		2,824			—
Transfer to credit-impaired financial assets		3,960			8,975			(12,935	)		2,217			12,769			(14,986	)		—
Net provision of allowance for credit losses		(734	)		(49,398	)		(156,286	)		(22,646	)		(303,198	)		(107,038	)		(27	)
Recovery		—			—			(70,077	)		—			—			(55,743	)		—
Charge-off		—			—			161,850			—			—			140,744			—
Disposal		—			62			21,862			280			128			37,722			—
Interest income from impaired loans		—			—			11,805			—			—			9,576			—
Changes due to business combinations		(4,350	)		(495	)		(948	)		(479	)		(84	)		(97	)		—
Others		1,241			729			7,573			(14,503	)		1,847			(9,090	)		—

Ending balance		(147,876	)		(128,089	)		(241,942	)		(453,621	)		(818,234	)		(241,465	)		(27	)


	For the year ended December 31, 2022
	Credit card accounts									Total
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3			Credit impairment model
Beginning balance		(68,814	)		(115,489	)		(70,927	)		(568,100	)		(789,833	)		(528,777	)		—
Transfer to 12-month expected credit losses		(31,360	)		31,284			76			(127,446	)		121,040			6,406			—
Transfer to lifetime expected credit losses		7,576			(7,694	)		118			36,465			(40,764	)		4,299			—
Transfer to credit-impaired financial assets		642			2,190			(2,832	)		6,819			23,934			(30,753	)		—
Net provision of allowance for credit losses		20,820			(38,105	)		(204,569	)		(2,560	)		(390,701	)		(467,893	)		(27	)
Recovery		—			—			(53,988	)		—			—			(179,808	)		—
Charge-off		—			—			220,280			—			—			522,874			—
Disposal		—			—			7,896			280			190			67,480			—
Interest income from impaired loans		—			—			—			—			—			21,381			—
Changes due to business combinations		—			—			—			(4,829	)		(579	)		(1,045	)		—
Others		(3	)		—			—			(13,265	)		2,576			(1,517	)		—

Ending balance		(71,139	)		(127,814	)		(103,946	)		(672,636	)		(1,074,137	)		(587,353	)		(27	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


	For the year ended December 31, 2023
	Consumers									Corporates
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3			Credit impairment model
Beginning balance		131,328,377			14,020,582			564,057			179,552,435			9,486,297			625,998			313,717
Transfer to 12-month expected credit losses		4,038,074			(4,024,039	)		(14,035	)		2,214,045			(2,209,035	)		(5,010	)		—
Transfer to lifetime expected credit losses		(6,406,254	)		6,422,979			(16,725	)		(4,944,087	)		4,971,596			(27,509	)		—
Transfer to credit-impaired financial assets		(263,965	)		(173,536	)		437,501			(582,131	)		(242,382	)		824,513			—
Charge-off		—			—			(301,995	)		—			—			(298,665	)		—
Disposal		(63	)		(491	)		(218,965	)		(18,149	)		(719	)		(404,876	)		(152,024	)
Net increase(decrease)		4,115,668			(1,531,099	)		192,248			12,389,915			(1,384,370	)		142,393			606,794
Changes due to business combinations		1,144			—			—			—			—			—			—

Ending balance		132,812,981			14,714,396			642,086			188,612,028			10,621,387			856,844			768,487


	For the year ended December 31, 2023
	Credit card accounts									Total
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3			Credit impairment model
Beginning balance		9,115,460			1,066,380			179,410			319,996,272			24,573,259			1,369,465			313,717
Transfer to 12-month expected credit losses		343,929			(343,765	)		(164	)		6,596,048			(6,576,839	)		(19,209	)		—
Transfer to lifetime expected credit losses		(411,467	)		412,222			(755	)		(11,761,808	)		11,806,797			(44,989	)		—
Transfer to credit-impaired financial assets		(40,236	)		(20,039	)		60,275			(886,332	)		(435,957	)		1,322,289			—
Charge-off		—			—			(306,005	)		—			—			(906,665	)		—
Disposal		—			—			(73,107	)		(18,212	)		(1,210	)		(696,948	)		(152,024	)
Net increase(decrease)		2,279,382			(131,187	)		393,697			18,784,965			(3,046,656	)		728,338			606,794
Changes due to business combinations		—			—			—			1,144			—			—			—

Ending balance		11,287,068			983,611			253,351			332,712,077			26,319,394			1,752,281			768,487

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	For the year ended December 31, 2022
	Consumers									Corporates
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3			Credit impairment model
Beginning balance		135,139,685			13,500,783			499,969			170,795,255			8,458,279			541,732			—
Transfer to 12-month expected credit losses		4,651,157			(4,637,460	)		(13,697	)		1,784,684			(1,768,655	)		(16,029	)		—
Transfer to lifetime expected credit losses		(6,284,951	)		6,303,526			(18,575	)		(3,773,713	)		3,792,473			(18,760	)		—
Transfer to credit-impaired financial assets		(157,808	)		(102,097	)		259,905			(242,421	)		(123,225	)		365,646			—
Charge-off		—			—			(161,850	)		—			—			(140,744	)		—
Disposal		—			(259	)		(57,052	)		(48,472	)		(391	)		(134,732	)		—
Net increase(decrease)		(2,077,449	)		(1,046,885	)		47,727			11,005,551			(873,200	)		28,198			313,717
Changes due to business combinations		57,743			2,974			7,630			31,551			1,016			687			—

Ending balance		131,328,377			14,020,582			564,057			179,552,435			9,486,297			625,998			313,717


	For the year ended December 31, 2022
	Credit card accounts									Total
	Stage 1			Stage 2			Stage 3			Stage 1			Stage 2			Stage 3			Credit impairment model
Beginning balance		8,239,303			1,395,139			116,075			314,174,243			23,354,201			1,157,776			—
Transfer to 12-month expected credit losses		542,021			(541,913	)		(108	)		6,977,862			(6,948,028	)		(29,834	)		—
Transfer to lifetime expected credit losses		(403,398	)		403,598			(200	)		(10,462,062	)		10,499,597			(37,535	)		—
Transfer to credit-impaired financial assets		(31,780	)		(21,244	)		53,024			(432,009	)		(246,566	)		678,575			—
Charge-off		—			—			(220,280	)		—			—			(522,874	)		—
Disposal		—			—			(17,082	)		(48,472	)		(650	)		(208,866	)		—
Net increase(decrease)		769,314			(169,200	)		247,981			9,697,416			(2,089,285	)		323,906			313,717
Changes due to business combinations		—			—			—			89,294			3,990			8,317			—

Ending balance		9,115,460			1,066,380			179,410			319,996,272			24,573,259			1,369,465			313,717

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


	December 31, 2023			December 31, 2022
Cash Management Account asset (CMA asset)		91,000			157,000
Receivables		9,061,936			5,438,469
Accrued income		1,972,330			1,667,397
Telex and telephone subscription rights and refundable deposits		793,510			801,536
Domestic exchange settlement debit		446,570			577,919
Other assets (*)		411,330			344,356
Allowance for credit losses		(156,280	)		(139,180	)

Total		12,620,396			8,847,497

(*)

The amount included in other assets related employee incidents in prior fiscal year was 63,354 million Won, which was completely lost.

(9)	Changes in the allowances for credit losses on other financial assets are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023
	Stage 1			Stage 2			Stage 3			Total
Beginning balance		(4,178	)		(9,133	)		(125,869	)		(139,180	)
Transfer to 12-month expected credit losses		(388	)		285			103			—
Transfer to lifetime expected credit losses		223			(246	)		23			—
Transfer to credit-impaired financial assets		50			266			(316	)		—
Provision of loss allowance		(3,141	)		(8,235	)		(10,829	)		(22,205	)
Charge-off		—			—			4,341			4,341
Disposal		—			—			2,597			2,597
Others		(1,585	)		1			(249	)		(1,833	)

Ending balance		(9,019	)		(17,062	)		(130,199	)		(156,280	)


	For the year ended December 31, 2022
	Stage 1			Stage 2			Stage 3			Total
Beginning balance		(3,675	)		(5,580	)		(57,526	)		(66,781	)
Transfer to 12-month expected credit losses		(261	)		246			15			—
Transfer to lifetime expected credit losses		209			(225	)		16			—
Transfer to credit-impaired financial assets		981			1,134			(2,115	)		—
Provision of loss allowance		(1,749	)		(4,707	)		(6,329	)		(12,785	)
Charge-off		—			—			2,223			2,223
Disposal		—			—			751			751
Others		317			(1	)		(62,904	)		(62,588	)

Ending balance		(4,178	)		(9,133	)		(125,869	)		(139,180	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(10)	Changes in the gross carrying amount of other financial assets are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023
	Stage 1			Stage 2			Stage 3			Total
Beginning balance		8,886,721			21,454			78,502			8,986,677
Transfer to 12-month expected credit losses		14,252			(14,143	)		(109	)		—
Transfer to lifetime expected credit losses		(30,528	)		30,559			(31	)		—
Transfer to credit-impaired financial assets		(7,299	)		(1,498	)		8,797			—
Charge-off		—			—			(4,341	)		(4,341	)
Disposal		—			—			(3,318	)		(3,318	)
Net increase (decrease)		3,634,239			75,526			74,653			3,784,418
Changes due to business combinations		13,240			—			—			13,240

Ending balance		12,510,625			111,898			154,153			12,776,676


	For the year ended December 31, 2022
	Stage 1			Stage 2			Stage 3			Total
Beginning balance		9,004,539			106,597			174,868			9,286,004
Transfer to 12-month expected credit losses		9,765			(9,749	)		(16	)		—
Transfer to lifetime expected credit losses		(38,248	)		38,265			(17	)		—
Transfer to credit-impaired financial assets		(1,484	)		(2,824	)		4,308			—
Charge-off		—			—			24			24
Disposal		(5	)		—			(917	)		(922	)
Net increase (decrease)		(88,214	)		(110,835	)		(99,748	)		(298,797	)
Changes due to business combinations		368			—			—			368

Ending balance		8,886,721			21,454			78,502			8,986,677

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

11.	FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

(1)	The fair value hierarchy

The fair value hierarchy for financial instruments is determined by the amount of observable market data. The specific financial instruments characteristics and market condition such as the existence of the transactions among market participants and transparency are reflected to the market observable inputs. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities. The Group maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value of its financial assets and financial liabilities. Fair value is measured based on the perspective of a market participant. As such, even when market assumptions are not readily available, the Group’s own assumptions reflect those that market participants would use for measuring the assets or liabilities at the measurement date.

The fair value measurement is described in the one of the following three levels used to classify fair value measurements:

•

Level 1 - fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. The types of financial assets or liabilities generally included in Level 1 are publicly traded equity securities, derivatives, and debt securities issued by governmental bodies.

•

Level 2 - fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices). The types of financial assets or liabilities generally included in Level 2 are debt securities not traded in active markets and derivatives traded in OTC but not required significant judgment.

•

Level 3 - fair value measurements are those derived from valuation technique that include inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). The types of financial assets or liabilities generally included in Level 3 are non-public securities and derivatives and debt securities of which valuation techniques require significant judgments and subjectivity.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Group’s assessment of the significance of a particular input to a fair value measurement in its entirety requires judgment and consideration of inherent factors of the asset or liability.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


	December 31, 2023
	Level 1 (*)		Level 2 (*)		Level 3		Total
Financial assets:
Financial assets at FVTPL
Deposits		39,241		—		—		39,241
Debt securities		4,414,956		1,888,052		4,230		6,307,238
Equity securities		68,691		19		353,279		421,989
Capital contributions		—		—		2,459,646		2,459,646
Beneficiary certificates		169,012		3,634,938		1,705,965		5,509,915
Loans		—		726,714		56,002		782,716
Derivative assets		113		5,669,078		129,138		5,798,329
Other financial assets in foreign currency		—		—		42,408		42,408
Others		—		—		183,274		183,274

Sub-total		4,692,013		11,918,801		4,933,942		21,544,756

Financial assets at FVTOCI
Debt securities		12,392,117		24,301,994		—		36,694,111
Equity securities		649,220		—		548,164		1,197,384

Sub-total		13,041,337		24,301,994		548,164		37,891,495

Derivative assets (designated for hedging)		—		26,708		—		26,708

Total		17,733,350		36,247,503		5,482,106		59,462,959


Financial liabilities:
Financial liabilities at FVTPL
Deposits due to customers		39,524		—		—		39,524
Derivative liabilities		8,303		5,932,727		1,994		5,943,024
Securities sold		155,765		—		—		155,765

Sub-total		203,592		5,932,727		1,994		6,138,313

Derivative liabilities (designated for hedging)		—		153,007		—		153,007

Total		203,592		6,085,734		1,994		6,291,320

(*)

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	December 31, 2022
	Level 1 (*)		Level 2 (*)		Level 3		Total
Financial assets:
Financial assets at FVTPL
Deposits		34,995		—		—		34,995
Debt securities		2,580,563		1,654,591		1,078		4,236,232
Equity securities		76,007		25		307,851		383,883
Capital contributions		—		—		1,976,474		1,976,474
Beneficiary certificates		45,394		2,398,592		1,458,776		3,902,762
Loans		—		794,723		104,505		899,228
Derivative assets		69,316		8,042,895		93,970		8,206,181
Other financial assets in foreign currency		—		—		41,679		41,679
Others		34,299		—		144,840		179,139

Sub-total		2,840,574		12,890,826		4,129,173		19,860,573

Financial assets at FVTOCI
Debt securities		9,895,456		22,250,302		—		32,145,758
Equity securities		382,257		—		557,065		939,322

Sub-total		10,277,713		22,250,302		557,065		33,085,080

Derivative assets (designated for hedging)		—		37,786		—		37,786

Total		13,118,287		35,178,914		4,686,238		52,983,439


Financial liabilities:
Financial liabilities at FVTPL
Deposits due to customers		35,161		—		—		35,161
Derivative liabilities		11,700		8,883,976		9,449		8,905,125
Securities sold		12,113		—		—		12,113

Sub-total		58,974		8,883,976		9,449		8,952,399

Derivative liabilities (designated for hedging)		—		202,911		—		202,911

Total		58,974		9,086,887		9,449		9,155,310

(*)

Among financial assets and financial liabilities measured at fair value, the amount transferred from Level 2 to Level 1 is 2,835,187 million Won. The Group recognizes transfers among levels at the end of reporting period in which events have occurred or conditions have changed.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Financial assets and liabilities at FVTPL, financial liabilities at FVTPL designated as upon initial recognition, financial assets at FVTOCI, and derivative assets and liabilities are recognized at fair value. Fair value is the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.

Financial instruments are measured at fair value using a quoted market price in active markets. If there is no active market for a financial instrument, the Group determines the fair value using valuation methods. Valuation methods and input variables for each type of financial instruments are as follows:

Valuation methods and input variables for each type of financial instrument classified into level 2 as of December 31, 2023 and 2022 are as follows:


	Valuation methods	Input variables

Debt securities	Fair value is measured by discounting the future cash flows of debt securities applying the risk-free market rate with credit spread and LSMC and Hull-White model.	Risk-free market rate, credit spread, discount rate originated from credit grade, volatility of stock and volatility of interest rate

Equity securities and beneficiary certificates	The beneficiary certificates are measured at net asset value method, DCF model(Discounted Cash Flow Model), Binomial Tree model and T-F model.	Values of underlying assets such as bond, discount rate, volatility of stock, terminal growth rate etc.

Derivatives	Fair value is measured by models such as option model (Closed form).	Discount rate, volatility, exchange rate, stock prices, fair value originated from forward price etc.

Loans	The future cash flows of debt instruments are measured at a discount by applying the market interest rate applied to entities with similar creditworthiness to the debtor.	Risk-free market rate and credit spread

Valuation methods and input variables for each type of financial instrument classified into level 3 as of December 31, 2023 and 2022 are as follows:


	Valuation methods	Input variables

Loans	Fair value is measured by using the DCF model (Discounted Cash Flow Model), which is a valuation technique commonly used in the market taking into account the price and variability of the underlying asset, T-F model, LSMC and Hull-White etc.	Values of underlying assets, volatility, discount rate, volatility of stock, volatility of interest rate

Debt securities	Fair value is measured by models such as LSMC(Least-Squares Monte Carlo), Hull-White model.	Discount rate originated from credit grade, volatility of stocks , volatility of interest 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, LSMC, Hull-White and Precedent Transactions model more than one method is used given the characteristic of the subject of fair value measurement.	Risk-free market rate, market risk premium, corporate Beta, stock prices, volatility of underlying asset, discount rate originated from credit grade, volatility of interest rate, volatility of real estate value, terminal growth rate, PBR, PSR etc.

Derivatives	Fair value is measured by models such as option model.	Correlation, etc.

Others	The fair value of the underlying asset, after calculating the fair value using the DCF model, etc., considering the price and volatility of the calculated underlying asset, is calculated using the binomial tree, which is commonly used valuation techniques in the market.	Stock price, volatility of underlying assets, etc.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


	Fair value measurement technique	Type	Significant unobservable inputs	Range(%)	Impact of changes in significant unobservable inputs on fair value measurement
Loans	DCF model and others		Discount rate	4.05%~6.58%	Fair value increases as discount rate decreases.
Loans	LSMC(Hull-White)		Volatility of stock	0.19%~0.24%	Fair value increases as volatility of stock increases.
			Volatility of interest rate	0.47%~0.91%	Fair value increases as volatility of interest rate increases.
			Discount rate	13.78%~21.92%	Fair value increases as discount rate decreases.
Derivative assets	Option valuation model and others	Equity related	Correlation coefficient	0.32~0.68	Variation of fair value increases as correlation coefficient increases.
Derivative liabilities	Option valuation model and others	Equity related	Correlation coefficient	0.32~0.68	Variation of fair value increases as correlation coefficient increases.
Equity securities, capital contributions, and beneficiary certificates	Binomial Tree		Discount rate	3.58%	Fair value increases as discount rate decreases.
	Binomial Tree		Stock prices, Volatility of underlying asset, Volatility of stocks	27.34%~76.22%	Variation of fair value increases as volatility of underlying asset and stock price increases.
	Risk-adjusted discount rate method (Tsiveriotis-Fernandes)		Discount rate	6.98%	Fair value increases as discount rate decreases.
	Risk-adjusted discount rate method (Tsiveriotis-Fernandes)		Volatility of stock	34.6%	Variation of fair value increases as volatility of stock increases.
	DCF model and others		Discount rate	5.08%~19.90%	Fair value increases as discount rate decreases.
			Terminal growth rate	0.00%, 1.00%	Fair value increases as terminal growth rate increases.
			Liquidation value	-1.00%~1.00%	Fair value increases as liquidation value increases.
	LSMC(Hull-White)		Discount rate	5.06%~6.86%	Fair value increases as discount rate decreases.
Others	Binomial Tree		Stock prices, Volatility of underlying asset	15.48%~76.22%	Variation of fair value increases as volatility of underlying asset and stock price increases.
			Discount rate	10.42%	Fair value increases as discount rate decreases.
			Growth rate	0.00%	Fair value increases as terminal growth rate increases

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


	For the year ended December 31, 2023
	Beginning balance		Business combination		Net income (loss) (*1)		Other comprehensive income			Purchases/ issuances		Disposals / settlements			Transfer to or out of Level 3 (*2)			Ending balance
Financial assets:
Financial assets at FVTPL
Debt securities		1,078		—		152		—			4,000		(1,000	)		—			4,230
Equity securities		307,851		10,628		10,632		—			62,638		(32,630	)		(5,840	)		353,279
Capital contributions		1,976,474		10,977		65,437		—			655,921		(249,163	)		—			2,459,646
Beneficiary certificates		1,458,776		—		3,534		—			280,435		(36,780	)		—			1,705,965
Loans		104,505		—		483		—			577,296		(626,282	)		—			56,002
Derivative assets		93,970		—		41,620		—			2,273		(8,725	)		—			129,138
Other foreign currency financial assets		41,679		—		729		—			—		—			—			42,408
Others		144,840		—		9,015		—			32,214		(2,795	)		—			183,274

Sub-total		4,129,173		21,605		131,602		—			1,614,777		(957,375	)		(5,840	)		4,933,942

Financial assets at FVTOCI
Equity securities		557,065		—		—		(6,564	)		343		(2,657	)		(23	)		548,164
Loans		—		—		—		—			139,567		(139,567	)		—			—

Sub-total		557,065		—		—		(6,564	)		139,910		(142,224	)		(23	)		548,164

Total		4,686,238		21,605		131,602		(6,564	)		1,754,687		(1,099,599	)		(5,863	)		5,482,106

Financial liabilities:
Financial liabilities at FVTPL
Derivative liabilities		9,449		—		1,994		—			—		(9,449	)		—			1,994

Total		9,449		—		1,994		—			—		(9,449	)		—			1,994

(*1)

For financial liabilities, positive numbers represent losses that increase balance and negative numbers represent gains that decrease balance. The gain amounting to 171,095 million Won for the year ended December 31, 2023, which is from financial assets and liabilities that the Group holds as at the end of the year.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	For the year ended December 31, 2022
	Beginning balance		Net income (loss) (*1)			Other comprehensive income		Purchases/ issuances			Disposals / settlements			Transfer to or out of Level 3 (*2)			Ending balance
Financial assets:
Financial assets at FVTPL
Debt securities		2,117		(40	)		—		—			(999	)		—			1,078
Equity securities		303,985		697			—		20,175			(16,974	)		(32	)		307,851
Capital contributions		1,287,723		103,376			—		703,160			(117,785	)		—			1,976,474
Beneficiary certificates		1,104,074		(2,922	)		—		98,420			259,204			—			1,458,776
Loans		213,635		17,544			—		802,092			(928,766	)		—			104,505
Derivative assets		29,348		64,359			—		582			(319	)		—			93,970
Other foreign currency financial assets		—		—			—		41,679			—			—			41,679
Others		96,191		16,744			—		40,836			(8,931	)		—			144,840

Sub-total		3,037,073		199,758			—		1,706,944			(814,570	)		(32	)		4,129,173

Financial assets at FVTOCI
Equity securities		581,455		—			2,084		2,357			(28,831	)		—			557,065

Total		3,618,528		199,758			2,084		1,709,301			(843,401	)		(32	)		4,686,238

Financial liabilities:
Financial liabilities at FVTPL
Derivative liabilities		4,641		8,058			—		(351	)		(2,899	)		—			9,449

Total		4,641		8,058			—		(351	)		(2,899	)		—			9,449

(*1)

For financial liabilities, positive numbers represent losses that increase balance and negative numbers represent gains that decrease balance. The gain amounting to 2,770 million Won for the year ended December 31, 2022, which is from financial assets and liabilities that the Group holds as at the end of the year.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(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 5,484,098 million Won and 4,695,688 million Won as of December 31, 2023 and 2022, respectively, equity instruments of 4,704,747 million Won and 3,196,703 million Won whose carrying amount are considered to represent the reasonable approximation of fair value are excluded from the sensitivity analysis.

The sensitivity on fluctuation of input variables by financial instruments as of December 31, 2023 and 2022 is as follows (Unit: Korean Won in millions):


	December 31, 2023
	Net income (loss)					Other comprehensive income (loss)
	Favorable		Unfavorable			Favorable		Unfavorable
Financial assets:
Financial assets at FVTPL
Derivative assets (*1)		88		(95	)		—		—
Loans (*2)		202		(199	)		—		—
Debt securities(*3)		21		(22	)		—		—
Equity securities (2) (3) (*4)		11,562		(8,953	)		—		—
Beneficiary certificates (*4)		722		(722	)		—		—
Others (*2)		4,098		(3,921	)		—		—
Financial assets at FVTOCI
Equity securities (3) (4)		—		—			28,020		(22,302	)

Total		16,693		(13,912	)		28,020		(22,302	)

Financial liabilities:
Financial liabilities at FVTPL
Derivative liabilities (*1)		10		(7	)		—		—

Total		10		(7	)		—		—

(*1)	Fair value changes of equity related derivatives assets and liabilities and equity-linked securities are calculated by increasing or decreasing correlation, which are major unobservable variables, by 10%, respectively.

(*2)	Fair value changes of equity securities are calculated by increasing or decreasing stock prices (-10%~10%) and volatility (-10%p~10%p). The stock prices and volatility are major unobservable variables.

(*3)	Fair value changes of equity securities are calculated by increasing or decreasing terminal growth rate (-0.5%p~1%p) and discount rate (-1%p~1%p) or liquidation value (-1%p~1%p). 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%.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	December 31, 2022
	Net income (loss)					Other comprehensive income (loss)
	Favorable		Unfavorable			Favorable		Unfavorable
Financial assets:
Financial assets at FVTPL
Derivative assets (*1)		2,453		(1,993	)		—		—
Loans (*2)		203		(200	)		—		—
Debt securities		1		—			—		—
Equity securities (2) (3) (*4)		10,146		(8,079	)		—		—
Beneficiary certificates (*4)		737		(737	)		—		—
Others (*2)		2,860		(2,790	)		—		—
Financial assets at FVTOCI		—		—			—		—
Equity securities (3) (4)		—		—			24,370		(17,579	)

Total		16,400		(13,799	)		24,370		(17,579	)

Financial liabilities:
Financial liabilities at FVTPL
Derivative liabilities (*1)		41		(39	)		—		—

Total		41		(39	)		—		—

(*1)

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

(*2)	Fair value changes of equity securities are calculated by increasing or decreasing stock prices (-10%~10%) and volatility (-10~10%). The stock prices and volatility are major unobservable variables.

(*3)	Fair value changes of equity securities are calculated by increasing or decreasing terminal growth rate (-0.5%~0.5%) and discount rate (-1~1%) or liquidation value (-1~1%). The growth rate, discount rate, and liquidation value are major unobservable variables.

(*4)

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(5)

Fair value and carrying amount of financial assets and liabilities that are recorded at amortized cost are as follows (Unit: Korean Won in millions):


	December 31, 2023
	Fair value								Carrying amount
	Level 1		Level 2		Level 3		Total		Carrying amount
Financial assets:
Securities at amortized cost		2,361,627		21,303,099		—		23,664,726		23,996,172
Loans and other financial assets at amortized cost		—		9,905,518		364,211,207		374,116,725		373,148,148
Financial liabilities:
Deposits due to customers		—		360,186,521		—		360,186,521		357,784,297
Borrowings		—		31,065,237		87,342		31,152,579		30,986,746
Debentures		—		40,504,019		—		40,504,019		41,239,245
Other financial liabilities (*)		—		24,584,447		609,620		25,194,067		25,780,550

(*)

Lease liabilities are excluded as of December 31, 2023.


	December 31, 2022
	Fair value								Carrying amount
	Level 1		Level 2		Level 3		Total		Carrying amount
Financial assets:
Securities at amortized cost		2,652,449		24,623,369		—		27,275,818		28,268,516
Loans and other financial assets at amortized cost		—		6,238,724		345,952,544		352,191,268		355,760,730
Financial liabilities:
Deposits due to customers		—		343,931,576		—		343,931,576		342,105,209
Borrowings		—		26,063,256		2,135,047		28,198,303		28,429,603
Debentures		—		42,918,411		—		42,918,411		44,198,486
Other financial liabilities (*)		—		21,244,664		536,209		21,780,873		22,492,705

(*)

Lease liabilities are excluded as of December 31, 2022.

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 and credit spread

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(6)

Financial instruments by category

Carrying amounts of financial assets and liabilities by each category are as follows (Unit: Korean Won in millions):


	December 31, 2023
Financial assets	Financial assets at FVTPL		Financial assets at FVTOCI		Financial assets at amortized cost		Derivatives assets (designated for hedging)		Total
Deposits		39,241		—		1,950,573		—		1,989,814
Securities		14,880,479		37,891,495		23,996,172		—		76,768,146
Loans		782,716		—		358,577,179		—		359,359,895
Derivative assets		5,798,329		—		—		26,708		5,825,037
Other financial assets		43,991		—		12,620,396		—		12,664,387

Total		21,544,756		37,891,495		397,144,320		26,708		456,607,279


	December 31, 2023
Financial liabilities	Financial liabilities at FVTPL		Financial liabilities at amortized cost		Derivatives liabilities (designated for hedging)		Total
Deposits due to customers		39,524		357,784,297		—		357,823,821
Borrowings		155,765		30,986,746		—		31,142,511
Debentures		—		41,239,245		—		41,239,245
Derivative liabilities		5,943,024		—		153,007		6,096,031
Other financial liabilities (*)		—		25,780,550		—		25,780,550

Total		6,138,313		455,790,838		153,007		462,082,158

(*)	Lease liabilities are excluded as of December 31, 2023.


	December 31, 2022
Financial assets	Financial assets at FVTPL		Financial assets at FVTOCI		Financial assets at amortized cost		Derivatives assets (designated for hedging)		Total
Deposits		34,995		—		2,994,672		—		3,029,667
Securities		10,676,985		33,085,080		28,268,516		—		72,030,581
Loans		899,228		—		343,918,560		—		344,817,788
Derivative assets		8,206,181		—		—		37,786		8,243,967
Other financial assets		43,184		—		8,847,497		—		8,890,681

Total		19,860,573		33,085,080		384,029,245		37,786		437,012,684


	December 31, 2022
Financial liabilities	Financial liabilities at FVTPL		Financial liabilities at amortized cost		Derivatives liabilities (designated for hedging)		Total
Deposits due to customers		35,161		342,105,209		—		342,140,370
Borrowings		12,113		28,429,603		—		28,441,716
Debentures		—		44,198,486		—		44,198,486
Derivative liabilities		8,905,125		—		202,911		9,108,036
Other financial liabilities (*)		—		22,492,707		—		22,492,707

Total		8,952,399		437,226,005		202,911		446,381,315

(*)	Lease liabilities are excluded as of December 31, 2022.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(7)

Income or expense from financial instruments by category

Income or expense from financial assets and liabilities by each category during the years ended December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023
	Interest income (expense)			Fees and commissions income (expense)		Reversal (provision) of credit loss			Gain or loss on transactions and valuation			Dividends, etc.		Total
Financial assets at FVTPL		192,094			514		—			488,486			222,357		903,451
Financial assets at FVTOCI		999,407			1,621		(16,542	)		(37,641	)		17,936		964,781
Securities at amortized cost		782,513			—		(5,549	)		—			—		776,964
Loans and other financial assets at amortized cost		18,667,540			578,387		(1,839,987	)		203,942			—		17,609,882
Financial liabilities at amortized cost		(11,887,127	)		1,247		—			—			—		(11,885,880	)
Net derivatives (designated for hedging)		—			—		—			15,678			—		15,678

Total		8,754,427			581,769		(1,862,078	)		670,465			240,293		8,384,876


	For the year ended December 31, 2022
	Interest income (expense)			Fees and commissions income (expense)			Reversal (provision) of credit loss			Gain or loss on transactions and valuation			Dividends, etc.		Total
Financial assets at FVTPL		106,698			(134	)		—			238,502			136,136		481,202
Financial assets at FVTOCI		632,615			1,606			827			(21,498	)		23,846		637,396
Securities at amortized cost		515,246			—			(3,151	)		—			—		512,095
Loans and other financial assets at amortized cost		13,399,990			600,902			(881,668	)		74,204			—		13,193,428
Financial liabilities at amortized cost		(5,950,277	)		2,094			—			—			—		(5,948,183	)
Net derivatives (designated for hedging)		—			—			—			78,822			—		78,822

Total		8,704,272			604,468			(883,992	)		370,030			159,982		8,954,760

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

12.	DERECOGNITION AND OFFSET OF FINANCIAL INSTRUMENTS

(1)	Derecognition of financial instruments

Transferred financial assets that do not meet the condition of derecognition in their entirety.

Bonds sold under repurchase agreements

The financial instruments that were disposed but the Group agreed to repurchase at the fixed amounts at the same time, so that they did not meet the conditions of derecognition, are as follows (Unit: Korean Won in millions):


		December 31, 2023		December 31, 2022
Assets transferred	Financial assets at FVTPL		238,461		214,577
	Financial assets at FVTOCI		556,583		583,198
	Securities at amortized cost		48,368		1,171,300

	Total		843,412		1,969,075

Related liabilities	Bonds sold under repurchase agreements		757,691		1,898,744

Securities loaned

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

December 31, 2023

December 31, 2022

Loaned to

Financial assets at FVTPL

Korean treasury and government bonds

625,398

—

The Korea Securities

Finance Corporation

Financial assets at FVTOCI

Korean treasury and government bonds

592,218

98,027

Korea Securities Depository

Liquidity of financial assets

As of December 31, 2023 and 2022, the consolidated structured companies issued asset-backed securities with loans and corporate bonds held by the Group as liquid assets, and the Group bear related risks through the purchase agreements or credit contributions. The transaction details of the transfer of the financial instrument are as follows:


		December 31, 2023		December 31, 2022
		Carrying amount (*)		Carrying amount (*)
Assets transferred	Financial assets at FVPL		—		49,808
	Loans at amortized cost		5,098,217		4,640,182
Related liabilities	Asset-backed borrowings		2,434,900		231,800
	Asset-backed bonds		1,487,895		1,209,364

(*)

The carrying amount is the amount before the allowance for bad debts.

On the other hand, the details of transferred financial assets that have not been removed, such as bonds sold under the repurchase agreement and loan securities, are also described in Note 18. The Group does not have financial instruments that are continuously involved.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(2)	The offset of financial assets and liabilities

The Group possesses both the uncollected domestic exchange receivables and the unpaid domestic exchange payable, which satisfy offsetting criteria of K-IFRS 1032. Therefore, the total number of uncollected domestic exchange receivables has been offset with a part of unpaid domestic exchange payables, and they have been disclosed in loans at amortized cost and other financial assets and other financial liabilities of the Group’s statements of financial position, respectively.

The Group possesses the derivative assets, derivative liabilities, receivable spot exchange and payable spot exchange that do not satisfy the offsetting criteria of K-IFRS 1032, but provide the Group under the circumstances of the trading party’s default, insolvency or bankruptcy, with the right of offsetting. Items such as cash collateral cannot satisfy the offsetting criteria of K-IFRS 1032, but in accordance with the collateral arrangements and under the circumstances of the trading party’s default, insolvency or bankruptcy, the net amount of derivative assets and derivative liabilities, receivable spot exchange and payable spot exchange can be offset.

The Group has entered into a resale and repurchase agreement and accounted it as a collateralized borrowing. The Group has also entered into a resale and purchase agreement and accounted it as a secured loans. The Group under the repurchase agreements has an offsetting right only upon the counterparty’s default, insolvency or bankruptcy; thus, the repurchase agreements are applied by the TBMA/ISMA Global Master Repurchase Agreement, which does not satisfy the offsetting criteria of K-IFRS 1032. The Group disclosed bonds sold under repurchase agreements as borrowings and bonds purchased under resale agreements as loan at amortized cost and other financial assets.

As of December 31, 2023 and 2022, the financial instruments to be offset and may be covered by master netting agreements and similar agreements are as follows (Unit: Korean Won in millions):


	December 31, 2023
	Gross amounts of recognized financial assets		Gross amounts of recognized financial assets setoff		Net amounts of consolidated financial assets presented		Related amounts not setoff in the consolidated statement of financial position				Net amounts
	Gross amounts of recognized financial assets		Gross amounts of recognized financial assets setoff		Net amounts of consolidated financial assets presented		Netting agreements and others		Cash collateral received and others		Net amounts
Financial assets:
Derivative assets (*1)		5,200,277		—		5,200,277		11,328,147		424,466		1,089,011
Receivable spot exchange (*2)		7,641,347		—		7,641,347		11,328,147		424,466		1,089,011
Bonds purchased under resale agreements (*2)		3,256,392		—		3,256,392		3,256,392		—		—
Domestic exchange settlement debits (2) (5)		49,034,521		48,587,951		446,570		—		—		446,570

Total		65,132,537		48,587,951		16,544,586		14,584,539		424,466		1,535,581

Financial liabilities:
Derivative liabilities (*1)		5,126,697		—		5,126,697		11,425,925		139,143		1,203,575
Payable spot exchange (*3)		7,641,946		—		7,641,946		11,425,925		139,143		1,203,575
Bonds sold under repurchase agreements (*4)		1,119,991		—		1,119,991		1,119,991		—		—
Domestic exchange settlement credits (3) (5)		49,974,648		48,587,951		1,386,697		1,367,709		—		18,988

Total		63,863,282		48,587,951		15,275,331		13,913,625		139,143		1,222,563

(*1)	The items include derivative assets and liabilities held for trading and designated for hedging.

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

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

(*4)	The items are included in borrowings.

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	December 31, 2022
	Gross amounts of recognized financial assets		Gross amounts of recognized financial assets setoff		Net amounts of consolidated financial assets presented		Related amounts not setoff in the consolidated statement of financial position				Net amounts
	Gross amounts of recognized financial assets		Gross amounts of recognized financial assets setoff		Net amounts of consolidated financial assets presented		Netting agreements and others		Cash collateral received and others		Net amounts
Financial assets:
Derivative assets (*1)		7,032,465		—		7,032,465		9,175,416		748,981		1,616,779
Receivable spot exchange (*2)		4,508,711		—		4,508,711		9,175,416		748,981		1,616,779
Bonds purchased under resale agreements (*2)		6,793,938		—		6,793,938		6,793,938		—		—
Domestic exchange settlement debits (2) (5)		39,787,371		39,209,452		577,919		—		—		577,919

Total		58,122,485		39,209,452		18,913,033		15,969,354		748,981		2,194,698

Financial liabilities:
Derivative liabilities (*1)		7,652,440		—		7,652,440		10,043,092		145,268		1,972,695
Payable spot exchange (*3)		4,508,615		—		4,508,615		10,043,092		145,268		1,972,695
Bonds sold under repurchase agreements (*4)		2,313,044		—		2,313,044		2,313,044		—		—
Domestic exchange settlement credits (3) (5)		43,841,373		39,209,452		4,631,921		2,504,062		—		2,127,859

Total		58,315,472		39,209,452		19,106,020		14,860,198		145,268		4,100,554

(*1)	The items include derivative assets and liabilities held for trading and designated for hedging.

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

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

(*4)	The items are included in borrowings.

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

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

13.	INVESTMENTS IN JOINT VENTURES AND ASSOCIATES

(1)	Investments in associates accounted for using the equity method of accounting are as follows:


		Percentage of ownership (%)
Joint ventures and associates (*4)	Main business	December 31, 2023		December 31, 2022		Location	Financial statements as of
Woori Bank
W Service Networks Co., Ltd. (1)(5)	Freight & staffing services		4.9		4.9	Korea	2023-11-30
Korea Credit Bureau Co., Ltd. (*2)	Credit information		9.9		9.9	Korea	2023-12-31
Korea Finance Security Co., Ltd. (1) (5)	Security service		15.0		15.0	Korea	2023-11-30
Wongwang Co., Ltd. (*3)	Wholesale and real estate		29.0		29.0	Korea	—
Sejin Construction Co., Ltd. (*3)	Construction		29.6		29.6	Korea	—
ARES-TECH Co., Ltd. (*3)	Electronic component manufacturing		23.4		23.4	Korea	—
Beomgyo.,Ltd. (*3)	Telecommunication equipment retail sales		23.1		23.1	Korea	—
NK Eng Co., Ltd. (*3)	Manufacturing		23.1		23.1	Korea	—
Woori Growth Partnerships New Technology Private Equity Fund(*8)	Other financial services		—		23.1	Korea	—
2016KIF-IMM Woori Bank Technology Venture Fund(*8)	Other financial services		—		20.0	Korea	—
K BANK Co., Ltd. (2)(5)	Finance		12.6		12.6	Korea	2023-11-30
Woori Bank-Company K Korea Movie Asset Fund (*8)	Other financial services		—		25.0	Korea	—
Partner One Value Up I Private Equity Fund	Other financial services		23.3		23.3	Korea	2023-12-31
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership	Other financial services		20.0		20.0	Korea	2023-12-31
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund	Other financial services		25.0		25.0	Korea	2023-12-31
LOTTE CARD Co., Ltd. (*5)	Credit card and installment financing		20.0		20.0	Korea	2023-09-30
Union Technology Finance Investment Association	Other financial services		29.7		29.7	Korea	2023-12-31
Dicustody Co., Ltd.(*2)	Other information technology and computer operation related services		1.0		1.0	Korea	2023-12-31
Orient Shipyard Co., Ltd. (*5)	Manufacture of sections for ships		22.7		22.7	Korea	2023-11-30
Joongang Network Solution Co.,Ltd. (*5)	Other information technology and computer operation related services		25.3		25.3	Korea	2023-09-30
Win Mortgage Co.,LTd. (1)(5)(*12)	Other financial services		4.5		—	Korea	2023-09-30
Together-Korea Government Private Pool Private Securities Investment Trust No. 3	Other financial services		100.0		100.0	Korea	2023-12-31
BTS 2nd Private Equity Fund	Other financial services		20.0		20.0	Korea	2023-12-31
STASSETS FUND III	Other financial services		28.3		28.3	Korea	2023-12-31

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


		Percentage of ownership (%)
Joint ventures and associates (*4)	Main business	December 31, 2023		December 31, 2022		Location	Financial statements as of
SF CREDIT PARTNERS, LLC(2)(12)	Other financial services		10.0		—	Korea	2023-12-31
Rea Company (5) (12)	Other financial services		24.5		—	Korea	2023-09-30
ARAM CMC Co.,Ltd. (5) (12)	Other financial services		20.0		—	Korea	2023-11-30
Woori Bank (*6)
Japanese Hotel Real Estate Private Equity Fund No.2	Other financial services		19.9		19.9	Korea	2023-12-31
Woori Seoul Beltway Private Special Asset Fund No.1	Trust and collective investment		25.0		25.0	Korea	2023-12-31
Woori General Private Securities Investment Trust(Bond) No.1 (*12)	Collective investment business		25.0		—	Korea	2023-12-31
Woori Short-term Bond Securities Investment Trust(Bond) ClassC-F	Collective investment business		15.0		27.9	Korea	2023-12-31
Woori Safe Plus General Type Private Investment Trust S-8(Bond)	Collective investment business		9.1		9.2	Korea	2023-12-31
Woori General Private Securities Investment Trust(Bond) No.2 (*12)	Collective investment business		27.3		—	Korea	2023-12-31
Woori Smart General Private Equity Investment Trust 1(bond)(*12)	Collective investment business		28.6		—	Korea	2023-12-31
Woori General Private Securities Investment Trust(Bond) No.3 (*12)	Collective investment business		27.8		—	Korea	2023-12-31
Woori Asset Global Partnership Fund No. 5(*12)	Collective investment business		57.7		—	Korea	2023-12-31
Woori Short Term Government and Special Bank Bond Active ETF(*12)	Collective investment business		20.8		—	Korea	2023-12-31
Woori 25-09 Corporate Bond(AA- or higher) Active ETF (*12)	Collective investment business		29.3		—	Korea	2023-12-31
Woori Financial Capital Co., Ltd.
WOORI TAERIM 1st Fund	Other financial services		25.6		25.6	Korea	2023-12-31
Portone-Cape Fund No.1	Other financial services		20.0		20.0	Korea	2023-12-31
KIWOOM WOORI Financial 1st Fund (7)(8)	Other financial services		—		9.1	Korea	—
DeepDive WOORI 2022-1 Financial Investment Fund (*7)	Other financial services		11.9		11.9	Korea	2023-12-31
Darwin Green Packaging Private Equity Fund	Other financial services		20.4		20.4	Korea	2023-12-31
DS Power Semicon Private Equity Fund (*8)	Other financial services		—		21.0	Korea	—
Koreawide partners 2nd Private Equity Fund	Other financial services		26.7		26.7	Korea	2023-12-31
Woori Investment Bank Co., Ltd. (*6)
Woori FirstValue Private Real Estate Fund No.2	Real estate business		12.0		12.0	Korea	2023-12-31
WooriG Real Infrastructure Blind General Type Private Placement Investment Trust	Investment trust and discretionary investment business		0.1		0.1	Korea	2023-12-31

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


		Percentage of ownership (%)
Joint ventures and associates (*4)	Main business	December 31, 2023		December 31, 2022		Location	Financial statements as of
Woori Asset Management Co. Ltd.
Woori Star50 feeder fund(H) (*8)	Collective investment business		—		17.9	Korea	—
Woori Together TDF 2025(*8)	Collective investment business		—		23.6	Korea	—
Woori Together TDF 2030	Collective investment business		28.0		23.8	Korea	2023-12-31
Woori Together OCIO Target Return Feeder fund (Balance Bond) (*12)	Collective investment business		20.4		—	Korea	2023-12-31
Woori Multi Return Private Securities Investment Trust 2(Balanced Bond)(8)(12)	Collective investment business		—		—	Korea	—
Woori Private Equity Asset Management Co., Ltd.
Australia Green Energy 1st PEF(*2)	Other financial services		4.0		4.0	Korea	2023-12-31
Aarden Woori Apparel 1st Private Equity Fund (*2)	Other financial services		0.5		0.5	Korea	2023-12-31
Woori Dyno 1st Private Equity Fund (*2)	Other financial services		19.6		19.6	Korea	2023-12-31
Woori Venture Partners Co., Ltd.
KTB-KORUS FUND(*9)	Asset Management		37.5		—	Korea	2023-12-31
KTB China Platform Fund(9)(10)(*11)	Asset Management		18.7		—	Korea	2023-12-31
KTBN Venture Fund No.7(9)(10)	Asset Management		20.1		—	Korea	2023-12-31
KTBN Venture Fund No.8(*10)	Asset Management		21.7		—	Korea	2023-12-31
KTBN Digital Contents Korea Fund No.9(9)(10)	Asset Management		30.0		—	Korea	2023-12-31
KTBN Media Contents Fund(9)(10)(*11)	Asset Management		15.0		—	Korea	2023-12-31
KTB China Synergy Fund(10)(11)	Asset Management		15.1		—	Korea	2023-12-31
NAVER-KTB Audio Contents Fund(*11)	Asset Management		1.0		—	Korea	2023-12-31
KTBN Venture Fund No.13(10)(11)	Asset Management		19.6		—	Korea	2023-12-31
KTBN Future Contents Fund(10)(11)	Asset Management		13.3		—	Korea	2023-12-31
KTBN Venture Fund No.16(*11)	Asset Management		10.3		—	Korea	2023-12-31
KTBN Venture Fund No.18(*11)	Asset Management		10.1		—	Korea	2023-12-31
KB-KTB Technology Venture Fund(*11)	Asset Management		18.2		—	Korea	2023-12-31
Woori 2022 Scaleup Venture Fund	Asset Management		20.0		—	Korea	2023-12-31
Woori 2022 Start-up Venture Fund	Asset Management		30.1		—	Korea	2023-12-31
KTB-NHN China Private Equity Fund(*9)	Asset Management		33.3		—	Korea	2023-12-31
KTBN GI Private Equity Fund(*11)	Asset Management		5.0		—	Korea	2023-12-31
Chirochem	Medical material Manufacturing		28.6		—	Korea	2023-12-31
Japanese Hotel Real Estate Private Equity Fund 1
Godo Kaisha Oceanos 1 (*5)	Other financial services		47.8		47.8	Japan	2023-10-31

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


		Percentage of ownership (%)
Joint ventures and associates (*4)	Main business	December 31, 2023		December 31, 2022		Location	Financial statements as of
Woori G Japan Private Placement Real Estate Master Investment Trust No.2
Woori Zip 1(*5)	Other financial services		62.4		64.0	Japan	2023-09-30
Woori Zip 2 (*5)	Other financial services		62.8		64.0	Japan	2023-09-30
Woori bank and Woori card Co., Ltd. (*6)
Dongwoo C & C Co., Ltd. (*3)	Construction		24.5		24.5	Korea	—
SJCO Co., Ltd. (*3)	Aggregate transportation and wholesale		29.8		29.8	Korea	—
G2 Collection Co., Ltd. (*3)	Wholesale and retail sales		29.2		29.2	Korea	—
KG Fashion Co., Ltd.(3)(5)(*12)	Manufacturing		20.8		—	Korea	2023-11-30
Kyesan Engineering Co., Ltd. (*3)	Construction		23.3		23.3	Korea	—
Good Software Lap Co., Ltd. (*3)	Service		29.4		29.4	Korea	—
Force TEC Co., Ltd. (*8)	Manufacturing		—		24.5	Korea	—
DAEA SNC Co., Ltd. (*3)	Wholesale and retail sales		25.5		25.5	Korea	—
PREXCO Co., Ltd. (*3)	Manufacturing		28.1		28.1	Korea	—
JiWon Plating Co., Ltd. (*3)	Plating		20.8		20.8	Korea	—
Youngdong Sea Food Co., Ltd. (*3)	Processed sea food manufacturing		24.5		24.5	Korea	—
KUM HWA Co., Ltd.	Telecommunication equipment retail sales		20.1		20.1	Korea	2023-12-31
Jinmyung Plus Co., Ltd.(*5)	Manufacturing		21.3		21.3	Korea	2023-09-30
Woori bank and Woori Financial Capital Co., Ltd. (*6)
JC Assurance No.2 Private Equity Fund	Other financial services		23.5		23.5	Korea	2023-12-31
Dream Company Growth no.1 PEF	Other financial services		27.8		27.8	Korea	2023-12-31
HMS-Oriens 1st Fund	Other financial services		22.8		22.8		2023-12-31
Woori G Senior Loan Private Placement Investment Trust No.1	Collective investment business		21.7		21.7	Korea	2023-12-31
Genesis Eco No.1 Private Equity Fund	Other financial services		29.0		29.0	Korea	2023-12-31
Paratus Woori Material Component Equipment joint venture company	Other financial services		29.9		29.9	Korea	2023-12-31
Midas No. 8 Private Equity Joint Venture Company	Other financial services		28.5		28.5	Korea	2023-12-31
Orchestra Private Equity Fund IV	Other financial services		28.2		28.2	Korea	2023-12-31
Synaptic Green No.1 PEF	Other financial services		21.1		21.1	Korea	2023-12-31
IGEN2023No. 1 Private Equity Fund	Other financial services		24.8		24.8	Korea	2023-12-31
PCC-Woori LP Secondary Fund	Other financial services		38.9		38.8	Korea	2023-12-31
Synaptic Future Growth Private Equity Fund 1 (*12)	Other financial investment		23.8		—	Korea	2023-12-31

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Percentage of ownership (%)

Joint ventures and associates (*4)

Main business

December 31,
2023

December 31,
2022

Location

Financial
statements as of

Woori Bank and Woori Asset Management Co. Ltd.(*6)

Woori BIG2 Plus Securities Investment Trust(Balanced Bond)

Collective investment business

14.1

23.1

Korea

2023-12-31

Woori Bank and Woori Private Equity Asset Management Co., Ltd. (*6)

Woori-Q Corporate Restructuring Private Equity Fund(*13)

Other financial services

32.4

35.6

Korea

2023-12-31

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

Woori-Shinyoung Growth-Cap Private Equity Fund I

Other financial services

35.0

Korea

2023-12-31

NH Woori Newdeal Growth Alpha Private Equity Fund 1(*12)

Other financial services

32.7

—

Korea

2023-12-31

(*1)	Most of the significant business transactions of associates are with the Group as of December 31, 2023 and 2022.

(*2)	The Group can participate in decision-making body and exercise significant influence over financial policies and operational policies decision making of the associates.

(*3)	There is no investment balance as of December 31, 2023 and 2022.

(*4)	Woori G Oncorp Corporate support of Major Industry General Type Private Placement Investment Trust (Type 2) and other 12 joint ventures and associates can exercise significant influence but was classified as an item measured at fair value through profit or loss.

(*5)

The equity method was applied using the most recent financial statements available from the settlement date because no financial statements were available at the end of the reporting period and the significant transactions or events that occurred between the end of the reporting period of the associate and the end of the reporting period of the subsidiary were duly reflected.

(*6)	Two or more subsidiaries may invest or operate to exert significant influence on the decision-making process for activities related to the investee.

(*7)	The Group can participate as a co-operator to exert significant influence.

(*8)	It was excluded from associates in current year.

(*9)	It has been liquidating as of December 31, 2023.

(*10)

It was excluded from associates during the period.

(*11)

The Group classified it as an associate because it has significant influence as a general partner of the investment association.

(*12)

It was added to associates in current year.

(*13)

It was classified as an associate due to holding of voting rights according to the initial investment agreement ratio.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(2)	Changes in the carrying value of investments in associates accounted for using the equity method of accounting are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023
	Acquisition cost		January 1, 2023		Share of profits(losses) and others			Acquisition		Business combination		Disposal/ Reclassification			Dividends			Change in capital			December 31, 2023
W Service Networks Co., Ltd.		108		208		13			—		—		—			(5	)		—			216
Korea Credit Bureau Co., Ltd.		3,313		5,709		814			—		—		—			(90	)		—			6,433
Korea Finance Security Co., Ltd.		3,267		2,374		(99	)		—		—		—			—			1,010			3,285
Woori Growth Partnerships New Technology Private Equity Fund		—		10,889		(51	)		—		—		(10,838	)		—			—			—
2016KIF-IMM Woori Bank Technology Venture Fund		—		9,474		539			—		—		(10,013	)		—			—			—
K BANK Co., Ltd.		236,232		247,789		5,327			—		—		—			—			6,936			260,052
Woori Bank-Company K Korea Movie Asset Fund		—		239		52			—		—		(103	)		(188	)		—			—
Partner One Value Up I Private Equity Fund		5,039		4,278		(1,048	)		—		—		—			—			—			3,230
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		4,356		10,285		1,162			—		—		(3,200	)		—			—			8,247
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		4,436		4,355		—			82		—		—			—			—			4,437
LOTTE CARD Co.,Ltd.		346,810		514,131		91,533			—		—		—			(13,199	)		(5,073	)		587,392
Union Technology Finance Investment Association		13,449		14,462		(1,004	)		—		—		(1,188	)		—			—			12,270
Dicustody Co., Ltd.		1		1		—			—		—		—			—			—			1
Orient Shipyard Co., Ltd.(*)		—		—		—			—		—		—			—			—			—
Joongang Network Solution Co.,Ltd.		—		—		1			—		—		—			—			87			88
Win Mortgage Co.,LTd.		23		—		84			23		—		—			(2	)		—			105
Together-Korea Government Private Pool Private Securities Investment Trust No.3		10,000		10,243		297			—		—		—			—			—			10,540
BTS 2nd Private Equity Fund		5,226		2,881		(243	)		2,200		—		—			—			—			4,838
STASSETS FUND III		9,000		1,230		(324	)		7,500		—		—			—			—			8,406
SF CREDIT PARTNERS, LLC		13,059		—		99			13,059		—		—			—			(313	)		12,845
Japanese Hotel Real Estate Private Equity Fund No.2		3,174		2,855		86			—		—		—			(133	)		(120	)		2,688
Woori Seoul Beltway Private Special Asset Fund No.1		12,464		9,874		451			2,709		—		—			(444	)		—			12,590
Woori General Private Securities Investment Trust(Bond) No.1		50,000		—		1,686			50,000		—		—			—			—			51,686
Woori Short-term Bond Securities Investment Trust(Bond) ClassC-F		100,000		112,025		7,670			—		—		(10,352	)		(3,779	)		—			105,564
Woori Safe Plus General Type Private Investment Trust S-8(Bond)		10,000		10,182		507			—		—		—			(359	)		—			10,330
Woori General Private Securities Investment Trust(Bond) No.2		30,000		—		829			30,000		—		—			—			—			30,829
Woori Smart General Private Equity Investment Trust 1(bond)		40,000		—		1,135			40,000		—		—			—			—			41,135
Woori General Private Securities Investment Trust(Bond) No.2		50,000		—		1,205			50,000		—		—			—			—			51,205
Woori Asset Global Partnership Fund No.5		22,500		—		(429	)		22,500		—		—			—			—			22,071
WOORI TAERIM 1st Fund		1,100		988		—			—		—		—			—			—			988
Portone-Cape Fund No.1		340		464		(19	)		—		—		—			—			—			445
KIWOOM WOORI Financial 1st Fund		—		953		(10	)		—		—		(943	)		—			—			—
DeepDive WOORI 2021-1 Financial Investment Fund		222		878		1,128			—		—		(678	)		(92	)		—			1,236
Darwin Green Packaging Private Equity Fund		4,000		3,945		92			—		—		—			(80	)		—			3,957
DS Power Semicon Private Equity Fund		—		2,976		495			—		—		(2,971	)		(500	)		—			—
Koreawide partners 2nd Private Equity Fund		20,000		20,000		(765	)		—		—		—			—			—			19,235

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	For the year ended December 31, 2023
	Acquisition cost		January 1, 2023		Share of profits(losses) and others			Acquisition		Business combination		Disposal/ Reclassification			Dividends			Change in capital		December 31, 2023
Woori FirstValue Private Real Estate Fund No.2		9,000		558		2			—		—		—			—			—		560
WooriG Real Infrastructure Blind General Type Private Placement Investment Trust		52		102		4			—		—		(47)			(4)			—		55
Woori Star50 feeder fund(H)		—		126		(12)			—		—		(114)			—			—		—
Woori Together TDF 2025		—		1,990		116			—		—		(2,106)			—			—		—
Woori Together TDF 2030		3,000		2,033		291			1,000		—		—			—			—		3,324
Woori Together OCIO Target Return Feeder fund (Balance Bond)		10,000		—		348			—		—		10,028			—			—		10,376
Australia Green Energy 1st PEF		4,913		4,858		(47)			—		—		—			—			—		4,811
Aarden Woori Apparel 1st Private Equity Fund		100		97		36			—		—		—			—			—		133
Woori Dyno 1st Private Equity Fund		2,000		1,994		364			—		—		—			—			—		2,358
KTB-KORUS FUND		3,626		—		(267)			—		3,626		—			—			—		3,359
KTB China Platform Fund		17,023		—		(964)			—		17,023		—			—			—		16,059
KTBN Venture Fund No.7		16,972		—		(225)			—		16,972		—			(703)			—		16,044
KTBN Venture Fund No.8		3,325		—		(814)			—		3,325		—			—			—		2,511
KTBN Digital Contents Korea Fund No.9		5,329		—		268			—		5,329		—			—			—		5,597
KTBN Media Contents Fund		330		—		(20)			—		330		—			(27)			—		283
KTB China Synergy Fund		21,629		—		(1,224)			—		21,629		—			—			—		20,405
NAVER-KTB Audio Contents Fund		284		—		4			—		284		—			—			—		288
KTBN Venture Fund No.13		13,279		—		3,407			—		13,279		—			(2,528)			—		14,158
KTBN Future Contents Fund		3,892		—		669			—		3,892		—			—			—		4,561
KTBN Venture Fund No.16		17,546		—		1,015			—		17,546		—			—			—		18,561
KTBN Venture Fund No.18		26,308		—		662			2,850		23,458		—			—			—		26,970
KB-KTB Technology Venture Fund		7,755		—		(155)			2,000		5,755		—			—			—		7,600
WOORI 2022 Scaleup Venture Fund		14,000		—		(414)			13,645		355		—			(8)			—		13,578
WOORI 2022 Start-up Venture Fund		2,564		—		(131)			—		2,564		—			—			—		2,433
KTB-NHN China Private Equity Fund		1,272		—		(103)			—		1,272		—			(1,024)			(142)		3
KTBN GI Private Equity Fund		189		—		392			—		189		—			—			36		617
Chirochem		102		—		—			—		102		—			—			—		102
Godo Kaisha Oceanos 1		10,800		8,788		92			—		—		—			(748)			(154)		7,978
Woori Zip 1		8,706		8,690		(127)			—		—		(548)			—			(386)		7,629
Woori Zip 2		8,411		12,180		(107)			—		—		(844)			—			(534)		10,695
KG Fashion Co., Ltd.(*)		—		—		—			—		—		—			—			—		—
KUM HWA Co., Ltd. (*)		—		—		—			—		—		—			—			—		—
Jinmyung Plus Co., Ltd.		—		10		4			—		—		—			—			—		14
JC Assurance No.2 Private Equity Fund (*)		29,349		—		—			—		—		—			—			—		—
Dream Company Growth no.1 PEF		7,153		7,861		362			—		—		—			(414)			—		7,809
HMS-Oriens 1st Fund		12,000		13,252		778			—		—		—			—			—		14,030
Woori G Senior Loan Private Placement Investment Trust No.1		75,114		81,861		3,341			—		—		(5,975)			(3,637)			—		75,590
Genesis Eco No.1 Private Equity Fund		12,000		11,216		(274)			—		—		—			—			—		10,942
Paratus Woori Material Component Equipment joint venture company		17,700		17,250		(271)			—		—		—			—			—		16,979
Midas No. 8 Private Equity Joint Venture Company		18,537		18,713		282			—		—		—			(530	)		—		18,465
Orchestra Private Equity Fund IV		9,700		9,698		457			—		—		(178	)		(422	)		—		9,555
Synaptic Green No.1 PEF		8,000		7,793		(182	)		—		—		—			—			—		7,611
IGEN2022No. 1 Private Equity Fund		7,422		8,010		336			—		—		—			(363	)		—		7,983
PCC-Woori LP Secondary Fund		10,435		12,984		(2,450	)		—		—		(4	)		—			—		10,530
Synaptic Future Growth Private Equity Fund		7,295		—		(226	)		7,295		—		—			—			—		7,069

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	For the year ended December 31, 2023
	Acquisition cost		January 1, 2023		Share of profits(losses) and others			Acquisition		Business combination		Disposal/ Reclassification			Dividends			Change in capital		December 31, 2023
Woori-Q Corporate Restructuring Private Equity Fund		17,441		27,536		2,708			369		—		(10,330	)		—			—		20,283
Woori-Shinyoung Growth-Cap Private Equity Fund I		17,018		43,274		(9,793	)		—		—		—			—			—		33,481
NH Woori Newdeal Growth Alpha Private Equity Fund 1		34,006		—		(1,019	)		34,006		—		—			—			—		32,987
Woori BIG2 Plus Securities Investment Trust(Balanced Bond)		2,200		1,074		543			2,000		—		(1,074	)		—			—		2,543
Woori Short Term Government and Special Bank Bond Active ETF		12,008		—		103			—		—		12,183			—			—		12,286
Woori 25-09 Corporate Bond(AA- or higher) Active ETF		29,001		—		820			29,001		—		—			—			—		29,821

		1,536,905		1,305,636		109,792			310,239		136,930		(39,295	)		(29,279	)		1,347		1,795,370

(*)

The amount for which no loss was recognized for associates due to discontinuation of the equity method was 2 million Won for KUM HWA Co., Ltd., 28 million Won for Orient Shipyard Co., Ltd.,120 million Won in KG FASHION CO., LTD., 371 million Won in JC Assurance No.2 Private Equity Fund and the accumulated amount is 4 million Won for KUM HWA Co., Ltd., 28 million Won for Orient Shipyard Co.,Ltd., 120 million Won in KG FASHION CO., LTD., 371 million Won in JC Assurance No.2 Private Equity Fund.


	For the year ended December 31, 2022
	Acquisition cost		January 1, 2022		Share of profits(losses) and others			Acquisition		Disposal/ Reclassification			Dividends			Change in capital			December 31, 2022
W Service Networks Co., Ltd.		108		183		29			—		—			(4	)		—			208
Korea Credit Bureau Co., Ltd.		3,313		9,423		(3,714	)		—		—			—			—			5,709
Korea Finance Security Co., Ltd.		3,267		3,101		(727	)		—		—			—			—			2,374
Woori Growth Partnerships New Technology Private Equity Fund		12,942		12,448		490			—		(2,049	)		—			—			10,889
2016KIF-IMM Woori Bank Technology Venture Fund		7,594		12,630		(1,619	)		—		(801	)		(736	)		—			9,474
K BANK Co., Ltd.		236,232		239,493		11,854			—		—			—			(3,558	)		247,789
Woori Bank-Company K Korea Movie Asset Fund		—		345		71			—		—			(177	)		—			239
Partner One Value Up I Private Equity Fund		5,039		6,576		(2,298	)		—		—			—			—			4,278
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		7,556		11,153		1,312			—		(2,180	)		—			—			10,285
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		4,355		4,254		1			100		—			—			—			4,355
LOTTE CARD Co.,Ltd.		346,810		458,295		58,400			—		—			(12,960	)		10,396			514,131
Together-Korea Government Private Pool Private Securities Investment Trust No. 3		10,000		10,070		173			—		—			—			—			10,243
Genesis Environmental Energy Company 1st Private Equity Fund		—		4,126		(41	)		—		(3,738	)		(347	)		—			—
Union Technology Finance Investment Association		14,637		12,388		187			2,250		(363	)		—			—			14,462
Dicustody Co., Ltd.		1		1		—			—		—			—			—			1
Orient Shipyard Co., Ltd.		—		—		—			—		—			—			—			—
BTS 2nd Private Equity Fund		3,026		—		(145	)		3,026		—			—			—			2,881
STASSETS FUND III		1,500		—		(270	)		1,500		—			—			—			1,230
Japanese Hotel Real Estate Private Equity Fund No.2		3,174		3,196		194			—		—			(299	)		(236	)		2,855

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	For the year ended December 31, 2022
	Acquisition cost		January 1, 2022		Share of profits(losses) and others			Acquisition		Disposal/ Reclassification			Dividends			Change in capital			December 31, 2022
Woori Seoul Beltway Private Special Asset Fund No.1		9,791		7,551		246			2,312		—			(235	)		—			9,874
Woori Multi-Return Securities Investment Trust 3 (Balanced Bond)		—		10,023		—			—		(9,950	)		(73	)		—			—
Woori Short-term Bond Securities Investment Trust(Bond) ClassC-F		110,000		151,822		2,312			50,000		(90,137	)		(1,972	)		—			112,025
Woori Safe Plus General Type Private Investment Trust S-8(Bond)		10,000		—		230			10,000		—			(48	)		—			10,182
WOORI TAERIM 1st Fund		1,100		991		(3	)		—		—			—			—			988
Portone-Cape Fund No.1		340		489		(25	)		—		—			—			—			464
KIWOOM WOORI Financial 1st Investment Fund		1,000		973		(20	)		—		—			—			—			953
DeepDive WOORI 2021-1 Financial Investment Fund		900		993		(12	)		—		(100	)		(3	)		—			878
Darwin Green Packaging Private Equity Fund		4,000		3,957		388			—		—			(400	)		—			3,945
DS Power Semicon Private Equity Fund		3,000		—		245			3,000		—			(269	)		—			2,976
Koreawide partners 2nd Private Equity Fund		20,000		—		—			20,000		—			—			—			20,000
Woori FirstValue Private Real Estate Fund No.2		9,000		763		(6	)		—		(199	)		—			—			558
WooriG Real Infrastructure Blind General Type Private Placement Investment Trust		100		100		2			—		—			—			—			102
Woori BIG2 Plus Securities Investment Trust(Balanced Bond)		1,200		—		(161	)		—		1,235			—			—			1,074
Woori Together TDF 2025		2,000		—		(202	)		—		2,192			—			—			1,990
Woori Together TDF 2030		2,000		—		(214	)		—		2,247			—			—			2,033
WOORI Star50 feeder fund(H)		200		—		(5	)		—		131			—			—			126
Woori Hanhwa Eureka Private Equity Fund		—		327		(48	)		—		(164	)		(115	)		—			—
Aarden Woori Apparel 1st Private Equity Fund		100		99		(2	)		—		—			—			—			97
Woori Dyno 1st Private Equity Fund		2,000		—		(6	)		2,000		—			—			—			1,994
Australia Green Energy 1st PEF		4,913		—		(55	)		4,913		—			—			—			4,858
Godo Kaisha Oceanos 1		10,800		9,905		84			—		—			(1,049	)		(152	)		8,788
Woori Zip 1		9,254		10,496		(138	)		—		(873	)		—			(795	)		8,690
Woori Zip 2		12,928		14,732		(127	)		—		(1,309	)		—			(1,116	)		12,180
Force TEC Co., Ltd. (*)		—		—		56			—		—			—			(56	)		—
KUM HWA Co., Ltd. (*)		—		—		—			—		—			—			—			—
Jinmyung Plus Co., Ltd.		—		—		10			—		—			—			—			10
JC Assurance No.2 Private Equity Fund		29,349		17,728		(17,728	)		—		—			—			—			—
Dream Company Growth no.1 PEF		7,412		7,914		418			—		—			(471	)		—			7,861
HMS-Oriens 1st Fund		12,000		12,007		1,245			—		—			—			—			13,252
WooriG Senior Loan General Type Private Investment Trust No.1		80,268		88,029		3,788			14,073		(20,322	)		(3,707	)		—			81,861
Genesis Eco No.1 Private Equity Fund		12,000		11,120		(99	)		195		—			—			—			11,216

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	For the year ended December 31, 2022
	Acquisition cost		January 1, 2022		Share of profits(losses) and others			Acquisition		Disposal/ Reclassification			Dividends			Change in capital		December 31, 2022
Paratus Woori Material Component Equipment joint venture company		17,700		17,493		(243	)		—		—			—			—		17,250
Midas No. 8 Private Equity Joint Venture Company		18,735		18,968		275			—		—			(530	)		—		18,713
Orchestra Private Equity Fund IV		9,878		—		197			10,000		(122	)		(377	)		—		9,698
Synaptic Green No.1 PEF		8,000		—		(207	)		8,000		—			—			—		7,793
IGEN2022No. 1 Private Equity Fund		7,822		—		650			8,000		(475	)		(165	)		—		8,010
PCC-Woori LP Secondary Fund		10,440		12,350		674			3,440		(3,480	)		—			—		12,984
Woori High Plus Short-term High Graded ESG Bond Sec Feeder Inv Trust 1		—		73,787		—			—		(73,598	)		(189	)		—		—
Woori-Q Corporate Restructuring Private Equity Fund		27,063		46,155		(288	)		536		(18,867	)		—			—		27,536
Woori-Shinyoung Growth-Cap Private Equity Fund I		17,018		28,713		14,561			—		—			—			—		43,274

		1,131,865		1,335,167		69,689			143,345		(222,922	)		(24,126	)		4,483		1,305,636

(*)

As a result of discontinuation of the equity method, related companies’ losses amount not recognized is 665 million Won for Force TEC Co., Ltd. 3,743 million Won for Orient Shipyard Co., Ltd. and 0.2 million Won for KUM HWA Co., Ltd. and cumulated amount is 1,462 million Won for Force TEC Co., Ltd. 3,743 million Won for Orient Shipyard Co., Ltd. and 2 million Won for KUM HWA Co., Ltd.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


	December 31, 2023
	Assets		Liabilities		Operating revenue			Net income (loss)			Other comprehensive income(loss)			Total comprehensive income(loss)
W Service Networks Co., Ltd.		6,887		2,496		19,350			1,069			—			1,069
Korea Credit Bureau Co., Ltd.		131,164		68,756		163,707			8,012			—			8,012
Korea Finance Security Co., Ltd.		36,185		14,287		44,709			(464	)		6,730			6,266
K BANK Co., Ltd.		20,799,599		18,903,298		826,894			49,853			47,885			97,738
Partner One Value Up I Private Equity Fund		14,182		293		(4,107	)		(4,505	)		—			(4,505	)
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		41,533		305		6,501			5,823			—			5,823
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		15,754		100		2			(388	)		—			(388	)
LOTTE CARD Co., Ltd. (*1)		22,329,308		19,191,007		1,937,383			363,673			(19,888	)		343,785
Union Technology Finance Investment Association		41,543		233		2,261			(838	)		—			(838	)
Dicustody Co., Ltd.		92		—		—			(3	)		—			(3	)
Orient Shipyard Co., Ltd.		10,708		27,225		—			(124	)		—			(124	)
Joongang Network Solution Co.,Ltd.		1,505		3,156		5,758			5			—			5
Win Mortgage Co.,LTd.		3,518		1,197		9,309			378			—			378
Together-Korea Government Private Pool Private Securities Investment Trust No. 3		10,543		1		227			222			—			222
BTS 2nd Private Equity Fund		25,030		837		4			(1,213	)		—			(1,213	)
STASSETS FUND III		30,014		312		95			(1,145	)		—			(1,145	)
SF CREDIT PARTNERS, LLC		149,157		25,996		7,618			(4,610	)		(2,819	)		(7,429	)
Rea Company		2,248		3,736		802			(694	)		—			(694	)
ARAM CMC Co.,Ltd.		669		485		1,005			(254	)		—			(254	)
Japanese Hotel Real Estate Private Equity Fund No.2		13,541		12		54			46			(602	)		(556	)
Woori Seoul Beltway Private Special Asset Fund No.1		50,362		2		1,858			1,805			—			1,805
Woori General Private Securities Investment Trust(Bond) No.1		414,760		208,014		12,617			6,746			—			6,746
Woori Short-term Bond Securities Investment Trust(Bond) ClassC-F		828,793		126,879		34,607			31,283			—			31,283
Woori Safe Plus General Type Private Investment Trust S-8(Bond)		113,413		6		4,774			4,542			—			4,542
Woori General Private Securities Investment Trust(Bond) No.2		224,205		111,165		5,767			3,040			—			3,040
Woori Smart General Private Equity Investment Trust 1(bond)		289,553		145,580		7,373			3,973			—			3,973
Woori General Private Securities Investment Trust(Bond) No.3		532,139		347,809		9,304			4,342			—			4,342
Woori Asset Global Partnership Fund No.5		38,537		281		—			(744	)		—			(744	)
WOORI TAERIM 1st Fund		4,045		183		—			—			—			—
Portone-Cape Fund No.1		2,324		100		—			(103	)		—			(103	)
DeepDive WOORI 2021-1 Financial Investment Fund		10,400		19		9,607			9,467			—			9,467
Darwin Green Packaging Private Equity Fund		19,390		—		759			451			—			451
Koreawide partners 2nd Private Equity Fund		75,064		2,931		—			(2,831	)		—			(2,831	)
Woori FirstValue Private Real Estate Fund No.2		67,024		62,357		32			18			—			18
WooriG Real Infrastructure Blind General Type Private Placement Investment Trust		114,909		92		6,053			4,892			—			4,892
Woori Together TDF 2030		11,944		61		2,528			1,017			—			1,017
Woori Together OCIO Target Return Feeder fund (Balance Bond)		50,831		1		2,446			2,444			—			2,444
Australia Green Energy 1st PEF		121,454		24		508			(1,189	)		—			(1,189	)
Aarden Woori Apparel 1st Private Equity Fund		28,219		90		1			(332	)		—			(332	)
Woori Dyno 1st Private Equity Fund		12,068		43		2,053			1,886			—			1,886

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	December 31, 2023
	Assets		Liabilities		Operating revenue			Net income (loss)			Other comprehensive income(loss)			Total comprehensive income(loss)
KTB-KORUS FUND		8,957		1		127			(712	)		—			(712	)
KTB China Platform Fund		85,909		13		2,411			(5,160	)		—			(5,160	)
KTBN Venture Fund No.7		79,871		—		6,420			508			—			508
KTBN Venture Fund No.8		11,758		207		2,359			(4,559	)		—			(4,559	)
KTBN Digital Contents Korea Fund No.9		20,257		1,599		3,030			(1,142	)		—			(1,142	)
KTBN Media Contents Fund		1,887		—		199			(35	)		—			(35	)
KTB China Synergy Fund		145,464		9,977		23,055			(8,686	)		—			(8,686	)
NAVER-KTB Audio Contents Fund		29,419		652		1,017			237			—			237
KTBN Venture Fund No.13		72,943		737		21,662			18,507			—			18,507
KTBN Future Contents Fund		34,696		486		7,394			4,776			—			4,776
KTBN Venture Fund No.16		182,850		1,875		40,201			11,133			—			11,133
KTBN Venture Fund No.18		268,437		2,526		31,543			8,036			—			8,036
KB-KTB Technology Venture Fund		42,046		246		2,055			(1,076	)		—			(1,076	)
WOORI 2022 Scaleup Venture Fund		68,626		826		504			(2,758	)		—			(2,758	)
WOORI 2022 Start-up Venture Fund		8,237		156		42			(576	)		—			(576	)
KTB-NHN China Private Equity Fund		16		7		946			(315	)		(319	)		(634	)
KTBN GI Private Equity Fund		12,391		45		—			7,146			712			7,858
Chirochem		732		375		4,215			148			—			148
Godo Kaisha Oceanos 1		62,021		45,334		2,765			192			—			192
Woori Zip 1		44,448		31,702		2,066			(198	)		—			(198	)
Woori Zip 2		62,642		45,012		3,023			(167	)		—			(167	)
KG Fashion Co., Ltd.		2,559		3,022		943			(569	)		—			(569	)
KUM HWA Co., Ltd.		4		167		—			—			—			—
Jinmyung Plus Co., Ltd.		519		454		146			(3	)		—			(3	)
JC Assurance No.2 Private Equity Fund		121,596		8		—			(628	)		—			(628	)
Dream Company Growth no.1 PEF		28,366		255		1,490			1,300			—			1,300
HMS-Oriens 1st Fund		61,498		1		3,957			3,408			—			3,408
Woori G Senior Loan Private Placement Investment Trust No.1		349,154		22		17,759			16,726			—			16,726
Genesis Eco No.1 Private Equity Fund		38,064		314		—			(947	)		—			(947	)
Paratus Woori Material Component Equipment joint venture company		58,298		1,510		—			(906	)		—			(906	)
Midas No. 8 Private Equity Joint Venture Company		65,063		242		1,956			1,002			—			1,002
Orchestra Private Equity Fund IV		34,041		122		1,680			1,172			—			1,172
Synaptic Green No.1 PEF		36,325		175		4			(867	)		—			(867	)
IGEN2022No. 1 Private Equity Fund		32,255		124		1,847			1,350			—			1,350
PCC-Woori LP Secondary Fund		27,773		668		908			(6,350	)		—			(6,350	)
Synaptic Future Growth Private Equity Fund 1		30,049		301		2			(951	)		—			(951	)
Woori-Q Corporate Restructuring Private Equity Fund		63,265		456		4,945			3,018			—			3,018
Woori-Shinyoung Growth-Cap Private Equity Fund I		97,265		1,522		(26,435	)		(27,768	)		—			(27,768	)
NH Woori Newdeal Growth Alpha Private Equity Fund 1		100,215		1,588		2			(3,605	)		—			(3,605	)
Woori BIG2 Plus Securities Investment Trust(Balanced Bond)		16,630		5		1,383			1,383			—			1,383
Woori 25-09 Corporate Bond(AA- or higher) Active ETF		133,729		32,028		3,006			2,831			—			2,831
Woori Short Term Government and Special Bank Bond Active ETF		62,185		3,212		1,222			978			—			978

(*1) The amount is after reflecting the fair value adjustment that occurred when acquiring the shares and the adjustments that occurred by difference of accounting policies with the Group.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	December 31, 2022
	Assets		Liabilities		Operating revenue			Net income (loss)			Other comprehensive income(loss)			Total comprehensive income(loss)
W Service Networks Co., Ltd.		7,052		2,825		19,697			1,215			—			1,215
Korea Credit Bureau Co., Ltd.		155,165		100,065		144,907			13,809			—			13,809
Korea Finance Security Co., Ltd.		28,792		12,964		47,043			(3,856	)		—			(3,856	)
Woori Growth Partnerships New Technology Private Equity Fund		47,394		208		2,978			2,185			—			2,185
2016KIF-IMM Woori Bank Technology Venture Fund		47,979		609		665			(7,839	)		—			(7,839	)
K BANK Co., Ltd.		16,694,289		14,896,426		491,880			91,059			(32,156	)		58,903
Woori Bank-Company K Korea Movie Asset Fund (*1)		989		33		462			324			—			324
Partner One Value Up I Private Equity Fund		18,395		—		(9,431	)		(9,831	)		—			(9,831	)
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		51,804		385		8,092			7,288			—			7,288
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		15,811		95		1			(383	)		—			(383	)
LOTTE CARD Co., Ltd. (*2)		19,983,059		17,179,093		1,925,577			268,096			43,162			311,258
Together-Korea Government Private Pool Private Securities Investment Trust No. 3		10,246		1		218			170			—			170
Union Technology Finance Investment Association		48,991		299		2,300			632			—			632
Dicustody Co., Ltd.		95		—		—			(3	)		—			(3	)
Orient Shipyard Co., Ltd.		10,832		27,225		—			(16,467	)		—			(16,467	)
BTS 2nd Private Equity Fund		15,012		608		1			(725	)		—			(725	)
STASSETS FUND III		4,660		313		37			(953	)		—			(953	)
Japanese Hotel Real Estate Private Equity Fund 2		14,387		13		1,050			968			(1,186	)		(218	)
Woori Seoul Beltway Private Special Asset Fund No.1		39,497		2		1,028			984			—			984
Woori Short-term Bond Securities Investment Trust(Bond) ClassC-F		468,357		67,022		14,189			11,804			—			11,804
Woori Safe Plus General Type Private Investment Trust S-8(Bond)		115,781		4,508		1,899			1,763			—			1,763
WOORI TAERIM 1st Fund		4,047		185		—			(13	)		—			(13	)
Portone-Cape Fund No.1		2,344		26		—			(129	)		—			(129	)
KIWOOM WOORI Financial 1st Investment Fund		10,597		111		1			(222	)		—			(222	)
DeepDive WOORI 2022-1 Financial Investment Fund		7,412		37		57			(103	)		—			(103	)
Darwin Green Packaging Private Equity Fund		19,332		—		2,215			1,904			—			1,904
DS Power Semicon Private Equity Fund		14,230		44		1,185			937			—			937
Koreawide partners 2nd Private Equity Fund		77,039		2,038		3,020			1			—			1
Woori FirstValue Private Real Estate Fund No.2		67,005		62,357		3			(54	)		—			(54	)
WooriG Real Infrastructure Blind General Type Private Placement Investment Trust		73,064		56		3,140			2,874			—			2,874
Woori BIG2 Plus Securities Investment Trust(Balanced Bond)		4,667		12		389			(636	)		—			(636	)
Woori Together TDF 2025		8,513		16		1,287			(1,018	)		—			(1,018	)
Woori Together TDF 2030		8,615		—		1,352			(1,108	)		—			(1,108	)
WOORI Star50 feeder fund(H)		709		—		48			(480	)		—			(480	)
Aarden Woori Apparel 1st Private Equity Fund		20,750		89		8			(325	)		—			(325	)
Woori Dyno 1st Private Equity Fund		10,212		43		200			(31	)		—			(31	)
Australia Green Energy 1st PEF		122,634		14		30			(1,380	)		—			(1,380	)
Godo Kaisha Oceanos 1		63,741		45,358		2,942			176			—			176
Woori Zip 1		48,309		34,346		2,085			(215	)		—			(215	)
Woori Zip 2		68,388		48,927		3,069			(198	)		—			(198	)
Force TEC Co., Ltd.		10,489		24,804		25,182			(2,664	)		—			(2,664	)
KUM HWA Co., Ltd.		4		159		—			(8	)		—			(8	)
Jinmyung Plus Co.,Ltd.		696		649		177			(9	)		—			(9	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	December 31, 2022
	Assets		Liabilities		Operating revenue		Net income (loss)			Other comprehensive income(loss)		Total comprehensive income(loss)
JC Assurance No.2 Private Equity Fund		122,015		3		—		(929	)		—		(929	)
Dream Company Growth no.1 PEF		28,351		50		1,695		1,506			—		1,506
HMS-Oriens 1st Fund		58,095		6		3,829		3,279			—		3,279
Woori G Senior Loan Private Placement Investment Trust No.1		378,145		23		18,584		17,496			—		17,496
Genesis Eco No.1 Private Equity Fund		38,700		5		48		(593	)		—		(593	)
Paratus Woori Material Component Equipment joint venture company		58,311		617		7		(812	)		—		(812	)
Midas No. 8 Private Equity Joint Venture Company		65,936		242		1,928		977			—		977
Orchestra Private Equity Fund IV		34,427		—		1,580		878			—		878
Synaptic Green No.1 PEF		37,017		—		4		(983	)		—		(983	)
IGEN2023No. 1 Private Equity Fund		32,362		122		3,166		2,616			—		2,616
PCC-Woori LP Secondary Fund		33,591		168		6,127		1,152			—		1,152
Woori-Q Corporate Restructuring Private Equity Fund		75,973		418		3,019		(4,696	)		—		(4,696	)
Woori-Shinyoung Growth-Cap Private Equity Fund I		123,824		312		41,780		40,544			—		40,544

(*1)	It is scheduled to be dissolved because of liquidation for the year ended December 31, 2021.

(*2)	The amount is after reflecting the fair value adjustment that occurred when acquiring the shares and the adjustments that occurred by difference of accounting policies with the Group.

(4)	The entities that the Group has not applied equity method of accounting although the Group’s ownership interest is more than 20% as of December 31, 2023 and 2022 are as follows:


	December 31, 2023
Associate (*)	Number of shares owned		Ownership (%)
CL Tech Co., Ltd.		10,191		28.6

(*)	Although the Group’s ownership interest of the entity is more than 20%, the Group does not have significant influence over the entity since it is going through work-out process under receivership, accordingly it is excluded from the investment in joint ventures and associates.


	December 31, 2022
Associate (*)	Number of shares owned		Ownership (%)
CL Tech Co., Ltd.		10,191		28.6

(*)	Although the Group’s ownership interest of the entity is more than 20%, the Group does not have significant influence over the entity since it is going through work-out process under receivership, accordingly it is excluded from the investment in joint ventures and associates.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(5)	As of December 31, 2023 and 2022, the reconciliations from the net assets of the associates to the carrying amount of the shares of the investment in joint ventures and associates are as follows (Unit: Korean Won in millions except for ownership):


	December 31, 2023
	Total net asset			Ownership (%)		Ownership portion of net assets			Basis difference		Impairment		Intercompany transaction			Book value
W Service Networks Co., Ltd.		4,391			4.9		216			—		—		—			216
Korea Credit Bureau Co., Ltd.		62,408			9.9		6,186			247		—		—			6,433
Korea Finance Security Co., Ltd.		21,898			15.0		3,285			—		—		—			3,285
K BANK Co., Ltd. (*)		1,893,785			12.6		238,158			21,894		—		—			260,052
Partner One Value Up I Private Equity Fund		13,889			23.3		3,230			—		—		—			3,230
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		41,228			20.0		8,247			—		—		—			8,247
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		15,654			25.0		3,914			—		—		523			4,437
LOTTE CARD Co., Ltd. (*)		2,936,964			20.0		587,392			—		—		—			587,392
Union Technology Finance Investment Association		41,310			29.7		12,270			—		—		—			12,270
Dicustody Co., Ltd.		92			1.0		1			—		—		—			1
Orient Shipyard Co., Ltd.		(16,517	)		22.7		(3,754	)		—		—		3,754			—
Joongang Network Solution Co.,Ltd.		(1,651	)		25.3		(419	)		—		—		507			88
Win Mortgage Co.,LTd.		2,321			4.5		105			—		—		—			105
Together-Korea Government Private Pool Private Securities Investment Trust No. 3		10,542			100.0		10,540			—		—		—			10,540
BTS 2nd Private Equity Fund		24,193			20.0		4,838			—		—		—			4,838
STASSETS FUND III		29,702			28.3		8,406			—		—		—			8,406
SF CREDIT PARTNERS, LLC		123,161			10.0		12,316			—		—		529			12,845
Rea Company		(1,488	)		24.5		(365	)		—		—		365			—
ARAM CMC Co.,Ltd.		184			20.0		37			—		—		(37	)		—
Japanese Hotel Real Estate Private Equity Fund No.2		13,529			19.9		2,688			—		—		—			2,688
Woori Seoul Beltway Private Special Asset Fund No.1		50,360			25.0		12,590			—		—		—			12,590
Woori General Private Securities Investment Trust(Bond) No.1		206,746			25.0		51,686			—		—		—			51,686
Woori Short-term Bond Securities Investment Trust(Bond) ClassC-F		701,914			15.0		105,564			—		—		—			105,564
Woori Safe Plus General Type Private Investment Trust S-8(Bond)		113,407			9.1		10,330			—		—		—			10,330
Woori General Private Securities Investment Trust(Bond) No.2		113,040			27.3		30,829			—		—		—			30,829
Woori Smart General Private Equity Investment Trust 1(bond)		143,973			28.6		41,135			—		—		—			41,135
Woori General Private Securities Investment Trust(Bond) No.3		184,330			27.8		51,205			—		—		—			51,205
Woori Asset Global Partnership Fund No.5		38,256			57.7		22,071			—		—		—			22,071
WOORI TAERIM 1st Fund		3,862			25.6		988			—		—		—			988

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	December 31, 2023
	Total net asset			Ownership (%)		Ownership portion of net assets			Basis difference		Impairment			Intercompany transaction		Book value
Portone-Cape Fund No.1		2,224			20.0		445			—		—			—		445
DeepDive WOORI 2021-1 Financial Investment Fund		10,381			11.9		1,236			—		—			—		1,236
Darwin Green Packaging Private Equity Fund		19,390			20.4		3,957			—		—			—		3,957
Koreawide partners 2nd Private Equity Fund		72,133			26.7		19,235			—		—			—		19,235
Woori FirstValue Private Real Estate Fund No.2		4,667			12.0		560			—		—			—		560
WooriG Real Infrastructure Blind General Type Private Placement Investment Trust		114,817			0.1		55			—		—			—		55
Woori Together TDF 2030		11,894			28.0		3,324			—		—			—		3,324
Woori Together OCIO Target Return Feeder fund (Balance Bond)		50,837			20.4		10,376			—		—			—		10,376
Australia Green Energy 1st PEF		121,430			4.0		4,811			—		—			—		4,811
Aarden Woori Apparel 1st Private Equity Fund		28,129			0.5		133			—		—			—		133
Woori Dyno 1st Private Equity Fund		12,025			19.6		2,358			—		—			—		2,358
KTB-KORUS FUND		8,956			37.5		3,359			—		—			—		3,359
KTB China Platform Fund		85,895			18.7		16,059			—		—			—		16,059
KTBN Venture Fund No.7		79,871			20.1		16,044			—		—			—		16,044
KTBN Venture Fund No.8		11,551			21.7		2,511			—		—			—		2,511
KTBN Digital Contents Korea Fund No.9		18,658			30		5,597			—		—			—		5,597
KTBN Media Contents Fund		1,887			15		283			—		—			—		283
KTB China Synergy Fund		135,487			15.1		20,405			—		—			—		20,405
NAVER-KTB Audio Contents Fund		28,767			1		288			—		—			—		288
KTBN Venture Fund No.13		72,206			19.6		14,158			—		—			—		14,158
KTBN Future Contents Fund		34,210			13.3		4,561			—		—			—		4,561
KTBN Venture Fund No.16		180,975			10.3		18,561			—		—			—		18,561
KTBN Venture Fund No.18		265,911			10.1		26,970			—		—			—		26,970
KB-KTB Technology Venture Fund		41,800			18.2		7,600			—		—			—		7,600
WOORI 2022 Scaleup Venture Fund		67,800			20		13,578			—		—			—		13,578
WOORI 2022 Start-up Venture Fund		8,081			30.1		2,433			—		—			—		2,433
KTB-NHN China Private Equity Fund		9			33.3		3			—		—			—		3
KTBN GI Private Equity Fund		12,346			5		617			—		—			—		617
Chirochem		357			28.6		102			—		—			—		102
Godo Kaisha Oceanos 1		16,687			47.8		7,978			—		—			—		7,978
Woori Zip 1		12,746			62.4		7,629			—		—			—		7,629
Woori Zip 2		17,630			62.8		10,695			—		—			—		10,695
KG Fashion Co., Ltd.		(463	)		20.8		(96	)		—		—			96		—
KUM HWA Co., Ltd.		(163	)		20.1		(33	)		—		—			33		—
Jinmyung Plus Co., Ltd.		65			21.3		14			—		—			—		14
JC Assurance No.2 Private Equity Fund		121,588			23.5		28,610			—		(28,610	)		—		—
Dream Company Growth no.1 PEF		28,111			27.8		7,809			—		—			—		7,809
HMS-Oriens 1st Fund		61,497			22.8		14,030			—		—			—		14,030
Woori G Senior Loan Private Placement Investment Trust No.1		349,132			21.7		75,590			—		—			—		75,590

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	December 31, 2023
	Total net asset		Ownership (%)		Ownership portion of net assets		Basis difference		Impairment		Intercompany transaction		Book value
Genesis Eco No.1 Private Equity Fund		37,750		29.0		10,942		—		—		—		10,942
Paratus Woori Material Component Equipment joint venture company		56,788		29.9		16,979		—		—		—		16,979
Midas No. 8 Private Equity Joint Venture Company		64,821		28.5		18,465		—		—		—		18,465
Orchestra Private Equity Fund IV		33,919		28.2		9,555		—		—		—		9,555
Synaptic Green No.1 PEF		36,150		21.1		7,611		—		—		—		7,611
IGEN2022No. 1 Private Equity Fund		32,131		24.8		7,983		—		—		—		7,983
PCC-Woori LP Secondary Fund		27,105		38.9		10,530		—		—		—		10,530
Synaptic Future Growth Private Equity Fund 1		29,748		23.8		7,069		—		—		—		7,069
Woori-Q Corporate Restructuring Private Equity Fund		62,809		32.4		20,283		—		—		—		20,283
Woori-Shinyoung Growth-Cap Private Equity Fund I		95,743		35.0		33,481		—		—		—		33,481
NH Woori Newdeal Growth Alpha Private Equity Fund 1		98,627		32.7		32,987		—		—		—		32,987
Woori BIG2 Plus Securities Investment Trust(Balanced Bond)		16,625		14.1		2,543		—		—		—		2,543
Woori 25-09 Corporate Bond (AA- or higher) Active ETF		101,701		29.3		29,821		—		—		—		29,821
Woori Short Term Government and Special Bank Bond Active ETF		58,973		20.8		12,286		—		—		—		12,286

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	December 31, 2022
	Total net asset			Ownership (%)		Ownership portion of net assets			Basis difference		Impairment		Intercompany transaction			Book value
W Service Networks Co., Ltd.		4,227			4.9		209			—		—		(1	)		208
Korea Credit Bureau Co., Ltd.		55,100			9.9		5,462			246		—		1			5,709
Korea Finance Security Co., Ltd.		15,828			15.0		2,374			—		—		—			2,374
Woori Growth Partnerships New Technology Private Equity Fund		47,185			23.1		10,889			—		—		—			10,889
2016KIF-IMM Woori Bank Technology Venture Fund		47,370			20.0		9,474			—		—		—			9,474
K BANK Co., Ltd. (*)		1,796,269			12.6		225,894			21,894		—		1			247,789
Woori Bank-Company K Korea Movie Asset Fund		957			25.0		239			—		—		—			239
Partner One Value Up Ist Private Equity Fund		18,395			23.3		4,278			—		—		—			4,278
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		51,419			20.0		10,284			—		—		1			10,285
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		15,716			25.0		3,929			—		—		426			4,355
LOTTE CARD Co., Ltd. (*)		2,570,656			20.0		514,131			—		—		—			514,131
Together-Korea Government Private Pool Private Securities Investment Trust No.3		10,245			100.0		10,244			—		—		(1	)		10,243
Union Technology Finance Investment Association		48,692			29.7		14,463			—		—		(1	)		14,462
Dicustody Co., Ltd.		95			1.0		1			—		—		—			1
Orient Shipyard Co., Ltd.		(16,393	)		22.7		(3,721	)		—		—		3,721			—
BTS 2nd Private Equity Fund		14,405			20.0		2,881			—		—		—			2,881
STASSETS FUND III		4,347			28.3		1,230			—		—		—			1,230
Japanese Hotel Real Estate Private Equity Fund No.2		14,374			19.9		2,855			—		—		—			2,855
Woori Seoul Beltway Private Special Asset Fund No.1		39,495			25.0		9,874			—		—		—			9,874
Woori Short-term Bond Securities Investment Trust (Bond) ClassC-F		401,335			27.9		112,025			—		—		—			112,025
Woori Safe Plus General Type Private Investment Trust S-8(Bond)		111,273			9.2		10,182			—		—		—			10,182
WOORI TAERIM 1st Fund		3,862			25.6		988			—		—		—			988
Portone-Cape Fund No.1		2,318			20.0		464			—		—		—			464
KIWOOM WOORI Financial 1st Investment Fund		10,486			9.1		953			—		—		—			953
DeepDive WOORI 2022-1 Financial Investment Fund		7,375			11.9		878			—		—		—			878
Darwin Green Packaging Private Equity Fund		19,332			20.4		3,945			—		—		—			3,945
DS Power Semicon Private Equity Fund		14,186			21.0		2,976			—		—		—			2,976
Koreawide partners 2nd Private Equity Fund		75,001			26.7		20,000			—		—		—			20,000
Woori FirstValue Private Real Estate Fund No.2		4,648			12.0		558			—		—		—			558
Woori G Real Infrastructure Blind General Type Private Placement Investment Trust		73,008			0.1		102			—		—		—			102

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	December 31, 2022
	Total net asset			Ownership (%)		Ownership portion of net assets			Basis difference		Impairment			Intercompany transaction		Book value
Woori BIG2 Plus Securities Investment Trust(Balanced Bond)		4,655			23.1		1,074			—		—			—		1,074
Woori Together TDF 2025		8,497			23.6		1,990			—		—			—		1,990
Woori Together TDF 2030		8,615			23.8		2,033			—		—			—		2,033
WOORI Star50 feeder fund(H)		709			17.9		126			—		—			—		126
Aarden Woori Apparel 1st Private Equity Fund		20,661			0.5		97			—		—			—		97
Woori Dyno 1st Private Equity Fund		10,169			19.6		1,994			—		—			—		1,994
Australia Green Energy 1st PEF		122,620			4.0		4,858			—		—			—		4,858
Godo Kaisha Oceanos 1		18,383			47.8		8,788			—		—			—		8,788
Woori Zip 1		13,963			64.0		8,690			—		—			—		8,690
Woori Zip 2		19,461			64.0		12,180			—		—			—		12,180
Force TEC		(14,315	)		24.5		(3,513	)		—		—			3,513		—
KUM HWA Co., Ltd.		(155	)		20.1		(31	)		—		—			31		—
Jinmyung Plus Co.,Ltd.		47			21.3		10			—		—			—		10
JC Assurance No.2 Private Equity Fund		122,012			23.5		17,728			—		(17,728	)		—		—
Dream Company Growth no.1 PEF		28,301			27.8		7,861			—		—			—		7,861
HMS-Oriens 1st Fund		58,089			22.8		13,252			—		—			—		13,252
Woori G Senior Loan General Type Private Investment Trust No.1		378,122			21.7		81,861			—		—			—		81,861
Genesis Eco No.1 Private Equity Fund		38,695			29.0		11,216			—		—			—		11,216
Paratus Woori Material Component Equipment joint venture company		57,694			29.9		17,250			—		—			—		17,250
Midas No. 8 Private Equity Joint Venture Company		65,694			28.5		18,713			—		—			—		18,713
Orchestra Private Equity Fund IV		34,427			28.2		9,698			—		—			—		9,698
Synaptic Green No.1 PEF		37,017			21.1		7,793			—		—			—		7,793
IGEN2023No. 1 Private Equity Fund		32,240			24.8		8,010			—		—			—		8,010
PCC-Woori LP Secondary Fund		33,423			38.8		12,984			—		—			—		12,984
Woori-Q Corporate Restructuring Private Equity Fund		75,555			35.6		27,536			—		—			—		27,536
Woori-Shinyoung Growth-Cap Private Equity Fund I		123,512			35.0		43,274			—		—			—		43,274

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

14.	INVESTMENT PROPERTIES

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


	December 31, 2023			December 31, 2022
Acquisition cost		510,990			418,775
Accumulated depreciation		(38,136	)		(30,982	)
Accumulated impairment losses		(86	)		(86	)

Net carrying value		472,768			387,707

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


	For the years ended December 31
	2023			2022
Beginning balance		387,707			389,495
Acquisition		99,234			—
Disposal		—			(1,206	)
Depreciation		(5,398	)		(3,925	)
Transfer		(2,098	)		7,153
Foreign currencies translation adjustments		(6,677	)		(3,810	)

Ending balance		472,768			387,707

(3)

Fair value of investment properties amounted to 802,109 million won and 647,072 million won as of December 31, 2023 and 2022, respectively. The fair value of investment properties has been assessed on the basis of recent similar real estate market price and officially assessed land price in the area of the investment properties, is classified as level 3 on the fair value hierarchy.

(4)

Rental fee earned from investment properties is amounting to 26,477 million won and 22,798 million won for the years ended December 31, 2023 and 2022, respectively. Operating expenses directly related to the investment properties where rental fee was earned is amounting to 5,568 million won and 4,093 million won.

(5)	The lease payments expected to be received in the future under lease contracts relating to investment properties as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023		December 31, 2022
Lease payments:
Within a year		14,784		12,368
More than 1 year and within 2 years		8,214		8,481
More than 2 years and within 3 years		3,744		5,320
More than 3 years and within 4 years		3,172		3,201
More than 4 years and within 5 years		2,994		2,634
More than 5 years		2,944		2,568

Total		35,852		34,572

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

15.	PROPERTY, PLANT AND EQUIPMENT

(1)	Details of Property, Plant and Equipment as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023
	Land		Building		Equipment and vehicles		Leasehold improvement		Construction in progress		Structures		Total
Property, Plant and Equipment (owned)		1,709,712		719,738		265,064		61,369		37,194		—		2,793,077
Right-of-use asset		—		362,702		20,980		—		—		—		383,682
Carrying value		1,709,712		1,082,440		286,044		61,369		37,194		—		3,176,759


	December 31, 2022
	Land		Building		Equipment and vehicles		Leasehold improvement		Construction in progress		Structures		Total
Property, Plant and Equipment (owned)		1,695,357		730,676		261,278		58,352		32,184		—		2,777,847
Right-of-use asset		—		349,494		15,589		—		—		—		365,083
Carrying value		1,695,357		1,080,170		276,867		58,352		32,184		—		3,142,930

(2)	Details of Property, Plant and Equipment (owned) as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023
	Land			Building			Equipment and vehicles			Leasehold improvement			Construction in progress		Structures			Total
Acquisition cost		1,710,372			1,098,682			1,229,740			486,763			37,194		20			4,562,771
Accumulated depreciation		—			(378,944	)		(964,676	)		(425,394	)		—		(20	)		(1,769,034	)
Accumulated impairment losses		(660	)		—			—			—			—		—			(660	)
Net carrying value		1,709,712			719,738			265,064			61,369			37,194		—			2,793,077


	December 31, 2022
	Land			Building			Equipment and vehicles			Leasehold improvement			Construction in progress		Structures			Total
Acquisition cost		1,696,017			1,078,385			1,179,928			470,513			32,184		20			4,457,047
Accumulated depreciation		—			(347,709	)		(918,650	)		(412,161	)		—		(20	)		(1,678,540	)
Accumulated impairment losses		(660	)		—			—			—			—		—			(660	)
Net carrying value		1,695,357			730,676			261,278			58,352			32,184		—			2,777,847

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AS OF DECEMBER 31, 2023 AND 2022

(3)	Details of changes in Property, Plant and Equipment(owned) are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023
	Land			Building			Equipment and vehicles			Leasehold improvement			Construction in progress			Structures		Total
Beginning balance		1,695,357			730,676			261,278			58,352			32,184			—		2,777,847
Acquisitions		43			18,107			112,908			24,874			8,790			—		164,722
Disposals		(367	)		(530	)		(13,630	)		(1,017	)		(3,600	)		—		(19,144	)
Depreciation		—			(33,318	)		(96,684	)		(21,062	)		—			—		(151,064	)
Classification of assets held for sale		(936	)		(1,568	)		—			—			—			—		(2,504	)
Transfer		5,445			(3,347	)		—			—			—			—		2,098
Foreign currencies translation adjustments		638			322			296			186			(68	)		—		1,374
Business combination		9,530			9,530			318			—			—			—		19,378
Others		2			(134	)		578			36			(112	)		—		370

Ending balance		1,709,712			719,738			265,064			61,369			37,194			—		2,793,077


	For the year ended December 31, 2022
	Land			Building			Equipment and vehicles			Leasehold improvement			Construction in progress			Structures			Total
Beginning balance		1,719,325			756,964			258,361			51,354			3,171			1			2,789,176
Acquisitions		24			14,524			98,620			28,178			31,810			—			173,156
Disposals		(20,024	)		(788	)		(1,003	)		(656	)		—			—			(22,471	)
Depreciation		—			(32,290	)		(97,600	)		(21,185	)		—			(1	)		(151,076	)
Classification of assets held for sale		(6,405	)		(6,704	)		—			—			—			—			(13,109	)
Transfer		(3,040	)		(4,113	)		—			—			—			—			(7,153	)
Foreign currencies translation adjustments		(855	)		(428	)		392			549			225			—			(117	)
Business combination		5,917			3,523			2,586			—			—			—			12,026
Others		415			(12	)		(78	)		112			(3,022	)		—			(2,585	)

Ending balance		1,695,357			730,676			261,278			58,352			32,184			—			2,777,847

(4)	Details of right-of-use assets as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023
	Building			Equipment and vehicles			Total
Acquisition cost		735,396			40,389			775,785
Accumulated depreciation		(372,694	)		(19,409	)		(392,103	)

Net carrying value		362,702			20,980			383,682


	December 31, 2022
	Building			Equipment and vehicles			Total
Acquisition cost		643,484			32,700			676,184
Accumulated depreciation		(293,990	)		(17,111	)		(311,101	)

Net carrying value		349,494			15,589			365,083

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AS OF DECEMBER 31, 2023 AND 2022

(5)	Details of changes in right-of-use assets for the years ended December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023
	Building			Equipment and vehicles			Total
Beginning balance		349,494			15,589			365,083
New contracts		192,111			18,699			210,810
Changes in contract		25,570			138			25,708
Termination		(15,340	)		(1,647	)		(16,987	)
Depreciation		(201,232	)		(12,133	)		(213,365	)
Business combination		675			271			946
Others		11,424			63			11,487

Ending balance		362,702			20,980			383,682


	For the year ended December 31, 2022
	Building			Equipment and vehicles			Total
Beginning balance		367,480			18,064			385,544
New contracts		225,396			9,819			235,215
Changes in contract		3,514			(26	)		3,488
Termination		(43,597	)		(870	)		(44,467	)
Depreciation		(211,175	)		(11,406	)		(222,581	)
Business combination		819			—			819
Others		7,057			8			7,065

Ending balance		349,494			15,589			365,083

16.	INTANGIBLE ASSETS

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


	December 31, 2023
	Goodwill		Industrial property rights			Development cost			Other intangible assets			Membership deposit			Construction in progress		Total
Acquisition cost		445,093		2,292			859,678			1,388,397			50,857			8,142		2,754,459
Accumulated amortization		—		(1,783	)		(617,587	)		(1,101,688	)		—			—		(1,721,058	)
Accumulated impairment losses		—		—			—			(33,553	)		(3,006	)		—		(36,559	)

Net carrying value		445,093		509			242,091			253,156			47,851			8,142		996,842


	December 31, 2022
	Goodwill		Industrial property rights			Development cost			Other intangible assets			Membership deposit			Construction in progress		Total
Acquisition cost		397,527		2,219			754,031			1,244,516			46,231			3,027		2,447,551
Accumulated amortization		—		(1,576	)		(541,404	)		(1,018,591	)		—			—		(1,561,571	)
Accumulated impairment losses		—		—			—			(33,552	)		(3,314	)		—		(36,866	)

Net carrying value		397,527		643			212,627			192,373			42,917			3,027		849,114

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AS OF DECEMBER 31, 2023 AND 2022

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


	For the year ended December 31, 2023
	Goodwill		Industrial property rights			Development cost			Other intangible assets			Membership deposit			Construction in progress			Total
Beginning balance		397,527		643			212,627			192,373			42,917			3,027			849,114
Acquisitions		—		72			105,596			125,509			4,000			7,612			242,789
Disposal		—		—			—			(1,028	)		(1,290	)		—			(2,318	)
Amortization (*)		—		(206	)		(76,192	)		(84,556	)		—			—			(160,954	)
Reversal of impairment losses		—		—			—			—			37			—			37
Transfer		—		—			61			650			(392	)		(350	)		(31	)
Business combination		41,527		—			—			18,882			2,565			—			62,974
Foreign currencies translation adjustments		6,039		—			(1	)		854			4			(28	)		6,868
Others		—		—			—			472			10			(2,119	)		(1,637	)

Ending balance		445,093		509			242,091			253,156			47,851			8,142			996,842

(*)	Amortization of other intangible assets amounting to 22,349 million won is included in other operating expenses.


	For the year ended December 31, 2022
	Goodwill			Industrial property rights			Development cost			Other intangible assets			Membership deposit			Construction in progress			Total
Beginning balance		345,449			723			207,708			193,182			37,607			717			785,386
Acquisitions		—			162			91,992			62,073			6,571			2,421			163,219
Disposal		—			—			—			(2	)		(1,295	)		—			(1,297	)
Amortization (*)		—			(242	)		(87,294	)		(75,299	)		—			—			(162,835	)
Impairment losses		—			—			—			—			88			—			88
Transfer		—			—			300			182			—			(482	)		—
Business combination		57,670			—			—			7,795			—			—			65,465
Foreign currencies translation adjustments		(5,592	)		—			(5	)		(865	)		(42	)		(53	)		(6,557	)
Others		—			—			(74	)		5,307			(12	)		424			5,645

Ending balance		397,527			643			212,627			192,373			42,917			3,027			849,114

(*)	Amortization of other intangible assets amounting to 14,664 million won is included in other operating expenses.

(3)

Goodwill

Details of allocated goodwill based on each cash-generating unit as of December 31, 2023 and 2022 are as follows (Unit: Korean won in million):


Cash-generating unit (*1)	December 31, 2023		December 31, 2022
Woori Asset Management Corp.		43,036		43,036
Woori Global Asset Management Co., Ltd.		2,030		2,030
Woori Asset Trust Co., Ltd.		141,780		141,780
Woori Venture Partners Co., Ltd.		41,527		—
PT Bank Woori Saudara Indonesia 1906 Tbk (*2)		100,267		97,029
WOORI BANK (CAMBODIA) PLC (*3)		56,513		55,570
PT Woori Finance Indonesia Tbk.(*4)		53,097		51,382
Others		6,843		6,700

Total		445,093		397,527

(*1)	Allocated to the cash-generating unit that will benefit from the synergy effect of the business combination, and the cash-generating unit is generally comprised of the operating segment or sub-sectors.

(*2)	The Group has acquired Saudara Bank to expand retail sales in Indonesia, and recognized the goodwill as it is expected to strengthen the competitiveness by securing a local sales network in Indonesia.

(*3)	The Group has acquired VisionFund Cambodia to expand retail sales in Cambodia, and recognized goodwill based on the economies of scale and acquired customer base.

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AS OF DECEMBER 31, 2023 AND 2022

(*4)	The Group has acquired PT Batavia Prosperindo Finance Tbk to expand installment finance business in Indonesia, and recognized the goodwill as it is expected to strengthen the competitiveness and existing customer relationships by securing sales network of used cars in Indonesia.

2)	Impairment test

The recoverable amount of the cash-generating unit is measured at larger amount between the fair value less costs to sell and the value to use.

The net fair value is calculated by deducting costs of disposal from the amount received from the sale of the cash-generating unit in an arm’s length transaction between the parties with reasonable judgment and willingness to negotiate. In case of difficulty in measuring this amount, the sale amount of a similar cash-generating unit in the past market is calculated by reflecting the characteristics of the cash-generating unit. If reliable information related to fair value less costs to sell is not available, value in use is considered as recoverable amount. Value in use is the present value of future cash flows expected to be generated by the cash-generating unit. Future cash flows are estimated based on the latest financial budget approved by the management, with an estimated period of up to five years. The Group applied 1.0% - 4.3% growth rate to estimate future cash flow for the period over five years. The main assumptions used to estimate cash flows are about the size of the market and the share of the group. The appropriate discount rate for discounting future cash flows is the pre-tax discount rate, including assumptions about risk-free interest rates, market risk premium, and systemic risk of cash-generating units. The impairment test, which compares the carrying amount and recoverable amount of the cash-generating unit to which goodwill has been allocated, is conducted every year and every time an impairment sign occurs.


Category	Woori Asset Trust Co., Ltd.		Woori Asset Management Corp.(*)		Woori Venture Partners Co., Ltd.		PT Bank Woori Saudara Indonesia 1906 Tbk		WOORI BANK (CAMBODIA) PLC		PT Woori Finance IndonesiaTbk
Discount rate (%).		16.61		16.44		16.93		11.39		17.72		15.33
Terminal growth rate (%)		1.0		1.0		1.0		1.0		1.0		4.3
Recoverable amount.		439,760		186,709		275,795		979,387		586,446		159,255
Carrying amount		414,455		160,596		221,248		740,558		509,730		120,355

(*)	The Group conducted a consolidated impairment test on the goodwill of Woori Asset Management and Woori Global Asset Management, which are scheduled to merge in January 2024.

As a result of the impairment test on goodwill, it is determined that the carrying amount of the cash-generating unit to which the goodwill has been allocated will not exceed the recoverable amount.

3)	Sensitivity analysis

The sensitivity of the fair value measurement to changes in significant but unobservable inputs used in measuring fair value is as follows (Unit: Korean Won in millions):


Category		Woori Asset Trust Co., Ltd.			Woori Asset Management Corp.(*)			Woori Venture Partners Co., Ltd.			PT Bank Woori Saudara Indonesia 1906 Tbk			WOORI BANK (CAMBODIA) PLC			PT Woori Finance Indonesia Tbk
Discount rate (%).	Increase by 1.0% point		(33,658	)		(7,931	)		(32,715	)		(95,630	)		(47,185	)		(14,150	)
	Decrease by 1.0% point		40,101			9,343			38,927			116,564			53,812			17,719
Terminal growth rate (%)	Increase by 1.0% point		23,853			5,217			24,520			47,933			9,762			13,470
	Decrease by 1.0% point		(20,274	)		(4,451	)		(20,874	)		(39,513	)		(8,659	)		(10,734	)

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AS OF DECEMBER 31, 2023 AND 2022

17.	ASSETS HELD FOR SALE

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


Assets (*)	December 31, 2023		December 31, 2022
Property, Plant and Equipment		11,573		9,589
Others		8,772		4,183

Total		20,345		13,772

(*)	The Group classifies assets as held for sale that are highly likely to be sold within one year from December 31, 2023 and 2022.

The Group measured assets held for sale at the lower of their net fair value or carrying amount.

The Group has decided to sell some of the Property, Plant and Equipment through internal consultation during the current year and classified the property as non-current assets held for sale. The assets are expected to be sold within 12 months, and those that were scheduled to be sold at the end of the prior year have been sold and removed. On the other hand, other assets that are expected to be sold as of the end of the current year are classified as assets that are expected to be sold within one year due to the possibility of being sold as buildings and land acquired through auction.

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AS OF DECEMBER 31, 2023 AND 2022

18.	ASSETS SUBJECT TO LIEN AND ASSETS ACQUIRED THROUGH FORECLOSURES

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


		December 31, 2023
		Collateral given to	Amount	Reason for collateral
Financial assets at FVTPL	Korean treasury and government bonds, etc.	Mirae Asset Global Investments Co., Ltd.	238,461	Related to bonds sold under repurchase agreements (*1)
	Korean treasury and government bonds, etc.	Korea Securities Depository	675,815	Securities borrowing collateral
	Korean treasury and government bonds, etc.	SHINHAN SECURITIES CO, etc.	6,534	Future trading collateral
	Korean financial institutions’ debt securities, etc.	Korea Exchange Co., Ltd etc.	385,394	Variable margin deposit for CSA, etc.
	Korean capital contributions, etc.	Korea Software Financial Cooperative	107	Bid guarantee, etc.
Financial assets at FVTOCI	Korean treasury and government bonds	Korea Securities Depository	73,846	Related to bonds sold under repurchase agreements (*1)
	Korean financial institutions’ debt securities, etc.	The BOK, etc.	8,182,907	Settlement risk, etc.
	Debt securities in foreign currencies	Korea Investment & Securities, etc.	955,126	Substitute securities, etc.
	Debt securities in foreign currencies	Postal Savings Bank of China	482,737	Related to bonds sold under repurchase agreements (*1)
Securities at amortized cost	Korean treasury and government bonds	The BOK, etc.	10,380,306	Settlement risk, etc.
	Debt securities in foreign currencies	NATIXIS	48,368	Related to bonds sold under repurchase agreements (*1)
	Debt securities in foreign currencies	FEDERAL RESERVE BANK	23,180	Related to the borrowing limit
Loan at amortized cost and other financial assets	Other due from banks in local currency	MORGAN STANLEY BANK INTL, SEL, etc.	26,854	Variable margin deposit for CSA, etc.
	Other due from banks in foreign currency	Korea Investment & Securities, etc.	765,330	Overseas futures option deposit, etc.
	Mortgage loan	Public offering	1,242,963	Related to covered bonds
Property, Plant and Equipment	Land and building	Gakorea Co., Ltd , etc.	1,808	Right to collateral and others (*2)
Investment properties	Land and building	Gakorea Co., Ltd.	5,211	Right to collateral (*2)

Total			23,494,947

(*1)

The Group has the agreements to repurchase the sold assets at the predetermined price or the price that includes the rate of return and to provide the guarantee on the assets. The transferee has the right to sell or to provide as guarantee. Therefore, the Group does not derecognize the assets, but recognizes the relevant amounts as liability (bonds sold under repurchase agreements). The asset is equivalent to a mortgage-backed debt security.

(*2)	The maximum pledge amount is 339 million Won.

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AS OF DECEMBER 31, 2023 AND 2022


		December 31, 2022
		Collateral given to	Amount	Reason for collateral
Financial assets at FVTPL	Korean treasury and government bonds, etc.	KOREA SECURITIES FINANCE CORPORATION, etc.	198,377	Related to bonds sold under repurchase agreements (*1)
	Korean treasury and government bonds, etc.	Korea Securities Depository	659,050	Securities borrowing collateral
	Korean treasury and government bonds, etc.	SHINHAN SECURITIES CO, etc.	6,939	Future trading collateral
	Korean financial institutions’ debt securities, etc.	SC FIRST BANK KOREA, SEOUL, etc.	245,876	Variable margin deposit for CSA, etc.
	Korean financial institutions’ debt securities, etc.	SHINHAN ASSET MANAGEMENT, etc.	16,200	Related to bonds sold under repurchase agreements (*1)
	Korean capital contributions, etc.	Korea Software Financial Cooperative	104	Bid guarantee, etc.
Financial assets at FVTOCI	Korean treasury and government bonds	Korea Securities Depository	460	Related to bonds sold under repurchase agreements (*1)
	Korean financial institutions’ debt securities, etc.	The BOK, etc.	6,394,890	Settlement risk, etc.
	Debt securities in foreign currencies	BNP-PARIBAS, etc.	1,060,120	Variable margin deposit for CSA, etc.
	Debt securities in foreign currencies	SC BANK, H.K, etc.	582,738	Related to bonds sold under repurchase agreements (*1)
Securities at amortized cost	Korean treasury and government bonds	Korea Securities Depository	1,100,351	Related to bonds sold under repurchase agreements (*1)
	Korean treasury and government bonds	The BOK, etc.	10,820,136	Settlement risk, etc.
	Debt securities in foreign currencies	NATIXIS, etc.	70,949	Related to bonds sold under repurchase agreements (*1)
	Debt securities in foreign currencies	FHLB ADVANCE, etc.	10,570	Related to the borrowing limit
Loan at amortized cost and other financial assets	Due from banks in local currency	Daishin AMC Co.,Ltd. and others	1,500	Right of pledge
	Other due from banks in local currency	The Korea Exchange, etc.	133,539	Margin deposit for CCP
	Other due from banks in foreign currency	Korea Investment & Securities, etc.	1,142,784	Overseas futures option deposit, etc.
	Mortgage loan	Public offering	1,892,723	Related to covered bonds
Property, Plant and Equipment	Land and building	Gakorea Co., Ltd , etc.	1,851	Right to collateral and others (*2)
Investment properties	Land and building	Gakorea Co., Ltd., etc.	5,365	Right to collateral and others (*2)

Total			24,344,522

(*1)

(*2)	The maximum pledge amount is 522 million Won.

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AS OF DECEMBER 31, 2023 AND 2022

(2)	As of December 31, 2023 and 2022 there is no asset acquired through foreclosures.


	December 31, 2023			December 31, 2022
Investment properties
Land		6,404			6,404
Building		148			165
Sub-total		6,552			6,569
Other assets
Land for non-business use		30,950			21,302
Building for non-business use (*1)		5,174			3,049
Movables for non-business use (*2)		111			165
Real estate assessment provision for non-business use		(1,611	)		(1,176	)
Sub-total		34,624			23,340
Assets held for sale
Land		2,393			2,351
Building		1,853			1,832
Sub-total		4,246			4,183

Total		45,422			34,092

(*1)	The cumulative depreciation amount as of December 31, 2023 and 2022 is 1,471 million Won and 1,055 million Won, respectively.

(*2)	The cumulative depreciation amount as of December 31, 2023 and 2022 is 886 million Won and 882 million Won, respectively.

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


		December 31, 2023	December 31, 2022	Loaned to
Financial assets at FVTPL	Korean treasury and government bonds	625,398	—	Korea Securities Finance Corporation
Financial assets at FVTOCI	Korean treasury and government bonds	592,218	98,027	Korea Securities Depository

Securities loaned are lending of specific securities to borrowers who agree to return the same amount of the same security at the end of lending period. As the Group does not derecognize these securities.

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

Fair values of collaterals held that can be disposed and re-subjected to lien regardless of defaults of counterparties as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023
	Fair values of collaterals	Fair values of collaterals were disposed or re-subjected to lien
Securities	3,443,822	—

	December 31, 2022
	Fair values of collaterals	Fair values of collaterals were disposed or re-subjected to lien
Securities	7,109,933	—

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AS OF DECEMBER 31, 2023 AND 2022

19.	OTHER ASSETS

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


	December 31, 2023		December 31, 2022
Lease assets		3,306,464		2,593,578
Prepaid expenses		345,202		287,323
Advance payments		95,025		99,772
Non-operational assets		34,625		23,340
Others		60,471		57,539

Total		3,841,787		3,061,552

20.	FINANCIAL LIABILITIES AT FVTPL

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


	December 31, 2023		December 31, 2022
Financial instruments at fair value through profit or loss measured at fair value		6,138,313		8,952,399

Total		6,138,313		8,952,399

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


	December 31, 2023		December 31, 2022
Deposits
Gold banking liabilities		39,524		35,161
Borrowings
Securities sold		155,765		12,113
Derivative liabilities		5,943,024		8,905,125

Total		6,138,313		8,952,399

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AS OF DECEMBER 31, 2023 AND 2022

21.	DEPOSITS DUE TO CUSTOMERS

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


	December 31, 2023			December 31, 2022
Deposits in local currency:
Deposits on demand		8,803,962			15,627,300
Deposits at termination		282,846,971			270,092,855
Mutual installment		21,602			22,995
Deposits on notes payables		4,119,801			3,675,596
Deposits on CMA		95,237			60,079
Certificate of deposits		14,767,307			5,255,889
Other deposits		1,117,673			1,196,486

Sub-total		311,772,553			295,931,200

Deposits in foreign currencies:
Deposits in foreign currencies		46,196,650			46,263,943
Present value discount		(184,906	)		(92,352	)

Customers’ deposits for beneficiary		—			2,418

Total		357,784,297			342,105,209

22.	BORROWINGS AND DEBENTURES

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


	December 31, 2023
	Lenders	Interest rate (%)	Amount
Borrowings in local currency:
Borrowings from The BOK	The BOK	2.0		1,565,444
Borrowings from government funds	Small Enterprise and Market Service and others	0.0 ~ 3.4		1,996,579
Others	The Korea Development Bank and others	0.0 ~ 6.7		11,206,471

Sub-total				14,768,494
Borrowings in foreign currencies:
Borrowings in foreign currencies	The Export-Import Bank of Korea and others	0.0 ~ 10.0		14,006,644
Bills sold	Others	0.0 ~ 2.7		6,325
Call money	Bank and others	4.1 ~ 6.6		1,115,923
Bonds sold under repurchase agreements	Other financial institutions	1.0 ~ 11.7		1,119,991
Present value discount				(30,631	)

Total				30,986,746

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


	December 31, 2022
	Lenders	Interest rate (%)	Amount
Borrowings in local currency:
Borrowings from The BOK	The BOK	0.3 ~ 1.8		3,040,877
Borrowings from government funds	Small Enterprise and Market Service and others	0.0 ~ 3.5		2,021,049
Others	The Korea Development Bank and others	0.0 ~ 6.7		9,562,082

Sub-total				14,624,008
Borrowings in foreign currencies:
Borrowings in foreign currencies	The Export-Import Bank of Korea and others	(0.1) ~ 10.6		11,161,294
Bills sold	Others	0.0 ~ 2.4		7,308
Call money	Bank and others	1.6 ~ 5.5		400,071
Bonds sold under repurchase agreements	Other financial institutions	0.2 ~ 6.4		2,313,044
Present value discount				(76,122	)

Total				28,429,603

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


	December 31, 2023				December 31, 2022
	Interest rate (%)	Amount			Interest rate (%)	Amount
Face value of bond (*):
Ordinary bonds	0.8 ~ 7.5		34,393,418		0.8 ~ 7.5		37,132,334
Subordinated bonds	1.9 ~ 5.1		5,241,848		1.9 ~ 5.1		5,835,325
Other bonds	1.6 ~ 17.0		1,667,895		0.8 ~ 17.0		1,271,364

Sub-total			41,303,161				44,239,023

Discounts on bonds			(63,916	)			(40,537	)

Total			41,239,245				44,198,486

(*)

Included debentures under fair value hedge amounting to 3,943,224 million won and 3,076,983 million won as of December 31, 2023 and 2022 respectively. Also, debentures under cash flow hedge amounting to 932,392 million won and 1,324,812 million won are included as of December 31, 2023 and 2022 respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

23.	PROVISIONS

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


	December 31, 2023		December 31, 2022
Asset retirement obligation		95,179		82,717
Provisions for guarantees (*1)		80,703		76,508
Provisions for unused loan commitments		135,335		106,033
Other provisions (*2)		494,814		280,607

Total		806,031		545,865

(*1)	Provisions for guarantees includes provision for financial guarantee of 50,125 million won and 47,969 million won as of December 31, 2023 and 2022, respectively.

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

(2)	Changes in provisions for guarantees and unused loan commitments are as follows (Unit: Korean Won in millions):

Provisions for guarantees


	For the year ended December 31, 2023
	Stage1			Stage2			Stage3			Total
Beginning balance		44,496			24,327			7,685			76,508
Transfer to 12-month expected credit loss		20,503			(20,503	)		—			—
Transfer to expected credit loss for the entire period		(453	)		453			—			—
Transfer to credit-impaired financial assets		(4	)		(3	)		7			—
Provisions used		—			—			—			—
Net provision (reversal) of unused amount		5,492			(1,470	)		(467	)		3,555
Others (*)		644			(4	)		—			640

Ending balance		70,678			2,800			7,225			80,703

(*)	Recognized as a result of new financial guarantee contract valued at initial fair value.


	For the year ended December 31, 2022
	Stage1			Stage2			Stage3		Total
Beginning balance		52,830			15,269			6,767		74,866
Transfer to 12-month expected credit loss		1,206			(1,206	)		—		—
Transfer to expected credit loss for the entire period		(119	)		119			—		—
Transfer to credit-impaired financial assets		(3	)		(338	)		341		—
Provisions used		—			—			—		—
Net provision (reversal) of unused amount		(3,449	)		10,483			577		7,611
Others (*)		(5,969	)		—			—		(5,969	)

Ending balance		44,496			24,327			7,685		76,508

(*)	Recognized as a result of new financial guarantee contract valued at initial fair value.

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AS OF DECEMBER 31, 2023 AND 2022

Provisions for unused loan commitment


	For the year ended December 31, 2023
	Stage1			Stage2			Stage3			Total
Beginning balance		67,640			38,188			205			106,033
Transfer to 12-month expected credit loss		19,492			(19,458	)		(34	)		—
Transfer to expected credit loss for the entire period		(3,631	)		3,670			(39	)		—
Transfer to credit-impaired financial assets		(183	)		(263	)		446			—
Net provision (reversal) of unused amount		25,438			4,191			(346	)		29,283
Others		19			—			—			19

Ending balance		108,775			26,328			232			135,335


	For the year ended December 31, 2022
	Stage1			Stage2			Stage3			Total
Beginning balance		67,440			44,536			320			112,296
Transfer to 12-month expected credit loss		14,349			(14,217	)		(132	)		—
Transfer to expected credit loss for the entire period		(2,619	)		2,648			(29	)		—
Transfer to credit-impaired financial assets		(197	)		(306	)		503			—
Net provision (reversal) of unused amount		(11,402	)		5,527			(457	)		(6,332	)
Others		69			—			—			69

Ending balance		67,640			38,188			205			106,033

(3)

Changes in asset retirement obligation for the years ended December 31, 2023 and 2022, are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2023			2022
Beginning balance		82,717			80,777
Provisions provided		6,979			4,082
Provisions used		(1,542	)		(7,400	)
Reversal of provisions unused		(1,202	)		(21	)
Unwinding of discount		2,412			909
Increase (decrease) of restoration expense,etc.		5,815			4,370

Ending balance		95,179			82,717

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 property as of December 31,2023, discounted by appropriate discount rate. The restoration cost is expected to occur by the end of each property’s lease period, and the Group has used average lease period of each category of leases terminated during the past years in order to rationally estimate the lease period. In addition, the Group used average amount of actual recovery cost for the past 3 years and the inflation rate for last year in order to estimate future recovery cost.

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AS OF DECEMBER 31, 2023 AND 2022

(4)	Changes in other provisions for the years ended December 31, 2023 and 2022, are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2023			2022
Beginning balance		280,607			308,195
Provisions provided		265,574			36,284
Provisions used		(30,974	)		(8,540	)
Reversal of provisions unused (*)		(18,579	)		(54,893	)
Foreign currencies translation adjustments		(1,844	)		(621	)
Others		30			182

Ending balance		494,814			280,607

(*)

The Group provided Korean won settlement services for trading transaction settlement between Korea and Iran, investigated by U.S. prosecutors (federal prosecutors, New York state prosecutors) and New York State Department of Financial Services for violations of U.S. sanctions against Iran, Sudan, Syria and Cuba. In this regard, the Office of Foreign Assets Control concluded its investigation in December 2020 urging the bank’s attention without taking any additional sanctions, and New York State Department of Financial Services concluded its investigation in February 2022 without taking any additional sanctions. Meanwhile, in June 2022, the Group reversed the provision related to the investigation of the U.S. Prosecutors, which have not been completed yet, in consideration of the opinion of an independent legal expert that the probability of sanctions by the U.S. Prosecutors in this case is low.

(5)

Others

The Group recognized the estimated amount of compensation related to incomplete sales of Derivative Linked Fund (DLF) in 2019 and provisions for fines expected to be imposed by the Financial Services Commission as the best estimate of expenditure required to fulfill its current obligations at the end of the period.

The Group recognized provisions for estimated compensation amounts related to the prepayment arising from the delay in the redemption of funds before the prior fiscal year and the dispute settlement as the best estimate of the expenditure amounting to 180.2 billion won. In addition, The Group recognized provision amounting to 53.6 billion won for estimated compensation of expected customer loss related to delayed redemption of fund during the current period.

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AS OF DECEMBER 31, 2023 AND 2022

24.	NET DEFINED BENEFIT LIABILITY(ASSET)

The Group’s pension plan is based on the defined benefit retirement pension plan. Employees and directors with one or more years of service are entitled to receive a payment upon termination of their employment, based on their length of service and rate of salary at the time of termination. The assets of the plans are measured at their fair value at the end of reporting date. The plan liabilities are measured using the projected unit method, which takes account of projected earnings increases, using actuarial assumptions that give the best estimate of the future cash flows that will arise under the plan liabilities.

The Group is exposed to various risks through defined benefit retirement pension plan, and the most significant risks are as follows:


Volatility of asset		The defined benefit obligation was estimated with an interest rate calculated based on blue chip corporate bonds earnings. A deficit may occur if the rate of return of plan assets falls short of the interest rate.

Decrease in profitability of blue-chip bonds		A decrease in profitability of blue-chip bonds will be offset by some increase in the value of debt securities that the employee benefit plan owns but will bring an increase in the defined benefit obligation.

Risk of inflation		Defined benefit obligations are related to inflation rate; the higher the inflation rate is, the higher the level of liabilities. Therefore, deficit occurs in the system if an inflation rate increases.

(1)	Details of net defined benefit liability are as follows (Unit: Korean Won in millions):


	December 31, 2023			December 31, 2022
Present value of defined benefit obligation		1,574,087			1,377,545
Fair value of plan assets		(1,807,408	)		(1,661,623	)

Net defined benefit liabilities (*)		(233,321	)		(284,078	)

(*)

Net defined benefit assets of 232,321 million won as of December 31, 2023 are the subtracted amount of the net defined benefit liability of 6,939 million won from the net defined benefit assets of 240,260 million won. Net defined benefit assets of 284,078 million won as of December 31, 2022 are the subtracted amount of the net defined benefit assets of 319,280 million won from the net defined benefit liability of 35,202 million won.

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


	For the years ended December 31
	2023			2022
Beginning balance		1,377,545			1,618,098
Current service cost		132,302			166,741
Interest cost		72,683			48,238
Remeasurements Financial assumption		70,284			(356,344	)
Demographic assumptions		—			(9	)
Experience adjustments		13,926			(3,838	)
Retirement benefit paid		(92,146	)		(92,914	)
Foreign currencies translation adjustments		80			(69	)
Others		(587	)		(2,358	)

Ending balance		1,574,087			1,377,545

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AS OF DECEMBER 31, 2023 AND 2022

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


	For the years ended December 31
	2023			2022
Beginning balance		1,661,623			1,591,458
Interest income		91,550			49,916
Remeasurements		(23,752	)		(18,095	)
Employer’s contributions		175,220			127,979
Retirement benefit paid		(94,607	)		(87,472	)
Others		(2,626	)		(2,163	)

Ending balance		1,807,408			1,661,623

(4)	The fair value of the plan assets by composition is as follows as of December 31, 2023 and 2022.


	December 31, 2023		December 31, 2022
Cash and due from banks		1,807,408		1,661,623

Meanwhile, among plan assets, realized returns on plan assets amount to 67,798 million won and 31,821 million won for the years ended December 31, 2023 and 2022, respectively. The contribution expected to be paid in the next accounting year amounts to 128,665 million won.

(5)	Amounts related to the defined benefit plan that are recognized in the consolidated statements of comprehensive income are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2023			2022
Current service cost		132,302			166,741
Net interest expense		(18,867	)		(1,678	)

Cost recognized in net income		113,435			165,063

Remeasurements (*)		107,962			(342,096	)

Cost recognized in total comprehensive income		221,397			(177,033	)

(*)	Amount before tax

Retirement benefits related to defined contribution plans recognized as expenses are 6,217 million won, and 4,240 million won for the years ended December 31, 2023 and 2022, respectively.

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


	December 31, 2023	December 31, 2022
Discount rate	4.25% ~ 5.15%	5.25% ~ 5.99%
Future wage growth rate	2.24% ~ 5.79%	2.1% ~ 5.84%
Mortality rate	Issued by Korea Insurance Development Institute	Issued by Korea Insurance Development Institute
Retirement rate	Experience rate for each employment classification	Experience rate for each employment classification

The weighted average maturity of defined benefit liability is a minimum of 5.01 to a maximum 10.76 years.

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AS OF DECEMBER 31, 2023 AND 2022

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


		December 31, 2023			December 31, 2022
Discount rate	Increase by 1% point		(137,355	)		(146,319	)
	Decrease by 1% point		158,691			170,529
Future wage growth rate	Increase by 1% point		160,663			174,546
	Decrease by 1% point		(141,355	)		(153,712	)

25.	OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES

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


	December 31, 2023			December 31, 2022
Other financial liabilities:
Accounts payable		10,188,192			6,001,858
Accrued expenses		4,339,314			3,219,349
Borrowings from trust accounts		5,207,791			3,475,118
Agency business revenue		271,946			213,845
Foreign exchange payables		887,817			822,446
Domestic exchange settlement credits		1,386,697			4,631,921
Lease liabilities		334,456			319,161
Other miscellaneous financial liabilities		3,520,039			4,148,621
Present value discount		(21,247	)		(20,451	)

Sub-total		26,115,005			22,811,868

Other liabilities:
Unearned income		390,455			351,633
Other miscellaneous liabilities		413,442			338,524

Sub-total		803,897			690,157

Total		26,918,902			23,502,025

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

26.	DERIVATIVES

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


			December 31, 2023
			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		317,018		—		—		—		—		—		—
Forwards		3,960,000		—		—		83,198		—		—		169,527
Swaps		138,734,758		—		698		367,333		512		135,263		213,885
Purchase options		150,000		—		—		6,556		—		—		—
Written options		400,000		—		—		—		—		—		15,359

Currency:
Futures		1,728		—		—		—		—		—		—
Forwards		97,713,561		—		—		1,935,832		—		—		885,870
Swaps		79,160,356		26,010		—		2,669,550		17,232		—		3,643,463
Purchase options		139,309		—		—		1,500		—		—		—
Written options		122,696		—		—		—		—		—		585

Equity:
Futures		480,311		—		—		—		—		—		—
Forwards		137		—		—		36		—		—		—
Swaps		461,112		—		—		126,028		—		—		1,994
Purchase options		16,444,709		—		—		608,296		—		—		—
Written options		16,887,247		—		—		—		—		—		1,012,341

Total		354,972,942		26,010		698		5,798,329		17,744		135,263		5,943,024


			December 31, 2022
			Assets						Liabilities
	Nominal amount		For cash flow hedge		For fair value hedge		For trading		For cash flow hedge		For fair value hedge		For trading
Interest rate:
Futures		42,545		—		—		—		—		—		—
Forwards		2,620,000		—		—		249,356		—		—		—
Swaps		136,550,518		2,041		—		440,540		—		193,831		474,158
Purchase options		170,000		—		—		9,308		—		—		—
Written options		310,000		—		—		—		—		—		16,752

Currency:
Futures		51,136		—		—		—		—		—		—
Forwards		90,134,257		—		—		3,083,082		—		—		1,360,535
Swaps		97,197,309		35,745		—		3,105,901		9,080		—		5,500,970
Purchase options		487,852		—		—		23,182		—		—		—
Written options		570,982		—		—		—		—		—		7,929

Equity:
Futures		958,589		—		—		—		—		—		—
Forwards		183		—		—		100		—		—		—
Swaps		568,835		—		—		90,237		—		—		673
Purchase options		29,801,478		—		—		1,204,475		—		—		—
Written options		29,874,836		—		—		—		—		—		1,544,108

Total		389,338,520		37,786		—		8,206,181		9,080		193,831		8,905,125

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.

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AS OF DECEMBER 31, 2023 AND 2022

(2)	Overview of the Group’s hedge accounting

Fair value hedge

As of December 31, 2023, the Group has applied fair value hedge on fixed interest rate foreign currency denominated debentures amounting to 3,682,140 million Won, and foreign currency loans amounting to 261,084 million Won. The purpose of the hedging is to avoid fair value volatility risk of fixed interest rate foreign and local 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 Compounding SOFR or CD 3M plus spread. In accordance with the terms of each interest rate swap contract designated as a hedging instrument, the Group receives interest at a fixed interest rate and pays interest at a variable interest rate.

Cash Flow Hedge

As of the December 31, 2023, the Group has applied cash flow hedge on local currency denominated debentures amounting to 179,945 million won and debentures on foreign currency amounting to 752,447 million won The Group’s hedging strategies are to ① Mitigate risks of cash flow fluctuation from variable interest rate debentures on local currency due to changes in market interest rate by entering into an interest rate swap contract and thereby designating it as hedging instrument; ② Mitigate the risks of cash flow fluctuation from principal and interest of variable interest rate debentures denominated in foreign currency due to changes in foreign exchange rates and interest rates by entering into a currency swap contract and thereby designating it as hedging instrument; ③ Mitigate the risks of cash flow fluctuation from principal and interest of fixed interest rate debentures denominated in foreign currency due to changes in foreign exchange rates and ④ Mitigate the risks of cash flow fluctuation in variable interest rate foreign currency borrowings resulting from changes in market interest rates and designate it as a hedging instrument through entering into currency swap contracts and interest rate swap contracts.

This means exchanging a predetermined nominal amount as set forth in the interest rate swap contract adjusted by the differences between the fixed and variable interest rates, which results in the conversion of interest rates of debentures in local currency from variable interest into fixed interest, eliminating the cash flow fluctuation risk.

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AS OF DECEMBER 31, 2023 AND 2022

In addition, this also means a payment of predetermined principal amount as set forth in the currency swap adjusted by fixed interest rate, an exchange of an amount calculated by applying variable interest rate to USD or applying fixed interest rate to SGD, and an exchange of the principal denominated in KRW and principal denominated in foreign currency at maturity eliminating cash flow fluctuation risk on principal and interest.

The hedge ratio is determined by matching the nominal amount of the hedging instrument to the face amount of the hedged item in accordance with interest rate swap and currency swap.

Only interest rate and foreign exchange rate fluctuation risk, which is the most significant factor in the cash flow fluctuation of the hedged item, is addressed in this hedging relationship, and other risk factors such as credit risk are not subject to hedging.

Thus, there could be hedge ineffectiveness arising from price margin set by the counterparty of hedging instruments and unilateral change in credit risk of any party in the transaction.

The interest rate swap, currency swap contract and the hedged item are all affected by the changes in market interest rate and foreign exchange rates which are basic factors of the derivative. The Group expects that the value of interest rate swap contract, currency swap contract and value of the hedged item will generally fluctuate in opposite direction.

Hedges of Net Investment in Foreign Operations

Foreign currency exposure arises from the Group’s net investments in Woori America Bank, Woori Bank(Cambodia) PLC and Hong Kong Woori Investment Bank, and overseas branches, which use USD as their functional currency. The risk arises from fluctuations in the spot exchange rate between USD and KRW. This may result in different net investment amounts.

The risk hedged in the net investment hedging is the volatility of KRW against USD, which may reduce the carrying amount of the Group’s net investments in Woori America Bank, Woori Bank(Cambodia) PLC and Hong Kong Woori Investment Bank.

A portion of the Group’s net investments in Woori America Bank, Woori Bank(Cambodia) PLC and Hong Kong Woori Investment Bank, and overseas branches are hedged in USD denominated foreign currency bonds(Carrying amount as of December 31, 2023: USD 863,959,317) and mitigate foreign exchange risk arising from the net assets of subsidiaries.

The bonds was designated as a hedging instrument for changes in the value of net investment resulting from fluctuations in the USD/KRW spot exchange rate.

To assess the effectiveness of the hedging instrument, the Group determines the economic relationship between the hedging instrument and the hedged item by comparing (offsetting) changes in the carrying amount of the liability due to changes in the spot exchange rate with changes. The Group’s policy is to hedge the net investment only within the principal range of the liability.

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AS OF DECEMBER 31, 2023 AND 2022

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


	December 31, 2023
	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		1,975,000,000		—		2,975,000,000
Interest rate swap (KRW)		240,000		—		20,000		260,000
Cash flow hedge
Interest rate risk
Interest rate swap (KRW)		—		140,000		—		140,000
Foreign currencies translation risk and interest rate risk
Currency swap (USD)		—		270,000,000		—		270,000,000
Foreign currencies translation risk
Currency swap (USD)		—		100,000,000		—		100,000,000
Currency swap (EUR)		—		194,780,000		—		194,780,000
Hedges of net investment in foreign operations
Exchange risk
Foreign currency bond (USD)		400,000,000		463,959,317		—		863,959,317


	December 31, 2022
	1 year or less		1 year to 5 years		More than 5 years		Total
Fair value hedge
Interest rate risk
Interest rate swap (USD)		—		2,075,000,000		300,000,000		2,375,000,000
Interest rate swap (AUD)		150,000,000		—		—		150,000,000
Interest rate swap (KRW)		150,000		—		—		150,000
Cash flow hedge
Interest rate risk
Interest rate swap (KRW)		50,000		140,000		—		190,000
Foreign currencies translation risk and interest rate risk
Currency swap (USD)		—		270,000,000		—		270,000,000
Foreign currencies translation risk
Currency swap (USD)		80,000,000		100,000,000		—		180,000,000
Currency swap (EUR)		—		194,780,000		—		194,780,000
Hedges of net investment in foreign operations
Exchange risk
Foreign currency bond (USD)		272,390,437		592,000,000		—		864,390,437

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(4)	The average interest rate and average currency rate of the hedging instrument as of December 31, 2023 and 2022 are as follows:


		December 31, 2023
		Average interest rate and average exchange rate
Fair value hedge
Interest rate risk
Interest rate swap (USD)		Fixed 3.60% receipt and (C.SOFR) + 1.47% paid
Interest rate swap (KRW)		Fixed 4.13% receipt and CD 3M paid
Cash flow hedge
Interest rate risk
Interest rate swap (KRW)		KRW CMS 5Y+0.46% receipt, 3.65% paid
Foreign currencies translation risk and interest rate risk
Currency swap (USD)		USD 1M SOFR+1.12% receipt, KRW 4.37% paid, USD/KRW = 1,293.97
Foreign currencies translation risk
Currency swap (USD)		USD 1.75% receipt, KRW 1.63% paid, USD/KRW = 1,138.50
Currency swap (EUR)		EUR 1.98% receipt, KRW 3.40% paid, EUR/KRW = 1,344.08
Hedges of net investment
Exchanging rate risk
Foreign currency denominated debentures(USD/KRW)		1,306.12


		December 31, 2022
		Average interest rate and average exchange rate
Fair value hedge
Interest rate risk
Interest rate swap (USD)		Fixed 3.62% receipt and Libor 3M+1.45% floating paid
Interest rate swap (USD)		Fixed 2.05% receipt and (C.SOFR)+0.65% paid
Interest rate swap (AUD)		Fixed 0.84% receipt and BBSW 3M+0.72% paid
Interest rate swap (KRW)		Fixed 3.13% receipt and CD 3M paid
Cash flow hedge
Interest rate risk
Interest rate swap (KRW)		KRW CMS 5Y+0.46% receipt, 3.65% paid
Interest rate swap (KRW)		KRW CD+0.33% receipt, 1.68% paid
Foreign currencies translation risk and interest rate risk
Currency swap (USD)		USD 1M Libor+0.79% receipt, KRW 0.80% paid, KRW/USD = 1,226.29
Foreign currencies translation risk
Currency swap (USD)		USD 1.50% receipt, KRW 1.57% paid, KRW/USD = 1,140.50
Currency swap (EUR)		EUR 1.98% receipt, KRW 3.86% paid, KRW/EUR = 1,344.08
Hedges of net investment
Exchanging rate risk
Foreign currency denominated debentures(KRW/USD)		1,344.37

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


	December 31, 2023
			Carrying amount of the hedging instrument
	Nominal amounts of the hedging instrument		Assets		Liabilities		Line item in the statement of financial position where the hedging instrument is located		Changing in fair value used for calculating hedge ineffectiveness
	Nominal amounts of the hedging instrument		Assets		Liabilities
Fair value hedge
Interest rate risk
Interest rate Swap(USD)		2,975,000,000		698		135,263		Derivative assets (designated for hedging)		55,651
Interest rate Swap(KRW)		260,000
Cash flow hedge
Interest rate risk
Interest rate swap(KRW)		140,000		—		512		Derivative liabilities (designated for hedging)		(2,433	)
Foreign currency translation risk and interest rate risk
Currency swap(USD)		270,000,000		7,356		17,232		Derivative assets (designated for hedging) Derivative liabilities (designated for hedging)		(913	)
Foreign currency translation risk
Currency swap(USD)		100,000,000		10,956		—		Derivative assets (designated for hedging)		(5,644	)
Currency swap(EUR)		194,780,000		7,698		—		Derivative assets (designated for hedging)		19,063
Hedges of net investment in foreign operations
Exchange rate risk
Foreign currency bond(USD)		863,959,317		—		1,113,989		Foreign currency bond		(19,088	)


	December 31, 2022
			Carrying amount of the hedging instrument
	Nominal amounts of the hedging instrument		Assets		Liabilities		Line item in the statement of financial position where the hedging instrument is located		Changing in fair value used for calculating hedge ineffectiveness
	Nominal amounts of the hedging instrument		Assets		Liabilities
Fair value hedge
Interest rate risk
Interest rate Swap(USD)		2,375,000,000		—		193,831		Derivative assets (designated for hedging) Derivative liabilities (designated for hedging)		(247,765	)
Interest rate Swap(AUD)		150,000,000
Interest rate Swap(KRW)		150,000
Cash flow hedge
Interest rate risk
Interest rate swap(KRW)		190,000		2,041		—		Derivative liabilities (designated for hedging)		1,690
Foreign currency translation risk and interest rate risk
Currency swap(USD)		270,000,000		17,909		—		Derivative liabilities (designated for hedging)		58,253
Foreign currency translation risk
Currency swap(USD)		180,000,000		17,836		—		Derivative liabilities (designated for hedging)		9,317
Currency swap(EUR)		194,780,000		—		9,080		Derivative liabilities (designated for hedging)		(10,286	)
Hedges of net investment in foreign operations
Exchange rate risk
Foreign currency bond(USD)		864,390,437		—		1,095,442		Foreign currency bond		(28,553	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


	December 31, 2023
	Carrying amount of the hedged item				Accumulated amount of fair value hedge adjustments on the hedged item included in the carrying amount of the hedged item				Line item in the statement of financial position in which the hedged item is included		Changing in fair value used for calculating hedge ineffectiveness			Cash flow hedge reserve (*)
	Assets		Liabilities		Assets		Liabilities							Cash flow hedge reserve (*)
Fair value hedge
Interest rate risk
Debentures		—		3,943,224		—		142,902		Debentures		(58,306	)		—
Cash flow hedge
Interest rate risk
Debentures		—		179,945		—		—		Debentures		2,433			25
Foreign currencies translation risk and interest rate risk
Debentures		—		346,388		—		—		Debentures		22,914			(8,819	)
Foreign currencies translation risk
Debentures		—		406,059		—		—		Debentures		(13,419	)		(11,416	)
Hedges of net investment in foreign operations Exchange rate risk
Foreign operations net asset		—		1,113,989		—		—		Foreign operations net asset		19,088			(34,750	)

(*)	After tax amount


	December 31, 2022
	Carrying amount of the hedged item				Accumulated amount of fair value hedge adjustments on the hedged item included in the carrying amount of the hedged item					Line item in the statement of financial position in which the hedged item is included		Changing in fair value used for calculating hedge ineffectiveness			Cash flow hedge reserve (*)
	Assets		Liabilities		Assets		Liabilities								Cash flow hedge reserve (*)
Fair value hedge
Interest rate risk
Debentures		—		3,076,983		—		(199,804	)		Debentures		257,911			—
Cash flow hedge
Interest rate risk
Debentures		—		229,892		—		—			Debentures		(3,742	)		2,531
Foreign currencies translation risk and interest rate risk
Debentures		—		342,019		—		—			Debentures		(23,296	)		8,648
Foreign currencies translation risk
Debentures		—		752,901		—		—			Debentures		11,256			(24,600	)
Hedges of net investment in foreign operations Exchange rate risk
Foreign operations net asset		—		1,095,442		—		—			Foreign operations net asset		28,553			(38,797	)

(*)	After tax amount

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


		For the year ended December 31, 2023
		Hedge ineffectiveness recognized in profit or loss			Line item in the profit or loss that includes hedge ineffectiveness
Fair value hedge	Interest rate risk		(2,655	)	Other net operating income(expense)


		For the year ended December 31, 2022
		Hedge ineffectiveness recognized in profit or loss		Line item in the profit or loss that includes hedge ineffectiveness
Fair value hedge	Interest rate risk		10,146	Other net operating income(expense)

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


		For the year ended December 31, 2023
		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		(2,433	)		—		—		Other net operating income (expense)		—		Other net operating income (expense)
	Foreign currencies translation risk and interest rate risk		(913	)		—		(4,871	)	Other net operating income (expense)		(11,683	)	Other net operating income (expense)
	Foreign currencies translation risk		13,419			—		(3,521	)	Other net operating income (expense)		(6,950	)	Other net operating income (expense)


		For the year ended December 31, 2022
		Changes in the value of hedging instruments recognized in OCI			Hedge ineffectiveness recognized in profit or loss		Changes in the value of foreign basis spread recognized in OCI			Line item recognized in the profit or loss	Amounts reclassified from cash flow hedge reserve to profit or loss			Line item affected in profit or loss due to reclassification
Cash flow hedge	Interest rate risk		1,653			37		—		Other net operating income (expense)		220		Other net operating income (expense)
	Foreign currencies translation risk and interest rate risk		58,253			—		(1,721	)	Other net operating income (expense)		(53,743	)	Other net operating income (expense)
	Foreign currencies translation risk		(969	)		—		2,046		Other net operating income (expense)		(16,111	)	Other net operating income (expense)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(9)	The amounts recognized in profit or loss and other comprehensive income related to the hedging of net investments in foreign operations are as follows (Unit: Korean Won in millions):


		For the year ended December 31, 2023
		Profit or loss recognized in OCI			Hedge ineffectiveness recognized in profit or loss		Line item which recognized the hedge ineffectiveness
Hedges of net investment in foreign operation	Exchange rate risk		(19,088	)		5,039		(14,049	)


		For the year ended December 31, 2022
		Profit or loss recognized in OCI			Hedge ineffectiveness recognized in profit or loss		Line item which recognized the hedge ineffectiveness
Hedges of net investment in foreign operation	Exchange rate risk		(38,797	)		-		-

27.	DEFERRED DAY 1 PROFITS OR LOSSES

Changes in deferred day 1 profits or losses are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2023			2022
Beginning balance		17,964			29,111
New transactions		—			21,656
Amounts recognized in losses		(10,116	)		(32,803	)

Ending balance		7,848			17,964

In case some variables to measure fair values of financial instruments are not observable in the market, valuation techniques are utilized to evaluate such financial instruments. Those financial instruments are recorded the transaction price as at the time of acquisition, even though there are difference noted between the transaction price and the fair value. The table above presents the difference yet to be realized as profit or losses as of December 31,2023 and 2022.

28.

EQUITY

(1)	Details of equity as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023			December 31, 2022
Capital
Common stock capital		3,802,676			3,640,303
Hybrid securities		3,611,129			3,112,449
Capital surplus
Paid in capital in excess of par		854,499			643,544
Others		81,064			38,841

Sub-total		935,563			682,385

Capital adjustments
Treasury stocks		(39,348	)		(3,819	)
Other adjustments (*1)		(1,648,535	)		(1,780,367	)

Sub-total		(1,687,883	)		(1,784,186	)

Accumulated other comprehensive income
Financial assets at FVTOCI		79,694			(645,731	)
Changes in capital due to equity method		3,471			475

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022


Gain (loss) on foreign currency translation of foreign operations	15,579		(24,202	)
Gain (loss) on hedges of net investment in foreign operations	(34,750	)	(20,701	)
Remeasurements of defined benefit plan	(24,262	)	55,235
Gain (loss) on valuation of cash flow hedge	(20,806	)	(4,282	)

Sub-total	18,926		(639,206	)

Retained earnings (2) (3)	24,986,470		23,750,152
Non-controlling interest (*4)	1,730,609		2,865,445

Total	33,397,490		31,627,342

(*1)	Included 178,060 million Won in capital transaction gains and losses recognized by Woori Bank and (formerly) Woori Financial Group in 2014 and 2,238,228 million Won due to the spin-off of Gyeongnam Bank and Gwangju Bank.

(*2)	The regulatory reserve for credit losses in retained earnings amounted to 2,839,475 million Won and 2,966,960 million Won as of December 31, 2023 and 2022, respectively in accordance with the relevant article.

(*3)	The earned surplus reserve in retained earnings amounted to 300,190 million Won and 181,860 million Won as of December 31, 2023 and 2022 in accordance with the Article 53 of the Financial Holding Company Act.

(*4)

The hybrid securities issued by Woori Bank amounting to 1,546,447 million Won and 2,344,816 million Won as of December 31, 2023 and 2022, respectively, are recognized as non-controlling interests. 95,637 million Won and 113,995 million Won of dividends for the hybrid securities issued by Woori Bank are allocated to net profit and loss of the non-controlling interests for the years ended December 31, 2023 and 2022, respectively.

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


	December 31, 2023		December 31, 2022
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		751,949,461 Shares		728,060,549 Shares
Capital stock		3,802,676 million Won		3,640,303 million Won

(3)	Hybrid securities

The bond-type hybrid securities classified as owner’s equity are as follows (Unit: Korean Won in millions):


	Issue date		Maturity		Interest rate (%)		December 31, 2023			December 31, 2022
Securities in local currency		2019-07-18		—		3.49		500,000			500,000
Securities in local currency		2019-10-11		—		3.32		500,000			500,000
Securities in local currency		2020-02-06		—		3.34		400,000			400,000
Securities in local currency		2020-06-12		—		3.23		300,000			300,000
Securities in local currency		2020-10-23		—		3.00		200,000			200,000
Securities in local currency		2021-04-08		—		3.15		200,000			200,000
Securities in local currency		2021-10-14		—		3.60		200,000			200,000
Securities in local currency		2022-02-17		—		4.10		300,000			300,000
Securities in local currency		2022-07-28		—		4.99		300,000			300,000
Securities in local currency		2022-10-25		—		5.97		220,000			220,000
Securities in local currency		2023-02-10		—		4.65		300,000			—
Securities in local currency		2023-09-07		—		5.04		200,000			—
Issuance cost								(8,871	)		(7,551	)

Total								3,611,129			3,112,449

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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 year ended December 31, 2023
	Beginning balance			Increase (decrease) (*)			Reclassification adjustments			Income tax effect			Ending balance
Net gain (loss) on valuation of financial assets at FVTOCI		(645,731	)		783,583			200,309			(258,467	)		79,694
Changes in capital due to equity method		475			(1,434	)		—			4,430			3,471
Gain (loss) on foreign currency translation of foreign operations		(24,202	)		39,458			—			323			15,579
Gain (loss) on hedges of net investment in foreign operations		(20,701	)		(19,088	)		—			5,039			(34,750	)
Remeasurement gain (loss) related to defined benefit plan		55,235			(108,217	)		—			28,720			(24,262	)
Gain (loss) on valuation of cash flow hedge		(4,282	)		(15,906	)		(944	)		326			(20,806	)

Total		(639,206	)		678,396			199,365			(219,629	)		18,926

(*)

The increase(decrease) of financial asset valuation profit or loss at fair value through other comprehensive income and non-current assets held for sale are changes due to the period evaluation, and the reclassification adjustments amounting to 86 million Won and (50) million Won are due to disposal of equity securities and non-current assets held for sale, respectively during the period.


	For the year ended December 31, 2022
	Beginning balance			Increase (decrease) (*)			Reclassification adjustments			Income tax effect			Ending balance
Net gain (loss) on valuation of financial assets at FVTOCI		(162,522	)		(659,906	)		21,498			155,199			(645,731	)
Changes in capital due to equity method		(138	)		6,563			—			(5,950	)		475
Gain (loss) on foreign currency translation of foreign operations		(63,781	)		33,368			—			6,211			(24,202	)
Gain (loss) on hedges of net investment in foreign operations		—			(28,553	)		—			7,852			(20,701	)
Remeasurement gain (loss) related to defined benefit plan		(195,944	)		346,553			—			(95,374	)		55,235
Gain (loss) on valuation of cash flow hedge		5,553			(10,373	)		(220	)		758			(4,282	)
Capital related to non-current assets held for sale		279			(385	)		—			106			—

Total		(416,553	)		(312,733	)		21,278			68,802			(639,206	)

(*)

The increase(decrease) of financial asset valuation profit or loss at fair value through other comprehensive income and non-current assets held for sale are changes due to the period evaluation, and the reclassification adjustments amounting to (10,254) million Won and 279 million Won are due to disposal of equity securities and non-current assets held for sale, respectively during the period.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(5)	Regulatory Reserve for Credit Loss

In accordance with Article 26 ~ 28 of the Financial holding company Supervision Regulations, the Group calculates and discloses the regulatory reserve for credit loss.

Balance of the regulatory reserve for credit loss

Balance of the planned regulatory reserve for credit loss is as follows (Unit: Korean Won in millions):


	December 31, 2023			December 31, 2022
Beginning balance		2,839,475			2,966,960
Planned provision of regulatory reserve (reversal) for credit loss		(446,933	)		(127,485	)

Ending balance		2,392,542			2,839,475

Provision of regulatory reserve for credit loss, adjusted income after the provision of regulatory reserve and others

Planned reserves provided, adjusted net income after the planned reserves provided and adjusted EPS after the planned reserves provided are as follows (Unit: Korean Won in millions, except for EPS amount):


	For the years ended December 31
	2023			2022
Net income before regulatory reserve		2,626,894			3,323,982
Provision of regulatory reserve (reversal) for credit loss		(446,933	)		(127,485	)
Adjusted net income after the provision of regulatory reserve		3,073,827			3,451,467
Dividends to hybrid securities		(131,148	)		(91,756	)
Adjusted net income after regulatory reserve and dividends to hybrid securities		2,942,679			3,359,711
Adjusted EPS after regulatory reserve and the dividends to hybrid securities (Unit: Korean Won)		4,002			4,615

(6)	Treasury stock

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


	December 31, 2023
	Beginning balance		Acquisition		Disposal and others			Ending balance
Number of shares		343,991		13,552,312		(10,468,806	)		3,427,497

Carrying amount		3,819		157,222		(121,693	)		39,348


	December 31, 2022
	Beginning balance		Acquisition		Disposal and others		Ending balance
Number of shares		343,991		—		—		343,991

Carrying amount		3,819		—		—		3,819

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

29.

DIVIDENDS

(1)	Dividends per share and the total dividends for the fiscal year ending December 31, 2022 were 980 Won and 713,497 million Won, respectively, and the dividends were approved at the regular general shareholders’ meeting held on March 24, 2023 and were paid in April 2023.

(2)	On July 21, 2023, in accordance with a resolution of the Board of Directors, the Group declared the quarterly dividend of 180 Won per share (total dividend of 130,748 million Won) with June 30, 2023 as record date, and the dividends were paid in August 2023.

(3)	On October 26, 2023, in accordance with a resolution of the Board of Directors, the Group declared the quarterly dividend of 180 won per share (a total dividend of 135,341 million Won) with September 30, 2023 as record date, and the dividends were paid in November 2023.

(4)

A dividend in respect of the year ended December 31, 2023, of 640 won per share, amounting to a total dividend of 481,213 million Won, is to be proposed to shareholders at the annual general meeting on March 22, 2024, with February 29, 2024 as record date. These financial statements do not include this dividend payable.

30.	NET INTEREST INCOME

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


	For the years ended December 31
	2023		2022
Financial assets at FVTPL		192,094		106,698
Financial assets at FVTOCI		999,407		632,615
Financial assets at amortized cost:
Securities at amortized cost		782,513		515,246
Loans and other financial assets at amortized cost:
Interest on due from banks		543,789		244,331
Interest on loans		18,042,706		13,109,022
Interest of other receivables		81,045		46,637

Subtotal		18,667,540		13,399,990

Total		20,641,554		14,654,549

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


	For the years ended December 31
	2023		2022
Interest on deposits due to customers		8,738,249		4,120,811
Interest on borrowings		1,294,710		598,185
Interest on debentures		1,507,108		1,036,191
Other interest expense		348,588		195,090
Interest on lease liabilities		10,359		7,693

Total		11,899,014		5,957,970

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

31.	NET FEES AND COMMISSIONS INCOME

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


	For the years ended December 31
	2023		2022
Fees and commission received for brokerage		146,216		185,545
Fees and commission received related to credit		182,151		189,856
Fees and commission received for electronic finance		125,760		130,712
Fees and commission received on foreign exchange handling		55,993		56,812
Fees and commission received on foreign exchange		99,071		96,713
Fees and commission received for guarantee		88,580		85,340
Fees and commission received on credit card		640,918		594,897
Fees and commission received on securities business		58,553		111,211
Fees and commission from trust management		266,197		266,447
Fees and commission received on credit information		10,768		10,190
Fees and commission received related to lease		698,463		572,563
Other fees		193,144		199,414

Total		2,565,814		2,499,700

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


	For the years ended December 31
	2023		2022
Fees and commissions paid		339,340		325,536
Credit card commission		488,742		446,885
Securities business commission		1,287		1,414
Others		15,964		15,695

Total		845,333		789,530

32.	DIVIDEND INCOME

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


	For the years ended December 31
	2023		2022
Dividend income related to financial assets at FVTPL		222,357		136,136
Dividend income related to financial assets at FVTOCI		17,936		23,846

Total		240,293		159,982

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


	For the years ended December 31
	2023		2022
Dividend income recognized from assets held:
Equity securities		17,936		23,846

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

33.	NET GAIN OR LOSS ON FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS MANDATORILY MEASURED AT FAIR VALUE

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


	For the years ended December 31
	2023		2022
Gain on financial instruments at fair value through profit or loss measured at fair value		488,486		238,502

Total		488,486		238,502

(2)	Details of net gain or loss on financial instruments at fair value through profit or loss measured at fair value and financial instruments held for trading are as follows (Unit: Korean Won in millions):


			For the years ended December 31
			2023			2022
Financial assets at FVTPL	Securities	Gain on transactions and valuation		889,250			294,667
		Loss on transactions and valuation		(191,144	)		(553,093	)

		Sub-total		698,106			(258,426	)

	Loans	Gain on transactions and valuation		6,064			24,005
		Loss on transactions and valuation		(2,289	)		(2,219	)

		Sub-total		3,775			21,786

	Other financial assets	Gain on transactions and valuation		9,742			21,602
		Loss on transactions and valuation		(19,291	)		(12,314	)

		Sub-total		(9,549	)		9,288

		Sub-total		692,332			(227,352	)

Derivatives (Held for trading)	Interest rates derivatives	Gain on transactions and valuation		4,741,233			5,216,543
		Loss on transactions and valuation		(4,990,352	)		(3,625,834	)

		Sub-total		(249,119	)		1,590,709

	Currency derivatives	Gain on transactions and valuation		7,677,720			14,601,674
		Loss on transactions and valuation		(7,528,291	)		(15,713,074	)

		Sub-total		149,429			(1,111,400	)

	Equity derivatives	Gain on transactions and valuation		3,169,071			2,836,843
		Loss on transactions and valuation		(3,273,202	)		(2,850,334	)

		Sub-total		(104,131	)		(13,491	)

	Other derivatives	Gain on transactions and valuation		14			49
		Loss on transactions and valuation		(39	)		(13	)

		Sub-total		(25	)		36

		Sub-total		(203,846	)		465,854

		Net, total		488,486			238,502

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

34.	NET GAIN OR LOSS ON FINANCIAL ASSETS AT FVTOCI

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


	For the years ended December 31
	2023			2022
Gain (Loss) on redemption of securities		104			(7	)
Losses on transactions of securities		(37,745	)		(21,491	)

Total		(37,641	)		(21,498	)

35.	REVERSAL OF (PROVISION FOR) IMPAIRMENT LOSSES DUE TO CREDIT LOSS

Reversal of (provision for) impairment losses due to credit loss are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2023			2022
Reversal(provision) due to credit loss on financial assets measured at FVTOCI		(16,542	)		827
Provision for impairment loss due to credit loss on securities at amortized cost		(5,549	)		(3,151	)
Provision for impairment loss due to credit loss on loan and other financial assets at amortized cost		(1,839,987	)		(881,668	)
Provision for guarantees		(3,555	)		(7,611	)
Reversal of provision for unused loan commitment (provision for unused loan commitment)		(29,283	)		6,332

Total		(1,894,916	)		(885,271	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

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


			For the years ended December 31
			2023		2022
Employee benefits	Short-term employee benefits	Salaries		1,831,137		1,980,363
		Employee fringe benefits		600,001		590,255
	Share based payment			12,946		9,632
	Retirement benefit service costs			119,670		169,303
	Termination			164,922		162,019

	Subtotal			2,728,676		2,911,572

Depreciation and amortization				503,035		521,827
Other general and administrative expenses	Rent			124,355		80,130
	Taxes and public dues			190,334		157,905
	Service charges			245,656		233,495
	Computer and IT related			144,017		127,186
	Telephone and communication			88,018		84,204
	Operating promotion			53,896		53,733
	Advertising			161,896		160,464
	Printing			6,072		6,799
	Traveling			13,364		10,716
	Supplies			9,156		8,309
	Insurance premium			14,380		20,670
	Maintenance			24,932		23,266
	Water, light, and heating			19,161		16,165
	Vehicle maintenance			14,725		14,831
	Others(*)			101,760		98,618

	Sub-total			1,211,722		1,096,491

Total				4,443,433		4,529,890

(*)	In-house welfare fund contributions amounted to 40,047 million Won and 40,200 million Won as of December 31, 2023 and 2022, respectively.

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


	For the years ended December 31
	2023		2022
Gains on transactions of foreign exchange		1,428,737		1,403,083
Gains related to derivatives (designated for hedging)		114,875		71,179
Gains on fair value hedged items		8,986		257,910
Others		288,862		249,509

Total		1,841,460		1,981,681

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


	For the years ended December 31
	2023		2022
Losses on transactions of foreign exchange		1,295,557		1,181,663
KDIC deposit insurance premium		464,213		423,834
Contribution to miscellaneous funds		453,805		402,057
Losses related to derivatives (Designated for hedging)		35,583		250,268
Losses on fair value hedged items		72,601		—
Others (*)		1,040,424		736,112

Total		3,362,183		2,993,934

(*)	Other expense includes 22,349 million Won and 14,664 million Won for intangible asset amortization cost and 462,394 million Won and 388,895 million Won for lease depreciation cost for the years ended December 31, 2023 and 2022, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(4)	Share-based payment

Details of performance condition share-based payment granted to executives as of December 31, 2023 and 2022 are as follows.

Performance condition share-based payment


Subject to		Shares granted for the year 2020
Type of payment		Cash-settled
Vesting period		January 1, 2020 ~ December 31, 2023
Date of payment		2024-01-01
Fair value (*1)		12,885 Won
Valuation method		Black-Scholes Model
Expected dividend rate		6.25%
Expected maturity date		—
Number of shares remaining	As of December 31, 2023	944,343 shares
	As of December 31, 2022	944,343 shares
Number of shares granted (*2)	As of December 31, 2023	944,343 shares
	As of December 31, 2022	944,343 shares

Subject to		Shares granted for the year 2021
Type of payment		Cash-settled
Vesting period		January 1, 2021 ~ December 31, 2024
Date of payment		2025-01-01
Fair value (*1)		12,105 Won
Valuation method		Black-Scholes Model
Expected dividend rate		6.25%
Expected maturity date		1 year
Number of shares remaining	As of December 31, 2023	1,105,515 shares
	As of December 31, 2022	1,105,515 shares
Number of shares granted (*2)	As of December 31, 2023	1,105,515 shares
	As of December 31, 2022	1,105,515 shares

Subject to		Shares granted for the year 2022
Type of payment		Cash-settled
Vesting period		January 1, 2022 ~ December 31, 2025
Date of payment		2026-01-01
Fair value (*1)		11,371 Won
Valuation method		Black-Scholes Model
Expected dividend rate		6.25%
Expected maturity date		2 years
Number of shares remaining	As of December 31, 2023	968,119 shares
	As of December 31, 2022	968,119 shares
Number of shares granted (*2)	As of December 31, 2023	968,119 shares
	As of December 31, 2022	968,119 shares

Subject to		Shares granted for the year 2023
Type of payment		Cash-settled
Vesting period		January 1, 2023 ~ December 31, 2026
Date of payment		2027-01-01
Fair value (*1)		10,683 Won
Valuation method		Black-Scholes Model
Expected dividend rate		6.25%
Expected maturity date		3 years
Number of shares remaining	As of December 31, 2023	924,077 shares
	As of December 31, 2022	—
Number of shares granted (*2)	As of December 31, 2023	924,077 shares
	As of December 31, 2022	—

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(*1)

As the amount of payment varies according to the base price (the arithmetic average of the weighted average stock price of transactions in the past one week, the past one month, and the past two months) at the date of payment, the fair value is calculated to measure the liability according to the Black Scholes model based on the base price at the time of each settlement.

(*2)

It is a system in which the amount of stock payable is determined at the beginning, and the payment rate is determined in accordance with the degree of achievement of the pre-set performance target. Performance is evaluated by long-term performance indicators such as relative shareholder return, net profit, return on equity (ROE), non-performing loan ratio, and job performance.

The Group accounts for performance condition share-based payments according to the cash-settled method and the fair value of the liabilities is reflected in the compensation costs by re-measuring every closing period. As of December 31, 2023 and 2022, the carrying amount of the liabilities related to the performance condition share-based payments recognized by the Group amounts to 46,741 million Won and 41,334 million Won, respectively, including the carrying amount of liabilities related to key management of 19,924 million Won and 17,494 million Won, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

37.	NON-OPERATING INCOME (EXPENSES)

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


	For the years ended December 31
	2023			2022
Gains on valuation of investments in joint ventures and associates		132,541			98,858
Losses on valuation of investments in joint ventures and associates		(22,710	)		(11,133	)
Impairment losses of investments in joint ventures and associates		—			(17,728	)

Total		109,831			69,997

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


	For the years ended December 31
	2023			2022
Other non-operating incomes		117,746			158,778
Other non-operating expenses		(209,153	)		(173,924	)

Total		(91,407	)		(15,146	)

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


	For the years ended December 31
	2023		2022
Rental fee income		26,477		22,798
Gains on disposal of investments in joint ventures and associates		33,123		599
Gains on disposal of Property, Plant and Equipment, intangible assets and other assets		5,267		55,852
Reversal of impairment losses of Property, Plant and Equipment, intangible assets and other assets		230		310
Others (*)		52,649		79,219

Total		117,746		158,778

(*)	‘Others’ for the year ended December 31, 2023 and 2022 include 14,060 million Won and 46,536 million Won of other special gain related to other provisions.

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


	For the years ended December 31
	2023		2022
Depreciation on investment properties		5,398		3,925
Operating expenses on investment properties		2,058		1,448
Losses on disposal of investments in joint ventures and associates		588		3,690
Losses on disposal of Property, Plant and Equipment, intangible assets and other assets		1,873		3,177
Impairment losses of Property, Plant and Equipment, intangible assets and other assets		129		260
Donation		63,729		50,547
Others (*)		135,378		110,877

Total		209,153		173,924

(*)	Other special losses related to other provisions for the years ended December 31, 2023 and 2022 are 66,910 million Won and 18,458 million Won, respectively, and other special losses related to employee incidents for the year ended December 31, 2022 are 63,354 million Won.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

38.	INCOME TAX EXPENSE

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


	For the years ended December 31
	2023			2022
Current tax expense:
Current tax expense with respect to the current period		689,395			1,332,636
Adjustments recognized in the current period in relation to the tax expense of prior periods		(22,825	)		(13,982	)
Income tax expense directly attributable to other equity		5,039			7,852

Sub-total		671,609			1,326,506

Deferred tax expense
Change in deferred tax assets (liabilities) due to temporary differences		442,852			(234,909	)
Income tax expense(income) directly attributable to equity		(224,668	)		68,802

Others		766			993

Sub-total		218,950			(165,114	)

Income tax expense		890,559			1,161,392

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


	For the years ended December 31
	2023			2022
Net income before income tax expense		3,517,453			4,485,374
Tax calculated at statutory tax rate (1)(2)		859,608			1,154,285
Adjustments:
Effect of income that is exempt from taxation		(37,500	)		(73,488	)
Effect of expenses that are not deductible in determining taxable income		12,163			26,793
Adjustments recognized in the current period in relation to the current tax of prior periods		(22,456	)		(14,088	)
Others		78,744			67,890

Sub-total		30,951			7,107

Income tax expense		890,559			1,161,392

Effective tax rate		25.32	%		25.90	%

(*1)	The applicable income tax rate: 9.9% up to 200 million Won in tax basis, 20.9% over 200 million Won to 20 billion Won, 23.1% over 20 billion Won to 300 billion Won and 26.4% over 300 billion Won.

(*2)	The applicable income tax rate of prior fiscal year: 11% up to 200 million Won in tax basis, 22% over 200 million Won to 20 billion Won, 24.2% over 20 billion Won to 300 billion Won and 27.5% over 300 billion Won.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(3)	Changes in deferred tax assets and liabilities for the years ended December 31, 2023 and 2022, are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023
	Beginning balance			Business combination			Recognized as income (expense)			Recognized as other comprehensive income (expense)			Ending Balance
Gain (loss) on financial assets		373,145			—			(272,072	)		(258,467	)		(157,394	)
Gain on valuation of investment stocks accounted in equity method		20,555			—			(35,357	)		4,430			(10,372	)
Gain (loss) on valuation of derivatives		10,617			—			24,869			326			35,812
Accrued income		(90,330	)		—			(42,608	)		—			(132,938	)
Provision for loan losses		(20,105	)		—			61,093			—			40,988
Loan and receivables written off		7,926			—			1,846			—			9,772
Loan origination costs and fees		(169,093	)		—			(4,324	)		—			(173,417	)
Defined benefit obligation		369,785			—			29,308			28,172			427,265
Deposits with employee retirement insurance trust		(450,222	)		—			(50,044	)		548			(499,718	)
Provision for guarantee		8,328			—			(54	)		—			8,274
Other provision		87,229			—			91,888			—			179,117
Others (*)		(70,335	)		(11,593	)		(22,729	)		323			(104,334	)

Net deferred tax assets(liabilities)		77,500			(11,593	)		(218,184	)		(224,668	)		(376,945	)

(*)	Among the deferred tax assets and liabilities classified as ‘Others,’ the deferred tax asset arising from unused tax losses amounts to 1,998 million won.


	For the year ended December 31, 2022
	Beginning balance			Business combination			Recognized as income (expense)			Recognized as other comprehensive income (expense)			Ending Balance
Gain (loss) on financial assets		273,356			—			(55,410	)		155,199			373,145
Gain on valuation using the equity method of accounting		15,260			—			11,139			(5,844	)		20,555
Gain (loss) on valuation of derivatives		(149,805	)		—			159,664			758			10,617
Accrued income		(82,482	)		—			(7,848	)		—			(90,330	)
Provision for loan losses		(34,625	)		—			14,520			—			(20,105	)
Loan and receivables written off		8,244			—			(318	)		—			7,926
Loan origination costs and fees		(194,463	)		—			25,370			—			(169,093	)
Defined benefit liability		449,615			—			15,760			(95,590	)		369,785
Deposits with employee retirement insurance trust		(432,001	)		—			(18,437	)		216			(450,222	)
Provision for guarantee		7,424			—			904			—			8,328
Other provision		100,571			—			(13,342	)		—			87,229
Others (*)		(116,907	)		(1,473	)		33,982			14,063			(70,335	)

Net deferred tax assets		(155,813	)		(1,473	)		165,984			68,802			77,500

(*)	Among the deferred tax assets and liabilities classified as ‘Others,’ the deferred tax asset arising from unused tax losses amounts to 3,536 million won.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


	December 31, 2023			December 31, 2022
Deductible temporary differences		313,565			330,376
Tax loss carry forward		16,823			49,405
Taxable temporary differences		(9,138,085	)		(8,898,834	)

Total		(8,807,697	)		(8,519,053	)

No deferred income tax asset has been recognized for the deductible temporary difference of 302,214 million Won associated with investments in subsidiaries as of December 31, 2023, because it is not probable that the temporary differences will be reversed in the foreseeable future. Also, no deferred income tax asset has been recognized for the other 11,912 million won due to the uncertainty of its feasibility in the future.

No deferred income tax liability has been recognized for the taxable temporary difference of 9,138,085 million won associated with investment in subsidiaries as of December 31, 2023, due to the following reasons:

-	The Group is able to control the timing of the reversal of the temporary difference.

-	It is probable that the temporary difference will not be reversed in the foreseeable future.

As of December 31, 2023, the expected extinctive date of tax loss carry forward that are not recognized as deferred tax assets are as follows (Unit: Korean Won in millions):


	1 year or less		1 – 2 years		2 – 3 years		More than 3 years
Tax loss carry forward		16,823		—		—		—

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


	December 31, 2023			December 31, 2022
Gain on valuation of financial assets at FVTOCI		(44,591	)		213,876
Loss on valuation of equity method investments		664			(3,766	)
Gain on foreign currency translation of foreign operations		10,261			9,938
Gain on valuation of hedge accounting of the net investment in foreign operations		14,854			9,815
Remeasurements of the defined benefit plan		8,136			(20,584	)
Loss on derivatives designated as cash flow hedge		240			(86	)

Total		(10,436	)		209,193

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


	December 31, 2023		December 31, 2022
Current tax assets		203,542		53,274
Current tax liabilities		103,655		843,555

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AS OF DECEMBER 31, 2023 AND 2022

39.	EARNINGS PER SHARE (“EPS”)

(1)	Basic EPS is calculated by dividing net income attributable to common shareholders by weighted-average number of common shares outstanding (Unit: Korean Won in millions, except for EPS and number of shares):


	For the years ended December 31
	2023			2022
Net income attributable to common shareholders		2,506,296			3,141,680
Dividends to hybrid securities		(131,148	)		(91,756	)
Net income attributable to common shareholders		2,375,148			3,049,924
Weighted average number of common shares outstanding (Unit: million shares)		735			728
Basic EPS (Unit: Korean Won)		3,230			4,191

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


	For the year ended December 31, 2023
	Number of shares			Accumulated number of shares outstanding during period
Common shares issued at the beginning of the period		728,060,549			265,742,100,385
Treasury stocks		(343,991	)		(125,556,715	)
Acquisition and retirement of treasury stock etc.		(13,500,691	)		(2,104,222,930	)
Acquisition of treasury stock (odd-lot stock at comprehensive share exchange)		(51,621	)		(6,504,246	)
Disposal of treasury stock		1,883,007			171,193,865
Issuance of new shares (comprehensive share exchange)		32,474,711			4,741,307,806

Sub-total (①)					268,418,318,165

Weighted average number of common shares outstanding (②=(①/365))					735,392,653


	For the year ended December 31, 2022
	Number of shares			Accumulated number of shares outstanding during period
Common shares issued at the beginning of the period		728,060,549			265,742,100,385
Treasury stocks		(343,991	)		(125,556,715	)

Sub-total (①)					265,616,543,670

Weighted average number of common shares outstanding (②=(①/365))					727,716,558

Diluted EPS is equal to basic EPS because there is no dilution effect for the years ended December 31, 2023 and 2022.

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AS OF DECEMBER 31, 2023 AND 2022

40.	CONTINGENT LIABILITIES AND COMMITMENTS

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


	December 31, 2023		December 31, 2022
Confirmed guarantees
Guarantee for loans		58,205		39,684
Acceptances		467,964		501,921
Guarantees in acceptances of imported goods		74,916		97,920
Other confirmed guarantees		8,050,815		6,847,713

Sub-total		8,651,900		7,487,238

Unconfirmed guarantees
Local letters of credit		161,608		150,075
Letters of credit		2,873,350		3,014,228
Other unconfirmed guarantees		1,516,585		1,144,498

Sub-total		4,551,543		4,308,801

Commercial paper purchase commitments and others		589,858		125,547

Total (*)		13,793,301		11,921,586

(*)	Includes financial guarantees of 3,661,656 million won and 3,095,091 million won as of December 31, 2023 and 2022, respectively.

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


	December 31, 2023		December 31, 2022
Loan commitments		126,829,192		118,172,070
Other commitments (*)		7,339,952		7,107,828

(*)	As of December 31, 2023 and 2022, the amount of unsecured bills (purchase bills sales) and discounts on electronic short-term bond sales (purchase) are 2,485,853 million won and 2,505,399 million won, respectively.

(3)	Litigation case

Litigation case that the key Group is a defendant in a lawsuit pending (excluding fraud lawsuits and those lawsuits that are filed only to extend the statute of limitation, etc.) are 603 cases (litigation value of 513,863 million Won) and 531 cases (litigation value of 577,128 million Won) as of December 31, 2023 and 2022 respectively, and provisions for litigations are 28,581 million Won and 33,877 million Won.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(4)	Other commitments

As of December 31, 2023, Woori FIS Co., Ltd, a subsidiary, has been provided with a payment guarantee limit of 6,457 million Won in relation to bid guarantees and contract/defect guarantees from the Korean Software Financial Cooperative, but there is no committed amount. In relation to the guarantee, the capital contributions to the Korean Software Financial Cooperative are provided as collateral. In addition, as of December 31, 2023, Seoul Guarantee Insurance Company is providing a payment guarantee of 374 million Won related to the return of subsidy to the daycare center at work.

As of December 31, 2023, Woori FIS Co., Ltd, a subsidiary agreed with Shinhan Bank for short-term borrowings of 20 billion Won for one year (2023.11.16.~2024.11.16.), and there is no outstanding balance of short-term borrowings as of December 31, 2023.

As of December 31, 2023, Woori Savings bank is provided with a guarantee of 1,593 million Won from Seoul Guarantee Insurance Company in relation to provisional attachment for recovery of loans, etc.

As of December 31, 2023, Woori Asset Trust, a subsidiary, has committed to fulfill responsibility for the completion of 43 projects, including a residential-commercial complex in U-dong, Haeundae-gu, Busan. Responsible completion type management land trust is a trust that bears the obligation of responsible completion when the construction company fails to fulfill the obligation of responsible completion, and the obligation to compensate losses to the lending financial institution if Woori Asset Trust fails to fulfill the obligation of responsible completion. As of December 31, 2023, the total amount of PF(Project Financing) loans from PF lending financial institutions invested in the responsible completion type management land trust business is 2,275,634 million Won. Although additional losses may occur in relation to these contracts for liability obligations, these effects were not reflected in the financial statements at the end of the current period because the possibility is not high and the amount of losses cannot be reliably estimated. Meanwhile, Woori Asset Trust Co., Ltd. has failed to fulfill the responsibility of the completion of 5 projects including the Okjeong Knowledge Industry Center in Yangju. The total amount of PF limit from PF lending financial institutions invested in projects is 271,000 million Won and the amount of PF loans is 161,700 million Won. Additionally, Woori Asset Trust Co., Ltd. has exceeded the deadline for responsibility of completion of a commercial facility in Gwangju, Gyeonggi Province. The total amount of PF limit from PF lending financial institutions invested in projects is 61,000 million Won and the amount of PF loans is 43,000 million Won. Also, as of December 31, 2023, Woori Asset Trust may lend a trust account for a part of the total project cost in relation to 24 debt-type land trust contracts including Busan Haeundae Udong Beautique Terrace Hotel and responsible completion management land trust contracts in Gyeongseo-dong, Seo-gu, Incheon, and additional business sites in progress. The maximum loan amount (unused limit) is 113,428 million Won. Whether or not Woori Asset Trust lends a trust account in relation to the relevant businesses is not an unconditional payment obligation, and it is determined by considering overall matters such as the unique account and the fund balance plan of each trust business.

Pursuant to some contracts related to asset securitization, the Group utilizes various prerequisites as triggering events causing early redemption, limiting risks that investors bear due to change in asset quality. Breach of such triggering clause leads to an early redemption of the securitized bonds.

During the current period, there was an investigation by Fair Trade Commission regarding Loan-To-Value ratio. The Group received the review report but cannot reasonably estimate its impact on financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

41.	RELATED PARTY TRANSACTIONS

Related parties of the Group as of December 31, 2023 and 2022, and assets and liabilities recognized, guarantees and commitments, major transactions with related parties and compensation to key management for the years ended December 31, 2023 and 2022 are as follows. Please refer to Note 13 for the details of joint ventures and associates.

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


Related parties		Account title	December 31, 2023			December 31, 2022
Associates	W Service Networks Co., Ltd.	Loans		108			120
		Deposits due to customers		3,245			3,298
		Accrued expenses		7			7
		Other liabilities		100			109

	Korea Credit Bureau Co., Ltd.	Loans		1			2
		Deposits due to customers		771			4,450
		Accrued expenses		1			—
		Other liabilities		—			40

	Korea Finance Security Co., Ltd.	Loans		3,228			3,433
		Loss allowance		(71	)		(46	)
		Deposits due to customers		1,323			1,764
		Other liabilities		6			6

	LOTTE CARD Co. Ltd.	Loans		12,209			50,000
		Account receivables		31			16
		Loss allowance		(269	)		(30	)
		Other assets		2			—
		Deposits due to customers		62,587			35,986
		Other liabilities		289			74

	K BANK Co., Ltd.	Loans		54			3
		Account receivables		13			31
		Other assets		18			—
		Other liabilities		214,135			108,156

	Others (*1)	Loans		65,558			68,660
		Loss allowance		(61	)		(34	)
		Other assets		47,828			768
		Deposits due to customers		4,212			3,622
		Other liabilities		992			119

(*1)	Others include IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership and etc., as of December 31, 2023 and 2022.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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


			For the years ended December 31
Related parties		Account title	2023		2022
Associates	W Service Network Co., Ltd.	Other income		35		14
		Fees expenses		552		543
		Other expenses		1,575		1,907

	Korea Credit Bureau Co., Ltd.	Interest expenses		9		40
		Fees expenses		4,047		3,730
		Other expenses		143		139

	Korea Finance Security Co., Ltd.	Interest income		181		141
		Interest expenses		3		3
		Provision of allowance for credit loss		26		44
		Other expenses		33		52

	LOTTE CARD Co., Ltd.	Interest income		10		83
		Fees income		4,164		7,701
		Interest expenses		5,665		1,902
		Reversal of allowance for credit loss		455		27

	K BANK Co., Ltd.	Fees income		190		698
		Fees expenses		339		937

	Others (*)	Interest income		682		713
		Fees income		15,295		7,138
		Dividend income		1,700		—
		Other income		4,760		—
		Interest expenses		9,333		10
		Other expenses		836		—
		Provision of allowance for credit loss		27		92
		Reversal of allowance for credit loss		—		1

(*)	Others include IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership and etc., for the years ended December 31, 2023 and 2022.

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AS OF DECEMBER 31, 2023 AND 2022

(3)	Major loan transactions with related parties for the years ended December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


		For the year ended December 31, 2023
Related parties		Beginning balance		Loan		Collection		Others			Ending balance (*)
Associates	W Service Network Co., Ltd.		120		483		495		—			108
	Korea Credit Bureau Co., Ltd.		2		12		13		—			1
	Korea Finance Security Co., Ltd.		3,433		2,911		3,116		—			3,228
	LOTTE CARD Co., Ltd.		50,000		226,318		264,109		—			12,209
	K BANK Co., Ltd.		3		218		167		—			54
	One Mortgage		—		262		247		—			15
	ARAM CMC CO.LTD		—		41		—		—			41
	Godo Kaisha Oceanos 1		39,814		—		—		(1,693	)		38,121
	Woori Zip 1		11,819		—		—		(502	)		11,317
	Woori Zip 2		16,776		—		—		(713	)		16,063
	Central Network Solutions Co., Ltd.		251		—		251		—			—

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


		For the year ended December 31, 2022
Related parties		Beginning balance		Loan		Collection		Others			Ending balance (*)
Associates	W Service Network Co., Ltd.		20		352		252		—			120
	Korea Credit Bureau Co., Ltd.		2		15		15		—			2
	Korea Finance Security Co., Ltd.		3,425		2,407		2,399		—			3,433
	LOTTE CARD Co., Ltd.		3,750		50,000		3,750		—			50,000
	K BANK Co., Ltd.		99		315		411		—			3
	Godo Kaisha Oceanos 1		43,033		41,467		43,033		(1,653	)		39,814
	Woori Zip 1		12,775		—		—		(956	)		11,819
	Woori Zip 2		18,132		—		—		(1,356	)		16,776
	Central Network Solutions Co., Ltd.		—		251		—		—			251

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(4)	Details of changes in major deposits due to customers with related parties for the years ended December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


		For the year ended December 31, 2023
Related parties		Beginning balance		Increase		Decrease		Ending balance (*)
Associates	W Service Networks Co., Ltd		1,200		1,000		1,200		1,000
	Partner One Value Up I Private Equity Fund		100		—		100		—
	Korea Credit Bureau Co., Ltd.		3,000		—		3,000		—
	One Mortgage		—		1,200		600		600

(*)	Details of payment between related parties, demand deposit due to customers and etc. are excluded.


		For the year ended December 31, 2022
Related parties		Beginning balance		Increase		Decrease		Ending balance (*)
Associates	W Service Networks Co., Ltd		1,180		1,200		1,180		1,200
	Partner One Value Up I Private Equity Fund		329		550		779		100
	Korea Credit Bureau Co., Ltd.		—		3,000		—		3,000

(*)	Details of payment between related parties, demand deposit due to customers and etc. are excluded.

(5)	There are no major borrowing transactions with related parties for the years ended December 31, 2023 and 2022.

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


Warrantee	December 31, 2023		December 31, 2022		Warranty
Korea Finance Security Co., Ltd.		632		627	Unused loan commitment
Korea Credit Bureau Co., Ltd.		34		33	Unused loan commitment
W Service Network Co., Ltd.		72		60	Unused loan commitment
K BANK Co., Ltd.		246		297	Unused loan commitment
LOTTE CARD Co. Ltd.		498,400		450,000	Unused loan commitment
One Mortgage		34		—	Unused loan commitment
D-Custody Co., Ltd.		—		10	Unused loan commitment

As of December 31, 2023 and 2022, the recognized payment guarantee provisions are 294 million won and 80 million won, respectively, in relation to the guarantees provided to the related parties above.

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AS OF DECEMBER 31, 2023 AND 2022

(7)	Amount of commitments with the related parties


Warrantee	December 31, 2023		December 31, 2022		Warranty
IBK KIP Seongjang Dideemdol 1st Private Investment Limited Partnership		4,664		4,664	Securities purchase commitment
Woori Seoul Beltway Private Special Asset Fund No.1		34,437		37,146	Securities purchase commitment
Woori-Q Corporate Restructuring Private Equity Fund		12,186		12,555	Securities purchase commitment
JC Assurance No.2 Private Equity Fund		1,351		1,351	Securities purchase commitment
Crevisse Raim Impact 1st Startup Venture Specialist Private Equity Fund		243		325	Securities purchase commitment
WooriG Oncorp Corporate support of Major Industry General Type Private Investment Trust (Type 2)		—		39	Securities purchase commitment
BTS 2nd Private Equity Fund		4,774		6,974	Securities purchase commitment
STASSETS FUND III		6,000		13,500	Securities purchase commitment
Together Korea Government Private Securities Investment Trust No.3		990,000		990,000	Securities purchase commitment
NH Woori Newdeal Growth Alpha Private Equity Fund 1		36,941		—	Securities purchase commitment
Synaptic Future Growth Private Equity Fund 1		4,389		—	Securities purchase commitment
Woori Asset Global Partnership Fund No.5		127,500		—	Securities purchase commitment

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(8)	Major investment and Recovery transactions

The details of major investment and recovery transactions with related parties for the years ended December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023
Related parties	Investment and others (*)		Recovery and others (*)
Woori G Oncorp Corporate support of Major Industry General Type Private Investment Trust (Type 2)		38		—
Woori BIG SATISFACTION SHINJONG MMF 3RD		—		441,470

(*)	Investment and recovery transactions of associates are described in Note 13.(2)


	For the year ended December 31, 2022
Related parties	Investment and others (*)		Recovery and others (*)
Woori High Plus Short-term High Graded ESG Bond Sec Feeder Inv Trust 1		—		21,606
Woori High Plus Bond Sec Feeder Inv Trust 3(USD)		—		1,052
Woori BANKPLUS IPO 10 FEEDER FUND 2(BALANCED BOND)		200		—
Woori Two-year Bond Securities Investment Trust 2(Bond)		—		213
Woori China Mainland Stock Securities Investment Trust H(Securities)		—		443
Woori Long-term government bond securities Investment Trust No.1		—		1,951
Woori Republic of Korea Treasury Bond Active ETF(Bond)		3,000		—
Woori K-New Opening Target Return Securities Investment Trust(Equity)		200		—
Woori 2023 Maturity Securities Investment Trust(Bond)		200		—
Woori 2024 Maturity Securities Investment Trust 1(Bond)		200		—
Woori BIG SATISFACTION SHINJONG MMF 3RD		320,000		—
Woori MULTI RETURN PRIVATE EQUITY 1		—		8,559
Woori 2024 December Maturity Securities Investment Trust 1(Bond)		200		—
Woori Two-year Bond Securities Investment Trust 3(Bond)		—		209
Woori G Oncorp Corporate support of Major Industry General Type Private Investment Trust (Type 2)		630		—

(*)	Investment and recovery transactions of associates are described in Note 13.(2)

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


	For the years ended December 31
	2023		2022
Short-term employee salaries		22,626		21,990
Retirement benefit service costs		1,160		937
Share-based compensation		5,474		4,234

Total		29,260		27,161

Key management includes executives and directors of Woori Financial Group and major subsidiaries, and also includes CEO of other subsidiaries. Outstanding assets from transactions with key management amount to 3,932 million won and 3,620 million won, as of December 31, 2023 and 2022 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 34,054 million won and 12,660 million won, respectively, as of December 31, 2023 and 2022.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

42.	TRUST ACCOUNTS

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


	Total assets				Operating income
	December 31, 2023		December 31, 2022		For the years ended December 31
	December 31, 2023		December 31, 2022		2023		2022
Trust accounts		75,636,483		71,677,258		2,296,627		1,121,069

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


	December 31, 2023		December 31, 2022
Receivables:
Trust fees receivables		48,383		42,337

Payables:
Deposits due to customers		166,241		170,417
Borrowings from trust accounts		3,769,913		1,804,847

Total		3,936,154		1,975,264

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


	For the years ended December 31
	2023	2022
Revenue:
Trust fees	141,314	131,656
Termination fees	1,116	1,158

Total	142,430	132,814

Expense:
Interest expenses on deposits due to customers	957	619
Interest expenses on borrowings from trust accounts	88,099	38,583

Total	89,056	39,202

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

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

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


	December 31, 2023		December 31, 2022
Partial principal guaranteed trusts
Personal trust		7,767		8,230
Corporate trust		217		446
Deposit purpose		1,515		1,551

Sub-total		9,499		10,227


Principal guaranteed trusts
Old-age pension trusts		2,582		2,790
Personal pension trusts		429,068		460,839
Pension trusts		642,756		687,971
Retirement trusts		26,082		26,563
New personal pension trusts		6,441		6,792
New old-age pension trusts		892		950

Sub-total		1,107,821		1,185,905

Principal and interest guaranteed trusts
Development trusts		19		19
Unspecified money trusts		334		335

Sub-total		353		354

Total		1,117,673		1,196,486

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

43.

LEASES

(1)

Lessor

Finance lease

①

The total investment in finance lease and the present value of the minimum lease payments to be recovered are as follows (Unit: Korean Won in millions):


	December 31, 2023
	Total investment in lease	Net investment in lease
Within one year	226,242	208,121
After one year but within two years	330,524	308,793
After two years but within three years	446,742	412,015
After three years but within four years	364,917	323,331
After four years but within five years	127,001	109,675
After five years	24	24

Total	1,495,450	1,361,959


	December 31, 2022
	Total investment in lease	Net investment in lease
Within one year	160,181	146,749
After one year but within two years	231,075	215,497
After two years but within three years	366,599	338,709
After three years but within four years	501,034	452,099
After four years but within five years	368,420	314,696
After five years	19	18

Total	1,627,328	1,467,768

②

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


	December 31, 2023	December 31, 2022
Total investment in lease	1,495,450	1,627,328
Net investment in lease	1,361,959	1,467,768
Present value of minimum lease payments	1,361,959	1,467,768
Present value of unguaranteed residual value	—	—

Unearned interest income	133,491	159,560

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

Operating lease

①

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


	December 31, 2023			December 31, 2022
Prepaid lease assets		20,538			3,121
Operating lease assets
Acquisition cost		4,199,535			3,320,275
Accumulated depreciation		(913,609	)		(729,818	)
Net carrying value		3,285,926			2,590,457

Total		3,306,464			2,593,578

②

The details of changes in operating lease assets as of December 31, 2023 are as follows and there is no details of changes in operating lease assets as of December 31, 2022 (Unit: Korean Won in millions)


	December 31, 2023			December 31, 2022
Beginning balance		2,590,457			1,778,308
Acquisition		1,336,203			1,321,251
Disposal		(202,542	)		(138,189	)
Depreciation		(462,394	)		(388,895	)
Others		24,202			17,982

Ending balance		3,285,926			2,590,457

③

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


	December 31, 2023		December 31, 2022
Within one year		748,283		567,998
After one year but within two years		681,591		526,899
After two years but within three years		517,967		420,244
After three years but within four years		286,677		275,080
After four years but within five years		121,621		86,606

Total		2,356,139		1,876,827

④

There are no adjusted lease payments recognized as profit or loss for the years ended December 31, 2023 and 2022.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(2)

Lessee

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


	December 31, 2023		December 31, 2022
Lease payments
Within one year		206,798		170,781
After one year but within five years		146,755		152,145
After five years		25,356		33,007

Total		378,909		355,933

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


	For the years ended December 31
	2023		2022
Total cash outflows from lease		195,015		192,540

Details of lease payments that are not included in the measurement of lease liabilities due to the fact that they are short-term leases or leases for which the underlying asset is of low value are as follows (Unit: Korean Won in millions):


	For the years ended December 31
	2023		2022
Lease payments for short-term leases		936		1,469
Lease payments for which the underlying asset is of low value		1,369		1,316

Total		2,305		2,785

Variable lease payments that were not included in the measurement of lease liabilities for the years ended December 31, 2023 and 2022 were 32,037 million Won and 5,470 million Won.

44.	BUSINESS COMBINATION

(1)

General

As of March 23, 2023, the Group acquired 53.9% interest(excluding treasury stocks, 52.0% interest including treasury stocks) in Daol Investment CO., Ltd. and changed the name of Daol Investment CO., Ltd. to Woori Venture Partners. The main reasons for the business combination are to maximize synergy between the consolidated subsidiaries and to strengthen the non- banking business portfolio.

If Woori Venture Partners had been acquired from January 1, 2023, the consolidated statement of comprehensive income would have shown operating profit and net income of Woori Venture Partners for 6,495 million Won and 7,673 million Won, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(2)	Identifiable net assets

Identified assets and liabilities as of the acquisition date are as follows (Unit: Korean Won in millions):


	Accounts	March 31, 2023
Assets	Cash and cash equivalent		2,879
	Financial assets at FVTPL		38,385
	Loans and other financial assets at amortized cost(*1)		124,904
	Investments in joint ventures and associates		136,930
	Property, Plant and Equipment		20,324
	Intangible assets(*2)		21,447
	Current tax assets		33
	Others		73

	Sub-total		344,975

Liabilities	Current tax liabilities		7,938
	Deferred tax liabilities		11,593
	Other financial liabilities		1,000
	Other liabilities		14,971

	Sub-total		35,502

Fair value of net identifiable assets			309,473

(*1)

The acquired financial assets at amortized cost were estimated at fair value. The contractual total of the financial assets at amortized cost of Woori Venture Partners is 127,384 million Won, and the contractual cash flows that are not expected to be recovered as of the acquisition date are 2,480 million Won.

(*2)

The intangible assets include 18,880 million Won in customer relationships as a result of business combination and were valued at fair value through the Multi-period excess earning method (MEEM) as they were judged separately identifiable intangible assets. Multi-period excess earning method is a method to estimate the future cash flows generated by each intangible asset and to discount the cash flows generated purely by that intangible asset to its present value by deducting the portion of the asset’s contribution to that cash flow generation.

If, within one year of the acquisition date, new information obtained about the facts and circumstances that existed at the acquisition date requires the adjustment of the amounts recognized at the acquisition date, or the recognition of additional provisions existing at the acquisition date, the accounting for the business combination will be adjusted.

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WOORI FINANCIAL GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023 AND 2022

(3)

Goodwill

Recognized goodwill as a result of business combination are as follows (Unit: Korean Won in million):


	Woori Venture Partners
Transfer price		212,522
Fair value of net identifiable asset		309,473
Non-controlling interest (*)		138,478
Goodwill		41,527

(*)	Non-controlling interests were recognized at fair value applying the closing price on the acquisition date of Woori Venture Partners.

In the event of a business combination, the consideration transferred includes the premium paid to acquire Woori Venture Partners which results in goodwill. In addition, the consideration paid for the business combination includes expected synergies, revenue growth, and the amount related to future market growth.

The Group also acquired a relationship with a customer of Woori Venture Partners as part of the acquisition. These relationships with customers were recognized separately from goodwill because they met the separability criteria to meet the recognition requirements for intangible assets.

(4)	Net cash outflow due to business combination

Details of net cash outflows due to business combination are as follows (Unit: Korean Won in million):


	Woori Venture Partners
Consideration paid in cash		212,522
Acquired cash and cash equivalents		2,879

Deduction in total		209,643

45.	EVENTS AFTER THE REPORTING PERIOD

(1)

On October 26, 2023, Woori Asset Management Corp (the surviving company) and Woori Global Asset Management Co., Ltd. (the merged company), subsidiaries of the Group, entered into a merger agreement. On January 10, 2024, the shareholders’ meeting to approve the merger agreement and the board of directors to replace the shareholders’ meeting were held and the resolution was made. The merger registration date is January 29, 2024, and the Group’s percentage of ownership in Woori Asset Management Corp after the merger is 77.5% (3,717,154 shares).

(2)

On February 16, 2024, Woori Asset Management Corp, the subsidiary of the Company, held the Board of Directors meeting and has declared the capital increase amount of 209,952 million Won, and the Company has decided to participate in the capital increase amount of 200,000 million Won, corresponding to its ownership (95.3%) based on voting rights.

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Table of Contents

Independent Auditor’ Report on Internal Control over Financial

Reporting for Consolidation Purposes

Based on a report originally issued in Korean

To the Board of Directors and Shareholders

Woori Financial Group Inc.:

Opinion on Internal Control over Financial Reporting for Consolidation Purposes

We have audited Woori Financial Group Inc. and its subsidiaries (“the Group”)’ internal control over financial reporting (“ICFR”) for consolidation purposes as of December 31, 2023 based on the criteria established in the Conceptual Framework for Designing and Operating ICFR (“ICFR Design and Operation Framework”) issued by the Operating Committee of Internal Control over Financial Reporting in the Republic of Korea (the “ICFR Committee”).

In our opinion, the Group maintained, in all material respects, effective internal control over financial reporting for consolidation purposes as of December 31, 2023, based on ICFR Design and Operation Framework.

We also have audited, in accordance with Korean Standards on Auditing (KSAs), the consolidated financial statements of the Group, which comprise the consolidated statement of financial position as of December 31, 2023, the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising of material accounting policy information and other explanatory information, and our report dated March 6, 2024 expressed an unmodified opinion on those consolidated financial statements.

Basis for Opinion on Internal Control over Financial Reporting for Consolidation Purposes

We conducted our audit in accordance with KSAs. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of Internal Control over Financial Reporting for Consolidation Purposes section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the internal control over financial reporting for consolidation purposes in Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management and Those Charged with Governance for the Internal Control over Financial Reporting for Consolidation Purposes

The Group’s management is responsible for designing, operating and maintaining effective internal control over financial reporting for consolidation purposes and for its assessment of the effectiveness of internal control over financial reporting for consolidation purposes, included in the accompanying ‘Operating Status Report of Internal Control over Financial Reporting for Consolidation Purposes.’

Those charged with governance have the responsibilities for overseeing the Group’s internal control over financial reporting for consolidation purposes.

Auditor’s Responsibilities for the Audit of the Internal Control over Financial Reporting for Consolidation Purposes

Our responsibility is to express opinion on the Group’s internal control over financial reporting for consolidation purposes based on our audit. We conducted our audit in accordance with KSAs. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting for consolidation purposes was maintained in all material respects.

Our audit of internal control over financial reporting for consolidation purposes included obtaining an understanding of internal control over financial reporting for consolidation purposes, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

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Definition and Limitations of Internal Control over Financial Reporting for Consolidation Purposes

An entity’s internal control over financial reporting for consolidation purposes is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements for external purposes in accordance with Korean International Financial Reporting Standards (“K-IFRS”). A Group’s internal control over financial reporting for consolidation purposes includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the group; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with K-IFRS, and that receipts and expenditures of the group are being made only in accordance with authorizations of management and directors of the group; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the group’s assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting for consolidation purposes may not prevent or detect misstatements in the consolidated financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The engagement partner on the audit resulting in this independent auditor’s report is Jae-Beom Choi.

/s/ KPMG Samjong Accounting Crop.

Seoul, Korea

March 6, 2024

This report is effective as of March 6, 2024, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the internal control over financial reporting. Accordingly, the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

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Table of Contents

Operating Status Report of

Internal Control over Financial Reporting for Consolidation Purposes

To the Shareholders, Board of Directors and Audit Committee of

Woori Financial Group Inc.

We, as the Chief Executive Officer (“CEO”) and Internal Control over Financial Reporting Officer of Woori Financial Group Inc. (“the Group”), assessed operating status of the Group’s Internal Control over Financial Reporting for Consolidation Purposes(“ICFR”) for the year ended December 31, 2023.

The Group’s management, including ourselves, is responsible for designing and operating ICFR.

We assessed whether the Group effectively designed and operated its ICFR to prevent and detect errors or frauds which may cause a misstatement in consolidated financial statements to ensure preparation and disclosure of reliable consolidated financial information.

We used the ‘Conceptual Framework for Designing and Operating Internal Control over Financial Reporting’ established by the Operating Committee of Internal Control over Financial Reporting in Korea (the “ICFR Committee”) as the criteria for design and operation of the Group’s ICFR. We also conducted an assessment of ICFR based on the ‘Management Guideline for Evaluating and Reporting Effectiveness of Internal Control over Financial Reporting’ established by the ICFR Committee.

Based on our assessment, we concluded that the Group’s ICFR is designed and operated effectively as of December 31, 2023, in all material respects, in accordance with the ‘Conceptual Framework for Designing and Operating Internal Control over Financial Reporting’.

We certify that this report does not contain any untrue statement of a fact, or omit to state a fact necessary to be presented herein. We also certify that this report does not contain or present any statements which might cause material misunderstandings, and we have reviewed and verified this report with sufficient care.

February 22, 2024

Jong Yong Yim, Chief Executive Officer

Sung Wook Lee, Internal Control over Financial Reporting Officer

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EX-99.2 3 d807969dex992.htm EX-99.2 EX-99.2 Table of Contents

Exhibit 99.2

WOORI FINANCIAL GROUP INC.

SEPARATE FINANCIAL STATEMENTS

AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2023

Table of Contents

WOORI FINANCIAL GROUP INC.


	Page(s)
Independent Auditor’s Report		1-3
Separate Financial Statements
Separate Statements of Financial Position		5
Separate Statements of Comprehensive Income		6
Separate Statements of Changes in Equity		7
Separate Statements of Cash Flows		8-9
Notes to the Separate Financial Statements		10-67
Report on Independent Auditor’s Audit of Internal Control over Financial Reporting		68-69
Operating Status Report of Internal Control over Financial Reporting		70

Table of Contents

Independent Auditor’s Report

Based on a report originally issued in Korean

To the Board of Directors and Shareholders

Woori Financial Group Inc.

Opinion

We have audited the separate financial statements of Woori Financial Group Inc. (“the Company”), which comprise the separate statement of financial position as of December 31, 2023, the separate statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising of material accounting policy information and other explanatory information.

In our opinion, the accompanying separate financial statements present fairly, in all material respects, the separate financial position of the Company as of December 31, 2023, and its separate financial performance and its separate cash flows for the year then ended in accordance with Korean International Financial Reporting Standards (“K-IFRS”).

We also have audited, in accordance with Korean Standards on Auditing (KSAs), the Company’s Internal Control over Financial Reporting (“ICFR”) as of December 31, 2023, based on the criteria established in Conceptual Framework for Designing and Operating Internal Control over Financial Reporting issued by the Operating Committee of Internal Control over Financial Reporting in the Republic of Korea, and our report dated March 6, 2024 expressed an unmodified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

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

Key Audit Matter

We have determined that there are no key audit matters to communicate in our report.

Other Matter

The procedures and practices used in the Republic of Korea to audit such separate financial statements may differ from those generally accepted and applied in other countries.

The separate financial statements of the Company for the year ended December 31, 2022 were audited by another auditor who expressed an unmodified opinion on those financial statements on March 7, 2023.

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

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

In preparing the separate financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

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

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

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

•

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

•

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

•

Evaluate the appropriateness of accounting policies used in the preparation of the separate financial statements and the reasonableness of accounting estimates and related disclosures made by management.

•

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

•

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

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

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

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

The engagement partner on the audit resulting in this independent auditor’s report is Jae-Beom Choi.

/s/ KPMG Samjong Accounting Corp.

Seoul, Korea

March 6, 2024

This report is effective as of March 6, 2024, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying separate financial statements and notes thereto. Accordingly, the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such reflect the impact of such subsequent events or circumstances, AS OF DECEMBER 31, 2023 AND 2022 AND FOR THE YEARS ENDED

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WOORI FINANCIAL GROUP INC.

SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

The accompanying separate financial statements including all footnote disclosures were prepared by, and

are the responsibility of, the management of Woori Financial Group Inc.

Jong Yong Yim

President and Chief Executive Officer

Main Office Address: (Road Name Address) 51, Sogong-ro, Jung-gu, Seoul SEPARATE STATEMENTS OF FINANCIAL POSITION

(Phone Number) 02-2125-2000

Table of Contents

WOORI FINANCIAL GROUP INC.

AS OF DECEMBER 31, 2023 AND 2022


	December 31, 2023			December 31, 2022
	(Korean Won in millions)
ASSETS
Cash and cash equivalents (Notes 5 and 31)		289,507			313,361
Financial assets at fair value through profit or loss (“FVTPL”) (Notes 4, 6, 9 and 18)		—			689
Financial assets at fair value through other comprehensive income (“FVTOCI”) (Notes 4, 7 and 9)		539,709			312,771
Loans and other financial assets at amortized cost (Notes 4, 8, 9 and 31)		1,104,815			2,041,877
Investments in subsidiaries (Notes 10 and 31)		23,670,476			22,394,915
Property, Plant and Equipment (Notes 11 and 31)		6,609			11,052
Intangible assets (Note 12)		4,052			4,859
Net defined benefit asset (Note 16)		3,941			5,947
Current tax assets (Note 28)		158,951			14,350
Deferred tax assets (Note 28)		7,478			13,433
Other assets (Note 13)		484			322

Total assets		25,786,022			25,113,576

LIABILITIES
Debentures (Notes 4, 9 and 14)		1,587,659			1,447,762
Provisions (Note 15)		1,227			487
Current tax liabilities (Note 28)		32,125			721,795
Other financial liabilities (Notes 4, 9, 17, 31 and 32)		163,621			46,039
Other liabilities (Note 17)		392			591

Total liabilities		1,785,024			2,216,674

EQUITY (Note 19)
Capital stock		3,802,676			3,640,303
Hybrid securities		3,610,953			3,112,273
Capital surplus		11,120,236			10,909,281
Other equity		(7,871	)		(26,186	)
Retained earnings		5,475,004			5,261,231

Total equity		24,000,998			22,896,902

Total liabilities and equity		25,786,022			25,113,576

The accompanying notes are part of these financial statements.

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WOORI FINANCIAL GROUP INC.

SEPARATE STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022


	2023			2022
	(Korean Won in millions)
Interest income		64,592			25,614
Interest expense		(37,097	)		(30,644	)

Net interest income(loss) (Notes 9, 21 and 31)		27,495			(5,030	)
Fees and commissions income		1,625			1,596
Fees and commissions expense		(21,722	)		(16,655	)

Net fees and commissions loss (Notes 22 and 31)		(20,097	)		(15,059	)
Dividend income (Notes 23 and 31)		1,482,956			1,272,393
Net gain on financial instruments at FVTPL (Notes 9 and 24)		2,023			1,018
Provision of impairment losses due to credit loss (Notes 9, 25 and 31)		(348	)		(244	)
General and administrative expenses (Notes 26 and 31)		(67,359	)		(67,451	)

Operating income		1,424,670			1,185,627
Non-operating expense (Note 27)		(1,043	)		(1,363	)
Net income before income tax expense		1,423,627			1,184,264
Income tax income(expense) (Note 28)		881			(1,015	)
Net income		1,424,508			1,183,249

Net gain(loss) on valuation of equity securities at FVTOCI (Note 19)		19,789			(24,676	)
Remeasurement gain(loss) related to defined benefit plan (Note 16 and 19)		(873	)		2,364

Items that will not be reclassified to profit or loss:		18,916			(22,312	)

Other comprehensive loss, net of tax		18,916			(22,312	)
Total comprehensive income		1,443,424			1,160,937

Earnings per share (Note 29)
Basic and diluted earnings per share (Unit: In Korean Won)		1,754			1,499

The accompanying notes are part of these financial statements.

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WOORI FINANCIAL GROUP INC.

SEPARATE STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022


	Capital stock		Capital surplus		Hybrid securities		Other equity			Retained earnings			Total equity
	(Korean Won in millions)
January 1, 2022		3,640,303		10,909,281		2,294,288		(3,874	)		4,824,991			21,664,989
Total comprehensive income
Net income		—		—		—		—			1,183,249			1,183,249
Net loss on valuation of equity securities at FVTOCI		—		—		—		(24,676	)		—			(24,676	)
Remeasurement gain related to defined benefit plan		—		—		—		2,364			—			2,364
Transactions with owners
Dividends to common stocks		—		—		—		—			(655,252	)		(655,252	)
Issuance of hybrid securities		—		—		817,985		—			—			817,985
Dividends to hybrid securities		—		—		—		—			(91,757	)		(91,757	)

December 31, 2022		3,640,303		10,909,281		3,112,273		(26,186	)		5,261,231			22,896,902

January 1, 2023		3,640,303		10,909,281		3,112,273		(26,186	)		5,261,231			22,896,902
Total comprehensive income
Net income		—		—		—		—			1,424,508			1,424,508
Net gain on valuation of equity securities at FVTOCI		—		—		—		19,789			—			19,789
Remeasurement loss related to defined benefit plan		—		—		—		(873	)		—			(873	)
Transactions with owners
Comprehensive stock exchange		162,373		210,955		—		—			—			373,328
Dividends to common stocks		—		—		—		—			(979,586	)		(979,586	)
Issuance of hybrid securities		—		—		498,680		—			—			498,680
Dividends to hybrid securities		—		—		—		—			(131,149	)		(131,149	)
Acquisition of treasury stock		—		—		—		(100,601	)		—			(100,601	)
Retirement of treasury stock		—		—		—		100,000			(100,000	)		—

December 31, 2023		3,802,676		11,120,236		3,610,953		(7,871	)		5,475,004			24,000,998

The accompanying notes are part of these financial statements.

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WOORI FINANCIAL GROUP INC.

SEPARATE STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022


	2023			2022
	(Korean Won in millions)
Cash flows from operating activities:
Net income		1,424,508			1,183,249
Adjustments to net income:
Income tax expense(income)		(881	)		1,015
Interest income		(64,592	)		(25,614	)
Interest expense		37,097			30,644
Dividend income		(1,482,956	)		(1,272,393	)

		(1,511,332	)		(1,266,348	)

Adjustments for profit/loss items not involving cash flows:
Provision of impairment losses due to credit loss		348			244
Gain on valuation of financial instruments at FVTPL		(2,023	)		(1,018	)
Retirement benefit		3,159			2,450
Depreciation and amortization		7,305			6,517
Gain on disposal of Property, Plant and Equipment, intangible assets and other assets		(35	)		—

		8,754			8,193

Changes in operating assets and liabilities:
Loans and other financial assets at amortized cost		24,861			(2,007	)
Other Assets		(163	)		(171	)
Net defined benefit liability		(2,338	)		(3,665	)
Other financial liabilities		(22,992	)		7,879
Other liabilities		(199	)		42

		(831	)		2,078

Interest income received		60,873			13,192
Interest expense paid		(35,323	)		(29,831	)
Dividends received		1,482,771			1,271,276
Income tax paid		(2,195	)		(1,413	)

		1,506,126			1,253,224

Net cash inflow from operating activities		1,427,225			1,180,396

Cash flows from investing activities:
Net decrease(increase) on other investment assets		226,000			(1,140,000	)
Acquisition of investments in subsidiaries		(898,740	)		(250,000	)
Acquisition of financial assets at FVTOCI		(200,000	)		(200,000	)
Acquisition of Property, Plant and Equipment		(523	)		(2,210	)
Acquisition of intangible assets		(583	)		(977	)
Net increase(decrease) on guarantee deposits for leases		98			(241	)

Net cash outflow from investing activities		(873,748	)		(1,593,428	)

(Continued)

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WOORI FINANCIAL GROUP INC.

SEPARATE STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022


	2023			2022
	(Korean Won in millions)
Cash flows from financing activities:
Issuance of debentures		399,234			79,764
Redemption of debentures		(260,000	)		—
Issuance of hybrid securities		498,680			817,985
Acquisition of treasury stock		(100,601	)		—
Redemption of lease liabilities		(3,129	)		(3,072	)
New stock issuance cost		(780	)		—
Dividends paid to hybrid securities		(131,149	)		(91,757	)
Dividends paid		(979,586	)		(655,252	)

Net cash inflow from financing activities		(577,331	)		147,668

Net decrease in cash and cash equivalents		(23,854	)		(265,364	)
Cash and cash equivalents, beginning of the period		313,361			578,725

Cash and cash equivalents, end of the period (Note 5)		289,507			313,361

The accompanying notes are part of these financial statements. NOTES TO SEPARATE FINANCIAL STATEMENTS

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WOORI FINANCIAL GROUP INC.

DECEMBER 31, 2023 AND 2022

GENERAL

(1)	Summary of the parent company

Woori Financial Group, Inc. (hereinafter referred to the “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, 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 Company is located at 51, Sogong-ro, Jung-gu, Seoul, Korea, and the capital is 3,802,676 million Won. The Company’s stocks were listed on the Korea Exchange on February 13, 2019, and its American Depository Shares (“ADS”) are also being traded as the underlying common stock on the New York Stock Exchange since the same date.

The details of stock transfer from the Company and subsidiaries as of incorporation are as follows (Unit: Number of shares):


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

As of August 1, 2019, the 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 Company gained 100% control of ABL Global Asset Management Co., Ltd., added it as a consolidated subsidiary and changed the name to Woori Global Asset Management Co., Ltd. on December 6, 2019.

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

As of December 30, 2019, the Company acquired 67.2% interests (excluding treasury stock, 51.0% when including treasury stock) in Woori Asset Trust Co. (formerly Kukje Asset Trust Co.) In addition, as of March 31, 2023, the Company acquired an additional 28.1% interests in Woori Asset Trust Co. (excluding treasury stock, 21.3% when including treasury stock).

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

As of March 12, 2021, the Company paid 113,238 million Won in cash to acquire 100% interests on Woori Savings Bank from Woori Financial Capital Co., Ltd., our subsidiary.

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

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

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

As of March 23, 2023, the Company acquired a 53.9% interests in Woori Venture Partners Co., Ltd. (formerly Daol Investment Co., Ltd.) (excluding treasury stock, 52.0% in the case of including treasury stock). In addition, as of May 30, 2023, the Company additionally acquired treasury stock held by Woori Venture Partners Co., Ltd. (3.5%).

As of August 8, 2023, the Company paid 22,541,465 new shares of the Company to the shareholders of Woori Investment Bank Co., Ltd. (excluding the Company) through comprehensive stock exchange and acquired residual interest (41.3%) of Woori Investment Bank Co., Ltd., to make it a wholly owned subsidiary. In addition, on the same day, the Company paid 9,933,246 new shares of the Company to the shareholders of Woori Venture Partners Co., Ltd. (excluding the Company) through comprehensive stock exchange and acquired residual interest (44.5%) of Woori Venture Partners Co., Ltd., to make it a wholly owned subsidiary.

2.	BASIS OF PREPARATION AND MATERIAL ACCOUNTING POLICIES

(1)	Basis of presentation

The Company’s separate financial statements are prepared in accordance with Korean International Financial Reporting Standards (“K-IFRS”). Material accounting policies applied in the preparation of the financial statements are described below.

The Company is preparing its financial statements in accordance with the K-IFRS, and the separate financial statements are prepared in accordance with K-IFRS 1027 ‘Separate Financial Statements’. The financial statements of the parent, associate or joint venture represent the investment assets in a manner that is based on direct equity investments, not based on the reported performance and net assets of the investee.

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

Meanwhile, the financial statements of the Company were initially approved by the Board of Directors on February 6, 2024, amended and approved on February 9, 2024, and the final approval will be made in the annual general shareholders’ meeting on March 22, 2024.

The new standards and interpretations introduced from the current term and the resulting changes in accounting policies are as follows:

1.1

K-IFRS No.1001 ‘Presentation of Financial Statements’– Disclosure of Accounting Policy

The amendments to Korean IFRS 1001 define and require entities to disclose their material accounting policy information (being information that, when considered together with other information included in an entity’s financial statements, can reasonably be expected to influence decisions that the primary users of financial statements make on the basis of those financial statements.) The amendments do not have a significant impact on the financial statements.

1.2

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

The amendments have defined accounting estimates and clarified how to distinguish them from changes in accounting policies. The amendment does not have a significant impact on the financial statements.

1.3

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

The amendments require disclosure of valuation gains or losses (limited to those recognized in the profit or loss) of the conversion options or warrants (or financial liabilities including them), if all or part of the financial instrument with exercise price that is adjusted depending on the issuer’s share price change is classified as financial liability. The amendment does not have a significant impact on the financial statements.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

1.4

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

Additional phrase ‘the temporary difference to be added and the temporary difference to be deducted do not occur in the same amount’ has been added to initial recognition exception for a transaction in which an asset or liability is initially recognized. The amendment does not have a significant impact on the financial statements.

1.5

K-IFRS 1012 ‘Income Taxes’ - International Tax Reform – Pillar Two Model Rules

The Company applies the exception to recognizing and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes. Since the Pillar Two legislation is scheduled to be effective from January 1, 2024, the Group has no current tax expense related to Pillar Two. The Company is in review for the impact of these amendments on the financial statements and does not expect that the impact will be significant.

The details of K-IFRS that have been issued and published as of December 31, 2023 but have not yet reached the effective date, and have not been early adopted by the Company are as follows:

2.1

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

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

2.2

Amendments to K-IFRS 1007 ‘Statement of Cash Flows’, K-IFRS 1107 ‘Financial Instruments’: Disclosures – Supplier finance arrangements

When applying supplier finance arrangements, an entity shall disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk. The amendments should be applied for annual periods beginning on or after January 1, 2024, and earlier application is permitted. The Company does not expect that these amendments have a significant impact on the financial statements.

2.3

Amendments to K-IFRS 1116 ‘Leases’ - Lease Liability in a Sale and Leaseback

When subsequently measuring lease liabilities arising from a sale and leaseback, a seller-lessee shall determine lease payments or revised lease payments in a way that the seller-lessee would not recognize any amount of the gain or loss that relates to the right of use retained by the seller-lessee. The amendments should be applied for annual periods beginning on or after January 1, 2024, and earlier application is permitted. The amendment does not have a significant impact on the financial statements.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

2.4

Amendments to K-IFRS 1001 ‘Presentation of Financial Statements’ – Disclosure of Cryptographic Assets

The amendments require for an additional disclosure if an entity holds cryptographic assets, or holds cryptographic assets on behalf of the customer, or issues cryptographic assets. The amendments should be applied for annual periods beginning on or after January 1, 2024, and earlier application is permitted. The amendment does not have a significant impact on the financial statements.

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

(2)	Investments in subsidiaries and associates in separate financial statements

The Company selects and processes the cost method in accordance with K-IFRS 1027 for investments in subsidiaries, associates and jointly controlled entities, except for those classified as held for sale in accordance with K-IFRS 1105 ‘Non-current Assets Held for Sale and Discontinued Operations’. Dividends received from subsidiaries, associates and jointly controlled entities are recognized in profit or loss as dividend income when the right to receive dividends is established.

(3)	Revenue recognition

K-IFRS 1115 requires the recognition of revenues based on transaction price allocated to the performance obligation when or as the Company performs the obligation to the customer. Revenues other than those from contracts with customers, such as interest revenue, are measured through the effective interest rate method.

Revenues from contracts with customers

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

Revenues from sources other than contracts with customers

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

The effective interest method is a method of calculating the amortized cost of debt securities (or group of financial assets) and of allocating the interest income over the expected life of the asset. The effective interest rate is the rate that exactly discounts estimated future cash flows to the instrument’s initial total carrying amount over the expected period, or shorter if appropriate. Future cash flows include commissions and cost of reward points (limited to the primary component of effective interest rate) and other premiums or discounts that are paid or received between the contractual parties, and future cash flows exclude expected credit loss when calculating the effective interest rate. All contractual terms of a financial instrument are considered when estimating future cash flows.

Dividend income

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(4)	Accounting for foreign currencies

The Company’s separate financial statements are presented in Korean Won, which is the functional currency of the Company. At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at its prevailing exchange rates at the date.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(5)	Cash and cash equivalents

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

(6)	Financial assets and financial liabilities

Financial assets

On initial recognition, financial assets are classified into financial assets at FVTPL, financial assets at FVTOCI, and financial assets at amortized cost.

Business model

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

•

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

•

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

•

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

•

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

•

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

Contractual cash flows

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

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

•

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

•

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

•

Early payment features and maturity extension features

•

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

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

1.1

Financial assets at FVTPL

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

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

1.2

Financial assets at FVTOCI

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

1.3

Financial assets at amortized cost

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

Financial liabilities

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

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

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

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

Financial liabilities not classified as financial liabilities at FVTPL are measured at amortized cost. The Company is classifying liabilities such as borrowings etc. as financial liabilities at amortized cost.

Reclassification

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

Derecognition

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

When a financial asset is fully derecognized, the difference between the book value and the sum of proceeds and accumulated other comprehensive income is recognized in profit or loss in case of debt instruments and recognized in retained earnings in case of equity instruments.

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

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

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

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

Fair value of financial instruments

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

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

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

Derivatives and equity securities without marketability are generally recognized at an amount computed by an independent appraiser. The Company uses the amount determined by the independent appraiser. The Company verifies the prices obtained from appraisers in various ways, including the evaluation of independent appraisers’ competency, indirect verification through comparison between appraisers’ price and other available market information, and reperformed by employees who have knowledge of valuation models and assumptions that appraisers used.

Expected credit losses on financial assets

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

•

Financial assets at amortized cost

•

Debt instruments measured at FVTOCI

•

Contract assets as defined by K-IFRS 1115

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

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

•

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

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

•

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

•

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

Measurement of expected credit losses on financial asset at amortized cost

Measurement of expected credit losses on financial asset at FVTOCI

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

(7)	Offsetting financial instruments

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

(8)	Property, Plant and Equipment

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

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

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022


	Useful life
Leasehold Improvement		5 years
Equipment and Vehicles		5 years

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

(9)	Intangible assets and goodwill

The Company is recognizing intangible assets measured at the manufacturing cost or acquisition cost plus additional incidental expenses less accumulated amortization and accumulated impairment losses. The Company’s intangible asset are amortized over the following economic lives using the straight-line method. However, for some intangible assets, the period of time that is expected to be available is not predictable, so the useful life of some intangible assets is assessed as indefinite and not depreciated.


	Useful life
Software		1~5 years
Development cost		5 years

(10)	Impairment of non-monetary assets

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

(11)	Derivative instruments

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

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

Derivatives with a positive fair value(+) are recognized as financial assets, and derivatives with a negative fair value(-) are recognized as financial liabilities. Derivatives in financial statements are not offset unless they have a legally enforceable right to set-off or intend to set-off.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(12)	Provisions

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

The Company recognizes the expenses incurred in recovering the leased asset to its original state, under the terms of the lease, as a provision at the commencement date of lease or at a specific period of time when the asset is liable as a result of its use. The provision is measured as the best estimate of the expenditure required to recover the asset and is regularly reviewed and adapted to the new circumstances.

The balance of provisions is reviewed at the end of each reporting period and adjusted to reflect the best estimate as of the end of the reporting period.

(13)	Equity instruments issued by the Company

Capital and compound financial instruments

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

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

Hybrid securities

In case of hybrid securities that have the unconditional right to avoid contractual obligations, such as to deliver cash or other financial assets related to financial instruments, they are classifies as equity instruments and presented as part of equity.

(14)	Employee benefits and pensions

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

The Company is operating defined benefit plans. For defined benefit plans, the defined benefit liability is calculated through an actuarial assessment using the projected unit credit method every end of the reporting period, conducted by professional actuaries. Remeasurement, comprising actuarial gains and losses, the return on plan assets (excluding interest), and the effect of the changes to the asset ceiling (if applicable) is reflected immediately in the separate statement of financial position with a charge or credit recognized in other comprehensive income in the period in which they occur.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

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

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

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

Liabilities for termination benefits are recognized at the earlier of either 1) the date when the Company is no longer able to cancel its proposal for termination benefits or 2) the date when the Company has recognized the cost of restructuring that accompanies the payment of termination benefits.

(15)	Income taxes

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

The Company, as a consolidation group for its wholly-owned subsidiaries applies consolidated tax return approach, in which the Company and its subsidiaries are consolidated into a single tax base and tax amount. The Company determined whether temporary differences are realizable by considering the Company and each subsidiary’s future taxable income. For the changes in deferred income tax asset (liability), the Company recognized income tax expense (benefit), excluding the amounts that are directly adjusted from equity. Also, as the Company became the consolidation entity for tax filings and tax returns, it recognized the total amount of income tax payables as liabilities and individual tax amounts to be received from each of its wholly-owned subsidiaries as receivables.

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

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

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

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

(16)	Earnings per share (“EPS”)

(17)	Share-based payments

For cash-settled share-based payment transactions that provide cash in return for the goods or services received, the Company measures the goods or services received, and the corresponding liability at the fair value and recognizes as employee benefit expenses and liabilities during the vesting period.

The fair value of the liability is remeasured at the end of each reporting period and the settlement date until the liability is settled, and changes in fair value are recognized as employee benefits.

(18)

Leases

The Company determines whether the contract is, or contains, a lease at the date of initial application. A contract is or contains a lease if the right to control the use of an identified asset is transferred in exchange for the consideration received for a period of time. In determining whether a contract transfers control of the use of the identified asset, the Company uses the definition of lease in K-IFRS 1116.

Lessee

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

The right-of-use asset is subsequently depreciated on a straight-line basis from the commencement date to the end of the lease term. However, if the lease transfers ownership of the underlying asset to the lessee by the end of the lease term or if the cost of the right-of-use asset reflects that the lessee will exercise a purchase option, the lessee depreciates the right-of-use asset same as a fixed asset from the commencement date to the end of the useful life of the underlying asset. The right-of-use asset may be reduced by an impairment of the underlying asset or adjusted by remeasurement of the lease liability.

At the commencement date, a lease liability is measured at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if the rate can be readily determined. If the rate cannot be readily determined, the Company’s incremental borrowing rate can be used. Generally, the Company uses incremental borrowing rate as a discount rate.

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

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

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

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

•

Fixed payments (including in-substance fixed payments)

•

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

•

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

•

A lease liability is subsequently measured by increasing the carrying amount to reflect interest rate on the lease liability and reducing the carrying amount to reflect the lease payments made. A lease liability is remeasured when future lease payments change, depending on the changes in an index or a rate, change in amounts expected to be payable due to residual value guarantees, assessment of whether the Company is reasonably certain to exercise the purchase option and extension option, the Company is not reasonably certain to exercise the termination options.

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

The company consider all relevant facts and circumstances that lead to economic incentives not to exercise the extension option or not exercising the termination option. The period of the extension option (or the period of the termination option) is included in the lease period only when it is reasonably certain that the lessee will exercise the extension option (or will not).

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

In the statement of financial position, the Company classified the right-of-use assets that do not meet the definition of investment property as ‘Property, Plant and Equipment’ and the lease liabilities as ‘other financial liabilities.’

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

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

3.	MATERIAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

The outbreak of COVID-19 has had a significant impact on the global economy including Korea. Financial and economic shocks may have negative impacts on the Company’s financial condition and results of operations in various forms both domestically and internationally. The Company will continue to evaluate future prospects related to the duration of COVID-19’s economic impact and the government’s policies.

The material accounting estimates and assumptions are continuously being evaluated based on numerous factors including historical experiences and expectations of future events considered to be reasonably possible. Actual results can differ from those estimates based on such definitions. The accounting estimates and assumptions that contain significant risk of materially changing current book values of assets and liabilities in the next accounting periods are as follows:

(1)	Income taxes

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

(2)	Valuation of financial instruments

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

As described in Note 2, (6) 5), ‘Fair value of financial instruments’, when valuation techniques are used to determine the fair value of a financial instrument, various general techniques are used, and various types of assumptions and variables are incorporated during the process.

(3)	Impairment of financial instruments

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

(*)	Credit risk may be considered to not have been significantly increased when credit risk is low at the end of reporting period.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

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

(4)	Defined benefit plan

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

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Table of Contents

WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

4.	RISK MANAGEMENT

The Company is exposed to various risks that may arise from its operating activities and credit risk, market risk and liquidity risk are the main types of risks. In order to manage such risks, the Risk Management Department analyzes, assesses, and establishes risk management standards, including policies, guidelines, management systems and decision-making to ensure sound management of the Company.

The Risk Management Committee, Chief Risk Officer (“CRO”) and the Risk Management Department are operated as risk management organizations. The board of directors operates the Risk Management Committee, composed of nonexecutive directors for professional risk management. The Risk Management Committee performs as the top decision-making body for risk management by establishing fundamental risk management policies that are consistent with the Company’s management strategy and by determining the Company’s acceptable level of risk.

CRO assists the Risk Management Committee and operates the Company Risk Management Council, which is composed of the risk management managers of the subsidiaries, to periodically check and improve the external environment and the Company’s risk burden. The Risk Management Department which is independently structured, controls the risk management matter of the Company and reports key risks and assists decision-making.

(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 Company’s credit risk exposure to a permissible degree and to optimize its rate of return considering such credit risk.

Credit risk management

The Company measures expected loss on assets subject to credit risk management and uses it as a management indicator.

Maximum exposure

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


		December 31, 2023		December 31, 2022
Loans and other financial assets at amortized cost (*)	Banks		1,095,274		1,946,609
	Corporates		9,541		95,268

	Sub-total		1,104,815		2,041,877

Financial assets at FVTPL	Derivative assets		—		689

Total			1,104,815		2,042,566

(*)	Cash and cash equivalents are not included.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

Credit risk exposure by geographical areas

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


	December 31, 2023		December 31, 2022
	Korea		Korea
Loans and other financial assets at amortized cost		1,104,815		2,041,877
Financial assets at FVTPL		—		689

Total		1,104,815		2,042,566

Credit risk exposure by industries

The following tables analyze credit risk exposure by industries, which are finance and insurance, and others in accordance with the Korea Standard Industrial Classification Code as of December 31, 2023 and December 31, 2022 (Unit: Korean Won in millions):


	December 31, 2023
	Finance and insurance		Others		Total
Loans and other financial assets at amortized cost		1,103,460		1,355		1,104,815
Financial assets at FVTPL		—		—		—

Total		1,103,460		1,355		1,104,815


	December 31, 2022
	Finance and insurance		Others		Total
Loans and other financial assets at amortized cost		2,039,388		2,489		2,041,877
Financial assets at FVTPL		689		—		689

Total		2,040,077		2,489		2,042,566

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

Credit risk exposure

The maximum exposure to credit risk by asset quality, except for financial assets at FVTPL as of December 31, 2023 and 2022 is as follows (Unit: Korean Won in millions):


	December 31, 2023
	Stage 1				Stage 2				Stage 3		Total		Loss allowance			Total, net
Financial assets	Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Stage 3		Total		Loss allowance			Total, net
Loans and other financial assets at amortized cost		1,105,478		—		—		—		—		1,105,478		(663	)		1,104,815
Banks		1,095,937		—		—		—		—		1,095,937		(663	)		1,095,274
Corporates		9,541		—		—		—		—		9,541		—			9,541
General business		9,541		—		—		—		—		9,541		—			9,541

Total		1,105,478		—		—		—		—		1,105,478		(663	)		1,104,815

(*1)	Credit grade of corporates are AAA ~ BBB.

(*2)	Credit grade of corporates are BBB- ~ C.


	December 31, 2022
	Stage 1				Stage 2				Stage 3		Total		Loss allowance			Total, net
Financial assets	Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Above appropriate credit rating (*1)		Less than a limited credit rating (*2)		Stage 3		Total		Loss allowance			Total, net
Loans and other financial assets at amortized cost		2,042,192		—		—		—		—		2,042,192		(315	)		2,041,877
Banks		1,946,924		—		—		—		—		1,946,924		(315	)		1,946,609
Corporates		95,268		—		—		—		—		95,268		—			95,268
General business		95,268		—		—		—		—		95,268		—			95,268

Total		2,042,192		—		—		—		—		2,042,192		(315	)		2,041,877

(*1)	Credit grade of corporates are AAA ~ BBB.

(*2)	Credit grade of corporates are BBB- ~ C.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(2) Market risk

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


	December 31, 2023
	Within 3 months (*1)		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 (*1)		762,823		587,227		—		41,580		—		—		1,391,630
Financial assets at FVTOCI (*2)		—		—		—		—		—		539,709		539,709

Sub-total		762,823		587,227		—		41,580		—		539,709		1,931,339

Liability:
Debentures		11,118		11,118		160,834		10,192		643,664		926,872		1,763,798


	December 31, 2022
	Within 3 months (*1)		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 (*1)		315,632		406,445		913,995		—		—		—		1,636,072
Financial assets at FVTOCI (*2)		—		—		—		—		—		312,771		312,771

Sub-total		315,632		406,445		913,995		—		—		312,771		1,948,843

Liability:
Debentures		7,843		7,843		267,698		7,011		382,167		949,275		1,621,837

(*1)	The principal and interest cash flows of cash and cash equivalents are included in the cash flows within three months, with 762,823 million Won and 315,632 million Won as of December 31, 2023 and 2022, respectively.

(*2)	Due to the uncertain timing of the sale, it is included in the section for over 5 years in accordance with the expiration of the remaining contract.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(3)	Liquidity risk

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

Liquidity risk management

Liquidity risk management is to prevent damages from potential liquidity shortages with effective risk management that could arise from mismatching the maturity of assets and liabilities or unexpected cash outflows. The financial liabilities in the statement of financial position that are relevant to liquidity risk are incorporated within the scope of risk management.

The Company manages liquidity risk through various cash flows analysis (i.e. based on remaining maturity and contract period, etc.).

Maturity analysis of non-derivative financial liabilities

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


	December 31, 2023
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Debentures		11,118		11,118		160,834		10,192		643,664		926,872		1,763,798
Lease liabilities		746		741		741		741		323		—		3,292
Other financial liabilities		11,744		136,062		—		278		12,334		—		160,418

Total		23,608		147,921		161,575		11,211		656,321		926,872		1,927,508


	December 31, 2022
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Debentures		7,843		7,843		267,698		7,011		382,167		949,275		1,621,837
Lease liabilities		797		770		767		764		3,070		—		6,168
Other financial liabilities		10,720		21,087		—		348		8,000		—		40,155

Total		19,360		29,700		268,465		8,123		393,237		949,275		1,668,160

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


	December 31, 2023
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Debentures		11,118		11,118		160,834		10,192		643,664		926,872		1,763,798
Lease liabilities		746		741		741		741		323		—		3,292
Other financial liabilities		11,744		136,062		—		278		12,334		—		160,418

Total		23,608		147,921		161,575		11,211		656,321		926,872		1,927,508


	December 31, 2022
	Within 3 months		4 to 6 months		7 to 9 months		10 to 12 months		1 to 5 years		Over 5 years		Total
Debentures		7,843		7,843		267,698		7,011		382,167		949,275		1,621,837
Lease liabilities		797		770		767		764		3,070		—		6,168
Other financial liabilities		10,720		21,087		—		348		8,000		—		40,155

Total		19,360		29,700		268,465		8,123		393,237		949,275		1,668,160

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

Maturity analysis of derivative financial liabilities

There are no derivative financial liabilities measured at fair value through profit or loss as of December 31, 2023 and 2022.

(4)	Capital management

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

According to the above regulations, the Company is required to meet the following minimum requirements: Common Equity Tier 1 capital ratio of 8.0%, a Tier 1 capital ratio of 9.5%, and a Total capital ratio of 11.5%.

Details of the Company’s capital adequacy ratio calculated based on the consolidated financial statements are as follows (Unit: Korean Won in millions):


Details	December 31, 2023(*)			December 31, 2022
Tier 1 capital		26,343,941			23,757,296
Other Tier 1 capital		4,596,584			4,208,994
Tier 2 capital		3,815,920			3,437,735

Total risk-adjusted capital		34,756,445			31,404,025

Risk-weighted assets for credit risk		195,490,941			182,028,062
Risk-weighted assets for market risk		4,697,055			6,759,527
Risk-weighted assets for operational risk		19,603,749			16,519,885

Total risk-weighted assets		219,791,745			205,307,474

Common Equity Tier 1 ratio		11.99	%		11.57	%

Tier 1 capital ratio		14.08	%		13.62	%

Total capital ratio		15.81	%		15.30	%

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

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

5.	CASH AND CASH EQUIVALENTS

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


	December 31, 2023		December 31, 2022
Demand deposits		9,507		18,361
Fixed deposits		280,000		295,000

Total		289,507		313,361

(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 year ended December 31, 2023		For the year ended December 31, 2022
Changes in other comprehensive income related to valuation of financial assets at FVTOCI		19,789		(24,676	)
Changes in right-of-use assets due to new contract		1,238		893
Changes in right-of-use assets due to renewal of contract		—		5,463
Changes in lease liabilities due to new contract		1,238		803
Changes in lease liabilities due to renewal of contract		—		5,251
Comprehensive stock exchange		374,109		—
Change in bond discount issuance differences due to bond issuance		766		236

(3)	Adjustments of liabilities from financing activities for the years ended December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023
	Beginning		Cash flow			Not involving cash inflows and outflows				Ending
	Beginning		Cash flow			Amortization		Others (*)		Ending
Debentures		1,447,762		139,234			663		—		1,587,659
Lease liabilities		5,884		(3,128	)		212		235		3,203

Total		1,453,646		136,106			875		235		1,590,862

(*)	Changes in lease liabilities due to new contracts include 483 million Won.


	For the year ended December 31, 2022
	Beginning		Cash flow			Not involving cash inflows and outflows				Ending
	Beginning		Cash flow			Amortization		Others (*)		Ending
Debentures		1,367,429		79,764			569		—		1,447,762
Lease liabilities		2,954		(3,072	)		32		5,970		5,884

Total		1,370,383		76,692			601		5,970		1,453,646

(*)	Changes in lease liabilities due to new contracts and renewed include 6,054 million Won.

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Table of Contents

WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

6.	FINANCIAL ASSETS AT FVTPL

(1)	Details of financial assets at FVTPL as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023		December 31, 2022
Financial assets at FVTPL mandatorily measured at fair value		—		689

(2)	Financial assets at FVTPL mandatorily measured at fair value are as follows (Unit: Korean Won in millions):


	December 31, 2023		December 31, 2022
Derivatives assets		—		689

(3)	Financial assets at FVTPL designated as upon initial recognition is nil among financial assets at FVTPL as of December 31, 2023 and 2022.

7.	FINANCIAL ASSETS AT FVTOCI

(1)	Details of financial assets at FVTOCI as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023		December 31, 2022
Hybrid securities		539,709		312,771

(2)	Details of equity securities designated as financial assets at FVTOCI as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


Purpose of acquisition	December 31, 2023		December 31, 2022
Investment for political purpose		539,709		312,771

8.	LOANS AND OTHER FINANCIAL ASSETS AT AMORTIZED COST

(1)	Details of loans and other financial assets at amortized cost as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023		December 31, 2022
Due from banks		1,073,346		1,299,687
Other financial assets		31,469		742,190

Total		1,104,815		2,041,877

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


	December 31, 2023			December 31, 2022
Due from banks in local currency:
Due from depository banks		1,074,000			1,300,000
Loss allowance		(654	)		(313	)

Total		1,073,346			1,299,687

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(3)	Changes in the allowance for credit losses and gross carrying amount of due from banks are as follows (Unit: Korean Won in millions):

Allowance for credit losses


	For the year ended December 31, 2023
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(313	)		—		—		(313	)
Provision of allowance for credit loss		(341	)		—		—		(341	)

Ending balance		(654	)		—		—		(654	)


	For the year ended December 31, 2022
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(72	)		—		—		(72	)
Provision of allowance for credit loss		(241	)		—		—		(241	)

Ending balance		(313	)		—		—		(313	)

Gross carrying amount


	For the year ended December 31, 2023
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		1,300,000			—		—		1,300,000
Net increase (decrease)		(226,000	)		—		—		(226,000	)

Ending balance		1,074,000			—		—		1,074,000


	For the year ended December 31, 2022
	Stage 1		Stage 2		Stage 3		Total
Beginning balance		160,000		—		—		160,000
Net increase (decrease)		1,140,000		—		—		1,140,000

Ending balance		1,300,000		—		—		1,300,000

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


	December 31, 2023			December 31, 2022
Receivables		9,541			724,101
Accrued income		19,829			15,991
Lease deposits		2,108			2,101
Loss allowance		(9	)		(3	)

Total		31,469			742,190

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(5)	Changes in the allowances for credit losses and gross carrying amount of other financial assets are as follows (Unit: Korean Won in millions):

Allowance for credit losses


	For the year ended December 31, 2023
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		(3	)		—		—		(3	)
Provision of allowance for credit loss		(6	)		—		—		(6	)

Ending balance		(9	)		—		—		(9	)


	For the year ended December 31, 2022
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		—			—		—		—
Provision of allowance for credit loss		(3	)		—		—		(3	)

Ending balance		(3	)		—		—		(3	)

Gross carrying amount


	For the year ended December 31, 2023
	Stage 1			Stage 2		Stage 3		Total
Beginning balance		742,193			—		—		742,193
Net increase (decrease)		(710,715	)		—		—		(710,715	)

Ending balance		31,478			—		—		31,478


	For the year ended December 31, 2022
	Stage 1		Stage 2		Stage 3		Total
Beginning balance		473,182		—		—		473,182
Net increase (decrease)		269,011		—		—		269,011

Ending balance		742,193		—		—		742,193

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

9.	FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

(1)	The fair value hierarchy

The fair value hierarchy is determined by the levels of judgment involved in estimating fair values of financial assets and liabilities. The specific financial instruments characteristics and market condition such as volume of transactions and transparency are reflected to the market observable inputs. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities. The Company 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 Company’s own assumptions reflect those that market participants would use for measuring the assets or liabilities at the measurement date.

The fair value measurement is described in the one of the following three levels used to classify fair value measurements:

•

Level 1—fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. The types of financial assets or liabilities generally included in Level 1 are publicly traded equity securities, derivatives, and debt securities issued by governmental bodies.

•

Level 2— fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices). The types of financial assets or liabilities generally included in Level 2 are debt securities not traded in active markets and derivatives traded in OTC but not required significant judgment.

•

Level 3— fair value measurements are those derived from valuation technique that include inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). The types of financial assets or liabilities generally included in Level 3 are non-public securities and derivatives and debt securities of which valuation techniques require significant judgments and subjectivity.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to a fair value measurement in its entirety requires judgment and consideration of inherent factors of the asset or liability.

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


	December 31, 2023
	Level 1		Level 2		Level 3		Total
Financial assets:
Financial assets at FVTPL
Derivative assets		—		—		—		—
Financial assets at FVTOCI
Hybrid securities		—		—		539,709		539,709


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Financial assets:
Financial assets at FVTPL
Derivative assets		—		—		689		689
Financial assets at FVTOCI
Hybrid securities		—		—		312,771		312,771

Financial assets measured at FVTPL and financial assets measured at FVTOCI 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.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

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 Company determines the fair value using valuation methods. Valuation methods and input variables for each type of financial instruments are as follows:


	Valuation methods	Input variables
Hybrid securities	The fair value is measured using the Hull and White model and the Monte Carlo Simulations.	YTM Matrix, Additive spread by grade, Risk spread by entity, Effective Credit rating, Issuing information by item, Interest rate volatility estimate

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

Fair value
measurement
technique

Type

Significant
unobservable
inputs

Range

Impact of changes in significant
unobservable inputs on fair value

measurement

Hybrid securities

Hull and White, Monte Carlo Simulation

Hybrid

securities related

Interest rate (YTM), Market rate

Interest rate 3.02 %~ 3.53%

Market rate

4.49% ~ 6.31%

Variation of fair value increases as

variation of interest rate (YTM) increases.

The fair value of financial assets classified as level 3 uses external valuation figures.

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


	For the year ended December 31, 2023
	Beginning balance		Net Income		Other comprehensive income		Purchases/ Issuances		Disposals/ Settlements			Transfer to or out of Level 3		Ending balance
Financial assets:
Financial assets at FVTPL Derivative assets		689		2,023		—		—		(2,712	)		—		—
Financial assets at FVTOCI Hybrid securities		312,771		—		26,938		200,000		—			—		539,709
Financial liabilities:
Financial liabilities at FVTPL Derivative liabilities		—		—		—		—		—			—		—


	For the year ended December 31, 2022
	Beginning balance		Net Income			Other comprehensive income			Purchases/ Issuances		Disposals/ Settlements		Transfer to or out of Level 3		Ending balance
Financial assets:
Financial assets at FVTPL Derivative assets		—		689			—			—		—		—		689
Financial assets at FVTOCI Hybrid securities		146,294		—			(33,523	)		200,000		—		—		312,771
Financial liabilities:
Financial liabilities at FVTPL Derivative liabilities		329		(329	)		—			—		—		—		—

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(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 on financial instruments shows how changes in unobservable inputs affect changes in fair value of the instruments through favorable and unfavorable changes. 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 equity related derivatives of which fair value changes are recognized as net income and hybrid securities of which fair value changes are recognized as other comprehensive income among level 3 financial instruments.

The following table presents the sensitivity analysis to disclose the effect of reasonably possible volatility.(Unit: Korean Won in millions):


	December 31, 2023
	Net income				Other comprehensive income (loss)
	Favorable		Unfavorable		Favorable		Unfavorable
Financial assets:
Financial assets at FVTPL Derivative assets		—		—		—		—
Financial assets at FVTOCI Hybrid securities (*1)		—		—		16,476		(15,888	)

(*1)	Fair value changes of hybrid securities are calculated by increasing or decreasing discount rate, which is the major unobservable variable, by 1%, respectively.


	December 31, 2022
	Net income					Other comprehensive income (loss)
	Favorable		Unfavorable			Favorable		Unfavorable
Financial assets:
Financial assets at FVTPL Derivative assets (*1)		16,523		(13,279	)		—		—
Financial assets at FVTOCI Hybrid securities (*2)		—		—			10,347		(9,988	)

(*1)	Fair value changes of unlisted equity related derivatives are calculated by increasing or decreasing discount rate applied to the fair value of the underlying assets, which are major unobservable variables, by 1%, respectively.

(*2)	Fair value changes of hybrid securities are calculated by increasing or decreasing discount rate, which is the major unobservable variable, by 1%, respectively.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(5)	Fair value and carrying amount of financial assets and liabilities that are recorded at amortized cost are as follows (Unit: Korean Won in millions):


	December 31, 2023
	Fair value								Carrying amount
	Level 1		Level 2		Level 3		Total		Carrying amount
Financial assets:
Loans and other financial assets at amortized cost (*1)		—		—		1,104,815		1,104,815		1,104,815
Financial liabilities:
Debentures		—		1,518,440		—		1,518,440		1,587,659
Other financial liabilities (*1,2)		—		—		160,418		160,418		160,418

(*1)	The carrying amount is disclosed at fair value considering the carrying amount as an approximation of fair value.

(*2)	It does not include lease liabilities.


	December 31, 2022
	Fair value								Carrying amount
	Level 1		Level 2		Level 3		Total		Carrying amount
Financial assets:
Loans and other financial assets at amortized cost (*1)		—		—		2,041,877		2,041,877		2,041,877
Financial liabilities:
Debentures		—		1,277,164		—		1,277,164		1,447,762
Other financial liabilities (*1,2)		—		—		40,155		40,155		40,155

(*1)	The carrying amount is disclosed at fair value considering the carrying amount as an approximation of fair value.

(*2)	It does not include lease liabilities.

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 Company determines the fair value using valuation methods. For the disclosed items in which book value is considered to be the approximate value of fair value, valuation techniques and input variables are not disclosed. Valuation techniques and input variables for the fair value of financial liabilities that are recorded at amortized cost are as follows:


	Valuation methods	Input variables
Debentures	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 Company.	Risk-free market rate, etc.

(6)	Financial instruments by category

Carrying amounts of financial assets and liabilities by each category are as follows (Unit: Korean Won in millions):

Financial assets


	December 31, 2023
Financial assets	Financial assets at FVTPL		Financial assets at FVTOCI		Financial assets at amortized cost		Total
Due from banks		—		—		1,073,346		1,073,346
Hybrid securities		—		539,709		—		539,709
Derivative assets		—		—		—		—
Other financial assets		—		—		31,469		31,469

Total		—		539,709		1,104,815		1,644,524

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022


	December 31, 2022
Financial assets	Financial assets at FVTPL		Financial assets at FVTOCI		Financial assets at amortized cost		Total
Due from banks		—		—		1,299,687		1,299,687
Hybrid securities		—		312,771		—		312,771
Derivative assets		689		—		—		689
Other financial assets		—		—		742,190		742,190

Total		689		312,771		2,041,877		2,355,337

Financial liabilities


	December 31, 2023				December 31, 2022
Financial liabilities	Financial liabilities at FVTPL		Financial liabilities at amortized cost		Financial liabilities at FVTPL		Financial liabilities at amortized cost
Debentures		—		1,587,659		—		1,447,762
Other financial liabilities		—		160,418		—		40,155

Total		—		1,748,077		—		1,487,917

(7)	Income or expense from financial instruments by category

Income or expense from financial assets and liabilities by each category for the years ended December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023
	Interest income (expense)			Provision of credit loss			Gain on transactions and valuation		Dividends		Total
Financial assets at FVTPL		—			—			2,023		—		2,023
Financial assets at FVTOCI		—			—			—		17,131		17,131
Loans and other financial assets at amortized cost (*)		64,592			(348	)		—		—		64,244
Financial liabilities at amortized cost		(36,834	)		—			—		—		(36,834	)

Total		27,758			(348	)		2,023		17,131		46,564

(*)	15,070 million Won interest income of cash and cash equivalents are included.


	For the year ended December 31, 2022
	Interest income (expense)			Provision of credit loss			Gain on transactions and valuation		Dividends		Total
Financial assets at FVTPL		—			—			1,018				1,018
Financial assets at FVTOCI		—			—			—		12,967		12,967
Loans and other financial assets at amortized cost (*)		25,614			(244	)		—		—		25,370
Financial liabilities at amortized cost		(30,606	)		—			—		—		(30,606	)

Total		(4,992	)		(244	)		1,018		12,967		8,749

(*)	9,138 million Won interest income of cash and cash equivalents are included.

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Table of Contents

WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

10.	INVESTMENTS IN SUBSIDIARIES

(1)	Details of Investments in subsidiaries are as follows (Unit: Korean Won in millions and number of shares):


Subsidiaries (*1)	Location		Capital stock		Main business
Woori Bank		Korea		3,581,400	Bank
Woori Card Co., Ltd.		Korea		896,300	Finance
Woori Financial Capital Co., Ltd.		Korea		373,800	Finance
Woori Investment Bank Co., Ltd.		Korea		691,400	Other credit finance business
Woori Asset Trust Co., Ltd.		Korea		15,300	Real estate trust
Woori Savings Bank		Korea		124,000	Mutual saving bank
Woori F&I Co., Ltd.		Korea		20,000	Finance
Woori Asset Management Corp		Korea		20,000	Finance
Woori Venture Partners Co., Ltd.		Korea		50,000	Other financial services
Woori Global Asset Management Co., Ltd.		Korea		20,000	Finance
Woori Private Equity Asset Management Co., Ltd.		Korea		80,000	Finance
Woori Credit Information Co., Ltd.		Korea		5,000	Credit information
Woori Fund Service Co., Ltd.		Korea		10,000	Financial support service business
Woori FIS Co., Ltd.		Korea		24,500	System software development & maintenance
Woori Finance Research Institute Co., Ltd.		Korea		3,000	Other service business


	December 31, 2023					December 31, 2022
Subsidiaries (*1)	Number of shares		Percentage of ownership (%) (*2)		Financial statements date of use	Number of shares		Percentage of ownership (%) (*2)		Financial statements date of use
Woori Bank		716,000,000		100.0	December 31, 2023		716,000,000		100.0	December 31, 2022
Woori Card Co., Ltd.		179,266,200		100.0	December 31, 2023		179,266,200		100.0	December 31, 2022
Woori Financial Capital Co., Ltd.		74,757,594		100.0	December 31, 2023		74,757,594		100.0	December 31, 2022
Woori Investment Bank Co., Ltd.		1,382,850,405		100.0	December 31, 2023		513,162,392		58.7	December 31, 2022
Woori Asset Trust Co., Ltd.		2,210,600		95.3	December 31, 2023		1,560,000		67.2	December 31, 2022
Woori Savings Bank		24,802,623		100.0	December 31, 2023		24,802,623		100.0	December 31, 2022
Woori F&I Co., Ltd.		4,000,000		100.0	December 31, 2023		4,000,000		100.0	December 31, 2022
Woori Asset Management Corp		2,920,000		73.0	December 31, 2023		2,920,000		73.0	December 31, 2022
Woori Venture Partners Co., Ltd.		100,000,000		100.0	December 31, 2023		—		—	—
Woori Global Asset Management Co., Ltd.		4,000,000		100.0	December 31, 2023		4,000,000		100.0	December 31, 2022
Woori Private Equity Asset Management Co., Ltd.		16,000,000		100.0	December 31, 2023		16,000,000		100.0	December 31, 2022
Woori Credit Information Co., Ltd.		1,008,000		100.0	December 31, 2023		1,008,000		100.0	December 31, 2022
Woori Fund Service Co., Ltd.		2,000,000		100.0	December 31, 2023		2,000,000		100.0	December 31, 2022
Woori FIS Co., Ltd.		4,900,000		100.0	December 31, 2023		4,900,000		100.0	December 31, 2022
Woori Finance Research Institute Co., Ltd.		600,000		100.0	December 31, 2023		600,000		100.0	December 31, 2022

(*1)	Only subsidiaries invested directly by the Company are included.

(*2)	The percentage is based on the effective shareholding rate relative to the number of stocks outstanding.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(2)	Changes in the carrying value of investments in subsidiaries are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023
	Beginning balance		Acquisition		Disposal		Ending balance
Woori Bank		18,921,151		—		—		18,921,151
Woori Card Co., Ltd.		1,118,367		—		—		1,118,367
Woori Financial Capital Co., Ltd.		1,003,206		—		—		1,003,206
Woori Investment Bank Co., Ltd.(*1)		447,673		759,678		—		1,207,351
Woori Asset Trust Co., Ltd.(*2)		224,198		179,444		—		403,642
Woori Savings Bank		213,238		—		—		213,238
Woori F&I Co., Ltd.		200,000		—		—		200,000
Woori Asset Management Corp		122,449		—		—		122,449
Woori Venture Partners Co., Ltd.(*3)		—		336,439		—		336,439
Woori Global Asset Management Co., Ltd.		33,000		—		—		33,000
Woori Private Equity Asset Management Co., Ltd.		57,797		—		—		57,797
Woori Credit Information Co., Ltd.		16,466		—		—		16,466
Woori Fund Service Co., Ltd.		13,939		—		—		13,939
Woori FIS Co., Ltd.		21,754		—		—		21,754
Woori Finance Research Institute Co., Ltd.		1,677		—		—		1,677

Total		22,394,915		1,275,561		—		23,670,476

(*1)	The Company acquired residual interest (41.3%, including treasury stocks) of Woori Investment Bank Co., Ltd. in August 8 2023, to make it a wholly owned subsidiary and the capital increase amount of 500,000 million Won was made in December 2023.

(*2)	The Company additionally acquired 28.1% (excluding treasury stocks) interests of Woori Asset Trust Co Ltd on March 31, 2023. In the case of including treasury stocks, the share ratio was 21.3%.

(*3)

The Company additionally acquired 53.9% interests of Daol Investment Co Ltd (excluding treasury stocks) on March 23, 2023. In the case of including treasury stocks, the share ratio was 52.0%) and the Company name was changed to Woori Venture Partners Co., Ltd. The Company additionally acquired treasury stocks held by Woori Venture Partners Co., Ltd. (3.5% interests) in May 2023, and acquired 44.5% residual interest in August 8 2023, to make it a wholly owned subsidiary.


	For the year ended December 31, 2022
	Beginning balance		Acquisition		Disposal		Ending balance
Woori Bank		18,921,151		—		—		18,921,151
Woori Card Co., Ltd.		1,118,367		—		—		1,118,367
Woori Financial Capital Co., Ltd.		1,003,206		—		—		1,003,206
Woori Investment Bank Co., Ltd.		447,673		—		—		447,673
Woori Asset Trust Co., Ltd.		224,198		—		—		224,198
Woori Savings Bank		213,238		—		—		213,238
Woori F&I Co., Ltd. (*1)		—		200,000		—		200,000
Woori Asset Management Corp		122,449		—		—		122,449
Woori Global Asset Management Co., Ltd.		33,000		—		—		33,000
Woori Private Equity Asset Management Co., Ltd. (*2)		7,797		50,000		—		57,797
Woori Credit Information Co., Ltd.		16,466		—		—		16,466
Woori Fund Service Co., Ltd.		13,939		—		—		13,939
Woori FIS Co., Ltd.		21,754		—		—		21,754
Woori Finance Research Institute Co., Ltd.		1,677		—		—		1,677

Total		22,144,915		250,000		—		22,394,915

(*1)	On January 7, 2022, Woori Financial F&I Co., Ltd. was established (100% stake, 200 billion Won in stock payments) and included as a subsidiary.

(*2)	The Capital increase amount of 50,000 million Won was made in June 2022.

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Table of Contents

WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

11.	PROPERTY, PLANT AND EQUIPMENT

(1)	Details of Property, Plant and Equipment as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023
	Building		Equipment and Vehicles		Leasehold improvements		Total
Property, Plant and Equipment (owned)		—		1,078		2,053		3,131
Right-of-use asset		2,970		508		—		3,478

Total		2,970		1,586		2,053		6,609


	December 31, 2022
	Building		Equipment and Vehicles		Leasehold improvements		Total
Property, Plant and Equipment (owned)		—		1,944		3,125		5,069
Right-of-use asset		5,462		521		—		5,983

Total		5,462		2,465		3,125		11,052

(2)	Details of Property, Plant and Equipment (owned) as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023
	Equipment and Vehicles			Leasehold improvements			Total
Acquisition cost		6,370			6,272			12,642
Accumulated depreciation		(5,292	)		(4,219	)		(9,511	)

Net carrying amount		1,078			2,053			3,131


	December 31, 2022
	Equipment and Vehicles			Leasehold improvements			Total
Acquisition cost		6,012			6,107			12,119
Accumulated depreciation		(4,068	)		(2,982	)		(7,050	)

Net carrying amount		1,944			3,125			5,069

(3)	Details of changes in Property, Plant and Equipment (owned) are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023
	Equipment and Vehicles			Leasehold improvements			Total
Beginning balance		1,944			3,125			5,069
Acquisitions		358			165			523
Depreciation		(1,224	)		(1,237	)		(2,461	)

Ending balance		1,078			2,053			3,131


	For the year ended December 31, 2022
	Equipment and Vehicles			Leasehold improvements			Total
Beginning balance		2,676			2,411			5,087
Acquisitions		429			1,783			2,212
Depreciation		(1,161	)		(1,069	)		(2,230	)

Ending balance		1,944			3,125			5,069

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(4)	Details of right-of-use assets as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	December 31, 2023
	Building			Equipment and Vehicles			Total
Acquisition cost		5,295			928			6,223
Accumulated depreciation		(2,325	)		(420	)		(2,745	)

Net carrying amount		2,970			508			3,478


	December 31, 2022
	Building			Equipment and Vehicles			Total
Acquisition cost		10,320			1,191			11,511
Accumulated depreciation		(4,858	)		(670	)		(5,528	)

Net carrying amount		5,462			521			5,983

(5)	Details of changes in right-of-use assets for the years ended December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023
	Building			Equipment and Vehicles			Total
Beginning balance		5,462			521			5,983
New contracts		754			484			1,238
Contract change		(173	)		—			(173	)
Termination		—			(116	)		(116	)
Depreciation		(3,073	)		(381	)		(3,454	)

Ending balance		2,970			508			3,478


	For the year ended December 31, 2022
	Building			Equipment and Vehicles			Total
Beginning balance		2,272			431			2,703
New contracts		5,777			579			6,356
Contract change		—			—			—
Termination		—			(78	)		(78	)
Depreciation		(2,587	)		(411	)		(2,998	)

Ending balance		5,462			521			5,983

12.	INTANGIBLE ASSETS

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


	December 31, 2023
	Software			Development cost			Membership deposit		Total
Acquisition cost		4,328			3,622			2,371		10,321
Accumulated amortization		(3,841	)		(2,428	)		—		(6,269	)

Net carrying amount		487			1,194			2,371		4,052


	December 31, 2022
	Software			Development cost			Membership deposit		Total
Acquisition cost		3,866			3,500			2,371		9,737
Accumulated amortization		(3,162	)		(1,716	)		—		(4,878	)

Net carrying amount		704			1,784			2,371		4,859

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

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


	For the year ended December 31, 2023
	Software			Development cost			Membership deposit		Construction in progress			Total
Beginning balance		704			1,784			2,371		—			4,859
Acquisitions		172			61			—		350			583
Amortization		(678	)		(712	)		—		—			(1,390	)
Transfer		289			61			—		(350	)		—

Ending balance		487			1,194			2,371		—			4,052


	For the year ended December 31, 2022
	Software			Development cost			Membership deposit		Construction in progress			Total
Beginning balance		882			1,918			2,371		—			5,171
Acquisitions		477			200			—		300			977
Amortization		(655	)		(634	)		—		—			(1,289	)
Transfer		—			300			—		(300	)		—

Ending balance		704			1,784			2,371		—			4,859

13.	OTHER ASSETS

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


	December 31, 2023		December 31, 2022
Prepaid expenses		484		322

14.	DEBENTURES

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


	December 31, 2023					December 31, 2022
	Interest rate (%)		Amount			Interest rate (%)		Amount
Face value of bonds:
General bonds		1.70~4.25		640,000			1.23~3.90		500,000
Subordinated bonds		2.13~2.55		950,000			2.13~2.55		950,000

Sub-total				1,590,000					1,450,000
Deducted item:
Discounts on bonds				(2,341	)				(2,238	)

Total				1,587,659					1,447,762

15.	PROVISIONS

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


	December 31, 2023		December 31, 2022
Asset retirement obligation		1,227		487

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(2)	Changes in asset retirement obligation are as follows (Unit: Korean Won in millions):


	For the year ended December 31,2023			For the year ended December 31,2022
	For the year ended December 31,2023			For the year ended December 31,2022
Beginning balance		487			394
Increase		754			87
Amortization		52			6
Reversal due to contract change		(66	)		—

Ending balance		1,227			487

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 assets used as offices as of December 31, 2023, discounted by appropriate discount rate. The restoration cost is expected to occur by the end of the lease period of each office, and the Company used the average amount of the major subsidiaries’ actual recovery cost and the inflation rate for the past 3 years in order to estimate future recovery cost.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

16.	NET DEFINED BENEFIT ASSET

The Company’s pension plan is based on the defined benefit retirement pension plan. Employees and directors with one or more years of service are entitled to receive a payment upon termination of their employment, based on their length of service and rate of salary at the time of termination. The assets of the plans are measured at their fair value at the end of reporting date. The plan liabilities are measured using the projected unit method, which takes into account of projected earnings’ increase, using actuarial assumptions that give the best estimate of the future cash flows that will arise under the plan liabilities.

The Company 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 asset are as follows (Unit: Korean Won in millions):


	December 31, 2023			December 31, 2022
Present value of defined benefit obligation		(13,280	)		(18,660	)
Fair value of plan assets		17,221			24,607

Net defined benefit asset		3,941			5,947

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


		For the year ended December 31, 2023			For the year ended December 31, 2022
Beginning balance			18,660			20,966
Transfer-in / out			(6,959	)		(625	)
Current service cost			3,524			2,527
Interest cost			967			608
Remeasurements	Financial assumption		1,161			(4,443	)
	Experience adjustment		(634	)		917
Retirement benefit paid			(1,783	)		(941	)
Others			(1,656	)		(349	)

Ending balance			13,280			18,660

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

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


	For the year ended December 31, 2023			For the year ended December 31, 2022
Beginning balance		24,607			22,482
Transfer-in / out		(6,014	)		644
Interest income		1,332			685
Remeasurements		(658	)		(310	)
Employer’s contributions		—			2,070
Retirement benefit paid		(2,046	)		(964	)

Ending balance		17,221			24,607

(4)	The fair value of plan assets as of December 31, 2023 and 2022 is as follows (Unit: Korean Won in millions):


	December 31, 2023		December 31, 2022
Cash and due from banks		17,221		24,607

Meanwhile, the actual revenue of the current and prior term plan assets is 674 million Won and 375 million Won, respectively. The contribution expected to be paid in the fiscal year beginning after the reporting period is 1,214 million Won.

(5)	The amount recognized in profit or loss and total comprehensive income related to the defined benefit plan for the years ended December 31, 2023 and 2022 is as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023			For the year ended December 31, 2022
Current service cost		3,524			2,527
Net interest expense		(365	)		(77	)

Cost recognized in net income		3,159			2,450

Remeasurements (*)		1,185			(3,216	)

Cost recognized in total comprehensive income		4,344			(766	)

(*)	The amount is before income tax effect.

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


	December 31, 2023			December 31, 2022
Discount rate		4.55	%		5.34	%
Future wage growth rate		5.75	%		5.50	%
Mortality rate		Issued by Korea Insurance Development Institute			Issued by Korea Insurance Development Institute
Retirement rate		Issued by Korea Insurance Development Institute			Issued by Korea Insurance Development Institute

The weighted average maturity of the defined benefit obligation is 9.50 years.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

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


			December 31, 2023			December 31, 2022
Discount rate	Increase by 1	% point		(1,119	)		(1,487	)
	Decrease by 1	% point		1,277			1,701
Future wage growth rate	Increase by 1	% point		1,251			1,683
	Decrease by 1	% point		(1,118	)		(1,499	)

17.	OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES

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


	December 31, 2023		December 31, 2022
Other financial liabilities:
Accounts payable		140,592		20,243
Accrued expenses		19,826		19,912
Lease liabilities		3,203		5,884

Sub-total		163,621		46,039

Other liabilities:
Other miscellaneous liabilities		392		591

Total		164,013		46,630

18.	DERIVATIVES

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

December 31, 2023

December 31, 2022

Nominal amount

Assets
(Liabilities)
For trading

Nominal amount

Assets
(Liabilities)
For trading

Equity Forwards

—

176,720

689

Derivatives held for trading were terminated due to the additional acquisition of shares of Woori Asset Trust on March 31, 2023 (Note 4, Note 6 and Note 9).

19.

EQUITY

(1)	Details of equity as of December 31, 2023 and 2022 are as follows (Unit: Korean Won in millions):


		December 31, 2023			December 31, 2022
Capital			3,802,676			3,640,303
Hybrid securities			3,610,953			3,112,273
Capital surplus			11,120,236			10,909,281
Other equity	Treasury stock		(628	)		(26	)
	Accumulated other comprehensive income		(7,243	)		(26,160	)

	Sub-total		(7,871	)		(26,186	)

Retained earnings (1) (2)			5,475,004			5,261,231

Total			24,000,998			22,896,902

(*1)	The regulatory reserve for credit loss in retained earnings amounted to 3,697 million Won and 2,356 million Won as of December 31, 2023 and 2022 in accordance with the relevant regulation.

(*2)	The earned surplus reserve in retained earnings amounted to 300,190 million Won and 181,860 million Won as of December 31, 2023 and 2022 in accordance with the Article 53 of the Financial Holding Company Act.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

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


	December 31, 2023		December 31, 2022
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*		751,949,461 Shares		728,060,549 Shares
Capital stock		3,802,676 million Won		3,640,303 million Won

(*)	Due to retirement of treasury stock (5,585,799 shares), total par value of the shares issued and paid-in capital is different.

(3)	Hybrid securities

The bond-type hybrid securities classified as owner’s equity are as follows (Unit: Korean Won in millions):


	Issue date		Maturity		Interest rate (%)		December 31, 2023			December 31, 2022
Securities in local currency		2019-07-18		—		3.49		500,000			500,000
Securities in local currency		2019-10-11		—		3.32		500,000			500,000
Securities in local currency		2020-02-06		—		3.34		400,000			400,000
Securities in local currency		2020-06-12		—		3.23		300,000			300,000
Securities in local currency		2020-10-23		—		3.00		200,000			200,000
Securities in local currency		2021-04-08		—		3.15		200,000			200,000
Securities in local currency		2021-10-14		—		3.60		200,000			200,000
Securities in local currency		2022-02-17		—		4.10		300,000			300,000
Securities in local currency		2022-07-28		—		4.99		300,000			300,000
Securities in local currency		2022-10-25				5.97		220,000			220,000
Securities in local currency		2023-02-10				4.65		300,000			—
Securities in local currency		2023-09-07		—		5.04		200,000			—
Issuance cost								(9,047	)		(7,727	)

Total								3,610,953			3,112,273

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

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(4)	Accumulated other comprehensive income

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


	For the year ended December 31, 2023
	Beginning balance			Increase (decrease)			Income tax effect			Ending balance
Net gain (loss) on valuation of financial assets at FVTOCI		(27,364	)		26,938			(7,149	)		(7,575	)
Remeasurements of defined benefit plan		1,204			(1,185	)		313			332

Total		(26,160	)		25,753			(6,836	)		(7,243	)


	For the year ended December 31, 2022
	Beginning balance			Increase (decrease)			Income tax effect			Ending balance
Net gain (loss) on valuation of financial assets at FVTOCI		(2,688	)		(33,522	)		8,846			(27,364	)
Remeasurements of defined benefit plan		(1,160	)		3,216			(852	)		1,204

Total		(3,848	)		(30,306	)		7,994			(26,160	)

(5)	Regulatory Reserve for Credit Loss

In accordance with Article 26 ~ 28 of the Financial holding company Supervision Regulations, the Company calculates and discloses the regulatory reserve for credit loss.

Balance of the regulatory reserve for credit loss

Balance of the planned regulatory reserve for credit loss is as follows (Unit: Korean Won in millions):


	December 31, 2023			December 31, 2022
Beginning balance		3,697			2,356
Planned provision (reversal) of regulatory reserve for credit loss		(3,560	)		1,341

Ending balance		137			3,697

Provision of regulatory reserve for credit loss, adjusted net income after the provision of regulatory reserve and others


	For the year ended December 31, 2023			For the year ended December 31, 2022
Net income before regulatory reserve		1,424,508			1,183,249
Provision (reversal) of regulatory reserve for credit loss		(3,560	)		1,341
Adjusted net income after the provision of regulatory reserve		1,428,068			1,181,908
Dividends to hybrid securities		(131,149	)		(91,757	)
Adjusted net income after regulatory reserve and dividends to hybrid securities		1,296,919			1,090,151
Adjusted EPS after regulatory reserve and dividends to hybrid securities (Unit: Korean Won)		1,759			1,497

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(6)	Statements of appropriations of retained earnings are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023 (Expected date of disposal March 22, 2024)			For the year ended December 31, 2022 (Confirmed date of disposal March 24, 2023)
Unappropriated retained earnings:
Unappropriated retained earnings carried over from prior years		4,243,846			4,094,731
Interim dividend (dividend per share (%)) (2023: 360 Won (7.2%)) (2022: 150 Won (3.0%))		(266,089	)		(109,209	)
Dividend to hybrid equity securities		(131,149	)		(91,757	)
Retirement of treasury stock		(100,000	)		—
Net income		1,424,508			1,183,249

		5,171,116			5,077,014

Appropriation of retained earnings:
Earned profit reserves		3,560			—

		3,560			—
Distribution of retained earnings:
Earned profit reserves		142,460			118,330
Regulatory reserve for credit loss		—			1,341
Cash dividend (dividend per share (%)) (2023: 640 Won (12.8%)) (2022: 980 won (19.6%))		481,213			713,497

		623,673			833,168

Unappropriated retained earnings to be carried forward		4,551,003			4,243,846

The appropriation of retained earnings for the year ended December 31, 2023, is expected to be appropriated at the shareholders’ meeting on March 22, 2024. The appropriation date for the year ended December 31, 2022, was March 24, 2023.

(7)	Changes in treasury stocks are as follows (Unit: Shares, Korean Won in millions):


	December 31, 2023
	Beginning balance		Acquisition		Retirement			Ending balance
Number of shares		2,324		8,637,420		(8,585,799	)		53,945
Book value		26		100,602		(100,000	)		628

	December 31, 2022
	Beginning balance		Acquisition		Retirement			Ending balance
Number of shares		2,324		—		—			2,324
Book value		26		—		—			26

20.

DIVIDENDS

(1)	Dividends per share and the total dividends for the fiscal year ending December 31, 2022 were 980 Won and 713,497 million Won, respectively, approved at the regular general shareholder’s meeting held on March 24, 2023, and were paid in April 2023.

(2)	On July 21, 2023, the Board of Directors has declared a quarterly dividend of 180 Won per share (130,748 million Won in total) with June 30, 2023 as a record date, and were paid in August 2023.

(3)	On October 26, 2023, the Board of Directors has declared a quarterly dividend of 180 Won per share (135,341 million Won in total) with September 30, 2023 as a record date, and were paid in November 2023.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(4)

Dividends per share and the total dividends for the fiscal year ending December 31, 2023 were 640 Won and 481,213 million Won, respectively, will be approved at the regular general shareholders’ meeting to be held on March 22, 2024, with February 29, 2024 as the dividend record date. The current financial statements do not include such outstanding dividends.

21.	NET INTEREST INCOME

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


	For the year ended December 31, 2023		For the year ended December 31, 2022
Interest on due from banks		64,496		25,587
Other interest income		96		27

Total		64,592		25,614

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


	For the year ended December 31, 2023		For the year ended December 31, 2022
Interest on borrowings		36,834		30,606
Other interest expense		51		6
Interest on lease liabilities		212		32

Total		37,097		30,644

22.	NET FEES AND COMMISSIONS INCOME

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


	For the year ended December 31, 2023		For the year ended December 31, 2022
Fees and commissions income		1,625		1,596

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


	For the year ended December 31, 2023		For the year ended December 31, 2022
Fees and commissions paid		10,752		7,837
Others		10,970		8,818

Total		21,722		16,655

23.	DIVIDEND INCOME

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


	For the year ended December 31, 2023		For the year ended December 31, 2022
Dividend income recognized from investments in subsidiaries		1,465,826		1,259,426
Dividend income recognized from FVTOCI		17,130		12,967

Total		1,482,956		1,272,393

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

24.	NET GAIN OR LOSS ON FINANCIAL INSTRUMENTS AT FVTPL

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


	For the year ended December 31, 2023		For the year ended December 31, 2022
Gains and losses on financial instruments at FVTPL mandatorily measured at fair value		2,023		1,018

(2)	Details of net gain or loss on financial instrument at FVTPL are as follows (Unit: Korean Won in millions):

For the year ended
December 31, 2023

For the year ended
December 31, 2022

Derivatives (Held for trading)

Equity derivatives

Gain on transactions and valuation

2,023

1,018

25.	REVERSAL(PROVISION) FOR IMPAIRMENT LOSSES DUE TO CREDIT LOSS

Details of reversal for impairment losses due to credit loss recognized are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023			For the year ended December 31, 2022
Provision for impairment losses due to credit loss on loans and other financial assets at amortized cost		(348	)		(244	)

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

26.	GENERAL AND ADMINISTRATIVE EXPENSES

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


			For the year ended December 31, 2023		For the year ended December 31, 2022
Employee benefits	Short-term employee benefits	Salaries		29,196		30,661
		Employee fringe benefits		9,978		9,978
	Retirement benefit service costs			3,159		2,450
	Share based payments			2,362		2,157

	Sub-total			44,695		45,246

Depreciation and amortization				7,305		6,517
Other general and administrative expenses	Rent			1,715		1,602
	Taxes and public dues			461		400
	Service charges			2,631		3,038
	Computer and IT related			6,358		6,040
	Telephone and communication			803		754
	Operating promotion			1,165		1,307
	Advertising			95		168
	Printing			62		52
	Traveling			400		588
	Supplies			144		157
	Insurance premium			202		195
	Reimbursement			1,079		1,081
	Vehicle maintenance			220		282
	Others			24		24

	Sub-total			15,359		15,688

	Total			67,359		67,451

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(2)	Share-based payment

Details of performance condition share-based payment granted to executives as of December 31, 2023 and 2022 are as follows.

Performance condition share-based payment


Subject to		Shares granted for the year 2020
Type of payment		Cash-settled
Vesting period		January 1, 2020 ~ December 31, 2023
Date of payment		2024-01-01
Fair value (*1)		12,885 Won
Valuation method		Black-Scholes Model
Expected dividend rate		6.25%
Expected maturity date		0 years
Number of shares remaining	As of December 31, 2023	189,270 shares
	As of December 31, 2022	189,270 shares
Number of shares granted (*2)	As of December 31, 2023	189,270 shares
	As of December 31, 2022	189,270 shares
Subject to		Shares granted for the year 2021
Type of payment		Cash-settled
Vesting period		January 1, 2021 ~ December 31, 2024
Date of payment		2025-01-01
Fair value (*1)		12,105 Won
Valuation method		Black-Scholes Model
Expected dividend rate		6.25%
Expected maturity date		1 years
Number of shares remaining	As of December 31, 2023	239,798 shares
	As of December 31, 2022	239,798 shares
Number of shares granted (*2)	As of December 31, 2023	239,798 shares
	As of December 31, 2022	239,798 shares
Subject to		Shares granted for the year 2022
Type of payment		Cash-settled
Vesting period		January 1, 2022 ~ December 31, 2025
Date of payment		2026-01-01
Fair value (*1)		11,371 Won
Valuation method		Black-Scholes Model
Expected dividend rate		6.25%
Expected maturity date		2 years
Number of shares remaining	As of December 31, 2023	223,176 shares
	As of December 31, 2022	223,176 shares
Number of shares granted (*2)	As of December 31, 2023	223,176 shares
	As of December 31, 2022	223,176 shares

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022


Subject to		Shares granted for the year 2023
Type of payment		Cash-settled
Vesting period		January 1, 2023 ~ December 31, 2026
Date of payment		2027-01-01
Fair value (*1)		10,683 Won
Valuation method		Black-Scholes Model
Expected dividend rate		6.25%
Expected maturity date		3 years
Number of shares remaining	As of December 31, 2023	160,929 shares
	As of December 31, 2022	—
Number of shares granted (*2)	As of December 31, 2023	160,929 shares
	As of December 31, 2022	—

(*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)

The number of payable stocks is granted at the initial contract date and the payment rate is determined based on the achievement of the pre-determined performance targets. Performance is evaluated as long-term performance indication including relative shareholder return, net income, return on equity (ROE), non-performing loan ratio and job performance.

The Company accounts for performance condition share-based payments according to the cash-settled method and the fair value of the liabilities is reflected in the compensation costs by re-measuring every closing period. As of December 31, 2023 and 2022 the book value of the liabilities related to the performance condition share-based payments recognized by the Company is 9,598 million Won and 8,266 million Won.

27.	NON-OPERATING INCOME (EXPENSES)

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


	For the year ended December 31, 2023			For the year ended December 31, 2022
Other non-operating income		98			61
Other non-operating expense		(1,141	)		(1,424	)

Total		(1,043	)		(1,363	)

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


	For the year ended December 31, 2023		For the year ended December 31, 2022
Lease change cancellation income		37		5
Others		61		56

Total		98		61

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


	For the year ended December 31, 2023		For the year ended December 31, 2022
Donations		1,120		1,420
Lease change cancellation loss		2		1
Others		19		3

Total		1,141		1,424

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

28.	INCOME TAX EXPENSE (INCOME) AND DEFERRED TAX

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


	For the year ended December 31, 2023			For the year ended December 31, 2022
	For the year ended December 31, 2023			For the year ended December 31, 2022
Current tax expense:
Current tax expense with respect to the current period		—			—

Sub-total		—			—

Deferred tax expense income
Change in deferred tax liabilities(assets) due to temporary differences		5,955			(6,979	)
Income tax expense directly attributable to equity		(6,836	)		7,994

Sub-total		(881	)		1,015

Income tax expense (income)		(881	)		1,015

(2)	The relationship between income before income tax expense deduction and income tax expense in the current comprehensive income statement is as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023			For the year ended December 31, 2022
Net income before income tax expense		1,423,627			1,184,264
Tax calculated at statutory tax rate (*1)		365,476			315,311
Adjustments:
Effects of income that is exempt from taxation		(386,749	)		(340,038	)
Effect of expenses that are not deductible in determining taxable profit		613			750
Effect of corporate tax due to consolidate tax plans		19,975			23,348
Others		(196	)		1,644

Sub-total		(366,357	)		(314,296	)

Income tax expense (income)		(881	)		1,015

Effective tax rate (*2)		—			0.09	%

(*1)

In 2023, the corporate tax rate is 9.9% up to 200 million Won in tax basis, 20.9% over 200 million Won to 20 billion Won, 23.1% over 20 billion Won to 300 billion Won and 26.4% over 300 billion Won. In 2022, the corporate tax rate is 11% up to 200 million Won in tax basis, 22% over 200 million Won to 20 billion Won, 24.2% over 20 billion Won to 300 billion Won and 27.5% over 300 billion Won.

(*2)	It is tax income for the year ended December 31, 2023, so the annual effective tax rate was not calculated.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(3)	Details of changes in deferred income tax assets and liabilities are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023
	Beginning balance			Recognized as income (expense)			Recognized as other comprehensive income (expense)			Ending Balance
Gain (loss) related to securities		9,866			—			(7,149	)		2,717
Provision for loan losses		83			90			—			173
Defined benefit liability		1,430			272			139			1,841
Deposits with employee retirement insurance trust		(2,640	)		625			174			(1,841	)
Provisions		129			195			—			324
Share based payment		2,189			344			—			2,533
Others		2,376			(645	)		—			1,731

Net deferred tax assets(liabilities) in total		13,433			881			(6,836	)		7,478


	For the year ended December 31, 2022
	Beginning balance			Recognized as income (expense)			Recognized as other comprehensive income (expense)			Ending Balance
Gain (loss) related to securities		1,019			—			8,847			9,866
Gain (loss) on valuation of derivatives		90			(90	)		—			—
Provision for loan losses		20			63			—			83
Defined benefit liability		2,637			(272	)		(935	)		1,430
Deposits with employee retirement insurance trust		(1,186	)		(1,536	)		82			(2,640	)
Provisions		108			21			—			129
Share based payment		1,650			539			—			2,189
Others		2,116			260			—			2,376

Net deferred tax assets(liabilities) in total		6,454			(1,015	)		7,994			13,433

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

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


	For the year ended December 31, 2023			For the year ended December 31, 2022
Deductible temporary differences		7,545			5,639
Taxable temporary differences		(7,920,330	)		(7,917,618	)

Total		(7,912,785	)		(7,911,979	)

No deferred income tax asset has been recognized for the deductible temporary difference of 7,545 million Won associated with investments in subsidiaries as of December 31, 2023, because it is not probable that the temporary differences will be reversed in the foreseeable future.

No deferred income tax liability has been recognized for the taxable temporary difference of 7,920,330 million Won associated with investment in subsidiaries as of December 31, 2023, due to the following reasons:

•

The Company is able to control the temporary difference of extinguishment.

•

It is probable that the temporary difference will not be reversed in the foreseeable future.

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


	December 31, 2023			December 31, 2022
Net gain (loss) on valuation of financial assets at FVTOCI		2,717			9,866
Remeasurements of defined benefit plan		(99	)		(412	)

Total		2,618			9,454

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


	December 31, 2023		December 31, 2022
Current tax assets		158,951		14,350
Current tax liabilities		32,125		721,795

29.	EARNINGS PER SHARE (“EPS”)

(1)	Basic EPS is calculated by dividing net income attributable to common shareholders by weighted-average number of common shares outstanding (Unit: Korean Won in millions, except for EPS and number of shares):


	For the year ended December 31, 2023			For the year ended December 31, 2022
Net income		1,424,508			1,183,249
Dividends to hybrid securities		(131,149	)		(91,757	)
Net income attributable to common shareholders		1,293,359			1,091,492
Weighted average number of common shares outstanding (Unit: million shares)(*)		737			728
Basic EPS (Unit: Korean Won)		1,754			1,499

(*)

The number of common shares issued by the Company is 751,949,461. The calculation of the weighted average number of common shares took into account the retirement of 8,585,799 treasury shares that were acquired, as well as the issuance of 32,474,711 common shares through a comprehensive stock exchange during the year ended December 31, 2023.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

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


For the year ended December 31, 2023
	Number of shares			Accumulated number of shares outstanding during period
Common shares issued at the beginning of the period		728,060,549			265,742,100,385
Treasury stock		(2,324	)		(848,260	)
Acquisition and retirement of treasury stock		(8,585,799	)		(1,386,759,947	)
Acquisition of treasury stock (Fractional shares in comprehensive exchange)		(51,621	)		(6,504,246	)
Issuance of new shares (Comprehensive stock exchange)		32,474,711			4,741,307,806
Sub-total (①)					269,089,295,738
Weighted average number of common shares outstanding (②=(①/365))					737,230,947


For the year ended December 31, 2022
	Number of shares			Accumulated number of shares outstanding during period
Common shares issued at the beginning of the period		728,060,549			265,742,100,385
Treasury stock		(2,324	)		(848,260	)
Sub-total (①)					265,741,252,125
Weighted average number of common shares outstanding (②=(①/365))					728,058,225

Diluted EPS is equal to basic EPS because there is no dilution effect for the year ended December 31, 2023 and 2022.

30.	CONTINGENT LIABILITIES AND COMMITMENTS

(1)	Litigation case

As of December 31, 2023 and 2022, the Company has no litigation case in progress.

(2)	Details of loan commitments with financial institutions are as follows (Unit: Korean Won in millions):

December 31, 2023

December 31, 2022

Financial institutions

Line of credit

Loan balance

Line of credit

Loan balance

Loans

Standard Chartered Bank Korea Ltd.

100,000

—

100,000

—

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

31.	RELATED PARTY TRANSACTIONS

Related parties of the Company as of December 31, 2023 and 2022, and assets and liabilities recognized, guarantees and commitments, major transactions with related parties and compensation to key management for the years ended December 31, 2023 and 2022 are as follows:

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


Related parties	Title of account	December 31, 2023			December 31, 2022
Subsidiaries
Woori Bank	Cash and cash equivalents		289,507			313,361
	Other financial assets		1,094,635			1,945,807
	Allowance for credit losses		(663	)		(315	)
	Other financial liabilities		131,397			21,242
Woori Card Co., Ltd.	Other financial assets		8,597			46,920
	Other financial liabilities		225			281
Woori Financial Capital Co., Ltd.	Other financial assets		816			46,487
Woori Financial Capital Co., Ltd.	Other financial liabilities		4,430			—
Woori Savings Bank	Other financial assets		—			389
	Other financial liabilities		1,271			—
Woori Financial F&I Co., Ltd.	Other financial liabilities		1,650			564
Woori Global Asset Management Co., Ltd	Other financial assets		—			101
Woori Global Asset Management Co., Ltd	Other financial liabilities		46			—
Woori Private Equity Asset Management Co. Ltd.	Other financial assets		76			—
Woori Private Equity Asset Management Co. Ltd.	Other financial liabilities		—			127
Woori Credit Information Co., Ltd.	Other financial assets		744			535
Woori Credit Information Co., Ltd.	Other financial liabilities		—			1
Woori Fund Service Co., Ltd.	Other financial assets		436			834
Woori Fund Service Co., Ltd.	Other financial liabilities		—			1
Woori FIS Co., Ltd.	Other financial assets		—			1,054
	Other financial liabilities		1,540			480
Woori Finance Research Institute Co., Ltd.	Other financial assets		175			66
Woori Finance Research Institute Co., Ltd.	Other financial liabilities		2,590			2,160
Associates of subsidiaries W Service Networks Co., Ltd.	Other financial liabilities		48			90

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

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


Related parties	Title of account	For the year ended December 31, 2023		For the year ended December 31, 2022
Subsidiaries
Woori Bank	Interest income		63,806		25,614
	Fees and commissions income		1,625		1,596
	Dividend income		1,372,572		1,175,672
	Interest expenses (*2)		190		17
	Fees and commissions expense		34		12
	Provision of impairment loss due to credit loss		348		244
	General and administrative expenses (*2)		4,639		4,087
Woori Card Co., Ltd.	Dividend income		49,083		45,617
Woori Financial Capital Co., Ltd.	Dividend income		45,626		35,690
Woori Financial Capital Co., Ltd.	Fees and commissions expense		8		—
	General and administrative expenses (*2)		75		—
Woori Investment Bank Co., Ltd. (*1)	Dividend income		11,803		10,263
Woori Asset Trust Co., Ltd	Dividend income		780		780
Woori Savings Bank	Dividend income		1,383		2,803
Woori Credit Information Co., Ltd.	Dividend income		535		469
Woori Fund Service Co., Ltd.	Dividend income		1,174		1,100
Woori FIS Co., Ltd.	General and administrative expenses		5,781		5,469
Woori Finance Research Institute Co., Ltd.	Fees and commissions expenses		7,690		6,960
Associates of subsidiaries W Service Networks Co., Ltd.	General and administrative expenses		769		1,078

(*1)

Of the 80,000 million Won of debentures issued during the current period, 10,000 million Won was acquired by Woori Investment Bank Co., Ltd. and the Company paid 10 million Won as an acquisition fee which is included in the discount on debentures issued. Of the 820,000 million Won of hybrid securities issued during the prior period, 55,000 million Won was acquired by Woori Investment Bank Co., Ltd. and the Company paid 83 million Won as an acquisition fee which is included in the issuance cost of hybrid securities. Also, Of the 80,000 million Won of debentures issued during the prior period, 10,000 million Won was acquired by Woori Investment Bank Co., Ltd. and the Company paid 10 million Won as an acquisition fee which is included in the discount on debentures issued.

(*2)	The depreciation of right-of-use assets and interest expense of lease liabilities arising from lease transactions during the current term and prior term are included.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(3)	The details of the right-of-use assets and lease liabilities due to lease transactions with related parties as of December 31, 2023 and 2022 are as follows (Unit: Korea Won in millions):

Related parties

Title of account

December 31, 2023

December 31, 2022

Subsidiary

Woori Bank

Right-of-use assets

2,970

5,462

Lease liabilities (*)

2,658

5,325

Woori Financial Capital Co., Ltd.

Right-of-use assets

226

—

Lease liabilities (*)

238

—

(*)	Cash outflows of lease liabilities redemption for the years ended December 31, 2023 and 2022 are 2,797 million Won and 2,658 million Won, respectively.

(4)	The details of loan and borrowing transactions with related parties for the years ended December 31, 2023 and 2022 are as follows (Unit: Korea Won in millions):

Title of
account

For the year ended December 31, 2023

Related parties (*1)

Beginning
balance

Increase

Decrease

Ending
balance

Subsidiary

Woori Bank

Due from banks (*2)

1,595,000

5,379,000

5,620,000

1,354,000

(*1)	Of the 80,000 million Won of debentures issued during the current period, 10,000 million Won was acquired by Woori Investment Bank Co., Ltd. and the entire amount was sold to the market on the date of issuance.

(*2)	Excludes due from banks without withdrawal limitations.

Title of
account

For the year ended December 31, 2022

Related parties (*1)

Beginning
balance

Increase

Decrease

Ending
balance

Subsidiary

Woori Bank

Due from banks (*2)

520,000

3,930,000

2,855,000

1,595,000

(*1)

Of the 820,000 million Won of hybrid securities issued during the current period, 55,000 million Won was acquired by Woori Investment Bank Co., Ltd. and the entire amount was sold to the market on the date of issuance. Of the 80,000 million Won of debentures issued during the current period, 10,000 million Won was acquired by Woori Investment Bank Co., Ltd. and the entire amount was sold to the market on the date of issuance.

(*2)	Excludes due from banks without withdrawal limitations.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

(5)	The details of equity-related transactions with related parties are as follows (Unit: Korean Won in million)


		For the year ended December 31, 2023
Related parties		Investment (*1)		Acquisition of hybrid securities
Subsidiary	Woori Card Co., Ltd.		—		200,000
Subsidiary	Woori Investment Bank Co., Ltd. (*1)		759,678		—
Subsidiary	Woori Asset Trust Co., Ltd (*2)		179,444		—
Subsidiary	Woori Venture Partners (*3)		336,439		—

(*1)	During the current period, the Company acquired 41.3% residual interests (including treasury stocks) of Woori Investment Bank Co., Ltd. Afterward, the Capital increase amount of 500,000 million Won was made in December 2023.

(*2)	During the current period, the Company additionally acquired 28.1% (excluding treasury stocks) interests of Woori Asset Trust Co Ltd. In the case of including treasury stocks, the share ratio was 21.3%.

(*3)

During the current period, the Company additionally acquired 53.9% (excluding treasury stocks) interests of Woori Venture Partners Co., Ltd., which was included in subsidiaries. In the case of including treasury stocks, the share ratio was 52.0%). Afterward, the Company additionally acquired treasury stocks (3.5% interests) in May and acquired 44.5% residual interests held by Woori Venture Partners Co., Ltd.


		For the year ended December 31, 2022
Related parties		Investment (*1)		Acquisition of hybrid securities
Subsidiary	Woori Financial F&I Co., Ltd.		200,000		—
Subsidiary	Woori Financial Capital Co., Ltd.		—		200,000
Subsidiary	Woori Private Equity Asset Management Co. Ltd.		50,000		—

(*1)	During the prior period, Woori Financial F&I Co., Ltd. was established (100% share ratio, 200 billion Won in stock payments) and included as a subsidiary.

(6)	There are no guarantees provided to the related parties as of December 31, 2023 and 2022. The unused commitments and payment guarantees provided from the related parties are as follows (Unit: Korean Won in millions):

Related parties

December 31,
2023

December 31,
2022

Warranty

Subsidiary

Woori Card Co., Ltd.

715

741

Unused loan commitment

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


	For the year ended December 31, 2023		For the year ended December 31, 2022
	For the year ended December 31, 2023		For the year ended December 31, 2022
Short-term employee salaries		5,094		7,432
Retirement benefit service costs		134		213
Share-based compensation		1,970		1,836

Total		7,198		9,481

Key management includes registered executives and non-registered executives. The Company has not recognized any outstanding assets, allowance and related impairment loss due to credit losses from transaction with key management as of December 31, 2023 and 2022. Liabilities related to key management compensation are 10,457 million Won and 10,272 million Won as of December 31, 2023 and 2022, respectively.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

32.

LEASES

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


	December 31, 2023		December 31, 2022
Lease payments:
Within one year		2,969		3,098
After one year but within five years		323		3,070

Total		3,292		6,168

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


	For the year ended December 31, 2023		For the year ended December 31, 2022
	For the year ended December 31, 2023		For the year ended December 31, 2022
Cash outflows from lease		3,312		3,239

(3)	Details of lease payments that are not included in the measurement of lease liabilities due to the fact that they are leases for which the underlying asset is of low value are as follows (Unit: Korean Won in millions):


	For the year ended December 31, 2023		For the year ended December 31, 2022
Lease payments for which the underlying short-term lease payments		20		10
Lease payments for which the underlying asset is of low value		163		157

33.	EVENTS AFTER THE REPORTING PERIOD

1. On October 26, 2023, Woori Asset Management Corp (the surviving company) and Woori Global Asset Management Co., Ltd. (the merged company), subsidiaries of the Company, entered into a merger agreement. On January 10, 2024, the shareholders’ meeting to approve the merger agreement and the board of directors to replace the shareholders’ meeting were held and the resolution was made. The merger registration date is January 29, 2024, and the Company’s percentage of ownership in Woori Asset Management Corp after the merger is 77.5% (3,717,154 shares).

2. On February 16, 2024, Woori Asset Management Corp, the subsidiary of the Company, held the Board of Directors meeting and has declared the capital increase amount of 209,952 million Won, and the Company has decided to participate in the capital increase amount of 200,000 million Won, corresponding to its ownership (95.3%) based on voting rights. Independent Auditor’ Report on Internal Control over Financial Reporting

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

Based on a report originally issued in Korean

To the Board of Directors and Shareholders

Woori Financial Group Inc.

Opinion on Internal Control over Financial Reporting

We have audited Woori Financial Group Inc. (“the Company”) internal control over financial reporting (“ICFR”) as of December 31, 2023 based on the criteria established in the Conceptual Framework for Designing and Operating ICFR (“ICFR Design and Operation Framework”) issued by the Operating Committee of Internal Control over Financial Reporting in the Republic of Korea (the “ICFR Committee”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on ICFR Design and Operation Framework.

We also have audited, in accordance with Korean Standards on Auditing (KSAs), the separate financial statements of the Company, which comprise the separate statement of financial position as of December 31, 2023, the separate statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising of material accounting policy information and other explanatory information, and our report dated March 6, 2024 expressed an unmodified opinion on those separate financial statements.

Basis for Opinion on Internal Control over Financial Reporting

We conducted our audit in accordance with KSAs. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of Internal Control over Financial Reporting section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the internal control over financial reporting in Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management and Those Charged with Governance for the Internal Control over Financial Reporting

The Company’s management is responsible for designing, operating and maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying ‘Operating Status Report of Internal Control over Financial Reporting.’

Those charged with governance have the responsibilities for overseeing the Company’s internal control over financial reporting.

Auditor’s Responsibilities for the Audit of the Internal Control over Financial Reporting

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We conducted the audit in accordance with KSAs. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

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Definition and Limitations of Internal Control over Financial Reporting

An entity’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Korean International Financial Reporting Standards (“K-IFRS”). A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with K-IFRS, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements in the financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The engagement partner on the audit resulting in this independent auditor’s report is Jae-Beom Choi.

/s/ KPMG Samjong Accounting Corp.

Seoul, Korea

March 6, 2024

This report is effective as of March 6, 2024, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the internal control over financial reporting. Accordingly, the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

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WOORI FINANCIAL GROUP INC.

NOTES TO SEPARATE FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

Operating Status Report of

Internal Control over Financial Reporting

To the Shareholders, Board of Directors and Audit Committee of

Woori Financial Group Inc.

We, as the Chief Executive Officer (“CEO”) and Internal Control over Financial Reporting(“ICFR”) Officer of Woori Financial Group Inc. (the “Company”), assessed operating status of the Company’s Internal Control over Financial Reporting for the year ended December 31, 2023.

The Company’s management, including ourselves, is responsible for designing and operating ICFR.

We assessed whether the Company effectively designed and operated its ICFR to prevent and detect errors or frauds which may cause a misstatement in financial statements to ensure preparation and disclosure of reliable financial information.

We used the ‘Conceptual Framework for Designing and Operating Internal Control over Financial Reporting’ established by the Operating Committee of Internal Control over Financial Reporting in Korea (the “ICFR Committee”) as the criteria for design and operation of the Company’s ICFR. We also conducted an assessment of ICFR based on the ‘Management Guideline for Evaluating and Reporting Effectiveness of Internal Control over Financial Reporting’ established by the ICFR Committee.

Based on our assessment, we concluded that the Company’s ICFR is designed and operated effectively as of December 31, 2023, in all material respects, in accordance with the ‘Conceptual Framework for Designing and Operating Internal Control over Financial Reporting’.

February 22, 2024

Jong Yong Yim, Chief Executive Officer

Sung Wook Lee, Internal Control over Financial Reporting Officer

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