WOORI BANK 2013 ANNUAL REPORT Work as One, Smile for All Leading beyond 115 years CONTENTS Work as One 002 Woori Bank's 115th Anniversary 066 Pension & Trust Business 022 Message from the CEO 068 Wealth Management(WM) 026 Woori Financial Group’s Holding Structure 027 Financial Highlights 072 Global Business 028 Board of Directors & Management 074 International Trade Business 030 Corporate Governance 076 Financial Market Business 032 News Highlights 034 Woori Bank’s Awards 2013 080 Social Contribution Activities 083 Woori Smile Microcredit Smile for All 084 Employee Satisfaction 042 Risk Management 044 Ethical Management Financial Review 046 Consumer Protection 087 Management’s Discussion and Analysis -Cham(responsible) Finance 092 Woori Finance Holdings Co., Ltd. and Subsidiaries Consolidated Statements of Financial Position 050 Smart Banking 095 Independent Auditors’ Report 052 Corporate Banking 054 SME Banking 212 Investor Information 056 Institutional Banking 213 Organization 058 Investment Banking 216 Global Network 062 Consumer Banking 064 Real Estate Finance With 115 years of history and tradition, Woori Bank is working together to become a leader as ‘a safe bank’ by accelerating asset clean-up based on thorough risk management & promoting soundness originated by the compliance-driven mindset of employees, ‘a vibrant bank’ by giving fast, convenient, and up-to-date customer oriented services, ‘a unifying bank’ by joining employees forces with leadership & integrity for customer satisfaction, ‘a pioneering bank’ by providing customized global banking services beyond boundaries, and ‘a sharing bank’ by promoting ‘warm-heartedness in the society’ for everlasting sustainability. Woori Bank has shared every moment with our customers for 115 years. Despite numerous difficulties and challenges, Woori Bank stood firm and secure for over a century. Because customers have always been supporting us, recognizing the genuine value of our bank, running and sharing every moment together, Woori Bank will always be with you side-by-side serving you for the next 100 years. 1899 1910 1945 1956 1960 1997 Woori Bank has been with our customers for 115 years SINCE 1899 “115 years have passed, generating values every year and overcoming daily challenges.” Starting from “Daehan Cheonil Bank”(meaning ‘number one bank under the sky’) to Woori Bank(meaning ‘our bank’) as of now, our bank has been the leading bank in the Korean banking sector for over 115 years, contributing to the development of Korean history and finance. Woori Bank will continue to take the lead in developing Korea’s wealth and economy for the next centuries to come. 1999 2001 2003 2012 2013 “Daehan Cheonil Bank” is founded as Korea’s first bank in the modern era. (The Commercial Bank of Korea) Establishment of Korea’s first bank head office, “Gwangtong-gwan” (Currently Jongno Branch) Joseon Trust Company and The Commercial & Industrial Bank of Korea merged to launch “Korea Industrial Bank”(Hanil Bank) Daehan Cheonil Bank renamed “Joseon Sangeup Bank” (The Commercial Bank of Korea). Becomes the first bank to be listed on the Korean Stock Exchange Establishment of “Joseon Trust Company“ Korea Industrial Bank renamed (Hanil Bank) “Hanil Bank” Joseon Sangeup Bank renamed “Peace Bank of Korea” launched “The Commercial Bank of Korea” History of Woori Bank Woori History of 1899 1909 1910 1911 1919 1932 1945 1950 1954 1956 1960 1988 1992 1993 1997 Korea applies to the IMF for a rescue package during the financial crisis History of Korea Korea liberated from Japan’s The Banking Act enacted, Seoul Olympics held Real-name financial (transaction) colonial rule the Korean War(North vs. South) broke out system adopted Japan colonizes Korea March 1st protests against Japanese colonization spark the “Independence Movement” Korea’s first modern constitution established 1899 1997 The Commercial Bank of Korea and Hanil Bank merged to launch “Hanvit Bank” Peace Bank of Korea(commercial banking segment) merged with Hanvit Bank “Woori Financial Group” launched “Woori Financial Information System” launched Bank’s name and CI changed to Woori Finance Holdings and listed on the Korean Stock Exchange Woori Finance Holdings listed on the New York Stock Exchange (NYSE) “Woori Private Equity” launched Woori Bank’s 47th President & CEO Lee, Soon Woo appointed “Woori Finance Research Institute” launched Woori Smart Branch opened “Woori Card” launched “Woori Investment Bank” launched Woori Bank Brazil opened Woori Financial Group’s 6th Chairman & CEO Lee, Soon Woo appointed and Woori Bank’s 48th President & CEO Lee, Soon Woo reappointed 1950 1954 1956 1960 1988 1992 1993 1997 1999 2001 2002 2003 2005 2011 2012 2013 Korea-Japan World Cup held IMF receivership comes to an end 1999 2013 What does Woori Bank achieve and ‘work as one’ to maximize customers satisfaction? Work as One Work Safety Vitality Unity Pioneering Sharing Woori Bank ‘work as one’ to breathe every moment with our customers. We prioritize customer centered values and our roles of being the longest running No. 1 bank and a bank acting as a role model in developing the Korean economy. Key phrases to describe Woori Bank are: ‘A Guardian that Leads in Safety’, ‘A Tech-Savvy Player that Leads in Vitality’, ‘A Woori Family Creator through Unity of Hearts’, ‘A Global Explorer that Leads in Pioneering’, and ‘A Promoter of Cham(responsible) Finance guided by Sharing and Love’. Each and every employee at Woori Bank will always be beside our valuable customers, supporting, running, laughing, sharing each and every moment together. Work as One 2013 ANNUAL REPORT 009 010 010 What does Woori Bank achieve and Woori Bank ‘work as one’ to breath every moment with our customers. We prioritize prioritize We customers. our with moment every breath to one’ as ‘work Bank Woori ‘work bank. asresponsible one’socially a being of roles our and values centered customer Key phrases to describe Woori Bank are: ‘A Mother like Guardian that Leads in in Leads that Guardian like Mother ‘A are: Bank Woori describe to phrases Key Safety’, ‘A Tech-Savvy Player that Leads in Vitality’, ‘A Woori Family Creator through through Creator Family Woori ‘A Vitality’, in Leads that Player Tech-Savvy ‘A Safety’, to of maximizePromoter ‘A and Pioneering’, in Leads customersthat Explorer Global ‘A Hearts’, of Unity Cham(responsible) Finance guided by Sharing and Love’. Each and every employee employee every and Each Love’. and Sharing by guided Finance Cham(responsible) at Woori Bank will always be beside our valuable customers, supporting, running, running, supporting, customers, valuable our beside be always will Bank Woori at satisfaction?together. moment every and each sharing laughing, WOORI BANK Work as One Work Safety Vitality Unity Pioneering Sharing 2013 ANNUAL REPORT 011 A Guardian that Leads in Safety 012 WOORI BANK Woori Bank’s asset management service safely guards and reinforces the growth of customer assets like the sensitivity of a as Work mother who carefully looks after her newborn baby. Our bank’s long journey of protecting or cleaning-up assets through advanced risk management has continued for centuries to serve as a nest in nurturing our customers’ assets like the comfort O ne of one’s home. An ethical mindset has been embodied among all employees as they trust one another to make our bank a sustainable and sound bank. 2013 ANNUAL REPORT 013 A Tech-Savvy Player that Leads in Vitality 014 WOORI BANK Work as Work O ne Woori Bank provides fast, easy, and convenient smart banking services, passionately bracing for and readying ourselves to vibrantly greet our customers at anytime and from anywhere. Woori Bank approaches our customers right on the spot to build stronger rapport and friendship compared to our peers. Above all, well acknowledging that customer accessibility maximization is the key to strengthening our new growth engine, Woori Bank serves exceptional smart banking services of speed and convenience for everyone. 2013 ANNUAL REPORT 015 A Creator of Woori Family through Unity of Hearts 016 WOORI BANK Believing that no barriers are insurmountable despite hardships in life, Woori Bank has all level of managers at the as Work forefront with unyielding leadership, colleagues that support them wholeheartedly, and all employees who are ready to unite into one heart and soul. We genuinely have a corporate culture that prioritize the leaders’ commitment towards O ne number one customer satisfaction and colleagues’ collective spirits in overcoming any obstacles to sustain growth. Woori Bank where everyone is united is home to a bigger and wider path forward. 2013 ANNUAL REPORT 017 A Global Explorer that Leads in Pioneering 018 WOORI BANK Work as Work O ne Woori Bank challenges prejudice and thinks outside the common boundaries, opening up a new door of opportunities beyond A Global Explorer that Leads in Pioneering any boundaries. This stance will be reaffirmed by pioneering in the global banking sector, and leading to a more creative path in strengthening global finance. Cherishing the 115 year history in being the 1st bank founded within Korea and steadily strengthening international presence, our bank will continue to be a leading bank worldwide with the ability to seek for a new world of convergence, adapting to the dynamic changes and improving the shortcomings of the current banking legacy. 2013 ANNUAL REPORT 019 A Promoter of Cham(responsible) Finance guided by Sharing and Love 020 WOORI BANK Believing that a genuine heart communicates itself to the core, and prioritizing social roles & values of finance over other as Work A Promoter of Cham(responsible) Finance guided by objectives, Woori Bank continues to lead the social norm in sincerely understanding and sharing with our community. To make the world a place of warmheartedness, our bank opened ‘Consumer Protection Center’ for the 1st time in Korea O ne and Love and encouraged our bank to be reborn as a more socially responsible bank.