Republic Of Korea S-B/A Registration of securities for foreign governments (amended)

As filed with the Securities and Exchange Commission on August 26, 2024

Registration Statement No. 333-280523

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.

AMENDMENT NO. 1

TO

REGISTRATION STATEMENT

UNDER

SCHEDULE B

OF

THE SECURITIES ACT OF 1933

THE EXPORT-IMPORT BANK OF KOREA

(Name of Registrant)

THE REPUBLIC OF KOREA

(Co-Registrant and Guarantor)

Names and Addresses of Authorized Representatives in the United States:

Jin Yi or Seyoung Kim Duly Authorized Representatives of The Export-Import Bank of Korea 460 Park Avenue, 8th Floor New York, NY 10022 Munkyu Park Duly Authorized Representative of The Republic of Korea 460 Park Avenue, 9th Floor New York, NY 10022

Copies to:

Jinduk Han, Esq.

Cleary Gottlieb Steen & Hamilton LLP

c/o 19F, Ferrum Tower

19, Eulji-ro 5-gil, Jung-gu

Seoul 04539

The Republic of Korea

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

The securities registered hereby will be offered on a delayed or continuous basis pursuant to the procedures set forth in Securities Act Release Nos. 33-6240 and 33-6424.

CALCULATION OF REGISTRATION FEE

Title of each class of securities being registered	Amount to be registered (1)	Amount of registration fee
Debt securities with or without warrants to purchase debt securities	US$5,000,000,000	US$738,000
Guarantees of The Republic of Korea	— (2)	— (2)

(1) Or an equivalent amount in another currency or currencies or in composite currencies or as determined by reference to an index or, if the debt securities are to be offered at a discount, the approximate proceeds to The Export-Import Bank of Korea. Includes the maximum principal amount of the obligations to be guaranteed by the Registrants under the guarantees registered hereby.

(2) The Republic of Korea may irrevocably guarantee the debt securities being registered hereby. Pursuant to Rule 457(n) of the Securities Act of 1933, no registration fee is required with respect to the guarantees.

Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus contained in this Registration Statement and supplements to such Prospectus will also be used in connection with US$2,556,498,627 of debt securities with or without warrants to purchase debt securities registered under Registration Statement No. 333-272847.

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

* This Registration Statement also constitutes Post-Effective Amendment No. 4 to Registration Statement No. 333-272847.

EXPLANATORY NOTE

This registration statement relates to US$5,000,000,000 aggregate amount of (i) debt securities (with or without warrants) of The Export-Import Bank of Korea to be offered from time to time as separate issues on terms and in the manner to be specified in a prospectus supplement to be delivered in connection with each such offering and (ii) guarantees that may be issued by The Republic of Korea in respect of debt securities of The Export-Import Bank of Korea on terms and in the manner to be specified in a prospectus supplement to be delivered in connection with each such issuance. The prospectus constituting a part of this registration statement relates to (i) the debt securities (with or without warrants) registered hereunder, (ii) guarantees that may be issued by The Republic of Korea, registered hereunder and (iii) US$2,556,498,627 aggregate principal amount of debt securities (with or without warrants) registered under Registration Statement No. 333-272847 (including an aggregate principal amount of US$640,000,000 of debt securities that may be sold by us from time to time in a continuous offering designated Medium-Term Notes, Series A, Due Not Less Than Nine Months From Date of Issue (the “MTNs”)).

This registration statement contains a form of prospectus supplement filed as Exhibit K to this registration statement to be used in connection with the sale by us of the MTNs in a continuous offering.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED AUGUST 26, 2024

PROSPECTUS

US$7,556,498,627

The Export-Import Bank of Korea

Debt Securities

Warrants to Purchase Debt Securities

The Republic of Korea

Guarantees

We will provide the specific terms of these securities in supplements to this prospectus. You should read this prospectus and any prospectus supplement carefully before you invest.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

This prospectus is dated     , 2024.

TABLE OF CONTENTS

	Page
Certain Defined Terms and Conventions		1
Use of Proceeds		2
The Export-Import Bank of Korea		3
Overview		3
Capitalization		4
Business		5
Selected Financial Statement Data		7
Operations		10
Description of Assets and Liabilities		16
Debt		26
Credit Policies, Credit Approval and Risk Management		28
Capital Adequacy		29
Overseas Operations		30
Property		31
Management and Employees		31
Tables and Supplementary Information		32
Financial Statements and the Auditors		41
The Republic of Korea		134
Land and History		134
Government and Politics		136
The Economy		139
Principal Sectors of the Economy		146
The Financial System		154
Monetary Policy		159
Balance of Payments and Foreign Trade		163
Government Finance		170
Debt		173
Tables and Supplementary Information		176
Description of the Securities		179
Description of Debt Securities		179
Description of Warrants		185
Terms Applicable to Debt Securities and Warrants		186
Description of Guarantees		187
Limitations on Issuance of Bearer Debt Securities and Bearer Warrants		188
Taxation		189
Korean Taxation		189
United States Tax Considerations		192
Plan of Distribution		201
Legal Matters		202
Authorized Representatives in the United States		202
Official Statements and Documents		202
Experts		202
Forward-Looking Statements		203
Further Information		205

CERTAIN DEFINED TERMS AND CONVENTIONS

All references to the “Bank”, “we”, “our” or “us” mean The Export-Import Bank of Korea. All references to “Korea” or the “Republic” contained in this prospectus mean The Republic of Korea. All references to the “Government” mean the government of Korea.

Unless otherwise indicated, all references to “won”, “Won” or “W” contained in this prospectus are to the currency of Korea, references to “U.S. dollars”, “Dollars”, “USD”, “$” or “US$” are to the currency of the United States of America, references to “Canadian Dollar” or “CAD” are to the currency of Canada, references to “Euro”, “EUR” or “€” are to the currency of the European Union, references to “Japanese Yen”, “JPY” or “¥” are to the currency of Japan, references to “Chinese Yuan” or “CNY” are to the currency of the People’s Republic of China, references to “Swiss Franc” or “CHF” are to the currency of Switzerland, references to “British Pound” or “GBP” are to the currency of the United Kingdom, references to “Hong Kong Dollar” or “HKD” are to the currency of Hong Kong, S.A.R., references to “Singapore dollar” or “SGD” are to the currency of Singapore, references to “Brazilian Real” or “BRL” are to the currency of Federative Republic of Brazil, references to “Mexican Peso” or “MXN” are to the currency of the United Mexican States, references to “New Zealand Dollar” or “NZD” are to the currency of New Zealand, references to “Thai Baht” or “THB” are to the currency of Thailand, references to “Australian Dollar” or “AUD” are to the currency of Australia, references to “Indian Rupee” or “INR” are to the currency of India, references to “Indonesian Rupiah” or “IDR” are to the currency of Indonesia, references to “Swedish Krona” or “SEK” are to the currency of Sweden, references to “South African Rand” or “ZAR” are to the currency of South Africa, references to “Norwegian Krone” or “NOK” are to the currency of Norway, references to “Peruvian Sol” or “PEN” are to the currency of Peru, references to “Polish Zloty” or “PLN” are to the currency of Poland and references to “Czech Koruna” or “CZK” are to the currency of the Czech Republic.

In this prospectus, where information has been prepared in thousands, millions or billions of units, amounts may have been rounded up or down. Accordingly, actual numbers may differ from those contained herein due to rounding. All discrepancies in any table between totals and the sums of the amounts listed are due to rounding.

Our separate financial statements and information included in this prospectus were prepared under International Financial Reporting Standards as adopted by Korea (“Korean IFRS” or “K-IFRS”). References in this prospectus to “separate” financial statements and information are to financial statements and information prepared on a non-consolidated basis. Unless specified otherwise, our financial and other information included in this prospectus is presented on a separate basis in accordance with Korean IFRS and does not include such information with respect to our subsidiaries.

1

USE OF PROCEEDS

Unless otherwise specified in the applicable prospectus supplement, we will use the net proceeds from the sale of the securities for our general operations.

2

THE EXPORT-IMPORT BANK OF KOREA

Overview

We were established in 1976 as a special governmental financial institution pursuant to the Export-Import Bank of Korea Act, as amended, or the KEXIM Act. Since our establishment, we have been promoting the export and competitiveness of Korean goods and services in international markets. To this end, we have introduced financing facilities and implemented lending policies that are responsive to the needs of Korean exporters.

Our primary purpose, as stated in the KEXIM Act, is to “promote the sound development of the national economy and economic cooperation with foreign countries by extending the financial aid required for export and import transactions, overseas investment and the development of natural resources abroad.” Over the years, we have developed various financing facilities and lending policies that are consistent with the Government’s overall economic policies. In the latter part of the 1980s, as a result of changing trade conditions and the increased internationalization of the Korean economy, overseas investment credits and import credits were promoted and began to constitute an important portion of our business. In recent years, we have focused on the development of new financing facilities, including structured financing for ships and project financing for the construction of industrial plants and the development of natural resources abroad.

As of December 31, 2023, we hadW90,313 billion of outstanding loans, includingW35,933 billion of outstanding export credits,W36,284 billion of outstanding overseas investment credits andW11,342 billion of outstanding import credits, as compared toW91,725 billion of outstanding loans, includingW41,619 billion of outstanding export credits,W36,405 billion of outstanding overseas investment credits andW8,589 billion of outstanding import credits as of December 31, 2022.

Although our management has control of our day-to-day operations, our operations are subject to the close supervision of the Government. The Government’s determination each fiscal year regarding the amount of financial support to extend to us, in the form of contributions to capital or transfers of our income to reserves, plays an important role in determining our lending capacity. The Government has the power to appoint or dismiss our Chief Executive Officer, Deputy Chief Executive Officer, Senior Executive Director, Independent Directors and Auditor. Moreover, the Minister of Economy and Finance of the Republic has, on behalf of the Republic, signed the registration statement of which this prospectus forms a part.

The Government supports our operations pursuant to Article 37 of the KEXIM Act. Article 37 of the KEXIM Act provides that “the annual net losses of the Export-Import Bank of Korea shall be offset each year by the reserve, and if the reserve be insufficient, the Government shall provide funds to cover the deficit.” As a result of the KEXIM Act, the Government is generally responsible for our operations and is legally obligated to replenish any deficit that arises if our reserves, consisting of our surplus and capital surplus items, are insufficient to cover any of our annual net losses. In light of the above, if we have insufficient funds to make any payment under any of our obligations, including the debt securities covered by this prospectus, the Government would take appropriate steps, such as by making a capital contribution, by allocating funds or by taking other action, to enable us to make such payment when due. The provisions of Article 37 do not, however, constitute a direct guarantee by the Government of our obligations, and the provisions of the KEXIM Act, including Article 37, may be amended at any time by action of the National Assembly.

In January 2014, the Government amended the KEXIM Act to:

• increase our authorized capital fromW8,000 billion toW15,000 billion;

• expand our operation scope that enables us, among other things, to invest in (i) funds intended to support export and import transactions by small and medium-sized enterprises and (ii) special purpose companies that carry out value added overseas development projects in a flexible way; and

• reduce restrictions on our financing and investment activities by providing additional flexibility to us to cope with changes in market conditions.

3

In March 2016, the Government amended the KEXIM Act to strengthen its enforcement powers by allowing:

• the Minister of Economy and Finance to impose any necessary sanctions against our officers; and

• the Financial Services Commission to request the Minister of Economy and Finance to apply sanctions against our employees.

In March 2024, the Government amended the KEXIM Act to increase our authorized capital fromW15,000 billion toW25,000 billion in order to increase our financing of overseas large-scale projects in line with the Government’s policy objectives.

Capitalization

As of December 31, 2023, our authorized capital wasW15,000 billion and our capitalization was as follows:

	December 31, 2023(1)
	(billions of Won)
Long-Term Debt (2)(3)(4)(5)(6):
Borrowings in Korean Won	W	—
Borrowings in Foreign Currencies		1,867
Export-Import Financing Debentures		47,393
Total Long-Term Debt	W	49,260
Capital and Reserves:
Capital Stock(7)	W	14,773
Additional Paid-in-Capital		—
Capital Adjustments		(143	)
Retained Earnings		2,639
Legal Reserve(8)		540
Voluntary Reserve(8)		1,101
Regulatory Reserve for Loan Losses(9)		276
Unappropriated Retained Earnings		723
Other Components of Equity(10)		682
Total Capital and Reserve	W	17,951
Total Capitalization	W	67,211

(1) Except as described in this prospectus, there has been no material adverse change in our capitalization since December 31, 2023.

(2) Consists of borrowings and debentures with maturities of more than a year remaining.

(3) We have translated borrowings in foreign currencies as of December 31, 2023 into Won at the rate ofW1,289.40 to US$1.00, which was the market average exchange rate as announced by the Seoul Money Brokerage Services Ltd., on December 29, 2023.

(4) As of December 31, 2023, we had contingent liabilities totalingW54,579 billion, which consisted ofW43,061 billion under outstanding guarantees and acceptances andW11,518 billion under contingent guarantees and acceptances issued on behalf of our clients. For further information relating to our contingent liabilities under outstanding guarantees as of December 31, 2023, see “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the years ended December 31, 2023 and 2022—Note 36.”

(5) As of December 31, 2023, we had entered into 506 interest rate-related derivative contracts with a notional amount ofW73,694 billion and 844 currency-related derivative contracts with a notional amount ofW48,247 billion in accordance with our policy to hedge interest rate and currency risks. See “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the years ended December 31, 2023 and 2022—Note 20.”

(6) See “—Description of Assets and Liabilities—Sources of Funding” for an explanation of these sources of funds. All our borrowings, whether domestic or international, are unsecured and unguaranteed.

(7) As of December 31, 2023, our authorized ordinary share capital wasW15,000 billion and issued fully-paid capital stock wasW14,773 billion. See “—Business—Government Support and Supervision.”

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(8) See “—Business—Government Support and Supervision” for a description of the manner in which annual net income is transferred to the legal reserve and may be transferred to the voluntary reserve.

(9) If the estimated allowance for credit loss determined by K-IFRS for accounting purposes is lower than that for regulatory purposes as required by Regulation of Supervision of Banking Business, we reserve such difference as the regulatory reserve for loan losses. See “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the years ended December 31, 2023 and 2022—Note 23.”

(10) See “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the years ended December 31, 2023 and 2022—Note 22.”

Business

Purpose and Authority

We were established in 1976 as a special governmental financial institution pursuant to the KEXIM Act. The KEXIM Act, the Enforcement Decree of the KEXIM Act, or the KEXIM Decree, and our Articles of Incorporation, or the By-laws, define and regulate our powers and authority. We are treated as a special juridical entity under Korean law and are not subject to certain laws regulating the activities of commercial banks.

We were established, as stated in the KEXIM Act, to “promote the sound development of the national economy and economic cooperation with foreign countries by extending the financial aid required for export and import transactions, overseas investment and the development of natural resources abroad.” As an instrument in serving the Government’s public policy objectives, we do not seek to maximize our profits. We do, however, strive to maintain an adequate level of profitability to strengthen our equity base in order to support the growth in the volume of our business.

Our primary purpose has been the provision of loans and guarantees to facilitate Korean companies’ exports and overseas investments and projects. Most of our activities have been carried out pursuant to this authority.

We have the authority to undertake a range of financial activities. These fall into four principal categories:

• export credits;

• overseas investment credits;

• import credits; and

• guarantee facilities.

Export credits include loans to facilitate Korean exports of capital and non-capital goods and technical and non-technical services. Overseas investment credits consist of loans to finance Korean overseas investments and projects. Import credits include the extension of loans to finance Korean imports of essential materials and natural resources. Guarantee facilities are made available to support the obligations of Korean exporters and importers.

We also have the authority to administer, on behalf of the Government, the Government’s Economic Development Cooperation Fund, the Inter-Korean Cooperation Fund, formerly known as the South and North Korea Co-operation Fund, and the Supply Chain Resilience Fund.

We may also undertake other business activities incidental to the foregoing, including currency and interest rate swap transactions.

Government Support and Supervision

The Government’s determination each fiscal year, regarding the amount of financial support to extend to us, plays an important role in determining our lending capacity. Such support has included contributions to capital, loans and transfers of our income to reserves.

5

Our authorized capital wasW30 billion when the Government enacted the KEXIM Act in 1969. The National Assembly amended the KEXIM Act and increased our authorized capital toW150 billion in 1974,W500 billion in 1977,W1,000 billion in 1986,W2,000 billion in January 1998,W4,000 billion in September 1998,W8,000 billion in January 2009 andW15,000 billion in January 2014. In March 2024, the Government further increased our authorized capital toW25,000 billion.

As of December 31, 1996, the capital contribution from the Government was approximatelyW686 billion, all in cash. Since 1997, the Government has made capital contributions not only in cash but also in the form of shares of common stock of Government-affiliated entities. Recent examples include the Government’s contributions to our capital of (i) W26 billion,W30 billion,W578 billion,W110 billion,W29 billion,W160 billion andW25 billion in cash in May 2019, August 2019, July 2020, March 2021, April 2021, June 2021 and June 2022, respectively, and (ii) W125 billion in the form of shares of Yeosu Gwangyang Port Authority in May 2017,W125 billion in the form of shares of Incheon Port Authority in May 2017,W1,167 billion in the form of shares of Korea Aerospace Industries Ltd. in June 2017 andW2,000 billion in the form of shares of Korea Land and Housing Corporation in March 2023, in order to enhance our capacity to finance projects, including large-scale overseas development projects. Taking into account these capital contributions, our total capital stock wasW14,773 billion as of December 31, 2023. Most recently, in March 2024, the Government contributedW100 billion in cash to our capital in order to enhance our capacity to operate a special account established to help improve and support the development and financing of infrastructure projects in developing countries.

Pursuant to the KEXIM Act, only the Government, The Korea Development Bank, The Bank of Korea, certain designated domestic banking institutions, exporters’ associations and international financial organizations may contribute to our capital stock. As of December 31, 2023, the Government directly owned 73% of our capital stock and indirectly owned, through The Bank of Korea and The Korea Development Bank, 8% and 19%, respectively, of our capital stock. See “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the years ended December 31, 2023 and 2022—Note 1.”

In addition to contributions to our capital, the Government provides funding for our financing activities. The Government has made loans available to us for our lending activities. See “—Description of Assets and Liabilities—Sources of Funding.”

The Government also supports our operation pursuant to Articles 36 and 37 of the KEXIM Act. Article 36 of the KEXIM Act and the By-laws provide that we shall apply our net income earned during each fiscal year, after deduction of depreciation expense for such fiscal year, in the following manner and in order of priority:

• first, at least 10% of such net income is transferred to our legal reserve until the total amount of our legal reserve equals the total amount of our capital stock;

• second, if the Minister of Economy and Finance approves such distribution, the balance of any such net income, after such transfer to the legal reserve, is distributed to the institutions, other than the Government, that have contributed to our capital (up to a maximum 15% annual dividend rate); and

• third, the remaining balance of any such net income is distributed in whatever manner our Operations Committee determines and the Minister of Economy and Finance approves, such as additions to our voluntary reserve.

Article 37 of the KEXIM Act provides that “the annual net losses of the Export-Import Bank of Korea shall be offset each year by the reserve, and if the reserve be insufficient, the Government shall provide funds to cover the deficit.” As a result of the KEXIM Act, the Government is generally responsible for our operations and is legally obligated to replenish any deficit that arises if our reserves are insufficient to cover any of our annual net losses. In light of this provision, if we have insufficient funds to make any payment under any of our obligations, the Government would take appropriate steps by making a capital contribution, by allocating funds or by taking other action to enable us to make such payment when due. The provisions of Article 37 do not, however,

6

constitute a direct guarantee by the Government of our obligations, and the provisions of the KEXIM Act, including Article 37, may be amended at any time by action of the National Assembly.

The Government closely supervises our operations including in the following ways:

• the President of the Republic appoints our Chief Executive Officer upon the recommendation of the Minister of Economy and Finance;

• the Minister of Economy and Finance appoints our Deputy Chief Executive Officer and the Senior Executive Director upon the recommendation of our Chief Executive Officer;

• the Minister of Economy and Finance appoints our Auditor;

• one month prior to the beginning of each fiscal year, we must submit our proposed program of operations and budget for the fiscal year to the Minister of Economy and Finance for his approval and immediately after the approval of the Minister of Economy and Finance, we must report such program to the National Assembly;

• the Minister of Economy and Finance must approve our operating manual, which sets out guidelines for all principal operating matters, including the range of permitted financings;

• the Board of Audit and Inspection, a Government department, examines our settlement of accounts annually;

• each of the Minister of Economy and Finance and the Financial Services Commission has broad authority to require reports from us on any matter and to examine our books, records and other documents. On the basis of the reports and examinations, the Minister of Economy and Finance may issue any orders it deems necessary to enforce the KEXIM Act or delegate examinations to the Financial Services Commission;

• the Financial Services Commission may supervise our operations to ensure managerial soundness based upon the KEXIM Decree and the Supervisory Regulations of Banking Business legislated by the Financial Services Commission and may issue orders deemed necessary for such supervision;

• we must submit our annual report to the Ministry of Economy and Finance within three months following the end of each fiscal year and, upon request from the National Assembly during its annual audit period, to the National Assembly within ten days from the date of the request from the National Assembly, outlining our operations and analyzing our activities during the relevant fiscal year; and

• we may amend our By-laws and operating manual only with the approval of the Minister of Economy and Finance.

Selected Financial Statement Data

Except where expressly indicated otherwise in this prospectus, loans in Won and loans in foreign currencies (each before deducting allowance for loan losses) are collectively referred to as “Loans”; bills bought, foreign exchange bought, advances for customers, call loans and interbank loans in foreign currencies (each before deducting allowance for loan losses) are collectively referred to as “Other Loans”; Loans and Other Loans are collectively referred to as “Loan Credits”; confirmed guarantees and acceptances are collectively referred to as “Guarantees”; and Loan Credits and Guarantees are collectively referred to as “Credit Exposure.”

7

You should read the following selected financial statement data together with our separate financial statements and notes included in this prospectus.

	Year Ended December 31,
	2021		2022		2023
	(billions of Won)
Income Statement Data
Total Interest Income	W	1,746	W	3,071	W	5,856
Total Interest Expense		841		2,118		4,971
Net Interest Income		904		952		885
Operating Income		743		569		1,061
Income before Income Tax		746		571		1,061
Income Tax Expense		199		184		339
Net Income		548		387		723

	As of December 31,
	2022		2023
	(billions of Won)
Balance Sheet Data
Total Loan Credits(1)	W	91,725	W	90,313
Total Borrowings(2)		97,904		98,789
Total Assets		122,070		125,394
Total Liabilities		106,634		107,444
Total Shareholders’ Equity		15,436		17,951

(1) Gross amount, including domestic usance bills, foreign currency bills bought, advance payments on acceptances and guarantees, call loans, interbank loans in foreign currency, private placement corporate bonds in local currency and others and before deducting allowance for loan losses and net deferred loan origination fees and costs. See “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the years ended December 31, 2023 and 2022—Note 10.”

(2) Includes debentures.

2023

We had net income ofW723 billion in 2023 compared toW387 billion in 2022. The principal factors for the increase in net income included:

• a change in net gain (loss) on hedging derivative assets to a net gain ofW2,013 billion in 2023 from a net loss ofW3,224 billion in 2022, due to a decrease in losses on hedging instruments toW843 billion in 2023 fromW3,716 billion in 2022 and an increase in gains on hedging instruments toW2,856 billion in 2023 fromW492 billion in 2022, which in turn was primarily due to continued volatility in exchange rates (including USD and BRL) and interest rates (including the USD 3-Month London Interbank Offered Rate, the Secured Overnight Financing Rate and the Australia 3-Month Bank Bill Swap Rate) in 2023 (see “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the years ended December 31, 2023 and 2022—Note 27”); and

• a change in net gain (loss) on financial assets at fair value through profit or loss to a net gain ofW210 billion in 2023 from a net loss ofW306 billion in 2022, primarily due to a change in valuation of trading derivatives to a net gain ofW56 billion in 2023 from a net loss ofW764 billion in 2022, which in turn resulted mainly from changes in exchange rates (including MXN, USD and EUR) and interest rates (including MXN TIIE 28D) between 2022 and 2023 that impacted the valuation of our various interest rate swap and cross-currency swap derivative products in 2023 (see “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the years ended December 31, 2023 and 2022—Note 28”).

8

These factors were in large part offset by:

• a change in net other operating income (expenses) to net expenses ofW931 billion in 2023 from net income ofW3,173 billion in 2022, primarily due to change in net gain (loss) on fair value hedged items to a net loss ofW928 billion in 2023 from a net gain ofW3,165 billion in 2022 (see “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the years ended December 31, 2023 and 2022—Note 30”); and

• a change in net gain (loss) on foreign exchange transactions to a net loss ofW1,063 billion in 2023 from a net gain ofW515 billion in 2022, primarily due to increased volatility in exchange rates in 2023.

In addition, a 58.8% decrease in additional impairment loss on credit toW279 billion in 2023 fromW678 billion in 2022, mainly reflecting a general improvement in the overall asset quality of our loan portfolio in 2023, in particular with regard to our large refinery project in the Middle East, contributed to the increase in net income.

For a description of our strategies and policies on derivative products, which we utilize primarily to hedge our risks relating to fluctuations in various foreign currencies and interest rates, see “—Description of Assets and Liabilities—Derivatives.”

As of December 31, 2023, our total assets increased by 2.7% toW125,394 billion fromW122,070 billion as of December 31, 2022, primarily due to a 26.8% increase in cash and due from financial institutions toW12,591 billion as of December 31, 2023 fromW9,931 billion as of December 31, 2022 and a 15.3% increase in financial investments toW15,413 billion as of December 31, 2023 fromW13,364 billion as of December 31, 2022, the effects of which were offset in part by a 1.7% decrease in loans at amortized cost toW87,777 billion as of December 31, 2023 fromW89,300 billion as of December 31, 2022.

As of December 31, 2023, our total liabilities increased by 0.8% toW107,444 billion fromW106,634 billion as of December 31, 2022, primarily due to a 6.2% increase in debentures toW93,257 billion as of December 31, 2023 fromW87,792 billion as of December 31, 2022, the effect of which was largely offset by a 45.3% decrease in borrowings toW5,532 billion as of December 31, 2023 fromW10,113 billion as of December 31, 2022.

As of December 31, 2023, our total shareholders’ equity increased by 16.3% toW17,951 billion fromW15,436 billion as of December 31, 2022, primarily due to a 15.7% increase in capital stock toW14,773 billion as of December 31, 2023 fromW12,773 billion as of December 31, 2022 and a 28.7% increase in retained earnings toW2,639 billion as of December 31, 2023 fromW2,051 billion as of December 31, 2022.

2022

We had net income ofW387 billion in 2022 compared toW548 billion in 2021. The principal factors for the decrease in net income included:

• a 107.1% increase in net loss on hedging derivative assets toW3,224 billion in 2022 fromW1,556 billion in 2021, primarily due to an increase in losses on hedging instruments toW3,716 billion in 2022 fromW1,745 billion in 2021, resulting from increased volatility in exchange rates and interest rates in 2022;

• a change in net gain (loss) on financial assets at fair value through profit or loss to a net loss ofW306 billion in 2022 from a net gain ofW127 billion in 2021, primarily due to an increase in net loss on valuation of trading derivatives toW764 billion in 2022 fromW140 billion in 2021; and

• an 84.0% increase in additional impairment loss on credit toW678 billion in 2022 fromW368 billion in 2021, mainly reflecting a deterioration in the overall asset quality of our loan portfolio due to the general downturn of the economy in Korea and globally in 2022.

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These factors were in large part offset by a 166.4% increase in net other operating income toW3,173 billion in 2022 fromW1,191 billion in 2021, primarily due to an increase in net gain on fair value hedged items toW3,165 billion in 2022 fromW1,232 billion in 2021.

As of December 31, 2022, our total assets increased by 20.3% toW122,070 billion fromW101,452 billion as of December 31, 2021, primarily due to a 15.3% increase in loans at amortized cost toW89,300 billion as of December 31, 2022 fromW77,458 billion as of December 31, 2021, and to lesser extents, a 122.5% increase in cash and due from financial institutions toW9,931 billion as of December 31, 2022 fromW4,463 billion as of December 31, 2021 and a 60.6% increase in financial assets at fair value through profit or loss toW4,173 billion as of December 31, 2022 fromW2,598 billion as of December 31, 2021.

As of December 31, 2022, our total liabilities increased by 23.9% toW106,634 billion fromW86,099 billion as of December 31, 2021, primarily due to a 14.8% increase in debentures toW87,792 billion as of December 31, 2022 fromW76,486 billion as of December 31, 2021 and an 81.3% increase in borrowings toW10,113 billion as of December 31, 2022 fromW5,577 billion as of December 31, 2021, which increases were mainly attributable to our preemptive measures to obtain financing in light of adverse global market conditions and an increase in demand for funding from our borrowers.

As of December 31, 2022, our total shareholders’ equity increased by 0.5% toW15,436 billion fromW15,353 billion as of December 31, 2021, primarily due to a 10.5% increase in retained earnings toW2,051 billion as of December 31, 2022 fromW1,856 billion as of December 31, 2021 and a 0.2% increase in capital stock toW12,773 billion as of December 31, 2022 fromW12,748 billion as of December 31, 2021, the effects of which were offset in part by a change in gains (losses) on debt securities at fair value through other comprehensive income to a loss ofW214 billion as of December 31, 2022 from a gain ofW18 billion as of December 31, 2021.

Operations

Loan Operations

Our primary objective since our establishment has been to promote the export and competitiveness of Korean goods and services in international markets. To this end, we have introduced various financing facilities and implemented lending policies that are responsive to the needs of Korean exporters and foreign importers. Over the years, we have also developed financing facilities and lending policies that are consistent with the Government’s overall economic policies. In the latter part of the 1980s, as a result of changing trade conditions and the increased internationalization of the Korean economy, overseas investment credits and import credits were promoted and began to constitute an important portion of our business. Our lending programs include (1) export credits to Korean exporters or foreign buyers of Korean goods and services, (2) overseas investment credits to Korean firms and (3) import credits to Korean importers.

Before approving a credit, we consider:

• economic benefits to the Republic;

• the industry’s rank in the order of priorities established by the Government’s export-import policy;

• credit risk associated with the loans to be extended; and

• the goal of diversifying our lending activities.

The KEXIM Act and the By-laws provide that we may extend credit only where repayment “is considered probable.” Accordingly, we carefully investigate the financial position of each prospective borrower and the technical and financial aspects of the project to be financed, and a loan is made only if we believe there is reasonable assurance of repayment. See “—Credit Policies, Credit Approval and Risk Management—Credit Approval.”

In 2023, we provided Loans ofW60,848 billion, an increase of 3% from the previous year, and our commitments of Loans amounted toW61,137 billion, a decrease of 6% from the previous year. The increase in disbursements of

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Loans was primarily attributable to increased demand from the shipbuilding industry and the decrease in commitments for Loans was primarily attributable to decreased demand from the industrial plants industry within the overseas investment credits category.

The following table sets out the total amounts of our outstanding Loan Credits, categorized by type of credit:

	As of December 31,				As % of 2023 Total
	2022		2023
	(billions of Won)
Export Credits
Industrial Plants	W	12,080	W	8,742		10	%
Shipbuilding		6,964		7,020		8	%
Ferrous & nonferrous metal products		2,753		1,642		2	%
Petrochemical products		4,002		3,615		4	%
Automobiles		3,116		2,632		3	%
Electronic machineries		3,864		3,903		4	%
Others(1)		8,839		8,379		9	%
Sub-total		41,619		35,933		40	%
Overseas Investment Credits		36,405		36,284		40	%
Import Credits		8,589		11,342		13	%
Others(2)		5,106		6,749		7	%
Present Value Premium/Discount		6		5		0	%
Total Loan Credits	W	91,725	W	90,313		100	%

(1) Includes general machinery, service sector, etc.

(2) Includes call loans, loans for Inter-bank loans in foreign currency, advances for customers, etc.

Source: Internal accounting records

The following table sets out our new loan commitments, categorized by type of credit:

New Loan Credit Commitments by Type of Credit

	As of December 31,				As % of 2023 Total
	2022		2023
	(billions of Won)
Export Credits
Industrial Plants	W	1,114	W	2,848		5	%
Shipbuilding		4,776		5,112		8	%
Ferrous & nonferrous metal products		2,028		2,471		4	%
Petrochemical products		4,822		4,972		8	%
Automobiles		3,134		2,898		5	%
Electronic machineries		4,024		5,200		9	%
Others(1)		11,850		13,173		22	%
Sub-total		31,749		36,674		60	%
Overseas Investment Credits		22,715		12,510		20	%
Import Credits		10,705		11,953		20	%
Others		0		0		0	%
Total	W	65,169	W	61,137		100	%

(1) Includes general machinery, service sector, etc.

Source: Internal accounting records

Export Credits

We offer export credits to either domestic suppliers or foreign buyers to finance export transactions.

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Export Credits to domestic suppliers include:

• export loans to Korean exporters that export capital goods such as ships, industrial plants and machinery;

• pre-shipment credit to Korean exporters or manufacturers producing export products;

• technical service credit to Korean companies that export technical services abroad, including overseas construction projects;

• short-term trade financing to Korean exporters that manufacture export goods under short-term export contracts;

• small business export credit to small and medium-sized enterprises that manufacture export goods or supply materials needed by their primary exporters;

• rediscount on trade bills to domestic commercial banks for exporters;

• forfaiting to Korean exporters by discounting trade bills under the usance line of credit from export transactions on a non-recourse basis; and

• export factoring to Korean exporters by discounting trade receivables that occurs from open account export transactions on credit on a non-recourse basis.

Export credits to foreign buyers include:

• direct loans to foreign buyers that purchase Korean goods and services;

• project finance to foreign companies that intend to import industrial plants, facilities and technical services from Korea for large-scale projects, of which the cash flows from such projects are the main source for repayment;

• structured finance to foreign shipping companies that purchase ships from Korean shipyards, of which the repayment usually depends on the cash flows generated by the operation of ships; and

• interbank export loans to creditworthy banks in foreign countries to help foreign buyers obtain credit for the purchase of goods and services of Korean origin.

As of December 31, 2023, export credits in the amount ofW35,933 billion represented 40% of our total outstanding Loan Credits. Our disbursements of export credits in 2023 amounted toW33,562 billion, an increase of 6% from the previous year, and our new commitments of export credits in 2023 amounted toW36,674 billion, an increase of 16% from the previous year.

We offer export credits to Korean companies in order to provide them with the funds required for the manufacture or construction of capital and non-capital goods and readying of technical services designated in our operating manual for export. Capital goods eligible for export credit financings currently include ships, industrial plants, industrial machinery and overseas construction projects. With respect to eligible items supported by our export credits, ships as well as industrial plants have traditionally had some of the largest shares of our export credit operations.

We offer export loans and technical service credits to domestic suppliers at fixed (no less than the Commercial Interest Reference Rate under the OECD Arrangement (as defined below)) or floating rates of interest with maturities of up to 12 years for ships and maturities of varying terms, from two to 22 years, for financings of other eligible items. We typically require a minimum down payment of 20% of the contract amount for ship export financings and a minimum down payment of 15% for financings of other eligible items. When the credit rating of a prospective borrower does not meet our internal rating criteria, these export credits are secured by promissory notes issued in connection with the relevant transaction, or letters of guarantees or letters of credit issued or confirmed by a creditworthy international bank or the importer’s government or central bank. Other

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terms and conditions under such export credit facilities must be in accordance with the Arrangement on Guidelines for Officially Supported Export Credits by the Organization for Economic Cooperation and Development, or the OECD Arrangement. We offer direct loans to foreign buyers, project finance to project companies and structured finance for ships to foreign shipping companies under similar terms and conditions as export credit financings to domestic suppliers. We offer interbank export loans to overseas banks to facilitate imports by foreign importers of Korean manufactured goods. Interbank export loans are offered at fixed or floating rates of interest with maturities of up to ten years.

Overseas Investment Credits

We extend overseas investment credits to either Korean companies or foreign companies in which a Korean company has an equity share, to finance investments in eligible overseas businesses and projects. Such financing programs include:

• overseas investment credit to Korean companies that invest abroad in the form of capital subscription, acquisition of stocks and long-term credit;

• overseas project credit to Korean companies or their overseas subsidiaries engaging in businesses outside Korea;

• major resources development credit to Korean companies for development of natural resources and acquisition of mining rights abroad; and

• overseas business credit to foreign companies in which Korean companies have an equity stake, in the form of funds for purchasing equipment or working capital.

As of December 31, 2023, overseas investment credits amounted toW36,284 billion, representing 40% of our total outstanding Loan Credits. Our disbursements of overseas investment credits in 2023 amounted toW13,528 billion, a decrease of 16% from the previous year, and our new commitments of overseas investment credits in 2023 amounted toW12,510 billion, a decrease of 45% from the previous year.

Proposals for overseas investment credits to finance the acquisition of important materials or the development of natural resources for the Korean economy, as determined by the Government, are given priority, together with projects that promote the export of Korean goods and services. As a result, projects financed by our overseas investment credit program have been mainly in the fields of manufacturing or development of natural resources.

We offer overseas investment credits at either fixed or floating rates of interest with maturities up to 30 years. Such facilities may require security in the form of a bank guarantee, pledge or mortgage on the borrower’s local assets. Depending upon the size of the borrower, we will provide up to 100% of the financing required for the overseas investment project.

Import Credits

We offer import credits to Korean companies that directly import essential materials, natural resources and high-technology materials whose stable and timely supply is required for the growth of the national economy, maintenance of financial stability and quality of life, and promotion of exports and employment, or to Korean companies that import such items after developing them overseas.

As of December 31, 2023, import credits in the amount ofW11,342 billion represented 13% of our total outstanding Loan Credits. Our disbursements of import credits in 2023 amounted toW13,758 billion, an increase of 23% from the previous year, and our new commitments of import credits in 2023 amounted toW11,953 billion, an increase of 12% from the previous year.

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We offer import credits at either fixed or floating rates of interest with maturities up to ten years for equipment and machinery and shorter maturities of up to two years for other items, which may require security in the form of a bank guarantee, pledge or mortgage on the borrower’s local assets. We generally provide up to 80% of the import contract amount, but provide up to 90% of the import contract amount in the case of small and medium-sized enterprises and up to 100% for transactions with a letter of credit opened by a bank.

Guarantee Operations

We provide guarantees in favor of Korean commercial banks and foreign banks or foreign importers in respect of the obligations of Korean exporters in order to facilitate export and import financings. Such guarantee programs for Korean exporters and importers include (1) financial guarantees to co-financing banks that provide loans for transactions that satisfy our eligibility requirements and (2) project-related guarantees to foreign importers for the performance of Korean exporters on eligible projects in the form of bid bonds, advance payment bonds, performance bonds and retention bonds. Guarantee commitments as of December 31, 2023 increased toW54,579 billion fromW53,388 billion as of December 31, 2022. Guarantees we had confirmed as of December 31, 2023 increased toW43,061 billion fromW39,373 billion as of December 31, 2022.

We mainly issue project-related guarantees, which include:

• advance payment guarantees that are issued to overseas importers of Korean goods and services to support obligations to refund down payments made to Korean exporters in the event of a failure to deliver the goods to be exported; and

• performance guarantees that are issued to foreign importers to support the performance by Korean exporters of their contractual obligations.

In 2023, we issued project-related confirmed guarantees in the amount ofW9,182 billion, a decrease of 23% from the previous year, which was primarily attributable to a decrease in demand from the industrial plants and others categories.

We also issue letters of credit to foreign exporters to assist in the financing of projects approved in connection with import credit loans, and to Korean exporters to assist in the financing of projects approved in connection with export credit loans.

For further information regarding our guarantee and letter of credit operations, see “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the years ended December 31, 2023 and 2022—Note 36.”

Government Account Operations

Economic Development Cooperation Fund

In 1987, the Government established the Economic Development Cooperation Fund, or the EDCF, to provide loans, at concessional interest rates, to governments or agencies of developing countries for projects that contribute to industrial development or economic stabilization of such countries. We administer the EDCF on behalf of the Government and are responsible for project appraisal, documentation and administrative work relating to the EDCF Loans. The EDCF business accounts are maintained separately from our own account on behalf of the Government, and we derive no separate income or expenditures from our operation of the EDCF business. Government contributions constitute the primary funding source of the EDCF. Loan disbursements by the EDCF in 2023 amounted toW1,396 billion for 126 projects in 34 countries, an increase of 15% from the previous year. As of December 31, 2023, the total outstanding loans extended by the EDCF wasW11,806 billion, an increase of 9% from the previous year.

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Inter-Korean Cooperation Fund

In 1991, the Government established the Inter-Korean Cooperation Fund, or the IKCF, to promote mutual exchanges and cooperation between the Republic and North Korea by engaging in funding and financing activities to support family reunions, cultural events, academic seminars, trade and economic cooperation between the two countries. We administer the IKCF under the initiative and policy coordination of the Ministry of Unification. The IKCF accounts are maintained separately from our own account on behalf of the Government. Government contributions are the major funding source of the IKCF. The IKCF disbursements during 2023 amounted toW22 billion for 22 projects, and the cumulative total disbursements as of December 31, 2023 wereW7,208 billion, an increase of 0.3% fromW7,185 billion as of December 31, 2022.

Supply Chain Resilience Fund

In December 2023, the National Assembly passed the Framework Act on Supply Chain Stabilization Support for Economic Security, or the Supply Chain Stabilization Act, in order to establish effective and systematic measures against various supply chain-related risks, in light of prolonged disruptions to the global supply chain that have had a negative impact on the Korean economy in recent years. Some of these measures include a cross-governmental response system that would get promptly activated in case of emergencies resulting from supply chain disruptions and various ways to proactively enhance the stability of global supply chains, for example, by supporting Korean companies through the Supply Chain Resilience Fund, or the SCRF.

The Supply Chain Stabilization Act, which is scheduled to become effective in June 2024, mandates that we administer and operate the SCRF whose funds will be used primarily to achieve the main objectives of the Supply Chain Stabilization Act, including measures that can contribute to achieving economic stability, such as securing essential materials, natural resources and high-technology materials required for the national economy, supporting investments in facilities and development of technologies, and providing support for businesses adversely affected by supply chain disruptions.

We plan to administer and operate the SCRF in accordance with the Supply Chain Stabilization Act and under the guidance, as to basic policies, of the Supply Chain Committee to be composed of government officials and industry experts, and headed by the Deputy Prime Minister and Minister of Economy and Finance of the Republic. The SCRF account, which will be maintained separately from our own account, will be funded mainly through our issuances of Won-denominated and foreign currency-denominated notes to be guaranteed by the Government. In February 2024, the National Assembly approved a Government guarantee up toW5 trillion of SCRF notes to be issued in 2024, and relevant amendments to the KEXIM Act are expected to be made at the end of June 2024.

Other Operations

We engage in various other activities related to our financing activities.

Activities in which we currently engage include:

• country information services performed by the Overseas Economic Research Institute, which conducts country studies and country risk evaluation to assist in the efficient utilization of our financial resources;

• export credit advisory services, which are aimed at bringing about a larger share of overseas bidding by giving Korean exporters a wide range of knowledge on the country, industry, market and financial situation of the importing country in the early stage of the tendering process or contract negotiations;

• consulting services by in-house professionals including lawyers, accountants and regional experts who consult on international transactions; and

• management of Korea’s foreign direct investment database.

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Description of Assets and Liabilities

Total Credit Exposure

We extend credits to support export and import transactions, overseas investment projects and other relevant products in various forms including loans and guarantees.

The following table sets out our Credit Exposure as of December 31, 2022 and 2023, categorized by type of exposure extended:

		As of December 31,
		2022					2023
		(billions of Won, except for percentages)
A	Loans in Won	W	28,690		22	%	W	27,872		21	%
B	Loans in Foreign Currencies		56,744		44	%		54,350		41	%
C	Loans (A+B)		85,434		66	%		82,222		63	%
D	Other Loans		6,290		5	%		8,092		6	%
E	Loan Credits (C+D)		91,725		71	%		90,313		69	%
F	Allowances for Loan Losses		(2,013	)	(2	)%		(2,051	)	(2	)%
G	Loan Credits including allowance for loan losses (E-F)		89,712		69	%		88,262		67	%
H	Guarantees		39,373		31	%		43,061		33	%
I	Credit Exposure (G+H)		129,085		100	%		131,323		100	%

Loan Credits by Geographic Area

The following table sets out the total amount of our outstanding Loan Credits as of December 31, 2022 and 2023, categorized by geographic area ⁽¹⁾:

	As of December 31,(1)				As % of 2023 Total
	2022		2023
	(billions of Won)
Asia(2)	W	72,452	W	79,827		88	%
Europe		10,281		6,163		7	%
America		7,400		3,260		4	%
Africa		1,591		1,063		1	%
Total	W	91,725	W	90,313		100	%

(1) For purposes of this table, export credits have been allocated to the geographic areas in which the foreign buyers of Korean exports are located; overseas investment credits have been allocated to the geographic areas in which the overseas investments being financed are located; and import credits have been allocated to the geographic areas in which the sellers of the imported goods are located.

(2) Includes Australia and the Middle East.

Source: Internal accounting records

Economic Sanctions

The U.S. government, including the U.S. Department of the Treasury’s Office of Foreign Assets Control, or OFAC, administers and enforces certain laws and regulations, or U.S. primary sanctions, that prohibit or restrict dealings with or related to certain designated countries and territories, governments, entities and individuals, and entities majority-owned by such parties, that take place within U.S. jurisdiction. U.S. primary sanctions include territorial sanctions that broadly prohibit transactions or dealings with or in designated countries and jurisdictions (currently, Cuba, Iran, North Korea, Syria, the Crimea region of Ukraine, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic); blocking sanctions that generally prohibit transactions or dealings with or involving blocked persons or the property or interests in property of a blocked person; and non-blocking sanctions that prohibit or restrict specific kinds of transactions or dealings, including, for example,

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dealings in debt or equity issued by certain designated parties. For example, Iran currently is and has been subject to U.S. territorial sanctions. In addition, as a result of the ongoing conflict involving Ukraine, the United States, along with the European Union, the United Kingdom, Korea, Singapore and other major jurisdictions, has adopted new, additional and/or enhanced sanctions on Russia. Although U.S. primary sanctions generally are not applicable to non-U.S. persons (although certain U.S. primary sanctions programs do apply to the non-U.S. subsidiaries of U.S. companies), non-U.S. persons can be held liable for violations of U.S. primary sanctions to the extent they participate in prohibited transactions or dealings within U.S. jurisdiction (including, for example, transactions or dealings involving U.S. goods or services, U.S. persons, or U.S. dollar payments). Violations of U.S. primary sanctions can result in substantial civil or, in the case of willful violations, criminal penalties.

In addition to U.S. primary sanctions, the United States maintains so-called “secondary sanctions” that authorize the U.S. government to impose a variety of sanctions, including blocking sanctions, on non-U.S. parties that engage in targeted activities, including, for example, certain dealings relating to Iran and Russia or blocked persons, outside of U.S. jurisdiction. The imposition of U.S. secondary sanctions is not automatic, and instead requires specific action by the U.S. government. In practice, U.S. secondary sanctions are highly discretionary and may be strongly influenced by political considerations, and accordingly, are difficult to predict. Our business and reputation could be adversely affected, for example, if the U.S. government were to determine that our activities, or the activities of any of our counterparties, involve sanctionable activity under U.S. secondary sanctions.

In addition, the European Union, the United Kingdom, Korea, Singapore and other major jurisdictions administer and enforce their own sanctions programs that target certain countries and territories, governments, entities and individuals in varying respects that we or certain of our dealings may be subject to.

Furthermore, we are aware, through press reports and other means, of initiatives by certain governmental entities and institutions in the United States, such as universities and pension funds, to adopt laws, regulations or policies prohibiting transactions with or investment in, or requiring divestment from, entities doing business with or related to certain countries, including Iran. For the reasons discussed below, it is possible that such initiatives may result in our being unable to gain or retain entities subject to such prohibitions as customers or as investors in our debt securities. In addition, our reputation may suffer due to our association with Iran and Russia. Such a result could have significant adverse effects on our business or the price of our debt securities.

We currently have no active dealings related to Iran and did not have any loans outstanding to Iran as of December 31, 2021, 2022 and 2023. Our business previously included activities related to Iran consisting solely of the extension of credit and financing provided in connection with the export of Korean goods and services to Iran and the disbursement of Iran-related credits directly to Korean suppliers or exporters. These transactions did not involve any U.S. jurisdictional nexus, and such transactions were subject to policies and procedures designed to ensure compliance with applicable Korean laws and regulations, including sanctions.

We engage in limited business related to Russia, including dealings with the government of the Russian Federation under a legacy loan arrangement, the extension of credit to two Russian financial institutions that have been designated for U.S. (but not Singaporean) blocking sanctions and three guarantee arrangements involving three Russian companies that are currently subject to U.S. (but not Singaporean) sanctions.

As of December 31, 2023, the government of the Russian Federation owed us approximately US$32 million pursuant to a legacy loan arrangement resulting from a commodity loan we extended to Vnesheconombank, formerly the Bank for Foreign Economic Affairs of the Soviet Union and now the Russian Federation state development corporation, in the early 1990s. The loan was initially guaranteed by the government of the Soviet Union; the guarantee was subsequently assumed by the government of the Russian Federation. Our dealings under the loan arrangement are formally with the Ministry of Finance of the Russian Federation, which has been designated for various sanctions, including U.S. sanctions. As of December 31, 2023, the government of the Russian Federation has paid back approximately 89.3% of the loan. The loan is classified as precautionary in terms of asset quality (based on previous repayment activity and our internal credit rating system). The

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provisioning level we established for the credit exposure as of December 31, 2023 was 12.2%. Dealings with the government of the Russian Federation under the loan arrangement have historically included payments in U.S. dollars involving U.S. financial institutions. In February 2022, we paused all dealings (including any payments under the loan arrangement) with the government of the Russian Federation. In December 2022, we accepted a one-time payment of US$10 million from the government of the Russian Federation under the loan arrangement that was specifically authorized by OFAC. Besides that one-time payment, our dealings with the government of the Russian Federation remain paused. We are continuing to evaluate the loan arrangement, including compliance with applicable sanctions.

Our arrangements with two Russian financial institutions, which involve the extension of credit and have historically included dealings in U.S. dollars involving U.S. financial institutions, were all in place prior to February 2022. As of December 31, 2023, the two Russian financial institutions owed us approximately US$200 million. The provisioning level we established for that credit exposure as of December 31, 2023 was 99.9%. In 2022, we paused all dealings with the Russian financial institutions, and such dealings remain paused, meaning we have not engaged in any additional dealings (including any payments under the credit arrangements) with the Russian financial institutions since June 2022 and we are currently unable to accept any payments from the Russian financial institutions under the credit arrangements. We are continuing to evaluate these credit arrangements, including compliance with applicable sanctions.

We entered into a guarantee arrangement in 2020 that involves a Russian company that became subject to U.S. blocking sanctions in 2023. To date, we have made no payments to the Russian company under the guarantee arrangement. Our maximum liability under the guarantee arrangement, which will expire in 2025, is less than EUR 2 million.

Similarly, we have two legacy guarantee arrangements from 2020 and 2022 with non-sanctioned Japanese and Korean companies that involve Russian companies that subsequently became subject to U.S. blocking sanctions. Our maximum liability under each guarantee arrangement is approximately US$350 million and US$421 million, respectively. To date, we have made no payments to the Russian companies under either of the guarantee arrangements, and all transactions have been paused with respect to these agreements since the designation of the relevant Russian companies. We are continuing to evaluate the above guarantee arrangements, including compliance with applicable sanctions.

We believe that the above dealings have been conducted at all times in full compliance with applicable sanctions. We do not have any other dealings with the government of the Russian Federation, any Russian Federation government stated-owned entities, or any other sanctioned Russian parties.

Individual Exposure

The KEXIM Decree imposes limits on our aggregate credits extended to a single person or business group, with which requirements we are in compliance as of the date hereof. However, our large exposure to various business groups in Korea means that we are also exposed to financial difficulties experienced by our borrowers as a result of, among other things, adverse economic conditions in Korea and globally. For example, the impact of the COVID-19 pandemic on the Korean economy, the invasion of Ukraine by Russia and ensuing actions taken by the United States and other countries, increases in policy interest rates globally (including Korea) to combat rising inflationary pressures, and more recently, the escalation of hostilities in the Middle East following the Israel-Hamas war, have had, and may continue to have, an adverse impact on the business, activities and operations of many of our borrowers, including large business groups, which in turn could have an adverse impact on the ability of our borrowers to meet existing payment or other obligations to us. See “The Republic of Korea—The Economy—Worldwide Economic and Financial Difficulties.” A continued deterioration in the financial condition of our borrowers could result in a deterioration in the quality of our loan portfolio, which in turn could result in an increase in delinquency ratios, increased charge-offs and higher provisioning, as well as an increase in impairment losses on such loans, which could have a material adverse impact on our business, financial condition or results of operations.

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As of December 31, 2023, our largest Credit Exposure was to Hanwha Ocean Co., Ltd. (formerly Daewoo Shipbuilding & Marine Engineering Co., Ltd., or DSME) in the amount ofW5,401 billion. As of December 31, 2023, our second largest and third largest Credit Exposures, respectively, were to HD Hyundai Heavy Industries Co., Ltd. in the amount ofW4,388 billion and to Samsung Heavy Industries Co., Ltd. in the amount ofW4,122 billion.

The following table sets out our five largest Credit Exposures as of December 31, 2023⁽¹⁾:

Rank	Name of Borrower	Loan Credits		Guarantees		Total
		(billions of Won)
1	Hanwha Ocean Co., Ltd.	W	584	W	4,817	W	5,401
2	HD Hyundai Heavy Industries Co., Ltd.		110		4,278		4,388
3	Samsung Heavy Industries Co., Ltd.		1,139		2,983		4,122
4	Hanwha Aerospace Co., Ltd.		502		1,639		2,141
5	SK hynix Inc.		1,914		0		1,914

(1) Excludes loans and guarantees extended to affiliates.

Source: Internal accounting records.

In recent years, DSME (now Hanwha Ocean Co., Ltd.), one of the largest shipbuilding and offshore construction companies in Korea, suffered from financial difficulties primarily due to significant losses incurred in connection with the construction of offshore plants resulting from a prolonged slowdown in the global shipbuilding industry. In October 2015, we announced that we, along with The Korea Development Bank, plan to provide financial support to DSME, including provision of liquidity support of up toW4.2 trillion. In December 2016, in a bid to improve DSME’s capital structure, we exchanged a term loan in the amount ofW1 trillion provided by us to DSME for perpetual bonds newly issued by DSME, while The Korea Development Bank engaged in debt-for-equity swaps amounting toW1.8 trillion. In March 2017, we and The Korea Development Bank announced a second joint plan to provide an additionalW2.9 trillion in financial support to DSME, which was approved by the other creditors in April 2017. Based on such plan, we exchanged a term loan in the amount ofW1.28 trillion provided by us to DSME for perpetual bonds issued by DSME and The Korea Development Bank provided additional debt-to-equity swaps ofW0.3 trillion in June 2017. Other creditors also provided debt-to-equity swaps for up to 80% of their debt with DSME and rescheduled the maturities of the remainder. Subsequently, in March 2019, HHI entered into a definitive agreement with The Korea Development Bank to acquire DSME. In January 2022, however, the European Commission announced that it would not grant approval for such acquisition due to anti-competition concerns for LNG carriers. In December 2022, Hanwha Group entered into a definitive agreement with The Korea Development Bank to acquire a 49.3% equity stake in DSME for approximately W2 trillion, which has since received regulatory approval from all relevant jurisdictions. The acquisition closed in May 2023, upon which DSME became an affiliate of Hanwha Group and changed its name to Hanwha Ocean Co., Ltd.

Asset Quality

The Supervisory Regulation of Banking Business, or the Supervisory Regulation, legislated by the Financial Services Commission requires banks, including us, to analyze and classify their credits into one of five categories as normal, precautionary, substandard, doubtful or estimated loss by taking into account borrowers’ repayment capacity as well as a number of other factors including the financial position, profitability, transaction history of the relevant borrower and the value of any collateral or guarantee taken as security for the extension of credit. Categorizations are applied to all loans except call loans and interbank loans, which are classified as normal. Credit categorizations are as follows:

Normal Credits extended to customers which, in consideration of their business and operations, financial conditions and future cash flows, do not raise concerns regarding their ability to repay the credits.

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Precautionary	Credits extended to customers (1) which, in consideration of their business and operations, financial conditions and future cash flows, are judged to have potential risks with respect to their ability to repay the credits in the future, although there have not occurred any immediate risks of default in repayment; or (2) which are in arrears for one month or more but less than three months.
Substandard	(1) Credits extended to customers, which in consideration of their business and operations, financial conditions and future cash flows, are judged to have incurred considerable risks for default in repayment as the customers’ ability to repay has deteriorated; or (2) that portion which is expected to be collected of total credits (a) extended to customers which have been in arrears for three months or more, (b) extended to customers which are judged to have incurred serious risks due to the occurrence of final refusal to pay their promissory notes, liquidation or bankruptcy proceedings, or closure of their businesses or (c) of “Doubtful Customers” or “Estimated-loss Customers” (each as defined below).
Doubtful	That portion of credits in excess of the amount expected to be collected of total credits extended to (1) customers, or Doubtful Customers, which, in consideration of their business and operations, financial conditions and future cash flows, are judged to have incurred serious risks of default in repayment due to noticeable deterioration in their ability to repay; or (2) customers which have been in arrears for three months or more but less than twelve months.
Estimated Loss	That portion of credits in excess of the amount expected to be collected of total credits extended to (1) customers, or Estimated-loss Customers, which, in consideration of their business and operations, financial conditions and future cash flows, are judged to have to be accounted as a loss as the inability to repay became certain due to serious deterioration in their ability to repay; (2) customers which have been in arrears for twelve months or more; or (3) customers which are judged to have incurred serious risks of default in repayment due to the occurrence of final refusal to pay their promissory notes, liquidation or bankruptcy proceedings, or closure of their businesses.

Under K-IFRS, we establish provisions for credit losses with respect to loans using either a case-by-case or collective approach. We assess individually significant loans on a case-by-case basis and other loans on a collective basis. In addition, if we determine that no objective evidence of impairment exists for a loan, we include such loan in a group of loans with similar credit risk characteristics and assess them collectively for impairment regardless of whether such loan is significant. If there is objective evidence that an impairment loss has been incurred for individually significant loans, the amount of the loss is measured as the difference between the financial asset’s carrying amount and the present value of the estimated future cash flows discounted at such asset’s original effective interest rate. Future cash flows are estimated through a case-by-case analysis of individually assessed assets, which takes into account the benefit of any guarantee or other collateral held. The value and timing of future cash flow receipts are based on available estimates in conjunction with facts available at the time of review and reassessed on a periodic basis as new information becomes available. For collectively assessed loans, we base the level of provisions for credit losses on a portfolio basis in light of the homogenous nature of the assets included in each portfolio. The provisions are determined based on a quantitative review of the relevant portfolio, taking into account such factors as the level of arrears, the value of any security, and historical and projected cash recovery trends over the recovery period. For more detailed information regarding our loan loss provisioning policy, see “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the years ended December 31, 2023 and 2022—Note 3(7).”

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Asset Classifications

The following table provides information on our loan loss reserves:

	As of December 31, 2022				As of December 31, 2023
	Loan Amount(1)		Loan Loss Reserve(2)(3)		Loan Amount(1)		Loan Loss Reserve(2)(3)
	(billions of Won)
Normal	W	159,106	W	808	W	180,006	W	2,463
Precautionary		11,754		1,448		886		291
Sub-standard		516		349		1,138		773
Doubtful		848		726		13		13
Estimated Loss		123		100		230		213
Total	W	172,347	W	3,432	W	182,274	W	3,753

(1) These figures include loans (excluding interbank loans and call loans), domestic usance bills, bills bought, notes bought, advances for customers, confirmed and unconfirmed acceptances and guarantees and unused loan commitments, among others.

(2) Consists of (i) allowance for loan losses, (ii) provisions for confirmed and unconfirmed acceptances and guarantees and (iii) certain financial guarantee contract liabilities.

(3) These figures include present value discount.

Reserves for Credit Losses

Non-performing assets, or NPAs, are defined as assets that are classified as substandard or below.

The following table sets out our 10 largest non-performing assets as of December 31, 2023:

Borrower	Loans		Guarantees		Total
	(billions of Won)
YEMEN LNG COMPANY LTD.	W	270	W	0	W	270
DAE SUN SHIPBUILDING & ENGINEERING CO., LTD.		172		70		242
ACWA GUC ELEKTRIK ISLETME VE YONETIM SANAYI VE TICARET ANONIM SIRKETI		119		40		159
PJSC SOVCOMBANK		129		0		129
CREDIT BANK OF MOSCOW		128		0		128
DYNATEC MADAGASCAR S.A.		0		95		95
TAEYOUNG ENGINEERING & CONSTRUCTION CO.,LTD.		0		91		91
HYUNJIN MATERIALS CO., LTD.		15		0		15
LEEYOUNG INDUSTRIAL MACHINERY CO., LTD.		11		0		11
CAPRO CORPORATION		10		0		10
Total	W	854	W	296	W	1,150

We cannot provide any assurance that our current level of exposure to non-performing assets will continue in the future or that any of our borrowers (including our largest borrowers as described above) is not currently facing, or in the future will not face, material financial difficulties.

As of December 31, 2023, the amount of our non-performing assets wasW1,381 billion, a decrease of 7% fromW1,487 billion as of December 31, 2022. As of December 31, 2023, our non-performing asset ratio was 0.8%, compared to 0.9% as of December 31, 2022.

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The following table sets forth our reserves for possible credit losses as of December 31, 2022 and 2023:

	As of December 31,
	2022			2023
	(billions of Won, except for percentages)
Loan Loss Reserve (A)(1)	W	3,432		W	3,753
NPA (B)(2)		1,487			1,381
Total Shareholders’ Equity (C)		15,436			17,951
Reserve to NPA (A/B)		231	%		272	%
Equity at Risk (B-A)/C		—			—

(1) Consists of allowance for loan losses and provisions for confirmed acceptances and guarantees, excluding the regulatory reserve for loans and guarantees.

(2) Non-performing assets, which are defined as assets that are classified as substandard or below.

Source: Internal accounting records

The following table sets forth our actual loan loss reserve ratios as of December 31, 2022 and 2023:

Classification of Loans	Actual Reserve Coverage (as of December 31, 2022)			Actual Reserve Coverage (as of December 31, 2023)
Normal		0.5	%		1.4	%
Precautionary		12.3	%		32.8	%
Substandard		67.7	%		67.9	%
Doubtful		85.6	%		100.0	%
Estimated Loss		81.8	%		92.5	%

Investments

Under the KEXIM Decree, we are not allowed to hold stocks or securities of more than three years’ maturity in excess of 60% of our equity capital. However, investment in the following securities is not subject to this restriction:

• Government bonds;

• BOK currency stabilization bonds;

• securities acquired via contributions by the Government; and

• securities acquired through investment approved by the Minister of Economy and Finance, for research related to our operations, for our financing or pursuant to Korean statutes.

As of December 31, 2023, our total investment in securities amounted toW17,420 billion, representing 14% of our total assets. Our securities portfolio consists primarily of financial assets at fair value through other comprehensive income, or FVOCI. Financial assets at FVOCI mainly consist of marketable securities (including equity securities in Industrial Bank of Korea which was recapitalized by the Government through us) and non-marketable securities (including equity securities in Korea Expressway Corporation and Korea Land & Housing Corporation).

The following table sets out the composition of our securities as of December 31, 2022 and 2023:

	As of December 31, 2022					As of December 31, 2023
Type of Investment Securities	Amount		%			Amount		%
	(billions of Won, except for percentages)
Financial Assets at FVOCI	W	11,677		76	%	W	13,615		78	%
Financial Assets at Amortized Cost		1,687		11			1,799		10
Investments in Associates and Subsidiaries		1,936		13			2,006		12
Total	W	15,300		100	%	W	17,420		100	%

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For further information relating to the classification guidelines and methods of valuation of our financial instruments (including securities), see “—Financial Statements and the Auditors—Notes to separate financial statements and of and for the years ended December 31, 2023 and 2022—Notes 3 and 5.”

Guarantees and Acceptances and Contingent Liabilities

We have credit risk factors that are not reflected on the balance sheet, which include risks associated with guarantees and acceptances. Guarantees and acceptances do not appear on the balance sheet, but rather are recorded as an off-balance sheet item in the notes to the financial statements. Guarantees and acceptances include financial guarantees, project-related guarantees, such as bid bond, advance payment bond, performance bond or retention bond, and acceptances and advances relating to trade financings such as letters of credit or import freight. Contingent liabilities, for which the guaranteed amounts were not finalized, appear as unconfirmed guarantees and acceptance items in the notes to the financial statements as off-balance sheet items. Our guarantees are classified as either confirmed or unconfirmed based on whether a determination of the amount of the “primary obligation” has been made, which refers to the amount of liability that the primary obligor bears to its counterparty in an agreement subject to our guarantee. Our unconfirmed guarantees convert into confirmed guarantees once the primary obligation, such as an advance payment or disbursement of loans, among others, has taken place and the amount of the primary obligation has been determined and recorded as the amount of our confirmed guarantees, in accordance with the guidelines set forth by the Financial Services Commission of Korea. Both confirmed and unconfirmed guarantees are recorded as off-balance sheet items of contingent liabilities in “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the years ended December 31, 2023 and 2022—Note 30.”

As of December 31, 2023, we had issued a total amount ofW43,061 billion in confirmed guarantees and acceptances, of whichW42,617 billion, representing 99.0% of the total amount, was classified as normal,W148 billion, representing 0.3% of the total amount, was classified as precautionary, andW297 billion, representing 0.7% of the total amount, was classified as substandard or below.

Derivatives

The objective in our strategy and policies on derivatives is to actively manage and minimize our foreign exchange and interest rate risks. It is our policy to hedge all currency and interest rate risks wherever possible (taking into consideration the cost of hedging). We use various hedging instruments, including foreign exchange forwards and options, interest rate swaps, and cross currency swaps. These derivatives are classified as hedging instruments if hedge accounting method is applied, and if not, as trading derivatives for accounting purposes. See “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the years ended December 31, 2023 and 2022—Note 20.” Under our hedging policy, our net gain (loss) on hedging derivative assets, net gain (loss) on the trading derivative components included in net gain (loss) on financial assets at fair value through profit or loss, net gain (loss) on foreign exchange transaction and net gain (loss) on the fair value hedged items components included in net other operating income (expenses), all as shown in the separate statements of comprehensive income of our financial statements and the notes, generally offset one another to a substantial extent.

Under our internal trading rules that have been submitted to the Financial Supervisory Service, our policy is to engage in derivative transactions mainly for hedging our own position. As part of our total exposure management system, we monitor our exposure to derivatives and may make real-time inquiries, which enables our Risk Management Department to check our exposure on a regular basis. Under the guidelines set by the Financial Supervisory Service, we are required to submit reports on our derivatives exposure to the Financial Supervisory Service on a quarterly basis. As a measure to reduce the risk of intentional manipulation or error, we have separated responsibility for different functions such as initiation, authorization, approval, recording, monitoring and reporting to the Financial Supervisory Service. The Risk Management Department conducts regular reviews of derivative transactions to monitor any breach of compliance with the relevant regulatory requirements.

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As of December 31, 2023, our outstanding loans made at floating rates of interest totaledW61,899 billion, whereas our outstanding borrowings made at floating rates of interest totaledW62,768 billion, including those raised in Australian Dollar, Euro and Hong Kong Dollar and swapped into U.S. dollar floating rate borrowings. As a result, we are exposed to possible interest rate risks to the extent that the amount of our borrowings made at floating rates of interest exceeds the amount of our loans made at floating rates of interest. Foreign exchange risk arises because a majority of our assets and liabilities are denominated in non-Won currencies. In order to match our currency and interest rate structure, we generally enter into swap transactions.

The following table shows the unsettled notional amounts and estimated fair values of derivatives we held as of the dates indicated.

	As of December 31,
	2022						2023
	Unsettled Notional Amount		Fair Value of Assets		Fair Value of Liabilities		Unsettled Notional Amount		Fair Value of Assets		Fair Value of Liabilities
	(billions of Won)
Currency forwards	W	10,733	W	256	W	339	W	16,836	W	160	W	249
Currency swaps		30,036		1,127		1,978		31,410		1,304		1,164
Interest rate swaps		56,314		904		2,553		73,694		824		2,225
Total	W	97,083	W	2,287	W	4,870	W	121,941	W	2,288	W	3,637

As of December 31, 2023, we had entered into 844 currency-related derivative contracts with a notional amount ofW48,247 billion and 506 interest rate-related derivative contracts with a notional amount ofW73,694 billion in accordance with our policy to hedge interest rate and currency risks. See “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the years ended December 31, 2023 and 2022—Note 20.”

Sources of Funding

We obtain funds primarily through borrowings from the issuance of bonds in both domestic and international capital markets, borrowings from domestic and foreign financial institutions, capital contributions and internally generated funds. Internally generated funds result from various activities we carry on and include principal and interest payments on our loans, fees from guarantee operations and other services, and income from marketable securities we hold.

We raised a net total ofW64,893 billion (new borrowings plus loan repayments by our clients less repayment of our existing debt) during 2023, a 10% decrease compared with the previous year’sW72,184 billion. The total loan repayments, including prepayments by our clients, during 2023 amounted toW64,961 billion, an increase of 16% fromW55,908 billion during 2022.

Since our establishment, the Government has, from time to time, provided us with loans to support our lending to Korean exporters and provide liquidity to us. As of December 31, 2023, our outstanding borrowings from the Government amounted toW193 billion. We also issued Won-denominated domestic bonds in the aggregate amounts ofW17,170 billion,W24,810 billion andW24,800 billion during 2021, 2022 and 2023, respectively.

We have diversified our funding sources by borrowing from various overseas sources and issuing long-term floating-rate notes and fixed-rate debentures in the international capital markets. These issues were in foreign currencies, including the U.S. dollar, Thai Baht, Australian Dollar, Euro, Hong Kong Dollar, Singapore Dollar, Swiss Franc, Brazilian Real, Mexican Peso, Peruvian Sol, Indian Rupee, Indonesian Rupiah, Chinese Yuan, New Zealand Dollar, Philippine Peso, South African Rand, Swedish Krona, Czech Koruna, Norwegian Krone, British Pound, Canadian Dollar, Japanese Yen, Turkish Lira and Polish Zloty and have original maturities ranging from one to thirty years.

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During 2023, we issued Eurobonds in the aggregate principal amount of US$6,666 million in various types of currencies under our existing medium-term notes program, a 3% decrease from US$6,858 million in 2022. These bond issues consisted of offerings of US$1,895 million, HKD 3,760 million, BRL 8,183 million, CNY 3,135 million, AUD 484 million, CHF 200 million, EUR 1,395 million, INR 8,200 million, PEN 150 million, and TRY 936 million. In addition, we issued global bonds during 2023 in the aggregate amounts of US$5,500 million and EUR 500 million under our U.S. shelf registration statement, or the U.S. Shelf Program, compared with US$5,500 million in 2022. As of December 31, 2023, the outstanding amounts of our notes and debentures were US$ 33,118 million, HKD 9,068 million, BRL 12,407 million, EUR 6,237 million, THB 3,580 million, CHF 950 million, AUD 3,993 million, INR 11,450 million, CNY 6,667 million, IDR 8,655,500 million, NZD 174 million, ZAR 2,615 million, NOK 750 million, GBP 36 million, CAD 65 million, SEK 250 million, MXN 13,000 million, TRY 936 million, CZK 3,420 million, PEN 425 million, PHP 2,400 million, JPY 42,745 million and PLN 194 million.

We also borrow from foreign financial institutions in the form of loans that are principally made by syndicates of commercial banks at floating or fixed interest rates and in foreign currencies, with original maturities ranging from two to five years. As of December 31, 2023, the outstanding amount of such borrowings from foreign financial institutions was US$2,064 million.

Our capital stock has increased from time to time since our establishment. From January 1998 to December 2023, the Government contributedW13,903 billion to our capital. As of December 31, 2023, our total capital stock amounted toW14,773 billion, and the Government, The Bank of Korea and The Korea Development Bank owned 73%, 8% and 19%, respectively, of our capital stock.

The KEXIM Act provides that the aggregate outstanding principal amount of all of our borrowings, including the total outstanding export-import financing debentures we issued in accordance with the KEXIM Decree, may not exceed an amount equal to thirty times the sum of our capital stock plus our reserves. As of December 31, 2023, the aggregate outstanding principal amount of our borrowings (including export-import financing debentures), which wasW98,789 billion, was equal to 19% of the authorized amount ofW514,770 billion.

We are not permitted to accept demand or time deposits.

Each year we must submit to the Government for its approval an operating plan which includes our target levels for different types of funding. The following table is part of the operating plan dealing with fundraising for 2024:

Sources of Fund	(billions of Won)
Capital Contribution		—
Borrowings		45,100
Net Collection of Loans		11,400
Collection of Loans		53,210
Repayment of Debts		(41,810	)
Others		—
Total	W	56,500

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Debt

Debt Repayment Schedule

The following table sets out the principal repayment schedule for our outstanding debt (consisting of borrowings and debentures) as of December 31, 2023:

Debt Principal Repayment Schedule

	Maturing on or before December 31,
Currency(1)	2024		2025		2026		2027		Thereafter
	(billions of Won)
Won	W	20,630	W	4,490	W	3,100	W	50	W	1,330
Foreign(2)		19,244		13,965		12,530		6,940		18,517
Total Won Equivalent	W	39,874	W	18,455	W	15,630	W	6,990	W	19,847

(1) Borrowings and debentures in foreign currency have been translated into Won at the market average exchange rates on December 29, 2023, as announced by the Seoul Money Brokerage Services Ltd.

(2) This figure includes debentures, bank loans, commercial papers and repurchase agreements.

Normally we determine the level of our foreign currency reserves based upon an estimate, at any given time, of aggregate loan disbursements to be made over the next two to three months. Our average foreign currency reserves in 2022 and 2023 were approximately US$5,533 million and US$8,236 million, respectively.

Although we currently believe that such reserves, together with additional borrowings available under our uncommitted short-term backup credit facilities and commercial paper programs, will be sufficient to repay our outstanding debt as it becomes due, there can be no assurance that we will continue to be able to borrow under such credit facilities, or that the devaluation of the Won will not adversely affect our ability to access funds sufficient to repay our foreign currency denominated indebtedness in the future. In addition to maintaining sufficient foreign currency reserves, we monitor the maturity profile of our foreign currency assets and liabilities to ensure that there are sufficient maturing assets to meet our liabilities as they become due.

As of December 31, 2023, our foreign currency assets maturing within three months, six months and one year exceeded our foreign currency liabilities coming due within such periods by US$11,833 million, US$9,852 million and US$9,239 million, respectively. As of December 31, 2023, our total foreign currency liabilities exceeded our total foreign currency assets by US$613 million.

Internal and External Debt of the Bank

The following table summarizes, as of December 31 of the years indicated, the outstanding internal debt of the Bank:

Internal Debt of the Bank

	(billions of Won)
2019		15,405
2020		22,805
2021		22,910
2022		28,920
2023		29,600

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The following table sets out, by currency and the equivalent amount in U.S. Dollars, the outstanding external debt of the Bank as of December 31, 2023:

External Debt of the Bank

	Amount in Original Currency		Equivalent Amount in U.S. Dollars(1)
	(billions)
US$	US$	36.4	US$	36.4
Euro (EUR)	EUR	6.3		6.9
Brazilian real (BRL)	BRL	12.4		2.5
Australian Dollars (AUD)	AUD	4.9		3.3
British Pound (GBP)	GBP	0.0		0.0
Thai Baht (THB)	THB	3.6		0.1
Hong Kong dollar (HKD)	HKD	9.1		1.2
Swiss franc (CHF)	CHF	1.0		1.0
Swedish Krona (SEK)	SEK	0.3		0.0
Indonesian rupiah (IDR)	IDR	8,655.5		0.6
Chinese Yuan (CNY)	CNY	6.7		1.0
Norwegian Krone (NOK)	NOK	0.8		0.1
Mexican Peso (MXN)	MXN	13.0	US$	0.7
New Zealand Dollar (NZD)	NZD	0.2		0.1
Indian Rupee (INR)	INR	11.5		0.1
South African Rand (ZAR)	ZAR	2.6		0.2
Peru Nuevo sol (PEN)	PEN	0.4		0.1
Canadian Dollar (CAD)	CAD	0.1		0.1
Turkish Lira (TRY)	TRY	0.9		0.0
Czech Koruna (CZK)	CZK	3.4		0.1
Polish Zloty (PLN)	PLN	0.2		0.0
Japanese Yen (JPY)	JPY	59.9		0.4
Philippine Peso (PHP)	PHP	2.4		0.0
			US$	55.2

(1) Amounts expressed in currencies other than U.S. dollar are converted to U.S. dollar at the exchange rate announced by the Seoul Money Brokerage Services, Ltd. in effect on December 29, 2023 or the prevailing market rate on December 29, 2023.

The following table summarizes, as of December 31 of the years indicated, the outstanding external debt of the Bank:

External Debt of the Bank

	(billions of Won)
2019		57,899
2020		54,677
2021		59,144
2022		74,486
2023		71,195

For further information on the outstanding indebtedness of the Bank, see “—Tables and Supplementary Information.”

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Debt Record

We have never defaulted in the payment of principal of, or interest on, any of our obligations.

Credit Policies, Credit Approval and Risk Management

Credit Policies

The Credit Policy Department functions as our centralized policy-making and planning division with respect to our lending activities. The Credit Policy Department formulates and revises our internal regulations on loan programs, sets basic lending guidelines on a country basis and gathers data from our various operating groups and produces various internal and external reports.

Credit Approval

We have multiple levels of loan approval authority, depending on the loan amount and other factors such as the nature of the credit, the conditions of the transaction, and whether the loan is secured. Our Board of Directors can approve loans of any amount. The Chief Executive Credit Committee, Credit Committee, Loan Officer Committee, Director Generals and Directors each have authority to approve loans up to a specified amount. The amount differs depending on the type of loan and certain other factors, for example, whether a loan is collateralized or guaranteed.

At each level of authority, loan applications are reviewed on the basis of the feasibility of the project from a technical, financial and economic point of view in addition to evaluating the probability of recovery. In conducting such a review, the following factors are considered:

• eligibility of the transaction under our financing criteria;

• country risk of the country of the borrower and the country in which the related project is located;

• credit risk of the borrower;

• a supplier’s ability to perform under the related supply contract;

• legal disputes over the related project and supply contract; and

• availability of collateral.

Risk Management

Our overall risk management policy is set by the Risk Management Committee, which meets on a quarterly basis and from time to time to establish tolerance limits for various exposures, whereas the overall risk management is overseen by the Risk Management Department, which is responsible for monitoring risk exposure.

The Risk Management Department reports our loan portfolio to the Financial Supervisory Service on a quarterly basis. The Risk Management Department also monitors our operating groups’ compliance with internal guidelines and procedures. To manage liquidity risk, we review the strategy for the sources and uses of funds, with each division submitting projected sources and uses to the Treasury Group. The Risk Management Department and the Treasury Group continually monitor our overall liquidity and the Treasury Group prepares both weekly and monthly cash flow forecasts. Our policy is to maintain a liquidity level, which can cover loan disbursements for a period of two to three months going forward. We protect ourselves from potential liquidity squeezes by maintaining sufficient amount of liquid assets with additional back-up of short-term credit lines.

Our core lending activities expose us to market risk, mostly in the form of interest rate and foreign currency risks. The Risk Management Department reports interest rate and foreign exchange gap positions to the Risk

28

Management Committee on a quarterly basis. We also monitor changes in, and matches of, foreign currency assets and liabilities in order to reduce exposure to currency fluctuations. Recently, in light of the COVID-19 pandemic, the invasion of Ukraine by Russia and ensuing actions taken by the United States and other countries, increases in policy interest rates globally (including Korea) to combat rising inflationary pressures, and more recently, the escalation of hostilities in the Middle East following the Israel-Hamas war, we have closely monitored foreign currency risks that could result from the depreciation of the Won against major foreign currencies (including the U.S. dollar), which in turn may increase our cost in servicing our foreign currency denominated debt and result in foreign exchange losses.

The Risk Management Department monitors various market indicators related to foreign currency liquidity on a regular basis and has been cooperating with other departments including the Treasury Group to effectively address any potential liquidity risk which may be associated with the conflict involving Ukraine and Russia.

One of the key components of our risk management policy, which also affects our fundraising efforts, is to monitor matches of asset maturities and liability maturities. The average maturity as of December 31, 2023 for our Won- and foreign currency-denominated loans was 13 months and 41 months, respectively, and for Won- and foreign currency-denominated liabilities was 13 months and 37 months, respectively.

Our Risk Management Department also monitors and manages various operational risks that we face from time to time.

In managing our risks, we follow an overall risk management process where we:

• determine the risk management objectives;

• identify key exposures;

• measure key risks; and

• monitor risk management results.

Our risk management system is a continuous system that is frequently evaluated and updated on an ongoing basis.

Capital Adequacy

Under the Financial Supervisory Service’s guidelines on risk-adjusted capital which were introduced in consideration of the standards set by the Bank for International Settlements, all banks in Korea, including us, are required to maintain a capital adequacy ratio (Tier I and Tier II) of at least 10.5% on a consolidated basis. To the extent that we fail to maintain this ratio, the Korean regulatory authorities may require corrective measures such as management improvement recommendations and disposal of assets.

The current capital adequacy requirements of the Financial Services Commission are derived from a new set of bank capital measures, referred to as Basel III, which the Basel Committee on Banking Supervision initially introduced in 2009 and began phasing in starting from 2013. Commencing in July 2013, the Financial Services Commission promulgated a series of amended regulations implementing Basel III, pursuant to which Korean banks, including us, were required to maintain a minimum ratio of Tier I common equity capital (which principally includes equity capital, capital surplus and retained earnings less reserve for credit losses) to risk-weighted assets of 3.5% and Tier I capital to risk-weighted assets of 4.5% from December 1, 2013, which minimum ratios were increased to 4.0% and 5.5%, respectively, from January 1, 2014 and increased further to 4.5% and 6.0%, respectively, from January 1, 2015. Such requirements are in addition to the pre-existing requirement for a minimum ratio of Tier I and Tier II capital (less any capital deductions) to risk-weighted assets of 8.0%, which remains unchanged. The amended regulations also require an additional capital conservation buffer of 2.5%, as well as a potential counter-cyclical capital buffer of up to 2.5%, which is determined on a quarterly basis by the Financial Services Commission. In May 2023, the Financial Services

29

Commission announced that it would increase the counter-cyclical capital buffer from 0% to 1%, which would become effective in May 2024 following a one-year grace period. As of December 31, 2023, our capital adequacy ratio, on a consolidated basis, was 14.5%, an increase from 13.4% as of December 31, 2022, which was primarily due to our receipt of capital contributions from the Government.

The following table sets forth our capital base and capital adequacy ratios (on a consolidated basis) reported as of December 31, 2022 and 2023:

	As of December 31,
	2022			2023
	(billions of Won, except for percentages)
Tier I	W	15,315		W	17,805
Capital stock (including capital surplus and capital adjustments)		12,639			14,632
Retained Earnings(1)		2,154			2,803
Accumulated other comprehensive income		738			716
Others		3			2
Deductions from Tier I Capital		(219	)		(348	)
Capital Adjustments		—			—
Deferred Tax Asset		—			—
Others		(219	)		(348	)
Tier II (General Loan Loss Reserves)		2,186			2,205
Total Capital		17,501			20,010
Risk Adjusted Assets		130,726			138,260
Capital Adequacy Ratios
Tier I common equity		11.7	%		12.9	%
Tier I		11.7	%		12.9	%
Tier I and Tier II		13.4	%		14.5	%

(1) Net amount after deducting regulatory reserve for loan losses.

Source: Internal accounting records

Overseas Operations

We maintain an international presence through 24 overseas representative offices, which are located in New York City, Tokyo, Beijing, São Paolo, Paris, Washington D.C., Shanghai, New Delhi, Dubai, Moscow, Mexico City, Tashkent, Hanoi, Manila, Jakarta, Yangon, Bogota, Istanbul, Dar es Salaam, Dhaka, Accra, Phnom Penh, Addis Ababa and Colombo.

We also have four wholly-owned subsidiaries: KEXIM Bank (UK) Ltd. in London, KEXIM (Asia) Ltd. in Hong Kong, KEXIM Vietnam Leasing Co., Ltd. in Ho Chi Minh City and KEXIM Global (Singapore) Ltd. in Singapore. These subsidiaries are engaged in the merchant banking and lease financing businesses, and assist us in raising overseas financing. We also own 85% of P.T. Koexim Mandiri Finance, a subsidiary in Jakarta, which is primarily engaged in the business of lease financing.

The table below sets forth brief details of our subsidiaries as of December 31, 2023:

	Principal Place of Business	Type of Business	Book Value		Bank’s Holding
			(billions of Won)		(%)
Kexim Bank (UK) Ltd.	United Kingdom	Commercial Banking	W	138		100	%
KEXIM (Asia) Ltd.	Hong Kong	Commercial Banking		168		100
P.T. Koexim Mandiri Finance	Indonesia	Leasing and Factoring		90		85
KEXIM Global (Singapore) Ltd.	Singapore	Commercial Banking		373		100
Kexim Vietnam Leasing Co., Ltd.	Vietnam	Leasing and Lending		58		100

30

Property

Our head office is located at 38 Eunhaeng-ro, Yeongdeungpo-gu, Seoul 07242, Korea, a 45,715 square meter building on a site of 9,110 square meters and owned by us. In addition to the head office, we own a staff training center located near Seoul on a site of 47,881 square meters and a marine finance center, a 4,423 square meter building, located in Busan on a site of 556 square meters. We also maintain 13 branches in Busan, Gwangju, Daegu, Changwon, Daejeon, Suwon, Incheon, Ulsan, Cheongju, Jeonju, Gumi, Yeosu and Wonju. Our domestic branch offices and overseas representative offices are located in facilities held under long-term leases.

Management and Employees

Management

Our governance and management is the responsibility of our Board of Directors, which has authority to decide important matters relating to our business. The Board of Directors is chaired by our Chief Executive Officer and is comprised of seven members: the Chairman and Chief Executive Officer, the Deputy Chief Executive Officer, the Senior Executive Director and four Independent Directors. The Auditor may attend and state his/her opinion at the meetings of the Board of Directors. The President of Korea appoints our Chief Executive Officer upon the recommendation of the Minister of Economy and Finance. The Minister of Economy and Finance appoints the Deputy Chief Executive Officer, the Senior Executive Director and the Independent Directors upon the recommendation of our Chief Executive Officer. The Minister of Economy and Finance appoints the Auditor. All Board members and the Auditor serve for three years and are eligible for re-appointment for successive terms of office.

The members of the Board of Directors are currently as follows:

Name	Board Member Since	Position
Hee-sung Yoon	July 27, 2022	Chairman and Chief Executive Officer
Jong-Hyuck Ahn	December 30, 2023	Deputy Chief Executive Officer
Kiyeon Hwang	October 1, 2023	Senior Executive Director
Jaimin Lee	September 18, 2021	Independent Director
Tae-ho Yun	September 18, 2021	Independent Director
Chang Huh	April 10, 2023	Independent Director
Hye Jeong Nam	April 10, 2023	Independent Director

Our basic policy guidelines for activities are established by the Operations Committee. According to the By-laws, the Operations Committee is composed of officials nominated as follows:

• Chief Executive Officer of KEXIM;

• official of the Ministry of Economy and Finance, nominated by the Minister of Economy and Finance;

• official of the Ministry of Foreign Affairs, nominated by the Minister of Foreign Affairs;

• official of the Ministry of Trade, Industry & Energy, nominated by the Minister of Trade, Industry & Energy;

• official of the Ministry of Land, Infrastructure and Transport, nominated by the Minister of Land, Infrastructure and Transport;

• official of the Ministry of Oceans and Fisheries, nominated by the Minister of Oceans and Fisheries;

• official of the Financial Services Commission, nominated by the Chairman of the Financial Services Commission;

• executive director of The Bank of Korea, nominated by the Governor of The Bank of Korea;

31

• executive director of the Korea Federation of Banks, nominated by the Chairman of the Korea Federation of Banks;

• representative of an exporters’ association (Korea International Trade Association), nominated by the Minister of Economy and Finance after consultation with the Minister of Trade, Industry & Energy;

• executive director of the Korea Trade Insurance Corporation established under the Trade Insurance Act, nominated by the Chairman and President of the Korea Trade Insurance Corporation; and

• up to two persons who have extensive knowledge and experience in international economic cooperation work, recommended by our Chief Executive Officer and appointed by the Minister of Economy and Finance.

The members of the Operations Committee are currently as follows:

Name	Member Since	Position
Hee-sung Yoon	July 27, 2022	Chairman and Chief Executive Officer of KEXIM
Ji-Young Choi	August 25, 2023	Deputy Minister for International Affairs, Ministry of Economy and Finance
Jae Kwon Kang	December 12, 2022	Deputy Minister for Economic Affairs, Ministry of Foreign Affairs
Wan Ki Kim	March 3, 2023	Deputy Minister for International Trade and Investment, Ministry of Trade, Industry & Energy
Sang-Moon Kim	August 22, 2022	Assistant Minister for Infrastructure Affairs, Ministry of Land, Infrastructure and Transport
Hyun Soo Yoon	August 10, 2022	Director General of Shipping and Logistics Bureau, Ministry of Oceans and Fisheries
Se-Hoon Lee	July 30, 2021	Secretary General, Financial Services Commission
Jong Ryeol Lee	July 20, 2022	Deputy Governor, The Bank of Korea
Tae Hoon Lee	June 7, 2023	Senior Executive Director, Korea Federation of Banks
Marn Ki Jeong	September 21, 2022	Executive Vice Chairman, Korea International Trade Association
Ho Ill Kim	March 23, 2022	Deputy President, Korea Trade Insurance Corporation
Ilkyung Moon	May 4, 2023	Professor, Seoul National University
Hae Sun Park	February 16, 2022	Professor, Konkuk University

Employees

As of December 31, 2023, we had 1,212 employees, among whom 998 employees were members of our labor union. We have never experienced a work stoppage of a serious nature. Every two years, the management and union negotiate and enter into a collective bargaining agreement. The most recent collective bargaining agreement was entered into in October 2022.

Tables and Supplementary Information

A. External Debt of the Bank

(1) External Bonds of the Bank

Currency	Original Principal Amount		Interest Rate (%)		Issue Date		Maturity Date		Principal Amount Outstanding as of December 31, 2023
USD		50,000,000		0.00		December 20, 2023		December 20, 2043		50,000,000
USD		50,000,000		USD SOFR ON+0.72		December 8, 2023		December 8, 2026		50,000,000
USD		50,000,000		USD SOFR ON+0.72		December 7, 2023		December 7, 2026		50,000,000
USD		52,000,000		0.00		December 1, 2023		November 29, 2024		52,000,000
USD		70,000,000		0.00		November 16, 2023		November 15, 2024		70,000,000
USD		500,000,000		USD SOFR ON+0.88		November 21, 2023		November 21, 2028		500,000,000
USD		50,000,000		6.03		October 26, 2023		October 26, 2043		50,000,000

32

Currency	Original Principal Amount		Interest Rate (%)		Issue Date		Maturity Date			Principal Amount Outstanding as of December 31, 2023
USD		50,000,000		USD SOFR ON+0.45		October 13, 2023		April 14, 2025			50,000,000
USD		20,000,000		5.00		October 5, 2023		October 5, 2026			20,000,000
USD		50,000,000		5.00		October 5, 2023		October 5, 2026			50,000,000
USD		500,000,000		5.13		September 18, 2023		September 18, 2033			500,000,000
USD		1,000,000,000		5.13		September 18, 2023		September 18, 2028			1,000,000,000
USD		500,000,000		5.38		September 18, 2023		September 18, 2025			500,000,000
USD		15,000,000		USD SOFR ON+0.75		August 8, 2023		August 8, 2026			15,000,000
USD		45,000,000		USD SOFR ON+0.75		August 7, 2023		August 7, 2026			45,000,000
USD		52,500,000		0.00		August 2, 2023		August 1, 2024			52,500,000
USD		40,000,000		USD SOFR ON+0.75		August 1, 2023		August 1, 2026			40,000,000
USD		50,000,000		USD SOFR ON+0.80		June 23, 2023		June 23, 2026			50,000,000
USD		50,000,000		USD SOFR ON+0.80		June 22, 2023		June 22, 2026			50,000,000
USD		50,000,000		USD SOFR ON+0.80		June 21, 2023		June 21, 2026			50,000,000
USD		500,000,000		4.63		June 7, 2023		June 7, 2033			500,000,000
USD		50,000,000		USD Term SOFR 3M+0.90		April 19, 2023		April 19, 2028			50,000,000
USD		50,000,000		4.85		March 14, 2023		March 14, 2028			50,000,000
USD		50,000,000		5.14		February 22, 2023		February 22, 2024	*		50,000,000
USD		50,000,000		5.13		January 11, 2023		January 11, 2033			50,000,000
USD		1,500,000,000		5.00		January 11, 2023		January 11, 2028			1,500,000,000
USD		950,000,000		5.13		January 11, 2023		January 11, 2033			950,000,000
USD		1,000,000,000		4.88		January 11, 2023		January 11, 2026			1,000,000,000
USD		50,000,000		USD SOFR ON+0.75		December 20, 2023		December 20, 2043			50,000,000
USD		40,000,000		USD SOFR ON+1.20		December 8, 2023		December 8, 2026			40,000,000
USD		50,000,000		5.24		December 7, 2023		December 7, 2026			50,000,000
USD		50,000,000		USD SOFR ON+1.06		December 1, 2023		November 29, 2024			50,000,000
USD		50,000,000		USD SOFR ON+1.06		November 16, 2023		November 15, 2024			50,000,000
USD		400,000,000		USD SOFR ON+1.06		November 21, 2023		November 21, 2028			400,000,000
USD		50,000,000		USD SOFR ON+0.40		October 26, 2023		October 26, 2043			50,000,000
USD		50,000,000		5.00		October 13, 2023		April 14, 2025			50,000,000
USD		50,000,000		USD SOFR ON+1.03		October 5, 2023		October 5, 2026			50,000,000
USD		50,000,000		3.96		October 5, 2023		October 5, 2026			50,000,000
USD		500,000,000		4.50		September 18, 2023		September 18, 2033			500,000,000
USD		1,000,000,000		4.25		September 18, 2023		September 18, 2028			1,000,000,000
USD		1,000,000,000		4.00		September 18, 2023		September 18, 2025			1,000,000,000
USD		50,000,000		USD SOFR Index+0.62		August 8, 2023		August 8, 2026			50,000,000
USD		50,000,000		USD SOFR ON+0.82		August 7, 2023		August 7, 2026			50,000,000
USD		50,000,000		USD SOFR ON+0.82		August 2, 2023		August 1, 2024			50,000,000
USD		50,000,000		4.66		August 1, 2023		August 1, 2026			50,000,000
USD		200,000,000		2.45		June 23, 2023		June 23, 2026			200,000,000
USD		50,000,000		USD SOFR ON+0.47		June 22, 2023		June 22, 2026			50,000,000
USD		50,000,000		USD SOFR ON+0.47		June 21, 2023		June 21, 2026			50,000,000
USD		50,000,000		USD SOFR ON+0.47		June 7, 2023		June 7, 2033			50,000,000
USD		700,000,000		1.63		April 19, 2023		April 19, 2028			700,000,000
USD		300,000,000		1.63		March 14, 2023		March 14, 2028			300,000,000
USD		1,000,000,000		2.13		February 22, 2023		February 22, 2024	*		1,000,000,000
USD		500,000,000		1.25		January 11, 2023		January 11, 2033			500,000,000
USD		500,000,000		1.25		January 11, 2023		January 11, 2028			500,000,000
USD		50,000,000		2.90		January 11, 2023		January 11, 2033			50,000,000
USD		300,000,000		1.75		January 11, 2023		January 11, 2026			300,000,000
USD		700,000,000		1.75		November 3, 2022		November 3, 2025			700,000,000
USD		50,000,000		2.80		October 31, 2022		October 31, 2027			50,000,000
USD		40,000,000		2.80		October 28, 2022		October 28, 2032			40,000,000
USD		50,000,000		1.13		September 29, 2022		September 29, 2027			50,000,000
USD		50,000,000		0.92		September 29, 2022		September 29, 2027			50,000,000
USD		50,000,000		USD SOFR Index+0.25		September 29, 2022		September 29, 2027			50,000,000
USD		50,000,000		USD SOFR Index+0.25		September 21, 2022		September 21, 2024			50,000,000
USD		50,000,000		1.38		September 22, 2022		September 22, 2042			50,000,000
USD		500,000,000		2.50		September 20, 2022		September 20, 2027			500,000,000
USD		750,000,000		1.13		September 15, 2022		September 15, 2025			750,000,000

33

Currency	Original Principal Amount		Interest Rate (%)		Issue Date		Maturity Date			Principal Amount Outstanding as of December 31, 2023
USD		750,000,000		0.63		September 15, 2022		September 15, 2032			750,000,000
USD		50,000,000		2.95		September 15, 2022		September 15, 2027			50,000,000
USD		200,000,000		USD SOFR ON+0.37		September 15, 2022		September 15, 2024			200,000,000
USD		200,000,000		USD SOFR ON+0.47		July 22, 2022		July 22, 2024			200,000,000
USD		400,000,000		USD SOFR ON+0.32		July 22, 2022		July 22, 2027			400,000,000
USD		50,000,000		3.07		July 21, 2022		July 21, 2027			50,000,000
USD		50,000,000		0.66		July 25, 2022		July 25, 2052			50,000,000
USD		50,000,000		0.62		February 10, 2022		February 10, 2034			50,000,000
USD		300,000,000		1.13		February 8, 2022		February 8, 2027			300,000,000
USD		50,000,000		1.38		February 8, 2022		February 8, 2027			50,000,000
USD		50,000,000		0.45		February 8, 2022		February 8, 2027			50,000,000
USD		240,000,000		USD SOFR ON+0.30		January 18, 2022		January 18, 2027			240,000,000
USD		50,000,000		0.45		January 18, 2022		January 18, 2027			50,000,000
USD		50,000,000		1.38		January 18, 2022		January 18, 2032			50,000,000
USD		500,000,000		0.63		January 18, 2022		January 18, 2025			500,000,000
USD		300,000,000		1.38		January 18, 2022		January 18, 2025			300,000,000
USD		200,000,000		0.63		October 27, 2021		October 27, 2051			200,000,000
USD		500,000,000		0.38		October 19, 2021		October 19, 2028			500,000,000
USD		50,000,000		2.60		October 19, 2021		October 19, 2028			50,000,000
USD		50,000,000		2.60		October 1, 2021		October 2, 2051			50,000,000
USD		50,000,000		2.30		September 16, 2021		September 16, 2051			50,000,000
USD		50,000,000		2.40		September 10, 2021		March 24, 2026			50,000,000
USD		500,000,000		1.25		September 9, 2021		September 9, 2025			500,000,000
USD		400,000,000		0.75		August 5, 2021		August 5, 2024			400,000,000
USD		100,000,000		0.83		August 5, 2021		August 5, 2024			100,000,000
USD		100,000,000		1.33		July 13, 2021		March 20, 2025			100,000,000
USD		100,000,000		1.22		June 29, 2021		June 29, 2041			100,000,000
USD		50,000,000		USD Term SOFR 3M+1.20		June 29, 2021		December 29, 2026			50,000,000
USD		50,000,000		USD Term SOFR 3M+1.61		June 29, 2021		June 29, 2024			50,000,000
USD		425,000,000		1.38		June 10, 2021		June 10, 2051			425,000,000
USD		500,000,000		1.88		May 27, 2021		April 27, 2024	*		500,000,000
USD		21,200,000		1.30		May 6, 2021		May 6, 2026			21,200,000
USD		500,000,000		2.38		April 29, 2021		April 29, 2024	*		500,000,000
USD		21,900,000		2.64		April 16, 2021		April 16, 2051			21,900,000
USD		50,000,000		3.92		April 13, 2021		April 12, 2024	*		50,000,000
USD		50,000,000		3.65		April 8, 2021		April 8, 2024	*		50,000,000
USD		50,000,000		3.65		March 24, 2021		March 24, 2026			50,000,000
USD		50,000,000		3.65		March 18, 2021		March 20, 2025			50,000,000
USD		50,000,000		3.55		March 15, 2021		March 15, 2024	*		50,000,000
USD		50,000,000		3.55		March 11, 2021		March 11, 2024	*		50,000,000
USD		50,000,000		3.65		March 15, 2021		March 15, 2024	*		50,000,000
USD		50,000,000		3.65		March 9, 2021		March 20, 2025			50,000,000
USD		200,000,000		4.10		February 9, 2021		February 9, 2026			200,000,000
USD		50,000,000		3.56		February 9, 2021		February 9, 2031			50,000,000
USD		50,000,000		3.58		February 9, 2021		February 9, 2026			50,000,000
USD		50,000,000		3.54		February 9, 2021		February 9, 2024	*		50,000,000
USD		50,000,000		3.25		December 7, 2020		December 7, 2050			50,000,000
USD		30,000,000		3.42		December 7, 2020		December 7, 2050			30,000,000
USD		30,000,000		3.42		December 15, 2020		December 15, 2050			30,000,000
USD		50,000,000		3.20		October 29, 2020		October 29, 2050			50,000,000
USD		50,000,000		3.23		September 21, 2020		September 21, 2030			50,000,000
USD		50,000,000		2.74		September 21, 2020		September 21, 2025			50,000,000
USD		700,000,000		2.38		August 19, 2020		August 19, 2024			700,000,000
USD		50,000,000		2.01		June 5, 2020		June 5, 2025			50,000,000
USD		45,000,000		3.25		June 5, 2020		June 5, 2024	*		45,000,000
USD		30,000,000		2.27		June 2, 2020		June 2, 2025			30,000,000
USD		50,000,000		2.29		April 24, 2020		July 24, 2025			50,000,000
USD		50,000,000		2.29		March 20, 2020		March 20, 2025			50,000,000
USD		50,000,000		3.09		February 12, 2020		February 12, 2025			50,000,000

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Currency	Original Principal Amount		Interest Rate (%)		Issue Date		Maturity Date			Principal Amount Outstanding as of December 31, 2023
USD		50,000,000		2.21		August 29, 2019		August 28, 2024			50,000,000
USD		50,000,000		2.09		June 25, 2019		June 25, 2024	*		50,000,000
USD		50,000,000		2.38		February 5, 2018		February 5, 2048			50,000,000
USD		1,000,000,000		2.63		November 27, 2017		November 27, 2047			1,000,000,000
USD		50,000,000		2.60		November 17, 2017		November 17, 2047			50,000,000
USD		50,000,000		2.60		November 17, 2017		November 17, 2047			50,000,000
USD		1,000,000,000		3.25		November 8, 2017		November 8, 2037			1,000,000,000
USD		50,000,000		3.32		November 8, 2017		November 8, 2037			50,000,000
USD		50,000,000		3.05		October 25, 2017		October 25, 2047			50,000,000
USD		50,000,000		3.45		October 25, 2017		October 25, 2047			50,000,000
USD		30,000,000		3.33		October 11, 2017		October 11, 2047			30,000,000
USD		400,000,000		3.25		August 18, 2017		August 18, 2037			400,000,000
USD		50,000,000		2.70		August 17, 2017		August 17, 2037			50,000,000
USD		40,000,000		3.09		April 24, 2017		April 26, 2032			40,000,000
USD		50,000,000		2.85		April 24, 2017		April 24, 2029			50,000,000
USD		50,000,000		2.80		January 6, 2017		January 6, 2029			50,000,000
USD		30,000,000		3.04		January 6, 2017		January 6, 2029			30,000,000
USD		30,000,000		3.04		December 14, 2016		December 14, 2028			30,000,000
USD		50,000,000		2.81		December 12, 2016		December 12, 2028			50,000,000
USD		50,000,000		3.02		November 17, 2016		November 17, 2028			50,000,000
USD		50,000,000		3.02		October 21, 2016		April 21, 2027			50,000,000
USD		1,250,000,000		2.88		August 30, 2016		August 30, 2024			1,250,000,000
USD		50,000,000		3.35		August 19, 2016		August 19, 2031			50,000,000
USD		50,000,000		3.50		August 16, 2016		August 16, 2026			50,000,000
USD		50,000,000		3.53		August 17, 2016		August 17, 2026			50,000,000
USD		50,000,000		3.50		August 3, 2016		August 3, 2026			50,000,000
USD		50,000,000		3.50		August 2, 2016		August 2, 2031			50,000,000
USD		30,000,000		3.46		August 2, 2016		August 2, 2026			30,000,000
USD		50,000,000		3.23		July 22, 2016		July 22, 2026			50,000,000
USD		50,000,000		3.40		July 1, 2016		July 1, 2026			50,000,000
USD		50,000,000		3.41		May 26, 2016		May 26, 2026			50,000,000
USD		50,000,000		3.41		February 25, 2016		February 25, 2026			50,000,000
USD		500,000,000		3.25		February 25, 2016		February 25, 2026			500,000,000
USD		30,000,000		3.30		November 10, 2015		November 10, 2025			30,000,000
USD		40,000,000		4.04		September 3, 2015		September 3, 2030			40,000,000
USD		30,000,000		4.00		September 1, 2015		September 1, 2025			30,000,000
USD		30,000,000		4.00		August 4, 2015		August 4, 2030			30,000,000
USD		20,000,000		4.02		August 4, 2015		August 4, 2027			20,000,000
USD		50,000,000		4.07		June 30, 2015		August 12, 2026			50,000,000
USD		50,000,000		4.06		April 1, 2015		April 1, 2027			50,000,000
USD		50,000,000		4.14		March 10, 2015		March 10, 2030			50,000,000
USD		50,000,000		4.14		March 10, 2015		March 10, 2025			50,000,000
USD		50,000,000		4.14		March 17, 2015		March 17, 2025			50,000,000
USD		220,000,000		3.95		March 6, 2015		March 6, 2030			220,000,000
USD		750,000,000		4.00		March 6, 2015		March 6, 2030			750,000,000
USD		30,000,000		4.03		March 6, 2015		March 6, 2025			30,000,000
USD		20,000,000		4.03		March 4, 2015		March 4, 2030			20,000,000
USD		30,000,000		4.03		March 4, 2015		March 4, 2030			30,000,000
USD		50,000,000		4.03		January 21, 2015		January 21, 2025			50,000,000
USD		50,000,000		3.91		November 28, 2014		November 28, 2026			50,000,000
USD		40,000,000		4.00		November 25, 2014		November 26, 2029			40,000,000
USD		50,000,000		3.87		November 20, 2014		November 20, 2029			50,000,000
USD		50,000,000		4.37		November 19, 2014		November 19, 2029			50,000,000
USD		100,000,000		6.78		November 6, 2014		November 6, 2029			100,000,000
				Subtotal in Original Currency						USD	33,117,600,000
				Subtotal in Equivalent Amount of Won(1)						W	42,701,833,440,000
HKD		315,000,000		4.93		December 6, 2023		December 6, 2024			315,000,000
HKD		380,000,000		4.87		December 5, 2023		December 5, 2025			380,000,000

35

Currency	Original Principal Amount		Interest Rate (%)		Issue Date		Maturity Date			Principal Amount Outstanding as of December 31, 2023
HKD		385,000,000		4.80		December 4, 2023		December 4, 2026			385,000,000
HKD		390,000,000		4.60		November 22, 2023		November 22, 2026			390,000,000
HKD		315,000,000		5.05		November 8, 2023		November 8, 2024			315,000,000
HKD		375,000,000		5.00		November 1, 2023		May 1, 2025			375,000,000
HKD		380,000,000		5.00		August 3, 2023		February 3, 2025			380,000,000
HKD		390,000,000		4.90		March 15, 2023		March 15, 2026			390,000,000
HKD		390,000,000		4.84		March 14, 2023		March 14, 2026			390,000,000
HKD		440,000,000		4.62		February 21, 2023		February 21, 2024	*		440,000,000
HKD		224,000,000		5.18		October 28, 2022		October 28, 2032			224,000,000
HKD		224,000,000		5.18		October 27, 2022		October 27, 2032			224,000,000
HKD		390,000,000		5.00		October 27, 2022		October 27, 2025			390,000,000
HKD		390,000,000		3.66		July 27, 2022		July 27, 2024			390,000,000
HKD		320,000,000		1.00		August 19, 2021		August 19, 2026			320,000,000
HKD		320,000,000		0.98		August 18, 2021		August 18, 2026			320,000,000
HKD		345,000,000		0.90		August 13, 2021		August 13, 2026			345,000,000
HKD		310,000,000		0.97		July 21, 2021		July 21, 2026			310,000,000
HKD		310,000,000		0.70		July 20, 2021		July 20, 2025			310,000,000
HKD		1,000,000,000		0.52		April 27, 2021		January 26, 2024	*		1,000,000,000
HKD		385,000,000		2.22		April 14, 2020		April 14, 2025			385,000,000
HKD		320,000,000		2.34		March 26, 2020		March 26, 2025			320,000,000
HKD		390,000,000		2.05		September 26, 2019		September 26, 2024			390,000,000
HKD		380,000,000		2.08		September 25, 2019		September 25, 2024			380,000,000
				Subtotal in Original Currency						HKD	9,068,000,000
				Subtotal in Equivalent Amount of Won(2)						W	1,496,764,080,000
MXN		1,000,000,000		10.05		June 24, 2022		April 28, 2025			1,000,000,000
MXN		5,000,000,000		TIIE 28D+0.20		January 26, 2021		January 20, 2026			5,000,000,000
MXN		7,000,000,000		7.93		August 8, 2019		July 30, 2026			7,000,000,000
				Subtotal in Original Currency						MXN	13,000,000,000
				Subtotal in Equivalent Amount of Won(3)						W	987,610,000,000
BRL		243,000,000		8.93		November 22, 2023		November 19, 2025			243,000,000
BRL		246,000,000		9.27		November 21, 2023		November 19, 2025			246,000,000
BRL		500,000,000		9.37		October 31, 2023		October 30, 2025			500,000,000
BRL		250,000,000		9.81		October 27, 2023		October 27, 2025			250,000,000
BRL		250,000,000		9.73		October 27, 2023		October 27, 2025			250,000,000
BRL		505,000,000		9.30		October 18, 2023		October 2, 2026			505,000,000
BRL		508,000,000		9.32		October 17, 2023		October 1, 2026			508,000,000
BRL		245,500,000		8.78		October 4, 2023		October 1, 2025			245,500,000
BRL		242,500,000		8.70		October 4, 2023		September 19, 2025			242,500,000
BRL		249,500,000		8.86		August 29, 2023		August 20, 2025			249,500,000
BRL		248,000,000		8.67		August 23, 2023		August 14, 2025			248,000,000
BRL		1,424,000,000		9.66		August 9, 2023		August 9, 2024			1,424,000,000
BRL		1,490,000,000		10.93		May 25, 2023		May 25, 2024	*		1,490,000,000
BRL		255,000,000		10.23		April 4, 2023		March 21, 2025			255,000,000
BRL		264,000,000		10.08		March 31, 2023		November 26, 2024			264,000,000
BRL		262,500,000		10.41		March 21, 2023		September 19, 2024			262,500,000
BRL		260,500,000		11.80		December 29, 2022		December 20, 2024			260,500,000
BRL		450,000,000		11.77		November 29, 2022		August 29, 2024			450,000,000
BRL		490,000,000		11.90		November 28, 2022		July 29, 2024			490,000,000
BRL		500,000,000		10.50		November 14, 2022		October 15, 2024			500,000,000
BRL		264,500,000		10.54		October 20, 2022		June 27, 2024	*		264,500,000
BRL		260,000,000		10.50		October 18, 2022		June 27, 2024	*		260,000,000
BRL		259,000,000		10.79		September 28, 2022		July 30, 2024			259,000,000
BRL		487,000,000		11.07		September 21, 2022		April 19, 2024	*		487,000,000
BRL		495,000,000		10.86		September 19, 2022		April 29, 2024	*		495,000,000
BRL		257,500,000		12.11		June 28, 2022		June 28, 2024			257,500,000
BRL		233,000,000		12.26		April 26, 2022		January 26, 2024	*		233,000,000

36

Currency	Original Principal Amount		Interest Rate (%)		Issue Date		Maturity Date			Principal Amount Outstanding as of December 31, 2023
BRL		255,500,000		11.21		March 23, 2022		April 3, 2024	*		255,500,000
BRL		253,500,000		11.35		March 21, 2022		April 2, 2024	*		253,500,000
BRL		252,000,000		11.21		March 18, 2022		March 18, 2024	*		252,000,000
BRL		254,000,000		11.07		March 14, 2022		March 14, 2024	*		254,000,000
BRL		252,500,000		10.92		March 11, 2022		March 11, 2024	*		252,500,000
				Subtotal in Original Currency						BRL	12,407,000,000
				Subtotal in Equivalent Amount of Won(4)						W	3,296,912,110,000
EUR		500,000,000		3.63		September 18, 2023		September 18, 2027			500,000,000
EUR		45,000,000		3.75		June 23, 2023		June 23, 2026			45,000,000
EUR		500,000,000		3.63		June 7, 2023		June 7, 2030			500,000,000
EUR		850,000,000		3.62		June 7, 2023		June 7, 2026			850,000,000
EUR		50,000,000		1.38		November 11, 2022		November 24, 2025			50,000,000
EUR		50,000,000		1.38		November 11, 2022		November 24, 2025			50,000,000
EUR		950,000,000		1.38		May 24, 2022		November 24, 2025			950,000,000
EUR		550,000,000		EURIBOR 3M+1.00		May 24, 2022		May 24, 2024	*		550,000,000
EUR		45,000,000		2.63		April 25, 2022		April 25, 2052			45,000,000
EUR		850,000,000		0.00		October 19, 2021		October 19, 2024			850,000,000
EUR		700,000,000		0.83		April 27, 2020		April 27, 2025			700,000,000
EUR		150,000,000		0.14		December 16, 2019		December 16, 2024			150,000,000
EUR		750,000,000		0.38		March 26, 2019		March 26, 2024	*		750,000,000
EUR		20,000,000		1.54		August 23, 2018		August 23, 2028			20,000,000
EUR		30,000,000		1.53		August 13, 2018		August 13, 2028			30,000,000
EUR		25,000,000		1.64		August 6, 2018		August 6, 2030			25,000,000
EUR		25,000,000		1.64		August 6, 2018		August 6, 2030			25,000,000
EUR		30,000,000		3.60		July 19, 2012		July 19, 2027			30,000,000
EUR		117,000,000		3.88		July 12, 2012		July 12, 2032			117,000,000
				Subtotal in Original Currency						EUR	6,237,000,000
				Subtotal in Equivalent Amount of Won(5)						W	8,897,641,830,000
THB		1,580,000,000		1.06		June 9, 2020		June 9, 2025			1,580,000,000
THB		500,000,000		4.78		July 31, 2013		July 31, 2025			500,000,000
THB		1,500,000,000		4.78		July 31, 2013		July 31, 2025			1,500,000,000
				Subtotal in Original Currency						THB	3,580,000,000
				Subtotal in Equivalent Amount of Won(6)						W	134,679,600,000
CHF		200,000,000		0.20		November 14, 2023		November 14, 2028			200,000,000
CHF		150,000,000		0.00		November 27, 2019		May 27, 2025			150,000,000
CHF		300,000,000		0.38		July 11, 2018		July 11, 2024			300,000,000
CHF		250,000,000		0.17		July 18, 2017		July 18, 2025			250,000,000
				Subtotal in Original Currency						CHF	900,000,000
				Subtotal in Equivalent Amount of Won(7)						W	1,374,138,000,000
AUD		75,000,000		6.22		December 4, 2023		December 4, 2038			75,000,000
AUD		77,000,000		6.00		November 27, 2023		November 27, 2043			77,000,000
AUD		63,000,000		5.70		October 6, 2023		October 6, 2043			63,000,000
AUD		60,000,000		5.56		August 8, 2023		August 8, 2038			60,000,000
AUD		73,500,000		5.55		August 2, 2023		August 2, 2043			73,500,000
AUD		350,000,000		BBSW 3M+1.00		June 26, 2023		June 26, 2028			350,000,000
AUD		375,000,000		BBSW 3M+0.85		June 26, 2023		June 26, 2026			375,000,000
AUD		125,000,000		5.10		June 26, 2023		June 26, 2026			125,000,000
AUD		70,000,000		5.40		March 14, 2023		March 14, 2038			70,000,000
AUD		65,000,000		5.46		February 21, 2023		February 21, 2038			65,000,000
AUD		40,000,000		5.90		November 4, 2022		November 4, 2037			40,000,000
AUD		450,000,000		BBSW 3M+1.0		April 7, 2022		April 7, 2027			450,000,000
AUD		200,000,000		3.55		April 7, 2022		April 7, 2025			200,000,000
AUD		60,000,000		2.70		December 22, 2021		December 22, 2036			60,000,000

37

Currency	Original Principal Amount		Interest Rate (%)		Issue Date		Maturity Date			Principal Amount Outstanding as of December 31, 2023
AUD		55,000,000		BBSW+0.80		November 22, 2021		November 22, 2031			55,000,000
AUD		65,000,000		2.65		April 7, 2021		April 7, 2036			65,000,000
AUD		208,000,000		3.00		April 14, 2020		April 16, 2035			208,000,000
AUD		142,900,000		2.51		December 6, 2019		December 6, 2049			142,900,000
AUD		400,000,000		BBSW 3M+0.80		October 8, 2019		October 8, 2024			400,000,000
AUD		34,100,000		0.93		August 29, 2019		August 28, 2024			34,100,000
AUD		500,000,000		BBSW 3M+0.85		May 23, 2019		May 23, 2024	*		500,000,000
AUD		33,800,000		2.20		February 27, 2019		February 22, 2024	*		33,800,000
AUD		40,000,000		3.40		December 8, 2017		December 8, 2024			40,000,000
AUD		60,000,000		3.98		October 10, 2017		October 10, 2027			60,000,000
AUD		100,000,000		4.00		February 14, 2017		June 7, 2027			100,000,000
AUD		50,000,000		4.00		December 15, 2016		June 7, 2027			50,000,000
AUD		200,000,000		4.00		December 7, 2016		June 7, 2027			200,000,000
AUD		21,000,000		5.15		November 24, 2014		November 24, 2029			21,000,000
				Subtotal in Original Currency						AUD	3,993,300,000
				Subtotal in Equivalent Amount of Won(8)						W	3,514,423,464,000
INR		4,100,000,000		4.10		October 16, 2023		October 16, 2028			4,100,000,000
INR		4,100,000,000		4.10		October 16, 2023		October 16, 2030			4,100,000,000
INR		3,250,000,000		7.15		April 18, 2018		April 18, 2025			3,250,000,000
				Subtotal in Original Currency						INR	11,450,000,000
				Subtotal in Equivalent Amount of Won(9)						W	177,475,000,000
CNY		355,000,000		3.00		August 7, 2023		August 7, 2026			355,000,000
CNY		355,000,000		2.56		August 1, 2023		October 8, 2024			355,000,000
CNY		300,000,000		3.01		June 26, 2023		June 26, 2026			300,000,000
CNY		300,000,000		2.95		June 21, 2023		June 21, 2026			300,000,000
CNY		300,000,000		2.97		June 20, 2023		June 20, 2026			300,000,000
CNY		340,000,000		3.27		March 13, 2023		March 13, 2025			340,000,000
CNY		345,000,000		3.50		March 13, 2023		March 13, 2026			345,000,000
CNY		340,000,000		3.52		February 28, 2023		February 28, 2026			340,000,000
CNY		500,000,000		2.77		February 21, 2023		February 21, 2024	*		500,000,000
CNY		254,000,000		3.51		March 18, 2022		March 18, 2024	*		254,000,000
CNY		255,000,000		3.47		March 17, 2022		March 17, 2024	*		255,000,000
CNY		253,000,000		3.38		March 29, 2022		March 29, 2027			253,000,000
CNY		300,000,000		2.85		March 25, 2021		March 25, 2024	*		300,000,000
CNY		1,500,000,000		2.80		March 3, 2021		March 3, 2024	*		1,500,000,000
CNY		270,000,000		3.05		November 5, 2020		November 5, 2025			270,000,000
CNY		200,000,000		3.58		April 23, 2019		April 23, 2024	*		200,000,000
CNY		500,000,000		4.50		January 27, 2014		January 27, 2024	*		500,000,000
				Subtotal in Original Currency						CNY	6,667,000,000
				Subtotal in Equivalent Amount of Won(10)						W	1,205,660,280,000
IDR		700,000,000,000		5.75		March 5, 2021		March 5, 2024	*		700,000,000,000
IDR		705,000,000,000		6.70		December 2, 2019		December 2, 2024			705,000,000,000
IDR		700,000,000,000		6.71		November 25, 2019		November 25, 2024			700,000,000,000
IDR		675,000,000,000		8.00		April 3, 2019		May 15, 2024	*		675,000,000,000
IDR		700,000,000,000		8.00		February 28, 2019		May 15, 2024	*		700,000,000,000
IDR		635,000,000,000		7.25		April 19, 2018		December 7, 2024			635,000,000,000
IDR		640,000,000,000		7.25		April 16, 2018		December 7, 2024			640,000,000,000
IDR		645,000,000,000		7.25		March 12, 2018		December 7, 2024			645,000,000,000
IDR		645,000,000,000		7.25		March 7, 2018		December 7, 2024			645,000,000,000
IDR		685,500,000,000		6.50		March 7, 2018		March 7, 2025			685,500,000,000
IDR		625,000,000,000		7.25		February 5, 2018		December 7, 2024			625,000,000,000
IDR		630,000,000,000		7.25		January 19, 2018		December 7, 2024			630,000,000,000
IDR		670,000,000,000		7.25		December 7, 2017		December 7, 2024			670,000,000,000

38

Currency	Original Principal Amount		Interest Rate (%)		Issue Date		Maturity Date		Principal Amount Outstanding as of December 31, 2023
				Subtotal in Original Currency					IDR	8,655,500,000,000
				Subtotal in Equivalent Amount of Won(11)					W	723,599,800,000
PEN		150,000,000		5.95		April 14, 2023		October 14, 2024		150,000,000
PEN		102,000,000		4.15		December 10, 2019		December 10, 2024		102,000,000
PEN		105,000,000		4.14		November 21, 2019		November 21, 2024		105,000,000
PEN		13,600,000		7.15		November 4, 2011		November 4, 2041		13,600,000
PEN		54,500,000		7.25		October 25, 2011		October 25, 2041		54,500,000
				Subtotal in Original Currency					PEN	425,100,000
				Subtotal in Equivalent Amount of Won(12)					W	148,432,167,000
NZD		60,000,000		3.09		November 24, 2021		November 24, 2026		60,000,000
NZD		60,000,000		2.62		September 15, 2021		September 15, 2031		60,000,000
NZD		54,000,000		2.65		June 8, 2021		June 8, 2031		54,000,000
				Subtotal in Original Currency					NZD	174,000,000
				Subtotal in Equivalent Amount of Won(13)					W	142,062,300,000
ZAR		715,000,000		8.05		September 28, 2021		September 28, 2031		715,000,000
ZAR		600,000,000		8.20		March 19, 2020		March 19, 2030		600,000,000
ZAR		600,000,000		8.43		November 27, 2019		November 27, 2026		600,000,000
ZAR		700,000,000		8.50		May 28, 2019		May 28, 2025		700,000,000
				Subtotal in Original Currency					ZAR	2,615,000,000
				Subtotal in Equivalent Amount of Won(14)					W	181,664,050,000
CAD		65,000,000		3.16		February 16, 2017		February 16, 2032		65,000,000
				Subtotal in Original Currency					CAD	65,000,000
				Subtotal in Equivalent Amount of Won(15)					W	63,351,600,000
GBP		36,000,000		1.93		March 7, 2022		March 7, 2029		36,000,000
				Subtotal in Original Currency					GBP	36,000,000
				Subtotal in Equivalent Amount of Won(16)					W	59,104,440,000
NOK		250,000,000		4.55		June 26, 2013		June 26, 2025		250,000,000
NOK		250,000,000		4.55		June 26, 2013		June 26, 2025		250,000,000
NOK		250,000,000		4.55		June 26, 2013		June 26, 2025		250,000,000
				Subtotal in Original Currency					NOK	750,000,000
				Subtotal in Equivalent Amount of Won(17)					W	94,807,500,000
SEK		250,000,000		1.28		December 11, 2017		December 11, 2024		250,000,000
				Subtotal in Original Currency					SEK	250,000,000
				Subtotal in Equivalent Amount of Won(18)					W	32,250,000,000
CZK		1,140,000,000		1.54		November 14, 2019		November 14, 2024		1,140,000,000
CZK		1,140,000,000		1.52		November 6, 2019		November 6, 2024		1,140,000,000
CZK		1,140,000,000		1.55		November 6, 2019		November 6, 2024		1,140,000,000
				Subtotal in Original Currency					CZK	3,420,000,000
				Subtotal in Equivalent Amount of Won(19)					W	197,539,200,000
PLN		194,000,000		2.12		October 25, 2019		October 25, 2024		194,000,000
				Subtotal in Original Currency					PLN	194,000,000
				Subtotal in Equivalent Amount of Won(20)					W	63,847,340,000
PHP		2,000,000,000		3.70		March 23, 2021		March 23, 2026		2,400,000,000

39

Currency	Original Principal Amount		Interest Rate (%)		Issue Date		Maturity Date		Principal Amount Outstanding as of December 31, 2023
				Subtotal in Original Currency					PHP	2,400,000,000
				Subtotal in Equivalent Amount of Won(21)					W	55,656,000,000
TRY		935,906,503		0.00		November 29, 2023		December 2, 2024		935,906,503
				Subtotal in Original Currency					TRY	935,906,503
				Subtotal in Equivalent Amount of Won(22)					W	40,889,755,116
JPY		7,320,000,000		0.42		November 7, 2022		November 7, 2025		7,320,000,000
JPY		7,300,000,000		0.43		November 4, 2022		November 4, 2025		7,300,000,000
JPY		7,150,000,000		0.26		September 15, 2022		September 15, 2025		7,150,000,000
JPY		7,000,000,000		0.26		September 14, 2022		September 14, 2025		7,000,000,000
JPY		7,000,000,000		0.27		September 13, 2022		September 13, 2025		7,000,000,000
JPY		6,975,000,000		0.25		September 8, 2022		September 8, 2025		6,975,000,000
				Subtotal in Original Currency					JPY	42,745,000,000
				Subtotal in Equivalent Amount of Won(23)					W	390,116,517,000
		Total External Bonds of the Bank in Equivalent Amount of Won							W	65,980,458,473,116

* Repaid on the respective maturity dates.

(1) U.S. dollar amounts are converted to Won amounts at the rate of US$1.00 to Won 1,289.40, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(2) Hong Kong Dollar amounts are converted to Won amounts at the rate of HKD 1.00 to Won 165.06, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(3) Mexican Peso amounts are converted to Won amounts at the rate of MXN 1.00 to Won 75.97, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(4) Brazilian Real amounts are converted to Won amounts at the rate of BRL 1.00 to Won 265.73, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(5) Euro amounts are converted to Won amounts at the rate of EUR 1.00 to Won 1,426.59, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(6) Thai Baht amounts are converted to Won amounts at the rate of THB 1.00 to Won 37.62, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(7) Swiss Franc amounts are converted to Won amounts at the rate of CHF 1.00 to Won 1,526.82, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(8) Australian Dollar amounts are converted to Won amounts at the rate of AUD 1.00 to Won 880.08, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(9) Indian Rupee amounts are converted to Won amounts at the rate of INR 1.00 to Won 15.50, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(10) Chinese Yuan amounts are converted to Won amounts at the rate of CNY 1.00 to Won 180.84, the prevailing market rate on December 29, 2023.

(11) Indonesian Rupiah amounts are converted to Won amounts at the rate of IDR 100.00 to Won 8.36, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(12) Peruvian Sol amounts are converted to Won amounts at the rate of PEN 1.00 to Won 349.17, the prevailing market rate on December 29, 2023.

(13) New Zealand Dollar amounts are converted to Won amounts at the rate of NZD 1.00 to Won 816.45, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(14) South African Rand amounts are converted to Won amounts at the rate of ZAR 1.00 to Won 69.47, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(15) Canadian Dollar amounts are converted to Won amounts at the rate of CAD 1.00 to Won 974.64, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(16) Great Britain Pound amounts are converted to Won amounts at the rate of GBP 1.00 to Won 1,641.79, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(17) Norwegian Krone amounts are converted to Won amounts at the rate of NOK 1.00 to Won 126.41, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(18) Swedish Krona amounts are converted to Won amounts at the rate of SEK 1.00 to Won 129.00, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(19) Czech Koruna amounts are converted to Won amounts at the rate of CZK 1.00 to Won 57.76, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

40

(20) Polish Zloty amounts are converted to Won amounts at the rate of PLN 1.00 to Won 329.11, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(21) Philippine Peso amounts are converted to Won amounts at the rate of PHP 1.00 to Won 23.19, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(22) Turkish Lira amounts are converted to Won amounts at the rate of TRY 1.00 to Won 43.69, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(23) Japanese Yen amounts are converted to Won amounts at the rate of JPY 100.00 to Won 912.66, the market average exchange rate in effect on December 29, 2023, as announced by Seoul Money Brokerage Services, Ltd.

(2) External Borrowings of the Bank

Lender	Classifications	Range of Interest Rates		Range of Years of Issue		Range of Years of Maturity		Principal Amount Outstanding as of December 31, 2023(1)
		(%)						(millions of Won)
MUFG	Borrowings from MUFG		3M Term SOFR +0.69 3M Term SOFR +0.80		2022 2023		2024 2026		386,820 386,820
Bookook Securities	Borrowings from Bookook		3M Term SOFR+0.78		2022		2027		515,760
HSBC	Borrowings from HSBC		3M Term SOFR +0.59 3M Term SOFR +0.75		2022 2023		2025 2026		128,940 257,880
ANZ	Borrowings from ANZ		BBSY 3M+0.74 BBSY 3M+0.89		2022 2022		2024 2025		114,410 660,060
BofA	Borrowings from BofA		3M Term SOFR+0.83		2023		2026		193,410
Long-term Borrowings from Foreign Financial Institution									W2,644,100
Compulsory Loan			3M Term SOFR+0.70		2014		2024		W193,410
Foreign Currency CP			3.61~5.93		2023		2024	W	1,610,461
Others (including foreign banks and Credit Support Annexes)								W	766,571
Total External Borrowings of the Bank								W	5,214,542

(1) Converted to Won amounts at the relevant market average exchange rates in effect on December 29, 2023 as announced by Seoul Money Brokerage Services, Ltd.

B. Internal Debt of the Bank

Title	Range of Interest Rates		Range of Years of Issue		Range of Years of Original Maturity		Principal Amounts Outstanding as of December 31, 2023
	(%)						(millions of Won)
Bonds
Short-term Won-denominated domestic bonds		3.44~4.11		2023		2024	W	15,130,000
Long-term Won-denominated domestic bonds		1.24~5.58		2015~2023		2024~2053		14,470,000
Total Bonds		1.24~5.58		2015~2023		2024~2053		29,600,000
Total Internal Debt							W	29,600,000

Financial Statements and the Auditors

The Minister of Economy and Finance appoints our internal Auditor who is responsible for examining our financial operations and auditing our financial statements and accounting records. Following the resignation of Jong-cheol Kim as our internal Auditor upon completion of his three-year term, which ended on January 24,

41

2024, Kyung-sup Lim, the Director General of our Audit Department, has temporarily assumed the position of our acting internal Auditor.

We prepare our financial statements annually for submission to the Minister of Economy and Finance, accompanied by an opinion of the Auditor. Although we are not legally required to have financial statements audited by external auditors, an independent public accounting firm has audited our separate financial statements since 1983 and consolidated financial statements since 1998. As of the date of this prospectus, our independent auditor is KPMG Samjong Accounting Corp., located at 27th Floor, Gangnam Finance Center, 152 Teheran-ro, Gangnam-gu, Seoul, 06236, Korea, which has audited our separate financial statements as of and for the years ended December 31, 2023 and 2022 included in this prospectus.

Our separate financial statements and information included in this prospectus were prepared under K-IFRS. For a summary of financial statement preparation and significant accounting policies, see “—Notes to Separate Financial Statements as of and for the years ended December 31, 2023 and 2022—Note 2.” These principles and procedures differ in certain material respects from generally accepted accounting principles in the United States.

42

Independent Auditors’ Report

The Board of Directors and Shareholders of

The Export-Import Bank of Korea:

Opinion

We have audited the accompanying separate financial statements of the Export-Import Bank of Korea (the “Bank”), which comprise the separate statements of financial position as of December 31, 2023 and 2022, the separate statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes, comprising material accounting policies and other explanatory information.

In our opinion, the accompanying separate financial statements present fairly, in all material respects, the separate financial position of the Bank as of December 31, 2023 and 2022, and its separate financial performance and its separate cash flows for the years then ended in accordance with Korean International Financial Reporting Standards (“K-IFRS”).

Basis for Opinion

We conducted our audits in accordance with Korean Standards on Auditing (KSAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Separate Financial Statements section of our report. We are independent of the Bank in accordance with the ethical requirements that are relevant to our audit of the separate financial statements in the 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 opinion.

Other Matter

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

Responsibilities of Management and Those Charged with Governance for the Separate 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 Bank’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 Bank or to cease operations, or has no realistic alternative but to do so.

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

Auditors’ 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 auditors’ 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.

43

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, but not for the purpose of expressing an opinion on the effectiveness of the Bank’s internal control.

• 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 Bank’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ 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 auditors’ report. However, future events or conditions may cause the Bank to cease to continue as a going concern.

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

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.

/s/ KPMG Samjong Accounting Corp.

KPMG Samjong Accounting Corp.

Seoul, Korea

March 29, 2024

This report is effective as of March 29, 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 subsequent events or circumstances, if any.

44

THE EXPORT-IMPORT BANK OF KOREA

SEPARATE STATEMENTS OF FINANCIAL POSITION

AS OF DECEMBER 31, 2023 AND 2022

	December 31, 2023			December 31, 2022
	(Korean won in millions)
ASSETS:
Cash and due from financial institutions (Notes 4, 5 and 7)	W	12,591,124		W	9,931,012
Financial assets at fair value through profit or loss (“FVTPL”) (Notes 4, 5, 8 and 20)		3,715,536			4,172,754
Hedging derivative assets (Notes 4, 5 and 20)		611,960			329,210
Loans at amortized cost (Notes 4, 5, 10 and 37)		87,777,261			89,300,057
Financial investments (Notes 4, 5 and 9)		15,413,465			13,363,826
Investments in associates and subsidiaries (Note 11)		2,005,626			1,935,869
Tangible assets, net (Note 12)		292,735			273,003
Intangible assets, net (Note 13)		46,337			42,813
Deferred tax assets (Note 34)		987,104			867,269
Retirement benefit assets, net (Note 18)		28,431			45,142
Other assets (Notes 4, 5, 14 and 37)		1,924,867			1,808,995
	W	125,394,449		W	122,069,950
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Financial liabilities at FVTPL (Notes 4, 5 and 20)	W	2,122,804		W	2,513,487
Hedging derivative liabilities (Notes 4, 5 and 20)		1,514,208			2,356,908
Borrowings (Notes 4, 5 and 15)		5,532,198			10,112,740
Debentures (Notes 4, 5 and 16)		93,256,543			87,791,623
Provisions (Note 17)		1,489,976			1,092,435
Other liabilities (Notes 4, 5, 19 and 37)		3,527,917			2,767,208
		107,443,644			106,634,401
STOCKHOLDERS’ EQUITY:
Capital stock (Note 1 and 21)		14,773,254			12,773,254
Capital adjustments		(143,446	)		(133,840	)
Other components of equity (Notes 20 and 22)		682,285			744,756
Retained earnings (Note 23)
(Regulatory reserve for loan losses as of December 31, 2023 and 2022:W275,620 million andW239,710 million)		2,638,712			2,051,379
		17,950,805			15,435,549
	W	125,394,449		W	122,069,950

See accompanying notes to separate financial statements.

45

THE EXPORT-IMPORT BANK OF KOREA

SEPARATE STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

	2023			2022
	(Korean won in millions)
OPERATING INCOME:
Net interest income (Notes 24 and 37):
Interest income	W	5,856,490		W	3,070,500
Interest expenses		(4,971,276	)		(2,118,108	)
		885,214			952,392
Net commission income (Notes 25 and 37):
Commission income		464,744			362,932
Commission expenses		(30,189	)		(26,194	)
		434,555			336,738
Dividend income (Note 26)		61,970			60,627
Net gain (loss) on financial assets at FVTPL (Note 27)		209,808			(305,507	)
Net gain (loss) on hedging derivative assets (Notes 20 and 28)		2,013,401			(3,223,739	)
Net gain (loss) on financial investments (Note 29)		726			(47	)
Net gain (loss) on foreign exchange transaction		(1,062,884	)		514,938
Net other operating income (expenses) (Note 30)		(931,214	)		3,173,480
Additional impairment loss on credit (Note 31 and 37)		(279,070	)		(677,995	)
General and administrative expenses (Note 32)		(271,357	)		(261,423	)
Total operating income		1,061,149			569,464
NON-OPERATING INCOME (Note 33):
Net gain (loss) on investments in associates and subsidiaries		7,177			5,545
Net other non-operating income (expenses)		(6,982	)		(4,143	)
		195			1,402
PROFIT BEFORE INCOME TAX		1,061,344			570,866
INCOME TAX EXPENSES (Note 34)		(338,592	)		(183,955	)
PROFIT FOR THE YEAR		722,752			386,911
(Profit for the year adjusted for regulatory reserve for loan losses for the years ended December 31, 2023 and 2022:W987,007 million andW351,001 million) (Note 23)
OTHER COMPREHENSIVE INCOME (LOSS) FOR THE YEAR (Note 22)
Items not reclassified subsequently to profit or loss:
Net gain (loss) on equity securities at FVOCI		(146,524	)		37,176
Remeasurement of net defined benefit liabilities		(10,329	)		23,879
Income tax effect		37,512			(2,878	)
Items that are or may be reclassified subsequently to profit or loss:
Net gain (loss) on debt securities at FVOCI		63,073			(302,298	)
Net gain (loss) on valuation of cash flow hedge		11,177			46,612
Income tax effect		(17,380	)		59,596
		(62,471	)		(137,913	)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	W	660,281		W	248,998

See accompanying notes to separate financial statements.

46

THE EXPORT-IMPORT BANK OF KOREA

SEPARATE STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

						Other components of equity
	Capital stock		Capital adjustments			Gain (loss) on valuation of financial assets at FVOCI			Gain (loss) on valuation of cash- flow hedge		Remeasurement, net of defined benefit liabilities			Gain (loss) on disposal of financial assets at FVOCI			Retained earnings			Total
	(Korean won in millions)
January 1, 2022	W	12,748,254	W	(133,716	)	W	930,776		W	2,968	W	18,865		W	(69,940	)	W	1,855,724		W	15,352,931
Payment of dividends		—		—			—			—		—			—			(191,256	)		(191,256	)
Paid-in Capital Increase		25,000		(124	)		—			—		—			—			—			24,876
Total comprehensive Income																					248,998
Profit for the year		—		—			—			—		—			—			386,911			386,911
Other comprehensive income (loss):																					(137,913	)
Net loss on valuation of financial assets at FVOCI, net of tax		—		—			(268,456	)		—		—			—			—			(268,456	)
Net gain on valuation of cash flow hedge, net of tax		—		—			—			35,837		—			—			—			35,837
Remeasurement elements of defined benefit plans, net of tax		—		—			—			—		18,589			—			—			18,589
Net gain on disposal of financial assets at FVOCI, net of tax		—		—			—			—		—			76,117			—			76,117
December 31, 2022	W	12,773,254	W	(133,840	)	W	662,320		W	38,805	W	37,454		W	6,177		W	2,051,379		W	15,435,549
January 1, 2023	W	12,773,254	W	(133,840	)	W	662,320		W	38,805	W	37,454		W	6,177		W	2,051,379		W	15,435,549
Payment of dividends		—					—			—		—			—			(135,419	)		(135,419	)
Paid-in Capital Increase		2,000,000		(9,606	)		—			—		—			—			—			1,990,394
Total comprehensive Income																					660,281
Profit for the year		—					—			—		—			—			722,752			722,752
Other comprehensive income (loss):																					(62,471	)
Net loss on valuation of financial assets at FVOCI, net of tax		—					(276,705	)		—		—			—			—			(276,705	)
Net gain on valuation of cash flow hedge, net of tax		—					—			8,646		—			—			—			8,646
Remeasurement elements of defined benefit plans, net of tax		—					—			—		(7,894	)		—			—			(7,894	)
Net gain on disposal of financial assets at FVOCI, net of tax		—					—			—		—			213,482			—			213,482
December 31, 2023	W	14,773,254	W	(143,446	)	W	385,615		W	47,451	W	29,560		W	219,659		W	2,638,712		W	17,950,805

See accompanying notes to separate financial statements.

47

THE EXPORT-IMPORT BANK OF KOREA

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:
Profit for the year	W	722,752		W	386,911
Adjustments for:
Income tax expense		338,591			183,954
Interest income		(5,856,490	)		(3,070,500	)
Interest expenses		4,971,276			2,118,108
Dividend and distribution income		(91,254	)		(80,566	)
Dividend received from subsidiaries and associates		(7,177	)		(5,545	)
Loss on financial assets at FVTPL		27,367			16,362
Loss on financial assets at FVOCI		532			144
Transfer to derivatives’ credit risk provision		11,738			5,982
Loss on foreign exchange transactions		2,678,304			1,922,433
Impairment loss on credit		279,070			677,995
Loss on fair value hedged items		1,210,415			273,771
Depreciation and amortization		20,672			18,674
Loss on disposals of tangible, intangible and other assets		5			3
Loss on valuation of derivative assets for trading		563,390			2,330,999
Loss on valuation of derivative assets for hedging		85,975			2,324,297
Increase in other provisions		6			60
Retirement benefits		6,262			11,064
Gain on financial assets at FVTPL		(106,707	)		(36,319	)
Gain on financial assets at FVOCI		(1,258	)		(97	)
Reversal of derivatives’ credit risk provision		(13,834	)		(17,165	)
Gain on foreign exchange transactions		(1,615,429	)		(2,437,371	)
Gain on fair value hedged items		(282,391	)		(3,439,246	)
Gain on valuation of derivative assets for trading		(618,916	)		(1,567,207	)
Gain on valuation of derivative assets for hedging		(910,713	)		(297,788	)
Gain on disposals of tangible, intangible and other assets		(44	)		(86	)
		689,390			(1,068,044	)
Changes in operating assets and liabilities:
Due from financial institutions		855,184			(3,865,143	)
Financial assets and liabilities at FVTPL		199,438			(533,003	)
Hedging derivative net assets		(287,439	)		(79,832	)
Loans at amortized cost		2,965,877			(8,988,823	)
Other assets		(111,967	)		(935,202	)
Provisions		7,399			40,231
Payment of retirement benefits		119			(18,721	)
Other liabilities		(1,000,867	)		377,869
		2,627,744			(14,002,624	)
Payment of income tax		(97,220	)		(10,322	)
Interest received		4,523,143			2,781,824
Interest paid		(3,021,996	)		(1,621,718	)
Dividend received		98,431			86,111
Net cash provided by (used in) operating activities		5,542,244			(13,447,862	)

48

THE EXPORT-IMPORT BANK OF KOREA

SEPARATE STATEMENTS OF CASH FLOWS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

	2023			2022
	(Korean won in millions)
CASH FLOWS FROM INVESTING ACTIVITIES:
Disposal of financial investments	W	3,870,084		W	1,539,545
Disposal of investments in associates and subsidiaries		2,145			2,981
Disposal of tangible assets		82			161
Acquisition of financial investments		(2,608,149	)		(1,977,923	)
Acquisition of investments in associates and subsidiaries		(71,902	)		(373,697	)
Acquisition of tangible assets		(30,050	)		(11,783	)
Acquisition of intangible assets		(13,920	)		(17,966	)
Net cash provided by (used in) investing activities		1,148,290			(838,682	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings		1,807,700			11,683,576
Proceeds from debentures		41,971,865			20,853,080
Paid-in capital increase		—			25,000
Increase in deposits		—			2
Decrease in call money		(45,745	)		(752,829	)
Repayment of borrowings		(6,632,506	)		(6,700,287	)
Repayment of debentures		(39,864,259	)		(9,245,611	)
Expense related to paid-in capital increases		(9,607	)		(124	)
Payment of dividends		(135,419	)		(191,255	)
Decrease in deposits		—			(2	)
Net cash provided by (used in) financing activities		(2,907,971	)		15,671,550
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		3,782,563			1,385,006
CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR		4,781,957			3,146,957
EFFECTS OF FOREIGN EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS IN FOREIGN CURRENCIES		(299,201	)		249,994
CASH AND CASH EQUIVALENTS, END OF THE YEAR (Note 7 and 35)	W	8,265,319		W	4,781,957

See accompanying notes to separate financial statements.

49

THE EXPORT-IMPORT BANK OF KOREA

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

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

1. GENERAL:

(1) Summary of The Export-Import Bank of Korea

The Export-Import Bank of Korea (the “Bank”) was established in 1976 as a special financial institution under The Export-Import Bank of Korea Act (the “EXIM Bank Act”) to grant financial facilities for overseas trade (i.e., export and import), investments and resources development activities. As of December 31, 2023, the Bank operates a head office in Seoul, a domestic subsidiary, ten domestic branches, three domestic offices, five overseas subsidiaries and twenty-four overseas offices.

The Bank’s authorized capital isW15,000,000 million, and through numerous capital increases since the establishment, its paid-in capital isW14,773,254 million as of December 31, 2023. The Government of the Republic of Korea (the “Government”), the Bank of Korea, and the Korea Development Bank hold 73.02%, 7.89%, and 19.09%, respectively, of the ownership of the Bank as of December 31, 2023.

The Bank, as a trustee of the Government, has managed the Economic Development Cooperation Fund (“EDCF”) since June 1987 and the Inter-Korean Cooperation Fund (“IKCF”) since March 1991. These funds are accounted for separately and are not included in the Bank’s separate financial statements. The Bank receives fees from the Government for the trustee services.

(2) Summary of subsidiaries and associates

1) Subsidiaries of the Bank as of December 31, 2023 and 2022 are as follows:

(December 31, 2023)

Subsidiaries	Location	Capital stock		Main business	Number of shares owned (in shares)		Percentage of owner- ship (%)		Financial statements as of
KEXIM Bank UK Limited	United Kingdom	GBP	81mil.	Finance		81,283,897		100.00		Dec. 31, 2023
KEXIM Vietnam Leasing Co. (*1)	Vietnam	USD	53mil.	Finance		—		100.00		Dec. 31, 2023
PT.KOEXIM Mandiri Finance(*2)	Indonesia	IDR	806,433mil.	Finance		3,065		97.52		Dec. 31, 2023
KEXIM Asia Limited	Hong Kong	USD	130mil.	Finance		130,000,000		100.00		Dec. 31, 2023
KEXIM Global(Singapore) Ltd	Singapore	USD	300mil.	Finance		300,000,000		100.00		Dec. 31, 2023
EXIM PLUS Co., Ltd.	Korea	KRW	950mil.	Service		190,000		100.00		Dec. 31, 2023

(*1) This entity does not issue share certificates.

(*2) Convertible loan recognized as capital for an Indonesian corporation located in Indonesia is included.

(December 31, 2022)

Subsidiaries	Location	Capital stock		Main business	Number of shares owned (in shares)		Percentage of owner- ship (%)		Financial statements as of
KEXIM Bank UK Limited	United Kingdom	GBP	81mil.	Finance		81,283,897		100.00		Dec. 31, 2022
KEXIM Vietnam Leasing Co. (*1)	Vietnam	USD	53mil.	Finance		—		100.00		Dec. 31, 2022
PT.KOEXIM Mandiri Finance	Indonesia	IDR	52,000mil.	Finance		442		85.00		Dec. 31, 2022
KEXIM Asia Limited	Hong Kong	USD	130mil.	Finance		130,000,000		100.00		Dec. 31, 2022
KEXIM Global(Singapore) Ltd	Singapore	USD	300mil.	Finance		300,000,000		100.00		Dec. 31, 2022
EXIM PLUS Co., Ltd.	Korea	KRW	950mil.	Service		190,000		100.00		Dec. 31, 2022

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(*1) This entity does not issue share certificates.

2) Associates of the Bank as of December 31, 2023 and 2022 are as follows:

(December 31, 2023)

Associates	Location	Capital stock		Main business	Number of shares owned (in shares)		Percentage of owner- ship (%)		Financial statements as of
Credit Guarantee and Investment Fund	Philippines	USD	1,158mil.	Financial service		171,400,000		14.80		Dec. 31, 2023
KTB Newlake Global Healthcare PEF	Korea	KRW	13,350mil.	Financial service		3,336,768,385		24.99		Dec. 31, 2023
Korea Aerospace Industries. Ltd.	Korea	KRW	611,453mil.	Manufacturing		25,745,964		26.41		Dec. 31, 2023
KB-Badgers Future Mobility ESG Fund I	Korea	KRW	18,766mil.	Financial service		4,265,000,000		22.73		Dec. 31, 2023
WWG Green New Deal PEF	Korea	KRW	13,900mil.	Financial service		3,475,000,000		25.00		Dec. 31, 2023
Corporate Structure Innovation PEF IV	Korea	KRW	2,450mil.	Financial service		543,900,000		22.20		Dec. 31, 2023

(December 31, 2022)

Associates	Location	Capital stock		Main business	Number of shares owned (in shares)		Percentage of owner- ship (%)		Financial statements as of
Credit Guarantee and Investment Fund	Philippines	USD	1,149mil.	Financial service		171,400,000		14.92		Dec. 31, 2022
KTB Newlake Global Healthcare PEF	Korea	KRW	21,930mil.	Financial service		5,481,550,532		25.00		Dec. 31, 2022
Korea Aerospace Industries. Ltd.	Korea	KRW	487,376mil.	Manufacturing		25,745,964		26.41		Dec. 31, 2022
Daewoo Shipbuilding & Marine Engineering Co., Ltd. (*1)	Korea	KRW	541,453mil.	Shipbuilding		—		—		Dec. 31, 2022
KB-Badgers Future Mobility ESG Fund I	Korea	KRW	5,225mil.	Financial service		1,187,500,000		22.73		Dec. 31, 2022

(*1) During the year, the Bank has assessed that there is no significant influence considering potential voting rights and equity ratio and the entity is excluded from the associates.

2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES:

(1) Basis of Financial Statement Presentation

The Bank’s separate financial statements are prepared under Korean International Financial Reporting Standards (“K-IFRS”).

The Bank’s financial statements are separate financial statements in accordance with K-IFRS No. 1027 ‘Separate Financial Statements’.

(2) Basis of measurement

The separate financial statements have been prepared on the historical cost basis, except for the following material items in the statement of financial position:

• Derivative financial instruments measured at fair value

• Financial assets measured at fair value through profit or loss

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• Financial assets measured at fair value through other comprehensive income

• Financial assets and liabilities designated as hedged items in a fair value hedge accounting of which changes in fair value attributable to the hedged risk are recognized in profit or loss

• Liabilities for defined benefit plans, which are recognized as net of the total present value of defined benefit obligations less the fair value of plan assets

(3) Functional and presentation currency

These separate financial statements are presented in Korean won, which is the currency of the primary economic environment in which the Bank operates.

(4) Significant Estimates and Judgments

The preparation of separate financial statements requires the application of accounting policies and certain critical accounting estimates and assumptions may have a significant impact on assets (liabilities) and income (expenses). The management’s estimate may differ from the actual outcome if the management’s estimate and assumption based on its best judgment at the reporting date are different from an actual environment.

Estimates and assumptions are continually evaluated and the change in an accounting estimate is recognized prospectively by including it in profit or loss in the period of the change, if the change affects that period only, or the period of the change and future periods, if the change affects both.

Uncertainty in estimates and assumptions with significant risk that will result in material adjustment are as follows:

1) Fair value of financial instruments

The fair value of financial instruments where no active market exists or where quoted prices are not otherwise available are determined by using valuation techniques. Financial instruments that are not actively traded in the market and with less transparent market price, will have less objective fair value and will require judgment in liquidity, concentration, uncertainty in market factors and assumption in price determination and other risks.

As described in the significant accounting policies ‘Recognition and Measurement of Financial Instruments’ diverse valuation techniques are used to determine the fair value of financial instruments, from general market accepted valuation model to internally developed valuation model that incorporates various types of assumptions and variables.

2) Provision of credit losses (allowances for loan losses, provisions for acceptances and guarantees, financial guarantee contracts and unused loan commitments)

The Bank recognizes credit loss allowance for expected credit losses on debt instruments, loans and receivables that are measured at amortized cost, loan commitments and financial guarantee contracts in accordance with K- IFRS No. 1109 ‘Financial Instruments’. The allowance is determined by techniques, assumptions and input variables used by the Bank to measure expected future cash flows of individual financial instruments and to measure expected credit losses in a collective manner.

3) Defined benefit obligation

The present value of defined benefit obligations is measured by the independent actuaries using projected unit credit method. It is determined by actuarial assumptions and variables such as future increases in salaries, rate of retirement, discount rate and others.

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4) Income taxes

The Bank has recognized current and deferred taxes that reflect tax consequences based on the best estimates in which the Bank expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. However, actual income taxes in the future may not be identical to the recognized deferred tax assets and liabilities, and this difference can affect current and deferred tax at the period when the final tax effect is determined.

5) Hedging relationship

The Bank expects a high hedge effectiveness throughout the hedging period in designating the hedging relationship and it is probable that the hedged transaction will be highly probable in the cash flow hedge.

(5) Changes in Accounting Policies

The Bank has adopted the same accounting policies that applied to the separate financial statements as of and for the year ended December 31, 2022, except for the application of the amended standards first effective from January 1, 2023, which are explained below.

1) K-IFRS No.1001 Presentation of Financial Statements – Disclosure of Accounting Policies

The amendments define and require entities to disclose their material accounting policy information. The amendments do not have a significant impact on the financial statements.

2) K-IFRS No.1001 Presentation of Financial Statements – Disclosure of gain or loss on valuation of financial liabilities subject to adjustment of exercise price

If the entire or a part of financial instrument, whose exercise price is subject to change due to the issuer’s share price, is classified as a financial liability, the carrying amount of the financial liability and related gains and losses shall be disclosed. The amendments do not have a significant impact on the financial statements.

3) K-IFRS No.1008 Accounting Policies, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates

The amendments define accounting estimates and clarify how to distinguish them from changes in accounting policies. The amendments do not have a significant impact on the financial statements.

4) K-IFRS No.1012 Income Taxes – Deferred Tax related to Assets and Liabilities arising from a Single Transaction

The amendments include an additional condition to the exemption to initial recognition of an asset or liability that a transaction does not give rise to equal taxable and deductible temporary differences at the time of the transaction. The amendments do not have a significant impact on the financial statements.

5) K-IFRS No.1012 Income Taxes – Global Minimum Tax

In accordance with the global minimum tax legislation, The Bank will be liable to pay top-up tax for the difference between the effective tax rate for each jurisdiction and the 15% minimum rate. Accordingly, The Bank is expected to be subject to the global minimum tax legislation. Since the legislation is scheduled to be effective from January 1, 2024, there is no impact on current tax expense as of December 31, 2023. Also, The Bank applies the exception to recognizing and disclosing information about deferred tax assets and liabilities related to global minimum tax legislation.

53

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(1) General

The significant accounting policies applied in the preparation of these separate financial statements after transition to K-IFRS are set out below.

(2) Investments in subsidiaries and associates

The accompanying separate financial statements have been prepared on a stand-alone basis in accordance with K-IFRS No.1027, ‘Separate Financial Statements’. The Bank’s investments in subsidiaries and associates are recorded at cost in accordance with K-IFRS No.1027. Dividend received from its subsidiaries and associates is recognized in profit or loss when the Bank is entitled to receive the dividend.

(3) Foreign Currency

1) Foreign currency transactions

In preparing the separate financial statements of the Bank, transactions in currencies other than the Bank’s functional currency (foreign currencies) are recorded by applying the rates of exchange at the dates of the transactions.

At the end of each reporting period foreign currency monetary items are translated using the closing rate which is the spot exchange rate at the end of the reporting period. Non-monetary items that are measured at fair value in a foreign currency are translated using the spot exchange rates at the date when the fair value was determined and non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the spot exchange rate at the date of the transaction. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognized in profit or loss in the period in which they arise. When gains or losses on a non-monetary item are recognized in other comprehensive income, any exchange component of those gains or losses are recognized in other comprehensive income. Conversely, when gains or losses on a non-monetary item are recognized in profit or loss, any exchange component of those gains or losses are recognized in profit or loss.

2) Foreign operations

The results and financial position of all foreign operations, whose functional currency differs from the Bank’s presentation currency, are translated into the Bank’s presentation currency using the following procedures;

Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position. Income and expenses for statement of comprehensive income presented are translated at average exchange rates for the period.

Any fair value adjustments to the carrying amounts of assets and liabilities arising from the acquisition of that foreign operation are treated as assets and liabilities of the foreign operation. Thus, they are expressed in the functional currency of the foreign operation and are translated into the presentation currency at the closing rate.

On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, are reclassified from equity to profit or loss (as a reclassification adjustment) when the gains or losses on disposal are recognized. On the partial disposal of a subsidiary that includes a foreign operation, the Bank reattributes the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income to the non-controlling interests in that foreign operation. In any other partial disposal of a foreign operation, the Bank reclassifies to profit or loss only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income.

54

(4) Cash and cash equivalents

Cash and cash equivalents include cash on hand, foreign currency, and highly liquid short-term investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value.

(5) Non-derivative Financial Assets

Financial assets are recognized when the Bank becomes a party to the contractual provisions of the instrument. In addition, a regular way purchase or sale (a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the market concerned) is recognized on the trade date.

A financial asset is measured initially at its fair value plus, for an item not at Fair Value Through Profit or Loss (“FVTPL”), transaction costs that are directly attributable to its acquisition of the financial asset. Transaction costs on the financial assets at FVTPL that are directly attributable to the acquisition are recognized in profit or loss as incurred.

1) Financial assets designated at FVTPL

Financial assets can be irrevocably designated as measured at FVTPL despite of classification standards stated below, if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise from measuring assets or liabilities or recognizing the gains or losses on them on different bases.

2) Equity instruments

For the equity instruments that are not held for trading, at initial recognition, the Bank may make an irrevocable election to present subsequent changes in fair value in other comprehensive income. Equity instruments that are not classified as financial assets at Fair Value through Other Comprehensive Income (“FVOCI”) are classified as financial assets at FVTPL.

The Bank subsequently measures all equity investments at fair value. Valuation gains or losses of the equity instruments that are classified as financial assets at FVOCI previously recognized as other comprehensive income is not reclassified as profit or loss on derecognition. The Bank recognizes dividends in profit or loss when the Bank’s right to receive payments of the dividend is established.

Valuation gains or losses due to changes in fair value of the financial assets at FVTPL are recognized as gains or losses on financial assets at FVTPL. Impairment loss (reversal) on equity instruments at FVOCI is not recognized separately.

3) Debt instruments

Subsequent measurement of debt instruments depends on the Bank’s business model in which the asset is managed and the contractual cash flow characteristics of the asset. Debt instruments are classified as financial assets at amortized cost, at FVOCI, or at FVTPL. Debt instruments are reclassified only when the Bank’s business model changes.

① Financial assets at amortized cost

Assets that are held within a business model whose objective is to hold assets to collect contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Impairment losses, and gains or losses on derecognition of the financial assets at amortized cost are recognized in profit or loss. Interest income on the effective interest method is included in the ‘Interest income’ in the separate statement of comprehensive income.

55

② Financial assets at FVOCI

Assets that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Other than impairment losses, interest income amortized using effective interest method and foreign exchange differences, gains or losses of the financial assets at FVOCI are recognized as other comprehensive income in equity. On derecognition, gains or losses accumulated in other comprehensive income are reclassified to profit or loss. The interest income on the effective interest method is included in the ‘Interest income’ in the separate statement of comprehensive income. Foreign exchange differences and impairment losses are included in the ‘Net foreign currency transaction gain’ and ‘Impairment loss on credit’ in the separate statement of comprehensive income, respectively.

③ Financial assets at FVTPL

Debt securities other than financial assets at amortized costs or FVOCI are classified at FVTPL. Unless hedge accounting is applied, gains or losses from financial assets at FVTPL are recognized as profit or loss and are included in ‘Net gain on financial assets at fair value through profit or loss’ in the separate statement of comprehensive income.

4) Embedded derivatives

Financial assets with embedded derivatives are classified regarding the entire hybrid contract, and the embedded derivatives are not separately recognized. The entire hybrid contract is considered when it is determined whether the contractual cash flows represent solely payments of principal and interest.

5) Derecognition of financial assets

The Bank derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Bank is recognized as a separate asset or liability.

If the Bank retains substantially all the risks and rewards of ownership of the transferred financial assets, the Bank continues to recognize the transferred financial assets and recognizes financial liabilities for the consideration received.

6) Offsetting

Financial assets and financial liabilities are offset and the net amount is presented in the separate statement of financial position only when the Bank currently has a legally enforceable right to set off the recognized amounts, and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

(6) Derivative Financial Instruments

Derivatives are initially recognized at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.

1) Hedge accounting

The Bank holds forward exchange contracts, interest rate swaps, currency swaps and other derivative contracts to manage interest rate risk and foreign exchange risk. The Bank designated derivatives as hedging

56

instruments to hedge the risk of changes in the fair value of assets, liabilities or firm commitments (a fair value hedge) and foreign currency risk of highly probable forecasted transactions or firm commitments (a cash flow hedge).

On initial designation of the hedge, the Bank formally documents the relationship between the hedging instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship.

① Fair value hedge

Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognized in profit or loss. The gain or loss from remeasuring the hedging instrument at fair value for a derivative hedging instrument and the gain or loss on the hedged item attributable to the hedged risk are recognized in the separate statement of comprehensive income, in net gain (loss) on hedging derivative assets and net other operating income (expenses), respectively.

The Bank discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised, or if the hedge no longer meets the criteria. Any adjustment arising from G/L on the hedged item attributable to the hedged risk is amortized to profit or loss from the date the hedge accounting is discontinued.

② Cash flow hedge

When a derivative is designated to hedge the variability in cash flows attributable to a particular risk associated with a recognized asset or liability or a highly probable forecasted transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income, net of tax, and presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss on the hedging instrument that has been recognized in other comprehensive income is reclassified to profit or loss in the periods during which the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, then the balance in other comprehensive income is recognized immediately in profit or loss.

③ Net investment hedge

The portion of the change in fair value of a financial instrument designated as a hedging instrument that meets the requirements for hedge accounting for a net investment in a foreign operation is recognized in other comprehensive income and the ineffective portion of the hedge is recognized in profit or loss. The portion recognized as other comprehensive income that is effective as a hedge is recognized in the statement of comprehensive income as a result of reclassification adjustments in accordance with K-IFRS No. 1021, ‘Effect of Changes in Foreign Exchange Rates’ at the time of disposing of its overseas operations or disposing of a portion of its overseas operations to profit or loss.

2) Other derivative financial instruments

Changes in the fair value of other derivative financial instrument not designated as a hedging instrument are recognized immediately in profit or loss.

3) Unobservable valuation differences at initial recognition

Any difference between the fair value of over the counter derivatives at initial recognition and the amount that would be determined at that date using a valuation technique in a situation in which the valuation is

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dependent on unobservable parameters is not recognized in profit or loss but is recognized on a straight-line basis over the life of the instrument or immediately when the fair value becomes observable.

(7) Impairment: Financial assets

The Bank measures expected credit loss and recognizes loss allowance at the end of the reporting period for financial assets measured at amortized cost and fair value through other comprehensive income with the exception of financial asset measured at fair value through profit or loss.

Expected credit losses are a probability-weighted estimate of credit losses (i.e. the present value of all cash shortfalls) over the expected life of the financial instrument. The Bank measures expected credit losses by reflecting reasonable and supportable information that is reasonably available at the reporting date without undue cost or effort, including information about past events, current conditions and forecasts of future economic conditions.

The Bank uses the following three measurement techniques in accordance with K-IFRS:

• General approach: for financial assets and off-balance-sheet unused credit line that are not applied below two approaches

• Credit-impaired approach: for purchased or originated credit-impaired financial assets

Different measurement approaches are applied depending on significant increase in credit risk. 12 months expected credit losses is recognized when credit risk has not significantly increased since initial recognition. A loss allowance at an amount equal to lifetime expected credit losses is recognized when credit risk has significantly increased since initial recognition. Lifetime is presumed to be a period to the contractual maturity date of a financial asset (the expected life of the financial asset).

One or more of the following items is deemed significant increase in credit risk. When the contractual cash flows of a financial asset are renegotiated or otherwise modified, the Bank determines whether the credit risk has increased significantly since initial recognition using the following information.

• more than 30 days past due;

• decline in credit rating at period end by more than certain notches as compared to that at initial recognition;

• the soundness of the assets is under precautionary from the grade table by Korean Financial Supervisory service

The Bank generally deems one or more of the following items credit-impaired:

• no less than 90 days past due

• legal proceedings related to collection

• a borrower that has received a credit-warning from Korea Credit Information Services

• corporate borrowers that are considered impaired (internally rating S, D, or F)

• a borrower with the external auditor’s opinion that is qualified or disclaimer

• negative capital and

• debt restructuring.

1) Forward-looking information

The Bank uses forward-looking information, when it measures expected credit losses.

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The Bank assumes ‘probability of default’(PD), which is one of the risk components, has a certain correlation with the business cycle and calculates the expected credit loss by reflecting the forward-looking information with macroeconomic variables on the measurement inputs.

2) Measuring expected credit losses on financial assets at amortized cost

The amount of the loss on financial assets at amortized cost is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate.

The Bank estimates expected future cash flows for financial assets that are individually significant (individual assessment of impairment).

For financial assets that are not individually significant, the Bank collectively estimates expected credit loss by grouping loans with homogeneous credit risk profile (collective assessment of impairment).

① Individual assessment of impairment

Individual assessment of impairment losses is calculated using management’s best estimate on present value of expected future cash flows. The Bank uses all the available information including operating cash flow of the borrower and net realizable value of any collateral held.

② Collective assessment of impairment

Collective assessment of loss allowance involves historical loss experience along with incorporation of forward-looking information. Such process incorporates factors such as type of collateral, product and borrowers, credit rating, size of portfolio and recovery period and applies ‘probability of default’(PD) on a group of assets and ‘loss given default’(LGD) by type of recovery method. Also, the expected credit loss model involves certain assumption to determine input based on loss experience and forward-looking information. These models and assumptions are periodically reviewed to reduce gap between loss estimate and actual loss experience.

Lifetime expected credit loss as at the end of the reporting period is calculated by product based on the carrying amount net of expected repayment, PD for each period and LGD adjusted by change in carrying amount.

3) Measuring expected credit losses on financial assets at fair value through other comprehensive income Measuring method of expected credit losses on financial assets at fair value through other comprehensive income is equal to the method of financial assets at amortized cost, except for loss allowances that are recognized as other comprehensive income. Amounts recognized in other comprehensive income for sale or repayment of financial assets at fair value through other comprehensive income are reclassified to profit or loss.

(8) Tangible assets

1) Recognition and measurement

All property and equipment that qualify for recognition as an asset are measured at their cost and subsequently carried at their cost less any accumulated depreciation and any accumulated impairment losses.

The cost of property and equipment includes any costs 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 and the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

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Subsequent expenditures are capitalized only when they prolong the useful life or enhance values of the assets but the costs of the day-to-day servicing of the assets such as repair and maintenance costs are recognized in profit or loss as incurred. If part of an item of an asset has a useful life different from that of the entire asset, it is recognized as a separate asset.

2) Depreciation

Land is not depreciated whereas other property and equipment are depreciated using the method that reflects the pattern in which the asset’s future economic benefits are expected to be consumed by the Bank. The depreciable amount of an asset is determined after deducting its residual value.

The depreciation method is straight-line and estimated useful lives of the assets are as follows.

Property and equipment	Estimated useful lives
Buildings and structures	10–60 years
Leasehold Improvements	5 years
Vehicles	4 years
Tools, furniture and fixtures	4–20 years

The residual value, the useful life and the depreciation method applied to an asset are reviewed at least at each financial year-end and, if expectations differ from previous estimates or if there has been a significant change in the expected pattern of consumption of the future economic benefits embodied in the asset, the changes are accounted for as a change in an accounting estimate.

(9) Intangible assets

Intangible assets are measured initially at cost and subsequently carried at its cost less any accumulated amortization and any accumulated impairment losses.

Intangible assets are amortized using the straight-line method with no residual value over their estimated useful economic life since the assets are available for use.

Intangible assets	Estimated useful lives
Software	5 years
System development costs	5 years

The amortization period and the amortization method for intangible assets with a definite useful life are reviewed at least at each financial year-end. The useful life of an intangible asset that is not being amortized is reviewed each period to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. If there is any change, it is accounted for as a change in an accounting estimate.

(10) Impairment of non-financial assets

The Bank assesses at the end of each reporting period whether there is any indication that a non-financial asset, except for deferred tax assets, assets arising from employee benefits and non-current assets (or group of assets to be sold) classified as held for sale, may be impaired. If any such indication exists, the Bank estimates the recoverable amount of the asset. However, irrespective of whether there is any indication of impairment, the Bank tests goodwill acquired in a business combination, an intangible asset with an indefinite useful life and an intangible asset not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount.

The recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the Bank determines the recoverable amount of the cash-generating unit to which the asset belongs (the asset’s cash-generating unit).

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The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. 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 profit or loss.

(11) Financial liabilities at FVTPL

Financial liabilities at FVTPL include contingent consideration that may be paid by an acquirer as part of a business combination to which K-IFRS No.1103, ‘Business Combination’ applies, short-term financial liabilities and financial liabilities recognized as financial liabilities at FVTPL initially. Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. Otherwise, the transaction cost is recognized in current profit or loss.

(12) Provisions

A provision is recognized if the Bank has a present obligation (legal or constructive) as a result of the past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The risks and uncertainties that inevitably surround many events and circumstances are taken into account in reaching the best estimate of a provision, and where the effect of the time value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation.

Provisions on confirmed and unconfirmed acceptances and guarantees, and unused credit line of corporate loans are recognized using valuation model that applies the credit conversion factor, default rates, and loss given default. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provisions are reversed.

(13) Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer (the Bank) to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the original or modified terms of a debt instrument.

Financial guarantee contracts are initially recognized at fair value and are amortized over the life of the contract. After initial recognition, financial guarantee contracts are measured at the greater of:

• The amount determined in accordance with K-IFRS No.1109, ‘Financial Instruments’ and

• The initial amount recognized, less, when appropriate, cumulative amortization recognized in accordance with K-IFRS No.1115, ‘Revenue from Contracts with Customers’

(14) Equity and Reserve

Equity and Reserve are any contract or agreement that evidences a residual interest in the assets of an entity after deducting all of its liabilities

(15) Interest income and expenses

Interest income and expenses are recognized using the effective interest method. Effective interest method is a method of calculating the amortized cost of a financial asset or a financial liability (or groups of financial assets or financial liabilities) and of allocating the interest income or interest expenses over the relevant period.

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The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments through the expected life of the financial instrument or, where appropriate, a shorter period, to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Bank estimates cash flows considering all contractual terms of the financial instrument but does not consider future credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs, and all other premiums or discounts. In those rare cases when it is not possible to estimate reliably the cash flows or the expected life of a financial instrument (or group of financial instruments), the Bank uses the contractual cash flows over the full contractual term of the financial instrument (or group of financial instruments).

Interest on impaired financial assets is recognized using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss.

(16) Fee and commission income

The Bank recognizes financial service fee in accordance with the accounting standard of the financial instrument related to the fees earned.

1) Fees that are an integral part of the effective interest of a financial instrument

Such fees are generally treated as adjustments of effective interest. Such fees may include compensation for activities such as evaluating the borrower’s financial condition, evaluating and recording guarantees, collateral and other security arrangements, negotiating the terms of the instrument, preparing and processing documents and closing the transaction and origination fees received on issuing financial liabilities measured at amortized cost. However, fees relating to the creation or acquisition of a financial asset at FVTPL are recognized as revenue immediately

2) Fees earned as services are provided

Such fees are recognized as revenue as the services are provided.

3) Fees that are earned on the execution of a significant act

Such fees are recognized as revenue when the significant act has been completed.

(17) Dividend income

Dividend income is recognized in profit or loss when the right to receive payment is established. Dividend income from financial assets at FVTPL and financial investments is recognized in profit or loss as part of dividend income in the separate statements of comprehensive income.

(18) Employee compensation and benefits

1) Defined contribution plans

When employees render service related to defined contribution plans, contributions related to employees services are recognized in current profit or loss without contributions included in cost of assets. Contributions which are supposed to be paid are recognized in accrued expenses after deducting any amount already paid. Also, if contributions already paid exceed contributions which would be paid at the end of period, the amount of excess is recognized in prepaid expenses.

2) Defined benefit plans

The Bank’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

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The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Bank, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in OCI. The Bank determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Bank recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

3) Short-term employee benefits

Short-term employee benefits are employee benefits that are due to be settled within 12 months after the end of the period in which the employees render the related service.

Short-term employee benefits are recognized in current profit and loss when employees render the related service. Short-term employee benefits are not discounted.

(19) Income taxes

Income tax expense represents the sum of the tax currently payable and deferred tax and is recognized as profit or loss, except for taxes directly adjusted in equity or other comprehensive income and loss and for taxes that arise from business combination.

1) Current tax

Current income tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period. The difference between the taxable profit and accounting profit may arise when income or expenses are included in accounting profit in one period, but is included in taxable profit in a different period, and if there is revenue that is exempt from taxation, expenses that are not deductible in determining taxable profit (tax loss). Current income tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The Bank offsets current income tax assets and current income tax liabilities if, and only if, the Bank has a legally enforceable right to set off the recognized amounts and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

2) Deferred tax

Deferred tax is recognized, using the asset-liability method, on temporary differences arising between the tax base amount of assets and liabilities and their carrying amount in the financial statements. Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profit will be available against

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which the deductible temporary difference can be utilized. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

Deferred tax is provided on temporary differences arising on investments in subsidiaries, associates and joint ventures, except for deferred tax liabilities which the timing of the reversal of the temporary difference is controlled by the Bank and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of a deferred tax asset is reviewed at the end of each reporting period. The Bank reduces the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of the deferred tax asset to be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the Bank expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

The Bank offsets deferred tax assets and deferred tax liabilities when the Bank has a legally enforceable right to set off current tax assets against current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity; or different taxable entity which intend either to settle current tax liabilities and assets on a net basis or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(20) New standards and interpretations not yet adopted

The following new standards and amendments to existing standards have been published and are mandatory for the Bank to adopt for annual periods beginning on or after January 1, 2023, and the Bank has not early adopted them.

The following new standards and amendments to existing standards are not expected to significantly affect the Bank:

1) Amendments to K-IFRS No.1001 Presentation of Financial Statements – Classification of Liabilities as Current or Non-current, Non-current Liabilities with Covenants

The amendments published during year 2020 and 2022 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. Also, require an entity to disclose information about non-current liabilities with covenants. The amendments should be applied for annual reporting periods beginning on or after January 1, 2024. The Bank does not expect that these amendments have a significant impact on the financial statements.

2) Amendments to K-IFRS No.1007 Statement of Cash Flows, Korean 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 Bank does not expect that these amendments have a significant impact on the financial statements.

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4. RISK MANAGEMENT:

4-1. Summary

(1) Overview of Risk Management Policy

The financial risks that the Bank is exposed to are credit risk, market risk, liquidity risk, operational risk, interest risk, credit concentration risk, strategy/reputational risk, outsourcing risk, settlement risk and others. Credit risk, market risk, liquidity risk, and operational risk have been recognized as the Bank’s key risks.

The Bank’s risk management system focuses on increasing transparency, developing risk management environment and preemptive response to risks due to rapid changes in financial environment to support the Bank’s long-term strategy and business decision efficiently.

The note regarding financial risk management provides information about the risks that the Bank is exposed to, the objective, policies and process for managing the risk, the methods used to measure the risk and capital adequacy. Additional quantitative information is disclosed throughout the separate financial statements.

(2) Risk Management Group

1) Risk Management Committee

The Risk Management Committee establishes risk management strategies in accordance with the directives of the board of directors and determines the Bank’s target risk appetite, approves significant risk matters and reviews the level of risks that the Bank is exposed to and the appropriateness of the Bank’s risk management operations as an ultimate decision-making authority.

2) Risk Management Council

The Risk Management Council is a consultative group that reviews and makes decisions on matters delegated by the Risk Management Committee and discusses the detailed issues relating to the Bank’s risk management.

3) Risk Management Practices Committee

The Risk Management Practices Committee assists the Risk Management Committee and the Risk Management Council. It performs practical work process relating to risk management plan, including targeted Bank for International Settlements (“BIS”) ratio, risk management strategy, risk measurement, risk analysis, economic capital limit and others.

4-2. Credit risk

(1) Overview of Credit Risk

Credit risk is the risk of possible losses in an asset portfolio in the events of counterparty’s default, breach of contract and deterioration in the credit quality of the counterparty. For the risk management reporting purposes, the individual borrower’s default risk, country risk, specific risks and other credit risk exposure components are considered as a whole.

(2) Credit Risk Management

The Bank controls the credit concentration risk exposure by applying and managing total exposure limits to prevent the excessive risk concentration to specific industry and specific borrowers. The Bank maintains allowances for loan losses associated with credit risk on loans and receivables to manage its credit risk.

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(3) Maximum exposure to credit risk

The Bank’s maximum exposure of financial instruments to credit risk as of December 31, 2023 and 2022, is as follows (Korean won in millions):

	Dec. 31, 2023		Dec. 31, 2022
Cash and due from financial institutions	W	12,591,124	W	9,931,012
Financial assets at FVTPL		3,715,536		4,168,062
Hedging derivative assets		611,960		329,210
Loans at amortized cost (*1)		87,779,980		89,308,139
Financial investments		4,788,893		4,362,663
Other financial assets		1,852,213		1,645,865
Acceptances and guarantee contracts		54,579,410		53,388,080
Commitments (*2)		44,137,856		32,346,450
Total	W	210,056,972	W	195,479,481

(*1) Loans at amortized cost exclude loans valuation adjustment related to fair value hedging and allowances for loan losses.

(*2) Commitments exclude commitments on purchase of beneficiary certificates which are included in other commitments in Note 36.

(4) Credit risk of loans

The Bank maintains allowances for loan losses associated with credit risk on loans to manage its credit risk. Impairment loss on loans can be directly from the carrying amount of the asset or deducted using an allowance account.

The Bank measures the credit risk inherent in financial assets classified as loans and presents it in financial statements as Allowance for loan losses in the form of deduction from the carrying amount of the assets. The Bank writes off on non-profitable loans, non-recoverable loans, loans classified as estimated loss by asset quality category, loans requested to be written off by Financial Supervisory Service (“FSS”) and others upon approval of Loan Management Committee.

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Loans categorized as of December 31, 2023 and 2022 are as follows (Korean won in millions):

(December 31, 2023)

	12 months expected credit losses		Lifetime expected credit losses		Credit-impaired financial assets		Total
Collective assessment:
Best	W	27,846,916	W	4,679	W	1,870	W	27,853,465
Outstanding		35,466,990		—		10,038		35,477,028
Good		23,292,100		928,795		4,046		24,224,941
Below normal		—		41,847		333,669		375,516
Subtotal		86,606,006		975,321		349,623		87,930,950
Individual assessment:
Best		—		—		4,341		4,341
Outstanding		—		—		—		—
Good		—		1,124,100		65,600		1,189,700
Below normal		—		1,009,968		178,036		1,188,004
Subtotal		—		2,134,068		247,977		2,382,045
Total	W	86,606,006	W	3,109,389	W	597,600	W	90,312,995
Net deferred loan origination fees and costs								(481,624	)
Allowances								(2,051,391	)
Total							W	87,779,980

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(December 31, 2022)

	12 months expected credit losses		Lifetime expected credit losses		Credit-impaired financial assets		Total
Collective assessment:
Best	W	30,155,535	W	5,469	W	1,905	W	30,162,909
Outstanding		33,368,921		1,521		11,150		33,381,592
Good		24,000,386		2,027,067		50,334		26,077,787
Below normal		—		194,819		308,213		503,032
Subtotal		87,524,842		2,228,876		371,602		90,125,320
Individual assessment:
Best		—		—		4,266		4,266
Outstanding		—		—		—		—
Good		—		—		—		—
Below normal		—		928,236		666,689		1,594,925
Subtotal		—		928,236		670,955		1,599,191
Total	W	87,524,842	W	3,157,112	W	1,042,557	W	91,724,511
Net deferred loan origination fees and costs								(403,461	)
Allowances								(2,012,911	)
Total							W	89,308,139

The above carrying amounts exclude loan valuation adjustment related to fair value hedging amounting toW(2,719) million andW(8,082) million as of December 31, 2023 and 2022, respectively.

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(5) Credit quality of Financial investments (debt securities)

Financial investments (debt securities) exposed to credit risk as of December 31, 2023 and 2022 are as follows (Korean won in millions):

(December 31, 2023)

	12 months expected credit losses		Lifetime expected credit losses		Credit- impaired financial assets		Total
Grade 1	W	4,788,893	W	—	W	—	W	4,788,893
Grade 2		—		—		—		—
Grade 3		—		—		—		—
Grade 4		—		—		—		—
Grade 5		—		—		—		—
Total	W	4,788,893	W	—	W	—	W	4,788,893

(December 31, 2022)

	12 months expected credit losses		Lifetime expected credit losses		Credit- impaired financial assets		Total
Grade 1	W	4,362,663	W	—	W	—	W	4,362,663
Grade 2		—		—		—		—
Grade 3		—		—		—		—
Grade 4		—		—		—		—
Grade 5		—		—		—		—
Total	W	4,362,663	W	—	W	—	W	4,362,663

(6) Concentration of credit risk

The amounts disclosed below exclude loan valuation adjustment related to fair value hedging amounting toW(2,719) million andW(8,082) million as of December 31, 2023 and 2022, respectively.

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1) Loans by country where the credit risk belongs to as of December 31, 2023 and 2022 are as follows (Korean won in millions):

(December 31, 2023)

	Loans in local currency		Loans in foreign currencies(*1)		Others		Total		Ratio (%)		Deferred loan origination fees			Allowances
Asia:
Korea	W	27,871,602	W	24,901,341	W	2,380,121	W	55,153,064		61.07	W	(46,311	)	W	(941,677	)
China		—		346,385		697,606		1,043,991		1.16		(914	)		(3,353	)
Saudi Arabia		—		1,857,355		24,116		1,881,471		2.08		(17,988	)		(13,316	)
India		—		3,082,098		34,700		3,116,798		3.45		(28,032	)		(3,773	)
Indonesia		—		2,661,021		3,376		2,664,397		2.95		(95,464	)		(9,932	)
Vietnam		—		2,342,618		201,773		2,544,391		2.82		(20,840	)		(147,608	)
Australia		—		596,348		229		596,577		0.66		(15,470	)		(1,213	)
Philippines		—		—		522		522		—		—			—
Qatar		—		540,505		—		540,505		0.60		(14,341	)		(2,796	)
Singapore		—		896,531		81,025		977,556		1.08		(2,868	)		(2,688	)
Oman		—		881,832		—		881,832		0.98		(10,724	)		(10,859	)
Hong Kong		—		238,539		777,455		1,015,994		1.12		—			(90	)
The United Arab Emirates		—		3,151,234		7,245		3,158,479		3.50		(29,515	)		(1,561	)
Uzbekistan		—		913,823		—		913,823		1.01		(6,980	)		(22,757	)
Others		—		2,550,512		2,787,471		5,337,983		5.91		(69,163	)		(281,507	)
Subtotal		27,871,602		44,960,142		6,995,639		79,827,383		88.39		(358,610	)		(1,443,130	)
Europe:
Russia		—		297,490		—		297,490		0.33		(252	)		(261,360	)
United Kingdom		—		1,554,713		—		1,554,713		1.72		(9,333	)		(9,103	)
France		—		70,332		395,569		465,901		0.52		(1,283	)		(4	)
Netherlands		—		206,304		13,044		219,348		0.24		(304	)		(726	)
Maltae		—		16,602		—		16,602		0.02		(447	)		(103	)
Greece		—		1,404,934		—		1,404,934		1.56		(6,303	)		(234	)
Türkiye		—		1,152,396		29,112		1,181,508		1.31		(9,326	)		(172,170	)
Germany		—		47,772		258,196		305,968		0.34		(103	)		—
Others		—		664,068		52,300		716,368		0.79		(23,885	)		(11,759	)
Subtotal		—		5,414,611		748,221		6,162,832		6.83		(51,236	)		(455,459	)
America:
Panama		—		68,935		320,566		389,501		0.43		(229	)		(744	)
United States		—		52,961		23,928		76,889		0.09		(318	)		(595	)
Mexico		—		196,255		—		196,255		0.22		(2,655	)		(471	)
Bermuda		—		152,413		—		152,413		0.17		(772	)		(2,708	)
Brazil		—		1,142,503		3,146		1,145,649		1.26		—			(3,826	)
Others		—		1,299,137		—		1,299,137		1.43		(21,324	)		(11,788	)
Subtotal		—		2,912,204		347,640		3,259,844		3.60		(25,298	)		(20,132	)
Africa:
Nigeria		—		40,654		—		40,654		0.05		(2,737	)		(1,325	)
Others		—		1,022,282		—		1,022,282		1.13		(43,743	)		(131,345	)
Subtotal		—		1,062,936		—		1,062,936		1.18		(46,480	)		(132,670	)
Total	W	27,871,602	W	54,349,893	W	8,091,500	W	90,312,995		100.00	W	(481,624	)	W	(2,051,391	)

(*1) The Bank has changed the classification method by country of loan receivables based on the same criteria as the method of calculating provision (from the borrower’s country of location to the country of risk attribution) during the current year.

70

(December 31, 2022)

	Loans in local currency		Loans in foreign currencies		Others		Total		Ratio (%)		Deferred loan origination fees			Allowances
Asia:
Korea	W	28,665,695	W	10,236,442	W	2,309,444	W	41,211,581		44.93	W	(14,857	)	W	(682,166	)
China		—		1,686,247		256,613		1,942,860		2.12		(1,024	)		(24,458	)
Saudi Arabia		—		2,123,068		7,429		2,130,497		2.32		(17,335	)		(13,542	)
India		—		2,737,735		38,294		2,776,029		3.03		(14,540	)		(3,116	)
Indonesia		15,000		2,872,577		13,577		2,901,154		3.16		(34,383	)		(9,103	)
Vietnam		—		4,283,876		78,780		4,362,656		4.76		(25,781	)		(105,525	)
Australia		—		469,043		—		469,043		0.51		(16,022	)		(3,415	)
Philippines		—		6,677		696		7,373		0.01		—			(420	)
Qatar		—		471,410		—		471,410		0.51		(1,450	)		(2,733	)
Singapore		—		800,470		253,460		1,053,930		1.15		(3,506	)		(3,050	)
Oman		—		1,216,937		—		1,216,937		1.33		(13,066	)		(16,918	)
Hong Kong		—		280,707		711,195		991,902		1.08		—			(1,731	)
The United Arab Emirates		—		6,356,459		3,013		6,359,472		6.93		(44,810	)		(3,381	)
Uzbekistan		—		1,108,308		—		1,108,308		1.21		(8,047	)		(82,355	)
Others		9,800		3,172,143		2,267,024		5,448,967		5.94		(79,288	)		(110,739	)
Subtotal		28,690,495		37,822,099		5,939,525		72,452,119		78.99		(274,109	)		(1,062,652	)
Europe:
Russia		—		365,005		—		365,005		0.40		(269	)		(209,032	)
United Kingdom		—		1,360,193		15,058		1,375,251		1.50		(6,866	)		(19,589	)
France		—		218,679		1,655		220,334		0.24		(1,704	)		(158	)
Netherlands		—		—		23,560		23,560		0.03		—			(137	)
Greece		—		1,835,089		—		1,835,089		2.00		(8,671	)		(1,783	)
Ireland		—		28,734		—		28,734		0.03		(224	)		(65	)
Türkiye		—		1,383,606		22,723		1,406,329		1.53		(11,270	)		(178,378	)
Germany		—		276,499		21,192		297,691		0.32		(184	)		(1,161	)
Ukraine		—		63,188		—		63,188		0.07		(45	)		(128	)
Hungary		—		1,893,201		—		1,893,201		2.06		(2,975	)		(2,875	)
Others		—		2,692,104		80,931		2,773,035		3.03		(13,350	)		(8,811	)
Subtotal		—		10,116,298		165,119		10,281,417		11.21		(45,558	)		(422,117	)
America:
Panama		—		1,120,261		171,126		1,291,387		1.41		(4,137	)		(1,268	)
United States		—		2,497,356		8,123		2,505,479		2.73		(2,867	)		(12,761	)
The British Virgin Islands		—		7,501		—		7,501		0.01		—			—
Mexico		—		315,642		—		315,642		0.34		(2,807	)		(3,733	)
Brazil		—		2,011,896		—		2,011,896		2.19		(3,326	)		(5,272	)
Others		—		1,268,288		—		1,268,288		1.39		(5,959	)		(9,885	)
Subtotal		—		7,220,944		179,249		7,400,193		8.07		(19,096	)		(32,919	)
Africa:
Marshall Islands		—		507,862		—		507,862		0.55		(2,126	)		(532	)
Liberia		—		125,670		—		125,670		0.14		(9,202	)		(259	)
Nigeria		—		284,645		—		284,645		0.31		(4,648	)		(5,802	)
Morocco		—		80,731		—		80,731		0.09		(796	)		(112	)
Others		—		586,114		5,760		591,874		0.64		(47,926	)		(488,518	)
Subtotal		—		1,585,022		5,760		1,590,782		1.73		(64,698	)		(495,223	)
Total	W	28,690,495	W	56,744,363	W	6,289,653	W	91,724,511		100.00	W	(403,461	)	W	(2,012,911	)

71

2) Loans by industry as of December 31, 2023 and 2022 are as follows (Korean won in millions):

(December 31, 2023)

	Loans										Deferred loan origination fees			Allowances
	Loans in local currency		Loans in foreign currencies		Others		Total		Ratio (%)
Manufacturing	W	14,351,677	W	26,750,238	W	509,226	W	41,611,141		46.07	W	(242,246	)	W	(1,283,291	)
Transportation		1,433,190		5,658,223		418,897		7,510,310		8.32		(49,148	)		(244,919	)
Financial institutions		9,435,219		7,891,197		7,021,834		24,348,250		26.96		(28,189	)		(271,822	)
Wholesale and retail		1,084,170		1,548,102		106,469		2,738,741		3.03		(1,469	)		(13,426	)
Real estate		2,200		631,802		—		634,002		0.70		(1,945	)		(73,463	)
Construction		515,860		2,215,012		2,371		2,733,243		3.03		(26,095	)		(18,501	)
Public sector and others		1,049,286		9,655,319		32,703		10,737,308		11.89		(132,532	)		(145,969	)
Total	W	27,871,602	W	54,349,893	W	8,091,500	W	90,312,995		100.00	W	(481,624	)	W	(2,051,391	)

(December 31, 2022)

	Loans										Deferred loan origination fees			Allowances
	Loans in local currency		Loans in foreign currencies		Others		Total		Ratio (%)
Manufacturing	W	15,239,184	W	27,145,888	W	479,733	W	42,864,805		46.73	W	(167,426	)	W	(1,439,253	)
Transportation		1,713,800		6,689,326		341,413		8,744,539		9.53		(44,042	)		(97,147	)
Financial institutions		9,298,997		6,469,119		5,413,523		21,181,639		23.09		(3,705	)		(218,711	)
Wholesale and retail		932,415		1,219,784		25,243		2,177,442		2.38		(1,946	)		(13,434	)
Real estate		—		500,463		1		500,464		0.55		(2,239	)		(80,611	)
Construction		404,960		2,071,318		2,371		2,478,649		2.70		(28,134	)		(20,927	)
Public sector and others		1,101,139		12,648,465		27,369		13,776,973		15.02		(155,969	)		(142,828	)
Total	W	28,690,495	W	56,744,363	W	6,289,653	W	91,724,511		100.00	W	(403,461	)	W	(2,012,911	)

72

3) Concentration of credit risk of financial assets at FVTPL and financial investments (debt securities) by industry as of December 31, 2023 and 2022 are as follows (Korean won in millions):

	Dec. 31, 2023				Dec. 31, 2022
	Amount		Ratio (%)		Amount		Ratio (%)
Financial Assets at FVTPL
Government and government sponsored institutions	W	225,955		6.08	W	135,804		3.26
Banking and insurance		3,132,157		84.30		3,759,214		90.19
Others		357,424		9.62		273,044		6.55
Subtotal		3,715,536		100.00		4,168,062		100.00
Financial Assets at FVOCI
Government and government sponsored institutions		1,517,635		50.76		1,490,379		55.70
Banking and insurance		1,023,574		34.23		799,192		29.86
Others		448,784		15.01		386,504		14.44
Subtotal		2,989,993		100.00		2,676,075		100.00
Securities at amortized cost
Government and government sponsored institutions		1,193,865		66.37		1,358,147		80.53
Banking and insurance		454,204		25.25		202,318		12.00
Others		150,831		8.38		126,123		7.47
Subtotal		1,798,900		100.00		1,686,588		100.00
Hedging derivative assets
Banking and insurance		611,960		100.00		329,210		100.00
Total	W	9,116,389			W	8,859,935

4) Concentration of credit risk of financial assets at FVTPL and financial investments (debt securities) by country as of December 31, 2023 and 2022 are as follows (Korean won in millions):

	Dec. 31, 2023				Dec. 31, 2022
	Amount		Ratio (%)		Amount		Ratio (%)
Financial Assets at FVTPL
Korea	W	3,135,028		84.38	W	3,966,136		95.16
Others		580,508		15.62		201,926		4.84
Subtotal		3,715,536		100.00		4,168,062		100.00
Financial Assets at FVOCI
Korea		1,371,957		45.88		1,283,346		47.95
United States		1,234,828		41.30		1,016,334		37.98
Others		383,208		12.82		376,395		14.07
Subtotal		2,989,993		100.00		2,676,075		100.00
Securities at amortized cost
Korea		865,270		48.10		884,045		52.41
United States		752,178		41.81		657,362		38.98
Others		181,452		10.09		145,181		8.61
Subtotal		1,798,900		100.00		1,686,588		100.00
Hedging derivative assets
Korea		249,248		40.72		231,022		70.18
France		177,698		29.04		49,580		15.06
United States		132,093		21.59		34,704		10.54
Others		52,922		8.65		13,904		4.22
Subtotal		611,960		100.00		329,210		100.00
Total	W	9,116,389			W	8,859,935

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5) Credit enhancement and its financial effect as of December 31, 2023 and 2022 are as follows (Korean won in millions):

(December 31, 2023)

	Loans (*1)		Acceptances and guarantees		Unused loan commitments		Total		Ratio (%)
Maximum exposure to credit risk	W	87,779,980	W	54,579,410	W	44,137,856	W	186,497,246		100.00
Credit enhancement:
Deposits and savings		148,574		50,317		11,517		210,408		0.11
Export guarantee insurance		298,148		1,053,986		—		1,352,134		0.73
Guarantee		1,526,158		1,475,565		3,479,564		6,481,287		3.48
Securities		14,114		38,658		—		52,772		0.03
Real estate		3,145,729		596,015		152,462		3,894,206		2.09
Ships		394,972		70,287		—		465,259		0.24
Others		25,775		—		—		25,775		0.01
Subtotal		5,553,470		3,284,828		3,643,543		12,481,841		6.69
Exposure to credit risk after deducting credit enhancement	W	82,226,510	W	51,294,582	W	40,494,313	W	174,015,405		93.31

(December 31, 2022)

	Loans (*1)		Acceptances and guarantees		Unused loan commitments		Total		Ratio (%)
Maximum exposure to credit risk	W	89,308,139	W	53,388,080	W	32,346,450	W	175,042,669		100.00
Credit enhancement:
Deposits and savings		195,478		53,983		6,005		255,466		0.15
Export guarantee insurance		339,601		584,313		2,136		926,050		0.53
Guarantee		1,795,814		1,723,608		178,543		3,697,965		2.11
Securities		22,211		42,449		—		64,660		0.04
Real estate		2,335,539		331,485		123,691		2,790,715		1.59
Ships		1,218,222		237,108		—		1,455,330		0.83
Others		42,196		—		—		42,196		0.02
Subtotal		5,949,061		2,972,946		310,375		9,232,382		5.27
Exposure to credit risk after deducting credit enhancement	W	83,359,078	W	50,415,134	W	32,036,075	W	165,810,287		94.73

(*1) Loans exclude loans valuation adjustment related to fair value hedging.

4-3. Liquidity risk

(1) Overview of liquidity risk

Liquidity risk is the risk that the Bank is unable to meet its payment obligations arising from financial liabilities as they become due. The Bank discloses all financial asset, financial liabilities and off-balance-sheet items, such as loan commitments and analysis of the contractual maturity, which are related to liquidity risk, into seven categories. The cash flows disclosed in the maturity analysis are undiscounted contractual amounts, including principal and future interest, which resulted in disagreement with the discounted cash flows included in the separate statements of financial position. However, for derivatives, each discounted cash flow consisting of current fair value is presented.

74

(2) Principles of the liquidity risk management

1) Liquidity risk is managed with integration. The Bank measures, reports and controls liquidity risk by quantification with reasonable method.

2) Liquidity risk reflects financing plans and fund-using plans, and the Bank reports the liquidity risk with preciseness, timeliness and consistency.

3) The Bank establishes liquidity risk management strategy by analyzing liquidity maturity, liquidity gap structure and market environment.

(3) Liquidity risk management

Risk management department monitors changes by liquidity risk sources and compliance of risk limits. It notifies related departments to prepare countermeasures in case the measured liquidity risk is close to risk limits. Also, it analyzes crisis situations and effects of the crisis situations and reports to the Risk Management Committee on a regular basis. Each related department monitors changes of liquidity risk sources and compliance of risk limits by itself and if exposure to new risk is expected, it discusses the matter with the head of risk management department.

(4) Measurement of liquidity risk

The Bank measures liquidity ratio, liquidity gap ratio and others for local currency and foreign currencies and simulates analysis reflecting market environment, product features and the Bank’s strategies.

(5) Analysis on remaining contractual maturity of financial liabilities and off-balance-sheet items

Remaining contractual maturity and amount of financial liabilities and off-balance-sheet items as of December 31, 2023 and 2022 are as follows (Korean won in millions):

(December 31, 2023)

	On demand		Within 1 month		1 to 3 months		3 to 6 months		6 to 12 months		1 year to 5 years		Over 5 years		Total
Financial liabilities:
Financial liabilities at FVTPL	W	2,122,804	W	—	W	—	W	—	W	—	W	—	W	—	W	2,122,804
Hedging derivative liabilities		—		20,714		54,928		17,989		97,956		476,186		846,435		1,514,208
Borrowings		—		242,972		523,874		1,375,352		834,734		2,405,711		374,816		5,757,459
Debentures		—		1,929,332		6,931,707		10,978,525		18,213,418		50,349,703		16,481,654		104,884,339
Other financial liabilities		—		1,888,986		64		2,239		1,718		164,052		834,443		2,891,502
Total	W	2,122,804	W	4,082,004	W	7,510,573	W	12,374,105	W	19,147,826	W	53,395,652	W	18,537,348	W	117,170,312
Off-balance sheet items (*1):
Commitments	W	44,137,856	W	—	W	—	W	—	W	—	W	—	W	—	W	44,137,856
Financial guarantee contracts		14,372,468		—		—		—		—		—		—		14,372,468
Total	W	58,510,324	W	—	W	—	W	—	W	—	W	—	W	—	W	58,510,324

75

(December 31, 2022)

	On demand		Within 1 month		1 to 3 months		3 to 6 months		6 to 12 months		1 year to 5 years		Over 5 years		Total
Financial liabilities:
Financial liabilities at FVTPL	W	2,513,487	W	—	W	—	W	—	W	—	W	—	W	—	W	2,513,487
Hedging derivative liabilities		—		4,086		125,534		19,748		392,886		876,212		938,442		2,356,908
Borrowings		—		874,682		2,022,891		2,282,703		3,065,877		2,135,810		—		10,381,963
Debentures		—		1,163,134		7,694,833		9,377,102		19,730,207		47,780,202		13,041,873		98,787,351
Other financial liabilities		—		1,362,669		—		572		3,140		320,354		837,540		2,524,275
Total	W	2,513,487	W	3,404,571	W	9,843,258	W	11,680,125	W	23,192,110	W	51,112,578	W	14,817,855	W	116,563,984
Off-balance sheet items (*1):
Commitments	W	32,346,450	W	—	W	—	W	—	W	—	W	—	W	—	W	32,346,450
Financial guarantee contracts		13,496,820		—		—		—		—		—		—		13,496,820
Total	W	45,843,270	W	—	W	—	W	—	W	—	W	—	W	—	W	45,843,270

(*1) Although financial guarantees and loan commitments provided by the Bank have maturities, the Bank should fulfill the obligation immediately when the counter party requests payments.

4-4. Market risk

(1) Overview of market risk

1) Definition of market risk

Market risk is the risk of possible losses that arise from the changes of market factors, such as interest rate, stock price, foreign exchange rate, commodity value. The Bank classifies exposures to market risk into either foreign exchange rate risk or interest rate risk. Foreign exchange risk is the possible losses on assets and liabilities denominated in foreign currencies due to changes of foreign exchange rate. Interest rate risk is the possible losses on assets and liabilities due to changes of interest rate.

2) Market risk management group

The Bank operates the Risk Management Committee and the Risk Management Council for managing risks and risk limits. The Risk Management Practices Committee assists the Risk Management Committee and the Risk Management Council for practical matters, such as managing adequate assets and liabilities by analyzing foreign exchange risk, interest rate risk, liquidity risk and effects by initiating new product. Market risk is managed by product and currency for minimizing segments exposed to changes of foreign exchange, interest rate and securities’ price. Foreign exchange risk is measured by definite method. Interest rate risk is measured by IRRBB standards, definite method and probabilistic method and definite method is used for limits management. Meanwhile, the Bank performs financial crisis analysis supposing exceptional, but possible events for evaluating latent weakness. The analysis is used for important decision making, such as risk mitigation, emergency plan development and limit setup. The results of the analysis are reported to the board of directors and management on a quarterly basis.

76

(2) Foreign exchange risk

1) Management of foreign exchange risk

Foreign exchange risk management limit is set up and a risk management division head monitors changes of foreign exchange risk by source and compliance of risk limits regularly. A finance division head also monitors changes of foreign exchange risk by source and compliance of risk limits. The finance division head needs to cooperate with the risk management division head in case it is expected that the Bank will be exposed to a new risk. The risk management division head orders related divisions to prepare countermeasures in case it is apprehended that foreign exchange risk exceeds risk limit. If foreign exchange risk exceeds the risk limit, the risk management division head orders related divisions to prepare countermeasures and reports to Risk Management Committee after resolving the exceeded limit problem.

2) Measurement of foreign exchange risk

Foreign exchange risk is managed by foreign exchange VaR and foreign exchange position. Foreign exchange VaR is measured on a monthly basis and foreign exchange position is measured on a daily basis. It is measured separately by currency for assets and liabilities denominated in foreign currencies exceeding 5% of total assets and liabilities denominated in foreign currencies.

3) Measurement method

Value at Risk (VaR)

The Bank uses a yearly VaR to measure market risk. The yearly VaR is a statistically estimated maximum amount of loss that could occur in one year under normal distribution of financial variables. The Bank calculates VaR using equal weighted-average method based on historical changes in market rates, prices and volatilities over the previous five years data and measures VaR at a 99% single tail confidence level. VaR is a commonly used market risk management technique. However, the method has some shortcomings.

VaR estimates possible losses over a certain period at a particular confidence level using past market movement data. Past market movement, however, is not necessarily a good indicator of future events, as there may be conditions and circumstances in the future that the model does not anticipate. As a result, the timing and magnitude of the actual losses can be different, depending on the assumptions made at the time of calculation. In addition, the time periods used for the model, generally one day or 10 days are assumed to be a sufficient holding period before liquidating the relevant underlying positions. If these holding periods are not sufficient, or too long, the VaR results may understate or overstate the potential loss.

Stress testing

The stress testing is carried out to analyze the abnormal market situation reflecting intrinsic volatility of foreign exchange that has significant influent on the value of portfolio.

Results of measurement

Results of foreign exchange VaR as of December 31, 2023 and 2022 are as follows (Korean won in millions):

Dec. 31, 2023

Dec. 31, 2022

Average

Minimum

Maximum

Ending

Average

Minimum

Maximum

Ending

Foreign exchange risk

W86,924

W2,153

W141,081

W76,774

W43,362

W15,318

W78,559

W25,191

77

(3) Interest rate risk

1) Management of interest rate risk

Interest rate risk management limit is set up and included in internal capital management limit. A risk management division head monitors changes of interest rate risk by source and compliance of risk limits regularly. A finance division head also monitors changes of interest rate risk by source and compliance of risk limits. The finance division head needs to cooperate with the risk management division head in case it is expected that the Bank will be exposed to a new risk. The risk management division head orders related divisions to prepare countermeasures in case it is apprehended that interest rate risk exceeds risk limit. If interest rate risk exceeds the risk limit, the risk management division head orders related divisions to prepare countermeasures and reports to Risk Management Committee after resolving the exceeded limit problem.

2) Measurement of interest rate risk

Interest rate risk is managed by measuring ΔNII (Change in Net Interest Income) and ΔEVE (Change in Economic Value of Equity) and uses interest rate sensitivity gap and duration gap as supplementary index. ΔNII and ΔEVE are measured on a monthly basis, and interest rate sensitivity gap and duration gap are measured on a daily basis. The Bank simulates analysis reflecting market environment, product features and the Bank’s strategies.

3) Measurement method

Change in Economic Value of Equity (ΔEVE)

The Bank uses a yearly ΔEVE to measure interest rate risk. The yearly ΔEVE is the maximum amount of loss that could occur in one year under normal distribution of financial variables. The Bank calculates the yearly ΔEVE by using variance-covariance method at a 99% single tail confidence level based on the previous five years data using equal weighted-average method.

ΔEVE estimates possible losses over a certain period at a particular confidence level using past market movement data. Past market movement, however, is not necessarily a good indicator of future events, as there may be conditions and circumstances in the future that the model does not anticipate. As a result, the timing and magnitude of the actual losses can be different depending on the assumptions made at the time of calculation.

Stress testing

The stress testing is carried out to analyze the abnormal market situation reflecting intrinsic volatility of interest rate that has significant influence on the value of portfolio and is performed at least once in every quarter.

Results of measurement

Results of interest rate VaR as of December 31, 2023 and 2022 are as follows (Korean won in millions):

Dec. 31, 2023

Dec. 31, 2022

Average

Minimum

Maximum

Ending

Average

Minimum

Maximum

Ending

Interest rate risk

W200,874

W127,582

W266,083

W224,214

W227,335

W117,244

W422,964

W373,195

4-5. Capital risk

The Bank follows the standard of capital adequacy established by the Financial Services Commission. The standard is based on Basel III, which was established by Basel Committee on Banking Supervision in BIS.

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In Korea, this standard has been followed since December 2013. According to the standard, the Bank should maintain at least 8% or above of BIS capital ratio for risk-weighted asset, and quarterly report BIS capital ratio to the FSS.

According to Korean Banking Supervision rules for operations, the Bank’s capitals are mainly divided into two categories:

1) Tier 1 capital (basic capital): Basic capital is composed of capital stock-common and other basic capital. Capital stock-common includes common stock satisfied with qualifications, capital surplus, retained earnings, accumulated other comprehensive income, other reserves and non-controlling interests among the common stock of consolidated subsidiaries. Other basic capital includes securities and capital surplus satisfied with qualifications.

2) Tier 2 capital (supplementary capital): Supplementary capital is composed of the securities and capital surplus satisfied with qualifications, non-controlling interests among the securities of consolidated subsidiaries and the amounts of less than below 1.25% of credit risk-weighted asset like allowance for credit losses in respect of credits classified as normal or precautionary.

The risk-weighted asset includes intrinsic risks in total assets, errors of internal operation processes and loss risk from external events. It indicates a size of assets reflecting the level of risks that the Bank bears. The Bank computes the risk-weighted asset by risks (credit risk, market risk and operational risk) and uses it for calculation of BIS capital ratio.

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5. FINANCIAL ASSETS AND FINANCIAL LIABILITIES:

5-1. Classification and fair value

(1) Carrying amounts and fair values of financial instruments as of December 31, 2023 and 2022 are as follows (Korean won in millions):

	Dec. 31, 2023				Dec. 31, 2022
	Carrying amount		Fair value		Carrying amount		Fair value
Financial assets:
Cash and due from financial institutions	W	12,591,124	W	12,591,124	W	9,931,012	W	9,931,012
Financial assets at FVTPL		3,715,536		3,715,536		4,172,754		4,172,754
Hedging derivative assets		611,960		611,960		329,210		329,210
Loans at amortized cost		87,777,261		87,738,349		89,300,057		89,461,313
Financial assets at FVOCI		13,614,565		13,614,565		11,677,238		11,677,238
Securities at amortized cost		1,798,900		1,714,544		1,686,588		1,574,782
Other financial assets		1,852,213		1,852,213		1,645,865		1,645,865
Total	W	121,961,559	W	121,838,291	W	118,742,724	W	118,792,174
Financial liabilities: