Bond Korea Trade Bank 3% ( US302154CQ02 ) in USD

Korea Trade Bank

100 % ▼

Republic of Korea

US302154CQ02 ( in USD )

3% per year ( payment 2 times a year)

31/10/2022 - Bond has expired

Prospectus brochure of the bond The Export-Import Bank of Korea US302154CQ02 in USD 3%, expired

200 000 USD

1 000 000 000 USD

302154CQ0

AA ( High grade - Investment-grade )

Aa2 ( High grade - Investment-grade )

The Export-Import Bank of Korea (KEXIM) is a policy bank that provides financial support to Korean companies engaged in export and import activities, aiming to promote the nation's economic growth and international competitiveness.

The Export-Import Bank of Korea's USD 1,000,000,000 3% bond (ISIN: US302154CQ02, CUSIP: 302154CQ0), issued in South Korea, matured on October 31, 2022, at 100% of face value, with a minimum trading size of USD 200,000 and a semi-annual coupon payment, and received ratings of AA from Standard & Poor's and Aa2 from Moody's.

424(B)(2)
424B2 1 d449011d424b2.htm 424(B)(2)
Table of Contents
Filed pursuant to Rule 424(b)(2)
Registration Statement No. 333-217916

PROSPECTUS SUPPLEMENT
(To Prospectus Dated June 30, 2017)

The Export-Import Bank of Korea
(A statutory juridical entity established under The Export-Import Bank of Korea Act of 1969, as amended, in the Republic of Korea)
US$600,000,000 Floating Rate Notes due 2022
US$400,000,000 2.50% Notes due 2020
US$1,000,000,000 3.00% Notes due 2022
Our US$600,000,000 aggregate principal amount of floating rate notes due 2022 (the "Floating Rate Notes") will bear interest at a rate equal to Three-Month USD LIBOR (as defined herein)
plus 0.925% per annum. Interest on the Floating Rate Notes is payable quarterly in arrears on February 1, May 1, August 1 and November 1 of each year. The first interest payment on the
Floating Rate Notes will be made on February 1, 2018 in respect of the period from (and including) November 1, 2017 to (but excluding) February 1, 2018. The Floating Rate Notes will mature
on November 1, 2022.
Our US$400,000,000 aggregate principal amount of notes due 2020 (the "2020 Notes") will bear interest at a rate of 2.50% per annum, and our US$1,000,000,000 aggregate principal amount
of notes due 2022 (the "2022 Notes", and together with the 2020 Notes, the "Fixed Rate Notes") will bear interest at a rate of 3.00% per annum. Interest on the Fixed Rate Notes is payable semi-
annually in arrears on May 1 and November 1 of each year. The first interest payment on the Fixed Rate Notes will be made on May 1, 2018 in respect of the period from (and including)
November 1, 2017 to (but excluding) May 1, 2018. The 2020 Notes will mature on November 1, 2020, and the 2022 Notes will mature on November 1, 2022.
All references to the "Notes" are to the Floating Rate Notes, the 2020 Notes and the 2022 Notes, collectively.
The Notes will be issued in minimum denominations of US$200,000 principal amount and integral multiples of US$1,000 in excess thereof. The Notes will be represented by one or more
global securities registered in the name of a nominee of The Depository Trust Company, as depositary.

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

Floating Rate Notes

2020 Notes

2022 Notes

Per Note
Total

Per Note
Total

Per Note
Total

Public offering price

100.000%
US$600,000,000
99.650%
US$398,600,000
99.853%
US$998,530,000
Underwriting discounts

0.300%
US$
1,800,000

0.250%
US$
1,000,000

0.300%
US$
3,000,000
Proceeds to us, before expenses

99.700%
US$598,200,000
99.400%
US$397,600,000
99.553%
US$995,530,000
In addition to the initial public offering price, you will have to pay for accrued interest, if any, from (and including) November 1, 2017.
Applications have been made to the Singapore Exchange Securities Trading Limited (the "SGX-ST") for the listing and quotation of the Notes on the SGX -ST. There can be no assurance
that such listing will be obtained for the Notes. The SGX -ST assumes no responsibility for the correctness of any statements made, opinions expressed or reports contained herein. Approval in-
principle from, admission to the Official List of, and listing and quotation of any Notes on, the SGX -ST are not to be taken as an indication of the merits of the issuer or the Notes.
The underwriters expect to deliver the Notes to investors through the book-entry facilities of The Depository Trust Company on or about November 1, 2017.

Joint Bookrunners and Lead Managers

BofA Merrill Lynch

BNP PARIBAS

Citigroup

Crédit Agricole CIB

MUFG
Joint Lead Manager
Mirae Asset Daewoo
Co-Manager
KEXIM Asia Limited
Prospectus Supplement Dated October 24, 2017
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424(B)(2)
Table of Contents
You should rely only on the information contained in or incorporated by reference in this prospectus supplement and the accompanying prospectus.
We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer is not
permitted.
TABLE OF CONTENTS

Page
Prospectus Supplement

Summary of the Offering

S-6
Use of Proceeds

S-8
Recent Developments

S-9
Description of the Notes

S-87
Clearance and Settlement

S-91
Taxation

S-94
Underwriting

S-97
Legal Matters

S-101
Official Statements and Documents

S-101
General Information

S-101
Prospectus

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

15
Debt

24
Credit Policies, Credit Approval and Risk Management

26
Capital Adequacy

27
Overseas Operations

28
Property

28
Management and Employees

29
Tables and Supplementary Information

30
Financial Statements and the Auditors

40
The Republic of Korea

135
Land and History

135
Government and Politics

137
The Economy

140
Principal Sectors of the Economy

148
The Financial System

155
Monetary Policy

160
Balance of Payments and Foreign Trade

164
Government Finance

171
Debt

174
Tables and Supplementary Information

176

S-2
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Page
Description of the Securities

180
Description of Debt Securities

180
Description of Warrants

186
Terms Applicable to Debt Securities and Warrants

187
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Description of Guarantees

188
Limitations on Issuance of Bearer Debt Securities and Bearer Warrants

189
Taxation

190
Korean Taxation

190
United States Tax Considerations

192
Plan of Distribution

200
Legal Matters

201
Authorized Representatives in the United States

201
Official Statements and Documents

201
Experts

201
Forward-Looking Statements

202
Further Information

204

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CERTAIN DEFINED TERMS
All references to "we" or "us" mean The Export-Import Bank of Korea. All references to "Korea" or the "Republic" contained in this prospectus
supplement mean The Republic of Korea. All references to the "Government" mean the government of Korea. References to "?", "Won" or "Korean won"
are to the lawful currency of Korea and "US$" or "U.S. dollars" are to the lawful currency of the United States. Terms used but not defined in this
prospectus supplement shall have the same meanings given to them in the accompanying prospectus.
Unless otherwise indicated, all references to "Floating Rate Notes" contained in this prospectus supplement are to the US$600,000,000 aggregate
principal amount of floating rate notes due 2022, all references to "2020 Notes" are to the US$400,000,000 aggregate principal amount of 2.50% notes due
2020, all references to "2022 Notes" are to the US$1,000,000,000 aggregate principal amount of 3.00% notes due 2022 and all references to "Fixed Rate
Notes" are to the 2020 Notes and the 2022 Notes, collectively. Unless otherwise indicated, all references to the "Notes" are to the Floating Rate Notes, the
2020 Notes and the 2022 Notes, collectively.
In this prospectus supplement and the accompanying prospectus, where information has been provided in units of thousands, millions or billions,
such amounts have been rounded up or down. Accordingly, actual numbers may differ from those contained herein due to rounding. Any discrepancy
between the stated total amount and the actual sum of the itemized amounts listed in a table, is due to rounding.
Our financial information included in this prospectus supplement was prepared under International Financial Reporting Standards as adopted by
Korea ("Korean IFRS" or "K-IFRS"). References in this prospectus supplement 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 supplement is presented on a separate basis in accordance with Korean IFRS and does not include such information with respect to our
subsidiaries.
ADDITIONAL INFORMATION
The information in this prospectus supplement is in addition to the information contained in our accompanying prospectus dated June 30, 2017. The
accompanying prospectus contains information regarding ourselves and Korea, as well as a description of some terms of the Notes. You can find further
information regarding us, Korea, and the Notes in registration statement no. 333-217916, as amended, relating to our debt securities, with or without
warrants, and guarantees, which is on file with the U.S. Securities and Exchange Commission.
WE ARE RESPONSIBLE FOR THE ACCURACY OF THE INFORMATION IN THIS DOCUMENT
We are responsible for the accuracy of the information in this document and confirm that to the best of our knowledge we have included all facts that
should be included not to mislead potential investors. The address of our registered office is 38 Eunhaeng-ro, Yeongdeungpo-gu, Seoul 07242, The
Republic of Korea. The SGX-ST assumes no responsibility for the contents of this prospectus supplement and the accompanying prospectus, and makes no
representation as to liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this prospectus
supplement and the accompanying prospectus. Approval in-principle from, admission to the Official List of, and listing and quotation of any Notes on, the
SGX-ST are not to be taken as an indication of the merits of the issuer or the Notes.
NOT AN OFFER IF PROHIBITED BY LAW
The distribution of this prospectus supplement and the accompanying prospectus, and the offer of the Notes, may be legally restricted in some
countries. If you wish to distribute this prospectus supplement or the

S-4
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424(B)(2)
Table of Contents
accompanying prospectus, you should observe any restrictions. This prospectus supplement and the accompanying prospectus should not be considered an
offer and it is prohibited to use them to make an offer, in any state or country which prohibits the offering.
The Notes may not be offered or sold in Korea, directly or indirectly, or to any resident of Korea, except as permitted by Korean law. For
more information, see "Underwriting--Foreign Selling Restrictions."
INFORMATION PRESENTED ACCURATE AS OF DATE OF DOCUMENT
This prospectus supplement and the accompanying prospectus are the only documents on which you should rely for information about the offering.
This prospectus supplement may only be used for the purposes for which it has been published. We have authorized no one to provide you with different
information. You should not assume that the information in this prospectus supplement or the accompanying prospectus is accurate as of any date other
than the date on the front of each document.

S-5
Table of Contents
SUMMARY OF THE OFFERING
This summary highlights selected information from this prospectus supplement and the accompanying prospectus and may not contain all of the
information that is important to you. To understand the terms of our Notes, you should carefully read this prospectus supplement and the
accompanying prospectus.
The Notes
We are offering US$600,000,000 aggregate principal amount of floating rate notes due November 1, 2022 (the "Floating Rate Notes"),
US$400,000,000 aggregate principal amount of 2.50% notes due November 1, 2020 (the "2020 Notes") and US$1,000,000,000 aggregate principal
amount of 3.00% notes due November 1, 2022 (the "2022 Notes", and together with the 2020 Notes, the "Fixed Rate Notes"). All references to the
"Notes" are to the Floating Rate Notes, the 2020 Notes and the 2022 Notes, collectively.
The Notes will be issued in minimum denominations of US$200,000 principal amount and integral multiples of US$1,000 in excess thereof.
The Notes will be represented by one or more global securities registered in the name of a nominee of The Depository Trust Company ("DTC"), as
depositary.
We do not have any right to redeem the Notes prior to maturity.
Floating Rate Notes
The Floating Rate Notes will bear interest for each Interest Period (as defined herein) at a rate equal to Three-Month USD LIBOR plus 0.925%
per annum, payable quarterly in arrears on February 1, May 1, August 1 and November 1 of each year. The first interest payment on the Floating Rate
Notes will be made on February 1, 2018 in respect of the period from (and including) November 1, 2017 to (but excluding) February 1, 2018. Interest
on the Floating Rate Notes will accrue from November 1, 2017 and will be computed on the basis of the actual number of days in the applicable
Interest Period divided by 360.
Fixed Rate Notes
The 2020 Notes will bear interest at a rate of 2.50% per annum, and the 2022 Notes will bear interest at a rate of 3.00% per annum, in each case
payable semi-annually in arrears on May 1 and November 1 of each year. The first interest payment on the Fixed Rate Notes will be made on May 1,
2018 in respect of the period from (and including) November 1, 2017 to (but excluding) May 1, 2018. Interest on the Fixed Rate Notes will accrue
from November 1, 2017 and will be computed based on a 360-day year consisting of twelve 30-day months.
See "Description of the Notes--Payment of Principal and Interest."
Listing
Applications have been made to the SGX-ST for the listing and quotation of the Notes on the SGX-ST. Settlement of the Notes is not
conditioned on obtaining the listing. There can be no assurance that such listing will be obtained for the Notes. For so long as the Notes are listed on
the SGX-ST and the rules of the SGX-ST so require, the Notes will be traded on the SGX-ST in a minimum board lot size of S$200,000 (or its
equivalent in foreign currencies). Accordingly, the Notes are expected to be traded in a minimum board lot size of US$200,000.

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424(B)(2)

S-6
Table of Contents
Form and settlement
We will issue each series of the Notes in the form of one or more fully registered global notes, registered in the name of a nominee of DTC.
Except as described in the accompanying prospectus under "Description of the Securities--Description of Debt Securities--Global Securities," the
global notes will not be exchangeable for Notes in definitive registered form, and will not be issued in definitive registered form. Financial
institutions, acting as direct and indirect participants in DTC, will represent your beneficial interests in the global notes. These financial institutions
will record the ownership and transfer of your beneficial interest through book-entry accounts. You may hold your beneficial interests in the Notes
through Euroclear Bank S.A./N.V. ("Euroclear") or Clearstream Banking, société anonyme ("Clearstream") if you are a participant in such systems, or
indirectly through organizations that are participants in such systems. Any secondary market trading of book-entry interests in the Notes will take
place through DTC participants, including Euroclear and Clearstream. See "Clearance and Settlement--Transfers Within and Between DTC,
Euroclear and Clearstream."
Further Issues
We may from time to time, without the consent of the holders of the Notes, create and issue additional debt securities with the same terms and
conditions as any series of the Notes in all respects so that such further issue shall be consolidated and form a single series with the relevant series of
the Notes. We will not issue any such additional debt securities unless the issuance would constitute a "qualified reopening" for U.S. federal income
tax purposes or such additional debt securities would otherwise be part of the same "issue" for U.S. federal income tax purposes.
Delivery of the Notes
We expect to make delivery of the Notes, against payment in same-day funds on or about November 1, 2017, which we expect will be the sixth
business day following the date of this prospectus supplement, referred to as "T+6." You should note that initial trading of the Notes may be affected
by the T+6 settlement. See "Underwriting--Delivery of the Notes."
Underwriting
KEXIM Asia Limited, one of the underwriters, is our affiliate and has agreed to offer and sell the Notes only outside the United States to non-
U.S. persons. See "Underwriting--Relationship with the Underwriters."

S-7
Table of Contents
USE OF PROCEEDS
We will use the net proceeds from the sale of the Notes for our general operations, including extending foreign currency loans and repayment of our
maturing debt and other obligations.

S-8
Table of Contents
RECENT DEVELOPMENTS
This section provides information that supplements the information about our bank and the Republic included under the headings corresponding to
the headings below in the accompanying prospectus dated June 30, 2017. Defined terms used in this section have the meanings given to them in the
accompanying prospectus. If the information in this section differs from the information in the accompanying prospectus, you should rely on the
information in this section.
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424(B)(2)
THE EXPORT-IMPORT BANK OF KOREA
Overview
As of June 30, 2017, we had ?74,122 billion of outstanding loans, including ?43,582 billion of outstanding export credits, ?25,396 billion of
outstanding overseas investment credits and ?4,125 billion of outstanding import credits, as compared to ?76,724 billion of outstanding loans, including ?
42,628 billion of outstanding export credits, ?27,527 billion of outstanding overseas investment credits and ?3,741 billion of outstanding import credits as of
December 31, 2016.
Capitalization
As of June 30, 2017, our authorized capital was ?15,000 billion and our capitalization was as follows:

June 30, 2017(1)
(billions of Won)

(unaudited)

Long-Term Debt(2)(3)(4)(5):

Borrowings in Korean Won

?
--
Borrowings in Foreign Currencies

5,289
Export-Import Financing Debentures

44,889

Total Long-term Debt

?
50,178

Capital:

Paid-in Capital(6)

?
11,815
Retained Earnings

981
Legal Reserve

329
Voluntary Reserve

--
Reserve for Bad Loan(7)

206
Unappropriated Retained Earnings

445
Additional Paid-in Capital

(124)
Other Components of Equity(8)

159

Total Capital

?
12,831

Total Capitalization

?
63,009

(1)
Except as described in this prospectus supplement, there has been no material adverse change in our capitalization since June 30, 2017.
(2)
We have translated borrowings in foreign currencies as of June 30, 2017 into Won at the rate of ?1,139.6 to US$1.00, which was the market average
exchange rate as announced by the Seoul Monetary Brokerage Services Ltd., on June 30, 2017.
(3)
As of June 30, 2017, we had contingent liabilities totaling ?50,621 billion, which consisted of ?46,016 billion under confirmed guarantees and ?
4,605 billion under unconfirmed guarantees issued on behalf of our clients.
(4)
As of June 30, 2017, we had entered into 406 interest rate related derivative contracts with a notional amount of ?38,443 billion and 735 currency
related derivative contracts with a notional amount of ?34,723 billion in accordance with our policy to hedge interest rate and currency risks.

S-9
Table of Contents
(5)
All of our borrowings, whether domestic or international, are unsecured and unguaranteed.
(6)
As of June 30, 2017, authorized ordinary share capital was ?15,000 billion and issued fully-paid ordinary share capital was ?11,815 billion. See "--
Business--Government Support and Supervision."
(7)
If the estimated allowance for credit loss determined by K-IFRS for accounting purposes is lower than that for regulatory purposes as required by
Supervisory Regulation of Banking Business, we reserve such difference as regulatory reserve for bad loans. See "--Financial Statements and the
Auditors--Notes to Separate Financial Statements as of and for the six months ended June 30, 2017 and 2016--Note 24."
(8)
See "--Financial Statements and the Auditors--Notes to Separate Financial Statements as of and for the six months ended June 30, 2017 and 2016--
Note 22."
Business
Government Support and Supervision
The Government contributed to our capital (i) ?125 billion in the form of shares of Yeosu Gwangyang Port Authority and ?125 billion in the form of
shares of Incheon Port Authority in May 2017 and (ii) ?1,167 billion in the form of shares of Korea Aerospace Industries Ltd. in June 2017. As of June 30,
2017, our paid-in capital was ?11,815 billion compared to ?10,398 billion as of December 31, 2016.
Selected Financial Statement Data
You should read the following financial statement data together with our separate financial statements and notes included in this prospectus
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424(B)(2)
supplement. The following tables present selected separate financial information as of June 30, 2017 and December 31, 2016 and for the six months ended
June 30, 2017 and 2016, which has been derived from our unaudited separate K-IFRS financial statements as of June 30, 2017 and for the six months
ended June 30, 2017 and 2016 included in this prospectus supplement:

Six Months Ended

June 30,

2017

2016

(billions of Won)

(unaudited)

Income Statement Data

Total Interest Income

?
1,303
?
1,083
Total Interest Expense

785

680
Net Interest Income (Expenses)

518

403
Operating Income (Loss)

579

(1,235)
Income (Loss) before Income Tax

582

(1,239)
Income Tax Expense (Benefit)

137

(301)
Net Income (Loss)

445

(938)
As of
June 30,
As of
2017
December 31,

(unaudited)
2016

(billions of Won)

Balance Sheet Data

Total Loan Credits(1)

? 74,122
?
76,724
Total Borrowings(2)

68,759

71,880
Total Assets

86,758

89,775
Total Liabilities

73,927

78,555
Total Shareholders' Equity

12,831

11,220

(1)
Gross amount, which includes bills bought, foreign exchange bought, call loans, inter-bank loans in foreign currency advance for customers and
others and before deducting valuation adjustment of loans in foreign currencies, allowance for loan losses and deferred loan origination fees.
(2)
Includes borrowings and debentures.

S-10
Table of Contents
For the six months ended June 30, 2017, we had net income of ?445 billion compared to net loss of ?938 billion for the six months ended June 30,
2016.
The principal factors for the net income of ?445 billion in the first half of 2017 compared to the net loss of ?938 billion in the corresponding period
of 2016 included:

· reversal of impairment loss on guarantees of ?656 billion in the first half of 2017 compared to impairment loss on guarantees of ?788 billion in

the corresponding period of 2016, primarily due to a decrease in guarantees as well as an improvement in guarantee quality;

· an increase in net interest income to ?518 billion in the first half of 2017 from ?403 billion in the corresponding period of 2016, primarily due

to an increase in interest income resulting mainly from increased Loan Credits; and

· a decrease in impairment loss on loans to ?756 billion in the first half of 2017 from ?836 billion in the corresponding period of 2016, primarily

due to an improvement in loan quality.
The above factors were partially offset by income tax expense of ?137 billion in the first half of 2017 compared to income tax benefit of ?301 billion
in the corresponding period of 2016, primarily due to income before income tax of ?582 billion in the first half of 2017 compared to loss before income tax
of ?1,239 billion in the corresponding period of 2016.
As of June 30, 2017, our total assets decreased to ?86,758 billion from ?89,775 billion as of December 31, 2016, primarily due to a decrease in Loan
Credits to ?74,122 billion as of June 30, 2017 from ?76,724 billion as of December 31, 2016.
As of June 30, 2017, our total liabilities decreased to ?73,927 billion from ?78,555 billion as of December 31, 2016. The decrease in liabilities was
primarily due to a decrease in debentures to ?60,456 billion as of June 30, 2017 from ?62,119 billion as of December 31, 2016 and a decrease in
borrowings to ?8,303 billion as of June 30, 2017 from ?9,761 billion as of December 31, 2016.
The decrease in assets and liabilities was primarily due to a decrease in the volume of loans and debt, respectively. The appreciation of the Won
against the U.S. dollar as of June 30, 2017 compared to December 31, 2016 magnified the effect of the decrease in the volume of loans and debt, as a
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majority of our assets and liabilities consisted of foreign currency loans and debt (including a significant percentage in U.S. dollar).
As of June 30, 2017, our total shareholders' equity increased to ?12,831 billion from ?11,220 billion as of December 31, 2016, primarily due to an
increase in paid-in capital to ?11,815 billion as of June 30, 2017 from ?10,398 billion as of December 31, 2016.
Operations
Loan Operations
In the first half of 2017, we provided total loans of ?26,329 billion, a decrease of 8% from the corresponding period of 2016.
Export Credits
As of June 30, 2017, export credits in the amount of ?43,582 billion represented 60% of our total outstanding Loan Credits. Our disbursements of
export credits amounted to ?17,640 billion in the first half of 2017, a decrease of 3% from the corresponding period of 2016, which was mainly due to
decreased activity for construction of industrial plants. The appreciation of the Won against the U.S. dollar as of June 30, 2017

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compared to June 30, 2016 magnified the effect of the decrease in the volume of export credits in the first half of 2017, as a majority of our export credits
consisted of foreign currency credits (including a significant percentage in U.S. dollars).
Overseas Investment Credits
As of June 30, 2017, overseas investment credits amounted to ?25,396 billion, representing 35% of our total outstanding Loan Credits. Our
disbursements of overseas investment credits in the first half 2017 decreased by 33% to ?5,078 billion from the corresponding period of 2016, primarily
due to decreased demand in overseas investment and project credits. The appreciation of the Won against the U.S. dollar as of June 30, 2017 compared to
June 30, 2016 magnified the effect of the decrease in the volume of overseas investment credits in the first half of 2017, as a majority of our overseas
investment credits consisted of foreign currency credits (including a significant percentage in U.S. dollars).
Import Credits
As of June 30, 2017, import credits in the amount of ?4,125 billion represented 6% of our total outstanding Loan Credits. Our disbursements of
import credits amounted to ?3,611 billion in the first half of 2017, an increase of 15% over the corresponding period of 2016, which was mainly due to an
increase in demand for financing for raw materials used for export and domestic consumption. The appreciation of the Won against the U.S. dollar as of
June 30, 2017 compared to June 30, 2016 partially offset the effect of the increase in the volume of import credits in the first half of 2017, as a significant
portion of our import credits consisted of foreign currency credits (including a significant percentage in U.S. dollars).
Guarantee Operations
Guarantee commitments as of June 30, 2017 decreased to ?50,621 billion from ?59,679 billion as of December 31, 2016. Guarantees we had
confirmed as of June 30, 2017 decreased to ?46,016 billion from ?53,615 billion as of December 31, 2016.
For further information regarding our guarantee and letter of credit operations, see "Notes to Separate Financial Statements of June 30, 2017 and
2016--Note 36".
Description of Assets and Liabilities
Total Credit Exposure
The following table sets out our Credit Exposure as of June 30, 2017, categorized by type of exposure extended:

June 30, 2017

(billions of Won, except

for percentages)

A

Loans in Won

?
17,785

15%
B

Loans in Foreign Currencies

52,238

44
C

Loans (A+B)

70,023

60
D

Other Loans(1)

4,098

3
E

Loan Credits (C+D)

74,122

63
F

Allowances for Possible Loan Losses

(2,564)

(2)
G

Loan Credits including PVD (E-F)

71,557

61
H

Guarantees

46,016

39
I

Credit Exposure (G+H)

? 117,573
100%

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(1)
Includes call loans, inter-bank loans, other loans.

S-12
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Loan Credits by Geographic Area
The following table sets out the total amount of our outstanding Loan Credits (including call loans and inter-bank loans in foreign currency) as of
June 30, 2017, categorized by geographic area(1)(2):

As % of
June 30, 2017

June 30, 2017(1)
Total

(billions of Won, except for percentages)

Asia(2)

?
54,699

74%
Europe

5,004

7
America

10,671

14
Africa

3,748

5

Total

?
74,122

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.
Individual Exposure
As of June 30, 2017, our largest Credit Exposure was to Daewoo Shipbuilding & Marine Engineering ("DSME") in the amount of ?9,569 billion, a
decrease from ?10,170 billion as of December 31, 2016, primarily due to a decrease in refund guarantees.
As of June 30, 2017, our second and third largest Credit Exposures were to Samsung Heavy Industries in the amount of ?4,349 billion and to
Hyundai Heavy Industries in the amount of ?3,251 billion.
The following table sets out our five largest Credit Exposures as of June 30, 2017(1):

Rank
Name of Borrower

Loans
Guarantees
Total

(billions of Won)

1

Daewoo Shipbuilding & Marine Engineering

2,914

6,655
9,569
2

Samsung Heavy Industries

1,005

3,344
4,349
3

Hyundai Heavy Industries

1,127

2,123
3,251
4

Hanwha Engineering & Construction

--

2,666
2,666
5

Doosan Heavy Industries & Construction

824

1,608
2,432

(1)
Excludes loans and guarantees extended to affiliates.
Source: Internal accounting records.
As of June 30, 2017, our exposure to STX Offshore & Shipbuilding decreased to ?322 billion from ?531 billion as of December 31, 2016, primarily
due to a decrease in refund guarantees. As of June 30, 2017, our exposure to Sungdong Shipbuilding & Marine Engineering decreased to ?2,390 billion
from ?2,943 billion as of December 31, 2016, primarily due to a decrease in refund guarantees and the redemption of certain existing loans.

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Asset Quality
Asset Classifications
The following table provides information on our asset quality and loan loss reserves as of June 30, 2017:

As of June 30, 2017

Loan
Loan Loss

Amount (1)
Reserve(2)
Normal

?104,074
?
306
Precautionary

10,211

787
https://www.sec.gov/Archives/edgar/data/873463/000119312517320018/d449011d424b2.htm[10/26/2017 9:44:27 AM]

424(B)(2)
Sub-standard

531

126
Doubtful

2,479

937
Estimated Loss

1,824

1,340
Total

?119,119
?
3,496

(1)
These figures include loans (excluding interbank loans and call loans), domestic usance, bills bought, foreign exchange bought, advances for
customers, and confirmed acceptances and guarantees.
(2)
These figures include present value discount.
Reserves for Credit Losses
As of June 30, 2017, the amount of our non-performing assets was ?4,833 billion, a decrease of 16% from ?5,778 billion as of December 31, 2016.
As of June 30, 2017, our non-performing asset ratio was 4.1%, compared to 4.5% as of December 31, 2016.
We cannot provide any assurance that our current level of exposure to non-performing assets will not increase 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.
The following table sets forth information regarding our loan loss reserves as of June 30, 2017:

June 30, 2017

(billions of Won,

except for percentages)
Loan Loss Reserve (A)

?
3,496
NPA (B)(1)

4,833
Total Equity (C)

12,831
Reserve to NPA (A/B)

72%
Equity at Risk (B-A)/C

10%

(1)
Non-performing assets, which are defined as (a) assets classified as doubtful and estimated loss, (b) assets for which principal or interest payments
are delinquent by more than 3 months or (c) assets exempted from interest payments due to restructuring or rescheduling.
Source: Internal accounting records.
Investments
As of June 30, 2017, our total investment in securities amounted to ?9,110 billion, representing 11% of our total assets.

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Table of Contents
The following table sets out the composition of our investment securities as of June 30, 2017:

Type of Investment Securities

Amount
%

(billions of Won)

Available-for-Sale Securities

?6,442
71%
Held-to-Maturity Securities

89

1
Investments in Associates and Subsidiaries

2,580
28

Total

?9,110
100%

For further information relating to the classification guidelines and methods of valuation of our financial instruments (including securities), see
"Notes to Separate Financial Statements of June 30, 2017 and 2016--Note 5".
Guarantees and Acceptances and Contingent Liabilities
As of June 30, 2017, we had issued a total amount of ?46,016 billion in confirmed guarantees and acceptances, of which ?38,494 billion, representing
84% of the total amount, was classified as normal and ?6,933 billion, representing 15% of the total amount, was classified as precautionary, and ?
589 billion, representing 1% of the total amount, was classified as substandard or below.
Derivatives
As of June 30, 2017, our outstanding loans made at floating rates of interest totaled approximately ?51,953 billion, whereas our outstanding
borrowings made at floating rates of interest totaled approximately ?52,922 billion, including those raised in Australian dollar, Swiss franc, Hong Kong
dollar, Brazil real, Thai baht, Czech koruna and Euro and swapped into U.S. dollar floating rate borrowings. As of June 30, 2017, we had entered into 406
interest rate related derivative contracts with a notional amount of ?38,443 billion and had entered into 735 currency related derivative contracts with a
notional amount of ?34,723 billion. See "Notes to Separate Financial Statements of June 30, 2017 and 2016--Note 20".
https://www.sec.gov/Archives/edgar/data/873463/000119312517320018/d449011d424b2.htm[10/26/2017 9:44:27 AM]

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