Article 1 (Purpose)

The purpose of these Regulations is to set forth the provisions for the composition and operation of the Risk Management Committee (the “Committee”), as prescribed by the Articles of Incorporation and the Regulations of the Board of Directors.

Article 2 (Composition)

  1. The Committee shall consist of eight (8) or fewer directors, who shall be appointed by the Board of Directors. However, the Committee shall include at least one (1) member who has prior experience working in the field of finance or accounting or at the treasury department of a finance or non-finance company. Also, outside directors shall account for more than one half (1/2) of all Committee members.
  2. The chairman of the Committee shall be appointed by a resolution of the Committee from among the outside directors serving on the Committee.
  3. If the chairman of the Committee is absent or otherwise unable to carry out his or her duties due to illness or injury, the position of chairman shall be filled by another Committee member in accordance with the order of priority previously established by the Committee.

Article 3 (Duties)

The Committee’s functions are to determine and approve matters entrusted to it by the Board of Directors and conduct overall risk management for the Group so as to identify, quantify, monitor, and control various types of risks that arise in the course of the management of the Group in a timely manner.

Article 4 (Convening of Committee Meetings)

  1. In principle, the meetings of the Committee shall be held regularly once every quarter. The meetings may also be convened when deemed necessary by the chairman of the Committee or upon an affirmative vote of more than one third (1/3) of members.
  2. Each meeting shall be convened by the chairman upon the determined date, and the Committee members shall be given notice of the meeting at least seven (7) days prior to such date. However, with the consent thereon of all Committee members, such notice may not be given.

Article 5 (Matters for Resolution)

  1. The Committee shall pass resolutions on each of the following matters.
    1. Establishment of risk management policies and strategies;
    2. Establishment of limits on risk exposures of the Company and each of its affiliated companies;
    3. Approval of appropriate investment limits or allowable loss limits;
    4. Creation and revision of various regulations related to risk;
    5. Approval of risk measurement methods and measurement models requiring the approval of financial supervisory authorities;
    6. Matters related to the structure and assignment of tasks regarding the risk management organization;
    7. Matters related to the introduction and operation of risk management systems (however, in cases where the total amount of investment required for the system is less than KRW 1 billion, the Committee may delegate the decision to the Risk Management Sub-committee);
    8. Matters related to the establishment of risk limits and approval of transactions exceeding those limits:
      • a) Credit limit of a single corporation and single borrower;
      • b) Credit limits by country and industry;
      • c) Other credit limits, as deemed necessary by the Board of Directors or the Committee; or
    9. Other matters deemed necessary by the Board of Directors or the Committee.
  2. For the implementation of resolutions on any of the matters listed under Paragraph ① above, the Committee shall determine the relevant details and entrust the Risk Management Sub-committee with addressing such details.
  3. The Committee may decide on matters for which resolutions were already passed by the Risk Management Sub-committee.
  4. The Committee shall report to the Board of Directors on all matters for which resolutions are passed by the Committee.

Article 5-2 (Matters for Deliberation)

The Committee shall deliberate on each of the following matters.

  1. Matters that require prior deliberation on risks associated with important management issues of the Group, including each of the following, prior to a resolution thereof by the Board of Directors, among the list of resolutions provided under Article 7 (Resolutions) of the Regulations of the Board of Directors
    1. Mergers and acquisitions
      • a) Important changes to the organization of the Company, such as mergers, acquisitions, divisions, etc.
      • b) Provision of capital investment and credit line to a subsidiary of the Group in relation to a merger and acquisition implemented by said subsidiary
    2. Exploration of new business
      • a) Advancement into a new business sector through the establishment or acquisition of a new subsidiary
      • b) Signing of important agreements for business partnership or equity participation with other financial institutions, etc. in order to enter a new business sector
    3. Large-scale investment
      • a) Equity investment, credit line extension, or investment valued at an amount in excess of 10/100 of the capital of the Group
      • b) Signing of an important agreement valued at an amount in excess of 10/100 of the capital of the Group (excluding services agreements)
      • c) The capital of the Group mentioned in Subparagraphs 3 (a) and 3 (b) above refers to capital defined under Article 7 (Resolution), Paragraph ①, Subparagraph 6 (d) of the Regulations of the Board of Directors.
  2. Establishment of performance evaluation guidelines and the results of evaluation for executive officers in charge of risk management of the Company and affiliated companies, in accordance with the performance evaluation guidelines for executive officers of the Group
  3. Other matters deemed necessary by the Board of Directors or the Committee

    [This article was created on December 1, 2016.]

Article 6 (Matters to Report)

The Company shall report each of the following matters to the Committee.

  1. Status of the progress of resolutions passed by the Committee;
  2. Status of risk management and risk limit management by sector;
  3. Resolutions of the Risk Management Sub-committee and risk management committees of affiliated companies;
  4. Status of the operation of the credit rating system and results of the evaluation thereof;
  5. Major changes and exceptions that could have a significant impact on the credit rating system;
  6. Results of deliberations on risks that were submitted to the Management Executive Committee, in accordance with Article 6-2 (Matters for Deliberation), Subparagraph 4 of the Regulations of the Risk Management Sub-committee;
  7. Other matters deemed necessary by the Board of Directors or the Committee.

Article 7 (Method of Resolution)

  1. All resolutions of the Committee shall be adopted by an affirmative vote of more than one half (1/2) of all members.
  2. The Committee may allow all or some members to take part in the adoption of a resolution by means of a communication system that transmits and receives visual images and sounds simultaneously, without such members being physically present for the meeting. In such cases, the relevant members shall be deemed to have attended the meeting.
  3. Any Committee members with a special interest in a matter upon which the Committee is deliberating shall not exercise their voting rights, and such members shall not be included among the members of the Committee responsible for counting votes.

Article 8 (Implementation of Resolutions)

The resolutions and instructions of the Committee shall be implemented by the competent department, and such department shall report the results of such implementation to the Committee.

Article 9 (Attendance of Relevant Persons)

If deemed necessary, the chairman may have any relevant internal or external persons attend Committee meetings to provide their opinions on specific issues.

Article 10 (Minutes)

  1. The deliberations of the Committee meetings shall be recorded in minutes.
  2. The minutes of Committee meetings shall include the agenda, summary of the meetings, results thereof, and objecting members and their reasons thereto and shall be affixed with the seals or signatures of all members in attendance.

Article 11 (Department in Charge)

  1. The Risk Management Team shall be responsible for the administration of all working-level duties related to the operation of the Committee.
  2. The Group CRO shall serve as the secretary of the Committee, and shall be responsible for preparing the Committee meetings and assisting the Committee chairman in conducting the meetings.

Article 12 (Risk Management Sub-committee)

The Committee may form a Risk Management Sub-committee for the purpose of ensuring the effective performance of risk management operations.

Article 13 (Revision or Abolition of Regulations)

Any revisions or abolitions of these Regulations shall be implemented by a resolution of the Board of Directors. However, simple changes to the phrasing or content of these Regulations due to revisions of relevant laws or internal regulations may be carried out by the Group CRO.

SUPPLEMENTARY PROVISIONS

These Regulations shall be effective from December 1, 2005.

SUPPLEMENTARY PROVISIONS

These Regulations shall be effective from March 28, 2008.

SUPPLEMENTARY PROVISIONS

These Regulations shall be effective from March 23, 2012.

SUPPLEMENTARY PROVISIONS

These Regulations shall be effective from July 14, 2012.

SUPPLEMENTARY PROVISIONS

These Regulations shall be effective from December 27, 2013.

SUPPLEMENTARY PROVISIONS

These Regulations shall be effective from April 25, 2014.

SUPPLEMENTARY PROVISIONS

These Regulations shall be effective from February 6, 2015.

SUPPLEMENTARY PROVISIONS

These Regulations shall be effective from April 29, 2015.

SUPPLEMENTARY PROVISIONS

These Regulations shall be effective from July 24, 2015.

SUPPLEMENTARY PROVISIONS

These Regulations shall be effective from August 1, 2016.

SUPPLEMENTARY PROVISIONS

These Regulations shall be effective from December 1, 2016.