Filed Pursuant to Rule 424(b)(5)
Registration Statement No. 333-272847

The information in this preliminary prospectus supplement is not complete and may be changed. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. This preliminary prospectus supplement and the accompanying prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED JANUARY 2, 2024

PRELIMINARY PROSPECTUS SUPPLEMENT

(To Prospectus Dated June 30, 2023)

 

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$                 % Sustainability Notes due 20        

US$                 % Notes due 20        

US$                 % Notes due 20        

Our US$         aggregate principal amount of sustainability notes due 20         (the “20         Sustainability Notes”) will bear interest at a rate of         % per annum, our US$         aggregate principal amount of notes due 20         (the “20         Notes”) will bear interest at a rate of         % per annum and our US$         aggregate principal amount of notes due 20         (the “20         Notes,” and together with the 20         Sustainability Notes and the 20         Notes, the “Notes”) will bear interest at a rate of         % per annum. Interest on the Notes is payable semi-annually in arrears on January          and July          of each year, beginning on July         , 2024.

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 notes registered in the name of a nominee of The Depository Trust Company (“DTC”), 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.

 

 

 

20         Sustainability Notes

20         Notes

20         Notes

Per Note

Total

Per Note

Total

Per Note

Total

Public offering price

%

US$

%

US$

%

US$

Underwriting discounts

%

US$

%

US$

%

US$

Proceeds to us, before expenses

%

US$

%

US$

%

US$

In addition to the initial public offering price, you will have to pay for accrued interest, if any, from (and including) January         , 2024.

Applications will be 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 we will obtain or be able to maintain a listing of the Notes on the SGX- ST. The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained in 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.

The underwriters expect to deliver the Notes to investors through the book-entry facilities of DTC on or about January         , 2024.

 

 

Joint Bookrunners and Lead Managers

 

ANZ
		BNP PARIBAS
				HSBC
						J.P. Morgan
								MUFG
										Standard Chartered Bank

Joint Lead Manager

Korea Investment & Securities

Prospectus Supplement Dated January         , 2024

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

Prospectus Supplement

 

Summary of the Offering		S-7
Use of Proceeds		S-9
Recent Developments		S-13
Description of the Notes		S-102
Clearance and Settlement		S-105
Taxation		S-108
Underwriting		S-109
Legal Matters		S-116
Official Statements and Documents		S-116
General Information		S-116

 

S-2

Prospectus

 

		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			15
Debt			25
Credit Policies, Credit Approval and Risk Management			27
Capital Adequacy			28
Overseas Operations			29
Property			30
Management and Employees			30
Tables and Supplementary Information			32
Financial Statements and the Auditors			41
The Republic of Korea			136
Land and History			136
Government and Politics			138
The Economy			141
Principal Sectors of the Economy			149
The Financial System			156
Monetary Policy			161
Balance of Payments and Foreign Trade			165
Government Finance			172
Debt			175
Tables and Supplementary Information			178
Description of the Securities			181
Description of Debt Securities			181
Description of Warrants			187
Terms Applicable to Debt Securities and Warrants			188
Description of Guarantees			189
Limitations on Issuance of Bearer Debt Securities and Bearer Warrants			190
Taxation			191
Korean Taxation			191
United States Tax Considerations			194
Plan of Distribution			203
Legal Matters			204
Authorized Representatives in the United States			204
Official Statements and Documents			204
Experts			204
Forward-Looking Statements			205
Further Information			207

 

S-3

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 “W,” “Won” or “Korean won” are to the lawful currency of Korea, and references to “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.

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/or information are to financial statements and/or 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, 2023. 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. 333-272847, 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.

IMPORTANT NOTICE TO PROSPECTIVE INVESTORS

Prospective investors should be aware that certain intermediaries in the context of this offering of the Notes, including certain underwriters, are “capital market intermediaries” (“CMIs”) subject to Paragraph 21 of the SFC Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission of Hong Kong (the “SFC Code”). This notice to prospective investors is a summary of certain obligations the SFC Code imposes on such CMIs, which require the attention and cooperation of prospective investors. Certain CMIs may also be acting as “overall coordinators” (“OCs”) for this offering and are subject to additional requirements under the SFC Code.

 

S-4

Prospective investors who are the directors, employees or major shareholders of The Export-Import Bank of Korea (the “Issuer”), a CMI or its group companies would be considered under the SFC Code as having an association (“Association”) with the Issuer, the CMI or the relevant group company. Prospective investors associated with the Issuer or any CMI (including its group companies) should specifically disclose this when placing an order for the Notes and should disclose, at the same time, if such orders may negatively impact the price discovery process in relation to this offering.

Prospective investors who do not disclose their Associations are hereby deemed not to be so associated. Where prospective investors disclose their Associations but do not disclose that such order may negatively impact the price discovery process in relation to this offering, such order is hereby deemed not to negatively impact the price discovery process in relation to this offering. Prospective investors should ensure, and by placing an order prospective investors are deemed to confirm, that orders placed are bona fide, are not inflated and do not constitute duplicated orders (i.e., two or more corresponding or identical orders placed via two or more CMIs). If a prospective investor is an asset management arm affiliated with any underwriter, such prospective investor should indicate when placing an order if it is for a fund or portfolio where the underwriter or its group company has more than a 50 per cent. interest, in which case it will be classified as a “proprietary order” and subject to appropriate handling by CMIs in accordance with the SFC Code and should disclose, at the same time, if such “proprietary order” may negatively impact the price discovery process in relation to this offering. Prospective investors who do not indicate this information when placing an order are hereby deemed to confirm that their order is not a “proprietary order”. If a prospective investor is otherwise affiliated with any underwriter, such that its order may be considered to be a “proprietary order” (pursuant to the SFC Code), such prospective investor should indicate to the relevant underwriter when placing such order. Prospective investors who do not indicate this information when placing an order are hereby deemed to confirm that their order is not a “proprietary order”. Where prospective investors disclose such information but do not disclose that such “proprietary order” may negatively impact the price discovery process in relation to this offering, such “proprietary order” is hereby deemed not to negatively impact the price discovery process in relation to this offering.

Prospective investors should be aware that certain information may be disclosed by CMIs (including private banks) which is personal and/or confidential in nature to the prospective investor. By placing an order, prospective investors are deemed to have understood and consented to the collection, disclosure, use and transfer of such information by the underwriters and/or any other third parties as may be required by the SFC Code, including to the Issuer, any OCs, relevant regulators and/or any other third parties as may be required by the SFC Code, it being understood and agreed that such information shall only be used for the purpose of complying with the SFC Code, during the bookbuilding process for this offering. Failure to provide such information may result in that order being rejected.

NOTIFICATION UNDER SECTION 309B(1)(C) OF THE SECURITIES AND FUTURES ACT

2001 OF SINGAPORE

We have determined, and hereby notify all relevant persons (as defined in Section 309A(1) of the SFA), that the Notes are prescribed capital markets products (as defined in the Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

UK FINANCIAL PROMOTION LEGEND

This communication is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth companies, and other

 

S-5

persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). The Notes are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such Notes will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

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 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-6

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$         aggregate principal amount of         % sustainability notes due January         , 20         (the “20         Sustainability Notes”), US$         aggregate principal amount of         % notes due January         , 20         (the “20         Notes”) and US$         aggregate principal amount of         % notes due January         , 20         (the “20         Notes,” and together with the 20         Sustainability Notes and the 20         Notes, the “Notes”).

The 20         Sustainability Notes will bear interest at a rate of         % per annum, payable semi-annually in arrears on January          and July          of each year. The first interest payment on the 20         Sustainability Notes will be made on July         , 2024 in respect of the period from (and including) January         , 2024 to (but excluding) July         , 2024. Interest on the 20         Sustainability Notes will accrue from January         , 2024 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—20         Sustainability Notes.”

The 20         Notes will bear interest at a rate of         % per annum, payable semi-annually in arrears on January          and July          of each year. The first interest payment on the 20         Notes will be made on July         , 2024 in respect of the period from (and including) January         , 2024 to (but excluding) July         , 2024. Interest on the 20         Notes will accrue from January         , 2024 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—20         Notes.”

The 20         Notes will bear interest at a rate of         % per annum, payable semi-annually in arrears on January          and July          of each year. The first interest payment on the 20         Notes will be made on July         , 2024 in respect of the period from (and including) January         , 2024 to (but excluding) July         , 2024. Interest on the 20         Notes will accrue from January         , 2024 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—20         Notes.”

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 notes 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.

Listing

Applications will be made to the SGX-ST for the listing and quotation of the Notes on the SGX-ST. The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained in 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. For so long as the Notes are listed on the SGX-ST and the rules of the SGX-ST so require, the Notes, if traded on the SGX-ST, will be traded in a minimum board lot size of S$200,000 (or its equivalent in foreign currencies). Accordingly, the Notes, if traded on the SGX-ST, will be traded in a minimum board lot size of US$200,000.

 

S-7

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 SA/NV (“Euroclear”) and Clearstream Banking, S.A. (“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 the Notes in all respects so that such further issue shall be consolidated and form a single series with 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 January         , 2024, which we expect will be the fifth business day following the date of this prospectus supplement, referred to as “T+5.” You should note that initial trading of the Notes may be affected by the T+5 settlement. See “Underwriting—Delivery of the Notes.”

Underwriting

Standard Chartered Bank will not effect any offers or sales of any Notes in the United States unless it is through one or more U.S. registered broker-dealers as permitted by the regulations of the Financial Industry Regulatory Authority (“FINRA”).

 

S-8

USE OF PROCEEDS

The 20         Sustainability Notes

Use of Proceeds from the Sale of the 20         Sustainability Notes

We will use an amount equal to the net proceeds from the sale of the 20         Sustainability Notes to finance or refinance, in whole or in part, new or existing projects or assets related to the Eligible Green Projects or Assets (as defined below) and the Eligible Social Projects or Assets (as defined below), as set forth in our Sustainable Finance Framework, which may be updated from time to time and is currently in alignment with the Green Bond Principles 2021, Social Bond Principles 2021 and Sustainability Bond Guidelines 2021 published by the International Capital Markets Association, as well as the Sustainable Blue Economy Finance Principles hosted by the United Nations Environment Programme – Finance Initiative.

An amount equal to the net proceeds from the sale of the 20         Sustainability Notes, which will be designated as “sustainability” notes, will be allocated to a combination of the Eligible Green Projects or Assets and the Eligible Social Projects or Assets (together, the “Eligible Projects or Assets”). Re-financing of the Eligible Projects or Assets will have a look-back period of no longer than 36 months from the date of the issuance of the 20         Sustainability Notes.

Eligible Green Projects or Assets include projects or assets related to: (i) renewable energy, (ii) energy efficiency, (iii) clean transportation, (iv) pollution prevention and control, (v) sustainable marine transportation and (vi) sustainable water and wastewater management, as more fully explained below:

 

•

Renewable energy: infrastructure dedicated to connecting renewable energy production and storage units to the grid (including powerlines and related infrastructure such as substations) and projects aimed at developing the generation and use of renewable energy, such as solar energy, wind energy, marine energy, hydro energy, bioenergy and geothermal energy, as well as fuel cell and other energy storage systems for renewable energy projects and assets;

 

•

Energy efficiency: projects aimed at developing and manufacturing infrastructure, equipment and technology that improve energy efficiency, including but not limited to battery facilities, energy storage facilities, smart grid technologies, waste heat recovery technologies and energy management systems, as well as developing technologies such as LED lighting, smart meters for households and replacement of boilers to improve energy performance;

 

•

Clean transportation: projects aimed at developing and manufacturing low-carbon passenger and freight transportation or related infrastructure, including but not limited to passenger non-public transportation, passenger public transportation, freight rail and road freight, as well as developing, manufacturing and recycling of rechargeable batteries and fuel cell for clean transportation;

 

•

Pollution prevention and control: projects aimed at developing and manufacturing infrastructure equipment and technology for recycling of materials, reuse of materials and recycling of organic waste into biogas or biomass energy;

 

•

Sustainable marine transportation: investments and expenditures related to the construction, design and maintenance of clean and sustainable vessels (“CSRs”), with such CSRs attaining certain criteria established by the EU Taxonomy, and the retrofitting of engines of existing vessels with alternative fuels; and

 

•

Sustainable water and wastewater management: projects aimed at developing and manufacturing infrastructure equipment and technology for provision of clean and/or drinking water, wastewater treatment, prevention of water pollution, increase of water-use efficiency, restoration of hydro-ecological systems and flooding mitigation such as urban drainage systems.

 

S-9

Eligible Social Projects or Assets include projects or assets related to: (i) employment generation, (ii) access to essential services and (iii) socio-economic advancement and empowerment, as more fully explained below:

 

•

Employment generation: financing and re-financing support for the activities of small- and medium-sized enterprises that are negatively impacted by natural disasters, socio-economic crises and/or pandemics, such as the COVID-19 pandemic, as well as small- and medium-sized enterprises that have expanded their headcount by at least 1% in the prior six months;

 

•

Access to essential services: financing and re-financing support for corporations and other types of entities that provide (a) medical and healthcare goods and services to the general public adversely affected by natural disasters, socio-economic crises and/or pandemics, such as the COVID-19 pandemic, and (b) construction or refurbishment of public hospitals, elderly care facilities and/or facilities for people with disabilities; and

 

•

Socio-economic advancement and empowerment: financing and re-financing support for corporations and other types of entities that (a) provide social services or job opportunities for vulnerable social groups and have acquired the Social Enterprise Certification from the Korea Social Enterprise Promotion Agency, and (b) provide family-friendly workplace practices that promote productivity and facilitate women’s empowerment and have acquired the Family-friendly Corporation Certification from the Ministry of Gender Equality and Family.

Project Evaluation and Selection Process

Under our project evaluation and selection process, the Eligible Projects or Assets will be identified and selected using the criteria indicated above by our Sustainable Finance Working Group, which is composed of representatives from our Treasury, ESG Management, Credit Policy, Engineering & Environment Advisory and Finance departments. The Sustainable Finance Working Group will review and monitor the allocation of net proceeds from the sale of the 20         Sustainability Notes on an annual basis, and as necessary, to ensure that the proceeds are allocated to Eligible Projects or Assets in accordance with our Sustainable Finance Framework.

Management of Proceeds

An amount equal to the net proceeds from the issue of the 20         Sustainability Notes will be deposited in our general funding accounts and earmarked for allocation to Eligible Projects or Assets. We will monitor and track the allocation of the net proceeds from the 20         Sustainability Notes through our internal records.

Any balance of the net proceeds from the 20         Sustainability Notes not yet allocated to Eligible Projects or Assets may be managed in cash or cash equivalents or used to repay existing borrowings under our general credit facilities.

Reporting

We will publish a report on the allocation of the net proceeds from the sale of the 20         Sustainability Notes within one year from the date of issuance of the 20         Sustainability Notes and annually thereafter until the proceeds from the sale of the 20         Sustainability Notes have been fully allocated, and as necessary in the event of any material developments. Such reports will include allocation information, such as the aggregate amount allocated to Eligible Projects or Assets, examples of such Eligible Projects or Assets (subject to our confidentiality obligations) and the remaining balance of unallocated proceeds. Impact reporting will be disclosed where possible and will include relevant environmental and/or social impacts associated with the Eligible Projects or Assets that were funded with the net proceeds from the sale of the 20         Sustainability Notes (the “Impact Reports”).

External Review

DNV, an external consultant, has issued an opinion dated May 12, 2023 on our Sustainable Finance Framework (the “Second Party Opinion”). An independent verifier will also be issuing verification reports

 

10

(“Verification Reports”) on the allocation of an amount equal to the net proceeds from the issue of the 20         Sustainability Notes on an annual basis, and more frequently in case of any material changes, starting one year after the issuance of the 20         Sustainability Notes until full allocation. Our Sustainable Finance Framework, the Second Party Opinion and the Impact Reports are, and the Verification Reports will be, publicly available on the following website: https://www.koreaexim.go.kr/he/HPHEOM022M01.

Investment Considerations

The 20         Sustainability Notes may not be a suitable investment for all investors seeking exposure to “green” or “social” assets. We will allocate an amount equivalent to the net proceeds from the issuance of the 20         Sustainability Notes to finance or refinance, in whole or in part, new or existing Eligible Projects or Assets as described in “Use of Proceeds from the Sale of the 20         Sustainability Notes” above in accordance with our Sustainable Finance Framework, which may be updated from time to time and is currently in alignment with the Green Bond Principles 2021, Social Bond Principles 2021 and Sustainability Bond Guidelines 2021 published by the International Capital Markets Association, as well as the Sustainable Blue Economy Finance Principles hosted by the United Nations Environment Programme – Finance Initiative. The examples of Eligible Projects or Assets provided in “Use of Proceeds from the Sale of the 20         Sustainability Notes” above are for illustrative purposes only and no assurance can be provided by us or any of the Underwriters that disbursements for projects with these specific characteristics will be made by us during the term of the 20         Sustainability Notes. Our Sustainable Finance Framework is not incorporated into, and does not form a part of, this prospectus supplement or the accompanying prospectus.

There is currently no market consensus on what precise attributes are required for a particular project or series of notes to be defined as “green” or “social,” and therefore, no assurance can be provided by us or any of the Underwriters to potential investors that selected Eligible Projects or Assets will continue to meet the relevant eligibility criteria or any present or future investor expectations or requirements regarding environmental performance or sustainability impact. Although Eligible Projects or Assets are expected to be selected in accordance with the categories recognized under our Sustainable Finance Framework and are expected to be developed in accordance with relevant legislation and standards, there can be no guarantee that the projects will deliver the environmental or social benefits as anticipated, or that adverse environmental or social impacts will not occur during the design, construction, commissioning and operation of any such projects. In addition, where any negative impacts are insufficiently mitigated, the projects may become controversial and may be criticized by activist groups or other stakeholders.

The Second Party Opinion may not reflect the potential impact of all risks related to the structure, market, additional risks discussed above and other factors that may affect the value of the 20         Sustainability Notes. The Second Party Opinion is not a recommendation to buy, sell or hold securities and is only current as of the date that the Second Party Opinion was initially issued and may be updated, suspended or withdrawn at any time. Currently, the providers of second party opinions and certifications are not subject to any regulatory regime or oversight. In addition, although we have agreed to certain reporting and use of proceeds obligations in connection with certain environmental and social criteria, our failure to comply with such obligations does not constitute a breach or an event of default under the 20         Sustainability Notes. A withdrawal of the Second Party Opinion or any failure by us to use an amount equivalent to the net proceeds from the issuance of the 20         Sustainability Notes on Eligible Projects or Assets or to meet or continue to meet the investment requirements of certain environmentally- or socially-focused investors with respect to the 20         Sustainability Notes may affect the value of the 20         Sustainability Notes and may have consequences for certain investors with portfolio mandates to invest in “green” or “social” assets. The Second Party Opinion is not incorporated into, and does not form a part of, this prospectus supplement or the accompanying prospectus.

In the event that the 20         Sustainability Notes are included in any dedicated “green,” “social,” “environmental,” “sustainable” or other similarly-labelled index, no assurance is given by us or any other person that such listing or admission, or inclusion in such index, satisfies any present or future investor expectations or

 

11

requirements as regards to any investment criteria or guidelines with which such investor or its investments are required to comply, whether by any present or future applicable laws or regulations or by its own constitutive documents or other governing rules or investment portfolio mandates. Each potential investor should carefully consider the factors described in the Sustainable Finance Framework. None of us or the Underwriters make any representation as to whether the 20         Sustainability Notes fulfil the relevant environmental or social criteria or that an amount equal to the net proceeds from the sale of the 20         Sustainability Notes will be used for Eligible Projects or Assets. Moreover, no assurance can be provided with respect to the suitability or reliability of the Second Party Opinion or that the 20         Sustainability Notes will fulfil the criteria to qualify as “green” or “social” bonds. The Underwriters have not undertaken, nor are they responsible for, any assessment of the eligibility of the projects within the definition of Eligible Projects or Assets or the monitoring of the use of proceeds from the offering of the 20         Sustainability Notes. Each potential purchaser of the 20         Sustainability Notes should determine for itself the relevance of the information contained in this prospectus supplement regarding the use of proceeds and its purchase of the 20         Sustainability Notes should be based upon such investigation as it deems necessary.

The 20         Notes and the 20         Notes

We will use the net proceeds from the sale of the 20         Notes and the 20         Notes for our general operations, including extending foreign currency loans and repayment of our maturing debt and other obligations.

 

12

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, 2023. 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.

THE EXPORT-IMPORT BANK OF KOREA

Unless specified otherwise, the information provided below is stated on a separate basis in accordance with K-IFRS. Our financial information as of and for the nine months ended September 30, 2023 and 2022 in this prospectus supplement is presented based on our unaudited internal management accounts.

Overview

As of June 30, 2023, we had W88,551 billion of outstanding loans, including W38,281 billion of outstanding export credits, W37,419 billion of outstanding overseas investment credits and W9,994 billion of outstanding import credits, as compared to W91,725 billion of outstanding loans, including W41,619 billion of outstanding export credits, W36,405 billion of outstanding overseas investment credits and W8,589 billion of outstanding import credits as of December 31, 2022.

Capitalization

As of June 30, 2023, our authorized capital was W15,000 billion and our capitalization was as follows:

 

		June 30, 2023(1)
		(billions of Won) (unaudited)
Long-Term Debt(2)(3)(4)(5)(6):
Borrowings in Korean Won		W	—
Borrowings in Foreign Currencies			2,012
Export-Import Financing Debentures			58,103
Total Long-term Debt		W	60,115
Capital and Reserves:
Capital Stock(7)		W	14,773
Additional Paid-in Capital			—
Capital Adjustments			(143	)
Retained Earnings			2,865
Legal Reserve(8)			540
Voluntary Reserve(8)			1,101
Regulatory Reserve for Loan Losses(9)			276
Unappropriated Retained Earnings			949
Other Components of Equity(10)			1,135
Total Capital and Reserves		W	18,630
Total Capitalization		W	78,745

 

(1)	Except as described in this prospectus supplement, there has been no material adverse change in our capitalization since June 30, 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 June 30, 2023 into Won at the rate of W1,312.8 to US$1.00, which was the market average exchange rate as announced by the Seoul Monetary Brokerage Services Ltd., on June 30, 2023.

 

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(4)

As of June 30, 2023, we had contingent liabilities totaling W55,545 billion, which consisted of W40,919 billion under outstanding guarantees and acceptances and W14,627 billion under contingent guarantees and acceptances issued on behalf of our clients. See “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the six months ended June 30, 2023 and 2022—Note 36.”

(5)

As of June 30, 2023, we had entered into 592 interest rate related derivative contracts with a notional amount of W72,065 billion and 1,008 currency related derivative contracts with a notional amount of W55,349 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 six months ended June 30, 2023 and 2022—Note 20.”

(6)	See “The Export-Import Bank of Korea—Description of Assets and Liabilities—Sources of Funding” of the accompanying prospectus for an explanation of these sources of funds. All of our borrowings, whether domestic or international, are unsecured and unguaranteed.

(7)	As of June 30, 2023, our authorized ordinary share capital was W15,000 billion and issued fully-paid ordinary share capital was W14,773 billion. For more information, see “The Export-Import Bank of Korea—Business—Government Support and Supervision” of the accompanying prospectus.

(8)	See “The Export-Import Bank of Korea—Business—Government Support and Supervision” of the accompanying prospectus 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 on Supervision of Banking Business, we reserve such difference as regulatory reserve for loan losses. See “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the six months ended June 30, 2023 and 2022—Note 23.”

(10)	See “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the six months ended June 30, 2023 and 2022—Note 22.”

Selected Financial Statement Data

Recent Developments

The following tables present selected separate financial information as of September 30, 2023 and December 31, 2022 and for the first nine months of 2023 and 2022, which has been derived from our unaudited separate internal management accounts as of September 30, 2023 and for the first nine months of 2023 and 2022 prepared in accordance with K-IFRS.

 

		Nine Months Ended September 30,
		2023				2022
		(billions of Won)
		(unaudited)
Income Statement Data
Total Interest Income		W	4,280			W	1,860
Total Interest Expense			3,606				1,143
Net Interest Income			673				718
Operating Income			1,265				817
Income before Income Tax			1,267				821
Income Tax Expense			334				237
Net Income			932				584

 

		As of September 30, 2023				As of December 31, 2022
		(billions of Won) (unaudited)
Balance Sheet Data
Total Loan Credits(1)		W	94,323			W	91,725
Total Borrowings(2)			100,894				97,904
Total Assets			128,901				122,070
Total Liabilities			110,257				106,634
Total Shareholders’ Equity			18,645				15,436

 

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(1)

Gross amount, including domestic usance bills, foreign-currency bills bought, advance payments on acceptances and guarantees, call loans, inter-bank 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.

(2)	Includes debentures.

For the first nine months of 2023, we had net income of W932 billion compared to W584 billion for the corresponding period of 2022, primarily due to a change to a reversal of impairment loss on credit of W359 billion for the first nine months of 2023 from an additional impairment loss on credit of W184 billion for the corresponding period of 2022, mainly reflecting a general improvement in the overall asset quality of our loan portfolio in the first nine months of 2023. Such effect was in part offset by a change to net other operating expenses of W15 billion for the first nine months of 2023 from net other operating income of W149 billion for the corresponding period of 2022, primarily due to a change to net losses on fair value hedged items of W12 billion for the first nine months of 2023 from net gains on fair value hedged items of W151 billion for the corresponding period of 2022.

As of September 30, 2023, our total assets increased to W128,901 billion from W122,070 billion as of December 31, 2022, primarily due to an increase in Loan Credits to W94,323 billion as of September 30, 2023 from W91,725 billion as of December 31, 2022 and an increase in cash and due from financial institutions to W11,079 billion as of September 30, 2023 from W9,931 billion as of December 31, 2022.

As of September 30, 2023, our total liabilities increased to W110,257 billion from W106,634 billion as of December 31, 2022, primarily due to an increase in debentures to W94,421 billion as of September 30, 2023 from W87,792 billion as of December 31, 2022.

The increases in assets and liabilities were primarily due to increases in the volume of loans and debt, respectively. The depreciation of the Won against the U.S. dollar as of September 30, 2023 compared to December 31, 2022 magnified the effect of the increases in the volume of loans and debt, as a majority of our assets and liabilities consisted of foreign currency loans and debt (including significant percentages in U.S. dollars).

As of September 30, 2023, our total shareholders’ equity increased to W18,645 billion from W15,436 billion as of December 31, 2022, primarily due to an increase in capital stock to W14,773 billion as of September 30, 2023 from W12,773 billion as of December 31, 2022 due to the Government’s contribution of W2,000 billion to our capital in the form of shares of Korea Land and Housing Corporation in March 2023, and an increase in retained earnings to W2,849 billion as of September 30, 2023 from W2,051 billion as of December 31, 2022.

Based on preliminary data, our capital adequacy ratio as of September 30, 2023, on a consolidated basis, was 14.8%, an increase from 13.4% as of December 31, 2022.

 

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Separate Financial Statement Data

You should read the following financial statement data together with our separate financial statements and notes included in this prospectus supplement. The following tables present selected separate financial information as of June 30, 2023 and December 31, 2022 and for the six months ended June 30, 2023 and 2022, which has been derived from our unaudited separate K-IFRS financial statements as of June 30, 2023 and for the six months ended June 30, 2023 and 2022 included in this prospectus supplement:

 

		Six Months Ended June 30,
		2023				2022
		(billions of Won)
		(unaudited)
Income Statement Data
Total Interest Income		W	2,809			W	1,055
Total Interest Expense			2,313				541
Net Interest Income			496				514
Operating Income			1,332				665
Income before Income Tax			1,334				669
Income Tax Expense			385				183
Net Income			949				486
		As of June 30, 2023				As of December 31, 2022
		(billions of Won) (unaudited)
Balance Sheet Data
Total Loan Credits(1)		W	88,551			W	91,725
Total Borrowings(2)			99,598				97,904
Total Assets			127,392				122,070
Total Liabilities			108,762				106,634
Total Shareholders’ Equity			18,630				15,436

 

(1)

Gross amount, including domestic usance bills, foreign currency bills bought, advance payments on acceptances and guarantees, call loans, inter-bank 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.

(2)	Includes debentures.

For the first half of 2023, we had net income of W949 billion compared to W486 billion for the corresponding period of 2022. The principal factors for the increase in net income included (i) a change to net gains on hedging derivative assets of W387 billion for the first half of 2023 from net losses on hedging derivative assets of W2,710 billion for the corresponding period of 2022 and (ii) a change to a reversal of impairment loss on credit of W434 billion for the first half of 2023 from an additional impairment loss on credit of W94 billion for the corresponding period of 2022, mainly reflecting a general improvement in the overall asset quality of our loan portfolio in the first nine months of 2023.

The above factors were largely offset by (i) an 87% decrease in net other operating income to W323 billion for the first half of 2023 from W2,489 billion for the corresponding period of 2022, primarily due to a decrease in net gains on fair value hedged items to W324 billion for the first half of 2023 from W2,481 billion for the corresponding period of 2022 and (ii) a change to net losses on foreign exchange transactions of W513 billion for the first half of 2023 from net gains on foreign exchange transactions of W476 billion for the corresponding period of 2022, mainly as a result of higher exchange rate volatility in the first half of 2023 compared to the corresponding period of 2022.

 

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As of June 30, 2023, our total assets increased to W127,392 billion from W122,070 billion as of December 31, 2022, primarily due to an increase in cash and due from financial institutions to W15,286 billion as of June 30, 2023 from W9,931 billion as of December 31, 2022.

As of June 30, 2023, our total liabilities increased to W108,762 billion from W106,634 billion as of December 31, 2022, primarily due to an increase in debentures to W93,174 billion as of June 30, 2023 from W87,792 billion as of December 31, 2022, the effect of which was offset in large part by a decrease in borrowings to W6,424 billion as of June 30, 2023 from W10,113 billion as of December 31, 2022.

The depreciation of the Won against the U.S. dollar as of June 30, 2023 compared to December 31, 2022 magnified the effect of the increase in the volume of cash and due from financial institutions and debentures, as a majority of such assets and liabilities were denominated in foreign currencies (including significant percentages in U.S. dollars).

As of June 30, 2023, our total shareholders’ equity increased to W18,630 billion from W15,436 billion as of December 31, 2022, primarily due to an increase in capital stock to W14,773 billion as of June 30, 2023 from W12,773 billion as of December 31, 2022 due to the Government’s contribution of W2,000 billion to our capital in the form of shares of Korea Land and Housing Corporation in March 2023, and an increase in retained earnings to W2,865 billion as of June 30, 2023 from W2,051 billion as of December 31, 2022.

Operations

Loan Operations

In the first half of 2023, we provided total loans of W31,356 billion, a decrease of 3.5% from the corresponding period of 2022.

Export Credits

As of June 30, 2023, export credits in the amount of W38,281 billion represented 43.2% of our total outstanding Loan Credits. Our disbursements of export credits amounted to W16,777 billion in the first half of 2023, a decrease of 5.1% from the corresponding period of 2022, which was mainly due to a decrease in demand for loan and trade financing from domestic exporters. The depreciation of the Won against the U.S. dollar as of June 30, 2023 compared to June 30, 2022 partially offset the effect of the decrease in the volume of export credits in the first half of 2023, 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, 2023, overseas investment credits amounted to W37,419 billion, representing 42.3% of our total outstanding Loan Credits. Our disbursements of overseas investment credits in the first half of 2023 decreased by 16.1% to W7,452 billion from the corresponding period of 2022, primarily due to decreased demand in overseas investment and project credits. The depreciation of the Won against the U.S. dollar as of June 30, 2023 compared to June 30, 2022 partially offset the effect of the decrease in the volume of overseas investment credits in the first half of 2023, 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, 2023, import credits in the amount of W9,994 billion represented 11.3% of our total outstanding Loan Credits. Our disbursements of import credits amounted to W7,127 billion in the first half of 2023, an increase of 20.2% over the corresponding period of 2022, which was mainly due to an increase in

 

S-17

demand for financing for raw materials used for export and domestic consumption. The depreciation of the Won against the U.S. dollar as of June 30, 2023 compared to June 30, 2022 magnified the effect of the increase in the volume of import credits in the first half of 2023, as a majority 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, 2023 increased to W55,545 billion from W53,388 billion as of December 31, 2022. Guarantees we had confirmed as of June 30, 2023 increased to W40,919 billion from W39,373 billion as of December 31, 2022.

For further information regarding our guarantee and letter of credit operations, see “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of June 30, 2023 and for the six months ended June 30, 2023 and 2022—Note 36”.

Description of Assets and Liabilities

Total Credit Exposure

The following table sets out our Credit Exposure as of June 30, 2023, categorized by type of exposure extended:

 

		June 30, 2023
		(billions of Won, except for percentages)
A  Loans in Won		W	29,417				23	%
B   Loans in Foreign Currencies			54,699				43
C   Loans (A+B)			84,116				66
D  Other Loans(1)			4,435				3
E   Loan Credits (C+D)			88,551				69
F   Allowances for Loan Losses			1,792				1
G  Loan Credits (including allowance for loan losses) (E-F)			86,759				68
H  Confirmed Guarantees			40,919				32
I   Credit Exposure (G+H)		W	127,678				100	%

 

(1)	Includes domestic usance bills, foreign currency bills bought, advance payments on acceptances and guarantees, call loans, inter-bank loans in foreign currencies and private placement corporate bonds in Won.

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, 2023, categorized by geographic area⁽¹⁾:

 

		June 30, 2023				As % of June 30, 2023 Total
		(billions of Won, except for percentages)
Asia(2)		W	77,288				87	%
Europe			7,037				8
America			3,045				3
Africa			1,180				1
Total		W	88,551				100	%

 

S-18

 

(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.

Economic Sanctions

The sixth paragraph under “The Export-Import Bank of Korea—Description of Assets and Liabilities—Economic Sanctions” in the accompanying prospectus shall be deleted and replaced with the following:

“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 a guarantee arrangement involving a Russian company that has become subject to U.S. (but not Singaporean) sanctions.”

The eighth paragraph under “The Export-Import Bank of Korea—Description of Assets and Liabilities—Economic Sanctions” in the accompanying prospectus shall be deleted and replaced with the following:

“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 September 30, 2023, the two Russian financial institutions owed us approximately US$200 million. The provisioning level we established for that credit exposure as of September 30, 2023 was 92.7%. Our dealings with the Russian financial institutions have been conducted at all times in full compliance with applicable sanctions. 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 (even if the contemplated transactions would not have been prohibited or restricted by applicable sanctions) 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 and will only engage in additional dealings with the two relevant Russian financial institutions that are fully compliant with applicable sanctions.”

The last paragraph under “The Export-Import Bank of Korea—Description of Assets and Liabilities—Economic Sanctions” in the accompanying prospectus shall be deleted and replaced with the following:

“We entered into a guarantee arrangement in 2020 that involves a Russian company that became subject to U.S. 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. We will only engage in dealings under the guarantee arrangement that are fully compliant 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

As of June 30, 2023, our largest Credit Exposure was to Hanwha Ocean Co., Ltd. (formerly Daewoo Shipbuilding & Marine Engineering Co., Ltd.) in the amount of W5,444 billion, an increase from W5,407 billion as of December 31, 2022, primarily due to an increase in guarantees.

As of June 30, 2023, our second and third largest Credit Exposures, respectively, were to Samsung Heavy Industries Co., Ltd. in the amount of W4,188 billion and HD Hyundai Heavy Industries Co., Ltd. in the amount of W4,130 billion.

 

S-19

The following table sets out our five largest Credit Exposures as of June 30, 2023⁽¹⁾:

 

Rank		Name of Borrower		Loans				Guarantees				Total
				(billions of Won)
1		Hanwha Ocean Co., Ltd.			593				4,851				5,444
2		Samsung Heavy Industries Co., Ltd.			1,139				3,049				4,188
3		HD Hyundai Heavy Industries Co., Ltd.			214				3,916				4,130
4		SK hynix Inc.			2,013				—				2,013
5		Hanwha Aerospace Co., Ltd.			564				1,153				1,717

 

(1)	Excludes loans and guarantees extended to affiliates.

Source:

Internal accounting records.

Asset Quality

Asset Classifications

The following table provides information on our asset quality and loan loss reserves as of June 30, 2023:

 

		As of June 30, 2023
		Loan Amount(1)				Loan Loss Reserve(2)
Normal		W	165,227			W	772
Precautionary			14,082				1,833
Sub-standard			536				367
Doubtful			28				12
Estimated Loss			110				105
Total		W	179,982			W	3,089

 

(1)	These figures include loans (excluding inter-bank 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)	These figures include present value discount.

Reserves for Credit Losses

As of June 30, 2023, the amount of our non-performing assets was W674 billion, a decrease of 54.7% from W1,487 billion as of December 31, 2022. As of June 30, 2023, our non-performing asset ratio was 0.4%, compared to 0.9% as of December 31, 2022.

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, 2023:

 

		June 30, 2023
		(billions of Won, except for percentages)
Loan Loss Reserve (A)		W	3,089
NPA (B)(1)			674
Total Equity (C)			18,630
Reserve to NPA (A/B)			458	%
Equity at Risk (B-A)/C			—

 

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

Source:

Internal accounting records.

 

S-20

Investments

As of June 30, 2023, our total investment in securities amounted to W17,701 billion, representing 13.9% of our total assets.

The following table sets out the composition of our investment securities as of June 30, 2023:

 

Type of Investment Securities		Amount				%
		(billions of Won)
Financial Assets at FVOCI		W	13,747				78	%
Securities at Amortized Cost			1,876				11
Investments in Associates and Subsidiaries			2,078				12
Total		W	17,701				100	%

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 as of June 30, 2023 and for the six months ended June 30, 2023 and 2022—Note 5”.

Guarantees and Acceptances and Contingent Liabilities

As of June 30, 2023, we had issued a total amount of W40,919 billion in confirmed guarantees and acceptances, of which W35,739 billion, representing 87.3% of the total amount, was classified as normal and W5,025 billion, representing 12.3% of the total amount, was classified as precautionary, and W155 billion, representing 0.4% of the total amount, was classified as substandard or below.

Derivatives

As of June 30, 2023, our outstanding loans made at floating rates of interest totaled approximately W61,387 billion, whereas our outstanding borrowings made at floating rates of interest totaled approximately W65,499 billion, including those raised in Australian Dollar, Euro and Brazil Real and swapped into U.S. dollar floating rate borrowings. As of June 30, 2023, we had entered into 592 interest rate related derivative contracts with a notional amount of W72,065 billion and had entered into 1,008 currency related derivative contracts with a notional amount of W55,349 billion. See “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of June 30, 2023 and for the six months ended June 30, 2023 and 2022—Note 20”.

Sources of Funding

We raised a net total of W35,171 billion (new borrowings plus loan repayments by our clients less repayment of our existing debt) during the first half of 2023, a decrease of 10.7% from W39,368 billion in the corresponding period of 2022. Total loan repayments, including prepayments by our clients, during the first half of 2023 amounted to W21,333 billion, a decrease of 26.6% from W29,081 billion during the corresponding period of 2022.

As of June 30, 2023, we had no outstanding borrowings from the Government. We issued Won-denominated domestic bonds in the aggregate amount of W10,760 billion during the first half of 2023.

During the first half of 2023, we issued eurobonds in the aggregate principal amount of US$1,624 million in various types of currencies under our existing global medium term notes program, a 43.2% decrease from US$2,861 million in the corresponding period of 2022. In addition, we issued global bonds during the first half of 2023 in the aggregate amount of US$3,500 million under our U.S. shelf registration statement compared with US$3,000 million in the corresponding period of 2022. As of June 30, 2023, the outstanding amounts of our notes and debentures were US$33,902 million, HKD 9,504 million, BRL 15,312 million, EUR 7,087 million,

 

S-21

THB 3,580 million, CHF 750 million, AUD 4,509 million, INR 19,754 million, CNY 8,094 million, IDR 8,655,500 million, PEN 425 million, NZD 174 million, ZAR 2,615 million, NOK 2,250 million, SEK 250 million, GBP 36 million, CAD 65 million, MXN 13,000 million, CZK 3,420 million, PLN 194 million, SGD 67 million and PHP 4,400 million.

We also borrow from foreign financial institutions in the form of loans that are principally made bilaterally or by syndicates of commercial banks at floating or fixed interest rates and in foreign currencies, with original maturities ranging from one to five years. As of June 30, 2023, the outstanding amount of such borrowings from foreign financial institutions was US$1,352 million.

As of June 30, 2023, our total paid-in capital amounted to W14,773 billion, and the Government, The Bank of Korea and The Korea Development Bank owned 73%, 8% and 19%, respectively, of our paid-in capital.

As of June 30, 2023, the aggregate outstanding principal amount of our borrowings (including export-import financing debentures), which was W99,598 billion, was equal to 20.2% of the authorized amount of W492,408 billion.

Debt

Debt Repayment Schedule

The following table sets out the principal repayment schedule for our debt outstanding as of June 30, 2023:

Debt Principal Repayment Schedule

 

		Maturing on or before December 31,
Currency(1)		2023				2024				2025				2026				Thereafter
		(billions of won)
Won		W	23,320			W	10,840			W	2,570			W	1,670			W	1,280
Foreign(2)		W	16,529			W	16,578			W	12,651			W	11,091			W	21,381
Total Won Equivalent		W	39,849			W	27,418			W	15,221			W	12,761			W	22,661

 

(1)	Borrowings in foreign currency have been translated into Won at the rate of W1,267.30 to US$1.00, which was the market average exchange rate as announced by the Seoul Money Brokerage Services Ltd., on June 30, 2023.

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

As of June 30, 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$11,312 million, US$10,905 million and US$7,219 million, respectively. As of June 30, 2023, our total foreign currency liabilities exceeded our total foreign currency assets by US$771 million.

Capital Adequacy

As of June 30, 2023, our capital adequacy ratio, on a consolidated basis, was 15.1%, an increase from 13.4% as of December 31, 2022.

 

S-22

The following table sets forth our capital base and capital adequacy ratios (on a consolidated basis) reported as of June 30, 2023:

 

		June 30, 2023
		(billions of Won, except for percentages)
Tier I		W	18,713
Paid-in Capital (including capital adjustments)			14,630
Retained Earnings(1)			2,980
Accumulated other comprehensive income			1,178
Common shares issued by consolidated subsidiaries of the bank and held by third parties			2
Deductions from Tier I Capital			77
Capital Adjustments			—
Deferred Tax Asset			—
Others			77
Tier II (General Loan Loss Reserves)			2,317
Total Capital			21,030
Risk Adjusted Assets			139,551
Capital Adequacy Ratios
Tier I common equity			13.4	%
Tier 1			13.4	%
Tier I and Tier II			15.1	%

 

(1)	Net amount after deducting regulatory reserve for bad loans.

Source:

Internal accounting records.

Management and Employees

Management

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

 

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

Financial Statements and the Auditors

Our interim separate financial statements as of June 30, 2023 and December 31, 2022 and for the six months ended June 30, 2023 and 2022 appearing in this prospectus supplement were prepared in conformity with K-IFRS, as summarized in Note 2 of the notes to our unaudited separate financial statements as of June 30, 2023 and for the six months ended June 30, 2023 and 2022 included in this prospectus supplement.

 

S-23

THE EXPORT-IMPORT BANK OF KOREA

CONDENSED SEPARATE INTERIM STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2023 AND DECEMBER 31, 2022

 

		Jun 30, 2023				Dec 31, 2022
		(Korean won in millions)
ASSETS:
Cash and due from financial institutions (Notes 4, 5 and 7)		W	15,285,838			W	9,931,012
Financial assets at fair value through profit or loss (“FVTPL”) (Notes 4, 5, 8 and 20)			4,664,065				4,172,754
Hedging derivative assets (Notes 4, 5 and 20)			431,627				329,210
Loans at amortized cost (Notes 4, 5, 10 and 37)			86,377,779				89,300,057
Financial investments (Notes 4, 5 and 9)			15,622,771				13,363,826
Investments in associates and subsidiaries (Note 11)			2,077,838				1,935,869
Tangible assets, net (Note 12)			273,416				273,003
Intangible assets, net (Note 13)			41,778				42,813
Deferred tax assets (Note 34)			712,187				867,269
Retirement benefit assets, net (Note 18)			40,966				45,142
Other assets (Notes 4, 5, 14 and 37)			1,863,705				1,808,995
		W	127,391,970			W	122,069,950
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Financial liabilities at FVTPL (Notes 4, 5 and 20)		W	2,548,439			W	2,513,487
Hedging derivative liabilities (Notes 4, 5 and 20)			2,205,398				2,356,908
Borrowings (Notes 4, 5 and 15)			6,423,585				10,112,740
Debentures (Notes 4, 5 and 16)			93,174,079				87,791,623
Provisions (Notes 17)			1,135,182				1,092,435
Other liabilities (Notes 4, 5, 19 and 37)			3,275,269				2,767,208
			108,761,952				106,634,401
STOCKHOLDERS’ EQUITY:
Capital stock (Notes 1 and 21)			14,773,254				12,773,254
Capital adjustments			(143,446	)			(133,840	)
Other components of equity (Notes 20 and 22)			1,135,151				744,756
Retained earnings (Note 23)
(Regulatory reserve for loan losses as of June 30, 2023 and December 31, 2022: W275,620 million and W239,710 million)			2,865,059				2,051,379
			18,630,018				15,435,549
		W	127,391,970			W	122,069,950

See accompanying notes to condensed separate interim financial statements.

 

S-24

THE EXPORT-IMPORT BANK OF KOREA

CONDENSED SEPARATE INTERIM STATEMENTS OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

 

		Six months ended Jun 30, 2023				Six months ended Jun 30, 2022
		(Korean won in millions)
OPERATING INCOME:
Net interest income (Notes 24 and 37):
Interest income		W	2,808,677			W	1,055,273
Interest expenses			(2,312,705	)			(541,277	)
			495,972				513,996
Net commission income (Notes 25 and 37):
Commission income			240,448				161,187
Commission expenses			(13,020	)			(10,128	)
			227,428				151,059
Dividend income (Note 26)			42,333				51,524
Net gain (loss) on financial assets at FVTPL (Note 27)			60,600				(91,048	)
Net gain (loss) on hedging derivative assets (Notes 20 and 28)			387,157				(2,709,813	)
Net gain (loss) on financial investments (Note 29)			442				(47	)
Net gain (loss) on foreign exchange transaction			(512,802	)			475,506
Net other operating income (expenses) (Note 30)			323,112				2,488,942
Reversal of (additional) impairment loss on credit (Notes 31 and 37)			434,344				(94,070	)
General and administrative expenses (Note 32)			(126,927	)			(121,261	)
Total operating income			1,331,659				664,788
NON-OPERATING INCOME (Note 33):
Net gain (loss) on investments in associates and subsidiaries (Note 26)			7,142				5,232
Net other non-operating income (expenses)			(4,997	)			(1,113	)
			2,145				4,119
PROFIT BEFORE INCOME TAX			1,333,804				668,907
INCOME TAX EXPENSES (Note 34)			(384,705	)			(183,246	)
PROFIT FOR THE PERIOD			949,099				485,661
(Adjusted profit for the period after regulatory reserve for loan losses for the six months ended June 30, 2023 and 2022: W929,236 million and W241,245 million) (Note 23)
OTHER COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD (Note 22)
Items not reclassified subsequently to profit or loss:
Net gain (loss) on equity securities at fair value through other comprehensive income(“FVOCI”)			497,273				86,118
Income tax effect			(113,591	)			(20,841	)
Items that are or may be reclassified subsequently to profit or loss:
Net gain (loss) on debt securities at FVOCI			15,396				(249,108	)
Net gain (loss) on valuation of cash flow hedge			(6,371	)			5,168
Income tax effect			(2,313	)			59,034
			390,394				(119,629	)
TOTAL COMPREHENSIVE INCOME		W	1,339,493			W	366,032

See accompanying notes to condensed separate interim financial statements.

 

S-25

THE EXPORT-IMPORT BANK OF KOREA

CONDENSED SEPARATE INTERIM STATEMENTS OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 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
Paid-in capital increase			25,000				—				—				—				—				—				—				25,000
Payment of dividends			—				—				—				—				—				—				(191,256	)			(191,256	)
Total comprehensive income			—				—				(223,811	)			3,918				—				100,264				485,661				366,032
Profit for the period			—				—				—				—				—				—				485,661				485,661
Other comprehensive income (loss):			—				—				(223,811	)			3,918				—				100,264				—				(119,629	)
Net gain on valuation of financial assets at FVOCI, net of tax			—				—				(223,811	)			—				—				—				—				(223,811	)
Net gain on valuation of cash flow hedge, net of tax			—				—				—				3,918				—				—				—				3,918
Net gain on disposal of financial assets at FVOCI, net of tax			—				—				—				—				—				100,264				—				100,264
Jun 30, 2022		W	12,773,254			W	(133,716	)		W	706,965			W	6,886			W	18,865			W	30,324			W	2,150,129			W	15,552,707
January 1, 2023			12,773,254				(133,840	)			662,320				38,805				37,454				6,177				2,051,379				15,435,549
Paid-in capital increase			2,000,000				(9,606	)			—				—				—				—				—				1,990,394
Payment of dividends			—				—				—				—				—				—				(135,419	)			(135,419	)
Total comprehensive income			—				—				270,317				(4,848	)			49				124,877				949,099				1,339,494
Profit for the period			—				—				—				—				—				—				949,099				949,099
Other comprehensive income (loss):			—				—				270,317				(4,848	)			49				124,877				—				390,395
Net loss on valuation of financial assets at FVOCI, net of tax			—				—				270,317				—				—				—				—				270,317
Net gain on valuation of cash flow hedge, net of tax			—				—				—				(4,848	)			—				—				—				(4,848	)
Remeasurements of Defined Benefit Obligations			—				—				—				—				49				—				—				49
Net gain on disposal of financial assets at FVOCI, net of tax			—				—				—				—				—				124,877				—				124,877
Jun 30, 2023		W	14,773,254			W	(143,446	)		W	932,637			W	33,957			W	37,503			W	131,054			W	2,865,059			W	18,630,018

See accompanying notes to condensed separate interim financial statements.

 

S-26

THE EXPORT-IMPORT BANK OF KOREA

CONDENSED SEPARATE INTERIM STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

 

		Six months ended Jun 30, 2023				Six months ended Jun 30, 2022
		(Korean won in millions)
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit for the period		W	949,099			W	485,661
Adjustments to reconcile profit for the period to net cash used in operating activities:
Income tax expenses			384,705				183,246
Interest income			(2,808,677	)			(1,055,273	)
Interest expenses			2,312,705				541,277
Dividend and distribution income			(52,992	)			(59,006	)
Dividend received from subsidiaries and associates			(7,142	)			(5,232	)
Loss on financial assets at FVTPL			18,032				12,069
Loss on financial assets at FVOCI			265				144
Transfer to derivatives’ credit risk provision			5,764				663
Loss on foreign exchange transactions			1,358,305				960,886
Additional impairment loss on credit			—				94,070
Depreciation and amortization			10,228				9,191
Loss on disposal of tangible, intangible and other assets			3				2
Loss on valuation of derivative assets for trading			658,510				1,835,306
Loss on valuation of derivative assets for hedging			264,867				1,949,138
Loss on fair value hedged items			268,086				83,194
Retirement benefits			3,030				5,415
Increase in other provisions			6				—
Gain on financial assets at FVTPL			(62,626	)			(34,516	)
Gain on financial assets at FVOCI			(707	)			(97	)
Reversal of derivatives’ credit risk provision			(7,167	)			(10,849	)
Gain on foreign exchange transactions			(845,504	)			(1,436,393	)
Reversal of impairment loss on credit			(434,344	)			—
Gain on disposal of tangible, intangible and other assets			(8	)			(80	)
Gain on valuation of derivative assets for trading			(637,205	)			(1,270,639	)
Gain on valuation of derivative assets for hedging			(600,117	)			(152,468	)
Gain on fair value hedged items			(592,483	)			(2,564,231	)
			(764,466	)			(914,183	)
Changes in operating assets and liabilities:
Due from financial institutions			1,684,219				(2,063,131	)
Financial assets and liabilities at FVTPL			(430,836	)			(896,651	)
Hedging derivative assets and liabilities			76,354				(18,582	)
Loans at amortized cost			5,651,658				(4,201,293	)
Other assets			(104,938	)			(481,508	)
Provisions			5,651				39,670
Net retirement benefit liabilities (assets)			1,147				(343	)
Other liabilities			(914,332	)			137,617
			5,968,923				(7,484,221	)
Payment of income tax			—				—
Interest received			1,720,903				1,012,190
Interest paid			(810,859	)			(350,147	)
Dividend received			60,134				64,238
Net cash provided by (used in) operating activities			7,123,734				(7,186,462	)

 

S-27

THE EXPORT-IMPORT BANK OF KOREA

CONDENSED SEPARATE INTERIM STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022 (CONTINUED)

 

		Six months ended Jun 30, 2023				Six months ended Jun 30, 2022
		(Korean won in millions)
CASH FLOWS FROM INVESTING ACTIVITIES:
Disposals of financial investments		W	2,741,699			W	944,242
Disposals of investments in associates			2,145				1,230
Disposals of tangible assets			9				80
Disposals of intangible assets			116				74
Acquisitions of financial investments			(1,476,640	)			(1,676,093	)
Acquisitions of investments in associates			(3,680	)			(372,510	)
Acquisitions of tangible assets			(5,523	)			(5,840	)
Acquisitions of intangible assets			(4,201	)			(8,615	)
Net cash provided by (used in) investing activities			1,253,925				(1,117,432	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings			1,004,414				5,646,121
Proceeds from debentures			20,504,573				12,282,037
Paid-in capital increase			—				25,000
Increase in deposits			—				2
Net decrease in call-money			(45,745	)			(801,245	)
Repayment of borrowings			(4,974,008	)			(2,944,537	)
Repayment of debentures			(17,870,555	)			(5,264,463	)
Payment of dividends			(135,419	)			(191,256	)
Decrease in deposits			—				(2	)
Paid-in capital increase			(9,606	)			—
Net cash provided by (used in) financing activities			(1,526,346	)			8,751,657
NET INCREASE IN CASH AND CASH EQUIVALENTS			6,851,313				447,763
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD			4,781,957				3,146,957
EFFECTS OF FOREIGN EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS IN FOREIGN CURRENCIES			70,621				250,238
CASH AND CASH EQUIVALENTS, END OF THE PERIOD (Note 7 and 35)		W	11,703,891			W	3,844,958

See accompanying notes to condensed separate interim financial statements.

 

S-28

THE EXPORT-IMPORT BANK OF KOREA

NOTES TO THE CONDENSED SEPARATE INTERIM FINANCIAL STATEMENTS

AS OF JUNE 30, 2023 AND DECEMBER 31, 2022,

AND FOR THE SIX MONTHS ENDED JUNE 30, 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 June 30, 2023, the Bank operates a head office in Seoul, Marine Finance Center in Busan, ten domestic branches, three domestic offices, a domestic subsidiary, five overseas subsidiaries, and twenty-four overseas offices.

The Bank’s authorized capital is W15,000,000 million, and through numerous capital increases since the establishment, its paid-in capital is W14,773,254 million as of June 30, 2023. The Government of the Republic of Korea (the “Government”), the Bank of Korea, and the Korea Development Bank hold 72.98%, 7.90%, and 19.12%, respectively, of the ownership of the Bank as of June 30, 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 interim 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 June 30, 2023 and December 31, 2022 are as follows:

(June 30, 2023)

 

Subsidiaries

Location

Capital stock

Main business

Number of shares owned

Percentage of owner- ship (%)

Financial statements as of

KEXIM Bank UK Limited

United Kingdom

GBP

81mil.

Finance

81,283,897

100.00

Jun. 30, 2023

KEXIM Vietnam Leasing Co. (*1)

Vietnam

USD

53mil.

Finance

—

100.00

Jun. 30, 2023

PT.KOEXIM Mandiri Finance

Indonesia

IDR

52,000mil.

Finance

442

85.00

Jun. 30, 2023

KEXIM Asia Limited

Hong Kong

USD

130mil.

Finance

130,000,000

100.00

Jun. 30, 2023

KEXIM Global(Singapore) Ltd

Singapore

USD

300mil.

Finance

300,000,000

100.00

Jun. 30, 2023

EXIM PLUS Co., Ltd.

Korea

KRW

950mil.

Service

190,000

100.00

Jun. 30, 2023

(December 31, 2022)

 

Subsidiaries

Location

Capital stock

Main business

Number of shares owned

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

 

(*1)

This entity does not issue share certificates.

 

S-29