Filed Pursuant to Rule 424(b)(5)
Registration Statement No. 333-265869

 

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 3, 2023

 

PRELIMINARY PROSPECTUS SUPPLEMENT

(To Prospectus Dated July 27, 2022)

 

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$                                         % Notes due 20                    

US$                                         % Notes due 20                    

US$                                         % Blue Notes due 20                    

Our US$                     aggregate principal amount of notes due 20                     (the “20                     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 blue notes due 20                     (the “20                     Blue Notes,” and together with the 20                     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                     , 2023.

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                     Notes

20                     Notes

20                     Blue 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                     , 2023.

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. In addition, application for listing of the Notes will be made to the International Securities Market of the London Stock Exchange.

The underwriters expect to deliver the Notes to investors through the book-entry facilities of DTC on or about January                     , 2023.

 

 

Joint Bookrunners and Lead Managers

 

ANZ

BNP PARIBAS

BofA Securities

Citigroup

HSBC

KB Securities

Morgan Stanley

 

Prospectus Supplement Dated January                     , 2023

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-12
Description of the Notes		S-96
Clearance and Settlement		S-99
Taxation		S-102
Underwriting		S-103
Legal Matters		S-110
Official Statements and Documents		S-110
General Information		S-110

 

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			9
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			134
Land and History			134
Government and Politics			136
The Economy			139
Principal Sectors of the Economy			147
The Financial System			154
Monetary Policy			159
Balance of Payments and Foreign Trade			163
Government Finance			170
Debt			174
Tables and Supplementary Information			177
Description of the Securities			180
Description of Debt Securities			180
Description of Warrants			186
Terms Applicable to Debt Securities and Warrants			187
Description of Guarantees			188
Limitations on Issuance of Bearer Debt Securities and Bearer Warrants			189
Taxation			190
Korean Taxation			190
United States Tax Considerations			192
Plan of Distribution			201
Legal Matters			202
Authorized Representatives in the United States			202
Official Statements and Documents			202
Experts			202
Forward-Looking Statements			203
Further Information			205

 

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CERTAIN DEFINED TERMS

All references to “we” or “us” mean The Export-Import Bank of Korea. All references to “Korea” or the “Republic” contained in this prospectus supplement mean The Republic of Korea. All references to the “Government” mean the government of Korea. References to “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 July 27, 2022. 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. 333-265869, 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.

NOTICE TO CAPITAL MARKET INTERMEDIARIES AND PROSPECTIVE INVESTORS PURSUANT TO PARAGRAPH 21 OF THE HONG KONG SFC CODE OF CONDUCT—IMPORTANT NOTICE TO PROSPECTIVE INVESTORS

Prospective investors should be aware that certain intermediaries in the context of this offering of the Notes, including all 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 (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.

 

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Prospective investors who are the directors, employees or major shareholders of the 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 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.”

The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom (“UK”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (“EUWA”); or (ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000 (“FSMA”) and any rules or regulations made under the Insurance Distribution Directive, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA.

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                     % notes due January                     , 20                     (the “20                     Notes”), US$                     aggregate principal amount of                     % notes due January                     , 20                     (the “20                     Notes”) and US$                     aggregate principal amount of                     % blue notes due January                     , 20                     (the “20                     Blue Notes,” and together with the 20                     Notes and the 20                     Notes, the “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                     , 2023 in respect of the period from (and including) January                     , 2023 to (but excluding) July                     , 2023. Interest on the 20                     Notes will accrue from January                     , 2023 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                     , 2023 in respect of the period from (and including) January                     , 2023 to (but excluding) July                     , 2023. Interest on the 20                     Notes will accrue from January                     , 2023 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                     Blue 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                     Blue Notes will be made on July                     , 2023 in respect of the period from (and including) January                     , 2023 to (but excluding) July                     , 2023. Interest on the 20                     Blue Notes will accrue from January                     , 2023 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                     Blue 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

 

S-7

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.

In addition, application for listing of the Notes will be made to the International Securities Market of the London Stock Exchange.

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                     , 2023, which we expect will be the                      business day following the date of this prospectus supplement, referred to as “T+                    .” You should note that initial trading of the Notes may be affected by the T+                     settlement. See “Underwriting—Delivery of the Notes.”

Underwriting

KB Securities Co., Ltd. has agreed not to offer or sell any Notes in the United States or to any U.S. persons. See “Underwriting—Relationship with the Underwriters.”

 

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USE OF PROCEEDS

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.

The 20                     Blue Notes

Use of Proceeds from the Sale of the 20                     Blue Notes

We will use the net proceeds from the sale of the 20                     Blue Notes to finance or refinance, in whole or in part, new or existing projects related to sustainable marine transportation (“Eligible Blue Projects”) in accordance with our Framework Supplement for Blue Bond Issuance (the “Framework Supplement”), which supplements our existing Sustainable Finance Framework established in September 2021. The Framework Supplement is in alignment with the Green Bond Principles 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.

Examples of Eligible Blue Projects include (i) investments and expenditures related to the construction, design and maintenance of clean and sustainable vessels (“CSVs”) as defined by the International Maritime Organization (the “IMO”) and the Norwegian Maritime Authority, and (ii) retrofitting of the engines of existing vessels with alternative fuels. In alignment with the EU taxonomy for sustainable activities, CSVs, which represent methanol dual fuel vessels under the Framework Supplement, should meet one or more of the following criteria:

 

•

hybrid and dual fuel vessels deriving at least 25% of their energy from zero direct carbon dioxide emission fuels or plug-in power for their normal operation at sea and in ports

 

•

vessels with an energy efficiency design index (“EEDI”) of 10% below the IMO’s EEDI requirement in effect on April 1, 2022 if such vessels can operate on zero direct carbon dioxide emission fuels or on fuels from renewable sources

Project Evaluation and Selection Process

Under our project evaluation and selection process, Eligible Blue Projects 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.

Management of Proceeds

The allocation of an amount equal to the net proceeds from the 20                     Blue Notes will be monitored and tracked by our Treasury department through the internal register. Any balance of the net proceeds from the 20                     Blue Notes not yet allocated to Eligible Blue Projects will be managed in accordance with our existing liquidity management process.

Reporting

We will publish a report on the allocation of the net proceeds from the 20                     Blue Notes on an annual basis. Such reports will include allocation information, such as the aggregate amount allocated to Eligible Blue Projects, examples of such Eligible Blue Projects (subject to our confidentiality obligations) and the remaining balance of unallocated proceeds, if any. Impact reporting will be disclosed where possible and will include relevant environmental impacts associated with Eligible Blue Projects that were funded with the net proceeds of the 20                     Blue Notes.

 

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DNV Business Assurance Korea Ltd., an independent external reviewer, has issued an opinion dated December 28, 2022 on the Framework Supplement (the “Second Party Opinion”). The Second Party Opinion and our Framework Supplement will be publicly available on the following website: https://www.koreaexim.go.kr/.

Investment Considerations

The 20                     Blue Notes may not be a suitable investment for all investors seeking exposure to “green” or “blue” assets. We will allocate an amount equivalent to the net proceeds from the issuance of the 20                     Blue Notes to finance or refinance, in whole or in part, new or existing Eligible Blue Projects as described in “Use of Proceeds from the Sale of the 20                     Blue Notes” above in accordance with our Framework Supplement, which is in alignment with the Green Bond Principles 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 Blue Projects provided in “Use of Proceeds from the Sale of the 20                     Blue Notes” above are for illustrative purposes only and no assurance can be provided that disbursements for projects with these specific characteristics will be made by us during the term of the 20                     Blue Notes. Our Framework Supplement, as well as our existing Sustainable Finance Framework, are not incorporated into, and do 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 “blue,” and therefore, no assurance can be provided to potential investors that selected Eligible Blue Projects will continue to meet the relevant eligibility criteria or any present or future investor expectations or requirements regarding environmental performance or sustainability. Although Eligible Blue Projects are expected to be selected in accordance with the categories recognized under our Framework Supplement 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 benefits as anticipated, or that adverse environmental 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                     Blue 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 criteria, our failure to comply with such obligations does not constitute a breach or an event of default under the 20                     Blue 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                     Blue Notes on Eligible Blue Projects or to meet or continue to meet the investment requirements of certain environmentally-focused investors with respect to the 20                     Blue Notes may affect the value of the 20                     Blue Notes and may have consequences for certain investors with portfolio mandates to invest in “green” or “blue” 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                     Blue Notes are included in any dedicated “green,” “blue,” “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 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 Framework Supplement. None of us or the Underwriters make any

 

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representation as to whether the 20                     Blue Notes fulfil the relevant environmental criteria. Moreover, no assurance can be provided with respect to the suitability or reliability of the Second Party Opinion or that the 20                     Blue Notes will fulfil the criteria to qualify as “green” or “blue bonds.” The Underwriters have not undertaken, nor are they responsible for, any assessment of the eligibility of the projects within the definition of Eligible Blue Projects or the monitoring of the use of proceeds from the offering of the 20                     Blue Notes. Each potential purchaser of the 20                     Blue 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                     Blue Notes should be based upon such investigation as it deems necessary.

 

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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 July 27, 2022. 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, 2022 and 2021 in this prospectus supplement is presented based on our unaudited internal management accounts.

Overview

As of June 30, 2022, we had W88,292 billion of outstanding loans, including W42,222 billion of outstanding export credits, W36,730 billion of outstanding overseas investment credits and W7,335 billion of outstanding import credits, as compared to W79,995 billion of outstanding loans, including W38,638 billion of outstanding export credits, W32,830 billion of outstanding overseas investment credits and W6,122 billion of outstanding import credits as of December 31, 2021.

Capitalization

As of June 30, 2022, our authorized capital was W15,000 billion and our capitalization was as follows:

 

		June 30, 2022(1)
		(billions of Won) (unaudited)
Long-Term Debt(2)(3)(4)(5)(6):
Borrowings in Korean Won		W	—
Borrowings in Foreign Currencies			760
Export-Import Financing Debentures			55,897
Total Long-term Debt		W	56,658
Capital and Reserves:
Capital Stock(7)		W	12,773
Additional Paid-in Capital			—
Capital Adjustments			(134	)
Retained Earnings			2,150
Legal Reserve(8)			501
Voluntary Reserve(8)			924
Regulatory Reserve for Loan Losses(9)			240
Unappropriated Retained Earnings			486
Other Components of Equity(10)			763
Total Capital and Reserves		W	15,553
Total Capitalization		W	72,211

 

(1)	Except as described in this prospectus supplement, there has been no material adverse change in our capitalization since June 30, 2022.

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

 

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(3)	We have translated borrowings in foreign currencies as of June 30, 2022 into Won at the rate of W1,299.4 to US$1.00, which was the market average exchange rate as announced by the Seoul Monetary Brokerage Services Ltd., on June 30, 2022.

(4)

As of June 30, 2022, we had contingent liabilities totaling W47,065 billion, which consisted of W34,369 billion under outstanding guarantees and acceptances and W12,696 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, 2022 and 2021—Note 36.”

(5)

As of June 30, 2022, we had entered into 436 interest rate related derivative contracts with a notional amount of W69,208 billion and 513 currency related derivative contracts with a notional amount of W32,497 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, 2022 and 2021—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, 2022, our authorized ordinary share capital was W15,000 billion and issued fully-paid ordinary share capital was W12,773 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, 2022 and 2021—Note 23.”

(10)	See “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of and for the six months ended June 30, 2022 and 2021—Note 22.”

Government Support

In June 2022, the Government made a contribution to our capital of W25 billion in cash.

Selected Financial Statement Data

Recent Developments

The following tables present selected separate financial information as of September 30, 2022 and December 31, 2021 and for the first nine months of 2022 and 2021, which has been derived from our unaudited separate internal management accounts as of September 30, 2022 and for the first nine months of 2022 and 2021 prepared in accordance with K-IFRS.

 

		Nine Months Ended September 30,
		2022				2021
		(billions of Won)
		(unaudited)
Income Statement Data
Total Interest Income		W	1,860			W	1,298
Total Interest Expense			1,143				594
Net Interest Income			718				705
Operating Income			827				893
Income before Income Tax			831				901
Income Tax Expense			237				240
Net Income			593				661

 

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		As of September 30, 2022 (unaudited)				As of December 31, 2021
		(billions of Won)
Balance Sheet Data
Total Loan Credits(1)		W	96,211			W	79,995
Total Borrowings(2)			103,922				82,063
Total Assets			129,519				101,452
Total Liabilities			114,065				86,099
Total Shareholders’ Equity			15,454				15,353

 

(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 2022, we had net income of W593 billion compared to W661 billion for the first nine months of 2021, primarily due to a change to additional impairment loss on credit of W184 billion for the first nine months of 2022 compared to a reversal of impairment loss on credit of W81 billion for the corresponding period of 2021, mainly reflecting a deterioration in the overall asset quality of our loan portfolio in the first nine months of 2022. Such effect was in large part offset by (i) an increase in net other operating income to W150 billion for the first nine months of 2022 from W36 billion for the corresponding period of 2021, primarily due to an increase in gains on fair value hedged items to W152 billion for the first nine months of 2022 from W61 billion for the corresponding period of 2021; and (ii) an increase in net gain on financial investments to W103 billion for the first nine months of 2022 from W56 billion for the corresponding period of 2021, primarily due to an increase in net gain on disposal of financial assets.

As of September 30, 2022, our total assets increased to W129,519 billion from W101,452 billion as of December 31, 2021, primarily due to an increase in Loan Credits to W96,211 billion as of September 30, 2022 from W79,995 billion as of December 31, 2021.

As of September 30, 2022, our total liabilities increased to W114,065 billion from W86,099 billion as of December 31, 2021, primarily due to an increase in debentures to W95,192 billion as of September 30, 2022 from W76,486 billion as of December 31, 2021.

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, 2022 compared to December 31, 2021 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, 2022, our total shareholders’ equity increased to W15,454 billion from W15,353 billion as of December 31, 2021, primarily due to an increase in retained earnings to W2,258 billion as of September 30, 2022 from W1,856 billion as of December 31, 2021, which was offset in large part by a decrease in other components of equity to W557 billion as of September 30, 2022 from W883 billion as of December 31, 2021.

Based on preliminary data, our capital adequacy ratio as of September 30, 2022, on a consolidated basis, was 13.0%, a decrease from 14.8% as of December 31, 2021.

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

 

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information as of June 30, 2022 and December 31, 2021 and for the six months ended June 30, 2022 and 2021, which has been derived from our unaudited separate K-IFRS financial statements as of June 30, 2022 and for the six months ended June 30, 2022 and 2021 included in this prospectus supplement:

 

		Six Months Ended June 30,
		2022				2021
		(billions of Won)
		(unaudited)
Income Statement Data
Total Interest Income		W	1,055			W	871
Total Interest Expense			541				395
Net Interest Income			514				476
Operating Income			665				681
Income before Income Tax			669				690
Income Tax Expense			183				166
Net Income			486				523
		As of June 30, 2022 (unaudited)				As of December 31, 2021
		(billions of Won)
Balance Sheet Data
Total Loan Credits(1)		W	88,292			W	79,995
Total Borrowings(2)			93,130				82,063
Total Assets			115,846				101,452
Total Liabilities			100,293				86,099
Total Shareholders’ Equity			15,553				15,353

 

(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 2022, we had net income of W486 billion compared to W523 billion for the corresponding period of 2021. The principal factor for the decrease in net income was a more than two-fold increase in net loss on hedging derivative assets to W2,710 billion for the first half of 2022 from W760 billion for the corresponding period of 2021, primarily due to an increase in losses on hedging instruments to W2,931 billion for the first half of 2022 from W920 billion for the corresponding period of 2021. Such factor was in large part offset by a nearly three-fold increase in net other operating income to W2,489 billion for the first half of 2022 from W655 billion for the corresponding period of 2021, primarily due to an increase in gain on fair value hedged items to W2,564 billion for the first half of 2022 from W674 billion for the corresponding period 2021.

As of June 30, 2022, our total assets increased to W115,846 billion from W101,452 billion as of December 31, 2021, primarily due to an increase in Loan Credits to W88,292 billion as of June 30, 2022 from W79,995 billion as of December 31, 2021.

As of June 30, 2022, our total liabilities increased to W100,293 billion from W86,099 billion as of December 31, 2021, primarily due to an increase in debentures to W85,074 billion as of June 30, 2022 from W76,486 billion as of December 31, 2021 and an increase in borrowings to W8,055 billion as of June 30, 2022 from W5,577 billion as of December 31, 2021.

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 June 30, 2022 compared to December 31,

 

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2021 magnified the effect of the increase 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 June 30, 2022, our total shareholders’ equity increased to W15,553 billion from W15,353 billion as of December 31, 2021, primarily due to an increase in retained earnings to W2,150 billion as of June 30, 2022 from W1,856 billion as of December 31, 2021.

Operations

Loan Operations

In the first half of 2022, we provided total loans of W32,488 billion, an increase of 3% from the corresponding period of 2021.

Export Credits

As of June 30, 2022, export credits in the amount of W42,222 billion represented 48% of our total outstanding Loan Credits. Our disbursements of export credits amounted to W17,681 billion in the first half of 2022, a decrease of 2% from the corresponding period of 2021, 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, 2022 compared to June 30, 2021 partially offset the effect of the decrease in the volume of export credits in the first half of 2022, 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, 2022, overseas investment credits amounted to W36,730 billion, representing 42% of our total outstanding Loan Credits. Our disbursements of overseas investment credits in the first half of 2022 increased by 5% to W8,877 billion from the corresponding period of 2021, primarily due to increased demand in overseas investment and project credits. The depreciation of the Won against the U.S. dollar as of June 30, 2022 compared to June 30, 2021 magnified the effect of the increase in the volume of overseas investment credits in the first half of 2022, 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, 2022, import credits in the amount of W7,335 billion represented 8% of our total outstanding Loan Credits. Our disbursements of import credits amounted to W5,930 billion in the first half of 2022, an increase of 16% over the corresponding period of 2021, which was mainly due to an increase in 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, 2022 compared to June 30, 2021 magnified the effect of the increase in the volume of import credits in the first half of 2022, 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, 2022 increased to W47,065 billion from W40,231 billion as of December 31, 2021. Guarantees we had confirmed as of June 30, 2022 increased to W34,369 billion from W30,069 billion as of December 31, 2021.

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, 2022 and for the six months ended June 30, 2022 and 2021—Note 36”.

 

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Description of Assets and Liabilities

Total Credit Exposure

The following table sets out our Credit Exposure as of June 30, 2022, categorized by type of exposure extended:

 

		June 30, 2022
		(billions of Won, except for percentages)
A  Loans in Won		W	27,218				23	%
B   Loans in Foreign Currencies			57,767				48
C   Loans (A+B)			84,985				70
D  Other Loans(1)			3,306				3
E   Loan Credits (C+D)			88,292				73
F   Allowances for Loan Losses			1,814				2
G  Loan Credits (including allowance for loan losses) (E-F)			86,477				72
H  Confirmed Guarantees			34,369				28
I   Credit Exposure (G+H)		W	120,846				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, 2022, categorized by geographic area⁽¹⁾:

 

		June 30, 2022				As % of June 30, 2022 Total
		(billions of Won, except for percentages)
Asia(2)		W	68,399				77	%
Europe			9,956				11
America			8,126				9
Africa			1,810				2
Total		W	88,292				100	%

 

(1)

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

(2)	Includes Australia.

Individual Exposure

As of June 30, 2022, our largest Credit Exposure was to Daewoo Shipbuilding & Marine Engineering Co., Ltd. in the amount of W4,494 billion, an increase from W3,379 billion as of December 31, 2021, primarily due to an increase in guarantees.

As of June 30, 2022, our second and third largest Credit Exposures, respectively, were to Hyundai Heavy Industries Co., Ltd. in the amount of W2,887 billion and Samsung Heavy Industries Co., Ltd. in the amount of W2,499 billion.

 

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The following table sets out our five largest Credit Exposures as of June 30, 2022⁽¹⁾:

 

Rank		Name of Borrower		Loans				Guarantees				Total
				(billions of Won)
1		Daewoo Shipbuilding & Marine Engineering			589				3,905				4,494
2		Hyundai Heavy Industries Co., Ltd.			79				2,808				2,887
3		Samsung Heavy Industries Co., Ltd.			168				2,331				2,499
4		SK hynix Inc.			1,893				—				1,893
5		GS Engineering & Construction Corp.			772				830				1,602

 

(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, 2022:

 

		As of June 30, 2022
		Loan Amount(1)				Loan Loss Reserve(2)
Normal		W	150,643			W	650
Precautionary			12,936				1,080
Sub-standard			273				150
Doubtful			233				102
Estimated Loss			1,020				944
Total		W	165,104			W	2,927

 

(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, 2022, the amount of our non-performing assets was W1,526 billion, a decrease of 22.1% from W1,958 billion as of December 31, 2021. As of June 30, 2022, our non-performing asset ratio was 1.0%, compared to 1.3% as of December 31, 2021.

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, 2022:

 

		June 30, 2022
		(billions of Won, except for percentages)
Loan Loss Reserve (A)		W	2,927
NPA (B)(1)			1,526
Total Equity (C)			15,553
Reserve to NPA (A/B)			192	%
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.

 

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Investments

As of June 30, 2022, our total investment in securities amounted to W15,502 billion, representing 13.4% of our total assets.

The following table sets out the composition of our investment securities as of June 30, 2022:

 

Type of Investment Securities		Amount				%
		(billions of Won)
Financial Assets at FVOCI		W	12,006				77	%
Securities at Amortized Cost			1,560				10
Investments in Associates and Subsidiaries			1,936				12
Total		W	15,502				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, 2022 and for the six months ended June 30, 2022 and 2021—Note 5”.

Guarantees and Acceptances and Contingent Liabilities

As of June 30, 2022, we had issued a total amount of W34,369 billion in confirmed guarantees and acceptances, of which W29,940 billion, representing 87.1% of the total amount, was classified as normal and W4,070 billion, representing 11.8% of the total amount, was classified as precautionary, and W359 billion, representing 1.0% of the total amount, was classified as substandard or below.

Derivatives

As of June 30, 2022, our outstanding loans made at floating rates of interest totaled approximately W59,516 billion, whereas our outstanding borrowings made at floating rates of interest totaled approximately W57,605 billion, including those raised in Australian Dollar, Euro and Brazil Real and swapped into U.S. dollar floating rate borrowings. As of June 30, 2022, we had entered into 436 interest rate related derivative contracts with a notional amount of W69,208 billion and had entered into 513 currency related derivative contracts with a notional amount of W32,497 billion. See “—Financial Statements and the Auditors—Notes to Separate Financial Statements as of June 30, 2022 and for the six months ended June 30, 2022 and 2021—Note 20”.

Sources of Funding

We raised a net total of W39,368 billion (new borrowings plus loan repayments by our clients less repayment of our existing debt) during the first half of 2022, an increase of 27.8% from W30,801 billion in the corresponding period of 2021. Total loan repayments, including prepayments by our clients, during the first half of 2022 amounted to W29,081 billion, a decrease of 2.9% from W29,962 billion during the corresponding period of 2021.

As of June 30, 2022, we had no outstanding borrowings from the Government. We issued Won-denominated domestic bonds in the aggregate amount of W12,320 billion during the first half of 2022.

During the first half of 2022, we issued eurobonds in the aggregate principal amount of US$2,861 million in various types of currencies under our existing global medium term notes program, a 1.7% increase from US$2,813 million in the corresponding period of 2021. In addition, we issued global bonds during the first half of 2022 in the aggregate amount of US$3,000 million under our U.S. shelf registration statement compared with US$3,500 million in the corresponding period of 2021. As of June 30, 2022, the outstanding amounts of our notes and debentures were US$30,643 million, HKD 6,508 million, BRL 6,377 million, EUR 5,534 million, THB

 

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7,880 million, CHF 1,250 million, AUD 4,006 million, INR 37,604 million, CNY 7,500 million, IDR 10,733,000 million, PEN 473 million, NZD 174 million, ZAR 6,115 million, NOK 2,250 million, SEK 250 million, GBP 71 million, CAD 65 million, MXN 13,000 million, CZK 3,420 million, PLN 194 million, SGD 200 million and PHP 6,400 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, 2022, the outstanding amount of such borrowings from foreign financial institutions was US$600 million.

As of June 30, 2022, our total paid-in capital amounted to W12,773 billion, and the Government, The Bank of Korea and The Korea Development Bank owned 69%, 9% and 22%, respectively, of our paid-in capital.

As of June 30, 2022, the aggregate outstanding principal amount of our borrowings (including export-import financing debentures), which was W93,130 billion, was equal to 21.5% of the authorized amount of W433,134 billion.

Debt

Debt Repayment Schedule

The following table sets out the principal repayment schedule for our debt outstanding as of June 30, 2022:

Debt Principal Repayment Schedule

 

		Maturing on or before December 31,
Currency(1)		2022				2023				2024				2025				Thereafter
		(billions of won)
Won		W	10,660			W	11,510			W	2,320			W	960			W	1,610
Foreign(2)			9,689				15,794				12,858				9,878				19,550
Total Won Equivalent		W	20,349			W	27,304			W	15,178			W	10,838			W	21,160

 

(1)	Borrowings in foreign currency have been translated into Won at the market average exchange rates on June 30, 2022, as announced by the Seoul Money Brokerage Services Ltd.

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

As of June 30, 2022, 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$3,910 million, US$7,494 million and US$15,288 million, respectively. As of June 30, 2022, our total foreign currency liabilities exceeded our total foreign currency assets by US$6,499 million.

Capital Adequacy

As of June 30, 2022, our capital adequacy ratio, on a consolidated basis, was 14.1%, a decrease from 14.8% as of December 31, 2021.

 

S-20

The following table sets forth our capital base and capital adequacy ratios (on a consolidated basis) reported as of June 30, 2022:

 

		June 30, 2022
		(billions of Won, except for percentages)
Tier I		W	15,614
Paid-in Capital (including capital adjustments)			12,773
Retained Earnings(1)			2,232
Accumulated other comprehensive income			786
Common shares issued by consolidated subsidiaries of the bank and held by third parties			2
Deductions from Tier I Capital			179
Capital Adjustments			134
Deferred Tax Asset			45
Others			—
Tier II (General Loan Loss Reserves)			1,902
Total Capital			17,516
Risk Adjusted Assets			—
Capital Adequacy Ratios
Tier I common equity			12.6	%
Tier 1			12.6	%
Tier I and Tier II			14.1	%

 

(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
Woo-seog Kwon		May 15, 2021		Vice Chairman and Chief Operating Officer
Tae-soo Kim		May 15, 2021		Executive Director
Bok-hwan Yu		January 6, 2020		Non-standing Executive Director
Tammy Chung		January 6, 2020		Non-standing Executive Director
Jaimin Lee		September 18, 2021		Non-standing Executive Director
Tae-ho Yun		September 18, 2021		Non-standing Executive Director

Financial Statements and the Auditors

Our interim separate financial statements as of June 30, 2022 and December 31, 2021 and for the six months ended June 30, 2022 and 2021 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, 2022 and for the six months ended June 30, 2022 and 2021 included in this prospectus supplement.

 

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THE EXPORT-IMPORT BANK OF KOREA

CONDENSED SEPARATE INTERIM STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2022 AND DECEMBER 31, 2021

 

		June 30, 2022				December 31, 2021
		(Korean won in millions)
ASSETS:
Cash and due from financial institutions (Notes 4, 5 and 7)		W	7,394,812			W	4,462,685
Financial assets at fair value through profit or loss (“FVTPL”) (Notes 4, 5, 8 and 20)			4,282,341				2,598,204
Hedging derivative assets (Notes 4, 5 and 20)			123,483				561,911
Loans at amortized cost (Notes 4, 5, 10 and 37)			86,125,277				77,458,119
Financial investments (Notes 4, 5 and 9)			13,566,181				12,745,359
Investments in associates and subsidiaries (Note 11)			1,936,432				1,565,153
Tangible assets, net (Note 12)			272,104				270,367
Intangible assets, net (Note 13)			37,902				34,452
Deferred tax assets (Note 34)			776,315				875,099
Retirement benefit assets, net (Note 18)			8,533				13,605
Other assets (Notes 4, 5, 14 and 37)			1,322,209				866,698
		W	115,845,589			W	101,451,652
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Financial liabilities at FVTPL (Notes 4, 5 and 20)		W	2,076,727			W	768,115
Hedging derivative liabilities (Notes 4, 5 and 20)			2,025,031				661,057
Borrowings (Notes 4, 5 and 15)			8,055,264				5,576,909
Debentures (Notes 4, 5 and 16)			85,074,372				76,486,053
Provisions (Notes 17)			770,218				621,467
Other liabilities (Notes 4, 5, 19 and 37)			2,291,270				1,985,120
			100,292,882				86,098,721
STOCKHOLDERS’ EQUITY:
Capital stock (Notes 1 and 21)			12,773,254				12,748,254
Capital adjustments			(133,716	)			(133,716	)
Other components of equity (Notes 20 and 22)			763,040				882,669
Retained earnings (Note 23)
(Regulatory reserve for loan losses as of June 30, 2022 and December 31 2021: W239,710 million and W149,219 million)			2,150,129				1,855,724
			15,552,707				15,352,931
		W	115,845,589			W	101,451,652

See accompanying notes to condensed separate interim financial statements.

 

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THE EXPORT-IMPORT BANK OF KOREA

CONDENSED SEPARATE INTERIM STATEMENTS OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021

 

		Six months ended June 30, 2022				Six months ended June 30, 2021
		(Korean won in millions)
OPERATING INCOME:
Net interest income (Notes 24 and 37):
Interest income		W	1,055,273			W	871,249
Interest expenses			(541,277	)			(395,039	)
			513,996				476,210
Net commission income (Notes 25 and 37):
Commission income			161,187				139,261
Commission expenses			(10,128	)			(8,994	)
			151,059				130,267
Dividend income (Note 26)			51,524				38,493
Net gain (loss) on financial assets at FVTPL (Note 27)			(91,048	)			28,306
Net gain (loss) on hedging derivative assets (Notes 20 and 28)			(2,709,813	)			(760,263	)
Net gain (loss) on financial investments (Note 29)			(47	)			1,530
Net gain (loss) on foreign exchange transaction			475,506				150,840
Net other operating income (expenses) (Note 30)			2,488,942				655,028
Reversal of (additional) impairment loss on credit (Notes 31 and 37)			(94,070	)			74,165
General and administrative expenses (Note 32)			(121,261	)			(113,201	)
Total operating income			664,788				681,375
NON-OPERATING INCOME (Note 33):
Net gain (loss) on investments in associates and subsidiaries (Note 26)			5,232				10,931
Net other non-operating income (expenses)			(1,113	)			(2,563	)
			4,119				8,368
PROFIT BEFORE INCOME TAX			668,907				689,743
INCOME TAX EXPENSES (Note 34)			(183,246	)			(166,401	)
PROFIT FOR THE PERIOD			485,661				523,342
(Adjusted profit for the period after regulatory reserve for loan losses for the six months ended June 30, 2022 and 2021: W241,245 million and W550,657 million) (Note 23)
OTHER COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD (Note 22)
Items not reclassified subsequently to profit or loss:
Remeasurement of net defined benefit liabilities			—				—
Net gain (loss) on equity securities at fair value through other comprehensive income(“FVOCI”)			86,118				465,732
Income tax effect			(20,841	)			(112,705	)
Items that are or may be reclassified subsequently to profit or loss:
Net gain (loss) on debt securities at FVOCI			(249,108	)			(15,971	)
Net gain (loss) on valuation of cash flow hedge			5,168				970
Income tax effect			59,034				3,630
			(119,629	)			341,656
TOTAL COMPREHENSIVE INCOME		W	366,032			W	864,998

See accompanying notes to condensed separate interim financial statements.

 

S-23

THE EXPORT-IMPORT BANK OF KOREA

CONDENSED SEPARATE INTERIM STATEMENTS OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021

 

										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, 2021		W	12,449,456			W	(132,271	)		W	853,563			W	3			W	11,855			W	(62,104	)		W	1,348,944			W	14,469,446
Paid-in capital increase			298,798				(1,442	)			—				—				—				—				—				297,356
Payment of dividends			—				—				—				—				—				—				(40,759	)			(40,759	)
Total comprehensive income			—				—				325,518				735				—				15,403				523,342				864,998
Profit for the period			—				—				—				—				—				—				523,342				523,342
Other comprehensive income (loss):			—				—				325,518				735				—				15,403				—				341,656
Net gain on valuation of financial assets at FVOCI, net of tax			—				—				325,518				—				—				—				—				325,518
Net gain on valuation of cash flow hedge, net of tax			—				—				—				735				—				—				—				735
Net gain on disposal of financial assets at FVOCI , net of tax			—				—				—				—				—				15,403				—				15,403
June 30, 2021		W	12,748,254			W	(133,713	)		W	1,179,081			W	738			W	11,855			W	(46,701	)		W	1,831,527			W	15,591,041
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 loss 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
June 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

See accompanying notes to condensed separate interim financial statements.

 

S-24

THE EXPORT-IMPORT BANK OF KOREA

CONDENSED SEPARATE INTERIM STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021

 

		Six months ended June 30, 2022				Six months ended June 30, 2021
		(Korean won in millions)
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit for the period		W	485,661			W	523,342
Adjustments to reconcile profit for the period to net cash used in operating activities:
Income tax expenses			183,246				166,401
Interest income			(1,055,273	)			(871,249	)
Interest expenses			541,277				395,039
Dividend and distribution income			(59,006	)			(45,602	)
Dividend received from subsidiaries and associates			(5,232	)			(10,931	)
Loss on financial assets at FVTPL			12,069				11,064
Loss on financial assets at FVOCI			144				—
Transfer to derivatives’ credit risk provision			663				—
Loss on foreign exchange transactions			960,886				464,283
Additional impairment loss on credit			94,070				—
Depreciation and amortization			9,191				8,917
Loss on disposal of tangible, intangible and other assets			2				1
Loss on valuation of derivative assets for trading			1,835,306				557,372
Loss on valuation of derivative assets for hedging			1,949,138				702,584
Loss on fair value hedged items			83,194				29,676
Retirement benefits			5,415				5,617
Gain on financial assets at FVTPL			(34,516	)			(5,030	)
Gain on financial assets at FVOCI			(97	)			(1,530	)
Reversal of derivatives’ credit risk provision			(10,849	)			(14,378	)
Gain on foreign exchange transactions			(1,436,393	)			(696,758	)
Reversal of impairment loss on credit			—				(74,165	)
Gain on disposal of tangible, intangible and other assets			(80	)			(23	)
Gain on valuation of derivative assets for trading			(1,270,639	)			(416,376	)
Gain on valuation of derivative assets for hedging			(152,468	)			(46,010	)
Gain on fair value hedged items			(2,564,231	)			(674,246	)
			(914,183	)			(515,344	)
Changes in operating assets and liabilities:
Due from financial institutions			(2,063,131	)			(148,776	)
Financial assets and liabilities at FVTPL			(896,651	)			947,655
Hedging derivative assets and liabilities			(18,582	)			(75,492	)
Loans at amortized cost			(4,201,293	)			(278,891	)
Other assets			(481,508	)			284,761
Provisions			39,670				3,147
Net retirement benefit liabilities (assets)			(343	)			85
Other liabilities			137,617				(495,416	)
			(7,484,221	)			237,073
Payment of income tax			—				(400,397	)
Interest received			1,012,190				845,957
Interest paid			(350,147	)			(352,007	)
Dividend received			64,238				56,533
Net cash provided by (used in) operating activities			(7,186,462	)			395,157

 

S-25

THE EXPORT-IMPORT BANK OF KOREA

CONDENSED SEPARATE INTERIM STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021 (CONTINUED)

 

		Six months ended June 30, 2022				Six months ended June 30, 2021
		(Korean won in millions)
CASH FLOWS FROM INVESTING ACTIVITIES:
Disposals of financial investments		W	944,242			W	466,064
Disposals of investments in associates			1,230				—
Disposals of tangible assets			80				23
Disposals of intangible assets			74				—
Acquisitions of financial investments			(1,676,093	)			(1,353,538	)
Acquisitions of investments in associates			(372,510	)			(26,461	)
Acquisitions of tangible assets			(5,840	)			(4,256	)
Acquisitions of intangible assets			(8,615	)			(4,168	)
Net cash used in investing activities			(1,117,432	)			(922,336	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings			5,646,121				10,882,659
Proceeds from debentures			12,282,037				30,623,094
Paid-in capital increase			25,000				297,356
Increase in deposits			2				—
Net decrease in call-money			(801,245	)			—
Repayment of borrowings			(2,944,537	)			(11,607,377	)
Repayment of debentures			(5,264,463	)			(29,714,381	)
Payment of dividends			(191,256	)			(40,759	)
Decrease in deposits			(2	)			—
Net cash provided by financing activities			8,751,657				440,592
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			447,763				(86,587	)
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD			3,146,957				3,071,235
EFFECTS OF FOREIGN EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS IN FOREIGN CURRENCIES			250,238				41,869
CASH AND CASH EQUIVALENTS, END OF THE PERIOD (Note 7 and 35)		W	3,844,958			W	3,026,517

See accompanying notes to condensed separate interim financial statements.

 

S-26

THE EXPORT-IMPORT BANK OF KOREA

NOTES TO THE CONDENSED SEPARATE INTERIM FINANCIAL STATEMENTS

AS OF JUNE 30, 2022 AND DECEMBER 31, 2021,

AND FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021

 

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, 2022, 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 W12,773,254 million as of June 30, 2022. The Government of the Republic of Korea (the “Government”), the Bank of Korea, and the Korea Development Bank hold 68.80%, 9.12%, and 22.08%, respectively, of the ownership of the Bank as of June 30, 2022.

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, 2022 and December 31, 2021 are as follows:

(June 30, 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

Jun. 30, 2022

KEXIM Vietnam Leasing Co. (*1)

Vietnam

USD

53mil.

Finance

—

100.00

Jun. 30, 2022

PT.KOEXIM Mandiri Finance

Indonesia

IDR

52,000mil.

Finance

442

85.00

Jun. 30, 2022

KEXIM Asia Limited

Hong Kong

USD

130mil.

Finance

130,000,000

100.00

Jun. 30, 2022

KEXIM Global(Singapore) Ltd

Singapore

USD

300mil.

Finance

300,000,000

100.00

Jun. 30, 2022

EXIM PLUS Co., Ltd.

Korea

KRW

950mil.

Service

190,000

100.00

Jun. 30, 2022

(December 31, 2021)

 

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, 2021

KEXIM Vietnam Leasing Co. (*1)

Vietnam

USD

53mil.

Finance

—

100.00

Dec. 31, 2021

PT.KOEXIM Mandiri Finance

Indonesia

IDR

52,000mil.

Finance

442

85.00

Dec. 31, 2021

KEXIM Asia Limited

Hong Kong

USD

130mil.

Finance

130,000,000

100.00

Dec. 31, 2021

EXIM PLUS Co., Ltd.

Korea

KRW

950mil.

Service

190,000

100.00

Dec. 31, 2021

 

(*1)

This entity does not issue share certificates.

 

S-27