Hyundai card con_2020_3_q

Hyundai Card Co., Ltd. and Subsidiaries
Consolidated Interim Financial Statements as of September 30,
2020 (Unaudited), and December 31, 2019, and for the Three-Month
and Nine-Month Period Ended September 30, 2020 and 2019
Attachment: Report on Review of Consolidated Interim Financial Statements
Hyundai Card Co., Ltd.

Index
As of September 30, 2020 (Unaudited), and December 31, 2019, and for the
Three-Month and Nine-Month Period Ended September 30, 2020 and 2019
Page(s)
Report on Review of Consolidated Interim Financial Statements .................... 1
Consolidated Interim Financial Statements
Consolidated Interim Statements of Financial Position .......................................... 3
Consolidated Interim Statements of Comprehensive Income .................................... 5
Consolidated Interim Statements of Changes in Equity............................................. 6
Consolidated Interim Statements of Cash Flows....................................................... 7
Notes to the Consolidated Interim Financial Statements ................................. 8

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Report on Review of Consolidated Interim Financial Statements
(English Translation of a Report Originally Issued in Korean)
To the Board of Directors and Shareholders of
Hyundai Card Co., Ltd.:
Report on the Consolidated Interim Financial Statements
We have reviewed the accompanying consolidated interim financial statements of Hyundai Card Co.,
Ltd. and subsidiaries (the “Group”). The consolidated interim financial statements consist of the
consolidated interim statement of financial position as of September 30, 2020, and the related
consolidated interim statement of comprehensive income for the three-month and nine-month period,
consolidated interim statement of changes in equity and consolidated interim statement of cash flows
for the nine month period ended September 30, 2020, and a summary of significant accounting policies
and other explanatory information.
Management’s Responsibility for the Consolidated Interim Financial Statements
The Group’s management is responsible for the preparation and fair presentation of the accompanying
consolidated interim financial statements in accordance with Korean International Financial Reporting
Standard (“K-IFRS”) 1034, Interim Financial Reporting, and for such internal control as management
determines is necessary to enable the preparation of consolidated interim financial statements that are
free from material misstatement, whether due to fraud or error.
Independent Accountants’ Responsibility
Our responsibility is to express a conclusion on the accompanying consolidated interim financial
statements based on our reviews.
We conducted our reviews in accordance with standards for review of consolidated interim financial
statements in the Republic of Korea. A review of interim financial information is limited primarily to
inquiries of company personnel responsible for financial and accounting matters and analytical
procedures applied to financial data and other review procedures, and this provides less assurance than
an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Review Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying
consolidated interim financial statements of the Group are not presented fairly, in all material respects,
in accordance with K-IFRS 1034, Interim Financial Reporting.
Other Matter
The comparative consolidated interim statement of comprehensive income for the three month
and nine-month period, consolidated interim statement of changes in equity and consolidated
interim statement of cash flows for the nine-month period ended September 30, 2019, were
reviewed by other accountants, and the review report on November 13, 2019, stated that nothing
has come to their attention that causes them to believe that the accompanying consolidated
interim financial statements of the Group are not presented fairly, in all material respects, in
accordance with K-IFRSs.
We audited the consolidated statement of financial position as of December 31, 2019, and the
related consolidated statement of comprehensive income, consolidated statement of changes in
equity and consolidated statement of cash flows for the year then ended (not presented in the
accompanying consolidated interim financial statements), in accordance with auditing standards
generally accepted in the Republic of Korea. We expressed an unqualified opinion in our
independent auditors’ report dated March 4, 2020. The consolidated statement of financial
position as of December 31, 2019, presented for a comparative purpose in the accompanying
consolidated interim financial statements does not differ, in all material respects, from the audited
consolidated statement of financial position as of December 31, 2019.
November 13, 2020
Notice to Readers
This report is effective as of November 13, 2020, the review report date. Certain subsequent events or
circumstances, which may occur between the review report date and the time of reading this report, could
have a material impact on the accompanying consolidated interim financial statements and notes thereto.
Accordingly, the readers of the review report should understand that there is a possibility that the above review
report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.
2

Consolidated Interim Statements of Financial Position
As of September 30, 2020 (Unaudited), and December 31, 2019
(In Korean won) Notes
Assets
Cash and deposits 5,25,30,31
Cash and cash equivalents ￦ 1,107,551,459,749 ￦ 730,085,686,710
Deposits 42,218,000,000 106,818,000,000
1,149,769,459,749 836,903,686,710
Securities 6,30,31
Financial assets at fair value through profit or loss 1,375,352,928,333 720,749,342,411
Financial assets at fair value through
other comprehensive income 1,483,575,000 1,483,575,000
1,376,836,503,333 722,232,917,411
Card assets 7,27,28,30,31
Card receivables 11,248,092,491,163 10,718,403,583,371
Provision for impairment (163,403,490,652) (150,917,490,969)
Short-term card loan 612,694,652,451 690,254,545,908
Long-term card loan 4,138,719,407,457 3,942,596,297,850
15,507,226,496,072 14,908,458,715,929
Loan receivables 7,30,31
Loan receivables 5,254,486,125 4,778,942,169
Provision for impairment (699,589,976) (268,427,891)
4,554,896,149 4,510,514,278
Property and equipment 9,27
Land 162,719,416,049 139,408,257,581
Buildings 151,960,720,824 148,585,297,911
Accumulated depreciation (27,538,010,892) (25,125,667,321)
Vehicles 2,514,088,391 2,514,088,391
Accumulated depreciation (1,076,443,541) (955,520,396)
Fixtures and equipment 250,594,210,966 245,913,667,283
Accumulated depreciation (210,436,043,592) (194,410,551,380)
Construction in progress 379,158,920 475,393,628
329,117,097,125 316,404,965,697
Other assets
Other receivables 8,30,31 150,871,822,502 126,842,993,823
Provision for impairment (1,737,866,417) (363,204,913)
Accrued revenue 8,30,31 45,214,468,599 48,983,426,496
Advance payments 98,749,776,967 32,316,679,609
Provision for impairment (245,985,688) (229,835,915)
Prepaid expenses 85,074,781,846 86,163,171,491
Intangible assets 10,27 104,931,817,947 104,223,082,692
Right-of-use assets 11 54,049,220,908 44,403,709,329
Derivative assets 15,29,30,31 18,673,597,550 22,011,168,789
Deferred tax assets 24 159,459,821,820 166,348,167,177
Guarantee deposits provided 5,8,30,31 20,966,961,925 22,170,535,771
Others 7,571,127,461 8,098,315,546
741,684,745,873 658,883,519,943
Total assets ￦ 19,109,189,198,301 ￦ 17,447,394,319,968
(Continued)
December 31, 2019September 30, 2020
(Unaudited)
3

Consolidated Interim Statements of Financial Position (Continued)
As of September 30, 2020 (Unaudited), and December 31, 2019
Liabilities
Borrowings 12,26,30,31
Borrowings ￦ 1,928,583,300,000 ￦ 2,739,000,000,000
Debentures 11,168,759,600,008 9,108,813,818,863
13,097,342,900,008 11,847,813,818,863
Other liabilities
Other payables 27,30,31 1,682,888,101,081 1,291,895,818,950
Accrued expenses 30,31 129,313,045,703 165,079,830,845
Unearned revenue 395,550,408,169 385,492,775,610
Withholdings 30,31 93,508,449,861 216,633,318,989
Lease liabilities 11,27,30,31 51,826,673,281 42,754,752,586
Derivative liabilities 15,29,30,31 61,856,321,228 21,023,992,588
Current tax liabilities 62,797,869,901 52,764,482,545
Net employee benefit liabilities 13 3,262,465,481 (2,834,390,049)
Guarantee deposits received 30,31 10,231,568,908 9,908,301,049
Provisions 14,26 111,936,897,914 110,235,273,031
2,603,171,801,527 2,292,954,156,144
Total liabilities 15,700,514,701,535 14,140,767,975,007
Equity
Share capital 16 802,326,430,000 802,326,430,000
Reserves 57,704,443,955 57,704,443,955
Hybrid securities 16 299,239,980,000 299,239,980,000
Accumulated other comprehensive income 18 (49,783,498,558) (30,647,157,992)
Retained earnings 17,19 2,299,187,141,369 2,178,002,648,998
Total equity 3,408,674,496,766 3,306,626,344,961
Total liabilities and equity ￦ 19,109,189,198,301 ￦ 17,447,394,319,968
(Concluded)
The above consolidated interim statements of financial position should be read in conjunction with the accompanying notes.
(Unaudited)
September 30, 2020 December 31, 2019
4

Consolidated Interim Statements of Comprehensive Income
Three-Month and Nine-Month Period Ended September 30, 2020 and 2019
Notes
Operating income
Card income 20,27 ₩ 283,885,532,095 ₩ 864,910,054,293 ₩ 253,004,277,376 ₩ 887,091,249,134
Effective interest method interest income 21 264,593,643,438 808,681,094,912 256,889,985,061 762,655,678,265
Gain on valuation and disposal of securities 82,615,882 4,013,548,158 621,087,224 3,218,519,702
Dividend income 5,804,607 83,039,350 - 30,020,435
Other operating income 22,27 22,310,147,150 137,958,185,229 87,766,218,764 182,133,182,406
570,877,743,172 1,815,645,921,942 598,281,568,425 1,835,128,649,942
Operating expenses
Card expenses 20,27 174,391,684,654 521,923,936,186 165,690,087,172 589,140,146,525
Interest expenses 21 65,668,767,881 196,449,084,701 65,366,882,598 192,178,071,442
Selling and administrative expenses 13,23,27 172,497,563,858 502,985,053,443 169,168,894,475 497,273,692,321
Securitization expenses 332,198,263 1,015,272,100 326,528,569 729,137,711
Impairment losses 7,8 60,099,211,887 128,910,026,442 39,821,626,208 104,726,786,393
Loss on disposal of loan receivables 26 17,459,280 52,430,305,632 32,367,190,245 102,161,183,995
Increase in provision for unused credit limits 14 (489,035,238) 4,307,237,358 2,507,837,028 5,110,966,036
Other operating expenses 22,27 10,946,729,313 106,455,094,761 74,795,141,015 144,067,061,357
483,464,579,898 1,514,476,010,623 550,044,187,310 1,635,387,045,780
Operating profit 87,413,163,274 301,169,911,319 48,237,381,115 199,741,604,162
Non-operating income
Gain on disposal of property and equipment, and intangible assets 131,331,566 165,094,738 14,892,740 18,500,461
Gain on disposal of assets held for sale - - - 697,036,802
Rental income 27 1,089,307,573 3,234,407,113 1,090,287,436 2,954,959,801
Miscellaneous gain 24,487,782 153,162,293 61,685,342 468,872,063
1,245,126,921 3,552,664,144 1,166,865,518 4,139,369,127
Non-operating expenses
Loss on disposal of property and equipment, and intangible assets 745,087,746 1,285,401,837 627,556 43,444,792
Donations 30,687,132 1,207,383,299 30,304,854 190,859,043
Miscellaneous losses - - - 1,975,953
775,774,878 2,492,785,136 30,932,410 236,279,788
Profit before income tax expense 87,882,515,317 302,229,790,327 49,373,314,223 203,644,693,501
Income tax expense 24 21,662,499,455 69,858,563,634 19,376,021,533 51,825,756,175
Profit for the period 66,220,015,862 232,371,226,693 29,997,292,690 151,818,937,326
Other comprehensive income 18
Items that will not be reclassified to profit or loss
Remeasurements of net defined benefit liabilities (545,687,090) (3,273,860,512) (757,251,315) (3,282,487,403)
Items that may be subsequently reclassified to profit or loss
Cash flow hedges 11,474,644,370 (15,862,480,054) (5,898,100,569) (23,502,007,088)
10,928,957,280 (19,136,340,566) (6,655,351,884) (26,784,494,491)
Total comprehensive income for the period ₩ 77,148,973,142 ₩ 213,234,886,127 ₩ 23,341,940,806 ₩ 125,034,442,835
Earnings per share 32
Basic earnings per share ₩ 391 ₩ 1,382 ₩ 165 ₩ 880
Diluted earnings per share 391 1,382 165 880
The above consolidated interim statements of comprehensive income should be read in conjunction with the accompanying notes.
Periods Ended September 30
(in Korean won)
2020
(Unaudited)
2019
(Unaudited)
Three months Nine months Three months Nine months
5

Consolidated Interim Statements of Changes in Equity
Nine-Month Period Ended September 30, 2020 and 2019
(in Korean won)
Balance at January 1, 2019 ₩ 802,326,430,000 ₩ 45,399,364,539 ₩ 12,305,079,416 ₩ 299,239,980,000 ₩ (23,455,255,045) ₩ 2,055,291,873,757 ₩ 3,191,107,472,667
Dividends paid - - - - - (30,809,334,912) (30,809,334,912)
Total comprehensive income
Profit for the period - - - - - 151,818,937,326 151,818,937,326
Other comprehensive income
Remeasurements of net defined benefit liabilities 　- 　- 　- - (3,282,487,403) - (3,282,487,403)
Cash flow hedges 　- 　- 　- - (23,502,007,088) - (23,502,007,088)
Transactions with shareholders recognized directly in equity
Distribution from hybrid securities 　- 　- 　- - - (10,575,000,000) (10,575,000,000)
Balance at September 30, 2019 (Unaudited) ₩ 802,326,430,000 ₩ 45,399,364,539 ₩ 12,305,079,416 ₩ 299,239,980,000 ₩ (50,239,749,536) ₩ 2,165,726,476,171 ₩ 3,274,757,580,590
Balance at January 1, 2020 ₩ 802,326,430,000 ₩ 45,399,364,539 ₩ 12,305,079,416 ₩ 299,239,980,000 ₩ (30,647,157,992) ₩ 2,178,002,648,998 ₩ 3,306,626,344,961
Dividends paid - - - - - (100,611,734,322) (100,611,734,322)
Total comprehensive income
Profit for the period - - - - - 232,371,226,693 232,371,226,693
Other comprehensive income
Remeasurements of net defined benefit liabilities 　- 　- 　- - (3,273,860,512) 　- (3,273,860,512)
Cash flow hedges 　- 　- 　- - (15,862,480,054) 　- (15,862,480,054)
Transactions with shareholders recognized directly in equity
Distribution from hybrid securities 　- 　- 　- - - (10,575,000,000) (10,575,000,000)
Balance at September 30, 2020 (Unaudited) ₩ 802,326,430,000 ₩ 45,399,364,539 ₩ 12,305,079,416 ₩ 299,239,980,000 ₩ (49,783,498,558) ₩ 2,299,187,141,369 ₩ 3,408,674,496,766
The above consolidated interim statements of changes in equity should be read in conjunction with the accompanying notes.
Retained
capital premium reserves securities comprehensive income earnings Total
Reserves Accumulated
Share Share Other Hybrid other
6

Consolidated Interim Statements of Cash Flows
Nine-Month Period Ended September 30, 2020 and 2019
Cash flows from operating activities
Cash used in operating activities 25 ₩ (1,257,621,555,235) ₩ (866,870,323,642)
Interests received 781,547,449,372 740,926,788,537
Interests paid (171,358,094,244) (165,055,113,480)
Dividends received 83,039,350 30,020,435
Income taxes paid (46,040,301,310) (35,566,714,780)
Net cash outflow from operating activities (693,389,462,067) (326,535,342,930)
Cash flows from investing activities
Disposal of financial assets at fair value through profit or loss 1,218,400,000 -
Disposal of assets held for sale - 6,400,000,000
Disposal of property and equipment 3,766,752,773 19,625,000
Disposal of intangible assets 174,000,000 -
Acquisition of financial assets at fair value through profit or loss (3,997,371,000) (5,029,764,000)
Acquisition of property and equipment (39,706,830,696) (12,602,465,741)
Acquisition of intangible assets (24,872,261,742) (21,226,871,413)
Net decrease in guarantee deposits provided 1,272,189,564 6,800,478,885
Net cash outflow from investing activities (62,145,121,101) (25,638,997,269)
Cash flows from financing activities
Proceeds from borrowings 1,745,000,000,000 1,715,000,000,000
Proceeds from issue of debentures 8,821,211,707,559 9,705,780,433,410
Repayment of borrowings (2,555,416,700,000) (1,985,000,000,000)
Repayment of debentures (6,751,550,000,000) (8,946,039,997,696)
Repayment of lease liabilities (14,981,335,740) (13,030,807,815)
Dividends paid (100,611,734,322) (30,809,577,033)
Distribution from hybrid securities (10,575,000,000) (10,575,000,000)
Net cash inflow from financing activities 1,133,076,937,497 435,325,050,866
Net increase in cash and cash equivalents 377,542,354,329 83,150,710,667
(76,581,290) (271,483,129)
Cash and cash equivalents at the beginning of period 25 730,085,686,710 866,456,158,726
Cash and cash equivalents at the end of period 25 ₩ 1,107,551,459,749 ₩ 949,335,386,264
The above consolidated interim statements of cash flows should be read in conjunction with the accompanying notes.
2020 2019
Effects of exchange rate changes on cash and cash equivalents
denominated in foreign currency
Periods ended September 30
(Unaudited) (Unaudited)
7

Notes to the Consolidated Interim Financial Statements
Three-Month and Nine-Month period Ended September 30, 2020 and 2019
1. GENERAL INFORMATION:
Hyundai Card Co., Ltd. (the “Company”), which is a controlling company in accordance with
Korean International Financial Reporting Standard (“K-IFRS”) 1110 Consolidated Financial
Statements, is engaged in the credit card business with its headquarters located at 3,
Uisadang-daero, Yeongdeungpo-gu, Seoul. On June 15, 1995, the Company acquired the
credit card business of Korea Credit Circulation Co., Ltd., and on June 16, 1995, the Korean
government granted permission to the Company to engage in the credit card business. The
Company operates its business under the Specialized Credit Financial Business Act and other
relevant applicable regulations.
As of September 30, 2020, the Company has approximately 8.94 million card members, 2.78
million registered merchants and 32 marketing centers and branches.
As of September 30, 2020, the total ordinary shares of the Company amounted to ￦802,326
million after several capital increases and retirement of treasury shares. The shareholders as
of September 30, 2020, and December 31, 2019, are as follows:
Number of
shares
Percentage of
ownership
(%)
Number of
shares
Percentage of
ownership
(%)
Hyundai Motor Co., Ltd. 59,301,937 36.96 59,301,937 36.96
Kia Motors Co., Ltd. 18,422,142 11.48 18,422,142 11.48
Hyundai Commercial Inc. 39,378,026 24.54 39,378,026 24.54
Consumer Preferred Choice Limited 16,046,527 9.99 16,046,527 9.99
Complete Logistic Solutions Limited 14,441,876 9.00 14,441,876 9.00
AlpInvest Partners Co-Investments 2015
I SPV B.V. 7,101,393 4.43 7,101,393 4.43
AlpInvest Partners Co-Investments 2015
II SPV B.V. 707,652 0.44 707,652 0.44
AlpInvest Mich SPV B.V. 214,221 0.14 214,221 0.14
Others 4,851,512 3.02 4,851,512 3.02
160,465,286 100.00 160,465,286 100.00
8

2. SIGNIFICANT ACCOUNTING POLICIES:
2.1 Basis of Preparation
The Hyundai Card Co., Ltd. and subsidiaries (the “Group”) maintains its accounting records in
Korean won and prepares statutory financial statements in the Korean language (Hangul) in
accordance K-IFRSs. The accompanying consolidated interim financial statements have been
condensed, restructured and translated into English from the Korean language financial
statements.
Certain information attached to the Korean language financial statements, but not required for
a fair presentation of the Group's financial position, financial performance or cash flows, is not
presented in the accompanying consolidated interim financial statements.
The Group’s consolidated interim financial statements as of and for the nine-month period
ended September 30, 2020, have been prepared in accordance with K-IFRS 1034 Interim
Financial Reporting. These consolidated interim financial statements have been prepared in
accordance with this K-IFRS, which is effective or early adopted as of September 30, 2020.
(a) New standards and interpretations adopted by the Group
The Group has applied the following standards and interpretations for the first time for its
annual reporting period commencing January 1, 2020:
-K-IFRS 1103, Definition of a Business (Amendments)
The amendments clarify that while businesses usually have outputs, the outputs are not
required for an integrated set of activities and assets to qualify as a business. To be considered
a business, an acquired set of activities and assets must include, at a minimum, an input and
a substantive process that together significantly contribute to the ability to create outputs.
Additional guidance is provided that helps to determine whether a substantive process has
been acquired.
The amendments introduce an optional concentration test that permits a simplified
assessment of whether an acquired set of activities and assets is not a business. Under the
optional concentration test, the acquired set of activities and assets is not a business if
substantially all of the fair value of the gross assets acquired is concentrated in a single
identifiable asset or group of similar assets.
9

-Amendments to References to the Conceptual Framework in IFRS Standards
Together with the revised Conceptual Framework, which became effective upon publication
on December 21, 2018, the International Accounting Standards Board (“IASB”) has also
issued Amendments to References to the Conceptual Framework in IFRS Standards. The
document contains amendments to K-IFRSs 1102, 1103, 1106, 1114, 1001, 1008, 1034, 1037,
1038, 2112, 2119, 2120, 2122 and 2032.
Not all amendments, however, update those pronouncements with regard to references and
quotes from the framework so that they refer to the revised Conceptual Framework. Some
pronouncements are only updated to indicate which version of the framework they are
referencing to (the Framework (2007), the IASB Framework of 2010 or the new revised
Framework of 2018) or to indicate that definitions in the standard have not been updated with
the new definitions developed in the revised Conceptual Framework.
-K-IFRS 1116, Lease (Enforceable period)
The K-IFRS Interpretations Committee interpreted the concept of losses or penalties to be
considered in determining the enforceable period under K-IFRS 16 as a concept that includes
economic losses, as well as the amount of payments specified in the contract. It was also
interpreted that the lease is enforceable beyond the date on which the party can terminate the
lease without the consent of the other party if only one party pays a small amount.
However, the Group will fully review the impacts of the K-IFRS Interpretations Committee's
decisions on the consolidated interim financial statements and related notes and reflect them
as changes in accounting policies during the current period based on what the Due Process
Oversight Committee allows through the relevant agenda decision, and the consolidated
interim financial statements have not yet reflected the K-IFRS Interpretations Committee's
decisions. When applying the K-IFRS Interpretations Committee's decision, some of the
Group's lease agreements may differ in terms of the period of execution, and the main lease
contracts that are likely to change the judgment on the period of execution are real estate, etc.
(b) New standards and interpretations not yet adopted by the Group
Although the Group has been enacted or announced, the effective date has not met the fiscal
year starting after January 1, 2020, and the enacted and revised standards that have not been
early adopted are as follows:
10

-K-IFRS 1116, Lease (Amendments)
Under a practical expedient, a lessee may elect not to assess whether a rent concession,
which occurs as a direct consequence of the COVID-19 pandemic, is a lease modification. A
lessee that makes this election shall account for any change in lease payments resulting from
the rent concession the same way it would account for the change applying this standard if
the change was not a lease modification. On the other hand, the practical expedient according
to the amendment is not provided to the lessor. The practical expedient applies only to rent
concession that satisfies all the following conditions.
• The change in lease payments results in revised consideration for the lease that is
substantially the same as, or less than, the consideration for the lease immediately
preceding the change.
• Any reduction in lease payments affects only payments originally due on or before
June 30, 2021.
• There is no substantive change to other terms and conditions of the lease.
The amendment is effective from the first annual reporting periods beginning after June 1,
2020.
2.2 Significant Accounting Policies
Significant accounting policies and method of computation used in the preparation of the
consolidated interim financial statements are consistent with those of the consolidated
financial statements as of and for the year ended December 31, 2019, except for the changes
due to the application of amendments and enactments of standards described in Note 2.1. (a)
and the one described below:
2.2.1 Income Tax Expense
Income tax expense for the interim period is recognized based on management’s best
estimate of the weighted-average annual income tax rate expected for the full financial year.
The estimated average annual tax rate is applied to the pretax income.
11

3. CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS:
(a) The Group makes estimates and assumptions concerning the future. Estimates and
assumptions are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the
current circumstances. Actual results may differ from those estimates.
Significant accounting estimates and assumptions applied in the preparation of these
consolidated interim financial statements are the same as those that applied to the
consolidated financial statements as of and for the year ended December 31, 2019, except for
the changes due to the application of amendments and enactments of standards described in
Note 2.1 (a) and the estimates used to determine income tax expense.
(b) The Group anticipated the impact of COVID-19 and partially reflected it for the nine-month
period ended September 30, 2020, but as COVID-19 prolongs, there are uncertainties in the
extent and duration of the impact on the Group’s business.
12

4. CONSOLIDATED SUBSIDIARIES:
Details of the consolidated subsidiaries as of September 30, 2020, and December 31, 2019,
are as follows:
Ownership interest held by
the Group (%)
Main business Location
September
30, 2020
December 31,
2019
Closing
month
Super Series 3rd SPC1 Asset securitization Korea - 0.5 December
Super Series 4th SPC1 Asset securitization Korea 0.5 0.5 December
Super Series 8th SPC1 Asset securitization Korea 0.5 - December
Super Series 9th SPC1 Asset securitization Korea 0.5 - December
Bluewalnut Co., Ltd. Electronic banking Korea 100.00 100.00 December
Money Market Trust Trust business Korea 100.00 100.00 -
1
In determining power over subsidiaries, except for Bluewalnut Co., Ltd. and Money Market
Trust, voting rights or similar rights are not major components. Accordingly, these subsidiaries
are considered as structured entities.
Above subsidiaries, except for Money Market Trust and Bluewalnut Co., Ltd., are
special-purpose companies (“SPCs”) that were established for business activities of
consolidated entities. Although the Company has less than half of ownership interest in the
subsidiaries, the Company is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its power over the investee,
it is judged to have control in accordance with K-IFRS 1110.
Meanwhile, in the event of non-payment arising from derivative contracts regarding
asset-backed securities issued by SPCs, counterparties of the derivative contracts can claim
for reimbursement from the Company.
13

Details of the Group’s subsidiaries as of September 30, 2020, are as follows:
(In millions of Korean September 30, 2020
won)
Assets Liabilities
Operating
income
Profit (loss) for
the period
Comprehensive
income (loss)
Super Series 4th SPC 10 - 20,460 10 133
Super Series 5th SPC 333,423 340,380 10,925 - (133)
Super Series 6th SPC 457,512 469,467 12,704 - (3,752)
Super Series 7th SPC 400,114 400,114 5,305 - -
Bluewalnut Co., Ltd. 46,739 32,004 44,038 (3,869) (3,868)
Money Market Trust 589,000 - 193 193 193
Subsidiaries newly included during the nine-month period ended September 30, 2020, are as
follows:
Name of subsidiary Reason
Super Series 8th SPC Establishment
Super Series 9th SPC Establishment
Subsidiary excluded during the nine-month period ended September 30, 2020, is as follows:
Name of subsidiary Reason
Super Series 3rd SPC Liquidation
Non-controlling interests
Non-controlling interests of a consolidated SPC have been measured at initial acquisition cost
because they do not have any claim of residual income. Also, the Group does not state
non-controlling interests as capital, but as liability.
14

5. RESTRICTED FINANCIAL ASSETS:
Details of restricted financial assets as of September 30, 2020, and December 31, 2019, are
as follows:
(In millions of Korean won) September
30, 2020
December
31, 2019 Description
Cash and
deposits
Kookmin Bank and
others
18 18
Guarantee deposits for
overdraft
Shinhan Bank and
others
23,100 23,100 Secured deposits
Citibank and others 27,754 26,305
Deposits related to
securitization
Citibank and others - 6,283 Others
Other financial
assets
Korea Asset
Management
7,767 7,767
Escrow account in relation to
sale of Daewoo Engineering
& Construction Co., Ltd.
58,639 63,473
6. SECURITIES:
Securities as of September 30, 2020, and December 31, 2019, are as follows:
(In millions of Korean won)
September 30,
2020
December 31,
2019
Financial assets at fair value through profit or loss
Debt securities 1,375,070 720,466
Equity securities 283 283
1,375,353 720,749
Financial assets at fair value through other
comprehensive income
Equity securities 1,484 1,484
1,376,837 722,233
15

7. CARD ASSETS AND LOAN RECEIVABLES:
Details of card assets and loan receivables by customers as of September 30, 2020, and
December 31, 2019, are as follows:
(In millions of September 30, 2020
Korean won)
Principal
Deferred
origination
cost and fee
Present
value of
discounts
Provision for
impairment
Carrying
amount
Card receivables
Household 10,617,106 (23,942) (21,736) (158,154) 10,413,274
Corporates 676,665 - - (5,250) 671,415
Short-term card loan
Household 612,695 - - (39,395) 573,300
Long-term card loan
Household 4,139,083 - (363) (289,482) 3,849,238
Loan receivables
Household 5,254 - - (700) 4,554
16,050,803 (23,942) (22,099) (492,981) 15,511,781
(In millions of December 31, 2019
Korean won)
Principal
Deferred
origination
cost and fee
Present
value of
discounts
Provision for
impairment
Carrying
amount
Card receivables
Household 9,971,721 (20,549) (20,545) (146,993) 9,783,634
Corporates 787,776 - - (3,925) 783,851
Short-term card loan
Household 690,255 - - (36,697) 653,558
Long-term card loan
Household 3,943,030 - (434) (255,181) 3,687,415
Loan receivables
Household 4,779 - - (268) 4,511
15,397,561 (20,549) (20,979) (443,064) 14,912,969
16

Changes in card assets and loan receivables for the nine-month period ended September 30,
2020 and 2019, are as follows:
(In millions of Korean won) 2020
Card receivables Short-term card loan
Lifetime expected credit
losses
losses
12-month
expected
credit losses
Not
impaired Impaired
12-month
expected credit
losses
Not
impaired Impaired
Beginning balance 9,601,372 1,145,907 12,217 504,160 181,957 4,138
Transfer between stages
Transfer to assets
measured at 12-month
expected credit losses 509,998 (509,814) (184) 37,457 (37,451) (6)
Transfer to assets
measured at lifetime
expected credit losses (549,832) 549,959 (127) (38,849) 38,857 (8)
Impairment (22,285) (13,021) 35,306 (5,985) (3,392) 9,377
New and removal 544,009 53,593 8,211 (44,394) (11,288) 8,691
Write-off - - (8,123) - - (3,812)
Disposal and repurchase (25,040) (31,521) (6,855) (12,403) (12,008) (2,345)
Ending balance 10,058,222 1,195,103 40,445 439,986 156,675 16,035
2020
Long-term card loan Loan receivables
losses
losses
12-month
expected
credit losses
Not
impaired Impaired
12-month
expected
credit losses
Not
impaired Impaired Total
Beginning balance 3,250,547 511,608 180,875 4,356 342 82 15,397,561
Transfer to assets
expected credit losses 113,586 (113,556) (30) 111 (111) - -
Transfer to assets
expected credit losses (226,298) 226,435 (137) (119) 119 - -
Impairment (29,122) (10,017) 39,139 (46) (31) 77 -
New and removal 329,942 (86,287) 35,989 180 464 (13) 839,097
Write-off - - (11,876) - - (16) (23,827)
Disposal and repurchase (32,430) (30,235) (9,049) (84) (35) (22) (162,027)
Ending balance 3,406,225 497,948 234,911 4,398 748 108 16,050,804
17

losses
losses
12-month
expected credit
losses
Not
impaired Impaired
12-month
expected credit
losses
Not
impaired Impaired
Beginning balance 7,968,398 994,173 12,118 502,124 165,843 4,585
Transfer to assets
Transfer to assets
expected credit losses (469,796) 469,952 (156) (43,048) 43,048 -
Impairment (10,922) (6,655) 17,577 (3,606) (1,597) 5,203
New and removal 891,287 48,264 (1,702) 17,539 9,785 675
Write-off - - (8,959) - - (4,095)
Ending balance 8,741,704 1,047,417 11,491 482,715 169,581 3,773
2019
Long-term card loan Loan receivables
losses
losses
12-month
expected
credit losses
Not
impaired Impaired
12-month
expected
credit losses
Not
Beginning balance 2,974,942 613,327 173,300 18,849 1,327 62 13,429,048
Transfer to assets
Transfer to assets
Impairment (12,604) (5,699) 18,303 (50) (17) 67 -
New and removal 342,424 (183,030) 12,288 (12,166) (622) (18) 1,124,724
Write-off - - (10,626) - - (44) (23,724)
Ending balance 3,104,237 515,261 180,968 6,343 510 23 14,264,023
18

Changes in provisions for impairment of card assets and loan receivables for the nine-month
period ended September 30, 2020 and 2019, are as follows:
losses
losses
12-month
expected credit
losses
Not
impaired Impaired
12-month
expected credit
losses
Not
impaired Impaired
Beginning balance 57,854 85,350 7,714 14,116 19,948 2,633
Transfer to assets
Transfer to assets
expected credit losses (5,715) 5,789 (74) (1,112) 1,118 (6)
Impairment (4,526) (3,160) 7,686 (2,308) (1,116) 3,424
Write-off - - (8,123) - - (3,812)
Recovered - - 520 - - 210
Additional (reversal of)
provisions (11,914) 33,772 20,245 3,056 4,435 8,487
Ending balance 58,837 79,875 24,692 12,398 17,211 9,786
(In millions of Korean 2020
won) Long-term card loan Loan receivables
losses
losses
12-month
expected
credit losses
Not
impaired Impaired
12-month
expected
credit losses
Not
Beginning balance 93,732 40,596 120,854 167 35 65 443,064
Transfer to assets
Transfer to assets
Impairment (7,398) (2,663) 10,061 (6) (3) 9 -
Write-off - - (11,876) - - (16) (23,827)
Recovered - - 631 - - - 1,361
provisions 16,729 14,383 38,019 95 346 56 127,709
Ending balance 95,951 41,211 152,321 229 370 99 492,980
19

losses
losses
12-month
expected credit
losses
Not
impaired Impaired
12-month
expected credit
losses
Not
impaired Impaired
Transfer to assets
Transfer to assets
expected credit losses (5,680) 5,783 (103) (1,113) 1,113 -
Impairment (4,277) (3,343) 7,620 (2,329) (1,170) 3,499
Write-off - - (8,959) - - (4,095)
Recovered - - 627 - - 213
provisions (2,229) 32,008 3,805 6,733 6,340 1,265
Ending balance 52,733 74,463 7,191 12,976 17,258 2,393
(In millions of Korean 2019
won) Long-term card loan Loan receivables
losses
losses
12-month
expected
credit losses
Not
impaired Impaired
12-month
expected
credit losses
Not
Beginning balance 80,740 46,781 101,835 893 178 46 400,408
Transfer to assets
Transfer to assets
Impairment (5,631) (2,628) 8,259 (27) (13) 40 -
Write-off - - (10,626) - - (44) (23,724)
Recovered - - 627 - - - 1,467
provisions 26,577 8,378 22,653 (587) (19) 7 104,931
Ending balance 89,597 38,077 115,737 255 55 17 410,752
20

8. OTHER FINANCIAL ASSETS MEASURED AT AMORTIZED COST:
Details of other financial assets measured at amortized cost as of September 30, 2020, and
(In millions of Korean won) September 30, 2020
Bond principal
Provision for
impairment
Book Value
Other receivables 150,872 (1,738) 149,134
Accrued revenue 45,214 (1,894) 43,320
Guarantee deposits provided 20,967 - 20,967
217,053 (3,632) 213,421
(In millions of Korean won) December 31, 2019
Bond principal
Provision for
impairment
Book Value
Other receivables 126,843 (363) 126,480
Accrued revenue 48,983 (2,085) 46,898
Guarantee deposits provided 22,171 - 22,171
197,997 (2,448) 195,549
Changes in provisions of other financial assets measured at amortized cost for the nine-month
period ended September 30, 2020 and 2019, are as follows:
Other receivables Accrued revenue
Beginning balance 363 2,085
Additional (reversal of) provisions 1,375 (190)
Ending balance 1,738 1,895
Other receivables Accrued revenue
Beginning balance 263 2,100
Additional (reversal of) provisions 3 (242)
Ending balance 266 1,858
21

9. PROPERTY AND EQUIPMENT:
Changes in property and equipment for the nine-month period ended September 30, 2020
and 2019, are as follows:
(In millions of 2020
Korean won)
Land Buildings Vehicles
Fixtures and
equipment
Construction
in progress Total
Beginning balance 139,408 123,460 1,559 51,503 475 316,405
Acquisitions 26,376 5,036 - 6,863 289 38,564
Reclassification
Reclassification
among tangible
assets - - - 385 (385) -
Reclassification from
intangible assets - - - 28 - 28
Disposal (3,065) (1,241) - (2) - (4,308)
Depreciation - (2,832) (121) (18,619) - (21,572)
Ending balance 162,719 124,423 1,438 40,158 379 329,117
Korean won)
Land Buildings Vehicles
Fixtures and
equipment
Construction
in progress Total
Acquisitions - 7 - 10,277 313 10,597
Reclassification
Reclassification
among tangible
assets - 27 - 2,932 (2,959) -
Reclassification from
intangible assets - - - 1,189 - 1,189
Reclassification into
right-of-use assets - - - (1,502) - (1,502)
Disposal - - - (45) - (45)
Depreciation - (2,796) (121) (24,732) - (27,649)
Ending balance 139,408 124,229 1,599 54,671 954 320,861
22

10. INTANGIBLE ASSETS:
Changes in intangible assets for the nine-month period ended September 30, 2020 and 2019,
are as follows:
Korean won) Developm-
ent cost Software Others
Construction
in progress
Member-
ship Total
Beginning balance 58,694 12,868 2 12,848 19,811 104,223
Acquisitions 9,781 2,624 - 6,399 2,678 21,482
Reclassification
Reclassification
among intangible
assets 7,300 1,244 - (8,544) - -
tangible assets - - - (28) - (28)
Disposal (603) - - - (148) (751)
Amortization (16,312) (3,682) - - - (19,994)
Ending balance 58,860 13,054 2 10,675 22,341 104,932
Korean won) Developm-
ent cost Software Others
Construction
in progress
Member-
ship Total
Beginning balance 63,138 14,789 118 8,730 19,811 106,586
Acquisitions 10,253 2,498 - 6,296 - 19,047
Reclassification
Reclassification
among intangible
assets 5,232 67 - (5,299) - -
tangible assets - - - (1,190) - (1,190)
selling and
administrative
expenses - - - (228) - (228)
Disposal - - - - - -
Amortization (23,068) (5,592) (116) - - (28,776)
Ending balance 55,555 11,762 2 8,309 19,811 95,439
23

11. LEASE:
The Group as a lessee
Changes in right-of-use assets for the nine-month period ended September 30, 2020 and
2019, are as follows:
Korean won) Buildings Vehicles Others Total
Beginning balance 43,316 196 892 44,404
Acquisitions 59,619 159 - 59,778
Disposal (36,152) (9) - (36,161)
Amortization (15,734) (107) (259) (16,100)
Other 2,128 - - 2,128
Ending balance 53,177 239 633 54,049
Korean won) Buildings Vehicles Others Total
Beginning balance(*) 56,837 306 241 57,384
Acquisitions 5,102 26 1,037 6,165
Disposal (1,302) (13) - (1,315)
Amortization (15,129) (104) (299) (15,532)
Other 266 - - 266
Ending balance 45,774 215 979 46,968
(*) Restated in accordance with K-IFRS 1116.
The analysis of maturity of lease liabilities before discount recognized in the consolidated
interim statements of financial position as of September 30, 2020, and December 31, 2019,
is as follows:
(In millions of
Korean won)
Less than one year 15,934 12,744
Between one year and five years 25,914 20,006
More than five years 13,061 13,426
Lease liabilities before discount 54,909 46,176
24

The consolidated interim statements of comprehensive income for the nine-month period
ended September 30, 2020 and 2019, show the following amounts relating to leases:
(In millions of Korean won) 2020 2019
Interest expense relating to lease liabilities 732 894
Expense relating to short-term leases - -
Expense relating to leases of low-value assets 55 50
Variable lease payments not included in the
measurement of the lease liability
- -
The total cash outflow for leases for the nine-month period ended September 30, 2020 and
2019, was as follows:
Total cash outflow for leases 15,036 13,080
Operating lease – the Group as a lessor
The Group provides some of the properties it owns as operating leases, and the expected
maximum lease period is 2028. The Busan office building operating lease includes the option
of the lessee to extend the lease period by five years, and the market review clause is included
when the lease renewal option is exercised. The lessee does not have a purchase option to
purchase the leased asset at the expiration of the lease term.
The analysis of maturity of operating lease recognized in the consolidated interim statements
of financial position as of September 30, 2020, and December 31, 2019, is as follows:
(In millions of Korean won) September 30, 2020 December 31, 2019
Within one year 1,305 834
One year to five years 1,368 2,673
More than five years 1,292 1,560
3,965 5,067
The amount recognized as profit for the nine-month period ended September 30, 2020, and
2019, was as follows:
The amount recognized as profit 1,576 1,418
25

12. BORROWINGS:
Details of borrowings as of September 30, 2020, and December 31, 2019, are as follows:
(In millions of Korean won) Annual interest
rate (%)1
September
30, 2020
December
31, 2019
Short-term borrowings
Commercial paper BNK Securities and 8 others 1.31–2.10 725,000 495,000
Borrowings
Korea Development Bank
and 4 others
1.74–2.28
200,000 190,000
925,000 685,000
Current portion of long-term borrowings
Commercial paper BNK Securities and 6 others 1.70–2.55 490,000 1,480,000
Borrowings NH Bank and 5 others 2.36–3.31 245,000 50,000
735,000 1,530,000
Long-term borrowings
Commercial paper - - - 190,000
Borrowings Shinhan Bank and 4 others 2.17–3.15 268,583 334,000
268,583 524,000
1,928,583 2,739,000
1
Interest rate after considering swaps.
Details of debentures as of September 30, 2020, and December 31, 2019, are as follows:
(In millions of Korean won) Annual interest
rate (%)1
Maturity
September 30,
2020
December 31,
2019
Short-term debentures 1.47–1.91
2020.10.23–
2021.05.14 290,000 280,000
Current portion of debentures 1.39–3.73
2020.10.13–
2021.09.28 2,576,719 1,922,340
Long-term debentures 1.02–3.04
2021.10.01–
2030.9.10 8,311,796 6,913,882
11,178,515 9,116,222
Less: Discounts on debentures (9,755) (7,408)
11,168,760 9,108,814
1
Interest rate after considering swaps.
The outstanding debentures are non-guaranteed corporate bonds, with their principals to be
redeemed either by installment or at maturity. Bond issuance costs are recorded as discounts
on debentures and amortized using the effective interest rate method.
26

13. POSTEMPLOYMENT BENEFITS:
13.1 Defined Contribution Plan
The expense recognized in the consolidated interim statements of comprehensive income
related to postemployment benefit under the defined contribution plan for the nine-month
period ended September 30, 2020 and 2019, is as follows:
Defined contribution plan 795 770
13.2 Net Employee Benefit Liabilities
Details of net employee benefit liabilities as of September 30, 2020, and December 31, 2019,
are as follows:
Net defined benefit liabilities (assets) (1,986) (7,435)
Long-term employee benefit liabilities 5,248 4,601
3,262 (2,834)
13.3 Defined Benefit Plan
General
The Group operates a defined benefit plan for qualified employees by applying average salary
over the past three months and length of service. Plan assets mainly consist of deposits and
are exposed to risk of lower interest rate.
27

Net defined benefit liabilities (assets)
Changes in present value of net defined benefit liabilities (assets) for the nine-month period
ended September 30, 2020 and 2019, are as follows:
Present value
of the defined
benefit
obligation Plan assets
National
Pension Fund
Net defined
benefit
liabilities
(assets)
Beginning balance 73,542 (80,964) (13) (7,435)
Contribution - (6,700) - (6,700)
Current service cost 7,776 - - 7,776
Interest expense (income) 1,228 (1,326) - (98)
Return on plan assets
(excluding amounts
included in interest income) - 356 - 356
Actuarial loss from change
in financial assumptions 4,122 - - 4,122
Transfer of employees
between the Company and
its related companies 117 (122) 1 (4)
Benefits paid (4,884) 4,881 - (3)
Ending balance 81,901 (83,875) (12) (1,986)
Present value
of the defined
benefit
obligation Plan assets
National
Pension Fund
Net defined
benefit
liabilities
(assets)
Beginning balance 75,934 (78,685) (14) (2,765)
Contribution - (10,880) (10,880)
Current service cost 8,574 - - 8,574
Interest expense (income) 1,408 (1,410) - (2)
Return on plan assets
(excluding amounts
included in interest income) - 560 - 560
Actuarial loss from change
in financial assumptions 3,822 - - 3,822
Transfer of employees
between the Company and
its related companies (128) 152 - 24
Benefits paid (9,237) 9,184 1 (52)
Ending balance 80,373 (81,079) (13) (719)
28

13.4 Long-Term Employee Benefits
Changes in present value of long-term employee benefit liabilities for the nine-month period
Beginning balance 4,601 4,214
Current service cost 333 335
Interest expense 74 75
Actuarial loss 439 255
Benefits paid (199) (189)
14. PROVISIONS:
Changes in provisions for the nine-month period ended September 30, 2020 and 2019, are as
follows:
(In millions of
Korean won) 2020
Unused
commitment Point
Provision for
restoration Others1
Total
Beginning balance 85,165 17,992 4,475 2,603 110,235
Additional (reversal
of) provisions 4,307 (2,340) (3,656) - (1,689)
Others - - 3,392 - 3,392
Ending balance 89,472 15,652 4,210 2,603 111,937
1
Other provisions include provision for deposits in escrow account (see Note 26).
(In millions of
Korean won) 2019
Unused
commitment Point
Provision for
restoration Others Total
Beginning balance 74,619 27,668 6,038 3,374 111,699
Additional (reversal
of) provisions 5,111 (7,818) (4,329) (255) (7,291)
Others - - 3,610 (417) 3,193
Ending balance 79,730 19,850 5,319 2,702 107,601
29

Changes in provision for unused commitment for the nine-month period ended September 30,
Lifetime expected credit losses
12-month
expected credit
losses
Not
Beginning balance 48,059 37,106 - 85,165
Transfer to assets measured
at 12-month expected credit
losses 19,931 (19,931) - -
at lifetime expected credit
losses (2,803) 2,803 - -
Impairment (4) (8) 12 -
provisions (12,823) 17,142 (12) 4,307
Ending balance 52,360 37,112 - 89,472
Lifetime expected credit losses
12-month
expected credit
losses
Not
Beginning balance 44,249 30,370 - 74,619
at 12-month expected credit
losses 15,647 (15,647) - -
at lifetime expected credit
losses (2,810) 2,810 - -
Impairment (3) (10) 13 -
provisions (10,295) 15,419 (13) 5,111
Ending balance 46,788 32,942 - 79,730
30

15. DERIVATIVES AND HEDGE ACCOUNTING:
There are no derivative instruments held for trading as of September 30, 2020, and December
31, 2019.
Cash flow hedge
Cash flow hedge is a hedge for the exposure to variability in cash flows that is attributable to
a particular risk associated with a recognized asset or liability (such as all or some future
interest payments on variable-rate debt) or a highly probable forecast transaction and could
affect profit or loss. When applying cash flow hedge, the portion of the gain or loss on the
hedging instrument that is determined to be an effective hedge shall be recognized in other
comprehensive income and the ineffective portion of the gain or loss on the hedging instrument
shall be recognized in profit or loss. If a hedge of a forecast transaction subsequently results
in the recognition of a financial asset or a financial liability, the associated gains or losses that
were recognized in other comprehensive income shall be reclassified from equity to profit or
loss as a reclassification adjustment in the same period or periods during which the hedged
forecasted cash flows affect profit or loss.
The Group shall discontinue prospectively if a hedging instrument expires or is sold,
terminated or exercised; the hedge no longer meets the criteria for hedge accounting; the
Group revokes the designation; or a forecast transaction is no longer expected to occur, in
which case any related cumulative gain or loss on the hedging instrument that has been
recognized in other comprehensive income from the period when the hedge was effective shall
be reclassified from equity to profit or loss as a reclassification adjustment.
The Group removes the volatility risk of future cash flows of a hedged item, such as borrowings,
caused by changes in market interest rates or in foreign currency rates, using derivative
instruments, such as an interest rate swap or currency swap.
Details of derivative assets and liabilities as of September 30, 2020, and December 31, 2019,
are as follows:
Korean won)
Unsettled
contract
amount Assets Liabilities
Accumulated
other
comprehensive
loss1
Interest rate swap 1,975,000 - 28,269 (19,449)
Currency swap 1,748,515 18,674 33,587 (20,389)
3,723,515 18,674 61,856 (39,838)
31

Korean won)
Unsettled
contract
amount Assets Liabilities
Accumulated
other
comprehensive
loss1
Interest rate swap 2,205,000 3,201 21,024 (13,542)
Currency swap 1,146,222 18,810 - (10,434)
3,351,222 22,011 21,024 (23,976)
1
Amount reflects tax effect.
For transactions between local and foreign currencies, the unsettled contract amount of
transaction is translated by applying the basic foreign exchange rate at the end of the reporting
period to the contract amount in foreign currencies. For transactions between foreign
currencies and other foreign currencies, the unsettled contract amount is the amount
translated by applying the basic foreign exchange rate at the end of the reporting period to the
contract amount in foreign currencies purchased.
The maximum period for the Group exposed to the variability in future cash flows arising from
derivatives designated as cash flow hedges is expected to be until June 21, 2027. Meanwhile,
the loss recognized as ineffective portion related to cash flow hedge for the nine-month period
ended September 30, 2020, is 7,258 million.
The average hedge ratio of derivative assets and liabilities as of September 30, 2020, is as
follows:
(In millions of
Korean won) Less than
1 year
Between
1 year and
2 years
Between
2 and 3
years
Between
3 and 4 years
Between
4 and 5
years
More than
5 years Total
Nominal amount of the
hedged item
861,719 939,116 1,053,280 489,400 160,000 220,000 3,723,515
Nominal amount of the
hedging instrument
861,719 939,116 1,053,280 489,400 160,000 220,000 3,723,515
Average hedge ratio 100% 100% 100% 100% 100% 100% 100%
32

16. SHARE CAPITAL AND HYBRID SECURITIES:
Details of capital stock as of September 30, 2020, and December 31, 2019, are as follows:
Description
Authorized
shares
Par value
Outstanding
shares
Capital stock amount
Common
stock
600,000,000
shares
￦ 5,000
160,465,286
shares
￦ 802,326 million
Details of hybrid securities classified as equity as of September 30, 2020, are as follows:
(In millions of Korean won) Issue date Maturity date Interest rate Amount
731st
Bond-type hybrid securities1
2018.07.05 2048.07.05 4.70% 300,000
Issuance costs (760)
299,240
1
Terms of issuance for bond-type hybrid securities are as follows:
Bond-type hybrid securities
Maturity 30 years (extendable at the discretion of the Company at
original maturity)
Interest rate From maturity to July 5, 2023: A fixed rate of 4.7% p.a.
with a one-off incremental of 2% per the step-up clause
five years after issuance
Interest payment condition Three months in arrears with selective deferment
Others Early redemption by issuer allowed five years after
issuance
33

17. RETAINED EARNINGS:
Retained earnings as of September 30, 2020, and December 31, 2019, consist of the following:
Legal reserves1
63,950 53,889
Reserves for electronic financial transaction
(Note 26) 1,000 1,000
Regulatory reserve for credit losses (Note 19) 693,111 668,644
Unappropriated retained earnings 1,541,126 1,454,470
2,299,187 2,178,003
1
The Commercial Code of the Republic of Korea requires the Company to appropriate for
each financial period, as a legal reserve, an amount equal to a minimum of 10% of cash
dividends paid until such reserve equals 50% of its issued share capital. The reserve is not
available for cash dividend payment, but may be transferred to share capital or used to reduce
accumulated deficit.
Changes in retained earnings for the nine-month period ended September 30, 2020 and 2019,
are as follows:
Beginning balance 2,178,003 2,055,292
Profit for the period 232,371 151,818
Dividends paid (100,612) (30,809)
Distribution from hybrid securities (10,575) (10,575)
Ending balance 2,299,187 2,165,726
Dividends paid for the nine-month period ended September 30, 2020, are as follows:
Total number
of ordinary
shares issued
Total number
of shares for
dividends
Dividend
per share
(in Korean won)
Total dividends
(in millions of Korean won)
Ordinary shares 160,465,286 160,465,286 627 100,612
34

18. ACCUMULATED OTHER COMPREHENSIVE INCOME:
Changes in accumulated other comprehensive income for the nine-month period ended
September 30, 2020 and 2019, are as follows:
(In millions of Korean
won) 2020
Changes
Beginning
balance
Reclassification
of profit or loss Other Tax effects
Ending
balance
Gain (loss) on valuation of
derivatives
(23,976) (8,458) (13,096) 5,692 (39,838)
Remeasurements of net
defined benefit liabilities
(6,671) - (4,478) 1,204 (9,945)
(30,647) (8,458) (17,574) 6,896 (49,783)
won) 2019
Changes
Beginning
balance
Reclassification
of profit or loss Other Tax effects
Ending
balance
derivatives
(12,929) (1,529) (29,483) 7,510 (36,431)
Remeasurements of net
defined benefit liabilities
(10,526) - (4,382) 1,099 (13,809)
(23,455) (1,529) (33,865) 8,609 (50,240)
35

19. REGULATORY RESERVES FOR CREDIT LOSSES:
Details of regulatory reserves for credit losses as of September 30, 2020, and December 31,
Amount estimated to be appropriated 123,827 24,467
Estimated ending balance 816,938 693,111
Estimated provision of reserves for credit losses and adjusted profit after provision of reserves
for credit losses for the nine-month period ended September 30, 2020 and 2019, are as follows:
Provision of regulatory reserves for credit
losses 123,827 57,245
Adjusted profit after provision of regulatory
reserves for credit losses 108,544 94,574
Earnings per share after provision of reserves
for credit losses (in Korean won) 676 589
36

20. CARD INCOME AND EXPENSE:
Details of card income and expense for the three-month and nine-month period ended
(in millions of 2020 2019
Korean won) Three Months Nine Months Three Months Nine Months
Card income
Agent commission1
353,752 1,029,407 302,494 990,107
Commission income from life
service 8,711 26,154 8,562 25,505
Overseas commission income 2,284 20,667 11,812 28,242
Income from annual subscription 50,190 148,214 47,810 140,706
Others 25,544 80,848 30,584 92,782
Deduction from revenue2
(156,595) (440,380) (148,257) (390,251)
283,886 864,910 253,005 887,091
Card expense
Acquisition fee 12,381 33,227 16,896 71,276
Promotion 83,913 223,547 65,874 145,064
Service fee1 167,586 499,627 154,739 537,920
Financial service fee 986 3,209 1,343 4,077
A new credit sale handling fee 37,540 110,002 41,018 119,305
Overseas payment fee 10,655 37,654 18,461 55,201
Card issuance expenses 6,761 20,922 6,496 20,509
Others 11,165 34,116 9,120 26,039
Deduction from expense2 (156,595) (440,380) (148,257) (390,251)
174,392 521,924 165,690 589,140
1
The point-giving transaction with card members is that the Group provided the card member
with the customer option, and the Group determines that it controls the transaction as principal.
If the Group determines that it arranges for the provision of the good or service to customers
by credit card merchant, the effect on card income and card expense by net accounting is as
follows:
(in millions of Korean won) 2020
Three Months Nine Months
Decrease in card income 94,904 282,784
Decrease in card expense 94,904 282,784
2
Deductible items in accordance with application of K-IFRS 1115.
37

21. INTEREST INCOME AND EXPENSE:
Interest income and expense for the three-month and nine-month period ended September 30,
Interest income
Income from installment service 55,430 169,567 54,976 171,561
Income from short-term card loan 24,062 75,567 25,314 74,413
Income from long-term card loan
(general card loan) 132,886 399,663 121,347 352,244
Income from long-term card loan
(refinancing loan) 2,164 6,534 2,322 7,076
Revolving interest income 46,003 142,569 46,785 136,337
Loans receivable income 132 380 322 1,380
Others 3,917 14,401 5,824 19,645
264,594 808,681 256,890 762,656
Interest expense
Borrowings 12,847 42,324 16,472 50,222
Debentures 52,539 153,266 48,588 140,952
Others 283 859 307 1,004
65,669 196,449 65,367 192,178
38

22. OTHER OPERATING INCOME AND EXPENSES:
Other operating income and expenses for the three-month and nine-month period ended
Other operating income
Gain on foreign currency
transactions 2,662 10,886 5,689 15,991
Gain on foreign currency
translation 17,724 20,415 - -
Gain on derivatives transactions 1,940 18,025 27,045 28,905
derivatives
(23,993) 10,833 36,895 83,928
Other income 23,977 77,799 18,137 53,309
22,310 137,958 87,766 182,133
Other operating expenses
Loss on foreign currency
transactions 2,440 21,397 28,888 33,742
Loss (gain) on foreign currency
translation (24,387) 10,924 37,347 84,380
Loss on valuation of derivatives 18,049 27,658 - -
Other expense 14,845 46,476 8,559 25,944
10,947 106,455 74,794 144,066
39

23. SELLING AND ADMINISTRATIVE EXPENSES:
Details of selling and administrative expenses for the three-month and nine-month period
Salaries 38,704 109,201 36,096 111,038
Postemployment benefits 2,878 9,339 4,654 11,277
Employee benefits 7,525 20,925 5,306 18,088
Travel expenses 145 481 334 1,010
Communication expenses 7,767 23,085 8,666 24,992
Postal expenses 2,931 8,993 3,273 9,032
Rental expenses 3,716 10,843 6,605 14,654
Taxes and dues 5,530 15,589 5,163 16,175
Repair and maintenance expenses 327 1,021 328 1,030
Insurance premiums 72 203 70 209
Entertainment expenses 125 329 152 370
Advertising expenses 20,104 57,330 11,094 22,061
Supply expenses 905 2,733 790 2,494
Vehicle maintenance expenses 4 10 3 9
Periodicals expenses 33 109 44 149
Publication expenses 1,196 2,565 1,037 3,468
Training expenses 148 1,325 416 932
IT expenses 12,290 35,399 11,542 34,245
Expense for temporary staff 1,740 3,616 1,242 3,801
Professional service expenses 33,211 99,372 38,242 110,948
Delivery commission 637 1,877 604 1,162
Commission expenses 9,430 29,123 8,624 26,232
Business activity expenses 147 488 297 853
Construction expenses 828 2,543 254 1,899
Depreciation 7,184 21,571 8,845 27,649
Amortization 6,736 19,994 7,837 28,776
Depreciation of right-of-use assets 5,410 16,100 4,587 15,531
Event expenses 29 562 296 801
Conference expenses 36 110 65 183
Building administrative expenses 2,710 8,149 2,703 8,206
172,498 502,985 169,169 497,274
40

24. TAX EXPENSE:
Income tax expense for the nine-month period ended September 30, 2020 and 2019, consists
of the following:
Current tax on profits for the period (including
additional payment of tax and income tax
refund) 56,074 58,198
Changes in deferred tax assets and liabilities 6,888 (14,981)
Income tax expense reflected directly to equity 6,897 8,609
Income tax expense 69,859 51,826
Income tax expenses reflected directly to equity for the nine-month period ended September
30, 2020 and 2019, are as follows:
Beginning
balance Increase
Ending
balance
Tax effect related to cash flow
hedges 7,579 5,693 13,272
Tax effect related to
remeasurements of net
defined benefit liabilities 2,109 1,204 3,313
9,688 6,897 16,585
Beginning
balance Increase
Ending
balance
Tax effect related to cash flow
hedges 4,017 7,510 11,527
Tax effect related to
remeasurements of net
defined benefit liabilities 3,270 1,099 4,369
7,287 8,609 15,896
41

A reconciliation between income before income tax and income tax expense for the nine-
month period ended September 30, 2020 and 2019, is as follows:
(in millions of Korean won) 2020 2019
Profit before income tax 302,230 203,645
Income tax based on statutory tax rate 75,342 48,820
Add (deduct):
Others (5,483) 3,006
Income tax expense for continuing operations 69,859 51,826
Effective tax rate 23.11% 25.45%
25. CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS:
Details of cash and cash equivalents as of September 30, 2020, and December 31, 2019,
are as follows:
Current deposit 265 241
Ordinary deposit 314,148 133,251
Short-term financial instruments 10,000 82,828
Other cash and cash equivalents 783,138 513,765
1,107,551 730,085
Cash used in operations for the nine-month period ended September 30, 2020 and 2019, is
as follows:
Adjustments:
Income tax expense 69,859 51,826
Interest expense 196,449 192,178
Impairment loss 128,910 104,727
Loss on disposal of loan receivables 52,430 102,161
Postemployment benefits 7,471 8,838
Other long-term benefits 846 666
Depreciation 21,571 27,649
Amortization 19,994 28,776
42

Depreciation of right-of-use assets 16,100 15,531
Loss on foreign currency translations 10,924 84,380
Loss on valuation of derivatives 27,658 -
Loss on disposal of property and equipment
and intangible assets
1,285 43
Non-interest-bearing installment 55,860 45,496
Other operating expenses 1,754 1,019
Reversal of provision (1,690) (7,291)
Interest income (778,686) (737,870)
Dividend income (83) (30)
Gain on valuation of financial assets at fair
value through profit or loss
(2,047) (1,262)
Gain on disposal of financial assets at fair
(680) -
Gain on foreign currency translations (20,415) -
Gain on valuation of derivatives (10,833) (83,928)
Amortization of present value of discounts of
card assets
(54,668) (40,603)
Amortization of deferred origination cost and
fee of card assets
(29,995) (24,785)
Gains on disposal of property and equipment
and intangible assets
(165) (19)
Gain on disposal of assets held for sale - (697)
Other operating income (19) (28)
(288,170) (233,223)
Changes in operating assets and liabilities:
Decrease (increase) in financial assets at fair
(649,097) 191,934
Increase in card assets (749,488) (1,017,955)
Decrease (increase) in loan receivables (590) 12,952
Increase in other receivables (24,029) (18,141)
Increase in other assets (15,509) (54,360)
Increase in other payables 395,731 207,055
Decrease in withholdings (123,126) (86,575)
Decrease in accrued expenses (39,192) (24,500)
Increase in other liabilities 3,477 4,123
(1,201,823) (785,466)
Cash used in operations (1,257,622) (866,870)
43

26. CONTINGENCIES AND COMMITMENTS:
(a) Significant commitments
The Group made an intraday bank overdraft agreement of 150 billion with Kookmin Bank
and four other institutions, and the Group made an agreement of 1,507.3 billion with
Kookmin Bank and 16 other institutions for general loans and credit line as of September 30,
2020.
(b) In relation to the leased office building, the Group can exercise pre-emptive rights if the
lessor plans to sell the real estate after four years and five months from the lease
commencement date on the lease agreement.
(c) Pending litigations
As of September 30, 2020, the Group is involved in 14 cases (12,155 million) as a defendant
and seven cases (20,324 million) as a plaintiff for debt collection against multiple debtors in
the important pending litigations. The Group does not anticipate that these pending litigations
referred above will have a significant effect on its consolidated interim financial statements.
(d) Deposit for loss reimbursement
As of September 30, 2020, the Group has deposits of the proceeds and interests from the sale
of shares of Daewoo Engineering & Construction Co., Ltd. in an escrow account amounting to
2,603 million and 5,164 million, respectively. The Group recognized 2,603 million of the
provision on deposits in escrow account (see Note 14).
(e) Contract of sale of receivables
The Group entered into a contract with Hyundai Capital Services, Inc. relating to its sale of
receivables on January 24, 2006. In accordance with the contract, the Group sells the
receivables that are 60 days or more past due or written off (partially including receivables that
are before 60 days) to Hyundai Capital Services, Inc. Such sale occurs five times a month on
designated cutoff dates at the amount calculated using a predetermined price pursuant to the
contract. As a result, losses on disposal of loans receivable amounting to 52,430 million and
102,161 million for the nine-month period ended September 30, 2020 and 2019, respectively,
were recognized.
(f) Reserve for loss reimbursement
The Group has reserves of 1 billion for electronic financial transactions in case fraudulent
credit card activities or accidents occurred in accordance with the Electronic Financial
Transactions Act.
44

(g) Insurance for the implementation of the liability for damages
The Group has insured with a limit of 10 billion for the implementation of the liability for
damages in accordance with the Article 43 of the Credit Information Act.
(h) Commitment associated with asset-backed securitization
The Group continuously transfers receivables to maintain that the balance of the asset-backed
securitization is above a certain level of trust beneficiary certificates relating to the
asset-backed securitization. According to the agreement on the Group’s asset-backed
securitization, in order to enhance the credit level of the asset-backed securities, several
provisions are in place as trigger clauses to be used for early redemption calls, thereby limiting
the risk that the investors are exposed to, resulting from a change in quality of the assets in
the future. In the event that the asset-backed securitization of the Group is in violation of the
applicable trigger clause, the Group is obliged to make early redemption for the asset-backed
securities. Meanwhile, when an event of default occurs from derivative contracts regarding
asset-backed securities issued by Super Series 5th SPC, Super Series 6th SPC, Super Series
8th SPC, and Super Series 9th SPC, the Company may be liable for reimbursement of losses
incurred on counterparties.
(i) Agreement relating to borrowing liability
As of September 30, 2020, the Group has entered into agreements, including trigger clause
with its creditors for the purpose of credit enhancement of certain borrowing liabilities. If the
Group breaches its trigger clause, the Group may be subject to early repayment or
suspension/termination of contracts with the creditors.
27. RELATED-PARTY TRANSACTIONS:
As of September 30, 2020, details of the related parties are as follows:
Companies
Parent company Hyundai Motor Company
Other related parties Green Air; Kia Motors; Kia Tigers; Maintrans Co., Ltd.; Busan Finance Center
AMC; Seoul PMC; HL Green Power; WIA-MAGNA Powertrain; Eukor Car
Carriers; Innocean Worldwide; Iljin Bearing; Chunbuk Hyundai Motors FC; G-
Marine Service Co., Ltd.; GIT; Korea Credit Bureau; Hankook Economy Daily;
Haevichi Hotels & Resorts; Haevichi Country Club; Hyundai Construction;
Hyundai Glovis; Hyundai Transys; Hyundai City Corporation; Hyundai Rotem;
Hyundai Materials; Hyundai Mobis; Hyundai BNG Steel; Hyundai Farm Land &
Development; Hyundai Engineering & Steel Industries; Hyundai IHL; Hyundai
Engineering; Hyundai NGV; Hyundai MSEAT; Hyundai MNSOFT; Hyundai Auto
Ever Systems; Hyundai-autron; Hyundai WIA; Hyundai WIA IHI Turbo; Hyundai
Steel Company; HYUNDAI Architects & Engineers Assoc.; Hyundai Special
Steel Company; HMC Investment Securities Co., Ltd.; Hyundai Capital; Hyundai
Commercial; Hyundai KEFICO; Hyundai Partecs; MOCEAN Co., Ltd.; Hyundai
IFC Co., Ltd.; Hyundai Capital America; Consumer Preferred Choice Limited;
Complete Logistic Solutions Limited; Alplnvest Partners Co-Investments 2015 I
SPV B.V.; AlpInvest Partners Co-Investments 2015 II SPV B.V.; AlpInvest Mich
SPV B.V.; and others
45

Sales and purchases with related parties for the nine-month period ended September 30, 2020
and 2019, are as follows:
Korean won) Income Expenses Others
Card
income
Rental
income Others
Card
expense
Selling and
administrative
expenses Others1
Purchase of
property and
equipment
and intangible
assets
Disposal of
assets2
Parent company
Hyundai Motor
Company 133,826 - 287 - 1 443 - -
Other related
parties
Hyundai Capital - 672 20,712 39,626 1,992 16,016 - 54,270
Kia Motor Company 44,091 - 182 - 334 98 - -
Hyundai Auto Ever
Systems 2,623 - 48 - 34,352 380 12,672 -
Hyundai Engineering 2 - - - 7,531 1 - -
Hyundai Steel
Company 1 - - - - 14 - -
Others3
1,425 1,301 1,238 40 8,502 762 - -
181,968 1,973 22,467 39,666 52,712 17,714 12,672 54,270
1
Reversal of provision for impairment on card assets due from related party amounting to ₩247
million is included.
2
The book value before disposal (before deducting provision for impairment) is ₩162,026 million.
3
For the nine-month periodperiod ended September 30, 2020, Hyundai IFC Co., Ltd. was
incorporated into an affiliated company of Hyundai Motor Company, and Hyundai Energy was
excluded.
Korean won) Income Expenses Others
Card
income
Rental
income Others
Card
expense
Selling and
administrative
expenses Others1
Purchase of
property and
equipment
and intangible
assets
Disposal of
assets2
Parent company
Hyundai Motor
Company 103,241 - - - 69 335 - -
Other related
parties
Hyundai Capital 1 739 19,123 31,559 1,740 16,182 380 91,505
Kia Motor Company 42,579 - 100 - - 81 - -
Hyundai Auto Ever
Systems 2,936 - 521 - 48,980 (4) 13,806 -
Hyundai Engineering 12 - - - 8,594 - - -
Hyundai Steel
Company 3 - - - - (2) - -
Others 1,551 1,132 964 30 3,313 1,200 - -
150,323 1,871 20,708 31,589 62,696 17,792 14,186 91,505
1
Impairment loss on card assets due from related party amounting to ₩31 million is included.
2
The book value before disposal (before deducting provision for impairment) is ₩266,025 million.
46

Outstanding balances arising from sales/purchases of goods and services as of September
30, 2020, and December 31, 2019, are as follows:
(In millions of
Korean won)
September 30, 2020
Receivables Payables
Unused
credit limit2
Card
assets1
Provision
for
impairment Others
Other
payables Others3
Parent company
Hyundai Motor
Company 75,507 (240) - 32,393 - 134,493
Other related parties
Hyundai Capital 23,625 (148) - 3,299 715 194,070
Kia Motor Company 41,659 (72) - 13,311 - 28,341
Hyundai Auto Ever
Systems 5,340 (17) - 11,765 2,474 40,660
Hyundai Engineering 2,689 (5) - - - 3,027
Hyundai Steel
Company 12,025 (21) - 4,675 - 17,975
Others 53,737 (154) - 1,448 950 159,575
214,582 (657) - 66,891 4,139 578,141
1
Unsettled amount of the corporate purchasing card amounting to 35,238 million is included
and the amounts used and redeemed for the nine-month periodperiod ended September 30,
2020, are 398,303 million and 411,798 million, respectively.
2
Unused credit limit of the corporate purchasing card is included.
3
As of September 30, 2020, the repayment amount of lease liabilities under lease contract
with related parties is 2,910 million.
47

Korean won) Receivables Payables
Unused
credit limit2
Card
assets1
Provision
for
impairment Others
Other
payables Others3
Parent company
Hyundai Motor
Company 60,519 (76) - 27,803 - 149,481
Hyundai Capital 62,156 (89) 164 2,976 807 208,651
Kia Motor Company 29,173 (37) - 17,080 - 40,827
Hyundai Auto Ever
Systems 5,077 (11) - 11,698 1,630 40,923
Hyundai Engineering 3,287 (4) - 3 - 2,713
Hyundai Steel
Company 5,088 (6) - 3,406 - 24,912
Others 36,911 (191) 1 4,481 896 175,757
202,211 (414) 165 67,447 3,333 643,264
1
Unsettled amount of the corporate purchasing card amounting to 48,733 million is included
and the amounts used and redeemed for the year ended December 31, 2019, are 670,569
million and 668,015 million, respectively.
2
Unused credit limit of the corporate purchasing card is included.
3
As of December 31, 2019, the repayment amount of lease liabilities under lease contract
with related parties is 692 million.
Compensation for key management for the nine-month period ended September 30, 2020
and 2019, is as follows:
Short-term employee benefits 10,355 8,581
Postemployment benefits, etc. 1,563 1,486
Other long-term benefits 11 10
11,929 10,077
48

The fund transactions with related parties for the nine-month period ended September 30,
Outstanding fund transactions included in card assets are as flows:
(In millions of
Korean won) Beginning of 2020 Net change1
September 30, 2020
Parent company
Hyundai Motor
Company 60,519 14,988 75,507
Hyundai Capital 62,156 (38,531) 23,625
Kia Motor Company 29,173 12,486 41,659
Hyundai Auto Ever
Systems 5,077
263 5,340
Hyundai Engineering 3,287 (598) 2,689
Others 41,999 23,763 65,762
202,211 12,371 214,582
1
The card asset-related fund transaction is stated as net change in consideration of the
business activities with high turnover, large amounts and short maturity.
(In millions of
Korean won) Beginning of 2019 Net change1 September 30, 2019
Parent company
Hyundai Motor
Company 44,908 86 44,994
Hyundai Capital 53,076 (606) 52,470
Kia Motor Company 16,223 1,046 17,269
Hyundai Auto Ever
Systems 8,415
(1,769) 6,646
Hyundai Engineering 3,533 105 3,638
Others 35,845 4,761 40,606
162,000 3,623 165,623
1
The card asset-related fund transaction is stated as net change in consideration of the
business activities with high turnover, large amounts and short maturity.
49

Dividends paid to the related parties for the nine-month period ended September 30, 2020 and
Parent company and others 97,570 29,878
There are no payment guarantees and collateral provided by the Group for the financial
supports to the related parties as of September 30, 2020, and no collateral and payment
guarantees are provided by the related parties.
28. TRANSFERS OF FINANCIAL ASSETS:
The Company had comprehensively entrusted receivables to a trust account of a trustee in
the form of a money bond trust, and the trust account issued beneficiary right certificate of
investor, beneficiary right certificate of transferor and subordinated beneficiary right certificate
with trust property entrusted by the Company as underlying asset, and as the Company is
providing credit reinforcement by acquiring beneficiary right certificate of transferor and
subordinated beneficiary right certificate, if any impairment loss incurred in receivables
belongs to the underlying asset, the risk preferentially belongs to the Company.
Asset-backed card assets
Book value of assets1
4,407,837 4,313,988
Book value of the associated liabilities 2,143,736 1,543,576
1
The amount is before provision for impairment.
As of September 30, 2020, the Group has issued its securitization liabilities with card assets
as an underlying asset, and the related securitization liabilities have the right of recourse about
the underlying assets. As of September 30, 2020, the fair value of financial assets transferred,
but not eliminated is ₩4,372,036 million, the fair value of related liabilities is ₩2,134,955
million and net position is ₩2,237,081 million.
50

29. OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES:
The Group has entered into derivative contracts that include International Swaps and
Derivatives Association (“ISDA”) master netting agreements.
Generally, in such arrangements, all contracts that exist in the same currency are consolidated
into one net amount and paid from one party to the other. Also, in the event of a credit event,
such as bankruptcy, all contracts existing under the agreement will be cleared, the liquidating
value will be assessed and all contracts will be settled on a net basis.
The ISDA arrangement does not meet the offset requirement in the consolidated interim
financial statements. Currently, the Group does not have a legally enforceable right of setoff
in recognized assets and liabilities because the right of setoff cannot be exercised before a
credit event, such as bankruptcy, occurs.
The effects of netting agreements as of September 30, 2020, and December 31, 2019, are as
follows:
Korean won) Amounts not offset
Recognized
financial
assets and
liabilities
Gross
financial
assets and
liabilities
set off
Net amounts
presented in
the
consolidated
interim
statement of
financial
position
Financial
instruments
Cash
collateral
received Net amount
Financial assets
Derivative assets 18,674 - 18,674 - - 18,674
Financial liabilities
Derivative liabilities 61,856 - 61,856 - - 61,856
Korean won) Amounts not offset
Recognized
financial
assets and
liabilities
Gross
financial
assets and
liabilities
set off
Net amounts
presented in
the
consolidated
statement of
financial
position
Financial
instruments
Cash
collateral
received Net amount
Financial assets
Derivative assets 22,011 - 22,011 419 - 21,592
Derivative liabilities 21,024 - 21,024 419 - 20,605
51

30. FINANCIAL INSTRUMENTS BY CATEGORY:
Carrying amounts of financial instruments by category as of September 30, 2020, and
won) September 30, 2020
Financial
assets at
amortized
cost
Financial assets
at fair value
through profit or
loss
Financial assets
at fair value
through other
comprehensive
income
Derivative
instruments
for hedging Total
Financial assets
Cash and deposits 1,149,769 - - - 1,149,769
Securities - 1,375,353 1,484 - 1,376,837
Card assets and loan
receivables
15,511,781 - - - 15,511,781
Other financial assets1 213,421 - - 18,674 232,095
16,874,971 1,375,353 1,484 18,674 18,270,482
at amortized cost
Derivative instruments
for hedging Total
Borrowings 13,097,343 - 13,097,343
Other financial liabilities2 1,955,816 61,856 2,017,672
15,053,159 61,856 15,115,015
1
Other financial assets consist of other receivables, accrued income, guarantee deposits and
derivative assets.
2
Other financial liabilities consist of other payables, withholdings, accrued expenses, lease
liabilities, derivative liabilities and guarantee deposits received.
won) December 31, 2019
Financial
assets at
amortized
cost
Financial assets
at fair value
through profit or
loss
Financial assets
at fair value
through other
comprehensive
income
Derivative
instruments
for hedging Total
Financial assets
Cash and deposits 836,904 - - - 836,904
Securities - 720,749 1,484 - 722,233
receivables 14,912,970 - - - 14,912,970
Other financial assets1
195,549 - - 22,011 217,560
15,945,423 720,749 1,484 22,011 16,689,667
52

at amortized cost
Derivative instruments
for hedging Total
Borrowings 11,847,814 - 11,847,814
Other financial liabilities2 1,713,520 21,024 1,734,544
13,561,334 21,024 13,582,358
1
Other financial assets consist of other receivables, accrued income, guarantee deposits and
derivative assets.
2
Other financial liabilities consist of other payables, withholdings, accrued expenses, lease
liabilities, derivative liabilities and guarantee deposits received.
Net gains or losses on each category of financial instruments for the nine-month period ended
Interest income
Interest
expenses Card income
Card
expenses Impairment loss
Financial assets
Financial assets at amortized cost 808,681 - 864,910 521,924 128,910
profit or loss - - - - -
other comprehensive income - - - - -
Derivative instruments for hedging - - - - -
Financial liabilities at amortized cost - 196,449 - - -
808,681 196,449 864,910 521,924 128,910
Gain on
valuation
Gain (loss) on
disposal
Dividend
income
Gain (loss) on
foreign
currency
translation
Gain (loss) on
foreign
currency
transactions
Financial assets
Financial assets at amortized cost - (52,430) - (77) 7,514
profit or loss 2,048 1,966 60 - -
other comprehensive income - - 23 - -
Derivative instruments for hedging 10,833 18,025 - - -
Financial liabilities at amortized cost - - - 9,567 (18,025)
Derivative instruments for hedging (27,658) - - - -
(14,777) (32,439) 83 9,490 (10,511)
53

Interest income
Interest
expenses Card income
Card
expenses Impairment loss
Financial assets
Financial assets at amortized cost 762,656 - 887,091 589,140 104,727
profit or loss - - - - -
other comprehensive income - - - - -
Financial liabilities at amortized cost - 192,178 - - -
762,656 192,178 887,091 589,140 104,727
Gain on
valuation
Gain (loss) on
disposal
Dividend
income
Gain (loss) on
foreign
currency
translation
Gain (loss) on
foreign
currency
transactions
Financial assets
Financial assets at amortized cost - (102,161) - (452) 11,154
profit or loss 1,262 1,956 - - -
other comprehensive income - - 30 - -
Derivative instruments for hedging 83,928 - - - -
Financial liabilities at amortized cost - - - (83,928) (28,905)
Derivative instruments for hedging - 28,905 - - -
85,190 (71,300) 30 (84,380) (17,751)
54

31. FAIR VALUE OF FINANCIAL INSTRUMENTS:
Fair value hierarchy classifications of the financial instruments that are subsequently
measured at fair value as of September 30, 2020, and December 31, 2019, are as follows:
Book value Fair value Level 1 Level 2 Level 3
Financial assets
Financial assets at fair value
Securities at fair value
through profit or loss1
1,375,353 1,375,353 - 1,360,130 15,223
through other
comprehensive income2
1,484 1,484 - - 1,484
Derivative assets 18,674 18,674 - 18,674 -
Financial liabilities at fair value
Derivative liabilities 61,856 61,856 - 61,856 -
1
As of September 30, 2020, among the securities at fair value through profit or loss in Level 3,
equity instruments amounting to 2,994 million are measured at cost since cost is deemed
as a reasonable approximation of fair value.
2
As of September 30, 2020, among the securities at fair value through other comprehensive
income in Level 3, equity instruments amounting to 1,484 million are measured at cost since
cost is deemed as a reasonable approximation of fair value.
Book value Fair value Level 1 Level 2 Level 3
Financial assets
through profit or loss1
720,749 720,749 - 709,006 11,743
through other
comprehensive income2
1,484 1,484 - - 1,484
Derivative assets 22,011 22,011 - 22,011 -
Derivative liabilities 21,024 21,024 - 21,024 -
1
As of December 31, 2019, among the securities at fair value through profit or loss in Level 3,
equity instruments amounting to 2,576 million are measured at cost since cost is deemed
as a reasonable approximation of fair value.
2
As of December 31, 2019, among the securities at fair value through other comprehensive
income in Level 3, equity instruments amounting to 1,484 million are measured at cost since
cost is deemed as a reasonable approximation of fair value.
55

To provide information about the reliability of the inputs used in determining fair value, the
Group classifies its financial instruments into three levels prescribed under the accounting
standards. Financial instruments that are measured at fair value are categorized by the fair
value hierarchy whereby the levels are defined as follows:
- Level 1: The fair value of financial instruments traded in active markets (such as publicly
traded derivatives and equity securities) is based on quoted market prices at the end of
the reporting period. The quoted marked price used for financial assets held by the Group
is the current bid price. These instruments are included in Level 1.
- Level 2: The fair value of financial instruments that are not traded in an active market (for
example, over-the-counter derivatives) is determined using valuation techniques that
maximize the use of observable market data and rely as little as possible on entity-specific
estimates. If all significant inputs required to measure an instrument at fair value are
observable, the instrument is included in Level 2.
- Level 3: If one or more of the significant inputs are not based on observable market data,
the instrument is included in Level 3. Examples include unlisted equity securities.
There are no changes in fair value hierarchy level for the nine-month periodperiod ended
September 30, 2020.
The following table presents the changes in Level 3 financial instruments for the nine-month
period ended September 30, 2020 and 2019:
Securities at fair
value through profit
or loss
Securities at fair
value through other
comprehensive
income
Acquisition 3,997 -
Disposition (538) -
Profit for the period 21 -
56

Securities at fair
value through profit
or loss
Securities at fair
value through other
comprehensive
income
Acquisition 5,030 -
Disposition - -
Profit for the period 86 -
The following table presents the valuation techniques and input variables used to measure
the fair value of Level 2 financial instruments as of September 30, 2020, and December 31,
2019.
Fair value Valuation
technique
Input variables
Securities at fair value through profit
or loss
1,360,130 709,006 Discounted
Cash Flow
(“DCF”)
Discount rate,
interest rate,
etc.
Derivative assets 18,674 22,011 DCF Discount rate,
interest rate,
exchange rate,
etc.
Derivative liabilities 61,856 21,024 DCF Discount rate,
interest rate,
exchange rate,
etc.
57

The following table presents the valuation techniques and significant unobservable input
variables used to measure the fair value of Level 3 financial instruments as of September 30,
2020, and December 31, 2019.
Fair value Valuation
technique
Input variables
Securities at fair value through profit
or loss
12,228 9,167
Net asset
value
N/A
Financial liabilities at fair value measured using net asset value method were excluded from
sensitivity analysis because it was impossible to calculate the sensitivity of changes in inputs.
The table below provides the fair value and carrying amount of financial instruments that are
not measured subsequently at fair value in the consolidated interim statements of financial
position as of September 30, 2020, and December 31, 2019:
Book value Fair value Book value Fair value
Assets
Financial assets
Cash and deposits 1,149,769 1,149,769 836,904 836,904
receivables 15,511,781 15,742,746 14,912,969 15,134,346
Other financial assets 213,421 213,421 195,549 195,549
16,874,971 17,105,936 15,945,422 16,166,799
Liabilities
Borrowings 13,097,343 13,198,088 11,847,814 11,930,061
Other financial liabilities 1,955,815 1,955,815 1,713,520 1,713,520
15,053,158 15,153,903 13,561,334 13,643,581
58

The fair valuation techniques of the financial instruments measured at amortized cost are as
follows:
Valuation techniques
Cash and deposits The carrying amounts of cash and demand due from financial institutions and
payment due from financial institutions are reasonable approximation of fair
values. These financial instruments do not have a fixed maturity and are
receivable on demand. Fair value of ordinary due from financial institutions is
measured using the DCF model. However, if the remaining maturity is short at
the reporting date, the carrying amount is regarded as fair value.
Card assets and
loan receivables
The DCF model is used to determine the fair value of card assets and loan
receivables. Fair value is determined by discounting the expected cash flows,
which are contractual cash flows adjusted by early redemption rate, at
appropriate discount rate. However, if the remaining maturity is short at the
reporting date, the carrying amount is regarded as fair value.
Other financial
assets
The DCF model is used to determine the fair value of other financial assets. Fair
value is determined by discounting the expected cash flows, which are
contractual cash flows, at appropriate discount rate. However, if the remaining
maturity is short at the reporting date, the carrying amount is regarded as fair
value.
Borrowings Fair value is calculated by the DCF model at an appropriate interest rate for
respective range of maturity.
Other financial
liabilities
The DCF model is used to determine the fair value of other financial liabilities.
Fair value is determined by discounting the expected cash flows, which are
contractual cash flows, at appropriate discount rate. However, if the remaining
maturity is short at the reporting date, the carrying amount is regarded as fair
value.
59

The table below provides the fair value hierarchy of financial instruments that are not
measured subsequently at fair value in the consolidated interim statements of financial position
as of September 30, 2020, and December 31, 2019:
(In millions of
Korean won) September 30, 2020
Level 1 Level 2 Level 3 Total
Financial assets
receivables
-
-
15,742,746 15,742,746
Borrowings - 13,198,088 - 13,198,088
(In millions of
Korean won) December 31, 2019
Level 1 Level 2 Level 3 Total
Financial assets
receivables
-
-
15,134,346 15,134,346
Borrowings - 11,930,061 - 11,930,061
The management of the Group anticipates that, except for the items described in the table
above, the book value of the financial assets and liabilities measured at amortized cost in the
consolidated interim financial statements is similar to the fair value.
There are no significant changes in business or economic environment for the nine-month
periodperiod ended September 30, 2020, which affect fair values of financial assets and
liabilities held by the Group as of September 30, 2020.
60

32. EARNINGS PER SHARE:
(a) Basic earnings per share for the three-month and nine-month period ended September 30,
(in Korean won) 2020 2019
Three months Nine months Three months Nine months
Profit for the period 66,220,015,862 232,371,226,693 29,997,292,690 151,818,937,326
(-) Distribution from hybrid
securities 3,527,105,232 10,575,000,000 3,527,105,232 10,575,000,000
Profit attributable to ordinary
shares (A) 62,692,910,630 221,796,226,693 26,470,187,458 141,243,937,326
Weighted-average number of
ordinary shares outstanding (B) 160,465,286 160,465,286 160,465,286 160,465,286
Basic earnings per share (A/B) 391 1,382 165 880
There are no discontinued operations for the nine-month period ended September 30, 2020
and 2019, and as such, earnings per share are the same as earnings per share from continuing
operations.
(b) Diluted earnings per share
The Group did not issue any potential ordinary shares; therefore, basic earnings per share are
identical to diluted earnings per share.
33. FINANCIAL RISK MANAGEMENT:
The Group is exposed to credit, liquidity and market risks. In order to manage these factors,
the Group operates risk management policies and programs that monitor closely and respond
to each of the risk factors. The Group uses derivatives to manage market risks.
There was no significant change in the Group’s risk management policies and procedures
after December 31, 2019.
61

34. CAPITAL MANAGEMENT:
The Company (specialized credit finance company) must maintain adjusted capital adequacy
ratio in accordance with the Specialized Credit Financial Business Law and subregulations,
and the ratio for the credit card company must be more than 8%. This ratio is calculated by
dividing adjusted capital with adjusted total assets and all factors are based on consolidated
interim financial statements. The Company maintains an adjusted capital adequacy ratio of
more than 8%.
Details of adjusted capital adequacy ratio as of September 30, 2020, and December 31, 2019,
are as follows:
September 30,
2020 December 31, 2019
Adjusted total assets (A) 17,336,734 16,199,035
Adjusted total capital (B) 3,122,996 3,040,326
Adjusted capital adequacy ratio (B/A) 18.01% 18.77%
62

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