Edgar Filing: WOORI FINANCE HOLDINGS CO LTD

Type of stock

Type of Stock

Initial

Balance

Ending

Balance

Employee Account

Employee Union Account

Common stock

Form 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2006

Woori Finance Holdings Co., Ltd.

(Translation of Registrant’s name into English)

203, Hoehyon-dong, 1-ga, Chung-gu, Seoul, Korea 100-792

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F X Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submission to furnish a report or other document that the registration foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes No X

Summary of 2006 3Q Business Report

Table of Contents


I. Company Overview		4

1.	Purpose of the Company	4
	a. Scope of Business	4
	b. Scope of Business of Subsidiaries	4
2.	History of the Company	9
	a. Company History	9
	b. Associated Business Group	11
3.	Capital Structure	15
	a. Change in Capital	15
	b. Anticipated Changes in Capital	15
	c. Convertible Bonds	15
4.	Total Number of Authorized Shares	16
	a. Total Number of Authorized Shares	16
	b. Capital and Price per Share	16
	c. Treasury Stock	16
	d. Status of Employee Stock Option Program	17
5.	Voting Rights	17
6.	Dividend Information	18
	a. Dividend Information for the Past Three Years	18

II. Description of Business		19

1.	Business Overview	19
	a. Organizational Chart	19
2.	Overview of Operations	20
	a. Performance of Operations	20
	b. Financing of Operations	20
	c. Transactions related to Commission Fees	21
3.	Other Details Relevant to Investment Decisions	22
	a. Won-denominated Current Ratio	22
	b. Foreign Currency-denominated Current Ratio	22
	c. Debt Ratio	22
	d. Credit Ratings for the Past Three Years	23
	e. Other Important Information	23

III. Financial Information		24

1.	Condensed Financial Statements (Non-consolidated)	24
2.	Condensed Financial Statements (Consolidated)	25
3.	Accounting Information	26
4.	Notes on Consolidated Financial Statements	27


IV. Independent Auditor’s Opinion		28

1.	Independent Auditor’s Opinion	28
	a. Independent Auditor	28
2.	Compensation to the Independent Auditor	28
	a. Auditing Service	28
	b. Compensation for Services Other than the Audit	28

V. Corporate Governance and Affiliated Companies		29

1.	Overview of Corporate Governance	29
	a. About the Board of Directors	29
2.	Related Companies	37
3.	Investments in Other Companies	38

VI. Stock Information		39

1.	Stock Distribution	39
	a. Stock Information of Major Shareholders and Related Parties	39
	b. Share Ownership of More than 5%	39
	c. Shareholder Distribution	39
2.	Stock Price and Stock Market Performance for the Past Six Months	40
	a. Domestic Stock Market	40
	b. Foreign Stock Market	40

VII. Directors and Employee Information		41

1.	Directors	41
2.	Employee Status	41
3.	Labor Union Membership	41
4.	Number of Professional Personnel	41

VIII. Related Party Transactions		42

1.	Transactions with Affiliated Parties	42
	a. Transactions of Provisional Payments and Loans (including secured loans)	42
	b. Payment Transactions	43
Exhibit A- Financial Statements		44

All financial information contained in this document (including the attached financial statements) have been prepared accordance with generally accepted accounting principles in Korea, which differ in certain important respects from generally accepted accounting principles in the United States.

I.	Company Overview

1.	Purpose of the Company

a.	Scope of Business

Acquisition/ownership of shares in companies that are engaged in financial services or are closely related to financial services, as well as the governance and/or management of such companies.

(1)

Corporate Management

Setting management targets for and approving business plans of the subsidiaries;

Evaluation of the subsidiaries’ business performance and establishment of compensation levels;

Formulation of corporate governance structures of the subsidiaries;

Inspection of operation and assets of the subsidiaries; and

Other activities complementary to the items mentioned in numbers 1 to 4.

(2)

Corporate Management Support Activities

Funding for the affiliate companies (including direct and indirect subsidiaries, the “Affiliates”);

Capital investment in subsidiaries or procurement of funds for the Affiliates;

Joint development, marketing and use of facilities and computer system with the Affiliates; and

Activities ancillary to the above items, for which authorization, permission or approval is not required under the relevant laws and regulations.

(3)

All activities directly or indirectly related to the items listed above.

b.	Scope of Business of Subsidiaries

(1)

Woori Bank

Primary Businesses

•

Banking business

•

Ancillary business

Supplementary Businesses

•

Trust business

•

Credit card business

•

Other authorized businesses

(2)

Kwangju Bank

Primary Businesses

•

Banking business

•

Ancillary business

Supplementary Businesses

•

Trust business

•

Credit card business

•

Other authorized businesses

(3)

Kyongnam Bank

Primary Businesses

•

Banking business

•

Ancillary business

Supplementary Businesses

•

Trust business

•

Credit card business

•

Other authorized businesses

(4)

Woori Investment & Securities

Securities dealing;

Consignment sales of securities;

Brokering and/or proxy transactions of securities;

Underwriting of securities;

Offering of securities;

Conscription for securities sales;

Brokering of securities in domestic and overseas securities markets;

Credit services related to securities trading;

Securities-backed loans;

10.

Lending of securities;

11.

Securities saving services;

12.

Rating of securities and equity stakes;

13.

Payment guarantees for principal and interests of corporate bonds;

14.

Trustee services for bond offerings;

15.

Trading and brokering of marketable certificates of deposits;

16.

Lottery sales;

17.

Real estate leasing;

18.

Lending of securities, and related brokerage, arrangement and agency services;

19.

Trading of leased securities and related brokerage, arrangement and agency services;

20.

Depositary of securities;

21.

Asset management and trustee services for securitization specialty companies under asset securitization regulations;

22.

Securities dealing in the ECN market;

23.

Underwriting, brokerage and agency services for securities issued on a private placement basis;

24.

Leasing and sales of IT systems and software related to securities business;

25.

Advertisement in the form of electronic document through communication network;

26.

Other businesses and activities related to the items listed above; and

27.

Other businesses approved by relevant regulatory agencies.

(5)

Woori Credit Suisse Asset Management

Creation/cancellation of investment trusts;

Management of investment trust assets;

Management of mutual funds;

Sales and redemption of indirect investment securities;

Investment advisory;

Investment executions;

Administration of invested companies;

Futures trading;

Call trading;

10.

Bill purchases;

11.

Domestic and global economy and capital markets research;

12.

Securities dealing;

13.

Publishing investment related books;

14.

Real estate leasing;

15.

Other activities approved by the Indirect Investment Asset Management Business Act; and

16.

Other businesses and activities related to the items listed above.

(6)

Woori Finance Information System

Development, distribution and management of computer systems;

Consulting services in computer installation and usage;

Distribution, brokerage and lease of computer systems;

Maintenance of computer-related equipment;

Publication and distribution of IT-related reports and books;

Educational services related to computer usage;

Research and outsourcing information processing services;

Internet-related businesses;

Information processing, telecommunications and information distribution services;

10.

Manufacturing and distribution of audio-visual media;

11.

Information-processing operations and service systems; and

12.

All activities directly or indirectly related to the items listed above.

(7)

Woori F&I

Purchase and disposition of ABSs, issued primarily to securitize distressed assets, pursuant to the Asset Securitization Law;

Purchase and disposition of asset management companies that had been initially set up to manage distressed assets pursuant to the Asset securitization Law;

Purchase and disposition of troubled assets;

Investment activity with respect to indirect investment instruments under the Indirect Investment Asset Management Business Act and other investment activity with respect to other securities, bonds or similar financial assets under the Corporate Restructuring Promotion Act; and

All businesses or activities directly or indirectly related to the businesses listed in 1 and 4.

(8)

Woori LB Third Asset Securitization Specialty Co., Ltd.

Transfer, management and disposition of all rights related to the securities and other assets (the “securitized assets”) of Woori Bank (formerly known as Hanvit Bank) and Kwangju Bank pursuant to the Asset Securitization Law;

Offering and redemption of the securitized assets;

Preparation and registration of asset securitization plans to the Financial Supervisory Service;

Execution of agreements required for the asset securitization plan;

Provisional borrowing and other similar procedures for ABS redemption;

Investment of surplus funds; and

Other activities related to the items listed above.

(9)

Woori Private Equity

Private equity business;

Other activities approved by the Indirect Investment Asset Management Business Act; and

Other activities related to the items listed above.

2.	History of the Company

a.	Company History

(1)

Background: From the establishment and major developments.


December 23, 2000		Enactment of the Financial Holding Company Act

December 30, 2000		KDIC invested public funds of Won 8.5 trillion in Hanvit Bank, Peace Bank, Kwangju Bank, Kyongnam Bank and Hanaro Merchant Bank

March 14, 2001		Filed application for the incorporation of Woori Finance Holdings

March 24, 2001		Official approval from the Financial Supervisory Service for Woori Finance Holdings

March 27, 2001		Incorporated as Woori Finance Holdings, Co. Ltd (Total Capital: Won 3.6 trillion)

April 2, 2001		Official launch of Woori Finance Holdings

July 16, 2001		Issued bonds with warrants

September 1, 2001		Hanaro Merchant Bank’s name changed to Woori Merchant Bank

September 29, 2001		Woori Finance Information System incorporated as a subsidiary

December 3, 2001		Woori Asset Management incorporated as a subsidiary

December 3, 2001		Woori First Asset Securitization Specialty Co., Ltd. incorporated as a subsidiary

December 26, 2001		Woori Second Asset Securitization Specialty Co., Ltd. incorporated as a subsidiary

December 31, 2001		Spin-off and merger of Peace Bank; Launch of Woori Credit Card

March 15, 2002		Woori Third Asset Securitization Specialty Co., Ltd. incorporated as a subsidiary

March 29, 2002		Woori Investment Trust Management incorporated as a subsidiary

May 20, 2002		Hanvit Bank’s name changed to Woori Bank

June 11, 2002		Capital increase through public offering (Total capital: Won 3.8 trillion)

June 24, 2002		Listed on the Korea Stock Exchange


July 29, 2002		Woori Securities incorporated as a subsidiary

September 5, 2002		Executed strategic investment agreement with Lehman Brothers with respect to the management of distressed assets

December 23, 2002		Purchase and acquisition agreement with the credit card division of Kwangju Bank

July 31, 2003		Woori Merchant Bank merged into Woori Bank

September 29, 2003		Listing on the New York Stock Exchange

December 12, 2003		Liquidation of Woori LB First Asset Securitization Specialty Co., Ltd.

March 30, 2004		Appointment of new management

March 31, 2004		Woori Card merged into Woori Bank

June 18, 2004		Woori Securities becomes a wholly-owned subsidiary

December 21, 2004		Capital increase through conversion of CBs (Total capital after conversion: Won 3.9 trillion)

December 24, 2004		Acquired LG Investment & Securities and incorporated as a subsidiary

February 17, 2005		Capital increase through conversion of CBs (Total capital after conversion: Won 3.9 trillion)

March 11, 2005		Capital increase through conversion of CBs (Total capital after conversion: Won 4.0 trillion)

March 31, 2005		Woori Securities and LG Investment & Securities merged (the name of the surviving entity, LG Investment & Securities, changed to Woori Investment & Securities)

May 6, 2005		Incorporated LG Investment Trust Management from 2^nd tier subsidiary to 1^st tier subsidiary

May 31, 2005		Woori Investment Trust Management and LG Investment Trust Management merged (the name of the surviving entity, LG Investment Trust Management, changed to Woori Asset Management)

August 3, 2005		Dissolution of Woori LB Second Asset Securitization Specialty Co., Ltd.

September 5, 2005		Woori Asset Management becomes a wholly-owned subsidiary through capital reduction and cancellation


October 21, 2005		Woori Private Equity is established and incorporated as a subsidiary

October 27, 2005		Closure of strategic investment agreement with Lehman Brothers

February 23, 2006		Joint venture arrangement between Woori CA Asset Management, a 2nd tier subsidiary, and Japan’s Shinsei Bank (involving a transfer of 49% of Woori F&I’s 100% stake in Woori CA Asset Management to Shinsei Bank)

April 11, 2006		Joint venture agreement to transfer 30% of the shares of Woori Asset Management to Credit Suisse Asset Management International Holdings, a wholly owned subsidiary of Credit Suisse.

May 30, 2006		Upon the 30% share transfer to Credit Suisse Asset Management International Holdings, Woori Asset Management was renamed Woori Credit Suisse Asset Management.

b.	Associated Business Group

(1)

Overview of Business Group

Name of business group: Woori Financial Group

History


December 23, 2000		Enactment of the Financial Holding Company Act

December 30, 2000		KDIC invested public funds of Won 8.5 trillion in Hanvit Bank, Peace Bank, Kwangju Bank, Kyongnam Bank and Hanaro Merchant Bank

March 14, 2001		Filed application for the incorporation of Woori Finance Holdings

March 24, 2001		Official approval from the Financial Supervisory Service for Woori Finance Holdings

March 27, 2001		Incorporated as Woori Finance Holdings, Co. Ltd (Total Capital: Won 3.6 trillion)

April 2, 2001		Official launch of Woori Finance Holdings

July 16, 2001		Issued bonds with warrants

September 1, 2001		Hanaro Merchant Bank’s name changed to Woori Merchant Bank

September 29, 2001		Woori Finance Information System incorporated as a subsidiary



December 3, 2001		Woori Asset Management incorporated as a subsidiary

December 3, 2001		Woori First Asset Securitization Specialty Co., Ltd. incorporated as a subsidiary

December 26, 2001		Woori Second Asset Securitization Specialty Co., Ltd. incorporated as a subsidiary

December 31, 2001		Spin-off and merger of Peace Bank; Launch of Woori Credit Card

March 15, 2002		Woori Third Asset Securitization Specialty Co., Ltd. incorporated as a subsidiary

March 29, 2002		Woori Investment Trust Management incorporated as a subsidiary

May 20, 2002		Hanvit Bank’s name changed to Woori Bank

June 11, 2002		Capital increase through public offering (Total capital: Won 3.8 trillion)

June 24, 2002		Listed on the Korea Stock Exchange

July 29, 2002		Woori Securities incorporated as a subsidiary

September 5, 2002		Executed strategic investment agreement with Lehman Brothers with respect to the management of distressed assets

December 23, 2002		Purchase and acquisition agreement with the credit card division of Kwangju Bank

July 31, 2003		Woori Merchant Bank merged into Woori Bank

September 29, 2003		Listing on the New York Stock Exchange

December 12, 2003		Liquidation of Woori LB First Asset Securitization Specialty Co., Ltd.

March 30, 2004		Appointment of new management

March 31, 2004		Woori Card merged into Woori Bank

June 18, 2004		Woori Securities becomes a wholly-owned subsidiary

December 21, 2004		Capital increase through conversion of CBs (Total capital after conversion: Won 3.9 trillion)

December 24, 2004		Acquired LG Investment & Securities and incorporated as a subsidiary

February 17, 2005		Capital increase through conversion of CBs (Total capital after conversion: Won 3.9 trillion)


March 11, 2005		Capital increase through conversion of CBs (Total capital after conversion: Won 4.0 trillion)

March 31, 2005		Woori Securities and LG Investment & Securities merged (the name of the surviving entity, LG Investment & Securities, changed to Woori Investment & Securities)

May 6, 2005		Incorporated LG Investment Trust Management from 2^nd tier subsidiary to 1^st tier subsidiary

May 31, 2005		Woori Investment Trust Management and LG Investment Trust Management merged (the name of the surviving entity, LG Investment Trust Management, changed to Woori Asset Management)

August 3, 2005		Dissolution of Woori LB Second Asset Securitization Specialty Co., Ltd.

September 5, 2005		Woori Asset Management becomes a wholly-owned subsidiary through capital reduction and cancellation

October 21, 2005		Woori Private Equity is established and incorporated as a subsidiary

October 27, 2005		Closure of strategic investment agreement with Lehman Brothers

February 23, 2006		Joint venture arrangement between Woori CA Asset Management, a 2^nd tier subsidiary, and Japan’s Shinsei Bank (involving a transfer of 49% of Woori F&I’s 100% stake in Woori CA Asset Management to Shinsei Bank)

April 11, 2006		Joint venture agreement to transfer 30% of the shares of Woori Asset Management to Credit Suisse Asset Management International Holdings, a wholly owned subsidiary of Credit Suisse.

May 30, 2006		Upon the 30% share transfer to Credit Suisse Asset Management International Holdings, Woori Asset Management was renamed Woori Credit Suisse Asset Management.

(2)

Related companies within the business group


Type	Name of Company	Controlling Company	Notes
Holding Company	Woori Finance Holdings	KDIC

1^stTier Subsidiaries	Woori Bank	Woori Finance Holdings	9 companies
	Kwangju Bank
	Kyongnam Bank
	Woori Finance Information System
	Woori F & I
	Woori Third Asset Securitization Specialty
	Woori CS Asset Management (1)
	Woori Investment & Securities
	Woori Private Equity

2^nd Tier Subsidiaries	Woori Credit Information	Woori Bank	13 companies
	Woori America Bank
	P.T. Bank Woori Indonesia
	Korea BTL Infrastructure Fund
	Woori Global Markets Asia Ltd.
	Nexbi Tech	Woori Finance Information System
	Woori SB Asset Management (2)	Woori F&I
	Woori Private Equity Fund	Woori Private Equity
	Woori Futures	Woori Investment & Securities
	Woori Investment & Securities International Ltd.
	Woori Investment & Securities (HK) Ltd.
	Woori Investment & Securities America Inc.
	Mars First Private Hoesa

(1)	On May 30, 2006, Woori Asset Management was renamed Woori Credit Suisse Asset Management.

(2)	On February 23, 2006, Woori CA Asset Management was renamed Woori SB Asset Management.

* Shinwoo Corporate Restructuring Company is no longer a subsidiary due to its liquidation on September 29, 2006.

* 1^sttier subsidiary, Woori Private Equity, established Woori Private Equity Fund. Woori Private Equity Fund was included as 2^ndtier subsidiary on July 27, 2006.

* Our 1^st tier subsidiary, Woori Bank, established Woori Global Markets Asia Limited in Hong Kong, which was included in our 2^nd tier subsidiary as of August 23, 2006.

3.	Capital Structure

a.	Changes in Capital

(units: Won, shares)


Date	Category	Stock Decrease/Increase
Date	Category	Type	Quantity	Par Value	Issue price	Note
2001.3.27	Establishment	Common	727,458,609	5,000	5,000	—

2002.5.31	Exercise B/W	Common	165,782	5,000	5,000	—

2002.6.12	Capital increase w/ consideration	Common	36,000,000	5,000	6,800	0.0494

2002.6.30	Exercise B/W	Common	1,416,457	5,000	5,000	—

2002.9.30	Exercise B/W	Common	2,769,413	5,000	5,000	—

2002.12.31	Exercise B/W	Common	4,536	5,000	5,000	—

2003.3.31	Exercise B/W	Common	1,122	5,000	5,000	—

2003.6.30	Exercise B/W	Common	7,688,991	5,000	5,000	—

2004.6.18	Stock Exchange	Common	8,571,262	5,000	8,902¹⁾	Exchange with Woori Sec shares on a 1-to-0.55 basis

2004.11.4	Exercise CB	Common	666,301	5,000	5,380	—

2004.12.2	Exercise CB	Common	7,995,613	5,000	5,380	—

2004.12.21	Exercise CB	Common	3,717,472	5,000	5,380	—

2005.2.17	Exercise CB	Common	3,481,173	5,000	5,588	—

2005.3.11	Exercise CB	Common	5,914,180	5,000	7,313	—

2005.3.11	Exercise CB	Common	164,429	5,000	7,228	—

b.	Anticipated Changes in Capital

Not applicable

c.	Convertible Bonds

All issued convertible bonds have been converted as of the date of this report.

4.	Total Number of Authorized Shares

a.	Total Number of Authorized Shares


As of 2006.9.30		(units: shares)


Items	Type
Items	Common Shares	Total
Total number of shares authorized	2,400,000,000	2,400,000,000

Total number of issued stock	806,015,340	806,015,340

Treasury stock	2,554	2,554

Free float shares	806,012,786	806,012,786

b.	Capital and Price per Share


As of 2006.9.30					(units: Won, shares)
Type		Capital			Price per share
Type		Capital	Par value of issued shares	Par value of free float shares	Par value per share	Capital ÷ number of shares issued	Capital ÷ free float shares
Registered	Common Stock	4,030,076,700,000	4,030,076,700,000	4,030,063,935,000	5,000	5,000	5,000

Total		4,030,076,700,000	4,030,076,700,000	4,030,063,935,000	5,000	5,000	5,000

c.	Treasury Stock


As of 2006.9.30		(units: shares)

Acquisition Method

Type
of Stock

Beg.

Acquired

Disposal

Canceled

End

Remarks

Direct purchase under Sub-section 1, section 189-2

Common

Preferred

Direct purchase other than the conditions under Sub-section 1, section 189-2

Common

2,550

2,554

Preferred

Subtotal

Common

2,550

2,554

Preferred

Indirect acquisition from trust agreement

Common

Preferred

Total

Common

2,550

2,554

Preferred

d.	Status of Employee Stock Option Program

(units: shares)

5.	Voting Rights


As of 2006.9.30			(units: shares)
Items		Number of stock	Notes
Total number of shares	Common Shares	806,015,340
Total number of shares	Preferred Shares

Stocks without voting rights	Common Shares
Stocks without voting rights	Preferred Shares

Stocks with limited voting rights under the Securities & Exchange Law	—	2,554

Stocks with voting rights restored	—

Stocks with voting rights	Common Shares	806,012,786
Stocks with voting rights	Preferred Shares

6.	Dividend Information

a.	Dividend information for the past three years


Items		2005	2004	2003
Par value per share (Won)		5,000	5,000	5,000

Net profit (Won in Millions)		1,688,221	1,261,924	202,565

Earnings per share (Won)		2,099	1,616	262

Profit available for dividend distribution (Won in Millions)		3,514,715	2,120,429	1,203,688

Total cash payout (Won in Millions)		322,405	119,468	77,550

Total stock dividends (Won in Millions)

Propensity to cash dividends (%)		19.10	9.47	38.28

Cash dividend yield (%)	Common Shares	1.98	1.81	1.53
Cash dividend yield (%)	Preferred Shares

Stock dividend yield (%)	Common Shares
Stock dividend yield (%)	Preferred Shares

Cash dividend per share (Won)	Common Shares	400	150	100
Cash dividend per share (Won)	Preferred Shares

Stock dividend per share (Won)	Common Shares
Stock dividend per share (Won)	Preferred Shares

II. Description of business

1.	Business Overview

LOGO

a.	Organizational Chart

2.	Overview of Operations

a.	Performance of Operations

As a financial holding company under the Financial Holding Company Act, our main income consists of dividend payments made to us by our subsidiaries. We are not involved in any other operations.

b.	Financing of operations

(1)

Source of Funds

(units: millions of Won)


Items	2006 3Q	2005	2004
Shareholders’ Equity	11,389,810	9,717,364	7,448,052
Capital	4,030,076	4,030,076	3,982,278
Capital Surplus	84,488	84,488	84,356
Retained Earnings	5,165,610	3,891,963	2,328,854
Capital Adjustments	2,109,635	1,710,836	1,052,565
Borrowings	1,858,773	2,314,419	2,299,992
Debentures	1,847,289	2,296,203	2,154,637
Bank Borrowings	—	—	120,000
Commercial Paper	—	—	—
Other Borrowings	—	—	—
Other Liabilities	11,484	18,216	25,354
Total	13,248,583	12,031,783	9,748,044

(2)

Use of Funds

(units: millions of Won)


Items	2006 3Q	2005	2004
Subsidiary Stock	13,018,168	11,751,678	9,436,975
Woori Bank	10,794,153	9,695,213	7,589,957
Kyongnam Bank	776,998	694,275	608,802
Kwangju Bank	622,580	561,330	420,595
Woori Financial Information System	14,420	11,903	7,613
Woori F&I	109,007	114,017	58,231
Woori 3^rd Asset Securitization Specialty	13,721	—	—
Woori Investment Trust Management	—	—	35,076
Woori Securities	—	—	361,500
Woori Investment & Securities	631,718	604,543	355,201
Woori CS Asset Management (formerly Woori Asset Management)	45,773	60,600	—
Woori Private Equity	9,798	9,797	—
Investment Securities	—	—	—
Loan Obligations	84,575	109,450	218,641
Tangible Assets	83	119	228
Intangible Assets	35	35	54
Cash	83,183	104,072	56,099
Other Assets	62,540	66,428	36,047
Total	13,248,583	12,031,783	9,748,044

c.	Transactions related to Commission Fees

(units: millions of Won)


Category	Items	2006 3Q	2005 3Q	2005
Commission Revenue (A)		0	0	0
Commission Expense (B)		5,791	5,417	6,641
Commission Profit (A-B)		-5,791	-5,417	-6,641

3.	Other Information Relevant to Investment Decisions

We calculated the following ratios in accordance with the Financial Holding Company Act as explained in the footnote below.

a.	Won-denominated Current Ratio

(units: millions of Won)


Items	2006 3Q		2005		2004		2003
Current Assets (A)	113,951		111,091		57,346		203,202
Current Liabilities (B)	10,831		18,216		11,385		9,711
Current Ratio (A/B)	1,052.08	%	609.85	%	503.70	%	2,092.5	%

*	Current ratio

=	assets with maturity of less than 3 months

liabilities with maturity of less than 3 months

b.	Foreign Currency-denominated Current Ratio

(units: millions of Won)


Items	2006 1H	2005	2004	2003
Current Assets (A)	—	—	—	147,754
Current Liabilities (B)	—	—	—	148,598
Current Ratio (A/B)	—	—	—	99.4	%

*	Current ratio

=	assets with maturity of less than 3 months

liabilities with maturity of less than 3 months

c.	Debt Ratio

(units: millions of Won)


Items	2006 3Q		2005		2004		2003
Liabilities (A)	1,858,773		2,314,418		2,299,992		2,649,920
Equity (B)	11,389,810		9,717,364		7,448,052		5,597,895
Debt Ratio (A/B)	16.3	%	23.8	%	30.9	%	47.3	%

d.	Credit ratings for the past three years


Date of Rating	Evaluated Securities	Credit Rating	Company (Ratings Range)	Evaluation Category

2003.11.13 2003.12.04 2003.12.04 2004.2.6 2004.3.11 2004.5.27 2004.6.9 2004.6.9 2004.7.16 2004.7.16 2004.11.15 2004.11.15 2005.6.7 2005.6.9 2005.6.13 2005.9.16 2005.9.20 2005.10.24 2006.08.10 2006.09.07	Debentures Debentures Debentures Debentures Debentures Debentures Debentures Debentures Debentures Debentures Debentures Debentures	BBB AAA AAA BBB BBB- Baa3 AAA AAA AAA AAA AAA AAA BBB AAA AAA AAA AAA BBB+ Baa2 Baa1	R&I (AAA ~ C) NICE (AAA ~ D) KIS Ratings (AAA ~ D) Fitch Rating (AAA ~ D) S&P (AAA ~ D) Moody’s (Aaa ~ C) KIS Ratings (AAA ~ D) NICE (AAA ~ D) NICE (AAA ~ D) Korea Ratings (AAA ~ D) Korea Ratings (AAA ~ D) KIS Ratings (AAA ~ D) S&P (AAA ~ D) KIS Ratings (AAA ~ D) Korea Ratings (AAA ~ D) NICE (AAA ~ D) KIS Ratings (AAA ~ D) Fitch Rating (AAA ~ D) Moody’s (Aaa ~ C) Moody’s (Aaa ~ C)	Periodic evaluation Case evaluation Case evaluation Case evaluation Case evaluation Case evaluation Case evaluation Case evaluation Case evaluation Case evaluation Case evaluation Case evaluation Case evaluation Case evaluation Case evaluation Case evaluation Case evaluation Case evaluation Periodic evaluation Case evaluation

e.	Other Important Information

See our annual report for the BIS capital ratio and non-performing loans of our subsidiaries.

III.

Financial Information

1.	Condensed Financial Statements (Non-consolidated)

(units: millions of Won)


Items	2006 3Q	2005	2004	2003	2002
Cash and Due from Banks	83,182	104,072	56,099	349,585	73,256
Securities	13,018,168	11,751,678	9,436,976	7,007,222	6,062,119
Loans	84,575	109,450	218,641	830,566	1,231,207
Fixed Assets	118	155	282	293	374
Other Assets	62,540	66,428	36,046	60,148	22,195
Total Assets	13,248,583	12,031,783	9,748,044	8,247,814	7,389,151
Borrowings	0	0	120,000	0	300,000
Debentures	1,847,289	2,296,203	2,154,636	2,621,182	1,999,250
Other Liabilities	11,484	18,216	25,355	28,737	25,772
Total Liabilities	1,858,773	2,314,419	2,299,991	2,649,919	2,325,022
Common Stock	4,030,077	4,030,077	3,982,278	3,877,525	3,839,074
Capital Surplus	84,488	84,488	84,356	61,324	58,645
Retained Earnings	5,165,610	3,891,963	2,328,854	1,282,866	1,145,518
Capital Adjustment	2,109,635	1,710,836	1,052,565	376,180	20,892
Total Stockholder’s Equity	11,389,810	9,717,364	7,448,053	5,597,895	5,064,129
Operating Income*	1,580,700	1,867,488	1,922,849	1,593,251	878,488
Operating Expenses *	106,296	179,189	662,975	1,390,154	302,721
Operating Profit	1,474,404	1,688,299	1,259,874	203,097	575,767
Ordinary Income	1,597,155	1,688,221	1,261,925	202,565	589,214
Net profit	1,597,155	1,688,221	1,261,925	202,565	589,214

*1.	Operating income and operating expenses are computed by the total amount of gain or loss under the equity method in accordance with the Article 15 of the corporate accounting standard.

2.	The 2004 figures have been changed due to changes in accounting standards.

2.	Condensed Financial Statements (Consolidated)

(units: millions of Won)


Items	2005	2004	2003	2002	2001
Cash and Due from Banks	11,224,015	6,530,065	6,471,855	6,568,852	6,432,890
Securities	37,693,090	29,175,271	27,006,677	26,452,509	25,024,333
Loans	106,937,970	91,482,647	86,077,297	73,604,113	59,876,198
Fixed Assets	2,684,534	2,646,979	2,734,616	2,796,183	2,831,851
Other Assets	6,003,239	6,767,002	6,477,275	5,421,877	5,920,545
Total Assets	164,542,848	136,601,964	128,767,720	114,843,534	100,058,817
Deposits	107,087,991	92,148,907	89,049,625	78,917,388	69,332,217
Borrowings	16,508,102	13,285,773	12,813,104	13,839,614	13,742,572
Debentures	18,813,020	13,687,295	12,195,159	10,792,932	5,491,533
Other Liabilities	11,028,773	8,774,709	9,011,532	5,978,833	7,080,301
Total Liabilities	153,437,886	127,896,684	123,069,420	109,528,767	95,646,623
Common Stock	4,030,077	3,982,278	3,877,525	3,839,074	3,637,293
Consolidated Capital Surplus	142,608	170,960	57,844	25,029	—
Consolidated Retained Earnings	3,896,255	2,333,145	1,152,053	1,151,113	558,852
Consolidated Capital Adjustment	1,652,709	965,957	414,969	54,506	-116,546
Minority Interest	1,383,313	1,252,940	195,909	245,045	359,595
Total Stockholder’s Equity	11,104,962	8,705,280	5,698,300	5,314,767	4,439,194
Operating Income (1)	14,258,430	13,245,482	10,403,445	9,623,990	10,159,156
Operating Expenses (2)	12,227,877	12,138,088	10,060,209	8,908,732	9,847,439
Operating Profit	2,030,553	1,107,394	343,236	715,258	311,717
Non-operating Income	573,219	482,946	639,883	540,113	1,190,685
Non-operating Expenses	458,068	397,766	752,057	800,487	937,984
Ordinary Income	2,145,704	1,192,574	231,062	454,884	564,418
Aggregated Net Profit	1,833,521	1,261,052	52,374	613,576	736,616
Consolidated Net Profit	1,688,221	1,261,925	56,279	591,588	686,287
No. of Companies Consolidated	21	24	15	17	17

(1)(2)

Operating income and operating expenses are calculated from the total amount of gain or loss under the equity method in accordance with the Article 15 of the corporate accounting standard.

*	The 2004 figures have been changed due to the changes in accounting standards.

3.	Accounting Information

a.	Loan Loss Reserves

(1)

Loan Loss Reserves for the past three years by classification

(units: millions of Won)


Period	Item	Total Credits	Loan Loss Reserves	Provisioning Ratio
2006 3Q	Lending Loans Total	85,000 — 85,000	425 — 425	0.5 — 0.5	% %

2005	Lending Loans Total	110,000 — 110,000	550 — 550	0.5 — 0.5	% %

2004	Lending Loans Total	151,850 67,890 219,740	759 339 1,098	0.5 0.5 0.5	% % %

(2)

Change in Loan Loss Reserves for the past three years

(units: millions of Won)


Item	2006 1H	2005	2004
1. Initial loan loss reserves balance	550	1,098	4,174
2. Net credit costs	0	0	0
1) Write-offs	0	0	0
2) Recovery of written-off assets	0	0	0
3) Other changes	0	0	0
Recovery of credit costs	-125	-548	-3,076
Ending loan loss reserve balance	425	550	1,098

4.	Notes on Consolidated Financial Statements

(1)

Auditor’s opinion


Item	2005	2004	2003	2002	2001
Auditor	Anjin (Deloitte Anjin)	HanaAnjin (Deloitte HanaAnjin)	Hana (Deloitte & Touche)	Hana (Deloitte & Touche)	Anjin (Arthur Andersen)
Auditor’s Opinion	Unqualified Opinion	Unqualified Opinion	Unqualified Opinion	Unqualified Opinion	Unqualified Opinion

(2)

Companies included in the consolidated financial statements in the last three years


Year	Companies included	Newly included companies	Excluded companies
2005	Woori Finance Holdings and 21 companies	- Woori Private Equity	- Woori Investment Trust Management - Woori Securities - Woori Second SPC - Woori First Private Investment Company

2004	Woori Finance Holdings and 24 companies	- Woori First Private Investment Company - LG Investment & Securities - LG Futures - LG Investment Trust Management - LG Investment & Securities Int’l Ltd. - LG Investment & Securities (H.K.) Limited - LG Investment & Securities America, Inc. - LG Investments Holding B.V. (Amsterdam) GG - High Technology Venture Investment - Global Technology Investment	- Woori Credit Card

2003	Woori Finance Holdings and 15 companies		- Woori Merchant Bank - Woori First SPC

IV.

Independent Auditor’s Opinion

1.	Independent Auditor’s Opinion

a.	Independent Auditor


2006 3Q	2005 3Q		2005		2004
Anjin (Deloitte Anjin)	Anjin	(Deloitte Anjin)	Anjin	(Deloitte Anjin)	HanaAnjin HanaAnjin	(Deloitte )

2. Compensation to the Independent Auditor

a.	Auditing Service

(units: millions of Won)


Year	Auditor	Activity	Compensation	Accrued Time (hrs)
2006 3Q	Anjin (Deloitte Anjin)	Quarter, Half Year, Annual Interim Financial Statements (Consolidated, Non -consolidated)	320	3,315
2005	Anjin (Deloitte Anjin)	Quarter, Half Year, Annual Interim Financial Statements (Consolidated, Non -consolidated)	320	5,950
2004	HanaAnjin (Deloitte HanaAnjin)	Quarter, Half Year, Annual Interim Financial Statements (Consolidated, Non-consolidated)	310	7,158

b.	Compensation for Services Other than the Audit

(units: thousands of dollars)


Year	Contract Date	Activity	Period	Comp.	Note
2006 3Q	—	—	—	—	—
2005	2006.2.9	US GAAP Auditing	2005.12-2006.5	1,950	Deloitte Anjin
2004	2005.3.25	US GAAP Auditing	2004.12-2005.5	2,050	Deloitte HanaAnjin

V. Corporate Governance and Affiliated Companies

1. Overview of the Corporate Governance

a.	About the Board of Directors

(1)

Board of Directors

Duties of Boards of Directors

The Board of Directors shall consist of directors and shall determine the matters that are provided for as the authority of the Board of Directors under the relevant laws and regulations.

The Board of Directors shall perform its duties set forth in the Rules for the Board of Directors for the purpose of enhancement of shareholders’ benefits.

Information Regarding the Board of Directors

•

The following information was stated in the notice to the shareholders of the annual general meeting and in the explanation of bill on March 10 and 11, 2006, respectively.

•

Second Resolution: Appointment of Non-Standing Directors and Audit Committee Members


Position	Name	Information	Relationship with KDIC	Transaction with WFG

Non-standing Director and audit Committee	Je-Hoon Lee	- B.A. in Sociology, Seoul National University - M.A. in Journalism, Seoul National University - CEO & President of The Joongang Ilbo - Currently President of Korea BBB Association	N/A	N/A

Non-standing Director and audit Committee	Sung-Tae Ro	- B.A. in Economics, Seoul National University - Ph.D. in Economics, Harvard University - Dean of Business School at Myongji University - Currently President of Korea Economic Research Institute	N/A	N/A

Non-standing Director and audit Committee	Woon-Youl Choi	- B.B.A. in Business Administration, Seoul National University - Ph.D. in Finance, University of Georgia - Member of Monetary Policy Committee - Currently Vice President of Sogang University	N/A	N/A

Non-standing Director and audit Committee	Chung-Sook Moon	- B.A. in Home Management, Sookmyung Women’s University - Ph.D. in Consumer Economics, Kansas State University - Member of Regulatory Reform Committee - Currently Professor of Economics at Sookmyung Women’s University	N/A	N/A

Non-standing Director and audit Committee	Sung-Hwan Bae	- B.B.A. in Business Administration, Yeungnam University - Masters in Economics, University of Illinois - Ph.D. in Business Administration, SungKyunKwan University - Banking Supervisory Authority of the Bank of Korea - Currently director at Korea Deposit Insurance Corp.	Employee (Director)	N/A


Non-standing Director and audit Committee	Sung-Kwan Huh	- B.B.A. in Business Administration, Dong-A University - Masters in Business Administration, State University of New York at Buffalo - Ph.D. in Business Administration, State University of New York at Buffalo - Minister of Government Administration and Home Affairs - President of Gwangju Institute of Science and Technology	N/A	N/A

Non-standing Director and audit Committee	Bong Soo Park	- B.B.A. in Business Administration, Seoul National University - Masters in Economics, George Washington University - Chief Director of Korea Technology Credit Guarantee Fund - Currently Executive Advisor at Korea Institute for International Economics Policy	N/A	N/A

Appointment of Non-standing Directors

Pursuant to Article 42 of the Articles of Association and Article 5 of the non-standing director candidate nomination committee regulations, a non-standing director is appointed through the recommendation by the non-standing director candidate nomination committee of the candidates and the a resolution at a shareholders’ meeting.

* Article 42 (Committee)

We currently have the following management committees serving under the board of directors:

(a)

BOD Management Committee

(b)

Management Compensation Committee

(c)

Risk Management Committee

(d)

Executive Management Committee

(e)

Ethics Management Committee

(f)

Non-standing Director Candidate Nomination Committee

(g)

MOU Review Committee

(h)

Audit Committee

Committees within Board of Directors

BOD Management Committee


Name	Position	Notes
Young-Key Hwang	Chairman and CEO	Chairman/CEO Young-Key Hwang heads this committee consisting of the heads of the sub-committees. Non- standing directors must be more than 1/2 of the total committee members.
Je-Hoon Lee	Non-standing Director
Sung-Tae Ro	Non-standing Director
Woon-Youl Choi	Non-standing Director
Chung-Sook Moon	Non-standing Director

Management Compensation Committee


Name	Position	Notes
Je-Hoon Lee	Non-standing Director	Non-standing director Je-Hoon Lee heads this committee consisting of three non-standing directors.
Sung-Kwan Huh	Non-standing Director
Woon-Youl Choi	Non-standing Director

Non-standing director Sung-Kwan Huh was newly appointed to the committee on March 28, 2006.

Non-standing directors Je-Hoon Lee and Woon-Youl Choi were reappointed and Oh-Seok Hyun resigned on March 28, 2006.

Risk Management Committee


Name	Position	Notes
Young-Key Hwang	Chairman and CEO	Chairman/CEO Young-Key Hwang heads this committee. The committee consists of the Chairman/CEO, CFO and no less than three non-standing directors.
Seung Hee Park	Senior managing director and CFO
Sung-Tae Ro	Non-standing Director
Sung-Kwan Huh	Non-standing Director
Bong Soo Park	Non-standing Director
Woon-Youl Choi	Non-standing Director
Sung-Hwan Bae	Non-standing Director

Non-standing directors Sung-Kwan Huh, Bong Soo Park, and Sung-Hwan Bae were newly appointed to the committee on March 28, 2006. Non-standing directors, Sung-Tae Ro and Woon-Youl Choi were reappointed to the committee on March 28, 2006.

Sung-Hwan Bae resigned on July 18, 2006.

Audit Committee


Name	Position	Notes
Je-Hoon Lee	Non-standing Director

Sung-Tae Ro	Non-standing Director

Sung-Kwan Huh	Non-standing Director

Bong Soo Park	Non-standing Director

Woon-Youl Choi	Non-standing Director

Chung-Sook Moon	Non-standing Director

Sung-Hwan Bae	Non-standing Director

Sung-Hwan Bae resigned on July 18, 2006.

Executive Management Committee


Name	Position	Notes
Young-Key Hwang	Chairman and CEO	Chairman/CEO Young-Key Hwang heads the committee consisting of all executive directors.
Seung Hee Park	Senior managing director and CFO

Ethics Management Committee


Name	Position	Notes
Young-Key Hwang	Chairman and CEO	Non-standing director Chung-Sook Moon heads this committee consisting of all executive directors and no less than two non-standing directors.
Seung Hee Park	Senior managing director and CFO
Je-Hoon Lee	Non-standing Director
Chung-Sook Moon	Non-standing Director
Sung-Hwan Bae	Non-standing Director

Non-standing director Sung-Hwan Bae was appointed to the committee and non-standing directors Je-Hoon Lee and Chung-Sook Moon were reappointed on March 28, 2006.

Non-standing director Oh-Seok Hyun resigned on March 28, 2006.

Non-standing director Sung-Hwan Bae resigned on July 18, 2006.

Non-standing Director Candidate Nomination Committee


Name	Position	Notes
Young-Key Hwang	Chairman and CEO	Non-standing director Sung-Tae Ro heads this committee consisting of the Chairman/CEO and no less than three non-standing directors.
Je-Hoon Lee	Non-standing Director
Sung-Tae Ro	Non-standing Director
Bong Soo Park	Non-standing Director
Woon-Youl Choi	Non-standing Director

N on-standing director Bong Soo Park was appointed to the committee and non-standing directors Je-Hoon Lee, Sung-Tae Ro and Woon-Youl Choi were reappointed on March 28, 2006.

MOU Review Committee


Name	Position	Notes
Young-Key Hwang	Chairman and CEO	Chairman/CEO Young-Key Hwang heads this committee consisting of the entire board of directors.
Seung Hee Park	Senior Managing director and CFO
Je-Hoon Lee	Non-standing Director
Sung-Tae Ro	Non-standing Director
Sung-Kwan Huh	Non-standing Director
Bong Soo Park	Non-standing Director
Woon-Youl Choi	Non-standing Director
Chung-Sook Moon	Non-standing Director
Sung-Hwan Bae	Non-standing Director

Non-standing directors Sung-Kwan Huh and Bong Soo Park were newly appointed to the committee on March 28, 2006.

Non-standing director Sung-Hwan Bae resigned on July 18, 2006.

Stock Options


As of September 30, 2006		(units: Won, shares)


Grantee	Relationship	Grant date	Type of stock	No. of granted options	Exercised options	Cancelled options	Exercisable options	Closing price
Byung Chul Yoon	Standing director	2002.12.04	Common	100,000	95,000	5,000	0	19,950
Kwang Woo Chun	Standing director	2002.12.04	Common	80,000	76,000	4,000	0	19,950
Euoo Sung Min	Standing director	2002.12.04	Common	80,000	0	80,000	0	19,950
Hwan Kyu Park	Non-standing dir.	2002.12.04	Common	40,000	0	2,000	38,000	19,950
Ki Chul Han	Non-standing dir.	2002.12.04	Common	30,000	10,500	1,500	18,000	19,950
Tae Ho Sohn	Non-standing dir.	2002.12.04	Common	30,000	28,500	1,500	0	19,950
Won Gihl Sohn	Non-standing dir.	2002.12.04	Common	30,000	28,500	1,500	0	19,950
Nam Hong Cho	Standing director	2002.12.04	Common	10,000	0	500	9,500	19,950
Sang Chul Lee	Standing director)	2002.12.04	Common	10,000	9,500	500	0	19,950
Jae Woong Lee	Standing director	2002.12.04	Common	10,000	0	500	9,500	19,950
Gae Min Lee	Standing director	2002.12.04	Common	10,000	9,500	500	0	19,950
Kwang Sun Chung	Standing director	2002.12.04	Common	10,000	0	10,000	0	19,950
Hae-Seok Suh	Standing director	2002.12.04	Common	10,000	0	500	9,500	19,950
Duk Hoon Lee	Director of related company	2002.12.04	Common	80,000	28,000	4,000	48,000	19,950
Jong Wook Kim	Director of related company	2002.12.04	Common	45,000	42,750	2,250	0	19,950
Jin Kyu Park	Director of related company	2002.12.04	Common	45,000	42,750	2,250	0	19,950
Jong Ku Min	Director of related company	2002.12.04	Common	30,000	0	30,000	0	19,950
Jong Hwee Lee	Director of related company	2002.12.04	Common	30,000	0	1,500	28,500	19,950
Dong Myun Suh	Director of related company	2002.12.04	Common	30,000	0	1,500	28,500	19,950
Ki Shin Kim	Director of related company	2002.12.04	Common	30,000	18,000	1,500	10,500	19,950
Young Seok Kim	Director of related company	2002.12.04	Common	30,000	28,500	1,500	0	19,950
Byung Kil Choi	Director of related company	2002.12.04	Common	30,000	0	1,500	28,500	19,950


Grantee	Relationship	Grant date	Type of stock	No. of granted options	Exercised options	Cancelled options	Exercisable options	Closing Price
Young Ho Park	Director of related company	2002.12.04	Common	30,000	28,500	1,500	0	19,950
Tae Woong Chung	Director of related company	2002.12.04	Common	30,000	0	1,500	28,500	19,950
Dong Chan Bae	Director of related company	2002.12.04	Common	30,000	28,500	1,500	0	19,950
Dae Hwan Kim	Director of related company	2002.12.04	Common	10,000	9,500	500	0	19,950
Young Ha Kim	Director of related company	2002.12.04	Common	10,000	3,500	500	6,000	19,950
Young Yong Kim	Director of related company	2002.12.04	Common	10,000	3,500	500	6,000	19,950
Taik Su Han	Director of related company	2002.12.04	Common	10,000	0	500	9,500	19,950
Sang Im Park	Director of related company	2002.12.04	Common	10,000	0	500	9,500	19,950
Joon Ho Hahm	Director of related company	2002.12.04	Common	10,000	0	500	9,500	19,950
Joon Ho Lee	Director of related company	2002.12.04	Common	30,000	0	1500	28,500	19,950
Joo Sun Yeom	Director of related company	2002.12.04	Common	20,000	0	1,000	19,000	19,950
Ga Seok Chae	Director of related company	2002.12.04	Common	20,000	0	1,000	19,000	19,950
Sung Wook Park	Director of related company	2002.12.04	Common	5,000	4,750	250	0	19,950
Ki Seok Kim	Director of related company	2002.12.04	Common	5,000	0	250	4,750	19,950
Jae Ki Hong	Director of related company	2002.12.04	Common	5,000	4,750	250	0	19,950
Sam Su Pyo	Director of related company	2002.12.04	Common	40,000	38,000	2,000	0	19,950
Jung Rak Chun	Director of related company	2002.12.04	Common	30,000	0	30,000	0	19,950
Won Chul Hwang	Director of related company	2002.12.04	Common	20,000	0	1,000	19,000	19,950
Jong Hwee Kim	Director of related company	2002.12.04	Common	15,000	0	15,000	0	19,950
Sung Hoo Kwak	Director of related company	2002.12.04	Common	15,000	0	15,000	0	19,950
Seok Hwan Lee	Director of related company	2002.12.04	Common	15,000	0	15,000	0	19,950
Seok Hee Hwang	Director of related company	2002.12.04	Common	40,000	0	40,000	0	19,950
Choong Wan Lee	Director of related company	2002.12.04	Common	35,000	0	35,000	0	19,950
Ki Sang Chung	Director of related company	2002.12.04	Common	30,000	0	30,000	0	19,950


Grantee	Relationship	Grant date	Type of stock	No. of granted options	Exercised options	Cancelled options	Exercisable options	Closing Price
Ki Joong Kim	Director of related company	2002.12.04	Common	15,000	0	15,000	0	19,950
Kwang Suh Koo	Director of related company	2002.12.04	Common	15,000	0	15,000	0	19,950
In Kee Baek	Director of related company	2002.12.04		30,000	28,500	1,500	0	19,950
Seung Yang Han	Director of related company	2002.12.04		15,000	0	15,000	0	19,950
Keun Soo Yook	Director of related company	2002.12.04		15,000	0	15,000	0	19,950
Ki Jong Chung	Director of related company	2002.12.04	Common	5,000	4,750	250	0	19,950
Hun Il Nam	Director of related company	2002.12.04	Common	30,000	10,500	1,500	18,000	19,950
Young Soo Kim	Director of related company	2002.12.04	Common	30,000	28,500	1,500	0	19,950
Jin Ho Yoon	Director of related company	2002.12.04	Common	20,000	19,000	1,000	0	19,950
Seok Koo Yoon	Director of related company	2002.12.04	Common	15,000	5,250	750	9,000	19,950
Ji Yeon Joo	Director of related company	2002.12.04	Common	15,000	14,250	750	0	19,950
Ho Hyun Lee	Director of related company	2002.12.04	Common	20,000	19,000	1,000	0	19,950
Chan Kook Chung	Director of related company	2002.12.04	Common	15,000	14,250	750	0	19,950
Duk Yoon Kim	Director of related company	2002.12.04	Common	15,000	8,250	750	6,000	19,950
Young Wook Kim	Director of related company	2002.12.04	Common	15,000	0	750	14,250	19,950
Dae Kyu Ko	Director of related company	2002.12.04	Common	15,000	7,250	750	7,000	19,950
Total	—	—	—	1,560,000	698,000	420,000	475,250	—

Exercised options as of September 30, 2006

Cancelled options reflect the deductions as stipulated in the stock option agreement for failure to meet the substandard and below loan ratio target.

Exercise period: December 5, 2005 ~ December 4, 2008

Exercise Price:

60% of granted = 11,921 Won {6,800*(1+Rate of return of the banking industry index)}

40% of granted = 6,800 Won

2.	Related Companies

LOGO

Woori Private Equity is the general partner of Woori Private Equity Fund. Other shareholders of Woori Private Equity Fund and their shareholdings include: Woori Bank (27.60%), Woori Investment & Securities (14.72%), Kwangju Bank (5.78%), Kyongnam Bank (5.78%), Woori F&I (3.34%), and Woori Private Equity (3.34%).

Investments in Other Companies

As of September 30, 2006

(units: thousands of shares, millions of Won, %)


Type	Name	Beginning Balance			Changes¹		Ending Bal.			Latest Net Income ²	Note (Equity Method Gain/Loss)
Type	Name	Quantity	Share	Cost	Quantity	Cost	Quantity	Share	Cost	Latest Net Income ²	Note (Equity Method Gain/Loss)
DOMESTIC	Woori Bank	635,957	100.0	9,695,213	1,425,755	1,098,940	635,957	100.0	10,794,153	1,425,755	1,243,673
	Kwangju Bank	44,080	99.9	561,330	124,684	61,250	44,080	99.9	622,580	124,684	98,238
	Kyongnam Bank	51,800	99.9	694,275	132,678	82,723	51,800	99.9	776,998	132,678	139,784
	Woori Finance Info Sys.	900	100.0	11,903	3,473	2,517	900	100.0	14,420	3,473	7,017
	Woori F&I	2,000	100.0	114,017	59,002	-5,010	2,000	100.0	109,007	59,002	19,846
	Woori 3^rd SPC	2	100.0	—	16,887	13,721	2	100.0	13,721	16,887	-106
	Woori Investment & Securities (formerly LGIS)	46,325	30.00	604,543	258,839	27,175	46,325	30.60	631,718	258,839	49,931
	Woori CS Asset Management (formerly LGITM)	6,662	100.0	60,600	8,363	-14,827	4,663	70.0	45,773	8,363	9,131
	Woori Private Equity	2,000	100.0	9,797	-203	1	2,000	100.0	9,798	-203	1
	Foreign	—	—	—	—	—	—	—	—	—	—
	Total	789,726		11,751,678	1,999	1,809,443	787,727	—	13,018,168	1,809,443	1,567,515

1.	The changes in the quantity and cost are calculated from the increase or decrease under the equity method.

2.	The latest net income date is December 2005, except for Woori Asset Management and Woori Investment & Securities for which the latest net income date is March 2006.

3.	Due to Woori Investment & Securities’ profit retirement on January 24^th, 2006 (2 million common shares, 1 million preferred shares), Woori Finance Holdings’ percentage ownership increased without change in number of shares held.

4.	On May 30, 2006, Woori Asset Management transferred 30% of its shares to Credit Suisse Asset Management International Holding, a 100% subsidiary of Credit Suisse, and it was renamed Woori Credit Suisse Asset Management.

VI.

Stock Information

1.	Stock Distribution

a.	Stock Information of Major Shareholders and Related Parties


As of 2006.9.30		(units: shares, %)


Name	Relation	Type	Shares Held						Reasons Behind Change
			Beginning balance		(+)	(-)	Ending balance
			Stock	Share			Stock	Share
KDIC	Major S/H	Common	628,458,609	77.97	—	—	628,458,609	77.97
Total		Common	628,458,609	77.97	—	—	628,458,609	77.97
		Preferred			—	—	0	0
		Total	628,458,609	77.97	—	—	628,458,609	77.97

Major Shareholder: KDIC

b.	Share Ownership of More than 5%


As of 2005.12.31						(units: shares, %)
No.	Name	Common Stock		Preferred Stock		Total
No.	Name	No. of shares	%	No. of shares	%	No. of shares	%
1	KDIC	628,458,609	77.97			628,458,609	77.97
Total		628,458,609	77.97			628,458,609	77.97

c.	Shareholder Distribution

As of 2005.12.31


Items	Shareholder number	Ratio	Number of shares	Ratio
Total Minority Shareholders	41,131	100.00	177,549,984	22.03
Minority Shareholders (Companies)	1,075	2.61	144,364,297	17.91
Minority Shareholders (Individual)	40,056	97.38	33,185,687	4.12
Major Shareholders	1	0.00	628,458,609	77.97
Main Shareholders	0	0.00	0	0.00
Total Other Shareholders	0	0.00	0	0.00
Others Shareholders (Companies)	0	0.00	0	0.00
Others Shareholders (Individual)	1	0.00	6,747	0.00
Total	41,133	100.00	806,015,340	100.0

2.	Stock Price and Stock Market Performance for the Past Six Months

a.	Domestic Stock Market

(units: Won, shares)


Period	April	May	June	July	August	September
High	22,400	22,800	18,700	20,200	19,400	19,950
Low	19,500	19,000	16,800	17,950	18,250	18,950
Monthly Trade Volume	45,181,780	37,752,979	45,838,899	37,393,382	41,424,347	35,307,939

b. Foreign Stock Market (NYSE)
						(units: US Dollars, ADR	)

Period	April	May	June	July	August	September
ADR
High	68.71	74.70	60.24	63.84	60.31	63.08
Low	61.30	60.50	51.60	56.41	56.79	58.57
Monthly Trade Volume	197,000	326,300	215,700	89,200	96,700	57,500

*	The ADR exchange ratio is three shares of common stock per one ADS.

VII. Directors and Employee Information

1. Directors


Position		Name	Common Stocks Owned

Chairman and CEO	Registered	Young-Key Hwang

Senior Managing Director and CFO	Registered	Seung Hee Park

Senior Managing Director	Non-Registered	Seong Mok Park

Senior Managing Director	Non-Registered	Young-Gaeng Kim

Non-standing Director	Registered	Je-Hoon Lee

Non-standing Director	Registered	Sung-Tae Ro

Non-standing Director	Registered	Sung-Kwan Huh

Non-standing Director	Registered	Bong Soo Park

Non-standing Director	Registered	Woon-Youl Choi

Non-standing Director	Registered	Chung-Sook Moon

Non-standing Director	Registered	Sung-Hwan Bae

Sung-Kwan Huh and Bong Soo Park were newly appointed as non-standing directors on March 28, 2006.

Non-standing director Sung-Hwan Bae resigned on July 18, 2006.

2. Employee Status

(units: persons, thousands of Won)


Items	Staff				Average Tenure Years	Quarterly Compensation	Average Compensation Per Person	Note
Items	Admin.	Manu.	Misc.	Total	Average Tenure Years	Quarterly Compensation	Average Compensation Per Person	Note
Male	71	—	1	72	6	2,488,071	34,557
Female	9	—	11	20	6	376,454	18,823
Total	80	—	12	92	6	2,864,525	31,136

3. Labor Union Membership


Items	Details	Remarks
Total Membership Base	Deputy Director and below
Actual Members	22
Full-time Members	—
Associated Labor Union Group	—
Miscellaneous	—

4. Number of Professional Personnel


Items	Number	Responsibilities	Remarks
CPA	3	Financial accounting, Financial Planning

VIII. RELATED PARTY TRANSACTIONS

1. Transactions with Affiliated Parties

a. Transactions of Provisional Payments and Loans (including secured loans)

(units: millions of Won)

Name

Relation

Item

Changes

Notes

Beg.

End

Woori Finance Info. Sys

Subsidiary

Other loan

30,000

Woori F&I

Subsidiary

Other loan

80,000

25,000

55,000

Total

110,000

25,000

85,000

b. Payment Transactions

(units: shares)

Name

Relation

Transactions of Payments

Item

Transactions

Notes

Beginning

Increase

Decrease

Ending

Woori Bank

Subsidiary

Common stock

635,956,580

Kwangju Bank

Subsidiary

Common stock

44,080,000

Kyongnam Bank

Subsidiary

Common stock

51,800,000

Woori Finance Info Sys.

Subsidiary

Common Stock

900,000

Woori F&I

Subsidiary

Common Stock

2,000,000

Woori Third Asset Securitization Specialty

Subsidiary

Invested Shares

2,000

Woori Investment & Securities

(formerly known as LG Investment & Securities)

Subsidiary

Common Stock

46,324,981

Woori Asset Management

(formerly known as LG Investment Trust Management)

Subsidiary

Common Stock

6,662,000

1,998,600

4,663,400

Woori Private Equity

Subsidiary

Common Stock

2,000,000

Total

789,725,561

1,998,600

787,726,961

c. Securities Transactions

(units: millions of Won)

Name

Relation

Security type

Transactions

Notes

Purchase

Sales

Total Amount

Gain/Loss

Woori CS Asset Management

Subsidiary

MMF

50,000

100,000

805

Total

50,000

100,000

805

EXHIBIT A

FINANCIAL STATEMENTS

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Woori Finance Holdings Co., Ltd.
	(Registrant)

Date: November 13, 2006	By:	/s/ Youngsun Kim
		(Signature)

	Name:	Youngsun Kim
	Title:	Director

LOGO

WOORI FINANCE HOLDINGS CO., LTD.

NON-CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND NINE MONTHS

ENDED SEPTEMBER 30, 2006 AND 2005

AND INDEPENDENT ACCOUNTANTS’ REVIEW REPORT

LOGO

Independent Accountants’ Review Report

English Translation of a Report Originally Issued in Korean

To the Board of Directors and Shareholders of

Woori Finance Holdings Co., Ltd.:

We have reviewed the accompanying non-consolidated balance sheet of Woori Finance Holdings Co., Ltd. (the “Company”) as of September 30, 2006 and the related non-consolidated statements of income and cash flows for the three months and nine months ended September 30, 2006 and 2005, all expressed in Korean won. These financial statements are the responsibility of the Company’s management. Our responsibility is to issue a report on these financial statements based on our reviews.

We conducted our reviews in accordance with standards for review of interim financial statement in the Republic of Korea. These standards require that we plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data, and this provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Based on our reviews, nothing has come to our attention that causes us to believe that the financial statements referred to above are not presented fairly, in all material respects, in accordance with accounting principles generally accepted in the Republic of Korea (See Note 2).

We have previously audited, in accordance with auditing standards generally accepted in the Republic of Korea, the non-consolidated balance sheet of the Company as of December 31, 2005 and the related non-consolidated statements of income, appropriations of retained earnings and cash flows for the year then ended (not presented herein) and in our report dated February 28, 2006, we expressed an unqualified opinion on those non-consolidated financial statements. The accompanying balance sheet as of December 31, 2005, which is comparatively presented, does not differ in material respects from such audited non-consolidated balance sheet.

Our reviews also comprehended the translation of the Korean won amounts into U.S. dollar amounts and nothing has come to our attention that causes us to believe that such translation has not been made in conformity with the basis stated in Note 2. Such U.S. dollar amounts are presented solely for the convenience of readers outside of Korea.

Accounting principles and review standards and their application in practice vary among countries. The accompanying non-consolidated financial statements are not intended to present the financial position, results of operations or cash flows in accordance with accounting principles and practices generally accepted in countries other than the Republic of Korea. In addition, the procedures and practices utilized in the Republic of Korea to review such financial statements may differ from those generally accepted and applied in other countries. Accordingly, this report and the accompanying financial statements are for use by those knowledgeable about Korean accounting procedures and review standards and their application in practice.

November 3, 2006

Notice to Readers

This report is effective as of November 3, 2006, the accountants’ review report date. Certain subsequent events or circumstances may have occurred between the accountants’ review report date and the time the accountants’ review report is read. Such events or circumstances could significantly affect the accompanying financial statements and may result in modifications to the accountants’ review report.

WOORI FINANCE HOLDINGS CO., LTD.

NON-CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2006 AND DECEMBER 31, 2005


	Korean won				Translation into U.S. dollars (Note 2)
	2006		2005		2006		2005
	(In millions)				(In thousands)
ASSETS

Cash and bank deposits (Notes 13, 15 and 17)	(Won)	83,183	(Won)	104,072	US$	88,006	US$	110,106
Investment securities accounted for using the equity method of accounting (Notes 3 and 16)		13,018,168		11,751,678		13,772,924		12,433,007
Loans, net of allowance for possible loan losses (Notes 4, 15 and 17)		84,575		109,450		89,478		115,795
Fixed and intangible assets (Note 5)		118		155		125		164
Other assets (Notes 6 and 17)		62,539		66,428		66,165		70,279

	(Won)	13,248,583	(Won)	12,031,783	US$	14,016,698	US$	12,729,351

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES
Debentures, net of discounts (Notes 7 and 15)	(Won)	1,847,289	(Won)	2,296,203	US$	1,954,389	US$	2,429,330
Other liabilities (Notes 8, 9 and 17)		11,484		18,216		12,150		19,272

		1,858,773		2,314,419		1,966,539		2,448,602

SHAREHOLDERS’ EQUITY
Common stock (Note 10)		4,030,077		4,030,077		4,263,729		4,263,730
Capital surplus (Note 10)		84,488		84,488		89,386		89,386
Retained earnings (Notes 3 and 10):
Legal reserve		377,249		208,427		399,121		220,511
Voluntary reserve		3,190,000		2,030,000		3,374,947		2,147,694
Retained earnings before appropriations (Net income of (Won)1,597,156 million for the nine months ended September 30, 2006 and (Won)1,688,221 million for the year ended December 31, 2005)		1,598,361		1,653,536		1,691,030		1,749,403

		5,165,610		3,891,963		5,465,098		4,117,608
Capital adjustments (Notes 3 and 10)		2,109,635		1,710,836		2,231,946		1,810,025

		11,389,810		9,717,364		12,050,159		10,280,749

	(Won)	13,248,583	(Won)	12,031,783	US$	14,016,698	US$	12,729,351

See accompanying notes to non-consolidated financial statements.

WOORI FINANCE HOLDINGS CO., LTD.

NON-CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005


	Korean won								Translation into U.S. dollars (Note 2)
	2006				2005				2006				2005
	Three months		Nine months		Three months		Nine months		Three months		Nine months		Three months		Nine months
	(In millions, except for income per share data)								(In thousands, except for income per share data)
OPERATING REVENUE
Gain on valuation using the equity method of accounting (Notes 3 and 16)	(Won)	497,023	(Won)	1,567,621	(Won)	709,008	(Won)	1,625,248	US$	525,839	US$	1,658,507	US$	750,114	US$	1,719,475
Interest income (Note 17)		5,190		12,955		4,384		12,266		5,491		13,706		4,637		12,977
Reversal of allowance for doubtful accounts		75		125		87		151		79		133		92		160

		502,288		1,580,701		713,479		1,637,665		531,409		1,672,346		754,843		1,732,612

OPERATING EXPENSES
Loss on valuation using the equity method of accounting (Notes 3 and 16)		—		106		391		27,433		—		112		413		29,024
Interest expense		26,237		80,965		29,631		86,456		27,758		85,659		31,349		91,468
Loss on valuation of swap contracts		—		—		—		91		—		—		—		96
Loss on foreign currency transactions		—		—		—		1		—		—		—		1
Fees and commissions (Note 17)		854		5,791		2,756		5,417		904		6,127		2,916		5,731
General and administrative (Notes 14 and 17)		5,044		19,435		7,165		18,161		5,336		20,562		7,580		19,213

		32,135		106,297		39,943		137,559		33,998		112,460		42,258		145,533

OPERATING INCOME		470,153		1,474,404		673,536		1,500,106		497,411		1,559,886		712,585		1,587,079

NON-OPERATING INCOME (Note 2)		122,482		122,761		10		307		129,583		129,878		11		324

NON-OPERATING EXPENSES		—		9		367		379		—		9		388		401

INCOME BEFORE INCOME TAX		592,635		1,597,156		673,179		1,500,034		626,994		1,689,755		712,208		1,587,002

INCOME TAX EXPENSE (Note 12)		—		—		—		—		—		—		—		—

NET INCOME	(Won)	592,635	(Won)	1,597,156	(Won)	673,179	(Won)	1,500,034	US$	626,994	US$	1,689,755	US$	712,208	US$	1,587,002

(Continued)

WOORI FINANCE HOLDINGS CO., LTD.

NON-CONSOLIDATED STATEMENTS OF INCOME (CONTINUED)

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

Korean won

Translation into U.S. dollars (Note 2)

2006

2005

2006

2005

Three months

Nine months

Three months

Nine months

Three months

Nine months

Three months

Nine months

(In millions, except for income per common share data)

(In thousands, except for income per common share data)

BASIC ORDINARY INCOME PER COMMON SHARE (Note 18)

(Won)

735

(Won)

1,982

(Won)

835

(Won)

1,866

US$

0.78

US$

2.10

US$

0.88

US$

1.98

BASIC NET INCOME PER COMMON SHARE (Note 18)

(Won)

735

(Won)

1,982

(Won)

835

(Won)

1,866

US$

0.78

US$

2.10

US$

0.88

US$

1.98

DILUTED ORDINARY INCOME PER COMMON SHARE (Note 18)

(Won)

—

(Won)

—

(Won)

835

(Won)

1,861

US$

—

US$

—

US$

0.88

US$

1.97

DILUTED NET INCOME PER COMMON SHARE (Note 18)

(Won)

—

(Won)

—

(Won)

835

(Won)

1,861

US$

—

US$

—

US$

0.88

US$

1.97

See accompanying notes to non-consolidated financial statements.

WOORI FINANCE HOLDINGS CO., LTD.

NON-CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005


	Korean won												Translation into U.S. dollars (Note 2)
	2006						2005						2006						2005
	Three months			Nine months			Three months			Nine months			Three months			Nine months			Three months			Nine months
	(In millions)												(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	(Won)	592,635		(Won)	1,597,156		(Won)	673,179		(Won)	1,500,034		US$	626,994		US$	1,689,755		US$	712,208		US$	1,587,002

Adjustments to reconcile net income to net cash used in operating activities:
Loss on valuation using the equity method of accounting		—			106			391			27,433			—			112			413			29,024
Interest expense (amortization of discounts on debentures)		364			1,086			442			1,527			385			1,149			468			1,616
Loss on valuation of swap contracts		—			—			—			91			—			—			—			96
Provision for severance benefits		139			515			57			618			147			545			60			654
Depreciation		11			63			23			92			12			67			24			97
Amortization on intangible assets		5			16			5			15			5			17			5			16
Other non-operating expenses		—			1			—			—			—			1			—			—
Gain on valuation using the equity method of accounting		(497,023	)		(1,567,621	)		(709,008	)		(1,625,248	)		(525,839	)		(1,658,507	)		(750,114	)		(1,719,475	)
Accrued interest on loans		—			—			(567	)		(1,683	)		—			—			(600	)		(1,781	)
Reversal of allowance for doubtful accounts		(75	)		(125	)		(87	)		(151	)		(79	)		(133	)		(92	)		(160	)
Gain on disposal of tangible assets		—			(19	)		—			—			—			(20	)		—			—
Other non-operating income		(122,478	)		(122,478	)		—			(39	)		(129,579	)		(129,579	)		—			(41	)

		(619,057	)		(1,688,456	)		(708,744	)		(1,597,345	)		(654,948	)		(1,786,348	)		(749,836	)		(1,689,954	)

(Continued)

WOORI FINANCE HOLDINGS CO., LTD.

NON-CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005


	Korean won												Translation into U.S. dollars (Note 2)
	2006						2005						2006						2005
	Three months			Nine months			Three months			Nine months			Three months			Nine months			Three months			Nine months
	(In millions)												(In thousands)
Changes in operating assets and liabilities:
Decrease in other receivables	(Won)	—		(Won)	—		(Won)	—		(Won)	451		US$	—		US$	—		US$	—		US$	477
Decrease (increase) in accrued income		(219	)		11			(155	)		(73	)		(232	)		12			(164	)		(78	)
Decrease (increase) in advanced payments		14			(4	)		9			82			15			(4	)		10			87
Decrease (increase) in prepaid expenses		164			(26	)		116			546			174			(28	)		123			578
Decrease (increase) in prepaid income tax		—			1,246			(49	)		5,243			—			1,318			(52	)		5,547
Payment of severance benefits		(91	)		(360	)		(104	)		(118	)		(96	)		(381	)		(110	)		(125	)
Decrease in retirement insurance		61			305			75			88			65			323			79			93
Increase (decrease) in other payables		(235	)		(578	)		(790	)		159			(249	)		(612	)		(836	)		168
Increase (decrease) in accrued expenses		(2,122	)		(3,604	)		283			(1,572	)		(2,245	)		(3,813	)		299			(1,663	)
Decrease in withholdings		(99	)		(267	)		(277	)		(214	)		(105	)		(282	)		(293	)		(226	)
Dividend income		—			767,091			1,486			72,541			—			811,565			1,572			76,747

		(2,527	)		763,814			594			77,133			(2,673	)		808,098			628			81,605

Net cash provided by (used in) operating activities		(28,949	)		672,514			(34,971	)		(20,178	)		(30,627	)		711,505			(37,000	)		(21,347	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital reduction of a subsidiary		—			—			21,938			175,938			—			—			23,210			186,138
Disposition of investment securities accounted for using the equity method of accounting		—			54,000			—			—			—			57,131			—			—
Repayment of available-for-sale securities		80,000			80,000			—			—			84,638			84,638			—			—
Collection of loans		15,000			25,000			18,000			31,950			15,869			26,450			19,044			33,802
Disposition of vehicles		—			19			—			—			—			20			—			—
Refund of guarantee deposits		—			25			—			—			—			26			—			—

(Continued)

WOORI FINANCE HOLDINGS CO., LTD.

NON-CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005


	Korean won												Translation into U.S. dollars (Note 2)
	2006						2005						2006						2005
	Three months			Nine months			Three months			Nine months			Three months			Nine months			Three months			Nine months
	(In millions)												(In thousands)
Acquisition of investment securities accounted for using the equity method accounting	(Won)	—		(Won)	—		(Won)	—		(Won)	(84,141	)	US$	—		US$	—		US$	—		US$	(89,019	)
Acquisition of available-for-sale securities		(30,000	)		(80,000	)		—			—			(31,739	)		(84,638	)		—			—
Acquisition of furniture and equipment		(6	)		(12	)		—			(1	)		(6	)		(13	)		—			(1	)
Acquisition of leasehold improvement		(1	)		(14	)		—			—			(1	)		(15	)		—			—
Acquisition of industrial property rights		(2	)		(16	)		(1	)		(1	)		(2	)		(17	)		(1	)		(1	)

Net cash provided by investing activities		64,991			79,002			39,937			123,745			68,759			83,582			42,253			130,919

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debentures in local currency		—			—			349,418			598,690			—			—			369,676			633,400
Repayment of borrowings		—			—			—			(120,000	)		—			—			—			(126,957	)
Repayment of debentures in local currency		(300,000	)		(450,000	)		(100,000	)		(100,000	)		(317,393	)		(476,090	)		(105,797	)		(105,797	)
Cost on issuance of new shares		—			—			—			(709	)		—			—			—			(750	)
Payment of dividends		—			(322,405	)		—			(119,468	)		—			(341,097	)		—			(126,395	)

Net cash provided by (used in) financing activities		(300,000	)		(772,405	)		249,418			258,513			(317,393	)		(817,187	)		263,879			273,501

NET INCREASE (DECREASE) IN CASH AND BANK DEPOSITS		(263,958	)		(20,889	)		254,384			362,080			(279,261	)		(22,100	)		269,132			383,073

CASH AND BANK DEPOSITS, BEGINNING OF THE PERIOD		347,141			104,072			163,795			56,099			367,267			110,106			173,292			59,351

CASH AND BANK DEPOSITS, END OF THE PERIOD	(Won)	83,183		(Won)	83,183		(Won)	418,179		(Won)	418,179		US$	88,006		US$	88,006		US$	442,424		US$	442,424

See accompanying notes to non-consolidated financial statements.

WOORI FINANCE HOLDINGS CO., LTD.

NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

1.	GENERAL

(1)	Woori Finance Holdings Co., Ltd.

Woori Finance Holdings Co., Ltd. (the “Company”) was incorporated on March 27, 2001, to engage in the business of managing the following five financial institutions; Woori Bank, Kyongnam Bank, Kwangju Bank, Woori Credit Card Co., Ltd. (formerly Peace Bank of Korea and merged into Woori Bank on March 31, 2004) and Woori Investment Bank (merged into Woori Bank on July 31, 2003), whose shares were contributed to the Company by the Korea Deposit Insurance Corporation (the “KDIC”) in accordance with the provisions of the Financial Holding Company Act. As a result of its functional restructuring, the Company owns 9 subsidiaries and 15 2nd-tier subsidiaries as of September 30, 2006.

Upon incorporation, the Company’s stock amounted to (Won)3,637,293 million, consisting of 727,458,609 common shares ((Won)5,000 per share) issued and outstanding. As a result of several capital increases, exercise of warrants and conversion rights since incorporation, as of September 30, 2006, the Company’s stock amounted to (Won)4,030,077 million, consisting of 806,015,340 common shares issued and outstanding of which the KDIC owns 628,458,609 shares (77.97%).

On June 24, 2002, the Company listed its common shares on the Korea Exchange. On September 29, 2003, the Company was registered with the Securities and Exchange Commission in the United States of America and listed its American Depositary Shares on the New York Stock Exchange.

(2)	The structure of the Company and its subsidiaries as of September 30, 2006 and December 31, 2005 is as follows:


		2006		2005
Parent companies	Subsidiaries	Number of shares owned	Percentage of owner- ship (%)	Number of shares owned	Percentage of owner- ship (%)	Financial statements as of
Woori Finance Holdings Co., Ltd.	Woori Bank	635,956,580	100.0	635,956,580	100.0	Sep. 30
	Kyongnam Bank	51,800,000	99.9	51,800,000	99.9	Sep. 30
	Kwangju Bank	44,080,000	99.9	44,080,000	99.9	Sep. 30
”	Woori Finance Information System Co., Ltd.	900,000	100.0	900,000	100.0	Sep. 30
”	Woori F&I Co., Ltd.	2,000,000	100.0	2,000,000	100.0	Sep. 30
”	Woori Third Asset Securitization Specialty Co., Ltd.	2,000	100.0	2,000	100.0	Sep. 30
”	Woori Investment Securities Co., Ltd. (*1)	46,324,981	35.0	46,324,981	34.4	Sep. 30
”	Woori Credit Suisse Asset Management Co., Ltd. (*2)	4,663,400	70.0	6,662,000	100.0	Sep. 30
”	Woori Private Equity Co., Ltd.	2,000,000	100.0	2,000,000	100.0	Sep. 30
Woori Bank	Woori Credit Information Co., Ltd.	1,008,000	100.0	1,008,000	100.0	Sep. 30(*3	)
”	Woori America Bank	10,500,000	100.0	10,500,000	100.0	Sep. 30(*3	)
”	PT. Bank Woori Indonesia	1,618	95.2	1,618	95.2	Sep. 30(*3	)
”	Korea BTL Infrastructure Fund (*4)	2,000,000	100.0	—	—	Sep. 30(*3	)
”	Woori Private Equity Fund (*5)	735	27.6	—	—	Sep. 30
”	Woori Global Markets Asia Limited (*6)	39,000,000	100.0	—	—	Sep. 30(*3	)
Kyongnam Bank	Woori Private Equity Fund (*5)	154	5.8	—	—	Sep. 30


		2006		2005
Parent companies	Subsidiaries	Number of shares owned	Percentage of owner- ship (%)	Number of shares owned	Percentage of owner- ship (%)	Financial statements as of
Kwangju Bank	Woori Private Equity Fund (*5)	154	5.8	—	—	Sep. 30
Woori F&I Co., Ltd.	Woori SB Asset Management Co., Ltd. (*7)	408,000	51.0	800,000	100.0	Sep. 30
”	Woori Private Equity Fund (*5)	89	3.3	—	—	Sep. 30
Woori Investment Securities Co., Ltd.	Woori Futures Co., Ltd.	5,000,000	100.0	5,000,000	100.0	Sep. 30
”	Woori Investment Securities Int’l Ltd.	5,788,000	100.0	5,788,000	100.0	Sep. 30(*3	)
”	Woori Investment Securities (H.K.) Ltd.	22,500,000	100.0	22,500,000	100.0	Sep. 30(*3	)
”	Woori Investment Securities America, Inc.	300	100.0	300	100.0	Sep. 30(*3	)
”	LG Investment Holding B.V. (Amsterdam) GG	1,642,398,242	100.0	1,642,398,242	100.0	Sep. 30 (*3	)
”	High Technology Venture Investment	1,500,000	42.9	1,500,000	42.9	Sep. 30(*3	)
”	Global Technology Investment	1,500,000	50.0	1,500,000	50.0	Sep. 30(*3	)
”	MARS First Private Equity Fund (*8)	9,000,000	52.9	—	—	Sep. 30(*3	)
”	Woori Private Equity Fund (*5)	392	14.7	—	—	Sep. 30
Woori Private Equity Co., Ltd.	Woori Private Equity Fund (*5)	89	3.3	—	—	Sep. 30

(*1)

On January 24, 2006, Woori Investment Securities Co., Ltd. (“Woori Investment Securities”) reduced its treasury stock (1,000,000 shares of preferred stock and 2,000,000 shares of common stock) by extinguishing against retained earnings. As a result, the Company’s ownership interest in Woori Investment Securities increased from 34.4% to 35.0%.

(*2)

On May 30, 2006, the Company sold 1,998,600 shares (30%) of Woori Asset Management Co., Ltd. (“Woori Asset Management”) and Woori Asset Management changed its name to Woori Credit Suisse Asset Management Co., Ltd. (“Woori CS”). As a result, (Won)34,604 million of gain on the disposal of the ownership interest in Woori Asset Management was recorded in capital adjustment.

(*3)

The financial statements as of September 30, 2006 are not reviewed. In order to ensure the credibility of the financial statements of those subsidiaries, the Company performed certain procedures in accordance with Practice Statements in Financial Reporting 2002-7 ‘Investees’ financial statements applied using the equity method of accounting’.

(*4)	On June 16, 2006, Woori Bank acquired 2,000,000 shares (100%) of Korea BTL Infrastructure Fund.

(*5)

Woori Private Equity Fund (“Woori PEF”), established on June 23, 2006, has been engaged in investments by private funding and Woori Private Equity Co., Ltd. (“Woori PE”) is a general partner. As of September 30, 2006, Woori PEF’s contributed capital is (Won)2,663 million out of authorized capital of (Won)344,000 million. In addition, Woori PE, Woori Bank, Woori Investment Securities, Kyongnam Bank, Kwangju Bank and Woori F&I invested (Won)1,613 million (60.6%) in Woori PEF as limited partners as of September 30, 2006.

(*6)	On August 23, 2006, Woori Bank established Woori Global Markets Asia Limited (common stock amounted to HKD 39,000,000) in Hong Kong as a subsidiary.

(*7)	On February 23, 2006, Woori F&I Co., Ltd. sold 392,000 shares (49%) of Woori CA Asset Management Co., Ltd. (“Woori CA”) and Woori CA changed its name to Woori SB Asset Management Co., Ltd. (“Woori SB”).

(*8)	On September 19, 2006, Woori Investment Securities acquired 52.9% ownership of MARS First Private Equity Fund.

(3)	General information pertaining to the Company’s subsidiaries as of September 30, 2006 does not differ materially from that as of December 31, 2005.

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2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Financial Statement Presentation

The Company maintains its official accounting records in Korean won and prepares statutory non-consolidated financial statements in the Korean language (Hangul) in conformity with the accounting principles generally accepted in the Republic of Korea. Certain accounting principles applied by the Company that conform with financial accounting standards and accounting principles in the Republic of Korea may not conform with generally accepted accounting principles in other countries. Accordingly, these financial statements are intended for use by those who are informed about Korean accounting principles and practices. The accompanying financial statements have been restructured and translated into English with certain expanded descriptions from the Korean language financial statements. Certain information included in the Korean language financial statements, but not required for a fair presentation of the Company’s financial position, results of operations or cash flows, is not presented in the accompanying financial statements.

The accompanying financial statements are stated in Korean Won, the currency of the country in which the Company is incorporated and operates. The translation of Korean Won amounts into U.S. dollar amounts is included solely for the convenience of readers outside of the Republic of Korea and has been made at the rate of (Won)945.20 to US$ 1.00 at September 30, 2006, the Base Rate announced by Seoul Money Brokerage Service, Ltd. Such translations should not be construed as representations that the Korean Won amounts could be converted into U.S. dollars at that or any other rate.

The accounting policies, which have been adopted in preparing the accompanying non-consolidated financial statements, do not differ materially from those used in preparing the non-consolidated financial statements for the year ended December 31, 2005 except for the following:

a.	Adoption of new Statements of Korea Accounting Standards (“SKAS”)

Korea Accounting Standards Board (“KASB”) has been issuing new accounting standards that replace the existing Korea Financial Accounting Standards (“KFAS”) and has issued SKASs No.1 to No.22. The Company had adopted SKASs No.1 to No.17 (except for No.11) before the beginning of 2006 and SKASs

No.18 ‘Interest in Joint Ventures’, No.19 ‘Lease’ and No.20 ‘Related Party Disclosure’ on or after January 1, 2006, and will adopt SKASs No.21 to No.22 after December 31, 2006.

Significant SKASs newly adopted are summarized below.

1) Related Party Disclosures – SKAS No.20

The Company adopted SKAS No.20 – “Related Party Disclosures” in 2006. This statement prescribes the disclosures necessary to draw attention to the possibility that the financial position and profit or loss of an entity may have been affected by the existence of related parties and by transactions and outstanding balances with such parties. It requires disclosing the nature of relationships between parents and subsidiaries, even if there were no transactions between those related parties, and compensation of key management personnel. In addition, transactions between related parties are stated separately for each related party and type of transactions. The adoption of this standard has no effect on the Company’s net assets and net income for the three months and nine months ended September 30, 2006 and for the year ended December 31, 2005.

b.	Prior Period Adjustments

The Company has not recorded a gain on valuation using the equity method on prior period’s income statement relating to unrealized gains for available-for-sale securities and others in capital adjustment which subsidiaries had recorded at acquisition date. Those capital adjustments should have been reflected as a gain on valuation using the equity method at a time when subsidiaries disposed the related available-for-sale securities and others in accordance with a Q&A from the Financial Supervisory Service. The Company corrected (Won)115 billion of net unrealized gains for available-for-sale securities and others in capital adjustment to net income in 2006. The effects on prior periods of (Won)122 billion are reported in the non-operating income and the current year effect of (Won)7 billion is deducted from gain on valuation using the equity method of accounting in the income statement for the nine months ended September 30, 2006.

- 3 -

3.	INVESTMENT SECURITIES ACCOUNTED FOR USING THE EQUITY METHOD OF ACCOUNTING

(1)	Changes in investment securities accounted for using the equity method of accounting for the nine months ended September 30, 2006 are as follows (Korean won in millions):


	January 1, 2006		Gain (loss) on valuation using the equity method			Capital adjust- ments		Retained earnings			Acquisition / Disposal			Dividends			September 30, 2006
Woori Bank	(Won)	9,695,213	(Won)	1,243,673		(Won)	449,081	(Won)	(1,104	)	(Won)	—		(Won)	(592,710	)	(Won)	10,794,153
Kyongnam Bank		694,275		139,784			9,243		—			—			(66,304	)		776,998
Kwangju Bank		561,330		98,238			3,962		—			—			(40,950	)		622,580
Woori Finance Information System		11,903		7,017			—		—			—			(4,500	)		14,420
Woori F&I		114,017		19,846			4,645		—			—			(29,501	)		109,007
Woori Third Asset Securitization Specialty		—		(106	)		13,935		—			—	(*1)		(108	)		13,721
Woori Investment Securities		604,543		49,931			5,039		—			—			(27,795	)		631,718
Woori CS		60,600		9,131			768		—			(19,396	)		(5,330	)		45,773
Woori PE		9,797		1			—		—			—			—			9,798

	(Won)	11,751,678	(Won)	1,567,515		(Won)	486,673	(Won)	(1,104	)	(Won)	(19,396	)	(Won)	(767,198	)	(Won)	13,018,168

(*1)	Adjustment on dividend receivables

(2)	The reconciliation between the acquisition costs and the book value as of December 31, 2005 is summarized as follows (Korean won in millions):


	Acquisition cost		Gain (loss) on valuation using the equity method			Capital adjustments			Retained earnings			Other increase (decrease)			Dec. 31, 2005
Woori Bank (*1)	(Won)	3,207,893	(Won)	3,966,728		(Won)	1,466,762		(Won)	(250,043	)	(Won)	1,303,873		(Won)	9,695,213
Kyongnam Bank		259,000		469,775			33,014			(11,466	)		(56,048	)		694,275
Kwangju Bank		170,403		366,509			8,162			(3,777	)		20,033			561,330
Woori Finance Information System		5,244		6,858			5			(204	)		—			11,903
Woori F&I		10,094		101,932			11,073			(60	)		(9,022	)		114,017
Woori Third Asset Securitization Specialty		10		21,860			47,680			(9,890	)		(59,660	)		—
Woori Investment Securities (*2)		507,863		43,624			146,716			(2,577	)		(91,083	)		604,543
Woori CS (*3)		87,570		9,827			(2,558	)		—			(34,239	)		60,600
Woori PE		10,000		(203	)		—			—			—			9,797

	(Won)	4,258,077	(Won)	4,986,910		(Won)	1,710,854		(Won)	(278,017	)	(Won)	1,073,854		(Won)	11,751,678

(*1)	Included Woori Credit Card Co., Ltd. and Woori Investment Bank Co., Ltd.

(*2)	Included Woori Securities Co., Ltd.

(*3)	Included Woori Investment Trust Management Co., Ltd.

- 4 -

(3)	The details of other increase or decrease from the acquisition date to December 31, 2005 are as follows (Korean won in millions):


	Capital reduction			Acquisition		Dividends			Total
Woori Bank (*1)	(Won)	—		(Won)	2,517,418	(Won)	(1,213,545	)	(Won)	1,303,873
Kyongnam Bank		—			—		(56,048	)		(56,048	)
Kwangju Bank		—			57,044		(37,011	)		20,033
Woori F&I		—			—		(9,022	)		(9,022	)
Woori Third Asset Securitization Specialty		—			—		(59,660	)		(59,660	)
Woori Investment Securities (*2)		(154,000	)		85,121		(22,204	)		(91,083	)
Woori CS (*3)		(21,939	)		—		(12,300	)		(34,239	)

	(Won)	(175,939	)	(Won)	2,659,583	(Won)	(1,409,790	)	(Won)	1,073,854

(*1)	Included Woori Credit Card Co., Ltd. and Woori Investment Bank Co., Ltd.

(*2)	Included Woori Securities Co., Ltd.

(*3)	Included Woori Investment Trust Management Co., Ltd.

(4)	The details of unrealized inter-company income or loss for the nine months ended September 30, 2006 are as follows (Korean won in millions):


	Jan. 1, 2006			Realized			Incurred		Sep. 30, 2006
Woori Bank	(Won)	7,020		(Won)	(6,515	)	(Won)	5,723	(Won)	6,228
Kyongnam Bank		(40	)		(14	)		—		(54	)
Kwangju Bank		(5,456	)		2,708			—		(2,748	)
Woori Finance Information System		327			649			—		976
Woori F&I		(234	)		(125	)		—		(359	)
Woori Third Asset Securitization Specialty		(139	)		—			—		(139	)

	(Won)	1,478		(Won)	(3,297	)	(Won)	5,723	(Won)	3,904

(5)	The details of changes in the difference between the acquisition cost and the proportionate net asset value on the acquisition date for the nine months ended September 30, 2006 are as follows (Korean won in millions):


	Jan. 1, 2006			Amortization			Sep. 30, 2006
Woori F&I	(Won)	75		(Won)	4		(Won)	71
Woori Investment Securities		(2,735	)		(155	)		(2,580	)

	(Won)	(2,660	)	(Won)	(151	)	(Won)	(2,509	)

(6)	The market value of Woori Investment Securities is (Won)933,448 million ((Won)20,150 per share) as of September 30, 2006.

- 5 -

LOANS

(1)	Loans as of September 30, 2006 and December 31, 2005 are as follows (Korean won in millions):


	Issuance date	Maturity date	Annual interest rate (%)	2006			2005
Woori Finance Information System (*1)	Oct. 31, 2002	Oct. 31, 2006	6.3	(Won)	30,000		(Won)	30,000

Woori F&I (*2)	Mar. 25, 2003	Mar. 25, 2007	7.3		32,000			57,000
”	Jul. 7, 2003	Jul. 7, 2007	7.3		23,000			23,000

					55,000			80,000

Total					85,000			110,000

Allowance for possible loan losses					(425	)		(550	)

				(Won)	84,575		(Won)	109,450

(*1)	Loans granted to finance the transaction between Woori Bank and Woori Finance Information System, to which Woori Bank transferred its IT equipment.

(*2)	Loans granted to finance the acquisitions of the securitization debentures and the investment equity securities related to the joint venture special entities of Woori F&I.

(2)	Allowances for possible loan losses as of September 30, 2006 and December 31, 2005 are as follows (Korean won in millions):


Loans:	2006		2005
Woori F&I	(Won)	275	(Won)	400
Woori Finance Information System		150		150

	(Won)	425	(Won)	550

5.	FIXED ASSETS AND INTANGIBLE ASSETS

(1)	Changes in fixed assets for the nine months ended September 30, 2006 and the year ended December 31, 2005 are as follows (Korean won in millions):


	Jan. 1, 2006		Acquisition		Disposition		Depreciation		Sep. 30, 2006
Furniture and equipment	(Won)	75	(Won)	12	(Won)	—	(Won)	41	(Won)	46
Leasehold improvements		45		14		—		22		37

	(Won)	120	(Won)	26	(Won)	—	(Won)	63	(Won)	83


	Jan. 1, 2005		Acquisition		Disposition		Depreciation		Dec. 31, 2005
Vehicles	(Won)	7	(Won)	—	(Won)	—	(Won)	7	(Won)	—
Furniture and equipment		142		9		1		75		75
Leasehold improvements		79		1		—		35		45

	(Won)	228	(Won)	10	(Won)	1	(Won)	117	(Won)	120

- 6 -

(2)	Changes in intangible assets for the nine months ended September 30, 2006 and the year ended December 31, 2005 are as follows (Korean won in millions):


	Jan. 1, 2006		Acquisition		Amortization		Sep. 30, 2006
Software	(Won)	7	(Won)	—	(Won)	3	(Won)	4
Industrial property rights		28		16		13		31

	(Won)	35	(Won)	16	(Won)	16	(Won)	35


	Jan. 1, 2005		Acquisition		Amortization		Dec. 31, 2005
Software	(Won)	14	(Won)	—	(Won)	7	(Won)	7
Industrial property rights		40		2		14		28

	(Won)	54	(Won)	2	(Won)	21	(Won)	35

As of September 30, 2006, accumulated amortization of software and industrial property rights amount to (Won)30 million and (Won)53 million, respectively.

6.	OTHER ASSETS

Other assets as of September 30, 2006 and December 31, 2005 are as follows (Korean won in millions):


	2006		2005
Guarantee deposits (Note 17)	(Won)	4,178	(Won)	4,204

Other receivables (Notes 11 and 17)		3,347		6,090
Dividend receivables		53,869		53,761
Accrued income (Note 17)		918		929
Advanced payments		4		—
Prepaid expenses		223		198
Prepaid income tax		—		1,246

	(Won)	62,539	(Won)	66,428

7.	DEBENTURES

Debentures in local currency as of September 30, 2006 and December 31, 2005 are as follows (Korean won in millions):


	Issuance date	Annual interest rate (%)	Maturity	2006			2005
	Issuance date	Annual interest rate (%)	Maturity	2006			2005
The 8th bonds	Dec. 26, 2002	6.05	Dec. 26, 2007	(Won)	200,000		(Won)	200,000
The 9th bonds	Sep. 19, 2003	4.64	Sep. 19, 2006		—			300,000
The 10th bonds	Dec. 16, 2003	5.92	Dec. 16, 2008		300,000			300,000
The 11th bonds	Jun. 18, 2004	5.05	Jun. 18, 2009		370,000			370,000
The 12th bonds	Jul. 26, 2004	4.84	Jul. 26, 2009		230,000			230,000
The 14th bonds	Nov. 23, 2004	3.49	Nov. 23, 2007		300,000			300,000
The 15th bonds	Jun. 21, 2005	4.31	Jun. 21, 2010		250,000			250,000
The 16th bonds	Sep. 28, 2005	5.10	Sep. 28, 2008		200,000			200,000
The 17th bonds	Sep. 14, 2005	4.15	Apr. 14, 2006		—			150,000

					1,850,000			2,300,000
Less: discounts					(2,711	)		(3,797	)

				(Won)	1,847,289		(Won)	2,296,203

- 7 -

8.	OTHER LIABILITIES

Other liabilities as of September 30, 2006 and December 31, 2005 are as follows (Korean won in millions):


	2006			2005
Accrued severance benefits (Note 9)	(Won)	2,135		(Won)	1,980
Deposits with employee retirement insurance trust (Note 9)		(1,482	)		(1,788	)
Other payables (Note 17)		206			784
Accrued expenses (Note 11)		10,458			16,806
Withholdings		167			434

	(Won)	11,484		(Won)	18,216

9.	ACCRUED SEVERANCE BENEFITS

Employees and directors with more than one year of service are entitled to receive a lump-sum payment upon termination of their service with the Company. The accrued severance benefits that would be payable assuming all eligible employees and directors were to terminate amounted to (Won)2,135 million and (Won)1,980 million as of September 30, 2006 and December 31, 2005, respectively.

The details of changes in the accrued severance benefits for the nine months ended September 30, 2006 and the year ended December 31, 2005 are as follows (Korean won in millions):


	2006			2005
Beginning balance	(Won)	1,980		(Won)	1,230
Provision for severance benefits		515			967
Payment for severance benefits		(360	)		(217	)

Ending balance	(Won)	2,135		(Won)	1,980

The Company has purchased an employee retirement trust and made deposits at Woori Bank. As of September 30, 2006 and December 31, 2005, the deposits, amounting to (Won)1,482 million and (Won)1,788 million, respectively, are presented as a deduction from accrued severance benefits.

10.

SHAREHOLDERS’ EQUITY

(1)	The authorized shares and issued shares of common stock as of September 30, 2006 and December 31, 2005 are as follows:


	2006		2005
Authorized shares of common stock		2,400,000,000		2,400,000,000
Par value	(Won)	5,000	(Won)	5,000
Issued shares of common stock		806,015,340		806,015,340

- 8 -

(2)	The changes in the capital stock of the Company for the period from its incorporation to September 30, 2006 are as follows (Korean won in millions):


Date	Description	Number of shares issued	Capital stock		Paid-in capital in excess of par value
2001.03.27	Establishment	727,458,609	(Won)	3,637,293	(Won)	—
2002.06.12	Issuance of new shares	36,000,000		180,000		58,645
In 2002	Exercise of warrants	4,356,188		21,781		—

2002.12.31		767,814,797		3,839,074		58,645

In 2003	Exercise of warrants	7,690,113		38,451		(574	)

2003.12.31		775,504,910		3,877,525		58,071

In 2004	Issuance of new shares	8,571,262		42,856		14,126
	Exercise of convertible bonds	12,379,386		61,897		12,118

2004.12.31		796,455,558		3,982,278		84,315

In 2005	Exercise of convertible bonds	9,559,782		47,799		24,710
	Acquisition of common shares of Woori CS	—		—		(24,537	)

2005. 12.31		806,015,340		4,030,077		84,488

2006. 09.30		806,015,340	(Won)	4,030,077	(Won)	84,488

(3)	Pursuant to Article 53 of the Financial Holding Company Act, legal reserves are appropriated at no less than one tenth of net income until reaching an amount equal to the Company’s contributed capital, whenever dividends are declared.

(4)	The changes in retained earnings from December 31, 2005 to September 30, 2006 are as follows (Korean won in millions):


	2006
Balance - December 31, 2005			(Won)	1,653,536

Appropriations:
Dividend	(322,405	)
Legal reserve	(168,822	)
Voluntary reserve	(1,160,000	)		(1,651,227	)
Decrease by using the equity method of accounting				(1,104	)
Net income for the nine months ended September 30, 2006				1,597,156

Balance - September 30, 2006			(Won)	1,598,361

(5)	As of September 30, 2006 and December 31, 2005, the Company held 2,554 shares and 2,550 shares of treasury stock, respectively, amounting to (Won)18 million.

11.

STOCK OPTIONS

(1)

On December 4, 2002, the Company granted stock options to 62 directors of the Company and its subsidiaries. In 2005, the exercise price of 60 percent of the total number of stock options granted was determined at (Won)11,921 based on the increase in the Korean banking industry stock index (Type A), and for the remaining 40 percent of the total number of stock options granted, of which the exercise price is (Won)6,800 per share and the number of stock options to be dependent by the Company’s management performance target levels; non-performing loans ratio, capital adequacy ratio and net income to total asset ratio by 15%, 15% and 10%, respectively (Type B) was finally decided. In addition, the Company made a resolution that the stock-based compensation will be settled by paying cash instead of issuing equity instrument. In connection with this, the Company revalued stock based compensation and recorded (Won)4,168 million of the stock-based payment as liabilities as of September 30, 2006.

- 9 -

(2)	The summary of stock-based compensation granted as of September 30, 2006 is as follows:


	Type A		Type B
Settlement		Cash settlement		Cash settlement
Exercise price	(Won)	11,921	(Won)	6,800
Exercisable period		During a three-year period beginning after December 4, 2005
Initial granted number of rights		936,000 shares		624,000 shares
Cancelled number of rights		216,000 shares		204,000 shares
Exercised number of rights		389,000 shares		275,750 shares
Exercisable number of rights		331,000 shares		144,250 shares

Value per right	(Won)	7,216	(Won)	12,337
Stock-based compensation liabilities	(Won)	2,388 million	(Won)	1,780 million

(3)	Each subsidiary is responsible for absorbing the respective stock-based compensation for its management. The subsidiaries recorded the related cost as other payables amounting to (Won)3,346 million and the Company recorded the same amount as other receivables.

12.

INCOME TAX EXPENSE

(1)	Differences between financial accounting income and taxable income for the nine months ended September 30, 2006 and 2005 are as follows (Korean won in millions):


	2006				2005
Income before income tax		(Won)	1,597,156			(Won)	1,500,034

Non-temporary differences:
Addition:
Investment securities	485,905				117,458
Stock compensation	1,010				—
Entertainment expense in excess of tax limit	325				—
Other	63				22,209

	487,303				139,667

Deduction:
Dividend income	708,688				123,796
Investment securities	1,104				—

	707,792		(222,489	)	123,796		15,871

Temporary differences:
Addition:
Long-term other receivables-prior year	2,743				—
Unsettled expense	1,458				1,394
Other	935				100

	5,136				1,494

Deduction:
Long-term accrued expenses	3,769				3,498
Investment securities	1,386,837				1,559,402
Other	3,805				34,785

	1,394,411		(1,389,275	)	1,597,685		(1,596,191	)

Taxable income before donation adjustment			(14,608	)			(80,286	)
Donation expense in excess of tax limit			9				—

Taxable income (tax loss carry forward)		(Won)	(14,599	)		(Won)	(80,286	)

- 10 -

(2)	The changes in cumulative temporary differences and tax loss carry-forwards for the nine months ended September 30, 2006 and 2005 are as follows (Korean won in millions):


2006	Jan. 1, 2006			Decrease			Increase			Sep. 30, 2006			Deferred tax assets (liabilities)
(Timing differences to be charged to income tax expense)
Investment securities	(Won)	(3,200,579	)	(Won)	12,970		(Won)	(921,799	)	(Won)	(4,135,348	)	(Won)	(*1)(38,055	)
Accrued expenses		2,770			2,770			1,458			1,458			401
Accrued severance benefits		1,188			306			604			1,486			409
Employee retirement deposits		(1,188	)		(306	)		(604	)		(1,486	)		(409	)
Depreciation		41			18			26			49			13
Accounts receivable		(6,090	)		(2,744	)		—			(3,346	)		(920	)
Dividend receivables		108			108			—			—			—
Long-term accrued expenses		7,937			3,769			—			4,168			1,146

	(Won)	(3,195,813	)	(Won)	16,891		(Won)	(920,315	)	(Won)	(4,133,019	)	(Won)	(37,415	)

(Timing differences to be charged to equity)
Capital adjustments due to the equity method of accounting	(Won)	(1,710,854	)	(Won)	768		(Won)	(485,905	)	(Won)	(2,197,527	)	(Won)	(*1)(36,478	)
Gain on disposal of investments using the equity method		—			—			34,604			34,604			9,516

	(Won)	(1,710,854	)	(Won)	768		(Won)	(451,301	)	(Won)	(2,162,923	)	(Won)	(26,962	)

Timing difference total	(Won)	(4,906,667	)	(Won)	17,660		(Won)	(1,371,617	)	(Won)	(6,295,942	)	(Won)	(64,377	)

Tax loss carry-forwards	(Won)	222,067		(Won)	—		(Won)	14,599		(Won)	236,666		(Won)	65,082

(*1)	Based on the assumption that the temporary differences in securities accounted for using the equity method of accounting would be realized by dividends.


2005	Jan. 1, 2005		Decrease		Increase		Sep. 30, 2005		Deferred tax assets (liabilities)
(Timing differences to be charged to income tax expense)
Investment securities	(Won)	(1,572,019)	(Won)	(2,670,653)	(Won)	(4,052,630)	(Won)	(2,953,996)	(Won)	(*2)(16,371	)
Currency swap liabilities		13,969		13,969		—		—		—
Accrued income		(296)		(296)		(294)		(294)		(81)
Accrued severance benefits		738		—		300		1,038		286
Depreciation		28		5		23		46		13
Accrued expenses		3,409		3,409		1,394		1,394		383
Accounts receivable		(1,842)		(92)		—		(1,750)		(481)
Employee retirement deposits		(738)		—		(300)		(1,038)		(286)
Long-term accrued interest payables		3,498		3,498		—		—		—
Long-term accrued interest income		(4,506)		—		(1,683)		(6,189)		(1,702)
Premiums on debentures		65		65		—		—		—
Adjustment of conversion rights		(53)		(53)		—		—		—

- 11 -


2005	Jan. 1, 2005			Decrease			Increase			Sep. 30, 2005			Deferred tax assets (liabilities)
Dividend receivables		48,873			15,724			—			33,149			9,116

	(Won)	(1,508,874	)	(Won)	(2,634,424	)	(Won)	(4,053,190	)	(Won)	(2,927,640	)	(Won)	(9,123	)

(Timing differences to be charged to equity)
Capital adjustments due to the equity method of accounting	(Won)	(1,063,204	)	(Won)	—		(Won)	(177,425	)	(Won)	(1,240,629	)	(Won)	(*2)(42,979	)
Gain on disposal of investments using the equity method		—			—			—			—			—

	(Won)	(1,063,204	)	(Won)	—		(Won)	(177,425	)	(Won)	(1,240,629	)	(Won)	(42,979	)

Timing difference total	(Won)	(2,572,078	)	(Won)	(2,634,424	)	(Won)	(4,230,615	)	(Won)	(4,168,269	)	(Won)	(52,102	)

Tax loss carry-forwards	(Won)	109,999		(Won)	—		(Won)	80,286		(Won)	190,285		(Won)	52,329

(*1)	Reflected the additional adjustments based on the reported tax returns.

(*2)	Based on the assumption that the temporary differences in securities accounted for using the equity method of accounting would be realized by dividends.

(3)	Remaining tax loss carry-forwards and their expirations are as follows (Korean won in millions):


Year incurred	*Amount(1)**		Utilized		Remaining		Expiration
2001	(Won)	25,288	(Won)	—	(Won)	25,288	Dec. 31, 2006
2002		13,899				13,899	Dec. 31, 2007
2003		48,398		—		48,398	Dec. 31, 2008
2004		22,414		—		22,414	Dec. 31, 2009
2005		112,068		—		112,068	Dec. 31, 2010
2006		14,599		—		14,599	Dec. 31, 2011

	(Won)	236,666	(Won)	—	(Won)	236,666

(*1)	Reflected the additional adjustments based on the reported tax returns.

(4)

As tax expenses of the Company exceed the tax addition on dividends, no income tax payments are expected under the Korean Corporate Tax Act unless the Company sells or liquidates subsidiaries or affiliates. In addition, as the Company does not expect income tax payments, no deferred tax assets or liabilities are recorded in the financial statements.

- 12 -

13.

STATEMENTS OF CASH FLOWS

The significant transactions without cash flows for the nine months ended September 30, 2006 and 2005 are as follows (Korean won in millions):


Transactions	2006			2005
Changes in capital adjustments due to the equity method of accounting	(Won)	486,673		(Won)	115,255
Changes in retained earnings due to the equity method of accounting		(1,104	)		(4,861	)
Capital increase due to conversion of convertible bonds in foreign currencies		—			72,468
Increase in dividend receivables		108			9,966
Stock options on each subsidiary		2,744			(92	)

14.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the three months and nine months ended September 30, 2006 and 2005 are summarized as follows (Korean won in millions):


	2006				2005
	Three months		Nine months		Three months		Nine months
Salaries, wages and bonuses	(Won)	2,596	(Won)	7,358	(Won)	2,138	(Won)	7,483
Provision for severance benefits (Note 9)		139		515		57		618
Fringe benefits		200		568		176		543
Rent		583		1,736		571		1,715
Entertainment		175		479		135		248
Depreciation (Note 5)		11		63		23		92
Amortization (Note 5)		5		16		5		15
Taxes and dues		14		53		18		56
Advertising		442		5,975		3,053		4,435
Travel		70		169		57		157
Telecommunications		23		68		13		54
Service fees		544		1,660		546		1,713
Suppliers		18		61		18		51
Others		224		714		355		981

	(Won)	5,044	(Won)	19,435	(Won)	7,165	(Won)	18,161

15.

FINANCIAL INFORMATION OF SUBSIDIARIES

(1)	The condensed balance sheets of subsidiaries as of September 30, 2006 are as follows (Korean won in millions):


	Total assets		Total liabilities		Total shareholders’ equity
Woori Bank	(Won)	159,065,144	(Won)	148,273,905	(Won)	10,791,239
Kyongnam Bank		15,317,955		14,540,903		777,052
Kwangju Bank		13,154,167		12,528,839		625,328
Woori Finance Information System		326,279		312,836		13,443
Woori F&I		235,690		122,914		112,776
Woori Third Asset Securitization Specialty		67,753		53,894		13,859
Woori Investment Securities		11,573,133		9,503,120		2,070,013
Woori CS		69,032		3,640		65,392
Woori PE		11,116		42		11,074

Total	(Won)	199,820,269	(Won)	185,340,093	(Won)	14,480,176

- 13 -

(2)	The condensed statements of operations of subsidiaries for the nine months ended September 30, 2006 are as follows (Korean won in millions):


	Operating revenue		Operating expenses		Operating income (loss)			Ordinary income (loss)			Net income (loss)
Woori Bank	(Won)	10,929,674	(Won)	9,383,848	(Won)	1,545,826		(Won)	1,669,137		(Won)	1,244,440
Kyongnam Bank		710,692		527,262		183,430			190,642			139,798
Kwangju Bank		561,960		441,053		120,907			122,858			89,735
Woori Finance Information System		179,891		170,921		8,970			8,981			6,367
Woori F&I		17,750		12,919		4,831			28,335			19,975
Woori Third Asset Securitization Specialty		9		115		(106	)		(106	)		(106	)
Woori Investment Securities		1,864,441		1,653,448		210,993			272,218			188,206
Woori CS		24,081		10,269		13,812			13,834			9,872
Woori PE		248		1,567		(1,319	)		(1,297	)		1

	(Won)	14,288,746	(Won)	12,201,402	(Won)	2,087,344		(Won)	2,304,602		(Won)	1,698,288

(3)	Significant liabilities and assets of the Company and its subsidiaries as of September 30, 2006 are summarized as follows (Korean won in millions):

Significant liabilities


	Deposits		Borrowings		Debentures		Total
Woori Finance Holdings	(Won)	—	(Won)	—	(Won)	1,847,289	(Won)	1,847,289
Woori Bank		97,705,056		12,980,779		22,970,280		133,665,115
Kyongnam Bank		10,687,163		2,346,950		894,072		13,928,185
Kwangju Bank		9,401,062		1,965,629		679,348		12,046,039
Woori Finance Information System		—		263,000		—		263,000
Woori F&I		—		113,900		—		113,900
Woori Investment Securities		2,664,905		3,201,038		149,846		6,015,789

Total	(Won)	120,458,186	(Won)	20,871,296	(Won)	26,549,835	(Won)	167,879,317

Significant assets


	Cash and due from banks		Securities		Loans		Total
Woori Finance Holdings	(Won)	83,183	(Won)	13,018,168	(Won)	84,575	(Won)	13,185,926
Woori Bank		6,921,666		26,799,096		113,261,222		146,981,984
Kyongnam Bank		606,341		4,132,250		9,817,130		14,555,721
Kwangju Bank		741,456		3,416,087		8,383,438		12,540,981
Woori Finance Information System		142,151		512		—		142,663
Woori F&I		38,423		88,033		91,699		218,155
Woori Third Asset Securitization Specialty		517		67,235		—		67,752
Woori Investment Securities		1,664,450		7,110,089		1,697,917		10,472,456
Woori CS		43,625		10,475		581		54,681
Woori PE		10,468		—		—		10,468

	(Won)	10,252,280	(Won)	54,641,945	(Won)	133,336,562	(Won)	198,230,787

- 14 -

(4)	Loans subject to allowance for possible loan losses, allowance for possible loan losses and percentage of allowance to loans of each subsidiary as of September 30, 2006 are summarized as follows (Korean won in millions):


	Loans subject to allowance for possible loan losses		Allowance		Percentage of allowance to loans (%)
Woori Bank	(Won)	114,668,841	(Won)	1,407,619	1.23
Kyongnam Bank		9,931,097		113,967	1.15
Kwangju Bank		8,470,574		87,136	1.03
Woori F&I		92,160		461	0.50
Woori Investment Securities		1,842,483		144,566	7.85
Woori CS		584		3	0.51

Total	(Won)	135,005,739	(Won)	1,753,752	1.30

16.

CONTRIBUTIONS TO NET INCOME BY SUBSIDIARIES

Contributions to net income of the Company by subsidiaries after elimination of unrealized inter-company incomes or losses for the nine months ended September 30, 2006 are as follows (Korean won in millions):


	2006			Ratio (%)
Woori Bank	(Won)	1,243,673		79.3

Kyongnam Bank		139,784		8.9
Kwangju Bank		98,238		6.3
Woori Finance Information System		7,017		0.4
Woori F&I		19,846		1.3
Woori Third Asset Securitization Specialty		(106	)	—
Woori Investment Securities		49,931		3.2
Woori CS		9,131		0.6
Woori PE		1		—

Gain on valuation using the equity method of accounting		1,567,515		100.0

Other income		135,840
Other expenses		106,199

Net income	(Won)	1,597,156

- 15 -

17.

TRANSACTIONS AND ACCOUNT BALANCES WITH RELATED PARTIES

(1)	Account balances with the subsidiaries as of September 30, 2006 and December 31, 2005 are as follows (Korean won in millions):


	2006		2005
<Assets>
Woori Bank	(Won)	61,033	(Won)	83,439	Cash and bank deposits
”		4,153		4,153	Guarantee deposits
”		2,595		4,305	Other receivables
”		252		102	Accrued income
Kyongnam Bank		11,198		10,321	Cash and bank deposits
”		13		10	Accrued income
Kwangju Bank		10,952		10,311	Cash and bank deposits
”		7		6	Accrued income
Woori Finance Information System		30,000		30,000	Loans
”		173		363	Other receivables
”		316		316	Accrued income
Woori F&I		55,000		80,000	Loans
”		330		496	Accrued income
Woori Credit Information		384		721	Other receivables
Woori SB		195		385	Other receivables
Woori CS		—		315	Other receivables
Principal guaranteed trust accounts of Woori Bank		1,482		1,788	Deposits with employee retirement trust

	(Won)	178,083	(Won)	227,031

<Liabilities>
Woori Bank	(Won)	115	(Won)	135	Other payables

(2)

Transactions with the subsidiaries for the nine months ended September 30, 2006 and 2005 are as follows:


	2006		2005		Account
<Revenues>
Woori Bank	(Won)	4,435	(Won)	1,581	Interest income on deposits
Kyongnam Bank		1,275		275	Interest income on deposits
Kwangju Bank		992		256	Interest income on deposits
”		—		1,683	Interest income on loans
Woori Finance Information System		1,414		1,364	Interest income on loans
Woori F&I		3,972		6,062	Interest income on loans
Principal guaranteed trust accounts of Woori Bank		4		—	Interest income on deposits
Woori Third Asset Securitization Specialty		—		1,041	Interest income on loans

	(Won)	12,092	(Won)	12,262

<Expenses>
Woori Bank	(Won)	—	(Won)	2,185	Loss on valuation of swap contracts
”		1,541		1,696	Rent
Woori Finance Information System		1,311		319	Service fees
”		—		1,444	Other administrative expenses

	(Won)	2,852	(Won)	5,644

- 16 -

(3)

The Company compensated 10 management personnel as registered or non-registered directors, who have the important authorities and responsibilities for the plan, management and control of the Company for (Won) 2,279 million of salaries and recorded (Won)244 million of provision for severance benefits for the nine months ended September 30, 2006.

- 17 -

18.

EARNINGS PER COMMON SHARE

(1)	Basic ordinary income per common share and basic net income per common share for the three months and nine months ended September 30, 2006 and 2005 are as follows (Korean won in millions, except for earnings per share data):


	2006				2005
	Three months		Nine months		Three months		Nine months
Net income on common shares	(Won)	592,635	(Won)	1,597,156	(Won)	673,179	(Won)	1,500,034

Extraordinary gain		—		—		—		—
Income tax effect on extraordinary gain		—		—		—		—

Ordinary income on common shares	(Won)	592,635	(Won)	1,597,156	(Won)	673,179	(Won)	1,500,034

Weighted average number of common shares outstanding		806,012,788		806,012,788		806,012,791		803,815,131

Basic ordinary income per common shares	(Won)	735	(Won)	1,982	(Won)	835	(Won)	1,866

Basic net income per common shares	(Won)	735	(Won)	1,982	(Won)	835	(Won)	1,866

(*)	Basic net income and basic ordinary income per common share for the year ended December 31, 2005 are (Won)2,099. Basic net income and basic ordinary income per common for three months ended March 31, 2006 and June 30, 2006 are (Won)546 and (Won)700, respectively.

(2)	Diluted ordinary income per common share and diluted net income per common share for the three months and nine months ended September 30, 2005 are as follows (Korean won in millions, except for earnings per share data):


	2005
	Three months		Nine months
Diluted net income on common shares	(Won)	673,179	(Won)	1,500,410

Extraordinary gain		—		—
Income tax effect on extraordinary gain		—		—

Diluted ordinary income on common shares	(Won)	673,179	(Won)	1,500,410

Weighted average number of common and dilutive common shares outstanding		806,559,030		806,443,077

Diluted ordinary income per common shares	(Won)	835	(Won)	1,861

Diluted net income per common shares	(Won)	835	(Won)	1,861

(*)

Diluted net income and diluted ordinary income per common share for the year ended December 31, 2005 are (Won)2,095. There are no diluted net income and diluted ordinary income for the nine months ended September 30, 2006 because all convertible securities were converted into common shares for the year ended December 31, 2005.

19.

INSURANCE

As of September 30, 2006, the Company has insurance for liability of reparation of directors with Samsung Fire Insurance Co., Ltd. The insurance coverage is (Won)30,000 million.

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20.

AGREEMENT ON THE IMPLEMENTATION OF A MANAGEMENT IMPROVEMENT PLAN

Since December 30, 2000, the Company’s three subsidiaries, Woori Bank, Kyongnam Bank and Kwangju Bank, and the KDIC have entered into agreements for the implementation of management improvement plans for the banks. Under the agreements, the three subsidiaries are obligated to improve financial ratio, such as BIS capital ratio, Return on Assets (ROA), Return on Equity (ROE), Non-performing loan rate and adjusted operating income (AOI) per person. If the three subsidiaries fail to implement the agreements, the KDIC may command for the three subsidiaries to increase or decrease their capital, pursue mergers, assign contracts such as loans and deposits, or close or sell parts of their business operations.

Since July 2, 2001, the Company and the KDIC have entered into an agreement whereby the Company would integrate the Company’s above subsidiaries, Woori Bank, Kyongnam Bank and Kwangju Bank, and improve the performance of the subsidiaries. The agreement stipulates that the Company should build a governance and management structure plan, implement a short-term business improvement strategy, enhance subsidiaries’ competitiveness, expedite privatization, meet the financial ratio targets, and dispose of business units in case of failure to carry out the agreement.

In order to implement the agreements of above three subsidiaries with the KDIC, on July 2, 2001, the Company and its three subsidiaries entered into agreements for the implementation of the management improvement for the three subsidiaries. Pursuant to the agreements, the three subsidiaries should meet management goals given by the Company, consult with the Company about material business decisions before execution, and prepare and implement a detailed business plan in conformity with the Company’s business strategies. If the three subsidiaries fail to implement the management improvement plan, the Company may order the three subsidiaries to limit sales of the specific financial products, investments in fixed assets, promotion of new business or new equity investment, or to close or merge their branch operations and subsidiaries.

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