Resolution Plan 1 | Page

[SEOUL 9491_9]

U.S. Section 165(d) Reduced Resolution Plan

Public Section

This document contains forward-looking statements. Statements that are not historical facts, including statements 

about Korea Development Bank (“KDB Bank”)’s beliefs and expectations, are forward-looking statements. These 

statements are based on current plans, estimates and projections, and therefore undue reliance should not be placed 

on them. The forward-looking information contained in this document is presented for the purpose of interpreting 

the information contained herein and may not be appropriate for other purposes. Forward-looking statements speak 

only as of the date they are made, and KDB Bank undertakes no obligation to update publicly any of them in light of 

new information or future events.
Resolution Plan 2 | Page

[SEOUL 9491_9]

Contents

a. Public Section..................................................................................................................................... 2

a.1 Introduction.........................................................................................................................................................2

a.2 Overview of KDB Bank.........................................................................................................................................3

a.2.1 KDB Capital .......................................................................................................................................................3

a.2.2 KDB Infrastructure Investment Asset Management.........................................................................................3

a.2.3 U.S. Operation ..................................................................................................................................................4

a.3 Summary of the Resolution Plan .........................................................................................................................4

a.3.1 Overview of U.S. Resolution Plan .....................................................................................................................4

a.3.2 Names of Material Entities...............................................................................................................................4

a.3.3 Description of Core Business Lines...................................................................................................................5

a.4 Summary of Financial Information Regarding Assets, Liabilities, Capital and Major Funding Sources...............5

a.4.1 Capital Adequacy..............................................................................................................................................6

a.4.2 Major Funding Sources.....................................................................................................................................6

a.4.3 Description of Derivatives and Hedging Activities............................................................................................7

a.4.4 Memberships in Material Payment, Clearing, and Settlement Systems...........................................................7

a.5 Description of Foreign Operations ......................................................................................................................8

a.6 Material Supervisory Authorities ........................................................................................................................8

a.7 Principal Officers..................................................................................................................................................8

a.8 Resolution Planning Corporate Governance Structure and Processes................................................................9

a.9 Material Management Information Systems.....................................................................................................10

a.10 High-Level Description of Resolution Strategy ................................................................................................10

a. Public Section

a.1 Introduction

Korea Development Bank (“KDB Bank”) is a foreign banking organization duly organized and existing 

under the laws of Korea. KDB Bank established a New York state-licensed branch (“KDB NY”) in New York 

City. This resolution plan (the “U.S. Resolution Plan”) is being filed by KDB Bank pursuant to Section 

165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and 

implementing regulations issued by the Federal Reserve Board (“FRB”) (12 C.F.R. Part 243) and the 

Federal Deposit Insurance Corporation (the “FDIC”) (12 C.F.R. Part 381) (collectively, the “Resolution Plan 

Rule”).
Resolution Plan 3 | Page

[SEOUL 9491_9]

Section 165(d) of the Dodd-Frank Act and the Resolution Plan Rulerequire a foreign bank or company 

that is, or is treated as, a bankholding company under section 8(a) of the International Banking Act of 

1978 (the “IBA”)(12 U.S.C. §§3101 et seq.) and that has $50 billion or more in total consolidated assets to

submit annually a plan for the rapid and orderly resolution of the U.S. operations of a “covered company”

in the event of material financial distress or failure. As aforeign-based covered company with less than 

$100 billion in total U.S. non-bank assets, KDB Bank (formerly KDBFG) submitted its first resolution plan 

to the FRB and the FDIC on December 24, 2013. 

KDB Bank is treated as a bank holding company under Section 8(a) of the IBA because it controls and 

maintains a branch office in the U.S. Accordingly, KDB Bank is a “foreign-based covered company”

subject to the Resolution Plan Rule. This Public Section of the U.S. Resolution Plan provides an executive 

summary of KDB Bank’s overall resolution strategy. All financial and other information included in this 

U.S. Resolution Plan are, unless otherwise indicated, reported on a consolidated basis under 

International Financial Reporting Standards as adopted in Korea (“K-IFRS”), in Korean won and as of 

December 31, 2017, KDB Bank’s fiscal year-end.

a.2 Overview of KDB Bank

KDB Bank, the Covered Company, was established in April 1, 1954 as a government-owned financial 

institution pursuant to the KDB Act, as amended. Since its establishment, KDB Bank has been the leading 

bank in Korea with respect to the provision of long-term financing for projects designed to assist the 

nation’s economic growth and development. The Korean government owns all of its paid-in-capital. KDB 

Bank is located at 14 Eunhaeng-ro, Yeongdeungpo-gu, Seoul, Korea.

KDB Bank’s primary business activities include: (a) corporate banking and restructuring; (b) investment 

banking; and (c) alternative investments. For corporate banking and restructuring, KDB Bank provides 

loans and trade finance for corporate clients and plays the crucial role in corporate restructuring 

businesses in Korea. Investment banking’s primary services are corporate funding, advisory, mergers and 

acquisitions, and derivative and FX trading. Alternative investments include project finance and private 

equity businesses. 

a.2.1 KDB Capital

KDB Capital Corporation (“KDB Capital”) was established on December 16, 1972 to engage in leasing 

industrial machinery, equipment, aircraft, ships and automobiles, and investing as well as providing 

financing services to venture companies. The head office is located in Seoul, Korea.

a.2.2 KDB Infrastructure Investment Asset Management

KDB Infrastructure Investment Asset Management Co., Ltd.(“KIAMCO”) was established on October 28, 

2003 to engage in establishing funds and investing in alternative assets such as infrastructure, power 

plant, energy, transportation, etc. The head office is located in Seoul, Korea.

The following chart sets forth KDB’s major subsidiaries as of December 31, 2017.
Resolution Plan 4 | Page

[SEOUL 9491_9]

a.2.3 U.S. Operation

As of December 31, 2017, in the United States, KDB Bank operated through KDB NY. This was the only 

operation of KDB Bank in the United States. KDB Capital and KIAMCO did not maintain any operations in 

the United States.

a.3 Summary of the Resolution Plan

a.3.1 Overview of U.S. Resolution Plan

For the year ended December 31, 2017, KDB Bank’s limited operation in the United States was housed in 

KDB NY. KDB Bank’s U.S. Resolution Plan is intended to provide the FRB and the FDIC with an 

explanation of KDB Bank’s plan for the rapid and orderly resolution of its U.S. operations in the event of 

the material financial distress or failure of the covered company. The U.S. Resolution Plan includes the 

information required by the Resolution Plan Rule, including a description of KDB Bank’s U.S. operations

and determination process of core business lines, critical operations, and material entities.

a.3.2 Names of Material Entities

Under the Resolution Plan Rule, a “material entity” is a subsidiary or foreign office of the “covered 

company” that is significant to the activities of a critical operation or core business line. “Critical 

operations” are those operations, including associated services, functions and support, of which the 

failure or discontinuance would pose a threat to the financial stability of the United States. “Core 

business lines” are those business lines, including associated operations, services, functions and support 

that, in the covered company’s view, upon failure would result in a material loss of revenue, profit, or 

franchise value. 

KDB Bank has determined that it does not have any critical operations that, upon their failure or 

discontinuance, would pose a threat to the financial stability of the United States. Overall, the relatively 

limited scope, nature and volume of KDB Bank’s U.S. operations are such that their failure or 

discontinuance would not pose a threat to the stability of the U.S. financial system. The FRB and the 

FDIC also have not designated any operations of the covered company as a critical operation.
Resolution Plan 5 | Page

[SEOUL 9491_9]

KDB Bank has also determined that it had no core business lines based on analysis performed on a 

quantitative as well as a qualitative basis. On a qualitative basis, failure of KDB Bank’s U.S. operations

would not have a material effect on the overall franchise value of the company. As such, KDB Bank 

determined that none of the business lines conducted in the United States should be considered as a 

core business line for the purposes of this U.S. Resolution Plan. 

Because none of the business lines of KDB Bank that are conducted in the United States have been 

determined to be a “core business line” or “critical operation”, KDB Bank has identified no “material 

entity” for purposes of the U.S. Resolution Plan.

a.3.3 Description of Core Business Lines

As noted above, for purposes of the U.S. Resolution Plan, KDB Bank has identified no core business lines. 

None of the business lines in its U.S. operations is significant in quantitative aspects when compared to 

the total assets of KDB Bank. In addition to the above quantitative analysis, a qualitative analysis was 

used to determine whether the business lines operating in the United States would have a material 

effect on the overall franchise value of KDB Bank. Pursuant to KDB Bank’s qualitative and quantitative 

analyses, no core business lines were identified.

a.4 Summary of Financial Information Regarding Assets, Liabilities, Capital and Major 

Funding Sources

The following table is a summary of KDB Bank’s audited consolidated financial information under K-IFRS 

as of December 31, 2017.

In millions of won

As of December 

31, 2017

Assets

Cash and due from banks 8,235,486

Financial assets held for trading 1,904,649

Financial assets designated at fair value through profit or 

loss 120,019

Available-for-sale financial assets 39,593,926

Held-to-maturity financial assets 6,040,641

Loans 143,224,116

Derivative financial assets 6,382,579

Investments in associates 28,054,557

Property and equipment, net 6,026,911

Investment property, net 412,586

Intangible assets, net 1,292,426

Deferred tax assets 920,983

Current tax assets 74,516

Other assets 21,264,039

Non-current assets held for sale 264,294

Total assets 263,811,728
Resolution Plan 6 | Page

[SEOUL 9491_9]

Liabilities

Financial liabilities held for trading —

Financial liabilities designated at fair value through profit or 

loss 1,626,185

Deposits 34,300,089

Borrowings 28,692,715

Bonds 120,228,005

Derivative financial liabilities 5,823,991

Policy reserves 15,586,838

Defined benefit liabilities 403,092

Provisions 1,687,266

Deferred tax liabilities 3,512,909

Current tax liabilities 369,572

Other liabilities 17,991,308

Non-current liabilities held for sale 18,954

Total liabilities 230,240,924

Equity

Issued capital 17,938,099

Capital surplus 1,058,374

Capital adjustment 324,596

Accumulated other comprehensive income 694,547

Retained earnings 9,827,095

Total equity attributable to equity holders of the Company 29,842,711

Non-controlling interests 3,728,093

Total equity 33,570,804

Total liabilities and equity 263,811,728

a.4.1 Capital Adequacy

As of December 31, 2017, KDB Bank’s consolidated capital ratios, as computed under the Basel III

guidelines, were maintained at a high level with a Tier 1 capital ratio of 13.18%, Tier 2 capital ratio of 

2.08% and a total capital ratio of 15.26%.

a.4.2 Major Funding Sources

KDB Bank funds itself through deposits, borrowings, and bonds. KDB Bank attempts to diversify funding 

sources by continuously expanding its deposit base through corporate deposits and by issuing bonds 

overseas.

As of December 31, 2017, KDB Bank’s deposits amounted to 34.3 trillion won, a decrease of 12.9% from 

December 31, 2016. Borrowings stood at 28.7 trillion won, a decrease of 8.0% from December 31, 2016, 

and bonds were 120.2 trillion won, a decrease of 1.4% from December 31, 2016. The majority of the 

total financing came through bond issuances and the portion of deposits remained similar to the last 

year’s level, reflecting the goals of the amended KDB Act to strengthen the public policy financing role of 

KDB Bank and gradually reduce its retail banking services.
Resolution Plan 7 | Page

[SEOUL 9491_9]

a.4.2.1 Liquidity Risk Management

KDB Bank defines liquidity risk as the possibility of incurring loss due to a temporary shortage in funds 

caused by a maturity mismatch or an unexpected capital outlay. Liquidity risk increases when funding 

rates rise, assets are sold below fair value, or a good investment opportunity is missed. To better 

manage liquidity risk, KDB Bank and its subsidiaries comply with the liquidity-related supervision ratios 

required by the respective authorities and calculate measurement indices such as liquidity coverage 

ratio, liquidity ratio, and liquidity gap. KDB Bank, in particular, conducts liquidity stress tests under crisistype scenarios to maintain a liquidity gap structure that is stable in diverse market conditions. Moreover, 

to prepare for unexpected liquidity problems arising from rapid changes in the market environment or 

in monetary policy, each subsidiary of KDB Bank has set up a contingency plan. The operational status of 

liquidity risk management is also regularly reported to KDB Bank’s Board of Directors.

a.4.3 Description of Derivatives and Hedging Activities

KDB Bank enters into derivatives transactions mainly to meet the needs of its clients’ hedging strategies 

or to mitigate its own risks arising from shifts in interest rates, currency values and other market

variables. KDB Bank participates in inter-bank markets for the purpose of hedging and managing the 

positions created from internal and external transactions. To this end, KDB Bank transacts in a variety of 

derivative products including forwards, futures, options and swaps, and has a specialized organization 

committed to derivatives transactions and the risk management system.

For the purpose of hedging the exposure to the variability of fair values of funds in Korean won by 

changes in interest rates or exchange rates, KDB Bank mainly uses interest rate swaps or currency rate 

swaps. The main counterparties are foreign financial institutions and local banks. In addition, to hedge 

the exposure to the variability of fair values of bonds in foreign currency by changes in interest rates or 

foreign exchange rates, KDB Bank mainly uses interest rate swaps or currency rate swaps.

The use of derivatives for hedging helps minimize unplanned fluctuations in earnings, fair values of 

assets and liabilities, and cash flows caused by interest rate, foreign currency and other market value 

volatility. These derivatives are qualified as fair value hedges or cash flow hedges for accounting 

purposes. 

a.4.4 Memberships in Material Payment, Clearing, and Settlement Systems

KDB Bank, acting through KDB NY, is a member of certain U.S. payment, clearing and settlement systems 

that enable it to access systems necessary to provide services to its customers and clients. The following 

is list of KDB NY’s memberships in material payment, clearing and settlement systems:

Entity Holding 

Membership Type System

KDB NY

Clearing, Settlement, 

Payment

Federal Reserve Funds Transfer Off-line System – Fedwire 

Funds

Communications Society for Worldwide Interbank Financial Telecommunications 

(SWIFT)
Resolution Plan 8 | Page

[SEOUL 9491_9]

a.5 Description of Foreign Operations

While KDB Bank does maintain foreign operations, KDB Bank’s operations and employees are primarily 

located in Korea. As a result, the vast majority of revenues, profits, assets and liabilities are related to 

KDB Bank’s domestic operations. As of December 31, 2017, KDB Bank operated nine overseas branches 

including KDB NY, as well as five overseas subsidiaries and eight overseas representative offices. KDB 

Capital has one overseas financial services subsidiary.

Domestic and overseas revenue information for the year ended December 31, 2017and non-current 

assets information as of December 31, 2017 are as follows.

(In millions of won)

Geographic Areas Revenue Non-current Assets

Domestic 52,183,877 35,770,155

Overseas 1,023,517 16,325

Source: 2017Audited Consolidated Financial Statements under K-IFRS of KDB Bank

a.6 Material Supervisory Authorities

The consolidated operations of KDB Bank, including its subsidiaries and overseas offices, are subject to 

supervision and regulation under the applicable laws and regulations of the countries in which it 

operates.

KDB Bank is co-supervised by the Korean Financial Services Commission (the “FSC”), the Korean Financial 

Supervisory Service (the “FSS”), and the Bank of Korea (“BOK”). The FSC’s primary functions are 1) 

protecting the integration of Korea’s financial markets by promoting sound credit system and fair 

business practices, and 2) serving as a consolidated policy making body for all matters pertaining to 

supervision of the financial industry as a whole. The FSS’ primary functions are audit and supervision of 

financial institutions. The BOK’s primary functions are 1) issuing banknotes and coins, 2) formulating and 

implementing monetary and credit policy, 3) operation and oversight of the payment and settlement 

systems, 4) managing Korea's foreign exchange reserves and 5) supervisory functions for financial 

institutions.

KDB NY is licensed by the New York State Department of Financial Services (“NYSDFS”). 

a.7 Principal Officers

The table below lists the current members of the Board of Directors of KDB Bank.

Name Title 

Donggull Lee Chairman & Chief Executive Officer

Daihyun Lee Vice Chairman & Chief Operating Officer
Resolution Plan 9 | Page

[SEOUL 9491_9]

Cheolhwan Seo Auditor

Chaeyeol Yang Independent Director

Bhanggil Choi Independent Director

Jungsik Kim Independent Director

Namjun Kim Independent Director

Yune Lee Independent Director

The table below lists the current senior management of KDB Bank.

Name Title 

Donggull Lee Chairman & Chief Executive Officer

Daihyun Lee Vice Chairman & Chief Operating Officer

Cheolhwan Seo Auditor

Jooyung Sung Executive Director

Youngsam Jun Executive Director

Seunghyun Cho Executive Director

Keonyeol Kim Executive Director

Ingyun Baek Executive Director

Maengho Lim Executive Director

Jaeik Kim Executive Director

a.8 Resolution Planning Corporate Governance Structure and Processes

KDB Bank has integrated resolution planning into its corporate governance structure and processes to 

ensure that the U.S. Resolution Plan receives appropriate oversight from designated senior management 

officials, councils and the Board of Directors. KDB Bank has developed the U.S. Resolution Plan in 

accordance with the following corporate governance structure and processes.

KDB Bank’s U.S. Resolution Plan is prepared by Resolution Plan Office (“RPO”) with assistance from 

Resolution Plan Steering Group (“RPSG”). The plan is reviewed by both RPO and RPSG with oversight 

from Resolution Plan Council(“RPC”). KDB Bank’s U.S. Resolution Plan, once approved by the RPC, is 

submitted to the Board of Directors for final approval.

The Board of Directors is the most senior management body of KDB Bank. The Board of Directors,

located in Seoul, Korea, is ultimately responsible for evaluating and approving KDB Bank’s U.S.

Resolution Plan.
Resolution Plan 10 | Page

[SEOUL 9491_9]

RPC was established for the purpose of developing, executing and managing KDB Bank’s strategy and 

U.S. Resolution Plan. Its primary responsibility is overseeing the preparation and submission of the U.S. 

Resolution Plan to KDB Bank’s Board of Directors for approval. RPC includes one member of senior 

management from KDB Bank.

RPSG consists of the Working Group from KDB Bank. RPSG supports RPO in the United States by 

supplementing any additional preparation needed, providing advice on all issues relating to U.S. 

resolution planning, and approves the U.S. Resolution Plan before submission to RPC.

RPO consists of the U.S. Working Group from KDB NY. Responsibilities for the U.S. Working Group 

include day-to-day project management and functional leadership for oversight, development, 

maintenance, implementation, filing and compliance of resolution plan, as well as updating as part of 

business as usual processes.

a.9 Material Management Information Systems

KDB Bank utilizes management information system (“MIS”) and applications to ensure timely access to 

accurate and comprehensive data, including those for risk management, accounting, and financial and 

regulatory reporting. In preparing the U.S. Resolution Plan, KDB Bank has identified key MIS applications 

and maintains inventories of such systems and applications.

The MIS applications are primarily used to collect, retain and report information internally, as well as to 

perform functions necessary to support operations. Multiple reports are generated on a periodic basis 

for use by senior management to assess the financial health, risks and operations. KDB Bank’s MIS is 

capable of collecting, maintaining, and reporting information in a timely manner to management and to 

regulators.

a.10 High-Level Description of Resolution Strategy

The U.S. Resolution Plan takes into consideration possible strategies for the orderly resolution of KDB

Bank’s U.S. operations under applicable resolution regimes in the event of material financial distress or 

failure. The strategies are designed to be executed within a reasonable period of time and in a manner 

that avoids or substantially mitigates systemic impact on U.S. financial stability.

As required by the Resolution Plan Rule, the U.S. Resolution Plan assumes that the material financial 

distress is a result of an idiosyncratic event that is specific to KDB Bank and occurs at a time where 

general macroeconomic conditions are consistent with certain baseline assumptions in which other

financial institutions and markets generally are not experiencing a system-wide financial panic or crisis. 

This strategy addresses how the U.S. operations of KDB Bank may undergo an orderly resolution without 

extraordinary government support in the U.S. or Korea. The U.S. Resolution Plan assumes that KDB NY 

would be seized by the Superintendent of the NYSDFS (the “Superintendent”) who would commence 

liquidation proceedings under New York Banking Law (“NYBL”).
Resolution Plan 11 | Page

[SEOUL 9491_9]

Because KDB NY is a New York state-licensed branch, the U.S. Resolution Plan contemplates that KDB NY 

would be subject to the insolvency and liquidation provisions for foreign bank branches under the NYBL, 

rather than the U.S. Bankruptcy Code, in the event of KDB NY’s insolvency. The NYBL generally includes a 

ring-fencing regime that would effectively draw a fence around KDB NY and treat it as a separate entity 

from KDB Bank. Under the NYBL provisions regarding the involuntary liquidation of foreign bank 

branches, the Superintendent may seize certain U.S. assets of KDB NY if, among other things, KDB NY is 

in liquidation either in the home country or elsewhere or there is reason to doubt that KDB NY is able or 

willing to pay the claims of its creditors. (N.Y. Banking Law, §606(4)(a).) The Superintendent is 

authorized to take possession of (1) all KDB NY assets wherever located that constitute part of the 

business of KDB NY and appear on the books as such and (2) all assets of KDB Bank located within New 

York regardless of whether they constitute part of the business of KDB NY. The property would be 

liquidated to pay creditors with permissible claims against KDB NY in accordance with NYBL.