Articles of Incorporation

Chapter 1 General Provisions

Article 1 (Company Name) The name of this company shall be BNK Financial Group.(Amended on March 27 2015)

Article 2 (Business Objectives) The company aims to manage the following businesses:

• 1.Give the business goals and approve business plans for of the company and others (including subsidiaries, companies controlled by a subsidiary in the Financial Holding Companies Act);
• 2.Evaluate management performance of subsidiaries and others and determine the compensation;
• 3.Determine the management governance of subsidiaries and others;
• 4.Audit the works and property status of subsidiaries and others;
• 5.Carry out the works related to the internal control and risk management of subsidiaries and others;
• 6.Support funds for subsidiaries and others;
• 7.Provide funds for the investment in subsidiaries and others and fund support for subsidiaries and others;
• 8.Provide resources necessary for the works of subsidiaries and others such as clerical support for the development and sales of joints products with subsidiaries and others;
• 9.Carry out the works delegated by subsidiaries and others to support the works of subsidiaries and others such as data processing, legal affairs and accounting;
• 10.Carry out the works related to the lease and provision of the brands, licenses, and others for subsidiaries and others;
• 11.Carry out the works not requiring license, permit, approval or others according to the law as works incidental to the business management;
• 12.Carry out the works incidental or related to the works specified in all clauses described above.

Article 3 (Location of the Head Office and Establishment of Branch Offices and Others)

• ① The company shall have its head office in Busan, Korea.
• ② If necessary, the company may have branch offices, sub-branches, offices, and local corporations at home and abroad by resolution of the Board of Directors.

Article 4 (Announcement Method) The company announcement shall be made on the website of the company (http://www.bnkfg.com). However, when it cannot be made on the website of the company due to a computer failure or an unavoidable reason, the company announcement shall be made in Busan Daily and Kookje Daily, published in Busan, Korea.

Chapter 2 Shares

Article 5 (The Total Number of Shares which will be issued by the Company) The total number of shares to be issued by the Company shall be 700,000,000 shares.

Article 6 (Par Value per Share) The company shall issue the shares with a par value of 5,000 won per share.

Article 7 (Total Number of Shares to Be Issued by the Company when the Company is Established) The company shall issue a total of 193,379,899 shares when it is established.

Article 8 (Types of Shares)

• ① The types of shares to be issued by the company shall be common shares and class shares, both in registered form (Amended on March 28, 2013).
• ② The class shares issued by the company shall be class shares with the dividend or the priority over the distribution of any remaining assets, non-voting class shares, class shares related to the conversion of shares (hereinafter, referred to as 「convertible shares」), class shares related to the redemption of shares (hereinafter, referred to as 「redeemable shares」), and the combined shares which all or some of shares mentioned above are mixed (Amended on March 28, 2013).

Article 9 (Number and Contents of Non-voting Preferred Shares)

• ① The preferred shares to be issued by the company shall not have voting rights. The number of the shares shall be within the range of one-half (1/2) of the total issued shares.
• ② The dividend yield on non-voting preferred shares shall be no less than 1% of the par value per year. When they are issued, the Board of Directors shall determine the types of property dividends, the method of determining the price of the property dividend, and the dividend conditions within the range allowed in Article 56 and 57 of the Articles of Incorporation as well as the dividend yield. However, when the non-voting preferred shares which can adjust the preferential dividend yield are issued, the Board of Directors shall determine the content which the preferential dividend yield can be adjusted, the reason for adjustment, the base date of adjustment, and adjustment method (Amended on March 28, 2013).
• ③ The non-voting preferred shares to be issued by the company may be participating or non-participating, and cumulative or non-cumulative by revolution of the Board of Directors (Amended on March 28, 2013).
• ④ When there is a resolution on no dividend on non-voting preferred shares, the non-voting preferred shares shall be considered to have voting rights during the period between the next general meeting of shareholders after the general meeting of shareholders that the relevant resolution is made and the general meeting of shareholders with a resolution on the preferential dividend ends (Amended on March 28, 2013).
• ⑤ When there is a paid-in capital increase or a free share capital increase, the allocation of new shares for non-voting preferred shares shall respectively be made as common shares in case of a paid-in capital increase and the same types of shares as common shares in case of a free share capital increase (Amended on March 28, 2013).
• ⑥ The duration of non-voting preferred shares shall be determined by resolution of the Board of Directors within the range between one or more years and thirty (30) years after the issue date. They shall be converted into common shares as soon as the duration ends. However, when the prescribed dividend is not distributed during the above period, the conversion period shall be extended until the dividend is completely distributed. In this case, the regulation in Article 15 shall apply to the dividend on new shares issued due to conversion (Amended on March 28, 2013).

Article 10 (Types of Share Certificates) The company shall issue eight (8) types of share certificates in denominations of 1, 5, 10, 50, 100, 500, 1,000, and 10,000 shares.

Article 11 (Convertible shares)

• ① The company may issue non-voting convertible preferred shares which can be converted into common or class shares within the range of 20% of the total number of issued shares by resolution of the Board of Directors (Amended on March 28, 2013). The company may issue convertible preferred shares within the range of 20% of the total number of issued shares by resolution of the Board of Directors (Amended on March 28, 2013).
• ② The issue price of the new share issued due to conversion shall be that of the share before conversion. The number of shares to be issue shall be the same as that of shares before conversion (Amended on March 28, 2013).
• ③ The period that a request for conversion may be made shall be determined by resolution of the Board of Directors within the time period between one (1) and thirty (30) years after the issue date.
• ④ The regulation in Article 15 shall apply to the dividend on new shares issued due to conversion.

Article 12 (redeemable shares)

• ① The company may issue on-voting redeemable preferred shares which profits can be disposed within the range of 20% of the total number of issued shares by resolution of the Board of Directors or the relevant shareholder's choice (Amended on March 28, 2013).
• ② The price of redeemable shares shall be 『issue price + additional amount』. The additional amount shall be determined by resolution of the Board of Directors, considering the dividend yield, market conditions, and all other conditions related to the issuance of other redeemable shares when they are issued.
• ③ The duration of redeemable shares shall be determined by resolution of the Board of Directors within the range between the day after the ordinary general meeting of shares for the fiscal year which the issue date belongs to ends and one (1) month after the ordinary general meeting of shareholders for the fiscal year which thirty (30) years have passed after the issue date ends. However, in case of redeemable shares which the company should redeem when the redemption period ends, the redemption period shall be extended until the reason is resolved when any of reasons specified in the following clauses occurs;
  • 1. When the dividend on redeemable shares is not completely distributed on the preferential basis;
  • 2. When any redemption is not made during the redemption period due to the lack of corporate incomes;
• ④ The company may redeem all redeemable shares at the same time or them by installment. However, in case of redemption by installment, the company may determine shares to be redeemed by lot or in proportion. Fractional shares caused by the proportional method shall not be redeemed.
• ⑤ When it intends to redeem redeemable shares, the company shall separately notify shareholders holding those shares and rightful claimants stated on a list of shareholders of the fact two (2) weeks after the acquisition date of shares subject to redemption. When the above period ends, the forced redemption shall be made. However, the notice may be replaced with the public notice (Amended on March 28, 2013).
• ⑥ The company may issue those redeemable shares as convertible shares specified in Article 11 by resolution of the Board of Directors when redeemable shares are issued.

Article 13 (Issuance and Allocation of Shares)

• ①The company shall issue new shares by resolution of the Board of Directors in the way specified in the following clauses (Amended on March 28, 2014.)
  • 1. The way of giving an opportunity to subscribe for the takeover of new shares to allocate new shares to shareholders in proportion to the number of shares which they hold (Newly enacted on March 28, 2014.);
  • 2. The way of giving an opportunity to subscribe for the takeover of new shares to specific people such as foreign investors, domestic and foreign financial institutions, institutional Investors, associate companies, investment companies, clerical investment companies, investment companies, corporations and individuals needed to establish and maintain transactions with the company or its subsidiaries (including the shareholders of the company) for the allocation of new shares within the range of not exceeding fifty-hundredth (50/100) of the total issued shares due to managerial needs such as the introduction of advanced financial techniques, an improvement in the financial structure of the company, its subsidiary, and others, financing alliance (Newly enacted on March 28, 2014);
  • 3. The way of giving an opportunity to subscribe for the takeover of new shares to many unspecific people with the method specified in Section 1 within the range of not exceeding fifty-hundredth (50/100) of the total issued shares, and accordingly allocating new shares to subscribers (Newly enacted on March 28, 2014);
  • 4. The way of allocating new shares to the members of the employee stock ownership (ESOP) association on the preferential basis according to Capital Market and Financial Investment Business Act(Newly enacted on March 28, 2014);
  • 5. The way of allocating new shares within the range of not exceeding fifty-hundredth (50/100) of the total issued shares in accordance with the issuance of depositary receipt (DR) according to the relevant law such as Capital Market and Financial Investment Business Act (Newly enacted on March 28, 2014);
  • 6. The way of allocating new shares according to the exercise of stock options according to the relevant law such as Commercial Code (Newly enacted on March 28, 2014);
• ② When they are allocated in the way specified in Section 1, Clause 1, new shares shall be allocated by resolution of the Board of Directors in the way corresponding to any of the methods specified in the following clauses (Newly enacted on March 28, 2014):
  • 1. The way of allocating new shares to many unspecific subscribers, not classifying the types of people who get an opportunity to subscribe for the takeover of new shares (Newly enacted on March 28, 2014);
  • 2. The way of allocating new shares to the members of the employee stock ownership (ESOP) and giving many unspecific people an opportunity to subscribe for the takeover of new shares including shares not subscribed yet (Newly enacted on March 28, 2014);
  • 3. The way of giving many unspecific people an opportunity for the allocation of shares when there are bonds not subscribed yet after an opportunity to subscribe for the takeover of new shares is preferentially given to shareholders;
  • 4. The way of giving the specific types of people an opportunity to subscribe for the takeover of new shares according to reasonable standards prescribed in the relevant law such as demand forecasting prepared by investment traders and investment brokers as acceptors or agents (Newly enacted on March 28, 2014);
• ③ When the company issues new shares through the method corresponding to any of the methods prescribed in every clauses of Section 1, The type, the number, and the issue price of shares to be issued shall be determined by resolution of the Board of Directors.
• ④ When it allocates new shares according to the regulations in Section 1, Clause 2 and 3, the company shall publicly announce or notify shareholders of the matters prescribed in Article 416, Clauses 1, 2, 2-2, 3 and 4 of Commercial Code two (2) weeks before the payment due date. However, the company may publicly announce main reports on the website of Financial Service Commission and Korea Exchange according to Article 165-9 of the Capital Market and Financial Investment Business Act Financial Service Commission in substitution of the notice and the public announcement (Amended on March 28, 2014.)
• ⑤ If a subscription for the takeover of new shares is not made by the due date or there are shares without the price payment when new shares are issued, the company shall determine the handling method by resolution for the Board of Directors according to the relevant law (Newly enacted on March 28, 2014);
• ⑥ The company shall determine the way of handling fractional shares which occur in the new share allocation process by resolution of the Board of Directors(Newly enacted on March 28, 2014);
• ⑦ The company shall issue subscription warrants when it allocates new shares according to the regulation in Section 1, Clause (Newly enacted on March 28, 2014);

Article 14 (Stock Options)

• ① The company may grant stock options in accordance with the relevant law such as Commercial Code to employees (including executives and staff members of subsidiaries specified in Article 30 of the Enforcement Decree of Commercial Code, Hereinafter, the same in this article) by special revolution of a general meeting of shareholders within the range of ten of hundredth (10/100) of the total issued shares. However, it may grant stop options to any people other than the directors of the company by resolution of the Board of Directors within the range of ten of hundredth (10/100) of the total issued shares. In this case, the company shall get approval of the general meeting of shareholders first convened after the grant date (Amended on March 28, 2013.)
• ② The company may grant stock options under the condition that stock options shall be exercised only when a specific goal performance is achieved. If not, it may suspend or cancel the exercise of stop options.
• ③ People eligible for stock options shall be those who have contributed or can contribute to the establishment, the management, technical innovation and others of the company as executives and staff members of the company, or its subsidiary and the company controlled by the subsidiary specified in the relevant law such as Commercial Code. People who fall under any of the cases specified in the following clauses are excluded:
  • 1. The largest shareholders and his/her specially related parties (It means the largest shareholders and his/her specially related parties, prescribed in the relevant law such as Commercial Code.) However, people who become specially related parties as they become the executives of the relevant corporation (including part-time executives of subsidiaries) shall be excluded.
  • 2. A majority shareholder (a majority shareholder specified in Commercial Code, hereinafter, the same as follows) and his/her specially related parties. However, people who become specially related parties as they become the executives of the relevant corporation (including part-time executives of subsidiaries) shall be excluded.
  • 3. The person who becomes a majority shareholder due to the exercise of his/her stock option.
• ④ The share which will be issued due to the exercise of stock options (It is the share which becomes the basis of calculating the difference between the exercise price of a stock option and the market price when the difference is paid in cash or issued with treasury shares) shall be registered common shares.
• ⑤ The stock option granted to one executive or employee shall not exceed ten-hundredth (10/100) of the total number of issued shares.
• ⑥ The exercise price per share which a stock option will be exercised shall depend on the regulation specified in the relevant law such as Commercial Code. The same regulation shall apply to the case that the exercise price is adjusted after a stock option is granted.
• ⑦ A stock option may be exercised within seven (7) years after two (2) years have passed since the resolution date which a stock option is given, the date specified in Section 1.
• ⑧ The person who receives a stop option may exercise his/her right when they have worked for 2 or more years after the resolution date prescribed in Section 1. However, when the person with a stop option dies or resigns due to a reason not attributable to himself/herself within two (2) years after the resolution date specified in Section 1, he/she may exercise his/her stock option during the exercise period (Amended on March 28, 2013.)
• ⑨ The regulation prescribed in Article 15 shall apply to the dividend on new shares issued due to the exercise of stock options.
• ⑩ Shareholders’ Stock options may be canceled by resolution of the Board of Directors when there is one of the cases specified in the following clauses;
  • 1. When an executive or staff member with a stop option retires or resigns according to his/her own intention;
  • 2. When an executive or staff with a stock option causes serious damage to the company intentionally or inadvertently;
  • 3. When the company cannot respond to the exercise of stock options due to the bankruptcy or dissolution of the company;
  • 4. When there is a reason for cancellation prescribed in the contract related to the grant of stock options;

Article 15 (Dividend Record Date of New Shares) As for the dividend on the new shares issued due to a paid-in capital increase, a free share capital increase, and share dividends, new shares shall be deemed to be issued at the end of the previous fiscal year before the fiscal year that new shares are issued.

Article 16 (Transfer Agent)

• ① The company shall have a stock transfer agent.
• ② The transfer agent, the location of its services, and the scope of its agency business shall be determined by resolution of the Board of Directors.
• ③ The list of shareholders or its duplicate shall be kept at the office of the transfer agent The company shall have the transfer agent handle business activities such as title changes in the share certificate, the registration or cancellation of pledges, the indication or cancellation of trust property, the issuance of share certificates, the receipt of reports, and other share-related matters.
• ④ The procedures for agency businesses stated in Section 3 shall be carried out in accordance with the regulations related to the transfer agent's securities transfer agency business.

Article 17 (Report on Shareholders’ Names, Addresses, Seals or Signatures )

• ① Shareholders, registered pledgees and their legal representatives shall report their names, addresses, seals or signatures, and others to the transfer agent specified in Article 16.
• ② When the person specified in Section 1 resides abroad, the relevant person shall decide and report the place and the legal representative who will receive notices in Korea.
• ③ The same regulation shall apply when there is a change in the content described in Section 1 and 2.

Article 18 (Closure and the Base Date of Closing a List of Shareholders)

• ① The company shall stop any changes on a list of shareholders related to shareholders’ rights between January 1 and 7 of each year.
• ② The company shall regard the shareholders stated on the final list of shareholders as of December 31 of each year as those who will exercise the rights at an ordinary general meeting of shareholders related to the relevant settlement period.
• ③ When it needs to convene an extraordinary general meeting, the company may decide a certain time period which does not exceed three (3) months by resolution of the Board of Directors to stop any changes on a list of shareholders related to shareholders' rights or make the shareholders stated on a list of shareholders at the date determined by resolution of the Board of Directors as those who will exercise their rights. The company may stop any changes on a list of shareholders and designate the base date at the same time when the Board of Directors deems it necessary. In this case, the company shall publicly announce the fact two (2) weeks before.
• ④ When it is differently specified in the Financial Holding Companies Act and other relevant law in spite of the regulation in the latter part of Section 3, the relevant regulation shall apply.

Chapter 3 Bonds

Article 19 (Issuance of Bonds)

• ① The Company may issue bonds by resolution of the Board of Directors.
• ② The Board of Directors may delegate the bond-related authority to the representative director so that he/she can decide the amount and type of bond and issue bonds within a period not exceeding one year (newly enacted on April 15, 2012).

Article 19-2 (Issuance and Allocation of Convertible Bonds)

• ① The Company may issue convertible bonds to any people other than its shareholders by resolution of the board of directors within the range that the aggregate par value amount of convertible bonds does not exceed 500 billion won when it falls under any of cases specified in the following clauses:
  • When the company issues convertible bonds in the way of giving many unspecific people (including the shareholders of the company) an opportunity to subscribe for the takeover of bonds with the method specified in Article 13, Section 1, Clause 3, and accordingly allocating bonds to subscribers (Amended on March 28, 2014);
  • When the company issues convertible bonds in the way of giving an opportunity to subscribe the takeover of bonds in order to allocate bonds to specific people (including the shareholders of the company) through the method specified in Article 13, Section 1, Clause 2 due to managerial needs such as the introduction of advanced financial techniques, an improvement in the financial structure of the company, its subsidiary, and others, financing, and strategic business alliance (Amended on March 28, 2014).
• ② When they are allocated in the way specified in Section 1, Clause 1, bonds shall be allocated by resolution of the Board of Directors in the way corresponding to any of the methods specified in the following clauses (Newly enacted on March 28, 2014):
  • 1. The way of allocating bonds to many unspecific subscribers, not classifying the types of people who get an opportunity to subscribe for the takeover of bonds;
  • 2. The way of giving many unspecific people an opportunity for the allocation of bonds when there are bonds not subscribed yet after an opportunity to subscribe for the takeover of bonds is preferentially given to shareholders;
  • 3. The way of giving the specific types of people an opportunity to subscribe for the takeover of bonds according to reasonable standards prescribed in the relevant law such as demand forecasting prepared by investment traders and investment brokers as acceptors or agents;
• ③ The Board of Directors may issue convertible bonds specified in Section 1 on the condition that a conversion right is given to some bonds.
• ④ The shares issued by conversion shall be common or class shares. The issue price shall be determined with the par value or higher value by the Board of Directors (Amended on March 28, 2013).
• ⑤ The period that preemptive rights can be exercised shall be between three (3) months after the issue date of relevant bonds and the eve of the maturity date of the bonds. The period that a request for conversion can be made can be adjusted by the resolution of the board of directors within the above period.
• ⑥ The regulations in Article 15 shall apply to the payment of dividends on the shares issued by conversion and interests on convertible bonds.

Article 19-3 (Issuance of Principle Write-down Contingent Convertible Bonds)

• ①When there is a reason previously determined according to the objective and reasonable standards when the relevant bonds are issued by resolution of the Board of Directors, the company may issue bonds with the condition that the redemption of bonds and the obligation to pay interests are reduced and exempted(hereinafter, referred to as ‘Principle Write-down Contingent Convertible Bonds’).
• ②The company may issue Principle Write-down Contingent Convertible Bonds by resolution of the Board of Directors within the range that the aggregate par value amount does not exceed 5 trillion won according to Section 1.
• ③The redemption of Principle Write-down Contingent Convertible Bonds and the obligation to pay interests shall be reduced and exempted(hereinafter, referred to as ‘debt restructuring’) when it falls under any of cases specified in the following clauses: However, when Principle Write-down Contingent Convertible Bonds are issued, the Board of Directors may determine the content of the depreciated contingent convertible bond, which is changed due to debt restructuring.
  • 1. When the company is designated as an insolvent financial institution according to 『Act on the Structural Improvement of the Financial Industry』;
  • 2. When the company receives a command action to improve the corporate management from Financial Service Commission according to 『Act on the Structural Improvement of the Financial Industry』.

Article 20 (Issuance and Allocation of Bonds with Warrants)

• ① The company may issue bonds with warrants to any people other than its shareholders by a resolution of the board of directors within the range that the aggregate par value amount of bonds does not exceed 500 billion won when it falls under any of cases specified in the following clauses:
  • 1. When the company issues bonds with warrants in the way of giving many unspecific people (including the shareholders of the company) an opportunity to subscribe for the takeover of bonds in the way specified in Article 13, Section 1, Clause 3, and accordingly allocating bonds to subscribers (Amended on March 28, 2014).
  • 2. When the company issues bonds with warrants in the way of giving an opportunity to subscribe for the takeover of bonds in order to allocate bonds to specific people (including the shareholders of the company) through the method specified in Article 13, Section 1, Clause 2 due to managerial needs such as the introduction of advanced financial techniques, an improvement in the financial structure of the company, its subsidiary, and others, financing, and strategic business alliance (Amended on March 28, 2014).
• ② When they are allocated in the way specified in Section 1, Clause 1, bonds shall be allocated by resolution of the Board of Directors in the way corresponding to any of the methods specified in the following clauses (Newly enacted on March 28, 2014)
  • 1. The way of allocating bonds to many unspecific subscribers, not classifying the types of people who get an opportunity to subscribe for the takeover of bonds;
  • 2. The way of giving many unspecific people an opportunity for the allocation of bonds when there are bonds not subscribed yet after an opportunity to subscribe for the takeover of bonds is preferentially given to shareholders;
  • 3. The way of giving the specific types of people an opportunity to subscribe for the takeover of bonds according to reasonable standards prescribed in the relevant law such as demand forecasting prepared by investment traders and investment brokers as acceptors or agents;
• ③ The amount needed to request the takeover of new shares shall be determined by the Board of Directors within the range that the amount does not exceed the aggregate par value amount of bonds.
• ④ The shares issued by the exercise of the preemptive right shall be common or class shares. The issue price shall be determined with the par value or higher value by the Board of Directors (Amended on March 28, 2013).
• ⑤ The period that preemptive rights can be exercised shall be between three (3) months after the issue date of relevant bonds and the eve of the maturity date of the bonds. However, the period that preemptive rights can be exercised may be determined by resolution of the board of directors within the above period.
• ⑥ The regulation in Article 15 shall apply to the dividend on the shares issued by the exercise of the preemptive right.

Article 21 (Issuance of Participation Bonds)

• ① The Company may issue participation bonds to any people other than its shareholders by resolution of the board of directors within the range that the aggregate par value amount of bonds does not exceed 500 billion won when it falls under any of cases specified in the following clauses:
  • 1. When the company issues participation bonds through a general public offering;
  • 2. When the company issues participation bonds to foreign investors, domestic and foreign financial institutions, institutional Investors, associate companies, and others due to managerial needs such as the introduction of advanced financial techniques, an improvement in the financial structure of the company, its subsidiary, and others, financing, and strategic business alliance;
  • 3. When the company participation bonds abroad according to the relevant law such as 'Capital Market and Financial Investment Business Act';
• ② The matters related to the dividend participation of the bonds issued according to Section 1 shall be determined based on the dividend on common shares by the Board of Directors when the bonds are issued.

Article 22 (Provisions Applicable to the Issuance of Bonds) The regulations prescribed in Article 16 and 17 shall apply to the case of bond issuance.

Chapter 4 General Meeting of Shareholders

Article 23 (Time to Convene Meetings)

• ① There shall be two types of general meetings of shareholders, ordinary and extraordinary.
• ② While an ordinary general meeting of shareholders shall be held within three (3) month after each fiscal year ends, an extraordinary general meeting of shareholders may be convened when necessary.

Article 24 (Person Designated to Convene Meetings)

• ① Unless otherwise provided in the relevant law, the representative director shall convene a general meeting of shareholders by resolution of the Board of Directors.
• ② When the representative director is unable to perform the duty, the director determined by the Board of Directors shall convene a general meeting of shareholders.

Article 25 (Convocation Notice and Announcement)

• ① When a general meeting of shareholders is convened, a written or electronic convocation notice which the time, date, place, and purpose of the meeting are clearly stated shall be given to every shareholders at least two (2) weeks before the scheduled start date of the meeting.(Amended on March 28, 2013).
• ② The intention and purpose of the meeting shall publicly be announced twice or more in ‘Busan Daily’ published in Busan, and ‘Seoul Daily’ published in Seoul, or on the DART system operated by Financial Supervisory Service or Korea Exchange in order to replace the convocation notice to the convocation notice to shareholders holding not more than one-hundredth (1/100) of the total number of voting shares.

Article 26 (Chairman)

• ① The representative director shall serve as the chairman of the general meeting of shareholders
• ② When the representative director is absent due to unforeseen circumstances, the director shall deputize for the representative director as the chairman of the general meeting of shareholders in the order specified in Article 24.

Article 27 (Chairman’s Authority to Maintain Order)

• ① The chairman of a general meeting of shareholders may order a person who significantly disturbs order through his/her intentional statements and behaviors to obstruct the proceedings of the meeting to stop the serious speech or leave the meeting place.
• ② The chairman may restrict the time and the number of shareholders' speeches when he/she considers it necessary to ensure smooth proceedings.

Article 28 (Shareholders' Voting Rights) Each shareholder shall be entitled to one vote for each share held in all general meetings of shareholders.

Article 29 (Exercise of Voting Rights in Disunity)

• ① When he/she intends to exercise his/her voting right in disunity, a shareholder holding two (2) or more voting rights shall notify the company of the intention and reasons of disunity in writing no later than three (3) days before the start of the general meeting of shareholders.
• ② The Company may disapprove the exercise of the shareholder’ voting rights in disunity. However, it shall be exceptional when the shareholder has taken over the shares as a trustee or holds the shares for others.

Article 30 (Proxy Voting Rights)

• ① All shareholders may exercise their voting rights by proxy.
• ② The proxy specified in Section 1 shall submit a document certifying its proxy right (a power of attorney) before the start of the general meeting of shareholders.

Article 31 (Resolution Method of the General Meeting of Shareholders) Unless otherwise provided in the relevant law or the Articles of Incorporation, all resolutions of the general meeting of shareholders shall require the affirmative vote of a majority of the voting rights represented by attending shareholders. Such votes shall represent one fourth (1/4) or more of the total number of shares issued by the company.

Article 32 (Exercise of Voting Rights in Writing)

• ① When he/she decides a written resolution at the Board meeting to determine a convocation of a general meeting of shareholders, a shareholder may exercise their voting rights in writing without attending a meeting in person (Amended on March 28, 2013).
• ② In case of Section 1, the company shall attach the written document needed for the exercise of shareholders' voting rights and reference materials to the convocation notice of a general meeting of shareholders.(Amended on March 28, 2013).
• ③ Shareholders who want to exercise their voting rights in writing shall fill necessary items in a written form specified Section 2 and submit it to the company a day before the scheduled start date of the meeting.

Article 33 (Minutes of the General Meeting of Shareholders) The methods, procedures, and results of the general meeting of shareholders shall be written in the minutes. The chairman and directors present at the meeting shall sign/seal or sign it. The minutes shall be placed on the head office and branch offices.

Chapter 5 Directors and the Board of Directors

Article 34 (Number of Directors)

• ① There shall be no more than fifteen (15) directors of the company.
• ② There shall three (3) types of directors, inside directors, outside directors, and directors not engaged in business affairs. The number of outside directors shall be three (3) or more, a majority of the total number of directors.

Article 35 (Appointment of Directors)

• ① Directors shall be appointed at a general meeting of shareholders
• ② Outside directors shall be appointed at a general meeting of shareholders through the recommendation of the Outside Director Nomination Committee according to the regulation in Article 47.

Article 36 (Director's Term of Office)

• ① The director's term shall be determined at a general meeting of shareholders within the time period not exceeding three (3) years after the appointment. The consecutive appointment may be permitted. However, The outsider director's term shall be two (2) years. The outside director may consecutively hold office on an annual basis, but not for more than five (5) year.
• ② The outside director shall be considered to hold his/her office consecutively when he/she is re-appointed within two (2) years after the term in office ends. However, it is exceptional when the total term of office does not exceed five (5) years because he or she has held office by the end date of an ordinary general meeting of shareholders related to the settlement period for five (5) years during the term.
• ③ The outside director's term specified in Section 2, shall be calculated including the term that he/she had held office as an outside director in subsidiaries (Limited to the person appointed as an outside director of the company within two (2) years after resignation.)
• ④ The term specified in Section 1 shall be extended up to the date that an annual general meeting of shareholders ends when the director's term ends before the end date of an annual general meeting of shareholders for the relevant settlement period after the last settlement period ends (Amended on March 28, 2013.)
• ⑤ The director's term shall be computed from the date that he/she takes office unless otherwise determined at a general meeting of shareholders.

Article 37 (Eligibility Requirements for Outside Directors)

• ① The person who falls under any of the cases specified in following clauses shall not qualify as an outside director. The outside director shall lose his/her office when he/she comes to fall under any of these cases after taking office.
  • 1. The person not eligible for an outside director according to the Financial Holding Companies Act and relevant laws;
  • 2. The person serving as an outside director with another company, which is not an affiliate of the company and is engaged in the business of finance(revised on March 25, 2016).
• ② The outside director shall fall under any of the cases specified in the following clauses as one who has rich professional knowledge or practical experience in the relevant field such as finance, economy, law, accounting and mass media:
  • 1. Professional managers (one who had or has worked in a position of an executive or higher/the same level at the corporation under the external audit according to 「Corporation's External Audit Act」 or the corresponding foreign law);
  • 2. The person who had ever been engaged in the work related to the qualifications of attorneys or certified public accountants for five (5) or more years;
  • 3. The person who had ever worked in the position of at least a researcher or a full-time lecturer in the relevant field in a research institute or college for five (5) or more years as one who has a Master's degree or a higher degree in the field of finance, economy, management, law and accounting;
  • 4. The person who had ever worked in a financial company for ten (10) or more years;
  • 5. The person who had ever performed finance or accounting-related works as an executive for five (5) or more years or as an employee for ten (10) or more years at the stock certificate listed corporation (the stock certificate listed corporation in accordance with 「Capital Market and Financial Investment Business Act」);
  • 6. The person who had ever been engaged in finance or accounting-related works or supervisory works for five (5) or more years at the government, the local government, a public institution in accordance with 「Act on the Management of Public Institutions 」, Financial Supervisory Service, Korea Exchange in accordance with 「Capital Market and Financial Investment Business Act」 or the financial investment business-related institution (excluding financial investment-related organizations) in accordance with Article 9, Section 17 of the same law
  • 7. The person who had been engaged in financial or accounting-related works for five (5) or more years at the institution ((A considerable number of foreign financial institutions are included.) subject to the inspection in accordance with Article 38 of 「Act Related to the Establishment of Financial Service Commission and Others」.
  • 8. The person recognized to have the qualification corresponding to Clause 1 to 7 by the Board of Directors or the Outside Director Nomination Committee as one who has rich professional knowledge or practical experience.

Article 38 (Director By-election)

• ① When the office of a director is vacated, a successor shall be appointed at a general meeting of shareholders. However, it is exceptional when the quorum prescribed in Article 34 is met and there is no difficulty performing tasks.
• ② when the quorum prescribed in Article 34 is not met due to a good reason such as an outside director's resignation or death, the requirement shall be met at a general meeting of shareholders first convened after the reason occurs.
• ③ The term of a director appointed through a by-election shall be the remaining term of his or her predecessor, computing from the date that he/she is appointed.

Article 39 (Appointment of the Representative Director and others)

• ① The representative director shall be appointed among directors by resolution of the Board of Directors.
• ② The company may appoint several vice CEOs, presidents, and vice presidents among directors and one of them as the representative director by resolution of the Board of Directors.

Article 40 (Directors’ Duties)

• ① The representative director shall represent the company, perform the matters resolved by the Board of Directors, and generalize corporate works in accordance with the determination made by the Board of Directors.
• ② Directors shall serve the representative director and dividedly perform corporate works in accordance with the determination made by the Board of Directors.

Article 41 (Directors’ Obligations)

• ① Directors shall faithfully perform their duties for the company according to the regulations prescribed in the law and the Articles of Incorporation.
• ② When they find the fact which may significantly damage the company, directors shall immediately report it to the Audit Committee.

Article 42 (Composition of the Board of Directors and Convocation of a Board Meeting)

• ① The Board of Directors shall be composed of directors and resolve the important matters of corporate works.
• ② The Board of Directors meeting shall be held more than once per quarter and frequently convened if necessary.
• ③ The chairman of the Board of Directors shall notify every director of the convocation of a Board meeting seven (7) days before the start of the meeting. When the chairman is not in his/her office or absent due to unforeseen circumstances, the director determined by the Board of Directors shall deputize for the chairman in the exercise of the latter's duties. However, the convocation period may be shortened when there is an urgent reason. The convocation procedures may be omitted with the consent of the entire directors.

Article 43 (Chairman of the Board of Directors)

• ① The chairman of the Board of Directors shall be appointed among directors by resolution of the Board of Directors.
• ② When it appoints a non-outside director as the chairman, the Board of Directors shall appoint the lead outside director representing outside directors.

Article 44 (Matters deliberated and Resolved by the Board of Directors)

• ① The board of Directors shall deliberate and resolve the matters prescribed in the following clauses (Newly enacted on March 25, 2016)
  • 1. Matters related to management goals and evaluations
  • 2. Matters related to changes in the articles of foundation
  • 3. Matters related to budgets and accounts
  • 4. Matters related to significant organizational changes such as dissolution, business transfer, and merger (Newly enacted on February 4, 2015.)
  • 5. Matters related to the enactment, revision, and abolition of the standards for internal control in accordance with Article 24 of the law on the corporate governance of financial institutions,and those for the risk management in accordnace with Article 27 of the same law
  • 6. Matters related to the establishment of governance policies such as CEO's management succession
  • 7. Matters related to the supervision of the conflict of interest between the company and a large shareholder, an executive, and others
  • 8. Matters prescribed in other laws and the Board of Directors regulations
• ② The details prescribed in the clauses of Section 1 and related to the operation of the Board of Directors shall be determined by the resolution of the Board of Directors (newly enacted on March 25, 2016)

Article 45 (Resolution Method of the Board of Directors)

• ① Unless otherwise provided in the law or the Articles of Incorporation, all resolutions of the Board of Directors shall require the attendance of a majority of the directors on the register and the affirmative vote of a majority of directors present at the meeting. However, it shall be required to receive the affirmative vote of a majority of directors on the register for a change in the Articles of Incorporation, the appointment of the representative director and the matters requiring the resolution of the general meeting of shareholders (Amended on April 15, 2012).
• ② The board of directors may allow all or part of directors to participate in the resolution process through an effective means of two-way communications that all directors can transmit and receive voices at the same time without attending a meeting in person. In this case, the relevant directors shall be deemed to have attended the meeting of the Board of Directors in person (Amended on April 15, 2012).
• ③ The director who has a special interest in the resolution shall not exercise his/her voting right.

Article 46 (Board Meeting Minutes)

• ① The proceedings of the Board of Directors meeting shall be written in the board meeting minutes.
• ② The agenda, methods, procedures, results, dissenting directors, and dissenting opinions shall be written in the board meeting mutes. Directors present at the board meeting shall sign and seal or sign it.

Article 47 (Rights and Responsibilities of the Board of Director Related to Subsidiaries and Others)

• ① The Board of Directors shall have the rights to advise, recommend corrective measures, and make a request for data submission in relation to the management issues of subsidiaries within the legal limit.
• ② The Board of Directors and directors shall not do any of the acts described in the following clauses in exercising the rights specified in Section 1:
  • 1. Do not undermine the management soundness of subsidiaries and others, consumer rights and interests, and a sound order in financial transactions;
  • 2. Do not leak the business secrets of the company obtained while performing their jobs even after retirement as well as during their terms of office;
  • 3. Do not violate relevant laws.
• ③ The Board of Directors shall prepare the internal control standards needed to supervise all subsidiaries and others and appoint a compliance office to check up the compliance.

Article 48 (Committees)

• ① The company have the committees specified in the following clauses within the Board of Directors. If necessary, it may establish additional temporary committees.
  • 1. The Board of Directors Steering Committee
  • 2. The Audit Committee
  • 3. The Outside Director Nomination Committee
  • 4. The Risk Management Committee
  • 5. The Management Development and Compensation Committee
  • 6. The Audit Committee Member Nomination Committee
• ② The detailed matters related to the composition, rights, management and others of each committee shall be determined by resolution of the Board of Directors.

Article 49 (Directors' Remuneration) The remuneration and severance pay for directors shall be determined by resolution of a general meeting of shareholders.

Article 50 (Advisors and Others) The company may have advisors, honorary directors, advisory committee members and others by resolution of the Board of Directors.

Chapter 6 The Audit Committee

Article 51 (Composition of the Audit Committee)

• ① The company shall have the Audit Committee specified in the relevant law such as "the Financial Holding Companies Act" in substitution for the auditor.
• ② The candidates for the members of the Audit Committee shall be recommended by the Audit Committee Member Nomination Committee. In this case, the Audit Committee Member Nomination Committee shall require the affirmative vote of two-third (2/3) of outside directors on the register for recommendation.
• ③ The Audit Committee shall consist of three (3) or more directors and meet all requirements in the following clauses:
  • 1. The number of outside directors shall form no less than two-third (2/3) of committee members on the register;
  • 2. One or more of committee members shall be accounting or financial experts, specified in Article 41, Section 2, Clause 2 of the Financial Holding Companies Act;
• ④ The members of the Audit Committee shall have any of the qualifications specified in the following clauses. In this case, one or more of committee members shall be accounting or financial experts, defined by the relevant law.
  • 1. The person who had ever been engaged in the work related to the qualifications of a certified public accountant for five (5) or more years;
  • 2. The person who had ever worked in the position of at least a researcher or a full-time lecturer in the finance or accounting-related field in a research institute or college for five (5) or more years as one who has a Master's degree or a higher degree in the finance or accounting field;
  • 3. The person who had ever worked as an executive for five (5) or more years or as an employee for ten (10) or more years in the finance or accounting-related field at the stock certificate listed corporation;
  • 4. The person who had ever been engaged in finance or accounting-related works or supervisory works for five (5) or more years at the government, the local government, a public institution in accordance with 「Act on the Management of Public Institutions 」, Financial Supervisory Service, Korea Exchange in accordance with 「Capital Market and Financial Investment Business Act」 or the financial investment business-related institution (excluding financial investment-related organizations) in accordance with Article 9, Section 17 of the same law
  • 5. The person who had been engaged in financial or accounting-related works for five (5) or more years at the institution ((A considerable number of foreign financial institutions are included.) subject to the inspection in accordance with Article 38 of 「Act Related to the Establishment of Financial Service Commission and Others」.
• ⑤ The Audit Committee shall appoint the chairman representing the committee among members who are outside directors by its resolution.
• ⑥ When the quorum prescribed in Section 3 is not met due to a good reason such as an outside director's resignation or death, the requirement shall be met at a general meeting of shareholders first convened after the reason occurs.

Article 52 (Duties of the Audit Committee)

• ① The Audit Committee shall be obligated to monitor and audit the legality of directors' job performance. It may request directors to make a business report or investigate the works and property status of the company anytime.
• ② The Audit Committee shall be obligated to audit agendas and documents which will be submitted to a general meeting of shareholders, violations against the law or the articles of incorporation, or significantly unjust matters. The chairman shall state his/her opinions at a general meeting of shareholders.
• ③ The Audit Committee may the purpose of the meeting and the reason for convocation in a written document and submit it to the chairman of the Board of Directors to request the convocation of a Board of Directors meeting (newly enacted on April 15, 2012).
• ④ When the chairman of the Board of Directors does not convene a board meeting without delay in spite of the request specified in Section 3, the Audit Committee requesting the convocation may convene the board meeting (newly enacted on April 15, 2012).
• ⑤ The auditor shall submit the purpose of a meeting and the reasons for the convocation to the Board of Directors in writing to request to call an extraordinary general meeting.
• ⑥ The auditor may request a subsidiary to make a business report of a subsidiary company when he or she needs it to perform his or her duties within the legal limit. In this case, the auditor can audit the business and the financial status of the subsidiary company when the subsidiary company does not report without delay or it is necessary to identify the content of the report.
• ⑦ The regulations specified in Article 46, Section 2 shall apply to the responsibilities of the Audit Committee and the members of the Audit Committee in exercising the rights specified in Section 6.
• ⑧ The Audit Committee shall approve the appointment of an external auditor.
• ⑨ The Audit Committee shall resolve the matters prescribed in the relevant law and delegated by the Board of Directors in addition to the matters specified in Section 1 or 8 of this article.
• ⑩ the Board of Directors shall not resolve the solution of the Audit Committee again.

Article 53 (Audit Record) The Audit Committee shall write the audit record related to the audit implemented. The methods, procedures and results of the audit shall be written in the audit record. The member of the Audit Committee, conducting the audit, shall sign and seal, or sign it.

Chapter 7 Calculation

Article 54 (Fiscal Year) The fiscal year of the company shall begin on January 1, and end on December 31 every year.

Article 55 (Preparation and Arrangement of Financial Statements and Business Reports)

• ① The representative director of the company shall prepare the documents specified in the following clauses, the detailed statement specified in Clause 1 or 3, and business reports, receive an approval from the Board of Directors, and submit them to the Audit Committee at the end of each fiscal year (Amended on April 15, 2012).
  • 1. Balance sheet
  • 2. Income statement
  • 3. In addition, documents prescribed in the Enforcement Decree of Commercial Code as those indicating the financial status and management performance of the company (Amended on April 15, 2012).
  • 4. Consolidated financial statements (newly enacted on April 15, 2012).
• ② The Audit Committee shall prepare the auditor's report to submit it to the representative director, after receiving documents specified in the previous clause.
• ③ The representative director shall place the documents specified in Section 1 and the auditor’s report at the head office for 5 years and the copies at branch offices for 3 years one week before the start date of a general meeting of shareholders (Amended on April 15, 2012).
• ④ The representative director shall submit the documents specified in each clause of Section 1 to make a request for an approval, and report the business report to an ordinary general meeting of shareholders.(Amended on April 15, 2012).
• ⑤ The representative director shall publicly announce the document determined by Finance Service Commission among the balance sheet, the income statement, and consolidated financial statements in accordance with 「Act on External Audit of Stock Companies」, and the external auditor's opinions within three (3) months after the settlement date when getting approval from a general meeting of shareholders for the documents specified in all clauses of Section 1. In this case, an announcement may be made via the electronic method for document announcement prescribed in the regulation of Article 55 - 2 in the Financial Holding Companies Act in spite of the regulation in Article 4 (Amended on April 15, 2012).

Article 56 (Appointment of the External Auditor) The company shall appoint the external auditor with the approval of the Audit Committee. It shall report the appointment of the external auditor to an ordinary general meeting of shareholders first convened after the appointment, notify the directors at the recent closing date of the shareholder list of the fact in a written or electronic document, or publicly announce the fact on the website of the company the end date of the fiscal year subject to an audit.

Article 57 (Appropriation of Profits) The company shall appropriate the unappropriated profits of every fiscal year as follows:

• 1. Profit reserves
• 2. Other legal reserves
• 3. Dividends
• 4. Voluntary reserves
• 5. Other appropriated profits

Article 58 (Dividends)

• ① Dividends may be divided into cash and share dividends.
• ② In case of share dividends, the company may distribute different types of shares by resolution of a general meeting of shareholders when it issues several types of shares.
• ③ The dividend prescribed in Section 1 shall be distributed to shareholders currently stated on a list of shareholders or registered pledgees at the end of the settlement period every year.

Article 59 (Interim Dividends)

• ① The company may distribute interim dividends to shareholders currently stated on a list of shareholders as of July 1 (00:00) according to the regulation specified in Article 462-3 of Commercial Code. Interim dividends shall be cash dividends.
• ② The interim dividend specified in Section 1 shall be determined by resolution of the Board of Directors. The resolution shall be adopted within forty-five (45) days after the base date specified in Section 1.
• ③ The interim dividend shall be limited to the amount after the amount prescribed in the following clauses is deducted from the net asset value in the balance sheet of the previous settlement period:
  • 1. Capital amount for the previous settlement period (Amended on April 15, 2012);
  • 2. The amount that capital and profit reserves accumulated up to the previous settlement period are added up;
  • 3. Unrealized profits prescribed in the Enforcement Decree of Commercial Code (newly enacted on April 15, 2012);
  • 4. The dividend amount determined at the annual general meeting of shareholders in the previous settlement period;
  • 5. Voluntary reserves accumulated up to the previous settlement period for special purposes according to the regulation in the articles of incorporation or by resolution of a general meeting of shareholders;
  • 6. The total amount of profit reserves to be accumulated up to the relevant settlement period according to the interim dividend.
• ④ As for the interim dividend when new shares are issued before the base date of the interim dividend after the fiscal year starts (including capital transfer from reserves, share dividends, a conversion request on convertible bonds, and the exercise of the preemptive right of bonds with warrants), the relevant new shares shall be considered to be issued at the end of the previous fiscal year.
• ⑤ The dividend yield equivalent to one on common shares shall apply to an interim dividend on class shares. However, if it is differently determined by the Board of Directors when class shares are issued, the relevant dividend yield shall apply (Amended on March 28, 2013).

Article 60 (Extinctive Prescription of Dividend Rights)

• ① If dividend rights have not been exercised for 5 years, the extinctive prescription shall be completed.
• ② The dividend incurred by the completion of the prescription in Section 1 shall belong to the company.

Article 61 (Supplementary Provisions)The resolution of the Board of Directors, a general meeting of shareholders, Commercial Code, or other laws shall apply to the matters not defined in the Articles of Incorporation.

Additional Provision

Article 1 (Enforcement Date) The Articles of Incorporation shall enter in force after the date that the establishment of the company is registered.

Article 2 (The First Fiscal Year after the Establishment of the Company) In spite of the regulation in Article 53 of the Articles of Incorporation, the first fiscal year of the company shall be from the date of establishment to December 31, 2011.

Article 3 (The First Transfer Agent after the Establishment of the Company) The first transfer agent after the establishment of the company shall be Korea Securities Depository.

Article 4 (Appointment of the first directors and the first representative Director after the Establishment of the Company) In spite of the regulations specified in Article 35 and 39 of the Articles of Incorporation, the first directors and the first representative director after the establishment of the company shall be appointed through the approval for the share transfer plan of the subsidiaries subject to stock transfer companies.

Article 5 (The First Director's Term after the Establishment of the Company) In spite of the regulation in Article 36 of the Articles of Incorporation, the first directors' terms after the establishment of the company shall be determined through the approval for the share transfer plan of the subsidiaries subject to stock transfer companies

Article 6 (Appointment of the First Outside Directors after the Establishment of the Company) In spite of the regulation in Article 36 of the Articles of Incorporation, the first outside directors after the establishment of the company shall be appointed through the approval for the share transfer plan of the subsidiaries subject to stock transfer companies without the recommendation of the Outside Director Nomination Committee.

Article 7 (Appointment of the First Members of the Audit Committee after the Establishment of the Company) In spite of the regulation in Article 50, Section 2 of the Articles of Incorporation, the first members of the Audit Committee after the establishment of the company shall be appointed through the approval for the share transfer plan of the subsidiaries subject to stock transfer companies without the recommendation of the Audit Committee Member Nomination Committee.

Article 8 (Directors' Remuneration after the Establishment of the Company ) In spite of the regulation in Article 36 of the Articles of Incorporation, the first directors' remuneration in the first fiscal year after the establishment of the company shall be determined at the Board of Directors meeting first held after establishment of the company within a range of 1.5 billion won.

Article 9 (Stock Transfer Companies ) The following stock transfer companies shall jointly prepare the Articles of Incorporation to establish the company and sign/seal it on January 18, 2011.

Additional Provision

Article 1 (Enforcement Date) This regulation shall enter into force on April 15, 2012.

Additional Provision

Article 1 (Enforcement Date) This regulation shall enter into force on March 28, 2013.

Additional Provision

Article 1 (Enforcement Date) This regulation shall enter into force on March 28, 2014.

Additional Provision

Article 1 (Enforcement Date) This regulation shall enter into force on March 27, 2015.

• Busan Bank
  30, Munhyeongeumyung-ro, Nam-gu, Busan
  Busan Bank CEO Se-Whan Sung
• BNK Investment Securities
  1, Saessak-ro, Busanjin-gu, Busan, 3rd and 4th floor of Bujeondong Branch of Busan Bank
  BNK Securities CEO Hyo-Joon An
• BNK Credit Information
  92, Beomil-ro, Dong-gu, Busan, 5th floor of Beomildong Branch of Busan Bank
  CEO of BNK Credit Information Myung–Hwan Sung
• BNK Capital CEO
  1, Saessak-ro, Busanjin-gu, Busan, 9th floor of Bujeondong Branch of Busan Bank
  BNK Capital CEO Il-Soo Kim