6-K 1 d373194d6k.htm FORM 6-K Form 6-K
Table of Contents

 

 

UNITED STATES

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 August 2022

Commission File Number: 000-53445

 

 

KB Financial Group Inc.

(Translation of registrant’s name into English)

 

 

26, Gukjegeumyung-ro 8-gil, Yeongdeungpo-gu, Seoul 07331, Korea

(Address of principal executive office)

 

 

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  ☒             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 submitted to furnish a report or other document that the registrant 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.

 

 

 


Table of Contents


Table of Contents

TABLE OF CONTENTS

 

1.

  Introduction to the Company

1.1.

  Business Purpose

1.2.

  History

1.3.

  Overview of the Business Group

1.4.

  Capital Structure

1.5.

  Dividends

1.6.

  Amendments to the Articles of Incorporation

2.

  Business

2.1.

  Results of Operations

2.2.

  Sources and Uses of Funds

2.3.

  Other Information to Consider in Making an Investment Decision

3.

  Financial Information

3.1.

  Consolidated Financial Information

3.2.

  Separate Financial Information

3.3.

  Other Selected Financial Data

3.4.

  Other Financial Information

4.

  Independent Public Accountants

4.1.

  Audit/ Review Services

4.2.

  Public Company Accounting Oversight Board (“PCAOB”) Audit Services

4.3.

  Change in Auditor

5.

  Corporate Governance and Affiliated Companies

5.1.

  Board of Directors & Committees under the Board

5.2.

  Audit Committee

5.3.

  Compensation to Directors

5.4.

  Top 5 Highest-Paid Individuals

5.5.

  Affiliated Companies

6.

  Directors, Senior Management and Employees

6.1.

  Executive Directors

6.2.

  Non-standing Directors

6.3.

  Non-executive Directors

6.4.

  Senior Management

6.5.

  Employees

7.

  Major Shareholders and Related Party Transactions

7.1.

  Major Shareholders

7.2.

  Changes in the Largest Shareholder

7.3.

  Employee Stock Ownership Association

7.4.

  Investments in Affiliated Companies

7.5.

  Related Party Transactions


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Summary of 2022 First Half Business Report

On August 16, 2022, KB Financial Group Inc. (“KB Financial Group” or the “Group”) filed its business report for the first half of 2022 (the “Business Report”) with the Financial Services Commission of Korea and the Korea Exchange. This is a summary of the Business Report translated into English.

Except where indicated otherwise, financial information contained in this summary have been prepared in accordance with the Korean equivalent of International Financial Reporting Standards (“K-IFRS”), which differ in certain important respects from generally accepted accounting principles in the United States.

All references to “KB Financial Group,” “we,” “us” or the “Company” are to KB Financial Group and, unless the context requires otherwise, its subsidiaries. In addition, all references to “Won” or “KRW” in this document are to the currency of the Republic of Korea.


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1. Introduction to the Company

1.1. Business Purpose

KB Financial Group is a financial holding company that was established in September 2008. Its main business purpose is to hold shares in companies that are engaged in financial or related services, as well as govern and manage such companies. Its consolidated subsidiaries are primarily engaged in the banking business, as well as the credit card business, the financial investment business, the insurance business and other related businesses.

1.2. History

 

   

September 26, 2008

Obtained final approval from the Financial Services Commission to establish a financial holding company

 

   

September 29, 2008

Establishment of the Company through a comprehensive stock transfer and listing on the New York Stock Exchange

 

   

October 10, 2008

Listing on the Korea Exchange

 

   

October 20, 2008

The largest shareholder of the Company changed from the Korean National Pension Service to ING Bank N.V.

 

   

October 31, 2008

The largest shareholder of the Company changed from ING Bank N.V. to the Korean National Pension Service

 

   

May 4, 2009

Added Kookmin Bank Cambodia PLC. as a second-tier subsidiary

 

   

June 22, 2009

Added KB Life Insurance Co., Ltd. (“KB Life Insurance”), formerly a second-tier subsidiary, as a first-tier subsidiary

 

   

July 1, 2009

Changed the name of KB Venture Capital Co., Ltd. to KB Investment Co., Ltd. (“KB Investment”)

 

   

January 22, 2010

The largest shareholder of the Company changed from the Korean National Pension Service to ING Bank N.V.

 

   

March 2, 2011

Added KB Kookmin Card Co., Ltd. (“KB Kookmin Card”) as a first-tier subsidiary

 

   

March 14, 2011

KB Futures Co., Ltd. was merged into KB Investment & Securities Co., Ltd. (“KB Investment & Securities”)

 

   

July 8, 2011

The largest shareholder of the Company changed from ING Bank N.V. to the Korean National Pension Service


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January 13, 2012

Added KB Savings Bank Co., Ltd. (“KB Savings Bank”) as a first-tier subsidiary

 

   

May 11, 2012

Added KoFC POSCO HANWHA KB Shared Growth No. 2. Private Equity Fund as a second-tier subsidiary

 

   

July 2, 2012

Added KoFC Value-up Private Equity Fund as a second-tier subsidiary

 

   

October 10, 2012

Added Kookmin Bank (China) Ltd. as a second-tier subsidiary

 

   

June 20, 2013

Acquired the remaining shares of KB Life Insurance, which increased the Company’s shareholding to 100%

 

   

September 2, 2013

Added Yehansoul Savings Bank as a first-tier subsidiary

 

   

January 13, 2014

Yehansoul Savings Bank was merged into KB Savings Bank

 

   

March 20, 2014

Added KB Capital Co., Ltd. (“KB Capital”) as a first-tier subsidiary

 

   

June 24, 2015

Added KB Insurance Co., Ltd. (“KB Insurance”) as a non-consolidated first-tier subsidiary

 

   

November 23, 2015

Acquired additional shares of KB Insurance, which increased the Company’s shareholding from 19.47% to 33.29%

 

   

May 31, 2016

Added Hyundai Securities Co., Ltd. (“Hyundai Securities”) as a non-consolidated first-tier subsidiary

 

   

June 21, 2016

Disposed of LIG Investment & Securities, Co., Ltd., a second-tier subsidiary

 

   

June 28, 2016

Acquired treasury shares of Hyundai Securities, which increased the Company’s equity ownership in Hyundai Securities from 22.56% to 29.62%

 

   

December 1, 2016

Added KB Golden Life Care Co., Ltd. as a second-tier subsidiary

 

   

December 29, 2016

Established KB Private Equity Fund III as a second-tier subsidiary

 

   

December 30, 2016

Purchased new shares of KB Insurance in a rights offering, which increased the Company’s shareholding in KB Insurance from 33.29% to 39.81%

 

   

December 30, 2016

Merged KB Investment & Securities with and into Hyundai Securities, with Hyundai Securities as the surviving entity, then changed its name to KB Securities Co., Ltd. (“KB Securities”)

 

   

February 8, 2017

Added KB KOLAO LEASING Co., Ltd. as a second-tier subsidiary


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March 8, 2017

Added KB Microfinance Myanmar Co., Ltd. as a second-tier subsidiary

 

   

May 19, 2017

Acquired additional shares of KB Insurance in a tender offer, which increased the Company’s shareholding in KB Insurance from 39.81% to 94.30%

 

   

May 19, 2017

Acquired additional shares of KB Capital in a tender offer, which increased the Company’s shareholding in KB Capital from 52.02% to 79.70%

 

   

July 7, 2017

Converted KB Insurance and KB Capital into wholly-owned subsidiaries of the Company through comprehensive stock swaps

 

   

September 29, 2017

Added KB Asset Management Singapore Pte. Ltd. as a second-tier subsidiary (changed from a second-tier subsidiary of KB Securities to a first-tier subsidiary of KB Asset Management Co., Ltd.)

 

   

October 9, 2017

Added KB SECURITIES VIETNAM JOINT STOCK COMPANY (formerly MARITIME SECURITIES INCORPORATION) as a second-tier subsidiary

 

   

October 16, 2017

Disposed of Hyundai Savings Bank, Co., Ltd., a second-tier subsidiary

 

   

December 22, 2017

Disposed of Hyundai Asset Management, Co., Ltd., a second-tier subsidiary

 

   

January 17, 2018

Added KB-TS Technology Venture Private Equity Fund as a second-tier subsidiary (equity interests of 16%, 30% and 10% held by KB Securities, Kookmin Bank and KB Capital, respectively)

 

   

July 6, 2018

Added KB Daehan Specialized Bank PLC. as a second-tier subsidiary

 

   

August 21, 2018

Added KBAM Shanghai Advisory Services Co., Ltd. as a second-tier subsidiary

 

   

December 31, 2018

Added KB-Stonebridge Secondary Private Equity Fund as a second-tier subsidiary

 

   

January 9, 2019

Added KB-SPROTT Renewable Private Equity Fund I as a second-tier subsidiary

 

   

September 17, 2019

Added KB-SP Private Equity Fund IV as a second-tier subsidiary

 

   

February 28, 2020

Added KB-NAU Special Situation Corporate Restructuring Private Equity Fund as a second-tier subsidiary

 

   

April 10, 2020

Added PRASAC Microfinance Institution PLC. as a second-tier subsidiary


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May 18, 2020

Added PT Sunindo Kookmin Best Finance as a second-tier subsidiary

 

   

July 3, 2020

Added PT KB Finansia Multi Finance as a second-tier subsidiary

 

   

August 31, 2020

Added Prudential Life Insurance Company of Korea, Ltd. (“Prudential Life Insurance”) as a first-tier subsidiary

 

   

September 2, 2020

Added PT Bank Bukopin Tbk as a second-tier subsidiary (renamed PT Bank KB Bukopin, Tbk. on February 8, 2021)

 

   

October 28, 2020

Added KB Material and Parts Private Equity Fund I as a second-tier subsidiary

 

   

December 4, 2020

Added FineKB Private Equity Fund I as a second-tier subsidiary

 

   

December 16, 2020

Added KB FINA JOINT STOCK COMPANY as a second-tier subsidiary

 

   

December 23, 2020

Added KB Bank Myanmar Co., Ltd. as a second-tier subsidiary

 

   

January 15, 2021

Added KB Bio Private Equity Fund III as a second-tier subsidiary

 

   

January 29, 2021

Added J Fintech Co., Ltd as a second-tier subsidiary (renamed KB J Capital Co., Ltd. on February 16, 2021)

 

   

March 2, 2021

Added PT KB Data Systems Indonesia as a second-tier subsidiary

 

   

September 23, 2021

Added KB Bio Global Expansion Private Equity Fund I as a second-tier subsidiary

 

   

October 8, 2021

Added KB Healthcare Co., Ltd. as a second-tier subsidiary

 

   

December 24, 2021

Added KB Co-investment Private Equity Fund I as a second-tier subsidiary

 

   

February 8, 2022

Liquidated KoFC POSCO HANWHA KB Shared Growth No. 2. Private Equity Fund

 

   

February 14, 2022

Added PT KB Valbury Sekuritas as a second-tier subsidiary

 

   

April 22, 2022

Added KB-Badgers Future Mobility ESG Private Equity Fund I as a second-tier subsidiary

 

   

May 10, 2022

Added KB Life Partners Co., Ltd. as a second-tier subsidiary


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1.3.

Overview of the Business Group

 

               (As of June 30, 2022)

Type

  

Name of Company

  

Controlling Company

  

Remarks

Holding Company

   KB Financial Group    —      Listed

1st Tier Subsidiaries

   Kookmin Bank    KB Financial Group    Not listed
   KB Securities Co., Ltd.    KB Financial Group    Not listed
   KB Insurance Co., Ltd.    KB Financial Group    Not listed
   KB Kookmin Card Co., Ltd.    KB Financial Group    Not listed
   Prudential Life Insurance Company of
Korea, Ltd.
   KB Financial Group    Not listed
   KB Asset Management Co., Ltd.    KB Financial Group    Not listed
   KB Capital Co., Ltd.    KB Financial Group    Not listed
   KB Life Insurance Co., Ltd.    KB Financial Group    Not listed
   KB Real Estate Trust Co., Ltd.    KB Financial Group    Not listed
   KB Savings Bank Co., Ltd.    KB Financial Group    Not listed
   KB Investment Co., Ltd.    KB Financial Group    Not listed
   KB Data Systems Co., Ltd.    KB Financial Group    Not listed
   KB Credit Information Co., Ltd.    KB Financial Group    Not listed

2nd Tier Subsidiaries

   Kookmin Bank Cambodia PLC.    Kookmin Bank   

Not listed

(Overseas)

   Kookmin Bank (China) Ltd.    Kookmin Bank   

Not listed

(Overseas)

   KB Microfinance Myanmar Co., Ltd.    Kookmin Bank   

Not listed

(Overseas)

   KB Bank Myanmar Co., Ltd.    Kookmin Bank   

Not listed

(Overseas)

   PRASAC Microfinance Institution PLC.    Kookmin Bank   

Not listed

(Overseas)

   PT Bank KB Bukopin Tbk.(1)    Kookmin Bank   

Listed

(Overseas)

   KBFG Securities America Inc.    KB Securities   

Not listed

(Overseas)

   KB Securities Hong Kong Ltd.    KB Securities   

Not listed

(Overseas)

   Keystone-Hyundai Securities No. 1
Private Equity Fund
   KB Securities    Not listed
   KB SECURITIES VIETNAM JOINT
STOCK COMPANY
   KB Securities   

Not listed

(Overseas)

   KB-TS Technology Venture Private
Equity Fund
   KB Securities    Not listed
   KB-Stonebridge Secondary Private
Equity Fund
   KB Securities    Not listed
   KB-SPROTT Renewable Private Equity Fund I    KB Securities    Not listed
   KB-SP Private Equity Fund IV    KB Securities    Not listed
   KB-NAU Special Situation Corporate Restructuring Private Equity Fund    KB Securities    Not listed
   KB Material and Parts Private Equity
Fund I
   KB Securities    Not listed
   KB FINA JOINT STOCK COMPANY    KB Securities   

Not listed

(Overseas)

   KB Bio Private Equity Fund III    KB Securities    Not listed
   PT KB Valbury Sekuritas(2)    KB Securities   

Not listed

(Overseas)

   KB Claims Survey & Adjusting Co., Ltd.    KB Insurance    Not listed
   KB Sonbo CNS    KB Insurance    Not listed
   Leading Insurance Services, Inc.    KB Insurance   

Not listed

(Overseas)

   KBFG Insurance (China) Co., Ltd.(3)    KB Insurance   

Not listed

(Overseas)

   PT. KB Insurance Indonesia    KB Insurance   

Not listed

(Overseas)

   KB Golden Life Care Co., Ltd.    KB Insurance    Not listed
   KB Healthcare Co., Ltd.    KB Insurance    Not listed
   KB Daehan Specialized Bank PLC.    KB Kookmin Card   

Not listed

(Overseas)

   PT KB Finansia Multi Finance    KB Kookmin Card   

Not listed

(Overseas)

   KB J Capital Co., Ltd(4)    KB Kookmin Card   

Not listed

(Overseas)

   KB Life Partners Co., Ltd.(5)    Prudential Life Insurance Company of Korea    Not listed
   KB Asset Management Singapore Pte. Ltd.    KB Asset Management   

Not listed

(Overseas)

   KBAM Shanghai Advisory Services Co., Ltd.    KB Asset Management   

Not listed

(Overseas)

   KB Co-investment Private Equity Fund I    KB Asset Management    Not listed
   KB KOLAO LEASING Co., Ltd.    KB Capital   

Not listed

(Overseas)

   PT Sunindo Kookmin Best Finance    KB Capital   

Not listed

(Overseas)

   KoFC Value-up Private Equity Fund    KB Investment    Not listed
   FineKB Private Equity Fund I    KB Investment    Not listed
   KB Bio Global Expansion Private Equity Fund I    KB Investment    Not listed
   KB-Badgers Future Mobility ESG Private Equity Fund I(6)    KB Investment    Not listed
   PT KB Data Systems Indonesia    KB Data Systems   

Not listed

(Overseas)

3rd Tier Subsidiaries

   PT Bukopin Finance    PT Bank KB Bukopin Tbk.   

Not listed

(Overseas)

   PT Bank Syariah Bukopin    PT Bank KB Bukopin Tbk.   

Not listed

(Overseas)

   PT KB Valbury Capital Management(7)    PT KB Valbury Sekuritas   

Not listed

(Overseas)

   Mangrove Master Fund    KB Asset Management Singapore Pte. Ltd.   

Not listed

(Overseas)

   Mangrove Feeder Fund    KB Asset Management Singapore Pte. Ltd.   

Not listed

(Overseas)


Table of Contents
Notes:

(1) Renamed to PT Bank KB Bukopin, Tbk. from PT Bank Bukopin, Tbk. on February 8, 2021

(2) Added PT KB Valbury Sekuritas as a second-tier subsidiary on February 14, 2022

(3) Renamed to KBFG Insurance (China) Co., Ltd. from LIG Insurance (China) Co., Ltd. on April 9, 2021

(4) Renamed to KB J Capital Co., Ltd from J Fintech Co., Ltd on February 16, 2021

(5) Added KB Life Partners Co., Ltd. as a second-tier subsidiary on May 10, 2022

(6) Added KB-Badgers Future Mobility ESG Private Equity Fund I as a second-tier subsidiary on April 22, 2022

(7) Added PT KB Valbury Capital Management as a third-tier subsidiary on February 14, 2022

1.4. Capital Structure

1.4.1. Common Shares

Changes in Capital

 

(As of June 30, 2022)    (Unit: Won, shares)

Date

   Type    Number of Shares
Issued or Cancelled
     Par Value      Price     

Remarks

September 29, 2008    Common Stock      356,351,693        5,000        48,444      Establishment of
the Company
September 2, 2009    Common Stock      30,000,000        5,000        37,250      % increase in number of common shares: 8.41865%
October 19, 2016    Common Stock      31,759,844        5,000        35,474      % increase in number of common shares: 8.22045%
December 12, 2019    Common Stock      2,303,617        5,000        —        Share Cancellation(1)
February 14, 2022    Common Stock      3,455,426        5,000        —        Share Cancellation(1)

 

Note:

(1) The cancelled shares constituted treasury shares acquired pursuant to a resolution of the board of directors of the Company within the limits of profit available for dividend payment, and as such, there was no change in paid-in capital.

Number of Shares

 

(As of June 30, 2022)    (Unit: shares)  
     Type  
     Common Shares      Preferred
Shares
     Total      Remarks  

Shares Authorized for Issuance

     1,000,000,000        —          1,000,000,000       

As specified in
the Articles of
Incorporation
 
 
 

Total Shares Issued (A)

     418,111,537        —          418,111,537        —    

Decrease in Number of Shares (B)

     5,759,043        —          5,759,043        —    

1. Capital Reduction

     —          —          —          —    

2. Cancellation

     5,759,043        —          5,759,043        Treasury Shares  

3. Redemption

     —          —          —          —    

4. Other

     —          —          —          —    

Shares Issued as of June 30, 2022 (C=A-B)

     412,352,494        —          412,352,494        —    

Treasury Shares (D)

     22,718,159        —          22,718,159        —    

Shares Outstanding (C-D)

     389,634,335        —          389,634,335        —    

 

Notes:

(1) The treasury shares above include five million treasury shares that the exchangeable bonds issued by the Company on June 30, 2020 can be exchanged for. Such treasury shares are currently deposited with Korea Securities Depositary and will be disposed upon the exercise of the exchange option of the exchangeable bonds. For more information, please refer to the Company’s report on Form 6-K furnished to the Securities and Exchange Commission on June 18, 2020.

(2) The Company cancelled 3,455,426 treasury shares on August 1, 2022, and as a result, the Company has a total of 408,897,068 issued shares and 19,262,733 treasury shares as of August 16, 2022.


Table of Contents

1.4.2. Voting Rights

 

(As of June 30, 2022)    (Unit: shares)  

Items

          Number of Shares      Notes  

Total number of issued shares

     Common shares        412,352,494        —    
     Preferred shares        —          —    

Shares without voting rights

     Common shares        22,718,159        Treasury shares  
     Preferred shares        —          —    

Shares for which voting rights cannot be exercised pursuant to the Articles of Incorporation

            —          —    

Shares for which voting rights are restricted under relevant laws and regulations

            —          —    

Shares with restored voting rights

            —          —    

Total shares for which voting rights may be exercised

     Common shares        389,634,335        —    
     Preferred shares        —          —    

 

Notes:

(1) The treasury shares above include five million treasury shares that the exchangeable bonds issued by the Company on June 30, 2020 can be exchanged for. Such treasury shares are currently deposited with the Korea Securities Depositary and will be disposed upon the exercise of the exchange option of the exchangeable bonds.

(2) The Company cancelled 3,455,426 treasury shares on August 1, 2022, and as a result, the Company has a total of 408,897,068 issued shares and 19,262,733 treasury shares as of August 16, 2022.

1.5. Dividends

KB Financial Group maintains a progressive dividend policy and aims to increase its payout ratio to 30% in the mid- to long-term, and also plans to consider acquiring and cancelling treasury shares to improve shareholder return depending on market conditions.

Although KB Financial Group has continued to increase its payout ratio, for example, from 24.8% in 2018 to 26% in 2019, it has decided on a payout ratio of 20% in 2020 based on the Financial Services Commission’s recommendation to temporarily limit the payout ratio to 20% in consideration of uncertainties related to the COVID-19 pandemic.

Following the termination of the Financial Services Commission’s recommendation as described above in 2021, KB Financial Group, for the first time in its history, announced a quarterly dividend of Won 750 per share as of June 30, 2021. KB Financial Group increased its payout ratio from 20% in 2020 to 26% in 2021, which was the same level of payout ratio as in 2019.

Starting with the first quarter of 2022, KB Financial Group has regularized the payout of a quarterly cash dividend of Won 500 per share each quarter, and it is targeting a payout ratio in 2022 that will be at least the same level as the payout ratio in 2021, which was 26%. The Group is continuing to strive to improve its shareholder value by pursuing various shareholder return policies, as demonstrated by its two cancellations of treasury shares in 2022, which were each completed in February and August of 2022.


Table of Contents
            (Unit: in millions of Won, except per share amounts and percentages)  

Items

          January 1, 2022
to June 30, 2022(1)
     January 1, 2021 to
December 31, 2021(2)
     January 1, 2020 to
December 31, 2020(3)
 

Par value per share (Won)

        5,000        5,000        5,000  

(Consolidated) Net income

        2,756,609        4,409,543        3,455,151  

(Consolidated) Earnings per share (Won)

        6,943        11,134        8,809  

Total cash dividends

        389,634        1,145,525        689,653  

Total stock dividends

        —          —          —    

(Consolidated) Cash dividend payout ratio (%)

        14.1        26.0        20.0  

Cash dividend yield (%)

     Common shares        2.1        5.2        3.9  
     —          —          —          —    

Stock dividend yield (%)

     Common shares        —          —          —    
     —          —          —          —    

Cash dividend per share (Won)

     Common shares        1,000        2,940        1,770  
     —          —          —       

Stock dividend per share

     Common shares        —          —       
     —          —          —       

 

Note:      (1) Includes a quarterly dividend amount of Won 194,817 million (Won 500 per common share) in the first quarter of fiscal year 2022, and a quarterly dividend amount of Won 194,817 million (Won 500 per common share) in the second quarter of fiscal year 2022.

 

     (2) Includes a quarterly dividend amount of Won 292,226 million (Won 750 per common share) in the second quarter of fiscal year 2021.

 

     (3) The consolidated net income for fiscal year 2020 has been restated retrospectively as Won 3,468,448 million (consolidated earnings per share of Won 8,843, consolidated cash dividend payout ratio of 19.9%) to reflect the accounting policy changes in connection with the IFRIC decision regarding K-IFRS No. 1019.

1.6. Amendments to the Articles of Incorporation

The Company’s Articles of Incorporation were most recently amended on March 20, 2020.

 

Date

  

Shareholder meeting through which
the amendments were approved and ratified

  

Major changes

  

Notes

March 20, 2020

   Annual General Meeting of Shareholders for Fiscal Year 2019    Establishment of the ESG Committee within the board of directors through the amendment of article 48    Establishment of the basis for creating a new committee within the board of directors

March 27, 2019

   Annual General Meeting of Shareholders for Fiscal Year 2018    Establishment of the basis for electronic registration of shares and bonds, and modification of the processing activities of transfer agents through the amendment of articles 9, 16, 17, 19 and 22    Amendment to articles pursuant to the Act on Electronic Registration of Stocks, Bonds, Etc. (Effective as of September 2019)

March 23, 2018

   Annual General Meeting of Shareholders for Fiscal Year 2017    Partition of the corporate governance committee according to its different functions, and implementation of changes in the appointment process of the external auditor and the shareholder meeting through which such changes must be reported, through the amendment of articles 48, 52, 55 and 56   

Establishment of the basis for creating and abolishing committees within the board of directors and;

amendment to articles pursuant to the Act on the External Audit of Stock Companies, Etc. (Effective as of November 2018)


Table of Contents

2. Business

2.1. Results of Operations

 

                   (Unit: in millions of Won)  
     For the six months
ended June 30, 2022
     For the six months
ended June 30, 2021
     For the year ended
December 31, 2021
     For the year ended
December 31, 2020
 

Net interest income

     6,295,819        5,401,073        11,229,572        9,722,274  

Interest income

     9,004,851        7,312,653        15,210,878        14,485,747  

Interest expense

     (2,709,032      (1,911,580      (3,981,306      (4,763,473

Net fee and commission income

     1,789,878        1,832,599        3,625,583        2,958,939  

Fee and commission income

     2,648,152        2,653,787        5,323,606        4,527,024  

Fee and commission expense

     (858,274      (821,188      (1,698,023      (1,568,085

Net insurance income

     354,989        335,916        556,711        299,993  

Insurance income

     8,502,813        8,259,937        16,107,858        14,386,640  

Insurance expense

     (8,147,824      (7,924,021      (15,551,147      (14,086,647

Net gains on financial assets/liabilities at fair value through profit or loss

     (145,993      517,761        995,304        1,011,366  

Net other operating expenses

     (885,445      (877,006      (1,923,567      (1,499,930

General and administrative expenses

     (3,445,904      (3,393,025      (7,200,853      (6,814,812

Operating profit before provision for credit losses

     3,963,344        3,817,318        7,282,750        5,677,830  

Provision for credit losses

     (461,341      (397,160      (1,185,133      (1,043,498

Net operating profit

     3,502,003        3,420,158        6,097,617        4,634,332  

 

Notes:

(1) Based on K-IFRS (on a consolidated basis).

(2) Figures for the six months ended June 30, 2021 have been restated retrospectively to reflect the accounting policy changes in connection with the IFRIC decision regarding K-IFRS No. 1019, and the related information is included in KB Financial Group’s consolidated financial statements attached as Exhibit 99.1 hereto.


Table of Contents
2.2.

Sources and Uses of Funds

 

  2.2.1.

Sources of Funds

 

                                                    (Unit: in millions of Won)  
          For the six months
ended June 30, 2022
     For the year ended
December 31, 2021
     For the year ended
December 31, 2020
 
     Average
Balance
     Interest Rate
(%)
     Ratio
(%)
     Average
Balance
     Interest Rate
(%)
     Ratio
(%)
     Average
Balance
     Interest Rate
(%)
     Ratio
(%)
 
  

Deposits

     328,799,963        0.95        48.78        309,428,469        0.74        49.09        286,168,968        1.07        50.88  
  

Certificate of deposit

     4,339,323        1.54        0.64        3,618,303        0.87        0.57        3,635,870        1.37        0.65  

Won Currency

  

Borrowings

     28,460,440        1.42        4.22        24,900,706        0.96        3.95        17,330,480        1.20        3.08  
  

Call money

     1,373,292        1.36        0.20        1,324,902        0.65        0.21        1,617,841        0.65        0.29  
  

Debentures

     58,258,217        2.03        8.64        57,214,310        1.82        9.08        52,843,837        2.02        9.39  
  

Others

     18,865,255        1.65        2.80        20,305,205        0.84        3.22        19,792,619        1.01        3.52  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal

     440,096,490        1.16        65.28        416,791,895        0.91        66.12        381,389,615        1.21        67.81  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Foreign Currency

  

Deposits

     30,690,498        1.60        4.55        26,607,162        1.70        4.22        20,488,109        1.46        3.64  
  

Borrowings

     19,082,642        1.26        2.83        12,976,574        1.16        2.06        12,071,802        1.81        2.15  
  

Call money

     1,221,857        1.18        0.18        995,957        0.75        0.16        976,153        0.97        0.17  
  

Debentures

     10,702,247        1.67        1.59        8,544,738        1.49        1.36        6,535,922        1.84        1.16  
  

Others

     2,021,635        0.91        0.30        2,029,862        0.82        0.32        1,126,379        1.12        0.20  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal

     63,718,879        1.48        9.45        51,154,293        1.47        8.12        41,198,365        1.60        7.32  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Others

  

Total shareholders’ equity

     49,107,906        —          7.29        46,705,724        —          7.41        41,495,072        —          7.38  
  

Allowances

     1,078,764        —          0.16        1,040,835        —          0.17        912,721        —          0.16  
  

Others

     120,082,253        —          17.82        114,646,087        —          18.18        97,476,975        —          17.33  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal

     170,268,923        —          25.27        162,392,646        —          25.76        139,884,768        —          24.87  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

        674,084,292        —          100.00        630,338,834        —          100.00        562,472,748        —          100.00  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Note:

Based on K-IFRS (on a consolidated basis).


Table of Contents
  2.2.2.

Uses of Funds

 

                                                (Unit: in millions of Won)  
          For the six months ended
June 30, 2022
    For the year ended
December 31, 2021
    For the year ended
December 31, 2020
 
     Average
Balance
    Interest
Rate (%)
     Ratio
(%)
    Average
Balance
    Interest Rate
(%)
     Ratio
(%)
    Average
Balance
    Interest Rate
(%)
     Ratio
(%)
 

Won Currency

  

Due from banks

     14,977,986       0.44        2.22       15,212,672       0.30        2.41       7,400,343       0.67        1.32  
  

Securities

     154,448,515       0.64        22.91       147,320,309       1.31        23.37       125,573,646       1.97        22.33  
  

Loans

     360,346,170       3.17        53.46       340,131,319       2.80        53.96       315,871,106       2.98        56.16  
  

Guarantee payments under payment guarantee

     3,662       0.50        —         5,053       1.31        —         13,421       0.73        —    
  

Call loan

     745,187       1.44        0.11       695,721       0.67        0.11       885,951       0.73        0.16  
  

Private placement corporate bonds

     702,520       3.20        0.10       882,497       3.02        0.14       1,264,212       3.98        0.22  
  

Credit cards

     21,296,624       6.94        3.16       19,862,308       7.09        3.15       18,560,207       7.57        3.30  
  

Others

     3,989,918       9.16        0.60       4,193,384       6.53        0.67       4,614,823       5.04        0.82  
  

Allowance

     (2,676,884     —          (0.40     (2,480,441     —          (0.39     (2,416,823     —          (0.43
     

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Subtotal

        553,833,698       2.59        82.16       525,822,822       2.51        83.42       471,766,886       2.89        83.88  
     

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Foreign Currency

  

Due from banks

     8,681,731       0.34        1.29       6,868,969       0.38        1.09       6,989,553       0.64        1.24  
  

Securities

     18,254,667       1.33        2.71       16,052,962       3.90        2.55       15,131,521       3.87        2.69  
  

Loans

     33,175,318       4.98        4.92       26,409,776       5.05        4.19       19,818,889       4.30        3.52  
  

Call loan

     6,299,546       0.72        0.93       3,275,072       0.45        0.52       3,149,433       0.82        0.56  
  

Bills bought

     2,568,457       1.30        0.38       1,940,984       0.73        0.31       1,573,725       1.48        0.28  
  

Allowance

     (1,056,682     —          (0.16     (978,088     —          (0.16     (404,041     —          (0.07
  

Others

     1,847,049       —          0.28       2,229,707       —          0.35       1,294,119       —          0.22  
     

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Subtotal

        69,770,086       2.89        10.35       55,799,382       3.63        8.85       47,553,199       3.24        8.44  
     

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Others

  

Cash

     1,769,084       —          0.26       1,917,967       —          0.30       1,889,892       —          0.34  
  

Fixed assets held for business

     8,070,374       —          1.20       8,130,268       —          1.29       8,048,120       —          1.43  
  

Others

     40,641,050       —          6.03       38,668,395       —          6.14       33,214,651       —          5.91  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Subtotal

     50,480,508       —          7.49       48,716,630       —          7.73       43,152,663       —          7.68  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Total

     674,084,292       —          100.00       630,338,834       —          100.00       562,472,748       —          100.00  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

 

Note:

Based on K-IFRS (on a consolidated basis).


Table of Contents
2.3.

Other Information to Consider in Making an Investment Decision

 

  2.3.1.

Capital Adequacy

 

KB Financial Group(1)     (Unit: in billions of Won, except percentages)  
     As of June 30, 2022(2)     As of December 31, 2021     As of December 31, 2020  

Total capital (A)

     48,121       45,883       40,080  

Risk-weighted assets (B)

     307,729       290,914       262,349  

BIS ratio (A/B)

     15.64     15.77     15.28

 

Notes:

(1) Calculated in accordance with Basel III.

    

(2) Preliminary figures.

 

Kookmin Bank(1)

         (Unit: in billions of Won, except percentages)  
     As of June 30, 2022     As of December 31, 2021     As of December 31, 2020  

Total capital (A)

     36,553       35,572       32,555  

Risk-weighted assets (B)

     209,768       203,569       183,148  

BIS ratio (A/B)

     17.43     17.47     17.78

 

Notes:

(1) Calculated in accordance with Basel III.

 

KB Securities Co., Ltd.

         (Unit: in billions of Won, except percentages)  
     As of June 30, 2022     As of December 31, 2021     As of December 31, 2020  

Net operating capital (A)

     4,346       3,982       3,656  

Total amount at risk (B)

     2,566       2,072       1,678  

Maintenance equity margin (C)

     134       134       134  

Net capital ratio (A-B)/(C)

     1,326.3     1,422.3     1,474.1

Capital surplus (A-B)

     1,780       1,909       1,979  

 

KB Insurance Co., Ltd.

         (Unit: in billions of Won, except percentages)  
     As of June 30, 2022(1)     As of December 31, 2021     As of December 31, 2020  

Available capital (A)

     5,007       4,349       3,812  

Required capital (B)

     2,538       2,424       2,181  

RBC ratio (A/B)

     197.31     179.4     174.8

 

Note:

(1) Preliminary figures.


Table of Contents
  2.3.2.

Overseas Credit Ratings

 

               (As of June 30, 2022)

Rating Company

   Moody’s    S&P

        Type         

   Long-term    Short-term    Long-term    Short-term

Credit Rating

   A1    P-1    A    A-1

 

  2.3.3.

Domestic Credit Ratings

 

Date of
Rating

  

Type

  

Credit Rating

  

Rating Company

(Rating Range)

1/15/2020    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

2/12/2020    Contingent Convertible Bonds    AA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

3/24/2020    Contingent Convertible Bonds    AA-   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

5/12/2020    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

6/12/2020    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

6/26/2020    Commercial Paper    A1   

Korea Ratings (A1 ~ D) / KIS Ratings (A1 ~ D) /

NICE Investors Service (A1 ~ D)

7/1/2020    Contingent Convertible Bonds    AA-   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

8/6/2020    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

10/6/2020    Contingent Convertible Bonds    AA-   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

11/19/2020    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

1/12/2021    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

2/3/2021    Contingent Convertible Bonds    AA-   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

2/19/2021    Debentures    AAA    KIS Ratings (AAA ~ D)
2/22/2021    Debentures    AAA   

Korea Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

5/14/2021    Contingent Convertible Bonds    AA-   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

6/25/2021    Commercial Paper    A1   

Korea Ratings (A1 ~ D) / KIS Ratings (A1 ~ D) /

NICE Investors Service (A1 ~ D)

9/24/2021    Contingent Convertible Bonds    AA-   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

1/27/2022    Contingent Convertible Bonds    AA-    Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D)
1/28/2022    Contingent Convertible Bonds    AA-    NICE Investors Service (AAA ~ D)
4/29/2022    Contingent Convertible Bonds    AA-   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

6/2/2022    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

6/20/2022    Commercial Paper    A1   

Korea Ratings (A1 ~ D) / KIS Ratings (A1 ~ D) /

NICE Investors Service (A1 ~ D)


Table of Contents
  2.3.4.

Early Retirement Program

To enhance productivity by improving its labor structure, Kookmin Bank implemented a voluntary early retirement program following negotiations with its labor union.

 

Subsidiary

   Date of Retirement    Number of Retired Persons

Kookmin Bank

   January 30, 2021    800
   January 21, 2022    674

 

  2.3.5

Economic Conditions of Korea and Other Factors Affecting the Group’s Financial Condition and Results of Operations

Although Korea’s economic growth has recovered rapidly from the effects of COVID-19 in 2021 compared to 2020, such growth is expected to slow down in 2022, mainly due to geopolitical uncertainties, inflation and a rise in interest rates. The economic outlook for Korea and its financial services sector in the remainder of 2022 and for the foreseeable future remains highly uncertain as a result of, among others, (i) uncertainties in the supplies of raw materials and natural resources resulting from Russia’s invasion of Ukraine and the ensuing sanctions on Russia, (ii) uncertainty regarding the potential spread of other COVID-19 variants and its social, political and economic effects, (iii) fiscal and monetary policies implemented by the Korean government and regulatory authorities, including increases in interest rates, which could adversely affect consumer confidence and stock market volatility.


Table of Contents
3.

Financial Information

 

3.1.

Consolidated Financial Information

 

  3.1.1.

Consolidated Statements of Financial Position

 

            (Unit: in millions of Won)  
     As of June 30, 2022      As of December 31, 2021      As of December 31, 2020  

Cash and due from financial institutions

     31,610,409        31,009,374        25,608,842  

Financial assets at fair value through profit or loss

     65,408,161        66,005,815        61,035,455  

Derivative financial assets

     9,419,124        3,721,370        5,545,385  

Loans measured at amortized cost

     434,625,358        417,900,273        377,166,984  

Financial investments

     105,777,450        104,847,871        98,695,426  

Investments in associates and joint ventures

     523,362        448,718        771,435  

Property and equipment

     4,965,718        5,239,898        5,433,554  

Investment property

     3,184,080        2,514,944        2,533,539  

Intangible assets

     3,231,067        3,266,357        3,351,133  

Net defined benefit assets

     83,739        100,083        50,597  

Current income tax assets

     206,567        98,798        109,772  

Deferred income tax assets

     278,329        159,093        65,058  

Assets held for sale

     240,264        237,318        197,727  

Assets of a disposal group held for sale

     —          171,749        —    

Other assets

     34,970,468        28,174,173        30,155,037  

Total assets

     694,524,096        663,895,834        610,719,944  

Financial liabilities at fair value through profit or loss

     12,779,330        12,088,980        11,810,058  

Derivative financial liabilities

     10,041,402        3,682,258        5,222,897  

Deposits

     375,210,844        372,023,918        338,580,220  

Borrowings

     65,633,422        56,912,374        49,827,156  

Debentures

     71,087,255        67,430,188        62,760,687  

Provisions

     863,877        808,604        714,903  

Net defined benefit liabilities

     350,414        225,521        239,567  

Current income tax liabilities

     932,164        662,672        764,981  

Deferred income tax liabilities

     221,662        1,470,981        1,177,799  

Insurance contract liabilities

     58,172,597        57,165,936        54,415,296  

Other liabilities

     50,847,193        43,130,482        41,804,023  
  

 

 

    

 

 

    

 

 

 

Total liabilities

     646,140,160        615,601,914        567,317,587  
  

 

 

    

 

 

    

 

 

 


Table of Contents
              
     As of June 30, 2022     As of December 31, 2021     As of December 31, 2020  

Equity attributable to shareholders of the parent company

     47,092,996       47,460,582       42,544,574  

Share capital

     2,090,558       2,090,558       2,090,558  

Hybrid securities

     3,935,552       2,838,221       1,695,988  

Capital surplus

     16,940,731       16,940,231       16,723,589  

Accumulated other comprehensive income (loss)

     (2,067,494     1,047,274       630,011  

Accumulated other comprehensive income relating to assets of a disposal group held for sale

     —         7,671       —    

Retained earnings

     27,179,837       25,672,815       22,540,616  

Treasury shares

     (986,188     (1,136,188     (1,136,188

Non-controlling interests

     1,290,940       833,338       857,783  

Total equity

     48,383,936       48,293,920       43,402,357  
  

 

 

   

 

 

   

 

 

 

Total liabilities and equity

     694,524,096       663,895,834       610,719,944  
  

 

 

   

 

 

   

 

 

 


Table of Contents
  3.1.2.

Consolidated Statements of Comprehensive Income

 

          (Unit: in millions of Won, except per share amounts)  
    For the six months ended
June 30, 2022
    For the six months ended
June 30, 2021
    For the year ended
December 31, 2021
    For the year ended
December 31, 2020
 

Net interest income

    6,295,819       5,401,073       11,229,572       9,722,274  

Interest income

    9,004,851       7,312,653       15,210,878       14,485,747  

Interest income from financial instruments at fair value through other comprehensive income and amortized cost

    8,633,017       7,020,672       14,620,490       13,826,382  

Interest income from financial instruments at fair value through profit or loss

    371,834       291,981       590,388       659,365  

Interest expense

    (2,709,032     (1,911,580     (3,981,306     (4,763,473

Net fee and commission income

    1,789,878       1,832,599       3,625,583       2,958,939  

Fee and commission income

    2,648,152       2,653,787       5,323,606       4,527,024  

Fee and commission expense

    (858,274     (821,188     (1,698,023     (1,568,085

Net insurance income

    354,989       335,916       556,711       299,993  

Insurance income

    8,502,813       8,259,937       16,107,858       14,386,640  

Insurance expense

    (8,147,824     (7,924,021     (15,551,147     (14,086,647

Net gains (losses) on financial assets/liabilities at fair value through profit or loss

    (145,993     517,761       995,304       1,011,366  

Net gains (losses) on financial instruments at fair value through profit or loss before applying overlay approach

    (515,411     646,940       1,160,981       1,221,610  

Gains (losses) on overlay adjustments

    369,418       (129,179     (165,677     (210,244

Net other operating expenses

    (885,445     (877,006     (1,923,567     (1,499,930

General and administrative expenses

    (3,445,904     (3,393,025     (7,200,853     (6,814,812

Operating profit before provision for credit losses

    3,963,344       3,817,318       7,282,750       5,677,830  

Provision for credit losses

    (461,341     (397,160     (1,185,133     (1,043,498

Net operating income

    3,502,003       3,420,158       6,097,617       4,634,332  

Net non-operating income (expenses)

    199,429       32,774       (16,011     145,640  

Share of profit (loss) of associates and joint ventures

    (19,859     83,135       93,526       (43,750

Net other non-operating income (expenses)

    219,288       (50,361     (109,537     189,390  

Profit before income tax

    3,701,432       3,452,932       6,081,606       4,779,972  

Income tax expense

    (929,327     (960,651     (1,697,225     (1,264,394

Profit for the period

    2,772,105       2,492,281       4,384,381       3,515,578  

Other comprehensive income (loss) for the period, net of tax

    (3,107,136     (296,841     222,758       472,270  


Table of Contents
    For the six months ended
June 30, 2022
    For the six months ended
June 30, 2021
    For the year ended
December 31, 2021
    For the year ended
December 31, 2020
 

Items that will not be reclassified to profit or loss:

    (741,397     309,458       871,654       817,524  

Remeasurements of net defined benefit liabilities

    (31,712     (2,130     (45,510     (13,434

Share of other comprehensive income (loss) of associates and joint ventures

    (2     (3     51       (1

Gains (losses) on equity securities at fair value through other comprehensive income

    (716,917     307,826       903,398       822,140  

Fair value changes of financial liabilities designated at fair value through profit or loss due to own credit risk

    7,234       3,765       13,715       8,819  

Items that may be reclassified subsequently to profit or loss:

    (2,365,739     (606,299     (648,896     (345,254

Currency translation differences

    265,815       93,748       255,907       (187,283

Losses on debt securities at fair value through other comprehensive income

    (2,138,821     (757,964     (924,698     (356,572

Share of other comprehensive income (expenses) of associates and joint ventures

    23       280       498       (6,846

Gains (losses) on cash flow hedging instruments

    25,663       17,672       20,864       (1,264

Gains (losses) on hedging instruments of net investments in foreign operations

    (95,983     (22,134     (57,935     64,269  

Other comprehensive losses arising from separate account

    (154,675     (31,538     (63,814     (9,683

Gains (losses) on overlay adjustment

    (267,761     93,637       120,282       152,125  

Total comprehensive income (expenses) for the period

    (335,031     2,195,440       4,607,139       3,987,848  

Profit (losses) attributable to:

    2,772,105       2,492,281       4,384,381       3,515,578  

Shareholders of the parent company

    2,756,609       2,473,989       4,409,543       3,468,448  

Non-controlling interests

    15,496       18,292       (25,162     47,130  

Total comprehensive income (expenses) for the period attributable to:

    (335,031     2,195,440       4,607,139       3,987,848  

Shareholders of the parent company

    (366,117     2,168,442       4,610,549       3,966,361  

Non-controlling interests

    31,086       26,998       (3,410     21,487  

Earnings per share

       

Basic earnings per share (Won)

    6,943       6,269       11,134       8,843  

Diluted earnings per share (Won)

    6,787       6,139       10,890       8,730  

 

Note:

Figures for the six months ended June 30, 2021 have been restated retrospectively to reflect the accounting policy changes in connection with the IFRIC decision regarding K-IFRS No. 1019, and the related information is included in KB Financial Group’s consolidated financial statements attached as Exhibit 99.1 hereto.


Table of Contents
3.2.

Separate Financial Information

 

  3.2.1.

Separate Statements of Financial Position

 

            (Unit: in millions of Won)  
     As of June 30, 2022      As of December 31, 2021      As of December 31, 2020  

Cash and due from financial institutions

     1,371,234        608,076        23,084  

Financial assets at fair value through profit or loss

     1,009,769        440,760        474,262  

Loans measured at amortized cost

     249,128        249,128        179,542  

Investments in subsidiaries

     26,741,438        26,741,438        26,519,880  

Property and equipment

     4,854        4,444        7,730  

Intangible assets

     15,557        16,673        13,267  

Net defined benefit assets

     —          221        —    

Deferred income tax assets

     14,333        5,583        3,189  

Other assets

     1,053,744        805,056        887,537  
  

 

 

    

 

 

    

 

 

 

Total assets

     30,460,057        28,871,379        28,108,491  
  

 

 

    

 

 

    

 

 

 

Borrowings

     —          —          100,000  

Debentures

     5,324,225        5,552,791        6,128,043  

Net defined benefit liabilities

     1,108        —          59  

Current income tax liabilities

     851,373        570,519        716,473  

Other liabilities

     202,973        235,095        178,296  
  

 

 

    

 

 

    

 

 

 

Total liabilities

     6,379,679        6,358,405        7,122,871  
  

 

 

    

 

 

    

 

 

 

Share capital

     2,090,558        2,090,558        2,090,558  

Hybrid securities

     3,935,282        2,837,981        1,695,778  

Capital surplus

     14,754,747        14,754,747        14,754,747  

Accumulated other comprehensive loss

     (8,611      (8,330      (8,032

Retained earnings

     4,294,590        3,974,206        3,588,757  

Treasury Shares

     (986,188      (1,136,188      (1,136,188
  

 

 

    

 

 

    

 

 

 

Total equity

     24,080,378        22,512,974        20,985,620  
  

 

 

    

 

 

    

 

 

 

Total liabilities and equity

     30,460,057        28,871,379        28,108,491  
  

 

 

    

 

 

    

 

 

 


Table of Contents
  3.2.2.

Separate Statements of Comprehensive Income

 

     (Unit: in millions of Won, except per share amounts)  
     For the six
months ended
June 30,
2022
     For the six
months ended
June 30,
2021
     For the year
ended
December 31,
2021
     For the year
ended
December 31,
2020
 

Net interest income

     (47,107      (59,163      (111,077      (124,393

Interest income

     7,485        3,307        9,392        8,044  

Interest income from financial instruments at amortized cost

     6,165        2,648        6,548        3,788  

Interest income from financial instruments at fair value through profit or loss

     1,320        659        2,844        4,256  

Interest expense

     (54,592      (62,470      (120,469      (132,437

Net fee and commission income

     (4,135      (4,771      (8,157      (8,338

Fee and commission income

     1,159        462        975        841  

Fee and commission expense

     (5,294      (5,233      (9,132      (9,179

Net gains (losses) on financial assets at fair value through profit or loss

     (16,860      11,353        20,250        12,663  

Net other operating income

     1,671,224        1,447,949        1,620,238        1,571,239  

General and administrative expenses

     (41,646      (44,061      (85,417      (71,854

Operating profit before provision for credit losses

     1,561,476        1,351,307        1,435,837        1,379,317  

Provision for credit losses

     (2      (5      (417      (465

Operating profit

     1,561,474        1,351,302        1,435,420        1,378,852  

Net non-operating income(loss)

     (435      (148      1,165        514  

Profit before income tax

     1,561,039        1,351,154        1,436,585        1,379,366  

Income tax income(expense)

     8,644        909        2,281        49  

Profit for the period

     1,569,683        1,352,063        1,438,866        1,379,415  

Other comprehensive loss for the year, net of tax

     (281      (44      (298      (368

Items that will not be reclassified to profit or loss:

     (281      (44      (298      (368

Remeasurements of net defined benefit liabilities

     (281      (44      (298      (368

Total comprehensive income for the period

     1,569,402        1,352,019        1,438,568        1,379,047  

Earnings per share

           

Basic earnings per share (Won)

     3,897        3,390        3,509        3,482  

Diluted earnings per share (Won)

     3,811        3,321        3,436        3,438  


Table of Contents
3.3.

Other Selected Financial Data

 

  3.3.1.

Won-denominated Liquidity Ratio

 

    

(Unit: in millions of Won, except percentages)

 

 
     As of June 30, 2022     As of December 31, 2021     As of December 31, 2020  

Current assets in Won (A)

     1,637,056       713,908       112,754  

Current liabilities in Won (B)

     178,894       317,184       92,328  

Liquidity ratio (A/B)

     915.10     225.08     122.12

 

Notes:

(1) Based on K-IFRS (on a separate basis).

  (2) 

Calculated based on Won-denominated assets and liabilities due within one month.

 

  3.3.2.

Profitability Ratios

 

           

(Unit: %)

 

 
     For the six months ended
June 30, 2022
     For the year ended
December 31, 2021
     For the year ended
December 31, 2020
 

Net income as a percentage of average total assets (ROA)

     0.82        0.69        0.61  

Net income as a percentage of average shareholders’ equity (ROE)

     11.73        9.80        8.64  

 

Note:

Based on K-IFRS (on a consolidated basis).

 

  3.3.3.

20 Largest Exposures of Kookmin Bank by Borrower (As of June 30, 2022)

 

     (Unit: in billions of Won)  

Company

   Credit Extended  

Samsung Electronics Co., Ltd.

     1,442  

Samsung Heavy Industries Co., Ltd.

     1,159  

KB Kookmin Card Co., Ltd.

     1,149  

Hyundai Steel Co., Ltd.

     1,086  

Hyundai Heavy Industries Co., Ltd.

     1,084  

GS Caltex Corporation

     1,008  

S-Oil Corp.

     988  

E-MART Inc.

     939  

STRADA HOLDCO L.P.

     937  

LG Display Co., Ltd.

     868  

Hyundai Motor Company

     847  

LG CHEM, LTD.

     819  

SK Inc.

     810  

LS-Nikko Copper Inc.

     749  

Samsung SDI Co., Ltd.

     715  

POSCO International Corporation

     713  

Daewoo Shipbuilding & Marine Engineering Co., Ltd.

     678  

POSCO Holdings Inc.

     673  

Ministry of Economy and Finance

     637  

Lotte Shopping Co., Ltd.

     625  
  

 

 

 

Total

     17,926  
  

 

 

 


Table of Contents
  3.3.4.

10 Largest Exposures of Kookmin Bank by Chaebol Group (As of June 30, 2022)

 

     (Unit: in billions of Won)  

Group

   Credit Extended  

SK

     4,919  

Samsung

     4,903  

Hyundai Motor

     4,621  

LG

     3,321  

Hyundai Heavy Industries

     2,987  

Lotte

     2,620  

POSCO

     1,800  

Hanwha

     1,718  

GS

     1,662  

LS

     1,602  
  

 

 

 

Total

     30,153  
  

 

 

 

 

  3.3.5.

Kookmin Bank’s Loan Concentration by Industry (As of June 30, 2022)

 

     (Unit: in billions of Won, except percentages)  

Industry

   Total
Credit
     Percentage of
Total Credit
 

Manufacturing

     55,341        29.2  

Construction

     3,825        2.0  

Real estate

     43,232        22.8  

Retail and wholesale

     29,295        15.4  

Hotel, lodging and food services

     9,944        5.2  

Financial institutions

     5,379        2.8  

Others

     42,694        22.5  
  

 

 

    

 

 

 

Total

     189,710        100.0  
  

 

 

    

 

 

 


Table of Contents

3.3.6. Top 20 Non-Performing Loans of Kookmin Bank (As of June, 2022)

 

          (Unit: in billions of Won)  

Borrower

  

Industry

   Total Credit      Allowance
for Loan Losses
 

Borrower A

   Construction      40.1        39.3  

Borrower B

   Health and social services      18.7        1.9  

Borrower C

   Publishing, film, broadcasting and information services      18.7        14.5  

Borrower D

   Retail and wholesale      15.0        12.7  

Borrower E

   Manufacturing      8.7        3.2  

Borrower F

   Manufacturing      7.0        3.5  

Borrower G

   Manufacturing      6.9        3.9  

Borrower H

   Manufacturing      6.3        5.8  

Borrower I

   Manufacturing      6.3        1.9  

Borrower J

   Manufacturing      5.8        1.2  

Borrower K

   Manufacturing      5.2        3.4  

Borrower L

   Real estate and leasing      5.1        0.6  

Borrower M

   Manufacturing      4.9        0.9  

Borrower N

   Manufacturing      4.9        0.0  

Borrower O

   Manufacturing      4.7        3.7  

Borrower P

   Manufacturing      4.6        3.4  

Borrower Q

   Retail and wholesale      3.9        2.1  

Borrower R

   Manufacturing      3.7        3.6  

Borrower S

   Manufacturing      3.6        0.0  

Borrower T

   Manufacturing      3.5        0.2  
     

 

 

    

 

 

 

Total

   —        177.8        105.7  
     

 

 

    

 

 

 

 

3.4.

Other Financial Information

See Exhibits 99.1 and 99.2 attached hereto for our consolidated and separate financial statements and relevant notes, which have been prepared in accordance with K-IFRS and reviewed by our independent auditors as stated in their review reports. The review reports will also be available on our website at www.kbfg.com.


Table of Contents
4.

Independent Public Accountants

 

4.1.

Audit / Review Services

 

                      (Unit: in millions of Won)  

Period

  

Auditor

  

Activity

   Agreed Per Contract(1)      Actual(2)  
   Compensation(3)      Estimated
Hours
     Compensation(3)      Accrued
Hours
 

January 1 to June 30, 2022

   KPMG Samjong Accounting Corp.    Quarterly, semi-annual and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting)      1,291        11,364        437        3,400  

January 1 to December 31, 2021

   KPMG Samjong Accounting Corp.    Quarterly, semi-annual and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting)      1,261        11,364        1,261        11,451  

January 1 to December 31, 2020

   KPMG Samjong Accounting Corp.    Quarterly, semi-annual and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting)      1,246        11,570        1,246        12,624  

January 1 to December 31, 2020

   KPMG Samjong Accounting Corp.    Expansion of the scope of audit in connection with the acquisition of Prudential Life Insurance      481        4,829        481        4,846  

 

Notes:   (1)    Total compensation and estimated hours are established at the time of the execution of the audit and review services contract.
  (2)    Actual compensation and hours are accrued from January 1 of each applicable year to the date of the audit or review report issued during such year.
  (3)    Excluding value-added taxes.


Table of Contents

4.2. Public Company Accounting Oversight Board (“PCAOB”) Audit Services

 

                    (Unit: in millions of Won)  

Period

  

Auditor

  

Activity

   Service Period    Compensation(1)  

January 1 to June 30, 2022

   KPMG Samjong Accounting Corp.    PCAOB audit of consolidated financial statements and internal control over financial reporting    May 1, 2022 to

April 30, 2023

     697  

January 1 to December 31, 2021

   KPMG Samjong Accounting Corp.    PCAOB audit of consolidated financial statements and internal control over financial reporting    May 1, 2021 to

April 30, 2022

     681  

January 1 to December 31, 2020

   KPMG Samjong Accounting Corp.    PCAOB audit of consolidated financial statements and internal control over financial reporting    May 1, 2020 to

April 30, 2021

     662  

 

Note:

(1) Total compensation (excluding value-added taxes) is established at the time of the execution of the audit and review services contract.

 

4.3.

Change in Auditor

Pursuant to the Act on External Audit of Stock Companies and the related regulations thereunder, the Securities and Futures Commission of the Financial Services Commission designated KPMG Samjong Accounting Corp. as the new external auditor for the Company for the fiscal years ending December 31, 2020, 2021 and 2022. As such, the external auditor for the Company and its subsidiaries for the fiscal year ended December 31, 2021 continued to be KPMG Samjong Accounting Corp. Prudential Life Insurance, which kept Samil PricewaterhouseCoopers as its external auditor for the fiscal year ended December 31, 2020, has changed its external auditor for the fiscal year ended December 31, 2021 to KPMG Samjong Accounting Corp.

 

5.

Corporate Governance and Affiliated Companies

 

5.1.

Board of Directors & Committees under the Board

As of June 30, 2022, our board of directors consisted of nine directors, comprising one executive director, one non-standing director and seven non-executive directors. The following committees currently serve under our board of directors:

 

   

Audit Committee;

 

   

Risk Management Committee;

 

   

Evaluation and Compensation Committee;

 

   

ESG Committee;

 

   

Non-Executive Director Nominating Committee;

 

   

CEO Nominating Committee;

 

   

Subsidiaries’ CEO Director Nominating Committee; and

 

   

Audit Committee Member Nominating Committee (ad hoc committee);

For the list of our directors, see 6. Directors, Senior Management and Employees — 6.1. Executive Directors, — 6.2. Non-standing Directors and — 6.3. Non-executive Directors below.


Table of Contents
5.2.

Audit Committee

The Audit Committee oversees our financial reporting and approves the appointment of our independent auditors and internal compliance officers. The committee also reviews our financial information, auditor’s examinations, key financial statement issues, the plans and evaluation of internal controls and the administration of our financial affairs by the board of directors. In connection with the general meetings of shareholders, the committee examines the agenda for, and financial statements and other reports to be submitted by, the board of directors to each general meeting of shareholders. The committee holds regular meetings every quarter and on an as-needed basis.

The following table shows a list of audit committee requirements under Articles 415 and 542 of the Commercial Act and how we fulfill each requirement as of June 30, 2022.

 

The Commercial Act Requirements

  

KB Financial Group

The Audit Committee must consist of three or more directors.    We have four Audit Committee members.

At least two-thirds of the Audit Committee members must be non-executive directors.

 

   All four Audit Committee members, including the chairman of the committee, are non-executive directors.
The chairman of the Audit Committee must be a non-executive director.
At least one Audit Committee member must be an accounting or financial expert.    Three Audit Committee members (Kyung Ho Kim, Suk Ho Sonu, and Myung Hee Choi) are accounting or financial experts.

 

5.3.

Compensation to Directors

 

  5.3.1.

Total Amount of Compensation Approved at the Annual General Meeting of Shareholders

 

     (Unit: in millions of Won)  
     Total number of persons(1)      Total compensation approved at shareholders’  meeting(2)      Notes  

Registered Directors (Non-executive directors)

     9 (7)        3,000        —    

 

Notes:  (1)

Represents the total number of applicable persons as of June 30, 2022.

     (2)

Represents the aggregate amount for all directors (including non-executive directors). Excludes compensation in the form of long-term performance-based stock grants.


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5.3.2. Total Amount of Compensation Paid

 

(As of June 30, 2022)    (Unit: in millions of Won)  

Total number of persons(1)

   Total payment(2)(3)      Average payment per person(4)      Notes  

                            9

     966        113        —    

 

Notes:  (1)

Represents the total number of applicable persons as of June 30, 2022.

     (2)

Represents the total amount paid (rounded to the nearest million) for the six months ended June 30, 2022.

     (3)

Total payment amount in accordance with the Company’s internal policies on compensation to directors.

     (4)

Represents (i) the total amount paid (rounded to the nearest million) for the six months ended June 30, 2022, divided by (ii) the number of applicable persons for the applicable reporting period.

5.3.3. Compensation Breakdown

 

(As of June 30, 2022)      (Unit: in millions of Won)  
     Total number of
persons(1)
     Total payment(2)(3)      Average payment
per person(4)
     Notes  

Registered Directors (excluding non-executive directors and Audit Committee members)

     2        650        422        —    

Non-executive Directors (excluding Audit Committee members)

     3        122        41        —    

Audit Committee members

     4        194        49        —    

Internal Auditor

     —          —          —          —    

 

Notes:  (1)

Represents the total number of applicable persons as of June 30, 2022.

     (2)

Represents the total amount paid (rounded to the nearest million) for the six months ended June 30, 2022.

     (3)

Total payment amount in accordance with the Company’s internal policies on compensation to directors.

     (4)

Represents (i) the total amount paid (rounded to the nearest million) for the six months ended June 30, 2022, divided by (ii) the number of applicable persons for the applicable reporting period.

 

5.4.

Top 5 Highest-Paid Individuals

 

  5.4.1

Compensation exceeding Won 500 million – Individual basis

 

(As of June 30, 2022)    (Unit: in millions of Won)

Name

  

Position

  

Total Amount

  

Deferred Compensation(1)

Jong Kyoo Yoon    Chairman & CEO    650   

- Deferred short-term performance-based payment, the amount of which corresponds to a total of 11,283 shares and deferred long-term performance-based payment, the amount of which corresponds to a total of 18,756 shares

        

- Long-term performance-based payment (22,712 shares per year), the amount of which will be finalized at a future date pursuant to a performance evaluation over a three-year period from November 21, 2020 to November 20, 2023

Pil Kyu Im    Senior Executive Vice President    572   

- Deferred short-term performance-based payment, the amount of which corresponds to a total of 7,460 shares and deferred long-term performance-based payment, the amount of which corresponds to a total of 6,478 shares

 

Note:  (1)

The actual payment amount will be finalized based on the market value of our shares at the time of payment.


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5.4.2 Calculation criteria and method of compensation

 

Name

  

Compensation Type

  

Total

Compensation

(in millions of

Won)

  

Calculation Criteria and Method

Jong Kyoo Yoon

   Earned income    Salary    450    A monthly salary was paid in even installments each month in accordance with the amount of annual salary determined by a resolution of the Evaluation and Compensation Committee within the limit of the total amount of compensation approved at the shareholders’ meeting. (This amount includes allowances for business expenses of Won 200 million.)
      Bonus    200   

The bonus paid in 2022 consisted of Won 200 million paid as an upfront lump sum payment in short-term performance-based compensation for 2021.

 

The short-term performance evaluation index for 2021 consisted of financial results (e.g., ROE, total operating income, net profit from non-banking businesses, comprehensive NPL ratio, Tier 1 ratio, CIR) weighting 70% of the total evaluation scores, as well as non-financial results (e.g., strengthening the overall position of the company by improving the core competitiveness of the Company, expanding global and new businesses, innovating financial platform, leading sustainable growth by enhancing ESG and risk management, and cultivating an open and creative organizational structure), which comprised 30% of the total evaluation score. The amount of the short-term incentive payment is determined by the Evaluation and Compensation Committee based on the aggregate score of the index items above and is within the range of 0%-100% of the base salary.

 

With respect to financial results, the Company’s net profit for 2021 increased 27.6% YoY to Won 4,410 billion primarily due to a solid growth in interest income and fee & commission income. Improvements in asset quality (improvement in comprehensive NPL ratio from 0.78% in 2020 to 0.60% in 2021), and diversification of earnings streams by strengthening the non-banking business (expansion of non-banking businesses’ net profit amount (contribution to the total net profit of the Group) from Won 1,157 billion (33.5%) in 2020 to Won 1,819 billion (42.6%) in 2021) were considered, among others, to be major achievements reflected in the performance evaluation.

 

With respect to non-financial results, the major achievements considered included (i) strengthening the foundations for stable earnings by contributing to the quality growth of prime asset based loans (loans increased 7.9% YoY from Won 295 trillion in 2020 to Won 319 trillion in 2021), improving cost efficiency through a group-wide cost control effort and enhancement in labor efficiency, strengthening of digital channels, and contributing to realizing the ‘One-firm KB’ policy by enhancing the Group’s co-marketing structure.

      Stock options    —      Not applicable
      Other earned income    —      Not applicable
   Retirement income    —      Not applicable
   Other income    —      Not applicable


Table of Contents

Name

  

Compensation Type

  

Total

Compensation

(in millions of

Won)

  

Calculation Criteria and Method

Pil Kyu Im    Earned income    Salary    130    A monthly salary was paid in even installments each month in accordance with the amount of annual salary determined pursuant to internal policy regarding executive officers based on position and responsibilities.
      Bonus    438   

The bonus paid in 2022 consisted of Won 136 million in short-term performance-based compensation paid as an upfront lump sum payment for 2021, and Won 302 million in long-term performance-based compensation paid as an upfront lump sum payment for 2020 and 2021.

 

The short-term performance evaluation index for 2021 consisted entirely of non-financial results specific to the role as a Chief Risk Management Officer. The amount of the short-term incentive payment is determined by the Evaluation and Compensation Committee, based on a comprehensive evaluation and is within the range of 0%-120% of the base salary.

 

With respect to non-financial results, major achievements included (i) contributing to the stable growth of the Group’s core businesses by examining the risk factors to the management structure of the Group’s core businesses, and establishing and implementing improvement measures on the risk factors to the management structure, (ii) establishing counter-measures for and reducing potential risks by, including but not limited to, examining the asset quality status of non-banking household loans.

 

The long-term performance evaluation index for 2021 consisted entirely of non-financial results specific to the role as a Chief Risk Management Officer, and the amount of the long-term incentive payment is determined based on a comprehensive evaluation and is within the range of 0%-100% of the base salary.

      Stock options    —      Not applicable
      Other earned income    —      Not applicable
   Retirement income    —      Not applicable
   Other income    4    Welfare benefits


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5.5.

Affiliated Companies

 

  5.5.1.

List of Affiliated Companies

Affiliated companies of KB Financial Group that are first-tier subsidiaries and KB Financial Group’s ownership of such companies as of June 30, 2022 are as follows.

 

  1)

Kookmin Bank (100.00%)

 

  2)

KB Securities Co., Ltd. (100.00%)

 

  3)

KB Insurance Co., Ltd. (100.00%)

 

  4)

KB Kookmin Card Co., Ltd. (100.00%)

 

  5)

Prudential Life Insurance (100.00%)

 

  6)

KB Asset Management Co., Ltd. (100.00%)

 

  7)

KB Capital Co., Ltd. (100.00%)

 

  8)

KB Life Insurance Co., Ltd. (100.00%)

 

  9)

KB Real Estate Trust Co., Ltd. (100.00%)

 

  10)

KB Savings Bank Co., Ltd. (100.00%)

 

  11)

KB Investment Co., Ltd. (100.00%)

 

  12)

KB Data Systems Co., Ltd. (100.00%)

 

  13)

KB Credit Information Co., Ltd. (100.00%)

 

6.

Directors, Senior Management and Employees

 

6.1.

Executive Directors

As of June 30, 2022, we had one executive director. The name, position and the end of the term of our executive director and the number of shares of our common stock he owned as of June 30, 2022 are set forth below.

 

Name

   Date of Birth      Position      Common Shares Owned      End of Term  

Jong Kyoo Yoon

     October 1955        Chairman & Chief Executive Officer        21,000        November 20, 2023  

 

6.2.

Non-standing Directors

As of June 30, 2022, we had one non-standing director. The name, position and the end of the term of our non-standing director and the number of shares of our common stock he owned as of June 30, 2022 are set forth below.

 

Name

   Date of Birth      Position      Common Shares Owned      End of Term(1)  

Jae Keun Lee

     May 1966        Non-standing Director        119        March 24, 2024  

 

Note: (1) 

The date designated as Mr. Jae Keun Lee’s end of term is the date of the annual general meeting of shareholders for fiscal year 2023, which is expected be held in March 2024.


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6.3.

Non-executive Directors

As of June 30, 2022, we had seven non-executive directors. The name, position and the end of the term of our non-executive directors and the number of shares of our common stock they respectively owned as of June 30, 2022 were as follows.

 

Name

   Date of Birth    Position    Common Shares Owned      End of Term

Suk Ho Sonu

   September 1951    Non-executive Director      1,300      March 24, 2023

Myung Hee Choi

   February 1952    Non-executive Director      —        March 24, 2023

Kouwhan Jeong

   September 1953    Non-executive Director      —        March 24, 2023

Kyung Ho Kim

   December 1954    Non-executive Director      —        March 24, 2023

Seon-joo Kwon

   November 1956    Non-executive Director      —        March 24, 2023

Gyutaeg Oh

   February 1959    Non-executive Director      —        March 24, 2023

Jaehong Choi

   August 1962    Non-executive Director      —        March 24, 2024

As of June 30, 2022, the following non-executive director also served as a director at another company.

 

Name

  

Company

  

Position

  

Appointment Date

Kouwhan Jeong

   Nambujeil Law and Notary Office Inc.    Co-president Attorney at Law    May 2016


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6.4.

Senior Management

Members of our senior management as of June 30, 2022 are as follows.

 

Name

  Date of Birth  

Position

  Common Shares
Owned(1)
    End of Term  

Yin Hur

  December 1961  

Vice Chairman and Head of Retail Customer / Wealth Management & Pension Business / Small & Medium Enterprise Business Units

    13,506       December 31, 2022  

Dong Cheol Lee

  October 1961  

Vice Chairman and Head of Global / Insurance Business Units

    3,325       December 31, 2022  

Jong Hee Yang

  June 1961  

Vice Chairman and Head of Digital / IT Business Units

    914       December 31, 2022  

Pil Kyu Im

  March 1964  

Senior Executive Vice President and Chief Risk Management Officer

    1,005       December 31, 2022  

Dong Whan Han

  January 1965  

Senior Executive Vice President and Head of KB Research

    1,100       December 31, 2022  

Se Min Kim

  January 1971  

Senior Managing Director and Chief Strategy Officer

    93       December 31, 2023  

Scott S.Y. Seo

  March 1966  

Senior Managing Director and Chief Finance Officer

    —         December 31, 2022  

Yeo Woon Yoon

  April 1967  

Senior Managing Director and Chief Human Resources Officer

    520       December 31, 2022  

Jin Gyu Maeng

  January 1966  

Senior Managing Director and Head of Audit

    971       December 31, 2022  

Hye Sook Moon

  September 1971  

Managing Director and Head of ESG Division

    652       December 31, 2023  

Bong Joong Kwon

  November 1969  

Managing Director and Head of IR

    286       December 31, 2022  

Byung Joo Oh

  January 1973  

Managing Director, Insurance Business Unit

    749       December 31, 2022  

Hye Ja Suh

  September 1966  

Managing Director and Chief Compliance Officer

    1,274       December 31, 2022  

Jeong Rim Park

  November 1963  

Head of the Capital Market Business Unit

    3,150       December 31, 2022  

Sung Hyun Kim

  August 1963  

Head of Corporate and Investment Banking Business Unit

    15,468       December 31, 2022  

Jin Young Kim

  August 1969  

Chief Public Relation Officer

    765       December 31, 2022  

Chai Hyun Sung

  September 1965  

Senior Executive Vice President, Retail Customer Business Unit

    7,900       December 31, 2022  

Jae Young Choi

  June 1967  

Senior Managing Director, Wealth Management and Pension Business Unit

    880       December 31, 2022  

Mun Cheol Jeong

  August 1968  

Senior Managing Director, Small and Medium Enterprise Business Unit

    2,900       December 31, 2022  

Nam Hoon Cho

  June 1968  

Senior Managing Director and Chief Global Strategy Officer

    1,000       December 31, 2022  

Young Suh Cho

  February 1971  

Chief Digital Platform Officer

    —         December 31, 2022  

Jin Soo Yoon

  February 1964  

Chief Information Technology Officer

    183       December 31, 2022  

Sungpyo Jeon

  August 1966  

Chief Contact Center Officer

    903       December 31, 2022  

Jeong Ha

  January 1967  

Senior Executive Vice President, Capital Market Business Unit

    —         December 31, 2022  

Sang-Hyeon Woo

  February 1964  

Senior Executive Vice President, Corporate and Investment Banking Business Unit

    348       December 31, 2022  

Dong Sook Jeon

  September 1968  

Head of Pension Division

    1,744       December 31, 2022  

Nam Che Kang

  August 1967  

Head of Global Division

    260       December 31, 2022  

Chang Hwa Yook

  December 1967  

Head of Data Division

    480       December 31, 2022  

Chan Yong Park

  September 1965  

Head of Office of Planning and Coordination

    909       December 31, 2022  

Yoo Shim Hur

  April 1973  

Head of Digital Contents Center

    —         December 31, 2022  

Soon Young Oh

  August 1977  

Head of Financial AI Center

    —         December 31, 2022  

Joo Hyun Kim

  November 1970  

Head of Group Cloud Center

    —         December 31, 2022  

 

Note: (1) 

The number of common shares owned is as of June 30, 2022 and includes those owned in the holder’s name under the employee stock ownership association’s account, and may differ from the number of shares owned as reported pursuant to Article 173 of the Financial Investment Services and Capital Markets Act.


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As of June 30, 2022, the following management also served as senior management at our subsidiaries.

 

Name

 

Subsidiary

 

Position

 

Appointment Date

Jae Keun Lee

  Kookmin Bank   Chief Executive Officer   January 2022

Jeong Rim Park

  KB Securities   Chief Executive Officer   January 2019

Sung Hyun Kim

  KB Securities   Chief Executive Officer   January 2019

Hye Sook Moon

  Kookmin Bank   Head of ESG Division   January 2022

Jin Young Kim

  Kookmin Bank   Managing Director; Brand Strategy Group   January 2022

Chai Hyun Sung

  Kookmin Bank   Senior Executive Vice President; Retail Customer Group   January 2020

Jae Young Choi

  Kookmin Bank   Senior Managing Director; Wealth Management Group   January 2022
  KB Securities   Senior Executive Vice President; Wealth Management Division   January 2022
  KB Insurance   Senior Managing Director; WM/Pension Division   January 2022

Mun Cheol Jeong

  Kookmin Bank   Senior Managing Director; SME and SOHO Customer Group   January 2022

Nam Hoon Cho

  Kookmin Bank   Senior Managing Director; Global Business Group   January 2022

Young Suh Cho

  Kookmin Bank   Senior Managing Director; DT Strategy Division   January 2021

Jin Soo Yoon

  Kookmin Bank   Senior Executive Vice President; Tech Group   January 2021

Sungpyo Jeon

  Kookmin Bank   Senior Managing Director; Smart Customer Group   January 2022

Jeong Ha

  Kookmin Bank   Senior Executive Vice President; Capital Markets Group   January 2021

Sang-Hyeon Woo

  Kookmin Bank   Senior Executive Vice President; Corporate Investment Banking Customer Group   January 2021
  KB Securities   Senior Executive Vice President; Investment Banking Division   January 2020

Dong Sook Jeon

  Kookmin Bank   Head of Pension Business Division   January 2022

Nam Che Kang

  Kookmin Bank   Head of Global Growth Supporting Division   January 2022

Chang Hwa Yook

  Kookmin Bank   Head of Data Division   January 2022

Chan Yong Park

  Kookmin Bank   Senior Managing Director; Planning & Coordination Department   January 2022

Yoo Shim Hur

  Kookmin Bank   Managing Director; Digital Contents Center   January 2022

Soon Young Oh

  Kookmin Bank   Managing Director; Financial AI Center   June 2022

Joo Hyun Kim

  Kookmin Bank   Head of Cloud Platform Department   February 2022

Se Min Kim

  KB Securities   Non-standing Director   June 2022

Scott S.Y. Seo

  KB Insurance   Non-standing Director   February 2022
  KB Kookmin Card   Non-standing Director   March 2022


Table of Contents
6.5.

Employees

The following table shows information regarding our employees and compensation paid to them as of June 30, 2022.

 

            (Unit: in millions of Won)  

Number of

Employees(1)

   Average Tenure of
Employees(2)
     Total Amount of
Compensation(3)
     Average Compensation
per Person(4)
 

160

    

3 years and 11 months

(15 years and 2 months

 

     12,860        80  

 

Notes:

(1)   Includes all employees as of June 30, 2022, including executive officers.

  (2)

The duration in parentheses includes tenure at our subsidiaries.

  (3)

Based on the sum of all compensation paid from January 1, 2022 to June 30, 2022

  (4)

Based on the sum of the average monthly compensation of each month from January 1, 2022 to June 30, 2022, which is computed by dividing the sum of all compensation paid each month by the number of employees (including executive officers) at the end of each month.

The following table shows information regarding our executive officers and compensation paid to them as of June 30, 2022.

 

            (Unit: in millions of Won)  

Number of

Executive  Officers(A)(1)

   Total Amount of Annual
Salaries(B)
     Average Annual Salary
per Person(B/A)
 

13

     3,160        243  

 

Note:

(1)   Excludes 19 executive officers who served primarily as executive officers at our subsidiaries.

 

7.

Major Shareholders and Related Party Transactions

 

7.1.

Major Shareholders

The following table presents information regarding holders of 5% or more of our total issued shares based on our shareholder registry as of June 30, 2022, unless specified otherwise.

 

            (Unit: shares, %)  

Name

   Number of Shares of Common Stock      Percentage of Total Issued Shares(1)  

Korean National Pension Service

     33,830,623        8.20  

JP Morgan Chase Bank, N.A.(2)

     24,328,628        5.90  

BlackRock Fund Advisors(3)

     25,050,939        6.02  

 

Notes:

(1)   Based on 412,352,494 shares of our common stock issued as of June 30, 2022.

  (2)

Depositary under the Company’s ADR program. The voting rights are held by ADR holders.

  (3)

The above number of shares and the percentage of total issued shares held by BlackRock Fund Advisors are as of February 26, 2021 and are based on disclosure made by BlackRock Fund Advisors in a statement of acquisition filing on March 10, 2021.


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7.2.

Changes in the Largest Shareholder

 

           (Unit: shares, %)  

Name of Largest Shareholder

   Date of Change in Largest
Shareholder/
Date of Change in Number
of Shares Owned
     Number of Shares of
Common Stock(1)
    Percentage of Total
Issued Shares(2)
 

Korean National Pension Service

     December 31, 2018        39,704,733       9.50  

Korean National Pension Service

     December 31, 2019        41,468,003       9.97  

Korean National Pension Service

     February 1, 2020        41,462,588 (2)      9.97  

Korean National Pension Service

     October 12, 2020        41,402,150       9.96  

Korean National Pension Service

     December 31, 2020        41,287,280       9.93  

Korean National Pension Service

     June 30, 2021        40,626,942       9.77  

Korean National Pension Service

     December 31, 2021        37,626,516       9.05  

Korean National Pension Service

     January 27, 2022        37,188,199 (3)      8.94  

Korean National Pension Service

     March 31, 2022        36,008,504       8.73  

Korean National Pension Service

     June 30, 2022        33,830,623       8.20  

 

Notes:

(1)   Based on our shareholder registry as of the end of each applicable year unless specified otherwise.

  (2)

Based on disclosure made by the Korean National Pension Service in a statement of acquisition filing on February 7, 2020.

  (3)

Based on disclosure made by the Korean National Pension Service in a statement of disposal filing on February 4, 2022.

  (4)

Total number of shares of common stock issued as of the following dates:

   

Prior to December 12, 2019: 418,111,537

   

From December 12, 2019 to February 14, 2022: 415,807,920

   

From February 14, 2022 to August 1, 2022: 412,352,494

 

7.3.

Employee Stock Ownership Association (As of June 30, 2022)

 

     (Unit: shares)  

Company Name

   Number of Shares of
Common Stock Owned
 

KB Financial Group Inc.

     52,226  

Kookmin Bank

     6,280,142  

KB Securities Co., Ltd.

     41,976  

KB Insurance Co., Ltd.

     468,220  

KB Kookmin Card Co., Ltd.

     359,186  

Prudential Life Insurance

     1,365  

KB Asset Management Co., Ltd.

     12,788  

KB Capital Co., Ltd.

     63,950  

KB Life Insurance Co., Ltd.

     22,516  

KB Real Estate Trust Co., Ltd.

     21,767  

KB Savings Bank Co., Ltd.

     8,265  

KB Investment Co., Ltd.

     1,064  

KB Data Systems Co., Ltd.

     22,850  

KB Credit Information Co., Ltd.

     13,049  

Others(1)

     10,716  
  

 

 

 

Total

     7,380,080  
  

 

 

 

 

Note:

(1)   Shares of common stock attributable to an account owned by the employee stock ownership association of KB Financial Group.


Table of Contents
7.4.

Investments in Affiliated Companies

 

(As of June 30, 2022)           (Units: shares, %, millions of Won)  

Company Name

   Ending Balance      Total assets as
of the latest
fiscal year
     Net
income (loss)
for the latest
fiscal year
 
    
Number of
shares owned
 
 
     Ownership        Book value  

Kookmin Bank

     404,379,116        100        14,821,721        483,564,898        2,590,764  

KB Securities Co., Ltd.

     298,620,424        100        3,342,391        55,493,986        594,301  

KB Insurance Co., Ltd.

     66,500,000        100        2,375,430        41,472,227        301,836  

KB Kookmin Card Co., Ltd.

     92,000,000        100        1,953,175        27,349,561        418,898  

Prudential Life Insurance

     15,000,000        100        2,310,054        24,397,804        336,198  

KB Asset Management Co., Ltd.

     7,667,550        100        96,312        375,739        79,899  

KB Capital Co., Ltd.

     32,175,147        100        673,811        14,553,877        209,899  

KB Life Insurance Co., Ltd.

     91,200,000        100        485,314        10,634,562        (46,595

KB Real Estate Trust Co., Ltd.

     16,000,000        100        121,553        496,523        81,480  

KB Savings Bank Co., Ltd.

     8,001,912        100        176,813        2,600,960        18,932  

KB Investment Co., Ltd.

     22,525,328        100        154,910        1,197,720        55,338  

KB Data Systems Co., Ltd.

     800,000        100        6,334        43,062        467  

KB Credit Information Co., Ltd.

     1,252,400        100        23,620        28,674        388  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     —          —          26,741,438        —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

7.5.

Related Party Transactions

 

  7.5.1.

Purchase of capital securities issued by KB Securities Co., Ltd.

 

(Unit: in billions of Won)

Issuer

  

Relationship

  

Type

  

Issue Amount

  

Issue Date

   Interest Rate    

Maturity Date

  

Use of Proceeds

KB Securities Co., Ltd.

   Subsidiary    No. 1 Private Placement of Capital Securities in Won    200    March 31, 2022      4.300 %      March 31, 2052 (may be extended)    Working capital

7.5.2. Purchase of capital securities issued by KB Capital Co., Ltd.

(Unit: in billions of Won)

Issuer

  

Relationship

  

Type

  

Issue Amount

  

Issue Date

   Interest Rate    

Maturity Date

  

Use of Proceeds

KB Capital Co., Ltd.

  

Subsidiary

   No. 299 Private Placement of Capital Securities in Won      50   

March 27, 2015

    
6.548
%(1) 
 
 

March 27, 2045

(may be extended)

   Working capital

Note: (1)   The interest rate has increased from its initial rate due to the non-exercise of the call option.


Table of Contents
(Unit: in billions of Won)

Issuer

  

Relationship

  

Type

  

Issue Amount

  

Issue Date

   Interest Rate    

Maturity Date

  

Use of Proceeds

KB Capital Co., Ltd.

   Subsidiary   

No. 320 Private Placement

of Capital Securities in Won

   50    September 24, 2015     
5.989
%(1) 
 
 

September 24, 2045

(may be extended)

  

Working capital

Note: (1)   The interest rate has increased from its initial rate due to the non-exercise of the call option.

(Unit: in billions of Won)

Issuer

  

Relationship

  

Type

  

Issue Amount

  

Issue Date

   Interest Rate    

Maturity Date

  

Use of Proceeds

KB Capital Co., Ltd.

  

Subsidiary

  

No. 343 Private Placement

of Capital Securities in Won

   50   

March 29, 2016

    
6.305
%(1) 
 
 

March 29, 2046

(may be extended)

  

Working capital

Note: (1)   The interest rate has increased from its initial rate due to the non-exercise of the call option.

(Unit: in billions of Won)

Issuer

  

Relationship

  

Type

  

Issue Amount

  

Issue Date

   Interest Rate    

Maturity Date

  

Use of Proceeds

KB Capital Co., Ltd.

  

Subsidiary

  

No. 352 Private Placement

of Capital Securities in Won

   50   

June 28, 2016

    
6.466
%(1) 
 
 

June 28, 2046

(may be extended)

  

Working capital

Note: (1)   The interest rate has increased from its initial rate due to the non-exercise of the call option.

(Unit: in billions of Won)

Issuer

  

Relationship

  

Type

  

Issue Amount

  

Issue Date

   Interest Rate    

Maturity Date

  

Use of Proceeds

KB Capital Co., Ltd.

  

Subsidiary

  

No. 367 Private Placement

of Capital Securities in Won

   50   

November 28, 2016

    
6.952
%(1) 
 
 

November 28, 2046

(may be extended)

  

Working capital

Note: (1)   The interest rate has increased from its initial rate due to the non-exercise of the call option.

(Unit: in billions of Won)

Issuer

  

Relationship

  

Type

  

Issue Amount

  

Issue Date

   Interest Rate    

Maturity Date

  

Use of Proceeds

KB Capital Co., Ltd.

  

Subsidiary

  

No. 378 Private Placement

of Capital Securities in Won

   50   

April 27, 2017

    
7.664
%(1) 
 
 

April 27, 2047

(may be extended)

  

Working capital

Note: (1)   The interest rate has increased from its initial rate due to the non-exercise of the call option


Table of Contents
     (Unit: in billions of Won)

Issuer

  

Relationship

  

Type

  

Issue Amount

  

Issue Date

   Interest Rate    

Maturity Date

  

Use of Proceeds

KB Capital Co., Ltd.

   Subsidiary    No. 460 Private Placement of Capital Securities in Won    100    September 25, 2020      3.376   September 25, 2050 (may be extended)   

Working capital

     (Unit: in billions of Won)

Issuer

  

Relationship

  

Type

  

Issue Amount

  

Issue Date

   Interest Rate    

Maturity Date

  

Use of Proceeds

KB Capital Co., Ltd.

  

Subsidiary

   No. 486 Private Placement of Capital Securities in Won    100   

February 17, 2022

     4.495   February 17, 2052 (may be extended)   

Working capital

7.5.3. Purchase of subordinated bonds issued by KB Savings Bank Co., Ltd.

     (Unit: in billions of Won)

Issuer

  

Relationship

  

Type

  

Issue Amount

  

Issue Date

   Interest Rate    

Maturity Date

  

Use of Proceeds

KB Savings Bank Co., Ltd.

   Subsidiary    No. 1 Subordinated Bonds in Won    70    June 25, 2021      1.600   June 25, 2031    Working capital

7.5.4. Prepayments and Loans to Subsidiaries

     (Unit: in billions of Won)

Name

  

Relationship

  

Account

  

Loan Amount

  

Current Balance

   Credit Offering
Date
   

Interest Rate

  

Maturity Date

KB Investment Co., Ltd.

   Subsidiary    Loans(1)    10    10      July 14, 2017     2.571%(2)    July 12, 2023

Notes: (1)  Unsecured credit loans.

 (2) Changed from 2.239% to 2.571% upon extension of the loans on July 12, 2022.

     (Unit: in billions of Won)

Name

  

Relationship

  

Account

  

Loan Amount

  

Current Balance

   Credit Offering
Date
   

Interest Rate

  

Maturity Date

KB Investment Co., Ltd.

   Subsidiary    Loans(1)    40    40      July 13, 2018     2.571%(2)    July 12, 2023

Notes: (1)  Unsecured credit loans.

 (2) Changed from 2.239% to 2.571% upon extension of the loans on July 12, 2022.    


Table of Contents
(Unit: in billions of Won)

Name

  

Relationship

  

Account

  

Loan
Amount

  

Current

Balance

   Credit Offering Date     

Interest
Rate

  

Maturity Date

KB Investment Co., Ltd.

   Subsidiary    Loans(1)    70    70      March 8, 2019      2.334%(2)    March 8, 2023

 

Notes: (1)  Unsecured credit loans.

 (2)   Changed from 2.245% to 2.334% upon extension of the loans on March 9, 2022.

 

(Unit: in billions of Won)

Name

  

Relationship

  

Account

  

Loan
Amount

  

Current

Balance

   Credit Offering Date     

Interest
Rate

  

Maturity Date

KB Investment Co., Ltd.

   Subsidiary    Loans(1)    30    30      March 9, 2020      2.334%(2)    March 8, 2023

 

Notes: (1)  Unsecured credit loans.

 (2)   Changed from 2.245% to 2.334% upon extension of the loans on March 9, 2022.

 

(Unit: in billions of Won)

Name

  

Relationship

  

Account

  

Loan
Amount

  

Current

Balance

   Credit Offering Date     

Interest
Rate

  

Maturity Date

KB Investment Co., Ltd.

   Subsidiary    Loans(1)    30    30      July 13, 2020      2.571%(2)    July 12, 2023

 

Notes: (1)  Unsecured credit loans.

 (2)   Changed from 2.239% to 2.571% upon extension of the loans on July 12, 2022.

 

(Unit: in billions of Won)

Name

  

Relationship

  

Account

  

Loan
Amount

  

Current

Balance

   Credit Offering
Date
    

Interest
Rate

  

Maturity Date

KB Investment Co., Ltd.

   Subsidiary    Loans(1)    70    70      December 20, 2021      2.247%    December 19, 2022

 

Note:  (1)  Unsecured credit loans.

 

(Unit: in billions of Won)

Name

  

Relationship

  

Account

  

Loan
Amount

  

Current Balance

   Credit Offering
Date
    

Interest
Rate

  

Maturity Date

KB Investment Co., Ltd.

   Subsidiary    Loans(1)    60    60      July 13, 2022      2.571%    July 12, 2023

Note:  (1)  Unsecured credit loans.


Table of Contents

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.

 

   

KB Financial Group Inc.

    (Registrant)
Date: August 16, 2022     By:   /s/ Scott Y. H. Seo
    (Signature)
    Name: Scott Y. H. Seo
    Title:   Senior Managing Director and Chief Finance Officer