KB Financial (KB) 6-K Current report (foreign)

Exhibit 99.1

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Financial Statements

June 30, 2019 and 2018

KB Financial Group Inc. and Subsidiaries

Index

June 30, 2019 and 2018

	Page(s)
Report on Review of Interim Financial statements		1 - 2
Consolidated Interim Financial Statements
Consolidated Interim Statements of Financial Position		3
Consolidated Interim Statements of Comprehensive Income		4
Consolidated Interim Statements of Changes in Equity		5
Consolidated Interim Statements of Cash Flows		6
Notes to the Consolidated Interim Financial Statements		7 - 180

Report on Review of Interim Financial Statements

(English Translation of a Report Originally Issued in Korean)

To the Shareholders and Board of Directors of

KB Financial Group Inc.

Reviewed Financial Statements

We have reviewed the accompanying consolidated interim financial statements of KB Financial Group Inc. and its subsidiaries (collectively referred to as the “Group”). These financial statements consist of the consolidated interim statement of financial position of the Group as at June 30, 2019, and the related consolidated interim statements of comprehensive income for the three-month and six-month periods ended June 30, 2019 and 2018, and consolidated interim statements of changes in equity and cash flows for the six-month periods ended June 30, 2019 and 2018, and a summary of significant accounting policies and other explanatory notes, expressed in Korean won.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated interim financial statements in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS) 1034Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of consolidated interim financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to issue a report on these consolidated interim financial statements based on our review.

We conducted our review in accordance with quarterly or semi-annual review standards established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe the accompanying consolidated interim financial statements are not presented fairly, in all material respects, in accordance with Korean IFRS 1034 Interim Financial Reporting.

Other Matters

We have audited the consolidated statement of financial position of the Group as at December 31, 2018, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, in accordance with Korean Standards on Auditing. We expressed an unqualified opinion on those financial statements, not presented herein, in our audit report dated March 12, 2019. The consolidated statement of financial position as at December 31, 2018, presented herein for comparative purposes, is consistent, in all material respects, with the above audited statement of financial position as at December 31, 2018.

Review standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to review such financial statements may differ from those generally accepted and applied in other countries.

/s/ Samil PricewaterhouseCoopers

Seoul, Korea

August 14, 2019

This report is effective as of August 14, 2019, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying consolidated interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that there is a possibility that the above review report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.

2

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Statements of Financial Position

June 30, 2019 and December 31, 2018

(in millions of Korean won)	Notes		June 30, 2019 (Unaudited)			December 31, 2018
Assets
Cash and due from financial institutions		4,6,7,37	W	22,521,290		W	20,274,490
Financial assets at fair value through profit or loss		4,6,11		48,711,872			50,987,847
Derivative financial assets		4,6,8		2,891,518			2,025,962
Loans at amortized cost		4,6,9,10		324,900,461			319,201,603
Financial investments		4,6,11		64,290,715			61,665,094
Investments in associates and joint ventures		12		526,937			504,932
Property and equipment		13		4,907,014			4,272,127
Investment property		13		2,591,919			2,119,811
Intangible assets		14		2,713,678			2,755,783
Current income tax assets		32		19,310			10,004
Deferred income tax assets		15,32		4,338			4,158
Assets held for sale		16		13,084			16,952
Other assets		4,6,17		24,086,930			15,749,535
Total assets			W	498,179,066		W	479,588,298
Liabilities
Financial liabilities at fair value through profit or loss		4,6,18	W	17,282,640		W	15,326,859
Derivative financial liabilities		4,6,8		3,257,205			2,901,247
Deposits		4,6,19		288,423,297			276,770,449
Debts		4,6,20		30,219,021			33,004,834
Debentures		4,6,21		50,851,003			53,278,697
Provisions		22		536,814			525,859
Net defined benefit liabilities		23		338,239			262,213
Current income tax liabilities		32		326,248			698,634
Deferred income tax liabilities		15,32		836,954			492,534
Insurance contract liabilities		36		34,226,218			33,412,949
Other liabilities		4,6,24		34,679,117			27,200,996
Total liabilities				460,976,756			443,875,271
Equity
Share capital		25		2,090,558			2,090,558
Hybrid securities		25		399,085			—
Capital surplus		25		17,123,338			17,121,660
Accumulated other comprehensive income		25,34		476,423			177,806
Retained earnings		25		18,338,999			17,282,441
Treasury shares		25		(1,236,188	)		(968,549	)
Equity attributable to shareholders of the parent company				37,192,215			35,703,916
Non-controlling interests				10,095			9,111
Total equity				37,202,310			35,713,027
Total liabilities and equity			W	498,179,066		W	479,588,298

The above consolidated interim statements of financial position should be read in conjunction with the accompanying notes.

3

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Statements of Comprehensive Income

Three-Month andSix-Month Periods Ended June 30, 2019 and 2018

			2019							2018
(In millions of Korean won, except per share amounts)	Notes		(Unaudited)							(Unaudited)
			Three months				Six months			Three months			Six months
Interest income			W	3,693,946			W	7,340,389		W	3,363,247		W	6,558,014
Interest income from financial instruments at fair value through other comprehensive income and amortized cost				3,509,863				6,973,537			3,181,988			6,211,858
Interest income from financial instruments at fair value through profit or loss				184,083				366,852			181,259			346,156
Interest expense				(1,396,845	)			(2,791,222	)		(1,166,878	)		(2,217,859	)
Net interest income		5,26		2,297,101				4,549,167			2,196,369			4,340,155
Fee and commission income				965,765				1,877,476			959,389			1,928,887
Fee and commission expense				(380,734	)			(741,798	)		(363,602	)		(704,178	)
Net fee and commission income		5,27		585,031				1,135,678			595,787			1,224,709
Insurance income				3,028,408				6,156,219			2,988,321			5,996,109
Insurance expense				(2,906,613	)			(5,925,641	)		(2,815,938	)		(5,675,090	)
Net Insurance Income		5,36		121,795				230,578			172,383			321,019
Net gains on financial instruments at fair value through profit or loss before applying overlay approach				251,667				524,263			107,166			100,627
Net overlay adjustments				(122,254	)			(195,178	)		33,953			116,091
Net gains on financial assets/liabilities at fair value through profit or loss		5,28		129,413				329,085			141,119			216,718
Net other operating expenses		5,29		(234,183	)			(480,511	)		(312,834	)		(526,385	)
General and administrative expenses		5,23,30		(1,486,967	)			(3,000,845	)		(1,352,027	)		(2,743,731	)
Operating profit before provision for credit losses		5		1,412,190				2,763,152			1,440,797			2,832,485
Provision for credit losses		5,7,10,11,17,22		(102,032	)			(293,745	)		(116,792	)		(281,329	)
Net operating income		5		1,310,158				2,469,407			1,324,005			2,551,156
Share of profit of associates and joint ventures		5,12		578				4,782			4,452			12,722
Net othernon-operating income		5,31		48,069				50,559			(25,351	)		82,646
Netnon-operating income/(loss)				48,647				55,341			(20,899	)		95,368
Profit before income tax		5		1,358,805				2,524,748			1,303,106			2,646,524
Income tax expense		5,32		(367,338	)			(687,351	)		(356,309	)		(731,338	)
Profit for the period		5		991,467				1,837,397			946,797			1,915,186
Items that will not be reclassified to profit or loss:
Remeasurements of net defined benefit liabilities		23		(1,703	)			(4,738	)		(3,895	)		(2,537	)
Revaluation gains/(losses) on equity instruments at fair value through other comprehensive income				(63,683	)			(32,490	)		(37,049	)		1,359
Fair value changes on financial liabilities designated at fair value due to own credit risk				(9,940	)			(21,930	)		500			4,349
				(75,326	)	��		(59,158	)		(40,444	)		3,171
Items that may be subsequently reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations				21,627				55,306			58,521			73,442
Net gains on debt instruments at fair value through other comprehensive income				94,299				151,531			46,776			23,486
Shares of other comprehensive income of associates				2,697				5,935			(194	)		(2,173	)
Cash flow hedges				(19,654	)			(38,358	)		(654	)		9,388
Gains/(losses) on hedges of a net investment in a foreign operation				(4,679	)			(8,026	)		(32,230	)		(30,669	)
Other comprehensive income arising from separate account				16,048				32,070			7,283			8,641
Net overlay adjustments		36		89,497				141,276			(24,474	)		(84,000	)
				199,835				339,734			55,028			(1,885	)
Other comprehensive income for the period, net of tax				124,509				280,576			14,584			1,286
Total comprehensive income for the period			W	1,115,976			W	2,117,973		W	961,381		W	1,916,472
Profit attributable to:
Shareholders of the Parent Company		5	W	991,192			W	1,836,844		W	946,751		W	1,914,983
Non-controlling interests		5		275				553			46			203
		5	W	991,467			W	1,837,397		W	946,797		W	1,915,186
Total comprehensive income for the period attributable to:
Shareholders of the Parent Company			W	1,115,518			W	2,117,052		W	961,242		W	1,916,263
Non-controlling interests				458				921			139			209
			W	1,115,976			W	2,117,973		W	961,381		W	1,916,472
Earnings per share		35
Basic earnings per share			W	2,534			W	4,678		W	2,389		W	4,826
Diluted earnings per share				2,518				4,647			2,376			4,796

The above consolidated interim statements of comprehensive income should be read in conjunction with the accompanying notes.

4

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Statements of Changes in Equity

Six-Month Periods Ended June 31, 2019 and 2018

	Equity attributable to the subsidiaries of the Parent Company
(in millions of Korean won)	Share Capital		Hybrid Securities		Capital Surplus		Accumulated Other Comprehensive Income			Retained Earnings			Treasury Shares			Non-controlling Interests		Total Equity
Balance at January 1, 2018	W	2,090,558	W	—	W	17,122,228	W	537,668		W	15,044,204		W	(755,973	)	W	6,144	W	34,044,829
The effect of changing of accounting policy		—		—		—		(349,476	)		(72,102	)		—			—		(421,578	)
Balance after reflecting the effect of accounting policy		2,090,558		—		17,122,228		188,192			14,972,102			(755,973	)		6,144		33,623,251
Comprehensive income
Profit for the period		—		—		—		—			1,914,983			—			203		1,915,186
Remeasurements of net defined benefit liabilities		—		—		—		(2,537	)		—			—			—		(2,537	)
Exchange differences on translating foreign operations		—		—		—		73,436			—			—			6		73,442
Net gains on financial instruments at fair value through other comprehensive income		—		—		—		24,845			—			—			—		24,845
Shares of other comprehensive income (loss) of associates and joint ventures		—		—		—		(2,173	)		—			—			—		(2,173	)
Cash flow hedges		—		—		—		9,388			—			—			—		9,388
Losses on hedges of a net investment in a foreign operation		—		—		—		(30,669	)		—			—			—		(30,669	)
Other comprehensive income(loss) arising from separate account		—		—		—		8,641			—			—			—		8,641
Fair value changes on financial liabilities designated at fair value due to own credit risk		—		—		—		4,349			—			—			—		4,349
Net overlay adjustments		—		—		—		(84,000	)		—			—			—		(84,000	)
Total comprehensive income		—		—		—		1,280			1,914,983			—			209		1,916,472
Transactions with shareholders
Dividends paid to shareholders of the Parent Company		—		—		—		—			(766,728	)		—			—		(766,728	)
Acquisition of treasury shares		—		—		—		—			—			(180,221	)		—		(180,221	)
Others		—		—		741		—			—			—			—		741
Total transactions with shareholders		—		—		741		—			(766,728	)		(180,221	)		—		(946,208	)
Balance at June 30, 2018 (Unaudited)	W	2,090,558	W	—	W	17,122,969	W	189,472		W	16,120,357		W	(936,194	)	W	6,353	W	34,593,515
Balance at January 1, 2019	W	2,090,558	W	—	W	17,121,660	W	177,806		W	17,282,441		W	(968,549	)	W	9,111	W	35,713,027
Comprehensive income
Profit for the period		—		—		—		—			1,836,844			—			553		1,837,397
Remeasurements of net defined benefit liabilities		—		—		—		(4,738	)		—			—			—		(4,738	)
Exchange differences		—		—		—		54,938			—			—			368		55,306
Net gains on financial instruments at fair value through other comprehensive income and reclassification to retained earnings		—		—		—		137,450			(18,409	)		—			—		119,041
Shares of other comprehensive income of associates and joint ventures		—		—		—		5,935			—			—			—		5,935
Cash flow hedges		—		—		—		(38,358	)		—			—			—		(38,358	)
Losses on hedges of a net investment in a foreign operation		—		—		—		(8,026	)		—			—			—		(8,026	)
Other comprehensive income arising from separate account		—		—		—		32,070			—			—			—		32,070
Fair value changes on financial liabilities designated at fair value due to own credit risk		—		—		—		(21,930	)		—			—			—		(21,930	)
Net overlay adjustments		—		—		—		141,276			—			—			—		141,276
Total comprehensive income		—		—		—		298,617			1,818,435			—			921		2,117,973
Transactions with shareholders
Dividends paid to shareholders of the Parent Company		—		—		—		—			(759,736	)		—			—		(759,736	)
Issuance of hybrid securities		—		399,085		—		—			—			—			—		399,085
Dividends on hybrid securities		—		—		—		—			(2,141	)		—			—		(2,141	)
Acquisition of treasury shares		—		—		—		—			—			(267,639	)		—		(267,639	)
Others		—		—		1,678		—			—			—			63		1,741
Total transactions with shareholders		—		399,085		1,678		—			(761,877	)		(267,639	)		63		(628,690	)
Balance at June 30, 2019 (Unaudited)	W	2,090,558	W	399,085	W	17,123,338	W	476,423		W	18,338,999		W	(1,236,188	)	W	10,095	W	37,202,310

The above consolidated interim statements of changes in equity should be read in conjunction with the accompanying notes.

5

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Statements of Cash Flows

Six-Month Periods Ended June 30, 2019 and 2018

		2019			2018
(in millions of Korean won)	Note	(Unaudited)			(Unaudited)
Cash flows from operating activities
Profit for the period		W	1,837,397		W	1,915,186
Adjustment fornon-cash items
Net loss (gain) on financial assets/liabilities at fair value through profit or loss			(104,778	)		24,769
Net loss (gain) on derivative financial instruments for hedging purposes			(10,785	)		183,865
Adjustment of fair value of derivative financial instruments			(737	)		1,134
Provision for credit losses			293,745			281,329
Net loss (gain) on financial investments			(96,935	)		(26,554	)
Share of profit of associates and joint ventures			(4,782	)		(12,722	)
Depreciation and amortization expense			363,094			178,051
Depreciation and amortization expense on VOBA			98,808			109,877
Other net losses (gains) on property and equipment/intangible assets			(25,503	)		(146,123	)
Share-based payments			13,327			1,816
Policy reserve appropriation			803,320			929,760
Post-employment benefits			114,629			109,671
Net interest expense			186,885			148,025
Loss (gain) on foreign currency translation			5,709			(147,721	)
Othernon-cash items			199,028			63,124
			1,835,025			1,698,301
Changes in operating assets and liabilities
Financial asset at fair value through profit or loss			3,569,710			(7,444,814	)
Derivative financial instruments			(282,903	)		103,657
Loans at fair value through other comprehensive income			8,806			—
Loans at amortized cost			(5,720,150	)		(14,876,364	)
Current income tax assets			(9,306	)		(7,924	)
Deferred income tax assets			174			2,449
Other assets			(11,506,425	)		(6,306,325	)
Financial liabilities at fair value through profit or loss			1,474,193			2,368,488
Deposits			11,270,604			9,160,105
Tax liabilities for current period			(372,386	)		53,567
Deferred income tax liabilities			249,145			143,641
Other liabilities			6,976,272			4,328,863
			5,657,734			(12,474,657	)
Net cash inflow (outflow) from operating activities			9,330,156			(8,861,170	)
Cash flows from investing activities
Net cash flows from derivative financial instruments for hedging purposes			(107,293	)		55,506
Disposal of financial asset at fair value through profit or loss			6,186,775			5,472,537
Acquisition of financial asset at fair value through profit or loss			(6,598,127	)		(3,293,235	)
Disposal of financial investments			42,122,954			22,743,677
Acquisition of financial investments			(44,335,453	)		(25,872,100	)
Disposal in investments in associates and joint ventures			9,670			18,668
Acquisition of investments in associates and joint ventures			(19,028	)		(32,273	)
Disposal of property and equipment			19,756			313
Acquisition of property and equipment			(226,683	)		(101,542	)
Disposal of investment property			69,053			142,044
Acquisition of investment property			(486,236	)		(899,330	)
Disposal of intangible assets			851			8,084
Acquisition of intangible assets			(98,666	)		(64,540	)
Net cash flows from the change in subsidiaries			(134,968	)		202,093
Others			58,011			232,907
Net cash outflow from investing activities			(3,539,384	)		(1,387,191	)
Cash flows from financing activities
Net cash flows from derivative financial instruments for hedging purposes			(14,483	)		123,548
Net increase (decrease) in debts			(3,299,433	)		3,580,730
Increase in debentures			47,270,138			66,898,461
Decrease in debentures			(49,945,328	)		(62,518,143	)
Increase (decrease) in other payables from trust accounts			(98,727	)		680,890
Dividends paid to shareholders of the Parent Company			(759,736	)		(766,728	)
Acquisition of treasury shares			(269,219	)		(199,023	)
Issuance of hybrid securities			399,085			—
Principal elements of lease payments			(116,569	)		—
Others			58,882			(151,288	)
Net cash inflow (outflow) from financing activities			(6,775,390	)		7,648,447
Effect of exchange rate changes on cash and cash equivalents			95,553			24,278
Net decrease in cash and cash equivalents			(889,065	)		(2,575,636	)
Cash and cash equivalents at the beginning of the period	37		6,642,816			8,404,898
Cash and cash equivalents at the end of the period	37	W	5,753,751		W	5,829,262

The above consolidated interim statements of cash flows should be read in conjunction with the accompanying notes.

6

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

1. The Parent Company

KB Financial Group Inc. (the “Parent Company”) was incorporated on September 29, 2008, under the Financial Holding Companies Act of Korea. KB Financial Group Inc. and its subsidiaries (the “Group”) derive substantially all of their revenue and income from providing a broad range of banking and related financial services to consumers and corporations primarily in Korea and in selected international markets. The Parent Company’s principal business includes ownership and management of subsidiaries and associated companies that are engaged in financial services or activities. In 2011, Kookmin Bank spun off its credit card business segment and established a new separate credit card company, KB Kookmin Card Co., Ltd., and KB Investment & Securities Co., Ltd. merged with KB Futures Co., Ltd. The Group established KB Savings Bank Co., Ltd. in January 2012, acquired Yehansoul Savings Bank Co., Ltd. in September 2013, and KB Savings Bank Co., Ltd. merged with Yehansoul Savings Bank Co., Ltd. in January 2014. In March 2014, the Group acquired Woori Financial Co., Ltd. and changed the name to KB Capital Co., Ltd. Meanwhile, the Group included LIG Insurance Co., Ltd. as an associate and changed the name to KB Insurance Co., Ltd. in June 2015. Also, the Group included Hyundai Securities Co., Ltd. as an associate in June 2016 and included as a subsidiary in October 2016 by comprehensive exchange of shares. Hyundai Securities Co., Ltd. merged with KB Investment & Securities Co., Ltd. in December 2016 and changed the name to KB Securities Co., Ltd. in January 2017. KB Insurance Co., Ltd. became one of the subsidiaries through a tender offer in May 2017.

The Parent Company’s share capital as of June 30, 2019, isW 2,090,558 million. The Parent Company has been listed on the Korea Exchange (“KRX”) since October 10, 2008, and on the New York Stock Exchange (“NYSE”) for its American Depositary Shares (“ADS”) since September 29, 2008. Number of shares authorized in its Articles of Incorporation is 1,000 million.

2. Basis of Preparation

2.1 Application of Korean IFRS

The consolidated financial statements of the Group have been prepared in accordance with Korean IFRS. These are the standards, subsequent amendments and related interpretations issued by the International Accounting Standards Board (“IASB”) that have been adopted by the Republic of Korea.

The preparation of consolidated financial statements requires the use of certain critical accounting estimates. Management also needs to exercise judgment in applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 2.4.

The Group’s consolidated interim financial statements for thesix-month period ended June 30, 2019 were prepared in accordance with Korean IFRS 1034Interim Financial Reporting. These consolidated interim financial statements have been prepared in accordance with Korean IFRS which is effective or early adopted as at June 30, 2019.

The Group recognized an amount of services to customers as expenses in previous interim but recognized as the reduction of revenue in accordance with Korean IFRS 1115Revenue from Contracts with Customers. Accordingly, certain accounts reported in the consolidated statements of comprehensive income for the six-month period ended June 30, 2018 have been reclassified to facilitate the comparison with the consolidated statements of comprehensive income for the six-month period ended June 30, 2019. The reclassification of the accounts does not have any effect on the net asset value or net income of the Group as reported in the six-month period ended June 30, 2018.

7

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

2.1.1 New and amended standards and interpretations adopted by the Group

The Group has applied the following standards and amendments for the first time for their annual reporting period commencing January 1, 2019.

• Enactment of Korean IFRS 1116 Leases

Korean IFRS 1116Leases replaces Korean IFRS 1017 Leases. Under Korean IFRS 1116, with implementation of a single lease model, lessee is required to recognize assets and liabilities for all lease which lease term is over 12 months and underlying assets are not low value assets. A lessee is required to recognize aright-of-use asset and a lease liability representing its obligation to make lease payments.

With implementation of Korean IFRS 1116 Lease, the Group has changed accounting policy. The Group has adopted Korean IFRS 1116 retrospectively, as permitted under the specific transitional provisions in the standard, and recognized the cumulative impact of initially applying the standard as at January 1, 2019, the date of initial application. The Group has not restated comparatives for the 2018 reporting period. The impact of the adoption of the leasing standard and the new accounting policies are disclosed in Note 42.

• Amendments to Korean IFRS 1109Financial Instruments

The narrow-scope amendments made to Korean IFRS 1109Financial Instruments enable entities to measure certain prepayable financial assets with negative compensation at amortized cost. When a modification of a financial liability measured at amortized cost that does not result in the derecognition, a modification gain or loss shall be recognized in profit or loss. The amendment does not have a significant impact on the financial statements.

• Amendments to Korean IFRS 1019Employee Benefits

The amendments require that an entity shall calculate current service cost and net interest for the remainder of the reporting period after a plan amendment, curtailment or settlement based on updated actuarial assumptions from the date of the change. The amendments also require that a reduction in a surplus must be recognized in profit or loss even if that surplus was not previously recognized because of the impact of the asset ceiling. The amendment does not have a significant impact on the financial statements.

• Amendments to Korean IFRS 1028Investments in Associates and Joint Ventures

The amendments clarify that an entity shall apply Korean IFRS 1109 to financial instruments in an associate or joint venture to which the equity method is not applied. These include long-term interests that, in substance, form part of the entity’s net investment in an associate or joint venture. The amendment does not have a significant impact on the financial statements.

8

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

• Enactment of Interpretation of Korean IFRS 2123Uncertainty over Income Tax Treatments

The enactment clarifies the accounting for uncertainties in income taxes in the event that the decision of taxation authorities or courts can change tax treatment. The enactment presents calculating methods of disclosure amount based on the possibility of future recognition of the income tax treatment, and requires disclosure of the uncertainty of the amount. The enactment does not have a significant impact on the financial statements.

• Annual Improvements to Korean IFRS 1103Business Combination

The amendments clarify that when a party to a joint arrangement obtains control of a business that is a joint operation, and had rights to the assets and obligations for the liabilities relating to that joint operation immediately before the acquisition date, the transaction is a business combination achieved in stages. In such cases, the acquirer shall remeasure its entire previously held interest in the joint operation. The amendment does not have a significant impact on the financial statements.

• Annual Improvements to Korean IFRS 1111Joint Agreements

The amendments clarify that when a party that participates in, but does not have joint control of, a joint operation might obtain joint control of the joint operation in which the activity of the joint operation constitutes a business. In such cases, previously held interests in the joint operation are not remeasured. The amendment does not have a significant impact on the financial statements.

• Annual Improvements to Paragraph 57A of Korean IFRS 1012Income Tax

The amendment is applied to all the income tax consequences of dividends and requires an entity to recognize the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognized those past transactions or events. The amendment does not have a significant impact on the financial statements.

• Annual Improvements to Korean IFRS 1023Borrowing Cost

The amendments clarify that if a specific borrowing remains outstanding after the related qualifying asset is ready for its intended use (or sale), it becomes part of general borrowings. The amendment does not have a significant impact on the financial statements.

2.1.2 New and amended standards and interpretations not yet adopted by the Group

There are no new accounting standards and interpretations that are effective for the annual reporting period commencing January 1, 2019 and have not been early adopted by the Group.

2.2 Measurement Basis

The consolidated financial statements have been prepared under the historical cost convention unless otherwise specified.

9

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

2.3 Functional and Presentation Currency

Items included in the financial statements of each entity of the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Korean won, which is the Parent Company’s functional and presentation currency.

2.4 Critical Accounting Estimates

The preparation of consolidated financial statements requires the application of accounting policies, certain critical accounting estimates and assumptions that may have a significant impact on the assets (liabilities) and incomes (expenses). Management’s estimates of outcomes may differ from actual outcomes if management’s estimates and assumptions based on management’s best judgment at the reporting date are different from the actual environment.

Estimates and assumptions are continually evaluated and any change in an accounting estimate is recognized prospectively by including it in profit or loss in the period of the change, if the change affects that period only. Alternatively if the change in accounting estimate affects both the period of change and future periods, that change is recognized in the profit or loss of all those periods.

The significant accounting estimates and assumptions are consistently applied to all periods presented, except for the assumptions for income tax expense.

3. Significant Accounting Policies

The significant accounting policies and calculation methods applied in the preparation of these consolidated financial statements have been consistently applied to all periods presented, except for the impact of changes due to enactment of new standards, amendments and interpretations disclosed in Note 2.1 and the following paragraph.

3.1 Income Tax Expenses for the Interim Period

Income tax expense for the interim period is measured by expected average annual income tax rate applicable on expected total annual income.

3.2 Hybrid securities

If the Group is an issuer of financial instruments, an amount of financial instruments can be classified as either financial liabilities or equity in accordance with the terms of the contract. The Group classifies hybrid securities as an equity if the Group has the unconditional right to avoid any contractual obligation to deliver financial assets such as cash in relation to the financial instruments.

10

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

4. Financial Risk Management

4.1 Summary

4.1.1 Overview of financial risk management policy

The financial risks that the Group is exposed to are credit risk, market risk, liquidity risk, operational risk and others.

The Group’s risk management system focuses on increasing transparency, developing the risk management environment, preventing transmission of risk to other related subsidiaries, and the preemptive response to risk due to rapid changes in the financial environment to support the Group’s long-term strategy and business decisions efficiently. Credit risk, market risk, liquidity risk, and operational risk have been recognized as the Group’s key risks. These risks are measured and managed in Economic Capital or VaR (Value at Risk) using a statistical method.

4.1.2 Risk management organization

Risk Management Committee

The Risk Management Committee establishes risk management strategies in accordance with the directives of the Board of Directors and determines the Group’s target risk appetite. The Committee approves significant risk matters and reviews the level of risks that the Group is exposed to and the appropriateness of the Group’s risk management operations as an ultimate decision-making authority.

Risk Management Council

The Risk Management Council is a consultative group which reviews and makes decisions on matters delegated by the Risk Management Committee, and discusses the detailed issues relating to the Group’s risk management.

Risk Management Division

The Risk Management Division is responsible for monitoring and managing the Group’s economic capital limit and managing detailed policies, procedures and working processes relating to the Group’s risk management.

4.2 Credit Risk

4.2.1 Overview of credit risk

Credit risk is the risk of possible losses in an asset portfolio in the event of a counterparty’s default, breach of contract and deterioration in the credit quality of the counterparty. For risk management reporting purposes, the individual borrower’s default risk, country risk, specific risks and other credit risk exposure components are considered as a whole.

The Group uses definition of default as defined and applied in the calculation of Capital Adequacy Ratio (Basel III) in accordance with the new Basel Accord.

11

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

4.2.2 Credit risk management

The Group measures expected losses and economic capital on assets that are subject to credit risk management whetheron- or off-balance sheet items and uses expected losses and economic capital as a management indicator. The Group manages credit risk by allocating credit risk economic capital limits.

In addition, the Group controls the credit concentration risk exposure by applying and managing total exposure limits to prevent an excessive risk concentration to each industry and borrower.

The Group has organized a credit risk management team that focuses on credit risk management in accordance with the Group’s credit risk management policy. Especially, the loan analysis department of Kookmin Bank, one of the subsidiaries, is responsible for loan policy, loan limit, loan review, credit management, restructuring and subsequent event management, independently of operating department. On the other hand, risk management group of Kookmin Bank is responsible for planning risk management policy, applying limits of credit lines, measuring the credit risk economic capital, adjusting credit limits, reviewing credit and verifying credit evaluation models.

4.2.3 Maximum exposure to credit risk

The Group’s maximum exposures of financial instruments, excluding equity securities, to credit risk without consideration of collateral values as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019		December 31, 2018
Financial assets
Due from financial institutions at amortized cost1	W	20,090,802	W	17,216,288
Financial assets at fair value through profit or loss
Due from financial institutions		293,452		381,719
Securities		46,005,132		48,285,482
Loans		961,197		954,176
Financial instruments indexed to the price of gold		73,971		78,808
Derivatives		2,891,518		2,025,962
Loans at amortized cost1		324,900,461		319,201,603
Financial investments
Securities measured at fair value through other comprehensive income		37,645,314		35,243,634
Securities at amortized cost1		23,833,824		23,661,522
Loans measured at fair value through other comprehensive income		422,889		389,822
Other financial assets1		15,063,899		8,133,556
		472,182,459		455,572,572
Off-balance sheet items
Acceptances and guarantees contracts		7,948,835		7,277,136
Financial guarantee contracts		3,373,235		3,626,532
Commitments		143,787,247		138,590,372
		155,109,317		149,494,040
	W627,291,776		W605,066,612

¹  Due from financial institutions, loans at amortized cost, securities at amortized cost and other financial assets are net of allowance.

12

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

4.2.4 Credit risk of loans

The Group maintains an allowance for loan losses associated with credit risk on loans to manage its credit risk.

The Group assesses expected credit loss on financial asset at amortized cost and financial asset at fair value through other comprehensive income other than financial asset at fair value through profit or loss and recognizes loss allowance. Expected credit losses are a probability-weighted estimate of possible credit losses in within certain range by reflecting reasonable and supportable information that which is reasonably available at the reporting date without undue cost or effort, including information about past events, current conditions and forecasts of future economic conditions. The Group assesses the expected credit losses for loans categorized in financial assets at amortized cost, and presents it with the name of account ‘allowance for loan losses provision for allowance’ netting from the related carrying amounts. For the expected credit losses for loans categorized in financial assets at fair value through other comprehensive income, the Group presents it at other comprehensive income.

Loans as of June 30, 2019 and December 31, 2018, are classified as follows:

(In millions of Korean won)

	June 30, 2019
	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				Financial instruments not applying expected credit losses		Total
			Non-impaired		Impaired
Loans at amortized cost1
Corporate
Grade 1	W	79,559,029	W	2,497,920	W	1,118	W	—	W	82,058,067
Grade 2		55,018,681		4,292,916		2,029		—		59,313,626
Grade 3		2,864,801		1,921,267		5,476		—		4,791,544
Grade 4		568,726		956,989		49,613		—		1,575,328
Grade 5		359,738		361,222		949,926		—		1,670,886
		138,370,975		10,030,314		1,008,162		—		149,409,451
Retail
Grade 1		135,621,505		4,663,487		5,025		—		140,290,017
Grade 2		7,892,215		7,663,737		20,789		—		15,576,741
Grade 3		2,019,566		1,084,764		5,051		—		3,109,381
Grade 4		579,263		363,207		14,208		—		956,678
Grade 5		7,755		514,609		556,038		—		1,078,402
		146,120,304		14,289,804		601,111		—		161,011,219
Credit card
Grade 1		8,042,061		185,102		—		—		8,227,163
Grade 2		4,499,728		613,337		—		—		5,113,065
Grade 3		1,470,267		1,112,140		—		—		2,582,407
Grade 4		35,800		397,590		—		—		433,390
Grade 5		783		149,099		445,045		—		594,927
		14,048,639		2,457,268		445,045		—		16,950,952
		298,539,918		26,777,386		2,054,318		—		327,371,622
Loans at fair value through other comprehensive income
Corporate
Grade 1		251,648		—		—		—		251,648
Grade 2		114,574		27,750		—		—		142,324
Grade 3		—		28,917		—		—		28,917
Grade 4		—		—		—		—		—
Grade 5		—		—		—		—		—
		366,222		56,667		—		—		422,889
		366,222		56,667		—		—		422,889
	W	298,906,140	W	26,834,053	W	2,054,318	W	—	W	327,794,511

¹ Before netting of allowance.

13

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				Financial instruments not applying expected credit losses		Total
			Non-impaired		Impaired
Loans at amortized cost1
Corporate
Grade 1	W	75,785,147	W	2,144,175	W	1,638	W	—	W	77,930,960
Grade 2		55,292,251		4,227,041		2,016		—		59,521,308
Grade 3		2,957,463		1,757,607		6,579		—		4,721,649
Grade 4		484,248		965,094		68,271		—		1,517,613
Grade 5		244,593		378,588		1,063,646		—		1,686,827
		134,763,702		9,472,505		1,142,150		—		145,378,357
Retail
Grade 1		133,946,705		4,411,122		9,180		—		138,367,007
Grade 2		7,819,152		7,497,880		17,767		—		15,334,799
Grade 3		1,718,104		1,559,980		6,694		—		3,284,778
Grade 4		706,797		421,800		13,318		—		1,141,915
Grade 5		14,110		447,064		489,196		—		950,370
		144,204,868		14,337,846		536,155		—		159,078,869
Credit card
Grade 1		8,411,723		176,312		—		—		8,588,035
Grade 2		4,449,617		587,254		—		—		5,036,871
Grade 3		1,460,344		1,228,087		—		—		2,688,431
Grade 4		6,004		467,012		—		—		473,016
Grade 5		112		148,149		419,444		—		567,705
		14,327,800		2,606,814		419,444		—		17,354,058
		293,296,370		26,417,165		2,097,749		—		321,811,284
Loans at fair value through other comprehensive income
Corporate
Grade 1		189,501		25,731		—		—		215,232
Grade 2		128,712		45,878		—		—		174,590
Grade 3		—		—		—		—		—
Grade 4		—		—		—		—		—
Grade 5		—		—		—		—		—
		318,213		71,609		—		—		389,822
		318,213		71,609		—		—		389,822
	W	293,614,583	W	26,488,774	W	2,097,749	W	—	W	322,201,106

¹ Before netting of allowance.

14

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Credit quality of loans graded according to internal credit ratings are as follows:

	Range of Probability of Default (%)	Retail	Corporate
Grade 1	0.0 ~ 1.0	1 ~ 5 grade	AAA ~ BBB+
Grade 2	1.0 ~ 5.0	6 ~ 8 grade	BBB ~ BB
Grade 3	5.0 ~ 15.0	9 ~ 10 grade	BB- ~ B
Grade 4	15.0 ~ 30.0	11 grade	B- ~ CCC
Grade 5	30.0 ~	12 grade or under	CC or under

The quantification of the extent to which collateral and other credit enhancements mitigate credit risk as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				Total
			Non-impaired		Impaired
Guarantees	W	63,554,144	W	6,224,190	W	164,857	W	69,943,191
Deposits and savings		4,320,018		84,264		6,349		4,410,631
Property and equipment		9,366,613		536,335		64,410		9,967,358
Real estate		147,969,255		13,328,012		467,827		161,765,094
	W	225,210,030	W	20,172,801	W	703,443	W	246,086,274
(In millions of Korean won)	December 31, 2018
	The financial instruments applying12-month expected credit losses		The financial instruments applying lifetime expected credit losses				Total
			Non-impaired		Impaired
Guarantees	W	60,473,663	W	5,871,980	W	151,180	W	66,496,823
Deposits and savings		4,200,448		77,024		6,485		4,283,957
Property and equipment		8,644,719		616,318		54,492		9,315,529
Real estate		147,682,808		12,828,076		442,287		160,953,171
	W	221,001,638	W	19,393,398	W	654,444	W	241,049,480

15

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

4.2.5 Credit quality of securities

Financial assets at fair value through profit or loss and financial investments excluding equity securities that are exposed to credit risk as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				Financial instruments not applying expected credit losses		Total
			Non-impaired		Impaired
Securities at amortized cost1
Grade 1	W	23,659,246	W	—	W	—	W	—	W	23,659,246
Grade 2		133,064		—		—		—		133,064
Grade 3		43,302		—		—		—		43,302
Grade 4		—		—		—		—		—
Grade 5		—		—		—		—		—
		23,835,612		—		—		—		23,835,612
Securities measured at fair value through other comprehensive income
Grade 1		35,102,086		—		—		—		35,102,086
Grade 2		2,494,891		—		—		—		2,494,891
Grade 3		42,744		—		—		—		42,744
Grade 4		2,590		—		—		—		2,590
Grade 5		—		—		3,003		—		3,003
		37,642,311		—		3,003		—		37,645,314
	W	61,477,923	W	—	W	3,003	W	—	W	61,480,926

(In millions of Korean won)	December 31, 2018
	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				Financial instruments not applying expected credit losses		Total
			Non-impaired		Impaired
Securities at amortized cost1
Grade 1	W	23,524,120	W	—	W	—	W	—	W	23,524,120
Grade 2		120,546		—		—		—		120,546
Grade 3		18,572		—		—		—		18,572
Grade 4		—		—		—		—		—
Grade 5		—		—		—		—		—
		23,663,238		—		—		—		23,663,238
Securities measured at fair value through other comprehensive income
Grade 1		32,498,155		—		—		—		32,498,155
Grade 2		2,740,053		—		—		—		2,740,053
Grade 3		—		—		—		—		—
Grade 4		2,510		—		—		—		2,510
Grade 5		—		—		2,916		—		2,916
		35,240,718		—		2,916		—		35,243,634
	W	58,903,956	W	—	W	2,916	W	—	W	58,906,872

¹ Before netting of allowance

16

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

The credit qualities of securities, excluding equity securities according to the credit ratings by external rating agencies as of June 30, 2019, and December 31, 2018, are as follows:

Credit quality	Domestic				Foreign
	KIS	NICE P&I	KAP	FnPricing Inc.	S&P	Fitch-IBCA	Moody’s
Grade 1	AA0 to AAA	AA0 to AAA	AA0 to AAA	AA0 to AAA	A- to AAA	A- to AAA	A3 to Aaa
Grade 2	A- to AA-	A- to AA-	A- to AA-	A- to AA-	BBB- to BBB+	BBB- to BBB+	Baa3 to Baa1
Grade 3	BBB0 to BBB+	BBB0 to BBB+	BBB0 to BBB+	BBB0 to BBB+	BB to BB+	BB to BB+	Ba2 to Ba1
Grade 4	BB0 to BBB-	BB0 to BBB-	BB0 to BBB-	BB0 to BBB-	B+ to BB-	B+ to BB-	B1 to Ba3
Grade 5	BB- or under	BB- or under	BB- or under	BB- or under	B or under	B or under	B2 or under

Credit qualities of debt securities denominated in Korean won are based on the lowest credit rating by the domestic credit rating agencies above, and those denominated in foreign currencies are based on the lowest credit rating by the foreign credit rating agencies above.

4.2.6 Credit risk of due from financial institutions

The credit quality of due from financial institutions as of June 30, 2019 and December 31, 2018, are classified as follows:

(In millions of Korean won)			June 30, 2019
	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				Financial instruments not applying expected credit losses		Total
			Non-impaired		Impaired
Due from financial institutions at amortized cost1
Grade 1	W	19,274,608	W	—	W	—	W	—	W	19,274,608
Grade 2		159,352		—		—		—		159,352
Grade 3		537,525		—		—		—		537,525
Grade 4		117,656		—		—		—		117,656
Grade 5		3,825		—		—		—		3,825
	W	20,092,966	W	—	W	—	W	—	W	20,092,966

¹ Before netting of allowance

17

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				Financial instruments not applying expected credit losses		Total
			Non-impaired		Impaired
Due from financial institutions at amortized cost1
Grade 1	W	16,374,868	W	—	W	—	W	—	W	16,374,868
Grade 2		213,903		—		—		—		213,903
Grade 3		608,314		—		—		—		608,314
Grade 4		19,531		—		—		—		19,531
Grade 5		1,691		—		—		—		1,691
	W	17,218,307	W	—	W	—	W	—	W	17,218,307

¹ Before netting of allowance

The credit qualities of due from financial institutions according to the credit ratings by external rating agencies as of June 30, 2019 and December 31, 2018, are same as the credit qualities of securities, excluding equity securities.

4.2.7 Credit risk concentration analysis

Details of the Group’s loans by jurisdiction as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Retail		Corporate		Credit card		Total		%		Allowances			Carrying amount
Korea	W	160,588,169	W	144,802,274	W	16,948,485	W	322,338,928		98.05	W	(2,432,181	)	W	319,906,747
Europe		—		734,601		—		734,601		0.22		(765	)		733,836
China		—		2,692,951		357		2,693,308		0.82		(20,933	)		2,672,375
Japan		105		531,342		40		531,487		0.16		(552	)		530,935
United States		—		1,216,655		—		1,216,655		0.37		(8,284	)		1,208,371
Others		422,945		815,714		2,070		1,240,729		0.38		(8,446	)		1,232,283
	W	161,011,219	W	150,793,537	W	16,950,952	W	328,755,708		100.00	W	(2,471,161	)	W	326,284,547

18

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	Retail		Corporate		Credit card		Total		%		Allowances			Carrying amount
Korea	W	158,760,865	W	141,864,644	W	17,346,224	W	317,971,733		98.40	W	(2,574,236	)	W	315,397,497
Europe		—		649,281		—		649,281		0.20		(512	)		648,769
China		—		2,259,202		807		2,260,009		0.70		(20,570	)		2,239,439
Japan		106		354,181		60		354,347		0.11		(1,900	)		352,447
United States		—		997,321		6,967		1,004,288		0.31		(5,706	)		998,582
Others		317,898		597,726		—		915,624		0.28		(6,757	)		908,867
	W	159,078,869	W	146,722,355	W	17,354,058	W	323,155,282		100.00	W	(2,609,681	)	W	320,545,601

¹  The above is the Group’s loans at fair value through profit and loss, fair value through other comprehensive income and amortized cost.

Details of the Group’s corporate loans by industry as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Loans		%		Allowances			Carrying amount
Financial institutions	W	16,628,311		11.03	W	(44,353	)	W	16,583,958
Manufacturing		43,661,511		28.95		(410,586	)		43,250,925
Service		60,203,433		39.92		(232,525	)		59,970,908
Wholesale & Retail		17,953,835		11.91		(110,732	)		17,843,103
Construction		3,588,429		2.38		(189,948	)		3,398,481
Public sector		893,528		0.59		(1,980	)		891,548
Others		7,864,490		5.22		(96,945	)		7,767,545
	W	150,793,537		100.00	W	(1,087,069	)	W	149,706,468
(In millions of Korean won)	December 31, 2018
	Loans		%		Allowances			Carrying amount
Financial institutions	W	14,193,442		9.67	W	(45,473	)	W	14,147,969
Manufacturing		42,672,986		29.08		(449,406	)		42,223,580
Service		61,467,174		41.89		(270,846	)		61,196,328
Wholesale & Retail		16,739,852		11.41		(102,197	)		16,637,655
Construction		3,282,508		2.24		(291,211	)		2,991,297
Public sector		873,281		0.60		(3,301	)		869,980
Others		7,493,112		5.11		(93,409	)		7,399,703
	W	146,722,355		100.00	W	(1,255,843	)	W	145,466,512

19

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Types of the Group’s retail and credit card loans as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Loans		%		Allowances			Carrying amount
Housing	W	72,781,115		40.90	W	(30,882	)	W	72,750,233
General		88,230,104		49.58		(643,642	)		87,586,462
Credit card		16,950,952		9.52		(709,568	)		16,241,384
	W	177,962,171		100.00	W	(1,384,092	)	W	176,578,079
(In millions of Korean won)	December 31, 2018
	Loans		%		Allowances			Carrying amount
Housing	W	70,916,004		40.19	W	(29,369	)	W	70,886,635
General		88,162,865		49.97		(613,528	)		87,549,337
Credit card		17,354,058		9.84		(710,941	)		16,643,117
	W	176,432,927		100.00	W	(1,353,838	)	W	175,079,089

20

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Credit risk concentration of due from financial institutions, securities, excluding equity securities and derivative financial instruments

Details of the Group’s Credit risk concentration of due from financial institutions, securities, excluding equity securities, and derivative financial instruments as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Amount		%		Allowances			Carrying amount
Due from financial institutions at amortized cost
Banking and insurance	W	20,092,966		100.00	W	(2,164	)	W	20,090,802
		20,092,966		100.00		(2,164	)		20,090,802
Due from financial institutions at fair value through profit or loss
Banking and insurance		293,452		100.00		—			293,452
		293,452		100.00		—			293,452
Securities measured at fair value through profit or loss
Government and government funded institutions		12,922,321		28.09		—			12,922,321
Banking and insurance		27,724,033		60.26		—			27,724,033
Others		5,358,778		11.65		—			5,358,778
		46,005,132		100.00		—			46,005,132
Derivatives
Government and government funded institutions		35,337		1.22		—			35,337
Banking and insurance		2,679,079		92.66		—			2,679,079
Others		177,102		6.12		—			177,102
		2,891,518		100.00		—			2,891,518
Securities measured at fair value through other comprehensive income
Government and government funded institutions		12,595,921		33.46		—			12,595,921
Banking and insurance		19,729,463		52.41		—			19,729,463
Others		5,319,930		14.13		—			5,319,930
		37,645,314		100.00		—			37,645,314
Securities at amortized cost
Government and government funded institutions		10,608,382		44.51		(28	)		10,608,354
Banking and insurance		11,269,529		47.28		(1,427	)		11,268,102
Others		1,957,701		8.21		(333	)		1,957,368
		23,835,612		100.00		(1,788	)		23,833,824
	W	130,763,994			W	(3,952	)	W	130,760,042

21

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	Amount		%		Allowances			Carrying amount
Due from financial institutions at amortized cost
Banking and insurance	W	17,218,307		100.00	W	(2,019	)	W	17,216,288
		17,218,307		100.00		(2,019	)		17,216,288
Due from financial institutions at fair value through profit or loss
Banking and insurance		381,719		100.00		—			381,719
		381,719		100.00		—			381,719
Securities measured at fair value through profit or loss
Government and government funded institutions		14,354,157		29.73		—			14,354,157
Banking and insurance		27,273,372		56.48		—			27,273,372
Others		6,657,953		13.79		—			6,657,953
		48,285,482		100.00		—			48,285,482
Derivatives
Government and government funded institutions		39,290		1.94		—			39,290
Banking and insurance		1,849,078		91.27		—			1,849,078
Others		137,594		6.79		—			137,594
		2,025,962		100.00		—			2,025,962
Securities measured at fair value through other comprehensive income
Government and government funded institutions		9,504,156		26.97		—			9,504,156
Banking and insurance		21,210,983		60.18		—			21,210,983
Others		4,528,495		12.85		—			4,528,495
		35,243,634		100.00		—			35,243,634
Securities at amortized cost
Government and government funded institutions		10,321,667		43.62		(25	)		10,321,642
Banking and insurance		11,424,418		48.28		(1,399	)		11,423,019
Others		1,917,153		8.10		(292	)		1,916,861
		23,663,238		100.00		(1,716	)		23,661,522
	W	126,818,342			W	(3,735	)	W	126,814,607

22

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Credit risk concentrations of due from financial institutions, securities, excluding equity securities, and derivative financial instruments by country

Details of the Group’s credit risk concentration of due from financial institutions, securities, excluding equity securities, and derivative financial instruments by country, as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Amount		%		Allowances			Carrying amount
Due from financial institutions at amortized cost
Korea	W	15,855,196		78.91	W	(576	)	W	15,854,620
United States		1,116,611		5.56		(13	)		1,116,598
Others		3,121,159		15.53		(1,575	)		3,119,584
		20,092,966		100.00		(2,164	)		20,090,802
Due from financial institutions at fair value through profit or loss
Korea		293,452		100.00		—			293,452
		293,452		100.00		—			293,452
Securities measured at fair value through profit or loss
Korea		41,631,928		90.49		—			41,631,928
United States		1,644,248		3.57		—			1,644,248
Others		2,728,956		5.94		—			2,728,956
		46,005,132		100.00		—			46,005,132
Derivatives
Korea		1,700,457		58.81		—			1,700,457
United States		396,150		13.70		—			396,150
France		311,240		10.76		—			311,240
Others		483,671		16.73		—			483,671
		2,891,518		100.00		—			2,891,518
Securities measured at fair value through other comprehensive income
Korea		35,437,434		94.14		—			35,437,434
United States		708,604		1.88		—			708,604
Others		1,499,276		3.98		—			1,499,276
		37,645,314		100.00		—			37,645,314
Securities at amortized cost
Korea		21,185,820		88.88		(1,097	)		21,184,723
United States		1,296,392		5.44		(225	)		1,296,167
Others		1,353,400		5.68		(466	)		1,352,934
		23,835,612		100.00		(1,788	)		23,833,824
	W	130,763,994			W	(3,952	)	W	130,760,042

23

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	Amount		%		Allowances			Carrying amount
Due from financial institutions at amortized cost
Korea	W	13,497,329		78.39	W	(338	)	W	13,496,991
United States		826,660		4.80		(16	)		826,644
Others		2,894,318		16.81		(1,665	)		2,892,653
		17,218,307		100.00		(2,019	)		17,216,288
Due from financial institutions at fair value through profit or loss
Korea		381,719		100.00		—			381,719
		381,719		100.00		—			381,719
Securities measured at fair value through profit or loss
Korea		43,697,736		90.50		—			43,697,736
United States		1,813,902		3.76		—			1,813,902
Others		2,773,844		5.74		—			2,773,844
		48,285,482		100.00		—			48,285,482
Derivatives
Korea		1,024,392		50.56		—			1,024,392
United States		316,482		15.62		—			316,482
France		237,080		11.70		—			237,080
Singapore		109,101		5.39		—			109,101
Japan		97,351		4.81		—			97,351
Others		241,556		11.92		—			241,556
		2,025,962		100.00		—			2,025,962
Securities measured at fair value through other comprehensive income
Korea		33,156,041		94.08		—			33,156,041
United States		1,100,199		3.12		—			1,100,199
Others		987,394		2.80		—			987,394
		35,243,634		100.00		—			35,243,634
Securities at amortized cost
Korea		21,175,749		89.49		(1,136	)		21,174,613
United States		1,252,426		5.29		(216	)		1,252,210
Others		1,235,063		5.22		(364	)		1,234,699
		23,663,238		100.00		(1,716	)		23,661,522
	W	126,818,342			W	(3,735	)	W	126,814,607

Due from financial institutions, financial assets at fair value through profit or loss and derivatives that are linked to gold price are mostly relevant to financial and insurance industry with high credit ratings.

24

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

4.3 Liquidity Risk

4.3.1 Overview of liquidity risk

Liquidity risk is a risk that the Group becomes insolvency due to uncertain liquidity caused by unexpected cash outflows, or a risk of borrowing high interest debts or disposal of liquid and other assets at a substantial discount. The Group manages its liquidity risk through analysis of the contractual maturity of interest-bearing assets and liabilities, assets and liabilities related to the other cash flow, andoff-balance sheet items related to cash flow of currency derivative instruments and others.

Cash flows disclosed for the maturity analysis are undiscounted contractual principal and interest to be received (paid) and; thus, are not identical to the amount in the financial statements that are based on the present value of expected cash flows in some cases. The amount of interest to be received or paid on floating rate assets and liabilities is measured on the assumption that the current interest rate would be the same through the maturity.

4.3.2. Liquidity risk management and indicator

The liquidity risk is managed by risk management policy and liquidity risk management guidelines which are applied to the risk management policies and procedures that address all the possible risks that arise from the overall business of the Group.

The Group computes and manages cumulative liquidity gap and liquidity rate subject to every transactions that affect cash flow in Korean won and foreign currencies andoff-balance sheet transactions in relation to the liquidity. The Group regularly reports to the Risk Planning Council and Risk Management Committee.

25

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

4.3.3. Analysis of remaining contractual maturity of financial assets and liabilities

Cash flows disclosed below are undiscounted contractual principal and interest to be received (paid) and; thus, are not identical to the amount in the consolidated financial statements that are based on the present value of expected cash flows. The amount of interest to be received or paid on floating rate assets and liabilities is measured on the assumption that the current interest rate would be the same through the maturity.

The remaining contractual maturity of financial assets and liabilities, excluding derivatives held for cash flow hedging, as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	On demand		Up to 1 month			1-3 months		3-12 months		1-5 years		Over 5 years		Total
Financial assets
Cash and due from financial institutions1	W	4,823,470	W	1,398,710		W	287,330	W	1,082,232	W	34,456	W	—	W	7,626,198
Financial assets at fair value through profit or loss		47,241,202		646,871			115,167		432,785		200,533		1,054,978		49,691,536
Derivatives held for trading2		2,751,793		—			—		—		—		—		2,751,793
Derivatives held for fair value hedging3		—		(2,357	)		26,895		16,098		18,623		51,229		110,488
Loans at amortized cost		3,398,027		32,373,540			33,894,565		113,001,402		88,554,351		101,025,053		372,246,938
Financial investments4
Financial assets measured at fair value through other comprehensive income		2,102,969		1,911,815			3,163,851		8,388,305		22,973,204		3,483,455		42,023,599
Securities at amortized cost		—		1,118,320			1,558,586		5,047,025		7,445,105		15,387,266		30,556,302
Other financial assets		67,807		12,393,183			183,938		1,397,771		36,025		41,949		14,120,673
	W	60,385,268	W	49,840,082		W	39,230,332	W	129,365,618	W	119,262,297	W	121,043,930	W	519,127,527

26

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	June 30, 2019
	On demand		Up to 1 month		1-3 months			3-12 months			1-5 years		Over 5 years			Total
Financial liabilities
Financial liabilities at fair value through profit or loss2	W	3,151,727	W	—	W	—		W	—		W	—	W	—		W	3,151,727
Financial liabilities designated at fair value through profit or loss2		14,130,913		—		—			—			—		—			14,130,913
Derivatives held for trading2		3,053,623		—		—			—			—		—			3,053,623
Derivatives held for fair value hedging3		—		6,293		(8,265	)		(19,209	)		6,946		(63	)		(14,298	)
Deposits5		132,739,887		19,807,271		28,933,074			99,063,018			9,607,002		2,660,544			292,810,796
Debts		5,892,222		7,892,979		3,913,466			6,528,508			4,890,958		1,324,444			30,442,577
Debentures		24,364		1,920,731		6,242,688			9,967,796			32,343,639		3,561,941			54,061,159
Other financial liabilities		86,884		22,697,977		300,807			511,510			931,560		191,706			24,720,444
	W	159,079,620	W	52,325,251	W	39,381,770		W	116,051,623		W	47,780,105	W	7,738,572		W	422,356,941
Off- balance sheet items
Commitments6	W	143,787,247	W	—	W	—		W	—		W	—	W	—		W	143,787,247
Financial guarantee contract7		3,373,235		—		—			—			—		—			3,373,235
	W	147,160,482	W	—	W	—		W	—		W	—	W	—		W	147,160,482

¹ The amounts ofW 14,919,460 million, which is restricted due from the financial institutions as of June 30, 2019, is excluded.

²  Financial liabilities measured or designated at fair value through profit or loss and derivatives held for trading are not managed by contractual maturity because they are expected to be traded or redeemed before maturity. Therefore, the carrying amounts of those financial instruments are classified as ‘on demand’ category.

³ Cash flows of derivative instruments held for hedging are shown at net cash flow by remaining contractual maturity.

⁴ The equity securities designated as financial assets measured at fair value through other comprehensive income are included under the ‘On demand’ category as they can be disposed without difficulty. However, the equity securities restricted from disposal are included on the category that the releasing date of restriction is belonged to.

⁵ Deposits that are contractually repayable on demand or on short notice are classified under the ‘on demand’ category.

⁶ Commitments are included under the ‘On demand’ category because payments will be made upon request.

⁷ The financial guarantee contracts are included under the ‘On demand’ category as payments will be made upon request.

27

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	On demand		Up to 1 month		1-3 months		3-12 months		1-5 years		Over 5 years		Total
Financial assets
Cash and due from financial institutions1	W	5,636,123	W	1,481,598	W	242,353	W	538,579	W	81,646	W	—	W	7,980,299
Financial assets at fair value through profit or loss		50,139,812		672,326		162,459		254,632		215,436		1,113,694		52,558,359
Derivatives held for trading2		1,915,532		—		—		—		—		—		1,915,532
Derivatives held for fair value hedging3		—		4,344		1,724		17,948		21,367		40,830		86,213
Loans at amortized cost		3,180,412		27,520,126		32,374,297		116,479,553		84,600,284		102,789,366		366,944,038
Financial investments4
Financial assets measured at fair value through other comprehensive income		2,117,560		1,812,270		2,694,083		11,210,903		18,626,405		2,728,392		39,189,613
Securities at amortized cost		—		1,245,353		1,483,667		4,412,816		8,932,468		14,380,433		30,454,737
Other financial assets		89,890		5,454,381		160,182		1,488,164		53,425		37,841		7,283,883
	W	63,079,329	W	38,190,398	W	37,118,765	W	134,402,595	W	112,531,031	W	121,090,556	W	506,412,674

28

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	On demand		Up to 1 month			1-3 months			3-12 months			1-5 years		Over 5 years		Total
Financial liabilities
Financial liabilities at fair value through profit or loss2	W	2,823,820	W	—		W	—		W	—		W	—	W	—	W	2,823,820
Financial liabilities designated at fair value through profit or loss2		12,503,039		—			—			—			—		—		12,503,039
Derivatives held for trading2		2,724,994		—			—			—			—		—		2,724,994
Derivatives held for fair value hedging3		—		(2,403	)		(8,231	)		(37,851	)		13,831		31		(34,623	)
Deposits5		126,781,682		16,852,129			28,053,517			95,568,339			11,284,243		2,608,630		281,148,540
Debts		5,909,297		10,355,022			3,975,372			7,205,116			4,714,743		1,249,785		33,409,335
Debentures		30,160		1,699,165			5,875,093			13,471,021			32,474,579		2,489,146		56,039,164
Other financial liabilities		91,381		15,943,018			170,851			275,135			581,537		65,721		17,127,643
	W	150,864,373	W	44,846,931		W	38,066,602		W	116,481,760		W	49,068,933	W	6,413,313	W	405,741,912
Off- balance sheet items
Commitments6	W	138,590,372	W	—		W	—		W	—		W	—	W	—	W	138,590,372
Financial guarantee contract7		3,626,532		—			—			—			—		—		3,626,532
	W	142,216,904	W	—		W	—		W	—		W	—	W	—	W	142,216,904

¹ The amounts ofW 12,394,461 million, which is restricted due from the financial institutions as of December 31, 2018, is excluded.

²  Financial liabilities measured or designated at fair value through profit or loss and derivatives held for trading are not managed by contractual maturity because they are expected to be traded or redeemed before maturity. Therefore, the carrying amounts of those financial instruments are classified as ‘on demand’ category.

³ Cash flows of derivative instruments held for hedging are shown at net cash flow by remaining contractual maturity.

⁴ The equity securities designated as financial assets measured at fair value through other comprehensive income are are included under the ‘On demand’ category as they can be disposed without difficulty. However, the equity securities restricted from disposal are included on the category that the releasing date of restriction is belonged to.

⁵ Deposits that are contractually repayable on demand or on short notice are classified under the ‘on demand’ category.

⁶ Commitments are included under the ‘On demand’ category because payments will be made upon request.

⁷ The financial guarantee contracts are included under the ‘On demand’ category as payments will be made upon request.

29

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

The contractual cash flows of derivatives held for cash flow hedging as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Up to 1 month			1-3 months			3-12 months			1-5 years			Over 5 years		Total
Net cash flow ofnet-settled derivatives	W	24		W	(4,823	)	W	(14,514	)	W	(44,563	)	W	—	W	(63,876	)
Cash flow to be received of gross-settlement derivatives		265,775			358,513			1,582,641			1,076,200			—		3,283,129
Cash flow to be paid of gross-settlement derivatives		(270,723	)		(363,076	)		(1,627,049	)		(610,390	)		—		(2,871,238	)

(In millions of Korean won)	December 31, 2018
	Up to 1 month			1-3 months			3-12 months			1-5 years			Over 5 years			Total
Net cash flow ofnet-settled derivatives	W	(172	)	W	1,999		W	2,743		W	1,949		W	(66	)	W	6,453
Cash flow to be received of gross-settled derivatives		47,526			129,826			286,219			2,116,253			—			2,579,824
Cash flow to be paid of gross-settled derivatives		(50,281	)		(137,834	)		(286,165	)		(2,151,808	)		—			(2,626,088	)

4.4 Market Risk

4.4.1 Concept

Market risk represents possible losses which arise from changes in market factors including interest rate, stock price, foreign exchange rate and other market factors that affect the fair value or future cash flows of financial instruments including securities and derivatives amongst others. The most significant risk associated with trading positions interest rate risks, currency risks and also, stock price risks. In addition, the Group is exposed to interest rate risks associated withnon-trading positions. The Group classifies exposures to market risk into either trading ornon-trading positions. The Group measures and manages market risk separately for each subsidiary.

30

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

4.4.2 Risk management

The Group sets internal capital limits for market risk and interest rate risk and monitors the risks to manage the risk of trading andnon-trading positions. The Group maintains risk management systems and procedures including trading policies and procedures, and market risk management guidelines for trading positions, and interest rate risk management guidelines fornon-trading positions in order to manage market risk efficiently. The procedures mentioned are implemented with approval from the Risk Management Committee and Risk Management Council.

Kookmin Bank, one of the subsidiaries, establishes market risk management policy, sets position limits, loss limits and VaR limits of each business group and approves newly developed instruments through its Risk Management Council. The Market Risk Management Committee, which is chaired by the Chief Risk Officer (CRO), is the decision maker and sets position limits, loss limits, VaR limits, sensitivity limits and scenario loss limits for each division, at the level of each individual business department.

The ALCO of Kookmin Bank determines the operational standards of interest and commission, the details of the establishment and prosecution of the Asset Liability Management (ALM) policies and enacts and amends relevant guidelines. The Risk Management Committee and Risk Management Council monitor the establishment and enforcement of ALM risk management policies, and enact and amend ALM risk management guidelines. The interest rate risk limit is set based on the future assets/liabilities position and interest rate volatility estimation reflects the annual work plan. The ALM Department and Risk Management Department measures and monitors the interest risk status and limits on a regular basis. The status and limits of interest rate risks including interest gap, duration gap and interest rate VaR (Value at Risk), are reported to the ALCO and Risk Management Council on a monthly basis and to the Risk Management Committee on a quarterly basis. To ensure adequacy of interest rate and liquidity risk management, the Risk Management Department assigns the limits, monitors and reviews the risk management procedures and tasks conducted by the ALM Department. Also, the Risk Management Department independently reports related information to the management.

4.5 Operational Risk

4.5.1 Concept

The Group defines operational risk broadly to include all financial andnon-financial risks that may arise from operating activities and could cause a negative effect on capital.

4.5.2 Risk management

The purpose of operational risk management is not only to comply with supervisory and regulatory requirements but also to promote a risk management culture, strengthen internal controls, innovate processes and provide timely feedback to management and employees. In addition, Kookmin Bank established Business Continuity Plans (BCP) to ensure critical business functions can be maintained, or restored, in the event of material disruptions arising from internal or external events. It has constructed replacement facilities as well as has carried out exercise drills for head office and IT departments to test its BCPs.

31

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

5. Segment Information

5.1 Overall Segment Information and Business Segments

The Group classifies reporting segments based on the nature of the products and services provided, the type of customer, and the Group’s management organization.

Banking Business	Corporate Banking	Loans, deposit products and other related financial services to large, small andmedium-sized enterprises and SOHOs.
	Retail Banking	Loans, deposit products and other related financial services to individuals and households.
	Other Banking Services	Trading activities in securities and derivatives, funding and other supporting activities.
Securities Business		Investment banking, brokerage services and other supporting activities.
Non-life Insurance Business		The activities within this segment include property insurance and other supporting activities.
Credit Card Business		The activities within this segment include credit sale, cash service, card loan and other supporting activities.
Life Insurance Business		Life insurance and other supporting activities.

32

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Financial information by business segment for thesix-month period ended June 30, 2019, is as follows:

(In millions of Korean won)	Banking business
	Corporate Banking			Retail Banking			Other Banking Services			Sub-total			Securities			Non-life Insurance			Credit Card			Life Insurance			Others			Intra-group adjustment			Total
Operating revenues from external customers	W	1,151,486		W	1,551,491		W	723,965		W	3,426,942		W	594,923		W	683,409		W	719,848		W	71,401		W	267,474		W	—		W	5,763,997
Intra-segment operating revenues (expenses)		131,462			—			82,955			214,417			(28,025	)		(47,211	)		(109,510	)		(15,333	)		87,095			(101,433	)		—
	W	1,282,948		W	1,551,491		W	806,920		W	3,641,359		W	566,898		W	636,198		W	610,338		W	56,068		W	354,569		W	(101,433	)	W	5,763,997
Net interest income	W	1,410,222		W	1,582,951		W	146,512		W	3,139,685		W	266,882		W	308,554		W	603,774		W	84,511		W	145,388		W	373		W	4,549,167
Interest income		2,318,643			2,465,625			637,314			5,421,582			424,182			309,313			776,420			84,484			340,714			(16,306	)		7,340,389
Interest expense		(908,421	)		(882,674	)		(490,802	)		(2,281,897	)		(157,300	)		(759	)		(172,646	)		27			(195,326	)		16,679			(2,791,222	)
Net fee and commission income (expenses)		173,309			253,524			151,030			577,863			283,524			(76,730	)		104,851			(8,531	)		253,403			1,298			1,135,678
Fee and commission income		221,852			298,842			216,281			736,975			331,943			3,610			673,462			70			288,882			(157,466	)		1,877,476
Fee and commission expense		(48,543	)		(45,318	)		(65,251	)		(159,112	)		(48,419	)		(80,340	)		(568,611	)		(8,601	)		(35,479	)		158,764			(741,798	)
Net insurance income (expenses)		—			—			—			—			—			279,744			8,012			(53,222	)		—			(3,956	)		230,578
Insurance income		—			—			—			—			—			5,684,091			15,197			470,494			—			(13,563	)		6,156,219
Insurance expenses		—			—			—			—			—			(5,404,347	)		(7,185	)		(523,716	)		—			9,607			(5,925,641	)
Net gains (losses) on financial instruments at fair value through profit or loss		(3,339	)		—			245,729			242,390			(53,585	)		140,096			239			33,595			57,419			(91,069	)		329,085
Net other operating income (expense)		(297,244	)		(284,984	)		263,649			(318,579	)		70,077			(15,466	)		(106,538	)		(285	)		(101,641	)		(8,079	)		(480,511	)
General and administrative expenses		(581,315	)		(937,799	)		(340,657	)		(1,859,771	)		(363,314	)		(420,008	)		(204,378	)		(33,372	)		(166,034	)		46,032			(3,000,845	)
Operating profit before Provision for credit losses		701,633			613,692			466,263			1,781,588			203,584			216,190			405,960			22,696			188,535			(55,401	)		2,763,152
Provision (reversal) for credit losses		85,457			(105,055	)		(4,575	)		(24,173	)		(5,077	)		3,044			(209,061	)		2,198			(60,703	)		27			(293,745	)
Net operating income		787,090			508,637			461,688			1,757,415			198,507			219,234			196,899			24,894			127,832			(55,374	)		2,469,407
Share of profit of associates and joint ventures		—			—			4,422			4,422			622			(4	)		408			1			1,963			(2,630	)		4,782
Net othernon-operating income (expense)		(65	)		—			3,982			3,917			33,638			9,777			(1,257	)		(145	)		18,796			(14,167	)		50,559
Segment profits before income tax		787,025			508,637			470,092			1,765,754			232,767			229,007			196,050			24,750			148,591			(72,171	)		2,524,748
Income tax expense		(217,210	)		(139,876	)		(103,559	)		(460,645	)		(63,870	)		(62,628	)		(49,950	)		(8,226	)		(48,266	)		6,234			(687,351	)
Profit for the period		569,815			368,761			366,533			1,305,109			168,897			166,379			146,100			16,524			100,325			(65,937	)		1,837,397
Profit attributable to shareholders of the Parent Company		569,815			368,761			366,533			1,305,109			168,890			166,153			146,099			16,524			99,544			(65,475	)		1,836,844
Profit attributable tonon-controlling interests		—			—			—			—			7			226			1			—			781			(462	)		553
Total assets1		133,526,108			142,108,454			98,326,748			373,961,310			44,731,565			36,087,142			20,713,386			10,001,142			40,776,955			(28,092,434	)		498,179,066
Total liabilities1		131,176,590			154,080,277			61,356,283			346,613,150			40,129,450			32,225,046			16,821,351			9,384,111			17,430,512			(1,626,864	)		460,976,756

¹  Assets and liabilities of the reporting segments are amounts before intra-segment transaction adjustment.

33

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Financial information by business segment for thesix-month period ended June 30, 2018, is as follows:

(In millions of Korean won)	Banking business
	Corporate Banking			Retail Banking			Other Banking Services			Sub-total			Securities			Non-life Insurance			Credit Card			Life Insurance			Others			Intra-group adjustment			Total
Operating revenues from external customers	W	1,106,122		W	1,551,985		W	579,878		W	3,237,985		W	578,701		W	697,234		W	771,462		W	63,144		W	227,690		W	—		W	5,576,216
Intra-segment operating revenues (expenses)		66,370			—			87,281			153,651			(14,099	)		(28,679	)		(106,261	)		(16,607	)		93,433			(81,438	)		—
	W	1,172,492		W	1,551,985		W	667,159		W	3,391,636		W	564,602		W	668,555		W	665,201		W	46,537		W	321,123		W	(81,438	)	W	5,576,216
Net interest income (expense)		1,322,666			1,428,642			216,186			2,967,494			256,107			301,093			571,523			93,895			149,182			861			4,340,155
Interest income		2,000,845			2,173,988			586,550			4,761,383			381,378			301,268			715,859			93,904			314,305			(10,083	)		6,558,014
Interest expense		(678,179	)		(745,346	)		(370,364	)		(1,793,889	)		(125,271	)		(175	)		(144,336	)		(9	)		(165,123	)		10,944			(2,217,859	)
Net fee and commission income (expense)		136,797			320,100			199,882			656,779			363,665			(71,122	)		117,468			(6,491	)		167,203			(2,793	)		1,224,709
Fee and commission income		176,246			356,637			254,684			787,567			418,201			730			681,923			163			195,941			(155,638	)		1,928,887
Fee and commission expense		(39,449	)		(36,537	)		(54,802	)		(130,788	)		(54,536	)		(71,852	)		(564,455	)		(6,654	)		(28,738	)		152,845			(704,178	)
Net insurance income (expense)		—			—			—			—			—			376,452			9,597			(71,176	)		—			6,146			321,019
Insurance income		—			—			—			—			—			5,404,944			16,623			586,242			—			(11,700	)		5,996,109
Insurance expense		—			—			—			—			—			(5,028,492	)		(7,026	)		(657,418	)		—			17,846			(5,675,090	)
Net gains (losses) on financial instruments at fair value through profit or loss		2,697			—			203,988			206,685			(102,212	)		97,593			8,052			35,694			29,968			(59,062	)		216,718
Net other operating income (expense)		(289,668	)		(196,757	)		47,103			(439,322	)		47,042			(35,461	)		(41,439	)		(5,385	)		(25,230	)		(26,590	)		(526,385	)
General and administrative expenses		(475,420	)		(903,558	)		(301,944	)		(1,680,922	)		(357,596	)		(401,191	)		(206,201	)		(31,645	)		(136,139	)		69,963			(2,743,731	)
Operating profit before provision for credit losses		697,072			648,427			365,215			1,710,714			207,006			267,364			459,000			14,892			184,984			(11,475	)		2,832,485
Provision (reversal) for credit losses		72,387			(84,116	)		13,124			1,395			(357	)		(10,432	)		(208,971	)		323			(63,354	)		67			(281,329	)
Net operating income		769,459			564,311			378,339			1,712,109			206,649			256,932			250,029			15,215			121,630			(11,408	)		2,551,156
Share of profit of associates and joint ventures		—			—			23,146			23,146			(280	)		—			(459	)		—			487			(10,172	)		12,722
Net othernon-operating income (expense)		(179	)		—			105,300			105,121			3,682			8,179			(19,132	)		(93	)		(1,495	)		(13,616	)		82,646
Segment profits before income tax		769,280			564,311			506,785			1,840,376			210,051			265,111			230,438			15,122			120,622			(35,196	)		2,646,524
Income tax expense		(202,238	)		(149,792	)		(135,013	)		(487,043	)		(57,216	)		(76,924	)		(61,809	)		(4,285	)		(43,381	)		(680	)		(731,338	)
Profit for the reporting period		567,042			414,519			371,772			1,353,333			152,835			188,187			168,629			10,837			77,241			(35,876	)		1,915,186
Profit attributable to shareholders of the Parent Company		567,042			414,519			371,772			1,353,333			152,831			188,115			168,629			10,837			76,930			(35,692	)		1,914,983
Profit attributable tonon-controlling interests		—			—			—			—			4			72			—			—			311			(184	)		203
Total assets1		131,303,734			140,814,393			84,841,131			356,959,258			45,086,292			34,785,551			20,528,951			9,680,379			40,399,287			(27,851,420	)		479,588,298
Total liabilities1		123,880,329			152,173,062			54,238,001			330,291,392			40,613,424			31,289,705			16,570,282			9,128,148			17,441,868			(1,459,548	)		443,875,271

¹  Assets and liabilities of the reporting segments are amounts before intra-segment transaction adjustment as of December 31, 2018.

34

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

5.2 Services and Geographical Segments

5.2.1 Services information

Operating revenues from external customers for each service for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)
	2019		2018
Banking service	W	3,426,942	W	3,237,985
Securities service		594,923		578,701
Non-life Insurance service		683,409		697,234
Credit card service		719,848		771,462
Life insurance service		71,401		63,144
Other service		267,474		227,690
	W	5,763,997	W	5,576,216

5.2.2 Geographical information

Geographical operating revenues from external customers for thesix-month periods ended June 30, 2019 and 2018, and majornon-current assets as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)
	2019		2018		June 30, 2019		December 31, 2018
	Revenues from external customers				Majornon-current assets
Domestic	W	5,637,176	W	5,484,795	W	9,170,073	W	8,114,196
United States		25,035		23,121		382,519		370,252
New Zealand		3,270		2,942		507		72
China		50,314		46,501		16,416		5,454
Cambodia		10,311		4,356		5,655		3,733
United Kingdom		4,773		4,758		2,998		537
Others		33,118		9,743		569,232		584,466
Intra-groupadjustment		—		—		65,211		69,011
	W	5,763,997	W	5,576,216	W	10,212,611	W	9,147,721

35

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

6. Financial Assets and Financial Liabilities

6.1 Classification and Fair Value of Financial Instruments

6.1.1 Carrying amount and fair value of financial assets and liabilities as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Carrying amount		Fair value
Financial assets
Cash and due from financial institutions	W	22,521,290	W	22,521,829
Financial assets at fair value through profit or loss		48,711,872		48,711,872
Due from financial institutions		293,452		293,452
Debt securities		46,005,132		46,005,132
Equity securities		1,378,120		1,378,120
Loans		961,197		961,197
Others		73,971		73,971
Derivatives held for trading		2,751,793		2,751,793
Derivatives held for hedging		139,725		139,725
Loans at amortized cost		324,900,461		325,954,388
Financial assets measured at fair value through other comprehensive income		40,456,891		40,456,891
Debt securities		37,645,314		37,645,314
Equity securities		2,388,688		2,388,688
Loans		422,889		422,889
Securities at amortized cost		23,833,824		25,142,287
Others		15,063,899		15,063,899
	W	478,379,755	W	480,742,684
Financial liabilities
Financial liabilities at fair value through profit or loss	W	3,151,727	W	3,151,727
Financial liabilities designated at fair value through profit or loss		14,130,913		14,130,913
Derivatives held for trading		3,053,623		3,053,623
Derivatives held for hedging		203,582		203,582
Deposits		288,423,297		289,201,957
Debts		30,219,021		30,287,227
Debentures		50,851,003		51,585,595
Other financial liabilities		27,606,932		27,606,932
	W	417,640,098	W	419,221,556

36

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	Carrying amount		Fair value
Financial assets
Cash and due from financial institutions	W	20,274,490	W	20,271,261
Financial assets at fair value through profit or loss		50,987,847		50,987,847
Due from financial institutions		381,719		381,719
Debt securities		48,285,482		48,285,482
Equity securities		1,287,662		1,287,662
Loans		954,176		954,176
Others		78,808		78,808
Derivatives held for trading		1,915,532		1,915,532
Derivatives held for hedging		110,430		110,430
Loans at amortized cost		319,201,603		320,003,844
Financial assets measured at fair value through other comprehensive income		38,003,572		38,003,572
Debt securities		35,243,634		35,243,634
Equity securities		2,370,116		2,370,116
Loans		389,822		389,822
Securities at amortized cost		23,661,522		24,159,137
Others		8,133,556		8,133,556
	W	462,288,552	W	463,585,179
Financial liabilities
Financial liabilities at fair value through profit or loss	W	2,823,820	W	2,823,820
Financial liabilities designated at fair value through profit or loss		12,503,039		12,503,039
Derivatives held for trading		2,724,994		2,724,994
Derivatives held for hedging		176,253		176,253
Deposits		276,770,449		277,423,194
Debts		33,004,834		33,028,205
Debentures		53,278,697		53,771,564
Other financial liabilities		19,828,307		19,833,885
	W	401,110,393	W	402,284,954

The fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. For each class of financial assets and financial liabilities, the Group discloses the fair value of that class of assets and liabilities in a way that permits it to be compared with its carrying amount at the end of each reporting period. The best evidence of fair value of financial instruments is a quoted price in an active market.

37

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Methods of determining fair value for financial instruments are as follows:

Cash and due from financial institutions	The carrying amounts of cash and demand due from financial institutions and payment due from financial institutions are a reasonable approximation of fair values. These financial instruments do not have a fixed maturity and are receivable on demand. Fair value of ordinary due from financial institutions is measured using DCF model (Discounted Cash Flow Model).
Investment securities	The fair value of financial instruments that are quoted in active markets is determined using the quoted prices. Fair value is determined through the use of external professional valuation institution where quoted prices are not available. The institutions use one or more of the following valuation techniques including DCF Model, Free Cash Flow to Equity Model, Comparable Company Analysis, Dividend Discount Model, Risk Adjusted Discount Rate Method, and Net Asset Value Method.
Loans at amortized cost	DCF model is used to determine the fair value of loans. Fair value is determined by discounting the expected cash flows, which are contractual cash flows adjusted by the expected prepayment rate, at appropriate discount rate.
Derivatives and Financial instruments at fair value through profit or loss	For exchange traded derivatives, quoted price in an active market is used to determine fair value and for OTC derivatives, fair value is determined using valuation techniques. The Group uses internally developed valuation models that are widely used by market participants to determine fair values of plain vanilla OTC derivatives including options, interest rate swaps, and currency swaps, based on observable market parameters. However, some complex financial instruments are valued using appropriate models developed from generally accepted market valuation models including the Finite Difference Method, the Monte Carlo Simulation, Black-Scholes Model, Hull and White Model, Closed Form and Tree Model or valuation results from independent external professional valuation institution.
Deposits	Carrying amount of demand deposits is regarded as representative of fair value because they do not have a fixed maturity and are payable on demand. Fair value of time deposits is determined using a DCF model. Fair value is determined by discounting the expected cash flows, which are contractual cash flows adjusted by the expected prepayment rate, at an appropriate discount rate.
Debts	Carrying amount of overdraft in foreign currency is regarded as representative of fair value because they do not have a fixed maturity and are payable on demand. Fair value of other debts is determined using a DCF model discounting contractual future cash flows at an appropriate discount rate.
Debentures	Fair value is determined by using the valuations of external professional valuation institution, which are calculated using market inputs.
Other financial assets and liabilities	The carrying amounts are reasonable approximation of fair values. These financial instruments are temporary accounts used for other various transactions and their maturities are relatively short or not defined.

38

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

6.1.2 Fair value hierarchy

The Group believes that valuation methods used for measuring the fair values of financial instruments are reasonable and that the fair values recognized in the statements of financial position are appropriate. However, the fair values of the financial instruments recognized in the statements of financial position may be different if other valuation methods or assumptions are used. Additionally, as there is a variety of valuation techniques and assumptions used in measuring fair value, it may be difficult to reasonably compare the fair value with that of other financial institutions.

The Group classifies and discloses fair value of the financial instruments into the three-level hierarchy as follows:

Level 1: The fair values are based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2: The fair values are based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: The fair values are based on unobservable inputs for the asset or liability.

The level in the fair value hierarchy within which the fair value measurement is categorized in its entirety shall be determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement.

39

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Fair value hierarchy of financial assets and liabilities measured at fair value in the statements of financial position

The fair value hierarchy of financial assets and liabilities measured at fair value in the statements of financial position as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Fair value hierarchy
	Level 1		Level 2		Level 3		Total
Financial assets
Financial assets at fair value through profit or loss
Due from financial institutions	W	—	W	242,192	W	51,260	W	293,452
Debt securities		10,057,708		27,730,608		8,216,816		46,005,132
Equity securities		761,695		221,423		395,002		1,378,120
Loans		—		650,329		310,868		961,197
Others		73,971		—		—		73,971
		10,893,374		28,844,552		8,973,946		48,711,872
Derivatives held for trading		55,181		2,476,847		219,765		2,751,793
Derivatives held for hedging		—		139,725		—		139,725
Financial assets measured at fair value through other comprehensive income
Debt securities		9,363,596		28,281,718		—		37,645,314
Equity securities		937,930		66,031		1,384,727		2,388,688
Loans		—		422,889		—		422,889
		10,301,526		28,770,638		1,384,727		40,456,891
	W	21,250,081	W	60,231,762	W	10,578,438	W	92,060,281
Financial liabilities
Financial liabilities at fair value through profit or loss	W	3,151,727	W	—	W	—	W	3,151,727
Financial liabilities designated at fair value through profit or loss		231		1,551,100		12,579,582		14,130,913
Derivatives held for trading		239,004		2,690,095		124,524		3,053,623
Derivatives held for hedging		—		203,582		—		203,582
	W	3,390,962	W	4,444,777	W	12,704,106	W	20,539,845

40

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	Fair value hierarchy
	Level 1		Level 2		Level 3		Total
Financial assets
Financial assets at fair value through profit or loss
Due from financial institutions	W	—	W	332,976	W	48,743	W	381,719
Debt securities		11,312,317		29,879,850		7,093,315		48,285,482
Equity securities		737,808		178,309		371,545		1,287,662
Loans		—		740,973		213,203		954,176
Others		78,808		—		—		78,808
		12,128,933		31,132,108		7,726,806		50,987,847
Derivatives held for trading		67,436		1,737,033		111,063		1,915,532
Derivatives held for hedging		—		110,430		—		110,430
Financial assets measured at fair value through other comprehensive income
Debt securities		9,542,948		25,700,686		—		35,243,634
Equity securities		971,367		66,031		1,332,718		2,370,116
Loans		—		389,822		—		389,822
		10,514,315		26,156,539		1,332,718		38,003,572
	W	22,710,684	W	59,136,110	W	9,170,587	W	91,017,381
Financial liabilities
Financial liabilities at fair value through profit or loss	W	2,823,820	W	—	W	—	W	2,823,820
Financial liabilities designated at fair value through profit or loss		126		1,629,530		10,873,383		12,503,039
Derivatives held for trading		479,264		1,834,536		411,194		2,724,994
Derivatives held for hedging		—		176,253		—		176,253
	W	3,303,210	W	3,640,319	W	11,284,577	W	18,228,106

41

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Valuation techniques and the inputs used in the fair value measurement classified as Level 2

Financial assets and liabilities measured at fair value classified as Level 2 in the statements of financial position as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)
	June 30, 2019
	Fair value		Valuation techniques	Inputs
Financial assets
Financial assets at fair value through profit or loss
Due from financial institutions		242,192	One factor Hull-White Model, DCF Model	Discount rate, Volatility and others
Debt securities		27,730,608	DCF Model, Closed Form, Monte Carlo Simulation, Black-Scholes Model, Hull and White Model, Net Asset Value and others	Projected cash flow, Fair value of underlying asset, Dividend yield, Interest rate, Underlying asset price, Discount rate, Volatility and others
Equity securities		221,423	DCF Model	Interest rate, Discount rate and others
Loans		650,329	DCF Model	Interest rate, Discount rate and others
		28,844,552
Derivatives held for trading		2,476,847	DCF Model, FDM, Closed Form, Option Model, Monte Carlo Simulation, Black-Scholes Model, Hull and White Model and others	Underlying asset Index, Discount rate, Volatility, Foreign exchange rate, Stock price, Dividend rate, Volatility of underlying assets, correlation coefficient between basic assets, default rate and others
Derivatives held for hedging		139,725	DCF Model, Closed Form, FDM	Discount rate, Volatility, Foreign exchange rate and Others
Financial assets measured at fair value through other comprehensive income
Debt securities		28,281,718	DCF Model, Option model, Market value approach	Discount rate, Underlying asset Index, Volatility and others
Equity securities		66,031	DCF Model, Black-Scholes Model	Discount rate, Volatility, Price of Underlying asset and others
Loans		422,889	DCF Model, Option Model	Discount rate, Underlying asset Index, Volatility
		28,770,638
		60,231,762
Financial liabilities
Financial liabilities designated at fair value through profit or loss		1,551,100	DCF closed Formula, Monte Carlo Simulation Model, Black-Scholes Model, Hull and White Model and others	Price of Underlying asset, Interest rate, Dividend rate, Volatility, Discount rate
Derivatives held for trading		2,690,095	DCF Closed Formula, Monte Carlo Simulation Model, Black-Scholes Model, Hull and White Model, Option Model, FDM and others	Discount rate, Price of Underlying asset , Volatility, Foreign exchange rate, Credit Spread, Stock price, Correlation coefficient, Dividend yield rate, Default rate and others
Derivatives held for hedging		203,582	DCF Model, Closed Form, FDM and others	Discount rate, Volatility, Foreign exchange rate and others
		4,444,777

42

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)
	December 31, 2018
	Fair value		Valuation techniques	Inputs
Financial assets
Financial assets at fair value through profit or loss
Due from financial institutions	W	332,976	One factor Hull-White Model, DCF Model	Discount rate, Volatility and others
Debt securities		29,879,850	DCF Model, Closed Form, Monte Carlo Simulation, Black-Scholes Model, Hull and White Model, Net Asset Value and others	Projected cash flow, Fair value of underlying asset, Dividend yield, Interest rate, Underlying asset price, Discount rate, Volatility and others
Equity securities		178,309	DCF Model	Interest rate, Discount rate and others
Loans		740,973	DCF Model	Interest rate, Discount rate and others
		31,132,108
Derivatives held for trading		1,737,033	DCF Model, FDM, Closed Form, Option Model, Monte Carlo Simulation, Black-Scholes Model, Hull and White Model and others	Underlying asset Index, Discount rate, Volatility, Foreign exchange rate, Stock price, Dividend rate and others
Derivatives held for hedging		110,430	DCF Model, Closed Form, FDM	Discount rate, Volatility, Foreign exchange rate and Others
Financial assets measured at fair value through other comprehensive income
Debt securities		25,700,686	DCF Model, Option model, Market value approach	Discount rate, Underlying asset Index, Volatility, Interest rate and others
Equity securities		66,031	DCF Model, Black-Scholes Model	Discount rate, Volatility, Price of Underlying asset and others
Loans		389,822	DCF Model	Discount rate
		26,156,539
	W	59,136,110
Financial liabilities
Financial liabilities designated at fair value through profit or loss		1,629,530	DCF Model, Closed Form, Monte Carlo Simulation, Black-Scholes Model, Hull and White Model and others	Price of Underlying asset, Discount rate, Dividend rate, Volatility
Derivatives held for trading		1,834,536	DCF Model, Closed Form, FDM and others	Discount rate, Price of Underlying asset , Volatility, Foreign exchange rate, Credit Spread, Stock price and others
Derivatives held for hedging		176,253	DCF Model, Closed Form, FDM and others	Discount rate, Volatility, Foreign exchange rate and others
	W	3,640,319

43

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Fair value hierarchy of financial assets and liabilities whose fair values are disclosed

The fair value hierarchy of financial assets and liabilities whose fair values are disclosed as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Fair value hierarchy
	Level 1		Level 2		Level 3		Total
Financial assets
Cash and due from financial institutions1	W	2,680,598	W	15,602,454	W	4,238,777	W	22,521,829
Loans at amortized cost		—		434,762		325,519,626		325,954,388
Securities at amortized cost		9,805,763		15,333,482		3,042		25,142,287
Other financial assets2		—		—		15,063,899		15,063,899
	W	12,486,361	W	31,370,698	W	344,825,344	W	388,682,403
Financial liabilities
Deposits1	W	—	W	132,592,867	W	156,609,090	W	289,201,957
Debts3		—		992,130		29,295,097		30,287,227
Debentures		—		46,797,524		4,788,071		51,585,595
Other financial liabilities2		—		—		27,606,932		27,606,932
	W	—	W	180,382,521	W	218,299,190	W	398,681,711

¹ The amounts included in Level 2 are the carrying amounts which are reasonable approximations of the fair values.

² Other financial assets and financial liabilities included in Level 3 are the carrying amounts which are reasonable approximation of fair values as of June 30, 2019.

³ Debts ofW 2,195 million included in Level 2 is the carrying amounts which are reasonable approximation of fair values as of June 30, 2019.

44

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	Fair value hierarchy
	Level 1		Level 2		Level 3		Total
Financial assets
Cash and due from financial institutions1	W	3,338,863	W	14,632,352	W	2,300,046	W	20,271,261
Loans at amortized cost		—		493,773		319,510,071		320,003,844
Securities at amortized cost		8,629,708		15,529,429		—		24,159,137
Other financial assets2		—		—		8,133,556		8,133,556
	W	11,968,571	W	30,655,554	W	329,943,673	W	372,567,798
Financial liabilities
Deposits1	W	—	W	127,265,703	W	150,157,491	W	277,423,194
Debts3		—		1,114,900		31,913,305		33,028,205
Debentures		—		48,680,196		5,091,368		53,771,564
Other financial liabilities4		—		—		19,833,885		19,833,885
	W	—	W	177,060,799	W	206,996,049	W	384,056,848

¹ The amounts included in Level 2 are the carrying amounts which are reasonable approximations of the fair values.

² Other financial assets ofW 8,133,556 million included in Level 3 are the carrying amounts which are reasonable approximation of fair values as of December 31, 2018.

³ Debts ofW 38,403 million included in Level 2 is the carrying amounts which are reasonable approximation of fair values as of December 31, 2018.

⁴ Other financial liabilities ofW 19,250,252 million included in Level 3 is the carrying amounts which are reasonable approximations of fair values as of December 31, 2018.

45

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Valuation techniques and the inputs used in the fair value measurement

Financial assets and liabilities whose carrying amount is a reasonable approximation of fair value are not subject to disclose valuation techniques and inputs.

Valuation techniques and inputs of financial assets and liabilities whose fair values are disclosed and classified as Level 2 as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Fair value		Valuation technique		Inputs
Financial assets
Loans at amortized cost	W	434,762		DCF Model		Discount rate
Securities at amortized cost		15,333,482		DCF Model, Monte Carlo Simulation		Discount rate, Interest rate
Financial liabilities
Debts		989,935		DCF Model		Discount rate
Debentures		46,797,524		DCF Model		Discount rate

(In millions of Korean won)	December 31, 2018
	Fair value		Valuation technique		Inputs
Financial assets
Loans at amortized cost	W	493,773		DCF Model		Discount rate
Securities at amortized cost		15,529,429		DCF Model		Discount rate
Financial liabilities
Debts		1,076,497		DCF Model		Discount rate
Debentures		48,680,196		DCF Model		Discount rate

46

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Valuation techniques and inputs of financial assets and liabilities whose fair values are disclosed and classified as Level 3 as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)
	June 30, 2019
	Fair value		Valuation technique		Inputs
Financial assets
Cash and due from financial institutions	W	4,238,777		DCF Model	Credit spread, Other spread, Interest rates
Loans at amortized cost		325,519,626		DCF Model	Credit spread, Other spread, Early termination ratio, Interest rates
Securities at amortized cost		3,042		DCF Model	Interest rates
	W	329,761,445
Financial liabilities
Deposits	W	156,609,090		DCF Model	Other spread, Interest rates, Early termination ratio
Debts		29,295,097		DCF Model	Other spread, Interest rates
Debentures		4,788,071		DCF Model	Other spread, Interest rates
	W	190,692,258

(In millions of Korean won)
	December 31, 2018
	Fair value		Valuation technique		Inputs
Financial assets
Cash and due from financial institutions	W	2,300,046		DCF Model	Credit spread, Other spread, Interest rates
Loans at amortized cost		319,510,071		DCF Model	Credit spread, Other spread, Early termination ratio, Interest rates
	W	321,810,117
Financial liabilities
Deposits	W	150,157,491		DCF Model	Other spread, Interest rates, Early termination ratio
Debts		31,913,305		DCF Model	Other spread, Interest rates
Debentures		5,091,368		DCF Model	Other spread, Interest rates
Other financial liabilities		583,633		DCF Model	Other spread, Interest rates
	W	187,745,797

47

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

6.2 Level 3 of the Fair Value Hierarchy Disclosure

6.2.1 Valuation policy and process for fair value measurement categorized within Level 3

The Group uses external, independent and qualified professional valuer’s valuation to determine the fair value of the Group’s assets at the end of every reporting period.

Where a reclassification between the levels of the fair value hierarchy occurs for a financial asset or liability, the Group’s policy is to recognize such transfers as having occurred at the beginning of the reporting period.

48

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

6.2.2 Changes in fair value (Level 3) measured using valuation technique based on unobservable in market

Details of changes in Level 3 of the fair value hierarchy for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
	Financial assets at fair value through profit or loss								Financial investments			Financial liabilities at fair value through profit or loss			Net derivatives financial instruments
	Cash and due from financial institutions at fair value through profit or loss		Securities measured at fair value through profit or loss			Loans at fair value through profit or loss			Financial assets measured at fair value through other comprehensive income			Financial liabilities designated at fair value through profit or loss			Derivatives held for trading			Derivatives held for fair value hedging
Beginning	W	48,743	W	7,464,860		W	213,203		W	1,332,718		W	(10,873,383	)	W	(300,131	)	W	—
Total gains or losses
- Profit or loss		1,183		107,980			5,860			—			(1,040,285	)		551,575			—
- Other comprehensive income		1,334		63,113			—			52,664			(35,826	)		—			—
Purchases		—		1,797,516			154,005			140			—			—			—
Sales		—		(738,102	)		(62,200	)		(795	)		—			(117,438	)		—
Issues		—		—			—			—			(6,766,734	)		(36,832	)		—
Settlements		—		—			—			—			6,136,646			(1,933	)		—
Transfers into Level 31		—		181			—			—			—			—			—
Transfers out of Level 31		—		(83,730	)		—			—			—			—			—
Ending	W	51,260	W	8,611,818		W	310,868		W	1,384,727		W	(12,579,582	)	W	95,241		W	—

¹  The Changes in levels for the financial instruments occurred due to the change in the availability of observable market data.

49

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	2018
	Financial assets at fair value through profit or loss								Financial investments			Financial liabilities at fair value through profit or loss			Net derivative financial instruments
	Cash and due from financial institutions at fair value through profit or loss		Securities measured at fair value through profit or loss			Loans at fair value through profit or loss			Financial assets measured at fair value through other comprehensive income			Financial liabilities designated at fair value through profit or loss			Derivatives held for trading			Derivatives held for fair value hedging
Beginning2	W	48,243	W	6,106,716		W	133,309		W	1,187,218		W	(8,687,892	)	W	96,354		W	705
Total gains or losses
- Profit or loss		828		163,701			1,257			—			(64,426	)		(100,684	)		(116	)
- Other comprehensive income		29		17,524			—			9,192			3,329			—			—
Purchases		—		1,895,607			59,600			53,333			—			11,075			—
Sales		—		(1,290,362	)		(53,637	)		(40,480	)		—			(88,306	)		—
Issues		—		—			—			—			(6,311,321	)		(37,674	)		—
Settlements		—		—			—			—			5,284,419			74			(589	)
Transfers into Level 31		—		—			—			—			—			(3,012	)		—
Transfers out of Level 31		—		(9,258	)		—			—			—			—			—
Ending	W	49,100	W	6,883,928		W	140,529		W	1,209,263		W	(9,775,891	)	W	(122,173	)	W	—

¹  The Changes in levels for the financial instruments occurred due to the change in the availability of observable market data.

²  Restated based on Korean IFRS 1109.

50

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

In relation to changes in Level 3 of the fair value hierarchy, total gains or losses recognized in profit or loss for the period, and total gains or losses for the period included in profit or loss for financial instruments held at the end of the reporting period in the statements of comprehensive income for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019								2018
	Gains (losses) from financial instruments at fair value through profit or loss			Other operating incomes (losses)		Net interest income			Gains (losses) from financial instruments at fair value through profit or loss			Other operating incomes (losses)		Net interest income
Total gains or losses included in profit or loss for the period	W	(376,123	)	W	2,414	W	22		W	(989	)	W	1,298	W	251
Total gains or losses for the period included in profit or loss for financial instruments held at the end of the reporting period		(174,330	)		1,922		(54	)		57,621			1,414		251

51

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

6.2.3 Sensitivity analysis of changes in unobservable inputs

Information about fair value measurements using unobservable inputs as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Fair value		Valuation technique	Unobservable inputs	Range of unobservable inputs(%)	Relationship of unobservable inputs to fair value
Financial assets
Financial assets at fair value through profit or loss
Cash and due from financial institutions	W	51,260	DCF Model, Option Model, Net Asset Value, Income approach, Market approach	Volatility of the underlying asset	5.32~47.23	The higher the volatility, the higher the fair value fluctuation
				Correlation	1.52~97.92	The higher the correlation, the higher the fair value fluctuation
				Recovery rate	40.00	The higher the recovery rate, the higher the fair value
				Discount rate	0.78~10.79	The lower the discount rate, the higher the fair value
				Growth rate	0.00~2.20	The higher the growth rate, the higher the fair value
Debt securities		8,216,816	DCF Model, Closed Form, FDM, Monte Carlo Simulation, Hull-White Model, Black-Scholes Model, Option Model, Tree Model, Net Asset Value, Income approach, Market approach and others	Growth rate	0.00~2.20	The higher the growth rate, the higher the fair value
				Volatility of the underlying asset	3.10~39.94	The higher the volatility, the higher the fair value fluctuation
				Discount rate	0.78~53.75	The lower the discount rate, the higher the fair value
				Recovery rate	40.00	The higher the recovery rate, the higher the fair value
				Correlation between underlying asset	1.52~97.92	The higher the correlation, the higher the fair value fluctuation
				Liquidation value	0.00	The higher the liquidation value, the higher the fair value
				Fluctuation rate of real estate sale price	-1.00~1.00	The higher the sale price, the higher the fair value

52

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Equity securities	395,002	Income approach, Market approach, Asset value approach, DCF Model, Comparable Company Analysis, Adjusted discount rate method, Dividend Discount Model, Usage of past transactions, Tree Model and others	Growth rate	0.00~2.20	The higher the growth rate, the higher the fair value
			Discount rate	0.78~21.96	The lower the discount rate, the higher the fair value
			Liquidation value	-1.00~1.00	The higher the liquidation value, the higher the fair value
			Volatility	5.32~47.23	The higher the volatility, the higher the fair value fluctuation
			Correlation	1.52~97.92	The higher the correlation, the higher the fair value fluctuation
			Recovery rate	40.00	The higher the recovery rate, the higher the fair value
Loans	310,868	Tree Model, DCF Model	Volatility of the stock price	14.06~35.45	The higher the volatility, the higher the fair value fluctuation
			Discount rate	10.85	The lower the discount rate, the higher the fair value
Derivatives held for trading
Stock and index	114,799	DCF Model, Closed Form, FDM, Monte Carlo Simulation, Hull and White Model, Black-Scholes Model, Tree Model	Volatility of the underlying asset	9.75~59.00	The higher the volatility, the higher the fair value fluctuation
			Correlation between underlying asset	13.46~70.96	The higher the correlation, the higher the fair value fluctuation
Currency, interest rate and others	104,966	DCF Model, Hull and White Model	Volatility	2.00~49.00	The higher the volatility, the higher the fair value fluctuation
			Correlation between underlying asset	-49.00~89.93	The higher the absolute value of correlation, the higher the fair value fluctuation

53

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Financial assets measured at fair value through other comprehensive income
Equity securities		1,384,727	Adjusted discount rate method, IMV Model, DCF Model, Comparable Company Analysis, Dividend discount model, Option Model, Net asset value method, Market approach, One Factor Hull-White Model and others	Growth rate	0.00~2.20	The higher the growth rate, the higher the fair value
				Discount rate	3.21~16.57	The lower the discount rate, the higher the fair value
				Volatility	17.85~27.20	The higher the volatility, the higher the fair value fluctuation
	W	10,578,438

54

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Financial liabilities
Financial liabilities designated at fair value through profit or loss
Derivative-linked securities	W	12,579,582	DCF Model, Closed Form, FDM, Monte Carlo Simulation, Hull and White Model, Black Scholes-Model	Volatility of the underlying asset	1.00~75.00	The higher the volatility, the higher the fair value fluctuation
				Correlation between underlying asset	-49.00~89.93	The higher the absolute value of correlation, the higher the fair value fluctuation
Derivatives held for trading
Stock and index		38,640	DCF Model, Closed Form, FDM, Monte Carlo Simulation, Hull and White Model, Black-Scholes Model, Tree Model	Volatility	13.00~59.00	The higher the volatility, the higher the fair value fluctuation
				Correlation between underlying asset	4.34~70.96	The higher the correlation, the higher the fair value fluctuation
Others		85,884	Monte Carlo Simulation, Hull and White Model, DCF Model, Closed form formula	Volatility	2.00~75.00	The higher the volatility, the higher the fair value fluctuation
				Volatility of the stock price	20.43	The higher the volatility, the higher the fair value fluctuation
				Volatility of the interest rate	0.65	The higher the volatility, the higher the fair value fluctuation
				Discount rate	2.14~2.31	The lower the discount rate, the higher the fair value
				Correlation between underlying asset	-48.62~89.93	The higher the absolute value of correlation, the higher the fair value fluctuation
	W	12,704,106

55

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	Fair value		Valuation technique	Unobservable inputs	Range of unobservable inputs(%)		Relationship of unobservable inputs to fair value
Financial assets
Financial assets at fair value through profit or loss
Cash and due from financial institutions		W     48,743	DCF Model, Option Model, Net Asset Value, Income approach, Market approach	Volatility of the underlying asset		11.25~31.28	The higher the volatility, the higher the fair value fluctuation
				Correlation		8.79~79.78	The higher the correlation, the higher the fair value fluctuation
				Recovery rate		40.00	The higher the recovery rate, the higher the fair value
				Discount rate		1.19~11.30	The lower the discount rate, the higher the fair value
				Growth rate		0.29~2.20	The higher the growth rate, the higher the fair value
Debt securities		7,093,315	DCF Model, Closed Form, FDM, Monte Carlo Simulation, Hull-White Model, Black-Scholes Model, Option Model, Tree Model, Net Asset Value, Income approach, Market approach and others	Growth rate		0.29~2.20	The higher the growth rate, the higher the fair value
				Fluctuation rate of real estate sale price		11.25~41.00	The higher the sale price, the higher the fair value
				Volatility of real estate price		-1.00~1.00	The higher the price of real estate, the higher the fair value
				Discount rate		1.95~11.30	The lower the discount rate, the higher the fair value
				Recovery rate		40.00	The higher the recovery rate, the higher the fair value
				Correlation between underlying asset		8.79~88.46	The higher the correlation, the higher the fair value fluctuation
Equity securities		371,545	Income approach, Market approach, Asset value approach, DCF Model, Comparable Company Analysis, Adjusted discount rate method, Dividend Discount Model, Usage of past transactions, Tree Model and others	Growth rate		0~2.20	The higher the growth rate, the higher the fair value
				Discount rate		1.19~21.96	The lower the discount rate, the higher the fair value
				Liquidation value		-1.00~1.00	The higher the liquidation value, the higher the fair value
				Volatility		11.25~39.94	The higher the volatility, the higher the fair value fluctuation
				Correlation		8.79~79.78	The higher the correlation, the higher the fair value fluctuation
				Recovery rate		40	The higher the recovery rate, the higher the fair value

56

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Loans		213,203	Tree Model	Stock price, Volatility of the stock price	13.11~49.28	The higher the volatility, the higher the fair value fluctuation
Derivatives held for trading
Stock and index		50,824	DCF Model, Closed Form, FDM, Monte Carlo Simulation, Hull and White Model, Black-Scholes Model, Tree Model	Volatility of the underlying asset	14.00~50.00	The higher the volatility, the higher the fair value fluctuation
				Correlation between underlying asset	8.74~68.77	The higher the correlation, the higher the fair value fluctuation
Currency, interest rate and others		60,239	DCF Model, Hull and White Model, Monte Carlo Simulation, Tree Model	Loss given default	100.00	The higher the loss given default, the lower the fair value
				Volatility	1.00~36.00	The higher the volatility, the higher the fair value fluctuation
				Correlation between underlying asset	-46.89~90.11	The higher the absolute value of correlation, the higher the fair value fluctuation
Financial assets measured at fair value through other comprehensive income
Equity securities		1,332,718	Adjusted discount rate method, IMV Model, DCF Model, Comparable Company Analysis, Dividend discount model, Option Model, Net asset value method, Market approach, One Factor Hull-White Model and others	Growth rate	0~2.20	The higher the growth rate, the higher the fair value
				Discount rate	7.05~16.30	The lower the discount rate, the higher the fair value
				Volatility	17.62~25.14	The higher the volatility, the higher the fair value fluctuation
	W	9,170,587

57

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Financial liabilities
Financial liabilities designated at fair value through profit or loss
Derivative-linked securities	W	10,873,383	DCF Model, Closed Form, FDM, Monte Carlo Simulation, Hull and White Model, Black Scholes-Model	Volatility of the underlying asset	1.00~115.00	The higher the volatility, the higher the fair value fluctuation
				Correlation between underlying asset	-49.00~90.11	The higher the absolute value of correlation, the higher the fair value fluctuation
Derivatives held for trading
Stock and index		240,817	DCF Model, Closed Form, FDM, Monte Carlo Simulation, Hull and White Model, Black-Scholes Model, Tree Model	Volatility	2.00~54.00	The higher the volatility, the higher the fair value fluctuation
				Correlation between underlying asset	4.27~70.17	The higher the correlation, the higher the fair value fluctuation
Others		170,377	Monte Carlo Simulation, Hull and White Model, DCF Model, Closed form formula	Volatility	1.00~115.00	The higher the volatility, the higher the fair value fluctuation
				Volatility of the stock price	20.85	The higher the volatility, the higher the fair value fluctuation
				Volatility of the interest rate	0.69	The higher the volatility, the higher the fair value fluctuation
				Discount rate	2.19~2.26	The lower the discount rate, the higher the fair value
				Correlation between underlying asset	-49.00~90.11	The higher the absolute value of correlation, the higher the fair value fluctuation
	W	11,284,577

58

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Sensitivity analysis of changes in unobservable inputs

Sensitivity analysis of financial instruments is performed to measure favorable and unfavorable changes in the fair value of financial instruments which are affected by the unobservable parameters, using a statistical technique. When the fair value is affected by more than two input parameters, the amounts represent the most favorable or most unfavorable Level 3 financial instruments subject to sensitivity analysis are (i) equity-related derivatives, currency-related derivatives and interest rate related derivatives whose fair value changes are recognized in profit or loss, (ii) financial liabilities designated at fair value through profit or loss, and (iii) due from financial institutions, debt securities, equity securities and loan receivables whose fair value changes are recognized in profit or loss or other comprehensive income. If overlay approach is applied in accordance with Korean IFRS 1104, changes in fair value of financial assets at fair value through profit or loss are recognized as other comprehensive income.

The results of the sensitivity analysis from changes in inputs are as follows:

(In millions of Korean won)	June 30, 2019
	Recognition in profit or loss					Other comprehensive income
	Favorable changes		Unfavorable changes			Favorable changes		Unfavorable changes
Financial assets
Financial assets at fair value through profit or loss1
Due from financial institutions	W	2	W	(2	)	W	15	W	(15	)
Debt securities4		15,831		(14,811	)		1,923		(1,895	)
Equity securities3		13,933		(5,905	)		945		(730	)
Loans		8,344		(5,907	)		—		—
Derivatives held for trading2		45,224		(48,845	)		—		—
Financial assets measured at fair value through other comprehensive income
Equity securities3		—		—			210,160		(107,619	)
	W	83,334	W	(75,470	)	W	213,043	W	(110,259	)
Financial liabilities
Financial liabilities designated at fair value through profit or loss1	W	90,629	W	(85,615	)	W	—	W	—
Derivatives held for trading2		31,651		(29,973	)		—		—
	W	122,280	W	(115,588	)	W	—	W	—

59

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	Recognition in profit or loss					Other comprehensive income
	Favorable changes		Unfavorable changes			Favorable changes		Unfavorable changes
Financial assets
Financial assets at fair value through profit or loss1
Due from financial institutions	W	4	W	(2	)	W	32	W	(47	)
Debt securities4		20,261		(17,885	)		2,183		(2,097	)
Equity securities3		14,241		(10,162	)		848		(656	)
Loans		129		(46	)		—		—
Derivatives held for trading2		27,639		(26,155	)		—		—
Financial assets measured at fair value through other comprehensive income
Equity securities3		—		—			162,563		(86,094	)
	W	62,274	W	(54,250	)	W	165,626	W	(88,894	)
Financial liabilities
Financial liabilities designated at fair value through profit or loss1	W	146,135	W	(157,361	)	W	—	W	—
Derivatives held for trading2		112,827		(105,875	)		—		—
	W	258,962	W	(263,236	)	W	—	W	—

¹  For financial instruments at fair value through profit or loss, the changes in fair value are calculated by shifting principal unobservable input parameters such as volatility of the underlying asset or correlation between underlying asset by ± 10%.

²  For derivatives financial instruments, the changes in fair value are calculated by shifting principal unobservable input parameters; such as, price of underlying asset, volatility of stock price, interest rate by ± 10% and the loss given default ratio, discount rate by ± 1%

³  For equity securities, the changes in fair value are calculated by shifting principal unobservable input parameters; such as, correlation between growth rate (0~2.2%) and discount rate, or liquidation value(-1~1%) and discount rate.

⁴  Sensitivity of fair values to unobservable parameters of private equity fund is practically impossible, but in the case of equity fund composed of real estates, the changes in fair value are calculated by shifting correlation between discount rate(-1~1%) and volatilities of real estate price(-1~1%).

60

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

6.2.4 Day one gain or loss

If the Group uses a valuation technique that incorporates data not obtained from observable markets for the fair value at initial recognition of financial instruments, there could be a difference between the transaction price and the amount determined using that valuation technique. In these circumstances, the fair value of financial instruments is recognized as the transaction price, and the difference is deferred and not recognized in profit or loss, and is amortized by using the straight-line method over the life of the financial instrument. When the fair value of the financial instruments is subsequently determined using observable market inputs, the remaining deferred amount is recognized in profit or loss.

The aggregate difference yet to be recognized in profit or loss at the beginning and end of the period and a reconciliation of changes in the balance of this difference for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019			2018
Balance at the beginning of the period	W	62,155		W	22,814
New transactions and others		88,238			73,924
Changes during the period		(85,699	)		(48,686	)
Balance at the end of the period	W	64,694		W	48,052

6.3 Carrying Amounts of Financial Instruments by Category

Financial assets and liabilities are measured at fair value or amortized cost.

The carrying amounts of financial assets and liabilities by category as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
			Financial instruments measured at fair value through other comprehensive income
	Financial instruments at fair value through profit or loss		Financial assets measured at fair value through other comprehensive income		Financial instruments designated at fair value through other comprehensive income		Financial instruments at amortized cost		Derivatives held for hedging		Total
Financial assets
Cash and due from financial institutions	W	—	W	—	W	—	W	22,521,290	W	—	W	22,521,290
Financial assets at fair value through profit or loss		48,711,872		—		—		—		—		48,711,872
Derivatives		2,751,793		—		—		—		139,725		2,891,518
Loans at amortized cost		—		—		—		324,900,461		—		324,900,461
Financial investments		—		38,068,203		2,388,688		23,833,824		—		64,290,715
Other financial assets		—		—		—		15,063,899		—		15,063,899
	W	51,463,665	W	38,068,203	W	2,388,688	W	386,319,474	W	139,725	W	478,379,755

61

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	June 30, 2019
	Financial instruments at fair value through profit or loss
	Financial instruments at fair value through profit or loss		Financial instruments designated at fair value through profit or loss		Financial instruments at amortized cost		Derivatives held for hedging		Total
Financial liabilities
Financial liabilities at fair value through profit or loss	W	3,151,727	W	14,130,913	W	—	W	—	W	17,282,640
Derivatives		3,053,623		—		—		203,582		3,257,205
Deposits		—		—		288,423,297		—		288,423,297
Debts		—		—		30,219,021		—		30,219,021
Debentures		—		—		50,851,003		—		50,851,003
Other financial liabilities		—		—		27,606,932		—		27,606,932
	W	6,205,350	W	14,130,913	W	397,100,253	W	203,582	W	417,640,098

(In millions of Korean won)	December 31, 2018
	Financial instruments measured at fair value through other comprehensive income
	Financial instruments at fair value through profit or loss		Financial assets measured at fair value through other comprehensive income		Financial instruments designated at fair value through other comprehensive income		Financial instruments at amortized cost		Derivatives held for hedging		Total
Financial assets
Cash and due from financial institutions	W	—	W	—	W	—	W	20,274,490	W	—	W	20,274,490
Financial assets at fair value through profit or loss		50,987,847		—		—		—		—		50,987,847
Derivatives		1,915,532		—		—		—		110,430		2,025,962
Loans at amortized cost		—		—		—		319,201,603		—		319,201,603
Financial investments		—		35,633,456		2,370,116		23,661,522		—		61,665,094
Other financial assets		—		—		—		8,133,556		—		8,133,556
	W	52,903,379	W	35,633,456	W	2,370,116	W	371,271,171	W	110,430	W	462,288,552

62

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	Financial instruments at fair value through profit or loss
	Financial instruments at fair value through profit or loss		Financial instruments designated at fair value through profit or loss		Financial instruments at amortized cost		Derivatives held for hedging		Total
Financial liabilities
Financial liabilities at fair value through profit or loss	W	2,823,820	W	12,503,039	W	—	W	—	W	15,326,859
Derivatives		2,724,994		—		—		176,253		2,901,247
Deposits		—		—		276,770,449		—		276,770,449
Debts		—		—		33,004,834		—		33,004,834
Debentures		—		—		53,278,697		—		53,278,697
Other financial liabilities		—		—		19,828,307		—		19,828,307
	W	5,548,814	W	12,503,039	W	382,882,287	W	176,253	W	401,110,393

7. Due from Financial Institutions at amortized cost

Details of due from financial institutions as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)		Financial institutions	Interest rate(%)		June 30, 2019		December 31, 2018
Due from financial institutions in Korean won	Due from Bank of Korea	Bank of Korea		—	W	9,759,315	W	8,723,761
	Due from banking institutions	Standard Chartered Bank Korea Limited and others		0.00 ~ 2.75		4,801,493		3,245,841
	Due from others	Korea Securities Finance Corporation and others		—		676,436		1,132,908
						15,237,244		13,102,510
Due from financial institutions in foreign currencies	Due from banking institutions in foreign currencies	Bank of Korea and others		—		2,368,216		1,734,660
	Time deposits in foreign currencies	PING AN BANK, BEIJING BRANCH and others		0.00 ~ 7.55		1,070,234		1,001,600
	Due from others	SOCIETE GENERALE and others		—		1,417,272		1,379,537
						4,855,722		4,115,797
					W	20,092,966	W	17,218,307

¹  Before netting of allowance.

63

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Restricted cash from financial institutions as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)		Financial Institutions	June 30, 2019		December 31, 2018		Reason for restriction
Due from financial institutions in Korean won	Due from Bank of Korea	Bank of Korea	W	9,759,315	W	8,723,761	Bank of Korea Act
	Due from banking institutions	Shinhan Bank and others		2,642,247		1,348,099	Net settlement and others
	Due from others	Korea Securities Finance Corporation and others		540,776		655,194	Derivatives margin account and others
				12,942,338		10,727,054
Due from financial institutions in foreign currencies	Due from banking institutions in foreign currencies	Bank of Korea and others		627,313		375,130	Bank of Korea Act and others
	Time deposits in foreign currencies	Bank of Communications NY Branch and others		31,581		30,538	Bank Act of the State of New York and others
	Due from others	Societe Generale and others		1,256,162		1,214,905	Derivatives margin account and others
				1,915,056		1,620,573
			W	14,857,394	W	12,347,627

¹  Before netting of allowance.

Changes in the allowances for due from financial institutions losses

Changes in the allowances for due from financial institutions losses for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses
			Non-impaired		Impaired
Beginning	W	2,019	W	—	W	—
Transfer between stages
Transfer to12-month expected credit losses		—		—		—
Transfer to lifetime expected credit losses		—		—		—
Impairment		—		—		—
Disposal		—		—		—
Provision (reversal) for credit losses		95		—		—
Others		50		—		—
Ending	W	2,164	W	—	W	—

64

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	2018
	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses
			Non-impaired		Impaired
Beginning1	W	1,797	W	—	W	—
Transfer between stages
Transfer to12-month expected credit losses		—		—		—
Transfer to lifetime expected credit losses		—		—		—
Impairment		—		—		—
Disposal		—		—		—
Provision (reversal) for loan losses		24		—		—
Others		49		—		—
Ending	W	1,870	W	—	W	—

¹  Restated based on Korean IFRS 1109.

8. Derivative Financial Instruments and Hedge Accounting

The Group’s derivative operations focus on addressing the needs of the Group’s corporate clients to hedge their risk exposure and to hedge the Group’s risk exposure that results from such client contracts. The Group also engages in derivative trading activities to hedge the interest rate and foreign currency risk exposures that arise from the Group’s own assets and liabilities. In addition, the Group engages in proprietary trading of derivatives within the Group’s regulated open position limits.

The Group provides and trades a range of derivatives products, including:

• Interest rate swaps, relating to interest rate risks in Korean won

• Cross-currency swaps, forwards and options relating to foreign exchange rate risks,

• Stock price index options linked with the KOSPI index.

In particular, the Group applies fair value hedge accounting using cross currency swaps, interest rate swaps and others to hedge the risk of changes in fair values due to the changes in interest rates and foreign exchange rates of structured debts in Korean won, financial debentures in foreign currencies, structured deposits in Korean won, and structured deposits in foreign currencies. In addition, the Group applies net investment hedge accounting by designating financial debentures in foreign currencies as hedging instruments to hedge foreign exchange risks on net investments in foreign operations.

65

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Details of derivative financial instruments held for trading as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019						December 31, 2018
	Notional amount		Assets		Liabilities		Notional amount		Assets		Liabilities
Interest rate
Forwards	W	801,360	W	—	W	93,134	W	570,000	W	—	W	55,056
Futures1		5,210,634		712		1,827		4,269,407		1,124		3,852
Swaps		238,995,089		513,975		593,658		219,558,592		421,591		471,915
Options		18,088,136		257,576		371,819		16,937,362		159,218		276,392
		263,095,219		772,263		1,060,438		241,335,361		581,933		807,215
Currency
Forwards		81,064,618		1,052,582		894,339		74,189,998		622,745		548,127
Futures1		544,275		23		921		602,805		37		240
Swaps		42,061,759		580,265		644,797		36,073,995		470,499		452,390
Options		3,543,959		11,104		20,547		2,449,469		6,071		13,602
		127,214,611		1,643,974		1,560,604		113,316,267		1,099,352		1,014,359
Stock and index
Futures1		1,045,467		6,211		5,898		1,155,861		4,902		10,820
Swaps		8,743,699		147,679		117,404		8,190,648		82,803		321,135
Options		5,878,292		62,102		231,356		5,442,775		70,740		464,226
		15,667,458		215,992		354,658		14,789,284		158,445		796,181
Credit
Swaps		4,329,031		22,044		16,016		4,300,208		32,711		25,047
		4,329,031		22,044		16,016		4,300,208		32,711		25,047
Commodity
Futures1		9,564		166		5		5,807		150		128
Swaps		121,951		2,403		327		140,382		2,202		3,199
		131,515		2,569		332		146,189		2,352		3,327
Other		3,285,874		94,951		61,575		2,361,827		40,739		78,865
	W	413,723,708	W	2,751,793	W	3,053,623	W	376,249,136	W	1,915,532	W	2,724,994

¹  Gains or losses arising from dailymark-to-market futures are reflected in the margin accounts.

66

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

The average of hedge ratio for each type of hedge accounting as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	1 year		2 years		3 years		4 years		5 years		More than 5 years		Total
Fair value hedge
The quantity of the hedging instrument		1,228,463		1,672,324		1,153,244		447,659		331,435		2,110,918		6,944,043
Average ratio of hedging (%)		100.00		99.31		106.21		87.89		98.25		98.63		99.58
Cash flow hedge
The quantity of the hedging instrument		2,352,125		1,318,406		1,733,903		523,086		334,112		—		6,261,632
Average ratio of hedging (%)		100.00		100.00		100.00		100.00		100.00		—		100.00
Hedge of net investments in a foreign operations
The quantity of the hedging instrument		356,309		—		149,516		61,810		—		—		567,635
Average ratio of hedging (%)		100.00		—		100.00		100.00		—		—		100.00
(In millions of Korean won)	December 31, 2018
	1 year		2 years		3 years		4 years		5 years		More than 5 years		Total
Fair value hedge
The quantity of the hedging instrument		1,371,901		728,308		1,372,040		567,030		195,392		1,308,602		5,543,273
Average ratio of hedging (%)		100.73		98.65		100.00		100.00		100.00		100.00		100.00
Cash flow hedge
The quantity of the hedging instrument		2,641,861		1,403,129		902,911		919,258		525,629		50,000		6,442,788
Average ratio of hedging (%)		100.00		100.00		100.00		100.00		100.00		100.00		100.00
Hedge of net investments in a foreign operations
The quantity of the hedging instrument		528,025		2,942		—		—		—		—		530,967
Average ratio of hedging (%)		100.00		100.00		—		—		—		—		100.00

67

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Fair Value Hedge

Details of derivative instruments designated as fair value hedge as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)		June 30, 2019
		Carrying amount				Accumulated adjusted amount						Changes in the fair value
		Assets		Liabilities		Assets			Liabilities
Hedge accounting
Interest rate	Debt securities in KRW	W	470,200	W	—	W	4,140		W	—		W	4,160
	Debt securities in foreign currencies		1,274,882		—		18,048			—			26,187
	Deposits in foreign currencies		—		895,316		—			(30,124	)		(59,141	)
	Debts in KRW		—		352,128		—			22,128			(2,876	)
	Debts in foreign currencies		—		2,059,381		—			34,981			(59,054	)
			1,745,082		3,306,825		22,188			26,985			(90,724	)
Currency	Debt securities in foreign currencies		2,043,254		—		(5,058	)		—			69,170
			2,043,254		—		(5,058	)		—			69,170
		W	3,788,336	W	3,306,825	W	17,130		W	26,985		W	(21,554	)

68

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)		December 31, 2018
		Carrying amount				Accumulated adjusted amount						Changes in the fair value1
		Assets		Liabilities		Assets			Liabilities
Hedge accounting
Interest rate	Debt securities in KRW	W	465,213	W	—	W	1,214		W	—		W	1,157
	Debt securities in foreign currencies		702,727		—		(9,790	)		—			(9,099	)
	Deposits in foreign currencies		—		805,215		—			(89,265	)		63,441
	Debts in KRW		—		349,252		—			19,252			379
	Debts in foreign currencies		—		1,429,457		—			(24,073	)		12,878
			1,167,940		2,583,924		(8,576	)		(94,086	)		68,756
Currency	Debt securities in foreign currencies		1,845,253		—		(75,255	)		—			112,551
			1,845,253		—		(75,255	)		—			112,551
		W	3,013,193	W	2,583,924	W	(83,831	)	W	(94,086	)	W	181,307

¹ Fairvalue changes in the six-month period ended June 30, 2018

Details of derivative instruments designated as fair value hedge as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Notional amount		Assets		Liabilities		Changes in the fair value
Interest rate
Swaps	W	4,989,543	W	119,250	W	43,432	W	97,718
Currency
Forwards		1,830,061		3,540		47,518		(67,389	)
	W	6,819,604	W	122,790	W	90,950	W	30,329
(In millions of Korean won)	December 31, 2018
	Notional amount		Assets		Liabilities		Changes in the fair value1
Interest rate
Swaps	W	3,845,555	W	58,933	W	88,017	W	(68,491	)
Currency
Forwards		1,697,718		5,923		32,565		(108,432	)
	W	5,543,273	W	64,856	W	120,582	W	(176,923	)

¹ Fairvalue changes in thesix-month periods ended June 30, 2018

69

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Details of hedge ineffectiveness recognized in profit or loss from derivatives for thesix-month period ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	Hedge ineffectiveness recognized in profit or loss
	2019		2018
From hedge accounting
Interest rate	W	6,993	W	265
Currency rate		1,781		4,119
	W	8,774	W	4,384

Gains and losses from fair value hedging instruments and hedged items attributable to the hedged risk for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019			2018
Gains (losses) on hedging instruments	W	22,464		W	(180,716	)
Gains (losses) on the hedged items attributable to the hedged risk		(21,441	)		182,551
	W	1,023		W	1,835

Cash Flow Hedge

Details of hedged item in cash flow hedge as of June 30, 2019 and December 31, 2018 are as follows:

(In millions of Korean won)	June 30, 2019
	Changes in fair value			Other comprehensive income for cash flow hedge
Hedge accounting
Interest rate risk	W	33,751		W	(19,332	)
Foreign currency change risk		52,519			(13,177	)
	W	86,270		W	(32,509	)
(In millions of Korean won)	December 31, 2018
	Changes in fair value			Other comprehensive income for cash flow hedge
Hedge accounting
Interest rate risk	W	(12,164	)	W	4,686
Foreign currency change risk		45,487			1,163
	W	33,323		W	5,849

70

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Details of derivative instruments designated as cash flow hedge as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Notional amount		Assets		Liabilities		Changes in fair value
Interest rate
Swaps	W	3,517,120	W	423	W	29,914	W	(31,419	)
Currency
Swaps		2,744,512		15,129		78,040		(51,942	)
	W	6,261,632	W	15,552	W	107,954	W	(83,361	)
(In millions of Korean won)	December 31, 2018
	Notional amount		Assets		Liabilities		Changes in fair value1
Interest rate
Swaps	W	4,142,336	W	17,891	W	12,766	W	12,111
Currency
Swaps		2,300,452		22,759		40,493		(45,912	)
	W	6,442,788	W	40,650	W	53,259	W	(33,801	)

¹ Fairvalue changes in the six-month period ended June 30, 2018

Gains and losses from cash flow hedging instruments and hedged items attributable to the hedged risk for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019			2018
Gains (losses) on hedging instruments	W	(83,361	)	W	(36,097	)
Gains (losses) on effectiveness (amount recognized in other comprehensive income)		(83,665	)		(33,690	)
Gains (losses) on ineffectiveness (amount recognized in profit or loss)	W	304		W	(2,407	)

Amounts recognized in other comprehensive income and reclassified from equity to profit or loss for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019			2018
Amount recognized in other comprehensive income	W	(83,665	)	W	(33,690	)
Amount reclassified from equity to profit or loss		31,735			50,158
Tax effect		13,572			(7,080	)
Amount recognized in other comprehensive income net of tax	W	(38,358	)	W	9,388

71

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Hedge on Net Investments in Foreign Operations

Details of derivative instruments designated as foreign operations net investments hedge as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Changes in fair value		Other comprehensive income for hedge on net investment in a foreign operation
Hedge accounting
Currency(foreign currency change risk)	W	12,388	W	(41,118	)
(In millions of Korean won)	December 31, 2018
	Changes in fair value		Other comprehensive income for hedge on net investment in a foreign operation
Hedge accounting
Currency(foreign currency change risk)	W	41,305	W	(33,092	)

Details of financial instruments designated as fair value hedge as of June 30, 2019 and December 31, 2018, are as follows:

	June 30, 2019
	Nominal amount		Assets		Liabilities		Changes in fair value
Currency
Forwards	W	505,825	W	1,383	W	4,568	W	(9,182	)
Swap		61,810		—		110		(110	)
Financial debentures in foreign currencies		92,544		—		92,069		(3,096	)
	W	660,179	W	1,383	W	96,747	W	(12,388	)
	December 31, 2018
	Nominal amount		Assets		Liabilities		Changes in fair value1
Currency
Forwards	W	530,967	W	4,924	W	2,412	W	(37,696	)
Financial debentures in foreign currencies		89,448		—		89,109		(3,609	)
	W	620,415	W	4,924	W	91,521	W	(41,305	)

¹ Fairvalue changes in thesix-month period ended June 30, 2018

72

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

The fair value ofnon-derivative financial instruments designated as hedging instruments as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019		December 31, 2018
Financial debentures in foreign currencies	W	92,498	W	88,785

Gain or loss from hedging instruments in hedge of net investments in foreign operations and hedged items attributable to the hedged risk for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019			2018
Gains (losses) on hedging instruments	W	(12,388	)	W	(41,305	)
Effective portion of gains (losses) on hedge on net investment in a foreign operation (amount recognized in other comprehensive income)		(12,388	)		(41,305	)
Ineffective portion of gain on hedge on net investment in a foreign operation (amount recognized in profit or loss)		—			—

The effective portion of gains (losses) on hedging instruments recognized in other comprehensive income for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019			2018
Amount recognized in other comprehensive income	W	(12,388	)	W	(41,305	)
Amount of other comprehensive income reclassified to profit or loss		1,317			—
Tax effect		3,045			10,636
Amount recognized in other comprehensive income, net of tax	W	(8,026	)	W	(30,669	)

9. Loans at amortized cost

Details of loans as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019			December 31, 2018
Loans at amortized cost	W	326,635,767		W	321,058,158
Deferred loan origination fees and costs		735,855			753,126
Less: Allowances for loan losses		(2,471,161	)		(2,609,681	)
Carrying amount	W	324,900,461		W	319,201,603

Details of loans for other banks as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019			December 31, 2018
Loans at amortized cost	W	5,069,527		W	3,484,210
Less: Allowances for loan losses		(464	)		(620	)
Carrying amount	W	5,069,063		W	3,483,590

73

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Details of loan types and customer types of loans to customers, other than banks, as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Retail			Corporate			Credit card			Total
Loans in Korean won	W	153,997,992		W	125,009,223		W	—		W	279,007,215
Loans in foreign currencies		368,890			6,130,775			—			6,499,665
Domestic import usance bills		—			3,016,720			—			3,016,720
Off-shore funding loans		—			1,046,452			—			1,046,452
Call loans		—			989,321			—			989,321
Bills bought in Korean won		—			1,984			—			1,984
Bills bought in foreign currencies		—			2,299,417			—			2,299,417
Guarantee payments under payment guarantee		39			4,773			—			4,812
Credit card receivables in Korean won		—			—			16,948,485			16,948,485
Credit card receivables in foreign currencies		—			—			2,467			2,467
Reverse repurchase agreements		—			4,876,484			—			4,876,484
Privately placed bonds		—			756,204			—			756,204
Factored receivables		156			2,485			—			2,641
Lease receivables		1,544,390			174,080			—			1,718,470
Loans for installment credit		5,099,752			32,006			—			5,131,758
		161,011,219			144,339,924			16,950,952			322,302,095
Proportion (%)		49.96			44.78			5.26			100.00
Less: Allowances		(674,524	)		(1,086,605	)		(709,568	)		(2,470,697	)
	W	160,336,695		W	143,253,319		W	16,241,384		W	319,831,398

74

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	Retail			Corporate			Credit card			Total
Loans in Korean won	W	152,523,852		W	124,334,950		W	—		W	276,858,802
Loans in foreign currencies		259,015			4,711,234			—			4,970,249
Domestic import usance bills		—			2,817,174			—			2,817,174
Off-shore funding loans		—			844,954			—			844,954
Call loans		—			1,473,397			—			1,473,397
Bills bought in Korean won		—			3,057			—			3,057
Bills bought in foreign currencies		—			3,427,368			—			3,427,368
Guarantee payments under payment guarantee		46			4,104			—			4,150
Credit card receivables in Korean won		—			—			17,346,224			17,346,224
Credit card receivables in foreign currencies		—			—			7,834			7,834
Reverse repurchase agreements		—			3,341,700			—			3,341,700
Privately placed bonds		—			823,178			—			823,178
Factored receivables		446			5,939			—			6,385
Lease receivables		1,712,597			81,985			—			1,794,582
Loans for installment credit		4,582,913			25,107			—			4,608,020
		159,078,869			141,894,147			17,354,058			318,327,074
Proportion (%)		49.97			44.57			5.46			100.00
Less: Allowances		(642,897	)		(1,255,223	)		(710,941	)		(2,609,061	)
	W	158,435,972		W	140,638,924		W	16,643,117		W	315,718,013

75

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

10. Allowances for Loan Losses

Changes in the allowances for loan losses for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
	Retails									Corporates									Credit cards
	The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses						The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses						The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses
				Non-impaired			Impaired						Non-impaired			Impaired						Non-impaired			Impaired
Beginning	W	237,440		W	215,743		W	189,714		W	214,312		W	318,656		W	722,875		W	180,467		W	290,025		W	240,449
Transfer between stages
Transfer to12-month expected credit losses		61,688			(61,410	)		(278	)		37,417			(23,933	)		(13,484	)		48,023			(47,351	)		(672	)
Transfer to lifetime expected credit losses		(46,500	)		59,013			(12,513	)		(25,345	)		47,761			(22,416	)		(25,960	)		27,132			(1,172	)
Impairment		(1,127	)		(45,219	)		46,346			(1,420	)		(27,453	)		28,873			(1,972	)		(22,700	)		24,672
Write-offs		(2	)		26			(206,109	)		—			2			(108,947	)		—			—			(257,053	)
Disposal		(448	)		(16	)		(606	)		—			—			(5,887	)		—			—			(40	)
Provision (reversal) for loan losses1,2		2,030			44,030			193,248			(12,729	)		(17,426	)		(23,642	)		(14,898	)		21,468			254,106
Others (change of currency ratio, etc.)		42			103			(671	)		544			176			(865	)		—			—			(4,956	)
Ending	W	253,123		W	212,270		W	209,131		W	212,779		W	297,783		W	576,507		W	185,660		W	268,574		W	255,334

¹  Provision for credit losses in statements of comprehensive income also include provision (reversal) for due from financial institutions (Note 7), and provision (reversal) for securities (Note 11), provision for unused commitments and guarantees (Note 22), provision (reversal) for financial guarantees contracts (Note 22), and provision (reversal) for other financial assets (Note 17).

²  IncludedW 173,621 million from recover from write-offs

76

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	2018
	Retails									Corporates									Credit cards
	The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses						The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses						The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses
				Non-impaired			Impaired						Non-impaired			Impaired						Non-impaired			Impaired
Beginning2	W	249,226		W	196,387		W	186,766		W	208,354		W	275,722		W	865,065		W	154,076		W	260,162		W	213,181
Transfer between stages
Transfer to12-month expected credit losses		68,135			(67,826	)		(309	)		22,592			(21,172	)		(1,420	)		42,080			(41,207	)		(873	)
Transfer to lifetime expected credit losses		(57,390	)		64,841			(7,451	)		(18,264	)		26,321			(8,057	)		(24,526	)		25,746			(1,220	)
Impairment		(1,138	)		(32,677	)		33,815			(1,864	)		(19,522	)		21,386			(1,564	)		(19,411	)		20,975
Write-offs		—			—			(185,921	)		—			(3	)		(102,480	)		—			—			(223,853	)
Disposal		(737	)		(1,317	)		(1,488	)		—			—			(8,105	)		—			—			—
Provision (reversal) for loan losses1,3		243			43,466			161,355			(13,564	)		25,420			61,206			(6,801	)		37,697			224,278
Others (change of currency ratio, etc.)		433			93			337			(2,835	)		568			2,927			2			—			(4,037	)
Ending	W	258,772		W	202,967		W	187,104		W	194,419		W	287,334		W	830,522		W	163,267		W	262,987		W	228,451

¹  Provision for credit losses in statements of comprehensive income also include provision (reversal) for due from financial institutions (Note 7), and provision (reversal) for securities (Note 11), provision for unused commitments and guarantees (Note 22), provision (reversal) for financial guarantees contracts (Note 22), and provision (reversal) for other financial assets (Note 17).

²  Prepared in accordance with Korean IFRS 1109.

³  IncludedW 256,642 million from recover from write-offs

77

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

The Group manages thewritten-off loans that their extinctive prescription did not occur, and that are not collected; the balance of those are respectivelyW 11,545,373 million andW 12,067,272 million as of June 30, 2019 and December 31, 2018.

Changes in the book value of loans at amortized cost for thesix-month periods ended June 30, 2019, are as follows:

(In millions of Korean won)	2019
	12-month expected credit losses			Lifetime expected credit losses
				Non-impaired			Impaired
Beginning	W	293,296,370		W	26,417,165		W	2,097,749
Transfer between stages
Transfer to12-month expected credit losses		6,072,086			(6,050,681	)		(21,405	)
Transfer to lifetime expected credit losses		(10,130,540	)		10,229,927			(99,387	)
Transfer to lifetime expected credit losses (impaired)		(406,917	)		(678,406	)		1,085,323
Write-offs		(2	)		29			(572,110	)
Disposal		(880,647	)		(13,013	)		(76,328	)
Net increase (decrease) (Execution, repayment and others)		10,589,568			(3,127,635	)		(359,524	)
Ending	W	298,539,918		W	26,777,386		W	2,054,318

11. Financial Assets at Fair Value through Profit or Loss and Financial Investments

Details of financial assets at fair value through profit or loss and financial investments as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
Financial assets at fair value through profit or loss
Debt securities:
Government and public bonds	W	7,514,882
Financial bonds		13,623,361
Corporate bonds		2,813,190
Asset-backed securities		85,563
Beneficiary certificates		11,153,619
Derivatives linked securities		3,899,975
Other debt securities		6,914,542
Equity securities:
Stocks		1,141,819
Other equity securities		236,301
Loans:
Private placed corporate bonds		692,807
Other loans		268,390
Due from financial institutions:
Other due from financial institutions		293,452
Others		73,971
		48,711,872

78

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Financial Investments
Financial assets measured at fair value through other comprehensive income
Debt securities:
Government and public bonds		6,163,824
Financial bonds		18,578,293
Corporate bonds		11,498,223
Asset-backed securities		1,324,944
Other debt securities		80,030
Equity securities:
Stocks		2,274,562
Equity investments		40,408
Other equity securities		73,718
Loans:
Private placed corporate bonds		422,889
		40,456,891
Financial assets at amortized cost
Debt securities:
Government and public bonds		5,343,785
Financial bonds		6,906,339
Corporate bonds		7,019,700
Asset-backed securities		4,565,788
Allowance		(1,788	)
		23,833,824
	W	64,290,715

(In millions of Korean won)	December 31, 2018
Financial assets at fair value through profit or loss
Debt securities:
Government and public bonds	W	7,922,936
Financial bonds		14,978,408
Corporate bonds		4,101,066
Asset-backed securities		84,382
Beneficiary certificates		10,252,377
Derivatives linked securities		3,516,626
Other debt securities		7,429,687
Equity securities:
Stocks		1,094,441
Other equity securities		193,221
Loans:
Private placed corporate bonds		823,071
Other loans		131,105
Due from financial institutions:
Other due from financial institutions		381,719
Others		78,808
		50,987,847

79

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Financial Investments
Financial assets measured at fair value through other comprehensive income
Debt securities:
Government and public bonds		3,475,214
Financial bonds		20,107,719
Corporate bonds		10,540,985
Asset-backed securities		1,100,041
Other debt securities		19,675
Equity securities:
Stocks		2,262,379
Equity investments		38,584
Other equity securities		69,153
Loans:
Private placed corporate bonds		389,822
		38,003,572
Financial assets at amortized cost
Debt securities:
Government and public bonds		5,090,051
Financial bonds		6,847,055
Corporate bonds		6,943,332
Asset-backed securities		4,782,800
Allowance		(1,716	)
		23,661,522
	W	61,665,094

Dividend incomes from the equity securities measured at fair value through other comprehensive income for thesix-month periods ended June 30, 2019 and 2018 are as follows:

(In millions of Korean won)	2019
	From the financial asset derecognized		From the remaining financial asset
Equity securities at fair value through other comprehensive income
Stocks
Listed	W	—	W	18,732
Unlisted		—		24,950
Other		—		1,470
	W	—	W	45,152
(In millions of Korean won)	2018
	From the financial asset derecognized		From the remaining financial asset
Equity securities at fair value through other comprehensive income
Stocks
Listed	W	—	W	14,896
Unlisted		—		24,025
Equity investments		—		2,256
	W	—	W	41,177

80

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

The derecognized equity securities, measured at fair value through other comprehensive income for thesix-month periods ended June 30, 2019 and 2018 are as follows:

(In millions of Korean won)	2019
	Disposal price		Accumulated OCI as of disposal date
Equity securities at fair value through other comprehensive income
Stocks
Listed	W	12,308	W	(25,278	)
Unlisted		737		(114	)
	W	13,045	W	(25,392	)
(In millions of Korean won)	2018
	Disposal price		Accumulated OCI as of disposal date
Equity securities at fair value through other comprehensive income
Stocks
Listed	W	23,701	W	16,175
Unlisted		480		480
	W	24,181	W	16,655

Provision(reversal) for the allowance of financial investments for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
	Impairment losses		Reversal of impairment			Total
Securities measured at fair value through other comprehensive income	W	1,353	W	(762	)	W	591
Loans measured at fair value through other comprehensive income		761		(140	)		621
Securities at amortized cost		174		(115	)		59
	W	2,288	W	(1,017	)	W	1,271
(In millions of Korean won)	2018
	Impairment losses		Reversal of impairment			Total
Securities measured at fair value through other comprehensive income	W	741	W	(1,717	)	W	(976	)
Securities at amortized cost		260		(145	)		115
	W	1,001	W	(1,862	)	W	(861	)

81

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Changes in the allowances for financial investments for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
	12-month expected credit losses			Lifetime expected credit losses
				Non-impaired			Impaired
Beginning	W	5,657		W	192		W	322
Transfer between stages
Transfer to12-month expected credit losses		437			(189	)		(249	)
Transfer to lifetime expected credit losses		(669	)		669			—
Impairment		—			—			—
Disposal		(214	)		(229	)		—
Provision (reversal) for loan losses		606			665			—
Others (change of currency ratio, etc.)		39			259			—
Ending	W	5,856		W	1,367		W	73
(In millions of Korean won)	2018
	12-month expected credit losses			Lifetime expected credit losses
				Non-impaired			Impaired
Beginning1	W	4,937		W	482		W	720
Transfer between stages
Transfer to12-month expected credit losses		482			(482	)		—
Transfer to lifetime expected credit losses		(20	)		20			—
Impairment		—			—			—
Disposal		(125	)		—			—
Provision (reversal) for loan losses		(721	)		214			(354	)
Others (change of currency ratio, etc.)		22			1			—
Ending	W	4,575		W	235		W	366

¹  Prepared in accordance with Korean IFRS 1109.

82

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

12. Investments in Associates and joint ventures

Investments in associates and joint ventures as of June 30, 2019 and December 31, 2018, are as follows:

(in millions of Korean won)	June 30, 2019
	Ownership (%)		Acquisition cost		Share of net asset amount			Carrying amount		Industry	Location
Associates
KB Pre IPO Secondary Venture Fund 1st1		15.19	W	1,454	W	1,717		W	1,717	Investment finance	Korea
KB GwS Private Securities Investment Trust		26.74		113,880		136,540			134,694	Investment finance	Korea
KB-KDBC New Technology Business Fund8		66.66		15,000		14,243			14,243	Investment finance	Korea
KB Star office Private real estate Investment Trust No. 1		21.05		20,000		20,273			19,860	Investment finance	Korea
PT Bank Bukopin TBK14, 15		22.00		116,422		109,613			117,328	Banking and foreign exchange transaction	Indonesia
Sun Surgery Center Inc.		28.00		2,682		3,321			3,321	Hospital	United States of America
Dae-A Leisure Co., Ltd.6		49.36		—		1,613			578	Earth works	Korea
Doosung Metal Co., Ltd 6		26.52		—		(62	)		—	Manufacture of metal products	Korea
RAND Bio Science Co., Ltd. 1		15.08		2,000		—			—	Research and experimental development on medical sciences and pharmacy	Korea
Balhae Infrastructure Company1		12.61		104,812		101,792			101,792	Investment finance	Korea
Aju Good Technology Venture Fund		38.46		18,038		20,674			20,674	Investment finance	Korea
Acts Co., Ltd.10		7.14		500		—			—	Manufacture of optical lens and elements	Korea
SY Auto Capital Co., Ltd.		49.00		9,800		16,341			12,157	Installment loan	Korea
Wise Asset Management Co., Ltd.7		33.00		—		—			—	Asset management	Korea
Incheon Bridge Co., Ltd.1		14.99		9,158		(15,962	)		—	Operation of highways and related facilities	Korea
Jungdong Steel Co., Ltd.6		42.88		—		(433	)		—	Wholesale of primary metal	Korea
Kendae Co., Ltd.6		41.01		—		(252	)		98	Screen printing	Korea
Dongjo Co., Ltd.6		29.29		—		806			115	Wholesale of agricultural and forestry machinery and equipment	Korea
Dpaps Co., Ltd.6		38.62		—		—			—	Wholesale of paper products	Korea
Big Dipper Co., Ltd.		29.33		440		89			204	Big data consulting	Korea
Builton Co., Ltd.12		21.96		800		435			435	Software development and supply	Korea
Shinla Construction Co., Ltd.6		20.24		—		(551	)		—	Specialty construction	Korea

83

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Shinhwa Underwear Co., Ltd.6	26.24	—	16		258	Manufacture of underwears and sleepwears	Korea
A-PRO Co., Ltd.1	13.71	1,500	1,693		2,033	Manufacture of electric power storage system	Korea
MJT&I Co., Ltd.6	22.89	—	(613	)	116	Wholesale of other goods	Korea
Jaeyang Industry Co., Ltd.6	20.86	—	(552	)	—	Manufacture of luggage and other protective cases	Korea
Jungdo Co., Ltd.6	25.53	—	1,492		—	Office, commercial and institutional building construction	Korea
Jinseung Tech Co., Ltd.6	30.04	—	(194	)	—	Manufacture of other general-purpose machinery n.e.c.	Korea
Terra Co., Ltd.6	24.06	—	2		—	Manufacture of hand-operated kitchen appliances and metal ware	Korea
Paycoms Co., Ltd.9	11.70	800	156		156	System software publishing	Korea
Food Factory Co., Ltd.11	22.22	1,000	1,000		1,000	Farm product distribution industry	Korea
Korea NM Tech Co., Ltd.6	22.41	—	552		—	Manufacture of motor vehicles, trailers and semitrailers	Korea
KB IGen Private Equity Fund No.11	0.03	—	—		—	Investment finance	Korea
KB No.10 Special Purpose Acquisition Company1,2	0.19	10	20		20	SPAC	Korea
KB No.11 Special Purpose Acquisition Company1,3	0.31	10	19		19	SPAC	Korea
KB No.17 Special Purpose Acquisition Company1,4	0.02	1	2		2	SPAC	Korea
KB No.18 Special Purpose Acquisition Company1,5	0.02	2	2		2	SPAC
KB Private Equity Fund III1	15.69	8,000	7,792		7,792	Investment finance	Korea
Korea Credit Bureau Co., Ltd.1	9.00	4,500	6,367		6,367	Credit information	Korea
KoFC POSCO HANHWA KB shared growth Private Equity Fund No. 2	25.00	12,970	14,524		14,524	Investment finance	Korea
Keystone-Hyundai Securities No. 1 Private Equity Fund1	5.64	1,842	1,592		1,592	Investment finance	Korea
POSCO-KB Shipbuilding Fund	31.25	5,000	4,469		4,469	Investment finance	Korea
GH Real Estate I LP	42.00	17,678	18,502		18,502	Asset management	Guernsey
KBTS Technology Venture Private Equity Fund8	56.00	16,016	15,909		15,909	Investment finance	Korea
KB-Brain KOSDAQScale-up New Technology Business Investment Fund8	42.55	16,000	15,696		15,696	Investment finance	Korea
KB-SJ Tourism Venture Fund1,8	18.52	3,000	2,824		2,824	Investment finance	Korea
UNION Media Commerce Fund	29.00	1,000	961		961	Investment finance	Korea
KB-Stonebridge Secondary Private Equity Fund1	14.57	7,070	7,027		7,027	Investment finance	Korea
KB SPROTT Renewable Private Equity Fund I	37.69	473	380		380	Investment finance	Korea
CHONG IL MACHINE & TOOLS CO., LTD.6	21.71	—	(126	)	—	Machinery and equipment wholesale	Korea
IMT TECHNOLOGY CO., LTD. 6	25.29	—	22		3	Computer Peripherals Distribution	Korea
IWON ALLOY CO., LTD. 6	23.31	—	394		—	Manufacture of smelting, refining and alloys	Korea
CARLIFE CO., LTD. 6	24.39	—	(75	)	—	Publishing of magazines and periodicals (publishing industry)	Korea
COMPUTERLIFE CO., LTD. 6	45.71	—	(260	)	69	Publishing of magazines and periodicals (publishing industry)	Korea
SKYDIGITAL INC.6	20.40	—	(248	)	—	Multi Media, Manufacture of Multi Media Equipment	Korea
JO YANG INDUSTRIAL CO., LTD.6	23.14	—	75		—	Manufacture of Special Glass	Korea
IL-KWANG ELECTRONIC MATERIALS CO., LTD. 6	29.06	—	(398	)	—	Electronic parts	Korea
SO-MYUNG RECYCLING CO., LTD .6	20.23	—	184		—	Nonferrous metals	Korea
IDTECK CO., LTD6	38.63	—	(122	)	—	Other manufacturing of wireless telecommunications equipment	Korea
		511,858	509,281		526,937

84

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(in millions of Korean won)	December 31, 2018
	Ownership (%)		Acquisition cost		Share of net asset amount			Carrying amount		Industry	Location
Associates
KB Pre IPO Secondary Venture Fund 1st1		15.19	W	1,454	W	1,649		W	1,649	Investment finance		Korea
KB GwS Private Securities Investment Trust		26.74		113,880		136,208			134,362	Investment finance		Korea
KB-KDBC New Technology Business Fund8		66.66		15,000		14,594			14,594	Investment finance		Korea
KB Star office Private real estate Investment Trust No. 1		21.05		20,000		20,252			19,839	Investment finance		Korea
PT Bank Bukopin TBK14, 15		22.00		116,422		106,484			113,932	Banking and foreign exchange transaction		Indonesia
Sun Surgery Center Inc.		28.00		2,682		2,760			2,715	Hospital		United States of America
Dae-A Leisure Co., Ltd.6		49.36		—		1,613			578	Earth works		Korea
Doosung Metal Co., Ltd 6		26.52		—		(16	)		—	Manufacture of metal products		Korea
RAND Bio Science Co., Ltd.		21.91		2,000		185			843	Research and experimental development on medical sciences and pharmacy		Korea
Balhae Infrastructure Company1		12.61		104,622		108,050			108,050	Investment finance		Korea
Aju Good Technology Venture Fund		38.46		18,038		18,134			18,134	Investment finance		Korea
Acts Co., Ltd.10		7.14		500		(14	)		—	Manufacture of optical lens and elements		Korea
SY Auto Capital Co., Ltd.		49.00		9,800		15,257			10,672	Installment loan		Korea
Wise Asset Management Co., Ltd.7		33.00		—		—			—	Asset management		Korea
Incheon Bridge Co., Ltd.1		14.99		9,158		(16,689	)		—	Operation of highways and related facilities		Korea
Jungdong Steel Co., Ltd.6		42.88		—		(433	)		—	Wholesale of primary metal		Korea
Kendae Co., Ltd.6		41.01		—		(252	)		98	Screen printing		Korea
Dongjo Co., Ltd.6		29.29		—		806			115	Wholesale of agricultural and forestry machinery and equipment		Korea
Dpaps Co., Ltd.6		38.62		—		14			—	Wholesale of paper products		Korea
Big Dipper Co., Ltd.		29.33		440		166			280	Big data consulting		Korea
Builton Co., Ltd.12		21.96		800		67			304	Software development and supply		Korea
Shinla Construction Co., Ltd.6		20.24		—		(551	)		—	Specialty construction		Korea
Shinhwa Underwear Co., Ltd.6		26.24		—		(57	)		185	Manufacture of underwears and sleepwears		Korea
A-PRO Co., Ltd.1		13.71		1,500		1,554			1,403	Manufacture of electric power storage system		Korea
MJT&I Co., Ltd.6		22.89		—		(606	)		122	Wholesale of other goods		Korea
Jaeyang Industry Co., Ltd.6		20.86		—		(552	)		—	Manufacture of luggage and other protective cases		Korea
Jungdo Co., Ltd.6		25.53		—		1,492			—	Office, commercial and institutional building construction		Korea

85

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Jinseung Tech Co., Ltd.6	30.04		—		(176	)		—	Manufacture of other general-purpose machinery n.e.c.	Korea
Terra Co., Ltd.6	24.06		—		2			—	Manufacture of hand-operated kitchen appliances and metal ware	Korea
Paycoms Co., Ltd.9	11.70		800		71			103	System software publishing	Korea
Food Factory Co., Ltd.11	22.22		1,000		206			928	Farm product distribution industry	Korea
Korea NM Tech Co., Ltd.6	22.41		—		552			—	Manufacture of motor vehicles, trailers and semitrailers	Korea
KB IGen Private Equity Fund No. 11	0.03		—		—			—	Investment finance	Korea
KB No. 9 Special Purpose Acquisition Company1	0.11		24		31			31	SPAC	Korea
KB No.10 Special Purpose Acquisition Company1,2	0.19		10		20			20	SPAC	Korea
KB No.11 Special Purpose Acquisition Company1,3	0.31		10		19			19	SPAC	Korea
KB Private Equity Fund III1	15.68		8,000		7,830			7,830	Investment finance	Korea
Korea Credit Bureau Co., Ltd.1	9.00		4,500		5,941			5,941	Credit information	Korea
KoFC KBIC Frontier Champ2010-5(PEF)	50.00		364		233			233	Investment finance	Korea
KoFC POSCO HANHWA KB shared growth Private Equity Fund No. 2	25.00		12,970		14,601			14,601	Investment finance	Korea
Keystone-Hyundai Securities No. 1 Private Equity Fund1	5.64		1,842		1,581			1,581	Investment finance	Korea
POSCO-KB Shipbuilding Fund	31.25		5,000		4,463			4,463	Investment finance	Korea
GH Real Estate I LP	42.00		17,678		17,252			17,252	Asset management	Guernsey
KBTS Technology Venture Private Equity Fund8	56.00		14,224		13,777			13,777	Investment finance	Korea
KB-Brain KOSDAQScale-up New Technology Business Investment Fund8	42.55		8,000		7,930			7,930	Investment finance	Korea
KB-SJ Tourism Venture Fund1,8	18.52		1,500		1,386			1,386	Investment finance	Korea
UNION Media Commerce Fund	29.00		1,000		962			962	Investment finance	Korea
CHONG IL MACHINE & TOOLS CO., LTD. 6	21.71		—		(107	)		—	Machinery and equipment wholesale	Korea
IMT TECHNOLOGY CO., LTD. 6	25.29		—		18			—	Computer Peripherals Distribution	Korea
IWON ALLOY CO., LTD. 6	23.31		—		394			—	Manufacture of smelting, refining and alloys	Korea
CARLIFE CO., LTD. 6	24.39		—		(75	)		—	Publishing of magazines and periodicals (publishing industry)	Korea
COMPUTERLIFE CO., LTD. 6	45.71		—		(329	)		—	Publishing of magazines and periodicals (publishing industry)	Korea
SKYDIGITAL INC.6	20.40		—		(142	)		—	Multi Media, Manufacture of Multi Media Equipment	Korea
JO YANG INDUSTRIAL CO., LTD.6	23.14		—		75			—	Manufacture of Special Glass	Korea
		W	493,218	W	486,630		W	504,932

86

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

¹ As of June 30, 2019 and December 31, 2018, the Group is represented on the governing bodies of its associates. Therefore, the Group has a significant influence over the decision-making process relating to their financial and business policies.

² The market value of KB No.10 Special Purpose Acquisition Company, reflecting the quoted market price as of June 30, 2019 and December 31, 2018, amounts toW 38 million andW 20 million, respectively.

³ The market value of KB No.11 Special Purpose Acquisition Company, reflecting the quoted market price as of June 30, 2019 and December 31, 2018, amounts toW 23 million andW 21 million, respectively.

⁴ The market value of KB No.17 Special Purpose Acquisition Company, reflecting the quoted market price as of June 30, 2019, amounts toW 2 million.

⁵ The market value of KB No.18 Special Purpose Acquisition Company, reflecting the quoted market price as of June 30, 2019, amounts toW 2 million.

⁶ The investment in associates was reclassified fromavailable-for-sale financial assets due tore-instated voting rights from termination of rehabilitation procedures.

⁷ Carrying amount of the investment has been recognized as a loss from the date Hyundai Securities Co., Ltd. was included in the consolidation scope.

⁸  In order to direct relevant activities, it is necessary to obtain the consent of the twoco-operative members; the Group has applied the equity method as the Group cannot control the investee by itself.

⁹ The ownership of Paycoms Co., Ltd. would be 22.96% and 22.96% as of June 30, 2019 and December 31, 2018, respectively, considering the potential voting rights from convertible bond.

¹⁰ The ownership of Acts Co., Ltd. would be 27.22% and 27.22% as of June 30, 2019 and December 31, 2018, respectively, considering the potential voting rights from convertible bond.

¹¹ The ownership of Food Factory Co., Ltd. would be 30.00% and 30.00% as of June 30, 2019 and December 31, 2018, respectively, considering the potential voting rights from convertible bond.

¹² The ownership of Builton Co., Ltd. would be 26.86% and 26.86% as of June 30, 2019 and December 31, 2018, considering the potential voting rights from convertible bond.

87

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

¹³  In accordance with Korean IFRS 1028 Investments in Associates and Joint Ventures, application of the equity method is exempted, and the Group designates its investments measured at fair value through profit or loss in Rainist Co., Ltd., TESTIAN Inc., Spark Biopharma, Inc., RMGPBio-Pharma Investment Fund, L.P., RMGPBio-Pharma Investment, L.P, HEYBIT, Inc., Hasys., Stratio, Inc., NEXOLON CO., LTD., Honest Fund Co.,Ltd., Cellincells Co., Ltd., CY CO., Ltd., JLK Inspection, Inc., ZOYI corporation INC., KOSESEUJITO CO., LTD., Bomapp Inc., KB Cape No.1 Private Equity Fund.

¹⁴ The Group has entered into an agreement with PT Bosowa Corporindo, the major shareholder of PT Bank Bukopin TBK. Under this agreement, the Group has a right of first refusal, atag-along right and a drag-along right. The drag-along right can be exercised for the duration of two years after three years from the acquisition date, subject to the occurrence of certain situations as defined in the agreement.

¹⁵ The fair value of PT Bank Bukopin TBK common stock isW 65,412 million andW 53,540 million as of June 30, 2019 and December 31, 2018.

The condensed financial information of major subsidiaries as of June 30, 2019 and December 31, 2018, and for thesix-month period ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	June 30, 20191
	Total assets		Total liabilities		Share capital		Equity			Share of net asset amount			Unrealized gains (losses)			Consolidated carrying amount
Associates and joint ventures
KB Pre IPO Secondary Venture Fund 1st	W	11,329	W	29	W	10,120	W	11,300		W	1,717		W	—		W	1,717
KB GwS Private Securities Investment Trust		516,870		253		425,814		516,617			136,540			(1,846	)		134,694
KB-KDBC New Technology Business Investment Fund		21,663		298		22,500		21,365			14,243			—			14,243
KB Star office Private real estate Investment Trust No. 1		218,246		121,950		95,000		96,296			20,273			(413	)		19,860
PT Bank Bukopin TBK2		7,449,236		6,950,995		106,536		498,241			109,613			7,715			117,328
Sun Surgery Center Inc		12,890		1,156		9,428		11,734			3,321			—			3,321
RAND Bio Science Co., Ltd.		376		3,125		913		(2,749	)		—			—			—
Balhae Infrastructure Company		809,377		1,826		831,512		807,551			101,792			—			101,792
Aju Good Technology Venture Fund		54,160		407		46,900		53,753			20,674			—			20,674
Acts Co., Ltd.		7,635		8,230		117		(595	)		—			—			—
SY Auto Capital Co., Ltd.		88,954		55,604		20,000		33,350			16,341			(4,184	)		12,157
Incheon Bridge Co., Ltd.		606,413		712,897		61,096		(106,484	)		(15,962	)		15,962			—
Big Dipper Co., Ltd.		448		143		1,500		305			89			115			204
Builton Co., Ltd.		2,093		1,658		325		435			435			—			435
A-PRO Co., Ltd.		41,424		29,072		1,633		12,352			1,693			340			2,033
Paycoms Co., Ltd.		2,155		1,669		855		486			156			—			156
Food Factory Co., Ltd.		4,381		3,109		450		1,272			1,000			—			1,000
KB IGen Private Equity Fund No. 1		3,526		8		1,396		3,518			—			—			—
KB No. 10 Special Purpose Acquisition Company		11,993		1,718		521		10,275			20			—			20
KB No. 11 Special Purpose Acquisition Company		6,819		752		321		6,067			19			—			19
KB No. 17 Special Purpose Acquisition Company		11,777		1,296		546		10,481			2			—			2
KB No. 18 Special Purpose Acquisition Company		2,487		1,952		32		535			2			—			2
KB Private Equity Fund III		49,678		3		51,000		49,675			7,792			—			7,792
Korea Credit Bureau Co., Ltd.		93,612		22,869		10,000		70,743			6,367			—			6,367
KoFC POSCO HANHWA KB shared growth Private Equity Fund No. 2		59,153		1,055		51,880		58,098			14,524			—			14,524
Keystone-Hyundai Securities No. 1 Private Equity Fund		174,672		141,533		34,114		33,139			1,592			—			1,592
POSCO-KB Shipbuilding Fund		14,548		249		16,000		14,299			4,469			—			4,469
GH Real Estate I LP		44,188		195		42,093		43,993			18,502			—			18,502
KBTS Technology Venture Private Equity Fund		28,899		490		28,600		28,409			15,909			—			15,909
KB-Brain KOSDAQScale-up New Technology Business Investment Fund		37,192		307		37,600		36,885			15,696			—			15,696
KB-SJ Tourism Venture Fund		15,422		171		16,200		15,251			2,824			—			2,824
UNION Media Commerce Fund		3,318		3		3,450		3,315			961			—			961
KB-Stonebridge Secondary Private Equity Fund		48,470		959		48,541		47,511			7,027			—			7,027
KB SPROTT Renewable Private Equity Fund I		1,008		—		1,254		1,008			380			—			380

88

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	20191
	Operating income		Profit (loss)			Other comprehensive income		Total comprehensive income			Dividends
Associates and joint ventures
KB Pre IPO Secondary Venture Fund 1st	W	510	W	445		W	—	W	445		W	—
KB GwS Private Securities Investment Trust		21,253		20,767			—		20,767			5,219
KB-KDBC New Technology Business Investment Fund		45		(256	)		—		(256	)		—
KB Star office Private real estate Investment Trust No. 1		7,033		3,063			—		3,063			624
PT Bank Bukopin TBK		282,559		(18,153	)		32,377		14,224			—
Sun Surgery Center Inc.		2,373		1,346			772		2,118			—
RAND Bio Science Co., Ltd.		—		(256	)		—		(256	)		—
Balhae Infrastructure Company		30,799		(23,961	)		—		(23,961	)		3,428
Aju Good Technology Venture Fund		7,480		6,740			—		6,740			—
Acts Co., Ltd.		3,929		657			—		657			—
SY Auto Capital Co., Ltd.		9,231		2,230			—		2,230			—
Incheon Bridge Co., Ltd.		49,957		1,012			—		1,012			—
Big Dipper Co., Ltd.		284		(262	)		—		(262	)		—
Builton Co., Ltd.		527		(229	)		—		(229	)		—
A-PRO Co., Ltd.		21,105		3,683			—		3,683			—
Paycoms Co., Ltd.		1,002		(529	)		—		(529	)		—
Food Factory Co., Ltd.		1,773		147			—		147			—
KB IGen Private Equity Fund No. 1		—		5,873			—		5,873			—
KB No. 10 Special Purpose Acquisition Company		—		19			—		19			—
KB No. 11 Special Purpose Acquisition Company		—		2			—		2			—
KB No. 17 Special Purpose Acquisition Company		—		(228	)		—		(228	)		—
KB No. 18 Special Purpose Acquisition Company		—		(15	)		—		(15	)		—
KB Private Equity Fund III		—		(245	)		—		(245	)		—
Korea Credit Bureau Co., Ltd.		41,936		5,657			—		5,657			135
KoFC POSCO HANHWA KB shared growth Private Equity Fund No. 2		1,007		(275	)		—		(275	)		—
Keystone-Hyundai Securities No. 1 Private Equity Fund		10,237		196			—		196			—
POSCO-KB Shipbuilding Fund		1,360		16			—		16			—
GH Real Estate I LP		4,875		1,796			1,236		3,032			—
KBTS Technology Venture Private Equity Fund		1,102		608			—		608			—
KB-Brain KOSDAQScale-up New Technology Business Investment Fund		56		(553	)		—		(553	)		—
KB-SJ Tourism Venture Fund		—		(332	)		—		(332	)		—
UNION Media Commerce Fund		—		(2	)		—		(2	)		—
KB-Stonebridge Secondary Private Equity Fund		2		(1,029	)		—		(1,029	)		—
KB SPROTT Renewable Private Equity Fund I		—		(247	)		—		(247	)		—

89

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 20181
	Total assets			Total liabilities		Share capital		Equity			Share of net asset amount			Unrealized gains (losses)			Consolidated carrying amount
Associates and joint ventures
KB Pre IPO Secondary Venture Fund 1st	W	10,864		W	9	W	10,120	W	10,855		W	1,649		W	—		W	1,649
KB GwS Private Securities Investment Trust		516,115			741		425,814		515,374			136,208			(1,846	)		134,362
KB-KDBC New Technology Business Investment Fund		22,492			602		22,500		21,890			14,594			—			14,594
KB Star office Private real estate Investment Trust No. 1		218,025			121,828		95,000		96,197			20,252			(413	)		19,839
PT Bank Bukopin TBK2		7,195,249			6,711,233		106,536		484,016			106,484			7,448			113,932
Sun Surgery Center Inc		10,468			610		9,428		9,858			2,760			(45	)		2,715
RAND Bio Science Co., Ltd.		2,913			2,070		913		843			185			658			843
Balhae Infrastructure Company		859,040			1,843		829,995		857,197			108,050			—			108,050
Aju Good Technology Venture Fund		47,216			66		46,900		47,150			18,134			—			18,134
Acts Co., Ltd.		6,666			6,823		117		(157	)		(14	)		14			—
SY Auto Capital Co., Ltd.		89,948			58,812		20,000		31,136			15,257			(4,585	)		10,672
Incheon Bridge Co., Ltd.		617,560			728,896		61,096		(111,336	)		(16,689	)		16,689			—
Big Dipper Co., Ltd.		723			157		1,500		566			166			114			280
Builton Co., Ltd.		1,908			1,604		325		304			67			237			304
A-PRO Co., Ltd.		29,438			18,099		1,713		11,339			1,554			(151	)		1,403
Paycoms Co., Ltd.		2,126			1,520		855		606			71			32			103
Food Factory Co., Ltd.		4,096			3,168		450		928			206			722			928
KB IGen Private Equity Fund No. 1		148			8		170		140			—			—			—
KB No. 9 Special Purpose Acquisition Company		30,288			2,629		1,382		27,659			31			—			31
KB No. 10 Special Purpose Acquisition Company		11,960			1,704		521		10,256			20			—			20
KB No. 11 Special Purpose Acquisition Company		6,807			742		321		6,065			19			—			19
KB Private Equity Fund III		49,924			5		51,000		49,919			7,830			—			7,830
Korea Credit Bureau Co., Ltd.		88,797			22,788		10,000		66,009			5,941			—			5,941
KoFC KBIC Frontier Champ2010-5 (PEF)		469			3		300		466			233			—			233
KoFC POSCO HANHWA KB shared growth Private Equity Fund No. 2		59,464			1,061		51,880		58,403			14,601			—			14,601
Keystone-Hyundai Securities No. 1 Private Equity Fund		177,024			151,862		34,114		25,162			1,581			—			1,581
POSCO-KB Shipbuilding Fund		14,287			4		16,000		14,283			4,463			—			4,463
GH Real Estate I LP		41,206	��		190		42,093		41,016			17,252			—			17,252
KBTS Technology Venture Private Equity Fund		24,810			208		25,400		24,602			13,777			—			13,777
KB-Brain KOSDAQScale-up New Technology Business Investment Fund		18,820			181		18,800		18,639			7,930			—			7,930
KB-SJ Tourism Venture Fund		7,484			2		8,100		7,482			1,386			—			1,386
UNION Media Commerce Fund		3,318			—		3,450		3,318			962			—			962

90

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	20181
	Operating income		Profit (loss)			Other comprehensive income		Total comprehensive income			Dividends
Associates and joint ventures
KB Pre IPO Secondary Venture Fund 1st	W	1,725	W	1,711		W	—	W	1,711		W	—
KB GwS Private Securities Investment Trust		10,626		10,375			—		10,375			4,550
KB-KDBC New Technology Business Investment Fund		10		(138	)		—		(138	)		—
KB Star office Private real estate Investment Trust No. 1		3,268		1,356			—		1,356			544
Sun Surgery Center Inc.		163		29			—		29			—
RAND Bio Science Co., Ltd.		—		(1,064	)		—		(1,064	)		—
Balhae Infrastructure Company		15,231		13,451			—		13,451			3,431
Bungaejangter Inc.		2,594		652			—		652			—
Aju Good Technology Venture Fund		687		420			—		420			—
Acts Co., Ltd.		2,472		(628	)		—		(628	)		—
SY Auto Capital Co., Ltd.		4,938		1,289			—		1,289			—
Incheon Bridge Co., Ltd.		21,726		(1,166	)		—		(1,166	)		—
Big Dipper Co., Ltd.		72		(455	)		—		(455	)		—
Builton Co., Ltd.		520		208			—		208			—
A-PRO Co., Ltd.		11,391		198			—		198			—
Inno Lending Co., Ltd.		50		(171	)		—		(171	)		—
Paycoms Co., Ltd.		1,190		8			—		8			—
Food Factory Co., Ltd.		1,230		26			—		26			—
KB IGen Private Equity Fund No. 1		—		(152	)		—		(152	)		—
KB No. 9 Special Purpose Acquisition Company		—		122			—		122			—
KB No. 10 Special Purpose Acquisition Company		—		34			—		34			—
KB No. 11 Special Purpose Acquisition Company		—		203			—		203			—
KB Private Equity Fund III		—		(198	)		—		(198	)		—
Korea Credit Bureau Co., Ltd.		17,387		2,198			—		2,198			113
KoFC KBIC Frontier Champ2010-5 (PEF)		1,208		1,205			—		1,205			999
KoFC POSCO HANHWA KB shared growth Private Equity Fund No. 2		519		(6,870	)		—		(6,870	)		—
Keystone-Hyundai Securities No. 1 Private Equity Fund		4,677		(2,893	)		—		(2,893	)		—
POSCO-KB Shipbuilding Fund		73		(671	)		—		(671	)		—
GH Real Estate I LP		1,336		864			261		1,125			—
KBTS Technology Venture Private Equity Fund		—		(166	)		—		(166	)		—
KB-SJ Tourism Venture Fund		—		(283	)		—		(283	)		—
UNION Media Commerce Fund		—		(132	)		—		(132	)		—

¹  The amounts included in the financial statements of the associates and joint ventures are adjusted to reflect adjustments made by the entity, such as, fair value adjustments made at the time of acquisition and adjustments for differences in accounting policies.

²  The amounts of goodwill on PT Bank Bukopin TBK isW 4,368 million andW 4,101 million as of June 30, 2019 and December 31, 2018, respectively.

91

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Changes in investments in associates and joint ventures for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
	Beginning		Acquisition		Disposal			Dividends			Gains (losses) on equity-method accounting			Other compre- hensive income		Others		Ending
Associates and joint ventures
KB Pre IPO Secondary Venture Fund 1st	W	1,649	W	—	W	—		W	—		W	68		W	—	W	—	W	1,717
KB GwS Private Securities Investment Trust		134,362		—		—			(5,219	)		5,551			—		—		134,694
KB-KDBC New Technology Business Investment Fund		14,594		—		—			—			(351	)		—		—		14,243
KB Star office Private real estate Investment Trust No. 1		19,839		—		—			(624	)		645			—		—		19,860
PT Bank Bukopin TBK		113,932		—		—			—			(3,994	)		7,390		—		117,328
Sun Suregery Center Inc.		2,715		—		—			—			396			210		—		3,321
Dae-A Leisure Co., Ltd.		578		—		—			—			—			—		—		578
RAND Bio Science Co., Ltd.		843		—		—			—			(843	)		—		—		—
Balhae Infrastructure Company		108,050		190		—			(3,428	)		(3,020	)		—		—		101,792
Aju Good Technology Venture Fund		18,134		—		—			—			2,540			—		—		20,674
SY Auto Capital Co., Ltd.		10,672		—		—			—			1,485			—		—		12,157
Kendae Co., Ltd.		98		—		—			—			—			—		—		98
Dong Jo Co., Ltd.		115		—		—			—			—			—		—		115
Big Dipper Co., Ltd.		280		—		—			—			(76	)		—		—		204
Builton Co., Ltd.		304		—		—			—			131			—		—		435
Shinhwa Underwear Co., Ltd.		185		—		—			—			73			—		—		258
A-PRO Co., Ltd.		1,403		—		—			—			592			38		—		2,033
MJT&I Co., Ltd.		122		—		—			—			(6	)		—		—		116
Paycoms Co., Ltd.		103		—		—			—			53			—		—		156
Food Factory Co., Ltd.		928		—		—			—			72			—		—		1,000
KB No. 9 Special Purpose Acquisition Company		31		—		(31	)		—			—			—		—		—
KB No. 10 Special Purpose Acquisition Company		20		—		—			—			—			—		—		20
KB No. 11 Special Purpose Acquisition Company		19		—		—			—			—			—		—		19
KB No. 17 Special Purpose Acquisition Company		—		1		—			—			—			1		—		2
KB No. 18 Special Purpose Acquisition Company		—		2		—			—			—			—		—		2
KB Private Equity Fund III		7,830		—		—			—			(38	)		—		—		7,792
Korea Credit Bureau Co., Ltd.		5,941		—		—			(135	)		561			—		—		6,367
KoFC KBIC Frontier Champ2010-5(PEF)		233		—		(233	)		—			—			—		—		—
KoFC POSCO HANHWA KB shared growth Private Equity Fund No. 2		14,601		—		—			—			(77	)		—		—		14,524
Keystone-Hyundai Securities No. 1 Private Equity Fund		1,581		—		—			—			11			—		—		1,592
POSCO-KB Shipbuilding Fund		4,463		—		—			—			6			—		—		4,469
GH Real Estate I LP		17,252		—		—			—			754			496		—		18,502
KBTS Technology Venture Private Equity Fund		13,777		1,792		—			—			340			—		—		15,909
KB-Brain KOSDAQScale-up New Technology Business Investment Fund		7,930		8,000		—			—			(234	)		—		—		15,696
KB-SJ Tourism Venture Fund		1,386		1,500		—			—			(62	)		—		—		2,824
UNION Media Commerce Fund		962		—		—			—			(1	)		—		—		961
KB-Stonebridge Secondary Private Equity Fund		—		7,070		—			—			(43	)		—		—		7,027
KB SPROTT Renewable Private Equity Fund I		—		473		—			—			(93	)		—		—		380
IMT TECHNOLOGY CO., LTD.		—		—		—			—			3			—		—		3
COMPUTERLIFE CO., LTD.,		—		—		—			—			69			—		—		69
	W	504,932	W	19,028	W	(264	)	W	(9,406	)	W	4,512		W	8,135	W	—	W	526,937

¹ Gain on disposal of investments in associates and joint ventures amounted toW 270 million.

92

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	2018
	Beginning1		Acquisition		Disposal			Dividends			Gains (losses) on equity-method accounting			Other compre- hensive income			Others			Ending
Associates and joint ventures
KB Pre IPO Secondary Venture Fund 1st	W	1,551	W	—	W	—		W	—		W	362		W	—		W	—		W	1,913
KB GwS Private Securities Investment Trust		131,420		—		—			(4,550	)		5,551			—			—			132,421
KB-KDBC New Technology Business Investment Fund		4,972		—		—			—			(188	)		—			—			4,784
KB Star office Private real estate Investment Trust No. 1		19,709		—		—			(544	)		691			—			—			19,856
Sun Suregery Center Inc.		2,682		—		—			—			—			—			—			2,682
Dae-A Leisure Co., Ltd.		—		—		—			—			3,698			(3,120	)		—			578
RAND Bio Science Co., Ltd.		2,000		—		—			—			—			—			—			2,000
Balhae Infrastructure Company		105,190		715		—			(3,431	)		3,409			—			—			105,883
Bungaejangter Inc.		3,484		—		—			—			—			—			—			3,484
Aju Good Technology Venture Fund		8,230		4,268		—			—			—			—			—			12,498
Acts Co., Ltd.2		500		—		—			—			—			—			(500	)		—
SY Auto Capital Co., Ltd.		8,070		—		—			—			1,648			—			—			9,718
Kendae Co., Ltd.		127		—		—			—			(29	)		—			—			98
Dassang Techlon Co., Ltd.		—		—		—			—			(13	)		13			—			—
Dong Jo Co., Ltd.		—		—		—			—			115			—			—			115
Big Dipper Co., Ltd.		440		—		—			—			(133	)		—			—			307
Builton Co., Ltd.		800		—		—			—			(129	)		—			—			671
Shinhwa Underwear Co., Ltd.		138		—		—			—			46			—			—			184
A-PRO Co., Ltd.		1,500		—		—			—			—			—			—			1,500
MJT&I Co., Ltd.		127		—		—			—			(5	)		—			—			122
Inno Lending Co., Ltd.		230		—		—			—			(111	)		—			—			119
Terra Co., Ltd.		20		—		—			—			(20	)		—			—			—
Paycoms Co., Ltd.		800		—		—			—			(618	)		—			—			182
Food Factory Co., Ltd.		1,000		—		—			—			(66	)		—			—			934
KB IGen Private Equity Fund No. 1		3		—		(3	)		—			—			—			—			—
KB No. 8 Special Purpose Acquisition Company		20		—		(20	)		—			—			—			—			—
KB No. 9 Special Purpose Acquisition Company		31		—		—			—			—			—			—			31
KB No. 10 Special Purpose Acquisition Company		20		—		—			—			—			—			—			20
KB No. 11 Special Purpose Acquisition Company		19		—		—			—			1			(1	)		—			19
KB Private Equity Fund III		7,899		—		—			—			(31	)		—			—			7,868
Korea Credit Bureau Co., Ltd.		5,056		—		—			(113	)		639			—			—			5,582
KoFC KBIC Frontier Champ2010-5 (PEF)		7,120		—		(6,121	)		(999	)		454			—			—			454
KoFC POSCO HANHWA KB shared growth Private Equity Fund No. 2		17,713		—		—			—			(2,819	)		—			—			14,894
Keystone-Hyundai Securities No. 1 Private Equity Fund		1,761		—		—			—			(163	)		—			—			1,598
POSCO-KB Shipbuilding Fund		2,345		2,500		—			—			(210	)		—			—			4,635
Hyundai-Tongyang Agrifood Private Equity Fund		543		—		(78	)		(469	)		4			—			—			—
GH Real Estate I LP		—		17,678		—			—			363			110			—			18,151
KBTS Technology Venture Private Equity Fund		—		3,312		—			—			(173	)		—			—			3,139
KB-SJ Tourism Venture Fund		—		1,500		—			—			(52	)		—			—			1,448
CUBE Growth Fund No. 2				1,300		(1,300	)		—			—									—
UNION Media Commerce Fund				1,000		—			—			(38	)		—			—			962
	W	335,520	W	32,273	W	(7,522	)	W	(10,106	)	W	12,183		W	(2,998	)	W	(500	)	W	358,850

¹ Prepared in accordance with Korean IFRS 1109

² RecognizedW 500 million loss in relation to impaired capital.

³ Gain on disposal of investments in associates and joint ventures amounted toW 1,039 million.

93

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

13. Property and Equipment, and Investment Properties

Details of property and equipment as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)
	June 30, 2019
	Acquisition cost		Accumulated depreciation			Accumulated impairment losses			Carrying amount
Land	W	2,427,706	W	—		W	(1,018	)	W	2,426,688
Buildings		2,060,106		(729,705	)		(5,859	)		1,324,542
Leasehold improvements		820,183		(708,707	)		—			111,476
Equipment and vehicles		1,718,266		(1,451,300	)		—			266,966
Construction in progress		193,327		—			—			193,327
Right-of-use assets		749,560		(165,545	)		—			584,015
	W	7,969,148	W	(3,055,257	)	W	(6,877	)	W	4,907,014
(In millions of Korean won)
	December 31, 2018
	Acquisition cost		Accumulated depreciation			Accumulated impairment losses			Carrying amount
Land	W	2,433,059	W	—		W	(1,018	)	W	2,432,041
Buildings		2,043,459		(707,389	)		(5,859	)		1,330,211
Leasehold improvements		878,078		(750,442	)		—			127,636
Equipment and vehicles		1,729,223		(1,448,599	)		—			280,624
Construction in progress		88,618		—			—			88,618
Financial lease assets		44,429		(31,432	)		—			12,997
	W	7,216,866	W	(2,937,862	)	W	(6,877	)	W	4,272,127

Details of investment property as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Acquisition cost		Accumulated depreciation			Accumulated impairment losses		Carrying amount
Land	W	1,375,853	W	—		W	—	W	1,375,853
Buildings		1,381,460		(165,394	)		—		1,216,066
	W	2,757,313	W	(165,394	)	W	—	W	2,591,919
(In millions of Korean won)	December 31, 2018
	Acquisition cost		Accumulated depreciation			Accumulated impairment losses		Carrying amount
Land	W	972,562	W	—		W	—	W	972,562
Buildings		1,295,668		(148,419	)		—		1,147,249
	W	2,268,230	W	(148,419	)	W	—	W	2,119,811

94

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

14. Intangible Assets

Details of intangible assets as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Acquisition cost		Accumulated amortization			Accumulated impairment losses			Other			Carrying Amount
Goodwill	W	346,314	W	—		W	(70,517	)	W	(161	)	W	275,636
Other intangible assets		4,265,273		(1,786,170	)		(41,061	)		—			2,438,042
	W	4,611,587	W	(1,786,170	)	W	(111,578	)	W	(161	)	W	2,713,678
(In millions of Korean won)	December 31, 2018
	Acquisition cost		Accumulated amortization			Accumulated impairment losses			Other			Carrying Amount
Goodwill	W	346,314	W	—		W	(70,517	)	W	(577	)	W	275,220
Other intangible assets		4,140,355		(1,614,775	)		(45,017	)		—			2,480,563
	W	4,486,669	W	(1,614,775	)	W	(115,534	)	W	(577	)	W	2,755,783

Details of goodwill as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019				December 31, 2018
	Acquisition cost		Carrying amount		Acquisition cost		Carrying amount
Housing & Commercial Bank	W	65,288	W	65,288	W	65,288	W	65,288
KB Cambodia Bank		1,202		—		1,202		—
KB Securities Co., Ltd.1		70,265		58,889		70,265		58,889
KB Capital Co., Ltd.		79,609		79,609		79,609		79,609
KB Savings Bank Co., Ltd.		115,343		57,404		115,343		57,404
KB Securities Vietnam Joint Stock Company2		13,092		12,884		13,092		12,520
KB Daehan Specialied Bank PLC.		1,515		1,562		1,515		1,510
	W	346,314	W	275,636	W	346,314	W	275,220

¹ The amount occurred from formerly known as KB Investment & Securities Co., Ltd.

² Changed corporate name from MARITIME SECURITIES INCORPORATION

95

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Details of intangible assets, excluding goodwill, as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Acquisition cost		Accumulated amortization			Accumulated impairment losses			Carrying amount
Industrial property rights	W	7,316	W	(3,546	)	W	(19	)	W	3,751
Software		1,263,692		(1,015,072	)		—			248,620
Other intangible assets		547,748		(240,338	)		(41,042	)		266,368
Value of Business Acquired (VOBA)		2,395,291		(492,154	)		—			1,903,137
Right-of-use assets		51,226		(35,060	)		—			16,166
	W	4,265,273	W	(1,786,170	)	W	(41,061	)	W	2,438,042
(In millions of Korean won)	December 31, 2018
	Acquisition cost		Accumulated amortization			Accumulated impairment losses			Carrying amount
Industrial property rights	W	9,248	W	(2,661	)	W	(2,090	)	W	4,497
Software		1,169,549		(965,044	)		—			204,505
Other intangible assets		515,041		(223,503	)		(42,927	)		248,611
Value of Business Acquired (VOBA)		2,395,291		(393,346	)		—			2,001,945
Finance leases assets		51,226		(30,221	)		—			21,005
	W	4,140,355	W	(1,614,775	)	W	(45,017	)	W	2,480,563

96

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

15. Deferred Income Tax Assets and Liabilities

Details of deferred income tax assets and liabilities as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Assets			Liabilities			Net amount
Other provisions	W	109,184		W	—		W	109,184
Allowances for loan losses		2,508			—			2,508
Impairment losses on property and equipment		4,901			(1,989	)		2,912
Share-based payments		14,807			—			14,807
Provisions for guarantees		22,734			—			22,734
Losses (gains) from valuation on derivative financial instruments		24,654			(85,075	)		(60,421	)
Present value discount		8,986			(3,318	)		5,668
Losses (gains) from fair value hedged item		7,421			—			7,421
Accrued interest		—			(107,956	)		(107,956	)
Deferred loan origination fees and costs		417			(193,869	)		(193,452	)
Advanced depreciation provision		—			(1,703	)		(1,703	)
Gains from revaluation		604			(330,246	)		(329,642	)
Investments in subsidiaries and others		31,363			(84,847	)		(53,484	)
Losses(gains) on valuation of security investment		35,178			(300,081	)		(264,903	)
Defined benefit liabilities		511,789			—			511,789
Accrued expenses		152,532			—			152,532
Retirement insurance expense		—			(441,180	)		(441,180	)
Adjustments to the prepaid contributions		—			(24,990	)		(24,990	)
Derivative-linked securities		151,157			(34,727	)		116,430
Others		334,764			(635,634	)		(300,870	)
		1,412,999			(2,245,615	)		(832,616	)
Offsetting of deferred income tax assets and liabilities		(1,408,661	)		1,408,661			—
	W	4,338		W	(836,954	)	W	(832,616	)

97

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	Assets			Liabilities			Net amount
Other provisions	W	109,721		W	—		W	109,721
Allowances for loan losses		3,327			(65	)		3,262
Impairment losses on property and equipment		6,030			(2,032	)		3,998
Share-based payments		17,655			—			17,655
Provisions for guarantees		20,298			—			20,298
Losses (gains) from valuation on derivative financial instruments		138,401			(13,485	)		124,916
Present value discount		6,763			(2,380	)		4,383
Losses (gains) from fair value hedged item		—			(25,873	)		(25,873	)
Accrued interest		—			(113,152	)		(113,152	)
Deferred loan origination fees and costs		506			(194,848	)		(194,342	)
Advanced depreciation provision		—			(1,703	)		(1,703	)
Gains from revaluation		648			(330,548	)		(329,900	)
Investments in subsidiaries and others		33,589			(78,586	)		(44,997	)
Losses (gains) on valuation of security investment		76,558			(181,638	)		(105,080	)
Defined benefit liabilities		494,572			—			494,572
Accrued expenses		272,190			—			272,190
Retirement insurance expense		17,559			(444,244	)		(426,685	)
Adjustments to the prepaid contributions		—			(19,033	)		(19,033	)
Derivative-linked securities		3,762			(74,765	)		(71,003	)
Others		360,754			(568,357	)		(207,603	)
		1,562,333			(2,050,709	)		(488,376	)
Offsetting of deferred income tax assets and liabilities		(1,558,175	)		1,558,175			—
	W	4,158		W	(492,534	)	W	(488,376	)

16. Assets Held for Sale

Details of assets held for sale as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Acquisition cost1		Accumulated impairment			Carrying amount		Fair value less costs to sell
Land held for sale	W	11,326	W	(1,942	)	W	9,384	W	13,336
Buildings held for sale		6,524		(2,824	)		3,700		3,756
	W	17,850	W	(4,766	)	W	13,084	W	17,092
(In millions of Korean won)	December 31, 2018
	Acquisition cost1		Accumulated impairment			Carrying amount		Fair value less costs to sell
Land held for sale	W	16,048	W	(3,442	)	W	12,606	W	16,552
Buildings held for sale		9,054		(4,708	)		4,346		4,403
	W	25,102	W	(8,150	)	W	16,952	W	20,955

¹ Acquisition cost of buildings held for sale is net of accumulated depreciation.

98

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

17. Other Assets

Details of other assets as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019			December 31, 2018
Other financial assets
Other receivables	W	11,322,738		W	4,708,910
Accrued income		1,843,762			1,724,328
Guarantee deposits		1,156,670			1,182,686
Domestic exchange settlement debits		734,271			504,899
Others		128,819			125,380
Allowances		(115,297	)		(106,275	)
Present value discount		(7,064	)		(6,372	)
		15,063,899			8,133,556
Othernon-financial assets
Other receivables		34,028			4,965
Prepaid expenses		213,049			205,394
Guarantee deposits		4,138			4,529
Insurance assets		1,548,856			1,362,877
Separate account assets		5,487,467			4,715,414
Others		1,759,373			1,347,580
Allowances		(23,880	)		(24,780	)
		9,023,031			7,615,979
	W	24,086,930		W	15,749,535

Changes in allowances on other assets for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
	Other financial assets			Other non- financial assets			Total
Beginning	W	106,275		W	24,780		W	131,055
Written-off		(3,628	)		(48	)		(3,676	)
Provision (Reversal)		12,780			(852	)		11,928
Others		(130	)		—			(130	)
Ending	W	115,297		W	23,880		W	139,177
(In millions of Korean won)	2018
	Other financial assets			Othernon- financial assets			Total
Beginning1	W	109,899		W	32,018		W	141,917
Written-off		(35,696	)		(565	)		(36,261	)
Provision (Reversal)		23,995			(2,354	)		21,641
Others		631			—			631
Ending	W	98,829		W	29,099		W	127,928

¹  Beginning balance has been restated in accordance with Korean IFRS 1109.

99

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

18. Financial liabilities at fair value through profit or loss

Details of financial liabilities at fair value through profit or loss, and financial liabilities designated at fair value through profit or loss as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
Financial liabilities at fair value through profit or loss
Securities sold	W	3,072,303
Other		79,424
		3,151,727
Financial liabilities designated at fair value through profit or loss
Derivative-linked securities		14,130,913
Total financial liabilities at fair value through profit or loss	W	17,282,640
(In millions of Korean won)	December 31, 2018
Financial liabilities at fair value through profit or loss
Securities sold	W	2,745,906
Other		77,914
		2,823,820
Financial liabilities designated at fair value through profit or loss
Derivative-linked securities		12,503,039
Total financial liabilities at fair value through profit or loss	W	15,326,859

The difference between the carrying amount and contractual cash flow amount of financial liabilities designated at fair value through profit or loss as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019			December 31, 2018
Contractual cash flow amount	W	13,887,450		W	12,329,525
Carrying amount		14,130,913			12,503,039
Difference	W	(243,463	)	W	(173,514	)

100

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

19. Deposits

Details of deposits as at June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019			December 31, 2018
Demand deposits
Demand deposits in Korean won	W	119,983,229		W	115,602,691
Demand deposits in foreign currencies		7,279,412			6,887,280
		127,262,641			122,489,971
Time deposits
Time deposits in Korean won		148,805,730			145,336,136
		148,805,730			145,336,136
Time deposits in foreign currencies		6,332,687			5,501,887
Fair value adjustments on valuation of fair value hedged items		(30,124	)		(89,264	)
		6,302,563			5,412,623
		155,108,293			150,748,759
Certificates of deposits		6,052,363			3,531,719
Total deposits	W	288,423,297		W	276,770,449

101

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

20. Debts

Details of debts as at June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019		December 31, 2018
Borrowings	W	21,021,738	W	19,969,328
Repurchase agreements and others		8,527,183		11,954,491
Call money		670,100		1,081,015
	W	30,219,021	W	33,004,834

Details of borrowings as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)		Lender	Annual interest rate (%)	June 30, 2019		December 31, 2018
Borrowings in Korean won	Borrowings from the Bank of Korea	Bank of Korea	0.50 ~ 0.75	W	1,809,267	W	1,672,714
	Borrowings from the government	SEMAS and others	0.00 ~ 3.00		1,763,269		1,745,940
	Borrowings from banks	Shinhan Bank and others	2.86 ~ 3.80		11,900		100,100
	Borrowings fromnon-banking financial institutions	Korea Securities Finance Corporation and others	0.20 ~ 5.00		1,688,814		1,852,953
	Other borrowings	The Korea Development Bank and others	0.00 ~ 5.30		6,453,881		5,033,768
					11,727,131		10,405,475
Borrowings in foreign currencies	Due to banks	ING BANK N.V. SINGAPORE BRANCH and others	—		2,192		13,353
	Borrowings from banks	Central Bank of Uzbekistan and others	0.00 ~ 8.25		6,983,580		7,521,197
	Borrowings from other financial institutions	The Export-Import Bank of Korea and others	2.66 ~ 3.60		18,565		18,725
	Other borrowings	Standard Chartered Bank and others	0.00 ~ 2.80		2,290,270		2,010,578
					9,294,607		9,563,853
				W	21,021,738	W	19,969,328

102

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

21. Debentures

Details of debentures as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	Annual interest rate (%)		June 30, 2019			December 31, 2018
Debentures in Korean won
Structured debentures		1.91 ~ 5.86	W	1,604,400		W	1,296,860
Subordinated fixed rate debentures		2.96 ~ 4.35		3,387,610			3,437,729
Fixed rate debentures		1.38 ~ 3.79		38,686,814			42,203,545
Floating rate debentures		1.59 ~ 1.95		1,210,000			1,650,000
				44,888,824			48,588,134
Fair value adjustments on fair value hedged debentures in Korean won				22,128			19,252
Less: Discount on debentures in Korean won				(33,041	)		(33,445	)
				44,877,911			48,573,941
Debentures in foreign currencies
Floating rate debentures		0.01 ~ 3.40		2,316,401			1,791,868
Fixed rate debentures		1.63 ~ 4.50		3,638,834			2,951,251
				5,955,235			4,743,119
Fair value adjustments on fair value hedged debentures in foreign currencies				34,981			(24,073	)
Less: Discount on debentures in foreign currencies				(17,124	)		(14,290	)
				5,973,092			4,704,756
			W	50,851,003		W	53,278,697

Changes in debentures based on face value for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
	Beginning		Issues		Repayments			Others		Ending
Debentures in Korean won
Structured debentures	W	1,296,860	W	1,570,460	W	(1,262,920	)	W	—	W	1,604,400
Subordinated fixed rate debentures		3,437,729		—		(50,119	)		—		3,387,610
Fixed rate debentures		42,203,545		44,634,400		(48,151,131	)		—		38,686,814
Floating rate debentures		1,650,000		50,000		(490,000	)		—		1,210,000
		48,588,134		46,254,860		(49,954,170	)		—		44,888,824
Debentures in foreign currencies
Floating rate debentures		1,791,868		462,720		—			61,813		2,316,401
Fixed rate debentures		2,951,251		565,834		(3,060	)		124,809		3,638,834
		4,743,119		1,028,554		(3,060	)		186,622		5,955,235
	W	53,331,253	W	47,283,414	W	(49,957,230	)	W	186,622	W	50,844,059

103

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	2018
	Beginning		Issues		Repayments			Others		Ending
Debentures in Korean won
Structured debentures	W	869,294	W	748,268	W	(833,764	)	W	—	W	783,798
Subordinated fixed rate debentures		2,913,411		300,000		(14,255	)		—		3,199,156
Fixed rate debentures		36,823,365		64,549,700		(61,536,700	)		—		39,836,365
Floating rate debentures		728,000		780,000		—			—		1,508,000
		41,334,070		66,377,968		(62,384,719	)		—		45,327,319
Debentures in foreign currencies
Floating rate debentures		1,371,392		531,770		(271,110	)		84,149		1,716,201
Fixed rate debentures		2,363,486		—		—			105,862		2,469,348
		3,734,878		531,770		(271,110	)		190,011		4,185,549
	W	45,068,948	W	66,909,738	W	(62,655,829	)	W	190,011	W	49,512,868

22. Provisions

Details of provisions as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019		December 31, 2018
Provisions for unused loan commitments	W	207,761	W	210,677
Provisions for payment guarantees		84,448		75,175
Provisions for financial guarantee contracts		6,389		4,275
Provisions for restoration cost		110,831		108,000
Others		127,385		127,732
	W	536,814	W	525,859

104

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Changes in provisions for unused loan commitments and payment guarantees for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)
	2019
	Provisions for unused loan commitments									Provisions for payment guarantees
	12-month expected credit losses			Lifetime expected credit losses						12-month expected credit losses			Lifetime expected credit losses
				Non- impaired			Impaired						Non- impaired			Impaired
Beginning	W	132,876		W	68,920		W	8,881		W	27,084		W	30,109		W	17,982
Transfer between stages
Transfer to12-month expected credit losses		21,801			(20,704	)		(1,097	)		343			(343	)		—
Transfer to lifetime expected credit losses		(8,285	)		8,500			(215	)		(902	)		986			(84	)
Impairment		(282	)		(1,235	)		1,517			(24	)		(280	)		304
Provision (reversal) for credit losses		(13,656	)		12,301			(2,145	)		1,179			13,916			(6,753	)
Others (change of exchange rate, etc.)		389			195			—			375			398			158
Ending	W	132,843		W	67,977		W	6,941		W	28,055		W	44,786		W	11,607
(In millions of Korean won)
	2018
	Provisions for unused loan commitments									Provisions for payment guarantees
	12-month expected credit losses			Lifetime expected credit losses						12-month expected credit losses			Lifetime expected credit losses
				Non- impaired			Impaired						Non- impaired			Impaired
Beginning1	W	124,486		W	63,407		W	7,746		W	41,637		W	39,628		W	18,744
Transfer between stages
Transfer to12-month expected credit losses		20,260			(18,937	)		(1,323	)		431			(431	)		—
Transfer to lifetime expected credit losses		(6,816	)		7,040			(224	)		(261	)		403			(142	)
Impairment		(310	)		(882	)		1,192			(6	)		(45	)		51
Provision (reversal) for credit losses		(15,266	)		8,580			(218	)		(8,465	)		(7,413	)		4,086
Others (change of exchange rate, etc.)		418			127			—			1,092			461			228
Ending	W	122,772		W	59,335		W	7,173		W	34,428		W	32,603		W	22,967

¹  Restated in accordance with Korean IFRS 1109.

105

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Changes in provisions for financial guarantee contracts for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019			2018
Beginning1	W	4,275		W	4,857
Provision (reversal)		2,191			209
Others		(77	)		—
Ending	W	6,389		W	5,066

¹  The beginning balance for 2018 has been restated in accordance with Korean IFRS 1109.

Changes in provisions for restoration cost for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019			2018
Beginning	W	108,000		W	95,194
Provision		2,711			4,773
Reversal		(571	)		(529	)
Used		(337	)		(1,748	)
Unwinding of discount		1,028			1,437
Ending	W	110,831		W	99,127

Provisions for restoration cost are the present value of estimated costs to be incurred for the restoration of the leased properties. Actual expenses are expected to be incurred at the end of each lease contract. Three-year historical data of expired leases were used to estimate the average lease period. Also, the average restoration expense based on actual three-year historical data and the three-year historical average inflation rate were used to estimate the present value of estimated costs.

Changes in other provisions for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)
	2019
	Membership rewards program			Dormant accounts			Litigations			Others1			Total
Beginning	W	12,654		W	4,377		W	21,190		W	89,511		W	127,732
Increase		25,590			807			8,504			21,850			56,751
Decrease		(25,256	)		(1,277	)		(3,820	)		(26,745	)		(57,098	)
Ending	W	12,988		W	3,907		W	25,874		W	84,616		W	127,385

¹  As of June 30, 2019, the Group’s provision on incomplete sales on cardssurance areW 24,847 million.

106

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)
	2018
	Membership rewards program			Dormant accounts			Litigations			Greenhouse gas emission liabilities		Others1			Total
Beginning	W	15,112		W	5,050		W	23,763		W	177	W	159,044		W	203,146
Increase		24,450			1,530			2,451			40		6,690			35,161
Decrease		(26,366	)		(1,715	)		(1,636	)		—		(56,121	)		(85,838	)
Ending	W	13,196		W	4,865		W	24,578		W	217	W	109,613		W	152,469

¹  As of June 30, 2018, the Group’s provision on incomplete sales on cardssurance areW 26,367 million.

23. Net Defined Benefit Liabilities

Defined benefit plan

The Group operates defined benefit plans which have the following characteristics:

• The Group has the obligation to pay the agreed benefits to all its current and former employees.

• Actuarial risk (that benefits will cost more than expected) and investment risk fall, in substance, on the Group.

The defined benefit liability recognized in the statements of financial position is calculated by independent actuaries in accordance with actuarial valuation methods.

The net defined benefit obligation is calculated using the Projected Unit Credit method (the ‘PUC’). Data used in the PUC such as interest rates, future salary increase rate, mortality rate and consumer price index are based on observable market data and historical data which are updated annually.

Actuarial assumptions may differ from actual results, due to changes in the market, economic trends and mortality trends which may impact defined benefit liabilities and future payments. Actuarial gains and losses arising from changes in actuarial assumptions are recognized in the period incurred through other comprehensive income.

107

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Changes in the net defined benefit liabilities for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
	Present value of defined benefit obligation			Fair value of plan assets			Net defined benefit liabilities
Beginning	W	2,172,260		W	(1,910,047	)	W	262,213
Current service cost		113,054			—			113,054
Interest expense (income)		24,397			(21,623	)		2,774
Remeasurements:
Return on plan assets (excluding amounts included in interest income)		—			6,535			6,535
Contributions		—			(21,783	)		(21,783	)
Payments from plans (benefit payments)		(117,433	)		117,425			(8	)
Payments from the Group		(24,469	)		—			(24,469	)
Transfer in		6,522			(6,522	)		—
Transfer out		(6,519	)		6,519			—
Effect of exchange rate changes		3			—			3
Others		(80	)		—			(80	)
Ending	W	2,167,735		W	(1,829,496	)	W	338,239
(In millions of Korean won)	2018
	Present value of defined benefit obligation			Fair value of plan assets			Net defined benefit liabilities
Beginning	W	1,841,991		W	(1,688,183	)	W	153,808
Current service cost		104,131			—			104,131
Past service cost		3,628			—			3,628
Interest expense (income)		25,755			(23,843	)		1,912
Remeasurements:
Actuarial gains and losses by changes in financial assumptions		(8,375	)		—			(8,375	)
Actuarial gains and losses by experience adjustments		(370	)		—			(370	)
Return on plan assets (excluding amounts included in interest income)		—			12,919			12,919
Contributions		—			(40,517	)		(40,517	)
Payments from plans (benefit payments)		(71,676	)		71,670			(6	)
Payments from the Group		(22,876	)		—			(22,876	)
Transfer in		6,440			(6,440	)		—
Transfer out		(6,440	)		6,440			—
Effect of exchange rate changes		17			—			17
Others		6,089			—			6,089
Ending	W	1,878,314		W	(1,667,954	)	W	210,360

108

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Details of the net defined benefit liabilities as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019			December 31, 2018
Present value of defined benefit obligation	W	2,167,735		W	2,172,260
Fair value of plan assets		(1,829,496	)		(1,910,047	)
Net defined benefit liabilities	W	338,239		W	262,213

Details of post-employment benefits recognized in profit or loss as employee compensation and benefits for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019		2018
Current service cost	W	113,054	W	104,131
Past service cost		—		3,628
Net interest expenses of net defined benefit liabilities		2,774		1,912
Post-employment benefits1	W	115,828	W	109,671

¹  Including post-employment benefits amounting toW 1,139 million recognized as other operating expense and post-employment benefits ofW 60 million recognized as prepayment as of and for thesix-month period ended June 30, 2019, and post-employment benefits amounting toW 957 million recognized as other operating expense, and post-employment benefits ofW 30 million recognized as prepayment as of and for thesix-month period ended June 30, 2018.

109

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

24. Other Liabilities

Details of other liabilities as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019		December 31, 2018
Other financial liabilities
Other payables	W	14,368,228	W	7,910,887
Prepaid card and debit card		26,563		25,831
Accrued expenses		3,173,967		2,986,210
Financial guarantee liabilities		40,795		43,395
Deposits for letter of guarantees and others		768,880		685,451
Domestic exchange settlement credits		2,514,937		1,689,908
Foreign exchanges settlement credits		209,446		102,187
Borrowings from other business accounts		1,124		13,166
Other payables from trust accounts		5,186,381		5,285,108
Liability incurred from agency relationships		471,528		605,076
Account for agency businesses		263,490		460,949
Dividend payables		520		2,019
Lease liability		573,617		—
Others		7,456		18,120
		27,606,932		19,828,307
Othernon-financial liabilities
Other payables		79,423		319,267
Unearned revenue		419,759		378,792
Accrued expenses		597,183		744,863
Deferred revenue on credit card points		199,802		187,459
Withholding taxes		107,040		137,236
Separate account liabilities		5,490,982		5,401,192
Others		177,996		203,880
		7,072,185		7,372,689
	W	34,679,117	W	27,200,996

110

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

25. Equity

25.1 Share Capital

Details of share capital and number of issued shares of the Parent Company as of June 30, 2019 and December 31, 2018, are as follows:

	June 30, 2019		December 31, 2018
Type of share	Ordinary share		Ordinary share
Number of authorized shares		1,000,000,000		1,000,000,000
Par value per share	W	5,000	W	5,000
Number of issued shares		418,111,537		418,111,537
Share capital1	W	2,090,558	W	2,090,558

¹  In millions of Korean won.

Changes in outstanding shares for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In number of shares)	2019			2018
Beginning		395,551,297			399,037,583
Increase		—			—
Decrease		(5,916,962	)		(2,803,909	)
Ending		389,634,335			396,233,674

25.2 Hybrid Securities

Details of hybrid securities classified as equity as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	Issuance date		Maturity		Interest rate (%)		June 30, 2019		December 31, 2018
The1-1st Hybrid securities		May 2, 2019		Perpetual bond		3.23	W	349,204	W	—
The1-2nd Hybrid securities		May 2, 2019		Perpetual bond		3.44		49,881		—
							W	399,085	W	—

The above hybrid securities may be redeemed by the Group after 5 or 10 years from the issuance date.

25.3 Capital Surplus

Details of capital surplus as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019			December 31, 2018
Share premium	W	13,190,274		W	13,190,274
Loss on sales of treasury shares		(481,332	)		(481,332	)
Other capital surplus		4,414,396			4,412,718
	W	17,123,338		W	17,121,660

111

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

25.4 Accumulated Other Comprehensive Income

Details of accumulated other comprehensive income as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019			December 31, 2018
Remeasurements of net defined benefit liabilities	W	(239,139	)	W	(234,401	)
Exchange differences on translating foreign operations		49,154			(5,784	)
Financial assets measured at fair value through other comprehensive income		588,144			450,694
Shares of other comprehensive income of associates and joint ventures		1,558			(4,377	)
Cash flow hedges		(32,509	)		5,849
Hedges of net investments in foreign operations		(41,118	)		(33,092	)
Other comprehensive income of separate account		47,087			15,017
Profit or loss from credit risk of financial liabilities designated at fair value		(30,884	)		(8,954	)
Net overlay adjustments		134,130			(7,146	)
	W	476,423		W	177,806

25.5 Retained Earnings

Details of retained earnings as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019		December 31, 2018
Legal reserves1	W	482,806	W	390,216
Voluntary reserves		982,000		982,000
Unappropriated retained earnings		16,874,193		15,910,225
	W	18,338,999	W	17,282,441

¹ With respect to the allocation of net profit earned in a fiscal term, the Parent Company must set aside in its legal reserve an amount equal to at least 10% of its net income after tax as reported in the separate statement of comprehensive income each time it pays dividends on its net profits earned until its legal reserve reaches at least the aggregate amount of its share capital in accordance with Article 53 of the Financial Holding Company Act. The reserve is not available for the payment of cash dividends, but may be transferred to share capital, or used to reduce accumulated deficit.

112

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Regulatory reserve for credit losses

Measurement and disclosure of regulatory reserve for credit losses are required in accordance with Articles 26 through 28 of Supervisory Regulations on Financial Holding Companies.

Details of the regulatory reserve for credit losses as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019		December 31, 2018
Regulatory reserve for credit losses attributable to:
Shareholders of the Parent Company	W	3,262,646	W	3,130,765
Non-controlling interests		1,582		1,354
	W	3,264,228	W	3,132,119

The adjustments to the regulatory reserve for credit losses for the three-month andsix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won, except earnings per share)	2019				2018
	Three months		Six months		Three months		Six months
Provision(Reversal) of regulatory reserve for credit losses1	W	96,227	W	131,881	W	91,184	W	212,390
Adjusted profit after provision of regulatory reserve for credit losses2		894,965		1,704,963		855,567		1,702,593
Adjusted basic earnings per share after provision of regulatory reserve for credit losses2		2,259		4,342		2,159		4,291
Adjusted diluted earnings per share after provision of regulatory reserve for credit losses2		2,247		4,313		2,144		4,264

¹  The amount expected to be appropriated for the three-month andsix-month periods ended June 30, 2018 is the amount required to reserve for credit losses, calculated based on the beginning balance of regulatory reserve for credit losses (including unearned reserves) that reflects the effect of adoption of Korean IFRS 1109 retrospectively.

²  Adjusted profit after provision of regulatory reserve for credit losses is not based on Korean IFRS; this is calculated reflecting provision (reversal) of the reserve before tax to the net profit to shareholders of the Parent Company.

113

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

25.6 Treasury Shares

Changes in treasury shares outstanding for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In number of shares and millions of Korean won)	2019
	Beginning			Acquisition			Disposal		Ending
Number of treasury shares		22,560,240			5,916,962			—		28,477,202
Carrying amount	W	(968,549	)	W	(267,639	)	W	—	W	(1,236,188	)
(In number of shares and millions of Korean won)	2018
	Beginning			Acquisition			Disposal		Ending
Number of treasury shares		19,073,954			2,803,909			—		21,877,863
Carrying amount	W	(755,973	)	W	(180,221	)	W	—	W	(936,194	)

114

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

26. Net Interest Income

Details of interest income and interest expense for the three-month andsix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
	Three months		Six months
Interest income
Deposits at fair value through profit or loss	W	1,342	W	3,609
Securities measured at fair value through profit or loss		168,563		340,941
Loans measured at fair value through profit or loss		14,178		22,302
Securities measured at fair value through other comprehensive income		196,021		384,789
Loans measured at fair value through other comprehensive income		3,979		7,445
Deposits at amortized cost		40,296		71,493
Securities at amortized cost		153,055		300,579
Loans at amortized cost		3,080,193		6,137,946
Other		36,319		71,285
		3,693,946		7,340,389
Interest expenses
Deposits		895,638		1,787,073
Debts		153,481		305,442
Debentures		314,639		633,711
Other		33,087		64,996
		1,396,845		2,791,222
Net interest income	W	2,297,101	W	4,549,167

115

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	2018
	Three months		Six months
Interest income
Deposits at fair value through profit or loss	W	2,247	W	4,710
Securities measured at fair value through profit or loss		172,778		330,171
Loans measured at fair value through profit or loss		6,234		11,275
Securities measured at fair value through other comprehensive income		175,169		349,793
Deposits at amortized cost		28,026		52,948
Securities at amortized cost		153,870		297,922
Loans at amortized cost		2,794,815		5,454,020
Other		30,108		57,175
		3,363,247		6,558,014
Interest expenses
Deposits		736,417		1,392,091
Debts		125,738		239,790
Debentures		279,974		538,911
Other		24,749		47,067
		1,166,878		2,217,859
Net interest income	W	2,196,369	W	4,340,155

116

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

27. Net Fee and Commission Income

Details of fee and commission income, and fee and commission expense for the three-month andsix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019				2018
	Three months		Six months		Three months		Six months
Fee and commission income
Banking activity fees	W	54,698	W	107,470	W	51,681	W	102,652
Lending activity fees		19,537		39,792		18,028		37,519
Credit card and debit card related fees and commissions1		311,084		631,089		330,674		649,102
Agent activity fees		43,864		81,293		34,680		67,874
Trust and other fiduciary fees		112,953		203,610		107,986		232,611
Fund management related fees		39,559		78,399		32,735		64,577
Guarantee fees		12,935		24,483		10,288		19,639
Foreign currency related fees		40,120		67,143		29,086		63,119
Commissions from transfer agent services		38,258		73,082		42,285		100,148
Other business account commission on consignment		8,444		19,530		8,996		19,772
Commissions received on securities business		112,086		211,949		158,066		313,566
Lease fees		106,171		199,389		56,102		99,852
Other		66,056		140,247		78,782		158,456
		965,765		1,877,476		959,389		1,928,887
Fee and commission expense
Trading activity related fees2		7,259		13,939		9,485		17,051
Lending activity fees		10,142		11,591		6,287		10,292
Credit card and debit card related fees and commissions1		224,027		443,467		224,784		430,968
Outsourcing related fees		49,506		90,085		39,572		76,295
Foreign currency related fees		10,979		20,082		6,942		21,689
Other		78,821		162,634		76,532		147,883
		380,734		741,798		363,602		704,178
Net fee and commission income	W	585,031	W	1,135,678	W	595,787	W	1,224,709

¹ The amount for the three-month andsix-month periods ended June 30, 2018 has been restated by deducting the amount of service expenses provided to the members from credit card and debit card related fee income and expense in accordance withK-IFRS No. 1115, ‘Revenue from contracts with customers’.

² The fees from financial assets/liabilities at fair value through profit or loss.

117

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

28. Net Gains or Losses on Financial Assets/Liabilities at Fair Value through Profit or Loss

28.1 Net Gains or Losses on Financial Instruments at Fair Value through Profit or Loss

Net gain or loss from financial instruments at fair value through profit or loss includes dividend income, gains or losses arising from changes in the fair values, sales and redemptions. Details of net gain or loss from financial instruments at fair value through profit or loss for the three-month andsix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
	Three months		Six months
Revenue from financial instruments at fair value through profit or loss
Financial assets at fair value through profit or loss
Debt securities	W	478,282	W	1,015,281
Equity securities		70,170		203,703
		548,452		1,218,984
Derivatives held for trading
Interest rate		1,046,732		1,909,494
Currency		1,775,213		3,102,286
Stock or stock index		406,063		1,404,427
Credit		5,399		24,558
Commodity		4,733		11,274
Other		60,531		157,940
		3,298,671		6,609,979
Financial liabilities at fair value through profit or loss		12,359		28,606
Other financial instruments		51		70
	W	3,859,533	W	7,857,639
Expense from financial instruments at fair value through profit or loss
Financial assets at fair value through profit or loss
Debt securities	W	92,787	W	187,728
Equity securities		98,267		179,322
		191,054		367,050
Derivatives held for trading
Interest rate		1,111,943		1,995,888
Currency		1,741,697		3,053,844
Stock or stock index		328,400		842,199
Credit		5,218		25,270
Commodity		2,245		6,218
Other		28,436		46,020
		3,217,939		5,969,439
Financial liabilities at fair value through profit or loss		28,153		79,703
Other financial instruments		23		23
		3,437,169		6,416,215
Net gains or losses on financial instruments held for trading	W	422,364	W	1,441,424

118

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	2018
	Three months		Six months
Revenue from financial instruments at fair value through profit or loss
Financial assets at fair value through profit or loss
Debt securities	W	254,109	W	784,246
Equity securities		120,414		279,834
		374,523		1,064,080
Derivatives held for trading
Interest rate		291,798		857,359
Currency		2,031,711		2,713,516
Stock or stock index		382,675		742,875
Credit		10,651		22,219
Commodity		2,244		4,149
Other		29,296		54,299
		2,748,375		4,394,417
Financial liabilities at fair value through profit or loss		31,662		72,165
Other financial instruments		1		2
	W	3,154,561	W	5,530,664
Expense from financial instruments at fair value through profit or loss
Financial assets at fair value through profit or loss
Debt securities	W	149,065	W	438,495
Equity securities		114,325		264,421
		263,390		702,916
Derivatives held for trading
Interest rate		344,553		914,642
Currency		1,876,133		2,581,571
Stock or stock index		235,948		833,268
Credit		9,691		20,671
Commodity		2,915		5,321
Other		17,619		62,618
		2,486,859		4,418,091
Financial liabilities at fair value through profit or loss		15,476		46,673
Other financial instruments		8		30
		2,765,733		5,167,710
Net gains or losses on financial instruments held for trading	W	388,828	W	362,954

119

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

28.2 Net Gains or Losses on Financial Instruments Designated at Fair Value through Profit or Loss

Net gain or loss from financial instruments designated at fair value through profit or loss includes interest income, dividend income and gains or losses arising from changes in the fair values, sales and redemptions. Details of net gain or loss from financial instruments designated at fair value through profit or loss for the three-month andsix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
	Three months			Six months
Revenue from financial instruments designated at fair value through profit or loss
Financial liabilities designated at fair value through profit or loss	W	134,854		W	222,274
		134,854			222,274
Expense from financial instruments designated at fair value through profit or loss
Financial assets designated at fair value through profit or loss	W	427,805		W	1,334,613
Financial liabilities designated at fair value through profit or loss		427,805			1,334,613
Net gains or losses on financial instruments designated at fair value through profit or loss	W	(292,951	)	W	(1,112,339	)
(In millions of Korean won)	2018
	Three months			Six months
Revenue from financial instruments designated at fair value through profit or loss
Financial liabilities designated at fair value through profit or loss	W	58,638		W	312,121
		58,638			312,121
Expense from financial instruments designated at fair value through profit or loss
Financial assets designated at fair value through profit or loss	W	4,905		W	4,905
Financial liabilities designated at fair value through profit or loss		301,442			453,452
		306,347			458,357
Net gains or losses on financial instruments designated at fair value through profit or loss	W	(247,709	)	W	(146,236	)

120

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

29. Other Operating Income and Expenses

Details of other operating income and expenses for the three-month andsix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
	Three months			Six months
Other operating income
Revenue related to financial assets measured at fair value through other comprehensive income
Gain on redemption of financial assets measured at fair value through other comprehensive income	W	46		W	50
Gain on sale of financial assets measured at fair value through other comprehensive income		48,530			97,427
		48,576			97,477
Financial assets at amortized cost
Gain on sale of loans at amortized cost		25,296			41,258
		25,296			41,258
Gain on foreign exchange transactions		695,664			1,033,305
Dividend income		4,614			45,152
Others		133,582			256,381
		907,732			1,473,573
Other operating expenses
Expenses related to financial assets measured at fair value through other comprehensive income
Losses on sale of financial assets measured at fair value through other comprehensive income		85			542
		85			542
Financial assets at amortized cost
Loss on sale of loans at amortized cost		2,464			3,390
		2,464			3,390
Loss on foreign exchanges transactions		638,372			920,606
Others		500,994			1,029,546
		1,141,915			1,954,084
Net other operating expenses	W	(234,183	)	W	(480,511	)

121

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	2018
	Three months			Six months
Other operating income
Revenue related to financial assets measured at fair value through other comprehensive income
Gain on redemption of financial assets measured at fair value through other comprehensive income	W	54		W	62
Gain on sale of financial assets measured at fair value through other comprehensive income		27,834			34,208
		27,888			34,270
Financial assets at amortized cost
Gain on sale of loans at amortized cost		17,094			29,015
		17,094			29,015
Gain on foreign exchange transactions		568,980			837,609
Dividend income		37,205			69,414
Others		168,401			287,896
		819,568			1,258,204
Other operating expenses
Expenses related to financial assets measured at fair value through other comprehensive income
Losses on redemption of financial assets measured at fair value through other comprehensive income		—			17
Losses on sale of financial assets measured at fair value through other comprehensive income		6,149			8,840
		6,149			8,857
Financial assets at amortized cost
Loss on sale of loans at amortized cost		1,500			3,484
		1,500			3,484
Loss on foreign exchanges transactions		628,618			836,722
Others		496,135			935,526
		1,132,402			1,784,589
Net other operating expenses	W	(312,834	)	W	(526,385	)

122

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

30. General and Administrative Expenses

30.1 General and Administrative Expenses

Details of general and administrative expenses for the three-month andsix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019				2018
	Three months		Six months		Three months			Six months
Employee Benefits
Salaries and short-term employee benefits—salaries	W	654,243	W	1,241,526	W	579,487		W	1,164,716
Salaries and short-term employee benefits—others		182,797		485,026		224,693			505,505
Post-employment benefits—defined benefit plans		57,459		114,629		52,678			108,684
Post-employment benefits—defined contribution plans		6,642		13,003		4,657			9,891
Termination benefits		280		45,123		1,270			5,069
Share-based payments		17,915		13,327		(1,258	)		1,816
		919,336		1,912,634		861,527			1,795,681
Depreciation and amortization		185,704		363,094		91,240			177,703
Other general and administrative expenses
Rental expense		26,243		54,462		87,703			172,089
Tax and dues		67,879		129,379		60,700			114,231
Communication		12,291		23,545		11,212			21,667
Electricity and utilities		5,637		12,694		6,402			14,842
Publication		3,543		7,422		4,065			8,114
Repairs and maintenance		5,577		10,211		5,760			10,446
Vehicle		2,978		5,243		3,132			5,762
Travel		6,047		10,857		5,001			9,328
Training		6,437		13,199		6,031			12,271
Service fees		54,272		100,687		49,759			95,671
Electronic data processing expenses		61,582		122,466		46,470			90,647
Advertising		55,936		94,979		53,013			95,870
Others		73,505		139,973		60,012			119,409
		381,927		725,117		399,260			770,347
	W	1,486,967	W	3,000,845	W	1,352,027		W	2,743,731

123

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

30.2 Share-based Payments

30.2.1 Stock grants

The Group changed the scheme of share-based payment from stock options to stock grants in November 2007. The stock grant award program is an incentive plan that sets, on grant date, the maximum amount of shares that can be awarded. Actual stock granted at the end of the vesting period is determined in accordance with achievement ofpre-specified targets over the vesting period.

Details of stock grants linked to long-term performance as of June 30, 2019, are as follows:

(In number of shares)	Grant date		Number of granted shares1		Vesting conditions2
KB Financial Group Inc.
Series 18		July. 17, 2017		7,826	Services fulfillment, Achievement of targets on the basis of market3 30~50% andnon-market performance4 50~70%
Series 19		Nov. 21, 2017		46,890	Services fulfillment, Achievement of targets on the basis of market3 35% andnon-market performance5 65%
Series 20		Jan. 01, 2018		38,826	Services fulfillment, Achievement of targets on the basis of market3 30~50% andnon-market performance4 50~70%
Series 21		Jan. 01, 2019		29,859	Services fulfillment, Achievement of targets on the basis of market3 30% andnon-market performance4 70%
Series 22		Apr. 01, 2019		3,227	Services fulfillment, Achievement of targets on the basis of market3 30% andnon-market performance4 70%
Series 23		May. 27, 2019		1,392	Services fulfillment, Achievement of targets on the basis of market3 30% andnon-market performance4 70%

124

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Deferred grant	2012	5,415	Satisfied vesting conditions in 2012
	2013	588	Satisfied vesting conditions in 2013
	2015	10,043	Satisfied vesting conditions in 2015
	2016	12,093	Satisfied vesting conditions in 2016
	2017	57,746	Satisfied vesting conditions in 2017
	2018	8,057	Satisfied vesting conditions in 2018
		221,962
Kookmin Bank
Series 72	Aug. 28, 2017	5,715	Services fulfillment, Achievement of targets on the basis of market3 30~50% andnon-market performance4 50~70%
Series 73	Nov. 21, 2017	27,786	Services fulfillment, Achievement of targets on the basis of market3 30% andnon-market performance5 70%
Series 74	Jan. 01, 2018	134,465	Services fulfillment, Achievement of targets on the basis of market3 30~50% andnon-market performance4 50~70%
Series 75	Jan. 01, 2019	234,711	Services fulfillment, Achievement of targets on the basis of market3 30~50% andnon-market performance4 50~70%
Series 76	Apr. 01, 2019	5,380	Services fulfillment, Achievement of targets on the basis of market3 30~50% andnon-market performance4 50~70%
Series 77	May. 27, 2019	5,569	Services fulfillment, Achievement of targets on the basis of market3 30~50% andnon-market performance4 50~70%
Deferred grant in 2015	—	4,756	Satisfied
Deferred grant in 2016	—	65,419	Satisfied
Deferred grant in 2017	—	106,212	Satisfied
Deferred grant in 2018	—	97,244	Satisfied
		687,257

125

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Other subsidiaries
Stock granted in 2010	—	106	Services fulfillment,
Stock granted in 2011	—	146	Achievement of targets on
Stock granted in 2012	—	420	the basis of market
Stock granted in 2013	—	1,007	10~50% andnon-market
Stock granted in 2014	—	1,223	performance, 50~90%
Stock granted in 2015	—	4,456
Stock granted in 2016	—	22,887
Stock granted in 2017	—	82,919
Stock granted in 2018	—	260,189
Stock granted in 2019	—	249,733
		623,086
		1,532,305

¹ Granted shares represent the total number of shares initially granted to directors and employees that have residual shares at the end of reporting period (Deferred grants are residual shares as of June 30, 2019).

² Executives and employees were given the option of deferred payment of the granted shares (after the date of retirement), payment ratio, and payment period. Accordingly, a certain percentage of the granted amount is deferred for up to five years after the date of retirement after the deferred grant has been confirmed.

³ Relative TSR (Total Shareholders Return): [(Fair value at the end of the contract—Fair value at the beginning of the contract) + (Total amount of dividend per share paid during the contract period)] / Fair value at the beginning of the contract)

⁴ Accomplishment of subsidiaries’ performance and accomplishment of performance results

⁵ EPS, Asset Quality, HCROI, Profit fromnon-banking segment

Details of stock grants linked to short-term performance as of June 30, 2019, are as follows:

	Grant date		Estimated number of vested shares1		Vesting conditions
KB Financial Group Inc.
Stock granted in 2010		Jan. 01, 2010		322		Satisfied
Stock granted in 2011		Jan. 01, 2011		1,728		Satisfied
Stock granted in 2012		Jan. 01, 2012		2,642		Satisfied
Stock granted in 2013		Jan. 01, 2013		474		Satisfied
Stock granted in 2015		Jan. 01, 2015		9,690		Satisfied
Stock granted in 2016		Jan. 01, 2016		11,783		Satisfied
Stock granted in 2017		Jan. 01, 2017		12,273		Satisfied
Stock granted in 2018		Jan. 01, 2018		20,664		Satisfied
Stock granted in 2019		Jan. 01, 2019		15,777		Proportional to service period
Kookmin Bank
Stock granted in 2015		Jan. 01, 2015		15,831		Satisfied
Stock granted in 2016		Jan. 01, 2016		52,855		Satisfied
Stock granted in 2017		Jan. 01, 2017		55,490		Satisfied
Stock granted in 2018		Jan. 01, 2018		109,296		Satisfied
Stock granted in 2019		Jan. 01, 2019		58,263		Proportional to service period

126

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Other subsidiaries
Stock granted in 2015	—	16,922	Satisfied
Stock granted in 2016	—	94,198	Satisfied
Stock granted in 2017	—	238,234	Satisfied
Stock granted in 2018	—	458,338	Satisfied
Stock granted in 2019	—	148,087	Proportional to service period
		1,322,867

¹ Executives and employees were given the option of deferred payment of the granted shares (after the date of retirement), payment ratio, and payment period. Accordingly, a certain percentage of the granted amount is deferred for up to five years after the date of retirement after the deferred grant has been confirmed.

As of June 30, 2019 and December 31, 2018, the accrued expenses related to share-based payments including share grants amounted toW 101,946 million andW 111,058 million, respectively. Otherwise The Group recognized the compensation costs ofW 13,327 million andW 1,816 million for thesix-month periods ended June 30, 2018 and 2019.

127

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

30.2.2 Mileage Stocks

Details of Mileage stock as of June 30, 2019, are as follows:

(in number of shares)	Grant date		Number of granted shares1		Expected exercise period (years)1		Remaining shares2
Stock granted in 2016		July 07, 2016		280		0.00~0.02		62
		Aug. 03, 2016		107		0.00~0.09		32
		Aug. 17, 2016		51		0.00~0.13		23
		Aug. 30, 2016		256		0.00~0.17		159
		Sept. 06, 2016		206		0.00~0.19		88
		Oct. 07, 2016		105		0.00~0.27		55
		Nov. 01, 2016		118		0.00~0.34		24
		Dec. 07, 2016		211		0.00~0.44		85
		Dec. 08, 2016		43		0.00~0.44		32
		Dec. 15, 2016		12		0.00~0.46		12
		Dec. 20, 2016		309		0.00~0.47		150
		Dec. 28, 2016		76		0.00~0.50		33
		Dec. 30, 2016		210		0.00~0.50		56
Stock granted in 2017		Jan. 09, 2017		28,925		0.00~0.53		12,027
		Feb. 03, 2017		43		0.00~0.60		28
		Apr. 03, 2017		82		0.00~0.76		61
		May 22, 2017		20		0.00~0.89		20
		July 03, 2017		52		0.00~1.01		52
		Aug. 07, 2017		29		0.00~1.10		19
		Aug. 08, 2017		5		0.00~1.11		2
		Aug. 16, 2017		204		0.00~1.13		156
		Aug. 17, 2017		40		0.00~1.13		24
		Aug. 24, 2017		387		0.00~1.15		294
		Sep. 08, 2017		82		0.00~1.19		73
		Nov. 01, 2017		120		0.00~1.34		103
		Nov. 06, 2017		106		0.00~1.35		106
		Dec. 06, 2017		105		0.00~1.44		89
		Dec. 26, 2017		254		0.00~1.49		180
		Dec. 29, 2017		114		0.00~1.50		90
Stock granted in 2018		Jan. 10, 2018		19,197		0.00~1.53		16,278
		Feb. 12, 2018		9		0.00~1.62		7
		Apr. 02, 2018		115		0.00~1.76		99
		Apr. 30, 2018		86		0.00~1.83		82
		May 08, 2018		170		0.00~1.85		160
		June 01, 2018		140		0.00~1.92		135
		July 02, 2018		180		0.00~2.01		175
		Aug. 07, 2018		194		0.00~2.10		194
		Aug. 09, 2018		47		0.00~2.11		47
		Aug. 14, 2018		30		0.00~2.12		30
		Aug. 16, 2018		130		0.00~2.13		126
		Sep. 07, 2018		106		0.00~2.19		106
		Oct. 04, 2018		129		0.00~2.26		120
		Nov. 01, 2018		258		0.00~2.34		258

128

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

	Nov. 06, 2018	236	0.00~2.35	232
	Dec. 03, 2018	132	0.00~2.43	132
	Dec. 04, 2018	21	0.00~2.43	21
	Dec. 07, 2018	91	0.00~2.44	91
	Dec. 12, 2018	64	0.00~2.45	57
	Dec. 18, 2018	271	0.00~2.47	271
	Dec. 19, 2018	42	0.00~2.47	42
	Dec. 31, 2018	127	0.00~2.50	127
Stock granted in 2019	Jan. 11, 2019	26,580	0.00~2.53	25,734
	Feb. 01, 2019	12	0.00~2.59	12
	Apr. 01, 2019	167	0.00~2.75	167
	Apr. 18, 2019	105	0.00~2.80	105
	Apr. 22, 2019	33	0.00~2.81	33
		81,224		58,976

¹ Mileage stock may be exercised after one year from the grant date for two years. When the mileage stock is exercised, the closing price of prior month is applied. However, in case of transfer or retirement during the vesting period, mileage stock may still be exercised at the closing price of prior month.

² The remaining shares are assessed based on the stock price as of June 30, 2019. These shares may be vested immediately at grant date.

As of June 30, 2019 and December 31, 2018, the accrued expenses for share-based payments in regards to mileage stock amounted toW 2,704 million andW 2,283 million, respectively, and the compensation costs amounting toW 1,210 million andW 1,248 million were incurred during the year ended June 30, 2019 and 2018, respectively.

129

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

31. Net OtherNon-operating Income and Expenses

Details of othernon-operating income and expenses for the three-month andsix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019				2018
	Three months		Six months		Three months			Six months
Othernon-operating income
Gain on disposal of property and equipment	W	28,418	W	28,701	W	32,896		W	32,949
Rent received		18,154		40,104		9,452			18,539
Profit on disposal ofnon-current assets held for sale		—		—		2,999			118,765
Others		26,323		52,048		14,178			22,065
		72,895		120,853		59,525			192,318
Othernon-operating expenses
Loss on disposal in property and equipment		872		4,424		657			4,771
Donation		13,843		39,893		72,437			77,651
Restoration cost		1,270		2,670		848			1,335
Management cost for special bonds		788		1,620		749			1,628
Others		8,053		21,687		10,185			24,287
		24,826		70,294		84,876			109,672
Net othernon-operating income(expenses)	W	48,069	W	50,559	W	(25,351	)	W	82,646

130

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

32. Income Tax Expense

Income tax expense for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019			2018
Tax payable
Current tax expense	W	468,166		W	625,269
Adjustments recognized in the period for current tax of prior years		(22,936	)		(39,015	)
		445,230			586,254
Changes in deferred income tax assets (liabilities)		344,240			134,025
Income tax recognized directly in equity
Remeasurements of net defined benefit liabilities		1,797			1,630
Exchange differences on translating foreign operation		(10,813	)		(13,174	)
Financial assets measured at fair value through other comprehensive income		(51,985	)		(8,734	)
Shares of other comprehensive income of associates and joint ventures		(2,242	)		824
Cash flow hedges		13,572			(7,080	)
Hedges of net investments in foreign operations		3,045			10,636
Other comprehensive income of separate account		(9,079	)		(3,277	)
Profit or loss related with credit risk change of financial liabilities designated at fair value		8,319			(1,650	)
Net overlay adjustments		(54,733	)		31,884
		(102,119	)		11,059
Tax expense	W	687,351		W	731,338

33. Dividends

The dividends to the shareholders of the Parent Company in respect of the year ended December 31, 2018, ofW 1,920 per share, amounting to total dividends ofW 759,736 million were paid in April 2019. The dividends paid to the shareholders of the Parent Company in 2018 wereW 766,728 million (W 1,920 per share).

131

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

34. Accumulated Other Comprehensive Income

Details of changes in accumulated other comprehensive income for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
	Beginning			Changes except for reclassification			Reclassification to profit or loss			Reclassification to retained earnings		Tax effect			Ending
Remeasurements of net defined benefit liabilities	W	(234,401	)	W	(6,535	)	W	—		W	—	W	1,797		W	(239,139	)
Exchange differences on translating foreign operations		(5,784	)		60,398			5,353			—		(10,813	)		49,154
OCI related with financial assets at fair value through other comprehensive income		450,694			235,453			(71,410	)		25,392		(51,985	)		588,144
OCI related with investments in associates and joint ventures		(4,377	)		8,177			—			—		(2,242	)		1,558
Cash flow hedges		5,849			(83,665	)		31,735			—		13,572			(32,509	)
Hedges of a net investment in a foreign operation		(33,092	)		(12,388	)		1,317			—		3,045			(41,118	)
OCI related with separate account assets		15,017			43,359			(2,210	)		—		(9,079	)		47,087
Profit or loss related with credit risk change of Financial liabilities designated at fair value through profit or loss		(8,954	)		(30,249	)		—			—		8,319			(30,884	)
Net overlay adjustments		(7,146	)		200,835			(4,826	)		—		(54,733	)		134,130
	W	177,806		W	415,385		W	(40,041	)	W	25,392	W	(102,119	)	W	476,423

(In millions of Korean won)	2018
	Beginning1			Changes except for reclassification			Reclassification to profit or loss			Tax effect			Ending
Remeasurements of net defined benefit liabilities	W	(96,385	)	W	(4,167	)	W	—		W	1,630		W	(98,922	)
Exchange differences on translating foreign operations		(54,700	)		86,610			—			(13,174	)		18,736
OCI related with financial assets at fair value through other comprehensive income		362,681			28,550			5,029			(8,734	)		387,526
OCI related with investments in associates and joint ventures		(644	)		(2,997	)		—			824			(2,817	)
Cash flow hedges		14,887			(33,690	)		50,158			(7,080	)		24,275
Hedges of a net investment in a foreign operation		(5,958	)		(41,305	)		—			10,636			(36,627	)
OCI related with separate account assets		(13,692	)		11,210			708			(3,277	)		(5,051	)
Profit or loss related with credit risk change of Financial liabilities designated at fair value through profit or loss		(10,438	)		5,999			—			(1,650	)		(6,089	)
Net overlay adjustments		(7,559	)		(91,996	)		(23,888	)		31,884			(91,559	)
	W	188,192		W	(41,786	)	W	32,007		W	11,059		W	189,472

¹  Restated in accordance with Korean IFRS 1109.

132

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

35. Earnings per Share

35.1 Basic Earnings Per Share

Basic earnings per share is calculated by dividing profit and loss attributable to ordinary equity holders of the Parent Company by the weighted average number of ordinary shares outstanding, excluding the treasury shares, during the three-month andsix-month periods ended June 30, 2019 and 2018.

Weighted average number of ordinary shares outstanding:

(In number of shares)	2019
	Three months			Six months
Beginning (A)		418,111,537			418,111,537
Acquisition of treasury shares (B)		(26,966,534	)		(25,457,689	)
Weighted average number of ordinary shares outstanding (A – B)		391,145,003			392,653,848
(In number of shares)	2018
	Three months			Six months
Beginning (A)		418,111,537			418,111,537
Acquisition of treasury shares (B)		(21,877,863	)		(21,288,504	)
Weighted average number of ordinary shares outstanding (A – B)		396,233,674			396,823,033

Basic earnings per share:

(In Korean won and in number of shares)	2019
	Three months		Six months
Profit attributable to ordinary shares (D)	W	991,192,030,539	W	1,836,844,408,147
Weighted average number of ordinary shares outstanding (E)		391,145,003		392,653,848
Basic earnings per share (F = D / E)	W	2,534	W	4,678
(In Korean won and in number of shares)	2018
	Three months		Six months
Profit attributable to ordinary shares (D)	W	946,750,379,140	W	1,914,982,656,407
Weighted average number of ordinary shares outstanding (E)		396,233,674		396,823,033
Basic earnings per share (F = D / E)	W	2,389	W	4,826

35.2 Diluted Earnings per Share

Diluted earnings per share is calculated using the weighted average number of ordinary shares outstanding which is adjusted by the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. The Group’s dilutive potential ordinary shares include stock grants.

133

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

A calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average market share price of the Group’s outstanding shares for the period) based on the monetary value of the subscription rights attached to the share options. The number of shares calculated above is compared with the number of shares that would have been issued assuming the exercise of stock grants.

Adjusted profit for diluted earnings per share for the three-month andsix-month periods ended June 30, 2019 and 2018, are as follows:

(In Korean won)	2019
	Three months		Six months
Profit attributable to ordinary shares	W	991,192,030,539	W	1,836,844,408,147
Adjustment		—		—
Adjusted profit for diluted earnings	W	991,192,030,539	W	1,836,844,408,147
(In Korean won)	2018
	Three months		Six months
Profit attributable to ordinary shares	W	946,750,379,140	W	1,914,982,656,407
Adjustment		—		—
Adjusted profit for diluted earnings	W	946,750,379,140	W	1,914,982,656,407

Adjusted weighted average number of ordinary shares outstanding to calculate diluted earnings per share for the three-month and thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In number of shares)	2019
	Three months		Six months
Weighted average number of ordinary shares outstanding		391,145,003		392,653,848
Adjustment
Stock grants		2,433,403		2,626,443
Adjusted weighted average number of ordinary shares outstanding for diluted earnings per share		393,578,406		395,280,291
(In number of shares)	2018
	Three months		Six months
Weighted average number of ordinary shares outstanding		396,233,674		396,823,033
Adjustment
Stock grants		2,258,465		2,473,916
Adjusted weighted average number of ordinary shares outstanding for diluted earnings per share		398,492,139		399,296,949

134

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Diluted earnings per share for the three-month and thesix-month periods ended June 30, 2019 and 2018, are as follows:

(in Korean won and in number of shares)	2019
	Three months		Six months
Adjusted profit for diluted earnings per share	W	991,192,030,539	W	1,836,844,408,147
Adjusted weighted average number of ordinary shares outstanding for diluted earnings per share		393,578,406		395,280,291
Diluted earnings per share	W	2,518	W	4,647
(In Korean won and in number of shares)	2018
	Three months		Six months
Adjusted profit for diluted earnings per share	W	946,750,379,140	W	1,914,982,656,407
Adjusted weighted average number of ordinary shares outstanding for diluted earnings per share		398,492,139		399,296,949
Diluted earnings per share	W	2,376	W	4,796

36. Insurance Contracts

36.1 Insurance Liabilities

Details of insurance liabilities as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Non-life insurance		Life insurance		Others		Total
Long-term insurance premium reserve	W	23,102,985	W	7,044,222	W	—	W	30,147,207
Reserve for outstanding claims		2,190,446		116,627		2,802		2,309,875
Unearned premium reserve		1,536,328		4,322		788		1,541,438
Reserve for participating policyholders’ dividends		102,153		28,077		—		130,230
Unallocated Divisible Surplus to Future Policyholders		51,820		5,013		—		56,833
Reserve for compensation for losses on dividend-paying insurance contracts		19,410		6,002		—		25,412
Guarantee reserve		—		15,223		—		15,223
	W	27,003,142	W	7,219,486	W	3,590	W	34,226,218

135

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	Non-life insurance		Life insurance		Others		Total
Long-term insurance premium reserve	W	22,333,503	W	7,214,765	W	—	W	29,548,268
Reserve for outstanding claims		2,152,018		89,400		3,417		2,244,835
Unearned premium reserve		1,393,570		2,199		983		1,396,752
Reserve for participating policyholders’ dividends		104,461		30,187		—		134,648
Unallocated Divisible Surplus to Future Policyholders		40,690		4,290		—		44,980
Reserve for compensation for losses on dividend-paying insurance contracts		19,410		5,644		—		25,054
Guarantee reserve		—		18,412		—		18,412
	W	26,043,652	W	7,364,897	W	4,400	W	33,412,949

36.2 Liability Adequacy Test for Insurance Contract (LAT)

Amendments to Regulations on Supervision of Insurance Business

The calculation methods of LAT were changed due to the amendments to Regulations on Supervision of Insurance Business that include the modification in the calculation of the discount rate and adjustment of the current estimates. The Group applied the change in the accounting policies since the amended regulations provide more relevant and reliable information on the current estimates of future cash flows. The comparative notes as at June 30, 2018 have been restated due to the change in the accounting policies.

Details of the major changes in the calculation methods of LAT are as follows:

Assumptions	Changes in the calculation methods
Discount rate	Risk asset investments are excluded.
	Industry spreads are gradually removed from credit spreads.
Current estimates of liabilities reserves	The weighted average of interest rate scenario is gradually applied to the current estimates of liabilities reserves.
Cash flows of insurance policy loans	Cash flows of insurance policy loans are reflected in LAT.
Disclosed interest rate of Interest rate-linked type	Credit risk spread are removed from the disclosed interest rate.

136

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Non-life Insurance

The assumptions and the basis of calculation applied in the adequacy test ofnon-life insurance liabilities as of June 30, 2019 and 2018 are as follows:

	June 30, 2019	June 30, 2018	Basis of calculation
Long-term insurance
Discount rate	1.30%~5.47%	2.51%~8.71%	Discount rate is calculated by applying risk-free rate curve plus liquidity premium presented by Financial Supervisory Service.
Insurance operating expense rate	6.43%	6.51%	Insurance operating expense rate is calculated by considering the future expense plan based on historical data for the latest one year.
Surrender rate	1.5%~31.4%	1.30%~34.80%	Surrender rate is calculated based on historical data for the latest five year
Risk premium rate	9.0%~724.0%	12.00%~633.00%	Risk premium rate is calculated by the ratio of insurance claims paid to risk premiums based on historical data for the latest five year
General insurance
Insurance operating expenses	10.74%	10.99%	Ratio of maintenance costs incurred to earned premiums by the types of contracts within a year from the base date
Claim handling expense rate	4.79%	4.81%	Ratio of claim handling expenses incurred to insurance claims paid by the type of contracts within 3 years from the base date
Insurance claim ratio	63.37%	64.63%	Ratio of insurance claims incurred to earned premiums by the type of contracts within 5 years from the base date
Vehicle insurance
Insurance operating expense rate	9.82%	10.84%	Ratio of maintenance costs incurred to earned premiums by the type of collaterals within a year from the base date
Claim handling expense rate	8.99%	9.27%	Ratio of claim handling expenses incurred to insurance claims paid by the type of collaterals within 3 years from the base date
Insurance claim ratio	77.96%	76.95%	Ratio of insurance claims incurred to earned premiums by the type of collaterals within 5 years from the base date

137

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Details of the result of the adequacy test ofnon-life insurance liabilities as of June 30, 2019 and 2018 are as follows:

(In millions of Korean won)	June 30, 2019
	Reserve for test1		LAT base		Deficit (Surplus)
General insurance	W	406,895	W	338,288	W	(68,607	)
Vehicle insurance		1,091,707		1,035,128		(56,579	)
Long-term insurance		19,132,459		8,221,652		(10,910,807	)
	W	20,631,061	W	9,595,068	W	(11,035,993	)

(In millions of Korean won)	June 30, 2018
	Reserve for test1		LAT base		Deficit (Surplus)
General insurance	W	346,058	W	290,571	W	(55,487	)
Vehicle insurance		1,018,202		968,774		(49,428	)
Long-term insurance		17,694,463		9,616,979		(8,077,484	)
	W	19,058,723	W	10,876,324	W	(8,182,399	)

¹ Long-term insurance is for premium reserves and unrecognized premium reserves; the premium reserve is the amount deducted from the unearned premiums and insurance contract loans in accordance with Article6-3 of the Insurance Supervisory Regulation.

Life insurance

The assumptions and basis of calculation applied in the adequacy test of life insurance liabilities as of June 30, 2019 and 2018 are as follows:

	June 30, 2019	June 30, 2018	Basis of calculation
Surrender rate	0%~64.95%	0.44%~60.30%	Ratio of earned premium for surrender to earned premium based on past statistics of recent 5 years by product type, payment method type, channel type and by lapse of time.
Insurance claim ratio	7%~124%	6%~118%	Ratio of the number of claims to the number of contracts based on past statistics of recent 7 years by collateral type, gender and by lapse of time.
Discount rate	(2.52)%~14.55%	(1.72)%~13.93%	Return on operating assets at each point in the future estimated by adding a risk spread to the interest rate scenario presented by Financial Supervisory Service.

Indirect insurance operating expenses are calculated by applying the unit cost determined based on historical data for the latest one year in accordance with the standard of the allocation of insurance operating expenses under Regulations on Supervision of Insurance Business. Direct insurance operating expenses including acquisition costs are the estimated expense amount to be incurred in the future in accordance with the Group’s internal regulations.

Details of the result of the adequacy test of life insurance liabilities as of June 30, 2019 and 2018 are as follows:

138

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)		June 30, 2019
		Reserve for test			LAT base			Deficit (Surplus)
Interest rate-fixed	Participating	W	30,589		W	55,560		W	24,971
	Non-participating		154,274			89,667			(64,607	)
Interest rate-linked	Participating		1,049,473			1,060,250			10,777
	Non-participating		5,406,364			5,024,568			(381,796	)
Variable life insurance			(34,886	)		(143,568	)		(108,682	)
		W	6,605,814		W	6,086,477		W	(519,337	)

(In millions of Korean won)		June 30, 2018
		Reserve for test			LAT base			Deficit (Surplus)
Interest rate-fixed	Participating	W	30,652		W	50,480		W	19,828
	Non-participating		115,432			43,526			(71,906	)
Interest rate-linked	Participating		1,102,074			1,082,242			(19,832	)
	Non-participating		5,560,253			4,914,479			(645,774	)
Variable life insurance			(28,342	)		(115,960	)		(87,618	)
		W	6,780,069		W	5,974,767		W	(805,302	)

The Group did not record the additional reserve since the surplus exceeded the deficit based on the result of LAT, resulting no additional accounting treatment as of June 30, 2019 and 2018.

139

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

36.3 Insurance Income and Expense

Insurance income and expenses for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019		2018
Insurance Income
Premium income	W	5,590,344	W	5,403,791
Reinsurance income		400,931		332,322
Separate account income		93,042		190,780
Income of change in reinsurance assets		64,873		63,513
Other insurance income		7,029		5,703
		6,156,219		5,996,109
Insurance Expense
Insurance claims paid		2,445,622		2,013,274
Dividend expense		5,008		4,916
Refunds of surrender value		1,408,309		1,473,970
Reinsurance expense		509,534		477,053
Provision of policy reserves		804,130		929,990
Separate account expenses		62,875		140,501
Insurance operating expenses		224,023		205,655
Deferred acquisition costs		340,535		299,819
Expenses of change in reinsurance assets		48		(350	)
Claim survey expenses paid		22,740		18,484
Other insurance expenses		102,817		111,778
		5,925,641		5,675,090
Net insurance income	W	230,578	W	321,019

140

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

36.4 The Overlay Approach

The Group applied “The Overlay Approach” under Korean IFRS 1104 at the initial application of Korean IFRS 1109.

Details of financial assets applied “The Overlay Approach” as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019		December 31, 2018
Financial assets at fair value through profit or loss
Due from financial institutions	W	175,958	W	172,777
Debt securities		7,679,750		7,044,081
Equity securities		59,152		81,949
	W	7,914,860	W	7,298,807

Changes of net overlay adjustments for thesix-month period ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
Beginning	W	(7,146	)
Recognization of other comprehensive income (loss) due to acquisition and valuation		144,775
Reclassfication to profit or loss due to disposal		(3,499	)
Ending	W	134,130

(In millions of Korean won)	2018
Beginning1	W	(7,559	)
Recognization of other comprehensive income (loss) due to acquisition and valuation		(66,682	)
Reclassfication to profit or loss due to disposal		(17,318	)
Ending	W	(91,559	)

¹  Calculated based on Korean IFRS 1109

²  Amounts are net of tax

141

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

37. Supplemental Cash Flow Information

Cash and cash equivalents as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019			December 31, 2018
Cash	W	2,117,719		W	2,186,035
Checks with other banks		312,769			872,167
Due from Bank of Korea		10,386,628			9,098,890
Due from other financial institutions		9,704,174			8,117,398
		22,521,290			20,274,490
Due from financial institutions at fair value through profit or loss		293,452			381,718
		22,814,742			20,656,208
Restricted cash from financial institutions		(14,857,394	)		(12,347,627	)
Due from financial institutions with original maturities over three months		(2,203,597	)		(1,665,765	)
		(17,060,991	)		(14,013,392	)
	W	5,753,751		W	6,642,816

Cash inflows and outflows from income tax, interests and dividends for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	Activity		2019		2018
Income tax paid		Operating	W	769,137	W	431,690
Interest received		Operating		7,411,777		5,942,640
Interest paid		Operating		2,606,054		1,625,640
Dividends received		Operating		140,673		116,580
Dividends paid		Financial		759,736		766,728

142

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

38. Contingent Liabilities and Commitments

Details of payment guarantees as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019		December 31, 2018
Confirmed payment guarantees
Confirmed payment guarantees in Korean won
Payment guarantees for KB purchasing loan	W	231,651	W	196,517
Other payment guarantees		702,710		597,636
		934,361		794,153
Confirmed payment guarantees in foreign currency
Acceptances of letter of credit		119,441		208,926
Letter of guarantees		56,250		53,210
Bid bond		46,417		51,528
Performance bond		582,209		604,311
Refund guarantees		693,486		592,925
Other payment guarantees in foreign currency		2,607,114		2,539,900
		4,104,917		4,050,800
Financial guarantees
Payment guarantees for mortgage		50,612		50,497
Overseas debt guarantees		278,442		311,796
International financing guarantees in foreign currencies		114,633		110,070
Other financing payment guarantees		270,000		270,000
		713,687		742,363
		5,752,965		5,587,316
Unconfirmed acceptances and guarantees
Guarantees of letter of credit		2,072,527		1,745,340
Refund guarantees		837,030		686,843
		2,909,557		2,432,183
	W	8,662,522	W	8,019,499

Commitments as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019		December 31, 2018
Commitments
Corporate loan commitments	W	37,800,640	W	37,340,727
Retail loan commitments		42,230,232		41,335,454
Credit line on credit cards		58,509,879		54,488,133
Purchase of other security investment and others		5,246,496		5,426,058
		143,787,247		138,590,372
Financial Guarantees
Credit line		2,215,748		2,447,369
Purchase of security investment		443,800		436,800
		2,659,548		2,884,169
	W	146,446,795	W	141,474,541

143

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Other Matters (including litigation)

a) The Group has filed 102 lawsuits as a plaintiff (excluding minor lawsuits in relation to the collection or management of loans), involving aggregate claims ofW 452,159 million, and faces 315 lawsuits (as a defendant) (excluding minor lawsuits in relation to the collection or management of loans) involving aggregate damages ofW 293,514 million, which arose in the normal course of the business and are still pending as of June 30, 2019.

b) Kookmin bank made a construction contract building the integrated company building, and the integrated central IT, amounting toW 151,280 million, andW 116,563 million, respectively; for the period ended June 30, 2019, the Bank has paidW 18,504 million, andW 108,195 million.

c) The face value of the securities which Kookmin Bank sold to general customers through the bank tellers amounts toW 372 million andW 372 million as of June 30, 2019 and December 31, 2018, respectively.

d) While setting up a fraud detection system, a computer contractor employed by the personal credit ratings firm Korea Credit Bureau caused a widespread data breach in June 2013, resulting in the theft of cardholders’ personal information. As a result of the leakage of customer personal information, the KB Kookmin Card received a notification from the Financial Services Commission that the KB Kookmin Card is subject to a temporarysix-month operating suspension as of February 16, 2014. In respect of the incident, the Group faces 108 and 113 legal claims filed as a defendant, with an aggregate claim ofW 5,865 million andW 6,906 million as of June 30, 2019. A provision liability ofW 8,356 million andW 9,888 million have been recognized for these pending lawsuits. In addition, the Group took out the personal information protection liability insurance, and recognized as receivables for the amount ofW 3,500 million of insurance coverage for lawsuits. On the other hand, the further appeals can be filed against the Group, however, the final outcome cannot be reasonably measured.

e) As of June 30, 2019, the Group is not able to dispose, transfer or collateralize the shares of a joint-venture lease company or the rights for those to a third party without the written consent of Kolao Holdongs for five years (the restriction period for the disposal of its equity) from the date of initial investment for KB KOLAO LEASING Co., LTD. Each party of the joint venture lease company may transfer all or part of its equity, as determined separately, after the restriction period for the disposal of its equity has expired.

f) The Group has completed the issuance of hybrid securities amounting toW 592,000 million on July 2, 2019.

144

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

39. Subsidiaries

Details of subsidiaries as of June 30, 2019, are as follows:

Investor	Investee	Ownership interests (%)			Location	Date of financial statements	Industry
KB Financial Group Inc.	Kookmin Bank		100.00%		Korea	June. 30	Banking and foreign exchange transaction
	KB Securities Co., Ltd.		100.00	%	Korea	June. 30	Financial investment
	KB Insurance Co., Ltd.		100.00	%	Korea	June. 30	Non-life insurance
	KB Kookmin Card Co., Ltd.		100.00	%	Korea	June. 30	Credit card and installment finance
	KB Asset Management Co., Ltd.		100.00	%	Korea	June. 30	Collective investment and advisory
	KB Capital Co., Ltd.		100.00	%	Korea	June. 30	Financial Leasing
	KB Life Insurance Co., Ltd.		100.00	%	Korea	June. 30	Life insurance
	KB Real Estate Trust Co., Ltd.		100.00	%	Korea	June. 30	Real estate trust management
	KB Savings Bank Co., Ltd.		100.00	%	Korea	June. 30	Savings banking
	KB Investment Co., Ltd.		100.00	%	Korea	June. 30	Capital investment
	KB Data System Co., Ltd.		100.00	%	Korea	June. 30	Software advisory, development, and supply
	KB Credit Information Co., Ltd.		100.00	%	Korea	June. 30	Collection of receivables or credit investigation

145

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Kookmin Bank	Kookmin Bank Cambodia PLC.	100.00	%	Cambodia	June. 30	Banking and foreign exchange transaction
	Kookmin Bank Int’l Ltd. (London)6	100.00	%	United Kingdom	June. 30	Banking and foreign exchange transaction
	Kookmin Bank China Ltd.	100.00	%	China	June. 30	Banking and foreign exchange transaction
	KB Microfinance Myanmer Co., Ltd.	100.00	%	Myanmar	June. 30	Other credit granting n.e.c.
	KBD Tower 1st L.L.C. and 32 others2	—		Korea	June. 30	Asset-backed securitization
	KB Haeoreum private securities investment trust 83(Bond)	99.90	%	Korea	June. 30	Capital investment
	Kiwoom Frontier Private placement fund 10[Bond]	99.85	%	Korea	June. 30	Capital investment
	Tong Yang Safe Plus Qualified Private TrustS-8	99.93	%	Korea	June. 30	Capital investment
	Mirae Asset Triumph Global Privately placed Feeder Investment Trust 1	99.90	%	Korea	June. 30	Capital investment
	NH-AMUNDI Global Private Securities Investment Trust 1USD(BOND)]	77.78	%	Korea	June. 30	Capital investment
	AIP US Red Private Real Estate Trust NO. 10	99.97	%	Korea	June. 30	Capital investment
	KB Korea Short Term Premium Private Securities 5 3	50.00%		Korea	June. 30	Capital investment

146

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

KB Securities Co., Ltd.	KBFG Securities America Inc.	100.00	%	United States of America	June. 30	Investment advisory and securities dealing activities
	KB Securities Hong Kong Ltd.	100.00	%	China	June. 30	Investment advisory and securities dealing activities
	KB SECURITIES VIETNAM JOINT STOCK COMPANY	99.70	%	Vietnam	June. 30	Investment advisory and securities dealing activities
	Able NS Co., Ltd and 70 others2	—		Korea	June. 30	Asset-backed securitization
	KB NA COMPASS Energy Private Special Asset Fund3	29.67	%	Korea	June. 30	Capital investment
	Hyundai Smart Index Alpha Securities Feeder Investment Trust No. 1	98.79	%	Korea	June. 30	Capital investment
	Hyundai Strong Korea Equity Trust No. 1	99.39	%	Korea	June. 30	Capital investment
	Hyundai Kidzania Equity Feeder Trust No. 1	79.53	%	Korea	June. 30	Capital investment
	Hyundai Value Plus Equity Feeder Trust No. 1	99.67	%	Korea	June. 30	Capital investment
	Hyundai Strong-small Corporate Trust No. 1	91.27	%	Korea	June. 30	Capital investment
	Heungkuk Highclass Private Real Estate Trust No. 21	100.00	%	Korea	June. 30	Capital investment
	JB New Jersey Private Real Estate Investment Trust No. 1	98.15	%	Korea	June. 30	Capital investment
	Heungkuk Global Highclass Private Real Estate Trust No. 23	100.00	%	Korea	June. 30	Capital investment
	Hyundai Dynamic Mix Secruticies Feeder Investment Trust No. 1	99.99	%	Korea	June. 30	Capital investment
	Hyundai Quant Long Short Securities Feeder Investment Trust No. 1	100.00	%	Korea	June. 30	Capital investment
	HyundaiKon-tiki Specialized Privately Placed Fund No. 1	91.72	%	Korea	June. 30	Capital investment
	DGB Private real estate Investment Trust No. 8	98.77	%	Korea	June. 30	Capital investment
	Aquila Global Real Assets Fund No. 1 LP	99.96	%	Cayman islands	June. 30	Capital investment
	Mangrove Feeder Fund	100.00	%	Cayman islands	June. 30	Capital investment
	LB Irealand Private Real Estate Investment Trust 8	99.85	%	Korea	June. 30	Capital investment
	KTB Aircraft Private Investment Trust No.21-1	99.61	%	Korea	June. 30	Capital investment
	Pacific US Blackrock Private Placement Real Estate Fund No. 15	99.50	%	Korea	June. 30	Capital investment
	Vestas Qualified Investors Private Real Estate Fund Investment Trust No. 38	54.84	%	Korea	June. 30	Capital investment
	Hyundai Strong-small Corporate Trust[Stock]	79.76	%	Korea	June. 30	Capital investment
	Capstone US Professional Investment Private Fund #6	99.79	%	Korea	June. 30	Capital investment
	DAEDUCK PARC1 PRIVATE EQUITY FUND 1	98.28	%	Korea	June. 30	Capital investment
	Hangang Domestic Private Real Estate Fund 13	80.33	%	Korea	June. 30	Capital investment

147

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

KB Insurance Co., Ltd.	Leading Insurance Services, Inc.	100.00	%	United States of America	June. 30	Management service
	LIG Insurance (China) Co., Ltd.	100.00	%	China	June. 30	Non-life insurance
	PT. KB Insurance Indonesia	70.00	%	Indonesia	June. 30	Non-life insurance
	KB Claims Survey & Adjusting	100.00	%	Korea	June. 30	Claim service
	KB Sonbo CNS	100.00	%	Korea	June. 30	Management service
	KB Golden Life Care Co., Ltd.	100.00	%	Korea	June. 30	Service
	KB AMP Infra Private Special Asset Fund 1(FoFs) 3	41.67	%	Korea	June. 30	Capital investment
	KB Muni bond Private Securities Fund 1(USD)(bond)3	33.33	%	Korea	June. 30	Capital investment
	KB CHILE SOLAR FUND	80.00	%	Korea	June. 30	Capital investment
	Meritz Private Specific Real Estate Fund1-2	87.21	%	Korea	June. 30	Capital investment
	KB Global Private Real Estate Debt Fund 13	50.00	%	Korea	June. 30	Capital investment
	Hana Landchip Real estate Private Fund 58th	99.99	%	Korea	June. 30	Financial investment
	Hyundai Aviation Private Fund 3rd	99.96	%	Korea	June. 30	Financial investment
	Hyundai Power Professional Investment Type Private Investment Fund No. 4	99.78	%	Korea	June. 30	Financial investment
	KB U.S. LongShort Private Securities Fund 1	99.39	%	Korea	June. 30	Financial investment
	Hyundai Infra Professional Investment Type Private Investment Trust No. 5	99.80	%	Korea	June. 30	Financial investment
	KB SAUDI SEPCO II Private Special Asset Fund	80.00	%	Korea	June. 30	Financial investment
	Meritz Private Real Estate Fund 8	99.36	%	Korea	June. 30	Financial investment

148

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

	Hyundai Star Private Real Estate Investment Trust No. 14	99.98	%	Korea	June. 30	Financial investment
	Vogo debt strategy private real estate fund VII	99.00	%	Korea	June. 30	Financial investment
	KORAMCO Europe Debt Strategy Private Real-Estate Fund 2nd	99.80	%	Korea	June. 30	Capital investment
	KB Peru Transmission Facility Investment Private Fund	99.03	%	Korea	June. 30	Capital investment
	KB Global Private Real Estate Debt Fund 2	98.36	%	Korea	June. 30	Capital investment
	KB Europe Private Real Estate Debt Fund 1	57.14	%	Korea	June. 30	Capital investment
	KB AU Infigen Energy Private Special Asset Fund 23	47.37	%	Korea	June. 30	Capital investment
	Multi Asset Global Private Debt Fund 6	99.60	%	Korea	June. 30	Capital investment
KB Kookmin Card Co., Ltd.	KB DAEHAN SPECIALIZED BANK PLC.	90.00	%	Cambodia	June. 30	Banking
	KB Kookmin Card 3rd Securitization Co., Ltd. and 3 others2	0.50	%	Korea	June. 30	Asset-backed securitization
	Heungkuk Life Insurance Money Market Trust	100.00	%	Korea	June. 30	Trust asset management
KB Asset Management Co., Ltd.	KBAM Shanghai Advisory Services Co., Ltd	100.00	%	China	June. 30	General advisory
	KB Star Office Private Real Estate Feeder fund3-2	88.00	%	Korea	June. 30	Capital investment
	KB Asset Management Singapore Pte, Ltd.	100.00	%	Singapore	June. 30	Collective investment
	KB Global Equity Solution Securities Feeder Fund(Equity-FoFs) 3	31.21	%	Korea	June. 30	Capital investment

149

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

	KB Global Multiasset Income Securities Feeder Fund(Bond Mixed-FoFs)	91.93	%	Korea	June. 30	Capital investment
	KB Active Investor Secruticies Investment Trust(Derivatives Mixed)	73.56	%	Korea	June. 30	Capital investment
	KB G2 Plus Korea Securities Fund(Equity)	82.74	%	Korea	June. 30	Capital investment
	KB Hedge Fund Solution Mixed Asset Fund(FoFs)	97.38	%	Korea	June. 30	Capital investment
	KB OCIO Global Asset Allocation Private Fund 1	83.45	%	Korea	June. 30	Capital investment
	KB Global Big data Research Securities Feeder Fund(Equity)(H)	99.43	%	Korea	June. 30	Capital investment
	KBLong-term Total Return Performance Fee Securities Investment Trust(Equity-mixed)	55.95	%	Korea	June. 30	Capital investment
	KB Global Good Investment ESG Securities Feeder Fund(Equity)(H)	86.34	%	Korea	June. 30	Capital investment
	KB Star Office Private Real Estate Investment Trust 53	37.11	%	Korea	June. 30	Capital investment
KB Life Insurance Co., Ltd.	KB Evergreen Private Securities Fund No. 59(Bond)	100.00	%	Korea	June. 30	Private fund
	KB Haeoreum Private Securities Investment Trust 1st(debt securities)	100.00	%	Korea	June. 30	Private fund

150

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

KB Investment Co., Ltd.	2011KIF-KB IT Venture Fund4	43.33	%	Korea	June. 30	Capital investment
	KoFC-KB Young Pioneer 1st Fund4	33.33	%	Korea	June. 30	Capital investment
	KB NEW CONTENTS Venture Fund4	20.00	%	Korea	June. 30	Capital investment
	KB Young Pioneer 3.0 Venture Fund4	40.00	%	Korea	June. 30	Capital investment
	KB Pre IPO Secondary Venture Fund 24	21.00	%	Korea	June. 30	Capital investment
	KB Contents Panda iMBC Contents Venture Fund4	20.00	%	Korea	June. 30	Capital investment
	KB Culture & Global Digital Contents Fund Limited partnership4	22.50	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Investment Co., Ltd.	KB12-1 Venture Investment	100.00	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Investment Co., Ltd.	KBStart-up Creation Fund	62.50	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Investment Co., Ltd.	KB Intellectual Property Fund4	34.00	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Investment Co., Ltd., KB Capital Co., Ltd.	KB Intellectual Property Fund 2	75.00	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Securities Co., Ltd.,	Meritz Private Real Estate Fund9-2	100.00	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Insurance Co., Ltd., KB Securities Co., Ltd., KB Real Estate Trust Co., Ltd.	KB Wise Star Private Real Estate Feeder Fund 1st.	100.00	%	Korea	June. 30	Investment trust
Kookmin Bank, KB Securities Co., Ltd., KB Insurance Co., Ltd., KB life Insurance, KB Asset Management Co., Ltd.	KB Global Core Bond Securities Fund Master Fund(Bond)	99.69	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Securities Co., Ltd., KB Insurance Co., Ltd., KB life Insurance, KB Kookmin Card Co., Ltd., KB Capital Co., Ltd.	KB digital innovation & growth New Technology Business Investment Fund	100.00	%	Korea	June. 30	Capital investment

151

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Kookmin Bank, KB Securities Co., Ltd., KB Insurance Co., Ltd., KB Kookmin Card Co., Ltd., KB Capital Co., Ltd., KB Investment Co., Ltd.	KB Global Platform Fund	100.00	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Insurance Co., Ltd.	Hanbando BTL Private Special Asset Fund 1st3	46.36	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Insurance Co., Ltd.	KB KBSTARMid-Long Term KTB Active ETF3	48.15	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Insurance Co., Ltd.	KB KBSTAR KTB 3Y Futures Inverse ETF	95.63	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Insurance Co., Ltd.	KB Mezzanine Private Securities Fund 3rd3	25.33	%	Korea	June. 30	Capital investment
KB Securities Co., Ltd., KB Insurance Co., Ltd., KB Asset Management Co., Ltd.	KB Star Office Private Real Estate Investment Trust 4	51.96	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Insurance Co., Ltd., KB life Insurance Co., Ltd.	KB Hope Sharing BTL Private Special Asset3	46.00	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Insurance Co., Ltd., KB life Insurance Co., Ltd.	KB Senior Loan Private Fund3	37.39	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Insurance Co., Ltd., KB life Insurance Co., Ltd.	KB New Renewable Energy Private Special Asset Fund 1	100.00	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Insurance Co., Ltd., KB life Insurance Co., Ltd., KB Investment Co.	KB High-tech Company Investment Fund	100.00	%	Korea	June. 30	Capital investment
Kookmin Bank, KB Insurance Co., Ltd., KB Investment Co., Ltd., KB Capital Co., Ltd.	KB Digital Innovation Investment Fund Limited partnership	62.51	%	Korea	June. 30	Capital investment
Kookmin Bank, KB life Insurance Co., Ltd.	KB Mezzanine Private Security Investment Trust No. 23	40.74	%	Korea	June. 30	Capital investment

152

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Kookmin Bank, KB Asset management Co., Ltd.	KB Onkookmin TDF 2025 Master Fund(Fofs) 3	31.54	%	Korea	June. 30	Financial investment
Kookmin Bank, KB Asset management Co., Ltd.	KB Onkookmin TDF 2030 Master Fund(Fofs) 3	28.47	%	Korea	June. 30	Financial investment
KB Securities Co., Ltd., KB Insurance Co., KB Asset Management Co., Ltd.	KB Star Fund KB Value Focus Korea Equity	98.03	%	Luxemburg	June. 30	Capital investment
KB Securities Co., Ltd., KB Asset Management Co., Ltd., KB Star Office Private Real Estate Investment Trust No.5	KB Wise Star Private Real Estate Feeder Fund 2nd	88.23	%	Korea	June. 30	Capital investment
KB Securities Co., Ltd., KB Asset Management Co., Ltd.	KB Onkookmin Life Income RIF 20feeder Fund(Fofs)	99.20	%	Korea	June. 30	Capital investment
KB Securities Co., Ltd., KB Asset Management Co., Ltd.	KB Onkookmin Life Income RIF 40feeder Fund(Fofs)	98.34	%	Korea	June. 30	Capital investment
KB Securities Co., Ltd., KB Asset Management Co., Ltd.	KB Onkookmin TDF 2045 Master Fund(Fofs) 3	36.48	%	Korea	June. 30	Financial investment
KB Securities Co., Ltd., KB Investment Co., Ltd.	KB KONEX Market Vitalization Fund4	46.88	%	Korea	June. 30	Capital investment
KB Securities Co., Ltd., KB Investment Co., Ltd.	KB Neo Paradigm Agriculture Venture4	50.00	%	Korea	June. 30	Capital investment
KB Securities Co., Ltd., KB Investment Co., Ltd.	KB New Paradigm Fisheries Venture Fund4	33.33	%	Korea	June. 30	Capital investment
KB Securities Co., Ltd., KB life Insurance Co.	KB AU Infigen Energy Private Special Asset Fund	100.00	%	Korea	June. 30	Capital investment
KB Insurance Co., Ltd., KB life Insurance Co., Ltd., KB Investment Co., Ltd.	KB-Solidus Global Healthcare Fund3	43.33	%	Korea	June. 30	Capital investment

153

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

KB Kookmin Card Co., Ltd., KB Capital Co., Ltd.	KB KOLAO LEASING CO., Ltd	80.00	%	Laos	June. 30	Auto installment finance
KB Global Big data Research Securities Feeder Fund(Equity)(H)	KB Global Big data Research Securities Master Fund(Equity)(H)	100.00	%	Korea	June. 30	Capital investment
KB Global Good Investment ESG Securities Feeder Fund(Equity)(H)	KB Global Good Investment ESG Securities Master Fund(Equity)(H)	100.00	%	Korea	June. 30	Capital investment
KB Onkookmin Life Income RIF 20feeder Fund(Fofs)	KB Onkookmin Life Income RIF 20 Master Fund(Fofs)	92.17	%	Korea	June. 30	Capital investment
KB Onkookmin Life Income RIF 40feeder Fund(Fofs)	KB Onkookmin Life Income RIF 40 Master Fund(Fofs)	91.24	%	Korea	June. 30	Capital investment
KBFG Securities America Inc.	Global Investment Opportunity Limited	100.00	%	Malaysia	June. 30	Financial and real estate investment
KB Global Multiasset Income Securities Feeder Fund(Bond Mixed-FoFs)	KB Global Multiasset Income Securities Master Fund(Bond Mixed-FoFs)	74.11	%	Korea	June. 30	Capital investment
KB Global Equity Solution Securities Feeder Fund(Equity-FoFs))	KB Global Equity Solution Securities Master Fund(Equity-FoFs)	100.00	%	Korea	June. 30	Capital investment
KB Global Core Bond Securities Feeder Fund(Bond)	KB Global Core Bond Securities Master Fund(Bond)	100.00	%	Korea	June. 30	Capital investment
KB Wise Star Private Real Estate Feeder Fund 1st, KB Wise Star Private Real Estate Feeder Fund 2nd.	KB Wise Star Jongno Tower Real Estate Master Fund	100.00	%	Korea	June. 30	Capital investment
KB Wise Star Private Real Estate Feeder Fund 1st.	KB Star Office Private Real Estate Master Investment Trust 25	44.44	%	Korea	June. 30	Capital investment
KB Wise Star Private Real Estate Feeder Fund 1st., KB Securities Co., KB Asset Management Co., Ltd.	KB Star Office Private Real Estate Investment Trust 3	54.51	%	Korea	June. 30	Capital investment

154

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

LB Irealand Private Real Estate Investment Trust 8	BECKETT ACQUISITION LIMITED	100.00	%	Ireland	June. 30	Real Estate Activities
Mangrove Feeder Fund	Mangrove Master Fund	100.00	%	Cayman islands	June. 30	Capital investment
Mirae Asset Triumph Global Privately placed Feeder Investment Trust 1	Mirae Asset Triumph Global Privately placed Master Investment Trust 1	100.00	%	Korea	June. 30	Capital investment
Mirae Asset Triumph Global Privately placed Feeder Investment Trust 1	Mirae Asset Triumph Global Privately placed Master Investment Trust 2	100.00	%	Korea	June. 30	Capital investment
Hyundai Dynamic Mix Securities Feeder Investment Trust	Hyundai Dynamic Mix Securities Master Investment Trust	98.63	%	Korea	June. 30	Capital investment
Hyundai Value Plus Securities Feeder Investment Trust 1 and Hyundai Kidzania Equity Feeder Trust No.1	Hyundai Value Plus Securities Master Investment Trust	100.00	%	Korea	June. 30	Capital investment
Hyundai Smart Index Alpha Securities Feeder Inv Trust 1	Hyundai Smart Index Alpha Securities Master Investment Trust	99.89	%	Korea	June. 30	Capital investment
Hyundai Quant Long Short Securities Feeder Investment Trust 1	Hyundai Quant Long Short Securities Master Investment Trust	100.00	%	Korea	June. 30	Capital investment
Hyundai Strong Korea Equity Trust No.1	Hyundai Strong Korea Equity Trust No.1[Master]	65.84	%	Korea	June. 30	Capital investment
Heungkuk Global Highclass Private Real Estate Trust 23	HYUNDAI ABLE INVESTMENT REIT	99.90	%	United States of America	June. 30	Real Estate Activities
ABLE NJ DSM INVESTMENT REIT	ABLE NJ DSM, LLC	100.00	%	United States of America	June. 30	Real Estate Activities
AGRAF Real Estate Holding No.1, Senningerberg	Vierte CasaLog GmbH & Co. KG	94.90	%	Germany	June. 30	Real Estate Activities
AGRAF Real Estate Holding No.1, Senningerberg	HD 1 Grundstucksgese llschaft mbH & Co. KG	94.90	%	Germany	June. 30	Real Estate Activities

155

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

AGRAF Real Estate Holding No.1, Senningerberg	Sechste Casalog KG	94.90	%	Germany	June. 30	Real Estate Activities
AGRAF Real Estate No.1, Senningerberg	AGRAF Real Estate Holding No.1, Senningerberg	100.00	%	Luxembourg	June. 30	Asset-backed securitization
Aquila Global Real Assets Fund No.1 LP	AGRAF Real Estate No.1, Senningerberg	100.00	%	Luxembourg	June. 30	Asset-backed securitization
HYUNDAI ABLE INVESTMENT REIT	HYUNDAI ABLE PATRIOTS PARK, LLC	100.00	%	United States of America	June. 30	Real Estate Activities
JB New Jersey Private Real Estate Investment Trust No. 1	ABLE NJ DSM INVESTMENT REIT	99.18	%	United States of America	June. 30	Real Estate Activities
Kookmin Bank1	Personal pension trusts and 10 other trusts	—		Korea	June. 30	Trust

¹ The Group controls the trust because it has power that determines the management performance over the trust and is exposed to variable returns to absorb losses through the guarantees of payment of principal, or payment of principal and fixed rate of return.

² Although the Group holds less than a majority of the investee’s voting rights, the Group controls these investees as it has power over relevant activities in case of default; is significantly exposed to variable returns by providing lines of credit or ABCP purchase commitments or due to acquisition of subordinated debt; and has ability to affect those returns through its power.

³ Although the Group holds less than a majority of the investee’s voting rights, the Group controls the investee as it has power over relevant activities by managing the fund; has significant percentage of ownership; is significantly exposed to variable returns which is affected by the performance of the investees; and has ability to affect the performance through its power.

⁴ Although the Group holds less than a majority of the investee’s voting rights, the Group controls the investee as it has power over relevant activities by taking the role of an operating manager and it is significantly exposed to variable returns which is affected by the performance of the investees, and has ability to affect the performance through its power.

⁵ Although the Group holds less than a majority of the investee’s voting rights, the Group participated directly in establishment of this entity and has power over relevant activities, and is significantly exposed to variable returns which is affected by the performance of the investee, and has ability to affect the performance through its power. Accordingly the Group has control over the investee.

⁶ The Group changed Kookmin Bank Int’l Ltd. (London) to Kookmin Bank London Branch on May 16, 2018, and this event is categorized as business combination of entities under common control. The assets and liabilities acquired under business combinations under common control are recognized at the carrying amounts in the consolidated financial statements of the Group. The transferred assets and liabilities due to this business combination areW 480,161 million andW 480,023 million, respectively.

156

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

The condensed financial information of major subsidiaries as of June 30, 2019 and December 31, 2018, and for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)

	June 30, 2019						2019
	Assets		Liabilities		Equity		Operating income		Profit (loss) for the period			Total compre- hensive income for the period
Kookmin Bank1	W	373,961,310	W	346,613,149	W	27,348,161	W	11,472,979	W	1,305,109		W	1,347,860
KB Securities Co., Ltd.1,2		44,731,565		40,129,449		4,602,116		4,507,410		168,890			179,111
KB Insurance Co., Ltd.1,2		36,087,142		32,225,047		3,862,095		6,380,595		166,153			365,754
KB Kookmin Card Co., Ltd.1		20,713,386		16,821,350		3,892,036		1,515,798		146,100			133,331
KB Asset Management Co., Ltd.1		257,271		84,493		172,778		75,468		25,720			26,026
KB Capital Co., Ltd.1,2		10,086,703		8,979,046		1,107,657		444,542		63,094			63,208
KB Life Insurance Co., Ltd.1		10,001,142		9,384,111		617,031		814,360		16,524			64,799
KB Real Estate Trust Co., Ltd.		341,997		80,222		261,775		55,822		30,640			30,640
KB Savings Bank Co., Ltd.		1,323,712		1,117,158		206,554		46,601		9,852			9,580
KB Investment Co., Ltd.1		731,757		526,150		205,607		36,647		2,103			2,166
KB Data System Co., Ltd.		39,674		20,796		18,878		70,402		2,486			2,470
KB Credit Information Co., Ltd.		29,084		14,115		14,969		19,307		(263	)		(266	)

157

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)

	December 31, 2018						2018
	Assets		Liabilities		Equity		Operating income		Profit (loss) for the period			Total compre- hensive income for the period
Kookmin Bank1	W	356,959,258	W	330,291,392	W	26,667,866	W	9,467,005	W	1,353,333		W	1,409,694
KB Securities Co., Ltd.1,2		45,086,292		40,613,423		4,472,869		3,441,454		152,831			173,948
KB Insurance Co., Ltd.1,2		34,785,551		31,289,706		3,495,845		6,120,200		188,115			145,488
KB Kookmin Card Co., Ltd.1		20,528,951		16,570,280		3,958,671		1,854,954		168,629			161,110
KB Life Insurance Co., Ltd.1		9,680,379		9,128,148		552,231		685,499		10,837			(12,717	)
KB Asset Management Co., Ltd.1		254,256		107,504		146,752		61,952		19,532			19,674
KB Capital Co., Ltd.1,2		9,517,239		8,516,838		1,000,401		343,631		67,157			67,223
KB Savings Bank Co., Ltd.		1,388,844		1,186,871		201,973		40,873		3,987			3,786
KB Real Estate Trust Co., Ltd.		293,063		57,229		235,834		56,255		20,313			20,314
KB Investment Co., Ltd.1		528,701		374,925		153,776		38,986		1,942			1,942
KB Credit Information Co., Ltd.		26,276		11,041		15,235		17,561		(379	)		(387	)
KB Data System Co., Ltd.		40,197		23,788		16,409		55,066		202			133

¹ Financial information is based on its consolidated financial statements.

² The amount includes the fair value adjustments due to the merger.

158

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Nature of the risks associated with interests in consolidated structured entities

The terms of contractual arrangements to provide financial support to a consolidated structured entity

• The Group has provided payment guarantees ofW 3,306,584 million to KBD Tower 1st L.L.C. and other subsidiaries.

• The Group provides capital commitment to KB Wise Star Private Real Estate Feeder Fund 1st. and 23 other subsidiaries. The unexecuted amount of the investment agreement isW 520,411 million. Based on the capital commitment, the Group is subject to increase its investment upon the request of the asset management company or the additional agreement among investors.

• The Group provides the guarantees of payment of principal, or principal and fixed rate of return in case the operating results of the trusts are less than the guaranteed principal, or principal and fixed rate of return.

Changes in subsidiaries

The subsidiaries newly included in consolidation during thesix-month period ended June 30, 2019, are as follows:

Company	Description
KBAM Shanghai Advisory Services Co.,Ltd and 9 others	Holds over than a majority of the ownership interests
KBH the 5th L.L.C and 34 others	Holds the power in the case of default and exposed to variable returns by providing lines of credit, ABCP purchase commitments or acquiring subordinated debt
KB New Renewable Energy Private Special Asset Fund 1 and 12 others	Holds the power to determine the operation of the trust and exposed to variable returns by holding significant amount of ownership interests
KB Culture & Global Digital Contents Fund Limited partnership and 1 other	The Group has a power over the investee as a general partner, is significantly exposed to variable returns due to significant percentage of ownership.

The subsidiaries excluded from consolidation during thesix-month period ended June 30, 2019, are as follows:

Company	Description
KH the 4th L.L.C and 26 others	Lost the right of variable returns due to the releasing debt
KB Evergreen Private Securities Fund 98(Bond) and 4 others	Liquidation
Hyundai China Index Plus Securities Investment Trust No.1 and 6 others	Disposal
KB Everyone TDF 2035 Securities Investment Trust—Bond Balanced-Fund of Funds and 3 others	Ownership decrease

159

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

40. Unconsolidated Structured Entity

The nature, purpose and activities of the unconsolidated structured entities and how the structured entities are financed, are as follows:

Nature	Purpose	Activity	Method of Financing
Structured financing	Granting PF loans and stocks to SOC and real estate Granting loans and stocks to ships/aircrafts SPC Project financing, such as mergers and acquisitions	Construction of SOC and real estate Building ships/ construction and purchase of aircrafts Mergers and acquisitions	Loan commitments through Credit Line, providing lines of credit and investment agreements
Investment funds	Investment in beneficiary certificates Investment in PEF and partnerships	Management of fund assets Payment of fund fees and allocation of fund profits	Sales of beneficiary certificate instruments Investment of managing partners and limited partners
Trusts	Management of financial trusts; -Development trust -Mortgage trust -Management trust -Disposal trust -Distribution and management trust -Other trusts	Development, management, and disposal of trusted real estate assets Payment of trust fees and allocation of trust profits.	Distribution of trusted real estate assets and financing of trust company Public auction of trusted real estate assets and financing of trust company
Asset-backed securitization	Early cash generation through transfer of securitization assets Fees earned as services to SPC, such as providing lines of credit and ABCP purchase commitments	Fulfillment of Asset-backed securitization plan Purchase and transfer of securitization assets Issuance and repayment of ABS and ABCP	Issuance of ABS and ABCP based on securitization assets

160

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Details of scale of unconsolidated structured entities and nature of the risks associated with the Group’s interests in unconsolidated structured entities as of June 30, 2019, and December 31, 2018, are as follows:

(In millions of Korean won)	June 30, 2019
	Structured financing		Investment funds		Trusts		Asset-backed securitization and others		Total
Total assets of unconsolidated structured entity	W	50,803,477	W	188,208,318	W	731,581	W	112,571,920	W	352,315,296
Carrying amount on financial statements
Assets
Financial assets at fair value through profit or loss		95,901		8,538,500		—		2,470,120		11,104,521
Derivative financial assets		—		457		—		9,096		9,553
Loans at amortized cost		2,993,791		335,242		17,917		582,998		3,929,948
Financial investments		—		—		—		6,026,513		6,026,513
Investment in associates		—		280,865		—		—		280,865
Other assets		5,511		49,287		87,337		5,815		147,950
	W	3,095,203	W	9,204,351	W	105,254	W	9,094,542	W	21,499,350
Liabilities
Deposits	W	559,247	W	56,568	W	—	W	391,135	W	1,006,950
Derivative financial liabilities		—		—		—		285		285
Other liabilities		973		82		—		14,237		15,292
	W	560,220	W	56,650	W	—	W	405,657	W	1,022,527
Maximum exposure to loss1
Holding assets	W	3,095,203	W	9,204,351	W	105,254	W	9,094,542	W	21,499,350
Purchase and investment commitments		11,396		2,642,155		—		529,567		3,183,118
Unused credit		702,492		1,450		—		1,961,450		2,665,392
Payment guarantee and loan commitments		1,965,722		11,671		—		471,300		2,448,693
	W	5,774,813	W	11,859,627	W	105,254	W	12,056,859	W	29,796,553
Methods of determining the maximum exposure to loss		Loan commitments /investment agreements / purchase commitments and acceptances and guarantees		Investments / loans and capital commitments		Dividends by results trust: Total amount of trust exposure		Providing lines of credit/ purchase commitments/ loan commitments and acceptances and guarantees

161

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	December 31, 2018
	Structured financing		Investment funds		Trusts		Asset-backed securitization and others		Total
Total assets of unconsolidated structured entity	W	43,775,805	W	121,481,888	W	519,609	W	125,240,129	W	291,017,431
Carrying amount on financial statements
Assets
Financial assets at fair value through profit or loss		129,367		7,934,662		—		3,846,725		11,910,754
Derivative financial assets		—		23,794		—		4,089		27,883
Loans at amortized cost		3,987,339		391,665		34,000		635,840		5,048,844
Financial investments		—		8,636		—		6,040,008		6,048,644
Investment in associates		—		258,594		—		—		258,594
Other assets		1,719		48,872		109,357		17,046		176,994
	W	4,118,425	W	8,666,223	W	143,357	W	10,543,708	W	23,471,713
Liabilities
Deposits	W	970,890	W	81,502	W	—	W	291,465	W	1,343,857
Derivative financial liabilities		—		6,232		—		1,285		7,517
Other liabilities		1,334		59		—		28,373		29,766
	W	972,224	W	87,793	W	—	W	321,123	W	1,381,140
Maximum exposure to loss1
Holding assets	W	4,118,425	W	8,666,223	W	143,357	W	10,543,708	W	23,471,713
Purchase and investment commitments		—		3,345,947		—		1,094,489		4,440,436
Unused credit		6,789		1,450		—		2,211,226		2,219,465
Payment guarantee and loan commitments		1,582,943		—		—		519,633		2,102,576
	W	5,708,157	W	12,013,620	W	143,357	W	14,369,056	W	32,234,190
Methods of determining the maximum exposure to loss		Loan commitments /investment agreements / purchase commitments and acceptances and guarantees		Investments / loans and capital commitments		Dividends by results trust: Total amount of trust exposure		Providing lines of credit/ purchase commitments/ loan commitments and acceptances and guarantees.

¹  Maximum exposure to loss includes the asset amounts, after deducting loss (provision for assets, impairment losses and others), recognized in the financial statements of the Group.

162

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

41. Related Party Transactions

Profit and loss arising from transactions with related parties for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)		2019		2018
Associates and joint ventures
Balhae Infrastructure Fund	Fee and commission income	W	3,338	W	3,314
Korea Credit Bureau Co., Ltd.	Interest expense		18		73
	Fee and commission income		546		686
	Insurance income		1		—
	Fee and commission expense		1,068		884
	Provision for credit losses		1		—
KoFC KBIC Frontier Champ2010-5(PEF)1	Fee and commission income		—		197
KB GwS Private Securities Investment Trust	Fee and commission income		422		422
Incheon Bridge Co., Ltd.	Interest income		4,423		4,615
	Interest expense		220		146
	Fee and commission income		12		—
	Fee and commission expense		3		—
	Insurance income		143		220
	Gains on financial assets/liabilities at fair value through profit or loss		3,287		165
	Reversal for credit losses		—		6
KoFC POSCO HANHWA KB Shared Growth Private Equity Fund No. 2	Fee and commission income		89		120
Aju Good Technology Venture Fund	Interest expense		14		14
KB Star Office Private Real Estate Investment Trust No.1	Interest income		183		183
	Interest expense		53		45
	Fee and commission income		216		237
RAND Bio Science Co., Ltd.	Interest expense		2		3
SY Auto Capital Co., Ltd.	Interest income		650		615
	Fee and commission income		26		29
	Fee and commission expense		235		528
	Insurance income		13		20
	Other operating income		347		307
	Other operating expense		189		134
	Provision for credit losses		—		11
Food Factory Co., Ltd.	Interest income		10		4
	Insurance income		2		2
	Fee and commission expense		8		1
	Gains on financial assets/liabilities at fair value through profit or loss		32		6
KB Pre IPO Secondary Venture Fund 1st	Interest expense		3		16
	Fee and commission income		55		55

163

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Builton Co., Ltd.	Interest income	2	2
	Insurance income	1	1
	Gains on financial assets/liabilities at fair value through profit or loss	4	—
	Losses on financial assets/liabilities at fair value through profit or loss	—	1
KB Private Equity Fund III	Fee and commission income	238	279
Wise Asset Management Co., Ltd.	Interest expense	1	5
Acts Co., Ltd.	Insurance income	—	1
	Gains on financial assets/liabilities at fair value through profit or loss	30	—
	Losses on financial assets/liabilities at fair value through profit or loss	—	1,088
	Othernon-operating expense	—	1,138
Dongjo Co., Ltd.	Reversal for credit losses	—	31
	Insurance income	2	—
A-PRO Co., Ltd.	Interest expense	1	—
	Insurance income	2	2
POSCO-KB Shipbuilding Fund	Fee and commission income	245	245
	Interest expense	—	36
Dae-A Leisure Co., Ltd.	Interest expense	4	5
Paycoms Co., Ltd.	Interest income	5	5
	Insurance income	1	—
	Gains on financial assets/liabilities at fair value through profit or loss	87	70
Big Dipper Co., Ltd.	Reversal for credit losses	—	2
KB-KDBCPre-IPO New Technology Business Investment Fund	Interest expense Fee and commission income	26 149	18 171
KBTS Technology Venture Private Equity Fund	Fee and commission income	239	141
KB-SJ Tourism Venture Fund	Fee and commission income	169	145
JLK Inspection, Inc.	Interest income	—	4
	Interest expense	1	—
TESTIAN Inc.	Interest income	2	3
	Gains on financial assets/liabilities at fair value through profit or loss	29	92
Iwon Alloy Inc.	Insurance income	1	—
RMGPBio-Pharma Investment Fund, L.P.	Othernon-operating income	17	—
	Gains on financial assets/liabilities at fair value through profit or loss	119	—
	Losses on financial assets/liabilities at fair value through profit or loss	850	—
Hasys Inc.	Gains on financial assets/liabilities at fair value through profit or loss	128	—
	Insurance income	22	—

164

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

KB-Brain KOSDAQScale-up New Technology Business Investment Fund	Interest expense Fee and commission income	59 183		—   —
Spark Biopharma, Inc.	Interest expense	9		—
SKYDIGITAL INC	Fee and commission income	2		—
KB No.8 Special Purpose Acquisition Company1	Interest expense	—		17
	Losses on financial assets/liabilities at fair value through profit or loss	—		2,007
KB No.9 Special Purpose Acquisition Company1	Interest expense	(23	)	20
	Gains on financial assets/liabilities at fair value through profit or loss	—		197
KB No.10 Special Purpose Acquisition Company	Interest expense	14		14
	Gains on financial assets/liabilities at fair value through profit or loss	3,066		105
KB No.11 Special Purpose Acquisition Company	Interest expense	5		—
	Gains on financial assets/liabilities at fair value through profit or loss	180		99
KB No.17 Special Purpose Acquisition Company	Fee and commission income	175		—
	Gains on financial assets/liabilities at fair value through profit or loss	1,461		—
	Interest expense	13		—
KB No.18 Special Purpose Acquisition Company	Fee and commission income	263		—
	Gains on financial assets/liabilities at fair value through profit or loss	2,200		—
	Interest expense	8		—
KB SPROTT Renewable Private Equity Fund I	Fee and commission income	123		—
KB-Stonebridge Secondary Private Equity Fund	Fee and commission income	288		—
KOSESEUJITO CO., LTD.	Gains on financial assets/liabilities at fair value through profit or loss	7		—
CWhy Inc.	Insurance income	1		—
Stratio, Inc.	Interest expense	1		—
NEXOLON CO.,LTD.	Interest expense	2		—
CellinCells Co., Ltd	Interest expense	10		—
Keystone-Hyundai Securities No. 1 Private Equity Fund	Fee and commission income	50		29
Doosung Metal Co., Ltd.	Insurance income	—		1
Other
Retirement pension	Fee and commission income Interest expense	466 2		437 1

¹ Excluded from the Group’s related party as of June 30, 2019.

The Group has purchased installment assets amounting toW 581,471 million andW 375,988 million for the three months periods ended June 30, 2019 and 2018, respectively, from SY Auto Capital Co., Ltd.

165

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Details of receivables and payables, and related allowances for loans losses arising from the related party transactions as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)

Associates and joint ventures		June 30, 2019		December 31, 2018
Balhae Infrastructure Fund	Other assets	W	1,692	W	1,708
Korea Credit Bureau Co., Ltd.	Loans at amortized cost (Gross amount)		42		22
	Deposits		7,250		15,674
	Provisions		1		—
	Insurance contract liabilities		4		—
	Other liabilities		60		98
KB GwS Private Securities Investment Trust	Other assets		212		641
Incheon Bridge Co., Ltd.	Financial assets at fair value through profit or loss		36,168		32,882
	Loans at amortized cost (Gross amount)		152,958		158,206
	Allowances for loan losses		15		15
	Other assets		695		736
	Deposits		44,685		43,666
	Provisions		10		10
	Insurance contract liabilities		229		113
	Other liabilities		160		24
KoFC POSCO HANHWA KB Shared Growth Private Equity Fund No. 2	Other assets		89		90
Jungdo Co., Ltd.	Deposits		4		4
Dongjo Co., Ltd.	Insurance contract liabilities		1		2
Dae-A Leisure Co., Ltd.	Deposits		1,191		1,229
	Other liabilities		10		7
Aju Good Technology Venture Fund	Deposits		1,832		6,439
	Other liabilities		1		2
Doosung Metal Co., Ltd.	Deposits		3		3
KB Star Office Private Real Estate Investment Trust No.1	Loans at amortized cost (Gross amount)		10,000		10,000
	Allowances for loan losses		4		4
	Other assets		136		136
	Deposits		8,306		7,946
	Other liabilities		54		58
KB-Brain KOSDAQScale-up New Technology Business Investment Fund	Deposits		6,692		18,813
	Other liabilities		3		7
KB IGen Private Equity Fund No.1	Deposits		147		148
KB Cape No.1 Private Equity Fund	Financial assets at fair value through profit or loss		2,000		—

166

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

RAND Bio Science Co., Ltd.	Deposits	8,211	232
	Loans at amortized cost (Gross amount)	2	1
SY Auto Capital Co., Ltd.	Loans at amortized cost (Gross amount)	47,490	48,356
	Allowances for loan losses	16	18
	Other assets	96	94
	Deposits	5	5
	Provisions	13	11
	Insurance contract liabilities	22	6
	Other liabilities	79	102
Food Factory Co., Ltd.	Financial assets at fair value through profit or loss	562	530
	Loans at amortized cost (Gross amount)	1,196	200
	Allowances for loan losses	1	1
	Other assets	3	1
	Deposits	402	68
	Insurance contract liabilities	1	3
KB Pre IPO Secondary Venture Fund 1st	Other assets	28	—
	Deposits	77	1,115
	Other liabilities	—	1
Builton Co., Ltd.	Other assets	1	1
	Financial assets at fair value through profit or loss	403	399
	Loans at amortized cost (Gross amount)	1	2
	Deposits	5	7
	Insurance contract liabilities	1	1
Wise Asset Management Co., Ltd.	Deposits	24	696
	Other liabilities	—	2
Acts Co., Ltd.	Loans at amortized cost (Gross amount)	68	—
	Intangible assets	—	530
	Deposits	103	29
	Insurance contract liabilities	1	—
	Other liabilities	100	530
POSCO-KB Shipbuilding Fund	Other assets	123	—
Paycoms Co., Ltd.	Other assets	—	1
	Financial assets at fair value through profit or loss	1,119	1,032
	Deposits	—	1
	Insurance contract liabilities	1	—
Big Dipper Co., Ltd.	Loans at amortized cost (Gross amount)	4	5
	Deposits	9	182
KB-KDBCPre-IPO New Technology Business Investment Fund	Deposits	2,029	7,088
	Other liabilities	1	3

167

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

A-PRO Co., Ltd.	Insurance contract liabilities	4	2
	Deposits	2,202	2,201
JLK Inspection, Inc.	Financial assets at fair value through profit or loss	11,300	7,300
	Deposits	1	—
TESTIAN Inc.	Other assets	1	1
	Financial assets at fair value through profit or loss	644	615
IWON ALLOY CO.,LTD.	Insurance contract liabilities	1	2
CARLIFE CO.,LTD.	Deposits	—	2
COMPUTERLIFE CO.,LTD.	Deposits	2	1
RMGPBio-Pharma Investment Fund, L.P.	Financial assets at fair value through profit or loss	3,160	3,051
	Other liabilities	18	35
RMGPBio-Pharma Investment, L.P.	Financial assets at fair value through profit or loss	7	4
Hasys.	Financial assets at fair value through profit or loss	5,992	5,864
	Insurance contract liabilities	7	29
SKYDIGITAL INC	Deposits	14	16
Rainist Co., Ltd.	Financial assets at fair value through profit or loss	2,504	2,504
	Deposits	1	1
Spark Biopharma, Inc.	Financial assets at fair value through profit or loss	6,500	6,500
	Deposits	1,210	2,630
	Other liabilities	19	19
HEYBIT, Inc.	Financial assets at fair value through profit or loss	250	250
Stratio, Inc.	Financial assets at fair value through profit or loss	1,000	1,000
	Deposits	1,453	516
Honest Fund, Inc	Financial assets at fair value through profit or loss	3,999	—
NEXOLON CO.,LTD.	Financial assets at fair value through profit or loss	300	—
CellinCells Co., Ltd	Financial assets at fair value through profit or loss	2,000	—
	Other liabilities	1	—
Joyang Industry Co., Ltd.	Deposits	4	—
KB No.9 Special Purpose Acquisition Company1	Financial assets at fair value through profit or loss	—	2,481
	Deposits	—	2,275
	Other liabilities	—	42
KB No.10 Special Purpose Acquisition Company	Financial assets at fair value through profit or loss	2,551	2,025
	Derivative financial assets	4,181	1,659
	Deposits	1,584	1,666
	Other liabilities	24	11

168

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

KB No.11 Special Purpose Acquisition Company	Financial assets at fair value through profit or loss	756	737
	Derivative financial assets	1,032	873
	Deposits	630	658
	Other liabilities	7	2
KB No.17 Special Purpose Acquisition Company	Financial assets at fair value through profit or loss	2,760	—
	Deposits	1,500	—
	Other liabilities	13	—
KB No.18 Special Purpose Acquisition Company	Financial assets at fair value through profit or loss	4,088	—
	Deposits	2,100	—
	Other liabilities	8	—
KOSESEUJITO CO., LTD.	Financial assets at fair value through profit or loss	1,442	—
CWhy Inc	Financial assets at fair value through profit or loss	2,000	—
	Insurance contract liabilities	1	—
Bomapp Inc.	Financial assets at fair value through profit or loss	1,999	—
ZOYI corporation INC.	Financial assets at fair value through profit or loss	2,000	—
Key management	Loans at amortized cost (Gross amount)	3,786	2,404
	Other assets	4	2
	Deposits	15,853	13,818
	Insurance contract liabilities	1,927	1,092
	Other liabilities	293	233
Other
Retirement pension	Other assets	374	331
	Other liabilities	64	16,388

¹  Excluded from the Group’s related party as of June 30, 2019.

According to Korean IFRS 1024, the Group includes associates, key management (including family members), and post-employment benefit plans of the Group and its related party companies in the scope of related parties. Additionally, the Group discloses balances (receivables and payables) and other amounts arising from the related party transactions in the notes to the consolidated interim financial statements. Refer to Note 12 for details on investments in associates and joint ventures.

Key management is the executive directors or above of the Parent Company and Kookmin Bank including their close family members and the companies they have control or joint control over.

169

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Significant lending transactions with related parties for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)		2019
		Beginning		Increase		Decrease			Ending
Associates
Korea Credit Bureau Co., Ltd.		W	22	W	42	W	(22	)	W	42
Incheon Bridge Co., Ltd.			191,088		3,294		(5,256	)		189,126
KB Star Office Private Real Estate Investment Trust No.1			10,000		—		—			10,000
KB Cape No.1 Private Equity Fund			—		2,000		—			2,000
RAND Bio Science Co., Ltd.			1		2		(1	)		2
SY Auto Capital Co., Ltd.			48,356		6,289		(7,155	)		47,490
Food Factory Co., Ltd.			730		1,038		(10	)		1,758
Builton Co., Ltd.			401		5		(2	)		404
Acts Co., Ltd.			—		68		—			68
Paycoms Co., Ltd.			1,032		87		—			1,119
Big Dipper Co., Ltd.			5		4		(5	)		4
JLK Inspection, Inc.			7,300		4,000		—			11,300
TESTIAN Inc.			615		29		—			644
RMGPBio-Pharma Investment Fund, L.P.			3,051		109		—			3,160
RMGPBio-Pharma Investment, L.P.			4		3		—			7
Hasys			5,864		128		—			5,992
Rainist Co., Ltd.			2,504		—		—			2,504
Spark Biopharma, Inc			6,500		—		—			6,500
HEYBIT, Inc			250		—		—			250
Stratio, Inc			1,000		—		—			1,000
Honest Fund, Inc			—		3,999		—			3,999
NEXOLON CO., LTD.			—		300		—			300
CellinCells Co., Ltd			—		2,000		—			2,000
KB No.9 Special Purpose Acquisition Company1	��		2,481		—		(2,481	)		—
KB No.10 Special Purpose Acquisition Company			2,025		526		—			2,551
KB No.11 Special Purpose Acquisition Company			737		19		—			756
KB No.17 Special Purpose Acquisition Company			—		2,760		—			2,760
KB No.18 Special Purpose Acquisition Company			—		4,088		—			4,088
KOSESEUJITO CO., LTD.			—		1,442		—			1,442
CWhy Inc			—		2,000		—			2,000
Bomapp Inc.			—		1,999		—			1,999
ZOYI corporation INC.			—		2,000		—			2,000
Key management			2,404		1,737		(355	)		3,786

170

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	2018
	Beginning		Increase		Decrease			Ending
Associates
Korea Credit Bureau Co., Ltd.	W	22		—		(8	)		14
Incheon Bridge Co., Ltd.		200,414		30,392		(34,859	)		195,947
Dongjo Co., Ltd.		116		—		(116	)		—
KB Star Office Private Real Estate Investment Trust No.1		10,000		—		—			10,000
RAND Bio Science Co., Ltd.		1		1		—			2
Inno Lending Co., Ltd.1		2		—		(1	)		1
SY Auto Capital Co., Ltd.		40,057		18,806		(11,157	)		47,706
Food Factory Co., Ltd.		679		507		(479	)		707
Builton Co., Ltd.		1		399		—			400
Acts Co., Ltd.		1,927		—		(1,927	)		—
Bungaejanter. Inc.1		425		—		(425	)		—
Paycoms Co., Ltd.		1,066		977		(1,066	)		977
Big Dipper Co., Ltd.		6		—		(3	)		3
JLK Inspection, Inc.		—		800		—			800
TESTIAN Inc.		—		576		—			576
KB No.8 Special Purpose Acquisition Company1		2,296		—		(2,296	)		—
KB No.9 Special Purpose Acquisition Company1		2,356		2,899		(2,356	)		2,899
KB No.10 Special Purpose Acquisition Company		1,603		1,979		(1,603	)		1,979
KB No.11 Special Purpose Acquisition Company		697		720		(697	)		720

¹ Excluded from the Group’s related party as of June 30, 2019.

171

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Significant borrowing transactions with related parties for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)	2019
	Beginning		Borrowing		Repayment			Others1			Ending
Associates
Korea Credit Bureau Co., Ltd.	W	15,674	W	—	W	(2,000	)	W	(6,424	)	W	7,250
Incheon Bridge Co., Ltd.		43,666		24,000		(4,000	)		(18,981	)		44,685
Doosung Metal Co., Ltd		3		—		—			—			3
Jungdo Co., Ltd.		4		—		—			—			4
Dae-A Leisure Co., Ltd.		1,229		—		—			(38	)		1,191
CARLIFE CO.,LTD.		2		—		—			(2	)		—
COMPUTERLIFE CO., LTD.		1		—		—			1			2
SKYDIGITAL INC		16		—		—			(2	)		14
Joyang Industry Co., Ltd.		—		—		—			4			4
Aju Good Technology Venture Fund		6,439		—		—			(4,607	)		1,832
KB-KDBCPre-IPO New Technology Business Fund		7,088		7,000		(7,000	)		(5,059	)		2,029
KB-Brain KOSDAQScale-up New Technology Business Investment Fund		18,813		—		—			(12,121	)		6,692
KB Star Office Private Real Estate Investment Trust No.1		7,946		2,926		(3,010	)		444			8,306
SY Auto Capital Co., Ltd.		5		—		—			—			5
KB No.9 Special Purpose Acquisition Company2		2,275		—		(2,266	)		(9	)		—
KB No.10 Special Purpose Acquisition Company		1,666		—		(180	)		98			1,584
KB No.11 Special Purpose Acquisition Company		658		—		—			(28	)		630
KB No.17 Special Purpose Acquisition Company		—		1,500		—			—			1,500
KB No.18 Special Purpose Acquisition Company		—		2,200		(100	)		—			2,100
RAND Bio Science Co., Ltd.		232		—		—			7,979			8,211
Wise Asset Management Co., Ltd.		696		—		(682	)		10			24
Builton Co., Ltd.		7		—		—			(2	)		5
Food Factory Co., Ltd.		68		—		—			334			402
Acts Co., Ltd.		29		—		—			74			103
Paycoms Co., Ltd.		1		—		—			(1	)		—
Big Dipper Co., Ltd.		182		—		—			(173	)		9
A-PRO Co., Ltd.		2,201		—		—			1			2,202
JLK Inspection, Inc.		—		—		—			1			1
Rainist Co., Ltd.		1		—		—			—			1
Spark Biopharma, Inc.		2,630		—		(1,000	)		(420	)		1,210
Stratio, Inc		516		—		—			937			1,453
NEXOLON CO.,LTD.		—		—		(200	)		200			—
KB IGen Private Equity Fund No.1		148		—		—			(1	)		147
KB Pre IPO Secondary Venture Fund 1st		1,115		—		—			(1,038	)		77
Key management3		13,818		8,383		(6,580	)		233			15,854

172

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)	2018
	Beginning		Borrowing		Repayment			Others1			Ending
Associates
Korea Credit Bureau Co., Ltd.	W	25,513	W	1,000	W	(7,000	)	W	(12,379	)	W	7,134
Incheon Bridge Co., Ltd.		48,795		—		—			(1,866	)		46,929
Terra Co., Ltd.		10		—		—			(10	)		—
Jungdong Steel Co., Ltd.		3		—		—			—			3
Doosung Metal Co., Ltd		—		—		—			1			1
Jungdo Instruction Co., Ltd.		4		—		—			—			4
Dae-A Leisure Co., Ltd.		466		479		(466	)		692			1,171
Daesang Techlon Co., Ltd.2		2		—		—			(2	)		—
CARLIFE CO.,LTD.		—		—		—			2			2
COMPUTERLIFE CO.,LTD.		—		—		—			2			2
Aju Good Technology Venture Fund		2,771		—		—			3,366			6,137
KB-KDBC New Technology Business Fund		7,500		—		—			(6,527	)		973
KB Star Office Private Real Estate Investment Trust No.1		6,962		329		—			288			7,579
SY Auto Capital Co., Ltd.		6		—		—			—			6
KB No.8 Special Purpose Acquisition Company2		2,339		—		(2,300	)		(39	)		—
KB No.9 Special Purpose Acquisition Company2		2,309		2,266		(2,234	)		(18	)		2,323
KB No.10 Special Purpose Acquisition Company		1,698		—		—			(21	)		1,677
KB No.11 Special Purpose Acquisition Company		530		—		—			153			683
RAND Bio Science Co., Ltd.		1,032		—		(500	)		897			1,429
Wise Asset Management Co., Ltd.		340		1,313		(1,164	)		4			493
Builton Co., Ltd.		26		—		—			8			34
Food Factory Co., Ltd.		1		—		—			4			5
Acts Co., Ltd.		4		—		—			(4	)		—
Paycoms Co., Ltd.		—		—		—			1			1
Big Dipper Co., Ltd.		473		—		—			(364	)		109
Rainist Co., Ltd.		—		—		—			223			223
Spark Biopharma, Inc.		—		—		(500	)		1,002			502
KB Pre IPO Secondary Venture Fund 1st		2,690		2,000		(4,000	)		1,104			1,794
POSCO-KB Shipbuilding Fund		—		14,000		(7,000	)		—			7,000
Inno Lending Co., Ltd. 2		41		—		—			142			183

¹  Transactions from operating activities with related parties (i.e. such as settlement, deposit on demend, etc) are netted.

² Excluded from the Group’s related party as of June 30, 2019.

³  Represents the transactions have started occurring since the current year.

173

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Significant investment and collection transaction with related parties for thesix-month periods ended June 30, 2019, is as follows:

(In millions of Korean won)	2019
	Equity investments		Withdrawal and others
Korea Credit Bureau Co., Ltd.	W	—	W	135
Balhae Infrastructure Company		191		3,429
KoFC KBIC Frontier Champ2010-5(PEF)1		—		138
KB GwS Private Securities Investment Trust		—		4,084
KBTS Technology Venture Private Equity Fund		1,792		—
KB-SJ Tourism Venture Fund		1,500		—
KB-Brain KOSDAQScale-up New Technology Business Investment Fund		5,000		—
KB Star Office Private Real Estate Investment Trust No. 1		—		624
KB Cape No.1 Private Equity Fund		2,000		—
KB No.9 Special Purpose Acquisition Company1		—		16
KB No.17 Special Purpose Acquisition Company		1		—
KB No.18 Special Purpose Acquisition Company		1		—
KB SPROTT Renewable Private Equity Fund I		472		—
KB-Stonebridge Secondary Private Equity Fund		7,070		—

¹  Excluded from the Group’s related party as of June 30, 2019.

Unused commitments to related parties as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)		June 30, 2019		December 31, 2018
Associates and joint ventures
Balhae Infrastructure Fund	Purchase of security investment	W	10,453	W	10,453
Korea Credit Bureau Co., Ltd.	Unused commitments of credit card		558		108
KoFC KBIC Frontier Champ2010-5(PEF)1	Purchase of security investment		—		2,150
	Preferred loss allowance agreement		—		10,000
KB GwS Private Securities Investment Trust	Purchase of security investment		876		876
Aju Good Technology Venture Fund	Purchase of security investment		1,960		1,960
Incheon Bridge Co., Ltd.	Loan commitments in Korean won		20,000		20,000
	Unused commitments of credit card		92		94
KoFC POSCO HANHWA KB Shared Growth Private Equity Fund No. 2	Purchase of security investment		12,550		12,550
	Preferred loss allowance agreement		10,000		10,000
SY Auto Capital Co., Ltd.	Loan commitments in Korean won		7,560		6,700
	Unused commitments of credit card		100		94

174

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

KB No.9 Special Purpose Acquisition Company1	Unused commitments of credit card		—		1
KB No.10 Special Purpose Acquisition Company	Unused commitments of credit card		5		5
RAND Bio Science Co., Ltd.	Unused commitments of credit card		23		24
Builton Co., Ltd.	Unused commitments of credit card		4		3
Food Factory Co., Ltd.	Unused commitments of credit card		24		11
Big Dipper Co., Ltd.	Unused commitments of credit card		96		95
KB Pre IPO Secondary Venture Fund 1st	Preferred loss allowance agreement		1,671		1,671
POSCO-KB Shipbuilding Fund	Purchase of security investment		7,500		7,500
KB-KDBC New Technology Business Investment Fund	Purchase of security investment		5,000		5,000
KBTS Technology Venture Private Equity Fund	Purchase of security investment		12,944		13,776
KB-SJ Tourism Venture Fund	Purchase of security investment		2,000		3,500
KB-Brain KOSDAQScale-up New Technology Business Investment Fund	Purchase of security investment		24,000		32,000
KB SPROTT Renewable Private Equity Fund I	Purchase of security investment		24,027		—
KB-Stonebridge Secondary Private Equity Fund1	Purchase of security investment		27,930		—
RMGPBio-Pharma Investment Fund, L.P.	Purchase of security investment	USD	9,531,827	USD	10,271,257
RMGPBio-Pharma Investment, L.P.	Purchase of security investment	USD	14,111	USD	15,847
Key management	Loan commitments in Korean won		1,622		1,832

¹  Excluded from the Group’s related party as of June 30, 2019.

Compensation to key management for thesix-month periods ended June 30, 2019 and 2018, are as follows:

(In millions of Korean won)

	2019
	Short-term employee benefits		Post- employment benefits		Share-based payments		Total
Registered directors (executive)	W	3,972	W	259	W	3,520	W	7,751
Registered directors(non-executive)		467		—		—		467
Non-registered directors		4,509		157		3,138		7,804
	W	8,948	W	416	W	6,658	W	16,022

175

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)

	2018
	Short-term employee benefits		Post- employment benefits		Share-based payments		Total
Registered directors (executive)	W	1,260	W	37	W	618	W	1,915
Registered directors(non-executive)		458		—		—		458
Non-registered directors		3,551		137		1,116		4,804
	W	5,269	W	174	W	1,734	W	7,177

176

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Collateral received from related parties as of June 30, 2019 and December 31, 2018, are as follows:

(In millions of Korean won)		June 30, 2019		December 31, 2018
Associates
KB Star Office Private Real Estate Investment Trust No.1	Real estate	W	13,000	W	13,000
Key management	Time deposits and others		186		401
	Real estate		2,798		3,182

As of June 30, 2019, Incheon Bridge Co., Ltd., a related party, provides fund management account, civil engineering completed risk insurance, and management rights as senior collateral amounting toW 611,000 million to a financial syndicate that consists of the Group and 5 other institutions, and as subordinated collateral amounting toW 384,800 million to subordinated debt holders that consist of the Group and two other institutions. Also, it provides certificate of credit guarantee amounting toW 400,000 million as collateral to a financial syndicate consisting of the Group and 5 other institution.

42. Changes in accounting policies-Implementation of Korean IFRS 1116Leases

The Group applied Korean IFRS 1116 retrospectively as of January 1, 2019. However, the financial statements for the year ended 2018 was not restated using the method allowed by transitional provisions. Therefore reclassification and adjustments under the new IFRS were recognized in the financial statements beginning on January 1, 2019.

At inception of a contract, the Group shall assess whether the contract is, or contains, a lease. They also identify whether the contract is, or contains, a lease according to IFRS on the date of initial application. However, the contracts written before the date of initial application are permitted to applying a practical expedient and the Group do not have to go through all the contracts. At inception of a contract, the Group shall assess whether the contract is, or contains, a lease based on the date of initial application.

For a contract that is, or contains, a lease, a lessee or lessor shall account for each lease component within the contract as a lease separately fromnon-lease components of the contract. Moreover, a lessee is permitted to elect, by class of underlying asset, not to separatenon-lease components from lease components, and instead account for each lease component and any associatednon-lease components as a single lease component. The Group applies practical expedient to all (or a part of) contracts that are, or contains a lease and elects to combinenon-lease components with a lease component and to account for them as a single lease component.

A lessee is required to recognize aright-of-use asset representing its right to use the underlying leased asset (lease assets) and a lease liability representing its obligation to make lease payments. Assets and liabilities arising from a lease are initially measured on a present value basis. Assets and liabilities arising from a lease are initially measured on a present value basis.

177

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

Lease liabilities include the net present value of the following lease payments.

• fixed payments (includingin-substance fixed payments), less any lease incentives

• variable lease payments that depend on an index or a rate

• amounts expected to be payable by the lessee under residual value guarantees

• the exercise price of a purchase option if the lessee is reasonably certain to exercise that option

• payments for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease

The lease payments shall be discounted using the interest rate implicit in the lease, if the rate can be readily determined. The Group has to determine the incremental borrowing rate if the interest rate cannot be readily determined, which defined as the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to theright-of-use asset in a similar economic environment.

The cost of theright-of-use asset shall comprise.

• the amount of the initial measurement of the lease liability

• any lease payments made at or before the commencement date, less any lease incentives received

• any initial direct costs incurred by the lessee

• an estimate of costs restoring the site

However, short-term lease (lease that, at the commencement date, has a lease term of 12 months or less) and lease oflow-value assets (For example, underlying leased asset under $ 5,000) are permitted to elect exceptional conditions. The Group applies the exemption of the standard for one time lease of real estate (for training purpose) and leases oflow-value assets(fundamental assetsW 5 million and less than $5,000).

Related to sale and leaseback, an entity (seller-lessee) is required to applying IFRS 15 ‘Revenue from Contracts with Customers’ to determine whether the transfer of an asset is accounted for as a sale of that asset. However, an entity shall not reassess sale and leaseback transactions entered into before the date of initial application.

A lessee may apply one of the standards to its leases either; retrospectively to each prior reporting period presented applying IAS 8Accounting Policies, Changes in Accounting Estimates and Errors (a full retrospective approach) or retrospectively with the cumulative effect of initially applying the Standard recognized at the date of initial application.

As of January 1, 2019, the Group initially adopted Korean IFRS 1116 using the modified retrospective method. Consequently, the comparative information has not been restated.

Regarding leases that were formerly classified as finance leases, the Group recognized the carrying amount of lease assets and liabilities in the statement of financial position immediately before the date of initial application as the carrying amount of theright-of-use asset and the lease liability at the date of initial application. The measurement principle from Korean IFRS 1116 was applied after the date of the initial application. The remeasured amounts of lease liabilities were recognized as the adjustedright-of-use asset immediately after the date of initial application.

178

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

(In millions of Korean won)

	January 1, 2019
Right-of-use asset
Discounts used lessee’s incremental borrowing rate at the date of current initial application	W	574,850
Add : Financial leased asset recognized at December 31, 2018		34,002
Right-of use asset recognized as of the date of initial application		608,852
Lease liability
Operating lease commitments disclosed at December 31, 2018		585,923
Discounted amount using the lessee’s incremental borrowing rate1 at the date of initial application		544,516
Add : Financial leased liability recognized at December 31, 2018		10,161
Lease liability recognized as of the date of initial application		554,677

¹  The incremental borrowing rate is 1.82%~6.95%.

The difference between the amount of theright-of-use asset and the lease liability is adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the consolidated statement of financial position immediately before the date of initial application.

The amounts recognized in statement of financial position

The amount related to lease recognized in statement of financial position as of June 30, 2019 is as follows:

(In millions of Korean won)	June 30, 2019
Right-of-use property and equipment1
Real estate	W	541,940
Vehicles		20,688
Others		21,387
		584,015
Right-of-use intangible assets2		16,166
		16,166
		600,181
Lease liabilities	W	573,617

¹  It is included in property and equipment of financial statements.

²  It is included in intangible assets of financial statements.

179

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

June 30, 2019 and 2018 (Unaudited), and December 31, 2018

The amounts recognized in statement of profit or loss

The amount related to lease recognized in statement of profit or loss for thesix-month periods ended June 30, 2019 is as follows:

(In millions of Korean won)	2019
Depreciation and amortization ofright-of-use assets
Real estate	W	126,915
Vehicles		9,545
Others		4,114
Intangible asset		4,840
	W	145,414
Interest expense on the lease liability(Included in finance charges)	W	6,172
Short-term lease payments (Included in administrative expenses)		1,039
Payments for leases oflow-value assets different from short-term leases (Included in administrative expenses)		797
Variable lease payments not included in the measurement of the lease liabilities (Included in administrative expenses)	W	6

180